Slide 1: Trinity Industries Q1 2023 Earnings Conference Call Supplemental Materials
TRINITY INDUSTRIES, INC. Q1 2023 – Earnings Conference Call Supplemental Materials May 2, 2023 – based on financial results as of March 31, 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 Q1-23 Conference Call
Key Messages from Q1-23 Conference Call Adjusted EPS* from continuing operations of $0.07, up $0.04 YoY Improving lease rates and extending term; FLRD +44.3%, utilization 98.2% Maintaining 2023 EPS Guidance of $1.50 to $1.70 to reflect higher deliveries, higher lease rates, and improved segment marg
Slide 4: Rail Market Update and Commercial Overview
Rail Market Update and Commercial Overview (1) (2) Intermodal is Driving Down Rail Traffic Overall Fleet Storage Rates are Low 750,000 35% 30% 25% 625,000 20% 15% 500,000 Jan- May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 20 20 20 21 21 21 22 22 22 2
Slide 5: Q1-23 Financial Results Summary – Year over Year
Q1-23 Financial Results Summary – Year over Year Q1-23 Revenue Q1-23 Cash Flow, Continuing Ops $642M $103M +36% +260% Q1-23 EPS, Q1-23 Adjusted Adjusted* Free Cash Flow* $0.07 $36M +133% -24% * 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 98.2%, renewal success rate of $200 60% 80% ◦ FLRD improves to +44.3% $150 (in millions) 40% ◦ Revenue higher due to improved lease rates and
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 LTV (1) of breakeven points Received first limited 65.0% assurance st
Slide 8: Our Rail Services Journey
Our Rail Services Journey Mid-Teen 9.6% DELIVERING GOODS for THE GOOD of ALL /// 8
Slide 9: Strong Performance Trends and Key Highlights
Strong Performance Trends and Key Highlights Revenue and EPS Improved Year over Year Q1 2023 Financial Summary: $750 $0.50 Income Statement: • Total revenues of $642M reflect higher external (in millions) railcar deliveries and improved pricing $500 • Earnings per share from continuing operations of
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) $82M $704M @ ~5.5% $307M Revolver Availability Non-recourse Debt • Pledge to warehouse (1) $278M $5.0B @ ~
Slide 11: Capital Allocation: 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 Q1-23 Conference Call
Key Messages from Q1-23 Conference Call Adjusted EPS* from continuing operations of $0.07, up $0.04 YoY Improving lease rates and extending term; FLRD +44.3%, utilization 98.2% Maintaining 2023 EPS Guidance of $1.50 to $1.70 to reflect higher deliveries, higher lease rates, and improved segment marg
Slide 13: Trinity Q1-23 Earnings Conference Call Q&A
Trinity Q1-23 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 March 31, 2023 (in millions, except per share amounts) Gains on dispositions of property(1) – Restructuring Interest (2) GAAP other activities, net expense, net Adjusted Operating profit $ 69.0 $ (1.2) $ (0.4) $ — $ 67.4 Income from conti
Slide 15: Reconciliation: Walking Adjusted FCF Beyond Lease Investment
Reconciliation: Walking Adjusted FCF Beyond Lease Investment Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 (in millions) Net cash provided by (used in) operating activities – continuing $ 28.5 $ (89.8) $ 8.7 $ 61.8 $ 102.5 operations Proceeds from lease portfolio sales 71.1 144.1 299.6 235.9 56.7 Capital expenditur
Slide 16: Reconciliation: Total Company Pre-Tax ROE
Reconciliation: Total Company Pre-Tax ROE LTM December 31, December 31, March 31, 2023 2022 2021 ($ in millions) Numerator: Income from continuing operations $ 105.8 $ 98.9 $ 39.3 Provision for income taxes 13.1 27.6 15.9 Income from continuing operations before income taxes 118.9 126.5 55.2 Net (in
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 – April 1, 2023 (3) Future Lease Rate Differential (FLRD) calculates the implied change in lease rates for railcar lease