Good day, and welcome to the GATX First Quarter Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jennifer Van Aken, Director, Investor Relations. Please go ahead.

Thank you, Tasha, and good morning, everyone. Thanks for joining us for the first quarter conference call. With me on the call today are Brian Kenney, President and CEO of GATX Corporation; Bob Lyons, Senior Vice President of and Chief Financial Officer; and Tom Ellman, Senior Vice President and Chief Commercial Officer. Tom is joining us today to provide additional color and insight on any questions you may have regarding developments in the North American rail industry. I will give a brief overview of the results provided in our press release earlier this morning and then we'll take questions. As a reminder, 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, refer to our 2011 Form 10-K for a discussion of these factors. You can find these reports as well as other information about the company on our website, www.gatx.com. Today, we reported 2012 first quarter net income of $30.3 million or $0.64 per diluted share. This includes the negative impact of $2.2 million or $0.05 per diluted share from tax benefits and other items, which are detailed on Page 9 of the press release. This compares to 2011 first quarter net income of $19.9 million or $0.42 per diluted share, which includes the positive impact from tax benefits and other items of $6.4 million or $0.14 per diluted share. At the end of the first quarter, the North American fleet utilization was 98.5%,…

[Operator Instructions] We'll take our first question from Art Hatfield with Raymond James. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: I've got a few questions here. I think, first off, I'll start with maintenance expense in the Rail group. Little -- quite a bit lower than we had anticipated. I know you've been going through this kind of bubble of maintenance expense over the last few years. Was something unusual going on the first quarter or we kind of cycled through all that higher maintenance that you had planned to have over the last few years?

Well, actually, Art, the regulatory maintenance bubble we're talking about that really was prior to 2009. The last couple of years had been relatively constant as, and that compliance bubble really starts in 2013. But the reduction you see from last year quarter-to-quarter is really just less cars going through the shops due to that higher renewal rate. When you have a renewal rate over 80%, there's very few assignments, less cars attracting work going to your shop. So it's just a simple as that. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Okay. Just a couple other things. Right now as you look at the business and you're getting extended term, the LPI is very strong, are you giving up a little bit of price in the market today to get extended term? Or you do not have to do that given the current market dynamics?

Art, this is Tom Ellman. We always look very carefully at the trade-off between rate and lease term. And generally speaking, when we're trying to incent longer-term as we are now, there is a trade-off that you make for price. If we were absolutely focusing on trying to optimize the lease rate, you'd probably see a little shorter term, so we are focusing on taking that term out. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: And when you have to that, you probably don't want to get too specific on that, but do you give out more than 5% or more than 10% on rate to get extended term? Or is it just vary by individual customer?

You're correct. We don't want to get more specific on that. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Okay, I had to ask...

And it varies, Art. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Okay, that's helpful. A couple of other questions. Just thinking about low natural gas prices, and how that may impact your business. If we could have a positive impact towards your chemical type customers, and if that may have a negative impact on the coal cars you have in your business, and if so, kind of what would be the bounce out on that, would be a net positive or a net negative, as you think about that?

You actually hit all phases of that in your question. It -- for our core tank car business, low natural gas prices are a good thing. There are feedstocks to a variety of chemicals and it really helps us out there. When you look at how it impacts the coal business, on the margin, some utilities can differentiate between being coal-fired and natural gas-fired. And so on that marginal capacity, it is a negative on the coal business. The good news there is we think to the extent that, that can happen in any kind of reasonable time frame, it mostly has. So we wouldn't expect further switching if natural gas prices stay low. But on the margin, it is an impact.

And I'd, Art, that with coal cars, it's about 6% of our fleet and tank cars is about 60% of fleet, it's a net positive. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Right. And that's why I was going to ask about follow-up. I knew where tanks were. I couldn't remember where -- what coal cars were, so that's helpful. Final question, and I'll turn it over. Just thinking about your guidance and how the results came in, in the first quarter. When I look at where my estimates were versus your results, I was thinking a $0.44. And I want to just throw some numbers that you report after the adjustment for the swaps a $0.69 number. If I back out where gains -- asset remarketing gains came in, vis-à-vis my estimate, it was probably about an $0.18, $0.19. So the core business came in better than expected. When we think about your guidance, though, for the rest of the year, do -- can we think about the asset remarketing gains that you got in the first quarter being something that is unique to Q1, and that kind of -- should fall off through the rest of the year? Or is asset remarketing going to come in as a kind of the bigger mix to the results this year than you had anticipated originally?

Well, Art, asset -- it's Bob Lyons. Asset remarketing in the quarter was $22 million, that's a big quarter. Last year in total, that was $45 million, and we indicated we expected for the full year 2012 that we would be up from '11, but not -- I wouldn't annualize the first quarter. And I understand your point about guidance and the question, given the strong quarter, why not increase that guidance at this point in time? Obviously, the fundamentals are very solid as noted by the LPI, and the renewal success rate and the term we're getting, but we're early in the year too and we want to see how things play out commercially. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Okay, and that's fair. And I just wanted to get your thoughts on the fact that -- because Jennifer measured in our comments that Q1 results came in as you guys had thought, and I remember your commentary about gains for the year. I just want to make sure that you hadn't changed your thought process on that. So for our modeling purposes, we should think appropriately in that regard.

Yes. And overall results came in where we thought maybe a little bit better, but also obviously the LPI was stronger than what we had anticipated, which is a very good indicator. On the renewal success rate, as Brian noted in his comments on maintenance, definitely stronger than we anticipated. And we're hoping those things continue on through the balance of the year, but we want to see how it works out.

[Operator Instructions] Our next question comes from Steve O'Hara from Sidoti & Company. Stephen O'Hara - Sidoti & Company, LLC: I was wondering about the increase in lease term. I mean does that signify any outlook on your part as to where we might be in the cycle?

No. This is Brian. It's simply the way we think about lease term versus rate is we have -- we just don't assume rates are going to go up forever. We realized they're cyclical. And when we see rates that are above what we believe the long-term average is, we will try to lock those in for as long a period as possible. It's that simple. As far as where we are in the cycle, you can never really predict that. A frustrating answer there is our fleet is so diversified. You really have to go car type by car type and commodity by commodity to see where you are in the cycle. So to give you an example, in coal, I'm pretty certain we're not at the peak right now, right? Because it feels more like we're at the bottom actually. And we could just be a warm summer and a cold winter away from seeing a strong coal market. On the other side of the spectrum would be 30,000-gallon cars where we feel like we're passed the prior peak. And there's probably more runway there due to the development in the Bakken. So really do have to go car type by car type. But if I had to generalize, it would be with tank cars once again being 60% of our fleet. It feels like there's a lot of upside left, so I don't feel that we're at that peak on tank. On freight, it's harder because sand, intermodal, coal, they all have different market dynamics, and it's harder to generalize. I'd say regardless, our fleet is well positioned to take advantage of the upside if it continues to occur. Stephen O'Hara - Sidoti & Company, LLC: Okay. And then in terms of the -- you'd mentioned the -- obviously, Art mentioned the big maintenance decline. I mean, if you see 80% renewal rates, just for the balance of the year, might you expect kind of a similar year-over-year decline, excluding any kind of unforeseen maintenance items?

Yes. If we continue to see renewal rates above 80%, we should see lower maintenance then in 2011. Stephen O'Hara - Sidoti & Company, LLC: Okay, great. And then quickly, you'd mentioned maintenance issue with 2013, could you briefly describe that?

Yes. That simply -- when we're talking about the bubble with Art, there's tank car structural compliance that goes on every 10 to 15 years depending on the car type. We've had a relatively low level of that tank car compliance that's been due over last couple of years. That's been relatively flat. It starts to ramp up in 2013, simply because of -- when we took cars 10 years ago. So it is somewhat of a bubble coming up. And that's why you can't definitively say maintenance will be a little higher later in the year because you try to manage that to equalize the work in your service centers, so we could be pulling some of that forward, pushing some of it out. So we try to equalize maintenance, but in general, there is a bubble coming up the next couple of years on tank car compliance.

We'll take our next question from Rich Fitzgerald from Jefferies Investment.

I had a one quick question with regard to the industry cycle. The total railcar backlog has come down a bit from like a recent peak of 65,000 back in Q3. What are your thoughts on the trend in that figure from here? And how do you expect that to impact GMT's business?

I'm going to interrupt. I should let Tom answer, but I'm going to jump in, because I think that's a good sign, actually, although most people may not say that. Why do I say that? Let's start with the fact that demand is still high for most of our railcar types in the fleet, and pricing is increasing as you saw in the LPI in the first quarter. But one of the main threats to our business historically is overzealous investing by certain market participants and the resulting ramp up in railcar production that outpaces demand. You're starting to see a little bit of that actually in the small cube covered hopper market, and that can have a really negative effect on pricing. So you have to watch that statistic because obviously, a dramatic drop in backlog long term means that leasing volume will go down as well. But for right now, I'd like to see the market remain disciplined and just meet demand. So I think seeing that not go up is actually a good sign that people aren't getting out of control.

Where would industry backlog have to go just as a general rule of thumb for you to start to get concerned that people were getting a little bit overzealous, in your words?

I don't know that I'd throw out an absolute number, and this is where Tom should jump in. We look once again -- that boring GATX answer, it's by car type and by commodity and we're seeing -- we should discuss the small cube market as an example.

Yes. And first of all, as Brian said, it's important to take a look at the car type by car type and at the high level, tank car backlog actually increased in the quarter. So as Brian mentioned being 60% of our business, that portion of it, the fundamentals of the alternative of people looking for a new car is still very far out there, kind of in the 15 months range. So the new car dynamic, and what it's doing for existing cars continues to be the same as it has been. Even on the freight car side where you've seen the backlog come down, the amount of time for most car types really hasn't changed over the past quarter. It's still for most car types kind of in the 6 months range, and what Brian was referring to specifically with small cube covered hoppers, which carry frac sand among other commodities, is we -- when that backlog did get out there and you had people very concerned that they could have cars to serve that market, in some cases you might have a railroad, a sand producer and an oilfield services company all spec-ing cars for the same piece of business. And we think what happened in some cases is there was actually more cars supplied than demand would justify. So although that market, the demand side of it remains very strong, we are going to see a settling-out period where that supply gets eaten up. And that's what Brian was talking about. Having the backlog come down a little and some of that potential over ordering come out is actually a good thing for us.

Okay. Okay, I understand that, that makes sense. Is the backlog, however, over the long run, still a decent proxy for the company's pricing power? The LPI and the industry backlog seemed to be fairly well correlated over a large period of time. Is that kind of still the case in the current environment, do you think?

I'd like where it is today. Let's put it that way. You don't want to see a dramatically low, but we don't want to see it dramatically high, and it feels good where it is today.

Yes, I was going to say, I think that answer is consistent, very consistent with what we said at the end of the fourth quarter because we received that same question. And I think Brian's response at that point in time, was we're -- we like where the backlog is. And we weren't eager to see a big increase in that number.

Right. You don't want to see it gets so high that the manufacturers are saying, "You know what, I'm going to open up some new capacity." And then you see new market entrants come in and say, "Well this market looks attractive. Let's get into it." And then things start to go south. So I just -- we like it where it is.

Okay, okay. And then just one quick follow-up question, separate topic. The Moody's action today, what impact, if any, do you expect that to have on the ability to raise attractive financing this year. I know you guys have some debt that you'd like to roll over the course of the year. Any comments more broadly on the Moody's move?

Sure. We don't expect that it's going to have any access at all on our ability to access capital or the cost of that capital. Given the fact that Moody's rating now is equivalent to S&P's. S&P was already one notch below Moody. And now that Moody's has come down one notch, they're still both very solid BBB ratings, investment-grade rating, so I don't anticipate any issue at all. And in fact, I wouldn't be surprised if spreads compress a little bit, given that there were some uncertainty about the magnitude of the Moody's action. And now that's taken care of, and that uncertainty is gone, so I'm not concerned at all.

We'll take our next question from Jason Byun from South Ferry Capital.

A lot of the company's profitability is contingent on its funding as well as its net interest margin. It seems to me that in order to maximize shareholder value, perhaps something could be done to lower that cost. Have you guys considered structuring yourselves as a nonbank finance company or perhaps even, go far -- as far as to the extent of placing yourselves in alternative ownership to basically maximize that NIM, because obviously there's a lot of potential year to lower the cost?

It is uncertain whether we qualify as a -- or we could ever achieve the nonbank holding company status or industrial loan bank or any of those. And no, we haven't really pursued that. In fact, if you really get it down into the weeds, there's some guidelines about what you can do as far as spec ordering, what you can own, what you cannot own , what you can service, so being a bank doesn't really work that well with our full-service leasing business. But, of course, we always look at that stuff. As far as putting ourselves into different ownership, we've always been clear on that. We'll do what's best for the shareholder.

[Operator Instructions] Our next question comes from Zahid Siddique from Gabelli. Zahid Siddique - Gabelli & Company, Inc.: Actually I have a few. The first one on -- at the last page of your press release, you have some Rail statistics, for example, manufacturing utilization, and then you talked about the car -- the U.S. car loadings. And I noted that those numbers are down, especially the car loadings in the March quarter. Could you comment on that, and how -- what's the correlation to your business?

Yes. As Brian mentioned, you have to go car type by car type. And the majority of that decline in car loadings overall is due to the decline in coal car loadings. And we touched on that a little bit earlier in the call some of the reasons for the overall weakening in the coal market, things like a mild winter, things like price of natural gas and alternatives there. And also one of the things that happens is you have a little bit of a compounding effect when loadings come down and activity decreases, railroad speed increases, and you can get a second order weakening there. But as far as the major reason for the loadings decline, really coal is the biggest driver. You could go car type by car type in some of the other areas, but that explains majority of it. Zahid Siddique - Gabelli & Company, Inc.: And could you comment on the activity within the frac-ing, how is that progressing?

Certainly. It continues to be a key driver overall. Probably the best way to think about it is a look at 2 different sides. We talked a little bit earlier about what's going on with frac sand. The underlying drilling for natural gas remains strong and remains quite robust. But from a railcar standpoint, right now, there is an excess supply of cars, which we expect to work its way out of the market in the next year or so. Another part of it that you could be referring to is what's going on in the Bakkens with crude oil. That remains extremely strong. That's a key driver in that large backlog of tank cars. Probably something on the order of half of those cars has to do with that part of the world in crude cars to serve that market. Zahid Siddique - Gabelli & Company, Inc.: And within the Bakken, how many cars do you have in service today?

Right now today, not that many. If you look at how many cars we have that will -- that are being produced and will go there, about 1,000 cars total. Zahid Siddique - Gabelli & Company, Inc.: Okay, great. And just last question is on the Rolls-Royce JV, how is that doing in the quarter?

Rolls-Royce continue to perform very well, had a very strong 2011 as we talked about at the end of the year and in the fourth quarter earnings call. First quarter, no change in that trend. Continuing to see very good income performance there and incremental investment opportunity.

We'll take our next question from Art Hatfield with Raymond James. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Just a couple of follow-ups. Has your thought process at all changed that we are comfortable going to or where you're at now in your recourse leverage?

No, it hasn't, Art. Our leverage has been relatively constant the last few years despite very strong investment activity 2008, '09 and '10, in particular when we took advantage of the downmarket to buy a lot of assets at very attractive valuations. Even with all that activity, our leverage has been pretty constant and something we continue to look at. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Right. And I know in the past you've talked about maybe going as high as 4:1 if you had the right opportunity. Do you still think that way? Or you just don't think you'll ever have to go that high?

For the right opportunity, we're going to do what makes sense for the shareholder long term. And obviously, solid investment-grade credit rating is important to us, and we always consider that. But we're also very much focused on the right opportunities for our shareholders. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: And then finally, could you all comment on Europe? You've been growing that business over so slightly over the last couple of years. Can you just talk about what you're seeing in that marketplace and what the competitive landscape looks like?

Well sure, it's Brian. It's a very mixed market right now. We continue to see strength on the tank car business, which is owned 100% by GATX. As you know, that serves primarily petroleum and chemical markets, and it's very strong right now. In the petroleum side we have continued high utilization, strong demand for newer, higher-capacity cars. We're seeing large tenders from big customers looking to modernize their fleets. We continue scrap the older cars and replace them with new ones, so it's very strong. It's a little choppier on the chemical side. There are some customers that are actually reducing capacity because of the European economy, but others are actually considering capacity additions. So the fleet modernization continues in that side as well. And pricing is good in Europe for the tank car side. It's low single-digit increases all the way up to 10% or more, depending on the length of the leases expiring. So that business is strong and there's a lot of growth opportunities actually for replacement and new business. On the other side of the spectrum is the Freight Car business where we have the joint venture with AAE. That business has been weak since 2009, really when container shipments dropped 20%. It's come back a little bit, but really it's just moving sideways at this point. They're very tied to the economy at the very short-term business and really the outlook is much more long term as far as that recovery. But all that's been factored into our projections. Arthur W. Hatfield - Raymond James & Associates, Inc., Research Division: Is that -- on the AAE business, do you have an end date with that relationship as a contractual end that you would have to renew?

No, no. That's -- there is no end date for that. As far as the competitive landscape, Art, it's actually -- it feels a little bit like North America did a couple of years ago, and that part of the market is very weak and there's -- it's questionable whether some of the competitors have staying power, and whether they want to invest. So we see that as a potential opportunity especially on the tank car side in Europe.

[Operator Instructions] We'll take our next question from Kristine Kubacki from Avondale Partners.

My question is on -- you mentioned that the LPI was a little bit stronger than expected in the quarter. And I know in the prior quarter, fourth quarter conference call, you talked about kind of the mid-teens kind of the run rate for the full year. I was wondering how should we think about the rest of the year, given that it started out so strong? And will we start running up against harder comps that could temper the LPI backwards a little bit over the next few quarters?

Yes. Overall, we think that remains good guidance. As you know that the first quarter was particularly strong, but we did talk a little bit about some of these challenges that we'll face particularly in the coal market. And when you look at what we might have to do in order to maintain our utilization there, compared with a very strong portfolio overall, we think that mid-teen guidance remains good.

Yes. And I'd add to that, Kristine, too that what Tom had mentioned about coal is there's really no material impact at all on our full year earnings expectations or earnings guidance, particularly given the strength in the overall portfolio.

Is there a little bit more coal coming up for renewal then? Am I reading that right?

More so than in the first quarter, right.

And then in terms of total cars up for renewal this year and kind of the cadence of that?

Yes. We had about 20,000 cars scheduled for renewal for the entire year. I think we did about 4,600 of those in the first quarter. So the remainder of it fairly evenly spread out throughout the last 3 quarters of the year.

We'll move next to Gregory Macosko from Lord, Abbett. Gregory M. Macosko - Lord, Abbett & Co. LLC: Just with regard to some of the smaller things just with regard to American Steamship, you say, you're going to 14, I guess, by the end -- for operating in 2012. Is that as planned? I know you were positive about the outlook in the fourth quarter.

Yes. That was as planned. We've -- in general, the market we expect to carry more tonnage this year, more iron ore tonnage and that's driven a lot obviously by increase in auto sales, which is looking pretty robust, if you believe our customers through the first couple of months. Gregory M. Macosko - Lord, Abbett & Co. LLC: And with regard to Europe, you say there are some weaker players, et cetera. Have we seen any consolidation at this point, or is it still to come?

No. We haven't seen any consolidation. I just think that the market is upset enough especially on the freight car side where it could come. Don't know anything in particular. But we -- it just feels a lot like the U.S. did a couple of years ago.

And then I think some of that will come through attrition and displacement too, as well as some of the -- our bigger customers look to stay with lessors like ourselves who are going to be in the game, long term and has modern equipment, the ability to reinvest. And some of the smaller players, they may not get their portfolios bought out but they will fade away over time. Gregory M. Macosko - Lord, Abbett & Co. LLC: With regard to idle cars, I know you've previously talked about construction being still weak and more than half of those idle cars were the -- those half center beams, et cetera, what's the construction look like at this point? What are you feeling there?

Well, there's been a slight uptick in construction, but nothing -- there were some activity in construction in the first quarter, but certainly nothing to get excited about from a fleet perspective. Gregory M. Macosko - Lord, Abbett & Co. LLC: Okay. And previously you've talked about the LPI being like 20% off peak for the tank car area. How far or where do we stand on that at this point?

Well, I don't believe that was the LPI. We had talked about point-to-point reduction in lease rates kind of overall and particularly on the tank car side. I'd say for many car types in the fleet right now, we are back at peak or above and hence, that makes sense for us to begin extending, stretching term more and that's what you see us doing, and so definitely in that 55 months in the first quarter. Gregory M. Macosko - Lord, Abbett & Co. LLC: With regard to pricing, et cetera, if you maintained the term, would pricing -- could pricing still be at peak? How does it feel on that regard?

Pricing is very strong right now, and we feel we're in a very good position. As I mentioned, many of the car types are at or above prior peak, and we've -- we don't see that changing here in the near-term. So we feel we're in a good spot both to get very attractive rates and maintain that effort to stretch term. Gregory M. Macosko - Lord, Abbett & Co. LLC: With regard to remarketing of the cars. In the past, you've talked about scrappage being a driver of that. I would assume that scrappage is not a driver of remarketing on the car side. Is it really a price point? Or what's driving it particularly here in the first quarter?

Well the scrapping comp flow-through as we break out and supplemental to our financial, that comes through other income, and so we do break that out. And during the quarter, that was $6.4 million total scrap gains. That's separate from remarketing, which was about $11 million at Rail. Marketing and cars we're selling and secondary market, most of the time, with leases attached. And that secondary market activity has been pretty solid. Gregory M. Macosko - Lord, Abbett & Co. LLC: Okay. I see, okay. All right. And then finally, when you talked previously about the frac sand business, et cetera, you said that it -- I think you said last time it was kind of feeling like the methanol market was some years back. Is it -- has it backed off in terms of the excitement over that, or what's your sense there?

Yes. I think probably you're referring back of the ethanol market previously. What's going on in frac sand is kind of what we mentioned earlier. The demand side remains very strong. There is a oversupply of cars right now that we expect to work its way through the system in the next year or so. Gregory M. Macosko - Lord, Abbett & Co. LLC: So in other words, there's still an oversupply even the demand is strong?

Yes. Right now, there's an oversupply.

The demand really has not increased. As Tom a little while ago, there's been some over ordering, triple ordering in some cases, and that's an example, for instance, of that's why the backlog decreased this quarter that's great.

We'll take our next question from Brian Hogan [ph] with William Blair.

A question on investment opportunities. One, international, at one point, there's kind of the status like on the India opportunity and other geographies. And then second, kind of along with that, Portfolio Management investment opportunities, obviously, you had some asset remarketing fairly sized gains there. Where do you see -- do you see investment opportunities there because investment volume in the first quarter was relatively light? Just kind of talk around those opportunities, please?

Well, let me take the Portfolio Management one, and I'll turn it to Brian for India. We're obviously, we're continuing to look very selectively to invest in Portfolio Management mostly in the inland marine and container market. And we're seeing some transaction flow there. So I would expect volume to go up through the balance of the year. Obviously, it's never going to be a point where it matches anything on the Rail side, but we can make very attractive, good economics and accretive investments there, we will do so. Now I'll turn it over to Brian for his comments on India.

Yes. India has been a long process to -- once again, a railcar leasing market does not exist in India. So we've been trying to create that along with the Indian Railways over the last couple of years. There's a wagon leasing scheme that was approved in India about a year ago. We are on the verge of getting our license here in the next couple of weeks. In fact, I'm headed over there, and we have customers waiting to go. We hope to be invested in 2012 in India.

And going back to you your comment on containers, what types of container investment is that leasing containers? Is that what kind of...

See what the -- in that European freight car market, we participate through a joint venture with AAE and a lot of that fleet is dedicated towards intermodal and it carries containers, so we don't directly containers in Europe. It's exposure through intermodal cars in our joint venture.

[Operator Instructions] Our next question will come from Kent Mortensen from Thrivent.

Can you talk a little bit about where you are kind of harvesting some of this remarketing, come like what car types?

Well, let me take it 2 ways. One, we also had a solid remarketing quarter in Portfolio Management, and a good portion of that was in the barge area where we had earmarked some barges that we had purchased years ago at very attractive valuations for sale for various Portfolio Management reasons. And on the Rail side, I wouldn't say there's any one particular category. Tom can comment more, but we usually offer when we offer assets for sale in Rail in the secondary market, we offer pretty diversified portfolio of cars that, again, we've targeted for sale for various management reasons.

Yes. Bob is absolutely correct. The only area that I'd say gets a little more emphasis is some of the older smaller cars as we continually try to keep our fleet to the modern standard.

We're really not in a situation yet where you kind of feel that -- I mean, you talked earlier about trying to sell cars, we're getting kind of beyond -- I'm sorry, you said you were extending terms in cars that were kind of getting beyond peak pricing levels, so you're not necessarily selling them.

No, that's correct.

Okay. And you had mentioned coal being at the bottom or near the bottom. Is that an area that you'd be potentially adding cars?

I was expecting that question. It's a good question because it's pretty close to where it was, what, 2 years ago, when it was really depressed. And that's when we added a lot of exposure by buying up troubled portfolios. And I'm comfortable with that exposure. We increased that at a very attractive price similar to the price that would probably be available today. So no, we're comfortable where we are.

Okay. And I appreciate your comment about guidance in terms of being early in the year. But you did say that the Lease Index was higher than you expected, that your maintenance costs were lower than expected, and we're also at the end of April so we've got one month into the next quarter already done. I guess I'm still surprised a little bit as to why it didn't take up the bottom end of guidance. Is there a specific offset there, something that's come up over the -- since you initiated that guidance, that is now causing some concern and offset to what you have achieved thus far?

Certainly, nothing has come up, Kent, in the interim, or since we made in that initial guidance. Again, I'd go back to -- we tend to be relatively cautious, I guess, compared to others in terms of -- on that front and where -- even though it is April, we still are early in the year. And as I mentioned, in the first quarter we had $22 million of remarketing income. We expect north of $45 million for the full year. And that's dependent on secondary market remaining solid and not all those sales are in the bank we're confident that we'll be able to get those completed as planned, but there's a some -- still some level of uncertainty there.

We'll take your next question from Matthew Dodson with Edmunds White.

Can you talk a little about your American Steamship part of the company and the demand environment out there and your ability to push price?

Sure. We're going to have 14 vessels in operation this year. We expect to carry more tonnage this year. Early indications from customers make us believe that. It's driven to a large extent by our iron ore tonnage, and that's driven by auto demand in the U.S. and with recent forecast that $14.4 million for auto sales in 2012. That's a pretty sizable increase. I think it's more like $12.5 million last year. So that's what's driving that business. That's why we'll carry more tonnage. And that's why we're relatively optimistic. As far as pushing pricing, pricing is fine. We've seen increases, but I really don't want to talk too much about pricing for that business. And it's a very closely held market, and it's probably not a wise idea to talk about pricing too much.

And it appears that we have no further questions at this time.

All right. Thank you, everyone, for your participation. I will be around all afternoon to answer any additional questions. Thanks.

Thank you.