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GATX Corporation Reports 2009 First Quarter Results

Dépèche transmise le 23 avril 2009 par Business Wire

GATX Corporation Reports 2009 First Quarter Results

GATX Corporation Reports 2009 First Quarter Results

CHICAGO--(BUSINESS WIRE)--GATX Corporation (NYSE:GMT) today reported 2009 first quarter net income of $27.6 million or $.56 per diluted share, compared to net income of $51.8 million or $1.03 per diluted share in the first quarter of 2008. The 2009 first quarter results include a negative after-tax fair-value adjustment of $11.6 million or $.23 per diluted share related to certain interest rate swaps at GATX’s AAE Cargo affiliate, and the 2008 first quarter results include a $6.8 million or $.13 per diluted share after-tax benefit from the reversal of tax reserves.

“We entered the year anticipating considerable challenges in our markets and operating conditions have been consistent with our expectations,” said Brian A. Kenney, president and chief executive officer of GATX. “In Rail, our customers are seeing decreased demand for their products and certain customers are operating under increasing financial stress. Consequently, there is pressure on fleet utilization and lease rates. Our North American fleet utilization was 96.5% at the end of the first quarter, down from 97.9% at year end and renewal lease rates on railcars in GATX’s Lease Price Index (LPI) declined 5.5%. Fortunately, the steps we took in recent years to position GATX for a downturn are helping us manage through these difficult market conditions.

“As expected, the environment in Marine is also challenging. In Specialty, charter rates at the marine joint ventures declined significantly in the fourth quarter of 2008, and while they have increased in some markets, they remain weak compared to recent years. American Steamship Company (ASC) recently commenced its sailing season, and it is clear that continued idling of steel manufacturing capacity on the Great Lakes will result in significantly lower iron ore shipments during the year.”

Mr. Kenney concluded, “Our 2009 full-year earnings estimate remains unchanged, excluding fair-value adjustments as noted above. There is increased downside variability to the estimate due to a variety of uncontrollable factors, which were noted in our 2008 year-end press release, including the price of scrap steel and other assets and increased financing costs that most companies face when accessing today’s capital markets. While the environment is volatile and difficult to predict, we remain focused on utilizing this uncertainty to strengthen our position in the market.”

RAIL

Rail segment profit was $43.1 million in the first quarter of 2009, including the negative $14.3 million pre-tax impact of the fair-value adjustment of interest rate swaps at GATX’s AAE Cargo affiliate. Asset remarketing income and scrap gains (included in “Other income”) at Rail were materially lower in the first quarter of 2009 versus the prior year.

At March 31, 2009, Rail’s North American fleet totaled approximately 112,000 cars. Fleet utilization declined to 96.5% from 97.9% at year end. The decline in utilization reflects both end-of-lease returns and the return of approximately 620 cars related to customer bankruptcies. Utilization and lease rate pressure is fairly broad based across car types, although it continues to be most acute in freight cars. The European wholly-owned tank car fleet totaled approximately 20,000 cars and utilization was 96.5% compared to 97.1% at year end.

Additional current and historical fleet and operating data as well as macroeconomic data related to Rail’s business can be found on the last page of this press release.

SPECIALTY

Specialty reported segment profit of $23.0 million in the first quarter of 2009 compared to $30.0 million in the prior year period. The year-over-year decline in segment profit was primarily due to lower share of affiliates’ earnings as the marine market remained soft following a sharp downturn in the fourth quarter of 2008.

The Specialty portfolio currently consists of approximately $641.3 million of owned assets (including on and off balance sheet assets) and third-party managed portfolios totaling approximately $274.1 million.

AMERICAN STEAMSHIP COMPANY

American Steamship Company (ASC) reported segment profit of $4.8 million in the first quarter 2009 compared to $.7 million in the first quarter 2008. ASC’s vessels are in winter lay up from January to late March. Steel mill capacity utilization and production are down dramatically from the prior year and ASC will deploy vessels accordingly. During the quarter, ASC reached a settlement in a litigation matter and as a result, recorded a $5.6 million recovery.

COMPANY DESCRIPTION

GATX Corporation (NYSE:GMT) provides leasing and related services to customers operating rail, marine and other targeted assets. GATX is a leader in leasing transportation assets and controls one of the largest railcar fleets in the world. Applying over a century of operating experience and strong market and asset expertise, GATX provides quality assets and services to customers worldwide. GATX has been headquartered in Chicago, Illinois since its founding in 1898 and has traded on the New York Stock Exchange since 1916. For more information, visit the Company’s website at www.gatx.com.

TELECONFERENCE INFORMATION

GATX Corporation will host a teleconference to discuss 2009 first quarter results. Teleconference details are as follows:

Thursday, April 23rd

11:00 A.M.Eastern Time

Domestic Dial-In: 1-877-852-6575
International Dial-In: 1-719-325-4758
Replay: 1-888-203-1112 / Access Code: 1951249

Call-in details, a copy of this press release and real-time audio access are available at www.gatx.com. Please access the call 15 minutes prior to the start time. Following the call, a replay will be available on the same site.

FORWARD-LOOKING STATEMENTS

This document contains statements that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to the safe harbor provisions of those sections and the Private Securities Litigation Reform Act of 1995. Some of these statements may be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” or other words and terms of similar meaning. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in GATX’s Annual Report on Form 10-K and other filings with the SEC, and that actual results or developments may differ materially from those in the forward-looking statements. Specific factors that might cause actual results to differ from expectations include, but are not limited to, general economic, market, regulatory and political conditions in the rail, marine, industrial and other industries served by GATX and its customers; lease rates, utilization levels and operating costs in GATX’s primary asset segments; conditions in the capital markets; changes in GATX’s credit ratings and financing costs; regulatory rulings that may impact the economic value and operating costs of assets; competitive factors in GATX’s primary markets including lease pricing and asset availability; changes in loss provision levels within GATX’s portfolio; impaired asset charges that may result from changing market conditions or portfolio management decisions implemented by GATX; the opportunity for remarketing income; the outcome of pending or threatened litigation; and other factors. Given these risks and uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as of the date hereof. GATX has based these forward-looking statements on information currently available and disclaims any intention or obligation to update or revise these forward-looking statements to reflect subsequent events or circumstances.

Investor, corporate, financial, historical financial, photographic and news release information may be found at www.gatx.com.

(04/23/09)

--Tabular Follows--

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Millions, Except Per Share Data)
 
Three Months Ended
March 31
2009   2008
Gross Income
Lease income $ 232.8 $ 234.8
Marine operating revenue 1.1 14.1
Asset remarketing income 14.4 20.9
Other income 14.6 19.4
Revenues 262.9 289.2
Share of affiliates’ earnings 1.5 21.9
Total Gross Income 264.4 311.1
 
Ownership Costs
Depreciation 51.1 48.2
Interest expense, net 41.5 36.2
Operating lease expense 33.9 38.0
Total Ownership Costs 126.5 122.4
 
Other Costs and Expenses
Maintenance expense 61.3 60.8
Marine operating expense 0.7 11.5
Selling, general and administrative 33.0 38.5
Other 3.4 11.2
Total Other Costs and Expenses 98.4 122.0
 
Income before Income Taxes 39.5 66.7
Income Tax Provision 11.9 14.9
Net Income $ 27.6 $ 51.8
 
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Millions, Except Per Share Data)
(Continued)
 
Three Months Ended
March 31
2009   2008
Per Share Data
 
Basic $ 0.57 $ 1.10
 
Average number of common shares 48.3 46.8
 
 
Diluted $ 0.56 $ 1.03
 
Average number of common shares and
common share equivalents 50.3 51.6
 
Dividends declared per common share $ 0.28 $ 0.27
 
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In Millions)
 
March 31 December 31
2009 2008
 
Assets
 
Cash and Cash Equivalents $ 70.5 $ 102.2
Restricted Cash 40.6 41.1
 
Receivables
Rent and other receivables 51.8 79.5
Finance leases 325.1 331.8
Loans 1.2 4.9
Less: allowance for possible losses (18.9 ) (18.6 )
359.2 397.6
 
Operating Lease Assets, Facilities and Other
Rail 5,202.3 5,232.3
Specialty 260.6 271.4
ASC 376.3 373.1
Less: allowance for depreciation (1,948.3 ) (1,955.2 )
3,890.9 3,921.6
 
Investments in Affiliated Companies 388.9 399.3
Goodwill 92.0 95.7
Other Assets 207.7   232.9  
Total Assets $ 5,049.8   $ 5,190.4  
 
Liabilities and Shareholders’ Equity
 
Accounts Payable and Accrued Expenses $ 126.5 $ 146.6
 
Debt
Commercial paper and borrowings under bank credit facilities 136.5 125.1
Recourse 2,363.1 2,376.2
Nonrecourse 240.5 243.3
Capital lease obligations 60.8   64.7  
2,800.9 2,809.3
 
Deferred Income Taxes 714.0 710.9
Other Liabilities 338.7   399.1  
Total Liabilities 3,980.1 4,065.9
Total Shareholders’ Equity 1,069.7   1,124.5  
Total Liabilities and Shareholders’ Equity $ 5,049.8   $ 5,190.4  
 
GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Three Months Ended March 31, 2009
(In Millions)
       
GATX
Rail Specialty ASC Other Consolidated
Gross Income
Lease income $ 216.5 $ 15.3 $ 1.0 $ - $ 232.8
Marine operating revenue - - 1.1 - 1.1
Asset remarketing income 4.7 9.7 - - 14.4
Other income 13.2   1.1 0.1   0.2   14.6
Revenues 234.4 26.1 2.2 0.2 262.9
Share of affiliates’ earnings (8.9 ) 10.4 -   -   1.5
Total Gross Income 225.5 36.5 2.2 0.2 264.4
 
Ownership Costs
Depreciation 46.2 4.9 - - 51.1
Interest expense, net 33.6 5.8 2.2 (0.1 ) 41.5
Operating lease expense 33.6   0.4 -   (0.1 ) 33.9
Total Ownership Costs 113.4 11.1 2.2 (0.2 ) 126.5
 
Other Costs and Expenses
Maintenance expense 61.2 - 0.1 - 61.3
Marine operating expense - - 0.7 - 0.7
Other 7.8   2.4 (5.6 ) (1.2 ) 3.4
Total Other Costs and Expenses 69.0   2.4 (4.8 ) (1.2 ) 65.4
 
Segment Profit $ 43.1   $ 23.0 $ 4.8   $ 1.6   72.5
Selling, general and administrative 33.0
 
Income before Income Taxes 39.5
Income Tax Provision 11.9
Net Income $ 27.6
 
 

Selected Data:

 
Investment Volume $ 70.5 $ 4.2 $ 3.2 $ 1.4 $ 79.3
 
Asset Remarketing Income:
Disposition Gains on Owned Assets 0.7 1.4 - - 2.1
Residual Sharing Income 4.0   8.3 -   -   12.3
Total Asset Remarketing Income $ 4.7 $ 9.7 $ - $ - $ 14.4
 
Scrapping Gains (a) $ 2.2 $ - $ - $ - $ 2.2

(a) Included in Other income

 
GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Three Months Ended March 31, 2008
(In Millions)
       
GATX
Rail Specialty ASC Other Consolidated
Gross Income
Lease income $ 219.5 $ 14.2 $ 1.1 $ - $ 234.8
Marine operating revenue - - 14.1 - 14.1
Asset remarketing income 11.0 9.9 - - 20.9
Other income 17.5 1.7 - 0.2   19.4
Revenues 248.0 25.8 15.2 0.2 289.2
Share of affiliates’ earnings 5.5 16.4 - -   21.9
Total Gross Income 253.5 42.2 15.2 0.2 311.1
 
Ownership Costs
Depreciation 44.2 4.0 - - 48.2
Interest expense, net 30.1 4.1 2.4 (0.4 ) 36.2
Operating lease expense 37.6 0.5 - (0.1 ) 38.0
Total Ownership Costs 111.9 8.6 2.4 (0.5 ) 122.4
 
Other Costs and Expenses
Maintenance expense 60.2 - 0.6 - 60.8
Marine operating expense - - 11.5 - 11.5
Other 7.6 3.6 - -   11.2
Total Other Costs and Expenses 67.8 3.6 12.1 -   83.5
 
Segment Profit $ 73.8 $ 30.0 $ 0.7 $ 0.7   105.2
Selling, general and administrative 38.5
 
Income before Income Taxes 66.7
Income Tax Provision 14.9
Net Income $ 51.8
 
 

Selected Data:

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