Trinity Industries, Inc. Reports Strong Growth In Second Quarter Of 2012 And Increases Full Year 2012 Earnings Guidance

Conference Call

Trinity will hold a conference call at 11:00 a.m. Eastern on July 26, 2012 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 [phone] until 11:59 p.m. Eastern on August 2, 2012.

Trinity Industries, Inc., headquartered in Dallas, Texas, is a multi-industry company that owns a variety of market-leading businesses which provide products and services to the industrial, energy, transportation, 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,” 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 “Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the most recent fiscal year.

Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
		Three Months Ended June 30,
			2012				2011
Revenues (1)		$	1,028.4			$	708.3
Operating costs:
Cost of revenues			821.4				568.9
Selling, engineering, and administrative expenses			56.0				47.5
(Gain)/loss on disposition of property, plant, and equipment:
Net gains on lease fleet sales (1)			(1.6	)			(0.4	)
Other			(2.3	)			(3.1	)
			873.5				612.9
Operating profit			154.9				95.4
Interest expense, net			47.6				43.4
Other (income) expense			(0.0	)			(0.6	)
Income before income taxes			107.3				52.6
Provision for income taxes			39.8				21.0
Net income			67.5				31.6
Net income (loss) attributable to noncontrolling interest			(0.3	)			1.6
Net income attributable to Trinity Industries, Inc.		$	67.8			$	30.0
Net income attributable to Trinity Industries, Inc. per common share:
Basic		$	0.84			$	0.37
Diluted		$	0.84			$	0.37
Weighted average number of shares outstanding:
Basic			77.7				77.4
Diluted			77.9				77.7

(1) In 2011, the Company adopted the emerging industry policy of recognizing sales of railcars from the lease fleet which have been owned by the lease fleet for more than one year as a net gain or loss from the disposal of a long-term asset. Proceeds from the sales of railcars owned more than one year at the time of sale were $7.6 million and $2.2 million for the three months ended June 30, 2012 and 2011, respectively. There is no change in accounting treatment for sales of railcars from the lease fleet which have been owned by the lease fleet for one year or less which continue to be reported in revenues and cost of revenues. Operating profit from sales of railcars owned one year or less at the time of sale was $13.5 million and $3.0 million for the three months ended June 30, 2012 and 2011, respectively. Prior year reported amounts have been reclassified to conform to this policy.

Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
		Six Months Ended June 30,
			2012				2011
Revenues (1)		$	1,953.7			$	1,342.5
Operating costs:
Cost of revenues			1,577.9				1,069.2
Selling, engineering, and administrative expenses			109.9				97.8
(Gain)/loss on disposition of property, plant, and equipment:
Net gains on lease fleet sales (1)			(5.3	)			(1.5	)
Other			(6.1	)			(3.9	)
			1,676.4				1,161.6
Operating profit			277.3				180.9
Interest expense, net			95.1				87.6
Other (income) expense			(3.0	)			(1.1	)
Income before income taxes			185.2				94.4
Provision for income taxes			65.4				37.2
Net income			119.8				57.2
Net income (loss) attributable to noncontrolling interest			(0.9	)			3.0
Net income attributable to Trinity Industries, Inc.		$	120.7			$	54.2
Net income attributable to Trinity Industries, Inc. per common share:
Basic		$	1.50			$	0.68
Diluted		$	1.50			$	0.67
Weighted average number of shares outstanding:
Basic			77.7				77.2
Diluted			77.9				77.5

(1) In 2011, the Company adopted the emerging industry policy of recognizing sales of railcars from the lease fleet which have been owned by the lease fleet for more than one year as a net gain or loss from the disposal of a long-term asset. Proceeds from the sales of railcars owned more than one year at the time of sale were $34.1 million and $12.2 million for the six months ended June 30, 2012 and 2011, respectively. There is no change in accounting treatment for sales of railcars from the lease fleet which have been owned by the lease fleet for one year or less which continue to be reported in revenues and cost of revenues. Operating profit from sales of railcars owned one year or less at the time of sale was $16.4 million and $3.0 million for the six months ended June 30, 2012 and 2011, respectively. Prior year reported amounts have been reclassified to conform to this policy.

Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
		Three Months Ended June 30,
Revenues:			2012				2011
Rail Group		$	516.9			$	280.7
Construction Products Group			156.8				149.3
Inland Barge Group			173.9				117.8
Energy Equipment Group			130.7				117.5
Railcar Leasing and Management Services Group (1)			194.2				128.2
All Other			20.8				14.3
Eliminations – lease subsidiary			(132.3	)			(79.5	)
Eliminations – other			(32.6	)			(20.0	)
Consolidated Total		$	1,028.4			$	708.3
		Three Months Ended June 30,
Operating profit (loss):			2012				2011
Rail Group		$	53.0			$	15.4
Construction Products Group			15.2				16.1
Inland Barge Group			36.6				19.1
Energy Equipment Group			4.0				1.2
Railcar Leasing and Management Services Group (1)			76.4				59.7
All Other			(6.3	)			(0.2	)
Corporate			(9.6	)			(8.4	)
Eliminations – lease subsidiary			(12.2	)			(7.1	)
Eliminations – other			(2.2	)			(0.4	)
Consolidated Total		$	154.9			$	95.4

(1) In 2011, the Company adopted the emerging industry policy of recognizing sales of railcars from the lease fleet which have been owned by the lease fleet for more than one year as a net gain or loss from the disposal of a long-term asset. There is no change in accounting treatment for sales of railcars from the lease fleet which have been owned by the lease fleet for one year or less which continue to be reported in revenues and cost of revenues. Prior year reported amounts have been reclassified to conform to this policy.

Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
		Six Months Ended June 30,
Revenues:			2012				2011
Rail Group		$	984.0			$	500.5
Construction Products Group			311.8				282.9
Inland Barge Group			343.3				255.7
Energy Equipment Group			255.7				236.2
Railcar Leasing and Management Services Group (1)			336.5				248.0
All Other			36.5				27.4
Eliminations – lease subsidiary			(254.9	)			(164.9	)
Eliminations – other			(59.2	)			(43.3	)
Consolidated Total		$	1,953.7			$	1,342.5
		Six Months Ended June 30,
Operating profit (loss):			2012				2011
Rail Group		$	93.1			$	24.7
Construction Products Group			26.0				24.4
Inland Barge Group			66.6				40.8
Energy Equipment Group			0.2				11.7
Railcar Leasing and Management Services Group (1)			142.9				114.4
All Other			(5.1	)			(0.5	)
Corporate			(21.2	)			(19.1	)
Eliminations – lease subsidiary			(23.1	)			(15.2	)
Eliminations – other			(2.1	)			(0.3	)
Consolidated Total		$	277.3			$	180.9

(1) In 2011, the Company adopted the emerging industry policy of recognizing sales of railcars from the lease fleet which have been owned by the lease fleet for more than one year as a net gain or loss from the disposal of a long-term asset. There is no change in accounting treatment for sales of railcars from the lease fleet which have been owned by the lease fleet for one year or less which continue to be reported in revenues and cost of revenues. Prior year reported amounts have been reclassified to conform to this policy.

Trinity Industries, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
		June 30, 2012			December 31, 2011
Cash and cash equivalents		$	294.1		$	351.1
Receivables, net of allowance			334.9			384.3
Income tax receivable			5.2			1.6
Inventories			649.9			549.9
Restricted cash			218.9			240.3
Net property, plant, and equipment			4,251.2			4,179.5
Goodwill			226.6			225.9
Other assets			216.7			188.4
		$	6,197.5		$	6,121.0
Accounts payable		$	234.6		$	207.4
Accrued liabilities			394.1			421.3
Debt, net of unamortized discount of $93.8 and $99.8			2,910.5			2,974.9
Deferred income			37.9			38.7
Deferred income taxes			504.5			434.7
Other liabilities			87.7			95.7
Stockholders’ equity			2,028.2			1,948.3
		$	6,197.5		$	6,121.0

Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
		June 30,2012				December 31,2011
Property, Plant, and Equipment
Corporate/Manufacturing:
Property, plant, and equipment		$	1,252.8			$	1,242.8
Accumulated depreciation			(749.1	)			(732.8	)
			503.7				510.0
Leasing:
Wholly-owned subsidiaries:
Machinery and other			9.5				9.6
Equipment on lease			3,561.1				3,429.3
Accumulated depreciation			(422.6	)			(372.9	)
			3,148.0				3,066.0
TRIP Holdings:
Equipment on lease			1,271.3				1,257.7
Accumulated depreciation			(137.3	)			(122.7	)
			1,134.0				1,135.0
Net deferred profit on railcars sold to the Leasing Group:
Sold to wholly-owned subsidiaries			(349.7	)			(344.5	)
Sold to TRIP Holdings			(184.8	)			(187.0	)
			(534.5	)			(531.5	)
		$	4,251.2			$	4,179.5
Leasing portfolio information:
Portfolio size (number of railcars):
Wholly-owned subsidiaries			56,220				54,595
TRIP Holdings			14,470				14,350
Total fleet			70,690				68,945
Portfolio utilization:
Wholly-owned subsidiaries			99.0	%			99.3	%
TRIP Holdings
			99.8	%			99.9	%
Total fleet			99.1	%			99.5	%

Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
		June 30, 2012				December 31, 2011
Debt
Corporate/Manufacturing – Recourse:
Revolving credit facility		$	—			$	—
Convertible subordinated notes			450.0				450.0
Less: unamortized discount			(93.8	)			(99.8	)
			356.2				350.2
Other			5.7				4.2
			361.9				354.4
Leasing:
Wholly-owned subsidiaries:
Recourse:
Capital lease obligations			47.2				48.6
Term loan			52.4				54.7
			99.6				103.3
Non-recourse:
Secured railcar equipment notes			824.7				842.0
Warehouse facility			291.4				308.5
Promissory notes			452.6				465.5
			1,568.7				1,616.0
TRIP Holdings — Non-recourse:
Senior secured notes			170.0				170.0
Less: Held by Trinity			(108.8	)			(108.8	)
			61.2				61.2
Secured railcar equipment notes			819.1				840.0
			880.3				901.2
		$	2,910.5			$	2,974.9

Trinity Industries, Inc.
Additional Balance Sheet Information
(in millions)
(unaudited)
		June 30, 2012				December 31, 2011
Leasing Debt Summary
Total Recourse Debt		$	99.6			$	103.3
Total Non-Recourse Debt (1)			2,449.0				2,517.2
		$	2,548.6			$	2,620.5
Total Leasing Debt
Wholly-owned subsidiaries		$	1,668.3			$	1,719.3
TRIP Holdings (1)			880.3				901.2
		$	2,548.6			$	2,620.5
Equipment on Lease (2)
Wholly-owned subsidiaries		$	3,148.0			$	3,066.0
TRIP Holdings			1,134.0				1,135.0
		$	4,282.0			$	4,201.0
Total Leasing Debt as a % of Equipment on Lease
Wholly-owned subsidiaries			53.0	%			56.1	%
TRIP Holdings			77.6	%			79.4	%
Combined			59.5	%			62.4	%
(1) Excludes $108.8 million in TRIP Holdings’ Senior Secured Notes owned by Trinity and eliminated in consolidation. (2) Excludes net deferred profit on railcars sold to the Leasing Group

Trinity Industries, Inc.

Earnings per Share Calculation

(in millions, except per share amounts)

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