GATX Corp. Q1 2010 Earnings Call Transcript

GATX Corp. Q1 2010 Earnings Call Transcript
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GATX Corp. (GMT)

Q1 2010 Earnings Call

April 22, 2010 11:00 am ET

Executives

Brian Kenny – President and CEO of GATX

Bob Lance – Chief Financial Officer

Analysts

Bob Neffoli – Piper Jeffrey

John Heck – JMP Security

Regine – Jeffery's and Company

Paul Bodnar - Longbow Research

Mike Agrondel – Northwind Security

Eric Harfield - Morgan Keegan.

Danial Max - Trafelet

Steve Barger – Key bank Capital Market

Presentation

Operator

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Good day and welcome to the GATX first quarter earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to [Bob Lance], Chief Financial Officer. Please go ahead.

Bob Lance

Thank you, [Lorie]. Good morning, everyone. Thanks for joining us in our first quarter earnings conference call. I'm joining today by Brian Kenny our President and CEO of GATX. All provided a very brief over view of the results highlighted in our press release earlier this morning and I will open it up the question. First in the administrative of matter, I'd like to remind you that any forward looking statement made on this call represent our best judgment as to what may occur in the future. We have basely forward looking statement and information currently available and disclaim any intention or obligation to update or revised this statement to reflect [ sub sequential] event or circumstances. The company is actual result will depend on the number of competitive and economic factors. Some of which maybe outside the control of the company. For more information, I refer you to our 2009 form 10K. For the numbers, today we reported 2010 first quarter income of $18.7 million or 40 cents per diluted share compared the [night] income of 27.6 million or 56 cents per diluted for the first quarter of 2009. Please note that the 2010 and 2009 first quarter result include negative after tax per value adjustment of 2 cents and 23 cents per diluted share respectively related to certain [torevitive] at are European Rails [Siludez] AA Cargo. As noted in the press release. The first quarter operating of result and environment or essentially in line with our expectations as we wade back in January coming in to 2010. The rail market remains very competitive is our last source of working aggressively to keep their fleets fully utilized. Let's continue [there] of a negative effect, unleash renewal pricing relative do aspiring right. As noted by our [LPI] which was a negative 15.2% of quarter [about] to change challenge is in rail remain formidable. There are some signs of improvement all those [sporadic]. This dynamic is to be expected as the market is stabilized but it's not yet showing consistencies of recovery. You will also know it I'm sure that re marketing a rail would very strong in the first quarter. We saw the approximately 1300 cars [assignment] activity in the secondary market has improved verse 2009. However, I [caution] again [annualizing] the first quarter re marketing in common rail. As many of you know re marketing activity can be very [valuable] quarter to quarter and year to year for that matter. And, it's driven by many different factors most importantly our fleet portfolio management activity. In specialty on marine joints ventures performed as we expected. Which means the charter rate in the market that we participate in remain well relative to prior years.

Our air crafting genuinely [seem] joint [venture] looks over all rise performed very well during the quarter. In a American Steam Ship was not too much to discuss for an operational stand point as the sailing season just got under way on the last few weeks. However, costumer’s inquiry is heaven salad and demand for Iron [Horse] along as Great Lake does increase along with the restarting of a limited number of [blast formasis] at the Steel Manufacturing Company. We'll continue to [judiship] as bringing vessel back in the service. But, the early science in 2010 is positive for [AFB]. During the first quarter, we invested approximately $70 million dollars primarily in rail assets. As we continue to seek and track [give us about] an opportunity adds assets to the portfolio. As noted in the release, we expect 2010 full year earnings to be in arranged of a $50 to $70 per diluted share as well out line for you back in January. This guidance exclude in the [AAE] per value adjustment. Before we move on to questions, one last matter. For those of you are in the Chicago area our annual share holder's meeting is tomorrow at 9:00 am at the Northern [Trust] it's at the corner [Matt Monroe Hotel]. You’re invited to attend. [Wider], is it will be available of Brian Kenny's presentations later in today and we tack quickly over view. Let's go to questions.

Question-and-Answer Session

Operator

Thank you and the question and answer session will be conducting electronically. If you would like to ask your questions, please press star one on your telephone key pad and if you are joining us on the speaker phone, please make sure that your mute button is turned off to allow your signal to reach our equipment. Once again, it is star one and will take as first question from [Bob Neffoli] from [Piper Jeffrey].

Bob Neffoli

- Piper Jeffrey

Good morning.

Bob Lance

Good morning, Bob.

Bob Neffoli - Piper Jeffrey

Couple of quick questions. The share of a dilute earnings was up substantially in the quarter and I was wondering what drove that? I mean mostly in the rail segment but it was kind of and even it's a very pretty [rotatively] lumpy item and if it there was other gain from selling cars out of the joint venture or...

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