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,
	2014	2013	2012
Assumptions used to determine benefit obligations at the annual measurement date were:
Obligation discount rate	4.33%	5.22%	4.25%
Compensation increase rate	4.00%	4.00%	4.00%
Assumptions used to determine net periodic benefit costs were:
Obligation discount rate	5.22%	4.25%	5.40%
Long-term rate of return on plan assets	7.75%	7.75%	7.75%
Compensation increase rate	4.00%	4.00%	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, estimates were developed 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, which was closed to new participants in 2014. The accrued benefits of the Company's remaining pension plans were frozen in 2009.

Components of net retirement cost



	Year Ended December 31,
	2014			2013			2012
	(in millions)
Expense Components
Service cost	$	0.5		$	1.1		$	0.9
Interest	20.2			18.5			19.4
Expected return on plan assets	(31.0		)	(26.6		)	(22.9		)
Amortization of actuarial loss	2.1			4.9			3.2
Prior service cost	—			0.1			0.1
Defined benefit expense	(8.2		)	(2.0		)	0.7
Profit sharing	17.4			12.3			11.9
Multiemployer plan	0.8			—			—
Net expense	$	10.0		$	10.3		$	12.6

The expected return on plan assets is based on the plan assets' fair value. Amortization of actuarial loss is determined using the corridor method. Under the corridor method, unamortized actuarial gains or losses in excess of 10% of the greater of the projected benefit obligation or the fair value of plan assets as of the beginning of the plan year, are amortized, for frozen plans, over the average expected remaining lifetime of frozen and inactive participants. Substantially all of the Company's defined benefit plans were frozen as of December 31, 2014.

Obligations and funded status



	Year Ended December 31,
	2014			2013
	(in millions)
Accumulated Benefit Obligations	$	473.8		$	392.1
Projected Benefit Obligations:
Beginning of year	$	392.1		$	442.5
Service cost	0.5			1.1
Interest	20.2			18.5
Benefits paid	(16.4		)	(15.8		)
Actuarial (gain)/loss	77.6			(54.2		)
Curtailment	(0.1		)	—
End of year	$	473.9		$	392.1
Plans' Assets:
Beginning of year	$	399.2		$	340.1
Actual return on assets	36.7			56.0
Employer contributions	15.0			18.9
Benefits paid	(16.4		)	(15.8		)
End of year	$	434.5		$	399.2

Consolidated Balance Sheet Components:
Other assets	$	1.2		$	17.8
Accrued liabilities	(40.4		)	(10.7		)
Net funded status	$	(39.4	)	$	7.1
Percent of projected benefit obligations funded	91.7		%	101.8		%

None of the plans' assets are expected to be returned to us during the year ending December 31, 2015.

Amounts recognized in other comprehensive income (loss)



	Year Ended December 31,
	2014			2013		2012
	(in millions)
Actuarial gain (loss)	$	(71.9	)	$	83.7	$	(48.1	)
Amortization of actuarial loss	2.1			4.9		3.2
Amortization of prior service cost	—			0.1		0.1
Curtailment	0.1			—		—
Total before income taxes	(69.7		)	88.7		(44.8		)
Income tax expense (benefit)	(25.9		)	32.9		(16.7		)
Net amount recognized in other comprehensive income (loss)	$	(43.8	)	$	55.8	$	(28.1	)

Included in AOCL at December 31, 2014 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 $138.1 million ($86.9 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, 2015 is $5.2 million ($3.3 million net of related income taxes).

Plan assets

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 for the purpose of providing the capital assets necessary to meet the financial obligations made to participants of the Company's pension 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. During 2014, the Company revised its investment policy statement allocating its pension plan assets into two portfolios as follows:

•Liability hedging portfolio - The objective of the liability hedging portfolio is to match the characteristics of the pension plans' liabilities. This portfolio consists primarily of investment grade long duration bonds.

•Growth portfolio - The objective of the growth portfolio is to focus upon total return with an acceptable level of risk. This portfolio is heavily weighted toward U.S. equities with a lesser exposure to international equities, domestic real estate investment trusts, U.S. high yield and emerging market sovereign debt.

The target allocation between these two portfolios varies on a sliding scale based on the pension plans' percentage of projected benefit obligations funded ("Funding Percentage"), beginning with a 50%/50% target allocation at a Funding Percentage of less than 100% and increasing to a 100% liability hedging portfolio target allocation at a Funding Percentage exceeding 110%. The range of target asset allocations has been determined after giving consideration to the expected returns of each asset category within the two portfolios, the expected performance of each asset category, the volatility of asset returns over time, and the complementary nature of the asset mix within the portfolio. The principal pension investment strategies include asset allocation and active asset management within approved guidelines. These assets are managed by an investment advisor.

The target and actual allocations of the plans' assets at December 31, 2014 are as follows:



	Target Allocation	December 31, 2014
Cash and cash equivalents		1	%
Liability hedging portfolio	50%	47	%
Growth portfolio	50%	52	%
Total		100	%

The estimated fair value of the plans' assets at December 31, 2014 and 2013, indicating input levels used to determine fair value are as follows:



	Fair Value Measurement as of December 31, 2014
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	4.8	$	—	$	—	$	4.8
Debt common trust funds	—		275.0		—		275.0
Equity common trust funds	—		154.7		—		154.7
	$	4.8	$	429.7	$	—	$	434.5



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

Temporary cash investments	$	7.0	$	—	$	—	$	7.0
Debt common trust funds	—		101.3		—		101.3
Equity common trust funds	—		290.9		—		290.9
	$	7.0	$	392.2	$	—	$	399.2

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.

Multiemployer plan

As a result of the acquisition of Meyer, the Company contributes to a multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covers certain union-represented employees at one of Meyer's facilities. The risks of participating in a multiemployer plan are different from a single-employer plan in the following aspects:

•Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

•If a participating employer stops contributing to a multiemployer plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

•If the Company chooses to stop participating in the multiemployer plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

Our participation in the multiemployer plan for the year ended December 31, 2014 is outlined in the table below. The Pension Protection Act ("PPA") zone status at December 31, 2014 and 2013 is as of the plan years ended December 31, 2013 and 2012, respectively, and is obtained from the multiemployer plan's regulatory filings available in the public domain and certified by the plan's actuary. Among other factors, plans in the yellow zone are less than 80% funded while plans in the red zone are less than 65% funded. Federal law requires that plans classified in the yellow or red zones adopt a funding improvement plan in order to improve the financial health of the plan. The plan utilized an amortization extension and the funding relief provided under the Internal Revenue Code and under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act in determining the zone status. The Company's contributions to the multiemployer plan were less than 5% of total contributions to the plan. The last column in the table lists the expiration date of the collective bargaining agreement to which the plan is subject.



		PPA Zone Status			Contributions for Year Ended December 31,
Pension Fund	Employer Identification Number	2014	2013	Financial improvement plan status	2014		2013		2012		Surcharge imposed	Expiration date of collective bargaining agreement
					(in millions)
Boilermaker-Blacksmith National Pension Trust	48-6168020	Yellow	Yellow	Implemented	$	0.6	$	—	$	—	No	July 3, 2016

Cash flows

Employer contributions for the year ending December 31, 2015 are expected to be $19.7 million for the defined benefit plans compared to $15.0 million contributed during 2014. Employer contributions to the 401(k) plans and the Supplemental Profit Sharing Plan for the year ending December 31, 2015 are expected to be $16.1 million compared to $14.0 million contributed during 2014. Employer contributions for the year ending December 31, 2015 are expected to be $2.7 million for the multiemployer plan compared to $0.6 million contributed during 2014.

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



	Year Ending December 31,
	(in millions)
2015	$	18.5
2016	19.8
2017	20.9
2018	22.0
2019	24.0
2020-2024	133.7

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.