Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

GATX (NYSE:GMT)

Q2 2014 Earnings Call

July 31, 2014 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 & Company, Incorporated, Research Division

Derek Rabe

Matthew S. Brooklier - Longbow Research LLC

Justin Bergner - G. Research, Inc.

Kristine Kubacki - Avondale Partners, LLC, Research Division

Operator

Good day, and welcome to the GATX Second Quarter Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Jennifer Van Aken. Please go ahead.

Jennifer Van Aken

Thank you, John, and good morning, everyone. Thanks for joining us for the second quarter 2014 conference call. With me today are Brian Kenney, President and CEO of GATX Corporation; and Bob Lyons, Executive Vice President and Chief Financial Officer.

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 2013 Form 10-K 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. I'll give an overview of the results provided in our press release earlier this morning and then I'll turn over to Brian for comments on the proposed regulation for the transportation of flammable liquids by rail provided by PHMSA the last week. After that, we'll take your questions.

Today, we reported 2014 second quarter net income of $53.1 million or $1.15 per diluted share. This compares to 2013 second quarter net income of $35.1 million or $0.74 per diluted share, which includes a benefit from tax adjustments and other items of $3 million or $0.06 per diluted share. Details related to Tax Adjustments and Other Items are detailed on Page 11 of this morning's press release.

Year-to-date 2014, we reported net income of $95.2 million or $2.05 per diluted share. This compares to net income of $62.2 million or $1.31 per diluted share for the same period of 2013. The 2013 results include a benefit from Tax Adjustments and Other Items of $1.7 million or $0.04 per diluted share.

Our second quarter results are reflective of the continued strong demand for tank cars in North America and improved demand for several freight car types, including small and medium cube covered hoppers. The following fleet performance discussion excludes the GATX boxcar fleet. Rail North America's fleet utilization was 98.6% at the end of the second quarter, and we continued to achieve very strong lease rate increases on long-term renewals. During the quarter, the renewal rate change of GATX's lease price index was 36%, and the average renewal term was 67 months. Our renewal success rate remained high at nearly 85% in the second quarter. The secondary market for railcars remains active and Rail North America generated more than $20 million in asset remarketing income during the second quarter.

As noted in this morning's press release, we've made good progress integrating the newly acquired boxcar fleet by putting idle cars on lease and scrapping older equipment. At the end of the second quarter, GATX's boxcar fleet was approximately 19,300 cars and utilization was 90.7%. The boxcar fleet size and utilization are provided on the last page of the press release.

Within Rail International, the European tank car leasing market remained stable. GATX Rail Europe is seeing steady demand in both the petroleum and chemical markets. Rail International's investment volume was more than $40 million during the second quarter as GRE continues to take delivery of new tank cars.

American Steamship Company had a challenging start to the year due to the severe ice conditions on the Great Lakes. The extreme weather conditions led to significant inefficiencies and lost operating days. However, customer demand remains brisk. ASC is currently operating 14 vessels and plans to bring 1 more vessel into service this season to meet customer demand. Portfolio management results were driven primarily by the solid performance of the Rolls-Royce & Partners Finance affiliates.

GATX repurchased nearly 1.4 million shares for approximately $88.5 million during the second quarter. At the end of the quarter, there was $151.5 million remaining under our $250 million repurchase authorization.

With that brief overview, I'll turn it over to Brian.

Brian A. Kenney

Thanks, Jennifer, and good morning, everybody. Now last Wednesday, the Pipeline and Hazardous Material Safety Administration, or PHMSA, they finally released the details of the long-awaited Notice of Proposed Rulemaking concerning the safe transportation of flammable liquids by rail. Now the notice addresses 3 areas.

First and obviously, most relevant to us, GATX, it addresses revised tank car standards. Second, it addressed the classification and testing program for mine gases and liquids. And lastly, it addressed new railroad operational requirements including braking, control, speed restrictions, et cetera for what PHMSA designates as high hazard flammable trains. Now in the NPRM, high hazard flammable transit is defined as a train with 20 or more cars of a Class 3 flammable liquid. Once this NPRM is published in the Federal Register, and I think that will be in the next few days, there's going to be a 60-day public comment period. So as far as our reaction to this notice, first of all, we applaud PHMSA for trying to construct a comprehensive solution to this issue of improving the safety of movement of flammable liquids by rail. By addressing all 3 of the areas: Product classification, operating procedures and tank car standards, the regulations, once they are finalized, should meaningfully improve the transportation of flammable liquids by rail.

Now also through their introduction of this high hazard flammable train concept, PHMSA attempted to address the greatest risk to safety, which has been the unit train transportation of crude oil and ethanol. So we also applaud them for that effort as well. But as far as the effect on GATX, now obviously, there's continued uncertainty inherent in this notice, for example, in the NPRM, PHMSA is seeking comment on issues ranging from tank car design, where there's 3 different potential new car designs they put forth, to train speeds where they're seeking them put on 3 or 4 different options there. They're also seeking feedback on a variety of assumptions that were made in their economic impact analysis. So there's still a lot of uncertainty in the notice. And from our perspective, until these questions are answered and the tank car design standard is finalized, we obviously, don't know what the retrofit standard will be.

We're also a little bit unsure of the practicality of the high hazard flammable train definition. The railroads have that operational knowledge to know if that's feasible, but they also had the data concerning how many of these commodities beyond crude and ethanol actually travel in more than 20 car quantities on a single train on a regular basis. And until that information is known, it's difficult for our co-owners, such as GATX, to know what other commodities are acceptable for transport in the existing fleet of tank cars. So once that's clear, we'll have a better idea of whether the retrofit deadlines are practical, and that brings us to the question of how we plan to comment back to PHMSA. Now first of all, you've seen it's a 200-page document and we're working to understand the intricacies of the NPRM more completely, and we'll figure out our response in the coming weeks. But as you may remember from this discussion on previous earnings calls, GATX's work within its industry group, the Railway Supply Institute or RSI, and we've delivered a very comprehensive design and retrofit plan to PHMSA in response to their advanced notice last September. And that plan took a risk-based approach to the priority of retrofit, and that was based on the type of commodity that each car carries. Now we continue to believe that, that commodity-based plan is more practical and provides more certainty both to railroads and car owners, in fact, you could argue that a commodity-based approach also maybe more comprehensive as to the number of cars that must be retrofit to remain in service.

But later in the NPRM, you see that PHMSA appears willing to be -- to at least consider a more commodity base rule by some of the public feedback they're requesting. So we'll just have to see how that discussion goes through the comment period.

Another point that we discussed on prior earnings calls is that we believe the retrofit from a large number of cars in the GATX fleet are likely to be very difficult to justify financially. Now all the various retrofit proposals involve jacketing and insulating the older cars at a minimum in crude and ethanol service. And given the great expense of this retrofit and the older age profile of GATX's fleet of these cars, we believe that in most cases, we're more likely to try to redeploy the car into other service, if allowable, or send them to scrap. So that's another reason why the certainty of a commodity-based rule just makes more sense to us.

So I want to end the summary with a quick update on the exposure we have in our existing fleet to the flammable liquids. We have approximately 13,000 cars in flammable liquid service. Approximately 4,900 of those cars are currently in crude and ethanol service. And for those of you that read the rule and proposed rule in detail, we can't be certain of the packing groups of these various crude and ethanol cars that they're carrying, because the level of disclosure is not really required in our customer leases. But anyway, that leaves 8,100 cars in other flammable liquid service. So that's mostly fuel oil such as heating oil, bunker fuel, diesel, variety of other commodities. And as I discussed, there's considerable uncertainty around how the NPRM will impact these 8,100 cars. And until more information becomes available concerning how these cars are grouped in trains today. So you can understand again why we believe the certainty of a commodity-based rule might make more sense.

That's all I wanted to address upfront other than I know you probably have some pretty specific questions, but hopefully, now you realize that enough uncertainty exists in this proposal that it makes answering those specific questions with any degree of precision difficult. And until we get that certainty, we'll just continue to work with the other industry participants and the regulators to develop rules that make this type of transportation safer.

So let's go ahead, operator, and open it up to questions.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll go ahead and take our first question from Justin Long. He is with Stephens.

Justin Long - Stephens Inc., Research Division

Brian, that was a helpful overview on the regulation and what's been proposed. I wanted to start with a question on that. If you look at the 13,000 cars that you have in flammable service today that you noted, about how many of those could you redeploy into non-flammable service?

Brian A. Kenney

Well that depends on where the ultimate rule falls out. Because right now we don't have the information. Only the railroads really have the information on how these cars that are outside of crude and ethanol travel today. In other words, do they travel in more than 20 cars on a single train. We don't have great information there. So once that becomes more certain, or they go to a commodity-based rule, we'll know how many cars are actually can be redeployed into other service. Right now, it's hard to tell.

Justin Long - Stephens Inc., Research Division

Okay. All right. Fair enough. And I wanted to ask about non-tank demand or freight car demand picking up. I know you guys, when you're looking at the potential returns on a lease, you have a normalized market-rate assumption by car type. Given the strengthening we've seen in demand for freight cars, are there now some freight car types where the market rates are above that normalized expectation. And if so, is there a way to frame up the magnitude of this difference?

Brian A. Kenney

Yes, you know, it's always hard to say this is what it is for freight cars, because it's a very diverse fleet and sometimes, it's frustrating to answer anything like this about GATX's diversified fleet as it depends on car type. So to give you an example in coal, no, that's not really at a normalized rate right now. Anything in construction is not anywhere near a normalized rate right now. Small cube covered hoppers, they're probably at or above a normalized rate right now. Grain is approaching a normalized rate right now. So broadly speaking, if you make me generalize, I'd say, there's still a ways to go on freight cars in general, but it's definitely improving.

Justin Long - Stephens Inc., Research Division

Okay, great. That's helpful. I also wanted to ask, we had an announcement during the quarter from Mitsubishi that they're planning to build out a U.S.-based lease fleet. Element is being building out a fleet as well. What's your take on the supply coming into the market, and do you think it creates a more competitive market dynamic or is demand right now strong enough to absorb the supply?

Brian A. Kenney

Definitely, and this is typical of an up cycle as new players come in. It creates a lot of demand. People are chasing deals, especially in the secondary market, especially on the freight car side. So yes. It does impact that. And it makes it more difficult to add older cars to your fleet, but we have a very long-term view and we'll just wait for the right opportunity.

Robert C. Lyons

Jeff, and I was just going to add. This is Bob Lyons. I was just going to add too, if you look back in 2006, '07 and '08, there were a number of new entrants that came into the marketplace at that point in time. And we were able to buy a lot of those cars in 2009 and '10. So we've seen this pattern before.

Justin Long - Stephens Inc., Research Division

That makes sense. And I'll just ask one more and pass it on. Modeling question, expectations for remarketing income in the back half of the year, could you give some more color on what's implied in your guidance relative to what we've seen in the first half?

Robert C. Lyons

Sure. If you recall last year, 2013, we had roughly $71 million of remarketing income. And we indicated coming into 2014, that we expected this year's remarketing income to be a bit lower than that. Year-to-date, we've already had $47 million of remarketing income. So we had very strong first half of the year. And that would -- I would not double that for the back half of the year. The second half of the year remarketing income will be lower than the first. Putting a specific number around that is a little bit difficult, but it will come in under that 71 in total. At least it looks that way right now, but in line with what we expected.

Operator

We'll go ahead and take our next question from Mike Baudendistel with Stifel.

Michael J. Baudendistel - Stifel, Nicolaus & Company, Incorporated, Research Division

That was great detail on the regulations. Just wanted to ask on that. In your experience, is there a significant safety difference between the 7/16-inch and the 9/16-inch steel?

Brian A. Kenney

Well obviously, the thicker you make the tank, it has better puncture resistance, but as far as to define significant, it depends also what else is put on this car and that's why it's a little difficult to react and say we favor this proposal of duties [ph]. Now we really have to study this. But absolutely, as you increase the thickness, you're going to have more puncture resistance whether it's worth doing it for -- we really think it makes more sense to look at each commodity and what that commodity deserves to travel in and that's what the RSI proposal was.

Michael J. Baudendistel - Stifel, Nicolaus & Company, Incorporated, Research Division

Okay. And the new entrants that the other analysts have mentioned, do those competitors, do they have the same degree of service and fleet management capabilities that you do and even though they're competitors on a leasing side, is it possible they could become customers on the services side?

Brian A. Kenney

Well, we've been in business for 114 years, so it's hard to say they have the same capabilities we do on the service side. As far as being a customer, I'm more focused on our own fleet right now than trying to do work for others. And depending on the final regulations, there could be a lot more work to do.

Michael J. Baudendistel - Stifel, Nicolaus & Company, Incorporated, Research Division

Okay, great. And then I just wanted to ask on the boxcars, since that's a new business for you. How are you able to increase the utilization as much as you have, and how are the arrangement structured with customers? It seems like those are structured somewhat differently than the rest of the fleet?

Robert C. Lyons

Yes, it's Bob Lyons. The fleet when we purchased it, there was a couple of a number of very compelling reasons why we made the investment when we did. First of all, we felt we were getting the assets in extremely attractive valuation. We also felt we are approaching a point in time where the supply and demand balance would be working in our favor. A number of the cars that we acquired back at the end of April, the end of March were idle, and we felt some of those cars would be destined for scrap and others we could put into service. We picked up 12 points of utilization during the course of the last 3 months, which was a very strong performance. About 3% of that, 300 basis points of that really came from scrapping. About 100 basis points from selling certain boxcars that we had targeted for sale. But the biggest increase, about 8% of utilization points really came from putting idle cars into active service. That's about 1,600 cars that our commercial team was able to allocate for active service very quickly. The rates are attractive, and many of those that were going to move from idle to active are actually going out on longer-term lease. The vast majority of the boxcar portfolio is per diem business as you know, but we're finding homes for these cars at very attractive rates on longer-term leases. So I'd be a little hesitant to commit to that performance, that type of utilization increase each quarter. But certainly, right out of the gate, the first 3 months, the returns are very attractive and I think validate the thesis behind the investment.

Operator

And we'll take our next question from Art Hatfield with Raymond James.

Derek Rabe

This is Derek Rabe on for Art. I wanted to circle back to your earlier commentary on your portion of your fleet that's in flammable service. Can you just ballpark what the legacy pre-2011 percent looks like?

Brian A. Kenney

Sure. As far as the legacy cars, jacket and non-jacket, or in total do you...?

Derek Rabe

If you got both, that would be great.

Brian A. Kenney

Well it's about, say out of the 13,000, we have about 11,000 that have legacy cars. Most of them, I'd say probably 6,500 are non-jacketed and the rest are jacketed.

Derek Rabe

Okay. So as we look at the new rigs. I think the onus from our perspective, the way we read it, it might be more on the retrofit side. And we're seeing a number of the industry participants start to ramp up their repair capabilities. How should we think about the portion of the potential umbrella of potentially affected railcars that might be pushed out to third parties versus done in-house. Is there a way to ballpark that, size that up from an industry perspective?

Brian A. Kenney

From an industry perspective? or a GATX perspective?

Derek Rabe

Either/or I guess, I was just thinking in terms of, from an industry perspective, how much of that's not going to be done by the internal, the leased aspect of it. So guys like you just doing them in-house?

Brian A. Kenney

Yes, we're going to try to do our fleet in-house for the most part. I really shouldn't comment on others, but a lot of other lessors don't have any capability internally. And including tank car lessors, so they're going to have to use third-party.

Derek Rabe

Okay. That makes sense. And then as we look at the LPI, it ticked up a little bit in the quarter, still a strong level, when do we start coming up against really tough comps for that number. When should we start seeing that moderate?

Robert C. Lyons

Well the LPI is right in line with where we expected it to be coming into the year. We said it would be in the mid-30% range. The first 2 quarters out of the year are right in that ballpark. Then extremely strong level for LPI. And given where rates are today, as I indicated back in the January earnings call, we have a fairly long runway ahead of us of positive comps. Now we'll start -- the bar will start to get raised a little bit more next year and into 2016, but given where rates are today in the environment we're in, we're still in -- have a long runway of positive territory.

Derek Rabe

And are the lease rates for crude cars, they remain pretty steady or have they started to fall?

Brian A. Kenney

Well remember in the third quarter I think the last year, we start talking about some of those crude car rates coming down. Some of the rates especially in early 2013, were just not only unprecedented, but unrealistic to assume that would last a long time. And so it has come down, since then, it has come down a little more this year. Most of that is the overhang of the regulatory situation, but some of it is just not as quick growth in the crude by rail out of the Bakken. But there's still an incredibly healthy rates and we're well above any historical norm, but they have backed off from what we saw in early 2013.

Derek Rabe

So that scale-down in 2014, has that been from, any of that from 1Q to 2Q or most of that in 1Q?

Brian A. Kenney

Just think gradual, I'd say, from the absolute peak in the middle of last year it's probably down 15%. But compared to the -- what we saw in the downturn, it's still up multiple times, 3 or 4 times. So still very, very healthy rates.

Robert C. Lyons

Yes, and just a reminder too, a lot of that rate quote that you're hearing in the secondary market plays a lot of times that's shorter-term rate type stuff that GATX doesn't pursue that business really.

Derek Rabe

No, that's very helpful. Just wanted to take one more question here on the boxcar fleet relative to your normalized fleet or the non-boxcar fleet, is there any way to handicap the percentage of revenue that came from the boxcar fleet?

Robert C. Lyons

Sure. In the second quarter, we had about $18 million of revenue from the boxcar fleet. If you recall when we put out the -- when we made the announcement of the transaction, we expected annualized revenue to be right around $70 million. And our experience in the first quarter of ownership was consistent with that.

Derek Rabe

Okay. And then a more specific question on the international basis. I think the numbers are slightly different from what I'm seeing in my model in terms of the historical numbers of the past few quarters. Is there a reason for that?

Robert C. Lyons

There may be a very slight -- very, very small change, because the utilization numbers that are provided here are for GATX Rail Europe. Previously, we included a very small number of cars from India in the international number, but it really wasn't reflective of the vast majority of the fleet. So it may be very, very small decimal difference between what you have historically.

Operator

And we'll go ahead and take our next question from Matt Brooklier with Longbow Research.

Matthew S. Brooklier - Longbow Research LLC

I wanted to circle back on the redeployment question. And I guess, I'm trying to get a sense for if the tank cars that you currently have in flammable service get redeployed outside of flammable service completely. What markets would that equipment make sense. Where would they be a good fit for you guys in the market in general to transition some cars into nonflammable commodities?

Brian A. Kenney

The nonflammable commodities, likely would involve some type of cut down or major revision to the car. So it's kind of hard to answer that right now. But theoretically, you can cut down some cars and put them in another service, fertilizer, et cetera, but it's way too early to talk about that.

Matthew S. Brooklier - Longbow Research LLC

Okay.

Brian A. Kenney

More likely to try to redeploy them as the rule becomes clear, and especially if they, the commodity angle of the rule becomes clear, we're more likely to redeploy them into other commodities. In fact a lot them are in other commodities today, as I said.

Matthew S. Brooklier - Longbow Research LLC

Okay. So just to clarify, it sounds like that these cars, the size and specifications, the ones that you have in flammable service, there's no, I guess, natural fit outside of flammable service, because you need some modification. Or there are some commodity classes where you could more easily transition those cars?

Brian A. Kenney

I think most of them are best used for other flammable liquids without substantial modification.

Matthew S. Brooklier - Longbow Research LLC

Okay. And then if I'm just looking at your consolidated maintenance expense, that was up a little bit more than we had anticipated. Just curious as to what was the driver there?

Robert C. Lyons

Well you got in the second quarter there was some incremental expenses in there for the boxcar fleet. So that they added -- the boxcar fleet added about $5 million of maintenance expense during the quarter. So it will be at that level potentially a little bit less on a run-rate basis.

Matthew S. Brooklier - Longbow Research LLC

Okay. And were there any other, I guess, maintenance cost anomalies in the quarter that continue or don't continue?

Brian A. Kenney

Well remember we're in the middle of that compliance bubble, and compliance costs are a little higher this year. And we're seeing a lot of railroad repairs this year as well, more wheel replacements running repairs, brakes, trucks, couplers. So this year you're seeing what Bob mentioned, and you're also seeing higher compliance costs and more wheels.

Operator

And we'll take our next question from Justin Bergner with Gabelli & Company.

Justin Bergner - G. Research, Inc.

The question relates to the proposed PHMSA regulations, if they stick with the 7/16-inch standard, is there anything that GATX anticipates needing to do with respect to the shell or the existing CPC-1232 standard sufficient for that 7/16-inch option. And then the second part of the question would be, do you have an estimate of the cost related to thicken the shell if it ends up being 9/16 standard?

Brian A. Kenney

You can't thicken the shell. You can put a jacket around the car in some cases. So the answer to your question is it depends on what car you're starting with and what design standard you need to end up with. And you can't really get more specific than that until the standard is out there. But one thing I can't do is normalize a steel or make it thicker. So it is a standard they're proposing out there and theoretically, you can come up with something that meets that standard, but we have to see what the standard is first.

Justin Bergner - G. Research, Inc.

Okay and as it relates to the 7/16-inch option with the CPC-1232 car satisfy that option as it relates to the shell? Based upon you're...

Brian A. Kenney

Yes, if they come out with a design standard that says 7/16-inch tank is acceptable, then that's what the CP-1232 is, but they're also proposing a number of other enhancements that may -- you may need to apply to the 1232 depending on that final standard. So thermal protection, ECP brakes, whatever else they decide on. So yes, it is currently the CP-1232 has the 7/16th shell.

Justin Bergner - G. Research, Inc.

Okay. And then just a non-safety question. Would you say that the general environment for lease rates on tank cars is still sequentially flat to improving?

Brian A. Kenney

On tank cars, I'd say it's stable except for crude, which as I've said earlier in the call, has come down a little bit since the middle of last year. Otherwise, I'd say we're stable at very high, in fact, beyond the prior peak rates.

Operator

And we'll take our last question from Kristine Kubacki with Avondale Partners.

Kristine Kubacki - Avondale Partners, LLC, Research Division

I apologize if I missed this, but I was just wondering if you could talk a little bit about the conditions in Europe. Obviously, you got out of the JV last year, and allows you to be more of an acquirer over there. What's the situation there?

Brian A. Kenney

With regards to the acquisition opportunities or in general?

Kristine Kubacki - Avondale Partners, LLC, Research Division

Both I think. Just a little bit about the end market conditions, and then what's the opportunities on the acquisition side?

Brian A. Kenney

Yes, sure, I'd say as of the European tank car market where we have a wholly-owned tank car platform over there. It's stable. It's been quite choppy over the last 2 years, due to that continued economic weakness in Europe, and as we discussed last year, the competitive pressure definitely increased in 2013. It was a tougher run rate environment, but they've continued to perform well over there. They increased their segment profit last year. They've done it again so far this year. They continue to execute on their multi-year order program. They placed virtually all of their new deliveries. The reason you saw utilization drop a little bit in Europe in the first half, it was as opposed to the U.S. which had a very severe winter. And most of you know, it’s very mild in Europe over the last winter. So GRE did see some return of petroleum cars during the first quarter. That appears to have stabilized. In their other market, the chemical market, they're seeing a slight uptick. So in general, they performed very, very well in a difficult market. Now the second part of your question about acquisition opportunities. Yes, we think they're going to become available. It is a very fragmented leasing market after the top 2 or 3 players over there. The regulatory maintenance regime has become much more complex and costly and complicated. And we think some of these smaller players may desire to get out over time and we think -- so we think there's probably some acquisition opportunities going forward.

Kristine Kubacki - Avondale Partners, LLC, Research Division

Okay. And then just my last question is on you mentioned on the small cube covered hopper side that it seems like rates are a little bit above normal and it looks like we have some pretty good supply coming on. Is there any risk to that market that we might bubble over here in the short-term? Or is it just there's that much demand out there?

Brian A. Kenney

Great question. I wish I could answer that by rather than what's been driving that is the frac sand market, that has created somewhat of a short supply for other uses and we're starting to see some of that demand for cement, roofing granules commodities like that. So it's a little more broad-based demand, but to the extent the crude market suffers the downturn here, you're going to see that car type suffer a downturn.

Operator

We have no further questions in queue at this time, and I'd like to turn the conference back over to our speakers.

Jennifer Van Aken

Okay, I'd like to thank, everyone, for their participation on the call this morning. Please contact me with any follow-up questions. Thanks.

Operator

And this does conclude today's conference. And you may disconnect at any time.

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!

Source: GATX's (GMT) CEO Brian Kenney on Q2 2014 Results - Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts