GATX Corporation (GMT)’s Fourth Quarter 2014 Earnings Conference Call Transcript

Mike Baudendistel – Stifel
Great those were my question thanks.

Operator

And next we’ll move to Justin Long with Stephens.

Justin Long – Stephens
Thanks and Good morning guys. First question you guys have been pretty clear about the strategy of pushing term on tank cars. And just being in the later innings of that process, is there any way you could provide some more color on the magnitude on your tank car fleet that is coming up for renewal over the next, call it, three years?

Brian Kenney – Chairman, President and Chief Executive Officer
Well over the three year some of that will be determined really on what takes place there in 2015-2016. But our renewal level this year at 17,000 cars typically is a little bit more weighted towards tank. Actually, this year for the first time in a very long time we have more freight cars renewing than tank cars in 2015. That’s ideal and really by design what we’ve done over the course of the last few years. So, as we have extended term the number of tank cars this year and into 2016 will actually be less than freight. And as again I mentioned that’s a really good position to be in because the freight car market has been gathering generating strength throughout 2014 as the year progressed and we expect that to continue in 2015.

Robert C. Lyons – Executive Vice President and Chief Financial Officer
And I would add that having those tank cars come up in 15 that’s a good thing because a lot of those expiring vessels are still at lower rates and we expect strong pricing again in 15 on a variety of tank car types.

Justin Long – Stephens
And maybe to just follow up on that, once you have repriced those tank cars in 2015, I mean, if you look at your total take car book, will all of it at that point be repriced at the higher lease rates we have seen this cycle?

Robert C. Lyons – Executive Vice President and Chief Financial Officer
A significant part of that will has been over the last few years, yeah.

Justin Long – Stephens
Okay. Great. You know you are obviously an active participant in the secondary market for railcars. I was just curious, too, if you could comment on the recent activity and how it has trended. It seems like your approach to the market you know more recently has been more of a net seller. I’m just wondering. Is there potential for that dynamic to start flipping in the other direction or what are you seeing out there?