Financial Data of Business Segments

9 Months Ended

Sep. 30, 2019

The financial data presented below depicts the profitability, financial position, and capital expenditures of each of our business segments.

We lease, operate, manage, and remarket long-lived, widely-used assets, primarily in the rail market. We report our financial results through four primary business segments: Rail North America, Rail International, Portfolio Management, and American Steamship Company ("ASC").

Rail North America is composed of our operations in the United States, Canada, and Mexico. Rail North America primarily provides railcars pursuant to full-service leases under which it maintains the railcars, pays ad valorem taxes and insurance, and provides other ancillary services.

Rail International is composed of our operations in Europe ("GATX Rail Europe" or "GRE"), India ("Rail India"), and Russia ("Rail Russia"). GRE leases railcars to customers throughout Europe pursuant to full-service leases under which it maintains the railcars and provides value-adding services according to customer requirements.

Portfolio Management is composed primarily of our ownership in a group of joint ventures with Rolls-Royce plc that lease aircraft spare engines, as well as five liquefied gas carrying vessels (the "Specialized Gas Vessels") and assorted other marine assets.

ASC operates the largest fleet of US-flagged vessels on the Great Lakes, providing waterborne transportation of dry bulk commodities such as iron ore, coal, limestone aggregates, and metallurgical limestone.

Segment profit is an internal performance measure used by the Chief Executive Officer to assess the profitability of each segment. Segment profit includes all revenues, expenses, pre-tax earnings from affiliates, and net gains on asset dispositions that are directly attributable to each segment. We allocate interest expense to the segments based on what we believe to be the appropriate risk-adjusted borrowing costs for each segment. Segment profit excludes selling, general and administrative expenses, income taxes, and certain other amounts not allocated to the segments. These amounts are included in Other.

The following tables show certain segment data for each of our business segments (in millions):



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
Three Months Ended September 30, 2019
Revenues
Lease revenue	$	214.6		$	55.6		$	0.3		$	1.0		$	—		$	271.5
Marine operating revenue	—			—			1.9			60.9			—			62.8
Other revenue	23.9			2.4			0.1			—			—			26.4
Total Revenues	238.5			58.0			2.3			61.9			—			360.7
Expenses
Maintenance expense	64.0			12.2			—			8.2			—			84.4
Marine operating expense	—			—			3.4			36.3			—			39.7
Depreciation expense	63.9			14.5			1.6			3.6			—			83.6
Operating lease expense	13.7			—			—			—			—			13.7
Other operating expense	6.2			1.4			0.1			—			—			7.7
Total Expenses	147.8			28.1			5.1			48.1			—			229.1
Other Income (Expense)
Net gain on asset dispositions	4.3			0.3			0.5			—			—			5.1
Interest (expense) income, net	(33.1		)	(10.2		)	(2.8		)	(1.6		)	1.4			(46.3		)
Other expense	(1.0		)	(0.1		)	—			(0.1		)	(0.6		)	(1.8		)
Share of affiliates' pre-tax income	—			—			15.8			—			—			15.8
Segment profit	$	60.9		$	19.9		$	10.7		$	12.1		$	0.8		$	104.4
Less:
Selling, general and administrative expense																44.4
Income taxes (includes $3.0 related to affiliates' earnings)																14.9
Net income																$	45.1

Net Gain on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	4.4		$	—		$	—		$	—		$	—		$	4.4
Residual sharing income	0.1			—			0.5			—			—			0.6
Non-remarketing net gains (1)	(0.2		)	0.3			—			—			—			0.1
	$	4.3		$	0.3		$	0.5		$	—		$	—		$	5.1

Capital Expenditures
Portfolio investments and capital additions	$	138.1		$	51.8		$	—		$	0.3		$	0.9		$	191.1

Selected Balance Sheet Data at September 30, 2019
Investments in affiliated companies	$	0.2		$	—		$	506.5		$	—		$	—		$	506.7
Identifiable assets	$	5,625.5		$	1,397.2		$	639.6		$	319.1		$	109.5		$	8,090.9

__________

(1) Includes net gains from scrapping of railcars.



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
Three Months Ended September 30, 2018
Revenues
Lease revenue	$	218.2		$	52.3		$	0.3		$	1.1		$	—		$	271.9
Marine operating revenue	—			—			3.1			57.7			—			60.8
Other revenue	15.2			1.8			—			—			—			17.0
Total Revenues	233.4			54.1			3.4			58.8			—			349.7
Expenses
Maintenance expense	60.6			10.1			—			6.8			—			77.5
Marine operating expense	—			—			4.4			35.0			—			39.4
Depreciation expense	62.5			13.8			1.8			3.5			—			81.6
Operating lease expense	11.8			—			—			—			—			11.8
Other operating expense	7.1			1.3			0.1			—			—			8.5
Total Expenses	142.0			25.2			6.3			45.3			—			218.8
Other Income (Expense)
Net gain on asset dispositions	9.6			0.5			0.2			—			—			10.3
Interest (expense) income, net	(31.8		)	(8.9		)	(2.6		)	(1.5		)	2.2			(42.6		)
Other (expense) income	(1.2		)	0.2			—			(0.1		)	(2.7		)	(3.8		)
Share of affiliates' pre-tax income	0.2			—			14.3			—			—			14.5
Segment profit (loss)	$	68.2		$	20.7		$	9.0		$	11.9		$	(0.5	)	$	109.3
Less:
Selling, general and administrative expense																46.5
Income taxes (includes $2.7 related to affiliates' earnings)																15.8
Net income																$	47.0

Net Gain on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	6.7		$	—		$	—		$	—		$	—		$	6.7
Residual sharing income	0.5			—			0.2			—			—			0.7
Non-remarketing net gains (1)	2.4			0.5			—			—			—			2.9
	$	9.6		$	0.5		$	0.2		$	—		$	—		$	10.3

Capital Expenditures
Portfolio investments and capital additions	$	129.1		$	40.4		$	—		$	—		$	0.2		$	169.7

Selected Balance Sheet Data at December 31, 2018
Investments in affiliated companies	$	0.2		$	—		$	464.3		$	—		$	—		$	464.5
Identifiable assets	$	5,236.6		$	1,363.2		$	606.8		$	297.8		$	112.3		$	7,616.7

__________

(1) Includes net gains from scrapping of railcars.



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
Nine Months Ended September 30, 2019
Revenues
Lease revenue	$	654.3		$	161.7		$	0.8		$	3.1		$	—		$	819.9
Marine operating revenue	—			—			4.4			132.4			—			136.8
Other revenue	73.7			6.2			0.5			—			—			80.4
Total Revenues	728.0			167.9			5.7			135.5			—			1,037.1
Expenses
Maintenance expense	199.8			35.5			—			16.0			—			251.3
Marine operating expense	—			—			12.0			80.8			—			92.8
Depreciation expense	192.6			42.7			4.9			7.1			—			247.3
Operating lease expense	41.1			—			—			—			—			41.1
Other operating expense	19.0			4.2			0.3			—			—			23.5
Total Expenses	452.5			82.4			17.2			103.9			—			656.0
Other Income (Expense)
Net gain on asset dispositions	44.6			1.2			1.1			—			—			46.9
Interest (expense) income, net	(101.4		)	(30.2		)	(8.3		)	(4.6		)	4.6			(139.9		)
Other expense	(3.6		)	(0.5		)	—			(0.3		)	(1.2		)	(5.6		)
Share of affiliates' pre-tax income	—			—			53.6			—			—			53.6
Segment profit	$	215.1		$	56.0		$	34.9		$	26.7		$	3.4		$	336.1
Less:
Selling, general and administrative expense																135.6
Income taxes (includes $10.0 related to affiliates' earnings)																45.9
Net income																$	154.6

Net Gain on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	40.9		$	—		$	—		$	—		$	—		$	40.9
Residual sharing income	0.3			—			1.1			—			—			1.4
Non-remarketing net gains (1)	3.4			1.2			—			—			—			4.6
	$	44.6		$	1.2		$	1.1		$	—		$	—		$	46.9

Capital Expenditures
Portfolio investments and capital additions	$	342.4		$	158.6		$	—		$	18.7		$	2.8		$	522.5

__________

(1) Includes net gains from scrapping of railcars.



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
Nine Months Ended September 30, 2018
Revenues
Lease revenue	$	655.3		$	156.9		$	0.8		$	3.1		$	—		$	816.1
Marine operating revenue	—			—			11.0			119.8			—			130.8
Other revenue	51.1			6.0			0.5			—			—			57.6
Total Revenues	706.4			162.9			12.3			122.9			—			1,004.5
Expenses
Maintenance expense	192.8			33.8			—			14.1			—			240.7
Marine operating expense	—			—			12.9			76.6			—			89.5
Depreciation expense	185.8			41.7			5.5			7.1			—			240.1
Operating lease expense	37.5			—			—			—			—			37.5
Other operating expense	21.5			4.3			0.4			—			—			26.2
Total Expenses	437.6			79.8			18.8			97.8			—			634.0
Other Income (Expense)
Net gain on asset dispositions	68.4			3.2			0.8			0.1			—			72.5
Interest (expense) income, net	(93.1		)	(26.5		)	(7.6		)	(4.3		)	6.8			(124.7		)
Other expense	(3.3		)	(7.3		)	—			(0.2		)	(4.1		)	(14.9		)
Share of affiliates' pre-tax income	0.5			—			47.6			—			—			48.1
Segment profit	$	241.3		$	52.5		$	34.3		$	20.7		$	2.7		$	351.5
Less:
Selling, general and administrative expense																137.6
Income taxes (includes $9.0 related to affiliates' earnings)																51.8
Net income																$	162.1

Net Gain on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	60.8		$	—		$	—		$	0.1		$	—		$	60.9
Residual sharing income	0.9			—			0.8			—			—			1.7
Non-remarketing net gains (1)	6.7			3.2			—			—			—			9.9
	$	68.4		$	3.2		$	0.8		$	0.1		$	—		$	72.5

Capital Expenditures
Portfolio investments and capital additions	$	414.7		$	104.5		$	—		$	15.8		$	1.7		$	536.7

__________

(1) Includes net gains from scrapping of railcars.