8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 2, 2005

Trinity Industries, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-6903	75-0225040
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2525 Stemmons Freeway, Dallas, Texas		75207-2401
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

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

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

The Registrant hereby furnishes the information set forth in its News Release, dated November 2, 2005, announcing operating results for the three and nine months ended September 30, 2005, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On November 3, 2005, the Registrant held a conference call and web cast with respect to its financial results for the three and nine months ended September 30, 2005. The conference call scripts of James E. Perry, Treasurer; Timothy R. Wallace, Chairman, President, and Chief Executive Officer; D. Steven Menzies, President of Trinity Industries Leasing Company; and William A. McWhirter II, Vice President and Chief Financial Officer are furnished as exhibits 99.2, 99.3, 99.4, and 99.5 respectively, and incorporated herein by reference. This information in not "filed" pursuant to the Securities and Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submission of the report on F orm 8-k is not an admission of the materiality of any information in this report that is required to be disclosed solely by Regulations FD.

Item 7.01 Regulation FD Disclosure.

The Registrant hereby furnishes the information set forth in its News Release, dated November 2, 2005, announcing operating results for the three and nine months ended September 30, 2005, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On November 3, 2005, the Registrant held a conference call and web cast with respect to its financial results for the three and nine months ended September 30, 2005. The conference call scripts of James E. Perry,Treasurer; Timothy R. Wallace, Chairman, President, and Chief Executive Officer; D. Steven Menzies, President of Trinity Industries Leasing Company; and William A. McWhirter II, Vice President and Chief Financial Officer are furnished as exhibits 99.2, 99.3, 99.4, and 99.5 respectively, and incorporated herein by reference. This information in not "filed" pursuant to the Securities and Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submission of the report on Fo rm 8-k is not an admission of the materiality of any information in this report that is required to be disclosed solely by Regulations FD.

SIGNATURES

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.
November 3, 2005	By:	Michael G. Fortado
		Name: Michael G. Fortado
		Title: Vice President and Secretary

Exhibit Index

Exhibit No.	Description
99.1	News Release dated November 2, 2005 with respect to the operating results for the three and nine months ended September 30, 2005.
99.2	Conference call script of November 3, 2005 for James E. Perry, Treasurer.
99.3	Conference call script of November 3, 2005 for Timothy R. Wallace, Chairman, President, and Chief Executive Officer.
99.4	Conference call script of November 3, 2005 for D. Stephen Menzies, President of Trinity Industries Leasing Company.
99.5	Conference call script of November 3, 2005 for William A. McWhirter II, Vice President and Chief Financial Officer.

EX-99.1

Exhibit 99.1

Media Contact:
Nancy Farrar
Farrar Public Relations
817/937-1557

Investor Contact:
James Perry, Treasurer
Trinity Industries, Inc.
214/589-8412

FOR IMMEDIATE RELEASE

Trinity Industries Reports Strong Third Quarter Earnings

DALLAS – November 2, 2005 – Trinity Industries, Inc. (NYSE:TRN) today reported financial results for the three and nine month periods ended September 30, 2005. Revenues for the three months ended September 30, 2005 increased 31 percent to $742.5 million compared to revenues of $567.2 million for the same period in 2004. Revenues for the first nine months of 2005 were up 35 percent, increasing to $2,120.7 million from $1,570.8 million for the first nine months of 2004.

For the quarter ended September 30, 2005, the Company reported earnings of $33.1 million, or $0.65 per common diluted share, compared with net income of $0.9 million or $0.00 per common diluted share for the same quarter of 2004. The third quarter of 2005 included a pre-tax gain of $4.4 million, or $0.06 per common diluted share, on the sale of an equity interest in a railcar leasing investment. The third quarter of 2004 included pre-tax charges for steel and related material cost increases totaling $19.5 million on contracts with fixed sales prices. Offsetting these charges was $8.1 million in interest income received in the third quarter of 2004 that was earned in prior periods but not recognized until collected.

For the nine months ended September 30, 2005, the Company reported earnings of $60.9 million, or $1.20 per common diluted share, compared with a net loss of $6.3 million, or $0.19 loss per common diluted share, for the same period of 2004. The nine months ended September 30, 2005 included a pre-tax provision of approximately $3.3 million, or $0.04 per common diluted share, related to the settlement of two lawsuits and two other unrelated warranty issues in the Company’s Inland Barge Group, the $2.3 million, or $0.04 per common share, write-off of the goodwill associated with Trinity’s European operations, and the previously mentioned gain on the sale of an equity interest. The nine month period ended September 30, 2004 included pre-tax charges for steel and related material cost increases totaling $37.5 million resulting from fixed price sales contracts, primarily in the Rail and Inland Barge Groups, and $6.6 million in costs related to materials shortages and unanticipated plant shut-downs. Also included in the nine months ended September 30, 2004 was a pre-tax charge of $1.2 million related to the early retirement of the Company’s term debt and the $8.1 million in interest income mentioned above.

“All of our North American business segments continued to build on the momentum created during the first half of 2005,” said Timothy R. Wallace, Trinity’s Chairman, President and CEO. “I am pleased our North American railcar earnings continue to improve as a result of the cost saving measures we have in place and the efficiencies associated with long production runs. Our railcar shipments in North America totaled 5,685 units during the third quarter. Our railcar and barge businesses continued to book a steady level of orders. In addition, the passage of both the federal highway and energy bills should provide opportunities for continued growth in several of our businesses.”

As of September 30, 2005, the Company modified its segment reporting in anticipation of an increase in structural wind towers revenue due to the recent signing of the Energy Policy Act of 2005, which provides production tax credits on wind generated energy. The modification of the segments is the combining of the structural wind towers operations, previously in the “All Other” segment, and the existing Industrial Products Group into a new segment named the Energy Equipment Group. All historical segment information has been restated for comparative analysis.

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 Energy Equipment Group. Trinity’s web site may be accessed at http://www.trin.net.

Some statements in this release, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Trinity’s estimates, expectations, beliefs, intentions or strategies for the future, and the assumptions underlying these forward-looking statements. Trinity uses the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” and similar expressions to identify these forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience of our present expectations. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statements, see “Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the most recent fiscal year.

- TABLES TO FOLLOW -

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

	Three Months Ended September 30,
	2005			2004
Revenues	$	742.5		$	567.2
Operating profit	$	58.9		$	3.8
Other expense		2.4			2.1
Income before income taxes		56.5			1.7
Provision for income taxes		23.4			0.8
Net income		33.1			0.9
Dividends on Series B preferred stock		(0.8	)		(0.8	)
Net income applicable to common shareholders	$	32.3		$	0.1
Net income applicable to common shareholders per common share:
Basic	$	0.68		$	0.00
Diluted	$	0.65		$	0.00
Weighted average number of shares outstanding:
Basic		47.3			46.5
Diluted		51.3			47.5

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

	Nine Months Ended September 30,
	2005			2004
Revenues	$	2,120.7		$	1,570.8
Operating profit	$	120.3		$	11.6
Other expense		18.4			20.9
Income (loss) before income taxes		101.9			(9.3	)
Provision (benefit) for income taxes		41.0			(3.0	)
Net income (loss)		60.9			(6.3	)
Dividends on Series B preferred stock		(2.4	)		(2.3	)
Net income (loss) applicable to common shareholders	$	58.5		$	(8.6	)
Net income (loss) applicable to common shareholders per common share:
Basic	$	1.24		$	(0.19	)
Diluted	$	1.20		$	(0.19	)
Weighted average number of shares outstanding:
Basic		47.1			46.4
Diluted		50.8			46.4

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

	Three Months Ended
	September 30,
Revenues:	2005			2004
Rail Group	$	492.2		$	315.2
Construction Products Group		182.2			170.8
Inland Barge Group		50.3			46.2
Energy Equipment Group		60.3			35.5
Railcar Leasing and Management Services Group		44.0			36.5
All Other		11.7			8.8
Eliminations		(98.2	)		(45.8	)
Total Revenues	$	742.5		$	567.2

Operating profit (loss):	Three Months Ended
	September 30,
	2005			2004
Rail Group	$	36.0		$	(14.5	)
Construction Products Group		21.2			18.5
Inland Barge Group		4.7			(1.7	)
Energy Equipment Group		8.4			4.1
Railcar Leasing and Management Services Group		12.9			7.9
All Other		(0.8	)		(1.3	)
Corporate		(9.7	)		(7.2	)
Eliminations		(13.8	)		(2.0	)
Consolidated	$	58.9		$	3.8

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

	Nine Months Ended September 30,
Revenues:	2005			2004
Rail Group	$	1,421.6		$	849.7
Construction Products Group		505.9			444.6
Inland Barge Group		159.0			153.6
Energy Equipment Group		161.2			103.3
Railcar Leasing and Management Services Group		145.1			143.3
All Other		31.4			24.1
Eliminations		(303.5	)		(147.8	)
Total Revenues	$	2,120.7		$	1,570.8

Operating profit (loss):	Nine Months Ended September 30,
	2005			2004
Rail Group	$	62.0		$	(17.2	)
Construction Products Group		50.9			35.0
Inland Barge Group		6.7			(12.8	)
Energy Equipment Group		20.8			8.4
Railcar Leasing and Management Services Group		39.5			31.9
All Other		(4.3	)		(1.2	)
Corporate		(25.4	)		(23.8	)
Eliminations		(29.9	)		(8.7	)
Consolidated	$	120.3		$	11.6

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

	September 30,			December 31,
	2005			2004
Cash and equivalents	$	126.6		$	182.3
Accounts receivable		272.6			214.2
Inventories		438.6			402.3
Net property, plant and equipment, at cost (1)		1,013.0			810.9
Other assets		607.5			600.5
	$	2,458.3		$	2,210.2
Accounts payable and accrued liabilities	$	522.8		$	511.7
Debt (2)		642.4			518.0
Deferred income		45.8			47.2
Other liabilities		97.7			62.2
Series B preferred stock		58.6			58.2
Stockholders’ equity		1,091.0			1,012.9
	$	2,458.3		$	2,210.2
(1) Property, Plant and Equipment
Corporate/Manufacturing:
Property, plant and equipment	$	885.3		$	885.2
Accumulated depreciation		(609.2	)		(589.6	)
		276.1			295.6
Leasing:
Equipment on lease		874.3			635.7
Accumulated depreciation		(137.4	)		(120.4	)
		736.9			515.3
	$	1,013.0		$	810.9
(2) Debt
Corporate/Manufacturing — Recourse
Revolving commitment	$	—		$	—
Senior notes		300.0			300.0
Other		3.1			5.3
		303.1			305.3
Leasing – Recourse
Equipment trust certificates		130.1			170.0
		130.1			170.0
Leasing – Non-recourse
Warehouse facility		209.2			42.7
		209.2			42.7
	$	642.4		$	518.0

- END -

Exhibit 99.2

Third Quarter Results Conference Call
James E. Perry, Treasurer
November 3, 2005

Thank you, Eric.

A. Good morning from Dallas, Texas and welcome to the Trinity Industries’ Third Quarter Results Conference Call. I’m James Perry, Treasurer for Trinity. Thank you for being with us today.

1. Joining me today on the call are:

a. Tim Wallace, Chairman, President and Chief Executive Officer

b. Bill McWhirter, Vice President and Chief Financial Officer, and

c. 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, November 10^th.

3. The replay number is (402) 220-7227.

B. I would also like to welcome our audio web cast listeners today. Replay of this broadcast will also be available on our website located at www.t-r-i-n.net.

1. In addition to me, you will hear today from Tim Wallace, Steve Menzies and Bill McWhirter. 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 estimates, 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. Let me address our debt and cash position:

At September 30th, our borrowings at the corporate level were the 300 million dollars of senior notes and 3.1 million dollars of other indebtedness. The Leasing Company’s debt included the 130.1 million dollars of Equipment Trust Certificates and 209.2 million dollars outstanding under our railcar leasing warehouse facility.

We are pleased to announce that in August of this year, we renewed the warehouse facility for two years with lower fees and pricing. Additionally, in October, we increased the amount of the facility from 300 million to 375 million dollars.

At September 30th, our debt to total capital ratio was 35.8 percent, up slightly from the comparable amount at December 31, 2004, principally due to lease fleet expansion.

At September 30th, our cash position was 126.6 million dollars.

At the end of the quarter, Trinity sold its minority interest, along with the other equity investors in a railcar leasing portfolio of approximately 8,000 railcars. This resulted in a gain to Trinity of 4.4 million dollars. Trinity also provided certain management services to the partnership. This partnership was formed in 1998 and the timing of the portfolio sale reflected the rise in railcar values.

E. Now, here’s Tim Wallace

Tim

Steve

Bill

F. Thanks, Bill. Now our operator will prepare us for the Q & A session.

Q & A Session

Thank you,      .

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, November 10^th.

3. The access number is (402) 220-7227.

4. Also, this replay will be available on our website located at www.t-r-i-n.net.

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

6. Thank you for joining us this morning.

Exhibit 99.3

Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Tim Wallace, Chairman, President and CEO
November 3, 2005

FINAL

Thank you James, and good morning everyone.

I’m pleased with our progress. All of our business segments improved their profitability over the 3^rd quarter last year. We are continuing to build on the momentum we established during the first half of the year. Fortunately, we are not experiencing any significant issues with unexpected material cost increases or delays.

Our European railcar business improved during the 3^rd quarter, but is continuing to struggle through the trough of the market. Our backlog of orders in Europe at the end of the 3^rd quarter was 730 units compared to 1000 at the end of the 2^nd quarter. We shipped approximately 360 units during the 3rd quarter versus approximately 240 units in the 2^nd quarter.

We are closely monitoring our European railcar business activities as we continue to review our strategic options. We are confident that demand will eventually improve. Bill McWhirter will provide specific financial information about our European railcar business during his report.

Our 3^rd quarter North American railcar shipments were 5685 units. We expect our quarterly shipments to fluctuate between 5800 to 6000 units for the next two quarters. Our 2005 annual shipments should be between 22,500 and 23,000 units. This will be approximately a 50% increase over 2004. Our short term objectives for our North American rail business are to continue to improve our profitability through productivity initiatives and to pursue orders that extend our production lines. The majority of our 3^rd quarter orders extended our existing production. The benefits of our strategic selling are seen in the significant difference between our year over year profitability in our railcar segment. We currently have a strong inquiry level for orders. In fact, I’d describe our October order levels as robust. The quality of the orders we are receiving is good. Our production flexibility and available capacity have become key selling tools. As an example, in the first quarter we will convert one of our production lines over to produce additional coal cars. Since we are continuing to receive inquiries for coal equipment deliveries in 2006 we are seriously contemplating converting more space.

During the 2nd quarter of 2006, we will begin shipping products from our new facility in Mexico. Our plans are to launch between 3 to 5 new production lines in Mexico. Short term, we will invest in training our employees. Long term, we will enhance our competitive position and this will provide us with additional low cost flexibility.

As for the company as a whole, I continue to be very optimistic about the opportunities we have in front of us. Our barge business has a strong backlog of orders and our customers are continuing to place inquiries for future business. Fortunately, our facilities did not experience any major problems after the effects of the hurricanes. Bill will provide more detailed financial information on this. Our construction product businesses are also performing well. In addition, I am very pleased with our successful restart of our structural wind towers business. Our structural wind towers business is a growth business for us. We have a high level of competency of fabricating these types of products. We converted some of our tank manufacturing facilities in order to pursue these opportunities. Trinity is blessed with a high level of production flexibility.

Our leasing company is continuing to play a vital support role to our railcar manufacturing businesses and will assist us in diversifying our long term earnings base as we continue to expand our lease fleet. Steve Menzies will provide more details about this business in his report. With the passage by U.S. Congress of the Energy bill and the Transportation bill, we are beginning to see the demand drivers improve in several of our businesses. As you can tell, I’m optimistic about the opportunities for our company and I’m pleased to provide you with an upbeat report.

I’ll now turn it over to Steve Menzies for his comments.

Exhibit 99.4

DRAFT 3
Trinity Industries, Inc
Analysts Conference Call
November 3, 2005
Comments by Steve Menzies
FINAL

Thank you, Tim. Good morning! I’ll make a few comments about the railcar market followed by a few remarks about our leasing and management services business.

Industry demand for railcars in North America remained strong in the 3^rd quarter. More than 17,600 railcars were ordered industry-wide, continuing the strong pace set in early 2004. The number of 3^rd quarter railcar orders is in line with the quarterly average of 18,000 ordered during the last seven quarters. Year-to-date, industry orders through September totaled more than 54,000 railcars. Strong railcar demand reflects general economic growth, increased railroad freight loadings and replacement of older, smaller railcars.

During the 3^rd quarter, Trinity received more than 5,100 railcar orders. We continue to focus our sales efforts on orders that meet our pricing requirements and extend our existing production lines. Substantially all of the railcar orders received during the 3^rd quarter extend existing production lines for a variety of cars, including several lines producing various types of covered hoppers, autoracks, coal cars and tank cars. While our order levels may fluctuate quarter to quarter, we believe current order levels and inquiries indicate continued strong demand for a variety of railcars, supporting our production and sales strategies. As Tim mentioned, our order levels since the quarter close have been quite robust, extending existing production lines even further.

The industry-wide production backlog at the end of the 3^rd quarter increased slightly to approximately 61,100 railcars reflecting a backlog of approximately nine months of industry production. This also indicates that strong industry order levels are keeping pace with increased industry production and that the supply chain is meeting current demand. Trinity’s railcar production backlog in North America on September 30^th decreased slightly to approximately 16,900 railcars, compared to approximately 17,500 railcars on June 30.

Trinity Industries Railcar Leasing and Management Services Group continued to grow its railcar fleet, taking delivery of approximately 1,000 new railcars during the 3^rd quarter. This represents about 18% of Trinity’s North American 3^rd quarter shipments. Our operating lease fleet now includes more than 23,300 railcars as compared to approximately 19,700 railcars in our fleet on September 30, 2004. Our lease portfolio growth is an important part of our rail strategy to develop long term relationships with the end users of our railcars.

Our committed lease backlog at the end of the 3^rd quarter was approximately 4,000 railcars or 26.5% of Trinity’s North American production backlog. Our lease fleet is essentially fully utilized at 99.4% at the end of the 3^rd quarter compared to 98.5% at September 30, 2004. The average age of our fleet is 5.2 years and our average remaining lease term is six years. Lease rates continue to rise as a result of high fleet utilization, strong levels of new car building and rising new car prices. Our renewal rate, the number of leases renewed as a percentage of expiring leases, has been exceptionally high. Our average fleet lease rate has continued to increase quarter over quarter reflecting the high number of lease renewals and rising new car lease rates. The strength of the leasing market, full lease fleet utilization and increasing lease rates on existing railcars further supports our long term view of continuing strong demand for new built railcars.

I’ll now turn it over to Bill McWhirter.

Exhibit 99.5

Trinity Industries, Inc.
Earnings Release Conference Call
Comments of William McWhirter, Vice President and Chief Financial Officer
November 3, 2005

Thank you Steve and good morning everyone!

My comments relate primarily to the third quarter of 2005. We will file our Form 10-Q this morning. You will find more details there summarizing the quarter. During my remarks, I will provide earnings per share guidance for the fourth quarter and the full year. Additionally, I will update the previous guidance with respect to operating margins in our Rail and our Inland Barge groups.

We are pleased with our third quarter 2005 earnings of 65 cents per share. These results compare with earnings of 43 cents per share in the second quarter of 2005 and earnings of 0 cents per share in the same quarter of 2004. Revenues for the third quarter of 2005 increased 31% over the same quarter last year to $742 million, which is the second highest in Trinity’s history. The total effect of Hurricanes Katrina and Rita for the third quarter was a reduction of operating profit by approximately $2.2 million; of this amount, $1.0 million was incurred in our Construction Products Group, $900,000 in the Inland Barge Group and the remainder in our Railcar Group.

At this time I will discuss the performance of our individual business segments.

Rail Group
In our Rail Group, North American railcar revenues were 56% higher on a quarter over quarter basis. Rail Group sales to Trinity’s Leasing Group were $83 million in the third quarter of 2005 with profits of $13.8 million, or approximately 18 cents per diluted share. This compared with sales to our Leasing Group in the third quarter of 2004 of $34 million with profits of $2.0 million, or 3 cents per diluted share. These inter-company sales and profits are eliminated in consolidation.

Our European rail business continues to suffer from a depressed market. During the third quarter we incurred a loss of approximately $2.0 million. At our current build rate we expect to continue to incur a quarterly loss of between $1.5 and $3.0 million. We currently have fixed assets with a net book value of approximately $57 million in our European Rail operations.

Our previously forecasted operating margin for the rail segment during the third quarter was 5.5% to 6.5%. Actual results were 7.3%. When you remove the effect of our European operations, North America experienced an operating margin of 8.3%.

Based on our current operating performance and the quality of our backlog, we are adjusting our guidance with regard to operating margins for the Rail Group for the fourth quarter to a margin of 6.5% to 7.5%. This guidance is based on the following assumptions:

• European results consistent with the guidance provided today,

• continued production efficiencies in North America, and

• no significant supply problems in steel or other basic materials.

There was no unrecoverable steel cost for the third quarter in the Rail Group.

Our North American backlog as of September 30, 2005 consisted of approximately 16,900 railcars with an estimated sales value of approximately $1.2 billion. The backlog is subject to a variety of escalation provisions and firm raw material contracts. Together these items are referred to internally as cost coverage. Cost coverage of the current backlog is approximately 92%.

Construction Products Group
Our Construction Products Group plays a key part of our earnings diversification strategy. The third quarter is normally strong for this group due to construction-friendly weather conditions. Revenues were up by 7% on a quarter-over-quarter basis. Operating profit increased by $2.7 million and margins improved from 10.8% to 11.6%. These improvements were primarily due to improved pricing that offset raw material price increases.

Our Concrete and Aggregate business accounted for 52% of the Construction Products Group’s revenue. The business unit’s overall performance was positively impacted by strong demand combined with tight supplies of raw materials. Our Concrete Group enjoys a diversified customer base which provides flexibility in the market sectors we target.

Our Highway Products business, which accounted for 32% of the Construction Products Group’s revenues, is also performing well. Revenues from this unit’s proprietary line of products continue to be strong.

Additionally, our Pipe Fittings and Bridge Girder businesses continue to perform at nice levels.

Inland Barge Group
The Inland Barge Group’s third quarter performance was strong. While we did suffer additional costs due to Hurricane Katrina, much of these costs were offset by operational efficiencies during the quarter at other facilities. Our current backlog of work is approximately $285 million versus $115 million one year ago. Additionally, we have a very strong inquiry list at this time.

We anticipate Inland Barge revenues of approximately $65 to
$70 million in the fourth quarter, moving to a run rate of about $80 million per quarter during the first half of 2006. We anticipate operating profit margins of between 8% and 10% for the fourth quarter.

Leasing
In our Railcar Leasing and Management Services business, we reported revenues of $44 million, which were up $7.5 million on a quarter over quarter basis. Total operating profit increased by $5.0 million due to the additions to the fleet, improved utilization and increased rates. Growing our Leasing and Management Services Group continues to be a key part of our earnings diversification strategy. We plan to spend between $350 and $375 million on net fleet additions during 2005 and we look for a similar level of investment for 2006.

Energy Equipment Group
As announced in our News Release yesterday, we have added our Structural Windtower business to our Industrial Products segment and renamed the group Energy Equipment. We are very pleased with the Energy Equipment Group’s third quarter performance. On a quarter-over-quarter basis, revenue increased approximately 70% to $60 million and operating profit jumped by $4.3 million, bringing the quarterly margin to 13.9%. This business continues to benefit from cost-savings improvements we implemented during late 2003 and early 2004, as well as solid demand in Mexico for our products. Our current backlog for Structural Windtowers is strong and we believe wind energy will continue to become more competitive with traditional energy sources, given the current price for natural gas.

Consolidated
On a consolidated basis, c

ash flow from operating activities was a positive $71.7 million for the quarter.

Non-leasing capital expenditures are currently projected to be between $80 and $90 million for 2005. Of this amount, approximately $40 million is related to our new railcar plant in Mexico and our new North Texas aggregates facility.

During the fourth quarter, we expect our Construction Business will be down when compared with the second and third quarters, due to normal winter weather patterns. We anticipate consolidated earnings for the fourth quarter to range between 40 and 47 cents per share.

Overall, our updated company guidance for 2005 is for earnings per share of between $1.60 and $1.67 for the full year on a fully diluted basis. Included in our assumptions for the remainder of 2005 are:

• the deferral of approximately $16 million in profit on sales from our Rail Group to our Leasing Group in the fourth quarter, or roughly 22 cents per diluted share for the quarter

results in our European rail operations as discussed earlier

• continuing to achieve production efficiencies in North America

• no significant supply problems in steel or components

• normal weather conditions

• no unanticipated adverse resolution of legal matters and

• our estimate of $2.1 million in costs associated with Hurricanes Katrina and Rita in the fourth quarter.

We are currently engaged in our annual budget process and will provide 2006 guidance at our fourth quarter conference call, consistent with the prior year. We believe 2006 will provide strong opportunities for continued improved earnings.

At this time I will turn the presentation back to James for the questions and answers session.