Slide 1: Q3 2023 Earnings Conference Call Supplemental Materials
TRINITY INDUSTRIES, INC. Q3 2023 – Earnings Conference Call Supplemental Materials November 2, 2023 – based on financial results as of September 30, 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 Q3-23 Conference Call
Key Messages from Q3-23 Conference Call Revenue up 65% year over year, reflecting significantly stronger performance Continued strength in lease rates; FLRD +26.6%, utilization 98.1% Adjusted EPS from continuing operations of $0.26*, up $0.03 sequentially Border closures and congestion resulted in 4
Slide 4: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview Rail Traffic is Improving (1) Overall Fleet Storage Rates are Low (2) FLRD and Utilization Remain Favorable Received Large Multi-Year Order in Q3 2022 See appendix for footnotes DELIVERING GOODS for THE GOOD of ALL /// 4
Slide 5: Q3-23 Financial Results Summary – Year over Year
Q3-23 Financial Results Summary – Year over Year Q3-23 Revenue $821M +65% $+67M Q3-23 EPS, Q3-23 Adjusted Adjusted* Free Cash Flow* $0.26 $(31)M -24% $+11M * See appendix for reconciliation of non-GAAP measures DELIVERING GOODS for THE GOOD of ALL /// 5
Slide 6: 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 98.1%, renewal success rate of 86% ◦ FLRD remains strong at +26.6% ◦ Revenue higher year over year due to improved lease rates and higher util
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 Manufacturing Cost Sustainable Growth Optimization Improvement Continued focus on lower Received an AA MSCI ESG breakeven points LTV of ratings assessment, d
Slide 8: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue Improved Sequentially and Year over Year Q3 2023 Financial Summary: Income Statement: • Total revenues of $821M reflect higher external railcar deliveries and improved lease rates • Earnings per share from continuing operations of $0.29, adjusted
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 Recourse Debt Unencumbered Railcars Cash & Equivalents $794M @ ~6.2%(1) $269M $114M Non-recourse Debt • Pledge to warehouse Revolver Availability $5.0B @ ~4.2%(1) $5
Slide 10: Capital Allocation: Management Outlook for Business Performance
Management Outlook for Business Performance FY 2023 Summary Detail Does not include sustainable railcar Industry Deliveries Approximately 45K conversions Supports 3 year net fleet Net Fleet Investment $250M — $350M investment target of $500M — $600M Manufacturing and Investments in safety, efficienc
Slide 11: Key Messages from Q3-23 Conference Call
Key Messages from Q3-23 Conference Call Revenue up 65% year over year, reflecting significantly stronger performance Continued strength in lease rates; FLRD +26.6%, utilization 98.1% Adjusted EPS from continuing operations of $0.26*, up $0.03 sequentially Border closures and congestion resulted in 4
Slide 12: Trinity Q3-23 Earnings Conference Call Q&A
Trinity Q3-23 Earnings Conference Call Q&A DELIVERING GOODS for THE GOOD of ALL /// 12
Slide 13: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Three Months Ended September 30, 2023 (in millions, except per share amounts) Gains on dispositions of property – Interest GAAP other (1) expense, net (2) Adjusted Operating profit $ 100.2 $ (3.7) $ — $ 96.5 Income from continuing operations before income t
Slide 14: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Nine Months Ended September 30, 2023 (in millions, except per share amounts) Selling, engineering, Gains on and dispositions Interest administrative of property – Restructuring expense, GAAP expenses (1) other (2) activities, net net (3) Adjusted Operating
Slide 15: Reconciliation: Walking Adjusted FCF Beyond Lease Investment
Reconciliation: Walking Adjusted FCF Beyond Lease Investment Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 (in millions) Net cash provided by operating activities – continuing operations $ 8.7 $ 61.8 $ 102.5 $ 37.8 $ 75.5 Proceeds from lease portfolio sales 299.6 235.9 56.7 129.0 60.1 Capital expenditures – manufac
Slide 16: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE LTM December 31, 2022 December 31, 2021 September 30, 2023 ($ in millions) Numerator: Income from continuing operations $ 109.4 $ 98.9 $ 39.3 Provision for income taxes 12.1 27.6 15.9 Income from continuing operations before income taxes 121.5 126.5 55.2 Net
Slide 17: 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 – October 1, 2023 (3) Future Lease Rate Differential (FLRD) calculates the implied change in lease rates for railcar lea