GATX Corporation (GMT)’s Fourth Quarter 2014 Earnings Conference Call Transcript

Art Hatfield – Raymond James

Okay. And should we think about — I am getting into the weeds here, but when we think about modeling for 2015, should we — is it safe to assume, where the euro is today, kind of try and figure out something with regards to that how that will impact the lease rates for the year? Obviously, subject to change throughout the year and timing of renewals and all that nonsense?

Robert C. Lyons – Executive Vice President and Chief Financial Officer

That’s a good question, I can tell you what we did assume in our 2015 outlook is euro right around 1.17-1.18 it’s actually below that today. But we also for a good portion of the euro income we hedge a significant portion of that with a floor of that not much below 1.17-1.18 today.

Art Hatfield

Amm okay, thanks. Great thanks for the time.

Operator
Okay now Next we’ll move to Kristine Kubacki with Avondale Partners.

Kristine Kubacki – Avondale Partners

Goodmorning Just some questions on the maintenance. I know you talked a little bit about it for 2015. But could you talk — will maintenance expense be pretty level through 2015 or should we think about any seasonality with that? And then, can you give us, remind us just how that will start to ebb in 2016?

Robert C. Lyons – Executive Vice President and Chief Financial Officer
Sure Kristine, its Rob Lyons. There is really no — I wouldn’t factor in any significant seasonality to the maintenance expense as the year progresses even the compliance work should be relatively evenly spread out. Third quarter to fourth quarter ’14 it was probably not last time users on material pickup in that maintenance expense in North America. That’s actually part of that is very much a good news story. And we’re pulling cars out of inventory. Boxcars center being the coal cars we’re pulling out of inventory and prepping for words to put those into service. So it’s a little bit of an abnormal pickup, third quarter to fourth quarter. ’15, it would be relatively stable.

Brian Kenney – Chairman, President and Chief Executive Officer
And as I said the boxcar fleet that’s driving it both from a full year impact of that fleet as well as some work we’re doing on boxcar add boxcars to put it back into service and some that’s capitalized some of the expense so that’s why it was higher as Rob said in ’14 it will probably be a little bit higher in ’15 because of that offset by those compliance events. In general, compliance events actually increased in ’15 but the tank qualification event which is what drive most of that cost decrease in ’15 we did close to 5,000 in ’14. And we should do over 1,000 less in ’15. And to your question beyond that and once again scheduled and things change as you buy and sell cars but schedule we expect that to drop again in ’16-’17 timeframe.