Asset Acquisition

3 Months Ended

Mar. 31, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Asset Acquisition

Asset Acquisition

On January 1, 2026, GATX acquired approximately 101,000 railcars for $4.2 billion from Wells Fargo through the newly formed GABX joint venture with Brookfield. Initially, GATX's ownership share of GABX is 30% with Brookfield's share at 70%. GATX will have the option to acquire up to 100% of GABX's equity through a series of annual call options that allow GATX to purchase a percentage of Brookfield's equity every year for up to 25 years, beginning in June 2026. The transaction was funded through a $2.96 billion term loan executed by GABX, which is guaranteed by GATX, and equity contributions of $385.3 million from GATX and $899.0 million from Brookfield. As of March 31, 2026, GABX is a consolidated variable interest entity and is reported in the Rail North America segment. See "Note 7. Variable Interest Entities" for further information.

We determined the acquisition of Wells Fargo's rail assets represented an asset acquisition in accordance with Accounting Standards Codification ("ASC") Topic 805, Business Combinations, as the fair value of substantially all of the assets acquired were concentrated in a group of similar assets. The cost of the asset acquisition was allocated to the assets on a relative fair value basis. We determined fair value of the assets using estimates of discounted future cash flows, independent appraisals, and market comparables. Transaction costs incurred to acquire the assets were capitalized and included in the cost basis of the acquired assets.

On the same date, GATX directly purchased 200 locomotives from Wells Fargo for approximately $30.4 million, and Brookfield directly acquired Wells Fargo’s rail finance lease portfolio, consisting of approximately 22,000 railcars and approximately 400 locomotives. GATX serves as manager of the railcars in GABX as well as the finance lease portfolio directly owned by Brookfield and earns management fees for such services.