Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Assets And Liabilities, Lessee [Table Text Block]

The following table shows the lease terms and discount rates related to leases as of December 31:

	2019
Weighted-average remaining lease term (years):
Operating leases	9.6
Finance leases (1)	—
Weighted-average discount rate:
Operating leases	3.66	%
Finance leases	2.26	%

Lease, Cost [Table Text Block]

The following table shows other information related to leases for the year ending December 31 (in millions):

	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	66.9
Operating cash flows for finance leases	0.3
Financing cash flows for finance leases	11.3
Total cash for leases	$	78.5

Operating Lease, Lease Income [Table Text Block]

The following table shows the components of our finance leases as of December 31 (in millions):

	2019			2018
Total contractual lease payments receivable	$	84.4		$	119.5
Estimated unguaranteed residual value of leased assets	40.7			57.5
Unearned income	(34.8		)	(50.6		)
Finance leases	$	90.3		$	126.4

The following table shows the components of our lease income for the year ending December 31 (in millions):

	2019
Operating lease income:
Fixed lease income	$	1,017.7
Variable lease income	65.2
Total operating lease income	$	1,082.9
Finance lease income	9.8
Total lease income	$	1,092.7

Components of GATX's finance leases

Lessor, Direct Financing Leases [Text Block]

Adoption of ASU 2016-02, "Leases (Topic 842)"

In the first quarter of 2019, we adopted ASU 2016-02 using the modified retrospective transition method with a cumulative effect adjustment upon adoption. Amounts for comparative periods are not required to be included in the footnote disclosures. See "Note 2. Accounting Changes" for additional information and impact on our financial statements from adoption of this standard.

We elected the package of practical expedients related to whether a contract is or contains a lease, lease classification and initial direct costs. We also elected the practical expedient that allows lessors and lessees to not separate non-lease components from the associated lease components for operating leases.

The adoption of this new standard required us to recognize right-of-use assets and lease liabilities on our balance sheet attributable to operating leases for railcars, offices, and certain equipment. In addition, the adoption of this new standard also required us to eliminate deferred gains associated with our railcar sale-leaseback financing arrangements, resulting in a one-time increase to equity.

The adoption of this standard did not have any impact on our cash flows.

GATX as Lessor

We lease railcars and other operating assets under full-service and net operating leases. We price full-service leases as an integrated service that includes amounts related to maintenance, insurance, and ad valorem taxes. Upon adoption of the new lease accounting standard in 2019, we elected the lessor practical expedient which allows us not to separate lease and non-lease components when reporting revenue for our full-service operating leases. In some cases, we lease railcars that, at commencement, are classified as finance leases. For certain operating leases, revenue is based on equipment usage and is recognized when earned. Typically, our leases do not provide customers with renewal options or options to purchase the asset. Our lease agreements do not generally have residual value guarantees. We collect reimbursements from customers for damage to our railcars, as well as additional rental payments for usage above specified levels, as provided in the lease agreements.

The following table shows the components of our lease income for the year ending December 31 (in millions):

	2019
Operating lease income:
Fixed lease income	$	1,017.7
Variable lease income	65.2
Total operating lease income	$	1,082.9
Finance lease income	9.8
Total lease income	$	1,092.7

In accordance with the terms of our leases with customers, we may earn additional revenue, primarily for customer liability repairs. The amount is reported in other revenue in the statements of comprehensive income and was $88.2 million for the year ended December 31, 2019.

The following table shows the components of our finance leases as of December 31 (in millions):

	2019			2018
Total contractual lease payments receivable	$	84.4		$	119.5
Estimated unguaranteed residual value of leased assets	40.7			57.5
Unearned income	(34.8		)	(50.6		)
Finance leases	$	90.3		$	126.4

The following table shows our future contractual receipts from our finance leases and noncancelable operating leases as of December 31, 2019 (in millions):

	Operating Leases (1)		Finance Leases		Total
2020	$	938.4	$	19.7	$	958.1
2021	726.4		13.7		740.1
2022	532.9		21.9		554.8
2023	399.3		7.2		406.5
2024	261.5		7.7		269.2
Years thereafter	289.9		14.2		304.1
	$	3,148.4	$	84.4	$	3,232.8

__________

(1)

The future contractual receipts due under our full-service operating leases include executory costs such as maintenance, car taxes, and insurance.

Lessee, Leases, Future Minimum Payments [Table Text Block]

The following table shows our future contractual receipts from our finance leases and noncancelable operating leases as of December 31, 2019 (in millions):

	Operating Leases (1)		Finance Leases		Total
2020	$	938.4	$	19.7	$	958.1
2021	726.4		13.7		740.1
2022	532.9		21.9		554.8
2023	399.3		7.2		406.5
2024	261.5		7.7		269.2
Years thereafter	289.9		14.2		304.1
	$	3,148.4	$	84.4	$	3,232.8

__________

(1)

The future contractual receipts due under our full-service operating leases include executory costs such as maintenance, car taxes, and insurance.