What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-21 compared with 2022-02-17 · 418 added, 440 removed, 1357 unchanged (39% of the section changed)

37 unchanged sentences

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date.

Auditing the Company’s recognition of deferred tax assets and liabilities was complex because the Company is required to identify and evaluate differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and other tax attributes based on enacted law and tax rates for multiple federal and state tax jurisdictions to determine the amount of such deferred tax assets and liabilities.

Auditing the Company’s recognition of deferred tax assets and liabilities was complex because the Company is required to identify and evaluate differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and other tax attributes based on enacted laws and tax rates for multiple federal and state tax jurisdictions to determine the amount of such deferred tax assets and liabilities.

In addition, a higher degree of auditor judgment was required to evaluate the Company’s deferred income tax provision as a result of the Company’s application of tax law in each jurisdiction.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the recognition of deferred tax assets and liabilities, including controls over the accuracy and completeness of permanent and temporary differences, the valuation of deferred income tax assets and liabilities and changes in tax laws and regulations that may impact the Company’s deferred income tax provision.

Among other audit procedures performed, we assessed the completeness and accuracy of deferred tax assets and deferred tax liabilities based on enacted law and tax rates for the appropriate tax jurisdictions to determine the amount of such deferred tax assets and liabilities.

In addition, we assessed the reasonableness of the Company’s deferred income tax provision based on application of tax law in each jurisdiction the Company operates in.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the recognition of deferred tax assets and liabilities, including controls over the completeness and accuracy of permanent and temporary differences, the valuation of deferred income tax assets and liabilities and changes in tax laws and regulations that may impact the Company’s deferred income tax provision.

Our audit procedures also included, among others, (i) obtaining an understanding of the Company’s overall tax structure, evaluating changes in the Company’s tax structure that occurred during the year as well as changes in tax law, and assessing the interpretation of those changes under the relevant jurisdiction’s tax law;

(ii) utilizing tax resources with appropriate knowledge of jurisdictional laws and regulations;

(iii) evaluating the completeness and accuracy of deferred tax assets and deferred tax liabilities based on enacted law and tax rates for the appropriate tax jurisdictions;

and (iv) assessing the reasonableness of the Company’s deferred income tax provision based on application of tax law in each jurisdiction the Company operates in.

/s/ ERNST & YOUNG LLP

22 unchanged sentences

Gains on dispositions of property:

Lease portfolio sales (Note 1) 54.1 17.3 50.5

Lease portfolio sales 127.5 54.1 17.3

Other 25.2 24.1 2.7

15 unchanged sentences

Income (loss) from continuing operations 98.9 39.3 ( 250.5 )

Income from discontinued operations, net of provision for income taxes of $ 3.5 , $ 5.5 , and $ 1.7

Income (loss) from discontinued operations, net of provision (benefit) for income taxes of $( 1.1 ), $ 3.5 , and $ 5.5

( 20.3 ) 11.1 24.3

Gain on sale of discontinued operations, net of provision for income taxes of $ 51.9 , $ — , and $ —

Gain (loss) on sale of discontinued operations, net of provision (benefit) for income taxes of $( 1.4 ), $ 51.9 , and $ —

( 5.7 ) 131.4 —

Net income (loss) 72.9 181.8 ( 226.2 )

Net loss attributable to noncontrolling interest ( 0.2 ) ( 78.9 ) ( 1.5 )

Net income (loss) attributable to noncontrolling interest 12.8 ( 0.2 ) ( 78.9 )

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

2 unchanged sentences

Income (loss) from continuing operations $ 1.05 $ 0.39 $ ( 1.48 )

Income from discontinued operations 1.40 0.21 0.11

Income (loss) from discontinued operations ( 0.32 ) 1.40 0.21

Basic net income (loss) attributable to Trinity Industries, Inc.

2 unchanged sentences

Income (loss) from continuing operations $ 1.02 $ 0.38 $ ( 1.48 )

Income from discontinued operations 1.37 0.21 0.11

Income (loss) from discontinued operations ( 0.31 ) 1.37 0.21

Diluted net income (loss) attributable to Trinity Industries, Inc.

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Settlement of pension plan, net of tax benefit of $ — , $ — , and $ 34.9

Unrealized gains (losses) arising during the period, net of tax (benefit) expense of $ 0.1 , $ 2.7 , and $( 9.0 )

0.3 7.7 ( 30.2 )

Unrealized gains arising during the period, net of tax expense of $ 0.5 , $ 0.1 , and $ 2.7

Amortization of prior service cost, net of tax benefit of $ — , $ — , and $ 0.3

Amortization of net actuarial losses, net of tax benefit of $ 0.1 , $ 0.1 , and $ 1.3

Currency translation adjustments:

Reclassification adjustments for losses included in discontinued operations, net of tax benefit of $ — , $ — , and $ —

36.4 15.1 123.4

22 unchanged sentences

Goodwill 195.9 154.2

Assets of discontinued operations — 178.5

Other assets 386.6 266.5

9 unchanged sentences

Deferred income taxes 1,134.7 1,106.8

Liabilities of discontinued operations — 18.5

Other liabilities 163.9 147.9

6 unchanged sentences

Retained earnings 992.6 1,046.6

Accumulated other comprehensive loss ( 17.0 ) ( 30.9 )

Accumulated other comprehensive income (loss) 19.7 ( 17.0 )

Treasury stock – shares at December 31, 2022 – 0.0 ;

14 unchanged sentences

Net income (loss) $ 72.9 $ 181.8 $ ( 226.2 )

Income from discontinued operations, net of income taxes ( 11.1 ) ( 24.3 ) ( 13.7 )

Gain on sale of discontinued operations, net of income taxes ( 131.4 ) — —

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

(Income) loss from discontinued operations, net of income taxes 20.3 ( 11.1 ) ( 24.3 )

(Gain) loss on sale of discontinued operations, net of income taxes 5.7 ( 131.4 ) —

Adjustments to reconcile net income (loss) to net cash provided by operating activities − continuing operations:

Depreciation and amortization 276.4 265.7 258.5

Stock-based compensation expense 22.5 20.7 25.4

Provision for deferred income taxes 13.1 238.5 52.6

Provision (benefit) for deferred income taxes 14.7 13.1 238.5

Net gains on lease portfolio sales ( 126.2 ) ( 54.1 ) ( 17.3 )

5 unchanged sentences

Non-cash interest expense 13.2 13.7 13.7

Loss on early extinguishment of debt 11.7 5.0 —

Loss on extinguishment of debt 1.5 11.7 5.0

Other ( 5.3 ) ( 3.1 ) 0.1

9 unchanged sentences

Net cash provided by (used in) operating activities – discontinued operations ( 22.0 ) ( 3.8 ) 29.7

Net cash provided by operating activities 611.8 651.7 393.6

Net cash provided by (used in) operating activities ( 12.8 ) 611.8 651.7

Investing activities:

1 unchanged sentence

Proceeds from lease portfolio sales 750.7 454.3 138.7

Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less with a net cost of $ 54.0 and $ 319.3 for the years ended December 31, 2020 and 2019, respectively

Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less with a net cost of $ 54.0 for the year ended December 31, 2020

( 928.8 ) ( 547.2 ) ( 602.2 )

2 unchanged sentences

Proceeds from insurance recoveries 10.0 9.5 —

Other 0.1 — —

Equity investments ( 15.5 ) 0.1 —

Net cash used in investing activities – continuing operations ( 258.0 ) ( 83.0 ) ( 526.7 )

Proceeds from sale of discontinued operations 364.7 — —

Proceeds (payments) related to sale of discontinued operations ( 2.7 ) 364.7 —

Net cash used in investing activities – discontinued operations — ( 5.4 ) ( 6.2 )

6 unchanged sentences

Purchase of shares to satisfy employee tax on vested stock ( 5.7 ) ( 9.3 ) ( 9.5 )

Contributions from (distributions to) noncontrolling interest ( 11.2 ) 6.1 ( 2.2 )

Distributions to noncontrolling interest ( 22.3 ) ( 11.2 ) 6.1

Other — — ( 0.1 )

5 unchanged sentences

Interest paid $ 190.5 $ 178.4 $ 205.5

Income tax refunds, net of payments $ 435.7 $ 62.5 $ 16.7

Income tax (payments) refunds $ ( 19.3 ) $ 435.7 $ 62.5

See accompanying notes to Consolidated Financial Statements.

2 unchanged sentences

Consolidated Statements of Stockholders' Equity

Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Trinity Stockholders’ Equity Noncontrolling Interest Total Stockholders’ Equity

Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Trinity Stockholders’ Equity Noncontrolling Interest Total Stockholders’ Equity

Shares $ 0.01 Par Value

2 unchanged sentences

Balances at December 31, 2019 119.7 $ 1.2 $ — $ 2,182.9 $ ( 153.1 ) ( 0.1 ) $ ( 0.9 ) $ 2,030.1 $ 348.8 $ 2,378.9

Net income (loss) — — — 137.6 — — — 137.6 ( 1.5 ) 136.1

Other comprehensive income (loss) — — — — ( 36.3 ) — — ( 36.3 ) 1.3 ( 35.0 )

Net loss — — — ( 147.3 ) — — — ( 147.3 ) ( 78.9 ) ( 226.2 )

Other comprehensive income — — — — 122.2 — — 122.2 1.2 123.4

Cash dividends declared on common stock (1)

— — — ( 90.7 ) — — — ( 90.7 ) — ( 90.7 )

Distributions to noncontrolling interest — — — — — — — — ( 2.2 ) ( 2.2 )

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

Stock-based compensation expense — — 25.4 — — — — 25.4 — 25.4

5 unchanged sentences

Balances at December 31, 2020 111.2 $ 1.1 $ — $ 1,769.4 $ ( 30.9 ) ( 0.1 ) $ ( 0.8 ) $ 1,738.8 $ 277.2 $ 2,016.0

Net loss — — — ( 147.3 ) — — — ( 147.3 ) ( 78.9 ) ( 226.2 )

Net income (loss) — — — 182.0 — — — 182.0 ( 0.2 ) 181.8

Other comprehensive income — — — — 13.9 — — 13.9 1.2 15.1

1 unchanged sentence

— — — ( 84.3 ) — — — ( 84.3 ) — ( 84.3 )

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

Distributions to noncontrolling interest — — — — — — — — ( 11.2 ) ( 11.2 )

Stock-based compensation expense — — 20.7 — — — — 20.7 — 20.7

1 unchanged sentence

Shares repurchased — — — — — ( 25.2 ) ( 706.6 ) ( 706.6 ) — ( 706.6 )

Accelerated share repurchase agreement — — ( 25.0 ) — — ( 3.3 ) ( 100.0 ) ( 125.0 ) — ( 125.0 )

Retirement of treasury stock ( 29.1 ) ( 0.3 ) — ( 820.0 ) — 29.1 820.3 — — —

Cumulative effect of adopting new accounting standards — — — 0.5 — — — 0.5 — 0.5

Other — — — 0.5 — — — 0.5 — 0.5

Balances at December 31, 2021 83.3 $ 0.8 $ — $ 1,046.6 $ ( 17.0 ) — $ ( 0.6 ) $ 1,029.8 $ 267.0 $ 1,296.8

Net income (loss) — — — 182.0 — — — 182.0 ( 0.2 ) 181.8

Other comprehensive income — — — — 13.9 — — 13.9 1.2 15.1

Net income — — — 60.1 — — — 60.1 12.8 72.9

Other comprehensive income (loss) — — — — 36.7 — — 36.7 ( 0.3 ) 36.4

Cash dividends declared on common stock (1)

19 unchanged sentences

Sale of Highway Products Business

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 ("Rush Hour"), 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.

THP is a leading manufacturer and global supplier of commercial highway products.

A final working capital adjustment was recorded in the second quarter of 2022.

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.

15 unchanged sentences

Contingent rents are recognized when the contingency is resolved.

Selling profit or loss associated with sales-type leases is recognized upon lease commencement, and a net investment in the sales-type lease is recorded on the Consolidated Balance Sheet.

Selling profit or loss associated with sales-type leases is recognized upon lease commencement, and a net investment in the sales-type lease is recorded in the Consolidated Balance Sheets.

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 December 31, 2021 and 2020.

See "Lease Accounting" below for additional information regarding sales-type leases as of December 31, 2022.

We had no sales-type leases as of December 31, 2021.

During the fourth quarter of 2020, we began presenting sales from our lease fleet in the Leasing 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 years ended December 31, 2020 and 2019 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 year ended December 31, 2020 only include sales of railcars from the lease fleet owned for more than one year.

There were no lease portfolio sales during the fourth quarter of 2020.

5 unchanged sentences

Rail Products Group

Our railcar manufacturing business recognizes revenue when the customer has submitted its certificate of acceptance and legal title of the railcar has passed to the customer.

Certain contracts for the sales of railcars include price adjustments based on steel-price indices;

Our railcar manufacturing business recognizes revenue related to new railcars when the customer has submitted its certificate of acceptance and legal title of the railcar has passed to the customer.

Certain contracts for the sales of railcars include price adjustments based on changes to input costs;

this amount represents variable consideration for which we are unable to estimate the final consideration until the railcar is delivered.

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 $ 4.5 million and $ 4.4 million as of December 31, 2021 and 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.

Revenue is recognized over time as repair and maintenance projects and sustainable railcar conversions 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 $ 2.9 million and $ 4.5 million as of December 31, 2022 and 2021, respectively, related to unbilled revenues recognized on repair and maintenance services and sustainable railcar conversions 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.

10 unchanged sentences

Sustainable railcar conversions $ 166.5 73.5 %

$ 111.5 95.7 %

Maintenance services $ 3.0 100.0 %

Railcar Leasing and Management Services Group $ 75.5 20.4 %

(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 changing market demands.

(1) Unsatisfied performance obligations at December 31, 2022 include 15,000 railcars expected to be delivered through 2028, valued at approximately $ 1.8 billion, associated with a new long-term railcar supply agreement with GATX Corporation .

The remainder of the unsatisfied performance obligations for the Rail Products Group is expected to be delivered through 2028.

3 unchanged sentences

Lease Accounting

We are the lessee of operating leases predominantly for railcars, as well as office buildings, manufacturing equipment, and office equipment.

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

We are the lessee of operating leases predominantly for office buildings and railcars, as well as manufacturing equipment and office equipment.

Our operating leases have remaining lease terms ranging from one year to fourteen 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 December 31, 2022, we had no material finance leases in which we were the lessee.

37 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 early termination options with certain notice requirements and early termination penalties.

As of December 31, 2021, non-Leasing Group operating leases were not significant, and we had no sales-type leases and no direct finance leases.

As of December 31, 2022, non-Leasing Group operating leases were not significant, and we had 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 actively participating in secondary markets.

1 unchanged sentence

Our lease agreements do not contain any material residual value guarantees or restrictive covenants.

The following table summarizes the impact of our leases in our Consolidated Statement of Operations (in millions):

The following table summarizes the impact of our leases in our Consolidated Statements of Operations (in millions):

2022 2021 2020

1 unchanged sentence

Variable operating lease revenues $ 60.3 $ 54.2 $ 51.0

Sales-type lease revenues $ — $ — $ 160.5

Interest income on sales-type lease receivables $ 0.7 $ — $ —

Profit recognized at sales-type lease commencement (1)

$ 1.3 $ — $ —

(1) Included in gains on dispositions of property – lease portfolio sales on our Consolidated Statements of Operations.

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

2 unchanged sentences

(1) Total contractual minimum rental revenues on operating leases relates to our wholly-owned and partially-owned subsidiaries and sub-lease rental revenues associated with the Leasing Group's operating lease obligations.

Future contractual minimum lease receivables for sales-type leases will mature as follows (in millions):

Thereafter 10.1

Unearned interest income ( 5.0 )

Net investment in sales-type leases (1)

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

The liability method is used to account for income taxes.

Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases and other attributes using currently enacted tax laws and tax rates.

Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized.

13 unchanged sentences

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

The balance of the allowance for credit losses that are in the scope of ASC 326, Financial Instruments – Credit Losses was $ 10.5 million and $ 9.0 million at December 31, 2021 and 2020, respectively.

During the year ended December 31, 2022, we recognized approximately $ 2.0 million of credit loss expense and wrote off $ 1.9 million related to our trade receivables that are in scope of ASC 326, Financial Instruments – Credit Losses, bringing the allowance for credit losses balance from $ 10.5 million at December 31, 2021 to $ 10.6 million at December 31, 2022.

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

8 unchanged sentences

Leasehold improvements Generally over the term of the lease

Machinery and equipment 2 – 10 years

Machinery and equipment Generally 3 – 12 years

Information systems hardware and software 3 – 5 years

Railcars in our lease fleet Generally 35 – 40 years

In early 2020, we finalized an assessment of the estimated useful lives and salvage value assumptions for the railcars in our lease fleet.

Based upon analysis of historical fleet data, review of industry standards, and consideration of certain economic factors by railcar type, we determined that it was appropriate to revise the useful lives and salvage values of certain railcar types in our lease fleet.

The net impact of these changes, which took effect January 1, 2020, resulted in a change in the weighted average useful life from approximately 34 years to approximately 37 years.

This change was accounted for as a change in accounting estimate, which is required to be accounted for on a prospective basis.

For the years ended December 31, 2021 and 2020, this change in estimate resulted in a decrease in depreciation expense and a corresponding increase in income from continuing operations of approximately $ 30.8 million, as well as an increase in net income of approximately $ 23.7 million.

Further, earnings per share increased $ 0.23 and $ 0.20 per share for the years ended December 31, 2021 and 2020, respectively.

See Note 11 for further information regarding impairment of long-lived assets related to our small cube covered hopper railcars recorded in the year ended December 31, 2020.

Impairment of Long-lived Assets

5 unchanged sentences

See Note 11 for more information, including a description of the key assumptions and other significant management judgments utilized in these impairment analyses.

Based on our evaluations, no impairment charges were determined to be necessary on assets held and used as of December 31, 2021.

Based on our evaluations, no impairment charges were determined to be necessary on assets held and used as of December 31, 2022 and 2021.

Assets Held for Sale

2 unchanged sentences

As of December 31, 2022 and 2021, assets held for sale totaling $ 6.6 million and $ 6.2 million, respectively, are included in the other assets line of our Consolidated Balance Sheets.

During the fourth quarter of 2021, we sold our prior corporate headquarters facility, which was previously classified as held for sale as of December 31, 2020.

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 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 and intellectual property of $ 11.3 million, which will be amortized over fifteen years.

There was no acquisition activity for the year ended December 31, 2020.

Goodwill and Intangible Assets

6 unchanged sentences

Impairment is assessed at the reporting unit level by applying a fair value-based test for each unit with recorded goodwill.

The estimates and judgments that most significantly affect the fair value calculations are assumptions, consisting of level three inputs, related to revenue and operating profit results, discount rates, terminal growth rates and exit multiples.

The estimates and judgments that most significantly affect the fair value calculations are assumptions, consisting of Level 3 inputs, related to revenue and operating profit results, discount rates, terminal growth rates and exit multiples.

As of December 31, 2022 and 2021, our annual impairment test of goodwill was completed at the reporting unit level, and no impairment charges were determined to be necessary.

5 unchanged sentences

$ 195.9 $ 154.2

The net book value of intangible assets totaled $ 28.1 million and $ 8.9 million as of December 31, 2021 and 2020, respectively, which are finite-lived intangible assets amortized over their estimated useful lives ranging from one year to fifteen years .

The net book value of intangible assets totaled $ 79.0 million and $ 28.1 million as of December 31, 2022 and 2021, respectively, which are primarily finite-lived intangible assets amortized over their estimated useful lives, ranging from one year to fifteen years .

See Note 2 for further information regarding the changes in the carrying amounts of our goodwill and intangible assets related to acquisition activity for the year ended December 31, 2022.

Based on our evaluations of intangible assets, no impairment charges were determined to be necessary as of December 31, 2022 and 2021.

8 unchanged sentences

See Note 5 for further information regarding our partially-owned leasing subsidiaries.

Other Investments

In August 2021, the Company and Wafra, Inc.

announced a new railcar investment vehicle ("RIV") program between Trinity and certain funds managed by Wafra, Inc.

("Wafra Funds").

The joint venture created as part of this program, known as Signal Rail Holdings LLC ("Signal Rail"), is owned 90 % by Wafra Funds and 10 % by our wholly-owned subsidiary, Trinity Industries Leasing Company ("TILC").

Upon consideration under the VIE model, Trinity has concluded that Signal Rail meets the definition of a VIE;

however, Trinity is not the primary beneficiary and therefore does not consolidate this entity as we do not have the power to direct the activities of the entity that most significantly impact its economic performance.

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

At December 31, 2021, the carrying value of TILC’s equity investment in Signal Rail was $ 6.3 million, which is included in other assets in our Consolidated Balance Sheet.

We hold certain other investments for which we do not have a controlling financial interest but have a significant influence over the financial and operating policies.

The carrying values of our equity method investments totaled approximately $ 4.4 million and $ 4.0 million as of December 31, 2021 and 2020, respectively.

We are effectively self-insured for workers' compensation and employee health care claims.

19 unchanged sentences

Certain transactions in Mexico occur in currencies other than the United States dollar.

The impact of foreign currency fluctuations on these transactions is recorded in other, net (income) expense in our Consolidated Statement of Operations.

The impact of foreign currency fluctuations on these transactions is recorded in other, net (income) expense in our Consolidated Statements of Operations.

Other Comprehensive Income (Loss)

1 unchanged sentence

All components are shown net of tax.

Recent Accounting Pronouncements

ASU 2022-04 – In September 2022, the FASB issued ASU No.

2022-04, "Disclosure of Supplier Finance Program Obligations," which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose information about the key terms of these programs, outstanding amounts as of the end of the reporting period, a description of where in the financial statements outstanding amounts are presented, and a rollforward of these obligations.

ASU 2022-04 is effective for public companies during interim and annual reporting periods beginning after December 15, 2022 and is to be adopted on a retrospective basis, except for the disclosure of rollforward information, which is effective for public companies during interim and annual reporting periods beginning after December 15, 2023 and is to be adopted on a prospective basis.

Early adoption is permitted.

We adopted ASU 2022-04 effective January 1, 2023.

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

Management's Estimates

1 unchanged sentence

Actual results could differ from those estimates.

Discontinued Operations

Acquisitions and Discontinued Operations

Acquisition of Holden America

On December 30, 2022, we acquired Holden America ("Holden"), a manufacturer of market-leading multi-level vehicle securement and protection systems, gravity-outlet gates, and gate accessories for freight rail in North America.

The total cash funded at closing was $ 71.4 million, which, when combined with potential additional future consideration valued at $ 15.7 million, resulted in total consideration of $ 87.1 million.

The purchase agreement includes minimum additional consideration of $ 10.0 million, which is payable in installments of $ 5.0 million per year for the next two years.

The purchase agreement also contains a provision whereby additional consideration could become payable based on the achievement of certain revenue targets, up to a maximum payout of $ 10.0 million.

The total additional consideration, which is included in other liabilities in our Consolidated Balance Sheets, had an initial estimated fair value of $ 15.7 million and will be remeasured at each reporting period, with the change in fair value recognized within selling, engineering, and administrative expenses in the Consolidated Statements of Operations.

The fair values of the assets acquired and liabilities assumed are considered preliminary and are subject to adjustment as additional information is obtained and reviewed.

The final allocation of the purchase price may differ from the preliminary allocation based on completion of the valuation.

We expect to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.

Based on our preliminary purchase price allocation, we recorded identifiable intangible assets of $45.9 million, comprised of customer relationships, patents, trade name and backlog;

goodwill of $36.4 million;

and certain other immaterial assets, net of liabilities, totaling $4.8 million.

The identifiable intangible assets, with the exception of the trade name, which will be considered an indefinite-lived intangible asset, will be amortized over their estimated useful lives, ranging from 1 year to 15 years.

The primary areas of the purchase price allocation that are not yet finalized relate to the valuation of intangible assets, goodwill and certain other immaterial assets and liabilities.

Other Acquisitions

In June 2022, the Leasing Group acquired a portfolio of railcars for $ 132.1 million in cash.

This transaction was recorded as an asset acquisition within the Leasing Group, based on valuations of the acquired assets and liabilities at their acquisition date fair value using Level 3 inputs.

As a result of the purchase transaction, the Leasing Group acquired approximately 3,800 railcars, substantially all of which are currently under lease to third parties.

We recorded acquired railcars of $ 125.0 million, lease-related intangible assets of $ 7.8 million, and certain other immaterial assets and liabilities in our Consolidated Balance Sheet as of the purchase date.

In May 2022, we completed the acquisition of a company that owns and operates an end-to-end rail logistics software platform providing a real-time data universe to freight rail shippers and operators.

This transaction was recorded as a business combination within the Leasing 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.

Based on our preliminary purchase price allocation, we recorded intellectual property of $ 5.2 million, which will be amortized over five years, goodwill of $ 5.3 million, and certain other immaterial assets and liabilities.

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

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

This transaction resulted in goodwill of $ 7.0 million and intellectual property of $ 11.3 million, which will be amortized over fifteen years.

Sale of Highway Products Business

1 unchanged sentence

The sale closed on December 31, 2021, and we received net proceeds of approximately $ 364.7 million, after certain adjustments and closing costs.

Substantially all of the proceeds from the sale were used to return capital to stockholders.

We recorded a gain of $ 183.3 million ($ 131.4 million, net of income taxes), which is net of related transaction costs of approximately $ 14.7 million.

These transaction costs primarily relate to investment banking fees and professional fees associated with various legal, accounting, and tax matters related to the sale.

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.

During the year ended December 31, 2022, we recorded a loss on sale of discontinued operations of $ 5.8 million ($ 4.4 million, net of income taxes), which included a $ 2.7 million payment to Rush Hour representing a final working capital adjustment, as well as additional transaction costs incurred during the period.

We concluded that the sale of THP represented a strategic shift that will have a major effect on the Company’s operations and financial results.

Accordingly, we have presented the operating results and cash flows of THP as discontinued operations for all periods in this 2022 Annual Report on Form 10-K.

In connection with the sale, Trinity and Rush Hour entered into various agreements to effect the distribution and provide a framework for their relationship after the separation, including a purchase and sale agreement, a transition services agreement, and a lease agreement.

These agreements have various durations ranging between one and eighteen months.

We have determined that the continuing cash flows generated by these agreements do not constitute significant continuing involvement in the operations of THP.

The amount billed for transition services provided under the above agreements is not expected to be material to our results of operations.

In connection with the sale, Trinity and Rush Hour entered into various agreements to effect the transaction and provide a framework for their relationship after the separation, including a purchase and sale agreement, a transition services agreement, and a lease agreement.

The transition services have various durations ranging between one and eighteen months.

We determined that the continuing cash flows generated by these agreements did not constitute significant continuing involvement in the operations of THP.

The amount billed for transition services was not material to our results of operations for the year ended December 31, 2022.

Additionally, in connection with the sale of THP, the Company has agreed to indemnify Rush Hour for certain liabilities related to the highway products business, including certain liabilities resulting from or arising out of the ET-Plus® System, a highway guardrail end-terminal system (the “ET Plus”).

Consequently, results from discontinued operations below include certain legal expenses that were directly attributable to the highway products business, which were previously reported in continuing operations.

In the table below, selling, engineering, and administrative expenses for the year ended December 31, 2021 include a pre-tax $ 23.9 million litigation charge recorded for the Missouri class action based on the Company's assessment that a settlement is probable.

Similar expenses incurred in the future related to these retained obligations will likewise be reported in discontinued operations.

Expenses related to these retained obligations incurred during the year ended December 31, 2022 were, and similar expenses that may be incurred in the future will likewise be, reported in discontinued operations.

See Note 15 for further information regarding obligations retained in connection with the THP sale.

The following is a summary of THP's operating results included in income from discontinued operations for the years ended December 31, 2021, 2020, and 2019:

The following is a summary of THP's operating results included in income (loss) from discontinued operations for the years ended December 31, 2022, 2021, and 2020:

Year Ended December 31,

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Other income — — ( 0.3 )

Income from discontinued operations before income taxes 14.6 30.0 19.5

Provision for income taxes 2.7 5.6 2.7

Income from discontinued operations, net of income taxes $ 11.9 $ 24.4 $ 16.8

The following is a summary of THP's assets and liabilities attributable to discontinued operations, which were included in our Consolidated Balance Sheet as of December 31, 2020:

(in millions)

Receivables, net of allowance $ 34.6

Inventories 36.0

Property, plant, and equipment, net 34.6

Goodwill 61.6

Other assets 11.7

Total assets, discontinued operations $ 178.5

Accounts payable $ 10.3

Accrued liabilities 4.7

Other liabilities 3.5

Total liabilities, discontinued operations $ 18.5

Spin-off of Arcosa

In November 2018, we completed the spin-off of Arcosa, Inc ("Arcosa").

Upon completion of the spin-off transaction, the accounting requirements for reporting Arcosa as a discontinued operation were met, and, accordingly, Arcosa's historical results have been presented as discontinued operations for the periods presented herein.

The following is a summary of Arcosa's operating results included in income from discontinued operations for the years ended December 31, 2021, 2020, and 2019:

Year Ended December 31,

2021 2020 2019

(in millions)

Revenues $ — $ — $ —

Cost of revenues — — —

Selling, engineering, and administrative expenses — 0.2 4.1

Other (income) expense — — —

Loss from discontinued operations before income taxes — ( 0.2 ) ( 4.1 )

Income (loss) from discontinued operations before income taxes ( 21.4 ) 14.6 30.0

Provision (benefit) for income taxes ( 1.1 ) 2.7 5.6

Loss from discontinued operations, net of income taxes $ ( 0.8 ) $ ( 0.1 ) $ ( 3.1 )

Income (loss) from discontinued operations, net of income taxes $ ( 20.3 ) $ 11.9 $ 24.4

Other discontinued operations

In addition to the THP activities disclosed above, results include certain amounts related to businesses previously disposed, including $ 1.3 million of loss on sale of discontinued operations, net of income taxes for the year ended December 31, 2022, and losses of $ 0.8 million, and $ 0.1 million included in income (loss) from discontinued operations, net of income taxes for the years ended December 31, 2021 and 2020, respectively.

Derivative Instruments and Fair Value Measurements

Derivative Instruments

We use derivative instruments to mitigate the impact of changes in interest rates, both in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding.

We use derivative instruments to mitigate interest rate risk, including risks associated with the impact of changes in interest rates in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding.

We also use derivative instruments to mitigate the impact of changes in foreign currency exchange rates.

Derivative instruments that are designated and qualify as cash flow hedges are accounted for by recording the effective portion of the gain or loss on the derivative instrument in accumulated other comprehensive loss ("AOCL") as a separate component of stockholders' equity.

Derivative instruments that are designated and qualify as cash flow hedges are accounted for by recording the effective portion of the gain or loss on the derivative instrument in accumulated other comprehensive income or loss ("AOCI") as a separate component of stockholders' equity.

These accumulated gains or losses are reclassified into earnings in the periods during which the hedged transactions affect earnings.

Derivative instruments that are not designated as hedges are accounted for by recording the realized and unrealized gains or losses on the derivative instrument in other, net (income) expense in our Consolidated Statements of Operations.

We continuously monitor our derivative positions and the credit ratings of our counterparties and do not anticipate losses due to non-performance.

See Note 8 for a description of our debt instruments.

Derivatives Designated as Hedging Instruments

Interest Rate Hedges

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at December 31, 2022

AOCL – loss/(income)

AOCI – loss/(income)

Amount Interest

Asset/(Liability) Controlling Interest Noncontrolling

(in millions, except %)

($ in millions)

Expired hedges:

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TRIP Holdings warehouse loan $ 788.5 3.60 % $ — $ 0.1 $ —

Tribute Rail secured railcar equipment notes (2)

$ 256.0 2.86 % $ — $ 0.8 $ 1.0

2017 promissory notes – interest rate cap

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(1) Weighted average fixed interest rate, except for the interest rate cap on the 2017 promissory notes.

(2) In May 2022, Tribute Rail LLC ("Tribute Rail"), an indirect, wholly-owned subsidiary of TRIP Holdings, entered into and subsequently terminated a forward starting interest rate swap to hedge the risk of potential interest rate increases prior to the May 2022 Tribute Rail debt issuance.

Effect on interest expense – increase/(decrease)

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$ — $ 0.1 $ 0.2 $ —

Tribute Rail secured railcar equipment notes $ 0.4 $ — $ — $ 0.7

2017 promissory notes – interest rate cap

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Effect on cost of revenues – increase/(decrease)

Amount Asset/(Liability) AOCL –

Amount Asset/(Liability) AOCI –

loss/(income) Year Ended December 31, Expected effect during next twelve months (1)

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(1) Based on the fair value of open hedges as of December 31, 2022.

Derivatives Not Designated as Hedging Instruments (1)

Asset/(Liability)

December 31, 2022

Effect on other, net (income) expense – increase/(decrease)

Amount Interest

Rate Year Ended

2022 2021 2020

($ in millions)

TILC warehouse facility – interest rate cap $ 800.0 2.50 % $ 21.6 $ (1.6) $ — $ —

TILC – interest rate cap $ 800.0 2.50 % $ ( 21.6 ) $ 1.6 $ — $ —

(1) Derivatives not designated as hedging instruments are comprised of back-to-back interest rate caps entered into with the same counterparty that offset and do not have a net effect on Trinity's consolidated earnings.

These derivative contracts were entered into in connection with our risk management objectives.

Fair Value Measurements

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Treasury or highly-rated money market mutual funds.

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

The assets measured on a recurring basis as Level 1 in the fair value hierarchy are summarized below:

December 31, 2022 December 31, 2021

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or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Interest rate hedges are valued at exit prices obtained from each counterparty.

Interest rate swaps and interest rate caps are valued at exit prices obtained from each counterparty.

Foreign currency hedges are valued at exit prices obtained from each counterparty, which are based on currency spot and forward rates and forward points.

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

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

December 31, 2022 December 31, 2021

(in millions)

Interest rate hedge (1)

Foreign currency hedge (1)

Derivatives not designated as hedging instruments (1)

Total assets $ 43.3 $ —

Interest rate hedge (2)

$ 21.0 $ 45.2

Foreign currency hedge (2)

Derivatives not designated as hedging instruments (2)

Total liabilities $ 21.6 $ 21.1

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

As of December 31, 2022 and 2021, we have no assets or liabilities measured on a recurring basis as Level 3 in the fair value hierarchy.

See Note 2 for more information regarding non-recurring fair value measurements involving Level 3 inputs resulting from acquisition activity.

See Note 11 for more information regarding the non-recurring fair value measurement considerations during the year ended December 31, 2020 for the impairment charge related to our small cube covered hopper railcars.

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Provision (benefit) for income taxes 27.6 15.9 ( 274.1 )

Income from discontinued operations, net of income taxes 11.1 24.3 13.7

Gain on sale of discontinued operations, net of income taxes 131.4 — —

Income (loss) from discontinued operations, net of income taxes ( 20.3 ) 11.1 24.3

Gain (loss) on sale of discontinued operations, net of income taxes ( 5.7 ) 131.4 —

Net income (loss) $ 72.9 $ 181.8 $ ( 226.2 )

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Corporate and other 267.2 365.2

Assets of discontinued operations — 178.5

Eliminations – Lease Subsidiary ( 763.3 ) ( 779.1 )

Total assets $ 8,724.3 $ 8,235.9

Corporate and other assets are composed of cash and cash equivalents, short-term marketable securities, income tax receivable, notes receivable, certain property, plant, and equipment, and other assets.

Corporate and other assets are composed of cash and cash equivalents, short-term marketable securities, notes receivable, certain property, plant, and equipment, and other assets.

We operate principally in North America.

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Each of TRIP Holdings and RIV 2013 has wholly-owned subsidiaries that are the owners of railcars acquired from our Rail Products and Leasing Groups.

TRIP Holdings has wholly-owned subsidiaries known as Triumph Rail LLC ("Triumph Rail"), formerly known as TRIP Master Funding LLC ("TRIP Master Funding”), and TRIP Railcar Co.

LLC ("TRIP Railcar Co.").

RIV 2013 has a wholly owned-subsidiary known as TRP 2021 LLC ("TRP-2021"), formerly known as Trinity Rail Leasing 2012 LLC (“TRL-2012”).

TILC is the contractual servicer for Triumph Rail, TRIP Railcar Co., and TRP-2021, with the authority to manage and service each entity's owned railcars.

TRIP Holdings has wholly-owned subsidiaries known as Triumph Rail LLC ("Triumph Rail") and Tribute Rail.

RIV 2013 has a wholly owned-subsidiary known as TRP 2021 LLC ("TRP-2021").

TILC is the contractual servicer for Triumph Rail, Tribute Rail, and TRP-2021, with the authority to manage and service each entity's owned railcars.

Our controlling interest in each of TRIP Holdings and RIV 2013 results from our combined role as both equity member and agent/servicer.

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Trinity has no obligation to guarantee performance under any of our partially-owned subsidiaries' (or their respective subsidiaries') debt agreements, guarantee any railcar residual values, shield any parties from losses or guarantee minimum yields.

The assets of each of Triumph Rail, TRIP Railcar Co., and TRP-2021 may only be used to satisfy the particular subsidiary's liabilities, and the creditors of each of Triumph Rail, TRIP Railcar Co., and TRP-2021 have recourse only to the particular subsidiary's assets.

The assets of each of Triumph Rail, Tribute Rail, and TRP-2021 may only be used to satisfy the particular subsidiary's liabilities, and the creditors of each of Triumph Rail, Tribute Rail, and TRP-2021 have recourse only to the particular subsidiary's assets.

Each of TILC and the third-party equity investors receive distributions from TRIP Holdings and RIV 2013, when available, in proportion to its respective equity interests, and has an interest in the net assets of the partially-owned subsidiaries upon a liquidation event in the same proportion.

TILC is paid fees for the services it provides to Triumph Rail, TRIP Railcar Co., and TRP-2021 and has the potential to earn certain incentive fees.

TILC is paid fees for the services it provides to Triumph Rail, Tribute Rail, and TRP-2021 and has the potential to earn certain incentive fees.

There are no remaining equity commitments with respect to TRIP Holdings or RIV 2013.

See Note 8 regarding TRIP Holdings and RIV 2013, including the redemption and refinancing of the debt of their respective subsidiaries.

See Note 8 regarding TRIP Holdings and RIV 2013, including the debt issuance of Tribute Rail and the repayment of TRIP Railcar Co.

LLC's ("TRIP Railcar Co.") outstanding term loan agreement.

Investment in Unconsolidated Affiliate

In August 2021, the Company and Wafra announced a new RIV program between Trinity and Wafra Funds.

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

In August 2021, the Company and Wafra, Inc.

announced a new RIV program between Trinity and Wafra Funds.

As part of this program, a joint venture was formed, Signal Rail, which was 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 completed the first portfolio sale to Signal Rail under this program in 2021.

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 year ended December 31, 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.

In August 2022, TILC and certain of its subsidiaries sold a second portfolio comprised of 2,678 railcars and related leases to Signal Rail for an aggregate sales price of approximately $ 254.1 million.

TILC recognized a gain of approximately $ 25.1 million on the sale, and approximately $ 2.5 million was recognized as revenue for services performed associated with the delivery of railcars with attached leases, during the year ended December 31, 2022.

In connection with the sale, TILC contributed $ 13.5 million of cash to Signal Rail, resulting in an increase in TILC's weighted average equity ownership in Signal Rail to 12.9 %.

Signal Rail financed the August 2022 purchase primarily through a term loan.

To date, TILC has sold 6,260 railcars to Signal Rail for an aggregate sales price of $ 579.2 million.

Upon consideration under the 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 12.9 % 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 the primary beneficary and therefore does not 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 determined that Trinity is not the primary beneficiary and therefore does not 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 12.9 % equity interest in Signal Rail.

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

At December 31, 2021, the carrying value of TILC’s equity investment in Signal Rail was $ 6.3 million, which is included in other assets in our Consolidated Balance Sheet.

At December 31, 2022, the carrying value of TILC’s equity investment in Signal Rail was $ 20.2 million, which is included in other assets in our Consolidated Balance Sheets.

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

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Property, plant, and equipment, net 5,706.1 1,570.6 7,276.7 ( 779.1 ) 6,497.6

5,795.9 1,626.3 7,422.2 ( 820.3 ) 6,601.9

Restricted cash 76.5 58.6 135.1 — 135.1

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See Note 5 and Note 8 for a further discussion regarding our investment in our partially-owned leasing subsidiaries and the related indebtedness.

(2) See Note 11 for further information regarding impairment of long-lived assets recorded in the year ended December 31, 2020.

Year Ended December 31, Percent Change

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Sales of railcars owned one year or less at the time of sale (1)

— 54.4 360.7 * ( 84.9 ) %

Total revenues $ 770.6 $ 735.3 $ 802.3 4.8 % ( 8.4 ) %

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(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 year ended December 31, 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 years ended December 31, 2022 and 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.

(2) Includes revenues associated with sales-type leases of $ 160.5 million for the year ended December 31, 2019.

(2) Operating profit includes:

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

(4) In connection with our sustainable railcar conversion program, depreciation expense increased $ 8.8 million for the year ended December 31, 2021, as a result of the disposal of certain railcar components.

(3) Includes $ 1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022.

(4) Depreciation expense includes $ 12.1 million and $8.8 million for the years ended December 31, 2022 and 2021, respectively, related to 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 years ended December 31, 2021 and 2020 as a result of the impairment charge recorded in the second quarter of 2020 related to these railcars.

(5) Effective January 1, 2020, we revised the estimated useful lives and salvage values of certain railcar types in our lease fleet.

This change in estimate resulted in a decrease in depreciation expense of approximately $ 30.8 million in the years ended December 31, 2021 and 2020.

See Note 1 for further information.

(6) Interest expense for the year ended December 31, 2021 includes $ 11.7 million of loss on extinguishment of debt associated with the refinancing of our partially-owned subsidiaries' debt.

(5) Interest expense for the year ended December 31, 2022 includes $ 1.5 million of loss on extinguishment of debt associated with the repayment of TRIP Railcar Co.'s outstanding term loan agreement.

See Note 8 for more information.

Interest expense for the year ended December 31, 2021 includes $ 11.7 million of loss on extinguishment of debt associated with the refinancing of our partially-owned subsidiaries' debt.

Interest expense for the year ended December 31, 2020 includes $ 5.0 million of loss on extinguishment of debt associated with the early redemption of debt.

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Lease portfolio sales $ 750.7 $ 460.7 $ 193.1

$ 460.7 $ 193.1 $ 566.4

Operating profit on lease portfolio sales (1)

$ 126.2 $ 54.1 $ 17.7

Operating profit margin on lease portfolio sales 16.8 % 11.7 % 9.2 %

(1) Includes revenues associated with sales-type leases of $ 160.5 million for the year ended December 31, 2019.

(1) Excludes $ 1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022.

Railcar Leasing Equipment Portfolio.

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Creditors of each of TRIP Holdings and RIV 2013 and their respective subsidiaries have recourse only to the particular subsidiary's assets.

TRIP Holdings held equipment with a net book value of $ 1,110.7 million, which is pledged as collateral for the TRIP Holdings' debt held by its subsidiaries.

TRP-2021 equipment with a net book value of $ 459.9 million is pledged solely as collateral for the TRP-2021 debt.

As of December 31, 2022, TRIP Holdings held equipment with a net book value of $ 1,063.8 million, which is pledged solely as collateral for the TRIP Holdings' debt held by its subsidiaries.

As of December 31, 2022, TRP-2021 equipment with a net book value of $ 457.5 million is pledged solely as collateral for the TRP-2021 debt.

See Note 5 for a description of TRIP Holdings and RIV 2013 and their respective subsidiaries.

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(in millions)

Manufacturing/Corporate:

Manufacturing/Maintenance/Corporate:

Land $ 15.7 $ 17.4

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See Note 1 and Note 6 for information related to the lease agreements, future operating lease obligations, and future minimum rental revenues associated with the Leasing Group.

We capitalized an insignificant amount of interest expense as part of the construction of facilities and equipment during 2021 and 2020.

We estimate the fair market value of properties no longer in use based on the location and condition of the properties, the fair market value of similar properties in the area, and our experience selling similar properties in the past.

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See Note 1 for more information regarding assets classified as held for sale as of December 31, 2022 and 2021.

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

The carrying amounts and estimated fair values of our debt are as follows:

December 31, 2022 December 31, 2021

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307.7 253.9 320.3 319.6

2022 secured railcar equipment notes, net of unamortized discount of $ — and $ —

241.1 239.7 — —

TILC warehouse facility 721.8 721.8 561.8 561.8

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523.0 451.4 551.3 548.1

Tribute Rail secured railcar equipment notes, net of unamortized discount of $ 0.1 and $ —

322.6 281.1 — —

TRIP Railcar Co.

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The estimated fair values of our secured railcar equipment notes are based on our estimate of their fair value using unobservable input values provided by a third party (Level 3 inputs).

The respective carrying values of our revolving credit facility, 2017 promissory notes, TILC warehouse facility, and TRIP Railcar Co.

The respective carrying values of our revolving credit facility, 2017 promissory notes, TILC warehouse loan facility, and TRIP Railcar Co.

term loan approximate fair value because the interest rate adjusts to the market interest rate.

Revolving Credit Facility – We have a $ 450.0 million unsecured corporate revolving credit facility that matures in November 2023.

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

In July 2022, we amended our revolving credit facility to extend its maturity date to the earlier of (i) July 25, 2027 or (ii) July 2, 2024 if our Senior Notes have not been repaid in full by that date.

During the year ended December 31, 2022, we had total borrowings of $ 785.0 million and total repayments of $ 560.0 million under the revolving credit facility.

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 16.8 million.

Of the $ 421.7 million remaining unused amount, $ 176.8 million is available for borrowing as of December 31, 2021.

The outstanding letters of credit as of December 31, 2021 are scheduled to expire in July 2022.

Our letters of credit obligations support our various insurance programs and generally renew by their terms each year.

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 December 31, 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 December 31, 2021).

Of the $ 208.2 million remaining unused amount, the full $ 208.2 million was available for borrowing as of December 31, 2022.

The majority of our outstanding letters of credit as of December 31, 2022 are scheduled to expire in November 2023.

Our letters of credit obligations support performance bonds related to certain railcar orders.

The revolving credit facility bears interest at a variable rate of Secured Overnight Financing Rate ("SOFR") plus 1.75 %, for an all-in interest rate of 6.15 % as of December 31, 2022.

A commitment fee accrues on the average daily unused portion of the revolving credit facility at the rate of 0.175 % to 0.40 % ( 0.25 % as of December 31, 2022).

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

In December 2021, we amended our revolving credit facility to increase the maximum leverage ratio through June 30, 2022 to provide additional near-term flexibility.

Additionally, in March 2021, we amended our revolving credit facility to decrease the minimum interest coverage ratio through December 31, 2021.

In December 2022, we amended our revolving credit facility to increase the maximum leverage ratio to provide additional flexibility.

As of December 31, 2022, we were in compliance with all such financial covenants.

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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 year ended December 31, 2022, we had total borrowings of $ 652.1 million and total repayments of $ 492.1 million under the TILC warehouse loan facility.

Under the renewed facility, the entire unused facility amount of $ 438.2 million was available as of December 31, 2021 based on the amount of warehouse-eligible, unpledged equipment.

Of the remaining unused facility amount of $ 278.2 million, $ 110.1 million was available as of December 31, 2022 based on the amount of warehouse-eligible, unpledged equipment.

The warehouse loan facility is a non-recourse obligation and is secured by a portfolio of railcars and operating leases, certain cash reserves, and other assets acquired and owned by the warehouse loan facility trust.

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

Advances under the facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 1.95 % at December 31, 2021.

In August 2022, we amended our warehouse loan facility to transition the facility benchmark rate from LIBOR to SOFR plus a benchmark adjustment.

Advances under the facility bear interest at one-month term SOFR plus (1) a benchmark adjustment of 11 basis points and (2) a facility margin of 185 basis points, for an all-in interest rate of 6.09 % at December 31, 2022.

TRL-2017 – Trinity Rail Leasing 2017, LLC, a Delaware limited liability company ("TRL-2017") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, previously issued $ 302.4 million of promissory notes (the "Original 2017 Promissory Notes") due May 15, 2024.

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The 2017 Promissory Notes are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2017.

In February 2023, we amended the Amended and Restated Loan Agreement and the TRL 2017 interest rate swap agreements to transition the benchmark rate from LIBOR to SOFR plus a benchmark adjustment.

The Company has elected to apply the optional accounting expedient under ASC 848, Reference Rate Reform , for hedging relationships affected by reference rate reform.

TRL-2018 – In June 2018, Trinity Rail Leasing 2018, LLC, a Delaware limited liability company ("TRL-2018") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $ 482.5 million in Secured Railcar Equipment Notes (the "TRL-2018 Secured Railcar Equipment Notes").

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The 2020-1 Notes, of which $ 116.5 million was outstanding as of December 31, 2022, bear interest at a fixed rate of 1.96 %, are payable monthly, and have a stated final maturity date of October 17, 2050.

The TRL-2018 Notes are obligations of TRL-2018 only, secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2018.

The TRL-2018 Notes are obligations of TRL-2018 and are non-recourse to Trinity.

The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2018.

TRL-2019 – In April 2019, Trinity Rail Leasing 2019 LLC, a Delaware limited liability company ("TRL-2019") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $ 528.3 million in Secured Railcar Equipment Notes (the "TRL-2019 Notes").

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The TRL-2021 Notes are payable monthly, and have a stated final maturity date of July 19, 2051.

We incurred $ 3.3 million in debt issuance costs, which will be amortized to interest expense through the anticipated repayment date of the TRL-2021 Notes.

The TRL-2021 Notes are obligations of TRL-2021 and are non-recourse to Trinity.

The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2021.

TRL-2022 – In April 2022, Trinity Rail Leasing 2022 LLC, a Delaware limited liability company ("TRL-2022") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued an aggregate principal amount of $ 244.8 million of its Series 2022-1 Class A Green Secured Railcar Equipment Notes (the "TRL-2022 Notes").

The TRL-2022 Notes, of which $ 241.1 million was outstanding as of December 31, 2022, bear interest at a fixed rate of 4.55 %, are payable monthly, and have a stated final maturity date of May 20, 2052.

We incurred $ 2.6 million in debt issuance costs, which will be amortized to interest expense through the anticipated repayment date of the TRL-2022 Notes.

The TRL-2022 Notes are obligations of TRL-2022 and are non-recourse to Trinity.

The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets to be acquired and owned by TRL-2022.

Net proceeds received from the railcars acquired in connection with the issuance of the TRL-2022 Notes were used to repay approximately $ 209.9 million of borrowings under TILC's warehouse loan facility and for general corporate purposes.

Partially-owned leasing subsidiaries

Triumph Rail – In June 2021, Triumph Rail, formerly known as TRIP Master Funding, issued an aggregate principal amount of (i) $ 535.0 million of its Series 2021-2 Class A Green Secured Railcar Equipment Notes (the “Triumph Class A Notes”) and (ii) $ 25.4 million of its Series 2021-2 Class B Green Secured Railcar Equipment Notes (the “Triumph Class B Notes”) (the Triumph Class A Notes and the Triumph Class B Notes are, collectively, the “Triumph Notes”).

Triumph Rail – In June 2021, Triumph Rail issued an aggregate principal amount of (i) $ 535.0 million of its Series 2021-2 Class A Green Secured Railcar Equipment Notes (the “Triumph Class A Notes”) and (ii) $ 25.4 million of its Series 2021-2 Class B Green Secured Railcar Equipment Notes (the “Triumph Class B Notes”) (the Triumph Class A Notes and the Triumph Class B Notes are, collectively, the “Triumph Notes”).

The Triumph Class A Notes, of which $ 497.8 million was outstanding as of December 31, 2022, bear interest at a fixed rate of 2.15 %.

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The Triumph Notes are payable monthly, and have a stated final maturity date of June 15, 2051.

We incurred $ 5.6 million in debt issuance costs, which will be amortized to interest expense through the anticipated repayment date of the Triumph Notes.

The Triumph Notes are non-recourse to Trinity, TILC, TRIP Holdings, and the other equity investors in TRIP Holdings, and are secured by Triumph Rail's portfolio of railcars and operating leases thereon, its cash reserves, and all other assets owned by Triumph Rail.

Triumph Rail used the net proceeds received from the issuance of the Triumph Notes, as well as proceeds from the sale of railcars and related operating leases to TRIP Railcar Co.

described below, to redeem its outstanding debt, consisting of (i) the Series 2011 Class A-2 TRIP Master Funding Secured Railcar Equipment Notes due July 2041, (ii) the Series 2014-1 Class A-2 Secured Railcar Equipment Notes due April 2044, and (iii) the Series 2017-1 Secured Railcar Equipment Notes due August 2047, of which $ 869.1 million was outstanding at the redemption date.

The all-in rate for these notes was 5.16 % per annum at the time of redemption.

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 year ended December 31, 2021.

TRIP Railcar Co.

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from Triumph Rail.

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

The TRIP Railcar Co.

term loan bears interest at LIBOR plus 1.85 %, for an all-in interest rate of 1.95 % at December 31, 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.

The TRIP Railcar Co.

term loan is non-recourse to Trinity, TILC, TRIP Holdings, and the other equity investors in TRIP Holdings;

and is secured by TRIP Railcar Co.'s portfolio of railcars, operating leases thereon, and all other assets owned by TRIP Railcar Co.

Net proceeds received from the transaction were used to purchase railcars and related operating leases from Triumph Rail.

TRP-2021 – In June 2021, TRP-2021, formerly known as TRL-2012, issued an aggregate principal amount of (i) $ 334.0 million of its Series 2021-1 Class A Green Secured Railcar Equipment Notes (the “TRP-2021 Class A Notes”) and (ii) $ 21.0 million of its Series 2021-1 Class B Green Secured Railcar Equipment Notes (the “TRP-2021 Class B Notes”) (the TRP-2021 Class A Notes and the TRP-2021 Class B Notes are, collectively, the “TRP-2021 Notes”).

In May 2022, as described below, Tribute Rail used the proceeds from the sale of secured notes to purchase railcars and related operating leases from TRIP Railcar Co.

TRIP Railcar Co.

used the proceeds from Tribute Rail to repay its outstanding term loan agreement due June 2025, of which $ 319.4 million was outstanding at the redemption date.

In connection with the redemption, we recognized a loss on extinguishment of debt of $ 1.5 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 year ended December 31, 2022.

Tribute Rail – In May 2022, Tribute Rail issued an aggregate principal amount of (i) $ 290.0 million of its Series 2022-1 Class A Green Secured Railcar Equipment Notes (the “Class A Notes”) and (ii) $ 37.0 million of its Series 2022-1 Class B Green Secured Railcar Equipment Notes (the “Class B Notes”) (the Class A Notes and the Class B Notes are, collectively, the “Tribute Rail Notes”).

The Class A Notes, of which $ 285.7 million was outstanding as of December 31, 2022, bear interest at a fixed rate of 4.76 %.

The Class B Notes, of which $ 37.0 million was outstanding as of December 31, 2022, bear interest at a fixed rate of 5.75 %%.

The Tribute Rail Notes are payable monthly and have a stated final maturity date of May 17, 2052.

We incurred $ 3.4 million in debt issuance costs, which will be amortized to interest expense through the anticipated repayment date of the Tribute Rail Notes.

The Tribute Rail Notes are non-recourse to Trinity, TILC, TRIP Holdings, and the other equity investors in TRIP Holdings, and are secured by Tribute Rail's portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by Tribute Rail.

Tribute Rail used the proceeds from the sale of the Tribute Rail Notes to purchase railcars and related operating leases from TRIP Railcar Co.

as described above.

TRP-2021 – In June 2021, TRP-2021 issued an aggregate principal amount of (i) $ 334.0 million of its Series 2021-1 Class A Green Secured Railcar Equipment Notes (the “TRP-2021 Class A Notes”) and (ii) $ 21.0 million of its Series 2021-1 Class B Green Secured Railcar Equipment Notes (the “TRP-2021 Class B Notes”) (the TRP-2021 Class A Notes and the TRP-2021 Class B Notes are, collectively, the “TRP-2021 Notes”).

The TRP-2021 Class A Notes, of which $ 326.0 million was outstanding as of December 31, 2022, bear interest at a fixed rate of 2.07 %.

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The TRP-2021 Notes are payable monthly, and have a stated final maturity date of June 15, 2051.

We incurred $ 3.7 million in debt issuance costs, which will be amortized to interest expense through the anticipated repayment date of the TRP-2021 Notes.

The TRP-2021 Notes are non-recourse to Trinity, TILC, RIV 2013, and the other equity investors in RIV 2013, and are secured by TRP-2021's portfolio of railcars and operating leases thereon, its cash reserves, and all other assets owned by TRP-2021.

TRP-2021 used the net proceeds from the issuance of the TRP-2021 Notes to redeem its outstanding debt, consisting of (i) the Series 2012-1 Secured Railcar Equipment Notes due January 2043 and (ii) the Series 2013-1 Class A-1 Secured Railcar Equipment Notes due July 2043, of which $ 348.0 million was outstanding at the redemption date.

The all-in rate for these notes was 3.59 % per annum at the time of redemption.

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 year ended December 31, 2021.

Triumph Rail and TRP-2021 are wholly-owned subsidiaries of TRIP Holdings and RIV 2013, respectively, which, in turn, are partially-owned subsidiaries of the Company, through its wholly-owned subsidiary, TILC.

In connection with the refinancings of Triumph Rail and TRP-2021, during the year ended December 31, 2021, we recognized a loss on extinguishment of debt of $ 11.7 million, which included a $ 3.3 million early redemption premium and a write-off of $ 8.4 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 year ended December 31, 2021.

Triumph Rail and Tribute Rail are wholly-owned subsidiaries of TRIP Holdings, and TRP-2021 is a wholly-owned subsidiary of RIV 2013.

TRIP Holdings and RIV 2013 are partially-owned subsidiaries of the Company, through its wholly-owned subsidiary, TILC.

Our combined weighted average ownership interest in TRIP Holdings and RIV 2013 is 38 %.

See Note 5 for further explanation.

Scheduled Repayments of Long-Term Debt

Scheduled Repayments of Debt

Each of our secured railcar equipment notes generally has an anticipated repayment date and a stated final maturity date.

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2021 secured railcar equipment notes 12.2 13.3 12.6 14.0 14.0 241.6 307.7

2022 secured railcar equipment notes 8.3 9.0 6.7 8.1 8.3 200.7 241.1

TILC warehouse facility

4 unchanged sentences

Triumph Rail secured railcar equipment notes 16.2 32.6 29.5 23.6 421.3 — 523.2

TRIP Railcar Co.

term loan 12.6 311.1 — — — — 323.7

Tribute Rail secured railcar equipment notes 3.8 13.9 15.1 289.9 — — 322.7

Total principal payments $ 242.1 $ 655.9 $ 1,487.4 $ 1,105.1 $ 1,292.7 $ 862.4 $ 5,645.6

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Statutory rate 21.0 % 21.0 % 21.0 %

Effect of CARES Act 4.5 34.4 —

State taxes 3.0 1.1 2.3

Foreign branch taxes 2.1 3.0 (0.2)

State taxes 1.7 3.0 1.1

Executive compensation limitations 1.3 1.8 ( 0.3 )

Noncontrolling interest in partially-owned subsidiaries ( 2.1 ) — 0.1

Equity compensation ( 1.1 ) ( 4.0 ) —

Changes in valuation allowance and reserves ( 0.9 ) ( 4.3 ) 0.7

Effect of CARES Act (0.5) 4.5 34.4

Changes in state laws and apportionment ( 0.5 ) 0.3 ( 1.4 )

Foreign rate differential — 1.4 ( 0.1 )

Excise tax 1.3 — —

Nondeductible excise tax — 1.3 —

Nondeductible compensation — 1.2 (0.2)

Changes in state laws and apportionment 0.3 ( 1.4 ) 5.8

Equity compensation ( 4.0 ) — ( 0.9 )

Changes in valuation allowances and reserves ( 4.3 ) 0.7 —

Impairment - noncontrolling interest in partially-owned subsidiaries — — (3.3)

Interest expense limitations from partially-owned subsidiaries — — 0.2

Noncontrolling interest in partially-owned subsidiaries — 0.1 0.2

Other, net 0.8 ( 0.4 ) 0.2

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For the year ended December 31, 2022, the difference between the U.S.

statutory rate and the Company's effective tax rate is primarily due to foreign taxes, state income taxes and non-deductible executive compensation, offset by taxes not recorded on our non-controlling interests in partially-owned subsidiaries, reductions in tax reserves for uncertain tax positions, and excess tax benefits associated with equity-based compensation.

For the year ended December 31, 2021, the difference between the U.S.

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

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statutory rate and effective tax rate is primarily due the impact of the CARES Act partially offset by the portion of the non-cash small cube covered hopper railcar impairment charge that is not tax-effected because it is related to the noncontrolling interest.

For the year ended December 31, 2019, the difference between the U.S.

statutory rate and effective tax rate is primarily due to state income tax expense, foreign branch taxes, and changes in state tax laws and apportionment.

See Note 5 for a further explanation of activities with respect to our partially-owned leasing subsidiaries.

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The income taxes associated with the carryback claims were paid at a federal rate of 35.0 %, rather than the current rate of 21.0 % in effect beginning with the 2018 tax year.

The overall net impact of the CARES Act resulted in a tax expense of $ 2.5 million and a tax benefit of $ 180.4 million for the years ended December 31, 2021 and 2020, respectively.

The overall net impact of the CARES Act was a tax benefit of $0.5 million, a tax expense of $2.5 million, and a tax benefit of $ 180.4 million for the years ended December 31, 2022 2021, and 2020, respectively.

Income (loss) from continuing operations before income taxes for the years ended December 31, 2022, 2021, and 2020 was $ 127.1 million, $ 44.6 million, and $( 517.2 ) million, respectively, for U.S.

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Right-of-use assets 20.9 18.7

Equity items 4.8 —

Accrued liabilities and other 3.0 1.9

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Workers compensation, pensions, and other benefits 27.4 28.7

Interest expense 31.3 —

Warranties and reserves 2.8 7.3

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Inventory 3.6 6.0

Accrued liabilities and other — 5.3

Lease liabilities 25.8 24.4

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Deferred tax assets included in reserve for uncertain tax positions ( 0.7 ) ( 1.1 )

Adjusted net deferred tax liabilities $ 1,104.6 $ 1,041.5

Net deferred tax liability $ 1,133.1 $ 1,104.6

At December 31, 2022, we had $ 0.2 million of federal consolidated net operating loss carryforwards and $ 21.3 million of tax-effected state loss carryforwards remaining.

All of the federal net operating loss carryforwards were acquired in a stock acquisition in 2010 and are subject to limitations on the amount that can be utilized in any one year tax year and are due to expire in 2029.

We have established valuation allowances for federal, state, and foreign tax operating losses and credits that we have estimated may not be realizable.

Taxing authority examinations

Our 2016 and 2017 tax years are effectively settled.

The statutes of limitations for auditing the 2013-2015 and 2018-2020 tax years will remain open due to tax loss carryback claims we have filed.

We have state tax returns that are under audit in the normal course of business, and our Mexican subsidiaries' tax return statutes of limitations remain open for auditing 2014 forward.

Our tax years through 2019 are effectively settled except with respect to carryback claims related to the 2013 through 2015 tax years, which are currently in review.

We do not expect any significant changes to the carryback claims.

We have state tax returns that are under audit in the normal course of business, and our Mexican subsidiaries' tax returns statutes of limitations remain open for auditing 2017 forward.

We believe we are appropriately reserved for any potential matters.

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Beginning balance $ 2.3 $ 2.3 $ 2.3

Additions for tax positions related to the current year 1.1 — —

Additions for tax positions of prior years 1.7 — —

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Ending balance $ 3.8 $ 2.3 $ 2.3

Settlements during the year ended December 31, 2019 were due to the resolution of state audits.

The total amount of unrecognized tax benefits, including interest and penalties, at December 31, 2022 and 2021, that would affect our effective tax rate if recognized, was $ 2.5 million and $ 4.3 million, respectively.

The additions for tax positions in the current year and prior years are due to foreign positions of an acquired subsidiary that was recorded as part of our purchase accounting.

The expiration of statute of limitations relates to a state tax position for which the statute of limitations has lapsed.

The Company accounts for interest expense and penalties related to income tax issues as income tax expense.

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The total amount of accrued interest and penalties from continuing operations as of December 31, 2022 and 2021 was $ 2.2 million and $ 3.0 million, respectively.

Income tax expense for the years ended December 31, 2021, 2020, and 2019 included an increase of $ 0.1 million, an increase of $ 0.2 million, and a decrease of $ 1.0 million, respectively, with regard to interest expense and penalties related to uncertain tax positions.

Income tax expense for the years ended December 31, 2022, 2021, and 2020 included a decrease of $( 0.8 ) million, and an increase of $ 0.1 million, and $ 0.2 million, respectively, with regard to interest expense and penalties related to uncertain tax positions.

On August 16, 2022, the Inflation Reduction Act (the “IRA”) was signed into law, imposing a 15% minimum tax on U.S.

based companies with global net income in excess of $1 billion, and a 1% excise tax on stock buy backs on all publicly traded companies, starting in 2023.

We do not believe the IRA will have a material impact on our income tax liability or effective tax rate, and will monitor this position on a regular basis.

Employee Retirement Plans

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The Pension Plan was settled in the fourth quarter of 2020, which resulted in the Company no longer having any remaining funded pension plan obligations.

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.

As of December 31, 2020, the remaining surplus of the Pension Plan was $ 23.6 million.

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These activities are included in the pension plan settlement line in our Consolidated Statements of Operations.

As of December 31, 2021, the remaining surplus of the Pension Plan was $ 0.6 million.

During the year ended December 31, 2022, we used $ 0.2 million to fund pension administrative expenses, resulting in a remaining surplus of the Pension Plan of $ 0.4 million at December 31, 2022.

Actuarial assumptions

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Obligation discount rate (1)

N/A N/A 2.73 %

Assumptions used to determine net periodic benefit costs were:

Obligation discount rate (1)

N/A 2.71 % 4.45 %

Long-term rate of return on plan assets N/A 3.90 % 4.90 %

(1) Not applicable as of December 31, 2021 and for the year ended December 31, 2021 as all qualified pension plans were settled as of December 31, 2020.

N/A N/A 2.71 %

Long-term rate of return on plan assets (1)

N/A N/A 3.90 %

(1) Not applicable as of December 31, 2022 and 2021 and for the years ended December 31, 2022 and 2021 as all qualified pension plans were settled as of December 31, 2020.

Prior to the settlement of our Pension Plan, the obligation discount rate assumption was determined by deriving a single discount rate from a theoretical settlement portfolio of high quality corporate bonds sufficient to provide for the plans' projected benefit payments.

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Net expense $ 9.8 $ 9.3 $ 160.1

The expected return on plan assets for the years ended December 31, 2020 and 2019 was based on the plan assets' fair value.

The expected return on plan assets for the year ended December 31, 2020 was based on the plan assets' fair value.

Amortization of actuarial loss is determined using the corridor method.

Under the corridor method, unamortized actuarial gains or losses in excess of 10% of the greater of the projected benefit obligation or the fair value of plan assets as of the beginning of the plan year are amortized, for frozen plans, over the average expected remaining lifetime of frozen and inactive participants.

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

Obligations and funded status

Information regarding the terminated Pension Plan and the SERP based upon a December 31 measurement date is as follows:

Year Ended December 31,

(in millions)

Accumulated Benefit Obligations $ 14.5 $ 15.5

Projected Benefit Obligations:

Beginning of year $ 15.5 $ 557.9

Interest 0.4 14.8

Benefits paid ( 1.0 ) ( 23.0 )

Actuarial (gain) loss ( 0.4 ) 18.0

Settlements — ( 552.2 )

End of year $ 14.5 $ 15.5

Plans' Assets:

Beginning of year $ 23.6 $ 548.5

Actual return on assets — 49.3

Employer contributions 1.0 1.0

Benefits paid ( 1.0 ) ( 23.0 )

Settlements — ( 552.2 )

401(k) funding ( 10.9 ) —

Final annuity contract true-up, net of administrative expenses 3.9 —

Reversion of excess plan assets ( 16.0 ) —

End of year $ 0.6 $ 23.6

Consolidated Balance Sheet Components:

Pension Plan:

Other assets $ 0.6 $ 23.6

Accrued liabilities — —

Net funded status $ 0.6 $ 23.6

Other assets $ — $ —

Accrued liabilities ( 14.5 ) ( 15.5 )

Net funded status $ ( 14.5 ) $ ( 15.5 )

At December 31, 2022 and 2021, the projected benefit obligations and net funded status of our Supplemental Executive Retirement Plan ("SERP") were $ 11.2 million and $ 14.5 million, respectively, which are included in accrued liabilities in our Consolidated Balance Sheets.

Amounts recognized in other comprehensive income (loss)

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Amortization of prior service cost — — 1.2

New prior service cost base — — ( 1.5 )

Total before income taxes 2.9 0.7 169.1

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Net amount recognized in other comprehensive income (loss) $ 2.3 $ 0.5 $ 129.9

At December 31, 2021, AOCL included unrecognized actuarial losses related to our SERP of $ 5.2 million ($ 3.5 million net of related income taxes).

Actuarial losses included in AOCL and expected to be recognized in net periodic pension cost for the year ended December 31, 2022 are $ 0.3 million ($ 0.2 million net of related income taxes).

The target and actual investment allocation strategy at December 31, 2021 is 100 % cash and cash equivalents.

The estimated fair value of the plans' assets at December 31, 2021 was $ 0.6 million of temporary cash investments (Level 1).

Upon settlement of our Pension Plan in the fourth quarter of 2020, the target and actual investment allocation strategy at December 31, 2020 was 100 % cash and cash equivalents.

The estimated fair value of the plans' assets at December 31, 2020 was $ 23.6 million of temporary cash investments (Level 1).

At December 31, 2022, AOCI included unrecognized actuarial losses related to our SERP of $ 2.3 million ($ 1.2 million net of related income taxes).

Actuarial losses included in AOCI and expected to be recognized in net periodic pension cost for the year ended December 31, 2023 are $ 0.1 million ($ 0.1 million net of related income taxes).

The target and actual investment allocation strategy at December 31, 2022 and 2021 is 100 % cash and cash equivalents.

The estimated fair value of the plans' assets at December 31, 2022 and 2021 was $ 0.4 million and $ 0.6 million, respectively, of temporary cash investments (Level 1).

The pension plans' assets are valued at fair value.

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Funding of Defined Contribution Plans

Based on the plan provisions that were in effect during the majority of 2020, participants in the 401(k) plan were eligible to receive future retirement benefits through a company-funded annual retirement contribution provided through the Profit Sharing Plan for Employees of Trinity Industries, Inc.

and Certain Affiliates.

The contribution ranged from one to three percent of eligible compensation based on service.

Both the annual retirement contribution and the company matching contribution were discretionary, requiring board approval, and were made annually with the investment of the funds directed by the participants.

In August 2020, the Company amended the plan to replace the company-funded annual retirement contribution with a qualified automatic contribution arrangement safe harbor plan structure.

The new matching structure provides for a dollar-for-dollar Company match on up to 6% of participants' eligible compensation, subject to a two-year cliff vesting period.

The Company's 401(k) plan utilizes a qualified automatic contribution arrangement safe harbor plan structure.

The matching structure provides for a dollar-for-dollar Company match on up to 6% of participants' eligible compensation, subject to a two-year cliff vesting period.

Employer contributions to the 401(k) plan and the Trinity Industries, Inc.

Deferred Compensation Plan for the year ending December 31, 2022 are expected to be $ 7.6 million compared to $ 19.4 million contributed during 2021, which included the payment of the contributions accrued as of December 31, 2020, as well as the 2021 contributions pursuant to the plan design changes described above.

Deferred Compensation Plan for the year ending December 31, 2023 are expected to be $ 8.7 million, compared to $ 8.6 million contributed during 2022.

Asset Impairments and Restructuring Activities

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As a result, certain of the Leasing Group's small cube covered hopper customers requested rent relief and, in a number of cases, filed for bankruptcy in the second quarter of 2020.

We believe that the collective impact of these developments, including the shift towards the use of in-basin sand, constituted a fundamental and other-than-temporary change in the future demand for this railcar type.

We concluded that the collective impact of these developments, including the shift towards the use of in-basin sand, constituted a fundamental and other-than-temporary change in the future demand for this railcar type.

Therefore, we determined that the events and circumstances that arose during the second quarter of 2020 constituted an impairment triggering event related to the small cube covered hopper car type in our lease fleet portfolio.

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Restructuring activities

In November 2019, we approved a restructuring plan to resize certain resources, reduce stranded costs, and better align support services with our rail-focused strategy.

As part of the restructuring program, we eliminated positions across multiple locations and functions, including certain corporate and operational support functions.

During the year ended December 31, 2019, we recorded total restructuring charges of $ 14.6 million, consisting of approximately $ 3.8 million in cash charges for severance costs and approximately $ 10.8 million of non-cash charges, primarily from write-downs of assets associated with our non-operating facilities that will no longer be utilized as we execute our rail-focused strategy.

Throughout 2020, we continued our efforts to better align support services with our rail-focused strategy, which resulted in headcount reductions across multiple functions, including certain corporate and operational support functions primarily at our Dallas headquarters.

Throughout 2020, as part of our ongoing efforts to better align support services with our rail-focused strategy, we approved a restructuring plan that resulted in headcount reductions across multiple functions, including certain corporate and operational support functions primarily at our Dallas headquarters.

During the year ended December 31, 2020, we recorded total restructuring charges of $ 10.9 million, consisting of $ 7.7 million for severance costs, $ 5.3 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 $ 2.7 million net gain on the disposition of a non-operating facility and certain related assets.

During the year ended December 31, 2021, restructuring activities resulted in a net gain of $ 3.7 million, primarily as a result of a $ 4.0 million net gain on the disposition of our prior corporate headquarters facility and certain non-operating facilities, partially offset by $ 0.3 million in employee severance costs.

As we continue to reposition the organization, it is possible that we will engage in additional restructuring activities in the near term.

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

Accrued charges as of

December 31, 2020

Charges and adjustments Payments Accrued charges as of

December 31, 2021

(in millions)

Cash charges:

Employee severance costs $ 1.4 $ 0.3 $ ( 1.6 ) $ 0.1

$ 1.4 $ 0.3 $ ( 1.6 ) $ 0.1

Non-cash charges:

Gain on disposition of assets $ ( 4.0 )

Total restructuring activities $ ( 3.7 )

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

During the year ended December 31, 2022, we recorded total restructuring charges of $ 1.0 million related to the disposition of certain assets related to our prior corporate headquarters.

As of December 31, 2022 and 2021, the restructuring liability was not material and is included in other liabilities in our Consolidated Balance Sheet.

As we continue to optimize our organizational structure, it is possible that we will engage in additional restructuring activities in the future.

Although restructuring activities are not allocated to our reportable segments, the following tables summarize the restructuring activities by reportable segment for the years ended December 31, 2021 and 2020.

For the year ended December 31, 2022, restructuring charges of $ 1.0 million related to the Corporate and other grouping.

Year Ended December 31, 2021

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Total restructuring activities $ 7.7 $ 0.6 $ ( 2.7 ) $ 5.3 $ 10.9

Year Ended December 31, 2019

Employee Severance Costs Write-down of Assets Total

(in millions)

Railcar Leasing and Management Services Group $ 0.2 $ — $ 0.2

Rail Products Group 0.7 — 0.7

Corporate and other 2.9 10.8 13.7

Total restructuring activities $ 3.8 $ 10.8 $ 14.6

Accumulated Other Comprehensive Loss

Changes in AOCL for the years ended December 31, 2021 and 2020 are as follows:

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

Accumulated Other Comprehensive Income (Loss)

Changes in AOCI for the years ended December 31, 2022 and 2021 are as follows:

Currency translation adjustments Unrealized gain/(loss) on derivative financial instruments Net actuarial gains/(losses) of defined benefit plans Accumulated Other Comprehensive Income (Loss)

(in millions)

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$ ( 1.3 ) $ ( 25.6 ) $ ( 4.0 ) $ ( 30.9 )

Other comprehensive income (loss), net of tax, before reclassifications — ( 19.4 ) 7.7 ( 11.7 )

Amounts reclassified from AOCL, net of tax benefit of $ — , $ 3.5 , $ 1.6 , and $ 5.1

— 12.9 5.6 18.5

Amounts reclassified from AOCL related to settlement of pension plan, net of tax benefit of $ — , $ — , $ 34.9 , and $ 34.9

Other comprehensive income, net of tax, before reclassifications — 9.2 0.3 9.5

Amounts reclassified from AOCI, net of tax benefit of $ — , $ 1.2 , $ 0.1 , and $ 1.3

— 5.4 0.2 5.6

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— ( 1.2 ) — ( 1.2 )

Other comprehensive income (loss) — ( 7.7 ) 129.9 122.2

Other comprehensive income — 13.4 0.5 13.9

Balances at December 31, 2021

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Other comprehensive income, net of tax, before reclassifications — 29.3 2.1 31.4

Amounts reclassified from AOCL, net of tax benefit of $ — , $ 1.2 , $ 0.1 , and $ 1.3

Amounts reclassified from AOCI, net of tax benefit of $ — , $ 0.8 , $ 0.1 , and $ 0.9

— 3.5 0.2 3.7

Amounts reclassified to discontinued operations, net of tax 1.3 — — 1.3

noncontrolling interest — 0.3 — 0.3

Other comprehensive income (loss) — 13.4 0.5 13.9

Other comprehensive income 1.3 33.1 2.3 36.7

Balances at December 31, 2022

$ — $ 20.9 $ ( 1.2 ) $ 19.7

See Note 3 for information on the reclassification of amounts in AOCL into earnings.

See Note 3 for information on the reclassification of amounts in AOCI into earnings.

Reclassifications of unrealized before-tax gains and losses on derivative financial instruments are included in interest expense, net for our interest rate hedges and in cost of revenues for our foreign currency hedges in our Consolidated Statements of Operations.

Reclassifications of before-tax net actuarial gains/(losses) of defined benefit plans are included in other, net (income) expense in our Consolidated Statements of Operations, with the exception of amounts related to the settlement of our pension plan, which are included in the pension plan settlement line in our Consolidated Statements of Operations.

Reclassifications of before-tax net actuarial gains/(losses) of defined benefit plans are included in other, net (income) expense in our Consolidated Statements of Operations.

Changes in currency translation adjustments above relate to the final resolution of amounts associated with businesses previously disposed and are included in loss on sale of discontinued operations, net of income taxes in our Consolidated Statements of Operations.

Common Stock and Stock-Based Compensation

Stockholders' Equity

Repurchase Agreements with ValueAct

On April 29, 2021, we entered into a stock repurchase agreement with ValueAct Capital Master Fund, L.P.

(“ValueAct”), the Company's then-largest shareholder and a related party, to repurchase 8.1 million shares of our common stock for $ 27.47 per share, for an aggregate purchase price of $ 222.5 million, in a privately negotiated transaction.

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.

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.

On December 31, 2021, we entered into an additional stock repurchase agreement with ValueAct to repurchase 8.8 million shares of our common stock for $ 28.49 per share, for an aggregate purchase price of $ 250.0 million, in a privately negotiated transaction.

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 December 30, 2021.

The repurchase from ValueAct was approved by our Board of Directors separately from, and did not reduce the authorized amount remaining under, the existing 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.

In December 2022, our Board of Directors authorized a new share repurchase program effective December 9, 2022 with no expiration.

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 the new share repurchase program during the year ended December 31, 2022.

Previous Share Repurchase Authorization

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

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

In December 2021, we entered into an accelerated share repurchase agreement (the "ASR") to repurchase $ 125.0 million of our common stock.

Approximately 3.3 million shares repurchased as part of the ASR on December 31, 2021 were delivered to the Company in January 2022 in accordance with normal settlement practices, representing approximately 80% of the total notional value of the ASR.

The ASR is expected to be completed during the third quarter of 2022, at which time any remaining shares will be delivered to the Company.

Approximately $ 73.1 million of the share repurchase program will remain after the completion of the ASR.

Share repurchase activity under the authorized program is as follows:

Approximately 3.3 million shares totaling $ 100.0 million that were repurchased as part of the ASR on December 31, 2021 were delivered to the Company in January 2022 in accordance with normal settlement practices, representing approximately 80% of the total notional value of the ASR.

The ASR was completed in April 2022.

Our Board of Directors terminated this share repurchase program effective December 8, 2022, and the remaining authorization of $ 21.3 million under this program expired unused.

Share repurchase activity under this program was as follows:

Shares Repurchased Remaining Authorization to Repurchase

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October 1, 2021 through December 31, 2021 5,155,491 151.9 $ 98.1

Total 5,155,491 $ 151.9

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:

Shares Repurchased Remaining Authorization to Repurchase

Period Number of shares Cost

(in millions) Cost

(in millions)

October 23, 2020 Authorization $ 250.0

October 23, 2020 through December 31, 2020 2,974,922 $ 67.8 $ 182.2

January 1, 2022 through March 31, 2022 — — $ 98.1

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July 1, 2022 through September 30, 2022 610,000 14.1 $ 33.7

October 1, 2022 through December 31, 2022 427,383 12.4 $ 21.3

Total 7,953,336 $ 228.7

Shares repurchased as part of the ASR on December 31, 2021, totaling $ 100.0 million, were delivered to the Company in January 2022 in accordance with normal settlement practices.

During the years ended December 31, 2021, 2020, and 2019, share repurchases totaled 28.5 million, 9.3 million, and 13.7 million shares, respectively, at a cost of approximately $ 806.6 million, $ 193.1 million, and $ 294.7 million, respectively.

(1) Share repurchases during the second quarter of 2022 included 760,602 shares at a cost of $ 25.0 million representing the final settlement of the ASR, which was funded in December 2021 but a portion of which remained outstanding as of December 31, 2021.

During the years ended December 31, 2022, 2021, and 2020, share repurchases totaled 2.8 million , 28.5 million , and 9.3 million shares, respectively, at a cost of approximatel y $ 76.8 million , $ 806.6 million , and $ 193.1 million, respectively.

Share repurchases during the year ended December 31, 2021 included 16.9 million shares, at a cost of approximately $ 472.5 million, from privately negotiated transactions with ValueAct Capital Master Fund, L.P ("ValueAct").

The repurchases from ValueAct were approved by our Board of Directors separately from, and did not reduce the authorized amount remaining under, any of our share repurchase programs.

Stock-Based Compensation

Stock Award Plans

Our 2004 Fourth Amended and Restated Stock Option and Incentive Plan (the "Plan”) provides for awarding 20,150,000 (adjusted for stock splits) shares of common stock plus (i) shares covered by forfeited, expired, and canceled options granted under prior plans;

Our 2004 Fourth Amended and Restated Trinity Industries, Inc.

Stock Option and Incentive Plan (the "Plan”) provides for awarding 20,150,000 (adjusted for stock splits) shares of common stock plus (i) shares covered by forfeited, expired, and canceled options granted under prior plans;

and (ii) shares tendered as full or partial payment for the purchase price of an award or to satisfy tax withholding obligations.

At December 31, 2021, a total of 1,951,736 shares were available for issuance.

At December 31, 2022, a total of 1,772,345 s hares were available for issuance.

The Plan provides for the granting of nonqualified and incentive stock options having maximum ten-year terms to purchase common stock at its market value on the award date;

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Stock-Based Compensation Expense

The cost of employee services received in exchange for awards of equity instruments is referred to as stock-based compensation and is based on the grant date fair-value of those awards.

Stock-based compensation includes compensation expense, recognized over the applicable vesting periods, for share-based awards.

Stock-based compensation expense totaled $ 20.7 million, $ 25.4 million, and $ 27.8 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The cost of employee services received in exchange for awards of equity instruments is referred to as stock-based compensation and is recognized over the applicable vesting periods based on the grant date fair-value of those awards.

Stock-based compensation expense totale d $ 22.5 million, $ 20.7 million, and $ 25.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The income tax benefit related to stock-based compensation expense was $ 2.6 million, $ 10.7 million, and $ 0.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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Dividend yield 3.42 %

Restricted Stock

Restricted share awards consist of restricted stock and restricted stock units ("RSUs").

Expense related to RSUs issued to eligible employees under the Plan is recognized ratably over the vesting period, generally between three years and four years .

Certain restricted stock and RSUs vest in their entirety upon the employee's retirement from the Company, taking into consideration the employee's age and years of service to the Company, as defined more specifically in our benefit plans.

Beginning in 2020, certain RSU grants provide for full vesting when the award recipients retire having reached 60 years of age and having provided at least 10 years of service to the Company, provided that the awards remain outstanding for a period of at least six months from the date of grant.

Restricted Stock Units

Expense related to restricted stock units ("RSUs") issued to eligible employees under the Plan is recognized over the vesting period, generally between three years and four years .

Beginning in 2020, certain RSU grants provide for full vesting when the award recipients retire having reached 60 years of age and having provided at least ten years of service to the Company, provided that the awards remain outstanding for a period of at least six months from the date of grant.

The expense for these awards is recognized over the applicable service period for each of the eligible award recipients.

Expense related to restricted stock awards ("RSAs") and RSUs granted to non-employee directors under the Plan is recognized ratably over the vesting period, generally one year .

Expense related to RSUs granted to non-employee directors under the Plan is recognized on a straight-line basis over the vesting period, generally one year .

Forfeitures are recognized as a reduction to expense in the period in which they occur.

Number of Restricted Share Awards

Weighted Average Grant-Date

Number of Restricted Stock Units Weighted Average Grant-Date

Fair Value per Award

Restricted share awards outstanding at December 31, 2020

Restricted stock units outstanding at December 31, 2021

1,924,450 $ 22.00

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Forfeited ( 189,466 ) $ 23.68

Restricted share awards outstanding at December 31, 2021 (1)

Restricted stock units outstanding at December 31, 2022

1,740,166 $ 23.20

(1) The balance of restricted share awards outstanding at December 31, 2021 includes approximately 0.5 million restricted shares for Arcosa employees that were converted under the shareholder method at the time of the Arcosa spin-off.

These restricted shares will be released to Arcosa employees upon vesting, but as of the spin-off date, Trinity no longer records the compensation expense associated with these shares .

At December 31, 2021, unrecognized compensation expense related to restricted share awards totaled $ 24.2 million, which will be recognized over a weighted average period of 2.7 years.

The total grant-date fair value of shares vested and released during the years ended December 31, 2021, 2020, and 2019 was $ 25.2 million, $ 39.1 million, and $ 26.4 million, respectively.

The weighted average grant-date fair value of restricted share awards granted during the years ended December 31, 2021, 2020, and 2019 was $ 28.41 , $ 18.62 , and $ 22.20 per share, respectively.

At December 31, 2022, unrecognized compensation expense related to RSUs totaled $ 19.3 million , which will be recognized over a weighted average period o f 1.7 years.

The total grant-date fair value of RSUs vested and released during the years ended December 31, 2022, 2021, and 2020 was $ 14.2 million , $ 21.1 million, and $ 30.8 million, respectively.

The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2022, 2021, and 2020 was $ 25.65 , $ 28.41 , and $ 18.62 per share, respectively.

Performance Units

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The performance units vest upon certification by the Human Resources Committee of the Board of Directors of the achievement of the specified performance goals.

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

Expense related to performance units is recognized on a straight-line basis from their award date to the end of the performance period, generally three years.

Forfeitures are recognized as a reduction to expense in the period in which they occur.

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921,391 $ 25.56

At December 31, 2021, unrecognized compensation expense related to performance units totaled $ 6.8 million, which will be recognized over a weighted average period of 1.2 years.

The total grant-date fair value of performance units vested and released during the years ended December 31, 2021 and 2020 was $ 7.2 million and $ 0.1 million, respectively.

There were no performance units vested during the year ended December 31, 2019.

At December 31, 2022, unrecognized compensation expense related to performance units totaled $ 7.8 million , which will be recognized over a weighted average period o f 1.2 years.

The total grant-date fair value of performance units vested and released during the years ended December 31, 2022, 2021, 2020 was $ 4.7 million , $ 7.2 million, and $ 0.1 million, respectively.

The weighted average grant-date fair value of performance units granted during the years ended December 31, 2022, 2021, and 2020 was $ 29.80 , $ 30.85 , and $ 20.31 per share, respectively.

Restricted Stock Awards

Expense related to restricted stock awards ("RSAs") granted to non-employee directors under the Plan is recognized on a straight-line basis over the vesting period, generally one year .

Certain RSAs vest in their entirety upon the employee's retirement from the Company, taking into consideration the employee's age and years of service to the Company, as defined more specifically in our benefit plans.

Forfeitures are recognized as a reduction to expense in the period in which they occur.

Number of Restricted Stock Awards Weighted Average Grant-Date

Fair Value per Award

Restricted stock awards outstanding at December 31, 2021

769,014 $ 15.67

Granted 26,339 $ 25.43

Vested ( 92,972 ) $ 18.74

Forfeited ( 47,331 ) $ 17.01

Restricted stock awards outstanding at December 31, 2022 (1)

655,050 $ 15.53

(1) The balance of RSAs outstanding at December 31, 2022 includes approximate ly 0.2 million RSAs for Arcosa employees that were converted under the shareholder method at the time of the Arcosa spin-off.

These RSAs will be released to Arcosa employees upon vesting, but as of the spin-off date, Trinity no longer records the compensation expense associated with these shares.

At December 31, 2022, unrecognized compensation expense related to RSAs totaled $ 2.7 million , which will be recognized over a weighted average period of 4.3 years.

The total grant-date fair value of RSAs vested and released during the years ended December 31, 2022, 2021, and 2020 was $ 1.7 million , $ 4.1 million, and $ 8.3 million, respectively.

The weighted average grant-date fair value of RSAs granted during the years ended December 31, 2022, 2021, and 2020 was $ 25.43 , $ 28.48 , and $ 18.51 per s hare, respectively.

Earnings Per Common Share

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Income (loss) from continuing operations $ 98.9 $ 39.3 $ ( 250.5 )

Net loss attributable to noncontrolling interest 0.2 78.9 1.5

Unvested restricted share participation – continuing operations — — ( 1.7 )

Net (income) loss attributable to noncontrolling interest ( 12.8 ) 0.2 78.9

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

86.1 39.5 ( 171.6 )

Income from discontinued operations, net of income taxes 11.1 24.3 13.7

Gain on sale of discontinued operations, net of income taxes 131.4 — —

Unvested restricted share participation – discontinued operations — — ( 0.1 )

Net income from discontinued operations attributable to Trinity Industries, Inc.

Income (loss) from discontinued operations, net of income taxes ( 20.3 ) 11.1 24.3

Gain (loss) on sale of discontinued operations, net of income taxes ( 5.7 ) 131.4 —

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

( 26.0 ) 142.5 24.3

Net income (loss) attributable to Trinity Industries, Inc., including the effect of unvested restricted share participation $ 182.0 $ ( 147.3 ) $ 135.8

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

$ 60.1 $ 182.0 $ ( 147.3 )

Basic weighted average shares outstanding 81.9 101.5 115.9

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Income (loss) from continuing operations $ 1.05 $ 0.39 $ ( 1.48 )

Income from discontinued operations 1.40 0.21 0.11

Income (loss) from discontinued operations ( 0.32 ) 1.40 0.21

Basic net income (loss) attributable to Trinity Industries, Inc.

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Income (loss) from continuing operations $ 1.02 $ 0.38 $ ( 1.48 )

Income from discontinued operations 1.37 0.21 0.11

Income (loss) from discontinued operations ( 0.31 ) 1.37 0.21

Diluted net income (loss) attributable to Trinity Industries, Inc.

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Government declined to intervene, the relator, Mr.

Joshua Harman, alleged the Company violated the FCA pertaining to sales of the Company's ET Plus.

On October 20, 2014, a trial in this case concluded with a jury verdict stating that the Company and its subsidiary, THP, “knowingly made, used or caused to be made or used, a false record or statement material to a false or fraudulent claim," and the District Court entered judgment on the verdict in the total amount of $ 682.4 million.

Joshua Harman, alleged the Company violated the FCA pertaining to sales of the ET Plus.

On October 20, 2014, a trial in this case concluded with a jury verdict stating that the Company and THP “knowingly made, used or caused to be made or used, a false record or statement material to a false or fraudulent claim," and the District Court entered judgment on the verdict in the total amount of $ 682.4 million.

On September 29, 2017, the United States Court of Appeals for the Fifth Circuit ("Fifth Circuit") reversed the District Court’s $ 682.4 million judgment and rendered judgment as a matter of law in favor of the Company and THP.

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Harman's petition ended this action.

Pursuant to the Purchase and Sale Agreement, the Company has agreed to indemnify Rush Hour for certain liabilities related to the highway products business, including those liabilities resulting from or arising out of (a) the proceedings set forth under “State actions” and "Missouri class action" below and (b) any other proceedings to the extent resulting from or arising out of ET Plus systems or specified ET Plus component parts that are both (i) manufactured prior to December 31, 2021, and (ii) sold in the United States on or prior to April 30, 2022, or related warranty obligations with respect thereto.

Pursuant to the purchase and sale agreement related to the sale of THP, the Company has agreed to indemnify Rush Hour for certain liabilities related to the highway products business, including those liabilities resulting from or arising out of (a) the proceedings set forth under “State actions” and "Missouri class action" below and (b) any other proceedings to the extent resulting from or arising out of ET Plus systems or specified ET Plus component parts that are both (i) manufactured prior to December 31, 2021, and (ii) sold in the United States on or prior to April 30, 2022, or related warranty obligations with respect thereto.

State actions

Harman also has separate state qui tam actions currently pending pursuant to:

the Virginia Fraud Against Taxpayers Act ( Commonwealth of Virginia ex rel.

Trinity Industries, Inc.

and Trinity Highway Products, LLC , Case No.

CL13-698, in the Circuit Court, Richmond, Virginia) and the Massachusetts False Claims Act ( Commonwealth of Massachusetts ex rel.

Harman Qui Tam v.

Harman also has a separate state qui tam action currently pending pursuant to the Virginia Fraud Against Taxpayers Act ("VFATA") ( Commonwealth of Virginia ex rel.

Trinity Industries, Inc.

and Trinity Highway Products, LLC , Case No.

1484-CV-02364, in the Superior Court Department of the Trial Court) and has sought leave to file an amended complaint in a previously dismissed action pursuant to the New Jersey False Claims Act ( State of New Jersey ex rel.

Trinity Industries, Inc.

and Trinity Highway Products, LLC , Case No.L-1344-14, in the Superior Court of New Jersey Law Division:

Mercer County).

In each of these cases, Mr.

Harman alleged the Company violated the respective states' false claims act pertaining to sales of the ET Plus, and he is seeking damages, civil penalties, attorneys’ fees, costs and interest.

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

The Massachusetts action has been scheduled for trial on June 7, 2022, and the Virginia action has been scheduled for trial on April 17, 2023.

CL13-698, in the Circuit Court, Richmond, Virginia).

In this matter, Mr.

Harman alleged the Company violated the VFATA pertaining to sales of the ET Plus, and he is seeking damages, civil penalties, attorneys’ fees, costs, and interest.

The Commonwealth of Virginia Attorney General has intervened in the Virginia matter.

The trial court has set the case for trial on March 18, 2024.

The Company believes that the claims in this matter are without merit and intends to vigorously defend against all allegations.

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

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Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No.

14C2652, in the Circuit Court for Davidson County, Tennessee), on January 10, 2022, the Court granted Trinity’s Motion to Dismiss Harman’s Second Amended Complaint and entered an order dismissing Mr.

14C2652, in the Circuit Court for Davidson County, Tennessee), Mr.

Harman alleged the Company violated the Tennessee False Claim Act pertaining to sales of the ET Plus, and he is seeking damages, civil penalties, attorneys’ fees, costs, and interest.

The State of Tennessee Attorney General filed a Notice of Election to Decline Intervention in this matter.

On January 10, 2022, the trial court granted Trinity’s Motion to Dismiss Harman’s Second Amended Complaint and entered an order dismissing Mr.

Harman’s complaint with prejudice.

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Harman filed a Notice of Appeal of the trial court's order dismissing the case.

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

Other states could take similar or different actions, and could be considering similar state false claims or other litigation against the Company.

Harman's appeal remains pending.

The Company believes that the claims in this matter are without merit and intends to vigorously defend against all allegations.

In a similar New Jersey state qui tam action ( State of New Jersey ex rel.

Trinity Industries, Inc.

and Trinity Highway Products, LLC , Case No.L-1344-14, in the Superior Court of New Jersey Law Division:

Mercer County) that was previously dismissed by the trial court, Mr.

Harman sought leave to file an amended complaint pursuant to the New Jersey False Claims Act.

On February 16, 2022, the trial court denied Mr.

Harman’s motion.

On March 9, 2022, Mr.

Harman filed a motion for reconsideration of the trial court’s order denying leave to file an amended complaint.

On June 27, 2022, the trial court denied Mr.

Harman’s motion for reconsideration seeking leave to file an amended complaint with prejudice.

On August 9, 2022, Mr.

Harman filed a Notice of Appeal of the trial court's order denying Mr.

Harman's motion for reconsideration.

Harman's appeal remains pending.

The Company believes that the claims in this matter are without merit and intends to vigorously defend against all allegations.

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, New Jersey, and California were dismissed.

Based on information currently available to the Company and previously disclosed, we currently do not believe that a loss is probable in any one or more of the actions described under "State actions," therefore no accrual has been included in the accompanying Consolidated Financial Statements.

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

Also as previously reported, in June 2022, a state qui tam action filed by Mr.

Harman in the state of Massachusetts was settled for $ 5.0 million, which is included in income (loss) from discontinued operations, net of income taxes, in our Consolidated Statement of Operations for the year ended December 31, 2022.

Based on information currently available to the Company and previously disclosed, we currently do not believe that a loss is probable in the Virginia, Tennessee, and New Jersey state qui tam actions described under "State actions," therefore no accrual has been included in the accompanying Consolidated Financial Statements.

Because of the complexity of these actions, as well as the current status of certain of these actions, we are not able to estimate a range of possible losses with respect to any one or more of these actions.

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Missouri class action

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.

On November 5, 2015, a lawsuit was filed against the Company titled Jackson County, Missouri, individually and on behalf of a class of others similarly situated vs.

Trinity Industries, Inc.

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1516-CV23684 (Circuit Court of Jackson County, Missouri).

The case is being brought by plaintiff for and on behalf of itself and all Missouri counties with a population of 10,000 or more persons, including the City of St.

The case was being brought by plaintiff for and on behalf of itself and all Missouri counties with a population of 10,000 or more persons, including the City of St.

Louis, and the State of Missouri’s transportation authority.

The plaintiff alleges that the Company and THP did not disclose design changes to the ET Plus and these allegedly undisclosed design changes made the ET Plus allegedly defective, unsafe, and unreasonably dangerous.

The plaintiff alleges product liability negligence, product liability strict liability, and negligently supplying dangerous instrumentality for supplier’s business purposes.

The plaintiff seeks compensatory damages, interest, attorneys' fees and costs, and in the alternative plaintiff seeks a declaratory judgment that the ET Plus is defective, the Company’s conduct was unlawful, and class-wide costs and expenses associated with removing and replacing the ET Plus throughout Missouri.

The plaintiff alleged that the Company and THP did not disclose design changes to the ET Plus and these allegedly undisclosed design changes made the ET Plus allegedly defective, unsafe, and unreasonably dangerous.

The plaintiff alleged product liability negligence, product liability strict liability, and negligently supplying dangerous instrumentality for supplier’s business purposes.

The plaintiff sought compensatory damages, interest, attorneys' fees, and costs, and in the alternative plaintiff sought a declaratory judgment that the ET Plus is defective, the Company’s conduct was unlawful, and class-wide costs and expenses associated with removing and replacing the ET Plus throughout Missouri.

On December 6, 2017, the Court granted plaintiff's Motion for Class Certification, certifying a class of Missouri counties with populations of 10,000 or more persons, including the City of St.

Louis and the State of Missouri's transportation authority that have or had ET Plus guardrail end terminals with 4-inch wide guide channels installed on roadways they own or maintain.

A trial date has been scheduled in this case for April 4, 2022.

The parties are engaging in discussions regarding a potential settlement in an effort to resolve the matter before incurring significant additional legal fees and costs.

In accordance with ASC 450, Contingencies , the Company recorded a pre-tax charge of $ 23.9 million ($ 18.3 million, net of income taxes) during the year ended December 31, 2021, which is included in income from discontinued operations, net of income taxes, in our Consolidated Statement of Operations, based on the Company’s assessment that a settlement is probable.

However, there is no assurance that a settlement will be reached or, if a settlement is reached, that the charge will represent the amount of the settlement.

If a settlement is unable to be reached, the Company will continue to vigorously defend the action.

The parties reached an agreement to settle all claims in this case without any admission of liability or fault.

Defendants have denied and continue to deny specifically each and all of the claims and contentions alleged in this case.

The Company’s settlement with the class avoids the uncertainty and expense of continued litigation.

On May 30, 2022, the trial court granted preliminary approval of the settlement, and on August 30, 2022, the trial court granted final approval of the settlement.

Pursuant to the settlement, the Company will pay for the past replacement of certain ET Plus systems, for locating and replacing certain existing undamaged ET Plus systems, and for attorneys’ fees and costs.

In accordance with ASC 450, Contingencies , the Company recorded a pre-tax charge of $ 23.9 million ($ 18.3 million, net of income taxes) during the year ended December 31, 2021, which was included in income from discontinued operations, net of income taxes, in our Consolidated Statement of Operations, based on the Company’s assessment that a settlement was probable and the estimated costs to resolve this action.

In the fourth quarter of 2022, the Company funded $ 17.5 million in connection with the settlement and refined certain estimates, resulting in a liability of $ 7.8 million as of December 31, 2022.

Certain amounts involved in the settlement cannot be precisely determined at this time as the actual number of qualifying ET Plus systems that will be replaced as part of the settlement is not currently known.

Consequently, the corresponding liability will be periodically reviewed and adjusted, when appropriate, for a number of factors, including differences between actual and estimated costs.

The accrual and related range of reasonably possible loss related to this matter are included in the amounts described below under "Other matters."

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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 $ 37.4 million to $ 55.4 million, which includes our rights in indemnity and recourse to third parties of approximately $ 10.3 million, which is recorded in other assets on our Consolidated Balance Sheet as of December 31, 2021.

The range of reasonably possible losses for such matters is $ 9.4 million to $ 20.9 million.

This range includes any amounts related to the Highway Products litigation matters described above in the section titled “Highway products litigation." At December 31, 2022, total accruals of $ 9.5 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

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On March 26, 2021, a tornado damaged the Company’s rail maintenance facility in Cartersville, Georgia.

We have incurred costs related to cleanup and damage remediation activities in order for the facility to resume operations in the second quarter.

We incurred costs related to cleanup and damage remediation activities in order for the facility to resume operations in the second quarter of 2021.

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

Accordingly, at the time the loss was sustained, we recorded an insurance receivable of approximately $ 1.2 million for property damage recoveries, which was collected during the year.

As of December 31, 2021, we have received total advanced payments from insurance of approximately $ 17.8 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 $ 7.8 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.

To date, we have received total advanced payments from insurance of approximately $ 27.7 million, which includes $ 8.1 million for reimbursement of cleanup and damage remediation expenditures.

As of December 31, 2022, we have utilized $ 18.3 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.

During the year ended December 31, 2022, we recorded insurance receivables of approximately $ 10.0 million for additional property damage recoveries that we expect to be reimbursed under the terms of our insurance policy, and we recorded a corresponding gain, net of the applicable deductible, of $ 7.5 million, which is included in the gains on dispositions of other property line in our Consolidated Statements of Operations.

We received $ 10.0 million of reimbursements for property damage recoveries during the year ended December 31, 2022, with no remaining insurance receivables as of December 31, 2022.

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

Selected Quarterly Financial Data (Unaudited)

18 unchanged sentences

Other expense 41.9 50.7 54.4 60.5

Income (loss) from continuing operations before income taxes ( 1.0 ) ( 5.7 ) 33.8 28.1

Provision (benefit) for income taxes 4.0 ( 2.9 ) 8.3 6.5

Income (loss) from continuing operations ( 5.0 ) ( 2.8 ) 25.5 21.6

Income (loss) from discontinued operations, net of income taxes 6.3 7.6 10.4 ( 13.2 )

Gain on sale of discontinued operations, net of income taxes — — — 131.4

Income from continuing operations before income taxes 12.9 22.3 38.3 53.0

Provision for income taxes 3.0 5.8 8.6 10.2

Income from continuing operations 9.9 16.5 29.7 42.8

Loss from discontinued operations, net of income taxes ( 6.9 ) ( 3.4 ) ( 3.4 ) ( 6.6 )

Loss on sale of discontinued operations, net of income taxes ( 1.1 ) ( 4.6 ) — —

Net income 1.9 8.5 26.3 36.2

Net income (loss) attributable to noncontrolling interest

( 2.0 ) ( 7.9 ) 3.9 5.8

Net income attributable to Trinity Industries, Inc.

Net income attributable to noncontrolling interest 2.6 4.8 0.5 4.9

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

$ ( 0.7 ) $ 3.7 $ 25.8 $ 31.3

Basic earnings per common share (1) :

Income (loss) from continuing operations $ ( 0.03 ) $ 0.05 $ 0.22 $ 0.16

Income from discontinued operations 0.06 0.07 0.11 1.23

Basic net income attributable to Trinity Industries, Inc.

Income from continuing operations $ 0.09 $ 0.14 $ 0.36 $ 0.47

Loss from discontinued operations ( 0.10 ) ( 0.10 ) ( 0.04 ) ( 0.08 )

Basic net income (loss) attributable to Trinity Industries, Inc.

$ ( 0.01 ) $ 0.04 $ 0.32 $ 0.39

Diluted earnings per common share (1) :

Income (loss) from continuing operations $ ( 0.03 ) $ 0.05 $ 0.22 $ 0.16

Income from discontinued operations 0.06 0.07 0.11 1.21

Diluted net income attributable to Trinity Industries, Inc.

Income from continuing operations $ 0.09 $ 0.14 $ 0.35 $ 0.46

Loss from discontinued operations ( 0.10 ) ( 0.10 ) ( 0.04 ) ( 0.08 )

Diluted net income (loss) attributable to Trinity Industries, Inc.

$ ( 0.01 ) $ 0.04 $ 0.31 $ 0.38

16 unchanged sentences

Gains on dispositions of property 11.5 12.1 41.6 13.0

Impairment of long-lived assets (1)

— 369.4 — 27.0

Restructuring activities, net ( 0.3 ) ( 0.7 ) ( 0.1 ) ( 2.6 )

Operating profit (loss) 67.3 ( 316.3 ) 64.0 30.4

Operating profit 51.5 57.8 78.3 69.2

Other expense 52.5 63.5 44.5 41.1

58.1 52.3 53.7 205.9

Income (loss) from continuing operations before income taxes ( 1.0 ) ( 5.7 ) 33.8 28.1

1 unchanged sentence

Income (loss) from continuing operations ( 5.0 ) ( 2.8 ) 25.5 21.6

Income from discontinued operations, net of income taxes 4.0 6.8 6.9 6.6

Net income (loss) 162.3 ( 287.8 ) 25.9 ( 126.6 )

Income (loss) from discontinued operations, net of income taxes 6.3 7.6 10.4 ( 13.2 )

Gain on sale of discontinued operations, net of income taxes — — — 131.4

Net income 1.3 4.8 35.9 139.8

Net income (loss) attributable to noncontrolling interest ( 2.0 ) ( 7.9 ) 3.9 5.8

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

Net income attributable to Trinity Industries, Inc.

$ 3.3 $ 12.7 $ 32.0 $ 134.0

2 unchanged sentences

Income from discontinued operations 0.06 0.07 0.11 1.23

Basic net income (loss) attributable to Trinity Industries, Inc.

Basic net income attributable to Trinity Industries, Inc.

$ 0.03 $ 0.12 $ 0.33 $ 1.39

2 unchanged sentences

Income from discontinued operations 0.06 0.07 0.11 1.21

Diluted net income (loss) attributable to Trinity Industries, Inc.

Diluted net income attributable to Trinity Industries, Inc.

$ 0.03 $ 0.12 $ 0.33 $ 1.37

(1) Impairment of long-lived assets during the three months ended June 30, 2020 relates to our small cube covered hopper railcars.

See Note 11 for further information.

(2) Other expense during the three months ended December 31, 2020 includes $ 151.5 million related to the settlement of our Pension Plan.

See Note 10 for further information.

(1) The sum of the quarters may not necessarily be equal to the full year net income per common share amount.

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data