GATX Corporation · NYSE:GATX

GATX — Investor Presentation (2022)

68 slides from GATX's investor presentation, 2022

  1. Slide 1: 2022 Company Overview

    2022 COMPANY OVERVIEW

  2. Slide 2: Table of Contents

    Table of Contents Section Slide No. History and Business Overview................................................................................................... 4 Railcar Leasing Business Model................................................................................................... 15

  3. Slide 3: Forward-Looking Statements

    Forward-Looking Statements Sta te ments in this presentation not based on historical facts a re "forwa rd-looking statements" within the meaning of the Private Se curities Litigation R eform Act of 1995 and, accordingly, involve known and unknown risk s and unce rtainties that are difficult to predi

  4. Slide 4: History and Business Overview

    History and Business Overview

  5. Slide 5: Forward Vision Statement

    V I S I O N S T A T E M E N T “ EMPOWERING OUR CUSTOMERS “ TO PROPEL THE WORLD FORWARD

  6. Slide 6: GATX's 124-Year History

    GATX’s 124-Year History $9.5B in assets & ~147K wholly owned railcars worldwide* Began Began Exited Formed Rolls-Royce Began rail manufacturing listing on railcar & Partners Finance investments Announced CEO railcars the NYSE manufacturing Affiliates (RRPF) in India Transition Plan Acquired 100% own

  7. Slide 7: GATX Business Segments

    GATX Business Segments Rail North America Rail International Portfolio Management Trifleet  One of the largest railcar lessors with  GATX Rail Europe (GRE) is a leading  Largely composed of our 50%  One of the largest tank container a diversified fleet of over 114,500 European tank car and freig

  8. Slide 8: GATX's Strong Global Presence

    GATX’s Strong Global Presence GATX Primary Rail Operations Footprint (excludes leasing footprint for RRPF and Trifleet) GATX Headquarters Locations  GATX Global Headquarters (Chicago, IL)  GATX Rail Europe (Vienna, Austria)  GATX Rail India (Gurgaon, India)  Trifleet (Dordrecht, Netherlands) Rol

  9. Slide 9: Capital Allocation Framework: Investment Volume

    Capital Allocation Framework PRIORITY 1 Investment Volume $1,132 $1,064 $1,031 $928 $860 $770 $715 $723 $621 $589 MILLIONS Invest in core, $8.4 billion** of service-intensive investments over assets to maximize the past decade shareholder value 2012 2013 2014 2015 2016 2017* 2018* 2019* 2020* 2021*

  10. Slide 10: Capital Allocation Framework: Leverage & Secured Assets

    Capital Allocation Framework PRIORITY 2 Leverage & Reduction of Secured Assets 5.0x 50% 4.0x 40% 2.9x 3.0x 30% Optimize the Maintain a solid balance sheet investment 2.0x 20% grade rating of at least BBB/Baa2 1.0x 10% 0.0x 0% 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Maintain capacity for op

  11. Slide 11: Capital Allocation Framework: Cash Returned to Shareholders

    Capital Allocation Framework PRIORITY 3 Cash Returned to Shareholders $1,500 $1,000 MILLIONS $500 In lockstep with Over the past Priorities 1 and 2, decade, $1.5 return excess cash to billion returned to $0 shareholders shareholders 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cumulative Divide

  12. Slide 12: GATX Financial Highlights

    GATX Financial Highlights Income Per Diluted Share, Adjusted ** $5.77 $5.37 $4.89 $5.06 $4.48 $4.41 $4.67 $4.59 $3.50 $2.81 2012 2013 2014 2015 2016 2017* 2018* 2019* 2020* 2021* Return on Equity, Adjusted** Investment Volume 18% 18% 15% $1,064 $1,132 14% 14% $1,031 13% 13% $928 MILLIONS 11% 11% 11%

  13. Slide 13: Key ESG Initiatives & Accomplishments

    Key ESG Initiatives & Accomplishments Independent Board Oversight Health Human Capital Environmental Community and Safety Management Impact Engagement  As a participant in an essential  Continue to increase female and  Published our inaugural  Continue to be largest corporate industry, successfu

  14. Slide 14: GATX Investment Highlights

    GATX Investment Highlights Disciplined Management Team Market Leadership in Essential Businesses Long-term focused and experienced in across majority of the markets we operate managing across business cycles globally Superior Asset Allocation Highly diversified portfolio of transportation Critical S

  15. Slide 15: Railcar Leasing Business Model

    Railcar Leasing Business Model

  16. Slide 16: Proven Business Model

    Proven Business Model LEASE MAXIMIZE the railcar to a the value of the quality customer at railcar by selling or an attractive rate for scrapping at the a term that reflects optimal time the business cycle BUY SERVICE the railcar at an the railcar in a economically attractive manner that and competi

  17. Slide 17: Business Model: Buy

    Business Model: BUY GATX North American Rail $800 Acquisition Source $600 MILLIONS $400 ADVANTAGE $200 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Committed Order Secondary Market Spot Order DISCIPLINED COMPETITIVE OPPORTUNISTIC BEST-IN-CLASS INVESTMENT APPROACH ASSET COST INVESTMENT TECHNI

  18. Slide 18: Business Model: Buy (Railcar Supply Strategy)

    Business Model: BUY GATX’s railcar supply strategy is to acquire railcars from a variety of sources versus manufacturing its own railcars. GATX’s Sources of Benefits of Railcar Railcar Supply Supply Strategy  Large, multi-year orders for  Access to attractively priced new cars from manufacturers r

  19. Slide 19: Business Model: Lease

    Business Model: LEASE Customers prefer GATX because of its diverse fleet, technical expertise to meet unique needs, and superior ongoing service. HIGH FLEET UTILIZATION STRONG CUSTOMER RELATIONSHIPS 98%+ 850+  Focus on utilization, adjusting rate  High-quality and diverse base of and term to captu

  20. Slide 20: Business Model: Service

    Business Model: SERVICE MAINTENANCE ENGINEERING TRAINING TECHNOLOGY REGULATORY  Customers rely on GATX to  GATX’s engineering team  GATX provides important  MyGATXRail.com provides  As a full-service railcar manage the complex process consists of mechanical, training to customers and customers

  21. Slide 21: Business Model: Maximize

    Business Model: MAXIMIZE GATX optimizes its fleet partly through selling railcars in the secondary market or scrapping them at the end of their useful lives. Our fleet of cost-advantaged, well-maintained modern railcars, leased to quality customers, allows us to realize significant remarketing incom

  22. Slide 22: Rail North America

    Rail North America

  23. Slide 23: GATX Rail North America Overview

    GATX Rail North America Overview Wholly Owned Car Type Average Locomotive Number of Countries of 2021 Fleet Count Count Fleet Age Count Customers Operation OVERVIEW U.S., Canada 114,500+ 160+ 22 years 565+ 850+ & Mexico Fleet Utilization* 10% 5% 99% 28% 14% Industries 98% Served 96% 20% 23% Chemical

  24. Slide 24: Industry Ownership: North America

    Industry Ownership: North America Approximately 1.63 million railcars RAILROADS LESSORS SHIPPERS TTX  Ownership of railcars continues  Shift from railroad- and  Shipper ownership share has  Railroad-owned equipment to decline shipper-owned railcars to declined slightly pool focused on box, flat,

  25. Slide 25: Industry Fleet & Ownership Mix: North America

    Industry Fleet & Ownership Mix: North America Railcars by Type Tank Car Ownership Share (Approximately 1.63M railcars) 18% <1% 4% 7% Lessor Shipper/Other 8% <1% Railroad 35% Bas ed on approximately 438K tank cars 82% 19% Freight Car Ownership Share 27% 14% Lessor Railroad 17% 47% Covered Hopper Flat

  26. Slide 26: Lessor Market Share: North America

    Lessor Market Share: North America Lessor Ownership Share Tank Car Lessor Ownership Share (Based on approximately 921K lessor-owned railcars) 15% 17% GATX 13% Union Tank Car 7% Trinity 26% 17% CIT 10% GATX SMBC 15% 32% 13% Other 6% GATX 19% Bas ed on approximately 359K lessor-owned tank cars 14% 13%

  27. Slide 27: Industry Shipments & Carloadings: North America

    Industry Shipments & Carloadings: North America Industry Shipment Composition Carloads Originated (Based on 2021 U.S and Canadian carloads of approximately 16.0M) (United States and Canada) 14 22% 25% 12 10 3% 4% 8 MILLIONS 5% 15% 5% 6 6% 15% 4 Coal & Coke Forest & Paper Products 2 Farm Products Met

  28. Slide 28: Industry Commodity Carloadings: North America

    Industry Commodity Carloadings: North America Quarterly Commodity Carload Traffic 2,500 2,000 1,500 THOUSANDS 1,000 500 0 4Q08 3Q09 4Q10 1Q12 4Q12 1Q14 2Q15 1Q16 2Q17 3Q18 2Q19 3Q20 4Q21 1Q08 2Q08 3Q08 1Q09 2Q09 4Q09 1Q10 2Q10 3Q10 1Q11 2Q11 3Q11 4Q11 2Q12 3Q12 1Q13 2Q13 3Q13 4Q13 2Q14 3Q14 4Q14 1Q1

  29. Slide 29: Industry Backlog: North America

    Industry Backlog: North America Cyclicality of the industry is illustrated by the backlog of orders at the railcar manufacturers. 160,000 Industry Backlogs 140,000 The 2013 to 2015 spike in 120,000 backlog was primarily due to the crude boom 100,000 80,000 Backlogs have moderated post-crude boom, wi

  30. Slide 30: Actively Managing Through Cycles

    Actively Managing Through Cycles GATX proactively manages changing market conditions by utilizing our strong customer relationships and the diversity of our fleet to adjust rate and term. STR O NG MARKET W EAK MAR KET STR O NG MARKET W EAK MAR KET 70 67 66 50% 63 62 60 54 40% 60 39% 30% 50 45 35% 41

  31. Slide 31: GATX Rail North America: Diverse Customer Portfolio

    GATX Rail North America: Diverse Customer Portfolio Credit Ratings of Top 50 Customer Families GATX serves Largest more than customer represents 850 individual less than 5% 18% 26% customers of total lease revenue 10% Average Top 20 customers relationship account for 46% tenure of top less than 10 c

  32. Slide 32: GATX Rail North America: Diverse Fleet

    GATX Rail North America: Diverse Fleet CAR TYPE COMMODITIES CARRIED % OF FLEET % OF NBV General Service Tank C ars: Ethanol & methanol, Food-grade oils, Lubricating oils, Light chemicals, 16.9% 24.3% >25k gallon Light petroleum products (crude oil, fuel oils, diesels, gasoline, etc.) General Service

  33. Slide 33: GATX Rail North America: Continuous Investment

    GATX Rail North America: Continuous Investment Car count increased 5%* Assets increased 37%* 140 $6.1 $5.9 $6 $5.7 $5.4 $5.6 120 $5.1 $5.2 $5.0 RAILCARS IN THOUSANDS $5 $4.5 $4.6 ASSETS IN BILLIONS 100 $4 80 $3 60 $2 40 $1 20 $0 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assets** Railcars *

  34. Slide 34: GATX Rail North America: Maintenance Network

    GATX Rail North America: Maintenance Network GATX is known for integrity, safety, and quality of our operations and superior execution. Extensive Customers Rely on Range of Services: Maintenance Network GATX  Routine maintenance &  In 2021, GATX performed regulatory programs  Eight maintenance ~4

  35. Slide 35: GATX Rail North America: Regulatory Environment Participation

    GATX Rail North America: Regulatory Environment Participation Deep Knowledge Tank Qualification FAST Act on Industry Interval Extension Response Regulations In response to regulations that Our employees are actively GATX is the only tank car owner set new standards for tank cars involved in numerous

  36. Slide 36: GATX Rail North America: Engineering

    GATX Rail North America: Engineering GATX’s engineering team, including experienced mechanical, structural, and chemical engineers, communicates regularly with customers and tailors solutions to meet their needs. AUTO CARRIER CONVERSION PROJECT  GATX Engineering successfully converted older Example

  37. Slide 37: GATX Rail North America: Technology Focus

    GATX Rail North America: Technology Focus GATX continually innovates for our customers. Shop Portal MyGATXRail RailPulse℠  Provides repair instructions to  Provides customers with up-to-date  Co-founded by GATX and four rail maintenance network shops information and relevant reports to industry p

  38. Slide 38: GATX Rail North America: Locomotive Leasing

    GATX Rail North America: Locomotive Leasing GATX owns more than 565 locomotives, 95% of which are four-axle locomotives. $200 Locomotive Fleet NBV $150 $125 MILLIONS $100 $50 Locomotive customers include:  Regional and short-line railroads $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021  Indu

  39. Slide 39: Rail International

    Rail International

  40. Slide 40: GATX Rail International Overview

    GATX Rail International Overview Fleet Car Type Average Fleet Number of Primary Countries 2021 Count Count Age (GRE) Customers of Operation 27,100+ in Europe (GRE) Germany, Poland, Austria, India, OVERVIEW 4,800+ in India 50+ 17 years 250+ Switzerland, Hungary, Czech Republic, France, The Netherland

  41. Slide 41: Industry Snapshot: Europe

    Industry Snapshot: Europe Relatively limited manufacturing capacity Railcar Ownership* (Based on approximately 680K railcars)  Helps avoid creating an excess supply of industry railcars Older industry fleet in need of replacement 35%  Key segments continue to demonstrate need to replace aging, sma

  42. Slide 42: Industry Fleet & Ownership Mix: Europe

    Industry Fleet & Ownership Mix: Europe Railcars by Type Tank Car Ownership Share (Approximately 680K railcars) 17% 5% Lessors 13% Railroad & Privately Owned 34% Bas ed on approximately 115K tank cars 83% 15% Freight Car Ownership Share 16% 17% 25% Lessor Railroad & Privately Owned Dry Bulk Wagons In

  43. Slide 43: Lessor Market Share: Europe

    Lessor Market Share: Europe Lessor Ownership Share Tank Car Lessor Ownership Share (Based on approximately 238K lessor-owned railcars) 20% GRE 11% 24% VTG 24% 2% Ermewa 24% Wascosa 8% GRE Touax Other 11% 13% 33% GRE 5% Bas ed on approximately 95K lessor-owned tank cars 36% 6% Freight Car Lessor Owne

  44. Slide 44: GATX Rail Europe: Major Rail Markets

    GATX Rail Europe (GRE): Major Rail Markets 72% of GRE’s revenue is generated in Germany, Poland, and Austria—strong rail freight transport economies. 4% 3% 11% 13% 4% Countries Served Fleet Structure 4% 32% Germany Hungary Mineral Oil Poland Czech Republic 14% LPG 6% 51% Austria France Chemicals 12%

  45. Slide 45: GATX Rail Europe: Diverse Customer Portfolio

    GATX Rail Europe (GRE): Diverse Customer Portfolio GRE’s newer and higher capacity railcar fleet attracts top-tier customers. Top 20 Customer Credit Rating 8 of top 10 customers Diverse customer have done business base with with us approximately 20% >20 years, 240 customers five for 30 years 5% 75%

  46. Slide 46: GATX Rail Europe: Diverse Fleet

    GATX Rail Europe (GRE): Diverse Fleet GRE has invested nearly $1.4 billion over the last 10 years. 2012 2021 2021 Fleet Growth  The focus on investments in freight and GRE Car Count 21,700+ 27,100+ intermodal segments continued throughout 2021 • Related net fleet grew by 342 cars (+44.9%) GRE Avera

  47. Slide 47: GATX Rail Europe: Service Offerings

    GATX Rail Europe (GRE): Service Offerings MAINTENANCE ENGINEERING ASSEMBLY SUPPORT MODERNIZATION  GRE’s goal is to ensure  Decades of engineering  GRE’s own production  Comprehensive customer  With an average age of 17 maximum railcar availability experience facility, combined with service year

  48. Slide 48: Industry Overview: India

    Industry Overview: India Indian Railways has a number of initiatives in progress to increase freight rail modal share in the country. Freight Rail Transport Significant Potential Railcar Ownership  Large railway network, historically dominated by (Based on approximately 300K railcars) passenger ser

  49. Slide 49: GATX Rail India Overview

    GATX Rail India Overview GATX obtained the first-ever wagon leasing license in 2012 and is the largest private railcar lessor in India. GATX’s Growth in India Key Attributes $160 $25 Wholly Owned Fleet of over High Growth Opportunity $140 4,800 railcars Actively seeks attractive $20 Serving customer

  50. Slide 50: Portfolio Management

    Portfolio Management

  51. Slide 51: Portfolio Management Overview

    Portfolio Management Overview Rolls-Royce & Partners Finance GATX Engine Leasing (GEL) 2% Affiliates (RRPF) 10%  RRPF leases aircraft spare engines to  In January 2021, GATX commenced a commercial airlines and Rolls-Royce plc direct investment program to • RRPF generates additional revenue from op

  52. Slide 52: Aircraft Spare Engine Leasing Industry

    Aircraft Spare Engine Leasing Industry Aircraft spare engines are Percentage of leased vs. owned attractive and reliable leasing aircraft spare engines by airlines assets has increased over time  Robust residual value characteristics  Retain value better over the long term compared to aircraft 202

  53. Slide 53: RRPF Affiliates Overview

    RRPF Affiliates Overview Spare Engine Average Estimated Typical Fleet 2021 Count Fleet Age Useful Life Lease Term Utilization OVERVIEW 407 12 years 20-25 years 3-12 years 94.3% 11% 3% 7% 37% 8% RRPF Engine Types 16% 18% The RRPF affiliates portfolio has Trent XWB (A350) V2500 (A320) contractual futu

  54. Slide 54: RRPF Key Attributes

    RRPF Key Attributes Strong Growth in NBV and Revenue since GATX’s First Partnership with Key Attributes Rolls-Royce in 1998 $500 Balance Sheet and Liquidity Operating Flexibility $5 CAGR since 1998 Long-dated debt maturity profile and Low operating cost base and full NBV: 13.4% $400 commitment to pr

  55. Slide 55: Trifleet

    TCUU 222708 [3] TRIFLEET 22K7. TANK UN TYPE 175 UN PORTABLE TANK DOT-SP 16133 AA WWW TROFLEET.COM 0 2

  56. Slide 56: Trifleet Overview

    Trifleet Overview Fleet Average Estimated Typical Number of Primary Countries 2021 Count Fleet Age Useful Life Lease Term Customers of Operation ~20,000 owned China, Singapore, U.S., OVERVIEW and managed tank 8 years 15-25 years 1-5 years ~300 The Netherlands, Germany containers 1% GATX acquired Tri

  57. Slide 57: Tank Container Industry Snapshot

    Tank Container Industry Snapshot Global Tank Container Fleet Growth *  Tank containers transport a variety of liquids and gases and can be transported and stored as standard dry box containers for all ship, 800,000 rail, and road journeys 600,000  Tank container fleet growth has increased steadily

  58. Slide 58: Industry Ownership & Market Share

    Industry Ownership & Market Share Industry Ownership Top Lessors Ownership Share1 (Based on global tank container fleet of approximately 737K) (Based on approximately 323K tank containers in leasing company fleets ) 6% 17% 3% 22% 44% 4% Trifleet 5% 6% 56% 7% 22% 13% Trifleet Peacock Container Operat

  59. Slide 59: Main Commodities by Tank Type

    Main Commodities by Tank Type STANDARD SEMI-STANDARD GAS SPECIALITY CRYOGENIC Capacity: Capacity: (Swap Bodies, Heated & Capacity: (Coated, U-Stamp, Multi- Cooled, Baffled) compartment, Dedicated use) ~22K liters for 20ft containers 14.5K to 26K liters 20K to 24.5K liters ~46K liters for 40ft contai

  60. Slide 60: Financial Highlights

    Financial Highlights

  61. Slide 61: Financial Profile Summary

    Financial Profile Summary FUNDING AND CAPITALIZATION EARNINGS AND ASSET QUALITY LIQUIDITY AND LEVERAGE PROFITABILITY  Market leader in railcar  Strong, stable, and  Strong balance sheet  Track record of strong leasing business with deep predictable cash flow with limited secured debt returns thr

  62. Slide 62: High-Quality and Consistent Cash Flows

    Financial Highlights: High-Quality and Consistent Cash Flows GATX has over $3.2 billion in contractual Our strong operating cash flow provides future lease receipts. tremendous capital allocation flexibility. GATX Contractual Future Lease Receipts** Operating Cash Flow & Portfolio Proceeds $1,005 $4

  63. Slide 63: Strong Balance Sheet

    Financial Highlights: Strong Balance Sheet Leverage & Reduction of Secured Assets Future Debt Obligations 5.0x 50% Sold aircraft leasing $3,544 business; reduced leverage 45% and % of secured assets 4.0x 40% 35% 3.0x 30% MILLIONS Stable leverage 25% post-2006 2.0x 20% 15% 1.0x 10% $500 $533 $527 $46

  64. Slide 64: Focus on Funding Optimization

    Financial Highlights: Focus on Funding Optimization Over the past decade, GATX has lowered borrowing costs while lengthening the average borrowing term. Cost of Debt & Borrowing Term 7% 10 9 6% 9.0 6.1% 8 5% 7 6 4% 3.8% 5 3% 4 3.8 3 2% 2 1% 1 0% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20

  65. Slide 65: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures

  66. Slide 66: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures Net Income (in millions) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net income (GAAP) $ 137.3 $ 169.3 $ 205.0 $ 205.3 $ 257.1 $ 502.0 $ 211.3 $ 211.2 $ 151.3 $ 143.1 Less: Net income from discontinued operations (GAAP) n/a n/a n/a n/a n/a 34.2 20.8 30.4 1.1

  67. Slide 67: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures Net Income (in millions) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Adjustments attributable to discontinued operations, net of taxes: Net casualty gain at ASC n/a n/a n/a n/a n/a - - (8.1) - - Impact of the Tax Cuts and Jobs Act of 2017 n/a n/a n/a n/a n/a

  68. Slide 68: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures On- and Off-Balance Sheet Assets 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total assets (GAAP) $ 6,044.7 $ 6,535.5 $ 6,919.9 $ 6,894.2 $ 7,105.4 $ 7,422.4 $ 7,616.7 $ 8,285.1 $ 8,937.6 $ 9,541.7 Off-balance sheet assets (1): Rail North America 863.5 887.9

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