GATX reported Q2/17 net income of $53.4 million compared to net income of $61.2 million in Q2/16. The results included a net gain of $1.7 million associated with the planned exit of the majority of Portfolio Management’s marine investments.

Rail North America reported segment profit of $74.9 million in Q2/17, compared to $76.8 million in Q2/16. Higher gains on asset dispositions in Q2/17 were more than offset by lower lease revenue and higher maintenance expense, resulting in slightly lower segment profit.

“While North American railcar loadings and railroad velocity have trended favorably over the last few quarters, a recovery in the North American railcar leasing market continues to be hampered by a significant oversupply of existing railcars and a large railcar manufacturing backlog,” said Brian A. Kenney, president and CEO of GATX.

At June 30, 2017, Rail North America’s wholly owned fleet comprised approximately 121,000 railcars, including approximately 17,100 boxcars. The following fleet statistics and performance discussion exclude the boxcar fleet.

Fleet utilization was 98.8% at the end of Q2/17, compared to 99.1% at the end of the prior quarter and 98.1% at the end of Q2/16

During Q2/17, the GATX Lease Price Index (LPI), a weighted-average lease renewal rate for a group of railcars representative of Rail North America’s fleet, decreased 21.4% over the weighted-average expiring lease rate. This compares to a 32.6% decrease in the prior quarter and a 25.4% decrease in Q2/16.

“GATX’s fleet utilization decreased slightly to 98.8% in the quarter, although we continue to displace competitors and protect high fleet utilization,” Kenney said. “The renewal lease rate change of GATX’s Lease Price Index was a negative 21.4% in the quarter, as absolute railcar lease rates have remained flat thus far in 2017. Our commercial team has been successful in keeping existing cars on lease, as evidenced by our renewal success rate of 75.1%.”

Rail International’s segment profit was $16.6 million in Q2/17 compared to $13.0 million in the Q2/16. The improvement in segment profit was primarily driven by lower maintenance expenses.

At June 30, 2017, GATX Rail Europe’s (GRE) fleet consisted of approximately 23,000 cars and utilization was 95.7%, compared to 95.0% at the end of the prior quarter and 94.8% at the end of Q2/16.

“Rail International is performing in line with our original 2017 expectations. GATX Rail Europe’s fleet utilization increased slightly to 95.7% in the quarter,” Kenney said. “At American Steamship Company, 12 vessels are sailing under favorable operating conditions. The Rolls-Royce and Partners Finance affiliates continue their excellent performance, and 2017 investment volume is strong due to the solid demand for aircraft spare engines.”