JA GATX DTE Conference Update

Slide1: 

GATX Corporation DTERS Maintenance Management Seminar

GATX Corporate History: 

GATX Corporate History Founded in 1898 as a railcar lessor Listed on NYSE in 1916 Initiated quarterly dividends in 1919; paid without interruption since Railcar leasing remains the foundation of GATX

GATX StrengthsKeys to Success: 

GATX Strengths Keys to Success GATX leases long-lived, widely-used assets Railcars – Marine Vessels Locomotives – Industrial Equipment Assets that GATX uniquely understands Assets requiring valuable services that GATX provides

Rail Industry North American Railcar Market: 

Rail Industry North American Railcar Market 1,699,701 railcars 872,378 cars 462,398 cars 364,925cars Lessors 51% Railroads 27% Shippers 22% Source: Umler as of 12/2006

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Cars are owned by railroads, shippers, and lessors Tank cars are owned by lessors such as GATX or shippers who utilize this car type Railroads do not have an ownership presence in tank cars as these cars have more complex service requirements Approximately 3/4 of the tank cars are owned by lessors, 1/4 by shippers Source: Umler as of 12/2006 Rail Industry North American Fleet Composition

Rail: 

Rail GATX’s largest, most valuable franchise One of the largest railcar and locomotive lessors in North America A leading North American tank car lessor Strong market identity Own, manage or have interest in 161,000 railcars worldwide Expanding international presence with approximately 41,000 cars Excellent long-term customer relationships Leading service provider to shippers in chemical, petroleum, and food industries Over 1,000 customers Strong credit profile Service-intensive business Repair, maintenance, tracking, training, engineering support

Worldwide Rail Fleet: 

Worldwide Rail Fleet 161,000 Railcars 900 Locomotives 161,000 railcars as of 12/31/06 RAILCARS North America Europe Total Owned 110,000 19,000 129,000 Interest In 6,000 21,000 27,000 Managed 4,000 1,000 5,000 Rail Total 120,000 41,000 161,000 Own, Manage and Interest In: GATX Railcar Distribution North America 75% Europe 25%

GATX’s FleetMajor Car Types, Industries, Commodities: 

GATX’s Fleet Major Car Types, Industries, Commodities Industries Served Typical Commodities

Rail Maintenance Network: 

Rail Maintenance Network Maintaining railcars and locomotives is a necessary but complicated process; customers utilizing a full-service lease rely on GATX to manage this maintenance process GATX owns a network of nine full-scale maintenance facilities and 26 mobile service units across North America. Additionally, GATX works with a number of preferred third-party service providers throughout North America GATX repairs nearly 20,000 railcars per year in its maintenance network, and provides lighter service to an additional 40,000 cars per year using its fleet of mini-mobile repair units

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Industry Changes – GATX Perspective Need to have a sound maintenance program built around: Ensure safe operation of rail equipment Compliance with all industry regulations Providing reliable rail equipment to customers Manage maintenance expenses Industry changes Rail industry moving toward greater use of technology to identify potential problem areas on a railcar Pro-active approach Preventive maintenance opportunities

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Industry Changes – GATX Perspective GATX Rail – Actions Using WILD (Wheel Impact Load Detector) data to more aggressively replace both opportunistic (80-89 Kips) and AAR condemnable (90 plus Kips) wheelsets. Repairs are being made by: Railroads GATX owned shops 3rd party contract service providers Sites established on short line railroads to replace opportunistic and AAR condemnable wheels. Have established specific maintenance programs for certain car types i.e. high mileage heavy haul coal cars which takes a pro-active approach to replace wheelsets based on WILD data and visual conditions

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Industry Changes – GATX Perspective How GATX rail uses data generated by Wheel Impact Load Detectors: Access AAR EW System for data (Alerts) Monitor fleet Kip readings daily Audit Kip readings (Alerts) before sending shop advisory notices Create shop advisory notices for opportunistic and AAR condemnable wheels when cars inbound repair facilities (authorization to repair) Create fleet status report No. of wheels (65-79) No. of wheels (80-89) No. of wheels (90-140) No. of wheels (140 plus) Track and monitor fleet wheel health

Slide13: 

Industry Changes – GATX Perspective Future of fleet maintenance programs Greater use of technology to monitor car condition Enhancement of preventive and pro-active maintenance programs Maintenance programs become more condition based