GATX CORP
For the period ended Dec 31, 2023. Filed Feb 16, 2024.
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FY2023 · Filed Feb 16, 2024
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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 unsecured or secured debt and commercial paper. 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, 2023, we had an unrestricted cash balance of $450.7 million. We also have a $250 million 3-year unsecured revolving credit facility in the United States that matures in 2026 and a $600 million, 5-year unsecured revolving credit facility in the United States that matures in 2028, both of which were fully available as of December 31, 2023.
The following table shows our cash flows from operating, investing and financing activities for the years ended December 31 (in millions):
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Net cash provided by operating activities | $520.4 | $533.5 | $507.2 |
| Net cash used in investing activities | (1,219.3) | (1,073.5) | (917.7) |
| Net cash provided by financing activities | 844.1 | 504.4 | 463.1 |
| Effect of exchange rate changes on cash and cash equivalents | 1.6 | (4.9) | (1.8) |
| Net cash provided by discontinued operations | — | — | 1.1 |
| Net increase (decrease) in cash, cash equivalents, and restricted cash during the year | $146.8 | $(40.5) | $51.9 |
Net Cash Provided by Operating Activities
Net cash provided by operating activities in 2023 of $520.4 million decreased $13.1 million compared to 2022. Comparability among reporting periods is impacted by the timing of changes in working capital items. Specifically, higher cash payments for maintenance, interest, and other operating expenses, as well as lower affiliate dividends received, were partially offset by higher cash receipts from revenue, lower payments for operating leases, and lower payments for income taxes.
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):
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Portfolio investments and capital additions (1) | $(1,665.0) | $(1,255.8) | $(1,131.9) |
| Portfolio proceeds (2) | 272.8 | 269.6 | 187.1 |
| Short-term investments (3) | 150.0 | (148.5) | — |
| Other investing activity | 22.9 | 61.2 | 27.1 |
| Net cash used in investing activities | $(1,219.3) | $(1,073.5) | $(917.7) |
(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.
The following table shows portfolio investments and capital additions by segment for the years ended December 31 (in millions):
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Rail North America | $976.9 | $815.9 | $574.4 |
| Rail International | 382.4 | 243.9 | 173.3 |
| Portfolio Management | 267.3 | 149.7 | 353.0 |
| Other | 38.4 | 46.3 | 31.2 |
| Total | $1,665.0 | $1,255.8 | $1,131.9 |
The increase in portfolio investments and capital additions of $409.2 million in the year ended December 31, 2023 is primarily due to more railcars acquired at Rail North America and Rail International and more aircraft spare engines acquired at GEL, partially offset by fewer tank containers acquired at Trifleet. The timing of investments depends on purchase commitments, transaction opportunities, and market conditions.
The following table shows portfolio proceeds for the years ended December 31 (in millions):
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Proceeds from sales of operating assets | $272.8 | $269.6 | $181.1 |
| Other | — | — | 6.0 |
| Total | $272.8 | $269.6 | $187.1 |
Portfolio proceeds increased $3.2 million in 2023 compared to 2022, primarily due to proceeds from the sale of Rail Russia at Rail International, partially offset by lower proceeds received from the sales of the Specialized Gas Vessels at Portfolio Management in 2023 compared to 2022.
The following table shows other investing activity for the years ended December 31 (in millions):
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Proceeds from sales of other assets (1) | $20.2 | $31.1 | $54.7 |
| Other | 2.7 | 30.1 | (27.6) |
| Total | $22.9 | $61.2 | $27.1 |
(1) Proceeds from sales of other assets for all periods were primarily related to railcar scrapping.
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):
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Net proceeds from issuances of debt (original maturities longer than 90 days) | $1,420.0 | $848.3 | $1,491.9 |
| Repayments of debt (original maturities longer than 90 days) | (500.0) | (250.0) | (884.0) |
| Net decrease in debt with original maturities of 90 days or less | (7.1) | — | (4.1) |
| Purchases of assets previously leased (1) | — | (1.5) | (77.2) |
| Stock repurchases (2) | (2.6) | (47.2) | (13.1) |
| Dividends | (80.6) | (76.6) | (74.3) |
| Other | 14.4 | 31.4 | 23.9 |
| Total | $844.1 | $504.4 | $463.1 |
(1) We did not purchase any railcars that were previously leased in 2023, compared to 21 railcars in 2022.
(2) During 2023, we repurchased 24,520 shares of common stock for $2.6 million, compared to 472,609 shares of common stock for $47.2 million in 2022.
The following table shows the activity on our long-term debt principal in 2023 (in millions):
| Balance at 12/31/22 | Issuances | Payments | Impact of Foreign Exchange Rates | Balance at 12/31/23 | |
|---|---|---|---|---|---|
| U.S. notes | $5,450.0 | $1,100.0 | $(250.0) | $— | $6,300.0 |
| U.S. delayed draw term loans | 250.0 | 150.0 | (250.0) | — | 150.0 |
| EUR notes (1) | 631.7 | — | — | 19.5 | 651.2 |
| Schuldschein loans (1) | 160.5 | 81.1 | — | 6.8 | 248.4 |
| India delayed draw term loans (2) | — | 101.7 | — | (0.7) | 101.0 |
| Total debt principal | $6,492.2 | $1,432.8 | $(500.0) | $25.6 | $7,450.6 |
(1) Denominated in euros, but presented in U.S. dollars in this table.
(2) 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.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.