GATX reported Q3/16 net income of $95.7 million compared to net income of $39.5 million in Q3/15. Year-to-date 2016 net income was $226.2 million compared to $147.1 million in the prior year period.

GATX said Q3/16 results include a $49.1 million pre-tax residual sharing fee settlement ($30.3 million after-tax) from the Portfolio Management segment. Additionally, the third quarter 2016 results include a net after-tax gain from the exit of Portfolio Management’s marine investments and other items of $4.3 million and a year-to-date net after-tax gain of $6.0 million.

Brian A. Kenney, president and chief executive officer at GATX stated, “Market dynamics in the North American rail industry are similar to recent quarters. A growing oversupply of railcars, fewer railcar loadings and improved railroad velocity continue to present significant challenges. Railcar lessors are aggressively attempting to place new deliveries and their existing idle railcars, resulting in declining lease rates. In the third quarter, the renewal lease rate change of GATX’s Lease Price Index decreased by 21.4%, the average renewal term was 29 months, and our renewal success rate was 74.1%.

“Despite the difficult market conditions, Rail North America is performing well. Our fleet utilization increased to 99.0% in the quarter; we further optimized our fleet by selling railcars in the secondary market at attractive prices, and we are successfully placing future years’ railcar deliveries from our committed purchase agreement. This continued success is a direct result of GATX’s well-diversified fleet, high-quality customer base and outstanding service.

“Utilization at GATX Rail Europe remains healthy at 95.0%, despite weakness in the petroleum market. American Steamship Company’s financial performance is stable, as we are operating fewer vessels in 2016 due to soft demand for iron ore on the Great Lakes. In the Portfolio Management segment, remarketing income during the quarter was $49.1 million higher than originally anticipated. This was driven by a large residual sharing fee settlement in the managed portfolio that was received in the quarter.”

Kenney concluded, “Our strategy in this market is to aggressively protect fleet utilization, reduce the length of lease term as rates decline, continue to improve efficiency within our maintenance network, tightly control SG&A, and capitalize on attractive growth opportunities as asset prices fall. Based on year-to-date performance, we are maintaining our 2016 full-year earnings guidance of $5.55-$5.75 per diluted share. This guidance excludes the $0.74 per share contribution from the Portfolio Management fee noted above.”

Rail North America reported segment profit of $87.9 million in Q3/16, compared to $90.0 million in Q3/15. Lower segment profit was a result of lower revenues, partially offset by lower maintenance expenses. Year to date, Rail North America reported segment profit of $273.4 million, compared to $280.7 million in the same period of 2015. Lower gains on asset dispositions were partially offset by higher revenues and lower maintenance expenses.

At September 30, 2016, Rail North America’s wholly owned fleet comprised approximately 123,000 railcars, including approximately 18,100 boxcars.

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

Fleet utilization was 99.0% at the end of the third quarter, compared to 98.1% at the end of the prior quarter and 99.2% at the end of Q3/15. During Q3/16, the GATX Lease Price Index (LPI), a weighted-average lease renewal rate for a group of railcars representative of Rail North America’s fleet, decreased 21.4% over the weighted-average expiring lease rate. This compares to a decrease of 25.4% in the prior quarter and a 25.6% increase in Q3/15. The average lease renewal term for railcars included in the LPI during the third quarter was 29 months, compared to 34 months in the prior quarter and 60 months in Q3/15.

Rail North America’s investment volume during the third quarter was $108.4 million and asset remarketing income was $12.2 million.

Additional fleet statistics, including information about the boxcar fleet, and macroeconomic data related to Rail North America’s business are provided on the last page of this press release.

Rail International’s segment profit was $23.3 million in Q3/16 compared to $15.5 million in Q3/15. Rail International reported segment profit of $48.9 million year-to-date 2016, compared to $56.4 million for the same period of 2015. While more railcars were on lease, higher maintenance expenses and lower gains on asset dispositions negatively affected segment profit.

At September 30, 2016, GATX Rail Europe’s (GRE) fleet consisted of approximately 23,000 railcars and utilization was 95.0%, compared to 94.8% at the end of the prior quarter and 95.7% at the end of Q3/15.