GATX(GATX) - 2025 Q3 - Quarterly Results

Executive Summary & Financial Highlights Third Quarter 2025 Financial Performance GATX Corporation reported a decrease in net income and diluted EPS for Q3 2025 compared to Q3 2024, despite a positive impact from Tax Adjustments and Other Items in 2025 Q3 Financial Performance (2025 vs. 2024) | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (YoY) | Notes | | :--- | :--- | :--- | :--- | :--- | | Net Income | $82.2 | $89.0 | -7.6% | | | Diluted EPS | $2.25 | $2.43 | -7.3% | | | Tax Adjustments & Other Items (Net Positive Impact) | $5.3 | -$2.5 | N/A | Positive impact of $0.15/share in 2025, negative impact of $0.07/share in 2024 | Year-to-Date 2025 Financial Performance For the first nine months of 2025, GATX saw an increase in net income and diluted EPS compared to the prior year, influenced by a positive impact from Tax Adjustments and Other Items YTD Financial Performance (2025 vs. 2024) | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Income | $236.3 | $207.7 | +13.8% | | Diluted EPS | $6.46 | $5.68 | +13.7% | | Tax Adjustments & Other Items (Net Positive Impact) | $5.3 | -$9.9 | N/A | CEO Commentary & Business Outlook CEO Robert C. Lyons noted stable global market conditions consistent with expectations, highlighting strong performance in Rail North America and Engine Leasing, ongoing macroeconomic headwinds in Rail Europe, and robust demand in Rail India, while reiterating 2025 full-year earnings guidance - Global market conditions remain largely consistent with original expectations[3] - Rail North America's fleet utilization was 98.9% with a renewal success rate of 87.1% and a positive renewal lease rate change of 22.8%[3] - GATX Rail Europe's fleet utilization was 93.7%, impacted by macroeconomic headwinds, but saw increases in renewal lease rates, and announced an agreement to acquire approximately 6,000 railcars from DB Cargo AG[5] - GATX Rail India's fleet utilization was 100.0% due to strong demand[5] - Engine Leasing delivered strong results driven by robust global passenger air travel and investments in engines[6] - The acquisition of Wells Fargo's rail operating lease assets is on track to close in Q1 2026 or sooner, with key regulatory approvals progressing[6] - Company reiterates 2025 full-year earnings guidance of $8.50–$8.90 per diluted share, excluding Tax Adjustments and Other Items[4][6] Segment Performance Overview Rail North America Rail North America reported a decrease in segment profit for Q3 and YTD 2025, primarily due to lower gains on asset dispositions and higher expenses, partially offset by increased revenue, while fleet utilization remained high and renewal rates were strong Rail North America Segment Profit (2025 vs. 2024) | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (YoY) | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Segment Profit | $70.7 | $102.4 | -30.9% | $256.1 | $271.5 | -5.7% | - Lower segment profit was driven by lower gains on asset dispositions and higher interest and maintenance expenses, partly offset by higher revenue[7] Rail North America Fleet Statistics (Q3 2025) | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :--- | :--- | :--- | :--- | | Wholly owned fleet (cars) | ~109,000 | N/A | N/A | | Fleet utilization | 98.9% | 99.2% | 99.3% | | Renewal lease rate change (LPI) | +22.8% | +24.2% | +26.6% | | Average lease renewal term | 60 months | 60 months | 59 months | | Renewal success rate | 87.1% | 84.2% | 82.0% | | Investment volume | $142.6M | N/A | N/A | Rail International Rail International experienced an increase in segment profit for both Q3 and YTD 2025, primarily due to a higher number of railcars on lease, with GATX Rail Europe's utilization slightly improving sequentially but down year-over-year, while Rail India maintained 100% utilization Rail International Segment Profit (2025 vs. 2024) | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (YoY) | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Segment Profit | $34.4 | $33.9 | +1.5% | $92.3 | $89.2 | +3.5% | - Higher segment profit was driven by more railcars on lease[11] Rail International Fleet Statistics (Q3 2025) | Segment | Fleet Size (cars) | Utilization (Q3 2025) | Utilization (Q2 2025) | Utilization (Q3 2024) | | :--- | :--- | :--- | :--- | :--- | | GATX Rail Europe | ~30,600 | 93.7% | 93.3% | 95.9% | | GATX Rail India | >11,700 | 100.0% | 99.6% | 100.0% | Engine Leasing Engine Leasing reported significant increases in segment profit for both Q3 and YTD 2025, driven by strong operating performance from affiliates and increased earnings from its wholly-owned portfolio, partly due to a positive impact from Tax Adjustments and Other Items Engine Leasing Segment Profit (2025 vs. 2024) | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (YoY) | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Segment Profit | $60.4 | $37.5 | +61.1% | $126.3 | $81.6 | +54.8% | - 2025 Q3 and YTD results include a net positive impact of $10.9 million ($8.2 million after tax) from Tax Adjustments and Other Items[15] - Excluding these impacts, higher segment profit was driven by strong operating performance at Rolls-Royce and Partners Finance (RRPF) affiliates and increased earnings from GATX Engine Leasing due to more engines under ownership[16] Company Information & Disclosures Company Description GATX Corporation, founded in 1898 and headquartered in Chicago, leases transportation assets globally, including railcars, aircraft spare engines, and tank containers, emphasizing innovative service, safety, sustainability, and employee well-being, and has paid uninterrupted quarterly dividends since 1919 - GATX Corporation leases transportation assets globally, including railcars, aircraft spare engines, and tank containers[17] - Headquartered in Chicago, Illinois since 1898, GATX has paid a quarterly dividend, uninterrupted, since 1919[17] Teleconference & Investor Information GATX provided details for its Q3 2025 earnings teleconference and replay, along with information on how investors can access material information through SEC filings, press releases, public calls, webcasts, and the GATX Investor Relations website - GATX hosted a teleconference on October 21, 2025, to discuss Q3 2025 results, with replay information provided[18] - Investors can access material information via SEC filings, press releases, public conference calls, webcasts, and the GATX Investor Relations website (www.gatx.com)[19](index=19&type=chunk) Forward-Looking Statements & Risk Factors The report includes forward-looking statements, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially, with key risk factors including declines in customer demand, inability to maintain satisfactory lease rates, competitive factors, higher maintenance costs, acquisition/divestiture challenges, reliance on Rolls-Royce, international operation risks, and macroeconomic conditions - Statements not based on historical facts are forward-looking and involve known and unknown risks and uncertainties[20] - Factors that could cause actual results to differ include significant decline in customer demand, inability to maintain transportation assets on lease at satisfactory rates, competitive factors, higher costs associated with increased assignments, and inability to successfully consummate and manage acquisition and divestiture activities[21] - Other risks include reliance on Rolls-Royce for engine leasing, potential obsolescence of assets, risks related to international operations, cybersecurity threats, litigation, changes in laws/regulations, environmental liabilities, and global political/economic conditions[21] Contact Information Contact information for investor relations and corporate communications is provided for GATX Corporation - Shari Hellerman, Senior Director, Investor Relations and Corporate Communications, is the contact for further information[22] Consolidated Financial Statements Consolidated Statements of Income GATX's consolidated income statement shows an increase in total revenues for both Q3 and YTD 2025 compared to 2024, but Q3 net income decreased due to higher expenses and lower net gain on asset dispositions, while YTD net income increased, supported by higher share of affiliates' earnings Consolidated Statements of Income (Q3 and YTD, in millions) | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $439.3 | $405.4 | $1,291.4 | $1,172.0 | | Total Expenses | $312.1 | $278.6 | $892.6 | $821.0 | | Net gain on asset dispositions | $23.1 | $48.5 | $97.0 | $110.3 | | Interest expense, net | $(98.2) | $(88.9) | $(289.3) | $(249.5) | | Share of affiliates' earnings, net of taxes | $40.0 | $26.4 | $81.1 | $58.7 | | Net Income | $82.2 | $89.0 | $236.3 | $207.7 | | Diluted earnings per share | $2.25 | $2.43 | $6.46 | $5.68 | | Dividends declared per common share | $0.61 | $0.58 | $1.83 | $1.74 | Consolidated Balance Sheets GATX's balance sheet as of September 30, 2025, shows an increase in total assets and total liabilities compared to December 31, 2024, with operating assets and facilities, cash, and investments in affiliated companies growing, while debt also increased Consolidated Balance Sheets (in millions) | Metric | Sep 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $696.1 | $401.6 | | Operating Assets and Facilities (net) | $11,079.7 | $10,449.7 | | Investments in Affiliated Companies | $746.1 | $663.3 | | Total Assets | $13,305.8 | $12,296.5 | | Total Debt | $8,868.6 | $8,225.7 | | Total Liabilities | $10,586.9 | $9,857.6 | | Total Shareholders' Equity | $2,718.9 | $2,438.9 | Segment Financial Data Three Months Ended September 30, 2025 For Q3 2025, Rail North America generated the highest segment profit, followed by Engine Leasing and Rail International, with Engine Leasing showing strong share of affiliates' pre-tax earnings Segment Data (Q3 2025, in millions) | Segment | Total Revenues | Segment Profit | Investment Volume | | :--- | :--- | :--- | :--- | | Rail North America | $296.5 | $70.7 | $142.6 | | Rail International | $99.4 | $34.4 | $66.1 | | Engine Leasing | $32.9 | $60.4 | $147.1 | | Other | $10.5 | $12.6 | $5.9 | | Consolidated | $439.3 | $178.1 | $361.7 | - Engine Leasing's segment profit was significantly boosted by $53.4 million in share of affiliates' pre-tax earnings[28] Three Months Ended September 30, 2024 In Q3 2024, Rail North America was the largest contributor to segment profit, with Engine Leasing also showing substantial profit, including a significant share from affiliates Segment Data (Q3 2024, in millions) | Segment | Total Revenues | Segment Profit | Investment Volume | | :--- | :--- | :--- | :--- | | Rail North America | $278.5 | $102.4 | $325.9 | | Rail International | $90.6 | $33.9 | $80.6 | | Engine Leasing | $26.2 | $37.5 | $94.8 | | Other | $10.1 | $4.2 | $3.2 | | Consolidated | $405.4 | $178.0 | $504.5 | - Engine Leasing's segment profit included $35.2 million from share of affiliates' pre-tax earnings[31] Nine Months Ended September 30, 2025 For the first nine months of 2025, Rail North America remained the largest segment by revenue and profit, followed by Engine Leasing which benefited significantly from affiliates' earnings, with total investment volume reaching $877.0 million Segment Data (YTD 2025, in millions) | Segment | Total Revenues | Segment Profit | Investment Volume | | :--- | :--- | :--- | :--- | | Rail North America | $885.5 | $256.1 | $502.5 | | Rail International | $283.7 | $92.3 | $209.9 | | Engine Leasing | $91.1 | $126.3 | $147.1 | | Other | $31.1 | $24.7 | $17.5 | | Consolidated | $1,291.4 | $499.4 | $877.0 | - Engine Leasing's segment profit included $109.4 million from share of affiliates' pre-tax earnings[34] Nine Months Ended September 30, 2024 In the first nine months of 2024, Rail North America was the dominant segment in terms of revenue and profit, with Engine Leasing also contributing significantly, including a substantial portion from affiliates' earnings, and total investment volume was $1,325.1 million Segment Data (YTD 2024, in millions) | Segment | Total Revenues | Segment Profit | Investment Volume | | :--- | :--- | :--- | :--- | | Rail North America | $813.9 | $271.5 | $955.7 | | Rail International | $259.5 | $89.2 | $190.1 | | Engine Leasing | $69.3 | $81.6 | $166.1 | | Other | $29.3 | $6.2 | $13.2 | | Consolidated | $1,172.0 | $448.5 | $1,325.1 | - Engine Leasing's segment profit included $75.8 million from share of affiliates' pre-tax earnings[37] Supplemental Financial Information Impact of Tax Adjustments and Other Items GATX provides non-GAAP financial measures by excluding certain tax adjustments and other items to offer a clearer view of underlying operating results, with these adjustments including acquisition-related expenses and insurance proceeds, significantly impacting reported net income and diluted EPS Impact of Tax Adjustments and Other Items on Net Income (in millions) | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (GAAP) | $82.2 | $89.0 | $236.3 | $207.7 | | Total adjustments attributable to consolidated pre-tax income | $3.8 | $3.3 | $3.8 | $13.4 | | Total adjustments attributable to affiliates' earnings, net of taxes | $(8.2) | $0.0 | $(8.2) | $0.0 | | Net income, excluding tax adjustments and other items (non-GAAP) | $76.9 | $91.5 | $231.0 | $217.6 | Impact of Tax Adjustments and Other Items on Diluted EPS | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Diluted earnings per share (GAAP) | $2.25 | $2.43 | $6.46 | $5.68 | | Diluted earnings per share, excluding tax adjustments and other items (non-GAAP) | $2.10 | $2.50 | $6.31 | $5.95 | - Adjustments include acquisition-related expenses, litigation claims settlements, environmental reserves, net gain on Specialized Gas Vessels, and insurance proceeds related to aircraft spare engines[41] Assets, Debt, and Leverage GATX's total assets (excluding cash) increased across all segments from Q3 2024 to Q3 2025, with Rail North America holding the largest share, while total debt and lease obligations, net of unrestricted cash, also increased, and recourse leverage slightly improved Total Assets, Excluding Cash, by Segment (in millions) | Segment | Sep 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | | Rail North America | $7,865.3 | $7,643.7 | | Rail International | $2,522.9 | $2,298.6 | | Engine Leasing | $1,805.9 | $1,544.7 | | Other | $415.3 | $389.1 | | Total | $12,609.4 | $11,876.1 | Debt and Lease Obligations, Net of Unrestricted Cash (in millions) | Metric | Sep 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | | Total debt and lease obligations, net of unrestricted cash | $8,333.2 | $7,988.4 | | Shareholders' Equity | $2,718.9 | $2,436.7 | | Recourse Leverage | 3.1 | 3.3 | Rail North America Statistics Rail North America maintained high fleet utilization and strong renewal success rates in Q3 2025, despite a slight decrease in the average renewal lease rate change compared to previous quarters, and the fleet size saw a net decrease due to more cars scrapped and sold than added Rail North America Key Statistics | Metric | 9/30/2025 | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Average renewal lease rate change | 22.8 % | 24.2 % | 24.5 % | 26.7 % | 26.6 % | | Average renewal term (months) | 60 | 60 | 61 | 60 | 59 | | Renewal Success Rate | 87.1 % | 84.2 % | 85.1 % | 89.1 % | 82.0 % | | Ending balance (excl. boxcar) | 101,288 | 102,317 | 103,310 | 102,966 | 102,697 | | Utilization (excl. boxcar) | 98.9 % | 99.2 % | 99.2 % | 99.1 % | 99.3 % | | Boxcar Fleet Ending balance | 7,478 | 7,621 | 7,990 | 8,395 | 8,779 | | Boxcar Fleet Utilization | 96.9 % | 98.7 % | 99.8 % | 99.8 % | 99.8 % | - The Lease Price Index (LPI) measures renewal activity for the North American railcar fleet (excluding boxcars), weighted by a 12-month trailing average[47] - Industry statistics show a year-over-year change in U.S. Carloadings (excl. intermodal) of 2.1% and (chemical) of 1.5% for Q3 2025[47] Rail Europe Statistics GATX Rail Europe's fleet size slightly increased in Q3 2025, but utilization saw a year-over-year decline, reflecting ongoing macroeconomic headwinds in the region Rail Europe Fleet Statistics | Metric | 9/30/2025 | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning balance | 30,492 | 30,223 | 30,027 | 29,953 | 29,649 | | Railcars added | 328 | 579 | 446 | 196 | 410 | | Railcars scrapped or sold | (248) | (310) | (250) | (122) | (106) | | Ending balance | 30,572 | 30,492 | 30,223 | 30,027 | 29,953 | | Utilization | 93.7 % | 93.3 % | 95.1 % | 96.1 % | 95.9 % | Rail India Statistics GATX Rail India continued to demonstrate strong performance with 100% fleet utilization in Q3 2025, driven by robust demand and ongoing additions of new railcars to its fleet Rail India Fleet Statistics | Metric | 9/30/2025 | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning balance | 11,112 | 10,895 | 10,583 | 10,361 | 9,904 | | Railcars added | 600 | 217 | 312 | 222 | 457 | | Railcars scrapped or sold | — | — | — | — | — | | Ending balance | 11,712 | 11,112 | 10,895 | 10,583 | 10,361 | | Utilization | 100.0 % | 99.6 % | 99.6 % | 100.0 % | 100.0 % |