Reports quarterly GAAP and adjusted earnings
from continuing operations of $0.03 and $0.07 per diluted share,
respectively
Generates year-to-date operating and total
free cash flow after dividends and investments of $70 million and
$90 million, respectively
Returned $60 million of capital to
stockholders through dividends and share repurchases
Trinity Industries, Inc. (NYSE:TRN) today announced earnings
results for the first quarter ended March 31, 2021.
Financial and Operational Highlights –
First Quarter 2021
- Quarterly total company revenues of $399 million
- Quarterly income from continuing operations per common diluted
share ("EPS") of $0.03 and quarterly adjusted EPS of $0.07
- Lease fleet utilization of 94.5% and Future Lease Rate
Differential ("FLRD") of (14.8)% at quarter end
- Railcar deliveries of 1,895 and new railcar orders of
1,410
- Cash flow from operations and total free cash flow after
dividends and investments ("Free Cash Flow") were $70 million and
$90 million, respectively
- Investment of $91 million in leasing capital expenditures, net
of lease portfolio sales
- Net additions of 4,155 railcars to the wholly-owned and
partially-owned lease fleet compared to prior year period
- Repurchases of approximately 1.3 million shares at a cost of
$37 million
- Committed liquidity of $772 million as of March 31, 2021
Management Commentary
"Trinity’s first quarter results reflect the dynamics of
aggressive execution on our strategic initiatives in the midst of a
challenging operating environment and a competitive market for
railcar demand," said Jean Savage, Trinity's Chief Executive
Officer and President. "Operationally, our businesses performed
well against our expectations, especially considering the winter
storms that interrupted operations for nearly two weeks of the
quarter."
"Trinity’s lease revenue was impacted by the continuation of
softer lease pricing and slightly lower utilization compared to
last year. Our Rail Products segment completed further rightsizing
of our production footprint to align with lower delivery volumes,
and made good progress on our strategic initiatives to lower our
breakeven point and overall cost structure. While the margin for
the first quarter was negative, the business segment is turning the
corner, and margins trended positively through the quarter. We
expect to build momentum on our cost initiatives through the
remainder of the year resulting in year over year margin
improvement for the segment."
"We are also seeing positive developments in the market with
railcar inquiries returning to a more normal level of activity
during the first quarter. As a result, Trinity’s fleet utilization
and pricing are firming within our lease portfolio, and we expect
lease rates to experience modest improvement through the year as
existing railcars are absorbed across the industry. When looking at
the potential for new railcar demand, we expect industry deliveries
to be below replacement levels this year, but believe that current
inquiries support improving railcar deliveries at or just above
replacement levels in 2022."
"Financially, Trinity is making disciplined investments while
returning meaningful capital to shareholders as part of our overall
capital allocation framework. In the first quarter, we made
progress on our balance sheet initiatives by completing a small
lease portfolio sale and extending our Leasing warehouse credit
facility. The cash flows from Trinity’s rail platform continue to
prove the resiliency of the business model through the cycle with
approximately $70 million in operating cash flow generated during
the quarter. We continue to expect strong operating cash flows in
the range of $625 million to $675 million for the 2021 year."
Ms. Savage concluded, "We are certainly encouraged by the
improving trends for our business and the economy as a whole, but
market uncertainty in the wake of the COVID-19 pandemic remains a
headwind. We are focused on what is more within our control in
optimizing our cost structure and balance sheet, and I am pleased
with the execution and progress on internal initiatives to
accelerate Trinity’s financial performance and create long-term
shareholder value.”
Consolidated
Financial Summary
Three Months Ended
March 31,
2021
2020
Year over Year – Comparison
(in millions, except
percentages and per share amounts)
Revenues (1)
$
398.8
$
615.2
Lower deliveries in the Rail
Products Group, and the change in presentation of railcar sales,
which totaled $44 million in Q1 2020
Selling, engineering, and administrative
expenses
$
54.4
$
64.3
Lower employee-related costs
resulting from cost optimization initiatives, including headcount
reductions, and lower litigation-related expenses
Operating profit
$
60.2
$
73.0
Lower volumes in the Rail
Products Group and fewer railcar sales in the Leasing Group
Interest expense
$
51.4
$
61.3
Lower overall borrowing costs
associated with the company's debt facilities, partially offset by
higher overall average debt; Q1 2020 included a $4.7M early
redemption premium on a debt retirement
Net income (loss) attributable to Trinity
Industries, Inc.
$
3.3
$
161.7
EBITDA (2)
$
125.7
$
143.1
Adjusted EBITDA (2)
$
126.6
$
148.6
Effective tax expense (benefit) rate
77.9%
(990.6)%
2020 tax benefit primarily related to
changes in recent tax legislation; 2021 tax rate was impacted by
adjustments to the benefits recognized in 2020
Diluted EPS – GAAP
$
0.03
$
1.33
Primarily the result of the tax impacts
described above
Diluted EPS – Adjusted (2)
$
0.07
$
0.11
Three Months Ended
March 31,
2021
2020
Year over Year – Comparison
(in millions)
Net cash provided by operating activities
– continuing operations
$
70.1
$
173.8
Decrease in other assets pertaining to the
accounting treatment of a customer's sales-type lease in Q1
2020
Total Free Cash Flow After Investments and
Dividends (2)
$
90.2
$
57.4
Timing difference of debt proceeds issued
for financing lease fleet equity investment
Capital expenditures – leasing (3)
$
107.9
$
129.2
Fewer railcars added to the lease
fleet
Returns of capital to stockholders
$
60.0
$
58.1
Increase in the dividend compared to
previous year, partially offset by fewer share repurchases
(1) Beginning in the fourth quarter of
2020, we made a prospective change to the presentation of railcar
sales and now present all sales of railcars from the lease fleet as
a net gain or loss from the disposal of a long-term asset
regardless of the age of railcar that is sold. Historically, we
presented sales of railcars from the lease fleet on a gross basis
in leasing revenues and cost of revenues if the railcars had been
owned for one year or less at the time of sale. Sales of railcars
from the lease fleet owned for more than one year had historically
been presented as a net gain or loss from the disposal of a
long-term asset.
(2) Non-GAAP financial measure. See the
Reconciliations of Non-GAAP Measures section within this Press
Release for a reconciliation to the most directly comparable GAAP
measure and why management believes this measure is useful to
management and investors.
(3) For the three months ended March 31,
2020, Capital expenditures – leasing is net of sold lease fleet
railcars owned one year or less.
Business Group
Summary
Three Months Ended
March 31,
2021
2020
Year over Year – Comparison
(in millions, except
percentages and number of units)
Railcar Leasing and Management Services
Group
Leasing and management revenues
$
183.5
$
192.0
Lower lease rates and lower fleet
utilization, partially offset by growth in the lease fleet
Leasing and management operating
profit
$
76.6
$
82.5
Operating profit on lease portfolio
sales
$
1.7
$
10.4
Fewer railcars sold from lease
portfolio
Fleet utilization
94.5%
95.4%
Primarily driven by decrease in
energy-related markets
Future Lease Rate Differential ("FLRD")
(2)
(14.8)%
(15.2)%
Lower current market lease rates compared
to expiring lease rates over the next twelve months
Owned lease fleet (in units) (1)
107,970
103,815
Investor-owned lease fleet (in units)
26,610
25,840
Additional sales of leased railcars to
third-party fleets managed by the Company
Rail Products Group
Revenues
$
261.0
$
509.4
Lower deliveries, pricing pressures, a
shift in the mix of railcars sold, and reduced railcar modification
services
Operating profit (loss) margin
(3.4)%
4.9%
Lower deliveries resulting in additional
unabsorbed burden, as well as lower pricing and weather-related
costs
Deliveries (in units)
1,895
3,705
Orders (in units)
1,410
1,970
Order value
$
171.1
$
227.5
Lower number of units, competitive
pricing, and differences in product mix
Backlog value
$
989.9
$
1,557.8
All Other Group
Revenues
$
68.1
$
63.4
Increased demand for highway products
Operating profit
$
15.3
$
9.3
Gain on the disposition of a non-operating
facility
March 31, 2021
December 31, 2020
Loan-to-value ratio
Wholly-owned subsidiaries, including
corporate revolving credit facility
60.9%
58.5%
Increased leverage associated with leased
assets, partially offset by amortization of debt on encumbered
assets
(1) Includes wholly-owned railcars,
partially-owned railcars, and railcars under sale-leaseback
arrangements.
(2) FLRD calculates the weighted average
of the most current quarterly lease rates transacted compared to
the weighted average lease rates for railcars expiring over the
next twelve months.
Additional Business
Items
Liquidity and Capital Resource Updates
- Trinity completed a small tuck-in acquisition of Bay Worx Rail,
including proprietary cleaning technology systems and a state of
the art cleaning facility in South Texas. The technology acquired
uses advanced robotics to improve the safety and efficiency of the
railcar cleaning process, which the Company expects to scale at
additional maintenance facilities over the next few years as part
of the optimization initiatives.
- In the first quarter, Trinity completed the build-out of its
Midwest maintenance facility, which began in May 2019, and
commenced operations. The facility will enable the Company to meet
its strategic initiative to internally service at least 50% of the
maintenance events for the owned and investor-owned lease
fleet.
- During the quarter, Trinity repurchased approximately $37
million of shares under the Company's authorized share repurchase
program, of which $145 million remains authorized through December
31, 2021.
- In March 2021, the Trinity Industries Leasing Company ("TILC")
warehouse facility was extended through March 15, 2024, and the
total facility commitment was increased from $750 million to $1.0
billion, with a potential additional increase of up to an
additional $250 million, subject to certain conditions.
- In January 2021, TILC announced its Green Financing Framework
supported by a second-party opinion from Sustainalytics, a
Morningstar company, enabling the leasing company to issue green
financing instruments, including green nonrecourse ABS bonds and
green loans, supported by green eligible assets. Under the existing
framework, TILC has issued over $4 billion of railcar-related debt
that meet the criteria and qualify for the Green Financing
designation.
- The Company's income tax receivable at the end of the first
quarter was $441 million.
Cost Optimization and Operating Footprint
Rationalization
- In connection with the Company's ongoing assessment of future
needs to support our rail-focused strategy and to optimize the
performance of the business, the Company recognized pre-tax
restructuring activities totaling a net gain of $0.3 million for
the quarter, primarily from the disposition of certain
non-operating facilities, partially offset by employee transition
costs.
- During the quarter, the Company sold an idled facility in
Dallas, Texas, which was not a part of the Company's previous
restructuring efforts, for a gain of $8.7 million.
Other Business
- During the first quarter, Trinity experienced two
weather-related events that disrupted operations and impacted
operating profit by approximately $4 million due to lost
productivity, and maintenance and repair of damaged facilities.
- In February, winter storms idled several of our facilities for
nearly two weeks given disruptions to critical utilities.
- In the last week of March, a tornado damaged the Company's
railcar maintenance facility in Cartersville, Georgia. This event
is expected to have a minor impact on the Rail Products Group's
second quarter results, and we believe our insurance coverage is
sufficient to cover property damage costs related to the event;
additionally, the Company may be entitled to business interruption
proceeds in future periods
Conference Call
Trinity will hold a conference call at 8:30 a.m. Eastern on
April 22, 2021 to discuss its first quarter results. To listen to
the call, please visit the Investor Relations section of the
Company's website at www.trin.net and access the Events &
Presentations webpage, or the live call can be accessed at
1-888-317-6003 with the conference passcode "5196726". Please call
at least 10 minutes in advance to ensure a timely connection. An
audio replay may be accessed through the Company’s website or by
dialing 1-877-344-7529 with passcode "10152017" until 11:59 p.m.
Eastern on April 29, 2021.
Additionally, the Company will provide Supplemental Materials to
accompany the earnings conference call. The materials will be
accessible both within the webcast and on Trinity's Investor
Relations website under the Events and Presentations portion of the
site along with the First Quarter Earnings Call event weblink.
Non-GAAP Financial
Measures
We have included financial measures compiled in accordance with
generally accepted accounting principles ("GAAP") and certain
non-GAAP measures in this earnings press release to provide
management and investors with additional information regarding our
financial results. Non-GAAP measures should not be considered in
isolation or as a substitute for our reporting results prepared in
accordance with GAAP and, as calculated, may not be comparable to
other similarly titled measures for other companies. For each
non-GAAP financial measure, a reconciliation to the most comparable
GAAP measure has been included in the accompanying tables. When
forward-looking non-GAAP measures are provided, quantitative
reconciliations to the most directly comparable GAAP measures are
not provided because management cannot, without unreasonable
effort, predict the timing and amounts of certain items included in
the computations of each of these measures. These factors include,
but are not limited to: the product mix of expected railcar
deliveries; the timing and amount of significant transactions and
investments, such as lease portfolio sales, capital expenditures,
and returns of capital to shareholders; and the amount and timing
of certain other items outside the normal course of our core
business operations, such as restructuring activities and the
potential financial and operational impacts of the COVID-19
pandemic.
About Trinity Industries
Trinity Industries, Inc., headquartered in Dallas, Texas, owns
businesses that are leading providers of rail transportation
products and services in North America. Our rail-related businesses
market their railcar products and services under the trade name
TrinityRail®. The TrinityRail platform provides railcar leasing and
management services, as well as railcar manufacturing, maintenance
and modifications. Trinity also owns businesses engaged in the
manufacture of products used on the nation’s roadways and in
traffic control. Trinity reports its financial results in three
principal business segments: the Railcar Leasing and Management
Services Group, the Rail Products Group, and All Other. For more
information, visit: www.trin.net.
Some statements in this release, which are not historical facts,
are “forward-looking statements” as defined by the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements about Trinity's estimates,
expectations, beliefs, intentions or strategies for the future, and
the assumptions underlying these forward-looking statements,
including, but not limited to, future financial and operating
performance, future opportunities and any other statements
regarding events or developments that Trinity believes or
anticipates will or may occur in the future, including the
potential financial and operational impacts of the COVID-19
pandemic. Trinity uses the words “anticipates,” “assumes,”
“believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,”
“will,” “should,” “guidance,” “projected,” “outlook,” and similar
expressions to identify these forward-looking statements.
Forward-looking statements speak only as of the date of this
release, and Trinity expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Trinity’s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based,
except as required by federal securities laws. Forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from historical experience or our
present expectations, including but not limited to risks and
uncertainties regarding economic, competitive, governmental, and
technological factors affecting Trinity’s operations, markets,
products, services and prices, and such forward-looking statements
are not guarantees of future performance. For a discussion of such
risks and uncertainties, which could cause actual results to differ
from those contained in the forward-looking statements, see “Risk
Factors” and “Forward-Looking Statements” in Trinity’s Annual
Report on Form 10-K for the most recent fiscal year, as may be
revised and updated by Trinity’s Quarterly Reports on Form 10-Q,
and Trinity’s Current Reports on Form 8-K.
- TABLES TO FOLLOW -
Trinity Industries,
Inc.
Condensed Consolidated
Statements of Operations
(in millions, except per share
amounts)
(unaudited)
Three Months Ended
March 31,
2021
2020
Revenues
$
398.8
$
615.2
Operating costs:
Cost of revenues
296.0
482.0
Selling, engineering, and administrative
expenses
54.4
64.3
Gains on dispositions of property:
Lease portfolio sales
1.7
8.7
Other
9.8
0.9
Restructuring activities, net
(0.3
)
5.5
338.6
542.2
Operating profit
60.2
73.0
Interest expense, net
51.3
58.9
Other, net
1.2
(0.8
)
Income from continuing operations before
income taxes
7.7
14.9
Provision (benefit) for income taxes:
Current
4.8
(372.8
)
Deferred
1.2
225.2
6.0
(147.6
)
Income from continuing operations
1.7
162.5
Loss from discontinued operations, net of
income taxes
(0.4
)
(0.2
)
Net income
1.3
162.3
Net income (loss) attributable to
noncontrolling interest
(2.0
)
0.6
Net income attributable to Trinity
Industries, Inc.
$
3.3
$
161.7
Basic earnings per common share:
Income from continuing operations
$
0.03
$
1.36
Income (loss) from discontinued
operations
—
—
Basic net income attributable to Trinity
Industries, Inc.
$
0.03
$
1.36
Diluted earnings per common share:
Income from continuing operations
$
0.03
$
1.33
Income (loss) from discontinued
operations
—
—
Diluted net income attributable to Trinity
Industries, Inc.
$
0.03
$
1.33
Weighted average number of shares
outstanding:
Basic
110.2
118.0
Diluted
112.6
119.9
Trinity has certain unvested restricted stock awards that
participate in dividends on a nonforfeitable basis and are
therefore considered to be participating securities. Consequently,
diluted net income attributable to Trinity Industries, Inc. per
common share is calculated under both the two-class method and the
treasury stock method, and the more dilutive of the two
calculations is presented.
Trinity Industries,
Inc.
Condensed Segment Data
(in millions)
(unaudited)
Three Months Ended
March 31,
Revenues:
2021
2020
Railcar Leasing and Management Services
Group
$
183.5
$
236.3
Rail Products Group
261.0
509.4
All Other
68.1
63.4
Segment Totals before Eliminations
512.6
809.1
Eliminations – Lease Subsidiary
(111.3
)
(190.4
)
Eliminations – Other
(2.5
)
(3.5
)
Consolidated Total
$
398.8
$
615.2
Three Months Ended
March 31,
Operating profit (loss):
2021
2020
Railcar Leasing and Management Services
Group
$
78.3
$
92.9
Rail Products Group
(8.8
)
25.1
All Other
15.3
9.3
Segment Totals before Eliminations,
Corporate Expenses, and Restructuring activities
84.8
127.3
Corporate
(22.7
)
(28.1
)
Restructuring activities, net
0.3
(5.5
)
Eliminations – Lease Subsidiary
(1.8
)
(19.9
)
Eliminations – Other
(0.4
)
(0.8
)
Consolidated Total
$
60.2
$
73.0
Trinity Industries,
Inc.
Selected Financial
Information – Leasing Group
($ in millions)
(unaudited)
Three Months Ended
March 31,
2021
2020
Revenues:
Leasing and management
$
183.5
$
192.0
Sales of railcars owned one year or less
at the time of sale (1)
—
44.3
Total revenues
$
183.5
$
236.3
Operating profit (2):
Leasing and management
$
76.6
$
82.5
Lease portfolio sales (1)
1.7
10.4
Total operating profit
$
78.3
$
92.9
Total operating profit margin
42.7
%
39.3
%
Leasing and management operating profit
margin
41.7
%
43.0
%
Selected expense information:
Depreciation (3)
$
54.6
$
53.6
Maintenance and compliance
$
25.6
$
25.9
Rent
$
1.7
$
3.0
Selling, engineering, and administrative
expenses
$
11.3
$
14.3
Interest
$
45.7
$
55.1
Three Months Ended
March 31,
2021
2020
(in millions)
Lease portfolio sales
$
17.3
$
112.8
Operating profit on lease portfolio
sales
$
1.7
$
10.4
Operating profit margin on lease portfolio
sales
9.8
%
9.2
%
(1) Beginning in the fourth quarter of
2020, we made a prospective change to the presentation of railcar
sales and now present all sales of railcars from the lease fleet as
a net gain or loss from the disposal of a long-term asset
regardless of the age of railcar that is sold. Historically, we
presented sales of railcars from the lease fleet on a gross basis
in leasing revenues and cost of revenues if the railcars had been
owned for one year or less at the time of sale. Sales of railcars
from the lease fleet owned for more than one year had historically
been presented as a net gain or loss from the disposal of a
long-term asset.
(2) Operating profit includes:
depreciation; maintenance and compliance; rent; and selling,
engineering, and administrative expenses. Amortization of deferred
profit on railcars sold from the Rail Products Group to the Leasing
Group is included in the operating profit of the Leasing Group,
resulting in the recognition of depreciation expense based on the
Company's original manufacturing cost of the railcars. Interest
expense is not a component of operating profit and includes the
effect of hedges.
(3) Depreciation expense related to our
small cube covered hopper railcars decreased by approximately $3.5
million for the three months ended March 31, 2021 relative to the
three months ended March 31, 2020 as a result of the impairment
charge recorded in the second quarter of 2020 related to these
railcars.
Trinity Industries, Inc.
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
March 31, 2021
December 31, 2020
ASSETS
Cash and cash equivalents
$
178.1
$
132.0
Receivables, net of allowance
197.3
199.0
Income tax receivable
440.5
445.8
Inventories
320.9
321.2
Restricted cash
107.4
96.4
Property, plant, and equipment, net
7,026.8
7,003.4
Goodwill
215.7
208.8
Other assets
288.8
295.2
Total assets
$
8,775.5
$
8,701.8
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable
$
159.2
$
156.4
Accrued liabilities
276.3
314.7
Debt
5,165.1
5,017.0
Deferred income taxes
1,051.5
1,047.5
Other liabilities
155.5
150.2
Stockholders' equity:
Trinity Industries, Inc.
1,692.4
1,738.8
Noncontrolling interest
275.5
277.2
1,967.9
2,016.0
Total liabilities and stockholders'
equity
$
8,775.5
$
8,701.8
Trinity Industries, Inc.
Additional Balance Sheet
Information
(in millions)
(unaudited)
March 31, 2021
December 31, 2020
Property, Plant, and Equipment
Manufacturing/Corporate:
Property, plant, and equipment
$
966.7
$
979.4
Accumulated depreciation
(569.1
)
(577.9
)
397.6
401.5
Leasing:
Wholly-owned subsidiaries:
Machinery and other
19.4
19.5
Equipment on lease
7,090.6
7,010.6
Accumulated depreciation
(1,279.7
)
(1,234.2
)
5,830.3
5,795.9
Partially-owned subsidiaries:
Equipment on lease
2,247.8
2,248.2
Accumulated depreciation
(635.9
)
(621.9
)
1,611.9
1,626.3
Deferred profit on railcars sold to the
Leasing Group
(1,064.7
)
(1,064.7
)
Accumulated amortization
251.7
244.4
(813.0
)
(820.3
)
$
7,026.8
$
7,003.4
March 31, 2021
December 31, 2020
Debt
Corporate – Recourse:
Revolving credit facility
$
—
$
50.0
Senior notes, net of unamortized discount
of $0.2 and $0.2
399.8
399.8
399.8
449.8
Less: unamortized debt issuance costs
(1.6
)
(1.6
)
Total recourse debt
398.2
448.2
Leasing – Non-recourse:
Wholly-owned subsidiaries:
Secured railcar equipment notes, net of
unamortized discount of $0.5 and $0.6
2,018.5
2,042.4
2017 promissory notes, net of unamortized
discount of $9.5 and $10.1
792.1
802.7
TILC warehouse facility
763.9
519.4
3,574.5
3,364.5
Less: unamortized debt issuance costs
(24.0
)
(24.0
)
3,550.5
3,340.5
Partially-owned subsidiaries:
Secured railcar equipment notes
1,225.2
1,237.5
Less: unamortized debt issuance costs
(8.8
)
(9.2
)
1,216.4
1,228.3
Total non–recourse debt
4,766.9
4,568.8
Total debt
$
5,165.1
$
5,017.0
Trinity Industries, Inc.
Condensed Consolidated Statements of
Cash Flows
(in millions)
(unaudited)
Three Months Ended
March 31,
2021
2020
Operating activities:
Net cash provided by operating activities
– continuing operations
$
70.1
$
173.8
Net cash used in operating activities –
discontinued operations
(0.4
)
(0.2
)
Net cash provided by operating
activities
69.7
173.6
Investing activities:
Proceeds from lease portfolio sales
17.3
68.5
Proceeds from dispositions of property and
other assets
19.8
9.8
Capital expenditures – leasing (net of
sold lease fleet railcars owned one year or less with a net cost of
$42.5 for the three months ended March 31, 2020)
(107.9
)
(129.2
)
Capital expenditures – manufacturing and
other
(8.5
)
(14.0
)
Acquisitions, net of cash acquired
(16.6
)
—
Other
(0.1
)
0.3
Net cash used in investing activities
(96.0
)
(64.6
)
Financing activities:
Net (repayments of) proceeds from debt
142.4
(19.0
)
Shares repurchased
(35.7
)
(35.4
)
Dividends paid to common shareholders
(23.2
)
(22.7
)
Other
(0.1
)
—
Net cash provided by (used in) financing
activities
83.4
(77.1
)
Net increase in cash, cash equivalents,
and restricted cash
57.1
31.9
Cash, cash equivalents, and restricted
cash at beginning of period
228.4
277.6
Cash, cash equivalents, and restricted
cash at end of period
$
285.5
$
309.5
Trinity Industries, Inc. Reconciliations of Non-GAAP
Measures (in millions, except per share amounts)
(unaudited)
Adjusted Operating Results
We have supplemented the presentation of our reported GAAP
operating profit, income from continuing operations before income
taxes, provision (benefit) for income taxes, income from continuing
operations, net income from continuing operations attributable to
Trinity Industries, Inc., and diluted income from continuing
operations per common share attributable to Trinity Industries,
Inc. with non-GAAP measures that adjust the GAAP measures to
exclude the impact of pension plan settlement, restructuring
activities, early redemption of debt, the income tax effects of the
CARES Act, and certain other non-recurring transactions or events
(as applicable). These non-GAAP measures are derived from amounts
included in our GAAP financial statements and are reconciled to the
most directly comparable GAAP financial measures in the tables
below. Management believes that these measures are useful to both
management and investors for analyzing the performance of our
business without the impact of certain non-recurring items.
Non-GAAP measures should not be considered in isolation or as a
substitute for our reporting results prepared in accordance with
GAAP and, as calculated, may not be comparable to other similarly
titled measures for other companies.
Three Months Ended March 31,
2021
GAAP
Pension plan settlement
(1)
Restructuring activities
(1)
Income tax effect of CARES
Act
Adjusted
Operating profit
$
60.2
$
—
$
(0.3
)
$
—
$
59.9
Income from continuing operations before
income taxes
$
7.7
$
1.2
$
(0.3
)
$
—
$
8.6
Provision (benefit) for income taxes
$
6.0
$
0.3
$
(0.1
)
$
(3.8
)
$
2.4
Income from continuing operations
$
1.7
$
0.9
$
(0.2
)
$
3.8
$
6.2
Net income from continuing operations
attributable to Trinity Industries, Inc.
$
3.7
$
0.9
$
(0.2
)
$
3.8
$
8.2
Diluted weighted average shares
outstanding
112.6
112.6
Diluted income from continuing operations
per common share attributable to Trinity Industries, Inc.
$
0.03
$
0.07
Three Months Ended March 31,
2020
GAAP
Restructuring activities
(1)
Early redemption of debt
(1)
Income tax effect of CARES
Act
Adjusted
Operating profit
$
73.0
$
5.5
$
—
$
—
$
78.5
Income from continuing operations before
income taxes
$
14.9
$
5.5
$
5.0
$
—
$
25.4
Provision (benefit) for income taxes
$
(147.6
)
$
1.3
$
1.2
$
154.7
$
9.6
Income from continuing operations
$
162.5
$
4.2
$
3.8
$
(154.7
)
$
15.8
Net income from continuing operations
attributable to Trinity Industries, Inc.
$
161.9
$
4.2
$
3.8
$
(154.7
)
$
15.2
Diluted weighted average shares
outstanding
119.9
119.9
Diluted income from continuing operations
per common share attributable to Trinity Industries, Inc.
$
1.33
$
0.11
(1) The effective tax rate for pension
plan settlement, restructuring activities, and the early redemption
of debt is before consideration of the CARES Act.
Free Cash Flow
Total Free Cash Flow After Investments and Dividends ("Free Cash
Flow") is a non-GAAP financial measure. The change in presentation
of sales of railcars from the lease fleet, which was effected on a
prospective basis beginning in the fourth quarter of 2020, had no
effect on our previously reported Free Cash Flow.
We believe Free Cash Flow is useful to both management and
investors as it provides a relevant measure of liquidity and a
useful basis for assessing our ability to fund our operations and
repay our debt. Free Cash Flow is reconciled to net cash provided
by operating activities from continuing operations, the most
directly comparable GAAP financial measure, in the following
tables.
For the three months ended March 31, 2021, Free Cash Flow is
defined as net cash provided by operating activities from
continuing operations as computed in accordance with GAAP, plus
cash proceeds from lease portfolio sales, less capital expenditures
for manufacturing, dividends paid, and Equity CapEx for new leased
railcars. Equity CapEx for new leased railcars is defined as
leasing capital expenditures, adjusted to exclude net proceeds from
(repayments of) debt.
Three Months Ended March 31,
2021
(in millions)
Net cash provided by operating activities
– continuing operations
$
70.1
Proceeds from lease portfolio sales
17.3
Adjusted Net Cash Provided by Operating
Activities
87.4
Capital expenditures – manufacturing and
other
(8.5
)
Dividends paid to common stockholders
(23.2
)
Free Cash Flow (before Capital
expenditures – leasing)
55.7
Equity CapEx for new leased railcars
34.5
Total Free Cash Flow After Investments and
Dividends
$
90.2
Capital expenditures – leasing
$
107.9
Less:
Payments to retire debt
(185.3
)
Proceeds from issuance of debt
327.7
Net proceeds from (repayments of) debt
142.4
Equity CapEx for new leased railcars
$
(34.5
)
For the three months ended March 31, 2020, Free Cash Flow is
defined as net cash provided by operating activities from
continuing operations as computed in accordance with GAAP, plus
cash proceeds from sales of leased railcars owned more than one
year at the time of sale, less capital expenditures for
manufacturing, dividends paid, and Equity CapEx for new leased
railcars. Equity CapEx for new leased railcars is defined as
leasing capital expenditures, net of sold lease fleet railcars
owned one year or less, adjusted to exclude net proceeds from
(repayments of) debt.
Three Months Ended March 31,
2020
(in millions)
Net cash provided by operating activities
– continuing operations
$
173.8
Proceeds from railcar lease fleet sales
owned more than one year at the time of sale
68.5
Adjusted Net Cash Provided by Operating
Activities
242.3
Capital expenditures – manufacturing and
other
(14.0
)
Dividends paid to common stockholders
(22.7
)
Free Cash Flow (before Capital
expenditures – leasing)
205.6
Equity CapEx for new leased railcars
(148.2
)
Total Free Cash Flow After Investments and
Dividends
$
57.4
Capital expenditures – leasing, net of
sold lease fleet railcars owned one year or less of $42.5
$
129.2
Less:
Payments to retire debt
(471.4
)
Proceeds from issuance of debt
452.4
Net proceeds from (repayments of) debt
(19.0
)
Equity CapEx for new leased railcars
$
148.2
EBITDA and Adjusted EBITDA
“EBITDA” is defined as income from continuing operations plus
interest expense, income taxes, and depreciation and amortization
expense. Adjusted EBITDA is defined as EBITDA plus non-cash
restructuring activities and pension plan settlement. EBITDA and
Adjusted EBITDA are non-GAAP financial measures; however, the
amounts included in these calculations are derived from amounts
included in our GAAP financial statements. EBITDA and Adjusted
EBITDA are reconciled to net income, the most directly comparable
GAAP financial measure, in the following table. This information is
provided to assist management and investors in making meaningful
comparisons of our operating performance between periods. We
believe EBITDA is a useful measure for analyzing the performance of
our business. We also believe that EBITDA is commonly reported and
widely used by investors and other interested parties as a measure
of a company’s operating performance and debt servicing ability
because it assists in comparing performance on a consistent basis
without regard to capital structure, depreciation or amortization
(which can vary significantly depending on many factors). EBITDA
and Adjusted EBITDA should not be considered as alternatives to net
income as indicators of our operating performance, or as
alternatives to operating cash flows as measures of liquidity.
Non-GAAP measures should not be considered in isolation or as a
substitute for our reporting results prepared in accordance with
GAAP and, as calculated, may not be comparable to other similarly
titled measures for other companies.
Three Months Ended
March 31,
2021
2020
Net income
$
1.3
$
162.3
Less: Loss from discontinued operations,
net of income taxes
(0.4
)
(0.2
)
Income from continuing operations
$
1.7
$
162.5
Interest expense
51.4
61.3
Provision (benefit) for income taxes
6.0
(147.6
)
Depreciation and amortization expense
66.6
66.9
EBITDA
$
125.7
$
143.1
Restructuring activities, net
(0.3
)
5.5
Pension plan settlement
1.2
—
Adjusted EBITDA
$
126.6
$
148.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210422005140/en/
Investor Contact: Jessica L. Greiner Vice President,
Investor Relations and Communications Trinity Industries, Inc.
(Investors) 214/631-4420 Media Contact: Jack L. Todd Vice
President, Public Affairs Trinity Industries, Inc. (Media Line)
214/589-8909
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