8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of The
Securities and Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 6, 2004

TRINITY INDUSTRIES, INC.

Delaware
(State of incorporation) 1-6903
(Commission File No.) 75-0225040
(IRS Employer Identification No. )

2525 Stemmons Freeway, Dallas, Texas
(Address of principal executive offices) 75207-2401
(Zip Code)

Registrant’s telephone number, including area code: (214) 631-4420

TABLE OF CONTENTS

	Item 9. Regulation FD Disclosure
	Item 12. Results of Operations and Financial Condition
SIGNATURE
EXHIBIT INDEX
News Release
Conference Call Script of Neil O Shoop
Conference Call Script of John L Adams
Conference Call Script of Timothy R Wallace
Conference Call Script of D Stephen Menzies
Conference Call Script of Jim S Ivy

Item 9. Regulation FD Disclosure
Item 12. Results of Operations and Financial Condition

     The following information is furnished pursuant to both Item 9 and Item 12.

     The Registrant hereby furnishes the information set forth in its News Release, dated May 5, 2004 announcing operating results for the first quarter of 2004, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On May 6, 2004 the Registrant held a conference call and web cast with respect to its financial results for the first quarter of 2004. The conference call scripts of Neil O. Shoop, Treasurer, John L. Adams, Executive Vice President, Timothy R. Wallace, Chairman, President and Chief Executive Officer, D. Stephen Menzies, President of Trinity Industries Leasing Company, and Jim S. Ivy, Senior Vice President and Chief Financial Officer are furnished as exhibits 99.2, 99.3, 99.4, 99.5 and 99.6 respectively, and incorporated herein by reference.

     This information is not “filed” pursuant to the Securities and Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submissions of this report on Form 8-K is not an admission as to the materiality of any information in this report that is required to be disclosed solely by Regulation FD.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TRINITY INDUSTRIES, INC.
By:	/s/ Michael G. Fortado
	Michael G. Fortado
	Vice President and Secretary

Date: May 6, 2004

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
Exhibit 99.1	News Release of Registrant dated May 5, 2004 with respect to the operating results for the first quarter of 2004.
Exhibit 99.2	Conference call script of May 6, 2004 of Neil O. Shoop, Treasurer.
Exhibit 99.3	Conference call script of May 6, 2004 of John L. Adams, Executive Vice President.
Exhibit 99.4	Conference call script of May 6, 2004 of Timothy R. Wallace, Chairman, President and Chief Executive Officer.
Exhibit 99.5	Conference call script of May 6, 2004 of D. Stephen Menzies, President of Trinity Industries Leasing Company.
Exhibit 99.6	Conference call script of May 6, 2004 of Jim S. Ivy, Senior Vice President and Chief Financial Officer.

EX-99.1

Exhibit 99.1

NEWS RELEASE

Media Contact:	Investor Contact:
Nancy Farrar	Neil Shoop
Farrar Public Relations	Treasurer
(817)937-1557	(214)589-8561

FOR IMMEDIATE RELEASE

Trinity Industries Reports Operating Results

For First Quarter of 2004

     DALLAS, TEXAS – May 5, 2004 – Trinity Industries, Inc., (NYSE:TRN) today reported financial results for the first quarter of 2004.

     For the quarter ended March 31, 2004, the company reported a net loss of $10.8 million, or 25 cents per diluted share, on revenues of $454.9 million. This compares to a net loss of $14.5 million, or 32 cents per diluted share, on revenues of $289.1 million in the first quarter of 2003. The first quarter of 2004 included an after-tax loss provision of $4.8 million (10 cents per diluted share) due to the effect of cost increases in steel and components containing steel on certain rail and barge contracts that will be completed during the remainder of 2004. The first quarter of 2004 also included an after-tax charge of $769,000 (2 cents per diluted share) related to the early retirement of the company’s term debt that was repaid with a portion of the proceeds from the issuance of $300 million senior notes during the quarter.

     “Our North American railcar backlog grew to over 17,000 railcars, or more than double the backlog at this time last year, and year-over-year revenues in the Rail Group were up $111.8 million, or 75 percent,” said Timothy R. Wallace, Trinity’s Chairman, President, and CEO. “The operating results of the Rail Group were unfavorably impacted by start-up costs related to reopening plants, sales mix, steel costs, and availability of materials.”

     “We had year-over-year top-line growth in all of our business segments except for our Inland Barge Group,” added Wallace. “Escalating steel costs are affecting margins primarily in our Rail and Inland Barge Groups. We are beginning to see scrap surcharge price reductions and hope that trend continues. Our Railcar Leasing and Management Services Group increased revenues and operating profits as a result of expansion of our lease fleet and increased utilization year over year.”

     Trinity Industries, Inc., with headquarters in Dallas, Texas, is one of the nation’s leading diversified industrial companies. Trinity reports five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group and the Industrial Products Group. Trinity’s web site can be accessed at http://www.trin.net.

     This news release contains “forward looking statements” as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to expectations, intentions, and predictions of future financial performance. Statements that are not historical facts are forward looking. Readers are directed to Trinity’s Form 10-K and other SEC filings for a description of certain of the business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward looking statements. Any forward looking statement speaks only as of the date on which such statement is made. Trinity undertakes no obligation to update any forward looking statement or statements to reflect events or circumstances after the date on which such statement is made.

- TABLES TO FOLLOW -

Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)

	Three Months
	Ended March 31,
	2004			2003
Revenues	$	454.9		$	289.1
Operating loss	$	(6.5	)	$	(11.4	)
Other expense		10.0			8.6
Loss before income taxes		(16.5	)		(20.0	)
Provision (benefit) for income taxes		(5.7	)		(5.5	)
Net loss		(10.8	)		(14.5	)
Dividends on Series B preferred stock		(0.8	)		––
Loss applicable to common share	$	(11.6	)	$	(14.5	)
Loss per common share:
Basic	$	(0.25	)	$	(0.32	)
Diluted	$	(0.25	)	$	(0.32	)
Weighted average number of shares outstanding:
Basic		46.2			45.5
Diluted		46.2			45.5

Trinity Industries, Inc.
Condensed Segment Data
(in millions)

Revenues:

	Three Months
	Ended March 31,
	2004			2003
Rail Group	$	260.9		$	149.1
Construction Products Group		120.1			103.5
Inland Barge Group		43.3			44.1
Industrial Products Group		31.8			28.5
Railcar Leasing and Management Services Group		35.1			28.5
All Other		7.6			7.3
Eliminations		(43.9	)		(71.9	)
Total revenues	$	454.9		$	289.1

Operating profit (loss):

	Three Months
	Ended March 31,
	2004			2003
Rail Group	$	(3.6	)	$	(10.3	)
Construction Products Group		2.0			3.1
Inland Barge Group		(5.7	)		(0.8	)
Industrial Products Group		0.8			––
Railcar Leasing & Management Services Group		9.6			8.6
All Other		1.3			(0.9	)
Corporate & Eliminations		(10.9	)		(11.1	)
Consolidated	$	(6.5	)	$	(11.4	)

Trinity Industries, Inc.
Condensed Consolidated Balance Sheet
(in millions)

	March 31,			December 31,
	2004			2003
Cash and equivalents	$	151.3		$	46.0
Accounts receivable		235.3			198.1
Inventories		275.8			258.0
Net property, plant and equipment, at cost (1)		934.4			945.2
Other assets		569.4			560.6
	$	2,166.2		$	2,007.9
Accounts payable and accrued liabilities	$	444.9		$	460.2
Debt (2)		584.2			395.2
Deferred income		30.4			32.2
Other liabilities		52.7			58.7
Series B preferred stock		57.9			57.8
Stockholders’ equity		996.1			1,003.8
	$	2,166.2		$	2,007.9
(1) Property, Plant and Equipment
Corporate/Manufacturing:
Property, plant and equipment	$	869.8		$	868.6
Accumulated depreciation		(572.2	)		(569.0	)
		297.6			299.6
Leasing:
Equipment on lease		754.4			758.5
Accumulated depreciation		(117.6	)		(112.9	)
		636.8			645.6
	$	934.4		$	945.2
(2) Debt
Corporate/Manufacturing — Recourse
Revolving commitment	$	—		$	—
Term commitment		—			122.8
Senior notes		300.0			—
Other		5.6			5.7
		305.6			128.5
Leasing — Recourse
Equipment trust certificates		170.0			170.0
Other		—			—
		170.0			170.0
Leasing — Non-recourse
Warehouse facility		108.6			71.1
Other		—			25.6
		108.6			96.7
	$	584.2		$	395.2

- END -

EX-99.2

Exhibit 99.2

First Quarter Results Conference Call
May 6, 2004

Neil Shoop:

Thank you Krissy

A. Good morning from Dallas, Texas and Welcome to the Trinity Industries’ First Quarter Results Conference Call. I’m Neil Shoop, Treasurer for Trinity. Thank you for being with us today. First, I would like to apologize for the wrong dial-in number being provided. Our conference call provider Connex sent us an incorrect dial-in number.

1. With me today are:

a.	Tim Wallace, Chairman, President and Chief Executive Officer
b.	John Adams, Executive Vice President
c.	Jim Ivy, Sr. Vice President and Chief Financial Officer
d.	Chas Michel, Vice President, Controller, and
e.	Steve Menzies, President of Trinity Industries Leasing Company

2.	A replay of this conference call will be available starting one hour after the conference call ends today through midnight on Thursday, May, 13th.
3.	The replay number is (402) 351-0788.

B. I would also like to welcome our audio webcast listeners today. Replay of this broadcast will also be available on our website located at www.trin.net.

1. In a moment, John Adams, Tim Wallace, Steve Menzies and Jim Ivy will have some brief comments. Following that, we’ll move to the Q&A session.

C. Before we get started, let me remind you that:

“Today’s conference call contains forward looking statements as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to expectations, intentions and predictions of future financial performance. Statements that are not historical facts are forward looking. Participants are directed to Trinity’s Form 10-K and other SEC filings for a description of certain of the business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward looking statements.

D. Now, here’s John Adams. John ...

John
Tim
Steve
Jim

E. Thanks, Jim. Now our operator will prepare us for the Q & A session.

Krissy.

Q & A Session

Thanks, Krissy.

1. This concludes today’s conference call.

2. Remember, a replay of this call will be available starting one hour after this call ends today through midnight, Thursday, May 13th.

3. The access number is (402) 351-0788.

4. Also, this replay will be available on our website located at www.trin.net.

5. We look forward to visiting with you again on our next conference call.

6. Thank you for joining us this morning.

EX-99.3

Exhibit 99.3

Trinity Industries, Inc.
Earnings Release Conference Call
John L. Adams, Executive Vice President
May 6, 2004

     Shortly after our most recent conference call, we decided to go to the capital markets for longer term debt financing and also to renew our bank credit financing. We hired JPMorgan and CSFB to be joint book runners on a $300 million, 10-year financing and asked JPMorgan, our existing bank agent, to extend and amend our bank financing.

     On March 10 we funded a $300 million, 10-year, 5-year no call term loan at 6 1/2%. The market was very receptive and we are most pleased with the quality of our investors and the work of JPMorgan and CSFB. Because this was our first public debt for the parent company in some years, I believe that not only is it attractive financing but it should also be of benefit to us if, and/or when, we decide to approach the debt markets again. Our people did a very nice job in finalizing this financing.

     At the same time, we also amended our bank agreement, which is now for $250 million and will expire in March 2007. Our borrowing rate was lowered; property, plant, and equipment were released as collateral; and covenants were amended to allow us greater borrowing flexibility. Bank of America joined our existing banks in participating, and JPMorgan is the agent. This financing was oversubscribed as well.

     At March 31, our only borrowing at the corporate level was the $300 million previously mentioned and $5.6 million of other indebtedness. The Leasing Company had the $170 million Equipment Trust Certificates indebtedness outstanding and $108.6 million owing under our $300 million railcar leasing warehouse facility. Although the leasing warehouse facility matures in August, we expect at that time CSFB, the lead, and the two other participants will renew it for another year. This financing has been most helpful to our Leasing subsidiary. At March 31, our cash position exceeded $150 million.

     Our balance sheet is much improved and with these two financings, the company has the flexibility needed to finance the improved opportunities we see in our markets.

EX-99.4

Exhibit 99.4

Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Tim Wallace, Chairman, President and CEO
May 6, 2004

Good morning. During the first quarter our earnings were affected by a variety of supply issues and lingering winter weather conditions. Our manufacturing businesses incurred steel price increases, and a few of these businesses were affected by delays in deliveries and by spot shortages.

Steel prices are fluctuating on a month-to-month basis. During the past few months we have worked diligently to overcome obstacles associated with managing through a time period of unusually high steel price increases. We have set up new internal processes to account for the unique aspects of this situation. I wish I could say that we have a crystal ball that allows us to project future steel prices.

We have recently seen a downward movement on scrap steel surcharges. We will continue to report on a quarterly basis the significant adjustments we incur. Generally speaking, it doesn’t appear that steel prices will retreat as quickly as they increased. If this is the case, the window of opportunity for inexpensive steel-based products may be closed for a while.

During the 1st quarter we modified our sales quotes in order to account for steel cost increases. Some of our customers responded by ordering products to protect their positions while a few others have taken a wait-and-see approach. Generally speaking, I think the market has accepted the fact that steel prices have changed the pricing landscape for a period of time.

Our 1st quarter results reflect reduced margins on current shipments due to steel price increases as well as some reserves for future contracts that are estimated to be at a loss. In situations where we have contracts that are projected to generate a loss, we must record the estimated loss during the quarter in which this information becomes apparent to us. Jim Ivy will provide further details in his update.

Needless to say, this is a very challenging time period for companies that use steel in their manufacturing processes. Fortunately, our Leasing Company’s financial performance was not affected by these issues and continued to provide strong earnings.

As John mentioned, we took steps during the 1st quarter to enhance our balance sheet. I was very pleased with the smoothness and efficiency of our refinancing. It appears our timing was very good. I am pleased with the flexibility our new financing provides us.

At this point, I’ll provide a brief operational overview of our non-rail businesses and then our rail businesses. Steve Menzies will comment on our North American railcar market and our Leasing Company’s performance.

During the 1st quarter, our construction businesses were affected by winter weather conditions. Fortunately, the weather has improved and we are seeing a significant improvement in our construction-related businesses.

Generally speaking, we have been able to revise our prices in our highway safety business to reflect current steel costs. During the past 30 days our business volume and margins have improved on a year-over-year comparison basis. Our access to steel is helping generate sales in this business. In our bridge steel business, the majority of our orders have firm prices. As strange as it may sound, we felt a little fortunate not to have a large backlog in this business. The demand for bridge steel in our market region continues to be low. Our concrete and aggregates business maintained a strong demand throughout the winter, but the weather impacted our ability to deliver these products. As the weather improved in March and April, we resumed our normal delivery pace. We are experiencing cost increases in cement and we are in the process of raising prices.

Our industrial products group performed better during the 1st quarter of this year than in 2003. This business normally operates with a short-term backlog and we price our products based on the current costs of our steel. Several of our customers purchased tanks during this year’s 1st quarter to avoid price increases. The demand for large storage tanks has not surfaced like it normally does in the spring. We think this may be as a result of the rising steel prices. We expect to convert some of our large tank capacity to wind tower structures.

During the 1st quarter, our barge group continued to be affected by the increase in steel prices and by litigation expenses. Jim Ivy will provide some specific data on this during his update. On a positive note, we recently sold some barges at prices that reflect the current price of steel. Our customers are expressing needs for barges but several are waiting to see what the prices will do. Our backlogs almost carry us through the end of the year.

Discovery and pre-trial proceedings continue in our barge litigation. During the 1st quarter we announced that we settled the original barge litigation suit that was filed against us in 2002. In conjunction with this settlement we implemented a barge-monitoring program. We believe this is a fair and equitable means for resolving these issues. It has always been our position that the corrosion issues are directly related to the environmental conditions within the void spaces. It will be most helpful for us to be able to monitor these conditions. Our other barge litigation suits are described in detail in our 10Q.

Now I’ll touch on some of the highlights pertaining to our railcar businesses. Our lst quarter shipments in Europe increased 42% over the 4th quarter to approximately 760 units. We do not see this as a sustainable level. Our 2nd quarter shipments should be in the 600–650 units range. The market demand remains relatively low in Europe.

We have also started seeing the effects of higher steel prices surface in this business. Our European rail business was profitable during the 1st quarter, and we expect to be profitable during the 2nd quarter as well. During the 3rd quarter, in which we have a small break in our production, we plan a summer shutdown for maintenance purposes. We expect to lose a little money during this time period. During the 4th quarter we expect to break even. For the year, we expect to make a small profit.

During the 1st quarter, the North American railcar industry continued to improve. Steve Menzies will provide information pertaining to the industry order levels. As I’ve stated before, we are not pursuing orders based on market share percentage goals. We are highly focused on obtaining orders that allow us to tack on to existing production lines and reload our facilities.

At this point the majority of our production lines are booked through the end of this year. We have tried to balance our production schedules close to what we expect to obtain in materials and with adequate time to train our workforce. We also don’t want to get too far ahead of the overall market demand.

Our first quarter earnings were affected by a shortage of materials. This is a very difficult figure to precisely quantify. Numerous times we had to idle our workforce due to spot material shortages. Late delivery on steel has also put several of our suppliers who use steel in a position of late delivery. We continue to have a variety of material-related issues. As an example, during April, the spring storms washed out a major rail bridge between the U.S. and Mexico. This affected our material deliveries into Mexico. This is a very challenging time period for our production personnel. As I’ve stated in previous conference calls, the entire North American railcar supply chain is struggling to support the rapid industry growth. We expect the magnitude of the issues to decrease as we transition through the year. This reinforces the reason for our multi-phased structured program of expanding our production and our tactical sales approach.

At the end of the 1st quarter our backlog of orders for railcars in North America increased to approximately 16,700 units, in addition to approximately 500 auto racks. Since auto racks are a super structure built on top of an existing railcar, we do not include them in our railcar backlog figures.

Our shipments for the 1st quarter were basically flat when compared to the 4th quarter. In North America, we shipped approximately 2,800 railcars during the 1st quarter. During this time period we reopened one of our idled facilities in Texas, and we are currently reopening a second facility. When our shipments are at this level, our product mix impacts our financial results.

In the 1st quarter, almost 20% of our shipments were delivered to customers of our Leasing Company. We expect to increase our shipments during the 2nd quarter by 18%–25%, to approximately 3300 to 3500 range. Approximately 25%–30% of our shipments in the 2nd quarter will be to customers of our Leasing Company.

We expect our rail group to make $1 million to $2 million of operating profit in the 2nd quarter. We expect to increase our shipments in the 3rd quarter to the 3,800-4,000 unit level. We expect our rail group’s 3rd quarter operating profit to be over $8 million. The primary issue we see that could affect our ability to increase our production and generate the income we expect relates to material shortage and cost issues.

From an overall earnings point of view, Trinity’s 1st quarter should be the worst quarter this year. For the 2nd quarter we expect an earnings range from a small loss to a profit of 10 cents per share. We expect the 3rd quarter to be in the 10 cents–20 cents earnings per share range. There is still too much uncertainty from a supply point of view and a steel price point of view for us to project a precise figure for the 4th quarter.

Generally speaking, I’m upbeat about the progress we are making as a company. Each of our major businesses appears to be in a recovery stage, and our Leasing business is generating consistent results. Trinity is very fortunate to have several business platforms with a significant amount of potential for growth.

At this point, I’ll turn it over to Steve Menzies.

EX-99.5

Exhibit 99.5

Trinity Industries, Inc.
Quarterly Conference Call
Comments of Steve Menzies, President, Trinity Industries Leasing Company
May 6, 2004

Thank you, Tim. Good morning.

I will first provide a few comments regarding the North American railcar market followed by a few comments concerning TrinityRail’s market performance in the 1st quarter of 2004. I will conclude with a few remarks on the performance of our Leasing and Management Services business group.

During the 1st quarter of 2004, the North American railcar industry received orders for over 17,900 railcars. This is an increase from the 4th quarter of 2003, during which 12,000 railcars were ordered, the largest number of railcars ordered since 25,000 railcars in the 3rd quarter of 1998. The continued robust growth of the intermodal sector and the aggressive purchasing strategy of TTX fueled a significant portion of industry orders during the 1st quarter of 2004. Industry orders during the quarter also included a wide array of different railcar types servicing numerous end user markets. The increased demand for covered hopper cars that serve the grain industry is encouraging. Expanding grain exports and replacement of older, smaller covered hoppers is driving the demand for this railcar type. With low coal inventories at power plants and greater demand for coal-fired/steam-generated electricity due to high natural gas prices, we are experiencing solid demand for new aluminum coal cars. In addition, railroads continue to upgrade their boxcar fleets as they gain modal share from trucks. And industry demand for new tank cars improved for the fourth consecutive quarter, reflecting rising demand for basic chemicals and continued strong demand for commodities such as ethanol. As the 1st quarter of 2004 ended, the industry had a backlog of 41,300 railcars, highest since 1999.

During the 1st quarter, TrinityRail received orders for approximately 7,700 railcars, or 43% of the industry’s total. TrinityRail received orders for covered hopper cars, mill gondolas, aluminum coal cars, box cars, and tank cars, in addition, we, also received orders for autoracks, which, as Tim mentioned, are not included in railcar order figures. We are targeting additional tack-on orders for autoracks responding to the increasing demand to replace older autoracks. Our railcar order backlog of over 16,700 railcars—40% of the industry backlog—is at its highest level since the 2nd quarter of 1999. We continue to selectively increase our production capacity to meet the growing demand for railcars and to efficiently manage our production rate to address our sizeable order backlog.

Our Leasing and Management Services Group showed continued fleet growth, improved utilization, and operating earnings growth in the 1st quarter of 2004. During the quarter, Trinity Industries Leasing Company added approximately 530 new railcars to its fleet. At the end of the quarter, our owned and leased railcar fleet had grown to 19,000 compared to 16,200 at the end of the 1st quarter of 2003. All of our fleet additions in the 1st quarter were placed on lease. Our committed lease backlog is approximately 1,380 railcars or 8.3% of TrinityRail’s total backlog. Fleet utilization increased to 98.3%, at March 31, 2004 compared to 98.1% at December 31, 2003, and 94% a year earlier, at March 31, 2003. The improved fleet utilization

and fleet additions have resulted in improved profitability for our Leasing and Management Services business group. Our lease portfolio is well diversified by car type, industries served, and customer concentration. The average age of the fleet is approximately 5 years with an average remaining lease term of over 6 years. Credit quality remains stable. Given the rapid rise in new railcar prices and increased fleet utilization in our own fleet and throughout the industry, we expect lease rates to strengthen over the near-term.

Thank you. I’ll now turn it over to Jim Ivy.

EX-99.6

Exhibit 99.6

Trinity Industries, Inc
Quarterly Conference Call
May 6, 2004

Comments of Jim S. Ivy, Senior Vice President and Chief Financial Officer

I will make a few comments regarding the comparison of our first quarter results to the first quarter of last year. We have filed our Form 10-Q for the quarter this morning and you will find more details there.

Our results for the 1st quarter of 2004 improved 7 cents per share over results for the 1st quarter of 2003 to a loss per share of 25 cents. This improvement is in spite of recording an after-tax loss provision in the 1st quarter of 2004 of $4.8 million, or 10 cents per share, related to the steel price increases Tim discussed. I will provide more information on this issue in a moment. Other expense increased $1.2 million over the prior year in connection with the early retirement of our term debt during the 1st quarter of 2004 which John mentioned. The $1.2 million amounts to $769 thousand after-tax, or 2 cents per share.

As Tim mentioned earlier, steel cost increases have impacted several of our businesses. Steel and steel related cost increases from the December 31, 2003 price levels impacted first quarter profits in our railcar group by $3.8 million. Of this amount, $2.7 million is related to estimated losses on sales contracts that will be delivered in future periods and is based on prices currently in effect. Of the railcars in our North American backlog approximately 35%, or 6,100 units have escalation clauses. At the beginning of the first quarter, there were no contracts in the backlog with escalation clauses. Each quarter, as we deliver railcars on older orders and add new orders with escalation clauses, our exposure to fixed sales price contracts diminishes. A similar situation exists in our barge group where contract losses of $4.6 million based on current pricing were recorded in the 1st quarter. This loss provision includes about $3 million of costs that are yet to be incurred. Steel cost increases impacted the Construction Products Group by approximately $700 thousand in the bridge unit. While steel related pricing has had an impact on other groups, these groups are generally able to pass through cost increases.

Revenues in the Rail Group grew $111.8 million from $149 million in the 1st quarter of 2003 to $261 million in 1st quarter of 2004. Year-over-year, North American railcar sales increased approximately $75 million, European sales grew $26 million, and components sales in North America grew $11 million. The Rail Group results were affected in North America by an unfavorable mix of cars in the 1st quarter of 2004, steel cost increases, steel and component availability, and start-up costs associated with reopening plants. Sales to the Leasing & Management Services Group were $34.2 million in the 1st quarter of 2004 with profits of $3.3 million compared to sales to the leasing group in the 1st quarter of 2003 of $64.3 million with profits of $3.9 million. These intercompany sales and profits are eliminated in consolidation.

In addition to the contract losses related to steel pricing already mentioned, barge corrosion litigation expenses in the 1st quarter of 2004 were $1 million, an increase of $400 thousand over the same period in 2003.

In our Construction Products Group, revenues were up year-over-year due to favorable weather conditions in our highway safety business and a small acquisition in the concrete business. Operating profits were down primarily due to the steel cost increases I mentioned and some pricing pressure in certain concrete markets.

In the Industrial Products Group, profitability improved year-over-year due to increased sales volume of LPG tanks in the U.S. and heads for tank cars.

The revenues in the Leasing & Management Services Group in the 1st quarter of 2004 were up due to growth in the size of the lease fleet and improved utilization of the fleet as Steve mentioned. Sales from the lease fleet were only $500 thousand in the 1st quarter of 2004 compared to $800 thousand in the 1st quarter of 2003. Profits on those sales were $200 thousand each year. Operating margins in the 1st quarter of 2004 were impacted by the sale-leaseback that was completed in the December 2003 quarter. Adjusting to put all costs of ownership (such as, interest, lease expense and depreciation) on the same basis, profit margins are slightly improved year-over-year.

In the All Other Group, the cost of maintaining idle or non-operating facilities included in this group declined about $700 thousand year-over-year.

On a consolidated basis, investment in working capital grew primarily due to increasing sales and production volumes in the Rail Group and, to a lesser extent, due to seasonal buildup in the Construction Products businesses.