Trinity Industries, Inc. · NYSE:TRN
Trinity Industries — Q2 2022 Earnings Presentation
18 slides from Trinity Industries's earnings presentation, Jul 27, 2022
Slide 1: Q2 2022 Earnings Conference Call Supplemental Materials
DELIVERING GOODS for THE GOOD of ALL TRINITY INDUSTRIES, INC. Investor Contact: TrinityInvestorRelations@trin.net Website: www.trin.net Q2 2022 – Earnings Conference Call Supplemental Materials July 27, 2022 – based on financial results as of June 30, 2022 Exhibit 99.3
Slide 2: Forward Looking Statements
DELIVERING GOODS for THE GOOD of ALL /// 2 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,
Slide 3: Key Messages from Q2-22 Conference Call
DELIVERING GOODS for THE GOOD of ALL /// Key Messages from Q2-22 Conference Call 3 EPS from continuing operations of $0.14, up $0.11 sequentially and $0.06 year over year on an adjusted basis FLRD improves to a positive 14.7%; utilization up to 97.2% Results reflect our ability to execute in a chall
Slide 4: Rail Market Update and Commercial Overview
DELIVERING GOODS for THE GOOD of ALL /// Rail Market Update and Commercial Overview 4 Rail Traffic Impacted by Labor Shortages (1) Railcar Storage Levels Remain Low (2) FLRD and Utilization are Improving Railcar Orders Slightly Down Year over Year Fl ee t U ti liz at io n FLR D Fleet Utilization FLR
Slide 5: Q2-22 Financial Results Summary – Year over Year
DELIVERING GOODS for THE GOOD of ALL /// Q2-22 Financial Results Summary – Year over Year 5 Q2-22 Revenue $417M Q2-22 Cash Flow, Continuing Ops $(90)M Q2-22 EPS, Adjusted* $0.14 Q2-22 Free Cash Flow* $(5)M * See appendix for reconciliation of non-GAAP measures $+0.06 +42% -135% -102%
Slide 6: Trinity Business Segment Performance Trends
DELIVERING GOODS for THE GOOD of ALL /// Trinity Business Segment Performance Trends 6 Rail Products Segment Revenue Drivers ◦ Quarterly revenue improved sequentially on slightly higher deliveries, price escalation provisions, and HM-251 modifications driving up Maintenance Services revenues Rail Pr
Slide 7: Executing on Strategic Initiatives to Improve Pre-Tax ROE
DELIVERING GOODS for THE GOOD of ALL /// Executing on Strategic Initiatives to Improve Pre-Tax ROE 7 Closed 2 ABS transactions: TRL-2022 ($245 million) and Tribute Rail ($327 million) both collateralized with existing railcar assets LTV(1) of 67.3% Balance Sheet Optimization 2,350 sustainable railca
Slide 8: Leading the Rail Industry Digital Transformation with Quasar Acquisition
DELIVERING GOODS for THE GOOD of ALL /// Trinity is Leading the Rail Industry Digital Transformation with Quasar Acquisition as it Helps Expand RailPulse’s reach Expanding and Enhancing Trinsight™ Our Trinsight™ product is a next-gen digital platform that monitors railcars and their freight in real
Slide 9: EPS Growth Reflects Improving Operations
DELIVERING GOODS for THE GOOD of ALL /// EPS Growth Reflects Improving Operations Q2 2022 Financial Summary: Income Statement: • Total revenues of $417M reflect higher railcar deliveries year-over-year • Earnings from continuing operations of $0.14 ◦ Adjusted EPS of $0.14* • Benefited from $144M in
Slide 10: Healthy Balance Sheet Strategically Positioned for Opportunistic Deployment
DELIVERING GOODS for THE GOOD of ALL /// 10 Unencumbered Railcars $579M • Pledge to warehouse • Additional assets can be sold or financed • LTV of 67.3% for the wholly-owned lease portfolio as of Q2-22(2) CAPITAL LEVERS Recourse Debt $519M @ 4.0%(1) Non-recourse Debt $5.0B @ ~3.3%(1) • Low-cost fund
Slide 11: Management Outlook for Business Performance
DELIVERING GOODS for THE GOOD of ALL /// Management Outlook for Business Performance 11 C ap it al A llo ca ti on FY 2022 Summary Detail Industry Deliveries 40K – 50K railcars Does not include sustainable railcar conversions Net Fleet Investment $425M — $475M Assumes meaningful secondary market purc
Slide 12: Key Messages from Q2-22 Conference Call
DELIVERING GOODS for THE GOOD of ALL /// Key Messages from Q2-22 Conference Call 12 EPS from continuing operations of $0.14, up $0.11 sequentially and $0.06 year over year on an adjusted basis FLRD improves to a positive 14.7%; utilization up to 97.2% Results reflect our ability to execute in a chal
Slide 13: Trinity Q2-22 Earnings Conference Call Q&A
DELIVERING GOODS for THE GOOD of ALL /// Trinity Q2-22 Earnings Conference Call 13 Q&A
Slide 14: Reconciliation: Adjusted Operating Results
DELIVERING GOODS for THE GOOD of ALL /// Reconciliation: Adjusted Operating Results 14 Three Months Ended June 30, 2022 (in millions, except per share amounts) GAAP Restructuring activities, net Interest expense, net (1) Adjusted Operating profit $ 73.0 $ 1.0 $ — $ 74.0 Income (loss) from continuing
Slide 15: Reconciliation: Adjusted Operating Results
DELIVERING GOODS for THE GOOD of ALL /// Reconciliation: Adjusted Operating Results 15 (1) Represents insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. (2) Represents inte
Slide 16: Free Cash Flow Reconciliation
DELIVERING GOODS for THE GOOD of ALL /// Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 (in millions) Net cash provided by (used in) operating activities – continuing operations $ 255.6 $ 93.9 $ 196.8 $ 28.5 $ (89.8) Proceeds from lease portfolio sales 71.5 315.7 49.8 71.1 144.1 Adjusted Net Cash Provided by Operati
Slide 17: Reconciliation: Total Company Pre-Tax ROE
DELIVERING GOODS for THE GOOD of ALL /// Reconciliation: Total Company Pre-Tax ROE 17 (1) Represents insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021. (2) Excludes $81.3 m
Slide 18: Footnotes and Reconciliations
DELIVERING GOODS for THE GOOD of ALL /// Footnotes and Reconciliations 18 Slide 4 - Rail Market Update and Commercial Overview (1) Association of American Railroads (AAR) Weekly Railcar Loadings (2) AAR Rail Time Indicators – July 1, 2022 (3) Future Lease Rate Differential (FLRD) calculates the impl