Slide 1: Trinity Industries, Inc. Q4 2021 Earnings Conference Call Supplemental Material
TRINITY INDUSTRIES, INC. Q4 2021 – Earnings Conference Call Supplemental Material February 17, 2022 – based on financial results as of December 31, 2021 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 Q4-21 Conference Call
Key Messages from Q4-21 Conference Call Continued economic recovery expected in 2022 Fleet utilization returned to pre-pandemic levels Returned $895M to shareholders in 2021 Divestiture of highway products business complete DELIVERING GOODS for THE GOOD of ALL /// 3
Slide 4: Q4-21 Financial Results Summary – Year over Year
Q4-21 Financial Results Summary – Year over Year Q4-21 Revenue $472M +31% Q4-21 EPS, Q4-21 Free Adjusted* Cash Flow* $0.08 $28M $+0.10 * See appendix for reconciliation of non-GAAP measures DELIVERING GOODS for THE GOOD of ALL /// 4
Slide 5: FY21 Financial Results Summary – Year over Year
FY21 Financial Results Summary – Year over Year FY21 Revenue FY21 Cash Flow, Continuing Ops $1.5B $616M -13% -1% FY21 EPS, FY21 Free Cash Adjusted* Flow* $0.34 $539M $+0.18 $+450M * See appendix for reconciliation of non-GAAP measures DELIVERING GOODS for THE GOOD of ALL /// 5
Slide 6: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview Rail Traffic is Continuing to Improve (1) Railcars are Coming out of Storage (2) Fleet Utilization and Rates are Improving Rail Products Orders Improve Year-over-Year See appendix for footnotes DELIVERING GOODS for THE GOOD of ALL /// 6
Slide 7: Trinity Business Segment Performance Trends
Trinity Business Segment Performance Trends Leasing Segment Revenue Drivers Leasing Operations Revenue and Operating Profit Margin (1) ◦ Revenue slightly down quarter over quarter ◦ Renewal rate of 79% highest since 2014 ◦ FLRD improved to 2.2% Leasing Margin Performance Drivers ◦ Operating margin h
Slide 8: 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 Business Optimization Optimization Improvement Repurchased 13.9M shares in Continue focus on lower the fourth quarter Divestiture of Trini
Slide 9: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue Reflects Improving Market Dynamics Q4 2021 Financial Summary: Income Statement: • Total revenues of $472M reflect higher external railcar deliveries • Earnings from continuing operations of $0.16 ◦ Adjusted EPS of $0.08* • Sequential earnings decl
Slide 10: Reconciliation of Consolidated and Highway Products Results
Reconciliation of Consolidated and Highway Products Results The unaudited table below is provided for informational purposes to illustrate the 2021 financial results to include THP, excluding the gain on sale and litigation charge Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 (in millions, except per shar
Slide 11: 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 $167M $399M @ 4.6%(1) $876M Revolver Availability Non-recourse Debt • Pledge to warehouse $177M $4.8B @ ~2.9%(
Slide 12: Management Outlook for Business Performance / Capital Allocation
Management Outlook for Business Performance FY 2022 Summary Detail Does not include sustainable railcar Industry Deliveries 40K – 50K railcars conversions; expect Trinity to maintain historic market share Assumes sales in our RIV program Net Fleet Investment $450M — $550M consistent with 2021 Manufa
Slide 13: Key Messages from Q4-21 Conference Call
Key Messages from Q4-21 Conference Call Continued economic recovery expected in 2022 Fleet utilization returned to pre-pandemic levels Returned $895M to shareholders in 2021 Divestiture of highway products business complete DELIVERING GOODS for THE GOOD of ALL /// 13
Slide 14: Trinity Q4-21 Earnings Conference Call Q&A
Trinity Q4-21 Earnings Conference Call Q&A DELIVERING GOODS for THE GOOD of ALL /// 14
Slide 15: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Three Months Ended December 31, 2021 (in millions, except per share amounts) Gains on dispositions Income tax Pension plan of property – Restructuring effect of GAAP settlement (1) other (1)(2) activities, net (1) CARES Act Adjusted Operating profit (loss)
Slide 16: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Year Ended December 31, 2021 (in millions, except per share amounts) Loss on Loss on Income Gains on extinguishment extinguishment tax dispositions Restructuring of debt – of debt – effect of of property activities, Controlling Noncontrolling Pension plan C
Slide 17: Reconciliation: Walking FCF Beyond Lease Investment
Reconciliation: Walking FCF Beyond Lease Investment FY 2019 FY 2020 Q4-21 FY 2021 (in millions) Net cash provided by operating activities – continuing operations $ 365.4 $ 622.0 $ 196.8 $ 615.6 Proceeds from lease portfolio sales * 205.7 138.7 49.8 454.3 Adjusted Net Cash Provided by Operating Activ
Slide 18: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE December 31, December 31, December 31, 2021 2020 2019 ($ in millions) Numerator: Income (loss) from continuing operations $ 39.3 $ (250.5) $ 122.4 Provision (benefit) for income taxes 15.9 (274.1) 58.8 Income (loss) from continuing operations before income t
Slide 19: Footnotes and Reconciliations
Footnotes and Reconciliations Slide 6 - Rail Market Update and Commercial Overview (1) Association of American Railroads (AAR) Weekly Railcar Loadings (2) AAR Rail Time Indicators – February 1, 2022 (3) Future Lease Rate Differential (FLRD) calculates the weighted average of the most current quarter