What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-01 · 141 added, 82 removed, 324 unchanged (41% of the section changed)

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Demand for many of our railcar products and services is correlated to changes in North American industrial production.

We are actively monitoring trade policy and tariff announcements and the potential impacts to our business.

Uncertainty in the macroeconomic environment is negatively impacting our results of operations and demand for our products and services, and is likely to continue.

We continue to actively monitor trade policy and tariff announcements and the potential impacts to our business.

Uncertainty in the macroeconomic environment is negatively impacting our results of operations and demand for new railcars.

We remain focused on minimizing impacts to our supply chain resulting from these announcements and any future developments.

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Financial and Operational Highlights

• Our revenues for the three months ended March 31, 2025 were $585.4 million, representing a decrease of 27.7%, compared to the three months ended March 31, 2024.

Our operating profit for the three months ended March 31, 2025 was $99.8 million, representing a decrease of 13.4%, compared to $115.2 million for the three months ended March 31, 2024.

• The Leasing Group's lease fleet of 110,150 company-owned railcars was 96.8% utilized as of March 31, 2025, compared to a lease fleet utilization of 97.5% on 110,205 company-owned railcars as of March 31, 2024.

• Our revenues for the six months ended June 30, 2025 were $1,091.6 million, representing a decrease of 33.9%, compared to the six months ended June 30, 2024.

Our operating profit for the six months ended June 30, 2025 was $195.2 million, representing a decrease of 24.1%, compared to $257.1 million for the six months ended June 30, 2024.

• The Leasing Group's lease fleet of 111,545 company-owned railcars was 96.8% utilized as of June 30, 2025, compared to a lease fleet utilization of 96.9% on 109,365 company-owned railcars as of June 30, 2024.

Our company-owned lease fleet includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements.

• For the three months ended March 31, 2025, we made a net fleet investment of approximately $86.5 million, which primarily includes new railcar additions, railcar modifications, and other betterments, net of deferred profit, as well as secondary market purchases;

• For the six months ended June 30, 2025, we made a net fleet investment of approximately $232.7 million, which primarily includes new railcar additions, railcar modifications, and other betterments, net of deferred profit, as well as secondary market purchases;

and is net of proceeds from lease portfolio sales.

• The total value of the new railcar backlog at March 31, 2025 was $1.9 billion, compared to $2.9 billion at March 31, 2024.

The Rail Products Group received orders for 695 railcars and delivered 3,060 railcars in the three months ended March 31, 2025, in comparison to orders for 1,880 railcars and deliveries of 4,695 railcars in the three months ended March 31, 2024.

◦ Deliveries in 2024 included approximately 1,200 railcar shipments that were delayed at the end of 2023 due to the U.S.-Mexico border closure and delivered during the first quarter of 2024.

• The total value of the new railcar backlog at June 30, 2025 was $2.0 billion, compared to $2.7 billion at June 30, 2024.

The Rail Products Group received orders for 3,005 railcars and deliveries of 4,875 railcars in the six months ended June 30, 2025, in comparison to orders for 4,375 railcars and deliveries of 9,450 railcars in the six months ended June 30, 2024.

◦ Deliveries in the six months ended June 30, 2024 included approximately 1,300 railcar shipments that were delayed at the end of 2023 due to the U.S.-Mexico border closure and delivered during the first half of 2024.

See "Consolidated Results of Operations" and "Segment Discussion" below for additional information regarding our operating results.

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See the Non-GAAP Financial Measures section within this Form 10-Q for a reconciliation to the most directly comparable GAAP measure and why management believes this measure is useful to management and investors.

Dollar amounts are presented for the three months ended March 31, 2025 and 2024.

Litigation Updates

See Note 13 of the Consolidated Financial Statements for an update on the status of certain litigation.

Subsequent Events

On April 30, 2025, Trinity Rail Leasing 2023 LLC (“TRL-2023”), a limited purpose, indirect wholly-owned subsidiary of the Company owned through Trinity Industries Leasing Company (“TILC”), entered into an amended and restated 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;

Dollar amounts are presented for the six months ended June 30, 2025 and 2024.

Capital Structure Updates

TRL-2023 Term Loan – In April 2025, Trinity Rail Leasing 2023 LLC (“TRL-2023”), a limited purpose, indirect wholly-owned subsidiary of the Company owned through Trinity Industries Leasing Company (“TILC”), entered into an amended and restated 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;

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The interest rate for the TRL-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%.

See Note 8 of the Consolidated Financial Statements for additional information regarding these debt transactions.

Litigation Updates

See Note 13 of the Consolidated Financial Statements for an update on the status of certain litigation.

Consolidated Results of Operations

The following table summarizes our consolidated results of operations for the three months ended March 31, 2025 and 2024:

The following table summarizes our consolidated results of operations for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in millions)

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Income from continuing operations $ 21.9 $ 58.1 $ 50.9 $ 89.8

The tables below present revenues by segment for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025

The tables below present revenues by segment for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, 2025

Revenues Percent

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Consolidated Total $ 506.2 $ — $ 506.2 (39.8) %

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

External Intersegment Total

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Consolidated Total $ 841.4 $ — $ 841.4

Six Months Ended June 30, 2025

Revenues Percent

External Intersegment Total Change

(in millions)

Railcar Leasing and Services Group $ 589.3 $ 0.5 $ 589.8 4.1 %

Rail Products Group 502.3 211.7 714.0 (45.1) %

Segment Totals 1,091.6 212.2 1,303.8 (30.2) %

Eliminations — (212.2) (212.2)

Consolidated Total $ 1,091.6 $ — $ 1,091.6 (33.9) %

Six Months Ended June 30, 2024

External Intersegment Total

(in millions)

Railcar Leasing and Services Group $ 564.8 $ 1.8 $ 566.6

Rail Products Group 1,086.2 215.4 1,301.6

Segment Totals 1,651.0 217.2 1,868.2

Eliminations — (217.2) (217.2)

Consolidated Total $ 1,651.0 $ — $ 1,651.0

Operating Costs

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and gains or losses on property disposals.

Operating costs by segment for the three months ended March 31, 2025 and 2024 were as follows:

Operating costs by segment for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in millions)

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Consolidated Total $ 410.8 $ 699.5 $ 896.4 $ 1,393.9

(1) Includes gains on lease portfolio sales of $5.9 million and $2.1 million for the three months ended March 31, 2025 and 2024, respectively.

(1) Includes gains on lease portfolio sales of $7.8 million and $22.7 million for the three months ended June 30, 2025 and 2024, respectively.

Includes gains on lease portfolio sales of $13.7 million and $24.8 million for the six months ended June 30, 2025 and 2024, respectively.

Operating Profit

Operating profit by segment for the three months ended March 31, 2025 and 2024 was as follows:

Operating profit by segment for the three and six months ended June 30, 2025 and 2024 was as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in millions)

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Discussion of Consolidated Results

Revenues – Our revenues for the three months ended March 31, 2025 were $585.4 million, representing a decrease of $224.2 million, or 27.7%, over the prior year period primarily due to lower external deliveries, including sustainable railcar conversions, in the Rail Products Group.

Cost of revenues – Our cost of revenues for the three months ended March 31, 2025 was $443.2 million, representing a decrease of $201.7 million, or 31.3%, over the prior year period primarily due to lower external deliveries, including sustainable railcar conversions, in the Rail Products Group.

Selling, engineering, and administrative expenses – Selling, engineering, and administrative expenses for the three months ended March 31, 2025 were $50.0 million, representing a decrease of $2.3 million, or 4.4%, when compared to the prior year period primarily due to lower employee-related costs, including incentive-based compensation, and lower consulting costs.

Gains on dispositions of property – Gains on dispositions of property increased by $4.8 million for the three months ended March 31, 2025, when compared to the prior year period primarily due to higher gains on lease portfolio sales.

Operating profit – Operating profit for the three months ended March 31, 2025 totaled $99.8 million, representing a decrease of $15.4 million, or 13.4%, from the prior year period primarily due to lower external deliveries and costs associated with workforce reductions in the Rail Products Group, partially offset by higher lease rates and higher gains on lease portfolio sales.

Revenues – Our revenues for the three months ended June 30, 2025 were $506.2 million, representing a decrease of $335.2 million, or 39.8%, over the prior year period.

Our revenues for the six months ended June 30, 2025 were $1,091.6 million, representing a decrease of $559.4 million, or 33.9%, over the prior year period.

These decreases were primarily due to lower external deliveries in the Rail Products Group.

Cost of revenues – Our cost of revenues for the three months ended June 30, 2025 was $372.8 million, representing a decrease of $289.6 million, or 43.7%, over the prior year period.

Our cost of revenues for the six months ended June 30, 2025 was $816.0 million, representing a decrease of $491.3 million, or 37.6%, over the prior year period.

These decreases were primarily due to lower external deliveries in the Rail Products Group.

Selling, engineering, and administrative expenses – Selling, engineering, and administrative expenses for the three months ended June 30, 2025 were $49.4 million, representing a decrease of $11.9 million, or 19.4%, when compared to the prior year period.

Selling, engineering, and administrative expenses for the six months ended June 30, 2025 were $99.4 million, representing a decrease of $14.2 million, or 12.5%, when compared to the prior year period.

These decreases were primarily due to lower employee-related costs, including incentive-based compensation, and lower consulting costs.

Gains on dispositions of property – Gains on dispositions of property decreased by $12.8 million and $8.0 million for the three and six months ended June 30, 2025, respectively, when compared to the prior year periods primarily due to lower gains on lease portfolio sales.

Operating profit – Operating profit for the three months ended June 30, 2025 totaled $95.4 million, representing a decrease of $46.5 million, or 32.8%, from the prior year period.

Operating profit for the six months ended June 30, 2025 totaled $195.2 million, representing a decrease of $61.9 million, or 24.1%, from the prior year period.

These decreases were primarily due to lower external deliveries in the Rail Products Group, lower gains on lease portfolio sales, and costs associated with workforce reductions, partially offset by lower selling, engineering, and administrative expenses.

For further information regarding the operating results of individual segments, see "Segment Discussion" below.

Interest expense, net – Interest expense, net for the three months ended March 31, 2025 totaled $66.1 million, compared to $69.1 million for the three months ended March 31, 2024, primarily driven by lower average debt and lower interest rates in 2025.

Other, net – Other, net for the three months ended March 31, 2025 resulted in income of $2.7 million, compared to expense of $3.4 million for the three months ended March 31, 2024.

Other, net for the three months ended March 31, 2024 includes a fee related to the execution of back-to-back interest rate caps associated with the TILC warehouse loan facility.

The changes in other, net (income) expense also include the remeasurement impact of foreign currency fluctuations related to the Mexican peso.

Income taxes – 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.

Interest expense, net – Interest expense, net for the three months ended June 30, 2025 totaled $67.7 million, compared to $70.1 million for the three months ended June 30, 2024 primarily driven by lower interest rates and lower average debt in 2025.

Interest expense, net for the six months ended June 30, 2025 totaled $133.8 million, compared to $139.2 million for the six months ended June 30, 2024 primarily driven by lower interest rates, partially offset by higher average debt in 2025.

Additionally, interest expense, net includes a loss on extinguishment of debt of $0.8 million for the three and six months ended June 30, 2025, compared to $1.5 million for the three and six months ended June 30, 2024.

Income taxes – The effective tax rates from continuing operations for the three and six months ended June 30, 2025 were expenses of 15.8% and 18.4%, respectively, which differ from the U.S.

statutory rate of 21.0% primarily due to the benefit of tax credits purchased at a discount and the benefit of noncontrolling interest for which we do not provide income taxes, partially offset by state income taxes and other permanent differences.

See Note 9 for further information regarding the purchase of transferable tax credits.

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

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

Segment Discussion

Railcar Leasing and Services Group

Three Months Ended March 31,

2025 2024 Percent

($ in millions) Change

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

2025 2024 Percent 2025 2024 Percent

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

Leasing and management $ 233.5 $ 221.9 5.2 % $ 452.5 $ 430.9 5.0 %

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in millions)

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Operating profit margin on lease portfolio sales 26.6 % 14.0 % 21.7 % 13.3 %

Total revenues for the Railcar Leasing and Services Group were relatively flat for the three months ended March 31, 2025 compared to the prior year period.

Leasing and management revenues for the three months ended March 31, 2025 were favorably impacted primarily by higher lease rates, when compared to the three months ended March 31, 2024.

Total revenues for the Railcar Leasing and Services Group increased by 7.5% and 4.1% for the three and six months ended June 30, 2025, respectively, compared to the prior year periods.

Leasing and management revenues increased by 5.2% and 5.0% for the three and six months ended June 30, 2025, respectively, when compared to the prior year periods, primarily due to higher lease rates.

Our maintenance services business is primarily dedicated to servicing our lease fleet.

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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 maintenance services revenues line above and are not eliminated in consolidation.

Revenues in our maintenance services business decreased for the three months ended March 31, 2025 when compared to the prior year period as a result of a lower volume of repairs completed for third parties.

Cost of revenues for the Railcar Leasing and Services Group increased by 1.3% for the three months ended March 31, 2025 compared to the prior year period primarily due to higher maintenance and compliance costs for the lease fleet, partially offset by a lower volume of external repairs, including the impact of weather disruptions, in our maintenance services business.

Leasing Group operating profit for the three months ended March 31, 2025 increased by 4.2% when compared to the prior year period primarily due to higher lease rates and higher gains on lease portfolio sales, partially offset by a lower volume of external repairs in the maintenance services business.

Revenues in our maintenance services business increased by 21.0% and 3.8% for the three and six months ended June 30, 2025, respectively, when compared to the prior year periods as a result of favorable pricing on, and the mix of, repairs completed for third parties.

The increase in revenues for the six months ended June 30, 2025 was partially offset by a lower volume of external repairs.

Cost of revenues for the Railcar Leasing and Services Group increased by 13.7% and 7.3% for the three and six months ended June 30, 2025, respectively, compared to the prior year periods primarily due to higher maintenance and compliance costs for the lease fleet, as well as the mix of external repairs in our maintenance services business.

Cost of revenues for the six months ended June 30, 2025 was partially offset by a lower volume of external repairs, including the impact of weather disruptions, in our maintenance services business.

Leasing Group operating profit decreased by 7.3% and 2.3% for the three and six months ended June 30, 2025, respectively, when compared to the prior year periods.

These decreases were primarily due to lower gains on lease portfolio sales and higher maintenance and compliance costs for the lease fleet, partially offset by higher lease rates, as well as favorable pricing on external repairs in the maintenance services business.

The Leasing Group generally uses its non-recourse warehouse loan facility or cash to provide initial funding for a portion of the purchase price of the railcars.

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Information regarding the Leasing Group’s lease fleet is as follows:

March 31, 2025 March 31, 2024

June 30, 2025 June 30, 2024

Number of railcars:

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Fleet utilization 96.8 % 96.9 %

(1) Includes 2,240 railcars and 2,490 railcars under leased-in arrangements as of March 31, 2025 and 2024, respectively.

(1) Includes 2,230 railcars and 2,490 railcars under leased-in arrangements as of June 30, 2025 and 2024, respectively.

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

Rail Products Group

Three Months Ended March 31,

2025 2024 Percent

($ in millions) Change

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

2025 2024 Percent 2025 2024 Percent

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

Rail products (1)

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Operating profit margin 3.0 % 7.9 % 4.9 % 7.2 %

(1) Includes sustainable railcar conversion revenues of $50.2 million, representing 675 railcars, for the three months ended March 31, 2024.

There were no sustainable railcar conversion revenues for the three months ended March 31, 2025.

Revenues and cost of revenues for the Rail Products Group decreased for the three months ended March 31, 2025 by 37.0% and 37.1%, respectively, when compared to the prior year period primarily as a result of lower deliveries, including sustainable railcar conversions.

Operating profit for the Rail Products Group decreased for the three months ended March 31, 2025 by 40.9% when compared to the prior year period primarily due to lower deliveries and costs associated with workforce reductions.

(1) Includes sustainable railcar conversion revenues of $2.1 million, representing 25 railcars, for the three and six months ended June 30, 2025.

Includes sustainable railcar conversion revenues of $14.4 million, representing 195 railcars, for the three months ended June 30, 2024 and sustainable railcar conversion revenues of $64.6 million, representing 870 railcars, for the six months ended June 30, 2024.

Revenues for the Rail Products Group decreased for the three and six months ended June 30, 2025 by 53.7% and 45.1%, respectively, when compared to the prior year periods.

Cost of revenues for the Rail Products Group decreased for the three and six months ended June 30, 2025 by 51.8% and 44.2%, respectively, when compared to the prior year periods.

These decreases were primarily due to lower deliveries.

Operating profit for the Rail Products Group decreased for the three and six months ended June 30, 2025 by 82.3% and 63.1%, respectively, when compared to the prior year periods primarily due to lower deliveries, reduced absorption due to lower production volumes, and costs associated with workforce reductions.

Information related to our Rail Products Group backlog of new railcars is set forth below.

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Total $ 1,959.8 $ 2,683.2 (27.0) %

Three Months Ended

Three Months Ended June 30, Six Months Ended

2025 2024 2025 2024 Percent

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Average selling price in ending backlog $ 138,649 $ 128,907 7.6 %

(1) Deliveries for the three months ended March 31, 2024 included approximately 1,200 railcar shipments that were delayed at the end of 2023 due to the U.S.-Mexico border closure and delivered during the first quarter of 2024.

(1) Deliveries for the six months ended June 30, 2024 included approximately 1,300 railcar shipments that were delayed at the end of 2023 due to the U.S.-Mexico border closure and delivered during the first half of 2024.

Total backlog dollars decreased by 27.0% when compared to the prior year period.

We expect to deliver approximately 40.3% of our railcar backlog value during the remaining nine months of 2025 and 19.7% during 2026, with the remainder to be delivered through 2028.

We expect to deliver approximately 36.7% of our railcar backlog value during the remaining six months of 2025 and 24.7% during 2026, with the remainder to be delivered through 2028.

The orders in our backlog from the Leasing Group are fully supported by lease commitments with external customers.

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Transactions between the Rail Products Group and the Leasing Group are as follows:

Three Months Ended

Three Months Ended June 30, Six Months Ended

2025 2024 2025 2024

($ in millions)

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Parts & components $ 8.4 $ 8.8 $ 16.9 $ 15.3

Deferred profit (loss) $ 6.2 $ 2.1

Deferred profit $ 5.6 $ 3.5 $ 11.8 $ 5.6

Number of new railcars (in units) 530 505 1,360 1,600

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Corporate and other

Three Months Ended March 31,

2025 2024 Percent

(in millions) Change

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

2025 2024 Percent 2025 2024 Percent

(in millions) Change (in millions) Change

Operating costs:

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$ 28.8 $ 33.5 (14.0) % $ 53.2 $ 60.0 (11.3) %

Gains on dispositions of property (2.3) (0.2) * (2.3) (0.2) *

Operating loss $ (26.5) $ (33.3) (20.4) % $ (50.9) $ (59.8) (14.9) %

Selling, engineering, and administrative expenses for the three months ended March 31, 2025 decreased by 7.9% when compared to the prior year period primarily from lower consulting costs and lower employee-related costs, including incentive-based compensation.

Selling, engineering, and administrative expenses for the three and six months ended June 30, 2025 decreased by 14.0% and 11.3%, respectively, when compared to the prior year periods primarily from lower employee-related costs, including incentive-based compensation, and lower consulting costs, partially offset by costs associated with workforce reductions.

Total operating costs for all periods presented were favorably impacted by gains associated with the disposition of non-operating facilities.

Liquidity and Capital Resources

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Debt instruments that we have utilized include the TILC warehouse loan facility, senior notes, convertible subordinated notes, asset-backed securities, non-recourse promissory notes, and our revolving credit facility.

As of March 31, 2025, we have total committed liquidity of $920.2 million.

As of June 30, 2025, we have total committed liquidity of $791.8 million.

Our total available liquidity includes:

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We believe we have access to adequate capital resources to fund operating requirements and are an active participant in the capital markets.

The following table summarizes our cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024:

Three Months Ended

On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted.

The Act includes multiple business tax provisions, including the reinstatement of 100% bonus depreciation and a change in the calculation of deductible interest expense.

We are currently evaluating the impact of these provisions on our overall financial position;

however, we preliminarily expect a positive impact on our operating cash flows as a result of the expected refund of estimated tax payments previously made, as well as lower cash tax outlays in both the current and future years.

Liquidity Highlights

TRL-2023 Term Loan – In April 2025, TRL-2023 entered into an amended and restated 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%.

Net proceeds received from the transaction were used to redeem the outstanding borrowings of TRL-2017, to repay borrowings under TILC's warehouse loan facility, and for general corporate purposes.

Redemption of TRL-2017 Promissory Notes – In April 2025, we redeemed in full the TRL-2017 promissory notes, of which $616.0 million was outstanding at the redemption date.

The interest rate for the TRL-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%.

See Note 8 of the Consolidated Financial Statements for additional information regarding these debt transactions.

The following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024:

Six Months Ended

(in millions)

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Operating Activities .

Net cash provided by operating activities from continuing operations for the three months ended March 31, 2025 was $78.4 million compared to net cash provided by operating activities from continuing operations of $56.5 million for the three months ended March 31, 2024.

Net cash provided by operating activities from continuing operations for the six months ended June 30, 2025 was $141.9 million compared to net cash provided by operating activities from continuing operations of $299.7 million for the six months ended June 30, 2024.

The changes in our operating assets and liabilities are as follows:

Three Months Ended

Six Months Ended

(in millions)

(Increase) decrease in receivables, inventories, and other assets $ 76.0 $ 36.5

(Increase) decrease in income tax receivable (18.0) 0.6

Increase (decrease) in accounts payable, accrued liabilities, and other liabilities (109.9) 32.4

Changes in operating assets and liabilities $ (51.9) $ 69.5

The changes in our operating assets and liabilities resulted in a net use of $19.5 million for the three months ended March 31, 2025, as compared to a net use of $52.3 million for the three months ended March 31, 2024.

The changes in operating assets and liabilities were impacted primarily by higher receivables balances associated with higher deliveries in the prior year period and by payments of incentive-based compensation during the three months ended March 31, 2025 that were accrued as of December 31, 2024.

The changes in our operating assets and liabilities resulted in a net use of $51.9 million for the six months ended June 30, 2025, as compared to a net source of $69.5 million for the six months ended June 30, 2024.

The changes in operating assets and liabilities were impacted primarily by the purchase of tax credits for $38.4 million in the current year period, payments of incentive-based compensation during the six months ended June 30, 2025 that were accrued as of December 31, 2024, and the timing of customer deposits for new railcar orders.

Investing Activities.

Net cash used in investing activities from continuing operations for the three months ended March 31, 2025 was $91.6 million compared to $124.0 million of net cash used in investing activities from continuing operations for the three months ended March 31, 2024.

Net cash used in investing activities for the six months ended June 30, 2025 was $242.1 million compared to $55.9 million of net cash used in investing activities for the six months ended June 30, 2024.

Significant investing activities are as follows:

• We made a net fleet investment of $86.5 million during the three months ended March 31, 2025, compared to $123.3 million in the prior year period primarily due to the timing of fleet additions.

• We made a net fleet investment of $232.7 million during the six months ended June 30, 2025, compared to $46.0 million in the prior year period primarily due to higher proceeds from lease portfolio sales in the prior year period and the timing of fleet additions.

Our investment in the lease fleet primarily includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, as well as secondary market purchases;

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Financing Activities.

Net cash used in financing activities during the three months ended March 31, 2025 was $124.2 million compared to $71.8 million of net cash provided by financing activities for the three months ended March 31, 2024.

Net cash provided by financing activities during the six months ended June 30, 2025 was $44.9 million compared to $108.7 million of net cash used in financing activities for the six months ended June 30, 2024.

Significant financing activities are as follows:

• During the three months ended March 31, 2025, we had total debt repayments of $77.3 million related to normal amortization activity.

During the three months ended March 31, 2024, we had total borrowings of $909.9 million and total repayments of $803.8 million, for net proceeds of $106.1 million, primarily from debt proceeds to support our investment in the lease fleet and for general corporate purposes.

• We paid $24.6 million and $23.0 million in dividends to our common stockholders during the three months ended March 31, 2025 and 2024, respectively.

• During the three months ended March 31, 2025, we repurchased common stock totaling $8.2 million, resulting in a remaining authorization to repurchase up to $220.8 million of our common stock under the share repurchase program as of March 31, 2025.

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

• During the six months ended June 30, 2025, we had total debt repayments of $904.9 million and total borrowings of $1,065.0 million, for net proceeds of $160.1 million, primarily from debt proceeds to support our investment in the lease fleet and for general corporate purposes.

During the six months ended June 30, 2024, we had total repayments of $1,759.9 million and total borrowings of $1,722.2 million, for net repayments of $37.7 million, primarily from the redemption of corporate debt, partially offset by debt proceeds to support our investment in the lease fleet and for general corporate purposes.

• We paid $50.4 million and $47.2 million in dividends to our common stockholders during the six months ended June 30, 2025 and 2024, respectively.

• During the six months ended June 30, 2025, we repurchased common stock totaling $39.0 million, resulting in a remaining authorization to repurchase up to $189.8 million of our common stock under the share repurchase program as of June 30, 2025.

Certain shares of stock repurchased during June 2025, totaling $0.2 million, were cash settled in July 2025 in accordance with normal settlement practices.

During the six months ended June 30, 2024, we repurchased common stock totaling $0.9 million under the share repurchase program.

Current Debt Obligations

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Ratio Covenant Actual at

March 31, 2025

June 30, 2025

Maximum leverage (1)

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No less than 2.25 to 1.00 5.98

(1) Defined as the ratio of consolidated total indebtedness to consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") for the Borrower and its restricted subsidiaries for the period of four consecutive quarters ending with March 31, 2025.

(2) Defined as the ratio of the difference of (A) consolidated EBITDA less (B) consolidated capital expenditures – operating and administrative to consolidated interest expense to the extent paid in cash, in each case for the Borrower and its restricted subsidiaries for the period of four consecutive quarters ending with March 31, 2025.

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

As of June 30, 2025, we were in compliance with all such financial covenants.

Please refer to Note 8 of the Consolidated Financial Statements for a description of our current debt obligations.

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Off Balance Sheet Arrangements

As of March 31, 2025, we had outstanding letters of credit issued under our revolving credit facility in an aggregate amount of $8.7 million, which support performance bonds related to certain railcar orders.

As of June 30, 2025, we had outstanding letters of credit issued under our revolving credit facility in an aggregate amount of $4.4 million, which support performance bonds related to certain railcar orders.

See Note 8 of the Consolidated Financial Statements for further information about our corporate revolving credit facility.

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This measure is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus net gains on lease portfolio sales and is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following table.

Three Months Ended

Six Months Ended

(in millions)

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Contractual Obligations and Commercial Commitments

As of March 31, 2025, there have been no material changes to our contractual obligations from December 31, 2024.

Except as described below, as of June 30, 2025, there have been no material changes to our contractual obligations from December 31, 2024.

• In April 2025, we entered into an amended and restated term loan agreement to increase the aggregate amount of the TRL-2023 term loan from $323.4 million as of December 31, 2024 to $1.05 billion and to extend the maturity date to April 30, 2030.

• In April 2025, we redeemed in full the TRL-2017 promissory notes, of which $632.8 million was outstanding as of December 31, 2024.

Recent Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis