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What changed in TRINITY INDUSTRIES INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of TRINITY INDUSTRIES INC's 2022 and 2023 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 2023 report.

+304 added−314 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-21)

Top changes in TRINITY INDUSTRIES INC's 2023 10-K

304 paragraphs added · 314 removed · 238 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

47 edited+4 added−3 removed31 unchanged
Biggest changeShe joined the Company in 2015 as Deputy General Counsel, and was elected Vice President and Deputy General Counsel in 2016. Prior to joining Trinity, Ms. Teachout was a partner at the law firm of Akin Gump Strauss Hauer & Feld LLP from 2012 to 2015. Before joining Akin Gump, Ms.
Biggest changeEwing 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.
Our rail platform offers a complete portfolio of railcar solutions to our customers as summarized below: Commercial End Markets & Commodities Agriculture Construction & Metals Consumer Products Energy Refined Products & Chemicals Covered Hopper Cars Grain Products, Dry Fertilizer, Flour, Starch Cement, Construction Materials, Lumber Industrial Sand Plastics Open Hopper & Gondola Cars Scrap Metal, Aggregates, Finished Steel Coal Other Freight Cars Food Products Lumber, Steel and Metals, Cement Autos, Paper, Intermodal Other Chemicals Non-Pressure Tank Cars Food Products, Grain Products Aggregates (Clay Slurry) Crude Oil, Biofuels Chemicals, Petroleum Products Pressure Tank Cars Fertilizer Liquified Gases, Chemicals, Petroleum Products Railcar Leasing and Management Services Group.
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 .
These companies operate in various markets including agriculture, construction and metals, consumer products, energy, and refined products and chemicals. 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 to ten years.
Our customers include railroads, leasing companies, and industrial shippers of products in various markets, such as agriculture, construction and metals, consumer products, energy, and refined products and chemicals. We compete in the North American market primarily against four major railcar manufacturers and numerous maintenance services providers.
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.
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.
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.
Additionally, our sustainable railcar conversion program repurposes and reuses railcar materials and components to sustainably 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.
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.
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 used to deliver our products, 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 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.
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.
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.
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.
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
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.
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 typically use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers to reduce the impact of plate and coil steel price volatility on our operating profit. However, higher steel prices have resulted in increases in the cost of certain railcar components and could reduce demand for new railcars.
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 plate and coil steel price volatility on our operating profit. However, volatility in steel prices impacts the cost of certain railcar components, and higher steel prices could reduce demand for new railcars.
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 2023. Name Age Office Officer Since E. Jean Savage 59 Chief Executive Officer and President 2020 Eric R.
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.
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. Human Capital.
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.
The TrinityRail platform provides railcar leasing and management services, railcar manufacturing, and railcar maintenance and modification 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.
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.
Railcars under management, including those owned by third-party investors, totaled 141,675 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 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.
We encourage and support employee resource and networking groups, our diversity, equity and inclusion committee, and other employee groups, which offer educational, professional development, and community service opportunities. We also provide focused training, mentoring, and employee development for specialized positions, such as plant managers, engineers, accountants, and more.
We encourage and support employee resource and networking groups and other employee groups, which offer educational, professional development, and community service opportunities. We also provide focused training, mentoring, and employee development for specialized positions, such as plant managers, engineers, accountants, and more.
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. (“Caterpillar”), a manufacturer of construction, industrial, and mining equipment.
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.
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.
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.
In accordance with the International Capital Market Association's Green Bond Principles, 2018 and the Loan Syndications and Trading Association's Green Loan Principles, 2020, TILC will manage and report on eligible projects and assets to existing debt holders.
In accordance with the International Capital Market Association's Green Bond Principles, 2018 and the Loan Syndications and Trading Association's Green Loan Principles, 2020, TILC manages and reports on eligible projects and assets to existing debt holders.
Our Trinsight Logistics Platform is a leader in the rail industry digital transformation by providing 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. The railcars in our lease fleet are leased to industrial shippers and railroads.
(1) Data presented in this chart includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements, which totaled 108,440 railcars as of December 31, 2022. 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 109,295 railcars as of December 31, 2023. 7 Table of Contents Rail Products Group .
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. 10 Table of Contents Governance. Our goal is to promote the long-term interests of stakeholders, strengthen accountability, and inspire trust.
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.
We make available on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments thereto, as soon as reasonably practicable after such material is filed with, or furnished to, the SEC.
Our Internet website address is www.trin.net . Information on the website is available free of charge. We make available on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments thereto, as soon as reasonably practicable after such material is filed with, or furnished to, the SEC.
The Green Financing Framework will enable 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 issued over $4 billion of railcar-related debt that meets the criteria and qualifies for the Green Financing designation. 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. 11 Table of Contents Governmental Regulation. Railcar Industry.
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 customers and our lease fleet.
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.
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. 9 Table of Contents Mr. McDowell has served as Vice President and Chief Accounting Officer since 2018.
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.
We benchmark overall employee engagement with an annual cross-organization survey targeting metrics such as safety, job satisfaction and more, and use the results of this survey to guide our efforts to improve the employee experience. Human Rights.
We benchmark overall employee engagement with an annual cross-organization survey targeting metrics such as career growth and development, manager effectiveness, team dynamics, and more, and use the results of this survey to guide our efforts to improve the employee experience. Human Rights.
The principal material used in railcar manufacturing is steel. During 2022, the supply of steel was sufficient to support our manufacturing requirements. Steel prices, which are subject to volatility, were elevated over much of the last two years and are a major component of our cost of revenues.
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 following table presents the approximate headcount breakdown of employees by reportable segment as of December 31, 2022: Railcar Leasing and Management Services Group 120 Rail Products Group 8,535 Corporate and Enterprise Support 560 9,215 As of December 31, 2022, approximately 2,215 employees were employed in the U.S. and 7,000 were employed in Mexico.
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.
We strive to employ company resources in ways that make positive contributions to our stakeholders and the communities in which we operate. As we pursue improvements to our products and services, we keep in mind the environmental and societal impacts of our decisions and work to protect natural resources and the environment for the benefit of current and future generations.
As we pursue improvements to our products and services, we keep in mind the environmental and societal impacts of our decisions and work to protect natural resources and the environment for the benefit of current and future generations.
We believe that our operations and facilities, whether owned, managed, or leased, are in substantial compliance with applicable environmental laws and regulations and that any non-compliance is not likely to have a material adverse effect on our operations or financial condition.
We believe that our operations and facilities, whether owned, managed, or leased, are in substantial compliance with applicable environmental laws and regulations and that any non-compliance is not likely to have a material adverse effect on our operations or financial condition. See Item 1A for further discussion of risk factors with regard to environmental, governmental, and other matters. Additional Information.
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 customers' products at each stage of the product lifecycle, including recycling the railcar through scrap and salvage at the end of its useful life.
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 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. 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. 9 Table of Contents Information about our Executive Officers.
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.
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.
As of December 31, 2022, the lease fleet of our subsidiaries included 108,440 railcars that were 97.9% utilized, of which 105,630 railcars were owned by TILC or its affiliates and 2,810 railcars were leased from others and are not reflected in the property, plant, and equipment amounts reported on our Consolidated Balance Sheet.
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.
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.
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.
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. Marchetto has served as Executive Vice President and Chief Financial Officer since 2020.
(“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.
He joined the Company in 2013 as Vice President and Chief Audit Executive and was named Vice President and Chief Compliance Officer in 2017. 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 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.
We offer a full range of maintenance services and flexible solutions, from field inspections and comprehensive compliance testing to standard repairs and maintenance, specialized cleaning, inspection, and testing at multiple facilities in the U.S. Additionally, we provide modification capabilities and assist in transitioning railcars to new industry standards.
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.
Marchetto 53 Executive Vice President and Chief Financial Officer 2001 Steven L. McDowell 61 Vice President and Chief Accounting Officer 2013 Gregory B. Mitchell 57 Executive Vice President and Chief Commercial Officer 2007 Kevin Poet 56 Executive Vice President, Operations and Support Services 2020 Sarah R. Teachout 50 Executive Vice President and Chief Legal Officer 2016 Ms.
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.
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.
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.
Our Board of Directors and senior management teams are also committed to the Company’s continued respect for human rights throughout all our operations. The Corporate Governance and Directors Nominating Committee of our Board oversees (i) the preparation of the Company's Corporate Social Responsibility Report and (ii) the actions and steps taken towards the Company's environmental, social, and governance goals.
The Corporate Governance and Directors Nominating Committee of our Board oversees (i) the process and preparation of the Company's Corporate Social Responsibility Report and (ii) the actions and steps taken towards the Company's environmental, social, and governance goals.
Poet has served as Executive Vice President, Operations and Support Services since 2022, having previously served as Executive Vice President, Support Services since 2020. He joined Trinity in 2020 from Siemens AG, where from 2016 to 2019 he served in a variety of operational roles, including most recently as Vice President of Operations for Siemens Energy, Inc.
He joined Trinity in 2020 from Siemens AG, where from 2016 to 2019 he served in a variety of operational roles, including most recently as Vice President of Operations for Siemens Energy, Inc. From 2006 to 2016, he served in several operational roles of increasing responsibility for Ford Motor Company. Commitment to Sustainability.
He was named President of Highway Products in 2010. In 2018, he was named Chairman of Trinity Highway Products and Trinity Logistics. Prior to joining Trinity in 2007, he served as an executive or in senior leadership in supply chain for companies such as Glazers Corporation, Gap Inc., and Wal-Mart. Mr.
Prior to joining Trinity in 2007, he served as an executive or in senior leadership in supply chain for companies such as Glazers Corporation, Gap Inc., and Wal-Mart. Mr. Poet has served as Executive Vice President, Operations and Support Services since 2022, having previously served as Executive Vice President, Support Services since 2020.
Teachout had been a partner at the law firm of Haynes and Boone, LLP since 2007. Commitment to Sustainability. 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 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.
Prior to his tenure at Dean Foods, he served as Vice President – Internal Audit at Centex Corporation. Mr. Mitchell has served as Executive Vice President and Chief Commercial Officer since 2020, having served as Chief Commercial Officer of TrinityRail since 2019. He joined Trinity in 2007 as President of Trinity Logistics.
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.
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.
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. 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.
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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, 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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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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From 2006 to 2016, he served in several operational roles of increasing responsibility for Ford Motor Company. Ms. Teachout has served as Executive Vice President and Chief Legal Officer since 2020, having served as Senior Vice President and Chief Legal Officer since 2018.
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Our Board of Directors and senior management teams are also committed to the Company’s continued respect for human rights throughout all our operations.
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See Item 1A for further discussion of risk factors with regard to environmental, governmental, and other matters. 11 Table of Contents Additional Information. Our Internet website address is www.trin.net . Information on the website is available free of charge.
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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.
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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 .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe often use contract-specific purchasing practices, supplier commitments, contractual price escalation provisions, and other arrangements with our customers to mitigate the effect of this volatility on our operating profits for the year. To the extent that we do not have such arrangements in place, an adverse change in steel prices lowers our profitability in the Rail Products Group.
Biggest changeWe have experienced, and may continue to experience, increases in the costs of steel, components, and certain other inputs that represent a substantial portion of our cost of revenues. We typically use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers to mitigate the effect of this volatility on our operating profit.
Decreased demand could result in lower sales volumes, lower prices, and/or a decline in or loss of profits. While the business cycles of the various end markets we serve may not typically coincide, an economic downturn could affect disparate cycles simultaneously. The railcar industry has previously experienced sharp cyclical downturns and at such times operated with a minimal backlog.
Decreased demand could result in lower sales volumes, lower prices, and/or a decline in or loss of profits. While the business cycles of the various end markets we serve may not typically coincide, an economic downturn could affect disparate cycles simultaneously. The railcar industry has previously experienced sharp cyclical downturns and at such times operated with minimal backlog.
In instances where such benefits are allowed to expire or are otherwise modified or discontinued, the demand for our products could decrease, thereby creating the potential for a material adverse effect on our financial condition or results of operations.
In such instances where benefits are allowed to expire or are otherwise modified or discontinued, the demand for our products could decrease, thereby creating the potential for a material adverse effect on our financial condition or 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, including the current status of the Company's highway products litigation. There can be no assurance that we will continue to pay dividends or repurchase shares of our common stock at current levels.
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.
Instability in the global economy, negative conditions in the global credit markets, high rates of inflation, volatility in the industries that our products serve, fluctuations in commodity prices that our customers produce and transport, changes in legislative or trade policy, adverse changes in the availability of raw materials and supplies, or adverse changes in the financial condition of our customers could lead to customers' requests for deferred deliveries of our backlog orders.
Instability in the global economy, negative conditions in the global credit markets, high interest or inflation rates, volatility in the industries that our products serve, fluctuations in commodity prices that our customers produce and transport, changes in legislative or trade policy, adverse changes in the availability of raw materials and supplies, or adverse changes in the financial condition of our customers could lead to customers' requests for deferred deliveries of our backlog orders.
Our inability to produce and disseminate relevant and/or reliable data and information pertaining to our business in an efficient, cost-effective, secure, and well-controlled fashion may have significant negative impacts on confidentiality requirements and obligations and trade secret or other proprietary needs and expectations and, therefore, our future operations, profitability, and competitive position.
Our inability to produce, protect and disseminate relevant and/or reliable data and information pertaining to our business in an efficient, cost-effective, secure, and well-controlled fashion may have significant negative impacts on confidentiality requirements and obligations and trade secret or other proprietary needs and expectations and, therefore, our future operations, profitability, and competitive position.
These changes can be difficult to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements.
These changes can be difficult to predict or implement, and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements.
An interruption in production capabilities or maintenance and repair capabilities at our facilities, as a result of equipment failures, a pandemic, or acts of nature, could reduce or prevent our production, delivery, service, or repair of our products and increase our costs and expenses.
An interruption in production capabilities or maintenance and repair capabilities at our facilities, as a result of equipment failures, fires, a pandemic, or acts of nature, could reduce or prevent our production, delivery, service, or repair of our products and increase our costs and expenses.
The inability to purchase 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.
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.
However, any such challenges or opportunities are heavily dependent on the nature and degree of climate change legislation and the extent to which it applies to our industries. In response to an emerging scientific and political consensus, legislation and new rules to regulate emission of GHGs have been introduced in numerous state legislatures, the U.S. Congress, and by the USEPA.
However, any such challenges or opportunities are heavily dependent on the nature and degree of climate change legislation and the extent to which it applies to our industries. In response to scientific and political consensus, legislation and new rules to regulate emission of GHGs have been introduced in numerous state legislatures, the U.S. Congress, and by the USEPA.
If any of the following known risks or uncertainties actually occurs with material adverse effects on us, our business, financial condition, results of operations, and/or liquidity could be harmed. In that event, the market price for our various securities could decline and you may lose all or part of your investment.
If any of the following known risks or uncertainties actually occurs with material adverse effects on us, our business, financial condition, results of operations, and/or liquidity could be harmed. In that event, the market prices for our various securities could decline and you may lose all or part of your investment.
Although we maintain reserves for our reasonably estimable liability, 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.
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.
Changes in the price and demand for steel could lower our margins and profitability. The principal material used in our manufacturing segment is steel. Market steel prices exhibit periods of volatility. Steel prices may experience further volatility as a result of scrap surcharges assessed by steel mills and other market factors.
Changes in the price and demand for steel could lower our margins and profitability. The principal material used in our manufacturing segment is steel. Market steel prices exhibit periods of volatility. Steel prices may experience further volatility as a result of scrap surcharges assessed by our suppliers and other market factors.
Any breach in our information technology security systems which results in the disclosure or misuse of sensitive or confidential information or any failure to comply with data privacy laws and regulations could result in significant penalties, fines, legal liability and reputational harm.
Any breach in our information technology security systems that results in the disclosure or misuse of sensitive or confidential information or any failure to comply with data privacy laws and regulations could result in significant penalties, fines, legal liability and reputational harm.
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. 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 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.
If the Company is unable to secure financing on acceptable terms, the Company's other sources of funds, including available cash, bank facilities, and cash flow from operations may not be adequate to fund its operations and contractual commitments and refinance existing debt. We may incur increased costs due to fluctuations in interest rates and foreign currency exchange rates.
If the Company is unable to secure financing on acceptable terms, the Company's other sources of funds, including available cash, bank facilities, and cash flow from operations may not be adequate to fund its operations and contractual commitments and refinance existing debt. We are subject to increased costs due to fluctuations in interest rates and foreign currency exchange rates.
We are exposed to risks associated with fluctuations in interest rates and changes in foreign currency exchange rates. Under varying circumstances, we may seek to minimize these risks through the use of interest rate hedges and similar financial instruments and other activities, although these measures, if and when implemented, may not be effective.
We are exposed to risks associated with fluctuations in interest rates and changes in foreign currency exchange rates, particularly the Mexican peso. Under varying circumstances, we may seek to minimize these risks through the use of interest rate hedges and similar financial instruments and other activities, although these measures, if and when implemented, may not be effective.
The effects of this competition, which is often intense, could reduce our revenues and operating profits, limit our ability to grow, increase pricing pressure on our products, and otherwise affect our financial results. We may be unable to maintain railcar assets on lease at satisfactory lease rates.
The effects of this competition, which is often intense, could reduce our revenues and operating profits, limit our ability to grow, increase pricing pressure on our products, and otherwise affect our financial results. 14 Table of Contents We may be unable to maintain railcar assets on lease at satisfactory lease rates.
Our ability to accomplish these objectives is dependent upon several factors, including, among others: • the cost of and demand for leases or ownership of newer or specific-use railcar types; • the general availability in the market of competing used or new railcars; • the degree of obsolescence of leased or unleased railcars, including railcars subject to regulatory obsolescence; • the prevailing market and economic conditions, including the availability of credit, interest rates, and inflation rates; • the market demand or governmental mandate for refurbishment; and • the volume and nature of railcar traffic and loadings.
Our ability to accomplish these objectives is dependent upon several factors, including, among others: • the cost of and demand for leases or ownership of newer or specific-use railcar types; • the composition of our lease fleet in relation to market demand for various types of railcars; • the general availability in the market of competing used or new railcars; • the degree of obsolescence of leased or unleased railcars, including railcars subject to regulatory obsolescence; • the prevailing market and economic conditions, including the availability of credit, interest rates, and inflation rates; • the market demand or governmental mandate for refurbishment; and • the volume and nature of railcar traffic and loadings.
Repercussions from terrorist activities or armed conflict could harm our business. Terrorist activities, anti-terrorist efforts, and other armed conflict involving the U.S. or its interests abroad may adversely affect the U.S. and global economies, potentially preventing us from meeting our financial and other obligations. In particular, the negative impacts of these events may affect the industries in which we operate.
Terrorist activities, anti-terrorist efforts, and other armed conflict involving the U.S. or its interests abroad may adversely affect the U.S. and global economies, potentially preventing us from meeting our financial and other obligations. In particular, the negative impacts of these events may affect the industries in which we operate.
Speculative trading in energy futures in the world markets could also result in an increase in natural gas and general energy cost.
Speculative trading in energy futures in the world markets could also result in an increase in natural gas and general energy costs.
The trading price of our common stock could fluctuate widely in response to, among other things, the risk factors described in this report and other factors including: • actual or anticipated variations in quarterly and annual results of operations; • changes in recommendations by securities analysts; • changes in composition and perception of the investors who own our stock and other securities; • changes in ratings from national rating agencies on publicly or privately owned debt securities; • operating and stock price performance of other companies that investors deem comparable to us; • news reports relating to trends, concerns and other issues in the industries in which we operate; • actual or expected economic conditions that are perceived to affect our Company; • perceptions in the marketplace regarding us and/or our competitors; • fluctuations in prices of commodities that our customers produce and transport; • significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors; • changes in government regulations and policies and interpretations of those regulations and policies; • stockholder activism; and • dissemination of false or misleading statements through the use of social and other media to discredit our Company, disparage our products, or to harm our reputation. 22 Table of Contents Additionally, in the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation has often been initiated.
The trading price of our common stock could fluctuate widely in response to, among other things, the risk factors described in this report and other factors including: • actual or anticipated variations in quarterly and annual results of operations; • changes in recommendations by securities analysts; • changes in composition and perception of the investors who own our stock and other securities; • changes in ratings from national rating agencies on publicly or privately owned debt securities; • operating and stock price performance of other companies that investors deem comparable to us; • news reports relating to trends, concerns and other issues in the industries in which we operate; • actual or expected economic conditions that are perceived to affect our Company; • perceptions in the marketplace regarding us and/or our competitors; • fluctuations in prices of commodities that our customers produce and transport; • significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors; • changes in government regulations and policies and interpretations of those regulations and policies; • stockholder activism; and • dissemination of false or misleading statements through the use of social and other media to discredit our Company, disparage our products, or to harm our reputation.
If the IRS successfully contests a tax position that we take, we may be required to pay additional taxes or fines which may not have been previously accrued that may adversely affect our results of operations and financial position.
If the IRS successfully contests a tax position that we take, we may be required to pay additional taxes or fines which may not have been previously accrued that may adversely affect our results of operations and financial position. Item 1B. Unresolved Staff Comments. None.
We produce many of our products at our manufacturing facilities in Mexico. Our business benefits from free trade agreements such as the U.S.-Mexico-Canada Agreement.
We produce many of our products at our manufacturing facilities in Mexico. Our businesses benefit from free trade agreements such as the U.S.-Mexico-Canada Agreement.
From time to time we may take tax positions that the Internal Revenue Service or other taxing jurisdictions may contest. We have in the past and may in the future take tax positions that the Internal Revenue Service (“IRS”) or other taxing jurisdictions may challenge.
We have in the past and may in the future take tax positions that the Internal Revenue Service (“IRS”) or other taxing jurisdictions may challenge.
We have indebtedness both at the parent level and at the subsidiary level. Our level of indebtedness could have a material adverse effect on our business and make it more difficult for us to satisfy our obligations under our outstanding indebtedness and notes.
We have indebtedness, which could have negative consequences on our business or results of operations. We have indebtedness both at the parent level and at the subsidiary level. Our level of indebtedness could have a material adverse effect on our business and make it more difficult for us to satisfy our obligations under our outstanding indebtedness and notes.
In general, the Company, and more specifically its leasing subsidiaries' operations, relies in large part upon banks and capital markets to fund its operations and contractual commitments and refinance existing debt. These markets can experience high levels of volatility and access to capital can be constrained for extended periods of time.
In general, the Company and its leasing subsidiaries rely in large part upon banks and capital markets to fund their operations and contractual commitments and refinance existing debt. These markets can experience high levels of volatility and access to capital can be constrained for extended periods of time.
Further, we may incur large expenditures to investigate or remediate, to recover data, to repair or replace networks or information systems, or to protect against similar future events. Increasing insurance claims and expenses could lower profitability and increase business risk.
Further, we may incur large expenditures to investigate or remediate the impacts of such breaches, to recover data, to repair or replace networks or information systems, or to protect against similar future events. 16 Table of Contents Increasing insurance claims and expenses could lower profitability and increase business risk.
Moreover, any accident or incident involving our industries in general or us or our products specifically, even if we are fully insured, contractually indemnified, or not held to be liable, could negatively affect our reputation among customers and the public, thereby making it more difficult for us to compete effectively, and could significantly affect the cost and availability of insurance in the future. 16 Table of Contents We have indebtedness, which could have negative consequences on our business or results of operations.
Moreover, any accident or incident involving our industries in general or us or our products specifically, even if we are fully insured, contractually indemnified, or not held to be liable, could negatively affect our reputation among customers and the public, thereby making it more difficult for us to compete effectively, and could significantly affect the cost and availability of insurance in the future.
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 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.
Risks associated with these actions include potential adverse effects on employee morale, loss of accumulated knowledge and/or inefficiency, unfavorable political responses to such actions, unforeseen delays in implementation, unexpected costs, and the failure to meet operational targets, any of which may impair our ability to achieve anticipated benefits, harm our business, or have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. 19 Table of Contents The Company could potentially fail to successfully integrate new businesses or products into its current business.
Risks associated with these actions include potential adverse effects on employee morale, loss of accumulated knowledge and/or inefficiency, unfavorable political responses to such actions, unforeseen delays in implementation, unexpected costs, and the failure to meet operational targets, any of which may impair our ability to achieve anticipated benefits, harm our business, or have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.
The carrying value of a long-lived asset to be held and used is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset is less than the carrying value.
We periodically evaluate for potential impairment the carrying values of our long-lived assets to be held and used. The carrying value of a long-lived asset to be held and used is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset is less than the carrying value.
However, future events, such as changes in, or modified interpretations of, existing environmental laws and regulations or enforcement policies, or further investigation or evaluation of the potential health hazards associated with the manufacture of our products and related business activities and properties, may give rise to additional compliance and other costs that could have a material adverse effect on our financial condition and operations. 21 Table of Contents In addition to environmental laws, the transportation of commodities by railcar raises potential risks in the event of an accident that results in the release of an environmentally sensitive substance.
However, future events, such as changes in, or modified interpretations of, existing environmental laws and regulations or enforcement policies, or further investigation or evaluation of the potential health hazards associated with the manufacture of our products and related business activities and properties, may give rise to additional compliance and other costs that could have a material adverse effect on our financial condition and operations.
During 2022, 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 and distribution of our products, and we expect elevated levels of inflation related to these costs to continue in 2023.
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.
Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning the Company in general or our products, our leadership or our reputation among customers and the public at large, thereby making it more difficult for us to compete effectively, and potentially having a material adverse effect on our business, operations, or financial condition.
Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning the Company in general or our products, our leadership or our reputation among customers and the public at large, thereby making it more difficult for us to compete effectively, and potentially having a material adverse effect on our business, operations, or financial condition. 23 Table of Contents From time to time we may take tax positions that the Internal Revenue Service or other taxing jurisdictions may contest.
We are a party to collective bargaining agreements with various labor unions at our operations in Mexico. Disputes with regard to the terms of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers.
Disputes with regard to the terms of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers.
We may be unable to effectively implement organizational redesigns, cost reductions, or restructuring efforts and our business might be adversely affected. From time to time we engage in organizational redesigns, cost reductions, and/or similar restructuring plans, which may include organizational changes, workforce reductions, facility consolidations or closures, and other cost reduction initiatives.
From time to time we engage in organizational redesigns, cost reductions, and/or similar restructuring plans, which may include organizational changes, workforce reductions, facility consolidations or closures, and other cost reduction initiatives.
Any material and untimely changes in interest rates or exchange rates could result in significant losses to us. 20 Table of Contents Risks Related to Laws and Regulations Violations of or changes in the regulatory requirements applicable to the industries in which we operate may increase our operating costs, reduce the demand for our products and services, or negatively affect our ability to implement our strategic and operational plans.
Risks Related to Laws and Regulations Violations of or changes in the regulatory requirements applicable to the industries in which we operate may increase our operating costs, reduce the demand for our products and services, or negatively affect our ability to implement our strategic and operational plans.
Risks Related to our Common Stock The price for our common stock is subject to volatility, which may result in losses to our stockholders. Stock price volatility affects the price at which our common stock can be sold and could subject our stockholders to losses.
Stock price volatility affects the price at which our common stock can be sold and could subject our stockholders to losses.
Shortages of, or the inability to attract, train, integrate and retain, some types of skilled laborers, such as welders, restrict our ability to maintain or increase production rates and could increase our labor costs.
Shortages of, or the inability to attract, train, integrate and retain, some types of skilled laborers, such as welders, restrict our ability to maintain or increase production rates and increase our labor costs. An overall labor shortage, lack of skilled labor, increased turnover, or higher labor costs could adversely impact our operations and profitability.
The loss of the services of one or more key members of our management team could result in increased costs associated with attracting and retaining a replacement and could disrupt our operations and result in a loss of revenues. Some of our employees belong to labor unions, and strikes or work stoppages could adversely affect our operations.
The loss of the services of one or more key members of our management team could result in increased costs associated with attracting and retaining a replacement and could disrupt our operations and result in a loss of revenues.
An overall labor shortage, lack of skilled labor, increased turnover, or higher labor costs could adversely impact our operations and profitability. 12 Table of Contents 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 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.
Any such litigation could result in substantial costs and a diversion of management’s attention and resources. We cannot predict the outcome of any such litigation. 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.
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.
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.
We use various gases, including natural gas, at our manufacturing facilities. An outbreak or escalation of hostilities between the U.S. and any foreign power and, in particular, prolonged conflicts could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of natural gas or energy in general.
An outbreak or escalation of hostilities between the U.S. and any foreign power or other prolonged conflicts that may disrupt global energy markets could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of natural gas or energy in general.
Political, legal, trade, 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.
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.
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.
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.
For a further discussion of some of our critical accounting policies and standards and recent accounting changes, see Critical Accounting Policies and Estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 of the Consolidated Financial Statements.
For a further discussion of some of our critical accounting policies and standards and recent accounting changes, see Critical Accounting Policies and Estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 of the Consolidated Financial Statements. 22 Table of Contents Risks Related to our Common Stock The price for our common stock is subject to volatility, which may result in losses to our stockholders.
These types of warranty claims could result in significant costs associated with product recalls or product repair or replacement, and damage to our reputation. 17 Table of Contents Equipment failures, a pandemic, or extensive damage to our facilities, including as might occur as a result of natural disasters, could lead to production, delivery, or service curtailments or shutdowns, loss of revenue or higher expenses.
Equipment failures, a pandemic, or extensive damage to our facilities, including as might occur as a result of natural disasters or fires, could lead to production, delivery, or service curtailments or shutdowns, loss of revenue or higher expenses.
Any material failure or interruption of service could adversely affect our relations with suppliers and customers, place us in violation of confidentiality and data protection laws, rules, and regulations, and result in negative impacts to our market share, operations, profitability, and reputation. 15 Table of Contents We face risks related to cybersecurity attacks and other breaches of our systems and information technology.
Any material failure or interruption of service, including potential disruption from periodic financial or operating system upgrades, could adversely affect our relations with suppliers and customers, place us in violation of confidentiality and data protection laws, rules, and regulations, and result in negative impacts to our market share, operations, profitability, and reputation.
Our inability to re-lease or sell leased or unleased railcars in a timely manner on favorable terms could result in lower lease rates, lower lease utilization percentages, and reduced revenues and operating profit. 14 Table of Contents The limited number of customers for certain of our products, the variable purchase patterns of our customers, and the timing of completion, delivery, and customer acceptance of orders may cause our revenues and income from operations to vary substantially each quarter, potentially resulting in significant fluctuations in our quarterly results.
The limited number of customers for certain of our products, the variable purchase patterns of our customers, and the timing of completion, delivery, and customer acceptance of orders may cause our revenues and income from operations to vary substantially each quarter, potentially resulting in significant fluctuations in our quarterly results.
Any of these occurrences could have a material adverse impact on our operating results, revenues, and costs. 18 Table of Contents We may be required to reduce the value of our long-lived assets and/or goodwill, which would weaken our financial results. We periodically evaluate for potential impairment the carrying values of our long-lived assets to be held and used.
This could result in delays in or cancellations of the purchase of our products or shortages in raw materials, parts or components. Any of these occurrences could have a material adverse impact on our operating results, revenues, and costs. We may be required to reduce the value of our long-lived assets and/or goodwill, which would weaken our financial results.
When litigation arising from the installation, maintenance, replacement, or use of our products is filed against the Company, recourse to such governments or authorized agencies may be subject to sovereign immunity or related defenses thereby exposing the Company to risk of liability and increased costs irrespective of fault.
When litigation arising from the installation, maintenance, replacement, or use of our products is filed against the Company, recourse to such governments or authorized agencies may be subject to sovereign immunity or related defenses thereby exposing the Company to risk of liability and increased costs irrespective of fault. 17 Table of Contents Many of our products are or were sold to leasing companies, contractors, distributors, and installers who may misuse, abuse, improperly install or improperly or inadequately maintain or repair such products thereby potentially exposing the Company to claims that could increase our costs and weaken our financial condition.
As insurance policies expire, premiums for renewed or new coverage may increase and/or require that we increase our self-insured retention or deductibles. The Company maintains primary coverage and excess coverage policies.
As insurance policies expire, premiums for renewed or new coverage may increase and/or require that we increase our self-insured retentions or deductibles. The Company maintains primary coverage and excess coverage policies. If the number of claims or the dollar amounts of such claims rise in any policy year, we could suffer additional costs.
There may be other unforeseen impacts of climate change that could have a material adverse effect on our business, operations, and results. Ultimately, when or if these impacts may occur cannot be assessed until scientific analysis and legislative policy are more developed and specific legislative proposals begin to take shape.
Ultimately, when or if these impacts may occur cannot be assessed until scientific analysis and legislative policy are more developed and specific legislative proposals begin to take shape. 18 Table of Contents Repercussions from terrorist activities or armed conflict could harm our business.
Any of these conditions or events could result in reductions in our revenues, increased price competition, or increased operating costs, which could adversely affect our business, results of operations, and financial condition.
Any of these conditions or events could result in reductions in our revenues, increased price competition, or increased operating costs, which could adversely affect our business, results of operations, and financial condition. 20 Table of Contents Our access to capital may be limited or unavailable due to deterioration of conditions in the global capital markets, weakening of macroeconomic conditions, and negative changes in our credit ratings.
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. Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken our financial condition.
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.
In addition, meeting production demands is dependent on our ability to obtain a sufficient amount of steel. An unanticipated interruption in our supply chain could have an adverse impact on both our margins and production schedules. Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs.
An unanticipated interruption in our supply chain could have an adverse impact on both our margins and production schedules. 15 Table of Contents Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs. We use various gases, including natural gas, at our manufacturing facilities.
See Note 11 of the Consolidated Financial Statements for further information regarding impairment charges recorded during the year ended December 31, 2020. Railcars as a significant mode of transporting freight could decline, experience a shift in types of modal transportation, and/or certain railcar types could become obsolete.
Railcars as a significant mode of transporting freight could decline, experience a shift in types of modal transportation, and/or certain railcar types could become obsolete.
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. It is important that the data processed by these systems remains confidential, as it often includes sensitive information relating to our business, customers, employees, and vendors.
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.
As with most companies, we are subject to attempted cybersecurity disruptions and intrusions, and we expect such attempts to continue. At times, certain of our vendors have suffered cybersecurity breaches. These incidents have not had a material adverse impact on our operations, and, to date, the Company has not experienced a material information security breach itself.
These incidents have not had a material adverse impact on our operations, and, to date, the Company has not experienced a material information security breach itself.
Some of our customers place orders for our products in reliance on their ability to utilize tax benefits, which could be discontinued or allowed to expire without extension thereby reducing demand for certain of our products. 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.
See Note 15 of the Consolidated Financial Statements for further information on our potential exposure to environmental liabilities. Some of our customers place orders for our products in reliance on their ability to utilize tax benefits, which could be discontinued or allowed to expire without extension thereby reducing demand for certain of our products.
A material disruption in the movement of rail traffic could negatively impact our business and results of operations. 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.
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.
Any such disruption or conditions could harm our business and adversely impact our results of operations.
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.
We have not, to date, been materially affected by any of these risks, but 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.
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.
Removed
Global health crises, such as the COVID-19 pandemic, have had and could continue to have a material adverse effect on our results of operations and could have a material adverse effect on our ability to operate, financial condition, liquidity, access to capital, payment of dividends, and capital investments.
Added
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.
Removed
The continued evolution of COVID-19 and its variants, as well as periodic spikes in infection rates, local outbreaks on our sites or supplier or customer sites, in spite of safety measures, have had, and similar issues in the future could have, a material adverse effect on our results of operations.
Added
These closings negatively impacted our deliveries of railcars.
Removed
The prolonged negative economic impact of the COVID-19 pandemic and the related governmental response could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, access to capital, payment of dividends, and capital investments.
Added
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.
Removed
Although restrictions have eased, several public health organizations have at times recommended certain measures to slow and limit the transmission of the virus, including quarantines, travel restrictions, and social distancing. Such preventive measures, or others we may voluntarily put in place, may have a material adverse effect on our business for an indefinite period of time.
Added
The composition of our lease fleet may not be optimally aligned with market demand or conditions.
Removed
Additionally, illness or exposure to the virus may lead to decreased employee availability. Our suppliers and customers have also faced these and other challenges, which have disrupted and could continue to disrupt our supply chain. These challenges could also result in decreased demand, or our customers' inability to pay, for our products and services.
Added
Our inability to re-lease or sell leased or unleased railcars in a timely manner on favorable terms could result in lower lease rates, lower lease utilization percentages, and reduced revenues and operating profit.
Removed
The COVID-19 pandemic may also materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization, access to capital, and capital investments.
Added
To the extent that we do not have such arrangements in place, an adverse change in steel prices lowers our profitability in the Rail Products Group. In addition, meeting production demands is dependent on our ability to obtain a sufficient amount of steel.
Removed
Although these disruptions may continue to occur, the long-term economic impact and near-term financial impacts of the COVID-19 pandemic, including but not limited to, possible additional impairment, restructuring, and other charges, cannot be reliably quantified or estimated at this time due to the uncertainty of future developments.
Added
It is important that the data processed by these systems remains confidential, as it often includes sensitive information relating to our business, customers, employees, and vendors. As with most companies, we are subject to attempted cybersecurity disruptions and intrusions, and we expect such attempts to continue. At times, certain of our vendors have suffered cybersecurity breaches.
Removed
The extent to which the COVID-19 pandemic affects our results will also depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and actions taken to contain the outbreak or treat its impact, among others. 13 Table of Contents Risks related to our operations outside of the U.S., particularly Mexico, could decrease our profitability.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMexico Rail Products Group (1) 5,044,500 358,300 2,968,200 2,434,600 Corporate Offices — 166,200 158,600 7,600 5,044,500 524,500 3,126,800 2,442,200 (1) Estimated weighted average production capacity utilization at our rail manufacturing facilities was approximately 78% for the year ended December 31, 2022.
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.
We believe that additional production capacity can be achieved at our existing facilities by adding personnel, adding shifts, optimizing or outsourcing certain processes, or making additional capital investments. Item 3. Legal Proceedings. See Note 15 of the Consolidated Financial Statements. Item 4. Mine Safety Disclosures. Not applicable. 24 Table of Contents PART II
We believe that additional production capacity can be achieved at our existing facilities by adding personnel, adding shifts, optimizing or outsourcing certain processes, or making additional capital investments. Item 3. Legal Proceedings. See Note 15 of the Consolidated Financial Statements. Item 4. Mine Safety Disclosures. Not applicable. 25 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 24 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 25 Item 6. [Reserved] 26 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 52 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 51 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor the purpose of this graph, historical stock prices of Trinity prior to the spin-off of Arcosa, Inc. have been adjusted to reflect the impact of the spin. 25 Table of Contents 2017 2018 2019 2020 2021 2022 Trinity Industries, Inc. 100 75 84 104 122 124 Dow Jones US Commercial Vehicles & Trucks Index 100 84 106 136 160 188 New York Stock Exchange Composite Index 100 91 115 123 148 134 S&P 600 Machinery Index 100 81 102 117 140 132 S&P MidCap 400 100 89 112 128 159 138 S&P SmallCap 600 100 92 112 125 159 133 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, 2022: 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, 2022 through October 31, 2022 110,826 $ 27.58 108,356 $ 30.7 November 1, 2022 through November 30, 2022 319,274 $ 29.25 319,027 $ 21.3 December 1, 2022 through December 31, 2022 770 $ 29.15 — $ 250.0 Total 430,870 427,383 (1) These columns include the following transactions during the three months ended December 31, 2022: (i) the surrender to the Company of 3,318 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees, (ii) the purchase of 169 shares of common stock by the Trustee for assets held in a non-qualified employee profit-sharing plan trust, and (iii) the purchase of 427,383 shares of common stock on the open market as part of our share repurchase program.
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.
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, 2022 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, 2023 was American Stock Transfer & Trust Company.
The S&P MidCap 400 is included as we believe it is a meaningful data point as the Company's common stock was included in this index. Additionally, the S&P MidCap 400 was used in measuring the Company's relative total stockholder return for purposes of determining the performance of certain stock awards granted beginning in 2018.
The S&P SmallCap 600 is included as we believe it is a meaningful data point as the Company's common stock is included in this index. Additionally, the S&P SmallCap 600 is used in measuring the Company's relative total stockholder return for purposes of determining the performance of certain stock awards granted beginning in 2023.
Holders At January 31, 2023, we had 1,078 record holders of common stock. The par value of the common stock is $0.01 per share.
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 following graph compares our cumulative total stockholder return (assuming reinvestment of dividends) during the five-year period ended December 31, 2022 with an overall stock market index (New York Stock Exchange Composite Index) and our relevant peer group indexes (the Dow Jones US Commercial Vehicles & Trucks Index and the 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, 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 new share repurchase program authorizes the Company to repurchase up to $250 million of its common stock. There were no shares repurchased under the new share repurchase program during the three months ended December 31, 2022.
(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.
Removed
In 2022, the Company was moved from the S&P MidCap 400 Index to the S&P SmallCap 600 Index; therefore, we have shown both the S&P MidCap 400 Index and the S&P SmallCap 600 Index in the following graph. The data in the graph assumes $100 was invested on December 31, 2017.
Removed
(2) In September 2021, our Board of Directors authorized a share repurchase program effective September 9, 2021 through December 31, 2022. The share repurchase program authorized the Company to repurchase up to $250.0 million of its common stock. Shares repurchased during the three months ended December 31, 2022 totaled 427,383 shares, at a cost of approximately $12.4 million.
Removed
Our Board of Directors terminated this share repurchase program effective December 8, 2022, and the remaining authorization of $21.3 million under this program expired unused. In December 2022, our Board of Directors authorized a new share repurchase program effective December 9, 2022 with no expiration.

Item 7. Management's Discussion & Analysis

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

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Biggest changeLitigation Updates See Note 15 of the Consolidated Financial Statements for an update on the status of certain litigation retained in connection with the sale of THP. 31 Table of Contents Consolidated Results of Operations The following table summarizes our consolidated results of continuing operations for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (in millions) Revenues $ 1,977.3 $ 1,516.0 Cost of revenues 1,609.6 1,161.5 Selling, engineering, and administrative expenses 185.4 179.6 Gains on dispositions of property 152.7 78.2 Restructuring activities, net 1.0 (3.7) Total operating profit 334.0 256.8 Interest expense, net 207.6 191.4 Loss on extinguishment of debt 1.5 11.7 Pension plan settlement — (0.6) Other, net (1.6) (0.9) Income from continuing operations before income taxes 126.5 55.2 Provision (benefit) for income taxes 27.6 15.9 Income from continuing operations $ 98.9 $ 39.3 Revenues The tables below present revenues by segment for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 Revenues Percent External Intersegment Total Change (in millions) Railcar Leasing and Management Services Group $ 769.8 $ 0.8 $ 770.6 4.8 % Rail Products Group 1,207.5 867.2 2,074.7 64.0 % Segment Totals 1,977.3 868.0 2,845.3 42.3 % Eliminations – Lease Subsidiary — (867.2) (867.2) Eliminations – Other — (0.8) (0.8) Consolidated Total $ 1,977.3 $ — $ 1,977.3 30.4 % Year Ended December 31, 2021 Revenues External Intersegment Total (in millions) Railcar Leasing and Management Services Group $ 734.6 $ 0.7 $ 735.3 Rail Products Group 781.4 483.4 1,264.8 Segment Totals 1,516.0 484.1 2,000.1 Eliminations – Lease Subsidiary — (478.5) (478.5) Eliminations – Other — (5.6) (5.6) Consolidated Total $ 1,516.0 $ — $ 1,516.0 32 Table of Contents Operating Costs Operating costs are comprised of cost of revenues; selling, engineering, and administrative costs; gains or losses on property disposals; and restructuring activities.
Biggest changeThese changes will have no impact to our previously reported consolidated results of operations, financial position, or cash flows. 32 Table of Contents Consolidated Results of Operations The following table summarizes our consolidated results of continuing operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 (in millions) Revenues $ 2,983.3 $ 1,977.3 Cost of revenues 2,456.2 1,609.6 Selling, engineering, and administrative expenses 201.9 185.4 Gains on dispositions of property 89.6 152.7 Restructuring activities, net (2.2) 1.0 Total operating profit 417.0 334.0 Interest expense, net 265.5 207.6 Loss on extinguishment of debt — 1.5 Other, net 2.5 (1.6) Income from continuing operations before income taxes 149.0 126.5 Provision (benefit) for income taxes 9.0 27.6 Income from continuing operations $ 140.0 $ 98.9 Revenues The tables below present revenues by segment for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 Revenues Percent External Intersegment Total Change (in millions) Railcar Leasing and Management Services Group $ 870.0 $ 0.9 $ 870.9 13.0 % Rail Products Group 2,113.3 589.7 2,703.0 30.3 % Segment Totals 2,983.3 590.6 3,573.9 25.6 % Eliminations – Lease Subsidiary — (589.7) (589.7) Eliminations – Other — (0.9) (0.9) Consolidated Total $ 2,983.3 $ — $ 2,983.3 50.9 % Year Ended December 31, 2022 Revenues External Intersegment Total (in millions) Railcar Leasing and Management Services Group $ 769.8 $ 0.8 $ 770.6 Rail Products Group 1,207.5 867.2 2,074.7 Segment Totals 1,977.3 868.0 2,845.3 Eliminations – Lease Subsidiary — (867.2) (867.2) Eliminations – Other — (0.8) (0.8) Consolidated Total $ 1,977.3 $ — $ 1,977.3 33 Table of Contents Operating Costs Operating costs are comprised of cost of revenues; selling, engineering, and administrative costs; gains or losses on property disposals; and restructuring activities.
Income taxes – The effective tax rate from continuing operations for the year ended December 31, 2022 was an expense of 21.8%, which differs from the U.S. statutory rate of 21.0% primarily due to foreign taxes, state income taxes, and non-deductible executive compensation, offset by taxes not recorded on our non-controlling interests in partially-owned subsidiaries, reductions in tax reserves for uncertain tax positions, and excess tax benefits associated with equity-based compensation.
Our effective tax rate from continuing operations for the year ended December 31, 2022 was an expense of 21.8%, which differs from the U.S. statutory rate of 21.0% primarily due to foreign income taxes, state income taxes, and non-deductible executive compensation, offset by taxes not recorded on our non-controlling interests in partially-owned subsidiaries, reductions in tax reserves for uncertain tax positions, and excess tax benefits associated with equity-based compensation.
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 used to deliver our products, which have impacted our ability to timely deliver these railcars to our customers.
Supply Chain Disruptions 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 have impacted our ability to timely deliver these railcars to our customers.
(4) Represents interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets. (5) Return on Equity is calculated as income (loss) from continuing operations divided by average total stockholders' equity.
(4) Represents interest income accretion related to a seller-financing agreement associated with the sale of certain non-operating assets. (5) Return on Equity is calculated as income from continuing operations divided by average total stockholders' equity.
Potential Impact if Results Differ If actual results are not consistent with management's estimates and assumptions used to calculate estimated future cash flows, we could be exposed to additional impairment losses that may be material.
Potential Impact if Results Differ If actual results are not consistent with management's estimates and assumptions used to calculate estimated future cash flows, we could be exposed to impairment losses that may be material.
New Share Repurchase Authorization – In December 2022, our Board of Directors authorized a new share repurchase program effective December 9, 2022 with no expiration. The new share repurchase program authorizes the Company to repurchase up to $250.0 million of its common stock.
Share Repurchase Authorization – 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 $250.0 million of its common stock.
As we continue to streamline our operational footprint, we may have additional gains or losses on the disposition of other non-operating facilities. 38 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. 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.
(1) 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. See "Consolidated Results of Operations" and "Segment Discussion" below for additional information regarding our operating results for the year ended December 31, 2022.
(1) 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. See "Consolidated Results of Operations" and "Segment Discussion" below for additional information regarding our operating results for the year ended 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, 2022.
(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.
Non-GAAP measures should not be considered in isolation or as a substitute for our reporting results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. For each non-GAAP financial measure, we provide a reconciliation to the most comparable GAAP measure.
Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. For each non-GAAP financial measure, we provide a reconciliation to the most comparable GAAP measure.
See Part II, Item 7 of our 2021 Annual Report on Form 10-K for a discussion of our results of operations and liquidity and capital resources as of and for the year ended December 31, 2021, including a comparison to the year ended December 31, 2020. 29 Table of Contents Long-Term Enterprise Key Performance Indicators Our key performance indicators for long-term performance are operating and Adjusted Free Cash Flow* growth, Pre-Tax ROE*, dividend growth, and book value per share growth.
See Part II, Item 7 of our 2022 Annual Report on Form 10-K for a discussion of our results of operations and liquidity and capital resources as of and for the year ended December 31, 2022, including a comparison to the year ended December 31, 2021. 30 Table of Contents Long-Term Enterprise Key Performance Indicators Our key performance indicators for long-term performance are operating and Adjusted Free Cash Flow* growth, Pre-Tax ROE*, dividend growth, and book value per share growth.
Please refer to Note 8 of the Consolidated Financial Statements for a description of our current debt obligations. 42 Table of Contents Supplemental Guarantor Financial Information Our 4.55% senior notes due 2024 ("Senior Notes") are fully and unconditionally and jointly and severally guaranteed by certain of Trinity’s 100%-owned subsidiaries: Trinity Industries Leasing Company; Trinity North American Freight Car, Inc.; Trinity Rail Group, LLC; Trinity Tank Car, Inc.; and TrinityRail Maintenance Services, Inc.
Please refer to Note 9 of the Consolidated Financial Statements for a description of our current debt obligations. 42 Table of Contents Supplemental Guarantor Financial Information Our Senior Notes due 2024 are fully and unconditionally and jointly and severally guaranteed by certain of Trinity’s 100%-owned subsidiaries: Trinity Industries Leasing Company; Trinity North American Freight Car, Inc.; Trinity Rail Group, LLC; Trinity Tank Car, Inc.; and TrinityRail Maintenance Services, Inc.
Current Debt Obligations The revolving credit facility contains several financial covenants that require the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage. In December 2022, we amended our revolving credit facility to increase the maximum leverage ratio to provide additional flexibility.
Current Debt Obligations The revolving credit facility contains several financial covenants that require the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage. In March 2023, we amended our revolving credit facility to increase the maximum leverage ratio to provide additional flexibility.
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, and railcar maintenance and modification 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 ® . The TrinityRail platform provides railcar leasing and management services; railcar manufacturing, maintenance and modifications; and other railcar logistics products and services.
Results for the years ended December 31, 2022 and 2021 included gains of $7.5 million and $7.8 million, respectively, related to insurance recoveries in excess of net book value received 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, 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.
Adjusted Free Cash Flow is reconciled to net cash provided by (used in) operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following tables.
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.
(collectively, the "Guarantor Subsidiaries”). The Senior Notes indenture agreement includes customary provisions for the release of the guarantees by the Guarantor Subsidiaries upon the occurrence of certain allowed events including the release of one or more of the Combined Guarantor Subsidiaries as guarantor under our revolving credit facility. See Note 8 of the Consolidated Financial Statements.
(collectively, the "Guarantor Subsidiaries”). The Senior Notes due 2024 indenture agreement includes customary provisions for the release of the guarantees by the Guarantor Subsidiaries upon the occurrence of certain allowed events including the release of one or more of the Guarantor Subsidiaries as guarantor under our revolving credit facility. See Note 9 of the Consolidated Financial Statements.
Our company-owned lease fleet includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. • For the year ended December 31, 2022, we made a net investment in our lease fleet of approximately $178.1 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, 2022 was $3.9 billion, compared to $1.5 billion at December 31, 2021.
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.
Net income tax refunds (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 $7.8 million and $5.4 million at December 31, 2022 and 2021, respectively.
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.
As of December 31, 2022, we were in compliance with all such financial covenants.
As of December 31, 2023, we were in compliance with all such financial covenants.
Deferred Compensation Plan for the year ending December 31, 2023 are expected to be $8.7 million, compared to $8.6 million contributed during 2022. 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, 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.
For further information regarding income taxes, see Note 9 of the Consolidated Financial Statements.
For further information regarding income taxes, see Note 10 of the Consolidated Financial Statements.
(2) Includes $1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022. (3) Depreciation expense includes $12.1 million and $8.8 million for the years ended December 31, 2022 and 2021, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program.
(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.
Net cash used in investing activities from continuing operations for the year ended December 31, 2022 was $258.0 million compared to $83.0 million of net cash used in investing activities from continuing operations for the year ended December 31, 2021.
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.
(“Parent”), $7,153.3 million of equipment securing certain non-recourse debt, and $571.7 million of assets located in foreign locations. The following tables include the summarized financial information for Parent and Guarantor Subsidiaries (together the obligor group) on a combined basis after elimination of intercompany transactions within the obligor group (in millions).
(“Parent”), $7,157.8 million of equipment securing certain non-recourse debt, and $590.0 million of assets located in foreign locations. The following tables include the summarized financial information for Parent and Guarantor Subsidiaries (together the obligor group) on a combined basis after elimination of intercompany transactions within the obligor group (in millions).
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 non-recourse operating leases pursuant to sale-leaseback transactions; long-term recourse debt such as equipment trust certificates; long-term non-recourse promissory notes; or third-party equity.
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 such as equipment trust certificates; long-term non-recourse promissory notes; or third-party equity.
A summary of our financial covenants is detailed below: Ratio Covenant Actual at December 31, 2022 Maximum leverage (1) No greater than 4.00 to 1.00 2.77 Minimum interest coverage (2) No less than 2.25 to 1.00 7.99 (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, 2022.
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.
The Senior Notes are not guaranteed by any of our remaining 100%-owned subsidiaries or partially-owned subsidiaries (“Non-Guarantor Subsidiaries”). As of December 31, 2022, assets held by the Non-Guarantor Subsidiaries included $209.8 million of restricted cash that was not available for distribution to Trinity Industries, Inc.
The Senior Notes due 2024 are not guaranteed by any of our remaining 100%-owned subsidiaries or partially-owned subsidiaries (“Non-Guarantor Subsidiaries”). As of December 31, 2023, assets held by the Non-Guarantor Subsidiaries included $122.4 million of restricted cash that was not available for distribution to Trinity Industries, Inc.
Off Balance Sheet Arrangements As of December 31, 2022, we had letters of credit issued under our revolving credit facility in an aggregate amount of $16.8 million, the majority of which are expected to expire in November 2023. Our letters of credit obligations support performance bonds related to certain railcar orders.
Off Balance Sheet Arrangements As of December 31, 2023, we had letters of credit issued under our revolving credit facility in an aggregate amount of $17.4 million, the majority of which are expected to expire in October 2024. Our letters of credit obligations support performance bonds related to certain railcar orders.
See Note 8 of the Consolidated Financial Statements for further information about our corporate revolving credit facility. Employee Retirement Plans As disclosed in Note 10 of the Consolidated Financial Statements, as of December 31, 2022, the benefit obligation associated with our nonqualified retirement plan totaled $11.2 million.
See Note 9 of the Consolidated Financial Statements for further information about our corporate revolving credit facility. Employee Retirement Plans As disclosed in Note 11 of the Consolidated Financial Statements, as of December 31, 2023, the benefit obligation associated with our nonqualified retirement plan totaled $11.1 million.
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, which include gains on dispositions of other property, the controlling interest portion of impairment of long-lived assets and loss on extinguishment of debt, restructuring activities, 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.
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.
(5) Accounts payable includes $57.8 million of payables to Non-Guarantor Subsidiaries as of December 31, 2022. 43 Table of Contents Capital Expenditures Capital expenditures for 2022 were $966.8 million with $928.8 million utilized for net lease fleet additions, which includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, and secondary market purchases.
(5) Accounts payable includes $109.8 million of payables to Non-Guarantor Subsidiaries as of December 31, 2023. 43 Table of Contents Capital Expenditures Capital expenditures for 2023 were $710.1 million with $668.8 million utilized for net lease fleet additions, which includes new railcar additions, sustainable railcar conversions, railcar modifications, and other betterments, net of deferred profit, and secondary market purchases.
Information related to lease portfolio sales is as follows: Year Ended December 31, 2022 2021 ($ in millions) Lease portfolio sales $ 750.7 $ 460.7 Operating profit on lease portfolio sales (1) $ 126.2 $ 54.1 Operating profit margin on lease portfolio sales 16.8 % 11.7 % (1) Excludes $1.3 million selling profit associated with sales-type leases for the year ended December 31, 2022.
Information related to lease portfolio sales is as follows: Year Ended December 31, 2023 2022 ($ 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.
For the years ended December 31, 2022 and 2021, Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities from continuing operations as computed in accordance with GAAP, plus cash proceeds from lease portfolio sales, less capital expenditures for manufacturing, dividends paid, and Equity CapEx for leased railcars.
Adjusted Free Cash Flow is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus cash proceeds from lease portfolio sales, less capital expenditures for manufacturing, dividends paid, and Equity CapEx for leased railcars.
Significant investing activities are as follows: • We had a net investment in the lease fleet of $178.1 million during the year ended December 31, 2022, compared to $92.9 million during the year ended December 31, 2021.
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.
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 $1,133.8 million as of December 31, 2022, which includes valuation allowances of $29.5 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 $1,102.7 million as of December 31, 2023, which includes valuation allowances of $21.6 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, sale-leaseback transactions, and our revolving credit facility. As of December 31, 2022, we have total committed liquidity of $397.9 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, 2023, we have total committed liquidity of $906.3 million.
Potential Impact if Results Differ Changes in the design or nature of the activities of a VIE, or our involvement with a VIE, could result in a change in conclusion of our status as a primary beneficiary.
Potential Impact if Results Differ Changes in the design or nature of the activities of a VIE, or our involvement with a VIE, could result in a change in conclusion of our status as a primary beneficiary. Such change could result in the consolidation or deconsolidation of the subsidiary, thus impacting financial results.
Net cash provided by operating activities from continuing operations for the year ended December 31, 2022 was $9.2 million compared to $615.6 million net cash provided by operating activities from continuing operations for the year ended December 31, 2021.
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.
Operating costs by segment for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 (in millions) Railcar Leasing and Management Services Group (1) $ 347.3 $ 384.4 Rail Products Group 2,015.6 1,260.1 Segment Totals 2,362.9 1,644.5 Corporate and other 80.8 84.1 Restructuring activities, net 1.0 (3.7) Eliminations – Lease Subsidiary (802.0) (461.3) Eliminations – Other 0.6 (4.4) Consolidated Total $ 1,643.3 $ 1,259.2 (1) Includes gains on lease portfolio sales of $127.5 million and $54.1 million for the years ended December 31, 2022 and 2021, respectively.
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.
Total revenues for the Railcar Leasing and Management Services Group increased by 4.8% for the year ended December 31, 2022 when compared to the year ended December 31, 2021.
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.
Dividend Payments – In December 2022, our Board of Directors declared an increase of approximately 13% to our quarterly dividend from $0.23 per share to $0.26 per share. We paid $76.9 million in dividends to our common stockholders during the year ended December 31, 2022.
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.
Cost of revenues for the Rail Products Group increased for the year ended December 31, 2022 by 60.9% when compared to the prior year period.
Cost of revenues for the Rail Products Group increased for the year ended December 31, 2023 by 28.0% when compared to the prior year period.
(2) Cost of revenues includes $289.1 million of purchases from Non-Guarantor Subsidiaries during the year ended December 31, 2022. (3) Net income (loss) for the year ended December 31, 2022 includes $24.9 million of net loss related to discontinued operations. (4) Receivables, net of allowance includes $87.9 million of receivables from Non-Guarantor Subsidiaries as of December 31, 2022.
(2) Cost of revenues includes $485.6 million of purchases from Non-Guarantor Subsidiaries during the year ended December 31, 2023. (3) Net income (loss) for the year ended December 31, 2023 includes $13.4 million of net loss related to discontinued operations. (4) Receivables, net of allowance includes $87.7 million of receivables from Non-Guarantor Subsidiaries as of December 31, 2023.
Year Ended December 31, 2022 2021 (in millions) Net cash provided by operating activities – continuing operations (1) $ 9.2 $ 615.6 Proceeds from lease portfolio sales 750.7 454.3 Capital expenditures – manufacturing and other (38.0) (23.6) Dividends paid to common stockholders (76.9) (88.5) Equity CapEx for leased railcars (506.7) (418.9) Adjusted Free Cash Flow After Investments and Dividends $ 138.3 $ 538.9 Capital expenditures – leasing $ 928.8 $ 547.2 Less: Payments to retire debt (1,578.5) (2,315.8) Proceeds from issuance of debt 2,000.6 2,444.1 Net proceeds from (repayments of) debt 422.1 128.3 Equity CapEx for leased railcars $ 506.7 $ 418.9 (1) Amounts for the year ended December 31, 2021 include the collection of approximately $438.2 million of income tax refunds associated with the loss carryback provisions included in the CARES Act. 50 Table of Contents For the year ended December 31, 2020, Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities from continuing operations as computed in accordance with GAAP, plus cash proceeds from sales of leased railcars owned more than one year at the time of sale, less capital expenditures for manufacturing, dividends paid, and Equity CapEx for leased railcars.
Year Ended December 31, 2023 2022 2021 (in millions) Net cash provided by operating activities – continuing operations (1) $ 309.0 $ 9.2 $ 615.6 Proceeds from lease portfolio sales 381.8 750.7 454.3 Capital expenditures – manufacturing and other (41.3) (38.0) (23.6) Dividends paid to common stockholders (86.0) (76.9) (88.5) Equity CapEx for leased railcars (535.0) (506.7) (418.9) Adjusted Free Cash Flow After Investments and Dividends $ 28.5 $ 138.3 $ 538.9 Capital expenditures – lease fleet $ 668.8 $ 928.8 $ 547.2 Less: Payments to retire debt (1,518.9) (1,578.5) (2,315.8) Proceeds from issuance of debt 1,652.7 2,000.6 2,444.1 Net proceeds from (repayments of) debt 133.8 422.1 128.3 Equity CapEx for leased railcars $ 535.0 $ 506.7 $ 418.9 (1) Amounts for the year ended December 31, 2021 include the collection of approximately $438.2 million of income tax refunds associated with the loss carryback provisions included in the CARES Act.
(4) Interest expense for the year ended December 31, 2022 includes $1.5 million of loss on extinguishment of debt associated with the repayment of TRIP Railcar Co.'s outstanding term loan agreement. See Note 8 of the Consolidated Financial Statements for more information.
(4) Interest expense for the year ended December 31, 2022 includes $1.5 million of loss on extinguishment of debt associated with the repayment of TRIP Railcar Co. LLC's outstanding term loan agreement.
We diligently evaluate the creditworthiness of our customers and monitor performance of relevant market sectors; however, weaknesses in any of these market sectors could affect the financial viability of our underlying Leasing Group customers, which could continue to negatively impact our recurring leasing revenues and operating profits.
We evaluate the creditworthiness of our customers and monitor performance of relevant market sectors; however, weaknesses in any of these market sectors could affect the financial viability of our customers, which could negatively impact our revenues, credit loss expense, and operating profits.
Leasing and management revenues for the year ended December 31, 2022 were favorably impacted by higher utilization, the effect of net lease fleet investment activities, and improved renewal rates, which resulted in higher revenues when compared to the year ended December 31, 2021.
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.
Our operating profit for the year ended December 31, 2022 was $334.0 million, compared to $256.8 million for the year ended December 31, 2021. • The Leasing Group's lease fleet of 108,440 company-owned railcars was 97.9% utilized as of December 31, 2022, compared to a lease fleet utilization of 95.7% on 106,970 company-owned railcars as of December 31, 2021.
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.
Equity CapEx for leased railcars is defined as leasing capital expenditures, adjusted to exclude net proceeds from (repayments of) debt.
Equity CapEx for leased railcars is defined as capital expenditures for our lease fleet, adjusted to exclude net proceeds from (repayments of) recourse and non-recourse debt.
Our total available liquidity includes: $79.6 million of unrestricted cash and cash equivalents; $208.2 million unused and available under our revolving credit facility; and $110.1 million unused and available under the TILC warehouse loan facility based on the amount of warehouse-eligible, unpledged equipment.
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.
We also may use derivative instruments from time to time to mitigate the impact of changes in foreign currency exchange rates. Derivative instruments are accounted for in accordance with applicable accounting standards. See Note 3 of the Consolidated Financial Statements for discussion of how we utilize our derivative instruments.
We also may use derivative instruments from time to time to mitigate the impact of changes in foreign currency exchange rates. Derivative instruments are accounted for in accordance with applicable accounting standards.
Interest expense, net – Interest expense, net for the year ended December 31, 2022 totaled $207.6 million, compared to $191.4 million for the year ended December 31, 2021.
Interest expense, net – Interest expense, net for the year ended December 31, 2023 totaled $265.5 million, compared to $207.6 million for the year ended December 31, 2022.
Significant financing activities are as follows: • 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.
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.
See Note 2 of the Consolidated Financial Statements for additional information on these acquisitions. • We made equity investments totaling $15.5 million during the year ended December 31, 2022, primarily related to our investments in Signal Rail Holdings LLC.
The total net cash outlay for these two acquisitions was $80.4 million. See Note 2 of the Consolidated Financial Statements for additional information on these acquisitions. • We made equity investments totaling $1.1 million and $15.5 million during the years ended December 31, 2023 and 2022, respectively, primarily related to our investments in Signal Rail Holdings LLC ("Signal Rail").
(2) 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.
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.
Net income tax refunds (payments) during the years ended December 31, 2022 and 2021 totaled $(19.3) million and $435.7 million, respectively. 34 Table of Contents Segment Discussion Railcar Leasing and Management Services Group Year Ended December 31, Percent Change 2022 2021 ($ in millions) Revenues: Leasing and management $ 770.6 $ 735.3 4.8 % Operating profit (1) : Leasing and management $ 295.8 $ 296.8 (0.3) % Lease portfolio sales (2) 127.5 54.1 * Total operating profit $ 423.3 $ 350.9 20.6 % Total operating profit margin 54.9 % 47.7 % Leasing and management operating profit margin 38.4 % 40.4 % Selected expense information: Depreciation (3) $ 236.4 $ 226.0 4.6 % Maintenance and compliance $ 113.4 $ 95.0 19.4 % Rent and ad valorem taxes $ 19.3 $ 18.4 4.9 % Selling, engineering, and administrative expenses $ 54.0 $ 50.6 6.7 % Interest (4) $ 186.7 $ 181.6 2.8 % * Not meaningful (1) Operating profit includes: depreciation; fleet operating costs, which include maintenance, compliance, freight, and storage; rent and ad valorem taxes; and selling, engineering, and administrative expenses.
Income 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.
Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. Deferred Income Taxes Description of Estimate We account for income taxes under the asset and liability method prescribed by ASC 740.
Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
(2) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. 36 Table of Contents Rail Products Group Year Ended December 31, Percent Change 2022 2021 ($ in millions) Revenues: Rail products (1) $ 1,819.0 $ 1,067.9 70.3 % Maintenance services 203.8 159.9 27.5 % Other 51.9 37.0 40.3 % Total revenues $ 2,074.7 $ 1,264.8 64.0 % Operating costs: Cost of revenues $ 1,988.0 $ 1,235.7 60.9 % Selling, engineering, and administrative expenses 34.2 32.5 5.2 % Gains on dispositions of property (6.6) (8.1) * Operating profit $ 59.1 $ 4.7 * Operating profit margin 2.8 % 0.4 % * Not meaningful (1) Includes sustainable railcar conversion revenues of $163.7 million, representing 1,725 railcars, for the year ended December 31, 2022.
(2) Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements. 37 Table of Contents Rail Products Group Year Ended December 31, Percent Change 2023 2022 ($ 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.
The changes in our operating assets and liabilities are as follows: Year Ended December 31, 2022 2021 (in millions) (Increase) decrease in receivables, inventories, and other assets $ (296.9) $ (200.6) (Increase) decrease in income tax receivable (2.4) 440.4 Increase (decrease) in accounts payable, accrued liabilities, and other liabilities 38.3 96.6 Changes in operating assets and liabilities $ (261.0) $ 336.4 The changes in our operating assets and liabilities resulted in a net use of $261.0 million for the year ended December 31, 2022, as compared to a net source of $336.4 million for the year ended December 31, 2021.
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.
Potential Impact if Results Differ We believe that the assumptions used in our impairment assessment are reasonable; however, given the uncertainties of the economy and its potential impact on our businesses, there can be no assurance that the judgments applied in our assessment will prove to be accurate predictions of the future.
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.
During the year ended December 31, 2021, we had total borrowings of $2,444.1 million and total repayments of $2,315.8 million, for net proceeds of $128.3 million, primarily from debt proceeds to support our investment in the lease fleet. • We paid $76.9 million and $88.5 million in dividends to our common stockholders during the years ended December 31, 2022 and 2021, respectively. 41 Table of Contents • We repurchased common stock totaling $51.8 million and $833.4 million during the years ended December 31, 2022 and 2021, respectively.
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.
Operating Profit Operating profit by segment for the years ended December 31, 2022 and 2021 was as follows: Year Ended December 31, 2022 2021 (in millions) Railcar Leasing and Management Services Group $ 423.3 $ 350.9 Rail Products Group 59.1 4.7 Segment Totals 482.4 355.6 Corporate and other (80.8) (84.1) Restructuring activities, net (1.0) 3.7 Eliminations – Lease Subsidiary (65.2) (17.2) Eliminations – Other (1.4) (1.2) Consolidated Total $ 334.0 $ 256.8 Discussion of Consolidated Results Revenues – Our revenues for the year ended December 31, 2022 were $1,977.3 million, representing an increase of $461.3 million, or 30.4%, over the prior year, primarily related to a higher volume of, and improved pricing on, external deliveries in the Rail Products Group.
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.
December 31, Percent Change 2022 2021 (in millions) External customers (1) $ 3,444.1 $ 1,018.1 Leasing Group 458.9 498.7 Total (2) $ 3,903.0 $ 1,516.8 157.3 % 37 Table of Contents Year Ended December 31, Percent Change 2022 2021 Beginning balance 13,980 8,985 Orders received (1) 31,905 13,870 130.0 % Deliveries (13,315) (8,875) 50.0 % Other adjustments (2) (300) — Ending balance (1) 32,270 13,980 130.8 % Average selling price in ending backlog $ 120,948 $ 108,498 11.5 % (1) Ending backlog and orders received for the year ended December 31, 2022 include 15,000 railcars valued at approximately $1.8 billion associated with a new long-term railcar supply agreement with GATX.
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.
Includes sustainable railcar conversion revenues of $65.4 million, representing 650 railcars, for the year ended December 31, 2021. Revenues for the Rail Products Group increased for the year ended December 31, 2022 by 64.0% when compared to the prior year period.
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.
Following the completion of these amendments, we have no remaining LIBOR-based contracts. 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. 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.
Capital expenditures related to manufacturing and other activities, including expansion of our fleet maintenance capabilities and systems upgrades, are projected to range between $40 million and $50 million for the full year 2023. Equity Investment See Note 5 of the Consolidated Financial Statements for information about our investment in partially-owned leasing subsidiaries.
Capital expenditures related to manufacturing and other activities, including supporting automation, technology, and modernization of our facilities and processes, are projected to range between $50 million and $60 million for the full year 2024. Equity Investment See Note 5 of the Consolidated Financial Statements for information about our investments in partially-owned subsidiaries.
Information regarding the Leasing Group’s lease fleet is as follows: December 31, 2022 2021 Number of railcars: Wholly-owned (1) 84,750 82,630 Partially-owned 23,690 24,340 108,440 106,970 Investor-owned 33,235 29,130 141,675 136,100 Company-owned railcars (2) : Average age in years 12.3 11.1 Average remaining lease term in years 3.0 3.0 Fleet utilization 97.9 % 95.7 % (1) Includes 2,810 railcars and 2,255 railcars under leased-in arrangements as of December 31, 2022 and 2021, respectively.
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.
Summarized Statement of Operations: Year Ended December 31, 2022 Revenues (1) $ 1,245.2 Cost of revenues (2) $ 1,153.4 Income (loss) from continuing operations $ (71.6) Net income (loss) (3) $ (96.5) Summarized Balance Sheets: December 31, 2022 Assets: Receivables, net of allowance (4) $ 317.3 Inventories $ 577.0 Property, plant, and equipment, net $ 471.8 Goodwill and other assets $ 399.7 Liabilities: Accounts payable and accrued liabilities (5) $ 371.4 Debt $ 624.1 Deferred income taxes $ 949.8 Other liabilities $ 156.6 Noncontrolling interest $ 257.2 (1) There were no net sales from the obligor group to Non-Guarantor Subsidiaries during the year ended December 31, 2022.
Year Ended December 31, 2023 Summarized Statement of Operations: Revenues (1) $ 2,071.0 Cost of revenues (2) $ 1,925.1 Income (loss) from continuing operations $ (30.7) Net income (loss) (3) $ (44.1) December 31, 2023 Summarized Balance Sheet: Assets: Receivables, net of allowance (4) $ 308.4 Inventories $ 628.5 Property, plant, and equipment, net $ 531.2 Goodwill and other assets $ 399.1 Liabilities: Accounts payable and accrued liabilities (5) $ 480.7 Debt $ 846.9 Deferred income taxes $ 923.6 Other liabilities $ 150.9 Noncontrolling interest $ 238.4 (1) There were no net sales from the obligor group to Non-Guarantor Subsidiaries during the year ended December 31, 2023.
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, 2022, we acquired a company that owns and operates an end-to-end rail logistics software platform providing a real-time data universe to freight rail shippers and operators, as well as a company that manufactures multi-level vehicle securement and protection systems, gravity-outlet gates, and gate accessories for freight rail in North America.
During the year ended December 31, 2022, we acquired a company that owns and operates an end-to-end rail logistics software platform providing a real-time data universe to freight rail shippers and operators, as well as a company that manufactures multi-level vehicle securement and protection systems, gravity-outlet gates, and gate accessories for freight rail in North America.
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.
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.
Transactions between the Rail Products Group and the Leasing Group are as follows: Year Ended December 31, 2022 2021 ($ in millions) Revenues: New railcars $ 624.9 $ 357.5 Sustainable railcar conversions $ 118.6 $ 57.6 Other maintenance services $ 123.7 $ 63.4 Deferred profit $ 65.2 $ 17.2 Number of new railcars (in units) 4,735 3,310 Number of sustainable railcar conversions (in units) 1,155 520 Corporate and other Year Ended December 31, Percent Change 2022 2021 (in millions) Operating costs: Selling, engineering, and administrative expenses $ 97.2 $ 96.5 0.7 % Gains on dispositions of property (16.4) (12.4) * Operating loss $ (80.8) $ (84.1) (3.9) % * Not meaningful Selling, engineering, and administrative expenses for the year ended December 31, 2022 were substantially unchanged compared to the year ended December 31, 2021.
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.
See Note 2 of the Consolidated Financial Statements for further information related to the sale of THP and Note 15 for information regarding the retained liabilities. 27 Table of Contents Following the sale of THP, we report our operating results in two reportable segments: (1) the Railcar Leasing and Management Services Group, which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services; and (2) the Rail Products Group, which manufactures and sells railcars and related parts and components, and provides railcar maintenance and modification services.
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.
Based on our evaluations, no impairment charges were determined to be necessary on long-lived assets as of December 31, 2022. 46 Table of Contents Goodwill Description of Estimate Goodwill is required to be tested for impairment at least annually, or on an interim basis if events or circumstances change indicating that the carrying amount of the goodwill might be impaired.
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.
Net cash provided by financing activities during the year ended December 31, 2022 was $265.4 million compared to $814.1 million of net cash used in financing activities for the same period in 2021.
See Note 5 of the Consolidated Financial Statements. 41 Table of Contents Financing Activities. Net cash provided by financing activities during the year ended December 31, 2023 was $8.2 million compared to $265.4 million of net cash provided by financing activities for the same period in 2022.
December 31, 2022 December 31, 2021 December 31, 2020 ($ in millions) Numerator: Income (loss) from continuing operations $ 98.9 $ 39.3 $ (250.5) Provision (benefit) for income taxes 27.6 15.9 (274.1) Income (loss) from continuing operations before income taxes 126.5 55.2 (524.6) Net (income) loss attributable to noncontrolling interest (12.8) 0.2 78.9 Adjustments: Gains on dispositions of property – other (1) (7.5) (7.8) — Impairment of long-lived assets – controlling interest (2) — — 315.1 Restructuring activities, net 1.0 (3.7) 10.9 Loss on extinguishment of debt – controlling interest (3) — 4.6 5.0 Interest expense, net (4) (1.4) — — Pension plan settlement — (0.6) 151.5 Adjusted Profit Before Tax $ 105.8 $ 47.9 $ 36.8 Denominator: Total stockholders' equity $ 1,269.6 $ 1,296.8 $ 2,016.0 Noncontrolling interest (257.2) (267.0) (277.2) Accumulated other comprehensive (income) loss (19.7) 17.0 30.9 Adjusted Stockholders' Equity $ 992.7 $ 1,046.8 $ 1,769.7 Average total stockholders' equity $ 1,283.2 $ 1,656.4 $ 2,197.5 Return on Equity (5) 7.7 % 2.4 % (11.4) % Average Adjusted Stockholders' Equity $ 1,019.8 $ 1,408.3 $ 1,976.5 Pre-Tax Return on Equity (6) 10.4 % 3.4 % 1.9 % (1) Represents insurance recoveries in excess of net book value received for assets damaged by a tornado at the Company’s rail maintenance facility in Cartersville, Georgia in the first quarter of 2021.
December 31, 2023 December 31, 2022 December 31, 2021 ($ in millions) Numerator: Income from continuing operations $ 140.0 $ 98.9 $ 39.3 Provision (benefit) for income taxes 9.0 27.6 15.9 Income from continuing operations before income taxes 149.0 126.5 55.2 Net (income) loss attributable to noncontrolling interest (20.6) (12.8) 0.2 Adjustments: Selling, engineering, and administrative expenses (1) 4.0 — — Gains on dispositions of property – other (2) (6.3) (7.5) (7.8) Restructuring activities, net (2.2) 1.0 (3.7) Loss on extinguishment of debt – controlling interest (3) — — 4.6 Interest expense, net (4) (1.5) (1.4) — Pension plan settlement — — (0.6) Adjusted Profit Before Tax $ 122.4 $ 105.8 $ 47.9 Denominator: Total stockholders' equity $ 1,275.5 $ 1,269.6 $ 1,296.8 Noncontrolling interest (238.4) (257.2) (267.0) Accumulated other comprehensive (income) loss (11.0) (19.7) 17.0 Adjusted Stockholders' Equity $ 1,026.1 $ 992.7 $ 1,046.8 Average total stockholders' equity $ 1,272.6 $ 1,283.2 $ 1,656.4 Return on Equity (5) 11.0 % 7.7 % 2.4 % Average Adjusted Stockholders' Equity $ 1,009.4 $ 1,019.8 $ 1,408.3 Pre-Tax Return on Equity (6) 12.1 % 10.4 % 3.4 % (1) Represents the change in estimated fair value of additional contingent consideration associated with an acquisition.
In addition to the amounts below, as of December 31, 2022, our backlog related to sustainable railcar conversions totaled $166.5 million, representing 1,965 railcars.
Information related to our Rail Products Group backlog of new railcars is as follows. In addition to the amounts below, as of December 31, 2023, our backlog related to sustainable railcar conversions totaled $81.9 million, representing 1,015 railcars.
For further information regarding our partially-owned leasing subsidiaries and other investments in unconsolidated affiliates, see Note 5 of the Consolidated Financial Statements. Judgment and/or Uncertainty The determination of whether an entity is considered a VIE and, if so, if we are the primary beneficiary of the VIE, is subjective and dependent on the specific facts and circumstances of each investment.
Judgment and/or Uncertainty The determination of whether an entity is considered a VIE and, if so, if we are the primary beneficiary of the VIE, is subjective and dependent on the specific facts and circumstances of each investment.
At December 31, 2022, the carrying value of our investment in TRIP Holdings and RIV 2013 totaled $136.1 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, 2022, the carrying value of these investments totaled $24.8 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.
The current year period excludes $25.0 million representing the final settlement of the ASR, which was funded in December 2021 but a portion of which remained outstanding as of December 31, 2021. The prior year period includes shares repurchased in privately negotiated transactions with ValueAct totaling $472.5 million.
The prior year period excludes $25.0 million representing the final settlement of an accelerated share repurchase agreement (the "ASR"), which was funded in December 2021 but a portion of which remained outstanding as of December 31, 2021. There were no shares repurchased during the year ended December 31, 2023.

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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 changeAs of December 31, 2022, a hypothetical 10% change in foreign currency exchange rates on our forward contracts 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 net investment in foreign subsidiaries as of December 31, 2022 was $57.5 million.
Biggest changeAs 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.
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, 2022 and 2021.
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.
In comparison, at December 31, 2021, we estimated that if interest rates averaged one percentage point more in fiscal year 2022 than they did during 2021, our interest expense would have increased by $11.9 million.
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.
If interest rates average one percentage point more in fiscal year 2023 than they did during 2022, our interest expense would increase by $12.3 million, after considering the effects of interest rate hedges.
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.
A one percentage point increase in the interest rate yield would decrease the fair value of the fixed rate debt by approximately $119.5 million. A one percentage point decrease in the interest rate yield would increase the fair value of the fixed rate debt by approximately $125.2 million.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Our earnings could be affected by changes in interest rates due to the impact those changes have on our variable rate debt obligations, which represented 29.6% of our total debt as of December 31, 2022.
Our 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.
The impact of such market risk exposures as a result of foreign exchange rate fluctuations has not historically been material to us. 52 Table of Contents
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
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We manage interest rate exposure by limiting variable rate exposures to a percentage of total debt and by entering into financial derivative instruments, which may include instruments such as, but not limited to, interest rate swaps and interest rate caps.

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