Financial Data of Business Segments

The financial data presented below depicts the profitability, financial position, and capital expenditures of each of our business segments.

We lease, operate, manage, and remarket long-lived, widely-used assets, primarily in the rail market. We also invest in joint ventures that complement our existing business activities. We report our financial results through four primary business segments: Rail North America, Rail International, American Steamship Company (“ASC”), and Portfolio Management.

Rail North America is comprised of our wholly owned operations in the United States, Canada, and Mexico, as well as an affiliate investment. Rail North America primarily provides railcars pursuant to full-service leases under which it maintains the railcars, pays ad valorem taxes and insurance, and provides other ancillary services.

Rail International is comprised of our wholly owned European operations ("GATX Rail Europe" or "GRE") and a wholly owned railcar leasing business in India ("Rail India"), as well as one development stage affiliate in China. GRE leases railcars to customers throughout Europe pursuant to full-service leases under which it maintains the railcars and provides value-adding services according to customer requirements.

ASC operates the largest fleet of US-flagged vessels on the Great Lakes, providing waterborne transportation of dry bulk commodities such as iron ore, coal, limestone aggregates, and metallurgical limestone.

Portfolio Management generates leasing, marine operating, asset remarketing and management fee income through a collection of diversified wholly owned assets and joint venture investments.

Segment profit is an internal performance measure used by the Chief Executive Officer to assess the performance of each segment in a given period. Segment profit includes all revenues, pretax earnings from affiliates, and net gains on asset dispositions that are attributable to the segments, as well as expenses that management believes are directly associated with the financing, maintenance, and operation of the revenue earning assets. Segment profit excludes selling, general and administrative expenses, income taxes, and certain other amounts not allocated to the segments. These amounts are included in Other.

We allocate debt balances and related interest expense to each segment based upon a predetermined fixed recourse leverage level expressed as a ratio of recourse debt (including off-balance sheet debt) to equity. The leverage levels are 5:1 for Rail North America, 2:1 for Rail International, 1.5:1 for ASC, and 3:1 for Portfolio Management. We believe that by using this leverage and interest expense allocation methodology, each operating segment’s financial performance reflects appropriate risk-adjusted borrowing costs.

The following tables show certain segment data for the years ended December 31, 2015, 2014, and 2013 (in millions):



	Rail North America			Rail International			ASC			Portfolio Management			Other			GATX Consolidated
2015 Profitability
Revenues
Lease revenue	$	930.9		$	172.9		$	4.1		$	22.2		$	—		$	1,130.1
Marine operating revenue	—			—			166.1			68.9			—			235.0
Other revenue	75.9			7.5			—			1.4			—			84.8
Total Revenues	1,006.8			180.4			170.2			92.5			—			1,449.9
Expenses
Maintenance expense	264.2			39.6			22.3			—			—			326.1
Marine operating expense	—			—			107.2			48.7			—			155.9
Depreciation expense	215.1			43.7			14.3			17.4			—			290.5
Operating lease expense	82.2			—			5.2			—			(0.2		)	87.2
Other operating expense	26.2			5.1			—			7.1			—			38.4
Total Expenses	587.7			88.4			149.0			73.2			(0.2		)	898.1
Other Income (Expense)
Net gain (loss) on asset dispositions	67.2			6.8			(0.1		)	5.3			—			79.2
Interest expense, net	(102.1		)	(22.4		)	(5.3		)	(20.0		)	(5.3		)	(155.1		)
Other expense	(5.2		)	(6.0		)	(0.7		)	—			(1.3		)	(13.2		)
Share of affiliates' earnings (pretax) (1)	0.5			(0.3		)	—			45.2			—			45.4
Segment profit (loss)	$	379.5		$	70.1		$	15.1		$	49.8		$	(6.4	)	508.1
Selling, general and administrative expense																192.4
Income taxes (including $0.5 tax benefits related to affiliates' earnings)																110.4
Net income																$	205.3

Net Gain on Asset Dispositions
Asset Remarketing Income:
Disposition gains on owned assets	66.6			—			—			23.7			—			$	90.3
Residual sharing income	0.8			—			—			12.6			—			13.4
Non-remarketing disposition gains (2)	2.3			7.2			(0.1		)	—			—			9.4
Asset impairment	(2.5		)	(0.4		)	—			(31.0		)	—			(33.9		)
	$	67.2		$	6.8		$	(0.1	)	$	5.3		$	—		$	79.2

Capital Expenditures
Portfolio investments and capital additions	$	524.5		$	148.0		$	20.3		$	18.4		$	3.5		$	714.7

Selected Balance Sheet Data
Investments in affiliated companies	$	12.0		$	1.4		$	—		$	335.1		$	—		$	348.5
Identifiable assets	$	4,629.1		$	1,117.6		$	284.7		$	636.5		$	226.3		$	6,894.2

__________

(1) Includes a $19.0 million impairment loss in the Portfolio Management segment.

(2) Includes scrapping gains.



	Rail North America			Rail International			ASC			Portfolio Management			Other			GATX Consolidated
2014 Profitability
Revenues
Lease revenue	$	864.1		$	188.6		$	4.2		$	29.7		$	—		$	1,086.6
Marine operating revenue	—			—			223.0			63.3			—			286.3
Other revenue	63.4			10.3			—			4.4			—			78.1
Total Revenues	927.5			198.9			227.2			97.4			—			1,451.0
Expenses
Maintenance expense	265.5			45.9			25.6			—			—			337.0
Marine operating expense	—			—			149.2			48.6			—			197.8
Depreciation expense	190.0			47.1			13.6			22.8			—			273.5
Operating lease expense	103.7			—			5.2			—			(0.2		)	108.7
Other operating expense	21.9			5.1			—			1.9			—			28.9
Total Expenses	581.1			98.1			193.6			73.3			(0.2		)	945.9
Other Income (Expense)
Net gain (loss) on asset dispositions	72.3			6.0			(0.5		)	9.4			—			87.2
Interest expense, net	(98.4		)	(24.7		)	(5.6		)	(24.3		)	(5.4		)	(158.4		)
Other expense	(7.2		)	(3.1		)	(0.2		)	(1.2		)	(1.8		)	(13.5		)
Share of affiliates' earnings (pretax)	7.9			(0.3		)	—			60.2			—			67.8
Segment profit (loss)	$	321.0		$	78.7		$	27.3		$	68.2		$	(7.0	)	488.2
Selling, general and administrative expense																189.2
Income taxes (including $18.3 related to affiliates' earnings)																94.0
Net income																$	205.0

Net Gain on Asset Dispositions
Asset Remarketing Income:
Disposition gains on owned assets	$	57.4		$	0.6		$	—		$	5.1		$	—		$	63.1
Residual sharing income	5.2			—			—			4.2			—			9.4
Non-remarketing disposition gains (1)	10.4			5.7			(0.1		)	—			—			16.0
Asset impairment	(0.7		)	(0.3		)	(0.4		)	0.1			—			(1.3		)
	$	72.3		$	6.0		$	(0.5	)	$	9.4		$	—		$	87.2

Capital Expenditures
Portfolio investments and capital additions	$	810.6		$	163.6		$	18.4		$	32.3		$	5.6		$	1,030.5

Selected Balance Sheet Data
Investments in affiliated companies	$	17.2		$	1.8		$	—		$	338.7		$	—		$	357.7
Identifiable assets	$	4,358.2		$	1,228.8		$	286.7		$	813.3		$	232.9		$	6,919.9

__________

(1) Includes scrapping gains.



	Rail North America			Rail International			ASC			Portfolio Management			Other			GATX Consolidated
2013 Profitability
Revenues
Lease revenue	$	758.9		$	180.2		$	4.2		$	31.9		$	—		$	975.2
Marine operating revenue	—			—			223.5			51.6			—			275.1
Other revenue	58.2			8.8			—			3.7			—			70.7
Total Revenues	817.1			189.0			227.7			87.2			—			1,321.0
Expenses
Maintenance expense	228.2			42.9			22.9			—			—			294.0
Marine operating expense	—			—			151.3			38.5			—			189.8
Depreciation expense	176.7			43.2			12.1			23.0			—			255.0
Operating lease expense	124.4			—			5.2			—			(0.2		)	129.4
Other operating expense	18.4			5.3			—			2.4			—			26.1
Total Expenses	547.7			91.4			191.5			63.9			(0.2		)	894.3
Other Income (Expense)
Net gain (loss) on asset dispositions	67.7			3.7			(1.3		)	15.5			—			85.6
Interest expense, net	(106.0		)	(23.9		)	(6.2		)	(26.7		)	(3.8		)	(166.6		)
Other expense (income)	(9.8		)	(1.1		)	0.2			1.4			0.9			(8.4		)
Share of affiliates' earnings (pretax)	10.3			21.1			—			60.9			—			92.3
Segment profit (loss)	$	231.6		$	97.4		$	28.9		$	74.4		$	(2.7	)	429.6
Selling, general and administrative expense																178.3
Income taxes (including $16.5 related to affiliates' earnings)																82.0
Net income																$	169.3

Net Gain on Asset Dispositions
Asset Remarketing Income:
Disposition gains on owned assets	$	51.1		$	0.3		$	—		$	8.6		$	—		$	60.0
Residual sharing income	3.4			—			—			7.4			—			10.8
Non-remarketing disposition gains (1)	14.5			6.2			—			—			—			20.7
Asset impairment	(1.3		)	(2.8		)	(1.3		)	(0.5		)	—			(5.9		)
	$	67.7		$	3.7		$	(1.3	)	$	15.5		$	—		$	85.6

Capital Expenditures
Portfolio investments and capital additions	$	502.4		$	168.5		$	11.2		$	170.5		$	7.0		$	859.6

Selected Balance Sheet Data
Investments in affiliated companies	$	31.4		$	2.0		$	—		$	320.9		$	—		$	354.3
Identifiable assets	$	3,710.3		$	1,296.2		$	271.0		$	856.9		$	401.1		$	6,535.5

__________

(1) Includes scrapping gains.