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What changed in TRINITY INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TRINITY INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+279 added−265 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in TRINITY INDUSTRIES INC's 2024 10-K

279 paragraphs added · 265 removed · 212 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

49 edited+14 added−8 removed25 unchanged
Biggest changeThis level of engagement and commitment is reflected in the ISO 45001 (occupational health and safety) certification of our railcar manufacturing and maintenance facilities, as well as our corporate headquarters. Our goal is to add value to the communities in which we live and work, strengthening our relationships and leveraging our partnerships to amplify our impact.
Biggest changeWe actively engage stakeholders across our environmental, health, and safety initiatives to continually improve processes and performance as we operate our businesses with a goal of zero injuries and incidents. This level of engagement and commitment is reflected in the ISO 45001 (occupational health and safety) certification of our railcar manufacturing and maintenance facilities, as well as our corporate headquarters.
As part of our sustainability efforts, TILC issued its Green Financing Framework in January 2021 supported by a second-party opinion from Sustainalytics, a Morningstar Company and a globally-recognized provider of environmental, social, and governance research, ratings, and data.
Green Financing Framework . As part of our sustainability efforts, TILC issued its Green Financing Framework in January 2021 supported by a second-party opinion from Sustainalytics, a Morningstar Company and a globally-recognized provider of environmental, social, and governance research, ratings, and data.
These companies operate in various markets including refined products and chemicals, energy, agriculture, construction and metals, and consumer products. Substantially all of the railcars in our lease fleet were manufactured by our Rail Products Group. The terms of our railcar leases generally provide for fixed monthly rentals that vary from one to ten years.
These companies operate in various markets, including refined products and chemicals, energy, agriculture, construction and metals, and consumer products. Substantially all of the railcars in our lease fleet were manufactured by our Rail Products Group. The terms of our railcar leases generally provide for fixed monthly rentals that vary from one year to ten years.
Ewing has served as Executive Vice President and Chief Legal Officer since 2023, having previously served as Vice President and Associate General Counsel from 2020 to 2023. He joined the Company in 2016 as Associate General Counsel. Prior to joining Trinity, Mr. Ewing was an attorney with the law firm of Haynes and Boone, LLP from 2008 to 2015. Mr.
Ewing has served as Executive Vice President and Chief Legal Officer since 2023, having previously served as Vice President and Associate General Counsel from 2020 to 2023. He joined the Company in 2016 as Associate General Counsel. Prior to joining Trinity, Mr. Ewing was an attorney with the law firm of Haynes and Boone, LLP from 2008 to 2015. Ms.
Our rail platform offers a complete portfolio of railcar solutions to our customers as summarized below: Commercial End Markets & Commodities Refined Products & Chemicals Energy Agriculture Construction & Metals Consumer Products Covered Hopper Cars Plastics Industrial Sand Grain Products, Dry Fertilizer, Flour, Starch Cement, Construction Materials, Lumber Open Hopper & Gondola Cars Coal Scrap Metal, Aggregates, Finished Steel Other Freight Cars Other Chemicals Food Products Lumber, Steel and Metals, Cement Autos, Paper, Intermodal Non-Pressure Tank Cars Chemicals, Petroleum Products Crude Oil, Biofuels Food Products, Grain Products Aggregates (Clay Slurry) Pressure Tank Cars Liquified Gases, Chemicals, Petroleum Products Fertilizer Railcar Leasing and Management Services Group .
Our platform offers a complete portfolio of railcar solutions to our customers as summarized below: Commercial End Markets & Commodities Refined Products & Chemicals Energy Agriculture Construction & Metals Consumer Products Covered Hopper Cars Plastics Industrial Sand Grain Products, Dry Fertilizer, Flour, Starch Cement, Construction Materials, Lumber Open Hopper & Gondola Cars Coal Scrap Metal, Aggregates, Finished Steel Other Freight Cars Other Chemicals Food Products Lumber, Steel and Metals, Cement Autos, Paper, Intermodal Non-Pressure Tank Cars Chemicals, Petroleum Products Crude Oil, Biofuels Food Products, Grain Products Aggregates (Clay Slurry) Pressure Tank Cars Liquified Gases, Chemicals, Petroleum Products Fertilizer Railcar Leasing and Services Group .
Reportable Segments Railcar Leasing and Management Services Group Rail Products Group 5 Table of Contents Business Overview and Current Business Strategy Our purpose is delivering goods for the good of all by being a premier provider of railcar products and services.
Reportable Segments Railcar Leasing and Services Group Rail Products Group 5 Table of Contents Business Overview and Current Business Strategy Our purpose is delivering goods for the good of all by being a premier provider of railcar products and services.
We are committed to contributing to a more resource-efficient economy and embedding climate change mitigation into our business strategy to help confront challenges such as energy management, fuel economy and efficiency, and materials sourcing.
We are committed to contributing to a more resource-efficient economy and embedding climate change mitigation into our business strategy to help confront challenges such as energy management, fuel economy and efficiency, and materials sourcing and resiliency.
The contents of our website are not intended to be incorporated by reference into this report or in any other report or document we file and any reference to our website is intended to be an inactive textual reference only. 12 Table of Contents
The contents of our website are not intended to be incorporated by reference into this report or into any other report or document we file and any reference to our website is intended to be an inactive textual reference only. 12 Table of Contents
We believe we are a leader in the rail industry digital transformation by providing digital and terminal management services designed to increase the efficiency and visibility of the supply chain, while leveraging data, insights, and analytics to make decisions that improve operations and reduce costs. The railcars in our lease fleet are leased to industrial shippers and railroads.
We believe we are a leader in the rail industry digital transformation by providing digital and terminal management services designed to increase the efficiency and visibility of the supply chain, while leveraging data, insights, and analytics to make decisions that improve operations and reduce costs. 6 Table of Contents The railcars in our lease fleet are leased to industrial shippers and railroads.
We continuously look for ways to improve our governance practices with the goal of promoting the long-term interests of stakeholders, strengthening accountability, and inspiring trust. 10 Table of Contents Environmental Stewardship. We take our commitment to reducing our own environmental impact seriously, as we recognize climate change is a challenge facing our business, industry, and communities today.
We continuously look for ways to improve our governance practices with the goal of promoting the long-term interests of stakeholders, strengthening accountability, and inspiring trust. Environmental Stewardship. We take our commitment to reducing our own environmental impact seriously, as we recognize climate change is a challenge facing our business, industry, and communities today.
Our Railcar Leasing and Management Services Group ("Leasing Group") is a leading provider in North America of comprehensive railcar industry services. Through wholly-owned subsidiaries, including Trinity Industries Leasing Company ("TILC"), and partially-owned subsidiaries, TRIP Rail Holdings LLC (“TRIP Holdings”) and RIV 2013 Rail Holdings LLC ("RIV 2013"), we primarily offer operating leases for freight and tank railcars.
Our Railcar Leasing and Services Group ("Leasing Group") is a leading provider in North America of comprehensive railcar industry services. Through wholly-owned subsidiaries, including Trinity Industries Leasing Company ("TILC"), and partially-owned subsidiaries, including TRIP Rail Holdings LLC (“TRIP Holdings”) and RIV 2013 Rail Holdings LLC ("RIV 2013"), we primarily offer full-service operating leases for freight and tank railcars.
The principal material used in railcar manufacturing is steel. During 2023, the supply of steel was sufficient to support our manufacturing requirements. Steel prices are subject to volatility and are a major component of our cost of revenues.
The principal material used in railcar manufacturing is steel. During 2024, the supply of steel was sufficient to support our manufacturing requirements. Steel prices are subject to volatility and are a major component of our cost of revenues.
He served as Executive Vice President and Chief Administrative Officer for the Company’s rail businesses from 2016 to 2018, following service as Executive Vice President and Chief Financial Officer for the rail businesses from 2012 to 2016. He joined the Company in 1995. Mr.
He served as the Chief Commercial Officer for the Company’s rail businesses from 2018 to 2019. He served as Executive Vice President and Chief Administrative Officer for the Company’s rail businesses from 2016 to 2018, following service as Executive Vice President and Chief Financial Officer for the rail businesses from 2012 to 2016. He joined the Company in 1995. Mr.
The Green Financing Framework enables Trinity’s leasing company to issue green financing instruments, including green non-recourse bonds and green loans, supported by green eligible railcar assets. Under the existing framework, TILC has over $4 billion of outstanding railcar-related debt that qualifies for the Green Financing designation. 11 Table of Contents Governmental Regulation. Railcar Industry.
The Green Financing Framework enables Trinity’s leasing company to issue green financing instruments, including green non-recourse bonds and green loans, supported by green eligible railcar assets. Under the existing framework, TILC has over $4 billion of outstanding railcar-related debt that qualifies for the Green Financing designation. Governmental Regulation. Railcar Industry.
Through wholly-owned subsidiaries with facilities in the U.S. and Mexico, our Rail Products Group is a leading manufa cturer of freight and tank railcars in North America used for transporting a wide variety of liquids, gases, and dry cargo.
Through wholly-owned subsidiaries with facilities in the U.S. and Mexico, our Rail Products Group is a leading manufa cturer of freight and tank railcars in North America used for transporting a wide variety of liquids, gases, and dry car go.
(1) Data presented in this chart includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements, which totaled 109,295 railcars as of December 31, 2023. 7 Table of Contents Rail Products Group .
(1) Data presented in this chart includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements, which totaled 109,635 railcars as of December 31, 2024. 7 Table of Contents Rail Products Group .
We are committed to promoting human rights and strive to ensure that the products and services provided by the Company and our third-party business partners are ethically sourced and do not breach human rights laws in countries in which they originate nor the internationally recognized human rights framed under the Universal Declaration of Human Rights and the relevant sections of the UN Guiding Principles on Business and Human Rights. 9 Table of Contents Information about our Executive Officers.
We are committed to promoting human rights and strive to ensure that the products and services provided by the Company and our third-party business partners are ethically sourced and do not breach human rights laws in countries in which they originate nor the internationally recognized human rights framed under the Universal Declaration of Human Rights and the relevant sections of the UN Guiding Principles on Business and Human Rights.
We recognize that further integrating the key principles of sustainability, including environmental stewardship, safety and quality assurance, corporate social responsibility, governance, and diversity, equity, and inclusion, are important to enhancing the Company’s long-term value. We strive to employ company resources in ways that make positive contributions to our stakeholders and the communities in which we operate.
We recognize that further integrating the key principles of sustainability, including environmental stewardship, safety and quality assurance, corporate social responsibility, our employees' health and well-being, and proactive governance of each, are important to enhancing the Company’s long-term value. We strive to employ company resources in ways that make positive contributions to our stakeholders and the communities in which we operate.
We offer a full range of services to support the maintenance needs of our leased railcar fleet and our customers' railcars. Our flexible solutions include field inspections and comprehensive compliance testing; standard repairs and maintenance; and specialized cleaning, inspection, and testing at multiple facilities in the U.S.
We offer a full range of services to support the maintenance needs of our leased railcar fleet and our customers' railcars. Our flexible solutions include field inspections and comprehensive compliance testing; standard repairs and maintenance; and specialized cleaning, inspection, and testing at multiple facilities in the U.S. We provide modification capabilities and assist in transitioning railcars to new industry standards.
Mitchell has served as Executive Vice President, Leasing and Services since January 2024. He served as Executive Vice President and Chief Commercial Officer from 2020 to 2023, having served as Chief Commercial Officer of TrinityRail since 2019. In 2018, he was named Chairman of Trinity Highway Products and Trinity Logistics.
He served as Executive Vice President and Chief Commercial Officer from 2020 to 2023, having served as Chief Commercial Officer of TrinityRail since 2019. In 2018, he was named Chairman of Trinity Highway Products and Trinity Logistics.
The Finance and Risk Committee receives and oversees environmental, health and safety reporting and has the responsibility to review and assess risk exposure related to the Company's operations, including safety, environmental, financial, contingent liabilities, and other risks material to the Company.
The Finance and Risk Committee receives and oversees environmental, health, and safety reporting and has the responsibility to review and assess risk exposure related to the Company's operations, including safety, environmental, financial, contingent liabilities, and other risks material to the Company. The Audit Committee oversees the Company’s policies and procedures relating to risk assessment, management, and mitigation.
Environmental operating permits are, or may be, required for our operations under these laws and regulations. These operating permits are subject to modification, renewal, and revocation. We regularly monitor and review our operations, procedures, and policies for compliance with our operating permits and related laws and regulations.
These operating permits are subject to modification, renewal, and revocation. We regularly monitor and review our operations, procedures, and policies for compliance with our operating permits and related laws and regulations.
Railcars under management, including those owned by third-party investors, totaled 142,300 railcars. 6 Table of Contents Lease Fleet Diversification The following charts provide additional information with respect to the number of railcars in the Company's lease fleet.
Railcars under management, including those owned by third-party investors, totaled 143,865 railcars. Lease Fleet Diversification The following charts provide additional information with respect to the number of railcars in the Company's lease fleet.
We strive to attract and retain a diverse and empowered workforce. Our priorities include fostering an inclusive and collaborative workplace, promoting opportunities for professional development, improving the well-being of our employees and other stakeholders, and contributing to the communities in which we operate. Governance . Our goal is to promote the long-term interests of stakeholders, strengthen accountability, and inspire trust.
Our priorities include fostering an inclusive and collaborative workplace, promoting opportunities for professional development, improving the health and well-being of our employees and other stakeholders, and contributing to the communities in which we operate. 10 Table of Contents Governance . Our goal is to promote the long-term interests of stakeholders, strengthen accountability, and inspire trust.
We are committed to respecting human rights throughout all our operations, and seek to provide respect, dignity, and all basic needs to employees and contractors.
We are committed to respecting human rights throughout all our operations, and seek to provide respect, dignity, and fair wages for our employees and contractors.
As of December 31, 2023, the lease fleet of our subsidiaries included 109,295 railcars that were 97.5% utilized, of which 106,800 railcars were owned by TILC or its affiliates and 2,495 railcars were under leased-in arrangements and are not reflected in the property, plant, and equipment amounts reported on our Consolidated Balance Sheets.
As of December 31, 2024, the lease fleet of our subsidiaries included 109,635 railcars that were 97.0% utilized, of which 107,395 railcars were owned by TILC or its affiliates and 2,240 railcars were under leased-in arrangements and are not reflected in the property, plant, and equipment amounts reported on our Consolidated Balance Sheets.
We hold patents of varying duration for use in our manufacture of railcars and components. We believe patents offer a marketing advantage in certain circumstances. No material revenues are received from the licensing of these patents. Marketing.
We compete in the North American market primarily against four major railcar manufacturers. We hold patents of varying duration for use in our manufacture of railcars and components. We believe patents offer a marketing advantage in certain circumstances. No material revenues are received from the licensing of these patents. Marketing.
We are subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to the release or discharge of materials into the environment; the management, use, processing, handling, storage, transport, and disposal of hazardous and non-hazardous waste and materials; and other activities relating to the protection of human health, natural resources, and the environment.
We are subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to the release or discharge of materials into the environment; the management, use, processing, handling, storage, transport, and disposal of hazardous and non-hazardous waste and materials; and other activities relating to the protection of human health, natural resources, and the environment. 11 Table of Contents Environmental operating permits are, or may be, required for our operations under these laws and regulations.
All such agencies and authorities promulgate rules, regulations, specifications or operating standards affecting railcar design, configuration, and mechanics; maintenance; and rail-related safety standards for railroad equipment, tracks, and operations, including the packaging and transportation of hazardous or toxic materials. We believe that our product designs and operations are in compliance with these specifications, standards, and regulations applicable to our business.
All such agencies and authorities promulgate rules, regulations, specifications or operating standards affecting railcar design, configuration, and mechanics; maintenance; and rail-related safety standards for railroad equipment, tracks, and operations, including the packaging and transportation of hazardous or toxic materials.
We aim to operate our business in a manner that minimizes the impact on natural resources and the environment, and have certified all of our railcar manufacturing and maintenance facilities, as well as our corporate headquarters, to the ISO 14001 (environmental management) standard. We believe railcars are a more environmentally-friendly way to fuel the North American supply chain.
We aim to operate our business in a manner that minimizes the impact on natural resources and the environment, and have certified all of our railcar manufacturing and maintenance facilities in the U.S. and Mexico, as well as our corporate headquarters, to the ISO 14001 (environmental management) standard.
(“Caterpillar”), a manufacturer of construction and mining equipment, industrial gas turbines, and diesel-electric locomotives. From 2017 until her retirement from Caterpillar in 2020, she served as Vice President of Caterpillar’s Surface Mining and Technology Division. From 2014 to 2017, she was Chief Technology Officer and Vice President of Caterpillar’s Innovation and Technology Development Division. Mr.
Prior to her employment with the Company, from 2002 to 2020, she served in a variety of positions with Caterpillar, Inc. (“Caterpillar”), a manufacturer of construction and mining equipment, industrial gas turbines, and diesel-electric locomotives. From 2017 until her retirement from Caterpillar in 2020, she served as Vice President of Caterpillar’s Surface Mining and Technology Division.
We seek to protect the well-being of our employees through comprehensive health and safety policies and procedures that include the identification and mitigation of health and safety risks, operations management, health and safety training, emergency preparedness, performance auditing, program certification, and improvement targets. Our Occupational Health and Safety system includes robust protocols and procedures that extend to employees and suppliers.
We are committed to providing a safe and healthy work environment for all employees. We seek to protect the well-being of our employees through comprehensive health and safety policies and procedures that include the identification and mitigation of health and safety risks, operations management, health and safety training, emergency preparedness, performance auditing, program certification, and improvement targets.
Additional information on our human capital programs and initiatives is included in our Corporate Social Responsibility Report, which is available on our website. Information contained on our website is not included in, or incorporated by reference into, this Annual Report on Form 10-K. Safety. We are committed to providing a safe and healthy work environment for all employees.
Additional information on our human capital programs and initiatives is included in our Interim Corporate Social Responsibility Report, which is available on our website. Information contained on our website is not included in, or incorporated by reference into, this Annual Report on Form 10-K. 8 Table of Contents Safety.
We continuously grow and enhance our product and service offerings to optimize the ownership and use of railcars and improve our customers' logistics operations. We coordinate sales and marketing activities under the TrinityRail platform, thereby providing a single point of contact for railroads, shippers, and third-party leasing companies seeking rail equipment and services.
We continuously grow and enhance our product and service offerings to optimize the ownership and use of railcars and improve our customers' logistics operations. We coordinate sales and marketing activities for our railcar leasing, manufacturing, and maintenance services under the TrinityRail platform.
The following table presents the approximate headcount breakdown of employees by reportable segment as of December 31, 2023: Railcar Leasing and Management Services Group 290 Rail Products Group 8,540 Corporate and Enterprise Support 650 9,480 As of December 31, 2023, approximately 2,650 employees were employed in the U.S. and 6,830 were employed in Mexico.
The following table presents the approximate headcount breakdown of employees by reportable segment as of December 31, 2024: Railcar Leasing and Services Group 1,685 Rail Products Group 5,040 Corporate and Enterprise Support 655 7,380 As of December 31, 2024, approximately 2,890 employees were employed in the U.S. and 4,490 were employed in Mexico.
As a result of disruptions in the global supply chain, we have continued to experience shortages of materials used to manufacture or repair certain railcar types, as well as disruptions in the transportation network, which has impacted our ability to timely deliver these railcars to our customers.
As a result of disruptions in the global supply chain, we have, from time to time, experienced shortages of materials used to manufacture or repair certain railcar types. Such challenges could negatively impact our operations or our ability to timely deliver railcars to our customers.
All of our railcar manufacturing and maintenance facilities, as well as our corporate headquarters, are certified to the ISO 45001 (occupational health and safety) and ISO 14001 (environmental management) standards. Additionally, we are a certified partner through the American Chemistry Council’s Responsible Care® Management System, which guides the continual improvement of our environmental, health, and safety practices and performance.
Additionally, we are a certified partner through the American Chemistry Council’s Responsible Care® Management System, which guides the continual improvement of our environmental, health, and safety practices and performance. Workforce Talent and Diversity.
Workforce Talent and Diversity. We are committed to attracting and retaining highly skilled and diverse employees and are proud that our workforce is made up of talented people from a variety of backgrounds.
We are committed to attracting and retaining highly skilled and diverse employees and are proud that our workforce is made up of talented people from a variety of backgrounds. We strive to uphold this commitment throughout the Company, including through all stages of our human resources process, from recruitment and hiring to talent retention.
Occupational Safety and Health Administration and Similar Regulations. Our operations are subject to regulation of health and safety matters by the U.S. Occupational Safety and Health Administration ("OSHA") and the Secretaria del Trabajo y Prevision Social ("STPS") in Mexico.
Our operations are subject to regulation of health and safety matters by the U.S. Occupational Safety and Health Administration ("OSHA") and the Secretaria del Trabajo y Prevision Social ("STPS") in Mexico. We believe that we employ appropriate precautions to protect our employees and others from workplace injuries and harmful exposure to materials handled and managed at our facilities.
Marchetto has served as Executive Vice President and Chief Financial Officer since 2020. He served as Senior Vice President and Group President of TrinityRail from 2019 until his appointment as Chief Financial Officer. He served as the Chief Commercial Officer for the Company’s rail businesses from 2018 to 2019.
From 2014 to 2017, she was Chief Technology Officer and Vice President of Caterpillar’s Innovation and Technology Development Division. 9 Table of Contents Mr. Marchetto has served as Executive Vice President and Chief Financial Officer since 2020. He served as Senior Vice President and Group President of TrinityRail from 2019 until his appointment as Chief Financial Officer.
We compete in the North American full-service leasing market primarily against five major railcar lessors, as well as numerous smaller lessors. We serve our customers predominantly through full-service leases and compete primarily on the basis of the quality and craftsmanship of our railcars, competitive pricing, and our ability to provide an outstanding customer experience.
We compete primarily on the basis of the quality and craftsmanship of our railcars, competitive pricing, and our ability to provide an outstanding customer experience.
Additionally, our Rail Products Group offers a sustainable railcar conversion program whereby certain tank cars and freight cars are converted or upgraded to better meet changing market demands. We believe our Rail Products Group's diversified manufacturing capabilities enable us to capitalize on changing industry trends and developing opportunities in various markets.
Additionally, our Rail Products Group offers a sustainable railcar conversion program whereby certain tank cars and freight cars are converted or upgraded to better meet changing market demands. Our parts and components business provides complementary rail-related offerings, including manufacturing and distributing new, refurbished, and replacement parts.
The TrinityRail platform provides railcar leasing and management services; railcar manufacturing, maintenance and modifications; and other railcar logistics products and services. Trinity was incorporated in 1933 and became a Delaware corporation in 1987. We are headquartered in Dallas, Texas, and our principal executive offices are located at 14221 N. Dallas Parkway, Suite 1100, Dallas, TX 75254-2957.
Our platform also includes the brands of RSI Logistics, a provider of software and logistics solutions, and Holden America, a supplier of railcar parts and components. Our platform provides railcar leasing and management services; railcar manufacturing; railcar maintenance and modifications; and other railcar logistics products and services. Trinity was incorporated in 1933 and became a Delaware corporation in 1987.
While we believe these challenges will be resolved over time, they may persist over the foreseeable future, which could continue to impact our operations. We will continue to monitor the situation and take appropriate steps within our control to mitigate the potential impacts on our production schedules and delivery timelines. 8 Table of Contents Human Capital.
We actively monitor our supply chain and take appropriate steps within our control to mitigate the potential impacts on our production schedules and delivery timelines. Human Capital.
Our customers include railroads, leasing companies, and industrial shippers of products in various markets, such as refined products and chemicals, energy, agriculture, construction and metals, and consumer products. We compete in the North American market primarily against four major railcar manufacturers and numerous maintenance services providers.
We believe our Rail Products Group's diversified manufacturing capabilities enable us to capitalize on changing industry trends and developing opportunities in various markets. Our customers include railroads, leasing companies, and industrial shippers of products in various markets, such as refined products and chemicals, energy, agriculture, construction and metals, and consumer products.
Our telephone number is 214-631-4420, and our Internet website address is www.trin.net . Unless otherwise stated, any reference to income statement items in this Annual Report on Form 10-K (the "Form 10-K") refers to results from continuing operations. Reportable Segments We report our operating results in two reportable segments.
Unless otherwise stated, any reference to income statement items in this Annual Report on Form 10-K (the "Form 10-K") refers to results from continuing operations. Reportable Segments Effective January 1, 2024, the Company modified its organizational structure to better leverage our maintenance services capabilities to support lease fleet optimization and to grow our services and parts businesses.
U.S. freight railroads produce far fewer greenhouse gas emissions than certain other modes of commercial transportation, such as trucks. We strive to responsibly support products' utility throughout their lifecycle, including maintenance to extend life, and recycling up to 95% of the railcar at the end of its useful life.
We strive to responsibly support our products' utility throughout their lifecycle, including maintenance to extend life, and recycling up to 95% of the railcar at the end of its useful life. Additionally, our sustainable railcar conversion program repurposes and reuses railcar materials and components to bring renewed life to existing assets. Social Responsibility.
Savage has served as the Company’s Chief Executive Officer and President since 2020, and has served as a member of the Company’s Board of Directors since 2018. Prior to her employment with the Company, from 2002 to 2020, she served in a variety of positions with Caterpillar, Inc.
Mitchell 59 Executive Vice President, Leasing and Services 2007 Kevin Poet 58 Executive Vice President, Operations and Support Services 2020 Ms. Savage has served as the Company’s Chief Executive Officer and President since 2020, and has served as a member of the Company’s Board of Directors since 2018.
The following table sets forth the names and ages of all of our executive officers, positions and offices presently held by them, and the year each person first became an officer. All officer terms expire in May 2024. Name Age Office Officer Since E. Jean Savage 60 Chief Executive Officer and President 2020 Eric R.
These commitments are formalized and enforced through our Labor and Human Rights Policy, as well as our Code of Business Conduct and Ethics. Information about our Executive Officers. The following table sets forth the names and ages of all of our executive officers, positions and offices presently held by them, and the year each person first became an officer.
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Additionally, we provide modification capabilities and assist in transitioning railcars to new industry standards. Our parts business provides complementary rail-related offerings, including manufacturing and distributing new, refurbished, and replacement parts. We believe that our investments in our maintenance services and parts and components businesses extend and enhance our ability to serve our lease fleet and our customers.
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We are headquartered in Dallas, Texas, and our principal executive offices are located at 14221 N. Dallas Parkway, Suite 1100, Dallas, TX 75254-2957. Our telephone number is 214-631-4420, and our Internet website address is www.trin.net .
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This commitment to diversity, equity, and inclusion as a driver of our long-term success is one that we strive to uphold throughout the Company, including through all stages of our human resources process, from recruitment and hiring to talent retention.
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The new structure resulted in a change to our reportable segments beginning in 2024. In connection with this organizational update, we aligned the maintenance services business, which was previously reported in the Rail Products Group, to now be presented within our leasing business.
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Marchetto 54 Executive Vice President and Chief Financial Officer 2001 Scott M. Ewing 51 Executive Vice President and Chief Legal Officer 2020 Steven L. McDowell 62 Vice President and Chief Accounting Officer 2013 Gregory B. Mitchell 58 Executive Vice President, Leasing and Services 2007 Kevin Poet 57 Executive Vice President, Operations and Support Services 2020 Ms.
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Consequently, beginning January 1, 2024, we report our operating results in two reportable segments: (1) the Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) the Rail Products Group.
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McDowell has served as Vice President and Chief Accounting Officer since 2018. He joined the Company in 2013 as Vice President and Chief Audit Executive and was named Vice President and Chief Compliance Officer in 2017.
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Our platform also includes the brands of RSI Logistics, a provider of software and logistics solutions, and Holden America, a supplier of railcar parts and components. The TrinityRail platform serves as a single point of contact for railroads, shippers, and third-party leasing companies seeking rail equipment and services.
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Prior to joining Trinity, he worked for Dean Foods from 2007 to 2013, where he held a variety of management positions and most recently served as Vice President, Internal Audit and Risk Management. Prior to his tenure at Dean Foods, he served as Vice President – Internal Audit at Centex Corporation. Mr.
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We believe that our investment in our maintenance services capabilities extends and enhances our ability to serve our lease fleet and our customers. We compete in the North American market against numerous maintenance services providers.
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Additionally, our sustainable railcar conversion program repurposes and reuses railcar materials and components to bring renewed life to existing assets. Social Responsibility. We actively engage stakeholders across our environmental, health, and safety initiatives to continually improve processes and performance as we operate our businesses with a goal of zero injuries and incidents.
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We compete in the North American full-service leasing market primarily against five major railcar lessors, as well as numerous smaller lessors.
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The Audit Committee oversees the Company’s policies and procedures relating to risk assessment, management, and mitigation, and the Human Resources Committee oversees diversity, equity, and inclusion priorities. Green Financing Framework .
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We serve our customers predominantly through full-service leases; however, a small portion of our lease fleet operates on per diem leases that earn usage-based variable lease payments or on net leases under which the lessee assumes responsibility for maintenance of the railcars.
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We believe that we employ appropriate precautions to protect our employees and others from workplace injuries and harmful exposure to materials handled and managed at our facilities.
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Our Occupational Health and Safety system includes robust protocols and procedures that extend to employees and suppliers. All of our railcar manufacturing and maintenance facilities in the U.S. and Mexico, as well as our corporate headquarters, are certified to the ISO 45001 (occupational health and safety) and ISO 14001 (environmental management) standards.
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All officer terms expire in May 2025. Name Age Office Officer Since E. Jean Savage 61 Chief Executive Officer and President 2020 Eric R. Marchetto 55 Executive Vice President and Chief Financial Officer 2001 Scott M. Ewing 52 Executive Vice President and Chief Legal Officer 2020 Christina N. Maldonado 42 Vice President and Chief Accounting Officer 2024 Gregory B.
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Maldonado has served as Vice President and Chief Accounting Officer since 2024, having previously served as Corporate Controller from 2018 to 2024. Prior to joining Trinity in 2018, she held various accounting and financial reporting leadership roles at Dean Foods Company and GameStop Corp. Ms.
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Maldonado began her career in the audit practice of Deloitte & Touche LLP and is a licensed certified public accountant in the State of Texas. Mr. Mitchell has served as Executive Vice President, Leasing and Services since January 2024.
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We believe railcars are a more environmentally-friendly way to fuel the North American supply chain that will continue to play a critical role in an energy transition economy. U.S. freight railroads produce far fewer greenhouse gas emissions than certain other modes of commercial transportation, such as trucks.
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Our goal is to add value to the communities in which we live and work, strengthening our relationships and leveraging our partnerships to amplify our impact. We strive to attract and retain a diverse and empowered workforce.
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We believe that our product designs and operations are in compliance with these specifications, standards, and regulations applicable to our business and that our processes and controls adequately mitigate the risk that potential non-compliance could result in a material adverse effect on our operations of financial condition. Occupational Safety and Health Administration and Similar Regulations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

30 edited+2 added−4 removed141 unchanged
Biggest changeOur manufacturing operations partially depend on our ability to obtain timely deliveries of materials in acceptable quantities and quality from our suppliers. Certain materials for our products are currently available from a limited number of suppliers and, as a result, we may have limited control over pricing, availability, and delivery schedules.
Biggest changeCertain materials for our products are currently available from a limited number of suppliers and, as a result, we may have limited control over pricing, availability, and delivery schedules. The inability to procure a sufficient quantity of materials on a timely basis could create disruptions in our production and result in delays while we attempt to engage alternative suppliers.
We face risks related to cybersecurity attacks and other breaches of our systems and information technology. We rely on the proper functioning and availability of our information technology systems, some of which are dependent on services provided by third parties, in operating our business.
We face risks related to cybersecurity attacks and other breaches of our information systems and technology. We rely on the proper functioning and availability of our information technology systems, some of which are dependent on services provided by third parties, in operating our business.
Similar risks may exist with respect to our suppliers. 19 Table of Contents We may be unable to effectively implement organizational redesigns, cost reductions, or restructuring efforts and our business might be adversely affected.
Similar risks may exist with respect to our suppliers. 19 Table of Contents We may be unable to effectively implement organizational redesigns, cost reductions, and/or restructuring efforts and our business might be adversely affected.
However, failure to prevent or mitigate data loss or system intrusions from cybersecurity attacks or other security breaches could expose us, our vendors, or our customers to a risk of loss or misuse of such information, adversely affect our operating and financial results, restrict or prevent operations or financial reporting, result in litigation or potential liability and otherwise harm our business.
However, failure to prevent or mitigate data loss or system intrusions from cybersecurity attacks or other security breaches could expose us, our vendors, or our customers to a risk of loss or misuse of such information, adversely affect our operating and financial results, restrict or prevent operations or financial reporting, result in litigation, potential liability, or regulatory risk and otherwise harm our business.
In some instances, we rely on a limited number of suppliers for certain materials required in our production. A significant portion of our business depends on the adequate supply of numerous specialty and other parts and components at competitive prices such as brakes, wheels, side frames, bolsters, and bearings for the railcar business.
In some instances, we rely on a limited number of suppliers for certain materials required in our production. A significant portion of our business depends on the adequate supply of numerous specialty and other parts and components at competitive prices, such as brakes, wheels, side frames, bolsters, and bearings for the railcar manufacturing business.
Furthermore, any material change in the quotas, regulations, or duties on imports imposed by the U.S. government and agencies, or on exports by the government of Mexico or its agencies, could affect our ability to export products that we manufacture in Mexico.
Furthermore, any material change in the quotas, regulations, tariffs, or duties on imports imposed by the U.S. government and agencies, or on exports by the government of Mexico or its agencies, could affect our ability to export products that we manufacture in Mexico.
Many different and unrelated factors could cause a delay in our ability to move our goods in a timely manner from the manufacturing plant to the delivery point, including physical disruptions such as armed conflict, natural disasters and power outages; strikes, labor stoppages or shortages hindering the operation of railroads and related transportation infrastructure; regulatory and bureaucratic inefficiency and unresponsiveness; railroad embargoes or operational inefficiencies; and other causes.
Many different and unrelated factors could cause a delay in our ability to move our goods in a timely manner from the manufacturing plant to the delivery point, including physical disruptions such as armed conflict, natural disasters and power outages; strikes, labor stoppages, border closures, or shortages hindering the operation of railroads and related transportation infrastructure; regulatory and bureaucratic inefficiency and unresponsiveness; railroad embargoes or operational inefficiencies; and other causes.
Such periods could negatively impact U.S. domestic and global financial markets thereby reducing customer demand for our products and services and potentially result in reductions in our revenues, increased price competition, or increased operating costs, any of which could adversely affect our business, results of operations, and financial condition.
Such periods could negatively impact U.S. domestic and global financial markets thereby reducing customer demand for our products and services and potentially resulting in reductions in our revenues, increased price competition, or increased operating costs, any of which could adversely affect our business, results of operations, and financial condition.
As the freight transportation markets we serve continue to evolve, the use of railcars may decline in favor of other more economic transportation modalities or the number of railcars needed to transport current or an increasing volume of goods may decline.
As the freight transportation markets we serve continue to evolve, the use of railcars may decline in favor of other more economical transportation modalities or the number of railcars needed to transport current or an increasing volume of goods may decline.
We cannot be assured that our relations with our workforce will remain positive or that union organizers will not be successful in future attempts to organize at some of our facilities.
We cannot be assured that our relations with our workforce will remain positive or that union organizers will not be successful in future attempts to organize at some of our U.S. facilities.
The Company could potentially fail to successfully integrate new businesses or products into its current business. The Company routinely engages in the search for growth opportunities, including assessment of merger and acquisition prospects in new markets and/or products. Any merger or acquisition into which the Company enters is subject to integration into the Company's businesses and culture.
The Company could potentially fail to successfully integrate new businesses or products into its current business. The Company routinely searches for growth opportunities, including assessment of merger and acquisition prospects in new markets and/or products. Any merger or acquisition into which the Company enters is subject to integration into the Company's businesses and culture.
Any significant delay in deliveries not otherwise contractually mitigated by favorable force majeure provisions could result in cancellation of all or a portion of our orders, cause us to lose future sales, and negatively affect our reputation and our results of operations.
Any significant delay in deliveries not otherwise contractually mitigated by favorable force majeure provisions could result in cancellation of all or a portion of our orders, late delivery penalties, cause us to lose future sales, and negatively affect our reputation and our results of operations.
A disruption in the movement of rail traffic has impaired and could continue to impair our ability to deliver railcars and other products to our customers in a timely manner, which could prevent us from meeting customer demand, reduce our sales, and negatively impact our results of operations.
A disruption in the movement of rail traffic could impair our ability to deliver railcars and other products to our customers in a timely manner, which could prevent us from meeting customer demand, reduce our sales, and negatively impact our results of operations.
There is no assurance that the U.S. government will reauthorize, modify, or otherwise not allow the expiration of tax benefits, such as accelerated depreciation. Changes to income tax laws and regulations have resulted in the phase-out of bonus depreciation, which began in 2023 and will continue through 2026.
There is no assurance that the U.S. government will reauthorize, modify, or otherwise not allow the expiration of tax benefits. For example, changes to income tax laws and regulations have resulted in the phase-out of bonus depreciation, which began in 2023 and will continue through 2026.
A small number of stockholders collectively control more than 20% of our outstanding common stock. Accordingly, a small number of stockholders could affect matters that require stockholder approval, such as the election of directors and the approval of significant business transactions.
A small number of stockholders collectively control a significant amount of our outstanding common stock. Accordingly, a small number of stockholders could affect matters that require stockholder approval, such as the election of directors and the approval of significant business transactions.
Any changes in trade or tax policies by the U.S. or foreign governments in jurisdictions in which we do business, as well as any embargoes, quotas or tariffs imposed on our products and services, could adversely and significantly affect our financial condition and results of operations. 21 Table of Contents We have potential exposure to environmental liabilities that may increase costs and lower profitability.
Any changes in trade or tax policies by the U.S. or foreign governments in jurisdictions in which we do business, as well as any embargoes, quotas, tariffs, or retaliatory tariffs imposed on our products and services, could adversely and significantly affect our financial condition and results of operations, our costs, the demand for our products and services, and the broader North American industrial economy and rail market. 21 Table of Contents We have potential exposure to environmental liabilities that may increase costs and lower profitability.
The countries in which we operate, including Canada and Mexico, have regulatory authorities that regulate products sold or used in those countries. If we fail to comply with the applicable regulations within the foreign countries where we operate, we may be unable to market and sell our products in those countries.
If we fail to comply with the applicable regulations within the foreign countries where we operate, we may be unable to market and sell our products in those countries.
Litigated disputes and other claims could increase our costs and weaken our financial condition. We are currently, and may from time to time be, involved in various claims or legal proceedings arising out of our operations. We provide a variety of railcar-related products and services, including, among others, leasing, manufacturing, components and parts, and maintenance.
Litigated disputes and other claims could increase our costs and weaken our financial condition. We are currently, and may from time to time be, involved in various claims or legal proceedings arising out of our operations.
Although we maintain reserves for our reasonably estimable liabilities, our reserves may be inadequate to cover our portion of claims or final judgments after taking into consideration rights in indemnity and recourse to third parties. As a result, there could be a material adverse effect on our business, operations, or financial condition.
Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken our financial condition. Although we maintain reserves for our reasonably estimable liabilities, our reserves may be inadequate to cover our portion of claims or final judgments after taking into consideration rights in indemnity and recourse to third parties.
U.S. government actions relative to the federal budget, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies could adversely affect our business and operating results. Periods of impasse, deadlock, and last-minute accords may continue to permeate many aspects of U.S. governance, including federal government budgeting and spending, taxation, U.S. deficit spending and debt ceiling adjustments, and international commerce.
Periods of impasse, deadlock, and last-minute accords may continue to permeate many aspects of U.S. governance, including federal government budgeting and spending, taxation, U.S. deficit spending and debt ceiling adjustments, and international commerce.
The initiation of any such litigation or an unfavorable result could have a material adverse effect on our financial condition and results of operations.
The initiation of any such litigation or an unfavorable result could have a material adverse effect on our financial condition and results of operations. See Note 15 of the Consolidated Financial Statements for more detailed information on any material pending legal proceedings other than ordinary routine litigation incidental to our business.
See Note 15 of the Consolidated Financial Statements for more detailed information on any material pending legal proceedings other than ordinary routine litigation incidental to our business, including the current status of the highway products litigation for which the Company retained certain obligations following the sale of the highway products business.
As a result, there could be a material adverse effect on our business, operations, or financial condition. See Note 15 of the Consolidated Financial Statements for more detailed information on any material pending legal proceedings other than ordinary routine litigation incidental to our business.
Although rail traffic operations have resumed at Eagle Pass, there is ongoing instability at the border, and there can be no assurance that similar border closings or congestion will not occur in the future. 13 Table of Contents Fluctuations in the price and supply of materials used in the production of our products, including inflationary pressures, could have a material adverse effect on our ability to cost-effectively manufacture and sell our products.
A material disruption in the movement of rail traffic could negatively impact our business and results of operations. 13 Table of Contents Fluctuations in the price and supply of materials used in the production of our products, including inflationary pressures, could have a material adverse effect on our ability to cost-effectively manufacture and sell our products.
Any such disruption or conditions could harm our business and adversely impact our results of operations. Risks related to our operations outside of the U.S., particularly Mexico, could decrease our profitability. The majority of our railcars are manufactured in Mexico.
Worsening economic or commercial conditions could reduce the number of available suppliers, potentially increasing our rejections for poor quality and requiring us to source unknown and distant supply alternatives. Any such disruption or conditions could harm our business and adversely impact our results of operations. Risks related to our operations outside of the U.S., particularly Mexico, could decrease our profitability.
Our Mexico operations and other operations outside of the U.S. are subject to the risks associated with cross-border business transactions and activities. Political, legal, trade or economic change or instability, criminal activities or social unrest could limit or curtail our respective foreign business activities and operations, including the ability to hire and retain employees.
Political, legal, trade or economic change or instability, criminal activities or social unrest could limit or curtail our respective foreign business activities and operations, including the ability to hire and retain employees. We cannot predict the likelihood of future effects from such risks or any resulting adverse impact on our business, results of operations or financial condition.
During 2023, we experienced significantly elevated commodity and supply chain costs, including the costs of labor, raw materials, energy, fuel, materials and other inputs necessary for the production of our products, and elevated levels of volatility may continue in 2024.
Additionally, from time to time, we have experienced volatility in commodity and supply chain costs, including the costs of labor, raw materials, energy, fuel, materials and other inputs necessary for the production of our products. Our manufacturing operations partially depend on our ability to obtain timely deliveries of materials in acceptable quantities and quality from our suppliers.
We cannot predict the likelihood of future effects from such risks or any resulting adverse impact on our business, results of operations or financial condition. Many items manufactured by us in Mexico are sold in the U.S., and the transportation and import of such products may be disrupted.
Many items manufactured by us in Mexico are sold in the U.S., and the transportation and import of such products may be disrupted. The countries in which we operate, including Canada and Mexico, have regulatory authorities that regulate products sold or used in those countries.
See Note 15 of the Consolidated Financial Statements for more detailed information on any material pending legal proceedings other than ordinary routine litigation incidental to our business, including the current status of the Company's highway products litigation. There can be no assurance that we will continue to pay dividends at current levels or will repurchase shares of our common stock.
There can be no assurance that we will continue to pay dividends at current levels or will repurchase shares of our common stock.
Accidents, including derailments, involving our products or services could lead to litigation and subject us to significant civil, regulatory, or criminal liability. Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken our financial condition.
We provide a variety of railcar-related products and services, including, among others, leasing, manufacturing, components and parts, maintenance, and digital and logistics products and services. Accidents, including derailments, involving our products or services could lead to litigation and subject us to significant civil, regulatory, or criminal liability.
Any material and untimely changes in interest rates or exchange rates could result in significant losses to us. Interest rate increases in 2022 and 2023 resulted in increases in our interest costs, and the strengthening of the Mexican peso relative to the U.S. dollar during 2023 unfavorably impacted the operating results in our Rail Products Group.
Any material and untimely changes in interest rates or exchange rates could result in significant losses to us.
Removed
A material disruption in the movement of rail traffic could negatively impact our business and results of operations. In September and December 2023, the U.S. Customs and Border Patrol suspended U.S. bound cross-border traffic in Eagle Pass, Texas, the primary border crossing we use for railcar deliveries from our manufacturing facilities in Sabinas and Monclova, Mexico.
Added
The majority of our railcars are manufactured in Mexico. Our Mexico operations and other operations outside of the U.S. are subject to the risks associated with cross-border business transactions and activities.
Removed
These closings negatively impacted our deliveries of railcars.
Added
U.S. government actions relative to the federal budget, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies, including tariffs, could adversely affect our business and operating results.
Removed
The inability to procure a sufficient quantity of materials on a timely basis could create disruptions in our production and result in delays while we attempt to engage alternative suppliers. Worsening economic or commercial conditions could reduce the number of available suppliers, potentially increasing our rejections for poor quality and requiring us to source unknown and distant supply alternatives.
Removed
As noted above, closings of the U.S.-Mexico border to cross-border rail traffic in Eagle Pass, Texas in 2023 negatively impacted our deliveries of railcars. In addition, increased state vehicular inspections at the border in 2023 resulted in truck traffic congestion, negatively impacting the Company’s supply chain.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed13 unchanged
Biggest changeAdditionally, Trinity exercises a variety of testing approaches to assess the state of systems and personnel, including frequent automated simulated breaches, annual penetration testing by independent third parties, ad hoc penetration testing by internal personnel, and tabletop exercises for information technology, IRM and legal employees.
Biggest changeAdditionally, Trinity exercises a variety of testing approaches to assess the state of systems and personnel, including annual penetration testing by independent third parties, ad hoc penetration testing by internal personnel, and tabletop exercises for executive and senior leadership, information technology, IRM, and legal employees.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeMexico Leasing Group — 682,200 682,200 — Rail Products Group (1) 5,052,700 229,500 2,814,600 2,467,600 Corporate Offices — 167,500 155,200 12,300 5,052,700 1,079,200 3,652,000 2,479,900 (1) Estimated weighted average production capacity utilization at our rail manufacturing facilities was over 95% for the year ended December 31, 2023.
Biggest changeMexico Leasing Group 1,637,200 732,800 2,370,000 — Rail Products Group (1) 3,980,900 238,600 1,740,700 2,478,800 Corporate Offices — 167,500 155,200 12,300 5,618,100 1,138,900 4,265,900 2,491,100 (1) Estimated weighted average production capacity utilization at our rail manufacturing facilities was approximately 80% for the year ended December 31, 2024.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. [Reserved] 27 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 51 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. [Reserved] 27 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed2 unchanged
Biggest changeThe data in the graph assumes $100 was invested on December 31, 2018. 2018 2019 2020 2021 2022 2023 Trinity Industries, Inc. 100 111 137 162 164 154 New York Stock Exchange Composite Index 100 126 135 162 147 167 S&P 600 Machinery Index 100 125 143 172 163 206 S&P SmallCap 600 100 123 137 173 145 169 26 Table of Contents Issuer Purchases of Equity Securities This table provides information with respect to purchases by the Company of shares of its common stock during the quarter ended December 31, 2023: 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, 2023 through October 31, 2023 3,479 $ 21.91 — $ 250.0 November 1, 2023 through November 30, 2023 290 $ 23.60 — $ 250.0 December 1, 2023 through December 31, 2023 7,611 $ 26.81 — $ 250.0 Total 11,380 — (1) These columns include the following transactions during the three months ended December 31, 2023: (i) the surrender to the Company of 11,084 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees, and (ii) the purchase of 296 shares of common stock by the Trustee for assets held in a non-qualified employee profit-sharing plan trust.
Biggest changeThe data in the graph assumes $100 was invested on December 31, 2019. 2019 2020 2021 2022 2023 2024 Trinity Industries, Inc. 100 124 146 148 139 190 New York Stock Exchange Composite Index 100 107 129 117 133 154 S&P 600 Machinery Index 100 114 137 130 164 187 S&P SmallCap 600 100 111 141 118 137 149 26 Table of Contents Issuer Purchases of Equity Securities This table provides information with respect to purchases by the Company of shares of its common stock during the quarter ended December 31, 2024: 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, 2024 through October 31, 2024 120,892 $ 34.92 117,902 $ 238.7 November 1, 2024 through November 30, 2024 97,567 $ 36.75 96,000 $ 235.2 December 1, 2024 through December 31, 2024 170,062 $ 36.75 168,000 $ 229.0 Total 388,521 381,902 (1) These columns include the following transactions during the three months ended December 31, 2024: (i) the surrender to the Company of 6,375 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees; (ii) the purchase of 244 shares of common stock by the Trustee for assets held in a non-qualified employee profit-sharing plan trust; and (iii) the purchase of 381,902 shares of common stock on the open market as part of our share repurchase program.
The following graph compares our cumulative total stockholder return (assuming reinvestment of dividends) during the five-year period ended December 31, 2023 with an overall stock market index (New York Stock Exchange Composite Index) and our relevant peer group index (S&P 600 Machinery Index).
The following graph compares our cumulative total stockholder return (assuming reinvestment of dividends) during the five-year period ended December 31, 2024 with an overall stock market index (New York Stock Exchange Composite Index) and our relevant peer group index (S&P 600 Machinery Index).
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the New York Stock Exchange under the ticker symbol “TRN”. Our transfer agent and registrar as of December 31, 2023 was American Stock Transfer & Trust Company.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the New York Stock Exchange under the ticker symbol “TRN”. Our transfer agent and registrar as of December 31, 2024 was Equiniti Trust Company, LLC. Holders At January 31, 2025, we had 926 record holders of common stock.
(2) In December 2022, our Board of Directors authorized a share repurchase program effective December 9, 2022 with no expiration. The share repurchase program authorizes the Company to repurchase up to $250 million of its common stock. There were no shares repurchased under the share repurchase program during the three months ended December 31, 2023.
(2) In December 2022, our Board of Directors authorized a share repurchase program effective December 9, 2022 with no expiration. The share repurchase program authorizes the Company to repurchase up to $250 million of its common stock.
The approximate dollar value of shares that were eligible to be repurchased under our share repurchase program is shown as of the end of such month or quarter.
Certain shares of stock repurchased during December 2024, totaling $0.3 million, were cash settled in January 2025 in accordance with normal settlement practices. The approximate dollar value of shares that were eligible to be repurchased under our share repurchase program is shown as of the end of such month or quarter.
Holders At January 31, 2024, we had 1,023 record holders of common stock. The par value of the common stock is $0.01 per share.
The par value of the common stock is $0.01 per share.
Added
The Company repurchased 381,902 shares under the share repurchase program during the three months ended December 31, 2024, at a cost of approximately $13.9 million, resulting in a remaining authorization to repurchase up to $229.0 million of its common stock under the share repurchase program as of December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

117 edited+50 added−41 removed33 unchanged
Biggest changeIncome tax payments, net of refunds, during the years ended December 31, 2023 and 2022 totaled $42.4 million and $19.3 million, respectively. 35 Table of Contents Segment Discussion Railcar Leasing and Management Services Group Year Ended December 31, Percent Change 2023 2022 ($ in millions) Revenues: Leasing and management $ 870.9 $ 770.6 13.0 % Operating profit (1) : Leasing and management $ 345.7 $ 295.8 16.9 % Lease portfolio sales (2) 82.8 127.5 * Total operating profit $ 428.5 $ 423.3 1.2 % Total operating profit margin 49.2 % 54.9 % Leasing and management operating profit margin 39.7 % 38.4 % Selected expense information: Depreciation and amortization (3) $ 244.6 $ 236.4 3.5 % Maintenance and compliance $ 138.9 $ 113.4 22.5 % Rent and ad valorem taxes $ 15.9 $ 19.3 (17.6) % Selling, engineering, and administrative expenses $ 56.6 $ 54.0 4.8 % Interest (4) $ 227.2 $ 186.7 21.7 % * Not meaningful (1) Operating profit includes: depreciation and amortization; fleet operating costs, which include maintenance, compliance, freight, and storage; rent and ad valorem taxes; and selling, engineering, and administrative expenses.
Biggest changeIncome tax payments, net of refunds, during the years ended December 31, 2024, 2023, and 2022 totaled $54.6 million, $42.4 million, and $19.3 million, respectively. 34 Table of Contents Segment Discussion Railcar Leasing and Services Group Year Ended December 31, Percent Change 2024 2023 2022 2024 versus 2023 2023 versus 2022 ($ in millions) Revenues: Leasing and management $ 867.8 $ 813.8 $ 756.4 6.6 % 7.6 % Maintenance services (1) 234.0 170.1 80.9 37.6 % 110.3 % Digital and logistics services 41.4 57.1 14.2 (27.5) % 302.1 % Total revenues $ 1,143.2 $ 1,041.0 $ 851.5 9.8 % 22.3 % Cost of revenues (2) 665.2 630.3 527.9 5.5 % 19.4 % Selling, engineering, and administrative expenses 77.0 62.0 59.1 24.2 % 4.9 % Gains on dispositions of property: Lease portfolio sales (3) 57.3 82.8 127.5 * * Other 5.7 6.0 9.8 * * Total operating profit $ 464.0 $ 437.5 $ 401.8 6.1 % 8.9 % Total operating profit margin 40.6 % 42.0 % 47.2 % Total operating profit margin, excluding lease portfolio sales 35.6 % 34.1 % 32.2 % Selected expense information for Company-owned railcars (4) : Depreciation and amortization expense (5) $ 240.1 $ 238.5 $ 234.4 0.7 % 1.7 % Maintenance and compliance expense (6) $ 131.8 $ 130.5 $ 112.1 1.0 % 16.4 % Other fleet operating costs (7) $ 32.3 $ 31.5 $ 46.6 2.5 % (32.4) % Interest expense (8) $ 234.4 $ 227.2 $ 186.7 3.2 % 21.7 % * Not meaningful (1) Revenues related to services performed by the maintenance services business on Company-owned railcars under full-service lease agreements are eliminated within the Railcar Leasing and Services Group and are excluded from the totals reported on this line.
(2) The adjustment for the year ended December 31, 2023 includes 160 railcars valued at $19.2 million that were placed with a different customer and are also included in orders received in the table above, resulting in no net effect on ending backlog, as well as 365 railcars valued at $33.4 million that were removed from the new railcar backlog by mutual agreement with customers.
(3) The adjustment for the year ended December 31, 2023 includes 160 railcars valued at $19.2 million that were placed with a different customer and are also included in orders received in the table above, resulting in no net effect on ending backlog, as well as 365 railcars valued at $33.4 million that were removed from the new railcar backlog by mutual agreement with customers.
Leasing and management revenues for the year ended December 31, 2023 were favorably impacted primarily by improved lease rates, net additions to the lease fleet, and higher average utilization, which resulted in higher revenues when compared to the year ended December 31, 2022.
Leasing and management revenues for the year ended December 31, 2023 were favorably impacted primarily by higher lease rates, net additions to the lease fleet, and higher average utilization, which resulted in higher revenues when compared to the year ended December 31, 2022.
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. 45 Table of Contents 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.
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. 44 Table of Contents 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.
Additionally, cost of revenues was unfavorably impacted by operational inefficiencies associated with production line changeovers and supply chain disruptions, including the U.S.-Mexico border closures and continued border congestion.
Additionally, cost of revenues was unfavorably impacted by operational inefficiencies associated with production line changeovers and supply chain disruptions, including the U.S.-Mexico border closures and border congestion.
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. 48 Table of Contents Non-GAAP Financial Measures We have included financial measures compiled in accordance with GAAP and certain non-GAAP measures in this Annual Report on Form 10-K to provide management and investors with additional information regarding our financial results.
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. 47 Table of Contents Non-GAAP Financial Measures We have included financial measures compiled in accordance with GAAP and certain non-GAAP measures in this Annual Report on Form 10-K to provide management and investors with additional information regarding our financial results.
Our investment in the lease fleet primarily includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, and secondary market purchases; and is net of proceeds from lease portfolio sales. • During the year ended December 31, 2023, we acquired a company that is a provider of proprietary software and logistics and terminal management solutions for net cash of $62.6 million.
Our investment in the lease fleet primarily includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, as well as secondary market purchases; and is net of proceeds from lease portfolio sales. • During the year ended December 31, 2023, we acquired a company that is a provider of proprietary software and logistics and terminal management solutions for net cash of $62.6 million.
As we continue to streamline our operational footprint, we may have additional gains or losses on the disposition of other non-operating facilities. 39 Table of Contents Liquidity and Capital Resources Overview We expect to finance future operating requirements with cash, cash equivalents, and short-term marketable securities; cash flows from operations; and short-term debt, long-term debt, and equity.
As we continue to streamline our operational footprint, we may have additional gains or losses on the disposition of other non-operating facilities. 40 Table of Contents Liquidity and Capital Resources Overview We expect to finance future operating requirements with cash, cash equivalents, and short-term marketable securities; cash flows from operations; and short-term debt, long-term debt, and equity.
See Note 3 of the Consolidated Financial Statements for discussion of how we utilize our derivative instruments. 44 Table of Contents Critical Accounting Policies and Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations discusses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.
See Note 3 of the Consolidated Financial Statements for discussion of how we utilize our derivative instruments. 43 Table of Contents Critical Accounting Policies and Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations discusses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.
We report our operating results in two reportable segments: (1) the Railcar Leasing and Management Services Group (the "Leasing Group"), which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services, as well as other railcar logistics products and services; and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components, and provides railcar maintenance and modification services.
We report our operating results in two reportable segments: (1) the Railcar Leasing and Services Group (the "Leasing Group"), which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services; railcar maintenance and modification services; and other railcar logistics products and services; and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components.
(2) Defined as the ratio of the difference of (A) consolidated EBITDA less (B) consolidated capital expenditures – manufacturing and other to consolidated interest expense to the extent paid in cash, in each case for the Borrower and its restricted subsidiaries for the period of four consecutive quarters ending with December 31, 2023.
(2) Defined as the ratio of the difference of (A) consolidated EBITDA less (B) consolidated capital expenditures – manufacturing and other to consolidated interest expense to the extent paid in cash, in each case for the Borrower and its restricted subsidiaries for the period of four consecutive quarters ending with December 31, 2024.
We did not identify any impairment indicators during the year ended December 31, 2023. 46 Table of Contents Goodwill and Indefinite-lived Intangible Assets 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.
We did not identify any impairment indicators during the year ended December 31, 2024. 45 Table of Contents Goodwill and Indefinite-lived Intangible Assets 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.
In the following table, the numerator and denominator of our Pre-Tax ROE calculation are reconciled to income from continuing operations and total stockholders’ equity, respectively, which are the most directly comparable GAAP financial measures.
In the following table, the numerator and denominator of our Adjusted ROE calculation are reconciled to income from continuing operations and total stockholders’ equity, respectively, which are the most directly comparable GAAP financial measures.
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 or the fair value of each individual indefinite-lived intangible asset will prove to be accurate predictions of the future.
We believe that the assumptions used in our impairment assessments 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 or the fair value of each individual indefinite-lived intangible asset will prove to be accurate predictions of the future.
The adjustment for the year ended December 31, 2022 includes 300 railcars valued at $34.6 million that were removed from the new railcar backlog and shifted to the sustainable railcar conversion backlog. Total backlog dollars for the year ended December 31, 2023 decreased by 18.0% when compared to the prior year.
The adjustment for the year ended December 31, 2022 includes 300 railcars valued at $34.6 million that were removed from the new railcar backlog and shifted to the sustainable railcar conversion backlog. Total backlog dollars for the year ended December 31, 2024 decreased by 33.0% when compared to the prior year.
Cost of revenues – Our cost of revenues for the year ended December 31, 2023 was $2,456.2 million, representing an increase of $846.6 million, or 52.6%, over the prior year, primarily due to higher external deliveries, the impact of foreign currency fluctuations, supply chain disruptions, and operational and labor-related inefficiencies in the Rail Products Group.
Our cost of revenues for the year ended December 31, 2023 was $2,456.2 million, representing an increase of $846.6 million, or 52.6%, when compared to the year ended December 31, 2022, primarily due to higher external deliveries, the impact of foreign currency fluctuations, supply chain disruptions, and operational and labor-related inefficiencies in the Rail Products Group.
Derivative Instruments We use derivative instruments to mitigate interest rate risk, including risks associated with the impact of changes in interest rates in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding.
Derivative Instruments We use derivative instruments to mitigate interest rate risk, including risks associated with the impact of changes in interest rates in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding. We also use derivative instruments to mitigate the impact of changes in foreign currency exchange rates.
If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is impaired by the amount of the excess. Indefinite-lived intangible assets, which are comprised of trade names of recently acquired businesses, totaled $11.2 million as of December 31, 2023.
Goodwill totaled $221.5 million as of December 31, 2024. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is impaired by the amount of the excess. Indefinite-lived intangible assets, which are comprised of trade names of recently acquired businesses, totaled $11.2 million as of December 31, 2024.
A summary of our financial covenants is detailed below: Ratio Covenant Actual at December 31, 2023 Maximum leverage (1) No greater than 3.75 to 1.00 2.13 Minimum interest coverage (2) No less than 2.25 to 1.00 10.92 (1) Defined as the ratio of consolidated total indebtedness to consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") for the Borrower and its restricted subsidiaries for the period of four consecutive quarters ending with December 31, 2023.
A summary of our financial covenants is detailed below: Ratio Covenant Actual at December 31, 2024 Maximum leverage (1) No greater than 3.75 to 1.00 1.33 Minimum interest coverage (2) No less than 2.25 to 1.00 8.29 (1) Defined as the ratio of consolidated total indebtedness to consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") for the Borrower and its restricted subsidiaries for the period of four consecutive quarters ending with December 31, 2024.
Our company-owned lease fleet includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. • For the year ended December 31, 2023, we made a net investment in our lease fleet of approximately $287.0 million, which primarily includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, and secondary market purchases; and is net of proceeds from lease portfolio sales. • The total value of the railcar backlog at December 31, 2023 was $3.2 billion, compared to $3.9 billion at December 31, 2022.
Our company-owned lease fleet includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. • For the year ended December 31, 2024, we made a net fleet investment of approximately $181.2 million, which primarily includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, as well as secondary market purchases; and is net of proceeds from lease portfolio sales. • The total value of the railcar backlog at December 31, 2024 was $2.1 billion, compared to $3.2 billion at December 31, 2023.
Subsequent Events Change in Organizational Structure – Effective January 1, 2024, the Company modified its organizational structure to better leverage our maintenance services capabilities to support lease fleet optimization and to grow our services and parts businesses. The new structure will result in a change to our reportable segments beginning in 2024.
Effective January 1, 2024, the Company modified its organizational structure to better leverage our maintenance services capabilities to support lease fleet optimization and to grow our services and parts businesses. The new structure resulted in a change to our reportable segments beginning in 2024.
Consolidation is required for VIEs in which we are the primary beneficiary. We have determined that we are the primary beneficiary for TRIP Holdings, RIV 2013, and Trinity Global Ventures Limited. At December 31, 2023, the carrying value of our investments in these entities totaled $126.2 million.
Consolidation is required for VIEs in which we are the primary beneficiary. We have determined that we are the primary beneficiary for TRIP Holdings, RIV 2013, and Trinity Global Ventures Limited. At December 31, 2024, the carrying value of our investments in these entities totaled $133.0 million.
We have determined that we are not the primary beneficiary for Signal Rail or certain other entities in which we have an equity interest. At December 31, 2023, the carrying value of these investments totaled $24.9 million. For further information regarding our partially-owned subsidiaries and other investments in unconsolidated affiliates, see Note 5 of the Consolidated Financial Statements.
We have determined that we are not the primary beneficiary for Signal Rail Holdings LLC or certain other entities in which we have an equity interest. At December 31, 2024, the carrying value of these investments totaled $27.8 million. For further information regarding our partially-owned subsidiaries and other investments in unconsolidated affiliates, see Note 5 of the Consolidated Financial Statements.
Income taxes – The effective tax rate from continuing operations for the year ended December 31, 2023 was an expense of 6.0%, which differs from the U.S. statutory rate of 21.0% primarily due to the release of residual taxes out of AOCI; the re-measurement of our net deferred state income tax liabilities due to apportionment and state law changes, reducing our net deferred tax liability; changes in our valuation allowances; state income taxes; and foreign income taxes.
Our effective tax rate from continuing operations for the year ended December 31, 2023 was an expense of 6.0%, which differs from the U.S. statutory rate of 21.0% primarily due to the release of residual taxes out of accumulated other comprehensive income and the re-measurement of our net deferred state income tax liabilities due to apportionment and state law changes, reducing our net deferred tax liability.
Gains on dispositions of property – Gains on dispositions of property decreased by $63.1 million for the year ended December 31, 2023, when compared to the prior year period primarily due to lower lease portfolio sales in the current year period. Additionally, gains on dispositions of property in the prior year period were favorably impacted by disposals of non-operating facilities.
Gains on dispositions of property decreased by $63.1 million for the year ended December 31, 2023, when compared to the year ended December 31, 2022, primarily due to lower lease portfolio sales volume. Additionally, gains on dispositions of property for the year ended December 31, 2022 were favorably impacted by disposals of non-operating facilities.
Debt instruments that we have utilized include the TILC warehouse loan facility, senior notes, convertible subordinated notes, asset-backed securities, non-recourse promissory notes, and our revolving credit facility. As of December 31, 2023, we have total committed liquidity of $906.3 million.
Debt instruments that we have utilized include the TILC warehouse loan facility, senior notes, convertible subordinated notes, asset-backed securities, non-recourse promissory notes, and our revolving credit facility. As of December 31, 2024, we have total committed liquidity of $987.4 million.
We regularly evaluate and update our strategies to mitigate the negative effects on margins and operating profits that may arise due to foreign currency fluctuations. Input and Labor Costs We have experienced increases in the costs of steel, components, and certain other inputs that represent a substantial portion of our cost of revenues.
We regularly evaluate and update our strategies to mitigate the negative effects on margins and operating profits that may arise due to foreign currency fluctuations. Input Costs We periodically experience volatility in the costs of steel, components, and certain other inputs that represent a substantial portion of our cost of revenues.
We continually assess the impact of input and labor costs on our operational efficiency, margins, and overall profitability. 29 Table of Contents Financial and Operational Highlights • Our revenues for the year ended December 31, 2023 were $2,983.3 million, representing an increase of 50.9%, compared to the year ended December 31, 2022.
We continually assess the impact of input costs on our operational efficiency, margins, and overall profitability. 29 Table of Contents Financial and Operational Highlights • Our revenues for the year ended December 31, 2024 were $3,079.2 million, representing an increase of 3.2%, compared to the year ended December 31, 2023.
December 31, Percent Change 2023 2022 (in millions) External customers $ 2,896.5 $ 3,444.1 Leasing Group 304.4 458.9 Total $ 3,200.9 $ 3,903.0 (18.0) % 38 Table of Contents Year Ended December 31, Percent Change 2023 2022 Beginning balance 32,270 13,980 Orders received (1) 11,500 31,905 (64.0) % Deliveries (17,355) (13,315) 30.3 % Other adjustments (2) (525) (300) Ending balance 25,890 32,270 (19.8) % Average selling price in ending backlog $ 123,635 $ 120,948 2.2 % (1) Orders received for the year ended December 31, 2022 include 15,000 railcars valued at approximately $1.8 billion associated with a long-term railcar supply agreement with GATX.
December 31, Percent Change 2024 2023 2022 2024 versus 2023 2023 versus 2022 (in millions) External customers $ 1,895.2 $ 2,896.5 $ 3,444.1 Leasing Group 250.3 304.4 458.9 Total $ 2,145.5 $ 3,200.9 $ 3,903.0 (33.0) % (18.0) % Year Ended December 31, Percent Change 2024 2023 2022 2024 versus 2023 2023 versus 2022 Beginning balance 25,890 32,270 13,980 Orders received (1) 7,685 11,500 31,905 (33.2) % (64.0) % Deliveries (2) (17,570) (17,355) (13,315) 1.2 % 30.3 % Other adjustments (3) — (525) (300) Ending balance 16,005 25,890 32,270 (38.2) % (19.8) % Average selling price in ending backlog $ 134,052 $ 123,635 $ 120,948 8.4 % 2.2 % (1) Orders received for the year ended December 31, 2022 include 15,000 railcars valued at approximately $1.8 billion associated with a long-term railcar supply agreement with GATX Corporation ("GATX").
The effect of a change in enacted laws or 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 $1,102.7 million as of December 31, 2023, which includes valuation allowances of $21.6 million.
The effect of a change in enacted laws or 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 $1,074.7 million as of December 31, 2024, which includes valuation allowances of $20.8 million.
Net cash used in investing activities from continuing operations for the year ended December 31, 2023 was $363.0 million compared to $258.0 million of net cash used in investing activities from continuing operations for the year ended December 31, 2022.
Net cash used in investing activities from continuing operations for the year ended December 31, 2024 was $214.6 million compared to $363.0 million of net cash used in investing activities from continuing operations for the year ended December 31, 2023.
Deferred Compensation Plan for the year ending December 31, 2024 are expected to be $10.6 million, compared to $10.1 million contributed during 2023. Stock-Based Compensation We have a stock-based compensation plan covering our employees and our Board of Directors. See Note 13 of the Consolidated Financial Statements for further information.
Deferred Compensation Plan for the year ending December 31, 2025 are expected to be $12.3 million, compared to $11.8 million contributed during 2024. Stock-Based Compensation We have a stock-based compensation plan covering our employees and our Board of Directors. See Note 13 of the Consolidated Financial Statements for further information.
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.
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. If the carrying value exceeds the estimated fair value, an impairment loss will be recognized.
Net cash provided by operating activities from continuing operations for the year ended December 31, 2023 was $309.0 million compared to $9.2 million net cash provided by operating activities from continuing operations for the year ended December 31, 2022.
Net cash provided by operating activities from continuing operations for the year ended December 31, 2024 was $588.1 million compared to $309.0 million net cash provided by operating activities from continuing operations for the year ended December 31, 2023.
As of December 31, 2023, the range of reasonably possible losses for such matters is $8.7 million to $19.6 million. For further information regarding our contingencies and litigation matters, see Note 15 of the Consolidated Financial Statements.
As of December 31, 2024, the range of reasonably possible losses for such matters is $7.5 million to $18.9 million. For further information regarding our contingencies and litigation matters, see Note 15 of the Consolidated Financial Statements.
In our maintenance services business, cost of revenues increased for the year ended December 31, 2023 as a result of a higher volume of general repairs and the mix of repairs; and continues to be impacted by labor shortages leading to operating inefficiencies.
In our maintenance services business, cost of revenues increased for the year ended December 31, 2023 as a result of a higher volume of external repairs, and continued to be impacted by labor shortages leading to operating inefficiencies. Cost of revenues were further increased for the year ended December 31, 2023 by the acquisition of RSI.
Company Overview Trinity Industries, Inc. and its consolidated subsidiaries own businesses that are leading providers of railcar products and services in North America. We market our railcar products and services under the trade name TrinityRail ® . The TrinityRail platform provides railcar leasing and management services; railcar manufacturing, maintenance and modifications; and other railcar logistics products and services.
Company Overview Trinity Industries, Inc. and its consolidated subsidiaries own businesses that are leading providers of railcar products and services in North America. We market our railcar products and services under the trade name TrinityRail ® .
Dividend Payments – In December 2023, our Board of Directors declared an increase of approximately 8% to our quarterly dividend from $0.26 per share to $0.28 per share. We paid $86.0 million in dividends to our common stockholders during the year ended December 31, 2023.
Dividend Payments – In December 2024, our Board of Directors declared an increase to our quarterly dividend from $0.28 per share to $0.30 per share. We paid $93.2 million in dividends to our common stockholders during the year ended December 31, 2024.
Significant investing activities are as follows: • We had a net investment in the lease fleet of $287.0 million during the year ended December 31, 2023, compared to $178.1 million during the year ended December 31, 2022.
Significant investing activities are as follows: • We had a net fleet investment of $181.2 million during the year ended December 31, 2024, compared to $287.0 million during the year ended December 31, 2023.
Our operating profit for the year ended December 31, 2023 was $417.0 million compared to $334.0 million for the year ended December 31, 2022. • The Leasing Group's lease fleet of 109,295 company-owned railcars was 97.5% utilized as of December 31, 2023, compared to a lease fleet utilization of 97.9% on 108,440 company-owned railcars as of December 31, 2022.
Our operating profit for the year ended December 31, 2024 was $491.5 million, representing an increase of 17.9%, compared to $417.0 million for the year ended December 31, 2023. • The Leasing Group's lease fleet of 109,635 company-owned railcars was 97.0% utilized as of December 31, 2024, compared to a lease fleet utilization of 97.5% on 109,295 company-owned railcars as of December 31, 2023.
See Note 9 of the Consolidated Financial Statements for information regarding scheduled maturities of our debt. We intend to use cash from operations and our available liquidity to repay our Senior Notes due 2024. Interest payable associated with our debt due in the next twelve months is approximately $251.6 million, with $508.6 million due thereafter.
See Note 9 of the Consolidated Financial Statements for information regarding scheduled maturities of our debt. We intend to use cash from operations and our available liquidity to repay or refinance our 2017 promissory notes. Interest payable associated with our debt due in the next twelve months is approximately $258.8 million, with $501.7 million due thereafter.
The changes in our operating assets and liabilities are as follows: Year Ended December 31, 2023 2022 (in millions) (Increase) decrease in receivables, inventories, and other assets $ (77.5) $ (299.3) Increase (decrease) in accounts payable, accrued liabilities, and other liabilities 56.9 38.3 Changes in operating assets and liabilities $ (20.6) $ (261.0) The changes in our operating assets and liabilities resulted in a net use of $20.6 million for the year ended December 31, 2023, as compared to a net use of $261.0 million for the year ended December 31, 2022.
The changes in our operating assets and liabilities are as follows: Year Ended December 31, 2024 2023 (in millions) (Increase) decrease in receivables, inventories, and other assets $ 194.7 $ (77.5) Increase (decrease) in accounts payable, accrued liabilities, and other liabilities (26.6) 56.9 Changes in operating assets and liabilities $ 168.1 $ (20.6) The changes in our operating assets and liabilities resulted in a net source of $168.1 million for the year ended December 31, 2024, as compared to a net use of $20.6 million for the year ended December 31, 2023.
Additionally, operating profit was favorably impacted by gains of $6.3 million and $7.5 million for the years ended December 31, 2023 and 2022, respectively, related to insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021.
Operating profit for the years ended December 31, 2024, 2023, and 2022 was favorably impacted by gains of $2.7 million, $6.3 million, and $7.5 million, respectively, related to insurance recoveries in excess of net book value for assets damaged at the Company’s facility in Cartersville, Georgia in two separate events.
In connection with this organizational update, we will align the maintenance services business, which is currently reported in the Rail Products Group, to be presented within our leasing business. This change aligns with the way in which our Chief Operating Decision Maker will assess performance and allocate resources.
In connection with this organizational update, we aligned the maintenance services business, which was previously reported in the Rail Products Group, to now be presented within our leasing business. This change aligns with the way in which our Chief Operating Decision Maker assesses performance and allocates resources.
As of December 31, 2023, our net property, plant, and equipment totaled $7.0 billion, the net book value of our finite-lived intangible assets totaled $95.5 million, and our right-of-use assets totaled $100.6 million.
As of December 31, 2024, our net property, plant, and equipment totaled $7.0 billion, the net book value of our finite-lived intangible assets totaled $87.8 million, and our right-of-use assets totaled $97.0 million.
The increase in operating profit was partially offset by lower lease portfolio sales in the current year period, the impact of foreign currency fluctuations in the Rail Products Group, and higher employee-related and other operating costs across the enterprise.
The increase in operating profit was partially offset by lower lease portfolio sales volume, higher maintenance and compliance costs, and labor inefficiencies in the Leasing Group, as well as the impact of foreign currency fluctuations in the Rail Products Group, and higher employee-related and other operating costs across the enterprise.
Revenues in our rail products business increased for the year ended December 31, 2023 as a result of higher deliveries and favorable pricing, partially offset by the mix of railcars sold.
Revenues for the Rail Products Group increased for the year ended December 31, 2023 by 31.5% when compared to the year ended December 31, 2022 primarily as a result of higher deliveries and favorable pricing, partially offset by the mix of railcars sold.
Management believes that Pre-Tax ROE is a useful measure to both management and investors as it provides an indication of the economic return on the Company’s investments over time. Pre-Tax ROE is used in consideration of the Company’s expected tax position in the near-term.
Management believes that Adjusted ROE is a useful measure to both management and investors as it provides an indication of the economic return on the Company’s investments over time.
We believe Adjusted Free Cash Flow is useful to both management and investors as it provides a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt.
We believe this measure is useful to both management and investors as it provides a relevant measure of liquidity and a useful basis for assessing the breadth of the cash flow generation capabilities across our operating platform, as well as our ability to fund our operations and repay our debt.
During the year ended December 31, 2022, we had total borrowings of $2,000.6 million and total repayments of $1,578.5 million, for net proceeds of $422.1 million, primarily from debt proceeds to support our investment in the lease fleet and for general corporate purposes. • We paid $86.0 million and $76.9 million in dividends to our common stockholders during the years ended December 31, 2023 and 2022, respectively. • We repurchased common stock totaling $51.8 million during the year ended December 31, 2022.
During the year ended December 31, 2023, we had total borrowings of $1,652.7 million and total repayments of $1,518.9 million, for net proceeds of $133.8 million, primarily from debt proceeds for general corporate purposes and to support our investment in the lease fleet. • We paid $93.2 million and $86.0 million in dividends to our common stockholders during the years ended December 31, 2024 and 2023, respectively.
These contractual obligations due in the next twelve months are approximately $618.8 million, with $15.6 million due thereafter.
These contractual obligations due in the next twelve months are approximately $449.2 million, with $6.1 million due thereafter.
Interest on the Senior Notes due 2028 is payable semiannually commencing January 15, 2024. Net proceeds received from the issuance were used to repay outstanding borrowings under our revolving credit facility and to pay related fees, costs, premiums, and expenses in connection with the issuance.
Interest on the Additional Senior Notes is payable semiannually commencing July 15, 2024. Net proceeds received from the issuance, together with cash on hand, were used to repay our Senior Notes due 2024, and to pay related fees, costs, premiums, and expenses in connection with the issuance.
Pre-Tax Return on Equity Pre-Tax Return on Equity (“Pre-Tax ROE”) is defined as a ratio for which (i) the numerator is calculated as income or loss from continuing operations, adjusted to exclude the effects of the provision or benefit for income taxes, net income or loss attributable to noncontrolling interest, and certain other adjustments, described in the footnotes to the table below, which include certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; the controlling interest portion of loss on extinguishment of debt; interest expense, net; and pension plan settlement; and (ii) the denominator is calculated as average stockholders’ equity (which excludes noncontrolling interest), adjusted to exclude accumulated other comprehensive income or loss.
Adjusted Return on Equity Adjusted ROE is defined as a ratio for which (i) the numerator is calculated as income or loss from continuing operations, adjusted to exclude the effects of net income or loss attributable to noncontrolling interest, and certain other adjustments (net of income taxes), described in the footnotes to the table below, which include certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; interest expense, net; and the income tax effects of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"); and (ii) the denominator is calculated as average Trinity stockholders’ equity (which excludes noncontrolling interest).
Total revenues for the Railcar Leasing and Management Services Group increased by 13.0% for the year ended December 31, 2023 when compared to the year ended December 31, 2022.
Cost of revenues for the Railcar Leasing and Services Group increased by 19.4% for the year ended December 31, 2023 when compared to the year ended December 31, 2022.
Our total available liquidity includes: $105.7 million of unrestricted cash and cash equivalents; $582.6 million unused and available under our revolving credit facility; and $218.0 million unused and available under the TILC warehouse loan facility based on the amount of warehouse-eligible, unpledged equipment.
Our total available liquidity includes: $228.2 million of unrestricted cash and cash equivalents; $591.3 million unused and available under our revolving credit facility; and $167.9 million unused and available under the TILC warehouse loan facility based on the amount of warehouse-eligible, unpledged equipment.
Operating costs by segment for the years ended December 31, 2023 and 2022 were as follows: Year Ended December 31, 2023 2022 (in millions) Railcar Leasing and Management Services Group (1) $ 442.4 $ 347.3 Rail Products Group 2,573.6 2,015.6 Segment Totals 3,016.0 2,362.9 Corporate and other 108.3 80.8 Restructuring activities, net (2.2) 1.0 Eliminations – Lease Subsidiary (553.6) (802.0) Eliminations – Other (2.2) 0.6 Consolidated Total $ 2,566.3 $ 1,643.3 (1) Includes gains on lease portfolio sales of $82.8 million and $127.5 million for the years ended December 31, 2023 and 2022, respectively.
Operating costs by segment for the years ended December 31, 2024, 2023, and 2022 were as follows: Year Ended December 31, 2024 2023 2022 (in millions) Railcar Leasing and Services Group (1) $ 679.2 $ 603.5 $ 449.7 Rail Products Group 2,241.7 2,366.8 1,819.9 Segment Totals 2,920.9 2,970.3 2,269.6 Corporate and other 125.7 108.3 80.8 Restructuring activities, net 4.3 (2.2) 1.0 Eliminations (463.2) (510.1) (708.1) Consolidated Total $ 2,587.7 $ 2,566.3 $ 1,643.3 (1) Includes gains on lease portfolio sales of $57.3 million, $82.8 million, and $127.5 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Information related to lease portfolio sales is as follows: Year Ended December 31, 2023 2022 ($ in millions) Lease portfolio sales $ 381.8 $ 750.7 Operating profit on lease portfolio sales (1) $ 82.8 $ 126.2 Operating profit margin on lease portfolio sales 21.7 % 16.8 % (1) Excludes $1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022.
Information related to lease portfolio sales is as follows: Year Ended December 31, 2024 2023 2022 ($ in millions) Lease portfolio sales $ 360.7 $ 381.8 $ 750.7 Operating profit on lease portfolio sales (1) $ 57.3 $ 82.8 $ 126.2 Operating profit margin on lease portfolio sales 15.9 % 21.7 % 16.8 % (1) Excludes $1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022. 35 Table of Contents Total revenues for the Railcar Leasing and Services Group increased by 9.8% for the year ended December 31, 2024 when compared to the year ended December 31, 2023.
Transactions between the Rail Products Group and the Leasing Group are as follows: Year Ended December 31, 2023 2022 ($ in millions) Revenues: New railcars $ 461.7 $ 624.9 Sustainable railcar conversions $ 45.5 $ 118.6 Other maintenance services $ 82.5 $ 123.7 Deferred profit $ 36.1 $ 65.2 Number of new railcars (in units) 3,425 4,735 Number of sustainable railcar conversions (in units) 445 1,155 Corporate and other Year Ended December 31, Percent Change 2023 2022 (in millions) Operating costs: Selling, engineering, and administrative expenses $ 109.4 $ 97.2 12.6 % Gains on dispositions of property (1.1) (16.4) * Operating loss $ (108.3) $ (80.8) 34.0 % * Not meaningful Selling, engineering, and administrative expenses for the year ended December 31, 2023 increased 12.6%, compared to the prior year period primarily from higher employee-related costs, as well as the change in estimated fair value of additional contingent consideration associated with an acquisition.
Transactions between the Rail Products Group and the Leasing Group are as follows: Year Ended December 31, 2024 2023 2022 ($ in millions) Revenues: New railcars $ 461.4 $ 461.7 $ 624.9 Sustainable railcar conversions $ 0.4 $ 45.5 $ 118.6 Parts & components $ 30.9 $ 28.3 $ 14.6 Deferred profit $ 31.9 $ 28.3 $ 50.2 Number of new railcars (in units) 3,555 3,425 4,735 Number of sustainable railcar conversions (in units) 5 445 1,155 39 Table of Contents Corporate and other Year Ended December 31, Percent Change 2024 2023 2022 2024 versus 2023 2023 versus 2022 (in millions) Operating costs: Selling, engineering, and administrative expenses $ 125.9 $ 109.4 $ 97.2 15.1 % 12.6 % Gains on dispositions of property (0.2) (1.1) (16.4) * * Operating loss $ (125.7) $ (108.3) $ (80.8) 16.1 % 34.0 % * Not meaningful Selling, engineering, and administrative expenses for the year ended December 31, 2024 increased 15.1%, compared to the prior year primarily from higher employee-related costs, including increased incentive-based compensation and costs associated with workforce reductions to improve our cost structure, as well as continued investments in technology.
Foreign Currency Fluctuations We are exposed to the impact of foreign currency fluctuations in our Mexico operations resulting from certain expenditures that are denominated in the Mexican peso.
Foreign Currency Fluctuations We are exposed to the impact of foreign currency fluctuations in our Mexico operations resulting from certain expenditures that are denominated in the Mexican peso. We maintain a hedging program and have taken other actions to mitigate the foreign currency impact of a portion of our peso-denominated expenditures.
We typically use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers to reduce the impact of the volatility of certain input costs on our operating profit.
We typically use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers to reduce the impact of the volatility of certain input costs on our operating profit. Further, the cost and volume of lease fleet maintenance and compliance events remain elevated, which we expect to continue in the near term.
Selling, engineering, and administrative expenses – Selling, engineering, and administrative expenses for the year ended December 31, 2023 were $201.9 million, representing an increase of $16.5 million, or 8.9%, over the prior year, primarily due to higher employee-related costs, including an increase in headcount as a result of recent acquisitions.
Selling, engineering, and administrative expenses – Selling, engineering, and administrative expenses for the year ended December 31, 2024 were $235.7 million, representing an increase of $33.8 million, or 16.7%, over the prior year, primarily due to higher employee-related costs, including increased incentive-based compensation, and continued investments in technology. 33 Table of Contents Selling, engineering, and administrative expenses for the year ended December 31, 2023 were $201.9 million, representing an increase of $16.5 million, or 8.9%, when compared to the year ended December 31, 2022, primarily due to higher employee-related costs, including an increase in headcount as a result of the Holden America and RSI acquisitions.
In our rail products business, the increase in cost of revenues for the year ended December 31, 2023 was driven by higher deliveries, the impact of foreign currency fluctuations, and labor inefficiencies associated with onboarding of new employees.
Cost of revenues for the Rail Products Group increased for the year ended December 31, 2023 by 30.5% when compared to the year ended December 31, 2022 primarily driven by higher deliveries, the impact of foreign currency fluctuations, and labor inefficiencies associated with onboarding of new employees.
See Note 15 of the Consolidated Financial Statements for more information. 34 Table of Contents Operating profit – Operating profit for the year ended December 31, 2023 totaled $417.0 million, representing an increase of $83.0 million, or 24.9%, from the prior year period primarily due to higher external deliveries in the Rail Products Group and improved lease rates and net additions to the lease fleet in the Leasing Group.
Operating profit for the year ended December 31, 2023 totaled $417.0 million, representing an increase of $83.0 million, or 24.9%, from the year ended December 31, 2022 primarily due to higher external deliveries in the Rail Products Group, as well as higher lease rates, net additions to the lease fleet, and a higher volume of external repairs in the Leasing Group.
(2) Includes $1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022. (3) Depreciation and amortization expense includes $5.6 million and $12.1 million for the years ended December 31, 2023 and 2022, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program.
(4) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. (5) Depreciation and amortization expense includes $5.6 million and $12.1 million for the years ended December 31, 2023 and 2022, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program.
Based on our annual impairment test of indefinite-lived intangible assets as of October 1, 2023, we concluded that there was no impairment of our indefinite-lived intangible assets. 47 Table of Contents Variable Interest Entities Description of Estimate We continuously evaluate our investments in and other contractual arrangements with third-party entities to determine whether they are considered a variable interest entity ("VIE") and, if so, whether we are considered the primary beneficiary.
Based on our annual qualitative assessments performed as of October 1, 2024, we concluded that it was not more likely than not that any of our reporting units or any of our indefinite-lived intangible assets had a fair value that was less than its carrying value. 46 Table of Contents Variable Interest Entities Description of Estimate We continuously evaluate our investments in, and other contractual arrangements with, third-party entities to determine whether they are considered a variable interest entity ("VIE") and, if so, whether we are considered the primary beneficiary.
Information regarding the Leasing Group’s lease fleet is as follows: December 31, 2023 2022 Number of railcars: Wholly-owned (1) 85,735 84,750 Partially-owned 23,560 23,690 109,295 108,440 Investor-owned 33,005 33,235 142,300 141,675 Company-owned railcars (2) : Average age in years 13.0 12.3 Average remaining lease term in years 2.9 3.0 Fleet utilization 97.5 % 97.9 % (1) Includes 2,495 railcars and 2,810 railcars under leased-in arrangements as of December 31, 2023 and 2022, respectively.
After initial funding, the Leasing Group may obtain long-term financing for the railcars in the lease fleet through non-recourse asset-backed securities; long-term recourse debt; long-term non-recourse promissory notes; or third-party equity. 36 Table of Contents Information regarding the Leasing Group’s lease fleet is as follows: December 31, 2024 December 31, 2023 December 31, 2022 Number of railcars: Wholly-owned (1) 86,355 85,735 84,750 Partially-owned 23,280 23,560 23,690 109,635 109,295 108,440 Investor-owned 34,230 33,005 33,235 143,865 142,300 141,675 Company-owned railcars (2) : Average age in years 13.8 13.0 12.3 Average remaining lease term in years 2.9 2.9 3.0 Fleet utilization 97.0 % 97.5 % 97.9 % (1) Includes 2,240 railcars, 2,495 railcars, and 2,810 railcars under leased-in arrangements as of December 31, 2024, 2023, and 2022, respectively.
Interest on the Senior Notes due 2028 is payable semiannually commencing January 15, 2024. Net proceeds received from the issuance were used to repay outstanding borrowings under our revolving credit facility and to pay related fees, costs, premiums, and expenses in connection with the issuance.
Interest on the Additional Senior Notes is payable semiannually commencing July 15, 2024. Net proceeds received from the issuance, together with cash on hand, were used to repay $400.0 million of our 4.55% senior notes due 2024 ("Senior Notes due 2024"), and to pay related fees, costs, premiums, and expenses in connection with the issuance.
Results for the years ended December 31, 2023 and 2022 included gains of $6.3 million and $7.5 million, respectively, related to insurance recoveries in excess of net book value for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021.
Results for the years ended December 31, 2024, 2023, and 2022 included gains of $2.7 million, $6.3 million, and $7.5 million, respectively, related to insurance recoveries in excess of net book value for assets damaged at the Company’s facility in Cartersville, Georgia in two separate events. See Note 15 of the Consolidated Financial Statements for more information.
See Note 10 of the Consolidated Financial Statements for additional information.
See Note 9 of the Consolidated Financial Statements for additional information regarding these debt transactions.
Significant financing activities are as follows: • During the year ended December 31, 2023, we had total borrowings of $1,652.7 million and total repayments of $1,518.9 million, for net proceeds of $133.8 million, primarily from debt proceeds for general corporate purposes and to support our investment in the lease fleet.
Significant financing activities are as follows: • During the year ended December 31, 2024, we had total borrowings of $1,970.4 million and total repayments of $2,050.5 million, for net repayments of $80.1 million, primarily from the redemption of the Senior Notes due 2024 and the TRL VII Notes, partially offset by debt proceeds to support our investment in the lease fleet and for general corporate purposes.
The orders in our backlog from the Leasing Group are fully supported by lease commitments with external customers. The final amount of backlog attributable to the Leasing Group may vary by the time of delivery as customers may choose to change their procurement decision.
The final amount of backlog attributable to the Leasing Group may vary by the time of delivery as customers may elect to change their procurement decision.
Net income tax payments differ from the current provision primarily based on when estimated tax payments were due as compared to when the related income was earned and taxable. The total income tax receivable position was $5.2 million and $7.8 million at December 31, 2023 and 2022, respectively.
Income tax payments, net of refunds, differ from the current provision primarily based on when estimated tax payments were due as compared to when the related income was earned and taxable.
Although lease rates and lease fleet utilization remain strong, weaknesses in certain sectors of the North American and global economy may make it more difficult to sell or lease certain types of railcars. Additionally, changes in certain commodity prices, or changes in demand for certain commodities, could impact customer demand for various types of railcars.
The industries in which our customers operate are cyclical in nature. Although lease rates and lease fleet utilization remain strong, weaknesses in certain sectors of the North American and global economy may make it more difficult to sell or lease certain types of railcars.
Further, disruptions in the global supply chain have impacted demand for, and the costs of, certain of our products and services. We continuously assess demand for our products and services and take steps to rationalize and diversify our leased railcar portfolio and align our operating capacity appropriately.
Our costs and the demand for our products and services could also be impacted by changes in tariffs, retaliatory tariffs, and trade policies. We continuously assess demand for our products and services and take steps to rationalize and diversify our leased railcar portfolio and align our operating capacity appropriately.
Consequently, beginning January 1, 2024, we will report our operating results in two reportable segments: (1) Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) Rail Products Group.
Consequently, beginning January 1, 2024, we report our operating results in two reportable segments: (1) the Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) the Rail Products Group. These changes had no impact to our previously reported consolidated results of operations, financial position, or cash flows.
Operating Profit Operating profit by segment for the years ended December 31, 2023 and 2022 was as follows: Year Ended December 31, 2023 2022 (in millions) Railcar Leasing and Management Services Group $ 428.5 $ 423.3 Rail Products Group 129.4 59.1 Segment Totals 557.9 482.4 Corporate and other (108.3) (80.8) Restructuring activities, net 2.2 (1.0) Eliminations – Lease Subsidiary (36.1) (65.2) Eliminations – Other 1.3 (1.4) Consolidated Total $ 417.0 $ 334.0 Discussion of Consolidated Results Revenues – Our revenues for the year ended December 31, 2023 were $2,983.3 million, representing an increase of $1,006.0 million, or 50.9%, over the prior year, primarily related to higher external deliveries in the Rail Products Group and improved lease rates, net additions to the lease fleet, and the impact of the acquisition of RSI Logistics ("RSI") in the Leasing Group.
Operating Profit Operating profit by segment for the years ended December 31, 2024, 2023, and 2022 was as follows: Year Ended December 31, 2024 2023 2022 (in millions) Railcar Leasing and Services Group $ 464.0 $ 437.5 $ 401.8 Rail Products Group 189.4 112.6 65.6 Segment Totals 653.4 550.1 467.4 Corporate and other (125.7) (108.3) (80.8) Restructuring activities, net (4.3) 2.2 (1.0) Eliminations (31.9) (27.0) (51.6) Consolidated Total $ 491.5 $ 417.0 $ 334.0 Discussion of Consolidated Results Revenues – Our revenues for the year ended December 31, 2024 were $3,079.2 million, representing an increase of $95.9 million, or 3.2%, over the prior year, primarily due to a higher volume of external repairs and higher lease rates in the Leasing Group and higher external deliveries, partially offset by a lower volume of external sustainable railcar conversions in the Rail Products Group.
(2) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. 37 Table of Contents Rail Products Group Year Ended December 31, Percent Change 2023 2022 ($ in millions) Revenues: Rail products (1) $ 2,363.7 $ 1,819.0 29.9 % Maintenance services 251.3 203.8 23.3 % Other 88.0 51.9 69.6 % Total revenues $ 2,703.0 $ 2,074.7 30.3 % Operating costs: Cost of revenues $ 2,543.7 $ 1,988.0 28.0 % Selling, engineering, and administrative expenses 35.9 34.2 5.0 % Gains on dispositions of property (6.0) (6.6) * Operating profit $ 129.4 $ 59.1 119.0 % Operating profit margin 4.8 % 2.8 % * Not meaningful (1) Includes sustainable railcar conversion revenues of $170.6 million, representing 1,775 railcars, for the year ended December 31, 2023.
(2) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. 37 Table of Contents Rail Products Group Year Ended December 31, Percent Change 2024 2023 2022 2024 versus 2023 2023 versus 2022 ($ in millions) Revenues: Rail products (1) $ 2,321.7 $ 2,363.7 $ 1,819.0 (1.8) % 29.9 % Parts & components 109.4 115.7 66.5 (5.4) % 74.0 % Total revenues $ 2,431.1 $ 2,479.4 $ 1,885.5 (1.9) % 31.5 % Operating costs: Cost of revenues $ 2,209.0 $ 2,336.0 $ 1,789.9 (5.4) % 30.5 % Selling, engineering, and administrative expenses 32.8 30.5 29.1 7.5 % 4.8 % Gains (losses) on dispositions of property 0.1 (0.3) (0.9) * * Operating profit $ 189.4 $ 112.6 $ 65.6 68.2 % 71.6 % Operating profit margin 7.8 % 4.5 % 3.5 % * Not meaningful (1) Includes sustainable railcar conversion revenues of $82.3 million, representing 1,095 railcars, for the year ended December 31, 2024.
Includes sustainable railcar conversion revenues of $163.7 million, representing 1,725 railcars, for the year ended December 31, 2022. Revenues for the Rail Products Group increased for the year ended December 31, 2023 by 30.3% when compared to the prior year period.
Includes sustainable railcar conversion revenues of $170.6 million, representing 1,775 railcars, for the year ended December 31, 2023. Includes sustainable railcar conversion revenues of $163.7 million, representing 1,725 railcars, for the year ended December 31, 2022.
Adjusted Free Cash Flow is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following table.
This measure is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus net gains on lease portfolio sales and is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following table.
We believe when evaluated over time, these indicators collectively drive long-term sustainable value creation and measure the effectiveness of our value proposition for stockholders. * Non-GAAP financial measure. See the Non-GAAP Financial Measures section within this Form 10-K for a reconciliation to the most directly comparable GAAP measure and why management believes this measure is useful to management and investors.
We believe when evaluated over time, these indicators collectively drive long-term sustainable value creation and measure the effectiveness of our value proposition for stockholders. * Non-GAAP financial measure.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur earnings could be affected by changes in interest rates due to the impact those changes have on our variable rate debt obligations, which represented 26.6% of our total debt as of December 31, 2023.
Biggest changeOur earnings could be affected by changes in interest rates due to the impact those changes have on our variable rate debt obligations, which represented 27% of our total debt as of December 31, 2024. After considering the effect of interest rate hedges, our variable rate debt represents 16% of our total debt as of December 31, 2024.
As of December 31, 2023, a hypothetical 10% change in foreign currency exchange rates on our forward contracts and options would not have a material impact on the Consolidated Financial Statements. In addition, we are subject to market risk related to our net investments in our foreign subsidiaries.
As of December 31, 2024, a hypothetical 10% change in foreign currency exchange rates on our forward contracts and options would not have a material impact on the Consolidated Financial Statements. In addition, we are subject to market risk related to our net investments in our foreign subsidiaries.
The impact of an increase in interest rates was determined based on the impact of the hypothetical change in interest rates and scheduled principal payments on our variable-rate debt obligations as of December 31, 2023 and 2022.
The impact of an increase in interest rates was determined based on the impact of the hypothetical change in interest rates and scheduled principal payments on our variable-rate debt obligations as of December 31, 2024 and 2023.
In comparison, at December 31, 2022, we estimated that if interest rates averaged one percentage point more in fiscal year 2023 than they did during 2022, our interest expense would have increased by $12.3 million.
In comparison, at December 31, 2023, we estimated that if interest rates averaged one percentage point more in fiscal year 2024 than they did during 2023, our interest expense would have increased by $8.7 million.
If interest rates average one percentage point more in fiscal year 2024 than they did during 2023, our interest expense would increase by $8.7 million, after considering the effects of interest rate hedges.
If interest rates average one percentage point more in fiscal year 2025 than they did during 2024, our interest expense would increase by $9.0 million, after considering the effects of interest rate hedges.
The net investment in foreign subsidiaries as of December 31, 2023 was $55.5 million. The impact of such market risk exposures as a result of foreign exchange rate fluctuations has not historically been material to us. 51 Table of Contents
The net investment in foreign subsidiaries as of December 31, 2024 was $80.7 million. The impact of such market risk exposures as a result of foreign exchange rate fluctuations has not historically been material to us. 50 Table of Contents
A one percentage point increase in the interest rate yield would decrease the fair value of the fixed rate debt by approximately $110.9 million. A one percentage point decrease in the interest rate yield would increase the fair value of the fixed rate debt by approximately $115.7 million.
A one percentage point increase in the interest rate yield would decrease the fair value of the fixed rate debt by approximately $107.0 million. A one percentage point decrease in the interest rate yield would increase the fair value of the fixed rate debt by approximately $110.4 million.

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