GATX Corporation
07/31/2026 | Press release | Distributed by Public on 07/31/2026 11:55
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of GATX Corporation ("GATX", the "Company," "we," "us," "our," and similar terms) should be read in conjunction with our condensed consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report, our Annual Report on Form 10-K for the year ended December 31, 2025, and in our other filings with the Securities and Exchange Commission ("SEC"). We based the discussion and analysis that follows on financial data we derived from the condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and on certain other financial data that we prepared using non-GAAP components. For a reconciliation of these non-GAAP measures to the most comparable GAAP measures, see "Non-GAAP Financial Measures" at the end of this Item. The discussion and analysis below includes forward-looking statements that are subject to risks, uncertainties and other factors described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025 that could cause actual results to differ materially from such forward-looking statements. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.
OVERVIEW
We lease, operate, manage, and remarket long-lived, widely used assets, primarily in the rail market. We report our financial results through three primary business segments: Rail North America, Rail International, and Engine Leasing. Financial results for our tank container leasing business ("Trifleet") are reported in the Other segment.
Operating results for the six months ended June 30, 2026 are not necessarily indicative of the results we may achieve for the entire year ending December 31, 2026. In particular, asset remarketing income does not occur evenly throughout the year. For more information, refer to the consolidated financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2025.
On January 1, 2026, GATX acquired approximately 101,000 railcars for $4.2 billion from Wells Fargo Bank, N.A. ("Wells Fargo") through a newly formed joint venture ("GABX" or the "GABX joint venture") with Brookfield Infrastructure Partners L.P. and its institutional partners (collectively, "Brookfield"). Initially, GATX's ownership share of GABX was 30% with Brookfield's share at 70%. The acquisition from Wells Fargo was partially funded through a $2.96 billion term loan executed by GABX, which is guaranteed by GATX Corporation. As of June 30, 2026, GABX is consolidated and is reported in the Rail North America segment. GATX also directly purchased approximately 200 locomotives from Wells Fargo for approximately $30.4 million, and Brookfield directly acquired Wells Fargo's rail finance lease portfolio, consisting of approximately 22,000 railcars and approximately 400 locomotives. GATX serves as manager of the railcars in GABX as well as the finance lease portfolio directly owned by Brookfield and earns management fees for such services. See "Note 1. Description of Business" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
GATX has the option to acquire up to 100% of the ownership of GABX over time. On June 30, 2026, GATX exercised its first call option for $66.2 million, increasing its overall ownership of GABX from 30% to 33.5% and decreasing Brookfield's ownership from 70% to 66.5%. See "Note 15. Non-Controlling Interest" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information about the options to acquire additional ownership of GABX.
Economic Conditions
GATX, and markets more broadly, are facing heightened uncertainty related to trade policy, geopolitical tensions, and overall economic conditions. These conditions did not have a significant impact on our business and financial results during the first six months of 2026. However, recent developments, including tariff announcements and the ongoing conflict with Iran, have increased economic uncertainty and could have a more significant impact on GATX's financial results in the future. For example, geopolitical tensions in the Middle East have and could continue to increase energy prices, disrupt supply chains, reduce global air travel, and negatively impact our customers. A sustained economic slowdown resulting from these or other factors could impact GATX directly and indirectly, including through higher costs for new railcars or other assets or softening demand for our products and services. Management continues to monitor the macroeconomic and geopolitical environment closely to identify potential risks and to manage our business accordingly. However, we believe we are in a strong position to manage these risks due to our diverse fleet, broad global customer base, long-term lease portfolio, strong balance sheet, and access to capital.
DISCUSSION OF OPERATING RESULTS
Net income attributable to GATX for the six months ended June 30, 2026 was $188.9 million, or $5.19 per diluted share, compared to $154.1 million, or $4.21 per diluted share, for the same period in 2025. Net income attributable to GATX increased $34.8 million compared to the prior year and was impacted by the Wells Fargo rail assets acquisition. The variance was largely due to higher
revenue at Rail North America and Rail International, higher net gain on asset dispositions at Rail North America, and higher earnings at the Rolls-Royce & Partners Finance joint ventures (collectively, the "RRPF affiliates"), partially offset by higher maintenance expense at Rail North America, higher depreciation expense at Rail North America and Rail International, and higher interest expense.
Net income attributable to GATX for the three months ended June 30, 2026 was $103.4 million, or $2.84 per diluted share, compared to $75.5 million, or $2.06 per diluted share, for the same period in 2025. Net income attributable to GATX increased $27.9 million compared to the prior year and was impacted by the Wells Fargo rail assets acquisition. The variance was largely due to higher revenue at Rail North America and Rail International, higher net gain on asset dispositions at Rail North America, and higher earnings at the RRPF affiliates, partially offset by higher maintenance expense at Rail North America, higher depreciation expense at Rail North America and Rail International, higher interest expense, and lower earnings at the RRPF affiliates.
The following table shows a summary of our reporting segments and consolidated financial results (in millions, except per share data):
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Segment Revenues | |||||||||||||||||||||||
| Rail North America | $ | 435.0 | $ | 295.7 | $ | 871.7 | $ | 589.0 | |||||||||||||||
| Rail International | 105.6 | 95.8 | 210.8 | 184.3 | |||||||||||||||||||
| Engine Leasing | 29.4 | 28.6 | 61.0 | 58.2 | |||||||||||||||||||
| Other | 10.1 | 10.4 | 20.3 | 20.6 | |||||||||||||||||||
| $ | 580.1 | $ | 430.5 | $ | 1,163.8 | $ | 852.1 | ||||||||||||||||
| Segment Profit | |||||||||||||||||||||||
| Rail North America | $ | 118.5 | $ | 96.6 | $ | 222.4 | $ | 185.4 | |||||||||||||||
| Rail International | 31.6 | 32.2 | 63.2 | 57.9 | |||||||||||||||||||
| Engine Leasing | 66.4 | 27.3 | 101.7 | 65.9 | |||||||||||||||||||
| Other | 2.1 | 5.1 | 9.7 | 12.1 | |||||||||||||||||||
| 218.6 | 161.2 | 397.0 | 321.3 | ||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Selling, general and administrative expense | 69.2 | 58.2 | 140.5 | 114.8 | |||||||||||||||||||
|
Income taxes (includes $12.4 and $6.5 QTR and $19.2 and $14.8 YTD related to affiliates' earnings)
|
38.4 | 27.5 | 66.4 | 52.4 | |||||||||||||||||||
| Net Income | $ | 111.0 | $ | 75.5 | $ | 190.1 | $ | 154.1 | |||||||||||||||
| Less: Net Income Attributable to Non-Controlling Interest | 7.6 | - | 1.2 | - | |||||||||||||||||||
| Net Income Attributable to GATX (GAAP) | $ | 103.4 | $ | 75.5 | 188.9 | $ | 154.1 | ||||||||||||||||
| Diluted earnings per share (GAAP) | $ | 2.84 | $ | 2.06 | $ | 5.19 | $ | 4.21 | |||||||||||||||
| Investment Volume | $ | 200.5 | $ | 219.0 | $ | 4,720.5 | $ | 515.3 | |||||||||||||||
The following table shows our return on equity for the trailing 12 months ended June 30:
| 2026 | 2025 | ||||||||||
| Return on equity attributable to GATX (GAAP) | 13.5 | % | 12.8 | % | |||||||
| Return on equity attributable to GATX, excluding tax adjustments and other items (non-GAAP) (1) | 13.0 | % | 12.6 | % | |||||||
_________
(1) See "Non-GAAP Financial Measures" at the end of this Item for further details.
Segment Operations
Segment profit is an internal performance measure reported to GATX's President and Chief Executive Officer for purposes of assessing performance and allocating capital and resources to 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.
RAIL NORTH AMERICA
Segment Summary
On January 1, 2026, GATX acquired approximately 101,000 railcars for $4.2 billion from Wells Fargo through the GABX joint venture. GABX is consolidated within the Rail North America segment. See "Note 7. Variable Interest Entities" in Part I, Item 1 of this Quarterly Report on Form 10-Q for quantification of the impacts of this acquisition. Also on January 1, 2026, GATX directly purchased 200 locomotives from Wells Fargo for approximately $30.4 million.
GATX serves as manager of the railcars in GABX as well as the finance lease portfolio directly owned by Brookfield and earns management fees for such services. In the three and six months ended June 30, 2026, GATX received $12.4 million and $24.9 million from GABX and $2.8 million and $5.6 million from Brookfield for these services. GABX management fees earned by GATX are eliminated in consolidation and not shown on the face of the condensed consolidated statements of income. However, the impact of fees earned are included in net income attributable to GATX. Management fees earned by GATX for managing the finance lease portfolio directly owned by Brookfield are reported in other revenue.
Despite ongoing macroeconomic uncertainty and the impacts of the geopolitical environment in the Middle East, demand for most railcars was stable and the renewal success rate remained strong. Utilization was 98.0% at the end of the current quarter.
The following table shows Rail North America's segment results (in millions):
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Lease revenue | $ | 391.0 | $ | 262.8 | $ | 791.7 | $ | 522.8 | |||||||||||||||
| Other revenue | 44.0 | 32.9 | 80.0 | 66.2 | |||||||||||||||||||
| Total Revenues | 435.0 | 295.7 | 871.7 | 589.0 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Maintenance expense | 131.8 | 84.3 | 252.4 | 168.0 | |||||||||||||||||||
| Depreciation expense | 124.0 | 71.7 | 250.7 | 142.1 | |||||||||||||||||||
| Operating lease expense | 7.4 | 7.1 | 14.8 | 14.7 | |||||||||||||||||||
| Other operating expense | 15.8 | 7.8 | 28.9 | 15.3 | |||||||||||||||||||
| Total Expenses | 279.0 | 170.9 | 546.8 | 340.1 | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||
| Net gain on asset dispositions | 67.7 | 39.1 | 117.5 | 71.2 | |||||||||||||||||||
| Interest expense, net | (103.7) | (64.4) | (217.7) | (129.1) | |||||||||||||||||||
| Other expense | (1.5) | (2.8) | (2.3) | (5.5) | |||||||||||||||||||
| Share of affiliates' pre-tax losses | - | (0.1) | - | (0.1) | |||||||||||||||||||
| Segment Profit | $ | 118.5 | $ | 96.6 | $ | 222.4 | $ | 185.4 | |||||||||||||||
| Investment Volume | $ | 147.1 | $ | 132.2 | $ | 4,611.3 | $ | 359.9 | |||||||||||||||
The following table shows the components of Rail North America's lease revenue (in millions):
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Railcars | $ | 363.1 | $ | 238.9 | $ | 734.8 | $ | 474.9 | |||||||||||||||
| Boxcars | 16.9 | 14.8 | 34.9 | 29.9 | |||||||||||||||||||
| Locomotives | 11.0 | 9.1 | 22.0 | 18.0 | |||||||||||||||||||
| Total | $ | 391.0 | $ | 262.8 | $ | 791.7 | $ | 522.8 | |||||||||||||||
Rail North America Fleet Data
The following table shows fleet activity and statistics for Rail North America railcars, excluding boxcars, for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 103,310 | 102,317 | 101,288 | 100,593 | 196,233 | ||||||||||||||||||||||||
| Railcars added | 595 | 366 | 920 | 98,535 | 690 | ||||||||||||||||||||||||
| Railcars scrapped | (614) | (478) | (898) | (1,355) | (878) | ||||||||||||||||||||||||
| Railcars sold | (974) | (917) | (717) | (1,540) | (3,407) | ||||||||||||||||||||||||
| Ending balance | 102,317 | 101,288 | 100,593 | 196,233 | 192,638 | ||||||||||||||||||||||||
| Utilization rate at quarter end (1) | 99.2 | % | 98.9 | % | 99.0 | % | 98.1 | % | 98.0 | % | |||||||||||||||||||
| Renewal success rate (2) | 84.2 | % | 87.1 | % | 91.4 | % | 79.1 | % | 82.6 | % | |||||||||||||||||||
| Active railcars at quarter end (3) | 101,494 | 100,144 | 99,560 | 192,512 | 188,847 | ||||||||||||||||||||||||
| Average active railcars (4) | 102,073 | 100,896 | 99,999 | 193,195 | 190,587 | ||||||||||||||||||||||||
(1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
(2) The renewal success rate represents the percentage of railcars on expiring leases that were renewed with the existing lessee. The renewal success rate is an important metric because railcars returned by our customers may remain idle or incur additional maintenance and freight costs prior to being leased to new customers.
(3) Active railcars refers to the number of railcars on lease to customers. Changes in railcars on lease compared to prior quarters are impacted by the utilization of newly built railcars, railcars purchased in the secondary market, and the disposition of railcars that were sold or scrapped, as well as the fleet utilization rate.
(4) Average active railcars for the quarter is calculated using the number of active railcars at the end of each month.
As of June 30, 2026, leases for 23,008 tank and freight cars and 1,184 boxcars are scheduled to expire over the remainder of 2026. These amounts exclude railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.
In 2022, we entered into a long-term railcar supply agreement with a subsidiary of Trinity Industries, Inc. ("Trinity") to purchase 15,000 newly built railcars through 2028, with an option to order up to an additional 500 railcars each year from 2023 to 2028. The agreement enables us to order a broad mix of tank and freight cars. Trinity will deliver 6,000 tank cars (1,200 per year) from 2024 through 2028. The remaining 9,000 railcars, which can be a mix of freight and tank cars, are expected to be ordered at a rate of 1,500 railcars per order year from 2023 to 2028 and delivered under a schedule to be determined. At June 30, 2026, 9,523 railcars have been ordered pursuant to the terms of the agreement, of which 7,344 railcars have been delivered.
Lease Price Index
Our Lease Price Index ("LPI") is an internally-generated business indicator that measures renewal activity for our North American railcar fleet, excluding boxcars. The LPI calculation includes all renewal activity based on a 12-month trailing average, and the renewals are weighted by the count of all renewals over the 12-month period. The average renewal lease rate change is reported as the percentage change between the average renewal lease rate and the average expiring lease rate. The average renewal lease term is reported in months and reflects the average renewal lease term in the LPI.
During the second quarter of 2026, the renewal rate change of the LPI was positive 16.8%, compared to positive 22.3% in the prior quarter, and positive 24.2% in the second quarter of 2025. Lease terms on renewals for railcars in the LPI averaged 54 months in the current quarter, compared to 56 months in the prior quarter, and 60 months in the second quarter of 2025.
The following table shows fleet activity and statistics for Rail North America boxcars for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 7,990 | 7,621 | 7,478 | 7,032 | 9,888 | ||||||||||||||||||||||||
| Boxcars added | 27 | 172 | 1 | 3,411 | - | ||||||||||||||||||||||||
| Boxcars scrapped | (396) | (285) | (365) | (266) | (251) | ||||||||||||||||||||||||
| Boxcars sold | - | (30) | (82) | (289) | (501) | ||||||||||||||||||||||||
| Ending balance | 7,621 | 7,478 | 7,032 | 9,888 | 9,136 | ||||||||||||||||||||||||
| Utilization rate at quarter end (1) | 98.7 | % | 96.9 | % | 97.1 | % | 97.6 | % | 97.1 | % | |||||||||||||||||||
| Active boxcars at quarter end (2) | 7,521 | 7,247 | 6,831 | 9,648 | 8,875 | ||||||||||||||||||||||||
| Average active boxcars (3) | 7,773 | 7,391 | 7,206 | 9,895 | 9,152 | ||||||||||||||||||||||||
_________
(1) Utilization is calculated as the number of boxcars on lease as a percentage of total boxcars in the fleet.
(2) Active boxcars refers to the number of boxcars on lease to customers. Changes in boxcars on lease compared to prior quarters are impacted by the utilization of new boxcars purchased from builders or in the secondary market and the disposition of boxcars that were sold or scrapped, as well as the fleet utilization rate.
(3) Average active boxcars for the quarter is calculated using the number of active boxcars at the end of each month.
The following table shows fleet activity and statistics for Rail North America locomotives for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 649 | 639 | 634 | 627 | 815 | ||||||||||||||||||||||||
| Locomotives added | - | - | - | 200 | 2 | ||||||||||||||||||||||||
| Locomotives scrapped or sold | (10) | (5) | (7) | (12) | (11) | ||||||||||||||||||||||||
| Ending balance | 639 | 634 | 627 | 815 | 806 | ||||||||||||||||||||||||
| Utilization rate at quarter end (1) | 91.5 | % | 91.8 | % | 92.5 | % | 90.3 | % | 91.2 | % | |||||||||||||||||||
| Active locomotives at quarter end (2) | 585 | 582 | 580 | 736 | 735 | ||||||||||||||||||||||||
| Average active locomotives (3) | 587 | 584 | 581 | 745 | 734 | ||||||||||||||||||||||||
_________
(1) Utilization is calculated as the number of locomotives on lease as a percentage of total locomotives in the fleet.
(2) Active locomotives refers to the number of locomotives on lease to customers. Changes in locomotives on lease compared to prior quarters are impacted by the utilization of new locomotives purchased in the secondary market and the disposition of locomotives that were sold or scrapped, as well as the fleet utilization rate.
(3) Average active locomotives for the quarter is calculated using the number of active locomotives at the end of each month.
Comparison of Reported Results for the First Six Months of 2026 to the First Six Months of 2025
Segment Profit
In the six months ended June 30, 2026, segment profit of $222.4 million increased 20.0% compared to $185.4 million for the same period in the prior year. Segment profit in 2026 was impacted by the acquisition of railcars from Wells Fargo. Aside from the impact of the acquisition, segment profit increased $30.2 million, driven by higher net gains on asset dispositions and higher revenue, partially offset by higher maintenance and interest expense.
Revenues
In the six months ended June 30, 2026, lease revenue increased $268.9 million, or 51.4%. The acquisition of railcars from Wells Fargo led to an increase in lease revenue of $262.5 million. In addition to the impact of the acquisition, lease revenue increased $6.4 million, primarily driven by more railcars on lease and higher lease rates. Other revenue increased $13.8 million primarily due to higher repair revenue and management fee revenue from the finance lease portfolio owned by Brookfield and managed by GATX.
Expenses
In the six months ended June 30, 2026, maintenance expense increased $84.4 million. The acquisition of railcars from Wells Fargo led to an increase of $61.9 million. In addition to this impact, maintenance expense increased $22.5 million driven by more repair events, including more repairs performed by the railroads, and a mix of repairs that resulted in higher costs per repair. Depreciation expense increased $108.6 million, primarily due to the impact of the railcars acquired from Wells Fargo.
Other Income (Expense)
In the six months ended June 30, 2026, net gain on asset dispositions increased $46.3 million, driven by higher net gains on asset dispositions and higher net scrapping gains, partially offset by lower net gains on railcars converted to finance leases. The amount and timing of disposition gains is dependent on a number of factors and may vary materially from period to period. Net interest expense increased $88.6 million, due to a higher average debt balance resulting from debt incurred for the acquisition of railcars from Wells Fargo and a higher average interest rate.
Investment Volume
During the six months ended June 30, 2026, investment volume was $4,611.3 million (including approximately $4.2 billion for the acquisition of railcars and locomotives from Wells Fargo) compared to $359.9 million in the same period in 2025. We acquired 1,765 newly built railcars and purchased 100,994 railcars in the secondary market (including 100,870 railcars acquired at GABX from Wells Fargo) and 202 locomotives (including 200 locomotives from Wells Fargo) in the six months ended June 30, 2026, compared to 1,269 newly built railcars, 707 railcars in the secondary market, and zero locomotives in the same period in 2025.
Our investment volume is predominantly composed of acquired railcars, but also includes the acquisition of locomotives and certain capitalized repairs and improvements to owned railcars and our maintenance facilities. As a result, the dollar value of investment volume does not necessarily correspond to the number of railcars acquired in any given period. In addition, the comparability of amounts invested and the number of railcars acquired in each period is impacted by the mix of railcars purchased, which may include tank cars and freight cars, as well as newly manufactured railcars or those purchased in the secondary market.
Comparison of Reported Results for the Second Quarter of 2026 to the Second Quarter of 2025
Segment Profit
In the three months ended June 30, 2026, segment profit of $118.5 million increased 22.7% compared to $96.6 million for the same period in the prior year. Segment profit in 2026 was impacted by the acquisition of railcars from Wells Fargo. Aside from the impact of the acquisition, segment profit increased $8.1 million, driven by higher net gains on asset dispositions and higher revenue, partially offset by higher maintenance and interest expense.
Revenues
In the three months ended June 30, 2026, lease revenue increased $128.2 million, or 48.8%. The acquisition of railcars from Wells Fargo led to an increase in lease revenue of $129.7 million. Aside from the impact of the acquisition, lease revenue decreased $1.5 million, primarily driven by fewer railcars on lease, principally due to the effect of asset sales. Other revenue increased $11.1 million, driven by higher repair revenue and management fee revenue from the finance lease portfolio owned by Brookfield and managed by GATX.
Expenses
In the three months ended June 30, 2026, maintenance expense increased $47.5 million. The acquisition of railcars from Wells Fargo led to an increase of $35.4 million. In addition to this impact, maintenance expense increased $12.1 million, driven by more repair events and a mix of repairs that resulted in higher costs per repair. Depreciation expense increased $52.3 million, primarily due to the impact of the railcars acquired from Wells Fargo.
Other Income (Expense)
In the three months ended June 30, 2026, net gain on asset dispositions increased $28.6 million, driven by higher net gains on asset dispositions and higher net scrapping gains, partially offset by lower net gains on railcars converted to finance leases. The amount and timing of disposition gains is dependent on a number of factors and may vary materially from period to period. Net interest expense increased $39.3 million, due to a higher average debt balance resulting from debt incurred for the acquisition of railcars from Wells Fargo and a higher average interest rate.
RAIL INTERNATIONAL
Segment Summary
Rail International, composed primarily of GATX Rail Europe ("GRE"), experienced a challenging railcar leasing market as GRE faced ongoing macroeconomic headwinds, including weak GDP results and higher inflation, as well as uncertainty due to the geopolitical environment in the Middle East and Ukraine, which weighed on customers' fleet planning activities. Despite pressure on utilization, GRE experienced renewal lease rate increases for the majority of railcar types in the period. Utilization was 95.3% at the end of the current quarter.
The fleet size of our rail business in India ("Rail India") continued to grow during the current quarter, as Rail India continued to focus on investment opportunities, diversification of its fleet, and developing relationships with customers, suppliers, and the Indian Railways. Demand for railcars in India remained strong, driven by continued growth in the economy and infrastructure development. Utilization was 100.0% at the end of the current quarter.
The following table shows Rail International's segment results (in millions):
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Lease revenue | $ | 100.3 | $ | 89.6 | $ | 200.7 | $ | 173.2 | |||||||||||||||
| Other revenue | 5.3 | 6.2 | 10.1 | 11.1 | |||||||||||||||||||
| Total Revenues | 105.6 | 95.8 | 210.8 | 184.3 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Maintenance expense | 19.2 | 18.9 | 38.3 | 37.4 | |||||||||||||||||||
| Depreciation expense | 27.9 | 21.7 | 55.7 | 41.8 | |||||||||||||||||||
| Other operating expense | 4.9 | 4.9 | 10.2 | 9.5 | |||||||||||||||||||
| Total Expenses | 52.0 | 45.5 | 104.2 | 88.7 | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||
| Net gain on asset dispositions | 2.0 | 1.4 | 3.1 | 2.7 | |||||||||||||||||||
| Interest expense, net | (23.9) | (20.0) | (48.9) | (39.1) | |||||||||||||||||||
| Other (expense) income | (0.1) | 0.5 | 2.4 | (1.3) | |||||||||||||||||||
| Segment Profit | $ | 31.6 | $ | 32.2 | $ | 63.2 | $ | 57.9 | |||||||||||||||
| Investment Volume | $ | 45.6 | $ | 81.1 | $ | 93.0 | $ | 143.8 | |||||||||||||||
GRE Fleet Data
The following table shows fleet activity and statistics for GRE railcars for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 30,223 | 30,492 | 30,572 | 36,484 | 36,651 | ||||||||||||||||||||||||
| Railcars added | 579 | 328 | 6,145 | 355 | 229 | ||||||||||||||||||||||||
| Railcars scrapped or sold | (310) | (248) | (233) | (188) | (162) | ||||||||||||||||||||||||
| Ending balance | 30,492 | 30,572 | 36,484 | 36,651 | 36,718 | ||||||||||||||||||||||||
| Utilization rate at quarter end (1) | 93.3 | % | 93.7 | % | 94.7 | % | 94.7 | % | 95.3 | % | |||||||||||||||||||
| Active railcars at quarter end (2) | 28,460 | 28,654 | 34,536 | 34,706 | 34,977 | ||||||||||||||||||||||||
| Average active railcars (3) | 28,572 | 28,592 | 32,671 | 34,588 | 34,868 | ||||||||||||||||||||||||
_________
(1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
(2) Active railcars refers to the number of railcars on lease to customers. Changes in railcars on lease compared to prior quarters are impacted by the utilization of newly built railcars, railcars purchased in the secondary market, and the disposition of railcars that were sold or scrapped, as well as the fleet utilization rate.
(3) Average active railcars for the quarter is calculated using the number of active railcars at the end of each month.
As of June 30, 2026, leases for 7,179 railcars are scheduled to expire over the remainder of 2026. This amount excludes railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.
Rail India Fleet Data
The following table shows fleet activity and statistics for Rail India railcars for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 10,895 | 11,112 | 11,712 | 12,165 | 12,508 | ||||||||||||||||||||||||
| Railcars added | 217 | 600 | 453 | 343 | 343 | ||||||||||||||||||||||||
| Ending balance | 11,112 | 11,712 | 12,165 | 12,508 | 12,851 | ||||||||||||||||||||||||
| Utilization rate at quarter end (1) | 99.6 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Active railcars at quarter end (2) | 11,066 | 11,712 | 12,165 | 12,508 | 12,851 | ||||||||||||||||||||||||
| Average active railcars (3) | 10,945 | 11,363 | 11,905 | 12,275 | 12,692 | ||||||||||||||||||||||||
_________
(1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
(2) Active railcars refers to the number of railcars on lease to customers. Changes in railcars on lease compared to prior quarters are impacted by the utilization of newly built railcars and the disposition of railcars that were sold or scrapped, as well as the fleet utilization rate.
(3) Average active railcars for the quarter is calculated using the number of active railcars at the end of each month.
Comparison of Reported Results for the First Six Months of 2026 to the First Six Months of 2025
Foreign Currency
Rail International's reported results of operations are impacted by fluctuations in the exchange rates of the U.S. dollar against the foreign currencies in which it conducts business, primarily the euro. In the six months ended June 30, 2026, fluctuations in the value of the euro, relative to the U.S. dollar, positively impacted lease revenue by approximately $10.7 million and positively impacted segment profit, excluding other (expense) income, by approximately $5.5 million compared to the same period in 2025.
Segment Profit
In the six months ended June 30, 2026, segment profit of $63.2 million increased 9.2% compared to $57.9 million for the same period in the prior year. The increase was primarily due to higher lease revenue and changes in foreign currency exchange rates, partially offset by higher depreciation and interest expense.
Revenues
In the six months ended June 30, 2026, lease revenue increased $27.5 million, or 15.9%, due to more railcars on lease at GRE and Rail India and the impact of foreign exchange rates.
Expenses
In the six months ended June 30, 2026, maintenance expense increased $0.9 million, primarily due to the impact of foreign exchange rates and higher repair costs, partially offset by fewer regulatory compliance events. Depreciation expense increased $13.9 million, due to the impact of new railcars added to the fleet, including the railcars acquired from DB Cargo AG primarily in 2025.
Other Income (Expense)
In the six months ended June 30, 2026, net interest expense increased $9.8 million, due to a higher average debt balance and a higher average interest rate. Other (expense) income was favorable by $3.7 million, driven by the positive impact of changes in foreign exchange rates, primarily euro-zloty fluctuations, and lower litigation costs.
Investment Volume
During the six months ended June 30, 2026, investment volume was $93.0 million compared to $143.8 million in the same period in 2025. In the six months ended June 30, 2026, GRE acquired 538 newly built railcars and purchased 46 railcars in the secondary market compared to 1,025 newly built railcars for the same period in 2025, and Rail India acquired 686 newly built railcars compared to 529 newly built railcars for the same period in 2025.
Our investment volume is predominantly composed of acquired railcars, but also includes certain capitalized repairs and improvements to owned railcars. As a result, the dollar value of investment volume does not necessarily correspond to the number of railcars acquired in any given period. In addition, the comparability of amounts invested and the number of railcars acquired in each period is impacted by the mix of the various railcar types acquired, as well as fluctuations in the exchange rates of the foreign currencies in which Rail International conducts business.
Comparison of Reported Results for the Second Quarter of 2026 to the Second Quarter of 2025
Foreign Currency
Rail International's reported results of operations are impacted by fluctuations in the exchange rates of the U.S. dollar against the foreign currencies in which it conducts business, primarily the euro. In the three months ended June 30, 2026, fluctuations in the value of the euro, relative to the U.S. dollar, positively impacted lease revenue by approximately $2.1 million and positively impacted segment profit, excluding other (expense) income, by approximately $1.1 million compared to the same period in 2025.
Segment Profit
In the three months ended June 30, 2026, segment profit of $31.6 million decreased 1.9% compared to $32.2 million for the same period in the prior year. The decrease was primarily due to higher depreciation and interest expense, partially offset by higher lease revenue and changes in foreign currency exchange rates.
Revenues
In the three months ended June 30, 2026, lease revenue increased $10.7 million, or 11.9%, driven by more railcars on lease at GRE and Rail India, as well as the impact of foreign exchange rates.
Expenses
In the three months ended June 30, 2026, maintenance expense increased $0.3 million, primarily due to the impact of foreign exchange rates and higher repair costs, partially offset by fewer regulatory compliance events. Depreciation expense increased $6.2 million, due to the impact of new railcars added to the fleet, including the railcars acquired from DB Cargo AG primarily in 2025.
Other Income (Expense)
In the three months ended June 30, 2026, net interest expense increased $3.9 million, due to a higher average debt balance and a higher average interest rate. Other (expense) income was unfavorable by $0.6 million, driven by the negative impact of changes in foreign exchange rates, primarily euro-zloty fluctuations.
ENGINE LEASING
Segment Summary
Engine Leasing includes the RRPF affiliates, a group of 50% owned domestic and foreign joint ventures with Rolls-Royce plc (or affiliates thereof, collectively "Rolls-Royce"), a leading manufacturer of commercial aircraft jet engines. Segment profit included earnings from the RRPF affiliates of $49.6 million and $77.2 million for the three and six months ended June 30, 2026, compared to $22.6 million and $56.0 million and for the same periods in 2025. Dividend distributions from the RRPF affiliates totaled $70.0 million for each of the three and six months ended June 30, 2026 compared to none for the same periods in 2025.
Engine Leasing also includes GATX Engine Leasing ("GEL"), our wholly owned business that invests directly in aircraft spare engines. As of June 30, 2026, GEL owned 46 aircraft spare engines, with 21 currently on, or available for, long-term leases with airline customers and 25 that are employed in an engine capacity agreement with Rolls-Royce for use in its engine maintenance programs. All engines owned by GEL are managed by the RRPF affiliates, for which we paid them a fee of $1.5 million and $3.0 million for the three and six months ended June 30, 2026 and $1.3 million and $2.7 million for the same periods in 2025.
The operating environment for the RRPF affiliates and GEL continued to be favorable in the second quarter of 2026. Demand for air travel and spare engines continues to be high. However, uncertainty exists due to the geopolitical environment in the Middle East.
The following table shows Engine Leasing's segment results (in millions):
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Lease revenue | $ | 8.8 | $ | 8.1 | $ | 18.3 | $ | 16.2 | |||||||||||||||
| Non-dedicated engine revenue | 20.6 | 20.5 | 42.7 | 42.0 | |||||||||||||||||||
| Total Revenues | 29.4 | 28.6 | 61.0 | 58.2 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Depreciation expense | 10.6 | 9.5 | 21.2 | 18.9 | |||||||||||||||||||
| Other operating expense | 3.0 | 2.9 | 6.1 | 5.7 | |||||||||||||||||||
| Total Expenses | 13.6 | 12.4 | 27.3 | 24.6 | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||
| Interest expense, net | (12.7) | (11.6) | (26.0) | (23.8) | |||||||||||||||||||
| Other income | 13.7 | 0.1 | 16.8 | 0.1 | |||||||||||||||||||
| Share of affiliates' pre-tax earnings | 49.6 | 22.6 | 77.2 | 56.0 | |||||||||||||||||||
| Segment Profit | $ | 66.4 | $ | 27.3 | $ | 101.7 | $ | 65.9 | |||||||||||||||
| Investment Volume | $ | - | $ | - | $ | 0.2 | $ | - | |||||||||||||||
The following table shows the net book values of Engine Leasing's assets (in millions):
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Investment in RRPF Affiliates | $ | 706.3 | $ | 746.1 | $ | 732.3 | $ | 752.4 | $ | 721.7 | |||||||||||||||||||
| GEL owned aircraft spare engines | 918.1 | 1,054.9 | 1,044.4 | 1,033.9 | 1,023.3 | ||||||||||||||||||||||||
| Other owned assets | 33.9 | 47.2 | 54.9 | 50.3 | 126.1 | ||||||||||||||||||||||||
| Total assets | $ | 1,658.3 | $ | 1,848.2 | $ | 1,831.6 | $ | 1,836.6 | $ | 1,871.1 | |||||||||||||||||||
RRPF Affiliates' Portfolio Data
The following table shows portfolio activity and statistics for the RRPF affiliates' aircraft spare engines for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 436 | 442 | 453 | 456 | 460 | ||||||||||||||||||||||||
| Engine acquisitions | 20 | 14 | 14 | 10 | 13 | ||||||||||||||||||||||||
| Engine dispositions | (14) | (3) | (11) | (6) | (5) | ||||||||||||||||||||||||
| Ending balance | 442 | 453 | 456 | 460 | 468 | ||||||||||||||||||||||||
| Utilization rate at quarter end (1) | 98.4 | % | 98.5 | % | 98.7 | % | 97.6 | % | 97.2 | % | |||||||||||||||||||
| Average leased engines (2) | 430 | 442 | 447 | 450 | 449 | ||||||||||||||||||||||||
| Net book value of engines (in millions) | $ | 5,446.5 | $ | 5,638.2 | $ | 5,829.9 | $ | 5,863.8 | $ | 6,160.6 | |||||||||||||||||||
_________
(1) Utilization is calculated as the number of engines on lease as a percentage of total engines in the fleet.
(2) Average leased engines for the quarter is calculated using the number of leased engines at the end of each month.
GEL Portfolio Data
The following table shows portfolio activity for GEL's aircraft spare engines for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Beginning balance | 39 | 39 | 46 | 46 | 46 | ||||||||||||||||||||||||
| Engines added | - | 7 | - | - | - | ||||||||||||||||||||||||
| Ending balance | 39 | 46 | 46 | 46 | 46 | ||||||||||||||||||||||||
Comparison of Reported Results for the First Six Months of 2026 to the First Six Months of 2025
Segment Profit
In the six months ended June 30, 2026, segment profit of $101.7 million increased $35.8 million compared to segment profit of $65.9 million for the same period in the prior year. The increase was driven by higher earnings at the RRPF affiliates and GEL.
Revenues
In the six months ended June 30, 2026, lease revenue increased $2.1 million, driven by more aircraft spare engines on leases directly with airline customers. Non-dedicated engine revenue increased $0.7 million, due to higher annuity receipts for aircraft spare engines utilized in the engine capacity agreement with Rolls-Royce.
Expenses
In the six months ended June 30, 2026, depreciation expense increased $2.3 million, due to aircraft spare engines acquired in 2025.
Other Income (Expense)
In the six months ended June 30, 2026, other income increased $16.7 million, driven by maintenance reserve releases on certain engines at GEL. Income from our share of affiliates' earnings increased $21.2 million, driven by higher income from operations and higher remarketing income. Higher income from operations was primarily due to more aircraft spare engines in the fleet, partially offset by higher interest expense. The amount and timing of remarketing income is dependent on a number of factors and may vary materially from period to period.
Investment Volume
In the six months ended June 30, 2026, investment volume was $0.2 million, compared to zero in the same period in 2025. Investment volume in 2026 consisted of the purchase of engine stands at GEL.
Comparison of Reported Results for the Second Quarter of 2026 to the Second Quarter of 2025
Segment Profit
In the three months ended June 30, 2026, segment profit of $66.4 million increased $39.1 million compared to segment profit of $27.3 million for the same period in the prior year. The increase was driven by higher earnings at the RRPF affiliates and GEL.
Revenues
In the three months ended June 30, 2026, lease revenue increased $0.7 million, driven by more aircraft spare engines on leases directly with airline customers. Non-dedicated engine revenue increased $0.1 million, due to higher annuity receipts for aircraft spare engines utilized in the engine capacity agreement with Rolls-Royce.
Expenses
In the three months ended June 30, 2026, depreciation expense increased $1.1 million, due to aircraft spare engines acquired in 2025.
Other Income (Expense)
In the three months ended June 30, 2026, other income increased $13.6 million, driven by maintenance reserve releases on certain engines at GEL. Income from our share of affiliates' earnings increased $27.0 million, driven by higher remarketing income and higher income from operations. Higher income from operations was primarily due to more aircraft spare engines in the fleet. The amount and timing of remarketing income is dependent on a number of factors and may vary materially from period to period.
OTHER
Other comprises our Trifleet business, as well as selling, general, and administrative expenses ("SG&A"), unallocated interest expense, miscellaneous income and expense not directly associated with the reporting segments, and certain eliminations.
The following table shows components of Other (in millions):
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Trifleet revenue | $ | 10.1 | $ | 10.4 | $ | 20.3 | $ | 20.6 | |||||||||||||||
| Trifleet segment profit | $ | 2.1 | $ | 1.5 | $ | 4.4 | $ | 3.6 | |||||||||||||||
| Unallocated interest (expense) income | (0.4) | 2.0 | 3.3 | 5.3 | |||||||||||||||||||
| Other income, including eliminations | 0.4 | 1.6 | 2.0 | 3.2 | |||||||||||||||||||
| Segment Profit | $ | 2.1 | $ | 5.1 | $ | 9.7 | $ | 12.1 | |||||||||||||||
| Selling, general and administrative expense | $ | 69.2 | $ | 58.2 | $ | 140.5 | $ | 114.8 | |||||||||||||||
| Investment Volume | $ | 7.8 | $ | 5.7 | $ | 16.0 | $ | 11.6 | |||||||||||||||
Trifleet Summary
The tank container leasing market remained challenging in the second quarter of 2026 due to macro-economic headwinds and the impact of the current geopolitical environment in the Middle East. Utilization was 88.0% at the end of the current quarter.
Trifleet Tank Container Data
The following table shows fleet statistics for Trifleet's owned and managed tank containers for the quarter ended:
|
June 30 2025 |
September 30 2025 |
December 31 2025 |
March 31 2026 |
June 30 2026 |
|||||||||||||||||||||||||
| Ending balance | 25,323 | 25,573 | 25,602 | 26,017 | 26,417 | ||||||||||||||||||||||||
| Utilization rate at quarter-end (1) | 84.7 | % | 83.9 | % | 84.9 | % | 85.2 | % | 88.0 | % | |||||||||||||||||||
(1) Utilization is calculated as the number of tank containers on lease as a percentage of total tank containers in the fleet.
SG&A, Unallocated Interest and Other
SG&A increased $25.7 million for the six months ended June 30, 2026 compared to the same period in the prior year. SG&A increased by $11.0 million for the three months ended June 30, 2026 compared to the same period in the prior year. Both variances were primarily due to higher employee-related expenses, including the impact of higher headcount resulting from the Wells Fargo rail assets acquisition, and higher information technology expenses.
Unallocated interest (expense) income (the difference between external interest expense and interest expense allocated to the reporting segments) in any year is affected by our consolidated leverage position, the timing of debt issuances and investing activities, and intercompany allocations.
Other income, including eliminations was unfavorable by $1.2 million for both the three and six months ended June 30, 2026 compared to the same periods in the prior year. Both variances were driven by higher non-service pension-related expenses and the impact of foreign exchange rates on a foreign pension plan.
Consolidated Income Taxes
See "Note 11. Income Taxes" in Part I, Item 1 of this Quarterly Report on Form 10-Q.
CASH FLOW DISCUSSION
We generate a significant amount of cash from operating activities and investment portfolio proceeds. We also access domestic and international capital markets by issuing debt. We use these resources, along with available cash balances, to fulfill our debt, lease, and dividend obligations, to support our share repurchase programs, and to fund portfolio investments and capital additions. We primarily use cash from operations to fund daily operations. The timing of asset dispositions and changes in working capital impact cash flows from portfolio proceeds and operations. As a result, these cash flow components may vary materially from quarter to quarter and year to year.
As of June 30, 2026, we had an unrestricted cash balance of $747.1 million. We also have a $632 million, 5-year unsecured revolving credit facility in the United States that matures in 2031 and a $368 million, 3-year unsecured revolving credit facility in the United States that matures in 2029, both of which were fully available as of June 30, 2026. In addition, we have a €250 million, 3-year unsecured revolving credit facility in Europe that matures in 2027, of which €212 million was available as of June 30, 2026. At GABX, we have a $250 million 5-year unsecured revolving credit facility in the United States that matures in 2030, all of which was fully available as of June 30, 2026.
The following table shows our cash flows from operating, investing, and financing activities for the six months ended June 30 (in millions):
| 2026 | 2025 | ||||||||||
|
Net cash provided by operating activities
|
$ | 475.3 | $ | 285.5 | |||||||
|
Net cash used in investing activities
|
(4,313.2) | (365.0) | |||||||||
|
Net cash (used in) provided by financing activities
|
(396.2) | 425.6 | |||||||||
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
(3.6) | 7.3 | |||||||||
|
Net (decrease) increase in cash, cash equivalents, and restricted cash during the period
|
$ | (4,237.7) | $ | 353.4 | |||||||
Net Cash Provided by Operating Activities
Net cash provided by operating activities for the six months ended June 30, 2026 increased $189.8 million compared to the same period in 2025. Comparability among reporting periods is impacted by the timing of changes in working capital items. Specifically, higher cash receipts from revenue and lower payments for operating leases were partially offset by higher payments for maintenance, interest, income taxes, and other operating expenses.
Net Cash Used in Investing Activities
The following table shows our principal sources and uses of cash flows from investing activities for the six months ended June 30 (in millions):
| 2026 | 2025 | ||||||||||
|
Portfolio investments and capital additions (1)
|
$ | (4,720.5) | $ | (515.3) | |||||||
|
Portfolio proceeds (2)
|
379.7 | 146.5 | |||||||||
| Proceeds from sales of other assets (3) | 29.1 | 17.4 | |||||||||
| Purchases of assets previously leased (4) | (3.8) | (15.0) | |||||||||
|
Other investing activity
|
2.3 | 1.4 | |||||||||
|
Net cash used in investing activities
|
$ | (4,313.2) | $ | (365.0) | |||||||
_________
(1) Portfolio investments and capital additions primarily consist of purchases of operating assets and capitalized asset improvements. See the discussions of segment operating results sections in this Item for more detail.
(2) Portfolio proceeds primarily consist of proceeds from sales of operating assets.
(3) Proceeds from sales of other assets were primarily related to railcar scrapping.
(4) In 2026, we purchased 187 railcars that were previously on operating leases, compared to 802 railcars in 2025.
The increase in portfolio investments and capital additions of $4,205.2 million for the six months ended June 30, 2026 was primarily due to the acquisition of railcars and locomotives from Wells Fargo and the cost of other railcars acquired at Rail North America and Rail India, partially offset by fewer railcars acquired at GRE. The timing of investments depends on purchase commitments, transaction opportunities, and market conditions.
Portfolio proceeds increased by $233.2 million for the six months ended June 30, 2026, primarily due to more railcars sold at Rail North America.
Net Cash Provided by Financing Activities
The following table shows our principal sources and uses of cash flows provided by financing activities for the six months ended June 30 (in millions):
| 2026 | 2025 | ||||||||||
|
Net proceeds from issuance of debt with original maturities longer than 90 days
|
$ | 994.0 | $ | 879.8 | |||||||
| Repayments of debt with original maturities longer than 90 days | (1,149.8) | (406.6) | |||||||||
|
Net decrease in debt with original maturities of 90 days or less
|
(25.7) | (0.2) | |||||||||
| Share repurchases (1) | (48.3) | (17.1) | |||||||||
| Dividends to GATX Shareholders | (49.0) | (45.7) | |||||||||
| Distributions to non-controlling interest | (49.9) | - | |||||||||
| Exercise of GABX call option | (66.2) | - | |||||||||
| Other | (1.3) | 15.4 | |||||||||
|
Net cash (used in) provided by financing activities
|
$ | (396.2) | $ | 425.6 | |||||||
_________
(1) Cash paid for share repurchases consists of those transactions that settled during the period and includes excise taxes and commissions.
The following table shows the activity on our long-term debt principal in the six months ended June 30, 2026 (in millions):
|
December 31 2025 |
Issuances | Payments | Impact of Foreign Exchange Rates |
June 30 2026 |
|||||||||||||||||||||||||
| U.S. debt (1) | $ | 10,984.0 | $ | 1,000.0 | $ | (1,127.9) | $ | - | $ | 10,856.1 | |||||||||||||||||||
| Europe debt (2) | 1,383.6 | - | - | (38.1) | 1,345.5 | ||||||||||||||||||||||||
| India debt (3) | 138.0 | 21.2 | (10.9) | (7.0) | 141.3 | ||||||||||||||||||||||||
|
Total debt principal
|
$ | 12,505.6 | $ | 1,021.2 | $ | (1,138.8) | $ | (45.1) | $ | 12,342.9 | |||||||||||||||||||
__________
(1) Issuances include $1,000.0 million at GABX. The cash proceeds were used for partial prepayment of the outstanding GABX term loan.
(2) Denominated in euros, but presented in U.S. dollars in this table.
(3) Denominated in Indian rupees, but presented in U.S. dollars in this table.
The following provides detail of the long-term debt issued in the six months ended June 30, 2026:
U.S. debt
•$500.0 million of 5-year unsecured 4.63% fixed rate debt at GABX, which is guaranteed by GATX Corporation.
•$500.0 million of 10-year unsecured 5.30% fixed rate debt at GABX, which is guaranteed by GATX Corporation.
India debt
•INR 2.0 billion ($21.2 million) from a delayed draw term loan at a fixed rate of 8.70%.
LIQUIDITY AND CAPITAL RESOURCES
General
We fund our investments and meet our debt, lease, and dividend obligations using our available cash balances, as well as cash generated from operating activities, sales of assets, distributions from affiliates, issuances of debt, commercial paper issuances, and committed revolving credit facilities. We primarily use cash from operations to fund daily operations. We use both domestic and international capital markets and banks to meet our debt financing needs.
Material Cash Obligations
The following table shows our material cash obligations, including debt principal and related interest payments, lease payments, and purchase commitments at June 30, 2026 (in millions):
| Material Cash Obligations by Period | |||||||||||||||||||||||||||||||||||||||||
| Total | 2026 (1) | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||||||||||||||||||||||
|
Recourse debt (2)
|
$ | 12,342.9 | $ | 633.8 | $ | 848.1 | $ | 819.4 | $ | 850.0 | $ | 2,576.4 | $ | 6,615.2 | |||||||||||||||||||||||||||
|
Interest on recourse debt (3)
|
4,934.9 | 294.2 | 542.1 | 511.1 | 463.6 | 434.7 | 2,689.2 | ||||||||||||||||||||||||||||||||||
|
Borrowings under bank credit facilities
|
44.0 | 44.0 | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
|
Operating lease obligations
|
160.0 | 17.3 | 33.4 | 29.9 | 21.1 | 21.1 | 37.2 | ||||||||||||||||||||||||||||||||||
|
Purchase commitments (4)
|
1,354.0 | 368.0 | 467.3 | 441.0 | 76.5 | 1.2 | - | ||||||||||||||||||||||||||||||||||
|
Total
|
$ | 18,835.8 | $ | 1,357.3 | $ | 1,890.9 | $ | 1,801.4 | $ | 1,411.2 | $ | 3,033.4 | $ | 9,341.6 | |||||||||||||||||||||||||||
_________
(1) For the remainder of the year.
(2) Includes GABX obligations of $1,881.1 million in 2030, $500.0 million in 2031, and $500.0 million in 2036 that are guaranteed by GATX Corporation.
(3) For floating rate debt, future interest payments are based on the applicable interest rate as of June 30, 2026.
(4) Primarily railcar purchase commitments. The amounts shown for all years are based on management's estimates of the timing, anticipated railcar types, and related costs of railcars to be purchased under its agreements. For additional details on our purchase agreements, refer to the discussion of Rail North America operating results within this Item.
Short-Term Borrowings and Credit Lines and Facilities
We use short-term borrowings as a source of working capital and to temporarily fund differences between our operating cash flows and portfolio proceeds, and our capital investments and debt maturities. We do not maintain or target any particular level of short-term borrowings on a permanent basis. Rather, we will temporarily utilize short-term borrowings at levels we deem appropriate until we decide to pay down these balances.
We have a $632 million 5-year unsecured revolving credit facility in the United States. In the second quarter of 2026, we entered into an amendment to extend the maturity from May 2030 to May 2031. As of June 30, 2026, the full $632 million was available under this facility. Additionally, we have a $368 million 3-year unsecured revolving credit facility in the United States. In the second quarter of 2026, we entered into an amendment to extend the maturity from May 2028 to May 2029. As of June 30, 2026, the full $368 million was available under this facility.
GABX has a $250 million 5-year unsecured revolving credit facility in the United States that matures in 2030. As of June 30, 2026, the full $250 million was available under this facility.
In Europe, we have a €250 million, 3-year unsecured revolving credit facility that matures in December 2027. As of June 30, 2026, €212 million was available under this credit facility. In addition, our European subsidiaries have smaller unsecured credit facilities with an aggregate limit of €25.0 million. As of June 30, 2026, €24.5 million was available under these credit facilities, as €0.5 million ($0.6 million) was drawn. The weighted average interest rate of these outstanding borrowings during the six months ended June 30, 2026 was 3.0%.
Restrictive Covenants
Our $632 million and $368 million revolving credit facilities in the United States, and our €250 million revolving credit facility in Europe, contain various restrictive covenants, including requirements to maintain a fixed charge coverage ratio and an asset coverage test. Some of our bank term loans and other loan agreements have the same financial covenants as these facilities.
The indentures for our public debt also contain various restrictive covenants, including limitations on liens provisions that restrict the amount of additional secured indebtedness that we may incur. Certain exceptions to the covenants permit us to incur an unlimited amount of purchase money and nonrecourse indebtedness.
The GABX term loan and $250 million revolving credit facility contain various restrictive covenants, including a requirement to maintain an asset coverage ratio.
At June 30, 2026, our European rail subsidiaries had outstanding term loans, public debt, and private placement debt balances totaling €1,065.0 million, and Trifleet had an outstanding term loan of €113.0 million. The loans are guaranteed by GATX Corporation and are subject to similar restrictive covenants as the GATX and GRE revolving credit facilities noted above. In addition, Rail India had outstanding term loans of INR 13.4 billion ($141.3 million) that are subject to certain restrictive covenants.
At June 30, 2026, we were in compliance with all covenants and conditions of all of our credit agreements, indentures, and loans. We do not anticipate any covenant violations nor do we expect that any of these covenants will restrict our operations or our ability to obtain additional financing.
Credit Ratings
The global capital market environment and outlook may affect our funding options and our financial performance. Our access to capital markets at competitive rates depends on our credit rating and rating outlook, as determined by rating agencies.
The following table shows our credit rating and rating outlook as of June 30, 2026:
| Rating Agency | |||||||||||||||||
| Standard & Poor's | Moody's Investor Service | Fitch Ratings, Inc | |||||||||||||||
| Long-term unsecured debt | BBB | Baa1 | BBB+ | ||||||||||||||
| Short-term unsecured debt | A-2 | P-2 | F2 | ||||||||||||||
| Rating outlook | Stable | Stable | Stable | ||||||||||||||
Leverage
Leverage is expressed as a ratio of debt (including debt and lease obligations, net of unrestricted cash) to equity. The following table shows the components of recourse leverage (in millions, except recourse leverage ratio):
|
June 30 2026 |
March 31 2026 |
December 31 2025 |
September 30 2025 |
June 30 2025 |
|||||||||||||||||||||||||
| Debt and lease obligations, net of unrestricted cash: | |||||||||||||||||||||||||||||
| Unrestricted cash | $ | (747.1) | $ | (740.9) | $ | (743.0) | $ | (696.1) | $ | (754.6) | |||||||||||||||||||
| Borrowings under bank credit facilities | 44.0 | 49.7 | 82.2 | 117.3 | 106.1 | ||||||||||||||||||||||||
|
Recourse debt
|
12,289.3 | 12,427.3 | 12,451.7 | 8,751.3 | 8,741.3 | ||||||||||||||||||||||||
|
Operating lease obligations
|
143.8 | 150.9 | 154.3 | 160.7 | 168.4 | ||||||||||||||||||||||||
| Total debt and lease obligations, net of unrestricted cash | $ | 11,730.0 | $ | 11,887.0 | $ | 11,945.2 | $ | 8,333.2 | $ | 8,261.2 | |||||||||||||||||||
| Total recourse debt (1) | $ | 11,730.0 | $ | 11,887.0 | $ | 11,945.2 | $ | 8,333.2 | $ | 8,261.2 | |||||||||||||||||||
| Total equity | $ | 3,589.9 | $ | 3,656.2 | $ | 3,635.1 | $ | 2,718.9 | $ | 2,669.7 | |||||||||||||||||||
| Recourse leverage (2) | 3.3 | 3.3 | 3.3 | 3.1 | 3.1 | ||||||||||||||||||||||||
_________
(1) Includes recourse debt, borrowings under bank credit facilities, and operating lease obligations, net of unrestricted cash.
(2) Calculated as total recourse debt / total equity.
GATX Common Share Repurchases
On January 25, 2019, our Board of Directors approved a $300.0 million share repurchase program (the "Prior Repurchase Program"), pursuant to which we were authorized to purchase shares of our common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to Rule 10b5-1 plans. On February 18, 2026, the Board terminated the Prior Repurchase Program and approved a new $300.0 million share repurchase program (the "New Repurchase Program"), pursuant to which we are authorized to purchase shares of our common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to Rule 10b5-1 plans. The New Repurchase Program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The timing of share repurchases will be dependent on market conditions and other factors.
During the six months ended June 30, 2026, we repurchased 290,124 shares of common stock for $51.1 million, excluding commissions, under the New Repurchase Program compared to 115,937 shares of common stock for $17.1 million during the same period in 2025 under the Prior Repurchase Program. As of June 30, 2026, $248.9 million remained available under the New Repurchase Program authorization.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no changes to our critical accounting policies during the six months ended June 30, 2026. Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for a summary of our policies.
NON-GAAP FINANCIAL MEASURES
In addition to financial results reported in accordance with GAAP, we compute certain financial measures using non-GAAP components, as defined by the SEC. These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies. We have provided a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures.
Reconciliation of Non-GAAP Components Used in the Computation of Certain Financial Measures
We exclude the effects of certain tax adjustments and other items for purposes of presenting net income attributable to GATX, diluted earnings per share, and return on equity attributable to GATX because we believe these items are not attributable to our business operations. Management utilizes net income attributable to GATX, excluding tax adjustments and other items, when analyzing financial performance because such amounts reflect the underlying operating results that are within management's ability to influence. Accordingly, we believe presenting this information provides investors and other users of our financial statements with meaningful supplemental information for purposes of analyzing year-to-year financial performance on a comparable basis and assessing trends.
There were no tax adjustments and other items impacting net income attributable to GATX or diluted earnings per share during the first six months of 2026 or 2025. However, we did have tax adjustments and other items impacting net income attributable to GATX in other periods used in the calculation of the applicable measures for the trailing 12 months ended June 30, 2026 and 2025.
The following tables show our net income and return on equity, excluding tax adjustments and other items, for the trailing 12 months ended June 30 (in millions):
| 2026 | 2025 | ||||||||||
| Net income (GAAP) | $ | 369.3 | $ | 319.6 | |||||||
| Less: Net income attributable to non-controlling interest | 1.2 | - | |||||||||
| Net income attributable to GATX | $ | 368.1 | $ | 319.6 | |||||||
| Adjustments to pre-tax income attributable to GATX: | |||||||||||
| Acquisition-related expenses (1) | $ | 6.5 | $ | - | |||||||
| Litigation claims settlements (2) | - | 3.3 | |||||||||
| Total adjustments to pre-tax income attributable to GATX | $ | 6.5 | $ | 3.3 | |||||||
| Income taxes thereon, based on applicable effective tax rate | $ | (1.6) | $ | (0.8) | |||||||
| Other income tax adjustments to income attributable to GATX: | |||||||||||
| Income tax rate changes (3) | $ | (13.3) | $ | (6.0) | |||||||
| Net operating loss valuation allowance adjustment (4) | 6.4 | - | |||||||||
| Total other income tax adjustments to income attributable to GATX | $ | (6.9) | $ | (6.0) | |||||||
| Adjustments attributable to affiliates' earnings, net of taxes: | |||||||||||
| Insurance proceeds (5) | $ | (11.5) | $ | - | |||||||
| Total adjustments attributable to affiliates' earnings, net of taxes | $ | (11.5) | $ | - | |||||||
| Net income attributable to GATX, excluding tax adjustments and other items (non-GAAP) | $ | 354.6 | $ | 316.1 | |||||||
(1) Expenses associated with the acquisition of Wells Fargo's rail assets.
(2) Expenses recorded for the settlements of litigation claims arising out of legacy business operations.
(3) Deferred income tax adjustment attributable to an enacted corporate income tax rate reduction in Germany in 2025 and deferred income tax adjustments attributable to state tax rate reductions in 2024.
(4) Valuation allowance adjustment associated with the realizability of state net operating losses in future tax years.
(5) Insurance recoveries related to aircraft spare engines at RRPF for which it had previously recorded impairment losses.
| 2026 | 2025 | ||||||||||
| Return on Equity attributable to GATX (GAAP) | 13.5 | % | 12.8 | % | |||||||
| Return on Equity attributable to GATX, excluding tax adjustments and other items (non-GAAP) | 13.0 | % | 12.6 | % | |||||||
GATX Corporation published this content on July 31, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 31, 2026 at 17:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]