Date of Report (Date of Earliest Event Reported): | February 20, 2019 |
Delaware | 1-6903 | 75-0225040 | ||
(State or other jurisdiction of incorporation | (Commission File No.) | (I.R.S. Employer Identification No.) | ||
2525 N. Stemmons Freeway, Dallas, Texas | 75207-2401 | |||
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: | 214-631-4420 |
Trinity Industries, Inc. | ||
February 21, 2019 | By: | /s/ James E. Perry |
Name: James E. Perry | ||
Title: Senior Vice President and Chief Financial Officer |
NEWS RELEASE | ![]() |
• | Successfully completed tax-free spin-off of Arcosa, Inc. ("Arcosa") to Trinity shareholders |
• | Reported earnings from continuing operations per common diluted share ("EPS") of $0.19 compared with $3.37 in the same quarter of last year |
◦ | EPS for the fourth quarter of 2018 included a one-time non-cash charge of $12.6 million, or $0.07 per share, associated with the write-off of assets held under capital leases in the Railcar Leasing and Management Services Group ("Leasing Group") |
◦ | EPS for the fourth quarter of 2017 included a one-time $3.03 per share benefit related to the effects of the Tax Cuts & Jobs Act (the "Tax Act") |
• | Leasing Group improved lease fleet utilization to 98.5% as of December 31, 2018, compared with 97.6% as of September 30, 2018 |
• | Lease fleet increased to 99,215 units in the wholly-owned and partially-owned lease fleet as of December 31, 2018 |
• | Rail Products Group reported railcar orders and deliveries of 8,045 and 5,285, respectively, during the fourth quarter of 2018, compared to railcar orders and deliveries of 3,180 and 6,150, respectively, during the same period last year |
• | Rail Products Group reported total railcar backlog of $3.6 billion at December 31, 2018, compared to $2.2 billion at December 31, 2017 |
• | Repurchased approximately 12.9 million shares at a cost of $280.0 million under the Company's previously announced accelerated share repurchase program |
• | Reported EPS of $0.70 compared with $3.85 in 2017 |
◦ | EPS for the full year 2017 included a one-time $3.06 per share benefit related to the Tax Act |
• | Reported total additions of 10,625 railcars to the wholly-owned and partially-owned lease fleets during 2018, an increase of 12.0% |
• | Rail Products Group delivered approximately 20,105 railcars in 2018, an increase of 9.3% from 2017 |
• | Repurchased approximately 17.2 million shares at a cost of $430.1 million |
• | Increased loan-to-value ratio of wholly-owned lease fleet to 46.6% at December 31, 2018 as compared to 25.4% at December 31, 2017 |
• | Expects earnings from continuing operations per common diluted share of $1.15 to $1.35 in 2019, an increase of 64% to 93% as compared to 2018 |
• | Expects net lease fleet investment of $1.2 billion to $1.4 billion in 2019 |
• | Expects railcar deliveries of 23,500 to 25,500 railcars from the Rail Products Group in 2019 |
Investor & Media Contact: |
Jessica Greiner |
Vice President, Investor Relations and Communications |
Trinity Industries, Inc. |
(Investors) 214/631-4420 |
(Media Line) 214/589-8909 |
Three Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Revenues | $ | 735.0 | $ | 615.4 | |||
Operating costs: | |||||||
Cost of revenues | 590.5 | 455.8 | |||||
Selling, engineering, and administrative expenses | 72.0 | 88.5 | |||||
Losses (gains) on dispositions of property: | |||||||
Net gains on lease fleet sales | (29.4 | ) | (43.4 | ) | |||
Other | 12.1 | (1.0 | ) | ||||
645.2 | 499.9 | ||||||
Operating profit | 89.8 | 115.5 | |||||
Interest expense, net | 44.5 | 43.1 | |||||
Other, net | (0.4 | ) | (1.6 | ) | |||
Income from continuing operations before income taxes | 45.7 | 74.0 | |||||
Provision (benefit) for income taxes | 17.7 | (457.9 | ) | ||||
Net income from continuing operations | 28.0 | 531.9 | |||||
Net income (loss) from discontinued operations | (0.3 | ) | 8.1 | ||||
Net income | 27.7 | 540.0 | |||||
Net income attributable to noncontrolling interest | 0.4 | 1.5 | |||||
Net income attributable to Trinity Industries, Inc. | $ | 27.3 | $ | 538.5 | |||
Net income attributable to Trinity Industries, Inc. per common share: | |||||||
Continuing operations | $ | 0.20 | $ | 3.51 | |||
Discontinued operations | — | 0.05 | |||||
Basic | $ | 0.20 | $ | 3.56 | |||
Continuing operations | $ | 0.19 | $ | 3.37 | |||
Discontinued operations | — | 0.05 | |||||
Diluted | $ | 0.19 | $ | 3.42 | |||
Weighted average number of shares outstanding: | |||||||
Basic | 137.6 | 148.4 | |||||
Diluted | 138.9 | 154.7 |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Revenues | $ | 2,509.1 | $ | 2,397.4 | |||
Operating costs: | |||||||
Cost of revenues | 1,938.8 | 1,775.2 | |||||
Selling, engineering, and administrative expenses | 296.6 | 339.3 | |||||
Losses (gains) on dispositions of property: | |||||||
Net gains on lease fleet sales | (50.4 | ) | (83.5 | ) | |||
Other | 9.0 | (1.9 | ) | ||||
2,194.0 | 2,029.1 | ||||||
Operating profit | 315.1 | 368.3 | |||||
Interest expense, net | 167.4 | 173.6 | |||||
Other, net | (3.9 | ) | (0.7 | ) | |||
Income from continuing operations before income taxes | 151.6 | 195.4 | |||||
Provision for income taxes | 42.6 | (414.8 | ) | ||||
Net income from continuing operations | 109.0 | 610.2 | |||||
Net income from discontinued operations | 54.1 | 103.4 | |||||
Net income | 163.1 | 713.6 | |||||
Net income attributable to noncontrolling interest | 3.8 | 11.1 | |||||
Net income attributable to Trinity Industries, Inc. | $ | 159.3 | $ | 702.5 | |||
Net income attributable to Trinity Industries, Inc. per common share: | |||||||
Basic | |||||||
Continuing operations | $ | 0.72 | $ | 3.94 | |||
Discontinued operations | 0.37 | 0.68 | |||||
Basic | $ | 1.09 | $ | 4.62 | |||
Diluted | |||||||
Continuing operations | $ | 0.70 | $ | 3.85 | |||
Discontinued operations | 0.37 | 0.67 | |||||
Diluted | $ | 1.07 | $ | 4.52 | |||
Weighted average number of shares outstanding: | |||||||
Basic | 144.0 | 148.6 | |||||
Diluted | 146.4 | 152.0 |
Three Months Ended December 31, | |||||||
Revenues: | 2018 | 2017 | |||||
Railcar Leasing and Management Services Group | $ | 227.3 | $ | 197.1 | |||
Rail Products Group | 694.7 | 638.0 | |||||
All Other | 89.7 | 80.3 | |||||
Segment Totals before Eliminations | 1,011.7 | 915.4 | |||||
Eliminations - Lease subsidiary (1) | (258.2 | ) | (290.8 | ) | |||
Eliminations - Other | (18.5 | ) | (9.2 | ) | |||
Consolidated Total | $ | 735.0 | $ | 615.4 | |||
Three Months Ended December 31, | |||||||
Operating profit (loss): | 2018 | 2017 | |||||
Railcar Leasing and Management Services Group | $ | 96.0 | $ | 128.1 | |||
Rail Products Group | 44.1 | 73.4 | |||||
All Other | 7.9 | (1.7 | ) | ||||
Segment Totals before Eliminations and Corporate Expenses | 148.0 | 199.8 | |||||
Corporate | (34.2 | ) | (47.3 | ) | |||
Eliminations - Lease subsidiary (1) | (23.9 | ) | (38.1 | ) | |||
Eliminations - Other | (0.1 | ) | 1.1 | ||||
Consolidated Total | $ | 89.8 | $ | 115.5 |
Year Ended December 31, | |||||||
Revenues: | 2018 | 2017 | |||||
Railcar Leasing and Management Services Group | $ | 842.8 | $ | 843.2 | |||
Rail Products Group | 2,346.7 | 2,044.0 | |||||
All Other | 361.3 | 333.1 | |||||
Segment Totals before Eliminations | 3,550.8 | 3,220.3 | |||||
Eliminations - Lease subsidiary (1) | (990.0 | ) | (788.6 | ) | |||
Eliminations - Other | (51.7 | ) | (34.3 | ) | |||
Consolidated Total | $ | 2,509.1 | $ | 2,397.4 | |||
Year Ended December 31, | |||||||
Operating profit (loss): | 2018 | 2017 | |||||
Railcar Leasing and Management Services Group | $ | 351.1 | $ | 444.5 | |||
Rail Products Group | 172.1 | 196.3 | |||||
All Other | 35.7 | 1.4 | |||||
Segment Totals before Eliminations and Corporate Expenses | 558.9 | 642.2 | |||||
Corporate | (149.0 | ) | (175.1 | ) | |||
Eliminations - Lease subsidiary (1) | (95.1 | ) | (96.5 | ) | |||
Eliminations - Other | 0.3 | (2.3 | ) | ||||
Consolidated Total | $ | 315.1 | $ | 368.3 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
($ in millions) | |||||||||||||||
Revenues: | |||||||||||||||
Leasing and management | $ | 194.2 | $ | 191.2 | $ | 728.9 | $ | 743.6 | |||||||
Sales of railcars owned one year or less at the time of sale(1) | 33.1 | 5.9 | 113.9 | 99.6 | |||||||||||
Total revenues | $ | 227.3 | $ | 197.1 | $ | 842.8 | $ | 843.2 | |||||||
Operating profit: | |||||||||||||||
Leasing and management | $ | 75.2 | $ | 84.5 | $ | 291.8 | $ | 341.3 | |||||||
Railcar sales(1): | |||||||||||||||
Railcars owned one year or less at the time of sale | 4.0 | 0.3 | 21.5 | 19.7 | |||||||||||
Railcars owned more than one year at the time of sale | 29.4 | 43.3 | 50.4 | 83.5 | |||||||||||
Property disposition losses(2) | (12.6 | ) | — | (12.6 | ) | — | |||||||||
Total operating profit | $ | 96.0 | $ | 128.1 | $ | 351.1 | $ | 444.5 | |||||||
Operating profit margin: | |||||||||||||||
Leasing and management | 38.7 | % | 44.2 | % | 40.0 | % | 45.9 | % | |||||||
Railcar sales | * | * | * | * | |||||||||||
Total operating profit margin | 42.2 | % | 65.0 | % | 41.7 | % | 52.7 | % | |||||||
Selected expense information(3): | |||||||||||||||
Depreciation | $ | 55.7 | $ | 43.8 | $ | 196.6 | $ | 172.3 | |||||||
Maintenance and compliance | $ | 23.8 | $ | 27.0 | $ | 99.3 | $ | 96.4 | |||||||
Rent | $ | 12.7 | $ | 9.9 | $ | 42.4 | $ | 39.9 | |||||||
Selling, engineering, and administrative expenses | $ | 14.4 | $ | 12.6 | $ | 51.1 | $ | 50.7 | |||||||
Interest | $ | 41.1 | $ | 31.8 | $ | 142.3 | $ | 125.8 |
December 31, 2018 | December 31, 2017 | ||||
Leasing portfolio information: | |||||
Portfolio size (number of railcars): | |||||
Wholly-owned | 74,565 | 63,915 | |||
Partially-owned | 24,650 | 24,675 | |||
99,215 | 88,590 | ||||
Managed (third-party owned) | 21,635 | 25,460 | |||
120,850 | 114,050 | ||||
Portfolio utilization (Company-owned railcars) | 98.5 | % | 96.8 | % |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Proceeds from sales of leased railcars: | |||||||
Leasing Group: | |||||||
Railcars owned one year or less at the time of sale | $ | 113.9 | $ | 99.6 | |||
Railcars owned more than one year at the time of sale | 230.5 | 360.7 | |||||
$ | 344.4 | $ | 460.3 |
December 31, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | $ | 179.2 | $ | 778.6 | |||
Short-term marketable securities | — | 319.5 | |||||
Receivables, net of allowance | 276.6 | 204.4 | |||||
Income tax receivable | 40.4 | 24.0 | |||||
Inventories | 524.7 | 402.8 | |||||
Restricted cash | 171.6 | 195.2 | |||||
Net property, plant, and equipment | 6,334.4 | 5,557.8 | |||||
Goodwill | 208.8 | 208.8 | |||||
Assets of discontinued operations | — | 1,654.2 | |||||
Other assets | 253.5 | 197.9 | |||||
$ | 7,989.2 | $ | 9,543.2 | ||||
Accounts payable | $ | 212.1 | $ | 119.5 | |||
Accrued liabilities | 368.3 | 321.9 | |||||
Debt | 4,029.2 | 3,241.9 | |||||
Deferred income | 17.7 | 20.5 | |||||
Deferred income taxes | 743.1 | 728.3 | |||||
Liabilities of discontinued operations | — | 198.4 | |||||
Other liabilities | 56.8 | 54.7 | |||||
Stockholders' equity: | |||||||
Trinity Industries, Inc. | 2,210.8 | 4,501.1 | |||||
Noncontrolling interest | 351.2 | 356.9 | |||||
2,562.0 | 4,858.0 | ||||||
$ | 7,989.2 | $ | 9,543.2 |
December 31, 2018 | December 31, 2017 | ||||||
Property, Plant, and Equipment | |||||||
Manufacturing/Corporate: | |||||||
Property, plant, and equipment | $ | 963.2 | $ | 991.6 | |||
Accumulated depreciation | (592.3 | ) | (595.8 | ) | |||
370.9 | 395.8 | ||||||
Leasing: | |||||||
Wholly-owned subsidiaries: | |||||||
Machinery and other | 13.5 | 10.7 | |||||
Equipment on lease | 5,934.8 | 4,987.6 | |||||
Accumulated depreciation | (971.8 | ) | (858.3 | ) | |||
4,976.5 | 4,140.0 | ||||||
Partially-owned subsidiaries: | |||||||
Equipment on lease | 2,371.9 | 2,315.5 | |||||
Accumulated depreciation | (557.2 | ) | (492.8 | ) | |||
1,814.7 | 1,822.7 | ||||||
Deferred profit on railcars sold to the Leasing Group | (1,030.0 | ) | (974.9 | ) | |||
Accumulated amortization | 202.3 | 174.2 | |||||
(827.7 | ) | (800.7 | ) | ||||
$ | 6,334.4 | $ | 5,557.8 |
December 31, 2018 | December 31, 2017 | ||||||
Debt | |||||||
Corporate - Recourse: | |||||||
Revolving credit facility | $ | — | $ | — | |||
Senior notes, net of unamortized discount of $0.3 and $0.3 | 399.7 | 399.7 | |||||
Convertible subordinated notes, net of unamortized discount of $- and $8.2 | — | 441.2 | |||||
399.7 | 840.9 | ||||||
Less: unamortized debt issuance costs | (2.3 | ) | (2.9 | ) | |||
397.4 | 838.0 | ||||||
Leasing: | |||||||
Wholly-owned subsidiaries: | |||||||
Recourse: | |||||||
Capital lease obligations | — | 28.3 | |||||
— | 28.3 | ||||||
Non-recourse: | |||||||
Secured railcar equipment notes | 1,301.3 | 591.6 | |||||
TILC warehouse facility | 374.8 | 150.7 | |||||
Promissory notes | 660.2 | 293.6 | |||||
2,336.3 | 1,035.9 | ||||||
Less: unamortized debt issuance costs | (19.7 | ) | (11.1 | ) | |||
2,316.6 | 1,024.8 | ||||||
Partially-owned subsidiaries - non-recourse: | |||||||
Secured railcar equipment notes | 1,327.9 | 1,365.3 | |||||
Less: unamortized debt issuance costs | (12.7 | ) | (14.5 | ) | |||
1,315.2 | 1,350.8 | ||||||
$ | 4,029.2 | $ | 3,241.9 |
December 31, 2018 | December 31, 2017 | ||||||
Leasing Debt Summary | |||||||
Total Recourse Debt | $ | — | $ | 28.3 | |||
Total Non-Recourse Debt | 3,631.8 | 2,375.6 | |||||
$ | 3,631.8 | $ | 2,403.9 | ||||
Total Leasing Debt | |||||||
Wholly-owned subsidiaries | $ | 2,316.6 | $ | 1,053.1 | |||
Partially-owned subsidiaries | 1,315.2 | 1,350.8 | |||||
$ | 3,631.8 | $ | 2,403.9 | ||||
Equipment on Lease(1) | |||||||
Wholly-owned subsidiaries | $ | 4,976.5 | $ | 4,140.0 | |||
Partially-owned subsidiaries | 1,814.7 | 1,822.7 | |||||
$ | 6,791.2 | $ | 5,962.7 | ||||
Total Leasing Debt as a % of Equipment on Lease | |||||||
Wholly-owned subsidiaries | 46.6 | % | 25.4 | % | |||
Partially-owned subsidiaries | 72.5 | % | 74.1 | % | |||
Combined | 53.5 | % | 40.3 | % |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Operating activities: | |||||||
Net income | $ | 163.1 | $ | 713.6 | |||
Income from discontinued operations, net of income taxes | (54.1 | ) | (103.4 | ) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 251.9 | 229.7 | |||||
Provision (benefit) for deferred income taxes | 57.9 | (357.1 | ) | ||||
Net gains on railcar lease fleet sales owned more than one year at the time of sale | (50.4 | ) | (83.5 | ) | |||
Other | 48.3 | 50.8 | |||||
Changes in assets and liabilities: | |||||||
(Increase) decrease in receivables | (88.5 | ) | 117.2 | ||||
(Increase) decrease in inventories | (122.0 | ) | 8.9 | ||||
Increase (decrease) in accounts payable and accrued liabilities | 144.2 | 61.2 | |||||
Other | (76.2 | ) | (27.3 | ) | |||
Net cash provided by operating activities - continuing operations | 274.2 | 610.1 | |||||
Net cash provided by operating activities - discontinued operations | 104.9 | 151.5 | |||||
Net cash provided by operating activities | 379.1 | 761.6 | |||||
Investing activities: | |||||||
Proceeds from railcar lease fleet sales owned more than one year at the time of sale | 230.5 | 360.7 | |||||
Proceeds from disposition of property and other assets | 17.1 | 7.8 | |||||
Capital expenditures - leasing, net of sold lease fleet railcars owned one year or less with a net cost of $92.4 and $79.9 | (948.3 | ) | (608.3 | ) | |||
Capital expenditures - manufacturing and other | (37.3 | ) | (22.0 | ) | |||
(Increase) decrease in short-term marketable securities | 319.5 | (84.8 | ) | ||||
Other | 6.2 | 0.3 | |||||
Net cash required by investing activities - continuing operations | (412.3 | ) | (346.3 | ) | |||
Net cash required by investing activities - discontinued operations | (78.2 | ) | (126.4 | ) | |||
Net cash required by investing activities | (490.5 | ) | (472.7 | ) | |||
Financing activities: | |||||||
Payments to retire debt | (887.8 | ) | (375.3 | ) | |||
Proceeds from issuance of debt | 1,206.6 | 533.5 | |||||
Shares repurchased | (506.1 | ) | (79.4 | ) | |||
Dividends paid to common shareholders | (77.4 | ) | (72.6 | ) | |||
Purchase of shares to satisfy employee tax on vested stock | (12.2 | ) | (14.4 | ) | |||
Distributions to noncontrolling interest | (10.9 | ) | (48.7 | ) | |||
Other | (3.3 | ) | 0.2 | ||||
Net cash required by financing activities - continuing operations | (291.1 | ) | (56.7 | ) | |||
Cash distributions to Arcosa, Inc. in connection with the spin-off transaction | (220.5 | ) | — | ||||
Net cash required by financing activities | (511.6 | ) | (56.7 | ) | |||
Net increase (decrease) in cash, cash equivalents, and restricted cash | (623.0 | ) | 232.2 | ||||
Cash, cash equivalents, and restricted cash at beginning of period | 973.8 | 741.6 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 350.8 | $ | 973.8 |
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | ||||||||||||||||||||
Income | Average Shares | EPS | Income | Average Shares | EPS | ||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 27.6 | $ | 530.4 | |||||||||||||||||
Unvested restricted share participation | (0.6 | ) | (10.1 | ) | |||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. – basic | 27.0 | 137.6 | $ | 0.20 | 520.3 | 148.4 | $ | 3.51 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Nonparticipating unvested restricted shares and stock options | — | 1.3 | — | 0.8 | |||||||||||||||||
Convertible subordinated notes | — | — | 0.4 | 5.5 | |||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. – diluted | $ | 27.0 | 138.9 | $ | 0.19 | $ | 520.7 | 154.7 | $ | 3.37 | |||||||||||
Net income from discontinued operations, net of taxes | $ | (0.3 | ) | $ | 8.1 | ||||||||||||||||
Unvested restricted share participation | — | (0.4 | ) | ||||||||||||||||||
Net income from discontinued operations, net of taxes – basic | (0.3 | ) | 137.6 | $ | — | 7.7 | 148.4 | $ | 0.05 | ||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Nonparticipating unvested restricted shares and stock options | — | 1.3 | — | 0.8 | |||||||||||||||||
Convertible subordinated notes | — | — | — | 5.5 | |||||||||||||||||
Net income from discontinued operations, net of taxes – diluted | $ | (0.3 | ) | 138.9 | $ | — | $ | 7.7 | 154.7 | $ | 0.05 |
Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||||||||||||
Income | Average Shares | EPS | Income | Average Shares | EPS | ||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 105.2 | $ | 599.1 | |||||||||||||||||
Unvested restricted share participation | (2.2 | ) | (13.5 | ) | |||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. – basic | 103.0 | 144.0 | $ | 0.72 | 585.6 | 148.6 | $ | 3.94 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Nonparticipating unvested restricted shares and stock options | — | 1.0 | — | 0.5 | |||||||||||||||||
Convertible subordinated notes | — | 1.4 | 0.3 | 2.9 | |||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. – diluted | $ | 103.0 | 146.4 | $ | 0.70 | $ | 585.9 | 152.0 | $ | 3.85 | |||||||||||
Net income from discontinued operations, net of taxes | $ | 54.1 | $ | 103.4 | |||||||||||||||||
Unvested restricted share participation | (0.6 | ) | (1.9 | ) | |||||||||||||||||
Net income from discontinued operations, net of taxes – basic | 53.5 | 144.0 | $ | 0.37 | 101.5 | 148.6 | $ | 0.68 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Nonparticipating unvested restricted shares and stock options | — | 1.0 | — | 0.5 | |||||||||||||||||
Convertible subordinated notes | — | 1.4 | — | 2.9 | |||||||||||||||||
Net income from discontinued operations, net of taxes – diluted | $ | 53.5 | 146.4 | $ | 0.37 | $ | 101.5 | 152.0 | $ | 0.67 |
Three Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Net income from continuing operations | $ | 28.0 | $ | 531.9 | |||
Add: | |||||||
Interest expense | 46.4 | 46.5 | |||||
Provision for income taxes | 17.7 | (457.9 | ) | ||||
Depreciation and amortization expense | 67.7 | 57.3 | |||||
Earnings before interest expense, income taxes, and depreciation and amortization expense | $ | 159.8 | $ | 177.8 |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Net income from continuing operations | $ | 109.0 | $ | 610.2 | |||
Add: | |||||||
Interest expense | 179.3 | 184.0 | |||||
Provision for income taxes | 42.6 | (414.8 | ) | ||||
Depreciation and amortization expense | 251.9 | 229.7 | |||||
Earnings before interest expense, income taxes, and depreciation and amortization expense | $ | 582.8 | $ | 609.1 |
Total Company: | ||
Total earnings per share(1) | $1.15 - $1.35 per share | |
Corporate expense | $115 - $125 million | |
Interest expense, net | $225 million | |
Tax rate | 27 | % |
Railcar Leasing and Management Services Group: | ||
Leasing and Management revenues(2) | $770 - $785 million | |
Leasing and Management operating profit(3) | $310 - $320 million | |
Proceeds from sales of leased railcars to RIV partners and secondary market | $350 million | |
Rail Products Group: | ||
Revenue | $3.1 - $3.3 billion | |
Operating margin | 9.0% - 9.5% | |
Railcar deliveries | 23,500 to 25,500 railcars | |
Revenue elimination from sales to Leasing Group(4) | $1.4 billion | |
Operating profit elimination from sales to Leasing Group(4) | $160 million | |
All Other Group Operating Profit (5) | $10 million | |
• | “Wholly Owned” references the portfolio of leased railcars that are entirely owned by TrinityRail. |
• | “Partially Owned” references the portfolio of leased railcars we own in participation with an institutional lender. |
• | “Managed” is the term we use for the portfolio of railcars owned by institutional investors for whom TrinityRail provides turnkey services. Leveraging our operating capabilities enables them to receive the economic benefits of a full service operating lease while foregoing the significant infrastructure investment that would be required to be a premier service provider. TrinityRail receives fee income in return for providing these services. |
• | “Renewals” are leases that, upon reaching the end of their term, remain in service with the prior lessee at a newly negotiated lease rate reflective of the prevailing market at the time of the renewal. |
• | “Assignments” refers to leases that, upon reaching the end of their term, result in the return of the railcars to TrinityRail and placement with another customer on a new lease at the then prevailing market rate. |
• | “Originations” are newly manufactured TrinityRail railcars with an attached lease |
• | The term “Secondary Market” denotes an alternative sourcing channel for leased assets made available for purchase by other railcar owners. Examples of other railcar owners would be other leasing companies, banks, institutional investors, industrial shippers, railroads, and so on |
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