Contingencies |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Contingencies | Contingencies East Palestine, OH Train Derailment As previously disclosed, on February 3, 2023, a Norfolk Southern Railway freight train derailed 38 railcars in East Palestine, Ohio. TILC has been named in various actions associated with this incident, including Josh Hickman, et al. v. Norfolk Southern Railway Co., et al., Case No. 2025 CV 00434, in the Court of Common Pleas, Columbiana County, Ohio ("Hickman Matter"); and Richard Tsai, et al. v. Norfolk Southern Corporation, et al., Case No. 2025 CV 614, in the Court of Common Pleas, Columbiana County, Ohio ("Tsai Matter"). The Hickman and Tsai Matters have been consolidated, and the court has denied TILC’s motions to dismiss in those matters. TILC was the owner of one tank car cited in these actions, which was leased to a third party, who is also a defendant in these matters. The Company believes it has substantial defenses and intends to vigorously defend itself against all allegations in the third-party and direct claims asserted against TILC. The Company or its subsidiaries could be named in similar litigation involving other plaintiffs, but the ultimate number of claims and the jurisdiction(s) in which such claims, if any, may be filed may vary. We do not believe at this time that a loss is probable in these matters, nor can a range of possible losses be determined. Accordingly, no accrual or range of loss has been included in the accompanying Consolidated Financial Statements. The Company maintains liability insurance coverage and commercial contractual indemnity rights to protect the Company’s assets from losses arising from these types of litigation claims. Highway Products Litigation Pursuant to the purchase and sale agreement related to the sale of THP, the Company agreed to indemnify the buyer for certain liabilities related to the highway products business, including those liabilities resulting from or arising out of ET Plus systems or specified ET Plus component parts that are both (i) manufactured prior to December 31, 2021, and (ii) sold in the United States on or prior to April 30, 2022, or related warranty obligations with respect thereto. As previously disclosed, Mr. Joshua Harman filed a state qui tam action pursuant to the Virginia Fraud Against Taxpayers Act ("VFATA") (Commonwealth of Virginia ex rel. Joshua M. Harman v. Trinity Industries, Inc. and Trinity Highway Products, LLC, Case No. CL13-698, in the Circuit Court, Richmond, Virginia). Mr. Harman alleged the Company violated the VFATA pertaining to sales of the ET Plus, and he sought damages, civil penalties, attorneys’ fees, costs, and interest. On February 7, 2024, the trial court granted the Company's motion for summary judgment. On March 31, 2026, the Court of Appeals of Virginia issued its memorandum opinion affirming the order of the trial court granting summary judgment in favor of the Company and affirmed the trial court’s denial of Mr. Harman’s and the Commonwealth of Virginia’s motion for reconsideration. On June 1, 2026, Mr. Harman filed his Petition for Appeal with the Virginia Supreme Court. On August 24, 2026, the Virginia Supreme Court dismissed Mr. Harman’s appeal as untimely and denied Mr. Harman’s motion for extension of time to file and serve his notice of appeal, leaving the summary judgment in favor of the Company in place. The denial of Mr. Harman's petition ends this action. Antidumping and Countervailing Duty Proceedings On September 30, 2026, UTLX Manufacturing LLC (“UTLX”) filed a petition with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“ITC”) seeking antidumping and countervailing duties on imports from Mexico of certain railway tank cars and parts thereof, including tank and underframe subassemblies (Commerce Case Nos. A-201-872 and C-201-873; ITC Inv. Nos. 701-TA-809 and 731-TA-1810 (Preliminary)). The ITC instituted preliminary antidumping and countervailing duty investigations effective September 30, 2026. Commerce has extended the deadline for determining whether to initiate antidumping and countervailing duty investigations by 20 days, and its determination remains pending. The petition identifies the Company, together with another producer of tank cars from Mexico, as participants in the market for the covered products. The petitions allege, among other things, that certain tank cars imported from Mexico are being sold in the United States at less than fair value, that Mexican producers benefit from countervailable subsidies, and that such imports have caused, and threaten to cause, material injury to the U.S. tank car industry. The petitions allege dumping margins ranging from 12.70% to 32.58%. These petitioner-alleged dumping margins are not duty rates determined by Commerce and do not include any countervailing duty rate. The Company intends to participate actively in the ongoing ITC investigation and any initiated investigations before Commerce and to vigorously defend its interests. Although the Company believes the petitions are without merit, the Company cannot predict the outcome of these proceedings or the amount or timing of any duties that may be imposed in the future on subject merchandise from Mexico. These proceedings, including any resulting cash deposit requirements, antidumping duties, countervailing duties, or other trade restrictions, could adversely affect the Company's business, results of operations, financial condition, and cash flows. Based on information currently available, the Company has not recorded an accrual for this matter. The Company is unable to reasonably estimate the possible loss or range of loss, if any, at this stage of the proceedings. Other matters The Company is involved in claims and lawsuits incidental to our business arising from various matters, including product warranty, personal injury, environmental issues, workplace laws, and various governmental regulations. The Company evaluates its exposure to such claims and suits periodically and establishes accruals for these contingencies when a range of loss can be reasonably estimated. The range of reasonably possible losses for such matters is $14.6 million to $26.0 million, which includes our rights to indemnity and recourse to third parties of approximately $1.5 million, which is recorded in other assets in our Consolidated Balance Sheets as of September 30, 2026. At September 30, 2026, total accruals of $15.3 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets. The Company believes any additional liability would not be material to its financial position or results of operations. Trinity is subject to remedial orders and federal, state, local, and foreign laws and regulations relating to the environment and the workplace. The Company has reserved $1.0 million to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such matters, taking into account currently available information and our contractual rights to indemnification and recourse to third parties. However, estimates of liability arising from future proceedings, assessments, or remediation are inherently imprecise. Accordingly, there can be no assurance that we will not become involved in future litigation or other proceedings involving the environment and the workplace or, if we are found to be responsible or liable in any such litigation or proceeding, that such costs would not be material to the Company. We believe that we are currently in substantial compliance with environmental and workplace laws and regulations.
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