Employee Retirement Plans

The Company sponsors defined benefit plans and defined contribution profit sharing plans that provide retirement income and death benefits for eligible employees. The annual measurement date of the benefit obligations, fair value of plan assets, and funded status is December 31.

Actuarial Assumptions



	Year Ended December 31,
	2013	2012	2011
Assumptions used to determine benefit obligations at the annual measurement date were:
Obligation discount rate	5.22%	4.25%	5.40%
Compensation increase rate	4.00%	4.00%	3.00%
Assumptions used to determine net periodic benefit costs were:
Obligation discount rate	4.25%	5.40%	5.90%
Long-term rate of return on plan assets	7.75%	7.75%	7.75%
Compensation increase rate	4.00%	3.00%	3.00%

The obligation discount rate assumption is determined by deriving a single discount rate from a theoretical settlement portfolio of high quality corporate bonds sufficient to provide for the plans' projected benefit payments. The expected long-term rate of return on the plans' assets is an assumption reflecting the anticipated weighted average rate of earnings on the portfolio over the long-term. To arrive at this rate, we developed estimates based upon the anticipated performance of the plans' assets. The compensation increase rate pertains solely to the pension plan of the Company's Inland Barge segment as the accrued benefits of the Company's remaining pension plans were frozen in 2009.

Components of Net Retirement Cost



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Expense Components
Service cost	$	1.1		$	0.9		$	0.8
Interest	18.5			19.4			19.6
Expected return on plan assets	(26.6		)	(22.9		)	(22.8		)
Amortization of actuarial loss	4.9			3.2			1.8
Prior service cost	0.1			0.1			0.1
Defined benefit expense	(2.0		)	0.7			(0.5		)
Profit sharing	12.3			11.9			9.3
Net expense	$	10.3		$	12.6		$	8.8

Obligations and Funded Status



	Year Ended December 31,
	2013			2012
	(in millions)
Accumulated Benefit Obligations	$	392.1		$	442.5
Projected Benefit Obligations:
Beginning of year	$	442.5		$	364.8
Service cost	1.1			0.9
Interest	18.5			19.4
Benefits paid	(15.8		)	(13.3		)
Actuarial (gain)/loss	(54.2		)	70.7
End of year	$	392.1		$	442.5
Plans' Assets:
Beginning of year	$	340.1		$	290.6
Actual return on assets	56.0			45.5
Employer contributions	18.9			17.3
Benefits paid	(15.8		)	(13.3		)
End of year	$	399.2		$	340.1

Consolidated Balance Sheet Components:
Other assets	$	17.8		$	—
Accrued liabilities	(10.7		)	(102.4		)
Net funded status	$	7.1		$	(102.4	)
Percent of projected benefit obligations funded	101.8		%	76.9		%

None of the plans' assets are expected to be returned to us during the year ending December 31, 2014.

Amounts Recognized in Other Comprehensive Income (Loss)



	Year Ended December 31,
	2013		2012			2011
	(in millions)
Actuarial gain (loss)	$	83.7	$	(48.1	)	$	(47.3	)
Amortization of actuarial loss	4.9		3.2			1.7
Amortization of prior service cost	0.1		0.1			0.1
Total before income taxes	88.7		(44.8		)	(45.5		)
Income tax expense (benefit)	32.9		(16.7		)	(16.9		)
Net amount recognized in other comprehensive income (loss)	$	55.8	$	(28.1	)	$	(28.6	)

Included in AOCL at December 31, 2013 were the following amounts that have not been recognized in net periodic pension cost: prior service cost of $0.1 million ($0.1 million net of related income taxes) and unrecognized actuarial losses of $68.3 million ($42.9 million net of related income taxes).

Actuarial loss included in AOCL and expected to be recognized in net periodic pension cost for the year ended December 31, 2014 is $1.3 million ($0.8 million net of related income taxes).

Plan Assets

The estimated fair value of the plans' assets at December 31, 2013 and 2012, indicating input levels used to determine fair value, and the range of target asset allocations are as follows:



	Target Allocation	December 31, 2013		December 31, 2012
Cash and cash equivalents		2	%	1	%
Equity securities	60-80%	73		73
Debt securities	20-40%	25		26
Total		100	%	100	%



	Fair Value Measurement as of December 31, 2013
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	7.0	$	—	$	—	$	7.0
Common trust funds	—		392.2		—		392.2
	$	7.0	$	392.2	$	—	$	399.2



	Fair Value Measurement as of December 31, 2012
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	3.3	$	—	$	—	$	3.3
Common trust funds	—		336.8		—		336.8
	$	3.3	$	336.8	$	—	$	340.1

The Company's pension plan investment strategies have been developed as part of a comprehensive asset/liability management process that considers the relationship between both the assets and liabilities of the plans. These strategies consider not only the expected risk and returns on the plans' assets, but also the actuarial projections of liabilities, projected contributions, and funded status. The equity allocation is heavily weighted toward U.S. equities. There is also a lesser exposure to international equities and domestic real estate investment trusts. The fixed income allocation is weighted toward domestic long duration bonds. There is also a lesser exposure to U.S. high yield and emerging market sovereign debt. This asset mix is designed to meet the longer-term obligations of the plans as projected by actuarial studies.

The principal pension investment strategies include asset allocation and active asset management within approved guidelines. The range of target asset allocations has been determined after giving consideration to the expected returns of each asset category, the expected performance of each asset category, the volatility of the asset returns over time, and the complementary nature of the asset mix within the portfolio. Each asset category is managed by external money managers with the objective of generating returns that exceed market-based benchmarks.

The pension plans' assets are valued at fair value. The following is a description of the valuation methodologies used in determining fair value, including the general classification of such instruments pursuant to the valuation hierarchy as described further in Note 3 Fair Value Accounting.

Temporary cash investments - These investments consist of U.S. dollars held in master trust accounts with the trustee. These temporary cash investments are classified as Level 1 instruments.

Common trust funds - Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Holdings of common trust funds are classified as Level 2 investments.

Cash Flows

Employer contributions for the year ending December 31, 2014 are expected to be $15.3 million for the defined benefit plans compared to $18.9 million contributed during 2013. Employer contributions to the 401(k) plans and the Supplemental Profit Sharing Plan for the year ending December 31, 2014 are expected to be $12.5 million compared to $11.7 million, $9.3 million, and $8.2 million during 2013, 2012, and 2011, respectively.

Benefit payments for the Company's defined benefit plans expected to be paid during the next ten years are as follows:



	Years ending December 31,
	(in millions)
2014	$	17.0
2015	18.1
2016	19.3
2017	20.5
2018	21.7
2019-2023	127.9

Participants in the Pension Plans are eligible to receive future retirement benefits through a company-funded annual retirement contribution provided through the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates. The contribution ranges from one to three percent of eligible compensation based on service. Both the annual retirement contribution and the company matching contribution are discretionary, requiring board approval, and are made annually with the investment of the funds directed by the participants.