Railcar Leasing and Management Services Group (Tables)

9 Months Ended

Sep. 30, 2012

Selected consolidating financial information for the Leasing Group is as follows:



	September 30, 2012
	Leasing Group
	Wholly- Owned Subsidiaries			TRIP Holdings			Manufacturing/ Corporate			Total
	(in millions, unaudited)
Cash and cash equivalents	$	5.0		$	—		$	307.2		$	312.2
Property, plant, and equipment, net	$	3,175.3		$	1,127.1		$	516.6		$	4,819.0
Net deferred profit on railcars sold to the Leasing Group	(352.8		)	(182.5		)	—			(535.3		)
	$	2,822.5		$	944.6		$	516.6		$	4,283.7
Restricted cash	$	175.8		$	59.0		$	—		$	234.8
Debt:
Recourse	$	97.9		$	—		$	455.1		$	553.0
Less: unamortized discount	—			—			(90.7		)	(90.7		)
	97.9			—			364.4			462.3
Non-recourse	1,646.9			977.7			—			2,624.6
Less: non-recourse debt owned by Trinity	—			(108.8		)	—			(108.8		)
Total debt	$	1,744.8		$	868.9		$	364.4		$	2,978.1
Net deferred tax liabilities	$	622.4		$	5.1		$	(84.5	)	$	543.0



	December 31, 2011
	Leasing Group
	Wholly- Owned Subsidiaries			TRIP Holdings			Manufacturing/ Corporate			Total
	(in millions)
Cash and cash equivalents	$	3.2		$	—		$	347.9		$	351.1
Property, plant, and equipment, net	$	3,066.0		$	1,135.0		$	510.0		$	4,711.0
Net deferred profit on railcars sold to the Leasing Group	(344.5		)	(187.0		)	—			(531.5		)
	$	2,721.5		$	948.0		$	510.0		$	4,179.5
Restricted cash	$	165.7		$	74.6		$	—		$	240.3
Debt:
Recourse	$	103.3		$	—		$	454.2		$	557.5
Less: unamortized discount	—			—			(99.8		)	(99.8		)
	103.3			—			354.4			457.7
Non-recourse	1,616.0			1,010.0			—			2,626.0
Less: non-recourse debt owned by Trinity	—			(108.8		)	—			(108.8		)
Total debt	$	1,719.3		$	901.2		$	354.4		$	2,974.9
Net deferred tax liabilities	$	582.4		$	4.7		$	(152.4	)	$	434.7

Investment in TRIP Holdings and TRIP Holdings' debt



	Three Months Ended September 30,								Nine Months Ended September 30,
	2012			2011			Percent Change		2012			2011			Percent Change
	($ in millions)						Percent Change		($ in millions)						Percent Change
Revenues:
Wholly owned subsidiaries:
Leasing and management	$	106.4		$	94.6		12.5	%	$	306.9		$	277.8		10.5	%
Railcar sales⁽¹⁾	23.4			23.6			*		100.5			30.2			*
	129.8			118.2			9.8		407.4			308.0			32.3
TRIP Holdings:
Leasing and management	30.1			29.2			3.1		89.0			87.4			1.8
Railcar sales⁽¹⁾	—			—			—		—			—			—
	30.1			29.2			3.1		89.0			87.4			1.8
Total revenues	$	159.9		$	147.4		8.5		$	496.4		$	395.4		25.5
Operating Profit:
Wholly owned subsidiaries:
Leasing and management	$	47.1		$	40.3				$	134.2		$	116.3
Railcar sales⁽¹⁾:
Railcars owned one year or less at the time of sale	4.3			4.9					20.7			7.9
Railcars owned more than one year at the time of sale	15.9			1.6					21.6			3.0
	67.3			46.8					176.5			127.2
TRIP Holdings:
Leasing and management	16.7			17.4					50.8			51.3
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	1.1			—					0.7			0.1
	17.8			17.4					51.5			51.4
Total operating profit	$	85.1		$	64.2				$	228.0		$	178.6
Operating profit margin:
Leasing and management	46.7		%	46.6		%			46.7		%	45.9		%
Railcar sales⁽¹⁾	*			*					*			*
Total operating profit margin	53.2			43.6					45.9			45.2
Interest and rent expense⁽²⁾:
Rent expense	$	12.7		$	12.1				$	38.2		$	36.4
Interest expense:
Wholly-owned subsidiaries	$	24.3		$	24.8				$	73.2		$	75.4
TRIP Holdings:
External	15.0			15.3					45.2			37.6
Intercompany	3.3			3.2					9.8			3.2
	18.3			18.5					55.0			40.8
Total interest expense	$	42.6		$	43.3				$	128.2		$	116.2

* Not meaningful

(1)

Effective December 31, 2011, the Company adopted the emerging industry policy of recognizing revenue from the sales of railcars from the lease fleet on a gross basis in leasing revenues and cost of revenues if the railcar has been owned by the lease fleet for one year or less at the time of sale. 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. Prior year reported balances have been reclassified to conform to this policy.


(2)	Rent expense is a component of operating profit. Interest expense is not a component of operating profit and includes the effect of hedges. Intercompany interest expense arises from Trinity’s ownership of a portion of TRIP Holdings’ Senior Secured Notes and is eliminated in consolidation. See Note 11 Debt.

Future contractual minimum rental revenues on leases

Future contractual minimum rental revenues on leases are as follows:



	Remaining three months of 2012		2013		2014		2015		2016		Thereafter		Total
	(in millions)
Wholly-owned subsidiaries	$	73.5	$	261.0	$	210.7	$	167.0	$	128.6	$	268.8	$	1,109.6
TRIP Holdings	24.8		85.5		64.1		52.3		43.2		70.1		340.0
	$	98.3	$	346.5	$	274.8	$	219.3	$	171.8	$	338.9	$	1,449.6

Future operating lease obligations and future contractual minimum rental revenues related to these leases

Future operating lease obligations of the Leasing Group’s subsidiaries as well as future contractual minimum rental revenues related to these leases due to the Leasing Group are as follows:



	Remaining three months of 2012		2013		2014		2015		2016		Thereafter		Total
	(in millions)
Future operating lease obligations of Trusts’ railcars	$	11.4	$	45.6	$	44.8	$	43.1	$	40.1	$	341.3	$	526.3
Future contractual minimum rental revenues of Trusts’ railcars	$	15.7	$	51.1	$	36.4	$	28.2	$	19.9	$	37.0	$	188.3

Future amounts due and future contractual minimum rental revenues related to operating leases other than leases with the Trusts

Future amounts due as well as future contractual minimum rental revenues related to operating leases other than leases with the Trusts are as follows:



	Remaining three months of 2012		2013		2014		2015		2016		Thereafter		Total
	(in millions)
Future operating lease obligations	$	2.4	$	9.5	$	9.4	$	9.4	$	9.3	$	38.4	$	78.4
Future contractual minimum rental revenues	$	2.9	$	11.5	$	10.9	$	6.8	$	5.9	$	8.2	$	46.2

- Definition

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

- Definition

Tabular disclosure of each significant reconciling item, other than profit (loss), revenues, or assets, in the reconciliation of totals of such items in reportable segments to the entity's corresponding consolidated amount.

+ References+ Details