GATX YTD North American Rail Segment Profit Up 52%



GATX reported Q3/14 net income of $51.3 million compared to net income of $53.8 million in Q3/13. Net income for the first nine months of 2014 was $146.5 million compared to $116.0 million in the prior year period.

Rail North America reported segment profit of $70.6 million in the third quarter of 2014 was up 21.9% compared to $57.9 million in the third quarter of 2013. The increase in quarterly segment profit was driven by higher lease revenue resulting from higher lease rates and contributions from the recently acquired boxcar fleet, GATX said.

Year to date, Rail North America reported segment profit of $237.3 million was up 51.7% compared to $156.4 million in the same period of 2013. The increase in year-to-date segment profit was driven primarily by higher lease revenue resulting from higher lease rates and the addition of the boxcar fleet, and higher asset remarketing income. This was partially offset by higher maintenance costs related to planned compliance work and costs associated with the boxcar fleet.

Brian A. Kenney, president and CEO of GATX, said, “Broadening strength in the North American railcar market, growing railcar manufacturing backlogs and decreasing railroad velocities all contributed to Rail North America’s impressive performance in the third quarter. The renewal rate change of our Lease Price Index (LPI) was a record 46.9%, the average renewal term for cars in the LPI was 68 months, and the renewal success rate was nearly 87%. Our success in placing coal cars on leases at materially improved rates and terms positively impacted the LPI.”

At September 30, 2014, Rail North America’s wholly owned fleet was approximately 127,000 cars, including approximately 19,000 boxcars. The following fleet statistics exclude the boxcar fleet.

Fleet utilization was 98.8% at the end of the third quarter, compared to 98.6% at the end of the prior quarter and 98.5% at the end of the third quarter of 2013. During the third quarter of 2014, GATX’s LPI, a weighted average lease renewal rate for a group of railcars representative of Rail North America’s fleet, increased 46.9% over the weighted average expiring lease rate. This compares to a 36.0% increase in the prior quarter and a 34.3% increase in the third quarter of 2013. The average lease renewal term for cars included in the LPI during the third quarter was 68 months, compared to 67 months in the prior quarter and 63 months in the third quarter of 2013.

To view the full GATX news release, click here.


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