GATX Corporation

Hello, everyone. Thank you for joining us and welcome to the GATX 2026 third quarter earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Shari Hellerman, head of investor relations. Shari, please go ahead.

Thank you, Holly. Good morning. and thank you for joining GATX's 2026 Third Quarter Earnings Call. I'm joined today by Bob Lyons, President and Chief Executive Officer, Tom Ellman, Executive Vice President and Chief Financial Officer, and Paul Titterton, Executive Vice President and President of Rail North America. 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 2025 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 2026 third quarter diluted earnings per share of $2.92 compared to $2.25 in the third quarter of 2025. For the first nine months of 2026, GATX delivered diluted earnings per share of $8.11 compared to $6.46 for the same period in 2025. The 2025 third quarter and year-to-date results include a net positive impact of 15 cents per diluted share from tax adjustments and other items. These items are detailed in a supplemental information section of earnings release. I'll briefly address each of our business segments. After that, we'll open the call up for questions. At Rail North America, market conditions remain positive. Leasing fundamentals benefited from a favorable supply-demand environment and strong interest in existing fleet assets. These conditions continue to support attractive renewal economics and secondary market opportunities across the fleet. The renewal success rate was strong at 86.1%, and fleet utilization increased to 98.4% at quarter end. The renewal rate change of GATX's lead price index was positive 12.4%, with an average renewal term of 52 months. We continue to successfully place new rail cars under a committed supply agreement with a diverse customer base. We've placed about 10,300 rail cars under our 2022 Trinity Supply Agreement. Our earliest available scheduled delivery under this agreement is in the second quarter of 2027. Demand for rail cars in the secondary market remain exceptionally strong during the quarter. Net gains on asset dispositions in Rail North America were $50.3 million in the quarter and $167.8 million year-to-date. Additionally, we continue to realize benefits from the acquisition of Wells Fargo's rail assets. Integration efforts have progressed well, and we are leveraging GATX's scale, customer relationships, and portfolio management capabilities across the larger fleet. We also benefited from higher management fee income during the quarter, driven in part by asset sale activity within the Brookfield-owned portfolio. Turning to Rail International, performance was solid in the quarter. GATX Rail Europe's fleet utilization improved to 96.1% at quarter end, and we continued pushing up renewal lease rates for various car types. In India, We further expanded the fleet during the quarter while maintaining full utilization. Across Rail International, we continue to see attractive opportunities for investment and growth. Engine Leasing delivered excellent results during the quarter. Portfolio performance remains strong as healthy global air travel activity continue to support high utilization and attractive lease rates. At RRPF, We continue to deploy capital into attractive opportunities with investment volume at the joint venture approaching $1 billion year-to-date. During the quarter, GATX repurchased approximately 442,000 shares for $78.5 million. Year-to-date, we've repurchased more than 732,000 shares for approximately $130 million. Finally, we now expect 2026 full-year earnings to modestly exceed the upper end of our previously announced guidance range of $990 to $1030 per dealer's share. This guidance excludes any impact from just tax adjustments and other items. And that concludes our prepared remarks. I'll hand it back to the operator so we can open the line for questions.

We will now begin the question and answer session. Your first question comes from Ben Moore with Citi. Ben, your line is now open. Please go ahead.