GATX reported Q1/16 net income of $69.3 million was up 11.4% from net income of $62.2 million in Q1/15. The first quarter 2016 results include a net gain of approximately $1.5 million associated with the planned exit of the majority of Portfolio Management’s marine investments.

Rail North America reported segment profit of $108.7 million in Q1/16, compared to $105.8 million in Q1/15. The improvement in segment profit was driven by higher revenues and lower maintenance costs, partially offset by fewer cars on lease and lower remarketing gains from fewer railcars sold.

Consolidated investment volume of $140.2 million in Q1/16 was down 22.5% from investment volume of $180.9 million in the same year-ago quarter.

At March 31, 2016, Rail North America’s wholly owned fleet comprised approximately 124,000 railcars, including approximately 18,300 boxcars.

The following fleet statistics and performance discussion exclude the boxcar fleet:

Fleet utilization was 98.9% at the end of the first quarter, compared to 99.1% at the end of the prior quarter and 99.3% at the end of the first quarter of 2015. During Q1/16, the GATX Lease Price Index (LPI), a weighted-average lease renewal rate for a group of railcars representative of Rail North America’s fleet, increased 6.4% over the weighted-average expiring lease rate. This compares to a 20.5% increase in the prior quarter and a 43.2% increase Q1/15. The average lease renewal term for cars included in the LPI during the first quarter was 34 months, compared to 43 months in the prior quarter and 59 months in Q1/15.

Rail International’s segment profit was $12.6 million in Q1/16, compared to $21.8 million in Q1/15. While more railcars were on lease at higher rates, higher maintenance expenses and lower gains on asset dispositions negatively affected segment profit.

At March 31, 2016, GRE’s fleet consisted of approximately 23,000 cars and utilization was 95.1%, compared to 95.8% at the end of the prior quarter and 95.9% at the end of the first quarter of 2015.

“Despite deteriorating market conditions, GATX produced excellent financial results during the first quarter,” said Brian A. Kenney, president and CEO at GATX. “The growing problems of railcar oversupply combined with depressed commodity prices continue to put negative pressure on lease rates, renewal success rate, and new car placements. The renewal lease rate change of GATX’s Lease Price Index was a positive 6.4%, the average renewal term was 34 months, and the renewal success rate was 67.5%. Our disciplined approach and the fleet actions we took over the past few years have positioned GATX well for managing through these market conditions. Fleet utilization for Rail North America was 98.9% at the end of the quarter.”