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Railcar Leasing and Management Services Group
9 Months Ended
Sep. 30, 2011
Segment Information / Railcar Leasing and Management Services Group [Abstract] 
Railcar Leasing and Management Services Group
Note 5. Railcar Leasing and Management Services Group
     The Railcar Leasing and Management Services Group provides fleet management, maintenance, and leasing services. Selected consolidating financial information for the Leasing Group is as follows:
                                 
    September 30, 2011
    Leasing Group        
    Wholly-
Owned 		  TRIP   Manufacturing/    
    Subsidiaries   Holdings   Corporate   Total
            (in millions, unaudited)        
Cash, cash equivalents, and short-term marketable securities
  $ 4.2     $ —     $ 268.6     $ 272.8  
Property, plant, and equipment, net
  $ 3,104.5     $ 1,157.9     $ 510.8     $ 4,773.2  
Net deferred profit on railcars sold to the Leasing Group
    (351.5 )     (190.7 )     —       (542.2 )
 
                       
 
  $ 2,753.0     $ 967.2     $ 510.8     $ 4,231.0  
 
                               
Restricted cash
  $ 167.9     $ 61.5     $ —     $ 229.4  
 
                               
Debt:
                               
Recourse
  $ 104.6     $ —     $ 454.4     $ 559.0  
Less: unamortized discount
    —       —       (102.7 )     (102.7 )
 
                       
 
    104.6       —       351.7       456.3  
Non-recourse
    1,602.3       1,025.3       —       2,627.6  
Less: non-recourse debt owned by Trinity
    —       (112.0 )     —       (112.0 )
 
                       
Total debt
  $ 1,706.9     $ 913.3     $ 351.7     $ 2,971.9  
                                 
    December 31, 2010
    Leasing Group        
    Wholly-
Owned 		  TRIP   Manufacturing/    
    Subsidiaries   Holdings   Corporate   Total
            (in millions)        
Cash, cash equivalents, and short-term marketable securities
  $ 3.8     $ —     $ 508.2     $ 512.0  
 
                               
Property, plant, and equipment, net
  $ 2,965.4     $ 1,191.8     $ 491.4     $ 4,648.6  
Net deferred profit on railcars sold to the Leasing Group
    (340.4 )     (196.2 )     —       (536.6 )
 
                       
 
  $ 2,625.0     $ 995.6     $ 491.4     $ 4,112.0  
 
                               
Restricted cash
  $ 161.1     $ 46.0     $ —     $ 207.1  
 
                               
Debt:
                               
Recourse
  $ 108.6     $ —     $ 452.8     $ 561.4  
Less: unamortized discount
    —       —       (111.1 )     (111.1 )
 
                       
 
    108.6       —       341.7       450.3  
Non-recourse
    1,453.5       1,003.9       —       2,457.4  
 
                       
Total debt
  $ 1,562.1     $ 1,003.9     $ 341.7     $ 2,907.7  
     See Note 6 Investment in TRIP Holdings and Note 11 Debt for a further discussion regarding the Company’s investment in TRIP Holdings and TRIP Holdings’ debt.
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2011     2010     Percent     2011     2010     Percent  
    ($ in millions)     Change     ($ in millions)     Change  
Revenues:
                                               
Wholly owned subsidiaries:
                                               
Leasing and management
  $ 94.6     $ 86.1       9.9 %   $ 277.8     $ 256.2       8.4 %
Sales of cars from the lease fleet
    28.9       7.2       (1)       39.6       18.8       (1)  
 
                                       
 
    123.5       93.3       32.4       317.4       275.0       15.4  
TRIP Holdings:
                                               
Leasing and management
    29.2       28.8       1.4       87.4       87.0       0.5  
Sales of cars from the lease fleet
    0.4       —       (1)       8.5       0.9       (1)  
 
                                       
 
    29.6       28.8       2.8       95.9       87.9       9.1  
 
                                       
Total revenues
  $ 153.1     $ 122.1       25.4     $ 413.3     $ 362.9       13.9  
 
                                               
Operating Profit:
                                               
Wholly owned subsidiaries:
                                               
Leasing and management
  $ 40.3     $ 34.3             $ 116.3     $ 94.9          
Sales of cars from the lease fleet
    6.5       2.3               10.9       4.5          
 
                                       
 
    46.8       36.6               127.2       99.4          
TRIP Holdings:
                                               
Leasing and management
    17.4       16.3               51.3       50.9          
Sales of cars from the lease fleet
    —       —               0.1       —          
 
                                       
 
    17.4       16.3               51.4       50.9          
 
                                       
Total operating profit
  $ 64.2     $ 52.9             $ 178.6     $ 150.3          
 
                                               
Operating profit margin:
                                               
Leasing and management
    46.6 %     44.0 %             45.9 %     42.5 %        
Sales of cars from the lease fleet
    22.2       31.9               22.9       22.8          
Total operating profit margin
    41.9       43.3               43.2       41.4          
 
                                               
Interest and rent expense(2):
                                               
Rent expense
  $ 12.1     $ 12.2             $ 36.4     $ 36.5          
Interest expense
                                               
Wholly-owned subsidiaries
  $ 24.8     $ 21.6             $ 75.4     $ 67.2          
TRIP Holdings:
                                               
External
    15.3       11.7               37.6       35.3          
Intercompany
    3.2       —               3.2       —          
 
                                       
 
    18.5     $ 11.7               40.8     $ 35.3          
 
                                       
Total interest expense
  $ 43.3     $ 33.3             $ 116.2     $ 102.5          
 
(1) not meaningful
 
(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.
     Equipment consists primarily of railcars leased by third parties. The Leasing Group purchases equipment manufactured predominantly by the Rail Group and enters into lease contracts with third parties with terms generally ranging between one and twenty years. The Leasing Group primarily enters into operating leases. Future contractual minimum rental revenues on leases are as follows:
                                                         
    Remaining
three		                                      
    months                                      
    of 2011     2012     2013     2014     2015     Thereafter     Total  
                    (in millions)                          
Wholly-owned subsidiaries
  $ 66.5     $ 239.9     $ 191.8     $ 141.6     $ 108.9     $ 245.8     $ 994.5  
TRIP Holdings
    26.4       91.5       60.8       40.2       33.3       83.3       335.5  
 
                                         
 
  $ 92.9     $ 331.4     $ 252.6     $ 181.8     $ 142.2     $ 329.1     $ 1,330.0  
 
                                         
     Debt. The Leasing Group’s debt at September 30, 2011 consists of both recourse and non-recourse debt including debt owed by TRIP Holdings and its subsidiaries which is secured solely by the assets of TRIP Holdings. As of September 30, 2011, Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of approximately $2,442.8 million that is pledged as collateral for Leasing Group debt held by those subsidiaries, including equipment with a net book value of $51.3 million securing capital lease obligations. In July 2011, TRIP Holdings and its newly-formed subsidiary, TRIP Rail Master Funding LLC (“TRIP Master Funding”), issued $1,032.0 million in new debt and repaid all of the outstanding borrowings of the TRIP Warehouse Loan. See Note 6 Investment in TRIP Holdings for a description of TRIP Holdings and Note 11 Debt for the form, maturities, and descriptions of Leasing Group debt.
     Off Balance Sheet Arrangements. In prior years, the Leasing Group completed a series of financing transactions whereby railcars were sold to one or more separate independent owner trusts (“Trusts”). Each of the Trusts financed the purchase of the railcars with a combination of debt and equity. In each transaction, the equity participant in the Trust is considered to be the primary beneficiary of the Trust and therefore, the debt related to the Trust is not included as part of the consolidated financial statements. The Leasing Group, through newly formed, wholly-owned, qualified subsidiaries, leased railcars from the Trusts under operating leases with terms of 22 years, and subleased the railcars to independent third party customers under shorter term operating rental agreements.
     These Leasing Group subsidiaries had total assets as of September 30, 2011 of $222.9 million, including cash of $91.7 million and railcars of $98.3 million. The right, title, and interest in each sublease, cash, and railcars are pledged to collateralize the lease obligations to the Trusts and are included in the consolidated financial statements of the Company. Trinity does not guarantee the performance of the subsidiaries’ lease obligations. Certain ratios and cash deposits must be maintained by the Leasing Group’s subsidiaries in order for excess cash flow, as defined in the agreements, from the lease to third parties to be available to Trinity. 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
2011		     2012     2013     2014     2015     Thereafter     Total  
                    (in millions)                          
Future operating lease obligations of Trusts’ railcars
  $ 10.6     $ 44.5     $ 45.7     $ 44.9     $ 43.2     $ 382.0     $ 570.9  
Future contractual minimum rental revenues of Trusts’ railcars
  $ 15.2     $ 53.2     $ 37.5     $ 23.5     $ 17.7     $ 33.9     $ 181.0  
     Operating Lease Obligations. 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
2011		     2012     2013     2014     2015     Thereafter     Total  
                    (in millions)                          
Future operating lease obligations
  $ 1.4     $ 5.6     $ 5.3     $ 5.2     $ 5.2     $ 16.1     $ 38.8  
Future contractual minimum rental revenues
  $ 1.4     $ 5.2     $ 4.2     $ 3.7     $ 2.8     $ 7.0     $ 24.3  
     Operating lease obligations totaling $31.2 million are guaranteed by Trinity Industries, Inc. and certain subsidiaries. See Note 5 of the December 31, 2010 Consolidated Financial Statements filed on Form 10-K for a detailed explanation of these financing transactions.