GATX Corp (GATX) 2010 Q1 法說會逐字稿

Good day and welcome to the GATX first quarter earnings conference call. Today's conference call is being recorded.

At this time, I would like to turn the conference to Bob Lyons, Chief Financial Officer. Please go ahead.

Thank you Lori. Good morning, everyone. Thanks for joining us on our first quarter conference call. I'm joined today by Brian Kenney, our President and CEO of GATX. I'll provide a very brief overview of the results, highlighted in the press release this morning, and then we'll open it up to questions.

First, an administrative matter. I would like to remind you that any forward-looking statement made on this call represents our best judgment as to what may occur in the future. We have based these forward- looking statements on information currently available and disclaim any intention or obligation to update or revise these statements to reflect subsequent events or circumstances. The Company's actual results will depend on a number of competitive and economic factors, some of which may be outside the control of the Company. For more information, I refer you to our 2009 Form 10- K.

For the numbers, today, we reported 2010 first quarter net income of $18.7 million or $0.40 per diluted share, compared to net income of $27.6 million, or $0.56 per diluted share for the first quarter of 2009. Please note that the 2010 and 2009 first quarter results include negative after tax fair value adjustments of $0.02, and $0.23 per diluted share respectively related to certain derivatives at our European rail affiliate AAE Cargo. As noted in the press release, the first quarter operating results and environment were essentially in line with our expectations as we laid out back in January, coming into 2010. The rail market remains very competitive as all lessors are working aggressively to keep their fleets fully utilized. This continues to have a negative effect on lease renewal pricing relative to expiring rates as noted by our LPI, which was negative 15.2% for the quarter. While the challenges in rail remains formidable, there are some signs of improvement, although sporadic. This dynamic is to be expected as the market has stabilized, but has not yet showing consistent signs of recovery.

You'll also not I'm sure that remarketing a rail was very strong in the first quarter. We sold approximately 1,300 cars, a sign that activity in the secondary market has improved versus 2009. However, I'd caution against annualizing the first quarter remarketing income in rail. Remarketing activity can be volatile, quarter to quarter, and year-to- year for that matter, and it's driven by many different factors, most importantly, our fleet portfolio management activity. In specialty, our marine joint ventures performed as we expected, which means that charter rates in the markets that we participate in remain low relative to prior years. Our aircraft engine leasing joint venture with Rolls Royce performed very well during the quarter.

At American Steamship, there's not too much to discuss from an operational standpoint as the sailing season just got underway in the last few weeks. However, customer inquiries have been solid, and demand for iron ore along the Great Lakes has increased along with the restarting of a limited number of blast furnaces at the steel manufacturing company. We will continue to be judicious in bringing vessels back into service, but the early signs in 2010 are positive for ASC. During the first quarter, we invested approximately $70 million primarily in rail assets as we continue to see contracted investment opportunities add assets to the portfolio. As noted the release, we expect 2010 full year earnings to be in the range of $1.50 to $1.70 per diluted share as we outlined for you back in January. This guidance excludes any AAE fair value adjustments.

Before we move on to questions, one last matter. For those of who are in the Chicago area, the annual shareholder meeting is tomorrow at 9:00 AM at the Northern Trust, which is at the corner of Monroe and La Salle. You're invited to attend. Slides will be available of Brian Kenney's presentation later in the day.

With that quick overview, let's go to questions.

(Operator Instructions) The first question from Bob Napoli from Piper Jeffrey.

Good morning.

Good morning, Bob.

A couple of quick questions. The share of affiliates' earnings was up substantially in the quarter, and I was wondering what drove that to -- mostly in the rail segment. It's been a pretty relatively lumpy item, and are there gains from selling cars out of the joint venture or --?

The biggest driver versus last year is the fact in the first quarter of 2009, there was a $14 million adjustment related to the AAE derivative. So if you normalize for that, you would be at $15.5 million or $16 million versus the $18.3 million that we put up in 2010. The increase in 2010 we did have some remarketing activity at one of our joint ventures -- Southern Capital. Also, Rolls Royce had a very good quarter, so those were the big drivers, but the main difference really is that fair value adjustment non-cash item.

But there's no fair value adjustment in this -- that $18 million is a clean --.

Yes, there's a $900,000 adjustment. That's it.

But, excluding that, $17 million is an ongoing number?

Actually, I think the first quarter, if you look at it from an annual perspective, first quarter was very strong because we did have some remarketing activity in Southern Capital where we had close to a $4 million income item from sale of some cars in that portfolio. And also at Rolls Royce, about $2 million of remarketing activity also helped support their strong quarter, so I wouldn't annualize that number.

Okay. And on the flip side, the other expenses were up significantly. Is there anything unusual in there -- those two quarters in a row that the other $19 million of other expenses -- $18 million last quarter, $4 million a year ago.

Yes, last year -- first on last year's number -- we did have in the first quarter 2009, we had roughly a $6 million positive litigation settlement at American Steamship, so that drove down that other expense item by that same amount -- by $6 million

And first quarter this year, we had roughly a $5 million impairment on some rail cars that will be coming out of service earlier than anticipated due to an industry-wide AAR mandate.

Okay.

Those two items alone right there is roughly $11 million of it -- the difference between the years. We had some additional storage costs of about $1 million and some other operating expenses were up a couple million.

Okay. That's helpful. In looking at the backlog -- the railcar manufacturing backlog -- jumped up in the March quarter for the first time. What is going on? Why -- there's still a ton of unused or vehicles off lease, what's driving the increase in the backlog and does that concern you at all?

No, it doesn't really concern us. There was one large order in the first quarter from a railroad, for coal cars.

Okay.

Roughly a 3,000 car order, so that really accounts for the full pickup of the backlog, so that doesn't concern us. It obviously was a Class 1 with a specific need for those cars -- they placed the order. Aside from that, there's been very little order activity that we can tell.

Thank you.

We will now take a question from John Hecht from JMP Securities.

Good morning, thanks for taking my questions. You talked about pricing and there's some sporadic stabilization or some factors in the business that tell you it's stabilizing but may be too early to call, a market that we might see pricing stabilize and grow. That said, we're seeing some positive results or maybe better than expected results out of some rail operators. Historically, is there ever a period where pricing is stabilized and grown faster than other periods of time given some hyperactivity or renewed strength in the market?

This is Brian, I'm not quite sure what you mean by the question. As you led off, there's are hundreds of thousands of cars idle in the industry. As a car provider, we still feel that utilization of pricing pressure. It's true that in a lot of car types that have come off the bottom and are up in pricing, But once again, still well off up from the peak and well up from what we see as a long term average. And, there are still are a lot of car types that are down at the bottom. An example, construction related [netter beams in our mode] are still very, very weak. In general, it looked like things are improving a little bit. It's nothing we're jumping up and down about in terms of pricing or really utilization at this point. Until a lot of those cars go back into service, it's tough to have any pricing leverage in this market.

Okay. Forgive me for the question my head was spinning giving all my [hearing supports] today. But I guess, better way to think about it, when, based on the amount of capacity and turnover in various portfolios, when might you think we would see stabilization and pricing growth given the trends you see in the market?

That's the thing. It's hard to call it a trend at this point, but it -- if this holds throughout 2010, you'll see revenue pressure in 2010 and probably into 2011.

So we're looking into at least the middle of next year before we see some stabilization and growth there based on what you're seeing?

In terms of growth, yes, remember, we're still renewing leases that in general were put on at a much high rate. Even as lease rates increase off the bottom, it will be a while before we'll see revenue increase.

Okay. And another question for the quarters, the -- relative to the end of life leases that occurred in Q1, how many of those were sold versus re-leased?

Actually, the cars that were sold during the quarter, those were primarily on long-term lease, so they wouldn't really have been scheduled for expiring near term. As far as the cars that expired in the first quarter, our renewal success rate was around 55%, which is what it's been in the last couple of quarters. And we're working hard to continue to try to move that number up.

Okay. And final question, wondering if you can give color -- we've seen some small portfolios be purchased in the marketplaces. Any update on opportunities to opportunistically acquire portfolios or pricing in the market where you might see some discrepancies?

No, we haven't seen any portfolios of any size move. There have been some secondary markets. Sales, out there -- I wouldn't call them portfolios as opposed to a particular section of cars that people are trying to get out of their portfolios. So no, there's been no portfolios that have moved. There's still a lot of portfolios, everybody knows the name of them, that may be moving at some point in the future, but it's basically the same situation.

Okay. Thank you for the detail.

Thank you.

Now we'll take a question from Rick Shane from Jefferies & Company.

Thanks for taking my questions. I'd like to talk about pricing strategy and what's going on in terms of different lessors cutting rates or being motivated to keep assets in place. Brian, you alluded to the fact there are a series of well- known portfolios out there that are available for sale. Are you seeing behavior from those lessors that they're being aggressive on price. And I want to tie this in with a second question is that you've indicated, at least during the decline in the cycle, that your strategy was to be aggressive on pricing in order to maintain utilization levels. If we are starting to see a rebound, are you going to shift that strategy a little bit perhaps bring utilization down with the idea that you can drive higher prices six or 12 months from now?

Well, a couple part question. In term of the portfolio, I don't know that they're available for sale. It's questionable whether the parents or the larger company consider them a long-term hold. I wouldn't necessarily call them available for sale in today's market and part of the reason is they're not sure anybody would show up for buying it.

As far as how they price, we don't really see anybody acting that irrational out there in pricing. Everybody is trying to keep their cars utilized and put their idle cars to work. I don't think anybody sticks out as being irrational, even the players that are theoretically not long-term holds by comparison. In fact, we have had success the last couple of quarters displacing those competitors in question just because the customer wants to know that they are with the long-term player. So I would say we haven't driven down our pricing. In some cases, we've been able to realize premium pricing because of our service capability and who we are in the market. As far as the shifting strategy when the market recovers --it's certainly not there right now in terms of -- I wouldn't say we're out there aggressively raising price at all. No because of the amount of idle cars in the industry. We want to keep cars to work. Yes, if that supply and demand balance gets in shape, you'll want to push price, but we're not anywhere near that right now.

And, I think one other data point to point to with regards to the strategy is again that average renewal term which has steadily marched down and was 31 months in the first quarter, so that gives you some indication that we're proactively trying to give ourselves an opportunity to re-price those cars as the recovery takes hold.

Great, guys, thank you. I apologize, it was a complex question. Thank you for answering it. It really helps.

No problem.

And we'll take a question from Paul Bodnar with Longbow Research.

Good morning. Wanted to get into some of the car sales, out of your fleet, what types of cars, are you looking at selling now? I would expect at this point you are more of a net adders to your fleet than net sellers. I wanted to get a little more reasoning behind that.

We are always active in the sales market, and maybe there was potentially a little bit pent up sales activity given that 2009 was a fairly light year. In the ordinary course, we're always going to be in the market selling some cars in the course of the year. And it's a fleet portfolio management -- ongoing fleet portfolio management -- activity we undertake all the time. Looking at cars that -- in the fleet that are good cars that are on long-term lease, but they may not be a fit with what our fleet, where we see it going longer term or a particular customer, so we will look to sell certain cars.

Exactly. You manage the AGR portfolio and customer mix, type of equipment, and sometimes other people that are buying those cars value the lengths of a lease and the credit quality lessee -- there's diving needs and differing ways people value transactions in the market. I would say we are both customer and equipment focused, and it's very long-term -- it's a very long-term view.

Okay. Then, over marketing income, it's like this quarter forward, but, just -- as credit markets keep improving is that something we should to improve throughout the year although this quarter there may be a couple of special things in there?

That's a really good question, that's a very fair question. We've seen that as the credit markets have improved and people have more access to capital, you see more people showing up when there's cars for sale so yes, we would expect that, and that was what we considered going into the year was reflected in our earnings guidance.

Okay.

We talked about back in January, Paul, we outlined why -- strengthening capital markets are important to GATX from a couple different points, not just from the cost to debt standpoint, but to the extent that buyers in the secondary market have access to liquidity -- it is a good thing.

Will that have more of an impact on the speciality business or the rail or both?

I would say both.

And then just wanted to go back and clarify something. On that other income line, it sounds like in rail, that wasn't something that wasn't something that was a one-time, $5 million hit that you took for the -- for those cars.

Right Paul. And that was another expense.

Right.

That was a one-time -- it was $4.8 million.

Okay. So we don't have to worry about that going forward. Thanks a lot.

We'll move to Mike Grondahl with Northland Securities.

Thank for taking the question. If you could just give us some color into rail trends in the first quarter relative to future quarters in '10. Did you have more cars coming up for renewal in the first quarter, was it heavy? How does it look relative to the rest of the year?

Sure, Mike, this is Bob. There isn't really much seasonality to that renewal activity. We came into the year with about 17,000 cars scheduled for renewal, and they really do occur evenly throughout the course of the year. And they occur -- while that's a lot of cars -- 17,000 -- in the scheme of the overall GATX fleet of 109,000, it's a very manageable number, and they also occur in small lots. They aren't big -- typically big -- 2,000 or 3,000 cars renewals or anything like that. They tend to be in the 100 to 300 lot size. So we're constantly, every day we are dealing with renewals.

What I'd add to that, as you go through the year, because of the term nature of the portfolio, we will see expiring lease rates continue to increase. That's why I talk about continued revenue pressure, because the leases that were renewed as we go through the year will become higher and higher (inaudible).

And then on maintenance expense, that has been a challenging headwind, we look at it on a per car basis. As the fleet is shrinking a little bit, is there anything you can do to offset some of that? Or is that just a headwind that's going to continue to exist?

Well, it's a two part answer. In North America, we are going through a heavy compliance period in the next couple of years. That will trend down over the next couple of years. The other big part of that -- North America's railroad repairs which have increased dramatically over the past five years, mostly due to wheels. We're seeing that abate somewhat into 2010, but it's hard to call that a trend right now. But the fact we changed out a lot of cars, a lot of wheels have been changed our for us the last couple of years, and we are starting to see that come down a little bit.

In Europe, maintenance costs are expected to increase in 2010. That's a little hard to pinpoint due to the wheel set situation there. Looks like that's going to last for a while, and is an evolving situation as far as how much it will cost, so we expect continued pressure in Europe on the maintenance side.

Okay. Great. Thanks, guys.

Thank you.

And we will now take a question from Art Hatfield with Morgan Keegan.

Good morning, I'm not sure actually how to ask this. For give me as I fumble through this -- as we look on the go forward, I understand -- I think there's -- it seems to be a disconnect in the market, and I'm talking about the equity markets, about expectations for the primary market for freight cars improving over the near-term. But what we're actually seeing with regards to what cars are in storage. And I think the optimism's based on what we see with railcar loadings.

The trends there seem to be getting better, but we are still really not back to 2008 levels. Brian, how do you think about positioning yourself for the long-term and making that longer term commitment and what level of car loadings within the industry do you think we need to get back to before things get to a level that you really start to feel good about things?

That's tough to answer although you definitely need a higher level of car loading. You just need that to continue to increase before -- you need cars continue to be taken out of the market either back into service or scrapped and that's why it's a long of a wildcard as to how many cars will be scrapped -- if the scrap rate which is now 350 at the end of the quarter -- which is almost double than what it was a year ago. If it continues to increase or stay at this rate, you'll continue to see a high scrapping rate and things will improve faster. There's a number of factors that go into that. As far as -- I assume you're talking about when we place an order.

Yes.

We remain, as I said the last couple of quarters, we remain with in conversation with a variety of builders concerning a longer term order. But are we still looking for the right margin, the right place, the right flexibility, right terms? And honestly, the ability -- if you're going to commit to a large number of cars over a multi-years you want to know if you can place them as well and at an attractive rate. Once again, it's not a great answer, other than -- so far, it looks like an improving situation, but it's still an evolving one with a lot of different factors that affect it.

That's helpful, and I know it's a difficult thing to figure out, and so --.

It's fair to say we're a lot more serious about it right now than we were a year ago because the markets looked a little better and we had some -- there might be some light at the end of the tunnel.

Without getting -- I know you wouldn't want to get into specifics, but are you seeing the thought process of the builders change a little bit? Are they being more open to terms that you would consider more favorable to yourself?

Yes, I'd say in general, yes, because although there's a lot of optimism on the railroads and cars loadings, which is true, it's still -- as I've said probably three times already -- there's a lot of cars idle out there, and the backlog is still very low at the manufacturers so I would say their concentration is on getting some orders over the next couple of years, because I don't think there's a lot of people in line right now.

All right. So I guess thinking about that, is it fair to say, just from what you're -- that we should continue to see the fleet shrink over the rest of this year?

No, I don't think that's the case at all.

Ideally, at the end of this year, we [both places see a] long term order, and picked up a portfolio or a number of cars that really insures the long-term growth of our rail business.

You look out over the course of the last four or five years, we have acquired a lot of cars in the secondary market. While you see that front and center on our numbers this quarter because we sold cars but if that activity picks up -- and it appears to be -- there will be other lessors selling various asset types that we may have an interest in.

While you may see revenue degradation as you renew cars that come up for renewal come off lease -- you may be growing the size of the fleet to mitigate that theoretically and have better growth in revenue next year than what we've seen the last couple of years.

Yes. Ideally, we're going to grow in this market.

Okay.

Tough so far, because nothing's changed hands, and the only portfolio that changed hands we got which was the Alco rail portfolio, but as Bob said, as capital markets improved, we talked about that earlier on the call -- as some people make decisions about their fleets as we consider long-term orders, we want to grow the fleet in this environment. That's not necessarily as great for our accounting results, but it would be a great economic result and good for the shareholder longer term.

Absolutely. Just -- and Bob, you alluded to the average renewal terms dropping to 31. Those have actually been improving the last couple of quarters and had gotten up to 43 in Q3. Obviously, by shortening the terms on unfavorable lease rates, that's good for you. But anything other than that, or just your ability to block and tackle really well in Q1 was able to allow you to do that -- to lower those renewal terms?

Nothing significant. And the other point I'd make on that too is that's a two-party negotiation. There's a customer on the other side of that so we can't arbitrarily do what we want with lease terms all the time. We have a set strategy that we'd like to pursue, but a lot of our customers are very sharp and they've been in the business a long time, and their thoughts maybe run counter to ours.

Right.

So it's a constant negotiation process, and I would say it's really tough to tighten that number up more than where it was in the first quarter -- 31 months is pretty low in terms of renewal terms.

Got it. That's all I've got today. Thanks for taking the questions.

Thank you.

We'll go on to [Daniel Max] with Trafelet.

Good morning. About how much do you lease rates need to increase from current levels such that by 2011 -- maybe more importantly 2012, since that's where you're clustering is -- the LPI gets back to flat?

That's a two, again -- that has two factors that work there. One is the expiring rate, and the other is the renewal rate. So, as Brian mentioned, the expiring rate will continue to go up through 2010 and then it begins to abate as we go through 2011. So if rates stayed where they're at today, we would continue to see that number in negative territory through the end of 2010 and into 2011, and it would continue on. We need some material lease rates pickup to turn that negative into a positive. That's going to take some time.

Are you talking 10%, 20%? Ballpark?

I'd say at least 20%.

Concurrent. Okay. That's what are you looking at [Q4] through more like 2012?

I don't know about that. But there's a lot of factors that are going to come into play on that. So definitely into 2011 we'll continue to feel that pressure. Beyond that, more hesitant to speculate given that the number can be driven by a number of different things outside of our control.

Okay, thank you.

We now have a question from Steve Barger with KeyBanc Capital Markets. (Operator Instructions)

Good morning. I'm going to try and expand on that last question. You said that 10 or 20% or whatever the number is for lease rates to go up, from a timing perspective, if you look at past down cycles, whether it's the most recent six or eight years ago or even the early '80s, if you can speak to that time frame, how long did it take in those down cycles to generate positive comparisons in the lease rates?

Well, the last cycle we had, I can't recall the number off hand, was at least 12 quarters in negative comparisons and we're well into that right now. But I believe it was around 12 or 13 quarters in negative comparisons before we got back to break-even. And then it began to move up from there.

Okay.

It takes time, Steve.

Sure. And in terms of thinking about specific car types, we're hearing lease rate recovery has been best for certain high capacity cars -- covered hoppers -- can you talk about the profile of your covered hopper fleet -- or is there anything for you to do there?

There's nothing unique that I could point to, Steve, that we're going to get additional headwind versus the general marketplace.

Okay. And one last question then. Can you give us the average age of the cars you sold or scrapped, and maybe talk about what percentage of your fleet you consider near the end of its useful life.

The average age of the fleet is about 16 years, so you can -- and it's relatively evenly spread out across that spectrum. That's been the case for the last couple of years. I don't have the average age of the cars that we sold in front of me, but they tend to be mid- life type cars that have very good lease term attached to them with a good customer.

They just don't happen to be a car type that long longer term -- that we see fitting into our portfolio or have a need to have in our mix. So we're not selling -- typically selling cars in secondary markets that are near the end of their life. They still have a lot of years left in them. Scrap cars typically are at near -- very near -- or at the end of their life.

There's been a lot of questions about pricing. You mentioned covered hoppers, and maybe it's best to use that as an example of a grain car which was -- this is more of a market data -- was probably down from the peak -- was probably down 50%. Just six or eight -- or maybe a year ago -- down 50% from the peak. It's since recovered by 25%, but do the math, that still means it's still down over 35%, almost 40% from the peak.

Right.

Forget about the peak, just look at long-term average -- it's down from long-term average between 15% and 20%. So yes, things have recovered, but when I say we're not jumping up and down, it's because we're still renewing higher rate leases and it's still down from the long-term average. So, when it starts to get though that long-term average, that's when things start to look better.

That's great. That's helpful. Thanks. And just using that same math, is that recovery that you talked about for covered hoppers better than what you've seen in tanks so far?

It always sounds like we're [comping up], but it's so car type specific. I'd say that's typical, so there's some type pressure tanks which would look a lot better than that. General service, I'd say, maybe even looked worse than that. It really depends on the car types. But then again, general service was never down as much as grain. So it's so car type specific.

It does get very granular, Steve given that north of 100 different car types in the fleet and 60 different car types along.

-- a good example.

Okay. Appreciate it. Thanks.

And we'll move on to a followup from Bob Napoli with Piper Jeffrey. Mr. Napoli, your line is open.

Sounds like Bob may have checked out.

We'll move on to Paul Bodnar with Longbow Research. A follow up.

Yes, a quick follow up on two things -- one is just in the car scrapped. Were all those at that point basically going to be idle and you chose to scrap them or were there any you took back early and switched out?

No, most of the cars were at the end of their life. There may be situations where we've taken cars back from a customer and we will replace those with newer equipment that we had -- existing cars in the fleet. But by and large, although those cars are coming to the end of their life, or are near the end of their life -- and the capital investment you need to make in the car to keep it running longer term doesn't make economic sense.

I guess what else I was trying to get out of here is you said you had a renewal success rate of about 55% that renew it. What percent of cars did you find new homes for after -- because you have to adjust for the scrap cars out of that, too.

The vast majority of the cars given that utilization did pick up slightly but scrap helped on that front. We did not have very many cars at all during the quarter that went from active to idle. We were able to find homes for the vast majority of those cars that came back awfully --.

And then, just, what is your ability now or how is the market changing -- what leverage you guys could do. You used to have -- you could maybe get up to four to one, or beyond that on these railcars. So if you did go out and wanted to get in the market, how far do you think you would be able to push it in terms of leverage ratio.

Leverage at the end of the quarter is still 3.1 to one where it's been for the last five quarters. And obviously, it's a very comfortable level that we're at. I would say that's more driven -- I don't have a specific leverage target in mind -- it's going to be driven a lot by the opportunities we see in the marketplace. We capacity to invest. We are eager to do that, and that's why we're holding on to that capacity to do so.

So I like the position we're in. It's a conservative up with and enables us to get after a portfolio or an opportunity that becomes available, and we would. We wouldn't worry about pushing it higher if the opportunity came about.

Have you seen any transactions recently and what those were leveraged at all in the marketplace?

You mean from a securitization standpoint?

Yes or is there anything out there that we could look at as comparison as to what the banks will let you do?

Not really, from our standpoint, it's not a question of what the banks will let us do, because those people are out doing secured financing. We don't do very much of that at all. Our leverage and our view on the capital structure is driven by our credit rating. Not what some bank will lend against from an LTV standpoint. I haven't -- there were I think one or two secured finances that were done over the course of six months by others, and I'm sure the LTVs they got on those will improve versus where we had been at the end of '08 and early 2009 -- but I don't have specific data in front of me to point to.

Okay. Thanks.

We now have a followup from Mike Grondahl with Northland Securities.

I think that $5 million impairment that you mentioned -- I lost track of -- what was the trigger for that again?

That was a -- the AAR which is one of the governing bodies in the industry-wide rail. They identified a specific car type -- a late 1980-built aluminum copper car -- where another lessor, not GATX -- but another lessor had some problems with that car type and they mandated those cars come out of the service over the course of the next few years. Theoretically, they still had a lot of years to run, but now their life has been shortened to just to a couple of years. We had about 350 of those cars in our fleet.

Okay. So very one off. Got it.

Yes, very much.

Thank you.

There are no further questions in the queue. I would now like to turn the call back over to our speakers for any additional and closing remarks.

Thank you very much for your participation on the call this morning. If you have any followup questions at all, please feel free to call. Thank you.

Once again, that does conclude today's conference. Thank you all for your participation.