What changed in this filing

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Item 1. Financial Statements

2025-05-01 compared with 2024-10-31 · 215 added, 514 removed, 640 unchanged (53% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in millions, except per share amounts)

1 unchanged sentence

Leasing & Services 287.2 284.3

798.8 821.3 2,449.8 2,185.4

Operating costs:

2 unchanged sentences

Leasing & Services 171.6 168.6

629.3 679.5 1,936.6 1,819.2

Selling, engineering, and administrative expenses:

2 unchanged sentences

Corporate & other 24.4 26.5

60.5 49.1 174.1 153.3

Gains on dispositions of property:

1 unchanged sentence

Other 1.7 0.7

13.4 7.5 40.4 53.2

Restructuring activities, net — — — ( 2.2 )

Total operating profit 99.8 115.2

2 unchanged sentences

Other, net ( 2.7 ) 3.4

66.0 67.9 205.2 199.8

Income from continuing operations before income taxes 36.4 42.7

2 unchanged sentences

Deferred ( 6.1 ) ( 2.1 )

15.6 6.0 43.7 1.9

Income from continuing operations 29.0 31.7

8 unchanged sentences

Loss from discontinued operations ( 0.02 ) ( 0.05 )

Basic net income attributable to Trinity Industries, Inc.

Net income attributable to Trinity Industries, Inc.

$ 0.27 $ 0.29

2 unchanged sentences

Loss from discontinued operations ( 0.02 ) ( 0.05 )

Diluted net income attributable to Trinity Industries, Inc.

Net income attributable to Trinity Industries, Inc.

$ 0.26 $ 0.28

2 unchanged sentences

Diluted 83.8 83.5

Earnings per common share is calculated independently for each component and may not sum to total net income attributable to Trinity Industries, Inc.

per common share due to rounding.

See accompanying notes to Consolidated Financial Statements.

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in millions)

3 unchanged sentences

Unrealized gains (losses) arising during the period, net of tax benefit (expense) of $ 0.6 and $( 3.4 )

( 13.2 ) 5.0 ( 7.3 ) 14.4

Reclassification adjustments for gains included in net income, net of tax (expense) benefit of $( 1.3 ), $( 1.4 ), $( 4.2 ), and $ 8.5

( 3.8 ) ( 4.8 ) ( 13.1 ) ( 23.6 )

Defined benefit plans:

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

( 16.9 ) 0.2 ( 20.3 ) ( 9.2 )

Reclassification adjustments for (gains) losses included in net income, net of tax benefit (expense) of $ 0.5 and $( 1.2 )

Comprehensive income 27.2 34.9

6 unchanged sentences

Consolidated Balance Sheets

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

30 unchanged sentences

Retained earnings 1,051.6 1,054.1

Accumulated other comprehensive income (loss) ( 9.6 ) 11.0

Accumulated other comprehensive loss ( 4.2 ) ( 4.2 )

Treasury stock ( 9.1 ) ( 0.6 )

7 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in millions)

8 unchanged sentences

Gains on dispositions of property and other assets ( 1.7 ) ( 0.7 )

Gains on insurance recoveries from property damage — ( 4.9 )

Non-cash impact of restructuring activities — ( 2.2 )

Non-cash interest expense 3.4 3.4

Loss on extinguishment of debt 1.5 —

Other ( 0.4 ) 0.5

10 unchanged sentences

Investing activities:

Proceeds from dispositions of property and other assets 15.5 13.0

Proceeds from lease portfolio sales 253.7 245.8

Capital expenditures – lease fleet ( 120.2 ) ( 147.5 )

Proceeds from lease portfolio sales 33.7 24.2

Capital expenditures – operating and administrative ( 9.2 ) ( 4.6 )

Acquisitions, net of cash acquired — ( 66.2 )

Proceeds from insurance recoveries 1.7 4.9

Equity investments ( 3.6 ) ( 1.1 )

Proceeds from dispositions of property and other assets 4.1 3.9

Net cash used in investing activities ( 91.6 ) ( 124.0 )

38 unchanged sentences

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

March 31, 2024

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

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

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

Cash dividends declared on common stock (1)

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

Distributions to noncontrolling interest

— — — — — — — — ( 2.8 ) ( 2.8 )

Stock-based compensation expense

— — 5.9 — — — — 5.9 — 5.9

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

Shares repurchased — — — — — ( 0.3 ) ( 8.2 ) ( 8.2 ) — ( 8.2 )

Retirement of treasury stock

( 0.3 ) — ( 10.4 ) — — 0.3 10.4 — — —

June 30, 2024

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

Net income — — — 31.4 — — — 31.4 4.1 35.5

Other comprehensive income (loss) — — — — ( 17.0 ) — — ( 17.0 ) 0.1 ( 16.9 )

Cash dividends declared on common stock (1)

— — — ( 23.2 ) — — — ( 23.2 ) — ( 23.2 )

Distributions to noncontrolling interest — — — — — — — — ( 1.6 ) ( 1.6 )

Stock-based compensation expense

— — 6.7 — — — — 6.7 — 6.7

Settlement of share-based awards, net — — 0.8 — — — ( 0.6 ) 0.2 — 0.2

Shares repurchased — — — — — ( 0.2 ) ( 6.2 ) ( 6.2 ) — ( 6.2 )

September 30, 2024

March 31, 2025

81.8 $ 0.8 $ 14.1 $ 1,051.6 $ ( 4.2 ) ( 0.3 ) $ ( 9.1 ) $ 1,053.2 $ 246.5 $ 1,299.7

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

Common Stock Capital in

13 unchanged sentences

Net income — — — 23.7 — — — 23.7 3.7 27.4

Other comprehensive loss — — — — ( 7.0 ) — — ( 7.0 ) ( 7.4 ) ( 14.4 )

Cash dividends declared on common stock (1)

— — — ( 21.4 ) — — — ( 21.4 ) — ( 21.4 )

Distributions to noncontrolling interest — — — — — — — — ( 2.9 ) ( 2.9 )

Stock-based compensation expense

— — 6.2 — — — — 6.2 — 6.2

Settlement of share-based awards, net — — 0.4 — — — ( 0.8 ) ( 0.4 ) — ( 0.4 )

March 31, 2023

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

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

Other comprehensive income — — — — 7.4 — — 7.4 0.1 7.5

2 unchanged sentences

Distributions to noncontrolling interest — — — — — — — — ( 3.0 ) ( 3.0 )

— — — — — — — — ( 6.1 ) ( 6.1 )

Stock-based compensation expense

1 unchanged sentence

Settlement of share-based awards, net — — 0.1 — — — ( 0.4 ) ( 0.3 ) — ( 0.3 )

Retirement of treasury stock

( 0.3 ) — ( 7.2 ) — — 0.3 7.2 — — —

June 30, 2023

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

Net income — — — 21.8 — — — 21.8 1.8 23.6

Other comprehensive income — — — — 0.1 — — 0.1 0.1 0.2

Cash dividends declared on common stock (1)

— — — ( 21.7 ) — — — ( 21.7 ) — ( 21.7 )

Distributions to noncontrolling interest — — — — — — — — ( 3.7 ) ( 3.7 )

Stock-based compensation expense

— — 6.1 — — — — 6.1 — 6.1

Settlement of share-based awards, net — — 0.2 — — — ( 0.3 ) ( 0.1 ) — ( 0.1 )

September 30, 2023

March 31, 2024

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

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

(1) Dividends of $ 0.30 and $ 0.28 per common share for the three months ended March 31, 2025 and 2024, respectively.

See accompanying notes to Consolidated Financial Statements.

5 unchanged sentences

The foregoing Consolidated Financial Statements are unaudited and have been prepared from the books and records of Trinity Industries, Inc.

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

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

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

In our opinion, all normal and recurring adjustments necessary for a fair presentation of our financial position as of March 31, 2025 and the results of operations and cash flows for the three months ended March 31, 2025 and 2024 have been made in conformity with generally accepted accounting principles.

All significant intercompany accounts and transactions have been eliminated.

Certain prior year balances have been reclassified to conform to the 2025 presentation.

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

Due to seasonal and other factors, the results of operations for the three months ended March 31, 2025 may not be indicative of expected results of operations for the year ending December 31, 2025.

These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with our audited Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2024.

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

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

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.

14 unchanged sentences

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

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

See "Lease Accounting" below for additional information regarding sales-type leases.

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 of Company-owned railcars pursuant to the provisions of our lease contracts.

This may include services that are not included in the full-service lease agreement, such as repairs of railcar damage or other customer-specific requirements.

We also perform maintenance and repair activities on railcars owned by third parties, including our investor-owned fleet.

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 $ 11.8 million and $ 8.8 million as of September 30, 2024 and December 31, 2023, respectively, related to unbilled revenues recognized on repair and maintenance activities that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

We recorded contract assets of $ 11.5 million and $ 9.6 million as of March 31, 2025 and December 31, 2024, 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 when the customer has submitted its certificate of acceptance and legal title of the railcar has passed to the customer.

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

We recorded contract assets of $ 4.1 million and $ 12.6 million as of September 30, 2024 and December 31, 2023, respectively, which primarily relate to unbilled revenues recognized on sustainable railcar conversions that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer.

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 $ 3.7 million and $ 3.4 million as of March 31, 2025 and December 31, 2024, respectively.

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

3 unchanged sentences

Unsatisfied Performance Obligations

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

Unsatisfied performance obligations at September 30, 2024

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of March 31, 2025 and the percentage of the outstanding performance obligations as of March 31, 2025 expected to be delivered during the remainder of 2025:

Unsatisfied performance obligations at March 31, 2025

Amount Percent expected to be delivered in 2025

14 unchanged sentences

Lease Accounting

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 thirteen years , some of which include options to extend for up to five years , and some of which include options to terminate within one year .

As of September 30, 2024, we had no material finance leases in which we were the lessee.

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Consolidated Statements of Operations

Operating lease expense $ 5.2 $ 4.6 $ 15.8 $ 13.3

Consolidated Statements of Cash Flows

Cash flows from operating activities $ 15.8 $ 13.3

Right-of-use assets recognized in exchange for new lease liabilities $ 8.0 $ 9.6

September 30, 2024 December 31, 2023

Consolidated Balance Sheets

Right-of-use assets (1)

$ 97.0 $ 100.6

Lease liabilities (2)

$ 112.6 $ 118.2

Weighted average remaining lease term 8.7 years 9.3 years

Weighted average discount rate (3)

(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 of our Trinity Industries Leasing Company ("TILC") warehouse loan facility for railcar leases or our revolving credit facility for operating and administrative leases at lease commencement 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

Remaining three months of 2024 $ 2.3 $ 3.1 $ 5.4

2025 8.7 11.4 20.1

2026 8.0 10.1 18.1

2027 7.5 9.3 16.8

2028 5.0 7.9 12.9

Thereafter 6.8 51.3 58.1

Total operating lease payments $ 38.3 $ 93.1 $ 131.4

Present value adjustment ( 18.8 )

Total operating lease liabilities $ 112.6

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.

The majority of our fleet operates on full-service leases that earn fixed monthly lease payments.

Generally, lease payments are due at the beginning of the applicable month.

1 unchanged sentence

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

As of March 31, 2025, non-lease fleet operating leases in which we are the lessor were not significant, and we had no direct finance leases.

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

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in millions)

3 unchanged sentences

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

Remaining three months of 2024 $ 186.1

Remaining nine months of 2025 $ 561.4

Thereafter 417.4

2 unchanged sentences

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

Remaining three months of 2024 $ 0.3

Remaining nine months of 2025 $ 0.8

Thereafter 7.9

13 unchanged sentences

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

During the nine months ended September 30, 2024, we recognized approximately $ 3.3 million of credit loss expense and wrote off $ 1.6 million related to our trade receivables that are in the scope of ASC 326, Financial Instruments – Credit Losses, bringing the allowance for credit losses balance from $ 12.8 million at December 31, 2023 to $ 14.5 million at September 30, 2024.

During the three months ended March 31, 2025, we recognized approximately $ 4.0 million of credit loss expense and wrote off $ 0.2 million related to our trade receivables that are in the scope of ASC 326, Financial Instruments – Credit Losses, bringing the allowance for credit losses balance from $ 14.3 million at December 31, 2024 to $ 18.1 million at March 31, 2025.

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

6 unchanged sentences

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

Amounts due to our participating suppliers in the SCF program totaled $ 12.3 million and $ 18.3 million as of September 30, 2024 and December 31, 2023, respectively, and are included in accounts payable in our Consolidated Balance Sheets.

Amounts due to our participating suppliers in the SCF program totaled $ 10.7 million and $ 8.2 million as of March 31, 2025 and December 31, 2024, respectively, and are included in accounts payable in our Consolidated Balance Sheets.

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

Goodwill by segment is as follows:

September 30, 2024 December 31, 2023

Railcar Leasing and Services Group $ 50.6 $ 50.6

Rail Products Group 170.9 170.9

$ 221.5 $ 221.5

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.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in millions)

Beginning balance $ 2.8 $ 5.2 $ 3.3 $ 3.3

Warranty costs incurred — ( 0.7 ) ( 0.4 ) ( 1.2 )

Warranty originations and revisions 0.2 0.5 0.4 3.5

Warranty expirations ( 0.1 ) — ( 0.4 ) ( 0.6 )

Ending balance $ 2.9 $ 5.0 $ 2.9 $ 5.0

Recent Accounting Pronouncements

Not Yet Adopted

ASU 2023-07 – In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No.

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

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

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

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

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

2 unchanged sentences

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

Early adoption is permitted.

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

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.

Acquisitions and Discontinued Operations

1 unchanged sentence

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 included minimum additional consideration of $ 10.0 million, which was 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 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 nine months ended September 30, 2024, the first installment of the additional consideration, totaling $ 10.0 million, was paid.

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

During the three months ended March 31, 2025, the second and final 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 September 30, 2024, the estimated fair value of the remaining additional consideration was $ 10.0 million.

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 immaterial 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.

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”).

In connection with the sale, the Company agreed to indemnify the buyer 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 three and nine months ended September 30, 2024, we recorded expenses related to these obligations of $ 7.0 million ($ 5.3 million, net of income taxes) and $ 14.8 million ($ 11.3 million, net of income taxes), respectively.

For the three and nine months ended September 30, 2023, we recorded expenses related to these obligations of $ 3.4 million ($ 2.7 million, net of income taxes) and $ 10.3 million ($ 8.1 million, net of income taxes), respectively.

For the three months ended March 31, 2025 and 2024, we recorded expenses related to these obligations of $ 2.5 million ($ 1.9 million, net of income taxes) and $ 5.6 million ($ 4.3 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 14 for further information regarding obligations retained in connection with the THP sale.

See Note 15 of our Annual Report on Form 10-K for further information regarding obligations retained in connection with the THP sale.

Derivative Instruments and Fair Value Measurements

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Included in accompanying balance sheet

at September 30, 2024

at March 31, 2025

AOCI – loss/(income)

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

(2) In September 2024, we entered into an interest rate swap to hedge a portion of the risk of potential interest rate increases in anticipation of a future debt issuance.

(2) We entered into forward starting interest rate swaps to hedge a portion of the risk of potential interest rate increases in anticipation of a debt refinancing, which was completed on April 30, 2025.

See Note 8 for further information.

The balance at March 31, 2025 is comprised of a derivative liability of $ 2.1 million with one counterparty and a derivative asset of $ 0.9 million with a different counterparty.

Effect on interest expense – increase/(decrease)

Three Months Ended

September 30, Nine Months Ended

September 30, Expected effect during next twelve months

2024 2023 2024 2023

March 31, Expected effect during next twelve months

(in millions)

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$ — $ — $ 0.1

TRIP Holdings warehouse loan $ — $ — $ — $ 0.1 $ —

Tribute Rail secured railcar equipment notes $ 0.2 $ 0.2 $ 0.2

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TRL-2023 term loan $ (0.4) $ (1.0) $ ( 0.3 )

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

TILC $ — $ — $ 0.2

(1) Based on the fair value of open hedges as of March 31, 2025.

Foreign Currency Hedges

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

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

Information related to our foreign currency hedges is as follows:

accompanying balance

sheet at September 30, 2024

Effect on cost of revenues – increase/(decrease)

sheet at March 31, 2025

Effect on cost of revenues –

increase/(decrease)

Amount Asset/ (Liability) AOCI –

loss/(income) Three Months Ended

September 30, Nine Months Ended

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

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

Instrument 2025 2024

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Forward contracts $ 79.8 $ ( 2.9 ) $ 4.6 $ 4.7 $ (1.5) $ 4.6

$ — $ — $ — $ — $ — $ 0.2 $ — $ —

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

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

Options $ 50.3 $ 0.4 $ 0.8 $ — $ 0.3 $ 1.2

(1) Based on the fair value of open hedges as of March 31, 2025.

Derivatives Not Designated as Hedging Instruments (1)

Asset/(Liability) at

September 30, 2024

Effect on other, net (income) expense –

increase/(decrease)

March 31, 2025

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

Amount Interest

Rate Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in millions)

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(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 nine months ended September 30, 2024 includes a fee of $ 3.1 million related to the execution of back-to-back interest rate caps associated with the new TILC warehouse loan facility.

See Note 8 for further information.

(3) These interest rate caps matured in March 2024 and were settled in April 2024.

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

(3) These interest rate caps matured and settled in 2024.

Fair Value Measurements

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

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

As of September 30, 2024 and December 31, 2023, we have no assets or liabilities measured on a recurring basis as Level 3 in the fair value hierarchy, except as described in Note 2.

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

As of March 31, 2025 and December 31, 2024, we have no assets or liabilities measured on a recurring basis as Level 3 in the fair value hierarchy.

See Note 8 for the estimated fair values of our debt instruments.

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and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components.

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

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

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

Sales and related net profits ("deferred profit") from the Rail Products Group to the Leasing Group are recorded in the Rail Products Group and eliminated in consolidation.

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We operate principally in North America.

Three Months Ended September 30, 2024

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

External revenue $ 289.2 $ 509.6 $ — $ 798.8

Intersegment revenue 0.3 93.6 ( 93.9 ) —

Total revenues $ 289.5 $ 603.2 $ ( 93.9 ) $ 798.8

Three Months Ended September 30, 2023

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

External revenue $ 261.3 $ 560.0 $ — $ 821.3

Intersegment revenue 0.4 64.1 ( 64.5 ) —

Total revenues $ 261.7 $ 624.1 $ ( 64.5 ) $ 821.3

Nine Months Ended September 30, 2024

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

External revenue $ 854.0 $ 1,595.8 $ — $ 2,449.8

Intersegment revenue 2.1 309.0 ( 311.1 ) —

Three Months Ended March 31, 2025

Railcar Leasing and Services Group Rail Products Group Total

External revenues $ 287.2 $ 298.2 $ 585.4

Intersegment revenues 0.2 122.3 122.5

Total revenues 287.4 420.5 707.9

Nine Months Ended September 30, 2023

Railcar Leasing and Services Group Rail Products Group Eliminations Consolidated Total

External revenue $ 761.8 $ 1,423.6 $ — $ 2,185.4

Intersegment revenue 1.1 443.5 ( 444.6 ) —

Elimination of intersegment revenues ( 122.5 )

Total consolidated revenues $ 585.4

Rail Products Group cost of revenues (2)

Depreciation and amortization for Company-owned railcars (3)

Maintenance and compliance for Company-owned railcars (3)(4)

Selling, engineering, and administrative expenses 18.7 6.9

Gains on lease portfolio sales ( 5.9 ) *

Other segment items (5)

Segment operating profit $ 104.5 $ 25.9 $ 130.4

Three Months Ended March 31, 2024

Railcar Leasing and Services Group Rail Products Group Total

External revenues $ 284.3 $ 525.3 $ 809.6

Intersegment revenues 0.9 142.1 143.0

Total revenues 285.2 667.4 952.6

Elimination of intersegment revenues ( 143.0 )

Total consolidated revenues $ 809.6

Rail Products Group cost of revenues (2)

Depreciation and amortization for Company-owned railcars (3)

Maintenance and compliance for Company-owned railcars (3)(4)

Selling, engineering, and administrative expenses 18.1 7.7

Gains on lease portfolio sales ( 2.1 ) *

Other segment items (5)

Segment operating profit $ 100.3 $ 43.8 $ 144.1

* 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.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in millions)

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Corporate and other ( 24.4 ) ( 26.5 )

Restructuring activities, net — — — 2.2

Eliminations ( 6.2 ) ( 2.4 )

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Net income $ 27.1 $ 27.4

Additional financial information by segment is shown in the tables below.

March 31, 2025 December 31, 2024

(in millions)

Railcar Leasing and Services Group $ 8,148.6 $ 8,151.7

Rail Products Group 943.4 967.7

Segment Totals 9,092.0 9,119.4

Corporate and other 242.2 383.3

Eliminations ( 669.5 ) ( 670.5 )

Total assets $ 8,664.7 $ 8,832.2

Depreciation & Amortization Capital Expenditures

Three Months Ended

March 31, Three Months Ended

2025 2024 2025 2024

(in millions)

Railcar Leasing and Services Group $ 66.5 $ 65.4 $ 122.5 $ 150.0

Rail Products Group 7.0 6.9 6.6 2.1

Corporate and other 0.8 1.1 0.3 —

Total $ 74.3 $ 73.4 $ 129.4 $ 152.1

Partially-Owned Subsidiaries

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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 September 30, 2024, the carrying value of our investments in TRIP Holdings and RIV 2013 totaled $ 125.3 million.

At March 31, 2025, the carrying value of our investments in TRIP Holdings and RIV 2013 totaled $ 129.2 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.

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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 September 30, 2024, the carrying value of our investment in Trinity Global Ventures totaled $ 2.8 million, which is eliminated in consolidation.

At March 31, 2025, the carrying value of our investment in Trinity Global Ventures totaled $ 2.7 million, which is eliminated in consolidation.

Investment in Unconsolidated Affiliate

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

In connection with the sale, TILC contributed $ 2.0 million of cash to Signal Rail.

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

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

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

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

At September 30, 2024, the carrying value of TILC’s equity investment in Signal Rail was $ 21.5 million, which is included in other assets in our Consolidated Balance Sheets.

At March 31, 2025, the carrying value of TILC’s equity investment in Signal Rail was $ 21.0 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.

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and other railcar logistics products and services.

See Note 1 for information on future contractual minimum rental revenues related to the Leasing Group's railcar operating leases.

Information related to the Leasing Group is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 Percent 2024 2023 Percent

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

Three Months Ended March 31,

2025 2024 Percent

($ in millions) Change

Leasing and management $ 219.0 $ 209.0 4.8 %

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* Not meaningful

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

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

(4) Depreciation and amortization expense includes $ 0.1 million and $ 5.6 million for the three and nine months ended September 30, 2023, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program.

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

(4) 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.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in millions)

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Operating profit margin on lease portfolio sales 17.5 % 8.7 %

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 operating leases.

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

Remaining three months of 2024 2025 2026 2027 2028 Thereafter Total

(in millions)

Future contractual minimum rental revenues $ 182.9 $ 649.3 $ 526.6 $ 402.9 $ 257.0 $ 400.5 $ 2,419.2

Wholly-owned subsidiaries.

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

As of September 30, 2024, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 5,587.4 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries.

The net book value of unpledged equipment at September 30, 2024 was $ 290.7 million.

The Leasing Group’s debt at March 31, 2025 consisted primarily of non-recourse debt.

As of March 31, 2025, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $ 5,542.1 million, which is pledged solely as collateral for Leasing Group debt held by those subsidiaries.

The net book value of unpledged equipment at March 31, 2025 was $ 445.2 million.

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

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

As of September 30, 2024, TRIP Holdings held equipment with a net book value of $ 1,018.9 million, which is pledged solely as collateral for the TRIP Holdings' debt held by its subsidiaries.

As of September 30, 2024, TRP-2021 equipment with a net book value of $ 413.1 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:

Remaining three months of 2024 2025 2026 2027 2028 Thereafter Total

(in millions)

Future operating lease obligations

$ 2.3 $ 8.7 $ 8.0 $ 7.5 $ 5.0 $ 6.8 $ 38.3

Future contractual minimum rental revenues $ 3.2 $ 11.5 $ 8.6 $ 3.2 $ 1.0 $ 1.8 $ 29.3

Operating lease obligations totaling $ 0.6 million are guaranteed by Trinity Industries, Inc.

and certain subsidiaries.

As of March 31, 2025, TRIP Holdings held equipment with a net book value of $ 999.4 million, which is pledged solely as collateral for the TRIP Holdings' debt held by its subsidiaries.

As of March 31, 2025, TRP-2021 equipment with a net book value of $ 404.8 million is pledged solely as collateral for the TRP-2021 debt.

Property, Plant, and Equipment

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

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The carrying amounts of our debt are as follows:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

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Revolving credit facility $ — $ —

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

Senior notes due 2028, inclusive of unamortized premium of $ 4.0 and $ 4.3

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Total debt $ 5,616.2 $ 5,690.9

Estimated Fair Value of Debt – 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).

Estimated Fair Value of Debt – The estimated fair value of our 7.75 % senior notes due 2028 ("Senior Notes due 2028") is 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 September 30, 2024, we evaluated the fair value of the other equipment financing liability using Level 3 inputs and determined that the carrying value approximates fair value.

As of March 31, 2025, we evaluated the fair value of the other equipment financing liability using Level 3 inputs and determined that the carrying value approximates fair value.

The estimated fair values of our debt are as follows:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

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

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

Additionally, we had outstanding letters of credit issued in an aggregate amount of $ 4.4 million, leaving $ 595.6 million available for borrowing as of September 30, 2024.

Our outstanding letters of credit as of September 30, 2024 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 6.44 % as of September 30, 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 September 30, 2024).

During the three months ended March 31, 2025, there were no borrowings and no repayments 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 March 31, 2025.

Our outstanding letters of credit as of March 31, 2025 support performance bonds related to certain railcar orders.

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 March 31, 2025).

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 September 30, 2024, we were in compliance with all such financial covenants.

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

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

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

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

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

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

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

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

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

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

These charges are reflected in the interest expense, net line of our Consolidated Statements of Operations for the nine months ended September 30, 2024.

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

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

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

During the nine months ended September 30, 2024, we had total borrowings of $ 946.5 million and total repayments of $ 952.8 million under the current and prior TILC warehouse loan facilities.

Of the remaining unused facility amount of $ 277.0 million, $ 106.2 million was available as of September 30, 2024 based on the amount of warehouse-eligible, unpledged equipment.

Advances under the facility bear interest at one-month term SOFR plus a facility margin of 1.75 %, for an all-in interest rate of 6.95 % at September 30, 2024.

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

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

We incurred $ 4.4 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 Trinity Rail Leasing VII LLC, as described below;

As of March 31, 2025, we were in compliance with all such financial covenants.

TILC Warehouse Loan Facility – TILC has a $ 800.0 million warehouse loan facility to finance railcars owned by TILC.

During the three months ended March 31, 2025, we had total repayments of $ 18.6 million under the TILC warehouse loan facility.

The entire unused facility amount of $ 234.0 million was available as of March 31, 2025 based on the amount of warehouse-eligible, unpledged equipment.

Advances under the facility bear interest at one-month term SOFR plus a facility margin of 1.75 %, for an all-in interest rate of 6.07 % at March 31, 2025.

Subsequent Events

TRL-2023 Term Loan – On April 30, 2025, Trinity Rail Leasing 2023 LLC (“TRL-2023”), a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, entered into an amended and restated term loan agreement (the “TRL-2023 term loan agreement”) to (i) increase the aggregate amount of the term loan from $ 320.7 million as of March 31, 2025 to $ 1.05 billion;

(ii) extend the maturity date to April 30, 2030;

and (iii) reduce the applicable interest rate to daily simple SOFR plus a facility margin of 1.50 %.

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 to be acquired and owned by TRL-2023.

Net proceeds received from the transaction were used to redeem in full the outstanding borrowings of approximately $ 616.0 million under Trinity Rail Leasing 2017, LLC (“TRL-2017”), as described below;

to repay approximately $ 75.8 million of borrowings under TILC's warehouse loan facility;

and for general corporate purposes.

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

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

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

These charges are reflected in the interest expense, net line of our Consolidated Statements of Operations for the nine months ended September 30, 2024.

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

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

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

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

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

Redemption of TRL-2017 Promissory Notes – On April 30, 2025, with the net proceeds of the TRL-2023 term loan agreement described above, we redeemed in full the TRL-2017 promissory notes (the "2017 Promissory Notes"), of which $ 616.0 million was outstanding at the redemption date.

The interest rate for the 2017 Promissory Notes was at one-month term SOFR plus (1) a benchmark adjustment of 11 basis points and (2) a facility margin of 1.50 %.

Terms and conditions of our other debt, including recourse and non-recourse provisions and scheduled maturities, are described in Note 9 of our 2024 Annual Report on Form 10-K.

The effective tax rates from continuing operations for the three and nine months ended September 30, 2024 were expenses of 27.7 % and 25.1 %, respectively, which differ from the U.S.

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

The effective tax rate from continuing operations for the three months ended September 30, 2023 was an expense of 18.6 %, which differs from the U.S.

statutory rate of 21.0 % primarily due to state income taxes, foreign income taxes, non-deductible executive compensation, excess tax benefits associated with equity-based compensation, taxes not recorded on our non-controlling interests in partially-owned subsidiaries, and the remeasurement of deferred tax liabilities due to state tax law changes and rate reductions enacted during the third quarter of 2023.

The effective tax rate from continuing operations for the nine months ended September 30, 2023 was an expense of 2.8 %, which differs from the U.S.

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

the re-measurement of our net deferred tax liabilities due to the acquisition of a subsidiary and state tax law changes and rate reductions during the year;

changes in our valuation allowances;

state income taxes;

and foreign income taxes.

During the nine months ended September 30, 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 nine months ended September 30, 2023.

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

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

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

The tax provision for the nine months ended September 30, 2023 also reflects a $ 4.0 million tax benefit related to the net impact of an adjustment to valuation allowances, primarily for deferred tax assets in Mexico, state tax loss carryforwards, and federal tax credits.

The total income tax receivable position as of September 30, 2024 was $ 5.0 million primarily for state tax overpayments.

As of September 30, 2024, our income tax payable for federal, state, and foreign income taxes is $ 23.4 million, which is included in accrued liabilities in the Consolidated Balance Sheet.

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

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

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

We believe we are appropriately reserved for any potential matters.

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

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

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

Employee Retirement Plans

Amounts related to our employee retirement plans are as follows:

Three Months Ended September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in millions)

Defined contribution expense $ 3.1 $ 2.5 $ 9.0 $ 7.5

The effective tax rate from continuing operations for the three months ended March 31, 2025 was an expense of 20.3 %, which differs from the U.S.

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

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

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

As of March 31, 2025 and December 31, 2024, our income tax payable for federal, state, and foreign income taxes is $ 26.7 million and $ 16.2 million, respectively, which is included in accrued liabilities in the Consolidated Balance Sheets.

Deferred income taxes related to railcars in our lease fleet were $ 1.2 billion and $ 1.1 billion as of March 31, 2025 and December 31, 2024, respectively.

Accumulated Other Comprehensive Income (Loss)

Changes in AOCI for the nine months ended September 30, 2024 are as follows:

Changes in AOCI for the three months ended March 31, 2025 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, 2024

1 unchanged sentence

Other comprehensive loss, net of tax, before reclassifications ( 2.0 ) — ( 2.0 )

Amounts reclassified from AOCI, net of tax expense of $ 4.2 , $ — , and $ 4.2

( 13.1 ) 0.1 ( 13.0 )

Amounts reclassified from AOCI, net of tax benefit of $ 0.5 , $ — , and $ 0.5

noncontrolling interest ( 0.1 ) — ( 0.1 )

Other comprehensive income (loss) — — —

Balances at September 30, 2024

Balances at March 31, 2025

$ ( 3.0 ) $ ( 1.2 ) $ ( 4.2 )

2 unchanged sentences

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.

Common Stock and Stock-Based Compensation

Stockholders' Equity

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 three and nine months ended September 30, 2024, share repurchases totaled 192,250 shares and 226,150 shares, respectively, at a cost of approximately $ 6.2 million and $ 7.1 million, respectively, resulting in a remaining authorization to repurchase up to $ 242.9 million of our common stock under the share repurchase program as of September 30, 2024.

Certain shares of stock repurchased during September 2024, totaling $ 0.2 million, were cash settled in October 2024 in accordance with normal settlement practices.

There were no shares repurchased during the three and nine months ended September 30, 2023.

Stock-Based Compensation

Stock-based compensation expense totaled approximately $ 6.7 million and $ 17.3 million for the three and nine months ended September 30, 2024, respectively.

Stock-based compensation expense totaled approximately $ 6.1 million and $ 18.8 million for the three and nine months ended September 30, 2023, respectively.

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

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 and 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 .

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 .

Our stock options have contractual terms of ten years and become exercisable over a three-year period.

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

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

Stock-based compensation expense totaled approximately $ 5.3 million and $ 4.7 million for the three months ended March 31, 2025 and 2024, respectively.

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

The following table summarizes stock-based compensation awards granted during the three months ended March 31, 2025:

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

Restricted stock units 1,338 $ 34.39

Restricted stock awards 15,903 $ 30.75

Performance units 96,775 $ 44.63

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

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

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

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

For the performance units granted during the three months ended March 31, 2025 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.

Earnings Per Common Share

2 unchanged sentences

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.

The Company has certain unvested restricted stock awards 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.

1 unchanged sentence

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

Three Months Ended September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended

(in millions, except per share amounts)

2 unchanged sentences

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

36.7 24.5 120.8 51.3

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

5 unchanged sentences

Diluted weighted average shares outstanding

84.1 83.5 83.9 83.5

Basic earnings per common share:

1 unchanged sentence

Loss from discontinued operations ( 0.02 ) ( 0.05 )

Basic net income attributable to Trinity Industries, Inc.

Net income attributable to Trinity Industries, Inc.

$ 0.27 $ 0.29

2 unchanged sentences

Loss from discontinued operations ( 0.02 ) ( 0.05 )

Diluted net income attributable to Trinity Industries, Inc.

Net income attributable to Trinity Industries, Inc.

$ 0.26 $ 0.28

2 unchanged sentences

Antidilutive stock options — —

Earnings per common share is calculated independently for each component and may not sum to total net income attributable to Trinity Industries, Inc.

per common share due to rounding.

Contingencies

Highway products litigation

We previously reported the filing of a False Claims Act (“FCA”) complaint in the United States District Court for the Eastern District of Texas, Marshall Division (“District Court”) styled Joshua Harman, on behalf of the United States of America, Plaintiff/Relator v.

Trinity Industries, Inc., Defendant , Case No.

2:12-cv-00089-JRG (E.D.

In this case, in which the U.S.

Government declined to intervene, the relator, Mr.

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

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

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

On January 7, 2019, the United States Supreme Court denied Mr.

Harman's petition for certiorari seeking review of the Fifth Circuit's decision.

The denial of Mr.

Harman's petition ended this action.

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 were both (i) manufactured prior to December 31, 2021, and (ii) sold in the United States on or prior to April 30, 2022, or related warranty obligations with respect thereto.

State actions

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

Trinity Industries, Inc.

and Trinity Highway Products, LLC , Case No.

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

In this matter, Mr.

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

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

On February 7, 2024, the trial court granted the Company's motion for summary judgment.

On July 11, 2024, the trial court denied Mr.

Harman's and the Commonwealth of Virginia’s motion for reconsideration of the order granting 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.

Harman’s appeal remains pending.

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

Trinity Industries, Inc.

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

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

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

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

Harman’s motion.

On March 9, 2022, Mr.

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

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

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

On August 9, 2022, Mr.

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

Harman's motion for reconsideration.

Harman's appeal remains pending.

The Company believes that it has substantial defenses in these matters and intends to vigorously defend against all allegations.

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

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".

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.

As previously disclosed, on February 3, 2023, a Norfolk Southern Railway freight train derailed 38 railcars in East Palestine, Ohio.

TILC has been named in various actions associated with this incident.

TILC was the owner of one tank car cited in these actions, which was leased to a third party, who is also a third-party defendant in these matters.

Developments in these proceedings since the filing of our 2024 Annual Report on Form 10-K include those described below.

On March 24, 2025, the trial court denied Norfolk Southern’s Motion for Entry of Partial Final Judgment in the case styled The State of Ohio, ex rel., Dave Yost, Ohio Attorney General, and the United States of America, Plaintiffs v.

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

4:23-cv-00517.

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

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

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

and equitable contribution.

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

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

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").

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

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

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

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

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

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

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

On April 9, 2024, plaintiffs and Norfolk Southern announced a settlement in 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.

The previously disclosed litigation styled as Josh Hickman, et al.

Norfolk Southern Railway Company, et al.

, has been assigned Case No.

25CV-01-859, in the Court of Common Pleas, Franklin County, Ohio.

The previously disclosed litigation styled as Gregory Taylor, et al.

Norfolk Southern Railway Company, et al.

, has been assigned Case No.

25CV-02-858, in the Court of Common Pleas, Franklin County, Ohio.

Previously disclosed litigation styled as Richard Tsai, et al.

Norfolk Southern Corporation, et al.

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 March 8, 2024, a lawsuit was filed against TILC titled Patricia Almasy et al.

, has been assigned Case No.

CV25111454, in the Court of Common Pleas, Cuyahoga County, Ohio.

On February 3, 2025, the same plaintiffs filed an action styled as Richard Tsai, et al.

Norfolk Southern Corporation, et al.

4:24-cv-00452, in the United States District Court for the Northern District of Ohio (“Almasy Lawsuit”).

Plaintiffs assert claims against Norfolk Southern Corporation, Norfolk Southern Railway Company, Oxy Vinyls, LP, GATX Corporation, General American Marks Company, and TILC.

Plaintiffs assert claims against TILC for negligence, gross negligence, future health monitoring, and willful and wanton conduct.

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 this lawsuit.

On March 13, 2024, this lawsuit was consolidated into the Consolidated Class Action lawsuit.

2025-10140, in the Court of Common Pleas, Lawrence County, Pennsylvania, in which TILC, among others, was named as a defendant.

On April 2, 2025, Plaintiffs voluntarily dismissed the Lawrence County, Pennsylvania lawsuit.

On April 3, 2025, Plaintiffs also voluntarily dismissed previously disclosed litigation styled as Richard Tsai, et al.

Norfolk Southern Corporation, et al.

250200416 in Philadelphia County, Pennsylvania.

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.

3 unchanged sentences

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 the buyer for certain liabilities related to the highway products business, including those liabilities 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.

There have been no significant developments in such proceedings since those previously described in Note 15 of our 2024 Annual Report on Form 10-K.

Other matters

2 unchanged sentences

The range of reasonably possible losses for such matters is $ 7.5 million to $ 18.7 million.

This range includes any amounts related to the matters described above in the section titled “Highway products litigation." At September 30, 2024, total accruals of $ 10.7 million, including environmental and workplace matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheets.

At March 31, 2025, total accruals of $ 9.0 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.

4 unchanged sentences

We believe that we are currently in substantial compliance with environmental and workplace laws and regulations.

On January 16, 2024, a fire damaged a portion of the Company's facility in Cartersville, Georgia.

We have incurred costs related to cleanup and damage remediation activities in order for the facility to resume limited operations, and we returned to normal production levels as of September 30, 2024.

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

Accordingly, at March 31, 2024, we recorded an insurance receivable of approximately $ 1.0 million for property damage recoveries, which was collected in the third quarter of 2024.

To date, we have received total advanced payments from insurance of approximately $ 3.4 million, which includes $ 1.7 million for reimbursement of cleanup and damage remediation activities and the $ 1.0 million insurance receivable described above.

As of September 30, 2024, we have utilized $ 0.7 million of the advanced payments from insurance towards new capital expenditures in support of the reconstruction efforts.

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

Additionally, the Company may be entitled to business interruption proceeds related to the event.

We will not record these recoveries until settlements have been reached with the insurance company.

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

What changed 10-Q

Item 1. Financial Statements