DALLAS--(BUSINESS WIRE)--
Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for
the first quarter ended March 31, 2018, including the following
highlights:
-
Earnings per common diluted share of $0.26 compared to $0.30 per share
in 2017
-
Earnings per share includes $7.9 million, or $0.04 per share, of
transaction costs incurred related to the planned spin-off
transaction, resulting in adjusted earnings per common diluted share
of $0.30
-
Railcar deliveries and orders totaling 5,725 and 4,705 railcars,
respectively, in the Rail Group, compared to 3,770 and 970 railcars,
respectively, in 2017
- Inland Barge Group receives orders with a value of $57.1 million
-
Repurchases of common stock totaling $50.0 million under the current
authorization
-
Issues notice to call $449.4 million convertible subordinated notes on
June 1, 2018
-
Anticipates full year 2018 earnings per common diluted share of
between $1.20 and $1.40, excluding spin-off related transaction costs
of approximately $30 to $35 million, compared to previous earnings
guidance of between $1.15 and $1.35 per share, excluding spin-off
related transaction costs of approximately $25 million
Consolidated Results
Trinity Industries, Inc. reported net income attributable to Trinity
stockholders of $40.2 million, or $0.26 per common diluted share, for
the first quarter ended March 31, 2018. Net income for the same quarter
of 2017 was $46.0 million, or $0.30 per common diluted share. Revenues
for the first quarter of 2018 totaled $831.3 million compared to
revenues of $877.3 million for the same quarter of 2017. In the first
quarter, the Company incurred approximately $7.9 million of transaction
costs, or $0.04 per share, related to the expected spin-off transaction.
First quarter 2018 results benefitted from a lower effective tax rate of
26.2% due primarily to the Tax Cut and Jobs Act (“the Act”) compared to
28.7% in the same quarter of 2017 which benefitted from the settlement
of certain tax audits. For the full year 2018, the Company continues to
expect a 24.0% effective tax rate compared to 36.2% in full year 2017,
excluding the positive one-time impact from the Act in the fourth
quarter of 2017.
“We are off to a good start in 2018, in what will be a transformational
year for our Company,” said Timothy R. Wallace, Trinity’s Chairman, CEO
and President. “Our financial performance for the first quarter reflects
varying conditions across our businesses. We achieved year-over-year
increases in operating profit for the Rail and Construction Products
Groups. Our railcar and inland barge manufacturing businesses received a
moderate level of orders during the quarter, a positive outcome in what
continues to be challenging, but improving, market conditions.”
Mr. Wallace added, “I continue to be pleased with the progress we are
making on our planned spin-off of our infrastructure-related businesses
to Trinity’s stockholders, and we remain on track for an expected
transaction close in the fourth quarter of this year.”
Quarterly Business Group Results
In the first quarter of 2018, the Rail Group reported revenues of $598.5
million compared to revenues of $478.3 million in the first quarter of
2017. Operating profit and profit margin for the Rail Group were $58.9
million and 9.8% in the first quarter of 2018 compared to $50.5 million
and 10.6% in the first quarter of 2017. The increases in revenues and
operating profit were primarily due to higher railcar deliveries. The
Rail Group delivered 5,725 railcars and received orders for 4,705
railcars during the first quarter of 2018 compared to 3,770 and 970
railcars, respectively, in the same quarter last year. The railcar
backlog in the Rail Group was $2.1 billion as of March 31, 2018,
representing 21,365 railcars, compared to a railcar backlog of $2.2
billion as of December 31, 2017, representing 22,585 railcars.
The Railcar Leasing and Management Services Group (“Leasing Group”)
reported revenues and operating profit of $174.6 million and $71.1
million, respectively, in the first quarter of 2018, a decrease of 2.4%
and 16.4%, respectively, compared to the same quarter of 2017. The
decrease in revenues was primarily due to lower average lease rates and
utilization partially offset by additions to the lease fleet. There were
no revenues from sales of railcars owned one year or less reported in
either period. The decrease in operating profit was primarily the result
of lower revenues and higher fleet maintenance and compliance expenses
partially offset by $2.1 million of profit from railcar sales owned for
more than one year that are not included in revenues.
Total proceeds from the sale of leased railcars owned for more than one
year were $15.5 million in the first quarter of 2018 compared to no
sales of leased railcars in the first quarter of 2017. Supplemental
information for the Leasing Group is provided in the accompanying tables.
The Inland Barge Group reported revenues of $30.8 million in the first
quarter of 2018 compared to revenues of $62.7 million in the first
quarter of 2017. Operating loss for this Group was $0.7 million in the
first quarter of 2018 compared to a profit of $6.3 million in the first
quarter of 2017. The decreases in revenues and operating profit compared
to the same quarter last year were primarily due to significantly lower
barge deliveries. The Inland Barge Group received orders of $57.1
million during the quarter and, as of March 31, 2018, had a backlog of
$124.5 million compared to a backlog of $98.2 million as of December 31,
2017.
The Energy Equipment Group reported revenues of $226.7 million in the
first quarter of 2018 compared to revenues of $255.4 million in the same
quarter of 2017. Operating profit and profit margin for this Group were
$21.3 million and 9.4% compared to $29.6 million and 11.6% in the same
quarter last year. A decrease in volumes in the Group's structural wind
towers product line was partially offset by improved pricing and
increased volumes in the Group's utility structures product line.
Additionally, the required adoption of new revenue accounting rules as
of January 1, 2018 resulted in a decrease in the Group's revenues and
operating profit in the first quarter of $18.0 million and $4.0 million,
respectively. Prior periods were not required to be adjusted for the new
rules. Also, in accordance with the new revenue rules, we are now
reporting combined backlog for wind towers and utility structures, which
represents open contracts at the end of the period that are either
non-cancellable or contain penalties for termination. The backlog for
wind towers and utility structures as of March 31, 2018 was $809.7
million compared to a backlog of $924.8 million as of December 31, 2017.
The Construction Products Group reported revenues of $125.0 million in
the first quarter of 2018 compared to revenues of $123.1 million in the
first quarter of 2017. Operating profit and profit margin were $19.4
million and 15.5% in the first quarter of 2018 compared to $15.5 million
and 12.6% in the same quarter last year. The increases in revenues
compared to the same quarter last year were primarily due to higher
volumes in our construction aggregates business and other businesses,
partially offset by lower volumes in our highway products business. The
increase in revenues from other businesses was primarily a result of our
trench shoring products acquisition in the third quarter of 2017. The
increase in operating profit compared to the same quarter last year was
related to volumes discussed, in addition to lower operating costs and
$1.5 million in insurance proceeds related to a previously disclosed
equipment failure at one of our highway products plants.
Share Repurchase
During the first quarter of 2018, the Company repurchased 1,519,503
shares of common stock at a cost of approximately $50.0 million, leaving
$450 million remaining under its current authorization through December
31, 2019.
Proposed Spin-off
On December 12, 2017, the Company announced that its Board of Directors
unanimously approved a plan to pursue a spin-off of the Company's
infrastructure-related businesses to Trinity stockholders. The
separation is planned as a tax-free spin-off transaction to the
Company's stockholders for U.S. federal income tax purposes. The
transaction is expected to result in two separate public companies: (1)
Trinity, the currently existing company which will be comprised
primarily of Trinity’s rail-related businesses and (2) a new
infrastructure company focused on infrastructure-related products and
services.
Completion of the spin-off will be subject to, among other things, the
effectiveness of appropriate filings with the Securities and Exchange
Commission, final approval from the Company's Board of Directors, and
other customary conditions. The Company may, at any time and for any
reason until the proposed transaction is complete, abandon the
separation or modify or change its terms. The separation is expected to
be completed in the fourth quarter of 2018, but there can be no
assurance regarding the ultimate timing of the separation or that the
separation will ultimately occur.
Company's $449.4 million Convertible
Subordinated Notes
Pursuant to the terms of the indenture governing the Notes, the Notes
are callable by the Company, in whole or part, beginning June 1,
2018. On April 23, 2018, the Company gave notice of its election to
redeem all of the Notes on June 1, 2018 for cash equal to 100% of the
principal amount of the Notes, plus accrued and unpaid interest. In
addition, the Company notified the trustee that the Notes became
convertible as a result of its election to redeem the Notes. As a
result, holders may convert their Notes at any time until May 30, 2018.
The current conversion price of the Notes is $24.13 per share as of
April 13, 2018. Upon conversion, the Company will deliver to the holders
in respect of each $1,000 principal amount of Notes being converted a
“settlement amount,” as defined in the Indenture governing the Notes,
equal to the sum of the daily settlement amounts for each of the 20
consecutive trading days of the cash settlement averaging period.
Although the Company has the option to make the conversion payment in
cash and shares of the Company's common stock (or cash in lieu of some
or all of the shares of common stock), the Company intends to make the
entire conversion payment with respect to all Notes converted solely in
cash. The Company currently expects to fund the redemption and
conversion payments through a combination of cash on hand and the
proceeds from one or more debt financing transactions by the Company on
a non-recourse basis.
Earnings Guidance for 2018
The 2018 earnings guidance reflects consolidated results for the Company
and has not been adjusted to incorporate the completion of a potential
spin-off transaction.
The Company expects full year 2018 earnings per common diluted share of
between $0.95 and $1.20, including spin-off related transaction costs of
approximately $30 to $35 million, compared to its previous earnings
guidance of between $1.00 and $1.20 per share, including spin-off
related transaction costs of approximately $25 million. Excluding
transaction costs, the Company anticipates full year 2018 earnings per
common diluted share of between $1.20 and $1.40 compared to its previous
guidance of between $1.15 and $1.35 per share. Refer to the 2018 Full
Year Guidance and Outlook table for further information regarding the
spin-off related transaction costs and other supplemental guidance
details.
Actual results in 2018 may differ from present expectations and could be
impacted by a number of factors including, among others, the risk
factors disclosed in "Risk Factors" and "Forward-Looking Statements" in
the Company's Annual Report on Form 10-K for the most recent fiscal year.
Conference Call
Trinity will hold a conference call at 11:00 a.m. Eastern on April 26,
2018 to discuss its first quarter results. To listen to the call, please
visit the Investor Relations section of the Trinity Industries website, www.trin.net
and select the Events & Presentations menu link. An audio replay may be
accessed through the Company’s website or by dialing (402) 220-2103
until 11:59 p.m. Eastern on May 3, 2018.
Company Description
Trinity Industries, Inc., headquartered in Dallas, Texas, is a
diversified industrial company that owns complementary market-leading
businesses providing products and services to the energy, chemical,
agriculture, transportation, and construction sectors, among others.
Trinity reports its financial results in five principal business
segments: the Rail Group, the Railcar Leasing and Management Services
Group, the Inland Barge Group, the Construction Products Group, and the
Energy Equipment Group. For more information, visit: www.trin.net.
Some statements in this release, which are not historical facts, are
“forward-looking statements” as defined by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
statements about Trinity's estimates, expectations, beliefs, intentions
or strategies for the future, and the assumptions underlying these
forward-looking statements, including, but not limited to, statements
regarding the effect ofthe Tax Cuts and Jobs Act on Trinity's
financial results, any non-cash tax benefits from the remeasurement of
Trinity's net deferred tax liabilities, the anticipated separation of
Trinity into two separate public companies, the expected timetable for
completing the spin-off transaction, whether or not the spin-off
transaction occurs, future financial and operating performance of each
company, benefits and synergies of the spin-off transaction, strategic
and competitive advantages of each company, future opportunities for
each company and any other statements regarding events or developments
that Trinity believes or anticipates will or may occur in the future.
Trinity uses the words “anticipates,” “assumes,” “believes,”
“estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,”
“guidance,” “outlook,” and similar expressions to identify these
forward-looking statements. Forward-looking statements speak only as of
the date of this release, and Trinity expressly disclaims any obligation
or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Trinity’s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based. There
is no assurance that the proposed spin-off transaction will be
completed, that the Company's Board of Directors will continue to pursue
theproposed spin-off transaction (even if there are no
impediments to completion), that the Company will be able to separate
its businesses, or that the proposed spin-off transaction will be the
most beneficial alternative considered. Forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from historical experience or our present
expectations, including but not limited to risks and uncertainties
regarding economic, competitive, governmental, and technological factors
affecting Trinity’s operations, markets, products, services and prices,
as well as any changes in or abandonment of the proposed separation or
the ability to effect the separation and satisfy the conditions to the
proposed separation, and such forward-looking statements are not
guarantees of future performance. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see “Risk Factors” and
“Forward-Looking Statements” in the Company's Annual Report on Form 10-K
for the most recent fiscal year, and as may be revised and updated by
our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
|
|
|
|
| Trinity Industries, Inc. |
| Condensed Consolidated Income Statements |
(in millions, except per share amounts)
|
(unaudited)
|
|
|
|
|
| Three Months Ended |
| | | March 31, |
| | |
| 2018 |
|
|
|
| 2017 |
|
|
Revenues
| | |
$
|
831.3
| | | |
$
|
877.3
| |
|
Operating costs:
| | | | | | |
|
Cost of revenues
| | | |
630.1
| | | | |
660.2
| |
|
Selling, engineering, and administrative expenses
| | | |
104.9
| | | | |
102.5
| |
|
Losses (gains) on dispositions of property:
| | | | | | |
|
Net gains on lease fleet sales
| | | |
(2.1
|
)
| | | |
—
| |
|
Other
| | |
|
(0.2
|
)
| | |
|
(1.3
|
)
|
| | |
|
732.7
|
| | |
|
761.4
|
|
|
Operating profit
| | | |
98.6
| | | | |
115.9
| |
|
Interest expense, net
| | | |
42.4
| | | | |
43.3
| |
|
Other, net
| | |
|
(0.2
|
)
| | |
|
0.1
|
|
|
Income before income taxes
| | | |
56.4
| | | | |
72.5
| |
|
Provision (benefit) for income taxes
| | |
|
14.8
|
| | |
|
20.8
|
|
|
Net income
| | | |
41.6
| | | | |
51.7
| |
|
Net income attributable to noncontrolling interest
| | |
|
1.4
|
| | |
|
5.7
|
|
|
Net income attributable to Trinity Industries, Inc. | | |
$
|
40.2
|
| | |
$
|
46.0
|
|
| | | | | |
|
|
Net income attributable to Trinity Industries, Inc. per common share:
| | | | | | |
|
Basic
| | |
$
|
0.27
| | | |
$
|
0.30
| |
|
Diluted
| | |
$
|
0.26
| | | |
$
|
0.30
| |
|
Weighted average number of shares outstanding:
| | | | | | |
|
Basic
| | | |
147.4
| | | | |
148.7
| |
|
Diluted
| | | |
153.7
| | | | |
150.6
| |
| | | | | | | | | |
|
Trinity is required to utilize the two-class method of accounting when
calculating earnings per share as a result of unvested restricted shares
that have non-forfeitable rights to dividends and are, therefore,
considered to be a participating security. The unvested restricted
shares are excluded from the weighted average number of shares
outstanding for the purposes of determining earnings per share. The
two-class method results in a lower earnings per share than is
calculated from the face of the income statement. See Earnings Per Share
Calculation table below.
The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017.
The Act reduces the U.S. federal corporate income tax rate from 35.0% to
21.0%, requires companies to pay a one-time transition tax on earnings
of certain foreign subsidiaries that were previously tax deferred, and
creates new taxes on certain foreign-sourced earnings. In December 2017,
we recorded a tax benefit after the initial assessment of the tax
effects of the Act, and we will continue refining this amount throughout
2018. During the quarter ended March 31, 2018, we adjusted our initial
assessment of the tax effects of the Act to record an additional benefit
related to the transition tax. We are still analyzing certain aspects of
the Act and refining our calculations, which could potentially affect
the measurement of our deferred tax balance or give rise to new deferred
tax amounts in future periods of 2018. The impact of the Act may differ
from our estimate due to changes in the regulations, rulings, guidance,
and interpretations issued by the IRS and the FASB as well as
interpretations and assumptions made by the Company. For the items for
which we were able to determine a reasonable estimate, we recognized an
additional provisional net benefit of $0.5 million for the three months
ended March 31, 2018, which is included as a component of income tax
expense.
|
|
|
|
| Trinity Industries, Inc. |
| Condensed Segment Data |
(in millions)
|
(unaudited)
|
|
|
|
|
| Three Months Ended |
| | | March 31, |
| Revenues: | | |
| 2018 |
|
|
|
| 2017 |
|
| Rail Group | | |
$
|
598.5
| | | |
$
|
478.3
| |
| Construction Products Group | | | |
125.0
| | | | |
123.1
| |
| Inland Barge Group | | | |
30.8
| | | | |
62.7
| |
| Energy Equipment Group | | | |
226.7
| | | | |
255.4
| |
| Railcar Leasing and Management Services Group | | | |
174.6
| | | | |
178.9
| |
|
All Other
| | |
|
24.8
|
| | |
|
22.8
|
|
|
Segment Totals before Eliminations
| | | |
1,180.4
| | | | |
1,121.2
| |
|
Eliminations - lease subsidiary
| | | |
(296.1
|
)
| | | |
(192.2
|
)
|
|
Eliminations - other
| | |
|
(53.0
|
)
| | |
|
(51.7
|
)
|
|
Consolidated Total
| | |
$
|
831.3
|
| | |
$
|
877.3
|
|
| | | | | |
|
| | | Three Months Ended |
| | | March 31, |
| Operating profit (loss): | | |
| 2018 |
| | |
| 2017 |
|
| Rail Group | | |
$
|
58.9
| | | |
$
|
50.5
| |
| Construction Products Group | | | |
19.4
| | | | |
15.5
| |
| Inland Barge Group | | | |
(0.7
|
)
| | | |
6.3
| |
| Energy Equipment Group | | | |
21.3
| | | | |
29.6
| |
| Railcar Leasing and Management Services Group | | | |
71.1
| | | | |
85.0
| |
|
All Other
| | |
|
(3.3
|
)
| | |
|
(4.6
|
)
|
|
Segment Totals before Eliminations and Corporate Expenses
| | | |
166.7
| | | | |
182.3
| |
|
Corporate
| | | |
(39.5
|
)
| | | |
(35.1
|
)
|
|
Eliminations - lease subsidiary
| | | |
(28.7
|
)
| | | |
(29.4
|
)
|
|
Eliminations - other
| | |
|
0.1
|
| | |
|
(1.9
|
)
|
|
Consolidated Total
| | |
$
|
98.6
|
| | |
$
|
115.9
|
|
|
|
|
|
| Trinity Industries, Inc. |
| Leasing Group |
| Condensed Results of Operations (unaudited) |
|
|
|
|
| Three Months Ended |
| | | March 31, |
| | |
| 2018 |
|
|
|
| 2017 |
|
| | | ($ in millions) |
|
Revenues:
| | | | | | |
|
Leasing and management
| | |
$
|
174.6
| | | |
$
|
178.9
| |
|
Sales of railcars owned one year or less at the time of sale(1) | | |
|
—
|
| | |
|
—
|
|
|
Total revenues
| | |
$
|
174.6
| | | |
$
|
178.9
| |
|
Operating profit:
| | | | | | |
|
Leasing and management
| | |
$
|
69.0
| | | |
$
|
85.0
| |
|
Railcar sales(1):
| | | | | | |
|
Railcars owned one year or less at the time of sale
| | | |
—
| | | | |
—
| |
|
Railcars owned more than one year at the time of sale
| | |
|
2.1
|
| | |
|
—
|
|
|
Total operating profit
| | |
$
|
71.1
| | | |
$
|
85.0
| |
|
Operating profit margin:
| | | | | | |
|
Leasing and management
| | | |
39.5
|
%
| | | |
47.5
|
%
|
|
Railcar sales
| | |
*
| | |
*
|
|
Total operating profit margin
| | | |
40.7
|
%
| | | |
47.5
|
%
|
|
Selected expense information(2):
| | | | | | |
|
Depreciation
| | |
$
|
45.1
| | | |
$
|
42.1
| |
|
Maintenance and compliance
| | |
$
|
26.4
| | | |
$
|
20.5
| |
|
Rent
| | |
$
|
10.1
| | | |
$
|
10.1
| |
|
Interest
| | |
$
|
31.5
| | | |
$
|
30.6
| |
| | | | | |
|
| | | | | |
|
| | | March 31, | | | March 31, |
| | |
| 2018 |
| | |
| 2017 |
|
|
Leasing portfolio information:
| | | | | | |
|
Portfolio size (number of railcars):
| | | | | | |
|
Wholly-owned
| | | |
67,935
| | | | |
62,255
| |
|
Partially-owned
| | |
|
24,660
|
| | |
|
24,665
|
|
| | | |
92,595
| | | | |
86,920
| |
|
Managed (third-party owned)
| | |
|
26,430
|
| | |
|
18,535
|
|
| | | |
119,025
| | | | |
105,455
| |
|
Portfolio utilization (Company-owned railcars)
| | | |
96.1
|
%
| | | |
97.5
|
%
|
| | | | | |
|
| | | | | |
|
| | | Three Months Ended March 31, |
| | |
| 2018 |
| | |
| 2017 |
|
| | | (in millions) |
|
Proceeds from sales of leased railcars:
| | | | | | |
|
Leasing Group:
| | | | | | |
|
Railcars owned one year or less at the time of sale
| | |
$
|
—
| | | |
$
|
—
| |
|
Railcars owned more than one year at the time of sale
| | | |
15.5
| | | | |
—
| |
| Rail Group | | |
|
—
|
| | |
|
—
|
|
| | |
$
|
15.5
|
| | |
$
|
—
|
|
* Not meaningful
(1) The Company recognizes sales of railcars from the lease
fleet which have been owned by the lease fleet for one year or less as
revenue. Sales of railcars from the lease fleet which have been owned by
the lease fleet for more than one year are recognized as a net gain or
loss from the disposal of a long-term asset.
(2) Depreciation, maintenance and compliance, and rent
expense are components of operating profit. Amortization of deferred
profit on railcars sold from the Rail Group to the Leasing Group is
included in the operating profit of the Leasing Group resulting in the
recognition of depreciation expense based on the Company's original
manufacturing cost of the railcars. Interest expense is not a component
of operating profit and includes the effect of hedges.
|
|
|
|
| Trinity Industries, Inc. |
| Condensed Consolidated Balance Sheets |
(in millions)
|
(unaudited)
|
|
|
|
|
| March 31, |
|
| December 31, |
| | | 2018 | | | 2017 |
|
Cash and cash equivalents
| | |
$
|
625.4
| | |
$
|
778.6
|
|
Short-term marketable securities
| | | |
220.8
| | | |
319.5
|
|
Receivables, net of allowance
| | | |
342.5
| | | |
369.7
|
|
Income tax receivable
| | | |
30.6
| | | |
29.0
|
|
Inventories
| | | |
599.4
| | | |
640.6
|
|
Restricted cash
| | | |
177.3
| | | |
195.2
|
|
Net property, plant, and equipment
| | | |
6,393.5
| | | |
6,134.7
|
| Goodwill | | | |
789.8
| | | |
780.3
|
|
Other assets
| | |
|
297.7
| | |
|
295.6
|
| | |
$
|
9,477.0
| | |
$
|
9,543.2
|
| | | | | |
|
|
Accounts payable
| | |
$
|
183.4
| | |
$
|
175.4
|
|
Accrued liabilities
| | | |
396.4
| | | |
440.0
|
|
Debt, net of unamortized discount of $3.6 and $8.5 | | | |
3,223.4
| | | |
3,242.4
|
|
Deferred income
| | | |
19.8
| | | |
20.5
|
|
Deferred income taxes
| | | |
757.0
| | | |
743.2
|
|
Other liabilities
| | | |
66.4
| | | |
63.7
|
|
Stockholders' equity:
| | | | | | |
| Trinity Industries, Inc. | | | |
4,477.7
| | | |
4,501.1
|
|
Noncontrolling interest
| | |
|
352.9
| | |
|
356.9
|
| | |
|
4,830.6
| | |
|
4,858.0
|
| | |
$
|
9,477.0
| | |
$
|
9,543.2
|
|
|
|
|
| Trinity Industries, Inc. |
| Additional Balance Sheet Information |
(in millions)
|
(unaudited)
|
|
|
|
|
| March 31, |
|
| December 31, |
| | |
| 2018 |
| | |
| 2017 |
|
| Property, Plant, and Equipment | | | | | | |
|
Corporate/Manufacturing:
| | | | | | |
|
Property, plant, and equipment
| | |
$
|
2,064.5
| | | |
$
|
2,046.4
| |
|
Accumulated depreciation
| | |
|
(1,092.3
|
)
| | |
|
(1,073.7
|
)
|
| | |
|
972.2
|
| | |
|
972.7
|
|
|
Leasing:
| | | | | | |
|
Wholly-owned subsidiaries:
| | | | | | |
|
Machinery and other
| | | |
10.7
| | | | |
10.7
| |
|
Equipment on lease
| | | |
5,310.9
| | | | |
4,995.7
| |
|
Accumulated depreciation
| | |
|
(893.9
|
)
| | |
|
(858.9
|
)
|
| | |
|
4,427.7
|
| | |
|
4,147.5
|
|
|
Partially-owned subsidiaries:
| | | | | | |
|
Equipment on lease
| | | |
2,331.5
| | | | |
2,317.7
| |
|
Accumulated depreciation
| | |
|
(508.7
|
)
| | |
|
(493.1
|
)
|
| | |
|
1,822.8
|
| | |
|
1,824.6
|
|
| | | | | |
|
|
Deferred profit on railcars sold to the Leasing Group | | | |
(1,011.6
|
)
| | | |
(985.2
|
)
|
|
Accumulated amortization
| | |
|
182.4
|
| | |
|
175.1
|
|
| | |
|
(829.2
|
)
| | |
|
(810.1
|
)
|
| | |
$
|
6,393.5
|
| | |
$
|
6,134.7
|
|
|
|
|
|
| Trinity Industries, Inc. |
| Additional Balance Sheet Information |
(in millions)
|
(unaudited)
|
|
|
|
|
| March 31, |
|
| December 31, |
| | |
| 2018 |
| | |
| 2017 |
|
| Debt | | | | | | |
|
Corporate - Recourse:
| | | | | | |
|
Revolving credit facility
| | |
$
|
—
| | | |
$
|
—
| |
|
Senior notes due 2024, net of unamortized discount of $0.3 and $0.3 | | | |
399.7
| | | | |
399.7
| |
|
Convertible subordinated notes, net of unamortized discount of $3.3
and $8.2 | | | |
446.1
| | | | |
441.2
| |
|
Other
| | |
|
0.5
|
| | |
|
0.5
|
|
| | | |
846.3
| | | | |
841.4
| |
|
Less: unamortized debt issuance costs
| | |
|
(2.7
|
)
| | |
|
(2.9
|
)
|
| | |
|
843.6
|
| | |
|
838.5
|
|
|
Leasing:
| | | | | | |
|
Wholly-owned subsidiaries:
| | | | | | |
|
Recourse:
| | | | | | |
|
Capital lease obligations
| | |
|
27.4
|
| | |
|
28.3
|
|
| | |
|
27.4
|
| | |
|
28.3
|
|
|
Non-recourse:
| | | | | | |
|
Secured railcar equipment notes
| | | |
581.9
| | | | |
591.6
| |
|
Warehouse facility
| | | |
154.5
| | | | |
150.7
| |
|
Promissory notes
| | |
|
289.8
|
| | |
|
293.6
|
|
| | | |
1,026.2
| | | | |
1,035.9
| |
|
Less: unamortized debt issuance costs
| | |
|
(13.9
|
)
| | |
|
(11.1
|
)
|
| | |
|
1,012.3
|
| | |
|
1,024.8
|
|
Partially-owned subsidiaries - non-recourse:
| | | | | | |
|
Secured railcar equipment notes
| | | |
1,354.1
| | | | |
1,365.3
| |
|
Less: unamortized debt issuance costs
| | |
|
(14.0
|
)
| | |
|
(14.5
|
)
|
| | |
|
1,340.1
|
| | |
|
1,350.8
|
|
| | |
$
|
3,223.4
|
| | |
$
|
3,242.4
|
|
|
|
|
|
| Trinity Industries, Inc. |
| Additional Balance Sheet Information |
($ in millions)
|
(unaudited)
|
|
|
|
|
| March 31, |
|
| December 31, |
| | |
| 2018 |
| | |
| 2017 |
|
| Leasing Debt Summary | | | | | | |
|
Total Recourse Debt
| | |
$
|
27.4
| | | |
$
|
28.3
| |
|
Total Non-Recourse Debt
| | |
|
2,352.4
|
| | |
|
2,375.6
|
|
| | |
$
|
2,379.8
|
| | |
$
|
2,403.9
|
|
|
Total Leasing Debt
| | | | | | |
|
Wholly-owned subsidiaries
| | |
$
|
1,039.7
| | | |
$
|
1,053.1
| |
|
Partially-owned subsidiaries
| | |
|
1,340.1
|
| | |
|
1,350.8
|
|
| | |
$
|
2,379.8
|
| | |
$
|
2,403.9
|
|
|
Equipment on Lease(1) | | | | | | |
|
Wholly-owned subsidiaries
| | |
$
|
4,427.7
| | | |
$
|
4,147.5
| |
|
Partially-owned subsidiaries
| | |
|
1,822.8
|
| | |
|
1,824.6
|
|
| | |
$
|
6,250.5
|
| | |
$
|
5,972.1
|
|
|
Total Leasing Debt as a % of Equipment on Lease
| | | | | | |
|
Wholly-owned subsidiaries
| | | |
23.5
|
%
| | | |
25.4
|
%
|
|
Partially-owned subsidiaries
| | | |
73.5
|
%
| | | |
74.0
|
%
|
|
Combined
| | | |
38.1
|
%
| | | |
40.3
|
%
|
(1) Excludes net deferred profit on railcars sold to the
Leasing Group.
|
|
|
|
| Trinity Industries, Inc. |
| Condensed Consolidated Cash Flow Statements |
(in millions)
|
(unaudited)
|
|
|
|
|
| Three Months Ended |
| | | March 31, |
| | |
| 2018 |
|
|
|
| 2017 |
|
| Operating activities: | | | | | | |
|
Net income
| | |
$
|
41.6
| | | |
$
|
51.7
| |
|
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | |
|
Depreciation and amortization
| | | |
75.3
| | | | |
72.8
| |
|
Provision (benefit) for deferred income taxes
| | | |
14.4
| | | | |
55.3
| |
|
Net gains on railcar lease fleet sales owned more than one year at
the time of sale
| | | |
(2.1
|
)
| | | |
—
| |
|
Other
| | | |
15.2
| | | | |
13.7
| |
|
Changes in assets and liabilities:
| | | | | | |
|
(Increase) decrease in receivables
| | | |
49.4
| | | | |
24.1
| |
|
(Increase) decrease in inventories
| | | |
13.1
| | | | |
33.7
| |
|
Increase (decrease) in accounts payable and accrued liabilities
| | | |
(34.6
|
)
| | | |
(26.3
|
)
|
|
Other
| | |
|
1.4
|
| | |
|
(4.9
|
)
|
|
Net cash provided by operating activities
| | |
|
173.7
|
| | |
|
220.1
|
|
| Investing activities: | | | | | | |
|
Proceeds from railcar lease fleet sales owned more than one year at
the time of sale
| | | |
15.5
| | | | |
—
| |
|
Proceeds from dispositions of property
| | | |
2.5
| | | | |
3.6
| |
|
Capital expenditures - leasing
| | | |
(318.2
|
)
| | | |
(162.9
|
)
|
|
Capital expenditures - manufacturing and other
| | | |
(15.8
|
)
| | | |
(24.3
|
)
|
|
(Increase) decrease in short-term marketable securities
| | | |
98.7
| | | | |
42.6
| |
|
Acquisitions
| | | |
(25.0
|
)
| | | |
—
| |
|
Other
| | |
|
0.8
|
| | |
|
0.5
|
|
|
Net cash required by investing activities
| | |
|
(241.5
|
)
| | |
|
(140.5
|
)
|
| Financing activities: | | | | | | |
|
Payments to retire debt
| | | |
(26.5
|
)
| | | |
(26.7
|
)
|
|
Proceeds from issuance of debt
| | | |
0.9
| | | | |
—
| |
|
Shares repurchased
| | | |
(49.3
|
)
| | | |
—
| |
|
Dividends paid to common shareholders
| | | |
(19.5
|
)
| | | |
(16.7
|
)
|
|
Purchase of shares to satisfy employee tax on vested stock
| | | |
(0.1
|
)
| | | |
—
| |
|
Distributions to noncontrolling interest
| | | |
(5.8
|
)
| | | |
(7.3
|
)
|
|
Other
| | |
|
(3.0
|
)
| | |
|
—
|
|
|
Net cash required by financing activities
| | |
|
(103.3
|
)
| | |
|
(50.7
|
)
|
|
Net increase (decrease) in cash, cash equivalents, and restricted
cash
| | | |
(171.1
|
)
| | | |
28.9
| |
|
Cash, cash equivalents, and restricted cash at beginning of period
| | |
|
973.8
|
| | |
|
741.6
|
|
|
Cash, cash equivalents, and restricted cash at end of period
| | |
$
|
802.7
|
| | |
$
|
770.5
|
|
|
|
|
|
Trinity Industries, Inc. |
Earnings per Share Calculation |
|
(in millions, except per share amounts)
|
|
(unaudited)
|
Basic net income attributable to Trinity Industries, Inc. per common
share is computed by dividing net income attributable to Trinity
remaining after allocation to unvested restricted shares by the weighted
average number of basic common shares outstanding for the period.
|
|
| Three Months Ended |
|
| Three Months Ended |
| | | March 31, 2018 | | | March 31, 2017 |
| | | |
|
|
Average
|
|
| | | | |
|
|
Average
|
|
| |
| | |
Income
| | |
Shares
| | |
EPS
| | |
Income
| | |
Shares
| | |
EPS
|
|
Net income attributable to Trinity Industries, Inc. | | |
$
|
40.2
| | | | | | | | | |
$
|
46.0
| | | | | | | |
|
Unvested restricted share participation
| | |
|
(0.7
|
)
| | | | | | | | |
|
(1.2
|
)
| | | | | | |
|
Net income attributable to Trinity Industries, Inc. - basic
| | | |
39.5
| | | |
147.4
| | |
$
|
0.27
| | | |
44.8
| | | |
148.7
| | |
$
|
0.30
|
|
Effect of dilutive securities:
| | | | | | | | | | | | | | | | | | |
|
Nonparticipating unvested restricted shares and stock options
| | | |
—
| | | |
0.9
| | | | | | |
—
| | | |
—
| | | |
|
Convertible subordinated notes
| | |
|
—
|
| | |
5.4
| | | | | |
|
—
|
| | |
1.9
| | | |
|
Net income attributable to Trinity Industries, Inc. - diluted
| | |
$
|
39.5
|
| | |
153.7
| | |
$
|
0.26
| | |
$
|
44.8
|
| | |
150.6
| | |
$
|
0.30
|
|
|
|
|
Trinity Industries, Inc. |
Reconciliation of EBITDA |
|
(in millions)
|
|
(unaudited)
|
“EBITDA” is defined as net income plus interest expense, income taxes,
and depreciation and amortization including goodwill impairment charges.
EBITDA is not a calculation based on generally accepted accounting
principles. The amounts included in the EBITDA calculation are, however,
derived from amounts included in the historical consolidated statements
of operations data. In addition, EBITDA should not be considered as an
alternative to net income or operating income as an indicator of our
operating performance, or as an alternative to operating cash flows as a
measure of liquidity. We believe EBITDA assists investors in comparing a
company’s performance on a consistent basis without regard to
depreciation and amortization, which can vary significantly depending
upon many factors. However, the EBITDA measure presented in this press
release may not always be comparable to similarly titled measures by
other companies due to differences in the components of the calculation.
|
|
| Three Months Ended |
| | | March 31, |
| | | 2018 |
|
| 2017 |
|
Net income
| | |
$
|
41.6
| | |
$
|
51.7
|
|
Add:
| | | | | | |
|
Interest expense
| | | |
46.3
| | | |
45.0
|
|
Provision (benefit) for income taxes
| | | |
14.8
| | | |
20.8
|
|
Depreciation and amortization expense
| | |
|
75.3
| | |
|
72.8
|
|
Earnings before interest expense, income taxes, and depreciation and
amortization expense
| | |
$
|
178.0
| | |
$
|
190.3
|
|
|
|
|
| Trinity Industries, Inc. |
| 2018 Full Year Guidance and Outlook |
(unaudited)
|
|
|
|
|
| Total Company:
|
|
|
| |
|
Total earnings per share(1) | | | | $0.95 - $1.20 per share
|
|
Earnings per share, excluding spin-off transaction costs(1) | | | | $1.20 - $1.40 per share
|
|
Corporate expense, excluding spin-off transaction costs
| | | | $130 - $150 million |
|
Spin-off transaction costs
| | | | $30 - $35 million |
|
Interest expense, net
| | | | $165 million |
|
Tax rate, excluding spin-off transaction costs
| | | |
24%
|
| | | |
|
| Rail Group:
| | | | |
|
Revenue
| | | | $2.2 billion |
|
Operating margin
| | | |
8.0%
|
|
Railcar deliveries
| | | |
20,500 railcars
|
|
Revenue elimination from sales to Leasing Group(2) | | | | $860 million |
|
Operating profit elimination from sales to Leasing Group(2) | | | | $95 million |
| | | |
|
| Railcar Leasing and Management Services Group:
| | | | |
|
Leasing and management revenues(3) | | | | $720 million |
|
Leasing and management operating profit(4) | | | | $290 million |
|
Proceeds from sales of leased railcars
| | | | $350 million |
| | | |
|
| Inland Barge Group:
| | | | |
|
Revenue
| | | | $155 million |
|
Operating profit margin
| | | |
0.0%
|
| | | |
|
| Construction Products Group:
| | | | |
|
Revenue
| | | | $545 million |
|
Operating profit margin
| | | |
13.0%
|
| | | |
|
| Energy Equipment Group:
| | | | |
|
Revenue
| | | | $875 million |
|
Operating profit margin
| | | |
8.5%
|
(1) The range for earnings per share guidance reflects
variability in the point estimates provided above for each business
segment.
(2) Revenue and operating profit elimination
from sales to the Leasing Group include maintenance services in addition
to railcar sales.
(3) Excludes sales of railcars owned
one year or less at time of sale.
(4) Excludes operating
profit from railcar sales.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180425006477/en/
Trinity Industries, Inc.
Investor Contact:
Preston
Bass, 214-631-4420
Director, Investor Relations
or
Media
Contact:
Jack Todd, 214-589-8909
Vice President, Public
Affairs
Source: Trinity Industries, Inc.