Trinity Industries Inc at Goldman Sachs Industrials and Materials Conference Transcript

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

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Yeah, that's a great overview. Maybe just, I wanted to start off a little bit higher level. Your last earnings call, you talked about sort of the potential for fog clearing, and that's sort of been a hang-up on sort of railcar demand in terms of tariffs, specifically driving in fog due to tariffs, was one of the comments. And it's uncertainty, which has really been the main theme, I think, over the last six months to a year for not just you, but broadly across transports as well. I'm curious if you could share sort of specific macro indicators that you guys are watching to keep an eye out for when we could sort of get through that fog and maybe when we could see better railcar ordering environment. What catalyst would sort of drive that environment? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 7:10PM, TRN.N - Trinity Industries Inc at Goldman Sachs Industrials and Materials Conference

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Maybe just, I wanted to sort of shift back to your broader model. You've pushed more into leasing, and so I want to get to that sort of philosophy of yours. What is it about leasing that's sort of attractive, and you obviously have pushed into that market? You're still a large manufacturer, 50% roughly of the backlog in North America. So how do you balance those priorities and what is your ultimate sort of goal as a company?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Makes sense. I wanted to shift a little bit to company-specific questions and maybe starting more on leasing dynamics. Your future lease rate differential in this past quarter saw a noticeable drop, it's still up 9%, so that's your new leases are being signed 9% higher than your expiring leases, but the prior quarter that was 18%. Maybe just, and you did attribute some of the moderation to the higher expiring lease rates relative to some moderation in the market rates. And I think there's some mixed issues in there as well that you noted, so could you maybe just talk through that and where you expect that FLRD to sort of trend given sort of the mix as well?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : And I think that's a really good point. And just if you sort of because you're starting to lap, right? Like you said, the COVID higher rates, but you do have this environment where new car prices are going higher, and you could run into a point where you're going to reach a recovery level in maybe freight markets at a time when you're starting to really re-sign these new contracts also when these prices are going up. So are you going to be able to continue to re-sign the FLRD at a higher rate two years down the line? It seems like you could because, like we just talked about, the lease rates seem to be supportive based on the asset prices themselves. I mean, how do we think just relative to

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Definitely. I think the supply environment is helping considerably as well. Your last call, you raised guidance partly based on the gains on sale. Maybe just talk a little bit about how that's going now, near term, if that's still what you guys are seeing out there. Given those dynamics, is that something you would expect to continue for the foreseeable future, like into 2026? Should we continue to expect those gains? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 7:10PM, TRN.N - Trinity Industries Inc at Goldman Sachs Industrials and Materials Conference

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Makes sense. I mean, relative to the book value, asset prices are much higher today.

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Maybe just shifting a little bit to manufacturing, I wanted to touch on the backlog and sort of the pipeline you have in your order pipeline. You currently have about 50% of the industry backlog. Maybe just talk a little bit about the makeup of that backlog and how it's trended. I know it's sort of depressed today, but is it just based on the customer ordering decisions being delayed, and so that's sort of a delayed demand environment, or could the backlog sort of remain under pressure for a certain period of time? In other words, could there only be a certain amount of years that these shippers could hold off on ordering these cars?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : And so just on manufacturing so you guys margin target there this year 5% to 6%. Can you talk about sort of where that's been in the past in historical downturns, what the levels are at today versus past downturns, and then maybe where you expect that to trend in a depressed delivery environment next year, if that sort of is the base case for you?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : So in other words, even if demand sort of shoots over replacement, and you could shoot above that sort of --

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Maybe just on the parts business, if an environment does inflect positively, do we feel the parts business impact more in that environment? Are we ready? Is that sort of an enabler already today in the business?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Maybe just broadly shifting to capital allocation strategy and your fleet investment, you're sort of on track for your net fleet investment target, $750 million to $1 billion between 2024 and 2026. Could you just discuss the balance between investing in the fleet for growth versus sort of opportunistic secondary market activities, returning capital to shareholders, and then does that change depending on the macro?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : You just mentioned the secondary market a little bit, and I wanted to talk about specific card types, if you're seeing any sort of green shoots on specific card types, and then maybe what are the cards that sort of remain challenged and what are the drivers behind those two?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : I think you guys, you've done a good job at sort of taking costs out of the business where you can in the sort of not depressed volume environment but pressured volume environment. And specifically in SG&A, too, you guys have done a lot of work there. As we think going forward to 2026, what are the extra sort of initiatives that you guys are taking or looking at to sort of sort of keep costs in check?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : I wanted to shift, we have five minutes left here, but I wanted to touch on this bigger topic here of potential Class 1 rail consolidation. Your thoughts on sort of what's the balance between rails becoming more efficient versus taking share and sort of how that might impact the broader leasing business and then separately manufacturing business.

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Sounds like we'll have to wait some time to see anyway, but definitely an interesting topic, I think. Maybe just, I wanted to talk about the -- because the manufacturers have consolidated like yourself over the years quite considerably. And leasing, we are starting to see some more consolidation there as well. Curious, after your big competitor announced the deal in the space, how you see that sort of impacting the broader leasing market. Is it better that maybe a financial lessor is taken out of the market, maybe put in the hands of an operating lessor? Is that better for lease rates? Maybe just talk about the broad impact on the industry or if it may not be that big of a change.

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Just to finish up before I give you an extra minute to say some final words. On a recovery scenario, I wanted to get to this earlier, you will have to sort of bring back heads and labor in some ways. Maybe talk about the time it takes to bring back labor relative to what you expect for demand, and then can you share sort of what incremental margins look like for you on a recovery in the manufacturing portion?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Right, that makes sense. Well, it looks like we're pretty much at time, but do you want to say any final words?

Question: Andrzej Tomczyk - Goldman Sachs Group Inc - Analyst : Well, thanks again for coming. Appreciate your time.