e10vq
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
 
(Mark One)
     
þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008
OR
     
o   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
     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 þ     No o.
      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
             
     Large accelerated filer þ    Accelerated filer o    Non-accelerated filer   o
(Do not check if a smaller reporting company)
  Smaller reporting company o 
     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No þ.
     At October 24, 2008 there were 79,535,316 shares of the Registrant’s common stock outstanding.
 
 

 


 

TRINITY INDUSTRIES, INC.
FORM 10-Q
TABLE OF CONTENTS
         
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CERTIFICATIONS
       
 EX-10.1.1
 EX-10.7
 EX-10.11.3
 EX-10.11.4
 EX-10.27
 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2

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Table of Contents

PART I
Item 1. Financial Statements
Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
    (unaudited)  
    (in millions, except per share amounts)  
Revenues
  $ 1,154.6     $ 1,008.4     $ 2,999.0     $ 2,729.5  
Operating costs:
                               
Cost of revenues
    928.8       804.9       2,375.8       2,194.5  
Selling, engineering, and administrative expenses
    62.8       56.6       184.0       168.3  
 
                       
 
    991.6       861.5       2,559.8       2,362.8  
 
                       
Operating profit
    163.0       146.9       439.2       366.7  
 
                               
Other (income) expense:
                               
Interest income
    (1.3 )     (2.5 )     (4.6 )     (8.8 )
Interest expense
    25.6       19.5       71.4       55.8  
Other, net
    (1.1 )     (3.6 )     (14.4 )     (14.5 )
 
                       
 
    23.2       13.4       52.4       32.5  
 
                       
Income from continuing operations before income taxes
    139.8       133.5       386.8       334.2  
 
                               
Provision for income taxes
    48.3       46.3       144.1       118.9  
 
                       
 
                               
Income from continuing operations
    91.5       87.2       242.7       215.3  
 
                               
Discontinued operations:
                               
Loss from discontinued operations, net of benefit for income taxes of $(0.1), $(0.1), $(0.2), and $(0.2)
    (1.4 )     (0.2 )     (1.7 )     (0.5 )
 
                       
 
                               
Net income
  $ 90.1     $ 87.0     $ 241.0     $ 214.8  
 
                       
 
                               
Net income per common share:
                               
Basic:
                               
Continuing operations
  $ 1.16     $ 1.10     $ 3.07     $ 2.73  
Discontinued operations
    (0.02 )           (0.02 )      
 
                       
 
  $ 1.14     $ 1.10     $ 3.05     $ 2.73  
 
                       
 
                               
Diluted:
                               
Continuing operations
  $ 1.14     $ 1.08     $ 3.01     $ 2.67  
Discontinued operations
    (0.02 )           (0.02 )      
 
                       
 
  $ 1.12     $ 1.08     $ 2.99     $ 2.67  
 
                       
 
                               
Weighted average number of shares outstanding:
                               
Basic
    79.1       79.1       79.0       78.8  
Diluted
    80.4       80.6       80.5       80.5  
 
                               
Dividends declared per common share
  $ 0.08     $ 0.07     $ 0.23     $ 0.19  
See accompanying notes to consolidated financial statements.

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Table of Contents

Trinity Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
                 
    September 30,     December 31,  
    2008     2007  
    (unaudited)     (as reported)  
    (in millions)  
Assets
               
Cash and cash equivalents
  $ 183.2     $ 289.6  
 
               
Receivables, net of allowance
    353.6       296.5  
 
               
Inventories:
               
Raw materials and supplies
    384.1       302.6  
Work in process
    126.4       127.3  
Finished goods
    171.7       156.8  
 
           
 
    682.2       586.7  
 
               
Property, plant, and equipment, at cost
    3,471.8       2,849.6  
Less accumulated depreciation
    (800.0 )     (779.8 )
 
           
 
    2,671.8       2,069.8  
 
               
Goodwill
    504.0       503.5  
 
               
Assets held for sale and discontinued operations
    1.5       3.6  
 
               
Other assets
    331.3       293.5  
 
           
 
  $ 4,727.6     $ 4,043.2  
 
           
 
               
Liabilities and Stockholders’ Equity
               
 
               
Accounts payable and accrued liabilities
  $ 631.2     $ 684.3  
 
               
Debt:
               
Recourse
    715.9       730.3  
Non-recourse
    1,044.8       643.9  
 
           
 
    1,760.7       1,374.2  
 
               
Deferred income
    69.6       58.4  
 
               
Deferred income taxes
    271.4       142.1  
 
               
Liabilities held for sale and discontinued operations
    1.5       1.2  
 
               
Other liabilities
    65.1       56.3  
 
           
 
    2,799.5       2,316.5  
 
               
Stockholders’ equity:
               
 
               
Preferred stock – 1.5 shares authorized and unissued
           
 
               
Common stock – 200.0 shares authorized
    81.7       81.6  
 
               
Capital in excess of par value
    519.0       538.4  
 
               
Retained earnings
    1,400.0       1,177.8  
 
               
Accumulated other comprehensive loss
    (67.5 )     (61.6 )
 
               
Treasury stock
    (5.1 )     (9.5 )
 
           
 
    1,928.1       1,726.7  
 
           
 
  $ 4,727.6     $ 4,043.2  
 
           
See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
                 
    Nine Months Ended  
    September 30,  
    2008     2007  
    (unaudited)  
    (in millions)  
Operating activities:
               
Net income
  $ 241.0     $ 214.8  
Adjustments to reconcile net income to net cash provided by continuing operating activities:
               
Loss from discontinued operations
    1.7       0.5  
Depreciation and amortization
    103.1       86.0  
Stock-based compensation expense
    15.0       13.5  
Excess tax benefits from stock-based compensation
    (0.3 )     (5.3 )
Deferred income taxes
    135.9       50.5  
Gain on disposition of property, plant, equipment, and other assets
    (10.8 )     (17.5 )
Other
    (24.5 )     (31.0 )
Changes in assets and liabilities:
               
(Increase) decrease in receivables
    (58.9 )     (91.1 )
(Increase) decrease in inventories
    (96.2 )     (78.6 )
(Increase) decrease in other assets
    (58.6 )     (63.3 )
Increase (decrease) in accounts payable and accrued liabilities
    (59.2 )     104.2  
Increase (decrease) in other liabilities
    (6.3 )     5.5  
 
           
Net cash provided by operating activities – continuing operations
    181.9       188.2  
Net cash provided by operating activities – discontinued operations
    0.7        
 
           
Net cash provided by operating activities
    182.6       188.2  
 
           
 
               
Investing activities:
               
Proceeds from sales of railcars from our leased fleet
    185.4       238.1  
Proceeds from disposition of property, plant, equipment, and other assets
    19.9       48.8  
Capital expenditures – lease subsidiary
    (757.6 )     (585.6 )
Capital expenditures – other
    (96.5 )     (140.2 )
Payment for purchase of acquisitions, net of cash acquired
          (47.3 )
 
           
Net cash required by investing activities
    (648.8 )     (486.2 )
 
           
 
               
Financing activities:
               
Issuance of common stock, net
    3.1       12.0  
Excess tax benefits from stock-based compensation
    0.3       5.3  
Payments to retire debt
    (368.4 )     (98.4 )
Proceeds from issuance of debt
    754.9       304.2  
Stock repurchases
    (12.2 )      
Dividends paid to common shareholders
    (17.9 )     (14.2 )
 
           
Net cash provided by financing activities
    359.8       208.9  
 
           
 
               
Net decrease in cash and cash equivalents
    (106.4 )     (89.1 )
Cash and cash equivalents at beginning of period
    289.6       311.5  
 
           
Cash and cash equivalents at end of period
  $ 183.2     $ 222.4  
 
           
See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Consolidated Statement of Stockholders’ Equity
                                                                 
    Common Stock     Capital
in
            Accumulated                      
    Shares             Excess             Other             Treasury     Total  
(unaudited)   (200.0     $1.00 Par     of Par     Retained     Comprehensive     Treasury     Stock at     Stockholders’  
(in millions, except par value)   Authorized)     Value     Value     Earnings     Loss     Shares     Cost     Equity  
Balances at December 31, 2007
    81.6     $ 81.6     $ 538.4     $ 1,177.8     $ (61.6 )     (0.2 )   $ (9.5 )   $ 1,726.7  
 
                                                               
Net income
                      241.0                         241.0  
Other comprehensive income:
                                                               
Currency translation adjustments, net of tax
                            0.1                   0.1  
Change in unrealized loss on derivative financial instruments, net of tax
                            (5.4 )                 (5.4 )
Other changes, net of tax
                            (0.6 )                 (0.6 )
 
                                                             
Comprehensive net income
                                                            235.1  
Cash dividends on common stock
                      (18.7 )                       (18.7 )
Restricted shares issued, net
                (15.1 )                 0.4       11.5       (3.6 )
Shares repurchased
                                  (0.6 )     (16.0 )     (16.0 )
Stock options exercised
    0.1       0.1       (5.9 )                 0.2       8.9       3.1  
Stock-based compensation expense
                1.0                               1.0  
Other
                0.6       (0.1 )                       0.5  
 
                                               
Balances at September 30, 2008
    81.7     $ 81.7     $ 519.0     $ 1,400.0     $ (67.5 )     (0.2 )   $ (5.1 )   $ 1,928.1  
 
                                               
See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
     The foregoing consolidated financial statements are unaudited and have been prepared from the books and records of Trinity Industries, Inc. and subsidiaries (“Trinity”, “Company”, “we” or “our”). In our opinion, all normal and recurring adjustments necessary for a fair presentation of the financial position of the Company as of September 30, 2008, the results of operations for the three and nine month periods ended September 30, 2008 and 2007, and cash flows for the nine month periods ended September 30, 2008 and 2007 have been made in conformity with generally accepted accounting principles. Because of seasonal and other factors, the results of operations for the nine month period ended September 30, 2008 may not be indicative of expected results of operations for the year ending December 31, 2008. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited consolidated financial statements of the Company included in its Form 10-K for the year ended December 31, 2007.
Stockholders’ Equity
     On December 13, 2007, the Company’s Board of Directors authorized a $200 million stock repurchase program of its common stock. This program allows for the repurchase of the Company’s common stock through December 31, 2009. During the three months and nine months ended September 30, 2008, 150,000 and 621,100 shares were repurchased under this program at a cost of approximately $3.8 million and $16.0 million, respectively. The shares of common stock purchased during the three months ended September 30, 2008 were cash settled in October 2008. On October 3, 2008, the Company repurchased under the program 1,994,400 shares of its common stock in a privately negotiated transaction at a cost of approximately $42.2 million. Since the inception of this program through October 3, 2008, the Company had purchased a total of 2,719,700 shares at a cost of approximately $61.1 million.
Fair Value Accounting
     In September 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 introduces a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. SFAS 157 for financial assets and liabilities is effective for fiscal years beginning after November 15, 2007. The Company adopted this standard as of January 1, 2008 and the impact of the adoption was not significant.
     SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market to that asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. SFAS 157 describes three levels of inputs that may be used to measure fair values which are listed below.
     Level 1 – This level is defined as quoted prices in active markets for identical assets or liabilities. The Company’s cash equivalents and restricted assets, other than cash, are United States Treasury instruments.
     Level 2 – This level is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s fuel derivative instruments, which are commodity options, are valued using energy and commodity market data. Interest rate hedges are valued at exit prices obtained from each counterparty.
     Level 3 – This level is defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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     Assets and liabilities measured at fair value on a recurring basis are summarized below:
                                 
    Fair Value Measurement as of September 30, 2008  
    (in millions)  
    Level 1     Level 2     Level 3     Total  
Assets:
                               
Cash equivalents
  $ 160.4     $     $     $ 160.4  
Restricted assets (1)
    131.7                   131.7  
 
                       
Total assets
  $ 292.1     $     $     $ 292.1  
 
                       
 
                               
Liabilities:
                               
Fuel derivative instruments (2)
  $     $ 2.0     $     $ 2.0  
Interest rate hedges (2)
          0.9             0.9  
 
                       
Total liabilities
  $     $ 2.9     $     $ 2.9  
 
                       
 
(1)   Restricted assets are included in Other assets on the Consolidated Balance Sheet and are comprised of cash equivalents.
 
(2)   Fuel derivative instruments and interest rate hedges are included in Other liabilities on the Consolidated Balance Sheet.
Recent Accounting Pronouncements
     In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” and SFAS No. 160, “Accounting and Reporting Noncontrolling Interest in Consolidated Financial Statements, an amendment of ARB No. 51.” These new standards significantly change the accounting for and reporting of business combination transactions and noncontrolling interests (previously referred to as minority interests) in consolidated financial statements. Both standards are effective for fiscal years beginning after December 15, 2008 and are applicable only to transactions occurring after the effective date.  
     In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedge items are accounted for under SFAS 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.
     SFAS 161 is intended to enhance the current disclosure framework in SFAS 133 and requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk related contingent features in derivative agreements.
     The provisions of SFAS 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The provisions of SFAS 161 need not be applied to immaterial items. We are currently evaluating the potential impact of the provisions of SFAS 161.
     In May 2008, the FASB issued FASB Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (including Partial Cash Settlement) (“APB 14-1”). APB 14-1 requires that issuers of certain convertible debt instruments that may be settled in cash upon conversion to separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest expense is recognized in subsequent periods.
     The accounting for these types of instruments under APB 14-1 is intended to appropriately reflect the underlying economics by capturing the value of the conversion options as borrowing costs; therefore, recognizing their potential dilutive effects on earnings per share.
     The effective date of APB 14-1 is for financial statements issued for fiscal years and interim periods beginning after December 15, 2008 and does not permit earlier application. However, the transition guidance requires retrospective application to all periods presented and does not grandfather existing instruments. In June 2006, Trinity issued $450 million in 3 7/8% Convertible Subordinated Notes due 2036. We plan to adopt APB 14-1 on January 1, 2009. Upon adoption of APB 14-1, we expect to revise prior periods by reclassifying $152.6 million of our Convertible Subordinated Notes from debt to capital in excess of par in the equity section of the balance sheet. Our interest expense will increase $4.5 million and $8.1 million for the years ended December 31, 2006 and 2007, respectively, and $6.6 million for the nine months ended September 30, 2008. Upon adoption, debt origination costs of $3.2 million will be reclassified against capital in excess of par.

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     In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 applies to the calculation of earnings per share for share-based payment awards with rights to dividends or dividend equivalents under Statement No. 128, Earnings Per Share. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents will be considered participating securities and will be included in the computation of earning per share pursuant to the two-class method. The effective date of FSP EITF 03-6-1 is for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those years. Early adoption is not permitted. Once effective, all prior period earnings per share data presented will be adjusted retrospectively. We are currently evaluating the impact of the provisions of FSP EITF 03-6-1.
Note 2. Segment Information
     The Company reports operating results in five principal business segments: (1) the Rail Group, which manufactures and sells railcars and component parts; (2) the Construction Products Group, which manufactures and sells highway products, concrete and aggregates, and girders and beams used in the construction of highway and railway bridges; (3) the Inland Barge Group, which manufactures and sells barges and related products for inland waterway services; (4) the Energy Equipment Group, which manufactures and sells products for energy related businesses, including tank heads, structural wind towers, and pressure and non-pressure containers for the storage and transportation of liquefied gases and other liquid and dry products; and (5) the Railcar Leasing and Management Services Group, which provides fleet management, maintenance, and leasing services. The category All Other includes our captive insurance and transportation companies; legal, environmental, and upkeep costs associated with non-operating facilities; other peripheral businesses; and the change in market valuation related to ineffective commodity hedges.
     Sales and related net profits from the Rail Group to the Railcar Leasing and Management Services Group are recorded in the Rail Group and eliminated in consolidation. Sales between these groups are recorded at prices comparable to those charged to external customers giving consideration for quantity, features, and production demand. Sales of railcars from the lease fleet are included in the Railcar Leasing and Management Services Group. See Note 4 Equity Investment for discussion of sales to a company in which we have an equity investment.
     The financial information from continuing operations for these segments is shown in the tables below. We operate principally in North America.
Three Months Ended September 30, 2008
                                 
                            Operating  
    Revenues     Profit  
    External     Intersegment     Total     (Loss)  
    (in millions)  
Rail Group
  $ 419.2     $ 333.5     $ 752.7     $ 56.8  
Construction Products Group
    193.7       7.3       201.0       17.3  
Inland Barge Group
    160.6             160.6       29.8  
Energy Equipment Group
    169.2       15.3       184.5       32.5  
Railcar Leasing and Management Services Group
    207.3             207.3       53.9  
All Other
    4.6       16.9       21.5       (4.1 )
Corporate
                      (12.5 )
Eliminations — Lease subsidiary
          (323.0 )     (323.0 )     (9.9 )
Eliminations — Other
          (50.0 )     (50.0 )     (0.8 )
 
                       
Consolidated Total
  $ 1,154.6     $     $ 1,154.6     $ 163.0  
 
                       

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Three Months Ended September 30, 2007
                                 
                            Operating  
    Revenues     Profit  
    External     Intersegment     Total     (Loss)  
    (in millions)  
Rail Group
  $ 382.2     $ 239.1     $ 621.3     $ 96.5  
Construction Products Group
    193.8       0.4       194.2       19.0  
Inland Barge Group
    126.6             126.6       22.3  
Energy Equipment Group
    98.4       3.0       101.4       11.6  
Railcar Leasing and Management Services Group
    204.0             204.0       47.0  
All Other
    3.4       14.5       17.9       0.1  
Corporate
                      (7.0 )
Eliminations — Lease subsidiary
          (235.4 )     (235.4 )     (37.3 )
Eliminations — Other
          (21.6 )     (21.6 )     (5.3 )
 
                       
Consolidated Total
  $ 1,008.4     $     $ 1,008.4     $ 146.9  
 
                       
Nine Months Ended September 30, 2008
                                 
                            Operating  
    Revenues     Profit  
    External     Intersegment     Total     (Loss)  
    (in millions)  
Rail Group
  $ 1,101.8     $ 809.3     $ 1,911.1     $ 206.4  
Construction Products Group
    573.0       16.5       589.5       50.6  
Inland Barge Group
    449.3             449.3       83.5  
Energy Equipment Group
    449.7       21.6       471.3       76.1  
Railcar Leasing and Management Services Group
    413.5             413.5       124.0  
All Other
    11.7       46.4       58.1       1.4  
Corporate
                      (29.7 )
Eliminations — Lease subsidiary
          (792.3 )     (792.3 )     (64.2 )
Eliminations — Other
          (101.5 )     (101.5 )     (8.9 )
 
                       
Consolidated Total
  $ 2,999.0     $     $ 2,999.0     $ 439.2  
 
                       
Nine Months Ended September 30, 2007
                                 
                            Operating  
    Revenues     Profit  
    External     Intersegment     Total     (Loss)  
    (in millions)  
Rail Group
  $ 1,088.5     $ 700.6     $ 1,789.1     $ 271.2  
Construction Products Group
    553.9       0.8       554.7       44.9  
Inland Barge Group
    355.8             355.8       46.3  
Energy Equipment Group
    283.8       8.3       292.1       33.4  
Railcar Leasing and Management Services Group
    437.4             437.4       114.3  
All Other
    10.1       40.3       50.4       2.0  
Corporate
                      (26.7 )
Eliminations — Lease subsidiary
          (690.9 )     (690.9 )     (115.8 )
Eliminations — Other
          (59.1 )     (59.1 )     (2.9 )
 
                       
Consolidated Total
  $ 2,729.5     $     $ 2,729.5     $ 366.7  
 
                       

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Note 3. Railcar Leasing and Management Services Group
     The Railcar Leasing and Management Services Group (“Leasing Group”) provides fleet management, maintenance, and leasing services. Selected combined financial information for the Leasing Group is as follows:
                 
    September 30, 2008     December 31, 2007  
            (as reported)  
    (in millions)  
Cash
  $ 12.8     $ 40.8  
Leasing equipment:
               
Machinery and other
    36.6       36.1  
Equipment on lease
    2,635.2       1,996.7  
 
           
 
    2,671.8       2,032.8  
Accumulated depreciation
    (214.1 )     (214.4 )
 
           
 
    2,457.7       1,818.4  
 
               
Restricted assets
    131.7       129.1  
 
               
Debt:
               
Recourse
    61.4       75.7  
Non-recourse
    1,044.8       643.9  
                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2008   2007   2008   2007
    (in millions)
Revenues
  $ 207.3     $ 204.0     $ 413.5     $ 437.4  
Operating profit
    53.9       47.0       124.0       114.3  
     For the three and nine months ended September 30, 2008, revenues of $52.6 million and operating profit of $5.7 million and revenues of $98.8 million and operating profit of $12.9 million, respectively, were related to sales of railcars from the lease fleet to a company in which Trinity holds an equity investment. For the three and nine months ended September 30, 2007, revenues of $93.8 million and operating profit of $12.7 million and revenues of $187.5 million and operating profit of $24.1 million, respectively, were related to sales of railcars from the lease fleet to a company in which Trinity holds an equity investment. See Note 4 Equity Investment.
     The Leasing Group’s interest expense, which is not a component of operating profit, was $16.3 million and $40.8 million for the three and nine months ended September 30, 2008, respectively, and $11.4 million and $31.0 million, respectively, for the same periods last year. Rent expense, which is a component of operating profit, was $11.3 million and $33.7 million for the three and nine months ended September 30, 2008, respectively, and $11.4 million and $34.0 million, respectively, for the same periods last year.
     Equipment consists primarily of railcars leased by third parties. The Leasing Group purchases equipment manufactured by Trinity’s rail subsidiaries and enters into lease contracts with third parties with terms generally ranging between one and twenty years. The Leasing Group primarily enters into operating leases. Future minimum rental revenues on leases in each year are as follows:
                                                         
    Remaining                        
    three months                        
    of 2008   2009   2010   2011   2012   Thereafter   Total
    (in millions)
Future Minimum Rental Revenues on Leases
  $ 53.7     $ 203.8     $ 184.1     $ 145.4     $ 114.8     $ 347.4     $ 1,049.2  
     The Leasing Group’s debt consists of both recourse and non-recourse debt. See Note 8 for the form, maturities, and descriptions of the debt. Leasing Group equipment with a net book value of approximately $1,460.5 million is pledged as collateral for Leasing Group debt. Leasing Group equipment with a net book value of approximately $107.1 million is pledged as collateral against operating lease obligations.

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     In prior years, the Leasing Group completed a series of financing transactions whereby railcars were sold to one or more separate independent owner trusts (“Trusts”). The Leasing Group leased railcars from the Trusts under operating leases and subleased the railcars to independent third party customers. See Note 4 of the December 31, 2007 Consolidated Financial Statements filed on Form 10-K for a detailed explanation of these financing transactions. Future operating lease obligations of the Leasing Group’s subsidiaries as well as future minimum rental revenues related to these leases due to the Leasing Group are as follows:
                                                         
    Remaining                        
    three months                        
    of 2008   2009   2010   2011   2012   Thereafter   Total
    (in millions)
Future Operating Lease Obligations of Trusts’ Cars
  $ 11.8     $ 47.6     $ 40.7     $ 41.7     $ 44.9     $ 521.1     $ 707.8  
 
Future Minimum Rental Revenues of Trusts’ Cars
  $ 15.0     $ 52.4     $ 41.4     $ 33.2     $ 26.6     $ 82.3     $ 250.9  
Note 4. Equity Investment
     In 2007, the Company and five other equity investors unrelated to the Company or its subsidiaries formed TRIP Rail Holdings LLC (“TRIP Holdings”) for the purpose of providing railcar leasing and management services in North America. TRIP Holdings, through its wholly-owned subsidiary, TRIP Rail Leasing LLC (“TRIP Leasing”) purchases railcars from the Company’s Rail and Leasing Groups funded by capital contributions from TRIP Holdings’ equity investors and third-party debt. The Company agreed to provide 20% of the total of all capital contributions required by TRIP Holdings up to a total commitment of $49.0 million in exchange for 20% of the equity in TRIP Holdings. The Company will receive 20% of the distributions made from TRIP Holdings to equity investors and has a 20% interest in the net assets of TRIP Holdings upon a liquidation event. The terms of the Company’s 20% equity investment are identical to the terms of each of the other five equity investors. Railcars purchased from the Company by TRIP Leasing are required to be purchased at prices comparable with the prices of all similar railcars sold by the Company during the same period for new railcars and at prices based on third party appraised value for used railcars. The manager of TRIP Holdings, Trinity Industries Leasing Company (“TILC”), a wholly owned subsidiary of Trinity, may be removed without cause as a result of a majority vote of the non-Company equity members. In 2007, the Company contributed $21.3 million in capital to TRIP Holdings equal to its 20% pro rata share of total capital received in 2007 by TRIP Holdings from the equity investors of TRIP Holdings. Trinity funded an additional $3.4 million and $11.9 million, respectively, for the three and nine months ended September 30, 2008, pursuant to Trinity’s 20% equity ownership obligation under the formation agreements for TRIP Holdings, totaling a $33.2 million investment in TRIP Holdings as of September 30, 2008. Trinity’s remaining equity commitment to TRIP Holdings is $15.8 million, which is expected to be completely funded by the end of 2009. The Company also paid $13.8 million in structuring and placement fees to the principal underwriter in conjunction with the formation of TRIP Holdings that are expensed on a pro rata basis as railcars are purchased from the Company. For the three and nine months ended September 30, 2008, $1.1 million and $3.8 million, respectively, of these structuring and placement fees were expensed, leaving a net unamortized balance of $4.9 million as of September 30, 2008. Such expense is treated as sales commissions included in operating costs in the Company’s Consolidated Statements of Operations. As of September 30, 2008, TRIP Leasing had purchased $900.8 million of railcars from the Company and plans to purchase an additional $499.2 million.
     Sales of railcars to TRIP Leasing and related gains for the three and nine month periods ended September 30, 2008 and 2007 are as follows:
                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2008   2007   2008   2007
    (in millions)
Rail Group:
                               
Sales of railcars to TRIP Leasing
  $ 56.8     $ 138.5     $ 285.8     $ 138.5  
Gain on sales of railcars to TRIP Leasing
  $ 6.5     $ 26.2     $ 51.3     $ 26.2  
Deferral of gain on sales of railcars to TRIP Leasing based on Trinity’s 20% equity interest
  $ 1.4     $ 5.3     $ 10.3     $ 5.3  
 
                               
TILC:
                               
Sales of railcars to TRIP Leasing
  $ 52.6     $ 93.8     $ 98.8     $ 187.5  
Gain on sales of railcars to TRIP Leasing
  $ 7.1     $ 15.9     $ 16.1     $ 30.3  
Deferral of gain on sales of railcars to TRIP Leasing based on Trinity’s 20% equity interest
  $ 1.4     $ 3.2     $ 3.2     $ 6.2  

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     Administrative fees for the three and nine month periods ended September 30, 2008, were $1.0 million and $3.1 million, respectively. Fees for the same period in the prior year were insignificant.
     In June 2008, the Company entered into an agreement with an equity investor of TRIP Holdings potentially requiring Trinity to acquire from the equity investor up to an additional 5% equity ownership in TRIP Holdings if the option is exercised to its fullest extent. In that event, the Company would own a 25% equity ownership in TRIP Holdings, increasing the Company’s total commitment by $12.3 million to $61.3 million, of which $33.2 million had been paid. Should this agreement be exercised, the treatment of TRIP Holdings in the Company’s consolidated financial statements does not change. The exercise period for the agreement is from September 2008 until January 2009.
     See Note 5 of the December 31, 2007 Consolidated Financial Statements filed on Form 10-K for additional information.
Note 5. Derivative Instruments
     We use derivative instruments to mitigate the impact of increases in zinc, natural gas, and diesel fuel prices and interest rates, as well as to convert a portion of our variable-rate debt to fixed-rate debt. We also use derivatives to lock in fixed interest rates in anticipation of future debt issuances. These swaps are accounted for as cash flow hedges under SFAS 133.
     Interest rate hedges
     In anticipation of a future debt issuance, we entered into interest rate swap transactions during the fourth quarter of 2006 and during 2007. These instruments, with a notional amount of $370 million, hedged the interest rate on a portion of a future debt issuance associated with an anticipated railcar leasing transaction, which closed in May 2008. These instruments settled during the second quarter of 2008. The weighted average fixed interest rate under these instruments was 5.34%. These interest rate swaps were being accounted for as cash flow hedges with changes in the fair value of the instruments of $24.5 million of loss recorded in Accumulated Other Comprehensive Loss (“AOCL”) through the date the related debt issuance closed with a principal balance of $572.2 million in May 2008. The balance is being amortized over the term of the related debt. At September 30, 2008, the balance remaining in AOCL was $22.9 million. The effect on the consolidated statement of operations for the three and nine months ended September 30, 2008 was expense of $1.1 million and $6.1 million, respectively. The expense for the nine months ended September 30, 2008 was primarily due to the ineffective portion of the hedges associated with hedged interest payments that will not be made.
     In May 2008, we entered into an interest rate swap transaction which is being used to fix the LIBOR component of the debt issuance which closed in May 2008. The fixed interest rate under this instrument is 4.126%. The amount recorded for this instrument as of September 30, 2008 in the consolidated balance sheet was a liability of $0.9 million, with $0.5 million of expense in AOCL. The effect on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was expense of $2.3 million and $3.4 million, respectively.
     During 2005 and 2006, we entered into interest rate swap transactions in anticipation of a future debt issuance. These instruments, with a notional amount of $200 million, fixed the interest rate on a portion of a future debt issuance associated with a railcar leasing transaction in 2006 and settled at maturity in the first quarter of 2006. The weighted average fixed interest rate under these instruments was 4.87%. These interest rate swaps were being accounted for as cash flow hedges with changes in the fair value of the instruments of $4.5 million in income recorded in AOCL through the date the related debt issuance closed in May 2006. The balance is being amortized over the term of the related debt. At September 30, 2008, the balance remaining in AOCL was $3.5 million. The effect of the amortization on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was income of $0.1 million and $0.3 million, respectively. The effect on the same periods in the prior year was $0.1 million and $0.3 million, respectively.
     Natural gas and diesel fuel
     We continued a program to mitigate the impact of fluctuations in the price of natural gas and diesel fuel purchases. The intent of the program is to protect our operating profit from adverse price changes by entering into derivative instruments. For those instruments that do not qualify for hedge accounting treatment, any changes in their valuation are recorded directly to the consolidated statement of operations. In July of 2008, we settled our outstanding diesel fuel hedge contracts. The effect of the settled diesel fuel contracts on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was income of $1.1 million. The amount recorded in the consolidated balance sheet for natural gas hedges was a liability of $2.0 million as of September 30, 2008 and $1.2 million of expense in AOCL for both derivative instruments. The effect of both derivatives on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was expense of $0.4 million and income of $9.5 million, respectively, including losses of $1.7 million and gains of $5.2 million resulting from the mark to market valuation for the three and nine months

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periods ended September 30, 2008, respectively. For the three and nine month periods ended September 30, 2007 the effect on the consolidated statement of operations was income of $0.1 million and $1.1 million, respectively.
     Zinc
     We also continued a program to mitigate the impact of fluctuations in the price of zinc purchases. The intent of this program is to protect our operating profit from adverse price changes by entering into derivative instruments. These instruments are short term with monthly maturities and no remaining balances in AOCL as of September 30, 2008. The effect on the consolidated statement of operations for the three months ended September 30, 2008 was not material. The effect on the consolidated statement of operations for the nine months ended September 30, 2008 was income of $0.9 million and for the three and nine month periods ended September 30, 2007 was income of $1.2 million and $2.0 million, respectively.
Note 6. Property, Plant, and Equipment
     The following table summarizes the components of property, plant, and equipment as of September 30, 2008 and December 31, 2007.
                 
    September 30,     December 31,  
    2008     2007  
            (as reported)  
    (in millions)  
Corporate/Manufacturing:
               
Land
  $ 37.7     $ 36.5  
Buildings and improvements
    366.2       341.3  
Machinery and other
    654.8       608.0  
Construction in progress
    66.4       79.8  
 
           
 
    1,125.1       1,065.6  
Less accumulated depreciation
    (585.9 )     (565.4 )
 
           
 
    539.2       500.2  
 
               
Leasing:
               
Machinery and other
    36.6       36.1  
Equipment on lease
    2,635.2       1,996.7  
 
           
 
    2,671.8       2,032.8  
Less accumulated depreciation
    (214.1 )     (214.4 )
 
           
 
    2,457.7       1,818.4  
 
               
Deferred profit on railcars sold to the Leasing Group
    (325.1 )     (248.8 )
 
           
 
  $ 2,671.8     $ 2,069.8  
 
           
Note 7. Warranties
     The Company provides warranties against workmanship and materials defects ranging from one to five years depending on the product. The warranty costs are estimated using a two step approach. First, an estimate is made for the cost of all claims that have been filed by a customer. Second, based on historical claims experience, a cost is accrued for all products still within a warranty period for which no claims have been filed. The Company provides for the estimated cost of product warranties at the time revenue is recognized related to products covered by warranties and assesses the adequacy of the resulting reserves on a quarterly basis. The changes in the accruals for warranties for the three and nine month periods ended September 30, 2008 and 2007 were as follows:
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
    (in millions)  
Beginning balance
  $ 29.6     $ 26.2     $ 28.3     $ 28.6  
Warranty costs incurred
    (1.6 )     (1.9 )     (4.3 )     (8.3 )
Product warranty accrual
    0.7       3.2       4.7       7.2  
 
                       
Ending balance
  $ 28.7     $ 27.5     $ 28.7     $ 27.5  
 
                       

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Note 8. Debt
     The following table summarizes the components of debt as of September 30, 2008 and December 31, 2007.
                 
    September 30,     December 31,  
    2008     2007  
            (as reported)  
    (in millions)  
Corporate/Manufacturing — Recourse:
               
Revolving commitment
  $     $  
Convertible subordinated notes
    450.0       450.0  
Senior notes
    201.5       201.5  
Other
    3.0       3.1  
 
           
 
    654.5       654.6  
 
               
Leasing — Recourse:
               
Equipment trust certificates
    61.4       75.7  
 
           
 
    715.9       730.3  
 
           
 
               
Leasing — Non-recourse:
               
Secured railcar equipment notes
    323.5       334.1  
Warehouse facility
    157.3       309.8  
Promissory notes
    564.0        
 
           
 
    1,044.8       643.9  
 
           
Total debt
  $ 1,760.7     $ 1,374.2  
 
           
     Trinity’s revolving credit facility requires maintenance of ratios related to interest coverage for the leasing and manufacturing operations, leverage, and minimum net worth. At September 30, 2008, there were no borrowings under our $425 million revolving credit facility. After $100.4 million was considered for letters of credit, $324.6 million was available under the revolving credit facility. Interest on the revolving credit facility is calculated at prime or LIBOR plus 75 basis points.
     On October 15, 2008, the Company sent a notice to the holders of its Convertible Subordinated Notes. This notice, as required by the Indenture, notified the holders that as a result of increases in the Company’s dividend, the Conversion Rate has been adjusted to 19.2004 and the Conversion Price has been adjusted to $52.08.
     In May 2008, Trinity Rail Leasing VI LLC, a Delaware limited liability company (“TRL VI”), a limited purpose, indirect wholly-owned subsidiary of Trinity, issued $572.2 million of 30-year promissory notes (the “Promissory Notes”) to financial institutions. The Promissory Notes were secured by a portfolio of railcars valued at approximately $743.1 million, operating leases thereon, and certain cash reserves. The Promissory Notes are obligations of TRL VI and are non-recourse to Trinity. TRL VI acquired the railcars securing the Promissory Notes by purchase from TILC and a subsidiary. The proceeds were used to repay a portion of our warehouse facility and to finance unencumbered railcars on our consolidated balance sheet. TILC entered into certain agreements relating to the transfer of the railcars to TRL VI and the management and servicing of TRL VI’s assets. The Promissory Notes bear interest at a floating rate of one-month LIBOR plus a margin of 1.50%. The LIBOR portion of the interest rate on the Promissory Notes is fixed at approximately 4.13% for the first seven years from the date of issuance of the Promissory Notes through interest rate hedges. The interest rate margin on the Promissory Notes will increase by 0.50% on each of the seventh and eighth anniversary dates of the issuance of the Promissory Notes and by an additional 2.00% on the tenth anniversary date of the issuance of the Promissory Notes. The Promissory Notes may be prepaid at any time and may be prepaid without penalty at any time after the third anniversary date of the issuance of the Promissory Notes.
     In February 2008, TILC increased its warehouse facility to $600 million with the availability period of the facility remaining through August 2009. This facility, established to finance railcars owned by TILC, had $157.3 million outstanding as of September 30, 2008. The warehouse facility matures August 2009 and, unless renewed, will be payable in three equal installments in February 2010, August 2010, and February 2011. Railcars financed by the warehouse facility have historically been refinanced under long-term financing agreements. Specific railcars and the underlying leases secure the facility. Advances under the facility may not exceed 78% of the fair market value of the eligible railcars securing the facility as defined by the agreement. Advances under the facility bear interest at a defined index rate plus a margin, for an all-in rate of 3.59% at September 30, 2008. At September 30, 2008, $442.7 million was available under this facility.
     Terms and conditions of other debt, including recourse and non-recourse provisions, are described in Note 10 of the December 31, 2007 Consolidated Financial Statements filed on Form 10-K.

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     The remaining principal payments under existing debt agreements as of September 30, 2008 are as follows:
                                                 
    Remaining                                
    three months                                
    of 2008     2009     2010     2011     2012     Thereafter  
    (in millions)
Recourse:
                                               
Corporate/Manufacturing
  $ 0.4     $ 0.6     $ 0.2     $ 0.3     $ 0.2     $ 652.8  
Leasing – equipment trust certificates (Note 3)
          61.4                          
Non-recourse:
                                               
Leasing – secured railcar equipment notes (Note 3)
    3.6       15.3       16.5       14.9       13.7       259.5  
Leasing – warehouse facility (Note 3)
    1.4       4.3       101.1       50.5              
Leasing – promissory notes (Note 3)
    6.4       26.3       27.6       29.0       30.9       443.8  
 
                                   
Total principal payments
  $ 11.8     $ 107.9     $ 145.4     $ 94.7     $ 44.8     $ 1,356.1  
 
                                   
Note 9. Other, Net
     Other, net (income) expense consists of the following items:
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
    (in millions)  
Gain on disposition of property, plant, and equipment
  $ (0.3 )   $ (3.4 )   $ (10.8 )   $ (17.5 )
Foreign currency exchange transactions
    1.4       (0.2 )     (2.0 )     (1.8 )
Write-down of equity investment
                      5.4  
(Gain) loss on equity investments
    (0.1 )     0.5       (0.5 )     0.9  
Other
    (2.1 )     (0.5 )     (1.1 )     (1.5 )
 
                       
Other, net
  $ (1.1 )   $ (3.6 )   $ (14.4 )   $ (14.5 )
 
                       
Note 10. Income Taxes
     On January 1, 2007, we adopted the provisions of FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109. See Note 12 of the December 31, 2007 Consolidated Financial Statements filed on Form 10-K for a detailed explanation of the impact of FIN 48.
     The change in unrecognized tax benefits for the nine months ended September 30, 2008 and 2007 was as follows:
                 
    Nine Months Ended  
    September 30,  
    2008     2007  
    (in millions)  
Beginning balance
  $ 23.7     $ 32.0  
Additions for tax positions related to the current year
    2.0        
Additions for tax positions of prior years
    5.9       1.9  
Reductions for tax positions of prior years
    (1.6 )     (11.3 )
Expiration of statute of limitations
    (0.4 )      
Settlements
          (0.5 )
 
           
Ending balance
  $ 29.6     $ 22.1  
 
           
     The additions for the nine months ended September 30, 2008, were amounts provided for tax positions previously taken in foreign jurisdictions and tax positions taken for state income tax purposes as well as deferred tax liabilities that have been reclassed to uncertain tax positions.
     The reduction for tax positions of prior years for the nine months ended September 30, 2008 related primarily to the completion of state audits in which the tax position was not challenged by the state and for which the position is now effectively settled.

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     The total amount of unrecognized tax benefits at September 30, 2008 that would affect the Company’s effective tax rate if recognized was $16.7 million. There is a reasonable possibility that unrecognized Federal and state tax benefits will decrease by September 30, 2009 due to a lapse in the statute of limitations for assessing tax. As of September 30, 2008, the amounts subject to a lapse in statute by September 30, 2009 totaled $0.4 million. Further, there is a reasonable possibility that the unrecognized tax benefits related to Federal and state tax positions will decrease significantly by September 30, 2009 due to settlements with taxing authorities. As of September 30, 2008, the amounts expected to settle or lapse in the statute of limitations by September 30, 2009 totaled $7.8 million.
     Trinity accounts for interest expense and penalties related to income tax issues as income tax expense. Accordingly, interest expense and penalties associated with an uncertain tax position are included in the income tax provision. The total amount of accrued interest and penalties as of September 30, 2008 and December 31, 2007 was $10.0 million and $8.0 million, respectively.
     Income tax expense for the three and nine months ended September 30, 2008 included $(0.9) million and $1.9 million, respectively, in interest expense and penalties related to uncertain tax positions. Income tax expense for the three and nine months ended September 30, 2007, included $(0.7) million and $1.7 million, respectively, in interest expense and penalties related to uncertain tax positions.
     We are currently under Internal Revenue Service (“IRS”) examination for the tax years ended 1998 through 2002 and 2004 through 2005, thus our statute remains open from the year ended March 31, 1998, forward. Due to known disagreements with the IRS on certain issues, we expect the 2004 through 2005 examination to continue for an undeterminable period as those issues are resolved at the agent and appeals levels. We expect the 1998 through 2002 examination to be completed within the next three to six months. All but one issue has been agreed upon by us and the IRS and that issue has been litigated in Tax Court. In addition, statutes of limitations governing the right of Mexico’s tax authorities to audit the tax returns of our Mexican operations remain open for the 2002 tax year forward. Our Mexican subsidiaries are currently under audit for their 2002 and 2003 tax years. Additionally our Swiss subsidiary is under audit for the 2006 tax year. We expect these non-U.S. tax examinations to be completed within the next three to six months. Our various European subsidiaries, including the subsidiaries that were sold during 2006, are impacted by various statutes of limitations which are generally open from 2003 forward. An exception to this is our discontinued Romanian operations, which have been audited through 2004. Generally, states’ statutes in the United States are open from 2002 forward.
Note 11. Employee Retirement Plans
     The following table summarizes the components of net periodic pension cost for the Company.
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
    (in millions)  
Service cost
  $ 2.5     $ 2.8     $ 7.3     $ 8.5  
Interest
    5.2       4.9       15.6       14.7  
Expected return on assets
    (5.1 )     (4.4 )     (15.1 )     (13.2 )
Amortization and deferral
    0.5       1.1       1.5       3.2  
Profit sharing
    2.2       1.9       6.1       5.2  
 
                       
Net expenses
  $ 5.3     $ 6.3     $ 15.4     $ 18.4  
 
                       
     Trinity contributed $13.9 million and $21.6 million to the Company’s defined benefit pension plans for the three and nine month periods ended September 30, 2008, respectively. Trinity contributed $6.3 million and $12.7 million to the Company’s defined benefit pension plans for the three and nine month periods ended September 30, 2007, respectively. Total contributions to our pension plans in 2008 are expected to be approximately $25.6 million.

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Note 12. Accumulated Other Comprehensive Loss
     Comprehensive net income is as follows:
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
    (in millions)  
Net income
  $ 90.1     $ 87.0     $ 241.0     $ 214.8  
Other comprehensive income (loss):
                               
Change in currency translation adjustments, net of tax expense of $0.1, $0.1, $0.1, and $0.1
          0.2       0.1       0.2  
Change in unrealized loss on derivative financial instruments, net of tax (benefit) of $(2.6), $(4.4), $(3.4), and $(0.3)
    (5.1 )     (7.1 )     (5.4 )     (0.4 )
Other changes net of tax (benefit) of $—, $—, $(0.4), and $—
                (0.6 )      
 
                       
Comprehensive net income
  $ 85.0     $ 80.1     $ 235.1     $ 214.6  
 
                       
     The components of accumulated other comprehensive loss are as follows:
                 
    September 30,     December 31,  
    2008     2007  
            (as reported)  
    (in millions)  
Currency translation adjustments
  $ (17.2 )   $ (17.3 )
Unrealized loss on derivative financial instruments
    (13.9 )     (8.5 )
Funded status of pension liability
    (35.8 )     (35.8 )
Other items
    (0.6 )      
 
           
 
  $ (67.5 )   $ (61.6 )
 
           
Note 13. Stock-Based Compensation
     Stock-based compensation totaled approximately $4.9 million and $15.0 million for the three and nine months ended September 30, 2008, respectively. Stock-based compensation totaled approximately $5.3 million and $13.5 million for the three and nine months ended September 30, 2007, respectively.
Note 14. Net Income Per Common Share
     Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Except when the effect would be anti-dilutive, the calculation of diluted net income per common share includes the impact of shares that could be issued under outstanding stock options. Anti-dilutive stock options for the three and nine month periods ended September 30, 2008 were equivalent to 0.1 million and 0.2 million shares, respectively. Anti-dilutive stock options for the three and nine month periods ended September 30, 2007 were equivalent to 0.2 million and 0.1 million shares.
     The computation of basic and diluted net income applicable to common stockholders is as follows:
                                                 
    Three Months Ended     Three Months Ended  
    September 30, 2008     September 30, 2007  
    (in millions, except per share amounts)  
    Income     Average             Income     Average        
    (Loss)     Shares     EPS     (Loss)     Shares     EPS  
         
Income from continuing operations – basic
  $ 91.5       79.1     $ 1.16     $ 87.2       79.1     $ 1.10  
 
                                           
Effect of dilutive securities:
                                               
Stock options
          1.3                     1.5          
 
                                       
 
                                               
Income from continuing operations – diluted
  $ 91.5       80.4     $ 1.14     $ 87.2       80.6     $ 1.08  
 
                                   
 
                                               
Loss from discontinued operations, net of taxes – basic
  $ (1.4 )     79.1     $ (0.02 )   $ (0.2 )     79.1     $  
 
                                           
Effect of dilutive securities:
                                               
Stock options
          1.3                     1.5          
 
                                       
Loss from discontinued operations, net of taxes – diluted
  $ (1.4 )     80.4     $ (0.02 )   $ (0.2 )     80.6     $  
 
                                   

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    Nine Months Ended     Nine Months Ended  
    September 30, 2008     September 30, 2007  
    (in millions, except per share amounts)  
    Income     Average             Income     Average        
    (Loss)     Shares     EPS     (Loss)     Shares     EPS  
         
Income from continuing operations – basic
  $ 242.7       79.0     $ 3.07     $ 215.3       78.8     $ 2.73  
 
                                           
Effect of dilutive securities:
                                               
Stock options
          1.5                     1.7          
 
                                       
 
                                               
Income from continuing operations – diluted
  $ 242.7       80.5     $ 3.01     $ 215.3       80.5     $ 2.67  
 
                                   
 
                                               
Loss from discontinued operations, net of taxes – basic
  $ (1.7 )     79.0     $ (0.02 )   $ (0.5 )     78.8     $  
 
                                           
Effect of dilutive securities:
                                               
Stock options
          1.5                     1.7          
 
                                       
Loss from discontinued operations, net of taxes – diluted
  $ (1.7 )     80.5     $ (0.02 )   $ (0.5 )     80.5     $  
 
                                   
Note 15. Contingencies
     Barge Litigation
     The Company and its wholly owned subsidiary, Trinity Marine Products, Inc. were co-defendants in a class-action lawsuit filed in April 2003 entitled Waxler Transportation Company, Inc. v. Trinity Marine Products, Inc., et al. (Suit No. 49-741, Division “B” in the 25th Judicial District Court in and for the Parish of Plaquemines, Louisiana: the “Waxler Case”). A settlement of this case was approved by the court and became final February 9, 2008. The Court Appointed Disbursing Agent (“CADA”) has prepared an Allocation Plan and Distribution Plan for the disbursement of settlement compensation that is pending Court approval. As of September 30, 2008, based on instructions from the CADA to the settlement funds escrow agent, the Company has received $2.0 million in refund of unclaimed settlement funds.
     Other Litigation
     Transit Mix was named as a defendant in a case involving the death of an employee of an independent contractor who was working at a Transit Mix facility. A jury verdict in favor of the plaintiff was appealed and a take-nothing judgment was rendered by the Eleventh Court of Appeals, State of Texas. Plaintiffs filed a motion for rehearing in such court, which was denied. On March 22, 2007, Plaintiffs filed their Petition for Review with the Texas Supreme Court. The Texas Supreme Court denied the Plaintiff’s Petition for Review on February 22, 2008, and the Plaintiff filed a Motion for Rehearing on April 9, 2008. The Motion for Rehearing was denied by the Texas Supreme Court on June 27, 2008. On September 25, 2008, Plaintiffs filed a Writ of Certiorari with the United States Supreme Court and the Company plans to file a brief response in opposition.
     We also are involved in other claims and lawsuits incidental to our business. Based on information currently available, it is management’s opinion that the ultimate outcome of all current litigation and other claims, including settlements, in the aggregate will not have a material adverse effect on the Company’s overall financial condition for purposes of financial reporting. However, resolution of certain claims or lawsuits by settlement or otherwise could have a significant impact on the operating results of the reporting period in which such resolution occurs.
     We are subject to Federal, state, local, and foreign laws and regulations relating to the environment and the workplace. We have reserved $8.1 million to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such matters, taking into account currently available information and our contractual rights to indemnification and recourse to third parties. However, estimates of liability arising from future proceedings, assessments or remediation are inherently imprecise. Accordingly, there can be no assurance that we will not become involved in future litigation or other proceedings involving the environment and the workplace or, if we are found to be responsible or liable in any such litigation or proceeding, that such costs would not be material to the Company. Other than with respect to the foregoing, we believe that we are currently in substantial compliance with environmental and workplace laws and regulations.

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Note 16. Financial Statements for Guarantors of the Senior Debt
     The Company’s senior debt is fully and unconditionally and jointly and severally guaranteed by certain of Trinity’s wholly owned subsidiaries: Transit Mix Concrete & Materials Company, Trinity Industries Leasing Company, Trinity Marine Products, Inc., Trinity Rail Group, LLC, Trinity North American Freight Car, Inc., Trinity Tank Car, Inc., and Trinity Parts & Components, LLC. No other subsidiaries guarantee the senior debt. As of September 30, 2008, assets held by the non-guarantor subsidiaries include $131.7 million of restricted assets that are not available for distribution to Trinity Industries, Inc. (“Parent”), $1,341.0 million of equipment securing certain debt, $107.1 million of equipment securing certain lease obligations held by the non-guarantor subsidiaries, and $301.5 million of assets located in foreign locations. As of December 31, 2007, assets held by the non-guarantor subsidiaries include $129.1 million of restricted assets that are not available for distribution to the Parent, $811.1 million of equipment securing certain debt, $109.8 million of equipment securing certain lease obligations held by the non-guarantor subsidiaries, and $277.9 million of assets located in foreign locations.
Statement of Operations
For the Three Months Ended September 30, 2008
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Revenues
  $ (0.1 )   $ 769.1     $ 576.9     $ (191.3 )   $ 1,154.6  
Cost of revenues
    15.1       647.8       457.2       (191.3 )     928.8  
Selling, engineering, and administrative expenses
    12.5       27.4       22.9             62.8  
 
                             
 
    27.6       675.2       480.1       (191.3 )     991.6  
 
                             
Operating profit (loss)
    (27.7 )     93.9       96.8             163.0  
Other (income) expense
    (109.9 )     5.4       15.1       112.6       23.2  
 
                             
Income from continuing operations before income taxes
    82.2       88.5       81.7       (112.6 )     139.8  
Provision (benefit) for income taxes
    (7.9 )     29.6       26.6             48.3  
 
                             
Income from continuing operations
    90.1       58.9       55.1       (112.6 )     91.5  
Loss from discontinued operations, net of benefit for income taxes of $(0.1)
                (1.4 )           (1.4 )
 
                             
Net income
  $ 90.1     $ 58.9     $ 53.7     $ (112.6 )   $ 90.1  
 
                             
Statement of Operations
For the Nine Months Ended September 30, 2008
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Revenues
  $ 6.2     $ 1,958.9     $ 1,505.3     $ (471.4 )   $ 2,999.0  
Cost of revenues
    77.9       1,572.0       1,197.3       (471.4 )     2,375.8  
Selling, engineering and administrative expenses
    30.3       86.6       67.1             184.0  
 
                             
 
    108.2       1,658.6       1,264.4       (471.4 )     2,559.8  
 
                             
Operating profit (loss)
    (102.0 )     300.3       240.9             439.2  
Other (income) expense
    (312.8 )     1.9       43.9       319.4       52.4  
 
                             
Income from continuing operations before income taxes
    210.8       298.4       197.0       (319.4 )     386.8  
Provision (benefit) for income taxes
    (30.2 )     104.2       70.1             144.1  
 
                             
Income from continuing operations
    241.0       194.2       126.9       (319.4 )     242.7  
Loss from discontinued operations, net of benefit for income taxes of ($0.2)
                (1.7 )           (1.7 )
 
                             
Net income
  $ 241.0     $ 194.2     $ 125.2     $ (319.4 )   $ 241.0  
 
                             

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Statement of Operations
For the Three Months Ended September 30, 2007
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Revenues
  $ 3.2     $ 721.6     $ 408.8     $ (125.2 )   $ 1,008.4  
Cost of revenues
    44.9       556.7       328.5       (125.2 )     804.9  
Selling, engineering, and administrative expenses
    7.5       29.7       19.4             56.6  
 
                             
 
    52.4       586.4       347.9       (125.2 )     861.5  
 
                             
Operating profit (loss)
    (49.2 )     135.2       60.9             146.9  
Other (income) expense
    (121.6 )     (21.4 )     13.1       143.3       13.4  
 
                             
Income from continuing operations before income taxes
    72.4       156.6       47.8       (143.3 )     133.5  
Provision (benefit) for income taxes
    (14.6 )     42.9       18.0             46.3  
 
                             
Income from continuing operations
    87.0       113.7       29.8       (143.3 )     87.2  
Loss from discontinued operations, net of benefit for income taxes of ($0.1)
                (0.2 )           (0.2 )
 
                             
Net income
  $ 87.0     $ 113.7     $ 29.6     $ (143.3 )   $ 87.0  
 
                             
Statement of Operations
For the Nine Months Ended September 30, 2007
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Revenues
  $ 56.2     $ 1,881.1     $ 1,220.9     $ (428.7 )   $ 2,729.5  
Cost of revenues
    167.7       1,460.6       994.9       (428.7 )     2,194.5  
Selling, engineering and administrative expenses
    28.0       84.5       55.8             168.3  
 
                             
 
    195.7       1,545.1       1,050.7       (428.7 )     2,362.8  
 
                             
Operating profit (loss)
    (139.5 )     336.0       170.2             366.7  
Other (income) expense
    (313.9 )     1.4       41.2       303.8       32.5  
 
                             
Income from continuing operations before income taxes
    174.4       334.6       129.0       (303.8 )     334.2  
Provision (benefit) for income taxes
    (40.4 )     112.9       46.4             118.9  
 
                             
Income from continuing operations
    214.8       221.7       82.6       (303.8 )     215.3  
Loss from discontinued operations, net of benefit for income taxes of ($0.2)
                (0.5 )           (0.5 )
 
                             
Net income
  $ 214.8     $ 221.7     $ 82.1     $ (303.8 )   $ 214.8  
 
                             
Balance Sheet
September 30, 2008
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Assets:
                                       
Cash and cash equivalents
  $ 162.6     $ 0.8     $ 19.8     $     $ 183.2  
Receivables, net of allowance
    0.8       169.6       183.2             353.6  
Inventory
          448.0       234.2             682.2  
Property, plant, and equipment, net
    20.8       880.0       1,771.0             2,671.8  
Investments in subsidiaries/intercompany receivable (payable), net
    2,649.4       (49.8 )     413.4       (3,013.0 )      
Goodwill and other assets
    96.5       437.7       305.1       (2.5 )     836.8  
 
                             
 
  $ 2,930.1     $ 1,886.3     $ 2,926.7     $ (3,015.5 )   $ 4,727.6  
 
                             
 
                                       
Liabilities:
                                       
Accounts payable and accrued liabilities
  $ 226.6     $ 183.0     $ 221.6     $     $ 631.2  
Debt
    651.5       64.4       1,044.8             1,760.7  
Deferred income
    62.9       3.2       3.5             69.6  
Other liabilities
    61.0       274.8       4.7       (2.5 )     338.0  
Total stockholders’ equity
    1,928.1       1,360.9       1,652.1       (3,013.0 )     1,928.1  
 
                             
 
  $ 2,930.1     $ 1,886.3     $ 2,926.7     $ (3,015.5 )   $ 4,727.6  
 
                             

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Balance Sheet
December 31, 2007
(as reported)
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Assets:
                                       
Cash and cash equivalents
  $ 238.0     $ 0.7     $ 50.9     $     $ 289.6  
Receivables, net of allowance
    5.8       156.6       134.1             296.5  
Inventory
    5.3       412.1       169.3             586.7  
Property, plant, and equipment, net
    22.5       807.1       1,240.2             2,069.8  
Investments in subsidiaries/ intercompany receivable (payable), net
    2,271.3       (522.4 )     314.2       (2,063.1 )      
Goodwill and other assets
    227.4       440.9       264.2       (131.9 )     800.6  
 
                             
 
  $ 2,770.3     $ 1,295.0     $ 2,172.9     $ (2,195.0 )   $ 4,043.2  
 
                             
 
                                       
Liabilities:
                                       
Accounts payable and accrued liabilities
  $ 307.4     $ 174.2     $ 202.7     $     $ 684.3  
Debt
    651.7       78.5       644.0             1,374.2  
Deferred income
    32.3       3.9       22.2             58.4  
Other liabilities
    52.2       274.8       4.5       (131.9 )     199.6  
Total stockholders’ equity
    1,726.7       763.6       1,299.5       (2,063.1 )     1,726.7  
 
                             
 
  $ 2,770.3     $ 1,295.0     $ 2,172.9     $ (2,195.0 )   $ 4,043.2  
 
                             
Statement of Cash Flows
For the Nine Months Ended September 30, 2008
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Net cash provided (required) by operating activities
  $ (48.9 )   $ 86.6     $ 144.9     $     $ 182.6  
Net cash provided (required) by investing activities
    0.4       (72.5 )     (576.7 )           (648.8 )
Net cash provided (required) by financing activities
    (26.9 )     (14.0 )     400.7             359.8  
 
                             
Net increase (decrease) in cash and cash equivalents
    (75.4 )     0.1       (31.1 )           (106.4 )
Cash and cash equivalents at beginning of period
    238.0       0.7       50.9             289.6  
 
                             
Cash and cash equivalents at end of period
  $ 162.6     $ 0.8     $ 19.8     $     $ 183.2  
 
                             
Statement of Cash Flows
For the Nine Months Ended September 30, 2007
                                         
                    Combined              
            Combined     Non-              
            Guarantor     Guarantor              
    Parent     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (in millions)  
Net cash provided (required) by operating activities
  $ (111.3 )   $ 64.3     $ 235.2     $     $ 188.2  
Net cash provided (required) by investing activities
    9.3       (21.4 )     (474.1 )           (486.2 )
Net cash provided (required) by financing activities
    3.4       (42.7 )     248.2             208.9  
 
                             
Net increase (decrease) in cash and cash equivalents
    (98.6 )     0.2       9.3             (89.1 )
Cash and cash equivalents at beginning of period
    283.1       0.2       28.2             311.5  
 
                             
Cash and cash equivalents at end of period
  $ 184.5     $ 0.4     $ 37.5     $     $ 222.4  
 
                             

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
     The following discussion should be read in conjunction with the unaudited consolidated financial statements and related notes thereto appearing elsewhere in this document.
     In 2007, Trinity Industries Inc. (“Trinity”, “Company”, “we” or “our”) purchased 20% of the equity in newly-formed TRIP Rail Holdings LLC (“TRIP Holdings”). TRIP Holdings provides railcar leasing and management services in North America. Railcars are purchased from Trinity by a wholly-owned subsidiary of TRIP Holdings, TRIP Rail Leasing LLC (“TRIP Leasing”).
     In May 2008, Trinity Rail Leasing VI LLC, a Delaware limited liability company (“TRL VI”), a limited purpose, indirect wholly-owned subsidiary of Trinity, owned by Trinity through Trinity Industries Leasing Company (“TILC”), issued $572.2 million of 30-year promissory notes to financial institutions. The proceeds were used to repay a portion of our warehouse facility and to finance unencumbered railcars on our consolidated balance sheet. See Financing Activities.
     On December 13, 2007, the Company’s Board of Directors authorized a $200 million stock repurchase program of its common stock. This program allows for the repurchase of the Company’s common stock through December 31, 2009. During the three months and nine months ended September 30, 2008, 150,000 and 621,100 shares were repurchased under this program at a cost of approximately $3.8 million and $16.0 million, respectively. The shares of common stock purchased during the three months ended September 30, 2008 were cash settled in October 2008. On October 3, 2008, the Company repurchased under the program 1,994,400 shares of its common stock in a privately negotiated transaction at a cost of approximately $42.2 million. Since the inception of this program through October 3, 2008, the Company had repurchased a total of 2,719,700 shares at a cost of approximately $61.1 million.
Overall Summary for Continuing Operations
     Revenues
                                                         
    Three Months Ended September 30, 2008     Three Months Ended September 30, 2007        
    Revenues     Revenues     Percent  
    External     Intersegment     Total     External     Intersegment     Total     Change  
    ($ in millions)          
Rail Group
  $ 419.2     $ 333.5     $ 752.7     $ 382.2     $ 239.1     $ 621.3       21.1 %
Construction Products Group
    193.7       7.3       201.0       193.8       0.4       194.2       3.5  
Inland Barge Group
    160.6             160.6       126.6             126.6       26.9  
Energy Equipment Group
    169.2       15.3       184.5       98.4       3.0       101.4       82.0  
Railcar Leasing and Management Services Group
    207.3             207.3       204.0             204.0       1.6  
All Other
    4.6       16.9       21.5       3.4       14.5       17.9       20.1  
Eliminations — lease subsidiary
          (323.0 )     (323.0 )           (235.4 )     (235.4 )        
Eliminations — other
          (50.0 )     (50.0 )           (21.6 )     (21.6 )        
 
                                           
Consolidated Total
  $ 1,154.6     $     $ 1,154.6     $ 1,008.4     $     $ 1,008.4       14.5  
 
                                           
                                                         
    Nine Months Ended September 30, 2008     Nine Months Ended September 30, 2007        
    Revenues     Revenues     Percent  
    External     Intersegment     Total     External     Intersegment     Total     Change  
    ($ in millions)          
Rail Group
  $ 1,101.8     $ 809.3     $ 1,911.1     $ 1,088.5     $ 700.6     $ 1,789.1       6.8 %
Construction Products Group
    573.0       16.5       589.5       553.9       0.8       554.7       6.3  
Inland Barge Group
    449.3             449.3       355.8             355.8       26.3  
Energy Equipment Group
    449.7       21.6       471.3       283.8       8.3       292.1       61.3  
Railcar Leasing and Management Services Group
    413.5             413.5       437.4             437.4       (5.5 )
All Other
    11.7       46.4       58.1       10.1       40.3       50.4       15.3  
Eliminations — lease subsidiary
          (792.3 )     (792.3 )           (690.9 )     (690.9 )        
Eliminations — other
          (101.5 )     (101.5 )           (59.1 )     (59.1 )        
 
                                           
Consolidated Total
  $ 2,999.0     $     $ 2,999.0     $ 2,729.5     $     $ 2,729.5       9.9  
 
                                           
     Revenues for the three and nine month periods ended September 30, 2008 increased as compared to the same periods in the prior year due to improved sales in all our business groups, except the Railcar Leasing and Management Services Group (“Leasing Group”) for the nine month period. Revenues for the Rail Group improved due to an increase in shipments for the three and nine months ended September 30, 2008 as compared to the same periods in 2007. Revenues for the Construction Products Group improved for the nine month period ended September 30, 2008 due to increased sales volumes in our highway products business offset by decreased volumes in our bridge girder business and the impact of divestitures in the concrete and aggregates businesses. For the three months ended September 30, 2008, revenues of the

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Construction Products Group were also offset by lower revenues in the concrete and aggregates businesses due to adverse weather conditions in Texas and Louisiana. Inland Barge Group revenues increased primarily as a result of greater barge shipments, a change in the mix of barges sold, and an increase in raw material costs resulting in higher sales prices. An increase in structural wind towers sales was the primary reason for the increase in revenues in the Energy Equipment Group. The increase in the Leasing Group revenues for the three months ended September 30, 2008 as compared to the same period in the prior year was primarily the result of higher rental revenues resulting from additions to the lease and management fleet, partially offset by a decrease in sales of cars from the lease fleet. For the nine month period ended September 30, 2008, the decline in sales of cars from the lease fleet caused an overall decrease in revenues in the Leasing Group.
     Operating Profit (Loss)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
    (in millions)  
Rail Group
  $ 56.8     $ 96.5     $ 206.4     $ 271.2  
Construction Products Group
    17.3       19.0       50.6       44.9  
Inland Barge Group
    29.8       22.3       83.5       46.3  
Energy Equipment Group
    32.5       11.6       76.1       33.4  
Railcar Leasing and Management Services Group
    53.9       47.0       124.0       114.3  
All Other
    (4.1 )     0.1       1.4       2.0  
Corporate
    (12.5 )     (7.0 )     (29.7 )     (26.7 )
Eliminations — lease subsidiary
    (9.9 )     (37.3 )     (64.2 )     (115.8 )
Eliminations — other
    (0.8 )     (5.3 )     (8.9 )     (2.9 )
 
                       
Consolidated Total
  $ 163.0     $ 146.9     $ 439.2     $ 366.7  
 
                       
     Operating profit for the three and nine month periods ended September 30, 2008 increased as the result of overall higher revenues, an increase in the size of our lease and management fleet, and higher barge and structural wind tower sales. These increases in operating profit were offset by higher raw material costs and competitive pricing pressure in the market for new railcars.
     Other Income and Expense. Interest expense, net of interest income, was $24.3 million and $66.8 million, respectively, for the three and nine month periods ended September 30, 2008 compared to $17.0 million and $47.0 million, respectively, for the same periods last year. Interest income decreased $1.2 million over the same quarter last year and $4.2 million over the same nine month period last year as a result of lower interest rates and a decrease in cash available for investment. Interest expense increased $6.1 million and $15.6 million, respectively, over the same periods last year due to an increase in debt levels. For the nine month period ended September 30, 2008, $4.5 million of interest expense related to the ineffective portion of interest rate hedges. The decrease in Other, net for the three month period ended September 30, 2008 was primarily due to a decrease in the gain on disposition of property, plant, and equipment compared to the same period in the prior year. For the nine month period ended September 30, 2008, the decrease in Other, net was primarily due to a decrease in the gain on disposition of property, plant, and equipment compared to the same period in the prior year, partially offset by a write-down of an equity investment in the prior year period.
     Income Taxes. The current effective tax rates of 34.5% and 37.3 %, respectively, for continuing operations for the three and nine month periods ended September 30, 2008 varied from the statutory rate of 35.0% due primarily to state income taxes, discrete adjustments related to foreign and state taxes, and true ups of federal deferred tax items. The prior year effective tax rates of 34.7% and 35.6%, respectively, for continuing operations for the three and nine month periods ended September 30, 2007 varied from the statutory rate of 35.0% due primarily to state income taxes, offset by an increase in the temporary credit to be applied against the Texas margin tax, the benefit of the domestic production deduction, and the utilization of capital losses previously not benefited. The increase in the deferred tax liability is primarily driven by the difference in the book and tax depreciation associated with the lease fleet.

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Rail Group
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     Percent     2008     2007     Percent  
    ($ in millions)     Change     ($ in millions)     Change  
Revenues:
                                               
Rail
  $ 710.6     $ 584.7       21.5 %   $ 1,782.1     $ 1,668.0       6.8 %
Components
    42.1       36.6       15.0       129.0       121.1       6.5  
 
                                       
Total revenues
  $ 752.7     $ 621.3       21.1     $ 1,911.1     $ 1,789.1       6.8  
 
                                               
Operating profit
  $ 56.8     $ 96.5             $ 206.4     $ 271.2          
Operating profit margin
    7.5 %     15.5 %             10.8 %     15.2 %        
     Railcar shipments increased 21% to approximately 8,560 and 2.6% to approximately 21,150 during the three and nine month periods ended September 30, 2008, respectively, compared to the same periods in 2007. As of September 30, 2008, our Rail Group backlog was approximately $2.0 billion consisting of approximately 24,130 railcars. The railcar backlog dollar value as of September 30, 2008 and 2007 was as follows:
                 
    As of September 30,  
    2008     2007  
    (in millions)  
External Customers
  $ 440.3     $ 843.8  
TRIP Leasing
    143.7       617.7  
Leasing Group
    1,442.5       1,168.7  
 
           
Total
  $ 2,026.5     $ 2,630.2  
 
           
     The total amount of the backlog dedicated to the Leasing Group was supported by lease agreements with external customers. The final amount dedicated to the Leasing Group or TRIP Leasing may vary by the time of delivery. Sales for the three and nine month periods ended September 30, 2008 included $56.8 million and $285.8 million, respectively, in cars sold to TRIP Leasing, that resulted in a gain of $6.5 million and $51.3 million, respectively, of which $1.4 million and $10.3 million, respectively, in profit was deferred based on our 20% equity interest. Sales for the three and nine month periods ended September 30, 2007 included $138.5 million in cars sold to TRIP Leasing, that resulted in a gain of $26.2 million, of which $5.3 million in profit was deferred based on our 20% equity interest. See Note 4 Equity Investment of the Consolidated Financial Statements for information about TRIP Leasing.
     Operating profit for the Rail Group decreased $39.7 million and $64.8 million, respectively, for the three and nine month periods ended September 30, 2008 compared to the same periods last year. This decrease was primarily due to the competitive pricing environment, increases in raw material costs, and a reserve for future losses on railcar sales. Steel costs rose significantly during the first nine months of the year and remain volatile. On certain fixed price railcar contracts, actual cost increases and surcharges have caused the total cost of the railcar to exceed the amounts originally anticipated, and in some cases, the actual contractual sale price of the railcar. A reserve for estimated losses on fixed price contracts of $2.9 million and $5.9 million was recorded during the three and nine months ended September 30, 2008, respectively.
     In the three months ended September 30, 2008, railcar shipments included sales to the Leasing Group of $323.0 million compared to $235.4 million in the comparable period in 2007 with a deferred profit of $9.9 million compared to $37.3 million for the same period in 2007. In the nine months ended September 30, 2008, railcar shipments included sales to the Leasing Group of $792.3 million compared to $690.9 million in the comparable period in 2007 with a deferred profit of $64.2 million compared to $115.8 million for the same period in 2007. Sales to the Leasing Group and related profits are included in the operating results of the Rail Group but are eliminated in consolidation.
Construction Products Group
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     Percent     2008     2007     Percent  
    ($ in millions)     Change     ($ in millions)     Change  
Revenues:
                                               
Concrete and Aggregates
  $ 106.9     $ 120.4       (11.2 )%   $ 337.7     $ 343.3       (1.6 )%
Highway Products
    90.3       68.5       31.8       232.0       180.1       28.8  
Other
    3.8       5.3       (28.3 )     19.8       31.3       (36.7 )
 
                                       
Total revenues
  $ 201.0     $ 194.2       3.5     $ 589.5     $ 554.7       6.3  
 
                                               
Operating profit
  $ 17.3     $ 19.0             $ 50.6     $ 44.9          
Operating profit margin
    8.6 %     9.8 %             8.6 %     8.1 %        

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     The increase in revenues for the three and nine month periods ended September 30, 2008 compared to the same periods in 2007 was primarily attributable to an increase in volume in our highway products business, sales generated by our entry into the asphalt business, and an increase in various raw material costs that have resulted in higher sales prices. These increases were offset by a decrease in volumes in our bridge girder business and the impact of divestitures in the concrete and aggregates businesses. Revenues for the three months ended September 30, 2008 were also offset by lower revenues in the concrete and aggregates businesses due to adverse weather conditions in Texas and Louisiana. Operating profit for the three months ended September 30, 2008 compared to the same period in 2007 decreased due to volume decreases in the concrete and aggregates businesses, unfavorable weather conditions, and increased raw material prices. Additional sales resulting in higher margins in our highway products business partially offset the declines in our concrete and aggregates businesses. Operating profit for the nine months ended September 30, 2008 as compared to the same period in 2007 increased due to the increased sales in the highway products and asphalt businesses offset by lower margins in the concrete and aggregates businesses for the same reasons as the three month period ended September 30, 2008.
Inland Barge Group
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     Percent     2008     2007     Percent  
    ($ in millions)     Change     ($ in millions)     Change  
Revenues
  $ 160.6     $ 126.6       26.9 %   $ 449.3     $ 355.8       26.3 %
 
                                               
Operating profit
  $ 29.8     $ 22.3             $ 83.5     $ 46.3          
Operating profit margin
    18.6 %     17.6 %             18.6 %     13.0 %        
     Revenues increased for the three and nine month periods ended September 30, 2008 compared to the same periods in the prior year due to an increase in the sales of hopper and tank barges, a change in the mix of barges sold, and an increase in raw material costs that resulted in higher sales prices. Operating profit for the three and nine months ended September 30, 2008 increased compared to the same periods last year due to increased revenues, a change in the mix of barges sold, and improved margins due to operating efficiencies. Operating profit for the nine months ended September 30, 2008 also increased due to the refund of $2.0 million in unclaimed settlement funds related to the Waxler Case, compared to a $15.0 million charge for the resolution of the Waxler Case for the nine month period ended September 30, 2007. As of September 30, 2008, the backlog for the Inland Barge Group was approximately $669.0 million compared to approximately $771.5 million as of September 30, 2007.
Energy Equipment Group
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     Percent     2008     2007     Percent  
    ($ in millions)     Change     ($ in millions)     Change  
Revenues:
                                               
Structural wind towers
  $ 125.4     $ 54.6       129.7 %   $ 315.8     $ 155.0       103.7 %
Other
    59.1       46.8       26.3       155.5       137.1       13.4  
 
                                       
Total revenues
  $ 184.5     $ 101.4       82.0     $ 471.3     $ 292.1       61.3  
 
                                               
Operating profit
  $ 32.5     $ 11.6             $ 76.1     $ 33.4          
Operating profit margin
    17.6 %     11.4 %             16.1 %     11.4 %        
     Revenues increased for the three and nine month periods ended September 30, 2008 compared to the same periods in 2007 due to an increase in sales of structural wind towers and products manufactured and sold in Mexico offset by lower sales in the weaker domestic container market. Operating profit increased due to the increased sales in structural wind towers and the improved margins on containers produced in Mexico. As of September 30, 2008, the backlog for structural wind towers was approximately $1.46 billion compared to approximately $748 million as of September 30, 2007.

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Railcar Leasing and Management Services Group
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     Percent     2008     2007     Percent  
    ($ in millions)     Change     ($ in millions)     Change  
Revenues:
                                               
Leasing and management
  $ 80.6     $ 69.2       16.5 %   $ 228.1     $ 199.3       14.5 %
Sales of cars from the lease fleet
    126.7       134.8       (6.0 )     185.4       238.1       (22.1 )
 
                                       
Total revenues
  $ 207.3     $ 204.0       1.6     $ 413.5     $ 437.4       (5.5 )
 
                                               
Operating Profit:
                                               
Leasing and management
  $ 32.7     $ 28.6             $ 93.5     $ 82.9          
Sales of cars from the lease fleet
    21.2       18.4               30.5       31.4          
 
                                       
Total operating profit
  $ 53.9     $ 47.0             $ 124.0     $ 114.3          
 
                                               
Operating profit margin:
                                               
Leasing and management
    40.6 %     41.3 %             41.0 %     41.6 %        
Sales of cars from the lease fleet
    16.7       13.6               16.5       13.2          
Total operating profit margin
    26.0       23.0               30.0       26.1          
 
                                               
Fleet utilization
    99.0 %     99.6 %             99.0 %     99.6 %        
     Total revenues increased for the three month period ended September 30, 2008 compared to the same period last year due to decreased sales from the lease fleet offset by increased rental revenues related to additions to the lease fleet and management fees. Total revenues decreased for the nine month period ended September 30, 2008 compared to the same period last year due to decreased sales for the lease fleet offset by increased rental revenues related to additions to the lease fleet, growth of the per diem fleet, and management and origination fees.
     Operating profit for leasing and management operations increased for the three and nine month periods ended September 30, 2008 compared to the same periods last year due primarily to rental proceeds from fleet additions. Results for the three and nine months ended September 30, 2008 included $52.6 million and $98.8 million, respectively, in sales of railcars to TRIP Leasing that resulted in a gain of $7.1 million and $16.1 million, respectively, of which $1.4 million and $3.2 million, respectively, was deferred based on our 20% equity interest. Results for the three and nine months ended September 30, 2007 included $93.8 million and $187.5 million, respectively, in sales of railcars to TRIP Leasing that resulted in a gain of $15.9 million and $30.3 million, respectively, of which $3.2 million and $6.2 million, respectively, was deferred based on our 20% equity interest. See Note 4 of the Consolidated Financial Statements for information about TRIP Leasing.
     To fund the continued expansion of its lease fleet to meet market demand, the Leasing Group generally uses its non-recourse warehouse facility or excess cash to provide initial financing for a portion of the purchase price of the cars. In February 2008, the warehouse facility was increased to $600 million with the availability period of this facility remaining through August 2009. In May 2008, Trinity Rail Leasing VI LLC issued $572.2 million of 30-year promissory notes. See Financing Activities.
     As of September 30, 2008, the Leasing Group’s lease fleet of approximately 43,910 owned or leased railcars had an average age of 4.7 years and an average remaining lease term of 4.6 years.
All Other
                                                 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2008   2007   Percent   2008   2007   Percent
    ($ in millions)   Change   ($ in millions)   Change
Revenues
  $ 21.5     $ 17.9       20.1 %   $ 58.1     $ 50.4       15.3 %
Operating (loss) profit
  $ (4.1 )   $ 0.1             $ 1.4     $ 2.0          
     The increase in revenues for the three and nine month periods ended September 30, 2008 over the same periods last year was primarily due to an increase in intersegment sales by our transportation company. The decrease in the operating profit for the three month period ended September 30, 2008 was primarily due to a decrease over the same period last year of $3.6 million resulting from the market valuation of commodity hedges that are required to be marked to market.

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Liquidity and Capital Resources
Cash Flows
     Operating Activities. Net cash provided by operating activities of continuing operations for the nine months ended September 30, 2008 was $181.9 million compared to $188.2 million of net cash provided by operating activities of continuing operations for the same period in 2007.
     Accounts receivables at September 30, 2008 as compared to the accounts receivables balance at December 31, 2007 had increased by approximately 20%. We saw increases in accounts receivables for our Rail Group and structural wind towers business due to increased sales for the three month period ended September 30, 2008. Raw materials inventory at September 30, 2008 had increased approximately 27% since December 31, 2007 primarily attributable to increased steel prices.
     Investing Activities. Net cash required by investing activities of continuing operations for the nine months ended September 30, 2008 was $648.8 million compared to $486.2 million for the same period last year. Capital expenditures for the nine months ended September 30, 2008 were $854.1 million, of which $757.6 million were for additions to the lease fleet. This compares to $725.8 million of capital expenditures for the same period last year, of which $585.6 million were for additions to the lease fleet. Proceeds from the sale of property, plant, and equipment and other assets were $205.3 million for the nine months ended September 30, 2008 composed primarily of railcar sales from the lease fleet, which included $98.8 million to TRIP Leasing, and the sale of non-operating assets. This compares to $286.9 million for the same period in 2007 composed primarily of railcar sales from the lease fleet, which included $187.5 million to TRIP Leasing, and the sale of non-operating assets.
     Financing Activities. Net cash provided by financing activities during the nine months ended September 30, 2008 was $359.8 million compared to $208.9 million for the same period in 2007. We intend to use our cash to fund the operations, expansions, and growth initiatives of the Company.
     At September 30, 2008, there were no borrowings under our $425 million revolving credit facility. Interest on the revolving credit facility is calculated at prime or LIBOR plus 75 basis points.
     On October 15, 2008, the Company sent a notice to the holders of its Convertible Subordinated Notes. This notice, as required by the Indenture, notified the holders that as a result of increases in the Company’s dividend, the Conversion Rate has been adjusted to 19.2004 and the Conversion Price has been adjusted to $52.08.
     In May 2008, Trinity Rail Leasing VI LLC, a Delaware limited liability company (“TRL VI”), a limited purpose, indirect wholly-owned subsidiary of Trinity, issued $572.2 million of 30-year promissory notes (the “Promissory Notes”) to financial institutions. The Promissory Notes were secured by a portfolio of railcars valued at approximately $743.1 million, operating leases thereon, and certain cash reserves. The Promissory Notes are obligations of TRL VI and are non-recourse to Trinity. TRL VI acquired the railcars securing the Promissory Notes by purchase from TILC and a subsidiary. The proceeds were used to repay a portion of our warehouse facility and to finance unencumbered railcars on our consolidated balance sheet. TILC entered into certain agreements relating to the transfer of the railcars to TRL VI and the management and servicing of TRL VI’s assets. The Promissory Notes bear interest at a floating rate of one-month LIBOR plus a margin of 1.50%. The LIBOR portion of the interest rate on the Promissory Notes is fixed at approximately 4.13% for the first seven years from the date of issuance of the Promissory Notes through interest rate hedges. The interest rate margin on the Promissory Notes will increase by 0.50% on each of the seventh and eighth anniversary dates of the issuance of the Promissory Notes and by an additional 2.00% on the tenth anniversary date of the issuance of the Promissory Notes. The Promissory Notes may be prepaid at any time and may be prepaid without penalty at any time after the third anniversary date of the issuance of the Promissory Notes.
     In February 2008, TILC increased its warehouse facility to $600 million with the availability period of the facility remaining through August 2009. This facility, established to finance railcars owned by TILC, had $157.3 million outstanding as of September 30, 2008. The warehouse facility matures August 2009 and, unless renewed, will be payable in three equal installments in February 2010, August 2010, and February 2011. Railcars financed by the warehouse facility have historically been refinanced under long-term financing agreements. Specific railcars and the underlying leases secure the facility. Advances under the facility may not exceed 78% of the fair market value of the eligible railcars securing the facility as defined by the agreement. Advances under the facility bear interest at a defined index rate plus a margin, for an all-in rate of 3.59% at September 30, 2008. At September 30, 2008, $442.7 million was available under this facility.
     On December 13, 2007, the Company’s Board of Directors authorized a $200 million stock repurchase program of its common stock. This program allows for the repurchase of the Company’s common stock through December 31, 2009.

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During the three months and nine months ended September 30, 2008, 150,000 and 621,100 shares were repurchased under this program at a cost of approximately $3.8 million and $16.0 million, respectively. The shares of common stock purchased during the three months ended September 30, 2008 were cash settled in October 2008. On October 3, 2008, the Company repurchased under the program 1,994,400 shares of its common stock in a privately negotiated transaction at a cost of approximately $42.2 million. Since the inception of this program through October 3, 2008, the Company had repurchased a total of 2,719,700 shares at a cost of approximately $61.1 million.
Equity Investment
     See Note 4 of the Consolidated Financial Statements for information about the equity investment.
Future Operating Requirements
     We expect to finance future operating requirements with cash flows from operations, and depending on market conditions, long-term and short-term debt, and equity. Debt instruments that the Company has utilized include its revolving credit facility, the warehouse facility, senior notes, convertible subordinated notes, asset-backed securities, and sale/leaseback transactions. The Company also has issued equity at various times. As of September 30, 2008, the Company had $324.6 million available under its revolving credit facility and $442.7 million available under its warehouse facility. Despite the volatile conditions in both the credit and stock markets, the Company believes it has access to adequate capital resources to fund operating requirements.
Off Balance Sheet Arrangements
     See Note 3 of the Consolidated Financial Statements for information about off balance sheet arrangements.
Derivative Instruments
     We use derivative instruments to mitigate the impact of increases in zinc, natural gas, and diesel fuel prices and interest rates, as well as to convert a portion of our variable-rate debt to fixed-rate debt. We also use derivatives to lock in fixed interest rates in anticipation of future debt issuances. These swaps are accounted for as cash flow hedges under SFAS 133.
     Interest rate hedges
     In anticipation of a future debt issuance, we entered into interest rate swap transactions during the fourth quarter of 2006 and during 2007. These instruments, with a notional amount of $370 million, hedged the interest rate on a portion of a future debt issuance associated with an anticipated railcar leasing transaction, which closed in May 2008. These instruments settled during the second quarter of 2008. The weighted average fixed interest rate under these instruments was 5.34%. These interest rate swaps were being accounted for as cash flow hedges with changes in the fair value of the instruments of $24.5 million of loss recorded in Accumulated Other Comprehensive Loss (“AOCL”) through the date the related debt issuance closed with a principal balance of $572.2 million in May 2008. The balance is being amortized over the term of the related debt. At September 30, 2008, the balance remaining in AOCL was $22.9 million. The effect on the consolidated statement of operations for the three and nine months ended September 30, 2008 was expense of $1.1 million and $6.1 million, respectively. The expense for the nine months ended September 30, 2008 was primarily due to the ineffective portion of the hedges associated with hedged interest payments that will not be made.
     In May 2008, we entered into an interest rate swap transaction which is being used to fix the LIBOR component of the debt issuance which closed in May 2008. The fixed interest rate under this instrument is 4.126%. The amount recorded for this instrument as of September 30, 2008 in the consolidated balance sheet was a liability of $0.9 million, with $0.5 million of expense in AOCL. The effect on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was expense of $2.3 million and $3.4 million, respectively.
     During 2005 and 2006, we entered into interest rate swap transactions in anticipation of a future debt issuance. These instruments, with a notional amount of $200 million, fixed the interest rate on a portion of a future debt issuance associated with a railcar leasing transaction in 2006 and settled at maturity in the first quarter of 2006. The weighted average fixed interest rate under these instruments was 4.87%. These interest rate swaps were being accounted for as cash flow hedges with changes in the fair value of the instruments of $4.5 million in income recorded in AOCL through the date the related debt issuance closed in May 2006. The balance is being amortized over the term of the related debt. At September 30, 2008, the balance remaining in AOCL was $3.5 million. The effect of the amortization on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was income of $0.1 million and $0.3 million, respectively. The effect on the same periods in the prior year was $0.1 million and $0.3 million, respectively.

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     Natural gas and diesel fuel
     We continued a program to mitigate the impact of fluctuations in the price of natural gas and diesel fuel purchases. The intent of the program is to protect our operating profit from adverse price changes by entering into derivative instruments. For those instruments that do not qualify for hedge accounting treatment, any changes in their valuation are recorded directly to the consolidated statement of operations. In July of 2008 we settled our outstanding diesel fuel hedge contracts. The effect of the settled diesel fuel contracts on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was income of $1.1 million. The amount recorded in the consolidated balance sheet for natural gas hedges was a liability of $2.0 million as of September 30, 2008 and $1.2 million of expense in AOCL for both derivative instruments. The effect of both derivatives on the consolidated statement of operations for the three and nine month periods ended September 30, 2008 was expense of $0.4 million and income of $9.5 million, respectively, including losses of $1.7 million and gains of $5.2 million resulting from the mark to market valuation for the three and nine months periods ended September 30, 2008, respectively. For the three and nine month periods ended September 30, 2007 the effect on the consolidated statement of operations was income of $0.1 million and $1.1 million, respectively.
     Zinc
     We also continued a program to mitigate the impact of fluctuations in the price of zinc purchases. The intent of this program is to protect our operating profit from adverse price changes by entering into derivative instruments. These instruments are short term with monthly maturities and no remaining balances in AOCL as of September 30, 2008. The effect on the consolidated statement of operations for the three months ended September 30, 2008 was not material. The effect on the consolidated statement of operations for the nine months ended September 30, 2008 was income of $0.9 million and for the three and nine month periods ended September 30, 2007 was income of $1.2 million and $2.0 million, respectively.
Contractual Obligation and Commercial Commitments
     As of September 30, 2008, other commercial commitments related to letters of credit increased to $100.5 million from $93.3 million as of December 31, 2007. Refer to Note 8 of the Consolidated Financial Statements for changes to our outstanding debt and maturities. Other commercial commitments that relate to operating leases under sale/leaseback transactions were basically unchanged as of September 30, 2008.
Recent Accounting Pronouncements
     See Note 1 of the Consolidated Financial Statements for information about recent accounting pronouncements.
Forward-Looking Statements
     This quarterly report on Form 10-Q (or statements otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the Securities and Exchange Commission (“SEC”), news releases, conferences, World Wide Web postings or otherwise) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking statements and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performances, estimates, projections, goals, and forecasts. Trinity uses the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” and similar expressions to identify these forward-looking statements. Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements, include among others:
  market conditions and demand for our business products and services;
 
  the cyclical nature of industries in which we compete;
 
  continued expansion of the structural wind towers business;
 
  variations in weather in areas where our construction and energy products are sold, used, or installed;
 
  disruption of manufacturing capacity due to weather related events;
 
  the timing of introductions of new products;
 
  the timing of customer orders or a breach of customer contracts;
 
  product price changes;
 
  changes in mix of products sold;
 
  the extent of utilization of manufacturing capacity;
 
  availability and costs of steel, component parts, supplies, and other raw materials;

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  competition and other competitive factors;
 
  changing technologies;
 
  surcharges and other fees added to fixed pricing agreements for raw materials;
 
  interest rates and capital costs;
 
  counter-party risks for financial instruments;
 
  long-term funding of our operations;
 
  taxes;
 
  the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico;
 
  changes in import and export quotas and regulations;
 
  business conditions in foreign economies;
 
  results of litigation; and
 
  legal, regulatory, and environmental issues.
     Any forward-looking statement speaks only as of the date on which such statement is made. Trinity undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
     There has been no material change in our market risks since December 31, 2007. Refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for a discussion of debt-related activity and the impact of hedging activity for the three and nine months ended September 30, 2008.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
     The Company maintains controls and procedures designed to ensure that it is able to collect the information it is required to disclose in the reports it files with the SEC, and to process, summarize, and disclose this information within the time periods specified in the rules of the SEC. The Company’s Chief Executive and Chief Financial Officers are responsible for establishing and maintaining these procedures and, as required by the rules of the SEC, evaluating their effectiveness. Based on their evaluation of the Company’s disclosure controls and procedures which took place as of the end of the period covered by this report, the Chief Executive and Chief Financial Officers believe that these procedures are effective to ensure that the Company is able to collect, process, and disclose the information it is required to disclose in the reports it files with the SEC within the required time periods.
Internal Controls
     The Company maintains a system of internal controls designed to provide reasonable assurance that: transactions are executed in accordance with management’s general or specific authorization; transactions are recorded as necessary (1) to permit preparation of financial statements in conformity with generally accepted accounting principles, and (2) to maintain accountability for assets; access to assets is permitted only in accordance with management’s general or specific authorization; and the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
     During the period covered by this report, there have been no changes in the Company’s internal controls over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal controls over financial reporting.

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PART II
Item 1. Legal Proceedings
     The information provided in Note 15 of the Consolidated Financial Statements is hereby incorporated into this Part II, Item 1 by reference.
Item 1A. Risk Factors
     There have been no material changes from the risk factors previously disclosed in Item 1A of our 2007 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
     This table provides information with respect to purchases by the Company of shares of its Common Stock during the quarter ended September 30, 2008:
                                 
                            Maximum
                            Number (or
                    Total Number of   Approximate
                    Shares (or Units)   Dollar Value) of
                    Purchased as   Shares (or Units)
                    Part of Publicly   that May Yet Be
    Number of   Average Price   Announced   Purchased
    Shares   Paid per   Plans or   Under the Plans
Period   Purchased(1)   Share(1)   Programs (2)   or Programs (2)
July 1, 2008 through July 31, 2008
    4,554     $ 32.24           $ 184,941,063  
August 1, 2008 through August 31, 2008
        $           $ 184,941,063  
September 1, 2008 through September 30, 2008
    152,438     $ 25.75       150,000     $ 181,092,648  
 
                               
Total
    156,992     $ 25.94       150,000     $ 181,092,648  
 
                               
 
(1)   These columns include the following transactions during the three months ended September 30, 2008: (i) the deemed surrender to the Company of 4,100 shares of common stock to pay the exercise price in connection with the exercise of employee stock options, (ii) the surrender to the Company of 2,438 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees, (iii) the purchase of 454 shares of common stock by the Trustee for assets held in a non-qualified employee profit sharing plan trust, and (iv) the purchase of 150,000 shares of common stock on the open market as part of the stock repurchase program.
 
(2)   On December 13, 2007, the Company’s Board of Directors authorized a $200 million stock repurchase program of its common stock. This program allows for the repurchase of the Company’s common stock through December 31, 2009. During the three months and nine months ended September 30, 2008, 150,000 and 621,100 shares were repurchased under this program at a cost of approximately $3.8 million and $16.0 million, respectively. The shares of common stock purchased during the three months ended September 30, 2008 were cash settled in October 2008. On October 3, 2008, the Company repurchased under the program 1,994,400 shares of its common stock in a privately negotiated transaction at a cost of approximately $42.2 million. Since the inception of this program through October 3, 2008, the Company had purchased a total of 2,719,700 shares at a cost of approximately $61.1 million.
Item 3. Defaults Upon Senior Securities
     None.
Item 4. Submission of Matters to a Vote of Security Holders
     None.
Item 5. Other Information
     None.

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Item 6. Exhibits
     
Exhibit Number   Description
 
   
10.1.1
  Form of Amended and Restated Severance Agreement, dated September 9, 2008, entered into between Trinity Industries, Inc. and Chief Executive Officer and each current Named Executive Officer (filed herewith).*
 
   
10.7
  Supplemental Retirement Plan as Amended and Restated effective January 1, 2009 (filed herewith).*
 
   
10.11.3
  Form of Restricted Stock Grant Agreement (filed herewith).*
 
   
10.11.4
  Form of Restricted Stock Unit Agreement for Non-Employee Directors (filed herewith).*
 
   
10.27
  Board Compensation Summary Sheet (filed herewith).*
 
   
31.1
  Rule 13a-15(e) and 15d-15(e) Certification of Chief Executive Officer (filed herewith).
 
   
31.2
  Rule 13a-15(e) and 15d-15(e) Certification of Chief Financial Officer (filed herewith).
 
   
32.1
  Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
 
   
32.2
  Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
 
*   Management contracts and compensatory plan arrangements.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
 
       
TRINITY INDUSTRIES, INC.
  By /s/ WILLIAM A. MCWHIRTER II
 
   
Registrant
       
 
  William A. McWhirter II    
 
  Senior Vice President and    
 
  Chief Financial Officer    
 
  October 30, 2008    

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INDEX TO EXHIBITS
     
Exhibit Number   Description
 
   
10.1.1
  Form of Amended and Restated Severance Agreement, dated September 9, 2008, entered into between Trinity Industries, Inc. and Chief Executive Officer and each current Named Executive Officer (filed herewith).*
 
   
10.7
  Supplemental Retirement Plan as Amended and Restated effective January 1, 2009 (filed herewith).*
 
   
10.11.3
  Form of Restricted Stock Grant Agreement (filed herewith).*
 
   
10.11.4
  Form of Restricted Stock Unit Agreement for Non-Employee Directors (filed herewith).*
 
   
10.27
  Board Compensation Summary Sheet (filed herewith).*
 
   
31.1
  Rule 13a-15(e) and 15d-15(e) Certification of Chief Executive Officer (filed herewith).
 
   
31.2
  Rule 13a-15(e) and 15d-15(e) Certification of Chief Financial Officer (filed herewith).
 
   
32.1
  Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
 
   
32.2
  Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
 
*   Management contracts and compensatory plan arrangements.

34