Slide 1: Q2 2023 Earnings Conference Call Supplemental Materials
TRINITY INDUSTRIES, INC. Q2 2023 – Earnings Conference Call Supplemental Materials August 1, 2023 – based on financial results as of June 30, 2023 Investor Contact: TrinityInvestorRelations@trin.net Website: www.trin.net DELIVERING GOODS for THE GOOD of ALL
Slide 2: Forward Looking Statements
Forward Looking Statements Some statements in this presentation, 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, intent
Slide 3: Key Messages from Q2-23 Conference Call
Key Messages from Q2-23 Conference Call Continued strength in lease rates; FLRD +29.5%, utilization 97.9% Revenues of $722 million, 73% improvement year over year EPS from continuing operations of $0.23, up $0.16 sequentially and $0.09 YoY on an adjusted basis Expect 2023 EPS of $1.35 to $1.45 due t
Slide 4: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview (1) (2) Intermodal is Driving Down Rail Traffic Overall Fleet Storage Rates are Low 750,000 35% 30% 25% 625,000 20% 15% 500,000 Jan- May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 20 20 20 21 21 21 22 22
Slide 5: Q2-23 Financial Results Summary – Year over Year
Q2-23 Financial Results Summary – Year over Year Q2-23 Revenue Q2-23 Cash Flow, Continuing Ops $722M $38M +73% $+128M Q2-23 EPS, Q2-23 Adjusted Adjusted* Free Cash Flow* $0.23 $45M +64% $+50M * See appendix for reconciliation of non-GAAP measures DELIVERING GOODS for THE GOOD of ALL /// 5
Slide 6: Trinity Business Segment Performance Trends
Trinity Business Segment Performance Trends Leasing Segment Revenue Drivers Leasing Operations Revenue and Operating Profit Margin (1) ◦ Fleet utilization of 97.9%, renewal success rate of $250 60% 91% ◦ FLRD remains strong at +29.5% (in millions) 40% ◦ Revenue higher due to improved lease rates and
Slide 7: Executing on Strategic Initiatives to Improve Pre-Tax ROE
Executing on Strategic Initiatives to Improve Pre-Tax ROE Lower Cost of Capital | Reduce Cyclicality | Improve Rail Supply Chain Balance Sheet Manufacturing Cost Sustainable Growth Optimization Improvement LTV of 65.1% Continued focus on lower Published 2022 CSR breakeven points Report, and tied exe
Slide 8: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue and EPS Improved Year over Year Q2 2023 Financial Summary: $750 $0.50 Income Statement: • Total revenues of $722M reflect higher external (in millions) railcar deliveries and improved lease rates $500 • Earnings per share from continuing operation
Slide 9: Healthy Balance Sheet Strategically Positioned for Opportunistic Deployment and Value Creation
Healthy Balance Sheet Strategically Positioned for Opportunistic Deployment and Value Creation LIQUIDITY DEBT STRUCTURE CAPITAL LEVERS Cash & Equivalents Recourse Debt Unencumbered Railcars (1) $92M $794M @ ~6.2% $292M Revolver Availability Non-recourse Debt • Pledge to warehouse (1) $477M $5.0B @ ~
Slide 10: Capital Allocation: Management Outlook for Business Performance
Management Outlook for Business Performance FY 2023 Summary Detail Does not include sustainable railcar Industry Deliveries Approximately 45K conversions Supports 3 year net fleet Net Fleet Investment $250M — $350M investment target of $500M — $600M Manufacturing and Investments in safety, efficienc
Slide 11: Key Messages from Q2-23 Conference Call
Key Messages from Q2-23 Conference Call Continued strength in lease rates; FLRD +29.5%, utilization 97.9% Revenues of $722 million, 73% improvement year over year EPS from continuing operations of $0.23, up $0.16 sequentially and $0.09 YoY on an adjusted basis Expect 2023 EPS of $1.35 to $1.45 due t
Slide 12: Trinity Q2-23 Earnings Conference Call Q&A
Trinity Q2-23 Earnings Conference Call Q&A DELIVERING GOODS for THE GOOD of ALL /// 12
Slide 13: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Three Months Ended June 30, 2023 (in millions, except per share amounts) Selling, engineering, and administrative Restructuring Interest (2) (1) GAAP expenses activities, net expense, net Adjusted Operating profit $ 99.1 $ 2.0 $ (1.8) $ — $ 99.3 Income from
Slide 14: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Six Months Ended June 30, 2023 (in millions, except per share amounts) Selling, engineering, Gains on and dispositions Interest administrative of property – Restructuring expense, (1) (2) (3) GAAP expenses other activities, net net Adjusted Operating profit
Slide 15: Reconciliation: Walking Adjusted FCF Beyond Lease Investment
Reconciliation: Walking Adjusted FCF Beyond Lease Investment Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 (in millions) Net cash provided by (used in) operating activities – continuing $ (89.8) $ 8.7 $ 61.8 $ 102.5 $ 37.8 operations Proceeds from lease portfolio sales 144.1 299.6 235.9 56.7 129.0 Capital expenditu
Slide 16: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE LTM December 31, December 31, June 30, 2023 2022 2021 ($ in millions) Numerator: Income from continuing operations $ 112.8 $ 98.9 $ 39.3 Provision for income taxes 14.7 27.6 15.9 Income from continuing operations before income taxes 127.5 126.5 55.2 Net (inc
Slide 17: Footnotes and Reconciliations
Footnotes and Reconciliations Slide 4 - Rail Market Update and Commercial Overview (1) Association of American Railroads (AAR) Weekly Railcar Loadings (2) AAR Rail Time Indicators – July 1, 2023 (3) Future Lease Rate Differential (FLRD) calculates the implied change in lease rates for railcar leases