TRINITY INDUSTRIES INC 10-K

Item 8. Financial Statements and Supplementary Data. Trinity Industries, Inc. Index to Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 52 Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022 54 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023, and 2022 55 Consolidated Balance Sheets as of December 31, 2024 and 2023 56 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 57 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024, 2023, and 2022 58 Notes to Consolidated Financial Statements 59 51 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Trinity Industries, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Trinity Industries, Inc. and Subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows and stockholders' equity for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 52 Table of Contents Recognition of deferred tax assets and liabilities Description of the Matter As more fully described in Note 10 to the consolidated financial statements, at December 31, 2024, the Company had gross deferred tax assets related to deductible temporary differences of $209.3 million, offset by a valuation allowance of $20.8 million, and deferred tax liabilities of $1,263.2 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 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 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 We have served as the Company's auditor since 1958. Dallas, Texas February 20, 2025 53 Table of Contents Trinity Industries, Inc. and Subsidiaries Consolidated Statements of Operations Year Ended December 31, 2024 2023 2022 (in millions, except per share amounts) Revenues: Manufacturing $ 1,938.4 $ 1,943.9 $ 1,127.3 Leasing & Services 1,140.8 1,039.4 850.0 3,079.2 2,983.3 1,977.3 Operating costs: Cost of revenues: Manufacturing 1,748.2 1,827.5 1,083.3 Leasing & Services 662.8 628.7 526.3 2,411.0 2,456.2 1,609.6 Selling, engineering, and administrative expenses: Manufacturing 32.8 30.5 29.1 Leasing & Services 77.0 62.0 59.1 Corporate & other 125.9 109.4 97.2 235.7 201.9 185.4 Gains on dispositions of property: Lease portfolio sales 57.3 82.8 127.5 Other 6.0 6.8 25.2 63.3 89.6 152.7 Restructuring activities, net 4.3 ( 2.2 ) 1.0 Total operating profit 491.5 417.0 334.0 Other (income) expense: Interest expense, net 273.5 265.5 209.1 Other, net ( 3.8 ) 2.5 ( 1.6 ) 269.7 268.0 207.5 Income from continuing operations before income taxes 221.8 149.0 126.5 Provision (benefit) for income taxes: Current 72.5 50.5 12.9 Deferred ( 22.1 ) ( 41.5 ) 14.7 50.4 9.0 27.6 Income from continuing operations 171.4 140.0 98.9 Loss from discontinued operations, net of benefit for income taxes of $ 4.1 , $ 3.6 , and $ 1.1 ( 14.3 ) ( 13.4 ) ( 20.3 ) Loss on sale of discontinued operations, net of benefit for income taxes of $ — , $ — , and $ 1.4 — — ( 5.7 ) Net income 157.1 126.6 72.9 Net income attributable to noncontrolling interest 18.7 20.6 12.8 Net income attributable to Trinity Industries, Inc. $ 138.4 $ 106.0 $ 60.1 Basic earnings per common share: Income from continuing operations $ 1.86 $ 1.47 $ 1.05 Loss from discontinued operations ( 0.17 ) ( 0.16 ) ( 0.32 ) Basic net income attributable to Trinity Industries, Inc. $ 1.69 $ 1.31 $ 0.73 Diluted earnings per common share: Income from continuing operations $ 1.81 $ 1.43 $ 1.02 Loss from discontinued operations ( 0.17 ) ( 0.16 ) ( 0.31 ) Diluted net income attributable to Trinity Industries, Inc. $ 1.64 $ 1.27 $ 0.71 Weighted average number of shares outstanding: Basic 81.9 81.2 81.9 Diluted 84.2 83.4 84.2 See accompanying notes to Consolidated Financial Statements. 54 Table of Contents Trinity Industries, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Year Ended December 31, 2024 2023 2022 (in millions) Net income $ 157.1 $ 126.6 $ 72.9 Other comprehensive income (loss): Derivative financial instruments: Unrealized gains (losses) arising during the period, net of tax benefit (expense) of $ 1.1 , $( 3.3 ), and $( 9.2 ) ( 3.5 ) 10.6 29.3 Reclassification adjustments for (gains) losses included in net income, net of tax (expense) benefit of $( 3.7 ), $ 7.4 , and $ 0.8 ( 11.5 ) ( 26.1 ) 3.5 Defined benefit plans: Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $ — , $( 0.1 ), and $ 0.5 0.1 ( 0.3 ) 2.1 Amortization of net actuarial losses, net of tax benefit of $ — , $ — , and $ 0.1 0.1 0.1 0.2 Currency translation adjustments: Reclassification adjustments for losses included in discontinued operations, net of tax benefit of $ — , $ — , and $ — — — 1.3 ( 14.8 ) ( 15.7 ) 36.4 Comprehensive income 142.3 110.9 109.3 Less: comprehensive income attributable to noncontrolling interest 19.1 13.6 12.5 Comprehensive income attributable to Trinity Industries, Inc. $ 123.2 $ 97.3 $ 96.8 See accompanying notes to Consolidated Financial Statements. 55 Table of Contents Trinity Industries, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2024 December 31, 2023 (in millions) ASSETS Cash and cash equivalents $ 228.2 $ 105.7 Receivables, net of allowance of $ 17.1 and $ 15.9 379.1 363.5 Income tax receivable 2.4 5.2 Inventories: Raw materials and supplies 320.0 419.4 Work in process 101.5 142.4 Finished goods 54.7 122.5 476.2 684.3 Restricted cash, including partially-owned subsidiaries of $ 39.1 and $ 30.6 146.2 129.4 Property, plant, and equipment, at cost, including partially-owned subsidiaries of $ 1,920.5 and $ 1,922.5 9,751.1 9,539.6 Less accumulated depreciation, including partially-owned subsidiaries of $ 690.0 and $ 644.7 ( 2,763.0 ) ( 2,534.8 ) 6,988.1 7,004.8 Goodwill 221.5 221.5 Other assets 390.5 392.1 Total assets $ 8,832.2 $ 8,906.5 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 251.7 $ 305.3 Accrued liabilities 353.0 302.3 Debt: Recourse 597.8 794.6 Non-recourse: Wholly-owned subsidiaries 4,021.3 3,819.2 Partially-owned subsidiaries 1,071.8 1,140.4 5,690.9 5,754.2 Deferred income taxes 1,075.6 1,103.5 Other liabilities 153.8 165.7 Total liabilities 7,525.0 7,631.0 Commitments and contingencies (Note 15) Preferred stock – 1.5 shares authorized and unissued — — Common stock – shares authorized at December 31, 2024 and 2023 – 400.0 ; shares issued and outstanding at December 31, 2024 – 81.8 ; at December 31, 2023 – 81.8 0.8 0.8 Capital in excess of par value 8.8 15.4 Retained earnings 1,054.1 1,010.5 Accumulated other comprehensive income (loss) ( 4.2 ) 11.0 Treasury stock – shares at December 31, 2024 – 0.0 ; at December 31, 2023 – 0.0 ( 0.6 ) ( 0.6 ) 1,058.9 1,037.1 Noncontrolling interest 248.3 238.4 Total stockholders' equity 1,307.2 1,275.5 Total liabilities and stockholders' equity $ 8,832.2 $ 8,906.5 See accompanying notes to Consolidated Financial Statements. 56 Table of Contents Trinity Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows Year Ended December 31, 2024 2023 2022 (in millions) Operating activities: Net income $ 157.1 $ 126.6 $ 72.9 Loss from discontinued operations, net of income taxes 14.3 13.4 20.3 Loss on sale of discontinued operations, net of income taxes — — 5.7 Adjustments to reconcile net income to net cash provided by operating activities − continuing operations: Depreciation and amortization 293.8 293.2 276.4 Stock-based compensation expense 23.6 22.7 22.5 Provision (benefit) for deferred income taxes ( 22.1 ) ( 41.5 ) 14.7 Net gains on lease portfolio sales ( 57.3 ) ( 82.8 ) ( 126.2 ) Gains on dispositions of property and other assets ( 3.3 ) ( 0.5 ) ( 18.0 ) Gains on insurance recoveries from property damage ( 2.7 ) ( 6.3 ) ( 7.5 ) Non-cash impact of restructuring activities 4.3 ( 2.2 ) — Non-cash interest expense 13.4 12.7 13.2 Loss on extinguishment of debt 1.5 — 1.5 Other ( 2.6 ) ( 5.7 ) ( 5.3 ) Changes in operating assets and liabilities: (Increase) decrease in receivables ( 14.3 ) ( 22.0 ) ( 94.4 ) (Increase) decrease in inventories 208.1 ( 54.9 ) ( 193.4 ) (Increase) decrease in other assets 0.9 ( 0.6 ) ( 11.5 ) Increase (decrease) in accounts payable ( 53.6 ) 2.2 78.4 Increase (decrease) in accrued liabilities 22.2 53.2 ( 37.2 ) Increase (decrease) in other liabilities 4.8 1.5 ( 2.9 ) Net cash provided by operating activities – continuing operations 588.1 309.0 9.2 Net cash used in operating activities – discontinued operations ( 14.3 ) ( 13.4 ) ( 22.0 ) Net cash provided by (used in) operating activities 573.8 295.6 ( 12.8 ) Investing activities: Capital expenditures – lease fleet ( 541.9 ) ( 668.8 ) ( 928.8 ) Proceeds from lease portfolio sales 360.7 381.8 750.7 Capital expenditures – operating and administrative ( 53.8 ) ( 41.3 ) ( 38.0 ) Acquisitions, net of cash acquired — ( 62.2 ) ( 80.4 ) Proceeds from dispositions of property and other assets 20.6 19.9 44.0 Proceeds from insurance recoveries 3.7 5.1 10.0 Equity investments ( 3.9 ) ( 1.1 ) ( 15.5 ) Other — 3.6 — Net cash used in investing activities – continuing operations ( 214.6 ) ( 363.0 ) ( 258.0 ) Payments related to sale of discontinued operations — — ( 2.7 ) Net cash used in investing activities ( 214.6 ) ( 363.0 ) ( 260.7 ) Financing activities: Payments to retire debt ( 2,050.5 ) ( 1,518.9 ) ( 1,578.5 ) Proceeds from issuance of debt 1,970.4 1,652.7 2,000.6 Payments to settle contingent consideration liability ( 8.0 ) — — Dividends paid to common shareholders ( 93.2 ) ( 86.0 ) ( 76.9 ) Shares repurchased ( 20.7 ) — ( 51.8 ) Purchase of shares to satisfy employee tax on vested stock ( 9.0 ) ( 7.2 ) ( 5.7 ) Distributions to noncontrolling interest ( 8.9 ) ( 32.4 ) ( 22.3 ) Net cash provided by (used in) financing activities ( 219.9 ) 8.2 265.4 Net increase (decrease) in cash, cash equivalents, and restricted cash 139.3 ( 59.2 ) ( 8.1 ) Cash, cash equivalents, and restricted cash at beginning of period 235.1 294.3 302.4 Cash, cash equivalents, and restricted cash at end of period $ 374.4 $ 235.1 $ 294.3 Supplemental disclosure of cash flow information: Interest paid $ 271.4 $ 246.2 $ 190.5 Income tax payments, net of refunds $ 54.6 $ 42.4 $ 19.3 See accompanying notes to Consolidated Financial Statements. 57 Table of Contents Trinity Industries, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Trinity Stockholders’ Equity Noncontrolling Interest Total Stockholders’ Equity Shares $ 0.01 Par Value Shares Amount (in millions, except par value and per common share amounts) Balances at December 31, 2021 83.3 $ 0.8 $ — $ 1,046.6 $ ( 17.0 ) — $ ( 0.6 ) $ 1,029.8 $ 267.0 $ 1,296.8 Net income — — — 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) — — — ( 78.9 ) — — — ( 78.9 ) — ( 78.9 ) Distributions to noncontrolling interest — — — — — — — — ( 22.3 ) ( 22.3 ) Stock-based compensation expense — — 22.5 — — — — 22.5 — 22.5 Settlement of share-based awards, net 0.9 — 1.1 — — ( 0.3 ) ( 7.1 ) ( 6.0 ) — ( 6.0 ) Shares repurchased — — — — — ( 2.0 ) ( 51.8 ) ( 51.8 ) — ( 51.8 ) Accelerated share repurchase agreement — — 25.0 — — ( 0.8 ) ( 25.0 ) — — — Retirement of treasury stock ( 3.1 ) — ( 48.6 ) ( 35.2 ) — 3.1 83.8 — — — 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 loss — — — — ( 8.7 ) — — ( 8.7 ) ( 7.0 ) ( 15.7 ) Cash dividends declared on common stock (1) — — — ( 88.1 ) — — — ( 88.1 ) — ( 88.1 ) Distributions to noncontrolling interest — — — — — — — — ( 32.4 ) ( 32.4 ) Stock-based compensation expense — — 22.7 — — — — 22.7 — 22.7 Settlement of share-based awards, net 1.0 — 0.7 — — ( 0.3 ) ( 7.9 ) ( 7.2 ) — ( 7.2 ) 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 Net income — — — 138.4 — — — 138.4 18.7 157.1 Other comprehensive income (loss) — — — — ( 15.2 ) — — ( 15.2 ) 0.4 ( 14.8 ) Cash dividends declared on common stock (1) — — — ( 94.8 ) — — — ( 94.8 ) — ( 94.8 ) Distributions to noncontrolling interest — — — — — — — — ( 9.2 ) ( 9.2 ) Stock-based compensation expense — — 23.6 — — — — 23.6 — 23.6 Settlement of share-based awards, net 0.9 — 1.3 — — ( 0.3 ) ( 10.5 ) ( 9.2 ) — ( 9.2 ) Shares repurchased — — — — — ( 0.6 ) ( 21.0 ) ( 21.0 ) — ( 21.0 ) Retirement of treasury stock ( 0.9 ) — ( 31.5 ) — — 0.9 31.5 — — — Balances at December 31, 2024 81.8 $ 0.8 $ 8.8 $ 1,054.1 $ ( 4.2 ) — $ ( 0.6 ) $ 1,058.9 $ 248.3 $ 1,307.2 (1) Dividends of $ 1.14 , $ 1.06 , and $ 0.95 per common share for the years ended December 31, 2024, 2023, and 2022, respectively. See accompanying notes to Consolidated Financial Statements. 58 Table of Contents Trinity Industries, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies Principles of Consolidation The financial statements of Trinity Industries, Inc. 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. Certain prior year balances have been reclassified to conform to the 2024 presentation. Our Reportable Segments 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 resulted in a change to our reportable segments beginning in 2024. In connection with this organizational update, we aligned the maintenance services business, which was previously reported in the Rail Products Group, to now be presented within our leasing business. This change aligns with the way in which our Chief Operating Decision Maker ("CODM") assesses performance and allocates resources. Consequently, beginning January 1, 2024, we report our operating results in two reportable segments: (1) the Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) the Rail Products Group. These changes had no impact to our previously reported consolidated results of operations, financial position, or cash flows. All prior period segment results set forth herein have been recast to reflect these changes and present results on a comparable basis. Revenue Recognition Revenue associated with our railcar lease contracts is recognized in accordance with Accounting Standards Codification ("ASC") 842, Leases . Revenue associated with our railcar manufacturing, maintenance services, digital and logistics services businesses, and certain servicing, maintenance, and management agreements is recognized in accordance with 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. 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. See Note 4 for a further discussion regarding our reportable segments. Railcar Leasing and Services Group In our Railcar Leasing and Services Group ("Leasing Group"), revenue from rentals and operating leases, including contracts that contain non-level fixed lease payments, is recognized monthly on a straight-line basis. Leases not classified as operating leases are generally considered sales-type leases as a result of an option to purchase. We review our operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the lessee’s payment history, the financial condition of the lessee, and business and economic conditions in the industry in which the lessee operates. In the event that the collectibility of a receivable with respect to any lessee is no longer probable, we derecognize the revenue and related receivable and recognize future revenue only when the lessee makes a rental payment. Contingent rents are recognized when the contingency is resolved. Selling profit or loss associated with sales-type leases is recognized upon lease commencement, and a net investment in the sales-type lease is recorded in the Consolidated Balance Sheets. 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, 2024 and 2023. 59 Table of Contents 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. Our maintenance services business is primarily dedicated to servicing our lease fleet. Revenues related to maintenance services performed on Company-owned railcars under full-service lease agreements are eliminated within the Railcar Leasing and Services Group. Services that are not included in the full-service lease agreement, such as repairs of railcar damage or other customer-specific requirements, as well as maintenance and repair activities on railcars owned by third parties, including our investor-owned fleet, are reflected in the Leasing Group's revenues and are not eliminated in consolidation. Within maintenance services, 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 $ 9.6 million and $ 8.8 million as of December 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. These contract assets are included within the Receivables, net of allowance line in our Consolidated Balance Sheets. 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 Our railcar manufacturing business recognizes revenue related to new railcars at a point in time when the customer has submitted its certificate of acceptance and legal title of the railcar has passed to the customer. Certain contracts for the sales of railcars include price adjustments based on changes to input costs; this amount represents variable consideration for which we are generally unable to estimate the final consideration until the railcar is delivered. Revenue related to sustainable railcar conversions 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. Revenue related to certain support services is recognized over time based on our stand-ready obligation to provide such services. We recorded contract assets of $ 3.4 million and $ 12.6 million as of December 31, 2024 and 2023, respectively. 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. 60 Table of Contents 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 December 31, 2024 and the percentage of the outstanding performance obligations as of December 31, 2024 expected to be delivered during 2025: Unsatisfied performance obligations at December 31, 2024 Total Amount Percent expected to be delivered in 2025 (in millions) Rail Products Group: New railcars: External customers $ 1,895.2 Leasing Group 250.3 $ 2,145.5 47.5 % Sustainable railcar conversions $ 3.1 100.0 % Railcar Leasing and Services Group: Leasing and management $ 57.3 33.5 % Maintenance services $ 4.8 100.0 % The remainder of the unsatisfied performance obligations for the Rail Products Group is expected to be delivered through 2028. The orders in the Rail Products Group's backlog from the Leasing Group are fully supported by lease commitments with external customers. The final amount of backlog attributable to the Leasing Group may vary by the time of delivery as customers may elect to change their procurement decision. Unsatisfied performance obligations for the Railcar Leasing and Services Group are related to servicing, maintenance, and management agreements and are expected to be performed through 2029. 61 Table of Contents Lease Accounting Lessee 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 twelve 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, 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. The following table summarizes the impact of our operating leases on our Consolidated Financial Statements (in millions, except lease term and discount rate): Year Ended December 31, 2024 2023 2022 Consolidated Statements of Operations Operating lease expense $ 21.8 $ 19.5 $ 18.2 Short-term lease expense $ — $ — $ 0.4 Consolidated Statements of Cash Flows Cash flows from operating activities $ 21.8 $ 19.5 $ 18.2 Right-of-use assets recognized in exchange for new lease liabilities $ 14.7 $ 24.1 $ 28.8 December 31, 2024 December 31, 2023 Consolidated Balance Sheets Right-of-use assets (1) $ 97.0 $ 100.6 Lease liabilities (2) $ 113.4 $ 118.2 Weighted average remaining lease term 8.4 years 9.3 years Weighted average discount rate (3) 3.9 % 3.6 % (1) Included in other assets in our Consolidated Balance Sheets. (2) Included in other liabilities in our Consolidated Balance Sheets. (3) As the rate implicit in our leases is not readily determinable, we use the incremental borrowing rate at lease commencement of our Trinity Industries Leasing Company ("TILC") warehouse loan facility for railcar leases or our revolving credit facility for operating and administrative leases to determine the present value of lease payments. Future contractual minimum operating lease liabilities will mature as follows (in millions): Railcars in our Lease Fleet Operating and Administrative Total 2025 $ 8.6 $ 12.4 $ 21.0 2026 8.2 11.4 19.6 2027 7.5 10.7 18.2 2028 5.0 8.9 13.9 2029 1.7 7.7 9.4 Thereafter 5.1 45.0 50.1 Total operating lease payments $ 36.1 $ 96.1 $ 132.2 Less: Present value adjustment ( 18.8 ) Total operating lease liabilities $ 113.4 62 Table of Contents Lessor Our Leasing Group enters into railcar operating leases with third parties with terms generally ranging between one year and ten years . The majority of our fleet operates on leases that earn fixed monthly lease payments. Generally, lease payments are due at the beginning of the applicable month. A portion of our fleet operates on per diem leases that earn usage-based variable lease payments. Some of our leases include options to extend the leases for up to five years , and a small percentage of our leases include early termination options with certain notice requirements and early termination penalties. As of December 31, 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. Additionally, our lease agreements contain normal wear and tear return condition provisions and high mileage thresholds designed to protect the value of our residual assets. 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: Year Ended December 31, 2024 2023 2022 (in millions) Operating lease revenues $ 786.3 $ 731.5 $ 679.4 Variable operating lease revenues $ 65.0 $ 68.7 $ 60.3 Interest income on sales-type lease receivables $ 0.7 $ 0.7 $ 0.7 Profit recognized at sales-type lease commencement (1) $ — $ — $ 1.3 (1) Included in gains on dispositions of property – lease portfolio sales on our Consolidated Statements of Operations. Future contractual minimum revenues for operating leases will mature as follows (in millions) (1) : 2025 $ 715.0 2026 586.8 2027 453.9 2028 297.1 2029 178.4 Thereafter 340.4 Total $ 2,571.6 (1) Total contractual minimum rental revenues on operating leases relates to our wholly-owned and partially-owned subsidiaries and sub-lease rental revenues associated with the Leasing Group's operating lease obligations. Future contractual minimum lease receivables for sales-type leases will mature as follows (in millions): 2025 $ 1.1 2026 1.1 2027 1.1 2028 1.1 2029 1.1 Thereafter 7.9 Total 13.4 Less: Unearned interest income ( 3.7 ) Net investment in sales-type leases (1) $ 9.7 (1) Included in other assets in our Consolidated Balance Sheets. Income Taxes The liability method is used to account for income taxes. Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases and other attributes using currently enacted tax laws and tax rates. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. 63 Table of Contents We regularly evaluate the likelihood of realization of tax benefits derived from positions we have taken in various federal and state filings after consideration of all relevant facts, circumstances, and available information. For those tax positions that are deemed more likely than not to be sustained, we recognize the benefit we believe is cumulatively greater than 50% likely to be realized. To the extent that we were to prevail in matters for which accruals have been established or be required to pay amounts in excess of recorded reserves, the effective tax rate in a given financial statement period could be materially impacted. Financial Instruments We consider all highly liquid debt instruments to be either cash and cash equivalents if purchased with a maturity of three months or less, or short-term marketable securities if purchased with a maturity of more than three months and less than one year. 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, highly-rated money market funds, and highly-rated commercial paper. We limit the amount of credit exposure to any one commercial issuer. The carrying values of cash, receivables, and accounts payable are considered to be representative of their respective fair values. Concentrations of credit risk with respect to receivables are limited due to control procedures that monitor the credit worthiness of customers, the large number of customers in our customer base, and their dispersion across different end markets and geographic areas. Receivables are generally evaluated at a portfolio level based on these characteristics. As receivables are generally unsecured, we maintain an allowance for credit losses using a forward-looking approach based on historical losses and consideration of current and expected future economic conditions. 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 the allowance for credit losses. During the year ended December 31, 2024, we recognized approximately $ 4.3 million of credit loss expense and wrote off $ 2.8 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 $ 12.8 million at December 31, 2023 to $ 14.3 million at December 31, 2024. This balance excludes the general reserve for operating lease receivables that is permitted under ASC 450, Contingencies . Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined principally on the first in first out method. Work in process and finished goods include material, labor, and overhead. Property, Plant, and Equipment Property, plant, and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. The costs of ordinary maintenance and repair are charged to operating costs. The estimated useful lives are as follows: Buildings and improvements 5 – 30 years Leasehold improvements Generally over the term of the lease Machinery and equipment Generally 3 – 15 years Information systems hardware and software 3 – 5 years Railcars in our lease fleet Generally 35 – 40 years Impairment of Long-lived Assets We periodically evaluate the carrying value of long-lived assets for potential impairment. The carrying value of long-lived assets is considered impaired when their carrying value is not recoverable through undiscounted future cash flows and the fair value of the assets is less than their carrying value. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved or market quotes as available. 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. We did not identify any indicators of impairment during the years ended December 31, 2024, 2023, or 2022. 64 Table of Contents Goodwill and Intangible Assets 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. Indefinite-lived intangible assets are not subject to amortization but are required to be evaluated for impairment at least annually. We have the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative 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 or an individual indefinite-lived intangible asset 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. 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 both December 31, 2024 and 2023, goodwill totaled $ 221.5 million. As of October 1, 2024 and 2023, 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 both December 31, 2024 and 2023, indefinite-lived intangible assets, which are comprised of trade names of recently acquired businesses , totaled $ 11.2 million. As of October 1, 2024 and 2023, 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 $ 87.8 million and $ 95.5 million as of December 31, 2024 and 2023, 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, 2024, 2023, or 2022. See Note 8 for further information regarding goodwill and intangible assets. Restricted Cash Restricted cash consists of cash and cash equivalents held as collateral for our non-recourse debt and lease obligations. As such, they are restricted in use. Investments in Affiliates We regularly assess 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, RIV 2013, and Trinity Global Ventures. At December 31, 2024, the carrying value of our investments in these entities totaled $ 133.0 million. See Note 5 for further information regarding investments in which we have a controlling interest. Insurance We are effectively self-insured for workers' compensation and employee health care claims. A third-party administrator is used to process claims. We accrue our workers' compensation and group medical liabilities based upon independent actuarial studies. 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, 2024 and 2023, our liabilities associated with workers' compensation were $ 30.6 million and $ 35.0 million, respectively, and our liabilities associated with group medical insurance were $ 3.8 million and $ 4.5 million, respectively. These amounts are included in the accrued liabilities line of our Consolidated Balance Sheets. 65 Table of Contents Supply Chain Finance Program 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, 2024: Year Ended December 31, 2024 (in millions) Confirmed obligations outstanding at December 31, 2023 $ 18.3 Invoices confirmed 75.8 Confirmed invoices paid ( 85.9 ) Confirmed obligations outstanding at December 31, 2024 $ 8.2 Warranties We provide various express, limited product warranties that generally range from one year to five years depending on the product. The warranty costs are estimated using a two-step approach. First, an engineering estimate is made for the cost of all claims that have been asserted by customers. Second, based on historical claims experience, a cost is accrued for all products still within a warranty period for which no claims have been filed. 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. As of December 31, 2024 and 2023, our accruals for warranties totaled $ 2.9 million and $ 3.3 million, respectively, and are included in accrued liabilities in our Consolidated Balance Sheets. Foreign Currency Transactions The functional currency of our Mexico and Canada operations is the United States dollar. Certain transactions in these countries occur in currencies other than the United States dollar. 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) Other comprehensive net income (loss) consists of foreign currency translation adjustments, unrealized gains and losses on our derivative financial instruments, and the net actuarial gains and losses of our defined benefit plans, the sum of which, together with net income (loss), constitutes comprehensive income (loss). See Note 12. All components are shown net of tax. 66 Table of Contents Recent Accounting Pronouncements Adopted in 2024 ASU 2023-07 – In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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 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. We adopted ASU 2023-07 on a retrospective basis. See Note 4 for our reportable segment disclosures, including significant segment expenses. Not Yet Adopted 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. We are currently evaluating the impact ASU 2023-09 will have on our income tax disclosures. ASU 2024-03 – In November 2024, the FASB issued ASU No. 2024-03, "Disaggregation of Income Statement Expenses," which improves financial reporting and responds to investor input by requiring public companies to disclose additional information about certain expenses in the notes to the consolidated financial statements. ASU 2024-03 requires disclosures, on an annual and interim basis, of the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense category; a qualitative description of amounts remaining that are not separately disaggregated quantitatively; and the amount of selling expenses and, in annual reporting periods, the definition of selling expenses. ASU 2024-03 is effective for public companies during annual reporting periods beginning after December 15, 2026 on a prospective basis, with an option for retrospective application. Early adoption is permitted. We are currently evaluating the impact ASU 2024-03 will have on our financial statement disclosures. Management's Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 67 Table of Contents Note 2. Acquisitions and Discontinued Operations Acquisitions Acquisition of Holden America In December 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 purchase agreement included minimum additional consideration of $ 10.0 million, which is payable in installments of $ 5.0 million per year in each of 2024 and 2025. 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 $ 20.0 million as of December 31, 2023 and is remeasured at each reporting period using Level 3 inputs. During the year ended December 31, 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 December 31, 2024, the fair value of the additional consideration was $ 10.0 million, which was funded in February 2025. Acquisition of RSI Logistics In March 2023, we acquired RSI Logistics, a data-centric provider of proprietary software and logistics and terminal management solutions to the North American rail industry. 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 purchase price allocation, we recorded identifiable intangible assets of $ 35.7 million, goodwill of $ 25.6 million, and certain other assets and liabilities. 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. See Note 8 for further information regarding goodwill and intangible assets. Discontinued Operations Sale of Highway Products Business In the fourth quarter of 2021, we completed the sale of Trinity Highway Products, LLC ("THP"). Upon completion of the sale, the accounting requirements for reporting THP as a discontinued operation were met. In connection with the sale, the Company agreed to indemnify Rush Hour Intermediate II, LLC ("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 include certain legal expenses that are directly attributable to the highway products business. Similar expenses related to these retained obligations that may be incurred in the future will likewise be reported in discontinued operations. For the years ended December 31, 2024, 2023, and 2022, we recorded expenses related to these obligations of $ 18.4 million ($ 14.3 million, net of income taxes), $ 17.0 million ($ 13.4 million, net of income taxes), and $ 21.4 million ($ 20.3 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 15 for further information regarding obligations retained in connection with the THP sale. 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. 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. 68 Table of Contents Note 3. Derivative Instruments and Fair Value Measurements Derivative Instruments We use derivative instruments to mitigate interest rate risk, including risks associated with the impact of changes in interest rates in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding. We also use derivative instruments to mitigate the impact of changes in foreign currency exchange rates. Derivative instruments that are designated and qualify as cash flow hedges are accounted for by recording the effective portion of the gain or loss on the derivative instrument in accumulated other comprehensive income or loss ("AOCI") as a separate component of stockholders' equity. These accumulated gains or losses are reclassified into earnings in the periods during which the hedged transactions affect earnings. Derivative instruments that are not designated as hedges are accounted for by recording the realized and unrealized gains or losses on the derivative instrument in other, net (income) expense in our Consolidated Statements of Operations. We continuously monitor our derivative positions and the credit ratings of our counterparties and do not anticipate losses due to non-performance. See Note 9 for a description of our debt instruments. Derivatives Designated as Hedging Instruments Interest Rate Hedges Included in accompanying balance sheet at December 31, 2024 AOCI – loss/(income) Notional Amount Interest Rate (1) Asset/(Liability) Controlling Interest Noncontrolling Interest ($ in millions) Expired hedges: 2018 secured railcar equipment notes $ 249.3 4.41 % $ — $ 0.1 $ — Tribute Rail secured railcar equipment notes $ 256.0 2.86 % $ — $ 0.1 $ 0.2 2017 promissory notes – interest rate cap $ 169.3 3.00 % $ — $ ( 0.1 ) $ — Open hedges: 2017 promissory notes – interest rate swap $ 381.4 2.31 % $ 6.1 $ ( 5.7 ) $ — TRL-2023 term loan $ 258.7 3.79 % $ 1.5 $ ( 1.5 ) $ — TILC (2) $ 130.0 3.00 % $ 2.8 $ ( 2.8 ) $ — (1) Weighted average fixed interest rate, except for the interest rate cap on the 2017 promissory notes. (2) In 2024, we entered into forward starting interest rate swaps to hedge a portion of the risk of potential interest rate increases in anticipation of a future debt issuance. Effect on interest expense – increase/(decrease) Year Ended December 31, Expected effect during next twelve months 2024 2023 2022 (in millions) Expired hedges: 2018 secured railcar equipment notes $ 0.2 $ 0.2 $ 0.2 $ 0.1 TRIP Holdings warehouse loan $ — $ 0.1 $ 1.2 $ — Tribute Rail secured railcar equipment notes $ 0.7 $ 0.7 $ 0.4 $ 0.3 2017 promissory notes – interest rate cap $ (0.1) $ (0.1) $ (0.1) $ ( 0.1 ) Open hedges (1) : 2017 promissory notes – interest rate swap $ (11.5) $ (11.7) $ 4.0 $ ( 11.5 ) TRL-2023 term loan $ (3.7) $ (2.2) $ — $ ( 0.8 ) TILC $ — $ — $ — $ ( 0.4 ) (1) Based on the fair value of open hedges as of December 31, 2024 . 69 Table of Contents Foreign Currency Hedges Our exposure related to foreign currency transactions is currently hedged for up to a maximum of twelve months. Information related to our foreign currency hedges is as follows: Included in accompanying balance sheet at December 31, 2024 Effect on cost of revenues – increase/(decrease) Notional Amount Asset/(Liability) AOCI – loss/(income) Year Ended December 31, Expected effect during next twelve months (1) Instrument 2024 2023 2022 (in millions) Forward contracts $ 131.1 $ ( 9.5 ) $ 13.0 $ (1.0) $ (7.1) $ (1.4) $ 12.2 Options $ 50.4 $ 0.4 $ 0.8 $ 0.2 $ 1.4 $ — $ ( 0.8 ) (1) Based on the fair value of open hedges as of December 31, 2024. Derivatives Not Designated as Hedging Instruments (1) Asset/(Liability) at December 31, 2024 Effect on other, net (income) expense – increase/(decrease) Notional Amount Interest Rate Year Ended December 31, 2024 2023 2022 ($ in millions) Interest rate derivatives – open: TILC warehouse facility – interest rate cap $ 680.0 2.50 % $ 23.3 $ (0.1) $ — $ — TILC – interest rate cap (2) $ 680.0 2.50 % $ ( 23.3 ) $ 3.2 $ — $ — Interest rate derivatives – expired (3) : TILC warehouse facility – interest rate cap $ 800.0 2.50 % $ — $ 1.9 $ (5.4) $ (1.6) TILC – interest rate cap $ 800.0 2.50 % $ — $ (1.9) $ 5.4 $ 1.6 (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 year ended December 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. See Note 9 for further information. (3) These interest rate caps matured and settled in 2024. 70 Table of Contents Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to establish a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are listed below. Level 1 – This level is defined as quoted prices in active markets for identical assets or liabilities. Our cash equivalents and restricted cash are instruments of the U.S. Treasury or highly-rated money market mutual funds. The assets measured on a recurring basis as Level 1 in the fair value hierarchy are summarized below: Level 1 December 31, 2024 December 31, 2023 (in millions) Assets: Cash equivalents $ 209.6 $ 78.7 Restricted cash 146.2 129.4 Total assets $ 355.8 $ 208.1 Level 2 – This level is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Interest rate hedges and interest rate derivatives are valued at exit prices obtained from each counterparty. Foreign currency hedges are valued at exit prices obtained from each counterparty, which are based on currency spot and forward rates and forward points. The assets and liabilities measured on a recurring basis as Level 2 in the fair value hierarchy are summarized below: Level 2 December 31, 2024 December 31, 2023 (in millions) Assets (1) : Derivatives designated as hedging instruments: Interest rate hedges $ 10.4 $ 13.1 Foreign currency hedges 0.4 6.8 Derivatives not designated as hedging instruments: Interest rate derivatives 23.3 6.6 Total assets $ 34.1 $ 26.5 Liabilities (2) : Derivatives designated as hedging instruments: Interest rate hedges $ — $ 2.5 Foreign currency hedges 9.5 — Derivatives not designated as hedging instruments: Interest rate derivatives 23.3 6.6 Total liabilities $ 32.8 $ 9.1 (1) Included in other assets in our Consolidated Balance Sheets. (2) Included in accrued liabilities in our Consolidated Balance Sheets. 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, 2024 and 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. See Note 9 for the estimated fair values of our debt instruments. The fair values of all other financial instruments are estimated to approximate carrying value. 71 Table of Contents Note 4. Segment Information We report our operating results in two reportable segments: (1) the Railcar Leasing and Services Group, which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services; railcar maintenance and modification services; and other railcar logistics products and services; and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components. 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 resulted in a change to our reportable segments beginning in 2024. In connection with this organizational update, we aligned the maintenance services business, which was previously reported in the Rail Products Group, to now be presented within our leasing business. This change aligns with the way in which our CODM assesses performance and allocates resources. Consequently, beginning January 1, 2024, we report our operating results in two reportable segments: (1) the Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) the Rail Products Group. These changes had no impact to our previously reported consolidated results of operations, financial position, or cash flows. All prior period segment results set forth herein have been recast to reflect these changes and present results on a comparable basis. Our CODM is our Chief Executive Officer. Operating profit is the primary measure our CODM uses to assess performance and allocate resources to each of our reportable segments. Gains and losses from the sale of property, plant, and equipment are included in the operating profit of each respective segment. 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. Sales between these groups are recorded at prices comparable to those charged to external customers, taking into consideration quantity, features, and production demand. Amortization of deferred profit on railcars sold to the Leasing Group is included in the operating profit of the Leasing Group, resulting in the recognition of depreciation expense based on our original manufacturing cost of the railcars. Lease portfolio sales are included in the Leasing Group, with related gains and losses computed based on the net book value of the original manufacturing cost of the railcars. The financial information for these segments is shown in the tables below (in millions). Year Ended December 31, 2024 Railcar Leasing and Services Group Rail Products Group Total External revenue $ 1,140.8 $ 1,938.4 $ 3,079.2 Intersegment revenue 2.4 492.7 495.1 Total revenues 1,143.2 2,431.1 3,574.3 Elimination of intersegment revenues ( 495.1 ) Total consolidated revenues $ 3,079.2 Less (1) : Rail Products Group cost of revenues (2) * 2,209.0 Depreciation and amortization for Company-owned railcars (3) 240.1 * Maintenance and compliance for Company-owned railcars (3)(4) 131.8 * Selling, engineering, and administrative expenses 77.0 32.8 Gains on lease portfolio sales ( 57.3 ) * Other segment items (5) 287.6 ( 0.1 ) Segment operating profit $ 464.0 $ 189.4 $ 653.4 72 Table of Contents Year Ended December 31, 2023 Railcar Leasing and Services Group Rail Products Group Total External revenue $ 1,039.4 $ 1,943.9 $ 2,983.3 Intersegment revenue 1.6 535.5 537.1 Total revenues 1,041.0 2,479.4 3,520.4 Elimination of intersegment revenues ( 537.1 ) Total consolidated revenues $ 2,983.3 Less (1) : Rail Products Group cost of revenues (2) * 2,336.0 Depreciation and amortization for Company-owned railcars (3) 238.5 * Maintenance and compliance for Company-owned railcars (3)(4) 130.5 * Selling, engineering, and administrative expenses 62.0 30.5 Gains on lease portfolio sales ( 82.8 ) * Other segment items (5) 255.3 0.3 Segment operating profit $ 437.5 $ 112.6 $ 550.1 Year Ended December 31, 2022 Railcar Leasing and Services Group Rail Products Group Total External revenue $ 850.0 $ 1,127.3 $ 1,977.3 Intersegment revenue 1.5 758.2 759.7 Total revenues 851.5 1,885.5 2,737.0 Elimination of intersegment revenues ( 759.7 ) Total consolidated revenues $ 1,977.3 Less (1) : Rail Products Group cost of revenues (2) * 1,789.9 Depreciation and amortization for Company-owned railcars (3) 234.4 * Maintenance and compliance for Company-owned railcars (3)(4) 112.1 * Selling, engineering, and administrative expenses 59.1 29.1 Gains on lease portfolio sales ( 127.5 ) * Other segment items (5) 171.6 0.9 Segment operating profit $ 401.8 $ 65.6 $ 467.4 * Not identified as a significant expense for this segment. (1) Significant expense categories and amounts align with the segment-level information that is regularly provided to and reviewed by the CODM. Intersegment expenses are included within the amounts shown. (2) Cost of revenues in the Rail Products Group primarily includes materials, labor, and overhead, including depreciation and amortization. (3) Company-owned railcars include wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. (4) 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. (5) Other segment items for each reportable segment include: – Railcar Leasing and Services Group: the remaining operating costs for our maintenance services and digital and logistics services businesses, including materials, labor, and overhead costs; other operating costs for the lease fleet, including equipment rental, property taxes, and freight and storage expenses; and gains or losses on dispositions of other property. – Rail Products Group: (gains) or losses on dispositions of other property. 73 Table of Contents The reconciliation of segment operating profit to consolidated net income is as follows: Year Ended December 31, 2024 2023 2022 (in millions) Operating profit: Railcar Leasing and Services Group $ 464.0 $ 437.5 $ 401.8 Rail Products Group 189.4 112.6 65.6 Segment Totals 653.4 550.1 467.4 Corporate and other ( 125.7 ) ( 108.3 ) ( 80.8 ) Restructuring activities, net ( 4.3 ) 2.2 ( 1.0 ) Eliminations ( 31.9 ) ( 27.0 ) ( 51.6 ) Consolidated operating profit 491.5 417.0 334.0 Other (income) expense 269.7 268.0 207.5 Provision (benefit) for income taxes 50.4 9.0 27.6 Loss from discontinued operations, net of income taxes ( 14.3 ) ( 13.4 ) ( 20.3 ) Loss on sale of discontinued operations, net of income taxes — — ( 5.7 ) Net income $ 157.1 $ 126.6 $ 72.9 Additional financial information by segment is shown in the tables below. Total Assets December 31, 2024 December 31, 2023 (in millions) Railcar Leasing and Services Group $ 8,151.7 $ 8,118.8 Rail Products Group 967.7 1,189.2 Segment Totals 9,119.4 9,308.0 Corporate and other 383.3 286.3 Eliminations ( 670.5 ) ( 687.8 ) Total assets $ 8,832.2 $ 8,906.5 Depreciation & Amortization Capital Expenditures Year Ended December 31, Year Ended December 31, 2024 2023 2022 2024 2023 2022 (in millions) Railcar Leasing and Services Group $ 262.2 $ 258.0 $ 249.3 $ 568.1 $ 688.0 $ 951.1 Rail Products Group 27.6 30.3 21.9 27.2 20.6 13.4 Corporate and other 4.0 4.9 5.2 0.4 1.5 2.3 Total $ 293.8 $ 293.2 $ 276.4 $ 595.7 $ 710.1 $ 966.8 Corporate and other assets are primarily composed of cash and cash equivalents, short-term marketable securities, certain property, plant, and equipment, and other assets. We operate principally in North America. Our foreign operations are primarily located in Mexico. Revenues and operating profit for our Mexico operations for the years ended December 31, 2024, 2023, and 2022 were not significant in relation to the Consolidated Financial Statements. Total assets for our Mexico operations as of December 31, 2024 and 2023 were $ 375.0 million and $ 590.0 million, respectively. Total long-lived assets for our Mexico operations as of December 31, 2024 and 2023 were $ 98.9 million and $ 96.1 million, respectively. One customer in the Rail Products Group comprised approximately 22 %, 13 %, and 17 % of our consolidated revenues during the years ended December 31, 2024, 2023, and 2022, respectively. 74 Table of Contents Note 5. 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. Each of TRIP Holdings and RIV 2013 are direct, partially-owned subsidiaries of TILC in which we have a controlling interest. Each is governed by a seven -member board of representatives, two of whom are designated by TILC. 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 December 31, 2024, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $ 130.4 million. Our ownership interests in TRIP Holdings and RIV 2013 are 42.6 % and 30.5 %, respectively, with the remaining interests owned by third-party, investor-owned funds. These investments in our partially-owned leasing subsidiaries are eliminated in consolidation. 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 LLC ("Tribute Rail"). RIV 2013 has a wholly owned-subsidiary known as TRP 2021 LLC ("TRP-2021"). TILC is the contractual servicer for Triumph Rail, Tribute Rail, and TRP-2021, with the authority to manage and service each entity's owned railcars. Our controlling interest in each of TRIP Holdings and RIV 2013 results from our combined role as both equity member and agent/servicer. The noncontrolling interest included in the accompanying Consolidated Balance Sheets 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. The assets of each of Triumph Rail, Tribute Rail, and TRP-2021 may only be used to satisfy the particular subsidiary's liabilities, and the creditors of each of Triumph Rail, Tribute Rail, and TRP-2021 have recourse only to the particular subsidiary's assets. Each of TILC and the third-party equity investors receive distributions from TRIP Holdings and RIV 2013, when available, in proportion to its respective equity interests, and has an interest in the net assets of the partially-owned subsidiaries upon a liquidation event in the same proportion. TILC is paid fees for the services it provides to Triumph Rail, Tribute Rail, and TRP-2021 and has the potential to earn certain incentive fees. There are no remaining equity commitments with respect to TRIP Holdings or RIV 2013. See Note 9 for additional information regarding the debt of TRIP Holdings and RIV 2013 and their respective subsidiaries. Other Investment in Consolidated Affiliate In 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, 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, 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 87.6 % by Wafra Funds and 12.4 % by TILC. 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 year ended December 31, 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. 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. 75 Table of Contents Upon consideration under the VIE model of ASC 810, Consolidation , Trinity has concluded that Signal Rail meets the definition of a VIE. TILC has variable interests in Signal Rail arising from its 12.4 % equity ownership position and its role as a service provider. We determined that Trinity is not the primary beneficiary and therefore does not consolidate this entity as we do not have the power to direct the activities of the entity that most significantly impact its economic performance. We will absorb portions of Signal Rail’s expected losses and/or receive portions of expected residual returns commensurate with our 12.4 % equity interest in Signal Rail. Our investment in Signal Rail is being accounted for under the equity method of accounting. At December 31, 2024, the carrying value of TILC’s equity investment in Signal Rail was $ 21.2 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. 76 Table of Contents Note 6. Railcar Leasing and Services Group The Railcar Leasing and Services Group owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services; railcar maintenance and modification services; and other railcar logistics products and services. Information related to the Leasing Group is as follows: Year Ended December 31, Percent Change 2024 2023 2022 2024 versus 2023 2023 versus 2022 ($ in millions) Revenues: Leasing and management $ 867.8 $ 813.8 $ 756.4 6.6 % 7.6 % Maintenance services (1) 234.0 170.1 80.9 37.6 % 110.3 % Digital and logistics services 41.4 57.1 14.2 ( 27.5 ) % 302.1 % Total revenues $ 1,143.2 $ 1,041.0 $ 851.5 9.8 % 22.3 % Cost of revenues (2) 665.2 630.3 527.9 5.5 % 19.4 % Selling, engineering, and administrative expenses 77.0 62.0 59.1 24.2 % 4.9 % Gains on dispositions of property: Lease portfolio sales (3) 57.3 82.8 127.5 * * Other 5.7 6.0 9.8 * * Total operating profit $ 464.0 $ 437.5 $ 401.8 6.1 % 8.9 % Total operating profit margin 40.6 % 42.0 % 47.2 % Total operating profit margin, excluding lease portfolio sales 35.6 % 34.1 % 32.2 % Selected expense information for Company-owned railcars (4) : Depreciation and amortization expense (5) $ 240.1 $ 238.5 $ 234.4 0.7 % 1.7 % Maintenance and compliance expense (6) $ 131.8 $ 130.5 $ 112.1 1.0 % 16.4 % Other fleet operating costs (7) $ 32.3 $ 31.5 $ 46.6 2.5 % ( 32.4 ) % Interest expense (8) $ 234.4 $ 227.2 $ 186.7 3.2 % 21.7 % * Not meaningful (1) Revenues related to services performed by the maintenance services business on Company-owned railcars under full-service lease agreements are eliminated within the Railcar Leasing and 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 operating costs for our maintenance services and digital and logistics services businesses. (3) Includes $ 1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022. (4) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. (5) Depreciation and amortization expense includes $ 5.6 million and $ 12.1 million for the years ended December 31, 2023 and 2022, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program. There were no disposals under this program during the year ended December 31, 2024. Additionally, depreciation and amortization expense includes deferred profit related to new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, resulting in the recognition of depreciation expense based on the original cost of the railcars and services. (6) 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. (7) Other fleet operating costs include freight, storage, rent, and ad valorem taxes. (8) Interest expense is not a component of operating profit and includes the effect of hedges. 77 Table of Contents Information related to lease portfolio sales is as follows: Year Ended December 31, 2024 2023 2022 ($ in millions) Lease portfolio sales $ 360.7 $ 381.8 $ 750.7 Operating profit on lease portfolio sales (1) $ 57.3 $ 82.8 $ 126.2 Operating profit margin on lease portfolio sales 15.9 % 21.7 % 16.8 % (1) Excludes $ 1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022. Railcar Leasing Equipment Portfolio. The Leasing Group's equipment consists primarily of railcars leased by third parties. The Leasing Group purchases equipment manufactured predominantly by the Rail Products Group and enters into lease contracts with third parties with terms generally ranging between one year and ten years . The Leasing Group primarily enters into full-service operating leases. Future contractual minimum rental revenues on operating leases related to our wholly-owned and partially-owned subsidiaries are as follows: 2025 2026 2027 2028 2029 Thereafter Total (in millions) Future contractual minimum rental revenues $ 702.6 $ 577.2 $ 450.4 $ 296.1 $ 177.9 $ 339.2 $ 2,543.4 Debt. Wholly-owned subsidiaries. The Leasing Group’s debt at December 31, 2024 consisted primarily of non-recourse debt. As of December 31, 2024, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 5,607.3 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries. The net book value of unpledged equipment at December 31, 2024 was $ 340.8 million. See Note 9 for more information regarding the Leasing Group's debt. Partially-owned subsidiaries. Debt owed by TRIP Holdings and RIV 2013 and their respective subsidiaries is non-recourse to Trinity and TILC. Creditors of each of TRIP Holdings and RIV 2013 and their respective subsidiaries have recourse only to the particular subsidiary's assets. As of December 31, 2024, TRIP Holdings held equipment with a net book value of $ 1,007.0 million, which is pledged solely as collateral for the TRIP Holdings' debt held by its subsidiaries. As of December 31, 2024, TRP-2021 equipment with a net book value of $ 409.0 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. Operating Lease Obligations. Future amounts due as well as future contractual minimum rental revenues related to the Leasing Group's railcar operating lease obligations are as follows: 2025 2026 2027 2028 2029 Thereafter Total (in millions) Future operating lease obligations $ 8.6 $ 8.2 $ 7.5 $ 5.0 $ 1.7 $ 5.1 $ 36.1 Future contractual minimum rental revenues $ 12.4 $ 9.6 $ 3.5 $ 1.0 $ 0.5 $ 1.2 $ 28.2 78 Table of Contents Note 7. Property, Plant, and Equipment The following table summarizes the components of property, plant, and equipment: December 31, 2024 December 31, 2023 (in millions) Railcars in our lease fleet: Wholly-owned subsidiaries: Equipment on lease $ 7,715.0 $ 7,536.7 Less: accumulated depreciation ( 1,766.9 ) ( 1,604.9 ) 5,948.1 5,931.8 Partially-owned subsidiaries: Equipment on lease 2,233.1 2,236.6 Less: accumulated depreciation ( 817.1 ) ( 763.4 ) 1,416.0 1,473.2 Deferred profit on railcar products sold (1) ( 1,069.8 ) ( 1,061.3 ) Less: accumulated amortization 337.3 311.1 ( 732.5 ) ( 750.2 ) Total railcars in our lease fleet 6,631.6 6,654.8 Operating and administrative assets: Land 16.3 16.1 Buildings and improvements 403.2 380.4 Machinery and other 441.8 419.8 Construction in progress 11.5 11.3 872.8 827.6 Less: accumulated depreciation ( 516.3 ) ( 477.6 ) Total operating and administrative assets 356.5 350.0 Total property, plant, and equipment, net $ 6,988.1 $ 7,004.8 (1) Includes deferred profit related to new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments. The deferred profit is subsequently eliminated in consolidation. We lease certain equipment and facilities under operating leases. See Note 1 for future operating lease obligations on operating and administrative leases. See Note 1 and Note 6 for information related to the lease agreements, future operating lease obligations, and future minimum rental revenues associated with our lease fleet. 79 Table of Contents Note 8. Goodwill and Intangible Assets Goodwill Goodwill by segment is as follows. There were no changes to our goodwill during the year ended December 31, 2024. December 31, 2024 December 31, 2023 Railcar Leasing and Services Group $ 50.6 $ 50.6 Rail Products Group 170.9 170.9 $ 221.5 $ 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, 2024 December 31, 2023 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 $ 11.2 $ — $ 11.2 Finite-lived intangible assets: Customer relationships & backlog 14.3 53.6 ( 9.3 ) 44.3 53.6 ( 5.8 ) 47.8 Patents, developed technology, and other 9.3 36.8 ( 13.6 ) 23.2 36.6 ( 9.4 ) 27.2 Lease-related intangibles 12.1 38.5 ( 18.2 ) 20.3 35.9 ( 15.4 ) 20.5 Total finite-lived intangible assets 128.9 ( 41.1 ) 87.8 126.1 ( 30.6 ) 95.5 Total intangible assets $ 140.1 $ ( 41.1 ) $ 99.0 $ 137.3 $ ( 30.6 ) $ 106.7 * Not subject to amortization During the years ended December 31, 2024, 2023, and 2022, amortization expense related to our finite-lived intangible assets totaled $ 10.1 million, $ 13.0 million, and $ 5.5 million, respectively, which is included in cost of revenues in our Consolidated Statements of Operations. As of December 31, 2024, expected amortization expense related to our finite-lived intangible assets for the next five years is as follows: Expected Amortization Expense (in millions) 2025 $ 9.1 2026 $ 9.1 2027 $ 8.7 2028 $ 6.6 2029 $ 6.2 80 Table of Contents Note 9. Debt The carrying amounts and estimated fair values of our debt are as follows: December 31, 2024 December 31, 2023 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in millions) Corporate – Recourse: Revolving credit facility $ — $ — $ — $ — Senior notes due 2024, net of unamortized discount of $ — and $ 0.1 — — 399.9 394.5 Senior notes due 2028, inclusive of unamortized premium of $ 4.3 and $ — 604.3 623.2 400.0 417.6 604.3 623.2 799.9 812.1 Less: unamortized debt issuance costs ( 6.5 ) ( 5.3 ) Total recourse debt 597.8 794.6 Lease fleet – Non-recourse: Wholly-owned subsidiaries: TILC warehouse facility 584.6 584.6 529.3 529.3 2009 secured railcar equipment notes — — 99.7 100.3 2010 secured railcar equipment notes 150.0 148.5 181.2 176.5 2017 promissory notes, net of unamortized discount of $ 1.5 and $ 3.5 631.3 631.3 673.7 673.7 2018 secured railcar equipment notes, net of unamortized discount of $ 0.1 and $ 0.1 359.1 344.9 378.0 355.2 2019 secured railcar equipment notes, net of unamortized discount of $ 0.1 and $ 0.1 711.3 694.7 748.5 709.4 2020 secured railcar equipments notes, net of unamortized discount of $ — and $ — 296.8 275.1 311.3 277.9 2021 secured railcar equipment notes, net of unamortized discount of $ 0.1 and $ — 706.4 682.5 295.3 256.9 2022 secured railcar equipment notes, net of unamortized discount of $ — and $ — 223.7 215.8 232.7 220.2 TRL-2023 term loan 323.4 323.4 334.5 334.5 Other equipment financing 50.0 50.0 52.3 52.3 4,036.6 3,950.8 3,836.5 3,686.2 Less: unamortized debt issuance costs ( 15.3 ) ( 17.3 ) 4,021.3 3,819.2 Partially-owned subsidiaries: TRP-2021 secured railcar equipment notes, net of unamortized discount of $ — and $ — 319.6 296.9 335.1 296.3 Triumph Rail secured railcar equipment notes, net of unamortized discount of $ 0.1 and $ 0.1 469.4 437.1 501.7 447.6 Tribute Rail secured railcar equipment notes, net of unamortized discount of $ — and $ — 287.8 285.0 311.0 300.1 1,076.8 1,019.0 1,147.8 1,044.0 Less: unamortized debt issuance costs ( 5.0 ) ( 7.4 ) 1,071.8 1,140.4 Total non–recourse debt 5,093.1 4,959.6 Total debt $ 5,690.9 $ 5,593.0 $ 5,754.2 $ 5,542.3 81 Table of Contents 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, 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, 2024 and 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. During the year ended December 31, 2024, we had total borrowings of $ 280.0 million and total repayments of $ 280.0 million under the revolving credit facility. Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 8.7 million, leaving $ 591.3 million available for borrowing as of December 31, 2024. Our outstanding letters of credit as of December 31, 2024 are scheduled to expire beginning in April 2025. 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 1.50 %, for an all-in interest rate of 6.13 % as of December 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 % ( 0.20 % as of December 31, 2024). 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; sell assets; 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, 2024, we were in compliance with all such financial covenants. Borrowings under the credit facility are guaranteed by certain of our 100%-owned subsidiaries. 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. 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. The Senior Notes due 2028 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 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. 82 Table of Contents Senior Notes Due 2024 – In September 2014, we issued $ 400.0 million aggregate principal amount of 4.55 % senior notes due October 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 year ended December 31, 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 year ended December 31, 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 Annual Report on Form 10-K. Wholly-owned leasing subsidiaries TILC Warehouse Loan Facility – TILC has historically maintained a warehouse loan facility to finance railcars owned by TILC. In March 2024, we entered into a new warehouse loan facility with a total commitment amount of $ 800.0 million, a revolving termination date of March 15, 2027, and a maturity date of March 15, 2028. This warehouse loan facility replaced the prior $ 1.0 billion warehouse loan facility. We incurred $ 3.9 million in debt issuance costs, which are recorded in other assets in our Consolidated Balance Sheets as of December 31, 2024, and are being amortized to interest expense over the facility term. During the year ended December 31, 2024, we had total borrowings of $ 1,064.6 million and total repayments of $ 1,009.3 million under the TILC warehouse loan facility. Of the remaining unused facility amount of $ 215.4 million, $ 167.9 million was available as of December 31, 2024 based on the amount of warehouse-eligible, unpledged equipment. The warehouse loan facility is a non-recourse obligation and is secured by a portfolio of railcars and operating leases, certain cash reserves, and other assets acquired and owned by the warehouse loan facility trust. The principal and interest of this indebtedness are paid from the cash flows of the underlying leases. Advances under the facility bear interest at one-month term SOFR plus a facility margin of 1.75 %, for an all-in interest rate of 6.30 % at December 31, 2024. TRL VII – In November 2009, Trinity Rail Leasing VII LLC, a Delaware limited liability company (“TRL VII”) and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $ 238.3 million in aggregate principal amount of Secured Railcar Equipment Notes, Series 2009-1 (the “TRL VII Notes”). In May 2024, with the net proceeds of the TRL-2024 Notes, as described below, we redeemed in full 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 year ended December 31, 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 year ended December 31, 2024. TRL-2010 – In October 2010, Trinity Rail Leasing 2010 LLC, a Delaware limited liability company ("TRL-2010") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $ 369.2 million in aggregate principal amount of Secured Railcar Equipment Notes, Series 2010-1 (the “TRL-2010 Notes"), of which $ 150.0 million was outstanding as of December 31, 2024. The TRL-2010 Notes bear interest at a fixed rate of 5.19 %, are payable monthly, and have a stated final maturity date of October 16, 2040. The TRL-2010 Notes are obligations of TRL-2010 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-2010. 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. In November 2018, the Original 2017 Promissory Notes were extended through November 8, 2025 at an increased aggregate amount of $ 663.0 million. In July 2020, TRL-2017 issued an additional $ 225.0 million of promissory notes pursuant to a provision contained in its existing Amended and Restated Loan Agreement dated November 8, 2018 (together with previously-issued promissory notes, the "2017 Promissory Notes"). As of December 31, 2024, $ 632.8 million of the 2017 Promissory Notes was outstanding. 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 6.01 % as of December 31, 2024, 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. 83 Table of Contents 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"). The TRL-2018 Secured Railcar Equipment Notes consisted of two classes of notes with (i) an aggregate principal amount of $ 200.0 million of TRL-2018's Series 2018-1 Class A-1 Secured Railcar Equipment Notes (the "TRL-2018 Class A-1 Notes"), and (ii) an aggregate principal amount of $ 282.5 million of TRL-2018's Series 2018-1 Class A-2 Secured Railcar Equipment Notes (the “TRL-2018 Class A-2 Notes”). In October 2020, TRL-2018 issued $ 155.5 million of Series 2020-1 Class A Secured Railcar Equipment Notes (the “2020-1 Notes”) (the TRL-2018 Class A-1 Notes, the TRL-2018 Class A-2 Notes, and the 2020-1 Notes are, collectively, the “TRL-2018 Notes”). In a separate transaction during October 2020, TRL-2018 redeemed its TRL-2018 Class A-1 Notes, of which $ 153.1 million was outstanding at the redemption date. The fixed interest rate for these notes was 3.82 % per annum. The TRL-2018 Class A-2 Notes, of which $ 282.5 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 4.62 %, are payable monthly, and have a stated final maturity date of June 17, 2048. The 2020-1 Notes, of which $ 76.7 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 1.96 %, are payable monthly, and have a stated final maturity date of October 17, 2050. The TRL-2018 Notes are obligations of TRL-2018 and are non-recourse to Trinity. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2018. TRL-2019 – In April 2019, Trinity Rail Leasing 2019 LLC, a Delaware limited liability company ("TRL-2019") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $ 528.3 million in Secured Railcar Equipment Notes (the "TRL-2019 Notes"). The TRL-2019 Notes, of which $ 403.5 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 3.82 %, are payable monthly, and have a stated final maturity date of April 17, 2049. The TRL-2019 Notes are obligations of TRL-2019 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-2019. In October 2019, TRL-2019 issued an additional $ 386.5 million in Secured Railcar Equipment Notes (the "TRL-2019-2 Notes"). The TRL-2019-2 Notes consisted of two classes of notes with (i) an aggregate principal amount of $ 106.9 million of TRL-2019's Series 2019-2 Class A-1 Secured Railcar Equipment Notes (the "TRL-2019 Class A-1 Notes"), and (ii) an aggregate principal amount of $ 279.6 million of TRL-2019's Series 2019-2 Class A-2 Secured Railcar Equipment Notes (the “TRL-2019 Class A-2 Notes”). The TRL-2019 Class A-1 Notes, of which $ 28.3 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 2.39 %, are payable monthly, and have a stated final maturity date of October 17, 2049. The TRL-2019 Class A-2 Notes, of which $ 279.6 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 3.10 %, are payable monthly, and have a stated final maturity date of October 17, 2049. The TRL-2019-2 Notes are obligations of TRL-2019 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-2019. TRL-2020 – In November 2020, Trinity Rail Leasing 2020 LLC, a Delaware limited liability company (“TRL-2020”) and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued an aggregate principal amount of (i) $ 110.0 million of TRL-2020’s Series 2020-2 Class A-1 Secured Railcar Equipment Notes (the “TRL-2020 Class A-1 Notes”), (ii) $ 240.3 million of TRL-2020’s Series 2020-2 Class A-2 Secured Railcar Equipment Notes (the “TRL-2020 Class A-2 Notes”), and (iii) $ 20.5 million of TRL-2020’s Series 2020-2 Class B Secured Railcar Equipment Notes (the “TRL-2020 Class B Notes”) (the TRL-2020 Class A-1 Notes, the TRL-2020 Class A-2 Notes, and the TRL-2020 Class B Notes are, collectively, the “TRL-2020 Notes”). The TRL-2020 Class A-1 Notes, of which $ 36.0 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 1.83 %. The TRL-2020 Class A-2 Notes, of which $ 240.3 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 2.56 %. The TRL-2020 Class B Notes, of which $ 20.5 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 3.69 %. The TRL-2020 Notes are payable monthly, and have a stated final maturity date of November 19, 2050. The TRL-2020 Notes are obligations of TRL-2020 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-2020. 84 Table of Contents TRL-2021 – In June 2021, Trinity Rail Leasing 2021 LLC, a Delaware limited liability company ("TRL-2021") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued an aggregate principal amount of (i) $ 305.2 million of its Series 2021-1 Class A Green Secured Railcar Equipment Notes (the "TRL-2021 Class A Notes") and (ii) $ 19.8 million of its Series 2021-1 Class B Green Secured Railcar Equipment Notes (the "TRL-2021 Class B Notes") (the TRL-2021 Class A Notes and the TRL-2021 Class B Notes are, collectively, the “TRL-2021 Notes”). The TRL-2021 Class A Notes, of which $ 262.2 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 2.26 %. The TRL-2021 Class B Notes, of which $ 19.8 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 3.08 %. The TRL-2021 Notes are payable monthly, and have a stated final maturity date of July 19, 2051. The TRL-2021 Notes are obligations of TRL-2021 and are non-recourse to Trinity. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL-2021. In May 2024, TRL-2021 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, of which $ 424.5 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 5.78 %. The TRL-2024 Notes are payable monthly and have a stated final maturity date of May 19, 2054. We incurred $ 4.4 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 TRL VII, as described above; and for general corporate purposes. TRL-2022 – In April 2022, Trinity Rail Leasing 2022 LLC, a Delaware limited liability company ("TRL-2022") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued an aggregate principal amount of $ 244.8 million of its Series 2022-1 Class A Green Secured Railcar Equipment Notes (the "TRL-2022 Notes"). The TRL-2022 Notes, of which $ 223.7 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 4.55 %, are payable monthly, and have a stated final maturity date of May 20, 2052. 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 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 6.36 % as of December 31, 2024. The TRL-2023 term loan has a stated maturity date of June 12, 2028. 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. 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, 2024, the carrying value of the financing liability was $ 50.0 million. Partially-owned leasing subsidiaries Triumph Rail – In June 2021, Triumph Rail issued an aggregate principal amount of (i) $ 535.0 million of its Series 2021-2 Class A Green Secured Railcar Equipment Notes (the “Triumph Class A Notes”) and (ii) $ 25.4 million of its Series 2021-2 Class B Green Secured Railcar Equipment Notes (the “Triumph Class B Notes”) (the Triumph Class A Notes and the Triumph Class B Notes are, collectively, the “Triumph Notes”). The Triumph Class A Notes, of which $ 444.1 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 2.15 %. The Triumph Class B Notes, of which $ 25.4 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 3.08 %. 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 other assets owned by Triumph Rail. 85 Table of Contents Tribute Rail – In May 2022, Tribute Rail issued an aggregate principal amount of (i) $ 290.0 million of its Series 2022-1 Class A Green Secured Railcar Equipment Notes (the “Class A Notes”) and (ii) $ 37.0 million of its Series 2022-1 Class B Green Secured Railcar Equipment Notes (the “Class B Notes”) (the Class A Notes and the Class B Notes are, collectively, the “Tribute Rail Notes”). The Class A Notes, of which $ 250.8 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 4.76 %. The Class B Notes, of which $ 37.0 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 5.75 %. The Tribute Rail Notes are payable monthly and have a stated final maturity date of May 17, 2052. 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. TRP-2021 – In June 2021, TRP-2021 issued an aggregate principal amount of (i) $ 334.0 million of its Series 2021-1 Class A Green Secured Railcar Equipment Notes (the “TRP-2021 Class A Notes”) and (ii) $ 21.0 million of its Series 2021-1 Class B Green Secured Railcar Equipment Notes (the “TRP-2021 Class B Notes”) (the TRP-2021 Class A Notes and the TRP-2021 Class B Notes are, collectively, the “TRP-2021 Notes”). The TRP-2021 Class A Notes, of which $ 298.6 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 2.07 %. The TRP-2021 Class B Notes, of which $ 21.0 million was outstanding as of December 31, 2024, bear interest at a fixed rate of 3.06 %. 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 other assets owned by TRP-2021. 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 interest expense, net line of our Consolidated Statements of Operations for the year ended December 31, 2022. Triumph Rail and Tribute Rail are wholly-owned subsidiaries of TRIP Holdings, and TRP-2021 is a wholly-owned subsidiary of RIV 2013. TRIP Holdings and RIV 2013 are partially-owned subsidiaries of the Company, through its wholly-owned subsidiary, TILC. Our ownership interests in TRIP Holdings and RIV 2013 are 42.6 % and 30.5 %, respectively. See Note 5 for further information. 86 Table of Contents Scheduled Repayments of Debt Each of our secured railcar equipment notes generally has an anticipated repayment date and a stated final maturity date. While the stated final maturity dates of each of these notes can be up to 30 years after the respective issuance dates, the cash flows from the encumbered assets of each of these notes 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; the repayments reflected in the table below are based on the earlier anticipated repayment dates rather than the stated final maturity dates. 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 rates on these notes would increase from the fixed rates stated above. The remaining principal payments under existing debt agreements as of December 31, 2024 based on the anticipated repayment dates are as follows: 2025 2026 2027 2028 2029 Thereafter Total (in millions) Recourse: Senior notes due 2028 — — — 600.0 — — 600.0 Non-recourse – lease fleet (Note 6): TILC warehouse facility 17.5 17.5 17.5 4.4 — — 56.9 Facility termination payments – TILC warehouse facility — — — 527.7 — — 527.7 2010 secured railcar equipment notes 20.4 25.5 28.2 23.9 21.4 30.6 150.0 2017 promissory notes 632.8 — — — — — 632.8 2018 secured railcar equipment notes 14.8 14.4 18.1 311.9 — — 359.2 2019 secured railcar equipment notes 35.0 676.4 — — — — 711.4 2020 secured railcar equipment notes 10.9 13.7 272.2 — — — 296.8 2021 secured railcar equipment notes 29.1 30.5 30.1 259.8 18.4 338.6 706.5 2022 secured railcar equipment notes 6.7 8.1 8.2 8.2 192.5 — 223.7 TRL-2023 term loan 11.1 11.1 11.1 290.1 — — 323.4 Other equipment financing 2.4 2.5 2.7 2.8 3.0 36.6 50.0 TRP-2021 secured railcar equipment notes 15.8 17.2 286.6 — — — 319.6 Triumph Rail secured railcar equipment notes 29.1 23.3 417.1 — — — 469.5 Tribute Rail secured railcar equipment notes 14.5 273.3 — — — — 287.8 Total principal payments $ 840.1 $ 1,113.5 $ 1,091.8 $ 2,028.8 $ 235.3 $ 405.8 $ 5,715.3 87 Table of Contents Note 10. Income Taxes The components of the provision (benefit) for income taxes from continuing operations are as follows: Year Ended December 31, 2024 2023 2022 (in millions) Current: Federal 60.1 38.7 1.6 State 2.6 1.3 3.5 Foreign 9.8 10.5 7.8 Total current 72.5 50.5 12.9 Deferred: Federal ( 24.1 ) ( 20.7 ) 14.5 State 1.5 ( 8.1 ) 0.4 Foreign 0.5 ( 12.7 ) ( 0.2 ) Total deferred ( 22.1 ) ( 41.5 ) 14.7 Provision (benefit) $ 50.4 $ 9.0 $ 27.6 The provision for income taxes from continuing operations results in effective tax rates that differ from the statutory rates. The following is a reconciliation between the statutory U.S. federal income tax rate and our effective income tax rate on income before income taxes: Year Ended December 31, 2024 2023 2022 Statutory rate 21.0 % 21.0 % 21.0 % Foreign branch taxes 1.1 1.8 2.1 State taxes 1.8 2.2 1.7 Executive compensation limitations 1.1 1.3 1.3 Noncontrolling interest in partially-owned subsidiaries ( 1.8 ) ( 1.8 ) ( 2.1 ) Equity compensation ( 0.7 ) ( 0.5 ) ( 1.1 ) Changes in valuation allowance and reserves ( 0.8 ) ( 2.2 ) ( 0.9 ) Changes in tax laws and apportionment 0.5 ( 7.1 ) ( 0.5 ) Release of residual taxes from AOCI — ( 8.1 ) — Other, net 0.5 ( 0.6 ) 0.3 Effective rate 22.7 % 6.0 % 21.8 % 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 based upon our estimate of our state tax apportionment as applied to enacted state tax rates. 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, we recorded a non-cash, deferred tax expense of $ 0.9 million, a benefit of $ 10.6 million, and an expense of $ 0.7 million during the years ended December 31, 2024, 2023, and 2022, respectively. The tax provisions for the years ended December 31, 2024, 2023, and 2022 also reflect a benefit for a net adjustment to our valuation allowances of $ 1.8 million, $ 3.2 million, and $ 1.1 million, respectively, primarily for deferred tax assets in Mexico, state tax loss carryforwards, state reserves, and federal tax credits. Income (loss) from continuing operations before income taxes for the years ended December 31, 2024, 2023, and 2022 was $ 212.9 million, $ 137.2 million, and $ 127.1 million, respectively, for U.S. operations, and $ 8.9 million, $ 11.8 million, and $( 0.6 ) million, respectively, for foreign operations. 88 Table of Contents 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. The components of deferred tax liabilities and assets are as follows: December 31, 2024 2023 (in millions) Deferred tax liabilities: Depreciation, depletion, and amortization $ 1,110.0 $ 1,100.6 Partially-owned subsidiaries basis difference 124.7 129.9 Right-of-use assets 21.5 22.3 Equity items — 3.5 Accrued liabilities and other 7.0 4.8 Total deferred tax liabilities 1,263.2 1,261.1 Deferred tax assets: Workers compensation, pensions, and other benefits 33.6 30.0 Interest expense 108.8 85.0 Warranties and reserves 3.0 1.5 Equity items 1.2 — Tax loss carryforwards and credits 30.7 31.2 Inventory 6.7 5.9 Lease liabilities 25.3 26.4 Total deferred tax assets 209.3 180.0 Net deferred tax liabilities before valuation allowances 1,053.9 1,081.1 Valuation allowances 20.8 21.6 Net deferred tax liabilities before reserve for uncertain tax positions 1,074.7 1,102.7 Deferred tax assets included in reserve for uncertain tax positions ( 0.7 ) ( 0.7 ) Net deferred tax liability $ 1,074.0 $ 1,102.0 At December 31, 2024, we had $ 19.0 million of tax-effected state loss carryforwards and $ 11.7 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 federal tax return years through 2021 are closed under statute and the years 2022-2024 remain open. 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 2019 and forward. We believe we are appropriately reserved for any potential matters. Unrecognized tax benefits The change in unrecognized tax benefits was as follows: Year Ended December 31, 2024 2023 2022 (in millions) Beginning balance $ 1.0 $ 3.8 $ 2.3 Additions for tax positions related to the current year — — 1.1 Additions for tax positions of prior years — — 1.7 Reductions for tax positions of prior years — ( 2.8 ) — Settlements — — — Expiration of statute of limitations ( 0.1 ) — ( 1.3 ) Ending balance $ 0.9 $ 1.0 $ 3.8 89 Table of Contents The total amount of unrecognized tax benefits, including interest and penalties, at December 31, 2024 and 2023, that would affect our effective tax rate if recognized, was $ 2.6 million and $ 2.6 million, respectively. The additions for tax positions in the prior years are due to foreign positions of an acquired subsidiary that was recorded as part of our purchase accounting. The expiration of statute of limitations relates to a state tax position for which the statute of limitations has lapsed. The Company accounts for interest expense and penalties related to income tax issues as income tax expense. Accordingly, interest expense and penalties associated with an uncertain tax position are included in the income tax provision. The total amount of accrued interest and penalties from continuing operations as of December 31, 2024 and 2023 was $ 2.4 million and $ 2.3 million, respectively. Income tax expense (benefit) for the years ended December 31, 2024, 2023, and 2022 included an increase of $ 0.1 million, an increase of $ 0.1 million, and a decrease of $ 0.8 million, respectively, with regard to interest expense and penalties related to uncertain tax positions. Pillar Two During the year ended December 31, 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. Note 11. Employee Retirement Plans 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, 2024 2023 2022 (in millions) Defined contribution expense $ 11.7 $ 10.1 $ 9.1 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, 2024 and 2023, the projected benefit obligations and net funded status of our SERP were $ 10.5 million and $ 11.1 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, 2024, 2023, and 2022 were not significant in relation to the Consolidated Financial Statements. At December 31, 2024, 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, 2025 are $ 0.1 million ($ 0.1 million, net of related income taxes). Funding of Defined Contribution Plans The Company's 401(k) plan utilizes a qualified automatic contribution arrangement safe harbor plan structure. The matching structure provides for a dollar-for-dollar Company match on up to 6% of participants' eligible compensation, subject to a two-year cliff vesting period. Employer contributions to the 401(k) plan and the Trinity Industries, Inc. Deferred Compensation Plan for the year ending December 31, 2025 are expected to be $ 12.3 million, compared to $ 11.8 million contributed during 2024. 90 Table of Contents Note 12. Accumulated Other Comprehensive Income (Loss) Changes in AOCI for the years ended December 31, 2024 and 2023 are as follows: Unrealized gains (losses) on derivative financial instruments Net actuarial gains (losses) of defined benefit plans Accumulated other comprehensive income (loss) (in millions) Balances at December 31, 2022 $ 20.9 $ ( 1.2 ) $ 19.7 Other comprehensive income (loss), net of tax, before reclassifications 10.6 ( 0.3 ) 10.3 Amounts reclassified from AOCI, net of tax benefit of $ 7.4 , $ — , and $ 7.4 ( 26.1 ) 0.1 ( 26.0 ) Less: noncontrolling interest 7.0 — 7.0 Other comprehensive loss ( 8.5 ) ( 0.2 ) ( 8.7 ) Balances at December 31, 2023 12.4 ( 1.4 ) 11.0 Other comprehensive income (loss), net of tax, before reclassifications ( 3.5 ) 0.1 ( 3.4 ) Amounts reclassified from AOCI, net of tax expense of $ 3.7 , $ — , and $ 3.7 ( 11.5 ) 0.1 ( 11.4 ) Less: noncontrolling interest ( 0.4 ) — ( 0.4 ) Other comprehensive income (loss) ( 15.4 ) 0.2 ( 15.2 ) Balances at December 31, 2024 $ ( 3.0 ) $ ( 1.2 ) $ ( 4.2 ) 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. Reclassifications of unrealized before-tax gains and losses on derivative financial instruments are included in interest expense, net for our interest rate hedges and in cost of revenues for our foreign currency hedges in our Consolidated Statements of Operations. Reclassifications of before-tax net actuarial gains/(losses) of defined benefit plans are included in other, net (income) expense in our Consolidated Statements of Operations. 91 Table of Contents Note 13. Common Stock and Stock-Based Compensation Stockholders' Equity 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. During the year ended December 31, 2024, share repurchases totaled 0.6 million shares, at a cost of approximately $ 21.0 million, resulting in a remaining authorization to repurchase up to $ 229.0 million of our common stock under the share repurchase program as of December 31, 2024. Certain shares of stock repurchased during December 2024, totaling $ 0.3 million, were cash settled in January 2025 in accordance with normal settlement practices. There were no shares repurchased under this share repurchase program during the year ended December 31, 2023. Previous Share Repurchase Authorization In September 2021, our Board of Directors authorized a share repurchase program effective September 9, 2021 through December 31, 2022. The share repurchase program authorized the Company to repurchase up to $ 250.0 million of its common stock. In December 2021, we entered into an accelerated share repurchase agreement (the "ASR") to repurchase $ 125.0 million of our common stock. Approximately 3.3 million shares totaling $ 100.0 million that were repurchased as part of the ASR on December 31, 2021 were delivered to the Company in January 2022 in accordance with normal settlement practices, representing approximately 80% of the total notional value of the ASR. The ASR was completed in April 2022. During the year ended December 31, 2022, share repurchases totaled 2.8 million shares, at a cost of approximately $ 76.8 million. Share repurchases during the year ended December 31, 2022 included 0.8 million 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. Our Board of Directors terminated this share repurchase program effective December 8, 2022, and the remaining authorization of $ 21.3 million under this program expired unused. Stock-Based Compensation Stock Award Plans Our Fifth Amended and Restated 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; and (ii) shares tendered as full or partial payment for the purchase price of an award or to satisfy tax withholding obligations. At December 31, 2024, a total of 2,978,308 s hares were available for issuance. The Plan provides for the granting of nonqualified and incentive stock options having maximum ten-year terms to purchase common stock at its market value on the award date; stock appreciation rights based on common stock fair market values with settlement in common stock or cash; restricted stock awards; restricted stock units; and performance awards with settlement in common stock or cash on achievement of specific business objectives. Our stock options have contractual terms of ten years and become exercisable over a three-year period. Stock-Based Compensation Expense The cost of employee services received in exchange for awards of equity instruments is referred to as stock-based compensation and is recognized over the applicable vesting periods based on the grant date fair-value of those awards. Stock-based compensation expense totale d $ 23.6 million , $ 22.7 million, and $ 22.5 million for the years ended December 31, 2024, 2023, and 2022, respectively. The income tax benefit related to stock-based compensation expense was $ 6.8 million , $ 2.8 million, and $ 2.6 million for the years ended December 31, 2024, 2023, and 2022, respectively. 92 Table of Contents Stock Options Expense related to stock options is recognized on a straight-line basis over the vesting period. Number of Shares Weighted Average Grant-Date Fair Value per Award Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value (in millions) Options outstanding at December 31, 2023 300,000 $ 5.26 Granted — $ — Exercised — $ — Cancelled — $ — Options outstanding and exercisable at December 31, 2024 300,000 $ 5.26 5.1 $ 4.0 At December 31, 2024, there was no unrecognized compensation expense related to stock options. The weighted average exercise price of stock options outstanding as of December 31, 2024 was $ 21.61 . There were no options exercised during the years ended December 31, 2024, 2023, and 2022. 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 six months from the date of grant. The expense for these awards is recognized over the applicable service period for each of the eligible award recipients. Expense related to RSUs granted to non-employee directors under the Plan is recognized on a straight-line basis over the vesting period, generally one year . The fair value of RSUs granted is based on the Company's closing stock price on the date of grant. Forfeitures are recognized as a reduction to expense in the period in which they occur. Number of Restricted Stock Units Weighted Average Grant-Date Fair Value per Award Aggregate Intrinsic Value (in millions) Restricted stock units outstanding at December 31, 2023 1,646,571 $ 22.60 $ 43.8 Granted 455,673 $ 30.70 Vested ( 671,979 ) $ 23.52 Forfeited ( 133,403 ) $ 25.21 Restricted stock units outstanding at December 31, 2024 1,296,862 $ 24.71 $ 45.5 Additional information related to RSUs is as follows: Year Ended December 31, 2024 2023 2022 (in millions, except weighted average fair value) Weighted average grant-date fair value of RSUs granted $ 30.70 $ 21.63 $ 25.65 Total grant-date fair value of RSUs vested and released $ 15.8 $ 14.9 $ 14.2 Total intrinsic value of RSUs vested and released $ 20.6 $ 13.9 $ 16.5 At December 31, 2024, unrecognized compensation expense related to RSUs totaled $ 15.0 million, which will be recognized over a weighted average period o f 1.5 years . 93 Table of Contents Performance Units Performance units are granted to employees based upon a target level; however, depending upon the achievement of certain specified goals during the performance period, performance units may be adjusted to a level ranging between 0% and 200% of the target level. The performance units vest upon certification by the Human Resources Committee of the Board of Directors of the achievement of the specified performance goals. Expense related to performance units is recognized on a straight-line basis from their award date to the end of the performance period, generally three years. For the performance units granted 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 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. Forfeitures are recognized as a reduction to expense in the period in which they occur. Number of Performance Units Weighted Average Grant-Date Fair Value per Award Aggregate Intrinsic Value (in millions) Performance units outstanding at December 31, 2023 747,214 $ 29.41 $ 19.9 Granted 241,212 $ 29.54 Performance adjustment (1) 40,179 $ 20.27 Vested (2) ( 273,078 ) $ 29.39 Forfeited ( 31,905 ) $ 27.84 Performance units outstanding at December 31, 2024 723,622 $ 29.15 $ 25.4 (1) For the 2021-2023 performance period, performance adjustment includes 63,954 additional performance units for return on equity, for which actual performance resulted in a payout of 170% of target, and is net of 23,775 performance units for relative total shareholder return, for which actual performance resulted in a payout of 91% of target. (2) Includes 63,954 performance units for the 2021-2023 performance period for return on equity that were paid out at 170% of target based on actual performance achieved. Additional information related to performance units is as follows: Year Ended December 31, 2024 2023 2022 (in millions, except weighted average fair value) Weighted average grant-date fair value of performance units granted $ 29.54 $ 27.72 $ 29.80 Total grant-date fair value of performance units vested and released $ 8.0 $ 10.2 $ 4.7 Total intrinsic value of performance units vested and released $ 8.4 $ 8.6 $ 4.8 At December 31, 2024, unrecognized compensation expense related to performance units totaled $ 10.3 million, which will be recognized over a weighted average period of 1.4 years. 94 Table of Contents Restricted Stock Awards Expense related to restricted stock awards ("RSAs") granted to non-employee directors under the Plan is recognized on a straight-line basis over the vesting period, generally one year. Certain RSAs vest in their entirety upon 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. The fair value of RSAs granted is based on the Company's closing stock price on the date of grant. Forfeitures are recognized as a reduction to expense in the period in which they occur. Number of Restricted Stock Awards Weighted Average Grant-Date Fair Value per Award Aggregate Intrinsic Value (in millions) Restricted stock awards outstanding at December 31, 2023 552,240 $ 20.84 $ 14.7 Granted 15,903 $ 30.75 Vested ( 99,038 ) $ 20.11 Forfeited ( 50,159 ) $ 21.19 Restricted stock awards outstanding at December 31, 2024 (1) 418,946 $ 21.34 $ 14.7 (1) The balance of RSAs outstanding at December 31, 2024 includes approximate ly 0.1 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. Additional information related to RSAs is as follows: Year Ended December 31, 2024 2023 2022 (in millions, except weighted average fair value) Weighted average grant-date fair value of RSAs granted $ 30.75 $ 21.32 $ 25.43 Total grant-date fair value of RSAs vested and released $ 2.0 $ 2.0 $ 1.7 Total intrinsic value of RSAs vested and released $ 3.1 $ 2.1 $ 2.4 At December 31, 2024, unrecognized compensation expense related to RSAs totaled $ 1.4 million, which will be recognized over a weighted average period of 3.6 years. 95 Table of Contents Note 14. Earnings Per Common Share Basic net income attributable to Trinity Industries, Inc. per common share ("EPS") is computed by dividing net income attributable to Trinity 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 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. The following table sets forth the computation of basic and diluted net income attributable to Trinity Industries, Inc.: Year Ended December 31, 2024 2023 2022 (in millions, except per share amounts) Income from continuing operations $ 171.4 $ 140.0 $ 98.9 Less: Net income attributable to noncontrolling interest ( 18.7 ) ( 20.6 ) ( 12.8 ) Net income from continuing operations attributable to Trinity Industries, Inc. 152.7 119.4 86.1 Loss from discontinued operations, net of income taxes ( 14.3 ) ( 13.4 ) ( 20.3 ) Loss on sale of discontinued operations, net of income taxes — — ( 5.7 ) Net loss from discontinued operations attributable to Trinity Industries, Inc. ( 14.3 ) ( 13.4 ) ( 26.0 ) Net income attributable to Trinity Industries, Inc. $ 138.4 $ 106.0 $ 60.1 Basic weighted average shares outstanding 81.9 81.2 81.9 Effect of dilutive securities 2.3 2.2 2.3 Diluted weighted average shares outstanding 84.2 83.4 84.2 Basic earnings per common share: Income from continuing operations $ 1.86 $ 1.47 $ 1.05 Loss from discontinued operations ( 0.17 ) ( 0.16 ) ( 0.32 ) Basic net income attributable to Trinity Industries, Inc. $ 1.69 $ 1.31 $ 0.73 Diluted earnings per common share: Income from continuing operations $ 1.81 $ 1.43 $ 1.02 Loss from discontinued operations ( 0.17 ) ( 0.16 ) ( 0.31 ) Diluted net income attributable to Trinity Industries, Inc. $ 1.64 $ 1.27 $ 0.71 Potentially dilutive securities excluded from EPS calculation: Antidilutive restricted shares — 0.1 0.1 Antidilutive stock options — — — 96 Table of Contents Note 15. Contingencies 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. On June 30, 2023, Norfolk Southern filed a third-party complaint against the Company’s wholly-owned subsidiary, TILC, and certain other third-party defendants. Norfolk Southern asserted third-party claims against TILC for recovery of response costs, contribution, and declaratory relief under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"); negligence; 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 March 6, 2024, the trial court granted TILC’s motion to dismiss Norfolk Southern’s Third-Party Complaint and entered an order dismissing Norfolk Southern’s complaint against TILC. On March 26, 2024, Norfolk Southern filed a Motion for Entry of Partial Final Judgment, 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 ("Consolidated Class Action"). On July 25, 2023, Norfolk Southern filed a third-party complaint against the Company’s wholly-owned subsidiary, TILC, and certain other third-party defendants. Norfolk Southern asserted 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 ("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 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. 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 September 27, 2024, the district court entered an order approving the settlement of plaintiffs’ claims against Norfolk Southern and the Railcar Defendants. Certain individual class members have filed notices of appeal concerning the order approving the settlement. The appeals remain pending. On December 8, 2023, a lawsuit was filed against TILC titled Ambridge Area School District et al. v. 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. On February 23, 2024, TILC filed a motion to dismiss plaintiffs’ amended complaint, which remains pending. TILC was the owner of one tank car cited in this action, which was leased to a third party, who is also a defendant in the litigation. On January 31, 2025, a lawsuit was filed by more than 700 current and former residents and businesses in areas near East Palestine, Ohio against more than 50 defendants, including Norfolk Southern, Oxy Vinyls LP, GATX Corporation, General American Marks Company, TILC, certain governmental entities, and various corporate defendants, asserting various claims arising from the February 3, 2023 derailment. The case is styled Josh Hickman, et al. v. Norfolk Southern Railway Company, et al. , Case No. TC25-13854798, in the Court of Common Pleas, Franklin County, Ohio. Plaintiffs’ lawsuit asserts claims for negligence, nuisance and nuisance per se, strict liability, trespass, punitive damages, loss of consortium, wrongful death, survivorship, civil conspiracy, and Medicaid subrogation. Not all plaintiffs in this action are asserting claims against TILC in light of the pending settlement and associated releases in the Consolidated Class Action. TILC was the owner of one tank car cited in this action, which was leased to a third party, who is also a defendant in the litigation. 97 Table of Contents On February 3, 2025, a lawsuit was filed by 20 current and former residents of areas near East Palestine, Ohio against more than 50 defendants, including Norfolk Southern, Oxy Vinyls LP, GATX Corporation, General American Marks Company, TILC, certain governmental entities, and various corporate defendants asserting various claims arising from the February 3, 2023 derailment. The case is styled Gregory Taylor, et al. v. Norfolk Southern Railway Company, et al. , Case No. TC25-13870158, in the Court of Common Pleas, Franklin County, Ohio. Plaintiffs’ lawsuit asserts claims for negligence, nuisance and nuisance per se, strict liability, trespass, punitive damages, loss of consortium, civil conspiracy, and Medicaid subrogation. Not all plaintiffs are asserting claims against TILC in light of the pending settlement and associated releases in the Consolidated Class Action. TILC was the owner of one tank car cited in this action, which was leased to a third party, who is also a defendant in the litigation. On February 3, 2025, a lawsuit was filed by 28 current and former residents or businesses of areas near East Palestine, Ohio against more than 15 corporate defendants, including Norfolk Southern, Oxy Vinyls LP, GATX Corporation, General American Marks Company, and TILC asserting various claims arising from the February 3, 2023 derailment. The case is styled Richard Tsai, et al. v. Norfolk Southern Corporation, et al. , Case No. TC25-3395394, in the Court of Common Pleas, Cuyahoga County, Ohio. Plaintiffs’ lawsuit asserts claims for negligence, negligence per se, gross negligence, recklessness, strict liability, private nuisance, public nuisance, statutory nuisance under Pennsylvania and Ohio law, negligent infliction of emotional distress, intentional and/or reckless infliction of emotional distress, trespass, trespass to chattels, medical monitoring, loss of consortium, wrongful death, survivorship, and punitive damages, as well as an additional spoliation claim against Norfolk Southern. On February 3, 2025, these plaintiffs filed similar actions in Pennsylvania, styled Richard Tsai, et al. v. Norfolk Southern Corporation, et al. , Case Nos. 250200415 and 250200416, in the Court of Common Pleas, Philadelphia County, Pennsylvania. TILC was the owner of one tank car cited in these actions, which was leased to a third party, who is also a defendant in these matters. 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 contractual indemnity rights to protect the Company’s assets from losses arising from these types of litigation claims. Highway Products Litigation 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” 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 Mr. Joshua Harman filed a state qui tam action currently pending pursuant to the Virginia Fraud Against Taxpayers Act ("VFATA") ( Commonwealth of Virginia ex rel. Joshua M. Harman v. Trinity Industries, Inc. and Trinity Highway Products, LLC , Case No. CL13-698, in the Circuit Court, Richmond, Virginia). Mr. Harman alleged the Company violated the VFATA pertaining to sales of the ET Plus, and he is seeking damages, civil penalties, attorneys’ fees, costs, and interest. The Commonwealth of Virginia Attorney General has intervened in the Virginia matter. On February 7, 2024, the trial court granted the Company's motion for summary judgment. On July 26, 2024, Mr. Harman filed a Notice of Appeal of the trial court’s final judgment and all adverse rulings, including the denial of Mr. Harman’s and the Commonwealth of Virginia’s motion for reconsideration. Mr. Harman’s appeal remains pending. In a similar New Jersey state qui tam action ( State of New Jersey ex rel. Joshua M. Harman v. Trinity Industries, Inc. and Trinity Highway Products, LLC , Case No.L-1344-14, in the Superior Court of New Jersey Law Division: Mercer County) that was previously dismissed by the trial court, Mr. Harman sought leave to file an amended complaint pursuant to the New Jersey False Claims Act. On February 16, 2022, the trial court denied Mr. Harman’s motion. On August 9, 2022, Mr. Harman appealed the trial court's order denying Mr. Harman's motion for leave to file an amended complaint. On December 27, 2024, the appellate court affirmed the trial court’s order denying Mr. Harman leave to file an amended complaint. Mr. Harman’s deadline to file a Notice of Petition for Certification to the New Jersey Supreme Court was January 16, 2025, and no such notice was filed. 98 Table of Contents 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, we currently do not believe that a loss is probable in the state qui tam actions described above, 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. While the financial impacts of these state actions are currently unknown, they could be material. Product liability cases 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. The Company carries general liability insurance to mitigate the impact of adverse judgment exposures in these product liability cases. 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". Other Matters The Company is involved in claims and lawsuits incidental to our business arising from various matters, including product warranty, personal injury, environmental issues, workplace laws, and various governmental regulations. 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 $ 7.5 million to $ 18.9 million. This range includes any amounts related to the matters described above in the section titled “Highway products litigation." At December 31, 2024, total accruals of $ 8.9 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. Trinity is subject to remedial orders and federal, state, local, and foreign laws and regulations relating to the environment and the workplace. The Company has reserved $ 1.2 million to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such matters, taking into account currently available information and our contractual rights to indemnification and recourse to third parties. However, estimates of liability arising from future proceedings, assessments, or remediation are inherently imprecise. Accordingly, there can be no assurance that we will not become involved in future litigation or other proceedings involving the environment and the workplace or, if we are found to be responsible or liable in any such litigation or proceeding, that such costs would not be material to the Company. We believe that we are currently in substantial compliance with environmental and workplace laws and regulations. Loss Events in Cartersville, Georgia We experienced two separate loss events at the Company's facility in Cartersville, Georgia. With each of these events, we incurred costs related to cleanup and damage remediation activities in order for the facility to resume operations. We believe our insurance coverage is sufficient to cover property damage costs related to these events. Any property damage insurance proceeds received in excess of the net book value of property lost and related cleanup costs are accounted for as a gain, in accordance with ASC 450-30, Gain Contingencies . Additionally, the Company may be entitled to business interruption proceeds related to these events. We record these recoveries once settlements have been reached with the insurance company. Fire In January 2024, a fire damaged a portion of our Cartersville, Georgia facility. To date, we have received total advanced payments from insurance of approximately $ 5.4 million, which includes $ 1.7 million for reimbursement of cleanup and damage remediation activities and the collection of a $ 1.0 million insurance receivable. As of December 31, 2024, we have utilized $ 2.7 million of the advanced payments from insurance towards new capital expenditures in support of the reconstruction efforts. During the year ended December 31, 2024, we recorded gains of $ 2.7 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. Tornado In March 2021, a tornado damaged our Cartersville, Georgia facility. During the years ended December 31, 2023 and 2022, we recorded gains of $ 6.3 million and $ 7.5 million, respectively, 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. 99 Table of Contents Note 16. Selected Quarterly Financial Data (Unaudited) Three Months Ended March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 (in millions, except per share data) Revenues: Manufacturing $ 525.3 $ 560.9 $ 509.6 $ 342.6 Leasing & Services 284.3 280.5 289.2 286.8 809.6 841.4 798.8 629.4 Operating costs: Costs of revenues: Manufacturing 476.3 505.8 460.7 305.4 Leasing & Services 168.6 156.6 168.6 169.0 644.9 662.4 629.3 474.4 Selling, engineering, and administrative expenses 52.3 61.3 60.5 61.6 Gains on dispositions of property 2.8 24.2 13.4 22.9 Restructuring activities, net — — — 4.3 Operating profit 115.2 141.9 122.4 112.0 Other expense 72.5 66.7 66.0 64.5 Income from continuing operations before income taxes 42.7 75.2 56.4 47.5 Provision for income taxes 11.0 17.1 15.6 6.7 Income from continuing operations 31.7 58.1 40.8 40.8 Loss from discontinued operations, net of income taxes ( 4.3 ) ( 1.7 ) ( 5.3 ) ( 3.0 ) Net income 27.4 56.4 35.5 37.8 Net income attributable to noncontrolling interest 3.7 2.0 4.1 8.9 Net income attributable to Trinity Industries, Inc. $ 23.7 $ 54.4 $ 31.4 $ 28.9 Basic earnings per common share (1) : Income from continuing operations $ 0.34 $ 0.68 $ 0.45 $ 0.39 Loss from discontinued operations ( 0.05 ) ( 0.02 ) ( 0.07 ) ( 0.04 ) Basic net income attributable to Trinity Industries, Inc. $ 0.29 $ 0.66 $ 0.38 $ 0.35 Diluted earnings per common share (1) : Income from continuing operations $ 0.33 $ 0.67 $ 0.44 $ 0.38 Loss from discontinued operations ( 0.05 ) ( 0.02 ) ( 0.07 ) ( 0.04 ) Diluted net income attributable to Trinity Industries, Inc. $ 0.28 $ 0.65 $ 0.37 $ 0.34 (1) The sum of the quarters may not necessarily be equal to the full year net income per common share amount. 100 Table of Contents Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 (in millions, except per share data) Revenues: Manufacturing $ 409.0 $ 454.6 $ 560.0 $ 520.3 Leasing & Services 232.7 267.8 261.3 277.6 641.7 722.4 821.3 797.9 Operating costs: Costs of revenues: Manufacturing 391.9 434.1 523.0 478.5 Leasing & Services 146.6 167.1 156.5 158.5 538.5 601.2 679.5 637.0 Selling, engineering, and administrative expenses 49.9 54.3 49.1 48.6 Gains on dispositions of property 15.3 30.4 7.5 36.4 Restructuring activities, net ( 0.4 ) ( 1.8 ) — — Operating profit 69.0 99.1 100.2 148.7 Other expense 63.7 68.2 67.9 68.2 Income from continuing operations before income taxes 5.3 30.9 32.3 80.5 Provision (benefit) for income taxes ( 11.5 ) 7.4 6.0 7.1 Income from continuing operations 16.8 23.5 26.3 73.4 Loss from discontinued operations, net of income taxes ( 3.1 ) ( 2.3 ) ( 2.7 ) ( 5.3 ) Net income 13.7 21.2 23.6 68.1 Net income attributable to noncontrolling interest 9.3 4.2 1.8 5.3 Net income attributable to Trinity Industries, Inc. $ 4.4 $ 17.0 $ 21.8 $ 62.8 Basic earnings per common share (1) : Income from continuing operations $ 0.09 $ 0.24 $ 0.30 $ 0.83 Loss from discontinued operations ( 0.04 ) ( 0.03 ) ( 0.03 ) ( 0.06 ) Basic net income attributable to Trinity Industries, Inc. $ 0.05 $ 0.21 $ 0.27 $ 0.77 Diluted earnings per common share (1) : Income from continuing operations $ 0.09 $ 0.23 $ 0.29 $ 0.81 Loss from discontinued operations ( 0.04 ) ( 0.03 ) ( 0.03 ) ( 0.06 ) Diluted net income attributable to Trinity Industries, Inc. $ 0.05 $ 0.20 $ 0.26 $ 0.75 (1) The sum of the quarters may not necessarily be equal to the full year net income per common share amount. 101 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.