Slide 1: Q4 2023 Earnings Conference Call Supplemental Materials
TRINITY INDUSTRIES, INC. Q4 2023 – Earnings Conference Call Supplemental Materials February 22, 2024 – based on financial results as of December 31, 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 Q4-23 Conference Call
Key Messages from Q4-23 Conference Call Full year revenue up 51% year over year, reflecting significantly stronger performance Continued strength in lease rates; FLRD +23.7%, utilization 97.5% Full year adjusted EPS from continuing operations of $1.38*, up $0.44 year over year Introducing 2024 EPS g
Slide 4: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview (1) (2) Rail Traffic is Improving Overall Fleet Storage Rates are Low 750,000 35% 30% 625,000 25% 20% 500,000 15% 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Jan-20 Sep-20 May-21 Jan-22 Sep-22 May-23 Jan-24 2021 2022 2023 2024 Five-Year Average Stora
Slide 5: Q4-23 Financial Results Summary – Year over Year
Q4-23 Financial Results Summary – Year over Year Q4-23 Revenue Q4-23 Cash Flow, Continuing Ops $798M $93M +35% $+31M Q4-23 EPS, Q4-23 Adjusted (1) Adjusted* Free Cash Flow * $0.82 $(21)M +86% $(159)M (1) Q4 2023 Adjusted Free Cash Flow reflects higher cash from operations offset by lower lease portf
Slide 6: FY23 Financial Results Summary – Year over Year
FY23 Financial Results Summary – Year over Year FY23 Revenue FY23 Cash Flow, Continuing Ops $3.0B $309M +51% $+300M FY23 EPS, FY23 Adjusted Adjusted* Free Cash Flow* $1.38 $29M +47% $(110)M * See appendix for reconciliation of non-GAAP measures 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) ◦ Fleet utilization of 97.5%, renewal success rate of $250 60% 73% ◦ FLRD remains strong at +23.7% (in millions) 40% ◦ Revenue higher year over year due to improved
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 Sustainable Growth Optimization Improvement Received UP Sustainability Partner Award; recognized by Remain disciplined in pricing CN for s
Slide 9: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue Improved Year over Year Q4 2023 Financial Summary: $900 $1.00 Income Statement: • Total revenues of $798M reflect higher external (in millions) railcar deliveries and improved lease rates • Earnings per share from continuing operations of $450 $0.
Slide 10: 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 Recourse Debt Unencumbered Railcars Cash & Equivalents $795M @ ~6.2% (1) $374M $106M Non-recourse Debt • Pledge to warehouse Revolver Availability $5.0B @ ~4.2% (1)
Slide 11: Management Outlook for Business Performance
Management Outlook for Business Performance FY 2024 Summary Detail Does not include sustainable railcar Industry Deliveries Approximately 40K conversions Deliveries to our lease fleet offset Net Fleet Investment $300M — $400M by secondary market sales Manufacturing and Investments in automation, Gen
Slide 12: Key Messages from Q4-23 Conference Call
Key Messages from Q4-23 Conference Call Full year revenue up 51% year over year, reflecting significantly stronger performance Continued strength in lease rates; FLRD +23.7%, utilization 97.5% Full year adjusted EPS from continuing operations of $1.38*, up $0.44 year over year Introducing 2024 EPS g
Slide 13: Trinity Q4-23 Earnings Conference Call Q&A
Trinity Q4-23 Earnings Conference Call Q&A DELIVERING GOODS for THE GOOD of ALL /// 13
Slide 14: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Three Months Ended December 31, 2023 (in millions, except per share amounts) Selling, engineering, Gains on and dispositions administrative (1) of property (2) – Interest (3) GAAP expenses other expense, net Adjusted Operating profit $ 148.7 $ 2.0 $ (1.4) $
Slide 15: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Year Ended December 31, 2023 (in millions, except per share amounts) Selling, engineering, Gains on and dispositions Interest administrative (1) of property (2) – Restructuring expense, (3) GAAP expenses other activities, net net Adjusted Operating profit $
Slide 16: Reconciliation: Walking Adjusted FCF Beyond Lease Investment
Reconciliation: Walking Adjusted FCF Beyond Lease Investment FY 2021 FY 2022 Q4-23 FY 2023 (in millions) (1) Net cash provided by operating activities – continuing operations $ 615.6 $ 9.2 $ 93.2 $ 309.0 Proceeds from lease portfolio sales 454.3 750.7 136.0 381.8 Capital expenditures – manufacturing
Slide 17: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE December 31, December 31, December 31, 2023 2022 2021 ($ in millions) Numerator: Income from continuing operations $ 140.0 $ 98.9 $ 39.3 Provision (benefit) for income taxes 9.0 27.6 15.9 Income from continuing operations before income taxes 149.0 126.5 55.2
Slide 18: 2023 Segment Results: As Reported and As Recast
2023 Segment Results: As Reported and As Recast As Reported (Unaudited) As Recast (Preliminary and Unaudited) Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 (1) Railcar Leasing and Services Group Revenues $ 203.5 $ 223.2 $ 222.6 $ 221.6 $ 870.9 $ 232.9 $ 268.3 $ 261.7 $ 278.1 $1,041
Slide 19: 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 – February 1, 2024 (3) Future Lease Rate Differential (FLRD) calculates the implied change in lease rates for railcar le