Q3 2024 GATX Corp Earnings Call
Unknown Executive: Thank you for standing by.
Thank you for standing by at this time I would like to welcome everyone to today's G. H T X Corporation third quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
Unknown Executive: At this time, I would like to welcome everyone to today's GATX Corporation third quarter earnings call. All lines have been placed on mute to prevent any background noise.
Unknown Executive: At this time, I would like to welcome everyone to today's GATX Corporation 3rd quarter earnings call. All lines have been placed on mute to prevent any background noise.
Unknown Executive: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply hit star one again. Thank you.
Unknown Executive: After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply hit star one again. Thank you.
Once again star one.
We'd like to withdraw your question simply hit Star one again, thank you.
Shari Hellerman: I would now like to turn the call over to Shari Hellerman, Head of Investor Relations. Shari, please go ahead.
Unknown Executive: I would now like to turn the call over to Shari Hellerman, Head of Investor Relations.
Speaker Change: I would now like to turn the call over to Shari Hellerman head of Investor Relations. Please go ahead.
Unknown Executive: Shari, please go ahead.
Shari Hellerman: Thank you, Greg. Good morning, and thank you for joining GATX's 2024 3rd quarter earnings call. I'm joined today by Bob Lyons, President and Chief Executive Officer, and Tom Ellman, Executive Vice President and Chief Financial Officer.
Shari Hellerman: Thank you, Greg.
Shari Hellerman: Thank you Greg.
Shari Hellerman: Good morning and thank you for joining GATX's 2024 third quarter earnings call. I'm joined today by Bob Lyons, President and Chief Executive Officer, and Tom Ellman, Executive Vice President and Chief Financial Officer. As a reminder, some of the information you'll hear during our discussion today will consist of forelooking statements. Actual results or trends could differ materially from those statements or forecasts. For more information, please refer to the risk factors included in our earnings release and those discussed in GATX's Form 10-K for 2023 and our other filings with the SEC. GATX assumes no obligation to update or revise any forelooking statements to reflect subsequent events or circumstances.
Shari Hellerman: Good morning, and thank you for joining Gatx's 2024 third quarter earnings call.
Shari Hellerman: I'm joined today by Bob Lyons, President and Chief Executive Officer.
Shari Hellerman: And Tom Ellman, Executive Vice President and Chief Financial Officer.
Shari Hellerman: As a reminder, some of the information you'll hear during our discussion today will consist of four looking statements. Actual results or trends could differ materially from those statements or forecasts. For more information, please refer to the risk factors included in our earnings release. And those discussed in GATX's Form 10-K for 2023 and our other filings with the SEC. GATX assumes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. Earlier today, GATX reported 2024 3rd quarter net income of $89 million, or $2.43 per due lose share. This compares to 2023 3rd quarter net income of 52.5 million or $1.44 per due lose share.
Shari Hellerman: As a reminder, some of the information you'll hear during our discussion today will consist of forward looking statements.
Shari Hellerman: Actual results or trends could differ materially from those statements or forecast.
Shari Hellerman: For more information please refer to the risk factors included in our earnings release and those discussed in Gatx's Form 10-K for 2023, and our other filings with the SEC.
Shari Hellerman: G H T X assumes no obligation to update or revise any forward looking statements to reflect subsequent events or circumstances.
Shari Hellerman: Earlier today, GATX reported 2024 third quarter net income of $89 million. for $2.43 per diluted share. This compares to 2023 third quarter net income of $52.5 million or $1.44 per dual share. The 2024 third quarter results include a net negative impact of $2.5 million or $0.07 per diluted share on tax adjustments and other items. Year to date 2024 net income was $207.7 million or $5.68 per diluted share. This compares to $193.2 million or $5.30 per diluted share for the same period in 2023. The 2024 year-to-date results include a net negative impact of $9.9 million, or $0.27 per diluted share, from tax adjustments and other items. The 2023 year-to-date results include a net negative impact of $1.1 million, or $0.03 per diluted share, from tax adjustments and other items. These items are detailed in the supplemental information section of our earnings release.
Shari Hellerman: Earlier today.
Shari Hellerman: G H T X reported 2024 third quarter net income of $89 million or $2.43 per diluted share.
Shari Hellerman: This compares to 2023 third quarter net income of $52 5 million or $1 44 per diluted share.
Shari Hellerman: The 2024 3rd quarter results include a net negative impact of 2.5 million or $0.7 per due lose share from tax adjustments and other items. Year to date 2024 net income with $207.7 million or $5.68 per due lose share. This compares to $193.2 million or $5.30 per due lose share for the same period in 2023.
The 'twenty 'twenty four third quarter results include a net negative impact of $2 5 million or seven cents per diluted share from tax adjustments and other items.
Shari Hellerman: Year to date 2024, net income was $207 7 million or $5 68 per diluted share.
Shari Hellerman: This compares to $193 2 million.
Shari Hellerman: Or $5.30 per diluted share for the same period in 2023.
Shari Hellerman: The 2024 year to date results include a net negative impact of $9.9 million or $0.27 per due lose share from tax adjustments and other items. The 2023 year to date results include a net negative impact of $1.1 million or $0.3 per due lose share from tax adjustments and other items. These items are detailed in the supplemental information section of our earnings release.
Shari Hellerman: The 2024 year to date results include a net negative impact of $9 9 million or 27 cents per diluted share from tax adjustments and other items.
Shari Hellerman: The 2023 year to date results include a net negative impact of 1.1 million or three cents per diluted share from tax adjustments and other items.
Shari Hellerman: These items are detailed in the supplemental information section of our earnings release.
Shari Hellerman: And now, I'll briefly address each of our business segments. At Rail North America, fleet utilization was 99.3% at the end of the quarter, and our renewal success rate remained high at 82% in the quarter. The renewal rate change of GAT access lead price index was positive 26.6% for the quarter, and the average renewal term was 59 months. Rail North America continues to experience strong demand for the majority of car types in our existing fleet. Absolutely straight for many car types remain at historically high levels, and we continue to take advantage of the favorable leads rate environment by lengthening these terms. The secondary market for rail cars in North America Reming robust.
Shari Hellerman: And now I'll briefly address each of our business At Roehl North America, fleet utilization was 99.3% at the end of the quarter and our renewal success rate remained high at 82% in the quarter. The renewal rate change of GATX's lease price index was positive 26.6% for the quarter and the average renewal term was 59 months. Rail North America continues to experience strong demand for the majority of car types in our existing fleet. Absolute lease rates for many car types remain at historically high levels and we continue to take advantage of the favorable lease rate environment by lengthening these terms. The secondary market for railcars in North America remains robust.
And now I'll briefly address each of our business segments.
Speaker Change: Yeah, well North America fleet utilization was 99, 3% at the end of the quarter and our renewal success rate remained high at 82% in the quarter.
Speaker Change: The renewal rate change of Gatx's lease price index was positive 26, 6% for the quarter and the average renewal term was 59 months.
Speaker Change: Well North America continues to experience strong demand for the majority of car types in our existing fleet.
Speaker Change: Absolutely its rates for many car types remain at historically high levels and we continue to take advantage of the favorable lease rate environment by lengthening lease terms.
Speaker Change: The secondary market for railcars in North America remained robust.
Shari Hellerman: Real North America's remarketing income was over $43 million during the quarter, bringing total remarketing income for the year to over $96 million. which is essentially our full year expectation.
Speaker Change: Rail North America's Remarketing income was over $43 million during the quarter, bringing total remarketing income for the year to over $96 million.
Speaker Change: Which is essentially our full year expectation.
Shari Hellerman: While we're always active in the secondary market, any fourth quarter remarketing activity will likely be modest in size and very opportunistic. In addition to placing deliveries of new rail cars under our committed supply agreement, we also acquired over 1,000 rail cars in the spot in the secondary market. There are on-term leases with attractive rates.
Shari Hellerman: While we're always active in the secondary market, any fourth quarter remarketing activity will likely be modest in size and very opportunistic. In addition to placing deliveries of new railcars under our committed supply agreement, we also acquired over 1,000 railcars in the spot and secondary markets that are on long-term leases with attractive rates.
Speaker Change: Well, we're always active in the secondary market any.
Speaker Change: Any fourth quarter remarketing activity will likely be modest in size and very opportunistic.
Speaker Change: In addition to placing deliveries of new railcars under our committed supply agreement. We also acquired over 1000 railcars in the Spa and secondary markets. There are long term leases with attractive rates.
Shari Hellerman: Rail North America's year-to-date investment volume was over $955 million. Turning to rail international, GATX Rail Europe and GATX Rail India performed well as expected. We continue to experience increases in renewal leads rates versus the expiring rates for many car types. Additionally, we continue to take delivery of new cars in Europe and India, adding a combined total of nearly 900 cars during the third quarter.
Shari Hellerman: Rail North America's year-to-date investment volume was over $955 million.
Speaker Change: Rail North America's year to date investment volume was over $955 million.
Shari Hellerman: Turning to Roehl International. GATX Rail Europe and GATX Rail India performed well as expected. We continue to experience increases in renewal lease rates versus the expiring rates for many car types. Additionally, we continue to take delivery of new cars in Europe and India. adding a combined total of nearly 900 cars during the third quarter.
Speaker Change: Turning to rail international.
Speaker Change: T X well Europe N Gatx's rail, India performed well as expected.
Speaker Change: We continue to experience increases in renewal lease rates versus the expiring rates from any car types.
Speaker Change: Additionally, we continue to take delivery of new cars in Europe and India.
Speaker Change: Adding a combined total of nearly 900 cars during the third quarter.
Shari Hellerman: Year-to-date, Rail International's investment volume was over $190 million. Within engine leasing, our joint ventures with Rolls Royce and our wholly owned aircraft engines portfolio are both performing very well, driven by continuing strong demand for global passenger air travel. At RRPF, year-to-date investment volume totaled approximately 500 million, reflective of the joint ventures' focus on growth. Additionally, GATX added four aircraft's barringes to our wholly-owned portfolio for approximately $95 million in the quarter. Our year-to-date direct engine investment volume was over $166 million.
Shari Hellerman: Year-to-date, Roehl International's investment volume was over $190 million.
Year to date rail internationals investment volume was over $190 million.
Shari Hellerman: Within engine leasing, our joint ventures with Rolls-Royce and our wholly owned aircraft engines portfolio are both performing very well, driven by continuing strong demand for global passenger air travel. At RRPS, year-to-date investment volume totals approximately $500 million. reflective of the joint venture's focus on growth. Additionally, GATX added four aircraft spare engines to our wholly owned portfolio for approximately $95 million in the quarter. Our year-to-date direct engine investment volume was over $166 million.
Speaker Change: Within engine leasing.
Speaker Change: Joint ventures with Rolls Royce at our wholly owned aircraft engines portfolio are both performing very well driven by continuing strong demand for global passenger air travel.
Speaker Change: At Rps year to date investment volume totaled approximately $500 million.
Speaker Change: Reflective of the joint Venture's focus on growth.
Speaker Change: Additionally.
G H T X added four aircraft spare engines to our wholly owned portfolio for approximately $95 million in the quarter.
Speaker Change: Our year to date direct engine investment volume was over $166 million.
Shari Hellerman: Finally, as we mentioned in the earnings release, reflecting current market conditions and our year-to-date performance, we've updated our 2024 four-year earnings guidance to a range of 750 to 770 per dollar share, excluding any impact from tax adjustments and other items. And those are prepared remarks.
Shari Hellerman: Finally, as we mentioned in Earnings Release, Reflecting current market conditions and our year-to-date performance, we've updated our 2024 full-year earnings guidance to a range of $7.50 to $7.70 per dealer's share, excluding any impact from tax adjustments and other items. And those are prepared remarks.
Speaker Change: Finally, as we mentioned in earnings release.
Speaker Change: Reflecting current market conditions and our year to date performance. We've updated our 2020 for full year earnings guidance to a range of $7 15 to $7 70 per diluted share excluding any impact from tax adjustments and other items.
Speaker Change: And those are our prepared remarks, I'll hand, it back to the operator, so we can open it up for Q&A.
Unknown Executive: I'll hand it back to the operator so we can open it up for Q&A.
Shari Hellerman: I'll hand it back to the operator so we can open it up for Q&A.
Unknown Executive: Thanks, Sherry.
Unknown Executive: Thanks, Shari. And at this time, I would like to remind everyone that in order to ask a question, again, press star one on your telephone keypad once again, star one, and we will pause just a moment to compile the Q&A.
Speaker Change: Thanks, Gerry and at this time I would like to remind everyone that in order to ask a question again press star one on your telephone keypad. Once again star one and we will pause just a moment to compile the Q&A roster.
Unknown Executive: And at this time, I would like to remind everyone that, in order to ask a question, again, press star 1 on your telephone keypad. Once again, star 1. And we will pause just a moment to compile the Q&A roster.
Bascome Majors: And it looks like our first question today comes from Bascone Majors with Susquehanna International Group. Bascone, please go ahead.
Bascome Majors: And it looks like our first question today comes from Bascome Majors with Susquehanna International Group.
Speaker Change: And it looks like our first question today comes from basketball majors with Susquehanna International Group.
Bascome Majors: Bascome, please go ahead. Good morning and thanks for taking my questions. The guidance increased at the low end there.
Speaker Change: Please go ahead.
Bascome Majors: Good morning, and thanks for taking my questions. The guidance increased at the low end there. I realize it's not massive, but could you walk us back to how you define the year originally, breaking it down by some items, and let us know maybe what puts and takes there have been in your original outlook that led to that.
Speaker Change: Good morning, and thanks for taking my questions.
Speaker Change: The guidance increase at the low end there.
Thomas Ellman: I realize it's not massive, but could you walk us back to how you define the year originally, breaking it down by some items, and let us know maybe what puts and takes there have been in your original outlook that led to that.
Speaker Change: I realize it's not massive but could you walk us back to how you define the year originally breaking it down by some items and let US know maybe what puts and takes there have been in your original outlook.
Speaker Change: That led to that nine months later, thank you.
Bascome Majors: Nine months later. Thank you.
Thomas Ellman: Yeah, Bascome, this is Tom. If you go back and take a look at the January earnings call transcript, you'll see where Bob kind of walked through segment by segment, and then went into some more detail in various areas about how we saw the year coming out. And if you compare that to what you actually see for the third quarter, in almost every area, it's going to be right on.
Thomas Ellman: Yep, Bascom, this is Tom. If you if you go back and take a look at the January earnings call transcript, you'll you'll see where Bob kind of walked through segment by segment, and then went into some more detail in various areas about how we saw the year coming out. And if you compare that to what you actually see for the third quarter, in almost every area, it's going to be right on. The one area that's a little bit different is remarketing gains at Rail North America that Shari alluded to.
Speaker Change: Yes Bascom. This is Tom if you if you go back and take a look at Janney.
Speaker Change: January earnings call transcript.
Tom Ellman: Youll see where Bob kind of walk through segment by segment and then went into some more detail in various areas about how we saw the year coming out.
Tom Ellman: And if you compare that to what you actually see for the third quarter in almost every area, it's going to be right on.
Thomas Ellman: The one area that's a little bit different is the remarketing gains at Rail North America that Shari alluded to. And that really is the key driver for taking up the low end of the guidance range. The rest of rail North America, whether you look at revenue, net maintenance, interest cost, those are all on a year-to-date basis, very similar with that guidance we laid out; same with rail international, same with the engine leasing business. So really, the area of variance comes down to that one piece.
Tom Ellman: The one area, that's a little bit different.
Tom Ellman: As the remarketing gains at rail North America that Sheri alluded to and that really is the key driver for taking up the low end of the guidance range.
Thomas Ellman: And that really is the key driver for taking up the low end of the guidance range. The rest of Rail North America, whether you look at revenue, net maintenance, interest costs, those are all on a year to date basis, very similar with that guidance we laid out. Same with Rail International, same with the engine leasing business. So really, the the area of variance comes down to that one.
Tom Ellman: The rest of rail North America, whether you look at revenue net maintenance interest cost those are all on a year to date basis very similar with that guidance. We laid out same with rail international same with the engine leasing business. So really the area of variance comes down to that one piece.
Bascome Majors: Thank you for that. And maybe to that point, at least in public equity investor circles, there's been some concern that that particular level of P&L from gains is unsustainable longer term, but that concern has been around for two and a half years. And certainly, if we talk to you guys or other people in the markets, no one's really noting a change in the supply-demand and profit dynamics of that marketplace.
Bascome Majors: Thank you for that, and maybe to that point. At least in public equity investor circles, there's been some concern that That particular level of P&L from gains is unsustainable longer term, but that concern has been around for two and a half years and certainly if we talk to you guys or other people in the markets. No one's really noting a change in the supply demand. and Profit Dynamics of that marketplace.
Speaker Change: Thank you for that and maybe to that point at least in public equity investor circles. There has been some concern that.
Tom Ellman: That particular lever.
Tom Ellman: Will a P&L from from from gains as unsustainable longer term, but that concern has been around for two and a half years.
Certainly if we talked to you guys or other people in the markets.
Tom Ellman: No one's really noting a change in the supply demand in.
Tom Ellman: And profit dynamics of that marketplace could you talk a little bit through how you feel about the durability of <unk>.
Bascome Majors: Can you talk a little bit through how you feel about the durability of and then to maybe the assets you think you're able to supply the market, maybe companies specifically as well, just so we can understand kind of how that might shape over the next two or three years.
Bascome Majors: Can you talk a little bit through how you feel about the durability of the attractive secondary market that you're able to sell into? And maybe some comments in the market specifically, and then to maybe the assets you think you're able to supply the market, maybe companies specifically, as well, just so we can understand kind of how that might shape over the next two or three years. Thank you.
Tom Ellman: The attractive secondary market that you are able to sell into in May.
Tom Ellman: Maybe some comments on the market specifically.
Tom Ellman: And then two maybe the the assets you think youre able to supply the market maybe company specific Lee as well just so we can understand kind of how that might shape over the next two or three years. Thank you.
Robert Lyons: Fask him, it's Bob Lyons; I'll take that one.
Robert Lyons: Bascome, it's Bob Lyons. I'll take that one. And I'd go back a couple years ourselves here and say, when we were looking at an environment where interest rates were likely going to be moving higher, We also were somewhat uncertain about what kind of an impact that might have in the secondary market. A lot of the buyers of rail cars in the secondary market, they run the gamut from other large leasing entities to smaller privately owned leasing companies. And so we weren't quite sure how the rising interest rate environment, what impact it would have on some of those buyers.
Tom Ellman: Thanks.
Tom Ellman: Bob Lyons I'll I'll take that one.
Robert Lyons: And I'd go back a couple of years ourselves here and say, when we were looking at an environment where interest rates were likely going to be moving higher, we also were somewhat uncertain about what kind of an impact that might have in the secondary market. A lot of the buyers of rail cars in the secondary market, they run the gamut from other large leasing entities to smaller privately owned leasing companies. And so we weren't quite sure how the rising interest rate environment would impact it would have on some of those buyers.
Tom Ellman: And I would go back a couple of years.
Tom Ellman: Ourselves here and say.
When we were looking at an environment, where interest rates were likely going to be moving higher.
Tom Ellman: We also were somewhat uncertain about what kind of an impact that might have in the secondary market.
Tom Ellman: A lot of the buyers of railcars in the secondary market. They run the gamut from other large leasing entities to smaller privately owned leasing companies.
Tom Ellman: And so we werent quite sure how the rising interest rate environment, what impact it would have on some of those buyers. So we were a bit cautious too, but fast forward two years.
Robert Lyons: So we were a bit cautious too, but fast forward two years. You know, we're now it appears to be on the backside of that rising rate environment and one where rates have either stabilized or on their way down. And demand has remained very robust. And I would say that's across The breadth and depth of the buyers that we sell to. and it's a lengthy list. You know, we put assets out for sale in the secondary market. There's probably anywhere between 20 or 30 different entities that would be interested in receiving. Those offering memorandums, those sale packages.
Robert Lyons: So we were a bit cautious, too, but fast forward two years, you know, where now it appears to be on the backside of that rising rate environment, and one where rates are either stabilizing or on their way down. And demand has remained very robust. And I would say that's across the breadth and depth of the buyers that we sell, too. And it's a lengthy list. You know, we put assets out for sale in the secondary market. There's probably anywhere between 20 or 30 different entities that would be interested in receiving. Those offering memorandums, those sale packages.
Tom Ellman: We're now it appears to be on the backside of that rising rate environment, one where rates of either stabilize or on their way down and demand has remained very robust and I would say that's across.
Tom Ellman: The breadth and depth of the buyers that we sell to.
Tom Ellman: And it's a lengthy list.
Tom Ellman: Yes, we put assets out for sale in the secondary market Theres, probably anywhere between 20 or 30 different entities that would be interested in receiving.
Tom Ellman: Those those offering memorandums those sale packages.
Robert Lyons: We participate as well. We're a big buyer of rail cars in the secondary markets that we have our fingers on the pulse on both sides. And the market's really healthy.
Robert Lyons: We participate as well. We're a big buyer of railcars in the secondary market. So we have our fingers on the pulse on both sides. And the market's really healthy. Now, what appeals to the buyers, I think, potentially what's, you know, what's unique about GATX is, is the diversity of the portfolios we can put into the market because we have 160 different plus types of railcars. You know, four or five hundred different types of customers, different commodities, and our customer base is very high quality. So when we put assets for sale in the secondary market, buyers are looking at the fact that there's always a lease attached.
Tom Ellman: We participate as well, we're a big buyer of railcars in the secondary markets that we have our fingers on the pulse on both sides.
Tom Ellman: And the market is really healthy.
Robert Lyons: Now what appeals to the buyers, I think potentially what's unique about GATX is the diversity of the portfolios we can put into the market because we have. 160 different plus types of rail cars, you know, four or 500 different types of customers, different commodities. And our customer base is very high quality. So when we put assets for sale in the secondary market, buyers are looking at the fact that there's always a lease attached. And it's four or five, six, seven years, and it's with a very good credit. There's a comfort level there. And I think an experience level for a lot of our buyers that they know what they're getting when they buy assets from GATX.
Now what appeals to the buyers I think potentially.
Tom Ellman: Potentially what's what's unique about <unk> is the diversity of the portfolios, we can put into the market because we have.
Tom Ellman: 160 different.
Tom Ellman: Plus types of railcars.
Tom Ellman: $4 500 different types of customers different commodities.
Tom Ellman: And our customer base is very high quality.
Tom Ellman: So when we put assets for sale in the secondary market buyers are looking at the fact that there is always a lease attached.
Robert Lyons: Uh, and it's four, five, six, seven years and it's with a very good credit. Um, there's a comfort level there. Uh, and I think an experience level for a lot of our buyers. that they know what they're getting when they buy assets from GATX. Quality customers, quality asset and a well-structured lease, so Now that would be my take on the secondary market, but in general, very robust.
Tom Ellman: And it's 4567 years and its with a very good credit.
Tom Ellman: There is a comfort level there.
Tom Ellman: And I think in an experience level for a lot of our buyers.
Tom Ellman: They know what they're getting when they buy assets from Gtx.
Robert Lyons: Quality customers, quality asset, and a well-structured lease. So, you know, that would be my take on the secondary market, but in general, very robust.
Tom Ellman: Quality customers quality asset.
Tom Ellman: And our well structured lease so.
Tom Ellman: No that would be my take on the secondary market, but in general very robust.
Robert Lyons: And maybe to focus on, you know, from the supply side, you know, are you getting to a point where you're happy and content with the makeup of your North American fleet or, you know, is this a well that GATX can keep drawing from, you know, your two down the road. If the market does remain as attractive as it is today. Well, I think that with 110,000 plus car fleet and a supply agreement and a very active program of buying assets in the secondary market, the well is pretty deep. It's very deep. And I look, even at this year, flipping it around secondary market as a buyer, you know, half of our investment volume here today at Rail North America has been in the spot new car market and then the secondary market.
Tom Ellman: And maybe to focus on.
Bascome Majors: maybe to from the supply side.
Tom Ellman: From the supply side.
Robert Lyons: Are you getting to a point where you're happy and content with Makeup of your North American fleet or you know, is this a well that GTX can keep drawing from? a year or two down the road. if the market does remain as attractive. Well, I think that with 110,000 plus car fleet and a supply agreement. and a very active program of buying assets in the secondary market. The well is pretty deep, it's very deep. And I look even at this year, flipping it around, secondary market as a buyer, half of our investment volume year-to-date at Rail North America has been in the spot new car market and in the secondary market.
Tom Ellman: Or are you getting to a point, where you're happy and content with the makeup of your North American fleet or is this a well that gtx can keep drawing from.
Tom Ellman: You know a year or two down the road.
If the market does remain as attractive as it is today.
Speaker Change: Well I think that was 110000 plus car fleet and a supply agreement.
Speaker Change: And a very active program of buying assets in the secondary market.
Speaker Change: The world is pretty deep.
Speaker Change: It is very deep and I look even at this year flipping it around secondary market as a buyer.
Speaker Change: Half of our investment volume year to date at rail North America has been in the spot new car market and then secondary market. So we're either buying new cars directly from the builders.
Robert Lyons: So, we're either buying new cars directly from the builders on a spot basis, or we're in the second market buying. So, we're adding to the fleet through a number of different avenues. And we don't get overly focused on fleet size. So, it's not like we have a goal of let's get to 130,000 cars or 140,000 cars. We want to generate the best risk-adjusted return we can for the shareholder. That's priority number one. And so, we'll opportunistically add cars to the fleet, but the economics have to work. And there's ample opportunity right now to do that.
Robert Lyons: So we're either buying new cars directly from the builders on a spot basis or we're in the secondary market buying. So we're adding to the fleet through a number of different avenues.
Speaker Change: On a spot basis or were in the second market buying.
Speaker Change: So we're adding to the fleet through a number of different avenues.
Robert Lyons: Um, and we don't get overly focused on fleet size, so it's not like we have a goal of let's get to 130,000 cars or 140,000 cars. We want to generate the best risk adjusted return we can for the shareholder. That's priority number one. And so we'll opportunistically add cars to the fleet, but the economics have to work. And there's ample opportunity right now to do that.
And we don't get overly focused on fleet size. So it's not like we have a goal of let's get to 130000 cars or 140000 cars, we want to generate the best risk adjusted return we can for the shareholder that's priority number one.
Speaker Change: So we'll opportunistically add cars to the fleet, but the economics have to work and there is ample opportunity right now to do that.
Thomas Ellman: And bass can just put some numbers to some of those gains over time. So, if you go back 15 years or so, you'll see that on average, we had $65 million a year or so of gains on sales at Rail North America. And during that period of time, the low year was 2020, the first year of COVID, which was almost $40 million that year.
Thomas Ellman: And Bascom, just to put some numbers to some of those gains over time. So if you go back 15 years or so, you'll see that on average, we had $65 million a year or so of gains on sales at Rail North America. And during that period of time, the low year was 2020, the first year of COVID, which was almost $40 million that year.
Speaker Change: And Baskin just to put some numbers to some of those gains over time. So if you go back 15 years or so youll see that on average we had $65 million a year or so.
Speaker Change: <unk> on sales at rail North America, and during that period of time. The low year was 2020, the first year of Covid, which was almost $40 million at year. So to your point about the sustainability clearly theres a track record that there are material gains.
Bascome Majors: So to your point about the sustainability, clearly, there's a track record that there are material gains. kind of an all.
Bascome Majors: So, to your point about the sustainability, clearly there's a track record that their material gains. kind of an all market.
Speaker Change: Kind of in all markets.
Unknown Executive: Thank you very much. Thank you.
Speaker Change: Thank you very much.
Bascome Majors: Thank you very much. Thank you.
Speaker Change: Thank you.
Brendan Mccarthy: Thanks, Bascome. And our next question comes from the line of Brendan McCarthy with Tudoti.
Speaker Change: Thanks Pascal.
Brendan Mccarthy: And our next question comes from the line of Brendan McCarthy with Sudoti.
Speaker Change: And our next question comes from the line of Brendan Mccarthy with Sidoti Brendan. Please go ahead.
Brendan Mccarthy: Brendan, please go ahead. Hey, everybody, thanks for taking my questions here. I just wanted to follow up on the remarketing income side.
Brendan Mccarthy: Brendan, please go ahead. Hey everybody, thanks for taking my questions here.
Hey, everybody. Thanks for taking my questions here I just wanted to follow up on the remarketing income side.
Brendan Mccarthy: I just wanted to follow up on the remarketing income side. It sounds like you obviously, broadly speaking, demand remains robust, as he mentioned, but we'll kind of underpin your expectations for a more modest turnout, looking ahead to Q4.
Brendan Mccarthy: It sounds like you obviously, broadly speaking, demand remains robust, as you mentioned, but what kind of underpins your expectations for a more modest turnout?
Brendan Mccarthy: It sounds like you're obviously broadly speaking demand remains robust as you mentioned, but what kind of underpins your expectations for a more modest turn out now looking ahead to Q4.
Robert Lyons: Looking ahead to Q Yeah, I, Brendan, it's Bob Lyons. Yeah, we came into the year expecting anywhere between 90 and 100 million of remarketing income. I think we're already in the mid 90s, 96. So the vast majority of the assets we kind of had circled for potential sale this year have been sold. So, you know, we'll continue to be in the market in the fourth quarter opportunistically, but no significant plans for sale. And a lot of times the buyers of our assets, they have a capital program as well. So they have allocated dollars coming into each year that they're going to use to buy assets in the secondary market.
Robert Lyons: Yeah, I, Brendan, it's Bob Lyons. You know, we came into the year expecting anywhere between 90 and 100 million of remarketing income. I think we're already in the mid 90s, 96. So the vast majority of the assets we kind of had circled for potential sale this year have been sold. So we'll continue to be in the market in the fourth quarter opportunistically, but no significant plans for sale. And a lot of times, the buyers of our assets, they have a capital program as well. So they have allocated dollars coming into each year that they're going to use to buy assets in the secondary market.
Speaker Change: Yes.
Bob Lyons: Brendan its Bob Lyons.
Bob Lyons: Yes, we came into the year expecting anywhere anywhere between 90 and $100 million of remarketing income I think we're already in the mid nineties 96.
Bob Lyons: So the vast majority of the.
The assets, we kind of had circled for potential sale. This year have been sold.
Bob Lyons: So we will continue to be in the market in the fourth quarter Opportunistically.
Bob Lyons: But no significant plans for sale and a lot of times the buyers of our assets they have a capital program as well.
Bob Lyons: So they have allocated dollars coming into each year that theyre going to use to buy assets in the secondary market.
Robert Lyons: And historically, what we've seen is a lot of times you get into the fourth quarter, and those capital programs are winding down for the year and then get refreshed in January. So it's just kind of the cadence of both buy and sell side.
Brendan Mccarthy: And historically, what we've seen is a lot of times you get into the fourth quarter and those capital programs are winding down for the year and then get refreshed in January. So it's just kind of the cadence of both bi and cell side. Got it. That makes sense. So you've seen, you know, historic seasonality there, just a lower level in Q4 and past. It's hard to pinpoint it exactly, because you could have a couple of transactions that generate a sizable gain. You know, maybe the volume isn't there, but the gain is larger in Q4. So it's a little bit difficult to predict.
Bob Lyons: Historically, what we've seen is a lot of times you get into the fourth quarter and those capital programs are winding down for the year and then get refreshed in January.
So it's just kind of the cadence of both buy and sell side.
Brendan Mccarthy: God, that makes sense. So you've seen historic seasonality there, just the lower level in Q4 in past years. It's hard to pinpoint it exactly because you could have a couple of transactions that generate a sizeable gain. Maybe the volume isn't there, but the gain is larger in Q4. So it's a little bit difficult to predict, but in general, whether it's buy side or sell side, the pace of activity does tend to slow a little bit in Q4. Understood.
Speaker Change: Got it that makes sense that <unk> seen historic seasonality, there just a lower level in Q4 than in past years.
It's hard to pinpoint it exactly because you could have a couple of transactions that generate a sizable gain.
Speaker Change: Maybe the volume isn't there, but the gain is larger in Q4, so it's a little bit difficult to predict but.
Brendan Mccarthy: But In general, whether it's by side or cell side, the pace of activity does tend to slow a little bit in Q4. Understood.
Speaker Change: In general whether its buy side or sell side.
The pace of activity does tend to slow a little bit in Q4.
Speaker Change: Understood understood and I wanted to turn to the R. R RPF earnings.
Brendan Mccarthy: And wanted to turn to the RRPF earnings. It looked like a really strong quarter there. I think it doubled from the second quarter of 2024. Can you talk about the trends there and what drove the strong results?
Robert Lyons: And wanted to turn to the RRPF earnings. It looked like a really strong quarter there. I think it doubled from the second quarter of 2024. Can you talk about the trends there and what drove the strong results?
Speaker Change: It looked like a really strong quarter, there I think it doubled from the second quarter 2024 could you talk about the trends there and what drove the strong results.
Robert Lyons: Yeah, so at RRPF, the joint venture with Rolls-Royce, it's been a good year, but consistent with my comments early on, very much in line with our expectations coming into the year. We expected lease rates to improve, we expected to have more engines on lease. For example, the portfolio from Q3 a year ago to Q3 now has gone from 395 engines to 415 engines, so 20 additional engines at higher rates. That's really what's driving the improvement, but again, very much in line with our expectations.
Robert Lyons: Yeah, so at RRPF, the joint venture with Rolls-Royce, it's been a good year, but consistent with my comments early on, very much in line with our expectations coming into the year. We expected lease rates to improve. We expected to have more engines on lease. For example, the portfolio from Q3 a year ago to Q3 now has gone from 395 engines to 415 engines. So 20 additional engines at higher rates. That's really what's driving the improvement, but again, very much in line with our expectations.
Speaker Change: Yes, so ed.
Speaker Change: Our RPF the joint venture with Rolls Royce.
It's been a good year, but consistent with my comments early on very much in line with our expectations coming into the year, we expected lease rates to improve we expected to have more engines on lease.
Speaker Change: For example, the portfolio from Q3, a year ago into Q3 now has gone from 395 engines to 415 engines. So 20 additional engines it at higher rates, that's really what's driving the improvement, but again very much in line with our expectations.
Brendan Mccarthy: Okay, sorry if I missed this, but do you have to have the breakdown between remarketing income there and lease revenue? Yep, so for the quarter, it was about 50-50 and year-to-date. It's about two-thirds-one-third operating income versus remaining. Marking. Got it.
Brendan Mccarthy: Okay, sorry if I missed this, but do you happen to have the breakdown between remarketing income there and lease revenue? Yep, so for the quarter, it was about 50 50. And year to date, it's about two thirds, one third operating income versus Got it. Okay, that's helpful.
Speaker Change: Okay, and sorry, if I missed this but do you have to have the breakdown between remarketing income there and.
Speaker Change: Lease revenue.
Speaker Change: Yes, so for the quarter. It was about 50 50 and year to date, it's about two thirds, one third operating income versus remarketing.
Speaker Change: Yeah.
Speaker Change: Got it okay. That's helpful.
Brendan Mccarthy: Okay, that's helpful.
Brendan Mccarthy: I just wanted to look at the rail North America fleet more broadly speaking. I think this is the number we've talked about in the past, but what kind of runway can we look at when you look at the rail North American fleet? How much of that has been reprised at these higher least rate levels? I guess my question is how much of the fleet is kind of due to be reprised higher at this point in time? Yeah, Brendan, if you think about where the, you know, the least rate environment has gone over the course of the last, you know, seven or eight years, 2016 to 2021.
Brendan Mccarthy: I just wanted to look at the rail North American fleet more broadly speaking, I think this is a number we've talked about in the past, but what kind of runway can we look at when you look at the rail North American fleet, how much of that has been repriced at these higher lease rate levels? I guess my question is, how much of the fleet is kind of... priced higher at this point.
Speaker Change: And I just wanted to look at the rail North America fleet more broadly speaking I think this is the number we've talked about in the past but.
Speaker Change: What kind of runway Ken we look at when you look at the rail North American fleet, how much of that has been repriced at these higher lease rate levels.
Speaker Change: I guess my question is how much of the fleet is kind of due to be repriced higher at this point in time.
Brendan Mccarthy: Yeah, Brendan, if you think about where the, you know, the lease rate environment has gone over the course of the last, you know, seven or eight years. 2016 to 2021, it was a negative, you know, real challenging environment. 22, it started to turn positive. So if you kind of look at the number of renewals we do in a given year, it's about half, roughly. that have repriced and about half yet to go. Great, great.
Yes, Brendan if you think about where the.
Speaker Change: The lease rate environment has gone over the course of the last.
Speaker Change: Seven or eight years two.
Speaker Change: <unk> 2016 to 2021 it was a negative.
Brendan Mccarthy: It was a negative, you know, a real challenging environment, 22. It started to turn positive. So if you kind of look at the number of renewals we do in a given year, it's about half, roughly, that have reprised in about half yet to go. Great, great. That's very helpful.
Speaker Change: Real challenging environment 'twenty two it started to turn positive so.
Speaker Change: If you kind of look at the number of renewals, we do in a given year.
Speaker Change: It's about half roughly.
Speaker Change: That have repriced and about half yet to go.
Speaker Change: Great Great. That's very helpful. Thanks, everybody that's all from me.
Brendan Mccarthy: That's very helpful.
Brendan Mccarthy: Thanks, everybody.
Brendan Mccarthy: Thanks, everybody. That's all from me. Thank you.
Brendan Mccarthy: That's all for me. Thank you. Great. Thanks, Brendan.
Speaker Change: Thank you.
Unknown Executive: Great. Thanks, Brendan.
Speaker Change: Great. Thanks Brendan.
Justin Bergner: And just a reminder, folks, again, if you'd like to ask a question, star one on your telephone keypad. Once again, star one. And our next question comes from the line of Justin Bergner with Cabelli Funds.
Unknown Executive: And just a reminder, folks, again, if you'd like to ask a question, star one on your telephone keypad. Once again, star one.
Speaker Change: And just to remind folks again, if you'd like to ask a question star one on your telephone keypad. Once again star one and our next question comes from the line of Justin Bergner with Gabelli funds. Justin. Please go ahead.
Justin Bergner: And our next question comes from the line of Justin Bergner with Cabeli Funds.
Justin Bergner: Justin, please go ahead. Good morning Bob, good morning Tom, good morning Shari. Morning, morning.
Justin Bergner: Justin, please go ahead. Good morning, Bob. Morning, Tom. Good morning, Shari. Morning.
Justin Bergner: Good morning, Bob Good morning, Tom Good morning, Sherri Good morning, good morning.
Speaker Change: Yeah.
Justin Bergner: Could you comment on sequential lease rates? Sure. So, you know, as we've noted in recent quarters, Justin, in general, the rate to flatten out at, albeit at very high levels. And the pricing environment overall remains very favorable; high utilization, high renewal success rate. 2Q to 3Q, we did see a very small down tick in absolute lease rates, like very low single digits. And I'd say, you know, in my view, that's not unexpected to see some small movement, either positive or negative, in an environment where rates have generally leveled off at high levels. You know, I'd also add, we touched on this a little bit previously, but a key positive catalyst right now impacting the lease pricing environment is the supply side of the rail car sector.
Robert Lyons: Did you comment on sequential lease rates? Sure. So, you know, as we've noted in recent quarters, Justin, in general, the rates have flattened out, albeit at very high levels. And the pricing environment overall is remains very favorable, high utilization, high renewal success rate. 2Q to 3Q, we did see a very small downtick in absolute lease rates, like very low single digits. And I'd say, you know, in my view, that's not unexpected to see some small movement, either positive or negative. in an environment where rates have generally leveled off at a high level.
Justin Bergner: Could you comment on sequential lease rates.
Speaker Change: Sure. So as we've noted in recent quarters just in general the rates have flattened out at albeit at very high levels.
And the pricing environment overall is remains very favorable high utilization high renewal success rate <unk>.
Speaker Change: <unk>, we did see a very small downtick in absolute lease rates like very low single digits.
And I would say my view, that's not unexpected to see some small movement either positive or negative.
Speaker Change: And in an environment, where rates have generally leveled off at high levels.
Robert Lyons: um You know, I'd also add, we touched on this a little bit previously, but a key positive catalyst right now impacting the lease pricing environment is the supply side of the railcar sector. Pricing's in a good place, partly due to the positive dynamics at work in the supply side. We're not seeing significant overbuilding or speculative orders, and those points have really been at the center of what has caused major rate swings in the past. and also with the supply side stable. When we have seen some degree of oversupply in a particular car type, it self-corrects pretty quickly through scrapping.
Speaker Change: Yes, I'd also add we touched on this a little bit previously, but a key positive catalyst right now impacting the lease pricing environment as the supply side of the railcar sector.
Robert Lyons: You know, pricing's in a good place partly due to the positive dynamics at work in the supply side. You know, we're not seeing significant overbuilding or speculative orders. And those points have really been at the center of what has caused major rate swings in the past. And also, with the supply side stable, when we have seen some degree of oversupply in a particular car type, it self-corrects pretty quickly through scrapping. So overall, we're very encouraged by where we're at in the rate environment. Got it. That's helpful. Thanks.
Speaker Change: Pricing is in a good place partly due to the positive dynamics at work in the supply side, we're not seeing <unk>.
Speaker Change: Significant overbuilding, our speculative orders and those points have really been at the center of what has caused major rates swings in the past.
Speaker Change: And also with the supply side stable.
Speaker Change: When we have seen some degree of oversupply and in particular car type itself corrects pretty quickly through scrapping.
Justin Bergner: So overall, we're very encouraged by where we're at in the rate environment. Got it. That's helpful. Thanks.
Speaker Change: So overall, we're very encouraged by where we're at in the rate environment.
Speaker Change: Yes.
Speaker Change: Got it that's helpful. Thanks.
Justin Bergner: Second question would be, as it relates to RRPF, you know, when all is said and done for the year, do you expect Continuing Asset Sales in the Joint Venture to kind of get you back to the historical mix of operating versus disposition. Yeah, so so Justin Over time, you can certainly calculate an average, but if you look at the individual years, it can vary quite a bit year to year. But what you've seen year to date, it's probably a fair guess to be, it'll be closer to that 50-50 by the time we're done for the year than the two-thirds, one-third we're at now.
Robert Lyons: Second question would be, as it relates to RRPF, you know, when all of a sudden done for the year, do you expect, you know, continuing asset sales in the joint venture to kind of get you back to the historical mix of operating versus disposition earnings for that JV? Yeah, so, so Justin. Over time, you can certainly calculate an average, but if you look at the individual years, it can vary quite a bit year-to-year. But what you've seen year-to-date, it's probably a fair guess to be, it'll be closer to that 50-50 by the time we're done for the year than the two-thirds-one-third we're at now. But calling the exact amount is hard.
Speaker Change: Second question would be as it relates to our RPF.
Speaker Change: All of a sudden done for the year do you expect.
Speaker Change: Continuing asset sales and the joint venture to kind of get you back to the historical mix of operating versus disposition earnings for that JV.
Speaker Change: Yeah, So Justin.
Over time, you can you can certainly calculate an average but if you looked at the individual years. It can vary quite a bit year to year.
Speaker Change: But what you've seen year to date.
Speaker Change: It's probably a fair gas to be it'll be closer to that 50 50 by the time, we're done for the year than the two thirds one third we're at now but calling the exact amount is hard just like at rail North America, the timing of when those transactions occur it's.
Robert Lyons: But calling the exact amount is hard. Just like at Rail North America, the timing of when those transactions occur, it's hard to get overly precise. There's nothing that would have changed. So, so on the margin, you know, the answer would be yes, because the fleet size is getting bigger. But that takes a while for that to materialize. Fundamentally, the fleet's getting larger at better rates. You know, while we're, you know, holding and achieving very attractive returns on those investments.
Justin Bergner: Just like at Rail North America, the timing of when those transactions occur, it's hard to get overly precise. Gotcha.
Speaker Change: Hard to get overly precise.
Speaker Change: Gotcha.
Robert Lyons: And then, I mean, with respect to that long-term average, though, like on a multi-year basis, there's nothing that would have changed to make it more operating earnings versus disposition earnings, kind of looking out on a multi-year basis, is there? So, on the margin, the answer would be yes, because the fleet size is getting bigger, but that takes a while for that to materially change. Fundamentally, the fleet's getting larger at better rates, while we're achieving very attractive returns on those investments. But, as Tom said, that takes a while to bleed into the portfolio. Got it.
Speaker Change: And then with respect to that long term average, though like on a multiyear basis.
Theres nothing that would have changed to make it more operating.
Speaker Change: Earnings versus disposition earnings kind of looking out on a multiyear basis is there.
So on the margin the answer would be yes, because the fleet size is getting bigger.
Speaker Change: But that takes a while for that to materially change.
Speaker Change: Fundamentally the fleet's getting larger at better rates.
Speaker Change: <unk>.
Speaker Change: While we are hoping and.
Speaker Change: <unk> very attractive returns on those investments, but yes.
Robert Lyons: As Tom said, that takes a while to bleed into the portfolio. got it.
Speaker Change: As Tom said that takes a wilder.
Speaker Change: Bleed into the portfolio.
Speaker Change: Got it.
Justin Bergner: Lastly, if I could just ask about Roehl International. Profitability seems very, you know, healthy this. last quarter and the prior year. No material one-offs, continued very good performance both at GATX Rail Europe and at GATX India. You know, the economic environment in Europe can be a bit more challenging, but they're still the team there is doing an excellent job keeping cars utilized and achieving rate increases. for the vast majority of the fleet. Intermodal remains a bit of a challenge spot there. It's not a big part of the fleet, but it's the one that has held utilization back a little bit.
Robert Lyons: Lastly, if I could just ask about Rail International, I mean the profitability seems very healthy this quarter compared to last quarter in the prior year. Anything specific going on is just sort of a higher level of sustained profitability, or are there some one-offs that helped the third quarter? No material one-offs continued very good performance, both at GATX Rail Europe and at GATX India. The economic environment in Europe can be a bit more challenging, but there's still the team there is doing an excellent job, keeping cars utilized, and achieving rating increases for the vast majority of the fleet.
Speaker Change: Lastly, if I could just ask about rail international.
Speaker Change: Profitability is seemingly berries.
Speaker Change: Healthy this quarter compared to last quarter in the prior year anything specific going on sort of a higher level of <unk>.
Speaker Change: Sustained profitability or are there some one offs that helped the third quarter.
No material one offs and continued very good performance, both the gtx failure up and Gtx India.
Yes.
Speaker Change: The economic environment in Europe can be.
Speaker Change: Is a bit more challenging but there is still the team there is doing an excellent job keeping cars utilized and achieving rate increases.
Speaker Change: For the vast majority of the fleet intermodal remains a bit of a challenge spot there it's not a big part of the fleet, but it's the one that is.
Robert Lyons: Intermodal remains a bit of a challenge spot there. It's not a big part of the fleet, but it's the one that is held utilization back a little bit. But overall, just very good performance, very good cost control, and in India, putting a lot of new wagons to work in a market that just continues to grow pretty dramatically.
Speaker Change: Held our utilization back a little bit.
Robert Lyons: But overall, just very good performance, very good cost control. And in India, putting a lot of new wagons to work. and a market that just continues to grow pretty dramatically.
Speaker Change: But overall just very good performance very good cost control and in India, putting a lot of new wagons to work.
Speaker Change: In a market that just continues to grow pretty dramatically.
Unknown Executive: Great.
Justin Bergner: Great, thank you for taking my question. Thanks, Justin. Thank you, Justin.
Speaker Change: Great. Thank you for taking my questions.
Unknown Executive: Thank you for taking my questions. Thanks, Justin. Thank you, Justin.
Speaker Change: Thanks, Jonathan.
Justin Bergner: Bye.
Speaker Change: Thank you Justin.
Bascome Majors: And it looks like we've got another question from Basquam Majors with Susquehana International Group. Basquam, please go ahead.
Bascome Majors: And it looks like we've got another question from Bascome Majors with Susquehanna International Group.
Speaker Change: And it looks like we've got another question from Vasco majors with Susquehanna discuss excuse me Susquehanna International Group. Please go ahead.
Bascome Majors: Bascome, please go ahead. Thank you for the follow-up. Two questions, how far are you through repricing? North American Fleet at call it 22 or later level.
Bascome Majors: Thank you for the follow-up.
Speaker Change: Thank you for the follow up.
Bascome Majors: Just two questions. How far are you through repricing the North American fleet at, call it, 22 or later levels? And just high level, I know you haven't gotten through your budgeting period yet.
Speaker Change: Just two questions how far are you through repricing, the North American fleet call. It 22 or later levels.
Robert Lyons: High level, I know you haven't gotten through your budgeting period yet. Any puts and takes as we think about. Yeah, Bascome is Bob, it's about half, roughly, that is renewed at, you know, since the pricing environment shifted to the positive side in 2022. So about half to go.
Just high level I know you haven't gotten through your budgeting period yet.
Bascome Majors: But any puts and takes as we think about sending expectations for 2025. Thank you.
Speaker Change: But any puts and takes as we think about.
Setting expectations for 2025, thank you.
Robert Lyons: Yeah, Basquam is Bob. It's about half, roughly. That is renewed since the pricing environment shifted to the positive side in 2022. So about half to go.
Bob Lyons: Yes, Bascom, it's Bob it's about half.
Bob Lyons: Roughly that is renewed.
Bob Lyons: Since the pricing environment shifted to the positive side in 2022.
Bob Lyons: Yeah.
Bob Lyons: So about half to go.
Bob Lyons: <unk>.
Robert Lyons: And with regards to 2025, you know, we'll come back, obviously, in the beginning of January in January with a full outline and segment by segment run through and some of the key line items. So we'll do that again for you in January. But in general, I'd say we're very encouraged by the environment we're in right now. You know, the pricing environment, lease pricing environment and rail North America remains in a real good spot. And as long as we don't see any irrational behavior on the supply side, we would expect that to continue.
Robert Lyons: And with regards to 2025, you know, we'll come back obviously in the beginning of January or in January with a full outline and segment-by-segment run through and some of the key lion items. So we'll do that again for in January. But in general, I'd say we're very encouraged by the environment we're in right now. You know, the pricing environment, the least pricing environment in real North America remains in a real good spot. And as long as we don't see any irrational behavior on the supply side, we would expect that to continue. And if you look at GATX overall, you know, roughly 55-60% of our total segment profit is in North America and the balance is in international markets.
Bob Lyons: And with regards to 2025, we will come back obviously at the beginning of January in January with a full outline and segment by segment run through on some of the key line items. So we'll do that again for you in January but in general I'd say, we're very encouraged by the environment. We're in right now.
Bob Lyons: The pricing environment.
Bob Lyons: Lease pricing environment in rail North America remains in a real good spot.
And as long as we don't see any irrational behavior on the supply side, we would expect that to continue.
Robert Lyons: And if you look at GATX overall... You know, roughly 55 60% of our total segment profit is in North America and the balance is in international markets. So our international businesses continue to grow. and we like the position we're in and all of those and the recovery and engine leasing has been More dramatic than probably anybody anticipated just a few years ago, but it's a testament to our team at RRPF and the folks at Rolls-Royce who have partnered with us. We partner with them, and they've done an excellent job managing that portfolio, so we feel good about that as well.
Bob Lyons: And if you look at Gatx's overall.
Bob Lyons: Roughly $55, 60% of our total segment profit is in North America, and the balances in the international market. So our international businesses continue to grow.
Robert Lyons: So our international businesses continue to grow. And we like the position we're in, and all of those, and the recovery and engine leasing has been more dramatic than probably anybody anticipated just a few years ago. But it's a testament to our team at RRPF and the folks at Rolls-Royce who have partnered with us. We partner with them, and they've done an excellent job managing that portfolio. So we feel good about that as well.
Bob Lyons: And we like the position, we're in and all of those and the recovery in engine leasing has been.
Bob Lyons: More dramatic than probably anybody anticipated just a few years ago.
Bob Lyons: But it's a testament to our team at <unk> and the folks at Rolls Royce who.
Bob Lyons: We have partnered with US we partner with them and they've done an excellent job managing that portfolio. So we feel good about that as well.
Bascome Majors: Thank you.
Bob Lyons: Thank you.
Unknown Executive: All right, thanks, Baskam. And one last call out for questions. Once again, star one on your telephone keypad. Once again, star one, going once, going twice.
Unknown Executive: All right, thanks, Bascom. And one last call out for questions. Once again, star one on your telephone keypad. Once again, star one. going once. going twice.
Speaker Change: Alright, Thanks Bascom.
Speaker Change: And one last call up for questions. Once again star one on your telephone keypad once again star one.
Speaker Change: Going once.
Speaker Change: Going twice.
Unknown Executive: All right, doesn't look like we have any further questions.
Shari Hellerman: All right, doesn't look like we have any further questions, so I will now turn the call back over to Shari Hellerman. Shari, the floor is yours. I'd like to thank everyone for their participation on the call this morning.
Speaker Change: Alright, it doesn't look like we have any further questions. So I will now turn the call back over to Sherri Hellerman Sherry the floor is yours.
Shari Hellerman: So I will now turn the call back over to Sherry Hellerman. Sherry, the floor is yours. I'd like to thank everyone for their participation on the call this morning.
Sherri 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.
Shari Hellerman: Please contact me with any follow-up questions.
Shari Hellerman: Please contact me with any follow-up questions. Thank you.
Unknown Executive: Thank you. Thanks, Shari.
Unknown Executive: Thanks, Sherry, and ladies and gentlemen.
Shari Hellerman: Thanks, Jerry and ladies and gentlemen.
Unknown Executive: And ladies and gentlemen, that concludes today's call. Thank you for joining us. And you may now disconnect. Have a good day, everyone.
Unknown Executive: That concludes today's call. Thank you for joining us, and you may now disconnect. Have a good day, everyone.
Shari Hellerman: Includes today's call. Thank you for joining us and you may now disconnect have a good day everyone.
Shari Hellerman: [music].
Shari Hellerman: Okay.
Shari Hellerman: Okay.
Shari Hellerman: Sure.
Shari Hellerman: [music].
Okay.
Shari Hellerman: [music].
Shari Hellerman: Okay.
Shari Hellerman: Yes.
Shari Hellerman: Thank you.
Shari Hellerman: [music].
Shari Hellerman: Yeah.
Shari Hellerman: Yes.
Unknown Executive: I don't know if it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true, but it's true.
Shari Hellerman: [music].