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

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Brian Kenney – Chairman, President and Chief Executive Officer
A lower number and in general the volume we have done over the last couple of years in sand has been very long dated. So the price we get over the last couple of years we don’t expect to come up renewals for quite some time.

Matt Brooklier – Longbow Research
Are you able to talk to, on a relative basis I guess, the impact? And you may have talked a little bit to it earlier, but with prices dropping here, the impact in terms of crude cars versus sand cars? It sounds like maybe you are little bit more concerned with that particular market, the sand cars, versus crude here. Or maybe if you could just talk a little bit more to what you are seeing and which cars could be impacted if we have sustained lower oil prices moving forward.

Brian Kenney – Chairman, President and Chief Executive Officer
If those two car types, and when you say concerned about it ironically our small cube-covered hoppers fleet right now is pretty close to record lease rates, and I mean in the existing market and what we have done in the fourth quarter and third quarter. So, we have not seen rates declined there, but what you are reading and what low crude that’s just a potential in 2015 obviously especially if that new drilling doesn’t continue. But right now rates are still extremely high. On the crude cars we have seen those prices come down. If you remember that story, we didn’t really participate in the six months and two year leases we lock the stuff upper-term and we had lower rates during the sub-term than the rest of our, I would say the rest of the industry on average, but still a rate on a 30,000 gallon tanker that was a $175 in 2010, when opt over a $1000 two years-ago, it’s probably come up 20%, 30% since then which by-the-way is still on outstanding rate historically for that car. We anticipate that will still be under pressure in 2015, on the [inaudible]. And that one has materialized for other reasons.

Matt Brooklier – Longbow Research

Very good, thanks for the time.

Operator


And next we will move on to Steve Barger with KeyBanc Capital Markets.

Steve Barger – KeyBanc Capital Markets
As you look across the entire fleet, what percentage of the tank cars have not yet reset at current prices or higher prices?

Brian Kenney – Chairman, President and Chief Executive Officer
Well I would say at least 20% and probably a little bit more. And keep in mind the real acceleration in lease rates in tank occurred over the course of the last 18 months, 24 months. So even cars that we renewed in 2012 are, we have the opportunity to renew those today, even that we did them in 2012 at good rate they will be better today.

Steve Barger – KeyBanc Capital Markets

So, I mean obviously some of that goes into the discussion about the LPI remaining strong for coming years. What percentage of your non-tank fleet is still at what you would consider cyclically low price in term?

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