What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-21 · 452 added, 511 removed, 1264 unchanged (43% of the section changed)

10 unchanged sentences

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Trinity Industries, Inc.

To the Stockholders and the Board of Directors of Trinity Industries, Inc.

Opinion on the Financial Statements

20 unchanged sentences

Recognition of deferred tax assets and liabilities

Description of the Matter As more fully described in Note 9 to the consolidated financial statements, at December 31, 2022, the Company recorded gross deferred tax assets related to deductible temporary differences of $ 131.3 million, offset by a $ 29.5 million valuation allowance, and recorded $ 1,235.6 million in deferred tax liabilities.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and other tax attributes using currently enacted tax rates.

Description of the Matter As more fully described in Note 10 to the consolidated financial statements, at December 31, 2023, the Company had gross deferred tax assets related to deductible temporary differences of $180.0 million, offset by a valuation allowance of $21.6 million, and deferred tax liabilities of $1,261.1 million.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and other tax attributes using currently enacted tax rates.

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 laws 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 law 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 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.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s 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.

Among other audit procedures performed, we (i) obtained an understanding of the Company’s overall tax structure, including any changes in the Company’s tax structure that occurred during the year as well as any changes in tax law that could impact the recognition of deferred tax assets and liabilities;

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

(iii) tested the completeness and accuracy of deferred tax assets and liabilities based on enacted law and tax rates for the appropriate tax jurisdictions to determine the amount of such deferred tax assets and liabilities;

and (iv) tested the completeness and accuracy of the underlying data.

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

/s/ ERNST & YOUNG LLP

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89.6 152.7 78.2

Impairment of long-lived assets — — 396.4

Restructuring activities, net ( 2.2 ) 1.0 ( 3.7 )

Total operating profit (loss) 334.0 256.8 ( 154.6 )

Total operating profit 417.0 334.0 256.8

Other (income) expense:

4 unchanged sentences

268.0 207.5 201.6

Income (loss) from continuing operations before income taxes 126.5 55.2 ( 524.6 )

Income from continuing operations before income taxes 149.0 126.5 55.2

Provision (benefit) for income taxes:

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9.0 27.6 15.9

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

Income from continuing operations 140.0 98.9 39.3

Income (loss) from discontinued operations, net of provision (benefit) for income taxes of $( 3.6 ), $( 1.1 ), and $ 3.5

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— ( 5.7 ) 131.4

Net income (loss) 72.9 181.8 ( 226.2 )

Net income 126.6 72.9 181.8

Net income (loss) attributable to noncontrolling interest 20.6 12.8 ( 0.2 )

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

Net income attributable to Trinity Industries, Inc.

$ 106.0 $ 60.1 $ 182.0

Basic earnings per common share:

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

Income from continuing operations $ 1.47 $ 1.05 $ 0.39

Income (loss) from discontinued operations ( 0.16 ) ( 0.32 ) 1.40

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

Basic net income attributable to Trinity Industries Inc.

$ 1.31 $ 0.73 $ 1.79

Diluted earnings per common share:

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

Income from continuing operations $ 1.43 $ 1.02 $ 0.38

Income (loss) from discontinued operations ( 0.16 ) ( 0.31 ) 1.37

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

Diluted net income attributable to Trinity Industries Inc.

$ 1.27 $ 0.71 $ 1.75

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and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

Year Ended December 31,

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(in millions)

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

Net income $ 126.6 $ 72.9 $ 181.8

Other comprehensive income (loss):

Derivative financial instruments:

Unrealized gains (losses) arising during the period, net of tax benefit (expense) of $( 9.2 ), $( 2.8 ), and $ 5.9

Unrealized gains arising during the period, net of tax expense of $ 3.3 , $ 9.2 , and $ 2.8

10.6 29.3 9.2

Reclassification adjustments for losses included in net income (loss), net of tax benefit of $ 0.8 , $ 1.2 , and $ 3.5

Reclassification adjustments for (gains) losses included in net income, net of tax benefit of $ 7.4 , $ 0.8 , and $ 1.2

( 26.1 ) 3.5 5.4

Defined benefit plans:

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

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

Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $( 0.1 ), $ 0.5 , and $ 0.1

( 0.3 ) 2.1 0.3

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

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( 15.7 ) 36.4 15.1

Comprehensive income (loss) 109.3 196.9 ( 102.8 )

comprehensive income (loss) attributable to noncontrolling interest 12.5 1.0 ( 77.7 )

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

Comprehensive income 110.9 109.3 196.9

comprehensive income attributable to noncontrolling interest 13.6 12.5 1.0

Comprehensive income attributable to Trinity Industries, Inc.

$ 97.3 $ 96.8 $ 195.9

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Retained earnings 1,010.5 992.6

Accumulated other comprehensive income (loss) 19.7 ( 17.0 )

Accumulated other comprehensive income 11.0 19.7

Treasury stock – shares at December 31, 2023 – 0.0 ;

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Operating activities:

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

Net income $ 126.6 $ 72.9 $ 181.8

(Income) loss from discontinued operations, net of income taxes 13.4 20.3 ( 11.1 )

(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:

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

Depreciation and amortization 293.2 276.4 265.7

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Gains on insurance recoveries from property damage ( 6.3 ) ( 7.5 ) ( 7.8 )

Pension plan settlement — — 151.5

Impairment of long-lived assets — — 396.4

Non-cash impact of restructuring activities ( 2.2 ) — —

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Net cash provided by operating activities – continuing operations 309.0 9.2 615.6

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

Net cash used in operating activities – discontinued operations ( 13.4 ) ( 22.0 ) ( 3.8 )

Net cash provided by (used in) operating activities 295.6 ( 12.8 ) 611.8

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Proceeds from lease portfolio sales 381.8 750.7 454.3

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 )

Capital expenditures – lease fleet ( 668.8 ) ( 928.8 ) ( 547.2 )

Capital expenditures – manufacturing and other ( 41.3 ) ( 38.0 ) ( 23.6 )

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Equity investments ( 1.1 ) ( 15.5 ) 0.1

Other 3.6 — —

Net cash used in investing activities – continuing operations ( 363.0 ) ( 258.0 ) ( 83.0 )

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Distributions to noncontrolling interest ( 32.4 ) ( 22.3 ) ( 11.2 )

Other — — ( 0.1 )

Net cash provided by (used in) financing activities 8.2 265.4 ( 814.1 )

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Interest paid $ 246.2 $ 190.5 $ 178.4

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

Income tax (payments), net of refunds $ ( 42.4 ) $ ( 19.3 ) $ 435.7

See accompanying notes to Consolidated Financial Statements.

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Balances at December 31, 2020

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

111.2 $ 1.1 $ — $ 1,769.4 $ ( 30.9 ) ( 0.1 ) $ ( 0.8 ) $ 1,738.8 $ 277.2 $ 2,016.0

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

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

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

83.3 $ 0.8 $ — $ 1,046.6 $ ( 17.0 ) — $ ( 0.6 ) $ 1,029.8 $ 267.0 $ 1,296.8

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)

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Balances at December 31, 2022

81.1 $ 0.8 $ — $ 992.6 $ 19.7 — $ ( 0.7 ) $ 1,012.4 $ 257.2 $ 1,269.6

Net income — — — 106.0 — — — 106.0 20.6 126.6

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

Other comprehensive loss — — — — ( 8.7 ) — — ( 8.7 ) ( 7.0 ) ( 15.7 )

Cash dividends declared on common stock (1)

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Settlement of share-based awards, net 1.0 — 0.7 — — ( 0.3 ) ( 7.9 ) ( 7.2 ) — ( 7.2 )

Shares repurchased — — — — — ( 2.0 ) ( 51.8 ) ( 51.8 ) — ( 51.8 )

Accelerated share repurchase agreement — — 25.0 — — ( 0.8 ) ( 25.0 ) — — —

Retirement of treasury stock ( 0.3 ) — ( 8.0 ) — — 0.3 8.0 — — —

Balances at December 31, 2023

81.8 $ 0.8 $ 15.4 $ 1,010.5 $ 11.0 — $ ( 0.6 ) $ 1,037.1 $ 238.4 $ 1,275.5

(1) Dividends of $ 1.06 , $ 0.95 , and $ 0.86 per common share for the years ended December 31, 2023, 2022, and 2021, respectively.

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The financial statements of Trinity Industries, Inc.

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

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

All significant intercompany accounts and transactions have been eliminated.

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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.

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

A final working capital adjustment was recorded in 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.

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We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer.

For all contracts with customers, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis).

Generally, we are the principal in our contracts with customers and report revenues on a gross basis as we control the product or service before it is transferred to a customer.

We act as an agent for a small number of service contracts and report those revenues on a net basis as we do not control the services before they are provided to the customer.

Payments for our products and services are generally due within normal commercial terms.

The following is a description of principal activities from which we generate our revenue, separated by reportable segments.

The following is a description of the principal activities from which we generate our revenue, separated by reportable segments.

See Note 4 for a further discussion regarding our reportable segments.

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

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.

Historically, in accordance with ASC 606, Revenue from contracts with customers , we presented sales of railcars from the lease fleet on a gross basis in Revenues – Leasing and Cost of revenues – Leasing in our Consolidated Statements of Operations if the railcars had been owned for one year or less at the time of sale.

Sales of railcars from the lease fleet owned for more than one year had historically been presented as a net gain or loss from the disposal of a long-term asset.

We now report all sales of railcars from the lease fleet as a net gain or loss from the disposal of a long-term asset in accordance with ASC 610-20, Gains and losses from the derecognition of non-financial assets.

See "Lease Accounting" below for additional information regarding sales-type leases as of December 31, 2023 and 2022.

We report all sales of railcars from the lease fleet and selling profit or loss associated with sales-type leases as a net gain or loss from the disposal of a long-term asset in accordance with Accounting Standards Codification ("ASC") 610-20, Gains and losses from the derecognition of non-financial assets .

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 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.

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

The presentation change had no effect on the Company’s operating profit, net income, earnings per share, or Consolidated Balance Sheet.

We account for shipping and handling costs as activities to fulfill the promise to transfer the good;

as such, these fees are recorded in revenue.

The fees and costs of shipping and handling activities are accrued when the related performance obligation has been satisfied.

We act as an agent for certain logistics services and report these revenues on a net basis as we do not control the services before they are provided to the customer.

Rail Products Group

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

We account for shipping and handling costs as activities to fulfill the promise to transfer the good;

as such, these fees are recorded in revenue.

The fees and costs of shipping and handling activities are accrued when the related performance obligation has been satisfied.

Unsatisfied Performance Obligations

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Sustainable railcar conversions $ 81.9 100.0 %

Maintenance services $ 6.6 100.0 %

Railcar Leasing and Management Services Group $ 65.0 27.0 %

(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.

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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 .

Our operating leases have remaining lease terms ranging from one year to thirteen 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, 2023, we had no material finance leases in which we were the lessee.

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

As applicable, the lease liability is also reduced by the amount of lease incentives that have not yet been reimbursed by the lessor.

The following table summarizes the impact of our operating leases on our Consolidated Financial Statements (in millions, except lease term and discount rate):

2023 2022 2021

Consolidated Statement of Operations

Consolidated Statements of Operations

Operating lease expense $ 19.5 $ 18.2 $ 15.2

Short-term lease expense $ — $ 0.4 $ 0.2

Consolidated Statement of Cash Flows

Consolidated Statements of Cash Flows

Cash flows from operating activities $ 19.5 $ 18.2 $ 15.2

Right-of-use assets recognized in exchange for new lease liabilities $ 24.1 $ 28.8 $ 23.0

$ 28.8 $ 23.0 $ 54.5

December 31, 2023 December 31, 2022

Consolidated Balance Sheet

Consolidated Balance Sheets

Right-of-use assets (1)

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Weighted average discount rate 3.6 % 2.8 %

(1) Includes the commencement of the new headquarters facility for the year ended December 31, 2020 .

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

1 unchanged sentence

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

Leasing Group Non-Leasing Group Total

Leasing Group Non-Leasing Group

2024 $ 10.1 $ 10.0 $ 20.1

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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 Statements of Operations (in millions):

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

2023 2022 2021

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Financial instruments that potentially subject us to a concentration of credit risk are primarily cash investments including restricted cash and receivables.

We place our cash investments in bank deposits, investment grade, short-term debt instruments, and highly-rated commercial paper.

We place our cash investments in bank deposits, investment grade short-term debt instruments, highly-rated money market funds, and highly-rated commercial paper.

We limit the amount of credit exposure to any one commercial issuer.

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Historically, we have observed that the likelihood of loss increases when receivables have aged beyond 180 days.

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

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.

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

During the year ended December 31, 2023, we recognized approximately $ 3.1 million of credit loss expense and approximately $ 0.6 million of recoveries and other adjustments, and wrote off $ 0.3 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 $ 10.6 million at December 31, 2022 to $ 12.8 million at December 31, 2023.

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

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Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced by the estimated cost to dispose of the assets.

During the year ended December 31, 2020, we recorded impairments of long-lived assets totaling $ 396.4 million, which included $ 369.4 million related to our small cube covered hopper railcars, $ 15.2 million related to the planned divestiture of certain non-strategic maintenance facilities, and $ 11.8 million related to investments in certain emerging technologies.

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, 2022 and 2021.

We did not identify any indicators of impairment during the years ended December 31, 2023, 2022, or 2021.

Assets Held for Sale

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Goodwill is required to be tested for impairment at least annually, or on an interim basis if events or circumstances change indicating that the carrying amount of the goodwill might be impaired.

We have the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment assessment.

If, after assessing the totality of events and circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will perform the quantitative impairment test.

We can also elect to forgo the qualitative assessment and perform the quantitative test.

The quantitative goodwill impairment test compares the reporting unit's estimated fair value with the carrying amount of its net assets.

An impairment is recognized if the reporting unit's recorded net assets exceed its fair value.

Indefinite-lived intangible assets are not subject to amortization but are required to be evaluated for impairment at least annually.

We have historically performed our annual impairment tests of goodwill and indefinite-lived intangible assets as of December 31 of each year.

During 2023, we voluntarily changed the date of our annual impairment tests from December 31 to October 1.

This voluntary change in accounting is preferable under the circumstances as it better aligns with our annual forecasting and strategic planning process, which is a key component of the annual impairment test models.

Further, the change will provide management with additional time to perform and complete its annual impairment assessment.

This voluntary change did not result in a delay, acceleration, or avoidance of an impairment charge.

The change in measurement date has been applied prospectively as of October 1, 2023 as retrospective application is deemed impracticable due to the inability to objectively determine the assumptions and significant estimates used in prior periods without the benefit of hindsight.

As such, the annual impairment tests of goodwill and indefinite-lived intangible assets for the year ended December 31, 2023 were performed as of October 1, 2023.

The quantitative goodwill impairment test is a two-step process, with step one requiring the comparison of the reporting unit's estimated fair value with the carrying amount of its net assets.

If necessary, step two of the impairment test determines the amount of goodwill impairment to be recorded when the reporting unit's recorded net assets exceed its fair value.

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 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.

Goodwill by segment is as follows:

December 31, 2022 December 31, 2021

(in millions)

Railcar Leasing and Management Services Group $ 7.1 $ 1.8

Rail Products Group 188.8 152.4

$ 195.9 $ 154.2

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.

As of October 1, 2023 and December 31, 2022, we completed our annual impairment tests of goodwill at the reporting unit level and determined that no impairment charges were necessary.

If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is impaired by the amount of the excess.

As of December 31, 2023 and 2022, indefinite-lived intangible assets, which are comprised of trade names of recently acquired businesses, totaled $ 11.2 million and $ 4.4 million.

As of October 1, 2023 and December 31, 2022, we completed our evaluations of each indefinite-lived intangible asset and determined that no impairment charges were necessary.

The net book value of our finite-lived intangible assets totaled $ 95.5 million and $ 74.6 million as of December 31, 2023 and 2022, respectively, which are amortized over their estimated useful lives, ranging from one year to fifteen years .

We evaluate the carrying value of our finite-lived intangible assets for potential impairment when events and circumstances indicate that the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets.

We did not identify any impairment indicators during the years ended December 31, 2023, 2022, or 2021.

See Note 2 and Note 8 for further information regarding the changes in the carrying amounts of our goodwill and intangible assets related to acquisition activity for the years ended December 31, 2023 and 2022.

Restricted Cash

Restricted cash consists of cash and cash equivalents held either as collateral for our non-recourse debt and lease obligations or as security for the performance of certain product sales agreements.

Restricted cash consists of cash and cash equivalents held either as collateral for our non-recourse debt and lease obligations.

As such, they are restricted in use.

Investments in Affiliates

We continuously evaluate our investments and other contractual arrangements with third party entities to determine if our variable interests are considered a variable interest entity ("VIE").

We continuously evaluate our investments in and other contractual arrangements with third-party entities to determine whether they are considered a variable interest entity ("VIE") and, if so, whether we are considered the primary beneficiary.

Consolidation is required for VIEs in which we are the primary beneficiary.

We have determined that we are the primary beneficiary for TRIP Holdings and RIV 2013.

At December 31, 2022, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $ 136.1 million.

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

We have determined that we are the primary beneficiary for TRIP Holdings, RIV 2013, and Trinity Global Ventures.

At December 31, 2023, the carrying value of our investments in these entities totaled $ 126.2 million.

See Note 5 for further information regarding investments in which we have a controlling interest.

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

2 unchanged sentences

These liabilities are calculated based upon loss development factors, which contemplate a number of variables, including claims history and expected trends.

As of December 31, 2023, our liabilities associated with workers' compensation and group medical insurance were $ 35.0 million and $ 4.5 million, respectively, and are included in the accrued liabilities line of our Consolidated Balance Sheets.

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

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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 Statements of Operations.

The remeasurement 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)

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Recent Accounting Pronouncements

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

Adopted in 2023

ASU 2022-04 – In September 2022, the Financial Accounting Standards Board ("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.

In cooperation with a participating financial institution, we facilitate a voluntary supply chain finance ("SCF") program for several of our suppliers.

We negotiate payment terms with suppliers that are in line with average industry terms.

We have not pledged any assets as security or provided other forms of guarantees to the financial institution.

Under the SCF program, participating suppliers may choose to sell, at a discounted price, receivables due from us to the financial institution, at the sole discretion of both the suppliers and the financial institution, prior to the invoices’ scheduled due dates.

The payment terms that we negotiate with all suppliers are consistent regardless of whether the supplier chooses to participate in the SCF program for a particular invoice.

The SCF program is administered by a third-party financial institution, and our responsibility is limited to making payments based on the terms originally negotiated with participating suppliers, regardless of whether such suppliers sell receivables to the financial institution.

Amounts due to our participating suppliers in the SCF program are included in accounts payable in our Consolidated Balance Sheets.

Payments made under the SCF program are reflected in net cash provided by operating activities from continuing operations in our Consolidated Statements of Cash Flows.

The following is a summary of our outstanding obligations confirmed as valid under the supplier finance program for the year ended December 31, 2023:

December 31, 2023

(in millions)

Confirmed obligations outstanding at December 31, 2022

Invoices confirmed 91.3

Confirmed invoices paid ( 95.8 )

Confirmed obligations outstanding at December 31, 2023

Not Yet Adopted

ASU 2023-07 – In November 2023, the FASB issued ASU No.

2023-07, "Improvements to Reportable Segment Disclosures," which improves disclosures about a public entity's reportable segments through enhanced disclosures about significant segment expenses.

ASU 2023-07 requires disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), the amount for other segment items by reportable segment and a description of its composition, the title and position of the CODM, and interim period disclosure of all current ASC 280, Segment Reporting , annual disclosures about a reportable segment's profit or loss and assets.

ASU 2023-07 is effective for public companies during annual reporting periods beginning after December 15, 2023 and during interim reporting periods beginning after December 15, 2024 and is to be adopted on a retrospective basis.

Early adoption is permitted.

We are currently evaluating the impact ASU 2023-07 will have on our segment reporting disclosures.

ASU 2023-09 – In December 2023, the FASB issued ASU No.

2023-09, "Improvements to Income Tax Disclosures," which enhances transparency and decision usefulness of income tax disclosures.

ASU 2023-09 requires, on an annual basis, a tabular disclosure using specific categories in the rate reconciliation and providing additional information for reconciling items that meet a quantitative threshold, as well as the disaggregation of income taxes paid by federal, state, and foreign jurisdictions.

ASU 2023-09 is effective for public companies during annual reporting periods beginning after December 15, 2024 on a prospective basis, with an option for retrospective application.

Early adoption is permitted.

We are currently evaluating the impact ASU-2023-09 will have on our income tax disclosures.

Management's Estimates

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Acquisitions and Discontinued Operations

Acquisition of RSI Logistics

On March 8, 2023, we acquired RSI Logistics ("RSI"), a data-centric provider of proprietary software and logistics and terminal management solutions to the North American rail industry, for an aggregate purchase price of $ 72.1 million.

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.

Based on our preliminary purchase price allocation recorded during the first quarter of 2023, we recorded identifiable intangible assets of $ 37.4 million, goodwill of $ 26.3 million, and certain other assets, net of liabilities, totaling $ 8.4 million.

The identifiable intangible assets, with the exception of the trade name, which is considered an indefinite-lived intangible asset, are being amortized over their estimated useful lives, ranging from 5 years to 15 years.

During 2023, we made immaterial purchase price allocation adjustments to certain assets, which included a final working capital adjustment.

Additionally, during the fourth quarter of 2023, we completed the sale of an intermodal transportation services business, which was a wholly-owned subsidiary of RSI, for a sales price of approximately $ 4.4 million.

The disposal group included identifiable intangible assets of $ 1.6 million, goodwill of $ 1.2 million, and certain other assets, net of liabilities, totaling $ 1.6 million, resulting in final goodwill attributable to the RSI acquisition of $ 25.6 million as of December 31, 2023.

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.

On December 30, 2022, we acquired Holden America, 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 aggregate purchase price, when combined with the potential additional future consideration described below, resulted in total consideration of $ 87.1 million.

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 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.

Based on our preliminary purchase price allocation recorded during the year ended December 31, 2022, we recorded identifiable intangible assets of $ 45.9 million, goodwill of $ 36.4 million, and certain other immaterial assets and liabilities.

During 2023, we made immaterial adjustments to certain assets and liabilities to finalize our purchase price allocation.

The purchase agreement included 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 contained 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 as of December 31, 2022 and is remeasured at each reporting period using Level 3 inputs.

As of December 31, 2023, the estimated fair value of the additional consideration was $ 20.0 million.

The change in fair value is included in selling, engineering, and administrative expenses in our Consolidated Statements of Operations for the year ended December 31, 2023.

Other Acquisitions

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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.

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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.

Based on our 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.

See Note 8 for further information regarding goodwill and intangible assets recorded as a result of these acquisitions.

Discontinued Operations

Sale of Highway Products Business

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

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 2023 Annual Report on Form 10-K.

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.

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.

In connection with the sale, the Company 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.

Expenses related to these retained obligations incurred during the years ended December 31, 2023 and 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 (loss) from discontinued operations for the years ended December 31, 2022, 2021, and 2020:

The following is a summary of operating results related to the THP business included in income (loss) from discontinued operations for the years ended December 31, 2023, 2022, and 2021:

Year Ended December 31,

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Selling, engineering, and administrative expenses 17.0 21.4 65.3

Restructuring activities — — 0.1

Other income — — ( 0.3 )

Income (loss) from discontinued operations before income taxes ( 17.0 ) ( 21.4 ) 14.6

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Income (loss) from discontinued operations, net of income taxes $ ( 13.4 ) $ ( 20.3 ) $ 11.9

Additionally, 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.

During the year ended December 31, 2021, we recorded a gain on sale of discontinued operations of $ 183.3 million ($ 131.4 million, net of income taxes).

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.

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 a loss of $ 0.8 million included in income (loss) from discontinued operations, net of income taxes for the year ended December 31, 2021.

Derivative Instruments and Fair Value Measurements

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TRIP Holdings warehouse loan (2)

Tribute Rail secured railcar equipment notes (2)

$ 788.5 3.60 % $ — $ — $ —

Tribute Rail secured railcar equipment notes $ 256.0 2.86 % $ — $ 0.4 $ 0.6

2017 promissory notes – interest rate cap

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2017 promissory notes – interest rate swap $ 408.1 2.31 % $ 13.1 $ ( 12.5 ) $ —

TRL-2023 term loan (3)

$ 267.6 3.79 % $ ( 2.5 ) $ 2.7 $ —

(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.

(2) As of March 31, 2023, all amounts previously recorded in AOCI related to this hedge have been fully amortized.

(3) In June 2023, Trinity Rail Leasing 2023 LLC (“TRL-2023”), a limited purpose, indirect wholly-owned subsidiary of the Company owned through Trinity Industries Leasing Company ("TILC"), executed and designated a new interest rate swap derivative as a cash flow hedge to fix the Secured Overnight Financing Rate ("SOFR") component of the interest rate on a portion of the outstanding TRL-2023 term loan agreement ("TRL-2023 term loan").

Effect on interest expense – increase/(decrease)

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2018 secured railcar equipment notes

$ 0.2 $ 0.2 $ 0.2 $ 0.2

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$ (0.1) $ (0.1) $ (0.1) $ ( 0.1 )

Open hedge (1) :

Open hedges (1) :

2017 promissory notes – interest rate swap

$ (11.7) $ 4.0 $ 12.3 $ ( 11.7 )

TRL-2023 term loan $ (2.2) $ — $ — $ ( 2.7 )

(1) Based on the fair value of open hedges as of December 31, 2023 .

Foreign Currency Hedge

Our exposure related to foreign currency transactions is currently hedged for up to a maximum of twelve months.

Information related to our foreign currency hedge is as follows:

accompanying balance sheet at December 31, 2022

Foreign Currency Hedges

Our exposure related to foreign currency transactions is currently hedged for up to a maximum of eighteen months.

Information related to our foreign currency hedges is as follows:

accompanying balance

sheet at December 31, 2023

Effect on cost of revenues – increase/(decrease)

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

2022 2021 2020

Instrument 2023 2022 2021

(in millions)

$ 30.8 $ 2.0 $ ( 3.0 ) $ (1.4) $ (7.7) $ 3.2 $ ( 3.0 )

Forward contracts $ 125.3 $ 5.8 $ ( 6.5 ) $ (7.1) $ (1.4) $ (7.7) $ ( 5.8 )

Options $ 16.4 $ 1.0 $ ( 0.4 ) $ 1.4 $ — $ — $ ( 0.4 )

(1) Based on the fair value of open hedges as of December 31, 2023.

Derivatives Not Designated as Hedging Instruments

Asset/(Liability)

(Liability) at

December 31, 2023

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($ in millions)

Interest rate derivatives (1) :

TILC warehouse facility – interest rate cap $ 800.0 2.50 % $ 6.6 $ (5.4) $ (1.6) $ —

TILC – interest rate cap $ 800.0 2.50 % $ ( 6.6 ) $ 5.4 $ 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.

(1) 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.

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(in millions)

Interest rate hedge (1)

Foreign currency hedge (1)

Derivatives designated as hedging instruments:

Interest rate hedges $ 13.1 $ 19.7

Foreign currency forward contracts 5.8 2.0

Foreign currency options 1.0 —

Derivatives not designated as hedging instruments:

TILC warehouse facility – interest rate cap 6.6 21.6

Total assets $ 26.5 $ 43.3

Interest rate hedge (2)

Foreign currency hedge (2)

Liabilities (2) :

Derivatives designated as hedging instruments:

Interest rate hedges $ 2.5 $ —

Derivatives not designated as hedging instruments:

TILC – interest rate cap 6.6 21.6

Total liabilities $ 9.1 $ 21.6

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

As of December 31, 2023 and 2022, we have no assets or liabilities measured on a recurring basis as Level 3 in the fair value hierarchy, except as described in Note 2.

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.

See Note 9 for the estimated fair values of our debt instruments.

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We report our operating results in two reportable segments:

(1) the Railcar Leasing and Management Services Group, which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services;

(1) the Railcar Leasing and Management Services Group, which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services, as well as other railcar logistics products and services;

and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components, and provides railcar maintenance and modification services.

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Gains and losses from the sale of property, plant, and equipment are included in the operating profit of each respective segment.

Our Chief Operating Decision Maker ("CODM") regularly reviews the operating results of our reportable segments in order to assess performance and allocate resources.

Our CODM does not consider impairment of long-lived assets or restructuring activities when evaluating segment operating results;

therefore, impairment of long-lived assets and restructuring activities are not allocated to segment profit or loss.

Our CODM regularly reviews the operating results of our reportable segments in order to assess performance and allocate resources.

Our CODM does not consider restructuring activities when evaluating segment operating results;

therefore, restructuring activities are not allocated to segment profit or loss.

Sales and related net profits ("deferred profit") from the Rail Products Group to the Leasing Group are recorded in the Rail Products Group and eliminated in consolidation and are reflected in "Eliminations − Lease subsidiary" in the tables below.

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Capital expenditures $ 547.2 $ 21.3 $ 2.3 $ — $ — $ 570.8

The reconciliation of segment operating profit (loss) to consolidated net income (loss) is as follows:

The reconciliation of segment operating profit to consolidated net income is as follows:

Year Ended December 31,

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(in millions)

Operating profit (loss):

Operating profit:

Railcar Leasing and Management Services Group $ 428.5 $ 423.3 $ 350.9

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Corporate and other ( 108.3 ) ( 80.8 ) ( 84.1 )

Impairment of long-lived assets — — ( 396.4 )

Restructuring activities, net 2.2 ( 1.0 ) 3.7

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Eliminations – Other 1.3 ( 1.4 ) ( 1.2 )

Consolidated operating profit (loss) 334.0 256.8 ( 154.6 )

Consolidated operating profit 417.0 334.0 256.8

Other (income) expense 268.0 207.5 201.6

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

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

Net income $ 126.6 $ 72.9 $ 181.8

Total assets for these segments is shown in the table below.

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Revenues and operating profit for our Mexico operations for the years ended December 31, 2023, 2022, and 2021 were not significant in relation to the Consolidated Financial Statements.

Total assets for our Mexico operations as of December 31, 2022 and 2021 are $ 571.7 million and $ 414.8 million, respectively.

Total long-lived assets for our Mexico operations as of December 31, 2022 and 2021 are $ 96.3 million and $ 102.0 million, respectively.

Total assets for our Mexico operations as of December 31, 2023 and 2022 were $ 590.0 million and $ 571.7 million, respectively.

Total long-lived assets for our Mexico operations as of December 31, 2023 and 2022 were $ 96.1 million and $ 96.3 million, respectively.

One customer in the Rail Products Group comprised approximately 13 %, 17 %, and 22 % of our consolidated revenues during the years ended December 31, 2023, 2022, and 2021, respectively.

Partially-Owned Leasing Subsidiaries

Effective January 1, 2024, the Company modified its organizational structure to better leverage our maintenance services capabilities to support lease fleet optimization and to grow our services and parts businesses.

The new structure will result in a change to our reportable segments beginning in 2024.

In connection with this organizational update, we will align the maintenance services business, which is currently reported in the Rail Products Group, to be presented within our leasing business.

This change aligns with the way in which our CODM will assess performance and allocate resources.

Consequently, beginning January 1, 2024, we will report our operating results in two reportable segments:

(1) Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) Rail Products Group.

These changes will have no impact to our previously reported consolidated results of operations, financial position, or cash flows.

All prior period segment results will be recast to reflect these changes and present results on a comparable basis in future filings, beginning with our Quarterly Report on Form 10-Q for the three months ended March 31, 2024.

Partially-Owned Subsidiaries

Investments in Leasing Subsidiaries

Through our wholly-owned subsidiary, TILC, we formed two subsidiaries, TRIP Holdings and RIV 2013, for the purpose of providing railcar leasing services in North America for institutional investors.

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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") and Tribute Rail.

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

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

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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 debt issuance of Tribute Rail and the repayment of TRIP Railcar Co.

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

See Note 9 for additional information regarding the debt of TRIP Holdings and RIV 2013 and their respective subsidiaries.

Other Investment in Consolidated Affiliate

In February 2023, the Company and a third party formed Trinity Global Ventures to deliver railcars and provide warranty support services in Saudi Arabia.

Trinity Global Ventures is owned 51.0 % by Trinity Rail Group, LLC ("Trinity Rail Group"), a wholly-owned subsidiary of the Company, and 49.0 % by the third party.

Upon consideration under the VIE model of ASC 810, Consolidation , Trinity has concluded that Trinity Global Ventures meets the definition of a VIE.

Trinity Rail Group has a variable interest in Trinity Global Ventures arising from its 51.0 % equity ownership position.

We determined that Trinity is the primary beneficiary and therefore consolidates this entity as we have the power to direct the activities of the entity that most significantly impact its economic performance.

At December 31, 2023, the carrying value of our investment in Trinity Global Ventures totaled $ 2.2 million, which is eliminated in consolidation.

Investment in Unconsolidated Affiliate

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 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.

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

As part of this program, a joint venture was formed, Signal Rail Holdings LLC (“Signal Rail”), which is currently owned 87.1 % by Wafra Funds and 12.9 % by TILC.

To date, TILC has sold 6,460 railcars and related leases to Signal Rail for an aggregate sales price of $ 598.6 million.

TILC services all railcars owned by Signal Rail.

Upon consideration under the VIE model of ASC 810, Trinity has concluded that Signal Rail meets the definition of a VIE.

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At December 31, 2023, 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.

The carrying value of this investment represents our maximum exposure in Signal Rail.

Railcar Leasing and Management Services Group

The Railcar Leasing and Management Services Group owns and operates a fleet of railcars as well as provides third-party fleet leasing, management, and administrative services.

The Railcar Leasing and Management Services Group owns and operates a fleet of railcars as well as provides third-party fleet leasing, management, and administrative services, as well as other railcar logistics products and services.

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

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Leasing and management $ 870.9 $ 770.6 $ 735.3 13.0 % 4.8 %

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

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

Operating profit (1) :

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Selected expense information:

Depreciation (4)

Depreciation and amortization (3)

$ 244.6 $ 236.4 $ 226.0 3.5 % 4.6 %

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* Not meaningful

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

Therefore, all railcar sales for the 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.

(1) Operating profit includes:

depreciation;

depreciation and amortization;

fleet operating costs, which include maintenance, compliance, freight, and storage;

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(2) 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) 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.

(3) Depreciation and amortization expense includes $ 5.6 million, $ 12.1 million, and $ 8.8 million for the years ended December 31, 2023, 2022, and 2021, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program.

(4) 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.

LLC's outstanding term loan agreement.

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.

Information related to lease portfolio sales is as follows:

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and certain subsidiaries.

The Leasing Group also has future amounts due for operating lease obligations related to office space of approximately $ 0.2 million, which is excluded from the table above.

The Leasing Group also has future amounts due for operating lease obligations related to rail terminal warehouse, office spaces, and equipment leases of approximately $ 5.3 million, which is excluded from the table above.

Property, Plant, and Equipment

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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 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.

As of December 31, 2022, we had non-operating plants with a net book value of $ 2.6 million .

See Note 1 for more information regarding assets classified as held for sale as of December 31, 2023 and 2022.

Goodwill and Intangible Assets

The changes in the net carrying amount of goodwill by reportable segment are as follows:

Railcar Leasing and Management Services Group Rail Products Group

(in millions)

As of December 31, 2022

$ 7.1 $ 188.8 $ 195.9

Acquisitions and purchase price allocation adjustments (Note 2)

Divestitures (Note 2)

( 1.2 ) — ( 1.2 )

As of December 31, 2023

$ 32.7 $ 188.8 $ 221.5

Intangible Assets

A summary of our intangible assets, which are included in other assets in our Consolidated Balance Sheets, is as follows:

December 31, 2023 December 31, 2022

Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

(in years) (in millions)

Indefinite-lived intangible assets:

Trade names * $ 11.2 $ — $ 11.2 $ 4.4 $ — $ 4.4

Finite-lived intangible assets:

Customer relationships & backlog 14.3 53.6 ( 5.8 ) 47.8 35.4 — 35.4

Patents, developed technology, and other 9.3 36.6 ( 9.4 ) 27.2 25.9 ( 5.4 ) 20.5

Lease-related intangibles 10.8 35.9 ( 15.4 ) 20.5 31.6 ( 12.9 ) 18.7

Total finite-lived intangible assets 126.1 ( 30.6 ) 95.5 92.9 ( 18.3 ) 74.6

Total intangible assets $ 137.3 $ ( 30.6 ) $ 106.7 $ 97.3 $ ( 18.3 ) $ 79.0

* Not subject to amortization

During the years ended December 31, 2023, 2022, and 2021, amortization expense related to our finite-lived intangible assets totaled $ 13.0 million, $ 5.5 million, and $ 4.6 million, respectively, which is included in cost of revenues in our Consolidated Statements of Operations.

As of December 31, 2023, expected amortization expense related to our finite-lived intangible assets for the next five years is as follows:

Expected Amortization Expense

(in millions)

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

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Revolving credit facility $ — $ — $ 225.0 $ 225.0

Senior notes, net of unamortized discount of $ 0.1 and $ 0.1

Senior notes due 2024, net of unamortized discount of $ 0.1 and $ 0.1

399.9 394.5 399.9 387.5

Senior notes due 2028 400.0 417.6 — —

799.9 812.1 624.9 612.5

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232.7 220.2 241.1 239.7

TRL-2023 term loan 334.5 334.5 — —

TILC warehouse facility 529.3 529.3 721.8 721.8

Other equipment financing 52.3 52.3 — —

3,836.5 3,686.2 3,821.8 3,607.5

8 unchanged sentences

311.0 300.1 322.6 281.1

TRIP Railcar Co.

term loan — — 323.7 323.7

1,147.8 1,044.0 1,192.6 1,024.3

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Total debt $ 5,754.2 $ 5,542.3 $ 5,607.6 $ 5,244.3

The estimated fair value of our 4.55 % senior notes due 2024 ("Senior Notes") is based on a quoted market price in a market with little activity (Level 2 input).

The estimated fair values of our 7.75 % senior notes due 2028 ("Senior Notes due 2028") and our 4.55 % senior notes due 2024 ("Senior Notes due 2024") are based on a quoted market price in a market with little activity (Level 2 input).

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 loan facility, and TRIP Railcar Co.

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

The respective carrying values of our revolving credit facility, 2017 promissory notes, TRL-2023 term loan, and TILC warehouse facility approximate fair value because the interest rate adjusts to the market interest rate.

As of December 31, 2023, we evaluated the fair value of the other equipment financing liability using Level 3 inputs and determined that the fair value approximates the carrying value.

Corporate – Recourse

Revolving Credit Facility – We have a $ 600.0 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.

In March 2023, we amended our revolving credit facility to increase the total facility commitment from $ 450.0 million to $ 600.0 million, increase the maximum leverage ratio to provide additional flexibility, modify the limitations on restricted payments, and allow up to $ 100.0 million of annual dividends on the Company's common stock.

We incurred $ 0.7 million in costs related to the amendment, which will be amortized to interest expense through the maturity date.

The maturity date for the revolving credit facility is the earlier of (i) July 25, 2027 or (ii) July 2, 2024 if our Senior Notes due 2024 have not been repaid in full by that date.

During the year ended December 31, 2023, we had total borrowings of $ 515.0 million and total repayments of $ 740.0 million under the revolving credit facility.

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

Of the $ 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.

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 17.4 million, leaving $ 582.6 million available for borrowing as of December 31, 2023.

The majority of our outstanding letters of credit as of December 31, 2023 are scheduled to expire in October 2024.

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.

The revolving credit facility bears interest at a variable rate of SOFR plus (1) a benchmark adjustment of 10 basis points and (2) a facility margin of 1.75 %, for an all-in interest rate of 7.17 % as of December 31, 2023.

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, 2023).

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

The revolving credit facility places certain restrictions on the Company and its subsidiaries, including, but not limited to, the ability to incur additional indebtedness and guarantee indebtedness;

pay dividends or make other distributions or repurchase or redeem capital stock;

prepay, redeem, or repurchase certain debt;

make loans and investments;

incur liens on assets;

enter into transactions with affiliates;

and consolidate, merge, or liquidate.

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

As of December 31, 2023, we were in compliance with all such financial covenants.

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Senior Notes Due 2024 – In September 2014, we issued $ 400.0 million aggregate principal amount of 4.55 % senior notes due October 2024.

Interest on the Senior Notes is payable semiannually commencing April 1, 2015.

The Senior Notes rank senior to existing and future subordinated debt and rank equal to existing and future senior indebtedness, including our revolving credit facility.

The Senior Notes are subordinated to all our existing and future secured debt to the extent of the value of the collateral securing such indebtedness.

The Senior Notes contain covenants that limit our ability and/or certain subsidiaries' ability to create or permit to exist certain liens;

Interest on the Senior Notes due 2024 is payable semiannually commencing April 1, 2015.

The Senior Notes due 2024 rank senior to existing and future subordinated debt and rank equal to existing and future senior indebtedness, including our revolving credit facility.

The Senior Notes due 2024 are subordinated to all our existing and future secured debt to the extent of the value of the collateral securing such indebtedness.

The Senior Notes due 2024 contain covenants that limit our ability and/or certain subsidiaries' ability to create or permit to exist certain liens;

enter into sale and leaseback transactions;

and consolidate, merge, or transfer all or substantially all of our assets.

Our Senior Notes are fully and unconditionally and jointly and severally guaranteed by each of Trinity’s domestic subsidiaries that is a guarantor under our revolving credit facility.

Our Senior Notes due 2024 are fully and unconditionally and jointly and severally guaranteed by each of Trinity’s domestic subsidiaries that is a guarantor under our revolving credit facility.

See "Liquidity and Capital Resources" in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K.

Senior Notes Due 2028 – In June 2023, we issued $ 400.0 million aggregate principal amount of 7.75 % senior notes due July 2028.

These notes were issued through a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S.

persons pursuant to Regulation S under the Securities Act.

Interest on the Senior Notes due 2028 is payable semiannually commencing January 15, 2024.

The Senior Notes due 2028 rank senior to existing and future subordinated debt and rank equal to existing and future senior indebtedness, including our Senior Notes due 2024 and our revolving credit facility.

The Senior Notes due 2028 are subordinated to all our existing and future secured debt to the extent of the value of the collateral securing such indebtedness.

The Senior Notes due 2028 contain covenants that limit our ability and/or certain subsidiaries' ability to create or permit to exist certain liens;

enter into sale and leaseback transactions;

and consolidate, merge, or transfer all or substantially all of our assets.

Our Senior Notes due 2028 are fully and unconditionally and jointly and severally guaranteed by each of our domestic subsidiaries that is a guarantor under our revolving credit facility.

We incurred $ 5.5 million in debt issuance costs, which will be amortized to interest expense over the term of the Senior Notes due 2028.

Net proceeds received from the issuance were used to repay outstanding borrowings under our revolving credit facility and to pay related fees, costs, premiums, and expenses in connection with the issuance.

We intend to use the remainder of the net proceeds for general corporate purposes, which may include repayment of other debt, including the Senior Notes due 2024.

Wholly-owned leasing subsidiaries

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

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.

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 1.85 %, for an all-in interest rate of 7.31 % at December 31, 2023.

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.

2 unchanged sentences

As of December 31, 2023, $ 677.2 million of the 2017 Promissory Notes was outstanding.

The 2017 Promissory Notes bear interest at a rate of LIBOR plus 1.50 %, for an all-in interest rate of 5.88 % as of December 31, 2022, payable monthly.

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 one-month term SOFR plus a benchmark adjustment.

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

The 2017 Promissory Notes bear interest at one-month term SOFR plus (1) a benchmark adjustment of 11 basis points and (2) a facility margin of 1.50 %, for an all-in interest rate of 6.98 % as of December 31, 2023, and are payable monthly.

The 2017 Promissory Notes are obligations of TRL-2017 and are non-recourse to Trinity.

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").

39 unchanged sentences

The TRL-2022 Notes, of which $ 232.7 million was outstanding as of December 31, 2023, 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.

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

TRL-2023 Term Loan – In June 2023, TRL-2023 entered into a $ 340.0 million term loan agreement.

The TRL-2023 term loan was established to finance railcars and related operating leases thereon purchased by TRL-2023 from TILC and TILC's warehouse loan facility.

The TRL-2023 term loan bears interest at a variable rate of daily simple SOFR plus (1) a benchmark adjustment of 10 basis points and (2) a facility margin of 1.80 %, for an all-in interest rate of 7.23 % as of December 31, 2023.

The TRL-2023 term loan has a stated maturity date of June 12, 2028.

We incurred $ 2.2 million in debt issuance costs, which will be amortized to interest expense over the term of the TRL-2023 term loan.

The TRL-2023 term loan is an obligation of TRL-2023 and is non-recourse to Trinity.

The obligation is secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2023.

Net proceeds received from the transaction were used to repay approximately $ 300.1 million of borrowings under TILC's warehouse loan facility and for general corporate purposes.

Other equipment financing – In December 2023, TILC sold to a third party, and subsequently leased back, certain railcars for total proceeds of $ 52.3 million.

The transaction did not qualify as a sale-leaseback and is being accounted for as a financing transaction.

Accordingly, no gain or loss was recorded in connection with this transaction, and the sold assets remain within property, plant, and equipment, net in our Consolidated Balance Sheets and will continue to be depreciated over their remaining useful lives for the duration of the lease.

A financing liability equal to the amount of consideration received from the buyer-lessor was recorded within debt in our Consolidated Balance Sheets.

A portion of the future lease payments that we make to the buyer-lessor will reduce the financing liability and the remainder will be recorded as interest expense.

As of December 31, 2023, the carrying value of the financing liability was $ 52.3 million.

Partially-owned leasing subsidiaries

3 unchanged sentences

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

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.

TRIP Railcar Co.

Term Loan – In June 2021, TRIP Railcar Co.

drew down $ 329.6 million under a term loan agreement ("TRIP Railcar Co.

The TRIP Railcar Co.

term loan was established to finance railcars and operating leases thereon purchased by TRIP Railcar Co.

from Triumph Rail.

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”).

2 unchanged sentences

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”).

2 unchanged sentences

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

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.

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.

Additionally, during the year ended December 31, 2022, we recognized a loss on extinguishment of debt of $ 1.5 million, which related to the write-off of unamortized debt issuance costs in connection with the repayment of TRIP Railcar Co.

LLC's outstanding term loan agreement.

These charges are reflected in the loss on extinguishment of debt line of our Consolidated Statements of Operations for the years ended December 31, 2022 and 2021.

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

1 unchanged sentence

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

See Note 5 for further explanation.

See Note 5 for further information.

Scheduled Repayments of Debt

8 unchanged sentences

(in millions)

Corporate $ — $ 400.0 $ — $ — $ 225.0 $ — $ 625.0

Senior notes due 2024 $ 400.0 $ — $ — $ — $ — $ — $ 400.0

Senior notes due 2028 — — — — 400.0 — 400.0

Non-recourse – leasing (Note 6):

10 unchanged sentences

2022 secured railcar equipment notes 9.0 6.7 8.1 8.2 8.2 192.5 232.7

TRL-2023 term loan 11.0 11.0 11.1 11.1 290.3 — 334.5

TILC warehouse facility

2 unchanged sentences

— 489.2 — — — — 489.2

Other equipment financing 2.3 2.4 2.5 2.7 2.9 39.5 52.3

TRP-2021 secured railcar equipment notes 15.5 15.8 17.2 286.6 — — 335.1

31 unchanged sentences

Changes in valuation allowance and reserves ( 2.2 ) ( 0.9 ) ( 4.3 )

Effect of CARES Act (0.5) 4.5 34.4

Changes in state laws and apportionment ( 7.1 ) ( 0.5 ) 0.3

Release of residual taxes from OCI ( 8.1 ) — —

Effect of CARES Act — ( 0.5 ) 4.5

Foreign rate differential — — 1.4

1 unchanged sentence

Nondeductible compensation — — 1.2

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

Interest expense limitations from partially-owned subsidiaries — — 0.2

Other, net ( 0.6 ) 0.8 ( 0.4 )

3 unchanged sentences

For the year ended December 31, 2023, the difference between the U.S.

statutory rate and the Company's effective tax rate is primarily due to the release of residual taxes out of AOCI;

the re-measurement of our net deferred state income tax liabilities due to apportionment and state law changes, reducing our net deferred tax liability;

changes in our valuation allowances;

state income taxes;

and foreign income taxes.

During the year ended December 31, 2023, one of our partially-owned subsidiaries released residual tax effects that had previously been recorded in AOCI.

This deferred tax benefit was originally recorded before the partially-owned subsidiary was treated as a flow-through entity, remaining in AOCI until the underlying book-to-tax difference no longer existed, which occurred during the year ended December 31, 2023.

As a result, we recorded an $ 11.9 million income tax benefit in our Consolidated Statements of Operations during the year ended December 31, 2023.

We remeasure our state deferred tax liability on a regular basis to reflect changes in our overall state tax footprint based upon current apportionment information.

We also adjust our deferred balances based upon changes in tax laws and rates during the period in which those laws and rates are enacted, as well as adjusting for acquisition and disposition activity of businesses.

As a result of our changes in apportionment, tax law changes, and business additions this year, we recorded a non-cash, deferred tax benefit of $ 10.6 million during the year ended December 31, 2023.

The tax provision for the year ended December 31, 2023 also reflects a $ 3.2 million tax benefit related to the net impact of an adjustment to valuation allowances, primarily for deferred tax assets in Mexico, state tax loss carryforwards, and federal tax credits.

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.

1 unchanged sentence

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.

For the year ended December 31, 2020, the difference between the U.S.

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.

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

Due to the enactment of the CARES Act, Trinity filed a carryback claim for the 2018-2020 tax losses to the 2013-2015 tax years, allowing the recovery of taxes previously paid.

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 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.

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

Due to the enactment of the CARES Act, Trinity filed a carryback claim for the 2018-2020 tax losses to the 2013-2015 tax years, allowing the recovery of taxes previously paid, resulting in a tax benefit of $ 0.5 million and a tax expense of $ 2.5 million for the years ended December 31, 2022 and 2021, respectively.

Income (loss) from continuing operations before income taxes for the years ended December 31, 2023, 2022, and 2021 was $ 137.2 million, $ 127.1 million, and $ 44.6 million, respectively, for U.S.

operations, and $( 0.6 ) million, $ 10.6 million, and $( 7.4 ) million, respectively, for foreign operations, principally Mexico and Canada.

operations, and $ 11.8 million, $( 0.6 ) million, and $ 10.6 million, respectively, for foreign operations.

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.

12 unchanged sentences

Warranties and reserves 1.5 2.8

Equity items — 5.9

Tax loss carryforwards and credits 31.2 40.4

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Net deferred tax liability $ 1,102.0 $ 1,133.1

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.

At December 31, 2023, we had $ 20.0 million of tax-effected state loss carryforwards and $ 11.2 million of net federal and state credits remaining.

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 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.

Our federal tax return years through 2021 are effectively settled.

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 2018 forward.

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The total amount of accrued interest and penalties from continuing operations as of December 31, 2023 and 2022 was $ 2.3 million and $ 2.2 million, respectively.

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.

Income tax expense (benefit) for the years ended December 31, 2023, 2022, and 2021 included an increase of $ 0.1 million, a decrease of $ 0.8 million, and an increase of $ 0.1 million, respectively, with regard to interest expense and penalties related to uncertain tax positions.

Employee Retirement Plans

We sponsor defined benefit plans and a defined contribution plan (the "401(k) plan") that provide retirement income and death benefits for eligible employees.

The annual measurement date of the benefit obligations, fair value of plan assets, and funded status is December 31.

We sponsor a defined contribution plan (the "401(k) plan") that provides retirement income for eligible employees.

Additionally, we sponsor a Supplemental Executive Retirement Plan ("SERP"), which is our only remaining defined benefit plan and is frozen to new participants.

The annual measurement date of the benefit obligations and funded status is December 31.

Components of Net Periodic Benefit Cost and Other Retirement Expenses

Year Ended December 31,

2023 2022 2021

(in millions)

Defined contribution expense $ 10.1 $ 9.1 $ 8.6

Net periodic benefit cost – Supplemental Executive Retirement Plan (1)

$ 0.7 $ 0.7 $ 0.7

(1) 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

At December 31, 2023 and 2022, the projected benefit obligations and net funded status of our SERP were $ 11.1 million and $ 11.2 million, respectively, which are included in accrued liabilities in our Consolidated Balance Sheets.

Amounts recognized in other comprehensive income

Amounts recognized in other comprehensive income related to actuarial gains and the amortization of actuarial gains or losses during the years ended December 31, 2023, 2022, and 2021 were not significant in relation to the Consolidated Financial Statements.

At December 31, 2023, AOCI included unrecognized actuarial losses related to our SERP of $ 2.6 million ($ 1.4 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, 2024 are $ 0.1 million ($ 0.1 million, net of related income taxes).

Pension Plan Termination

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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 AOCI.

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

During the year ended December 31, 2021, as permitted by applicable regulations, we used $ 10.9 million of the Pension Plan surplus to fund obligations associated with the Company's profit sharing plans and used $ 2.5 million to fund pension administrative expenses required to finalize the settlement of the Pension Plan.

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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

Year Ended December 31,

2022 2021 2020

Assumptions used to determine benefit obligations at the annual measurement date were:

Obligation discount rate (1)

Assumptions used to determine net periodic benefit costs were:

Obligation discount rate (1)

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.

The expected long-term rate of return on the plans' assets was an assumption reflecting the anticipated weighted average rate of earnings on the portfolio over the long-term.

To arrive at this rate, estimates were developed based upon the anticipated performance of the plans' assets.

Substantially all of the accrued benefits of our remaining pension plans were frozen in 2009, with all qualified pension plans settled as of December 31, 2020.

Components of Net Periodic Benefit Cost and Other Retirement Expenses

Year Ended December 31,

2022 2021 2020

(in millions)

Expense Components

Service cost $ — $ — $ —

Interest 0.4 0.4 14.8

Expected return on plan assets — — ( 20.9 )

Amortization of actuarial loss 0.3 0.3 6.0

Amortization of prior service cost — — 1.2

Settlement loss — — 151.5

Net periodic benefit cost 0.7 0.7 152.6

Defined contribution expense 9.1 8.6 7.5

Net expense $ 9.8 $ 9.3 $ 160.1

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

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)

Year Ended December 31,

2022 2021 2020

(in millions)

Settlement of pension plan $ — $ — $ 151.5

Actuarial gain (loss) 2.6 0.4 10.4

Amortization of actuarial loss 0.3 0.3 6.0

Amortization of prior service cost — — 1.2

Total before income taxes 2.9 0.7 169.1

Income tax (benefit) expense 0.6 0.2 39.2

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

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.

Temporary cash investments consist of U.S.

dollars held in master trust accounts with the trustee.

These temporary cash investments are classified as Level 1 instruments.

See Note 3 for a description of the valuation methodologies used in determining fair value.

During the year ended December 31, 2023, we reverted the remaining surplus pension assets of $ 0.4 million to the Company and incurred an excise tax of approximately $ 0.1 million.

Following the completion of this transaction, there are no longer any pension assets reported in our Consolidated Balance Sheets.

Funding of Defined Contribution Plans

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Deferred Compensation Plan for the year ending December 31, 2024 are expected to be $ 10.6 million, compared to $ 10.1 million contributed during 2023.

Asset Impairments and Restructuring Activities

Second quarter of 2020 impairment of small cube covered hopper railcars

We monitor the carrying values of long-lived assets and right-of-use assets for potential impairment.

The carrying values of long-lived assets and right-of-use assets are considered impaired when the asset's carrying value is not recoverable through undiscounted future cash flows and the asset's carrying value exceeds its fair value.

During the second quarter of 2020, the oil and gas proppants (or “frac sand”) industry continued to experience economic pressure created by low oil prices, reduced fracking activity, and the ongoing economic impact of COVID-19.

Significant price declines in the crude oil market, as well as lower demand for certain commodities, resulted in a decline in customer demand for certain types of railcars.

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 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.

We performed a cash flow recoverability test of our small cube covered hopper railcars and compared the undiscounted cash flows to the carrying value of the assets.

This analysis indicated that the carrying value exceeded the estimated undiscounted cash flows, and therefore, we were required to measure the fair value of our fleet of small cube covered hopper railcars and determine the amount of an impairment loss, if any.

The fair value of the asset group was determined using an income approach, which we believe most accurately reflects a market participant's viewpoint in valuing these railcars.

The results of our analysis indicated an estimated fair value of the asset group of approximately $ 191.7 million, in comparison to the asset group's carrying amount of $ 550.0 million, net of deferred profit.

As a result, during the second quarter, we recorded a pre-tax non-cash impairment charge of $ 358.3 million related to our small cube covered hopper railcars.

Additionally, we evaluated the right-of-use assets associated with our leased-in portfolio of small cube covered hopper railcars and determined that these assets were impaired based on consideration of an expected decline in future cash flows over the remaining lease term, which resulted in an additional pre-tax non-cash impairment charge of approximately $ 11.1 million.

The aggregate impairment charge of $ 369.4 million, which includes $ 81.3 million associated with noncontrolling interest, is reflected in the impairment of long-lived assets line of our Consolidated Statements of Operations for the year ended December 31, 2020.

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

These assumptions included, but were not limited to:

estimates regarding the remaining useful life over which the railcars are expected to generate cash flows;

average lease rates;

railcar utilization percentages;

operating expenses;

and the selection of an appropriate discount rate.

Management selected these estimates and assumptions based on our railcar industry expertise.

We also consulted with third-party energy and frac sand industry experts to gain insights with respect to the long-term outlook for these underlying markets.

Other asset write-downs

During the fourth quarter of 2020, management approved a plan to exit certain non-strategic maintenance facilities (the "disposal group").

We determined that the planned divestiture of the disposal group met the criteria to be classified as assets held for sale, and consequently, we measured the assets of the disposal group at fair value, less any costs to sell.

The results of our analysis indicated a pre-tax non-cash write-down of $ 15.2 million, which we recorded during the year ended December 31, 2020.

The charge is reflected in the impairment of long-lived assets line of our Consolidated Statements of Operations for the year ended December 31, 2020.

Additionally, during the year ended December 31, 2020, we recorded a pre-tax non-cash charge to write off $ 11.8 million related to investments in certain emerging technologies.

This charge is reflected in the impairment of long-lived assets line of our Consolidated Statements of Operations for the year ended December 31, 2020.

Restructuring activities

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.

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

Employee Severance Costs Gain on Disposition of Assets Total

(in millions)

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

Rail Products Group 0.3 — 0.3

Corporate and other — ( 4.0 ) ( 4.0 )

Total restructuring activities $ 0.3 $ ( 4.0 ) $ ( 3.7 )

Year Ended December 31, 2020

Employee Severance Costs Contract Termination Costs (Gain)/Loss on Disposition of Assets Write-down of Assets Total

(in millions)

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

Rail Products Group 4.0 0.2 ( 2.9 ) — 1.3

Corporate and other 2.3 0.4 0.2 5.3 8.2

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

Accumulated Other Comprehensive Income (Loss)

Changes in AOCI for the years ended December 31, 2023 and 2022 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)

Currency translation adjustments Unrealized gains/(losses) on derivative financial instruments Net actuarial gains/(losses) of defined benefit plans Accumulated other comprehensive income (loss)

(in millions)

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— 3.5 0.2 3.7

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

noncontrolling interest

— ( 1.2 ) — ( 1.2 )

Other comprehensive income 1.3 33.1 2.3 36.7

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— 20.9 ( 1.2 ) 19.7

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

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

Other comprehensive income (loss), net of tax, before reclassifications — 10.6 ( 0.3 ) 10.3

Amounts reclassified from AOCI, net of tax benefit (expense) of $ — , $ 7.4 , $ — , and $ 7.4

— ( 26.1 ) 0.1 ( 26.0 )

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

noncontrolling interest — 7.0 — 7.0

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$ — $ 12.4 $ ( 1.4 ) $ 11.0

In May 2013, one of our partially-owned leasing subsidiaries, TRIP Holdings, was converted to a partnership for income tax purposes.

At the time of the conversion, TRIP Holdings had deferred tax assets associated with certain terminated interest rate hedges that were initially recognized as a component of AOCI.

As TRIP Holdings was no longer a taxable entity following the conversion, these deferred tax assets were removed during the year ended December 31, 2013, with a corresponding charge to income tax expense in the Consolidated Statements of Operations, leaving residual tax effects in AOCI.

These residual tax effects are released when the item giving rise to the tax effect is disposed of, liquidated, or terminated.

Pursuant to our election of the portfolio approach, we released the residual tax effects when all of the interest rate swap balances were fully amortized, which occurred during the first quarter of 2023.

Consequently, during the year ended December 31, 2023, we recorded an income tax benefit of $ 13.2 million to TRIP Holdings, reflecting the reclassification of the residual tax effects previously recorded in AOCI.

The controlling interest portion of this income tax benefit was $ 4.4 million.

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

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Stockholders' Equity

New Share Repurchase Authorization

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.

Share Repurchase Authorization

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

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

There were no shares repurchased under this share repurchase program during the years ended December 31, 2023 and 2022.

Previous Share Repurchase Authorization

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(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.

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

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Stock Award Plans

Our 2004 Fourth Amended and Restated Trinity Industries, Inc.

Our Fifth Amended and Restated Trinity Industries, Inc.

Stock Option and Incentive Plan (the "Plan”) provides for awarding 22,050,000 (adjusted for stock splits) shares of common stock plus (i) shares covered by forfeited, expired, and canceled options granted under prior plans;

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Expense related to stock options is recognized on a straight-line basis over the vesting period.

No options were exercisable at December 31, 2022.

Number of Shares Weighted Average Grant-Date Fair Value per Award Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value

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Cancelled — $ —

Options outstanding at December 31, 2022

Options outstanding and exercisable at December 31, 2023

300,000 $ 5.26 6.1 $ 1.5

At December 31, 2022, unrecognized compensation expense related to stock options totaled $ 0.1 million , which will be recognized over a weighted average period of 0.1 years.

At December 31, 2023, there was no unrecognized compensation expense related to stock options.

The weighted average exercise price of stock options outstanding as of December 31, 2023 was $ 21.61 .

The fair value of the stock options granted during the year ended December 31, 2020 was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

Year Ended December 31, 2020

Exercise price $ 21.61

Risk-free interest rate 1.48 %

Expected life (in years) 6.50

Equity volatility 35.00 %

Dividend yield 3.42 %

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.

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Granted 284,061 $ 27.72

Vested ( 196,113 ) $ 24.16

Performance adjustment (1)

( 27,299 ) $ 20.05

( 412,827 ) $ 24.71

Forfeited ( 18,112 ) $ 28.23

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747,214 $ 29.41

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.

(1) For the 2020-2022 performance period, performance adjustment includes 221,509 performance units for return on equity, for which actual performance was below the minimum established threshold and thus resulted in no payout, and is net of 194,210 additional performance units for relative total shareholder return, for which actual performance resulted in a payout of 200% of target.

(2) Includes 194,210 performance units for the 2020-2022 performance period for relative total shareholder return that were paid out at 200% of target based on actual performance achieved.

At December 31, 2023, unrecognized compensation expense related to performance units totaled $ 7.8 million, which will be recognized over a weighted average period of 1.4 years.

The total grant-date fair value of performance units vested and released during the years ended December 31, 2023, 2022, 2021 was $ 10.2 million, $ 4.7 million, and $ 7.2 million, respectively.

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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.

Certain RSAs vest in their entirety upon an 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.

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552,240 $ 20.84

(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.

(1) The balance of RSAs outstanding at December 31, 2023 includes approximate ly 0.2 million RSAs for Arcosa Inc.

("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.

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Earnings Per Common Share

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

per common share ("EPS") is computed by dividing net income (loss) attributable to Trinity remaining after allocation to unvested restricted shares by the weighted average number of basic common shares outstanding for the period.

Basic net income attributable to Trinity Industries, Inc.

per common share ("EPS") is computed by dividing net income attributable to Trinity remaining after allocation to unvested restricted shares by the weighted average number of basic common shares outstanding for the period.

Except when the effect would be antidilutive, the calculation of diluted EPS includes the net impact of potentially dilutive common shares.

The Company has certain unvested RSAs that participate in dividends on a nonforfeitable basis and are therefore considered to be participating securities.

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

Consequently, diluted net income attributable to Trinity Industries, Inc.

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

There were no restricted shares and stock options included in the computation of diluted earnings per common share for the year ended December 31, 2020 as we incurred a loss for the period, and any effect on loss per common share would have been antidilutive.

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

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

Year Ended December 31,

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(in millions, except per share amounts)

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

Income from continuing operations $ 140.0 $ 98.9 $ 39.3

Net (income) loss attributable to noncontrolling interest ( 20.6 ) ( 12.8 ) 0.2

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

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

119.4 86.1 39.5

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( 13.4 ) ( 26.0 ) 142.5

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

Net income attributable to Trinity Industries, Inc.

$ 106.0 $ 60.1 $ 182.0

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Basic earnings per common share:

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

Income from continuing operations $ 1.47 $ 1.05 $ 0.39

Income (loss) from discontinued operations ( 0.16 ) ( 0.32 ) 1.40

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

Basic net income attributable to Trinity Industries Inc.

$ 1.31 $ 0.73 $ 1.79

Diluted earnings per common share:

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

Income from continuing operations $ 1.43 $ 1.02 $ 0.38

Income (loss) from discontinued operations ( 0.16 ) ( 0.31 ) 1.37

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

Diluted net income attributable to Trinity Industries Inc.

$ 1.27 $ 0.71 $ 1.75

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Harman's petition ended this action.

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.

Pursuant to the purchase and sale agreement related to the sale of THP, the Company 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

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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.

On February 7, 2024, the trial court granted the Company's motion for summary judgment and ordered that the trial dates and hearing dates in this matter be removed from the court's docket.

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

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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.

Harman alleged the Company violated the Tennessee False Claims 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.

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

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.

On June 13, 2023, the Tennessee Court of Appeals affirmed the trial court's decision dismissing Mr.

Harman's Second Amended Complaint with prejudice.

On August 14, 2023, Mr.

Harman filed an Application for Permission to Appeal in the Tennessee Supreme Court.

On December 19, 2023, the Tennessee Supreme Court denied Mr.

Harman's Application.

The denial of Mr.

Harman's Application ended this action.

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

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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, 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.

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

Based on information currently available to the Company and previously disclosed, we currently do not believe that a loss is probable in the 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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1516-CV23684 (Circuit Court of Jackson County, Missouri).

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.

The case was 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.

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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.

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

As previously reported, 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.

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 Statements of Operations, based on the Company’s assessment that a settlement was probable and the estimated costs to resolve this action.

To date, the Company has funded $ 18.1 million in connection with the settlement and refined certain estimates, resulting in a remaining liability of $ 7.2 million as of December 31, 2023.

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.

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Product liability cases

The Company is currently defending product liability lawsuits in several different states that are alleged to involve the ET Plus as well as other products manufactured by THP.

The Company is currently defending product liability lawsuits that are alleged to involve the ET Plus as well as other products manufactured by THP.

These cases are diverse in light of the randomness of collisions in general and the fact that each accident involving a roadside device, such as an end terminal, or any other fixed object along the highway, has its own unique facts and circumstances.

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To the extent that the Company believes that a loss is probable with respect to these product liability cases, the accrual for such losses is included in the amounts described below under "Other matters".

East Palestine, OH Train Derailment

On February 3, 2023, a Norfolk Southern Railway freight train derailed 38 railcars in East Palestine, Ohio.

In March 2023, the State of Ohio and the United States Environmental Protection Agency filed lawsuits against Norfolk Southern Railway Company and Norfolk Southern Corporation (“Norfolk Southern”), which were consolidated in the United States District Court for the Northern District of Ohio, Eastern Division in a civil action styled The State of Ohio, ex rel., Dave Yost, Ohio Attorney General, and the United States of America, Plaintiffs v.

Norfolk Southern Railway Company and Norfolk Southern Corporation, Defendants , Civil Action No.

4:23-cv-00517.

In this action, on June 30, 2023, Norfolk Southern filed a third-party complaint against the Company’s wholly-owned subsidiary, TILC.

Norfolk Southern also named as third-party defendants in this action Oxy Vinyls LP, GATX Corporation, General American Marks Company, SMBC Rail Services LLC, Dow Chemical Incorporated, and Union Tank Car Company.

Norfolk Southern asserts third-party claims against TILC for recovery of response costs, contribution, and declaratory relief under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA");

and equitable contribution.

TILC was the owner of one tank car cited in this action, which was leased to a third party, who is also a third-party defendant in the litigation.

On September 15, 2023, TILC filed a motion to dismiss Norfolk Southern’s third-party complaint, which remains pending.

In April 2023, multiple putative class action lawsuits filed against Norfolk Southern were consolidated in the United States District Court for the Northern District of Ohio, Eastern Division in a civil action styled In re:

East Palestine Train Derailment, Civil Action No.

4:23-CV-00242 .

In this action, on July 25, 2023, Norfolk Southern filed a third-party complaint against the Company’s wholly-owned subsidiary, TILC.

Norfolk Southern also named as third-party defendants in this action Oxy Vinyls LP, GATX Corporation, and General American Marks Company.

Norfolk Southern asserts third-party claims against TILC for negligence, joint and several liability, and contribution.

On August 14, 2023, plaintiffs filed a First Amended Master Consolidated Class Action Complaint and Jury Demand (“First Amended Complaint”) asserting direct claims for negligence, gross negligence, and medical monitoring against Oxy Vinyls LP, GATX Corporation, General American Marks Company, and TILC.

On September 15, 2023, TILC filed a motion to dismiss Norfolk Southern’s third-party complaint, and on September 26, 2023, TILC filed a motion to dismiss plaintiffs’ First Amended Complaint.

Both motions remain pending.

TILC was the owner of one tank car cited in this action, which was leased to a third party, who is also a third-party defendant in the litigation.

On December 8, 2023, a lawsuit was filed against the Company titled Ambridge Area School District et al.

Norfolk Southern Corporation et al., Case No.

2:23-cv-01530-CB, in the United States District Court for the Western District of Pennsylvania.

Plaintiffs in this putative class action lawsuit assert claims against Norfolk Southern Corporation, Norfolk Southern Railway Company, Oxy Vinyls, LP, GATX Corporation, General American Marks Company, and TILC for negligence, negligence per se, strict liability, public and private nuisance, future health monitoring, trespass, and punitive damages.

TILC was the owner of one tank car cited in this action, which was leased to a third party, who is also a third-party defendant in the litigation.

The Company believes it has substantial defenses and intends to vigorously defend itself against all allegations in the third-party and direct claims asserted against TILC.

The Company or its subsidiaries could be named in similar litigation involving other plaintiffs, but the ultimate number of claims and the jurisdiction(s) in which such claims, if any, may be filed may vary.

We do not believe at this time that a loss is probable in these matters, nor can a range of possible losses be determined.

Accordingly, no accrual or range of loss has been included in the accompanying consolidated financial statements.

The Company maintains liability insurance coverage and commercial indemnity agreements to protect the Company’s assets from losses arising from these types of litigation claims.

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 $ 9.4 million to $ 20.9 million.

The range of reasonably possible losses for such matters is $ 8.7 million to $ 19.6 million, which includes our rights to indemnity and recourse to third parties of approximately $ 0.1 million, which is recorded in other assets in our Consolidated Balance Sheets as of December 31, 2023.

This range includes any amounts related to the Highway Products litigation matters described above in the section titled “Highway products litigation." At December 31, 2023, total accruals of $ 10.9 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

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As of December 31, 2023, we have utilized $ 23.7 million of the advanced payments from insurance towards new capital expenditures in support of the reconstruction efforts.

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.

During the year ended December 31, 2023, we recorded gains of $ 6.3 million for property damage insurance recoveries in excess of the net book value of assets destroyed, which is included in the gains on dispositions of other property line in our Consolidated Statements of Operations.

As of December 31, 2023, we have a remaining insurance receivable of $ 2.1 million.

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)

Three Months Ended

March 31, 2022

June 30, 2022

September 30,

December 31, 2022

(in millions, except per share data)

Manufacturing $ 289.8 $ 221.7 $ 302.0 $ 394.0

Leasing 182.9 195.1 194.6 197.2

472.7 416.8 496.6 591.2

Operating costs:

Costs of revenues:

Manufacturing 295.6 220.8 288.0 382.2

Leasing 102.9 104.8 107.3 108.0

398.5 325.6 395.3 490.2

Selling, engineering, and administrative expenses 44.7 45.0 48.0 47.7

Gains on dispositions of property 25.3 27.8 39.4 60.2

Restructuring activities, net — 1.0 — —

Operating profit 54.8 73.0 92.7 113.5

Other expense 41.9 50.7 54.4 60.5

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 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 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 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

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

Three Months Ended

March 31, 2021

June 30, 2021

September 30, 2021

December 31, 2021

(in millions, except per share data)

Manufacturing $ 147.4 $ 108.3 $ 234.5 $ 291.2

Leasing 183.3 185.0 185.3 181.0

330.7 293.3 419.8 472.2

Operating costs:

Costs of revenues:

Manufacturing 149.6 99.6 238.8 281.9

Leasing 96.7 102.5 98.6 93.8

246.3 202.1 337.4 375.7

Selling, engineering, and administrative expenses 44.7 46.2 45.8 42.9

Gains on dispositions of property 11.5 12.1 41.6 13.0

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

Operating profit 51.5 57.8 78.3 69.2

Other expense 52.5 63.5 44.5 41.1

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

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 attributable to Trinity Industries, Inc.

$ 3.3 $ 12.7 $ 32.0 $ 134.0

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.

$ 0.03 $ 0.12 $ 0.33 $ 1.39

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.

$ 0.03 $ 0.12 $ 0.33 $ 1.37

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

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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