Mr. Wallace continued, “During the quarter, the Rail Group maintained its record $5.1 billion backlog. I am pleased that our structural wind towers business increased its backlog and now has production visibility through 2015. The amount of backlog visibility we have in our major businesses provides opportunities to continue to generate additional operating efficiencies. In addition, our portfolio of businesses remains well-positioned to serve the fast-growing North American oil, gas, and chemical industries, and we are prepared to respond to demand increases in other industries should broader economic activity improve. Our solid financial position, combined with our extended backlogs, enhances our confidence to seek new growth opportunities for our portfolio of diversified industrial businesses.”
Business Group Results
In the third quarter of 2013, the Rail Group reported revenues of $718.5 million and a record operating profit of $121.5 million, resulting in increases compared to the third quarter of 2012 of 57% and 245%, respectively. The Rail Group shipped 6,225 railcars and received orders for 5,610 railcars during the third quarter. The Rail Group backlog remained at $5.1 billion at September 30, 2013, representing 40,050 railcars, compared to a backlog of $5.1 billion as of June 30, 2013, representing 40,665 railcars.
During the third quarter of 2013, the Railcar Leasing and Management Services Group reported leasing and management revenues of $150.6 million compared to $136.5 million in the third quarter of 2012 due to continued growth in the lease fleet and higher rental rates. In addition, the Group had no sales of railcars from the lease fleet owned for less than a year during the third quarter compared to $23.4 million in the third quarter of 2012. Proceeds from the sale of railcars from the lease fleet owned for more than a year at the time of sale are not included in revenue and totaled $20.2 million in the third quarter of 2013 and $60.8 million in the third quarter of 2012. Operating profit for this Group was $74.0 million for the third quarter of 2013 compared to an operating profit of $85.1 million during the third quarter of 2012. Included in the operating results for the third quarter of 2013 was $1.6 million of profit from railcar sales totaling $20.2 million compared to $21.3 million of profit from railcar sales totaling $84.2 million for the same period last year. Operating profit from operations, which excludes profit from railcar sales, increased for the three months ended September 30, 2013 compared to the same period last year due to higher rental rates and lease fleet growth.