-- Fourth quarter 2000 diluted EPS of $.75 and full year diluted EPS of
$3.37
-- 12% increase in full year diluted EPS
-- 19% return on average common equity
CHICAGO, Jan. 23 /PRNewswire/ -- GATX Corporation (NYSE: GMT) today
announced record 2000 fourth quarter and full year results. Fourth quarter
consolidated net income totaled $37.0 million or $.75 per share on a diluted
basis compared to $31.8 million or $.64 per share on a diluted basis in the
prior year period.
Consolidated net income for the 2000 full year was $164.2 million or
$3.37 per share on a diluted basis compared to $151.3 million or $3.01 per
share on a diluted basis in the prior year period, representing a 12% increase
in consolidated earnings per share.
Income from continuing operations was $20.8 million or $.42 per share on a
diluted basis in the fourth quarter compared to $25.7 million or $.52 per
share on a diluted basis in the prior year period. Income from continuing
operations for the 2000 full year was $128.4 million or $2.63 per share on a
diluted basis compared to $126.3 million or $2.51 per share on a diluted basis
in the prior year period.
Ronald H. Zech, chairman, stated, "The record fourth quarter and full year
2000 results reflect continued outstanding performance at GATX Capital,
improvement throughout the year in operations at GATX Terminals, and gains
from the sale of GATX Logistics. However, GATX's results for the fourth
quarter and full year were tempered by increasing weakness at GATX Rail due to
a slowing market and higher maintenance costs incurred as a result of a
continuing labor dispute at our domestic service centers.
"GATX achieved a number of key objectives in 2000, a year in which we
undertook unprecedented strategic steps to transform the company and position
it for the future. We reached our long-term 12-15% EPS growth target despite
a difficult rail market and a slowing economy. We also began the process of
reallocating capital to our highest return businesses by selling GATX
Logistics in July and reaching agreement in November to sell substantially all
of our U.S. terminals and pipeline assets, representing the bulk of GATX
Terminals' operations. We achieved record investment volume at GATX Capital,
a reflection of strong demand across each of its markets. A number of new
joint ventures were formed, further expanding our unique partnership platform.
Importantly, we continued to strengthen our position as a global leader in our
rail business.
"As we enter 2001, it is clear that this year will be one of significant
transition for GATX as we close the sale of GATX Terminals, redeploy net sale
proceeds approaching $1.0 billion, and continue realigning the organization to
better reflect our focus as a specialized finance and leasing company. While
we remain confident in our ability to generate 12-15% EPS growth over the
long-term, three near-term issues make it unlikely that we can achieve this
target in 2001.
"The most significant issue is the weakness in the rail business. Due to
the downturn of the U.S. rail market in 2000, a surprisingly abrupt economic
slowdown, and an ongoing labor dispute at our domestic service centers, it is
unlikely that GATX Rail's financial performance will improve significantly in
the coming year. While GATX Rail's long-term competitive position will be
improved through a favorable resolution of this dispute, the uncertainty
surrounding the timing of this resolution will continue to dampen financial
results.
"In addition, GATX's 2001 financial results will be heavily influenced by
the timing of the sale of GATX Terminals, and redeployment of the sale
proceeds. While we have targeted a first quarter close on the sale of the
U.S. terminals and pipeline business to Kinder Morgan Energy Partners L.P.,
securing the required regulatory approvals will ultimately determine the
timing of the sale, thereby making it difficult to estimate the impact on 2001
financial results.
"Lastly, GATX experiences some of its most attractive investment
opportunities during periods of slower economic growth. Maximizing returns on
these opportunities requires that we maintain access to attractively priced
capital. While GATX's efficient access to capital has supported growth in our
business, lowering our funding costs would strengthen our competitive position
and performance. Thus, while a final determination on the use of proceeds
from the sale of GATX Terminals will occur upon closing, it is likely that
each alternative use will be implemented in a manner consistent with our
desire to enhance our credit standing. While a more aggressive use of
proceeds could increase short-term EPS growth, our focus will continue to be
on enhancing the long-term earnings power and value of the company."
Mr. Zech concluded, "In summary, 2000 was a year of strategic change and
achievement at GATX. By realigning the company, we are better positioned to
maximize the growth and return opportunities in our core markets. We enter
2001 focused on both remarkable opportunity and certain challenges; we will
address both with the same energy that led to our achievements in 2000. Our
confidence is underscored by continued strength at GATX Capital as it enters
2001 with record investment backlog in excess of $1.0 billion, a partnership
strategy that has resulted in a significant and growing income stream, and a
leading position, both domestically and internationally, in a rail market
which has very attractive long-term fundamentals. By utilizing our unique
asset knowledge, services, partnering skills, and structuring expertise, I am
confident that we will continue to drive attractive returns for our
shareholders."
FINANCIAL SERVICES
Financial Services, comprised principally of GATX Capital, reported net
income of $13.8 million in the fourth quarter of 2000 compared to
$12.5 million in the prior year period. For the full year 2000, Financial
Services' net income increased 18% to $83.9 million from $71.0 million in
1999. The strong performance in 2000 was driven by excellent results within
GATX Capital's air, technology, venture, and diversified markets.
GATX Capital's new investment volume totaled $508 million in the fourth
quarter of 2000, up sharply from $432 million in the prior year period. For
the full year 2000, investment volume was $1.5 billion compared to
$1.2 billion in 1999. Investment opportunities throughout the year were
particularly strong in the air, technology, and venture portfolios.
Asset remarketing income totaled $18 million in the fourth quarter of 2000
compared to $14 million in the prior year period. For the full year 2000,
asset remarketing income totaled $57 million compared to $76 million in 1999.
As expected, the timing of assets coming off lease, opportunities to renew
leases at attractive rates, and the composition of the investment portfolio
all contributed to the year-over-year comparison in remarketing income.
Warrant income from GATX Capital's venture business totaled $18 million in
the fourth quarter of 2000 compared to negligible warrant income in the prior
year period. For the full year 2000, warrant income was very strong at
$52 million compared to $15 million in 1999. Over the past 15 years GATX
Capital has prudently built a diversified portfolio of leases and loans to
emerging companies, many of which contributed to the 2000 warrant income.
GATX Capital enters 2001 with unrealized warrant gains totaling $46 million, a
healthy position given the sizeable gains realized in 2000 and the volatile
equity markets experienced during much of the year. Unrealized gains at the
end of 1999 were $58 million.
Pre-tax spread totaled $34 million in the fourth quarter of 2000 compared
to $37 million in the prior year period. The slight year-over-year decline
was primarily the result of higher financing costs experienced during the
latter half of 2000. For the full year 2000, pre-tax spread increased to
$149 million from $132 million in 1999. As a percentage of average net
investments, pre-tax spread returned to a more normalized 4.7% in 2000
following an abnormally high 5.5% achieved in 1999. The 1999 level was driven
by the occurrence of favorable events within new and existing joint ventures
that led to a sharp increase in equity income and pre-tax spread relative to
total investment.
Throughout the course of 2000, GATX Capital increased its loss provision
in order to maintain an appropriate allowance position. For the full year
2000, net charge-offs totaled $37 million or 1.1% of net investments, compared
to $34 million or 1.3% of net investments in 1999. GATX Capital's allowance
for losses was 2.5% of net investments at the end of 2000 compared to 4.0% at
the end of 1999.
GATX RAIL
GATX Rail reported net income of $13.4 million in the fourth quarter of
2000 compared to $17.9 million in the prior year period. In addition to
overall weak market conditions, the fourth quarter results in 2000 reflect the
negative impact of the labor situation at GATX Rail's domestic service
centers. For the full year 2000, GATX Rail reported net income of
$65.7 million compared to $72.9 million in 1999.
GATX Rail's fleet utilization was 93% at the end of 2000, comparable to
the third quarter 2000 level but down from 94% at the end of 1999. At
year-end 2000, GATX Rail's North American fleet totaled 91,600 cars compared
to 88,400 at year-end 1999. During the year, GATX Rail added 5,400 cars to
the fleet, comparable to 1999 additions but down significantly from the 6,600
cars added during a more robust period in 1998. The majority of GATX Rail's
car additions in 2000 occurred during the early part of the year, as market
conditions and growing economic uncertainty led GATX Rail to sharply curtail
new car orders and fleet acquisitions during the second half of the year.
GATX Rail is limiting new car order activity while focusing on maximizing
the efficiency and profitability of its existing fleet. This is challenging
given that the pricing environment on existing cars is soft and certain
customers, including those in the chemical industry, are experiencing weakness
in their respective end markets. GATX Rail will continue to manage its fleet
in the most economically prudent manner during this period by balancing lease
rate, term, and utilization.
DISCONTINUED OPERATIONS
Discontinued Operations encompasses GATX's supply chain-related businesses
that have been targeted for sale or sold during the course of 2000. This
principally includes GATX Terminals Corporation and GATX Logistics, Inc.
Income from Discontinued Operations for the fourth quarter of 2000 was
$16.2 million, including a $3.7 million gain from the sale of GATX's remaining
equity interest in GATX Logistics, compared to $6.1 million in the prior year
period. For the full year 2000, income from Discontinued Operations was
$35.8 million, including gains totaling $8.4 million related to the sale of
GATX Logistics. The 1999 income from Discontinued Operations totaled
$25.0 million. GATX Terminals Corporation posted extremely strong results
during the 2000 fourth quarter and full year, as increased demand for storage
and distribution of chemical and petroleum product supported an increase in
GATX Terminal's capacity utilization and product throughput.
COMPANY DESCRIPTION
GATX Corporation (NYSE: GMT) is a unique finance and leasing company
combining asset knowledge and services, structuring expertise, creative
partnering and risk capital to serve customers and partners worldwide. GATX
primarily focuses on leasing assets that include railroad cars and
locomotives, jet commercial aircraft, and technology and marine assets.
TELECONFERENCE INFORMATION
GATX Corporation will host a teleconference to discuss fourth quarter and
full year results. Teleconference details are as follows:
Tuesday, January 23rd
3:00 PM Eastern Time
Call in details and real-time audio access are available at:
http://www.gatx.com . Please access the call 10 minutes prior to the start time.
Following the call, a replay will be available on the same site.
FORWARD LOOKING STATEMENTS
This press release includes statements which may constitute forward-
looking statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. This information may involve risks
and uncertainties that could cause actual results to differ materially from
the forward-looking statements. Although the company believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, such statements are subject to risks and uncertainties
including but not limited to general conditions, including demand and pricing
in its primary rail, air, technology, and diversified equipment leasing
markets, opportunities for asset resale within these markets, and stable labor
conditions within the company's rail service network. These factors and
others could cause actual results to differ materially from those projected.
Investor, corporate information and press releases may be found at
http://www.gatx.com . A variety of current financial information, historical
financial information, press releases and photographs are available at this
site. GATX press releases may be obtained by accessing PR Newswire's Company
News On-Call's automated fax service at 800-758-5804. The company
identification number for GATX is 105121.
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
2000 1999 2000 1999
GROSS INCOME
Lease, interest and
financing services $353.3 $295.7 $1,308.4 $1,132.5
Other income 5.5 (0.8) 3.4 62.5
REVENUES 358.8 294.9 1,311.8 1,195.0
Share of affiliates'
earnings 16.2 16.3 79.0 64.5
TOTAL GROSS INCOME 375.0 311.2 1,390.8 1,259.5
OWNERSHIP COSTS
Depreciation and
amortization 94.8 76.1 334.8 255.5
Interest 66.5 47.5 242.6 179.9
Operating lease expense 47.7 41.8 177.8 153.0
TOTAL OWNERSHIP COSTS 209.0 165.4 755.2 588.4
OTHER COSTS AND EXPENSES
Operating expenses 53.1 48.9 188.8 251.1
Selling, general and
administrative 62.7 50.1 210.1 199.9
Provision for possible losses 14.1 2.7 22.7 11.0
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 36.1 44.1 214.0 209.1
INCOME TAXES 15.3 18.4 85.6 82.8
INCOME FROM CONTINUING
OPERATIONS 20.8 25.7 128.4 126.3
DISCONTINUED OPERATIONS:
Operating results,
net of tax 12.5 6.1 27.4 25.0
Gain on sale of portion
of segment, net of tax 3.7 - 8.4 -
TOTAL DISCONTINUED OPERATIONS 16.2 6.1 35.8 25.0
NET INCOME $37.0 $31.8 $164.2 $151.3
PER COMMON SHARE
Basic net income per share
Income from continuing
operations $.43 $.53 $2.68 $ 2.56
Income from discontinued
operations .34 .12 .75 .51
Total $.77 $.65 $3.43 $ 3.07
Average number of common
shares (in thousands) 47,819 48,928 47,880 49,296
Diluted net income per share
Income from continuing
operations $.42 $.52 $2.63 $ 2.51
Income from discontinued
operations .33 .12 .74 .50
Total $.75 $.64 $3.37 $ 3.01
Average number of common
shares and common share
equivalents (in thousands) 49,097 49,796 48,753 50,301
Certain amounts in 1999 have been reclassified to conform to the current
presentation.
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions)
December 31 December 31
2000 1999
ASSETS
CASH AND CASH EQUIVALENTS $177.0 $84.5
RECEIVABLES
Trade accounts 94.9 80.8
Finance leases 878.3 645.7
Secured loans 634.1 358.0
Less - Allowance for possible losses (95.2) (113.5)
1,512.1 971.0
OPERATING LEASE ASSETS AND FACILITIES, NET 2,654.1 2,527.7
INVESTMENTS IN AFFILIATED COMPANIES 951.2 757.5
OTHER ASSETS 344.4 386.2
NET ASSETS OF DISCONTINUED OPERATIONS 630.9 702.3
$6,269.7 $5,429.2
LIABILITIES, DEFERRED ITEMS
AND SHAREHOLDERS' EQUITY
ACCOUNTS PAYABLE $317.3 $284.0
ACCRUED EXPENSES 47.7 41.7
DEBT
Short-term 557.2 377.0
Long-term:
Recourse 3,093.9 2,685.2
Nonrecourse 494.2 418.8
Capital lease obligations 164.2 176.2
4,309.5 3,657.2
DEFERRED ITEMS, INCLUDING INCOME TAXES 708.1 610.3
TOTAL SHAREHOLDERS' EQUITY 887.1 836.0
$ 6,269.7 $5,429.2
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
Twelve Months Ended
December 31
2000 1999
OPERATING ACTIVITIES
Net income from continuing operations $128.4 $126.3
Adjustments to reconcile net income
to net cash provided by operating activities:
Realized gains on remarketing of leased equipment (58.9) (72.6)
Provision for depreciation and amortization 334.8 255.5
Provision for possible losses 22.7 11.0
Deferred income taxes 86.2 53.0
Net change in trade receivables, inventories,
accounts payable and accrued expenses 6.9 15.3
Other (66.6) (100.7)
Net cash provided by continuing operations 453.5 287.8
INVESTING ACTIVITIES
Additions to operating lease assets and facilities (394.5) (366.4)
Additions to equipment on lease, net of nonrecourse
financing for leveraged leases (700.8) (697.0)
Secured loans extended (436.1) (268.8)
Investments in affiliated companies (244.4) (168.0)
Other investments and progress payments (152.6) (105.8)
Capital additions and portfolio investments (1,928.4) (1,606.0)
Portfolio proceeds 575.5 503.0
Proceeds from sale of GATX Logistics, Inc. 74.7 -
Proceeds from other asset sales 304.3 208.7
Net cash used in investing activities of
continuing operations (973.9) (894.3)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 1,587.4 981.5
Repayment of long-term debt (1,072.2) (351.6)
Net increase in short-term debt 180.2 95.6
Repayment of capital lease obligations (15.7) (16.3)
(Repurchase) of common stock and other (20.1) (27.3)
Cash dividends (57.4) (54.3)
Net cash provided by financing activities
of continuing operations 602.2 627.6
NET TRANSFERS FROM (TO) DISCONTINUED OPERATIONS 10.7 (19.6)
NET INCREASE IN CASH AND CASH EQUIVALENTS
FROM CONTINUING OPERATIONS 92.5 1.5
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS FROM DISCONTINUED OPERATIONS (5.5) 6.5
NET INCREASE IN CASH AND CASH EQUIVALENTS $87.0 $8.0
GATX CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY DATA (UNAUDITED)
(In Millions, Except Earnings Per Share Amounts)
Three Months Twelve Months
Ended Ended
December 31 December 31
2000 1999 2000 1999
GATX Corporation
Basic Net Income per Share
Income from Continuing Operations $.43 $.53 $ 2.68 $ 2.56
Income from Discontinued Operations .34 .12 .75 .51
Total $.77 $.65 $ 3.43 $ 3.07
Diluted Net Income per Share
Income from Continuing Operations $.42 $.52 $ 2.63 $ 2.51
Income from Discontinued Operations .33 .12 .74 .50
Total $.75 $.64 $ 3.37 $ 3.01
Revenues $358.8 $294.9 $1,311.8 $1,195.0
Share of Affiliates' Earnings 16.2 16.3 79.0 64.5
Gross Income $375.0 $311.2 $1,390.8 $1,259.5
Income from Continuing
Operations Before
Income Taxes 36.1 44.1 214.0 209.1
Income from Continuing Operations 20.8 25.7 128.4 126.3
Income from Discontinued Operations 16.2 6.1 35.8 25.0
Net Income $37.0 $31.8 $164.2 $151.3
Equity 887.1 836.0
Return on Average Equity 19.1% 19.3%
Finance Assets (a) $5,626.3 $4,782.7
Net Assets of Discontinued
Operations 630.9 702.3
Intersegment and Other Assets 12.5 (55.8)
Total Assets $6,269.7 $5,429.2
Return on Average Total Owned Assets 2.8% 3.0%
Return on Average Finance Assets (b) 2.9% 3.3%
GATX Rail
Revenues $143.0 $140.2 $572.0 $567.1
Share of Affiliates' Earnings .4 1.4 3.0 3.8
Gross Income 143.4 141.6 575.0 570.9
Depreciation and Amortization 26.0 26.2 100.5 100.1
Interest 11.3 13.1 52.8 52.6
Operating Lease Expense 35.2 29.6 131.9 110.4
Income Before Income Taxes 22.0 28.9 105.9 117.5
Net Income $13.4 $17.9 $ 65.7 $ 72.9
Assets $1,669.6 $1,693.8
Equity 359.7 327.5
Return on Average Equity 19.1% 23.3%
North American Fleet
Fleet Additions 400 1,300 5,400 5,400
Total Fleet 91,600 88,400 91,600 88,400
Utilization 93% 94% 93% 94%
GATX CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY DATA (UNAUDITED)
(In Millions, Except Earnings Per Share Amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
2000 1999 2000 1999
Financial Services
Revenues $210.3 $155.5 $736.4 $632.9
Share of Affiliates' Earnings 15.7 14.9 75.9 60.7
Gross Income 226.0 170.4 812.3 693.6
Depreciation and Amortization 67.9 48.8 230.5 151.9
Interest 53.0 33.4 182.6 122.4
Operating Lease Expense 12.5 10.8 47.4 44.0
Income Before Income Taxes 21.8 22.4 137.4 117.9
Net Income $ 13.8 $ 12.5 $ 83.9 $ 71.0
Net Investments $3,570.3 $2,772.4
Other Assets (c) 386.4 316.5
Total Assets $3,956.7 $3,088.9
Common Equity 431.0 362.8
Return on Average Common Equity 21.1% 21.3%
GATX Capital only
New Investment Volume 508.2 432.1 1,532.3 1,211.1
Portfolio Pre-Tax Spread (d) 33.6 36.5 149.2 131.7
Annualized Pre-Tax Spread as
% of Average Net
Investments 3.9% 5.6% 4.7% 5.5%
Asset remarketing:
Disposition Gains on Owned Assets 15.6 9.9 53.4 60.1
Residual Sharing Fees 2.1 3.6 3.8 15.4
Warrant Income 17.9 .2 52.3 14.7
(a) Finance assets include those of GATX Rail and Financial Services
(b) Return based on income of GATX Rail and Financial Services
(c) Includes marine operating assets
(d) Lease, interest and affiliate income less ownership costs
SOURCE GATX Corporation
 back to top
Related links:
http://www.gatx.com
Company News On-Call:
http://www.prnewswire.com/comp/105121.html or fax,
800-758-5804, ext. 105121
CONTACT:
Robert C. Lyons, Director of Investor
Relations of GATX Corporation, 312-621-6633
|
