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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Trinity Industries Inc | NYSE:TRN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.03 | 0.11% | 27.14 | 27.62 | 27.09 | 27.30 | 442,477 | 01:00:00 |
(Mark One) | |||||
☑ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
OR | |||||
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware | 75-0225040 | |||||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
14221 N. Dallas Parkway, Suite 1100 | ||||||||
Dallas, | Texas | 75254-2957 | ||||||
(Address of principal executive offices)
|
(Zip Code) |
Title of each class | Trading Symbol(s) |
Name of each exchange
on which registered
|
||||||
Common Stock | TRN | New York Stock Exchange |
Caption | Page | ||||
Reportable Segments | ||||||||
Railcar Leasing and Management Services Group | Rail Products Group | All Other | ||||||
|
|
|
Commercial End Markets & Commodities | |||||||||||||||||
Agriculture | Construction & Metals | Consumer Products | Energy | Refined Products & Chemicals | |||||||||||||
Covered Hopper Cars | Grain Products, Dry Fertilizer, Flour, Starch | Cement, Construction Materials, Lumber | Industrial Sand | Plastics | |||||||||||||
Open Hopper & Gondola Cars | Scrap Metal, Aggregates, Finished Steel | Coal | |||||||||||||||
Other Freight Cars | Food Products | Lumber, Steel and Metals, Cement | Autos, Paper, Intermodal | Other Chemicals | |||||||||||||
Non-Pressure Tank Cars | Food Products, Grain Products |
Aggregates
(Clay Slurry) |
Crude Oil, Biofuels | Chemicals, Petroleum Products | |||||||||||||
Pressure Tank Cars | Fertilizer | Liquified Gases, Chemicals, Petroleum Products |
Railcar Leasing and Management Services Group | 155 | ||||
Rail Products Group | 5,295 | ||||
All Other | 635 | ||||
Corporate and Enterprise Support | 290 | ||||
6,375 |
Name | Age | Office |
Officer
Since |
|||||||||||||||||
E. Jean Savage | 56 | Chief Executive Officer and President | 2020 | |||||||||||||||||
Eric R. Marchetto | 51 | Executive Vice President and Chief Financial Officer | 2001 | |||||||||||||||||
Melendy E. Lovett | 62 | Executive Vice President and Chief Administrative Officer | 2014 | |||||||||||||||||
Brian D. Madison | 60 | Executive Vice President, Services Operations | 2016 | |||||||||||||||||
Steven L. McDowell | 59 | Vice President and Chief Accounting Officer | 2013 | |||||||||||||||||
Gregory B. Mitchell | 55 | Executive Vice President and Chief Commercial Officer | 2007 | |||||||||||||||||
Kevin Poet | 54 | Executive Vice President, Support Services | 2020 | |||||||||||||||||
Sarah R. Teachout | 48 | Executive Vice President and Chief Legal Officer | 2016 | |||||||||||||||||
Neil J. West | 46 | Executive Vice President, Production Operations | 2005 |
Approximate Square Feet (1)
|
Approximate Square Feet Located In (1)
|
||||||||||||||||||||||
Owned | Leased | U.S. | Mexico | ||||||||||||||||||||
Rail Products Group (2)
|
5,553,100 | 133,400 | 3,297,100 | 2,389,400 | |||||||||||||||||||
All Other (2)
|
822,500 | 96,400 | 918,900 | — | |||||||||||||||||||
Corporate Offices | — | 162,800 | 155,200 | 7,600 | |||||||||||||||||||
6,375,600 | 392,600 | 4,371,200 | 2,397,000 |
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||
Trinity Industries, Inc. | 100 | 118 | 162 | 122 | 136 | 168 | |||||||||||||||||||||||||||||
Dow Jones US Commercial Vehicles & Trucks Index | 100 | 144 | 211 | 177 | 223 | 288 | |||||||||||||||||||||||||||||
New York Stock Exchange Composite Index | 100 | 112 | 133 | 122 | 153 | 164 | |||||||||||||||||||||||||||||
S&P MidCap 400 | 100 | 121 | 140 | 125 | 157 | 179 |
Period |
Number of Shares Purchased (1)
|
Average Price Paid per Share (1)
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
(in millions)
|
|||||||||||||||||||
October 1, 2020 through October 31, 2020 | 521,807 | $ | 19.41 | 519,902 | $ | 239.9 | |||||||||||||||||
November 1, 2020 through November 30, 2020 | 1,175,020 | $ | 21.74 | 1,169,576 | $ | 214.5 | |||||||||||||||||
December 1, 2020 through December 31, 2020 | 1,287,609 | $ | 25.14 | 1,285,444 | $ | 182.2 | |||||||||||||||||
Total | 2,984,436 | 2,974,922 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
(in millions) | |||||||||||||||||
Revenues | $ | 1,999.4 | $ | 3,005.1 | |||||||||||||
Cost of revenues | 1,508.4 | 2,365.7 | |||||||||||||||
Selling, engineering, and administrative expenses | 228.4 | 262.8 | |||||||||||||||
Gains (losses) on dispositions of property | 20.3 | 54.4 | |||||||||||||||
Impairment of long-lived assets | 396.4 | — | |||||||||||||||
Restructuring activities, net | 11.0 | 14.7 | |||||||||||||||
Total operating profit (loss) | (124.5) | 416.3 | |||||||||||||||
Interest expense, net | 216.0 | 214.5 | |||||||||||||||
Pension plan settlement | 151.5 | — | |||||||||||||||
Other, net | 2.5 | 1.1 | |||||||||||||||
Income (loss) from continuing operations before income taxes | (494.5) | 200.7 | |||||||||||||||
Provision (benefit) for income taxes | (268.4) | 61.5 | |||||||||||||||
Income (loss) from continuing operations | $ | (226.1) | $ | 139.2 |
Year Ended December 31, 2020 | |||||||||||||||||||||||
Revenues | Percent | ||||||||||||||||||||||
External | Intersegment | Total | Change | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Railcar Leasing and Management Services Group
|
$ | 801.5 | $ | 0.8 | $ | 802.3 | (28.2) | % | |||||||||||||||
Rail Products Group | 948.2 | 661.3 | 1,609.5 | (45.9) | % | ||||||||||||||||||
All Other | 249.7 | 1.5 | 251.2 | (3.8) | % | ||||||||||||||||||
Segment Totals before Eliminations | 1,999.4 | 663.6 | 2,663.0 | (38.8) | % | ||||||||||||||||||
Eliminations – Lease Subsidiary | — | (652.9) | (652.9) | ||||||||||||||||||||
Eliminations – Other | — | (10.7) | (10.7) | ||||||||||||||||||||
Consolidated Total | $ | 1,999.4 | $ | — | $ | 1,999.4 | (33.5) | % | |||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
External | Intersegment | Total | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Railcar Leasing and Management Services Group | $ | 1,116.3 | $ | 0.9 | $ | 1,117.2 | |||||||||||||||||
Rail Products Group | 1,635.3 | 1,339.5 | 2,974.8 | ||||||||||||||||||||
All Other | 253.5 | 7.5 | 261.0 | ||||||||||||||||||||
Segment Totals before Eliminations | 3,005.1 | 1,347.9 | 4,353.0 | ||||||||||||||||||||
Eliminations – Lease Subsidiary | — | (1,331.1) | (1,331.1) | ||||||||||||||||||||
Eliminations – Other | — | (16.8) | (16.8) | ||||||||||||||||||||
Consolidated Total | $ | 3,005.1 | $ | — | $ | 3,005.1 | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
(in millions) | |||||||||||||||||
Railcar Leasing and Management Services Group | $ | 448.6 | $ | 710.6 | |||||||||||||
Rail Products Group | 1,573.2 | 2,697.2 | |||||||||||||||
All Other | 223.0 | 241.1 | |||||||||||||||
Segment Totals before Eliminations, Corporate Expenses, Impairment of long-lived assets and Restructuring activities
|
2,244.8 | 3,648.9 | |||||||||||||||
Corporate | 97.7 | 108.0 | |||||||||||||||
Impairment of long-lived assets | 396.4 | — | |||||||||||||||
Restructuring activities, net | 11.0 | 14.7 | |||||||||||||||
Eliminations – Lease Subsidiary | (617.7) | (1,166.4) | |||||||||||||||
Eliminations – Other | (8.3) | (16.4) | |||||||||||||||
Consolidated Total | $ | 2,123.9 | $ | 2,588.8 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
(in millions) | |||||||||||||||||
Railcar Leasing and Management Services Group | $ | 353.7 | $ | 406.6 | |||||||||||||
Rail Products Group | 36.3 | 277.6 | |||||||||||||||
All Other | 28.2 | 19.9 | |||||||||||||||
Segment Totals before Eliminations, Corporate Expenses, Impairment of long-lived assets, and Restructuring activities
|
418.2 | 704.1 | |||||||||||||||
Corporate | (97.7) | (108.0) | |||||||||||||||
Impairment of long-lived assets | (396.4) | — | |||||||||||||||
Restructuring activities, net | (11.0) | (14.7) | |||||||||||||||
Eliminations – Lease Subsidiary | (35.2) | (164.7) | |||||||||||||||
Eliminations – Other | (2.4) | (0.4) | |||||||||||||||
Consolidated Total | $ | (124.5) | $ | 416.3 |
Year Ended December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Leasing and management | $ | 747.9 | $ | 756.5 | (1.1) | % | |||||||||||||||||||||||
Sales of railcars owned one year or less at the time of sale (1)(2)
|
54.4 | 360.7 | (84.9) | % | |||||||||||||||||||||||||
Total revenues | $ | 802.3 | $ | 1,117.2 | (28.2) | % | |||||||||||||||||||||||
Operating profit (3):
|
|||||||||||||||||||||||||||||
Leasing and management | $ | 336.0 | $ | 314.7 | 6.8 | % | |||||||||||||||||||||||
Railcars owned one year or less at the time of sale | 0.4 | 41.4 | (99.0) | % | |||||||||||||||||||||||||
Railcars owned more than one year at the time of sale | 17.3 | 50.5 | (65.7) | % | |||||||||||||||||||||||||
Total operating profit | $ | 353.7 | $ | 406.6 | (13.0) | % | |||||||||||||||||||||||
Total operating profit margin | 44.1 | % | 36.4 | % | |||||||||||||||||||||||||
Leasing and management operating profit margin: | 44.9 | % | 41.6 | % | |||||||||||||||||||||||||
Selected expense information: | |||||||||||||||||||||||||||||
Depreciation (4)(5)
|
$ | 214.7 | $ | 232.2 | (7.5) | % | |||||||||||||||||||||||
Maintenance and compliance | $ | 88.1 | $ | 102.1 | (13.7) | % | |||||||||||||||||||||||
Rent | $ | 9.7 | $ | 16.9 | (42.6) | % | |||||||||||||||||||||||
Selling, engineering, and administrative expenses
|
$ | 51.3 | $ | 49.5 | 3.6 | % | |||||||||||||||||||||||
Interest | $ | 196.2 | $ | 197.2 | (0.5) | % |
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in millions) | |||||||||||
Sales of leased railcars:
|
|||||||||||
Railcars owned one year or less at the time of sale (1)(2)
|
$ | 54.4 | $ | 360.7 | |||||||
Railcars owned more than one year at the time of sale
|
138.7 | 205.7 | |||||||||
$ | 193.1 | $ | 566.4 | ||||||||
Operating profit on sales of leased railcars: | |||||||||||
Railcars owned one year or less at the time of sale | $ | 0.4 | $ | 41.4 | |||||||
Railcars owned more than one year at the time of sale | 17.3 | 50.5 | |||||||||
$ | 17.7 | $ | 91.9 | ||||||||
Operating profit margin on sales of leased railcars: | |||||||||||
Railcars owned one year or less at the time of sale | 0.7 | % | 11.5 | % | |||||||
Railcars owned more than one year at the time of sale | 12.5 | % | 24.6 | % | |||||||
Weighted average operating profit margin on sales of leased railcars
|
9.2 | % | 16.2 | % |
December 31, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
Number of railcars: | |||||||||||||||||
Wholly-owned (1)
|
82,480 | 79,115 | |||||||||||||||
Partially-owned | 24,565 | 24,590 | |||||||||||||||
107,045 | 103,705 | ||||||||||||||||
Investor-owned | 26,645 | 24,835 | |||||||||||||||
133,690 | 128,540 | ||||||||||||||||
Company-owned railcars (2):
|
|||||||||||||||||
Average age in years | 10.2 | 9.6 | |||||||||||||||
Average remaining lease term in years | 3.2 | 3.3 | |||||||||||||||
Fleet utilization | 94.5 | % | 96.0 | % |
Year Ended December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Rail Products | $ | 1,315.0 | $ | 2,506.7 | (47.5) | % | |||||||||||||||||||||||
Maintenance services | 230.5 | 371.0 | (37.9) | % | |||||||||||||||||||||||||
Other | 64.0 | 97.1 | (34.1) | % | |||||||||||||||||||||||||
Total revenues | $ | 1,609.5 | $ | 2,974.8 | (45.9) | % | |||||||||||||||||||||||
Operating costs: | |||||||||||||||||||||||||||||
Cost of revenues | $ | 1,534.5 | $ | 2,636.9 | (41.8) | % | |||||||||||||||||||||||
Selling, engineering, and administrative expenses
|
38.6 | 60.1 | (35.8) | % | |||||||||||||||||||||||||
Losses on dispositions of property
|
0.1 | 0.2 | * | ||||||||||||||||||||||||||
Operating profit | $ | 36.3 | $ | 277.6 | (86.9) | % | |||||||||||||||||||||||
Operating profit margin | 2.3 | % | 9.3 | % |
December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
External Customers | $ | 669.0 | $ | 1,213.4 | |||||||||||||||||||||||||
Leasing Group | 345.5 | 619.1 | |||||||||||||||||||||||||||
Total (1)
|
$ | 1,014.5 | $ | 1,832.5 | (44.6) | % |
Year Ended December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
Beginning balance | 15,085 | 30,875 | |||||||||||||||||||||||||||
Orders received | 5,980 | 10,220 | (41.5) | % | |||||||||||||||||||||||||
Deliveries | (11,530) | (21,960) | (47.5) | % | |||||||||||||||||||||||||
Other adjustments (1)
|
(550) | (4,050) | |||||||||||||||||||||||||||
Ending balance | 8,985 | 15,085 | (40.4) | % | |||||||||||||||||||||||||
Average selling price in ending backlog | $ | 112,910 | $ | 121,478 | (7.1) | % |
Year Ended December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Highway Products | $ | 251.2 | $ | 259.8 | (3.3) | % | |||||||||||||||||||||||
Other | — | 1.2 | (100.0) | % | |||||||||||||||||||||||||
Total revenues | $ | 251.2 | $ | 261.0 | (3.8) | % | |||||||||||||||||||||||
Operating costs: | |||||||||||||||||||||||||||||
Cost of revenues | $ | 182.8 | $ | 195.6 | (6.5) | % | |||||||||||||||||||||||
Selling, engineering, and administrative expenses
|
40.8 | 45.2 | (9.7) | % | |||||||||||||||||||||||||
Losses (gains) on dispositions of property
|
(0.6) | 0.3 | * | ||||||||||||||||||||||||||
Operating profit | $ | 28.2 | $ | 19.9 | 41.7 | % |
Year Ended December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Operating costs | $ | 97.7 | $ | 108.0 | (9.5) | % |
Shares Repurchased | Remaining Authorization to Repurchase | ||||||||||||||||
Period | Number of shares |
Cost
(in millions) |
Cost
(in millions) |
||||||||||||||
March 7, 2019 Authorization | $ | 350.0 | |||||||||||||||
March 7, 2019 through March 31, 2019 | 866,715 | $ | 19.0 | $ | 331.0 | ||||||||||||
April 1, 2019 through June 30, 2019 | 2,133,116 | 44.0 | $ | 287.0 | |||||||||||||
July 1, 2019 through September 30, 2019 | 5,171,489 | 100.9 | $ | 186.1 | |||||||||||||
October 1, 2019 through December 31, 2019 | 2,933,474 | 60.8 | $ | 125.3 | |||||||||||||
January 1, 2020 through March 31, 2020 | 1,850,000 | 35.4 | $ | 89.9 | |||||||||||||
April 1, 2020 through June 30, 2020 | — | — | $ | 89.9 | |||||||||||||
July 1, 2020 through September 30, 2020 | 4,466,896 | 89.9 | $ | — | |||||||||||||
Total | 17,421,690 | $ | 350.0 |
Shares Repurchased | Remaining Authorization to Repurchase | ||||||||||||||||
Period | Number of shares |
Cost
(in millions) |
Cost
(in millions) |
||||||||||||||
October 23, 2020 Authorization | $ | 250.0 | |||||||||||||||
October 23, 2020 through December 31, 2020 | 2,974,922 | $ | 67.8 | $ | 182.2 | ||||||||||||
Total | 2,974,922 | $ | 67.8 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
(in millions) | |||||||||||||||||
Net cash flows from continuing operations: | |||||||||||||||||
Operating activities | $ | 651.8 | $ | 396.7 | |||||||||||||
Investing activities | (532.9) | (993.3) | |||||||||||||||
Financing activities | (168.0) | 526.5 | |||||||||||||||
Net cash flows from discontinued operations (1)
|
(0.1) | (3.1) | |||||||||||||||
Net decrease in cash, cash equivalents, and restricted cash | $ | (49.2) | $ | (73.2) |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
(in millions) | |||||||||||||||||
(Increase) decrease in receivables, inventories, and other assets | $ | 310.4 | $ | (8.0) | |||||||||||||
(Increase) decrease in income tax receivable | (431.1) | 25.7 | |||||||||||||||
Increase (decrease) in accounts payable, accrued liabilities, and other liabilities | (69.6) | (96.7) | |||||||||||||||
Changes in operating assets and liabilities | $ | (190.3) | $ | (79.0) |
Ratio | Covenant |
Actual at
December 31, 2020
|
||||||||||||
Maximum leverage (1)
|
No greater than 4.50 to 1.00 | 2.40 | ||||||||||||
Minimum interest coverage (2)
|
No less than 2.25 to 1.00 | 3.92 | ||||||||||||
Summarized Statement of Operations: | |||||
Year Ended December 31, 2020 | |||||
Revenues (1)
|
$ | 1,243.9 | |||
Cost of revenues (2)
|
$ | 1,059.5 | |||
Income (loss) from continuing operations (3)
|
$ | 76.0 | |||
Net income (loss) (3)
|
$ | 75.8 | |||
Summarized Balance Sheets: | |||||
December 31, 2020 | |||||
Assets: | |||||
Receivables, net of allowance (4)
|
$ | 223.0 | |||
Inventories | $ | 289.1 | |||
Property, plant, and equipment, net | $ | 1,424.8 | |||
Goodwill and other assets | $ | 453.7 | |||
Liabilities: | |||||
Accounts payable and accrued liabilities (5)
|
$ | 286.9 | |||
Debt | $ | 448.2 | |||
Deferred income taxes | $ | 862.8 | |||
Other liabilities | $ | 148.7 | |||
Noncontrolling interest | $ | 277.2 |
Payments Due by Period | |||||||||||||||||||||||||||||
Contractual Obligations and Commercial Commitments | Total |
1 Year
or Less |
2-3
Years |
4-5
Years |
After
5 Years |
||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||||
Parent and wholly-owned subsidiaries (1)
|
$ | 3,825.2 | $ | 174.1 | $ | 857.0 | $ | 1,284.5 | $ | 1,509.6 | |||||||||||||||||||
Partially-owned subsidiaries (1)
|
1,237.5 | 60.3 | 121.0 | 322.1 | 734.1 | ||||||||||||||||||||||||
Interest (2)
|
656.6 | 170.3 | 250.2 | 168.2 | 67.9 | ||||||||||||||||||||||||
Total – Debt and Interest | 5,719.3 | 404.7 | 1,228.2 | 1,774.8 | 2,311.6 | ||||||||||||||||||||||||
Operating leases: | |||||||||||||||||||||||||||||
Leasing Group
|
26.8 | 8.6 | 13.8 | 3.8 | 0.6 | ||||||||||||||||||||||||
Other | 93.4 | 3.6 | 14.9 | 12.1 | 62.8 | ||||||||||||||||||||||||
Obligations for purchase of goods and services (3)
|
401.2 | 358.3 | 33.1 | 9.8 | — | ||||||||||||||||||||||||
Other | 1.0 | 1.0 | — | — | — | ||||||||||||||||||||||||
Total | $ | 6,241.7 | $ | 776.2 | $ | 1,290.0 | $ | 1,800.5 | $ | 2,375.0 |
Long-lived Assets | |||||
Description of Estimate |
We routinely assess whether impairment indicators are present by monitoring for the existence of events or changes in circumstances that may indicate that the carrying amount of our long-lived assets, including our leased railcar fleet, might not be recoverable. Factors monitored include actual and forecasted industry-wide asset utilization, pricing indicators, asset attrition rates, and other similar metrics specific to the performance of our leased railcar fleet and other long-lived assets. Whenever an indicator of potential impairment is present, we assess recoverability by comparing the carrying value of the long-lived assets to the undiscounted future net cash flows we expect the assets to generate. If the recoverability test indicates that an impairment exists, we would recognize an impairment charge equal to the amount by which the carrying value exceeds the fair value.
During the second quarter, the frac sand industry continued to experience economic pressure created by low oil prices, reduced fracking activity, and the ongoing economic impact of COVID-19. Significant price declines in the crude oil market resulted in a decline in customer demand for certain types of railcars. In particular, small cube covered hopper railcars are primarily used in North America to serve the frac sand industry. We believe that the collective impact of these developments, including the shift towards the use of in-basin sand, constituted a fundamental and other-than-temporary change in the future demand for this railcar type. Consequently, the cash flows and profitability of the frac sand industry continued to decline during the second quarter. During the year ended December 31, 2020, we recorded an impairment of long-lived assets of $396.4 million, of which $369.4 million was related to our second quarter impairment of our small cube covered hopper railcars. See Note 11 of the Consolidated Financial Statements for more information.
As of December 31, 2020, our net property, plant, and equipment totaled $7.0 billion, and the net book value of our amortizing intangible assets totaled $16.0 million.
|
||||
Judgment and/or Uncertainty |
The estimates and judgments that most significantly affect the fair value calculations in our recoverability test include assumptions regarding revenue and operating profit; the remaining useful life over which an asset is expected to generate cash flows; and expectations regarding lease rates, lease renewals, and lease fleet utilization. The measurement of an impairment loss involves a number of management judgments, including the selection of an appropriate discount rate, consideration of market quotes for comparable assets as available, and estimates regarding final disposition proceeds.
With respect to the impairment of our small cube covered hopper railcars, significant management judgment was used to determine the key assumptions utilized in our impairment analysis, the substantial majority of which represent unobservable (Level 3) inputs. These assumptions include, but are not limited to: estimates regarding the remaining useful life over which the railcars are expected to generate cash flows; average lease rates; railcar utilization percentages; operating expenses; and the selection of an appropriate discount rate. Management selected these estimates and assumptions based on our railcar industry expertise. We also consulted with third-party energy and frac sand industry experts to gain insights with respect to the long-term outlook for these underlying markets.
|
||||
Potential Impact if Results Differ |
If actual results are not consistent with management's estimates and assumptions used to calculate estimated future cash flows, we could be exposed to additional impairment losses that may be material. We believe that the assumptions used in our impairment analyses are reasonable; however, given the uncertainties of the economy and its potential impact on our businesses, it is possible that impairments of remaining long-lived assets may be required in future periods as a result of changes in our operating results or our assumptions.
With respect to the second quarter impairment charge related to our small cube covered hopper railcars, a 0.5% increase in the discount rate would have resulted in an increase to the impairment charge of $12.4 million, and a 0.5% decrease in the discount rate would have resulted in a decrease to the impairment charge of $13.7 million. Additionally, a 5% increase or decrease in the average lease rate would have resulted in a change in the impairment charge of $11.2 million. |
Income Taxes | |||||
Description of Estimate |
We account for income taxes under the asset and liability method prescribed by ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and other tax attributes using currently enacted tax rates. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. Our net deferred tax liabilities totaled $1,042.5 million as of December 31, 2020, which includes valuation allowances of $25.2 million.
For further information regarding income taxes, see Note 9 of the Consolidated Financial Statements.
|
||||
Judgment and/or Uncertainty |
Management is required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets and assess deferred tax liabilities based on enacted law and tax rates for the appropriate tax jurisdictions to determine the amount of such deferred tax assets and liabilities. We assess whether a valuation allowance should be established against deferred tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. This assessment considers, among other matters: the nature, frequency, and severity of recent losses; a forecast of future profitability; the duration of statutory carryback and carryforward periods; our experience with tax attributes expiring unused; and tax planning alternatives.
|
||||
Potential Impact if Results Differ |
Changes in the calculated deferred tax assets and liabilities may occur in certain circumstances, including statutory income tax rate changes, statutory tax law changes, or changes in our structure or tax status.
If such changes take place, there is a risk that our effective tax rate could increase or decrease in any period, impacting our net earnings.
|
Goodwill | |||||
Description of Estimate |
Goodwill is required to be tested for impairment at least annually, or on an interim basis if events or circumstances change indicating that the carrying amount of the goodwill might be impaired. The quantitative goodwill impairment test is a two-step process with step one requiring the comparison of the reporting unit's estimated fair value with the carrying amount of its net assets. If necessary, step two of the impairment test determines the amount of goodwill impairment to be recorded when the reporting unit's recorded net assets exceed its fair value. Impairment is assessed at the “reporting unit” level by applying a fair value-based test for each unit with recorded goodwill. Goodwill totaled $208.8 million as of December 31, 2020.
|
||||
Judgment and/or Uncertainty | The estimates and judgments that most significantly affect the fair value calculations are assumptions related to revenue and operating profit results, discount rates, terminal growth rates, and exit multiples. We consider these to be Level 3 inputs in the fair value hierarchy, as they involve unobservable inputs for which there is little or no market data and thus require management to develop its own assumptions. | ||||
Potential Impact if Results Differ |
We believe that the assumptions used in our impairment analysis are reasonable; however, given the uncertainties of the economy and its potential impact on our businesses, there can be no assurance that our estimates and assumptions regarding the fair value of our reporting units will prove to be accurate predictions of the future. Additionally, variations in any of these assumptions may result in different calculations in fair value that could result in an impairment charge.
Based on our annual goodwill impairment test performed at the reporting unit level as of December 31, 2020, we concluded that there was no impairment of goodwill and that none of the reporting units evaluated was at risk of failing the first step of the goodwill impairment test. A reporting unit is considered to be at risk if its estimated fair value does not exceed the carrying value of its net assets by 10% or more.
An increase or decrease in the discount rate or a reduction to the terminal growth rate of 100 basis points would not have resulted in an impairment of goodwill for any of our reporting units.
|
Variable Interest Entities | |||||
Description of Estimate |
We continuously evaluate our investments and other contractual arrangements with third party entities to determine if our variable interests are considered a variable interest entity ("VIE"). Consolidation is required for VIEs in which we are the primary beneficiary.
We have determined that we are the primary beneficiary for TRIP Holdings and RIV 2013. At December 31, 2020, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $145.9 million.
For further information regarding our partially-owned leasing subsidiaries, see Note 5 of the Consolidated Financial Statements.
|
||||
Judgment and/or Uncertainty |
The determination of whether an entity is considered a VIE and, if so, if we are the primary beneficiary of the VIE, is highly subjective and is dependent on the specific facts and circumstances of each investment. Factors considered in these assessments include, but are not limited to, the entity's structure and equity ownership, the contractual terms, the key decision making powers, and the obligation to absorb losses or the right to receive benefits of the VIE.
|
||||
Potential Impact if Results Differ |
Changes in the design or nature of the activities of a VIE, or our involvement with a VIE, could result in a change in conclusion of our status as a primary beneficiary. Such change could result in the consolidation or deconsolidation of the subsidiary, thus impacting financial results.
|
Insurance | |||||
Description of Estimate |
We are effectively self-insured for workers' compensation and employee health care claims. Third-party administrators process all such claims. As of December 31, 2020, our liabilities associated with workers' compensation and group medical insurance were $55.5 million and $6.4 million, respectively.
|
||||
Judgment and/or Uncertainty |
We accrue our workers' compensation and group medical liabilities based upon independent actuarial studies. These liabilities are calculated based upon loss development factors, which contemplate a number of variables, including claims history and expected trends. These loss development factors are determined in consultation with third-party actuaries.
|
||||
Potential Impact if Results Differ |
To the extent actuarial assumptions change and claims experience rates differ from historical rates, our liability may change.
A 10% change in our insurance liabilities could impact net earnings by approximately $4.8 million.
|
Contingencies and Litigation | |||||
Description of Estimate |
We are involved in claims and lawsuits incidental to our business arising from various matters, including product warranty, personal injury, environmental issues, workplace laws, and various governmental regulations. We evaluate our exposure to such matters periodically and establish accruals for these contingencies when a range of loss can be reasonably estimated. As of December 31, 2020, the range of reasonably possible losses for such matters is $7.0 million to $14.5 million, which includes our rights in indemnity and recourse to third parties of approximately $5.3 million.
For further information regarding our contingencies and litigation matters, see Note 15 of the Consolidated Financial Statements.
|
||||
Judgment and/or Uncertainty |
Assessments of contingencies are based on information obtained from internal and external legal counsel, including recent legal decisions and loss experience in similar situations. Based on information currently available with respect to such claims and lawsuits, including information as to which we are aware but for which we have not been served with legal process, it is management's opinion that the ultimate outcome of all such claims and litigation, including settlements, in aggregate will not have a material adverse effect on our results of operations or financial condition.
|
||||
Potential Impact if Results Differ |
Due to the uncertain nature of these matters, there can be no assurance that we will not become involved in future litigation or other proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to us. Additionally, changes in claims and lawsuits filed, settled or dismissed and differences between actual and estimated settlement costs or our rights in indemnity and recourse to third parties could impact operating results.
|
December 31, 2020 | December 31, 2019 | December 31, 2018 | |||||||||||||||
($ in millions) | |||||||||||||||||
Numerator: | |||||||||||||||||
Income (loss) from continuing operations | $ | (226.1) | $ | 139.2 | $ | 109.0 | |||||||||||
Provision (benefit) for income taxes | (268.4) | 61.5 | 42.6 | ||||||||||||||
Income (loss) from continuing operations before income taxes | (494.5) | 200.7 | 151.6 | ||||||||||||||
Net (income) loss attributable to noncontrolling interest | 78.9 | 1.5 | (3.8) | ||||||||||||||
Adjustments: | |||||||||||||||||
Restructuring activities, net | 11.0 | 14.7 | — | ||||||||||||||
Impairment of long-lived assets – controlling interest (1)
|
315.1 | — | — | ||||||||||||||
Early redemption of debt | 5.0 | — | — | ||||||||||||||
Pension plan settlement | 151.5 | — | — | ||||||||||||||
Adjusted Profit Before Tax | $ | 67.0 | $ | 216.9 | $ | 147.8 | |||||||||||
Denominator: | |||||||||||||||||
Total stockholders' equity | $ | 2,016.0 | $ | 2,378.9 | $ | 2,562.0 | |||||||||||
Noncontrolling interest | (277.2) | (348.8) | (351.2) | ||||||||||||||
Accumulated other comprehensive loss | 30.9 | 153.1 | 116.8 | ||||||||||||||
Adjusted Stockholders' Equity
|
$ | 1,769.7 | $ | 2,183.2 | $ | 2,327.6 | |||||||||||
Average total stockholders' equity (2)
|
$ | 2,197.5 | $ | 2,470.5 | $ | 2,562.0 | |||||||||||
Return on Equity (3)
|
(10.3) | % | 5.6 | % | 4.3 | % | |||||||||||
Average Adjusted Stockholders' Equity (2)
|
$ | 1,976.5 | $ | 2,255.4 | $ | 2,327.6 | |||||||||||
Pre-Tax Return on Equity (4)
|
3.4 | % | 9.6 | % | 6.3 | % |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Net cash provided by operating activities – continuing operations | $ | 651.8 | $ | 396.7 | $ | 274.2 | |||||||||||
Add: | |||||||||||||||||
Proceeds from railcar lease fleet sales owned more than one year at the time of sale | 138.7 | 205.7 | 230.5 | ||||||||||||||
Adjusted Net Cash Provided by Operating Activities | 790.5 | 602.4 | 504.7 | ||||||||||||||
Less: | |||||||||||||||||
Capital expenditures – manufacturing and other | (102.3) | (97.0) | (37.3) | ||||||||||||||
Dividends paid to common stockholders | (91.7) | (82.1) | (77.4) | ||||||||||||||
Free Cash Flow (before Capital expenditures – leasing)
|
596.5 | 423.3 | 390.0 | ||||||||||||||
Less: Equity CapEx for new leased railcars | (483.7) | (278.5) | (629.5) | ||||||||||||||
Total Free Cash Flow After Investments and Dividends | $ | 112.8 | $ | 144.8 | $ | (239.5) | |||||||||||
Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less | $ | 602.2 | $ | 1,122.2 | $ | 948.3 | |||||||||||
Less: | |||||||||||||||||
Payments to retire debt | (1,442.9) | (1,724.1) | (887.8) | ||||||||||||||
Proceeds from the issuance of debt | 1,561.4 | 2,567.8 | 1,206.6 | ||||||||||||||
Net proceeds (repayments) of debt | 118.5 | 843.7 | 318.8 | ||||||||||||||
Equity CapEx for new leased railcars | $ | 483.7 | $ | 278.5 | $ | 629.5 |
Page | |||||
Description of the Matter |
As discussed in Note 1 and Note 11, the Company evaluates long-lived assets, which includes property, plant, and equipment and lease right-of-use assets, for potential impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. During the second quarter of 2020, the Company identified the decline in global oil prices and pressure on the oil and gas industry to maintain a low-cost structure as an indicator that an impairment assessment for its small cubed covered hopper railcars was required. As a result of this assessment, the Company recorded impairment charges of $369.4 million, including $358.3 million related to small cubed covered hopper railcars held in its railcar lease fleet and $11.1 million related to right-of-use assets associated with the leased-in portfolio of small cubed covered hopper railcars.
Auditing the Company's impairment measurement involved a high degree of subjectivity as estimates underlying the determination of fair value were based on assumptions about future market and economic conditions. Significant assumptions used in the Company’s fair value estimate included estimated future lease rental rates and the applicable discount rate. |
||||
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's processes to determine the fair value of the asset group and measure the long-lived asset impairment. This included testing management's review controls over the data used in their impairment analysis and the significant assumptions underlying the fair value
determination. Our testing of the Company's impairment measurement included, among other procedures, evaluating the significant assumptions used to estimate fair value. For example, we compared the significant assumptions used to estimate market participant cash flows to historical results, evaluated industry reports containing analysis of the small cubed covered hopper demand, performed a sensitivity analysis of the significant assumptions used in the valuation to evaluate the change in the fair value estimate that would result from changes in assumptions and recalculated management's estimate. In addition, we involved our valuation specialists to assist in our evaluation of the market lease rates and discount rate used in the fair value estimate. We also tested the completeness and accuracy of the underlying data. |
/s/ ERNST & YOUNG LLP |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||
Revenues: | |||||||||||||||||
Manufacturing | $ | 1,197.7 | $ | 1,888.8 | $ | 1,667.1 | |||||||||||
Leasing | 801.7 | 1,116.3 | 842.0 | ||||||||||||||
1,999.4 | 3,005.1 | 2,509.1 | |||||||||||||||
Operating costs: | |||||||||||||||||
Cost of revenues: | |||||||||||||||||
Manufacturing | 1,091.0 | 1,649.5 | 1,459.8 | ||||||||||||||
Leasing | 417.4 | 716.2 | 479.0 | ||||||||||||||
1,508.4 | 2,365.7 | 1,938.8 | |||||||||||||||
Selling, engineering, and administrative expenses: | |||||||||||||||||
Manufacturing | 79.4 | 105.3 | 96.4 | ||||||||||||||
Leasing | 51.3 | 49.5 | 51.1 | ||||||||||||||
Other | 97.7 | 108.0 | 149.1 | ||||||||||||||
228.4 | 262.8 | 296.6 | |||||||||||||||
Gains (losses) on dispositions of property: | |||||||||||||||||
Net gains on railcar lease fleet sales owned more than one year at the time of sale | 17.3 | 50.5 | 50.4 | ||||||||||||||
Other | 3.0 | 3.9 | (9.0) | ||||||||||||||
20.3 | 54.4 | 41.4 | |||||||||||||||
Impairment of long-lived assets | 396.4 | — | — | ||||||||||||||
Restructuring activities, net | 11.0 | 14.7 | — | ||||||||||||||
Total operating profit (loss) | (124.5) | 416.3 | 315.1 | ||||||||||||||
Other (income) expense: | |||||||||||||||||
Interest income | (3.2) | (7.3) | (11.9) | ||||||||||||||
Interest expense | 219.2 | 221.8 | 179.3 | ||||||||||||||
Pension plan settlement | 151.5 | — | — | ||||||||||||||
Other, net | 2.5 | 1.1 | (3.9) | ||||||||||||||
370.0 | 215.6 | 163.5 | |||||||||||||||
Income (loss) from continuing operations before income taxes | (494.5) | 200.7 | 151.6 | ||||||||||||||
Provision (benefit) for income taxes: | |||||||||||||||||
Current | (494.5) | 6.7 | (15.3) | ||||||||||||||
Deferred | 226.1 | 54.8 | 57.9 | ||||||||||||||
(268.4) | 61.5 | 42.6 | |||||||||||||||
Income (loss) from continuing operations | (226.1) | 139.2 | 109.0 | ||||||||||||||
Income (loss) from discontinued operations, net of provision (benefit) for income taxes of $(0.1), $(1.0), $30.7
|
(0.1) | (3.1) | 54.1 | ||||||||||||||
Net income (loss) | (226.2) | 136.1 | 163.1 | ||||||||||||||
Net income (loss) attributable to noncontrolling interest
|
(78.9) | (1.5) | 3.8 | ||||||||||||||
Net income (loss) attributable to Trinity Industries, Inc. | $ | (147.3) | $ | 137.6 | $ | 159.3 | |||||||||||
Basic earnings per common share:
|
|||||||||||||||||
Income (loss) from continuing operations | $ | (1.27) | $ | 1.11 | $ | 0.72 | |||||||||||
Income (loss) from discontinued operations | — | (0.02) | 0.37 | ||||||||||||||
Basic net income (loss) attributable to Trinity Industries, Inc. | $ | (1.27) | $ | 1.09 | $ | 1.09 | |||||||||||
Diluted earnings per common share: | |||||||||||||||||
Income (loss) from continuing operations | $ | (1.27) | $ | 1.09 | $ | 0.70 | |||||||||||
Income (loss) from discontinued operations | — | (0.02) | 0.37 | ||||||||||||||
Diluted net income (loss) attributable to Trinity Industries, Inc. | $ | (1.27) | $ | 1.07 | $ | 1.07 | |||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||
Basic | 115.9 | 125.6 | 144.0 | ||||||||||||||
Diluted | 115.9 | 127.3 | 146.4 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Net income (loss) | $ | (226.2) | $ | 136.1 | $ | 163.1 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Derivative financial instruments: | |||||||||||||||||
Unrealized losses arising during the period, net of tax benefit of $5.9, $3.8, and $3.0
|
(19.4) | (12.8) | (9.6) | ||||||||||||||
Reclassification adjustments for losses included in net income, net of tax benefit of $3.5, $0.8, and $0.4
|
12.9 | 4.5 | 2.3 | ||||||||||||||
Defined benefit plans:
|
|||||||||||||||||
Settlement of pension plan, net of tax benefit of $34.9, $—, and $—
|
116.6 | — | — | ||||||||||||||
Unrealized gains (losses) arising during the period, net of tax benefit of $2.7, $9.0, and $2.9
|
7.7 | (30.2) | (9.5) | ||||||||||||||
Amortization of prior service cost, net of tax benefit of $0.3, $—, and $—
|
0.9 | — | — | ||||||||||||||
Amortization of net actuarial losses, net of tax benefit of $1.3, $1.1, and $1.1
|
4.7 | 3.5 | 3.6 | ||||||||||||||
123.4 | (35.0) | (13.2) | |||||||||||||||
Comprehensive income (loss) | (102.8) | 101.1 | 149.9 | ||||||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interest
|
(77.7) | (0.2) | 5.2 | ||||||||||||||
Comprehensive income (loss) attributable to Trinity Industries, Inc. | $ | (25.1) | $ | 101.3 | $ | 144.7 |
December 31, 2020 | December 31, 2019 | ||||||||||
(in millions) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 132.0 | $ | 166.2 | |||||||
Receivables, net of allowance of $14.4 and $12.6
|
199.0 | 260.1 | |||||||||
Income tax receivable | 445.8 | 14.7 | |||||||||
Inventories: | |||||||||||
Raw materials and supplies | 176.4 | 263.4 | |||||||||
Work in process | 52.2 | 108.8 | |||||||||
Finished goods | 92.6 | 61.2 | |||||||||
321.2 | 433.4 | ||||||||||
Restricted cash, including partially-owned subsidiaries of $31.1 and $33.0
|
96.4 | 111.4 | |||||||||
Property, plant, and equipment, at cost, including partially-owned subsidiaries of $1,931.6 and $2,065.3
|
9,193.0 | 9,272.5 | |||||||||
Less accumulated depreciation, including partially-owned subsidiaries of $525.7 and $527.7
|
(2,189.6) | (2,161.9) | |||||||||
7,003.4 | 7,110.6 | ||||||||||
Goodwill | 208.8 | 208.8 | |||||||||
Other assets | 295.2 | 396.2 | |||||||||
Total assets | $ | 8,701.8 | $ | 8,701.4 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Accounts payable | $ | 156.4 | $ | 203.9 | |||||||
Accrued liabilities | 314.7 | 342.1 | |||||||||
Debt: | |||||||||||
Recourse | 448.2 | 522.8 | |||||||||
Non-recourse: | |||||||||||
Wholly-owned subsidiaries | 3,340.5 | 3,080.7 | |||||||||
Partially-owned subsidiaries | 1,228.3 | 1,278.4 | |||||||||
5,017.0 | 4,881.9 | ||||||||||
Deferred income taxes | 1,047.5 | 798.3 | |||||||||
Other liabilities | 150.2 | 96.3 | |||||||||
Total liabilities | 6,685.8 | 6,322.5 | |||||||||
Preferred stock – 1.5 shares authorized and unissued
|
— | — | |||||||||
Common stock – shares authorized at December 31, 2020 and 2019 – 400.0; shares issued and outstanding at December 31, 2020 – 111.2; at December 31, 2019 – 119.7
|
1.1 | 1.2 | |||||||||
Capital in excess of par value | — | — | |||||||||
Retained earnings | 1,769.4 | 2,182.9 | |||||||||
Accumulated other comprehensive loss | (30.9) | (153.1) | |||||||||
Treasury stock – shares at December 31, 2020 and 2019 – 0.1
|
(0.8) | (0.9) | |||||||||
1,738.8 | 2,030.1 | ||||||||||
Noncontrolling interest | 277.2 | 348.8 | |||||||||
Total stockholders' equity | 2,016.0 | 2,378.9 | |||||||||
Total liabilities and stockholders' equity | $ | 8,701.8 | $ | 8,701.4 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Operating activities: | |||||||||||||||||
Net income (loss) | $ | (226.2) | $ | 136.1 | $ | 163.1 | |||||||||||
(Income) loss from discontinued operations, net of income taxes | 0.1 | 3.1 | (54.1) | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 266.0 | 283.6 | 251.9 | ||||||||||||||
Stock-based compensation expense | 26.9 | 29.2 | 29.2 | ||||||||||||||
Provision for deferred income taxes | 226.1 | 54.8 | 57.9 | ||||||||||||||
Net gains on railcar lease fleet sales owned more than one year at the time of sale | (17.3) | (50.5) | (50.4) | ||||||||||||||
(Gains) losses on dispositions of property and other assets | (5.5) | (3.9) | 9.0 | ||||||||||||||
Pension plan settlement | 151.5 | — | — | ||||||||||||||
Impairment of long-lived assets | 396.4 | — | — | ||||||||||||||
Non-cash impact of restructuring activities | 5.3 | 10.9 | — | ||||||||||||||
Non-cash interest expense | 13.7 | 16.7 | 18.1 | ||||||||||||||
Loss on early extinguishment of debt | 5.0 | — | — | ||||||||||||||
Other | 0.1 | (4.3) | (8.0) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
(Increase) decrease in receivables | 59.0 | 15.2 | (72.1) | ||||||||||||||
(Increase) decrease in income tax receivable | (431.1) | 25.7 | (16.4) | ||||||||||||||
(Increase) decrease in inventories | 105.3 | 91.3 | (122.0) | ||||||||||||||
(Increase) decrease in other assets | 146.1 | (114.5) | (77.3) | ||||||||||||||
Increase (decrease) in accounts payable | (47.5) | (10.0) | 92.7 | ||||||||||||||
Increase (decrease) in accrued liabilities | (31.1) | (82.6) | 51.5 | ||||||||||||||
Increase (decrease) in other liabilities | 9.0 | (4.1) | 1.1 | ||||||||||||||
Net cash provided by operating activities – continuing operations | 651.8 | 396.7 | 274.2 | ||||||||||||||
Net cash provided by (used in) operating activities – discontinued operations | (0.1) | (3.1) | 104.9 | ||||||||||||||
Net cash provided by operating activities | 651.7 | 393.6 | 379.1 | ||||||||||||||
Investing activities: | |||||||||||||||||
Decrease in short-term marketable securities | — | — | 319.5 | ||||||||||||||
Proceeds from dispositions of property and other assets | 32.9 | 20.2 | 17.1 | ||||||||||||||
Proceeds from railcar lease fleet sales owned more than one year at the time of sale | 138.7 | 205.7 | 230.5 | ||||||||||||||
Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less with a net cost of $54.0, $319.3, and $92.4
|
(602.2) | (1,122.2) | (948.3) | ||||||||||||||
Capital expenditures – manufacturing and other | (102.3) | (97.0) | (37.3) | ||||||||||||||
Other | — | — | 6.2 | ||||||||||||||
Net cash used in investing activities – continuing operations | (532.9) | (993.3) | (412.3) | ||||||||||||||
Net cash used in investing activities – discontinued operations | — | — | (78.2) | ||||||||||||||
Net cash used in investing activities | (532.9) | (993.3) | (490.5) | ||||||||||||||
Financing activities: | |||||||||||||||||
Payments to retire debt | (1,442.9) | (1,724.1) | (887.8) | ||||||||||||||
Proceeds from issuance of debt | 1,561.4 | 2,567.8 | 1,206.6 | ||||||||||||||
Shares repurchased | (191.3) | (224.7) | (506.1) | ||||||||||||||
Dividends paid to common stockholders | (91.7) | (82.1) | (77.4) | ||||||||||||||
Purchase of shares to satisfy employee tax on vested stock | (9.5) | (8.2) | (12.2) | ||||||||||||||
Contributions from (distributions to) noncontrolling interest | 6.1 | (2.2) | (10.9) | ||||||||||||||
Other | (0.1) | — | (3.3) | ||||||||||||||
Net cash provided by (used in) financing activities – continuing operations | (168.0) | 526.5 | (291.1) | ||||||||||||||
Cash distributions to Arcosa, Inc. | — | — | (220.5) | ||||||||||||||
Net cash provided by (used in) financing activities | (168.0) | 526.5 | (511.6) | ||||||||||||||
Net decrease in cash, cash equivalents, and restricted cash | (49.2) | (73.2) | (623.0) | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 277.6 | 350.8 | 973.8 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 228.4 | $ | 277.6 | $ | 350.8 | |||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||
Interest paid | $ | 205.5 | $ | 208.1 | $ | 158.9 | |||||||||||
Income tax payments (refunds) | $ | (62.5) | $ | (16.7) | $ | 4.1 | |||||||||||
Distribution of noncash net assets to Arcosa, Inc. | $ | — | $ | — | $ | 1,534.9 | |||||||||||
Debt assumed in railcar purchase from unrelated seller | $ | — | $ | — | $ | 283.9 |
Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Trinity Stockholders’ Equity | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
$0.01 Par Value
|
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except par value and per common share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2017 | 150.9 | $ | 1.6 | $ | 482.5 | $ | 4,123.4 | $ | (104.8) | (0.1) | $ | (1.6) | $ | 4,501.1 | $ | 356.9 | $ | 4,858.0 | |||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 159.3 | — | — | — | 159.3 | 3.8 | 163.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | (14.6) | — | — | (14.6) | 1.4 | (13.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock (1)
|
— | — | — | (75.9) | — | — | — | (75.9) | — | (75.9) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 29.3 | — | — | — | — | 29.3 | — | 29.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | — | — | 75.9 | (145.9) | — | (17.2) | (430.1) | (500.1) | — | (500.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of share-based awards, net | 0.2 | — | 15.1 | — | — | (0.6) | (19.4) | (4.3) | — | (4.3) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | 0.3 | — | — | — | — | 0.3 | — | 0.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | (17.8) | (0.2) | (449.3) | — | — | 17.8 | 449.5 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | — | — | (10.9) | (10.9) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adopting new accounting standards | — | — | — | 18.7 | (18.7) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of convertible subordinated notes | — | — | (152.9) | — | — | — | — | (152.9) | — | (152.9) | |||||||||||||||||||||||||||||||||||||||||||||||||
Distribution of Arcosa, Inc. | — | — | — | (1,753.5) | 21.3 | — | — | (1,732.2) | — | (1,732.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | (0.1) | 0.3 | — | — | — | 0.6 | 0.8 | — | 0.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2018 | 133.3 | $ | 1.3 | $ | 1.2 | $ | 2,326.1 | $ | (116.8) | (0.1) | $ | (1.0) | $ | 2,210.8 | $ | 351.2 | $ | 2,562.0 | |||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | 137.6 | — | — | — | 137.6 | (1.5) | 136.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | (36.3) | — | — | (36.3) | 1.3 | (35.0) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock (1)
|
— | — | — | (88.2) | — | — | — | (88.2) | — | (88.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 29.2 | — | — | — | — | 29.2 | — | 29.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | — | — | 70.0 | — | — | (13.7) | (294.7) | (224.7) | — | (224.7) | |||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of share-based awards, net | 0.7 | — | 2.8 | — | — | (0.6) | (11.3) | (8.5) | — | (8.5) | |||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | (14.3) | (0.1) | (103.2) | (202.8) | — | 14.3 | 306.1 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | — | — | (2.2) | (2.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adopting new accounting standards | — | — | — | 13.7 | — | — | — | 13.7 | — | 13.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | (3.5) | — | — | — | (3.5) | — | (3.5) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 | 119.7 | $ | 1.2 | $ | — | $ | 2,182.9 | $ | (153.1) | (0.1) | $ | (0.9) | $ | 2,030.1 | $ | 348.8 | $ | 2,378.9 | |||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | (147.3) | — | — | — | (147.3) | (78.9) | (226.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 122.2 | — | — | 122.2 | 1.2 | 123.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock (1)
|
— | — | — | (90.7) | — | — | — | (90.7) | — | (90.7) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 26.9 | — | — | — | — | 26.9 | — | 26.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | — | — | — | — | — | (9.3) | (193.1) | (193.1) | — | (193.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of share-based awards, net | 1.5 | — | 3.6 | — | — | (0.7) | (13.9) | (10.3) | — | (10.3) | |||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | (10.0) | (0.1) | (30.5) | (176.5) | — | 10.0 | 207.1 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from noncontrolling interest | — | — | — | — | — | — | — | — | 6.1 | 6.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adopting new accounting standards | — | — | — | 0.5 | — | — | — | 0.5 | — | 0.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | 0.5 | — | — | — | 0.5 | — | 0.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
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 |
Unsatisfied performance obligations at December 31, 2020
|
|||||||||||
Total
Amount |
Percent expected to be delivered in 2021
|
||||||||||
(in millions) | |||||||||||
Rail Products Group: | |||||||||||
Products: | |||||||||||
External Customers | $ | 669.0 | |||||||||
Leasing Group | 345.5 | ||||||||||
$ | 1,014.5 | 61.0 | % | ||||||||
Maintenance Services | $ | 8.2 | 100.0 | % | |||||||
Railcar Leasing and Management Services Group | $ | 87.3 | 21.1 | % |
Year Ended
December 31, |
|||||||||||
2020 | 2019 | ||||||||||
Consolidated Statement of Operations | |||||||||||
Operating lease expense | $ | 15.8 | $ | 18.0 | |||||||
Short-term lease expense | $ | 2.1 | $ | 4.1 | |||||||
December 31, 2020 | December 31, 2019 | ||||||||||
Consolidated Balance Sheet | |||||||||||
Right-of-use assets (1)
|
$ | 77.1 | $ | 44.2 | |||||||
Lease liabilities (2)
|
$ | 96.9 | $ | 44.8 | |||||||
Weighted average remaining lease term | 11.3 years | 4.8 years | |||||||||
Weighted average discount rate | 3.3 | % | 4.1 | % | |||||||
Year Ended
December 31, |
|||||||||||
2020 | 2019 | ||||||||||
Consolidated Statement of Cash Flows | |||||||||||
Cash flows from operating activities | $ | 15.8 | $ | 18.0 | |||||||
Right-of-use assets recognized in exchange for new lease liabilities (3)
|
$ | 56.3 | $ | 10.3 |
Leasing Group | Non-Leasing Group | Total | |||||||||||||||
2021 | $ | 8.6 | $ | 3.6 | $ | 12.2 | |||||||||||
2022 | 7.8 | 7.4 | 15.2 | ||||||||||||||
2023 | 6.0 | 7.5 | 13.5 | ||||||||||||||
2024 | 2.9 | 6.3 | 9.2 | ||||||||||||||
2025 | 0.9 | 5.8 | 6.7 | ||||||||||||||
Thereafter | 0.6 | 62.8 | 63.4 | ||||||||||||||
Total operating lease payments | $ | 26.8 | $ | 93.4 | $ | 120.2 | |||||||||||
Less: Present value adjustment | (20.3) | ||||||||||||||||
Less: Lease incentives | (3.0) | ||||||||||||||||
Total operating lease liabilities | $ | 96.9 |
Year Ended
December 31, |
|||||||||||
2020 | 2019 | ||||||||||
Operating lease revenues | $ | 671.4 | $ | 676.3 | |||||||
Variable operating lease revenues | $ | 51.0 | $ | 50.5 | |||||||
Sales-type lease revenues | $ | — | $ | 160.5 | |||||||
Interest income on sales-type lease receivables | $ | — | $ | 2.4 | |||||||
Profit recognized at sales-type lease commencement | $ | — | $ | 19.0 |
2021 | $ | 555.4 | |||
2022 | 436.2 | ||||
2023 | 323.9 | ||||
2024 | 238.6 | ||||
2025 | 161.1 | ||||
Thereafter | 290.6 | ||||
Total | $ | 2,005.8 |
Buildings and improvements |
3 – 30 years
|
||||
Leasehold improvements | Generally over the term of the lease | ||||
Machinery and equipment |
2 – 10 years
|
||||
Information systems hardware and software |
2 – 5 years
|
||||
Railcars in our lease fleet |
Generally 35 – 40 years
|
December 31, 2020 | December 31, 2019 | ||||||||||
(in millions) | |||||||||||
Railcar Leasing and Management Services Group | $ | 1.8 | $ | 1.8 | |||||||
Rail Products Group | 145.4 | 145.4 | |||||||||
All Other | 61.6 | 61.6 | |||||||||
$ | 208.8 | $ | 208.8 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Beginning balance | $ | 8.1 | $ | 7.4 | $ | 10.1 | |||||||||||
Warranty costs incurred | (2.1) | (3.8) | (2.8) | ||||||||||||||
Warranty originations and revisions | 5.9 | 4.5 | 0.1 | ||||||||||||||
Warranty expirations | (0.2) | — | — | ||||||||||||||
Ending balance | $ | 11.7 | $ | 8.1 | $ | 7.4 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Revenues | $ | — | $ | — | $ | 1,042.0 | |||||||||||
Cost of revenues | — | — | 840.8 | ||||||||||||||
Selling, engineering, and administrative expenses | 0.2 | 4.1 | 116.8 | ||||||||||||||
Other (income) expense | — | — | (0.4) | ||||||||||||||
Income (loss) from discontinued operations before income taxes | (0.2) | (4.1) | 84.8 | ||||||||||||||
Provision (benefit) for income taxes | (0.1) | (1.0) | 30.7 | ||||||||||||||
Income (loss) from discontinued operations, net of income taxes | $ | (0.1) | $ | (3.1) | $ | 54.1 |
Included in accompanying balance sheet
at December 31, 2020
|
|||||||||||||||||||||||||||||
Notional
Amount |
Interest
Rate (1)
|
Asset/(Liability) |
AOCL –
loss/ (income) Controlling Interest |
AOCL –
loss/ (income) Noncontrolling Interest |
|||||||||||||||||||||||||
(in millions, except %) | |||||||||||||||||||||||||||||
Expired hedges: | |||||||||||||||||||||||||||||
2018 secured railcar equipment notes | $ | 249.3 | 4.41 | % | $ | — | $ | 0.8 | $ | — | |||||||||||||||||||
TRIP Holdings warehouse loan | $ | 788.5 | 3.60 | % | $ | — | $ | 1.3 | $ | 1.8 | |||||||||||||||||||
TRIP Master Funding secured railcar equipment notes
|
$ | 34.8 | 2.62 | % | $ | — | $ | 0.1 | $ | 0.1 | |||||||||||||||||||
2017 promissory notes – interest rate cap
|
$ | 169.3 | 3.00 | % | $ | — | $ | (0.5) | $ | — | |||||||||||||||||||
Open hedge: | |||||||||||||||||||||||||||||
2017 promissory notes – interest rate swap | $ | 488.0 | 2.66 | % | $ | (45.2) | $ | 44.7 | $ | — |
Effect on interest expense – increase/(decrease) | |||||||||||||||||||||||
Year Ended December 31, |
Expected effect during next twelve months(1)
|
||||||||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Expired hedges:
|
|||||||||||||||||||||||
2006 secured railcar equipment notes (2)
|
$ | (0.1) | $ | (0.2) | $ | (0.2) | $ | — | |||||||||||||||
2018 secured railcar equipment notes
|
$ | 0.2 | $ | 0.2 | $ | 0.1 | $ | 0.2 | |||||||||||||||
TRIP Holdings warehouse loan | $ | 2.0 | $ | 2.0 | $ | 2.2 | $ | 1.8 | |||||||||||||||
TRIP Master Funding secured railcar equipment notes
|
$ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.1 | |||||||||||||||
2017 promissory notes – interest rate cap
|
$ | (0.1) | $ | (0.1) | $ | 0.1 | $ | (0.1) | |||||||||||||||
Open hedge:
|
|||||||||||||||||||||||
2017 promissory notes – interest rate swap
|
$ | 11.0 | $ | 3.1 | $ | 0.3 | $ | 11.0 |
Included in
accompanying balance sheet at December 31, 2020
|
Effect on cost of revenues – increase/(decrease) | ||||||||||||||||||||||||||||||||||
Notional
Amount |
Asset/(Liability) |
AOCL –
loss/(income) |
Year Ended December 31, |
Expected effect during next twelve months(1)
|
|||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Foreign currency hedge
|
$ | 30.0 | $ | 4.8 | $ | (7.3) | $ | 3.2 | $ | 0.1 | $ | (7.3) |
Level 1 | |||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||
(in millions) | |||||||||||
Assets: | |||||||||||
Cash equivalents | $ | 24.2 | $ | 57.9 | |||||||
Restricted cash | 96.4 | 111.4 | |||||||||
Total assets | $ | 120.6 | $ | 169.3 |
Level 2 | |||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||
(in millions) | |||||||||||
Assets: | |||||||||||
Foreign currency hedge (1)
|
$ | 4.8 | $ | 1.2 | |||||||
Total assets | $ | 4.8 | $ | 1.2 | |||||||
Liabilities: | |||||||||||
Interest rate hedge (2)
|
$ | 45.2 | $ | 28.0 | |||||||
Total liabilities | $ | 45.2 | $ | 28.0 |
Year Ended December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Railcar Leasing and Management Services Group | Rail Products Group | All Other | Corporate |
Eliminations – Lease Subsidiary
|
Eliminations – Other
|
Consolidated Total | |||||||||||||||||||||||||||||||||||
External Revenue | $ | 801.5 | $ | 948.2 | $ | 249.7 | $ | — | $ | — | $ | — | $ | 1,999.4 | |||||||||||||||||||||||||||
Intersegment Revenue | 0.8 | 661.3 | 1.5 | — | (652.9) | (10.7) | — | ||||||||||||||||||||||||||||||||||
Total Revenues | $ | 802.3 | $ | 1,609.5 | $ | 251.2 | $ | — | $ | (652.9) | $ | (10.7) | $ | 1,999.4 | |||||||||||||||||||||||||||
Depreciation & Amortization
|
$ | 214.7 | $ | 35.1 | $ | 8.0 | $ | 8.2 | $ | — | $ | — | $ | 266.0 | |||||||||||||||||||||||||||
Capital Expenditures | $ | 602.2 | $ | 78.5 | $ | 6.3 | $ | 17.5 | $ | — | $ | — | $ | 704.5 |
Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Railcar Leasing and Management Services Group | Rail Products Group | All Other | Corporate |
Eliminations – Lease Subsidiary
|
Eliminations – Other
|
Consolidated Total | |||||||||||||||||||||||||||||||||||
External Revenue | $ | 1,116.3 | $ | 1,635.3 | $ | 253.5 | $ | — | $ | — | $ | — | $ | 3,005.1 | |||||||||||||||||||||||||||
Intersegment Revenue | 0.9 | 1,339.5 | 7.5 | — | (1,331.1) | (16.8) | — | ||||||||||||||||||||||||||||||||||
Total Revenues | $ | 1,117.2 | $ | 2,974.8 | $ | 261.0 | $ | — | $ | (1,331.1) | $ | (16.8) | $ | 3,005.1 | |||||||||||||||||||||||||||
Depreciation & Amortization
|
$ | 232.2 | $ | 34.1 | $ | 8.3 | $ | 9.0 | $ | — | $ | — | $ | 283.6 | |||||||||||||||||||||||||||
Capital Expenditures | $ | 1,122.2 | $ | 85.6 | $ | 9.1 | $ | 2.3 | $ | — | $ | — | $ | 1,219.2 |
Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Railcar Leasing and Management Services Group | Rail Products Group | All Other | Corporate |
Eliminations – Lease Subsidiary
|
Eliminations – Other
|
Consolidated Total | |||||||||||||||||||||||||||||||||||
External Revenue | $ | 842.0 | $ | 1,409.2 | $ | 257.9 | $ | — | $ | — | $ | — | $ | 2,509.1 | |||||||||||||||||||||||||||
Intersegment Revenue | 0.8 | 1,003.7 | 12.7 | — | (990.3) | (26.9) | — | ||||||||||||||||||||||||||||||||||
Total Revenues | $ | 842.8 | $ | 2,412.9 | $ | 270.6 | $ | — | $ | (990.3) | $ | (26.9) | $ | 2,509.1 | |||||||||||||||||||||||||||
Depreciation & Amortization
|
$ | 196.6 | $ | 35.6 | $ | 9.8 | $ | 9.9 | $ | — | $ | — | $ | 251.9 | |||||||||||||||||||||||||||
Capital Expenditures | $ | 948.3 | $ | 18.7 | $ | 14.6 | $ | 4.0 | $ | — | $ | — | $ | 985.6 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Operating profit (loss): | |||||||||||||||||
Railcar Leasing and Management Services Group | $ | 353.7 | $ | 406.6 | $ | 351.1 | |||||||||||
Rail Products Group | 36.3 | 277.6 | 167.6 | ||||||||||||||
All Other | 28.2 | 19.9 | 40.2 | ||||||||||||||
Segment Totals before Eliminations, Corporate Expenses, Impairment of long-lived assets, and Restructuring activities
|
418.2 | 704.1 | 558.9 | ||||||||||||||
Corporate | (97.7) | (108.0) | (149.1) | ||||||||||||||
Impairment of long-lived assets | (396.4) | — | — | ||||||||||||||
Restructuring activities, net | (11.0) | (14.7) | — | ||||||||||||||
Eliminations – Lease Subsidiary | (35.2) | (164.7) | (95.1) | ||||||||||||||
Eliminations – Other | (2.4) | (0.4) | 0.4 | ||||||||||||||
Consolidated operating profit (loss) | $ | (124.5) | $ | 416.3 | $ | 315.1 | |||||||||||
Other (income) expense | 370.0 | 215.6 | 163.5 | ||||||||||||||
Provision (benefit) for income taxes | (268.4) | 61.5 | 42.6 | ||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (0.1) | (3.1) | 54.1 | ||||||||||||||
Net income (loss) | $ | (226.2) | $ | 136.1 | $ | 163.1 |
December 31, 2020 | December 31, 2019 | ||||||||||
(in millions) | |||||||||||
Railcar Leasing and Management Services Group | $ | 7,652.1 | $ | 8,012.6 | |||||||
Rail Products Group | 858.6 | 1,019.8 | |||||||||
All Other | 199.4 | 195.7 | |||||||||
Segment Totals before Eliminations and Corporate | 8,710.1 | 9,228.1 | |||||||||
Corporate | 812.0 | 378.1 | |||||||||
Eliminations – Lease Subsidiary | (820.3) | (903.8) | |||||||||
Eliminations – Other | — | (1.0) | |||||||||
Total Assets | $ | 8,701.8 | $ | 8,701.4 |
December 31, 2020 | |||||||||||||||||||||||||||||
Wholly-
Owned Subsidiaries |
Partially-Owned Subsidiaries | Total Leasing Group |
Eliminations – Lease Subsidiary (1)
|
Adjusted Total Leasing Group | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 3.5 | $ | — | $ | 3.5 | $ | — | $ | 3.5 | |||||||||||||||||||
Accounts receivable | 82.0 | 8.4 | 90.4 | — | 90.4 | ||||||||||||||||||||||||
Property, plant, and equipment, net (2)
|
5,795.9 | 1,626.3 | 7,422.2 | (820.3) | 6,601.9 | ||||||||||||||||||||||||
Restricted cash | 65.2 | 31.1 | 96.3 | — | 96.3 | ||||||||||||||||||||||||
Other assets | 38.1 | 1.6 | 39.7 | — | 39.7 | ||||||||||||||||||||||||
Total assets | $ | 5,984.7 | $ | 1,667.4 | $ | 7,652.1 | $ | (820.3) | $ | 6,831.8 | |||||||||||||||||||
Accounts payable and accrued liabilities | $ | 141.4 | $ | 30.9 | $ | 172.3 | $ | — | $ | 172.3 | |||||||||||||||||||
Debt, net | 3,340.5 | 1,228.3 | 4,568.8 | — | 4,568.8 | ||||||||||||||||||||||||
Deferred income taxes | 1,062.3 | 1.1 | 1,063.4 | (186.2) | 877.2 | ||||||||||||||||||||||||
Other liabilities | 25.7 | — | 25.7 | — | 25.7 | ||||||||||||||||||||||||
Total liabilities | 4,569.9 | 1,260.3 | 5,830.2 | (186.2) | 5,644.0 | ||||||||||||||||||||||||
Noncontrolling interest | — | 277.2 | 277.2 | — | 277.2 | ||||||||||||||||||||||||
Total Equity | $ | 1,414.8 | $ | 129.9 | $ | 1,544.7 | $ | (634.1) | $ | 910.6 |
December 31, 2019 | |||||||||||||||||||||||||||||
Wholly-
Owned Subsidiaries |
Partially-Owned Subsidiaries | Total Leasing Group |
Eliminations – Lease Subsidiary (1)
|
Adjusted Total Leasing Group | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1.8 | $ | — | $ | 1.8 | $ | — | $ | 1.8 | |||||||||||||||||||
Accounts receivable | 73.9 | 8.7 | 82.6 | — | 82.6 | ||||||||||||||||||||||||
Property, plant, and equipment, net | 5,818.9 | 1,786.7 | 7,605.6 | (903.8) | 6,701.8 | ||||||||||||||||||||||||
Restricted cash | 78.4 | 33.0 | 111.4 | — | 111.4 | ||||||||||||||||||||||||
Other assets | 209.8 | 1.4 | 211.2 | — | 211.2 | ||||||||||||||||||||||||
Total assets | $ | 6,182.8 | $ | 1,829.8 | $ | 8,012.6 | $ | (903.8) | $ | 7,108.8 | |||||||||||||||||||
Accounts payable and accrued liabilities | $ | 100.7 | $ | 44.6 | $ | 145.3 | $ | — | $ | 145.3 | |||||||||||||||||||
Debt, net | 3,080.7 | 1,278.4 | 4,359.1 | — | 4,359.1 | ||||||||||||||||||||||||
Deferred income taxes | 861.7 | 1.1 | 862.8 | (184.8) | 678.0 | ||||||||||||||||||||||||
Other liabilities | 32.7 | — | 32.7 | — | 32.7 | ||||||||||||||||||||||||
Total liabilities | 4,075.8 | 1,324.1 | 5,399.9 | (184.8) | 5,215.1 | ||||||||||||||||||||||||
Noncontrolling interest | — | 348.8 | 348.8 | — | 348.8 | ||||||||||||||||||||||||
Total Equity | $ | 2,107.0 | $ | 156.9 | $ | 2,263.9 | $ | (719.0) | $ | 1,544.9 |
Year Ended December 31, | Percent Change | ||||||||||||||||||||||||||||
2020 | 2019 | 2018 |
2020 versus 2019
|
2019 versus 2018
|
|||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Leasing and management revenues | $ | 747.9 | $ | 756.5 | $ | 728.9 | (1.1) | % | 3.8 | % | |||||||||||||||||||
Sales of railcars owned one year or less at the time of sale (1)(2)
|
54.4 | 360.7 | 113.9 | (84.9) | % | 216.7 | % | ||||||||||||||||||||||
Total revenues | $ | 802.3 | $ | 1,117.2 | $ | 842.8 | (28.2) | % | 32.6 | % | |||||||||||||||||||
Operating profit (3):
|
|||||||||||||||||||||||||||||
Leasing and management | $ | 336.0 | $ | 314.7 | $ | 291.8 | 6.8 | % | 7.8 | % | |||||||||||||||||||
Railcars owned one year or less at the time of sale | 0.4 | 41.4 | 21.5 | (99.0) | % | 92.6 | % | ||||||||||||||||||||||
Railcars owned more than one year at the time of sale | 17.3 | 50.5 | 50.4 | (65.7) | % | 0.2 | % | ||||||||||||||||||||||
Property disposition losses (4)
|
— | — | (12.6) | * | * | ||||||||||||||||||||||||
Total operating profit | $ | 353.7 | $ | 406.6 | $ | 351.1 | (13.0) | % | 15.8 | % | |||||||||||||||||||
Total operating profit margin | 44.1 | % | 36.4 | % | 41.7 | % | |||||||||||||||||||||||
Leasing and management operating profit margin
|
44.9 | % | 41.6 | % | 40.0 | % | |||||||||||||||||||||||
Selected expense information: | |||||||||||||||||||||||||||||
Depreciation (5)(6)
|
$ | 214.7 | $ | 232.2 | $ | 196.6 | (7.5) | % | 18.1 | % | |||||||||||||||||||
Maintenance and compliance | $ | 88.1 | $ | 102.1 | $ | 99.3 | (13.7) | % | 2.8 | % | |||||||||||||||||||
Rent | $ | 9.7 | $ | 16.9 | $ | 42.4 | (42.6) | % | (60.1) | % | |||||||||||||||||||
Selling, engineering, and administrative expenses
|
$ | 51.3 | $ | 49.5 | $ | 51.1 | 3.6 | % | (3.1) | % | |||||||||||||||||||
Interest | $ | 196.2 | $ | 197.2 | $ | 142.3 | (0.5) | % | 38.6 | % |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Sales of leased railcars:
|
|||||||||||||||||
Railcars owned one year or less at the time of sale (1)(2)
|
$ | 54.4 | $ | 360.7 | $ | 113.9 | |||||||||||
Railcars owned more than one year at the time of sale
|
138.7 | 205.7 | 230.5 | ||||||||||||||
$ | 193.1 | $ | 566.4 | $ | 344.4 | ||||||||||||
Operating profit on sales of leased railcars: | |||||||||||||||||
Railcars owned one year or less at the time of sale | $ | 0.4 | $ | 41.4 | $ | 21.5 | |||||||||||
Railcars owned more than one year at the time of sale | 17.3 | 50.5 | 50.4 | ||||||||||||||
$ | 17.7 | $ | 91.9 | $ | 71.9 | ||||||||||||
Operating profit margin on sales of leased railcars: | |||||||||||||||||
Railcars owned one year or less at the time of sale | 0.7 | % | 11.5 | % | 18.9 | % | |||||||||||
Railcars owned more than one year at the time of sale | 12.5 | % | 24.6 | % | 21.9 | % | |||||||||||
Weighted average operating profit margin on sales of leased railcars
|
9.2 | % | 16.2 | % | 20.9 | % |
2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||
Future contractual minimum rental revenues | $ | 550.4 | $ | 432.8 | $ | 322.3 | $ | 237.9 | $ | 160.9 | $ | 290.6 | $ | 1,994.9 |
2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||
Future operating lease obligations
|
$ | 8.2 | $ | 7.5 | $ | 5.7 | $ | 2.5 | $ | 0.6 | $ | 0.3 | $ | 24.8 | |||||||||||||||||||||||||||
Future contractual minimum rental revenues
|
$ | 5.0 | $ | 3.4 | $ | 1.6 | $ | 0.7 | $ | 0.2 | $ | — | $ | 10.9 |
December 31, 2020 | December 31, 2019 | ||||||||||
(in millions) | |||||||||||
Manufacturing/Corporate: | |||||||||||
Land | $ | 23.2 | $ | 28.4 | |||||||
Buildings and improvements | 428.6 | 402.2 | |||||||||
Machinery and other | 485.1 | 546.7 | |||||||||
Construction in progress | 42.5 | 63.1 | |||||||||
979.4 | 1,040.4 | ||||||||||
Less accumulated depreciation | (577.9) | (631.6) | |||||||||
401.5 | 408.8 | ||||||||||
Leasing: | |||||||||||
Wholly-owned subsidiaries: | |||||||||||
Machinery and other | 19.5 | 13.7 | |||||||||
Equipment on lease | 7,010.6 | 6,944.2 | |||||||||
7,030.1 | 6,957.9 | ||||||||||
Less accumulated depreciation | (1,234.2) | (1,139.0) | |||||||||
5,795.9 | 5,818.9 | ||||||||||
Partially-owned subsidiaries: | |||||||||||
Equipment on lease | 2,248.2 | 2,410.0 | |||||||||
Less accumulated depreciation | (621.9) | (623.3) | |||||||||
1,626.3 | 1,786.7 | ||||||||||
Deferred profit on railcars sold to the Leasing Group | (1,064.7) | (1,135.8) | |||||||||
Less accumulated amortization | 244.4 | 232.0 | |||||||||
(820.3) | (903.8) | ||||||||||
$ | 7,003.4 | $ | 7,110.6 |
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Corporate – Recourse: | |||||||||||||||||||||||
Revolving credit facility | $ | 50.0 | $ | 50.0 | $ | 125.0 | $ | 125.0 | |||||||||||||||
Senior notes, net of unamortized discount of $0.2 and $0.2
|
399.8 | 420.3 | 399.8 | 411.7 | |||||||||||||||||||
449.8 | 470.3 | 524.8 | 536.7 | ||||||||||||||||||||
Less: unamortized debt issuance costs | (1.6) | (2.0) | |||||||||||||||||||||
Total recourse debt | 448.2 | 522.8 | |||||||||||||||||||||
Leasing – Non-recourse: | |||||||||||||||||||||||
Wholly-owned subsidiaries: | |||||||||||||||||||||||
2006 secured railcar equipment notes | — | — | 109.3 | 114.0 | |||||||||||||||||||
2009 secured railcar equipment notes | 142.3 | 170.0 | 147.8 | 168.7 | |||||||||||||||||||
2010 secured railcar equipment notes | 235.9 | 248.5 | 248.5 | 264.3 | |||||||||||||||||||
2017 promissory notes, net of unamortized discount of $10.1 and $—
|
802.7 | 802.7 | 627.1 | 627.1 | |||||||||||||||||||
2018 secured railcar equipment notes, net of unamortized discount of $0.2 and $0.2
|
434.7 | 449.3 | 452.1 | 466.2 | |||||||||||||||||||
TRIHC 2018 secured railcar equipment notes, net of unamortized discount of $— and $1.4
|
— | — | 265.4 | 270.9 | |||||||||||||||||||
2019 secured railcar equipment notes, net of unamortized discount of $0.3 and $0.4
|
860.5 | 890.8 | 901.0 | 904.9 | |||||||||||||||||||
2020 secured railcar equipments notes, net of unamortized discount of $0.1 and $—
|
369.0 | 370.2 | — | — | |||||||||||||||||||
TILC warehouse facility | 519.4 | 519.4 | 353.4 | 353.4 | |||||||||||||||||||
3,364.5 | 3,450.9 | 3,104.6 | 3,169.5 | ||||||||||||||||||||
Less: unamortized debt issuance costs | (24.0) | (23.9) | |||||||||||||||||||||
3,340.5 | 3,080.7 | ||||||||||||||||||||||
Partially-owned subsidiaries: | |||||||||||||||||||||||
TRL 2012 secured railcar equipment notes | 352.5 | 373.9 | 371.4 | 374.4 | |||||||||||||||||||
TRIP Master Funding secured railcar equipment notes | 885.0 | 959.7 | 917.9 | 984.0 | |||||||||||||||||||
1,237.5 | 1,333.6 | 1,289.3 | 1,358.4 | ||||||||||||||||||||
Less: unamortized debt issuance costs | (9.2) | (10.9) | |||||||||||||||||||||
1,228.3 | 1,278.4 | ||||||||||||||||||||||
Total non–recourse debt | 4,568.8 | 4,359.1 | |||||||||||||||||||||
Total debt | $ | 5,017.0 | $ | 5,254.8 | $ | 4,881.9 | $ | 5,064.6 |
2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||
Recourse: | |||||||||||||||||||||||||||||||||||||||||
Corporate | $ | — | $ | — | $ | 50.0 | $ | 400.0 | $ | — | $ | — | $ | 450.0 | |||||||||||||||||||||||||||
Non-recourse – leasing (Note 6):
|
|||||||||||||||||||||||||||||||||||||||||
2009 secured railcar equipment notes | 14.5 | 14.0 | 11.8 | 14.5 | 19.9 | 67.6 | 142.3 | ||||||||||||||||||||||||||||||||||
2010 secured railcar equipment notes | 22.8 | 20.8 | 22.3 | 18.4 | 20.6 | 131.0 | 235.9 | ||||||||||||||||||||||||||||||||||
2017 promissory notes
|
44.4 | 44.4 | 44.4 | 44.4 | 635.2 | — | 812.8 | ||||||||||||||||||||||||||||||||||
2018 secured railcar equipment notes
|
17.9 | 19.0 | 19.1 | 19.1 | 14.9 | 344.9 | 434.9 | ||||||||||||||||||||||||||||||||||
2019 secured railcar equipment notes
|
37.8 | 36.8 | 34.9 | 36.6 | 35.2 | 679.5 | 860.8 | ||||||||||||||||||||||||||||||||||
2020 secured railcar equipment notes | 20.0 | 18.5 | 18.3 | 14.4 | 11.3 | 286.6 | 369.1 | ||||||||||||||||||||||||||||||||||
TILC warehouse facility
|
16.7 | 2.8 | — | — | — | — | 19.5 | ||||||||||||||||||||||||||||||||||
Facility termination payments – TILC warehouse facility
|
— | 499.9 | — | — | — | — | 499.9 | ||||||||||||||||||||||||||||||||||
TRL 2012 secured railcar equipment notes
|
19.8 | 19.5 | 22.7 | 28.9 | 31.3 | 230.3 | 352.5 | ||||||||||||||||||||||||||||||||||
TRIP Master Funding secured railcar equipment notes
|
40.5 | 41.8 | 37.0 | 191.6 | 70.3 | 503.8 | 885.0 | ||||||||||||||||||||||||||||||||||
Total principal payments | $ | 234.4 | $ | 717.5 | $ | 260.5 | $ | 767.9 | $ | 838.7 | $ | 2,243.7 | $ | 5,062.7 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Current: | |||||||||||||||||
Federal: | |||||||||||||||||
Effect of CARES Act | $ | (373.3) | $ | — | $ | — | |||||||||||
Other | (125.4) | (6.0) | (19.1) | ||||||||||||||
(498.7) | (6.0) | (19.1) | |||||||||||||||
State | (0.1) | 6.6 | (1.5) | ||||||||||||||
Foreign | 4.3 | 6.1 | 5.3 | ||||||||||||||
Total current | (494.5) | 6.7 | (15.3) | ||||||||||||||
Deferred: | |||||||||||||||||
Federal: | |||||||||||||||||
Effect of CARES Act | 192.9 | — | — | ||||||||||||||
Other | 23.4 | 44.0 | 43.2 | ||||||||||||||
216.3 | 44.0 | 43.2 | |||||||||||||||
State | (0.4) | 12.3 | 14.7 | ||||||||||||||
Foreign | 10.2 | (1.5) | — | ||||||||||||||
Total deferred | 226.1 | 54.8 | 57.9 | ||||||||||||||
Provision (benefit) | $ | (268.4) | $ | 61.5 | $ | 42.6 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
Effect of CARES Act | 36.5 | — | — | ||||||||||||||
Impairment - noncontrolling interest in partially-owned subsidiaries | (3.5) | — | — | ||||||||||||||
State taxes | 1.1 | 2.2 | 2.3 | ||||||||||||||
Foreign branch taxes | (0.2) | 1.2 | 2.9 | ||||||||||||||
Executive compensation limitations | (0.3) | 1.2 | 0.9 | ||||||||||||||
Interest expense limitations from partially-owned subsidiaries | 0.2 | 1.0 | 1.3 | ||||||||||||||
Noncontrolling interest in partially-owned subsidiaries | 0.1 | 0.1 | (0.5) | ||||||||||||||
Changes in state laws and apportionment | (1.2) | 4.3 | 5.2 | ||||||||||||||
Changes in valuation allowances and reserves | 0.5 | — | 1.6 | ||||||||||||||
Equity compensation | — | (0.8) | (1.4) | ||||||||||||||
Effect of Tax Cuts and Jobs Act | — | — | (3.9) | ||||||||||||||
Other, net | 0.1 | 0.4 | (1.3) | ||||||||||||||
Effective rate | 54.3 | % | 30.6 | % | 28.1 | % |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in millions) | |||||||||||
Deferred tax liabilities: | |||||||||||
Depreciation, depletion, and amortization | $ | 996.8 | $ | 913.4 | |||||||
Partially-owned subsidiaries basis difference | 139.9 | 144.7 | |||||||||
Right-of-use assets | 17.5 | 10.0 | |||||||||
Total deferred tax liabilities | 1,154.2 | 1,068.1 | |||||||||
Deferred tax assets: | |||||||||||
Workers compensation, pensions, and other benefits | 27.1 | 3.1 | |||||||||
Warranties and reserves | 3.9 | 4.5 | |||||||||
Equity items | 9.5 | 46.1 | |||||||||
Tax loss carryforwards and credits | 62.8 | 229.0 | |||||||||
Inventory | 5.4 | 5.1 | |||||||||
Accrued liabilities and other | 5.3 | 9.7 | |||||||||
Lease liabilities | 22.9 | 10.0 | |||||||||
Total deferred tax assets | 136.9 | 307.5 | |||||||||
Net deferred tax liabilities before valuation allowances | 1,017.3 | 760.6 | |||||||||
Valuation allowances | 25.2 | 19.5 | |||||||||
Net deferred tax liabilities before reserve for uncertain tax positions | 1,042.5 | 780.1 | |||||||||
Deferred tax assets included in reserve for uncertain tax positions | (1.0) | (1.0) | |||||||||
Adjusted net deferred tax liabilities | $ | 1,041.5 | $ | 779.1 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Beginning balance | $ | 2.3 | $ | 8.1 | $ | 7.0 | |||||||||||
Additions for tax positions of prior years | — | — | 3.0 | ||||||||||||||
Reductions for tax positions of prior years | — | — | (0.3) | ||||||||||||||
Settlements | — | (5.8) | (1.5) | ||||||||||||||
Expiration of statute of limitations | — | — | (0.1) | ||||||||||||||
Ending balance | $ | 2.3 | $ | 2.3 | $ | 8.1 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Assumptions used to determine benefit obligations at the annual measurement date were:
|
|||||||||||||||||
Obligation discount rate | N/A | 2.73 | % | 4.45 | % | ||||||||||||
Assumptions used to determine net periodic benefit costs were: | |||||||||||||||||
Obligation discount rate | 2.71 | % | 4.45 | % | 3.79 | % | |||||||||||
Long-term rate of return on plan assets | 3.90 | % | 4.90 | % | 5.65 | % | |||||||||||
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Expense Components | |||||||||||||||||
Service cost | $ | — | $ | 0.1 | $ | 0.1 | |||||||||||
Interest | 14.8 | 19.7 | 18.3 | ||||||||||||||
Expected return on plan assets | (20.9) | (23.0) | (27.4) | ||||||||||||||
Amortization of actuarial loss | 6.0 | 4.6 | 4.8 | ||||||||||||||
Amortization of prior service cost | 1.2 | — | — | ||||||||||||||
Settlement loss | 151.5 | — | — | ||||||||||||||
Other | — | — | 0.6 | ||||||||||||||
Net periodic benefit cost | 152.6 | 1.4 | (3.6) | ||||||||||||||
Profit sharing | 9.0 | 11.0 | 11.1 | ||||||||||||||
Net expense | $ | 161.6 | $ | 12.4 | $ | 7.5 |
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in millions) | |||||||||||
Accumulated Benefit Obligations | $ | 15.5 | $ | 557.9 | |||||||
Projected Benefit Obligations: | |||||||||||
Beginning of year | $ | 557.9 | $ | 453.2 | |||||||
Service cost | — | 0.1 | |||||||||
Interest | 14.8 | 19.7 | |||||||||
Benefits paid | (23.0) | (22.2) | |||||||||
Actuarial (gain) loss | 18.0 | 105.6 | |||||||||
Plan amendments | — | 1.5 | |||||||||
Settlements | (552.2) | — | |||||||||
End of year | $ | 15.5 | $ | 557.9 | |||||||
Plans' Assets: | |||||||||||
Beginning of year | $ | 548.5 | $ | 478.7 | |||||||
Actual return on assets | 49.3 | 90.9 | |||||||||
Employer contributions | 1.0 | 1.1 | |||||||||
Benefits paid | (23.0) | (22.2) | |||||||||
Settlements | (552.2) | — | |||||||||
End of year | $ | 23.6 | $ | 548.5 | |||||||
Consolidated Balance Sheet Components: | |||||||||||
Pension Plan: | |||||||||||
Other assets | $ | 23.6 | $ | 5.5 | |||||||
Accrued liabilities | — | — | |||||||||
Net funded status | $ | 23.6 | $ | 5.5 | |||||||
SERP: | |||||||||||
Other assets | $ | — | $ | — | |||||||
Accrued liabilities | (15.5) | (14.9) | |||||||||
Net funded status | $ | (15.5) | $ | (14.9) |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions) | |||||||||||||||||
Settlement of pension plan | $ | 151.5 | $ | — | $ | — | |||||||||||
Actuarial gain (loss) | 10.4 | (37.7) | (12.5) | ||||||||||||||
Amortization of actuarial loss | 6.0 | 4.6 | 4.8 | ||||||||||||||
Amortization of prior service cost | 1.2 | — | — | ||||||||||||||
New prior service cost base | — | (1.5) | — | ||||||||||||||
Total before income taxes | 169.1 | (34.6) | (7.7) | ||||||||||||||
Income tax (benefit) expense | 39.2 | (7.9) | (1.8) | ||||||||||||||
Net amount recognized in other comprehensive income (loss) | $ | 129.9 | $ | (26.7) | $ | (5.9) |
Fair Value Measurement as of December 31, 2019
|
|||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Temporary cash investments | $ | 13.5 | $ | — | $ | — | $ | 13.5 | |||||||||||||||
Fixed Income – Government and agencies | — | 121.7 | — | 121.7 | |||||||||||||||||||
Fixed Income – Corporate | — | 370.5 | — | 370.5 | |||||||||||||||||||
Fixed Income – Asset-backed securities | — | 2.2 | — | 2.2 | |||||||||||||||||||
Fixed Income – Collateralized mortgage-backed | — | 4.1 | — | 4.1 | |||||||||||||||||||
Equity common trust funds | — | 29.1 | — | 29.1 | |||||||||||||||||||
Debt common trust funds | — | — | 7.4 | 7.4 | |||||||||||||||||||
$ | 13.5 | $ | 527.6 | $ | 7.4 | $ | 548.5 |
Accrued charges as of
December 31, 2019
|
Charges and adjustments | Payments |
Accrued charges as of
December 31, 2020
|
||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Cash charges: | |||||||||||||||||||||||
Employee severance costs | $ | 3.4 | $ | 7.8 | $ | (9.8) | $ | 1.4 | |||||||||||||||
Contract termination costs | — | 0.6 | (0.6) | — | |||||||||||||||||||
$ | 3.4 | $ | 8.4 | $ | (10.4) | $ | 1.4 | ||||||||||||||||
Asset impairment charges: | |||||||||||||||||||||||
Write-down of assets | $ | 5.3 | |||||||||||||||||||||
(Gain)/loss on disposition of assets | (2.7) | ||||||||||||||||||||||
$ | 2.6 | ||||||||||||||||||||||
Total restructuring activities | $ | 11.0 |
Year Ended December 31, 2020 | |||||||||||||||||||||||||||||
Employee Severance Costs | Contract Termination Costs | (Gain)/Loss on Disposition of Assets | Write-down of Assets | Total | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Railcar Leasing and Management Services Group | $ | 1.4 | $ | — | $ | — | $ | — | $ | 1.4 | |||||||||||||||||||
Rail Products Group | 4.0 | 0.2 | (2.9) | — | 1.3 | ||||||||||||||||||||||||
All Other | 0.2 | — | 0.2 | — | 0.4 | ||||||||||||||||||||||||
Corporate | 2.2 | 0.4 | — | 5.3 | 7.9 | ||||||||||||||||||||||||
Total restructuring activities | $ | 7.8 | $ | 0.6 | $ | (2.7) | $ | 5.3 | $ | 11.0 |
Year Ended December 31, 2019 | |||||||||||||||||
Employee Severance Costs | Write-down of Assets | Total | |||||||||||||||
(in millions) | |||||||||||||||||
Railcar Leasing and Management Services Group | $ | 0.2 | $ | — | $ | 0.2 | |||||||||||
Rail Products Group | 0.7 | — | 0.7 | ||||||||||||||
All Other | 0.5 | 10.9 | 11.4 | ||||||||||||||
Corporate | 2.4 | — | 2.4 | ||||||||||||||
Total restructuring activities | $ | 3.8 | $ | 10.9 | $ | 14.7 |
Currency translation adjustments | Unrealized gain/(loss) on derivative financial instruments | Net actuarial gains/(losses) and prior service cost of defined benefit plans | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Balances at December 31, 2018
|
$ | (1.3) | $ | (8.3) | $ | (107.2) | $ | (116.8) | |||||||||||||||
Other comprehensive loss, net of tax, before reclassifications | — | (12.8) | (30.2) | (43.0) | |||||||||||||||||||
Amounts reclassified from AOCL, net of tax benefit of $—, $0.8, $1.1, and $1.9
|
— | 4.5 | 3.5 | 8.0 | |||||||||||||||||||
Less: noncontrolling interest
|
— | (1.3) | — | (1.3) | |||||||||||||||||||
Other comprehensive loss
|
— | (9.6) | (26.7) | (36.3) | |||||||||||||||||||
Balances at December 31, 2019
|
(1.3) | (17.9) | (133.9) | (153.1) | |||||||||||||||||||
Other comprehensive income (loss), net of tax, before reclassifications | — | (19.4) | 7.7 | (11.7) | |||||||||||||||||||
Amounts reclassified from AOCL, net of tax benefit of $—, $3.5, $1.6, and $5.1
|
— | 12.9 | 5.6 | 18.5 | |||||||||||||||||||
Amounts reclassified from AOCL related to settlement of pension plan, net of tax benefit of
$—, $—, $34.9, and $34.9
|
— | — | 116.6 | 116.6 | |||||||||||||||||||
Less: noncontrolling interest | — | (1.2) | — | (1.2) | |||||||||||||||||||
Other comprehensive income (loss) | — | (7.7) | 129.9 | 122.2 | |||||||||||||||||||
Balances at December 31, 2020
|
$ | (1.3) | $ | (25.6) | $ | (4.0) | $ | (30.9) |
Shares Repurchased | Remaining Authorization to Repurchase | ||||||||||||||||
Period | Number of shares |
Cost
(in millions) |
Cost
(in millions) |
||||||||||||||
March 7, 2019 Authorization | $ | 350.0 | |||||||||||||||
March 7, 2019 through March 31, 2019 | 866,715 | $ | 19.0 | $ | 331.0 | ||||||||||||
April 1, 2019 through June 30, 2019 | 2,133,116 | 44.0 | $ | 287.0 | |||||||||||||
July 1, 2019 through September 30, 2019 | 5,171,489 | 100.9 | $ | 186.1 | |||||||||||||
October 1, 2019 through December 31, 2019 | 2,933,474 | 60.8 | $ | 125.3 | |||||||||||||
January 1, 2020 through March 31, 2020 | 1,850,000 | 35.4 | $ | 89.9 | |||||||||||||
April 1, 2020 through June 30, 2020 | — | — | $ | 89.9 | |||||||||||||
July 1, 2020 through September 30, 2020 | 4,466,896 | 89.9 | $ | — | |||||||||||||
Total | 17,421,690 | $ | 350.0 |
Shares Repurchased | Remaining Authorization to Repurchase | ||||||||||||||||
Period | Number of shares |
Cost
(in millions) |
Cost
(in millions) |
||||||||||||||
October 23, 2020 Authorization | $ | 250.0 | |||||||||||||||
October 23, 2020 through December 31, 2020 | 2,974,922 | $ | 67.8 | $ | 182.2 | ||||||||||||
Total | 2,974,922 | $ | 67.8 |
Number of Shares | Weighted Average Grant-Date Fair Value per Award | Weighted Average Remaining Contractual Terms (Years) |
Aggregate Intrinsic Value
(in millions) |
||||||||||||||||||||
Options outstanding at December 31, 2019
|
— | $ | — | ||||||||||||||||||||
Granted | 300,000 | $ | 5.26 | ||||||||||||||||||||
Exercised | — | $ | — | ||||||||||||||||||||
Cancelled | — | $ | — | ||||||||||||||||||||
Options outstanding at December 31, 2020
|
300,000 | $ | 5.26 | 9.1 | $ | 1.4 |
Year Ended December 31, 2020 | |||||
Exercise price | $ | 21.61 | |||
Risk-free interest rate | 1.48 | % | |||
Expected life (in years) | 6.50 | ||||
Equity volatility | 35.00 | % | |||
Dividend yield | 3.42 | % |
Number of Restricted Share Awards
|
Weighted Average Grant-Date
Fair Value per Award |
||||||||||
Restricted share awards outstanding at December 31, 2019
|
5,055,461 | $ | 20.99 | ||||||||
Granted | 1,022,115 | $ | 18.62 | ||||||||
Vested | (1,802,836) | $ | 21.70 | ||||||||
Forfeited | (476,309) | $ | 20.59 | ||||||||
Restricted share awards outstanding at December 31, 2020 (1)
|
3,798,431 | $ | 20.06 |
Number of Performance Units
|
Weighted Average Grant-Date
Fair Value per Award |
||||||||||
Performance units outstanding at December 31, 2019
|
800,762 | $ | 26.33 | ||||||||
Granted | 444,252 | $ | 20.31 | ||||||||
Vested | (3,091) | $ | 28.35 | ||||||||
Forfeited | (6,751) | $ | 24.74 | ||||||||
Performance units outstanding at December 31, 2020
|
1,235,172 | $ | 24.17 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||
Income (loss) from continuing operations | $ | (226.1) | $ | 139.2 | $ | 109.0 | |||||||||||
Less: Net (income) loss attributable to noncontrolling interest | 78.9 | 1.5 | (3.8) | ||||||||||||||
Unvested restricted share participation — continuing operations
|
— | (1.8) | (2.2) | ||||||||||||||
Net income (loss) from continuing operations attributable to Trinity Industries, Inc. | (147.2) | 138.9 | 103.0 | ||||||||||||||
Net income (loss) from discontinued operations, net of income taxes
|
(0.1) | (3.1) | 54.1 | ||||||||||||||
Unvested restricted share participation — discontinued operations
|
— | — | (0.6) | ||||||||||||||
Net income (loss) from discontinued operations attributable to Trinity Industries, Inc.
|
(0.1) | (3.1) | 53.5 | ||||||||||||||
Net income (loss) attributable to Trinity Industries, Inc., including the effect of unvested restricted share participation | $ | (147.3) | $ | 135.8 | $ | 156.5 | |||||||||||
Basic weighted average shares outstanding | 115.9 | 125.6 | 144.0 | ||||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Nonparticipating unvested RSUs and RSAs | — | 1.7 | 1.0 | ||||||||||||||
Convertible subordinated notes
|
— | — | 1.4 | ||||||||||||||
Diluted weighted average shares outstanding
|
115.9 | 127.3 | 146.4 | ||||||||||||||
Basic earnings per common share:
|
|||||||||||||||||
Income (loss) from continuing operations | $ | (1.27) | $ | 1.11 | $ | 0.72 | |||||||||||
Income (loss) from discontinued operations | — | (0.02) | 0.37 | ||||||||||||||
Basic net income (loss) attributable to Trinity Industries, Inc. | $ | (1.27) | $ | 1.09 | $ | 1.09 | |||||||||||
Diluted earnings per common share: | |||||||||||||||||
Income (loss) from continuing operations | $ | (1.27) | $ | 1.09 | $ | 0.70 | |||||||||||
Income (loss) from discontinued operations | — | (0.02) | 0.37 | ||||||||||||||
Diluted net income (loss) attributable to Trinity Industries, Inc. | $ | (1.27) | $ | 1.07 | $ | 1.07 |
/s/ ERNST & YOUNG LLP |
NO. | DESCRIPTION | |||||||
(2.1) | ||||||||
(3.1) | ||||||||
(3.2) | ||||||||
(4.1) | ||||||||
(4.2) | ||||||||
(4.2.1) | ||||||||
(4.2.2) | ||||||||
(4.2.3) | ||||||||
(4.2.4) | ||||||||
(4.2.5) | ||||||||
(4.2.6) | ||||||||
(4.3) | ||||||||
(10.1) | ||||||||
(10.2) | 1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 4.1 of Registration Statement No. 33-73026 filed December 15, 1993).* | |||||||
(10.2.1) | ||||||||
(10.2.2) | ||||||||
(10.2.3) | ||||||||
(10.2.4) | ||||||||
(10.2.5) | ||||||||
(10.3) | ||||||||
(10.4) |
NO. | DESCRIPTION | |||||||
(10.4.1) | ||||||||
(10.5) | ||||||||
(10.6) | ||||||||
(10.6.1) | ||||||||
(10.6.2) | ||||||||
(10.6.3) | ||||||||
(10.6.4) | ||||||||
(10.7) | ||||||||
(10.7.1) | ||||||||
(10.7.2) | ||||||||
(10.7.3) | ||||||||
(10.7.4) | ||||||||
(10.7.5) | ||||||||
(10.7.6) | ||||||||
(10.7.7) | ||||||||
(10.7.8) | ||||||||
(10.7.9) | ||||||||
(10.7.10) | ||||||||
(10.7.11) | ||||||||
(10.7.12) | ||||||||
(10.8) | ||||||||
(10.8.1) |
NO. | DESCRIPTION | |||||||
(10.9) | ||||||||
(10.10) | ||||||||
(10.10.1) | ||||||||
(10.10.2) | ||||||||
(10.11) | ||||||||
(10.12) | ||||||||
(10.13) | ||||||||
(10.14) | ||||||||
(10.15) | ||||||||
(10.16) | ||||||||
(10.17) | ||||||||
(10.18) | ||||||||
(10.19) | ||||||||
(10.20) | ||||||||
(10.21) | ||||||||
(10.22) | ||||||||
(10.22.1) | ||||||||
(10.24) | ||||||||
(10.28) |
NO. | DESCRIPTION | |||||||
(10.28.1) | ||||||||
(10.29) | ||||||||
(10.29.1) | ||||||||
(10.29.2) | ||||||||
(10.29.3) | ||||||||
(21) | ||||||||
(22.1) | ||||||||
(23) | Consent of Ernst & Young LLP (contained on page 111 of this document and filed herewith). | |||||||
(31.1) | ||||||||
(31.2) | ||||||||
(32.1) | ||||||||
(32.2) | ||||||||
101.INS | Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document (filed electronically herewith) | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed electronically herewith) | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (filed electronically herewith) | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed electronically herewith) | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (filed electronically herewith) | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
/s/ ERNST & YOUNG LLP |
TRINITY INDUSTRIES, INC. | By | /s/ Eric R. Marchetto | ||||||
Registrant | ||||||||
Eric R. Marchetto | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
February 24, 2021 |
Directors: | Principal Executive Officer: | ||||
/s/ Leldon E. Echols | /s/ E. Jean Savage | ||||
Leldon E. Echols | E. Jean Savage | ||||
Non-Executive Chairman | Chief Executive Officer, President, and Director | ||||
Dated: February 24, 2021
|
Dated: February 24, 2021
|
||||
/s/ John L. Adams | |||||
John L. Adams | Principal Financial Officer: | ||||
Director | |||||
Dated: February 24, 2021
|
/s/ Eric R. Marchetto | ||||
Eric R. Marchetto | |||||
/s/ Brandon B. Boze | Executive Vice President and Chief Financial Officer | ||||
Brandon B. Boze |
Dated: February 24, 2021
|
||||
Director | |||||
Dated: February 24, 2021
|
|||||
Principal Accounting Officer: | |||||
/s/ John J. Diez | |||||
John J. Diez | /s/ Steven L. McDowell | ||||
Director | Steven L. McDowell | ||||
Dated: February 24, 2021
|
Vice President and Chief Accounting Officer | ||||
Dated: February 24, 2021
|
|||||
/s/ Tyrone M. Jordan | |||||
Tyrone M. Jordan | |||||
Director | |||||
Dated: February 24, 2021
|
|||||
/s/ S. Todd Maclin | |||||
S. Todd Maclin | |||||
Director | |||||
Dated: February 24, 2021
|
|||||
/s/ Charles W. Matthews | |||||
Charles W. Matthews | |||||
Director | |||||
Dated: February 24, 2021
|
|||||
/s/ Dunia A. Shive | |||||
Dunia A. Shive | |||||
Director | |||||
Dated: February 24, 2021
|
1 Year Trinity Industries Chart |
1 Month Trinity Industries Chart |
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