GATX CORP (GATX)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of GATX Corporation ("GATX", the "Company," "we," "us," "our," and similar terms) should be read in conjunction with our consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report, our Annual Report on Form 10-K for the year ended December 31, 2025, and in our other filings with the Securities and Exchange Commission ("SEC"). We based the discussion and analysis that follows on financial data we derived from the financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and on certain other financial data that we prepared using non-GAAP components. For a reconciliation of these non-GAAP measures to the most comparable GAAP measures, see "Non-GAAP Financial Measures" at the end of this Item. The discussion and analysis below includes forward-looking statements that are subject to risks, uncertainties and other factors described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025 that could cause actual results to differ materially from such forward-looking statements. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

OVERVIEW

We lease, operate, manage, and remarket long-lived, widely used assets, primarily in the rail market. We report our financial results through three primary business segments: Rail North America, Rail International, and Engine Leasing. Financial results for our tank container leasing business ("Trifleet") are reported in the Other segment.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results we may achieve for the entire year ending December 31, 2026. In particular, asset remarketing income does not occur evenly throughout the year. For more information, refer to the consolidated financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2025.

On January 1, 2026, GATX acquired approximately 101,000 railcars for $4.2 billion from Wells Fargo Bank, N.A. ("Wells Fargo") through a newly formed joint venture ("GABX" or the "GABX joint venture") with Brookfield Infrastructure Partners L.P. and its institutional partners (collectively, "Brookfield"). Initially, GATX's ownership share of GABX is 30% with Brookfield's share at 70%. GATX will have the option to acquire up to 100% of GABX's equity over time. See "Note 15. Non-Controlling Interest" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information about the options to acquire GABX's equity. The transaction was partially funded through a $2.96 billion term loan executed by GABX, which is guaranteed by GATX. As of March 31, 2026, GABX is consolidated and is reported in the Rail North America segment. GATX also directly purchased approximately 200 locomotives from Wells Fargo for approximately $30.4 million, and Brookfield directly acquired Wells Fargo’s rail finance lease portfolio, consisting of approximately 22,000 railcars and approximately 400 locomotives. GATX serves as manager of the railcars in GABX as well as the finance lease portfolio directly owned by Brookfield and earns management fees for such services. See "Note 1. Description of Business" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Economic Conditions

GATX, and markets more broadly, are facing heightened uncertainty related to trade policy, geopolitical tensions, and overall economic conditions. These conditions did not have a significant impact on our business and financial results during the first three months of 2026. However, recent developments, including newly announced tariffs and the ongoing conflict with Iran, have increased economic uncertainty and could have a more significant impact on GATX’s financial results in the future. For example, geopolitical tensions in the Middle East could increase energy prices, disrupt supply chains, reduce global air travel, and negatively impact our customers. A sustained economic slowdown resulting from these or other factors could impact GATX directly and indirectly, including through higher costs for new railcars or other assets or softening demand for our products and services. Management continues to monitor the macroeconomic and geopolitical environment closely to identify potential risks and to manage our business accordingly. However, we believe we are in a strong position to manage these risks due to our diverse fleet, broad global customer base, long-term lease portfolio, strong balance sheet, and access to capital.

DISCUSSION OF OPERATING RESULTS

Net income attributable to GATX for the three months ended March 31, 2026 was $85.5 million, or $2.35 per diluted share, compared to $78.6 million, or $2.15 per diluted share, for the same period in 2025. Net income attributable to GATX increased $6.9 million compared to the prior year and was impacted by the Wells Fargo rail assets acquisition. The variance was largely due to higher revenue at Rail North America and Rail International and higher net gain on asset dispositions at Rail North America, partially offset by higher maintenance expense and depreciation expense at Rail North America, higher interest expense, and lower earnings at the Rolls-Royce & Partners Finance joint ventures (collectively, the "RRPF affiliates").

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The following table shows a summary of our reporting segments and consolidated financial results (in millions, except per share data):

The following table shows our return on equity for the trailing 12 months ended March 31:

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(1)    See "Non-GAAP Financial Measures" at the end of this Item for further details.

Segment Operations

Segment profit is an internal performance measure reported to GATX's President and Chief Executive Officer for purposes of assessing performance and allocating capital and resources to each segment. Segment profit includes all revenues, expenses, pre-tax earnings from affiliates, and net gains on asset dispositions that are directly attributable to each segment. We allocate interest expense to the segments based on what we believe to be the appropriate risk-adjusted borrowing costs for each segment. Segment profit excludes selling, general and administrative expenses, income taxes, and certain other amounts not allocated to the segments.

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RAIL NORTH AMERICA

Segment Summary

On January 1, 2026, GATX acquired approximately 101,000 railcars for $4.2 billion from Wells Fargo through the GABX joint venture. GABX is consolidated within the Rail North America segment. See "Note 7. Variable Interest Entities" in Part I, Item 1 of this Quarterly Report on Form 10-Q for quantification of the impacts of this acquisition. On the same date, GATX directly purchased 200 locomotives from Wells Fargo for approximately $30.4 million.

GATX serves as manager of the railcars in GABX as well as the finance lease portfolio directly owned by Brookfield and earns management fees for such services. In the three months ended March 31, 2026, GABX paid GATX $12.5 million and Brookfield paid GATX $2.8 million in management fees for these services. GABX management fees earned by GATX are eliminated in consolidation and not shown on the face of the consolidated income statement. However, the impact of fees earned are included in net income attributable to GATX. Management fees earned by GATX for managing the finance lease portfolio directly owned by Brookfield are reported in other revenue.

Demand for most railcars was stable, despite ongoing macroeconomic uncertainty and the impacts of the geopolitical environment in the Middle East, and the renewal success rate remained strong. Utilization was 98.1% at the end of the current quarter.

The following table shows Rail North America's segment results (in millions):

The following table shows the components of Rail North America's lease revenue (in millions):

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Rail North America Fleet Data

The following table shows fleet activity and statistics for Rail North America railcars, excluding boxcars, for the quarter ended:

_________

(1)    Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.

(2)    The renewal success rate represents the percentage of railcars on expiring leases that were renewed with the existing lessee. The renewal success rate is an important metric because railcars returned by our cus

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of GATX Corporation ("GATX", the "Company," "we," "us," "our," and similar terms) should be read in conjunction with the audited financial statements included in "Item 8. Financial Statements and Supplementary Data" in this Form 10-K. We based the discussion and analysis that follows on financial data we derived from the financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and on certain other financial data that we prepared using non-GAAP components. For a reconciliation of these non-GAAP measures to the most comparable GAAP measures, see “Non-GAAP Financial Measures” at the end of this Item. This discussion does not include the comparison of prior year 2024 to 2023 financial results, which can be found in the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 19, 2025.

OVERVIEW

We lease, operate, manage, and remarket long-lived, widely used assets, primarily in the rail market. We report our financial results through three primary business segments: Rail North America, Rail International, and Engine Leasing. Financial results for our tank container leasing business ("Trifleet") are reported in the Other segment.

On May 29, 2025, GATX entered into a definitive agreement to acquire railcars from Wells Fargo Bank, N.A. ("Wells Fargo") through a newly formed joint venture ("GABX" or the "GABX joint venture") with Brookfield Infrastructure Partners L.P. and its institutional partners (collectively, “Brookfield”). The transaction formally closed on January 1, 2026 and consisted of approximately 101,000 railcars for approximately $4.2 billion. Initially, GATX's ownership share of GABX is 30%, with Brookfield's share at 70%. GATX will have the option to acquire up to 100% of GABX's equity over time. GATX also agreed to directly purchase approximately 200 locomotives from Wells Fargo for approximately $30.4 million, and Brookfield agreed to directly acquire Wells Fargo’s rail finance lease portfolio. GATX will serve as manager of the railcars in GABX as well as the finance lease portfolio directly owned by Brookfield. In anticipation of the closing of the transaction, on December 31, 2025, GATX contributed equity of $385.3 million to GABX, Brookfield contributed equity of $899.0 million to GABX, and GABX executed a $2.96 billion term loan to fund the acquisition. GATX has guaranteed GABX's debt financing obligations. During 2025, GABX entered into deal contingent interest rate swaps in order to hedge the exposure on its anticipated debt financing. As of December 31, 2025, GABX is consolidated and is reported in the Rail North America segment, and its operations will be reflected within that segment for reporting periods after the closing of the transaction. See "Note 26. Subsequent Events" in Part II, Item 8 of this Form 10-K for further information.

In the fourth quarter of 2025, GATX Rail Europe acquired 5,882 railcars from DB Cargo AG. The acquisition was an opportunity to grow and diversify the GRE fleet by adding a mix of favorable model types.

In 2023, we sold our rail business in Russia ("Rail Russia"). Financial results were not material to our operations.

In 2023, we sold the three remaining liquefied gas-carrying vessels (the "Specialized Gas Vessels") within the Engine Leasing segment.

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DISCUSSION OF OPERATING RESULTS

The following table shows a summary of our reporting segments and consolidated financial results for the years ended December 31 (dollars in millions, except per share data):

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(1) See "Non-GAAP Financial Measures" at the end of this Item for further details.

2025 Summary

Net income attributable to GATX was $333.3 million, or $9.12 per diluted share, for 2025 compared to $284.2 million, or $7.78 per diluted share, for 2024, and $259.2 million, or $7.12 per diluted share, for 2023. Results for 2025 included a net positive impact of $13.5 million ($0.37 per diluted share) from tax adjustments and other items, compared to a net negative impact of $3.9 million ($0.11 per diluted share) from tax adjustments and other items in 2024 and a net positive impact of $1.6 million ($0.05 per diluted share) from tax adjustments and other items in 2023 (see "Non-GAAP Financial Measures" at the end of this Item for further details).

•At Rail North America, segment profit in 2025 was lower than prior year. The decrease was primarily attributable to higher maintenance and interest expenses, partially offset by higher lease revenue and higher repair revenue.

•At Rail International, segment profit in 2025 was higher than prior year, primarily due to higher lease revenue and changes in foreign currency exchange rates, partially offset by higher interest expense.

•At Engine Leasing, segment profit in 2025 increased compared to prior year, a result of higher earnings at the RRPF affiliates and GEL.

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•Within Other, Trifleet's segment profit decreased, largely due to changes in foreign exchange rates, lower lease revenue, resulting from lower utilization, and higher interest expense, partially offset by lower bad debt expense resulting from the absence of a settlement and restructuring agreement with a customer recorded in the prior year.

Total investment volume was $1,316.7 million in 2025, compared to $1,674.4 million in 2024, and $1,665.0 million in 2023.

2026 Outlook

Conditions in the North American railcar leasing market were stable in 2025, and we expect generally similar conditions in 2026. At Rail International, we expect stable demand for most railcar types in Europe, although economic headwinds will present challenges in certain car types. We expect economic growth in India will support growing demand for railcars. The operating environment for our engine leasing businesses at RRPF and GEL is strong, as global air travel trends are positive, and long lead times for delivery of new engines and repair services are driving solid demand for existing assets. We have a strong balance sheet and adequate access to capital, which we believe positions us well to manage our transportation assets based on current market conditions.

•We expect Rail North America's segment profit in 2026 to increase from 2025. Generally, lease rates for railcars scheduled to renew in 2026 will likely be higher than expiring rates for most car types as the lease rate environment for existing railcars is expected to remain stable. Our fleet is highly diversified across car types, customers, and commodities, and broadly we see stable demand for railcars in 2026. For certain of our most economically sensitive car types, we are anticipating a more challenging commercial environment. Across the entire fleet, we expect that increasing lease rates, along with new railcar additions and the impact of the Wells Fargo rail acquisition, will generate higher lease revenue in 2026. We anticipate that remarketing income, driven by strong secondary market conditions and increased asset sales activity given our larger North American fleet, will be higher in 2026. Ownership costs, comprised of interest and depreciation, and maintenance expense will be higher in 2026, primarily due to the impact of the Wells Fargo rail acquisition.

•Rail International's segment profit in 2026 is expected to increase from 2025, driven by continued growth of the fleet sizes in Europe and India, as well as favorable foreign currency impacts compared to 2025. Demand for most railcar types in Europe should remain stable, and we plan to continue to invest in the fleet. In India, we anticipate significant growth again in our fleet this coming year, which will also contribute to an increase in segment profit.

•We anticipate Engine Leasing's segment profit in 2026 to be higher than 2025. RRPF's results are expected to be higher as a result of continued growth in global air travel. Additionally, long lead times for delivery of new engines and repair services are driving strong demand for existing assets. GEL results are expected to benefit from these same factors.

Segment Operations

Segment profit is an internal performance measure reported to GATX's President and Chief Executive Officer for purposes of assessing performance and allocating capital and resources to each segment. Segment profit includes all revenues, expenses, pre-tax earnings from affiliates, and net gains on asset dispositions that are directly attributable to each segment. We allocate interest expense to the segments based on what we believe to be the appropriate risk-adjusted borrowing costs for each segment. Segment profit excludes selling, general and administrative expenses, income taxes, and certain other amounts not allocated to the segments.

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RAIL NORTH AMERICA

Segment Summary

Demand for most railcars was stable during the year, despite ongoing macroeconomic uncertainty, and the renewal success rate remained strong. Utilization of our non-boxcar fleet was 99.0% at the end of the year.

The following table shows Rail North America's segment results for the years ended December 31 (in millions):

The following table shows the components of Rail North America's lease revenue for the years ended December 31 (in millions):

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Rail North America Fleet Data

The following table shows fleet activity and statistics for Rail North America railcars, excluding boxcars, for the years ended December 31:

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(1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.

(2) The renewal success rate represents the percentage of railcars on expiring leases that were renewed with the existing lessee. The renewal success rate is an important metric because railcars returned by our customers may remain idle or incur additional maintenance and freight costs prior to being leased to new customers.

(3) Active railcars refers to the number of railcars on lease to customers. Changes in railcars on lease compared to prior years are impacted by the utilization of new railcars purchased from builders or in the secondary market and the disposition of railcars that were sold or scrapped, as well as the fleet utilization rate.

(4) Average active railcars for the year is calculated using the number of active railcars at the end of each month.

As of December 31, 2025, leases for approximately 13,700 tank and freight cars and approximately 1,100 boxcars are scheduled to expire in 2026. These amounts exclude railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.

In 2022, we entered into a long-term railcar supply agreement with a subsidiary of Trinity Industries, Inc. ("Trinity") to purchase 15,000 newly built railcars through 2028, with an option to order up to an additional 500 railcars each year from 2023 to 2028. The agreement enables us to order a broad mix of tank and freight cars. Trinity is scheduled to deliver 6,000 tank cars (1,200 per year) from 2024 through 2028. The remaining 9,000 railcars, which can be a mix of freight and tank cars, are expected to be ordered at a rate of 1,500 railcars per order year from 2023 to 2028 and delivered under a schedule to be determined. At December 31, 2025, 8,133 railcars have been ordered pursuant to the terms of the agreement, of which 5,720 have been delivered.

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Lease Price Index

Our Lease Price Index ("LPI") is an internally-generated business indicator that measures renewal activity for our North American railcar fleet, excluding boxcars. The LPI calculation includes all renewal activity based on a 12-month trailing average, and the renewals are weighted by the count of all renewals over the 12-month period. The average renewal lease rate change is reported as the percentage change between the average renewal lease rate and the average expiring lease rate. The average renewal lease term is reported in months and reflects the average renewal lease term in the LPI.

During 2025, the renewal rate change of the LPI was positive 21.9%, compared to positive 26.7% in 2024. Lease terms on renewals for railcars in the LPI averaged 58 months in 2025 compared to 60 months in 2024.

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The following table shows fleet activity and statistics for Rail North America boxcars for the years ended December 31:

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(1) Utilization is calculated as the number of boxcars on lease as a percentage of total boxcars in the fleet.

(2) Active boxcars refers to the number of boxcars on lease to customers. Changes in boxcars on lease compared to prior years are impacted by the utilization of new boxcars purchased from builders or in the secondary market and the disposition of boxcars that were sold or scrapped, as well as the fleet utilization rate.

(3) Average active boxcars for the year is calculated using the number of active boxcars at the end of each month.

The following table shows fleet activity and statistics for Rail North America locomotives for the years ended December 31:

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(1) Utilization is calculated as the number of locomotives on lease as a percentage of total locomotives in the fleet.

(2) Active locomotives refers to the number of locomotives on lease to customers. Changes in locomotives on lease compared to prior years are impacted by the utilization of locomotives purchased in the secondary market and the disposition of locomotives that were sold or scrapped, as well as the fleet utilization rate.

(3) Average active locomotives for the year is calculated using the number of active locomotives at the end of each month.

Comparison of Reported Results

Segment Profit

In 2025, segment profit of $351.8 million decreased 1.2% compared to $356.0 million in 2024. The decrease was driven by higher maintenance and interest expenses, partially offset by higher lease revenue and higher repair revenue.

Revenues

In 2025, lease revenue increased $65.6 million, or 6.7%, driven by more railcars on lease and higher lease rates. Other revenue increased $21.8 million, primarily due to higher repair revenue and higher lease termination fees.

Expenses

In 2025, maintenance expense increased $43.6 million, driven by more repair events, including more repairs performed by the railroads, and a mix of repairs that resulted in higher costs per repair. Depreciation expense increased $14.6 million, due to the timing of new railcar investments and dispositions. Other operating expense increased $4.7 million, due to higher insurance, switching, and freight costs.

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Other Income (Expense)

In 2025, net gain on asset dispositions decreased $2.8 million, driven by lower net gains on asset dispositions, partially offset by higher net scrapping gains. The amount and timing of disposition gains is dependent on a number of factors and may vary materially from year to year. Net interest expense increased $27.4 million, due to a higher average debt balance and a higher average interest rate. Other expense increased $3.3 million, driven by higher net legal costs and lower customer settlement proceeds received in 2025.

Investment Volume

During 2025, investment volume was $644.1 million, compared to $1,162.4 million in 2024. We acquired 2,302 newly built railcars and purchased 1,035 railcars in the secondary market in 2025 compared to 3,812 newly built railcars, 2,279 railcars in the secondary market, and 156 locomotives in the secondary market in 2024.

Our investment volume is predominantly composed of acquired railcars, but also includes the acquisition of locomotives and certain capitalized repairs and improvements to owned railcars and our maintenance facilities. As a result, the dollar value of investment volume does not necessarily correspond to the number of railcars acquired in any given period. In addition, the comparability of amounts invested and the number of railcars acquired in each period is impacted by the mix of railcars purchased, which may include tank cars and freight cars, as well as newly manufactured railcars or those purchased in the secondary market.

RAIL INTERNATIONAL

Segment Summary

Within Rail International, GATX Rail Europe ("GRE") experienced a challenging railcar leasing market as GRE faced macroeconomic headwinds, including weak GDP results. This uncertainty caused some customers to take a cautionary approach to rail fleet planning, thereby tempering demand across certain car types.

Despite pressure on utilization, GRE experienced renewal lease rate increases for a majority of railcar types in 2025. Utilization was 94.7% at the end of the year.

In the fourth quarter of 2025, GRE acquired 5,882 railcars from DB Cargo AG.

The fleet size of our rail business in India ("Rail India") continued to grow in 2025, as Rail India continued to focus on investment opportunities, diversification of its fleet, and developing relationships with customers, suppliers and the Indian Railways. Demand for railcars in India remained strong, driven by continued growth in the economy and infrastructure development. Utilization was 100.0% at the end of the year.

In 2023, we sold Rail Russia. Financial results were not material to Rail International's segment profit.

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The following table shows Rail International's segment results for the years ended December 31 (in millions):

GRE Fleet Data

The following table shows fleet activity and statistics for GRE railcars for the years ended December 31:

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(1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.

(2) Active railcars refers to the number of railcars on lease to customers. Changes in railcars on lease compared to prior years are impacted by the utilization of newly built railcars, railcars purchased in the secondary market, and the disposition of railcars that were sold or scrapped, as well as the fleet utilization rate.

(3) Average active railcars for the year is calculated using the number of active railcars at the end of each month.

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As of December 31, 2025, leases for approximately 10,700 railcars are scheduled to expire in 2026. This amount excludes railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.

Rail India Fleet Data

The following table shows fleet activity and statistics for Rail India railcars for the years ended December 31:

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(1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.

(2) Active railcars refers to the number of railcars on lease to customers. Changes in railcars on lease compared to prior years are impacted by the utilization of newly built railcars and the disposition of railcars that were sold or scrapped, as well as the fleet utilization rate.

(3) Average active railcars for the year is calculated using the number of active railcars at the end of each month.

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Comparison of Reported Results

Foreign Currency

Rail International's reported results of operations are impacted by fluctuations in the exchange rates of the U.S. dollar versus the foreign currencies in which it conducts business, primarily the euro. In 2025, fluctuations in the value of the euro, relative to the U.S. dollar, positively impacted lease revenue by approximately $13.7 million and positively impacted segment profit, excluding other (expense) income, by approximately $7.0 million compared to 2024.

Segment Profit

In 2025, segment profit of $125.9 million increased 5.1% compared to $119.8 million in 2024. The increase was primarily due to higher lease revenue and changes in foreign exchange rates, partially offset by higher interest expense.

Revenues

In 2025, lease revenue increased $32.5 million, or 9.7%, due to more railcars on lease and higher lease rates at GRE and Rail India, as well as the impact of foreign exchange rates.

Expenses

In 2025, maintenance expense increased $1.7 million, primarily due to more repair events, higher costs of repairs, and the impact of foreign currency exchange rates, partially offset by lower wheelset costs. Depreciation expense increased $11.8 million, due to the impact of new railcars added to the fleet.

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Other Income (Expense)

In 2025, net gain on asset dispositions increased $2.3 million, driven by more railcars sold and higher net scrapping gains due to more railcars scrapped. Net interest expense increased $11.2 million, due to a higher average debt balance and a higher average interest rate. Other (expense) income was unfavorable by $7.1 million, driven by the negative impact of changes in foreign exchange rates, primarily euro-zloty fluctuations, and higher litigation costs.

Investment Volume

During 2025, investment volume was $502.4 million, compared to $232.9 million in 2024. In 2025, GRE acquired 1,616 newly built railcars and purchased 5,882 railcars in the secondary market compared to 1,316 newly built railcars in 2024, and Rail India acquired 1,582 newly built railcars in 2025 compared to 1,783 newly built railcars in 2024.

Our investment volume is predominantly composed of acquired railcars, but may also include certain capitalized repairs and improvements to owned railcars. As a result, the dollar value of investment volume does not necessarily correspond to the number of railcars acquired in any given period. In addition, the comparability of amounts invested and the number of railcars acquired in each period is impacted by the mix of the various railcar types acquired as well as fluctuations in the exchange rates of the foreign currencies in which Rail International conducts business.

ENGINE LEASING

Segment Summary

Engine Leasing includes the RRPF affiliates, a group of 50% owned domestic and foreign joint ventures with Rolls-Royce plc or affiliates thereof (collectively "Rolls-Royce"), a leading manufacturer of commercial aircraft jet engines. Segment profit included earnings from the RRPF affiliates of $157.2 million for 2025, $108.3 million for 2024, and $98.7 million for 2023. In 2025, the RRPF affiliates recorded income from insurance recoveries related to aircraft spare engines. GATX's 50% share of this recovery was $23.4 million ($17.5 million after-tax), of which $15.3 million ($11.5 million after-tax) was previously recorded as an impairment loss. GATX did not make any additional investment in the RRPF affiliates in 2025, 2024, or 2023. Dividend distributions from the RRPF affiliates totaled $50.0 million in 2025, $50.0 million in 2024, and $25.0 million in 2023. The operating environment for the RRPF affiliates continued to be favorable as robust global passenger air travel continued to drive strong demand for aircraft spare engines.

Engine Leasing also includes GATX Engine Leasing ("GEL"), our wholly owned entity that invests directly in aircraft spare engines. In 2025, GEL acquired seven engines for $147.1 million, all of each were placed on long-term leases directly with a customer. As of December 31, 2025, GEL owned 46 aircraft spare engines, with 21 on long-term leases with airline customers and 25 that are employed in an engine capacity agreement with Rolls-Royce for use in its engine maintenance programs. All engines at GEL are managed by the RRPF affiliates, for which we paid them a fee of $5.6 million in 2025, $4.1 million in 2024 and $2.7 million in 2023.

Engine Leasing previously owned the Specialized Gas Vessels. In 2022, we made the decision to sell the Specialized Gas Vessels. In 2023, we sold the remaining three vessels and recorded net losses of $4.0 million. In 2024, we recorded final gains of $0.6 million associated with the Specialized Gas Vessels.

In 2023, Engine Leasing sold its natural gas holdings and recorded a gain of $5.7 million.

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The following table shows Engine Leasing’s segment results for the years ended December 31 (in millions):

The following table shows the net book value of Engine Leasing’s assets as of December 31 (in millions):

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RRPF Affiliates' Portfolio Data

The following table shows portfolio activity and statistics for the RRPF affiliates' aircraft spare engines for the years ended December 31:

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(1) Utilization is calculated as the number of engines on lease as a percentage of total engines in the fleet.

(2) Average leased engines for the year is calculated using the number of leased engines at the end of each month.

GEL Portfolio Data

The following table shows portfolio activity for GEL's aircraft spare engines for the years ended December 31:

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Comparison of Reported Results

Segment Profit

In 2025, segment profit was $181.5 million compared to $117.3 million in 2024. Segment profit in 2025 included $23.4 million from insurance recoveries at the RRPF affiliates, of which $15.3 million was previously recorded as an impairment loss, as noted above. Segment profit in 2024 included $0.6 million of gains associated with the sale of the Specialized Gas Vessels, as noted above. Excluding the impact of these items, results for Engine Leasing were $41.4 million higher than 2024, driven by higher earnings at the RRPF affiliates and GEL.

Revenues

In 2025, lease revenue increased $5.8 million, driven by aircraft spare engines acquired in 2025 and placed on leases directly with airline customers. Non-dedicated engine revenue increased $22.1 million, due to aircraft spare engines acquired in 2024 and 2025 and utilized in the engine capacity agreement with Rolls-Royce.

Expenses

In 2025, depreciation expense increased $1.9 million, due to aircraft spare engines acquired in 2024 and 2025, partially offset by the impact of an increase in the useful lives of certain engines.

Other Income (Expense)

In 2025, net gain on asset dispositions decreased by $0.6 million, driven by the absence of gains recorded in 2024 associated with the Specialized Gas Vessels. Net interest expense increased $7.8 million, due to a higher average debt balance and a higher average interest rate.

In 2025, income from our share of affiliates' earnings increased $48.9 million, driven by higher income from operations. Higher income from operations was primarily due to more aircraft spare engines in the fleet and the income from insurance recoveries, as noted above, partially offset by higher interest and maintenance expense. The amount and timing of remarketing income is dependent on a number of factors and may vary materially from year to year.

Investment Volume

Investment volume was $147.1 million in 2025, compared to $260.8 million in 2024. GEL acquired seven aircraft spare engines in 2025 that were placed on long-term leases directly with a customer and ten aircraft spare engines in 2024 that were employed in the engine capacity agreement with Rolls-Royce.

OTHER

Other comprises our Trifleet business, as well as selling, general and administrative expenses ("SG&A"), unallocated interest expense, miscellaneous income and expense not directly associated with the reporting segments, and certain eliminations.

In 2025, GATX recorded $6.5 million of expenses associated with the acquisition of Wells Fargo's rail assets. These expenses were recorded in SG&A.

In addition, a customer sold its interest in a nuclear power plant facility for which GATX previously managed the lease, and GATX received $7.4 million of residual sharing proceeds as part of a previously agreed upon residual sharing arrangement. This income was recorded in Other income (expense), including eliminations.

In 2024, GATX recorded settlement expenses of $3.3 million for litigation claims arising out of legacy business operations and reserves of $10.7 million for its share of anticipated environmental remediation costs arising out of prior operations and legacy businesses. The majority of the recorded reserves relate to a facility that GATX sold in 1974, while the remainder of the amount relates to a landfill that GATX entities previously utilized, which was closed in 1986. These items were recorded in Other income (expense), including eliminations.

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The following table shows components of Other for the years ended December 31 (in millions):

Trifleet Summary

The tank container leasing market remained challenging in 2025, due to macro-economic headwinds, impacting customers' procurement decisions. Utilization was 84.9% at December 31, 2025.

Trifleet Tank Container Data

The following table shows fleet statistics for Trifleet's owned and managed tank containers for the years ended December 31:

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(1) Utilization is calculated as the number of tank containers on lease as a percentage of total tank containers in the fleet.

SG&A, Unallocated Interest and Other

SG&A increased $16.3 million in 2025, driven by higher employee-related expenses, including higher share-based compensation expense, and the expenses associated with the acquisition of Wells Fargo's rail assets noted above, partially offset by lower information technology expense.

Unallocated interest income (the difference between external interest expense and interest expense allocated to the reporting segments) in any year is affected by our consolidated leverage position, the timing of debt issuances and investing activities, and intercompany allocations.

Other income (expense), including eliminations, was favorable by $21.0 million in 2025 compared to 2024. The variance was driven by the absence of environmental reserves and expenses related to litigation claims settlements recorded in the prior year and residual sharing proceeds received in the current year, as noted above.

Consolidated Income Taxes

See "Note 13. Income Taxes" in Part II, Item 8 of this Form 10-K for additional information on income taxes.

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CHANGE IN NET OPERATING ASSETS AND FACILITIES

The following table shows changes in net operating assets and facilities as of December 31 (in millions):

CASH FLOW DISCUSSION

We generate a significant amount of cash from operating activities and investment portfolio proceeds. We also access domestic and international capital markets by issuing debt. We use these resources, along with available cash balances, to fulfill our debt, lease, and dividend obligations, to support our share repurchase programs, and to fund portfolio investments and capital additions. We primarily use cash from operations to fund daily operations. The timing of asset dispositions and changes in working capital impact cash flows from portfolio proceeds and operations. As a result, these cash flow components may vary materially from year to year.

As of December 31, 2025, we had an unrestricted cash balance of $743.0 million and a restricted cash balance of $4,241.9 million. Our restricted cash primarily related to cash held in escrow on behalf of GABX as of December 31, 2025 to be used for the acquisition of Wells Fargo's rail assets. We also have a $632 million, 5-year unsecured revolving credit facility in the United States that matures in 2030 and a $368 million 3-year unsecured revolving credit facility in the United States that matures in 2028, both of which were fully available as of December 31, 2025. In addition, we have a €250 million, 3-year unsecured revolving credit facility in Europe that matures in 2027, of which, €190 million was available as of December 31, 2025. For GABX specifically, we have a $250 million 5-year unsecured revolving credit facility in the United States that matures in 2030, all of which was fully available as of December 31, 2025.

The following table shows our cash flows from operating, investing and financing activities for the years ended December 31 (in millions):

Net Cash Provided by Operating Activities

Net cash provided by operating activities in 2025 of $648.1 million increased $46.0 million compared to 2024. Comparability among reporting periods is impacted by the timing of changes in working capital items. Specifically, higher cash receipts from revenue, lower payments for operating leases, and lower payments for taxes were partially offset by higher cash payments for maintenance, interest, and other operating expenses.

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Net Cash Used in Investing Activities

The following table shows our principal sources and uses of cash flows from investing activities for the years ended December 31 (in millions):

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(1) Portfolio investments and capital additions primarily consist of purchases of operating assets and capitalized asset improvements. See the discussions of segment operating results sections in this Item for more detail.

(2) Portfolio proceeds primarily consist of proceeds from sales of operating assets.

(3) Short-term U.S. Treasury obligations with an original maturity date of over 90 days.

(4) Proceeds from sales of other assets for all periods were primarily related to railcar scrapping.

(5) In 2025, we purchased 802 railcars that were previously on operating leases, compared to zero such railcars in 2024.

The following table shows portfolio investments and capital additions by segment for the years ended December 31 (in millions):

The decrease in portfolio investments and capital additions of $357.7 million in the year ended December 31, 2025 was primarily due to fewer railcars and locomotives acquired at Rail North America, fewer aircraft spare engines acquired at Engine Leasing, and fewer tank containers acquired at Trifleet, partially offset by more railcars acquired at GRE. The timing of investments depends on purchase commitments, transaction opportunities, and market conditions.

Portfolio proceeds increased $44.4 million in 2025 compared to 2024, driven by more railcars and locomotives sold at Rail North America.

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Net Cash Provided by Financing Activities

The following table shows our principal sources and uses of cash flows provided by financing activities for the years ended December 31 (in millions):

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(1) In 2025, we purchased zero railcars that were previously leased, compared to 728 such railcars in 2024.

(2) During 2025, we repurchased 416,699 shares of common stock for $65.0 million, compared to 167,452 shares of common stock for $21.9 million in 2024.

The following table shows the activity on our long-term debt principal in 2025 (in millions):

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(1) Issuances include $2,959.0 million at GABX used to finance the acquisition of Wells Fargo's rail assets. The cash proceeds from this issuance are included in the restricted cash balance at December 31, 2025, as noted above.

(2) Denominated in euros, but presented in U.S. dollars in this table.

(3) Denominated in Indian rupees, but presented in U.S. dollars in this table.

See "Note 8. Debt" in Part II, Item 8 of this Form 10-K for information regarding the terms of our outstanding debt.

LIQUIDITY AND CAPITAL RESOURCES

General

We fund our investments and meet our debt, lease, and dividend obligations using our available cash balances, as well as cash generated from operating activities, sales of assets, distributions from affiliates, issuances of debt, commercial paper issuances, and committed revolving credit facilities. We primarily use cash from operations to fund daily operations. We use both domestic and international capital markets and banks to meet our debt financing needs.

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Material Cash Obligations

The following table shows our material cash obligations, including debt principal and related interest payments, lease payments, and purchase commitments at December 31, 2025 (in millions):

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(1) GABX's obligation in 2030 of $2,959.0 million is guaranteed by GATX.

(2) For floating rate debt, future interest payments are based on the applicable interest rate as of December 31, 2025.

(3) Primarily railcar purchase commitments. The amounts shown for all years are based on management's estimates of the timing, anticipated railcar types, and related costs of railcars to be purchased under its agreements. For additional details on our purchase agreements, refer to the discussion of Rail North America operating results within this Item.

Liquidity Outlook

In addition to our contractual obligations, expenditures in 2026 may also include the purchase of railcars, locomotives, tank containers, and aircraft spare engines and other discretionary capital spending for opportunistic asset purchases or strategic investments. We plan to fund these expenditures in 2026 using available cash at December 31, 2025 in combination with cash from operations, portfolio proceeds, and long-term debt issuances. We also have access to our revolving credit facilities if needed. Based on the available sources of liquidity, we also expect to meet our funding needs beyond 2026.

Contractual Cash Receipts

Information regarding our contractual cash receipts arising from future rental receipts from noncancelable operating leases and from our finance leases as of December 31, 2025 is presented in "Note 5. Leases" within Item 8 of this Form 10-K.

Debt

The following table shows the carrying value of our debt and lease obligations by major component as of December 31 (in millions):

As of December 31, 2025, our outstanding debt had a weighted-average remaining term of 8.2 years and a weighted-average interest rate of 4.78%, compared to 8.6 years and 4.59% at December 31, 2024. See "Note 8. Debt" in Part II, Item 8 of this Form 10-K.

Short-Term Borrowings and Credit Lines and Facilities

We use short-term borrowings as a source of working capital and to temporarily fund differences between our operating cash flows and portfolio proceeds, and our capital investments and debt maturities. We do not maintain or target any particular level of short-term borrowings on a permanent basis. Rather, we will temporarily utilize short-term borrowings at levels we deem appropriate until we decide to pay down these balances.

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In 2025, we increased our existing $600 million, 5-year unsecured revolving credit facility in the United States to $632 million and extended the maturity from May 2029 to May 2030. This facility contains one additional one-year extension option. As of December 31, 2025, the full $632 million was available under this facility. Additionally, we increased our existing $350 million 3-year unsecured revolving credit facility in the United States to $368 million and extended the maturity from May 2027 to May 2028. This facility contains one additional one-year extension option. As of December 31, 2025, the full $368 million was available under this facility.

In 2025, as part of the acquisition of Wells Fargo's rail assets, GABX entered into a $250 million 5-year unsecured revolving credit facility in the United States that matures in 2030. As of December 31, 2025, the full $250 million was available under this facility.

In Europe, we increased our existing €210 million 3-year unsecured revolving credit facility, expiring in December 2027, to €250 million. As of December 31, 2025, €190 million was available under this credit facility. In addition, our European subsidiaries have smaller unsecured credit facilities with an aggregate limit of €25.0 million. As of December 31, 2025, €15.0 million was available under these credit facilities, as €10.0 million ($11.7 million) was drawn. The weighted-average interest rate of these outstanding borrowings during 2025 was 3.23%.

Delayed Draw Term Loans

As of December 31, 2025, we had INR 2.0 billion ($22.3 million) available under an outstanding delayed draw term loan in India.

Restrictive Covenants

Our credit facilities and certain other debt agreements contain various restrictive covenants. See "Note 8. Debt" in Part II, Item 8 of this Form 10-K.

Credit Ratings

The global capital market environment and outlook may affect our funding options and our financial performance. Our access to capital markets at competitive rates depends on our credit rating and rating outlook, as determined by rating agencies.

The following table shows our credit rating and rating outlook as of December 31, 2025:

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Leverage

Leverage is expressed as a ratio of debt (including debt and lease obligations, net of unrestricted cash) to total equity. The following table shows the components of recourse leverage as of December 31 (in millions, except recourse leverage ratio):

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(1) Includes recourse debt, borrowings under bank credit facilities, and operating lease obligations, net of unrestricted cash.

(2) Calculated as total recourse debt / total equity.

Shelf Registration Statement

During 2025, we filed an automatic shelf registration statement that enables us to issue debt securities and pass-through certificates. The registration statement is effective for three years and does not limit the amount of debt securities and pass-through certificates we can issue.

Commercial Commitments

We have entered into various commercial commitments, including standby letters of credit, performance bonds, and guarantees related to certain transactions. These commercial commitments require us to fulfill specific obligations in the event of third-party demands. Similar to our balance sheet investments, these commitments expose us to credit, market, and equipment risk. Accordingly, we evaluate these commitments and other contingent obligations using techniques similar to those we use to evaluate funded transactions.

We are parties to standby letters of credit and performance bonds, which primarily relate to contractual obligations and general liability insurance coverages. No material claims have been made against these obligations, and no material losses are anticipated.

Our commercial commitments at December 31, 2025 are presented in "Note 15. Commercial Commitments" within Item 8 of this Form 10-K.

Defined Benefit Plan Contributions

In 2025, we contributed $2.6 million to our defined benefit pension plans and other post-retirement benefit plans. In 2026, we expect to contribute approximately $4.4 million. As of December 31, 2025, our funded pension plans in the aggregate were 108.1% funded. Additional contributions will depend primarily on plan asset investment returns and actuarial experience, and subject to the impact of these factors, we may make additional material plan contributions.

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GATX Common Stock Repurchases

On January 25, 2019, our Board of Directors approved a $300.0 million share repurchase program (the "Prior Repurchase Program"), pursuant to which we were authorized to purchase shares of our common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to Rule 10b5-1 plans. During 2025, we repurchased 416,699 shares of common stock for $65.0 million under the Prior Repurchase Program, compared to 167,452 shares repurchased for $21.9 million in 2024. As of December 31, 2025, $0.1 million remained available under the repurchase authorization.

On February 18, 2026, the Board terminated the Prior Repurchase Program and approved a new $300.0 million share repurchase program (the "New Repurchase Program"), pursuant to which we are authorized to purchase shares of our common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to Rule 10b5-1 plans. The New Repurchase Program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The timing of share repurchases will be dependent on market conditions and other factors.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our consolidated financial statements in conformity with GAAP, which requires us to use judgment in making estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses, as well as information in the related disclosures. We regularly evaluate our estimates and judgments based on historical experience, market indicators, and other relevant factors and circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Operating Assets

We state operating assets, including assets acquired under finance leases, at cost and depreciate them over their estimated economic useful lives to an estimated residual value using the straight-line method. We determine the economic useful life based on our estimate of the period over which the asset will generate revenue. For the majority of our operating assets, the economic useful life is greater than 30 years. We periodically review the appropriateness of our estimates of useful lives based on changes in economic circumstances and other factors. Changes in these estimates would result in a change in future depreciation expense.

Lease Classification

We analyze all new and modified leases to determine whether we should classify the lease as an operating or finance lease. Our lease classification analysis relies on certain assumptions that require judgment, such as the asset's fair value, the asset's estimated residual value, the interest rate implicit in the lease, and the asset's economic useful life. While most of our leases are classified as operating leases, changes in the assumptions we use could result in a different lease classification, which could change the impacts of the lease transactions on our results of operations and financial position. See "Note 5. Leases" in Part II, Item 8 of this Form 10-K.

Impairment of Long-Lived Assets

We review long-lived assets, such as operating assets, right-of-use assets, and facilities, for impairment annually, or whenever circumstances indicate that the carrying amount of those assets may not be recoverable. We evaluate the recoverability of assets to be held and used by comparing the carrying amount of the asset to the undiscounted future net cash flows we expect the asset to generate. We base estimated future cash flows on a number of assumptions, including lease rates, lease term (including renewals), operating costs, the life of the asset, and final disposition proceeds. If we determine an asset is impaired, we recognize an impairment loss equal to the amount by which the carrying amount exceeds the asset’s fair value. We classify assets we plan to sell or otherwise dispose of as held for sale, provided they meet specified accounting criteria, and we record those assets at the lower of their carrying amount or fair value less costs to sell. See "Note 10. Asset Impairments and Assets Held for Sale" in Part II, Item 8 of this Form 10-K.

Impairment of Investments in Affiliated Companies

We review the carrying amount of our investments in affiliates annually, or whenever circumstances indicate that their value may have declined. If management determines that indicators of impairment are present for an investment, we perform an analysis to estimate the fair value of that investment. Active markets do not typically exist for our affiliate investments and as a result, we may estimate fair value using a discounted cash flow analysis at the investee level, price-earnings ratios based on comparable businesses, or other valuation techniques that are appropriate for the particular circumstances of the affiliate. For all fair value estimates, we use observable inputs whenever possible and appropriate.

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Once we make an estimate of fair value, we compare the estimate of fair value to the investment’s carrying value. If the investment’s estimated fair value is less than its carrying value, then we consider the investment impaired. If an investment is impaired, we assess whether the impairment is other-than-temporary. We consider factors such as the expected operating results for the near future, the length of the economic life cycle of the underlying assets of the investee, and our ability to hold the investment through the end of the underlying assets’ useful lives to determine if the impairment is other-than-temporary. We may also consider actions we anticipate the investee will take to improve its business prospects if it seems probable the investee will take those actions. If we determine an investment to be only temporarily impaired, we do not record an impairment loss. Alternatively, if we determine an impairment is other-than-temporary, we record a loss equal to the difference between the estimated fair value of the investment and its carrying value. See "Note 6. Investments in Affiliated Companies" in Part II, Item 8 of this Form 10-K.

Impairment of Goodwill

We review the carrying amount of our goodwill annually, or if circumstances indicate an impairment may have occurred. We perform the impairment review at the reporting unit level, which is one level below an operating segment. The goodwill impairment test performed is a two-tiered approach and requires us to make certain judgments to determine the assumptions we use in the calculation. We first complete a qualitative assessment to determine if it is more likely than not that the fair value of the reporting unit exceeds its carrying value. If we determine it is more likely than not that the fair value of the reporting unit exceeds its carrying value, a quantitative assessment is performed to compare the fair to its carrying value, including goodwill. When estimating the fair value of the reporting unit, we use a discounted cash flow model and base our estimates of future cash flows on revenue and expense forecasts and include assumptions for future growth. We also consider observable multiples of book value and earnings for companies that we believe are comparable to the applicable reporting units. If the estimated fair value is less than the carrying amount, we record an impairment loss for the difference. See "Note 17. Goodwill" in Part II, Item 8 of this Form 10-K.

Pension and Post-Retirement Benefits Assumptions

We use actuarial assumptions to calculate pension and other post-retirement benefit obligations and related costs. The discount rate and the expected return on plan assets are two assumptions that influence the plan expense and liability measurement. Other assumptions involve demographic factors such as expected retirement age, mortality, employee turnover, health care cost trends, and the rate of compensation increases.

We use a discount rate to calculate the present value of expected future pension and post-retirement cash flows as of the measurement date. The discount rate is based on yields for high-quality, long-term bonds with durations similar to the projected benefit obligation. We base the expected long-term rate of return on plan assets on current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. We evaluate these assumptions annually and make adjustments as required in accordance with changes in underlying market conditions, valuation of plan assets, or demographics. Changes in these assumptions may increase or decrease periodic benefit plan expense as well as the carrying value of benefit plan obligations. See "Note 11. Pension and Other Post-Retirement Benefits" in Part II, Item 8 of this Form 10-K.

Share-Based Compensation

We grant equity awards to certain employees and non-employee directors in the form of non-qualified stock options, restricted stock units, performance shares, and phantom stock units. We recognize compensation expense for our equity awards over the applicable service period for each award, based on the award’s grant date fair value. We use the Black-Scholes options valuation model to calculate the grant date fair value of stock options. This model requires us to make certain assumptions that affect the amount of compensation expense we will record. The assumptions we use in the model include the expected stock price volatility (based on the historical volatility of our stock price), the risk-free interest rate (based on the treasury yield curve), the expected life of the equity award (based on historical exercise patterns and post-vesting termination behavior), and the dividend equivalents we expect to pay during the estimated life of the equity award since our stock options and stock appreciation rights are dividend participating. We base the fair value of other equity awards on our stock price on the grant date. We recognize forfeitures when they occur. See "Note 12. Share-Based Compensation" in Part II, Item 8 of this Form 10-K.

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Income Taxes

Our operations are subject to taxes in the United States, various states, and foreign countries, and as a result, we may be subject to audit in all of these jurisdictions. Tax audits may involve complex issues and disagreements with taxing authorities that could require several years to resolve. GAAP requires that we presume the relevant tax authority will examine uncertain income tax positions. We must determine whether, based on the technical merits of our position, it is more likely than not that our uncertain income tax positions will be sustained by taxing authorities upon examination, which may include related appeals or litigation processes. We must then evaluate income tax positions that meet the "more likely than not" recognition threshold to determine the probable amount of benefit we would recognize in the financial statements. Establishing accruals for uncertain tax benefits requires us to make estimates and assessments with respect to the ultimate outcome of tax audit issues for amounts recorded in the financial statements. The ultimate resolution of uncertain tax benefits may differ from our estimates, potentially impacting our financial position, results of operations, or cash flows.

We evaluate the need for a deferred tax asset valuation allowance by assessing the likelihood that we will realize tax assets, including net operating loss and tax credit carryforward benefits. Our assessment of whether a valuation allowance is required involves judgment, including forecasting future taxable income and evaluating tax planning initiatives, if applicable.

We expect to continue to reinvest foreign earnings outside the United States indefinitely. If future earnings are repatriated to the United States, or if we expect such earnings to be repatriated, a provision for additional taxes may be required. Under provisions of the territorial tax system, repatriated earnings are generally exempt from United States income taxation, however, incremental income taxes may occur from withholding taxes, foreign exchange gains, or other taxable gains recognized in connection with tax basis differences in our foreign investments. The ultimate tax cost of repatriating such earnings will depend on tax laws in effect and other circumstances at that time. See "Note 13. Income Taxes" in Part II, Item 8 of this Form 10-K.

NEW ACCOUNTING PRONOUNCEMENTS

See "Note 2. Accounting Changes" in Part II, Item 8 of this Form 10-K for a summary of new accounting pronouncements that may impact our business.

NON-GAAP FINANCIAL MEASURES

In addition to financial results reported in accordance with GAAP, we compute certain financial measures using non-GAAP components, as defined by the U.S. Securities and Exchange Commission ("SEC"). These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies. We have provided a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures.

Reconciliation of Non-GAAP Components Used in the Computation of Certain Financial Measures

We exclude the effects of certain tax adjustments and other items for purposes of presenting net income attributable to GATX, diluted earnings per share, and return on equity attributable to GATX because we believe these items are not attributable to our business operations. Management utilizes net income attributable to GATX, excluding tax adjustments and other items, when analyzing financial performance because such amounts reflect the underlying operating results that are within management’s ability to influence. Accordingly, we believe presenting this information provides investors and other users of our financial statements with meaningful supplemental information for purposes of analyzing year-to-year financial performance on a comparable basis and assessing trends.

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The following tables show our net income attributable to GATX, diluted earnings per share, and return on equity attributable to GATX, excluding tax adjustments and other items for the years ended December 31 (in millions, except per share data):

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(*) Sum of individual components may not be additive due to rounding.

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(1)    Expenses associated with the acquisition of Wells Fargo's rail assets.

(2)    Expenses recorded for the settlements of litigation claims arising out of legacy business operations.

(3)    Reserves recorded for our share of anticipated environmental remediation costs arising out of prior operations and legacy businesses.

(4)    In 2022, we made the decision to sell the Specialized Gas Vessels. We have recorded gains and losses associated with the subsequent impairments and sales of these assets. As of December 31, 2023, all vessels had been sold.

(5)    In 2022, we made the decision to exit Rail Russia. In 2023, we sold Rail Russia and recorded a gain on the final sale of this business.

(6)    Deferred income tax adjustment attributable to an enacted corporate income tax rate reduction in Germany in 2025 and deferred income tax adjustments attributable to state tax rate reductions in 2024 and 2023.

(7)    Valuation allowance adjustment associated with the realizability of state net operating losses in future tax years.

(8)    Insurance recoveries related to aircraft spare engines at RRPF for which it had previously recorded impairment losses.

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