Trinity Industries, Inc. · NYSE:TRN
Trinity Industries — Investor Presentation (August 2018)
31 slides from Trinity Industries's investor presentation, Aug 6, 2018
Slide 1: Investor Presentation August 2018
Exhibit 99.1 Investor Presentation August 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 Barg
Slide 6: Diversified Portfolio of Businesses
Diversified Portfolio of Businesses PAST (FY 2000) Elevating Our Financial Performance PRESENT (LTM 06/18) Total Revenues = $2.7 B Total Revenues = $3.7 B 4% $5.50 Calendar Year EPS 22% $4.50 36% Revenue $3.50 Revenue $2.50 14% $1.50 24% $0.50 0% 12% -$0.50 2004 2005 2006 2007 2008 2009 2010 2011 20
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 06/30/18 Balance Sheet Debt ~ $3.3 B(1) Recourse Debt Working Capital Senior Notes(1) $400 Capital Leasing Obligations(1) 27 Total Recourse $427 mm Non-Recourse Leasing Debt(2) Maintain a Warehouse Facility(1) $151 Capital Long-term Financings: c
Slide 10: Financial Highlights
Financial Highlights Trinity’s EPS Summary FY 2009 – LTM 06/18(3) LTM 06/18 vs. LTM 06/17(1) $6.00 . Revenues decreased 8.8% to $3.65 billion from $4.00 $5.08 $5.00 billion $4.19 $4.00 . Operating profit decreased 16.9% to $393.6 million from (2) $3.00 $473.8 million $2.38 $2.25 . EBITDA decreased 6
Slide 11: FY 2018 Guidance and Outlook
FY 2018 Guidance and Outlook (As of July 26, 2018) Total EPS: ~ $1.15 - $1.40 EPS, excluding spin-off transaction costs: ~ $1.45 - $1.65 Corporate expense, excluding spin-off transaction costs: ~ $130 - $140mm Total Company Spin-off transaction costs: ~ $30 - $40mm Tax rate, excluding spin-off trans
Slide 12: Overview and Rationale for Planned Spin-Off
II. Overview and Rationale for Planned Spin-Off 12
Slide 13: Spin-off of Arcosa, Inc.
Spin-off of Arcosa, Inc. • On December 12, 2017, Trinity Industries announced a plan to pursue the spin-off of its infrastructure-related businesses to shareholders • Trinity introduced Arcosa, Inc. as the new company in an initial Form 10 filing on May 15, 2018 and filed subsequent amendments on Ju
Slide 14: Strategic Rationale
Strategic Rationale • Enhances Overall Growth Potential through Focused Companies – Arcosa to focus on growing market opportunity in North American infrastructure spending – Trinity Industries to operate industry-leading integrated rail leasing, manufacturing, and services business, providing single
Slide 15: CEO / CFO Management Teams post Spin-Off
CEO / CFO Management Teams post Spin-Off Management - Trinity Industries, Inc. Management - Arcosa, Inc. . Current CEO/CFO to remain in place following the . Antonio Carrillo has accepted the future role of spin-off President and CEO of Arcosa . Timothy R. Wallace, Trinity’s Chairman, Chief ⁻ Mr. Ca
Slide 16: 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, TrinityRail offe
Slide 17: Arcosa Positioned for Success
Arcosa Positioned for Success • New growth-oriented company that provides critical infrastructure products for a broad spectrum of markets throughout construction, energy, and transportation • Strong market positions with established reputations for quality and service • Well positioned to benefit f
Slide 18: Trinity business segments (post spin-off)
Trinity business segments (post spin-off) Trinity Industries, Inc. (post spin-off) 2017 Revenues: $2.4B1 Rail Leasing and Rail Group All Other Eliminations Management Services Group ($ Millions) 2017 Revenues 1 $2,044 $843 $344 ($834) ▪ Tank and freight railcars ▪ TrinityRail Leasing Services ▪ High
Slide 19: Arcosa business segments
Arcosa business segments Arcosa, Inc. (per Form 10 Filing) 2017 Revenues: $1.5B1 Transportation Products Energy Equipment Group Construction Products Group Group ($ Millions) 2017 Revenues $259 $844 $363 Natural aggregates (sand and Inland barges2 ▪ ▪ Wind towers ▪ Products gravel) ▪ Utility structu
Slide 20: 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 • Initial Form 10 filed May 15, 2018; subsequent amendments filed on June 15 and August 1, 2018 • Organization preparation • IRS private
Slide 21: Separation Progress Report
Separation Progress Report (As of 7/26/18) • 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 • Private letter ruling request filed
Slide 22: Appendix
IV. Appendix 22
Slide 23: Rail Group Market Positioning
Rail Group Market Positioning Current Performance(4) . . LTM 06/18 deliveries and orders totaling 21,400 and 19,250 railcars, Leading manufacturer of railcars, railcar axles, and coupling respectively; represents 42% and 38% of LTM 06/18 industry deliveries and devices in North America orders, respe
Slide 24: 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 06/18 primarily driven by lease management services fleet growth and disciplined cost management initiatives . Lease ren
Slide 25: Construction Products Group
Construction Products Group Market Positioning Current Performance . . Leading U.S. manufacturer of highway guardrail, crash LTM 06/18 revenues increased primarily due to higher volumes in our cushions, and other protective barriers construction aggregates businesses and other businesses. The increa
Slide 26: Energy Equipment Group
Energy Equipment Group Market Positioning Current Performance Wind Towers and Utility Structures: . Leading manufacturer of wind towers, steel utility . Backlog of $780.1 million for wind towers and utility structures as of structures, storage and distribution containers in North 06/18 provides soli
Slide 27: Inland Barge Group
Inland Barge Group Market Positioning Current Performance . . Revenues and profit down significantly again in LTM 06/18 versus Leading manufacturer of inland barges and fiberglass barge recent historic levels due to a substantial decline in barge covers in the United States deliveries and a weak pri
Slide 28: Reconciliation of EBITDA
Reconciliation of EBITDA (1)(2) (in millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 LTM 06/18 Income (loss) from continuing operations ($140.8) $69.4 $146.8 $251.9 $386.1 $709.3 $826.0 $364.7 $713.6 $715.0 Add: Interest expense 123.1 182.1 185.3 194.7 187.3 193.4 194.7 181.9 184.0 183.4 Provi
Slide 29: 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 06/18 From Leasing Operations: Revenue $ 329 $ 461 $ 493 $ 529 $ 587 $ 632 $ 700 $ 701 $ 744 $ 739 Operating Profit $ 129 $ 200 $ 225 $ 24
Slide 30: 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 31: Footnotes (Continued)
Footnotes (Continued) Slide 23 (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 (August 2018) on 6ix