GATX CORP

Previous wording

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.

Current wording

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 condensed 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 condensed consolidated 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.

Previous wording

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.

Current wording

Operating results for the six months ended June 30, 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.

Previous wording

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.

Current wording

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 was 30%with Brookfield's share at 70%. The acquisition from Wells Fargo was partially funded through a$2.96 billion term loan executed by GABX, which is guaranteed by GATX Corporation. As of June 30, 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.

Previous wording

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.

Current wording

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 six months of 2026. However, recent developments, including tariff announcements 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 have and could continue to 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.

Previous wording

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").

Current wording

Net income attributable to GATX for the six months ended June 30, 2026 was $188.9 million, or $5.19 per diluted share, compared to $154.1 million, or $4.21 per diluted share, for the same period in 2025. Net income attributable to GATX increased $34.8 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, higher net gain on asset dispositions at Rail North America, and higher earnings at the Rolls-Royce & Partners Finance joint ventures (collectively, the "RRPF affiliates"), partially offset by higher maintenance expense at Rail North America, higher depreciation expense at Rail North America and Rail International, and higher interest expense.

Previous wording

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.

Current wording

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. Also on January 1, 2026, GATX directly purchased 200 locomotives from Wells Fargo for approximately$30.4 million.

Previous wording

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 thethree 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.

Current wording

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 thethree and six months ended June 30, 2026, GATX received $12.4 million and $24.9 million from GABX and $2.8 million and $5.6 million from Brookfield for these services. GABX management fees earned by GATX are eliminated in consolidation and not shown on the face of the condensed consolidated statements of income. 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.

Previous wording

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.

Current wording

Despite ongoing macroeconomic uncertainty and the impacts of the geopolitical environment in the Middle East, demand for most railcars was stable and the renewal success rate remained strong. Utilization was 98.0% at the end of the current quarter.

Previous wording

As of March 31, 2026, leases for 29,052 tank and freight cars and 1,289 boxcars are scheduled to expire over the remainder of 2026. These amounts exclude railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.

Current wording

As of June 30, 2026, leases for 23,008 tank and freight cars and 1,184 boxcars are scheduled to expire over the remainder of 2026. These amounts exclude railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.

Previous wording

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 will 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 March 31, 2026, 8,437 railcars have been ordered pursuant to the terms of the agreement, of which 6,745 railcars have been delivered.

Current wording

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 will 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 June 30, 2026, 9,523 railcars have been ordered pursuant to the terms of the agreement, of which 7,344 railcars have been delivered.

Previous wording

During the first quarter of 2026, the renewal rate change of the LPI was positive 22.3%, compared to positive 21.9% in the prior quarter, and positive 24.5% in the first quarter of 2025. Lease terms on renewals for railcars in the LPI averaged 56 months in the current quarter, compared to 58 months in the prior quarter, and 61 months in the first quarter of 2025.

Current wording

During the second quarter of 2026, the renewal rate change of the LPI was positive 16.8%, compared to positive 22.3% in the prior quarter, and positive 24.2% in the second quarter of 2025. Lease terms on renewals for railcars in the LPI averaged 54 months in the current quarter, compared to 56 months in the prior quarter, and 60 months in the second quarter of 2025.

Previous wording

In the three months ended March 31, 2026, lease revenue increased $140.7 million, or 54.1%. The acquisition of railcars from Wells Fargo led to an increase in lease revenue of $132.8 million. In addition to the impact of the acquisition, lease revenue increased $7.9 million, primarily driven by more railcars on lease and higher lease rates. Other revenue increased $2.7 million, driven by management fee revenue from the finance lease portfolio owned by Brookfield and managed by GATX.

Current wording

In the six months ended June 30, 2026, lease revenue increased $268.9 million, or 51.4%. The acquisition of railcars from Wells Fargo led to an increase in lease revenue of $262.5 million. In addition to the impact of the acquisition, lease revenue increased $6.4 million, primarily driven by more railcars on lease and higher lease rates. Other revenue increased $13.8 million primarily due to higher repair revenue and management fee revenue from the finance lease portfolio owned by Brookfield and managed by GATX.

Previous wording

In the three months ended March 31, 2026, maintenance expense increased $36.9 million. The acquisition of railcars from Wells Fargo led to an increase of $26.5 million. In addition to this impact, maintenance expense increased $10.4 million, driven by more repairs performed by the railroads, more repair events and a mix of repairs that resulted in higher costs per repair. Depreciation expense increased $56.3 million, primarily due to the impact of the railcars acquired from Wells Fargo.

Current wording

In the six months ended June 30, 2026, maintenance expense increased $84.4 million. The acquisition of railcars from Wells Fargo led to an increase of $61.9 million. In addition to this impact, maintenance expense increased $22.5 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 $108.6 million, primarily due to the impact of the railcars acquired from Wells Fargo.

Previous wording

During the three months ended March 31, 2026, investment volume was $4,464.2 million (including approximately $4.2 billion for the acquisition of railcars and locomotives from Wells Fargo) compared to $227.7 million in the same period in 2025. We acquired 1,064 newly built railcars, 100,920 railcars in the secondary market (including 100,870 railcars acquired at GABX from Wells Fargo) and 200 locomotives from Wells Fargo in the three months ended March 31, 2026, compared to 642 newly built railcars, 627 railcars in the secondary market, and zero locomotives in the same period in 2025.

Current wording

During the six months ended June 30, 2026, investment volume was $4,611.3 million (including approximately $4.2 billion for the acquisition of railcars and locomotives from Wells Fargo) compared to $359.9 million in the same period in 2025. We acquired 1,765 newly built railcars and purchased 100,994 railcars in the secondary market (including 100,870 railcars acquired at GABX from Wells Fargo) and 202 locomotives (including 200 locomotives from Wells Fargo) in the six months ended June 30, 2026, compared to 1,269 newly built railcars, 707 railcars in the secondary market, and zero locomotives in the same period in 2025.

Previous wording

In the three months ended March 31, 2026, segment profit of $103.9 million increased 17.0% compared to $88.8 million for the same period in the prior year. Segment profit in 2026 was impacted by the acquisition of railcars from Wells Fargo. Aside from the impact of the acquisition, segment profit increased $22.1 million, driven by higher net gains on asset dispositions and higher revenue from the legacy fleet, partially offset by higher maintenance and interest expense.

Current wording

In the three months ended June 30, 2026, segment profit of $118.5 million increased 22.7% compared to $96.6 million for the same period in the prior year. Segment profit in 2026 was impacted by the acquisition of railcars from Wells Fargo. Aside from the impact of the acquisition, segment profit increased $8.1 million, driven by higher net gains on asset dispositions and higher revenue, partially offset by higher maintenance and interest expense.

Previous wording

In the three months ended March 31, 2026, net gain on asset dispositions increased $17.7 million, driven by higher net gains on asset dispositions and railcars converted to finance leases and higher net scrapping gains. The amount and timing of disposition gains is dependent on a number of factors and may vary materially from period to period. Net interest expense increased $49.3 million, due to a higher average debt balance, resulting from debt incurred for the acquisition of railcars from Wells Fargo, and a higher average interest rate.

Current wording

In the three months ended June 30, 2026, net gain on asset dispositions increased $28.6 million, driven by higher net gains on asset dispositions and higher net scrapping gains, partially offset by lower net gains on railcars converted to finance leases. The amount and timing of disposition gains is dependent on a number of factors and may vary materially from period to period. Net interest expense increased $39.3 million, due to a higher average debt balance resulting from debt incurred for the acquisition of railcars from Wells Fargo and a higher average interest rate.

Previous wording

Rail International, composed primarily of GATX Rail Europe ("GRE"), experienced a challenging railcar leasing market as GRE faced ongoing macroeconomic headwinds, including weak GDP results, and uncertainty due to the geopolitical environment in the Middle East and Ukraine, which weighed on customers' fleet planning activities. Despite pressure on utilization, GRE experienced renewal lease rate increases for the majority of railcar types in the period. Utilization was 94.7% at the end of the current quarter.

Current wording

Rail International, composed primarily of GATX Rail Europe ("GRE"), experienced a challenging railcar leasing market as GRE faced ongoing macroeconomic headwinds, including weak GDP results and higher inflation, as well as uncertainty due to the geopolitical environment in the Middle East and Ukraine, which weighed on customers' fleet planning activities. Despite pressure on utilization, GRE experienced renewal lease rate increases for the majority of railcar types in the period. Utilization was 95.3% at the end of the current quarter.

Previous wording

As of March 31, 2026, leases for 8,502 railcars are scheduled to expire over the remainder of 2026. This amount excludes railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.

Current wording

As of June 30, 2026, leases for 7,179 railcars are scheduled to expire over the remainder of 2026. This amount excludes railcars on leases expiring in 2026 that have already been renewed or assigned to a new lessee.

Previous wording

In the three months ended March 31, 2026, segment profit of $31.6 million increased 23.0% compared to $25.7 million for the same period in the prior year. The increase was primarily due to higher lease revenue and changes in foreign currency exchange rates, partially offset by higher depreciation and interest expense.

Current wording

In the six months ended June 30, 2026, segment profit of $63.2 million increased 9.2% compared to $57.9 million for the same period in the prior year. The increase was primarily due to higher lease revenue and changes in foreign currency exchange rates, partially offset by higher depreciation and interest expense.

Previous wording

In the three months ended March 31, 2026, net interest expense increased $5.9 million, due to a higher average debt balance and a higher average interest rate. Other income (expense) was favorable by $4.3 million, driven by the positive impact of changes in foreign exchange rates, primarily euro-zloty fluctuations, and lower litigation costs.

Current wording

In the six months ended June 30, 2026, net interest expense increased $9.8 million, due to a higher average debt balance and a higher average interest rate. Other (expense) income was favorable by $3.7 million, driven by the positive impact of changes in foreign exchange rates, primarily euro-zloty fluctuations, and lower litigation costs.

Previous wording

During the three months ended March 31, 2026, investment volume was $47.4 million compared to $62.7 million in the same period in 2025. In the three months ended March 31, 2026, GRE acquired 355 newly built railcars compared to 446 newly built railcars for the same period in 2025, and Rail India acquired 343 newly built railcars compared to 312 newly built railcars for the same period in 2025.

Current wording

During the six months ended June 30, 2026, investment volume was $93.0 million compared to $143.8 million in the same period in 2025. In the six months ended June 30, 2026, GRE acquired 538 newly built railcars and purchased 46 railcars in the secondary market compared to 1,025 newly built railcars for the same period in 2025, and Rail India acquired 686 newly built railcars compared to 529 newly built railcars for the same period in 2025.

Previous wording

Rail International's reported results of operations are impacted by fluctuations in the exchange rates of the U.S. dollar against the foreign currencies in which it conducts business, primarily the euro. In the three months ended March 31, 2026, fluctuations in the value of the euro, relative to the U.S. dollar, positively impacted lease revenue by approximately $8.6 million and positively impacted segment profit, excluding other income (expense), by approximately $4.4 million compared to the same period in 2025.

Current wording

Rail International's reported results of operations are impacted by fluctuations in the exchange rates of the U.S. dollar against the foreign currencies in which it conducts business, primarily the euro. In the three months ended June 30, 2026, fluctuations in the value of the euro, relative to the U.S. dollar, positively impacted lease revenue by approximately $2.1 million and positively impacted segment profit, excluding other (expense) income, by approximately $1.1 million compared to the same period in 2025.

Previous wording

In the three months ended March 31, 2026, lease revenue increased $16.8 million, or 20.1%, driven by more railcars on lease at GRE and Rail India, as well as the impact of foreign exchange rates.

Current wording

In the three months ended June 30, 2026, lease revenue increased $10.7 million, or 11.9%, driven by more railcars on lease at GRE and Rail India, as well as the impact of foreign exchange rates.

Previous wording

In the three months ended March 31, 2026, maintenance expense increased $0.6 million, primarily due to the impact of foreign exchange rates, partially offset by fewer repair events, the mix of repairs performed, and fewer regulatory compliance events. Depreciation expense increased $7.7 million, due to the impact of new railcars added to the fleet, including the railcars acquired from DB Cargo AG primarily in 2025.

Current wording

In the three months ended June 30, 2026, maintenance expense increased $0.3 million, primarily due to the impact of foreign exchange rates and higher repair costs, partially offset by fewer regulatory compliance events. Depreciation expense increased $6.2 million, due to the impact of new railcars added to the fleet, including the railcars acquired from DB Cargo AG primarily in 2025.

Previous wording

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 $27.6 million for the three months ended March 31, 2026, compared to $33.4 million for the same period in 2025. The change was driven by the timing of remarketing income.

Current wording

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 $49.6 million and $77.2 million for the three and six months ended June 30, 2026, compared to $22.6 million and $56.0 million and for the same periods in 2025. Dividend distributions from the RRPF affiliates totaled $70.0 million for each of the three and six months ended June 30, 2026 compared to none for the same periods in 2025.

Previous wording

Engine Leasing also includes GATX Engine Leasing ("GEL"), our wholly owned business that invests directly in aircraft spare engines. As of March 31, 2026, 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 owned by GEL are managed by the RRPF affiliates, for which we paid them a fee of $1.5 million for the three months ended March 31, 2026 and $1.4 million for the same period in 2025.

Current wording

Engine Leasing also includes GATX Engine Leasing ("GEL"), our wholly owned business that invests directly in aircraft spare engines. As of June 30, 2026, GEL owned 46 aircraft spare engines, with 21 currently on, or available for, 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 owned by GEL are managed by the RRPF affiliates, for which we paid them a fee of $1.5 million and $3.0 million for the three and six months ended June 30, 2026 and $1.3 million and $2.7 million for the same periods in 2025.

Previous wording

The operating environment for the RRPF affiliates and GEL continued to be favorable in the first quarter of 2026 as robust global passenger air travel continued to drive strong demand for aircraft spare engines. However, uncertainty exists due to the geopolitical environment in the Middle East.

Current wording

The operating environment for the RRPF affiliates and GEL continued to be favorable in the second quarter of 2026. Demand for air travel and spare engines continues to be high. However, uncertainty exists due to the geopolitical environment in the Middle East.

Previous wording

In the three months ended March 31, 2026, income from our share of affiliates' earnings decreased $5.8 million, driven by the timing of remarketing income. Higher income from operations was primarily due to more aircraft spare engines in the fleet, partially offset by higher interest expense. The amount and timing of remarketing income is dependent on a number of factors and may vary materially from period to period.

Current wording

In the six months ended June 30, 2026, other income increased $16.7 million, driven by maintenance reserve releases on certain engines at GEL. Income from our share of affiliates' earnings increased $21.2 million, driven by higher income from operations and higher remarketing income. Higher income from operations was primarily due to more aircraft spare engines in the fleet, partially offset by higher interest expense. The amount and timing of remarketing income is dependent on a number of factors and may vary materially from period to period.

Previous wording

In the three months ended March 31, 2026, investment volume was $0.2 million, compared to zero in the same period in 2025. Investment volume in 2026 consisted of the purchase of engine stands.

Current wording

In the six months ended June 30, 2026, investment volume was $0.2 million, compared to zero in the same period in 2025. Investment volume in 2026 consisted of the purchase of engine stands at GEL.

Previous wording

In the three months ended March 31, 2026, segment profit of $35.3 million decreased $3.3 million compared to segment profit of $38.6 million for the same period in the prior year. The decrease was driven by lower earnings at the RRPF affiliates, primarily due to the timing of remarketing events, partially offset by higher earnings at GEL.

Current wording

In the three months ended June 30, 2026, segment profit of $66.4 million increased $39.1 million compared to segment profit of $27.3 million for the same period in the prior year. The increase was driven by higher earnings at the RRPF affiliates and GEL.

Previous wording

In the three months ended March 31, 2026, lease revenue increased $1.4 million, driven by aircraft spare engines acquired and placed on leases directly with airline customers. Non-dedicated engine revenue increased $0.6 million, due to higher annuity receipts resulting from higher average engine flying hours for aircraft spare engines utilized in the engine capacity agreement with Rolls-Royce.

Current wording

In the three months ended June 30, 2026, lease revenue increased $0.7 million, driven by more aircraft spare engines on leases directly with airline customers. Non-dedicated engine revenue increased $0.1 million, due to higher annuity receipts for aircraft spare engines utilized in the engine capacity agreement with Rolls-Royce.

Previous wording

In the three months ended March 31, 2026, depreciation expense increased $1.2 million, due to aircraft spare engines acquired in 2025.

Current wording

In the three months ended June 30, 2026, depreciation expense increased $1.1 million, due to aircraft spare engines acquired in 2025.

Previous wording

The tank container leasing market remained challenging in the first quarter of 2026 due to macro-economic headwinds and the impact of the current geopolitical environment in the Middle East. Utilization was 85.2% at the end of the current quarter.

Current wording

The tank container leasing market remained challenging in the second quarter of 2026 due to macro-economic headwinds and the impact of the current geopolitical environment in the Middle East. Utilization was 88.0% at the end of the current quarter.

Previous wording

SG&A increased $14.7 million in the three months ended March 31, 2026 compared to the same period in the prior year. The variance was primarily due to higher employee-related expenses, including the impact of higher headcount resulting from the Wells Fargo rail assets acquisition, and higher information technology expenses.

Current wording

SG&A increased $25.7 million for the six months ended June 30, 2026 compared to the same period in the prior year. SG&A increased by $11.0 million for the three months ended June 30, 2026 compared to the same period in the prior year. Both variances were primarily due to higher employee-related expenses, including the impact of higher headcount resulting from the Wells Fargo rail assets acquisition, and higher information technology expenses.

Previous wording

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.

Current wording

Unallocated interest (expense) 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.

Previous wording

As of March 31, 2026, we had an unrestricted cash balance of $740.9 million. 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 March 31, 2026. In addition, we have a €250 million, 3-year unsecured revolving credit facility in Europe that matures in 2027, of which €210 million was available as of March 31, 2026. At GABX, 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 March 31, 2026.

Current wording

As of June 30, 2026, we had an unrestricted cash balance of $747.1 million. We also have a $632 million, 5-year unsecured revolving credit facility in the United States that matures in 2031 and a $368 million, 3-year unsecured revolving credit facility in the United States that matures in 2029, both of which were fully available as of June 30, 2026. In addition, we have a €250 million, 3-year unsecured revolving credit facility in Europe that matures in 2027, of which €212 million was available as of June 30, 2026. At GABX, 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 June 30, 2026.

Previous wording

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

Current wording

The following table shows our cash flows from operating, investing, and financing activities for the six months ended June 30 (in millions):

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2026 increased $74.9 million compared to the same period in 2025. Comparability among reporting periods is impacted by the timing of changes in working capital items. Specifically, higher cash receipts from revenue and lower payments for operating leases were partially offset by higher payments for interest, income taxes, maintenance, and other operating expenses.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2026 increased $189.8 million compared to the same period in 2025. Comparability among reporting periods is impacted by the timing of changes in working capital items. Specifically, higher cash receipts from revenue and lower payments for operating leases were partially offset by higher payments for maintenance, interest, income taxes, and other operating expenses.

Previous wording

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

Current wording

The following table shows our principal sources and uses of cash flows from investing activities for the six months ended June 30 (in millions):

Previous wording

The increase in portfolio investments and capital additions of $4,223.7 million for the three months ended March 31, 2026 was primarily due to the acquisition of railcars and locomotives from Wells Fargo and the cost of other railcars acquired at Rail North America, partially offset by fewer railcars acquired at GRE. The timing of investments depends on purchase commitments, transaction opportunities, and market conditions.

Current wording

The increase in portfolio investments and capital additions of $4,205.2 million for the six months ended June 30, 2026 was primarily due to the acquisition of railcars and locomotives from Wells Fargo and the cost of other railcars acquired at Rail North America and Rail India, partially offset by fewer railcars acquired at GRE. The timing of investments depends on purchase commitments, transaction opportunities, and market conditions.