GATX reported 2014 Q1 net income of $42.1 million, compared to net income of $27.1 million in Q1 2013. The 2014 first quarter results include an after-tax benefit of $3.5 million, from a change in the depreciable lives of the North American railcar fleet.

Rail North America reported segment profit of $75.0 million in the first quarter of 2014, compared to $50.3 million in the first quarter of 2013. The improvement in segment profit was driven by increased asset remarketing income and higher lease rates, partially offset by higher maintenance costs due to increased compliance work.

At March 31, 2014, Rail North America’s wholly owned fleet was approximately 108,000 cars, excluding the acquired boxcar fleet.

Fleet utilization was 98.5% at the end of the first quarter, comparable to the prior quarter and 97.8% at the end of the first quarter of 2013. During the first quarter of 2014, the GATX Lease Price Index, a weighted average lease renewal rate for a group of railcars representative of Rail North America’s fleet, increased 33.9% over the weighted average expiring lease rate.

This compares to a 37.1% increase in the prior quarter and a 30.8% increase in the first quarter of 2013. The average lease renewal term for cars included in the LPI during the first quarter was 62 months, compared to 60 months in the prior quarter and 65 months in the first quarter of 2013.

Rail North America’s investment volume was nearly $400 million in the first quarter, of which approximately $340 million was for the purchase of the per diem boxcar fleet.

Rail International’s segment profit was $20.7 million in the first quarter of 2014, compared to $18.6 million in the first quarter of 2013. The 2013 first quarter results include the negative pre-tax impact from Other Items of $1.4 million. The increase in quarterly segment profit was driven by increased lease revenue due to more railcars on lease and higher lease rates, partially offset by the absence of income from GATX’s interest in a joint venture, which was sold during the third quarter of 2013.

At March 31, 2014, Rail International’s fleet consisted of approximately 22,000 cars and utilization was 95.8%, compared to 96.4% at the end of the fourth quarter of 2013 and 93.4% at the end of the first quarter of 2013.

Brian A. Kenney, president and chief executive officer of GATX, said, “Rail North America’s fleet utilization was 98.5% at the end of the first quarter and our renewal success rate during the quarter was more than 85%. The renewal rate change of our Lease Price Index was a positive 33.9% and the average renewal term for cars in the LPI was 62 months. These favorable results were driven by continued strong demand for tank cars and improving demand for certain freight car types, such as covered hoppers. With the acquisition of the per diem boxcar fleet, GATX is now the largest lessor of boxcars in North America and we are well-positioned to capitalize on the unique trends in this market. Uncertainty related to future regulations governing tank cars which carry flammable liquids intensified during the quarter as shippers, car owners, railroads and legislators all advocated varying positions to regulators about what should be included in the final rules. It is not possible to estimate the extent of any changes to tank car regulations, or what impact they might have on GATX.”

To read the full GATX release, click here.