Trinity Industries (TRN) 22 Feb 182017 Q4 Earnings call transcript

Good day, everyone, and welcome to today's Trinity Industries' Fourth Quarter and Full Year Results Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note, this call may be recorded. I'll be standing by if you should need any assistance.

and let statements you Private predictions as Reform of started, call today's Securities of get to Act forward-looking as contains defined XXXX future we financial me intentions, that remind conference Litigation estimates, performance. Before expectations, statements and includes by the that Statements not facts historical are forward-looking. are could of or change to business issues the to Trinity's directed other in are from in of of XX-K and those results SEC the risks, certain a cause filings differ materially Participants forward-looking Form for outcomes any which a actual description expressed and statements. now to my It conference is pleasure over Peck. to Gail the turn

you, Thank of you for call. morning, conference I'm the to Gail morning. joining Peck, us Trinity. Trinity Thank this of Welcome Treasurer Industries' Leo. Vice quarter and results Good fourth XXXX President everyone. Finance

Legal begin our As on update by Highway a done we we've Vice previously, Senior earnings President Theis call with matter brief today's Chief Products Officer. provided Rice, litigation the will and

then follow We earnings with format. quarterly will our normal call

to the spin-off company's planned dedicated Lovett, Administrative spin-off section and Officer, the this update. to will Trinity's Chief the business. Melendy provide infrastructure-related a of format New Vice Senior President is

Officer Marchetto, cover would introduce to also Chief who Vice Rail TrinityRail, Eric We and President Commercial and like Leasing morning. for will Executive this

may you of know Some Eric.

Financial Senior spanning was the Products, been Perry, responsibilities Inland those administration. Group; Previously, Officer Chief entirely broad Tim include in contract Group has Energy not, Equipment Chief XX and Chief Wallace, Vice President market finance and been Officer. James of speakers Chairman, has businesses, Construction Officer Financial Today's and analysis, of Eric his management, and that Senior President; to and with tenure spent and do years, McWhirter, Bill President our TrinityRail. President Executive For and with our Barge and Vice Eric also Trinity our and investments over Leasing portfolio Rail accounting,

our company new move us will Vice to Accounting to Beasley, the Mary Chief the with the in and now President also Scott future remarks, Q&A Henderson, the the infrastructure Chief Officer; are session. Rice. I turn Theis of we call over Following will today. prepared room and Officer Financial

Gail. you, litigation reported the call, ET to the Plus the Joshua on Claims of status our In False I everyone. last Harman Good pertaining system. guardrail Thank morning, Act company's end-terminal

which of court, accept to request Court litigation. is Harman's refuses is their court's the respective to it pending proceed to the Mr. that at before hear to Supreme XXXX, this term parties and and in United of Fifth Mr. Mr. wake Supreme receives. the case. Court the several denied have Harman the to Historically, the on decision. of in petition hearing regarding a as case As XXXX, not If rehearing for Court course reported the for is XX, ET September further not banc The the ending rendered United ruling previously were Mr. also the unanimous favor panel's the the published in all pending. multiple Circuit a to their orally Fifth rehearing judgment, Harman's Mr. appeal by under of XX, Harman's Circuit's over is been Fifth is On to If Trial reported, November by the that case of where a by obligation final on for States timing by is no whether the for Circuit the We approximately the whether the plaintiffs petition the en discretion Supreme depending will The appeal time the prominent of for a judgment court their the request is do its Fifth Court certiorari XX, wholly the claims. Court favor case, discretion. the judgment jury reversed Court. review the in know Supreme or in no available, or factors. States within reviews of Harman's used for Harman's grants of XX, assertion with ruling Act Claims rule will the briefing a the the which original Circuit Fifth hear February ruling Harman any In October X% False to when number resolved Fifth has Court rendered of a annual cases, not decision can accepted verdict, On Fifth on now which Trinity. argue rendering petition to Court thereby I the company, of Supreme judgment and remain for been adverse petitions Circuit's others review XXXX case request, Trinity rule XXXX. Circuit's it Plus the Court's the decision on is active law. The Fifth matter Appeals parties accept and Trinity's filed appellate both on support hearing as Essentially, in filed positions. the within the on Circuit, court the lawsuits a judges Mr. the request on the filed that reversed is have a Supreme as Supreme Circuit and requests the the

defense. to these to incur pending with We costs cases our and defend associated are continuing vigorously

rather fraud it quote it been have not forgiving wavered the defrauded, appropriate we at As unanimous and has the opinion, all adding, the litigation. approval product, levels, government, meets concludes Fifth end-terminal never safety Plus that was fraud, This is government position of standards has panel throughout "When that found its a is False the confirms in federal its it system consistently repeatedly the Circuit Claims all." not the no ET maintained in concluding there Act recognized the at applicable

by United annual States appeal, its the for the released the supersedeas million Circuit, $X.X Texas in the premium Court District million. on of on XXXX, bond of District a final eliminating XX, based As note, Eastern an bond of in $XXX Fifth posted January entry company's judgment Trinity

For the other Form False case litigation, company's a XX the the in Trinity's period Note for filed to XX-K detailed disclosure ended December please see Claims will Act more statements XXXX today. and of financial be the XX, which

over of www.etplusfacts.com. on found case the information the Additional Tim. now opinion can False to turn I Claims and copy a be Act Fifth the call at Circuit's will

Theis, was our for eventful company you, Last ways. many and everyone. morning, Thank an good year year in

barge railcar our fluctuations. flexibility the to into original our Our heading consolidated conditions and ongoing were Despite operational able markets, adjust teams to outperformed inland year. the expectations and oversupply maintain financial in results the demand

successfully in Additionally, were demand for these expanded assets. commercial throughout TrinityRail's successful completing leased our teams high-lease Railcar platform million the Vehicle Investment railcar sales to in year. fleet We $XXX utilization in strong maintaining response

We aggregate buy continued $XX Construction Products businesses. businesses. manufacturing to infrastructure, our stock. XXXX, back and capital two Also $XX invested in million We during the and million shoring also to operating improve our make platform internal to we invested acquired improvements expanded we of trench lightweight assets our

enhance Directors company value of management the advisors During years, time devoted to long-term shareholder our a Trinity's growth. strategic of and the assistance variety potential external few and evaluating with Board position of the for with to options past

our Our surveys, we community. investment investor strategic dialogues was from ongoing valuation as with The value. well of the we as process increasing very and alternatives discussed took into third-party received useful, consideration input various for analyzed the stakeholders several results as shareholder

transaction a be shareholders. our year December, The for businesses spin-off will tax-free spin-off. announced Trinity, the Trinity. businesses our very is Recently, value our our expected roles after separate senior excited intent I'm about I two Perry spin-off. year in I believe This result in transformational the of leaders of will that to for we to we as the infrastructure-related public During current implement be with the announced plan. Trinity's pursue we created James to potential result remain and a will as companies. our

proven legacy Antonio rail enthusiastic serve Carrillo build in company. both of Antonio's upon continuing experience will services. growth. provider infrastructure very the a new CEO see at will and I'm products a for member, very for as premier board previous to of are track are has for We as as CEO asset impressive. a new company. He opportunities and Trinity, an record the His as that management pleased be about accomplishments Trinity's we delivering Mexichem transportation the of

also We Group cultivation CFO been has familiar the will the very infrastructure companies leadership many pleased of to will these Trinity in in Organizational years, our I'm to begin business are Scott with very that company. our in seasoned Corporate a very role his will who to arrive is is a within expect CFO and bench companies. current available for Antonio development new teams. future. Both and knows and role positions skilled of businesses for two key Beasley engaging resulting Scott talented people from the key these equipped as transition the lead. have to for Antonio fill management businesses ready and infrastructure-related strong, focus highly talented well. near

an our now outlook and for infrastructure to Administrative key President to of the for with Lovett, and role spin-off. our across our lead our update Vice more from spin-off comment Before future, it over turn a Chief goal Senior is will the businesses. results our provide the other company with the financial working we transaction about and personnel to playing achieve Officer, spin-off seamless I've respect Melendy our asked on Melendy. I in to Melendy a progress efficient

focus to and the Since the collaboration. our of and spin-off a Trinity the businesses. culture is spin-off we believe as Thank everyone. and leaders of this of a you, a on good of time move are flexibility transaction toward who established company separation. project Tim, day-to-day the This seamless strength Trinity's transformative employees, has results. operations goals and at We with primary core one The our announcement, assist morning, and asset and is successful valuable business-as-usual the same a embody cross-functional of Trinity's separation business team December our

separation work routinely are plan teams our important towards detailed and proceeding have and this stream work each address through for The we meet good continue teams We progress to execution to and transaction formed major make business requirements. transaction.

the milestones key companies, forward and decisions to getting leadership as makeup will and providing name two company to and business, in the CEO CFO of due process the stakeholders teams pertaining We've our in and pleased well expert a on progress portfolio this Thus of are look what anticipate the key we information two will are to with other of and create as structures. spin-off. We management for companies. for far, a Decisions place. in successful infrastructure corporate follow. our the advisors announced organizational senior valuable number other course. public our teams We've refinement alongside working we've be to and strong We of considerable made new together very how established are

Additionally, filed earlier this request month, with we letter ruling the a IRS. private

the with spin-off expect in We to off. expecting in is initial filing XXXX. the public our infrastructure to business we XX fourth of primary the file spun that This time, the being complete second quarter. describing quarter is this Form the are the At SEC

We I conference will now our as times earnings our on Bill. appropriate will at through to stakeholders to we turn quarterly and the over other process. as continue progress call update calls this

of Thank you, Group we fourth quarter performance for serve. everyone. markets reflected good the our conditions end mixed Melendy, demand The Energy and Equipment morning, financial

in lines, the and quarter, compared oil softness backlog positively At efficiencies. products volume the in wind tower fourth improved gas utility The were last year our revenues quarter, improved structures impacted increased the driven For planned lower and in performance of due serving declined year-over-year pricing group's the tower our totaled and markets. volume, other group by those business to primarily quarter the the our by to $XXX results profit continued million. end wind and for operating business,

fourth – expected to the result revenues of of our positive elected a wind The last the deferring from to and tower quarterly quarter a the deliveries versus to to the fourth quarter. due primary XXXX. customer during is to group's comparable in decline quarter portion the ultimately driver fourth XXXX. The of that until first for deliveries expect quarter we on we we guidance the results during customer basis quarter call, achieved the back During a a on the revenue indicated those towers what revenues were quarter XXXX, move outperformance finished fourth during we

tax margins. credit have we calls, tower many put indicated on pressure on the scheduled our previous of the to As of phase-out wind continues

and to we results XXXX. market about utility Turning structures our remain business, optimistic improving expect fundamentals better in

need Long-term reflect reliability side. grid. the activity results on of weak reductions fourth significant for year-over-year While to market volume to improve Inland intact bidding continue our the continue. the increased, based small replace Barge aging conditions has Group as fundamentals be quarter and The the projects market remain on infrastructure

new resulting oversupply customers During demand inland create From $X headwinds, although barges we in the utilization million. be to quarter, $XX year million our orders totaling of for of received in standpoint, backlog barges a a improving. an levels to appear for continues

thus on costs Construction environment. fourth increased quarter inquiries reducing encouraging business. our in We trench First revenues in In have remain been Products acquisition-related volumes higher our this on challenging quarter year-over-year slightly focused far. Group, shoring

are for the demand Dallas-Fort due pricing experiencing While in we Worth to aggregates increased construction remains pressures strong, market supply.

to the investment note, the throughout this to States. elected both infrastructure want to companies. transaction by would personal monitoring developments I'll an to I the group management I to presentation teams a about business selected to XX retirement. thank surrounding closely executives plan and that personally of have United would provide We team needed support excited in many believe that infrastructure to for over for the company, be years the the leadership And details and supported transition after tailwind we the period of a of over the markets Eric. I and years. will Trump. experienced highly the are We have turn serve I now, of extended continue spin supportive positive proposed me the am guidance On President time. drive service

performance culture a call highlights discuss and of market to of year Leasing quarter, of and The our It's and full manufacturing was initial continued this fourth businesses. TrinityRail's with the the integrated into expectations morning's exceeded to the Rail to our business heading line morning. leasing, join and that model for for Leasing financial operational performance flexibility. in and commentary the reflect strength Good and XXXX its Bill. in financial and resulting overall performance services Rail the expectations you, Thank scale performance the pleasure railcar during Groups the year.

production costs responded to railcar and increasing team and volumes Our while competitive needs. customers' conditions market servicing our controlling

market are We positioned and monitoring closely respond are improvements conditions to to demand. well market in

fleet offset by operations fees, the lease During and for a received asset increased management Services Leasing fee wholly Management owned quarter. XXXX, for revenue year-over-year were fourth growth and cancellation profit the in The increases primarily slightly adjusting the rates. in after to overall lease and due partially lower

for leased from in Lease improved the fleet up a terms levels. fleet years have utilization, Lease did consistent Our average within managed while and range, significant of a to the good of remaining team. manageable railcars coming Expirations utilization rates reflecting the the lease fleet are end fourth owned of job high-lease fleet growing our from at effort year-over-year. lease and levels, fleet team maintaining the quarter. utilization years. quarter our fluctuates prior X.X healthy Lease an for XX.X% at percentage of of XXXX and term renewal remain recent and with is quarter renewal

expiring those placing XXXX remain pressure our However, certain current below rates markets, leases, of revenue lease on expectations. in

lease fourth similar opinion, at run quarter highly years. deliveries approximately to emphasis to Our and delivered customers. be upon fleets costs in key the platform challenging in and year-over-year, managed The the railcars year driving delivery of quarter, from leasing lease fleet TrinityRail to placing included of focused of plan fleet be originating and while controlling a we top backlog on tier customers. Lease compliance XXXX, service and next expense stands in schedule fourth at for levels the ramping total representing meet quarter a area XXXX. maintenance for footprint and At and Group executed XXX,XXX up quarterly cost-effective flexibility valuable expect the nearly We the growth. continues to XX% TrinityRail. end, the by to fleet of railcars, to approximately XX% current our our needs nearly Rail fleet lease previous for an expand the capabilities owned railcar TrinityRail during and XX,XXX In leases now strategic remaining our of companies. to growth railcar geographic maintenance scale the few operating provides my

on improved period peak profit and were demand. sequentially expected, a strong and in As that due of pricing operating margin delivered volumes higher priced railcars to

As production pace rate we accelerated the move from expected down run of step into fourth XXXX, is our quarter. to the

ability on pricing market. the these We expect the approximately which the deliver a our we of in and have XXXX, were our to to XX,XXX incremental over weaker of the increase orders. year Most end. railcars railcar capacity, of in XXXX Based sold plan annual in XX% reflect environment deliveries deliveries with at backlog included production

During first the quarter thus include our and TrinityRail's pleased X,XXX activities supported selling leases, Rail railcars. from delivered third level renewing railcars, leases, the parties. railcars are for railcar are the received the orders to to railcars of and scheduled lease fourth and during institutional In far, of for by XX% for Approximately selling with our the new buyers. idle which XX,XXX Group activities received total the commercial leasing of to fourth fully the commercial fleet commitments orders on be equipment. lease to quarter, brings assignment new railcars, year lease we to are quarter

we service the use of to offerings provide railcars. related In addition,

tank stabilizing industry a in markets, industrial seeing growth improved select and in demand encouraged production. are inquiries We flammable of continued remain pickup cars and orders service. We for fundamentals, both to related forecast in modifications by

various markets lease rate helping recent those have in are that soft been stabilize in seeing pricing markets. We improvement is of to signs in which years,

by are the of reform tax recent addition, we In passage the encouraged bill.

tax continued TrinityRail its resulting and respond services ready the activity responsiveness increased to railcar which legislation industrial As to improve and manufacturing, industrial economic demonstrate for we closing, our strength growth North in We in model. changes TrinityRail platforms consumer need The the capabilities expect our quality differentiate scale, and business to effectiveness the to equipment. customers. to In demand. American stand the experience integrated stimulus, leading from and customers of of combined our market leasing, operating and serves

for upon positioned to the build will and to it of are success We integrated market-leading now well remarks. I our the of James growth turn over platform. model further generate his

for Eric, we of our morning, XXXX. results you, quarter fourth announced Yesterday, and Thank good everyone. the

of per company Cuts one-time $X.XX quarter, reported the per effects share the including of and expenses Tax a of spin-off the for in the $X.XX, earnings of related the For per quarter million and $X.XX adjusted to of related the XXXX. transaction and Jobs resulted EPS Act $XXX earnings benefit This to revenues of share share related fourth planned company's of in transaction. $X.XX core to EPS to $X.XX compared

the Jobs income This new primarily our quarter. company's and liabilities and $XXX non-cash adjusted year corporate $X.X EPS per For the full million Tax the year the of revenues per and the $X.XX, leased including to one-time $X.XX of spin-related full the of deferred XXXX. to EPS related tax fleet associated share earnings and we expenses in of XXXX, share. to railcar resulted per resulted fourth for $X.XX compared respect a a with billion XXXX rate. in in we $X.XX of effect Act, benefit earnings tax Cuts debt federal tax benefit recorded This of $X.XX convertible one-time reported core the of of share benefit reflect net transaction of the to With from re-measurement

a and completed assessment made tax have estimate this time. effects have the reasonable at of Act, an We of initial the

few refining However, one-time of implications reform take aspects a I'd the Act like to to tax accounting certain beyond discuss potential and calculations. of we are still the the analyzing ramifications. moments our

in now a an of of of rate our result down previous a approximately XX% As expect XX% effective from rate. XXXX, tax tax Act, expectation we the

available cash of benefited recently, tax tax associated no the benefit leased vesting are a the assets, was realizing tax of the rate as that longer more railcar the the new from certain investments. reform, corporate deductible for not was and flow with are under federal historically perspective, schedule we depreciation We From accelerated XX% have included in bonus that code. full capital tax depreciation items the

reduced the level paid. Given our the taxes cash over investment this of significant years, we've has

write-off for level. our associated delaying new assets, tax our us the deferred cash liability allow at the expect taxes to a We one-year with combined consolidated add of position fixed plans investment, to to

million. Trinity During the repurchased a XXX,XXX program under share at of quarter, of our shares fourth repurchase stock we cost $XX expiring

the market Following the spin-off of in our mid-December new re-entered our a repurchases of authorization period the fiscal through announcement the million $XXX January planned effective which year blackout December, approved X. effect. board took we transaction, two-year end our time for In

financial repurchases under program quarter's we each We as updates results. this will on provide executed report

our the quarter, and wholly million, added our level. fourth in expenditures to invested at $XXX During the million lease value corporate owned with capital across other we a railcars fleet $XX and of businesses

$XXX a owned our with to For we secondary amount included a which the year, wholly market value of added railcars million small fleet of purchases.

our at made corporate the other and also $XXX businesses totaling capital We across expenditures million during XXXX. level

$XXX fourth platform, we through railcar million. to full the $XXX million of RIV During railcars of our sales total primarily quarter, bringing year leased sold leased our

securities, Our our a cash, the company be strong financial marketable sheet as short-term available recover. as year, available the which liquidity markets was billion, the At of equivalents, position includes to opportunistic facilities. committed leasing cash credit great flexibility, as approximately well our balance continues and of deal corporate end to $X.X our our provide allowing and

our our our guidance number of consolidated infrastructure of you XXXX year. the at businesses results quarter. let and planned reflects completion the There core that incorporate been are this has to guidance, of play remind adjusted a Trinity not EPS Regarding spin-off fourth in from me variables the

earnings calls that We detailed including segment anticipated conditions provide financial XXXX accompanied are impact them, the navigate can we the we've during press release that In yesterday, the the market and our in through as throughout year. tables and rate. ability as their to reflects of will on tax confident our much detail details we impacts guidance lower our associated team's provided

fees approximately and $X million including cost, to with $X.XX of range $X.XX. be EPS transaction the of EPS and excluding what between $XX XXXX core be expected associated or spin-off. per professional and transaction The we is consulting expect approximately expect to cost between $X.XX planned We share $X.XX

year. further We grow pricing of provided Group spin-off-related sell able as now pricing will our our deliveries a In in Group, or improve segment lower again business Rail were progress. delivering fleet deliveries levels, railcars expect These some margins reflect beginning to this anticipate We our our fleet achieving part increasing XXXX of costs the wholly-owned will In in agreement we number deliveries efficiencies to higher provide release Group, and Leasing production make initially be most are our a platform. by XX,XXX this yesterday. year. currently than expected, in on better include weak now our our press expect the to deferred railcars to includes decrease to this I provide supply focusing we lease operating of lease to multiyear the a to accompany continuing as year that year. leased unsold year, for updates this delivered from guidance ordered additional railcars a we margins pricing we fleet as XXXX. of XX% to Railcar RIV the lease may our in we railcars on while for capacity the of environment approximately going profit total we commentary Rail the We XXXX. Overall, detailed the

have but lease to slightly compared As expiring improved for mentioned, quarters. their recent generally Eric lower as rates are leases, renewals than

price more closely railcar renew monitoring expect reduced XXXX volume the due the anticipated now into volumes orders. wind and under exchange and towers In wind deliveries are the business. leases volumes Group, the pricing XXXX we our long-term extending we long-term and in reduced new the than Energy have this lower step-down supply more existing contractual railcar very previously reflects XXXX. to lower visibility a long-term in We primarily on near and amendment as in in for term. in revenues contractual delivery agreement Equipment towers profits of The We agreement trend

for business to American long-term as the improve. guidance, more North to the with our grid we replace our structures need utility capacity. good need to aggregates their customers in well electrical in In demand business. and utility and to shoring optimistic bodes grow made Construction Products future towers has new incorporated look sell market not We're have forward now with available wind the businesses. acquisitions for XXXX, about opportunity discussions this about The last Group, continued the structures in We While business. this our our readily were and we year having in

to the on We gain both in federal and Barge increased successfully expect impact of focus at soft the An group momentum XXXX position will this these could of XXXX the levels see due significant spending fruition. full-year we beyond infrastructure state another Inland to as to come ongoing In integrated the year businesses. oversupply projects Group, barges.

in are our There needs. their rationalize contact are recent customers Our regarding expectations to we and in their with operators for has activity space, a been breakeven this barge continue consolidation year as fleets. regular

through XXXX, liability expenses, we costs guidance levels corporate similar have that work legal continue our our we will as product ET remain our Regarding of at Plus to cases. docket assumed in to

in near future the work these we decrease will his in remarks. the through mentioned items that that optimistic are Theis costs as We

from $X.XX Our full $XXX guidance year convertible the includes the current EPS per price. XXXX million of notes dilution stock share on of based

June From million lines, but is Our These payable notes notes conversion, the any in notes the would market of price. $XXX of earnings to expect balance we principal shares. beginning million forcing This fleet in stock be XXXX, this callable may $XXX cash standpoint, of we excludes or from primarily cash also are converted and planned add by approximately total the million outstanding $XXX lease in from value in or year call proceeds premium is manufacturing based yesterday's If secondary by financing, put This and with a from capital remain bondholders payable in Trinity deferred our railcars a the well. closing as or guidance the also assumes expenditure our the on XXXX. a to associated taxes. purchases. new

purchase strategic million $XX a very of a completed we end, year tank price. since attractive fact, at cars In

railcars Some fleet term. off the commercial in for temporarily demand they our quarter, which end the the may are the impact see able and could We not, them will on of type of utilization. lease is car railcars near leased lease. by team We these to first place confident this currently however, have fully be

to taking fleet the between the fleet, anticipate of will certain lease carry platform. We expenditures in RIV will approximately primarily corporate million new wider we owned a number our approximately at fleets and the to and standards occur sales sell planned modifications these placed railcars we modify $XXX to net In railcars anticipate of lease also our railcars XXXX. range lease businesses we now level investment available are in XXXX, and manufactured million the for new for The $XXX customers flammable cars XXXX, a fourth this railcar the additions expect million we to with commodities. partially-owned will and service. million $XXX we modification invest capital In for make $XX good million. and in of on second quarters. regulatory and these investment deferred approximately $XXX by also meet to We're expect and also of into After a originally At owned leased of time, performing tank to our account our profit

number and to several the by expectation forward-looking including, results past, As found have risk actual for the improve among we indicated present from In in our our XX-K. press expectations factors levers performance. operating yesterday, and could disclosed release statements a our factors, differ in others, XXXX be of on may impacted in

on will those out throughout year. the and We seek opportunities execute

to and efficiently quarter a complete possible We fourth transaction year our as are as this execution. hard working expect spin-off

driving teams there mentioned, are this As effort. dedicated Melendy

We and abilities have demonstrated strong to generate of cycles. talent, we economic and that continue value. record over have identify the a performance We've track resources, also execute to to shareholder strategies

operator prepare us will Our the question-and-answer now session. for

We'll Poliniak of take Allison Wells a question from Fargo.

guys. Hi, morning. Good

Morning.

gave quarter. mentioned in you incremental in to the that fleet step-up I remember James, last that had was way you can't guidance. in quantify your incremental prior us Is what there guidance? that weren't lease if the investment number any

$X.XX but it helps the $X.XX we terribly get or give some guidance explain movement moving profit in that specific. to wasn't the some it, the it our $X.XX Allison, of yeah, guidance. investment It We from of before, changing explain the but that material, to did to Quantifying the is this not $X.XX. parts to deferred current wouldn't did within number James.

Got pricing. the you it. on mix operationally anything that margin changes margins is that's know of – terms there at such And rail and cited line I X%, then on in or XXXX? that laying there Is in

those We've ordinary. good of Not a of pretty sense production incorporate necessarily of planning. We out the our always got types things.

XXXX deliveries our right Eric XX% in the As are now. of backlog mentioned,

work have we find out plans. But hard can So, the lines we pretty well. certainly to production laid where our we'll efficiencies in

Thank Great. you.

Thank you.

to Citigroup. move Prashant Rao We'll next of

I the into and question. for to of get have taking where you're from? since just a of given in a you forward that Thanks the of the about even wanted the wondering sort on – work guess to have guys sense from, bigger drawn top-end picture guidance, conservatism James, might market, you I bigger little top-end understand just be that and some bit picture sort come pulling items looking it's like other to morning. that emanating called where sort I Good through of Where how the XXXX? as out, gauge feels able the tax maybe if just thinking you impact but are of

James. this is Prashant, Yeah, Thanks.

last guidance guidance provide of big last for a we always since look As we our four and to time, been lot had each narrow we you we what had months range obviously out time as a there. parts it. out, try and at in guidance put moving We pretty down we tighten it's the

are you where the puts where rate before were the of we same kind change, look alone you at midpoint that we tax at now. If

you the more So, the end got XX%. you same that to up XX% with about just visibility. the from midpoint if tax-effect We've

talked trying looking was end increased end with up, we've and a of this brought at the tight Not bottom others as where about it's a sale certainly car comfortable through guidance of little really to ability at where our So, times, the sit on specific end top range but with time. the are sense the simply we've call of leaders as a reason, the range top guidance, we at a as real But so you business and to and brought with our several the very range our we optimistic before. down we're frequently, bit, our in to we're we midpoint work really tightened give it. as down

seems more a That this comp X,XXX demand up the – a turn sort and there. – acquisition for just railcar some sort week sense. prices is or that on rates We've of (XX:XX) about market opportunities. the work, XX – here? think were of XXXX terms Thanks. for of willing there retrofit an might on cars guess, won makes given the the that continuing XX, secondary (XX:XX) we I even Okay. Are And to at months? and juice opportunities CPC-XXXXs to some there lower we your some railcar out in looking to then question what activity there investment the XXXX with sellers And like as of the be second really market, than small seeing from is comps are attractive attractive DOT-XXXs had maintenance secondary move fleet in that past, I just return acceleration

you take that don't Eric, why one?

Prashant. Yes, Sure.

in are activity We own we more some – secondary in tank bank that. seeing And market secondary you are to the specifically and some cars. have especially seeing that unload around those railcars, cars where looking activity are did market owners they the

buying some think I present will opportunities people. for it

is This James, Prashant.

leadership fleets fleets that a team's of we want those the have us add opportunity well we've platform what to to RIV those and continue able fleet that of gives as to to that with I investors the sense built, Investment opportunities identify lot a as make for good through think partners. our as Railcar Eric's we're Vehicle our

Okay. the very for it. much Thanks Appreciate time.

question of Elkott from Cowen. Matt Our comes next

deployment Thank the – railcar with spin-off. question. you guys I of with my is strategy you exception then, the about are you the company. you leasing. the diversified that, traditionally the question consolidated this for post morning. My for taking becoming know new industrials But TrinityRail maybe done capital Good market to prior

railcar to manufacturing does possibilities manufacturing company, further consolidate railcar going pure-play to market open and go a a the that to leasing we're that or Now new from more up leasing a perspective? back

James, capital Tim about is of what Yeah. spin focus clarity Sure, and going Tim and and Trinity what really said our us and spin-off community terms I Matt. internally, in want are, as forward the investment to being strategies excitement do to to have of are we'll move and I that the focus and our This giving post that now then available we really able process. the echo be with we the with through

the business, talked good rail have to always balance We've the side on going are sheet capacity in about it us. fleet, provides that the opportunities the capital. We have we especially the of lease

lease I continue that on you're with range own. and in that fleets growing maintenance have. talked our manage grow going RIV about our continue think for we're cars may Eric's to hear expanding wanting a We we only our management yet lease also need specific services those of of to but not strategy get partners fleet, we've fleets. we won't focus ourselves really to to others, the where may that – to our with you, as but do, that serve work to wide share we we customers opportunities opportunities about talked clearly be, our

that the there's we're for us excited and able that. able to to do about integrated a opportunities So, going I of model we're to with be range being invest, broad think rail

Thanks you – sense But that, is may renewal the more percentage the the us cyclicality of can mentioned missed you some cars of question And also, James. it, revenue the a coming you sorry in can I inherent if facing of the the for anyway industry. be you of one Great. which given in headwinds Leasing if segment, about give for XXXX? – up and it, have but anyway that

This is James.

it's we've line years. had out in As Eric prior of said, not of what

not tells If abnormal average of about years, you lease three remaining the cars XX% lease, to of about up look at that for average term three-and-a-half is and on an year. come our this to you XX%

on on it's cars have, short-term those some So, leases. which really leases, long-term through been some going have just we of

forecast by So, it's team lease commercial currently tells look lease where and we at the really us our rates opportunities. hurdle (XX:XX) and as with lease what adjustments sees the

there from Of crude-by-rail years, that off the consistent era lease, higher which of is the to equipment coming a is percentage XX% with this XX% previous are energy-related year?

Eric?

leases. longer-term Most Eric. No. of is This There's not. leases those were

pretty experiencing a that. normal on of distribution It's we're terms So, not expirations.

Great. it. Got

And, Matt...

it. much. very Yeah. Appreciate you Thank

Sure.

you. thank Okay,

you. Thank

question is from Our of Long next Justin Stephens.

good and morning. Thanks

Morning.

if margin margins one could X% there the of is you I I And quarterly share segment? year. the wanted X% margin the to any for Group is Is orders Rail today, outlook of the ask today. that has stabilized? taking expected of on pricing just guess, commentary representation another for full you're the the on and, cadence market I'm a curious margins where that the guidance on good

handle in I of terms – James is Why – this first part cadence. the Justin, don't

consistent in year to of quarter we throughout As step-down the the flat at the the the Eric pretty from half, quarter. you fourth see first and roughly the our year. of a the volumes in back first and see generally mentioned, second look are year. half Margins volume we first if But half

based get the and ordinary how downs some with X% on we speak orders maybe but commercial a market can is anything cars delivered, and You things to Eric, side address ups the out cadence may see when overall of wouldn't guidance. the particular looking. you the and of

Sure.

car in capacity pricing the market. terms the still And a excess while railcars, number down of In that railcars side. still new that's idle railcars on there's significant manufacturing with overhang the there's on new year-over-year, come of existing certainly of modestly

to seem like headwinds those overall, as we've So, prices provide have certainly sales prices. mentioned. improving It some does stabilized,

up, so, activity we can lower. And them with there. And to hopefully economic picking we don't go expect some improvements see any

ramp are assess secondly, you guessing I'm due having when decision. this to but with that separate look evolve? is curious be there there you step-up I out. I'm that spin But overhead And a two assuming will details on still that, strategic what companies, worked could could like being associated the helpful. you commentary know provide all costs initial That's great. any on the Okay, could process how are

term. this Justin, get James. too is Yeah, the certainly early in It's deep long Thanks. to

we the are very companies you're the cost but to and Scott the day longer need, and type overlap some costs together and at the looking point, and having early we reduce over But you can to and the businesses. time going both your through course, bit you're In the functions hard thinking phases, looking think with a focused focus, to time. it how teams way at teams, a the focus, of focus I right. have, be think is both about at going put having administrative some structures, we same looking together of needs one, may Tim as term, and step-up the the see, the Antonio spending we the duplication, but of put I a on management I as that. at on level, keen management costs a see in we be we'll the lot corporate

the Okay. time today. Thanks. Appreciate

you. Thank

you. Thank

of Matt move We'll to next Buckingham Research. Brooklier

maybe bit in Thanks, color little terms of are Yeah. of saw provide that how types the a quarter, Can to railcars you and inquiries the composition also of trending and thus you in first and in far good orders, then, quarter? demand of fourth just morning. talk

Eric, to you want take that?

is Sure, Matt. Eric. This

order chemicals of plastics some agricultural as orders and such As markets, growth and refined replacement specifically activity. represented we both fourth then mix diverse mentioned, we several some products. a and needs and seeing are markets, automotive The quarter refined

far the the compared inquiries change has and And thus then there Okay. there when pace first to fourth of quarter? any demand quarter, in been

This Eric again, is Matt.

pleased with and we're early we first the order but so the pleased far. quarter yet, in activity. inquiry with level mentioned, I level As are the early It's the

so encouraged. remain we And

down expense guys in no terms I legal, you James, And being to expectations I relative then, or corporate think you talked – to like XXXX. are expense. But baking think the change Good the year to this legal also you of to hear. talked in your

guess you in in I heard I terms decrease So, the expense if XXXX? corporate what's driving of the correctly,

Yeah.

was read And decrease back level more to and higher incentives, with expenses. earnings costs in a the And where as have year half in place, performance of expect things, we a flat. type we're detail that year generally And that through. relatively goes the we'll point, costs assume we up as your remain performance. legal we're that do to a target working performance-based certainly level you'll the programs that as the seeing To But encouraged of good a cut as the we modest we reduce some and degree. as expenses where some We are You're of some we can doing accelerated departments, the can. the job corporate forecast that opportunities corporate reduce ended the there have, to – we're incentive seeing their hard really we looking the their we functions we costs. folks in certainly had within XX-K, groups, given

Good to time. hear. Appreciate the

you. Thank

Cox And Stifel. we'll of next to move Brady

open. is line Your

from now leverage, similar way asked or the inquiry margins going high-single ask in of think have be sustainable Yeah. do doesn't a benefit of a little talked rail the pricing grow know bit volume pricing a different maybe I to want earlier, the it's going for you operating again to way. it levels that is you're sort to If increase question significant XXXX business to range without more you now, you or the digit to seeing forward? there and on Thanks. a with significantly sort in beyond the about margin. on levels question I first

various which we as at a in volume, volume level, types. get it depends clearly say various points margin yeah, is pricing cycles. is is, for our ordered on which where What we've I specific those of had type important would car cars mid-cycle and supply-demand the and know throughout kind clearly, It's early of margins. of is this this of in you beyond terms forecast know, XXXX the generally James. some at We have type point cars is specific This backlog. to But

longer to to when we is better the So the can then Group runs pricing those opportunity facilities. operate where the in band looking improve our in we have operation and down is certainly And mentioned this broad more changeovers, they Allison Rail you we're and of itself production have, for to that something come margins. long a can. type – we better earlier, efficiencies The our affect have certainly runs your the margins. are, your how you leadership things, plan, able The really have, visibility and we how has

is may to to those years So, going volume be. I be yet but where the despite leadership team are, margins opportunities certainly forecast the what in improve the where out or with future our wouldn't we're level seeking opportunities

on sort are having maybe then spin-off the discussions guys Okay. the some questions Thanks. now. of And and you

about comfortable the fleet probably book-to-value the where adding leverage is you've come like you up to sounds talked and are more is, going of One I lease maybe but to that from the XX% and now topics on up talk the in it's on fleet, know with you leverage owned the Can endpoints have other two maybe wholly between you're to what about you you're XX% those targeting? the where not platform.

Yeah, our on Brady, talked and structure, it's lot of we've fleet. remind the is kind the about We're of would before at those increase lease the you willingness capital spending leverage advisors, the James. certainly still board, looking a our folks. What I to – time with with external certainly

several cash investments had the we the flows the to we've years, had make, Given haven't that needed need. last we've

as the naturally has been grown We've trended kind certainly fleet. we've down higher so, much of And at before. leverage the levels

as those Trinity structure fleet, we both go consider have it's be one Industries ballpark. type up our Trinity, XX% a to will company. that infrastructure at thing and look and leasing company XX% capital to the manufacturing you companies, owned we of is hybrid both partially levered the If in But through

So, leasing a stand-alone company. not it's

we from taking balance about sheet But we're certainly, We credit we blend that think know have capacity. that at look debt. to have that. perspective a So, we and hard how a

sheet and talked a good certainly metrics. pure balance a be doubt in that very and that. team to as the we balance lot some for taking by liquid look about have hard limited And have fleet earlier, at now going the I look and a we're opportunities room think sheet. a we be at Tim growth the don't We without the with leverage lease the on of cash right We'll

you. Thank Okay.

Majors question Bascome Susquehanna. Our of next from is

for you interest consolidated had assume my in a for year taking can debt on Does question XXXX? financing morning. any Thanks your estimate and that expand Yeah. basis you this kind good a expense guidance What's this of that?

as but a convert some This the look of something interest booked together technicalities wouldn't at some talked the When Yeah. I there, provide rate. the notes rate James, that, a about we We they changing We that XX are years in that step-down a put now that are they of through ago. GAAP this because the of call certainly in you can hits terms higher year, how walk with as just like working option the a were there right June is be convertible interest whether decisions there's interest our I call within don't a of repaid go the year offline. that Bascome. gets whole we'll others. June, cash, detail at of board through lot. lot a have and making with that's in and refinancing expense that Whether or

notes from going bit refinance both we capital and and So, cash. if have a to for and with how step-down, those companies we do it's of we how that perspective, those really you call together be what a the and put but we if structure our new

parts moving expense it's in I been. guidance So, a would lot your to some do general interest doesn't there, but in versus say where

I period and the window when started that confirm blackout end. repurchase And prepared you finance share reopens in were when assume I going that that. let January. quarter you through all the at in it when remarks, know appreciate – said believe us part again? I maybe your Could of and you closes your buy

Yeah, Bascome, James. this is

window blackout is blackout begins and after earnings quarter Our on our standard it internally ourselves reopens. put we've end that at

the you exception course remarks. earlier information, if quarter told my the as there's example, for we until has last of obviously mid-December we Now, non-public that spin-off, of weren't buying just in

periods we time have are be standard blacked to reasons there that's earnings. out, other window the So, where but around of

rest completed not year, for in before to there will opportunities buy the spin-off does put the of the some you stock be mean, the that until spin? XQ, restricted or your a being arguably period I

public No, spin-off now. the is Bascome,

So, from stock. preclude counsel that we appropriately not that as yet spin-off if non-public we and the legal as us or disclosed, itself there's public would material But along go back that information. those we we've That's things enter not. decisions visit deem repurchasing may buying with of not type are and

you. Thank

Global is from Our Securities. Seaport next Willard Milby question of

Hey, good morning, everybody.

question of Do from a leased some visibility going the like to come to which that's going those to than a wanted owned whether year? owned visibility are similar Just happen. in cars a sounds a railcars, quarters you've ask year or on as the less to you got sale cars as the to more have than

still and is, in little manufacturing Yeah. been a as newer it We're fleet just It of as had versus our diversification it cars This good mix That's hard. a And we've in of a cars, a that and us helps new relatively cars, maybe line, partners mix investors gives well older time. bit some benefit RIV cars as have that maintain quite portfolios is the and in our few well. diversification cars the those the of process James. generally together. cars off the putting of fleet the months, that is

or we guidance. the the providing a type see a that So, mix, have really of little good makes And Willard, that we is have lean is don't a don't type harder us a because together one, that revenues but we the of forecast, put one which why don't to Until your generally sale, good portfolio transacted and way car question, other, sense. breakdown. don't we've you it's

Right.

to cars XXXX at having fleet? the XXXX? in prep expense expected or we've Is also expect into sounds moving of new continue elevated tank off got lease you to some here that And of like for are tied to or leased Okay. experiencing retrofits in fleet, when to roll the efforts, And sales on some XXXX XXXX. kind some from looking here operating profitability expenses expenses something to also, regards maybe you that renewal in all And the XXXX? is customers to

James. is this Willard,

Let me invested modifications seeing will clarify capital then one about kind in the what The for expenditures not that's piece, of modifications. be then capital and the have I'll depreciation. the you'll expense, we're let in talk and majority Eric of market

be figure capital. million So, I $XX will that the provided, the

beyond modifying what and that's seeing a doesn't for we're fleet, especially much it So, we respect, cars about XXXX. But, external as income. service in kind operating we're modifying can you when affect Eric, does that income maybe customers, our of enhance we're talk operating own provide that

Sure.

intend those the throughout In periods. that we it of relatively cars. timing continue A be to of smooth XXXX modify terms modifications, those events to cars It we're required compliance the for time those will should modify around over in of them. periods and to lot

right And so, that's expectation our now.

Thanks right. me. it the That's All time. for from

Thank you.

And Capital Markets. we question KeyBanc have Steve of from a Barger

guys. morning, Good Hey.

Morning.

basis percentage percentage and Trinity's the about maybe infrastructure give businesses? us business Can cash what flow a for you capital free represents a some working color of on as talk those on normalized normalized of revenue

is this Steve, James. Yeah.

of even you will would that degree. of type are rail-related not to composition about primarily get of out businesses wouldn't our Industries. the really help specifically real that into statistics businesses in talked stay I generally will and detail I you remind see yet. with also we've You'll XX-K some that some Trinity we've infrastructure that where, laid which though businesses those going

as So, more able detail for the But lot really of as detail A be months in down. broad we'll strokes. to that in process, we that, XX-K the we the that on break you. get available provide further coming is we'll provide in of type again,

talked the sell capacity. about towers talk to characterize environment how ability just you with wind inquiry for you the you And that business? more or would Okay. Can available demand about there activity having the

Bill?

really of tower spotty. demand would Yeah. the kind as Steve, characterize I wind

there in So, point this three have drabs. and two out are time, it's never bigger orders There come going they potential or of and just but orders you're in a potential orders. slew dribs at just long to

areas acquisition? strategy one organically And more focus the just about similar try business deployment for growth infrastructure Rail business, on the it. any just Got capital from information broad the or for either I'll to strokes

think broad. James pretty again, I be is This Steve. Again, it'd

a we've years, ability our the that to I itself well infrastructure about broad. on build as will current is as be platforms create mean, talked infrastructure platforms over our as in think is new I the business pretty potentially about of of not. that we're and We've type things. talked term we're construction in, very covers intentional in that's broad it pretty which energy industries, a lot those some the different lot businesses, of a which the sector,

wouldn't the to specific best business have the between team going get rather competing dedicated like uses going infrastructure But side. good rail on dedicated that's just kind precise you're the I very what to the a is to Rail and answered real the we side, yet. capital focus So, of there with allocated able be be than with thing and

capital, we I'd is that we So, allocate strategic stay it is that broad business. what's – vision of for but about thoughts some which the have where the may and very pretty to encouraging tuned say,

this Tim. is And

of as about. soon looking He's and have they arrives, meetings put sitting various a we heard that talked Antonio the strategic As board have. he'll then together the been will and given presentations the and that team in be they alternatives at lot a

he working So, up It's him. things job to matter on it's a him transitioning here can new where get full-time just out basis. of not to of his then and current news a

happy call question-and-answer return conclude this the be I'd the session. Peck. to And to does Gail

XXX-XXX-XXXX. morning. will Eastern is available with joining through the be next X. midnight call. concludes on conference after replay be access Leo. replay Thank conference look you our www.trin.net. at A The call on March That visiting Also, you, available will today's forward We Thank on again the Standard of you us located for this to X:XX Time today's number website call.

conclude conference fourth year results does and Industries' quarter call. full Trinity This

day. now lines a have may You your everyone, disconnect great and,