Trinity Industries, Inc. · NYSE:TRN
Trinity Industries — Q1 2021 Earnings Presentation
15 slides from Trinity Industries's earnings presentation, Apr 22, 2021
Slide 1: Q1 2021 Earnings Conference Call Supplemental Material
TRINITY INDUSTRIES, INC. Q1 2021 – Earnings Conference Call Supplemental Material April 22, 2021 – based on financial results as of March 31, 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 Q1-21 Conference Call
Key Messages from Q1-21 Conference Call Challenging operating environment during first quarter Execution of strategic initiatives on pace Resilient cash flow generation on low EPS Disciplined investments and shareholder returns DELIVERING GOODS for THE GOOD of ALL /// 3
Slide 4: Q1-21 Financial Results Summary – Year over Year
Q1-21 Financial Results Summary – Year over Year Q1-21 Revenue Q1-21 Cash Flow, Continuing Ops $399M $70M -35% -60% Q1-21 EPS, Q1-21 Free Adjusted* Cash Flow* $0.07 $90M -36% +57% * 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% 700,000 30% 650,000 25% 600,000 20% 550,000 15% 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 2019 2020 2021 Five-Yea
Slide 6: Trinity Business Segment Performance Trends
Trinity Business Segment Performance Trends Leasing Segment Revenue Drivers Leasing Operations Revenue and Operating Profit Margin (1) ◦ Lease revenue slightly down YoY from continuation $200 60% of softer lease pricing and slightly lower utilization compared to the previous year $150 ◦ New fleet ad
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 Net Debt increase of Enhance value of outsourced Divestiture of certain fabrication ac
Slide 8: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights External Revenue Reflects Challenging Market Dynamics Q1 2021 Financial Summary: $700 $0.18 $600 Income Statement: (in millions) $500 • Total revenues of $399M reflect lower railcar $0.12 deliveries and softer pricing on new and existing $400 railcars $30
Slide 9: Healthy Balance Sheet Strategically Positioned for Market Uncertainty and Opportunistic Deployment
Healthy Balance Sheet Strategically Positioned for Market Uncertainty and Opportunistic Deployment LIQUIDITY DEBT STRUCTURE CAPITAL LEVERS Cash & Equivalents Recourse Debt $178M (1) Unencumbered Railcars $398M @ 4.6% $1.1B Revolver Availability Non-recourse Debt $358M (1) • Pledge to warehouse $4.8B
Slide 10: Recap of Key Messages from Earnings Call
Recap of Key Messages from Earnings Call Challenging operating environment during first quarter Execution of strategic initiatives on pace Resilient cash flow generation on low EPS Disciplined investments and shareholder returns DELIVERING GOODS for THE GOOD of ALL /// 10
Slide 11: Trinity Q1-21 Earnings Conference Call Q&A
Trinity Q1-21 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 March 31, 2021 (in millions, except per share amounts) Income tax Pension plan (1) Restructuring (1) effect of GAAP settlement activities CARES Act Adjusted Operating profit $ 60.2 $ — $ (0.3) $ — $ 59.9 Income from continuing operations
Slide 13: Reconciliation: Walking FCF Beyond Lease Investment
Reconciliation: Walking FCF Beyond Lease Investment Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 (in millions) Net cash provided by operating activities - continuing operations $ 173.8 $ 154.0 $ 129.0 $ 195.0 $ 70.1 Proceeds from lease portfolio sales * 68.5 63.7 6.5 — 17.3 Adjusted Net Cash Provided by Operating
Slide 14: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE LTM December 31, December 31, March 31, 2021 2020 2019 ($ in millions) Numerator: Income (loss) from continuing operations $ (386.9) $ (226.1) $ 139.2 Provision (benefit) for income taxes (114.8) (268.4) 61.5 Income (loss) from continuing operations before i
Slide 15: 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 – April 1, 2021 (3) Future Lease Rate Differential (FLRD) calculates the weighted average of the most current quarterly