GATX Corporation (NYSE:GATX) Q4 2022 Earnings Call Transcript

Bob Lyons: Given the size of our fleet, Justin, that’s a pretty reasonable number on a quarterly basis in our annualized — just based on the eight cars that will be aging out of the fleet naturally, that’s about the right number.

Justin Bergner: Okay. And then just a couple of nuanced questions, what is the marketable security account on your balance sheet the $148.5 million — or the short-term investment number related to the $148.5 million?

Bob Lyons: Yes, Justin, those are treasury.

Justin Bergner: Okay. And on the tax rate you mentioned sort of a similar going forward in that 25%-ish range, so, nothing unusual there. Is there anything as it relates to your ability to I guess postpone cash taxes, it gets harder as it accelerated depreciation comes down?

Bob Lyons: Yes, Justin, we don’t anticipate anything materially changing as far as our cash taxes and our ability to utilize our investment.

Justin Bergner: Okay, great. And then lastly, just — you mentioned the break down the increase in expected segment profit in Portfolio Management between RRPS. And I guess, the non-JV part of the book can you just sort of clarify that? I think I missed that. And then, is this direct investment — are you seeing more opportunity there, or is this more of a one-off?

Tom Ellman: Yes. So, the direct investment originally was the engines that we purchased a couple of years ago. And then, we added to it this quarter with an additional $150 million of investment. And the combination of those two is what we are referring to with GATX equipment leasing, which is the wholly-owned aircraft engines.

Bob Lyons: And, Justin, we’ll continue to look for opportunities there as well to kind of methodically, systematically add to that portfolio. We like the asset a lot. It’s been a great return, managed by our joint venture partnership. Those are a very good fit for what GATX does well. So, with our partner managing, it’s a good equation. So, yes, we will continue to look for opportunities there.

Justin Bergner: Okay. You said two-thirds of the increase in Portfolio Management profit is likely to come from the JV and one-third outside the JV?

Bob Lyons: Correct.

Justin Bergner: Okay, got it. Thank you.

Bob Lyons: Thank you.

Operator: We have no further questions at this time. I’ll turn it over to Shari Hellerman for any closing comments.

Shari Hellerman: I’d like to thank everyone for their participation on the call this morning. Please contact me with any follow-up questions. Thank you.

Operator: This concludes today’s conference call. You may now disconnect. Thank you.