Trinity Industries, Inc. Announces Second Quarter 2021 Results
Trinity Industries reported second-quarter earnings with total revenues at $372 million, an EPS of $0.12 and adjusted EPS of $0.15. The utilization rate of the lease fleet stood at 94.3% with new railcar orders totaling 4,570. Year-to-date cash flow from operations reached $335 million, and free cash flow hit $359 million. The company repurchased approximately 10.5 million shares at a cost of $291 million. Management expressed optimism about recovery in rail markets and continued focus on cost reduction and balance sheet optimization.
- Total revenues increased to $372 million from $509.2 million in the prior year.
- EPS improved to $0.12 from a loss of $1.76 in Q2 2020.
- New railcar orders surged to 4,570 from 840 in the previous year.
- Adjusted EBITDA rose to $136.1 million compared to $130.8 million year-over-year.
- Free cash flow increased significantly to $359 million from $46.7 million.
- Overall revenues decreased year-over-year due to lower railcar deliveries.
- Lease fleet utilization slightly declined from 94.7% to 94.3%.
- Operating profit margin in the Rail Products Group fell to 1.2% from 1.9%.
Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the second quarter ended June 30, 2021.
Financial and Operational Highlights
-
Quarterly total company revenues of
$372 million -
Quarterly income from continuing operations per common diluted share ("EPS") of
$0.12 and quarterly adjusted EPS of$0.15 -
Lease fleet utilization of
94.3% and Future Lease Rate Differential ("FLRD") of negative2.5% at quarter end - New railcar orders of 4,570 and railcar deliveries of 1,765
-
Year-to-date cash flow from operations and total free cash flow after dividends and investments ("Free Cash Flow") were
$335 million and$359 million , respectively-
Year-to-date investment of
$163 million in leasing capital expenditures, net of lease portfolio sales
-
Year-to-date investment of
- Net additions of 4,550 railcars to the wholly-owned and partially-owned lease fleet compared to prior year period
-
Repurchases of approximately 10.5 million shares at a cost of
$291 million -
Committed liquidity of
$918 million as of June 30, 2021
Management Commentary
"We are very pleased to build on the momentum growing in our business as railcar demand and the overall U.S. economy continue to recover," remarked Jean Savage, Trinity's Chief Executive Officer and President. "Best of all, our second quarter results were enhanced by the great strides the Company continues to make towards our return-focused initiatives, and we are proud to say we are on track to achieve the ambitious goals we detailed at our Investor Day last Fall."
Ms. Savage continued, "Our businesses performed well against our expectations across both our leasing and manufacturing businesses. Trinity’s lease revenue improved modestly and secondary market liquidity remains strong as demand continues to rise. There are clear signs of a strengthening recovery as the renewal success rate for the quarter improved to
"Trinity's Rail Products Group also had improved results as orders increased significantly compared to a year ago. Even better, our ongoing cost initiatives continue to lower our breakeven point for new car production and reduced the impact of higher steel costs over the quarter. We are ever diligent concerning inflation in our input costs but are increasingly optimistic about the trends in profitability for the Rail Products Group exiting 2021 and into 2022."
"Additionally, Trinity has made excellent progress against our goal to lower funding costs and optimize our balance sheet. In the quarter, Trinity repurchased
Ms. Savage concluded, "In summary, we are encouraged by the continued recovery in the U.S. rail markets and the economy broadly. More importantly, we are very proud of the progress and execution being driven by the hard work of our collective teams at Trinity. We look forward to our continued progress and the long-term shareholder value generation that we believe will follow."
Consolidated Financial Summary |
|||||||||
|
Three Months Ended June 30, |
|
|
||||||
|
2021 |
|
2020 |
|
Year over Year – Comparison |
||||
|
(in millions, except percentages and per share amounts) |
|
|
||||||
Revenues (1) |
$ |
371.5 |
|
$ |
509.2 |
|
Lower deliveries in the Rail Products Group, and the change in presentation of railcar sales, which totaled |
||
Selling, engineering, and administrative expenses |
$ |
57.7 |
|
$ |
56.8 |
|
Higher litigation-related expenses |
||
Operating profit (loss) |
$ |
67.4 |
|
$ |
(307.3) |
|
Q2 2020 includes |
||
Adjusted Operating profit (2) |
$ |
66.7 |
|
$ |
62.4 |
|
Higher margins on lease portfolio sales in the Leasing Group, partially offset by lower volumes in the Rail Products Group and lower lease rates and higher fleet management operating costs in the Leasing Group |
||
Interest expense, net |
$ |
51.0 |
|
$ |
53.0 |
|
Lower overall borrowing costs associated with the Company's debt facilities, partially offset by higher overall average debt |
||
Net income (loss) from continuing operations attributable to Trinity Industries, Inc. |
$ |
12.7 |
|
$ |
(206.9) |
|
Q2 2020 includes |
||
Adjusted Net income (loss) from continuing operations attributable to Trinity Industries, Inc. (2) |
$ |
16.2 |
|
$ |
2.7 |
|
Primarily the changes in adjusted operating profit as described above and the lower adjusted provision for income taxes |
||
EBITDA (2) |
$ |
124.1 |
|
$ |
(238.9) |
|
Q2 2020 includes |
||
Adjusted EBITDA (2) |
$ |
136.1 |
|
$ |
130.8 |
|
|
||
Effective tax expense (benefit) rate |
(23.1)% |
|
(20.0)% |
|
2021 tax benefit was impacted by excess tax benefits associated with equity based compensation; 2020 tax benefit primarily related to changes in recent tax legislation, reduced by the portion of the impairment charge attributable to the noncontrolling interest, for which Trinity does not provide income taxes |
||||
Diluted EPS – GAAP |
$ |
0.12 |
|
$ |
(1.76) |
|
Q2 2020 includes the impact of |
||
Diluted EPS – Adjusted (2) |
$ |
0.15 |
|
$ |
0.02 |
|
|
||
|
|
|
|
|
|
||||
|
Six Months Ended June 30, |
|
|
||||||
|
2021 |
|
2020 |
|
Year over Year – Comparison |
||||
|
(in millions) |
|
|
||||||
Net cash provided by operating activities – continuing operations |
$ |
335.1 |
|
$ |
327.8 |
|
|
||
Free Cash Flow (2) |
$ |
358.9 |
|
$ |
46.7 |
|
Timing difference of debt proceeds issued for financing lease fleet equity investment |
||
Capital expenditures – leasing (3) |
$ |
251.7 |
|
$ |
259.5 |
|
|
||
Returns of capital to stockholders |
$ |
375.0 |
|
$ |
81.8 |
|
Increase in share repurchase activity in 2021, which included a privately negotiated repurchase agreement totaling |
||
(1) Beginning in the fourth quarter of 2020, we made a prospective change to the presentation of railcar sales and now present all sales of railcars from the lease fleet as a net gain or loss from the disposal of a long-term asset regardless of the age of railcar that is sold. Historically, we presented sales of railcars from the lease fleet on a gross basis in leasing revenues and cost of revenues if the railcars had been owned for one year or less at the time of sale. Sales of railcars from the lease fleet owned for more than one year had historically been presented as a net gain or loss from the disposal of a long-term asset. |
(2) Non-GAAP financial measure. See the Reconciliations of Non-GAAP Measures section within this Press Release for a reconciliation to the most directly comparable GAAP measure and why management believes this measure is useful to management and investors. |
(3) For the six months ended June 30, 2020, Capital expenditures – leasing is net of sold lease fleet railcars owned one year or less. |
Business Group Summary |
|||||||||
|
Three Months Ended June 30, |
|
|
||||||
|
2021 |
|
2020 |
|
Year over Year – Comparison |
||||
|
(in millions, except percentages and number of units) |
|
|
||||||
Railcar Leasing and Management Services Group |
|
|
|
|
|
||||
Leasing and management revenues |
$ |
185.1 |
|
$ |
182.7 |
|
|
||
Leasing and management operating profit |
$ |
70.0 |
|
$ |
78.5 |
|
Lower lease rates, higher fleet management operating costs, and slightly lower fleet utilization, partially offset by growth in the lease fleet |
||
Operating profit on lease portfolio sales |
$ |
11.1 |
|
$ |
4.4 |
|
Higher margins on railcars sold from the lease portfolio |
||
Fleet utilization |
|
|
|
|
Primarily driven by decrease in energy-related markets |
||||
Future Lease Rate Differential ("FLRD") (1) |
(2.5)% |
|
(19.9)% |
|
Recovery of current market lease rates compared to the prior year period |
||||
Owned lease fleet (in units) (2) |
108,635 |
|
104,085 |
|
|
||||
Investor-owned lease fleet (in units) |
26,490 |
|
26,710 |
|
|
||||
|
|
|
|
|
|
||||
Rail Products Group |
|
|
|
|
|
||||
Revenues |
$ |
261.8 |
|
$ |
405.6 |
|
Lower deliveries and a shift in the mix of railcar products and services sold |
||
Operating profit margin |
|
|
|
|
Lower deliveries and shifts in mix, partially offset by operational efficiencies |
||||
Deliveries (in units) |
1,765 |
|
2,985 |
|
|
||||
Orders (in units) |
4,570 |
|
840 |
|
|
||||
Order value |
$ |
372.6 |
|
$ |
105.9 |
|
Higher number of units, differences in product mix, and competitive pricing |
||
Backlog value |
$ |
1,177.7 |
|
$ |
1,337.3 |
|
|
||
|
|
|
|
|
|
||||
All Other |
|
|
|
|
|
||||
Revenues |
$ |
78.2 |
|
$ |
69.3 |
|
Increased demand and higher input costs for highway products |
||
Operating profit |
$ |
12.8 |
|
$ |
7.3 |
|
|
||
|
|
|
|
|
|
||||
|
June 30, 2021 |
|
December 31, 2020 |
|
|
||||
Loan-to-value ratio |
|
|
|
|
|
||||
Wholly-owned subsidiaries, including corporate revolving credit facility |
|
|
|
|
Increased leverage associated with leased assets, partially offset by amortization of debt on encumbered assets |
||||
(1) FLRD calculates the weighted average of the most current quarterly lease rates transacted compared to the weighted average lease rates for railcars expiring over the next twelve months. |
(2) Includes wholly-owned railcars, partially-owned railcars, and railcars under sale-leaseback arrangements. |
Additional Business Items
Liquidity and Capital Resource Updates
-
June 2021 Refinancing of Partially-Owned Leasing Subsidiaries' Debt
-
Triumph Rail LLC ("Triumph Rail"), formerly known as TRIP Master Funding LLC, a partially-owned subsidiary of the Company, issued
$560.4 million of Series 2021-2 Green Secured Railcar Equipment Notes (the "Triumph Rail Notes"). The Triumph Rail Notes bear interest at an all-in interest rate of2.20% and have a stated final maturity date of 2051. Net proceeds received from the issuance of the Triumph Rail Notes, as well as proceeds from the sale of railcars and related operating leases to TRIP Railcar Co. LLC described below, were used to redeem Triumph Rail's existing Secured Railcar Equipment Notes, of which$869.1 million was outstanding at the redemption date. The all-in rate for these notes was5.16% per annum. -
TRIP Railcar Co. LLC, a partially-owned subsidiary of the Company, drew down
$329.6 million under a term loan agreement ("TRIP Railcar Co. term loan"). The TRIP Railcar Co. term loan bears interest at LIBOR plus1.85% and has a stated maturity date of June 2025. Net proceeds received from the TRIP Railcar Co. term loan were used to purchase railcars and related operating leases from Triumph Rail. -
TRP 2021 LLC, formerly known as Trinity Rail Leasing 2012 LLC, a partially-owned subsidiary of the Company, issued
$355.0 million of Series 2021-1 Green Secured Railcar Equipment Notes (the "TRP-2021 Notes"). The TRP-2021 Notes bear interest at an all-in interest rate of2.13% and have a stated final maturity date of 2051. Net proceeds received from the TRP-2021 Notes were used to redeem TRP-2021's existing Secured Railcar Equipment Notes, of which$348.0 million was outstanding at the redemption date. The all-in rate for these notes was3.59% per annum.
-
Triumph Rail LLC ("Triumph Rail"), formerly known as TRIP Master Funding LLC, a partially-owned subsidiary of the Company, issued
-
In June 2021, Trinity Rail Leasing 2021 LLC, a wholly-owned subsidiary of the Company, issued
$325.0 million of Series 2021-1 Green Secured Railcar Equipment Notes (the "TRL-2021 Notes"). The TRL-2021 Notes bear interest at an all-in interest rate of2.31% and have a final maturity date of 2051. Net proceeds received from the TRL-2021 Notes were used to repay borrowings under TILC's secured warehouse credit facility and for general corporate purposes. -
During the quarter, Trinity repurchased approximately
$68 million of shares under the Company's authorized share repurchase program, of which$77 million remains authorized through December 31, 2021. -
On April 29 2021, we entered into a stock repurchase agreement with ValueAct Capital Master Fund, L.P. (“ValueAct”) to repurchase 8.1 million shares of our common stock for
$27.47 per share, for an aggregate purchase price of$222.5 million , in a privately negotiated transaction. The price per share represents a discount of3.5% from the closing price for a share of common stock on the New York Stock Exchange on April 29, 2021. Under the repurchase agreement, ValueAct will not make any additional sales of common stock without our consent through September 1, 2021. -
During the quarter, Trinity received a
$207 million income tax refund associated with the tax loss carryback for the 2019 tax year as permitted under recent tax legislation. The Company's income tax receivable at the end of the second quarter was$233 million .
Conference Call
Trinity will hold a conference call at 8:30 a.m. Eastern on July 22, 2021 to discuss its second quarter results. To listen to the call, please visit the Investor Relations section of the Company's website at www.trin.net and access the Events & Presentations webpage, or the live call can be accessed at 1-888-317-6003 with the conference passcode "6833145". Please call at least 10 minutes in advance to ensure a timely connection. An audio replay may be accessed through the Company’s website or by dialing 1-877-344-7529 with passcode "10152026" until 11:59 p.m. Eastern on July 29, 2021.
Additionally, the Company will provide Supplemental Materials to accompany the earnings conference call. The materials will be accessible both within the webcast and on Trinity's Investor Relations website under the Events and Presentations portion of the site along with the Second Quarter Earnings Call event weblink.
Non-GAAP Financial Measures
We have included financial measures compiled in accordance with generally accepted accounting principles ("GAAP") and certain non-GAAP measures in this earnings press release to provide management and investors with additional information regarding our financial results. Non-GAAP measures should not be considered in isolation or as a substitute for our reporting results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. For each non-GAAP financial measure, a reconciliation to the most comparable GAAP measure has been included in the accompanying tables. When forward-looking non-GAAP measures are provided, quantitative reconciliations to the most directly comparable GAAP measures are not provided because management cannot, without unreasonable effort, predict the timing and amounts of certain items included in the computations of each of these measures. These factors include, but are not limited to: the product mix of expected railcar deliveries; the timing and amount of significant transactions and investments, such as lease portfolio sales, capital expenditures, and returns of capital to shareholders; and the amount and timing of certain other items outside the normal course of our core business operations, such as restructuring activities and the potential financial and operational impacts of the COVID-19 pandemic.
About Trinity Industries
Trinity Industries, Inc., headquartered in Dallas, Texas, owns businesses that are leading providers of rail transportation products and services in North America. Our rail-related businesses market their railcar products and services under the trade name TrinityRail®. The TrinityRail platform provides railcar leasing and management services, as well as railcar manufacturing, maintenance and modifications. Trinity also owns businesses engaged in the manufacture of products used on the nation’s roadways and in traffic control. Trinity reports its financial results in three principal business segments: the Railcar Leasing and Management Services Group, the Rail Products Group, and All Other. For more information, visit: 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, including, but not limited to, future financial and operating performance, future opportunities and any other statements regarding events or developments that Trinity believes or anticipates will or may occur in the future, including the potential financial and operational impacts of the COVID-19 pandemic. Trinity uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance,” “projected,” “outlook,” and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this release, and Trinity expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Trinity’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to risks and uncertainties regarding economic, competitive, governmental, and technological factors affecting Trinity’s operations, markets, products, services and prices, and such forward-looking statements are not guarantees of future performance. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and “Forward-Looking Statements” in Trinity’s Annual Report on Form 10-K for the most recent fiscal year, as may be revised and updated by Trinity’s Quarterly Reports on Form 10-Q, and Trinity’s Current Reports on Form 8-K.
- TABLES TO FOLLOW -
Trinity Industries, Inc. Condensed Consolidated Statements of Operations (in millions, except per share amounts) (unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues |
$ |
371.5 |
|
|
$ |
509.2 |
|
|
$ |
770.3 |
|
|
$ |
1,124.4 |
|
Operating costs: |
|
|
|
|
|
|
|
||||||||
Cost of revenues |
259.2 |
|
|
396.6 |
|
|
555.2 |
|
|
878.6 |
|
||||
Selling, engineering, and administrative expenses |
57.7 |
|
|
56.8 |
|
|
112.1 |
|
|
121.1 |
|
||||
Gains on dispositions of property: |
|
|
|
|
|
|
|
||||||||
Lease portfolio sales |
11.1 |
|
|
5.7 |
|
|
12.8 |
|
|
14.4 |
|
||||
Other |
1.0 |
|
|
0.9 |
|
|
10.8 |
|
|
1.8 |
|
||||
Impairment of long-lived assets |
— |
|
|
369.4 |
|
|
— |
|
|
369.4 |
|
||||
Restructuring activities, net |
(0.7 |
) |
|
0.3 |
|
|
(1.0 |
) |
|
5.8 |
|
||||
|
304.1 |
|
|
816.5 |
|
|
642.7 |
|
|
1,358.7 |
|
||||
Operating profit (loss) |
67.4 |
|
|
(307.3 |
) |
|
127.6 |
|
|
(234.3 |
) |
||||
Interest expense, net |
51.0 |
|
|
53.0 |
|
|
102.3 |
|
|
106.9 |
|
||||
Loss on extinguishment of debt |
11.7 |
|
|
— |
|
|
11.7 |
|
|
5.0 |
|
||||
Other, net |
0.8 |
|
|
(0.7 |
) |
|
2.0 |
|
|
(1.5 |
) |
||||
Income (loss) from continuing operations before income taxes |
3.9 |
|
|
(359.6 |
) |
|
11.6 |
|
|
(344.7 |
) |
||||
Provision (benefit) for income taxes: |
|
|
|
|
|
|
|
||||||||
Current |
0.5 |
|
|
(79.7 |
) |
|
5.3 |
|
|
(452.5 |
) |
||||
Deferred |
(1.4 |
) |
|
7.9 |
|
|
(0.2 |
) |
|
233.1 |
|
||||
|
(0.9 |
) |
|
(71.8 |
) |
|
5.1 |
|
|
(219.4 |
) |
||||
Income (loss) from continuing operations |
4.8 |
|
|
(287.8 |
) |
|
6.5 |
|
|
(125.3 |
) |
||||
Loss from discontinued operations, net of income taxes |
— |
|
|
— |
|
|
(0.4 |
) |
|
(0.2 |
) |
||||
Net income (loss) |
4.8 |
|
|
(287.8 |
) |
|
6.1 |
|
|
(125.5 |
) |
||||
Net loss attributable to noncontrolling interest |
(7.9 |
) |
|
(80.9 |
) |
|
(9.9 |
) |
|
(80.3 |
) |
||||
Net income (loss) attributable to Trinity Industries, Inc. |
$ |
12.7 |
|
|
$ |
(206.9 |
) |
|
$ |
16.0 |
|
|
$ |
(45.2 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share: |
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
$ |
0.12 |
|
|
$ |
(1.76 |
) |
|
$ |
0.15 |
|
|
$ |
(0.38 |
) |
Income (loss) from discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Basic net income (loss) attributable to Trinity Industries, Inc. |
$ |
0.12 |
|
|
$ |
(1.76 |
) |
|
$ |
0.15 |
|
|
$ |
(0.38 |
) |
Diluted earnings per common share: |
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
$ |
0.12 |
|
|
$ |
(1.76 |
) |
|
$ |
0.15 |
|
|
$ |
(0.38 |
) |
Income (loss) from discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Diluted net income (loss) attributable to Trinity Industries, Inc. |
$ |
0.12 |
|
|
$ |
(1.76 |
) |
|
$ |
0.15 |
|
|
$ |
(0.38 |
) |
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
102.8 |
|
|
117.3 |
|
|
106.4 |
|
|
117.6 |
|
||||
Diluted |
105.1 |
|
|
117.3 |
|
|
108.9 |
|
|
117.6 |
|
||||
Trinity has certain unvested restricted stock awards that participate in dividends on a nonforfeitable basis and are therefore considered to be participating securities. Consequently, diluted net income (loss) attributable to Trinity Industries, Inc. per common share is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented. There were no restricted shares and stock options included in the computation of diluted EPS for the three and six months ended June 30, 2020 as we incurred a loss for these periods, and any effect on loss per common share would have been antidilutive.
Trinity Industries, Inc. Condensed Segment Data (in millions) (unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
Revenues: |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Railcar Leasing and Management Services Group |
$ |
185.1 |
|
|
$ |
192.8 |
|
|
$ |
368.6 |
|
|
$ |
429.1 |
|
Rail Products Group |
261.8 |
|
|
405.6 |
|
|
522.8 |
|
|
915.0 |
|
||||
All Other |
78.2 |
|
|
69.3 |
|
|
146.3 |
|
|
132.7 |
|
||||
Segment Totals before Eliminations |
525.1 |
|
|
667.7 |
|
|
1,037.7 |
|
|
1,476.8 |
|
||||
Eliminations – Lease Subsidiary |
(151.0 |
) |
|
(156.0 |
) |
|
(262.3 |
) |
|
(346.4 |
) |
||||
Eliminations – Other |
(2.6 |
) |
|
(2.5 |
) |
|
(5.1 |
) |
|
(6.0 |
) |
||||
Consolidated Total |
$ |
371.5 |
|
|
$ |
509.2 |
|
|
$ |
770.3 |
|
|
$ |
1,124.4 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
Operating profit (loss): |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Railcar Leasing and Management Services Group |
$ |
81.1 |
|
|
$ |
82.9 |
|
|
$ |
159.4 |
|
|
$ |
175.8 |
|
Rail Products Group |
3.2 |
|
|
7.9 |
|
|
(5.6 |
) |
|
33.0 |
|
||||
All Other |
12.8 |
|
|
7.3 |
|
|
28.1 |
|
|
16.6 |
|
||||
Segment Totals before Eliminations, Corporate Expenses, Impairment of long-lived assets, and Restructuring activities |
97.1 |
|
|
98.1 |
|
|
181.9 |
|
|
225.4 |
|
||||
Corporate |
(27.1 |
) |
|
(24.2 |
) |
|
(49.8 |
) |
|
(52.3 |
) |
||||
Impairment of long-lived assets |
— |
|
|
(369.4 |
) |
|
— |
|
|
(369.4 |
) |
||||
Restructuring activities, net |
0.7 |
|
|
(0.3 |
) |
|
1.0 |
|
|
(5.8 |
) |
||||
Eliminations – Lease Subsidiary |
(3.0 |
) |
|
(11.0 |
) |
|
(4.8 |
) |
|
(30.9 |
) |
||||
Eliminations – Other |
(0.3 |
) |
|
(0.5 |
) |
|
(0.7 |
) |
|
(1.3 |
) |
||||
Consolidated Total |
$ |
67.4 |
|
|
$ |
(307.3 |
) |
|
$ |
127.6 |
|
|
$ |
(234.3 |
) |
Trinity Industries, Inc. Selected Financial Information – Leasing Group ($ in millions) (unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Leasing and management |
$ |
185.1 |
|
|
$ |
182.7 |
|
|
$ |
368.6 |
|
|
$ |
374.7 |
|
Sales of railcars owned one year or less at the time of sale (1) |
— |
|
|
10.1 |
|
|
— |
|
|
54.4 |
|
||||
Total revenues |
$ |
185.1 |
|
|
$ |
192.8 |
|
|
$ |
368.6 |
|
|
$ |
429.1 |
|
Operating profit (2): |
|
|
|
|
|
|
|
||||||||
Leasing and management |
$ |
70.0 |
|
|
$ |
78.5 |
|
|
$ |
146.6 |
|
|
$ |
161.0 |
|
Lease portfolio sales (1) |
11.1 |
|
|
4.4 |
|
|
12.8 |
|
|
14.8 |
|
||||
Total operating profit |
$ |
81.1 |
|
|
$ |
82.9 |
|
|
$ |
159.4 |
|
|
$ |
175.8 |
|
Total operating profit margin |
43.8 |
% |
|
43.0 |
% |
|
43.2 |
% |
|
41.0 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Leasing and management operating profit margin |
37.8 |
% |
|
43.0 |
% |
|
39.8 |
% |
|
43.0 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Selected expense information: |
|
|
|
|
|
|
|
||||||||
Depreciation (3) |
$ |
57.2 |
|
|
$ |
54.0 |
|
|
$ |
111.8 |
|
|
$ |
107.6 |
|
Maintenance and compliance |
$ |
25.3 |
|
|
$ |
23.0 |
|
|
$ |
50.9 |
|
|
$ |
48.9 |
|
Rent |
$ |
1.7 |
|
|
$ |
3.0 |
|
|
$ |
3.4 |
|
|
$ |
6.0 |
|
Selling, engineering, and administrative expenses |
$ |
13.2 |
|
|
$ |
13.0 |
|
|
$ |
24.5 |
|
|
$ |
27.3 |
|
Interest (4) |
$ |
57.0 |
|
|
$ |
47.1 |
|
|
$ |
102.7 |
|
|
$ |
102.2 |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
|
(in millions) |
||||||||||||||
Lease portfolio sales |
$ |
71.5 |
|
|
$ |
73.8 |
|
|
$ |
88.8 |
|
|
$ |
186.6 |
|
Operating profit on lease portfolio sales |
$ |
11.1 |
|
|
$ |
4.4 |
|
|
$ |
12.8 |
|
|
$ |
14.8 |
|
Operating profit margin on lease portfolio sales |
15.5 |
% |
|
6.0 |
% |
|
14.4 |
% |
|
7.9 |
% |
||||
(1) Beginning in the fourth quarter of 2020, we made a prospective change to the presentation of railcar sales and now present all sales of railcars from the lease fleet as a net gain or loss from the disposal of a long-term asset regardless of the age of railcar that is sold. Historically, we presented sales of railcars from the lease fleet on a gross basis in leasing revenues and cost of revenues if the railcars had been owned for one year or less at the time of sale. Sales of railcars from the lease fleet owned for more than one year had historically been presented as a net gain or loss from the disposal of a long-term asset. |
(2) Operating profit includes: depreciation; maintenance and compliance; rent; and selling, engineering, and administrative expenses. Amortization of deferred profit on railcars sold from the Rail Products Group to the Leasing Group is included in the operating profit of the Leasing Group, resulting in the recognition of depreciation expense based on the Company's original manufacturing cost of the railcars. Interest expense is not a component of operating profit and includes the effect of hedges. |
(3) Depreciation expense related to our small cube covered hopper railcars decreased by approximately |
(4) Interest expense for the three and six months ended June 30, 2021 includes |
Trinity Industries, Inc. Condensed Consolidated Balance Sheets (in millions) (unaudited) |
|||||||
|
June 30, 2021 |
|
December 31, 2020 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
91.0 |
|
|
$ |
132.0 |
|
Receivables, net of allowance |
218.3 |
|
|
199.0 |
|
||
Income tax receivable |
233.1 |
|
|
445.8 |
|
||
Inventories |
365.6 |
|
|
321.2 |
|
||
Restricted cash |
164.7 |
|
|
96.4 |
|
||
Property, plant, and equipment, net |
7,048.7 |
|
|
7,003.4 |
|
||
Goodwill |
215.7 |
|
|
208.8 |
|
||
Other assets |
279.9 |
|
|
295.2 |
|
||
Total assets |
$ |
8,617.0 |
|
|
$ |
8,701.8 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Accounts payable |
$ |
188.1 |
|
|
$ |
156.4 |
|
Accrued liabilities |
275.9 |
|
|
314.7 |
|
||
Debt |
5,288.2 |
|
|
5,017.0 |
|
||
Deferred income taxes |
1,049.3 |
|
|
1,047.5 |
|
||
Other liabilities |
157.6 |
|
|
150.2 |
|
||
Stockholders' equity: |
|
|
|
||||
Trinity Industries, Inc. |
1,389.9 |
|
|
1,738.8 |
|
||
Noncontrolling interest |
268.0 |
|
|
277.2 |
|
||
|
1,657.9 |
|
|
2,016.0 |
|
||
Total liabilities and stockholders' equity |
$ |
8,617.0 |
|
|
$ |
8,701.8 |
|
Trinity Industries, Inc. Additional Balance Sheet Information (in millions) (unaudited) |
|||||||
|
June 30, 2021 |
|
December 31, 2020 |
||||
Property, Plant, and Equipment |
|
|
|
||||
Manufacturing/Corporate: |
|
|
|
||||
Property, plant, and equipment |
$ |
970.2 |
|
|
$ |
979.4 |
|
Accumulated depreciation |
(576.5 |
) |
|
(577.9 |
) |
||
|
393.7 |
|
|
401.5 |
|
||
Leasing: |
|
|
|
||||
Wholly-owned subsidiaries: |
|
|
|
||||
Machinery and other |
19.4 |
|
|
19.5 |
|
||
Equipment on lease |
7,154.8 |
|
|
7,010.6 |
|
||
Accumulated depreciation |
(1,320.5 |
) |
|
(1,234.2 |
) |
||
|
5,853.7 |
|
|
5,795.9 |
|
||
Partially-owned subsidiaries: |
|
|
|
||||
Equipment on lease |
2,255.6 |
|
|
2,248.2 |
|
||
Accumulated depreciation |
(650.0 |
) |
|
(621.9 |
) |
||
|
1,605.6 |
|
|
1,626.3 |
|
||
|
|
|
|
||||
Deferred profit on railcars sold to the Leasing Group |
(1,062.9 |
) |
|
(1,064.7 |
) |
||
Accumulated amortization |
258.6 |
|
|
244.4 |
|
||
|
(804.3 |
) |
|
(820.3 |
) |
||
|
$ |
7,048.7 |
|
|
$ |
7,003.4 |
|
|
June 30, 2021 |
|
December 31, 2020 |
||||
Debt |
|
|
|
||||
Corporate – Recourse: |
|
|
|
||||
Revolving credit facility |
$ |
50.0 |
|
|
$ |
50.0 |
|
Senior notes, net of unamortized discount of |
399.8 |
|
|
399.8 |
|
||
|
449.8 |
|
|
449.8 |
|
||
Less: unamortized debt issuance costs |
(1.4 |
) |
|
(1.6 |
) |
||
Total recourse debt |
448.4 |
|
|
448.2 |
|
||
|
|
|
|
||||
Leasing – Non-recourse: |
|
|
|
||||
Wholly-owned subsidiaries: |
|
|
|
||||
Secured railcar equipment notes, net of unamortized discount of |
2,318.1 |
|
|
2,042.4 |
|
||
2017 promissory notes, net of unamortized discount of |
781.4 |
|
|
802.7 |
|
||
TILC warehouse facility |
534.2 |
|
|
519.4 |
|
||
|
3,633.7 |
|
|
3,364.5 |
|
||
Less: unamortized debt issuance costs |
(26.4 |
) |
|
(24.0 |
) |
||
|
3,607.3 |
|
|
3,340.5 |
|
||
Partially-owned subsidiaries: |
|
|
|
||||
Secured railcar equipment notes, net of unamortized discount of |
915.1 |
|
|
1,237.5 |
|
||
TRIP Railcar Co. term loan |
329.6 |
|
|
— |
|
||
Less: unamortized debt issuance costs |
(12.2 |
) |
|
(9.2 |
) |
||
|
1,232.5 |
|
|
1,228.3 |
|
||
Total non–recourse debt |
4,839.8 |
|
|
4,568.8 |
|
||
Total debt |
$ |
5,288.2 |
|
|
$ |
5,017.0 |
|
Trinity Industries, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
|||||||
|
Six Months Ended
|
||||||
|
2021 |
|
2020 |
||||
Operating activities: |
|
|
|
||||
Net cash provided by operating activities – continuing operations |
$ |
335.1 |
|
|
$ |
327.8 |
|
Net cash used in operating activities – discontinued operations |
(0.4 |
) |
|
(0.2 |
) |
||
Net cash provided by operating activities |
334.7 |
|
|
327.6 |
|
||
|
|
|
|
||||
Investing activities: |
|
|
|
||||
Proceeds from lease portfolio sales |
88.8 |
|
|
132.2 |
|
||
Proceeds from dispositions of property and other assets |
24.0 |
|
|
14.2 |
|
||
Capital expenditures – leasing (net of sold lease fleet railcars owned one year or less with a net cost of |
(251.7 |
) |
|
(259.5 |
) |
||
Capital expenditures – manufacturing and other |
(17.4 |
) |
|
(41.5 |
) |
||
Acquisitions, net of cash acquired |
(16.6 |
) |
|
— |
|
||
Other |
(0.1 |
) |
|
— |
|
||
Net cash used in investing activities |
(173.0 |
) |
|
(154.6 |
) |
||
|
|
|
|
||||
Financing activities: |
|
|
|
||||
Net (repayments of) proceeds from debt |
251.5 |
|
|
(65.9 |
) |
||
Shares repurchased |
(329.4 |
) |
|
(35.4 |
) |
||
Dividends paid to common shareholders |
(47.4 |
) |
|
(46.4 |
) |
||
Other |
(9.1 |
) |
|
(9.0 |
) |
||
Net cash used in financing activities |
(134.4 |
) |
|
(156.7 |
) |
||
Net increase in cash, cash equivalents, and restricted cash |
27.3 |
|
|
16.3 |
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
228.4 |
|
|
277.6 |
|
||
Cash, cash equivalents, and restricted cash at end of period |
$ |
255.7 |
|
|
$ |
293.9 |
|
Trinity Industries, Inc.
Reconciliations of Non-GAAP Measures
(in millions, except per share amounts)
(unaudited)
Adjusted Operating Results
We have supplemented the presentation of our reported GAAP operating profit (loss), income (loss) from continuing operations before income taxes, provision (benefit) for income taxes, income (loss) from continuing operations, net income (loss) from continuing operations attributable to Trinity Industries, Inc., and diluted income (loss) from continuing operations per common share attributable to Trinity Industries, Inc. with non-GAAP measures that adjust the GAAP measures to exclude the impact of pension plan settlement, impairment of long-lived assets, restructuring activities, loss on extinguishment of debt, the income tax effects of the CARES Act, and certain other transactions or events (as applicable). These non-GAAP measures are derived from amounts included in our GAAP financial statements and are reconciled to the most directly comparable GAAP financial measures in the tables below. Management believes that these measures are useful to both management and investors for analyzing the performance of our business without the impact of certain items that are not indicative of our normal business operations. Non-GAAP measures should not be considered in isolation or as a substitute for our reporting results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
|
Three Months Ended June 30, 2021 |
||||||||||||||||||||||||||
|
GAAP |
|
Pension plan settlement (1) |
|
Restructuring activities (1) |
|
Loss on extinguishment of debt – Controlling Interest (1)(2) |
|
Loss on extinguishment of debt – Noncontrolling Interest (3) |
|
Income tax effect of CARES Act |
|
Adjusted |
||||||||||||||
Operating profit (loss) |
$ |
67.4 |
|
|
$ |
— |
|
|
$ |
(0.7 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
66.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations before income taxes |
$ |
3.9 |
|
|
$ |
1.0 |
|
|
$ |
(0.7 |
) |
|
$ |
4.6 |
|
|
$ |
7.1 |
|
|
$ |
— |
|
|
$ |
15.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Provision (benefit) for income taxes |
$ |
(0.9 |
) |
|
$ |
0.2 |
|
|
$ |
(0.2 |
) |
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
0.4 |
|
|
$ |
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations |
$ |
4.8 |
|
|
$ |
0.8 |
|
|
$ |
(0.5 |
) |
|
$ |
3.6 |
|
|
$ |
7.1 |
|
|
$ |
(0.4 |
) |
|
$ |
15.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) from continuing operations attributable to Trinity Industries, Inc. |
$ |
12.7 |
|
|
$ |
0.8 |
|
|
$ |
(0.5 |
) |
|
$ |
3.6 |
|
|
$ |
— |
|
|
$ |
(0.4 |
) |
|
$ |
16.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted weighted average shares outstanding |
105.1 |
|
|
|
|
|
|
|
|
|
|
|
|
105.1 |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted income (loss) from continuing operations per common share attributable to Trinity Industries, Inc. |
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.15 |
|
||||||||||
|
Three Months Ended June 30, 2020 |
||||||||||||||||||||||
|
GAAP |
|
Impairment of long-lived assets – Controlling Interest (1)(4) |
|
Impairment of long-lived assets – Noncontrolling Interest (3) |
|
Restructuring activities (1) |
|
Income tax effect of CARES Act |
|
Adjusted |
||||||||||||
Operating profit (loss) |
$ |
(307.3 |
) |
|
$ |
288.1 |
|
|
$ |
81.3 |
|
|
$ |
0.3 |
|
|
$ |
— |
|
|
$ |
62.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations before income taxes |
$ |
(359.6 |
) |
|
$ |
288.1 |
|
|
$ |
81.3 |
|
|
$ |
0.3 |
|
|
$ |
— |
|
|
$ |
10.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision (benefit) for income taxes |
$ |
(71.8 |
) |
|
$ |
67.4 |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
11.3 |
|
|
$ |
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations |
$ |
(287.8 |
) |
|
$ |
220.7 |
|
|
$ |
81.3 |
|
|
$ |
0.2 |
|
|
$ |
(11.3 |
) |
|
$ |
3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) from continuing operations attributable to Trinity Industries, Inc. |
$ |
(206.9 |
) |
|
$ |
220.7 |
|
|
$ |
— |
|
|
$ |
0.2 |
|
|
$ |
(11.3 |
) |
|
$ |
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted weighted average shares outstanding (5) |
117.3 |
|
|
|
|
|
|
|
|
|
|
118.7 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted income (loss) from continuing operations per common share attributable to Trinity Industries, Inc. |
$ |
(1.76 |
) |
|
|
|
|
|
|
|
|
|
$ |
0.02 |
|
||||||||
|
Six Months Ended June 30, 2021 |
||||||||||||||||||||||||||
|
GAAP |
|
Pension plan settlement (1) |
|
Restructuring activities (1) |
|
Loss on extinguishment of debt – Controlling Interest (1)(2) |
|
Loss on extinguishment of debt – Noncontrolling Interest (3) |
|
Income tax effect of CARES Act |
|
Adjusted |
||||||||||||||
Operating profit (loss) |
$ |
127.6 |
|
|
$ |
— |
|
|
$ |
(1.0 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
126.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations before income taxes |
$ |
11.6 |
|
|
$ |
2.2 |
|
|
$ |
(1.0 |
) |
|
$ |
4.6 |
|
|
$ |
7.1 |
|
|
$ |
— |
|
|
$ |
24.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Provision (benefit) for income taxes |
$ |
5.1 |
|
|
$ |
0.5 |
|
|
$ |
(0.3 |
) |
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
(3.4 |
) |
|
$ |
2.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations |
$ |
6.5 |
|
|
$ |
1.7 |
|
|
$ |
(0.7 |
) |
|
$ |
3.6 |
|
|
$ |
7.1 |
|
|
$ |
3.4 |
|
|
$ |
21.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) from continuing operations attributable to Trinity Industries, Inc. |
$ |
16.4 |
|
|
$ |
1.7 |
|
|
$ |
(0.7 |
) |
|
$ |
3.6 |
|
|
$ |
— |
|
|
$ |
3.4 |
|
|
$ |
24.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted weighted average shares outstanding |
108.9 |
|
|
|
|
|
|
|
|
|
|
|
|
108.9 |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted income (loss) from continuing operations per common share attributable to Trinity Industries, Inc. |
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.22 |
|
||||||||||
|
Six Months Ended June 30, 2020 |
||||||||||||||||||||||||||
|
GAAP |
|
Impairment of long-lived assets – Controlling Interest (1)(4) |
|
Impairment of long-lived assets – Noncontrolling Interest (3) |
|
Restructuring activities (1) |
|
Loss on extinguishment of debt (1) |
|
Income tax effect of CARES Act |
|
Adjusted |
||||||||||||||
Operating profit (loss) |
$ |
(234.3 |
) |
|
$ |
288.1 |
|
|
$ |
81.3 |
|
|
$ |
5.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
140.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations before income taxes |
$ |
(344.7 |
) |
|
$ |
288.1 |
|
|
$ |
81.3 |
|
|
$ |
5.8 |
|
|
$ |
5.0 |
|
|
$ |
— |
|
|
$ |
35.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Provision (benefit) for income taxes |
$ |
(219.4 |
) |
|
$ |
67.4 |
|
|
$ |
— |
|
|
$ |
1.4 |
|
|
$ |
1.2 |
|
|
$ |
166.0 |
|
|
$ |
16.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations |
$ |
(125.3 |
) |
|
$ |
220.7 |
|
|
$ |
81.3 |
|
|
$ |
4.4 |
|
|
$ |
3.8 |
|
|
$ |
(166.0 |
) |
|
$ |
18.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) from continuing operations attributable to Trinity Industries, Inc. |
$ |
(45.0 |
) |
|
$ |
220.7 |
|
|
$ |
— |
|
|
$ |
4.4 |
|
|
$ |
3.8 |
|
|
$ |
(166.0 |
) |
|
$ |
17.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted weighted average shares outstanding (5) |
117.6 |
|
|
|
|
|
|
|
|
|
|
|
|
119.3 |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted income (loss) from continuing operations per common share attributable to Trinity Industries, Inc. |
$ |
(0.38 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
0.15 |
|
||||||||||
(1) The effective tax rate for pension plan settlement, impairment of long-lived assets, restructuring activities, and the loss on extinguishment of debt is before consideration of the CARES Act. |
(2) Excludes |
(3) Represents the portion of the non-cash impairment of long-lived asset charge and the loss on extinguishment of debt attributable to the noncontrolling interest, for which Trinity does not provide income taxes. |
(4) Excludes |
(5) GAAP diluted weighted average shares outstanding excludes 1.4 million and 1.7 million shares for the three and six months ended June 30, 2020, respectively, since the Company was in a net loss position for these periods. When adjusting for the items above, these shares become dilutive. |
Free Cash Flow
Total Free Cash Flow After Investments and Dividends ("Free Cash Flow") is a non-GAAP financial measure. The change in presentation of sales of railcars from the lease fleet, which was effected on a prospective basis beginning in the fourth quarter of 2020, had no effect on our previously reported Free Cash Flow.
We believe Free Cash Flow is useful to both management and investors as it provides a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. Free Cash Flow is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following tables.
For the six months ended June 30, 2021, Free Cash Flow is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus cash proceeds from lease portfolio sales, less capital expenditures for manufacturing, dividends paid, and Equity CapEx for new leased railcars. Equity CapEx for new leased railcars is defined as leasing capital expenditures, adjusted to exclude net proceeds from (repayments of) debt.
|
Six Months Ended
|
||
|
(in millions) |
||
Net cash provided by operating activities – continuing operations |
$ |
335.1 |
|
Proceeds from lease portfolio sales |
88.8 |
|
|
Adjusted Net Cash Provided by Operating Activities |
423.9 |
|
|
Capital expenditures – manufacturing and other |
(17.4 |
) |
|
Dividends paid to common stockholders |
(47.4 |
) |
|
Free Cash Flow (before Capital expenditures – leasing) |
359.1 |
|
|
Equity CapEx for new leased railcars |
(0.2 |
) |
|
Total Free Cash Flow After Investments and Dividends |
$ |
358.9 |
|
|
|
||
Capital expenditures – leasing |
$ |
251.7 |
|
Less: |
|
||
Payments to retire debt |
(1,925.2 |
) |
|
Proceeds from issuance of debt |
2,176.7 |
|
|
Net proceeds from (repayments of) debt |
251.5 |
|
|
Equity CapEx for new leased railcars |
$ |
0.2 |
|
For the six months ended June 30, 2020, Free Cash Flow is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus cash proceeds from sales of leased railcars owned more than one year at the time of sale, less capital expenditures for manufacturing, dividends paid, and Equity CapEx for new leased railcars. Equity CapEx for new leased railcars is defined as leasing capital expenditures, net of sold lease fleet railcars owned one year or less, adjusted to exclude net proceeds from (repayments of) debt.
|
Six Months Ended
|
||
|
(in millions) |
||
Net cash provided by operating activities – continuing operations |
$ |
327.8 |
|
Proceeds from railcar lease fleet sales owned more than one year at the time of sale |
132.2 |
|
|
Adjusted Net Cash Provided by Operating Activities |
460.0 |
|
|
Capital expenditures – manufacturing and other |
(41.5 |
) |
|
Dividends paid to common stockholders |
(46.4 |
) |
|
Free Cash Flow (before Capital expenditures – leasing) |
372.1 |
|
|
Equity CapEx for new leased railcars |
(325.4 |
) |
|
Total Free Cash Flow After Investments and Dividends |
$ |
46.7 |
|
|
|
||
Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less of |
$ |
259.5 |
|
Less: |
|
||
Payments to retire debt |
(618.3 |
) |
|
Proceeds from issuance of debt |
552.4 |
|
|
Net proceeds from (repayments of) debt |
(65.9 |
) |
|
Equity CapEx for new leased railcars |
$ |
325.4 |
|
EBITDA and Adjusted EBITDA
“EBITDA” is defined as income (loss) from continuing operations plus interest expense, income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA plus non-cash impairment of long-lived assets, restructuring activities, loss on extinguishment of debt, and pension plan settlement. EBITDA and Adjusted EBITDA are non-GAAP financial measures; however, the amounts included in these calculations are derived from amounts included in our GAAP financial statements. EBITDA and Adjusted EBITDA are reconciled to net income (loss), the most directly comparable GAAP financial measure, in the following table. This information is provided to assist management and investors in making meaningful comparisons of our operating performance between periods. We believe EBITDA is a useful measure for analyzing the performance of our business. We also believe that EBITDA is commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation or amortization (which can vary significantly depending on many factors). EBITDA and Adjusted EBITDA should not be considered as alternatives to net income as indicators of our operating performance, or as alternatives to operating cash flows as measures of liquidity. Non-GAAP measures should not be considered in isolation or as a substitute for our reporting results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net income (loss) |
$ |
4.8 |
|
|
$ |
(287.8 |
) |
|
$ |
6.1 |
|
|
$ |
(125.5 |
) |
Less: Loss from discontinued operations, net of income taxes |
— |
|
|
— |
|
|
(0.4 |
) |
|
(0.2 |
) |
||||
Income (loss) from continuing operations |
$ |
4.8 |
|
|
$ |
(287.8 |
) |
|
$ |
6.5 |
|
|
$ |
(125.3 |
) |
Interest expense |
51.1 |
|
|
53.0 |
|
|
102.5 |
|
|
109.3 |
|
||||
Provision (benefit) for income taxes |
(0.9 |
) |
|
(71.8 |
) |
|
5.1 |
|
|
(219.4 |
) |
||||
Depreciation and amortization expense |
69.1 |
|
|
67.7 |
|
|
135.7 |
|
|
134.6 |
|
||||
EBITDA |
$ |
124.1 |
|
|
$ |
(238.9 |
) |
|
$ |
249.8 |
|
|
$ |
(100.8 |
) |
Impairment of long-lived assets |
— |
|
|
369.4 |
|
|
— |
|
|
369.4 |
|
||||
Restructuring activities, net |
(0.7 |
) |
|
0.3 |
|
|
(1.0 |
) |
|
5.8 |
|
||||
Loss on extinguishment of debt |
11.7 |
|
|
— |
|
|
11.7 |
|
|
5.0 |
|
||||
Pension plan settlement |
1.0 |
|
|
— |
|
|
2.2 |
|
|
— |
|
||||
Adjusted EBITDA |
$ |
136.1 |
|
|
$ |
130.8 |
|
|
$ |
262.7 |
|
|
$ |
279.4 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005161/en/
FAQ
What were Trinity Industries' earnings results for Q2 2021?
How many new railcar orders did Trinity Industries receive in Q2 2021?
What is the current cash flow from operations for Trinity Industries?
What was the free cash flow for Trinity Industries as of Q2 2021?
How much stock did Trinity Industries repurchase in Q2 2021?
