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GATX CORP

GATX CORPGATXEarnings & Financial Report

NYSE · Industrials · Transportation Services

GATX Corporation is a railcar lessor that owns fleets in North America, Europe, and Asia. In addition, jointly with Rolls-Royce Limited, it owns one of the largest aircraft spare engine lease portfolios. It is headquartered in Chicago, Illinois. As of December 31, 2020, the company owned 148,939 rail cars, including 83,959 tank cars, 64,980 freight cars, and 645 locomotives. Other major car types owned include covered hoppers, open-top hopper cars, and gondolas. It primarily serves the petrol...

What changed in GATX CORP's 10-K — 2022 vs 2023

Top changes in GATX CORP's 2023 10-K

212 paragraphs added · 238 removed · 164 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

52 edited+21 added−22 removed67 unchanged
Decreased demand from a discrete event impacting a specific asset type, customer, industry, or region in which we have a concentrated exposure could negatively impact our results of operations. Our long-term railcar purchase commitments could subject us to material operational and financial risks. Unlike some of our competitors in the railcar leasing market, we do not manufacture railcars.
Decreased demand from a discrete event impacting a specific asset type, customer, industry, or region in which we have a concentrated exposure could negatively impact our results of operations. 14 Our long-term railcar purchase commitments could subject us to material operational and financial risks. Unlike some of our competitors in the railcar leasing market, we do not manufacture railcars.
In addition to conditions in the capital markets, changes in our financial performance or credit ratings or ratings outlook, as determined by rating agencies such as Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings, Inc., or increased interest rates could cause us to incur increased borrowing costs or to have greater difficulty accessing public and private markets for secured and unsecured debt.
In addition to conditions in the capital markets, changes in our financial performance or credit ratings or ratings outlook, as determined by rating agencies such as Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings, Inc., or continuing increased interest rates could cause us to incur increased borrowing costs or to have greater difficulty accessing public and private markets for secured and unsecured debt.
Our customers’ industries are driven by dynamic market forces and trends, which are influenced by economic and political factors. Changes in our customers' markets may significantly affect demand for our transportation assets. Risks related to our international operations and expansion into new geographic markets could adversely affect our business, financial condition, and operating results.
Our customers’ industries are driven by dynamic market forces and trends, which are influenced by economic and political factors. Changes in our customers' markets may significantly affect demand for our transportation assets. 15 Risks related to our international operations and expansion into new geographic markets could adversely affect our business, financial condition, and operating results.
These acquisitions and divestitures may present financial, managerial, and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, 13 increased expenses and costs, assumption of liabilities and indemnities, increased compliance risks, and potential disputes with the buyers or sellers or third parties.
These acquisitions and divestitures may present financial, managerial, and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses and costs, assumption of liabilities and indemnities, increased compliance risks, and potential disputes with the buyers or sellers or third parties.
Deterioration of conditions in the global capital markets, or negative changes in our credit ratings or increased interest rates may limit our ability to obtain financing and may increase our borrowing costs. We rely largely on banks and the capital markets to fund our operations and contractual commitments.
Deterioration of conditions in the global capital markets, or negative changes in our credit ratings or continuing increased interest rates may limit our ability to obtain financing and may increase our borrowing costs. We rely largely on banks and the capital markets to fund our operations and contractual commitments.
We are subject to the risks associated with natural 16 disasters and the physical effects of climate change, which may increase in frequency and severity over time and may have a material adverse effect on our assets, operations and business.
We are subject to the risks associated with natural disasters and the physical effects of climate change, which may increase in frequency and severity over time and may have a material adverse effect on our assets, operations and business.
A substantial adverse judgment against us could have a material effect on our financial position, results of operations, cash flows, and reputation. Our transportation assets and operations are subject to various laws, rules, and regulations.
A substantial adverse judgment against us could have a material effect on our financial position, results of operations, cash flows, and reputation. 17 Our transportation assets and operations are subject to various laws, rules, and regulations.
Alternatively, if PSR results in increased pricing and/or reduced service frequency and quality, the value proposition of rail freight for shippers relative to alternative modes of transportation could be reduced.
Alternatively, if PSR results in increased pricing and/or reduced service frequency, safety and quality, the value proposition of rail freight for shippers relative to alternative modes of transportation could be reduced.
While inflation in lease rates as well as inflation in residual values for rail and other transportation assets 18 may benefit our financial results, prolonged inflation could result in reduced demand for our transportation assets.
While inflation in lease rates as well as inflation in residual values for rail and other transportation assets may benefit our financial results, prolonged inflation could result in reduced demand for our transportation assets.
In addition, demand for transportation assets used to transport certain commodities, including ethanol and other renewable fuels may be affected by government subsidies and mandates, which may be enacted, changed, or eliminated from time to time, while demand for transportation assets used to transport fossil fuels or that directly or indirectly require consumption of fossil fuels for operation may be affected by government policies and mandates with respect to climate change.
In addition, demand for transportation assets used to transport certain commodities, including ethanol and other renewable fuels, may be affected by government subsidies and mandates, which may be enacted, changed, or eliminated from time to time, while demand for transportation assets used to transport fossil fuels or that directly or indirectly require consumption of fossil fuels for operation may be affected by government policies and mandates with respect to climate change and carbon emissions.
Our North American rail asset leasing business is impacted by the operations of the railroads, particularly the largest rail systems known as the “Class I railroads”, most of which are pursuing some form of major operational transformation under the umbrella term of “precision scheduled railroading” or “PSR”.
Our North American rail asset leasing business is impacted by the operations of the railroads, particularly the largest rail systems known as the “Class I railroads”, most of which are utilizing some form of major operational transformation under the umbrella term of “precision scheduled railroading” or “PSR”.
We may be adversely affected by national and international political developments, instability, and uncertainties, including political unrest and threats of terrorist attacks or war, which could lead to the following: • Legislation or regulatory action directed toward improving the security of transportation assets against acts of terrorism, which could affect the construction or operation of transportation assets and increase costs • A decrease in demand for transportation assets and services • Lower utilization of transportation equipment • Lower transportation asset lease and charter rates • Impairments and loss of transportation assets • Supply chain disruptions • Capital market disruption, which may raise our financing costs or limit our access to capital • Liability or losses resulting from acts of terrorism involving our assets • A significant deterioration of global growth, and related decreases in confidence or investment activity in the global markets, arising from political or economic tensions, changes, and trends and/or an increase in trade conflict and protectionism.
We may be adversely affected by national and international political developments, instability, and uncertainties, including political unrest and threats of terrorist attacks or war, which could lead to the following: • Legislation or regulatory action directed toward improving the security of transportation assets against acts of terrorism, which could affect the construction or operation of transportation assets and increase costs • A decrease in demand for transportation assets and services • Lower utilization of transportation equipment • Lower transportation asset lease rates • Impairments and loss of transportation assets • Supply chain challenges and disruptions • Capital market disruption, which may raise our financing costs or limit our access to capital • Liability or losses resulting from acts of terrorism involving our assets • Increased risk of cybersecurity attacks • A significant deterioration of global growth, and related decreases in confidence or investment activity in the global markets, arising from political or economic tensions, changes, and trends and/or an increase in trade conflict and protectionism.
Customer demand for our transportation assets and services can be adversely affected by various economic and other factors, including: • Weak macroeconomic conditions • Weak market conditions in our customers’ businesses • Adverse changes in the price of, or demand for, commodities • Changes in railroad operations, efficiency, pricing and service offerings, including those related to “precision scheduled railroading” or labor strikes or shortages • Changes in, or disruptions to, supply chains • Availability of pipelines, trucks, and other alternative modes of transportation • Changes in conditions affecting the aviation industry, including geographic exposure and customer concentrations • Other operational or commercial needs or decisions of our customers • World trade policies Demand for our railcars and other transportation assets is dependent on the strength and growth of our customers’ businesses.
Customer demand for our transportation assets and services can be adversely affected by various economic and other factors, including: • Prolonged inflation or deflation • High interest rates • Weak macroeconomic conditions and world trade policies • Weak market conditions in our customers’ businesses • Adverse changes in the price of, or demand for, commodities • Changes in railroad operations, efficiency, safety, pricing and service offerings, including those related to “precision scheduled railroading” or labor strikes or shortages • Changes in, or disruptions to, supply chains • Availability of pipelines, trucks, and other alternative modes of transportation • Changes in conditions affecting the aviation industry, including geographic exposure and customer concentrations • Other operational or commercial needs or decisions of our customers Demand for our railcars and other transportation assets is dependent on the strength and growth of our customers’ businesses.
If these laws, rules, and regulations change or we fail to comply with them, it could have a significant negative effect on our business and profitability. Our fleets of transportation assets and related operations are subject to various U.S. and non-U.S. laws, rules, and regulations administered by authorities in jurisdictions where we do business.
If these laws, rules, and regulations change or we fail to comply with them, it could have a significant negative effect on our business and profitability. Our fleets of transportation assets and related operations are subject to various U.S. and non-U.S. laws, rules, and regulations administered by authorities in jurisdictions where we do business, including the Association of American Railroads.
Demand for our other transportation assets and related services is also influenced by many of the factors discussed above. For example, aircraft spare engine leasing is influenced by airline and lessee profitability, patterns in global air travel, reliability and durability of engine types, world trade policies, technological advances, and price and other competitive factors.
Demand 13 for our other transportation assets and related services is also influenced by many of the factors discussed above. For example, aircraft spare engine leasing is influenced by airline and lessee profitability, patterns in global air travel, reliability and durability of engine types, world trade policies, geopolitical tensions or conflict, technological advances, and price and other competitive factors.
We could also incur increased operating costs due to higher wages or benefits paid to union workers. Business disruptions or higher operating costs could both have an adverse effect on our financial position, results of operations, or cash flows. Our transportation assets may become obsolete.
We could also incur increased operating costs due to higher wages or benefits paid to union workers. Business disruptions or higher operating costs could both have an adverse effect on our financial position, results of operations, or cash flows.
Upon consolidation, we translate the financial results of certain subsidiaries from their local currency to the U.S. dollar, which exposes us to foreign exchange rate fluctuations. As exchange rates vary, the translated operating results of foreign subsidiaries may differ materially from period to period.
Fluctuations in foreign exchange rates could negatively impact our results of operations. Upon consolidation, we translate the financial results of certain subsidiaries from their local currency to the U.S. dollar, which exposes us to foreign exchange rate fluctuations. As exchange rates vary, the translated operating results of foreign subsidiaries may differ materially from period to period.
A deterioration in (1) the performance of services provided by Rolls-Royce or RRPF, or (2) the durability and reliability of Rolls-Royce engines, or (3) the financial condition, creditworthiness or liquidity of Rolls-Royce or RRPF could negatively impact GATX’s financial performance or, in the case of GEL, its operational performance.
A deterioration in (1) the performance of services provided by Rolls-Royce or RRPF, or (2) the durability and reliability of Rolls-Royce engines, or (3) the financial condition, creditworthiness or liquidity of Rolls-Royce or RRPF could negatively impact GATX’s financial performance or, in the case of GEL, its operational performance. Our transportation assets may become obsolete.
In recent years, we have increased our focus on international growth and expansion into select emerging markets as a means to grow and diversify earnings. 14 Our foreign operations and international expansion strategy are subject to the following risks associated with international operations: • Noncompliance with U.S. laws affecting operations outside of the United States, such as the Foreign Corrupt Practices Act • Noncompliance with a variety of foreign laws and regulations • Failure to properly implement changes in tax laws and the interpretation of those laws • Failure to develop and maintain data management practices that comply with laws related to cybersecurity, privacy, data localization, and data protection • Fluctuations in currency values • Sudden changes in foreign currency exchange controls • Inflation or deflation • Discriminatory or conflicting fiscal policies • Difficulties enforcing contractual rights or foreclosing to obtain the return of our assets in certain jurisdictions • Supply chain disruptions • Inability to access railcar, tank container or component supply • Uncollectible accounts and longer collection cycles that may be more prevalent in foreign countries • Ineffective or delayed implementation of appropriate controls, policies, and processes across our diverse operations and employee base • Imposition of sanctions against countries where we operate or specific companies or individuals with whom we do business, or retaliatory sanctions by such countries on U.S. companies • Nationalization or confiscation of assets by foreign governments, and imposition of additional or new tariffs, quotas, trade barriers, regulations, and similar restrictions on our operations outside the United States • Unforeseen developments and conditions, including terrorism, war, epidemics, and international tensions and conflicts.
Our foreign operations and international expansion strategy are subject to the following risks associated with international operations: • Unforeseen developments and conditions, including terrorism, war, epidemics, and international tensions and conflicts • Supply chain disruptions • Inability to access railcar, tank container or component supply • Imposition of sanctions against countries where we operate or specific companies or individuals with whom we do business, or retaliatory sanctions by such countries on companies in the U.S. or in other countries in which we operate • Nationalization or confiscation of assets by foreign governments, and imposition of additional or new tariffs, quotas, trade barriers, regulations, and similar restrictions on our operations outside the United States • Inflation or deflation • Fluctuations in currency values • Sudden changes in foreign currency exchange controls • Noncompliance with U.S. laws affecting operations outside of the United States, such as the Foreign Corrupt Practices Act • Noncompliance with a variety of foreign laws and regulations • Failure to properly implement changes in tax laws and the interpretation of those laws • Failure to develop and maintain data management practices that comply with laws related to cybersecurity, privacy, data localization, and data protection • Discriminatory or conflicting fiscal or trade policies • Difficulties enforcing contractual rights or foreclosing to obtain the return of our assets in certain jurisdictions • Uncollectible accounts and longer collection cycles that may be more prevalent in foreign countries • Ineffective or delayed implementation of appropriate controls, policies, and processes across our diverse operations and employee base Many of our employees are represented by unions, and failure to successfully negotiate collective bargaining agreements may result in strikes, work stoppages, or substantially higher labor costs.
We calculate our pension and other post-retirement costs using various assumptions, such as discount rates, long-term return on plan assets, salary increases, health care cost trend rates, and other factors. Changes to any of these assumptions could adversely affect our financial position and results of operations.
Changes to assumptions used to calculate post-retirement costs, increases in funding requirements, and investment losses in pension funds could adversely affect our results of operations. We calculate our pension and other post-retirement costs using various assumptions, such as discount rates, long-term return on plan assets, salary increases, health care cost trend rates, and other factors.
If insurance coverage becomes prohibitively expensive or unavailable, we could be forced to reduce our coverage amount and increase the amount of self-insured risk we retain, thereby increasing our exposure to uninsured adverse judgments and other losses and liabilities that could have a material effect on our financial position, results of operations, and cash flows. 20 Our internal control over financial accounting and reporting may not detect all errors or omissions in the financial statements.
If insurance coverage becomes prohibitively expensive or unavailable, we could be forced to reduce our coverage amount and increase the amount of self-insured risk we retain, thereby increasing our exposure to uninsured adverse judgments and other losses and liabilities that could have a material effect on our financial position, results of operations, and cash flows.
Difficulties in recruiting and motivating qualified personnel; the unexpected loss of such individuals resulting in the depletion of our institutional knowledge base; or our inability to successfully transition key roles could hinder our ability to execute our strategy and adversely impact our business and results of operations.
Difficulties in recruiting and motivating qualified personnel, including skilled labor; the unexpected loss of such individuals resulting in the depletion of our institutional knowledge base; or our inability to successfully transition key roles could hinder our ability to execute our strategy and adversely impact our business and results of operations. 16 Information Technology Risks We rely on technology in all aspects of our business operations.
Inflation or deflation could have an unanticipated adverse impact on our financial results. The timing and duration of the effects of inflation are unpredictable and depend on market conditions, the magnitude of the inflation and other economic factors.
Prolonged inflation, as well as resulting interest rate increases, or deflation could have an adverse impact on our business and financial results. The timing and duration of the effects of inflation are unpredictable and depend on market conditions, the magnitude of the inflation and other economic factors.
No system of internal control provides absolute assurance that the financial statements are accurate and free of material error.
No system of internal control provides absolute assurance that the financial statements are accurate and free of material error. Item 1B. Unresolved Staff Comments None.
Industry Risks We depend on continued demand from our customers to lease or use our transportation assets and services at satisfactory rates. A significant decline in customer demand could negatively impact our business and financial performance. Our profitability depends on our ability to lease assets at satisfactory rates and to re-lease assets upon lease expiration.
A significant decline in customer demand could negatively impact our business and financial performance. Our profitability depends on our ability to lease assets at satisfactory rates and to re-lease assets upon lease expiration.
These factors may enable our competitors to offer leases or services to customers at lower rates than we can provide, thus negatively impacting our profitability, asset utilization, and investment volume. Economic and Credit Risks Fluctuations in foreign exchange rates could negatively impact our results of operations.
These factors may enable our competitors to offer leases or services to customers at lower rates than we can provide, thus negatively impacting our profitability, asset utilization, and investment volume.
As a global company, we are subject to taxation in the U.S. and numerous other non-U.S. jurisdictions. Significant judgment is required to determine our consolidated income tax position and related liabilities.
Changes in the mix of earnings in the U.S. and foreign countries and in tax rates and laws could adversely affect our financial results. As a global company, we are subject to taxation in the U.S. and numerous other non-U.S. jurisdictions. Significant judgment is required to determine our consolidated income tax position and related liabilities.
Information Technology Risks We rely on technology in all aspects of our business operations. If we are unable to adequately maintain and secure our information technology (“IT”) infrastructure from cybersecurity threats and related disruptions, our business could be negatively impacted.
If we are unable to adequately maintain and secure our information technology (“IT”) infrastructure from cybersecurity threats and related disruptions, our business could be negatively impacted. We rely on our IT Infrastructure (defined below) to process, transmit, and store electronic information that is used in all aspects of our business operations, including employee and customer information.
A significant change in pricing and/or service offerings by North American railroads or poor operating conditions could reduce demand for our rail assets and negatively impact our financial performance.
We have no control over these external considerations, and changes in these factors could negatively impact demand for our transportation assets held for lease. A significant change in pricing and/or service offerings by North American railroads or poor operating conditions could reduce demand for our rail assets and negatively impact our financial performance.
Failure to comply with the sanctions, laws and regulations could result in monetary fines or other penalties, which could have an adverse impact on our reputation, business, financial condition and results of operations. Any of the above-mentioned factors could adversely affect our business, financial condition and results of operations.
Department of Commerce, the United Nations Security Council and other relevant governmental authorities. Failure to comply with the sanctions, laws and regulations could result in monetary fines or other penalties, which could have an adverse impact on our reputation, business, financial condition and results of operations.
Moreover, failure of such controls to provide accurate and complete information could result in violation of such rules or regulations, which could have a material effect on our financial position, results of operations, cash flows, and reputation. We are subject to extensive environmental regulations and the costs of remediation may be material.
Moreover, failure of such controls to provide accurate and complete information could result in violation of such rules or regulations, which could have a material effect on our financial position, results of operations, cash flows, and reputation Climate change may also pose regulatory and environmental risks that could harm our results of operations and affect the way we conduct business.
While we maintain insurance to mitigate our exposure to these risks, our insurance policies, which carry retention and coverage limits, may not be adequate to reimburse us for losses caused by security breaches or other cybersecurity events, and we may not be able to collect fully, if at all, under these insurance policies.
While we maintain insurance to mitigate our exposure to these risks, our insurance policies, which carry retention and coverage limits, may not be adequate to reimburse us for losses caused by security breaches or other cybersecurity events, and we cannot guarantee that applicable insurance will be available to us in the future on economically reasonable terms or at all.
Our business must be conducted in compliance with applicable economic and trade sanctions laws and regulations, including those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant governmental authorities.
Geopolitical conflicts can also result in the imposition of economic and trade sanctions and countermeasures, and our business must be conducted in compliance with applicable economic and trade sanctions laws and regulations, including those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S.
A significant decline in customer demand for our assets and services could adversely affect our financial performance. 17 In many cases, demand for our transportation assets also depends on our customers’ desire to lease, rather than buy, the assets.
A significant decline in customer demand for our assets and services could adversely affect our financial performance. In many cases, demand for our transportation assets also depends on our customers’ desire to lease, rather than buy, the assets. Tax and accounting considerations, interest rates, and operational flexibility, among other factors, may influence a customer’s decision to lease or buy assets.
Breaches of our IT infrastructure could lead to disruptions in our business, potentially including the theft, destruction, loss, misappropriation, or release of confidential employee and customer information stored on our IT systems or confidential data or other business information and subject us to potential lawsuits or other material legal liabilities or reputational damage.
Breaches of our IT Infrastructure could lead to disruptions in our business, potentially including the theft, destruction, loss, misappropriation, or release of Confidential Information stored on our IT Infrastructure and subject us to potential lawsuits, including class actions, other material legal liabilities, reputational damage, lost customers or significant costs associated with incident response, system restoration or remediation, applicable filings and notifications, and future compliance.
Any of these factors, individually or in operation with one or more of the other factors, or other unforeseen impacts of climate change, could reduce the demand for and value of our assets, and could have an adverse effect on our financial position, results of operations, and cash flows.
Any of these factors, individually or in operation with one or more of the other factors, or other unforeseen impacts of climate change, could reduce the demand for and value of our assets, and could have an adverse effect on our financial position, results of operations, and cash flows. 18 Economic and Credit Risks United States and global political conditions and increased geopolitical tension, including the ongoing war between Russia and Ukraine and resulting sanctions and countermeasures, could adversely affect our business, financial condition and results of operations.
Adoption of any such rules or regulations could require us to design and implement additional internal and disclosure controls. If the cost of such controls is significant, it could adversely affect our financial condition and result of operations.
If the cost of such controls is significant, it could adversely affect our financial condition and result of operations.
Conversely, a period of prolonged deflation could negatively impact our lease rate pricing, residual values, and asset remarketing opportunities. These negative impacts of deflation may be offset by decreases to our costs for goods and services, including those listed above. We could be adversely affected by United States and global political conditions, including acts or threats of terrorism or war.
Conversely, a period of prolonged deflation could negatively impact our lease rate pricing, residual values, and asset remarketing opportunities. These negative impacts of deflation may be offset by decreases to our costs for goods and services, including those listed above. 19 In response to inflation, central bank policy interest rates continued to increase in fiscal year 2023.
Threats to IT systems associated with cybersecurity risks and cyber incidents or attacks have continued to increase in recent years in their frequency and levels of sophistication and intensity by sophisticated and organized groups and individuals with a wide range of motives and expertise.
We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Infrastructure and Confidential Information. These risks have continued to increase in recent years in their frequency and levels of sophistication and intensity by sophisticated and organized groups and individuals with a wide range of motives and expertise.
Depending upon the severity, scope, and duration of these circumstances, the impact on our financial position, results of operations, and cash flows could be material. Risks Related to our Common Stock There can be no assurance that we will continue to pay dividends or repurchase shares of our common stock at current levels.
Depending upon the severity, scope, and duration of these circumstances, the impact on our financial position, results of operations, and cash flows could be material.
These valuation differences may be positive or negative and could be material based on market conditions and demand for certain assets. We may not be able to obtain cost-effective insurance. We manage our exposure to risk, in part, by purchasing insurance. There is no guarantee that cost-effective insurance will consistently be available.
We manage our exposure to risk, in part, by purchasing insurance. There is no guarantee that cost-effective insurance will consistently be available.
We rely on our IT infrastructure to process, transmit, and store electronic information that is used in all aspects of our business operations, including employee and customer information. The implementation of remote and hybrid work options for employees has led to a substantial increase in remote access to our networks and systems.
The implementation of remote and hybrid work options for our employees and employees of our third-party IT suppliers has led to a substantial increase in remote access to our networks and systems.
While we have invested in the protection of our data and IT infrastructure, the steps we have taken to mitigate these risks may not be effective to prevent breaches of our IT infrastructure, some of which is managed by third parties, and we may be more vulnerable to a successful cyber-attack or information security incident from our workforce working remotely.
While we have invested significant expense and effort in the protection of our Confidential Information and IT Infrastructure, the steps we have taken to mitigate these risks may not be effective to prevent breaches of our IT Infrastructure.
If we were forced to increase contributions to our pension plans, our financial position, results of operations, and cash flows could be negatively affected. Changes in the mix of earnings in the U.S. and foreign countries and in tax rates and laws could adversely affect our financial results.
Additionally, changes to laws, regulations, or rules could require us to increase funding requirements or to compensate for investment losses in pension plan assets. If we were forced to increase contributions to our pension plans, our financial position, results of operations, and cash flows could be negatively affected.
If any of the events described in the risk factors below occur, our business, financial condition and results of operations could be materially adversely affected. 11 Business and Operational Risks The ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and results of operations.
If any of the events described in the risk factors below occur, our business, financial condition and results of operations could be materially adversely affected. Business, Operational and Industry Risks We depend on continued demand from our customers to lease or use our transportation assets and services at satisfactory rates.
Any such disruptions may also magnify the impact of other risks described elsewhere in this report. The global COVID-19 pandemic and measures taken in response to the pandemic may continue to have an adverse impact on our operations, commercial activity, asset values, financial position or liquidity in the future.
The emergence of new variants of COVID-19 or the occurrence of another widespread health crisis and measures taken in response could have an adverse impact on our operations, commercial activity, asset values, financial position or liquidity.
Periods of low interest rates reduce the discount rate we use to calculate our funding obligations, which may increase our funding requirements. Additionally, changes to laws, regulations, or rules could require us to increase funding requirements or to compensate for investment losses in pension plan assets.
Changes to any of these assumptions could adversely affect our financial position and results of operations. Periods of low interest rates reduce the discount rate we use to calculate our funding obligations, which may increase our funding requirements.
Violations of these laws, rules, and regulations can result in substantial fines and penalties, including potential limitations on operations or forfeiture of assets, and reputational damage. In addition, proposed SEC rules and other foreign regulations may require us to collect and disclose additional information relating to certain aspects of our operations, such as environmental and climate impacts and cybersecurity events.
Violations of these laws, rules, and regulations can result in substantial fines and penalties, including potential limitations on operations or forfeiture of assets, and reputational damage. We are subject to extensive environmental regulations and the costs of remediation may be material.
Many states as well as foreign governments have passed or proposed laws and regulations dealing with the collection and use of personal information obtained from their data subjects, including but not limited to the E.U.’s General Data Protection Regulation and the California Privacy Rights Act, and we could incur substantial penalties or litigation or reputational damage related to violations of such laws and regulations. 15 Legal and Regulatory Risks We have been, and may continue to be, involved in various types of litigation, including claims for personal injury, property damage, environmental damage, and other claims arising from an accident involving our railcars or other assets.
Legal and Regulatory Risks We have been, and may continue to be, involved in various types of litigation, including claims for personal injury, property damage, environmental damage, and other claims arising from an accident involving our railcars or other transportation assets.
Accordingly, a small number of shareholders could affect matters that require shareholder approval, such as the election of directors and the approval of significant business transactions. 19 General Risk Factors Changes to assumptions used to calculate post-retirement costs, increases in funding requirements, and investment losses in pension funds could adversely affect our results of operations.
As of the most recent public filings, six shareholders collectively control more than 60% of our outstanding common stock. Accordingly, a small number of shareholders could affect matters that require shareholder approval, such as the election of directors and the approval of significant business transactions. 20 General Risk Factors We may not be able to obtain cost-effective insurance.
We generate a significant amount of our net income outside the United States.
We generate a significant amount of our net income outside the United States. In recent years, we have increased our focus on international growth and expansion into select emerging markets as a means to grow and diversify earnings.
New government regulations could also increase our operating costs and compliance with those regulations could be costly. For example, the SEC has proposed disclosure requirements that would require companies to disclose a range of climate-related information, which may require us to incur substantial monitoring and compliance costs.
Regulatory focus on climate change and greenhouse gas (“GHG”) emissions has increased across the globe. New government regulations could increase our operating costs and compliance with those regulations could be costly. For example, regulators in Europe and the U.S. have recently focused efforts on increased disclosure related to climate change and mitigation efforts.
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On February 24, 2022, Russian military forces launched a military action in Ukraine.
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We own and manage certain aspects of our IT infrastructure, but we also rely on third parties for a range of IT systems and related products and services, including but not limited to, cloud computing services (such third-party systems and our IT infrastructure, collectively, our “IT Infrastructure”).
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Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict has already led to significant market and other disruptions, including a dramatic increase in energy prices across Europe, extreme volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain challenges and disruptions, slower new railcar deliveries, limited access to key components, increased labor costs, inflationary pressures, political and social instability, as well as an increase in cyberattacks and espionage, any of which could adversely impact our business, financial condition and results of operations.
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We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others, including personally identifiable information, as well as confidential and proprietary information belonging to our business, including trade secrets (such data and information, collectively, “Confidential Information”).
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These disruptions have been more impactful in Europe and India. As a result of the conflict in Ukraine, the United States, the European Union, the United Kingdom and other countries have implemented, and may implement additional, sanctions, export controls and other measures against Russia, Belarus and other countries, regions, officials, individuals or industries in their respective territories.
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All IT systems are vulnerable to cybersecurity threats and other unlawful attempts to disrupt or gain access to these systems, and these vulnerabilities may be increased by remote computing assets and additional security vulnerabilities that are present in many public, non-corporate and home networks.
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Such sanctions and other measures, as well as the existing and potential further responses from Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
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We and our third-party providers are regularly subject to attempted cyber intrusions, hacks and ransomware attacks, and we expect these incidents to accelerate and become increasingly sophisticated in using techniques and tools - including artificial intelligence - that circumvent security controls, evade detection and remove forensic evidence.
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As of December 31, 2022, our rail operations in Russia consisted of a fleet of 380 railcars managed by three employees. In 2022, as a result of our decision to exit Russia, the net assets of this limited railcar leasing business were classified as held for sale and an impairment loss was recognized.
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These disruptions could adversely affect our operations, financial position, and results of operations. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with, or effective in protecting our systems and information.
Removed
On January 31, 2023, we completed the sale of our Russian business and therefore no longer have any operations in Russia. See "Note 26. Subsequent Events" in Part II, Item 8 of this Form 10-K.
Added
Many jurisdictions in which we conduct business have passed or proposed laws and regulations dealing with the collection, processing, storage, transfer and/or use of personal information, some of which include potential fines and penalties based on worldwide revenue.
Removed
In the first quarter of 2022, our spare aircraft engine leasing joint ventures with Rolls-Royce plc (“RRPF”) recognized an impairment charge on three engines leased to a Russian airline customer.
Added
We could incur substantial costs related to ongoing compliance with, and substantial penalties or litigation or reputational damage related to violations of, such laws and regulations.
Removed
If the conflict between Russia and Ukraine has a longer-term impact on international air travel, or adversely impacts aircraft spare engine leasing, it is possible that the value of other engines in the RRPF or GATX Engine Leasing Ltd. portfolios may be negatively affected and additional asset impairments may be required, the magnitude of which is unknown.
Added
The European Union recently adopted the Corporate Sustainability Reporting Directive (“CSRD”) and related European Sustainability Reporting Standards that will require disclosure of the risks and opportunities arising from social and environmental issues and of the impact of companies’ activities on people and the environment.
Removed
The ongoing COVID-19 pandemic (including the emergence of new variants) continues to cause disruptions in global supply chains, and recent changes in the Chinese government’s approach to the pandemic may result in greater disruptions and potentially a slowdown of economic activity.
Added
We will be required to report under the CSRD for much of our business beginning in 2026.
Removed
Our foreign operations source certain railcar components and tank containers from China, and a delay in obtaining, or an inability to obtain, such components could adversely impact those operations and our financial performance.
Added
Similarly, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026, while additional states are considering similar climate-related disclosure regulations.
Removed
In addition, the pandemic caused a dramatic reduction in air travel, which reduced demand for the aircraft spare engines that we and our RRPF affiliates lease, and it is unclear when global air travel will return to pre-pandemic levels.
Added
The SEC has included in its regulatory agenda potential rulemaking on climate change that, if adopted, could require us to incur substantial monitoring and compliance costs. All of these new disclosure rules and regulations will require us to design and implement additional internal and disclosure controls.
Removed
A slow recovery in the market for air travel, particularly the long-haul routes that often utilize wide-body aircraft equipped with the spare engine models that we and our RRPF affiliates predominantly lease, could have an adverse effect on our business, financial condition and results of operations.
Added
As an example of one such conflict, in February 2022, Russian military forces launched a military action in Ukraine. In response to this action, the United States and other countries imposed various economic sanctions and measures against Russia, Belarus, certain sections of Ukraine, and related persons and entities. Russia subsequently enacted countermeasures.
Removed
The duration of, and the situation surrounding, the COVID-19 pandemic and its economic consequences remain uncertain, and the pandemic’s continuing impact on our costs, operations, financial performance, and liquidity, as well as its impact on our ability to successfully execute our business strategy, is difficult to predict.
Added
Additional sanctions and countermeasures have continued to be imposed as the conflict continues. The Russia/Ukraine conflict and related sanctions and countermeasures led to our decision to sell our rail business in Russia, but to date, the conflict has not had a material impact on business operations at our businesses outside of Russia.
Removed
Further, the ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control, including, but not limited to: actions taken by others in response to the pandemic; impacts on global and regional economies, travel, and economic activity; inflationary pressures; economic uncertainty and volatility in financial markets; and global supply chain disruptions.
Added
We continue to closely monitor developments and potential impacts from enacted sanctions and countermeasures and will take mitigating actions as appropriate.

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Item 2. Properties

Properties — owned and leased real estate

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As of December 31, 2022, the locations of our operations were as follows: GATX Headquarters Chicago, Illinois Rail North America Business Offices Major Maintenance Facilities Mobile Units Chicago, Illinois Colton, California Galena Park, Texas Burlington, Ontario Hearne, Texas Edmonton, Alberta Calgary, Alberta Waycross, Georgia Mexico City, Mexico Montreal, Quebec Moose Jaw, Saskatchewan Red Deer, Alberta Maintenance Facilities Plantersville, Texas Terre Haute, Indiana Customer Site Locations Clarkson, Ontario Rail International Business Offices Major Maintenance Facilities Customer Site Locations Amsterdam, Netherlands Ostróda, Poland Płock, Poland Baar, Switzerland Düsseldorf, Germany Hamburg, Germany Leipzig, Germany Moscow, Russia* Delhi, India Gurgaon, India Paris, France Vienna, Austria Warsaw, Poland Portfolio Management Chicago, Illinois Other Dordrecht, Netherlands Houston, Texas Singapore Shanghai, China _________ (*) On January 31, 2023, we completed the sale of Rail Russia. 22
As of December 31, 2023, the locations of our operations were as follows: GATX Headquarters Chicago, Illinois Rail North America Business Offices Major Maintenance Facilities Mobile Units Chicago, Illinois Colton, California Galena Park, Texas Burlington, Ontario Hearne, Texas Edmonton, Alberta Calgary, Alberta Waycross, Georgia Mexico City, Mexico Montreal, Quebec Moose Jaw, Saskatchewan Red Deer, Alberta Maintenance Facilities Terre Haute, Indiana Customer Site Locations Clarkson, Ontario Rail International Business Offices Major Maintenance Facilities Customer Site Locations Dordrecht, Netherlands Ostróda, Poland Płock, Poland Baar, Switzerland Düsseldorf, Germany Hamburg, Germany Leipzig, Germany Delhi, India Gurgaon, India Paris, France Vienna, Austria Warsaw, Poland Portfolio Management Chicago, Illinois Other Dordrecht, Netherlands Houston, Texas Singapore Shanghai, China 24

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The share repurchase program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The timing of share repurchases will be dependent on market conditions and other factors.
The share repurchase program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The timing of repurchases will be dependent on market conditions and other factors.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on the New York and Chicago Stock Exchanges under ticker symbol "GATX". We had approximately 1,400 common shareholders of record as of January 31, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on the New York and Chicago Stock Exchanges under ticker symbol "GATX". We had approximately 1,336 common shareholders of record as of January 31, 2024. We have a long history of paying quarterly cash dividends.
No share repurchases were completed during the fourth quarter of 2022. As of December 31, 2022, $89.6 million remained available under the repurchase authorization.
During 2023, we repurchased 24,520 shares for $2.6 million under the share repurchase program. As of December 31, 2023, $87.1 million remained available under the repurchase authorization.
The graph and table assume that $100 was invested in our common stock and each of the indices on December 31, 2017, and that all dividends were reinvested. 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 GATX $ 100.00 $ 116.65 $ 139.68 $ 144.18 $ 184.45 $ 192.14 S&P 500 100.00 95.61 125.70 148.81 191.48 156.77 S&P MidCap 400 100.00 88.90 112.17 127.48 159.01 138.18 Russell 3000 100.00 94.75 124.13 150.05 188.52 152.28 Item 6. [Reserved] 24
The graph and table assume that $100 was invested in our common stock and each of the indices on December 31, 2018, and that all dividends were reinvested. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 GATX $ 100.00 $ 119.75 $ 123.60 $ 158.13 $ 164.72 $ 189.73 S&P 500 100.00 131.47 155.65 200.29 163.98 207.04 S&P MidCap 400 100.00 126.17 143.39 178.85 155.42 180.90 Russell 3000 100.00 131.01 158.36 198.96 160.71 202.38 Item 6. [Reserved] 26
Removed
Equity Compensation Plan Information as of December 31, 2022: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in Column (a)) Plan Category (a) (b) (c) Equity Compensation Plans Approved by Shareholders 1,461,412 (1) $ 95.63 (2) 2,308,729 Equity Compensation Plans Not Approved by Shareholders — — Total 1,461,412 2,308,729 __________ (1) Consists of 1,001,359 non-qualified stock options, 111,870 performance shares, 107,720 restricted stock units and 240,463 phantom stock units.
Added
While we currently expect a cash dividend to be paid in the future, dividend payments will depend on our earnings, capital requirements, financial condition, and other factors considered by our Board of Directors.
Removed
(2) The weighted-average exercise price does not include performance shares, restricted stock or phantom stock units. For additional information about issuable securities under our equity compensation plans and the related weighted-average exercise price, see "Note 12.
Added
The following is a summary of common stock repurchases completed by month during the fourth quarter of 2023: Issuer Purchases of Equity Securities (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2023 - October 31, 2023 24,420 $ 104.68 24,420 $ 87.1 November 1, 2023 - November 30, 2023 100 $ 109.03 100 $ 87.1 Total 24,520 $ 104.70 24,520 25 Common Stock Performance Graph The performance graph below compares the cumulative total shareholder return on our common stock for the five-year period ended December 31, 2023, with the cumulative total return of the S&P 500 Index, the S&P MidCap 400 Index, and the Russell 3000 Index.
Removed
Share-Based Compensation" in Part II, Item 8 of this Form 10-K. 23 Common Stock Performance Graph The performance graph below compares the cumulative total shareholder return on our common stock for the five-year period ended December 31, 2022, with the cumulative total return of the S&P 500 Index, the S&P MidCap 400 Index, and the Russell 3000 Index.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Quantitative and Qualitative Disclosures About Market Risk 52 Item 8. Financial Statements and Supplementary Data 53
Quantitative and Qualitative Disclosures About Market Risk 53 Item 8. Financial Statements and Supplementary Data 54
Item 6. [Reserved] 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Discussion of Operating Results 27 Change in Net Operating Assets and Facilities 40 Cash Flow Discussion 41 Liquidity and Capital Resources 43 Critical Accounting Policies and Estimates 47 New Accounting Pronouncements 49 Non-GAAP Financial Measures 49 Item 7A.
Item 6. [Reserved] 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Discussion of Operating Results 28 Change in Net Operating Assets and Facilities 42 Cash Flow Discussion 42 Liquidity and Capital Resources 45 Critical Accounting Policies and Estimates 48 New Accounting Pronouncements 50 Non-GAAP Financial Measures 50 Item 7A.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The share repurchase program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The timing of share repurchases will be dependent on market conditions and other factors.
The share repurchase program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The timing of repurchases will be dependent on market conditions and other factors.
We base estimated future cash flows on a number of assumptions, including lease rates, lease term (including renewals), freight rates and volume, operating costs, the life of the asset, and final disposition proceeds. If we determine an asset is impaired, we recognize an impairment loss equal to the amount by which the carrying amount exceeds the asset’s fair value.
We base estimated future cash flows on a number of assumptions, including lease rates, lease term (including renewals), operating costs, freight rates and volume, the life of the asset, and final disposition proceeds. If we determine an asset is impaired, we recognize an impairment loss equal to the amount by which the carrying amount exceeds the asset’s fair value.
PORTFOLIO MANAGEMENT Segment Summary Portfolio Management's segment profit is attributable primarily to income from 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.
PORTFOLIO MANAGEMENT Segment Summary Portfolio Management's segment profit is attributable primarily to income from 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 engines.
For all fair value estimates, we use observable inputs whenever possible and appropriate. Once we make an estimate of fair value, we compare the estimate of fair value to the investment’s carrying value. If the investment’s estimated fair value is less than its carrying value, then we consider the investment impaired.
For all fair value estimates, we use observable inputs whenever possible and appropriate. 48 Once we make an estimate of fair value, we compare the estimate of fair value to the investment’s carrying value. If the investment’s estimated fair value is less than its carrying value, then we consider the investment impaired.
Share-Based Compensation" in Part II, Item 8 of this Form 10-K. 48 Income Taxes Our operations are subject to taxes in the United States, various states, and foreign countries, and as a result, we may be subject to audit in all of these jurisdictions.
Share-Based Compensation" in Part II, Item 8 of this Form 10-K. 49 Income Taxes Our operations are subject to taxes in the United States, various states, and foreign countries, and as a result, we may be subject to audit in all of these jurisdictions.
We have a strong balance sheet and adequate access to capital, which we believe positions us well to manage our transportation assets based on current market conditions. • We expect Rail North America's segment profit in 2023 to increase from 2022.
We have a strong balance sheet and adequate access to capital, which we believe positions us well to manage our transportation assets based on current market conditions. • We expect Rail North America's segment profit in 2024 to increase from 2023.
We plan to fund these expenditures in 2023 using available cash at December 31, 2022 in combination with cash from operations, portfolio proceeds, and long-term debt issuances. We also have access to our revolving credit facilities if needed.
We plan to fund these expenditures in 2024 using available cash at December 31, 2023 in combination with cash from operations, portfolio proceeds, and long-term debt issuances. We also have access to our revolving credit facilities if needed.
See "Note 8. Debt" in Part II, Item 8 of this Form 10-K. Short-Term Borrowings We primarily use short-term borrowings as a source of working capital and to temporarily fund differences between our operating cash flows and portfolio proceeds, and our capital investments and debt maturities.
See "Note 8. Debt" in Part II, Item 8 of this Form 10-K. Short-Term Borrowings and Credit Lines and Facilities We primarily use short-term borrowings as a source of working capital and to temporarily fund differences between our operating cash flows and portfolio proceeds, and our capital investments and debt maturities.
These amounts exclude railcars on leases expiring in 2023 that have already been renewed or assigned to a new lessee. On September 30, 2022 we entered into a new long-term railcar supply agreement with a subsidiary of Trinity Industries, Inc.
These amounts exclude railcars on leases expiring in 2024 that have already been renewed or assigned to a new lessee. In 2022, we entered into a new long-term railcar supply agreement with a subsidiary of Trinity Industries, Inc.
(3) Average active boxcars is calculated using the number of active boxcars at the end of each month.
(3) Average active boxcars for the year is calculated using the number of active boxcars at the end of each month.
Accounting Changes" in Part II, Item 8 of this Form 10-K for a summary of new accounting pronouncements that may impact our business. NON-GAAP FINANCIAL MEASURES In addition to financial results reported in accordance with GAAP, we compute certain financial measures using non-GAAP components, as defined by the SEC.
Accounting Changes" in Part II, Item 8 of this Form 10-K for a summary of new accounting pronouncements that may impact our business. NON-GAAP FINANCIAL MEASURES In addition to financial results reported in accordance with GAAP, we compute certain financial measures using non-GAAP components, as defined by the U.S. Securities and Exchange Commission ("SEC").
The remaining 9,000 railcars, which can be a mix of freight and tank cars, will 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 December 31, 2022, 682 railcars have been ordered pursuant to the terms of the agreement, none of which have been delivered.
The remaining 9,000 railcars, which can be a mix of freight and tank cars, will 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 December 31, 2023, 2,995 railcars have been ordered pursuant to the terms of the agreement, of which 890 have been delivered.
GEL acquired five aircraft spare engines in 2022, compared to 14 aircraft spare engines in 2021 . OTHER Other comprises our Trifleet Leasing business, as well as selling, general and administrative expenses ("SG&A"), unallocated interest expense, miscellaneous income and expense not directly associated with the reporting segments, and certain eliminations.
During 2023, GEL acquired ten aircraft spare engines compared to five aircraft spare engines in 2022 . OTHER Other comprises our Trifleet business, as well as selling, general and administrative expenses ("SG&A"), unallocated interest expense, miscellaneous income and expense not directly associated with the reporting segments, and certain eliminations.
Results for 2022 included a net negative impact of $61.8 million ($1.72 per diluted share) from tax adjustments and other items, compared to a net negative impact of $39.1 million ($1.08 per diluted share) from tax adjustments and other items in 2021 and a net negative impact of $12.3 million ($0.35 per diluted share) from tax adjustments and other items in 2020 (see "Non-GAAP Financial Measures" at the end of this item for further details). • At Rail North America, segment profit in 2022 was higher than prior year.
Results for 2023 included a net positive impact of $1.6 million ($0.05 per diluted share) from tax adjustments and other items, compared to a net negative impact of $61.8 million ($1.72 per diluted share) from tax adjustments and other items in 2022 and a net negative impact of $39.1 million ($1.08 per diluted share) from tax adjustments and other items in 2021 (see "Non-GAAP Financial Measures" at the end of this item for further details). • At Rail North America, segment profit in 2023 was lower than prior year.
The following table shows fleet activity for Rail North America locomotives for the years ended December 31: 2022 2021 2020 Beginning balance 577 645 661 Locomotives added, net of scrapped or sold (33) (68) (16) Ending balance 544 577 645 Utilization rate at year end (1) 89.3 % 89.8 % 81.1 % Active locomotives at year end (2) 486 518 523 Average active locomotives (3) 496 521 537 _______ (1) Utilization is calculated as the number of locomotives on lease as a percentage of total locomotives in the fleet.
The following table shows fleet activity and statistics for Rail North America locomotives for the years ended December 31: 2023 2022 2021 Beginning balance 544 577 645 Locomotives added, net of scrapped or sold (21) (33) (68) Ending balance 523 544 577 Utilization rate at year end (1) 88.3 % 89.3 % 89.8 % Active locomotives at year end (2) 462 486 518 Average active locomotives (3) 472 496 521 _______ (1) Utilization is calculated as the number of locomotives on lease as a percentage of total locomotives in the fleet.
ARI's railcar manufacturing business was acquired by a subsidiary of The Greenbrier Companies, Inc. ("Greenbrier") on July 26, 2019, and such subsidiary assumed all of ARI's obligations under our long-term supply agreement. As of December 31, 2022, 7,650 railcars have been ordered, of which 5,795 railcars have been delivered.
ARI's railcar manufacturing business was acquired by a subsidiary of Greenbrier on July 26, 2019, and such subsidiary assumed all of ARI's obligations under our long-term supply agreement. As of December 31, 2023, all 7,650 railcars have been ordered, of which 7,271 railcars have been delivered.
Comparability among reporting periods is impacted by the timing of changes in working capital items. Specifically, lower cash payments for operating leases and higher affiliate dividends received in the current year were partially offset by higher cash payments for income taxes, interest, and other operating expenses.
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.
All railcars covered under this agreement are expected to be delivered by early 2024. 30 Lease Price Index Our lease price index ("LPI") is an internally-generated business indicator that measures lease rate pricing on renewals for our North American railcar fleet, excluding boxcars.
All railcars covered under this agreement are expected to be delivered by early 2024. 31 Lease Price Index Our Lease Price Index ("LPI") is an internally-generated business indicator that measures renewal activity for our North American railcar fleet, excluding boxcars.
We acquired 4,060 newly built railcars and 585 railcars in the secondary market in 2022, compared to 3,622 newly built railcars and 325 railcars in the secondary market in 2021. Our investment volume is predominantly composed of acquired railcars, but also includes certain capitalized repairs and improvements to owned railcars and our maintenance facilities.
We acquired 3,835 newly built railcars and purchased 1,934 railcars in the secondary market in 2023, compared to 4,060 newly built railcars and 585 railcars in the secondary market in 2022. Our investment volume is predominantly composed of acquired railcars, but also includes certain capitalized repairs and improvements to owned railcars and our maintenance facilities.
This amount excludes railcars on leases expiring in 2023 that have already been renewed or assigned to a new lessee. 34 \ Rail India Fleet Data The following table shows fleet activity for Rail India railcars for the years ended December 31: 2022 2021 2020 Beginning balance 4,830 4,156 3,679 Cars added 1,042 715 477 Cars scrapped or sold — (41) — Ending balance 5,872 4,830 4,156 Utilization rate at year end (1) 100.0 % 100.0 % 99.0 % Active railcars at year end (2) 5,872 4,830 4,115 Average active railcars (3) 5,395 4,326 3,921 _______ (1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
This amount excludes railcars on leases expiring in 2024 that have already been renewed or assigned to a new lessee. \ 36 Rail India Fleet Data The following table shows fleet activity and statistics for Rail India railcars for the years ended December 31: 2023 2022 2021 Beginning balance 5,872 4,830 4,156 Railcars added 2,933 1,042 715 Railcars scrapped or sold — — (41) Ending balance 8,805 5,872 4,830 Utilization rate at year end (1) 100.0 % 100.0 % 100.0 % Active railcars at year end (2) 8,805 5,872 4,830 Average active railcars (3) 7,082 5,395 4,326 _______ (1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
(4) Average active railcars for the year is calculated using the number of active railcars at the end of each month. As of December 31, 2022, leases for approximately 18,700 tank and freight cars and approximately 1,800 boxcars are scheduled to expire in 2023.
(4) Average active railcars for the year is calculated using the number of active railcars at the end of each month. As of December 31, 2023, leases for approximately 19,400 tank and freight cars and approximately 1,900 boxcars are scheduled to expire in 2024.
CHANGE IN NET OPERATING ASSETS AND FACILITIES The following table shows changes in the net operating assets and facilities as of December 31 (in millions): 2022 2021 Beginning balance $ 7,784.8 $ 7,170.7 Investments 1,215.5 1,115.2 Purchase of assets previously leased 1.5 86.8 Depreciation expense (365.0) (371.6) Asset dispositions (130.9) (145.2) Transfers to assets held for sale (116.0) (9.8) Foreign exchange rate effects (111.7) (117.4) Other (27.9) 56.1 Ending balance $ 8,250.3 $ 7,784.8 40 CASH FLOW DISCUSSION We generate a significant amount of cash from operating activities and investment portfolio proceeds.
CHANGE IN NET OPERATING ASSETS AND FACILITIES The following table shows changes in net operating assets and facilities as of December 31 (in millions): 2023 2022 Beginning balance $ 8,250.3 $ 7,784.8 Investments 1,622.2 1,215.5 Purchase of assets previously leased — 1.5 Depreciation expense (385.6) (365.0) Asset dispositions (149.9) (130.9) Transfers to assets held for sale (1.7) (116.0) Foreign exchange rate effects 87.1 (111.7) Other (11.2) (27.9) Ending balance $ 9,411.2 $ 8,250.3 CASH FLOW DISCUSSION We generate a significant amount of cash from operating activities and investment portfolio proceeds.
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): 2022 2021 2020 Portfolio Investments and Capital Additions (1) $ (1,255.8) $ (1,131.9) $ (1,064.0) Portfolio Proceeds (2) 269.6 187.1 131.1 Other Investing Activity (87.3) 27.1 28.0 Net Cash Used in Investing Activities $ (1,073.5) $ (917.7) $ (904.9) _______ (1) Portfolio investments and capital additions primarily consist of purchases of operating assets and capitalized asset improvements.
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.
The following table shows portfolio activity for the RRPF affiliates' aircraft spare engines for the years ended December 31: 2022 2021 2020 Beginning balance 407 445 478 Engine acquisitions 9 5 20 Engine dispositions (18) (43) (53) Ending balance 398 407 445 Utilization rate at year end (1) 94.2 % 94.3 % 92.8 % Average leased engines (2) 372 400 439 ________ (1) Utilization is calculated as the number of engines on lease as a percentage of total engines in the fleet.
The following table shows portfolio activity and statistics for the RRPF affiliates' aircraft spare engines for the years ended December 31: 2023 2022 2021 Beginning balance 398 407 445 Engine acquisitions 14 9 5 Engine dispositions (13) (18) (43) Ending balance 399 398 407 Utilization rate at year end (1) 95.5 % 94.2 % 94.3 % Average leased engines (2) 376 372 400 ________ (1) Utilization is calculated as the number of engines on lease as a percentage of total engines in the fleet.
Total investment volume was $1,255.8 million in 2022, compared to $1,131.9 million in 2021, and $1,064.0 million in 2020. 2023 Outlook Conditions in the North American railcar leasing market improved throughout 2022, and we expect conditions to remain favorable in 2023. At Rail International, we expect robust demand for our railcars in both our European and Indian businesses.
Total investment volume was $1,665.0 million in 2023, compared to $1,255.8 million in 2022, and $1,131.9 million in 2021. 2024 Outlook Conditions in the North American railcar leasing market remained strong in 2023, and we expect favorable conditions to continue in 2024. At Rail International, we expect strong demand for our railcars in both our European and Indian businesses.
We classify assets we plan to sell or otherwise dispose of as held for sale, provided they meet specified accounting criteria, and we record those assets at the lower of their carrying amount or fair value less costs to sell. See "Note 10.
We classify assets we plan to sell or otherwise dispose of as held for sale, provided they meet specified accounting criteria, and we record those assets at the lower of their carrying amount or fair value less costs to sell. See "Note 10. Asset Impairments and Assets Held for Sale" in Part II, Item 8 of this Form 10-K.
Debt The following table shows the carrying value of our debt and lease obligations by major component as of December 31 (in millions): 2022 2021 Secured Unsecured Total Total Commercial paper and borrowings under bank credit facilities $ — $ 17.3 $ 17.3 $ 18.1 Recourse debt — 6,431.5 6,431.5 5,887.5 Operating lease obligations 257.9 — 257.9 286.2 Finance lease obligations — — — 1.5 Total $ 257.9 $ 6,448.8 $ 6,706.7 $ 6,193.3 As of December 31, 2022, our outstanding debt had a weighted-average remaining term of 8.6 years and a weighted-average interest rate of 3.72%, compared to 9.0 years and 3.79% at December 31, 2021.
Debt The following table shows the carrying value of our debt and lease obligations by major component as of December 31 (in millions): 2023 2022 Secured Unsecured Total Total Commercial paper and borrowings under bank credit facilities $ — $ 11.0 $ 11.0 $ 17.3 Recourse debt — 7,388.1 7,388.1 6,431.5 Operating lease obligations 226.8 — 226.8 257.9 Total $ 226.8 $ 7,399.1 $ 7,625.9 $ 6,706.7 As of December 31, 2023, our outstanding debt had a weighted-average remaining term of 8.4 years and a weighted-average interest rate of 4.08%, compared to 8.6 years and 3.72% at December 31, 2022.
The following table shows the components of recourse leverage as of December 31 (in millions, except recourse leverage ratio): 2022 2021 2020 Debt and lease obligations, net of unrestricted cash and short-term investments: Unrestricted cash and short-term investments $ (452.2) $ (344.3) $ (292.2) Commercial paper and bank credit facilities 17.3 18.1 23.6 Recourse debt 6,431.5 5,887.5 5,329.0 Operating lease obligations 257.9 286.2 348.6 Finance lease obligations — 1.5 33.3 Total debt and lease obligations, net of unrestricted cash and short-term investments $ 6,254.5 $ 5,849.0 $ 5,442.3 Total recourse debt (1) $ 6,254.5 $ 5,849.0 $ 5,442.3 Shareholders' Equity $ 2,029.6 $ 2,019.2 $ 1,957.4 Recourse Leverage (2) 3.1 2.9 2.8 ________ (1) Includes recourse debt, commercial paper and bank credit facilities, and operating and finance lease obligations, net of unrestricted cash and short-term investments.
The following table shows the components of recourse leverage as of December 31 (in millions, except recourse leverage ratio): 2023 2022 2021 Debt and lease obligations, net of unrestricted cash and short-term investments: Unrestricted cash and short-term investments $ (450.7) $ (452.2) $ (344.3) Commercial paper and bank credit facilities 11.0 17.3 18.1 Recourse debt 7,388.1 6,431.5 5,887.5 Operating lease obligations 226.8 257.9 286.2 Finance lease obligations — — 1.5 Total debt and lease obligations, net of unrestricted cash and short-term investments $ 7,175.2 $ 6,254.5 $ 5,849.0 Total recourse debt (1) $ 7,175.2 $ 6,254.5 $ 5,849.0 Shareholders' Equity $ 2,273.0 $ 2,029.6 $ 2,019.2 Recourse Leverage (2) 3.2 3.1 2.9 ________ (1) Includes recourse debt, commercial paper and bank credit facilities, and operating and finance lease obligations, net of unrestricted cash and short-term investments.
Lease terms on renewals for cars in the LPI averaged 33 months in 2022 compared to 32 months in 2021. 31 The following table shows fleet statistics for Rail North America boxcars for the years ended December 31: 2022 2021 2020 Beginning balance 12,946 14,315 15,264 Boxcars added 543 963 450 Boxcars scrapped (230) (933) (1,396) Boxcars sold (4,596) (1,399) (3) Ending balance 8,663 12,946 14,315 Utilization rate at year end (1) 99.9 % 99.7 % 95.8 % Active boxcars at year end (2) 8,657 12,909 13,716 Average active boxcars (3) 10,060 12,929 14,134 _______ (1) Utilization is calculated as the number of boxcars on lease as a percentage of total boxcars in the fleet.
Lease terms on renewals for cars in the LPI averaged 65 months in 2023 compared to 52 months in 2022. 32 The following table shows fleet activity and statistics for Rail North America boxcars for the years ended December 31: 2023 2022 2021 Beginning balance 8,663 12,946 14,315 Boxcars added 1,248 543 963 Boxcars scrapped (459) (230) (933) Boxcars sold (141) (4,596) (1,399) Ending balance 9,311 8,663 12,946 Utilization rate at year end (1) 100.0 % 99.9 % 99.7 % Active boxcars at year end (2) 9,310 8,657 12,909 Average active boxcars (3) 8,944 10,060 12,929 _______ (1) Utilization is calculated as the number of boxcars on lease as a percentage of total boxcars in the fleet.
In 2018, we entered into a multi-year railcar supply agreement with American Railcar Industries, Inc. ("ARI"), pursuant to which we agreed to purchase 7,650 newly built railcars. The order encompasses a mix of tank and freight cars to be delivered over a five-year period, beginning in April 2019 and ending in December 2023.
("ARI"), pursuant to which we agreed to purchase 7,650 newly built railcars. The order encompasses a mix of tank and freight cars to be delivered over a five-year period, beginning in April 2019 and ending in December 2023.
(2) Portfolio proceeds primarily consist of proceeds from sales of operating assets. 41 The following table shows portfolio investments and capital additions by segment for the years ended December 31 (in millions): 2022 2021 2020 Rail North America $ 815.9 $ 574.4 $ 642.0 Rail International 243.9 173.3 216.0 Portfolio Management 149.7 353.0 0.5 Other 46.3 31.2 205.5 Total $ 1,255.8 $ 1,131.9 $ 1,064.0 The increase in portfolio investments and capital additions of $123.9 million in the year ended December 31, 2022 is primarily due to more railcars acquired at Rail North America and Rail International and more tank containers acquired at Trifleet Leasing, partially offset by fewer aircraft spare engines acquired at GEL.
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 following table shows Rail North America's segment results for the years ended December 31 (in millions): 2022 2021 2020 Revenues Lease revenue $ 826.0 $ 814.5 $ 838.3 Other revenue 82.0 77.2 95.8 Total Revenues 908.0 891.7 934.1 Expenses Maintenance expense 238.5 235.4 264.7 Depreciation expense 258.6 261.1 258.6 Operating lease expense 36.1 39.2 49.3 Other operating expense 24.5 30.3 27.3 Total Expenses 557.7 566.0 599.9 Other Income (Expense) Net gain on asset dispositions 119.7 94.3 38.3 Interest expense, net (144.6) (136.2) (139.9) Other (expense) income (4.6) 1.6 (4.9) Share of affiliates' pre-tax earnings (loss) 0.5 — (0.1) Segment Profit $ 321.3 $ 285.4 $ 227.6 Investment Volume $ 815.9 $ 574.4 $ 642.0 The following table shows the components of Rail North America's lease revenue for the years ended December 31 (in millions): 2022 2021 2020 Railcars $ 740.7 $ 720.0 $ 741.9 Boxcars 59.5 67.9 67.1 Locomotives 25.8 26.6 29.3 Total $ 826.0 $ 814.5 $ 838.3 29 Rail North America Fleet Data The following table shows fleet activity for Rail North America railcars, excluding boxcars, for the years ended December 31: 2022 2021 2020 Beginning balance 101,570 103,745 102,845 Cars added 3,712 3,371 4,696 Cars scrapped (2,133) (3,076) (2,153) Cars sold (2,195) (2,470) (1,643) Ending balance 100,954 101,570 103,745 Utilization rate at year end (1) 99.5 % 99.2 % 98.1 % Renewal success rate (2) 85.5 % 82.7 % 70.8 % Active railcars at year end (3) 100,396 100,719 101,815 Average active railcars (4) 100,444 100,769 101,658 _______ (1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
The following table shows Rail North America's segment results for the years ended December 31 (in millions): 2023 2022 2021 Revenues Lease revenue $ 888.8 $ 826.0 $ 814.5 Other revenue 93.9 82.0 77.2 Total Revenues 982.7 908.0 891.7 Expenses Maintenance expense 276.6 238.5 235.4 Depreciation expense 265.9 258.6 261.1 Operating lease expense 36.0 36.1 39.2 Other operating expense 25.9 24.5 30.3 Total Expenses 604.4 557.7 566.0 Other Income (Expense) Net gain on asset dispositions 120.5 119.7 94.3 Interest expense, net (182.9) (144.6) (136.2) Other (expense) income (8.0) (4.6) 1.6 Share of affiliates' pre-tax (loss) earnings (0.6) 0.5 — Segment Profit $ 307.3 $ 321.3 $ 285.4 Investment Volume $ 976.9 $ 815.9 $ 574.4 The following table shows the components of Rail North America's lease revenue for the years ended December 31 (in millions): 2023 2022 2021 Railcars $ 805.5 $ 740.7 $ 720.0 Boxcars 57.2 59.5 67.9 Locomotives 26.1 25.8 26.6 Total $ 888.8 $ 826.0 $ 814.5 30 Rail North America Fleet Data The following table shows fleet activity and statistics for Rail North America railcars, excluding boxcars, for the years ended December 31: 2023 2022 2021 Beginning balance 100,954 101,570 103,745 Railcars added 4,653 3,712 3,371 Railcars scrapped (1,286) (2,133) (3,076) Railcars sold (3,154) (2,195) (2,470) Ending balance 101,167 100,954 101,570 Utilization rate at year end (1) 99.3 % 99.5 % 99.2 % Renewal success rate (2) 84.1 % 85.5 % 82.7 % Active railcars at year end (3) 100,498 100,396 100,719 Average active railcars (4) 100,217 100,444 100,769 _______ (1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
Utilization increased to 93.1% at December 31, 2022. 39 Trifleet Leasing Tank Container Data The following table shows fleet statistics for Trifleet Leasing's tank containers for the years ended December 31: 2022 2021 2020 Ending balance - owned and managed 21,999 19,996 19,031 Utilization rate at year-end - owned and managed (1) 93.1 % 89.2 % 80.2 % _______ (1) Utilization is calculated as the number of tank containers on lease as a percentage of total tank containers in the fleet.
Utilization was 87.3% at December 31, 2023. 41 Trifleet Tank Container Data The following table shows fleet statistics for Trifleet's tank containers for the years ended December 31: 2023 2022 2021 Ending balance - owned and managed 23,931 21,999 19,996 Utilization rate at year-end - owned and managed (1) 87.3 % 93.1 % 89.2 % _______ (1) Utilization is calculated as the number of tank containers on lease as a percentage of total tank containers in the fleet.
The following table shows Portfolio Management’s segment results for the years ended December 31 (in millions): 2022 2021 2020 Revenues Lease revenue $ 33.0 $ 28.1 $ 0.8 Marine operating revenue 18.9 19.1 15.6 Other revenue 1.7 0.5 0.6 Total Revenues 53.6 47.7 17.0 Expenses Marine operating expense 14.1 17.5 19.7 Depreciation expense 17.8 17.6 5.3 Other operating expense 2.3 1.7 0.5 Total Expenses 34.2 36.8 25.5 Other Income (Expense) Net (loss) gain on asset dispositions (31.1) 8.0 2.2 Interest expense, net (19.0) (16.6) (12.2) Other income — 2.0 — Share of affiliates' pre-tax earnings 45.4 56.5 95.9 Segment Profit $ 14.7 $ 60.8 $ 77.4 Investment Volume $ 149.7 $ 353.0 $ 0.5 The following table shows the net book value of Portfolio Management’s assets as of December 31 (in millions): 2022 2021 Investment in RRPF Affiliates $ 574.3 $ 588.1 GEL owned aircraft spare engines 475.0 340.4 Specialized Gas Vessels 25.1 103.6 Other owned assets 32.2 16.6 Managed assets (1) 2.3 9.8 ________ (1) Amounts shown represent the estimated net book value of assets managed for third parties and are not included in our consolidated balance sheets. 37 RRPF Affiliates Engine Portfolio Data As of December 31, 2022, the RRPF affiliates' portfolio consisted of 398 aircraft spare engines with a net book value of $4,176.5 million, compared to 407 aircraft spare engines with a net book value of $4,399.9 million at the end of 2021.
The following table shows Portfolio Management’s segment results for the years ended December 31 (in millions): 2023 2022 2021 Revenues Lease revenue $ 32.6 $ 33.0 $ 28.1 Non-dedicated engine revenue 37.6 1.5 — Marine operating revenue 6.9 18.9 19.1 Other revenue 0.1 0.2 0.5 Total Revenues 77.2 53.6 47.7 Expenses Marine operating expense 6.5 14.1 17.5 Depreciation expense 28.3 17.8 17.6 Other operating expense 7.3 2.3 1.7 Total Expenses 42.1 34.2 36.8 Other Income (Expense) Net gain (loss) on asset dispositions 2.2 (31.1) 8.0 Interest expense, net (29.8) (19.0) (16.6) Other income 0.2 — 2.0 Share of affiliates' pre-tax earnings 98.7 45.4 56.5 Segment Profit $ 106.4 $ 14.7 $ 60.8 Investment Volume $ 267.3 $ 149.7 $ 353.0 The following table shows the net book value of Portfolio Management’s assets as of December 31 (in millions): 2023 2022 Investment in RRPF Affiliates $ 626.8 $ 574.3 GEL owned aircraft spare engines 714.0 475.0 Specialized Gas Vessels — 25.1 Other owned assets 14.3 32.2 Total assets $ 1,355.1 $ 1,106.6 39 RRPF Affiliates Portfolio Data As of December 31, 2023, the RRPF affiliates' portfolio consisted of 399 aircraft spare engines with a net book value of $4,067.2 million, compared to 398 aircraft spare engines with a net book value of $4,176.5 million at the end of 2022.
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, 2022, we had an unrestricted cash balance of $303.7 million and investments in short-term U.S. Treasury Obligations of $148.5 million.
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.
As of December 31, 2022, the full $600 million was available under this facility. Additionally, we have a $250 million 3-year unsecured revolving credit facility in the United States. In 2022, we also entered into an amendment to this facility to extend the maturity by one year from May 2024 to May 2025 and to replace LIBOR with Term SOFR.
In 2023, we entered into an amendment to this facility to extend the maturity by one year from May 2027 to May 2028. As of December 31, 2023, the full $600 million was available under this facility. Additionally, we have a $250 million 3-year unsecured revolving credit facility in the United States.
RRPF results are expected to be higher as the gradual improvement in air travel is expected to continue. We anticipate the contribution to segment profit from GEL, our wholly owned aircraft spare engine leasing business, to increase as a result of additional engines acquired in 2022.
We expect an increase in the contribution to segment profit from GEL, our wholly owned aircraft spare engine leasing business, as a result of additional aircraft spare engines acquired during 2023. In addition, RRPF results are expected to be higher as a result of continued improvement in global air travel.
Unallocated interest income (expense) (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.
Unallocated interest income (expense) (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. Other income (expense), including eliminations, was favorable by $21.9 million in 2023 compared to 2022.
The following table shows Rail International's segment results for the years ended December 31 (in millions): 2022 2021 2020 Revenues Lease revenue $ 266.2 $ 272.9 $ 248.4 Other revenue 9.1 11.4 9.7 Total Revenues 275.3 284.3 258.1 Expenses Maintenance expense 51.4 57.6 50.8 Depreciation expense 69.1 73.6 66.6 Other operating expense 8.3 9.0 7.5 Total Expenses 128.8 140.2 124.9 Other Income (Expense) Net (loss) gain on asset dispositions (11.2) 2.7 1.2 Interest expense, net (45.6) (45.2) (45.9) Other (expense) income (3.8) 3.4 (5.0) Segment Profit $ 85.9 $ 105.0 $ 83.5 Investment Volume $ 243.9 $ 173.3 $ 216.0 GRE Fleet Data The following table shows fleet activity for GRE railcars for the years ended December 31: 2022 2021 2020 Beginning balance 27,109 26,343 24,561 Cars added 1,211 1,131 2,071 Cars scrapped or sold (315) (365) (289) Ending balance 28,005 27,109 26,343 Utilization rate at year end (1) 99.3 % 98.7 % 98.1 % Active railcars at year end (2) 27,801 26,754 25,831 Average active railcars (3) 27,288 26,240 25,174 _______ (1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
Financial results were not material to Rail International's segment profit. 34 The following table shows Rail International's segment results for the years ended December 31 (in millions): 2023 2022 2021 Revenues Lease revenue $ 296.6 $ 266.2 $ 272.9 Other revenue 12.9 9.1 11.4 Total Revenues 309.5 275.3 284.3 Expenses Maintenance expense 64.1 51.4 57.6 Depreciation expense 68.2 69.1 73.6 Other operating expense 10.4 8.3 9.0 Total Expenses 142.7 128.8 140.2 Other Income (Expense) Net gain (loss) on asset dispositions 7.0 (11.2) 2.7 Interest expense, net (56.2) (45.6) (45.2) Other (expense) income (4.2) (3.8) 3.4 Segment Profit $ 113.4 $ 85.9 $ 105.0 Investment Volume $ 382.4 $ 243.9 $ 173.3 GRE Fleet Data The following table shows fleet activity and statistics for GRE railcars for the years ended December 31: 2023 2022 2021 Beginning balance 28,005 27,109 26,343 Railcars added 1,695 1,211 1,131 Railcars scrapped or sold (484) (315) (365) Ending balance 29,216 28,005 27,109 Utilization rate at year end (1) 95.9 % 99.3 % 98.7 % Active railcars at year end (2) 28,004 27,801 26,754 Average active railcars (3) 27,947 27,288 26,240 _______ (1) Utilization is calculated as the number of railcars on lease as a percentage of total railcars in the fleet.
During 2022, we repurchased 0.5 million shares of common stock for $47.2 million, excluding commissions, compared to 0.1 million shares repurchased for $13.1 million, excluding commissions, in 2021. As of December 31, 2022, $89.6 million remained available under the repurchase authorization.
During 2023, we repurchased 24,520 shares of common stock for $2.6 million, excluding commissions, compared to 472,609 shares repurchased for $47.2 million, excluding commissions, in 2022. As of December 31, 2023, $87.1 million remained available under the repurchase authorization.
(8) Deferred income tax adjustments due to an enacted corporate income tax rate increase in the United Kingdom in 2021 and the elimination of a previously announced corporate income tax rate reduction in the United Kingdom in 2020. 2022 2021 2020 Return on Equity (GAAP) 7.7 % 7.2 % 8.0 % Return on Equity, excluding tax adjustments and other items (non-GAAP) 10.8 % 9.2 % 8.6 % 51
(9) Deferred income tax adjustment due to an enacted corporate income tax rate increase in the United Kingdom in 2021. 2023 2022 2021 Return on Equity (GAAP) 12.0 % 7.7 % 7.2 % Return on Equity, excluding tax adjustments and other items (non-GAAP) 12.0 % 10.8 % 9.2 % 52
The following table shows other investing activity for the years ended December 31 (in millions): 2022 2021 2020 Proceeds from sales of other assets (1) $ 31.1 $ 54.7 $ 26.0 Short-term investments (2) (148.5) — — Other 30.1 (27.6) 2.0 Total $ (87.3) $ 27.1 $ 28.0 ________ (1) Proceeds from sales of other assets for all periods were primarily related to railcar scrapping.
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.
For the majority of our operating assets, the economic useful life is greater than 30 years. The residual values are based on historical experience and economic factors. We periodically review the appropriateness of our estimates of useful lives and residual values based on changes in economic circumstances and other factors.
For the majority of our operating assets, the economic useful life is greater than 30 years. We periodically review the appropriateness of our estimates of useful lives based on changes in economic circumstances and other factors. Changes in these estimates would result in a change in future depreciation expense.
The following tables show our net income, diluted earnings per share, and return on equity, excluding tax adjustments and other items for the years ended December 31 (in millions, except per share data): 49 Impact of Tax Adjustments and Other Items on Net Income: 2022 2021 2020 Net income (GAAP) $ 155.9 $ 143.1 $ 151.3 Less: Net income from discontinued operations (GAAP) — — 1.1 Net income from continuing operations (GAAP) $ 155.9 $ 143.1 $ 150.2 Adjustments attributable to pre-tax income from continuing operations: Rail Russia impairment at Rail International (1) $ 14.6 $ — $ — Specialized Gas Vessels impairment at Portfolio Management (2) 34.3 — — Environmental remediation costs (3) 5.9 — — Net insurance proceeds (4) — (5.3) — Debt extinguishment costs (5) — 4.5 — Total adjustments attributable to pre-tax income from continuing operations $ 54.8 $ (0.8) $ — Income taxes thereon, based on applicable effective tax rate $ (1.5) $ 0.2 $ — Other income tax adjustments attributable to income from continuing operations: Income tax rate change (6) (3.0) — — Total other income tax adjustments attributable to income from continuing operations $ (3.0) $ — $ — Adjustments attributable to affiliates' earnings from continuing operations, net of taxes: Aircraft spare engine impairment at RRPF (7) $ 11.5 $ — $ — Income tax rate changes (8) — 39.7 12.3 Total adjustments attributable to affiliates' earnings from continuing operations, net of taxes $ 11.5 $ 39.7 $ 12.3 Net income from continuing operations, excluding tax adjustments and other items (non-GAAP) $ 217.7 $ 182.2 $ 162.5 Net income from discontinued operations, excluding tax adjustments and other items (non-GAAP) $ — $ — $ 1.1 Net income from consolidated operations, excluding tax adjustments and other items (non-GAAP) $ 217.7 $ 182.2 $ 163.6 50 Impact of Tax Adjustments and Other Items on Diluted Earnings per Share: 2022 2021 2020 Diluted earnings per share from consolidated operations (GAAP) $ 4.35 $ 3.98 $ 4.27 Less: Diluted earnings per share from discontinued operations (GAAP) — — 0.03 Diluted earnings per share from continuing operations (GAAP) $ 4.35 $ 3.98 $ 4.24 Adjustments attributable to income from continuing operations, net of taxes: Rail Russia impairment at Rail International (1) 0.41 — — Specialized Gas Vessels impairment at Portfolio Management (2) 0.96 — — Environmental remediation costs (3) 0.12 — — Income tax rate change (6) (0.08) — — Net insurance proceeds (4) — (0.11) — Debt extinguishment costs (5) — 0.09 — Adjustments attributable to affiliates' earnings from continuing operations, net of taxes: Aircraft spare engine impairment at RRPF (7) 0.32 — — Income tax rate changes (8) — 1.10 0.35 Diluted earnings per share from continuing operations, excluding tax adjustments and other items (non-GAAP) * $ 6.07 $ 5.06 $ 4.59 Diluted earnings per share from discontinued operations, excluding tax adjustments and other items (non-GAAP) $ — $ — $ 0.03 Diluted earnings per share from consolidated operations, excluding tax adjustments and other items (non-GAAP) $ 6.07 $ 5.06 $ 4.62 \ (*) Sum of individual components may not be additive due to rounding. _______ (1) In 2022, we made the decision to exit our rail business in Russia.
Accordingly, we believe presenting this information provides investors and other users of our financial statements with meaningful supplemental information for purposes of analyzing year-to-year financial performance on a comparable basis and assessing trends. 50 The following tables show our net income, diluted earnings per share, and return on equity, excluding tax adjustments and other items for the years ended December 31 (in millions, except per share data): Impact of Tax Adjustments and Other Items on Net Income: 2023 2022 2021 Net income (GAAP) $ 259.2 $ 155.9 $ 143.1 Adjustments attributable to consolidated pre-tax income: Loss on Specialized Gas Vessels at Portfolio Management (1) $ 4.0 $ 34.3 $ — Net (gain) loss on Rail Russia at Rail International (2) (0.3) 14.6 — Environmental remediation costs (3) — 5.9 — Net insurance proceeds (4) — — (5.3) Debt extinguishment costs (5) — — 4.5 Total adjustments attributable to consolidated pre-tax income $ 3.7 $ 54.8 $ (0.8) Income taxes thereon, based on applicable effective tax rate $ — $ (1.5) $ 0.2 Other income tax adjustments attributable to consolidated income: Income tax rate changes (6) $ (3.0) $ (3.0) $ — Net operating loss valuation allowance adjustment (7) (2.3) — — Total other income tax adjustments attributable to consolidated income $ (5.3) $ (3.0) $ — Adjustments attributable to affiliates' earnings, net of taxes: Aircraft spare engine impairment at RRPF (8) $ — $ 11.5 $ — Income tax rate change (9) — — 39.7 Total adjustments attributable to affiliates' earnings, net of taxes $ — $ 11.5 $ 39.7 Net income, excluding tax adjustments and other items (non-GAAP) $ 257.6 $ 217.7 $ 182.2 51 Impact of Tax Adjustments and Other Items on Diluted Earnings per Share: 2023 2022 2021 Diluted earnings per share (GAAP) $ 7.12 $ 4.35 $ 3.98 Adjustments attributable to consolidated income, net of taxes: Loss on Specialized Gas Vessels at Portfolio Management (1) $ 0.11 $ 0.96 $ — Net (gain) loss on Rail Russia at Rail International (2) (0.01) 0.41 — Environmental remediation costs (3) — 0.12 — Net insurance proceeds (4) — — (0.11) Debt extinguishment costs (5) — — 0.09 Other income tax adjustments attributable to consolidated income: Income tax rate changes (6) (0.08) (0.08) — Net operating loss valuation allowance adjustment (7) (0.06) — — Adjustments attributable to affiliates' earnings, net of taxes: Aircraft spare engine impairment at RRPF (8) — 0.32 — Income tax rate change (9) — — 1.10 Diluted earnings per share, excluding tax adjustments and other items (non-GAAP)* $ 7.07 $ 6.07 $ 5.06 (*) Sum of individual components may not be additive due to rounding. _______ (1) In 2022, we made the decision to sell the Specialized Gas Vessels.
(2) Primarily railcar purchase commitments. The amounts shown for all years are based on management's estimates of the timing, anticipated car types, and related costs of railcars to be purchased under its agreements.
(2) Primarily railcar purchase commitments. The amounts shown for all years are based on management's estimates of the timing, anticipated railcar types, and related costs of railcars to be purchased under its agreements. For additional details on our purchase agreements, refer to the discussion of Rail North America operating results within this Item.
In 2018, we amended a long-term supply agreement with Trinity to extend the term to December 2023, and we agreed to purchase 4,800 tank cars (1,200 per year) beginning in January 2020 and continuing through 2023. At December 31, 2022, 4,454 railcars have been ordered pursuant to the amended terms of the agreement, of which 3,572 railcars have been delivered.
In 2018, we amended a long-term supply agreement with Trinity to extend the term to December 2023, and we agreed to purchase 4,800 tank cars (1,200 per year) beginning in January 2020 and continuing through 2023.
GATX Common Stock Repurchases On January 25, 2019, our board of directors approved a $300.0 million share repurchase program, pursuant to which we are authorized to purchase shares of our common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to Rule 10b5-1 plans.
Additional contributions will depend primarily on plan asset investment returns and actuarial experience, and subject to the impact of these factors, we may make additional material plan contributions. 47 GATX Common Stock Repurchases On January 25, 2019, our board of directors approved a $300.0 million share repurchase program, pursuant to which we are authorized to purchase shares of our common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to Rule 10b5-1 plans.
(2) Average leased engines for the year is calculated using the number of leased engines at the end of each month. Comparison of Reported Results Segment Profit In 2022, segment profit was $14.7 million compared to $60.8 million in 2021.
(2) Average leased engines for the year is calculated using the number of leased engines at the end of each month. Comparison of Reported Results Segment Profit In 2023, segment profit was $106.4 million compared to $14.7 million in 2022. Segment profit in 2023 included $4.0 million of losses associated with the Specialized Gas Vessels.
For additional details on our purchase agreements, refer to the discussion of Rail North America operating results within this section. 2023 Liquidity Outlook In addition to our contractual obligations, expenditures in 2023 may also include the purchase of railcars, tank containers, and aircraft spare engines and other discretionary capital spending for opportunistic asset purchases or strategic investments.
Liquidity Outlook In addition to our contractual obligations, expenditures in 2024 may also include the purchase of railcars, tank containers, and aircraft spare engines and other discretionary capital spending for opportunistic asset purchases or strategic investments.
Treasury Obligations with an original maturity date of over 90 days. 42 Net Cash Provided by (Used in) Financing Activities The following table shows net cash provided by (used in) financing activities for the years ended December 31 (in millions): 2022 2021 2020 Net proceeds from issuances of debt (original maturities longer than 90 days) (3) $ 848.3 $ 1,491.9 $ 1,586.5 Repayments of debt (original maturities longer than 90 days) (3) (250.0) (884.0) (1,100.0) Net increase (decrease) in debt with original maturities of 90 days or less — (4.1) 6.4 Purchases of assets previously leased (1) (1.5) (77.2) (40.0) Stock repurchases (2) (47.2) (13.1) — Dividends (76.6) (74.3) (71.0) Other 31.4 23.9 (26.3) Total $ 504.4 $ 463.1 $ 355.6 ________ (1) In 2022, we purchased 21 railcars that were previously leased, compared to 2,329 railcars in 2021.
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.
The following table shows components of Other for the years ended December 31 (in millions): 2022 2021 2020 Trifleet Leasing revenue $ 36.1 $ 33.7 $ — Trifleet Leasing segment profit $ 13.8 $ 10.2 $ — Unallocated interest income (expense) 1.1 (0.5) 7.7 Other (expense) income, including eliminations (18.8) (11.0) (3.1) Segment (Loss) Profit $ (3.9) $ (1.3) $ 4.6 Selling, general and administrative expense $ 195.0 $ 198.3 $ 172.0 Trifleet Leasing Summary The tank container leasing market was strong in 2022 and demand for tank containers was robust.
The following table shows components of Other for the years ended December 31 (in millions): 2023 2022 2021 Trifleet revenue $ 41.5 $ 36.1 $ 33.7 Trifleet segment profit $ 13.4 $ 13.8 $ 10.2 Unallocated interest income (expense) 12.7 1.1 (0.5) Other income (expense), including eliminations 3.1 (18.8) (11.0) Segment Profit (Loss) $ 29.2 $ (3.9) $ (1.3) Selling, general and administrative expense $ 212.7 $ 195.0 $ 198.3 Investment Volume $ 38.4 $ 46.3 $ 29.8 Trifleet Summary The tank container leasing market experienced softer demand across certain regions in 2023, with some customers postponing tank container fleet decisions.
As of December 31, 2022, our long-term unsecured debt was rated BBB by Standard & Poor's and Baa2 by Moody’s Investor Service and our short-term unsecured debt was rated A-2 by Standard & Poor's and P-2 by Moody’s Investor Service. Our rating outlook from both agencies was stable.
As of December 31, 2023, our long-term unsecured debt was rated BBB by Standard & Poor's, Baa2 by Moody’s Investor Service, and BBB+ by Fitch Ratings, Inc., and our short-term unsecured debt was rated A-2 by Standard & Poor's, P-2 by Moody’s Investor Service, and F2 by Fitch Ratings, Inc.
Our lease classification analysis relies on certain assumptions that require judgment, such as the asset's fair value, the asset's estimated residual value, the interest rate implicit in the lease, and the asset's economic useful life.
Lease Classification We analyze all new and modified leases to determine whether we should classify the lease as an operating or finance lease. Our lease classification analysis relies on certain assumptions that require judgment, such as the asset's fair value, the asset's estimated residual value, the interest rate implicit in the lease, and the asset's economic useful life.
SG&A, Unallocated Interest and Other SG&A decreased $3.3 million in 2022, driven by lower employee compensation expenses, including lower share-based compensation expense, and the impact of foreign exchange rates, partially offset by higher discretionary expenses and information technology costs.
SG&A, Unallocated Interest and Other SG&A increased $17.7 million in 2023, driven by higher employee-related expenses, including the impacts of share-based compensation expenses, higher legal costs, higher information technology expenses, and the impact of foreign exchange rates.
Contractual Cash Receipts Information regarding our contractual cash receipts arising from future rental receipts from noncancelable operating leases and from our finance leases as of December 31, 2022 is presented in "Note 6. Leases" within Item 8 of this Form 10-K.
Based on the available sources of liquidity, we also expect to meet our funding needs beyond 2024. 45 Contractual Cash Receipts Information regarding our contractual cash receipts arising from future rental receipts from noncancelable operating leases and from our finance leases as of December 31, 2023 is presented in "Note 6. Leases" within Item 8 of this Form 10-K.
GATX's 50% share of this net impairment was $15.3 million ($11.5 million after tax). 26 DISCUSSION OF OPERATING RESULTS The following table shows a summary of our reporting segments and consolidated financial results relating to continuing operations and discontinued operations for the years ended December 31 (dollars in millions, except per share data): 2022 2021 2020 Segment Revenues Rail North America $ 908.0 $ 891.7 $ 934.1 Rail International 275.3 284.3 258.1 Portfolio Management 53.6 47.7 17.0 Other 36.1 33.7 — $ 1,273.0 $ 1,257.4 $ 1,209.2 Segment Profit (Loss) Rail North America $ 321.3 $ 285.4 $ 227.6 Rail International 85.9 105.0 83.5 Portfolio Management 14.7 60.8 77.4 Other (3.9) (1.3) 4.6 418.0 449.9 393.1 Less: Selling, general and administrative expense 195.0 198.3 172.0 Income taxes ($12.3, $55.3 and $33.6 related to affiliates' earnings) 67.1 108.5 70.9 Net Income from Continuing Operations (GAAP) $ 155.9 $ 143.1 $ 150.2 Discontinued Operations, Net of Taxes Net loss from discontinued operations, net of taxes — — (2.2) Gain on sale of discontinued operation, net of taxes — — 3.3 Total Discontinued Operations, Net of Taxes (GAAP) — — 1.1 Net Income (GAAP) $ 155.9 $ 143.1 $ 151.3 Net income from continuing operations, excluding tax adjustments and other items (non-GAAP) (1) $ 217.7 $ 182.2 $ 162.5 Net income from discontinued operations, excluding tax adjustments and other items (non-GAAP) (1) $ — $ — $ 1.1 Net income from consolidated operations, excluding tax adjustments and other items (non-GAAP) (1) $ 217.7 $ 182.2 $ 163.6 Diluted earnings per share from continuing operations (GAAP) $ 4.35 $ 3.98 $ 4.24 Diluted earnings per share from discontinued operations (GAAP) $ — $ — $ 0.03 Diluted earnings per share from consolidated operations (GAAP) $ 4.35 $ 3.98 $ 4.27 Diluted earnings per share from continuing operations, excluding tax adjustments and other items (non-GAAP) (1) $ 6.07 $ 5.06 $ 4.59 Diluted earnings per share from discontinued operations, excluding tax adjustments and other items (non-GAAP) (1) $ — $ — $ 0.03 Diluted earnings per share from consolidated operations, excluding tax adjustments and other items (non-GAAP) (1) $ 6.07 $ 5.06 $ 4.62 Return on equity (GAAP) 7.7 % 7.2 % 8.0 % Return on equity, excluding tax adjustments and other items (non-GAAP) (1) 10.8 % 9.2 % 8.6 % Investment Volume $ 1,255.8 $ 1,131.9 $ 1,064.0 _________ (1) See "Non-GAAP Financial Measures" at the end of this item for further details. 27 2022 Summary Net income from continuing operations was $155.9 million, or $4.35 per diluted share, for 2022 compared to $143.1 million, or $3.98 per diluted share, for 2021, and $150.2 million, or $4.24 per diluted share, for 2020.
This discussion does not include the comparison of prior year 2022 to 2021 financial results, which can be found in the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 , as filed with the SEC on February 16, 2023. 27 DISCUSSION OF OPERATING RESULTS The following table shows a summary of our reporting segments and consolidated financial results for the years ended December 31 (dollars in millions, except per share data): 2023 2022 2021 Segment Revenues Rail North America $ 982.7 $ 908.0 $ 891.7 Rail International 309.5 275.3 284.3 Portfolio Management 77.2 53.6 47.7 Other 41.5 36.1 33.7 $ 1,410.9 $ 1,273.0 $ 1,257.4 Segment Profit (Loss) Rail North America $ 307.3 $ 321.3 $ 285.4 Rail International 113.4 85.9 105.0 Portfolio Management 106.4 14.7 60.8 Other 29.2 (3.9) (1.3) 556.3 418.0 449.9 Less: Selling, general and administrative expense 212.7 195.0 198.3 Income taxes ($25.7, $12.3 and $55.3 related to affiliates' earnings) 84.4 67.1 108.5 Net Income (GAAP) $ 259.2 $ 155.9 $ 143.1 Net income, excluding tax adjustments and other items (non-GAAP) (1) $ 257.6 $ 217.7 $ 182.2 Diluted earnings per share (GAAP) $ 7.12 $ 4.35 $ 3.98 Diluted earnings per share, excluding tax adjustments and other items (non-GAAP) (1) $ 7.07 $ 6.07 $ 5.06 Return on equity (GAAP) 12.0 % 7.7 % 7.2 % Return on equity, excluding tax adjustments and other items (non-GAAP) (1) 12.0 % 10.8 % 9.2 % Investment Volume $ 1,665.0 $ 1,255.8 $ 1,131.9 _________ (1) See "Non-GAAP Financial Measures" at the end of this item for further details. 2023 Summary Net income was $259.2 million, or $7.12 per diluted share, for 2023 compared to $155.9 million, or $4.35 per diluted share, for 2022, and $143.1 million, or $3.98 per diluted share, for 2021.
In 2022, fluctuations in the value of the euro, relative to the U.S. dollar, negatively impacted lease revenue by approximately $27.5 million and segment profit, excluding other income (expense), by approximately $13.8 million compared to 2021. 35 Segment Profit In 2022, segment profit of $85.9 million decreased 18.2% compared to $105.0 million in 2021.
In 2023, fluctuations in the value of the euro, relative to the U.S. dollar, positively impacted lease revenue by approximately $7.4 million and segment profit, excluding other income (expense), by approximately $2.7 million compared to 2022. 37 Segment Profit In 2023, segment profit of $113.4 million increased 32.0% compared to $85.9 million in 2022.
In 2022, GATX executed a multi-party amended and restated settlement agreement related to its share of estimated environmental remediation costs to be incurred at a previously owned facility that was sold in 1974. This agreement establishes GATX's share of responsibility for future costs required to complete the remediation and closure of the site.
In 2022, GATX executed a multi-party amended and restated settlement agreement related to its share of estimated environmental remediation costs to be incurred at a previously owned facility that was sold in 1974. As a result, GATX recorded $5.9 million of expense to establish a reserve for its share of the remaining anticipated remediation and related costs.
Our access to capital markets at competitive rates depends on our credit rating and rating outlook, as determined by rating agencies.
Credit Ratings The global capital market environment and outlook may affect our funding options and our financial performance. Our access to capital markets at competitive rates depends on our credit rating and rating outlook, as determined by rating agencies.
In January 2023, Fitch Ratings, Inc. assigned our long-term unsecured debt a rating of BBB+ and our short-term unsecured debt a rating of F-2. Our rating outlook was stable. Leverage Leverage is expressed as a ratio of debt (including debt and lease obligations, net of unrestricted cash and short-term investments) to equity.
Our rating outlook from all agencies was stable. 46 Leverage Leverage is expressed as a ratio of debt (including debt and lease obligations, net of unrestricted cash and short-term investments) to equity.
The following table shows our cash flows from operating, investing and financing activities for the years ended December 31 (in millions): 2022 2021 2020 Net Cash Provided by Operating Activities $ 533.5 $ 507.2 $ 436.8 Net Cash Used in Investing Activities (1,073.5) (917.7) (904.9) Net Cash Provided by Financing Activities 504.4 463.1 355.6 Effect of Exchange Rate Changes on Cash and Cash Equivalents (4.9) (1.8) (0.1) Net Cash Provided by Discontinued Operations — 1.1 254.2 Net (decrease) increase in Cash, Cash Equivalents, and Restricted Cash during the year $ (40.5) $ 51.9 $ 141.6 Net Cash Provided by Operating Activities Net cash provided by operating activities of $533.5 million increased $26.3 million compared to 2021.
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. 42 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.
GRE also continued to grow and diversify its fleet during the year. Our rail operations in India ("Rail India") continued to focus on investment opportunities, diversification of its fleet, and developing relationships with customers, suppliers and the Indian Railways.
Our rail operations in India ("Rail India") achieved strong operating results and continued to grow and diversify its fleet during 2023. Rail India continued to focus on investment opportunities, diversification of its fleet, and developing relationships with customers, suppliers and the Indian Railways. Demand for railcars in India was robust, driven by continued growth in the economy and infrastructure development.
Commercial Commitments" within Item 8 of this Annual Report. 46 Defined Benefit Plan Contributions In 2022, we contributed $16.2 million to our defined benefit pension plans and other post-retirement benefit plans. In 2023, we expect to contribute approximately $7.6 million. As of December 31, 2022, our funded pension plans in the aggregate were 102.6% funded.
Our commercial commitments at December 31, 2023 are presented in "Note 15. Commercial Commitments" within Item 8 of this Form 10-K. Defined Benefit Plan Contributions In 2023, we contributed $7.1 million to our defined benefit pension plans and other post-retirement benefit plans. In 2024, we expect to contribute approximately $4.4 million.
(3) Reserve recorded as part of an executed agreement for anticipated remediation costs at a previously owned property, sold in 1974. (4) Net gain from insurance recoveries for storm damage to a maintenance facility at Rail North America. (5) Write-off of unamortized deferred financing costs associated with the early redemption of our $150 million 5.625% Senior Notes due 2066.
In the first quarter of 2023, we sold Rail Russia and recorded a gain on the final sale of this business. (3) Reserve recorded as part of an executed agreement for anticipated remediation costs at a previously owned property, sold in 1974. (4) Net gain from insurance recoveries for storm damage to a maintenance facility at Rail North America.
The increase was primarily attributable to higher net gains on asset dispositions. • At Rail International, segment profit in 2022 was lower than prior year, due to the impairment of Rail Russia and the negative impact of foreign exchange rates, partially offset by higher revenue from more railcars on lease. • At Portfolio Management, segment profit in 2022 decreased compared to prior year, primarily due to the impairment on the Specialized Gas Vessels and lower share of affiliates' earnings from the RRPF affiliates, driven by an impairment charge associated with engines in Russia that RRPF does not expect to recover. • Within Other, Trifleet Leasing's contribution to the segment profit was higher than prior year, a result of higher revenue from more tank containers on lease.
The decrease was primarily attributable to higher maintenance and interest expenses, partially offset by higher lease revenue. • At Rail International, segment profit in 2023 was higher than prior year due to the absence of the impairment of Rail Russia recorded in the prior year and higher lease revenue from more railcars on lease and higher lease rates, partially offset by higher maintenance and interest expenses. • At Portfolio Management, segment profit in 2023 increased compared to prior year due to higher earnings at the RRPF affiliates, higher results from GATX Engine Leasing ("GEL") operations, and the impact of impairments recorded in 2022 and 2023 for the Specialized Gas Vessels and in 2022 for engines in Russia that RRPF does not expect to recover. 28 • Within Other, Trifleet's segment profit decreased due to higher maintenance and interest expenses, partially offset by higher lease revenue, resulting from more tank containers in the fleet, and higher repair revenue.
Excluding these losses, results for Portfolio Management were $3.5 million higher than 2021, driven by higher share of affiliates' earnings at the RRPF affiliates. 38 Revenues In 2022, lease revenue was $33.0 million compared to $28.1 million in 2021, due to a full year of operations at GEL for engines acquired in 2021.
Excluding these losses, results for Portfolio Management were $46.1 million higher than 2022, primarily driven by higher earnings at the RRPF affiliates and higher results from GEL operations. 40 Revenues In 2023, lease revenue was comparable to the prior year.
As a result, we recorded losses associated with the impairment of the net assets. (2) In 2022, we made the decision to sell the Specialized Gas Vessels. As a result, we recorded losses associated with the impairments of these assets.
We have recorded gains and losses associated with the subsequent impairments and sales of these assets. (2) In 2022, we made the decision to exit Rail Russia and recorded losses in 2022 associated with the impairment of the net assets.
Lease rates for railcars scheduled to renew in 2023 will likely be generally higher than expiring rates as the lease rate environment for existing railcars is expected to remain favorable. We anticipate remarketing income to remain at levels similar to 2022 as we continue to optimize our fleet.
Lease rates for railcars scheduled to renew in 2024 will likely be generally higher than expiring rates as the lease rate environment for existing railcars is expected to remain favorable. The increasing lease rates, along with new additions to the fleet, should generate higher lease revenue in 2024.
(3) Average active locomotives for the year is calculated using the number of active locomotives at the end of each month. 32 Comparison of Reported Results Segment Profit In 2022, segment profit of $321.3 million increased 12.6% compared to $285.4 million in 2021.
(3) Average active locomotives for the year is calculated using the number of active locomotives at the end of each month. 33 Comparison of Reported Results Segment Profit In 2023, segment profit of $307.3 million decreased 4.4% compared to $321.3 million in 2022. The decrease was primarily driven by higher interest and maintenance expenses, partially offset by higher lease revenue.
See "Note 10. Asset Impairments and Assets Held for Sale" in Part II, Item 8 of this Form 10-K for further information. On January 31, 2023, we completed the sale of Rail Russia. See "Note 26. Subsequent Events" in Part II, Item 8 of this Form 10-K. RRPF financial results have also been affected by the conflict.
Financial results for our tank container leasing business ("Trifleet") are reported in the Other segment. In 2023, we sold our rail business in Russia ("Rail Russia") . See "Note 10. Asset Impairments and Assets Held for Sale" in Part II, Item 8 of this Form 10-K for further information.
If management determines that indicators of impairment are present for an investment, we perform an analysis to estimate the fair value of that investment.
Impairment of Investments in Affiliated Companies We review the carrying amount of our investments in affiliates annually, or whenever circumstances indicate that their value may have declined. If management determines that indicators of impairment are present for an investment, we perform an analysis to estimate the fair value of that investment.
Revenues In 2022, lease revenue decreased $6.7 million, or 2.5%, due to the impact of foreign exchange rates, partially offset by more railcars on lease at GRE and Rail India. Other revenue decreased $2.3 million, driven by lower repair revenue and the impact of foreign exchange rates.
The increase was primarily due to higher lease revenue from more railcars on lease and higher lease rates, partially offset by higher maintenance and interest expenses. Revenues In 2023, lease revenue increased $30.4 million, or 11.4%, due to more railcars on lease and higher lease rates at GRE and Rail India and the impact of foreign exchange rates.
This credit facility contains one additional extension option as well. As of December 31, 2022, the full $250 million was available under this facility. Our European subsidiaries have unsecured credit facilities with an aggregate limit of €35.0 million. As of December 31, 2022, €18.9 million was available under these credit facilities.
In 2023, we also entered into an amendment to this facility, which extended the maturity by one year from May 2025 to May 2026. As of December 31, 2023, the full $250 million was available under this facility. Our European subsidiaries have unsecured credit facilities with an aggregate limit of €35.0 million.
Lease revenue is expected to be higher in 2023, resulting from more railcars on lease and higher lease rates. In India, absent any potential supply chain disruptions, we anticipate significant growth in our fleet, which will also contribute to an increase in segment profit. • We anticipate Portfolio Management's segment profit in 2023 to be higher than 2022.
In India, we anticipate significant growth again in our fleet this coming year, which will also contribute to an increase in segment profit. • We anticipate Portfolio Management's segment profit in 2024 to be higher than 2023.
Consolidated Income Taxes See "Note 13. Income Taxes" in Part II, Item 8 of this Form 10-K for additional information on income taxes.
Asset Impairments and Assets Held for Sale" in Part II, Item 8 of this Form 10-K for additional information.
Segment profit in 2022 included a $14.6 million impairment charge recorded as a result of the decision to exit the Rail Russia business. Excluding this impairment, results for Rail International were $4.5 million lower than 2021. The decrease was primarily due to changes in foreign exchange rates, partially offset by more railcars on lease.
Segment profit in 2023 included a $0.3 million disposition gain recorded as a result of the decision to exit the Rail Russia business. Segment profit in 2022 included a $14.6 million impairment charge recorded as a result of the decision to exit the Rail Russia business. Excluding these items, results for Rail International were $12.6 million higher than 2022.
Other Income (Expense) In 2022, net gain on asset dispositions decreased $13.9 million, driven by the impairment recorded as a result of the decision to exit the Rail Russia business. Other (expense) income was unfavorable $7.2 million, driven by the negative impact of changes in foreign exchange rates and higher litigation costs.
Other Income (Expense) In 2023, net gain (loss) on asset dispositions increased $18.2 million, driven by the absence of the impairment recorded in the prior year as a result of the decision to exit the Rail Russia business and more railcars sold at GRE in 2023.
The following table shows portfolio proceeds for the years ended December 31 (in millions): 2022 2021 2020 Proceeds from sales of operating assets $ 269.6 $ 181.1 $ 123.6 Capital distributions and proceeds related to affiliates — — 0.5 Other — 6.0 7.0 Total $ 269.6 $ 187.1 $ 131.1 The increase in portfolio proceeds of $82.5 million in the year ended December 31, 2022 compared to the year ended December 31, 2021 is primarily due to proceeds from the sale of two Specialized Gas Vessels at Portfolio Management and more railcars sold at Rail North America.
The timing of investments depends on purchase commitments, transaction opportunities, and market conditions. 43 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.
Investment Volume During 2022, investment volume was $243.9 million, compared to $173.3 million in 2021. During 2022, GRE acquired 1,211 railcars (including 275 assembled at the GRE Ostróda, Poland facility) and Rail India acquired 1,042 railcars, compared to 1,131 railcars at GRE (including 335 assembled at the GRE Ostróda, Poland facility) and 715 railcars at Rail India in 2021.
Investment Volume During 2023, investment volume was $382.4 million, compared to $243.9 million in 2022. In 2023, GRE acquired 1,695 railcars compared to 1,211 railcars in 2022, and Rail India acquired 2,933 railcars in 2023 compared to 1,042 railcars in 2022.
Finally, we anticipate interest expense to be higher in 2023 compared to what we experienced in 2022. . • Rail International's segment profit in 2023 is expected to increase from 2022 as the demand for railcars in Europe should continue to be strong and we plan to continue to invest in the fleet.
Finally, we anticipate interest expense to be higher in 2024 compared to what we experienced in 2023. . • Rail International's segment profit in 2024 is expected to increase from 2023, driven by continued growth in both our European and India lease fleets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Foreign Currency Exchange Rate Exposure — Certain of our foreign subsidiaries conduct business in currencies other than the U.S. dollar, principally those operating in Austria, Canada, Germany, Poland and the Netherlands.
Foreign Currency Exchange Rate Exposure — Certain of our foreign subsidiaries conduct business in currencies other than the U.S. dollar, principally those operating in Austria, Canada, Germany, Poland, India, and the Netherlands.
As a result, we are exposed to foreign currency risk attributable to changes in the exchange value of the U.S. dollar in terms of the euro, Canadian dollar, and Polish zloty.
As a result, we are exposed to foreign currency risk attributable to changes in the exchange value of the U.S. dollar in terms of the euro, Canadian dollar, Polish zloty, and Indian rupee.
We generally manage the amount of floating rate debt exposure in order to reduce interest expense volatility. Based on our floating rate debt instruments at December 31, 2022, and giving effect to related derivatives, a hypothetical increase in market interest rates of 100 basis points would cause an increase in after-tax interest expense of $4.6 million in 2023.
We generally manage the amount of floating rate debt exposure in order to reduce interest expense volatility. Based on our floating rate debt instruments at December 31, 2023, and giving effect to related derivatives, a hypothetical increase in market interest rates of 100 basis points would cause an increase in after-tax interest expense of $4.2 million in 2024.
Comparatively, at December 31, 2021, a hypothetical 100 basis point increase in interest rates would have resulted in a $4.3 million increase in after-tax interest expense in 2022. Our earnings are also exposed to interest rate changes from affiliates' earnings. Certain affiliates issue floating rate debt instruments to finance their investments.
Comparatively, at December 31, 2022, a hypothetical 100 basis point increase in interest rates would have resulted in a $4.6 million increase in after-tax interest expense in 2023. Our earnings are also exposed to interest rate changes from affiliates' earnings. Certain affiliates issue floating rate debt instruments to finance their investments.
Based on 2022 local currency earnings and considering non-functional currency assets and liabilities recorded as of December 31, 2022, and giving effect to related derivatives, a uniform and hypothetical 10% strengthening in the U.S. dollar versus applicable foreign currencies would decrease after-tax income in 2023 by $8.1 million.
Based on 2023 local currency earnings and considering non-functional currency assets and liabilities recorded as of December 31, 2023, and giving effect to related derivatives, a uniform and hypothetical 10% strengthening in the U.S. dollar versus applicable foreign currencies would decrease after-tax income in 2024 by $9.7 million.
Comparatively, based on 2021 local currency earnings and considering non-functional currency assets and liabilities recorded as of December 31, 2021, a uniform and hypothetical 10% strengthening in the U.S. dollar versus applicable foreign currencies would have decreased after-tax income in 2022 by $8.3 million. 52
Comparatively, based on 2022 local currency earnings and considering non-functional currency assets and liabilities recorded as of December 31, 2022, a uniform and hypothetical 10% strengthening in the U.S. dollar versus applicable foreign currencies would have decreased after-tax income in 2023 by $8.1 million. 53

Other GATX 10-K year-over-year comparisons