Trinity Industries, Inc. Announces Record First Quarter 2014 Results and Increases Full Year 2014 Earnings Guidance

  Trinity Industries, Inc. Announces Record First Quarter 2014 Results and
  Increases Full Year 2014 Earnings Guidance

Business Wire

DALLAS -- April 29, 2014

Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the
first quarter ended March31, 2014, including the following significant
highlights:

  *Record quarterly earnings per common diluted share of $2.85, a 188%
    increase year-over-year
  *Record quarterly revenue and net income of $1.5 billion and $226.4
    million, respectively, a year-over-year increase of 57% and 186%,
    respectively
  *Anticipates full year 2014 earnings per common diluted share of between
    $7.00 and $7.50, compared to its previous full year 2014 earnings guidance
    of between $6.30 and $7.00
  *Rail Group receives orders for 9,625 new railcars during the first quarter
    resulting in a record backlog of 42,630 units with a record value of $5.2
    billion
  *Inland Barge Group receives orders with a value of $215 million, resulting
    in a backlog with a value of $508 million
  *Receives total proceeds of $514 million from the sale of new and existing
    leased railcars to Element Financial Corporation under the Company’s
    strategic alliance formed last December
  *Energy Equipment Group invests $118 million in three previously announced
    acquisitions of energy-related assets serving the cryogenic containers
    market and well-site and midstream production activities

Consolidated Results

Trinity Industries, Inc. reported net income attributable to Trinity
stockholders of $226.4 million, or $2.85 per common diluted share, for the
first quarter ended March31, 2014. Net income for the same quarter of 2013
was $79.1 million, or $0.99 per common diluted share, including $6.6 million,
or $0.08 per common diluted share, from discontinued operations. Revenues for
the first quarter of 2014 increased 57% to $1.5 billion compared to revenues
of $932.9 million for the same quarter of 2013. First quarter 2014 results
benefitted from a lower effective tax rate of 32.5% primarily due to certain
domestic manufacturing tax deductions, lower state taxes, and the partnership
tax status of the Company’s non-controlling interests.

“The Company sustained its positive momentum during the first quarter,
reporting a record level of net income and EPS that exceeded prior record
levels by a wide margin,” said Timothy R. Wallace, Trinity’s Chairman, CEO and
President. “During the first quarter, all of our business groups improved
their results, increasing both operating profit and margin compared to the
prior year. Since the fourth quarter of 2010, we have been successful in
extending year-over-year growth in revenue and net income. These are
tremendous accomplishments, and I am very proud of our people, whose
capabilities and hard work enabled us to realign our manufacturing capacity to
meet strong demand for our products and services that support the oil, gas,
and chemicals industries.”

Mr. Wallace added, “I am pleased with the value we are creating from the
strategic railcar leasing transactions we have completed over the last year.
Our leasing platform provides the Company with a tremendous amount of
financial flexibility, creating capital available to invest across our
portfolio of businesses and grow through acquisitions. During the first
quarter of 2014, we acquired the assets of three manufacturing companies that
provide us with important competencies as we grow our presence in the energy
markets. We will continue to invest resources to position our company for
continued growth.”

Business Group Results

In the first quarter of 2014, the Rail Group reported record revenues of
$857.4 million and a record operating profit of $167.5 million, resulting in
increases compared to the first quarter of 2013 of 37% and 63%, respectively.
The Rail Group shipped 6,890 railcars and received orders for 9,625 railcars
during the first quarter. The Rail Group backlog increased to a record $5.2
billion at March31, 2014, representing a record 42,630 railcars, compared to
a backlog of $5.0 billion as of December31, 2013, representing 39,895
railcars.

During the first quarter of 2014, the Railcar Leasing and Management Services
Group reported revenues of $443.1 million compared to revenues of $134.4
million in the first quarter of 2013. Revenues from operations, included in
total revenues, were $150.2 million for the first quarter of 2014 compared to
$134.3 million for the same quarter of 2013 with the increase resulting from
continued growth in the lease fleet, higher rental rates, and increased
utilization. The Group also recognized $292.9 million in revenue from sales of
railcars from the lease fleet owned for less than a year during the first
quarter compared to $0.1 million in the first quarter of 2013. Proceeds from
the sale of railcars from the lease fleet owned for more than a year at the
time of sale are not included in revenue.

Operating profit for the Railcar Leasing and Management Services Group was
$230.3 million for the first quarter of 2014 compared to operating profit of
$61.6 million during the first quarter of 2013. Operating profit from
operations increased for the three months ended March 31, 2014 compared to the
same period last year due to lease fleet growth, higher rental rates, and
increased utilization. Operating profit for the first quarter of 2014 included
$88.9 million of profit from railcar sales owned one year or less while the
comparable amount for the same period last year was insignificant. Operating
profit for the first quarter of 2014 also included $77.5 million of profit
from railcar sales owned more than a year totaling $224.3 million compared to
$6.8 million of profit from railcar sales owned more than a year totaling
$30.6 million for the first quarter of 2013. Included in these amounts are
$500.6 million of sales to Element Financial Corporation with an operating
profit of $161.6 million, all of which was included in the Company’s first
quarter earnings guidance provided in February.

The Inland Barge Group reported revenues of $136.9 million compared to
revenues of $147.4 million in the first quarter of 2013. Operating profit for
this Group was $26.7 million in the first quarter of 2014 compared to $24.3
million in the first quarter of 2013. The decrease in revenues compared to
last year was due to lower delivery volumes while the increase in operating
profit resulted from a more favorable product mix compared to the same quarter
last year. The Inland Barge Group received orders of $215.3 million during the
quarter, and as of March31, 2014 had a backlog of $508.0 million compared to
a backlog of $429.6 million as of December31, 2013.

The Energy Equipment Group reported revenues of $210.6 million in the first
quarter of 2014 compared to revenues of $154.7 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
acquisition-related volume from transactions completed in the first quarter of
2014. Operating profit for the first quarter of 2014 increased to $22.9
million compared to $14.9 million in the same quarter last year. The backlog
for structural wind towers as of March31, 2014 was $476.7 million compared to
a backlog of $553.9 million as of December31, 2013.

Revenues in the Construction Products Group were $113.1 million in the first
quarter of 2014 compared to revenues of $103.8 million in the first quarter of
2013. Revenues increased for the first quarter of 2014 compared to the same
period in 2013 primarily due to higher acquisition-related volumes in our
Aggregates business. The Group recorded an operating profit of $21.7 million
in the first quarter of 2014 compared to an operating profit of $7.7 million
in the first quarter of 2013. Included in the operating results for the first
quarter of 2014, and the Company’s first quarter earnings guidance provided in
February, is an $11.2 million gain from the sale of certain land held by our
Aggregates business.

Cash and Liquidity

At March31, 2014, the Company had cash and marketable securities of $788.6
million. When combined with capacity under committed credit facilities, the
Company had approximately $1.5 billion of available liquidity at the end of
the first quarter.

Share Repurchase

During the quarter, the Company repurchased approximately 138,000 shares of
common stock under its share repurchase authorization at a cost of $10.0
million leaving $240.0 million remaining under its current authorization
through December 31, 2015.

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 first quarter
was $64.08 per share compared to the conversion price in effect during the
quarter of $50.69 per share, the result of which added 1,855,019 additional
shares to the Company’s diluted share count, reducing earnings per share by
$0.06 per share. The average stock price assumption included in the Company’s
full year 2014 earnings guidance, as discussed in the next section, is $70.40,
which assumes the recent $72.50 stock price for the remainder of the year,
adding approximately 2.5 million shares to the Company’s diluted share count
and reducing full year 2014 earnings per share by approximately $0.24 per
share. The Company’s guidance assumes an annual weighted average share count
of 78 million shares.

Earnings Outlook

The Company anticipates earnings for the full year of 2014 of between $7.00
and $7.50 per common diluted share compared to its previous 2014 earnings
guidance of between $6.30 and $7.00 per share. This compares to full year
earnings per common diluted share of $4.75 in 2013. The Company’s guidance
includes a tax rate of 34.0% for the remainder of the year. 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 April30, 2014 to
discuss its first 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)
220-0118 until 11:59 p.m. Eastern on May 07, 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.



Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)

                                                     Three Months Ended
                                                       March 31,
                                                        2014       2013  
Revenues                                               $ 1,460.5     $ 932.9
Operating costs:
Cost of revenues                                         1,074.0       711.1
Selling, engineering, and administrative expenses        83.6          69.0
(Gain)/loss on disposition of property, plant, and
equipment:
Net gains on lease fleet sales                           (77.5   )     (6.8  )
Other                                                   (10.9   )    0.1   
                                                        1,069.2     773.4 
Operating profit                                         391.3         159.5
Interest expense, net                                    45.9          48.8
Other (income) expense                                  (0.4    )    (2.7  )
Income before income taxes                               345.8         113.4
Provision for income taxes                              112.5       41.2  
Net income from continuing operations                    233.3         72.2
Net gain on sale of discontinued operations              —             7.0
Net income (loss) from discontinued operations          (0.3    )    (0.4  )
Net income                                               233.0         78.8
Net income (loss) attributable to noncontrolling        6.6         (0.3  )
interest
Net income attributable to Trinity Industries,         $ 226.4      $ 79.1  
Inc.
                                                                     
Net income attributable to Trinity Industries,
Inc. per common share:
Basic
Continuing operations                                  $ 2.91        $ 0.91
Discontinued operations                                 —           0.08  
                                                       $ 2.91       $ 0.99  
Diluted
Continuing operations                                  $ 2.85        $ 0.91
Discontinued operations                                 —           0.08  
                                                       $ 2.85       $ 0.99  
Weighted average number of shares outstanding:
Basic                                                    75.1          76.9
Diluted                                                  77.0          77.0

Operating profit from sales of railcars owned one year or less at the time of
sale included in revenues and cost of revenues was $88.9 million and $0.0
million for the three months ended March31, 2014 and 2013, respectively.



Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)

                                                   Three Months Ended
                                                     March 31,
Revenues:                                             2014       2013    
Rail Group                                           $ 857.4       $ 625.5
Construction Products Group                            113.1         103.8
Inland Barge Group                                     136.9         147.4
Energy Equipment Group                                 210.6         154.7
Railcar Leasing and Management Services Group          443.1         134.4
All Other                                             23.2        19.3    
Segment Totals before Eliminations                     1,784.3       1,185.1
Eliminations - lease subsidiary                        (249.1  )     (198.0  )
Eliminations - other                                  (74.7   )    (54.2   )
Consolidated Total                                   $ 1,460.5    $ 932.9   
                                                                   
                                                     Three Months Ended
                                                     March 31,
Operating profit (loss):                              2014        2013    
Rail Group                                           $ 167.5       $ 102.9
Construction Products Group                            21.7          7.7
Inland Barge Group                                     26.7          24.3
Energy Equipment Group                                 22.9          14.9
Railcar Leasing and Management Services Group          230.3         61.6
All Other                                             (5.4    )    (2.6    )
Segment Totals before Eliminations and Corporate       463.7         208.8
Expenses
Corporate                                              (23.1   )     (16.6   )
Eliminations - lease subsidiary                        (49.3   )     (32.4   )
Eliminations - other                                  —           (0.3    )
Consolidated Total                                   $ 391.3      $ 159.5   



Trinity Industries, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)

                                                    March 31,  December 31,
                                                      2014        2013
Cash and cash equivalents                             $ 532.2     $   428.5
Short-term marketable securities                        256.4         149.7
Receivables, net of allowance                           421.4         372.7
Inventories                                             904.0         814.7
Restricted cash                                         231.4         260.7
Net property, plant, and equipment                      4,620.6       4,770.6
Goodwill                                                360.3         278.2
Other assets                                           253.9        238.3
                                                      $ 7,580.2   $   7,313.4
                                                                  
Accounts payable                                      $ 257.8     $   216.3
Accrued liabilities                                     614.7         567.4
Debt, net of unamortized discount of $70.6 and          2,940.2       2,989.8
$74.1
Deferred income                                         39.8          40.8
Deferred income taxes                                   654.6         650.7
Other liabilities                                       103.2         99.3
Stockholders' equity                                   2,969.9      2,749.1
                                                      $ 7,580.2   $   7,313.4



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

                                                 March 31,    December 31,
                                                    2014          2013
Property, Plant, and Equipment
Corporate/Manufacturing:
Property, plant, and equipment                      $ 1,464.5     $  1,418.9
Accumulated depreciation                             (764.1  )     (748.3  )
                                                     700.4        670.6   
Leasing:
Wholly-owned subsidiaries:
Machinery and other                                   10.6           10.3
Equipment on lease                                    3,304.5        3,509.1
Accumulated depreciation                             (545.5  )     (554.8  )
                                                     2,769.6      2,964.6 
Partially-owned subsidiaries:
Equipment on lease                                    1,889.1        1,887.2
Accumulated depreciation                             (215.3  )     (202.1  )
                                                     1,673.8      1,685.1 
                                                                  
Net deferred profit on railcars sold to the          (523.2  )     (549.7  )
Leasing Group
                                                    $ 4,620.6    $  4,770.6 
Leasing portfolio information:
Portfolio size (number of railcars)                   73,545         75,685
Portfolio utilization                                 99.5    %      99.5    %



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

                                               March 31,    December 31,
                                                 2014          2013
Debt
Corporate - Recourse:
Revolving credit facility                        $ —           $  —
Convertible subordinated notes                     450.0          450.0
Less: unamortized discount                        (70.6   )     (74.1   )
                                                   379.4          375.9
Other                                             0.9          0.9     
                                                  380.3        376.8   
Leasing:
Wholly-owned subsidiaries:
Recourse:
Capital lease obligations                         41.4         42.2    
                                                  41.4         42.2    
Non-recourse:
Secured railcar equipment notes                    756.9          766.6
Warehouse facility                                 133.2          152.0
Promissory notes                                  389.1        396.1   
                                                  1,279.2      1,314.7 
Partially-owned subsidiaries - Non-recourse:
Secured railcar equipment notes                   1,239.3      1,256.1 
                                                  1,239.3      1,256.1 
                                                 $ 2,940.2    $  2,989.8 



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

                                                  March 31,    December 31,
                                                    2014          2013
Leasing Debt Summary
Total Recourse Debt                                 $ 41.4        $  42.2
Total Non-Recourse Debt^(1)                          2,518.5      2,570.8 
                                                    $ 2,559.9    $  2,613.0 
Total Leasing Debt
Wholly-owned subsidiaries                           $ 1,320.6     $  1,356.9
Partially-owned subsidiaries                         1,239.3      1,256.1 
                                                    $ 2,559.9    $  2,613.0 
Equipment on Lease^(1)
Wholly-owned subsidiaries                           $ 2,769.6     $  2,964.6
Partially-owned subsidiaries                         1,673.8      1,685.1 
                                                    $ 4,443.4    $  4,649.7 
Total Leasing Debt as a % of Equipment on Lease
Wholly-owned subsidiaries                             47.7    %      45.8    %
Partially-owned subsidiaries                          74.0    %      74.5    %
Combined                                              57.6    %      56.2    %

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



Trinity Industries, Inc.
Condensed Consolidated Cash Flow Statements
(in millions)
(unaudited)

                                                     Three Months Ended
                                                       March 31,
                                                        2014      2013   
Operating activities:
Net income                                             $ 233.0      $ 78.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Income from discontinued operations                      0.3          (6.6   )
Depreciation and amortization                            55.3         50.0
Net gains on sales of railcars owned more than one       (77.5  )     (6.8   )
year at the time of sale
Other                                                    7.9          47.0
Changes in assets and liabilities:
(Increase) decrease in receivables                       (43.3  )     (22.9  )
(Increase) decrease in inventories                       (57.9  )     (26.3  )
Increase (decrease) in accounts payable and              69.2         2.7
accrued liabilities
Other                                                   18.3       (14.1  )
Net cash provided by operating activities               205.3      101.8  
Investing activities:
Proceeds from sales of railcars owned more than          224.3        30.6
one year at the time of sale
Proceeds from disposition of property, plant, and        17.2         0.6
equipment
Capital expenditures - leasing, net of sold
railcars owned one year or less with a net cost of       0.4          (166.8 )
$204.0 and $0.1
Capital expenditures - manufacturing and other           (49.1  )     (25.8  )
(Increase) decrease in short-term marketable             (106.7 )     (59.9  )
securities
Acquisitions                                             (112.6 )     (9.1   )
Other                                                   2.9        (1.2   )
Net cash required by investing activities               (23.6  )    (231.6 )
Financing activities:
Payments to retire debt                                  (53.1  )     (83.5  )
Shares repurchased                                       (12.5  )     —
Dividends paid to common shareholders                    (11.6  )     (8.7   )
Distributions to noncontrolling interest                 (5.4   )     —
(Increase) decrease in restricted cash                   4.3          7.9
Other                                                   0.3        1.6    
Net cash provided by financing activities               (78.0  )    (82.7  )
Net increase (decrease) in cash and cash                 103.7        (212.5 )
equivalents
Cash and cash equivalents at beginning of period        428.5      573.0  
Cash and cash equivalents at end of period             $ 532.2     $ 360.5  
                                                                             
                                                                             

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             Three Months Ended
                   March 31, 2014                   March 31, 2013
                   Income     Average  EPS        Income    Average  EPS
                   (Loss)      Shares               (Loss)     Shares
Net income
from               $ 233.3                          $ 72.2
continuing
operations
Less: net
income (loss)
from
continuing
operations          6.6                            (0.3 )
attributable
to
noncontrolling
interest
Net income
from
continuing
operations           226.7                            72.5
attributable
to Trinity
Industries,
Inc.
Unvested
restricted          (7.8  )                         (2.3 )
share
participation
Net income
from
continuing
operations           218.9     75.1      $ 2.91       70.2     76.9      $ 0.91
attributable
to Trinity
Industries,
Inc. - basic
Effect of
dilutive
securities:
Stock options        —         —                      —        0.1
Convertible
subordinated        0.2      1.9                   —       —
notes
Net income
from
continuing
operations         $ 219.1    77.0      $ 2.85     $ 70.2    77.0      $ 0.91
attributable
to Trinity
Industries,
Inc. - diluted
                                                                         
Net income
(loss) from
discontinued       $ (0.3  )                        $ 6.6
operations,
net of taxes
Unvested
restricted          —                              (0.2 )
share
participation
Net income
(loss) from
discontinued         (0.3  )   75.1      $ —          6.4      76.9      $ 0.08
operations,
net of taxes -
basic
Effect of
dilutive
securities:
Stock options        —         —                      —        0.1
Convertible
subordinated        —        1.9                   —       —
notes
Net income
(loss) from
discontinued       $ (0.3  )   77.0      $ —        $ 6.4     77.0      $ 0.08
operations,
net of taxes -
diluted
                                                                           
                                                                           

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
                                                            March 31,
                                                            2014      2013
                                                                       
Net income from continuing operations                       $  233.3   $ 72.2
Add:
Interest expense                                               46.3      49.2
Provision for income taxes                                     112.5     41.2
Depreciation and amortization expense                         55.3     50.0
Earnings from continuing operations before interest
expense, income taxes, and depreciation and                 $  447.4   $ 212.6
amortization expense

Contact:

Trinity Industries, Inc.
Investor Contact:
Jessica Greiner, 214-631-4420
Director of Investor Relations
or
Media Contact:
Jack Todd, 214-589-8909
 
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