10-Q 1 trn-20220331.htm 10-Q trn-20220331
TRINITY INDUSTRIES INC0000099780false2022Q112/3100000997802022-01-012022-03-3100000997802022-04-20xbrli:shares0000099780trn:ManufacturingMember2022-01-012022-03-31iso4217:USD0000099780trn:ManufacturingMember2021-01-012021-03-310000099780trn:LeasingMember2022-01-012022-03-310000099780trn:LeasingMember2021-01-012021-03-3100000997802021-01-012021-03-310000099780trn:OtherMember2022-01-012022-03-310000099780trn:OtherMember2021-01-012021-03-31iso4217:USDxbrli:shares00000997802022-03-3100000997802021-12-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:PartiallyOwnedSubsidiariesMember2022-03-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:PartiallyOwnedSubsidiariesMember2021-12-310000099780trn:PartiallyOwnedSubsidiariesMember2022-03-310000099780trn:PartiallyOwnedSubsidiariesMember2021-12-310000099780trn:WhollyOwnedSubsidiariesMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMember2021-12-3100000997802020-12-3100000997802021-03-310000099780us-gaap:CommonStockMember2021-12-310000099780us-gaap:AdditionalPaidInCapitalMember2021-12-310000099780us-gaap:RetainedEarningsMember2021-12-310000099780us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000099780us-gaap:TreasuryStockMember2021-12-310000099780us-gaap:ParentMember2021-12-310000099780us-gaap:NoncontrollingInterestMember2021-12-310000099780us-gaap:RetainedEarningsMember2022-01-012022-03-310000099780us-gaap:ParentMember2022-01-012022-03-310000099780us-gaap:NoncontrollingInterestMember2022-01-012022-03-310000099780us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000099780us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000099780us-gaap:TreasuryStockMember2022-01-012022-03-310000099780us-gaap:CommonStockMember2022-03-310000099780us-gaap:AdditionalPaidInCapitalMember2022-03-310000099780us-gaap:RetainedEarningsMember2022-03-310000099780us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000099780us-gaap:TreasuryStockMember2022-03-310000099780us-gaap:ParentMember2022-03-310000099780us-gaap:NoncontrollingInterestMember2022-03-310000099780us-gaap:CommonStockMember2020-12-310000099780us-gaap:AdditionalPaidInCapitalMember2020-12-310000099780us-gaap:RetainedEarningsMember2020-12-310000099780us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000099780us-gaap:TreasuryStockMember2020-12-310000099780us-gaap:ParentMember2020-12-310000099780us-gaap:NoncontrollingInterestMember2020-12-310000099780us-gaap:RetainedEarningsMember2021-01-012021-03-310000099780us-gaap:ParentMember2021-01-012021-03-310000099780us-gaap:NoncontrollingInterestMember2021-01-012021-03-310000099780us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000099780us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000099780us-gaap:TreasuryStockMember2021-01-012021-03-310000099780us-gaap:CommonStockMember2021-03-310000099780us-gaap:AdditionalPaidInCapitalMember2021-03-310000099780us-gaap:RetainedEarningsMember2021-03-310000099780us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310000099780us-gaap:TreasuryStockMember2021-03-310000099780us-gaap:ParentMember2021-03-310000099780us-gaap:NoncontrollingInterestMember2021-03-3100000997802021-01-012021-12-310000099780trn:RailProductsGroupMembertrn:RailProductsDomaintrn:ExternalCustomersMember2022-03-310000099780trn:RailProductsGroupMembertrn:LeasingMembertrn:RailProductsDomain2022-03-310000099780trn:RailProductsGroupMembertrn:RailProductsDomain2022-03-31xbrli:pure0000099780trn:RailProductsGroupMembertrn:SustainableRailcarConversionsMember2022-03-310000099780trn:RailProductsGroupMembertrn:MaintenanceServicesDomain2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780srt:MinimumMember2022-03-310000099780srt:MaximumMember2022-03-310000099780trn:ConsolidatedSubsidiariesExcludingLeasingMember2022-03-310000099780srt:MinimumMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMembersrt:MaximumMember2022-03-310000099780srt:MinimumMember2022-01-012022-03-310000099780srt:MaximumMember2022-01-012022-03-310000099780trn:SaleOfHighwayProductsMember2021-01-012021-12-310000099780trn:SaleOfHighwayProductsMember2022-01-012022-03-310000099780trn:SaleOfHighwayProductsMember2021-01-012021-03-310000099780trn:SpinOffOfArcosaMember2021-01-012021-03-310000099780trn:InterestRateSwapExpired2018SecuredRailcarEquipmentNotesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780trn:InterestRateSwapExpired2018SecuredRailcarEquipmentNotesMemberus-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:AccumulatedNetGainLossFromCashFlowHedgesAttributableToNoncontrollingInterestMembertrn:InterestRateSwapExpired2018SecuredRailcarEquipmentNotesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780trn:InterestRateSwapExpiredTRIPHoldingsWarehouseLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMembertrn:InterestRateSwapExpiredTRIPHoldingsWarehouseLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:AccumulatedNetGainLossFromCashFlowHedgesAttributableToNoncontrollingInterestMembertrn:InterestRateSwapExpiredTRIPHoldingsWarehouseLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateCapMemberus-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateCapMemberus-gaap:AccumulatedNetGainLossFromCashFlowHedgesAttributableToNoncontrollingInterestMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:AccumulatedNetGainLossFromCashFlowHedgesAttributableToNoncontrollingInterestMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestExpenseMembertrn:InterestRateSwapExpired2018SecuredRailcarEquipmentNotesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-03-310000099780us-gaap:InterestExpenseMembertrn:InterestRateSwapExpired2018SecuredRailcarEquipmentNotesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-310000099780us-gaap:InterestExpenseMembertrn:InterestRateSwapExpired2018SecuredRailcarEquipmentNotesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestExpenseMembertrn:InterestRateSwapExpiredTRIPHoldingsWarehouseLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-03-310000099780us-gaap:InterestExpenseMembertrn:InterestRateSwapExpiredTRIPHoldingsWarehouseLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-310000099780us-gaap:InterestExpenseMembertrn:InterestRateSwapExpiredTRIPHoldingsWarehouseLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestExpenseMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-03-310000099780us-gaap:InterestExpenseMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-310000099780us-gaap:InterestExpenseMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-03-310000099780us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-310000099780us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000099780us-gaap:FairValueInputsLevel1Member2022-01-012022-03-310000099780us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310000099780us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000099780us-gaap:FairValueInputsLevel2Member2022-01-012022-03-310000099780us-gaap:OtherAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310000099780us-gaap:OtherAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000099780us-gaap:InterestRateSwapMemberus-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310000099780us-gaap:InterestRateSwapMemberus-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000099780us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310000099780us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000099780us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310000099780us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-31trn:segment0000099780trn:RailcarLeasingAndManagementServicesGroupMember2022-01-012022-03-310000099780trn:RailProductsGroupMember2022-01-012022-03-310000099780trn:ConsolidatedSubsidiariesLeasingMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310000099780trn:ConsolidatedSubsidiariesExcludingLeasingMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310000099780trn:RailProductsGroupMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310000099780us-gaap:IntersegmentEliminationMember2022-01-012022-03-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-01-012022-03-310000099780trn:RailProductsGroupMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000099780us-gaap:OperatingSegmentsMember2022-01-012022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMember2021-01-012021-03-310000099780trn:RailProductsGroupMember2021-01-012021-03-310000099780trn:ConsolidatedSubsidiariesLeasingMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000099780trn:ConsolidatedSubsidiariesExcludingLeasingMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000099780trn:RailProductsGroupMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000099780us-gaap:IntersegmentEliminationMember2021-01-012021-03-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2021-01-012021-03-310000099780trn:RailProductsGroupMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000099780us-gaap:OperatingSegmentsMember2021-01-012021-03-310000099780us-gaap:CorporateMember2022-01-012022-03-310000099780us-gaap:CorporateMember2021-01-012021-03-310000099780trn:PartiallyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-01-012022-03-31trn:subsidiary0000099780trn:PartiallyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-31trn:board_member0000099780trn:PartiallyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:PartiallyOwnedSubsidiariesMember2022-03-310000099780trn:SignalRailHoldingsLLCMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:ConsolidatedSubsidiariesLeasingMemberus-gaap:IntersegmentEliminationMember2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2021-12-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2021-12-310000099780trn:ConsolidatedSubsidiariesLeasingMemberus-gaap:IntersegmentEliminationMember2021-12-310000099780trn:RailcarLeasingAndManagementServicesGroupMember2021-12-310000099780trn:LeasingAndManagementMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-01-012022-03-310000099780trn:LeasingAndManagementMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2021-01-012021-03-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:SalesofLeasedRailcarsDomain2022-01-012022-03-310000099780us-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:SalesofLeasedRailcarsDomain2021-01-012021-03-310000099780trn:SustainableRailcarConversionsMember2022-01-012022-03-310000099780trn:SalesOfLeasedRailcarsExcludingSalesTypeLeasesMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-01-012022-03-310000099780us-gaap:RailroadTransportationEquipmentMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780us-gaap:SecuredDebtMembertrn:WhollyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780us-gaap:SecuredDebtMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:TripHoldingsMember2022-03-310000099780us-gaap:SecuredDebtMembertrn:TRP2021SecuredRailcarEquipmentNotesRIV2013Membertrn:RIV2013HoldingsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:OtherThirdPartiesMember2022-01-012022-03-310000099780us-gaap:RailroadTransportationEquipmentMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMembertrn:OtherThirdPartiesMember2022-03-310000099780us-gaap:PropertyLeaseGuaranteeMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780us-gaap:BuildingMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:ManufacturingandCorporateMemberus-gaap:LandMember2022-03-310000099780trn:ManufacturingandCorporateMemberus-gaap:LandMember2021-12-310000099780trn:ManufacturingandCorporateMemberus-gaap:BuildingAndBuildingImprovementsMember2022-03-310000099780trn:ManufacturingandCorporateMemberus-gaap:BuildingAndBuildingImprovementsMember2021-12-310000099780trn:ManufacturingandCorporateMemberus-gaap:MachineryAndEquipmentMember2022-03-310000099780trn:ManufacturingandCorporateMemberus-gaap:MachineryAndEquipmentMember2021-12-310000099780trn:ManufacturingandCorporateMemberus-gaap:ConstructionInProgressMember2022-03-310000099780trn:ManufacturingandCorporateMemberus-gaap:ConstructionInProgressMember2021-12-310000099780trn:ManufacturingandCorporateMember2022-03-310000099780trn:ManufacturingandCorporateMember2021-12-310000099780trn:WhollyOwnedSubsidiariesMemberus-gaap:MachineryAndEquipmentMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMemberus-gaap:MachineryAndEquipmentMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMember2021-12-310000099780trn:WhollyOwnedSubsidiariesMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:RailcarsOnLeaseMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMemberus-gaap:OperatingSegmentsMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:RailcarsOnLeaseMember2021-12-310000099780us-gaap:IntersegmentEliminationMember2022-03-310000099780us-gaap:IntersegmentEliminationMember2021-12-310000099780us-gaap:CorporateMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-03-310000099780us-gaap:CorporateMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-12-310000099780us-gaap:SeniorNotesMemberus-gaap:CorporateMember2022-03-310000099780us-gaap:SeniorNotesMemberus-gaap:CorporateMember2021-12-310000099780us-gaap:CorporateMember2022-03-310000099780us-gaap:CorporateMember2021-12-310000099780trn:WhollyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:SecuredDebtMember2022-03-310000099780trn:WhollyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:SecuredDebtMember2021-12-310000099780trn:WhollyOwnedSubsidiariesMembertrn:PromissoryNotesMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:A2017SecuredRailcarEquipmentNotesMemberDomain2022-03-310000099780trn:WhollyOwnedSubsidiariesMembertrn:PromissoryNotesMembertrn:RailcarLeasingAndManagementServicesGroupMembertrn:A2017SecuredRailcarEquipmentNotesMemberDomain2021-12-310000099780trn:TilcWarehouseFacilityMembertrn:TILCMembertrn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-03-310000099780trn:TilcWarehouseFacilityMembertrn:TILCMembertrn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-12-310000099780trn:WhollyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMember2021-12-310000099780trn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:SecuredDebtMembertrn:PartiallyOwnedSubsidiariesMember2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:SecuredDebtMembertrn:PartiallyOwnedSubsidiariesMember2021-12-310000099780trn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:LineOfCreditMembertrn:TRIPRailcarCoTermLoanMember2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:LineOfCreditMembertrn:TRIPRailcarCoTermLoanMember2021-12-310000099780trn:RailcarLeasingAndManagementServicesGroupMembertrn:PartiallyOwnedSubsidiariesMember2022-03-310000099780trn:RailcarLeasingAndManagementServicesGroupMembertrn:PartiallyOwnedSubsidiariesMember2021-12-310000099780us-gaap:SeniorNotesMembertrn:A4.55SeniorNotesDueOctober2024Memberus-gaap:CorporateMember2022-03-310000099780us-gaap:FairValueInputsLevel1Member2022-03-310000099780us-gaap:FairValueInputsLevel1Member2021-12-310000099780us-gaap:FairValueInputsLevel2Member2022-03-310000099780us-gaap:FairValueInputsLevel2Member2021-12-310000099780us-gaap:FairValueInputsLevel3Member2022-03-310000099780us-gaap:FairValueInputsLevel3Member2021-12-310000099780us-gaap:FairValueInputsLevel12And3Member2022-03-310000099780us-gaap:FairValueInputsLevel12And3Member2021-12-310000099780us-gaap:CorporateMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-01-012022-03-310000099780us-gaap:CorporateMemberus-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMember2022-03-310000099780srt:MinimumMemberus-gaap:CorporateMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-03-310000099780us-gaap:CorporateMemberus-gaap:LineOfCreditMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2022-03-310000099780trn:TilcWarehouseFacilityMembertrn:TILCMembertrn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-01-012022-03-310000099780us-gaap:SecuredDebtMembertrn:TRL2022Series20221ClassAGreenSecuredRailcarEquipmentNotesMembertrn:WhollyOwnedSubsidiariesMembertrn:RailcarLeasingAndManagementServicesGroupMemberus-gaap:SubsequentEventMember2022-04-2000000997802020-01-012020-12-310000099780us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310000099780us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-12-310000099780us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-12-310000099780us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310000099780us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-01-012022-03-310000099780us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-01-012022-03-310000099780us-gaap:AccumulatedGainLossNetCashFlowHedgeNoncontrollingInterestMember2022-01-012022-03-310000099780us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310000099780us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-03-310000099780us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-03-310000099780trn:A20212022ShareRepurchaseProgramMember2021-09-090000099780trn:ASRProgramMember2021-12-310000099780trn:ASRProgramMember2021-01-012021-12-310000099780us-gaap:TreasuryStockMembertrn:A20212022ShareRepurchaseProgramMember2021-07-012021-09-300000099780trn:A20212022ShareRepurchaseProgramMember2021-09-300000099780us-gaap:TreasuryStockMembertrn:A20212022ShareRepurchaseProgramMember2021-10-012021-12-310000099780trn:A20212022ShareRepurchaseProgramMember2021-12-310000099780us-gaap:TreasuryStockMembertrn:A20212022ShareRepurchaseProgramMember2022-01-012022-03-310000099780trn:A20212022ShareRepurchaseProgramMember2022-03-310000099780us-gaap:TreasuryStockMembertrn:A20212022ShareRepurchaseProgramMember2022-03-310000099780trn:ASRProgramMember2022-01-012022-03-310000099780trn:ASRProgramMember2022-03-310000099780us-gaap:TreasuryStockMembertrn:A20202021ShareRepurchaseProgramMember2021-01-012021-03-310000099780trn:A20202021ShareRepurchaseProgramMember2021-01-012021-03-310000099780us-gaap:EmployeeStockOptionMember2022-01-012022-03-310000099780srt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310000099780us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2022-01-012022-03-310000099780trn:RestrictedShareAwardsMember2022-01-012022-03-310000099780us-gaap:PerformanceSharesMember2022-01-012022-03-310000099780us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310000099780us-gaap:RestrictedStockMember2022-01-012022-03-310000099780us-gaap:RestrictedStockMember2021-01-012021-03-310000099780us-gaap:EmployeeStockOptionMember2021-01-012021-03-310000099780trn:JoshuaHarmanFalseClaimsActMembertrn:HighwayProductsLitigationMember2015-06-092015-06-090000099780trn:MassachusettsQuiTamMembertrn:HighwayProductsLitigationMember2022-03-310000099780trn:StateCountyandMunicipalActionsMembertrn:HighwayProductsLitigationMember2022-03-310000099780trn:MissouriClassActionMembertrn:HighwayProductsLitigationMember2022-03-310000099780us-gaap:AccruedLiabilitiesMember2022-03-310000099780trn:EnvironmentalAndWorkplaceMattersMember2022-03-310000099780us-gaap:LossFromCatastrophesMember2021-03-262022-03-310000099780us-gaap:DamageFromFireExplosionOrOtherHazardMember2021-03-262022-03-3100000997802021-03-262022-03-310000099780us-gaap:LossFromCatastrophesMember2022-03-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________ .
Commission File Number 1-6903
trn-20220331_g1.jpg
(Exact name of registrant as specified in its charter)
Delaware75-0225040
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
14221 N. Dallas Parkway, Suite 1100
Dallas,Texas75254-2957
(Address of principal executive offices)
(Zip Code)
(214) 631-4420
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange
on which registered
Common StockTRNNew York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ   No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨
Smaller reporting company  Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  No þ
At April 20, 2022, the number of shares of common stock, $0.01 par value, outstanding was 83,342,128.



TRINITY INDUSTRIES, INC.
FORM 10-Q
TABLE OF CONTENTS
 



2

PART I
Item 1. Financial Statements
Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
Three Months Ended
March 31,
 20222021
 (in millions, except per share amounts)
Revenues:
Manufacturing$289.8 $147.4 
Leasing182.9 183.3 
472.7 330.7 
Operating costs:
Cost of revenues:
Manufacturing295.6 149.6 
Leasing102.9 96.7 
398.5 246.3 
Selling, engineering, and administrative expenses:
Manufacturing9.7 8.6 
Leasing12.8 11.3 
Other22.2 24.8 
44.7 44.7 
Gains on dispositions of property:
Lease portfolio sales11.8 1.7 
Other13.5 9.8 
25.3 11.5 
Restructuring activities, net (0.3)
Total operating profit54.8 51.5 
Other (income) expense:
Interest expense, net43.5 51.3 
Other, net (1.6)1.2 
41.9 52.5 
Income (loss) from continuing operations before income taxes12.9 (1.0)
Provision (benefit) for income taxes:
Current1.8 4.7 
Deferred1.2 (0.7)
3.0 4.0 
Income (loss) from continuing operations9.9 (5.0)
Income (loss) from discontinued operations, net of provision (benefit) for income taxes of $(2.0) and $2.3
(6.9)6.3 
Loss on sale of discontinued operations, net of benefit for income taxes of $0.4 and $
(1.1) 
Net income1.9 1.3 
Net income (loss) attributable to noncontrolling interest2.6 (2.0)
Net income (loss) attributable to Trinity Industries, Inc.$(0.7)$3.3 
Basic earnings per common share:
Income (loss) from continuing operations$0.09 $(0.03)
Income (loss) from discontinued operations(0.10)0.06 
Basic net income (loss) attributable to Trinity Industries, Inc.$(0.01)$0.03 
Diluted earnings per common share:
Income (loss) from continuing operations$0.09 $(0.03)
Income (loss) from discontinued operations(0.10)0.06 
Diluted net income (loss) attributable to Trinity Industries, Inc.$(0.01)$0.03 
Weighted average number of shares outstanding:
Basic82.9 110.2 
Diluted85.5 110.2 
See accompanying notes to Consolidated Financial Statements.
3

Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
Three Months Ended
March 31,
 20222021
 (in millions)
Net income$1.9 $1.3 
Other comprehensive income (loss):
Derivative financial instruments:
Unrealized gains arising during the period, net of tax expense of $4.4 and $2.0
14.7 6.2 
Reclassification adjustments for (gains) losses included in net income, net of tax benefit of $0.9 and $0.9
2.5 (0.9)
Defined benefit plans:
Amortization of net actuarial losses, net of tax benefit of $ and $
0.1 0.1 
17.3 5.4 
Comprehensive income19.2 6.7 
Less: comprehensive income (loss) attributable to noncontrolling interest2.8 (1.7)
Comprehensive income attributable to Trinity Industries, Inc.$16.4 $8.4 
See accompanying notes to Consolidated Financial Statements.
4

Trinity Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, 2022December 31, 2021
(unaudited)
 (in millions)
ASSETS
Cash and cash equivalents$143.2 $167.3 
Receivables, net of allowance190.1 227.6 
Income tax receivable4.7 5.4 
Inventories:
Raw materials and supplies342.9 278.4 
Work in process137.8 91.6 
Finished goods27.7 62.9 
508.4 432.9 
Restricted cash, including partially-owned subsidiaries of $59.6 and $58.6
208.2 135.1 
Property, plant, and equipment, at cost, including partially-owned subsidiaries of $1,926.6 and $1,927.7
9,106.8 9,105.6 
Less accumulated depreciation, including partially-owned subsidiaries of $580.1 and $568.4
(2,303.2)(2,258.7)
6,803.6 6,846.9 
Goodwill154.2 154.2 
Other assets278.8 266.5 
Total assets$8,291.2 $8,235.9 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable$237.5 $206.4 
Accrued liabilities271.3 307.4 
Debt:
Recourse448.8 398.7 
Non-recourse:
Wholly-owned subsidiaries3,570.9 3,555.8 
Partially-owned subsidiaries1,207.8 1,216.1 
5,227.5 5,170.6 
Deferred income taxes1,110.6 1,106.8 
Other liabilities148.7 147.9 
Total liabilities6,995.6 6,939.1 
Preferred stock – 1.5 shares authorized and unissued
  
Common stock – 400.0 shares authorized
0.8 0.8 
Capital in excess of par value5.3  
Retained earnings1,026.6 1,046.6 
Accumulated other comprehensive income (loss)0.1 (17.0)
Treasury stock(0.8)(0.6)
1,032.0 1,029.8 
Noncontrolling interest263.6 267.0 
Total stockholders' equity1,295.6 1,296.8 
Total liabilities and stockholders' equity$8,291.2 $8,235.9 
See accompanying notes to Consolidated Financial Statements.
5

Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
 20222021
 (in millions)
Operating activities:
Net income$1.9 $1.3 
(Income) loss from discontinued operations, net of income taxes6.9 (6.3)
Loss on sale of discontinued operations, net of income taxes1.1  
Adjustments to reconcile net income to net cash provided by operating activities – continuing operations:
Depreciation and amortization66.9 64.6 
Stock-based compensation expense5.1 5.1 
Provision (benefit) for deferred income taxes1.2 (0.7)
Net gains on lease portfolio sales(10.5)(1.7)
Gains on dispositions of property and other assets (8.4)(10.5)
Gains on insurance recoveries from property damage(6.4) 
Non-cash interest expense3.3 3.0 
Other0.5 5.4 
Changes in operating assets and liabilities:
(Increase) decrease in receivables37.5 12.1 
(Increase) decrease in income tax receivable0.7 1.2 
(Increase) decrease in inventories(75.5)8.7 
(Increase) decrease in other assets(4.8)6.4 
Increase (decrease) in accounts payable26.6 (3.5)
Increase (decrease) in accrued liabilities(18.3)(11.3)
Increase (decrease) in other liabilities0.7 (4.5)
Net cash provided by operating activities – continuing operations28.5 69.3 
Net cash provided by (used in) operating activities – discontinued operations(8.0)0.4 
Net cash provided by operating activities20.5 69.7 
Investing activities:
Proceeds from dispositions of property and other assets15.6 19.8 
Proceeds from lease portfolio sales71.1 17.3 
Capital expenditures – leasing (84.6)(107.9)
Capital expenditures – manufacturing and other(2.3)(7.4)
Acquisitions, net of cash acquired (16.6)
Other (0.1)
Net cash used in investing activities – continuing operations(0.2)(94.9)
Net cash used in investing activities – discontinued operations (1.1)
Net cash used in investing activities(0.2)(96.0)
Financing activities:
Payments to retire debt(73.0)(185.3)
Proceeds from issuance of debt127.2 327.7 
Shares repurchased (35.7)
Dividends paid to common shareholders(19.1)(23.2)
Purchase of shares to satisfy employee tax on vested stock(0.2)(0.1)
Distributions to noncontrolling interest(6.2) 
Net cash provided by financing activities28.7 83.4 
Net increase in cash, cash equivalents, and restricted cash49.0 57.1 
Cash, cash equivalents, and restricted cash at beginning of period302.4 228.4 
Cash, cash equivalents, and restricted cash at end of period$351.4 $285.5 
See accompanying notes to Consolidated Financial Statements.
6

Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(unaudited)
Common Stock Capital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury StockTrinity
Stockholders’
Equity
Noncontrolling
Interest
Total
Stockholders’
Equity
 Shares
$0.01 Par Value
SharesAmount
 (in millions, except par value and per common share amounts)
Balances at
   December 31, 2021
83.3 $0.8 $ $1,046.6 $(17.0) $(0.6)$1,029.8 $267.0 $1,296.8 
Net income (loss)— — — (0.7)— — — (0.7)2.6 1.9 
Other comprehensive income— — — — 17.1 — — 17.1 0.2 17.3 
Cash dividends declared on common stock (1)
— — — (19.3)— — — (19.3)— (19.3)
Stock-based compensation expense
— — 5.1 — — — — 5.1 — 5.1 
Settlement of share-based awards, net— — 0.2 — — — (0.2) —  
Distributions to noncontrolling interest
— — — — — — — — (6.2)(6.2)
Balances at
   March 31, 2022
83.3 $0.8 $5.3 $1,026.6 $0.1  $(0.8)$1,032.0 $263.6 $1,295.6 
Common StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury StockTrinity
Stockholders’
Equity
Noncontrolling
Interest
Total
Stockholders’
Equity
 Shares
$0.01 Par Value
SharesAmount
 (in millions, except par value and per common share amounts)
Balances at
   December 31, 2020
111.2 $1.1 $ $1,769.4 $(30.9)(0.1)$(0.8)$1,738.8 $277.2 $2,016.0 
Net income (loss)— — — 3.3 — — — 3.3 (2.0)1.3 
Other comprehensive income— — — — 5.1 — — 5.1 0.3 5.4 
Cash dividends declared on common stock (1)
— — — (23.3)— — — (23.3)— (23.3)
Stock-based compensation expense
— — 5.1 — — — — 5.1 — 5.1 
Settlement of share-based awards, net— — 1.0 — — — (0.8)0.2 — 0.2 
Shares repurchased— — — — — (1.3)(36.8)(36.8)— (36.8)
Balances at
   March 31, 2021
111.2 $1.1 $6.1 $1,749.4 $(25.8)(1.4)$(38.4)$1,692.4 $275.5 $1,967.9 
(1) Dividends of $0.23 and $0.21 per common share for the three months ended March 31, 2022 and 2021, respectively.

See accompanying notes to Consolidated Financial Statements.
7

Trinity Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The foregoing Consolidated Financial Statements are unaudited and have been prepared from the books and records of Trinity Industries, Inc. and its consolidated subsidiaries (“Trinity,” “Company,” “we,” “our,” or "us") including the accounts of our wholly-owned subsidiaries and partially-owned subsidiaries, TRIP Rail Holdings LLC (“TRIP Holdings”) and RIV 2013 Rail Holdings LLC ("RIV 2013"), in which we have a controlling interest. In our opinion, all normal and recurring adjustments necessary for a fair presentation of our financial position as of March 31, 2022, and the results of operations and cash flows for the three months ended March 31, 2022 and 2021, have been made in conformity with generally accepted accounting principles. All significant intercompany accounts and transactions have been eliminated. Certain prior year balances have been reclassified to conform to the 2022 presentation.
Due to seasonal and other factors, including the ongoing impacts of the coronavirus pandemic (“COVID-19”), the results of operations for the three months ended March 31, 2022 may not be indicative of expected results of operations for the year ending December 31, 2022. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with our audited Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2021.
Sale of Highway Products Business
In the fourth quarter of 2021, the Company completed the sale of Trinity Highway Products, LLC (“THP”), a wholly-owned subsidiary of the Company, and certain direct and indirect subsidiaries of THP, to Rush Hour Intermediate II, LLC ("Rush Hour"), an entity owned by an affiliated investment fund of Monomoy Capital Partners, for an aggregate purchase price of $375.0 million, subject to certain adjustments.
We concluded that the sale of THP represented a strategic shift that will have a major effect on the Company’s operations and financial results. Accordingly, we have presented the operating results and cash flows of THP as discontinued operations for all periods in this Quarterly Report on Form 10-Q. Results of prior periods have been recast to reflect these changes and present results on a comparable basis. See Note 2 for further information related to the sale of THP.
Revenue Recognition
Revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations. The transaction price does not include any amounts collected on behalf of third parties. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. Payments for our products and services are generally due within normal commercial terms. The following is a description of principal activities from which we generate our revenue, separated by reportable segments. See Note 4 for a further discussion regarding our reportable segments.
Railcar Leasing and Management Services Group
In our Railcar Leasing and Management Services Group ("Leasing Group"), revenue from rentals and operating leases, including contracts that contain non-level fixed lease payments, is recognized monthly on a straight-line basis. Leases not classified as operating leases are generally considered sales-type leases as a result of an option to purchase.
We review our operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the lessee’s payment history, the financial condition of the lessee, and business and economic conditions in the industry in which the lessee operates. In the event that the collectibility of a receivable with respect to any lessee is no longer probable, we derecognize the revenue and related receivable and recognize future revenue only when the lessee makes a rental payment. Contingent rents are recognized when the contingency is resolved.
Selling profit or loss associated with sales-type leases is recognized upon lease commencement, and a net investment in the sales-type lease is recorded on the Consolidated Balance Sheet. Interest income related to sales-type leases is recognized over the lease term using the effective interest method. See "Lease Accounting" below for additional information regarding sales-type leases as of March 31, 2022. We had no sales-type leases as of December 31, 2021.
8

We report all sales of railcars from the lease fleet and selling profit or loss associated with sales-type leases as a net gain or loss from the disposal of a long-term asset in accordance with ASC 610-20, Gains and losses from the derecognition of non-financial assets. These sales are presented in the Lease portfolio sales line in our Consolidated Statements of Operations.
We account for shipping and handling costs as activities to fulfill the promise to transfer the good; as such, these fees are recorded in revenue. The fees and costs of shipping and handling activities are accrued when the related performance obligation has been satisfied.
Rail Products Group
Our railcar manufacturing business recognizes revenue related to new railcars when the customer has submitted its certificate of acceptance and legal title of the railcar has passed to the customer. Certain contracts for the sales of railcars include price adjustments based on steel-price indices; this amount represents variable consideration for which we are unable to estimate the final consideration until the railcar is delivered.
Revenue is recognized over time as repair and maintenance projects and sustainable railcar conversions are completed, using an input approach based on the costs incurred relative to the total estimated costs of performing the project. We recorded contract assets of $12.9 million and $4.5 million as of March 31, 2022 and December 31, 2021, respectively, related to unbilled revenues recognized on repair and maintenance services and sustainable railcar conversions that have been performed, but for which the entire project has not yet been completed, and the railcar has not yet been shipped to the customer. These contract assets are included within the Receivables, net of allowance line in our Consolidated Balance Sheets.
Unsatisfied Performance Obligations
The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of March 31, 2022 and the percentage of the outstanding performance obligations as of March 31, 2022 expected to be delivered during the remainder of 2022:
Unsatisfied performance obligations at March 31, 2022
Total
Amount
Percent expected to be delivered in 2022
 (in millions)
Rail Products Group:
New railcars:
External customers$1,209.3 
Leasing Group686.1 
$1,895.4 59.5 %
Sustainable railcar conversions$128.2 95.6 %
Maintenance services$2.2 100.0 %
Railcar Leasing and Management Services Group$69.8 17.8 %
The remainder of the unsatisfied performance obligations for the Rail Products Group is expected to be delivered through 2025. The orders in the Rail Products Group's backlog from the Leasing Group are fully supported by lease commitments with external customers. The final amount of backlog attributable to the Leasing Group may vary by the time of delivery as customers may choose to change their procurement decision.
Unsatisfied performance obligations for the Railcar Leasing and Management Services Group are related to servicing, maintenance, and management agreements and are expected to be performed through 2029.
Lease Accounting
Lessee
We are the lessee of operating leases predominantly for railcars, as well as office buildings, manufacturing equipment, and office equipment. Our operating leases have remaining lease terms ranging from one year to fifteen years, some of which include options to extend for up to five years, and some of which include options to terminate within one year. As of March 31, 2022, we had no material finance leases in which we were the lessee. As applicable, the lease liability is reduced by the amount of lease incentives that have not yet been reimbursed by the lessor.
9

The following table summarizes the impact of our operating leases on our Consolidated Financial Statements (in millions, except lease term and discount rate):
Three Months Ended
March 31,
20222021
Consolidated Statements of Operations
Operating lease expense$4.2 $3.5 
Short-term lease expense$0.1 $ 
Consolidated Statements of Cash Flows
Cash flows from operating activities$4.2 $3.5 
Right-of-use assets recognized in exchange for new lease liabilities$11.1 $11.0 
March 31, 2022December 31, 2021
Consolidated Balance Sheets
Right-of-use assets (1)
$88.5 $82.8 
Lease liabilities (2)
$112.3 $106.3 
Weighted average remaining lease term10.4 years10.8 years
Weighted average discount rate2.9 %3.0 %
(1) Included in other assets in our Consolidated Balance Sheets.
(2) Included in other liabilities in our Consolidated Balance Sheets.
Future contractual minimum operating lease liabilities will mature as follows (in millions):
Leasing GroupNon-Leasing GroupTotal
Remaining nine months of 2022$9.2 $5.7 $14.9 
202310.5 7.2 17.7 
20247.0 6.3 13.3 
20255.2 5.6 10.8 
20264.9 5.2 10.1 
Thereafter7.6 56.7 64.3 
Total operating lease payments$44.4 $86.7 $131.1 
Less: Present value adjustment(18.8)
Total operating lease liabilities$112.3 
Lessor
Our Leasing Group enters into railcar operating leases with third parties with terms generally ranging between one year and ten years. The majority of our fleet operates on leases that earn fixed monthly lease payments. Generally, lease payments are due at the beginning of the applicable month. A portion of our fleet operates on per diem leases that earn usage-based variable lease payments. Some of our leases include options to extend the leases for up to five years, and a small percentage of our leases include early termination options with certain notice requirements and early termination penalties. As of March 31, 2022, non-Leasing Group operating leases were not significant, and we had no direct finance leases.
We manage risks associated with residual values of leased railcars by investing across a diverse portfolio of railcar types, staggering lease maturities within any given railcar type, avoiding concentration of railcar type and industry, and actively participating in secondary markets. Additionally, our lease agreements contain normal wear and tear return condition provisions and high mileage thresholds designed to protect the value of our residual assets. Our lease agreements do not contain any material residual value guarantees or restrictive covenants.
10

The following table summarizes the impact of our leases on our Consolidated Statements of Operations:
Three Months Ended
March 31,
20222021
(in millions)
Operating lease revenues$163.6 $163.0 
Variable operating lease revenues$13.2 $13.4 
Interest income on sales-type lease receivables$0.1 $ 
Profit recognized at sales-type lease commencement (1)
$1.3 $ 
(1) Included in gains on dispositions of property – lease portfolio sales on our Consolidated Statements of Operations.
Future contractual minimum revenues for operating leases will mature as follows (in millions)(1):
Remaining nine months of 2022$421.4 
2023436.7 
2024330.0 
2025237.3 
2026157.0 
Thereafter283.2 
Total$1,865.6 
(1) Total contractual minimum rental revenues on operating leases relates to our wholly-owned and partially-owned subsidiaries and sub-lease rental revenues associated with the Leasing Group's operating lease obligations.
Future contractual minimum lease receivables for sales-type leases will mature as follows (in millions)(1):
Remaining nine months of 2022$0.8 
20231.1 
20241.1 
20251.1 
20261.1 
Thereafter11.0 
Total16.2 
Less: Unearned interest income(5.5)
Net investment in sales-type leases (1)
$10.7 
(1) Included in other assets in our Consolidated Balance Sheets.
Financial Instruments
We consider all highly liquid debt instruments to be either cash and cash equivalents if purchased with a maturity of three months or less, or short-term marketable securities if purchased with a maturity of more than three months and less than one year.
Financial instruments that potentially subject us to a concentration of credit risk are primarily cash investments, including restricted cash and receivables. We place our cash investments in bank deposits, investment grade, short-term debt instruments, and highly-rated commercial paper. We limit the amount of credit exposure to any one commercial issuer. The carrying values of cash, receivables, and accounts payable are considered to be representative of their respective fair values.
11

Concentrations of credit risk with respect to receivables are limited due to control procedures that monitor the credit worthiness of customers, the large number of customers in our customer base, and their dispersion across different end markets and geographic areas. Receivables are generally evaluated at a portfolio level based on these characteristics. As receivables are generally unsecured, we maintain an allowance for credit losses using a forward-looking approach based on historical losses and consideration of current and expected future economic conditions. Historically, we have observed that the likelihood of loss increases when receivables have aged beyond 180 days. When a receivable is deemed uncollectible, the write-off is recorded as a reduction to allowance for credit losses. During the three months ended March 31, 2022, we recognized approximately $0.5 million of credit loss expense and wrote off $1.0 million related to our trade receivables that are in the scope of ASC 326, Financial Instruments – Credit Losses, bringing the allowance for credit losses balance from $10.5 million at December 31, 2021 to $10.0 million at March 31, 2022. This balance excludes the general reserve for operating lease receivables that is permitted under ASC 450, Contingencies.
Acquisitions
In January 2021, we completed the acquisition of a company that owns and operates proprietary railcar cleaning technology systems. This transaction was recorded as a business combination within the Rail Products Group, based on valuations of the acquired assets and liabilities at their acquisition date fair value using Level 3 inputs. The acquisition did not have a significant impact on our Consolidated Financial Statements. This transaction resulted in goodwill of $7.0 million. There was no acquisition activity for the three months ended March 31, 2022.
Goodwill
As of both March 31, 2022 and December 31, 2021, the carrying amount of our goodwill totaled $154.2 million, which is primarily attributable to the Rail Products Group.
Warranties
We provide various express, limited product warranties that generally range from one year to five years depending on the product. The warranty costs are estimated using a two-step approach. First, an engineering estimate is made for the cost of all claims that have been asserted by customers. Second, based on historical claims experience, a cost is accrued for all products still within a warranty period for which no claims have been filed. We provide for the estimated cost of product warranties at the time revenue is recognized related to products covered by warranties and assess the adequacy of the resulting reserves on a quarterly basis. The changes in the accruals for warranties for the three months ended March 31, 2022 and 2021 are as follows:
 Three Months Ended
March 31,
20222021
 (in millions)
Beginning balance$3.1 $11.3 
Warranty costs incurred(1.2)(0.5)
Warranty originations and revisions1.6 (3.7)
Warranty expirations(0.3)(0.2)
Ending balance$3.2 $6.9 
Note 2. Discontinued Operations
Sale of Highway Products Business
In the fourth quarter of 2021, we completed the sale of our highway products business, THP. The sale closed on December 31, 2021, and we received net proceeds of approximately $364.7 million, after certain adjustments and closing costs. During the three months ended March 31, 2022, we recorded a loss of $1.5 million ($1.1 million, net of income taxes) related to additional transaction costs incurred in the period. We concluded that the sale of THP represented a strategic shift that will have a major effect on the Company’s operations and financial results. Accordingly, we have presented the operating results and cash flows of THP as discontinued operations for all periods in this Quarterly Report on Form 10-Q.
12

In connection with the sale, Trinity and Rush Hour entered into various agreements to effect the transaction and provide a framework for their relationship after the separation, including a purchase and sale agreement, a transition services agreement, and a lease agreement. The transition services have various durations ranging between one and eighteen months. We have determined that the continuing cash flows generated by these agreements do not constitute significant continuing involvement in the operations of THP. The amount billed for transition services provided under the above agreements is not expected to be material to our results of operations. Additionally, in connection with the sale of THP, the Company has agreed to indemnify Rush Hour for certain liabilities related to the highway products business, including certain liabilities resulting from or arising out of the ET-Plus® System, a highway guardrail end-terminal system (the “ET Plus”). Consequently, results from discontinued operations below include certain legal expenses that were directly attributable to the highway products business, which were previously reported in continuing operations. Similar expenses incurred during the three months ended March 31, 2022 and that may be incurred in the future related to these retained obligations will likewise be reported in discontinued operations. See Note 14 for further information regarding obligations retained in connection with the THP sale.
The following is a summary of THP's operating results included in income (loss) from discontinued operations for the three months ended March 31, 2022 and 2021:
Three Months Ended
March 31,
20222021
(in millions)
Revenues$ $68.1 
Cost of revenues 49.5 
Selling, engineering, and administrative expenses8.9 10.0 
Income (loss) from discontinued operations before income taxes(8.9)8.6 
Provision (benefit) for income taxes(2.0)1.9 
Income (loss) from discontinued operations, net of income taxes$(6.9)$6.7 
Other discontinued operations
In addition to the THP operating results above, a loss of $0.4 million included in income (loss) from discontinued operations, net of income taxes for the three months ended March 31, 2021 related to the spin-off of Arcosa, Inc.
Note 3. Derivative Instruments and Fair Value Accounting
Derivative Instruments
We use derivative instruments to mitigate the impact of changes in interest rates, both in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding. We also use derivative instruments to mitigate the impact of changes in foreign currency exchange rates. Derivative instruments that are designated and qualify as cash flow hedges are accounted for by recording the effective portion of the gain or loss on the derivative instrument in accumulated other comprehensive income or loss ("AOCI") as a separate component of stockholders' equity. These accumulated gains or losses are reclassified into earnings in the periods during which the hedged transactions affect earnings. We continuously monitor our derivative positions and the credit ratings of our counterparties and do not anticipate losses due to non-performance. See Note 8 for a description of our debt instruments.
13

Interest Rate Hedges
   
Included in accompanying balance sheet
at March 31, 2022
AOCI – loss/(income)
 Notional Amount
Interest Rate (1)
Asset/(Liability) Controlling InterestNoncontrolling Interest
 ($ in millions)
Expired hedges:
2018 secured railcar equipment notes$249.3 4.41 %$ $0.6 $ 
TRIP Holdings warehouse loan$788.5 3.60 %$ $0.4 $0.5 
2017 promissory notes – interest rate cap$169.3 3.00 %$ $(0.3)$ 
Open hedge:
2017 promissory notes – interest rate swap$454.7 2.66 %$(0.7)$0.2 $ 
(1) Weighted average fixed interest rate, except for the interest rate cap on the 2017 promissory notes.
 Effect on interest expense – increase/(decrease)
 Three Months Ended
March 31,
Expected effect during next twelve months
 20222021
 (in millions)
Expired hedges:
2018 secured railcar equipment notes
$ $0.1 $0.2 
TRIP Holdings warehouse loan$0.4 $0.5 $0.9 
2017 promissory notes – interest rate cap$ $ $(0.1)
Open hedge (1):
2017 promissory notes – interest rate swap$2.8 $3.1 $11.2 
(1) Based on the fair value of open hedges as of March 31, 2022.
Foreign Currency Hedge
Our exposure related to foreign currency transactions is currently hedged for up to a maximum of twelve months. Information related to our foreign currency hedge is as follows:
 
Included in 
accompanying balance sheet at March 31, 2022
Effect on cost of revenues – increase/(decrease)
Notional
Amount
Asset/ (Liability)AOCI –
loss/(income)
Three Months Ended
March 31,
Expected effect during next twelve months (1)
20222021
(in millions)
$35.0 $1.4 $(1.5)$0.2 $(3.7)$(1.5)
(1) Based on the fair value of open hedges as of March 31, 2022.
Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to establish a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are listed below.
14

Level 1 – This level is defined as quoted prices in active markets for identical assets or liabilities. Our cash equivalents and restricted cash are instruments of the U.S. Treasury or highly-rated money market mutual funds. The assets measured as Level 1 in the fair value hierarchy are summarized below:
Level 1
 March 31, 2022December 31, 2021
(in millions)
Assets:
Cash equivalents$80.5 $11.4 
Restricted cash208.2 135.1 
Total assets$288.7 $146.5 
Level 2 – This level is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Interest rate hedges are valued at exit prices obtained from each counterparty. Foreign currency hedges are valued at exit prices obtained from each counterparty, which are based on currency spot and forward rates and forward points. The assets and liabilities measured as Level 2 in the fair value hierarchy are summarized below:
Level 2
 March 31, 2022December 31, 2021
(in millions)
Assets:
Foreign currency hedge (1)
$1.4 $ 
Total assets$1.4 $ 
Liabilities:
Interest rate hedge (2)
$0.7 $21.0 
Foreign currency hedge (2)
 0.1 
Total liabilities$0.7 $21.1 
(1) Included in other assets in our Consolidated Balance Sheets.
(2) Included in accrued liabilities in our Consolidated Balance Sheets.

Level 3 – This level is defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of March 31, 2022 and December 31, 2021, we have no assets measured as Level 3 in the fair value hierarchy.
See Note 8 for the estimated fair values of our debt instruments. The fair values of all other financial instruments are estimated to approximate carrying value.
Note 4. Segment Information
We report our operating results in two reportable segments: (1) the Railcar Leasing and Management Services Group, which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services; and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components, and provides railcar maintenance and modification services. Following the sale of THP, which was previously reported within All Other, we have combined the results of the prior Corporate and All Other groupings into a single Corporate and other grouping. The remaining activity previously reported in All Other primarily includes legal, environmental, and maintenance costs associated with non-operating facilities. Results of prior periods have been recast to reflect these changes and present results on a comparable basis.
Gains and losses from the sale of property, plant, and equipment are included in the operating profit of each respective segment. Our Chief Operating Decision Maker ("CODM") regularly reviews the operating results of our reportable segments in order to assess performance and allocate resources. Our CODM does not consider restructuring activities when evaluating segment operating results; therefore, restructuring activities are not allocated to segment profit or loss.
15

Sales and related net profits ("deferred profit") from the Rail Products Group to the Leasing Group are recorded in the Rail Products Group and eliminated in consolidation and are reflected in "Eliminations – Lease Subsidiary" in the tables below. Sales between these groups are recorded at prices comparable to those charged to external customers, taking into consideration quantity, features, and production demand. Amortization of deferred profit on railcars sold to the Leasing Group is included in the operating profit of the Leasing Group, resulting in the recognition of depreciation expense based on our original manufacturing cost of the railcars. Lease portfolio sales are included in the Leasing Group, with related gains and losses computed based on the net book value of the original manufacturing cost of the railcars.
The financial information for these segments is shown in the tables below (in millions). We operate principally in North America.
Three Months Ended March 31, 2022
Railcar Leasing and Management Services GroupRail Products GroupEliminations – Lease SubsidiaryEliminations – OtherConsolidated Total
External revenue$182.9 $289.8 $ $ $472.7 
Intersegment revenue