Slide 1: Q3 2021 Earnings Conference Call Supplemental Material
TRINITY INDUSTRIES, INC. Q3 2021 – Earnings Conference Call Supplemental Material October 21, 2021 – based on financial results as of September 30, 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 Q3-21 Conference Call
Key Messages from Q3-21 Conference Call Demand environment continues to improve Execution of strategic initiatives on pace Strong and stable cash flow generation Disciplined investments and shareholder returns DELIVERING GOODS for THE GOOD of ALL /// 3
Slide 4: Q3-21 Financial Results Summary – Year over Year
Q3-21 Financial Results Summary – Year over Year Q3-21 Revenue Q3-21 Cash Flow, Continuing Ops $504M $93M +10% (28)% Q3-21 EPS, Q3-21 Free Adjusted* Cash Flow* $0.29 $157M $+0.12 $+155M * See appendix for reconciliation of non-GAAP measures DELIVERING GOODS for THE GOOD of ALL /// 4
Slide 5: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview (1) (2) Rail Traffic is Continuing to Improve Railcars are Coming out of Storage 750,000 35% 30% 700,000 25% 650,000 20% 600,000 15% 550,000 Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 20 20 20 20 21 21 21 21 2
Slide 6: Trinity Business Segment Performance Trends
Trinity Business Segment Performance Trends Leasing Segment Revenue Drivers Leasing Operations Revenue and Operating Profit Margin (1) ◦ New fleet additions slightly offset lower average lease $200 60% rates on renewals and assignments ◦ Improving trends as FLRD turned positive this quarter $150 (in
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 Enterprise Cost Manufacturing Cost Optimization Reductions Improvement Continue focus on lower Completed $250M share breakeven points Divestiture of certain
Slide 8: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue Reflects Improving Market Dynamics Q3 2021 Financial Summary: $600 $0.60 Income Statement: (in millions) • Total revenues of $504M reflect solid leasing $400 $0.40 fundamentals and higher external railcar deliveries • Earnings from continuing oper
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) $222M $399M @ 4.6% $826M Revolver Availability Non-recourse Debt • Pledge to warehouse (1) $422M $4.8B @ ~
Slide 10: Key Messages from Q3-21 Conference Call
Key Messages from Q3-21 Conference Call Demand environment continues to improve Execution of strategic initiatives on pace Strong and stable cash flow generation Disciplined investments and shareholder returns DELIVERING GOODS for THE GOOD of ALL /// 10
Slide 11: Trinity Q3-21 Earnings Conference Call Q&A
Trinity Q3-21 Earnings Conference Call Q&A DELIVERING GOODS for THE GOOD of ALL /// 11
Slide 12: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Three Months Ended September 30, 2021 (in millions, except per share amounts) Gains on dispositions Income tax of property (1)(2) – Restructuring(1) effect of GAAP other activities, net CARES Act Adjusted Operating profit (loss) $ 92.2 $ (4.7) $ (0.1) $ — $
Slide 13: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Nine Months Ended September 30, 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 (1)(2) activities, (1) Controlling (1)(3) Non
Slide 14: Reconciliation: Walking FCF Beyond Lease Investment
Reconciliation: Walking FCF Beyond Lease Investment Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 (in millions) Net cash provided by operating activities - continuing operations $ 129.0 $ 195.0 $ 70.1 $ 265.0 $ 92.9 Proceeds from lease portfolio sales * 6.5 — 17.3 71.5 315.7 Adjusted Net Cash Provided by Operating
Slide 15: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE LTM December 31, December 31, September 30, 2020 2019 2021 ($ in millions) Numerator: Income (loss) from continuing operations $ (83.9) $ (226.1) $ 139.2 Provision (benefit) for income taxes (25.8) (268.4) 61.5 Income (loss) from continuing operations before
Slide 16: Footnotes and Reconciliations
Footnotes and Reconciliations Slide 5 - Rail Market Update and Commercial Overview (1) Association of American Railroads (AAR) Weekly Railcar Loadings (2) AAR Rail Time Indicators – October 1, 2021 (3) Future Lease Rate Differential (FLRD) calculates the weighted average of the most current quarterl