<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-K
---------
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000
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) 631-4420
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, INC.
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 REGISTRANT'S 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 $811,626,426 as of May 26, 2000.
38,104,166
(Number of Shares of common stock outstanding as of May 26, 2000)
================================================================================
(Continued on reverse side)
<PAGE> 2
(Continued from cover page)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement dated June 19,
2000 for the 2000 Annual Meeting of Stockholders to be held July 19, 2000 are
incorporated by reference into Part III hereof.
<PAGE> 3
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS. Trinity Industries, Inc. (the
"Registrant" or "Trinity") 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.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. Various financial
information concerning the Registrant's segments for each of the last three
fiscal years is presented in Part II, Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 7 through
12.
NARRATIVE DESCRIPTION OF BUSINESS. The Registrant is engaged in the
manufacture, marketing, and leasing of a wide variety of products consisting of
the following six business segments or groups:
RAILCAR GROUP. The Registrant manufactures railroad freight cars,
principally pressure and non-pressure tank cars, hopper cars, box 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.
The Registrant holds patents of varying duration for use in its
manufacture of railcar and component products. The Registrant cannot quantify
the importance of such patents, but patents are believed to offer a marketing
advantage in certain circumstances. No material revenues are received from
licensing of these patents.
A number of well established companies are presently engaged in the
manufacture of railcars on a large scale. The Registrant strives to be
competitive through improvements in the efficiency of the manufacturing process
and its creative designs to benefit customers.
INLAND BARGE GROUP. The Registrant produces river hopper barges, inland
tank barges and fiberglass barge covers. River hopper barges are used to carry
coal, grain and other commodities by various barge transport companies. Tank
barges are used to transport liquid products. The Registrant is North America's
leading producer of inland barges and one of the largest producers of fiberglass
barge covers. The inland barge business is made up of a few major manufacturers.
The Registrant strives to compete through efficiency in operations and quality
of product.
PARTS AND SERVICES GROUP. The Registrant manufactures railcar parts,
such as hitches, couplers, axles, and chutes that are ultimately used in the
manufacturing and repair of railcars. The Registrant is also engaged in railcar
maintenance, management, and/or leasing to various industries.
A wholly-owned leasing subsidiary, Trinity Industries Leasing Company
("TILC"), incorporated in 1979, is engaged in leasing specialized types of
railcars and locomotives to industrial companies in the petroleum, chemical,
grain, food processing, fertilizer and other industries which supply cars to the
railroads. At March 31, 2000, TILC owned 7,165 railcars.
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, 2000,
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TILC had equipment on lease or available for lease purchased from the Registrant
at a cost of $466.8 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.
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.
The Registrant also manufactures mixer barrels and dump bodies, as well
as container heads, which are pressed metal components used in the further
manufacture of a finished product of the Registrant. In addition, the Registrant
sells container heads to other manufacturers. 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.
HIGHWAY CONSTRUCTION PRODUCTS GROUP. The highway construction products
manufactured by the Registrant include highway guardrail and highway safety
devices and related barrier products, and beams and girders. These products are
used in the highway construction industries. Generally, customers for highway
guardrail and highway safety devices are highway departments or subcontractors
on highway projects. Sales of beams and girders are to general contractors and
subcontractors on highway construction projects.
The Registrant holds patents and is a licensee for certain of its
guardrail and end-treatment products that enhance its worldwide competitive
position for these products. The Registrant is the largest producer of these
products in North America, with products in use in all 50 states, as well as
Canada, Mexico, the Caribbean and Europe.
CONCRETE & AGGREGATE GROUP. The Registrant is engaged in the production
and manufacturing of ready-mix concrete and aggregates primarily in Texas and
Louisiana. Ready-mix concrete and aggregates are used in the building and
foundation industry, and customers include primarily owners, contractors, and
sub-contractors. The concrete and aggregate business is extremely competitive
depending upon the geographical area. The Registrant strives to compete through
service and efficiency of operations.
INDUSTRIAL GROUP. The Registrant is engaged in manufacturing metal
containers 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 manufactures butt weld type fittings and flanges. 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.
2
<PAGE> 5
The demand for LP gas containers is seasonal and mild winters for the
past three years reduced demand for LP gas containers in the United States.
Competitors range from large to small local companies. Competition for fittings
and flanges has been intense and has resulted in sharply reduced prices for
these products for the previous three fiscal years.
ALL OTHER. All Other includes transportation services, the Company's
captive insurance company, and other peripheral businesses.
MARKETING, RAW MATERIALS AND EMPLOYEES. As of March 31, 2000, the
Registrant operated in the continental United States, Mexico, Brazil, Romania,
and Argentina. The Registrant sells substantially all of its products through
its own salesmen operating from offices in the following states and foreign
countries: Alabama, Illinois, Kentucky, Louisiana, Michigan, North Carolina,
Ohio, Pennsylvania, Texas, Utah, Brazil, Mexico, and Romania. Independent sales
representatives are also used to a limited extent. The Registrant primarily
markets its transportation and industrial products 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, steel forgings, aluminum and cement and aggregate
material for ready-mix concrete. There are numerous domestic and foreign sources
of such steel and most other materials used by the Registrant.
The Registrant currently has approximately 20,600 employees, of which
approximately 15,300 are production employees and 5,300 are administrative,
sales, supervisory, and office employees.
ACQUISITIONS. The Company made certain acquisitions during fiscal 2000,
1999, and 1998 accounted for by the purchase method. The acquired operations
have been included in the consolidated financial statements from the effective
dates of the acquisitions. Information concerning these acquisitions are located
on page 22.
ENVIRONMENTAL MATTERS. The Registrant is subject to comprehensive and
frequently changing federal, state and local environmental laws and regulations,
including those governing emissions of air pollutants, discharges of wastewater
and storm waters, and the disposal of nonhazardous and hazardous waste. The
Registrant anticipates that it may incur costs in the future to comply with
currently existing laws and regulations and any new statutory requirements. Such
costs are not expected to be material to the Registrant.
OTHER MATTERS. 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 principally operates in various locations throughout the
United States with other facilities in Mexico, Brazil, and Romania, all of which
are considered to be in good condition, well maintained, and adequate for its
purposes.
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<PAGE> 6
<TABLE>
<CAPTION>
Approximate
Square Feet Productive
----------- Capacity
Owned Leased Utilized
--------- ---------- ----------
<S> <C> <C> <C>
Railcar Group 5,419,500 57,000 70%
Inland Barge Group 692,000 45,000 70%
Parts & Services Group 2,893,500 477,000 75%
Highway Construction Products Group 2,000,000 10,000 90%
Concrete & Aggregate Group 224,000 -- 85%
Industrial Group 1,356,000 317,000 50%
Executive Offices 173,000 -- N/A
---------- ----------
12,758,000 906,000
</TABLE>
ITEM 3. LEGAL PROCEEDINGS.
In December, 1999, a grand jury sitting in the Western District of
Louisiana returned a two count felony indictment against Trinity Baton Rouge,
Inc., a wholly owned subsidiary of the Company. The indictment charges Trinity
Baton Rouge, Inc. with transporting hazardous waste without a proper manifest to
an unpermitted facility in violation of the Resource Conservation Recovery Act.
Trinity Baton Rouge, Inc. denies all charges in the indictment and is defending
this matter vigorously.
In January and March 2000, representatives of the Registrant met with
representatives of the United States Environmental Protection Agency to
determine the exact nature of allegations in a complaint filed against the
Registrant. The complaint alleges that the Registrant failed to file certain
submissions timely to the United States Environmental Protection Agency in
alleged violation of the Emergency Planning Community Right to Know Act. The
Registrant denies all allegations and is defending this matter vigorously.
The Registrant is involved in other various 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 effect on the Registrant's
consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
4
<PAGE> 7
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is traded on the New York Stock Exchange
with the ticker symbol "TRN". The following table shows the price range of the
Company's common stock for fiscal years 2000 and 1999:
<TABLE>
<CAPTION>
Prices
-----------------------------
Year Quarter High Low
---- ------- ---- ---
<S> <C> <C> <C>
1999 First $54.56 $39.94
1999 Second 44.06 28.38
1999 Third 40.63 29.94
1999 Fourth 39.44 28.63
2000 First $37.38 $28.75
2000 Second 34.06 30.25
2000 Third 30.75 26.44
2000 Fourth 27.56 19.88
</TABLE>
HOLDERS
At March 31, 2000 the Registrant had approximately 2,150 record holders
of common stock. The par value of the stock is $1.
5
<PAGE> 8
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
Year Ended March 31
(in millions except for percent and per share data) 2000 1999 1998 1997 1996
--------------------------------------------------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Revenues $ 2,740.6 2,926.9 2,473.0 2,234.3 2,241.7
Operating profit $ 279.0 284.9 255.9 214.2 194.9
Income from continuing operations $ 165.5 185.3 103.7 113.7 101.3
Income from discontinued operations, net of income taxes $ -- -- -- 23.8 12.5
Net income $ 165.5 185.3 103.7 137.5 113.8
Total assets $ 1,738.5 1,684.9 1,573.9 1,356.4 1,426.6
Long-term debt $ 95.4 120.6 149.6 178.6 206.4
Stockholders' equity $ 1,015.1 959.1 887.5 809.5 746.0
Ratio of total debt to total capital % 20.7 23.9 22.0 23.1 36.2
Stock data:
Weighted average number of diluted shares outstanding 39.9 43.6 43.9 42.8 41.9
Net income per diluted common share:
Continuing operations $ 4.15 4.25 2.36 2.66 2.42
Discontinued operations -- -- -- 0.55 0.30
--------- --------- --------- --------- ---------
Net income per common share $ 4.15 4.25 2.36 3.21 2.72
Continuing operations before nonrecurring charges
and credits(1) $ 4.15 3.93 3.36 2.66 2.42
Dividends per share $ 0.72 0.69 0.68 0.68 0.68
Book value per share $ 26.50 23.22 20.40 18.83 17.93
</TABLE>
(1) Income from continuing operations before nonrecurring charges and credits is
not a term which is defined by generally accepted accounting principles. The
nonrecurring credit in fiscal 1999 represents the net-of-tax gain on a sale
of an investment in land and the nonrecurring charge in fiscal 1998
represents the net-of-tax effect of a litigation settlement.
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<PAGE> 9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
BASIS OF PRESENTATION
Trinity Industries, Inc. is one of the nation's leading diversified
industrial manufacturers. Segment information is reported for (i) the Railcar
Group, (ii) the Inland Barge Group, (iii) the Highway Construction Products
Group, (iv) the Industrial Group, (v) the Concrete & Aggregate Group, and (vi)
the Parts & Services Group. See Notes to the Consolidated Financial Statements
for further discussion of business segments. The following discussion compares
results from continuing operations of Trinity for fiscal 2000, 1999, and 1998.
2000 COMPARED WITH 1999 - RESULTS OF OPERATIONS
Revenues were $2.74 billion in fiscal 2000 compared to $2.93 billion in
fiscal 1999, a 6.5% decrease. Operating profit decreased slightly to $279.0
million in fiscal 2000 compared to $284.9 million in fiscal 1999, a 2.1%
decrease. Decreased revenues and operating profit were primarily attributable to
the Railcar and Parts & Services Groups as a result of decreased railcar
shipments. These declines are mostly offset by increased revenues and operating
profit in the Inland Barge, Highway Construction Products, and Concrete &
Aggregate Groups. Selling, engineering and administrative expenses increased as
a percentage of revenue to 6.7% from 5.8%. This increase is primarily a result
of the Company's global expansion and investments in technology.
Other income, net changed from $27.4 million income in fiscal 1999 to
$2.3 million in fiscal 2000 due primarily to a net gain on the sale of real
estate and other assets in the first quarter of fiscal 1999 in the amount of
$22.1 million.
Net income in fiscal 2000 decreased 10.7% to $165.5 million, or $ 4.15
per diluted share as compared to $185.3 million, or $4.25 per diluted share, in
fiscal 1999. Excluding the net gain in 1999 discussed above, net income per
diluted share in fiscal 2000 increased $0.22 per share, or 5.6% from fiscal
1999.
<TABLE>
<CAPTION>
RAILCAR GROUP
(in millions)
2000 1999
--------- --------
<S> <C> <C>
Revenues $1,515.3 $1,694.0
Operating Profit $ 167.9 $ 172.9
Operating Profit Margin 11.1% 10.2%
</TABLE>
While shipments of railcars declined 17% in fiscal 2000, revenues fell
only 10.5%. Operating profit decreased by only 3%, while operating profit margin
increased due to operating efficiencies and the product mix of railcar sales.
With a weakened railcar market, shipments are expected to decline in fiscal
2001 from about 23,000 railcars to a level of 14,000 to 18,000. At this level,
a very competitive market is anticipated.
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<PAGE> 10
INLAND BARGE GROUP
<TABLE>
<CAPTION>
(in millions)
2000 1999
--------- --------
<S> <C> <C>
Revenues $ 205.4 $ 196.4
Operating Profit $ 26.8 $ 13.4
Operating Profit Margin 13.0% 6.8%
</TABLE>
Inland Barge Group revenues increased 4.6% while operating profit
approximately doubled to $26.8 million. The increase in operating profit is due
mainly to cost reductions and operating efficiencies.
<TABLE>
<CAPTION>
PARTS & SERVICES GROUP
(in millions)
2000 1999
-------- --------
<S> <C> <C>
Revenues $ 426.6 $ 498.1
Operating Profit $ 72.6 $ 87.2
Operating Profit Margin 17.0% 17.5%
</TABLE>
Revenues decreased by $71.5 million in the Parts & Services Group,
from $498.1 million in fiscal 1999 (including intersegment sales of $155.6
million), to $426.6 million in the current year (including intersegment sales of
$121.5 million), while operating profit decreased from $87.2 million in fiscal
1999 to $72.6 million in fiscal 2000.
Revenue declines are primarily due to the softness in the railcar
market, the sale of three railcar repair plants, and decreased sales of
container heads.
<TABLE>
<CAPTION>
HIGHWAY CONSTRUCTION PRODUCTS GROUP
(in millions)
2000 1999
--------- --------
<S> <C> <C>
Revenues $ 193.8 $ 162.0
Operating Profit $ 35.3 $ 26.7
Operating Profit Margin 18.2% 16.5%
</TABLE>
Revenues in the Highway Construction Products Group increased 19.6%,
while operating profit increased 32.2%. Demand for highway construction products
is expected to remain strong due to the level of federal funding.
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<PAGE> 11
<TABLE>
<CAPTION>
CONCRETE & AGGREGATE GROUP
(in millions)
2000 1999
--------- --------
<S> <C> <C>
Revenues $ 251.8 $ 238.9
Operating Profit $ 26.0 $ 25.6
Operating Profit Margin 10.3% 10.7%
</TABLE>
Revenues increased due to a strong construction market, expansion,
and continued small acquisitions. Revenue growth more than offset a 5.6% revenue
decline resulting from the sale of certain operations in the Louisiana market.
<TABLE>
<CAPTION>
INDUSTRIAL GROUP
(in millions)
2000 1999
--------- --------
<S> <C> <C>
Revenues $ 218.1 $ 229.4
Operating Profit $ 15.1 $ 8.5
Operating Profit Margin 6.9% 3.7%
</TABLE>
The decline in revenues is primarily due to the sale of Beaird
Industries, Inc. in the quarter ended June 30, 1998. The increase in operating
profit is due to improved market conditions in the LPG container business and
improved profitability in the metal component business.
ALL OTHER
Revenues in the All Other group decreased from $63.7 million in fiscal
1999 to $51.1 million in fiscal 2000 while operating profit decreased from $10.2
million to $3.1 million in fiscal 2000. The decrease in revenues reflects
slightly weaker activity in some small, peripheral businesses.
1999 COMPARED WITH 1998
Revenues were $2.93 billion in fiscal 1999 compared to $2.47 billion in
fiscal 1998, an 18.6% increase. Operating profit was $284.9 million in fiscal
1999 compared to $255.9 million in fiscal 1998, an 11.3% increase. Increased
revenues and operating profit were primarily attributable to the Railcar, Parts
& Services, and Concrete & Aggregate Groups, partially offset by the Inland
Barge and Industrial Groups. Selling, engineering and administrative expenses
declined as a percentage of revenues to 5.8% from 6.6%. This decline was
primarily a result of reduced legal cost and pension expense, partially offset
by increases in technology and personnel costs to support the Company's growth.
Other income/expense changed from $90.0 million expense in fiscal 1998
to $11.5 million income in fiscal 1999. In fiscal 1998, other expense included a
litigation settlement of $70 million, while in fiscal 1999 other income includes
a net gain on the sale of real estate and other assets in the first quarter of
$22.1 million.
Net income in fiscal 1999 increased 78.7% to $185.3 million, or $4.25
per diluted share as compared to $103.7 million, or $2.36 per diluted share, in
fiscal 1998. Excluding the net gain and litigation settlement mentioned above,
earnings per share increased $0.57 per diluted share or 17% from fiscal 1998.
9
<PAGE> 12
RAILCAR GROUP
<TABLE>
<CAPTION>
(in millions)
1999 1998
-------- --------
<S> <C> <C>
Revenues $1,694.0 $1,095.7
Operating Profit $ 172.9 $ 113.9
Operating Profit Margin 10.2% 10.4%
</TABLE>
Revenues increased in the Railcar Group $598.3 million, or 54.6%, in
fiscal 1999 due to high demand and the ongoing replacement cycle for railcars,
which also contributed to strong railcar backlogs.
Railcar Group operating profit increased by $59.0 million, from $113.9
million in fiscal 1998, to $172.9 million in fiscal 1999. This 51.8% increase
was primarily a result of the increased volume in fiscal 1999. As a percentage
of revenue, operating profit decreased slightly primarily due to the product mix
of railcar sales.
<TABLE>
<CAPTION>
INLAND BARGE GROUP
(in millions)
1999 1998
-------- --------
<S> <C> <C>
Revenues $ 196.4 $ 335.2
Operating Profit $ 13.4 $ 31.5
Operating Profit Margin 6.8% 9.4%
</TABLE>
Revenues decreased in the Inland Barge Group $138.8 million, from
$335.2 million in fiscal 1998, to $196.4 million in fiscal 1999. Operating
profit decreased by $18.1 million, from $31.5 million in fiscal 1998, to $13.4
million in fiscal 1999. The decline in barge demand was primarily driven by
reduced grain export shipments and other factors, which led to lower rates paid
to river freight carriers.
<TABLE>
<CAPTION>
PARTS & SERVICES GROUP
(in millions)
1999 1998
--------- --------
<S> <C> <C>
Revenues $ 498.1 $ 363.7
Operating Profit $ 87.2 $ 77.8
Operating Profit Margin 17.5% 21.4%
</TABLE>
Outside revenues increased $60.4 million in the Parts & Services Group,
from $282.1 million in fiscal 1998, to $342.5 million in fiscal 1999. Operating
profit increased by $9.4 million in fiscal 1999 to $87.2 million from $77.8
million in fiscal 1998. Increased revenues and operating profit were due to
increased demand in the railcar industry and the acquisition of McConway and
Torley, a leading railcar parts manufacturer.
<TABLE>
<CAPTION>
HIGHWAY CONSTRUCTION PRODUCTS GROUP
(in millions)
1999 1998
-------- --------
<S> <C> <C>
Revenues $ 162.0 $ 153.6
Operating Profit $ 26.7 $ 25.8
Operating Profit Margin 16.5% 16.8%
</TABLE>
10
<PAGE> 13
Revenues in the Highway Construction Products Group increased $8.4
million, while operating profit increased $0.9 million. Increased revenues and
operating profit were primarily due to increased demand early in the year, which
decreased in the second half of the year. The Company believes delays by the
state government agencies in job lettings under the new federal highway spending
legislation affected demand.
<TABLE>
<CAPTION>
CONCRETE & AGGREGATE GROUP
(in millions)
1999 1998
--------- --------
<S> <C> <C>
Revenues $ 238.9 $ 198.7
Operating Profit $ 25.6 $ 21.1
Operating Profit Margin 10.7% 10.6%
</TABLE>
Revenues increased by $40.2 million, or 20.2% in the Concrete &
Aggregate Group, from $198.7 million in fiscal 1998 to $238.9 million in fiscal
1999. Operating profit increased by $4.5 million, or 21.3%. Better weather
conditions in fiscal 1999, internal expansion, and acquisitions contributed to
growth in concrete and aggregate revenues.
<TABLE>
<CAPTION>
INDUSTRIAL GROUP
(in millions)
1999 1998
-------- --------
<S> <C> <C>
Revenues $ 229.4 $ 316.2
Operating Profit $ 8.5 $ 33.3
Operating Profit Margin 3.7% 10.5%
</TABLE>
Revenues in the Industrial Group decreased from $316.2 million in
fiscal 1998 to $229.4 million in fiscal 1999, while operating profit decreased
from $33.3 million to $8.5 million. The decline in revenues was primarily due
to the sale of Beaird Industries, Inc. in the quarter ended June 30, 1998, along
with softness in fittings and flange and LPG products. The decline in operating
profit was attributable to the Beaird sale, continued price competition in the
fittings and flange business, primarily due to a weak energy sector and
increased imports as a result of the "Asian Crisis", and the mild winter and
fall which impacted demand and competition for LPG products.
ALL OTHER
Revenues in the All Other group decreased from $91.5 million in fiscal
1998 to $63.7 million in fiscal 1999, while operating profit increased 17.2%
from $8.7 million to $10.2 million in fiscal 1999. The decrease in revenues
reflected slightly weaker activity in some small, peripheral businesses.
LIQUIDITY & CAPITAL RESOURCES
Net cash provided by operating activities increased to $275.0 million
during fiscal 2000 from $176.4 million in fiscal 1999 primarily from working
capital improvements. Capital expenditures during fiscal 2000 were $174.0
million, of which $71.0 million was for additions to the lease fleet. This
compares to $208.3 million of capital expenditures in fiscal 1999, of which
$116.5 million was for additions to the lease fleet. Proceeds from the sale of
property, plant and equipment and other assets were $77.7 million in fiscal
2000, composed primarily of the sale of cars from the lease fleet, compared to
$178.7 million in fiscal 1999. The Company repurchased 2.9 million shares of its
common stock for $84.9 million in fiscal 2000. The Company has determined that
it may purchase additional shares from
11
<PAGE> 14
time to time in the open market and in negotiated transactions. Purchase of
additional shares will be based on market conditions and other relevant factors.
Future operating requirements are expected to be financed principally with net
cash flow from operations. Internally generated funds and short-term and
long-term debt will continue to be used to finance business acquisitions.
Capital expenditures and additions to Trinity's assets under lease are
anticipated to be financed through internally generated funds, the issuance of
equipment trust certificates, or similar debt instruments.
INFLATION
Changes in price levels did not significantly affect the Company's
operations in fiscal 2000, 1999, or 1998.
FORWARD LOOKING STATEMENTS
Any statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and involve risks and uncertainties. These
forward-looking statements include expectations, beliefs, plans, objectives,
future financial performance, estimates, projections, goals and forecasts.
Potential factors which could cause the Company's actual results of operations
to differ materially from those in the forward-looking statements include market
conditions and demand for the Company's products; competition; technologies;
steel prices; interest rates and capital costs; taxes; unstable governments and
business conditions in emerging economies; and legal, regulatory and
environmental issues. Any forward-looking statement speaks only as of the date
on which such statement is made. The Company undertakes no obligation to update
any forward-looking statement to reflect events or circumstances after the date
on which such statement is made.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's earnings are affected by changes in interest rates due to
the impact those changes have on the Company's variable-rate debt obligations,
which represented approximately 75% of its total debt as of March 31, 2000. If
interest rates average one percentage point more in fiscal 2001 than they did
during fiscal 2000, the Company's interest expense would increase by
approximately $1.7 million. In comparison, at March 31, 1999, the Company
estimated that if interest rates averaged one percentage point more in fiscal
2000 than they did in fiscal 1999, interest expense would have increased by
approximately $2.0 million. The impact of an increase in interest rates was
determined based on the impact of the hypothetical change in interest rates and
scheduled principal payments on the Company's variable-rate debt obligations as
of March 31, 2000 and 1999.
In addition, the Company is subject to market risk related to its net
investments in its foreign subsidiaries. The net investment in foreign
subsidiaries as of March 31, 2000 is $163.4 million. However, the impact of such
market risk exposures as a result of foreign exchange rate fluctuations has not
been material to the Company.
12
<PAGE> 15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
TRINITY INDUSTRIES INC.,
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors 14
Consolidated Income Statement for the years ended March 31, 2000,
1999, and 1998 15
Consolidated Balance Sheet as of March 31, 2000 and 1999 16
Consolidated Statement of Cash Flows for the years ended March 31,
2000, 1999, and 1998 17
Consolidated Statement of Stockholders' Equity for the years ended
March 31, 2000, 1999, and 1998 18
Notes to Consolidated Financial Statements 19 - 29
Selected Quarterly Financial Data (unaudited) for the years ended
March 31, 2000 and 1999 30
</TABLE>
13
<PAGE> 16
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, 2000 and 1999, and the related consolidated
statements of income, cash flows and stockholders' equity for each of the three
years in the period ended March 31, 2000. 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 auditing standards generally
accepted in the United States. These 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 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, 2000 and 1999, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
March 31, 2000, in conformity with accounting principles generally accepted in
the United States.
ERNST & YOUNG LLP
Dallas, Texas
May 16, 2000
14
<PAGE> 17
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
Year Ended March 31
(in millions except per share data) 2000 1999 1998
----------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Revenues $ 2,740.6 $ 2,926.9 $ 2,473.0
Operating costs:
Cost of revenues 2,278.2 2,472.8 2,054.0
Selling, engineering and administrative expenses 183.4 169.2 163.1
--------- --------- ---------
2,461.6 2,642.0 2,217.1
--------- --------- ---------
Operating profit 279.0 284.9 255.9
Other (income) expense:
Litigation settlement -- -- 70.0
Interest income (2.0) (4.5) (1.8)
Interest expense 20.4 20.4 20.9
Other, net (2.3) (27.4) 0.9
--------- --------- ---------
16.1 (11.5) 90.0
--------- --------- ---------
Income before income taxes 262.9 296.4 165.9
Provision for income taxes:
Current 84.4 106.9 53.3
Deferred 13.0 4.2 8.9
--------- --------- ---------
97.4 111.1 62.2
--------- --------- ---------
Net income $ 165.5 $ 185.3 $ 103.7
========= ========= =========
Net income per common share:
Basic $ 4.17 $ 4.31 $ 2.41
========= ========= =========
Diluted $ 4.15 $ 4.25 $ 2.36
========= ========= =========
Weighted average number of shares outstanding:
Basic 39.7 43.0 43.1
Diluted 39.9 43.6 43.9
</TABLE>
See accompanying notes to consolidated financial statements.
15
<PAGE> 18
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31
(in millions except per share data) 2000 1999
----------------------------------- --------- ---------
<S> <C> <C>
Assets
Cash and equivalents $ 16.9 $ 13.5
Receivables (net of allowance for doubtful accounts of
$1.7 in 2000 and $1.9 in 1999) 349.8 357.4
Inventories:
Raw materials and supplies 257.0 279.5
Work in process 37.5 42.5
Finished goods 66.1 75.1
-------- --------
360.6 397.1
Property, plant and equipment, at cost 1,304.9 1,213.6
Less accumulated depreciation (491.7) (481.3)
-------- --------
813.2 732.3
Other assets 198.0 184.6
-------- --------
$1,738.5 $1,684.9
======== ========
Liabilities and Stockholders' Equity
Short-term debt $ 170.1 $ 181.0
Accounts payable and accrued liabilities 360.9 366.7
Long-term debt 95.4 120.6
Deferred income taxes 58.5 34.0
Other liabilities 38.5 23.5
-------- --------
723.4 725.8
Stockholders' equity:
Common stock - par value $1 per share; authorized - 100.0 shares;
shares issued and outstanding in 2000 - 43.8; in 1999 - 43.7 43.8 43.7
Capital in excess of par value 295.1 292.6
Retained earnings 860.6 722.9
Accumulated other comprehensive income (19.8) (20.6)
Treasury stock (5.5 shares in 2000 and 2.4 shares in 1999) (164.6) (79.5)
-------- --------
1,015.1 959.1
-------- --------
$1,738.5 $1,684.9
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE> 19
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended March 31
(in millions) 2000 1999 1998
------------- ------- ------- -------
<S> <C> <C> <C>
Operating activities:
Net income $165.5 $185.3 $103.7
Adjustments to reconcile net income to net cash provided
(required) by operating activities:
Depreciation and amortization 80.3 72.0 73.0
Deferred income taxes 13.0 4.2 8.9
Gain on sale of property, plant and equipment and other assets (10.5) (24.6) (4.2)
Other 9.2 7.2 (1.1)
Changes in assets and liabilities, net of effects from acquisitions:
(Increase) decrease in receivables 17.4 45.3 (150.9)
(Increase) decrease in inventories 43.0 (47.9) (3.2)
(Increase) decrease in other assets 2.8 (13.9) (30.6)
Increase (decrease) in accounts payable and accrued liabilities (60.4) (53.0) 121.1
Increase in other liabilities 14.7 1.8 4.2
------ ------ ------
Total adjustments 109.5 (8.9) 17.2
------ ------ ------
Net cash provided by operating activities 275.0 176.4 120.9
Investing activities:
Proceeds from sale of property, plant and equipment and other assets 77.7 178.7 81.4
Capital expenditures (174.0) (208.3) (129.4)
Payment for purchase of acquisitions, net of cash acquired (25.6) (82.8) (60.2)
------ ------ ------
Net cash required by investing activities (121.9) (112.4) (108.2)
Financing activities:
Issuance of common stock 2.3 4.8 2.4
Stock repurchases (84.9) (79.5) --
Net borrowings (repayments) of short-term debt (10.9) 80.0 34.5
Payments to retire long-term debt (27.5) (29.5) (29.4)
Dividends paid (28.7) (29.4) (29.3)
------ ------ ------
Net cash required by financing activities (149.7) (53.6) (21.8)
------ ------ ------
Net increase (decrease) in cash and equivalents 3.4 10.4 (9.1)
Cash and equivalents at beginning of period 13.5 3.1 12.2
------ ------ ------
Cash and equivalents at end of period $ 16.9 $ 13.5 $ 3.1
====== ====== ======
</TABLE>
Interest paid in fiscal 2000, 1999, and 1998 was $20.7, $20.5 and $23.1,
respectively.
See accompanying notes to consolidated financial statements.
17
<PAGE> 20
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Common Capital
Shares Stock in
(in millions except share (100,000,000 $1.00 Excess of Retained
and per share data) Authorized) Par Value Par Value Earnings
------------ --------- --------- --------
<S> <C> <C> <C> <C>
Balance at March 31, 1997 43,046,365 $ 43.0 $ 280.5 $ 493.2
Net income -- -- -- 103.7
Currency translation
adjustments -- -- -- --
Comprehensive income
Cash dividends
($0.68 per share) -- -- -- (29.4)
Other 442,911 0.5 7.2 --
---------- -------- -------- --------
Balance at March 31, 1998 43,489,276 43.5 287.7 567.5
Net income -- -- -- 185.3
Currency translation
adjustments -- -- -- --
Comprehensive income
Cash dividends
($0.69 per share) -- -- -- (29.9)
Stock repurchases -- -- -- --
Other 216,360 0.2 4.9 --
---------- -------- -------- --------
BALANCE AT MARCH 31, 1999 43,705,636 43.7 292.6 722.9
NET INCOME -- -- -- 165.5
CURRENCY TRANSLATION
ADJUSTMENTS -- -- -- --
COMPREHENSIVE INCOME
CASH DIVIDENDS
($0.72 PER SHARE) -- -- -- (27.8)
STOCK REPURCHASES -- -- -- --
OTHER 90,715 0.1 2.5 --
---------- -------- -------- --------
BALANCE AT MARCH 31, 2000 43,796,351 $ 43.8 $ 295.1 $ 860.6
========== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Accumulated
Other Treasury Total
Comprehensive Treasury Stock Stockholders'
Income Shares At Cost Equity
------------- ------------ -------- -------------
<S> <C> <C> <C> <C>
Balance at March 31, 1997 $ (7.2) $ 809.5
Net Income -- 103.7
Currency translation
adjustments (4.0) (4.0)
--------
Comprehensive income
99.7
Cash dividends
($0.68 per share) -- (29.4)
Other -- 7.7
-------- ------------ -------- --------
Balance at March 31, 1998 (11.2) 887.5
Net income -- 185.3
Currency translation
adjustments (9.4) (9.4)
--------
Comprehensive income
175.9
Cash dividends
($0.69 per share) -- (29.9)
Stock repurchases -- (2,363,932) $ (79.5) (79.5)
Other -- -- -- 5.1
-------- ------------ -------- --------
BALANCE AT MARCH 31, 1999 (20.6) (2,363,932) (79.5) 959.1
NET INCOME -- -- -- 165.5
CURRENCY TRANSLATION
ADJUSTMENTS 0.8 -- -- 0.8
--------
COMPREHENSIVE INCOME
166.3
CASH DIVIDENDS
($0.72 PER SHARE) -- -- -- (27.8)
STOCK REPURCHASES -- (2,941,839) (84.9) (84.9)
OTHER -- (149,972) (0.2) 2.4
-------- ------------ -------- --------
BALANCE AT MARCH 31, 2000 $ (19.8) (5,455,743) $ (164.6) $1,015.1
======== ============ ======== ========
</TABLE>
The Company has authorized and unissued 1,500,000 shares of no par value voting
preferred stock.
See accompanying notes to consolidated financial statements.
18
<PAGE> 21
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.
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 control procedures to monitor the
credit worthiness of customers, 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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Inventories and investments are valued at the lower of cost or market,
with cost 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, generally 2 to
30 years. The costs of ordinary maintenance and repair are charged to expense
while renewals and major replacements are capitalized.
Diluted net income per common share is 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. Basic net income per common
share is based on the weighted average number of common shares outstanding for
the period. The numerator for both basic net income per common share and diluted
net income per common share is net income. The difference between the
denominator in the basic calculation and the denominator in the diluted
calculation is attributable to the effect of employee stock options.
The Company generally recognizes revenue when products are shipped or
services are provided. Revenues for contracts providing for a large number of
units and few deliveries are recorded as units are produced.
In fiscal 1999, Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities," was issued.
Adoption of this Statement is currently proposed to be effective for fiscal
years beginning after June 15, 2000. The Company does not expect that the
adoption of this Statement will have a material impact on its financial
statements.
Certain reclassifications have been made to prior year statements to
conform to the current year presentation.
19
<PAGE> 22
SEGMENT INFORMATION
Trinity manufactures, sells and leases a wide variety of products
principally in the following segments or groups: (1) the Railcar Group, which
manufactures and sells railcars; (2) the Inland Barge Group, consisting of
barges and related products for inland waterway services; (3) the Parts &
Services Group, which manufactures and sells various parts to manufacturers of
railcars and other industrial products and provides services such as railcar
maintenance, fleet management, and leasing; (4) the Highway Construction
Products Group, consisting primarily of highway guardrail and safety products,
and girders, and beams used in the construction of highway and railway bridges;
(5) the Concrete & Aggregate Group, composed of ready-mix concrete and
aggregate; and (6) the Industrial Group, which manufactures and sells
containers, weld fittings (tees, elbows, reducers, caps and flanges) used in
pressure piping systems, and pressure and non-pressure containers for the
storage and transportation of liquefied gases and other liquid and dry products.
Finally, All Other includes transportation services, the Company's captive
insurance company, and other peripheral businesses.
The financial information for these segments is shown in the table
below. The Company operates principally in the continental United States,
Mexico, Romania, Argentina, and Brazil. Intersegmental sales are at market
prices.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, 2000
(IN MILLIONS) REVENUES
------------------------------------ OPERATING
PROFIT DEPRECIATION & CAPITAL
OUTSIDE INTERSEGMENT TOTAL (LOSS) ASSETS AMORTIZATION EXPENDITURES
--------- ------------ -------- --------- -------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
RAILCAR GROUP $1,515.3 $ 5.9 $1,521.2 $167.9 $ 443.3 $ 12.8 $ 19.4
INLAND BARGE GROUP 205.4 -- 205.4 26.8 63.7 5.4 1.5
PARTS & SERVICES GROUP 305.1 121.5 426.6 72.6 562.9 23.4 92.4
HIGHWAY CONSTRUCTION PRODUCTS GROUP 193.8 -- 193.8 35.3 94.6 2.8 4.8
CONCRETE & AGGREGATE GROUP 251.8 -- 251.8 26.0 139.5 19.4 23.0
INDUSTRIAL GROUP 218.1 1.3 219.4 15.1 133.4 5.0 8.7
ALL OTHER 51.1 61.9 113.0 3.1 48.3 6.5 7.8
ELIMINATIONS & CORPORATE ITEMS -- -- (190.6) (67.8) 252.8 5.0 16.4
-------- ------ -------- ------ -------- ------ ------
CONSOLIDATED TOTAL $2,740.6 $279.0 $1,738.5 $ 80.3 $174.0
======== ====== ======== ====== ======
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, 1999
(in millions) REVENUES
-------------------------------- OPERATING
PROFIT DEPRECIATION & CAPITAL
OUTSIDE INTERSEGMENT TOTAL (LOSS) ASSETS AMORTIZATION EXPENDITURES
-------- ------------ -------- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Railcar Group $1,694.0 $ 6.9 $1,700.9 $172.9 $ 489.5 $ 12.5 $ 30.0
Inland Barge Group 196.4 -- 196.4 13.4 75.4 6.4 1.0
Parts & Services Group 342.5 155.6 498.1 87.2 558.6 20.8 134.7
Highway Construction Products Group 162.0 -- 162.0 26.7 99.2 3.3 2.1
Concrete & Aggregate Group 238.9 -- 238.9 25.6 118.5 18.5 15.6
Industrial Group 229.4 1.4 230.8 8.5 89.6 2.0 7.2
All Other 63.7 64.9 128.6 10.2 31.5 5.5 6.6
Eliminations & Corporate Items -- -- (228.8) (59.6) 222.6 3.0 11.1
-------- ------ -------- ------ -------- ------ ------
Consolidated Total $2,926.9 $284.9 $1,684.9 $ 72.0 $208.3
======== ====== ======== ====== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, 1998
(in millions) REVENUES
-------------------------------- OPERATING
PROFIT DEPRECIATION & CAPITAL
OUTSIDE INTERSEGMENT TOTAL (LOSS) ASSETS AMORTIZATION EXPENDITURES
-------- ------------ -------- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Railcar Group $1,095.7 $ 9.3 $1,105.0 $113.9 $ 403.0 $ 11.6 $ 23.8
Inland Barge Group 335.2 -- 335.2 31.5 100.9 7.4 2.3
Parts & Services Group 282.1 81.6 363.7 77.8 499.9 19.9 74.3
Highway Construction Products Group 153.6 -- 153.6 25.8 90.5 3.6 0.7
Concrete & Aggregate 198.7 -- 198.7 21.1 112.6 17.2 8.4
Industrial Group 316.2 3.0 319.2 33.3 204.3 5.1 3.4
All Other 91.5 56.0 147.5 8.7 31.3 5.8 8.7
Eliminations & Corporate Items -- -- (149.9) (56.2) 131.4 2.4 7.8
-------- ------ -------- ------ -------- ------ ------
Consolidated Total $2,473.0 $255.9 $1,573.9 $ 73.0 $129.4
======== ====== ======== ====== ======
</TABLE>
21
<PAGE> 24
Total revenues from external customers attributed to foreign operations
for fiscal 2000, 1999, and 1998 are $72.0 million, $42.6 million, and $55.3
million, respectively. The Railcar Group includes revenues from one customer
which accounted for 12.6 percent, 9.9 percent, and 10.1 percent of consolidated
revenues in fiscal 2000, 1999, and 1998, respectively. Long-lived assets located
outside the United States in fiscal 2000, 1999, and 1998 are $110.2 million,
$52.6 million, and $30.8 million, respectively.
Corporate assets are composed of cash and equivalents, notes
receivable, land held for investment, certain property, plant and equipment, and
other assets. Capital expenditures do not include business acquisitions.
Segment operating profit excludes administrative overhead of the
corporate office and certain shared services of the businesses, which are
included in Eliminations & Corporate Items.
ACQUISITIONS
The Company made certain acquisitions during fiscal 2000, 1999, and
1998 accounted for by the purchase method. The aggregate purchase price for
these acquisitions was $87.4 million, $104.4 million, and $70.8 million,
respectively. Goodwill, which is included in other assets and amortized over
periods ranging from 10 to 30 years, of $9.3 million and $65 million was
recorded on the 2000 and 1999 acquisitions, respectively. The acquired
operations have been included in the consolidated financial statements from the
effective dates of the acquisitions. Proforma results would not have been
materially different from actual results for any year presented.
STOCK PLANS
The Company's 1998 Stock Option and Incentive Plan provides for
awarding 2,000,000 shares of common stock plus shares covered by forfeited,
expired, and canceled options granted under prior plans for a total of 1,480,827
shares available for issuance at March 31, 2000, with a maximum of 600,000
shares being available for issuance as restricted stock or in satisfaction of
performance or other awards. The plan provides for the granting of: nonqualified
and incentive stock options having maximum ten-year terms to purchase common
stock at its market value on the award date; stock appreciation rights based on
common stock fair market values with settlement in common stock or cash;
restricted stock; and performance awards with settlement in common stock or cash
on achievement of specific business objectives. Under previous plans,
nonqualified and incentive stock options and restricted shares were granted at
their fair market values. One grant provided for granting reload options for the
remaining term of the original grant at the common stock market value on the
date shares already owned by the optionee are surrendered in payment of the
option exercise price. Options become exercisable in various percentages over
periods ranging up to eight years.
22
<PAGE> 25
<TABLE>
<CAPTION>
Year Ended March 31
------------------------------------------------------------------------------
2000 1999 1998
------------------------ ------------------------ ------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding beginning of year 2,059,983 $ 29.81 1,982,495 $ 26.01 1,962,722 $ 26.72
Halter property distribution -- -- -- -- 499,369 --
Granted 636,306 30.06 414,663 39.76 389,218 46.44
Exercised (147,309) 21.02 (314,453) 18.73 (554,357) 20.78
Canceled (22,144) 36.32 (22,722) 33.26 (314,457) 23.63
---------- ---------- ---------- ---------- ---------- ----------
Outstanding end of year 2,526,836 30.33 2,059,983 29.81 1,982,495 26.01
========== ========== ========== ========== ========== ==========
Exercisable 1,319,168 28.32 961,903 23.92 967,973 19.34
========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
March 31, 2000
-----------------------------------------------------------------------------
Outstanding Options
---------------------------------------------
Weighted Average Exercisable Options
----------------------------- -----------------------------
Remaining Weighted
Contractual Exercise Average
Exercise Price Range Shares Life (Years) Price Shares Price
-------------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$13.22 - $23.91 633,578 2.2 $ 18.82 532,116 $ 18.35
24.50 - 29.29 515,531 6.6 25.62 313,664 25.65
29.44 - 38.81 738,164 8.4 30.63 182,226 32.86
39.31 - 53.81 639,563 7.9 45.18 291,162 46.58
------------- ------------- ------------- ------------- -------------
$13.22 - $53.81 2,526,836 6.3 30.33 1,319,168 28.32
============= ============= ============= ============= =============
</TABLE>
In connection with the Halter property distribution, outstanding stock
options were adjusted to preserve their economic value.
23
<PAGE> 26
The Company has elected to apply the accounting provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and its Interpretations and, accordingly, no compensation cost has
been recorded for stock options. The effect of computing compensation cost in
accordance with Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation," and the weighted average fair value of options
granted during 2000, 1999, and 1998 using the Black-Scholes option pricing
method is shown in the accompanying table.
<TABLE>
<CAPTION>
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Estimated fair value per
share of options granted $ 9.10 $ 15.49 $ 17.72
Pro forma:
Net income (millions) $ 162.1 $ 183.1 $ 102.7
Per diluted share $ 4.06 $ 4.20 $ 2.34
Black-Scholes assumptions:
Expected option life
(years) 5.7 6.7 6.5
Risk-free interest rate 6.10% 6.00% 7.05%
Dividend yield 3.10% 1.82% 1.56%
Common stock volatility 0.328 0.393 0.283
</TABLE>
<TABLE>
<CAPTION>
RESTRICTED STOCK
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Shares awarded 50,000 42,000 24,000
Grant date fair value
per share $ 27.94 $ 39.04 $ 53.00
Outstanding at March 31 131,500 81,500 40,500
</TABLE>
DEBT
<TABLE>
<CAPTION>
LONG-TERM DEBT March 31
(in millions) 2000 1999
------ ------
<S> <C> <C>
3.0-9.25 percent industrial development revenue bonds
payable in varying amounts through 2005 $ 1.6 $ 2.0
6.0-6.46 percent promissory notes, generally payable
annually through 2008 28.2 30.0
6.96-9.44 percent equipment trust certificates to
institutional investors generally payable in semi-annual
installments of varying amounts through 2003 57.4 81.4
8.0-11.3 percent notes payable monthly through 2003 8.2 7.2
------ ------
$ 95.4 $120.6
====== ======
</TABLE>
24
<PAGE> 27
The fair value of non-traded, fixed-rate outstanding debt, estimated
using discounted cash flow analysis, approximates its carrying value. Principal
payments due during the next five years are: 2001 - $55.5; 2002 - $25.9; 2003 -
$11.5; 2004 - $1.9; and 2005 - $0.2.
The trustees of the equipment trusts have been assigned title to
railcars with a net book value of $130.3 at March 31, 2000 for the life of the
respective equipment trusts. Leases relating to such railcars financed by
equipment trust certificates have been assigned as collateral.
SHORT-TERM DEBT
Short-term debt primarily consists of money market borrowings,
generally due within 30 days, with interest rates ranging from 5.21% to 6.74% in
2000 and 5.21% to 5.76% in 1999.
<TABLE>
<CAPTION>
PROPERTY, PLANT AND EQUIPMENT March 31
(in millions) 2000 1999
-------- --------
<S> <C> <C>
Land $ 51.0 $ 38.6
Buildings and improvements 261.0 226.8
Machinery 528.6 487.5
Equipment on lease 429.0 428.4
Construction in progress 35.3 32.3
-------- --------
$1,304.9 $1,213.6
======== ========
</TABLE>
Equipment on lease consists primarily of railcars leased by the Company
to third parties. The Company enters into lease contracts with third parties
with terms generally ranging between one and fifteen years, wherein equipment
manufactured by Trinity is leased for a specified type of service over the term
of the contract. The Company enters primarily into operating leases. Future
minimum rental revenues on leases in each fiscal year are: 2001 - $56.2; 2002 -
$49.3; 2003 - $41.8; 2004 - $35.5; 2005 - $27.3; and $112.6 thereafter.
25
<PAGE> 28
INCOME TAXES
(in millions except percent data)
The components of the provision for income taxes are:
<TABLE>
<CAPTION>
Year Ended March 31
2000 1999 1998
------ ------ ------
<S> <C> <C> <C>
Current:
Federal $ 78.5 $ 96.2 $ 48.0
State 5.2 10.7 5.3
Foreign 0.7 -- --
------ ------ ------
84.4 106.9 53.3
Deferred 13.0 4.2 8.9
------ ------ ------
Total $ 97.4 $111.1 $ 62.2
====== ====== ======
</TABLE>
Deferred income taxes represent the tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The components
of deferred tax liabilities and assets are:
<TABLE>
<CAPTION>
March 31
2000 1999
------- -------
<S> <C> <C>
Deferred tax liabilities:
Depreciation $ 78.3 $ 72.8
Deductions related to inventory and
other assets of foreign operations 7.4 7.9
Other 8.6 --
------- -------
94.3 80.7
Deferred tax assets:
Pensions and other benefits 34.2 33.1
Accounts receivable, inventory, and other
asset valuation accounts 1.6 8.6
Other -- 5.0
------- -------
Total deferred tax assets 35.8 46.7
------- -------
Net deferred tax liabilities $ 58.5 $ 34.0
======= =======
</TABLE>
The provision for income taxes results in effective tax rates different
from the statutory rates. The following is a reconciliation between the
statutory U.S. federal income tax rate and the Company's effective income tax
rate:
<TABLE>
<CAPTION>
Year Ended March 31
2000 1999 1998
------ ------ ------
<S> <C> <C> <C>
Statutory rate 35.0% 35.0% 35.0%
State taxes 1.3 2.4 2.1
Other (net) 0.8 0.1 0.4
------ ------ ------
Effective tax rate 37.1% 37.5% 37.5%
====== ====== ======
</TABLE>
26
<PAGE> 29
In fiscal 2000, 1999, and 1998, income taxes of $85.2, $111.6, and
$33.6, respectively, were paid net of refunds received. Income before income
taxes for fiscal 2000, 1999, and 1998 was $252.9, $287.2, and $159.5,
respectively, for U.S. operations, and $10.0, $9.2, and $6.4, respectively, for
foreign operations. The Company has not provided U.S. deferred income taxes on
the undistributed earnings of its foreign subsidiaries based on the
determination that such earnings will be indefinitely reinvested. Undistributed
earnings of the Company's foreign subsidiaries were $29.1 as of March
31, 2000.
27
<PAGE> 30
EMPLOYEE RETIREMENT PLANS
(in millions except percent data)
The Company sponsors defined benefit pension and defined contribution
profit sharing plans which provide income and death benefits for eligible
employees.
<TABLE>
<CAPTION>
Year Ended March 31
2000 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
Actuarial Assumptions
Obligation discount rate 8.25% 7.25% 7.25%
Compensation increase rate 4.75% 4.75% 4.75%
Long-term rate of return on plan assets 9% 9% 9%
Expense Components
Service cost $ 13.5 $ 11.4 $ 12.5
Interest 12.9 11.2 10.5
Expected return on assets (14.3) (13.1) (10.2)
Amortization and deferral (0.1) (0.1) --
Profit sharing 4.2 5.3 4.5
------------- ------------- -------------
Net expense $ 16.2 $ 14.7 $ 17.3
============= ============= =============
Benefit Obligations
Beginning of year $ 163.2 $ 156.1 $ 127.5
Service cost 13.5 11.4 12.5
Interest 12.9 11.2 10.5
Benefits paid (5.0) (6.1) (6.9)
Actuarial (gain) loss (20.6) (3.5) 12.5
Sale of Beaird Industries, Inc. -- (5.9) --
------------- ------------- -------------
End of year $ 164.0 $ 163.2 $ 156.1
============= ============= =============
Under funded plans $ 6.1 $ 147.9 $ 20.4
Over funded plans 157.9 15.3 135.7
============= ============= =============
Plans' Assets
Beginning of year $ 160.0 $ 153.4 $ 114.3
Actual return on assets 11.4 12.3 33.3
Employer contributions 2.7 5.1 12.7
Benefits paid (5.0) (6.1) (6.9)
Sale of Beaird Industries, Inc. -- (4.7) --
------------- ------------- -------------
End of year $ 169.1 $ 160.0 $ 153.4
============= ============= =============
Under funded plans $ -- $ 140.4 $ 13.2
Over funded plans 169.1 19.6 140.2
============= ============= =============
Consolidated Balance Sheet Components
Funded status $ (5.1) $ 3.2 $ 2.7
Unamortized transition obligation 1.4 1.6 1.9
Unrecognized prior service cost (1.1) (1.1) (1.4)
Unrecognized loss (gain) 14.4 (3.4) (5.9)
------------- ------------- -------------
Net obligation (asset) $ 9.6 $ 0.3 $ (2.7)
============= ============= =============
Accrued $ 14.5 $ 5.6 $ 5.7
Prepaid 4.9 5.3 8.4
------------- ------------- -------------
Net accrued (prepaid) $ 9.6 $ 0.3 $ (2.7)
============= ============= =============
</TABLE>
28
<PAGE> 31
CONTINGENCIES
In September 1997, the Company settled a 13 year-old lawsuit brought
against a former subsidiary of the Company by Morse/Diesel, Inc. The settlement
resulted in an after-tax charge of $43.8 million being recorded in fiscal 1998.
The Company has not participated in the business associated with this matter
since 1989. In April 1998, the Company settled a 5 year-old patent infringement
lawsuit brought by Johnstown America Corp. for $10.5 million, net of tax.
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 effect on the Company's consolidated
financial statements.
STOCKHOLDER'S RIGHTS PLAN
The Company has adopted a Stockholder's Rights Plan to replace its
existing plan which expired April 27, 1999. On March 11, 1999, the Board of
Directors of the Company declared a dividend distribution of one right for each
outstanding share of the Company's common stock, $1.00 par value, to
stockholders of record at the close of business on April 27, 1999. Each right
entitles the registered holder to purchase from the Company one one-hundredth
(1/100) of a share of Series A Preferred Stock at a purchase price of $200.00
per one one-hundredth (1/100) of a share, subject to adjustment. The rights are
not exercisable or detachable from the common stock until ten business days
after a person acquires beneficial ownership of twelve 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
twelve percent or more of the common stock. The Company will generally be
entitled to redeem the rights at $0.01 per right at any time until the first
public announcement that a twelve percent position has been acquired. If any
person becomes a beneficial owner of twelve percent or more of the Company's
common stock, each right not owned by that person or related parties enables its
holder to purchase, at the right's purchase price, shares of the Company's
common stock having a calculated value of twice the purchase price of the right.
29
<PAGE> 32
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(in millions except per share data)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED MARCH 31, 2000:
REVENUES $ 693.4 700.0 700.8 646.4 2,740.6
OPERATING PROFIT $ 77.4 76.9 68.8 55.9 279.0
NET INCOME $ 45.0 46.3 40.3 33.9 165.5
NET INCOME PER COMMON SHARE:
BASIC $ 1.11 1.17 1.03 0.87 4.17
DILUTED $ 1.10 1.16 1.02 0.87 4.15
Year ended March 31, 1999:
Revenues $ 711.5 717.4 722.9 775.1 2,926.9
Operating profit $ 74.1 74.7 69.7 66.4 284.9
Net income (1) $ 57.8 44.8 41.8 40.9 185.3
Net income per common share: (1)
Basic $ 1.33 1.03 0.97 0.97 4.31
Diluted $ 1.31 1.02 0.96 0.96 4.25
</TABLE>
(1) Results for the first quarter of fiscal 1999 included a non-recurring
net-of-tax gain of $13.8 million, or 32 cents a diluted share. Excluding this
net gain, net income would have been $171.5 million, or $3.93 a diluted share in
fiscal 1999.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS OF THE REGISTRANT.
Information concerning the directors of the Registrant is incorporated
herein by reference from the Registrant's proxy statement dated June 19, 2000
for the 2000 Annual Meeting of Stockholders, beginning on page 4, under the
heading "Nominees".
30
<PAGE> 33
EXECUTIVE OFFICERS OF THE REGISTRANT.*
The following table sets forth the names and ages of all executive
officers of the Registrant, 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:
<TABLE>
<CAPTION>
Officer Term
Name(1) Age Office Since Expires
---- --- ------------------------------ ------ ----------
<S> <C> <C> <C> <C>
Timothy R. Wallace 46 Chairman & Chief 1993 July 2000
Executive Officer
John L. Adams 55 Executive Vice President 1999 July 2000
Mark W. Stiles 51 Senior Vice President 1993 July 2000
Jim S. Ivy 56 Vice President & 1998 July 2000
Chief Financial Officer
John R. Nussrallah 53 Group President 2000 July 2000
Douglas H. Schneider 61 Group President 2000 July 2000
Jack L. Cunningham, Jr. 55 Vice President, Labor 1982 July 2000
Relations
Michael G. Fortado 56 Vice President, General 1997 July 2000
Counsel, & Secretary
Graceanna Jones 50 Vice President, 2000 July 2000
Communications
John M. Lee 39 Vice President, Business 1994 July 2000
Development
Michael J. Lintner 57 Vice President, Human 1999 July 2000
Resources
William A. McWhirter, II 36 Vice President, Mergers 2000 July 2000
& Acquisitions, President
Concrete & Aggregate
Joseph F. Piriano 63 Vice President, Purchasing 1992 July 2000
Linda S. Sickels 49 Vice President, Government 1995 July 2000
Relations
Neil O. Shoop 56 Treasurer 1985 July 2000
Christine Stucker 38 Controller 1999 July 2000
</TABLE>
* 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) Mr. Adams joined the Registrant in 1999. Prior to this year, Mr. Adams
served as chief executive officer for a national financial institution. Mr.
Ivy joined the Registrant in 1998. Prior to that, Mr. Ivy was a senior
audit partner for a national public accounting firm. Mr. Fortado joined the
Registrant in 1997. Prior to that, Mr. Fortado served one year as senior
vice president, general counsel, and corporate secretary for an oil and gas
exploration company and prior to that as vice president, corporate
secretary, and assistant general counsel for an integrated energy company.
Mr. Nussrallah joined the Registrant in 1994. Mr. Nussrallah was designated
as an executive officer in fiscal 2000 and has held the position of Group
President in the railcar segment for at least the last five years. Mr.
Schneider joined the Registrant in 1995. Mr. Schneider was designated as an
executive officer in fiscal 2000 and has held the position of Group
President of Inland Barge for at least the last five years. Ms. Jones
joined the Registrant in 1999. Prior to this year, Ms. Jones held various
senior level positions with an oilfield services company. Mr. Lintner
joined the Registrant in 1999. Prior to this year, Mr. Lintner held
executive officer positions with administrative outsourcing and
professional staffing businesses. Mr. McWhirter joined the Registrant in
1985. Prior to this year, he served as President of the Transit Mix
Division, a post which he still holds. Ms. Stucker joined the Registrant in
1985. Prior to this year, Ms. Stucker
31
<PAGE> 34
served as an officer of various operational divisions. All of the other
above-mentioned executive officers 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 except for Timothy R. Wallace and Mark W. Stiles. Mr.
Wallace became Chairman and Chief Executive Officer on December 31,
1998. He was previously the President and Chief Operating Officer. In
addition to Group President, Mr. Stiles became Senior Vice President on
June 10, 1999.
ITEM 11. EXECUTIVE COMPENSATION.
Information on executive compensation is incorporated herein by
reference from the Registrant's proxy statement dated June 19, 2000 for the 2000
Annual Meeting of Stockholders, beginning on page 8, under the heading
"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 proxy
statement dated June 19, 2000 for the 2000 Annual Meeting of Stockholders,
beginning on page 2, under the heading "Voting Securities and Stockholders".
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
No form 8-K was filed in fiscal 2000.
32
<PAGE> 35
Report of Independent Auditors
The Board of Directors and Stockholders
Trinity Industries, Inc.
We have audited the consolidated financial statements of Trinity Industries,
Inc. as of March 31, 2000 and 1999, and for each of the three years in the
period ended March 31, 2000, and have issued our report thereon dated May 16,
2000. 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.
ERNST & YOUNG LLP
Dallas, Texas
May 16, 2000
33
<PAGE> 36
SCHEDULE II
Trinity Industries, Inc.
Allowance for Doubtful Accounts
Years Ended March 31, 2000, 1999 and 1998
(in millions)
<TABLE>
<CAPTION>
Additions
Balance at charged to Accounts Balance
beginning costs and charged at end
of year expenses off of year
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Year Ended March 31, 2000 $ 1.9 $ 0.7 $ 0.9 $ 1.7
=============== =============== =============== ===============
Year Ended March 31, 1999 $ 1.7 $ 0.7 $ 0.5 $ 1.9
=============== =============== =============== ===============
Year Ended March 31, 1998 $ 1.0 $ 0.9 $ 0.2 $ 1.7
=============== =============== =============== ===============
</TABLE>
34
<PAGE> 37
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. By /s/ Michael G. Fortado
------------------------ ------------------------
Registrant Michael G. Fortado
Vice President,
General Counsel, and
Secretary
June 7, 2000
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: Directors (continued)
/s/ David W. Biegler
-------------------------------- --------------------------------
David W. Biegler Diana Natalicio
Director Director
June 7, 2000 June 7, 2000
/s/ Ronald J. Gafford /s/ W. Ray Wallace
-------------------------------- --------------------------------
Ronald J. Gafford W. Ray Wallace
Director Director
June 7, 2000 June 7, 2000
--------------------------------
Barry J. Galt
Director
June 7, 2000 Principal Executive Officer:
/s/ Clifford J. Grum /s/ Timothy R. Wallace
-------------------------------- --------------------------------
Clifford J. Grum Timothy R. Wallace
Director Chairman
June 7, 2000 June 7, 2000
/s/ Dean P. Guerin
--------------------------------
Dean P. Guerin
Director
June 7, 2000 Principal Financial Officer:
/s/ Jess T. Hay /s/ Jim S. Ivy
-------------------------------- --------------------------------
Jess T. Hay Jim S. Ivy
Director Vice President
June 7, 2000 June 7, 2000
Principal Accounting Officer:
/s/ Edmund M. Hoffman /s/ John M. Lee
-------------------------------- --------------------------------
Edmund M. Hoffman John M. Lee
Director Vice President
June 7, 2000 June 7, 2000
35
<PAGE> 38
Trinity Industries, Inc.
Index to Exhibits
(Item 14(a))
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ---------------------------------------------------------------------
<S> <C> <C>
(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
(4.1) Specimen Common Stock Certificate of Registrant (incorporated by
reference to Exhibit 4.1 to the registrant's Annual Report on Form 10K
for the fiscal year ended March 31, 1999).
(4.2) Rights Agreement dated March 31, 1999 (incorporated by reference to
Form 8-K filed March 31, 1999).
(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, as amended, entered into between
the Registrant and executive officers of the Registrant (incorporated
by reference to Exhibit 10.3 to the registrant's Annual Report on Form
10K for the fiscal year ended March 31, 1999). *
(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, as amended by
Amendment No. 1 dated September 10, 1998 (incorporated by reference to
Exhibit 10.5 to the registrant's Annual Report on Form 10K for the
fiscal year ended March 31, 1999). *
(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) 1993 Stock Option and Incentive Plan (incorporated by reference to
Registration Statement No. 33-73026 filed December 15, 1993). *
</TABLE>
36
<PAGE> 39
Trinity Industries, Inc.
Index to Exhibits -- (Continued)
(Item 14(a))
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ---------------------------------------------------------------------
<S> <C> <C>
(10.8) Supplemental Profit Sharing Plan for Employees of Trinity Industries
Inc. and Certain Affiliates as restated effective January 1, 2000. *
(10.9) Supplemental Profit Sharing and Deferred Director Fee Trust dated March
31, 1999 (incorporated by reference to Exhibit 10.10 to the
registrant's Annual Report on Form 10K for the fiscal year ended March
31, 1999). *
(10.10) Supplemental Retirement Plan dated April 1, 1995, as amended by
Amendment No. 1 dated September 14, 1995 and Amendment No. 2 dated May
6, 1997 (incorporated by reference to Exhibit 10.11 to the registrant's
Annual Report on Form 10K for the fiscal year ended March 31, 1999). *
(10.11) Deferred Plan for Director Fees dated July 17, 1996, as amended by
Amendment No. 1 dated September 10, 1998 (incorporated by reference to
Exhibit 10.12 to the registrant's Annual Report on Form 10K for the
fiscal year ended March 31, 1999). *
(10.12) Trinity Industries, Inc. 1998 Stock Option and Incentive Plan
(incorporated by reference to Registration Statement No. 333-77735
filed May 4, 1999). *
(10.13) Form of Deferred Compensation Plan and Agreement entered into between
Trinity Industries, Inc. and certain officers of the Registrant
(incorporated by reference to Exhibit 10.14 to the registrant's Annual
Report on Form 10K for the fiscal year ended March 31, 1999). *
(10.14) Consulting agreement between the Registrant and W. R. Wallace effective
January 1, 1999. *
(21) Listing of subsidiaries of the Registrant.
(23) Consent of Independent Auditors.
(27) Financial Data Schedules for the fiscal year ended March 31, 2000.
</TABLE>
*Management contracts and compensatory plan arrangements.
NOTICE: Exhibits 3.2, 10.8, 10.14, 21, and 27 have been omitted from the
reproduction of this Form 10-K. A copy of the Exhibits will be furnished upon
written request to Graceanna Jones, Vice President, Communications, Trinity
Industries, Inc., P.O. Box 568887, Dallas, Texas 75356-8887. The Registrant may
impose a reasonable fee for its expenses in connection with providing the
above-referenced Exhibits.
37
