Slide 1: Trinity Industries, Inc. Q3 2022 Earnings Conference Call Supplemental Materials
TRINITY INDUSTRIES, INC. Q3 2022 – Earnings Conference Call Supplemental Materials October 25, 2022 – based on financial results as of September 30, 2022 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 Q3-22 Conference Call
Key Messages from Q3-22 Conference Call Adjusted EPS* from continuing operations of $0.34, up $0.20 sequentially and $0.16 YoY FLRD remains positive at 11.0%; utilization up to 97.9% Completed $254M railcar sale to Wafra, resulting in a gain of $25M Multi-year railcar order raises backlog to $4.1B a
Slide 4: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview (1) (2) Rail Traffic Impacted by Labor Shortages Railcar Storage Levels Remain 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 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 2019 2020 2021 2022 Five-Year Average
Slide 5: Q3-22 Financial Results Summary – Year over Year
Q3-22 Financial Results Summary – Year over Year Q3-22 Revenue Q3-22 Cash Flow, Continuing Ops $497M $9M +18% -91% Q3-22 EPS, Q3-22 Free Cash Adjusted* Flow* $0.34 $(42)M $+0.16 -127% * 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 97.9%, renewal success rate of $200 60% 82% ◦ FLRD remains positive at 11.0% $150 (in millions) 40% ◦ Revenue impacted by a change in fleet co
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 Capital Allocation Manufacturing Cost Optimization Execution Improvement Continued focus on lower LTV (1) of Open market repurchases in breakeven points 67.4
Slide 8: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue and EPS Growth Improvement Q3 2022 Financial Summary: $500 $0.40 Income Statement: • Total revenues of $497M reflect higher railcar (in millions) deliveries • Earnings per share from continuing operations of $250 $0.20 $0.35 ◦ Adjusted EPS of $0.3
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) $59M $459M @ ~4.7% $351M Revolver Availability Non-recourse Debt • Pledge to warehouse (1) $264M $5.0B @ ~
Slide 10: Management Outlook for Business Performance
Management Outlook for Business Performance FY 2022 Summary Detail Does not include sustainable railcar Industry Deliveries 40K – 50K railcars conversions Lowered to account for deliveries Net Fleet Investment $250M – $300M moving to next year as well as higher than expected railcar sales Manufactur
Slide 11: Key Messages from Q3-22 Conference Call
Key Messages from Q3-22 Conference Call Adjusted EPS* from continuing operations of $0.34, up $0.20 sequentially and $0.16 YoY FLRD remains positive at 11.0%; utilization up to 97.9% Completed $254M railcar sale to Wafra, resulting in a gain of $25M Multi-year railcar order raises backlog to $4.1B a
Slide 12: Trinity Q3-22 Earnings Conference Call Q&A
Trinity Q3-22 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, 2022 (in millions, except per share amounts) Gains on dispositions of property (1) – Interest (2) GAAP other expense, net Adjusted Operating profit $ 92.7 $ (1.1) $ — $ 91.6 Income from continuing operations before income ta
Slide 14: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Nine Months Ended September 30, 2022 (in millions, except per share amounts) Gains on dispositions of property (1) – Restructuring Interest (2) GAAP other activities, net expense, net Adjusted Operating profit $ 220.5 $ (7.5) $ 1.0 $ — $ 214.0 Income from c
Slide 15: Reconciliation: Walking FCF Beyond Lease Investment
Reconciliation: Walking FCF Beyond Lease Investment Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 (in millions) Net cash provided by (used in) operating activities – continuing $ 93.9 $ 196.8 $ 28.5 $ (89.8) $ 8.7 operations Proceeds from lease portfolio sales 315.7 49.8 71.1 144.1 299.6 Adjusted Net Cash Provided
Slide 16: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE LTM December 31, December 31, September 30, 2022 2021 2020 ($ in millions) Numerator: Income (loss) from continuing operations $ 77.7 $ 39.3 $ (250.5) Provision (benefit) for income taxes 23.9 15.9 (274.1) Income (loss) from continuing operations before inco
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, 2022 (3) Future Lease Rate Differential (FLRD) calculates the implied change in revenue for railcar leases