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, 1994
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.)
2000 Gardner Expressway
Quincy, IL 62306
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number,
Including Area Code (217) 224-7236
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, 1994)
Part I
Item I - Financial Statements
Trinity Industries Leasing Company
Balance Sheet
(unaudited)
(in millions except share data)
December 31 March 31
1994 1994
Assets
Cash and cash equivalents. . . . . . . . . . $ 0.2 $ 0.2
Note receivable from Trinity . . . . . . . . 107.0 90.8
Equipment on lease (predominantly
long-term), at cost. . . . . . . . . . . . 510.4 536.1
Less accumulated depreciation. . . . . . . . (135.3) (139.9)
Other assets . . . . . . . . . . . . . . . . 6.3 7.9
$488.6 $495.1
Liabilities and Stockholder's Equity
Accounts payable and accrued liabilities . . $ 15.6 $ 3.9
Long-term debt . . . . . . . . . . . . . . . 207.3 236.0
Deferred federal income tax. . . . . . . . . 92.7 95.8
Other liabilities. . . . . . . . . . . . . . 3.0 4.5
318.6 340.2
Stockholder's equity:
Common stock $1 par; authorized 10,000
shares; issued 1,000 shares . . . . - -
Additional paid-in capital . . . . . . . . 19.3 19.3
Retained earnings. . . . . . . . . . . . . 150.7 135.6
170.0 154.9
$488.6 $495.1
<PAGE>
Trinity Industries Leasing Company
Statements of Income
and Retained Earnings
(unaudited)
(in millions)
Nine Months
Ended December 31
1994 1993
Revenues . . . . . . . . . . . . . . . . . . $ 87.7 $63.4
Operating costs:
Cost of revenues. . . . . . . . . . . . . . 53.8 33.0
Interest expense. . . . . . . . . . . . . . 16.1 18.0
69.9 51.0
Operating profit . . . . . . . . . . . . . . 17.8 12.4
Other income:
Interest income (including $5.4
and $3.8 from Trinity in 1994
and 1993, respectively). . . . . . . . . . 5.4 3.8
Other, net. . . . . . . . . . . . . . . . . 0.1 0.6
5.5 4.4
Income before income taxes and cumulative
effect of change in accounting for income
taxes . . . . . . . . . . . . . . . . . . . 23.3 16.8
Provision for income taxes:
Current. . . . . . . . . . . . . . . . . . 11.3 0.6
Deferred . . . . . . . . . . . . . . . . . (3.1) 5.4
Effect of statutory rate increase. . . . . - 2.6
8.2 8.6
Income before cumulative effect of
change in accounting for income taxes . . . 15.1 8.2
Cumulative effect as of April 1, 1993 of
change in accounting for income
taxes . . . . . . . . . . . . . . . . . . . - 8.1
Net income . . . . . . . . . . . . . . . . . 15.1 16.3
Retained earnings at beginning of year . . . 135.6 116.5
Retained earnings at end of period . . . . . $150.7 $132.8
Trinity Industries Leasing Company
Statements of Income
and Retained Earnings
(unaudited)
(in millions)
Three Months
Ended December 31
1994 1993
Revenues . . . . . . . . . . . . . . . . . . $ 35.7 $24.4
Operating costs:
Cost of revenues. . . . . . . . . . . . . . 22.2 13.1
Interest expense. . . . . . . . . . . . . . 4.9 5.9
27.1 19.0
Operating profit . . . . . . . . . . . . . . 8.6 5.4
Other income:
Interest income (including $2.1
and $1.3 from Trinity in 1994
and 1993, respectively). . . . . . . . . . 2.1 1.3
Other, net. . . . . . . . . . . . . . . . . - 0.4
2.1 1.7
Income before income taxes . . . . . . . . . 10.7 7.1
Provision for income taxes:
Current. . . . . . . . . . . . . . . . . . 5.8 0.7
Deferred . . . . . . . . . . . . . . . . . (2.0) 1.9
3.8 2.6
Net income . . . . . . . . . . . . . . . . . 6.9 4.5
Retained earnings at beginning of period . . 143.8 128.3
Retained earnings at end of period . . . . . $150.7 $132.8
Trinity Industries Leasing Company
Statement Of Cash Flows
(unaudited)
(in millions)
Nine Months
Ended December 31
1994 1993
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . $ 15.1 $ 16.3
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation. . . . . . . . . . . . . . . 15.4 15.1
Deferred provision for federal income
tax. . . . . . . . . . . . . . . . . . . (3.1) 5.4
Gain on retirement of equipment . . . . . (5.6) (1.9)
Other . . . . . . . . . . . . . . . . . . 0.8 0.7
Cumulative effect of change in accounting
for income taxes . . . . . . . . . . . . - (5.5)
Changes in assets and liabilities:
(Increase) decrease in other assets . . 1.6 (0.1)
Increase (decrease) in accounts payable
and accrued liabilities . . . . . . . . 11.7 (1.2)
Increase in other liabilities . . . . . (1.5) (1.1)
Total adjustments . . . . . . . . . . . 19.3 11.4
Net cash provided by operating
activities . . . . . . . . . . . . . . . 34.4 27.7
Cash flows from investing activities:
Proceeds from retirement of equipment. . . . 25.6 13.1
Capital expenditures . . . . . . . . . . . . (15.1) (27.0)
Net cash provided (required) by
investing activities . . . . . . . . . . 10.5 (13.9)
Cash flows from financing activities:
Increase in note receivable from parent. . . (16.2) (10.5)
Payments to retire long-term debt. . . . . . (28.1) (22.8)
Proceeds from issuance of long term debt . . - 20.0
Decrease in long-term obligation under
capital lease . . . . . . . . . . . . . . . (0.6) (0.6)
Net cash required by financing
activities . . . . . . . . . . . . . . . (44.9) (13.9)
Net decrease in cash and cash equivalents . . - (0.1)
Cash and cash equivalents at beginning of
year . . . . . . . . . . . . . . . . . . . . 0.2 0.2
Cash and cash equivalents at end of period. . $ 0.2 $ 0.1
<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,
1994 and March 31, 1994 and the results of operations for the
nine and three month periods ended December 31, 1994 and 1993 and
cash flows for the nine month periods ended December 31, 1994 and
1993, in conformity with generally accepted accounting
principles, have been made.
Trinity Industries Leasing Company
Notes to Financial Statements
December 31, 1994
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 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, 1994
compared to March 31, 1994 is due to cash, not required for
operations, loaned to Trinity, at prevailing market rates and
partially offset by equipment purchases from, and scheduled
long-term debt payments made by, Trinity. The decrease in
'Equipment on lease' at December 31, 1994 compared to March 31,
1994 is due primarily to sales of selected car types previously for
lease, partially offset by equipment purchases from Trinity. The
decrease in 'Long-term debt' at December 31, 1994 compared to March
31, 1994 is due to scheduled principal payments, coupled with the
retirement of an equipment trust certificate.
Results of Operations
Nine Months Ended December 31, 1994 vs.
Nine Months Ended December 31, 1993
Revenues increased primarily due to an escalation in barge revenues
caused by market-dictated freight rates. Barge operations returned
to normal historic levels after flooding in the midwestern United
States abated barge revenues during the previous nine month period.
The Company routinely acquires new railcars for lease. Such
additions to the railcar fleet generally cause increases in
revenues derived from leasing activities. Certain dispositions of
selected railcar types further contributed to the increase in
revenues in the current period, and such dispositions will reduce
future lease revenues. Additions and dispositions of selected
equipment is in the ordinary course of business for the lease
operations.
Operating profit increased principally due to a reduction of
interest expense caused by scheduled principal payments. The
disposition of selected railcar types, offset slightly by a
reduction in railcar rental profits caused by the disposition,
added to the operating profit increase.
Three Months Ended December 31, 1994 vs.
Three Months Ended December 31, 1993
Revenues increased due principally to the increase in barge
maritime freight rates, coupled with the disposition of selected
railcar types previously for lease.
Operating profit increased principally due to a reduction in
interest expense resulting from scheduled principal payments, along
with the disposition of selected railcar types previously for
lease.
PART II
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
27 Financial Data Schedule
(b) 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: /S/ F. Dean Phelps
F. Dean Phelps
Vice President
February 10, 1995
Index to Exhibit
NO. Description PAGE
27 Financial Data Schedule *
*
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1994
<CASH> 200000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 510400000
<DEPRECIATION> 135300000
<TOTAL-ASSETS> 488600000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 1000
0
0
<OTHER-SE> 170000000
<TOTAL-LIABILITY-AND-EQUITY> 488600000
<SALES> 0
<TOTAL-REVENUES> 87700000
<CGS> 0
<TOTAL-COSTS> 69900000
<OTHER-EXPENSES> (5500000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 23300000
<INCOME-TAX> 8200000
<INCOME-CONTINUING> 15100000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15100000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
