SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8099
TRINITY INDUSTRIES LEASING COMPANY
(Exact name of registrant as specified in its charter)
Incorporated Under the Laws 75-1640393
of the State of Delaware (I.R.S. Employer
Identification No.)
2705 S. State Street
Chicago Heights, IL 60411
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number,
Including Area Code (708) 758-8119
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
1,000
(Number of shares of common stock outstanding as of December 31, 1993)
Part I
Item I - Financial Statements
Trinity Industries Leasing Company
Balance Sheet
(unaudited)
(in millions except share data)
December 31 March 31
1993 1993
Assets
Cash and cash equivalents. . . . . . . . . . $ 0.1 $ 0.2
Note receivable from Trinity . . . . . . . . 87.7 77.2
Equipment on lease (predominantly
long-term), at cost. . . . . . . . . . . . 544.2 536.7
Less accumulated depreciation. . . . . . . . (139.7) (132.3)
Other assets . . . . . . . . . . . . . . . . 8.9 8.8
$501.2 $490.6
Liabilities and Stockholder's Equity
Accounts payable and accrued liabilities . . $ 6.9 $ 8.1
Long-term debt . . . . . . . . . . . . . . . 240.6 244.0
Deferred federal income tax. . . . . . . . . 98.0 98.0
Other liabilities. . . . . . . . . . . . . . 3.6 4.7
Stockholder's equity:
Common stock $1 par; authorized 10,000
shares; issued 1,000 shares . . . . . . . - -
Capital in excess of par value . . . . . . 19.3 19.3
Retained earnings. . . . . . . . . . . . . 132.8 116.5
152.1 135.8
$501.2 $490.6
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Trinity Industries Leasing Company
Statements of Income
and Retained Earnings
(unaudited)
(in millions)
Nine Months Ended
December 31
1993 1992
Revenues . . . . . . . . . . . . . . . . . . $ 63.4 $ 59.2
Operating costs:
Cost of revenues. . . . . . . . . . . . . . 33.0 32.7
Interest expense. . . . . . . . . . . . . . 18.0 21.1
51.0 53.8
Operating profit . . . . . . . . . . . . . . 12.4 5.4
Other income:
Interest income (including $3.8
and $6.8 from Trinity in 1993
and 1992, respectively). . . . . . . . . . 3.8 6.8
Other, net. . . . . . . . . . . . . . . . . 0.6 0.1
Income maintenance fees . . . . . . . . . . - 1.4
4.4 8.3
Income before income taxes and cumulative
effect of change in accounting for income
taxes . . . . . . . . . . . . . . . . . . . 16.8 13.7
Provision for income taxes:
Current. . . . . . . . . . . . . . . . . . 0.6 0.1
Deferred . . . . . . . . . . . . . . . . . 5.4 4.7
Effect of statutory rate increase. . . . . 2.6 -
8.6 4.8
Income before cumulative effect of
accounting change for income taxes. . . . . 8.2 8.9
Cumulative effect as of April 1, 1993 of
change in method of accounting for income
taxes . . . . . . . . . . . . . . . . . . . 8.1 -
Net income . . . . . . . . . . . . . . . . . 16.3 8.9
Retained earnings at beginning of year . . . 116.5 104.8
Retained earnings at end of period . . . . . $132.8 $113.7
<PAGE>
Trinity Industries Leasing Company
Statements of Income
and Retained Earnings
(unaudited)
(in millions)
Three Months Ended
December 31
1993 1992
Revenues . . . . . . . . . . . . . . . . . . $ 24.4 $ 22.8
Operating costs:
Cost of revenues. . . . . . . . . . . . . . 13.1 12.3
Interest expense. . . . . . . . . . . . . . 5.9 7.0
19.0 19.3
Operating profit . . . . . . . . . . . . . . 5.4 3.5
Other income:
Interest income (including $1.3
and $2.1 from Trinity in 1993
and 1992, respectively). . . . . . . . . . 1.3 2.1
Other, net. . . . . . . . . . . . . . . . . 0.4 0.1
1.7 2.2
Income before income taxes . . . . . . . . . 7.1 5.7
Provision for income taxes:
Current. . . . . . . . . . . . . . . . . . 0.7 -
Deferred . . . . . . . . . . . . . . . . . 1.9 2.0
2.6 2.0
Net income . . . . . . . . . . . . . . . . . 4.5 3.7
Retained earnings at beginning of period . . 128.3 110.0
Retained earnings at end of period . . . . . $132.8 $113.7
<PAGE>
Trinity Industries Leasing Company
Statement of Cash Flows
(unaudited)
(in millions)
Nine Months Ended
December 31
1993 1992
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . $ 16.3 $ 8.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation . . . . . . . . . . . . . . . 15.1 12.4
Deferred provision for federal income
tax . . . . . . . . . . . . . . . . . . . 5.4 4.7
Gain on retirement of equipment. . . . . . (1.9) (0.1)
Cumulative effect of change in accounting
for income taxes. . . . . . . . . . . . . (8.1) -
Effect of statutory tax rate increase. . . 2.6 -
Other. . . . . . . . . . . . . . . . . . . 0.7 0.7
Changes in assets and liabilities:
Increase in other assets. . . . . . . . . (0.1) (0.3)
Increase (decrease) in accounts payable
and accrued liabilities. . . . . . . . . (1.2) 0.6
Decrease in other liabilities . . . . . . (1.1) (1.3)
Total adjustments. . . . . . . . . . . . 11.4 16.7
Net cash provided by operating
activities. . . . . . . . . . . . . . . . 27.7 25.6
Cash flows from investing activities:
Proceeds from retirement of equipment. . . . 13.1 0.7
Capital expenditures . . . . . . . . . . . . (27.0) (55.7)
Net cash required by investing
activities. . . . . . . . . . . . . . . . (13.9) (55.0)
Cash flows from financing activities:
Increase in note receivable from parent. . . (10.5) (12.5)
Payments to retire long-term debt. . . . . . (22.8) (17.5)
Proceeds from issuance of long term debt . . 20.0 60.0
Decrease in long-term obligation under
capital lease . . . . . . . . . . . . . . . (0.6) (0.5)
Net cash provided (required) by
financing activities . . . . . . . . . . (13.9) 29.5
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . . . (0.1) 0.1
Cash and cash equivalents at beginning of
year . . . . . . . . . . . . . . . . . . . . 0.2 0.1
Cash and cash equivalents at end of period. . $ 0.1 $ 0.2
<PAGE>
The foregoing financial statements are unaudited and have been
prepared from the books and records of the Registrant. In the
opinion of the Registrant, all adjustments, consisting only of
normal and recurring adjustments necessary to a fair presentation
of the financial position of the Registrant as of December 31,
1993 and March 31, 1993 and the results of operations for the
three and nine month periods ended December 31, 1993 and 1992 and
cash flows for the nine month periods ended December 31, 1993 and
1992, in conformity with generally accepted accounting
principles, have been made.
Trinity Industries Leasing Company
Notes to Financial Statements
December 31, 1993
Income Taxes
Effective April 1, 1993, the Registrant adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." This statement requires a change from the deferred to
the liability method of computing income taxes. As permitted by
Statement No. 109, the Registrant has elected not to restate the
financial statements of any prior period. The effect of the
change on pretax income for the period ended December 31, 1993 is
not material. The cumulative effect of applying the change in
accounting method is a decrease in the Registrant's deferred tax
liability and a nonrecurring credit of $8.1 million.
The net deferred tax liability at April 1, 1993 is $89.9 million
and is comprised primarily of the excess of tax depreciation over
financial statement depreciation. All other items are not
material.
Trinity Industries Leasing Company
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Registrant is a wholly-owned subsidiary of Trinity Industries,
Inc. ("Trinity").
Financial Condition
The increase in 'Note receivable from Trinity' at December 31, 1993
compared to March 31, 1993 is due to cash, not required for
operations, loaned to Trinity, at prevailing market rates and
partially offset by equipment purchases from Trinity.
Results of Operations
Nine months Ended December 31, 1993 vs.
Nine Months Ended December 31, 1992
'Revenues' increased principally due to additional railcars placed
on lease, partially offset by a decrease in barge revenues
resulting from an abatement in barge traffic caused by flooding in
the midwestern United States.
'Operating profit' increased principally due to rising railcar
revenues from fleet additions, coupled with a reduction of interest
expense resulting from the conversion of the Registrant's 6.75
percent debentures into shares of Trinity's common stock in the 4th
quarter of fiscal 1993. The increase was partially offset by lower
barge operating profits due to conditions stated above, along with
a marginal increase in railcar maintenance and repair expenses of
$0.2 million.
Three Months Ended December 31, 1993 vs.
Three Months Ended December 31, 1992
'Operating profit' increased principally due to rising railcar
revenues from fleet additions, combined with a decrease in railcar
repair and maintenance expenses resulting from a reduction of
scheduled program repairs, coupled with a reduction in interest
expense resulting from the conversion of the Registrant's 6.75
percent debentures discussed above.
PART II
Item 6 - Exhibits and Reports on Form 8-K.
No Form 8-K was filed during the quarter.
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Trinity Industries Leasing Company
By:F. Dean Phelps
F. Dean Phelps
Vice President
February 9, 1994
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