GATX Corporation (NYSE:GATX) Q3 2023 Earnings Conference Call October 24, 2023 11:00 AM ET

Company Participants

Shari Hellerman - Head, IR

Bob Lyons - President and CEO

Tom Ellman - EVP and CFO

Conference Call Participants

Justin Long - Stephens

Matt Elkott - TD Cowen

Allison Poliniak - Wells Fargo

Justin Bergner - Gabelli Funds

Brendan McCarthy - Sidoti

Bascome Majors - Susquehanna

Operator

Good morning. My name is Rob and I'll be your conference operator today. At this time, I would like to welcome everyone to the GATX Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Thank you.

Shari Hellerman, Head of Investor Relations. You may begin your conference.

Shari Hellerman

Thank you, Rob. Good morning and thank you for joining GATX's 2023 third quarter earnings call. I'm joined today by Bob Lyons, President and CEO; and Tom Ellman, Executive Vice President and CFO.

Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements. Actual results or trends could differ materially from those statements or forecasts. For more information, please refer to the risk factors included in our earnings release and those discussed in GATX's Form 10-K for 2022 and in our other filings with the SEC. GATX assumes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

Earlier today GATX reported 2023 third quarter net income of $52.5 million or $1.44 per diluted share. This compares to 2022 third quarter net income of $29.1 million or $0.81 per diluted share. The 2022 third-quarter results include a net negative impact of $10.8 million or $0.31 per diluted share from Tax Adjustments and Other Items.

Year-to-date, 2023 net income was $193.2 million or $5.30 per diluted share. This compares to $107.5 million or $2.99 per diluted share for the same period in 2022. The 2023 year-to-date results include a net negative impact of $1.1 million or $0.03 per diluted share from Tax Adjustments and Other Items.

The 2022 year-to-date results include a net negative impact of $55.2 million or $1.54 per diluted share from Tax Adjustments and Other Items. These items are detailed in the supplemental information pages of our earnings release.

Now I'll briefly address each of our business segments. Our Rail North America fleet utilization was 99.3% at the end of the quarter. Demand for the majority of car types and our existing fleet remains strong and we continue to extend renewals at higher rate. The third quarter renewal rate change of GATX's Lease Price Index was positive 33.4% with an average renewal term of 65 months. Our renewal success rate remained very high at nearly 84% in the quarter.