What changed in this filing

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Item 1. Financial Statements

2021-10-26 compared with 2021-07-27 · 207 added, 142 removed, 942 unchanged (27% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

34 unchanged sentences

Net income (loss) 35.9 25.9 42.0 ( 99.6 )

Net loss attributable to noncontrolling interest ( 7.9 ) ( 80.9 ) ( 9.9 ) ( 80.3 )

Net income (loss) attributable to noncontrolling interest 3.9 0.8 ( 6.0 ) ( 79.5 )

Net income (loss) attributable to Trinity Industries, Inc.

18 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

( 0.8 ) 2.0 5.0 ( 25.3 )

Reclassification adjustments for losses included in net income, net of tax benefit (expense) of $( 0.6 ), $ 1.2 , $ 0.3 , and $ 1.7

Reclassification adjustments for losses included in net income, net of tax benefit of $ 0.3 , $ 1.3 , $ 0.6 , and $ 3.0

1.8 4.7 2.9 10.6

5 unchanged sentences

Comprehensive income (loss) 36.9 34.0 50.0 ( 110.1 )

comprehensive loss attributable to noncontrolling interest ( 7.5 ) ( 80.6 ) ( 9.2 ) ( 79.7 )

comprehensive income (loss) attributable to noncontrolling interest 4.2 1.1 ( 5.0 ) ( 78.6 )

Comprehensive income (loss) attributable to Trinity Industries, Inc.

4 unchanged sentences

Consolidated Balance Sheets

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions)

39 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(in millions)

8 unchanged sentences

Gains on dispositions of property and other assets ( 16.4 ) ( 6.3 )

Gains on insurance recoveries from property damage ( 4.7 ) —

Impairment of long-lived assets — 369.4

17 unchanged sentences

Proceeds from lease portfolio sales 404.5 138.7

Capital expenditures – leasing (net of sold lease fleet railcars owned one year or less with a net cost of $ 54.0 for the six months ended June 30, 2020)

Capital expenditures – leasing (net of sold lease fleet railcars owned one year or less with a net cost of $ 54.0 for the nine months ended September 30, 2020)

( 363.9 ) ( 448.8 )

1 unchanged sentence

Acquisitions, net of cash acquired ( 16.5 ) —

Other ( 0.1 ) —

Net cash used in investing activities ( 173.0 ) ( 154.6 )

Proceeds from insurance recoveries 6.5 —

Net cash provided by (used in) investing activities 43.6 ( 361.0 )

Financing activities:

4 unchanged sentences

Purchase of shares to satisfy employee tax on vested stock ( 9.2 ) ( 9.3 )

Contributions from (distributions to) noncontrolling interest ( 6.8 ) 6.1

Other — ( 0.2 )

Net cash used in financing activities ( 354.1 ) ( 151.3 )

Net increase in cash, cash equivalents, and restricted cash 27.3 16.3

Net increase (decrease) in cash, cash equivalents, and restricted cash 116.7 ( 55.7 )

Cash, cash equivalents, and restricted cash at beginning of period 228.4 277.6

42 unchanged sentences

100.1 $ 1.0 $ — $ 1,414.1 $ ( 24.6 ) — $ ( 0.6 ) $ 1,389.9 $ 268.0 $ 1,657.9

Net income — — — 32.0 — — — 32.0 3.9 35.9

Other comprehensive income — — — — 0.7 — — 0.7 0.3 1.0

Cash dividends declared on common stock (1)

— — — ( 20.9 ) — — — ( 20.9 ) — ( 20.9 )

Stock-based compensation expense

— — 6.5 — — — — 6.5 — 6.5

Shares repurchased — — — — — ( 2.8 ) ( 77.1 ) ( 77.1 ) — ( 77.1 )

Settlement of share-based awards, net 0.1 — 0.4 — — ( 0.1 ) ( 0.5 ) ( 0.1 ) — ( 0.1 )

Distributions to noncontrolling interest — — — — — — — — ( 6.8 ) ( 6.8 )

September 30, 2021

100.2 $ 1.0 $ 6.9 $ 1,425.2 $ ( 23.9 ) ( 2.9 ) $ ( 78.2 ) $ 1,331.0 $ 265.4 $ 1,596.4

(1) Dividends of $ 0.21 per common share for all periods presented in 2021.

27 unchanged sentences

119.7 $ 1.2 $ 8.0 $ 2,321.0 $ ( 176.6 ) ( 2.0 ) $ ( 37.2 ) $ 2,116.4 $ 349.7 $ 2,466.1

Net income (loss) — — — ( 206.9 ) — — — ( 206.9 ) ( 80.9 ) ( 287.8 )

Net loss — — — ( 206.9 ) — — — ( 206.9 ) ( 80.9 ) ( 287.8 )

Other comprehensive income — — — — 4.3 — — 4.3 0.3 4.6

8 unchanged sentences

118.7 $ 1.2 $ — $ 2,063.3 $ ( 172.3 ) ( 0.1 ) $ ( 0.9 ) $ 1,891.3 $ 269.1 $ 2,160.4

Net income — — — 25.1 — — — 25.1 0.8 25.9

Other comprehensive income — — — — 7.8 — — 7.8 0.3 8.1

Cash dividends declared on common stock (1)

— — — ( 21.6 ) — — — ( 21.6 ) — ( 21.6 )

Stock-based compensation expense

— — 4.8 — — — — 4.8 — 4.8

Shares repurchased

— — — — — ( 4.5 ) ( 89.9 ) ( 89.9 ) — ( 89.9 )

Settlement of share-based awards, net — — 0.5 — — — ( 0.7 ) ( 0.2 ) — ( 0.2 )

Contributions from noncontrolling interest — — — — — — — — 6.1 6.1

September 30, 2020

118.7 $ 1.2 $ 5.3 $ 2,066.8 $ ( 164.5 ) ( 4.6 ) $ ( 91.5 ) $ 1,817.3 $ 276.3 $ 2,093.6

(1) Dividends of $ 0.19 per common share for all periods presented in 2020.

7 unchanged sentences

and its consolidated subsidiaries (“Trinity,” “Company,” “we,” “our,” or "us") including the accounts of our wholly-owned subsidiaries and partially-owned subsidiaries, TRIP Rail Holdings LLC (“TRIP Holdings”) and RIV 2013 Rail Holdings LLC ("RIV 2013"), in which we have a controlling interest.

In our opinion, all normal and recurring adjustments necessary for a fair presentation of our financial position as of June 30, 2021, and the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020, have been made in conformity with generally accepted accounting principles.

In our opinion, all normal and recurring adjustments necessary for a fair presentation of our financial position as of September 30, 2021, and the results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020, have been made in conformity with generally accepted accounting principles.

All significant intercompany accounts and transactions have been eliminated.

Certain prior year balances have been reclassified to conform to the 2021 presentation.

Due to seasonal and other factors, including the impacts of the coronavirus pandemic (“COVID-19”) and the related governmental response, the results of operations for the six months ended June 30, 2021 may not be indicative of expected results of operations for the year ending December 31, 2021.

Due to seasonal and other factors, including the impacts of the coronavirus pandemic (“COVID-19”) and the related governmental response, the results of operations for the nine months ended September 30, 2021 may not be indicative of expected results of operations for the year ending December 31, 2021.

These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with our audited Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2020.

14 unchanged sentences

Interest income related to sales-type leases is recognized over the lease term using the effective interest method.

We had no sales-type leases as of June 30, 2021 and December 31, 2020.

We had no sales-type leases as of September 30, 2021 and December 31, 2020.

During the fourth quarter of 2020, we began presenting sales from our lease fleet in the Railcar Leasing and Management Services Group on a net basis regardless of the age of railcar that is sold.

3 unchanged sentences

These sales are presented in the Lease portfolio sales line in our Consolidated Statements of Operations;

however, because this change in presentation was effected on a prospective basis beginning in the fourth quarter of 2020, lease portfolio sales for the three and six months ended June 30, 2020 only include sales of railcars from the lease fleet owned for more than one year.

however, because this change in presentation was effected on a prospective basis beginning in the fourth quarter of 2020, lease portfolio sales for the three and nine months ended September 30, 2020 only include sales of railcars from the lease fleet owned for more than one year.

We have concluded that the new presentation is appropriate given the significant change in the strategic focus of the Company.

8 unchanged sentences

Within our maintenance services business, revenue is recognized over time as repair and maintenance projects are completed, using an input approach based on the costs incurred relative to the total estimated costs of performing the project.

We recorded contract assets of $ 5.4 million and $ 4.4 million as of June 30, 2021 and December 31, 2020, respectively, related to unbilled revenues recognized on repair and maintenance services that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

We recorded contract assets of $ 5.8 million and $ 4.4 million as of September 30, 2021 and December 31, 2020, respectively, related to unbilled revenues recognized on repair and maintenance services that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

These contract assets are included within the Receivables, net of allowance line in our Consolidated Balance Sheets.

1 unchanged sentence

Unsatisfied Performance Obligations

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of June 30, 2021 and the percentage of the outstanding performance obligations as of June 30, 2021 expected to be delivered during the remainder of 2021:

Unsatisfied performance obligations at June 30, 2021

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of September 30, 2021 and the percentage of the outstanding performance obligations as of September 30, 2021 expected to be delivered during the remainder of 2021:

Unsatisfied performance obligations at September 30, 2021

Amount Percent expected to be delivered in 2021

1 unchanged sentence

Rail Products Group:

Rail products:

New railcars:

External customers $ 980.9

1 unchanged sentence

$ 1,228.4 31.8 %

Sustainable railcar conversions (1)

$ 98.3 25.8 %

Maintenance services $ 3.1 100.0 %

Railcar Leasing and Management Services Group $ 81.2 8.1 %

(1) During 2021, the Rail Products Group introduced a sustainable railcar conversion program whereby certain tank cars and freight cars are converted or upgraded to better meet the changing market demands.

The remainder of the unsatisfied performance obligations for the Rail Products Group is expected to be delivered through 2025.

3 unchanged sentences

Our operating leases have remaining lease terms ranging from one year to sixteen years , some of which include options to extend for up to five years , and some of which include options to terminate within one year .

As of June 30, 2021, we had no material finance leases in which we were the lessee.

As of September 30, 2021, we had no material finance leases in which we were the lessee.

Certain of our operating leases include lease incentives, which reduce the right-of-use asset and are recognized on a straight-line basis over the lease term.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

2 unchanged sentences

Short-term lease expense $ — $ 0.7 $ 0.2 $ 2.1

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Consolidated Balance Sheets

5 unchanged sentences

Weighted average discount rate 3.0 % 3.3 %

Six Months Ended

Nine Months Ended

September 30,

Consolidated Statements of Cash Flows

2 unchanged sentences

$ 26.6 $ 53.6

(1) Included in other assets in our Consolidated Balance Sheet.

(2) Included in other liabilities in our Consolidated Balance Sheet.

(3) Includes the commencement of the new headquarters facility for the six months ended June 30, 2020 .

(1) Included in other assets in our Consolidated Balance Sheets.

(2) Included in other liabilities in our Consolidated Balance Sheets.

(3) Includes the commencement of the new headquarters facility for the nine months ended September 30, 2020 .

Future contractual minimum operating lease liabilities will mature as follows (in millions):

Leasing Group Non-Leasing Group Total

Remaining six months of 2021 $ 5.6 $ 2.2 $ 7.8

Remaining three months of 2021 $ 2.9 $ 1.1 $ 4.0

2022 11.1 8.2 19.3

11 unchanged sentences

Some of our leases include options to extend the leases for up to five years , and a small percentage of our leases include options to terminate within one year with certain notice requirements and early termination penalties.

As of June 30, 2021, non-Leasing Group operating leases were not significant, and we had no sales-type leases and no direct finance leases.

As of September 30, 2021, non-Leasing Group operating leases were not significant, and we had no sales-type leases and no direct finance leases.

We manage risks associated with residual values of leased railcars by investing across a diverse portfolio of railcar types, staggering lease maturities within any given railcar type, avoiding concentration of railcar type and industry, and are active participants in secondary markets.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

3 unchanged sentences

Future contractual minimum revenues for operating leases will mature as follows (in millions) (1) :

Remaining six months of 2021 $ 288.0

Remaining three months of 2021 $ 146.7

Thereafter 344.4

11 unchanged sentences

When a receivable is deemed uncollectible, the write-off is recorded as a reduction to allowance for credit losses.

The balance for allowance for credit losses that are in the scope of ASC 326, Financial Instruments - Credit Losses was $ 10.8 million and $ 9.3 million at June 30, 2021 and December 31, 2020, respectively.

The balance of the allowance for credit losses that are in the scope of ASC 326, Financial Instruments - Credit Losses was $ 10.1 million and $ 9.3 million at September 30, 2021 and December 31, 2020, respectively.

This balance excludes the general reserve for operating lease receivables that is permitted under ASC 450, Contingencies .

In January 2021, we completed the acquisition of a company that owns and operates proprietary railcar cleaning technology systems.

This transaction was recorded as a business combination within the Rail Products Group, based on preliminary valuations of the acquired assets and liabilities at their acquisition date fair value using Level 3 inputs.

This transaction was recorded as a business combination within the Rail Products Group, based on valuations of the acquired assets and liabilities at their acquisition date fair value using Level 3 inputs.

The acquisition did not have a significant impact on our Consolidated Financial Statements.

This transaction resulted in goodwill of $ 7.0 million.

There was no acquisition activity for the three and six months ended June 30, 2020.

As of June 30, 2021 and December 31, 2020, the carrying amount of our goodwill totaled $ 215.7 million and $ 208.8 million, respectively, which is primarily attributable to the Rail Products Group.

There was no acquisition activity for the three and nine months ended September 30, 2020.

As of September 30, 2021 and December 31, 2020, the carrying amount of our goodwill totaled $ 215.8 million and $ 208.8 million, respectively, which is primarily attributable to the Rail Products Group.

We provide various express, limited product warranties that generally range from one year to five years depending on the product.

3 unchanged sentences

We provide for the estimated cost of product warranties at the time revenue is recognized related to products covered by warranties and assess the adequacy of the resulting reserves on a quarterly basis.

The changes in the accruals for warranties for the three and six months ended June 30, 2021 and 2020 are as follows:

The changes in the accruals for warranties for the three and nine months ended September 30, 2021 and 2020 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

14 unchanged sentences

Included in accompanying balance sheet

at June 30, 2021

at September 30, 2021

AOCL – loss/(income)

5 unchanged sentences

TRIP Holdings warehouse loan $ 788.5 3.60 % $ — $ 0.7 $ 1.0

Triumph Rail secured railcar equipment notes $ 34.8 2.62 % $ — $ — $ —

2017 promissory notes – interest rate cap $ 169.3 3.00 % $ — $ ( 0.4 ) $ —

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

June 30, Expected effect during next twelve months

September 30, Nine Months Ended

September 30, Expected effect during next twelve months

2021 2020 2021 2020

9 unchanged sentences

2017 promissory notes – interest rate swap $ 3.1 $ 3.1 $ 9.3 $ 7.8 $ 12.4

(1) Based on the fair value of open hedges as of June 30, 2021.

(1) Based on the fair value of open hedges as of September 30, 2021.

Other Derivatives

2 unchanged sentences

Information related to our foreign currency hedge is as follows:

accompanying balance sheet at June 30, 2021

accompanying balance sheet at September 30, 2021

Effect on cost of revenues – increase/(decrease)

1 unchanged sentence

loss/(income) Three Months Ended

June 30, Six Months Ended

June 30, Expected effect during next twelve months (1)

September 30, Nine Months Ended

September 30, Expected effect during next twelve months (1)

2021 2020 2021 2020

1 unchanged sentence

$ 60.0 $ ( 0.9 ) $ 0.6 $ ( 1.4 ) $ 2.3 $ ( 7.4 ) $ 4.1 $ 0.6

(1) Based on the fair value of open hedges as of June 30, 2021.

(1) Based on the fair value of open hedges as of September 30, 2021.

Fair Value Measurements

6 unchanged sentences

The assets measured as Level 1 in the fair value hierarchy are summarized below:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions)

8 unchanged sentences

The assets and liabilities measured as Level 2 in the fair value hierarchy are summarized below:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions)

3 unchanged sentences

$ 28.9 $ 45.2

Foreign currency hedge (2)

Total liabilities $ 29.8 $ 45.2

2 unchanged sentences

Level 3 – This level is defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2021 and December 31, 2020, we have no assets measured as Level 3 in the fair value hierarchy.

See Note 10 for information regarding the non-recurring fair value measurement considerations during the three and six months ended June 30, 2020 for the impairment charge related to our small cube covered hopper railcars.

As of September 30, 2021 and December 31, 2020, we have no assets measured as Level 3 in the fair value hierarchy.

See Note 10 for information regarding the non-recurring fair value measurement considerations during the nine months ended September 30, 2020 for the impairment charge related to our small cube covered hopper railcars.

See Note 7 for the estimated fair values of our debt instruments.

15 unchanged sentences

We operate principally in North America.

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Railcar Leasing and Management Services Group Rail Products Group All Other Eliminations – Lease Subsidiary Eliminations – Other Consolidated Total

2 unchanged sentences

Total Revenues $ 185.5 $ 339.9 $ 83.7 $ ( 105.3 ) $ ( 0.3 ) $ 503.5

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Railcar Leasing and Management Services Group Rail Products Group All Other Eliminations – Lease Subsidiary Eliminations – Other Consolidated Total

2 unchanged sentences

Total Revenues $ 183.9 $ 381.2 $ 62.6 $ ( 166.0 ) $ ( 2.3 ) $ 459.4

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Railcar Leasing and Management Services Group Rail Products Group All Other Eliminations – Lease Subsidiary Eliminations – Other Consolidated Total

2 unchanged sentences

Total Revenues $ 554.1 $ 862.7 $ 230.0 $ ( 367.6 ) $ ( 5.4 ) $ 1,273.8

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Railcar Leasing and Management Services Group Rail Products Group All Other Eliminations – Lease Subsidiary Eliminations – Other Consolidated Total

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

20 unchanged sentences

TILC is the agent of each of TRIP Holdings and RIV 2013 and, as such, has been delegated the authority, power, and discretion to take certain actions on behalf of the respective companies.

At June 30, 2021, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $ 140.3 million.

At September 30, 2021, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $ 139.5 million.

Our weighted average ownership interest in TRIP Holdings and RIV 2013 is 38 % while the remaining 62 % weighted average interest is owned by third-party, investor-owned funds.

13 unchanged sentences

See Note 7 regarding TRIP Holdings and RIV 2013, including the redemption and refinancing of the debt of their respective subsidiaries.

Investment in Unconsolidated Affiliate

In August 2021, the Company and Wafra, Inc.

(“Wafra”), a global alternative investment manager, announced a new railcar investment vehicle (“RIV”) program between Trinity and certain funds managed by Wafra (“Wafra Funds”).

As part of this program, a joint venture was formed, Signal Rail Holdings LLC (“Signal Rail”), which is owned 90 % by Wafra Funds and 10 % by TILC.

Signal Rail or its subsidiaries are expected to invest in diversified portfolios of leased railcars originated by TILC targeting up to $ 1 billion in total acquisitions over an expected three-year investment period.

TILC will service all railcars owned by Signal Rail.

In connection with the launch of the RIV program, in August 2021, TILC and certain of its subsidiaries sold an initial portfolio of 3,582 railcars and related leases to Signal Rail for an aggregate sales price of approximately $ 325.1 million.

As a result of the sale, TILC received approximately $ 318.7 million in cash, of which $ 2.9 million was recognized as revenue for services performed associated with the delivery of railcars with attached leases.

Additionally, in connection with the sale, TILC received a 10 % equity interest in Signal Rail valued at $ 6.4 million, which was primarily received in exchange for its contribution of railcars to Signal Rail.

TILC recognized a gain of approximately $ 32.9 million on the initial portfolio sale during the three months ended September 30, 2021 and will earn on-going fee revenue from servicing these railcars.

Signal Rail financed this purchase primarily through an asset-backed securitization.

In the event of future railcar portfolio sales, we expect that Signal Rail would issue additional debt, and Wafra Funds and TILC would make additional equity contributions to Signal Rail such that TILC would maintain its 10 % equity interest.

Upon consideration under the variable interest entity (“VIE”) model of ASC 810, Trinity has concluded that Signal Rail meets the definition of a VIE.

TILC has variable interests in Signal Rail arising from its 10 % equity ownership position and its role as a service provider.

We have evaluated the potential for consolidation using the variable interest model and have determined that Trinity is not required to consolidate this entity as we do not have the power to direct the activities of the entity that most significantly impact its economic performance.

We will absorb portions of Signal Rail’s expected losses and/or receive portions of expected residual returns commensurate with our 10 % equity interest in Signal Rail.

Our investment in Signal Rail is being accounted for under the equity method of accounting.

At September 30, 2021, the carrying value of TILC’s equity investment in Signal Rail was $ 6.1 million, which is included in other assets in our Consolidated Balance Sheet.

The carrying value of this investment, together with any potential future funding commitments described above, collectively represent our maximum exposure in Signal Rail.

Railcar Leasing and Management Services Group

1 unchanged sentence

Selected consolidated financial information for the Leasing Group is as follows:

June 30, 2021

September 30, 2021

Subsidiaries Partially-Owned Subsidiaries Total Leasing Group Eliminations – Lease Subsidiary (1)

34 unchanged sentences

See Note 4 and Note 7 for a further discussion regarding our investment in our partially-owned leasing subsidiaries and the related indebtedness.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 Percent 2021 2020 Percent

20 unchanged sentences

$ 39.9 $ 47.0 ( 15.1 ) % $ 142.6 $ 149.2 ( 4.4 ) %

* Not meaningful

(1) Beginning in the fourth quarter of 2020, we made a prospective change in the presentation of sales of railcars from the lease fleet.

Therefore, all railcar sales for the three and six months ended June 30, 2021 are presented as a net gain or loss from the disposal of a long-term asset regardless of the age of railcar that is sold.

Therefore, all railcar sales for the three and nine months ended September 30, 2021 are presented as a net gain or loss from the disposal of a long-term asset regardless of the age of railcar that is sold.

See Note 1 for more information.

5 unchanged sentences

Interest expense is not a component of operating profit and includes the effect of hedges.

(3) Depreciation expense related to our small cube covered hopper railcars decreased by approximately $ 3.5 million and $ 7.0 million for the three and six months ended June 30, 2021, respectively, relative to the three and six months ended June 30, 2020 as a result of the impairment charge recorded in the second quarter of 2020 related to these railcars.

(4) Interest expense for the three and six months ended June 30, 2021 includes $11.7 million of loss on extinguishment of debt associated with the refinancing of our partially-owned subsidiaries' debt.

(3) Depreciation expense increased $ 4.7 million and $ 7.3 million for the three and nine months ended September 30, 2021, respectively, as a result of the disposal of certain railcar components associated with our sustainable railcar conversion program.

Additionally, depreciation expense related to our small cube covered hopper railcars decreased by approximately $ 7.0 million for the nine months ended September 30, 2021 relative to the nine months ended September 30, 2020 as a result of the impairment charge recorded in the second quarter of 2020 related to these railcars.

(4) Interest expense for the nine months ended September 30, 2021 includes $ 11.7 million of loss on extinguishment of debt associated with the refinancing of our partially-owned subsidiaries' debt.

See Note 7 for more information.

Interest expense for the six months ended June 30, 2020 includes $5.0 million of loss on extinguishment of debt associated with the early redemption of debt.

Interest expense for the nine months ended September 30, 2020 includes $ 5.0 million of loss on extinguishment of debt associated with the early redemption of debt.

Information related to lease portfolio sales is as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

8 unchanged sentences

Future contractual minimum rental revenues on operating leases related to our wholly-owned and partially-owned subsidiaries are as follows:

Remaining six months of 2021 2022 2023 2024 2025 Thereafter Total

Remaining three months of 2021 2022 2023 2024 2025 Thereafter Total

(in millions)

1 unchanged sentence

Wholly-owned subsidiaries.

The Leasing Group’s debt at June 30, 2021 consisted primarily of non-recourse debt.

As of June 30, 2021, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 4,731.0 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries.

The net book value of unpledged equipment at June 30, 2021 was $ 1,109.8 million.

The Leasing Group’s debt at September 30, 2021 consisted primarily of non-recourse debt.

As of September 30, 2021, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 4,761.9 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries.

The net book value of unpledged equipment at September 30, 2021 was $ 825.8 million.

See Note 7 for more information regarding the Leasing Group debt.

7 unchanged sentences

Future amounts due as well as future contractual minimum rental revenues related to the Leasing Group's railcar operating lease obligations are as follows:

Remaining six months of 2021 2022 2023 2024 2025 Thereafter Total

Remaining three months of 2021 2022 2023 2024 2025 Thereafter Total

(in millions)

7 unchanged sentences

The following table summarizes the components of property, plant, and equipment:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions)

20 unchanged sentences

The carrying amounts of our long-term debt are as follows:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions)

27 unchanged sentences

The estimated fair values of our long-term debt are as follows:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions)

4 unchanged sentences

Revolving Credit Facility – We have a $ 450.0 million unsecured corporate revolving credit facility.

During the six months ended June 30, 2021, we had total borrowings of $ 370.0 million and total repayments of $ 370.0 million under the revolving credit facility.

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 35.2 million.

Of the $ 364.8 million remaining unused amount, $ 361.1 million is available for borrowing as of June 30, 2021.

The outstanding letters of credit as of June 30, 2021 are scheduled to expire in July 2022.

The revolving credit facility bears interest at a variable rate which resulted in an interest rate of LIBOR plus 1.75 %, with a LIBOR floor of 0.30 %, as of June 30, 2021.

A commitment fee accrues on the average daily unused portion of the revolving facility at the rate of 0.175 % to 0.40 % ( 0.25 % as of June 30, 2021).

During the nine months ended September 30, 2021, we had total borrowings of $ 470.0 million and total repayments of $ 520.0 million under the revolving credit facility.

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 28.3 million, leaving $ 421.7 million available for borrowing as of September 30, 2021.

The outstanding letters of credit as of September 30, 2021 are scheduled to expire in July 2022.

The revolving credit facility bears interest at a variable rate which resulted in an interest rate of LIBOR plus 1.75 %, with a LIBOR floor of 0.30 %, as of September 30, 2021.

A commitment fee accrues on the average daily unused portion of the revolving facility at the rate of 0.175 % to 0.40 % ( 0.25 % as of September 30, 2021).

The revolving credit facility requires the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage.

In March 2021, we amended our revolving credit facility to increase the maximum leverage ratio through March 31, 2022 and to decrease the minimum interest coverage ratio through December 31, 2021 to provide additional near-term flexibility.

As of June 30, 2021, we were in compliance with all such financial covenants.

As of September 30, 2021, we were in compliance with all such financial covenants.

TILC Warehouse Loan Facility – TILC has a $ 1.0 billion warehouse loan facility, which was established to finance railcars owned by TILC.

In March 2021, the facility was extended through March 15, 2024, the total commitment was increased from $ 750 million to $ 1.0 billion, with a potential increase of up to an additional $ 250 million, subject to certain conditions, and provided for a facility margin of 185 basis points.

During the six months ended June 30, 2021, we had total borrowings of $ 257.3 million and total repayments of $ 242.5 million under the TILC warehouse loan facility.

Under the renewed facility, the entire unused facility amount of $ 465.8 million was available as of June 30, 2021 based on the amount of warehouse-eligible, unpledged equipment.

Advances under the facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 1.95 % at June 30, 2021.

During the nine months ended September 30, 2021, we had total borrowings of $ 374.7 million and total repayments of $ 379.7 million under the TILC warehouse loan facility.

Under the renewed facility, the entire unused facility amount of $ 485.6 million was available as of September 30, 2021 based on the amount of warehouse-eligible, unpledged equipment.

Advances under the facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 1.94 % at September 30, 2021.

TRL-2021 – In June 2021, Trinity Rail Leasing 2021 LLC, a Delaware limited liability company ("TRL-2021") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued an aggregate principal amount of (i) $ 305.2 million of its Series 2021-1 Class A Green Secured Railcar Equipment Notes (the "TRL-2021 Class A Notes") and (ii) $ 19.8 million of its Series 2021-1 Class B Green Secured Railcar Equipment Notes (the "TRL-2021 Class B Notes") (the TRL-2021 Class A Notes and the TRL-2021 Class B Notes are, collectively, the “TRL-2021 Notes”).

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In connection with the redemption, we recognized a loss on extinguishment of debt of $ 8.7 million, which included a $ 3.3 million early redemption premium and a write-off of $ 5.4 million in unamortized debt issuance costs.

These charges are reflected in the loss on extinguishment of debt line of our Consolidated Statements of Operations for the three and six months ended June 30, 2021.

These charges are reflected in the loss on extinguishment of debt line of our Consolidated Statements of Operations for the nine months ended September 30, 2021.

TRIP Railcar Co.

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The principal and interest of this indebtedness are paid from the cash flows of the underlying leases.

The TRIP term loan bears interest at LIBOR plus 1.85 %, for an all-in interest rate of 1.92 % at June 30, 2021, and has a stated maturity date of June 2025.

The TRIP Railcar Co.

term loan bears interest at LIBOR plus 1.85 %, for an all-in interest rate of 1.94 % at September 30, 2021, and has a stated maturity date of June 2025.

We incurred $ 2.9 million in debt issuance costs, which will be amortized to interest expense over the anticipated repayment term of the TRIP Railcar Co.

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In connection with the redemption, we recognized a loss on extinguishment of debt of $ 3.0 million, which related to the write-off of unamortized debt issuance costs.

This write-off is reflected in the loss on extinguishment of debt line of our Consolidated Statements of Operations for the three and six months ended June 30, 2021.

This write-off is reflected in the loss on extinguishment of debt line of our Consolidated Statements of Operations for the nine months ended September 30, 2021.

Each of our secured railcar equipment notes, including the TRL-2021 Notes, the Triumph Rail Notes, and the TRP-2021 Notes, generally has an anticipated repayment date and a stated final maturity date.

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Terms and conditions of our other long-term debt, including recourse and non-recourse provisions and scheduled maturities, are described in Note 8 of our 2020 Annual Report on Form 10-K.

The effective tax rate from continuing operations for the three months ended June 30, 2021 was a benefit of 23.1 %, which differs from the U.S.

statutory rate of 21.0 % primarily due to excess tax benefits associated with equity based compensation.

The effective tax rate from continuing operations for the six months ended June 30, 2021 was an expense of 44.0 %, which differs from the U.S.

statutory rate primarily due to an adjustment to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") carryback benefit previously recognized, partially offset by excess tax benefits associated with equity based compensation.

Our effective tax rates from continuing operations for the three and six months ended June 30, 2020 were a benefit of 20.0 % and a benefit of 63.6 %, respectively, primarily due to carryback claims as permitted under the CARES Act, partially offset by the portion of the non-cash impairment charge that is not tax-effected because it is related to the noncontrolling interest.

Our effective tax rates, without the impact of the CARES Act, were an expense of 16.9 % and an expense of 15.5 % for the three and six months ended June 30, 2020, respectively, which differs from the U.S.

statutory rate primarily due to the impacts of state income taxes, the incremental tax on profits of branches taxed in both U.S.

and foreign jurisdictions, tax return true-ups, and non-deductible executive compensation.

Income tax refunds received, net of payments, during the six months ended June 30, 2021 totaled $ 206.7 million.

The total income tax receivable position as of June 30, 2021 was $ 233.1 million, primarily related to carryback claims that have been filed.

The effective tax rate from continuing operations for the three months ended September 30, 2021 was an expense of 23.9 %, which differs from the U.S.

statutory rate of 21.0 % primarily due to state income taxes, foreign taxes, non-deductible executive compensation, and other permanent differences.

The effective tax rate from continuing operations for the nine months ended September 30, 2021 was an expense of 27.8 %, which differs from the U.S.

statutory rate primarily due to an adjustment to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") carryback benefit previously recognized and foreign taxes, partially offset by excess tax benefits associated with equity based compensation.

Our effective tax rates from continuing operations for the three and nine months ended September 30, 2020 were a benefit of 34.9 % and a benefit of 69.5 %, respectively, primarily due to carryback claims as permitted under the CARES Act, partially offset by the portion of the non-cash impairment charge that is not tax-effected because it is related to the noncontrolling interest.

Our effective tax rates, without the impact of the CARES Act, were an expense of 10.2 % and a benefit of 15.8 % for the three and nine months ended September 30, 2020, respectively, which differs from the U.S.

statutory rate primarily due to the impacts of state income taxes, foreign taxes, tax return true-ups, and non-deductible executive compensation.

Income tax refunds received, net of payments, during the nine months ended September 30, 2021 totaled $ 246.9 million.

The total income tax receivable position as of September 30, 2021 was $ 191.9 million, primarily related to carryback claims that have been filed.

Our 2016 and 2017 tax years are effectively settled.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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The non-service cost components of net periodic benefit cost in the table above are included in other, net (income) expense in our Consolidated Statements of Operations.

For the three and six months ended June 30, 2021, net periodic benefit cost relates to the Supplemental Executive Retirement Plan.

For the three and nine months ended September 30, 2021, net periodic benefit cost relates to the Supplemental Executive Retirement Plan.

Pension Plan Termination

On September 4, 2019, our Board of Directors approved the termination of the Trinity Industries, Inc.

In September 2019, our Board of Directors approved the termination of the Trinity Industries, Inc.

Consolidated Pension Plan (the "Pension Plan"), effective December 31, 2019.

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Upon settlement, we recognized a pre-tax non-cash pension settlement charge in the fourth quarter of 2020 of $ 151.5 million, which was inclusive of all unamortized losses previously recorded in AOCL.

During the six months ended June 30, 2021, as permitted by applicable regulations, we used $ 10.2 million of the Pension Plan surplus to fund obligations associated with the Company's profit sharing plans.

There was no funding from the Pension Plan surplus to the Company's profit sharing plans during the three months ended June 30, 2021.

During the three and six months ended June 30, 2021, we used $ 1.0 million and $ 2.2 million, respectively, to fund pension administrative expenses required to finalize the settlement of the Pension Plan.

During the three and nine months ended September 30, 2021, as permitted by applicable regulations, we used $ 0.7 million and $ 10.9 million, respectively, of the Pension Plan surplus to fund obligations associated with the Company's profit sharing plans.

During the nine months ended September 30, 2021, we used $ 2.2 million to fund pension administrative expenses required to finalize the settlement of the Pension Plan.

There were no pension administrative expenses during the three months ended September 30, 2021.

The remaining surplus of the Pension Plan of $ 10.5 million will be used to fund final pension administrative expenses.

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Significant management judgment was used to determine the key assumptions utilized in our impairment analysis, the substantial majority of which represent unobservable (Level 3) inputs.

The aggregate impairment charge of $ 369.4 million is reflected in the impairment of long-lived assets line of our Consolidated Statements of Operations for the three and six months ended June 30, 2020.

The aggregate impairment charge of $ 369.4 million is reflected in the impairment of long-lived assets line of our Consolidated Statements of Operations for the nine months ended September 30, 2020.

See Note 11 of our 2020 Annual Report on Form 10-K for further information regarding impairment of long-lived assets related to our small cube covered hopper railcars.

Restructuring activities

During the three months ended June 30, 2021, restructuring activities resulted in a net gain of $ 0.7 million from the disposition of non-operating facilities included in previous restructuring plans.

During the six months ended June 30, 2021, restructuring activities resulted in a net gain of $ 1.0 million, primarily as a result of a $ 1.4 million gain on the disposition of certain non-operating facilities included in previous restructuring plans, partially offset by $ 0.4 million in employee severance costs.

During the three months ended June 30, 2020, we recorded total restructuring charges of $ 0.3 million from a loss on the disposition of a non-operating facility.

During the six months ended June 30, 2020, we recorded total restructuring charges of $ 5.8 million, consisting of $ 5.2 million of non-cash charges from the write-down of our corporate headquarters campus and $ 4.1 million in cash charges for severance costs, partially offset by a $ 3.5 million net gain on the disposition of a non-operating facility and certain related assets.

During the three months ended September 30, 2021, restructuring activities resulted in a net gain of $ 0.1 million.

During the nine months ended September 30, 2021, restructuring activities resulted in a net gain of $ 1.1 million, primarily as a result of a $ 1.6 million gain on the disposition of certain non-operating facilities included in previous restructuring plans, partially offset by $ 0.5 million in employee severance costs.

During the three months ended September 30, 2020, we recorded total restructuring charges of $ 4.7 million, consisting of $ 3.4 million for severance costs, $ 0.7 million in asset write-downs associated with transportation equipment in our logistics operations, and $ 0.6 million of contract termination costs.

During the nine months ended September 30, 2020, we recorded total restructuring charges of $ 10.5 million, consisting of $ 7.5 million for severance costs, $ 5.9 million of non-cash charges primarily from the write-down of our corporate headquarters campus and certain other assets, and $ 0.6 million in contract termination costs, partially offset by a $ 3.5 million net gain on the disposition of a non-operating facility and certain related assets.

The following table sets forth the restructuring activity and balance of the restructuring liability, which is included in other liabilities in our Consolidated Balance Sheets:

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Charges and adjustments Payments Accrued charges as of

June 30, 2021

September 30, 2021

(in millions)

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Although restructuring activities are not allocated to our reportable segments, the following tables summarize the restructuring activities by reportable segment:

Three Months Ended June 30,

Gain on Disposition on Assets Loss on Disposition on Assets

Three Months Ended September 30, 2021

Employee Severance Costs Gain on Disposition on Assets Total

Railcar Leasing and Management Services Group $ — $ — $ —

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Total restructuring activities $ 0.1 $ ( 0.2 ) $ ( 0.1 )

Six Months Ended June 30, 2021

Three Months Ended September 30, 2020

Employee Severance Costs Contract Termination Costs Write-down of Assets Total

(in millions)

Railcar Leasing and Management Services Group $ 1.4 $ — $ — $ 1.4

Rail Products Group 1.3 0.2 0.7 2.2

All Other 0.1 — — 0.1

Corporate 0.6 0.4 — 1.0

Total restructuring activities $ 3.4 $ 0.6 $ 0.7 $ 4.7

Nine Months Ended September 30, 2021

Employee Severance Costs Gain on Disposition of Assets Total

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Total restructuring activities $ 0.5 $ ( 1.6 ) $ ( 1.1 )

Six Months Ended June 30, 2020

Employee Severance Costs Gain on Disposition of Assets Write-down of Assets Total

Nine Months Ended September 30, 2020

Employee Severance Costs Contract Termination Costs Gain on Disposition of Assets Write-down of Assets Total

(in millions)

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Accumulated Other Comprehensive Loss

Changes in AOCL for the six months ended June 30, 2021 are as follows:

Changes in AOCL for the nine months ended September 30, 2021 are as follows:

Currency translation adjustments Unrealized gains/(losses) on derivative financial instruments Net actuarial gains/(losses) and prior service costs of defined benefit plans Accumulated Other Comprehensive Loss

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Other comprehensive income — 6.9 0.1 7.0

Balances at June 30, 2021

Balances at September 30, 2021

$ ( 1.3 ) $ ( 18.7 ) $ ( 3.9 ) $ ( 23.9 )

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The price per share represents a discount of 3.5 % from the closing price for a share of common stock on the New York Stock Exchange on April 29, 2021.

Under the repurchase agreement, ValueAct will not make any additional sales of common stock without our consent through September 1, 2021.

The repurchase from ValueAct was approved by our Board of Directors separately from, and will not reduce the authorized amount remaining under, the existing share repurchase program described below.

Share Repurchase Authorization

In October 2020, our Board of Directors authorized a new share repurchase program effective October 23, 2020 through December 31, 2021.

The new share repurchase program authorized the Company to repurchase up to $ 250.0 million of its common stock.

The repurchase from ValueAct was approved by our Board of Directors separately from, and did not reduce the authorized amount remaining under, the previous share repurchase program described below.

New Share Repurchase Authorization

In September 2021, our Board of Directors authorized a new share repurchase program effective September 9, 2021 through December 31, 2022.

The new share repurchase program authorizes the Company to repurchase up to $ 250.0 million of its common stock.

There were no shares repurchased under this program during the three months ended September 30, 2021.

Previous Share Repurchase Authorization

In October 2020, our Board of Directors authorized a share repurchase program effective October 23, 2020 through December 31, 2021.

The share repurchase program authorized the Company to repurchase up to $ 250.0 million of its common stock and was completed in the third quarter of 2021.

Share repurchase activity under this program is as follows:

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April 1, 2021 through June 30, 2021 2,440,793 68.3 $ 77.1

July 1, 2021 through September 30, 2021 2,815,307 77.1 $ —

Total 9,522,882 $ 250.0

During the three and six months ended June 30, 2021, total share repurchases were 10.5 million and 11.8 million, respectively, at a cost of approximately $ 290.8 million and $ 327.6 million, respectively.

During the six months ended June 30, 2020, share repurchases totaled 1.9 million at a cost of approximately $ 35.4 million under the previous share repurchase program, which was completed in the third quarter of 2020.

There were no shares repurchases during the three months ended June 30, 2020.

During the three and nine months ended September 30, 2021, total share repurchases were 2.8 million and 14.6 million, respectively, at a cost of approximately $ 77.1 million and $ 404.7 million, respectively.

During the three and nine months ended September 30, 2020, share repurchases totaled 4.5 million and 6.3 million, respectively, at a cost of approximately $ 89.9 million and $ 125.3 million, respectively, under a previous share repurchase program, which was completed in the third quarter of 2020.

Certain shares of stock repurchased during September 2020, totaling $ 4.9 million, were cash settled in October 2020 in accordance with normal settlement practices.

Stock-Based Compensation

Stock-based compensation totaled approximately $ 4.4 million and $ 9.8 million for the three and six months ended June 30, 2021, respectively.

Stock-based compensation totaled approximately $ 7.6 million and $ 14.9 million for the three and six months ended June 30, 2020, respectively.

Stock-based compensation totaled approximately $ 6.5 million and $ 16.3 million for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation totaled approximately $ 4.8 million and $ 19.7 million for the three and nine months ended September 30, 2020, respectively.

The Company's annual grant of share-based awards generally occurs in the second quarter under our 2004 Fourth Amended and Restated Stock Option and Incentive Plan (the "Plan”).

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Expense related to performance units is recognized ratably from their award date to the end of the performance period, generally three years .

The following table summarizes stock-based compensation awards granted during the six months ended June 30, 2021:

The following table summarizes stock-based compensation awards granted during the nine months ended September 30, 2021:

Number of Shares Granted Weighted Average Grant-Date Fair Value per Award

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per common share is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.

There were no restricted shares and stock options included in the computation of diluted earnings per common share for the three and six months ended June 30, 2020 as we incurred a loss for these periods, and any effect on loss per common share would have been antidilutive.

There were no restricted shares and stock options included in the computation of diluted earnings per common share for the nine months ended September 30, 2020 as we incurred a loss for the period, and any effect on loss per common share would have been antidilutive.

The following table sets forth the computation of basic and diluted net income (loss) attributable to Trinity Industries, Inc.

for the three and six months ended June 30, 2021 and 2020.

Three Months Ended June 30, Six Months Ended June 30,

for the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Income (loss) from continuing operations $ 36.3 $ 25.9 $ 42.8 $ ( 99.4 )

Net loss attributable to noncontrolling interest 7.9 80.9 9.9 80.3

Net (income) loss attributable to noncontrolling interest ( 3.9 ) ( 0.8 ) 6.0 79.5

Unvested restricted share participation – continuing operations — ( 0.2 ) — —

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Also, the respective states’ Attorneys General filed Notices of Election to Decline Intervention in all of these matters, with the exception of the Commonwealth of Virginia Attorney General, who intervened in the Virginia matter.

In a similar California state qui tam action filed by Mr.

Harman ( State of California ex rel.

Harman Qui Tam v.

Trinity Industries, Inc.

and Trinity Highway Products, LLC , Case No.

RG 14721864, in the Superior Court of California, Alameda County), on July 15, 2021, Mr.

Harman filed an unopposed Request for Dismissal.

On July 21, 2021, the Court entered an order dismissing the case.

No trial date has been scheduled in these cases other than in the Massachusetts action, which has been scheduled for trial on June 7, 2022, and the Virginia action, which has been scheduled for trial on April 17, 2023.

The Company believes these state qui tam lawsuits are without merit and intends to vigorously defend all allegations.

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As previously reported, state qui tam actions filed by Mr.

Harman in the states of Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Minnesota, Montana, Nevada, Rhode Island, Tennessee, and New Jersey were dismissed.

Harman in the states of Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Minnesota, Montana, Nevada, Rhode Island, Tennessee, New Jersey, and California were dismissed.

The Company has been served in a lawsuit filed November 5, 2015, titled Jackson County, Missouri, individually and on behalf of a class of others similarly situated vs.

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The Company evaluates its exposure to such claims and suits periodically and establishes accruals for these contingencies when a range of loss can be reasonably estimated.

The range of reasonably possible losses for such matters is $ 10.9 million to $ 19.1 million, which includes our rights in indemnity and recourse to third parties of approximately $ 5.3 million, which is recorded in other assets on our Consolidated Balance Sheet as of June 30, 2021.

This range includes any amounts related to the Highway Products litigation matters described above in the section titled “Highway products litigation." At June 30, 2021, total accruals of $ 11.3 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

The range of reasonably possible losses for such matters is $ 11.2 million to $ 18.4 million, which includes our rights in indemnity and recourse to third parties of approximately $ 6.4 million, which is recorded in other assets on our Consolidated Balance Sheet as of September 30, 2021.

This range includes any amounts related to the Highway Products litigation matters described above in the section titled “Highway products litigation." At September 30, 2021, total accruals of $ 11.7 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

The Company believes any additional liability would not be material to its financial position or results of operations.

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We believe our insurance coverage is sufficient to cover property damage costs related to the event.

Accordingly, at March 31, 2021, we recorded an insurance receivable of approximately $ 1.2 million for property damage recoveries that we have concluded are probable of collection.

As of June 30, 2021, we have received advanced payments from insurance of approximately $ 4.8 million for cleanup and damage remediation activities.

Any property damage insurance proceeds received in excess of the net book value of property lost and related cleanup costs will be accounted for as a gain.

Accordingly, at March 31, 2021, we recorded an insurance receivable of approximately $ 1.2 million for property damage recoveries, which was collected in the third quarter of 2021.

As of September 30, 2021, we have received total advanced payments from insurance of approximately $ 14.6 million, which includes $ 8.1 million for reimbursement of cleanup and damage remediation expenditures and the $ 1.2 million insurance receivable described above.

We recorded a gain of $ 4.7 million for insurance recoveries received in excess of the net book value of assets destroyed, net of the applicable deductible, which is included in the gains on dispositions of other property line in our Consolidated Statements of Operations.

As of September 30, 2021, we have utilized $ 2.6 million of the advanced payments from insurance towards new capital expenditures in support of the reconstruction efforts.

Any additional property damage insurance proceeds received in excess of the net book value of property lost and related cleanup costs will be accounted for as gains in future quarters.

Additionally, the Company may be entitled to business interruption proceeds related to the event.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements