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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
-- ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|X | SECURITIES EXCHANGE ACT OF 1934
--
For the fiscal year ended March 31, 1994
OR
-- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
| | SECURITIES EXCHANGE ACT OF 1934
--
For the transition period from to
Commission File Number 1-6903
Trinity Industries, Inc.
( Exact name of registrant as specified in its charter)
Delaware 75-0225040
(State of Incorporation) (I.R.S. Employer Identification No.)
2525 Stemmons Freeway
Dallas, Texas 75207-2401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 689-0592
Securities Registered Pursuant to Section 12(b) of the Act
Name of each exchange
Title of each class on which registered
Common stock, $1.00 par value New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. --
|X |
--
The aggregate market value of voting stock held by nonaffiliates of the
Registrant is $1,396,221,638 as of May 27, 1994.
39,741,021
( Number of Shares of common stock outstanding as of May 27, 1994)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1994 Annual Report to Stockholders for the
fiscal year ended March 31, 1994 are incorporated by reference into Parts
I, II, and IV hereof and portions of the Registrant's definitive Proxy
Statement for the 1994 Annual Meeting of Stockholders to be held
July 20, 1994 are incorporated by reference into Part III hereof.
PART I
Item 1. Business.
General Development of Business. Trinity Industries, Inc. (the
"Registrant") was originally incorporated under the laws of the State of
Texas in 1933. On March 27, 1987, Trinity became a Delaware
corporation by merger into a wholly-owned subsidiary of the same name.
Narrative Description of Business and Financial Information About
Industry Segments. The Registrant is engaged in the manufacture,
marketing, and leasing of a variety of metal products consisting principally
of (1) "Railcars" (i.e. railroad freight cars), principally tank cars, hopper
cars, gondola cars, intermodal cars and miscellaneous other freight cars;
(2) "Marine Products" such as boats, barges and various offshore service
vessels for ocean and inland waterway service and military vessels for the
United States Government and, to a limited extent, various size vessels for
international ocean transportation companies; (3) "Construction Products"
such as highway guardrail and highway and railway bridges, power plants,
mills, etc, highway safety products, passenger loading bridges and
conveyor systems for airports and other people and baggage conveyance
requirements, ready-mix concrete production and aggregates including
distribution, and providing raw material to owners, contractors and sub-
contractors for use in the building and foundation industry; (4)
"Containers" such as (a) extremely large, heavy pressure vessels and other
heavy welded products including industrial silencers, desalinators,
evaporators, and gas processing systems, (b) pressure and non-pressure
containers for the storage and transportation of liquefied gases, brewery
products and other liquid and dry products, and (c) heat transfer
equipment for the chemical, petroleum and petrochemical industries; (5)
"Metal Components" such as weld fittings (tees, elbows, reducers, caps,
flanges, etc.) used in pressure piping systems and container heads (the
ends of pressure and non-pressure containers) for use internally and by
other manufacturers of containers; and (6) "Leasing" of Registrant
manufactured railcars and barges to various industries.
Various financial information concerning the Registrant's industry
segments for each of the last three fiscal years is included in the
Registrant's 1994 Annual Report to Stockholders on page 22 under the
heading "Segment Information", and such section is incorporated herein by
reference.
Railcars. The Registrant manufactures railroad freight cars,
principally pressure and non-pressure tank cars, hopper cars, intermodal
cars and gondola cars used for transporting a wide variety of liquids, gases
and dry cargo. Tank cars transport products such as liquefied petroleum
gas, liquid fertilizer, sulfur, sulfuric acids and corn syrup. Covered hopper
cars carry cargo such as grain, dry fertilizer, plastic pellets and cement.
Open-top hoppers haul coal, and top-loading gondola cars transport a
variety of heavy bulk commodities such as scrap metals, finished flat steel
products, machinery and lumber. Intermodal cars transport various
products which have been loaded in containers.
Marine Products. The Registrant manufactures a variety of marine
products pursuant to customer orders. It produces various types of
vessels for offshore service including supply, crew, fishing and other
types of boats. The Registrant is currently constructing various military
vessels for both the United States Army and Navy. The Registrant
produces river hopper barges which are used to carry coal, grain and
miscellaneous commodities. The purchasers of the Registrant's marine
products include inland waterway marine operators, offshore oil and gas
drillers and operators, international ocean transportation companies, barge
transport companies and domestic and foreign governmental authorities.
Construction Products. The construction products manufactured
by the Registrant include beams, girders, columns, highway guardrail and
highway safety devices and related barrier products, ready-mix concrete
and aggregates, passenger loading bridges, and baggage handling systems.
These products are used in the bridge, highway construction and building
industries and airports. Some of the sales of beams, girders and columns
are to general contractors and subcontractors on highway construction
projects. Generally, customers for highway guardrail and highway safety
devices are highway departments or subcontractors on highway projects.
Passenger loading bridges and conveyor systems are generally sold to
contractors, airports, or airlines as part of airport terminal equipment.
Ready-mix concrete and aggregates are used in the building and foundation
industry and customers include primarily owners, contractors and sub-
contractors.
Containers. The Registrant is engaged in manufacturing metal
containers consisting of extremely large, heavy pressure vessels and other
heavy welded products, including industrial silencers, desalinators,
evaporators, and gas processing systems and for the storage and
transportation of liquefied petroleum ("LP") gas and anhydrous ammonia
fertilizer. Pressure LP gas containers are utilized at industrial plants,
utilities, small businesses and in suburban and rural areas for residential
heating and cooking needs. Fertilizer containers are manufactured for
highway and rail transport, bulk storage, farm storage and the application
and distribution of anhydrous ammonia. The Registrant also makes heat
transfer equipment for the chemical, petroleum and petrochemical
industries and a complete line of custom vessels, standard steam jacketed
kettles, mix cookers, and custom-fabricated cooking vessels for the food,
meat, dairy, pharmaceutical, cosmetic and chemical industries.
Metal Components. The metal components manufactured by the
Registrant are made from ferrous and non-ferrous metals and their alloys
and consist principally of butt weld type fittings, flanges and pressure and
non-pressure container heads. The weld fittings include caps, elbows,
return bends, concentric and eccentric reducers, full and reducing outlet
tees, and a full line of pipe flanges, all of which are pressure rated. The
Registrant manufactures and stocks, in standard, extra-heavy and double-
extra-heavy weights and in various diameters, weld caps, tees, reducers,
elbows, return bends, flanges and also manufactures to customer
specifications. The basic raw materials for weld fittings and flanges are
carbon steel, stainless steel, aluminum, chrome-moly and other metal
tubing or seamless pipe and forgings. The Registrant sells its weld fittings
and flanges to distributors and to other manufacturers of weld fittings.
Container heads manufactured by the Registrant are pressed metal
components used in the further manufacture of a finished product. Since
the manufacture of container heads requires a substantial investment in
heavy equipment and dies, many other manufacturers order container
heads from the Registrant. Container heads are manufactured in various
shapes and may be pressure rated or non-pressure, depending on the
intended use in further manufacture. Other pressed shapes are also hot-
or cold-formed to customer requirements.
Leasing. The Company has one wholly-owned leasing subsidiary,
Trinity Industries Leasing Company ("TILC"), which was incorporated in
1979. TILC is engaged in leasing specialized types of railcars, consisting
of both tank cars and hopper cars, to industrial companies in the
petroleum, chemical, grain, food processing, fertilizer and other industries
which supply cars to the railroads. At March 31, 1994, TILC had under
lease 10,366 railcars. TILC owns 219 river hopper barges which are
operated under an agreement which provides for management of the
barges. The barges are generally used for movement of commodities on
the inland waterway system, primarily the Mississippi and Missouri Rivers.
Substantially all equipment leased by TILC was purchased from the
Registrant at prices comparable to the prices for equipment sold by the
Registrant to third parties. As of March 31, 1994, TILC had equipment on
lease or available for lease purchased from the Registrant at a cost of
$536.1 million. Generally, TILC purchases the equipment to be leased
only after a lessee has committed to lease such equipment.
The volume of equipment purchased and leased by TILC depends
upon a number of factors, including the demand for equipment
manufactured by the Registrant, the cost and availability of funds to
finance the purchase of equipment, the Registrant's decision to solicit
orders for the purchase or lease of equipment and factors which may
affect the decision of the Registrant's customers as to whether to
purchase or lease equipment.
Although the Registrant is not contractually obligated to offer to
TILC equipment proposed to be leased by the Registrant's customers, it is
the Registrant's intention to effect all such leasing transactions through
TILC. Similarly, while TILC is not contractually obligated to purchase from
the Registrant any equipment proposed to be leased, TILC intends to
purchase and lease all equipment which the Registrant's customers desire
to lease when the lease rentals and other terms of the proposed lease are
satisfactory to TILC, subject to the availability and cost of funds to finance
the acquisition of the equipment.
Marketing, Raw Materials, Employees and Competition. The
Registrant operates only in the continental United States. The Registrant
sells substantially all of its products through its own salesmen operating
from offices in Montgomery, Alabama; Elizabethtown and Paducah,
Kentucky; Shreveport, Louisiana; Flint, Michigan; St. Louis, Missouri;
Gulfport, Mississippi; Asheville, North Carolina; Cincinnati and Girard,
Ohio; Beaumont, Dallas/Ft. Worth, Houston and Navasota, Texas; and
Centerville, Utah. Independent sales representatives are also used to a
limited extent. The Registrant markets railcars, containers and metal
components throughout the United States. Except in the case of weld
fittings, guardrail, and standard size LP gas containers, the Registrant's
products are ordinarily fabricated to the customer's specifications pursuant
to a purchase order.
The principal materials used by the Registrant are steel plate,
structural steel shapes and steel forgings. There are numerous domestic
and foreign sources of such steel and most other materials used by the
Registrant.
The Registrant currently has approximately 14,700 employees, of
which approximately 13,450 are production employees and 1,250 are
administrative, sales, supervisory and office employees.
There are numerous companies located throughout the United
States that are engaged in the business of manufacturing various railcars
and containers of the types manufactured by the Registrant, and these
industries are highly competitive. Companies manufacturing products
which compete with the Registrant's construction products consist of
numerous other structural fabricators and ready-mix concrete producers,
most of which are smaller than the Registrant. Small shipyards located on
inland waterways and medium to large size shipyards located on or near
ports on navigable waterways produce marine products which compete
with those manufactured by the Registrant. Both domestic and foreign
manufacturers of metal components, some of which are larger than the
Registrant, compete with the Registrant. A number of well-established
companies actively compete with TILC in the business of owning and
leasing railcars, as well as banks, investment partnerships and other
financial and commercial institutions.
Recent Developments. Information concerning the Registrant's
business acquisitions are included in the Registrant's 1994 Annual Report
to Stockholders under the heading "Business Acquisitions," (pages 23
through 24) and such section is incorporated herein by reference.
Other Matters. The Registrant is not materially affected by federal,
state and local provisions which have been enacted or adopted regulating
the discharge of materials into the environment or otherwise relating to the
protection of the environment. To date, the Registrant has not suffered
any material shortages with respect to obtaining sufficient energy supplies
to operate its various plant facilities or its transportation vehicles. Future
limitations on the availability or consumption of petroleum products
(particularly natural gas for plant operations and diesel fuel for vehicles)
could have an adverse effect upon the Registrant's ability to conduct its
business. The likelihood of such an occurrence or its duration, and its
ultimate effect on the Registrant's operations, cannot be reasonably
predicted at this time.
Item 2. Properties.
The Registrant's principal executive offices are located in a ten story office building containing
approximately 107,000 sq. ft. and an adjacent building containing approximately 50,000 sq. ft., each
owned by the Registrant, in Dallas, Texas. The following table sets forth certain salient facts with
respect to each of the operating plant properties owned and/or leased by the Registrant at March 31,
1994:
Registrant's Uses of Approx.
Interest in Premises Bldg. Area Expiration Annual
Plant Location Property (1) (Sq Ft.) Date Rentals
Ackerman, MS Fee (e) 78,000 - -
Asheville, NC Lease (a) 94,000 06/30/94 $180,000
Beaumont, TX
(2 plants) Fee (a,b) 431,000 - -
Bessemer, AL Fee (a) 1,183,000 - -
Brownsville, PA Fee (b) 200,000 - -
Butler, PA Fee (a) 40,000 - -
Butler, PA Lease (a) 30,000 12/31/97 $ 65,000
Caruthersville, MO Fee (b) 302,000 - -
Cedartown, GA Fee (d) 97,000 - -
Centerville, UT Fee (c) 63,000 - -
Cincinnati, OH Fee (d,e) 150,000 - -
Crown Point, LA Fee (b) 27,000 - -
Dallas, TX
(2 plants) Fee (a) 447,000 - -
Denton, TX Fee (a) 65,000 - -
Elizabethtown, KY Fee (c) 40,000 - -
Elkhart, IN Fee (e) 125,000 - -
Enid, OK Fee (e) 73,000 - -
Fairfield, OH Lease (d) 72,000 06/30/95 $ 72,000
Ft. Worth, TX
(6 plants) Fee (a,c,d) 973,000 - -
Girard, OH
(2 plants) Fee (c) 326,000 - -
Greenville, PA Fee (a) 918,000 - -
Gulfport, MS Fee (b) 438,000 - -
Harvey, LA Lease (b) 34,000 03/26/96 $ 86,000
Houston, TX
(3 plants) Fee (b,c,d) 620,000 - -
Johnstown, PA Fee (a) 152,000 - -
Lima, OH Fee (c) 72,000 - -
Lockport, LA Fee (b) 43,000 - -
Longview, TX
(4 plants) Fee (a,d) 557,000 - -
Longview, TX Lease (a) 57,000 10/31/95 $126,000
Registrant's Uses of Approx.
Interest in Premises Bldg. Area Expiration Annual
Plant Location Property (1) (Sq Ft.) Date Rentals
Madisonville, LA Fee (b) 137,000 - -
McKees Rocks, PA Fee (a) 600,000 - -
Montgomery, AL
(2 plants) Fee (c) 421,000 - -
Moss Point, MS
(2 plants) Fee (b) 155,000 - -
Mt. Orab, OH Fee (a) 183,000 - -
Navasota, TX Fee (e) 151,000 - -
New London, MN Fee (d) 20,000 - -
New Orleans, LA Lease (2) (b) 254,000 12/31/16 $ 42,000
Oklahoma City, OK Fee (a,d) 260,000 - -
Orange, TX Fee (d) 735,000 - -
Paducah, KY Fee (b) 34,000 - -
Panama City, FL Fee (b) 41,000 - -
Paris, TN Fee (a) 21,000 - -
Pine Bluff, AR Fee (d) 34,000 - -
Quincy, IL Fee (d) 95,000 - -
Rocky Mount, NC Fee (d) 53,000 - -
Saginaw, TX
(2 plants) Fee (a) 263,000 - -
San Antonio, TX Fee (c) 246,000 - -
Shreveport, LA Lease (d) 691,000 11/30/42 $ 12,000
Tulsa, OK Fee (a,d) 114,000 - -
Vidor, TX Fee (a) 40,000 - -
West Memphis, AR Fee (e) 63,000 - -
(1) (a) Manufacture of Railcars
(b) Manufacture of Marine Products
(c) Manufacture of Construction Products
(d) Manufacture of Containers
(e) Manufacture of Metal Components
(2) The lease may be canceled by either party after 12/31/96.
All machinery and equipment and the buildings occupied by the
Registrant are maintained in good condition. The Registrant estimates that
its plant facilities were utilized during the fiscal year at an average of
approximately 60 percent of present productive capacity for railcars, 70
percent for Marine Products, 75 percent for Construction Products, 65
percent for Containers, and 75 percent for Metal Components.
Item 3. Legal Proceedings.
See page 28 of the Registrant's 1994 Annual Report to
Stockholders which is incorporated herein by reference for a
discussion of legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders
during the fourth quarter of fiscal year 1994.
___________________
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters.
Market for the Registrant's common stock and related stockholder
matters are incorporated herein by reference from the information
contained on page 3 under the caption "Corporate Profile" and on page 15
under the caption "Financial Summary" of the Registrant's 1994 Annual
Report to Stockholders.
Item 6. Selected Financial Data.
Selected financial data is incorporated herein by reference from the
information contained on page 15 under the caption "Financial Summary"
of the Registrant's 1994 Annual Report to Stockholders.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Management's discussion and analysis of financial condition and
results of operations are incorporated herein by reference from the
Registrant's 1994 Annual Report to Stockholders, pages 16 through 17.
Other persons, who are not executive officers of the Registrant,
are listed on page 30 under the caption "Division Officers" of the Annual
Report to Stockholders, and such caption is hereby incorporated by
reference.
Item 8. Financial Statements and Supplementary Data.
Financial statements of the Registrant at March 31, 1994 and
1993 and for each of the three years in the period ended March 31, 1994
and the auditor's report thereon, and the Registrant's unaudited quarterly
financial data for the two year period ended March 31, 1994, are
incorporated by reference from the Registrant's 1994 Annual Report to
Stockholders, pages 18 through 29.
Item 9. Disagreements on Accounting and Financial Disclosure.
No disclosure required.
______________________
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information concerning the directors and executive officers of the
Registrant is incorporated herein by reference from the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders on July
20, 1994, page 3, under the caption "Election of Directors".
Executive Officers of the Registrant.*
The following table sets forth the names and ages of all executive officers of the Registrant, the
nature of any family relationship between them, all positions and offices with the Registrant presently
held by them, the year each person first became an officer and the term of each person's office:
Officer Term
Name(1)(2)(3) Age Office Since Expires(4)
W. Ray Wallace 71 Chairman, President & 1958 July 1994
Chief Executive Officer
Ralph A. Banks, Jr. 70 Senior Vice President 1962 July 1994
Richard G. Brown 70 Senior Vice President 1979 July 1994
K.W. Lewis 55 Senior Vice President 1974 July 1994
Lee D. McElroy 71 Senior Vice President 1992 July 1994
Timothy R. Wallace 40 Director & Group 1993 July 1994
Vice President
William E. Adams 68 Group Vice President 1993 July 1994
John Dane, III 43 Group Vice President 1993 July 1994
John T. Sanford 42 Group Vice President 1993 July 1994
Mark Stiles 45 Group Vice President 1993 July 1994
Jack L. Cunningham, Jr. 49 Vice President 1982 July 1994
John M. Lee 33 Vice President 1994 July 1994
R. A. Martin 59 Vice President 1974 July 1994
F. Dean Phelps, Jr. 50 Vice President 1979 July 1994
Joseph F. Piriano 57 Vice President 1992 July 1994
Neil O. Shoop 50 Treasurer 1985 July 1994
William J. Goodwin 46 Controller 1986 July 1994
J.J. French, Jr. 63 Secretary 1970 July 1994
* This data is furnished as additional information pursuant to instructions to Item 401 to Regulation S-K
and in lieu of inclusion in the Registrant's Proxy Statement.
(1) W. Ray Wallace, Chairman, President & Chief Executive Officer, is the father of Timothy R.
Wallace, a Director and Group Vice President of the Registrant.
(2) Mr. Adams joined the Registrant in 1990 upon the acquisition by the Registrant of Beaird Industries,
Inc. For at least five years prior thereto, Mr. Adams was President and General Manager of Beaird. Mr.
Stiles joined the Registrant in 1991 upon the acquisition by the Registrant of Transit Mix Concrete
Company. For at least five years prior thereto, Mr. Stiles was Executive Vice President and General
Manager of Transit Mix. Mr. Piriano was Director of Purchasing for the Registrant for at least the last
five years. Mr. Lee joined the Registrant in 1994. For at least five years prior thereto, Mr. Lee was a
manager for a national public accounting firm. All of the other above-mentioned executive officers,
except Mr. French, have been in the full-time employ of the Registrant or its subsidiaries for more than
five years. Although the titles of certain such officers have changed during the past five years, all have
performed essentially the same duties during such period of time.
(3) Mr. French, an attorney, is President of Joe French & Associates, a Professional Corporation. For
at least five years prior thereto, Mr. French was employed by Locke Purnell Rain Harrell, a Professional
Corporation.
(4) It is anticipated that all of such officers will be reelected at the Annual Meeting of the Board of
Directors to be held on July 20, 1994.
Item 11. Executive Compensation.
Information on executive compensation is incorporated herein by
reference from the Registrant's definitive proxy statement for the Annual
Meeting of Stockholders on July 20, 1994, page 6 under the caption
"Executive Compensation and Other Matters".
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Information concerning security ownership of certain beneficial
owners and management is incorporated herein by reference from the
Registrant's definitive proxy statement for the Annual Meeting of
Stockholders on July 20, 1994, page 2, under the caption "Voting
Securities and Stockholders", and page 3, under the caption "Election of
Directors".
Item 13. Certain Relationships and Related Transactions.
Information concerning certain relationships and related
transactions is incorporated herein by reference from the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders on July
20, 1994, pages 3 through 4, under the caption "Election of Directors",
and page 15, under the caption "Certain Transactions".
___________________
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1&2. Financial statements and financial statement
schedules.
The financial statements and schedules listed
in the accompanying indices to financial
statements and financial statement schedules
are filed as part of this Annual Report Form
10-K.
3. Exhibits.
The exhibits listed on the accompanying index
to exhibits are filed as part of this Annual
Report Form 10-K.
(b) Reports on Form 8-K
No Form 8-K was filed during the fourth
quarter of fiscal 1994.
Trinity Industries, Inc.
Financial Statements and Financial Statement Schedules
for Inclusion in Annual Report Form 10-K
Year Ended March 31, 1994
Trinity Industries, Inc.
Index to Financial Statements
and Financial Statement Schedules
(Item 14 (a))
REFERENCE
1994 Annual
Form Report to
10-K Stockholders
(Page) (Page)
Consolidated balance sheet at
March 31, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 19
For each of the three years in the
period ended March 31, 1994:
Consolidated income statement . . . . . . . . . . . . . . . . . . . . . . . . . - 18
Consolidated statement of cash flows. . . . . . . . . . . . . . . . . . . . . . - 20
Consolidated statement of
stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 21
Notes to consolidated financial
statements . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . - 21
Supplemental information:
Supplementary unaudited quarterly data . . . . . . . . . . . . . . . . . . . . . - 29
Consolidated financial statement schedules
for each of the three years in the
period ended March 31, 1994:
V - Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . 12 -
VI - Accumulated depreciation and
amortization of property,
plant and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . 13 -
VIII - Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . 14 -
IX - Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 14 -
X - Supplementary income statement
information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 -
All other schedules have been omitted since the required information is not present or is not
present in amounts sufficient to require submission of the schedules, or because the information
required is included in the consolidated financial statements, including the notes thereto.
Financial statements of the Registrant's unconsolidated foreign affiliates are not presented
herein, because they do not constitute significant subsidiaries.
The consolidated financial statements and supplementary information listed in the above index
which are included in the 1994 Annual Report to Stockholders are hereby incorporated by reference.
EXHIBIT (23)
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual
Report (Form 10-K) of Trinity Industries, Inc. of our report dated May 10, 1994,
included in the 1994 Annual Report to Stockholders of Trinity Industries,
Inc.
Our audits also included the financial statement schedules of
Trinity Industries, Inc. listed in Item 14(a). These schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial
statement schedules referred to above, when considered in relation to the
basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
We also consent to the incorporation by reference in
Post-Effective Amendment No. 3 to the Registration Statement (Form S-8,
No. 2-64813),
Post-Effective amendment No. 1 to the Registration Statement (Form S-8,
No. 33-10937), Post-Effective Amendment No. 1 to the Registration
Statement (Form S-3, No. 33-12526), Amendment No. 1 to the
Registration Statement (Form S-3, No. 33-57338), Registration Statement
(Form S-8, No. 33-35514), Registration Statement (Form S-8, No. 33-
73026), Registration Statement (Form S-4, No. 33-51709) of Trinity
Industries, Inc. and in the related Prospectuses of our report dated May
10, 1994, with respect to the consolidated financial statements and
schedules of Trinity Industries, Inc. included or incorporated by reference
in this Annual Report (Form 10-K) for the year ended March 31, 1994.
ERNST & YOUNG
Dallas, Texas
June 28, 1994
SCHEDULE V
Trinity Industries, Inc.
Property, Plant and Equipment
Year Ended March 31, 1994, 1993 and 1992
(in millions)
Balance at Retire- Balance
beginning Additions Acquisi- ments at end
of year at cost tions or sales of year
Year Ended March 31, 1994
Land. . . . . . . $ 26.5 $ 0.5 $ 2.5 $ - $ 29.5
Buildings &
improvements . . 163.0 5.8 11.4 0.9 179.3
Machinery &
equipment. . . . 302.1 36.1 30.1 7.3 361.0
Construction
in progress. . . 18.2 2.8 - - 21.0
Equipment
on lease . . . . 476.9 40.4 - 38.1 479.2
$986.7 $ 85.6 $ 44.0 $46.3 $1,070.0
Year Ended March 31, 1993
Land. . . . . . . $ 23.6 $ 0.4 $ 3.0 $ 0.5 $ 26.5
Buildings &
improvements . . 155.7 3.9 6.6 3.2 163.0
Machinery &
equipment. . . . 276.3 24.1 10.8 9.1 302.1
Construction
in progress. . . 10.4 7.8 - - 18.2
Equipment
on lease . . . . 412.2 69.6 - 4.9 476.9
$878.2 $105.8 $ 20.4 $17.7 $ 986.7
Year Ended March 31, 1992
Land. . . . . . . $ 22.2 $ 0.2 $ 1.2 $ - $ 23.6
Buildings &
improvements . . 140.5 10.1 5.3 0.2 155.7
Machinery &
equipment. . . . 245.1 18.5 18.2 5.5 276.3
Construction
in progress. . . 15.0 (4.9) 0.3 - 10.4
Equipment
on lease . . . . 412.0 64.7 - 64.5 412.2
$834.8 $ 88.6 $ 25.0 $70.2 $ 878.2
SCHEDULE VI
Trinity Industries, Inc.
Accumulated Depreciation and Amortization
of Property, Plant and Equipment
Year Ended March 31, 1994, 1993 and 1992
(in millions)
Additions
Balance at charged to
beginning costs and Retirements Balance at
of year expenses or sales end of year
Year Ended March 31, 1994
Buildings & improvements $ 59.9 $ 11.8 $ 0.8 $ 70.9
Machinery & equipment. . 163.6 32.9 4.4 192.1
Equipment on lease . . . 132.2 20.2 12.5 139.9
$355.7 $ 64.9 $17.7 $402.9
Year Ended March 31, 1993
Buildings & improvements $ 51.9 $ 9.8 $ 1.8 $ 59.9
Machinery & equipment. . 142.9 27.5 6.8 163.6
Equipment on lease . . . 115.7 17.2 0.7 132.2
$310.5 $ 54.5 $ 9.3 $355.7
Year Ended March 31, 1992
Buildings & improvements $ 43.6 $ 8.5 $ 0.2 $ 51.9
Machinery & equipment. . 124.1 24.2 5.4 142.9
Equipment on lease . . . 125.3 15.6 25.2 115.7
$293.0 $ 48.3 $30.8 $310.5
Depreciation is provided on a straight-line basis on estimated useful lives;
buildings and improvements - 5 to 33 years, machinery and equipment - 2 to 20
years, and equipment on lease - 5 to 30 years.
SCHEDULE VIII
Trinity Industries, Inc.
Allowance for Doubtful Accounts
Year Ended March 31, 1994, 1993 and 1992
(in millions)
Additions
Balance at charged to Accounts Balance
beginning costs and charged at end
of year expenses off of year
Year Ended March 31, 1994 $ 1.2 $ 0.3 $0.5 $ 1.0
Year Ended March 31, 1993 $ 1.5 $ 0.4 $0.7 $ 1.2
Year Ended March 31, 1992 $ 1.4 $ 0.2 $0.1 $ 1.5
SCHEDULE IX
Trinity Industries, Inc.
Short-Term Borrowings
Year Ended March 31, 1994, 1993 and 1992
(in millions)
Maximum
amount Average Weighted
Weighted outstanding amount average
Balance at average at any month outstanding interest
end of interest end during during the rate during
period rate the period period the period
Short-term debt:
1994. . . . . $192.0 3.57% $192.0 $78.7 2.70%
1993. . . . . $ 15.0 4.00% $ 33.0 $ 7.2 2.51%
1992. . . . . $ 20.0 6.26% $ 78.0 $27.4 5.39%
Notes payable consist principally of borrowings under agreements with
various banks and financial institutions. Borrowings are arranged on an as-
needed basis at various terms. The average amount outstanding for each period
was computed by averaging the ending monthly balances during the year. The
weighted average interest rate for each period was computed by dividing the
interest expense by the average amount outstanding.
SCHEDULE X
Trinity Industries, Inc.
Supplementary Income Statement Information
(in millions)
Year Ended March 31
1994 1993 1992
Maintenance and repairs . . $34.5 $30.8 $27.6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this Annual Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Trinity Industries, Inc.
Registrant
By: /s/ F. Dean Phelps, Jr.
F. Dean Phelps, Jr.
Vice President
June 28, 1994
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following persons of the Registrant and in the capacities
and on the dates indicated:
Directors: Principal Executive Officer:
/s/David W. Biegler /s/ W. Ray Wallace
David W. Biegler W. Ray Wallace
Director President and Chairman
June 28, 1994 June 28, 1994
Principal Financial Officer:
/s/ K. W. Lewis
Barry J. Galt K. W. Lewis
Director Senior Vice President
June 28, 1994 June 28, 1994
Principal Accounting Officer:
/s/Dean P. Guerin /s/ F. Dean Phelps, Jr.
Dean P. Guerin F. Dean Phelps, Jr.
Director Vice President
June 28, 1994 June 28, 1994
/s/ Jess T. Hay
Jess T. Hay
Director
June 28, 1994
/s/Edmund M. Hoffman
Edmund M. Hoffman
Director
June 28, 1994
/s/Ray J. Pulley
Ray J. Pulley
Director
June 28, 1994
/s/Timothy R. Wallace
Timothy R. Wallace
Director
June 28, 1994
Trinity Industries, Inc.
Index to Exhibits
(Item 14(a))
NO. DESCRIPTION PAGE
(3.1) Certificate of Incorporation of Registrant (incorporated by reference to
Exhibit 3.A to Registration Statement No. 33-10937 filed April 8, 1987). *
(3.2) By-Laws of Registrant (incorporated by reference to Exhibit 3.2 to Form
10-K filed June 16, 1992). *
(4.1) Specimen Common Stock Certificate of Registrant (incorporated by reference
to Exhibit 3B to Registration Statement No. 33-10937 filed April 8, 1987). *
(10.1) Fixed Charges Coverage Agreement dated as of January 15, 1980, between
Registrant and Trinity Industries Leasing Company (incorporated by
reference to Exhibit 10.1 to Registration Statement No. 2-70378 filed
January 29, 1981). *
(10.2) Tax Allocation Agreement dated as of January 22, 1980 between Registrant
and its subsidiaries (including Trinity Industries Leasing Company)
(incorporated by reference to Exhibit 10.2 to Registration Statement
No. 2-70378 filed January 29, 1981). *
(10.3) Form of Executive Severance Agreement entered into between the Registrant
and all executive officers of the Registrant (other than Mr. French)
(incorporated by reference to Exhibit 10.3 to Form 10-K filed June 19, 1989). *
(10.4) Trinity Industries, Inc., Stock Option Plan With Stock Appreciation Rights
(incorporated by reference to Registration Statement No. 2-64813 filed
July 5, 1979, as amended by Post-Effective Amendment No. 1 dated July 1, 1980,
Post-Effective Amendment No.2 dated August 31, 1984, and Post-Effective
Amendment No. 3 dated July 13, 1990). *
(10.5) Directors' Retirement Plan adopted December 11, 1986 incorporated by
reference to Exhibit 10.6 to Form 10-K filed June 14, 1990). *
(10.6) 1989 Stock Option Plan with Stock Appreciation Rights (incorporated by
reference to Registration Statement No. 33-35514 filed *
(10.7) Supplemental Retirement Benefit Plan for W. Ray Wallace, effective
July 18, 1990 (incorporated by reference to Exhibit 10.8 to Form 10-K
filed June 13, 1991). *
(10.8) 1993 Stock Option and Incentive Plan (incorporated by reference to
Registration Statement No. 33-73026 filed December 15, 1993) *
Trinity Industries, Inc.
Index to Exhibits -- (Continued)
(Item 14(a))
NO. DESCRIPTION PAGE
(10.9) Pension Plan A for Salaried Employees of Trinity Industries, Inc. and
Certain Affiliates dated August 20, 1985, as amended by Amendment
No. 1 dated May 27, 1986, Amendment No. 2 dated December 30, 1986,
Amendment No. 3 dated December 12, 1986, Amendment No. 4 dated
March 31, 1987, Amendment No. 5 dated March 31, 1987, Amendment
No. 6 dated December 4, 1987, Amendment No. 7 dated July 26, 1988,
Amendment No. 8 dated July 28, 1988, Amendment No. 9 dated March
15, 1989, Amendment No. 10 dated March 31, 1989, and Amendment
No. 11 dated July 14, 1989 (incorporated by reference to Exhibit 10.9
to Form 10-K filed June 13, 1991). *
(10.10) Supplemental Profit Sharing Plan for Employees of Trinity Industries Inc.
and Certain Affiliates dated June 30, 1990, as amended by Amendment
No. 1 dated June 13, 1991. Supplemental Profit Sharing Trust for
Employees of Trinity Industries, Inc. and Certain Affiliates dated June 30,
1990, as amended by Amendment No. 1 dated June 13, 1991 (incorporated
by reference to Exhibit 10.10 to Form 10-K filed June 13, 1991). *
(13) Annual Report to Stockholders. With the exception of the information
incorporated by reference into Items 1, 5, 6, 7 and 8 of Form 10-K, the
1994 Annual Report to Stockholders is not deemed as a part of this report.
(22) Listing of subsidiaries of the Registrant. 19
(23) Consent of Independent Auditors. 11
(99.1) Annual Report on Form 11-K for employee stock purchase, savings and
similar plans filed pursuant to Rule 15d-21.
Notice: Exhibit 13 and Exhibit 99.1 have been omitted from the reproduction of this Form 10-K.
A copy of the Exhibits will be furnished upon written request to F. Dean Phelps, Vice
President, Trinity Industries, Inc., P.O. Box 568887, Dallas, Texas 75356-8887. The Registrant
may impose a reasonable fee for its expenses in connection with providing the above-referenced
Exhibit.
EXHIBIT 13
Corporate Profile
Trinity Industries, Inc. is a large manufacturer of heavy metal
products with manufacturing and fabrication operations in six
business segments: Railcars, Marine Products, Construction
Products, pressure and non-pressure Containers, Metal Components,
and Leasing. The Company, headquartered in Dallas, Texas,
produces at sixty-seven facilities containing over twelve million
square feet of manufacturing space in eighteen states.
The Company has a continuing strategy of growth through internal
expansion and strategic acquisitions within its established
business segments.
Trinity's stockholders of record numbered more than 2,700 at
March 31, 1994. Its common stock is traded on the New York Stock
Exchange under the symbol TRN.
Highlights
(in millions except per share data)
Year Ended March 31
1994 1993 1992
Revenues. . . . . . . . . . . . . . . . $1,784.9 1,540.0 1,273.3
Income before cumulative effect of change
in accounting for income taxes . . . . $ 68.3 45.0 24.3
Cumulative effect of change in
accounting for income taxes. . . . . . 7.9 - -
Net income. . . . . . . . . . . . . . . $ 76.2 45.0 24.3
Income per common and common equivalent
share before cumulative effect of
change in accounting for income taxes. $ 1.69 1.27 0.71
Cumulative effect of change in
accounting for income taxes. . . . . . 0.20 - -
Net income per common and common
equivalent share . . . . . . . . . . . $ 1.89 1.27 0.71
Cash dividends per share (1). . . . . . . $ 0.64 0.53 0.53
Stockholders' equity. . . . . . . . . . $ 570.5 507.3 379.0
Total assets:
Excluding Leasing Subsidiary. . . . . $ 959.5 735.4 716.1
Leasing Subsidiary. . . . . . . . . . $ 347.3 353.7 305.1
$1,306.8 1,089.1 1,021.2
Capital expenditures (net of business acquisitions):
Excluding Leasing Subsidiary. . . . . $ 45.2 36.2 24.1
Leasing Subsidiary. . . . . . . . . . $ 37.6 74.5 64.3
$ 82.8 110.7 88.4
(1) Net income per common and common equivalent share and Cash dividends per
share for the years ended March 31, 1993 and 1992 are restated for the
three-for-two stock split distributed on August 31, 1993.
1994 President's Letter
Trinity Industries, Inc.
The past year has been a good one for Trinity Industries,
Inc. Increased demand for our products spurred internal
expansion and strategic acquisitions. Our continued dedication
to providing quality products, outstanding service, and
competitive prices has been apparent in our ability to maintain
or improve our market share in virtually every business segment
we serve. Each of our business segments is strong and
competitive. Yet, we constantly are seeking ways to operate more
efficiently. In this rapidly changing technological age, our
employees receive valuable training using advanced methods which
result in production enhancement. We constantly monitor
technological advancements to provide our employees with the
necessary tools for producing quality products in a timely and
cost effective manner.
Our employees have demonstrated a remarkable team effort
which has improved communications between all employees. This
communication results in more productive employee teams which are
capable of meeting production challenges. Our employees are
better trained and more experienced than ever before. The
Company is committed to manufacturing quality products at
competitive prices in surroundings that are secure for employees,
environmentally discerning, and socially conscious.
Opportunities exist worldwide for our various business segments.
Our product diversification is attracting considerable interest
both nationally and internationally and has led us to make
strategic acquisitions over the past year. All of these factors
serve to strengthen our workforce and streamline our operations.
Our employees, as well as our customers, suppliers, and
stockholders are realizing the benefits of this company-wide
effort.
For its 1994 fiscal year, Trinity reported record revenues
and net income. There was an increase in revenues and income
before cumulative effect of accounting change for income taxes of
16% and 52%, respectively. In the twelve month period ended
March 31, 1994, revenues were $1.78 billion, and the Company
recorded income before cumulative effect of change in accounting
for income taxes of $68.3 million, or $1.69 per share. Net
income was $76.2 million, or $1.89 per share. For the twelve
months of the prior fiscal year, net income of $45.0 million, or
$1.27 per share, was recorded on revenues of $1.54 billion. In
the three months ended March 31, 1994, revenues totalled $452.7
million. Income before cumulative effect of change in accounting
for income taxes of $15.2 million, or $0.38 per share, was
recorded. In the prior year's comparable quarter, net income of
$14.7 million, or $0.40 per share, was recorded on revenues of
$388.9 million.
Both our Railcars and Marine Products business segments are
experiencing growth and are in the enviable position of having an
increase in orders on hand. We see the replacement of aging
railcars as the contributing factor to the reinvigorated railcar
industry. Our Marine Products segment is, likewise, seeing an
increased demand for marine vessels and barge replacements.
We are maintaining a program of construction, renovation and
expansion to accommodate this growth, and we are installing
advanced computer and robotics systems to aid in planning,
assembly and delivery of our products. Barring a significant
downturn in the economy, the increasing demand for both of these
business segments should continue.
Trinity's Construction Products segment continues to
generate new business through strategic entries into markets
throughout the United States and expansion of our product lines.
We expect to see continued growth opportunities in the upgrading
of our nation's transportation system and improvements in
residential, commercial and industrial markets.
Our Containers segment is composed of two different groups
of products. The first group of products is custom specialty
vessels to the chemical, petrochemical, refining, food and other
industries requiring large, heavy, close tolerance welding and
machining in a variety of metals. Although there has been
intense competition during the past year, customers are now
seeking numerous quotes from us. Probably being fueled by the
effective dates of the recent clean air act, this leading
indicator usually forecasts a sharp increase in orders on hand.
The second group of products is more oriented to volume
production of many similar containers - rather than one of a
kind. Generally referred to as the Liquified Petroleum Gases
("LPG") containers, this group of products is influenced by the
increase in homebuilding. We have invested in substantial
upgrades in our finishing processes which gives our LPG
Containers a superior appearance - similar to that of major home
appliances. This investment has resulted in Trinity moving ahead
in market position.
Our Metal Components segment continues to provide reliable,
responsive service to the chemical, petrochemical, process and
refining industries with an even broader offering of quality
products anticipated in the year ahead. We will maintain our
focus by expanding product lines, striving for the best
manufacturing technology available, pursuing cost effective
measures, and meeting the needs of our customers.
Serving customers as an alternative to ownership of Trinity
products is our Leasing segment. Leasing of railcars and LPG
tanks by Trinity to qualified customers gives the customer
flexibility in cash management and administrative procedures.
The Leasing segment assists in the marketing of Trinity's
products.
We expect each of our business segments to prosper in the
coming year as they support each other, serve expanding markets,
and contribute to the success of our customers and Trinity. Our
infrastructure and operating strategy will provide us with the
competitive edge for the future.
My outlook for Trinity is one of great optimism for the rest
of this decade. Based on our current performance, I foresee more
success in the coming year as we meet the needs of our customers.
As we work together to provide quality products, deliver
excellent service, and compete for the best market value --
customers, suppliers, stockholders, and employees will benefit,
and Trinity will prosper. It has been a very good year, and I am
extremely grateful to each of you for your loyalty and support.
Together, we will make fiscal 1995 even better.
Railcars
Trinity's Railcars segment manufactures a full line of freight and tank
railcars and related railcar parts and components. Trinity markets railcars to
railroads, leasing companies and private shippers (major corporations and
associations who choose to own their own railcars for movement of their
commodities and products). Railcars are used to transport bulk products and
commodities including coal, grain, cement, plastic raw materials, petroleum
products, chemicals, intermodal containers (products bundled in shipping
containers designed to fit on railcars and other modes of transportation to
minimize shipping costs), lumber, and similar products. Trinity has estab-
lished itself as a leading manufacturer of quality railcar products.
The Railcars segment reported an increase in operating profit of 97.8%
on a 36.4% increase in revenues for fiscal 1994. Revenues were $730.6 million
and operating profit was $53.2 million for the year ended March 31, 1994. In
the prior fiscal year, revenues of $535.5 million and operating profit of $26.9
million were reported.
Trinity is focused on providing exceptional value in the railcar products
it markets. Internal quality assurance programs involve all Trinity employees
in providing quality products and service to customers. QuEST, Trinity's
quality assurance program, draws on the suggestions and input of experienced,
front line production employees in order to lower operating costs and strive for
greater quality of Trinity products.
Railcar orders on hand at March 31, 1994 were at a record level reflecting
customers' confidence in Trinity's abilities as a manufacturer of quality
railcar products. Innovative manufacturing, competitive pricing, and quality
workmanship combine to position Trinity's Railcars segment as a leader in
the railcar industry.
Marine Products
Trinity's Marine Products segment builds a full line of marine vessels
and inland river hopper barges and ocean-going tanker barges, and
provides repair of marine vessels and cleaning facilities for barges.
Marine vessels and barges generally range from 100 feet to more than 350
feet and include such commercial marine vessels as fishing boats, tugs,
supply boats, large offshore barges, inland hopper barges, crew boats,
ferries, oceanographic survey boats, tour boats, riverboat casinos, patrol
boats, tow boats, and hydrographic survey boats. Trinity's commercial
customer base includes many of the major industrial corporations of North
America. Trinity builds various smaller and medium size marine vessels
for the United States Navy, United States Army and Corps of Engineers.
Other customers include several foreign governments and companies.
Trinity's broad base of different types of marine vessels and its many
years of experience and dependable production have made it an important
supplier of marine vessels and barges.
The Marine Products segment revenues were $360.7 million and
operating profit was $28.9 million for the year ended March 31, 1994.
In the prior fiscal year, revenues of $403.2 million and operating profit
of $30.8 million were reported.
The Marine Products segment concentrates on a high level of
customer service and satisfaction. At March 31, 1994, there were a wide
variety of marine vessels on order from a diversified group of commercial
and governmental customers. The marine vessel and barge building
segment is experiencing strong, wide based demand for its products.
Recent governmental legislation and regulations which mandate different
"double skin" construction procedures will have a beneficial effect on
demand in the future. Prospects for the Marine Products segment are
bright.
Construction Products
Trinity's Construction Products segment fabricates a broad line of
products used by governmental, industrial, commercial and utility
customers. Diversified product lines include structural components of
highway and railway bridge beams and girders, highway safety products,
passenger loading bridges, conveyor systems, and ready-mix concrete and
aggregates. Trinity is well known to the federal and state governments as
a significant supplier of highway and railway bridges, guardrail, highway
safety devices, and related barrier products for the nations highway
system. During the past two years, Trinity has diversified into the ready-
mix concrete and aggregates industry. Demand is brisk for these products
in the geographic area served by the Company. (See Trinity's Expansion
of Construction Products Segments on page 14.)
Operating profit for the fiscal year increased 57.5% on a revenue
increase of 17.8%. The Construction Products segment revenues were
$333.1 million and operating profit was $35.6 million for the year ended
March 31, 1994. In the prior fiscal year, revenues of $282.7 million and
operating profit of $22.6 million were reported.
Trinity's Construction Products segment is prepared for continued
success meeting the market demands expected in the markets it serves.
Containers
Trinity's Containers segment manufactures a full line of vessels in
three broad categories. The Company fabricates:
(a) containers for the transportation and storage of liquefied petroleum
gases, food and beverage products, and other liquid and dry products
ranging in size from as small as 50 gallons to as large as 120,000 gallons.
Pressure and nonpressure containers are built, as appropriate, to
Department of Transportation and American Society of Mechanical
Engineer's standards. Products consist of cylinders, domestic tanks, truck
tank and transport barrels, storage vessels, and custom fabrication.
Customers include residential, industrial, governmental, and commercial
users;
(b) extremely large, heavy pressure vessels and other heavy welded
products. Vessels range to thicknesses of 14 inches, diameters up to 40
feet, lengths exceeding 500 feet, and weights up to 1,000 tons. Vessels,
generally, are constructed of carbon steel but may be constructed of exotic
materials such as alloy, stainless steel, aluminum, clad, and weld overlay.
Products include pressure vessels, storage tanks, refinery and chemical
reactors, industrial silencers, heat recovery systems, desalinators,
evaporators, digesters for pulp paper industry, and custom weldments.
Customers are major industrial users particularly in the petroleum,
chemical, food processing and utility industries; and,
(c) heat transfer equipment. Heat transfer equipment is used to increase
or decease temperature of liquid product passing through the vessel. Heat
transfer equipment is generally built to an exact set of design standards
and configurations provided by the customer. Customers are major
industrial users in the petroleum and chemical industries.
The Containers segment revenues were $155.6 million and operating
profit was $9.8 million for the year ended March 31, 1994. In the prior
fiscal year, revenues of $141.1 million and operating profit of $15.0
million were reported.
With new technological advances relating to painting and finishing of
containers, the recent changes in law concerning clean air regulations, the
improvement in the residential housing industry and the economy in
general, the Containers segment is anticipated to improve its competitive
position.
Metal Components
Trinity's Metal Components segment manufactures and markets two
different broad lines of products: (a) fittings and flanges; and (b) container
heads. Fittings consist principally of butt weld type fittings. Flanges are
pressure rated pipe flanges. Container heads are the rounded ends on
containers.
Weld fittings include elbows, return bends, concentric and eccentric
reducers, full and reducing outlet tees. Flanges and fittings are
manufactured from carbon steel, stainless steel, aluminum, chrome-moly
and other metal tubing and seamless pipe and forgings. Trinity sells its
weld fittings and flanges to distributors and to other manufacturers of weld
fittings.
Container heads manufactured by Trinity are pressed metal
components used in the further manufacture of a finished product. The
manufacture of container heads requires a substantial investment in
machinery and equipment. Many other manufacturers order container
heads from Trinity rather than make the investment required to produce
container heads. Container heads are manufactured in various shapes and
may be pressure rated or nonpressure, depending on the intended use in
further manufacture.
The Metal Components segment revenues were $99.7 million and
operating profit was $11.7 million for the year ended March 31, 1994.
In the prior fiscal year, revenues of $96.8 million and operating profit of
$13.8 million were reported.
As the industries served by the Metal Components segment continue
to modernize, repair, and expand facilities, the Metal Components
segment should enjoy increased demand for its products.
Leasing
Trinity gains market flexibility with its wholly-owned leasing
subsidiary, Trinity Industries Leasing Company. Trinity can offer
customers an alternative to purchasing railcars. The leasing of Trinity's
railcars allows customers to retain working capital and reduce
administrative expenses while providing them access to Trinity's highly
regarded maintenance, testing and repair facilities.
Trinity has more than 9,000 railcars in its lease portfolio furnishing the
Company with a consistent flow of income, tax deferrals, and equity in
long-life assets.
The Leasing segment revenues were $104.6 million and operating
profit was $15.3 million for the year ended March 31, 1994. In the prior
fiscal year, revenues of $79.6 million and operating profit of $7.5 million
were reported.
Because of the consolidation of Trinity Industries Leasing Company
under Statement of Financial Accounting Standards Number 94 (See
Summary of Significant Accounting Policies and Leasing notes in Notes
to Consolidated Financial Statements), intercompany interest income
aggregating $ 5.0 million is eliminated from Trinity's consolidated
financial statements.
Trinity's Expansion of the Construction Products Segment
A few years ago, Trinity decided it was time to broaden the number
of products sold in the Construction Products segment. After studying
various products in the construction products lines of business and
prospective favorable geographical regions, it was determined that selected
markets in the state of Texas would be important geographical areas for
rebuilding as the state and nation recovered from economic difficulty.
The right opportunity was presented, and Trinity diversified into the
concrete ready-mix and aggregate business. This diversification is in
harmony with Trinity's philosophy of providing quality products, superior
service, and competitive pricing. Aggregates are the natural resource used
in making concrete and may be consumed as a raw material in the ready-
mix concrete business or sold separately.
Financial Summary
(in millions except for percent and per share data)
Year ended March 31
1994 1993 1992 1991 1990
Revenues. . . . . . . . . . . . . . $1,784.9 1,540.0 1,273.3 1,348.1 1,400.1
Operating profit. . . . . . . . . . $ 116.6 74.6 43.4 59.1 78.7
Interest expense, net (excluding
Leasing Subsidiary). . . . . . . . $ 4.0 3.3 6.4 9.4 16.4
Income before income taxes and
cumulative effect of change in
accounting for income taxes. . . . $ 114.2 72.1 39.7 51.5 64.8
Provision for income taxes. . . . . $ 45.9 27.1 15.4 19.5 23.7
Effective tax rate. . . . . . . . . % 40.2 37.6 38.8 37.8 36.6
Income before cumulative effect of
change in accounting for income
taxes. . . . . . . . . . . . . . . $ 68.3 45.0 24.3 32.0 41.1
Cumulative effect as of April 1,
1993 of change in accounting for
income taxes . . . . . . . . . . . $ 7.9 - - - -
Net income. . . . . . . . . . . . . $ 76.2 45.0 24.3 32.0 41.1
Total assets. . . . . . . . . . . . $1,306.8 1,089.1 1,021.2 973.5 920.5
Long-term debt. . . . . . . . . . . $ 277.9 293.2 357.3 326.0 359.5
Stockholders' equity. . . . . . . . $ 570.5 507.3 379.0 372.0 315.8
Stock data:(1)
Weighted average number of common
and common equivalent shares
outstanding . . . . . . . . . . . 40.3 35.4 34.2 34.4 30.3
Income per common and common
equivalent share before cumulative
effect of change in accounting for
income taxes. . . . . . . . . . . $ 1.69 1.27 0.71 0.93 1.36
Cumulative effect of change in
accounting for income taxes . . . $ 0.20 - - - -
Net income per common and common
equivalent share. . . . . . . . . $ 1.89 1.27 0.71 0.93 1.36
Dividends per share(2) . . . . . . $ 0.64 0.53 0.53 0.53 0.48
Stock closing price range:
First quarter . . . . . . . . . . $ 35 1/2- 22 1/2- 19 3/8- 19 1/8- 29 3/8-
29 5/8 18 16 1/8 14 5/8 22 3/8
Second quarter. . . . . . . . . . $ 38 1/4- 22- 19 1/8- 19- 30 3/8
32 1/2 19 7/8 15 7/8 13 1/4 25
Third quarter . . . . . . . . . . $ 43 7/8- 26 1/2- 20 7/8- 14 1/8- 25 1/8
34 3/4 20 5/8 16 1/2 10 3/8 19 1/2
Fourth quarter. . . . . . . . . . $ 47 3/8- 29 7/8- 21 1/8- 17 5/8- 21 3/4
37 1/2 25 1/8 17 1/8 12 3/8 15 3/4
Book value per share . . . . . . . $ 14.37 12.95 11.13 10.88 9.98
(1) On August 31, 1993, the Company distributed a three-for-two stock split in
the form of a stock dividend. Accordingly, in the above table and throughout
this report, for all prior fiscal years and interim periods, share and per
share information, except for common stock outstanding in the Consolidated
Balance Sheet and Consolidated Statement of Stockholders' Equity, had been
restated to give effect to the stock split.
(2) In fiscal 1994, dividends per share were restated to $0.13 in the first
quarter and then increased to $0.17 for the last three quarters. In fiscal
1990, restated dividends per share were $0.09 in the first quarter and then
increased to $0.13 for the last three quarters.
Management Discussion of Operations and Financial Condition
Operations
Record revenues of $1.78 billion were recorded for the fiscal year ended
March 31, 1994, an increase of $244.9 million compared to fiscal 1993.
Significant increases in demand in the Railcars, Construction Products,
Containers, and Leasing segments lead to the record year. Revenues recorded
by the Metal Components segment remained comparable to the previous fiscal
year. Revenues recorded declined when compared to Marine Products previous
fiscal year's record revenues. Demand for railcars has increased causing
upward adjustments to production rates to accommodate increases in business.
The Construction Products segment's revenues were favorably affected by
additional business acquisitions of certain concrete operations. (See Business
Acquisitions in the Notes to Consolidated Financial Statements). The
Containers and Metal Components segments experienced expanding markets. Total
operating profit increased from $74.6 million in fiscal 1993 to $116.6 million
in fiscal 1994 due primarily to higher operating profit recorded in the Rail-
cars, Construction Products, and Leasing segments, partially offset by slightly
lower operating profit recorded in the Marine Products, Containers and Metal
Components segments.
Continuing a trend which accelerated in fiscal 1993, production and
deliveries in the Railcars segment increased in fiscal 1994. Operating profit
as a percentage of revenues increased in fiscal 1994 compared to the previous
fiscal year as greater efficiencies were achieved as a result of ongoing
participation in quality assurance programs established in previous years.
Indicating future expansion in production, the segment ended the fiscal year
with a record number of railcars to be produced. Trinity continues to be very
active in the railcar market with a variety of car types including coal, grain,
plastic pellet, cement, intermodal and a variety of tank railcars. Increased
revenues and operating profit in fiscal 1994 are primarily the result of
expanded demand. This demand is attributed to a continuing railcar replacement
cycle, demand for new types of railcars as the transporting of certain
commodities across the country shifts from over-the-road trucking to rail, a net
increase in the amount of goods and products that are shipped by rail, and the
general improvement in the economy.
In the Marine Products segment, demand for the segment's products, marine
vessels and barges, continues to be strong and broad based. The decline in
current fiscal year results compared to results from the previous fiscal year
is due primarily to the record revenues and operating profit recorded in the
previous fiscal year from the completion of a multi-vessel, quick production
contract. The replacement market for vessels and barges is leading to expanded
production. The Marine Products segment is further positioning itself for
future growth and contribution to operating profit through strategic business
acquisitions. (See Business Acquisitions in the Notes to Consolidated Financial
Statements).
Construction Products segment's revenues and operating profit increased in
the current fiscal year compared to the previous fiscal year. These results
signify the effect of the decision to emphasize infrastructure products,
including highway guardrail and safety barriers, and construction materials and
aggregates. Continued expansion of the ready mix concrete markets helped to
boost the segment's revenues and operating profit.
General improvement in the chemical and petroleum industries and new
housing starts is leading to improvement in the Containers segment,
particularly the market for LPG tanks. Competitive markets for the Company's
large pressure vessels are partially offsetting segment operating profit.
Industry demand for products in the Metal Components segment has risen in the
current fiscal year. General improvement in the economy has generated some
expansion in the industries served by this segment. Leasing segment's
operating profit was higher in fiscal 1994 due primarily to additions of new
freight and tank railcars to the fleet, sales of selected car types previously
for lease, and a slight reduction in overall repair and maintenance expenses
in the current fiscal year.
Record revenues of $1.54 billion were recorded by the Company for the
fiscal year ended March 31, 1993, an increase of $266.7 million compared to
fiscal 1992. Significant increases in demand in the Railcars, Marine
Products, Construction Products and Leasing segments lead to the record fiscal
year. Revenues recorded by the Containers and Metal Components segments
remained comparable to the previous fiscal year. Marine Products' segment's
revenues increased due to work performed on several large contracts. Demand for
railcars continued to grow as the replacement market moved forward. The
Construction Products segment's revenues were favorably affected by the
business acquisition of Syro Steel Company ("Syro") (See Business Acquisitions
in the Notes to Consolidated Financial Statements) and additional business
acquisitions of certain concrete operations. (See Business Acquisitions in
the Notes to Consolidated Financial Statements). Total operating profit
increased from $43.4 million in fiscal 1992 to $74.6 million in fiscal 1993
due primarily to higher operating profit recorded in the Railcars, Marine
Products, Construction Products, and Leasing segments, partially offset by
slightly lower operating profit recorded in the Containers and Metal
Components segments.
Demand for Marine Products in fiscal 1993 continued to increase in a
variety of different types of vessels and barges. The increase in operating
profit reflected the trend, which began in fiscal 1992, of performance on
higher margin contracts and efficiencies connected with higher production.
The benefit derived from investments in new operating facilities and the
refurbishment and reopening of other operating facilities during the current
and past few years favorably affected operating profit. Production and
deliveries in the Railcars segment increased in fiscal 1993 resulting in
improved operating profit. Orders on hand at the end of the fiscal year were
approximately twice as high as the previous fiscal year end. Increased
revenues and operating profit in fiscal 1993 were primarily the result of
expanded demand. Construction Products segment's operating profit increased
as the business acquisition of Syro enhanced the segment's market presence in
the highway safety products market. The expansion of the ready-mix concrete
market helped to boost the segment's operating profit.
Competitive conditions in the Containers segment, particularly the market
for LPG tanks, accounted for the increase in revenues while causing a slight
decline in operating profit. Industry demand for products in the Metal
Components segment remained strong. Leasing segment's operating profit was
higher in fiscal 1993 due primarily to additions of railcars during the last
quarter, which had little or no maintenance expenses, and on average, had a
high rental rate compared to the remainder of the lease fleet.
Selling, engineering and administrative expenses were up slightly in
fiscal 1994 compared to fiscal 1993. Increases due to additional personnel
from fiscal 1994 business acquisitions and increased Railcars segment business,
offset somewhat by the absence of expenses present in the prior fiscal year
related to the business acquisition of Syro. Selling, engineering and
administrative expenses increased to $93.4 million in fiscal 1993 from $77.5
million in fiscal 1992 due principally to expenses associated with additional
personnel from fiscal 1993 business acquisitions in the concrete division of
the Construction Products segment and the custom vessel division of the
Containers segment, additional expenses associated with increased business in
the Railcars and Marine Products segments, and expenses related to the business
acquisition of Syro.
Interest expense of the Leasing Subsidiary decreased by $4.4 million in
fiscal 1994 compared to fiscal 1993 due primarily to the conversion of Leasing
Subsidiary debt to common stock of the Company in the fourth quarter of fiscal
1993 (see Long-term Debt in the Notes to Consolidated Financial Statements).
Interest expense of Leasing Subsidiary increased by $2.7 million in fiscal 1993
compared to fiscal 1992 due primarily to additional borrowings to fund railcar
purchases.
Retirement plans expense decreased to $9.2 million in fiscal 1994 from
$10.2 million in fiscal 1993. The decrease is due primarily to the
reduction of the actuarial accrual related to a certain supplemental
retirement benefit agreement, offset by increases in personnel due to fiscal
1994 business acquisitions. Retirement plans expense increased to $10.2
million in fiscal 1993 from $9.0 million in fiscal 1992. The increase was due
primarily to a general increase in total personnel caused primarily by fiscal
1993 business acquisitions and improved business in the Railcars and Marine
Products segments.
Net interest expense of $4.0 million in fiscal 1994 increased as compared
to $3.3 million in fiscal 1993 primarily due to the increase in the usage of
short-term debt to finance business acquisitions, offset by a decline in long-
term debt due to regularly scheduled principal payments. Net interest expense
of $3.3 million in fiscal 1993 decreased as compared to $6.4 million in
fiscal 1992 as balances of both long-term debt, excluding Leasing Subsidiary,
and short-term debt declined. The decline in long-term debt was due to
scheduled principal payments, and to a lesser degree, to the conversion of
debt to common stock of the Company in the fourth quarter of fiscal 1993 (see
Long-term Debt in the Notes to Consolidated Financial Statements). Greater
use of net cash flows from operations to sustain operating requirements
created less reliance on short-term debt.
The provision for income taxes in fiscal 1994 expressed as a percent of
income before income taxes is a 40.2 percent rate as compared to a 37.6 percent
rate in fiscal 1993 and a 38.8 percent rate in fiscal 1992. The increase
between fiscal 1994 and 1993 is due principally to the increase in the statutory
federal income tax rate and the increase in the provision for state income
taxes. The decrease between fiscal 1993 and 1992 was due principally to the
decrease in the provision for state income taxes stated as a percentage.
In February, 1992, the Financial Accounting Standards Board issued SFAS
No. 109, "Accounting for Income Taxes." The Company was required to adopt
SFAS No. 109 in fiscal 1994 and change from the deferred to the liability
method of computing income tax. The Company recognized the cumulative effect
of the change in method as of April 1, 1993 resulting in an increase to net
income of $7.9 million. (see Income Taxes in the Notes to the Consolidated
Financial Statements)
Liquidity and Financial Resources
During fiscal 1994, internally generated funds and short-term borrowing
were used to support capital expenditures and payments for business
acquisitions. Capital expenditures, excluding Leasing Subsidiary, for fiscal
1994 were $45.2 million. Capital expenditures projected for fiscal 1995 are
$50 million. Payments for acquisitions in fiscal 1994, net of cash acquired,
totalled $36.2 million. Future operating requirements are expected to be
financed principally with net cash flows from operations. Internally
generated funds, short-term and long-term debt will continue to be used to
finance business acquisitions. Additions to TILC's railcar fleet are
anticipated to be financed through internally generated funds, the issuance
of equipment trust certificates, or similar debt instruments.
The percentages of long-term debt and stockholders' equity to total
capital (long-term debt and stockholders' equity) of $848.4 million (of which
Leasing Subsidiary's long-term debt is $236.0 million) were 32.8 percent (of
which Leasing Subsidiary's long-term debt is 27.8 percent of total capital)
and 67.2 percent, respectively.
Inflation
Changes in price levels did not significantly affect the Company's
operations in fiscal 1994, 1993 or 1992.
Consolidated Income Statement
(in millions except per share data)
Year Ended March 31
1994 1993 1992
Revenues. . . . . . . . . . . . . . . . . . . . $1,784.9 $1,540.0 $1,273.3
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . 1,541.2 1,333.7 1,118.0
Selling, engineering and administrative
expenses . . . . . . . . . . . . . . . . . . 94.2 93.4 77.5
Interest expense of Leasing Subsidiary. . . . 23.7 28.1 25.4
Retirement plan expense . . . . . . . . . . . 9.2 10.2 9.0
1,668.3 1,465.4 1,229.9
Operating profit. . . . . . . . . . . . . . . . 116.6 74.6 43.4
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . (1.6) (1.2) (1.2)
Interest expense - excluding Leasing
Subsidiary . . . . . . . . . . . . . . . . . 5.6 4.5 7.6
Other, net. . . . . . . . . . . . . . . . . . (1.6) (0.8) (2.7)
2.4 2.5 3.7
Income before income taxes and cumulative effect
of change in accounting for income taxes . . . 114.2 72.1 39.7
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . . 45.1 25.7 20.4
Deferred. . . . . . . . . . . . . . . . . . . (1.3) 1.4 (5.0)
Effect of statutory rate increase . . . . . . 2.1 - -
45.9 27.1 15.4
Income before cumulative effect of change in
accounting for income taxes. . . . . . . . . . 68.3 45.0 24.3
Cumulative effect as of April 1, 1993 of change
in accounting for income taxes . . . . . . . . 7.9 - -
Net income. . . . . . . . . . . . . . . . . . . $ 76.2 $ 45.0 $ 24.3
Income per common and common equivalent share
before cumulative effect of change in
accounting for income taxes. . . . . . . . . . $ 1.69 $ 1.27 $ 0.71
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . 0.20 - -
Net income per common and common equivalent
share. . . . . . . . . . . . . . . . . . . . . $ 1.89 $ 1.27 $ 0.71
Weighted average number of common and common
equivalent shares outstanding . . . . . . . . 40.3 35.4 34.2
See accompanying notes to consolidated financial statements.
Consolidated Balance Sheet
March 31
(in millions except per share data) 1994 1993
Assets
Cash and cash equivalents . . . . . . . . . . . . . . $ 8.7 $ 7.5
Receivables . . . . . . . . . . . . . . . . . . . . . 264.9 203.2
Inventories . . . . . . . . . . . . . . . . . . . . . 328.8 211.2
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . . . . . . 590.8 509.8
Leasing Subsidiary. . . . . . . . . . . . . . . . . 479.2 476.9
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . . . (263.0) (223.5)
Leasing Subsidiary. . . . . . . . . . . . . . . . . (139.9) (132.2)
Other assets. . . . . . . . . . . . . . . . . . . . . 37.3 36.2
$1,306.8 $1,089.1
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . . . . . . $ 192.0 $ 15.0
Accounts payable and accrued liabilities. . . . . . . 161.6 140.1
Billings in excess of cost and related earnings . . . 12.6 32.0
Long-term debt:
Excluding Leasing Subsidiaries. . . . . . . . . . . 41.9 49.2
Leasing Subsidiaries. . . . . . . . . . . . . . . . 236.0 244.0
Deferred income taxes . . . . . . . . . . . . . . . . 73.9 85.9
Other liabilities . . . . . . . . . . . . . . . . . . 18.3 15.6
736.3 581.8
Stockholders' equity: (shares in millions)
Common stock - par value $1 per share;
authorized at March 31, 1994 - 100.0 shares
and March 31, 1993 - 40.0 shares; shares issued
and outstanding in 1994 - 39.7; in 1993 - 26.1 . . 39.7 26.1
Capital in excess of par value. . . . . . . . . . . 213.4 214.5
Retained earnings . . . . . . . . . . . . . . . . . 317.4 266.7
570.5 507.3
$1,306.8 $1,089.1
See accompanying notes to consolidated financial statements.
Consolidated Statement of Cash Flows
(in millions)
Year Ended March 31
1994 1993 1992
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . $ 76.2 $ 45.0 $24.3
Adjustments to reconcile net income to net cash
provided (required) by operating activities:
Depreciation:
Excluding Leasing Subsidiary . . . . . . . . . . 39.5 37.0 32.6
Leasing Subsidiary . . . . . . . . . . . . . . . 17.3 22.3 15.6
Deferred provision (benefit) for income taxes . . (1.3) 1.4 (5.0)
(Gain) loss on sale of property, plant
and equipment. . . . . . . . . . . . . . . . . . (0.2) 1.7 (0.4)
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . . (7.9) - -
Effect of statutory rate increase . . . . . . . . 2.1 - -
Other . . . . . . . . . . . . . . . . . . . . . . 0.1 1.1 (0.1)
Change in assets and liabilities:
Increase in receivables. . . . . . . . . . . . . (58.1) (7.0) (17.9)
(Increase) decrease in inventories . . . . . . . (110.9) 9.9 3.5
(Increase) decrease in other assets. . . . . . . 0.4 (2.2) (3.8)
Increase (decrease) in accounts payable
and accrued liabilities . . . . . . . . . . . . 14.0 26.7 (3.6)
Increase (decrease) in billings in excess of
cost and related earnings . . . . . . . . . . . (19.4) (17.5) 41.9
Increase (decrease) in other liabilities . . . . 2.6 (1.0) (2.6)
Total adjustments. . . . . . . . . . . . . . . (121.8) 72.4 60.2
Net cash provided (required) by
operating activities . . . . . . . . . . . . . . (45.6) 117.4 84.5
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 29.3 5.5 42.2
Capital expenditures:
Excluding Leasing Subsidiary . . . . . . . . . . . (45.2) (36.2) (24.1)
Leasing Subsidiary . . . . . . . . . . . . . . . . (37.6) (74.5) (64.3)
Payment for purchase of acquisitions,
net of cash acquired . . . . . . . . . . . . . . . (36.2) (20.6) (27.2)
Cash of acquired subsidiary . . . . . . . . . . . . 0.5 0.7 -
Net cash required by investing activities . . . . (89.2) (125.1) (73.4)
Cash flows from financing activities:
Issuance of common stock. . . . . . . . . . . . . . 8.9 5.9 0.4
Net borrowings under short-term debt. . . . . . . . 177.0 (5.0) (26.0)
Proceeds from issuance of long-term debt. . . . . . 20.0 60.0 65.0
Payments to retire long-term debt . . . . . . . . . (45.9) (34.0) (35.0)
Dividends paid. . . . . . . . . . . . . . . . . . . (24.0) (17.8) (17.3)
Net cash provided (required) by
financing activities. . . . . . . . . . . . . . 136.0 9.1 (12.9)
Net increase (decrease) in cash and cash equivalents. 1.2 1.4 (1.8)
Cash and cash equivalents at beginning of period. . . 7.5 6.1 7.9
Cash and cash equivalents at end of period. . . . . . $ 8.7 $ 7.5 $ 6.1
Excluding Leasing Subsidiaries, interest paid in fiscal 1994, 1993, and 1992
was $5.0, $4.0, and $7.6, respectively. Leasing Subsidiaries' interest paid
in fiscal 1994, 1993, and 1992 was $23.8, $28.4, and $26.2, respectively.
See accompanying notes to consolidated financial statements.
Consolidated Statement of Stockholders' Equity
(in millions except share and per share data)
Common Capital
Common Stock in
Shares $1.00 Excess Total
(100,000,000 Par of Par Retained Stockholders'
Authorized) Value Value Earnings Equity
Balance at March 31, 1991 . . . . . 22,765,041 $22.8 $115.6 $233.6 $372.0
Other . . . . . . . . . . . . . . (26,123) (0.1) 0.2 - 0.1
Net income. . . . . . . . . . . . - - - 24.3 24.3
Cash dividends ($0.50 per share). - - - ( 17.4) ( 17.4)
Balance at March 31, 1992 . . . . . 22,738,918 22.7 115.8 240.5 379.0
Conversion of debt. . . . . . . . 2,888,969 2.9 89.5 - 92.4
Other . . . . . . . . . . . . . . 448,662 0.5 9.2 - 9.7
Net income. . . . . . . . . . . . - - - 45.0 45.0
Cash dividends ($0.53 per share). - - - (18.8) (18.8)
Balance at March 31, 1993 . . . . . 26,076,549 26.1 214.5 266.7 507.3
Three-for-two stock split . . . . 13,158,164 13.2 (13.2) - -
Other . . . . . . . . . . . . . . 476,985 0.4 12.1 - 12.5
Net income. . . . . . . . . . . . - - - 76.2 76.2
Cash dividends ($0.64 per share) - - - (25.5) (25.5)
Balance at March 31, 1994 . . . . . 39,711,698 $39.7 $213.4 $317.4 $570.5
The Company has authorized and unissued 1,500,000 shares of no par value
voting preferred stock.
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies
The financial statements of Trinity Industries, Inc. and its consolidated
subsidiaries ("Trinity" or the "Company") include the accounts of all
significant majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
The Company accounts for its wholly-owned Leasing Subsidiary in
accordance with Statement of Financial Accounting Standard No. 94,
"Consolidation of All Majority-Owned Subsidiaries," which requires the
consolidation of all majority-owned subsidiaries, unless control is
temporary or does not reside with the majority owner. The Company's
financial statements include the consolidation of the accounts of Trinity
Industries Leasing Company ("TILC"). TILC is sometimes referred to as the
"Leasing Company" or "Leasing Subsidiary".
For purposes of the Consolidated Statement of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents. Financial instruments which
potentially subject the Company to concentrations of credit risk are
primarily cash investments and receivables. The Company places its cash
investments in investment grade, short-term debt instruments and limits the
amount of credit exposure to any one commercial issuer. Concentrations of
credit risk with respect to receivables are limited due to the large number
of customers in the Company's customer base, and their dispersion across
different industries and geographic areas. The Company maintains an
allowance for losses based upon the expected collectibility of all
receivables.
For financial accounting, profits on long-term contracts are recorded on
the percentage-of-completion method. Allocation of profits to various
periods is based on costs incurred, units delivered, or other appropriate
measures. Provision is made for losses when they become known.
TILC enters into lease contracts with third parties with terms generally
ranging between one and fifteen years, wherein certain equipment
manufactured by Trinity is leased for a specified type of service over the
term of the contract. TILC accounts for leases principally by the
operating method.
Inventories and investments are valued at the lower of cost or market.
Inventory cost is determined principally on the specific identification
method. Market is replacement cost or net realizable value.
Depreciation and amortization are generally computed by the straight-line
method on the estimated useful lives of the assets. The costs of ordinary
maintenance and repair are charged to expense, while renewals and major
replacements are capitalized.
Net income per common and common equivalent share are based on the weighted
average shares outstanding plus the assumed exercise of dilutive stock
options (less the number of treasury shares assumed to be purchased from
the proceeds using the average market price of Trinity's common stock).
For the years ended March 31, 1994 and 1993, there was no convertible debt
outstanding that would require the calculation of fully diluted earnings
per share. In fiscal 1993, the convertible debt in the form of 8 percent
convertible subordinated debentures and 6.75 percent convertible debentures
were converted. For the year ended March 31, 1992 the computation of fully
diluted earnings per share was anti-dilutive.
Certain reclassifications have been made to prior year statements
to conform to the current year presentation.
Segment Information
The Company manufactures and sells or leases a variety of metal products
consisting principally of (1) freight railcars, principally tank cars and
hopper cars ("Railcars"); (2) boats and barges for ocean and inland waterway
service ("Marine Products"); (3) construction products such as highway guard-
rail, beams, girders, and columns used in construction of, highway and railway
bridges, power plants, mills, etc., passenger loading bridges and conveyor
systems, and ready mix concrete and aggregates ("Construction Products");
(4) pressure and non-pressure containers for the storage and transportation
of liquefied gases, other liquid, and dry products ("Containers"); (5) weld
fittings (tees, elbows, reducers, caps, flanges, etc.) used in pressure piping
systems and container heads (the ends of pressure and non-pressure containers)
for use internally and by other manufacturers of containers ("Metal
Components"); and (6) railcar and barge leasing to various industries
("Leasing").
Financial information for these segments is summarized in the following table.
The Company operates principally in the continental United States. Interseg-
mental sales are shown at market prices.
Corporate operating profit elimination consists principally of the
administrative overhead of the Company.
Corporate assets consist primarily of cash and cash equivalents, other assets,
notes receivable, land held for investment, and certain property, plant and
equipment.
The Railcars segment includes revenues from one customer which accounted for
11.6 percent of consolidated revenues in fiscal 1994.
In the Segments of Business table below, the caption 'Additions (net) to
property, plant and equipment' does not include Business Acquisitions.
Segments of Business
(in millions)
Eliminations
Construc- Metal & Cor- Consol-
Rail- Marine tion Com- porate idated
cars Products Products Containers ponents Leasing Items Total
Year ended March 31, 1994
Total revenues:
Trade. . . . . . . . . . . . . $730.6 360.7 333.1 155.6 99.7 104.6 0.6 1,784.9
Intersegment . . . . . . . . . 38.5 - - - 2.8 - (41.3) -
Total . . . . . . . . . . . . $769.1 360.7 333.1 155.6 102.5 104.6 (40.7) 1,784.9
Operating profit (loss). . . . . $ 53.2 28.9 35.6 9.8 11.7 15.3 (37.9) 116.6
Identifiable assets . . . . . . $350.9 201.4 185.8 81.5 47.0 344.3 95.9 1,306.8
Depreciation . . . . . . . . . . $ 11.2 7.8 10.0 2.0 3.2 17.3 5.3 56.8
Additions (net) to property,
plant and equipment . . . . . . $ 2.4 7.8 12.2 2.4 1.4 14.8 10.8 51.8
Year ended March 31, 1993
Total revenues:
Trade. . . . . . . . . . . . . $535.5 403.2 282.7 141.1 96.8 79.6 1.1 1,540.0
Intersegment . . . . . . . . . 75.5 - - - 2.9 - (78.4) -
Total . . . . . . . . . . . . $611.0 403.2 282.7 141.1 99.7 79.6 (77.3) 1,540.0
Operating profit (loss). . . . . $ 26.9 30.8 22.6 15.0 13.8 7.5 (42.0) 74.6
Identifiable assets. . . . . . . $227.0 137.3 156.8 71.3 50.5 350.5 95.7 1,089.1
Depreciation . . . . . . . . . . $ 12.5 6.4 6.3 2.9 3.2 22.3 5.7 59.3
Additions (net) to property,plant
and equipment . . . . . . . . . $ 2.7 13.6 6.1 4.1 1.9 71.3 3.8 103.5
Year ended March 31, 1992
Total revenues:
Trade. . . . . . . . . . . . . $440.6 276.1 246.9 139.6 97.2 72.8 0.1 1,273.3
Intersegment . . . . . . . . . 60.3 - - - 2.9 - (63.2) -
Total . . . . . . . . . . . . $500.9 276.1 246.9 139.6 100.1 72.8 (63.1) 1,273.3
Operating profit (loss). . . . . $ 12.7 5.5 19.2 15.3 15.4 6.8 (31.5) 43.4
Identifiable assets. . . . . . . $226.4 148.7 149.2 63.7 49.2 300.8 83.2 1,021.2
Depreciation . . . . . . . . . . $ 12.0 5.5 4.6 2.7 3.0 15.6 4.8 48.2
Additions (net) to property,plant
and equipment . . . . . . . . . $ 7.9 3.9 3.5 1.6 1.3 24.8 5.4 48.4
Receivables
(in millions)
March 31
1994 1993
Accounts receivable:
Excluding Leasing Subsidiary. . . . . $248.4 $173.0
Leasing Subsidiary. . . . . . . . . . 5.0 5.8
253.4 178.8
Contract receivables not yet billed. . 12.5 25.6
265.9 204.4
Allowance for doubtful accounts. . . . ( 1.0) ( 1.2)
$264.9 $203.2
Inventories
(in millions)
March 31
1994 1993
Finished goods . . . . . . . . . . . . $ 28.2 $ 15.5
Work in process. . . . . . . . . . . . 41.9 28.2
Cost related to long-term
contracts, net of progress billings
of $2.1 and $5.1 at March 31, 1994
and 1993, respectively. . . . . . . . 77.1 62.7
Raw materials and supplies . . . . . . 181.6 104.8
$328.8 $211.2
Property, Plant and Equipment
(in millions)
March 31
1994 1993
Excluding Leasing Subsidiary:
Land . . . . . . . . . . . . . . . . . . . . . . . . $ 29.5 $ 26.4
Buildings and improvements . . . . . . . . . . . . . 179.3 163.0
Machinery. . . . . . . . . . . . . . . . . . . . . . 361.0 302.1
Construction in progress . . . . . . . . . . . . . . 21.0 18.3
590.8 509.8
Leasing Subsidiary:
Equipment on lease (predominately long-term) . . . . 479.2 476.9
$1,070.0 $986.7
Business Acquisitions
The Company made certain business acquisitions during fiscal 1994,
1993 and 1992. All but one have been accounted for by the purchase method.
The acquisition of Syro Steel Company in fiscal 1993 has been accounted for
by the pooling of interests method. Except for Syro, the operations of
these companies have been included in the consolidated financial statements
from the effective dates of the acquisitions.
In fiscal 1992, the businesses acquired include: (i) Certain assets of
Stearns Airport Equipment Company, Inc. for cash and a note. Stearns
manufactures airport terminal equipment, primarily passenger loading
bridges and baggage handling systems; (ii) certain assets of Transit Mix
Concrete Company for cash. Transit Mix is a ready-mix concrete producer;
(iii) certain inventory and property, plant and equipment of Johnstown Axle
Works Corporation for cash. Johnstown forges railroad car axles and
related products; and (iv) certain property, plant and equipment of Coast
Engineering and Manufacturing Company for cash. These assets are utilized
in the manufacture of marine products. The aggregate purchase price of
these acquisitions was approximately $31.2 million. There was no goodwill
in the acquisitions.
In fiscal 1993, except for Syro, the businesses acquired include: (i)
certain assets of TARMAC Texas, Inc., Redland Stone Products, Inc., and
Cle-Tex Materials, Inc. for cash and 100 percent of the common stock of
Cowboy Concrete Corporation for 189,332 shares of Trinity common stock.
These businesses are ready-mix concrete producers; (ii) certain property,
plant and equipment of Eastern Shipyards, Inc. These assets are utilized in
the manufacture of marine products; and (iii) certain inventory and
property, plant and equipment of Custom Vessel Corporation to be used in
the manufacture of custom container vessels for cash and 20,000 shares of
Trinity common stock. The aggregate purchase price of these acquisitions
was approximately $26.8 million. There was no goodwill in the
acquisitions.
Also in fiscal 1993, the Company acquired, by subsidiary merger, all
of the outstanding shares of common stock of Syro in exchange for 1,621,448
shares of Trinity's common stock. Syro manufactures and distributes a wide
variety of fabricated steel products, including highway safety barrier
systems, piling products, roll formed products, corrugated plate products,
steel service center operations, and other products. The pooling of
interests accounting method was used to account for the merger and,
accordingly, the financial statements for all periods prior to the date of
the merger were restated to include the accounts of Syro for all periods
presented. Syro's previously reported financial results have been
conformed to the fiscal year end of the Company. Revenues, net income and
earnings per share of the separate companies for the period preceding the
acquisition were: (in millions except per share data)
Net Income Per
Common
Net and Common
Revenues Income Equivalent Share
Year ended March 31, 1992:
Trinity. . . . . . . . . . . $1,192.3 $22.1 $0.69
Syro . . . . . . . . . . . . 81.0 2.2
Combined . . . . . . . . . . $1,273.3 $24.3 $0.71
Syro sold material of approximately $6.2 in 1992 to affiliated
companies. At March 31, 1992 Syro had accounts receivable of $1.9 from
these affiliated companies.
In fiscal 1994, the businesses acquired include: (i) certain assets of
Caruthersville Shipyard Inc. and Xenium Fiberglass Corporation for cash.
These assets are utilized in the manufacture of marine products;(ii)
certain assets of A & M Operating Company, Inc. for cash. These assets are
used in the manufacture of railcars; (iii) certain assets of Redland Stone
Products Company, STCC, Inc., Bluebonnet Paving, Inc., Triple S Crushed
Stone Company, Waco Sand and Gravel Company, and Beazer West, Inc. for cash
and 100 percent of the common stock of Myre Construction Company for
103,494 shares of Trinity common stock. These businesses are ready-mix
concrete producers; and (iv) 100 percent of the common stock of Platzer
Shipyard, Inc. for cash and 67,139 shares of Trinity common stock. This
business manufactures and repairs barges. The aggregate purchase price of
these acquisitions was approximately $56.0 million. There was no goodwill
in the acquisitions. Contribution of these acquisitions to revenues and
operating profit is not material.
Stock Options
The Company has a Stock Option and Incentive Plan ("Plan") which provides
that incentive or Non-qualified stock options for a maximum of 1,500,000
shares of common stock may be granted to directors, officers and key
employees. Incentive options may be granted over a period not to exceed
ten years at a price not less than fair market value on the date of grant.
The Plan terminated a similar prior stock option plan of which 1,001,007
options granted were outstanding at March 31, 1994. The Plan provides
that, to the extent options granted under this Plan or any prior stock
option plan are forfeited, expire or cancelled, they may again be granted
pursuant to the provisions of this Plan. The Plan provides that if shares
already owned by the optionee are surrendered as full or partial payment of
the exercise price of an option, a new option (the "Reload Option") may be
granted equal to the number of shares surrendered. The exercise price of
Reload Options shall be the fair market value on the effective date of the
grant.
Stock Options
Non- Total Price
Incentive Incentive Exercise Range
Shares Shares Value Per Share
Outstanding at March 31, 1991 . 635,194 950,404 $25,804,536 $ 6.25 - $22.50
Granted . . . . . . . . . . . . 129,647 197,503 6,543,000 $20.00
Cancelled . . . . . . . . . . . (45,565) (5,097) (960,484) $ 6.25 - $22.50
Exercised . . . . . . . . . . . (13,769) (18,315) (368,080) $ 6.25 - $19.17
Outstanding at March 31, 1992 . 705,507 1,124,495 31,018,972 $ 6.25 - $22.50
Granted . . . . . . . . . . . . - - - - -
Cancelled . . . . . . . . . . . (28,574) (2,310) (568,681) $ 6.25 - $22.50
Exercised . . . . . . . . . . . 125,703) (251,534) (4,811,138) $ 6.25 - $22.50
Outstanding at March 31, 1993 . 551,230 870,651 25,639,153 $ 6.25 - $22.50
Granted . . . . . . . . . . . . - 975,000 26,500,028 $26.67 - $30.00
Cancelled . . . . . . . . . . . (2,265) (750) (50,165) $11.33 - $22.50
Exercised . . . . . . . . . . . (153,429) (264,430) (6,784,597) $ 9.16 - $22.50
Outstanding at March 31, 1994 . 395,536 1,580,471 $45,304,419 $ 9.16 - $30.00
At March 31, 1994, there were 1,311,038 shares (783,023 at March 31, 1993)
reserved for future options, and 620,221 stock options were exercisable
(802,419 at March 31, 1993).
Stockholder's Rights Plan
The Company has adopted a Stockholder's Rights Plan. Effective April 27,
1989, the Company paid a dividend distribution of one purchase right for
each outstanding share of the Company's $1.00 par value common stock.
Each right entitles the stockholder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred
Stock at an exercise price of one hundred and seventy-five dollars.
The rights are not exercisable or detachable from the common stock until ten
business days after a person acquires beneficial ownership of twenty percent
or more of the Company's common stock or if a person or group commences a
tender or exchange offer upon consummation of which that person or group
would beneficially own twenty percent or more of the common stock.
If any person becomes a beneficial owner of twenty percent or more of the
Company's common stock other than pursuant to an offer, as defined, for all
shares determined by certain directors to be fair to the stockholders and
otherwise in the best interests of both the Company and its stockholders
(other than by reason of share purchases by the Company), each right not
owned by that person or related parties enables its holder to purchase, at
the right's then current exercise price, shares of the Company's common
stock having a calculated value of twice the right's exercise price.
The rights, which are subject to adjustment, may be redeemed by the Company
at a price of one cent per right at any time prior to their expiration on
April 27, 1999 or the point at which they become exercisable.
Long-term Debt
(in millions except per share data)
March 31
1994 1993
Excluding Leasing Subsidiary:
6.3-11.4 percent industrial development revenue bonds
payable in varying amounts through 2005 . . . . . . . . $ 7.1 $ 10.5
4.5-10.5 percent promissory notes, generally payable
annually through 1996 . . . . . . . . . . . . . . . . . 34.8 38.7
41.9 49.2
Leasing Subsidiary:
6.96-15.5 percent equipment trust certificates to
institutional investors generally payable in semi-
annual installments of varying amounts through 2003 . . 223.5 230.7
11.3 percent notes payable monthly through 2003. . . . . 12.5 13.3
236.0 244.0
$277.9 $293.2
Long-term debt excluding the Leasing Subsidiary:
The Company is required to maintain certain financial ratios, as
defined. Principal payments due during the next five years are:
1995 - $8.9; 1996 - $30.8; 1997 - $0.5; 1998 - $0.1; and 1999 - $0.1.
Long-term debt of Leasing Subsidiary:
The trustees of the equipment trusts have been assigned title to rail-
cars with a cost of $437.8 at March 31, 1994 for the life of the respective
equipment trusts. Leases relating to such railcars financed by equipment
trust certificates have been assigned as collateral. Trinity is required to
pay fees to TILC to maintain net earnings, as defined, at 150 percent of
fixed charges, as defined. Pursuant to this agreement, $0, $1.4, and $0.5
have been paid by Trinity to TILC in fiscal 1994, 1993, and 1992, respect-
ively. Trinity is also required to pay to TILC the current tax benefit
which results from the inclusion of TILC in Trinity's federal income tax
return. These amounts are eliminated for consolidated financial presenta-
tion of Trinity. TILC is required to maintain certain financial ratios, as
defined. Principal payments due during the next five years are: 1995 -
$30.7; 1996 - $30.4; 1997 - $31.4; 1998 - $27.5; and 1999 - $27.4.
The fair value of non-traded, fixed rate outstanding debt, estimated using
discounted cash flow analysis, approximates its carrying value.
In fiscal 1993, 8 percent convertible subordinated debentures and 6.75 percent
convertible debentures were converted. Assuming this convertible debt had
converted as of April 1, 1992, supplementary earnings per share for fiscal
1993 would have been $1.24.
Condensed Combined Financial Information of Consolidated Leasing Subsidiaries
March 31
(in millions) 1994 1993
Assets
Total assets (principally railcars and barges). . . . . . $495.1 $490.6
Liabilities and Stockholder's Equity
Total liabilities (principally long-term debt). . . . . . $340.3 $354.8
Stockholder's equity (including retained earnings of
$116.5 and $104.8 in 1993 and 1992, respectively) . . . 154.8 135.8
$495.1 $490.6
Year Ended March 31
1994 1993 1992
Income
Revenues . . . . . . . . . . . . . . . . . . . . . $104.6 $79.6 $72.8
Income before income taxes and cumulative effect
of change in accounting for income taxes. . . . . $ 20.9 $17.8 $18.1
Provision for income taxes . . . . . . . . . . . . 9.9 6.1 6.3
Income before cumulative effect of change in
accounting for income taxes . . . . . . . . . . . 11.0 11.7 11.8
Cumulative effect as of April 1, 1993 of change in
method of accounting for income taxes . . . . . . 8.1 - -
Net income . . . . . . . . . . . . . . . . . . . . $ 19.1 $11.7 $11.8
Future minimum rental revenues on leases in each fiscal year are approximately
$59.5 in 1995, $52.2 in 1996, $44.1 in 1997, $36.1 in 1998, $28.4 in 1999, and
$104.5 thereafter.
Consolidating Financial Statements of Trinity Industries, Inc.
The following financial statements present the consolidating income
statement and consolidating balance sheet of Trinity. Certain accounts have
been reclassified to correspond to consolidated financial statement
presentation of Trinity. Presentation of accounts does not conform to
separate entity financial presentation. These consolidating financial
statements are presented to provide additional analysis of, and should be read
in conjunction with, the consolidated financial statements of Trinity.
Consolidating Income Statement
Leasing
Subsid- Elimi-
Year Ended March 31, 1994 (in millions) Trinity iary nations Total
Revenues. . . . . . . . . . . . . . . . . $1,718.8 $104.6 $ (38.5) $1,784.9
Operating costs:
Cost of revenues . . . . . . . . . . . . 1,514.3 65.4 (38.5) 1,541.2
Selling, engineering and administrative
expenses. . . . . . . . . . . . . . . . 94.0 0.2 - 94.2
Interest expense of Leasing Subsidiary . - 23.7 - 23.7
Retirement plans expense . . . . . . . . 9.2 - - 9.2
Equity in income of Leasing Subsidiary
before income taxes . . . . . . . . . . (20.9) - 20.9 -
1,596.6 89.3 (17.6) 1,668.3
Operating profit. . . . . . . . . . . . . 122.2 15.3 (20.9) 116.6
Other (income) expenses:
Interest income. . . . . . . . . . . . . (1.6) - - (1.6)
Interest expense - excluding Leasing
Subsidiaries. . . . . . . . . . . . . . 10.6 (5.0) - 5.6
Other, net . . . . . . . . . . . . . . . (1.0) (0.6) - (1.6)
8.0 (5.6) - 2.4
Income before income taxes and cumulative
effect of change in accounting for
income taxes . . . . . . . . . . . . . . 114.2 20.9 (20.9) 114.2
Provision (benefit) for income taxes:
Current. . . . . . . . . . . . . . . . . 45.1 4.0 (4.0) 45.1
Deferred . . . . . . . . . . . . . . . . (1.3) 3.3 (3.3) (1.3)
Effect of statutory rate increase. . . . 2.1 2.6 (2.6) 2.1
45.9 9.9 (9.9) 45.9
Income before cumulative effect of change
in accounting for income taxes . . . . . 68.3 11.0 (11.0) 68.3
Cumulative effect as of April 1, 1993 of
change in accounting for income taxes. . 7.9 8.1 (8.1) 7.9
Net income. . . . . . . . . . . . . . . . $ 76.2 $ 19.1 $(19.1) $ 76.2
Consolidating Balance Sheet
Leasing
Subsid- Elimi-
March 31, 1994 (in millions) Trinity iary nations Total
Assets
Cash and cash equivalents. . . . . . . . . $ 8.5 $ 0.2 $ - $ 8.7
Receivables. . . . . . . . . . . . . . . . 259.9 5.0 - 264.9
Inventories. . . . . . . . . . . . . . . . 328.8 - - 328.8
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . 590.8 - - 590.8
Leasing Subsidiary. . . . . . . . . . . . - 536.2 (57.0) 479.2
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . (263.0) - - (263.0)
Leasing Subsidiary. . . . . . . . . . . . - (139.9) - (139.9)
Note receivable from parent. . . . . . . . - 90.8 (90.8) -
Investment in Leasing Subsidiary . . . . . 154.8 - (154.8) -
Other assets . . . . . . . . . . . . . . . 62.2 2.8 (27.7) 37.3
$1,142.0 $495.1 $(330.3) $1,306.8
Liabilities and Stockholders' Equity
Short-term debt. . . . . . . . . . . . . . $ 192.0 $ - $ - $ 192.0
Accounts payable and accrued liabilities . 153.1 8.5 - 161.6
Billings in excess of cost and
related earnings. . . . . . . . . . . . . 12.6 - - 12.6
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . 132.7 - (90.8) 41.9
Leasing Subsidiary. . . . . . . . . . . . - 236.0 - 236.0
Deferred income taxes. . . . . . . . . . . 5.8 95.8 (27.7) 73.9
Deferred income. . . . . . . . . . . . . . 59.9 - (59.9) -
Other liabilities. . . . . . . . . . . . . 15.4 - 2.9 18.3
Stockholders' equity . . . . . . . . . . . 570.5 154.8 (154.8) 570.5
$1,142.0 $495.1 $(330.3) $1,306.8
Income Taxes
(in millions except per share data)
Effective April 1, 1993 the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." This Statement requires a change from the deferred to
the liability method of computing income taxes. As permitted by
Statement No. 109, the Company has elected not to restate the
financial statements of any prior period. The cumulative effect
of applying the change in accounting method is a decrease in the
Company's deferred tax liability and a nonrecurring credit of
$7.9 or $0.20 per share.
The provision for federal income taxes is determined on a
consolidated return basis. The Company and the Leasing
Subsidiary file a consolidated federal income tax return. The
significant components of the provision (benefit) for income
taxes follow:
Year Ended March 31
1994 1993 1992
Current
Federal. . . $42.5 $23.5 $18.8
State. . . . 4.7 2.2 1.6
47.2 25.7 20.4
Deferred. . . . . (1.3) 1.4 (5.0)
Total . . . . . . $45.9 $27.1 $15.4
Deferred income tax was provided in the financial statements for
timing differences between financial and taxable income.
Components of the deferred provision (benefit) for income taxes
computed at the statutory rate for fiscal 1993 and 1992 follow:
Year Ended March 31
1993 1992
Excess of tax depreciation over
financial depreciation................. $ 6.4 $(4.4)
Profits on long-term contracts recorded
on the percentage of completion
method for financial purposes and
related items.......................... 0.4 -
Pensions and other benefits............. (5.2) (2.0)
Accounts receivable and inventory
valuation.............................. (1.6) (0.5)
Alternative minimum tax credit.......... 2.3 2.0
Other................................... (0.9) (0.1)
Total deferred provision (benefit)... $ 1.4 $(5.0)
The components of deferred liabilities and assets at March 31,
1994 follow:
March 31
1984
Deferred tax liabilities:
Excess of tax depreciation over
financial statement depreciation....... $100.1
Total deferred tax liabilities...... $100.1
Deferred tax assets:
Profits on long-term contracts recorded
on the percentage of completion
method for financial purposes
and related items...................... $ 1.3
Pensions and other benefits.............. 21.3
Accounts receivable and inventory
valuation.............................. 0.7
Other.................................... 2.9
Total deferred tax assets........... 26.2
Net deferred tax liabilities............. $ 73.9
The provision for income taxes in fiscal 1994, 1993 and 1992
results in effective tax rates different than the statutory
rates. The reconciliation between the effective and statutory
rates follows:
1994 1993 1992
Statutory rate.............. 35.0% 34.0% 34.0%
State taxes................. 2.7 2.0 2.7
Effect of 1% rate increase on
deferred taxes............ 1.8 - -
Other....................... 0.7 1.6 2.1
Effective tax rate.......... 40.2% 37.6% 38.8%
In fiscal 1994, 1993 and 1992 income taxes of $44.7, $22.8 and
$20.2, respectively, were paid.
Employee Benefit Plans
(in millions)
Pension plans are in effect which provide income and death benefits for
eligible employees. The Company's policy is to fund retirement costs accrued
to the extent such amounts are deductible for income tax purposes. Plan
assets include cash, short-term debt securities, and other investments.
Benefits are based on years of credited service and compensation.
Net periodic pension expense for fiscal 1994, 1993, and 1992 included the
following components:
Year Ended March 31
1994 1993 1992
Service cost-benefits earned during the period $ 6.2 $ 8.2 $ 6.2
Interest cost on projected benefit obligation. 6.3 5.2 4.9
Actual return on assets. . . . . . . . . . . . (1.5) (4.6) (5.0)
Net amortization and deferral. . . . . . . . . (4.4) (0.6) 1.1
Accrual of profit sharing contribution . . . . 2.6 2.0 1.8
Net periodic pension expense . . . . . . . . . $ 9.2 $ 10.2 $ 9.0
Assumptions used for valuation of the projected
benefit obligation were: Year Ended March 31
1994 1993 1992
Discount rates . . . . . . . . . . . . . . . . 8.25% 9% 9%
Rates of increase in compensation levels . . . 5.25% 6% 6%
Expected long-term rate of return on assets. . 9% 9% 9%
Amounts recognized in the Company's consolidated
balance sheet follow: March 31
1994 1993
Actuarial present value of benefit obligation:
Vested benefit obligation. . . . . . . . . . $ 49.4 $ 39.8
Accumulated benefit obligation . . . . . . . $ 61.3 $ 48.9
Projected benefit obligation . . . . . . . . . $ 78.6 $ 64.8
Plan assets at fair value. . . . . . . . . . . 63.1 58.9
Projected benefit obligation
in excess of plan assets. . . . . . . . . . . (15.5) (5.9)
Unrecognized net asset at April 1, 1985. . . . (2.3) (3.2)
Unrecognized net asset at January 1, 1986. . . (1.0) (1.2)
Unrecognized net obligation at January 1, 1987. - 0.5
Unrecognized net loss at March 31. . . . . . . 12.9 1.7
Accrued pension expense. . . . . . . . . . . . $ (5.9) $ (8.1)
The Company has a contributory profit sharing plan for employees of the Company
and certain affiliates. Under the plan, eligible employees are allowed to make
voluntary pre-tax contributions. The Company's contribution to this plan, as
defined, is based on consolidated earnings and dividends.
Contingencies
In May, 1994, a jury sitting in the United States District
Court for the Southern District of New York returned a verdict
against Mosher Steel Company, a former subsidiary of Trinity
Industries, Inc. and Trinity Industries, Inc. in an action
brought against Mosher by Morse-Diesel, Inc.
In August, 1982, Mosher entered into a subcontract with
Morse-Diesel for the fabrication and erection of structural steel
for the construction of the Marriott Marquis Hotel in Times
Square, New York City, New York. In August, 1984, Morse-Diesel
commenced the action stated above against Mosher and Trinity for
damages allegedly caused by Mosher's and its erection
subcontractor's performance of the structural steel contract.
Judgement against Mosher will be entered in the amount of
$25,775,933 plus statutory interest from September, 1985.
Mosher has been advised by legal counsel that it has
substantial defenses and remedies available, and it will pursue
all available avenues in the post-trial and appellate review
processes. While Mosher's ultimate liability in this matter is
difficult to assess, it is management's belief that the final
outcome is not reasonably likely to have a material adverse
affect on the Company's consolidated financial position.
Mosher and Trinity have not been involved in the fabrication of
structural steel for multi-story buildings since 1989.
The Company is involved in various other claims and lawsuits
incidental to its business. In the opinion of management, these
claims and suits in the aggregate will not have a material
adverse affect on the Company's consolidated financial
statements.
Report of Independent Auditors
The Board of Directors and Stockholders
Trinity Industries, Inc.
We have audited the accompanying consolidated balance sheets of
Trinity Industries, Inc. as of March 31, 1994 and 1993, and the
related consolidated statements of income, cash flows and
stockholders' equity for each of the three years in the period
ended March 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Trinity Industries, Inc. at March 31, 1994
and 1993, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended March
31, 1994, in conformity with generally accepted accounting
principles.
ERNST & YOUNG
Dallas, Texas
May 10, 1994
Supplemental Information
Supplementary Unaudited Quarterly Data First Second Third Fourth
(in millions except for per share data) Quarter Quarter Quarter Quarter Year
Year ended March 31, 1994:
Revenues . . . . . . . . . . . . . $ 402.2 463.6 466.4 452.7 1,784.9
Operating profit . . . . . . . . . $ 27.6 33.0 30.1 25.9 116.6
Income before cumulative effect
of change in accounting for income
taxes . . . . . . . . . . . . . . $ 16.8 17.8 18.5 15.2 68.3
Cumulative effect as of April 1,
1993 of change in accounting for
income taxes. . . . . . . . . . . 7.9 - - - 7.9
Net income . . . . . . . . . . . . $ 24.7 17.8 18.5 15.2 76.2
Income per common and common
equivalent share before cumulative
effect of change in accounting for
income taxes. . . . . . . . . . . $ 0.42 0.44 0.46 0.38 1.69
Cumulative effect of change in
accounting for income taxes . . . 0.20 - - - 0.20
Net income per common and common
equivalent share. . . . . . . . . $ 0.62 0.44 0.46 0.38 1.89
Year ended March 31, 1993:
Revenues . . . . . . . . . . . . . $ 364.7 393.8 392.6 388.9 1,540.0
Operating profit . . . . . . . . . $ 14.4 16.1 20.4 23.7 74.6
Net income . . . . . . . . . . . . $ 8.3 9.7 12.3 14.7 45.0
Net income per common and
common equivalent share . . . . . $ 0.24 0.28 0.35 0.40 1.27
Division Officers
Railcars
Timothy R. Wallace
Chairman, Railcars
Marvin B. Hughes
President, Railcar
Repair
B. Ray Autry
Vice President
Dan D. Banks
Vice President
Fred M. Groff
Vice President
Dale B. Hill
Vice President
Helmut F. Hvizdalek
Vice President
Jeffrey J. Marsh
Vice President
W. C. Newby
Vice President
Timothy R. Schitter
Vice President
Stephen W. Smith
Vice President
Richard C. Snyder
Vice President
Leasing
Richard G. Brown
Executive Vice
President
Thomas C. Jardine
Vice President
Construction Products
and Metal Components
John T. Sanford
Chairman, Construction
Products and Metal
Components
Don A. Graham
President, Rollform
Don H. Johnson
President, Structural
Products
Harry A. Syak
President, Syro, Inc.
Cecil C. Spear, Jr.
Executive Vice President
Rodney A. Boyd
Vice President
Thomas B. Clark
Vice President
Richard D. Dalton
Vice President
James Randall Foil
Vice President
Bruce D. McMickle
Vice President
Charles R. Norton
Vice President
Carl E. Stevens
Vice President
Christine S. Stucker
Vice President
Robert K. Van Noord
Vice President
Construction Products
Ready-Mix and Aggregates
Mark W. Stiles
President
Haywood Walker, III
Executive Vice President
Douglas Almond
Vice President
Wiliam A. McWhirter, II
Vice President
Kenneth S. Wadsworth
Vice President
Marine Products
John Dane, III
President, Marine
Products
George J. Fegert
President, Gretna
Machine and Iron Works
Neal S. Platzer
Platzer Shipyard, Inc.
Vincent R. Almerico
Senior Vice President
Robert E. Kenny
Senior Vice President
Harvey B. Walpert
Senior Vice President
Clifford Anglin
Vice President
George DeBord
Vice President
Salvadore J. Guarino
Vice President
Sidney C. Mizell
Vice President
Gary D. Owens
Vice President
Anil Raj
Vice President
James G. Rivers, Jr.
Vice President
Containers
Custom Vessels
William E. Adams
President, Containers
and Custom Fabrication
Paul J. Tarantolo
President, TMF
Charles A. Evans
Vice President
E. C. Green
Vice President
George W. Gruner
Vice President
Murphy B. Horton
Vice President
Charles G. Moore
Vice President
Billy Ted Walsworth
Vice President
Steve Zoller
Vice President
LPG Containers
Timothy R. Wallace
Chairman, LPG Containers
Michael C. Cooper
Vice President
John R. McDearman
Vice President
Transportation
Patrick A. Turner
President,
Transportation
Directors
David W. Biegler
Chairman, President and
Chief Executive Officer
ENSERCH Corporation
Barry J. Galt
Chairman, President and
Chief Executive Officer
Seagull Energy
Corporation
Dean P. Guerin
Chairman and Chief
Executive Officer
Berry-Barnett Food
Distribution Company
Jess T. Hay
Chairman and Chief
Executive Officer
Lomas Financial
Corporation
(diversified financial
services)
Edmund M. Hoffman
Investments
Ray J. Pulley
Investments
Timothy R. Wallace
Group Vice President
W. Ray Wallace
Chairman, President and
Chief Executive Officer
Executive Officers
W. Ray Wallace
Chairman, President and
Chief Executive Officer
Ralph A. Banks, Jr.
Senior Vice President
Richard G. Brown
Senior Vice President
K. W. Lewis
Senior Vice President
Lee D. McElroy
Senior Vice President
William E. Adams
Group Vice President
John Dane, III
Group Vice President
John T. Sanford
Group Vice President
Mark W. Stiles
Group Vice President
Jack L. Cunningham, Jr.
Vice President
John M. Lee
Vice President
R. A. Martin
Vice President
F. Dean Phelps, Jr.
Vice President
Joe F. Piriano
Vice President
Neil O. Shoop
Treasurer
William J. Goodwin
Controller
J. J. French, Jr.
Secretary
(Employed by outside
law firm)
Executive Offices
2525 Stemmons Freeway
Dallas, Texas
75207-2401
P.O. Box 568887
Dallas, Texas 75356-8887
Tel: (214) 631-4420
Auditors
Ernst & Young
Transfer Agent and
Registrar
The Bank of New York
New York, New York
Annual Meeting
The Annual Meeting of
Stockholders will be on
July 20, 1994, at 9:30
a.m. in the auditorium of
the Dallas Museum of Art,
1717 North Harwood
Street, Dallas, Texas
Form 10-K
A copy of the Company's
Form 10-K, filed with the
Securities and Exchange
Commission, shall be
furnished without charge
upon written request to
F. Dean Phelps, Vice
President, Trinity
Industries, Inc., P. O.
Box 568887, Dallas, Texas
75356-8887.
EXHIBIT 22
Trinity Industries, Inc.
Listing of Subsidiaries of the Registrant
The Registrant has no parent.
At March 31, 1994, the operating subsidiaries of the Registrant were:
Percentage of
Organized voting securities
under the owned by the
Name of subsidiary laws of Registrant
Beaird Industries, Inc. Delaware 100%
Beaird Industries, Inc. of Orange Delaware 100%
Platzer Shipyard, Inc. Delaware 100%
Standard Forged Products, Inc. Texas 100%
Stearns Airport Equipment Co., Inc. Delaware 100%
Syro, Inc. Ohio 100%
Transit Mix Concrete & Materials
Company Delaware 100%
Trinity Industries Leasing Company Delaware 100%
Trinity Industries Transportation, Inc. Texas 100%
Trinity Marine Caruthersville, Inc. Delaware 100%
Trinity Marine Gulfport, Inc. Nevada 100%
Trinity Marine Panama City, Inc. Delaware 100%
Trinity Materials, Inc. Delaware 100%
Xenium Fiberglass Corporation Delaware 100%
EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1994
Commission File Number 1-6903
PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC.
AND CERTAIN AFFILIATES
(Full Title of the plan)
TRINITY INDUSTRIES, INC.
(Name of issuer of the securities held pursuant to the plan)
Delaware 75-0225040
(State of Incorporation) (I.R.S. Employer Identification No.)
2525 Stemmons Freeway Dallas, Texas 75207-2401
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (214) 631-4420
Profit Sharing Plan for Employees of Trinity Industries, Inc.
and Certain Affiliates
Index to Annual Report on Form 11-K
(a) Financial Statements
Description Page
Report of independent auditors . . . . . . . 4
Statement of financial condition as of
March 31, 1994 and 1993 . . . . . . . . . . . 5 - 6
Statement of income and changes in Plan
equity for the years ended March 31, 1994,
1993 and 1992 . . . . . . . . . . . . . . . . 7 - 9
Notes to financial statements . . . . . . . . 10
Schedules - Schedules I, II, and III have been
omitted because the information required is included
in the Financial Statements or the notes thereto.
(b) Exhibits
Number Title Page
1 Consent of independent auditors 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees have duly caused this Annual Report to be
signed by the undersigned thereunto duly authorized.
Profit Sharing Plan for Employees of Trinity Industries, Inc.
and Certain Affiliates
/s/ F. Dean Phelps, Jr.
F. Dean Phelps, Jr.
Vice President
June 28, 1994
Report of Independent Auditors
The Board of Directors
Trinity Industries, Inc.
We have audited the accompanying statements of financial
condition of the Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates (the "Plan") as of March
31, 1994 and 1993, and the related statements of income and
changes in plan equity for each of the three years in the period
ended March 31, 1994. These financial statements are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial condition
of the Plan at March 31, 1994 and 1993, and the income and
changes in plan equity for each of the three years in the period
ended March 31, 1994, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying
supplemental schedules of assets held for investment and
reportable transactions are presented for purposes of complying
with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the basic
financial statements. The supplemental schedules have been
subjected to the auditing procedures applied in our audit of the
1994 financial statements and, in our opinion, are fairly stated
in all material respects in relation to the 1994 basic financial
statements taken as a whole.
ERNST & YOUNG
Dallas, Texas
June 3, 1994
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Financial Condition
March 31, 1994
Putnam Mutual Funds
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Assets Account Account Income Trust Voyager Loans Total
Cash and short-term
investments . . . . . . . . . $ 15,766 $ 42,787 $ - $ - $ - $ 56,160 $ 114,713
Notes receivable
from participants . . . . . . - - - - - 567,334 567,334
Investment in Trinity
common stock, at market . . . 9,280,170 - - - - - 9,280,170
Investment in guaranteed
investment contracts, at
contract value . . . . . . . - 26,064,092 - - - - 26,064,092
Investment in Putnam mutual
funds, at market . . . . . . - - 2,753,306 2,566,037 1,872,152 - 7,191,495
Interest receivable . . . . . . 183 68,898 4 14,994 8 173 84,260
Contribution receivable
from Trinity . . . . . . . . 416,203 1,288,379 265,819 250,827 310,555 - 2,531,783
Contribution receivable
from employees. . . . . . . . 134,956 373,797 97,830 77,199 85,887 17,444 787,113
$9,847,278 $27,837,953 $3,116,959 $ 2,909,057 $2,268,602 $ 641,111 $46,620,960
Liabilities and Plan equity
Accrued distributions . . . . . $ 169,215 $ 447,552 $ 91,501 $ 104,510 $ 112,326 $ 4,957 $ 930,061
Plan equity . . . . . . . . . . 9,678,063 27,390,401 3,025,458 2,804,547 2,156,276 636,154 45,690,899
$9,847,278 $27,837,953 $3,116,959 $ 2,909,057 $2,268,602 $ 641,111 $46,620,960
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Financial Condition
March 31, 1993
Putnam Mutual Funds
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Assets Account Account Income Trust Voyager Loans Total
Cash and short-term
investments . . . . . . . . . $ 73,141 $ 107,563 $ 8,120 $ 4,876 $ 4,519 $ 5,317 $ 203,536
Notes receivable
from participants . . . . . . - - - - - 449,509 449,509
Investment in Trinity
common stock, at market . . . 7,176,869 - - - - - 7,176,869
Investment in guaranteed
investment contracts, at
contract value . . . . . . . - 21,044,135 - - - - 21,044,135
Investment in Putnam mutual
funds, at market . . . . . . - - 1,684,458 2,222,162 853,411 - 4,760,031
Interest receivable . . . . . . 181 149,952 15,816 14,318 8 110 180,385
Contribution receivable
from Trinity . . . . . . . . 269,297 1,152,260 104,723 194,247 160,080 - 1,880,607
Contribution receivable
from employees. . . . . . . . 71,416 273,706 47,329 56,783 30,601 11,065 490,900
$7,590,904 $22,727,616 $1,860,446 $ 2,492,386 $1,048,619 $ 466,001 $36,185,972
Liabilities and Plan equity
Accrued distributions . . . . . $ 130,916 $ 308,532 $ 31,197 $ 56,412 $ 68,236 $ 13,362 $ 608,655
Plan equity . . . . . . . . . . 7,459,988 22,419,084 1,829,249 2,435,974 980,383 452,639 35,577,317
$7,590,904 $22,727,616 $1,860,446 $ 2,492,386 $1,048,619 $ 466,001 $36,185,972
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Income and Changes in Plan Equity
Year Ended March 31, 1994
Putnam Mutual Funds
Guaranteed U.S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
Net investment income:
Interest . . . . . . . . . . . . $ 2,683 $1,873,188 $ 420 $ 200,136 $ 223 $ 1,759 $ 2,078,409
Dividends . . . . . . . . . . 144,518 - 177,194 - 57,555 - 379,267
Other . . . . . . . . . . . - - - - - 321,766 321,766
147,201 1,873,188 177,614 200,136 57,778 323,525 2,779,442
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . . 2,636,953 9,307,147 1,197,660 2,041,323 801,574 - 15,984,657
Aggregate costs . . . . . . . (2,649,556) (9,307,147) (1,187,943) (2,051,444) (799,916) - (15,996,006)
Net realized gain(loss) . . . . . . (12,603) - 9,717 (10,121) 1,658 - (11,349)
Unrealized appreciation (depreciation)
of investments . . . . . . . . . 1,197,204 - (131,217) (156,008) 47,923 (57) 957,845
Contributions:
Employee contribution. . . . . . 1,301,604 3,663,011 821,311 875,662 605,778 6,379 7,273,745
Employer contribution. . . . . . 460,564 1,288,379 321,176 250,827 255,198 - 2,576,144
1,762,168 4,951,390 1,142,487 1,126,489 860,976 6,379 9,849,889
Withdrawals, distributions
and transfers . . . . . . . . . . (875,895) (1,853,261) (2,392) (791,923) 207,558 (146,332) (3,462,245)
Net increase in Plan equity . . . . 2,218,075 4,971,317 1,196,209 368,573 1,175,893 183,515 10,113,582
Plan equity:
Beginning of year . . . . . . . 7,459,988 22,419,084 1,829,249 2,435,974 980,383 452,639 35,577,317
End of year . . . . . . . . . . $9,678,063 $27,390,401 $ 3,025,458 $2,804,547 $2,156,276 $636,154 $45,690,899
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Income and Changes in Plan Equity
Year Ended March 31, 1993
Putnam Mutual Funds
Guaranteed U.S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
Net investment income:
Interest . . . . . . . . . . . . $ 3,040 $1,637,458 $ 462 $ 51,977 $ 356 $ 895 $ 1,694,188
Dividends . . . . . . . . . . 117,359 - 43,610 - 16,400 - 177,369
Other . . . . . . . . . . . - - - - - 294,872 294,872
120,399 1,637,458 44,072 51,977 16,756 295,767 2,166,429
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . . 1,273,425 5,381,493 585,346 734,766 371,519 - 8,346,549
Aggregate costs . . . . . . . (1,273,425) (5,381,493) (585,346) (734,774) (371,569) - (8,346,607)
Net realized gain(loss) . . . . . . - - - (8) (50) - (58)
Unrealized appreciation (depreciation)
of investments . . . . . . . . . 2,351,208 - 66,094 (26,234) 49,684 (65) 2,440,687
Contributions:
Employee contribution. . . . . . 825,144 3,432,929 468,859 559,902 290,269 11,065 5,588,168
Employer contribution. . . . . . 269,296 1,152,260 104,723 194,247 160,080 - 1,880,606
Syro Plan Merger . . . . . . . . 157,974 - 916,552 1,357,725 359,558 - 2,791,809
1,252,414 4,585,189 1,490,134 2,111,874 809,907 11,065 10,260,583
Withdrawals, distributions
and transfers . . . . . . . . . . (521,115) (1,873,990) (23,572) (26,112) (50,159) (85,652) (2,580,600)
Net increase in Plan equity . . . . 3,202,906 4,348,657 1,576,728 2,111,497 826,138 221,115 12,287,041
Plan equity:
Beginning of year . . . . . . . 4,257,082 18,070,427 252,521 324,477 154,245 231,524 23,290,276
End of year . . . . . . . . . . $7,459,988 $22,419,084 $ 1,829,249 $2,435,974 $980,383 $452,639 $35,577,317
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Income and Changes in Plan Equity
Year Ended March 31, 1992
Putnam Mutual Funds
Guaranteed U.S. Govt.
Stock Investment Growth & Income Participant
Account Account Income Trust Voyager Loans Total
Net investment income:
Interest . . . . . . . . . . . $ 5,086 $ 1,316,000 $ - $ 1,603 $ - $ 156 $ 1,322,845
Dividends . . . . . . . . . 101,719 - 963 - - - 102,682
Other . . . . . . . . . . (48,331) 54,860 63,153 87,795 40,158 344,436 542,071
58,474 1,370,860 64,116 89,398 40,158 344,592 1,967,598
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . 1,589,257 3,813,695 97,353 874 - 53,365 5,554,544
Aggregate costs . . . . . . (1,662,696) (3,813,695) (97,361) (881) - (53,365) (5,627,998)
Net realized gain(loss) . . . . . (73,439) - (8) (7) - - (73,454)
Unrealized appreciation (depreciation)
of investments . . . . . . 545,683 - (994) (1,829) (3,997) (117) 538,746
Contributions:
Employee contribution. . . . . 812,324 3,612,064 92,022 113,595 55,159 - 4,685,164
Employer contribution. . . . . 215,989 1,033,775 101,642 124,932 65,094 78 1,541,510
1,028,313 4,645,839 193,664 238,527 120,253 78 6,226,674
Withdrawals, distributions
and transfers . . . . . . . . . (574,382) (1,629,268) (4,257) (1,612) (2,169) (113,029) (2,324,717)
Net increase in Plan equity . . . 984,649 4,387,431 252,521 324,477 154,245 231,524 6,334,847
Plan equity:
Beginning of year . . . . . . 3,272,433 13,682,996 - - - - 16,955,429
End of year . . . . . . . . . $4,257,082 $18,070,427 $252,521 $ 324,477 $ 154,245 $231,524 $23,290,276
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Notes to Financial Statements
March 31, 1994
1. Description of the Plan
General - The Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates (the "Plan") was adopted by
the Board of Directors of Trinity Industries, Inc. (the "Board") on
December 11, 1986 and became effective January 1, 1987, for
eligible employees of Trinity Industries, Inc. and Certain
Affiliates (the "Employer"). The Plan is a defined contribution
plan designed to comply with the provisions of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA"). The
following is a brief description of the Plan. Participants should
refer to the Plan document for complete information regarding the
Plan. The Plan's fiscal year end is March 31.
Participation - Eligible employees, as defined, who desire to
contribute to the Plan, must elect to contribute on the form or
forms provided by the Committee and authorize the Employer to make
payroll deductions for contributions to the Plan.
Contributions - Each Plan participant agrees to contribute not
less than two percent nor more than ten percent of their
compensation in one percent increments as designated by the
participant. A participant's salary reduction may not exceed
$9,240 and $8,994 per calendar year ended 1994 and 1993,
respectively. A salary reduction and contribution agreement must
be entered into by each employee as the employee begins
participation in the Plan and may be amended by such employee each
quarter.
Employer matching contribution shall be made if Company
earnings are at least $0.33 per share of common stock and
sufficient to pay dividends to stockholders ($0.64, $0.53 and $0.53
per share for the years ended March 31, 1994, 1993, and 1992,
respectively). Dividends per share have been adjusted for the
three-for-two stock split distributed on August 31, 1993. If the
Employer matching contribution is made, then each participant with
at least five years of service, shall receive an amount equal to 50
percent of that portion of such participant's employee contribution
which does not exceed six percent of such participant's total
compensation for the year. If the Employer matching contribution
is made, then each participant with less than five years of service
shall receive an amount equal to 25 percent of that portion of such
participant's employee contribution which does not exceed six
percent of such participant's total compensation for the year.
Employer contributions are net of forfeitures, as defined.
Employer contributions for a given plan year shall be deposited in
the Profit Sharing Trust for Employees of Trinity Industries, Inc.
and Certain Affiliates (the "Trust Fund") as defined below, no
later than the date on which the Employer files its Federal income
tax return for such year.
The Employer and Texas Commerce Bank - Dallas (the "Trustee"),
have entered into a Trust Agreement under which the latter acts as
Trustee under the Plan. Texas Commerce Bank - Dallas is the
successsor Trustee to First City Bank of Dallas, N.A. pursuant to
the acquisition by Texas Commerce Bank - Dallas of the assets and
certain liabilities of the former First City Bank of Dallas, N.A.
In its capacity as Trustee, Texas Commerce Bank - Dallas invests
the employee contributions and Employer contributions in the
following investment options (hereafter collectively referred to as
the "Trust Fund"):
(a) Trinity Stock Investment Account ("Stock Account") holds
shares of Employer common stock purchased on behalf of the
participants. Idle cash is invested in interest-bearing
accounts until such time as it can be utilized to purchase
Employer common stock.
(b) Guaranteed Investment Contract Investment Account (the
"Guaranteed Investment Account") invests in guaranteed
investment contracts issued by an insurance company selected
annually by the Committee. At March 31, 1994, the guaranteed
investment contracts had guaranteed annual rates of return of
8.80% (GAC 4854), 9.06% (GAC 5764), 9.06% (GAC 5027) , 6.70%
(GAC 15960), 6.24% (GAC 627-05387), and 5.15% (GAC 7219).
(c) Putnam Mutual Funds Investment Accounts (the "Putnam
Mutual Funds") invests in three mutual funds selected by the
Committee. At March 31, 1994, the funds are U.S. Government
Income Trust, Growth and Income, and Voyager.
Participants may elect the extent to which assets are invested
in the options described above in increments of 10 percent or 25
percent. At March 31, 1994, 1993 and 1992, the majority of
participants had elected to participate in the guaranteed
investment contracts.
Benefits - Distribution of a participant's account balance is
payable upon retirement at or after age 65, total disability,
death, or termination of employment. Distribution is equal to the
salary reduction contribution and related earnings plus the vested
portion of the Employer contribution and related earnings.
Withdrawal of up to 100 percent of the employee contribution
can be made only to meet "immediate and heavy financial needs"
(medical care, college tuition, the purchase of a primary
residence, or to prevent the foreclosure on a primary residence) as
long as the funds are not available for such needs from other
sources. No withdrawal can be made against the earnings on the
employee contributions or against the Employer contribution and
related earnings. These restrictions no longer apply when the
participant reaches age 59 1/2.
Loans for "immediate and heavy financial needs" may be made
for a minimum of $1,000 up to a maximum of $50,000, not to exceed
50 percent of the Employee contribution and related earnings and
not to exceed 50 percent of the vested portion of the Employer
contribution and related earnings. Loans are subject to rules and
regulations established by the Plan Administrator, as defined in
the Plan.
Vesting - The Employer contribution and related earnings
(losses) vest to participants, depending upon the number of years
of vesting service, as defined, completed by such participant as
follows:
Years of Service Percentage Vested
Less than 1 0
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
A participant is 100 percent vested in their Employer
contribution and allocated portion of related earnings (losses)
upon their attainment of age 65 and is always 100 percent vested in
their employee contribution and related earnings (losses) on such
contribution.
Administration of the Plan - The Plan is administered by a
Profit Sharing Committee (the "Committee") consisting of at least
three persons who are appointed by the Board. The members of the
Committee serve at the pleasure of the Board, and any committee
member who is an employee of the Employer shall not receive
compensation for his services.
A separate account is maintained for each participant. The
Plan provides that account balances for participants are adjusted
periodically as follows:
(a) Employee contributions are generally allocated on a
quarterly basis;
(b) Participant's share of the Employer contribution shall be
allocated to the participant's account as of a date no later
than the last day of the Plan year;
(c) Earnings and appreciation or depreciation of investment
assets of the Trust Fund for each calendar quarter shall be
allocated to the accounts of participants, former
participants and beneficiaries who had unpaid balances in
their accounts on the last day of such calendar quarter in
proportion to the balances in such accounts at the beginning
of the calendar quarter.
Upon request, distributions shall be made no earlier than the
later of the last day of the calendar quarter in which entitlement
occurs or the date on which the Committee determines the final
balances. Distributions from the Stock Account shall be made in
cash unless otherwise designated by the participant.
Income tax status - The Plan has received a determination
letter from the Internal Revenue Service stating that the Plan is a
qualified plan under Section 401(a) of the Internal Revenue Code
(the "Code") and that the Trust is exempt from federal income tax
under Section 501(a) of the Code.
Employee contributions and Employer contributions are not
included in the participant's federal taxable income in the year
such contributions are made. A participant shall not be subject to
federal income taxes with respect to participation in the Plan
until the amounts are withdrawn or distributed.
Amendment or termination of the Plan - The Employer may amend
the Plan at any time. However, no amendment, unless made to secure
approval of the Internal Revenue Service or other governmental
agency, may operate retroactively to reduce or divest the then
vested interest in the Plan of any participant, former participant
or beneficiary, or to reduce or divest any benefit payable under
the Plan unless all participants, former participants and
beneficiaries then having vested interests or benefit payments
affected thereby consent to such amendment.
The Employer may terminate the Plan at any time. Upon complete
or partial termination, the accounts of all participants affected
thereby shall become 100 percent vested, and the Committee shall
direct the Trustee to distribute the assets in the Trust Fund,
after receipt of any required approval by the Internal Revenue
Service and payment of any expenses properly chargeable thereto, to
participants, former participants, and beneficiaries in proportion
to their respective account balances.
2. Significant Accounting Policies
Investments and investment income - Investment in the common
stock of the Employer and the Putnam Mutual Funds are valued at the
last reported sales price on the last business day of the Plan year
as reported on a national securities exchange. The investments in
guaranteed investment contracts are valued at cost which
approximates market value.
Security transactions are recorded on a trade date basis. The
statement of income and changes in Plan equity include net
unrealized appreciation or depreciation in market value on
investments. The Plan's financial statements are prepared on an
accrual basis.
Realized gains and losses - Realized gains and losses have been
calculated using historical cost (first in, first out).
3. Investments
Investments are as follows:
March 31, 1994 March 31, 1993
Cost Market Cost Market
Trinity common
stock $ 5,433,189 $ 9,280,170 $ 4,527,091 $ 7,176,868
Guaranteed investment
contracts
GAC 4854 7,100,022 7,100,022 6,479,177 6,479,177
GAC 5764 4,885,851 4,885,851 4,479,966 4,479,966
GAC 5432 - - 3,225,021 3,225,021
GAC 7219 3,800,180 3,800,180 - -
GAC 5027 4,015,742 4,015,742 3,655,118 3,655,118
GAC 15960 3,013,308 3,013,308 2,853,853 2,853,853
GAC 627-05387 3,248,989 3,248,989 351,000 351,000
26,064,092 26,064,092 21,044,135 21,044,135
Putnam mutual funds
U.S. Govt.
Income Trust 2,750,108 2,566,037 2,250,225 2,222,162
Growth & Income 2,819,423 2,753,306 1,619,358 1,684,458
Voyager 1,778,542 1,872,152 807,724 853,411
7,348,073 7,191,495 4,677,307 4,760,031
Participant loans 567,573 567,334 449,691 449,509
$39,412,927 $43,103,091 $30,698,224 $33,430,543
4. Unrealized Appreciation (Depreciation) of Investments
Unrealized appreciation (depreciation) of investments in Trinity common
stock, Putnam mutual funds, and Participant loans for the years ended March
31, 1994, 1993, and 1992 were determined as follows:
Net
Investments Investments increase
at market at cost (decrease)
March 31, 1994
Trinity common stock
March 31, 1994 $ 9,280,170 $ 5,433,189 $3,846,981
March 31, 1993 7,176,868 4,527,091 2,649,777
2,103,302 906,098 1,197,204
Putnam mutual funds
March 31, 1994 7,191,495 7,348,073 (156,578)
March 31, 1993 4,760,031 4,677,307 82,724
2,431,464 2,670,766 (239,302)
Participant loans
March 31, 1994 567,334 567,573 (239)
March 31, 1993 449,509 449,691 (182)
117,825 117,882 (57)
Increase in unrealized
appreciation of
investments $ 4,652,591 $ 3,694,746 $ 957,845
March 31, 1993
Trinity common stock
March 31, 1993 $ 7,176,868 $ 4,527,091 $2,649,777
March 31, 1992 4,016,528 3,717,959 298,569
3,160,340 809,132 2,351,208
Putnam mutual funds
March 31, 1993 4,760,031 4,677,307 82,724
March 31, 1992 361,165 367,985 (6,820)
4,398,866 4,309,322 89,544
Participant loans
March 31, 1993 449,509 449,691 (182)
March 31, 1992 222,840 222,957 (117)
226,669 226,734 (65)
Increase in unrealized
appreciation of
investments $ 7,785,875 $ 5,345,188 $2,440,687
March 31, 1992
Trinity common stock
March 31, 1992 $ 4,016,528 $ 3,717,959 $ 298,569
March 31, 1991 2,939,045 3,186,159 (247,114)
1,077,483 531,800 545,683
Putnam mutual funds
March 31, 1992 361,165 367,985 (6,820)
Participant Loans
March 31, 1992 222,840 222,957 (117)
Increase in unrealized
appreciation of
investments $ 1,661,488 $ 1,122,742 $ 538,746
5. Expenses
The expenses incurred by the Trustee in the performance of its duties,
including the Trustee's compensation and the services of an actuary, shall
be paid by the Plan unless paid by the Employer. The Employer paid
$196,608, $237,576, and $270,107 for actuarial services and trustee fees on
behalf of the Plan for the fiscal years ended March 31, 1994, 1993, and
1992, respectively.
Index to Exhibits
Number Description Page
1 Consent of Independent Auditors 18
Consent of Independent Auditors
We consent to the incorporation by reference in Post Effective
Amendment No. 1 to the Registration Statement (Form S-8, File No. 33-
10937) pertaining to the Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates and in the related Prospectus of
our report dated June 3, 1994, with respect to the financial statements
and schedules of the Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates included in this Annual Report
(Form 11-K) for the year ended March 31, 1994.
ERNST & YOUNG
Dallas, Texas
June 28, 1994
Profit Sharing Plan for Employees
of Trinity Industries, Inc. And Certain Affiliates
Assets Held for Investment
March 31, 1994
Units,
shares,
or face Current
Identity amount Cost value
Trinity common stock 244,215 $ 5,433,189 $ 9,280,170
Guaranteed Investment Contracts
Allstate Life Insurance Co.
GAC 4854, 8.80% 7,100,022 7,100,022
GAC 5027, 9.06% 4,015,742 4,015,742
John Hancock Mutual Life
GAC 7219, 5.15% 3,800,180 3,800,180
Massachusetts Mutual Life
Insurance Co.
GAC 5764, 9.06% 4,885,851 4,885,851
Provident Life & Accident
Insurance Co.
GAC 627-05387, 6.24% 3,248,989 3,248,989
Travelers Insurance Co.
GAC 15960, 6.70% 3,013,308 3,013,308
26,064,092 26,064,092
Putnam mutual funds
U. S. Govt.
Income Trust 199,847 2,750,108 2,566,037
Growth & Income 212,446 2,819,423 2,753,306
Voyager 166,562 1,778,542 1,872,152
7,348,073 7,191,495
Participant loans 567,573 567,334
$39,412,927 $43,103,091
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Reportable Transactions
Year Ended March 31, 1994
(Pursuant to ERISA Section 2520.103-6(d)(2))
Purchases Sales
Number of Number of Net
trans- trans- gain
actions Cost actions Proceeds (loss)
John Hancock Mutual 2 $3,771,405 - - -
Life GAC 7219, 5.15%
Massachusetts Mutual
Life Insurance Co.
GACP 5432 - - 1 $3,471,405 -
Provident Life &
Accident Insurance Co.
GAC 627-05387, 6.24% 8 $2,769,460 - - -