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 report our financial results through four primary business segments: Rail North America, Rail International, Portfolio Management, and American Steamship Company (“ASC”).

Rail North America is composed of our 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 composed of our operations in Europe ("GATX Rail Europe" or "GRE"), India ("Rail India"), and Russia ("Rail Russia"). 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.

Portfolio Management is composed primarily of our ownership in a group of joint ventures with Rolls-Royce plc that lease aircraft spare engines, as well as five liquefied gas carrying vessels (the "Norgas Vessels") and assorted other marine assets. In prior years, Portfolio Management generated leasing, marine operating, asset remarketing, and management fee income through a collection of diversified wholly owned assets and joint venture investments. In 2015, we made the decision to exit the majority of the marine investments, excluding the Norgas Vessels, within our Portfolio Management segment, including six chemical parcel tankers, a number of inland marine vessels, and our 50% interest in the Cardinal Marine joint venture, all of which have been sold as of December 31, 2017.

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.

Segment profit is an internal performance measure used by the Chief Executive Officer to assess the profitability of each segment. Segment profit includes all revenues, expenses, pre-tax earnings from affiliates, and net gains on asset dispositions that are directly attributable to each segment. We allocate interest expense to the segments based on what we believe to be the appropriate risk-adjusted borrowing costs for each segment. 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.

The following tables show certain segment data for the years ended December 31, 2018, 2017, and 2016 (in millions):



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
2018 Profitability
Revenues
Lease revenue	$	873.4		$	209.3		$	1.0		$	4.1		$	—		$	1,087.8
Marine operating revenue	—			—			14.3			181.7			—			196.0
Other revenue	68.1			8.2			0.8			—			—			77.1
Total Revenues	941.5			217.5			16.1			185.8			—			1,360.9
Expenses
Maintenance expense	254.7			44.5			—			22.6			—			321.8
Marine operating expense	—			—			16.8			114.1			—			130.9
Depreciation expense	248.5			55.5			7.3			10.6			—			321.9
Operating lease expense	49.6			—			—			—			—			49.6
Other operating expense	27.3			5.8			—			—			—			33.1
Total Expenses	580.1			105.8			24.1			147.3			—			857.3
Other Income (Expense)
Net gain (loss) on asset dispositions	76.3			(0.2		)	(3.4		)	0.1			—			72.8
Interest (expense) income, net	(125.2		)	(35.9		)	(10.4		)	(5.7		)	8.6			(168.6		)
Other (expense) income	(5.2		)	(7.0		)	—			0.1			(9.5		)	(21.6		)
Share of affiliates' pre-tax income	0.6			—			60.5			—			—			61.1
Segment profit (loss)	$	307.9		$	68.6		$	38.7		$	33.0		$	(0.9	)	447.3
Less:
Selling, general and administrative expense																191.1
Income taxes (includes $10.8 related to affiliates' earnings)																44.9
Net income																$	211.3

Net Gain (Loss) on Asset Dispositions
Asset Remarketing Income:
Disposition gains on owned assets	$	64.7		$	—		$	—		$	0.1		$	—		$	64.8
Residual sharing income	1.4			—			1.1			—			—			2.5
Non-remarketing disposition gains (1)	10.8			3.7			—			—			—			14.5
Asset impairments	(0.6		)	(3.9		)	(4.5		)	—			—			(9.0		)
	$	76.3		$	(0.2	)	$	(3.4	)	$	0.1		$	—		$	72.8

Capital Expenditures
Portfolio investments and capital additions	$	737.4		$	152.7		$	14.1		$	15.8		$	23.4		$	943.4

Selected Balance Sheet Data
Investments in affiliated companies	$	0.2		$	—		$	464.3		$	—		$	—		$	464.5
Identifiable assets	$	5,236.6		$	1,363.2		$	606.8		$	297.8		$	112.3		$	7,616.7

__________

(1) Includes scrapping gains.



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
2017 Profitability
Revenues
Lease revenue	$	899.9		$	190.3		$	3.8		$	4.1		$	—		$	1,098.1
Marine operating revenue	—			—			25.0			168.4			—			193.4
Other revenue	77.5			6.8			1.1			—			—			85.4
Total Revenues	977.4			197.1			29.9			172.5			—			1,376.9
Expenses
Maintenance expense	265.0			41.1			—			22.2			—			328.3
Marine operating expense	—			—			24.8			106.2			—			131.0
Depreciation expense	239.4			48.9			7.0			12.0			—			307.3
Operating lease expense	60.7			—			—			1.8			—			62.5
Other operating expense	28.7			4.7			1.0			—			—			34.4
Total Expenses	593.8			94.7			32.8			142.2			—			863.5
Other Income (Expense)
Net gain (loss) on asset dispositions	45.2			3.1			7.7			(1.9		)	—			54.1
Interest (expense) income, net	(121.2		)	(33.4		)	(9.2		)	(5.2		)	8.5			(160.5		)
Other (expense) income	(5.9		)	(3.2		)	2.3			1.3			(7.1		)	(12.6		)
Share of affiliates' pre-tax (loss) income	(2.4		)	(0.1		)	58.4			—			—			55.9
Segment profit	$	299.3		$	68.8		$	56.3		$	24.5		$	1.4		450.3
Less:
Selling, general and administrative expense																180.0
Income taxes (includes $12.0 related to affiliates' earnings)																(231.7		)
Net income																$	502.0

Net Gain (Loss) on Asset Dispositions
Asset Remarketing Income:
Disposition gains (losses) on owned assets	$	44.0		$	0.1		$	1.8		$	(1.8	)	$	—		$	44.1
Residual sharing income	0.6			—			9.6			—			—			10.2
Non-remarketing disposition gains (losses) (1)	5.2			3.3			—			(0.1		)	—			8.4
Asset impairments	(4.6		)	(0.3		)	(3.7		)	—			—			(8.6		)
	$	45.2		$	3.1		$	7.7		$	(1.9	)	$	—		$	54.1

Capital Expenditures
Portfolio investments and capital additions	$	460.9		$	90.9		$	36.6		$	14.0		$	1.0		$	603.4

Selected Balance Sheet Data
Investments in affiliated companies	$	6.8		$	—		$	434.2		$	—		$	—		$	441.0
Identifiable assets	$	4,915.0		$	1,332.9		$	582.8		$	286.7		$	305.0		$	7,422.4

__________

(1) Includes scrapping gains.



	Rail North America			Rail International			Portfolio Management			ASC			Other			GATX Consolidated
2016 Profitability
Revenues
Lease revenue	$	935.1		$	182.0		$	5.8		$	4.2		$	—		$	1,127.1
Marine operating revenue	—			—			49.3			150.0			—			199.3
Other revenue	83.4			7.0			1.5			—			—			91.9
Total Revenues	1,018.5			189.0			56.6			154.2			—			1,418.3
Expenses
Maintenance expense	266.5			47.2			—			18.6			—			332.3
Marine operating expense	—			—			32.8			96.7			—			129.5
Depreciation expense	231.8			45.5			7.0			12.9			—			297.2
Operating lease expense	67.6			—			—			6.0			(0.1		)	73.5
Other operating expense	34.1			5.3			4.4			—			—			43.8
Total Expenses	600.0			98.0			44.2			134.2			(0.1		)	876.3
Other Income (Expense)
Net gain on asset dispositions	16.6			1.1			80.3			—			—			98.0
Interest (expense) income, net	(110.1		)	(29.7		)	(8.6		)	(4.5		)	4.8			(148.1		)
Other (expense) income	(3.6		)	0.8			—			(5.4		)	(9.3		)	(17.5		)
Share of affiliates' pre-tax income (loss)	0.5			(0.2		)	52.8			—			—			53.1
Segment profit	$	321.9		$	63.0		$	136.9		$	10.1		$	(4.4	)	527.5
Less:
Selling, general and administrative expense																169.0
Income taxes (includes $5.7 related to affiliates' earnings)																101.4
Net income																$	257.1

Net Gain on Asset Dispositions
Asset Remarketing Income:
Disposition gains on owned assets	$	45.5		$	—		$	4.2		$	—		$	—		$	49.7
Residual sharing income	0.8			—			82.8			—			—			83.6
Non-remarketing disposition gains (1)	1.5			1.7			—			—			—			3.2
Asset impairments	(31.2		)	(0.6		)	(6.7		)	—			—			(38.5		)
	$	16.6		$	1.1		$	80.3		$	—		$	—		$	98.0

Capital Expenditures
Portfolio investments and capital additions	$	495.6		$	87.1		$	25.0		$	9.1		$	3.9		$	620.7

Selected Balance Sheet Data
Investments in affiliated companies	$	10.5		$	1.2		$	375.3		$	—		$	—		$	387.0
Identifiable assets	$	4,775.6		$	1,128.7		$	593.5		$	278.8		$	328.8		$	7,105.4

__________

(1) Includes scrapping gains.