GATX Corporation Q1 FY2026 earnings call

• Despite macroeconomic uncertainty, businesses performed in line with expectations in Q1. - Rail North America had steady rail car demand, fleet utilization 98.1% including Wells Fargo fleet, strong renewal activity with high success rate, lease rate increases, and placed many railcars from supply agreement. - Rail International had steady demand in Europe and strong demand in India. - Engine leasing had excellent operating results with strong demand for aircraft spare engines but some lumpy remarketing activity.

Despite heightened macroeconomic uncertainty, GATX's businesses delivered results in line with expectations in the first quarter. At Rail North America, demand for rail cars in the existing fleet remained steady. At the end of the first quarter, Rail North America's fleet utilization was 98.1%, with renewal activity strong: renewal success rate was 79.1%, lease rate increase of GATX's lease price index was 22.3%, and average renewal term was 56 months. Over 8,400 railcars were placed from the 2022 Trinity supply agreement, and about $50 million in gains on asset dispositions were generated. At Rail International, railcar demand in Europe remained steady with fleet utilization at 94.7% at quarter end; in India, GATX Rail India's fleet utilization was 100%. Within engine leasing, the joint venture with Rolls-Royce and wholly owned engine portfolio had excellent operating results, though lower earnings at RRPS were due to timing of remarketing activity, and there was strong demand for aircraft spare engines.

• 2026 Q1 diluted earnings per share was 235, compared to 215 in 2025 Q1. - Rail North America sees meaningful runway to enhance financial performance with remaining fleets repriced. - Engine leasing segment profit expected in $180 to $185 billion range. - Maintenance full year guidance in range of $500 million.

• Heightened macroeconomic uncertainty could impact business. - Geopolitical environment potential impact on air travel trends affecting engine leasing. - Competitive landscape in secondary market could affect asset dispositions and gains.

• Q: Starting off with the integration of Wells Fargo fleet and recent deal, any milestones or updates?

A: Integration going well, cutover of fleet data on Jan 1st was successful, onboarded new employees, added about 300 new accounts, on target for full year impact of joint venture. - Q: Believe there will be more consolidation in leasing space?

A: Difficult to predict other potential transactions, focused on maximizing returns on portfolio, competitive landscape is competitive with many players. - Q: Overall GATX North America consolidated fleet in 3 - 5 years?

A: Fair assumption to keep fleet generally same car count, but will look at buy and sell opportunities. - Q: Market value vs book value of fleet?

A: Very active in secondary market, see consistent returns, value seen in actual cash from asset sales. - Q: Incremental thoughts related to airline industry capacity impacts into engine leasing business?

A: Engine leasing business performed well, income from operations up year-over-year due to more engines on lease at higher rates, remarketing income lumpy but expect year-end consistent with history. - Q: NCI additive, should reverse to subtraction from net income?

A: First quarter net positive when considering management fees and incremental SG&A, expected to be more positive going forward with asset sales. - Q: LPI indicative of sustained strength?

A: North American rail market supportive, supply-demand dynamics persist, feel comfortable with LPI guidance for full year. - Q: Renewal success rate high 70s impact of Iran conflict?

A: Customers expressed concern but not seeing significant deterioration in market conditions broadly. - Q: Higher-than-expected step down in ending balance of combined North America rail cars?

A: Additions and subtractions from fleet in Q1 more or less as expected, includes boxcar fleet. - Q: Maintenance expense level as percentage of revenue?

A: Noise in maintenance, sticking to full year guidance of ~$500 million. - Q: LPI on entire North American fleet?

A: Q1 LPI does not include material impact from acquired Wells Fargo fleet, full year guidance remains. - Q: Long-term supply agreement and fleet replenishment?

A: Nothing changed in long-term view of supply, will continue to buy rail cars in various ways. - Q: Secondary market assessment?

A: Secondary market remains very robust, expect to be right in $200 million range for gains on dispositions. - Q: Lease renewal conversations and concessions?

A: Largely noise, every renewal conversation different, not seeing significant negative trend. - Q: What causes EPS to come in at lower or higher end of range?

A: Biggest driver is remarketing timing, also maintenance spend and global economy/aviation market disruption. - Q: Rail International strength vs 2025 Q1 comp?

A: First quarter very much in line with expectations. - Q: Maintenance pressures from inflation?

A: No significant pressures, year playing out as expected. - Q: Wells JV's NCI to become positive?

A: Biggest driver is asset disposition gains, with revenue and expense lines similar to expectations.