November 2, 2023November 2, 2023TRINITY INDUSTRIES INC0000099780false00000997802023-11-022023-11-02

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 2, 2023
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_______________________________________
(Exact name of registrant as specified in its charter)
   
Delaware1-690375-0225040
(State or other jurisdiction
of incorporation)		(Commission File No.)(I.R.S. Employer
Identification No.)
14221 N. Dallas Parkway, Suite 1100,
Dallas, Texas 75254-2957
(Address of Principal Executive Offices, and Zip Code)
(214) 631-4420
Registrant's Telephone Number, Including Area Code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
______________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockTRNNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02 Results of Operations and Financial Condition.
Trinity Industries, Inc. ("Trinity") hereby furnishes the information set forth in its News Release, dated November 2, 2023, announcing operating results for the three month period ended September 30, 2023, a copy of which is furnished as Exhibit 99.1 and incorporated herein by reference. On November 2, 2023, Trinity held a conference call and webcast with respect to its financial results for the three month period ended September 30, 2023. The conference call scripts of Leigh Anne Mann, Vice President of Investor Relations; E. Jean Savage, Chief Executive Officer and President; and Eric R. Marchetto, Executive Vice President and Chief Financial Officer; are furnished as Exhibit 99.2, and incorporated herein by reference.
The conference call, News Release, and Supplemental Materials, described below, included references to Adjusted Operating Results and Adjusted Earnings Per Share, Pre-Tax Return on Equity, Adjusted Free Cash Flow, EBITDA and Adjusted EBITDA, which are not calculations based on generally accepted accounting principles (“GAAP”). Reconciliations of each of these non-GAAP measures to the most directly comparable GAAP measures have been included in the News Release and/or the Supplemental Materials. When forward-looking non-GAAP measures are provided, Trinity does not provide quantitative reconciliations of forward-looking non-GAAP measures to the most directly comparable GAAP measures because it 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.
This information and the materials described in Item 7.01 are not "filed" pursuant to the Securities Exchange Act of 1934 and are not incorporated by reference into any Securities Act of 1933 registration statements. Additionally, the submission of the report on Form 8-K is not an admission of the materiality of any information in this report that is required to be disclosed solely by Regulation FD.
Item 7.01 Regulation FD Disclosure.
See "Item 2.02 – Results of Operations and Financial Condition." Additionally, Trinity posted Supplemental Materials to its website to accompany the conference call; a copy of these materials is furnished as Exhibit 99.3 and incorporated herein by reference.
Forward-Looking Statements
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. 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 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.


Item 9.01 Financial Statements and Exhibits.

(a) - (c) Not applicable.

(d) Exhibits:
NO.DESCRIPTION
99.1 
99.2 
99.3 
101.SCHInline XBRL Taxonomy Extension Schema Document (filed electronically herewith).
101.LABInline XBRL Taxonomy Extension Label Linkbase Document (filed electronically herewith).
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document (filed electronically herewith).
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Trinity Industries, Inc.
November 2, 2023By:/s/ Eric R. Marchetto
Name: Eric R. Marchetto
Title: Executive Vice President and Chief Financial Officer



Exhibit 99.1
NEWS RELEASE
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FOR IMMEDIATE RELEASE
Trinity Industries, Inc. Announces Third Quarter 2023 Results
Generates year-to-date operating and adjusted free cash flow of $216 million and $50 million, respectively
Reports quarterly GAAP and adjusted earnings from continuing operations of $0.29 and $0.26 per diluted share, respectively
Lease fleet utilization of 98.1% and Future Lease Rate Differential ("FLRD") of positive 26.6% at quarter-end
Delivered 4,325 railcars and received orders for 3,200 railcars in the quarter; backlog of $3.6 billion at quarter-end

DALLAS, Texas – November 2, 2023 – Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the third quarter ended September 30, 2023.
Financial and Operational Highlights
•Quarterly total company revenues of $821 million; 65% improvement year over year
•Quarterly income from continuing operations per common diluted share ("EPS") of $0.29 and quarterly adjusted EPS of $0.26
•Lease fleet utilization of 98.1% and FLRD of positive 26.6% at quarter-end
•Railcar deliveries of 4,325 and new railcar orders of 3,200
•Year-to-date cash flow from continuing operations and adjusted free cash flow after investments and dividends ("Adjusted Free Cash Flow") were $216 million and $50 million, respectively
2023 Guidance
•Industry deliveries of approximately 45,000 railcars
•Net investment in the lease fleet of $250 million to $350 million
•Manufacturing capital expenditures of $40 million to $50 million
•EPS of $1.20 to $1.35
◦Excludes items outside of our core business operations
Management Commentary
“Trinity’s third quarter results reflect significantly stronger performance, with revenue growth of 65% as compared to a year ago,” stated Trinity’s Chief Executive Officer and President, Jean Savage. “We believe we are on a good path to end 2023 with favorable financial performance and continued improvement.”

“In our Railcar Leasing and Management Services Group, revenues are up 14% year over year, reflecting six quarters of beneficial re-pricing, as well as contributions from our recently acquired businesses in the segment. Our forward-looking metrics continue to point toward consistent strength in lease rates, with an FLRD of 26.6% and lease fleet utilization of 98.1%.”

“As previously disclosed, deliveries in the quarter of 4,325 railcars were about 14% below our internal expectations as a result of the border closures and continued congestion,” Ms. Savage continued. “Despite this meaningful impact, operating margins improved in the Rail Products Group segment to 5.2%, excluding gains from insurance recoveries. We expect fourth quarter segment margins to improve sequentially again due to continued efficiency improvement and delivery growth.”

Ms. Savage concluded, “We are proud of our third quarter results and the improvement we are seeing in our business. Due to the missed deliveries in the third quarter and related supply chain and efficiency impacts caused by congestion at the Mexico border, we are lowering our full year adjusted EPS guidance to a range of $1.20 to $1.35. This guidance reflects expected meaningful growth in the fourth quarter, and we maintain our conviction in our ability to execute and close the year with solid momentum.”

1

Consolidated Financial Summary
Three Months Ended
September 30,
20232022Year over Year – Comparison
($ in millions, except per share amounts)
Revenues$821.3$496.6Higher volume of external deliveries in the Rail Products Group
Operating profit
$100.2$92.7Higher external deliveries in the Rail Products Group and improved lease rates in the Leasing Group, partially offset by lower lease portfolio sales volume and increased employee-related and other operating costs
Interest expense, net$68.8$55.0
Higher overall average debt and higher interest rates during Q3 2023
Net income from continuing operations attributable to Trinity Industries, Inc.$24.5$29.2
EBITDA (1)
$177.5$164.3
Effective tax expense rate18.6 %22.5 %State tax law changes enacted in Q3 2023
Diluted EPS – GAAP$0.29$0.35
Diluted EPS – Adjusted (1)
$0.26$0.34
Nine Months Ended
September 30,
20232022Year over Year – Comparison
(in millions)
Net cash provided by (used in) operating activities – continuing operations$215.8$(52.6)Inventory levels stabilized relative to prior year inventory build up
Adjusted Free Cash Flow (1)
$49.5$0.1
Net lease fleet investment$237.5$176.3
Returns of capital to stockholders$64.7$122.7
2022 included $64 million of share repurchase activity
(1) 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.

2

Business Group Summary
Three Months Ended
September 30,
20232022Year over Year – Comparison
($ in millions)
Railcar Leasing and Management Services Group
Leasing and management revenues$222.6$194.8Improved lease rates and higher utilization, as well as acquisition-related revenues included in the current year period
Leasing and management operating profit$85.5$73.6Improved lease rates and higher utilization, partially offset by higher maintenance costs
Operating profit on lease portfolio sales$3.1$34.3Lower lease fleet portfolio sales volume
Fleet utilization (1)
98.1 %97.9 %
Future Lease Rate Differential (2)
+26.6 %+11.0 %Improvement in current lease rates
Owned lease fleet (in units) (1)
109,055109,195
Investor-owned lease fleet (in units)33,02533,245
Rail Products Group
Revenues$682.2$597.3Higher volume of deliveries and a favorable mix of railcars sold
Operating profit$39.2$26.0Higher volume of deliveries, partially offset by foreign currency fluctuations. Includes insurance recoveries of $3.7 million and $1.1 million in the current and prior year quarters, respectively.
Operating profit margin5.7 %4.4 %
Revenues eliminations – Lease subsidiary$(83.2)$(295.3)
Operating profit eliminations – Lease subsidiary$(2.4)$(19.6)
New railcars:
Deliveries (in units)4,3253,935
Orders (in units)3,20019,5002022 includes long-term supply agreement of 15,000 railcars
Order value$401.5$2,405.5
2022 includes $1.8 billion from long-term supply agreement
Backlog value$3,598.4$4,090.9

Sustainable railcar conversions:
Deliveries (in units)620300
Backlog (in units)1,5402,420
Backlog value$124.4$201.4
Corporate and other
Selling, engineering, and administrative expenses$25.2$25.1
Gains on dispositions of property$—$(3.7)
September 30, 2023December 31, 2022
Loan-to-value ratio
Wholly-owned subsidiaries, excluding corporate revolving credit facility64.9 %65.7 %
(1) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements.
(2) FLRD calculates the implied change in lease rates for railcar leases expiring over the next four quarters. The FLRD assumes that these expiring leases will be renewed at the most recent quarterly transacted lease rates for each railcar type. We believe the FLRD is useful to both management and investors as it provides insight into the near-term trend in lease rates.
3

Conference Call
Trinity will hold a conference call at 8:00 a.m. Eastern on November 2, 2023 to discuss its third 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 "0847113". 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 "3695080" until 11:59 p.m. Eastern on November 7, 2023.
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 Third 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 reported 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 stockholders; and the amount and timing of certain other items outside the normal course of our core business operations.
4

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 businesses market their railcar products and services under the trade name TrinityRail®. The TrinityRail platform provides railcar leasing and management services; railcar manufacturing, maintenance and modifications; and other railcar logistics products and services. Trinity reports its financial results in two reportable segments: the Railcar Leasing and Management Services Group and the Rail Products Group. 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. 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.
Investor Contact:
Leigh Anne Mann
Vice President, Investor Relations
Trinity Industries, Inc.
(Investors) 214/631-4420
Media Contact:
Jack L. Todd
Vice President, Public Affairs
Trinity Industries, Inc.
(Media Line) 214/589-8909
- TABLES TO FOLLOW -
5

Trinity Industries, Inc.
Condensed Consolidated Statements of Operations
(in millions, except per share amounts)
(unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Revenues$821.3 $496.6 $2,185.4 $1,386.1 
Operating costs:
Cost of revenues679.5 395.3 1,819.2 1,119.4 
Selling, engineering, and administrative expenses49.1 48.0 153.3 137.7 
Gains on dispositions of property:
Lease portfolio sales3.1 34.3 46.4 73.0 
Other4.4 5.1 6.8 19.5 
Restructuring activities, net— — (2.2)1.0 
721.1 403.9 1,917.1 1,165.6 
Operating profit100.2 92.7 268.3 220.5 
Interest expense, net68.8 55.0 197.8 148.2 
Loss on extinguishment of debt— — — 1.5 
Other, net (0.9)(0.6)2.0 (2.7)
Income from continuing operations before income taxes32.3 38.3 68.5 73.5 
Provision (benefit) for income taxes:
Current22.2 (2.6)26.2 1.2 
Deferred(16.2)11.2 (24.3)16.2 
6.0 8.6 1.9 17.4 
Income from continuing operations26.3 29.7 66.6 56.1 
Loss from discontinued operations, net of income taxes(2.7)(3.4)(8.1)(13.7)
Loss on sale of discontinued operations, net of income taxes— — — (5.7)
Net income23.6 26.3 58.5 36.7 
Net income attributable to noncontrolling interest1.8 0.5 15.3 7.9 
Net income attributable to Trinity Industries, Inc.$21.8 $25.8 $43.2 $28.8 
Basic earnings per common share:
Income from continuing operations$0.30 $0.36 $0.63 $0.59 
Loss from discontinued operations(0.03)(0.04)(0.10)(0.24)
Basic net income attributable to Trinity Industries, Inc.$0.27 $0.32 $0.53 $0.35 
Diluted earnings per common share:
Income from continuing operations$0.29 $0.35 $0.62 $0.57 
Loss from discontinued operations(0.03)(0.04)(0.10)(0.23)
Diluted net income attributable to Trinity Industries, Inc.$0.26 $0.31 $0.52 $0.34 
Weighted average number of shares outstanding:
Basic81.6 81.7 81.2 82.3 
Diluted83.5 83.3 83.5 84.4 
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.
6

Trinity Industries, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
September 30, 2023December 31, 2022
ASSETS
Cash and cash equivalents$114.0 $79.6 
Receivables, net of allowance392.8 323.5 
Income tax receivable7.9 7.8 
Inventories679.4 629.4 
Restricted cash152.7 214.7 
Property, plant, and equipment, net:
Manufacturing/Corporate343.5 340.7 
Leasing:
Wholly-owned subsidiaries5,915.7 5,788.1 
Partially-owned subsidiaries1,490.7 1,521.3 
Deferred profit on railcars sold to the Leasing Group(758.7)(763.3)
6,991.2 6,886.8 
Goodwill222.7 195.9 
Other assets412.7 386.6 
Total assets$8,973.4 $8,724.3 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable$325.8 $287.5 
Accrued liabilities328.0 261.0 
Debt:
Recourse794.2 624.1 
Non-recourse:
Wholly-owned subsidiaries3,838.3 3,800.7 
Partially-owned subsidiaries1,149.9 1,182.8 
5,782.4 5,607.6 
Deferred income taxes1,122.3 1,134.7 
Other liabilities161.5 163.9 
Stockholders' equity:
Trinity Industries, Inc.1,000.8 1,012.4 
Noncontrolling interest252.6 257.2 
1,253.4 1,269.6 
Total liabilities and stockholders' equity$8,973.4 $8,724.3 
7

Trinity Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Nine Months Ended
September 30,
20232022
Operating activities:
Net cash provided by (used in) operating activities – continuing operations$215.8 $(52.6)
Net cash used in operating activities – discontinued operations(8.1)(15.4)
Net cash provided by (used in) operating activities207.7 (68.0)
Investing activities:
Proceeds from lease portfolio sales245.8 514.8 
Proceeds from dispositions of property and other assets13.0 33.2 
Capital expenditures – leasing (483.3)(691.1)
Capital expenditures – manufacturing and other(29.4)(25.7)
Acquisitions, net of cash acquired(66.2)(9.4)
Proceeds from insurance recoveries4.9 7.6 
Equity investments(1.1)(15.5)
Net cash used in investing activities – continuing operations(316.3)(186.1)
Payments related to sale of discontinued operations— (2.7)
Net cash used in investing activities(316.3)(188.8)
Financing activities:
Net proceeds from (repayments of) debt165.3 313.0 
Shares repurchased— (36.8)
Dividends paid to common shareholders(64.7)(58.3)
Other financing activities(19.6)(24.8)
Net cash provided by financing activities81.0 193.1 
Net decrease in cash, cash equivalents, and restricted cash(27.6)(63.7)
Cash, cash equivalents, and restricted cash at beginning of period294.3 302.4 
Cash, cash equivalents, and restricted cash at end of period$266.7 $238.7 
8


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 certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; interest expense, net; and certain other 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 items that are not indicative of our normal business operations. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
Three Months Ended September 30, 2023
GAAP
Gains on dispositions of property – other (1)
Interest expense, net (2)
Adjusted
Operating profit$100.2 $(3.7)$— $96.5 
Income from continuing operations before income taxes$32.3 $(3.7)$(0.4)$28.2 
Provision (benefit) for income taxes$6.0 $(0.8)$(0.1)$5.1 
Income from continuing operations$26.3 $(2.9)$(0.3)$23.1 
Net income from continuing operations attributable to Trinity Industries, Inc.$24.5 $(2.9)$(0.3)$21.3 
Diluted weighted average shares outstanding83.583.5
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc.$0.29 $0.26 
Nine Months Ended September 30, 2023
GAAP
Selling, engineering, and administrative expenses (3)
Gains on dispositions of property – other (1)
Restructuring activities, net
Interest expense, net (2)
Adjusted
Operating profit$268.3 $2.0 $(4.9)$(2.2)$— $263.2 
Income from continuing operations before income taxes$68.5 $2.0 $(4.9)$(2.2)$(1.1)$62.3 
Provision (benefit) for income taxes$1.9 $0.5 $(1.2)$(0.6)$(0.3)$0.3 
Income from continuing operations$66.6 $1.5 $(3.7)$(1.6)$(0.8)$62.0 
Net income from continuing operations attributable to Trinity Industries, Inc.$51.3 $1.5 $(3.7)$(1.6)$(0.8)$46.7 
Diluted weighted average shares outstanding83.583.5
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc.$0.62 $0.56 
9

Three Months Ended September 30, 2022
GAAP
Gains on dispositions of property – other (1)
Interest expense, net (2)
Adjusted
Operating profit$92.7 $(1.1)$— $91.6 
Income from continuing operations before income taxes$38.3 $(1.1)$(0.3)$36.9 
Provision (benefit) for income taxes$8.6 $(0.3)$(0.1)$8.2 
Income from continuing operations$29.7 $(0.8)$(0.2)$28.7 
Net income from continuing operations attributable to Trinity Industries, Inc.$29.2 $(0.8)$(0.2)$28.2 
Diluted weighted average shares outstanding83.383.3
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc.$0.35 $0.34 

Nine Months Ended September 30, 2022
GAAP
Gains on dispositions of property – other (1)
Restructuring activities, net
Interest expense, net (2)
Adjusted
Operating profit$220.5 $(7.5)$1.0 $— $214.0 
Income from continuing operations before income taxes$73.5 $(7.5)$1.0 $(1.0)$66.0 
Provision (benefit) for income taxes$17.4 $(1.9)$0.3 $(0.3)$15.5 
Income from continuing operations$56.1 $(5.6)$0.7 $(0.7)$50.5 
Net income from continuing operations attributable to Trinity Industries, Inc.$48.2 $(5.6)$0.7 $(0.7)$42.6 
Diluted weighted average shares outstanding84.484.4
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc.$0.57 $0.50 
(1) Represents insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021.
(2) Represents interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets.
(3) Represents the change in estimated fair value of additional contingent consideration associated with an acquisition.


10

Adjusted Free Cash Flow
Adjusted Free Cash Flow After Investments and Dividends ("Adjusted Free Cash Flow") is a non-GAAP financial measure. We believe Adjusted 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. Adjusted Free Cash Flow is reconciled to net cash provided by (used in) operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following table. Adjusted Free Cash Flow is defined as net cash provided by (used in) 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 leased railcars. Equity CapEx for leased railcars is defined as leasing capital expenditures, adjusted to exclude net proceeds from (repayments of) recourse and non-recourse debt. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
Nine Months Ended
September 30,
20232022
Net cash provided by (used in) operating activities – continuing operations$215.8 $(52.6)
Proceeds from lease portfolio sales245.8 514.8 
Capital expenditures – manufacturing and other(29.4)(25.7)
Dividends paid to common stockholders(64.7)(58.3)
Equity CapEx for leased railcars(318.0)(378.1)
Adjusted Free Cash Flow After Investments and Dividends$49.5 $0.1 
Capital expenditures – leasing$483.3 $691.1 
Less:
Payments to retire debt(1,279.0)(1,351.5)
Proceeds from issuance of debt1,444.3 1,664.5 
Net proceeds from (repayments of) debt165.3 313.0 
Equity CapEx for leased railcars$318.0 $378.1 

11

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 certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; and interest income. 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 reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Net income$23.6 $26.3 $58.5 $36.7 
Less: Loss from discontinued operations, net of income taxes(2.7)(3.4)(8.1)(13.7)
Less: Loss on sale of discontinued operations, net of income taxes— — — (5.7)
Income from continuing operations$26.3 $29.7 $66.6 $56.1 
Interest expense72.1 56.2 206.5 152.3 
Provision (benefit) for income taxes6.0 8.6 1.9 17.4 
Depreciation and amortization expense73.1 69.8 219.9 206.0 
EBITDA
$177.5 $164.3 $494.9 $431.8 
Selling, engineering, and administrative expenses— — 2.0 — 
Gains on dispositions of property – other(3.7)(1.1)(4.9)(7.5)
Restructuring activities, net— — (2.2)1.0 
Interest income(0.4)(0.3)(1.1)(1.0)
Adjusted EBITDA$173.4 $162.9 $488.7 $424.3 
12
                    
Exhibit 99.2
Trinity Industries, Inc.
Earnings Release Conference Call – Q3 2023
November 2, 2023

Leigh Anne Mann
Vice President, Investor Relations
Thank you, operator. Good morning everyone. We appreciate you joining us for the Company’s third quarter 2023 financial results conference call.
Our prepared remarks will include comments from Jean Savage, Trinity’s Chief Executive Officer and President, and Eric Marchetto, the Company’s Chief Financial Officer. We will hold a Q&A session following the prepared remarks from our leaders.
During the call today, we will reference slides highlighting key points of discussion and certain non-GAAP financial metrics. The reconciliations of the non-GAAP metrics to comparable GAAP measures are provided in the appendix of the supplemental slides, which are accessible on our investor relations website at www.trin.net. These slides are under the Events and Presentations portion of the website, along with the Third Quarter Earnings Conference Call event link.
A replay of today’s call will be available after 10:30 a.m. Eastern time through midnight on November 7, 2023. Replay information is available under the Events and Presentations page on our Investor Relations website.
It is now my pleasure to turn the call over to Jean.
E. Jean Savage
Chief Executive Officer and President
Thank you, Leigh Anne, and good morning everyone.
I’ll start my prepared comments on Slide 3 with key messages we want to convey during this morning’s call. Trinity’s third quarter results reflect significantly stronger performance, with revenue growth of 65% compared to a year ago. We believe we are on a good path to end 2023 with favorable financial performance and continued improvement. In the quarter, we continued to experience strength in our leasing segment with fleet utilization of 98.1% and have confidence that lease rates will continue to rise given that our Future Lease Rate Differential, or FLRD, of 26.6% and continuing favorable railcar supply fundamentals. As previously disclosed, border closures and congestion resulted in a 14% lower than forecasted delivery rate in the quarter, with 4,325 deliveries. We will
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discuss the fourth quarter later in our prepared remarks, but we are lowering our 2023 adjusted EPS guidance to $1.20 to $1.35 to account for the deliveries lost due to these border issues and other related supply chain and efficiency impacts.
Please turn to Slide 4 for a market update and commercial overview. Starting with the top left graph, overall rail traffic is improving. As you will recall, intermodal volumes are the most significant headwind to rail traffic this year, but volumes have improved in recent weeks. Carload volumes remain up year over year as solid performance from motor vehicles, minerals, petroleum products, and farm products offset declines in grain volumes.
The industry population of railcars in storage has been shrinking due to improved utilization of covered hoppers, mostly for grain shipments this harvest season.
Moving to the bottom half of the slide, as I mentioned, our FLRD and utilization rates remain favorable in the quarter. Our FLRD of 26.6% shows our ability to continue to push rates upward while maintaining a high fleet utilization – 98.1% in the third quarter.
On the bottom right, the border closure and congestion impacted deliveries in the quarter. Orders and inquiries support replacement-level demand consistent with our expectations over the next few years.
Now let’s turn to Slide 5 and talk about financial results in the quarter. Revenue of $821 million is up 65% year over year, driven by a higher volume of external deliveries in the quarter. We earned an adjusted EPS of $0.26. As a reminder, in the third quarter of 2022, we completed a large railcar sale, which benefited EPS last year. Lease portfolio sale gains for the third quarter of 2023 were modest, but we are still targeting the fourth quarter for more meaningful railcar sales in 2023 and to achieve our net fleet investment targets.
Cash flow from continuing operations was $76 million in the quarter, and our adjusted free cash flow was a negative $31 million. Eric will talk more about cash a little later in our prepared remarks.
Please turn with me to Slide 6 to talk about our segments, starting with Leasing. Leasing revenue was $223 million in the quarter, up 14% year over year driven by improved lease rates, higher utilization, and acquisition-related revenues included in the current year period. Renewal lease rates in the quarter were 32.5% above expiring rates on average, trending closely to the FLRD. Thanks to favorable market conditions, we have delivered a double-digit FLRD for six consecutive quarters, and we are seeing a noticeable impact as over 30% of our fleet reflects the current robust lease rate environment. To preserve these lease rates, we continue to push term with average renewal lease
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terms of 55 months year-to-date. Even with the strong lease rate environment, our renewal success rate in the quarter was 86%, well above average, and evidence that lessors still have significant pricing power.
Leasing and management operating margin was 38.4%. This is slightly up year over year, with improved lease rates, partially offset by increased maintenance expense, depreciation expense, and the margin profile of acquisitions in the segment. Leasing maintenance is elevated primarily due to two ongoing industry trends. First, more change of service modifications to position railcars for their best opportunities and second, more scheduled compliance activity in the tank car fleet.
Moving to Rail Products, I want to touch on the border issues in the quarter briefly. On September 20th, the U.S. Customs and Border Protection Agency suspended U.S.-bound cross-border rail traffic in Eagle Pass, Texas, the primary border crossing we use for railcar deliveries from our manufacturing facilities in Mexico. This action was taken to assist the U.S. Border Patrol due to the influx of migrants at the border. While rail traffic operations resumed on September 23rd, congestion and rail traffic challenges continue to evolve. The third quarter impact was 685 fewer railcars delivered than expected. While we have started moving railcars again, we still have railcars temporarily sitting in storage and at our facilities, and we continue to evaluate available alternatives for rail and truck transportation between Mexico and the United States. We do not anticipate completing all these deliveries before the end of the year.
While deliveries in the quarter were lower than expected, they trended heavily toward external sales, which benefited the consolidated financials in the quarter. Additionally, despite the efficiency lost due to the border challenges, we saw operating margin improvement sequentially and year over year to 5.7%. In the quarter, the segment results included gains from insurance recoveries. Excluding those gains, the segment margin is 5.2%, reflecting meaningful labor and efficiency improvements. In the quarter, the peso remained strong at an average exchange rate of $17.07, but we were able to mitigate further risk with our hedging program.
We expect to exit the year with a segment operating margin in Rail Products of 8 to 9 percent, and a full-year average of 5 to 6 percent, barring further substantial rail service issues at the border. Additional congestion or closures will negatively impact our ability to get railcars across the border and may require us to slow down or temporarily suspend production. We are working with the railroads and the government agencies to do what we can to keep operations running smoothly for both inbound and outbound rail and truck traffic.
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The value of our new railcar backlog is $3.6 billion and we have another $124 million related to sustainable railcar conversions, giving us production visibility into 2024 and beyond.
Turn with me to Slide 7 to highlight a few more key accomplishments in the quarter. Our loan-to-value is currently 64.9%, which we view favorably. Year-to-date, our net investment in our lease fleet is $238 million, and our Pre-Tax ROE for the last twelve months is 9.6%.
And before I turn the call to Eric, I want to highlight one of our sustainability accomplishments. As of September of this year, Trinity received a rating of AA in the MSCI ESG Ratings Assessment. This rating demonstrates both our steady progress over the past four years and an acknowledgment of our ability to manage ESG risks relative to our peers. Nowhere is this stronger than the emphasis on employee safety, where our ISO 45001 certified program drives continuous improvement – improvement that is reflected in our safety incident rates.
Congratulations to our team on this accomplishment. Safety is a core value at Trinity, and our AA rating shows the industry’s recognition of our efforts.
And now, I’ll turn the call to Eric to review the financial statements and talk about the fourth quarter.
Eric R. Marchetto
Executive Vice President and Chief Financial Officer
Good morning everyone.
I’ll start my comments on Slide 8 with a discussion of the income and cash flow statements. Total revenues of $821 million in the quarter reflected higher external railcar deliveries and improved lease rates. Our GAAP earnings per share were $0.29. After adjusting out the $3.7 million of insurance recoveries during the quarter, our adjusted EPS was $0.26. It’s worth noting that gains from the lease portfolio sales were $3 million in the quarter. As I said last quarter, we expect to see higher gains in the fourth quarter of the year.
Moving to the cash flow statement, year-to-date cash flow from continuing operations is $216 million. Adjusted free cash flow is $50 million after investments and dividends. As Jean mentioned, adjusted free cash flow in the third quarter was a negative $31 million. This was predominantly driven by modest railcar sales in the quarter as well as net repayments of debt. Earlier this week, we paid our 238th consecutive dividend, which is a meaningful source of capital returns for our shareholders.
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On Slide 9, our liquidity of $780 million reflects our cash, revolver, and warehouse positions. Because of the border closure and congestion, we ended the quarter with higher inventory levels driven by railcars sitting in finished goods and higher work in process due to other supply chain challenges.
And now, let’s turn to Slide 10 and talk about the final three months of 2023. We continue to expect industry deliveries of approximately 45,000 railcars, which implies fourth quarter deliveries relatively consistent with the third quarter. We expect net fleet investment of $250 to $350 million in 2023 and expect to end the three-year planning period within our target range of $500 to $600 million. Year-to-date, investment is $238 million, and in the fourth quarter, we expect a more traditional mix of internal and external deliveries.
We expect manufacturing and general capex of $40 to $50 million. We have invested $29 million year-to-date, so we expect a similar run rate for the fourth quarter to what we have realized this year.
And, as Jean mentioned at the top of the call, we are lowering our 2023 EPS guidance to a range of $1.20 to $1.35 to account for the lost deliveries in the third quarter, as well as related supply chain and efficiency challenges resulting from the border closure and congestion. This target represents significant growth in the fourth quarter and is dependent on continuing strength in our leasing results, a large lease portfolio sale, and improved revenue and margins in the Rail Products segment. We are working hard to get as many deliveries across the border as quickly and efficiently as possible, but any further congestion or closures would negatively impact our results in the fourth quarter.
And, finally, in the third quarter of 2022, we set a revised three-year cash flow from operations target of $1.2 to $1.4 billion for the three-year period of 2021 through 2023 to account for changes in our operating environment. While we continue to see improvement, we are revising this cash flow target to a range of $1.0 billion to $1.2 billion. This reflects continued elevated working capital due to border issues, supply chain challenges, and lower efficiency and margins than expected in the first half of 2023. It is worth noting that railcar sales are not reflected in cash from operations but are a significant source of cash for Trinity.
I am proud of the hard work of our team in navigating through the border challenge. I am confident that, barring any further disruption, we can end the year with strong financial results, solid operations, and the ability to take advantage of the significant operating leverage of our business. We look forward to sharing those results with you in 2024.
And now, operator, we are ready for our first question.
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(after Q&A)
E. Jean Savage
Chief Executive Officer and President
Thank you for joining us this morning. We are proud of our third quarter results and the improvement we are seeing in our business. We expect to close the year with solid momentum and strong financials. We look forward to sharing our progress with you then.



6
DELIVERING GOODS for THE GOOD of ALL TRINITY INDUSTRIES, INC. Investor Contact: TrinityInvestorRelations@trin.net Website: www.trin.net Q3 2023 – Earnings Conference Call Supplemental Materials November 2, 2023 – based on financial results as of September 30, 2023 Exhibit 99.3

 
DELIVERING GOODS for THE GOOD of ALL /// 2 Some statements in this presentation, 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. 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. Forward Looking Statements

 
DELIVERING GOODS for THE GOOD of ALL /// Key Messages from Q3-23 Conference Call 3 Revenue up 65% year over year, reflecting significantly stronger performance Border closures and congestion resulted in 4,325 deliveries in the quarter, 14% below forecast * See appendix for reconciliation of non-GAAP measures Adjusted EPS from continuing operations of $0.26*, up $0.03 sequentially Continued strength in lease rates; FLRD +26.6%, utilization 98.1%

 
DELIVERING GOODS for THE GOOD of ALL /// Rail Market Update and Commercial Overview 4 Rail Traffic is Improving (1) Overall Fleet Storage Rates are Low (2) FLRD and Utilization Remain Favorable Received Large Multi-Year Order in Q3 2022 Fl ee t U ti liz at io n FLR D Fleet Utilization FLRD (3) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 90% 95% 100% —% 10% 20% 30% 40% 50% Orders Deliveries Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 0 5,000 10,000 15,000 20,000 See appendix for footnotes 2020 2021 2022 2023 Five-Year Average 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 500,000 625,000 750,000 Storage Rate Five-Year Average Jan-20 Oct-20 Jul-21 Apr-22 Jan-23 Oct-23 15% 20% 25% 30% 35%

 
DELIVERING GOODS for THE GOOD of ALL /// Q3-23 Financial Results Summary – Year over Year 5 Q3-23 Revenue $821M Q3-23 Cash Flow, Continuing Ops $76M Q3-23 EPS, Adjusted* $0.26 Q3-23 Adjusted Free Cash Flow* $(31)M * See appendix for reconciliation of non-GAAP measures -24% +65% $+67M $+11M

 
DELIVERING GOODS for THE GOOD of ALL /// Trinity Business Segment Performance Trends 6 Rail Products Segment Revenue Drivers ◦ Quarterly revenue up year over year due to higher volume of external deliveries Rail Products Margin Performance Drivers ◦ Operating margin of 5.7% in the quarter reflects sequential improvement in operational and labor efficiencies ▪ Segment margin includes gains from insurance recoveries in Q3 2022, Q1 2023, and Q3 2023 Leasing Operations Revenue and Operating Profit Margin (1) Rail Products Segment Revenue and Operating Profit Margin See appendix for footnotes (i n m ill io n s) Leasing Operations Revenue OP Margin Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 $— $125 $250 —% 20% 40% 60% (i n m ill io n s) Rail Products Revenue Maintenance Services Revenue Other Revenue OP Margin Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 $— $250 $500 $750 —% 2% 4% 6% Leasing Segment Revenue Drivers ◦ Fleet utilization of 98.1%, renewal success rate of 86% ◦ FLRD remains strong at +26.6% ◦ Revenue higher year over year due to improved lease rates and higher utilization, as well as acquisition- related revenues in Q3 2023 Leasing Margin Performance Drivers ◦ Margin slightly up year over year due to improved lease rates, partially offset by increased maintenance expense and depreciation expense and margin profile of acquisitions

 
DELIVERING GOODS for THE GOOD of ALL /// Executing on Strategic Initiatives to Improve Pre-Tax ROE 7 LTV of 64.9% Balance Sheet Optimization Early in integration of RSI Logistics’ customer-centric logistics services New Products & Services Initiatives Continued focus on lower breakeven points Enhance value of outsourced fabrication activities Manufacturing Cost Improvement Received an AA MSCI ESG ratings assessment, demonstrating the steady progress made over the last 4 years Sustainable Growth YTD net investment in lease fleet of $238M Fleet utilization of 98.1% Lease Fleet Optimization *See appendix for reconciliation of non-GAAP measures Lower Cost of Capital | Reduce Cyclicality | Improve Rail Supply Chain LTM Q3-23* LT Goal 9.6% 9.6% Mid-Teen Pre-Tax ROE Goal

 
DELIVERING GOODS for THE GOOD of ALL /// Revenue Improved Sequentially and Year over Year Q3 2023 Financial Summary: Income Statement: • Total revenues of $821M reflect higher external railcar deliveries and improved lease rates • Earnings per share from continuing operations of $0.29, adjusted earnings per share of $0.26* • Modest lease portfolio sales of $60M in the quarter Year-to-date Cash Flow: • Cash flow from continuing operations of $216M • Adjusted free cash flow of $50M* after investments and dividends • Net lease fleet investment of $238M • Investment of $29M in manufacturing and general capex • Shareholder returns of $65M through dividends paid Strong Performance Trends and Key Highlights 8 Cash Flow From Operations Remains Strong * See appendix for reconciliation of non-GAAP measures (i n m ill io n s) Leasing Rail Products Adj EPS, Cont Ops (Diluted) * Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 $— $450 $900 $— $0.25 $0.50 (i n m ill io n s) Cash Flow from Cont Ops Adjusted Free Cash Flow * Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 $(50) $— $50 $100 $150

 
DELIVERING GOODS for THE GOOD of ALL /// 9 Unencumbered Railcars $269M • Pledge to warehouse • Additional assets can be sold or financed • LTV of 64.9% for the wholly-owned lease portfolio as of Q3-23 CAPITAL LEVERS Recourse Debt $794M @ ~6.2%(1) Non-recourse Debt $5.0B @ ~4.2%(1) • Favorable average cost of debt • Flexible term structures DEBT STRUCTURE Cash & Equivalents $114M Revolver Availability $561M Warehouse Availability $105M LIQUIDITY Solid Liquidity of $780M(1) Attractive Debt Structures Conservative Capitalization See appendix for footnotes Healthy Balance Sheet Strategically Positioned for Opportunistic Deployment and Value Creation

 
DELIVERING GOODS for THE GOOD of ALL /// Management Outlook for Business Performance 10 C ap it al A llo ca ti on FY 2023 Summary Detail Industry Deliveries Approximately 45K Does not include sustainable railcar conversions Net Fleet Investment $250M — $350M Supports 3 year net fleet investment target of $500M — $600M Manufacturing and General Capital Expenditures $40M — $50M Investments in safety, efficiency, and automation EPS from Continuing Operations $1.20 — $1.35 Reflects impact of border closures and congestion and excludes items outside of our normal business operations Any forward-looking statements made by the Company speak only as of the date on which they are made. Except as required by federal securities law, the Company is under no obligation to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.

 
DELIVERING GOODS for THE GOOD of ALL /// Key Messages from Q3-23 Conference Call 11* See appendix for reconciliation of non-GAAP measures Revenue up 65% year over year, reflecting significantly stronger performance Continued strength in lease rates; FLRD +26.6%, utilization 98.1% Adjusted EPS from continuing operations of $0.26*, up $0.03 sequentially Border closures and congestion resulted in 4,325 deliveries in the quarter, 14% below forecast

 
DELIVERING GOODS for THE GOOD of ALL /// Trinity Q3-23 Earnings Conference Call 12 Q&A

 
DELIVERING GOODS for THE GOOD of ALL /// Reconciliation: Adjusted Operating Results 13 Three Months Ended September 30, 2023 (in millions, except per share amounts) GAAP Gains on dispositions of property – other (1) Interest expense, net (2) Adjusted Operating profit $ 100.2 $ (3.7) $ — $ 96.5 Income from continuing operations before income taxes $ 32.3 $ (3.7) $ (0.4) $ 28.2 Provision (benefit) for income taxes $ 6.0 $ (0.8) $ (0.1) $ 5.1 Income from continuing operations $ 26.3 $ (2.9) $ (0.3) $ 23.1 Net income from continuing operations attributable to Trinity Industries, Inc. $ 24.5 $ (2.9) $ (0.3) $ 21.3 Diluted weighted average shares outstanding 83.5 83.5 Diluted income from continuing operations per common share attributable to Trinity Industries, Inc. $ 0.29 $ 0.26 (1) Represents insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. (2) Represents interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets. 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 certain gains on dispositions of other property; interest expense, net; and certain other 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 table above. Management believes that these measures are useful to both management and investors for analyzing the performance of our business without the impact of certain items that are not indicative of our normal business operations. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.

 
DELIVERING GOODS for THE GOOD of ALL /// Reconciliation: Adjusted Operating Results 14 (1) Represents the change in estimated fair value of additional contingent consideration associated with an acquisition. (2) Represents insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. (3) Represents interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets. 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 certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; interest expense, net; and certain other 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 table above. Management believes that these measures are useful to both management and investors for analyzing the performance of our business without the impact of certain items that are not indicative of our normal business operations. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. Nine Months Ended September 30, 2023 (in millions, except per share amounts) GAAP Selling, engineering, and administrative expenses (1) Gains on dispositions of property – other (2) Restructuring activities, net Interest expense, net (3) Adjusted Operating profit $ 268.3 $ 2.0 $ (4.9) $ (2.2) $ — $ 263.2 Income from continuing operations before income taxes $ 68.5 $ 2.0 $ (4.9) $ (2.2) $ (1.1) $ 62.3 Provision (benefit) for income taxes $ 1.9 $ 0.5 $ (1.2) $ (0.6) $ (0.3) $ 0.3 Income from continuing operations $ 66.6 $ 1.5 $ (3.7) $ (1.6) $ (0.8) $ 62.0 Net income from continuing operations attributable to Trinity Industries, Inc. $ 51.3 $ 1.5 $ (3.7) $ (1.6) $ (0.8) $ 46.7 Diluted weighted average shares outstanding 83.5 83.5 Diluted income from continuing operations per common share attributable to Trinity Industries, Inc. $ 0.62 $ 0.56

 
DELIVERING GOODS for THE GOOD of ALL /// Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 (in millions) Net cash provided by operating activities – continuing operations $ 8.7 $ 61.8 $ 102.5 $ 37.8 $ 75.5 Proceeds from lease portfolio sales 299.6 235.9 56.7 129.0 60.1 Capital expenditures – manufacturing and other (6.9) (12.3) (7.1) (13.7) (8.6) Dividends paid to common shareholders (19.0) (18.6) (21.1) (22.2) (21.4) Equity CapEx for leased railcars (from table below) (324.8) (128.6) (94.8) (86.3) (136.9) Adjusted Free Cash Flow After Investments and Dividends $ (42.4) $ 138.2 $ 36.2 $ 44.6 $ (31.3) Capital expenditures – leasing $ 277.0 $ 237.7 $ 191.5 $ 208.2 $ 83.6 Less: Payments to retire debt (518.2) (227.0) (149.6) (885.7) (243.7) Proceeds from issuance of debt 470.4 336.1 246.3 1,007.6 190.4 Net proceeds from (repayments of) debt (47.8) 109.1 96.7 121.9 (53.3) Equity CapEx for leased railcars $ 324.8 $ 128.6 $ 94.8 $ 86.3 $ 136.9 Reconciliation: Walking Adjusted FCF Beyond Lease Investment 15 Adjusted Free Cash Flow After Investments and Dividends (“Adjusted Free Cash Flow”) is a non-GAAP financial measure. Adjusted 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 leased railcars. Equity CapEx for leased railcars is defined as leasing capital expenditures, adjusted to exclude net proceeds from (repayments of) recourse and non-recourse debt. We believe Adjusted 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. Adjusted Free Cash Flow is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the table above. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.

 
DELIVERING GOODS for THE GOOD of ALL /// Reconciliation: Total Company Pre-Tax ROE 16 (1) Represents the change in estimated fair value of additional contingent consideration associated with an acquisition. (2) Represents insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. (3) Excludes $7.1 million of loss on extinguishment of debt associated with the noncontrolling interest recorded in the second quarter of 2021. (4) Represents interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets. (5) Return on Equity is calculated as income from continuing operations divided by average total stockholders' equity. (6) Pre-Tax Return on Equity is calculated as adjusted profit before tax divided by average adjusted stockholders' equity, each as defined below and reconciled above. Pre-Tax Return on Equity (“Pre-Tax ROE”) is a non-GAAP measure that is derived from amounts included in our GAAP financial statements. We define Pre-Tax ROE as a ratio for which (i) the numerator is calculated as income or loss from continuing operations, adjusted to exclude the effects of the provision or benefit for income taxes, net income or loss attributable to noncontrolling interest, and certain other adjustments, which include certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; the controlling interest portion of loss on extinguishment of debt; interest expense, net; and pension plan settlement; and (ii) the denominator is calculated as average stockholders’ equity (which excludes noncontrolling interest), adjusted to exclude accumulated other comprehensive income or loss. In the table above, the numerator and denominator of our Pre-Tax ROE calculation are reconciled to income from continuing operations and total stockholders’ equity, respectively, which are the GAAP financial measures used in the computation of ROE. Management believes that Pre-Tax ROE is a useful measure to both management and investors as it provides an indication of the economic return on the Company’s investments over time. Pre-Tax ROE is used in consideration of the Company’s expected tax position in the near-term. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. LTM September 30, 2023 December 31, 2022 December 31, 2021 ($ in millions) Numerator: Income from continuing operations $ 109.4 $ 98.9 $ 39.3 Provision for income taxes 12.1 27.6 15.9 Income from continuing operations before income taxes 121.5 126.5 55.2 Net (income) loss attributable to noncontrolling interest (20.2) (12.8) 0.2 Adjustments: Selling, engineering, and administrative expenses (1) 2.0 — — Gains on dispositions of property – other (2) (4.9) (7.5) (7.8) Restructuring activities, net (2.2) 1.0 (3.7) Loss on extinguishment of debt – controlling interest (3) — — 4.6 Interest expense, net (4) (1.5) (1.4) — Pension plan settlement — — (0.6) Adjusted Profit Before Tax $ 94.7 $ 105.8 $ 47.9 Denominator: Total stockholders' equity $ 1,253.4 $ 1,269.6 $ 1,296.8 Noncontrolling interest (252.6) (257.2) (267.0) Accumulated other comprehensive (income) loss (17.7) (19.7) 17.0 Adjusted Stockholders' Equity $ 983.1 $ 992.7 $ 1,046.8 Average total stockholders' equity $ 1,261.5 $ 1,283.2 $ 1,656.4 Return on Equity (5) 8.7 % 7.7 % 2.4 % Average Adjusted Stockholders' Equity $ 987.9 $ 1,019.8 $ 1,408.3 Pre-Tax Return on Equity (6) 9.6 % 10.4 % 3.4 %

 
DELIVERING GOODS for THE GOOD of ALL /// Footnotes and Reconciliations 17 Slide 4 - Rail Market Update and Commercial Overview (1) Association of American Railroads (AAR) Weekly Railcar Loadings (2) AAR Rail Time Indicators – October 1, 2023 (3) Future Lease Rate Differential (FLRD) calculates the implied change in lease rates for railcar leases expiring over the next four quarters. The FLRD assumes that these expiring leases will be renewed at the most recent quarterly transacted lease rates for each railcar type. We believe the FLRD is useful to both management and investors as it provides insight into the near-term trend in lease rates. The FLRD is calculated as follows: (New Lease Rates — Expiring Lease Rates) x Expiring Railcar Leases (Expiring Lease Rates x Expiring Railcar Leases) Slide 6 - Trinity Business Segment Performance Trends (1) Leasing Operations Profit Margin calculated using only revenues and operating profit from Leasing Operations including partially-owned subsidiaries and excluding lease portfolio sales. Leasing Operations is specific to revenue and operating profit reported under “Leasing and management” within the Railcar Leasing and Management Services Group. Slide 8 - Strong Performance Trends and Key Highlights Adjusted EPS includes the following adjustments reported by the Company (each per common diluted share): ◦ Reported Q3-22 GAAP EPS was $0.35. Adjusted EPS excludes $0.01 related to the insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. ◦ Reported Q4-22 GAAP EPS was $0.46; Adjusted EPS excludes $0.01 of interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets and $0.01 related to prior year carryback claims as permitted under recent tax legislation. ◦ Reported Q1-23 GAAP EPS was $0.09; Adjusted EPS excludes $0.01 related to the insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021 and $0.01 from interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets and restructuring activities. ◦ Reported Q2-23 GAAP EPS was $0.23; Adjusted EPS excludes $0.02 related to the change in estimated fair value of additional contingent consideration associated with an acquisition and $0.02 related to gains associated with restructuring activities. ◦ Reported Q3-23 GAAP EPS was $0.29; Adjusted EPS excludes $0.03 related to the insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. Slide 9 - Healthy Balance Sheet Strategically Positioned for Opportunistic Deployment and Value Creation (1) Balances and blended average interest rate as of September 30, 2023

 
v3.23.3
Document and Entity Information Document
Nov. 02, 2023
Cover [Abstract]  
Title of 12(b) Security Common Stock
Document Type 8-K
Entity Incorporation, State or Country Code DE
Entity File Number 1-6903
Entity Tax Identification Number 75-0225040
Entity Address, Address Line One 14221 N. Dallas Parkway, Suite 1100,
Entity Address, City or Town Dallas
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75254-2957
City Area Code 214
Local Phone Number 631-4420
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Registrant Name TRINITY INDUSTRIES INC
Entity Central Index Key 0000099780
Amendment Flag false
Trading Symbol TRN
Security Exchange Name NYSE
Document Period End Date Nov. 02, 2023
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