GATX Corporation (GMT) CEO Discusses Q2 2013 Results - Earnings Call Transcript

Jul.18.13 | About: GATX Corp. (GATX)

GATX Corporation (GMT) Q2 2013 Earnings Call July 18, 2013 11:00 AM ET

Executives

Jennifer Van Aken - Director of Investor Relations

Brian A. Kenney - Chairman, Chief Executive Officer and President

Robert C. Lyons - Chief Financial Officer and Executive Vice President

Analysts

Justin Long - Stephens Inc., Research Division

Michael J. Baudendistel - Stifel, Nicolaus & Co., Inc., Research Division

Stephen O'Hara - Sidoti & Company, LLC

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

Doug Dyer - Heartland Advisors, Inc.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Matthew S. Brooklier - Longbow Research LLC

Operator

Good day, everyone, and welcome to the GATX Second Quarter Earnings Conference. As a reminder, today's presentation is being recorded.

At this time, I would like to turn the call over to Jennifer Van Aken. Please go ahead, ma'am.

Jennifer Van Aken

Thank you, Doris, and good morning, everyone. Thanks for joining us for the Second Quarter Conference Call. With me on the call are Brian Kenney, President and CEO of GATX Corporation; and Bob Lyons, Executive Vice President and Chief Financial Officer. I'll give a brief overview of the results provided in our press release earlier this morning, and then we'll take questions.

As a reminder, any forward-looking statement made on this call represents our best judgment as to what may occur in the future. We have based these forward-looking statements on information currently available and disclaim any intention or obligation to update or revise these statements to reflect subsequent events or circumstances. The company's actual results will depend on a number of competitive and economic factors, some of which may be outside the control of the company. For more information, refer to our 2012 Form 10-K/A for a discussion of these factors. You can find this report, as well as other information about the company, on our website, www.gatx.com.

Today, we reported 2013 second quarter net income of $35.1 million or $0.74 per diluted share. This includes the benefit of $3.0 million or $0.06 per diluted share from Tax Adjustments and Other Items, which are detailed on Page 11 of the press release. This compares to 2012 second quarter net income of $23.5 million or $0.49 per diluted share, which includes the negative impact from Tax Adjustments and Other Items of $15.3 million or $0.31 per diluted share.

Year-to-date 2013, we reported net income of $62.2 million or $1.31 per diluted share, including the benefit of $1.7 million or $0.04 per diluted share from Tax Adjustments and Other Items. Again, these items are detailed on Page 11 of the press release. Year-to-date 2012, we reported net income of $53.8 million or $1.13 per diluted share, including the negative impact from Tax Adjustments and Other Items of $17.5 million or $0.36 per diluted share.

We continue to see strong demand for tank cars in North America. The renewal rate change of GATX's Lease Price Index was 36.0%, the highest quarterly result achieved since we began reporting this statistic. While achieving remarkable lease rate increases, utilization remained high at 98.2%, and the renewal success rate strong at nearly 80%.

Rail International continues to have solid performance, with a utilization of 95.6% at the end of the second quarter. While the economic environment in Europe is rather weak, we have been successfully renewing leases and placing new rail cars with customers. American Steamship Company is currently operating 13 vessels and is performing in line with expectations. Based on customer input, we continue to expect to move modestly less volume in 2013 than in the prior year.

Portfolio Management continues to perform well. The Rolls-Royce & Partners Finance affiliates maintained high utilization. And as noted in the press release, we dissolved a joint venture consisting of ocean-going multi-gas carriers. As a result, GATX retained 5 of the vessels. Investment volume was over $320 million during the second quarter and over $470 million year-to-date. In addition to the solid investment volume, we also repurchased nearly 1 million of our own shares for approximately $50 million year-to-date.

Based on the continued strength in North American rail and the anticipated asset remarketing events, which are more heavily weighted toward the second half of this year, we are raising our full year 2013 guidance to a range of $3.20 to $3.30 per diluted share. This increase excludes any impact from tax adjustments or other items.

So with that overview, let's go to your questions. Doris?

Question-and-Answer Session

Operator

[Operator Instructions] And we'll go first to Justin Long with Stephens.

Justin Long - Stephens Inc., Research Division

The LPI number was strong in the quarter. I was wondering what you've seen in terms of the progression of tank car lease rates over the course of the first half of 2013. I think it's pretty clear we've seen a massive increase over the past couple of years, but would you say at this point tank car lease rates are still moving higher? Are they holding firm? Or are you seeing any pressure given the narrowing of spreads over the course of this year?

Brian A. Kenney

Yes, it's Brian. It's a good question. And you're absolutely right, we've seen dramatic increases in tank car rates over the last 18 months due to the unprecedented demand for the cars. In the second quarter, we still saw a few absolute rate increases on some of the car types, but in general I'd say they're more holding firm at this point.

Justin Long - Stephens Inc., Research Division

Got you. And...

Brian A. Kenney

We haven't really seen any decreases, at least in the business we do.

Justin Long - Stephens Inc., Research Division

Okay. Got you. And you originally guided for LPI in 2013 to look similar to last year, but with the LPI numbers over 30% through the first 2 quarters, I mean, is it fair to say that you're looking at a year that could be a little bit better than 2012? Or is there any reason to think we see some moderation in the second half?

Robert C. Lyons

No. We will do better than 2012. Originally, it came in expecting 2013 to be, I think we said, in the range of what 2012 was, about 26%, 27%. But based on the first half of the year performance and what we're looking at here in the second half of the year, we'll be north of 30%, in that 30% to 35% range, for the LPI for the full year. So much stronger than anticipated.

Justin Long - Stephens Inc., Research Division

Okay, great. And you guys have been pretty open about your concerns about potential oversupply of tank cars as it relates to crude service longer term, but I was wondering if you could comment on your view of the supply-demand dynamics for non-crude tank cars. And to what degree do you think these other types of tank cars will be impacted if we see some volatility in demand for crude by rail?

Brian A. Kenney

Yes, they will be impacted. I mean, you're already seeing a very competitive environment for non-crude tank cars right now. We got ahead of that, and we didn't put a whole lot of cars into crude service. As you know, we probably have around 1,600 right now, which is a very small percentage of our fleet. But I imagine, as we've been saying, if it gets overbuilt, and I think it probably will, for crude service, you will see more competition as people change production and start building the other tank car types.

Justin Long - Stephens Inc., Research Division

Okay. And last question and then I'll pass it along, but are you seeing any strength in lease rates for markets outside of tank cars right now? And if so, could you give some more detail on those car types, where you are seeing any pick-up?

Brian A. Kenney

Well, outside of tank cars, it's a -- well, it's a bifurcated rail market, for sure. And tank car is very strong, freight car is generally less strong. If you look at coal and grain, they're still what we call very low and depressed, although improving somewhat. We had some success in the quarter placing coal car sets. And in general, I think the industry utilization actually went up a little bit. But if you'll look at the rates we're realizing there, it's nothing to get excited about, but it's always good to have them utilized. We think that'll get better over the next year especially if there's continued improvement in the economy, and more normal weather patterns, et cetera. Grains and other car type, that's – that hasn't been doing great over the last year. It looks like it'll be a better harvest this year. That will improve the situation, but we really don't expect a lot of strength there perhaps until next year as that works its way through the market. But there are some cars on the freight car side, or non-tank, anyway, that are showing some strength, and auto would be a great example.

Operator

Our next question comes from Mike Baudendistel with Stifel.

Michael J. Baudendistel - Stifel, Nicolaus & Co., Inc., Research Division

I just want to make sure I'm interpreting your guidance correctly. The raise in guidance seems like it's due to increase and gains in the second half of the year. Is it fair to say that, operationally, your outlook is more or less unchanged?

Robert C. Lyons

No. I'd actually -- the remarketing income for the full year is probably going to come in line with what we anticipated coming into the year. It's just more weighted to the back half. So we're not anticipating a significant increase in remarketing from what we expected coming into the year. The change in guidance is really driven by a couple of the points we touched on already, which is the far-stronger lease rate environment than we anticipated coming into the year. So when you really look at the LPI performance and our renewal success rate, those are 2 big drivers for us in our North American rail business. We've done better than we expected. And based on what we see in the marketplace today, we feel that that's going to continue through the balance of the year. That's the big driver.

Michael J. Baudendistel - Stifel, Nicolaus & Co., Inc., Research Division

Okay. And on the uptick in utilization, what car types were you able to place that were not being utilized before?

Robert C. Lyons

Well, I'd say, in general, we did a little bit better on coal than we anticipated coming into the quarter. That number can move around a little bit by 30, 40 basis points, as it did. In general, we're nearly fully utilized across pretty much every car type in the fleet.

Michael J. Baudendistel - Stifel, Nicolaus & Co., Inc., Research Division

Okay, great. And when we think about Lease Price Index that you'll report in future quarters, when will you start to have a little bit more difficult comp there with lease rates that are expiring?

Robert C. Lyons

Well, if lease rates stay where they're at today, we have a very long runway in front of us, so a positive LPI, a multiyear runway but positive LPI. But the expiring rate does start to move up. But in 2014, it's really expected to be a relatively modest uptick in the expiring rate. So we feel we have a pretty good window here and runway in front of us.

Michael J. Baudendistel - Stifel, Nicolaus & Co., Inc., Research Division

Great, that's very helpful. And then one final one for me. The media seems to be somewhat fixated on the DOT-111 tank cars. Maybe there's some regulation coming there. Do you have any comments on what you sort of expect as far as regulations on those cars? And how many of those car types do you have?

Brian A. Kenney

Well, sure. The -- I can't comment on what regulations might happen because we're -- we did not have any cars in that train. We're not part of the investigation. It's very early in the investigation. And you just don't know what might happen, if anything, coming out of that accident. There's also been focus -- you mentioned DOT-111, there's been focus on that as if it's a single-car type, in the media. It's really not. It's a regulatory designation that essentially tells you the car is not a high-pressure car and it can be used in hazmat surfaces if outfitted appropriately. And to give you an example, there's 300,000-plus tank cars in the industry, and over 200,000 are DOT-111 cars of varying types. So the real focus, I think, of the regulators to date, and maybe we'll see going forward, has been on the DOT-111 cars that are in flammable liquid service. And if you look at that industry population, that's more along the lines of 64,000, so it's a smaller population. And as far as our exposure at GATX of the very large DOT-111 cars that are in flammable service, there's a population there of about 7,300, and that's on our 110,000-car fleet.

Operator

And our next question comes from Steve O'Hara with Sidoti & Company.

Stephen O'Hara - Sidoti & Company, LLC

You noted that you're keeping, I think, lease terms short for certain car types that have been, I think, weaker in -- or seen weaker demand. Is this a -- something of a change in strategy? And then, I mean -- or is this something you've always been doing or have been doing recently? And is this due to kind of maybe the -- some -- the glimmer of hope or boosting demand that you noted earlier?

Robert C. Lyons

Yes, Steve, I'll take that one. It's Bob Lyons. No, it's really -- it's not a change in strategy at all. It's typical of what we -- the way we like to approach the marketplace. I think the most relevant car type to really reference with that regard is coal. So we have a very young, modern coal fleet that we're -- we believe in long term. But that market is oversupplied right now, so we don't really have an interest in going long term. We want to keep the cars utilized, so we'll be aggressive on rate, as we have been, but we'll keep the term short because we absolutely believe there will be a better environment to remarket and to release those cars in the future. So in some cases, we're doing -- we'll do a year of -- 12-month lease, we'll keep it short. And we're confident in the equipment and the opportunity to do better further down the road.

Stephen O'Hara - Sidoti & Company, LLC

Okay. And then just in terms of the maintenance expense. I know, on the income statement, it's up about 10%, but if you look at the segment breakdown, North America, I think it was actually down a little bit. Is maintenance and other line items, that may be more boosted as well?

Robert C. Lyons

No. On a year-to-date basis, if you look at Rail North America, their maintenance expense was $112 million for the 6 months. But let's just focus on where we are midyear: That's up from $97 million a year ago. So we have, as we expected, seen an uptick in that maintenance expense despite the fact that our renewal success rate is running higher than anticipated. We're dealing with compliance cars, as we talked about coming into the year. And railroad repairs are up. So it is up materially and we anticipated that.

Stephen O'Hara - Sidoti & Company, LLC

Okay. And then maybe finally you could -- I don't know if you did mention it, but the -- what was your renewal success rate in the quarter?

Jennifer Van Aken

Steve, the renewal success was close to 80%.

Robert C. Lyons

Yes. That's a very strong level, continues to be very strong.

Operator

And from Raymond James, our next question comes from Art Hatfield.

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

Just a couple questions, a bunch of my questions have been answered. But first on SG&A, Bob, can you -- SG&A was a little bit higher than we thought it would be, and it kind of jumped from Q1. Was there anything kind of that you would consider, I don't want to say onetime, but unique to Q2 with regards to SG&A?

Robert C. Lyons

Not really, Art. We definitely -- we have some projects underway both on the IT front and on some international tax planning that we're doing that work their way into those numbers. But in general, I would say the -- where we're at year-to-date, at about $88 million in SG&A, that would be a good second half run rate as well. So we anticipate, I think we'll be in the $175 million to $180 million full year. And the uptick from 2012, one of the biggest drivers there is pension expense, probably a consistent theme you're hearing from other public companies. And also we had run with a fairly low headcount, as you'll recall, in 2009, '10 and '11, and we're coming back to some more normalized levels on that front both in 2012 and this year. So we're getting the full year impact of those additions from 2012 this year. That, coupled with some of the project work and also some of our additional focus, really, on international growth, rail growth markets, China, Russia, India, we're absorbing some SG&A there as well and making some investments there for the long term.

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

Okay. That's very helpful. With your change in some of your marine -- with your marine JVs, looking at Portfolio Management in Q2, how that kind of played out, is that how that should -- is Q2 a good representative of how that -- those businesses will be accounted for going forward...

Robert C. Lyons

Yes. We're -- yes. That -- absolutely. We have made a number of changes there. So over the course of the last couple of years, 2 of our big marine joint ventures, we have restructured into 100% ownerships, with the current -- with our former partners being the manager of those assets. We feel that gives us a better economic -- potential economic outcome and flexibility with those assets. So the way they're accounted for in the second quarter will be the case going forward...

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

And was Q2 a full-quarter accounting for that, or was it a partial?

Robert C. Lyons

It was a partial. We closed that transaction, the split of the joint venture, around tax day, around April 15, so...

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

So not -- a couple weeks' difference.

Robert C. Lyons

Yes. Yes, about 6 weeks. So we'll -- third quarter will be a much better representation going forward.

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

Very helpful. And then, Brian, if I could go back to the situation in Quebec and just ask about that. What -- and that was good color you gave on the flammable cars and service and where you sit. If -- and obviously, I'm speculating here, but theoretically, if there's something that comes out of this where there needs to be a retrofit or something with regards to those 64,000 cars, obviously you have 7,300 you own, but is there a potential there for that to be a net positive for you if you end up bringing some of those other cars for shippers and whatnot into your shops and doing some work there?

Brian A. Kenney

I hadn't really thought about it that way, Art. It's a net positive from us from the perspective of, if you even look in our vision statement, it's all about being the best rail car company in the world, not just for our shareholders and employees and customers but also for communities where we operate. And making sure that this equipment is safe, that's it's operated safely by the railroads and handled safely by our customers, that's where it all starts. And if that equation isn't -- if we don't get that right, then nothing else we do matters. So it's kind of secondary to us. Or I would call it third order of concern is the cost of any of this. We just want to make sure these cars are as safe as possible. So I don't know what's coming out of there, but whatever it does, we'll not only conform to it, we'll probably exceed those standards. And we'll participate in that discussion as it comes out and they figure out what happened in this accident. But I hadn't really thought about it in terms of...

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

No, that's the last thing on your mind when something like this happens, but...

Brian A. Kenney

Yes, it really is.

Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division

But unfortunately, those questions crop up occasionally. I thought I'd ask.

Operator

And we'll go next to Doug Dyer from Heartland Advisors.

Doug Dyer - Heartland Advisors, Inc.

Just wanted to confirm that the shortening in the lease rates is apparently being all caused by some coal and grain cars coming back into the market. Is that the case? Or are there some other cars that are seeing shorter terms?

Robert C. Lyons

Well, that's primarily the case, Doug. Shortest definitely in coal, and it does work its way into that term. And as we've mentioned, we are being aggressive in the marketplace to keep those cars in service, being aggressive with rate and staying short.

Operator

[Operator Instructions] And we'll go next to Steve Barger with KeyBanc Capital Markets.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Brian, in response to an earlier question, you had said that you hadn't seen a decrease in lease rates and then you added in, "in the business that we do." Does that suggest there have been decreases in other parts of the market? Or I guess, more directly, what are you hearing in the market in terms of pricing for some of the shorter-term tank leases?

Brian A. Kenney

Yes, that -- Bob and I are laughing because that was an excellent catch. I'd slip that in at the end. And that's exactly where, anecdotally, we're hearing there are some decreases in the very short-term business that's going out in crude service 6 months or 1 year. We're hearing those rates are coming down, but we never participate in that, anyway. So for the business we do, in the long-term leases, we really haven't seen any decreases. But the increases are less numerous, for sure, than they were earlier this year.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Got it. So it does feel like, at the long end of the spectrum, it's just kind of plateauing right now.

Brian A. Kenney

Yes, it's hard to answer whether we're at the peak or not. It's a loaded question. If you go at the 100,000-foot level and you look at railcar loading, they're still down from the prior peak. And in fact, they're down from the post-recession peak in 2011. So with a little help from the economy, you would think that rail traffic increases, and that's great for railcar leasing long term, but obviously there's more to the equation than that and that's tank car supply. And if you look at GATX's fleet, it's once again -- like a lot of questions that we answer, it's on the car type by car type basis. And earlier in this call, we talked about grain and coal being very weak, so you're certainly not at the peak there. You're not at the peak in a lot of the hopper cars that are actually improving at this point. And I said coal is improving. But most of the freight car side, it doesn't feel like we're anywhere near the peak. So I think the question really centers on tank cars, and that's why people are asking that. And that's the color I'd give: In the quarter, there were less increases, definitely, than there were before. And -- but as Bob pointed out, there's effective 100% utilization in the tanker industry right now, so it's hard -- it's -- absolutely, you're at the peak there because it can't get any better. And but on the other hand, manufacturing backlog for tank cars is still out 18 months or more, so it's hard to see a rapid decline in this part of -- at this point as well. So you don't know if we're at the peak, but the beauty about the term structure of our fleet is that, as Bob alluded to earlier, even if rates have peaked out in tank cars, and even if they decrease somewhat, given that term structure of our fleet, you'll see revenue increases on the tank car side for quite some time. And that's due to the average expiring rate on our portfolio and as well as locking-in all those low rates during the 2009-to-'11 environment. So I think like Bob said, we have some runway here.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Right. And in terms -- I hear you on the lead time from the OEMs still being far out, but as you've been out in the market just looking at new cars, if you've put any quote activity out there, has there been any decrease in the new car pricing on the tank car side? Or is that still staying firm?

Brian A. Kenney

No, it's firm.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Okay. You added a little over 2,000 cars in the quarter. Were some of those from secondary deals? Or did you just take a higher number of new cars this quarter?

Robert C. Lyons

We did have a couple of secondary market deals where we bought rail cars in the market. About 800 of those cars were from the Trinity order. So the committed order that we have in the balance, a number of those were in the secondary market, including a distribution from our Southern Capital joint venture for about 400 cars. They had been jointly owned before, now we own those 100%.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Okay. And last quarter on the call, we talked about the kind of the increase in nontraditional or new buyers coming into the market. Over time, if industry perceptions change about the attractiveness of owning cars for some of those guys, do you think there may be an opportunity at some point to do a sale leaseback or to buy some of those cars and lease them back to those companies if they maybe want to get them off their balance sheet? Have you ever thought about that or talked about it with any of those companies?

Brian A. Kenney

Yes, you're talking more about customers buying cars?

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Yes, because people that are buying cars right now, that -- for the short-term opportunity that may not want that car in the future.

Brian A. Kenney

Yes, depending on the car type and what service, definitely. In fact, we do a lot of business with our existing customers. It's a focus of ours because a lot of the big ones own and lease from a number of other lessors, and we are constantly focused on, how can we price some of those cars out of your hand? So we do, do sale leasebacks with existing customers, yes.

Steve Barger - KeyBanc Capital Markets Inc., Research Division

Okay, great. And then my last question: You talked about grain cars a little bit already, but as I look at -- it seems like a lot of acres have been planted this year, the weather seems fairly favorable for growing. Do you expect that that's going to drive rate further down through the year or into next year? And can you talk about the state of the grain fleet in general? Has it been under-invested in? Do people need to buy cars? And just kind of where are we in that overall fleet?

Brian A. Kenney

No, I think it's still in a period of oversupply right now. And I think despite the good harvest this year, I think we probably won't see any strength, that's what our fleet guys are telling us, probably until next year. As the excess starts to go away, there's attrition in the fleet, the stockpiles come down. So there we're looking at probably a stronger market next year.

Operator

And from Longbow Research, our next question comes from Matt Brooklier.

Matthew S. Brooklier - Longbow Research LLC

Can you talk to your CapEx expectations for 2013?

Robert C. Lyons

Sure. We came -- last year, just to kind of level set, we did -- we had $777 million exactly of portfolio investments last year. Coming into this year, we had about $450 million committed, with the balance being discretionary investments that we would look to make during the course of the year. So we felt a good year this year would be back in that $700 million, $700 million to $800 million range, and through the first 6 months…

Jennifer Van Aken

Over $470 million.

Robert C. Lyons

So we've had a very solid first half of the year. I would point out that roughly $100 million of the $470 million was for the split of the joint venture that we did. We talked about in Portfolio Management where we split that marine investment. So that won't repeat. But all in all, on course to be up in that range that we thought coming into the year.

Matthew S. Brooklier - Longbow Research LLC

Okay, relatively healthy year. And then repurchased some stock in the quarter. How should we think about share repurchases going forward for the remainder of the year?

Robert C. Lyons

Sure. Well, currently under the existing authorization, we only -- we have just less than $20 million left under that existing authorization. So that had originally been $200 million. So over the course of the last few years, we now are very close to fully utilizing that authorization for opportunistic repurchase. And that's something that the extent to which that authorization gets increased or addressed again, will be a board-level discussion at the right time.

Matthew S. Brooklier - Longbow Research LLC

Okay. And you've talked to obviously the tank car market. You talked a little about coal and grain cars. Has there been any change outside of those car type categories? Has there been any change in terms of demand in second quarter? Or if you look into the second half of this year, is there some momentum in other rail car types that we have yet to talk about?

Brian A. Kenney

I don't think there's really much to mention other than what we've already talked about.

Robert C. Lyons

Yes, I'd agree. Nothing noteworthy.

Matthew S. Brooklier - Longbow Research LLC

Okay. I mean, we've heard the story about covered offers for plastic pellets, but I'm guessing that's a little bit of a out-year story; have heard of some construction-related equipment that's starting to pick up. Just curious if you're feeling the same thing.

Brian A. Kenney

Well, we'd agree with your comment on the hoppers and the plastic pellets being more of a long-term positive. Center beam is a good example of something that looked a lot better earlier in the year. Rail has started to add some and they may have got a little ahead of themselves. That's leveled off a little bit, but it is stronger, for sure, than it was a year ago. So car type by car type, I think we've hit most of them. There's a little weakness in steel cars right now. So once again, it's a choppy market from a freight car side. And as I said, certainly doesn't feel like the peak there.

Operator

And at this time, there are no further questions in the queue. I will turn the call back to you, Ms. Van Aken.

Jennifer Van Aken

Thanks, everyone, for your participation on the call this morning. I will be available this afternoon to answer any additional questions. Thanks.

Operator

And ladies and gentlemen, that does conclude today's presentation. We thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

GATX (GMT): Q2 EPS of $0.74. Revenue of $338.9M misses by $3.86M. (PR)