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Company Release – 4/22/2021
Reports quarterly GAAP and adjusted earnings from continuing operations of $0.03 and $0.07 per diluted share, respectively

Generates year-to-date operating and total free cash flow after dividends and investments of $70 million and $90 million, respectively

Returned $60 million of capital to stockholders through dividends and share repurchases

DALLAS–(BUSINESS WIRE)– Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the first quarter ended March 31, 2021.

Financial and Operational Highlights – First Quarter 2021

Quarterly total company revenues of $399 million
Quarterly income from continuing operations per common diluted share (“EPS”) of $0.03 and quarterly adjusted EPS of $0.07
Lease fleet utilization of 94.5% and Future Lease Rate Differential (“FLRD”) of (14.8)% at quarter end
Railcar deliveries of 1,895 and new railcar orders of 1,410
Cash flow from operations and total free cash flow after dividends and investments (“Free Cash Flow”) were $70 million and $90 million, respectively
Investment of $91 million in leasing capital expenditures, net of lease portfolio sales
Net additions of 4,155 railcars to the wholly-owned and partially-owned lease fleet compared to prior year period
Repurchases of approximately 1.3 million shares at a cost of $37 million
Committed liquidity of $772 million as of March 31, 2021
Management Commentary

“Trinity’s first quarter results reflect the dynamics of aggressive execution on our strategic initiatives in the midst of a challenging operating environment and a competitive market for railcar demand,” said Jean Savage, Trinity’s Chief Executive Officer and President. “Operationally, our businesses performed well against our expectations, especially considering the winter storms that interrupted operations for nearly two weeks of the quarter.”

“Trinity’s lease revenue was impacted by the continuation of softer lease pricing and slightly lower utilization compared to last year. Our Rail Products segment completed further rightsizing of our production footprint to align with lower delivery volumes, and made good progress on our strategic initiatives to lower our breakeven point and overall cost structure. While the margin for the first quarter was negative, the business segment is turning the corner, and margins trended positively through the quarter. We expect to build momentum on our cost initiatives through the remainder of the year resulting in year over year margin improvement for the segment.”

“We are also seeing positive developments in the market with railcar inquiries returning to a more normal level of activity during the first quarter. As a result, Trinity’s fleet utilization and pricing are firming within our lease portfolio, and we expect lease rates to experience modest improvement through the year as existing railcars are absorbed across the industry. When looking at the potential for new railcar demand, we expect industry deliveries to be below replacement levels this year, but believe that current inquiries support improving railcar deliveries at or just above replacement levels in 2022.”

“Financially, Trinity is making disciplined investments while returning meaningful capital to shareholders as part of our overall capital allocation framework. In the first quarter, we made progress on our balance sheet initiatives by completing a small lease portfolio sale and extending our Leasing warehouse credit facility. The cash flows from Trinity’s rail platform continue to prove the resiliency of the business model through the cycle with approximately $70 million in operating cash flow generated during the quarter. We continue to expect strong operating cash flows in the range of $625 million to $675 million for the 2021 year.”

Ms. Savage concluded, “We are certainly encouraged by the improving trends for our business and the economy as a whole, but market uncertainty in the wake of the COVID-19 pandemic remains a headwind. We are focused on what is more within our control in optimizing our cost structure and balance sheet, and I am pleased with the execution and progress on internal initiatives to accelerate Trinity’s financial performance and create long-term shareholder value.”