PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Trinity Industries reported **$1,364.1 million** in total revenues for the six months ended June 30, 2023, with net income of **$21.4 million** and total assets growing to **$9.02 billion**, alongside improved operating cash flow Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Financial Metric | 2023 (in millions) | 2022 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,364.1 | $889.5 | +53.4% | | **Total Operating Profit** | $168.1 | $127.8 | +31.5% | | **Income from Continuing Operations** | $40.3 | $26.4 | +52.7% | | **Net Income Attributable to Trinity** | $21.4 | $3.0 | +613.3% | | **Diluted EPS** | $0.26 | $0.04 | +550.0% | Consolidated Balance Sheet Highlights | Account | June 30, 2023 (in millions) | Dec 31, 2022 (in millions) | | :--- | :--- | :--- | | **Total Assets** | $9,022.0 | $8,724.3 | | Property, plant, and equipment, net | $7,029.2 | $6,886.8 | | Total Debt | $5,832.6 | $5,607.6 | | **Total Stockholders' Equity** | $1,249.0 | $1,269.6 | Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $134.9 | $(73.3) | | Net cash used in investing activities | $(292.1) | $(201.2) | | Net cash provided by financing activities | $159.5 | $278.6 | [Note 1. Summary of Significant Accounting Policies](index=10&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) The company recognizes revenue for its Leasing Group on a straight-line basis and for its Rail Products Group upon customer acceptance or over time, with **$3.6 billion** in unsatisfied performance obligations for new railcars as of June 30, 2023 - Revenue for the Leasing Group is recognized monthly on a straight-line basis for operating leases. Revenue for new railcars in the Rail Products Group is recognized when the customer accepts the railcar and title passes[19](index=19&type=chunk)[24](index=24&type=chunk) Unsatisfied Performance Obligations at June 30, 2023 | Category | Total Amount (in millions) | Percent expected to be delivered in 2023 | | :--- | :--- | :--- | | **Rail Products Group:** | | | | New railcars (External & Leasing) | $3,605.4 | 28.6% | | Sustainable railcar conversions | $179.9 | 63.1% | | **Railcar Leasing and Management Services Group** | $72.6 | 13.0% | [Note 2. Acquisitions and Discontinued Operations](index=15&type=section&id=Note%202.%20Acquisitions%20and%20Discontinued%20Operations) On March 8, 2023, the company acquired RSI Logistics for **$72.1 million**, resulting in **$26.3 million** of goodwill, following the December 2022 acquisition of Holden America for **$87.1 million**, while discontinued operations from the Highway Products Business resulted in a **$5.4 million** net loss for the first six months of 2023 - On March 8, 2023, the company acquired RSI Logistics, a provider of software and logistics solutions, for an aggregate purchase price of **$72.1 million**. The acquisition was recorded as a business combination within the Leasing Group[43](index=43&type=chunk) - The company acquired Holden America in December 2022 for a total consideration of **$87.1 million**. The transaction was recorded within the Rail Products Group[45](index=45&type=chunk) Loss from Discontinued Operations (THP) | Period | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | **Three Months Ended June 30** | $(2.3) | $(3.4) | | **Six Months Ended June 30** | $(5.4) | $(10.3) | [Note 3. Derivative Instruments and Fair Value Measurements](index=16&type=section&id=Note%203.%20Derivative%20Instruments%20and%20Fair%20Value%20Measurements) Trinity uses derivative instruments, primarily interest rate swaps and caps, to mitigate interest rate and foreign currency risks, holding derivative assets valued at **$42.1 million** and liabilities at **$17.7 million** as of June 30, 2023 - The company uses derivative instruments to mitigate interest rate risk on future debt and floating-rate debt, as well as to hedge foreign currency exchange rate risk[50](index=50&type=chunk) - In June 2023, a new interest rate swap was executed to fix the SOFR component on a portion of the **$272.0 million** TRL-2023 term loan[51](index=51&type=chunk) Fair Value of Derivative Instruments (June 30, 2023) | Type | Assets (in millions) | Liabilities (in millions) | | :--- | :--- | :--- | | Interest rate hedge | $21.7 | - | | Foreign currency hedge | $2.7 | - | | Derivatives not designated as hedging instruments | $17.7 | $17.7 | [Note 4. Segment Information](index=19&type=section&id=Note%204.%20Segment%20Information) The company operates in two segments: Railcar Leasing and Management Services Group and Rail Products Group, generating **$204.0 million** and **$49.0 million** in operating profit respectively for the six months ended June 30, 2023 Segment Operating Profit (Six Months Ended June 30) | Segment | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | Railcar Leasing and Management Services Group | $204.0 | $185.3 | | Rail Products Group | $49.0 | $14.5 | Segment Revenues (Six Months Ended June 30, 2023) | Segment | External Revenue (in millions) | Intersegment Revenue (in millions) | Total Revenue (in millions) | | :--- | :--- | :--- | :--- | | Railcar Leasing and Management Services Group | $426.3 | $0.4 | $426.7 | | Rail Products Group | $937.8 | $409.0 | $1,346.8 | [Note 8. Debt](index=26&type=section&id=Note%208.%20Debt) Total debt increased to **$5.83 billion** as of June 30, 2023, including **$793.9 million** in recourse debt and **$5.04 billion** in non-recourse debt, following the issuance of **$400.0 million** in senior notes and a new **$340.0 million** term loan - In June 2023, the company issued **$400.0 million** in 7.75% senior notes due 2028, with proceeds used to repay borrowings under the revolving credit facility[87](index=87&type=chunk) - In June 2023, a subsidiary entered into a new **$340.0 million** non-recourse term loan (TRL-2023) to finance railcars, maturing in June 2028[90](index=90&type=chunk) Total Debt Summary | Debt Category | June 30, 2023 (in millions) | Dec 31, 2022 (in millions) | | :--- | :--- | :--- | | Total Recourse Debt | $793.9 | $624.1 | | Total Non-Recourse Debt | $5,038.7 | $4,983.5 | | **Total Debt** | **$5,832.6** | **$5,607.6** | [Note 12. Common Stock and Stock-Based Compensation](index=30&type=section&id=Note%2012.%20Common%20Stock%20and%20Stock-Based%20Compensation) The company had a **$250.0 million** share repurchase program authorized in December 2022 with no shares repurchased in the first half of 2023, while stock-based compensation expense was **$12.7 million** for the same period - A **$250.0 million** share repurchase program was authorized in December 2022. No shares were repurchased during the six months ended June 30, 2023[105](index=105&type=chunk) Stock-Based Compensation Expense | Period | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | **Three Months Ended June 30** | $6.5 | $5.7 | | **Six Months Ended June 30** | $12.7 | $10.8 | [Note 14. Contingencies](index=32&type=section&id=Note%2014.%20Contingencies) The company faces legal proceedings including indemnification for its former highway products business and new third-party claims related to the East Palestine train derailment, with total accruals for claims at **$25.7 million** as of June 30, 2023 - The company is indemnifying the buyer of its former highway products business (THP) for certain liabilities, including ongoing state qui tam actions related to the ET Plus guardrail system[114](index=114&type=chunk)[115](index=115&type=chunk) - A subsidiary, TILC, was named as a third-party defendant by Norfolk Southern in lawsuits related to the February 2023 East Palestine, Ohio train derailment. Trinity believes the claims are without merit[123](index=123&type=chunk)[124](index=124&type=chunk) - Total accruals for various claims and lawsuits, including environmental and workplace matters, were **$25.7 million** as of June 30, 2023. The range of reasonably possible losses for these matters is estimated to be between **$25.4 million** and **$36.9 million**[126](index=126&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **53.4%** year-over-year revenue growth for the first six months of 2023 to higher railcar delivery volumes and improved lease rates, with operating profit increasing **31.5%** to **$168.1 million** and the new railcar backlog growing to **$3.6 billion** [Executive Summary](index=38&type=section&id=Executive%20Summary) Key operational highlights for the first six months of 2023 include a **53.4%** increase in revenue to **$1.4 billion**, a rise in operating profit to **$168.1 million**, improved fleet utilization to **97.9%**, and a new railcar backlog of **$3.6 billion** - The new railcar backlog value was **$3.6 billion** at June 30, 2023, a significant increase from **$2.2 billion** at June 30, 2022[147](index=147&type=chunk) - The Leasing Group's fleet utilization was **97.9%** as of June 30, 2023, up from **97.2%** a year earlier[147](index=147&type=chunk) - Management notes that the business is impacted by cyclical industry trends, foreign currency fluctuations (specifically the strengthening Mexican peso), and elevated steel prices[140](index=140&type=chunk)[142](index=142&type=chunk) [Consolidated Results of Operations](index=41&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated revenue for Q2 2023 increased **73.3%** year-over-year to **$722.4 million**, with six-month revenue rising **53.4%** to **$1.36 billion**, and operating profit increasing **31.5%** to **$168.1 million**, despite higher interest expense Consolidated Results of Operations (Six Months Ended June 30) | Line Item | 2023 (in millions) | 2022 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Revenues | $1,364.1 | $889.5 | +53.4% | | Operating Profit | $168.1 | $127.8 | +31.5% | | Interest Expense, net | $129.0 | $93.2 | +38.4% | | Income from Continuing Operations | $40.3 | $26.4 | +52.7% | - The increase in revenues for the first six months of 2023 was primarily due to a higher volume of external deliveries in the Rail Products Group and improved lease rates, higher utilization, and the acquisition of RSI in the Leasing Group[157](index=157&type=chunk) [Segment Discussion](index=45&type=section&id=Segment%20Discussion) The Railcar Leasing and Management Services Group saw a **10.1%** increase in operating profit, while the Rail Products Group's operating profit surged to **$49.0 million** on **63.9%** revenue growth, with the new railcar backlog growing **64.3%** to **$3.6 billion** Leasing Group Performance (Six Months Ended June 30) | Metric | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | Total Revenues | $426.7 | $378.4 | | Total Operating Profit | $204.0 | $185.3 | | Fleet Utilization | 97.9% | 97.2% | Rail Products Group Performance (Six Months Ended June 30) | Metric | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | Total Revenues | $1,346.8 | $821.7 | | Operating Profit | $49.0 | $14.5 | | Railcar Deliveries (units) | 9,030 | 4,980 | | Backlog Value | $3.6B | $2.2B | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Trinity had total committed liquidity of **$698.5 million** as of June 30, 2023, including **$91.7 million** in cash, and generated **$140.3 million** in cash from continuing operations for the first half of 2023 - Total committed liquidity was **$698.5 million** as of June 30, 2023, consisting of cash, available revolving credit, and available warehouse loan facility capacity[184](index=184&type=chunk) - Net cash from continuing operations was **$140.3 million** for the six months ended June 30, 2023, compared to a use of **$61.3 million** in the same period of 2022[190](index=190&type=chunk) - The company is in compliance with all financial covenants, with a Maximum Leverage ratio of **2.66** (covenant: <4.25) and Minimum Interest Coverage of **7.79** (covenant: >2.25)[193](index=193&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risks, including interest rates and foreign currency exchange rates, since the end of the 2022 fiscal year - There has been no material change in the company's market risks since December 31, 2022[211](index=211&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures are effective, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[212](index=212&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[213](index=213&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the detailed discussion of legal matters from Note 14 of the Consolidated Financial Statements, covering ongoing litigation and new third-party claims - The information regarding legal proceedings is incorporated by reference from Note 14 of the Consolidated Financial Statements[216](index=216&type=chunk) [Risk Factors](index=56&type=page&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes from the risk factors previously disclosed in its 2022 Annual Report on Form 10-K - There have been no material changes from the risk factors previously disclosed in the 2022 Annual Report on Form 10-K[217](index=217&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2023, the company did not repurchase shares under its **$250.0 million** program but acquired **307,725** shares to satisfy tax withholding obligations related to vested employee stock awards - No shares were repurchased under the company's **$250.0 million** share repurchase program during the three months ended June 30, 2023[218](index=218&type=chunk) - The company acquired **307,385** shares to satisfy tax withholding obligations in connection with the vesting of restricted stock for employees[218](index=218&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) EVP and CFO Eric R. Marchetto established a Rule 10b5-1(c) stock trading plan on June 29, 2023, to sell up to **42,225** shares of common stock for asset diversification - EVP and CFO Eric R. Marchetto entered into a Rule 10b5-1 stock trading plan on June 29, 2023, to sell up to **42,225** shares for asset diversification[221](index=221&type=chunk)

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $722 million for Q2 2023, reflecting a 73% year-over-year improvement [5] - Adjusted EPS from continuing operations was $0.23, up $0.16 sequentially and $0.09 year-over-year [5] - Quarterly cash flow from continuing operations was $38 million, up $128 million year-over-year, and adjusted free cash flow was $45 million, up $50 million year-over-year [8] Business Line Data and Key Metrics Changes - In the Leasing segment, fleet utilization was 97.9% and the future lease rate differential (FLRD) was 29.5%, indicating strong lease rate growth [7][9] - The average lease rate for the quarter was the highest since 2018, up 9% year-over-year [10] - Rail Products revenue increased due to higher railcar deliveries, but the operating margin was 3.3%, slightly down due to foreign exchange impacts and efficiency issues [11] Market Data and Key Metrics Changes - Railcar load volumes improved by 2% year-over-year, while total rail traffic declined by 4% [6] - The North American fleet ended June with the lowest active rate since early 2022, but fleet storage levels remained below the 5-year average [6][7] - The company has a backlog of $3.6 billion, providing visibility into future deliveries well into 2024 [8] Company Strategy and Development Direction - The company is focused on integrating recent acquisitions and enhancing operational efficiency to drive growth [14] - The strategy includes positioning the industry for modal share growth with railroad partners through integrated service offerings [14] - The company anticipates continued revenue growth in the Leasing business as lease rates are repriced upward [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's momentum and growth potential despite economic headwinds, particularly from the strengthening Mexican peso [5][17] - The company expects significantly stronger performance in the second half of the year, with improved margins and continued top-line growth [19] - Management acknowledged challenges in the Rail Products segment but remains optimistic about achieving high single-digit margins by year-end [13][18] Other Important Information - The company has seen a $225 million increase in outstanding debt due to new senior notes and a term loan, impacting interest expenses [15] - The company is evaluating options to reduce exposure to the Mexican peso, which has negatively affected margins [12][18] Q&A Session Summary Question: Labor inefficiencies in Rail Products Group - Management indicated that labor inefficiencies were partly due to complex line changeovers and expected improvements in the second half of the year [21][22] Question: Lease rate environment and potential weaknesses - Management noted that the cycle is supply-driven, with some weakness in the chemical sector, but overall demand remains strong [24] Question: Industry order flow and delivery outlook - Management confirmed that orders are consistent and spread across various car types, with no large orders impacting the overall demand [28] Question: Manufacturing margins and gains on sale - Management highlighted improvements in manufacturing efficiency and expected fewer gains in the second half of the year compared to the first half [39] Question: Impact of foreign exchange on margins - Management acknowledged that the strengthening peso has had a significant impact on margins, which was not as pronounced in previous years [42] Question: Long-term vision for the business - Management plans to share an updated long-term strategy during an Investor Day event in the fourth quarter [45]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents Trinity Industries, Inc.'s unaudited consolidated financial statements, management's discussion, market risk, and internal controls for the first quarter [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Trinity Industries, Inc.'s unaudited consolidated financial statements for Q1 2023 and 2022, including key statements and detailed accounting notes [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, operating costs, and net income for the three months ended March 31, 2023 and 2022 Consolidated Statements of Operations (in millions, except per share) | Metric (in millions, except per share) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------- | :---------------------------------- | :---------------------------------- | | Revenues | $641.7 | $472.7 | | Operating costs | $538.5 | $398.5 | | Selling, engineering, and admin expenses | $49.9 | $44.7 | | Gains on dispositions of property | $15.3 | $25.3 | | Restructuring activities, net | $(0.4) | $— | | Total operating profit | $69.0 | $54.8 | | Interest expense, net | $62.1 | $43.5 | | Other, net | $1.6 | $(1.6) | | Income from continuing operations before income taxes | $5.3 | $12.9 | | Provision (benefit) for income taxes | $(11.5) | $3.0 | | Income from continuing operations | $16.8 | $9.9 | | Loss from discontinued operations, net | $(3.1) | $(6.9) | | Loss on sale of discontinued operations, net | $— | $(1.1) | | Net income | $13.7 | $1.9 | | Net income attributable to noncontrolling interest | $9.3 | $2.6 | | Net income (loss) attributable to Trinity Industries, Inc. | $4.4 | $(0.7) | | Basic EPS (continuing operations) | $0.09 | $0.09 | | Basic EPS (discontinued operations) | $(0.04) | $(0.10) | | Basic net income (loss) per share | $0.05 | $(0.01) | | Diluted EPS (continuing operations) | $0.09 | $0.09 | | Diluted EPS (discontinued operations) | $(0.04) | $(0.10) | | Diluted net income (loss) per share | $0.05 | $(0.01) | | Weighted average shares outstanding (Basic) | 80.8 | 82.9 | | Weighted average shares outstanding (Diluted) | 83.2 | 85.5 | [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents net income and other comprehensive income components, leading to total comprehensive income for the periods Consolidated Statements of Comprehensive Income (Loss) (in millions) | Metric (in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------- | :---------------------------------- | :---------------------------------- | | Net income | $13.7 | $1.9 | | Other comprehensive income (loss): | | | | Derivative financial instruments: | | | | Unrealized gains arising during the period, net of tax | $0.5 | $14.7 | | Reclassification adjustments for (gains) losses included in net income, net of tax | $(14.9) | $2.5 | | Defined benefit plans: | | | | Amortization of net actuarial losses, net of tax | $— | $0.1 | | Total other comprehensive income (loss) | $(14.4) | $17.3 | | Comprehensive income (loss) | $(0.7) | $19.2 | | Less: comprehensive income attributable to noncontrolling interest | $1.9 | $2.8 | | Comprehensive income (loss) attributable to Trinity Industries, Inc. | $(2.6) | $16.4 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific reporting dates Consolidated Balance Sheets (in millions) | Metric (in millions) | March 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $81.9 | $79.6 | | Receivables, net | $333.2 | $323.5 | | Income tax receivable | $10.1 | $7.8 | | Inventories | $632.7 | $629.4 | | Restricted cash | $181.1 | $214.7 | | Property, plant, and equipment, net | $6,976.5 | $6,886.8 | | Goodwill | $222.3 | $195.9 | | Other assets | $401.4 | $386.6 | | **Total assets** | **$8,839.2** | **$8,724.3** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $314.5 | $287.5 | | Accrued liabilities | $273.7 | $261.0 | | Debt | $5,707.6 | $5,607.6 | | Deferred income taxes | $1,133.2 | $1,134.7 | | Other liabilities | $159.8 | $163.9 | | **Total liabilities** | **$7,588.8** | **$7,454.7** | | Common stock | $0.8 | $0.8 | | Capital in excess of par value | $6.6 | $— | | Retained earnings | $975.6 | $992.6 | | Accumulated other comprehensive income | $12.7 | $19.7 | | Treasury stock | $(1.5) | $(0.7) | | Noncontrolling interest | $256.2 | $257.2 | | **Total stockholders' equity** | **$1,250.4** | **$1,269.6** | | **Total liabilities and stockholders' equity** | **$8,839.2** | **$8,724.3** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement details the cash inflows and outflows from operating, investing, and financing activities for the periods Consolidated Statements of Cash Flows (in millions) | Metric (in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------- | :---------------------------------- | :---------------------------------- | | **Operating activities:** | | | | Net income | $13.7 | $1.9 | | Net cash provided by operating activities – continuing operations | $102.5 | $28.5 | | Net cash used in operating activities – discontinued operations | $(3.1) | $(8.0) | | **Net cash provided by operating activities** | **$99.4** | **$20.5** | | **Investing activities:** | | | | Proceeds from dispositions of property and other assets | $4.9 | $15.6 | | Proceeds from lease portfolio sales | $56.7 | $71.1 | | Capital expenditures – leasing | $(191.5) | $(84.6) | | Capital expenditures – manufacturing and other | $(7.1) | $(2.3) | | Acquisitions, net of cash acquired | $(66.2) | $— | | **Net cash used in investing activities** | **$(203.1)** | **$(0.2)** | | **Financing activities:** | | | | Payments to retire debt | $(149.6) | $(73.0) | | Proceeds from issuance of debt | $246.3 | $127.2 | | Dividends paid to common shareholders | $(21.1) | $(19.1) | | Distributions to noncontrolling interest | $(2.9) | $(6.2) | | **Net cash provided by financing activities** | **$72.4** | **$28.7** | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(31.3) | $49.0 | | Cash, cash equivalents, and restricted cash at beginning of period | $294.3 | $302.4 | | Cash, cash equivalents, and restricted cash at end of period | $263.0 | $351.4 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in equity components, including net income, other comprehensive income, and dividends, over the reporting periods - Total stockholders' equity decreased from **$1,269.6 million** at December 31, 2022, to **$1,250.4 million** at March 31, 2023. This change was influenced by net income attributable to Trinity Industries, Inc. of **$4.4 million**, an other comprehensive loss of **$7.0 million**, cash dividends declared of **$21.4 million**, and stock-based compensation expense of **$6.2 million**[13](index=13&type=chunk) - Dividends declared on common stock were **$0.26 per common share** for the three months ended March 31, 2023, an increase from **$0.23 per common share** for the same period in 2022[13](index=13&type=chunk) [Note 1. Summary of Significant Accounting Policies](index=8&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note details the company's key accounting principles, including recent ASU adoptions, revenue recognition, and goodwill allocation - The company adopted ASU 2022-04 (Disclosure of Supplier Finance Program Obligations) effective January 1, 2023, which did not have a significant impact on its Consolidated Financial Statements. Amounts due to participating suppliers in the SCF program totaled **$17.3 million** as of March 31, 2023, down from **$22.8 million** at December 31, 2022[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) Unsatisfied Performance Obligations (as of March 31, 2023) | Group | Total Amount (in millions) | Percent expected to be delivered in 2023 | | :---------------------------------------- | :------------------------- | :--------------------------------------- | | Rail Products Group: New railcars (External customers) | $3,257.1 | | | Rail Products Group: New railcars (Leasing Group) | $448.8 | | | **Rail Products Group Total** | **$3,705.9** | **42.3%** | | Sustainable railcar conversions | $173.7 | 76.9% | | Railcar Leasing and Management Services Group | $73.0 | 15.9% | - Goodwill by segment as of March 31, 2023, was **$33.5 million** for the Railcar Leasing and Management Services Group (up from **$7.1 million** at Dec 31, 2022) and **$188.8 million** for the Rail Products Group (unchanged)[36](index=36&type=chunk) [Note 2. Acquisitions and Discontinued Operations](index=13&type=section&id=Note%202.%20Acquisitions%20and%20Discontinued%20Operations) This note discusses the acquisition of RSI Logistics and the financial impact of discontinued operations - On March 8, 2023, Trinity acquired RSI Logistics for **$72.1 million**, recording **$37.4 million** in identifiable intangible assets and **$26.3 million** in goodwill, with the purchase price allocation still preliminary[41](index=41&type=chunk)[42](index=42&type=chunk) - The company incurred a loss from discontinued operations (related to the previously sold Highway Products Business) of **$3.1 million** for the three months ended March 31, 2023, an improvement from a **$6.9 million** loss in the prior year period[44](index=44&type=chunk)[45](index=45&type=chunk) [Note 3. Derivative Instruments and Fair Value Measurements](index=14&type=section&id=Note%203.%20Derivative%20Instruments%20and%20Fair%20Value%20Measurements) This note details the company's use of derivative instruments for risk mitigation and fair value measurements of financial assets - Trinity uses derivative instruments to mitigate interest rate risk and foreign currency exchange rate risk. For the three months ended March 31, 2023, the open interest rate swap on 2017 promissory notes had a positive effect on interest expense of **$(2.5) million**, compared to **$2.8 million** in the prior year[46](index=46&type=chunk)[47](index=47&type=chunk) - Foreign currency hedges resulted in a **$(1.7) million** effect on cost of revenues for the three months ended March 31, 2023, compared to **$0.2 million** in the prior year[48](index=48&type=chunk) Fair Value Measurements (Level 1 Assets) (in millions) | Asset (in millions) | March 31, 2023 | December 31, 2022 | | :------------------ | :------------- | :---------------- | | Cash equivalents | $41.0 | $29.8 | | Restricted cash | $181.1 | $214.7 | | **Total assets** | **$222.1** | **$244.5** | [Note 4. Segment Information](index=16&type=section&id=Note%204.%20Segment%20Information) This note provides financial data for Trinity's two reportable segments: Railcar Leasing and Management Services Group and Rail Products Group - Trinity operates in two reportable segments: Railcar Leasing and Management Services Group and Rail Products Group. The Chief Operating Decision Maker (CODM) reviews segment operating results to assess performance and allocate resources, excluding restructuring activities[54](index=54&type=chunk)[55](index=55&type=chunk) Total Revenues by Segment (in millions) | Segment | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | | Railcar Leasing and Management Services Group | $203.5 | $183.1 | | Rail Products Group | $637.8 | $391.1 | | Eliminations – Lease Subsidiary | $(199.4) | $(101.3) | | Eliminations – Other | $(0.2) | $(0.2) | | **Consolidated Total** | **$641.7** | **$472.7** | Operating Profit by Segment (in millions) | Segment | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | | Railcar Leasing and Management Services Group | $85.5 | $79.8 | | Rail Products Group | $25.3 | $0.8 | | Corporate and other | $(26.0) | $(15.7) | | Restructuring activities, net | $0.4 | $— | | Eliminations – Lease Subsidiary | $(16.8) | $(8.8) | | Eliminations – Other | $0.6 | $(1.3) | | **Consolidated operating profit** | **$69.0** | **$54.8** | [Note 5. Partially-Owned Leasing Subsidiaries](index=18&type=section&id=Note%205.%20Partially-Owned%20Leasing%20Subsidiaries) This note describes Trinity's controlling interests in partially-owned leasing subsidiaries and its equity interest in an unconsolidated joint venture - Trinity has a controlling interest in partially-owned leasing subsidiaries TRIP Holdings and RIV 2013, with a weighted average ownership interest of **38%** (**62%** owned by third-party funds). The carrying value of this investment was **$135.3 million** at March 31, 2023[59](index=59&type=chunk)[60](index=60&type=chunk) - Trinity does not guarantee performance under debt agreements, railcar residual values, or minimum yields for its partially-owned subsidiaries[62](index=62&type=chunk) - Trinity holds a **12.9%** equity interest in Signal Rail Holdings LLC, an unconsolidated joint venture with Wafra Funds, which is accounted for under the equity method. The carrying value of this investment was **$21.2 million** at March 31, 2023[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Note 6. Railcar Leasing and Management Services Group](index=19&type=section&id=Note%206.%20Railcar%20Leasing%20and%20Management%20Services%20Group) This note provides detailed financial and operational performance metrics for the Railcar Leasing and Management Services Group Railcar Leasing and Management Services Group Financial Information (in millions) | Metric | March 31, 2023 | December 31, 2022 | | :---------------------------------------- | :------------- | :---------------- | | Total assets (Adjusted Total Leasing Group) | $7,153.9 | $7,016.6 | | Total liabilities (Adjusted Total Leasing Group) | $6,191.1 | $6,156.4 | | Total Equity (Adjusted Total Leasing Group) | $706.6 | $603.0 | Leasing Group Operating Results (in millions, except percentages) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Percent Change | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | :------------- | | Leasing and management revenues | $203.5 | $183.1 | 11.1% | | Leasing and management operating profit | $72.0 | $68.0 | 5.9% | | Lease portfolio sales operating profit | $13.5 | $11.8 | * | | Total operating profit | $85.5 | $79.8 | 7.1% | | Total operating profit margin | 42.0% | 43.6% | | | Depreciation | $62.4 | $57.2 | 9.1% | | Maintenance and compliance | $35.8 | $29.2 | 22.6% | | Selling, engineering, and administrative expenses | $15.7 | $12.8 | 22.7% | | Interest | $54.8 | $38.7 | 41.6% | - The Leasing Group's lease fleet utilization increased to **98.2%** as of March 31, 2023, from **96.5%** in the prior year, with the average age of company-owned railcars at **12.5 years** and an average remaining lease term of **3.0 years**[131](index=131&type=chunk)[152](index=152&type=chunk) [Note 7. Property, Plant, and Equipment](index=22&type=section&id=Note%207.%20Property,%20Plant,%20and%20Equipment) This note presents the net carrying values of property, plant, and equipment across manufacturing, corporate, and leasing segments Property, Plant, and Equipment, Net (in millions) | Category | March 31, 2023 | December 31, 2022 | | :---------------------------------------- | :------------- | :---------------- | | Manufacturing/Corporate, net | $341.9 | $340.7 | | Leasing: Wholly-owned subsidiaries, net | $5,888.1 | $5,788.1 | | Leasing: Partially-owned subsidiaries, net | $1,509.9 | $1,521.3 | | Deferred profit on railcars sold to Leasing Group, net | $(763.4) | $(763.3) | | **Total Property, Plant, and Equipment, net** | **$6,976.5** | **$6,886.8** | [Note 8. Debt](index=23&type=section&id=Note%208.%20Debt) This note details the company's debt structure, including corporate recourse and leasing non-recourse debt, and recent credit facility amendments Carrying Amounts of Debt (in millions) | Category | March 31, 2023 | December 31, 2022 | | :---------------------------------------- | :------------- | :---------------- | | Corporate – Recourse | $704.3 | $624.1 | | Leasing – Non-recourse: Wholly-owned subsidiaries | $3,826.9 | $3,800.7 | | Leasing – Non-recourse: Partially-owned subsidiaries | $1,176.4 | $1,182.8 | | **Total debt** | **$5,707.6** | **$5,607.6** | - The company amended its revolving credit facility in March 2023, increasing the commitment from **$450.0 million** to **$600.0 million** and modifying leverage ratios and dividend limitations. As of March 31, 2023, **$278.2 million** was available for borrowing[76](index=76&type=chunk)[77](index=77&type=chunk) - The TILC warehouse loan facility had **$91.4 million** available as of March 31, 2023. The TRL-2017 loan agreement and interest rate swap agreements transitioned from LIBOR to SOFR in February 2023[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 9. Income Taxes](index=24&type=section&id=Note%209.%20Income%20Taxes) This note explains the effective tax rate from continuing operations and the factors influencing tax provisions or benefits - The effective tax rate from continuing operations for the three months ended March 31, 2023, was a benefit of **217.0%** (compared to an expense of **23.3%** in 2022), primarily due to the release of residual taxes from AOCI (**$11.9 million** benefit), re-measurement of deferred tax liabilities due to the RSI acquisition (**$3.2 million** increase), and a **$4.0 million** tax benefit from valuation allowance adjustments[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Note 10. Employee Retirement Plans](index=25&type=section&id=Note%2010.%20Employee%20Retirement%20Plans) This note outlines the defined contribution expense and details related to the terminated pension plan - Defined contribution expense increased to **$2.4 million** for the three months ended March 31, 2023, from **$2.1 million** in the prior year. The company reverted **$0.4 million** in surplus pension assets and incurred **$0.1 million** in excise tax following the termination of its Pension Plan in 2020[88](index=88&type=chunk)[89](index=89&type=chunk) [Note 11. Accumulated Other Comprehensive Income](index=25&type=section&id=Note%2011.%20Accumulated%20Other%20Comprehensive%20Income) This note details the changes in accumulated other comprehensive income, including derivative gains/losses and reclassification adjustments Changes in AOCI (in millions) | Metric | Unrealized gains/(losses) on derivative financial instruments | Net actuarial gains/(losses) of defined benefit plans | Accumulated other comprehensive income (loss) | | :---------------------------------------- | :------------------------------------------------------------ | :---------------------------------------------------- | :-------------------------------------------- | | Balances at December 31, 2022 | $20.9 | $(1.2) | $19.7 | | Other comprehensive income, net of tax, before reclassifications | $0.5 | $— | $0.5 | | Amounts reclassified from AOCI, net of tax benefit | $(14.9) | $— | $(14.9) | | Less: noncontrolling interest | $7.4 | $— | $7.4 | | Other comprehensive loss | $(7.0) | $— | $(7.0) | | Balances at March 31, 2023 | $13.9 | $(1.2) | $12.7 | - An income tax benefit of **$13.2 million** was recorded for TRIP Holdings due to the reclassification of residual tax effects from AOCI, with the controlling interest portion being **$4.4 million**[90](index=90&type=chunk) [Note 12. Common Stock and Stock-Based Compensation](index=26&type=section&id=Note%2012.%20Common%20Stock%20and%20Stock-Based%20Compensation) This note discusses share repurchase programs, stock-based compensation expense, and details of awards granted - The Board authorized a new **$250.0 million** share repurchase program in December 2022, but no shares were repurchased during the three months ended March 31, 2023 or 2022[92](index=92&type=chunk) - Stock-based compensation expense increased to **$6.2 million** for the three months ended March 31, 2023, from **$5.1 million** in the prior year[93](index=93&type=chunk) Stock-Based Compensation Awards Granted (Three Months Ended March 31, 2023) | Award Type | Number of Shares Granted | Weighted Average Grant-Date Fair Value per Award | | :------------------ | :----------------------- | :----------------------------------------------- | | Restricted stock units | 30,799 | $26.42 | | Performance units | 114,875 | $41.96 | [Note 13. Earnings Per Common Share](index=27&type=section&id=Note%2013.%20Earnings%20Per%20Common%20Share) This note provides the calculation of basic and diluted earnings per common share for the reporting periods Basic and Diluted EPS (in millions, except per share amounts) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | | Net income (loss) attributable to Trinity Industries, Inc. | $4.4 | $(0.7) | | Basic weighted average shares outstanding | 80.8 | 82.9 | | Diluted weighted average shares outstanding | 83.2 | 85.5 | | Basic net income (loss) attributable to Trinity Industries, Inc. | $0.05 | $(0.01) | | Diluted net income (loss) attributable to Trinity Industries, Inc. | $0.05 | $(0.01) | [Note 14. Contingencies](index=28&type=section&id=Note%2014.%20Contingencies) This note details ongoing legal proceedings, including qui tam actions and class action settlements, and their potential financial impact - The company is vigorously defending against state qui tam actions in Virginia, Tennessee, and New Jersey related to the ET Plus system, believing the claims are without merit and currently not accruing losses as they are not deemed probable[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - The Missouri class action settlement liability was **$7.8 million** as of March 31, 2023, after funding **$17.5 million**. This is part of a pre-tax charge of **$23.9 million** recorded in 2021[106](index=106&type=chunk) - Total accruals for claims and lawsuits, including environmental and workplace matters, were **$10.5 million** at March 31, 2023, with a range of reasonably possible losses estimated between **$10.0 million** and **$20.9 million**[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Trinity's financial condition, operations, and liquidity for Q1 2023, covering consolidated results, segment performance, and capital resources [Forward-Looking Statements](index=32&type=section&id=Forward-Looking%20Statements) This section cautions that the report contains forward-looking statements subject to various market, industry, and geopolitical risks - The report contains forward-looking statements subject to various risks and uncertainties, including market conditions, cyclical industries, weather, pandemics, supply chain disruptions, labor shortages, and geopolitical events[118](index=118&type=chunk)[119](index=119&type=chunk) [Company Overview](index=34&type=section&id=Company%20Overview) Trinity Industries, Inc. is a leading North American railcar products and services provider, operating in two main segments - Trinity Industries, Inc. is a leading provider of railcar products and services in North America, operating under the TrinityRail trade name, offering leasing, manufacturing, maintenance, and logistics services[122](index=122&type=chunk) - The company reports in two segments: Railcar Leasing and Management Services Group and Rail Products Group. Liabilities related to the previously sold Trinity Highway Products, LLC (THP) are reported in discontinued operations[122](index=122&type=chunk)[123](index=123&type=chunk) [Executive Summary](index=34&type=section&id=Executive%20Summary) This summary highlights improving lease rates and utilization, alongside challenges from cyclical industries, supply chain issues, and labor costs - Lease rates and lease fleet utilization continue to improve, but the company faces challenges from cyclical industries, commodity price changes, global supply chain disruptions, and elevated labor costs[124](index=124&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) Financial and Operational Highlights (Three Months Ended March 31) | Metric | 2023 | 2022 | Change | | :---------------------------------------- | :---------- | :---------- | :---------- | | Revenues | $641.7M | $472.7M | +35.8% | | Operating profit | $69.0M | $54.8M | +25.9% | | Lease fleet utilization | 98.2% | 96.5% | +1.7 pp | | Company-owned railcars | 108,865 | 107,090 | +1.7% | | Net investment in lease fleet | $134.8M | $13.5M | +898.5% | | New railcar backlog | $3.7B | $1.9B | +94.7% | | Rail Products Group orders received | 2,690 | 5,055 | -46.8% | | Rail Products Group deliveries | 4,045 | 2,470 | +63.8% | | Sustainable railcar conversion revenues | $53.9M | | | | Operating cash flows (continuing operations) | $102.5M | $28.5M | +259.6% | | Adjusted Free Cash Flow | $36.2M | $47.8M | -24.3% | [Returns of Capital to Shareholders](index=36&type=section&id=Returns%20of%20Capital%20to%20Shareholders) This section details dividends paid to common stockholders and the status of the share repurchase program - The company paid **$21.1 million** in dividends to common stockholders during the three months ended March 31, 2023. A new **$250.0 million** share repurchase program was authorized in December 2022, but no shares were repurchased in Q1 2023[132](index=132&type=chunk) [Litigation Updates](index=36&type=section&id=Litigation%20Updates) This section refers to Note 14 for detailed updates on litigation related to the sale of Trinity Highway Products - Updates on litigation related to the sale of Trinity Highway Products (THP) are provided in Note 14 of the Consolidated Financial Statements[133](index=133&type=chunk) [Consolidated Results of Operations](index=37&type=section&id=Consolidated%20Results%20of%20Operations) This section analyzes the company's consolidated revenues, operating profit, and net income, highlighting key drivers and changes Consolidated Results of Operations (in millions) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | | Revenues | $641.7 | $472.7 | | Cost of revenues | $538.5 | $398.5 | | Selling, engineering, and administrative expenses | $49.9 | $44.7 | | Gains on dispositions of property | $15.3 | $25.3 | | Restructuring activities, net | $(0.4) | $— | | Total operating profit | $69.0 | $54.8 | | Interest expense, net | $62.1 | $43.5 | | Other, net | $1.6 | $(1.6) | | Income from continuing operations before income taxes | $5.3 | $12.9 | | Provision (benefit) for income taxes | $(11.5) | $3.0 | | Income from continuing operations | $16.8 | $9.9 | - Consolidated revenues increased by **35.8%** to **$641.7 million**, driven by higher volume and improved pricing in the Rail Products Group and better lease rates in the Leasing Group. Cost of revenues increased by **35.1%** due to higher deliveries, labor costs, and operational inefficiencies[140](index=140&type=chunk)[141](index=141&type=chunk) - Operating profit rose by **25.9%** to **$69.0 million**, benefiting from increased deliveries, improved pricing, and lease rates, partially offset by higher employee-related and other operating costs. Interest expense, net, increased significantly due to higher variable interest rates and average debt[144](index=144&type=chunk)[145](index=145&type=chunk) [Segment Discussion](index=40&type=section&id=Segment%20Discussion) This section provides a detailed analysis of the financial performance for both the Railcar Leasing and Rail Products segments Railcar Leasing and Management Services Group Performance (in millions, except percentages) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Percent Change | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | :------------- | | Leasing and management revenues | $203.5 | $183.1 | 11.1% | | Total operating profit | $85.5 | $79.8 | 7.1% | | Operating profit margin on lease portfolio sales | 23.8% | 14.8% | | Rail Products Group Performance (in millions, except percentages) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Percent Change | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | :------------- | | Rail products revenues | $558.4 | $338.4 | 65.0% | | Maintenance services revenues | $55.3 | $43.0 | 28.6% | | Other revenues | $24.1 | $9.7 | 148.5% | | Total revenues | $637.8 | $391.1 | 63.1% | | Operating profit | $25.3 | $0.8 | * | | Operating profit margin | 4.0% | 0.2% | | - The Rail Products Group's new railcar backlog increased by **95.5%** to **$3.7 billion**, with an average selling price of **$119,874 per railcar**. Orders received decreased by **46.8%** to **2,690 railcars**, while deliveries increased by **63.8%** to **4,045 railcars**[159](index=159&type=chunk) [Corporate and other](index=44&type=section&id=Corporate%20and%20other) This section discusses the financial performance of the corporate and other segment, focusing on administrative expenses and operating loss - Corporate and other selling, engineering, and administrative expenses increased by **17.1%** to **$26.0 million**, primarily due to higher employee-related costs. The operating loss for this segment increased by **65.6%** to **$(26.0) million**[161](index=161&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's liquidity position, cash flow activities, and compliance with financial covenants - Total committed liquidity as of March 31, 2023, was **$451.5 million**, including **$81.9 million** in unrestricted cash, **$278.2 million** available under the revolving credit facility, and **$91.4 million** under the TILC warehouse loan facility[164](index=164&type=chunk) - Net cash provided by operating activities from continuing operations was **$102.5 million** (up from **$28.5 million** YoY). Net cash used in investing activities was **$203.1 million** (up from **$0.2 million** YoY), primarily due to a **$134.8 million** net investment in the lease fleet and a **$66.2 million** acquisition[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - Net cash provided by financing activities was **$72.4 million** (up from **$28.7 million** YoY), driven by **$96.7 million** in net debt proceeds to support lease fleet investment and general corporate purposes[170](index=170&type=chunk) Financial Covenants (as of March 31, 2023) | Ratio | Covenant | Actual at March 31, 2023 | | :-------------------- | :------------------------ | :----------------------- | | Maximum leverage | No greater than 4.25 to 1.00 | 2.76 | | Minimum interest coverage | No less than 2.25 to 1.00 | 7.66 | [Non-GAAP Financial Measures](index=49&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and defines non-GAAP financial measures, such as Adjusted Free Cash Flow After Investments and Dividends - Adjusted Free Cash Flow After Investments and Dividends (a non-GAAP measure) was **$36.2 million** for the three months ended March 31, 2023, compared to **$47.8 million** in the prior year period[184](index=184&type=chunk)[186](index=186&type=chunk) - Adjusted Free Cash Flow is defined as net cash provided by operating activities from continuing operations, plus cash proceeds from lease portfolio sales, less capital expenditures for manufacturing, dividends paid, and Equity CapEx for leased railcars[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risks occurred since December 31, 2022, with details on hedging and debt in Notes 3 and 8 - No material changes in market risks have occurred since December 31, 2022[189](index=189&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal controls over financial reporting - Disclosure controls and procedures were deemed effective as of March 31, 2023, ensuring timely and accurate reporting to the SEC[190](index=190&type=chunk) - No material changes in internal controls over financial reporting occurred during the three months ended March 31, 2023[191](index=191&type=chunk) [PART II OTHER INFORMATION](index=51&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from Note 14 of the Consolidated Financial Statements - Information on legal proceedings is incorporated from Note 14 of the Consolidated Financial Statements[194](index=194&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors have occurred since the 2022 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2022 Annual Report on Form 10-K[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock transactions, including shares for tax obligations and employee plan purchases, with no repurchases under the new program Common Stock Purchases (Three Months Ended March 31, 2023) | Period | Number of Shares Purchased | Average Price Paid per Share | | :-------------------------------------- | :------------------------- | :--------------------------- | | January 1, 2023 through January 31, 2023 | 4,625 | $27.77 | | February 1, 2023 through February 28, 2023 | 6,967 | $28.29 | | March 1, 2023 through March 31, 2023 | 207 | $23.96 | | **Total** | **11,799** | | - The total number of shares purchased (**11,799**) includes **11,438 shares** surrendered for tax withholding on vested restricted stock and **361 shares** purchased by a non-qualified employee profit sharing plan trust[196](index=196&type=chunk) - No shares were repurchased under the **$250.0 million** share repurchase program during the three months ended March 31, 2023[196](index=196&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable[198](index=198&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item for the period - No other information was reported[199](index=199&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key agreements, certifications, and XBRL documents - Key exhibits include Amended and Restated Bylaws, Amendment No. 2 to Second Amended and Restated Credit Agreement, Third Amendment and Waiver to the Fifth Amended and Restated Warehouse Loan Agreement, and Amendment No. 3 to Amended and Restated Term Loan Agreement[201](index=201&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) The report is signed by Eric R. Marchetto, Executive Vice President and Chief Financial Officer, on May 2, 2023 - The report was signed by Eric R. Marchetto, Executive Vice President and Chief Financial Officer, on May 2, 2023[203](index=203&type=chunk)

Trinity Industries, Inc. (NYSE:TRN) Q1 2023 Earnings Conference Call May 2, 2023 8:00 AM ET Company Participants Leigh Mann - VP, IR Jean Savage - President, CEO & Director Eric Marchetto - EVP & CFO Conference Call Participants Justin Long - Stephens Inc. Bascome Majors - Susquehanna Matthew Elkott - TD Cowen Jacob Moore - KeyBanc Capital Markets Operator Good day, and welcome to the Trinity Industries First Quarter Ended 31st March 2023 Results Conference Call. [Operator Instructions]. Please note, today' ...

TRINITY INDUSTRIES, INC. Q1 2023 – Earnings Conference Call Supplemental Materials May 2, 2023 – based on financial results as of March 31, 2023 Investor Contact: TrinityInvestorRelations@trin.net Website: www.trin.net DELIVERING GOODS for THE GOOD of ALL Forward Looking Statements 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 Trinit ...

Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6903 (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) Delaware ...

TRINITY INDUSTRIES, INC. Q4 2022 – Earnings Conference Call Supplemental Materials February 21, 2023 – based on financial results as of December 31, 2022 Investor Contact: TrinityInvestorRelations@trin.net Website: www.trin.net DELIVERING GOODS for THE GOOD of ALL Forward Looking Statements 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 abo ...

Financial Data and Key Metrics Changes - The fourth quarter GAAP EPS from continuing operations was $0.46, and adjusted EPS was $0.44, up $0.10 sequentially and $0.36 year-over-year [8] - For the full year, GAAP EPS was $1.02, and adjusted EPS of $0.94 was up 176% over 2021 [8][13] - Quarterly revenue of $591 million was up 25% compared to a year ago, and adjusted free cash flow of $138 million was up 394% [12][13] Business Line Data and Key Metrics Changes - Leasing segment revenue in the fourth quarter was $197 million, reflecting improved rates and net lease fleet investment activities [14] - Rail Products segment quarterly revenue was $656 million, up sequentially and year-over-year due to higher deliveries and favorable pricing [15] - The renewal success rate in the leasing segment was 85% in the fourth quarter, with an annual success rate of 82%, the highest since 2014 [14] Market Data and Key Metrics Changes - The future lease rate differential (FLRD) ended the year at 25.1%, indicating strong future rate growth in the leasing segment [9] - Railcar load volumes in 2022 were even with 2021, with markets like grain and automotive showing momentum, while chemical and metals faced headwinds [11] - The number of railcars in storage increased but remained well below the five-year average, indicating a tight fleet [11] Company Strategy and Development Direction - The company is focusing on sustainability as a core value and has ramped up ESG initiatives, including hiring a Global Head of ESG [6][7] - The company completed two acquisitions in 2022, including Holden America, to diversify revenue streams and enhance aftermarket parts exposure [21][22] - The company expects to deliver approximately 49% of its backlog in 2023, with a backlog valued at $3.9 billion [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, citing a strong backlog and expected improvements in rail service metrics despite ongoing labor shortages [10][19] - The company introduced 2023 EPS guidance of $1.50 to $1.70, reflecting anticipated higher deliveries and lease rates [9][28] - Management acknowledged challenges from supply chain disruptions and labor issues but remains confident in the company's ability to execute its three-year goals [20][29] Other Important Information - The company raised its quarterly dividend to $0.26 per share, an increase of approximately 13% [17] - The company approved a new share repurchase authorization of $250 million with no expiration [17] - The pretax return on equity (ROE) for the full year was 10.4%, a significant improvement from 3.4% in 2021 [18] Q&A Session Summary Question: Concerns about storage levels and lease renewal success rate - Management indicated that the increase in storage levels is seasonal and does not reflect significant weakness in the market, with a strong renewal success rate of 85% [30][31] Question: Understanding margin headwinds in rail manufacturing - Management explained that supply chain issues and labor shortages impacted margins, but they expect improvements as the year progresses [32][33] Question: Delivery expectations for 2023 - Management clarified that while industry deliveries are expected to be lower, they anticipate maintaining their market share, leading to an increase in their own deliveries [36][37] Question: Impact of storm recovery on margins - Management confirmed that storm recovery benefits were adjusted out, and supply chain disruptions had a more significant negative impact on margins [37] Question: Economic outlook and guidance risks - Management acknowledged economic challenges but emphasized strong utilization rates and a solid backlog, providing confidence in their guidance [48] Question: Cash flow expectations and capital allocation - Management indicated that cash flow generation remains strong, and capital allocation will prioritize dividends over share buybacks in 2023 [44][55]

Trinity Industries, Inc. (NYSE:TRN) Q3 2022 Earnings Conference Call October 25, 2022 8:00 AM ET Company Participants Leigh Anne Mann - Vice President of Investor Relations Jean Savage - Chief Executive Officer & President Eric Marchetto - Chief Financial Officer Conference Call Participants Allison Poliniak - Wells Fargo Justin Long - Stephens Matt Elkott - Cowen Bascome Majors - Susquehanna Steve Barger - KeyBanc Capital Markets Operator Good day and welcome to the Trinity Industries Third Quarter Results ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ . Commission File Number 1-6903 (Exact name of registrant as specified in its charter) Delaware 75-0225040 (State or Other Jurisdic ...