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):
 
July 29, 2014

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 July 29, 2014, announcing operating results for the three and six month periods ended June 30, 2014, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On July 30, 2014, the Registrant held a conference call and web cast with respect to its financial results for the three and six month periods ended June 30, 2014. The conference call scripts of Gail M. Peck, Vice President, Finance, and Treasurer; 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, and 99.6, 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 July 29, 2014 with respect to the operating results for the three and six month periods ended June 30, 2014.
99.2 Conference call script of July 30, 2014 of Gail M. Peck, Vice President, Finance and Treasurer.
99.3 Conference call script of July 30, 2014 of Timothy R. Wallace, Chairman, Chief Executive Officer, and President.
99.4 Conference call script of July 30, 2014 of William A. McWhirter II, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Groups.
99.5 Conference call script of July 30, 2014 of D. Stephen Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups.
99.6 Conference call script of July 30, 2014 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.
 
 
 
July 30, 2014
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 July 29, 2014 with respect to the operating results for the three and six month periods ended June 30, 2014
99.2
 
Conference call script of July 30, 2014 of Gail M. Peck, Vice President, Finance and Treasurer
99.3
 
Conference call script of July 30, 2014 of Timothy R. Wallace, Chairman, Chief Executive Officer, and President.
99.4
 
Conference call script of July 30, 2014 of William A. McWhirter II, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Groups.
99.5
 
Conference call script of July 30, 2014 of D. Stephen Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups.
99.6
 
Conference call script of July 30, 2014 of James E. Perry, Senior Vice President and Chief Financial Officer.



Exh 99.1 Press Release 06.30.2014
Exhibit 99.1
NEWS RELEASE    
Investor Contact:     
Media Contact:
Jessica Greiner
Jack Todd
Director of Investor Relations
Trinity Industries, Inc.
Trinity Industries, Inc.
214/589-8909
214/631-4420
 
FOR IMMEDIATE RELEASE
  
Trinity Industries, Inc. Announces Strong Second Quarter 2014 Results and
Increases Full Year 2014 Earnings Guidance

DALLAS, Texas - July 29, 2014 - Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the second quarter ended June 30, 2014, including the following significant highlights and adjusted for the 2-for-1 stock split completed during the quarter:

•
Quarterly earnings per common diluted share of $1.01, a 94% increase year-over-year
•
Quarterly revenue and net income of $1.5 billion and $164.2 million, respectively, a year-over-year increase of 39% and 95%, respectively
•
Rail Group receives orders for 9,880 new railcars during the second quarter resulting in a record backlog of 45,350 units with a record value of $5.5 billion
•
Entered into an agreement to acquire the assets of Meyer Steel Structures, the utility steel structures division of Thomas & Betts Corporation, a member of the ABB Group, for a purchase price of approximately $600 million
•
Anticipates full year 2014 earnings per common diluted share of between $3.90 and $4.10, excluding any effect of the Meyer Steel Structures acquisition. This compares to previous full year 2014 earnings guidance of between $3.50 and $3.75

Consolidated Results
Trinity Industries, Inc. reported net income attributable to Trinity stockholders of $164.2 million, or $1.01 per common diluted share, for the second quarter ended June 30, 2014. Net income for the same quarter of 2013 was $84.0 million, or $0.52 per common diluted share. Revenues for the second quarter of 2014 increased 39% to $1.5 billion compared to revenues of $1.1 billion for the same quarter of 2013. Second quarter 2014 results benefitted from a lower effective tax rate of 32.6% primarily due to certain domestic manufacturing tax deductions, lower state taxes, and the partnership tax status of the Company’s non-controlling interests.

“I am pleased with our strong results for the second quarter and our ability to build upon the positive momentum occurring within Trinity over the last several years,” said Timothy R. Wallace, Trinity’s Chairman, CEO and President. “Consolidated revenues increased 39% year-over-year and  net earnings nearly doubled, outpacing revenue growth by a wide margin.  The amount of operating leverage we obtained and the record $6.5 billion backlog in our major businesses at the end of the second quarter were impressive.”

Mr. Wallace added, “We believe this momentum and the investments we have made in 2014 position us well. Our recently announced agreement to acquire the assets of Meyer Steel Structures is expected to close in the third quarter, subject to regulatory approval. Meyer’s strong engineering reputation, manufacturing capabilities, and products with high steel content align well with Trinity’s existing competencies and offer

1

opportunities to create additional value. The acquisition will broaden Trinity’s product portfolio and supports our vision of being a premier, diversified industrial company.”

Business Group Results
In the second quarter of 2014, the Rail Group reported record revenues of $895.6 million and a record operating profit of $176.0 million, resulting in increases compared to the second quarter of 2013 of 34% and 63%, respectively. The Rail Group shipped 7,160 railcars and received orders for 9,880 railcars during the second quarter. The Rail Group backlog increased to a record $5.5 billion at June 30, 2014, representing a record 45,350 railcars, compared to a backlog of $5.2 billion as of March 31, 2014, representing 42,630 railcars.

During the second quarter of 2014, the Railcar Leasing and Management Services Group reported revenues of $231.5 million compared to revenues of $169.6 million during the second quarter of 2013. Operating profit for this Group was $102.4 million in the second quarter of 2014 compared to operating profit of $75.7 million in the second quarter of 2013. The increase in revenues and operating profit was due to higher rental rates and utilization, lease fleet additions, and increased railcar sales from the lease fleet. During the second quarter, the Company sold $121.4 million worth of railcars to Element Financial Corporation under the program agreement announced last December with $53.5 million reported as sales of railcars owned one year or less at the time of sale and $67.9 million reported as sales from the Rail Group. Supplemental information for the Railcar Leasing and Management Services Group is provided in the following tables.

The Inland Barge Group reported revenues of $165.4 million compared to revenues of $150.0 million in the second quarter of 2013. Operating profit for this Group was $30.9 million in the second quarter of 2014 compared to $20.9 million in the second quarter of 2013. The increase in revenues and operating profit compared to the same quarter last year was due to a more favorable product mix. The Inland Barge Group received orders of $124.1 million during the quarter, and as of June 30, 2014 had a backlog of $466.7 million compared to a backlog of $508.0 million as of March 31, 2014.

The Energy Equipment Group reported record revenues of $227.6 million in the second quarter of 2014 compared to revenues of $152.5 million in the same quarter of 2013. Revenues increased compared to the same period in 2013 due to increased demand for storage containers, higher shipments of structural wind towers, and higher volumes resulting from acquisitions completed in the first quarter of 2014. Operating profit for the second quarter of 2014 increased to $28.3 million compared to $14.3 million in the same quarter last year. During the quarter, the structural wind towers business received orders totaling $213 million, extending production visibility into 2016. The backlog for structural wind towers as of June 30, 2014 was $611.3 million compared to a backlog of $476.7 million as of March 31, 2014.

Revenues in the Construction Products Group were $151.7 million in the second quarter of 2014 compared to revenues of $154.5 million in the second quarter of 2013. Revenues decreased for the second quarter of 2014 compared to the same period in 2013 primarily due to lower volumes in the Highway Products business partially offset by higher acquisition-related volumes in the Aggregates business. The Group recorded an operating profit of $22.4 million in the second quarter of 2014 compared to an operating profit of $19.0 million in the second quarter of 2013.

Cash and Liquidity
At June 30, 2014, the Company had cash and marketable securities of $933.8 million. When combined with capacity under committed credit facilities, the Company had approximately $1.5 billion of available liquidity at the end of the second quarter.


2

Share Repurchase
During the quarter, the Company repurchased approximately 63,600 shares of common stock under its share repurchase authorization at a cost of $2.5 million leaving $237.5 million remaining under its current authorization through December 31, 2015. Year to date, the Company has purchased approximately $12.5 million shares of common stock.

Convertible Notes
The Company’s $450 million convertible notes have a dilutive impact on the calculation of earnings per share when the average stock price for the quarter exceeds the conversion price. The average stock price for the second quarter was $39.37 per share compared to the conversion price in effect during the quarter of $25.31 per share, the result of which added 6.3 million additional shares to the Company’s diluted share count, reducing earnings per share by $0.04 per share.  Year to date, approximately 5.0 million shares have been added to the Company’s dilutive share count, reducing earnings per share by $0.08 per share.  The Company’s 2014 earnings guidance, as discussed in the next section, assumes an annual weighted average diluted share count of 157 million shares, which includes 6.4 million shares from the convertible notes.  The dilutive impact of the convertible notes assumes the recent $45.00 stock price for the remainder of the year and reduces full year 2014 earnings per share by approximately $0.17 per share. 

Earnings Outlook
The Company anticipates earnings for the full year of 2014 of between $3.90 and $4.10 per common diluted share compared to its previous 2014 earnings guidance of between $3.50 and $3.75 per share. This compares to full year earnings per common diluted share of $2.38 in 2013 and does not include any effects of the Meyer acquisition. Actual results may differ from present expectations, as noted below.

Conference Call
Trinity will hold a conference call at 11:00 a.m. Eastern on July 30, 2014 to discuss its second quarter results. To listen to the call, please visit the Investor Relations section of the Trinity Industries website, www.trin.net. An audio replay may be accessed through the Company’s website or by dialing (402) 220-0119 until 11:59 p.m. Eastern on August 6, 2014.

Trinity Industries, Inc., headquartered in Dallas, Texas, is a diversified industrial company that owns market-leading businesses which provide 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
June 30,
 
2014
 
2013
Revenues
$
1,485.3

 
$
1,066.1

Operating costs:
 
 
 
Cost of revenues
1,098.3

 
812.2

Selling, engineering, and administrative expenses
96.4

 
71.5

(Gain)/loss on disposition of property, plant, and equipment:
 
 
 
Net gains on lease fleet sales
(9.7
)
 
(1.2
)
Other
(1.7
)
 
0.2

 
1,183.3

 
882.7

Operating profit
302.0

 
183.4

Interest expense, net
46.2

 
46.1

Other (income) expense
(1.4
)
 
0.9

Income before income taxes
257.2

 
136.4

Provision for income taxes
83.9

 
47.2

Net income from continuing operations
173.3

 
89.2

Net gain on sale of discontinued operations
—

 
0.1

Net income (loss) from discontinued operations
(0.2
)
 
(1.1
)
Net income
173.1

 
88.2

Net income (loss) attributable to noncontrolling interest
8.9

 
4.2

Net income attributable to Trinity Industries, Inc.
$
164.2

 
$
84.0

 
 
 
 
Net income attributable to Trinity Industries, Inc. per common share:
 
 
Basic
 
 
 
Continuing operations
$
1.05

 
$
0.53

Discontinued operations
—

 
(0.01
)
 
$
1.05

 
$
0.52

Diluted
 
 
 
Continuing operations
$
1.01

 
$
0.53

Discontinued operations
—

 
(0.01
)
 
$
1.01

 
$
0.52

Weighted average number of shares outstanding:
 
 
 
Basic
151.0

 
154.0

Diluted
157.4

 
154.1


All share and per share information has been retroactively adjusted to reflect the 2-for-1 stock split completed during the quarter ended June 30, 2014.





4


Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
 
Six Months Ended
June 30,
 
2014
 
2013
Revenues
$
2,945.8

 
$
1,999.0

Operating costs:
 
 
 
Cost of revenues
2,172.3

 
1,523.3

Selling, engineering, and administrative expenses
180.0

 
140.5

(Gain)/loss on disposition of property, plant, and equipment:
 
 
 
Net gains on lease fleet sales
(87.2
)
 
(8.0
)
Other
(12.6
)
 
0.3

 
2,252.5

 
1,656.1

Operating profit
693.3

 
342.9

Interest expense, net
92.1

 
94.9

Other (income) expense
(1.8
)
 
(1.8
)
Income before income taxes
603.0

 
249.8

Provision for income taxes
196.4

 
88.4

Net income from continuing operations
406.6

 
161.4

Net gain on sale of discontinued operations
—

 
7.1

Net income (loss) from discontinued operations
(0.5
)
 
(1.5
)
Net income
406.1

 
167.0

Net income (loss) attributable to noncontrolling interest
15.5

 
3.9

Net income attributable to Trinity Industries, Inc.
$
390.6

 
$
163.1

 
 
 
 
Net income attributable to Trinity Industries, Inc. per common share:
 
 
Basic
 
 
 
Continuing operations
$
2.51

 
$
0.99

Discontinued operations
—

 
0.04

 
$
2.51

 
$
1.03

Diluted
 
 
 
Continuing operations
$
2.43

 
$
0.99

Discontinued operations
—

 
0.04

 
$
2.43

 
$
1.03

Weighted average number of shares outstanding:
 
 
 
Basic
150.5

 
154.0

Diluted
155.6

 
154.2


All share and per share information has been retroactively adjusted to reflect the 2-for-1 stock split completed during the quarter ended June 30, 2014.






5


Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
 
Three Months Ended
June 30,
Revenues:
2014
 
2013
Rail Group
$
895.6

 
$
668.0

Construction Products Group
151.7

 
154.5

Inland Barge Group
165.4

 
150.0

Energy Equipment Group
227.6

 
152.5

Railcar Leasing and Management Services Group
231.5

 
169.6

All Other
28.1

 
21.7

Segment Totals before Eliminations
1,699.9

 
1,316.3

Eliminations - lease subsidiary
(128.6
)
 
(189.5
)
Eliminations - other
(86.0
)
 
(60.7
)
Consolidated Total
$
1,485.3

 
$
1,066.1

 
 
 
 
 
Three Months Ended
June 30,
Operating profit (loss):
2014
 
2013
Rail Group
$
176.0

 
$
107.9

Construction Products Group
22.4

 
19.0

Inland Barge Group
30.9

 
20.9

Energy Equipment Group
28.3

 
14.3

Railcar Leasing and Management Services Group
102.4

 
75.7

All Other
(2.6
)
 
(3.8
)
Segment Totals before Eliminations and Corporate Expenses
357.4

 
234.0

Corporate
(29.7
)
 
(15.5
)
Eliminations - lease subsidiary
(26.9
)
 
(34.7
)
Eliminations - other
1.2

 
(0.4
)
Consolidated Total
$
302.0

 
$
183.4








6


Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
 
Six Months Ended
June 30,
Revenues:
2014
 
2013
Rail Group
$
1,753.0

 
$
1,293.5

Construction Products Group
264.8

 
258.3

Inland Barge Group
302.3

 
297.4

Energy Equipment Group
438.2

 
307.2

Railcar Leasing and Management Services Group
674.6

 
304.0

All Other
51.3

 
41.0

Segment Totals before Eliminations
3,484.2

 
2,501.4

Eliminations - lease subsidiary
(377.7
)
 
(387.5
)
Eliminations - other
(160.7
)
 
(114.9
)
Consolidated Total
$
2,945.8

 
$
1,999.0

 
 
 
 
 
Six Months Ended
June 30,
Operating profit (loss):
2014
 
2013
Rail Group
$
343.5

 
$
210.8

Construction Products Group
44.1

 
26.7

Inland Barge Group
57.6

 
45.2

Energy Equipment Group
51.2

 
29.2

Railcar Leasing and Management Services Group
332.7

 
137.3

All Other
(8.0
)
 
(6.4
)
Segment Totals before Eliminations and Corporate Expenses
821.1

 
442.8

Corporate
(52.8
)
 
(32.1
)
Eliminations - lease subsidiary
(76.2
)
 
(67.1
)
Eliminations - other
1.2

 
(0.7
)
Consolidated Total
$
693.3

 
$
342.9









7


Trinity Industries, Inc.
Leasing Group
Condensed Results of Operations
(unaudited)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
Percent
 
2014
 
2013
 
Percent
 
($ in millions)
 
Change
 
($ in millions)
 
Change
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Leasing and management
$
160.7

 
$
150.7

 
6.6
 %
 
$
310.9

 
$
285.0

 
9.1
 %
Sales of railcars owned one year or less at the time of sale
70.8

 
18.9

 
*
 
363.7

 
19.0

 
*
Total revenues
$
231.5

 
$
169.6

 
36.5

 
$
674.6

 
$
304.0

 
121.9

 
 
 
 
 
 
 
 
 
 
 
 
Operating profit:
 
 
 
 
 
 
 
 
 
 
 
Leasing and management
$
75.5

 
$
71.0

 
6.3

 
$
139.4

 
$
125.8

 
10.8

Railcar sales:
 
 
 
 
 
 
 
 
 
 
 
Railcars owned one year or less at the time of sale
17.2

 
3.5

 
 
 
106.1

 
3.5

 
 
Railcars owned more than one year at the time of sale
9.7

 
1.2

 
 
 
87.2

 
8.0

 
 
Total operating profit
$
102.4

 
$
75.7

 
35.3

 
$
332.7

 
$
137.3

 
142.3

 
 
 
 
 
 
 
 
 
 
 
 
Operating profit margin:
 
 
 
 
 
 
 
 
 
 
 
Leasing and management
47.0
%
 
47.1
%
 
 
 
44.8
%
 
44.1
%
 
 
Railcar sales
*
 
*
 
 
 
*
 
*
 
 
Total operating profit margin
44.2
%
 
44.6
%
 
 
 
49.3
%
 
45.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected expense information(1):
 
 
 
 
 
 
 
 
 
 
 
Depreciation
$
32.2

 
$
32.0

 
0.6

 
$
64.7

 
$
63.0

 
2.7

Maintenance
$
20.0

 
$
18.4

 
8.7

 
$
41.0

 
$
37.4

 
9.6

Rent
$
13.3

 
$
13.3

 
—

 
$
26.6

 
$
26.7

 
(0.4
)
Interest:
 
 
 
 
 
 
 
 
 
 
 
External
$
38.1

 
$
38.0

 
 
 
$
75.4

 
$
78.9

 
 
Intercompany
—

 
1.1

 
 
 
—

 
3.8

 
 
Total interest expense
$
38.1

 
$
39.1

 
(2.6
)
 
$
75.4

 
$
82.7

 
(8.8
)
 
June 30,
2014
 
December 31,
2013
Leasing portfolio information:
 
 
 
Portfolio size (number of railcars)
73,760

 
75,685
Portfolio utilization
99.7
%
 
99.5
%
* 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 profits 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. Intercompany interest expense is eliminated in consolidation and arises from Trinity’s previous ownership of a portion of TRIP Holdings’ Senior Secured Notes, which notes were retired in full in May 2013.



8


Trinity Industries, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
 
June 30,
2014
 
December 31,
2013
Cash and cash equivalents
$
715.3

 
$
428.5

Short-term marketable securities
218.5

 
149.7

Receivables, net of allowance
514.5

 
372.7

Inventories
1,022.5

 
814.7

Restricted cash
248.5

 
260.7

Net property, plant, and equipment
4,670.7

 
4,770.6

Goodwill
365.4

 
278.2

Other assets
258.7

 
238.3

 
$
8,014.1

 
$
7,313.4

 
 
 
 
Accounts payable
$
293.0

 
$
216.3

Accrued liabilities
517.5

 
567.4

Debt, net of unamortized discount of $67.0 and $74.1
3,242.5

 
2,989.8

Deferred income
38.8

 
40.8

Deferred income taxes
647.0

 
650.7

Other liabilities
106.7

 
99.3

Stockholders' equity
3,168.6

 
2,749.1

 
$
8,014.1

 
$
7,313.4




    




9


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


June 30,
2014
 
December 31,
2013
Property, Plant, and Equipment
 
 
 
Corporate/Manufacturing:
 
 
 
Property, plant, and equipment
$
1,520.8

 
$
1,418.9

Accumulated depreciation
(780.3
)
 
(748.3
)
 
740.5

 
670.6

Leasing:
 
 
 
Wholly-owned subsidiaries:
 
 
 
Machinery and other
10.8

 
10.3

Equipment on lease
2,985.9

 
3,509.1

Accumulated depreciation
(559.9
)
 
(554.8
)
 
2,436.8

 
2,964.6

Partially-owned subsidiaries:
 
 
 
Equipment on lease
2,259.9

 
1,887.2

Accumulated depreciation
(229.5
)
 
(202.1
)
 
2,030.4

 
1,685.1

 
 
 
 
Net deferred profit on railcars sold to the Leasing Group
(537.0
)
 
(549.7
)
 
$
4,670.7

 
$
4,770.6





10


Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
 
June 30,
2014
 
December 31,
2013
Debt
 
 
 
Corporate - Recourse:
 
 
 
Revolving credit facility
$
—

 
$
—

Convertible subordinated notes
450.0

 
450.0

Less: unamortized discount
(67.0
)
 
(74.1
)
 
383.0

 
375.9

Other
0.9

 
0.9

 
383.9

 
376.8

Leasing:
 
 
 
Wholly-owned subsidiaries:
 
 
 
Recourse:
 
 
 
Capital lease obligations
40.6

 
42.2

 
40.6

 
42.2

Non-recourse:
 
 
 
Secured railcar equipment notes
746.7

 
766.6

Warehouse facility
132.0

 
152.0

Promissory notes
382.0

 
396.1

 
1,260.7

 
1,314.7

Partially-owned subsidiaries - Non-recourse:
 
 
 
Secured railcar equipment notes
1,557.3

 
1,256.1

 
1,557.3

 
1,256.1

 
$
3,242.5

 
$
2,989.8





11


Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
 
June 30,
2014
 
December 31,
2013
Leasing Debt Summary
 
 
 
Total Recourse Debt
$
40.6

 
$
42.2

Total Non-Recourse Debt(1)
2,818.0

 
2,570.8

 
$
2,858.6

 
$
2,613.0

Total Leasing Debt
 
 
 
Wholly-owned subsidiaries
$
1,301.3

 
$
1,356.9

Partially-owned subsidiaries
1,557.3

 
1,256.1

 
$
2,858.6

 
$
2,613.0

Equipment on Lease(1)
 
 
 
Wholly-owned subsidiaries
$
2,436.8

 
$
2,964.6

Partially-owned subsidiaries
2,030.4

 
1,685.1

 
$
4,467.2

 
$
4,649.7

Total Leasing Debt as a % of Equipment on Lease
 
 
 
Wholly-owned subsidiaries
53.4
%
 
45.8
%
Partially-owned subsidiaries
76.7
%
 
74.5
%
Combined
64.0
%
 
56.2
%

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

12


Trinity Industries, Inc.
Condensed Consolidated Cash Flow Statements
(in millions)
(unaudited)
 
Six Months Ended
June 30,
 
2014
 
2013
Operating activities:
 
 
 
Net income
$
406.1

 
$
167.0

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Income from discontinued operations
0.5

 
(5.6
)
Depreciation and amortization
111.0

 
102.4

Net gains on sales of railcars owned more than one year at the time of sale
(87.2
)
 
(8.0
)
Other
(19.9
)
 
59.7

Changes in assets and liabilities:
 
 
 
(Increase) decrease in receivables
(136.5
)
 
3.0

(Increase) decrease in inventories
(176.4
)
 
(37.4
)
Increase (decrease) in accounts payable and accrued liabilities
52.6

 
16.8

Other
7.2

 
(24.3
)
Net cash provided by operating activities
157.4

 
273.6

Investing activities:
 
 
 
Proceeds from sales of railcars owned more than one year at the time of sale
242.1

 
39.1

Proceeds from disposition of property, plant, and equipment
21.0

 
0.1

Capital expenditures - leasing, net of sold railcars owned one year or less with a net cost of $257.6 and $15.5
(49.5
)
 
(308.5
)
Capital expenditures - manufacturing and other
(107.5
)
 
(57.4
)
(Increase) decrease in short-term marketable securities
(68.8
)
 
(59.9
)
Acquisitions
(118.8
)
 
(37.2
)
Other
0.3

 
(1.1
)
Net cash required by investing activities
(81.2
)
 
(424.9
)
Financing activities:
 
 
 
Payments to retire debt
(90.1
)
 
(177.4
)
Proceeds from issuance of debt
332.1

 
—

Shares repurchased
(17.5
)
 
(40.2
)
Dividends paid to common shareholders
(23.2
)
 
(17.4
)
Purchase of shares to satisfy employee tax on vested stock
(38.1
)
 
(9.0
)
Proceeds from sale of interests in partially-owned leasing subsidiaries
—

 
294.9

Repurchase of noncontrolling interest
—

 
(84.0
)
Contributions from noncontrolling interest
49.6

 
—

Distributions to noncontrolling interest
(12.3
)
 
—

(Increase) decrease in restricted cash
(12.8
)
 
(3.8
)
Other
22.9

 
3.2

Net cash provided (required) by financing activities
210.6

 
(33.7
)
Net increase (decrease) in cash and cash equivalents
286.8

 
(185.0
)
Cash and cash equivalents at beginning of period
428.5

 
573.0

Cash and cash equivalents at end of period
$
715.3

 
$
388.0




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. All share and per share information has been retroactively adjusted to reflect the 2-for-1 stock split completed during the quarter ended June 30, 2014.
 
Three Months Ended
June 30, 2014
 
Three Months Ended
June 30, 2013
 
Income (Loss)
 
Average Shares
 
EPS
 
Income (Loss)
 
Average
Shares
 
EPS
Net income from continuing operations
$
173.3

 
 
 
 
 
$
89.2

 
 
 
 
Less: net income from continuing operations attributable to noncontrolling interest
8.9

 
 
 
 
 
4.2

 
 
 
 
Net income from continuing operations attributable to Trinity Industries, Inc.
164.4

 
 
 
 
 
85.0

 
 
 
 
Unvested restricted share participation
(5.5
)
 
 
 
 
 
(2.7
)
 
 
 
 
Net income from continuing operations attributable to Trinity Industries, Inc. - basic
158.9

 
151.0

 
$
1.05

 
82.3

 
154.0

 
$
0.53

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options
—

 
0.1

 
 
 
—

 
0.1

 
 
  Convertible subordinated notes
0.2

 
6.3

 
 
 
—

 
—

 
 
Net income from continuing operations attributable to Trinity Industries, Inc. - diluted
$
159.1

 
157.4

 
$
1.01

 
$
82.3

 
154.1

 
$
0.53

 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from discontinued operations, net of taxes
$
(0.2
)
 
 
 
 
 
$
(1.0
)
 
 
 
 
Unvested restricted share participation
—

 
 
 
 
 
—

 
 
 
 
Net income (loss) from discontinued operations, net of taxes - basic
(0.2
)
 
151.0

 
$
—

 
(1.0
)
 
154.0

 
$
(0.01
)
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options
—

 
0.1

 
 
 
—

 
0.1

 
 
  Convertible subordinated notes
—

 
6.3

 
 
 
—

 
—

 
 
Net income (loss) from discontinued operations, net of taxes - diluted
$
(0.2
)
 
157.4

 
$
—

 
$
(1.0
)
 
154.1

 
$
(0.01
)
 
Six Months Ended
June 30, 2014
 
Six Months Ended
June 30, 2013
 
Income (Loss)
 
Average Shares
 
EPS
 
Income (Loss)
 
Average
Shares
 
EPS
Net income from continuing operations
$
406.6

 
 
 
 
 
$
161.4

 
 
 
 
Less: net income from continuing operations attributable to noncontrolling interest
15.5

 
 
 
 
 
3.9

 
 
 
 
Net income from continuing operations attributable to Trinity Industries, Inc.
391.1

 
 
 
 
 
157.5

 
 
 
 
Unvested restricted share participation
(13.3
)
 
 
 
 
 
(5.0
)
 
 
 
 
Net income from continuing operations attributable to Trinity Industries, Inc. - basic
377.8

 
150.5

 
$
2.51

 
152.5

 
154.0

 
$
0.99

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options
—

 
0.1

 
 
 
—

 
0.2

 
 
  Convertible subordinated notes
0.4

 
5.0

 
 
 
—

 
—

 
 
Net income from continuing operations attributable to Trinity Industries, Inc. - diluted
$
378.2

 
155.6

 
$
2.43

 
$
152.5

 
154.2

 
$
0.99

 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from discontinued operations, net of taxes
$
(0.5
)
 
 
 
 
 
$
5.6

 
 
 
 
Unvested restricted share participation
—

 
 
 
 
 
(0.2
)
 
 
 
 
Net income (loss) from discontinued operations, net of taxes - basic
(0.5
)
 
150.5

 
$
—

 
5.4

 
154.0

 
$
0.04

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options
—

 
0.1

 
 
 
—

 
0.2

 
 
  Convertible subordinated notes
—

 
5.0

 
 
 
—

 
—

 
 
Net income (loss) from discontinued operations, net of taxes - diluted
$
(0.5
)
 
155.6

 
$
—

 
$
5.4

 
154.2

 
$
0.04


14


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

“EBITDA” is defined as income (loss) from continuing operations 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 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
June 30,
 
2014
 
2013
 
 
 
 
Net income from continuing operations
$
173.3

 
$
89.2

Add:
 
 
 
Interest expense
46.9

 
46.5

Provision for income taxes
83.9

 
47.2

Depreciation and amortization expense
55.7

 
52.4

Earnings from continuing operations before interest expense, income taxes, and depreciation and amortization expense
$
359.8

 
$
235.3


 
Six Months Ended
June 30,
 
2014
 
2013
 
 
 
 
Net income from continuing operations
$
406.6

 
$
161.4

Add:
 
 
 
Interest expense
93.2

 
95.7

Provision for income taxes
196.4

 
88.4

Depreciation and amortization expense
111.0

 
102.4

Earnings from continuing operations before interest expense, income taxes, and depreciation and amortization expense
$
807.2

 
$
447.9

 
 
 
 



- END -

15
Exh 99.2 Peck


Exhibit 99.2
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Gail M. Peck
Vice President, Finance and Treasurer
July 30, 2014

Thank you, Keith. Good morning everyone. Welcome to the Trinity Industries’ second quarter 2014 results conference call. I'm Gail Peck, Vice President, Finance and Treasurer of Trinity. Thank you for joining us today.

Following the introduction you will hear from Tim Wallace our Chairman, Chief Executive Officer and President. After Tim, our business group leaders will provide overviews of the businesses within their respective groups. Our speakers are:

•Bill McWhirter, Senior Vice President and Group President of the Construction Products, Energy Equipment, and Inland Barge Groups; and

•Steve Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups

Following their comments, James Perry, our Senior Vice President and Chief Financial Officer, will provide the financial summary and guidance. 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 Tim Wallace for his comments.

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 August 6, 2014. The access number is (402) 220-0119. 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.



Exh 99.3 Wallace


Exhibit 99.3
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Timothy R. Wallace
Chairman, Chief Executive Officer, and President
July 30, 2014

Thank you, Gail and good morning everyone.

I am pleased with our financial results for the second quarter. Our businesses continue to do an outstanding job of driving operating leverage and efficiencies to the bottom line. We are also continuing to make great progress in the business development area. In late June, we announced an agreement to purchase the assets of Meyer Steel Structures from Thomas & Betts Corporation. This transaction demonstrates our commitment to strengthening our portfolio of diversified industrial companies.

Our Rail Group generated strong financial results in the 2nd quarter and increased its order backlog to a new record level. Our Rail businesses continue to make investments that expand their operating flexibility and capacity to respond to various market conditions.

Our Railcar Leasing and Management Services Group delivered another quarter of solid operating results. In addition, this group continued to execute railcar transactions that enhanced profitability and generated cash.

I am pleased with our Inland Barge Group’s financial performance during the 2nd quarter. The profitability of our Construction Products Group improved during the 2nd quarter compared to the same period last year.

Our Energy Equipment Group continues to show improved financial performance. I am pleased with the progress we are making integrating the three businesses we acquired in the first quarter. We are optimistic about the long term opportunities for growth in the cryogenic industry.

Trinity remains uniquely positioned to provide a variety of transportation and storage products to the oil, gas, and chemicals industries. Once we complete our acquisition of Meyer, Trinity’s utility structure business will be positioned as a leader in this industry. We are continuing to review acquisition opportunities in the energy and infrastructure markets that have products, services, technology, and competencies that will enrich our portfolio of industrial manufacturing businesses.

Trinity’s financial performance during the 2nd quarter, along with our pending acquisition of Meyer, represents additional progress toward attaining our corporate vision of being a premier diversified industrial company. Over the short term, our goals are to continue operating our company on lean principles while providing superior products and services to our customers. We are focused on creating shareholder value through a variety of organic improvement and growth initiatives as well as identifying manufacturing acquisition opportunities. We expect to continue to conduct railcar leasing and other asset transactions that provide earnings and generate cash.

Trinity’s future remains bright. Our financial health is strong, and we have a great deal of positive momentum occurring within our company.

I’ll now turn it over to Bill for his comments.



Exh 99.4 McWhirter


Exhibit 99.4
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
July 30, 2014

Thank you Tim and good morning everyone.

We are pleased with the recently announced agreement to purchase the assets of Meyer Steel Structures, which is proceeding through the regulatory review process and is expected to close in the third quarter, pending approval.

The acquisition of Meyer provides Trinity a market-leading position in the North American utility steel structures market. Meyer’s strong engineering reputation, manufacturing capabilities, and products with high steel content align well with Trinity’s existing competencies and offer enrichment opportunities to create additional value. We are optimistic about the long-term outlook for infrastructure investment in North America for electricity transmission and distribution. Reliability concerns, increasing need for renewable energy interconnections, congestion, and government oversight are all important long-term demand drivers. Over the next decade, we also expect Mexico will continue to develop and expand its infrastructure. Combining Meyer with Trinity’s existing capabilities positions us well to serve this market.

During the second quarter, the Energy Equipment Group set another record for quarterly revenue, and increased its operating profit by 98% over the second quarter of last year. Revenues and profit increased primarily due to higher shipments of storage containers serving the energy sector, as well as higher deliveries and improved operational performance in our wind tower business. During the quarter, we received $213 million in wind tower orders, resulting in a backlog of $611 million at the end of the quarter. Our production visibility in the wind tower business now extends into 2016. I am pleased with the progress we are making integrating our recently acquired companies within this Group.

We continue to invest resources to identify and pursue opportunities to add new businesses to our industrial portfolio that expand our reach in the markets we are pursuing, enhance our competencies, and complement our product offerings.

Moving to our Construction Products Group

Revenue was relatively flat as compared to the same quarter last year. A more favorable product mix drove an increase in operating margin to 13.1% during the second quarter after excluding a $2.6 million gain reported this year resulting from the early retirement of certain acquisition-related liabilities. This compares favorably with a margin of 12.3% in last year’s second quarter. I am pleased with the performance of this Group considering conditions in the highway business remain challenging due to uncertainty regarding the upcoming expiration of the Federal Highway Bill.

We continue to see strong demand in the Texas construction market, which is a good indicator of overall demand for our aggregates business. We also increased our U.S. galvanizing capacity and geographic reach during the quarter with a small acquisition of an additional facility in West Texas.





We are currently defending the company in a False Claims Act complaint related to our Highway products business. The trial began on July 14 and ended in a mistrial on July 18 of this year. The company intends to vigorously defend itself against the allegations. Our second quarter 10Q, which will be filed this morning, will provide more information on the matter.

Moving to our Inland Barge Group

During the second quarter, the Inland Barge Group reported a 48% year-over-year increase in operating profit primarily resulting from a change in product mix. We received orders totaling approximately $124 million in the quarter, resulting in a backlog of $467 million at the end of the quarter. Our production visibility in this business stretches into 2015.

We are optimistic that inquiries for hopper barges will increase as stronger exports of corn, wheat, and soy beans, as well as the replenishment of coal stockpiles for the summer cooling season, are expected to increase barge traffic along the inland water ways. The outlook for the fall harvest is also very good.

Demand drivers for tank barges continue to be favorable, with backlogs in the industry stretching into 2015. Barge operators have absorbed a significant amount of new equipment into their fleets while maintaining high utilization levels. As infrastructure investments in the energy sector are completed, we expect additional expansion in downstream markets, resulting in rising shipments of chemical and petrochemical commodities. We expect the need for additional barge equipment to increase as a result.

I am pleased with our Barge Group’s ability to respond to various demand drivers and generate efficiencies within the plants. This group’s operational flexibility is a key differentiator, enabling us to enhance profitability and respond to our customers’ needs.

At this time, I will turn the presentation over to Steve.



Exh 99.5 Menzies


Exhibit 99.5
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of D. Stephen Menzies
Senior Vice President and Group President
Rail and Railcar Leasing Groups
July 30, 2014

Thank you, Bill, good morning!

I am very pleased with the strong momentum in our Rail and Leasing Groups. Our focus and execution continue to enhance TrinityRail’s position as a premier provider of railcar products and services and are responsible for our record financial performance during the second quarter. This is a very exciting time for TrinityRail. Railcar demand is broadening, fleet replacement opportunities are beginning to materialize, and demand catalysts from the North American energy renaissance remain strong. Our business is growing, and our integrated manufacturing and leasing platforms are responding effectively to increasing railcar demand.

North American industry railcar orders in the quarter were very strong and reflected a particularly healthy mix of freight car orders. The 33,900 railcars ordered during the 2nd quarter drove the industry backlog to its highest level in the last 25 years. The current backlog approximates 100,000 railcars representing approximately 6 quarters of industry production at current rates. During the second quarter, TrinityRail received orders for 9,880 new railcars including tank cars, covered hoppers, and auto racks with orders received from railroads, 3rd party lessors and industrial shippers. Our orders during the quarter align very well with our production plans. Our backlog increased to 45,350 railcars with a record value of approximately $5.5 billion. Order inquiry levels continue to be steady thus far in the 3rd quarter and reflect continuing demand for a wide variety of freight cars. Order inquiries for tank cars remain steady but some order activity for tank cars for flammable commodity service is on hold pending new regulatory standards. However, with extended production backlogs, some customers are beginning to place orders with us recognizing that with our production flexibility we will be able to amend their tank car building specifications to the most current regulatory standards at the time of production.

We continue to closely monitor the regulatory actions of PHMSA, the U.S. Department of Transportation, and Transport Canada with respect to changes in railcar designs for tank cars in flammable service. As you may be aware, over the last few weeks, both the U.S. Department of Transportation and Transport Canada took meaningful steps within their respective regulatory review processes toward making changes impacting the transportation of crude oil, ethanol and other flammable products. While we are gaining additional insights into the direction of new regulations, there is still a great deal of uncertainty and the regulatory processes still have much further to go before final new rules are issued. We continue to study both regulator’s actions, directives and comments and we will continue to be engaged in the industry’s dialogue.

In anticipation of the new regulations, we are making preparations to build to newly developed tank car proposed specifications as well as to potentially modify existing tanks cars in flammable service. TrinityRail is a leader in railcar design, railcar production, and customer service. Our team will be well-prepared to manage the eventual regulatory outcome and help ensure that our customers’ railcar fleets, as well as our own lease fleet, comply with industry safety standards.

We are actively investing capital in our Rail business in response to growth opportunities, as we expect demand to increase as a result of the new tank car regulations and continued favorable industry fundamentals across all railcar types.  I am pleased with the progress we are making to incorporate our flexible manufacturing




asset base into our Georgia facility, positioning it to be a multi-product railcar production facility.  In addition, we are making other investments in our production facilities to enhance our operating flexibility. During the quarter, we also continued to invest in our maintenance services business by acquiring a facility in Arkansas. We expect this facility will be in operation by year end and be well positioned to support market reaction to revised tank car regulations. And we are expanding capacity at our other 4 maintenance services facilities to enhance our ability to support increased tank car maintenance requirements and potential modifications of our lease fleet and the fleets of key industrial shippers.

Our Rail Group produced our 6th consecutive record quarter for operating profit. I am very pleased with our improvement in operating margins, although, we anticipate some margin headwinds in the second half of the year due to product mix changes, and start-up costs from our investments in manufacturing and maintenance services facilities. Our record $5.5 billion order backlog, comprised of a broad product mix with increasingly better pricing across most railcar types, positions us to realize benefits from extended production runs into 2015 and 2016.

During the second quarter, the Rail Group delivered 7,160 railcars bringing our year-to-date total to just over 14,000. As a result of the orders received in the quarter and further production increases, our 2014 unit deliveries are now expected to be in the range of 28,500 to 29,500, an increase from our previous guidance range of 27,500 to 29,000. This range of deliveries represents a new record level of production.

During the second quarter, our Leasing Group took delivery of approximately 1,280 new railcars. Our total lease fleet portfolio, including partially-owned subsidiaries, now stands at approximately 73,760 railcars. At the end of the quarter, 20% of the units in our railcar order backlog - with a total value of $1.1 billion - were committed to customers of our leasing business.

During the second quarter, our Leasing Group earned record operating profit from operations due to strong market fundamentals and new additions to our wholly-owned lease fleet. Fewer existing, idle railcars, extended production backlogs for both tank and freight cars and rising railcar prices are driving strong lease renewal rate increases across most railcar types. Our lease fleet utilization at the end of the second quarter was 99.7%, up from 98.7% last year. I am very pleased with our sustained high level of fleet utilization and the strong renewal rate increases that our team continues to achieve each quarter.

We continue to sell railcars from our lease fleet to manage portfolio diversification and to generate cash when market conditions are favorable. Selling railcars from our lease portfolio to institutional investors is an important strategy for TrinityRail. Portfolio sales also provide opportunities to serve institutional investors seeking investment in leased railcars, in addition to, serving our industrial shipper customers with leasing services. As we originate a lease, we have the flexibility to retain it in our wholly-owned fleet, share in the investment with third party equity investors like RIV 2013, or sell the railcar with a lease while continuing to manage the railcar and the lessee commercial relationship as we are doing with Element Financial. We are in conversations with a number of institutional investors looking to make investment in leased railcars. Having access to diverse sources of debt and equity capital provides the financial flexibility to grow the leasing business in addition to generating capital for Trinity’s portfolio of industrial companies. We have had considerable success in growing our Leasing platform and expanding our access to capital to support our lease origination capability. During the last twelve months, our Leasing Group has originated approximately $1 billion in new railcar leases as a result of its strong lease origination platform.

I continue to be very pleased with the operating performance and achievements of our Rail and Leasing Groups. The focused efforts of our dedicated TrinityRail team to build upon our operating and financial flexibility will continue to drive strong performance levels of our businesses. The investments we are making




position us to benefit from the strong market dynamics and pending resolution of tank car regulatory uncertainty.

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




Exh 99.6 Perry


Exhibit 99.6
Trinity Industries, Inc.
Earnings Release Conference Call
Comments of James E. Perry
Senior Vice President and Chief Financial Officer
July 30, 2014

Thank you, Steve and good morning everyone.

Yesterday, we announced strong results for the second quarter of 2014, with revenue of nearly $1.5 billion and earnings per share of $1.01, compared with our revenues and EPS of $1.1 billion and $0.52 during the second quarter of 2013. Please recall that we completed a 2-for-1 stock split in June, so all figures have been adjusted accordingly.

Our tax rate for the second quarter was 32.6%, which was lower than the guidance of 34% for the final three quarters of 2014 that we provided on our last conference call. This was primarily due to the benefits of certain domestic manufacturing deductions, lower state taxes, and the partnership tax status of our non-controlling interests.

The Company’s convertible notes had a dilutive impact of $0.04 to EPS during the second quarter. Please refer to the EPS schedule provided in our press release yesterday for the dilution calculation.

In the second quarter, we recorded approximately $2 million of one-time costs at the Corporate level related to the pending asset purchase of Meyer Steel Structures, which we expect to close during the third quarter.

During the second quarter, we also announced the successful completion of the $1.1 billion leasing joint venture initially formed in May 2013. The joint venture’s acquisition of approximately $388 million worth of railcars substantially utilized all of the remaining equity capital that was committed last year by TILC and our co-investors, including Napier Park, to form RIV 2013 and complete the recapitalization of TRIP. Our partially-owned subsidiaries, RIV 2013 and TRIP, now own a combined portfolio of approximately $2.0 billion in leased railcars.

During the second quarter, we repurchased 63,600 shares of our common stock in the open market for a total cost of $2.5 million. Year to date, we have repurchased $12.5 million of common stock, which leaves $237.5 million available under our current program through the end of 2015 for additional stock purchases. We review a number of factors in establishing the level of share repurchase that we make. We strive to allocate our capital in ways that will increase shareholder value.

I will now discuss our current outlook for the remainder of 2014. As provided in our press release yesterday, our guidance for 2014 annual EPS is $3.90 to $4.10, which compares favorably to our prior guidance of $3.50 to $3.75. We have solid earnings expectations for each of our business segments in 2014. The new guidance level reflects the strong results in the first half of the year, additional orders received for production in 2014, and higher levels of efficiencies in many of our production facilities. Note that our annual EPS and Energy Equipment Group guidance do not include any impact from the Meyer asset purchase due to uncertainty with respect to the timing of closing, as well as certain accounting analysis that will be completed following the closing.





Our current EPS guidance for 2014 assumes a weighted average diluted share count of 157 million shares, which includes 6.4 million shares from the convertible notes. The dilutive impact assumes the recent $45.00 stock price for the remaining two quarters and reduces earnings by approximately $0.17 per share.

In 2014, we expect our Rail Group to generate revenues of $3.6 billion to $3.75 billion with an operating margin of 18% to 19%. We will have some margin headwinds in the second half of the year due to product mix changes as well as start-up and ramp-up costs at certain manufacturing and maintenance services facilities.

We expect our Leasing Group to record operating revenue of $620 million to $635 million, with operating profit from operations of $270 million to $285 million. In 2014, we also expect the Leasing Group to sell approximately $665 million to $690 million of leased railcars from the lease fleet, of which $425 million to $450 million will be recorded as revenues. The total operating profit associated with these sales is expected to range between $205 million and $215 million.

We expect our Construction Products Group to record revenues of $540 million to $565 million with an operating margin of 13% to 14.5%. Our Inland Barge Group is expected to have revenues of $640 million to $660 million with an operating margin of 16.5% to 17.5%. We expect our Energy Equipment Group to produce revenues of $880 million to $910 million with an operating margin of 11.5% to 12.5%.

Corporate expenses are expected to range from $100 million to $110 million for the year, as a result of our growing business operations and acquisitions, as well as certain legal expenses.

For 2014, we expect to eliminate between $720 million and $745 million of revenue and defer between $130 million and $140 million of operating profit, due to the addition of new railcars to the wholly- and partially-owned lease fleets. This guidance range also includes certain Rail Group sales to the Leasing Group that are ultimately sold to Element. We expect between $310 million and $330 million of revenue eliminations for other intercompany transactions.

We expect to deduct between $30 million and $35 million of non-controlling earnings in 2014 due to our ownership in TRIP and RIV 2013. As we have indicated on previous earnings calls, TRIP and RIV 2013’s partnership tax status results in no taxes applied to the amount of non-controlling earnings deducted from Trinity’s income statement.

For the purpose of the calculation of guidance EPS, we are assuming a tax rate of 33% for the remainder of 2014.

As a reminder, we are required to report EPS using the two class method of accounting, the result of which should be the reduction of EPS attributable to Trinity by approximately 14 cents per share for the full year 2014 on a split-adjusted basis, compared to calculating Trinity’s EPS directly from the face of the income statement. This is included in our EPS guidance as well.

Our full-year guidance ranges reflect year-over-year revenue growth of approximately 30% to 35%, with earnings per share growth of approximately 60% to 70% compared to 2013. As it pertains to cash flow, we do not expect the net investment in new railcars for 2014 to consume any cash, due to expected proceeds received from leased railcar sales during the year. Full-year manufacturing and corporate capital expenditures for 2014 are expected to be between $250 million and $300 million.

We remain very pleased with the focused dedication of our employees who are working hard to deliver high quality earnings and growth during 2014. We continue to seek both internal and external growth




opportunities for future years. The Meyer asset purchase is a great example of our acquisition strategy, and we believe our balance sheet, expected cash flow, and access to the capital markets, if needed, provide us with sufficient resources to pursue additional growth. We are also confident that our team will continue to be successful identifying opportunities and integrating acquisitions into our portfolio while maintaining a premier level of performance in our existing businesses.

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

-- Q&A Session --