Slide 1: Q4 2022 – Earnings Conference Call Supplemental Materials
TRINITY INDUSTRIES, INC. Q4 2022 – Earnings Conference Call Supplemental Materials February 21, 2023 – based on financial results as of December 31, 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 Q4-22 Conference Call
Key Messages from Q4-22 Conference Call Adjusted EPS* from continuing operations of $0.44, up $0.10 sequentially and $0.36 YoY FLRD improves to 25.1%; utilization holds at 97.9% 2023 EPS Guidance of $1.50 to $1.70 reflects higher deliveries, higher lease rates, and improved segment margins Completed
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 Jan-23 2020 2021 2022 2023 Five-Year
Slide 5: Q4-22 Financial Results Summary – Year over Year
Q4-22 Financial Results Summary – Year over Year Q4-22 Revenue Q4-22 Cash Flow, 1 Continuing Ops $591M $62M +25% -69% Q4-22 EPS, Q4-22 Adjusted 1 Adjusted* Free Cash Flow * $0.44 $138M +450% +394% (1) Q4 2021 cash flow from continuing ops included $189 million income tax refund * See appendix for re
Slide 6: FY22 Financial Results Summary – Year over Year
FY22 Financial Results Summary – Year over Year FY22 Revenue FY22 Cash Flow, 1 Continuing Ops $2.0B $9M +30% -99% FY22 EPS, FY22 Adjusted 1 Adjusted* Free Cash Flow * $0.94 $138M +176% -74% (1) 2022 cash flow from continuing ops impacted by elevated working capital related to higher volumes of railc
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 97.9%, renewal success rate of $200 60% 85% ◦ FLRD improves to 25.1% $150 (in millions) 40% ◦ Revenue higher due to net lease fleet investment
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 Capital Allocation Manufacturing Cost Optimization Execution Improvement Increased quarterly dividend by approximately Continued focus on lower LTV (1) of 13
Slide 9: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue and EPS Growth Improvement Q4 2022 Financial Summary: $600 $0.50 Income Statement: • Total revenues of $591M reflect higher external (in millions) railcar deliveries and improved pricing $400 • Earnings per share from continuing operations of $0.2
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 Cash & Equivalents Recourse Debt Unencumbered Railcars (1) $80M $624M @ ~5.1% $335M Revolver Availability Non-recourse Debt • Pledge to warehouse (1) $208M $5.0B @ ~
Slide 11: Management Outlook for Business Performance
Management Outlook for Business Performance FY 2023 Summary Detail Does not include sustainable railcar Industry Deliveries 40K — 45K railcars conversions Supports 3 year net fleet Net Fleet Investment $250M — $350M investment target of $500M — $600M Manufacturing and Investments in safety, efficien
Slide 12: Key Messages from Q4-22 Conference Call
Key Messages from Q4-22 Conference Call Adjusted EPS* from continuing operations of $0.44, up $0.10 sequentially and $0.36 YoY FLRD improves to 25.1%; utilization holds at 97.9% 2023 EPS Guidance of $1.50 to $1.70 reflects higher deliveries, higher lease rates, and improved segment margins Completed
Slide 13: Trinity Q4-22 Earnings Conference Call Q&A
Trinity Q4-22 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, 2022 (in millions, except per share amounts) Income tax Interest (1) effect of GAAP expense, net CARES Act Adjusted Operating profit $ 113.5 $ — $ — $ 113.5 Income (loss) from continuing operations before income taxes $ 53.0
Slide 15: Reconciliation: Adjusted Operating Results
Reconciliation: Adjusted Operating Results Year Ended December 31, 2022 (in millions, except per share amounts) Income Gains on tax dispositions Interest effect of of property (1) – Restructuring expense, (2) CARES GAAP other activities, net net Act Adjusted Operating profit $ 334.0 $ (7.5) $ 1.0 $
Slide 16: Reconciliation: Walking Adjusted FCF Beyond Lease Investment
Reconciliation: Walking Adjusted FCF Beyond Lease Investment FY 2020 FY 2021 Q4-22 FY 2022 (in millions) (1) Net cash provided by operating activities – continuing operations $ 622.0 $ 615.6 $ 61.8 $ 9.2 Proceeds from lease portfolio sales * 138.7 454.3 235.9 750.7 Capital expenditures – manufacturi
Slide 17: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE December 31, December 31, December 31, 2022 2021 2020 ($ in millions) Numerator: Income (loss) from continuing operations $ 98.9 $ 39.3 $ (250.5) Provision (benefit) for income taxes 27.6 15.9 (274.1) Income (loss) from continuing operations before income ta
Slide 18: 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, 2023 (3) Future Lease Rate Differential (FLRD) calculates the implied change in lease rates for railcar le