What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-01 · 239 added, 116 removed, 874 unchanged (29% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in millions, except per share amounts)

1 unchanged sentence

Leasing & Services 280.5 267.8 564.8 500.5

841.4 722.4 1,651.0 1,364.1

Operating costs:

2 unchanged sentences

Leasing & Services 156.6 167.1 325.2 313.7

662.4 601.2 1,307.3 1,139.7

Selling, engineering, and administrative expenses:

2 unchanged sentences

Corporate & other 33.5 31.6 60.0 57.6

61.3 54.3 113.6 104.2

Gains on dispositions of property:

1 unchanged sentence

Other 1.5 0.6 2.2 2.4

24.2 30.4 27.0 45.7

Restructuring activities, net — ( 1.8 ) — ( 2.2 )

3 unchanged sentences

Other, net ( 3.4 ) 1.3 — 2.9

66.7 68.2 139.2 131.9

Income from continuing operations before income taxes 75.2 30.9 117.9 36.2

9 unchanged sentences

Net income attributable to Trinity Industries, Inc.

$ 54.4 $ 17.0 $ 78.1 $ 21.4

Basic earnings per common share:

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in millions)

2 unchanged sentences

Derivative financial instruments:

Unrealized gains arising during the period, net of tax benefit (expense) of $ 3.4 and $( 0.1 )

Unrealized gains (losses) arising during the period, net of tax benefit (expense) of $ 1.7 , $( 2.7 ), $( 1.7 ), and $( 2.8 )

( 5.5 ) 8.9 5.9 9.4

Reclassification adjustments for gains included in net income, net of tax (expense) benefit of $( 1.7 ), $( 1.1 ), $( 2.9 ), and $ 9.9

( 5.4 ) ( 3.9 ) ( 9.3 ) ( 18.8 )

Comprehensive income (loss) 34.9 ( 0.7 )

( 10.9 ) 5.0 ( 3.4 ) ( 9.4 )

Comprehensive income 45.5 26.2 80.4 25.5

comprehensive income attributable to noncontrolling interest 2.1 4.3 5.9 6.2

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

Comprehensive income attributable to Trinity Industries, Inc.

$ 43.4 $ 21.9 $ 74.5 $ 19.3

3 unchanged sentences

Consolidated Balance Sheets

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions)

32 unchanged sentences

Treasury stock ( 0.6 ) ( 0.6 )

1,049.3 1,037.1

Trinity stockholders' equity 1,065.5 1,037.1

Noncontrolling interest 238.5 238.4

5 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(in millions)

9 unchanged sentences

Gains on insurance recoveries from property damage — ( 1.2 )

Non-cash impact of restructuring activities — ( 2.2 )

Non-cash interest expense 6.7 5.7

Loss on extinguishment of debt 1.5 —

Other 0.2 ( 3.0 )

22 unchanged sentences

Payments to settle contingent consideration liability ( 8.0 ) —

Shares repurchased ( 0.9 ) —

Dividends paid to common shareholders ( 47.2 ) ( 43.3 )

1 unchanged sentence

Distributions to noncontrolling interest ( 5.8 ) ( 9.0 )

Net cash provided by financing activities 71.8 72.4

Net increase (decrease) in cash, cash equivalents, and restricted cash — ( 31.3 )

Net cash provided by (used in) financing activities ( 108.7 ) 159.5

Net increase in cash, cash equivalents, and restricted cash 129.1 2.3

Cash, cash equivalents, and restricted cash at beginning of period 235.1 294.3

29 unchanged sentences

81.8 $ 0.8 $ 20.2 $ 1,010.9 $ 18.4 — $ ( 1.0 ) $ 1,049.3 $ 239.2 $ 1,288.5

Net income — — — 54.4 — — — 54.4 2.0 56.4

Other comprehensive income (loss) — — — — ( 11.0 ) — — ( 11.0 ) 0.1 ( 10.9 )

Cash dividends declared on common stock (1)

— — — ( 23.3 ) — — — ( 23.3 ) — ( 23.3 )

Distributions to noncontrolling interest

— — — — — — — — ( 2.8 ) ( 2.8 )

Stock-based compensation expense

— — 5.9 — — — — 5.9 — 5.9

Settlement of share-based awards, net 0.9 — 0.2 — — ( 0.3 ) ( 9.1 ) ( 8.9 ) — ( 8.9 )

Shares repurchased — — — — — — ( 0.9 ) ( 0.9 ) — ( 0.9 )

Retirement of treasury stock

( 0.3 ) — ( 10.4 ) — — 0.3 10.4 — — —

June 30, 2024

82.4 $ 0.8 $ 15.9 $ 1,042.0 $ 7.4 — $ ( 0.6 ) $ 1,065.5 $ 238.5 $ 1,304.0

(1) Dividends of $ 0.28 per common share for all periods presented in 2024.

Common Stock Capital in

22 unchanged sentences

81.1 $ 0.8 $ 6.6 $ 975.6 $ 12.7 — $ ( 1.5 ) $ 994.2 $ 256.2 $ 1,250.4

(1) Dividends of $ 0.28 and $ 0.26 per common share for the three months ended March 31, 2024 and 2023, respectively .

Net income — — — 17.0 — — — 17.0 4.2 21.2

Other comprehensive income — — — — 4.9 — — 4.9 0.1 5.0

Cash dividends declared on common stock (1)

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

Distributions to noncontrolling interest

— — — — — — — — ( 6.1 ) ( 6.1 )

Stock-based compensation expense

— — 6.5 — — — — 6.5 — 6.5

Settlement of share-based awards, net 1.0 — — — — ( 0.3 ) ( 6.4 ) ( 6.4 ) — ( 6.4 )

Retirement of treasury stock

( 0.3 ) — ( 7.2 ) — — 0.3 7.2 — — —

June 30, 2023

81.8 $ 0.8 $ 5.9 $ 971.0 $ 17.6 — $ ( 0.7 ) $ 994.6 $ 254.4 $ 1,249.0

(1) Dividends of $ 0.26 per common share for for all periods presented in 2023 .

See accompanying notes to Consolidated Financial Statements.

6 unchanged sentences

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

In our opinion, all normal and recurring adjustments necessary for a fair presentation of our financial position as of March 31, 2024 and the results of operations and cash flows for the three months ended March 31, 2024 and 2023 have been made in conformity with generally accepted accounting principles.

In our opinion, all normal and recurring adjustments necessary for a fair presentation of our financial position as of June 30, 2024, the results of operations for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023 have been made in conformity with generally accepted accounting principles.

All significant intercompany accounts and transactions have been eliminated.

Certain prior year balances have been reclassified to conform to the 2024 presentation.

Due to seasonal and other factors, the results of operations for the three months ended March 31, 2024 may not be indicative of expected results of operations for the year ending December 31, 2024.

Due to seasonal and other factors, the results of operations for the six months ended June 30, 2024 may not be indicative of expected results of operations for the year ending December 31, 2024.

These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with our audited Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2023.

9 unchanged sentences

Revenue Recognition

Revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations.

In accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations.

The transaction price does not include any amounts collected on behalf of third parties.

14 unchanged sentences

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 March 31, 2024 and 2023.

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 .

See "Lease Accounting" below for additional information regarding sales-type leases as of June 30, 2024 and 2023.

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 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.

3 unchanged sentences

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

We recorded contract assets of $ 17.4 million and $ 8.8 million as of March 31, 2024 and December 31, 2023, respectively, related to unbilled revenues recognized on repair and maintenance activities that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

We recorded contract assets of $ 12.9 million and $ 8.8 million as of June 30, 2024 and December 31, 2023, respectively, related to unbilled revenues recognized on repair and maintenance activities that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

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

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.

In connection with an acquisition that occurred during the first quarter of 2023, we evaluated whether we are acting as a principal or an agent for certain logistics services provided to a small number of customers.

During the fourth quarter of 2023, we concluded that we act as an agent in these transactions as we do not control the services before they are provided to the customer, and as a result, revenues that were previously recognized on a gross basis should be recognized on a net basis.

We elected to effect this accounting change on a prospective basis as it was not quantitatively or qualitatively material to our consolidated financial statements, and beginning in the fourth quarter of 2023, revenues associated with these services are now recognized on a net basis.

The accounting change had no effect on the Company's previously reported operating profit, net income, earnings per share, Consolidated Balance Sheets, or Consolidated Statements of Cash Flows.

Rail Products Group

3 unchanged sentences

Revenue is recognized over time as sustainable railcar conversions are completed, using an input approach based on the costs incurred relative to the total estimated costs of performing the project.

We recorded contract assets of $ 6.2 million and $ 12.6 million as of March 31, 2024 and December 31, 2023, respectively, which primarily relate to unbilled revenues recognized on sustainable railcar conversions that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

We recorded contract assets of $ 3.2 million and $ 12.6 million as of June 30, 2024 and December 31, 2023, respectively, which primarily relate to unbilled revenues recognized on sustainable railcar conversions that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

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

3 unchanged sentences

Unsatisfied Performance Obligations

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of March 31, 2024 and the percentage of the outstanding performance obligations as of March 31, 2024 expected to be delivered during the remainder of 2024:

Unsatisfied performance obligations at March 31, 2024

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of June 30, 2024 and the percentage of the outstanding performance obligations as of June 30, 2024 expected to be delivered during the remainder of 2024:

Unsatisfied performance obligations at June 30, 2024

Amount Percent expected to be delivered in 2024

16 unchanged sentences

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 March 31, 2024, we had no material finance leases in which we were the lessee.

As of June 30, 2024, 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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Consolidated Statements of Operations

3 unchanged sentences

Right-of-use assets recognized in exchange for new lease liabilities $ 2.6 $ 6.4

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Consolidated Balance Sheets

10 unchanged sentences

Railcars in our Lease Fleet Operating and Administrative Total

Remaining nine months of 2024 $ 6.6 $ 9.1 $ 15.7

Remaining six months of 2024 $ 4.4 $ 6.1 $ 10.5

2025 8.3 11.0 19.3

11 unchanged sentences

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

As of March 31, 2024, non-lease fleet operating leases in which we are the lessor were not significant, and we had no direct finance leases.

As of June 30, 2024, non-lease fleet operating leases in which we are the lessor were not significant, and we had no direct finance leases.

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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in millions)

3 unchanged sentences

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

Remaining nine months of 2024 $ 530.2

Remaining six months of 2024 $ 362.9

Thereafter 345.9

2 unchanged sentences

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

Remaining nine months of 2024 $ 0.8

Remaining six months of 2024 $ 0.6

Thereafter 9.0

13 unchanged sentences

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

During the three months ended March 31, 2024, we recognized approximately $ 0.6 million of credit loss expense and wrote off $ 0.8 million related to our trade receivables that are in the scope of ASC 326, Financial Instruments – Credit Losses, bringing the allowance for credit losses balance from $ 12.8 million at December 31, 2023 to $ 12.6 million at March 31, 2024.

During the six months ended June 30, 2024, we recognized approximately $ 2.3 million of credit loss expense and wrote off $ 1.0 million related to our trade receivables that are in the scope of ASC 326, Financial Instruments – Credit Losses, bringing the allowance for credit losses balance from $ 12.8 million at December 31, 2023 to $ 14.1 million at June 30, 2024.

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

6 unchanged sentences

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 totaled $ 23.9 million and $ 18.3 million as of March 31, 2024 and December 31, 2023, respectively, and are included in accounts payable in our Consolidated Balance Sheets.

Amounts due to our participating suppliers in the SCF program totaled $ 18.6 million and $ 18.3 million as of June 30, 2024 and December 31, 2023, respectively, and 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.

Goodwill by segment is as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Railcar Leasing and Services Group $ 50.6 $ 50.6

6 unchanged sentences

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

The changes in the accruals for warranties for the three months ended March 31, 2024 and 2023 are as follows:

The changes in the accruals for warranties for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in millions)

24 unchanged sentences

The total additional consideration, which is included in other liabilities in our Consolidated Balance Sheets, had an estimated fair value of $ 20.0 million as of December 31, 2023 and is remeasured at each reporting period using Level 3 inputs.

During the three months ended March 31, 2024, the first installment of the additional consideration, totaling $ 10.0 million, was paid.

During the six months ended June 30, 2024, the first installment of the additional consideration, totaling $ 10.0 million, was paid.

This payment is reflected in our Consolidated Statements of Cash Flows, of which $ 8.0 million related to the initial estimated fair value is included in financing activities, and $ 2.0 million related to the remeasurement of the initial estimated fair value is included in operating activities.

As of March 31, 2024, the estimated fair value of the remaining additional consideration was $ 10.0 million.

As of June 30, 2024, the estimated fair value of the remaining additional consideration was $ 10.0 million.

Acquisition of RSI Logistics

10 unchanged sentences

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

For the three months ended March 31, 2024 and 2023, we recorded expenses related to these obligations of $ 5.6 million ($ 4.3 million, net of income taxes) and $ 3.9 million ($ 3.1 million, net of income taxes), respectively, which are included in loss from discontinued operations, net of income taxes in our Consolidated Statements of Operations.

For the three and six months ended June 30, 2024, we recorded expenses related to these obligations of $ 2.2 million ($ 1.7 million, net of income taxes) and $ 7.8 million ($ 6.0 million, net of income taxes), respectively.

For the three and six months ended June 30, 2023, we recorded expenses related to these obligations of $ 3.0 million ($ 2.3 million, net of income taxes) and $ 6.9 million ($ 5.4 million, net of income taxes), respectively.

These expenses are included in loss from discontinued operations, net of income taxes in our Consolidated Statements of Operations.

See Note 14 for further information regarding obligations retained in connection with the THP sale.

11 unchanged sentences

Included in accompanying balance sheet

at March 31, 2024

at June 30, 2024

AOCI – loss/(income)

11 unchanged sentences

Three Months Ended

March 31, Expected effect during next twelve months

June 30, Six Months Ended

June 30, Expected effect during next twelve months

2024 2023 2024 2023

(in millions)

8 unchanged sentences

TRL-2023 term loan $ (1.1) $ (0.2) $ (2.1) $ (0.2) $ ( 2.9 )

(1) Based on the fair value of open hedges as of March 31, 2024.

(1) Based on the fair value of open hedges as of June 30, 2024.

Foreign Currency Hedges

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

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 March 31, 2024

sheet at June 30, 2024

Effect on cost of revenues –

2 unchanged sentences

loss/(income) Three Months Ended

March 31, Expected effect during next twelve months (1)

June 30, Six Months Ended

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

Instrument 2024 2023 2024 2023

1 unchanged sentence

Forward contracts $ 128.3 $ ( 4.5 ) $ 3.3 $ (3.1) $ (2.2) $ (4.6) $ (3.9) $ 3.0

Options $ 5.9 $ 0.5 $ ( 0.6 ) $ 0.3 $ — $ ( 0.6 )

(1) Based on the fair value of open hedges as of March 31, 2024.

$ — $ — $ 0.1 $ (0.1) $ — $ 0.2 $ — $ 0.1

(1) Based on the fair value of open hedges as of June 30, 2024.

(2) The foreign currency options matured in June 2024 .

Derivatives Not Designated as Hedging Instruments (1)

Asset/(Liability) at

March 31, 2024

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

June 30, 2024

Effect on other, net (income) expense –

increase/(decrease)

Amount Interest

Rate Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

($ in millions)

7 unchanged sentences

(1) Comprised of back-to-back interest rate caps entered into with the same counterparty in connection with our risk management objectives.

(2) The amount recorded to other, net (income) expense in our Consolidated Statements of Operations for the three months ended March 31, 2024 includes a fee of $ 3.1 million related to the execution of back-to-back interest rate caps associated with the new TILC warehouse loan facility.

(2) The amount recorded to other, net (income) expense in our Consolidated Statements of Operations for the six months ended June 30, 2024 includes a fee of $ 3.1 million related to the execution of back-to-back interest rate caps associated with the new TILC warehouse loan facility.

See Note 8 for further information.

8 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions)

8 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions)

9 unchanged sentences

Interest rate hedges $ — $ 2.5

Foreign currency foreign contracts 4.5 —

Derivatives not designated as hedging instruments:

4 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, 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.

As of June 30, 2024 and December 31, 2023, 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 fair value measurements involving Level 3 inputs resulting from acquisition activity.

25 unchanged sentences

We operate principally in North America.

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

2 unchanged sentences

Total revenues $ 281.4 $ 634.2 $ ( 74.2 ) $ 841.4

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

2 unchanged sentences

Total revenues $ 268.3 $ 655.4 $ ( 201.3 ) $ 722.4

Six Months Ended June 30, 2024

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

External revenue $ 564.8 $ 1,086.2 $ — $ 1,651.0

Intersegment revenue 1.8 215.4 ( 217.2 ) —

Total revenues $ 566.6 $ 1,301.6 $ ( 217.2 ) $ 1,651.0

Six Months Ended June 30, 2023

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

External revenue $ 500.5 $ 863.6 $ — $ 1,364.1

Intersegment revenue 0.7 379.4 ( 380.1 ) —

Total revenues $ 501.2 $ 1,243.0 $ ( 380.1 ) $ 1,364.1

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

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in millions)

17 unchanged sentences

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

At March 31, 2024, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $ 124.2 million.

At June 30, 2024, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $ 123.9 million.

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

5 unchanged sentences

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

The noncontrolling interest included in the accompanying Consolidated Balance Sheets represents the non-Trinity equity interest in these partially-owned subsidiaries.

The noncontrolling interest included in the accompanying Consolidated Balance Sheets primarily represents the non-Trinity equity interest in these partially-owned subsidiaries.

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

10 unchanged sentences

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 March 31, 2024, the carrying value of our investment in Trinity Global Ventures totaled $ 2.5 million, which is eliminated in consolidation.

At June 30, 2024, the carrying value of our investment in Trinity Global Ventures totaled $ 2.6 million, which is eliminated in consolidation.

Investment in Unconsolidated Affiliate

In 2021, the Company and Wafra, Inc.

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

(“Wafra”), a global alternative investment manager, entered into a railcar investment vehicle 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 87.3 % by Wafra Funds and 12.7 % 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.

In May 2024, TILC and certain of its subsidiaries sold a portfolio comprised of 1,315 railcars and related leases to Signal Rail for an aggregate sales price of approximately $ 142.8 million.

During the three and six months ended June 30, 2024, TILC recognized a gain of approximately $ 18.8 million on the sale and approximately $ 1.4 million was recognized as revenue for services performed associated with the delivery of railcars with attached leases.

In connection with the sale, TILC contributed $ 2.0 million of cash to Signal Rail, resulting in a change to TILC's weighted average equity ownership in Signal Rail to 12.7 %.

Signal Rail financed the May 2024 purchase primarily through an asset-backed securitization.

To date, TILC has sold 7,775 railcars and related leases to Signal Rail for an aggregate sales price of $ 741.4 million.

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

3 unchanged sentences

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

At March 31, 2024, the carrying value of TILC’s equity investment in Signal Rail was $ 20.3 million, which is included in other assets in our Consolidated Balance Sheets.

At June 30, 2024, the carrying value of TILC’s equity investment in Signal Rail was $ 21.8 million, which is included in other assets in our Consolidated Balance Sheets.

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

4 unchanged sentences

Information related to the Leasing Group is as follows:

Three Months Ended March 31,

2024 2023 Percent

($ in millions) Change

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

2024 2023 Percent 2024 2023 Percent

($ in millions) Change ($ in millions) Change

Leasing and management $ 221.9 $ 203.8 8.9 % $ 430.9 $ 398.5 8.1 %

23 unchanged sentences

(1) Revenues related to services performed by the maintenance services business to support the railcars in our lease fleet are eliminated within the Railcar Leasing & Services Group and are excluded from the totals reported on this line.

(2) Includes depreciation and amortization expense, maintenance and compliance expense, and other fleet operating costs related to our lease fleet, as well as cost of revenues for our maintenance services and digital and logistics services businesses.

(2) Includes depreciation and amortization expense, maintenance and compliance expense, and other fleet operating costs related to our lease fleet, as well as operating costs for our maintenance services and digital and logistics services businesses.

(3) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements.

(4) Depreciation and amortization expense includes $ 4.7 million for the three months ended March 31, 2023 related to the disposal of certain railcar components associated with our sustainable railcar conversion program.

(4) Depreciation and amortization expense includes $ 0.8 million and $ 5.5 million for the three and six months ended June 30, 2023, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program.

Additionally, amortization of deferred profit on railcars sold from the Rail Products Group to the Leasing Group is included in depreciation and amortization expense, resulting in the recognition of depreciation expense based on our original manufacturing cost of the railcars.

(5) Maintenance and compliance expense is reported at cost with respect to the work that is completed by our maintenance services business to support the railcars in our lease fleet.

(5) Maintenance and compliance expense is reported at cost with respect to the services performed by our maintenance services business to support the railcars in our lease fleet.

(6) Other fleet operating costs include freight, storage, rent, and ad valorem taxes.

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

($ in millions)

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

Remaining nine months of 2024 2025 2026 2027 2028 Thereafter Total

Remaining six months of 2024 2025 2026 2027 2028 Thereafter Total

(in millions)

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Wholly-owned subsidiaries.

The Leasing Group’s debt at March 31, 2024 consisted primarily of non-recourse debt.

As of March 31, 2024, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 5,634.0 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries.

The net book value of unpledged equipment at March 31, 2024 was $ 368.6 million.

The Leasing Group’s debt at June 30, 2024 consisted primarily of non-recourse debt.

As of June 30, 2024, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 5,592.5 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries.

The net book value of unpledged equipment at June 30, 2024 was $ 291.7 million.

See Note 8 for more information regarding the Leasing Group’s debt.

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

As of March 31, 2024, TRIP Holdings held equipment with a net book value of $ 1,035.1 million, which is pledged solely as collateral for the TRIP Holdings' debt held by its subsidiaries.

As of March 31, 2024, TRP-2021 equipment with a net book value of $ 422.9 million is pledged solely as collateral for the TRP-2021 debt.

As of June 30, 2024, TRIP Holdings held equipment with a net book value of $ 1,026.2 million, which is pledged solely as collateral for the TRIP Holdings' debt held by its subsidiaries.

As of June 30, 2024, TRP-2021 equipment with a net book value of $ 420.6 million is pledged solely as collateral for the TRP-2021 debt.

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

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

Remaining nine months of 2024 2025 2026 2027 2028 Thereafter Total

Remaining six months of 2024 2025 2026 2027 2028 Thereafter Total

(in millions)

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions)

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The carrying amounts of our debt are as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions)

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

Senior notes due 2028 400.0 400.0

Senior notes due 2028, inclusive of unamortized premium of $ 4.9 and $ —

unamortized debt issuance costs ( 7.4 ) ( 5.3 )

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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 March 31, 2024, we evaluated the fair value of the other equipment financing liability using Level 3 inputs and determined that the carrying value approximates fair value.

As of June 30, 2024, we evaluated the fair value of the other equipment financing liability using Level 3 inputs and determined that the carrying value approximates fair value.

The estimated fair values of our debt are as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions)

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Revolving Credit Facility – We have a $ 600.0 million unsecured corporate revolving credit facility.

During the three months ended March 31, 2024, we had total borrowings of $ 130.0 million and total repayments of $ 130.0 million under the revolving credit facility.

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 18.2 million, leaving $ 581.8 million available for borrowing as of March 31, 2024.

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

During the six months ended June 30, 2024, we had total borrowings of $ 190.0 million and total repayments of $ 190.0 million under the revolving credit facility.

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 5.2 million, leaving $ 594.8 million available for borrowing as of June 30, 2024.

The majority of our outstanding letters of credit as of June 30, 2024 are scheduled to expire in November 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 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 7.16 % as of March 31, 2024.

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 March 31, 2024).

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 June 30, 2024).

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 March 31, 2024, we were in compliance with all such financial covenants.

As of June 30, 2024, we were in compliance with all such financial covenants.

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

In June 2024, we issued an additional $ 200.0 million aggregate principal amount of 7.75 % senior notes due July 2028 (the "Additional Senior Notes"), which increased the aggregate principal amount from $ 400.0 million to $ 600.0 million.

The Additional Senior Notes were issued at a price of 102.5% of the principal amount.

Proceeds received from the issuance totaled approximately $ 209.0 million and included the premium described above and interest deemed to have accrued from January 15, 2024 through June 4, 2024.

The Additional Senior Notes have identical terms and conditions (other than the original issue date, issue price, the first interest payment date and the first date from which interest will accrue) as the original issuance.

Interest on the Additional Senior Notes is payable semiannually commencing July 15, 2024.

We incurred $ 3.0 million in debt issuance costs from the issuance of the Additional Senior Notes, which will be amortized to interest expense over the term of the Senior Notes due 2028.

Net proceeds received from the issuance, together with cash on hand, were used to repay $ 400.0 million of our Senior Notes due 2024, as described below, and to pay related fees, costs, premiums, and expenses in connection with the issuance.

Redemption of Senior Notes due 2024 – In June 2024, we redeemed in full $ 400.0 million aggregate principal amount of our 4.55 % senior notes due 2024.

Additionally, in connection with the redemption of the Senior Notes due 2024, during the three and six months ended June 30, 2024, we recognized a loss on extinguishment of debt of $ 0.1 million, which related to the write-off of unamortized discount and debt issuance costs.

These charges are reflected in the interest expense, net line of our Consolidated Statements of Operations for the three and six months ended June 30, 2024.

As a result of the redemption of the Senior Notes due 2024, we are no longer required to report supplemental guarantor financial information in this Quarterly Report on Form 10-Q.

TILC Warehouse Loan Facility – TILC has historically maintained a warehouse loan facility to finance railcars owned by TILC.

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This warehouse loan facility replaced the prior $ 1.0 billion warehouse loan facility.

We incurred $ 3.6 million in debt issuance costs, which are recorded in other assets in our Consolidated Balance Sheets as of March 31, 2024, and are being amortized to interest expense over the facility term.

During the three months ended March 31, 2024, we had total borrowings of $ 783.7 million and total repayments of $ 611.2 million under the current and prior TILC warehouse loan facilities.

The entire unused facility amount of $ 98.2 million was available as of March 31, 2024 based on the amount of warehouse-eligible, unpledged equipment.

Advances under the facility bear interest at one-month term SOFR plus a facility margin of 1.75 %, for an all-in interest rate of 7.12 % at March 31, 2024.

We incurred $ 3.6 million in debt issuance costs, which are recorded in other assets in our Consolidated Balance Sheets as of June 30, 2024, and are being amortized to interest expense over the facility term.

During the six months ended June 30, 2024, we had total borrowings of $ 905.6 million and total repayments of $ 946.7 million under the current and prior TILC warehouse loan facilities.

Of the remaining unused facility amount of $ 311.8 million, $ 133.3 million was available as of June 30, 2024 based on the amount of warehouse-eligible, unpledged equipment.

Advances under the facility bear interest at one-month term SOFR plus a facility margin of 1.75 %, for an all-in interest rate of 7.08 % at June 30, 2024.

TRL-2024 Secured Railcar Equipment Notes – In May 2024, Trinity Rail Leasing 2021 LLC, a Delaware limited liability company ("TRL-2021") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued an aggregate principal amount of $ 432.4 million of its Series 2024-1 Class A Green Secured Railcar Equipment Notes (the "TRL-2024 Notes").

The TRL-2024 Notes bear interest at a fixed rate of 5.78 %, are payable monthly, and have a stated final maturity date of May 19, 2054.

We incurred $ 4.2 million in debt issuance costs, which will be amortized to interest expense through the anticipated repayment date of the TRL-2024 Notes.

The TRL-2024 Notes are obligations of TRL-2021 and are non-recourse to Trinity.

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

Net proceeds received from the railcars acquired in connection with the issuance of the TRL-2024 Notes were used to repay approximately $ 218.9 million of borrowings under TILC's warehouse loan facility;

to redeem the outstanding debt of Trinity Rail Leasing VII LLC, as described below;

and for general corporate purposes.

Redemption of TRL-VII Secured Railcar Equipment Notes – In May 2024, with the net proceeds of the TRL-2024 Notes, we redeemed in full Trinity Rail Leasing VII LLC's Series 2009-1 Secured Railcar Equipment Notes (the "TRL VII Notes"), of which $ 94.1 million was outstanding at the redemption date.

The all-in interest rate for the TRL VII Notes was 6.66 % per annum.

In connection with the redemption of the TRL VII Notes, during the three and six months ended June 30, 2024, we recognized a loss on extinguishment of debt of $ 1.4 million, which included a $ 0.6 million early redemption premium and a write-off of $ 0.8 million in unamortized debt issuance costs.

These charges are reflected in the interest expense, net line of our Consolidated Statements of Operations for the three and six months ended June 30, 2024.

Each of our secured railcar equipment notes, including the TRL-2024 Notes, generally has an anticipated repayment date and a stated final maturity date.

While the stated final maturity date of these notes is in 2054, the cash flows from the encumbered assets of TRL-2021 will be applied, pursuant to the payment priorities of their respective indentures, so as to amortize their respective notes to achieve monthly targeted principal balances.

If the cash flow assumptions used in determining the targeted balances are met, it is anticipated that the notes will be repaid well in advance of their stated final maturity date.

There can be no assurance, however, that such cash flow assumptions will be realized.

If these notes are not repaid by the anticipated repayment date, the respective interest rate on these notes would increase from the fixed rate stated above.

Terms and conditions of our other debt, including recourse and non-recourse provisions and scheduled maturities, are described in Note 9 of our 2023 Annual Report on Form 10-K.

The effective tax rate from continuing operations for the three months ended March 31, 2024 was an expense of 25.8 %, which differs from the U.S.

statutory rate of 21.0 % primarily due to state income taxes and foreign income taxes, partially offset by the benefit of noncontrolling interest, for which we do not provide income taxes.

The effective tax rate from continuing operations for the three months ended March 31, 2023 was a benefit of 217.0 %, which differs from the U.S.

The effective tax rates from continuing operations for the three and six months ended June 30, 2024 were expenses of 22.7 % and 23.8 %, respectively, which differ from the U.S.

statutory rate of 21.0 % primarily due to state income taxes, foreign income taxes, and non-deductible executive compensation, partially offset by the benefit of noncontrolling interest, for which we do not provide income taxes, excess tax benefits associated with equity-based compensation, and changes in state tax laws enacted in the second quarter.

The effective tax rate from continuing operations for the three months ended June 30, 2023 was an expense of 23.9 %, which differs from the U.S.

statutory rate of 21.0 % primarily due to state income taxes, foreign income taxes, non-deductible executive compensation, excess tax benefits associated with equity-based compensation, and taxes not recorded on our non-controlling interests in partially-owned subsidiaries.

The effective tax rate from continuing operations for the six months ended June 30, 2023 was a benefit of 11.3 %, which differs from the U.S.

statutory rate of 21.0 % primarily due to the release of residual taxes out of AOCI;

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and foreign income taxes.

During the three months ended March 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 three months ended March 31, 2023.

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

Pursuant to the acquisition of a subsidiary during the three months ended March 31, 2023, we re-measured our existing deferred tax assets and liabilities, taking into account the expected change to state tax apportionment.

During the six months ended June 30, 2023, one of our partially-owned subsidiaries released residual tax effects that had previously been recorded in AOCI.

As a result, we recorded an $ 11.9 million income tax benefit in our Consolidated Statements of Operations during the six months ended June 30, 2023.

Pursuant to the acquisition of a subsidiary during the six months ended June 30, 2023, we re-measured our existing deferred tax assets and liabilities, taking into account the expected change to state tax apportionment.

This resulted in an increase to our net deferred tax liability of $ 3.2 million in the period, which was recorded through deferred income tax expense.

The tax provision for the three months ended March 31, 2023 also reflects a $ 4.0 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.

The total income tax receivable position as of March 31, 2024 was $ 4.9 million primarily for state tax overpayments.

Our income tax payable for federal, state, and foreign income taxes is $ 11.6 million as of March 31, 2024.

Deferred income taxes related to railcars in our lease fleet were $ 1.1 billion as of both March 31, 2024 and December 31, 2023.

The tax provision for the six months ended June 30, 2023 also reflects a $ 4.0 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.

The total income tax receivable position as of June 30, 2024 was $ 4.6 million primarily for state tax overpayments.

Our income tax payable for federal, state, and foreign income taxes is $ 7.6 million as of June 30, 2024.

Deferred income taxes related to railcars in our lease fleet were $ 1.1 billion as of both June 30, 2024 and December 31, 2023.

Our federal tax return years through 2020 are closed under statute and the years 2021-2023 remain open.

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.

We have state tax returns that are under audit in the normal course of business, and the statutes of limitations for our Mexican subsidiaries' tax returns remain open for audit for 2018 and forward.

We believe we are appropriately reserved for any potential matters.

Beginning in 2024, certain jurisdictions have enacted a 15% minimum tax on all companies that operate in their jurisdiction, consistent with one or more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules ("Pillar Two").

Because the Pillar Two legislation has not been enacted in jurisdictions in which we operate, there is no impact to our effective tax rate;

however, we will continue to monitor our potential exposure to Pillar Two in the jurisdictions in which we operate.

During the three months ended June 30, 2024, Canada enacted a 15% minimum tax on all companies that operate in its jurisdiction, consistent with one or more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules ("Pillar Two").

We do not expect that Canada’s enactment of Pillar Two will have a material impact to our income tax expense.

Pillar Two legislation has not been enacted in the other jurisdictions in which we operate, and we will continue to monitor our potential exposure as more jurisdictions adopt these provisions.

Employee Retirement Plans

Amounts related to our employee retirement plans are as follows:

Three Months Ended

Three Months Ended June 30, Six Months Ended

2024 2023 2024 2023

(in millions)

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Accumulated Other Comprehensive Income

Changes in AOCI for the three months ended March 31, 2024 are as follows:

Changes in AOCI for the six months ended June 30, 2024 are as follows:

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

6 unchanged sentences

noncontrolling interest ( 0.2 ) — ( 0.2 )

Other comprehensive income 7.4 — 7.4

Balances at March 31, 2024

Other comprehensive loss ( 3.6 ) — ( 3.6 )

Balances at June 30, 2024

$ 8.8 $ ( 1.4 ) $ 7.4

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

There were no shares repurchased during the three months ended March 31, 2024 and 2023.

During the three and six months ended June 30, 2024, share repurchases totaled 33,900 shares, at a cost of approximately $ 0.9 million, resulting in a remaining authorization to repurchase up to $ 249.1 million of its common stock under the share repurchase program as of June 30, 2024.

There were no shares repurchased during the three and six months ended June 30, 2023.

Stock-Based Compensation

Stock-based compensation expense totaled approximately $ 4.7 million and $ 6.2 million for the three months ended March 31, 2024 and 2023, respectively.

Stock-based compensation expense totaled approximately $ 5.9 million and $ 10.6 million for the three and six months ended June 30, 2024, respectively.

Stock-based compensation expense totaled approximately $ 6.5 million and $ 12.7 million for the three and six months ended June 30, 2023, respectively.

The Company's annual grants of share-based awards generally occur in the first and second quarters under our Fifth Amended and Restated Stock Option and Incentive Plan (the "Plan”).

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

The following table summarizes stock-based compensation awards granted during the three months ended March 31, 2024:

The following table summarizes stock-based compensation awards granted during the six months ended June 30, 2024:

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

Restricted stock units 430,185 $ 30.54

Restricted stock awards 15,903 $ 30.75

Performance units 241,212 $ 29.56

The fair value of RSUs granted is based on the Company's closing stock price on the date of grant.

The fair value of the performance units for relative total shareholder return granted during the three months ended March 31, 2024 was estimated at the date of grant using a Monte Carlo simulation with assumptions that reflect market conditions at the date of grant, including stock price, risk-free interest rate, expected term, expected volatility, and dividend yield.

For the performance units granted during the six months ended June 30, 2024 for which the payout is based on relative total shareholder return, the fair value was estimated at the date of grant using a Monte Carlo simulation with assumptions that reflect market conditions at the date of grant, including stock price, risk-free interest rate, expected term, expected volatility, and dividend yield.

For the performance units granted during the six months ended June 30, 2024 for which the payout is based on return on equity, the fair value is based on the Company's closing stock price on the date of grant, adjusted to exclude the cumulative value of dividends over the three-year vesting period as these units do not earn dividend equivalents.

Earnings Per Common Share

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

Three Months Ended

Three Months Ended June 30, Six Months Ended

2024 2023 2024 2023

(in millions, except per share amounts)

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

56.1 19.3 84.1 26.8

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

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Net income attributable to Trinity Industries, Inc.

$ 54.4 $ 17.0 $ 78.1 $ 21.4

Basic weighted average shares outstanding 82.4 81.2 81.7 81.0

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Diluted weighted average shares outstanding

84.1 83.4 83.4 83.5

Basic earnings per common share:

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State actions

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

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

Trinity Industries, Inc.

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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.

On March 26, 2024, the trial court granted the Commonwealth of Virginia’s motion to suspend entry of a final order pending the trial court’s review of Mr.

Harman’s forthcoming motion for reconsideration of the order granting the Company’s motion for summary judgment.

On July 11, 2024, the trial court denied the Commonwealth of Virginia’s motion for reconsideration of the order granting the Company’s motion for summary judgment.

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 these matters are without merit and intends to vigorously defend against all allegations.

The Company believes that it has substantial defenses in these matters 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.

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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 ("Railcar Defendants").

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, and on September 26, 2023, TILC filed a motion to dismiss plaintiffs’ First Amended Complaint.

On March 13, 2024, the trial court granted in part and denied in part TILC’s motion to dismiss Norfolk Southern’s third-party complaint and TILC’s motion to dismiss plaintiffs’ First Amended Complaint.

On April 9, 2024, plaintiffs and Norfolk Southern announced a settlement in principal of plaintiffs’ claims against Norfolk Southern and the Railcar Defendants.

On April 9, 2024, plaintiffs and Norfolk Southern announced a settlement in principle of plaintiffs’ claims against Norfolk Southern and the Railcar Defendants.

Norfolk Southern preserved its third-party claims against the Railcar Defendants.

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 proposed settlement is subject to the court’s approval.

On May 22, 2024, the parties filed a joint motion to dismiss with prejudice Norfolk Southern’s third-party claims against TILC (the “Dismissal Motion”).

On June 3, 2024, the court entered an order granting the Dismissal Motion (the “Dismissal Order”).

The Dismissal Order dismisses, with prejudice, all of Norfolk Southern’s claims against TILC, including claims for negligence and contribution.

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

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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 $ 7.9 million to $ 19.4 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 March 31, 2024.

This range includes any amounts related to the Highway Products litigation matters described above in the section titled “Highway products litigation." At March 31, 2024, total accruals of $ 8.8 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

The range of reasonably possible losses for such matters is $ 7.5 million to $ 19.0 million.

This range includes any amounts related to the Highway Products litigation matters described above in the section titled “Highway products litigation." At June 30, 2024, total accruals of $ 8.5 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

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

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

Accordingly, at March 31, 2024, we recorded an insurance receivable of approximately $ 1.0 million for property damage recoveries that we have concluded are probable of collection.

As of March 31, 2024, we have received advanced payments from insurance of approximately $ 1.5 million for cleanup and damage remediation activities.

To date, we have received advanced payments from insurance of approximately $ 1.5 million for cleanup and damage remediation activities.

Additionally, at March 31, 2024, we recorded an insurance receivable of approximately $ 1.0 million for property damage recoveries that we have concluded are probable of collection, which remains outstanding at June 30, 2024.

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

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

What changed 10-Q

Item 1. Financial Statements