SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
-- ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|X | SECURITIES EXCHANGE ACT OF 1934
--
For the fiscal year ended March 31, 1995
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 1-6903
Trinity Industries, Inc.
( Exact name of registrant as specified in its charter)
Delaware 75-0225040
(State of Incorporation) (I.R.S. Employer Identification No.)
2525 Stemmons Freeway
Dallas, Texas 75207-2401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 689-0592
Securities Registered Pursuant to Section 12(b) of the Act
Name of each exchange
Title of each class on which registered
Common stock, $1.00 par value New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. --
|X |
--
The aggregate market value of voting stock held by nonaffiliates of the
Registrant is $1,531,783,124 as of May 26, 1995.
40,177,918
( Number of Shares of common stock outstanding as of May 26, 1995)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1995 Annual Report to Stockholders for the
fiscal year ended March 31, 1995 are incorporated by reference into Parts I,
II, and IV hereof and portions of the Registrant's definitive Proxy Statement
for the 1995 Annual Meeting of Stockholders to be held July 19, 1995 are
incorporated by refernece into Part III hereof.
PART I
Item 1. Business.
General Development of Business. Trinity Industries, Inc. (the
"Registrant") was originally incorporated under the laws of the State of Texas
in 1933. On March 27, 1987, Trinity became a Delaware corporation by merger
into a wholly-owned subsidiary of the same name.
Narrative Description of Business and Financial Information About
Industry Segments. The Registrant is engaged in the manufacture, marketing,
and leasing of a variety of metal products consisting principally of (1)
"Railcars" (i.e. railroad freight cars), principally tank cars, hopper cars,
gondola cars, intermodal cars and miscellaneous other freight cars; (2)
"Marine Products" such as boats, barges and various offshore service vessels
for ocean and inland waterway service and military vessels for the United
States Government and, to a limited extent, various size vessels for
international ocean transportation companies; (3) "Construction Products" such
as highway guardrail and highway and railway bridges, power plants, mills,
etc, highway safety products, passenger loading bridges and conveyor systems
for airports and other people and baggage conveyance requirements, ready-mix
concrete production and aggregates including distribution, and providing raw
material to owners, contractors and sub-contractors for use in the building
and foundation industry; (4) "Containers" such as (a) extremely large, heavy
pressure vessels and other heavy welded products including industrial
silencers, desalinators, evaporators, and gas processing systems, (b) pressure
and non-pressure containers for the storage and transportation of liquefied
gases, brewery products and other liquid and dry products, and (c) heat
transfer equipment for the chemical, petroleum and petrochemical industries;
(5) "Metal Components" such as weld fittings (tees, elbows, reducers, caps,
flanges, etc.) used in pressure piping systems and container heads (the ends
of pressure and non-pressure containers) for use internally and by other
manufacturers of containers; and (6) "Leasing" of Registrant manufactured
railcars and barges to various industries.
Various financial information concerning the Registrant's industry
segments for each of the last three fiscal years is included in the
Registrant's 1995 Annual Report to Stockholders on page 22 under the heading
"Segment Information", and such section is incorporated herein by reference.
Railcars. The Registrant manufactures railroad freight cars, principally
pressure and non- pressure tank cars, hopper cars, intermodal cars and gondola
cars used for transporting a wide variety of liquids, gases and dry cargo.
Tank cars transport products such as liquefied petroleum gas, liquid
fertilizer, sulfur, sulfuric acids and corn syrup. Covered hopper cars carry
cargo such as grain, dry fertilizer, plastic pellets and cement. Open-top
hoppers haul coal, and top-loading gondola cars transport a variety of heavy
bulk commodities such as scrap metals, finished flat steel products, machinery
and lumber. Intermodal cars transport various products which have been loaded
in containers to minimize shipping costs.
Marine Products. The Registrant manufactures a variety of marine
products pursuant to customer orders. It produces various types of vessels
for offshore service including supply, crew, fishing and other types of
boats. The Registrant is currently constructing various military vessels for
both the United States Army and Navy. The Registrant produces river hopper
barges which are used to carry coal, grain and miscellaneous commodities. The
purchasers of the Registrant's marine products include inland waterway marine
operators, offshore oil and gas drillers and operators, international ocean
transportation companies, barge transport companies and domestic and foreign
governmental authorities.
Construction Products. The construction products manufactured by the
Registrant include beams, girders, columns, highway guard rail and highway
safety devices and related barrier products, ready-mix concrete and
aggregates, passenger loading bridges, and baggage handling systems. These
products are used in the bridge, highway construction and building industries
and airports. Some of the sales of beams, girders and columns are to general
contractors and subcontractors on highway construction projects. Generally,
customers for highway guardrail and highway safety devices are highway
departments or subcontractors on highway projects. Passenger loading bridges
and conveyor systems are generally sold to contractors, airports, or airlines
as part of airport terminal equipment. Ready-mix concrete and aggregates are
used in the building and foundation industry and customers include primarily
owners, contractors and sub-contractors.
Containers. The Registrant is engaged in manufacturing metal containers
consisting of extremely large, heavy pressure vessels and other heavy welded
products, including industrial silencers, desalinators, evaporators, and gas
processing systems for the storage and transportation of liquefied petroleum
("LP") gas and anhydrous ammonia fertilizer. Pressure LP gas containers are
utilized at industrial plants, utilities, small businesses and in suburban and
rural areas for residential heating and cooking needs. Fertilizer containers
are manufactured for highway and rail transport, bulk storage, farm storage
and the application and distribution of anhydrous ammonia. The Registrant
also makes heat transfer equipment for the chemical, petroleum and
petrochemical industries and a complete line of custom vessels, standard steam
jacketed kettles, mix cookers, and custom-fabricated cooking vessels for the
food, meat, dairy, pharmaceutical, cosmetic and chemical industries.
Metal Components. The metal components manufactured by the Registrant
are made from ferrous and non-ferrous metals and their alloys and consist
principally of butt weld type fittings, flanges and pressure and non-pressure
container heads. The weld fittings include caps, elbows, return bends,
concentric and eccentric reducers, full and reducing outlet tees, and a full
line of pipe flanges, all of which are pressure rated. The Registrant
manufactures and stocks, in standard, extra-heavy and double-extra-heavy
weights and in various diameters, weld caps, tees, reducers, elbows, return
bends, flanges and also manufactures to customer specifications. The basic
raw materials for weld fittings and flanges are carbon steel, stainless steel,
aluminum, chrome-moly and other metal tubing or seamless pipe and forgings.
The Registrant sells its weld fittings and flanges to distributors and to
other manufacturers of weld fittings.
Container heads manufactured by the Registrant are pressed metal
components used in the further manufacture of a finished product. Since the
manufacture of container heads requires a substantial investment in heavy
equipment and dies, many other manufacturers order container heads from the
Registrant. Container heads are manufactured in various shapes and may be
pressure rated or non-pressure, depending on the intended use in further
manufacture. Other pressed shapes are also hot- or cold-formed to customer
requirements.
Leasing. The Company has one wholly-owned leasing subsidiary, Trinity
Industries Leasing Company ("TILC"), which was incorporated in 1979. TILC is
engaged in leasing specialized types of railcars, consisting of both tank cars
and hopper cars, to industrial companies in the petroleum, chemical, grain,
food processing, fertilizer and other industries which supply cars to the
railroads. At March 31, 1995, TILC had under lease 9,066 railcars. During
fiscal year 1995, TILC divested its inventory of river hopper barges
previously held for lease. The barges were operated under an agreement which
provided for management of the barges. The barges were generally used for
movement of commodities on the inland waterway system, primarily the
Mississippi and Missouri Rivers.
Substantially all equipment leased by TILC was purchased from the
Registrant at prices comparable to the prices for equipment sold by the
Registrant to third parties. As of March 31, 1995, TILC had equipment on
lease or available for lease purchased from the Registrant at a cost of $431.0
million. Generally, TILC purchases the equipment to be leased only after a
lessee has committed to lease such equipment.
The volume of equipment purchased and leased by TILC depends upon a
number of factors, including the demand for equipment manufactured by the
Registrant, the cost and availability of funds to finance the purchase of
equipment, the Registrant's decision to solicit orders for the purchase or
lease of equipment and factors which may affect the decision of the
Registrant's customers as to whether to purchase or lease equipment.
Although the Registrant is not contractually obligated to offer to TILC
equipment proposed to be leased by the Registrant's customers, it is the
Registrant's intention to effect all such leasing transactions through TILC.
Similarly, while TILC is not contractually obligated to purchase from the
Registrant any equipment proposed to be leased, TILC intends to purchase and
lease all equipment which the Registrant's customers desire to lease when the
lease rentals and other terms of the proposed lease are satisfactory to TILC,
subject to the availability and cost of funds to finance the acquisition of
the equipment.
Marketing, Raw Materials, Employees and Competition. As of March 31,
1995, the Registrant operated only in the continental United States. On May
5, 1995, the Registrant acquired one hundred percent of the capital stock of
the holding company which owns Grupo TATSA S.A. de C.V. Grupo TATSA is
headquartered in Mexico City, Mexico. The Registrant sells substantially all
of its products through its own salesmen operating from offices in Montgomery,
Alabama; Elizabethtown and Paducah, Kentucky; Shreveport, Louisiana; Flint,
Michigan; St. Louis, Missouri; Gulfport, Mississippi; Asheville, North
Carolina; Cincinnati and Girard, Ohio; Beaumont, Dallas/Ft. Worth, Houston and
Navasota, Texas; and Centerville, Utah. Independent sales representatives are
also used to a limited extent. The Registrant markets railcars, containers
and metal components throughout the United States. Except in the case of weld
fittings, guardrail, and standard size LP gas containers, the Registrant's
products are ordinarily fabricated to the customer's specifications pursuant
to a purchase order.
The principal materials used by the Registrant are steel plate,
structural steel shapes and steel forgings. There are numerous domestic and
foreign sources of such steel and most other materials used by the Registrant.
The Registrant currently has approximately 16,500 employees, of which
approximately 15,100 are production employees and 1,400 are administrative,
sales, supervisory and office employees.
There are numerous companies located throughout the United States that
are engaged in the business of manufacturing various railcars and containers
of the types manufactured by the Registrant, and these industries are highly
competitive. Companies manufacturing products which compete with the
Registrant's construction products consist of numerous other structural
fabricators and ready-mix concrete producers, most of which are smaller than
the Registrant. Small shipyards located on inland waterways and medium to
large size shipyards located on or near ports on navigable waterways produce
marine products which compete with those manufactured by the Registrant. Both
domestic and foreign manufacturers of metal components, some of which are
larger than the Registrant, compete with the Registrant. A number of
well-established companies actively compete with TILC in the business of
owning and leasing railcars, as well as banks, investment partnerships and
other financial and commercial institutions.
Recent Developments. Information concerning the Registrant's business
acquisitions are included in the Registrant's 1995 Annual Report to
Stockholders under the heading "Business Acquisitions," (pages 23 through 24)
and such section is incorporated herein by reference.
Other Matters. The Registrant is not materially affected by federal,
state and local provisions which have been enacted or adopted regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment. To date, the Registrant has not suffered any
material shortages with respect to obtaining sufficient energy supplies to
operate its various plant facilities or its transportation vehicles. Future
limitations on the availability or consumption of petroleum products
(particularly natural gas for plant operations and diesel fuel for vehicles)
could have an adverse effect upon the Registrant's ability to conduct its
business. The likelihood of such an occurrence or its duration, and its
ultimate effect on the Registrant's operations, cannot be reasonably predicted
at this time.
Item 2. Properties.
The Registrant's principal executive offices are located in a ten story
office building containing approximately 107,000 sq. ft. and a connected
adjacent building containing approximately 66,000 sq. ft., each owned by the
Registrant, in Dallas, Texas. The following table sets forth certain salient
facts with respect to each of the operating plant properties owned and/or
leased by the Registrant at March 31, 1995:
Registrant's Uses of Approx.
Interest in Premises Bldg. Area Expiration Annual
Plant Location Property (1) (Sq Ft.) Date Rentals
Ackerman, MS Fee (e) 78,000 - -
Ashland City, TN Fee (b) 92,000 - -
Asheville, NC Lease (a) 94,000 06/30/99 $198,000
Beaumont, TX Fee (a) 431,000 - -
Bessemer, AL Fee (a) 1,183,000 - -
Brownsville, PA Fee (b) 200,000 - -
Brusly, LA Fee (b) 148,000 - -
Butler, PA Fee (a) 40,000 - -
Butler, PA Lease (a) 30,000 12/31/97 $ 65,000
Caruthersville, MO Fee (b) 302,000 - -
Cedartown, GA Fee (d) 97,000 - -
Centerville, UT Fee (c) 63,000 - -
Cincinnati, OH Fee (d,e) 150,000 - -
Dallas, TX
(2 plants) Fee (a) 447,000 - -
Denton, TX Fee (a) 65,000 - -
Elizabethtown, KY Fee (c) 40,000 - -
Elkhart, IN Fee (e) 125,000 - -
Enid, OK Fee (e) 73,000 - -
Fairfield, OH Lease (d) 72,000 06/30/95 $ 72,000
Flat Rock, NC Lease (a) 8,000 01/31/98 $ 64,000
Ft. Worth, TX
(6 plants) Fee (a,c,d) 973,000 - -
Girard, OH
(2 plants) Fee (c) 326,000 - -
Greenville, PA Fee (a) 918,000 - -
Gulfport, MS Fee (b) 438,000 - -
Harvey, LA Lease (b) 34,000 03/26/96 $ 86,000
Houston, TX
(3 plants) Fee (b,c,d) 620,000 - -
Johnstown, PA Fee (a) 152,000 - -
Lima, OH Fee (c) 72,000 - -
Lockport, LA Fee (b) 43,000 - -
Longview, TX
(4 plants) Fee (a,d) 557,000 - -
Longview, TX Lease (a) 57,000 10/31/95 $ 32,000
Madisonville, LA Fee (b) 137,000 - -
McKees Rocks, PA Fee (a) 600,000 - -
Montgomery, AL
(2 plants) Fee (c) 421,000 - -
Moss Point, MS
(2 plants) Fee (b) 155,000 - -
Mt. Orab, OH Fee (a) 183,000 - -
Nashville, TN Fee (b) 261,000 - -
Navasota, TX Fee (e) 151,000 - -
New London, MN Fee (d) 20,000 - -
New Orleans, LA Lease (2) (b) 254,000 12/31/16 $ 42,000
Oklahoma City, OK Fee (a,d) 260,000 - -
Orange, TX Fee (d) 735,000 - -
Paducah, KY Fee (b) 40,000 - -
Panama City, FL Fee (b) 41,000 - -
Paris, TN Fee (a) 21,000 - -
Pine Bluff, AR Fee (d) 34,000 - -
Quincy, IL Fee (d) 95,000 - -
Rocky Mount, NC Fee (d) 53,000 - -
Saginaw, TX
(2 plants) Fee (a) 263,000 - -
San Antonio, TX Fee (c) 246,000 - -
Sand Springs, OK Fee (e) 156,000 - -
Shreveport, LA Lease (d) 691,000 11/30/42 $ 12,000
Tulsa, OK Fee (a,d) 114,000 - -
Vidor, TX Fee (a) 40,000 - -
West Memphis, AR Fee (e) 63,000 - -
(1) (a) Manufacture of Railcars
(b) Manufacture of Marine Products
(c) Manufacture of Construction Products
(d) Manufacture of Containers
(e) Manufacture of Metal Components
(2) The lease may be canceled by either party after 12/31/96.
All machinery and equipment and the buildings occupied by the Registrant
are maintained in good condition. The Registrant estimates that its plant
facilities were utilized during the fiscal year at an average of approximately
80 percent of present productive capacity for railcars, 70 percent for Marine
Products, 75 percent for Construction Products, 75 percent for Containers, and
75 percent for Metal Components.
Item 3. Legal Proceedings.
See page 28 of the Registrant's 1995 Annual Report to Stockholders which
is incorporated herein by reference for a discussion of legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal year 1995.
___________________
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters.
Market for the Registrant's common stock and related stockholder matters
are incorporated herein by reference from the information contained on page 3
under the caption "Corporate Profile" and on page 15 under the caption
"Financial Summary" of the Registrant's 1995 Annual Report to Stockholders.
Item 6. Selected Financial Data.
Selected financial data is incorporated herein by reference from the
information contained on page 15 under the caption "Financial Summary" of the
Registrant's 1995 Annual Report to Stockholders.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Management's discussion and analysis of financial condition and results
of operations are incorporated herein by reference from the Registrant's 1995
Annual Report to Stockholders, pages 16 through 17.
Other persons, who are not executive officers of the Registrant, are
listed on page 30 under the caption "Division Officers" of the Annual Report
to Stockholders, and such caption is hereby incorporated by reference.
Item 8. Financial Statements and Supplementary Data.
Financial statements of the Registrant at March 31, 1995 and 1994 and for
each of the three years in the period ended March 31, 1995 and the auditor's
report thereon, and the Registrant's unaudited quarterly financial data for
the two year period ended March 31, 1995, are incorporated by reference from
the Registrant's 1995 Annual Report to Stockholders, pages 18 through 29.
Item 9. Disagreements on Accounting and Financial Disclosure.
No disclosure required.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information concerning the directors and executive officers of the
Registrant is incorporated herein by reference from the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders on July 19,
1995, page 3, under the caption "Election of Directors".
Executive Officers of the Registrant.*
The following table sets forth the names and ages of all executive
officers of the Registrant, the nature of any family relationship between
them, all positions and offices with the Registrant presently held by them,
the year each person first became an officer and the term of each person's
office:
Officer Term
Name(1)(2)(3) Age Office Since Expires(4)
W. Ray Wallace 72 Chairman, President 1958 July 1995
Chief Executive Officer
Ralph A. Banks, Jr 71 Senior Vice Presiden 1962 July 1995
Richard G. Brown 71 Senior Vice Presiden 1979 July 1995
K.W. Lewis 56 Senior Vice Presiden 1974 July 1995
Lee D. McElroy 72 Senior Vice Presiden 1992 July 1995
Timothy R. Wallace 41 Director & Group 1993 July 1995
Vice President
John Dane, III 44 Group Vice President 1993 July 1995
John T. Sanford 43 Group Vice President 1993 July 1995
Mark Stiles 46 Group Vice President 1993 July 1995
Jack L. Cunningham 50 Vice President 1982 July 1995
John M. Lee 34 Vice President 1994 July 1995
R. A. Martin 60 Vice President 1974 July 1995
Tim L. Oglesby 37 Vice President 1995 July 1995
F. Dean Phelps, Jr 51 Vice President 1979 July 1995
Joseph F. Piriano 58 Vice President 1992 July 1995
Linda S. Sickels 44 Vice President 1995 July 1995
Neil O. Shoop 51 Treasurer 1985 July 1995
William J. Goodwin 47 Controller 1986 July 1995
J.J. French, Jr. 64 Secretary 1970 July 1995
* This data is furnished as additional information pursuant to instructions to
Item 401 to Regulation S-K and in lieu of inclusion in the Registrant's Proxy
Statement.
(1) W. Ray Wallace, Chairman, President & Chief Executive Officer, is the
father of Timothy R. Wallace, a Director and Group Vice President of the
Registrant.
(2) Mr. Stiles joined the Registrant in 1991 upon the acquisition by the
Registrant of Transit Mix Concrete Company. For at least five years prior
thereto, Mr. Stiles was Executive Vice President and General Manager of
Transit Mix. Mr. Piriano was Director of Purchasing for the Registrant for at
least the last five years. Mr. Lee joined the Registrant in 1994. For at
least five years prior thereto, Mr. Lee was a manager for a national public
accounting firm. Mr. Oglesby joined the Registrant in 1993. For at least
five years prior thereto, Mr. Oglesby was a software manager for a national
defense contractor. Ms. Sickels joined the Registrant in 1992. Prior to that,
Ms. Sickels was in government relations for a state utility company. All of
the other above-mentioned executive officers, except Mr. French, have been in
the full-time employ of the Registrant or its subsidiaries for more than five
years. Although the titles of certain such officers have changed during the
past five years, all have performed essentially the same duties during such
period of time.
(3) Mr. French, an attorney, is President of Joe French & Associates, a
Professional Corporation, since April, 1993. For at least five years prior
thereto, Mr. French was employed by Locke Purnell Rain Harrell, a Professional
Corporation.
(4) It is anticipated that all of such officers will be reelected at the
Annual Meeting of the Board of Directors to be held on July 19, 1995.
Item 11. Executive Compensation.
Information on executive compensation is incorporated herein by reference
from the Registrant's definitive proxy statement for the Annual Meeting of
Stockholders on July 19, 1995, page 6 under the caption "Executive
Compensation and Other Matters".
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Information concerning security ownership of certain beneficial owners
and management is incorporated herein by reference from the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders on July 19,
1995, page 2, under the caption "Voting Securities and Stockholders", and page
3, under the caption "Election of Directors".
Item 13. Certain Relationships and Related Transactions.
Information concerning certain relationships and related transactions is
incorporated herein by reference from the Registrant's definitive proxy
statement for the Annual Meeting of Stockholders on July 19, 1995, pages 3
through 4, under the caption "Election of Directors".
______________________
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1&2. Financial statements and financial statement schedules.
The financial statements and schedules listed in the
accompanying indices to financial statements and
financial statement schedules are filed as part of
this Annual Report Form 10-K.
3. Exhibits.
The exhibits listed on the accompanying index to exhibits
are filed as part of this Annual Report Form 10-K.
(b) Reports on Form 8-K
No Form 8-K was filed during the fourth quarter of fiscal 1995.
Trinity Industries, Inc.
Financial Statements and Financial Statement Schedules
for Inclusion in Annual Report Form 10-K
Year Ended March 31, 1995
Trinity Industries, Inc.
Index to Financial Statements
and Financial Statement Schedules
(Item 14 (a))
REFERENCE
1995 Annual
Form Report to
10-K Stockholders
(Page) (Page)
Consolidated balance sheet at
March 31, 1995 and 1994. . . . . . . . . . - 19
For each of the three years in the
period ended March 31, 1995:
Consolidated income statement. . . . . . - 18
Consolidated statement of cash flows . . - 20
Consolidated statement of
stockholders' equity . . . . . . . . . - 21
Notes to consolidated financial
statements . . . . . . . . . . . . . . - 21
Supplemental information:
Supplementary unaudited quarterly data. . - 29
Consolidated financial statement schedule
for each of the three years in the
period ended March 31, 1995:
II - Allowance for doubtful accounts. 12 -
Other financial information:
Weighted average interest rate on
short-term borrowings. . . . . . . . . . 12 -
All other schedules have been omitted since the required information
is not present or is not present in amounts sufficient to require submission
of the schedules, or because the information required is included in the
consolidated financial statements, including the notes thereto.
Financial statements of the Registrant's unconsolidated foreign
affiliates are not presented herein, because they do not constitute
significant subsidiaries.
The consolidated financial statements and supplementary information
listed in the above index which are included in the 1995 Annual Report to
Stockholders are hereby incorporated by reference.
EXHIBIT (23)
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Trinity Industries, Inc. of our report dated May 10, 1995, included
in the 1995 Annual Report to Stockholders of Trinity Industries, Inc.
Our audits also included the financial statement schedule of Trinity
Industries, Inc. listed in Item 14(a). This schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in Post-Effective
Amendment No. 3 to the Registration Statement (Form S-8, No. 2-64813),
Post-Effective amendment No. 1 to the Registration Statement (Form S-8, No.
33-10937), Post-Effective Amendment No. 1 to the Registration Statement (Form
S-3, No. 33-12526), Amendment No. 1 to the Registration Statement (Form S-3,
No. 33- 57338), Registration Statement (Form S-8, No. 33-35514), Registration
Statement (Form S-8, No. 33- 73026), Post-Effective Amendment No. 1 to the
Registration Statement (Form S-4, No. 33-51709) of Trinity Industries, Inc.
and in the related Prospectuses of our report dated May 10, 1995, with respect
to the consolidated financial statements and schedules of Trinity Industries,
Inc. included or incorporated by reference in this Annual Report (Form 10-K)
for the year ended March 31, 1995.
ERNST & YOUNG LLP
Dallas, Texas
June 26, 1995
<PAGE>
SCHEDULE II
Trinity Industries, Inc.
Allowance for Doubtful Accounts
Year Ended March 31, 1995, 1994 and 1993
(in millions)
Additions
Balance at charged to Accounts Balance
beginning costs and charged at end
of year expenses off of year
Year Ended March 31, 1995 $ 1.0 $ 0.3 $0.5 $ 0.8
Year Ended March 31, 1994 $ 1.2 $ 0.3 $0.5 $ 1.0
Year Ended March 31, 1993 $ 1.5 $ 0.4 $0.7 $ 1.2
Trinity Industries, Inc.
Other Financial Information
Short-Term Borrowings
The weighted average interest rate on short-term borrowings outstanding as of
March 31, 1995, 1994, and 1993 is 5.28%, 3.57%, and 4.00%, respectively.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Trinity Industries, Inc.
Registrant
By: /s/ F. Dean Phelps, Jr.
F. Dean Phelps, Jr.
Vice President
June 26, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons of the Registrant and in
the capacities and on the dates indicated:
Directors: Principal Executive Officer:
/s/ David W. Biegler /s/ W. Ray Wallace
David W. Biegler W. Ray Wallace
Director President and Chairman
June 26, 1995 June 26, 1995
Principal Financial Officer:
/s/ Barry J. Galt /s/ K. W. Lewis
Barry J. Galt K. W. Lewis
Director Senior Vice President
June 26, 1995 June 26, 1995
Principal Accounting Officer:
/s/ Dean P. Guerin /s/ F. Dean Phelps, Jr.
Dean P. Guerin F. Dean Phelps, Jr.
Director Vice President
June 26, 1995 June 26, 1995
Jess T. Hay
Director
June 26, 1995
/s/ Edmund M. Hoffman
Edmund M. Hoffman
Director
June 26, 1995
/s/ Ray J. Pulley
Ray J. Pulley
Director
June 26, 1995
/s/ Timothy R. Wallace
Timothy R. Wallace
Director
June 26, 1995
Trinity Industries, Inc.
Index to Exhibits
(Item 14(a))
NO. DESCRIPTION PAGE
(3.1) Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.A
to Registration Statement No. 33-10937 filed
April 8, 1987). *
(3.2) By-Laws of Registrant (incorporated by reference
to Exhibit 3.2 to Form 10-K filed June 16, 1992). *
(4.1) Specimen Common Stock Certificate of Registrant
(incorporated by reference to Exhibit 3B to
Registration Statement No. 33-10937 filed
April 8, 1987). *
(10.1) Fixed Charges Coverage Agreement dated as of
January 15, 1980, between Registrant and
Trinity Industries Leasing Company (incorporated by
reference to Exhibit 10.1 to Registration Statement
No. 2-70378 filed January 29, 1981). *
(10.2) Tax Allocation Agreement dated as of January 22, 1980
between Registrant and its subsidiaries
(including Trinity Industries Leasing Company)
(incorporated by reference to Exhibit 10.2 to
Registration Statement No. 2-70378 filed January 29, 1981). *
(10.3) Form of Executive Severance Agreement entered into
between the Registrant and all executive officers of
the Registrant (other than Mr. French) (incorporated
by reference to Exhibit 10.3 to Form 10-K filed
June 19, 1989). *
(10.4) Trinity Industries, Inc., Stock Option Plan With
Stock Appreciation Rights (incorporated by reference
to Registration Statement No. 2-64813 filed
July 5, 1979, as amended by Post-Effective Amendment
No. 1 dated July 1, 1980, Post-Effective Amendment
No.2 dated August 31, 1984, and Post-Effective
Amendment No. 3 dated July 13, 1990). *
(10.5) Directors' Retirement Plan adopted December 11, 1986
incorporated by reference to Exhibit 10.6 to Form
10-K filed June 14, 1990). *
(10.6) 1989 Stock Option Plan with Stock Appreciation Rights
(incorporated by reference to Registration Statement
No. 33-35514 filed June 20, 1990) *
(10.7) Supplemental Retirement Benefit Plan for W. Ray Wallace,
effective July 18, 1990 (incorporated by reference to
Exhibit 10.8 to Form 10-K filed June 13, 1991). *
(10.8) 1993 Stock Option and Incentive Plan
(incorporated by reference to Registration
Statement No. 33-73026 filed December 15, 1993) *
Trinity Industries, Inc.
Index to Exhibits -- (Continued)
(Item 14(a))
NO. DESCRIPTION PAGE
(10.9) Pension Plan A for Salaried Employees of
Trinity Industries, Inc. and Certain Affiliates
dated August 20, 1985, as amended by Amendment
No. 1 dated May 27, 1986, Amendment No. 2 dated
December 30, 1986, Amendment No. 3 dated
December 12, 1986, Amendment No. 4 dated
March 31, 1987, Amendment No. 5 dated March 31, 1987,
Amendment No. 6 dated December 4, 1987,
Amendment No. 7 dated July 26, 1988,
Amendment No. 8 dated July 28, 1988,
Amendment No. 9 dated March 15, 1989,
Amendment No. 10 dated March 31, 1989, and
Amendment No. 11 dated July 14, 1989
(incorporated by reference to Exhibit 10.9
to Form 10-K filed June 13, 1991). *
(10.10) Supplemental Profit Sharing Plan for Employees
of Trinity Industries Inc.
and Certain Affiliates dated June 30, 1990,
as amended by Amendment No. 1 dated June 13, 1991.
Supplemental Profit Sharing Trust for Employees of
Trinity Industries, Inc. and Certain Affiliates
dated June 30, 1990, as amended by Amendment
No. 1 dated June 13, 1991 (incorporated
by reference to Exhibit 10.10 to Form 10-K
filed June 13, 1991). *
(13) Annual Report to Stockholders. With the exception
of the information incorporated by reference into
Items 1, 5, 6, 7 and 8 of Form 10-K, the
1995 Annual Report to Stockholders is not
deemed as a part of this report.
(21) Listing of subsidiaries of the Registrant. 16
(23) Consent of Independent Auditors. 11
(27) Financial Data Schedules.
(99.1) Annual Report on Form 11-K for employee
stock purchase, savings and
similar plans filed pursuant to Rule 15d-21.
EXHIBIT 13
Corporate Profile
Trinity Industries, Inc. is a large manufacturer of heavy metal
products with manufacturing and fabrication operations in six
business segments: Railcars, Marine Products, Construction
Products, pressure and non-pressure Containers, Metal
Components, and Leasing. The Company, headquartered in Dallas,
Texas, produces at seventy-three facilities containing over
twelve million square feet of manufacturing space in eighteen
states.
The Company has a continuing strategy of growth through internal
expansion and strategic acquisitions within its established
business segments.
Trinity's stockholders of record numbered more than 2,700 at
March 31, 1995. Its common stock is traded on the New York Stock
Exchange under the symbol TRN.
Highlights
(in millions except per share data)
Year Ended March 31
1995 1994 1993
Revenues. . . . . . . . . . . . . . . . $2,314.9 1,784.9 1,540.0
Income before cumulative effect of change
in accounting for income taxes . . . . $ 89.1 68.3 45.0
Cumulative effect of change in
accounting for income taxes. . . . . . - 7.9 -
Net income. . . . . . . . . . . . . . . $ 89.1 76.2 45.0
Income per common and common equivalent
share before cumulative effect of
change in accounting for income taxes. $ 2.20 1.69 1.27
Cumulative effect of change in
accounting for income taxes. . . . . . - 0.20 -
Net income per common and common
equivalent share (1) . . . . . . . . . $ 2.20 1.89 1.27
Cash dividends per share(1) . . . . . . $ 0.68 0.64 0.53
Stockholders' equity. . . . . . . . . . $ 641.2 570.5 507.3
Total assets:
Excluding Leasing Subsidiary. . . . . $1,121.8 959.5 735.4
Leasing Subsidiary. . . . . . . . . . $ 298.2 347.3 353.7
$1,420.0 1,306.8 1,089.1
Capital expenditures (net of business acquisitions):
Excluding Leasing Subsidiary. . . . . $ 64.7 45.2 36.2
Leasing Subsidiary. . . . . . . . . . $ 28.7 37.6 74.5
$ 93.4 82.8 110.7
(1) Net income per common and common equivalent share and Cash dividends per
share for the year ended March 31, 1993 are restated for the three-for-
two stock split distributed on August 31, 1993.
TO OUR STOCKHOLDERS
It is with pleasure and pride that I report on the status of our Company.
It has been a good year for Trinity. It was a year of record revenues and
net income, of record production and orders on hand, of growth and
expansion, and of acquisitions and new technology. It has been a year of
healthy challenges - those caused by growth and competition. The Annual
Report to Stockholders speaks for itself. Our employees have met
challenges, and Trinity is prospering.
In the twelve month period ended March 31, 1995, revenues were $2.3
billion, and the Company recorded net income of $89.1, or $2.20 per share.
For the twelve months of the prior fiscal year, income before cumulative
effect of change in accounting for income taxes of $68.3 million, or $1.69
per share, was recorded on revenues of $1.8 billion. Net income was $76.2
million, or $1.89 per share. In the three months ended March 31, 1995,
revenues totalled $638.2 million. Net income of $25.7 million, or $0.63
per share, was recorded. In the prior year's comparable quarter, net
income of $15.2 million, or $0.38 per share, was recorded on revenues of
$452.7 million.
Trinity is becoming increasingly global in many aspects of its business.
With increased production, Trinity must now look internationally for many
of the materials and component parts needed for manufacture and
maintenance. As free trade laws like NAFTA are passed, it is both an
encouragement and a necessity to keep a watchful eye on international
competition. Many challenges and opportunities originate from these
rapidly changing political and economic phenomenon.
Subsequent to the close of fiscal 1995, one such opportunity for
international expansion occurred. Trinity seized this opportunity and
increased its presence in Mexico. On May 5, 1995, Trinity acquired the
holding company for Grupo Tatsa, headquartered in Mexico City. Grupo Tatsa
manufactures and distributes a wide variety of fabricated steel products,
including products for the storage and transportation of liquefied
petroleum products marketed in Mexico and other Latin American countries.
The acquisition of Grupo Tatsa should add to Trinity's flexibility and cost
efficiency as these operations are integrated into the company's
operations.
Increased opportunities are coupled with increased competition and this,
generally, means greater demand for the materials, components and supplies
needed to build the Company's products. Frequently, seeking materials,
component parts, and supplies intenationally may drive up costs and extend
delivery times. These business conditions call for attentive effort,
creativity and salesmanship on the part of our employees. We have been
successful in meeting these challenges and are proud of our employees
abilities.
We continually evaluate our facilities and our products to determine their
cost-effectiveness and relevance to future business operations. During the
past year, we have disposed of some facilities and acquired others in this
continuing effort to maximize and efficiently utilize our resources. We
continue our philosophy of expansion through a balance of internal growth
and strategic acquisitions. Internal review and evaluation is a normal
part of the acquisition and expansion process. During the last quarter of
the fiscal year, a review and evaluation was concluded of certain assets
used by the Company in its business operations. Certain real property was
determined to be in excess of that required for future business operations.
While the ultimate values for these assets on sale will not be known until
the actual sale, management determined that a valuation provision was
appropriate. A valuation reserve was established for approximately eight
million dollars.
Our emphasis on quality and safety is keeping pace with our growth. We
have developed a bilingual, computer-assisted training program for workers,
designed to teach and upgrade skills and provide safety training on an
ongoing basis. This advanced program is being tested in our Railcars
segment and will soon be employed throughout the company.
We continue to seek and acquire new technology that provides more
consistent quality and efficiency in our operations. We are using robotics
more frequently in areas where consistency and safety are critical.
Over the past year, Trinity has been recognized with a number of awards
from major companies, reconfirming our efforts to provide quality products
and outstanding service at competitive prices. We strive to serve our
customers, we also strive to be responsible corporate citizens, remaining
ever mindful of our environment and the well-being of the world around us.
It appears that both the railcar and marine replacement cycles are becoming
more orderly. We have experienced increased demand in both our Railcars
and Marine Products segments and are realizing benefits of Trinity's
readiness to replace aging fleets. The Railcars segment finished fiscal
1995 with record orders on hand and increased its unit production rate in
the fourth quarter by more than twenty percent compared to the previous
quarter.
In addition to replacement demand, large U.S. grain crops and demand for
grain by developing countries are improving the outlook for barges in the
Marine Products segment. While barges are important marine products,
specialty boats like those used for resort recreation, oceanographic
vessels, and high speed patrol boats and off-shore work boats add to the
diversity of our Marine Products segment. From all indications, we are on
the verge of a favorable across-the-board shipbuilding cycle.
Our Construction Products segment has expanded over the past year. There
appear to be more signs of vitality in construction work than we have seen
in almost a decade. We have expanded our highway guardrail and road
barrier products and substantially increased our concrete and aggregate
business. Trinity recently purchased certain Texas ready-mix concrete
equipment, facilities and aggregate mining assets from LaFarge Corporation.
This purchase moves the Transit Mix business into geographical areas in
Texas and Louisiana not served by previous operations. We are anticipating
additional growth in these markets.
Looking forward, it is anticipated that the Company will continue its
expansion and upward trend. We appreciate your continued support, the
dedication of our loyal employees, and the support of our customers and
suppliers.
W. Ray Wallace
Chairman, President and
Chief Executive Officer
Railcars
Trinity's Railcars segment manufactures a broad line of freight and
tank railcars and related railcar parts and components. Railcars are used to
transport various bulk products and commodities including coal, grain,
cement, plastic raw materials, petroleum products, chemicals, intermodal
containers (products bundled in shipping containers designed to fit on
railcars and other modes of transportation to minimize shipping costs),
lumber and similar products.
Trinity markets railcars principally to customers in North America
including railroads, private shippers (major corporations and associations
who chose to own their own equipment for movement of their commodities and
products), and leasing companies. The Company's leadership role in the
railcar industry is also creating opportunities internationally.
After more than a decade of consolidation of railcar types, railcar
quantities, railroad companies and railroad operating systems, it appears
that the replacement cycle for many types of railcars is fully in progress.
The Company is enjoying record levels of railcar orders for a wide variety of
types and models. These orders are an expression of customer confidence in
Trinity's products and services.
Trinity is mindful of its leadership in the railcar industry and has
instituted and developed many internal and external customer satisfaction and
quality assurance programs. Trinity's goal of providing exceptional value to
customers in its products and services is the heart of the Railcars segment
business philosophy. Focus on the customer's requirements and how to serve
those needs is the principal business strategy.
The Railcars segment reported an increase in operating profit of 66.4%
on a 58.4% increase in revenues for fiscal 1995. Revenues were $1.16 billion
and operating profit was $88.5 million for the year ended March 31, 1995. In
the prior fiscal year, revenues of $730.6 million and operating profit of
$53.2 million were reported.
Marine Products
Trinity's Marine Products segment is a leading producer of small-to-
medium sized vessels for commercial and military customers in domestic and
international markets and of inland waterway and ocean-going barges. Examples
of some of the vessels built by the Company are crew boats (generally, to
transport operational personnel to marine work locations), tug boats, supply
boats, ferries, inland water hopper and tank barges, ocean- going
"double-skin" tanker barges, tow boats, push boats, fishing boats, excursion
boats, riverboat casinos, fire and rescue boats and luxury yachts. Examples of
military and government owned vessels include oceanographic research ships,
ocean surveillance ships, hydrographic vessels, and the United States Special
Operations Command next generation Mark V Pegasus high speed craft for
insertion and extraction of special operations forces.
In the Company's continuing effort to expand both the product and
customer base, the Company entered into agreements with the United States
Maritime Administration (commonly referred to as MARAD) for development of
several new products including a new high speed, low wake catamaran passenger
ferry, a large passenger / vehicle ferry, a container / bulk carrier and a
multi-purpose cargo ship. As international economic conditions improve, these
types of projects may develop new markets. The Company has focused its
resources on expansion and upgrading ship repair, conversion, cleaning and gas
freeing (cleaning of vessels and barges) capabilities, as well as improvements
to barge construction and repair facility.
The Marine Products segment revenues were $369.7 million and
operating profit was $30.3 million for the year ended March 31, 1995. In the
prior fiscal year, revenues of $360.7 million and operating profit of $28.9
million were reported.
Construction Products
Trinity's Construction Products segment fabricates a broad line of
products for supply to governmental, commercial, industrial and utility
customers. Major product lines include highway guardrail, with a full line of
special highway safety products, structural components for highway and
railroad bridges, heavy weldments and truck bodies for mining and construction
equipment, custom roll-formed shapes for railcalrs, trailers, and other uses,
passenger loading bridges and conveyor systems for airports and ready-mix
concrete and aggregates. Primary markets are federal and state governments as
well as Canada, Mexico, Puerto Rico, and other countries. During the fiscal
year, Trinity expanded further in the ready-mix concrete and aggregates
product line through acquisitions of additional facilities in Texas and
Louisiana (see Business Acquisitions in the Notes to Consolidated Financial
Statements). Demand remains high for these products.
Trinity's Construction Products segment is in a favorable position as
attention is focused on the repair and upgrading of the nations bridges and
highways. Trinity is prepared to meet the demand expected for the products
offered by the Construction Products segment.
The Construction Products segment revenues were $355.5 million and
operating profit was $35.6 million for the year ended March 31, 1995. In the
prior fiscal year, revenues of $333.1 million and operating profit of $35.6
million were reported.
Containers
Trinity's Containers segment manufactures a variety of vessels. The
Company fabricates containers ranging in size from as small as 50 gallons to
as large as 500,000 gallons; extremely large, heavy pressure vessels and
other heavy welded products; and heat transfer equipment.
Pressure and nonpressure containers built to Department of
Transportation and American Society of Mechanical Engineers' standards are
used for the transportation and storage of liquefied petroleum gases, food
and beverage products, and other liquid and dry products. Products range
from domestic and storage tanks to truck tank and transport barrels. Vessels
are generally constructed of carbon steel but may be constructed of other
materials such as alloy, stainless steel, and aluminum. Products include
pressure vessels, refinery and chemical reactors, industrial silencers, heat
recovery systems, desalinators, and evaporators. Heat transfer equipment is
built to an exact set of design standards and configurations provided by the
customer. Customers include residential, governmental, commercial and an
array of industrial users, specifically, petrochemical, food processing and
utility industries.
The Containers segment's revenues were $169.7 million and operating
profit was $9.7 million for the year ended March 31, 1995. In the prior
fiscal year, revenues of $155.6 million and operating profit of $9.8 million
were reported.
Metal Components
Trinity's Metal Components segment manufactures and markets Hackney
and Flo-Bend brands of fittings and flanges and container heads. Weld fittings
include full and reducing outlet tees, elbows, return bends, concentric and
eccentric reducers, caps, and forged flanges of all types. Flanges and
fittings are manufactured from carbon steel, stainless steel, chrome-moly and
many other kinds of steel.
Container heads are the rounded ends on containers. Many container
heads manufactured by Trinity are large pressed metal components used in the
further manufacture of finished custom containers used by the chemical and
petroleum industries. The manufacture of container heads requires a
substantial investment in machinery and equipment. Trinity supplies
fabricators with container heads which they are unable to manufacture
themselves. Container heads are manufactured in various shapes and may be
pressure or nonpressure rated depending on the specifications of the
customer.
The metal components segment is comprised of seven manufacturing
locations, and Trinity has expanded this business segment through strategic
acquisition of certain assets of Flo-Bend, Inc. (see Business Acquisitions in
the Notes to Consolidated Financial Statements).
The Metal Components segment revenues were $105.5 million and
operating profit was $14.9 million for the year ended March 31, 1995. In the
prior fiscal year, revenues of $99.7 million and operating profit of $11.7
million were reported.
Leasing
With Trinity's wholly-owned leasing subsidiary, Trinity Industries
Leasing Company, the Company can offer customers an alternative to purchasing
railcars, thereby reaching a broader base of customers. The options provided
by leasing allows customers to retain working capital and reduce
administrative expenses. Leasing customers also receive the benefit of
Trinity's exceptional maintenance, testing and repair facilities.
Leasing provides Trinity with a steady flow of income, tax deferrals,
and equity in long-life assets.
The Leasing segment revenues were $156.9 million and operating profit
was $23.6 million for the year ended March 31, 1995. In the prior fiscal
year revenues of $104.6 million and operating profit of $15.3 million were
reported. Because of the consolidation of Trinity Industries Leasing Company
under Statement of Financial Accounting Standards Number 94 (See Summary of
Significant Accounting Policies and Leasing notes in Notes to Consolidated
Financial Statements), intercompany interest income aggregating $8.1 million
is eliminated from Trinity's consolidated financial statements.
Mexico Expansion
On May 5, 1995, Trinity acquired one hundred percent of the capital
stock of the holding company which owns Grupo TATSA S. A. de C. V. in
exchange for shares of Trinity common stock.
Grupo TATSA, headquartered in Mexico City, Mexico, manufactures and
distributes a wide variety of fabricated steel products including containers
(primarily for the storage or transportation of liquefied petroleum
products), rail tankcar barrels, and heads which are used within Grupo TATSA
as well as sold to other manufacturers from its manufacturing facilities in
Mexico City, Monclova, and Huehuetoca, Mexico. Grupo TATSA serves the
Mexican market and other Latin American countries as well as exporting to the
United States.
Grupo TATSA has a long standing reputation for quality and service in
residential and industrial products. Grupo TATSA was established during the
1950's. The acquisition of Grupo TATSA should add to Trinity's flexibility
and cost efficiency as these operations are integrated into the Company's
operations.
<TABLE>
Financial Summary
<CAPTION>
(in millions except for percent and per share data)
Year ended March 31
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,314.9 1,784.9 1,540.0 1,273.3 1,348.1
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . $ 157.5 116.6 74.6 43.4 59.1
Interest expense, net (excluding Leasing Subsidiary) . . . . . . . $ 11.4 4.0 3.3 6.4 9.4
Income before income taxes and cumulative effect of change in
accounting for income taxes . . . . . . . . . . . . . . . . . . . $ 147.5 114.2 72.1 39.7 51.5
Provision for income taxes . . . . . . . . . . . . . . . . . . . . $ 58.4 45.9 27.1 15.4 19.5
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . % 39.6 40.2 37.6 38.8 37.8
Income before cumulative effect of change in accounting
for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . $ 89.1 68.3 45.0 24.3 32.0
Cumulative effect as of April 1, 1993 of change in accounting
for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . $ - 7.9 - - -
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 89.1 76.2 45.0 24.3 32.0
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,420.0 1,306.8 1,089.1 1,021.2 973.5
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . $ 242.9 277.9 293.2 357.3 326.0
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . $ 641.2 570.5 507.3 379.0 372.0
Stock data:(1)
Weighted average number of common and common equivalent
shares outstanding. . . . . . . . . . . . . . . . . . . . . . . 40.5 40.3 35.4 34.2 34.4
Income per common and common equivalent share before
cumulative effect of change in accounting for income taxes. . . $ 2.20 1.69 1.27 0.71 0.93
Cumulative effect of change in accounting for income taxes . . . $ - 0.20 - - -
Net income per common and common equivalent share. . . . . . . . $ 2.20 1.89 1.27 0.71 0.93
Dividends per share(2) . . . . . . . . . . . . . . . . . . . . . $ 0.68 0.64 0.53 0.53 0.53
Stock closing price range:
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . $ 39 3/4- 35 1/2- 22 1/2- 19 3/8- 19 1/8-
33 7/8 29 5/8 18 16 1/8 14 5/8
Second quarter. . . . . . . . . . . . . . . . . . . . . . . . . $ 35 1/4- 38 1/4- 22- 19 1/8- 19-
31 32 1/2 19 7/8 15 7/8 13 1/4
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . $ 35 3/8- 43 7/8- 26 1/2- 20 7/8- 14 1/8-
30 1/2 34 3/4 20 5/8 16 1/2 10 3/8
Fourth quarter. . . . . . . . . . . . . . . . . . . . . . . . . $ 37 3/8- 47 3/8- 29 7/8- 21 1/8- 17 5/8-
31 3/4 37 1/2 25 1/8 17 1/8 12 3/8
Book value per share . . . . . . . . . . . . . . . . . . . . . . $ 15.95 14.37 12.95 11.13 10.88
(1) On August 31, 1993, the Company distributed a three-for-two stock split in
the form of a stock dividend. Accordingly, in the above table and throughout
this report, for all prior fiscal years and interim periods, share and per
share information, except for common stock outstanding in the Consolidated
Statement of Stockholders' Equity, has been restated to give effect to the
stock split.
(2) In fiscal 1994, dividends per share were restated to $0.13 in the first
quarter and then increased to $0.17 for the last three quarters.
</TABLE>
Management Discussion of Operations and Financial Condition
Operations
Record revenues of $2.3 billion were recorded for the fiscal year ended March
31, 1995, an increase of $530.0 million compared to fiscal 1994. The Company
experienced increases in demand in all six major business segments, with the
Railcars segment contributing the most significant increase. Railcars, the
Company's largest segment, enjoyed the benefit of a better market for its
railcars and railcar related products.
The Construction Products segment's revenues continue to be favorably affected
by additional business acquisitions of certain concrete operations. (See
Business Acquisitions in the Notes to Consolidated Financial Statements). The
Marine Products, Containers and Metal Components segments experienced
expanding markets. Total operating profit increased from $116.6 million in
fiscal 1994 to $157.5 million in fiscal 1995 due primarily to higher operating
operating profit recorded in the Railcars, Marine Products, Metal Components
and Leasing segments, partially offset by slightly lower operating profit
recorded in the Containers segment. A valuation reserve was established for
approximately $8.0 million for certain real property which was determined to
be in excess of that required for future business operations.
Expanding on a trend which began in fiscal 1993, production and deliveries in
the Railcars segment again increased in fiscal 1995. Operating profit as a
percentage of revenues increased in fiscal 1995 compared to the previous
fiscal year as greater efficiencies were achieved as a result of ongoing
participation in quality assurance programs established in previous years.
Trinity continues to be active in the railcar market with a variety of car
types including coal, grain, plastic pellet, cement, intermodal and a variety
of tank railcars. Increased revenues and operating profit in fiscal 1995 are
primarily the result of replacement demand and fundamental economic expansion
of railroad traffic. This demand is expected to continue as railcars on
order at the end of the fiscal year exceeded those of the prior fiscal year.
The Company anticipates higher levels of production for the coming fiscal year.
In the Marine Products segment, demand for the segment's products, marine
vessels and barges, continues to increase. The inland river hopper barge
product line is generally benefitted by large grain crops. Orders on hand for
this segment are increasing as the replacement market grows. The Marine
Products segment is further positioning itself for future growth and
contribution to operating profit through strategic business acquisitions. (See
Business Acquisitions in the Notes to Consolidated Financial Statements).
The Construction Products segment has expanded its highway guardrail and road
barrier products and expanded the concrete and aggregate business.
Acquisitions completed in fiscal 1995 were made at various times during the
year. The inclusion of a full year of these acquisitions in future years is
expected to show favorable results in year to year comparisons.
Continuing improvement in the chemical and petroleum industries related to
the Clean Air Act and new housing starts is leading to improvement in the
Containers segment, particularly the market for LPG tanks. Competitive
markets for the Company's large pressure vessels are partially offsetting
segment operating profit. Industry demand for products in the Metal
Components segment has risen in the current fiscal year. General improvement
in the economy has generated some expansion in the industries served by this
segment. Leasing segment's operating profit was higher in fiscal 1995 due
primarily to additions of new freight and tank railcars to the fleet, and the
sale of selected car types coupled with the divestiture of
its inventory of river hopper barges previously held for lease.
Record revenues of $1.78 billion were recorded by the Company for the fiscal
year ended March 31, 1994, an increase of $244.9 million compared to fiscal
1993. Significant increases in demand in the Railcars, Construction
Products, Containers, and Leasing segments lead to the record year. Revenues
recorded by the Metal Components segment remained comparable to the previous
fiscal year. Revenues recorded declined when compared to Marine Products
previous fiscal year's record revenues. Demand for railcars has increased
causing upward adjustments to production rates to accommodate increases in
business. The Construction Products segment's revenues were favorably
affected by additional business acquisitions of certain concrete operations.
(See Business Acquisitions in the Notes to Consolidated Financial
Statements). The Containers and Metal Components segments experienced
expanding markets. Total operating profit increased from $74.6 million in
fiscal 1993 to $116.6 million in fiscal 1994 due primarily to higher operating
profit recorded in the Railcars, Construction Products, and Leasing segments,
partially offset by slightly lower operating profit recorded in the Marine
Products, Containers and Metal Components segments.
Continuing a trend which accelerated in fiscal 1993, production and deliveries
in the Railcars segment increased in fiscal 1994. Operating profit as a
percentage of revenues increased in fiscal 1994 compared to the previous
fiscal year as greater efficiencies were achieved as a result of ongoing
participation in quality assurance programs established in previous years.
Increased revenues and operating profit in fiscal 1994 were primarily the
result of expanded demand attributed to a continuing railcar replacement
cycle, demand for new types of railcars as the transporting of certain
commodities across the country shifted from over-the-road trucking to rail, a
net increase in the amount of goods and products that are shipped by rail, and
the general improvement in the economy. In the Marine Products segment,
demand for the segment's products, marine vessels and barges, continued to be
strong and broad based. The decline in fiscal year 1994 results compared to
results from the previous fiscal year was due primarily to the record revenues
and operating profit recorded in the previous fiscal year from the completion
of a multi-vessel, quick production contract. The replacement market for
vessels and barges lead to expanded production. The Marine Products segment
further positioned itself for future growth and contribution to operating
profit through strategic business acquisitions. (See Business Acquisitions in
the Notes to Consolidated Financial Statements).
Construction Products segment's revenues and operating profit increased in
fiscal 1994 compared to the previous fiscal year. These results signify the
effect of the decision to emphasize infrastructure products, including highway
guardrail and safety barriers, and construction materials and aggregates.
Continued expansion of the ready mix concrete markets helped to boost the
segment's revenues and operating profit. General improvement in the chemical
and petroleum industries and new housing starts lead to improvement in the
Containers segment, particularly the market for LPG tanks. Competitive
markets for the Company's large pressure vessels partially offset segment
operating profit. Industry demand for products in the Metal Components
segment rose in fiscal year 1994. General improvement in the economy
generated some expansion in the industries served by this segment. Leasing
segment's operating profit was higher in fiscal 1994 due primarily to
additions of new freight and tank railcars to the fleet, sales of selected car
types previously for lease, and a slight reduction in overall repair and
maintenance expenses in the current fiscal year.
Selling, engineering and administrative expenses increased to $104.5 million
in fiscal 1995 from $94.2 million in fiscal 1994 due principally to
additional personnel expenses from fiscal 1995 business acquisitions and
increased Railcars segment business. Selling, engineering and administrative
expenses were up slightly in fiscal 1994 compared to fiscal 1993. Increases
were due to additional personnel from fiscal 1994 business acquisitions and
increased Railcars segment business, offset somewhat by the absence of
expenses present in the prior fiscal year related to the business acquisition
of Syro.
Interest expense of the Leasing Subsidiary decreased by $2.6
million in fiscal 1995 compared to fiscal 1994 due primarily to the reduction
of the equipment trust series long-term debt through scheduled debt payments
and disposition of certain assets. Interest expense of Leasing subsidiary
decreased by $4.4 million in fiscal 1994 compared to fiscal 1993 due primarily
to the conversion of Leasing Subsidiary debt to common stock of the Company in
the fourth quarter of fiscal 1993 (see Long-term Debt in the Notes to
Consolidated Financial Statements).
Retirement plans expense increased to $12.1 million in fiscal 1995 from $9.2
million in fiscal 1994. The increase is due primarily to increases in
personnel in fiscal 1995 business acquisitions. Retirement plans expense
decreased to $9.2 million in fiscal 1994 from $10.2 million in fiscal 1993.
The decrease is due primarily to the reduction of the actuarial accrual
related to a certain supplemental retirement benefit agreement, offset by
increases in personnel due to fiscal 1994 business acquisitions.
Net interest expense of $11.4 million in fiscal 1995 increased as compared to
$4.0 million in fiscal 1994 primarily due to the increase in the usage of
short-term debt for capital expenditures and to finance business
acquisitions. Net interest expense of $4.0 million in fiscal 1994 increased
compared to $3.3 million in fiscal 1993 primarily due to the increase in the
use of short-term debt to finance business acquisitions, offset by a decline
in long- term debt from regularly scheduled principal payments.
The provision for income taxes in fiscal 1995 expressed as a percent of income
before income taxes is a 39.6 percent rate as compared to a 40.2 percent rate
in fiscal 1994 and a 37.6 percent rate in fiscal 1993. The increase between
fiscal 1994 and 1993 is due principally to the increase in the statutory
federal income tax rate and the increase in the provision for state income
taxes.
In February, 1992, the Financial Accounting Standards Board issued SFAS No.
109, "Accounting for Income Taxes." The Company was required to adopt SFAS
No. 109 in fiscal 1994 and change from the deferred to the liability method of
computing income tax. The Company recognized the cumulative effect of the
change in method as of April 1, 1993 resulting in an increase to net income of
$7.9 million. (See Income Taxes in the Notes to the Consolidated Financial
Statements).
Liquidity and Financial Resources
During fiscal 1995, internally generated funds and short-term borrowing were
used to support capital expenditures and payments for business acquisitions.
Capital expenditures, excluding Leasing Subsidiary, for fiscal 1995 were $64.7
million. Capital expenditures projected for fiscal 1996 are approximately
$51.4 million. Payments for acquisitions in fiscal 1995, net of cash
acquired, totalled $63.7 million. Future operating requirements are expected
to be financed principally with net cash flows from operations. Internally
generated funds, short-term and long-term debt will continue to be used to
finance business acquisitions. Additions to TILC's railcar fleet are
anticipated to be financed through internally generated funds, the issuance of
equipment trust certificates, or similar debt instruments.
The percentages of long-term debt and stockholders' equity to total
capital (long-term debt and stockholders' equity) of $884.1 million (of which
Leasing Subsidiary's long-term debt is $205.2 million) were 27.5 percent (of
which Leasing Subsidiary's long-term debt is 23.2 percent of total capital)
and 72.5 percent, respectively.
Inflation
Changes in price levels did not significantly affect the Company's operations
in fiscal 1995, 1994 or 1993.
Consolidated Income Statement
(in millions except per share data)
Year Ended March 31
1995 1994 1993
Revenues. . . . . . . . . . . . . . . . . . . . $2,314.9 $1,784.9 $1,540.0
Operating costs:
Cost of revenues. . . . . . . . . . . . . . 2,019.7 1,541.2 1,333.7
Selling, engineering and administrative
expenses . . . . . . . . . . . . . . . . . . 104.5 94.2 93.4
Interest expense of Leasing Subsidiary. . . 21.1 23.7 28.1
Retirement plans expense. . . . . . . . . . . 12.1 9.2 10.2
2,157.4 1,668.3 1,465.4
Operating profit. . . . . . . . . . . . . . . . 157.5 116.6 74.6
Other (income) expenses:
Interest income . . . . . . . . . . . . . . (0.8) (1.6) (1.2)
Interest expense - excluding Leasing
Subsidiary . . . . . . . . . . . . . . . . . 12.2 5.6 4.5
Other, net. . . . . . . . . . . . . . . . . . (1.4) (1.6) (0.8)
10.0 2.4 2.5
Income before income taxes and cumulative effect
of change in accounting for income taxes . . . 147.5 114.2 72.1
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . 87.6 45.1 25.7
Deferred. . . . . . . . . . . . . . . . . . (29.2) (1.3) 1.4
Effect of statutory rate increase . . . . . . - 2.1 -
58.4 45.9 27.1
Income before cumulative effect of change in
accounting for income taxes. . . . . . . . . . 89.1 68.3 45.0
Cumulative effect as of April 1, 1993 of change
in accounting for income taxes . . . . . . . . - 7.9 -
Net income. . . . . . . . . . . . . . . . . . . $ 89.1 $ 76.2 $ 45.0
Income per common and common equivalent share
before cumulative effect of change in
accounting for income taxes. . . . . . . . . . $ 2.20 $ 1.69 $ 1.27
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . - 0.20 -
Net income per common and common equivalent
share. . . . . . . . . . . . . . . . . . . . . $ 2.20 $ 1.89 $ 1.27
Weighted average number of common and common
equivalent shares outstanding . . . . . . . . 40.5 40.3 35.4
See accompanying notes to consolidated financial statements.
Consolidated Balance Sheet
March 31
(in millions except per share data) 1995 1994
Assets
Cash and cash equivalents . . . . . . . . . . . . . $ 15.3 $ 8.7
Receivables . . . . . . . . . . . . . . . . . . . . 270.3 264.9
Inventories . . . . . . . . . . . . . . . . . . . . 395.0 328.8
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . . . . 701.4 590.8
Leasing Subsidiary. . . . . . . . . . . . . . . 387.3 479.2
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . (306.2) (263.0)
Leasing Subsidiary. . . . . . . . . . . . . . . (95.4) (139.9)
Other assets. . . . . . . . . . . . . . . . . . . . 52.3 37.3
$1,420.0 $1,306.8
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . . . . . $ 220.0 $ 192.0
Accounts payable and accrued liabilities. . . . . . 245.5 161.6
Billings in excess of cost and related earnings . . 12.0 12.6
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . . . . 37.7 41.9
Leasing Subsidiary. . . . . . . . . . . . . . . 205.2 236.0
Deferred income taxes . . . . . . . . . . . . . . . 44.9 73.9
Other liabilities . . . . . . . . . . . . . . . . . 13.5 18.3
778.8 736.3
Stockholders' equity: (shares in millions)
Common stock - par value $1 per share;
authorized - 100.0 shares; shares issued and
outstanding in 1995 - 40.2; in 1994 - 39.7 . . 40.2 39.7
Capital in excess of par value. . . . . . . . . 221.7 213.4
Retained earnings . . . . . . . . . . . . . . . 379.3 317.4
641.2 570.5
$1,420.0 $1,306.8
See accompanying notes to consolidated financial statements.
Consolidated Statement of Cash Flows
(in millions)
Year Ended March 31
1995 1994 1993
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . $ 89.1 $ 76.2 $ 45.0
Adjustments to reconcile net income to net cash
provided (required) by operating activities:
Depreciation:
Excluding Leasing Subsidiary . . . . . . . . . . 38.4 36.2 37.0
Leasing Subsidiary . . . . . . . . . . . . . . . 20.2 20.6 22.3
Deferred provision (benefit) for income taxes . . (29.2) (1.3) 1.4
(Gain) loss on sale of property, plant
and equipment. . . . . . . . . . . . . . . . . . (0.7) (0.2) 1.7
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . . - (7.9) -
Effect of statutory tax rate increase . . . . . . - 2.1 -
Other . . . . . . . . . . . . . . . . . . . . . . (6.6) 0.1 1.1
Change in assets and liabilities:
(Increase) decrease in receivables . . . . . . . 4.6 (58.1) (7.0)
(Increase) decrease in inventories . . . . . . . (56.1) (110.9) 9.9
(Increase) decrease in other assets. . . . . . . (11.3) 0.4 (2.2)
Increase in accounts payable and accrued
liabilities . . . . . . . . . . . . . . . . . . 71.4 14.0 26.7
Decrease in billings in excess of cost and
related earnings . . . . . . . . . . . . . . . . (0.6) (19.4) (17.5)
Increase (decrease) in other liabilities . . . . (4.8) 2.6 (1.0)
Total adjustments. . . . . . . . . . . . . . . 25.3 (121.8) 72.4
Net cash provided (required) by
operating activities . . . . . . . . . . . . . . 114.4 (45.6) 117.4
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 83.3 29.3 5.5
Capital expenditures:
Excluding Leasing Subsidiary . . . . . . . . . . . (64.7) (45.2) (36.2)
Leasing Subsidiary . . . . . . . . . . . . . . . . (28.7) (37.6) (74.5)
Payment for purchase of acquisitions,
net of cash acquired . . . . . . . . . . . . . . . (63.7) (36.2) (20.6)
Cash of acquired subsidiary . . . . . . . . . . . . 2.4 0.5 0.7
Net cash required by investing activities . . . . (71.4) (89.2) (125.1)
Cash flows from financing activities:
Issuance of common stock. . . . . . . . . . . . . . 0.9 8.9 5.9
Net borrowings under short-term debt. . . . . . . . 28.0 177.0 (5.0)
Proceeds from issuance of long-term debt. . . . . . - 20.0 60.0
Payments to retire long-term debt . . . . . . . . . (38.1) (45.9) (34.0)
Dividends paid. . . . . . . . . . . . . . . . . . . (27.2) (24.0) (17.8)
Net cash provided (required) by
financing activities . . . . . . . . . . . . . . (36.4) 136.0 9.1
Net increase (decrease) in cash and cash equivalents. 6.6 1.2 1.4
Cash and cash equivalents at beginning of period. . . 8.7 7.5 6.1
Cash and cash equivalents at end of period. . . . . . $ 15.3 $ 8.7 $ 7.5
Excluding Leasing Subsidiary, interest paid in fiscal 1995, 1994, and 1993 was
$11.4, $5.0, and $4.0, respectively. Leasing Subsidiary's interest paid in
fiscal 1995, 1994, and 1993 was $21.6, $23.8, and $28.4, respectively.
See accompanying notes to consolidated financial statements.
<TABLE>
Consolidated Statement of Stockholders' Equity
(in millions except share and per share data)
<CAPTION>
Common Capital
Common Stock in
Shares $1.00 Excess Total
(100,000,000 Par of Par Retained Stockholders'
Authorized) Value Value Earnings Equity
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1992 . . . . . 22,738,918 $22.7 $115.8 $240.5 $379.0
Conversion of debt. . . . . . . . 2,888,969 2.9 89.5 - 92.4
Other . . . . . . . . . . . . . . 448,662 0.5 9.2 - 9.7
Net income. . . . . . . . . . . . - - - 45.0 45.0
Cash dividends ($0.53 per share). - - - (18.8) (18.8)
Balance at March 31, 1993 . . . . . 26,076,549 26.1 214.5 266.7 507.3
Three-for-two stock split . . . . 13,158,164 13.2 (13.2) - -
Other . . . . . . . . . . . . . . 476,985 0.4 12.1 - 12.5
Net income. . . . . . . . . . . . - - - 76.2 76.2
Cash dividends ($0.64 per share). - - - (25.5) (25.5)
Balance at March 31, 1994 . . . . . 39,711,698 39.7 213.4 317.4 570.5
Other . . . . . . . . . . . . . . 508,996 0.5 8.3 - 8.8
Net income. . . . . . . . . . . . - - - 89.1 89.1
Cash dividends ($0.68 per share). - - - (27.2) (27.2)
Balance at March 31, 1995 . . . . . 40,220,694 $40.2 $221.7 $379.3 $641.2
The Company has authorized and unissued 1,500,000 shares of no par value voting preferred stock.
See accompanying notes to consolidated financial statements.
</TABLE>
Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies
The financial statements of Trinity Industries, Inc. and its consolidated
subsidiaries ("Trinity" or the "Company") include the accounts of all
significant majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
The Company accounts for its wholly-owned Leasing Subsidiary in accordance
with Statement of Financial Accounting Standards No. 94, "Consolidation of
All Majority-Owned Subsidiaries," which requires the consolidation of all
majority-owned subsidiaries, unless control is temporary or does not reside
with the majority owner. The Company's financial statements include the
consolidation of the accounts of Trinity Industries Leasing Company
("TILC"). TILC is sometimes referred to as the "Leasing Company" or
"Leasing Subsidiary".
For purposes of the Consolidated Statement of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents. Financial instruments which
potentially subject the Company to concentrations of credit risk are
primarily cash investments and receivables. The Company places its cash
investments in investment grade, short-term debt instruments and limits the
amount of credit exposure to any one commercial issuer. Concentrations of
credit risk with respect to receivables are limited due to the large number
of customers in the Company's customer base, and their dispersion across
different industries and geographic areas. The Company maintains an
allowance for losses based upon the expected collectibility of all
receivables.
For financial accounting, profits on long-term contracts are recorded on
the percentage-of-completion method. Allocation of profits to various
periods is based on costs incurred, units delivered, or other appropriate
measures. Provision is made for losses when they become known.
TILC enters into lease contracts with third parties with terms generally
ranging between one and fifteen years, wherein certain equipment
manufactured by Trinity is leased for a specified type of service over the
term of the contract. TILC accounts for leases principally by the
operating method.
Inventories and investments are valued at the lower of cost or market.
Inventory cost is determined principally on the specific identification
method. Market is replacement cost or net realizable value.
Depreciation and amortization are generally computed by the straight-line
method on the estimated useful lives of the assets. The costs of ordinary
maintenance and repair are charged to expense, while renewals and major
replacements are capitalized.
Net income per common and common equivalent share are based on the weighted
average shares outstanding plus the assumed exercise of dilutive stock
options (less the number of treasury shares assumed to be purchased from
the proceeds using the average market price of Trinity's common stock).
For the years ended March 31, 1995, 1994 and 1993, there was no convertible
debt outstanding that would require the calculation of fully diluted
earnings per share. In fiscal 1993, the convertible debt in the form of 8
percent convertible subordinated debentures and 6.75 percent convertible
debentures were converted.
Certain reclassifications have been made to prior year statements to
conform to the current year presentation.
Segment Information
The Company manufactures and sells or leases a variety of metal products
consisting principally of (1) freight railcars, principally tank cars and
hopper cars ("Railcars"); (2) boats and barges for ocean and inland waterway
service ("Marine Products"); (3) construction products such as highway guard-
rail, beams, girders, and columns used in construction of highway and railway
bridges, power plants, mills, etc., passenger loading bridges and conveyor
systems, and ready mix concrete and aggregates ("Construction Products");
(4) pressure and non-pressure containers for the storage and transportation
of liquefied gases, other liquid, and dry products ("Containers"); (5) weld
fittings (tees, elbows, reducers, caps, flanges, etc.) used in pressure piping
systems and container heads (the ends of pressure and non-pressure containers)
for use internally and by other manufacturers of containers ("Metal
Components"); and (6) railcar and barge leasing to various industries
("Leasing").
Financial information for these segments is summarized in the following table.
The Company operates principally in the continental United States. Interseg-
mental sales are shown at market prices.
Corporate operating profit elimination consists principally of the
administrative overhead of the Company.
Corporate assets consist primarily of cash and cash equivalents, other assets,
notes receivable, land held for investment, and certain property, plant and
equipment.
The Railcars and Leasing segments include revenues from one customer which
accounted for 12.5 percent of consolidated revenues in fiscal 1995. The
Railcars segment include revenues from one customer which accounted for 11.6
percent of consolidated revenues in fiscal 1994.
In the Segments of Business table below, the caption 'Additions (net) to
property, plant and equipment' does not include Business Acquisitions.
<TABLE>
Segments of Business
<CAPTION>
Eliminations
Construc- Metal & Cor- Consol-
Segments of Business Rail- Marine tion Con- Com- porate idated
(in millions) cars Products Products tainers ponents Leasing Items Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended March 31, 1995
Total revenues:
Trade. . . . . . . . . . . . . $1,157.3 369.7 355.5 169.7 105.5 156.9 0.3 2,314.9
Intersegment . . . . . . . . . 29.4 - - - 3.9 - (33.3) -
Total . . . . . . . . . . . . $1,186.7 369.7 355.5 169.7 109.4 156.9 (33.0) 2,314.9
Operating profit (loss). . . . . $ 88.5 30.3 35.6 9.7 14.9 23.6 (45.1) 157.5
Identifiable assets . . . . . . $ 400.9 247.7 228.7 83.1 53.8 295.4 110.4 1,420.0
Depreciation . . . . . . . . . . $ 5.2 4.9 14.6 3.7 3.5 20.2 6.5 58.6
Additions (net) to property,
plant and equipment . . . . . . $ 19.0 7.8 12.9 3.8 3.1 (27.2) 11.3 30.7
Year ended March 31, 1994
Total revenues:
Trade. . . . . . . . . . . . . $ 730.6 360.7 333.1 155.6 99.7 104.6 0.6 1,784.9
Intersegment . . . . . . . . . 38.5 - - - 2.8 - (41.3) -
Total . . . . . . . . . . . . $ 769.1 360.7 333.1 155.6 102.5 104.6 (40.7) 1,784.9
Operating profit (loss). . . . . $ 53.2 28.9 35.6 9.8 11.7 15.3 (37.9) 116.6
Identifiable assets . . . . . . $ 350.9 201.4 185.8 81.5 47.0 344.3 95.9 1,306.8
Depreciation . . . . . . . . . . $ 7.9 7.8 10.0 2.0 3.2 20.6 5.3 56.8
Additions (net) to property,
plant and equipment . . . . . . $ 2.4 7.8 12.2 2.4 1.4 14.8 10.8 51.8
Year ended March 31, 1993
Total revenues:
Trade. . . . . . . . . . . . . $ 535.5 403.2 282.7 141.1 96.8 79.6 1.1 1,540.0
Intersegment . . . . . . . . . 75.5 - - - 2.9 - (78.4) -
Total . . . . . . . . . . . . $ 611.0 403.2 282.7 141.1 99.7 79.6 (77.3) 1,540.0
Operating profit (loss). . . . . $ 26.9 30.8 22.6 15.0 13.8 7.5 (42.0) 74.6
Identifiable assets. . . . . . . $227.0 137.3 156.8 71.3 50.5 350.5 95.7 1,089.1
Depreciation . . . . . . . . . . $ 12.5 6.4 6.3 2.9 3.2 22.3 5.7 59.3
Additions (net) to property,plant
and equipment . . . . . . . . . $ 2.7 13.6 6.1 4.1 1.9 71.3 3.8 103.5
</TABLE>
Receivables
(in millions)
March 31
1995 1994
Accounts receivable:
Excluding Leasing Subsidiary. . . . . $254.8 $248.4
Leasing Subsidiary. . . . . . . . . . 3.5 5.0
258.3 253.4
Contract receivables not yet billed. . 12.8 12.5
271.1 265.9
Allowance for doubtful accounts. . . . ( 0.8) ( 1.0)
$270.3 $264.9
Inventories
(in millions)
March 31
1995 1994
Finished goods . . . . . . . . . . . . $ 35.0 $ 28.2
Work in process. . . . . . . . . . . . 42.0 41.9
Cost related to long-term
contracts, net of progress billings
of $3.2 and $2.1 at March 31, 1995
and 1994, respectively. . . . . . . . 110.6 77.1
Raw materials and supplies . . . . . . 207.4 181.6
$395.0 $328.8
Property, Plant and Equipment
(in millions)
March 31
1995 1994
Excluding Leasing Subsidiary:
Land . . . . . . . . . . . . . . . . . . . . . . . . $ 38.9 $ 29.5
Buildings and improvements . . . . . . . . . . . . . 195.0 179.3
Machinery. . . . . . . . . . . . . . . . . . . . . . 430.6 361.0
Construction in progress . . . . . . . . . . . . . . 36.9 21.0
701.4 590.8
Leasing Subsidiary:
Equipment on lease (predominately long-term) . . . . 387.3 479.2
$1,088.7 $1,070.0
Business Acquisitions
The Company made certain business acquisitions during fiscal 1995, 1994 and
1993. All but one have been accounted for by the purchase method. The
acquisition of Syro Steel Company ("Syro") in fiscal 1993 has been
accounted for by the pooling of interests method. Except for Syro, the
operations of these companies have been included in the consolidated
financial statements from the effective dates of the acquisitions.
In fiscal 1993, except for Syro, the businesses acquired include: (i)
certain assets of TARMAC Texas, Inc., Redland Stone Products, Inc., and
Cle-Tex Materials, Inc. for cash and 100 percent of the common stock of
Cowboy Concrete Corporation for 189,332 shares of Trinity common stock.
These businesses are ready-mix concrete producers; (ii) certain property,
plant and equipment of Eastern Shipyards, Inc. for cash. These assets are
utilized in the manufacture of marine products; and (iii) certain inventory
and property, plant and equipment of Custom Vessel Corporation to be used
in the manufacture of custom container vessels for cash and 20,000 shares
of Trinity common stock. The aggregate purchase price of these
acquisitions was approximately $26.8 million. There was no goodwill in the
acquisitions.
Also in fiscal 1993, the Company acquired, by subsidiary merger, all of the
outstanding shares of common stock of Syro Steel Company in exchange for
1,621,448 shares of Trinity's common stock. Syro manufactures and
distributes a wide variety of fabricated steel products, including highway
safety barrier systems, piling products, roll formed products, corrugated
plate products, steel service center operations, and other products. The
pooling of interests accounting method was used to account for the merger
and, accordingly, the financial statements for all periods prior to the
date of the merger were restated to include the accounts of Syro for all
periods presented. Syro's previously reported financial results have been
conformed to the fiscal year end of the Company.
In fiscal 1994, the businesses acquired include: (i) certain assets of
Caruthersville Shipyard Inc. and Xenium Fiberglass Corporation for cash.
These assets are utilized in the manufacture of marine products;(ii)
certain assets of A & M Operating Company, Inc. for cash. These assets are
used in the manufacture of railcars; (iii) certain assets of Redland Stone
Products Company, STCC, Inc., Bluebonnet Paving, Inc., Triple S Crushed
Stone Company, Waco Sand and Gravel Company, and Beazer West, Inc. for cash
and 100 percent of the common stock of Myre Construction Company for
103,494 shares of Trinity common stock. These businesses are ready-mix
concrete producers; and (iv) 100 percent of the common stock of Platzer
Shipyard, Inc. for cash and 67,139 shares of Trinity common stock. This
business manufactures and repairs barges. The aggregate purchase price of
these acquisitions was approximately $56.0 million. There was no goodwill
in the acquisitions.
In fiscal 1995, the businesses and properties acquired include:
(i) 100 percent of the common stock of Concrete Pipe Products Company, Inc.
and Midland Concrete, Incorporated for 149,001 shares and 35,033 shares of
Trinity common stock, respectively, certain assets of Gemini Industries,
Inc., Ratliff Ready-Mix, Inc., and Diamond Ready-Mix for cash, and certain
properties acquired for mineral extraction. These companies and assets are
utilized in the ready-mix concrete and aggregates business; (ii) certain
assets of Port Allen Marine Services, Inc., the Syntechnics Division of The
Alpha Corporation of Tennessee, and New NABRICO Corporation for cash and
100 percent of the common stock of Gulf Coast Fabrication, Inc. for 250,000
shares of Trinity common stock. These businesses produce and repair barges
and manufacture other marine products; (iii) certain assets of Flo-Bend,
Inc. for cash. These assets are utilized in the manufacture of metal
components; and (iv) certain assets of the Ready-Mix Concrete Operations
and Aggregate Operations of LaFarge Corporation for cash. These operations
are utilized in the ready-mix concrete and aggregates business. The
aggregate purchase price of these acquisitions was approximately $86.7
million. There was no goodwill in the acquisitions. Contribution of these
acquisitions to revenues and operating profit is not material.
Subsequent to year end, the Company acquired one hundred percent of the
capital stock of the holding company which owns Groupo TATSA S. A. de C. V.
in exchange for approximately 1.2 million share of Trinity common stock.
Stock Options
The Company has a Stock Option and Incentive Plan (the "Plan") which
provides that incentive or non-qualified stock options for a maximum of
1,500,000 shares of common stock may be granted to directors, officers and
key employees. Incentive options may be granted over a period not to
exceed ten years at a price not less than fair market value on the date of
grant. The Plan provides that, to the extent options granted under this
Plan or any prior stock option plan are forfeited, expire or cancelled,
they may again be granted pursuant to the provisions of this Plan. The
Plan provides that if shares already owned by the optionee are surrendered
as full or partial payment of the exercise price of an option, a new option
(the "Reload Option") may be granted equal to the number of shares
surrendered. The exercise price of Reload Options shall be the fair market
value on the effective date of the grant.
<TABLE>
Stock Options
Non- Total Price
Incentive Incentive Exercise Range
Shares Shares Value Per Share
<S> <C> <C> <C> <C>
Outstanding at March 31, 1992 . 705,507 1,124,495 $31,018,972 $ 6.25-$22.50
Granted . . . . . . . . . . . . - - - - -
Cancelled . . . . . . . . . . . (28,574) (2,310) (568,681) $ 6.25-$22.50
Exercised . . . . . . . . . . . (125,703) (251,534) (4,811,138) $ 6.25-$22.50
Outstanding at March 31, 1993 . 551,230 870,651 25,639,153 $ 9.16-$22.50
Granted . . . . . . . . . . . . - 975,000 26,500,028 $26.67-$30.00
Cancelled . . . . . . . . . . . (2,265) (750) (50,165) $11.33-$22.50
Exercised . . . . . . . . . . . (153,429) (264,430) (6,784,597) $ 9.16-$22.50
Outstanding at March 31, 1994 . 395,536 1,580,471 45,304,419 $ 9.16-$30.00
Granted . . . . . . . . . . . . 6,100 68,887 2,710,797 $31.25-$39.25
Cancelled . . . . . . . . . . . (4,080) (6,000) (225,290) $11.58-$26.67
Exercised . . . . . . . . . . . (31,731) (80,539) (2,561,137) $ 9.16-$26.67
Outstanding at March 31, 1995 . 365,825 1,562,819 $45,228,789 $11.58-$39.25
</TABLE>
At March 31, 1995, there were 1,246,131 shares (1,311,038 at March 31,
1994) reserved for future options, and 843,506 stock options were
exercisable (620,221 at March 31, 1994).
Stockholder's Rights Plan
The Company has adopted a Stockholder's Rights Plan. Effective April 27,
1989, the Company paid a dividend distribution of one purchase right for each
outstanding share of the Company's $1.00 par value common stock. Each right
entitles the stockholder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock at an exercise price of
one hundred and seventy-five dollars. The rights are not exercisable or
detachable from the common stock until ten business days after a person
acquires beneficial ownership of twenty percent or more of the Company's
common stock or if a person or group commences a tender or exchange offer upon
consummation of which that person or group would beneficially own twenty
percent or more of the common stock.
If any person becomes a beneficial owner of twenty percent or more of the
Company's common stock other than pursuant to an offer, as defined, for all
shares determined by certain directors to be fair to the stockholders and
otherwise in the best interests of both the Company and its stockholders
(other than by reason of share purchases by the Company), each right not owned
by that person or related parties enables its holder to purchase, at the
right's then current exercise price, shares of the Company's common stock
having a calculated value of twice the right's exercise price.
The rights, which are subject to adjustment, may be redeemed by the Company at
a price of one cent per right at any time prior to their expiration on April
27, 1999 or the point at which they become exercisable.
Long-term Debt
(in millions except per share data)
March 31
1995 1994
Excluding Leasing Subsidiary:
6.3-11.375 percent industrial development revenue bonds
payable in varying amounts through 2005 . . . . . . . . $ 4.6 $ 7.1
4.5-10.5 percent promissory notes, generally payable
annually through 2001 . . . . . . . . . . . . . . . . . 33.1 34.8
37.7 41.9
Leasing Subsidiary:
6.96-15.5 percent equipment trust certificates to
institutional investors generally payable in semi-
annual installments of varying amounts through 2003 . . 193.6 223.5
11.3 percent notes payable monthly through 2003. . . . . 11.6 12.5
205.2 236.0
$242.9 $277.9
Long-term debt excluding the Leasing Subsidiary:
The Company is required to maintain certain financial ratios, as
defined. Principal payments due during the next five years are: 1996 - $7.1;
1997 - $0.8; 1998 - $0.2; 1999 - $0.1; and 2000 - $0.3.
Long-term debt of Leasing Subsidiary:
The trustees of the equipment trusts have been assigned title to
railcars with a cost of $382.4 at March 31, 1995 for the life of the
respective equipment trusts. Leases relating to such railcars financed by
equipment trust certificates have been assigned as collateral. Trinity is
required to pay fees to TILC to maintain net earnings, as defined, at 150
percent of fixed charges, as defined. Pursuant to this agreement, $0, $0,
and $1.4 have been paid by Trinity to TILC in fiscal 1995, 1994, and 1993,
respectively. Trinity is also required to pay to TILC the current tax benefit
which results from the inclusion of TILC in Trinity's federal income tax
return. These amounts are eliminated for consolidated financial presentation
of Trinity.
TILC is required to maintain certain financial ratios, as defined.
Principal payments due during the next five years are: 1996 - $29.5; 1997 -
$30.4; 1998 - $26.3; 1999 - $26.1; and 2000 - $23.9.
The fair value of non-traded, fixed rate outstanding debt, estimated using
discounted cash flow analysis, approximates its carrying value.
In fiscal 1993, 8 percent convertible subordinated debentures and 6.75 percent
convertible debentures were converted. Assuming this convertible debt had
converted as of April 1, 1992, supplementary earnings per share for fiscal
1993 would have been $1.24.
Condensed Combined Financial Information of Consolidated Leasing Subsidiary
March 31
(in millions) 1995 1994
Assets
Total assets (principally railcars and barges). . . . . . $471.9 $495.1
Liabilities and Stockholder's Equity
Total liabilities (principally long-term debt). . . . . . $296.3 $340.3
Stockholder's equity (including retained earnings of
$156.4 and $135.6 in 1995 and 1994, respectively) . . . 175.6 154.8
$471.9 $495.1
Year Ended March 31
1995 1994 1993
Income
Revenues . . . . . . . . . . . . . . . . . . . . . $156.9 $104.6 $79.6
Income before income taxes and cumulative effect
of change in accounting for income taxes. . . . . $ 32.0 $ 20.9 $17.8
Provision for income taxes . . . . . . . . . . . . 11.2 9.9 6.1
Income before cumulative effect of change in
accounting for income taxes . . . . . . . . . . . 20.8 11.0 11.7
Cumulative effect as of April 1, 1993 of change in
method of accounting for income taxes . . . . . . - 8.1 -
Net income . . . . . . . . . . . . . . . . . . . . $ 20.8 $ 19.1 $11.7
Future minimum rental revenues on leases in each fiscal year are approximately
$56.2 in 1996, $49.0 in 1997, $41.1 in 1998, $33.9 in 1999, $28.5 in 2000, and
$86.5 thereafter.
Consolidating Financial Statements of Trinity Industries, Inc.
The following financial statements present the consolidating income
statement and consolidating balance sheet of Trinity. Certain accounts have
been reclassified to correspond to consolidated financial statement
presentation of Trinity. Presentation of accounts does not conform to
separate entity financial presentation. These consolidating financial
statements are presented to provide additional analysis of, and should be read
in conjunction with, the consolidated financial statements of Trinity.
Consolidating Income Statement Leasing
Subsid- Elimi-
Year Ended March 31, 1995 (in millions) Trinity iary nations Total
Revenues. . . . . . . . . . . . . . . . . $2,187.4 $156.9 $ (29.4) $2,314.9
Operating costs:
Cost of revenues . . . . . . . . . . . . 1,937.1 112.0 (29.4) 2,019.7
Selling, engineering and administrative
expenses. . . . . . . . . . . . . . . . 104.3 0.2 - 104.5
Interest expense of Leasing Subsidiary . - 21.1 - 21.1
Retirement plans expense . . . . . . . . 12.1 - - 12.1
Equity in income of Leasing Subsidiary
before income taxes . . . . . . . . . . (32.0) - 32.0 -
2,021.5 133.3 2.6 2,157.4
Operating profit. . . . . . . . . . . . . 165.9 23.6 (32.0) 157.5
Other (income) expenses:
Interest income. . . . . . . . . . . . . (0.7) (0.1) - (0.8)
Interest expense - excluding Leasing
Subsidiaries. . . . . . . . . . . . . . 20.3 (8.1) - 12.2
Other, net . . . . . . . . . . . . . . . (1.2) (0.2) - (1.4)
18.4 (8.4) - 10.0
Income before income taxes. . . . . . . . 147.5 32.0 (32.0) 147.5
Provision (benefit) for income taxes:
Current. . . . . . . . . . . . . . . . . 87.6 28.7 (28.7) 87.6
Deferred . . . . . . . . . . . . . . . . (29.2) (17.5) 17.5 (29.2)
58.4 11.2 (11.2) 58.4
Net income . . . . . . . .. . . . . . . . $ 89.1 $ 20.8 $(20.8) $ 89.1
Consolidating Balance Sheet
Leasing
Subsid- Elimi-
March 31, 1995 (in millions) Trinity iary nations Total
Assets
Cash and cash equivalents. . . . . . . . . $ 15.1 $ 0.2 $ - $ 15.3
Receivables. . . . . . . . . . . . . . . . 266.8 3.5 - 270.3
Inventories. . . . . . . . . . . . . . . . 395.0 - - 395.0
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . 701.4 - - 701.4
Leasing Subsidiary. . . . . . . . . . . . - 431.1 (43.8) 387.3
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . (306.2) - - (306.2)
Leasing Subsidiary. . . . . . . . . . . . - (95.4) - (95.4)
Note receivable from parent. . . . . . . . - 129.9 (129.9) -
Investment in Leasing Subsidiary . . . . . 175.6 - (175.6) -
Other assets . . . . . . . . . . . . . . . 88.9 2.6 (39.2) 52.3
$1,336.6 $471.9 $(388.5)$1,420.0
Liabilities and Stockholders' Equity
Short-term debt. . . . . . . . . . . . . . $ 220.0 $ - $ - $ 220.0
Accounts payable and accrued liabilities . 232.7 12.8 - 245.5
Billings in excess of cost and
related earnings. . . . . . . . . . . . . 12.0 - - 12.0
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . 167.6 - (129.9) 37.7
Leasing Subsidiary. . . . . . . . . . . . - 205.2 - 205.2
Deferred income taxes. . . . . . . . . . . 5.8 78.3 (39.2) 44.9
Deferred income. . . . . . . . . . . . . . 46.7 - (46.7) -
Other liabilities. . . . . . . . . . . . . 10.6 - 2.9 13.5
Stockholders' equity . . . . . . . . . . . 641.2 175.6 (175.6) 641.2
$1,336.6 $471.9 $(388.5)$1,420.0
Income Taxes
(in millions except per share data)
Effective April 1, 1993 the Company 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 Company has elected not to restate the
financial statements of any prior period. The cumulative effect of applying
the change in accounting method is a decrease in the Company's deferred tax
liability and a nonrecurring credit of $7.9 or $0.20 per share.
The provision for federal income taxes is determined on a consolidated return
basis. The Company and the Leasing Subsidiary file a consolidated federal
income tax return. The significant components of the provision (benefit) for
income taxes follow to the right:
Year Ended March 31
1995 1994 1993
Current
Federal. . . $78.6 $42.5 $23.5
State. . . . 9.0 4.7 2.2
87.6 47.2 25.7
Deferred. . . . . (29.2) (1.3) 1.4
Total . . . . . . $58.4 $45.9 $27.1
Deferred income tax was provided in the financial statements for timing
differences between financial and taxable income. Components of the deferred
provision (benefit) for income taxes computed at the statutory rate for fiscal
1993 follow:
Year Ended
March 31
1993
Excess of tax depreciation over
financial depreciation................. $ 6.4
Profits on long-term contracts recorded
on the percentage of completion
method for financial purposes and
related items.......................... 0.4
Pensions and other benefits............. (5.2)
Accounts receivable and inventory
valuation.............................. (1.6)
Alternative minimum tax credit.......... 2.3
Other................................... (0.9)
Total deferred provision (benefit)...
for income taxes.................... $ 1.4
The components of deferred liabilities and assets at March 31, 1995 and 1994
follow:
Year Ended March 31
1995 1994
Deferred tax liabilities:
Excess of tax depreciation over
financial statement depreciation........ $ 84.5 $100.1
Total deferred tax liabilities.......... 84.5 100.1
Deferred tax assets:
Profits on long-term contracts recorded
on the percentage of completion
method for financial purposes
and related items....................... $ 0.3 $ 1.3
Pensions and other benefits............ 33.0 21.3
Accounts receivable, inventory, and other
asset valuation accounts................ 3.6 0.7
Other.................................... 2.7 2.9
Total deferred tax assets............... 39.6 26.2
Net deferred tax liabilities...... $ 44.9 $ 73.9
The provision for income taxes in fiscal 1995, 1994 and 1993 results in
effective tax rates different than the statutory rates. The
reconciliation between the effective and statutory rates follows:
Year Ended March 31
1995 1994 1993
Statutory rate.............. 35.0% 35.0% 34.0%
State taxes................. 4.0 2.7 2.0
Effect of 1% rate increase on
deferred taxes............ - 1.8 -
Other....................... 0.6 0.7 1.6
Effective tax rate.......... 39.6% 40.2% 37.6%
In fiscal 1995, 1994 and 1993 income taxes of $55.9, $44.7 and $22.8,
respectively, were paid.
Employee Benefit Plans
(in millions)
Pension plans are in effect which provide income and death benefits for
eligible employees. The Company's policy is to fund retirement costs accrued
to the extent such amounts are deductible for income tax purposes. Plan
assets include cash, short-term debt securities, and other investments.
Benefits are based on years of credited service and compensation.
Net periodic pension expense for fiscal 1995, 1994, and 1993 included the
following components:
Year Ended March 31
1995 1994 1993
Service cost-benefits earned during the period $ 7.6 $ 6.2 $ 8.2
Interest cost on projected benefit obligation. 7.0 6.3 5.2
Actual return on assets. . . . . . . . . . . . (6.6) (1.5) (4.6)
Net amortization and deferral. . . . . . . . . 0.4 (4.4) (0.6)
Accrual of profit sharing contribution . . . . 3.7 2.6 2.0
Net periodic pension expense . . . . . . . . . $ 12.1 $ 9.2 $ 10.2
Assumptions used for valuation of the projected
benefit obligation were: Year Ended March 31
1995 1994 1993
Discount rates . . . . . . . . . . . . . . . . 8.25% 8.25% 9%
Rates of increase in compensation levels . . . 5.25% 5.25% 6%
Expected long-term rate of return on assets. . 9% 9% 9%
Amounts recognized in the Company's Consolidated
Balance Sheet follow: March 31
1995 1994
Actuarial present value of benefit obligation:
Vested benefit obligation. . . . . . . . . . $ 56.5 $ 49.4
Accumulated benefit obligation . . . . . . . $ 69.9 $ 61.3
Projected benefit obligation . . . . . . . . . $ 88.7 $ 78.6
Plan assets at fair value. . . . . . . . . . . 75.8 63.1
Projected benefit obligation
in excess of plan assets. . . . . . . . . . . (12.9) (15.5)
Unrecognized net asset at April 1, 1985. . . . (1.9) (2.3)
Unrecognized net asset at January 1, 1986. . . (0.9) (1.0)
Unrecognized net loss at March 31. . . . . . . 13.1 12.9
Accrued pension expense. . . . . . . . . . . . $ (2.6) $ (5.9)
The Company has a contributory profit sharing plan for employees of the
Company and certain affiliates. Under the plan, eligible employees are allowed
to make voluntary pre-tax contributions. The Company's contribution to this
plan, as defined, is based on consolidated earnings and dividends.
Contingencies
In May, 1994, a jury sitting in the United States District Court for the
Southern District of New York returned a verdict against the company in an
action brought against Mosher by Morse-Diesel, Inc. for damages allegedly
caused in the construction of the Marriott Marquis Hotel in Times Square, New
York City, New York. Judgement against Trinity was entered in February, 1995
in the amount of approximately sixty million dollars including interest
accrued to that date. Appeal of the jury verdict is pending before the
Second Circuit Court of Appeals. Trinity has been advised by legal counsel
that it has substantial defenses and remedies available, and it is pursuing
all available avenues in the post-trial and appellate review process.
Trinity has not been involved in the fabrication of structural steel for
multi-story buildings since 1989.
While the ultimate liability in this matter is difficult to assess, it is
management's belief that the final outcome is not reasonably likely to have a
material adverse affect on the Company's consolidated financial position.
The Company is involved in various other claims and lawsuits incidental to its
business. In the opinion of management, these claims and suits in the
aggregate will not have a material adverse affect on the Company's
consolidated financial statements.
Report of Independent Auditors
The Board of Directors and Stockholders
Trinity Industries, Inc.
We have audited the accompanying consolidated balance sheets of
Trinity Industries, Inc. as of March 31, 1995 and 1994, and the
related consolidated statements of income, cash flows and
stockholders' equity for each of the three years in the period
ended March 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Trinity Industries, Inc. at March 31, 1995
and 1994, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended March
31, 1995, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Dallas, Texas
May 10, 1995
Supplemental Information
Supplementary Unaudited Quarterly Data First Second Third Fourth
(in millions except for per share data) Quarter Quarter Quarter Quarter Year
Year ended March 31, 1995:
Revenues . . . . . . . . . . . . . $ 544.3 555.5 576.9 638.2 2,314.9
Operating profit . . . . . . . . . $ 32.4 38.9 40.6 45.6 157.5
Net income . . . . . . . . . . . . $ 18.5 22.2 22.7 25.7 89.1
Net income per common and
common equivalent share . . . . . $ 0.46 0.55 0.56 0.63 2.20
Year ended March 31, 1994:
Revenues . . . . . . . . . . . . . $ 402.2 463.6 466.4 452.7 1,784.9
Operating profit . . . . . . . . . $ 27.6 33.0 30.1 25.9 116.6
Income before cumulative effect
of change in accounting for income
taxes . . . . . . . . . . . . . . $ 16.8 17.8 18.5 15.2 68.3
Cumulative effect as of April 1,
1993 of change in accounting for
income taxes. . . . . . . . . . . 7.9 - - - 7.9
Net income . . . . . . . . . . . . $ 24.7 17.8 18.5 15.2 76.2
Income per common and common
equivalent share before cumulative
effect of change in accounting for
income taxes. . . . . . . . . . . $ 0.42 0.44 0.46 0.38 1.69
Cumulative effect of change in
accounting for income taxes . . . 0.20 - - - 0.20
Net income per common and common
equivalent share. . . . . . . . . $ 0.62 0.44 0.46 0.38 1.89
Division Officers
Railcars
Timothy R. Wallace
Chairman, Railcars
Marvin B. Hughes
President, Railcar
Repair
John R. Nussrallah
Executive Vice President
B. Ray Autry
Vice President
Dan D. Banks
Vice President
Fred M. Groff
Vice President
Dale B. Hill
Vice President
Helmut F. Hvizdalek
Vice President
Jeffrey J. Marsh
Vice President
William C. McDowell
Vice President
W. C. Newby
Vice President
Timothy R. Schitter
Vice President
Stephen W. Smith
Vice President
Richard C. Snyder
Vice President
Leasing
Richard G. Brown
Executive Vice
President
Duncan A. Gillies
Vice President
Thomas C. Jardine
Vice President
Construction Products and Metal
Components
John T. Sanford
Chairman, Construction
Products and Metal
Components
Don A. Graham
President, Rollform
Don H. Johnson
President, Syro, Inc.
Robert K. Van Noord
President,
Fittings Group
Cecil C. Spear, Jr.
Executive Vice President
Hank P. Arendt
Vice President
Rodney A. Boyd
Vice President
Stephen L. Brown
Vice President
Richard D. Dalton
Vice President
James Randall Foil
Vice President
Thomas H. Germanson
Vice President
Russell D. McBroom
Vice President
Charles R. Norton
Vice President
Carl E. Stevens
Vice President
Christine S. Stucker
Vice President
Construction Products
Materials and Aggregates
Mark W. Stiles
President
Haywood Walker, III
Executive Vice President
Douglas Almond
Vice President
William A. McWhirter, II
Vice President
Marine Products
John Dane, III
President, Marine
Group
Daniel J. Mortimer
President, Gulf Coast
Fabrication, Inc.
Neal S. Platzer
President, Platzer
Shipyard, Inc.
Vincent R. Almerico
Senior Vice President
Robert E. Kenny
Senior Vice President
Harvey B. Walpert
Senior Vice President
Clifford Anglin
Vice President
Wayne J. Bourgeois
Vice President
George DeBord
Vice President
Salvadore J. Guarino
Vice President
A. Fred May
Vice President
Sidney C. Mizell
Vice President
Phillip W. Nuss
Vice President
Gary D. Owens
Vice President
Anil Raj
Vice President
James G. Rivers, Jr.
Vice President
Neville Q. Rush
Vice President
Containers
Custom Vessels
Harry W. Hinkle
President,
Beaird
Industries, Inc.
Paul J. Tarantolo
President, TMF
E. C. Green
Vice President
George W. Gruner
Vice President
Murphy B. Horton
Vice President
Charles G. Moore
Vice President
Billy Ted Walsworth
Vice President
Steve Zoller
Vice President
LPG Containers
Timothy R. Wallace
Chairman, LPG Containers
John R. McDearman
Executive Vice President
Michael C. Cooper
Vice President
Transportation
Patrick A. Turner
President,
Transportation
Directors
David W. Biegler
Chairman, President and Chief
Executive Officer
ENSERCH Corporation
Barry J. Galt
Chairman, President and Chief
Executive Officer
Seagull Energy Corporation
Dean P. Guerin
Chairman and Chief
Executive Officer
Berry-Barnett Food
Distribution Company
Jess T. Hay
Retired Chairman and Chief Executive
Officer,
Lomas Financial Corporation
Edmund M. Hoffman
Investments
Ray J. Pulley
Investments
Timothy R. Wallace
Group Vice President
W. Ray Wallace
Chairman, President and Chief Executive
Officer
Executive Officers
W. Ray Wallace
Chairman, President and Chief Executive
Officer
Ralph A. Banks, Jr.
Senior Vice President
Richard G. Brown
Senior Vice President
K. W. Lewis
Senior Vice President
Lee D. McElroy
Senior Vice President
John Dane, III
Group Vice President
John T. Sanford
Group Vice President
Mark W. Stiles
Group Vice President
Timothy R. Wallace
Group Vice President
Jack L. Cunningham, Jr.
Vice President
John M. Lee
Vice President
R. A. Martin
Vice President
Tim L. Oglesby
Vice President
F. Dean Phelps, Jr.
Vice President
Joeseph F. Piriano
Vice President
Linda S. Sickels
Vice President
Neil O. Shoop
Treasurer
William J. Goodwin
Controller
J. J. French, Jr.
Secretary
(Employed by outside
law firm)
Executive Offices
2525 Stemmons Freeway
Dallas, Texas
75207-2401
P.O. Box 568887
Dallas, Texas 75356-8887
Tel: (214) 631-4420
Auditors
Ernst & Young LLP
Transfer Agent and
Registrar
The Bank of New York
New York, New York
Annual Meeting
The Annual Meeting of
Stockholders will be on
July 19, 1995, at 9:30
a.m. at the offices of
the Company,
2525 Stemmons Freeway,
Dallas, Texas 75207-2401.
Form 10-K
A copy of the Company's
Form 10-K, filed with the
Securities and Exchange
Commission, shall be
furnished without charge
upon written request to
F. Dean Phelps, Jr., Vice
President, Trinity
Industries, Inc., P. O.
Box 568887, Dallas, Texas
75356-8887.
EXHIBIT 21
Trinity Industries, Inc.
Listing of Subsidiaries of the Registrant
The Registrant has no parent.
At March 31, 1995, the operating subsidiaries of the Registrant were:
Percentage of
Organized voting securities
under the owned by the
Name of subsidiary laws of Registrant
Beaird Industries, Inc. Delaware 100%
Beaird Industries, Inc. of Orange Delaware 100%
Flo-Bend, Inc. Delaware 100%
Gulf Coast Fabrication, Inc. Mississippi 100%
Platzer Shipyard, Inc. Delaware 100%
Standard Forged Products, Inc. Delaware 100%
Stearns Airport Equipment Co., Inc. Delaware 100%
Syntechnics, Inc. Delaware 100%
Syro, Inc. Ohio 100%
Transit Mix Concrete & Materials
Company Delaware 100%
Transit Mix Concrete & Materials
Company of Louisiana Louisiana 100%
Trinity Industries Leasing Company Delaware 100%
Trinity Industries Transportation, Inc. Texas 100%
Trinity Marine Caruthersville, Inc. Delaware 100%
Trinity Marine Gulfport, Inc. Nevada 100%
Trinity Marine Nashville, Inc. Delaware 100%
Trinity Marine Panama City, Inc. Delaware 100%
Trinity Marine Port Allen, Inc. Delaware 100%
Trinity Materials, Inc. Delaware 100%
EXHIBIT 27
[TYPE] EX-27
[DESCRIPTION] ART. 5 FDS FOR 4TH QUARTER 10K
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] MAR-31-1995
[PERIOD-END] MAR-31-1995
[CASH] $15,300,000
[SECURITIES] 0
[RECEIVABLES] $270,300,000
[ALLOWANCES] 0
[INVENTORY] $395,000,000
[CURRENT-ASSETS] 0
[PP&E] $1,088,700,000
[DEPRECIATION] ($401,600,000)
[TOTAL-ASSETS] $1,420,000,000
[CURRENT-LIABILITIES] 0
[BONDS] 0
[COMMON] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] $778,800,000
[SALES] 0
[TOTAL-REVENUES] $2,314,900,000
[CGS] 0
[TOTAL-COSTS] $2,136,300,000
[OTHER-EXPENSES] ($2,200,000)
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] $33,300,000
[INCOME-PRETAX] $147,500,000
[INCOME-TAX] $58,400,000
[INCOME-CONTINUING] $89,100,000
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] $89,100,000
[EPS-PRIMARY] $2.20
[EPS-DILUTED] $2.20
</TABLE>
EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1995
Commission File Number 1-6903
PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC.
AND CERTAIN AFFILIATES
(Full Title of the plan)
TRINITY INDUSTRIES, INC.
(Name of issuer of the securities held pursuant to the plan)
Delaware 75-0225040
(State of Incorporation) (I.R.S. Employer Identification No.)
2525 Stemmons Freeway Dallas, Texas 75207-2401
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (214) 631-4420
<PAGE>
Profit Sharing Plan for Employees of Trinity Industries, Inc.
and Certain Affiliates
Index to Annual Report on Form 11-K
(a) Financial Statements
Description Page
Report of independent auditors . . . . . . . 4
Statement of financial condition as of
March 31, 1995 and 1994 . . . . . . . . . . . 5 - 6
Statement of income and changes in Plan
equity for the years ended March 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . 7 - 9
Notes to financial statements . . . . . . . . 10
Schedules - Schedules I, II, and III have been
omitted because the information required is included
in the Financial Statements or the notes thereto.
(b) Exhibits
Number Title Page
1 Consent of independent auditors 19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees have duly caused this Annual Report to be
signed by the undersigned thereunto duly authorized.
Profit Sharing Plan for Employees of Trinity Industries, Inc.
and Certain Affiliates
F. Dean Phelps, Jr.
Vice President
June 26, 1995
<PAGE>
Report of Independent Auditors
The Board of Directors
Trinity Industries, Inc.
We have audited the accompanying statements of financial
condition of the Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates (the "Plan") as of March
31, 1995 and 1994, and the related statements of income and
changes in plan equity for each of the three years in the period
ended March 31, 1995. These financial statements are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial condition
of the Plan at March 31, 1995 and 1994, and the income and
changes in plan equity for each of the three years in the period
ended March 31, 1995, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying
supplemental schedules of assets held for investment and
reportable transactions are presented for purposes of complying
with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the basic
financial statements. The Fund Information in the statements of
financial condition and the statements of income and changes in
plan equity is presented for purposes of additional analysis
rather than to present the financial condition and income and
changes in plan equity of each fund. The supplemental schedules
and Fund Information have been subjected to the auditing
procedures applied in our audits of the financial statements and,
in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
Dallas, Texas
June 16, 1995
<TABLE>
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Financial Condition, With Fund Information
March 31, 1995
<CAPTION>
------ Putnam Mutual Funds -----
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Cash and short-term
investments . . . . . . . . . $ 16,953 $ 49,977 $ 6,079 $ - $ 102,359 $ 44,618 $ 219,986
Notes receivable
from participants . . . . . . - - - - - 768,096 768,096
Investment in Trinity
common stock, at market . . . 11,192,467 - - - - - 11,192,467
Investment in guaranteed
investment contracts, at
contract value . . . . . . . - 31,592,821 - - - - 31,592,821
Investment in Putnam mutual
funds, at market . . . . . . - - 4,395,494 3,385,933 3,463,774 - 11,245,201
Interest receivable . . . . . . 369 195,414 31,851 61,111 491 370 289,606
Contribution receivable
from Trinity . . . . . . . . 633,666 1,720,912 383,541 257,537 404,072 - 3,399,728
Contribution receivable
from employees. . . . . . . . 187,758 475,196 117,460 73,752 110,260 - 964,426
Plan equity . . . . . . . . . . $12,031,213 $34,034,320 $4,934,425 $3,778,333 $4,080,956 $ 813,084 $59,672,331
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Financial Condition, With Fund Information
March 31, 1994
<CAPTION>
----- Putnam Mutual Funds ----
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Cash and short-term
investments . . . . . . . . . $ 15,766 $ 42,787 $ - $ - $ - $ 56,160 $ 114,713
Notes receivable
from participants . . . . . . - - - - - 567,334 567,334
Investment in Trinity
common stock, at market . . . 9,280,170 - - - - - 9,280,170
Investment in guaranteed
investment contracts, at
contract value . . . . . . . - 26,064,092 - - - - 26,064,092
Investment in Putnam mutual
funds, at market . . . . . . - - 2,753,306 2,566,037 1,872,152 - 7,191,495
Interest receivable . . . . . . 183 68,898 4 14,994 8 173 84,260
Contribution receivable
from Trinity . . . . . . . . 416,203 1,288,379 265,819 250,827 310,555 - 2,531,783
Contribution receivable
from employees. . . . . . . . 134,956 373,797 97,830 77,199 85,887 17,444 787,113
Plan equity . . . . . . . . . . $9,847,278 $27,837,953 $3,116,959 $2,909,057 $2,268,602 $ 641,111 $46,620,960
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Income and Changes in Plan Equity, With Fund Information
Year Ended March 31, 1995
<CAPTION>
Putnam Mutual Funds
Guaranteed U.S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income:
Interest . . . . . . . . . . . $ 5,210 $ 2,201,037 $ 871 $ 224,450 $ 1,276 $ 2,707 $ 2,435,551
Dividends. . . . . . . . . . . 181,964 - 233,501 - 124,601 - 540,066
Other . . . . . . . . . . . - - - - - 426,863 426,863
187,174 2,201,037 234,372 224,450 125,877 429,570 3,402,480
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . 2,434,730 14,249,171 1,683,054 1,386,786 1,492,338 - 21,246,079
Aggregate costs . . . . . . (2,434,730)(14,249,171)(1,678,150)(1,402,797) (1,482,447) - (21,247,295)
Net realized gain(loss) . . . . . - - 4,904 (16,011) 9,891 - (1,216)
Unrealized appreciation (depreciation)
of investments . . . . . . . . (245,895) - 248,330 (50,592) 303,866 (81) 255,628
Contributions:
Employee contribution. . . . . 1,827,576 4,499,784 1,270,743 930,977 1,145,353 (17,444) 9,656,989
Employer contribution. . . . . 633,665 1,720,912 428,277 257,537 359,336 - 3,399,727
2,461,241 6,220,696 1,699,020 1,188,514 1,504,689 (17,444) 13,056,716
Withdrawals, distributions
and transfers. . . . . . . . . (218,585) (2,225,366) (369,160) (477,085) (131,969) (240,072) (3,662,237)
Net increase in Plan equity . . . 2,183,935 6,196,367 1,817,466 869,276 1,812,354 171,973 13,051,371
Plan equity:
Beginning of year . . . . . . 9,847,278 27,837,953 3,116,959 2,909,057 2,268,602 641,111 46,620,960
End of year . . . . . . . . . $12,031,213 $34,034,320 $4,934,425 $3,778,333 $4,080,956 $ 813,084 $59,672,331
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Income and Changes in Plan Equity, With Fund Information
Year Ended March 31, 1994
<CAPTION>
----- Putnam Mutual Funds ----
Guaranteed U.S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income:
Interest . . . . . . . . . . . $ 2,683 $ 1,873,188 $ 420 $ 200,136 $ 223 $ 1,759 $ 2,078,409
Dividends. . . . . . . . . . . 144,518 - 177,194 - 57,555 - 379,267
Other. . . . . . . . . . . . . - - - - - 321,766 321,766
147,201 1,873,188 177,614 200,136 57,778 323,525 2,779,442
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . 2,636,953 9,307,147 1,197,660 2,041,323 801,574 - 15,984,657
Aggregate costs. . . . . . . . (2,649,556) (9,307,147)(1,187,943)(2,051,444) (799,916) - (15,996,006)
Net realized gain(loss) . . . . . (12,603) - 9,717 (10,121) 1,658 - (11,349)
Unrealized appreciation (depreciation)
of investments . . . . . . . . 1,197,204 - (131,217) (156,008) 47,923 (57) 957,845
Contributions:
Employee contribution. . . . . 1,301,604 3,663,011 821,311 875,662 605,778 6,379 7,273,745
Employer contribution. . . . . 460,564 1,288,379 321,176 250,827 255,198 - 2,576,144
1,762,168 4,951,390 1,142,487 1,126,489 860,976 6,379 9,849,889
Withdrawals, distributions
and transfers . . . . . . . . . (837,596) (1,714,241) 57,912 (743,825) 251,648 (154,737) (3,140,839)
Net increase in Plan equity . . . 2,256,374 5,110,337 1,256,513 416,671 1,219,983 175,110 10,434,988
Plan equity:
Beginning of year. . . . . . . 7,590,904 22,727,616 1,860,446 2,492,386 1,048,619 466,001 36,185,972
End of year. . . . . . . . . . $9,847,278 $27,837,953 $3,116,959 $2,909,057 $2,268,602 $ 641,111 $46,620,960
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Income and Changes in Plan Equity, With Fund Information
Year Ended March 31, 1993
<CAPTION>
----- Putnam Mutual Funds -----
Guaranteed U.S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income:
Interest . . . . . . . . . . . $ 3,040 $ 1,637,458 $ 462 $ 51,977 $ 356 $ 895 $ 1,694,188
Dividends. . . . . . . . . . . 117,359 - 43,610 - 16,400 - 177,369
Other. . . . . . . . . . . . . - - - - - 294,872 294,872
120,399 1,637,458 44,072 51,977 16,756 295,767 2,166,429
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . 1,273,425 5,381,493 585,346 734,766 371,519 - 8,346,549
Aggregate costs . . . . . . (1,273,425) (5,381,493) (585,346) (734,774) (371,569) - (8,346,607)
Net realized gain(loss) . . . . . - - - (8) (50) - (58)
Unrealized appreciation (depreciation)
of investments . . . . . . . . 2,351,208 - 66,094 (26,234) 49,684 (65) 2,440,687
Contributions:
Employee contribution. . . . . 825,144 3,432,929 468,859 559,902 290,269 11,065 5,588,168
Employer contribution. . . . . 269,296 1,152,260 104,723 194,247 160,080 - 1,880,606
Syro Plan Merger . . . . . . . 157,974 - 916,552 1,357,725 359,558 - 2,791,809
1,252,414 4,585,189 1,490,134 2,111,874 809,907 11,065 10,260,583
Withdrawals, distributions
and transfers . . . . . . . . . (451,227) (1,880,826) 5,502 29,562 15,908 (72,290) (2,353,371)
Net increase in Plan equity . . . 3,272,794 4,341,821 1,605,802 2,167,171 892,205 234,477 12,514,270
Plan equity:
Beginning of year. . . . . . . 4,318,110 18,385,795 254,644 325,215 156,414 231,524 23,671,702
End of year . . . . . . . . . $7,590,904 $22,727,616 $1,860,446 $2,492,386 $1,048,619 $ 466,001 $36,185,972
</TABLE>
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Notes to Financial Statements
March 31, 1995
1. Description of the Plan
General - The Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates (the "Plan") was adopted by
the Board of Directors of Trinity Industries, Inc. (the "Board") on
December 11, 1986 and became effective January 1, 1987, for
eligible employees of Trinity Industries, Inc. and Certain
Affiliates (the "Employer"). The Plan was amended and restated
effective April 1, 1994. The Plan is a defined contribution plan
designed to comply with the provisions of Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA"). The following is
a brief description of the Plan. Participants should refer to the
Plan document for complete information regarding the Plan. The
Plan's fiscal year end is March 31.
Participation - Each employee is eligible to contribute to the
Plan on the first day of the calendar quarter following one year of
service with the Company and must meet the following requirements:
Must be classified as a full-time, part-time, or temporary
employee of Trinity Industries, Inc.; and
Must be in a unit of employees who are designated as
eligible to participate in the Plan; and
Must not be included in a unit of employees covered by a
collective bargaining agreement unless benefits under this
Plan were included in an agreement as a result of good
faith bargaining.
Eligible employees automatically become participants and must
indicate on the form or forms provided by the Committee whether or
not they want to make contributions to the plan. If they elect to
contribute, they will authorize the Employer to make payroll
deductions for contributions to the Plan.
Contributions - Each Plan participant agrees to contribute not
less than two percent nor more than ten percent of their
compensation in one percent increments as designated by the
participant. A participant's salary reduction may not exceed
$9,240 per calendar year ended 1995 and 1994. A salary reduction
and contribution agreement must be entered into by each employee as
the employee begins participation in the Plan and may be amended by
such employee each quarter.
Employer matching contribution shall be made if Company
earnings are at least $0.33 per share of common stock and
sufficient to pay dividends to stockholders ($0.68, $0.64 and $0.53
per share for the years ended March 31, 1995, 1994, and 1993,
respectively). Dividends per share have been adjusted for the
three-for-two stock split distributed on August 31, 1993. If the
Employer matching contribution is made, then each participant with
at least five years of service, shall receive an amount equal to 50
percent of that portion of such participant's employee contribution
which does not exceed six percent of such participant's total
compensation for the year. If the Employer matching contribution
is made, then each participant with less than five years of service
shall receive an amount equal to 25 percent of that portion of such
participant's employee contribution which does not exceed six
percent of such participant's total compensation for the year.
Employer contributions are net of forfeitures, as defined.
Employer contributions for a given plan year shall be deposited in
the Profit Sharing Trust for Employees of Trinity Industries, Inc.
and Certain Affiliates (the "Trust Fund") as defined below, no
later than the date on which the Employer files its Federal income
tax return for such year.
The Employer and Texas Commerce Bank - Dallas (the "Trustee"),
have entered into a Trust Agreement under which the latter acts as
Trustee under the Plan. Texas Commerce Bank - Dallas is the
successsor Trustee to First City Bank of Dallas, N.A. pursuant to
the acquisition by Texas Commerce Bank - Dallas of the assets and
certain liabilities of the former First City Bank of Dallas, N.A.
In its capacity as Trustee, Texas Commerce Bank - Dallas
invests the employee contributions and Employer contributions in
the following investment options (hereafter collectively referred
to as the "Trust Fund"):
(a) Trinity Stock Investment Account ("Stock Account") holds
shares of Employer common stock purchased on behalf of the
participants. Idle cash is invested in interest-bearing
accounts until such time as it can be utilized to purchase
Employer common stock.
(b) Guaranteed Investment Contract Investment Account (the
"Guaranteed Investment Account") invests in guaranteed
investment contracts issued by an insurance company selected
annually by the Committee. At March 31, 1995, the guaranteed
investment contracts had guaranteed annual rates of return of
8.80% (GAC 4854), 9.06% (GAC 5027), 6.24% (GAC 627-05387),
8.31% (GAC 7614) and 5.15% (GAC 7219).
(c) Putnam Mutual Funds Investment Accounts (the "Putnam
Mutual Funds") invests in three mutual funds selected by the
Committee. At March 31, 1995, the funds are U.S. Government
Income Trust, Growth and Income, and Voyager.
Participants may elect the extent to which assets are invested
in the options described above in increments of 10 percent or 25
percent. At March 31, 1995, 1994 and 1993, the majority of
participants had elected to participate in the guaranteed
investment contracts.
Benefits - Distribution of a participant's account balance is
payable upon retirement at or after age 65, total disability,
death, or termination of employment. Distribution is equal to the
salary reduction contribution and related earnings plus the vested
portion of the Employer contribution and related earnings.
Withdrawal of up to 100 percent of the employee contribution
can be made only to meet "immediate and heavy financial needs"
(medical care, college tuition, the purchase of a principal
residence, or to prevent the foreclosure on a principal residence)
as long as the funds are not available for such needs from other
sources. No withdrawal can be made against the earnings on the
employee contributions or against the Employer contribution and
related earnings. These restrictions no longer apply when the
participant reaches age 59 1/2.
Loans for "immediate and heavy financial needs" may be made
for a minimum of $1,000 up to a maximum of $50,000, not to exceed
50 percent of the Employee contribution and related earnings and
not to exceed 50 percent of the vested portion of the Employer
contribution and related earnings. Loans are subject to rules and
regulations established by the Plan Administrator, as defined in
the Plan.
Vesting - The Employer contribution and related earnings
(losses) vest to participants, depending upon the number of years
of vesting service, as defined, completed by such participant as
follows:
Years of Service Percentage Vested
Less than 1 0
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
Participants are 100 percent vested in their Employer
contribution and allocated portion of related earnings (losses)
upon their attainment of age 65 and are always 100 percent vested
in their employee contribution and related earnings (losses) on
such contribution.
Administration of the Plan - The Plan is administered by a
Profit Sharing Committee (the "Committee") consisting of at least
three persons who are appointed by the Board. The members of the
Committee serve at the pleasure of the Board, and any committee
member who is an employee of the Employer shall not receive
compensation for his services.
A separate account is maintained for each participant. The
Plan provides that account balances for participants are adjusted
periodically as follows:
(a) Employee contributions are generally allocated on a
quarterly basis;
(b) Participant's share of the Employer contribution shall be
allocated to the participant's account as of a date no later
than the last day of the Plan year;
(c) Earnings and appreciation or depreciation of investment
assets of the Trust Fund for each calendar quarter shall be
allocated to the accounts of participants, former
participants and beneficiaries who had unpaid balances in
their accounts on the last day of such calendar quarter in
proportion to the balances in such accounts at the beginning
of the calendar quarter.
Upon request, distributions shall be made no earlier than the
later of the last day of the calendar quarter in which entitlement
occurs or the date on which the Committee determines the final
balances. Distributions from the Stock Account shall be made in
cash unless otherwise designated by the participant.
Income tax status - The Plan has received a determination
letter from the Internal Revenue Service dated November 4, 1994
stating that the Plan is a qualified plan under Section 401(a) of
the Internal Revenue Code of 1986 (the "Code") and that the Trust
is exempt from federal income tax under Section 501(a) of the Code.
The Committee is not aware of any course of action or series of
events that have occurred that might adversely affect the plan's
qualified status.
Employee contributions and Employer contributions are not
included in the participant's federal taxable income in the year
such contributions are made. A participant shall not be subject to
federal income taxes with respect to participation in the Plan
until the amounts are withdrawn or distributed.
Amendment or termination of the Plan - The Employer may amend
the Plan at any time. However, no amendment, unless made to secure
approval of the Internal Revenue Service or other governmental
agency, may operate retroactively to reduce or divest the then
vested interest in the Plan of any participant, former participant
or beneficiary, or to reduce or divest any benefit payable under
the Plan unless all participants, former participants and
beneficiaries then having vested interests or benefit payments
affected thereby consent to such amendment.
The Employer may terminate the Plan at any time. Upon complete
or partial termination, the accounts of all participants affected
thereby shall become 100 percent vested, and the Committee shall
direct the Trustee to distribute the assets in the Trust Fund,
after receipt of any required approval by the Internal Revenue
Service and payment of any expenses properly chargeable thereto, to
participants, former participants, and beneficiaries in proportion
to their respective account balances.
2. Significant Accounting Policies
Investments and investment income - Investments in the common
stock of the Employer and the Putnam Mutual Funds are valued at the
last reported sales price on the last business day of the Plan year
as reported on a national securities exchange. The investments in
guaranteed investment contracts are valued at cost which
approximates market value.
Security transactions are recorded on a trade date basis. The
statement of income and changes in Plan equity include net
unrealized appreciation or depreciation in market value on
investments. The Plan's financial statements are prepared on an
accrual basis.
Realized gains and losses - Realized gains and losses have been
calculated using historical cost (first in, first out).
Prior year financial statements have been restated in order to
comply with the provisions of the AICPA Statement of Position 92-6
"Accounting and Reporting by Health and Welfare Benefit Plans."
Amounts previously reported as benefits payable have been included in
Plan equity and the distributed amounts have been adjusted accordingly.
<PAGE>
3. Investments
Investments are as follows:
March 31, 1995 March 31, 1994
Cost Market Cost Market
Trinity common
stock $ 7,591,381 $11,192,467 $ 5,433,189 $ 9,280,170
Guaranteed investment
contracts
GAC 4854 7,669,687 7,669,687 7,100,022 7,100,022
GAC 5764 - - 4,885,851 4,885,851
GAC 7219 7,823,255 7,823,255 3,800,180 3,800,180
GAC 5027 4,347,428 4,347,428 4,015,742 4,015,742
GAC 15960 - - 3,013,308 3,013,308
GAC 627-05387 3,451,726 3,451,726 3,248,989 3,248,989
GAC 7614 8,300,725 8,300,725 - -
31,592,821 31,592,821 26,064,092 26,064,092
Putnam mutual funds
U.S. Govt.
Income Trust 3,620,596 3,385,933 2,750,108 2,566,037
Growth & Income 4,213,280 4,395,494 2,819,423 2,753,306
Voyager 3,066,299 3,463,774 1,778,542 1,872,152
10,900,175 11,245,201 7,348,073 7,191,495
Participant loans 768,416 768,096 567,573 567,334
$50,852,793 $54,798,585 $39,412,927 $43,103,091
4. Reconciliation of Financial Statements to the Form 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
March 31
1995 1994
Net assets available for plan benefits per the
financial statements $59,672,331 $46,620,960
Amounts allocated to withdrawing participants (778,329) (930,061)
Net assets available for plan benefits per the
Form 5500 $58,894,002 $45,690,899
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
Year Ended March
31
1995 1994
Benefits and withdrawals per the financial
statements $3,662,237 $3,140,839
Amounts allocated to withdrawing participants at
end of year 778,329 930,061
Amounts allocated to withdrawing participants at
beginning of year (930,061) (608,655)
Benefits and withdrawals per the Form 5500 $3,510,505 $3,462,245
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to March 31 but not yet paid as of that date.
5. Unrealized Appreciation (Depreciation) of Investments
Unrealized appreciation (depreciation) of investments in Trinity common
stock, Putnam mutual funds, and Participant loans for the years ended March
31, 1995, 1994, and 1993 were determined as follows:
Net
Investments Investments Increase
at market at cost (decrease)
March 31, 1995
Trinity common stock
March 31, 1995 $11,192,467 $ 7,591,381 $3,601,086
March 31, 1994 9,280,170 5,433,189 3,846,981
1,912,297 2,158,192 (245,895)
Putnam mutual funds
March 31, 1995 11,245,201 10,900,175 345,026
March 31, 1994 7,191,495 7,348,073 (156,578)
4,053,706 3,552,102 501,604
Participant loans
March 31, 1995 768,096 768,416 (320)
March 31, 1994 567,334 567,573 (239)
200,762 200,843 (81)
Increase in unrealized
appreciation of
investments $ 6,166,765 $ 5,911,137 $ 255,628
March 31, 1994
Trinity common stock
March 31, 1994 $ 9,280,170 $ 5,433,189 $3,846,981
March 31, 1993 7,176,868 4,527,091 2,649,777
2,103,302 906,098 1,197,204
Putnam mutual funds
March 31, 1994 7,191,495 7,348,073 (156,578)
March 31, 1993 4,760,031 4,677,307 82,724
2,431,464 2,670,766 (239,302)
Participant loans
March 31, 1994 567,334 567,573 (239)
March 31, 1993 449,509 449,691 (182)
117,825 117,882 (57)
Increase in unrealized
appreciation of
investments $ 4,652,591 $ 3,694,746 $ 957,845
March 31, 1993
Trinity common stock
March 31, 1993 $ 7,176,868 $ 4,527,091 $2,649,777
March 31, 1992 4,016,528 3,717,959 298,569
3,160,340 809,132 2,351,208
Putnam mutual funds
March 31, 1993 4,760,031 4,677,307 82,724
March 31, 1992 361,165 367,985 (6,820)
4,398,866 4,309,322 89,544
Participant Loans
March 31, 1993 449,509 449,691 (182)
March 31, 1992 222,840 222,957 (117)
226,669 226,734 (65)
Increase in unrealized
appreciation of
investments $ 7,785,875 $ 5,345,188 $2,440,687
6. Expenses
The expenses incurred by the Trustee in the performance of its duties,
including the Trustee's compensation and the services of an actuary, shall
be paid by the Plan unless paid by the Employer. The Employer paid
$268,624, $196,608, and $237,576, for actuarial services and trustee fees
on behalf of the Plan for the fiscal years ended March 31, 1995, 1994, and
1993, respectively.
<PAGE>
Index to Exhibits
Number Description Page
1 Consent of Independent Auditors 19
Consent of Independent Auditors
We consent to the incorporation by reference in Post Effective
Amendment No. 1 to the Registration Statement (Form S-8, File No. 33-
10937) pertaining to the Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates and in the related Prospectus of
our report dated June 16, 1995, with respect to the financial statements
and schedules of the Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates included in this Annual Report
(Form 11-K) for the year ended March 31, 1995.
ERNST & YOUNG LLP
Dallas, Texas
June 26, 1995
Profit Sharing Plan for Employees
of Trinity Industries, Inc. And Certain Affiliates
Item 27(a) - Assets Held for Investment
March 31, 1995
Units,
shares,
or face Current
Identity amount Cost value
Trinity common stock 299,464 $ 7,591,381 $11,192,467
Guaranteed Investment Contracts
Allstate Life Insurance Co.
GAC 4854, 8.80% 7,669,687 7,669,687
GAC 5027, 9.06% 4,347,428 4,347,428
John Hancock Mutual Life
GAC 7219, 5.15% 7,823,255 7,823,255
GAC 7614 8.31% 8,300,725 8,300,725
Provident Life & Accident
Insurance Co.
GAC 627-05387, 6.24% 3,451,726 3,451,726
31,592,821 31,592,821
Putnam mutual funds
U. S. Govt.
Income Trust 270,875 3,620,596 3,385,933
Growth & Income 317,593 4,213,280 4,395,494
Voyager 277,992 3,066,299 3,463,774
10,900,175 11,245,201
Participant loans 768,416 768,096
$50,852,793 $54,798,585
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Item 27(d) Reportable Transactions
Year Ended March 31, 1995
(Pursuant to ERISA Section 2520.103-6(d)(2))
---- Purchases --- ---------- Sales ---------
Number of Number of Net
trans- trans- gain
actions Cost actions Proceeds (loss)
John Hancock Mutual 4 $8,300,725 - - -
Life GAC 7614, 8.31%
Massachusetts Mutual
Life Insurance Co.
GACP 5764 - - 1 $5,256,827 -
Travelers Insurance Co. - - 1 $3,216,342 -
GIC 15960, 6.70%
