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Form 8-K TRINITY INDUSTRIES INC For: Oct 22

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October 23, 2015 3:59 PM EDT


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):
 
October 22, 2015

Trinity Industries, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
1-6903
 
75-0225040
(State or other jurisdiction
of incorporation
 
(Commission File No.)
 
(I.R.S. Employer
Identification No.)
  
 
 
 
 
2525 N. Stemmons Freeway, Dallas, Texas
 
 
 
75207-2401
(Address of principal executive offices)
 
 
 
(Zip Code)

 
 
 
Registrant's telephone number, including area code:
 
214-631-4420
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))









Item 2.02 Results of Operations and Financial Condition.

The Registrant hereby furnishes the information set forth in its News Release, dated October 22, 2015, announcing operating results for the three and nine month periods ended September 30, 2015, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On October 23, 2015, the Registrant held a conference call and web cast with respect to its financial results for the three and nine month periods ended September 30, 2015. The conference call scripts of Gail M. Peck, Vice President, Finance and Treasurer; S. Theis Rice, Senior Vice President and Chief Legal Officer; Timothy R. Wallace, Chairman, Chief Executive Officer, and President; William A. McWhirter II, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Groups; D. Stephen Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups; and James E. Perry, Senior Vice President and Chief Financial Officer are furnished as exhibits 99.2, 99.3, 99.4, 99.5, 99.6, and 99.7, respectively, and incorporated herein by reference.

This information is not "filed" pursuant to the Securities Exchange Act of 1934 and is 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."

This information is not "filed" pursuant to the Securities Exchange Act of 1934 and is 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 9.01 Financial Statements and Exhibits.

(a) - (c) Not applicable.

(d) Exhibits:
Exhibit No. / Description
99.1 News Release dated October 22, 2015 with respect to the operating results for the three and nine month periods ended September 30, 2015.
99.2 Conference call script of October 23, 2015 of Gail M. Peck, Vice President, Finance and Treasurer.
99.3 Conference call script of October 23, 2015 of S. Theis Rice, Senior Vice President and Chief Legal Officer.
99.4 Conference call script of October 23, 2015 of Timothy R. Wallace, Chairman, Chief Executive Officer, and President.
99.5 Conference call script of October 23, 2015 of William A. McWhirter II, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Groups.
99.6 Conference call script of October 23, 2015 of D. Stephen Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups.
99.7 Conference call script of October 23, 2015 of James E. Perry, Senior Vice President and Chief Financial Officer.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Trinity Industries, Inc.
 
 
 
October 23, 2015
By:
/s/ James E. Perry
 
 
Name: James E. Perry
 
 
Title: Senior Vice President and Chief Financial Officer





Exhibit Index
Exhibit No.
 
Description
 
 
 
99.1
 
News Release dated October 22, 2015 with respect to the operating results for the three and nine month periods ended September 30, 2015
99.2
 
Conference call script of October 23, 2015 of Gail M. Peck, Vice President, Finance and Treasurer
99.3
 
Conference call script of October 23, 2015 of S. Theis Rice, Senior Vice President and Chief Legal Officer.
99.4
 
Conference call script of October 23, 2015 of Timothy R. Wallace, Chairman, Chief Executive Officer, and President.
99.5
 
Conference call script of October 23, 2015 of William A. McWhirter II, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Groups.
99.6
 
Conference call script of October 23, 2015 of D. Stephen Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups.
99.7
 
Conference call script of October 23, 2015 of James E. Perry, Senior Vice President and Chief Financial Officer.



Exhibit 99.1
NEWS RELEASE    
Investor Contact:     
Media Contact:
Jessica Greiner
Jack Todd
Director of Investor Relations
Vice President, Public Affairs
Trinity Industries, Inc.
Trinity Industries, Inc.
214/631-4420
214/589-8909
FOR IMMEDIATE RELEASE
  
Trinity Industries, Inc. Announces Strong Third Quarter 2015 Results
and Increases Annual Guidance

DALLAS, Texas - October 22, 2015 - Trinity Industries, Inc. (NYSE: TRN) today announced earnings results for the third quarter ended September 30, 2015, including the following significant highlights:

•
Third quarter earnings per common diluted share of $1.31 compared to $0.91 for the third quarter of 2014, a 44% increase year-over-year
•
Increased earnings guidance for the Company for full year 2015 to between $4.65 and $4.90 per common diluted share compared to previous guidance of between $4.45 and $4.75 per share
•
A record operating margin for the Rail Group during the third quarter of 20.8% compared to 18.7% last year
•
Record operating profit of $44.8 million for the Energy Equipment Group during the third quarter

Consolidated Results
Trinity Industries, Inc. reported net income attributable to Trinity stockholders of $204.3 million, or $1.31 per common diluted share. Net income for the same quarter of 2014 was $149.4 million, or $0.91 per common diluted share. Revenues for the third quarter of 2015 totaled $1.54 billion compared to revenues of $1.56 billion for the same quarter of 2014.
“During the third quarter, Trinity maintained its positive momentum generating high quality results that led to 37% year-over-year growth in our net income,” said Timothy R. Wallace, Trinity’s Chairman, CEO, and President.  “Our performance continues to reflect the strength of our diversified industrial business model and our ability to shift our resources to meet our customers' needs.” 
Mr. Wallace added, “An increased level of uncertainty in the macro-economic environment tempered the pace of new order volumes in our businesses during the third quarter.  I am confident in our Company’s ability to respond to shifts in market demand.”
Business Group Results
In the third quarter of 2015, the Rail Group reported revenues and operating profit of approximately $1.07 billion and $223.3 million, respectively, resulting in year-over-year increases compared to the third quarter of 2014 of 8% and 20%, respectively. The increases in revenues and profit were due primarily to higher deliveries, improved pricing, and increased operating efficiencies partially offset by product mix changes. The Rail Group shipped 8,220 railcars and received orders for 3,655 railcars during the third quarter. The Rail Group had a backlog of $6.25 billion as of September 30, 2015, representing 55,265 railcars, compared to a backlog of $6.90 billion as of June 30, 2015, representing 59,830 railcars. At the end of the third quarter, the backlog of railcar orders extends into 2020.

During the third quarter of 2015, the Railcar Leasing and Management Services Group reported leasing and management revenues of $176.6 million compared to $158.3 million in the third quarter of 2014 due to higher

1

average rental rates and net fleet additions. In addition, the Group recognized revenue of $72.6 million from sales of railcars from the lease fleet owned for less than a year during the third quarter compared to $47.4 million in the third quarter of 2014. Operating profit for this Group was $158.2 million in the third quarter of 2015 compared to operating profit of $87.0 million in the third quarter of 2014 due to higher leasing and management operating profit and higher operating profit from sales of railcars from the lease fleet. Supplemental information for the Railcar Leasing and Management Services Group is provided in the following tables.
During the third quarter, the Company sold $267.3 million of leased railcars to Element Financial Corporation ("Element") under a strategic alliance launched in 2013. Since the fourth quarter of 2013 when the alliance was announced, the Company has completed $1.60 billion of leased railcar sales to Element. On October 14th, the Company and Element announced a $1 billion extension of the alliance through December 2019. The Company's third quarter results included $0.39 per common diluted share related to sales of leased railcars to Element and other third parties compared to $0.13 per share in the same quarter last year.
The Inland Barge Group reported revenues of $164.8 million for the third quarter of 2015 compared to revenues of $168.4 million in the third quarter of 2014. Operating profit for this Group was $28.1 million in the third quarter of 2015 compared to $31.0 million in the third quarter of 2014. The slight decrease in revenues compared to the same quarter last year was primarily due to the mix of tank barges partially offset by higher delivery volumes of hopper barges. The Inland Barge Group received orders of $83.9 million during the quarter, and as of September 30, 2015 had a backlog of $373.1 million compared to a backlog of $454.0 million as of June 30, 2015.
The Energy Equipment Group reported revenues of $289.5 million in the third quarter of 2015 compared to revenues of $269.7 million in the same quarter of 2014. Operating profit for the third quarter of 2015 increased to a record $44.8 million compared to $30.0 million in the same quarter last year. The increases in revenues and operating profit compared to the same quarter last year were due primarily to an acquisition completed in the third quarter of 2014. The backlog for structural wind towers as of September 30, 2015 was $424.4 million compared to a backlog of $502.6 million as of June 30, 2015. At the end of the third quarter, the backlog of structural wind tower orders extends through 2016.
Revenues in the Construction Products Group were $154.8 million in the third quarter of 2015 compared to revenues of $170.4 million in the third quarter of 2014. The Group recorded an operating profit of $19.9 million in the third quarter of 2015 compared to an operating profit of $21.6 million in the third quarter of 2014. Revenues and operating profit decreased compared to the same quarter last year primarily as a result of lower delivery volumes in our Highway Products business partially offset by higher delivery volumes in our Aggregates business.
Cash and Liquidity
At September 30, 2015, the Company had cash and cash equivalents of $677.8 million. When combined with capacity under committed credit facilities, the Company had approximately $1.89 billion of available liquidity at the end of the third quarter.
Share Repurchase
The Company repurchased 1,556,516 shares of common stock at a cost of $40.0 million under its share repurchase authorization during the quarter, leaving $103.6 million remaining under its current authorization through December 31, 2015.






2

Earnings Outlook
The Company's earnings guidance for the fourth quarter is between $0.87 and $1.12 per common diluted share. This results in full year 2015 earnings guidance of between $4.65 and $4.90 per common diluted share compared to previous earnings guidance of $4.45 to $4.75 per share. The Company's earnings guidance compares to fourth quarter and full year 2014 earnings per common diluted share of $0.86 and $4.19, respectively. The 2015 earnings guidance assumes an annual weighted average diluted share count of 153 million shares, which includes 2.1 million shares from the convertible notes. The dilutive impact of the convertible notes reduces full year 2015 earnings per share by approximately $0.06 per share. 
Actual results in 2015 may differ from present expectations and could be impacted by a number of factors including, among others, fluctuations in prices of commodities that our customers produce and transport; expenses related to current and potential litigation involving our Highway Products business; the operating leverage and efficiencies that can be achieved by the Company's manufacturing businesses; the level of sales and profitability of railcars; the level of profitability resulting from sales of leased railcars; the dilutive impact of the convertible notes related to changes in the Company's stock price; and the impact of weather conditions on our operations and delivery schedules.
Conference Call
Trinity will hold a conference call at 11:00 a.m. Eastern on October 23, 2015 to discuss its third quarter results. To listen to the call, please visit the Investor Relations section of the Trinity Industries website, www.trin.net and select the Conference Calls menu link. An audio replay may be accessed through the Company’s website or by dialing (402) 220-0116 until 11:59 p.m. Eastern on October 30, 2015.
Trinity Industries, Inc., headquartered in Dallas, Texas, is a diversified industrial company that owns market-leading businesses providing products and services to the energy, transportation, chemical, and construction sectors. Trinity reports its financial results in five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group, and the Energy Equipment 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. Trinity uses the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance” and similar expressions to identify these forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. 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 the Company's Annual Report on Form 10-K for the most recent fiscal year.
- TABLES TO FOLLOW -

3



Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
 
Three Months Ended
September 30,
 
2015
 
2014
Revenues
$
1,542.2

 
$
1,562.8

Operating costs:
 
 
 
Cost of revenues
1,109.4

 
1,172.2

Selling, engineering, and administrative expenses
126.6

 
113.0

Gains on dispositions of property:
 
 
 
Net gains on lease fleet sales
(57.8
)
 
(3.0
)
Other
(0.9
)
 
(0.6
)
 
1,177.3

 
1,281.6

Operating profit
364.9

 
281.2

Interest expense, net
46.1

 
47.8

Other, net
(1.0
)
 
(1.6
)
Income before income taxes
319.8

 
235.0

Provision for income taxes
107.6

 
78.1

Net income
212.2

 
156.9

Net income attributable to noncontrolling interest
7.9

 
7.5

Net income attributable to Trinity Industries, Inc.
$
204.3

 
$
149.4

 
 
 
 
Net income attributable to Trinity Industries, Inc. per common share:
 
 
Basic
$
1.32

 
$
0.96

Diluted
$
1.31

 
$
0.91

Weighted average number of shares outstanding:
 
 
 
Basic
150.0

 
151.5

Diluted
150.9

 
159.6


Trinity is required to utilize the two-class method of accounting when calculating earnings per share as a result of unvested restricted shares that have non-forfeitable rights to dividends and are, therefore, considered to be a participating security. The unvested restricted shares are excluded from the weighted average number of shares outstanding for the purposes of determining earnings per share. The two-class method results in a lower earnings per share than is calculated from the face of the income statement. See Earnings Per Share Calculation table below.

4


Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
 
Nine Months Ended
September 30,
 
2015
 
2014
Revenues
$
4,845.7

 
$
4,508.6

Operating costs:
 
 
 
Cost of revenues
3,540.1

 
3,344.5

Selling, engineering, and administrative expenses
339.3

 
293.0

Gains on dispositions of property:
 
 
 
Net gains on lease fleet sales
(102.8
)
 
(90.2
)
Other
(11.8
)
 
(13.2
)
 
3,764.8

 
3,534.1

Operating profit
1,080.9

 
974.5

Interest expense, net
147.2

 
139.9

Other, net
(4.0
)
 
(2.9
)
Income before income taxes
937.7

 
837.5

Provision for income taxes
315.7

 
274.5

Net income
622.0

 
563.0

Net income attributable to noncontrolling interest
25.5

 
23.0

Net income attributable to Trinity Industries, Inc.
$
596.5

 
$
540.0

 
 
 
 
Net income attributable to Trinity Industries, Inc. per common share:
 
 
Basic
$
3.84

 
$
3.46

Diluted
$
3.78

 
$
3.33

Weighted average number of shares outstanding:
 
 
 
Basic
150.6

 
150.9

Diluted
153.1

 
157.0


Trinity is required to utilize the two-class method of accounting when calculating earnings per share as a result of unvested restricted shares that have non-forfeitable rights to dividends and are, therefore, considered to be a participating security. The unvested restricted shares are excluded from the weighted average number of shares outstanding for the purposes of determining earnings per share. The two-class method results in a lower earnings per share than is calculated from the face of the income statement. See Earnings Per Share Calculation table below.


5


Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
 
Three Months Ended
September 30,
Revenues:
2015
 
2014
Rail Group
$
1,073.4

 
$
996.4

Construction Products Group
154.8

 
170.4

Inland Barge Group
164.8

 
168.4

Energy Equipment Group
289.5

 
269.7

Railcar Leasing and Management Services Group
249.2

 
205.7

All Other
29.1

 
28.9

Segment Totals before Eliminations
1,960.8

 
1,839.5

Eliminations - lease subsidiary
(308.4
)
 
(186.5
)
Eliminations - other
(110.2
)
 
(90.2
)
Consolidated Total
$
1,542.2

 
$
1,562.8

 
 
 
 
 
Three Months Ended
September 30,
Operating profit (loss):
2015
 
2014
Rail Group
$
223.3

 
$
186.4

Construction Products Group
19.9

 
21.6

Inland Barge Group
28.1

 
31.0

Energy Equipment Group
44.8

 
30.0

Railcar Leasing and Management Services Group
158.2

 
87.0

All Other
(3.0
)
 
(3.3
)
Segment Totals before Eliminations and Corporate Expenses
471.3

 
352.7

Corporate
(39.7
)
 
(36.7
)
Eliminations - lease subsidiary
(65.6
)
 
(34.3
)
Eliminations - other
(1.1
)
 
(0.5
)
Consolidated Total
$
364.9

 
$
281.2



6


Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
 
Nine Months Ended
September 30,
Revenues:
2015
 
2014
Rail Group
$
3,328.2

 
$
2,749.4

Construction Products Group
418.9

 
435.2

Inland Barge Group
505.7

 
470.7

Energy Equipment Group
871.5

 
707.9

Railcar Leasing and Management Services Group
732.1

 
880.3

All Other
84.0

 
80.2

Segment Totals before Eliminations
5,940.4

 
5,323.7

Eliminations - lease subsidiary
(782.9
)
 
(564.2
)
Eliminations - other
(311.8
)
 
(250.9
)
Consolidated Total
$
4,845.7

 
$
4,508.6

 
 
 
 
 
Nine Months Ended
September 30,
Operating profit (loss):
2015
 
2014
Rail Group
$
663.7

 
$
529.9

Construction Products Group
49.5

 
65.7

Inland Barge Group
96.3

 
88.6

Energy Equipment Group
118.3

 
81.2

Railcar Leasing and Management Services Group
418.7

 
419.7

All Other
(4.6
)
 
(11.3
)
Segment Totals before Eliminations and Corporate Expenses
1,341.9

 
1,173.8

Corporate
(98.7
)
 
(89.5
)
Eliminations - lease subsidiary
(163.8
)
 
(110.5
)
Eliminations - other
1.5

 
0.7

Consolidated Total
$
1,080.9

 
$
974.5



7


Trinity Industries, Inc.
Leasing Group
Condensed Results of Operations
(unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
 
($ in millions)
Revenues:
 
 
 
 
 
 
 
Leasing and management
$
176.6

 
$
158.3

 
$
520.9

 
$
469.2

Sales of railcars owned one year or less at the time of sale
72.6

 
47.4

 
211.2

 
411.1

Total revenues
$
249.2

 
$
205.7

 
$
732.1

 
$
880.3

Operating profit:
 
 
 
 
 
 
 
Leasing and management
$
81.8

 
$
74.4

 
$
254.7

 
$
213.8

Railcar sales:
 
 
 
 
 
 
 
Railcars owned one year or less at the time of sale
18.6

 
9.6

 
61.2

 
115.7

Railcars owned more than one year at the time of sale
57.8

 
3.0

 
102.8

 
90.2

Total operating profit
$
158.2

 
$
87.0

 
$
418.7

 
$
419.7

Operating profit margin:
 
 
 
 
 
 
 
Leasing and management
46.3
%
 
47.0
%
 
48.9
%
 
45.6
%
Railcar sales
*
 
*
 
*
 
*
Total operating profit margin
63.5
%
 
42.3
%
 
57.2
%
 
47.7
%
Selected expense information(1):
 
 
 
 
 
 
 
Depreciation
$
35.9

 
$
32.4

 
$
105.8

 
$
97.1

Maintenance
$
24.6

 
$
17.8

 
$
65.9

 
$
58.8

Rent
$
9.9

 
$
13.1

 
$
31.3

 
$
39.7

Interest
$
32.5

 
$
39.1

 
$
106.8

 
$
114.5

 
September 30,
2015
 
December 31,
2014
Leasing portfolio information:
 
 
 
Portfolio size (number of railcars)
77,140

 
75,930
Portfolio utilization
98.5
%
 
99.5
%
 
Nine Months Ended September 30,
 
2015
 
2014
 
(in millions)
Proceeds from sale of leased railcars to Element Financial Corporation:
 
 
Leasing Group:
 
 
 
Railcars owned one year or less at the time of sale
$
182.7

 
$
378.8

Railcars owned more than one year at the time of sale
258.0

 
235.7

Rail Group
175.8

 
153.4

 
$
616.5

 
$
767.9

* Not meaningful

(1) Depreciation, maintenance, and rent expense are components of operating profit. Amortization of deferred profit on railcars sold from the Rail Group to the Leasing Group is included in the operating profit of the Leasing Group resulting in the recognition of depreciation expense based on the Company's original manufacturing cost of the railcars. Interest expense is not a component of operating profit and includes the effect of hedges.


8


Trinity Industries, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
 
September 30,
2015
 
December 31,
2014
Cash and cash equivalents
$
677.8

 
$
887.9

Short-term marketable securities
—

 
75.0

Receivables, net of allowance
481.7

 
405.3

Income tax receivable
26.2

 
58.6

Inventories
1,020.9

 
1,068.4

Restricted cash
211.8

 
234.7

Net property, plant, and equipment
5,308.4

 
4,902.9

Goodwill
754.3

 
773.2

Other assets
324.2

 
327.8

 
$
8,805.3

 
$
8,733.8

 
 
 
 
Accounts payable
$
294.6

 
$
295.4

Accrued liabilities
557.5

 
709.6

Debt, net of unamortized discount of $48.3 and $60.0
3,284.5

 
3,553.0

Deferred income
27.4

 
36.4

Deferred income taxes
665.8

 
632.6

Other liabilities
115.2

 
109.4

Stockholders' equity
3,860.3

 
3,397.4

 
$
8,805.3

 
$
8,733.8



9


Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)


September 30,
2015
 
December 31,
2014
Property, Plant, and Equipment
 
 
 
Corporate/Manufacturing:
 
 
 
Property, plant, and equipment
$
1,819.4

 
$
1,681.7

Accumulated depreciation
(885.7
)
 
(820.7
)
 
933.7

 
861.0

Leasing:
 
 
 
Wholly-owned subsidiaries:
 
 
 
Machinery and other
10.7

 
10.7

Equipment on lease
3,661.7

 
3,189.6

Accumulated depreciation
(608.1
)
 
(601.1
)
 
3,064.3

 
2,599.2

Partially-owned subsidiaries:
 
 
 
Equipment on lease
2,261.3

 
2,261.2

Accumulated depreciation
(308.8
)
 
(261.3
)
 
1,952.5

 
1,999.9

 
 
 
 
Net deferred profit on railcars sold to the Leasing Group
(642.1
)
 
(557.2
)
 
$
5,308.4

 
$
4,902.9



10


Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
 
September 30,
2015
 
December 31,
2014
Debt
 
 
 
Corporate - Recourse:
 
 
 
Revolving credit facility
$
—

 
$
—

Senior notes due 2024, net of unamortized discount of $0.4 and $0.4
399.6

 
399.6

Convertible subordinated notes, net of unamortized discount of $47.9 and $59.6
401.6

 
389.9

Other
0.5

 
0.7

 
801.7

 
790.2

Leasing:
 
 
 
Wholly-owned subsidiaries:
 
 
 
Recourse:
 
 
 
Capital lease obligations
36.6

 
39.1

 
36.6

 
39.1

Non-recourse:
 
 
 
Secured railcar equipment notes
690.4

 
723.3

Warehouse facility
291.7

 
120.6

Promissory notes
—

 
363.9

 
982.1

 
1,207.8

Partially-owned subsidiaries - Non-recourse:
 
 
 
Secured railcar equipment notes
1,464.1

 
1,515.9

 
1,464.1

 
1,515.9

 
$
3,284.5

 
$
3,553.0



11


Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
 
September 30,
2015
 
December 31,
2014
Leasing Debt Summary
 
 
 
Total Recourse Debt
$
36.6

 
$
39.1

Total Non-Recourse Debt
2,446.2

 
2,723.7

 
$
2,482.8

 
$
2,762.8

Total Leasing Debt
 
 
 
Wholly-owned subsidiaries
$
1,018.7

 
$
1,246.9

Partially-owned subsidiaries
1,464.1

 
1,515.9

 
$
2,482.8

 
$
2,762.8

Equipment on Lease(1)
 
 
 
Wholly-owned subsidiaries
$
3,064.3

 
$
2,599.2

Partially-owned subsidiaries
1,952.5

 
1,999.9

 
$
5,016.8

 
$
4,599.1

Total Leasing Debt as a % of Equipment on Lease
 
 
 
Wholly-owned subsidiaries
33.2
%
 
48.0
%
Partially-owned subsidiaries
75.0
%
 
75.8
%
Combined
49.5
%
 
60.1
%

(1) Excludes net deferred profit on railcars sold to the Leasing Group.


12


Trinity Industries, Inc.
Condensed Consolidated Cash Flow Statements
(in millions)
(unaudited)
 
Nine Months Ended
September 30,
 
2015
 
2014
Operating activities:
 
 
 
Net income
$
622.0

 
$
563.0

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
197.9

 
171.5

Net gains on railcar lease fleet sales owned more than one year at the time of sale
(102.8
)
 
(90.2
)
Other
57.1

 
(41.7
)
Changes in assets and liabilities:
 
 
 
(Increase) decrease in receivables
(43.9
)
 
(155.5
)
(Increase) decrease in inventories
50.7

 
(226.3
)
Increase (decrease) in accounts payable and accrued liabilities
(129.5
)
 
117.7

Other
(21.2
)
 
(5.9
)
Net cash provided by operating activities
630.3

 
332.6

Investing activities:
 
 
 
Proceeds from railcar lease fleet sales owned more than one year at the time of sale
313.4

 
257.4

Proceeds from dispositions of property
6.1

 
21.9

Capital expenditures - leasing, net of sold lease fleet railcars owned one year or less with a net cost of $150.0 and $295.4
(642.2
)
 
(170.4
)
Capital expenditures - manufacturing and other
(145.1
)
 
(170.0
)
(Increase) decrease in short-term marketable securities
75.0

 
149.7

Acquisitions
(46.2
)
 
(711.8
)
Divestitures
51.3

 
—

Other
4.8

 
2.0

Net cash required by investing activities
(382.9
)
 
(621.2
)
Financing activities:
 
 
 
Payments to retire debt
(530.8
)
 
(140.2
)
Proceeds from issuance of debt
242.4

 
727.4

Shares repurchased(1)
(107.5
)
 
(36.5
)
Dividends paid to common shareholders
(48.0
)
 
(38.7
)
Purchase of shares to satisfy employee tax on vested stock
(27.4
)
 
(38.5
)
Contributions from noncontrolling interest
—

 
49.6

Distributions to noncontrolling interest
(30.4
)
 
(19.3
)
(Increase) decrease in restricted cash
32.3

 
(2.2
)
Other
11.9

 
22.2

Net cash (required) provided by financing activities
(457.5
)
 
523.8

Net (decrease) increase in cash and cash equivalents
(210.1
)
 
235.2

Cash and cash equivalents at beginning of period
887.9

 
428.5

Cash and cash equivalents at end of period
$
677.8

 
$
663.7

(1) Reflects shares of stock cash settled during the period.

13


Trinity Industries, Inc.
Earnings per Share Calculation
(in millions, except per share amounts)
(unaudited)

Basic net income attributable to Trinity Industries, Inc. per common share is computed by dividing net income attributable to Trinity remaining after allocation to unvested restricted shares by the weighted average number of basic common shares outstanding for the period.
 
Three Months Ended
September 30, 2015
 
Three Months Ended
September 30, 2014
 
Income

 
Average Shares

 
EPS

 
Income

 
Average Shares

 
EPS

Net income attributable to Trinity Industries, Inc.
$
204.3

 
 
 
 
 
$
149.4

 
 
 
 
Unvested restricted share participation
(6.0
)
 
 
 
 
 
(4.7
)
 
 
 
 
Net income attributable to Trinity Industries, Inc. - basic
198.3

 
150.0

 
$
1.32

 
144.7

 
151.5

 
$
0.96

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options
—

 
—

 
 
 
—

 
0.1

 
 
  Convertible subordinated notes
—

 
0.9

 
 
 
0.2

 
8.0

 
 
Net income attributable to Trinity Industries, Inc. - diluted
$
198.3

 
150.9

 
$
1.31

 
$
144.9

 
159.6

 
$
0.91




 
Nine Months Ended
September 30, 2015
 
Nine Months Ended
September 30, 2014
 
Income

 
Average Shares

 
EPS

 
Income

 
Average Shares

 
EPS

Net income attributable to Trinity Industries, Inc.
$
596.5

 
 
 
 
 
$
540.0

 
 
 
 
Unvested restricted share participation
(18.2
)
 
 
 
 
 
(17.8
)
 
 
 
 
Net income attributable to Trinity Industries, Inc. - basic
578.3

 
150.6

 
$
3.84

 
522.2

 
150.9

 
$
3.46

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options
—

 
—

 
 
 
—

 
0.1

 
 
  Convertible subordinated notes
0.3

 
2.5

 
 
 
0.6

 
6.0

 
 
Net income attributable to Trinity Industries, Inc. - diluted
$
578.6

 
153.1

 
$
3.78

 
$
522.8

 
157.0

 
$
3.33











14


Trinity Industries, Inc.
Reconciliation of EBITDA
(in millions)
(unaudited)

“EBITDA” is defined as net income plus interest expense, income taxes, and depreciation and amortization including goodwill impairment charges. EBITDA is not a calculation based on generally accepted accounting principles. The amounts included in the EBITDA calculation are, however, derived from amounts included in the historical consolidated statements of operations data. In addition, EBITDA should not be considered as an alternative to net income or operating income as an indicator of our operating performance, or as an alternative to operating cash flows as a measure of liquidity. We believe EBITDA assists investors in comparing a company’s performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA measure presented in this press release may not always be comparable to similarly titled measures by other companies due to differences in the components of the calculation.

 
Three Months Ended
September 30,
 
2015
 
2014
Net income
$
212.2

 
$
156.9

Add:
 
 
 
Interest expense
46.7

 
48.2

Provision for income taxes
107.6

 
78.1

Depreciation and amortization expense
67.5

 
60.5

Earnings before interest expense, income taxes, and depreciation and amortization expense
$
434.0

 
$
343.7


 
Nine Months Ended
September 30,
 
2015
 
2014
Net income
$
622.0

 
$
563.0

Add:
 
 
 
Interest expense
148.8

 
141.4

Provision for income taxes
315.7

 
274.5

Depreciation and amortization expense
197.9

 
171.5

Earnings before interest expense, income taxes, and depreciation and amortization expense
$
1,284.4

 
$
1,150.4


- END -

15


Exhibit 99.2
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Gail M. Peck
Vice President, Finance and Treasurer
October 23, 2015

Thank you, Aaron. Good morning everyone. Welcome to the Trinity Industries’ third quarter 2015 results conference call. I am Gail Peck, Vice President, Finance and Treasurer of Trinity. Thank you for joining us today.

Just to note, we are experiencing severe weather in Dallas this morning. In the unlikely event the call is disrupted, we will reconnect as quickly as possible.

Similar to the format we used on our last earnings call, we are going to have two parts to our conference call remarks. First, we will begin with an update on the highway litigation matter. We will then follow with our normal quarterly earnings conference call format.
    
Today’s speakers are:
•Theis Rice, Senior Vice President and Chief Legal Officer;
•Tim Wallace our Chairman, Chief Executive Officer and President;
•Bill McWhirter, Senior Vice President and Group President of the Construction Products, Energy Equipment, and Inland Barge Groups;
•Steve Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups; and
•James Perry, our Senior Vice President and Chief Financial Officer

Following their comments, we will then move to the Q&A session. Mary Henderson, our Vice President and Chief Accounting Officer, is also in the room with us today. I will now turn the call over to Theis Rice.

Theis
Tim
Bill
Steve
James

Q&A Session

That concludes today's conference call. A replay of this call will be available after one o'clock eastern standard time today through midnight on October 30, 2015. The access number is (402) 220-0116. Also the replay will be available on the website located at www.trin.net. We look forward to visiting with you again on our next conference call. Thank you for joining us this morning.




Exhibit 99.3
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of S. Theis Rice
Senior Vice President and Chief Legal Officer
October 23, 2015

Thank you, Gail - and good morning.

For purposes of today’s remarks, I will refer to Trinity Industries and Trinity Highway Products together as the “Company,” the Federal Highway Administration as the “FHWA,” and the American Association of State Highway and Transportation Officials as “AASHTO.” I will also refer to Texas A&M Transportation Institute as “TTI” and the National Cooperative Highway Research Program - Report 350 as “Report 350.”
 
As previously reported, the Company has received an adverse jury verdict in a False Claims Act case involving claims of fraud and product defect pertaining to the Company’s ET Plus® guardrail end terminal system. In June 2015, the Federal District Court entered judgment on the verdict. Because the Company believes the evidence presented at trial clearly showed no fraud was committed, the Company has filed a Notice of Appeal with the United States Court of Appeals for the Fifth Circuit. We currently anticipate the Fifth Circuit will issue a briefing schedule before the end of the first quarter 2016, at which time we will better understand the timing of the appellate process for this matter.

With respect to the product itself, the FHWA reported earlier this year that the ET Plus® System had successfully passed eight additional crash tests performed in accordance with Report 350 test matrices, the applicable and nationally-recognized testing criteria and performance evaluation standards. Additionally, an FHWA and AASHTO joint task force was formed to evaluate certain features of the ET Plus® System. Upon completing its evaluation, the task force confirmed - contrary to allegations in the False Claims Act case - that there was no evidence of multiple versions of the ET Plus® System and that the ET Plus® Systems used in the eight crash tests were representative of ET Plus® Systems installed on the nation’s roadways.

The FHWA also formed a separate joint task force to conduct an in-service evaluation of the ET Plus® System. The task force was comprised of representatives from the FHWA, AASHTO, state Departments of Transportation, and several independent experts. As part of this evaluation, the task force was to determine if there was any evidence of performance limitations unique to the ET Plus® System, and the degree to which any such performance limitations extended to other brands of extruding, w-beam guardrail terminals. On September 11th of this year, the joint task force published its findings and conclusions, which included, among others, that there are no in-service performance limitations unique to the ET Plus® System; that there will be real-world crash conditions which exceed the performance expectations of all brands of w-beam guardrail end terminals such as improper system placement or installation, and improper or delayed maintenance or repair, to name a few; and that after months of reviewing real-world crash data from across the country, there was no reason to conduct further testing of the ET Plus® System or other Report 350-compliant, extruding w-beam guardrail end terminal systems.

A separate false claims case has been filed under state law in the Commonwealth of Virginia by the same party who filed the federal False Claims Act case in the Eastern District of Texas. The Commonwealth has elected to join the litigation. In a decision we believe was motivated by this litigation, the Virginia Department of Transportation, or VDOT, recently conducted six separate crash tests of the ET Plus® System. All six tests were non-standard under Report 350 test criteria. Two Company representatives and a representative from TTI, the product’s designer, were allowed to conduct limited inspections at the test site. During these




inspections the Company and TTI observed, and noted to VDOT, multiple conditions that were inconsistent with Report 350 test criteria. However, VDOT generally ignored the inconsistencies the Company brought to their attention. In the Company’s opinion, the last two crash tests were staged with arbitrary impact conditions contrived to provoke a failed test.

TTI stated that it has no confidence in the six crash tests performed by VDOT and also characterized VDOT’s tests as arbitrary and non-standard. The Company shares TTI’s lack of confidence. Further, TTI and the Company agree that changing the criteria under which crash tests are conducted is not only unsound and of utmost concern, but altogether indefensible when one roadside safety product is tested to a different set of standards than all others.

The results of VDOT’s tests have not yet been published. However, based on the Company’s and TTI’s limited inspections and review of video footage of each test, there was no spearing or other intrusion of any test vehicle by the ET Plus® System. Please refer to www.etplusfacts.com/virginia for more information on this issue.

The Company is also aware of five false claims act-related cases filed under state law by the same party. In each of these five cases, the respective state Attorney General has filed a Notice of Election to Decline Intervention in the matter. Indiana; Delaware; Iowa; Rhode Island; Tennessee

In conclusion, the ET Plus® System is the most crash tested guardrail end terminal of its type. Two joint task forces charged with evaluating the ET Plus® System and its in-service performance have reported their respective findings and conclusions. In what has been described as the most thorough evaluation ever conducted on a single class of roadside hardware, the FHWA has confirmed that the ET Plus® System has been thoroughly crash tested, that the product complies with Report 350 crash test criteria and performance evaluation standards, and that it has undergone an in-service performance review validating that in-service performance limitations associated with all extruding end terminal systems are not unique to the ET Plus® System. This confirmation of ET Plus crashworthiness when properly installed, maintained and repaired further ratifies the FHWA’s consistent position since 2005 - that the ET Plus® System is acceptable for use on the nation’s roadways and has an unbroken chain of eligibility for reimbursement under the Federal-aid Highway Program. The Company is currently receiving inquiries from customers for potential purchases of ET Plus® systems, and will resume shipment of the product as orders are received and accepted.

Our third quarter 10-Q will be filed today. In Note 18 of the 10-Q we provide additional information on the foregoing and other Company legal matters. For additional information and details on the Company’s positions on these and related issues, please refer to www.etplusfacts.com

I will now turn the call over to Tim.





Exhibit 99.4
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Timothy R. Wallace
Chairman, Chief Executive Officer, and President
October 23, 2015

Thank you, Theis and good morning everyone. I am pleased with Trinity’s financial performance during the 3rd quarter. Our performance continues to reflect the strength of our diversified industrial business model and our ability to shift resources to meet customer needs. I am proud of the performance delivered by our employees.

Our Rail Group generated strong quarterly financial results during the 3rd quarter, reporting a record profit margin for the second consecutive quarter. I am impressed with the way this Group continues to maintain a high level of profitability while shifting its product mix.

During the 3rd quarter, our Railcar Leasing and Management Services Group delivered strong year-over-year financial results. The Group’s results were enhanced by sales of leased railcars. I remain pleased with the progress our team is making with high-quality institutional investors who are looking to invest long-term capital in portfolios of leased railcars. We expect to continue growing our railcar investment platform.

Our Inland Barge Group’s financial performance during the 3rd quarter reflects a changing product mix. The Group continues to demonstrate manufacturing flexibility by shifting production lines as necessary to meet customer demand for specific barge types.

The Energy Equipment Group set a new record for quarterly operating profit during the 3rd quarter, substantially improving its results year-over-year. The successful integration of Meyer Steel Structures contributed to this group’s improved results. Our Construction Products Group maintained a comparable profit margin on lower revenues compared to the 3rd quarter last year.

During the 3rd quarter, an increased level of uncertainty in the macro-economic environment reduced the pace of new order volumes in our businesses. As the quarter progressed, we observed an increasing level of hesitancy on the part of a number of our customers to make capital investments. The extended downturn in the price of oil, combined with recent oil price volatility, is a factor in much of the uncertainty we see. Weakness in other commodity prices is also weighing on customers’ decisions. At the same time, we see some positive fundamentals in the automotive and petro-chemical sectors. The mixed macro environment is resulting in levels of uncertainty occurring at the order placement level. It is difficult to predict how long this hesitancy will linger. I am very confident our businesses are prepared to respond to shifts in demand for our products.

As we look to the future, Trinity is in a position of strength because of the size and quality of the order backlog within our Railcar Group. Deliveries of railcars in our backlog will extend through 2020. Our railcar backlog provides a solid base of production for planning purposes in 2016 and 2017. In addition, our wind tower business has an order backlog that runs through 2016.

Our strong balance sheet and cash flow provides us the ability to remain opportunistic in respect to growth opportunities. We continue to search for acquisition and organic growth opportunities in markets that have products, services, technology, and competencies that fit within our portfolio of manufacturing businesses.





During the past few years, Trinity has been successful in establishing a higher earnings platform relative to our historical performance. Our current 2015 earnings guidance range indicates a new record level for Trinity, surpassing record results achieved during the last two years. Our accomplishments are due to the capabilities and expertise of our dedicated employees, our ability to respond effectively to shifts in demand, and our ongoing commitment to provide high quality products and services to our customers.
                    
I’ll now turn it over to Bill for his comments.





Exhibit 99.5
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of William A. McWhirter II,
Senior Vice President and Group President
Construction Products, Energy Equipment and Inland Barge Groups
October 23, 2015

Thank you Tim and good morning everyone.     

During the third quarter, the Barge Group reported another solid performance.

The Barge Group received orders for $84 million during the quarter resulting in a backlog of $373 million. The majority of these orders were for barges serving the dry cargo market, which continues to be driven by replacement needs and the agriculture industry. There is less demand for barges that carry liquid cargo due to the large number of tank barges delivered during the last few years. We are adjusting our production to better serve demand, including idling one of our four manufacturing facilities. The investments we have made over the past decade have increased our production efficiencies and positioned us to respond effectively as market demand changes. We are prepared to make additional adjustments to our manufacturing footprint as needed.

The Construction Products Group continued to make the most of a challenging operating environment.

Despite the scheduled expiration of the federal highway bill at the end of this month and ongoing litigation matters, the group maintained operating margins during the third quarter on lower revenues compared with last year. This performance is driven by the strength of the construction market in the southern U.S. A proposed, long-term federal highway bill would provide our customers the visibility to plan and fund infrastructure projects. We are closely following the status of the bill.

During the last several years, we have been repositioning our Construction Products Group to focus on products with more consistent demand drivers. The aggregates business, an example of this focus, has performed very well during 2015, and we continue to see positive near term demand drivers.

The Energy Equipment Group reported another record level of profit during the third quarter. Most of the businesses in this group improved their performance quarter over quarter. The wind tower business continued to deliver solid results and has strong visibility for 2016 production plans. At the end of the third quarter, the wind tower backlog totaled $424 million.

While the wind industry has made advancements in reducing the installed cost of wind power, near term demand will likely be dependent on another federal production tax credit. We are prepared to respond should Congress approve another tax credit in the next few months.
 
The current market for utility structures remains competitive and has recently experienced some consolidation and industry capacity rationalization. We continue to see positive, long-term investment projections for this industry. The acquisition of Meyer Steel Structures, which we purchased last year during the third quarter, positions us well to respond to increased transmission infrastructure spending in both the U.S. and Mexico.
    




In closing, our businesses are responding effectively to mixed demand conditions. We believe these businesses have a great deal of potential as our long-term outlook for energy and infrastructure investment in North America remains positive.

And now, I will turn the presentation over to Steve.





Exhibit 99.6
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of D. Stephen Menzies
Senior Vice President and Group President
Rail and Railcar Leasing Groups
October 23, 2015

Thank you, Bill, good morning!

Our talented TrinityRail team delivered another quarter of excellent operating results, further testimony to the strength of our integrated railcar manufacturing, leasing and services business model. During the quarter, our Rail Group once again exceeded a 20% operating profit margin, and our Leasing Group generated another quarter of strong results. Our operating and financial flexibility and leading market position give us confidence we can effectively adapt to changing market conditions.

As Tim indicated in his remarks uncertainty exists in the industrial economy. As the third quarter progressed, this environment, combined with the challenges of navigating new tank car safety regulations, is creating hesitancy on the part of industrial customers while in the process of evaluating their capital equipment requirements.

As the quarter progressed, orders slowed, and have remained below recent order levels into the fourth quarter. It is too early to discern whether current demand conditions will persist.

Our Rail Group received 3,655 orders, during the third quarter. The orders we received during the third quarter represent a diverse mix of railcars, including tank cars, covered hoppers, flat cars and autoracks. As a reminder, our autorack orders are not included in the ARCI industry order report. We continue to see inquiries among a broad array of railcar types reflecting a shift from upstream energy markets to downstream petrochemical, chemical and agricultural markets. The level of automotive related activity is also favorable. We remain optimistic about long-term demand fundamentals. These demand drivers, combined with the needs to replace aging general purpose freight cars, continue to support
our view of an extended railcar cycle. While production levels may be lower during the next few years compared with recent elevated levels, third party forecasts continue to expect above average levels of industry railcar production through 2018.

During the third quarter, extended production runs positioned our Rail Group to generate high levels of productivity and lead to superior operating performance, eclipsing a 20% operating profit margin for the second consecutive quarter. We delivered 8,220 railcars in the third quarter. We expect to deliver between 8,300 and 9,000 railcars in the fourth quarter. This would result in full year 2015 deliveries of between 33,750 and 34,500 railcars in 2015, setting a new record level for Trinity.

Our industry leading backlog of more than 55,000 railcars, valued at $6.25 billion at the end of the 3rd quarter, gives us very good visibility into future years even in this time of uncertainty in the industrial economy. We already have more than 23,000 railcars in our backlog planned for delivery next year and we are planning deliveries of 27,000 to 30,000 railcars in 2016. Our operating flexibility positions us to respond to further shifts in market demand.

The industry’s implementation of the new HM-251 tank car regulations is still taking shape. Various complexities are affecting customers’ decisions whether to build new tank cars or to modify existing tank




cars for flammable service. These include the railcar industry’s implementation of Positive Train Control systems, HM-251 regulatory administrative appeals, and litigation challenging new tank car regulations, as well as, recently implemented railroad tariff actions. The continued low price of crude oil is further complicating the evaluation process. As we have indicated previously, our first priority is to ensure regulatory compliance of our own railcar fleet. We have completed HM-251 modifications to our first group of DOT111’s; converting them to meet the new regulations. We are also in latter stage discussions with several industrial shippers to modify significant portions of their fleets. Customers who in recent years purchased new DOT111’s used in flammable service, seem most inclined to work with the original railcar manufacturer to meet their potential modification requirements. We have received several orders for new DOT117’s, as well. We continue to believe the new regulations will ultimately be a demand catalyst for new tank cars, as well as, tank car modifications as the compliance deadlines draw nearer and challenges to the new regulations are resolved.

The performance of our Leasing Group continues to reflect solid railcar market fundamentals resulting from high fleet utilization and extended industry backlogs. Revenue and profit from operations, which excludes railcar sales, increased by 12% and 10%, respectively, year-over-year. Lease fleet utilization is down slightly from last quarter, but remains high at 98.5%. New additions to the wholly-owned lease fleet, high fleet utilization levels and healthy lease renewal increases, all contributed to a strong third quarter performance.

Our owned and partially owned lease fleet now stands at 77,140 railcars. At the end of September, 28% of the railcars in our order backlog were committed to customers of our leasing business, bringing our leased railcar backlog to approximately $1.8 billion.

During the last 15 years, we established a strong lease origination platform, integrated our manufacturing and leasing operations, and built significant scale in our railcar leasing and management services platform. In addition, we diversified the funding sources for our lease fleet growth to include equity partnerships, as well as debt securitizations. As we did so, we saw the opportunity to develop a unique business model that involves originating and managing railcar investment vehicles for institutional investors which, in turn, supports the growth of our railcar leasing and services platform. We recently announced a $1 billion extension of our strategic alliance with Element Financial Corporation. The alliance now extends through 2019, with new purchases under the extension beginning in 2016. We are delighted to continue to work with Element. Our team is also making progress in expanding our interface with other key institutional investors in support of our railcar investment vehicle platform.

In summary, TrinityRail’s integrated business platform is well-positioned and responding effectively to the current demand environment. The Rail Group and Leasing and Management Services Group delivered exceptional results during the third quarter. Our operating and financial flexibility continue to differentiate TrinityRail, enhancing our position as a premier provider of railcar products and services.

I will now turn it over to James for his remarks.





Exhibit 99.7
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of James E. Perry
Senior Vice President and Chief Financial Officer
October 23, 2015

Thank you, Steve and good morning everyone.

Yesterday, we announced our results for the third quarter of 2015. For the quarter, the Company reported earnings per share of $1.31 and revenues of $1.54 billion, compared to EPS and revenues of $0.91 and $1.56 billion, respectively, for the same period last year. During the third quarter, our EPS reflected strong operating performance by most of our businesses.

During the third quarter, the company repurchased 1.56 million shares of its common stock for $40 million. This year, we have repurchased a total of 3.95 million shares of our stock for $115 million and have $104 million available under our current authorization through year-end.

We also invested $44 million in capital expenditures during the quarter across a number of our manufacturing businesses and at the corporate level. Year-to-date, this figure totals $145 million.

During the third quarter, we invested approximately $223 million in leased railcar additions to our owned
lease fleet. This investment was offset by $219 million of leased railcar sales from our lease fleet. Leased railcars remain a very good investment for us, offering attractive returns and cash flow while the railcars are in our fleet, then the opportunity for additional profit recognition when sold to third parties, including institutional investors.

Last week, we were pleased to announce the extension of our strategic railcar alliance with Element Financial Corporation. As Steve indicated, this extension calls for approximately $1 billion of leased railcars to be sold to Element in 2016 through 2019. Year-to-date sales of leased railcars to Element total approximately $617 million, bringing the cumulative total under the existing alliance to more than $1.6 billion since the program began in 2013. The level of interest in acquiring leased railcars remains high among institutional investors, and we continue to make progress in building portfolios of leased railcars for institutional investors who are looking to invest long-term capital in this asset class.

Our railcar investment vehicle platform provides Trinity with a level of financial flexibility that is unique among diversified industrial companies. The capital generated through our railcar investment vehicle platform provides us with the financial flexibility to reinvest in our railcar leasing and management services platform, our portfolio of diversified industrial businesses, or in other investments to enhance shareholder returns.

We ended the quarter with $678 million of cash on hand and have access to additional capital through our committed lines of credit at both the corporate and leasing levels.  At the end of the third quarter, our liquidity position remained strong at $1.9 billion.

As provided in our press release yesterday, we increased our annual guidance for 2015. Our current EPS guidance is $4.65 to $4.90 compared to our prior guidance of $4.45 to $4.75. This range implies fourth quarter EPS of $0.87 to $1.12.




As Steve mentioned, we expect our Rail Group to deliver between 8,300 and 9,000 railcars in the fourth quarter, resulting in approximate annual deliveries of between 33,750 and 34,500 railcars. We expect fourth quarter revenues of between $1.1 billion and $1.175 billion with an operating margin of between 19.5% and 20.5%. This results in record results for the year with annual revenues of between $4.4 billion and $4.5 billion with an operating margin of approximately 20%. TrinityRail’s railcar backlog remains strong at over $6.2 billion and continues to provide production visibility for our railcar operations in 2016 and beyond.

Industry railcar orders were reported by ARCI as 7,375 in the third quarter. As a reminder, we do not report our auto rack figures in our submission to ARCI because there is not a specific category provided for this input. In our press release yesterday, and as Steve mentioned, Trinity reported 3,655 orders for the third quarter - this unit count includes 1,250 auto racks. These auto rack orders are in addition to the total figure reported by ARCI.

We are reminding everyone of this detail this quarter due to the larger than normal percentage of our auto rack orders as compared to the total railcar orders reported by ARCI this quarter. Auto racks currently comprise 3.5% of our railcar backlog as compared to 3% at this time last year and 2% at this time two years ago. Since 2004, when we began producing auto racks, we informed the investment community that we would include auto racks in our quarterly railcar unit figures. We did this in order to reconcile our revenue and profit figures with our unit counts.

For informational purposes, auto racks are super structures that are installed on top of a railcar and are manufactured on our railcar assembly lines. The pricing for auto racks is very comparable to the average sales price of other freight railcars that we manufacture.

We expect our Leasing Group to record fourth quarter operating revenues, excluding leased railcar sales, of between $165 million and $185 million, with profit from operations of between $65 million and $75 million. This results in annual operating revenues of between $685 million and $705 million, with operating profit from operations of between $320 million and $330 million. As we indicated on our last call, maintenance expense is expected to be higher in the back half of the year due to timing of the services performed.

In the fourth quarter, we expect proceeds from the sales of leased railcars from the Leasing Group of between $105 million and $315 million with profit of $35 million to $85 million. Year-to-date, the Leasing Group has reported proceeds from the sales of leased railcars of $525 million with profit of $164 million. The wide range around the fourth quarter guidance reflects the transactional nature of these sales and the potential for timing to change. Our guidance assumes we substantially fulfill our existing alliance with Element. As a reminder, sales to third parties may be recorded in the Rail and Leasing Groups. Sales of leased railcars to third parties that were recorded within the Rail Group have been $176 million year to date.

In the fourth quarter, we expect to eliminate between $400 million and $430 million of revenues and defer between $90 million and $110 million of operating profit. Year-to-date, revenue and profit eliminations were $783 million and $164 million, respectively. We expect eliminations to be higher in the fourth quarter than previously expected due to the timing of railcars sold from the lease fleet.

We expect our Energy Equipment Group to generate fourth quarter revenues of between $250 million and $275 million with operating profit of between $30 million and $35 million. These expectations result in 2015 revenues of between $1.12 billion and $1.15 billion with an operating margin of 13% to 13.5% due to productivity improvements.





We expect our Construction Products Group to record fourth quarter revenues of between $100 million and $125 million, resulting in annual revenues of between $520 million and $545 million. We expect operating profit of between $52 million and $57 million for the full year. This group continues to experience headwinds associated with uncertainty around state and federal highway funding in addition to the ongoing highway litigation. We continue to be pleased with the performance and opportunities within our aggregates businesses.

Our Inland Barge Group is expected to report fourth quarter revenues of between $135 million and $150 million, resulting in 2015 revenues of between $640 million and $655 million. Fourth quarter operating profit is expected to be between $20 million and $25 million with a full year operating margin of 18% to 18.5%.
  
Our annual EPS guidance also includes the following assumptions:
•A tax rate of approximately 33.7%;
•Corporate expenses are expected to range from $125 million to $135 million, which includes ongoing litigation-related expenses.
•The deduction of between $30 million and $35 million of non-controlling earnings due to our partial ownership in TRIP and RIV 2013;
•A reduction of 17 cents per share due to the two class method of accounting, compared to calculating Trinity’s EPS directly from the face of the income statement; and
•Dilution of approximately 6 cents per share from the convertible notes

As it pertains to cash flow, we now expect the annual net cash investment in railcars added to our lease fleet to be between $280 million and $480 million in 2015. Our guidance incorporates the range we discussed for fourth quarter proceeds from the sales of leased railcars from the Leasing Group.

Full-year manufacturing and corporate capital expenditures for 2015 are now expected to be between $200 million and $240 million.

We believe Trinity is uniquely positioned within the industrial sector compared to prior periods of economic uncertainty. Backlogs in our railcar manufacturing and wind towers businesses provide support to our production planning in 2016 and railcar manufacturing has backlog into 2020. However, as we plan for 2016, we anticipate the slowdown in the industrial economy we are currently observing to impact our businesses, especially those that have limited visibility into next year. In keeping with our normal practice, we plan to provide specific earnings guidance for 2016 when we report our fourth quarter earnings. We look forward to the opportunities ahead of us.

As we prepare for our question and answer session, please note that Theis’ remarks today pertaining to our highway litigation were very thorough. We would ask that your questions today focus on our operations and financial performance.

Our operator will now prepare us for the question and answer session.

-- Q&A Session --




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