Trinity Industries, Inc. · NYSE:TRN
Trinity Industries — Investor Presentation (May 2018)
30 slides from Trinity Industries's investor presentation, May 7, 2018
Slide 1: Investor Presentation May 2018
Exhibit 99.1 Investor Presentation May 2018 Investor Contact: TrinityInvestorRelations@trin.net Website: www.trin.net
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: Agenda
Agenda I. Trinity Industries, Inc. Overview Today II. Overview and Rationale for Planned Spin-off III. Spin-off Timeline and Progress Report IV. Appendix 3
Slide 4: Trinity Industries, Inc. Overview Today
I. Trinity Industries, Inc. Overview Today • Trinity Industries, Inc. is a diversified industrial company that owns complementary market-leading businesses providing products and services to the energy, chemical, agriculture, transportation, and construction sectors • Trinity operates through five b
Slide 5: Leading Market Positions in North America
Leading Market Positions in North America Rail Group Leading manufacturer of railcars Leading manufacturer of railcar axles Leading manufacturer of railcar coupling devices Railcar Leasing and Leading provider of railcar leasing and management Management Services services Group Inland Barge
Slide 6: Diversified Portfolio of Businesses
Diversified Portfolio of Businesses PAST (FY 2000) Elevating Our Financial Performance PRESENT (LTM 03/18) Total Revenues = $2.7 B Total Revenues = $3.6 B Calendar Year EPS $5.50 $4.50 Revenue $3.50 Revenue $2.50 $1.50 $0.50 0% 13% -$0.50 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2
Slide 7: Flexible and Cost-Effective Manufacturing
Flexible and Cost-Effective Manufacturing Flexibility Trinity's manufacturing flexibility across products enhances our ability to opportunistically respond to changes in market demand Cost-Effective Trinity’s manufacturing scale, vertical integration, and presence in the Southern U.S. and Mexico pro
Slide 8: Seasoned Performer Across Market Conditions
Seasoned Performer Across Market Conditions . Incorporated in 1933 with a strong corporate culture and commitment to Company values . Seasoned management team knows how to assess the market, proactively plan for cycles and quickly adapt to changing market conditions . Cost-effective and flexible man
Slide 9: Healthy Financial Position to Complete Spin-off
Healthy Financial Position to Complete Spin-off As of 03/31/18 Balance Sheet Debt ~ $3.3 B(1) Recourse Debt Working Capital Senior Notes(1) $400 Convertible Subordinated Notes(1, 3) 449 Capital Leasing Obligations(1) 27 Total Recourse $876 mm Maintain a Non-Recourse Leasing Debt(2) Capital Warehouse
Slide 10: Financial Highlights
Financial Highlights Trinity’s EPS Summary FY 2009 – LTM 03/18(3) LTM 03/18 vs. LTM 03/17(1) $6.00 . Revenues decreased 15.4% to $3.62 billion from $4.28 $5.08 $5.00 billion $4.19 $4.00 . Operating profit decreased 23.7% to $405.1 million from (2) $3.00 $530.7 million $2.38 $2.25 . EBITDA decreased
Slide 11: FY 2018 Guidance and Outlook
FY 2018 Guidance and Outlook (As of April 26, 2018) Total EPS: ~ $0.95 - $1.20 EPS, excluding spin-off transaction costs: ~ $1.20 - $1.40 Corporate expense, excluding spin-off transaction costs: ~ $130 - $150mm Total Company Spin-off transaction costs: ~ $30 - $35mm Tax rate, excluding spin-off tran
Slide 12: II. Overview and Rationale for Planned Spin-Off
II. Overview and Rationale for Planned Spin-Off 12
Slide 13: Spin-off of Infrastructure-Related Businesses
Spin-off of Infrastructure-Related Businesses • On December 12, 2017, Trinity Industries announced a plan to pursue the spin-off of its infrastructure-related businesses to shareholders • Transaction is expected to result in two separate public companies that will benefit from: – Leading positions i
Slide 14: Strategic Rationale
Strategic Rationale • Enhances Overall Growth Potential through Focused Companies – New infrastructure company to focus on growing market opportunity in North American infrastructure spending – Trinity Industries to operate industry-leading integrated rail leasing, manufacturing, and services busine
Slide 15: CEO / CFO Management Teams post Spin-Off
CEO / CFO Management Teams post Spin-Off Management-Trinity Industries Management-Infrastructure Company . Current CEO/CFO to remain in place following the spin-off . Antonio Carrillo has accepted the future role of President and CEO of new Infrastructure Company . Timothy R. Wallace, Trinity’s Chai
Slide 16: Anticipated Alignment of Businesses post Spin-off
Anticipated Alignment of Businesses post Spin-off Trinity Industries, Inc. (post spin-off) Infrastructure Company Rail Leasing and Management Rail Manufacturing and Construction Products Transportation Products Services Maintenance Services ■ TrinityRail® leasing services ■ Tank and freight railcars
Slide 17: Trinity Industries, Inc. (post Spin-off)
Trinity Industries, Inc. (post Spin-off) • Trinity will be comprised primarily of our rail-related businesses • The spin-off maintains the benefits of TrinityRail®’s integrated business model and its expansive market platforms • As the premier provider of rail products and services, offers an unpara
Slide 18: Infrastructure Company Positioned for Success
Infrastructure Company Positioned for Success • New growth-oriented company that provides critical infrastructure products for a broad spectrum of markets throughout construction, energy, and transportation markets • Strong market positions with established reputations for quality and service • Well
Slide 19: III. Spin-off Timeline and Progress Report
III. Spin-off Timeline and Progress Report Announcement • Continued analysis and planning December 2017 • Refinement of new corporate and organizational structures • Form 10 filing and SEC review process • Organization preparation • IRS private letter ruling on tax-free status of transaction • Final
Slide 20: Separation Progress Report
Separation Progress Report (As of 4/26/18) • Internal Separation Planning Teams identified, project plans defined, and teams working well to execute anticipated spin-off in the fourth quarter of 2018 • CEO/CFO announcements of both companies announced in January – Continued progress of reorganized s
Slide 21: IV. Appendix
IV. Appendix 21
Slide 22: Rail Group Market Positioning
Rail Group Market Positioning Current Performance(4) . LTM 03/18 deliveries and orders totaling 20,350 and 16,635 railcars, . Leading manufacturer of railcars, railcar axles, and coupling respectively; represents 42% and 37% of LTM 03/18 industry deliveries and devices in North America orders, respe
Slide 23: Railcar Leasing & Management Services Group
Railcar Leasing & Management Services Group Market Positioning Current Performance . Leading provider of comprehensive railcar leasing and . Solid financial performance during LTM 03/18 driven by lease fleet management services growth, higher asset management advisory fees, and disciplined cost mana
Slide 24: Construction Products Group
Construction Products Group Market Positioning Current Performance . Leading U.S. manufacturer of highway guardrail, crash . LTM 03/18 revenues declined primarily due to lower volumes in cushions, and other protective barriers highway products, partially offset by increased acquisition-related volum
Slide 25: Energy Equipment Group
Energy Equipment Group Market Positioning Current Performance . Leading manufacturer of wind towers, steel utility Wind Towers and Utility Structures: structures, storage and distribution containers in North . Backlog of $810 million for wind towers and utility structures as of America 03/18 provide
Slide 26: Inland Barge Group
Inland Barge Group Market Positioning Current Performance . Revenues and profit down significantly again in LTM 03/18 . Leading manufacturer of inland barges and fiberglass barge versus recent historic levels due to a substantial decline in covers in the United States barge deliveries and a weak pri
Slide 27: Reconciliation of EBITDA
Reconciliation of EBITDA (1)(2) (in millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 LTM 03/18 Income (loss) from continuing operations ($140.8) $69.4 $146.8 $251.9 $386.1 $709.3 $826.0 $364.7 $713.6 $703.5 Add: Interest expense 123.1 182.1 185.3 194.7 187.3 193.4 194.7 181.9 184.0 185.3 Provi
Slide 28: Reconciliation of PBT Margin – Railcar Leasing and Management Services Group
Reconciliation of PBT Margin – Railcar Leasing and Management Services Group (in millions except for PBT Margin) 2009 2010 2011 2012 2013 2014 2015 2016 2017 LTM 03/18 From Leasing Operations: Revenue $ 329 $ 461 $ 493 $ 529 $ 587 $ 632 $ 700 $ 701 $ 744 $ 739 Operating Profit $ 129 $ 200 $ 225 $ 24
Slide 29: Footnotes
Footnotes Slide 4 (1) Intersegment Revenues are eliminated and Leasing Revenues include revenues related to TRIP Holdings beginning in FY 2010; CPG Revenues for prior years have also been adjusted as a result of the divestiture of its Concrete business in March 2013 (2) FY 2009 EPS excludes a $325 m
Slide 30: Footnotes (Continued)
Footnotes (Continued) Slide 22 (1) Before eliminations for Intersegment Sales to Leasing and Intercompany Profit (2) Excludes $325 million pretax charge for impairment of Goodwill; reported FY 2009 operating loss margin was 39.8% (3) Sources: Historical data as reported per the Railway Supply Instit
Trinity Industries — Investor Presentation (May 2018) on 6ix