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and its consolidated subsidiaries (“Trinity,” “Company,” “we,” “our,” or “us”) own businesses that are leading providers of railcar products and services in North America.
−Removed: Our businesses market their railcar products and services under the trade name TrinityRail ® .
+Added: We market our railcar products and services under the trade name TrinityRail ® .
The TrinityRail platform provides railcar leasing and management services, railcar manufacturing, and railcar maintenance and modification services.
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Unless otherwise stated, any reference to income statement items in this Annual Report on Form 10-K (the "Form 10-K") refers to results from continuing operations.
−Removed: Sale of Highway Products Business
−Removed: In the fourth quarter of 2021, the Company completed the sale of Trinity Highway Products, LLC (“THP”), a wholly-owned subsidiary of the Company, and certain direct and indirect subsidiaries of THP, to Rush Hour Intermediate II, LLC, an entity owned by an affiliated investment fund of Monomoy Capital Partners, for an aggregate purchase price of $375.0 million, subject to certain adjustments.
−Removed: THP is a leading manufacturer and global supplier of commercial highway products.
−Removed: We concluded that the sale of THP represented a strategic shift that would have a major effect on the Company’s operations and financial results.
−Removed: Accordingly, we have presented the operating results and cash flows of THP as discontinued operations for all periods in this 2021 Annual Report on Form 10-K.
−Removed: Results of prior periods have been recast to reflect these changes and present results on a comparable basis.
−Removed: See Note 2 of the Consolidated Financial Statements for further information related to the sale of THP.
Reportable Segments
−Removed: Following the sale of THP, we report our operating results in two reportable segments.
−Removed: All segment results set forth herein have been recast to present results on a comparable basis.
+Added: We report our operating results in two reportable segments.
Reportable Segments
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Business Overview and Current Business Strategy
−Removed: Our purpose is delivering goods for the good of all by being a leading provider of railcar products and services in North America.
−Removed: We strive to operate industry-leading railcar leasing, manufacturing, and services businesses by providing a single source for comprehensive rail transportation solutions and services in North America.
−Removed: Our objective is to deliver industry-leading leased railcar portfolio returns and outstanding customer experiences by providing high quality, innovative products, and by designing solutions that enhance and optimize our customers' logistics operations.
−Removed: As a railcar-focused company, we continuously grow and enhance our product and service offerings to optimize the ownership and use of railcars.
+Added: Our purpose is delivering goods for the good of all by being a premier provider of railcar products and services.
+Added: We operate industry-leading railcar leasing, manufacturing, and services businesses, providing a single source for comprehensive rail transportation solutions and services in North America.
+Added: Our objective is to deliver attractive leased railcar portfolio returns and outstanding customer experiences by providing high quality, innovative products and services.
+Added: We continuously grow and enhance our product and service offerings to optimize the ownership and use of railcars and improve our customers' logistics operations.
+Added: We coordinate sales and marketing activities under the TrinityRail platform, thereby providing a single point of contact for railroads, shippers, and third-party leasing companies seeking rail equipment and services.
Our rail platform offers a complete portfolio of railcar solutions to our customers as summarized below:
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Through wholly-owned subsidiaries, including Trinity Industries Leasing Company ("TILC"), and partially-owned subsidiaries, TRIP Rail Holdings LLC (“TRIP Holdings”) and RIV 2013 Rail Holdings LLC ("RIV 2013"), we primarily offer operating leases for freight and tank railcars.
−Removed: Trinity's Rail Products Group and TILC coordinate sales and marketing activities under the TrinityRail platform, thereby providing a single point of contact for railroads, shippers, and third-party leasing companies seeking rail equipment and services.
In addition, TILC originates and manages railcar leases for third-party investors and provides fleet maintenance and management services to industrial shippers.
Our affiliations with third-party investor-owned funds, through strategic railcar alliances and the formation of railcar investment vehicles, combined with TILC's fleet maintenance and management services capabilities, complement our leasing business by generating stable fee income, strengthening customer relationships, and enhancing the view of TrinityRail as a leading provider of railcar products and services.
+Added: Our Trinsight Logistics Platform is a leader in the rail industry digital transformation by providing services designed to increase the efficiency and visibility of the supply chain, while leveraging data, insights, and analytics to make decisions that improve operations and reduce costs.
The railcars in our lease fleet are leased to industrial shippers and railroads.
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The terms of our railcar leases generally provide for fixed monthly rentals that vary from one to ten years.
−Removed: We compete in the North American full-service leasing market primarily against four major railcar lessors, as well as numerous smaller lessors.
+Added: We compete in the North American full-service leasing market primarily against five major railcar lessors, as well as numerous smaller lessors.
We serve our customers predominantly through full-service leases and compete primarily on the basis of the quality and craftsmanship of our railcars, competitive pricing, and our ability to provide an outstanding customer experience.
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The following charts provide additional information with respect to the number of railcars in the Company's lease fleet.
−Removed: (1) Data presented in this chart reflects the number of railcars in our wholly-owned and partially-owned lease fleet, which totaled 106,970 railcars as of December 31, 2021.
+Added: (1) Data presented in this chart includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements, which totaled 108,440 railcars as of December 31, 2022.
Rail Products Group.
Through wholly-owned subsidiaries with facilities in the U.S.
−Removed: and Mexico, our Rail Products Group is a leading manufacturer of freight and tank railcars in North America used for transporting a wide variety of liquids, gases, and dry cargo.
−Removed: We believe that our Rail Products Group's diversified manufacturing capabilities enable us to capitalize on changing industry trends and developing opportunities in various markets.
−Removed: Additionally, we offer a full range of maintenance services and flexible solutions, from field inspections and comprehensive compliance testing to standard repairs and maintenance, specialized cleaning, inspection, and testing at multiple facilities in the U.S.
−Removed: We also provide modification capabilities and assist in transitioning railcars to new industry standards.
−Removed: We believe that our investment in maintenance services extends and enhances our ability to serve our customers and our lease fleet.
+Added: and Mexico, our Rail Products Group is a leading manufa cturer of freight and tank railcars in North America used for transporting a wide variety of liquids, gases, and dry cargo.
+Added: Additionally, our Rail Products Group offers a sustainable railcar conversion program whereby certain tank cars and freight cars are converted or upgraded to better meet changing market demands.
+Added: We believe our Rail Products Group's diversified manufacturing capabilities enable us to capitalize on changing industry trends and developing opportunities in various markets.
+Added: We offer a full range of maintenance services and flexible solutions, from field inspections and comprehensive compliance testing to standard repairs and maintenance, specialized cleaning, inspection, and testing at multiple facilities in the U.S.
+Added: Additionally, we provide modification capabilities and assist in transitioning railcars to new industry standards.
+Added: Our parts business provides complementary rail-related offerings, including manufacturing and distributing new, refurbished, and replacement parts.
+Added: We believe that our investments in our maintenance services and parts and components businesses extend and enhance our ability to serve our customers and our lease fleet.
Our customers include railroads, leasing companies, and industrial shippers of products in various markets, such as agriculture, construction and metals, consumer products, energy, and refined products and chemicals.
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During 2022, the supply of steel was sufficient to support our manufacturing requirements.
−Removed: Steel prices have increased significantly since 2020 and are major components of our cost of revenues.
−Removed: Steel and component prices may be volatile in the future as a result of market conditions, changes in tariffs or other governmental policies.
+Added: Steel prices, which are subject to volatility, were elevated over much of the last two years and are a major component of our cost of revenues.
We typically use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers to reduce the impact of plate and coil steel price volatility on our operating profit.
−Removed: However, higher steel prices could result in increases in the cost of certain railcar components and could also reduce demand for new railcars.
−Removed: We may from time to time experience shortages of materials used in the production of certain railcar types;
−Removed: however, in general, we believe there is enough capacity in the supply industry to meet current production levels, and the existing contracts and relationships that we have in place will meet our current production forecasts.
+Added: However, higher steel prices have resulted in increases in the cost of certain railcar components and could reduce demand for new railcars.
+Added: As a result of disruptions in the global supply chain, we have continued to experience shortages of materials used to manufacture or repair certain railcar types, as well as disruptions in the transportation network used to deliver our products, which has impacted our ability to timely deliver these railcars to our customers.
+Added: While we believe these challenges will be resolved over time, they may persist over the foreseeable future, which could continue to impact our operations.
+Added: We will continue to monitor the situation and take appropriate steps within our control to mitigate the potential impacts on our production schedules and delivery timelines.
Human Capital.
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and 7,000 were employed in Mexico.
−Removed: Additional information on our human capital programs and initiatives is included in our Corporate Social Responsibility Report, which is available on our website.
+Added: Additional information on our human capital programs and initiatives is included in our Interim Corporate Social Responsibility Report, which is available on our website.
Information contained on our website is not included in, or incorporated by reference into, this Annual Report on Form 10-K.
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Our Occupational Health and Safety system includes robust protocols and procedures that extend to employees and suppliers.
−Removed: Additionally, all of our rail operations are certified through the American Chemistry Council’s Responsible Care® Management System, which guides the continual improvement of our environmental, health, and safety practices and performance and applies to all our operations and employees, including contractors.
+Added: All of our railcar manufacturing and maintenance facilities, as well as our corporate headquarters, are certified to the ISO 45001 (occupational health and safety) and ISO 14001 (environmental management) standards.
+Added: Additionally, we are a certified partner through the American Chemistry Council’s Responsible Care® Management System, which guides the continual improvement of our environmental, health, and safety practices and performance.
Workforce Talent and Diversity.
We are committed to attracting and retaining highly skilled and diverse employees and are proud that our workforce is made up of talented people from a variety of backgrounds.
−Removed: This commitment to diversity as a driver of our long-term success is one that we strive to uphold throughout the Company, including through all stages of our human resources process, from recruitment and hiring to talent retention.
−Removed: We encourage and support employee resource and networking groups, our diversity and inclusion committee, and other employee groups, which offer educational, professional development, and community service opportunities.
+Added: This commitment to diversity, equity and inclusion as a driver of our long-term success is one that we strive to uphold throughout the Company, including through all stages of our human resources process, from recruitment and hiring to talent retention.
+Added: We encourage and support employee resource and networking groups, our diversity, equity and inclusion committee, and other employee groups, which offer educational, professional development, and community service opportunities.
We also provide focused training, mentoring, and employee development for specialized positions, such as plant managers, engineers, accountants, and more.
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We pride ourselves on maintaining an active dialogue with our employees.
−Removed: In our facilities, for example, we benchmark overall employee engagement with an annual cross-organization survey targeting metrics such as safety, job satisfaction, and more.
+Added: We benchmark overall employee engagement with an annual cross-organization survey targeting metrics such as safety, job satisfaction and more, and use the results of this survey to guide our efforts to improve the employee experience.
Human Rights.
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Marchetto 53 Executive Vice President and Chief Financial Officer 2001
−Removed: Madison 61 Executive Vice President, Services Operations 2016
McDowell 61 Vice President and Chief Accounting Officer 2013
Mitchell 57 Executive Vice President and Chief Commercial Officer 2007
−Removed: Kevin Poet 55 Executive Vice President, Production Operations and Support Services 2020
+Added: Kevin Poet 56 Executive Vice President, Operations and Support Services 2020
Teachout 50 Executive Vice President and Chief Legal Officer 2016
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He joined the Company in 1995.
−Removed: Madison has served as Executive Vice President, Services Operations since 2020.
−Removed: He joined the Company in 2016 as President of Trinity Industries Leasing Company.
−Removed: Prior to joining the Company, he served as Executive Vice President at Key Equipment Finance from 2010 to 2016, overseeing manufacturer and vendor alliances.
−Removed: Prior to his tenure at Key Equipment, he served as General Manager, Microsoft Financing for Microsoft Corp.
McDowell has served as Vice President and Chief Accounting Officer since 2018.
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Prior to joining Trinity in 2007, he served as an executive or in senior leadership in supply chain for companies such as Glazers Corporation, Gap Inc., and Wal-Mart.
−Removed: Poet has served as Executive Vice President, Production Operations and Support Services since 2021, having previously served as Executive Vice President, Support Services since 2020.
+Added: Poet has served as Executive Vice President, Operations and Support Services since 2022, having previously served as Executive Vice President, Support Services since 2020.
He joined Trinity in 2020 from Siemens AG, where from 2016 to 2019 he served in a variety of operational roles, including most recently as Vice President of Operations for Siemens Energy, Inc.
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Commitment to Sustainability.
−Removed: We recognize that further integrating the key principles of sustainability, including environmental stewardship, safety and quality assurance, corporate social responsibility, governance, and diversity and inclusion, are important to enhancing the Company’s long-term value.
+Added: We recognize that further integrating the key principles of sustainability, including environmental stewardship, safety and quality assurance, corporate social responsibility, governance, and diversity, equity and inclusion, are important to enhancing the Company’s long-term value.
We strive to employ company resources in ways that make positive contributions to our stakeholders and the communities in which we operate.
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We are committed to contributing to a more resource-efficient economy and embedding climate change mitigation into our business strategy to help confront challenges such as energy management, fuel economy and efficiency, and materials sourcing.
−Removed: We aim to operate our business in a manner that minimizes the impact on natural resources and the environment.
+Added: We aim to operate our business in a manner that minimizes the impact on natural resources and the environment, and have certified all of our railcar manufacturing and maintenance facilities, as well as our corporate headquarters, to the ISO 14001 (environmental management) standard.
We believe railcars are a more environmentally-friendly way to fuel the North American supply chain.
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We strive to responsibly support customers' products at each stage of the product lifecycle, including recycling the railcar through scrap and salvage at the end of its useful life.
+Added: Additionally, our sustainable railcar conversion program repurposes and reuses railcar materials and components to sustainably bring renewed life to existing assets.
Social Responsibility.
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Our Board of Directors and senior management teams are also committed to the Company’s continued respect for human rights throughout all our operations.
+Added: The Corporate Governance and Directors Nominating Committee of our Board oversees (i) the preparation of the Company's Corporate Social Responsibility Report and (ii) the actions and steps taken towards the Company's environmental, social, and governance goals.
Green Financing Framework.
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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.