Trinity Industries Inc Investor Day Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Bascome Majors, Susquehanna. Just some clarifications on a few points in the guidance. The leasing and services margin 38% to 41%. Number one, is that inclusive of gains in that number or is that a core margin on just the lease revenue before games?

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Okay. So that would be a moderate increase from kind of where you are on trailing four or five quarters, but --

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Okay, understood. In any thoughts. I mean, you mentioned that lease rate improvement is a big driver of that. You said a lot of the fleet to reprice I would imagine your plan that would increase in the subsequent years or is there a linear nature that is just going to be lumpy with the gains in your views?

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Understood that you have the core piece of the margin actually improving to be more sustainable than some of the lift from last year.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Okay. I know you're not guiding gains and that would be difficult to do, but you did have to level set this year is starting off with something more like this year than last year, further off into our forecast, probably more reasonable.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : And last on the guidance for me and I'll pass it on, but you do have a leap in Rail Products margins in '26, to get you back into the double digits where you've been wanting to be again for several years now, but that's also beyond kind of where you have backlog visibility and sundry. I mean, maybe the Leap was the word chosen by me there for a reason. So what gives you confidence that without visibility into what your production is going to look like that you can take a couple of points leap two years out from now?

Question: Bascome Majors - Susquehanna Financial Group - Analyst : To that point on your returns models -- on this secondary market point, you're asking majors here again. On your returns models, are you getting enough for the return in the first lease or you don't feel like you're taking excess residual risk at asset prices where they are today? And is that driving the behavior from your customer the fear of residual risk? Or do you think it's just yeah, any thoughts on that longer term?

Question: Bascome Majors - Susquehanna Financial Group - Analyst : To sort of a guidance clarification ones. Are you comfortable with the 135 to 155 EPS guide. -- if I didn't hear that earlier.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : On the long-term guidance. The corporate expense line that's been tracking, what about $110 million ,$150 million a year? Is that a is that something is going to be fairly steady or anything that would change in any meaningful way? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2024 / 1:00PM, TRN.N - Trinity Industries Inc Investor Day

Question: Bascome Majors - Susquehanna Financial Group - Analyst : And so Eric, if 2016, '18, you worked with an activist investor in the Board, you made some pretty meaningful decisions about how to refocus the business and spin off a lot of businesses that probably weren't core to what you're doing today. And that seems to have created a lot of value for shareholders that were around at that time with some distance between that period and decisions can you talk about why ultimately it was decided to keep the manufacturing and railcar leasing businesses together at the time?

Question: Bascome Majors - Susquehanna Financial Group - Analyst : I mean that was a pretty good run through the logic today it doesn't sound like the logic of keeping the business together has evolved in any meaningful way in the last seven or eight years or.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Something you evaluate every year. And how has that evolved is really the point of the questions.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Thank you.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : So you spent several years at Progress Rail before cat acquired at many more years there under Cat's ownership. I mean, they're in a lot of businesses similar and adjacent to what you do here at Trinity? I mean, are they are these guys in businesses that you're not in today that you might like to be in the future in irrespective of your experience at Progress, it doesn't sound like you plan to meaningfully expand the portfolio of rail-related services with transformational acquisitions, but just want to get the thoughts of, you know, how the portfolio might look different in five years, say than it does today at Trinity share? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2024 / 1:00PM, TRN.N - Trinity Industries Inc Investor Day