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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
-
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1996
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) 589-8592
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 $1,413,996,430 as of May 31, 1996.
41,612,062
( Number of Shares of common stock outstanding as of May 31, 1996)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 1996 Annual Report to Stockholders
for the fiscal year ended March 31, 1996 are incorporated by
reference into Parts I, II, and IV hereof and portions of the
Registrant's definitive Proxy Statement for the 1996 Annual
Meeting of Stockholders to be held July 17, 1996 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 wide variety of 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 1996 Annual Report to Stockholders on page 22 under the
heading "Segment Information", and such section is incorporated herein by
reference.
Railcars. The Registrant manufactures railroad freight cars,
principally pressure and non- pressure tank cars, hopper cars, intermodal
cars and gondola cars used for transporting a wide variety of liquids,
gases and dry cargo. Tank cars transport products such as liquefied
petroleum gas, liquid fertilizer, sulfur, sulfuric acids and corn syrup.
Covered hopper cars carry cargo such as grain, dry fertilizer, plastic
pellets and cement. Open-top hoppers haul coal, and top-loading gondola
cars transport a variety of heavy bulk commodities such as scrap metals,
finished flat steel products, machinery and lumber. Intermodal cars
transport various products which have been loaded in containers to
minimize shipping costs.
Marine Products. The Registrant manufactures a variety of
marine products pursuant to customer orders. It produces various types
of vessels for offshore service including supply, crew, fishing and other
types of boats. The Registrant is currently constructing various
military vessels for both the United States Army and Navy. The Registrant
produces river hopper barges which are used to carry coal, grain and
miscellaneous commodities. The purchasers of the Registrant's marine
products include inland waterway marine operators, offshore oil and gas
drillers and operators, international ocean transportation companies,
barge transport companies and domestic and foreign governmental
authorities.
Construction Products. The construction products manufactured
by the Registrant include beams, girders, columns, highway guard rail and
highway safety devices and related barrier products, ready-mix concrete
and aggregates, passenger loading bridges, and baggage handling systems.
These products are used in the bridge, highway construction and building
industries and airports. Some of the sales of beams, girders and columns
are to general contractors and subcontractors on highway construction
projects. Generally, customers for highway guardrail and highway safety
devices are highway departments or subcontractors on highway projects.
Passenger loading bridges and conveyor systems are generally sold to
contractors, airports, or airlines as part of airport terminal
equipment. Ready-mix concrete and aggregates are used in the building
and foundation industry, and customers include primarily owners,
contractors and sub- contractors.
Containers. The Registrant is engaged in manufacturing metal
containers consisting of extremely large, heavy pressure vessels and
other heavy welded products, including industrial silencers,
desalinators, evaporators, and gas processing systems for the storage and
transportation of liquefied petroleum ("LP") gas and anhydrous ammonia
fertilizer. Pressure LP gas containers are utilized at industrial
plants, utilities, small businesses and in suburban and rural areas for
residential heating and cooking needs. Fertilizer containers are
manufactured for highway and rail transport, bulk storage, farm storage
and the application and distribution of anhydrous ammonia. The
Registrant also makes heat transfer equipment for the chemical, petroleum
and petrochemical industries and a complete line of custom vessels,
standard steam jacketed kettles, mix cookers, and custom-fabricated
cooking vessels for the food, meat, dairy, pharmaceutical, cosmetic and
chemical industries.
Metal Components. The metal components manufactured by the
Registrant are made from ferrous and non-ferrous metals and their alloys
and consist principally of butt weld type fittings, flanges and pressure
and non-pressure container heads. The weld fittings include caps,
elbows, return bends, concentric and eccentric reducers, full and
reducing outlet tees, and a full line of pipe flanges, all of which are
pressure rated. The Registrant manufactures and stocks, in standard,
extra-heavy and double-extra-heavy weights and in various diameters, weld
caps, tees, reducers, elbows, return bends, flanges and also manufactures
to customer specifications. The basic raw materials for weld fittings
and flanges are carbon steel, stainless steel, aluminum, chrome-moly and
other metal tubing or seamless pipe and forgings. The Registrant sells
its weld fittings and flanges to distributors and to other manufacturers
of weld fittings.
Container heads manufactured by the Registrant are pressed metal
components used in the further manufacture of a finished product. Since
the manufacture of container heads requires a substantial investment in
heavy equipment and dies, many other manufacturers order container heads
from the Registrant. Container heads are manufactured in various shapes
and may be pressure rated or non-pressure, depending on the intended use
in further manufacture. Other pressed shapes are also hot- or
cold-formed to customer requirements.
Leasing. The Company has one wholly-owned leasing subsidiary,
Trinity Industries Leasing Company ("TILC"), which was incorporated in
1979. TILC is engaged in leasing specialized types of railcars,
consisting of both tank cars and hopper cars, to industrial companies in
the petroleum, chemical, grain, food processing, fertilizer and other
industries which supply cars to the railroads. At March 31, 1996, TILC
had under lease 8,283 railcars. During fiscal year 1995, TILC divested
its inventory of river hopper barges previously held for lease. The
barges were operated under an agreement which provided for management of
the barges. The barges were generally used for movement of commodities
on the inland waterway system, primarily the Mississippi and Missouri
Rivers.
Substantially all equipment leased by TILC was purchased from
the Registrant at prices comparable to the prices for equipment sold by
the Registrant to third parties. As of March 31, 1996, TILC had
equipment on lease or available for lease purchased from the Registrant
at a cost of $391.5 million. Generally, TILC purchases the equipment to
be leased only after a lessee has committed to lease such equipment.
The volume of equipment purchased and leased by TILC depends
upon a number of factors, including the demand for equipment manufactured
by the Registrant, the cost and availability of funds to finance the
purchase of equipment, the Registrant's decision to solicit orders for
the purchase or lease of equipment and factors which may affect the
decision of the Registrant's customers as to whether to purchase or lease
equipment.
Although the Registrant is not contractually obligated to offer
to TILC equipment proposed to be leased by the Registrant's customers, it
is the Registrant's intention to effect all such leasing transactions
through TILC. Similarly, while TILC is not contractually obligated to
purchase from the Registrant any equipment proposed to be leased, TILC
intends to purchase and lease all equipment which the Registrant's
customers desire to lease when the lease rentals and other terms of the
proposed lease are satisfactory to TILC, subject to the availability and
cost of funds to finance the acquisition of the equipment.
Marketing, Raw Materials, Employees and Competition. As of
March 31, 1996, the Registrant operated in the continental United States
and Mexico. The Registrant sells substantially all of its products
through its own salesmen operating from offices in Montgomery, Alabama;
Elizabethtown and Paducah, Kentucky; Shreveport, Louisiana; Flint,
Michigan; St. Louis, Missouri; Gulfport, Mississippi; Asheville, North
Carolina; Cincinnati and Girard, Ohio; Beaumont, Dallas/Ft. Worth,
Houston and Navasota, Texas; Centerville, Utah; and Mexico. Independent
sales representatives are also used to a limited extent. The Registrant
markets railcars, containers and metal components throughout the United
States. Except in the case of weld fittings, guardrail, and standard
size LP gas containers, the Registrant's products are ordinarily
fabricated to the customer's specifications pursuant to a purchase order.
The principal materials used by the Registrant are steel plate,
structural steel shapes and steel forgings. There are numerous domestic
and foreign sources of such steel and most other materials used by the
Registrant.
The Registrant currently has approximately 16,300 employees, of
which approximately 15,000 are production employees and 1,300 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 1996 Annual Report
to Stockholders under the heading "Business Acquisitions," (pages 23
through 24) and such section is incorporated herein by reference.
On June 25, 1996, the Board of Directors of the Registrant approved
an initial public offering of one hundred percent (100%) of the common stock
of a newly incorporated company which will acquire the assets and liabilities
of a portion of the Registrant's Marine Products segment. The newly formed
company will engage in the business of constructing and repairing ocean-going
marine vessels. Completion of the offering is subject to registration of the
offering with the Securities and Exchange Commission.
Other Matters. The Registrant is not materially affected by federal,
state and local provisions which have been enacted or adopted regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment. To date, the Registrant has not suffered any
material shortages with respect to obtaining sufficient energy supplies to
operate its various plant facilities or its transportation vehicles. Future
limitations on the availability or consumption of petroleum products
(particularly natural gas for plant operations and diesel fuel for vehicles)
could have an adverse effect upon the Registrant's ability to conduct its
business. The likelihood of such an occurrence or its duration, and its
ultimate effect on the Registrant's operations, cannot be reasonably predicted
at this time.
Item 2. Properties.
The Registrant's principal executive offices are located in a ten
story office building containing approximately 107,000 sq. ft. and a connected
adjacent building containing approximately 66,000 sq. ft., each owned by the
Registrant, in Dallas, Texas. The following table sets forth certain salient
facts with respect to each of the operating plant properties owned and/or
leased by the Registrant at March 31, 1996:
Registrant's Uses of Approx.
Interest in Premises Bldg. Area Expiration Annual
Plant Location Property (1) (Sq Ft.) Date Rentals
Ackerman, MS Fee (e) 92,000 - -
Ashland City, TN Fee (b) 92,000 - -
Asheville, NC Lease (a) 94,000 06/30/99 $198,000
Beaumont, TX Fee (a) 431,000 - -
Belpre, OH Fee (c) 42,000 - -
Bessemer, AL Fee (a) 1,183,000 - -
Brusly, LA Fee (b) 148,000 - -
Butler, PA Fee (a) 386,000 - -
Butler, PA Lease (a) 30,000 12/31/02 $ 67,000
Caruthersville, MO Fee (b) 266,000 - -
Caruthersville, MO Fee (b) 40,000 03/01/99 $ 72,000
Cedartown, GA Fee (d) 143,000 - -
Centerville, UT Fee (c) 63,000 - -
Cincinnati, OH Fee (d,e) 203,000 - -
Dallas, TX
(2 plants) Fee (a) 447,000 - -
Denton, TX Fee (a) 117,000 - -
Elizabethtown, KY Fee (c) 40,000 - -
Elkhart, IN Fee (e) 108,000 - -
Enid, OK Fee (e) 73,000 - -
Flat Rock, NC Lease (a) 8,000 01/31/98 $ 64,000
Ft. Worth, TX
(6 plants) Fee (a,c,d) 650,000 - -
Girard, OH
(2 plants) Fee (c) 326,000 - -
Greenville, PA Fee (a) 752,000 - -
Gulfport, MS Fee (b) 438,000 - -
Harvey, LA Lease (b) 34,000 03/26/01 $ 86,000
Houston, TX
(3 plants) Fee (b,c,d) 587,000 - -
Huehuetoca, MX Fee (a,d) 264,000 - -
Johnstown, PA Fee (a) 148,000 - -
Lima, OH Fee (c) 72,000 - -
Lockport, LA Fee (b) 43,000 - -
Longview, TX
(4 plants) Fee (a,d) 631,000 - -
Longview, TX Lease (a) 57,000 10/31/00 $ 35,000
Madisonville, LA Fee (b) 137,000 - -
McKees Rocks, PA Fee (a) 462,000 - -
Monclova, MX Fee (a,d) 81,000 - -
Montgomery, AL Fee (c) 310,000 - -
Moss Point, MS
(2 plants) Fee (b) 73,000 - -
Mt. Orab, OH Fee (a) 183,000 - -
Nashville, TN Fee (b) 261,000 - -
Navasota, TX Fee (e) 170,000 - -
New Orleans, LA Lease (2) (b) 254,000 12/31/16 $ 42,000
New Orleans, LA Lease (b) 94,000 12/31/16 $ 53,000
Oklahoma City, OK Fee (a,d) 260,000 - -
Orange, TX Fee (d) 735,000 - -
Paducah, KY Fee (b) 49,000 - -
Panama City, FL Fee (b) 41,000 - -
Paris, TN Fee (a) 21,000 - -
Pascagoula, MS Fee (b) 40,000 - -
Pine Bluff, AR Fee (d) 56,000 - -
Quincy, IL Fee (d) 95,000 - -
Rocky Mount, NC Fee (d) 53,000 - -
Saginaw, TX
(2 plants) Fee (a) 291,000 - -
San Antonio, TX Fee (c) 224,000 - -
Sand Springs, OK Fee (e) 184,000 - -
Shreveport, LA Lease (a,d) 691,000 11/30/42 $ 12,000
Tulsa, OK Fee (a,d) 121,000 - -
Vallejo, MX Fee (d) 54,000 - -
Vidor, TX Fee (a) 126,000 - -
West Memphis, AR Fee (e) 77,000 - -
(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 70 percent of present productive capacity for
railcars, 65 percent for Marine Products, 75 percent for Construction
Products, 65 percent for Containers, and 80 percent for Metal Components.
Item 3. Legal Proceedings.
See page 28 of the Registrant's 1996
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
1996.
___________________
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 1996 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 1996 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 1996 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, 1996 and
1995 and for each of the three years in the period ended March 31, 1996
and the auditor's report thereon, and the Registrant's unaudited
quarterly financial data for the two year period ended March 31, 1996,
are incorporated by reference from the Registrant's 1996 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
17, 1996, 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 73 Chairman, President & 1958 July 1996
Chief Executive Officer
Ralph A. Banks, Jr. 72 Senior Vice President 1962 July 1996
Richard G. Brown 72 Senior Vice President 1979 July 1996
John T. Sanford 44 Senior Vice President 1993 July 1996
Timothy R. Wallace 42 Director & Group 1993 July 1996
Vice President
John Dane III 45 Group Vice President 1993 July 1996
Mark W. Stiles 47 Group Vice President 1993 July 1996
Jack L. Cunningham, Jr. 51 Vice President 1982 July 1996
John M. Lee 35 Vice President 1994 July 1996
R. A. Martin 61 Vice President 1974 July 1996
Tim L. Oglesby 38 Vice President 1995 July 1996
F. Dean Phelps, Jr. 52 Vice President 1979 July 1996
Joseph F. Piriano 59 Vice President 1992 July 1996
Linda S. Sickels 45 Vice President 1995 July 1996
Neil O. Shoop 52 Treasurer 1985 July 1996
William J. Goodwin 48 Controller 1986 July 1996
J.J. French, Jr. 65 Secretary 1970 July 1996
* This data is furnished as additional information pursuant to
instructions to Item 401 to Regulation S-K and in lieu of inclusion in
the Registrant's Proxy Statement.
(1) W. Ray Wallace, Chairman, President & Chief Executive Officer, is
the father of Timothy R. Wallace, a Director and Group Vice President of
the Registrant.
(2) Mr. Stiles joined the Registrant in 1991 upon the acquisition by the
Registrant of Transit Mix Concrete Company. For at least five years
prior thereto, Mr. Stiles was Executive Vice President and General
Manager of Transit Mix. Mr. Piriano was Director of Purchasing for the
Registrant for at least the last five years. Mr. Lee joined the
Registrant in 1994. For at least five years prior thereto, Mr. Lee was a
manager for a national public accounting firm. Mr. Oglesby joined the
Registrant in 1993. For at least five years prior thereto, Mr. Oglesby
was a software manager for a national defense contractor. Ms. Sickels
joined the Registrant in 1992. Prior to that, Ms. Sickels was in
government relations for a state utility company. All of the other
above-mentioned executive officers, except Mr. French, have been in the
full-time employ of the Registrant or its subsidiaries for more than five
years. Although the titles of certain such officers have changed during
the past five years, all have performed essentially the same duties
during such period of time.
(3) Mr. French, an attorney, is President of Joe French & Associates, a
Professional Corporation, since April, 1993. For at least five years
prior thereto, Mr. French was employed by Locke Purnell Rain Harrell, a
Professional Corporation.
(4) It is anticipated that all of such officers will be reelected at the
Annual Meeting of the Board of Directors to be held on July 17, 1996.
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 17, 1996, 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 17, 1996, 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
17, 1996, pages 3 through 4, under the caption "Election of Directors".
______________________
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1&2. Financial statements and financial statement schedules.
The financial statements and schedules listed in
the accompanying indices to financial statements
and financial statement schedules are filed as part
of this Annual Report Form 10-K.
3. Exhibits.
The exhibits listed on the accompanying index to
exhibits are filed as part of this Annual Report
Form 10-K.
(b) Reports on Form 8-K
No Form 8-K was filed during the fourth quarter
of fiscal 1996.
Trinity Industries, Inc.
Financial Statements and Financial Statement Schedules
for Inclusion in Annual Report Form 10-K
Year Ended March 31, 1996
Trinity Industries, Inc.
Index to Financial Statements
and Financial Statement Schedules
(Item 14 (a))
REFERENCE
1996 Annual
Form Report to
10-K Stockholders
(Page) (Page)
Consolidated balance sheet at
March 31, 1996 and 1995 . . . . . . . . . . - 19
For each of the three years in the
period ended March 31, 1996:
Consolidated income statement . . . . . . - 18
Consolidated statement of cash flows. . . - 20
Consolidated statement of
stockholders' equity. . . . . . . . . . - 21
Notes to consolidated financial
statements . . . . . . . . . . . . . . . - 21
Supplemental information:
Supplementary unaudited quarterly data . . - 29
Consolidated financial statement schedule
for each of the three years in the
period ended March 31, 1996:
II - Allowance for doubtful accounts . 13 -
Other financial information:
Weighted average interest rate on
short-term borrowings. . . . . . . . 13 -
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.
The consolidated financial statements and supplementary
information listed in the above index which are included in the 1996
Annual Report to Stockholders are hereby incorporated by reference.
SCHEDULE II
Trinity Industries, Inc.
Allowance for Doubtful Accounts
Year Ended March 31, 1996, 1995 and 1994
(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, 1996 $ 0.8 $ 0.8 $0.5 $ 1.1
Year Ended March 31, 1995 $ 1.0 $ 0.3 $0.5 $ 0.8
Year Ended March 31, 1994 $ 1.2 $ 0.3 $0.5 $ 1.0
___________________________
Trinity Industries, Inc.
Other Financial Information
Short-Term Borrowings
The weighted average interest rate on short-term borrowings
outstanding as of March 31, 1996, 1995, and 1994 is 6.04%,
5.28%, and 3.57%, respectively.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Annual Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Trinity Industries, Inc. By /s/ F. Dean Phelps, Jr.
Registrant F. Dean Phelps, Jr.
Vice President
June 26, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons of the Registrant
and in the capacities and on the dates indicated:
Directors: Principal Executive Officer:
/s/ David W. Biegler /s/ W. Ray Wallace
David W. Biegler W. Ray Wallace
Director President and Chairman
June 26, 1996 June 26, 1996
/s/ Barry J. Galt
Barry J. Galt Principal Financial Officer:
Director /s/ John T. Sanford
June 26, 1996 John T. Sanford
Senior Vice President
/s/ Clifford J. Grum June 26, 1996
Clifford J. Grum
Director
June 26, 1996 Principal Accounting Officer:
/s/ F. Dean Phelps, Jr.
/s/ Dean P. Guerin F. Dean Phelps, Jr.
Dean P. Guerin Vice President
Director June 26, 1996
June 26, 1996
/s/ Jess T. Hay
Jess T. Hay
Director
June 26, 1996
/s/ Edmund M. Hoffman
Edmund M. Hoffman
Director
June 26, 1996
/s/ Ray J. Pulley
Ray J. Pulley
Director
June 26, 1996
/s/ Timothy R. Wallace
Timothy R. Wallace
Director
June 26, 1996
Trinity Industries, Inc.
Index to Exhibits
(Item 14(a))
NO. DESCRIPTION PAGE
(3.1) Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.A to
Registration Statement No. 33-10937 filed
April 8, 1987). *
(3.2) By-Laws of Registrant (incorporated by
reference to Exhibit 3.2 to Form 10-K
filed June 16, 1992). *
(4.1) Specimen Common Stock Certificate of Registrant
(incorporated by reference to Exhibit 3B to
Registration Statement No. 33-10937 filed
April 8, 1987). *
(10.1) Fixed Charges Coverage Agreement dated as of
January 15, 1980, between Registrant and
Trinity Industries Leasing Company (incorporated by
reference to Exhibit 10.1 to Registration Statement
No. 2-70378 filed January 29, 1981). *
(10.2) Tax Allocation Agreement dated as of
January 22, 1980 between Registrant and its
subsidiaries (including Trinity Industries
Leasing Company) (incorporated by reference to
Exhibit 10.2 to Registration Statement
No. 2-70378 filed January 29, 1981). *
(10.3) Form of Executive Severance Agreement entered
into between the Registrant and all executive
officers of the Registrant (other than Mr. French)
(incorporated by reference to Exhibit 10.3 to Form
10-K filed June 19, 1989). *
(10.4) Trinity Industries, Inc., Stock Option Plan With
Stock Appreciation Rights (incorporated by
reference to Registration Statement No. 2-64813 filed
July 5, 1979, as amended by Post-Effective Amendment
No. 1 dated July 1, 1980, Post-Effective Amendment
No.2 dated August 31, 1984, and Post-Effective
Amendment No. 3 dated July 13, 1990). *
(10.5) Directors' Retirement Plan adopted December 11, 1986
( incorporated by reference to Exhibit 10.6 to Form
10-K filed June 14, 1990). *
(10.6) 1989 Stock Option Plan with Stock Appreciation Rights
(incorporated by reference to Registration Statement
No. 33-35514 filed June 20, 1990) *
(10.7) Supplemental Retirement Benefit Plan for
W. Ray Wallace, effective July 18, 1990
(incorporated by reference to Exhibit
10.8 to Form 10-K filed June 13, 1991). *
(10.8) 1993 Stock Option and Incentive Plan
(incorporated by reference to Registration
Statement No. 33-73026 filed December 15, 1993) *
Trinity Industries, Inc.
Index to Exhibits -- (Continued)
(Item 14(a))
NO. DESCRIPTION PAGE
(10.9) Pension Plan A for Salaried Employees of
Trinity Industries, Inc. and Certain Affiliates
dated August 20, 1985, as amended by Amendment
No. 1 dated May 27, 1986, Amendment No. 2 dated
December 30, 1986, Amendment No. 3 dated
December 12, 1986, Amendment No. 4 dated
March 31, 1987, Amendment No. 5 dated
March 31, 1987, Amendment No. 6 dated
December 4, 1987, Amendment No. 7 dated
July 26, 1988, Amendment No. 8 dated
July 28, 1988, Amendment No. 9 dated
March 15, 1989, Amendment No. 10 dated
March 31, 1989, and Amendment No. 11 dated
July 14, 1989 (incorporated by reference to
Exhibit 10.9 to Form 10-K filed June 13, 1991). *
(10.10) Supplemental Profit Sharing Plan for Employees
of Trinity Industries Inc. and Certain Affiliates
dated June 30, 1990, as amended by Amendment No. 1
dated June 13, 1991. Supplemental Profit Sharing
Trust for Employees of Trinity Industries, Inc. and
Certain Affiliates dated June 30, 1990, as amended
by Amendment No. 1 dated June 13, 1991 (incorporated
by reference to Exhibit 10.10 to Form 10-K filed
June 13, 1991). *
(13) Annual Report to Stockholders. *
(21) Listing of subsidiaries of the Registrant. 17
(23) Consent of Independent Auditors. 12
(27) Financial Data Schedules.
(99.1) Annual Report on Form 11-K for employee stock purchase, savings and
similar plans filed pursuant to Rule 15d-21.
EXHIBIT 13
Corporate Profile
Trinity Industries, Inc. is a leading manufacturer of a variety
of 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, has
seventy-five facilities containing more than thirteen million
square feet of manufacturing space in eighteen states and in
Mexico. The Company also operates more than eighty ready-mix
concrete and aggregate locations in Texas and Louisiana.
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 2,500 at
March 31, 1996. The Company's 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
1996 1995 1994
Revenues. . . . . . . . . . . . . . . . $2,496.0 2,314.9 1,784.9
Income before cumulative effect of change
in accounting for income taxes . . . . $ 113.8 89.1 68.3
Cumulative effect of change in
accounting for income taxes. . . . . . - - 7.9
Net income. . . . . . . . . . . . . . . $ 113.8 89.1 76.2
Income per common and common equivalent
share before cumulative effect of
change in accounting for income taxes. $ 2.72 2.20 1.69
Cumulative effect of change in
accounting for income taxes. . . . . . - - 0.20
Net income per common and common
equivalent share . . . . . . . . . . . $ 2.72 2.20 1.89
Cash dividends per share. . . . . . . . $ 0.68 0.68 0.64
Stockholders' equity. . . . . . . . . . $ 746.0 641.2 570.5
Total assets:
Excluding Leasing Subsidiary. . . . . $1,159.6 1,121.8 959.5
Leasing Subsidiary. . . . . . . . . . $ 296.2 298.2 347.3
$1,455.8 1,420.0 1,306.8
Capital expenditures (net of business acquisitions):
Excluding Leasing Subsidiary. . . . . $ 46.9 64.7 45.2
Leasing Subsidiary. . . . . . . . . . $ 86.1 28.7 37.6
$ 133.0 93.4 82.8
PAGE 3
To Our Stockholders
By any measure, fiscal 1996 was a very significant year.
We are proud to have, once again, achieved record revenues and net income.
Trinity is positioned to take advantage of opportunities as they arise,
and these opportunities continue to grow. Our primary challenge over the
past year has been to find and train qualified employees to accommodate
our growth. Additional qualified personnel will continue to be a
significant challenge in the year ahead.
In the twelve month period ended March 31, 1996, net income
increased 28% over the prior fiscal year, to a record $113.8 million,
or $2.72 per share. Revenues increased 8% over fiscal 1995 to a record
$2.5 billion.
Overall, we are seeing our business segments continue to marshal their
forces and focus their efforts on some very significant opportunities.
It is gratifying to see these segments in which we have invested a
considerable amount of time, energy, and resources begin to assume the
market positions that we had envisioned several years ago.
Our Marine Products segment has taken a major leap forward over the
past year. Replacement cycles are creating more demand for various types
of vessels. We are seeing particularly good demand for inland hopper
barges. Our nation's grain storage is at its lowest level in several
decades, creating a need for additional crops and higher yields to meet
the escalating export demands. This translates into increasing volumes
of both grain and fertilizer shipments. Coal shipments account for a
significant percentage of barge use as well. Barge traffic on our
rivers remains very strong, and with frequent use and aging, comes
the need for replacement.
Boats and ships used for oceanographic research, offshore work,
patrol, and recreation are an important part of our Marine Products
segment. We have signed a contract for a large supply vessel, and if
energy demands remain steady and exploration and drilling continue to
move farther and farther offshore, we should see an increased need for
newer and larger offshore supply boats within the next twenty-four months.
The replacement cycle continues to play a vital role in our Railcars
segment and is strongly correlated to the advancing age of the total
railcar fleet. Railcar retirements and scrappings should continue to
create a healthy demand for our products. As our economy continues to
expand, we expect to see a growing volume of rail traffic.
Good opportunities exist as railroads upgrade their equipment,
more private shippers acquire their own railcar fleets, and the
demand for specialized railcars increases. All of this bodes well for
Trinity. We continue to meet market needs by developing new products
and improving our methods for producing railcars and parts.
Our Construction Products segment has experienced good growth
in revenues and income over the past year, fueled primarily in
two areas - highway safety products and ready-mix concrete
and related materials. In addition to producing a quality
guardrail products, Trinity is playing a leading role in safer
highway barrier end treatments. Our impact-absorbing highway
safety barriers are rapidly replacing barriers that do not meet
the new safety standards that will take effect in 1998. Trinity's
ready-mix concrete and aggregates business is enjoying growth in its
governmental, residential, and commercial markets.
PAGE 4
Our Metal Components segment continues to post record financial results.
The intensifying worldwide demand for energy and petrochemical products
points to continuing strong demand for Trinity's fittings,
flanges and heads, and continuing strong financial performance
in this segment. Our Containers segment is profitable and growing,
reflecting the expanding needs of residential, commercial, and
industrial users of liquefied petroleum gas. We expect this
trend to continue. Leasing remains a profitable marketing tool
for Trinity, adding to our flexibility, while improving our ability
to serve the customer.
Overall, our diverse but compatible business segments create
unique opportunities for our Company, enhancing our customer
service and marketing efforts, while often providing the
competitive edge. Our seasoned product managers have learned to
draw upon these integrated resources, using them to Trinity's
advantage in the marketplace.
We are realizing benefits from our acquisition of
Trinity Industries de Mexico (formerly Grupo Tatsa) in the first quarter
of fiscal 1996. Trinity Industries de Mexico, headquartered in Mexico City,
produces a variety of fabricated steel products for use in the United States
and Mexico, while affording Trinity a more competitive position in the
growing South American market. As we become increasingly global in our
operations, we benefit from NAFTA, from the new markets, and from healthy
competition.
As we grow, we continue to place priority on quality products,
excellent service, well-trained employees, and competitive prices.
Our QuEST Total Quality Management program serves us well and has
expanded significantly since its initiation in the late eighties.
In fact, as a result of the innovation and enthusiasm with which
our employees have responded to this program, several major companies
have recognized Trinity for our quality and service excellence.
We use our bilingual, computer-assisted training program to
successfully teach both job skills and safety procedures. This
program, coupled with intensive on-the-job training, helps our
employees master specific tasks and become skilled at their
professions. We also are increasing the use of computers and robotics
in our manufacturing processes.
Today, we find ourselves in a very dynamic environment where
change is the only constant. New products are continually being
created and improved. Global markets are opening and expanding, and
technology is rapidly advancing. Trinity is in an excellent position
to take advantage of the opportunities that change presents.
The past year brought additional talent to our Board of Directors.
Clifford J. Grum, chairman and chief executive officer of
Temple-Inland, Inc., became a Trinity director. His leadership and
expertise will certainly be an asset to Trinity.
In summary, the past year has been good for Trinity,
and we look forward to even better days ahead. We are grateful to
those whose loyalty and dedication have made our success possible -
our employees, customers, suppliers, and stockholders. We will
strive to earn your continued confidence.
W. Ray Wallace
Chairman, President and Chief Executive Officer
PAGE 5
Railcars
Trinity is one of North America's largest manufacturers of
quality tank and freight railcars and related parts. Trinity's
tank cars transport a broad spectrum of products, such as chemicals,
petroleum products and liquid food products. Our full range of
freight cars transport bulk products and commodities, such as coal,
cement and other minerals, grain, plastic resins, lumber, and intermodal
containers and trailers. Our principal customers include railroads, leasing
companies, and private shippers across a sweeping range of North American
industries.
In fiscal 1996, Railcars segment operating profit increased 34% over
fiscal 1995, to a record $118.8 million. Revenues increased 8% over
fiscal 1995, to a record $1.3 billion.
We develop, build, rebuild, and repair railcars, and also provide
parts for our broad mix of customers. Driven by the ongoing need to
replace their aging rolling stock and by the positive economics of
employing larger and lighter-weight railcars, our customers continue
to rely on Trinity to meet their healthy demand for railcars. Based
on our outlook for a stable, slow-growth economy and continuing strong
exports, we anticipate continued vigorous product demand.
We are constantly seeking ways to improve our manufacturing processes,
to make our products even better, and to develop new products that meet
our customers ever-changing needs. We actively engage in constant
dialogue with our customers, jointly exploring the factors that affect
their businesses and future equipment demands. Trinity employs
sophisticated, computer-based training techniques for our railcar
production teams. This training spans all areas of production from
quality training and compliance to job skills development to fabrication
process training and certification. Our engineers use state-of-the-art
computer systems to aid them in developing reliable railcars, using
quality materials, to meet our customers requirements. Trinity's
Total Quality Management program, QuEST, encourages and empowers
all Trinity employees to actively participate in improving product
quality and enhancing efficient, low-cost production. Systemwide,
key manufacturing personnel form cross-functional teams, coming
together to assess and evaluate our manufacturing processes,
address quality goals and customer satisfaction, and develop
effective cost standards--all with an eye toward Trinity's
bottom line results.
PAGE 6
We have earned our reputation by keeping our costs low, putting our
customers first, and knowing our business well. We are optimistic
about the future for our railcar business. By continuing to follow
these guiding principles, we will maintain our position as North America's
leading railcar manufacturer.
PAGE 7
Marine Products
Trinity is one of the largest builders of small to mid-size boats,
ships, and barges. Our vessels are used around the world by a vast
number of governmental, commercial, and individual customers.
Trinity-made vessels ply the seas and waterways delivering cargoes,
transporting passengers, and maintaining peace -- all vital to world
commerce. Trinity is one of North America s foremost makers of hopper
and tank barges. And historically, Trinity is North America's leading
maker of offshore supply boats and crew boats that service the oil and gas
industry. In addition, Trinity builds a variety of tug boats, tow and
push boats, fishing boats, fire and rescue boats, container ships,
excursion boats, and luxury yachts. Governments around the world rely
on Trinity to build their fleets of hydrographic and oceanographic research
ships, ocean surveillance ships, landing craft, and high speed patrol
vessels. Our marine engineering and architectural capabilities enable
us to develop and build optimum vessels to meet our customers
requirements.
In fiscal 1996, Trinity made substantial investments in expanding
our production capacity-investments that should generate increasing
benefits beginning in fiscal 1997. We committed significant capital
to acquiring additional shipyards and to making our existing shipyards more
efficient. We acquired and installed additional production equipment and
expanded our ship repair and conversion facilities. We embarked on an
aggressive program to hire and train skilled, quality workers. All of
this was done to insure that Trinity continues to meet the future needs of
our customers throughout the world.
In fiscal 1996, Marine Products operating profit was $22.0 million
on revenues of $421.4 million. This compares to operating profit of
$30.3 million on revenues of $369.7 million in fiscal 1995. Results for
fiscal 1996 were affected by the acquisitions and expansions discussed above.
Results for fiscal 1995 reflected profits totaling approximately
$6.7 million from the sale of Trinity's inventory of hopper barges
previously held for lease.
PAGE 8
We are now experiencing a replacement cycle that is pushing ever-higher
the demand for barges of many types. Aging vessels and expanding volumes
of grain and coal exports are continuing to create strong demand for Trinity
s hopper barges. Further, recent environmental legislation requires the
gradual phase-in of double-skin fuel tanker barges as replacements for
the single-hull types. We expect these trends to endure for some time,
producing excellent and growing demand for Trinity's barges.
We also foresee a similar replacement building trend
developing for Trinity's offshore supply boat products.
PAGE 9
Construction Products
Trinity offers a diverse array of construction products,
including highway guardrail and safety barriers, ready-mix
concrete and related materials, custom roll-formed shapes
for railcars, barges, trailers and other uses, structural
components for highway and railroad bridges, and special
products, such as airport equipment and dump bodies for
mining vehicles. Our products are used nationwide by
commercial, industrial, governmental and utility customers.
In fiscal 1996, Construction Products operating profit
increased 22% over fiscal 1995, to a record $43.4 million.
Revenues increased 7% over fiscal 1995, to a record $380.6 million.
Trinity is one of the nation s largest manufacturers of
highway guardrail and safety end treatments. Trinity's guardrail
is used across North America to help protect the lives of the
millions who travel our streets and highways. Our safety
barriers reduce fatalities and increase the safety of these
roadways by efficiently absorbing the energy generated by
high-speed vehicle impacts. Recent legislation, providing
funding for highway construction and maintenance of the
newly-designated National Highway System, points to growth
in construction and increased demand for Trinity's highway
guardrail and safety products.
The other anchor of Trinity's Construction Products segment
is our ready-mix concrete and materials business. Our wholly-owned
subsidiary, Transit Mix Concrete & Materials Company, is
a leading producer of ready-mix concrete in the markets
we serve. We continue to be a key supplier of concrete for the
rapidly growing highway, residential, commercial, industrial, and
municipal construction now taking place in our markets. We
anticipate this strong growth in construction to continue for
some time, providing significant opportunities for Trinity.
PAGE 10
Trinity also mines and supplies a variety of aggregate materials.
Through our wholly-owned subsidiary, Trinity Materials, Inc., we
operate a number of mining sites across Texas and in Louisiana.
We supply our products to a wide range of contractors, to
builders of the highway transportation infrastructure, and to other
Trinity subsidiaries. Because wasted time is wasted money, Trinity
is dedicated to superior service and maintaining state-of-the-art
equipment. This insures timely delivery of products to our customers
when they need them. We foresee excellent growth opportunities for
Trinity's ready-mix concrete and materials business.
PAGE 11
Containers
Trinity manufactures a range of transportation and storage tanks,
custom heavy pressure vessels, and other heavy welded products.
Our products are used extensively in the transportation
and storage of liquefied petroleum gases (LPG) and other
liquid and dry products. Trinity's custom products include
large, fabricated and machined gas turbine weldments, refinery and
chemical reactors, industrial silencers, heat recovery systems,
and seawater evaporators. Trinity's products are manufactured from
a variety of materials, including carbon and stainless steel, alloy,
and aluminum.
In fiscal 1996, Containers operating profit increased 26%
over fiscal 1995, to $12.2 million. Revenues increased to $174.3
million in fiscal 1996, up from $169.7 million in fiscal 1995.
Trinity markets transportation and storage containers directly
to LPG dealers, distributors, and contractors around the world.
A core business for decades, our LPG containers are commonly used
in a variety of residential markets. We also market an assortment
of containers to commercial users and large industrial companies.
Trinity's acquisition of Grupo TATSA, now known as Trinity Industries
de Mexico, bolsters our production capability and flexibility and
provides important inroads into new Latin American markets.
Throughout our history, Trinity's experienced people have given
continuous attention to improving our low-cost production methods.
This focus continues today. We constantly seek new opportunities
to reengineer our manufacturing processes to increase efficiency
and reduce production time, while improving the product quality and
integrity that is the hallmark of Trinity. These business approaches,
combined with our commitment to identify and vigorously penetrate
new markets, both domestic and foreign, provide excellent growth
opportunities for Trinity's Containers segment.
PAGE 12
Metal Components
Trinity is one of the nation's leading producers of weld fittings,
flanges, and container heads. Capitalizing on the acknowledged quality
and dependability of our Hackney and Flo-Bend brands, Trinity
manufactures and markets a wide range of weld fittings, including elbows,
return bends, concentric and eccentric reducers, and full and reducing
outlet tees. Trinity's broad offering of forged flanges include standard
weldnecks, slip-ons, and blind flanges as well as specialty flanges.
Our fittings and flanges are manufactured from carbon and stainless steel,
chrome-moly, and other grades of material. Trinity also produces container
heads from a wide variety of metals, such as carbon and stainless steel,
nickel-base alloys, and titanium. We employ both hot and cold forming
processes for our metal component products to help insure low-cost
production, maximum efficiency, and product quality.
In fiscal 1996, the Metal Components segment's operating profit
increased 56% over fiscal 1995, to a record $23.2 million. Revenues
increased 24% over fiscal 1995, to a record $131.1 million.
Trinity's fittings, flanges, and container heads are used extensively
in the energy, chemical, and beverage industries, as well as in other
processing industries requiring piping and storage systems. We market
our growing range of fitting and flange products to distributors that
service these industries, and we market our container heads directly
to vessel manufacturers.
During fiscal 1996, we expanded our production capacity by adding
upgraded manufacturing equipment. As a result, Trinity, now more than
ever, is positioned to provide superior products and services to our
customers. Trinity's Fitting and Flange Group is ISO 9002 (International
Organization for Standardization) registered, recognizing our ability
to meet international standards for consistency in product quality,
manufacturing processes, and controls. Our continuing investment in
operations demonstrates Trinity's commitment to our business and to
our customers.
As the world moves toward a more globalized economy, Trinity will
pursue ever-expanding international marketing opportunities for the
Metal Components segment. In particular, we foresee dramatic growth in
worldwide energy consumption, leading to increased demand for
petrochemical transport and storage. Trinity is ideally
positioned to satisfy the storage and delivery demands created by a
changing world.
PAGE 13
Leasing
Trinity's wholly-owned leasing subsidiary,
Trinity Industries Leasing Company (TILC), offers our customers a
viable alternative to railcar purchasing. We use TILC as a marketing tool
to complement our railcar sales activities, thus broadening our
penetration of the railcar market.
In fiscal 1996, the Leasing segment's operating profit was
$23.4 million, on revenues of $135.4 million. This compares to
operating profit of $23.6 million, on revenues of $156.9 million
in fiscal 1995.
Because of the consolidation of TILC 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 $11.2 million, is eliminated from Trinity's consolidated
financial statements.
PAGE 14
Financial Summary
(in millions except for percent and per share data)
Year Ended March 31
1996 1995 1994 1993 1992
Revenues . . . . . . . . . . . . . . . $2,496.0 2,314.9 1,784.9 1,540.0 1,273.3
Operating profit . . . . . . . . . . . $ 201.2 157.5 116.6 74.6 43.4
Interest expense, net
(excluding Leasing Subsidiary). . . . $ 14.8 11.4 4.0 3.3 6.4
Income before income taxes and
cumulative effect of change in
accounting for income taxes . . . . . $ 186.3 147.5 114.2 72.1 39.7
Provision for income taxes . . . . . . $ 72.5 58.4 45.9 27.1 15.4
Effective tax rate . . . . . . . . . . % 38.9 39.6 40.2 37.6 38.8
Income before cumulative effect of
change in accounting
for income taxes. . . . . . . . . . . $ 113.8 89.1 68.3 45.0 24.3
Cumulative effect as of April 1, 1993
of change in accounting
for income taxes. . . . . . . . . . . $ - - 7.9 - -
Net income . . . . . . . . . . . . . . $ 113.8 89.1 76.2 45.0 24.3
Total assets . . . . . . . . . . . . . $1,455.8 1,420.0 1,306.8 1,089.1 1,021.2
Long-term debt . . . . . . . . . . . . $ 206.4 242.9 277.9 293.2 357.3
Stockholders' equity . . . . . . . . . $ 746.0 641.2 570.5 507.3 379.0
Stock data:
Weighted average number of
common and common equivalent
shares outstanding. . . . . . . . . 41.9 40.5 40.3 35.4 34.2
Income per common and common
equivalent share before
cumulative effect of change
in accounting for income taxes. . . $ 2.72 2.20 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 . . . . . . $ 2.72 2.20 1.89 1.27 0.71
Dividends per share . . . . . . $ 0.68 0.68 0.64 0.53 0.53
Stock closing price range:
First quarter . . . . . . . . . . . $ 40 1/4- 39 3/4- 35 1/2- 22 1/2- 19 3/8-
32 33 7/8 29 5/8 18 16 1/8
Second quarter. . . . . . . . . . . $ 36 1/8- 35 1/4- 38 1/4- 22- 19 1/8-
30 7/8 31 32 1/2 19 7/8 15 7/8
Third quarter . . . . . . . . . . . $ 32 1/2- 35 3/8- 43 7/8- 26 1/2- 20 7/8-
28 1/4 30 1/2 34 3/4 20 5/8 16 1/2
Fourth quarter. . . . . . . . . . . $ 35 3/4- 37 3/8- 47 3/8- 29 7/8- 21 1/8-
31 1/8 31 3/4 37 1/2 25 1/8 17 1/8
Book value per share . . . . . . . . . $ 17.93 15.95 14.37 12.95 11.13
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, share and per share information,
except for common stock outstanding in the Consolidated Statement of
Stockholders' Equity, has been restated to give effect to the stock split.
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.
PAGE 15
Management Discussion of Operations and Financial Condition
Operations
Record revenues of $2.5 billion were recorded for the
fiscal year ended March 31, 1996, an increase of $181.1
million compared to fiscal 1995. The Company experienced increased
demand in the Railcars, Marine Products, Construction Products, and
Metal Components segments. Revenues recorded by the Containers
segment remained comparable to the previous fiscal year. Leasing
segment revenues declined in comparison to the previous fiscal
year's results. The Railcars and Marine Products segments continue
to benefit from the ongoing replacement cycle. The Construction
Products segment continues to be favorably affected by additional
business acquisitions of certain ready-mix concrete operations
(see Business Acquisitions in Notes to Consolidated Financial
Statements) and by continued federal and state government focus on
improving the transportation infrastructure. The Metal Components
segment has benefitted from improved market conditions. Total
operating profit increased from $157.5 million in fiscal 1995
to $201.2 million in fiscal 1996 due primarily to higher operating
profit recorded in the Railcars, Construction Products, Containers,
and Metal Components segments, partially offset by slightly lower
operating profit recorded in the Marine Products segments.
Continuing a trend started in fiscal 1993, revenues and operating
profit in the Railcars segment increased in fiscal 1996 compared to the
previous fiscal year as a result of continued replacement demand and
expansion of railroad traffic. During fiscal 1996, as expected, orders
returned to levels more indicative of long-term demand and it is
anticipated that this demand will continue in the next fiscal year.
Trinity continues to be active in the railcar market with a variety
of car types including coal, grain, plastic pellet, cement, and a
variety of tank railcars.
Revenues increased in the Marine Products segment as the
replacement cycle for barges and marine vessels continues to
intensify. Operating profit, compared to the previous fiscal year,
declined as the Marine segment hired personnel and geared up production
facilities that had been closed in the past. Prior year results
presented profits of $6.7 million from the sale of hopper barges
previously held for lease. Strategic acquisitions (see Business
Acquisitions in Notes to Consolidated Financial Statements),
continued improvements made to existing capacity, and
increased interest by domestic and foreign buyers in offshore supply
boats and small container ships has positioned this segment for
future growth.
The Construction Products segment has expanded its highway
guardrail and road barrier products and expanded its ready-mix
concrete and aggregate business. Improvements in operating
results are reflective of increased efficiencies gained from
integrating operations from past acquisitions and recent funding
increases for improvements to the nation's highway systems.
The strong outlook for commercial, residential, and municipal
construction in these markets is expected to continue.
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. The Containers segment has benefitted primarily
from the general improvement in the economy. Leasing segment's
revenues declined in fiscal 1996 due to the sale of selected equipment.
Record revenues of $2.3 billion were recorded for the fiscal
year ended March 31, 1995, an increase of $530.0 million compared
to fiscal 1994. The Company experienced increases in demand in all
of its six major business segments, with the Railcars segment
contributing the most significant increase. Railcars, the
Company's largest segment, enjoyed the benefit of a better
market for its railcars and railcar related products.
The Construction Products segment's revenues continue to be
favorably affected by additional business acquisitions of certain
ready-mix concrete operations. (See Business Acquisitions in the
Notes to Consolidated Financial Statements.) The Marine Products,
Containers and Metal Components segments experienced expanding markets.
Total operating profit increased from $116.6 million in fiscal 1994 to
$157.5 million in fiscal 1995 due primarily to higher operating profit
recorded in the Railcars, Marine Products, Metal Components, and
Leasing segments, partially offset by slightly lower operating
profit recorded in the Containers segment. A valuation reserve was
established for approximately $8.0 million for certain real
property which was determined to be in excess of that required
for future business operations.
Expanding on a trend which began in fiscal 1993, production and
deliveries in the Railcars segment again increased in fiscal 1995.
Operating profit as a percentage of revenues increased in fiscal 1995
compared to the previous fiscal year as greater efficiencies were
achieved as a result of ongoing participation in quality assurance
programs established in previous years. Trinity continues to be
active in the railcar market with a variety of car types including
coal, grain, plastic pellet, cement, intermodal, and a variety of
tank railcars. Increased revenues and operating profit in fiscal
1995 are primarily the result of replacement demand and fundamental
economic expansion of railroad traffic.
In the Marine Products segment, demand for the segment's
products, marine vessels and barges, continued to increase.
The inland river hopper barge product line is generally benefitted
by large grain crops.
PAGE 16
The Construction Products segment expanded its highway
guardrail and road barrier products and expanded the ready-mix
concrete and aggregate business. Acquisitions completed
in fiscal 1995 were made at various times during the year.
The inclusion of a full year of these acquisitions in future
years is expected to show favorable results in year-to-year
comparisons.
Continuing improvement in the chemical and petroleum
industries related to the Clean Air Act and new housing starts
led to improvement in the Containers segment, particularly the market
for LPG tanks. Competitive markets for the Company's large pressure
vessels partially offset segment operating profit. Industry demand
for products in the Metal Components segment rose in the proir fiscal
year. General improvement in the economy generated some expansion in the
industries served by this segment. Leasing segment's operating profit
was higher in fiscal 1995 due primarily to additions of new freight
and tank railcars to the fleet, and the sale of selected car types,
coupled with the sale of its inventory of river hopper barges
previously held for lease.
Selling, engineering and administrative expenses increased
to $120.3 million in fiscal 1996 from $104.5 million in fiscal
1995 due primarily to increased personnel expenses from fiscal 1996
acquisitions and increased personnel expenses from additional hires
in the Railcars and Metal Components segments. Selling,
engineering and administrative expenses increased to $104.5
million in fiscal 1995 from $94.2 million in fiscal 1994 due
principally to additional personnel expenses from fiscal 1995
business acquisitions and increased Railcars segment business.
Interest expense of the Leasing Subsidiary decreased by $3.6
million in fiscal 1996 compared to fiscal 1995 and decreased by $2.6
million in fiscal 1995 compared to fiscal 1994 due primarily to the
reduction of equipment trust series long-term debt through scheduled debt
payments and disposition of certain assets.
Retirement plans expense increased to $13.4 million in
fiscal 1996 from $12.1 million in fiscal 1995 due primarily to
increases in personnel from fiscal 1996 business acquisitions.
Retirement plans expense increased to $12.1 million in fiscal 1995
from $9.2 million in fiscal 1994. The increase is due primarily to
increases in personnel in fiscal 1995 business acquisitions.
Net interest expense of $14.8 million in fiscal 1996 increased
as compared to $11.4 million in fiscal 1995 due primarily to the usage
of short-term debt to finance business acquisitions and capital
expenditures. Net interest expense of $11.4 million in fiscal 1995
increased as compared to $4.0 million in fiscal 1994 primarily due to
the increase in the usage of short-term debt for capital expenditures
and to finance business acquisitions.
The provision for income taxes in fiscal 1996, expressed as a
percent of income before income taxes is a 38.9 percent rate as
compared to a 39.6 percent rate in fiscal 1995 and a 40.2
percent rate in fiscal 1994.
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 Notes to the Consolidated
Financial Statements.)
Liquidity and Financial Resources
During fiscal 1996, 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 1996 were $46.9 million.
Capital expenditures projected for fiscal 1997 are approximately
$40.0 million. Payments for acquisitions in fiscal 1996, net of
cash acquired, totalled $28.6 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
$952.4 million (of which Leasing Subsidiary's long-term debt is
$168.8 million) were 21.7 percent (of which Leasing Subsidiary's
long-term debt is 17.7 percent of total capital) and 78.3 percent,
respectively.
Inflation
Changes in price levels did not significantly affect the
Company's operations in fiscal 1996, 1995 or 1994.
PAGE 17
Consolidated Income Statement
(in millions except per share data)
Year Ended March 31
1996 1995 1994
Revenues. . . . . . . . . . . . . . . . . . . . $2,496.0 $2,314.9 $1,784.9
Operating costs:
Cost of revenues . . . . . . . . . . . . . . . 2,143.6 2,019.7 1,541.2
Selling, engineering and administrative
expenses . . . . . . . . . . . . . . . . . . 120.3 104.5 94.2
Interest expense of Leasing Subsidiary . . . . 17.5 21.1 23.7
Retirement plans expense . . . . . . . . . . . 13.4 12.1 9.2
2,294.8 2,157.4 1,668.3
Operating profit. . . . . . . . . . . . . . . . 201.2 157.5 116.6
Other (income) expenses:
Interest income. . . . . . . . . . . . . . . . (1.8) (0.8) (1.6)
Interest expense - excluding Leasing
Subsidiary . . . . . . . . . . . . . . . . . 16.6 12.2 5.6
Other, net . . . . . . . . . . . . . . . . . . 0.1 (1.4) (1.6)
14.9 10.0 2.4
Income before income taxes and cumulative effect
of change in accounting for income taxes . . . 186.3 147.5 114.2
Provision (benefit) for income taxes:
Current. . . . . . . . . . . . . . . . . . . . 92.7 87.6 45.1
Deferred . . . . . . . . . . . . . . . . . . . (20.2) (29.2) (1.3)
Effect of statutory rate increase. . . . . . - - 2.1
72.5 58.4 45.9
Income before cumulative effect of change in
accounting for income taxes. . . . . . . . . . 113.8 89.1 68.3
Cumulative effect as of April 1, 1993 of change
in accounting for income taxes . . . . . . . . - - 7.9
Net income. . . . . . . . . . . . . . . . . . . $ 113.8 $ 89.1 $ 76.2
Income per common and common equivalent share
before cumulative effect of change in
accounting for income taxes. . . . . . . . . . $ 2.72 $ 2.20 $ 1.69
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . - - 0.20
Net income per common and common equivalent
share. . . . . . . . . . . . . . . . . . . . . $ 2.72 $ 2.20 $ 1.89
Weighted average number of common and common
equivalent shares outstanding . . . . . . . . 41.9 40.5 40.3
See accompanying notes to consolidated financial statements.
PAGE 18
Consolidated Balance Sheet
March 31
(in millions except per share data) 1996 1995
Assets
Cash and cash equivalents. . . . . . . . . . . . . . $ 15.4 $ 15.3
Receivables. . . . . . . . . . . . . . . . . . . . . 293.5 270.3
Inventories. . . . . . . . . . . . . . . . . . . . . 403.7 395.0
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . . . . . . 745.3 701.4
Leasing Subsidiary. . . . . . . . . . . . . . . . . 353.7 387.3
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . . . (336.5) (306.2)
Leasing Subsidiary. . . . . . . . . . . . . . . . . (70.2) (95.4)
Other assets . . . . . . . . . . . . . . . . . . . . 50.9 52.3
$1,455.8 $1,420.0
Liabilities and Stockholders' Equity
Short-term debt. . . . . . . . . . . . . . . . . . . $ 216.0 $ 220.0
Accounts payable and accrued liabilities . . . . . . 222.9 245.5
Billings in excess of cost and related earnings. . . 19.2 12.0
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . . . . . . 37.6 37.7
Leasing Subsidiary. . . . . . . . . . . . . . . . . 168.8 205.2
Deferred income taxes. . . . . . . . . . . . . . . . 30.2 44.9
Other liabilities. . . . . . . . . . . . . . . . . . 15.1 13.5
709.8 778.8
Stockholders' equity: (shares in millions)
Common stock - par value $1 per share;
authorized - 100.0 shares; shares issued and
outstanding in 1996 - 41.6; in 1995 - 40.2 . . . . 41.6 40.2
Capital in excess of par value. . . . . . . . . . . 239.6 221.7
Retained earnings . . . . . . . . . . . . . . . . . 464.8 379.3
746.0 641.2
$1,455.8 $1,420.0
See accompanying notes to consolidated financial statements.
PAGE 19
Consolidated Statement of Cash Flows
(in millions)
Year Ended March 31
1996 1995 1994
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . $113.8 $ 89.1 $ 76.2
Adjustments to reconcile net income to net cash
provided (required) by operating activities:
Depreciation:
Excluding Leasing Subsidiary . . . . . . . . . . 57.8 38.4 36.2
Leasing Subsidiary . . . . . . . . . . . . . . . 18.1 20.2 20.6
Deferred benefit for income taxes . . . . . . . . (20.2) (29.2) (1.3)
(Gain) loss on sale of property, plant
and equipment. . . . . . . . . . . . . . . . . . 3.1 (0.7) (0.2)
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . . - - (7.9)
Effect of statutory tax rate increase . . . . . . - - 2.1
Other . . . . . . . . . . . . . . . . . . . . . . (6.7) (6.6) 0.1
Change in assets and liabilities:
(Increase) decrease in receivables . . . . . . . (16.0) 4.6 (58.1)
(Increase) in inventories. . . . . . . . . . . . - (56.1) (110.9)
(Increase) decrease in other assets. . . . . . . 7.8 (11.3) 0.4
Increase (decrease) in accounts payable and
accrued liabilities . . . . . . . . . . . . . . . (39.9) 71.4 14.0
Increase (decrease) in billings in excess
of cost and related earnings. . . . . . . . . . . 7.2 (0.6) (19.4)
Increase (decrease) in other liabilities . . . . 0.9 (4.8) 2.6
Total adjustments. . . . . . . . . . . . . . . 12.1 25.3 (121.8)
Net cash provided (required) by
operating activities . . . . . . . . . . . . . . 125.9 114.4 (45.6)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 100.2 83.3 29.3
Capital expenditures:
Excluding Leasing Subsidiary . . . . . . . . . . . (46.9) (64.7) (45.2)
Leasing Subsidiary . . . . . . . . . . . . . . . . (86.1) (28.7) (37.6)
Payment for purchase of acquisitions,
net of cash acquired . . . . . . . . . . . . . . . (28.6) (63.7) (36.2)
Cash of acquired subsidiary . . . . . . . . . . . . 1.2 2.4 0.5
Net cash required by investing activities . . . . (60.2) (71.4) (89.2)
Cash flows from financing activities:
Issuance of common stock. . . . . . . . . . . . . . 2.9 0.9 8.9
Net borrowings (repayments) under short-term debt . (4.0) 28.0 177.0
Proceeds from issuance of long-term debt. . . . . . 7.0 - 20.0
Payments to retire long-term debt . . . . . . . . . (43.6) (38.1) (45.9)
Dividends paid. . . . . . . . . . . . . . . . . . . (27.9) (27.2) (24.0)
Net cash provided (required) by
financing activities . . . . . . . . . . . . . . (65.6) (36.4) 136.0
PAGE 20
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . . . . . 0.1 6.6 1.2
Cash and cash equivalents at beginning of period . . 15.3 8.7 7.5
Cash and cash equivalents at end of period . . . . . $ 15.4 $ 15.3 $ 8.7
Excluding Leasing Subsidiary, interest paid in fiscal 1996, 1995, and 1994 was
$17.9, $11.4, and $5.0, respectively. Leasing Subsidiary's interest paid in
fiscal 1996, 1995, and 1994 was $18.3, $21.6, and $23.8, 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, 1993 . . . . . 26,076,549 $26.1 $214.5 $266.7 $507.3
Three-for-two stock split . . . . 13,158,164 13.2 (13.2) - -
Other . . . . . . . . . . . . . . 476,985 0.4 12.1 - 12.5
Net income. . . . . . . . . . . . - - - 76.2 76.2
Cash dividends ($0.64 per share). - - - (25.5) (25.5)
Balance at March 31, 1994 . . . . . 39,711,698 39.7 213.4 317.4 570.5
Other . . . . . . . . . . . . . . 508,996 0.5 8.3 - 8.8
Net income. . . . . . . . . . . . - - - 89.1 89.1
Cash dividends ($0.68 per share). - - - (27.2) (27.2)
Balance at March 31, 1995 . . . . . 40,220,694 40.2 221.7 379.3 641.2
Other . . . . . . . . . . . . . . 1,375,343 1.4 17.9 - 19.3
Net income. . . . . . . . . . . . - - - 113.8 113.8
Cash dividends ($0.68 per share). - - - (28.3) (28.3)
Balance at March 31, 1996 . . . . . 41,596,037 $41.6 $239.6 $464.8 $746.0
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 Standards No. 94,
"Consolidation of All Majority-Owned Subsidiaries," which requires the
consolidation of all majority-owned subsidiaries, unless control is
temporary or does not reside with the majority owner. The Company's
financial statements include the consolidation of the accounts of Trinity
Industries Leasing Company ("TILC"). TILC is sometimes referred to as the
"Leasing Company" or "Leasing Subsidiary".
For purposes of the Consolidated Statement of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents. Financial instruments which
potentially subject the Company to concentrations of credit risk are
primarily cash investments and receivables. The Company places its cash
investments in investment grade, short-term debt instruments and limits the
amount of credit exposure to any one commercial issuer. Concentrations of
credit risk with respect to receivables are limited due to the large number
of customers in the Company's customer base, and their dispersion across
different industries and geographic areas. The Company maintains an
allowance for losses based upon the expected collectibility of all
receivables.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
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 is based on the
weighted average shares outstanding plus the assumed exercise of dilutive
stock options (less the number of treasury shares assumed to be purchased
from the proceeds using the average market price of Trinity's common
stock).
In March 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of," was issued. Adoption is required for the
Company beginning in fiscal 1997. The Company does not believe that the
adoption of this Statement will have a significant impact on Trinity.
PAGE 21
In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," was issued. The disclosure
requirements of this Statement are effective for the Company's financial
statements beginning in fiscal 1997. The Company intends to elect the
option allowing it to continue to apply the accounting provisions of APB
Opinion 25, "Accounting for Stock Issued to Employees." With the Company's
plan of adoption, the impact will be limited to additional footnote
disclosure.
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 products
consisting primarily of (1) railcars, principally tank cars and
freight cars ("Railcars"); (2) boats and barges for ocean and
inland waterway service ("Marine Products"); (3) construction
products such as highway guardrail, beams, girders, and columns
used in construction of highway and railway bridges, 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. Intersegmental sales are shown at market prices.
Corporate operating profit elimination consists principally of the
administrative overhead of the Company.
Corporate assets consist primarily of cash and cash equivalents,
other assets, notes receivable, land held for investment, and certain
property, plant and equipment.
The Railcars and Leasing segments include revenues from one
customer which accounted for 13.4 percent and 12.5 percent of
consolidated revenues in fiscal 1996 and 1995, respectively.
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.
Eliminations
Construc- Metal & Cor- Consol-
Segments of Business Rail- Marine tion Con- Com- porate idated
(in millions) cars Products Products tainers ponents Leasing Items Total
Year ended March 31, 1996
Total revenues:
Trade. . . . . . . . . . . . . $1,252.7 421.4 380.6 174.3 131.1 135.4 0.5 2,496.0
Intersegment . . . . . . . . . 86.9 - - - 6.5 - (93.4) -
Total . . . . . . . . . . . . $1,339.6 421.4 380.6 174.3 137.6 135.4 (92.9) 2,496.0
Operating profit (loss). . . . . $ 118.8 22.0 43.4 12.2 23.2 23.4 (41.8) 201.2
Identifiable assets . . . . . . $ 437.5 243.9 218.4 89.4 62.2 288.3 116.1 1,455.8
Depreciation . . . . . . . . . . $ 8.7 13.6 19.3 4.7 4.2 18.1 7.3 75.9
Additions (net) to property,
plant and equipment . . . . . . $ 8.9 1.5 9.2 0.4 3.7 9.7 8.7 42.1
Year ended March 31, 1995
Total revenues:
Trade. . . . . . . . . . . . . $1,157.3 369.7 355.5 169.7 105.5 156.9 0.3 2,314.9
Intersegment . . . . . . . . . 29.4 - - - 3.9 - (33.3) -
Total . . . . . . . . . . . . $1,186.7 369.7 355.5 169.7 109.4 156.9 (33.0) 2,314.9
Operating profit (loss). . . . . $ 88.5 30.3 35.6 9.7 14.9 23.6 (45.1) 157.5
Identifiable assets . . . . . . $ 400.9 247.7 228.7 83.1 53.8 295.4 110.4 1,420.0
Depreciation . . . . . . . . . . $ 5.2 4.9 14.6 3.7 3.5 20.2 6.5 58.6
Additions (net) to property,
lant and equipment. . . . . . . $ 19.0 7.8 12.9 3.8 3.1 (27.2) 11.3 30.7
Year ended March 31, 1994
Total revenues:
Trade. . . . . . . . . . . . . $ 730.6 360.7 333.1 155.6 99.7 104.6 0.6 1,784.9
Intersegment . . . . . . . . . 38.5 - - - 2.8 - (41.3) -
Total . . . . . . . . . . . . $ 769.1 360.7 333.1 155.6 102.5 104.6 (40.7) 1,784.9
Operating profit (loss). . . . . $ 53.2 28.9 35.6 9.8 11.7 15.3 (37.9) 116.6
Identifiable assets . . . . . . $ 350.9 201.4 185.8 81.5 47.0 344.3 95.9 1,306.8
Depreciation . . . . . . . . . . $ 7.9 7.8 10.0 2.0 3.2 20.6 5.3 56.8
Additions (net) to property,
plant and equipment . . . . . . $ 2.4 7.8 12.2 2.4 1.4 14.8 10.8 51.8
PAGE 22
Receivables
(in millions)
March 31
1996 1995
Accounts receivable:
Excluding Leasing Subsidiary. . . . . $270.9 $254.8
Leasing Subsidiary. . . . . . . . . . 4.8 3.5
275.7 258.3
Contract receivables not yet billed. . 18.9 12.8
294.6 271.1
Allowance for doubtful accounts. . . . ( 1.1) ( 0.8)
$293.5 $270.3
Inventories
(in millions)
March 31
1996 1995
Finished goods . . . . . . . . . . . . $ 38.9 $ 35.0
Work in process. . . . . . . . . . . . 36.8 42.0
Cost related to long-term
contracts, net of progress billings
of $4.8 and $3.2 at March 31, 1996
and 1995, respectively. . . . . . . . 109.7 110.6
Raw materials and supplies . . . . . . 218.3 207.4
$403.7 $395.0
Property, Plant and Equipment
(in millions)
March 31
1996 1995
Excluding Leasing Subsidiary:
Land . . . . . . . . . . . . . . . . . . . . . . . . $ 40.4 $ 38.9
Buildings and improvements . . . . . . . . . . . . . 209.1 195.0
Machinery. . . . . . . . . . . . . . . . . . . . . . 475.2 430.6
Construction in progress . . . . . . . . . . . . . . 20.6 36.9
745.3 701.4
Leasing Subsidiary:
Equipment on lease (predominately long-term) . . . . 353.7 387.3
$1,099.0 $1,088.7
Business Acquisitions
The Company made certain business acquisitions during fiscal 1996, 1995
and 1994. All have been accounted for by the purchase method. The
operations of these companies have been included in the consolidated
financial statements from the effective dates of the acquisitions.
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
recorded in the acquisitions.
In fiscal 1995, the businesses and properties acquired include:
(i) 100 percent of the common stock of Concrete Pipe Products Company, Inc.
and Midland Concrete, Incorporated for 149,001 shares and 35,033 shares of
Trinity common stock, respectively, certain assets of Gemini Industries,
Inc., Ratliff Ready-Mix, Inc., and Diamond Ready-Mix for cash, and certain
properties acquired for mineral extraction. These companies and assets are
utilized in the ready-mix concrete and aggregates business; (ii) certain
assets of Port Allen Marine Services, Inc., the Syntechnics Division of The
Alpha Corporation of Tennessee, and New NABRICO Corporation for cash and
100 percent of the common stock of Gulf Coast Fabrication, Inc. for 250,000
shares of Trinity common stock. These businesses produce and repair barges
and manufacture other marine products; (iii) certain assets of Flo-Bend,
Inc. for cash. These assets are utilized in the manufacture of metal
components; and (iv) certain assets of the Ready-Mix Concrete Operations
and Aggregate Operations of LaFarge Corporation for cash. These operations
are utilized in the ready-mix concrete and aggregates business. The
aggregate purchase price of these acquisitions was approximately $86.7
million. There was no goodwill recorded in the acquisitions.
In fiscal 1996, the businesses acquired include: (i) 100 percent of the
capital stock of the holding company which owns Groupo TATSA S. A. de C. V.
in exchange for 1,199,000 shares of Trinity common stock. Grupo
PAGE 23
TATSA, now know as Trinity Industries de Mexico, headquartered in Mexico City,
Mexico,manufactures and distributes a wide variety of fabricated steel products
including containers (primarily for the storage or transportation of
liquefied petroleum products), rail tankcar barrels, and heads which are
used within the Company as well as sold to other manufacturers from its
manufacturing facilities in Mexico City, Monclova, and Huehuetoca, Mexico;
(ii) certain assets of McDonald's Ready-Mix, Brazos Point, Inc., and Dunn &
Gerhart Everready Concrete, Inc. for cash. These assets are utilized in
the ready-mix concrete and aggregate business; (iii) certain assets of
American Marine Corporation, Hall-Buck Marine, Inc., and CBI NA-Con, Inc.
for cash. These assets are utilized in the manufacture and repair of
marine products; and (iv) certain assets of The Casteel Group, Inc. for
cash. Casteel's assets are utilized in the fabrication of construction
products. The aggregate purchase price of these acquisitions was
approximately $62.8 million. There was no goodwill recorded in the
acquisitions. Contribution of these acquisitions to revenues and operating
profit during fiscal 1996 is not material.
Stock Options
The Company's 1993 Stock Option and Incentive Plan (the "Plan") provides
that incentive or non-qualified stock options for a maximum of 1,500,000
shares of common stock may be granted to directors, officers and key
employees. Incentive options may be granted over a period not to exceed
ten years at a price not less than fair market value on the date of grant.
The Plan provides that, to the extent options granted under this Plan or
any prior stock option plan are forfeited, expire or cancelled, they may
again be granted pursuant to the provisions of this Plan. The Plan
provides that if shares already owned by the optionee are surrendered as
full or partial payment of the exercise price of an option, a new option
(the "Reload Option") may be granted equal to the number of shares
surrendered. The exercise price of Reload Options shall be the fair market
value on the effective date of the grant.
Stock Options
Non- Total Price
Incentive Incentive Exercise Range
Shares Shares Value Per Share
Outstanding at March 31, 1993 . 529,015 892,866 $25,639,153 $ 9.16 - $22.50
Granted . . . . . . . . . . . . - 975,000 26,500,028 $26.67 - $30.00
Cancelled . . . . . . . . . . . (2,265) (750) (50,165) $11.33 - $22.50
Exercised . . . . . . . . . . . (153,429) (264,430) (6,784,597) $ 9.16 - $22.50
Outstanding at March 31, 1994 . 373,321 1,602,686 45,304,419 $ 9.16 - $30.00
Granted . . . . . . . . . . . . 6,100 68,887 2,710,797 $31.25 - $39.25
Cancelled . . . . . . . . . . . (4,080) (6,000) (225,290) $11.58 - $26.67
Exercised . . . . . . . . . . . (31,731) (80,539) (2,561,137) $ 9.16 - $26.67
Outstanding at March 31, 1995 . 343,610 1,585,034 45,228,789 $11.58 - $39.25
Granted . . . . . . . . . . . . 79,500 41,273 4,144,660 $31.50 - $38.88
Cancelled . . . . . . . . . . . (10,212) (11,090) (447,929) $11.58 - $32.50
Exercised . . . . . . . . . . . (56,025) (245,629) (6,794,302) $11.58 - $34.50
Outstanding at March 31, 1996 . 356,873 1,369,588 $42,131,218 $16.00 - $39.25
At March 31, 1996, there were 1,146,660 shares (1,246,131 at March 31,
1995) reserved for future options, and 976,099 stock options were
exercisable (843,506 at March 31, 1995).
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.
PAGE 24
Long-term Debt
(in millions)
March 31
1996 1995
Excluding Leasing Subsidiary:
4.95-9.25 percent industrial development revenue bonds
payable in varying amounts through 2005 . . . . . . . . $ 2.0 $ 4.6
6.0-10.0 percent promissory notes, generally payable
annually through 2001 . . . . . . . . . . . . . . . . . 35.6 33.1
37.6 37.7
Leasing Subsidiary:
6.96-15.5 percent equipment trust certificates to
institutional investors generally payable in semi-
annual installments of varying amounts through 2003 . . 158.1 193.6
11.3 percent notes payable monthly through 2003. . . . . 10.7 11.6
168.8 205.2
$206.4 $242.9
The fair value of non-traded, fixed rate outstanding debt, estimated
using discounted cash flow analysis, approximates its carrying
value.
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: 1997 - $2.6; 1998 - $1.9; 1999 - $1.8; 2000 - $2.0; and 2001 - $28.2.
Long-term debt of Leasing Subsidiary:
The trustees of the equipment trusts have been assigned
title to railcars with a cost of $354.4 at March 31, 1996 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, no fees have been paid by
Trinity to TILC for the last three fiscal years. Trinity is also
required to pay to TILC the current tax benefit which results from
the inclusion of TILC in Trinity's federal income tax return. These
amounts are eliminated for consolidated financial presentation of
Trinity. TILC is required to maintain certain financial ratios, as
defined. Principal payments due during the next five years are:
1997 - $24.3; 1998 - $26.3; 1999 - $26.1; 2000 - $23.9; and 2001 - $23.1.
Condensed Combined Financial Information of Consolidated Leasing Subsidiary
March 31
(in millions) 1996 1995
Assets
Total assets (principally railcars). . . . . . . . . . . $442.7 $471.9
Liabilities and Stockholder's Equity
Total liabilities (principally long-term debt). . . . . . $246.3 $296.3
Stockholder's equity (including retained earnings of
$177.1 and $156.4 in 1996 and 1995, respectively) . . . 196.4 175.6
$442.7 $471.9
Year Ended March 31
1996 1995 1994
Income
Revenues . . . . . . . . . . . . . . . . . . . . . $135.4 $156.9 $104.6
Income before income taxes and cumulative effect
of change in accounting for income taxes. . . . . $ 31.9 $ 32.0 $ 20.9
Provision for income taxes . . . . . . . . . . . . 11.2 11.2 9.9
Income before cumulative effect of change in
accounting for income taxes . . . . . . . . . . . 20.7 20.8 11.0
Cumulative effect as of April 1, 1993 of change in
method of accounting for income taxes . . . . . . - - 8.1
Net income . . . . . . . . . . . . . . . . . . . . $ 20.7 $ 20.8 $19.1
Future minimum rental revenues on leases in each fiscal year are approximately
$52.5 in 1997, $46.8 in 1998, $41.3 in 1999, $36.0 in 2000, $28.5 in 2001,
and $108.4 thereafter.
PAGE 25
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, 1996 (in millions) Trinity iary nations Total
Revenues. . . . . . . . . . . . . . . . . $2,447.5 $135.4 $ (86.9) $2,496.0
Operating costs:
Cost of revenues . . . . . . . . . . . . 2,130.4 100.1 (86.9) 2,143.6
Selling, engineering and administrative
expenses. . . . . . . . . . . . . . . . 120.3 - - 120.3
Interest expense of Leasing Subsidiary . - 17.5 - 17.5
Retirement plans expense . . . . . . . . 13.4 - - 13.4
Equity in income of Leasing Subsidiary
before income taxes . . . . . . . . . . (31.9) - 31.9 -
2,232.2 117.6 (55.0) 2,294.8
Operating profit. . . . . . . . . . . . . 215.3 17.8 (31.9) 201.2
Other (income) expenses:
Interest income. . . . . . . . . . . . . (1.6) (0.2) - (1.8)
Interest expense - excluding Leasing
Subsidiaries. . . . . . . . . . . . . . 27.8 (11.2) - 16.6
Other, net . . . . . . . . . . . . . . . 2.8 (2.7) - 0.1
29.0 (14.1) - 14.9
Income before income taxes. . . . . . . . 186.3 31.9 (31.9) 186.3
Provision (benefit) for income taxes:
Current. . . . . . . . . . . . . . . . . 92.7 24.6 (24.6) 92.7
Deferred . . . . . . . . . . . . . . . . (20.2) (13.4) 13.4 (20.2)
72.5 11.2 (11.2) 72.5
Net income . . . . . . . .. . . . . . . . $ 113.8 $ 20.7 $(20.7) $ 113.8
Consolidated Balance Sheet March 31
(in millions except per share data) 1996 1995
Assets
Cash and cash equivalents. . . . . . . . . . . . . . $ 15.4 $ 15.3
Receivables. . . . . . . . . . . . . . . . . . . . . 293.5 270.3
Inventories. . . . . . . . . . . . . . . . . . . . . 403.7 395.0
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . . . . . . 745.3 701.4
Leasing Subsidiary. . . . . . . . . . . . . . . . . 353.7 387.3
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . . . (336.5) (306.2)
Leasing Subsidiary. . . . . . . . . . . . . . . . . (70.2) (95.4)
Other assets . . . . . . . . . . . . . . . . . . . . 50.9 52.3
$1,455.8 $1,420.0
Liabilities and Stockholders' Equity
Short-term debt. . . . . . . . . . . . . . . . . . . $ 216.0 $ 220.0
Accounts payable and accrued liabilities . . . . . . 222.9 245.5
Billings in excess of cost and related earnings. . . 19.2 12.0
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . . . . . . 37.6 37.7
Leasing Subsidiary. . . . . . . . . . . . . . . . . 168.8 205.2
Deferred income taxes. . . . . . . . . . . . . . . . 30.2 44.9
Other liabilities. . . . . . . . . . . . . . . . . . 15.1 13.5
709.8 778.8
Stockholders' equity: (shares in millions)
Common stock - par value $1 per share;
authorized - 100.0 shares; shares issued and
outstanding in 1996 - 41.6; in 1995 - 40.2 . . . . 41.6 40.2
Capital in excess of par value. . . . . . . . . . . 239.6 221.7
Retained earnings . . . . . . . . . . . . . . . . . 464.8 379.3
746.0 641.2
$1,455.8 $1,420.0
See accompanying notes to consolidated financial statements.
PAGE 26
Income Taxes
(in millions except per share data)
Effective April 1, 1993 the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." This Statement requires a change from the deferred to
the liability method of computing income taxes. As permitted by
Statement No. 109, the Company has elected not to restate the
financial statements of any prior period. The cumulative effect
of applying the change in accounting method is a decrease in the
Company's deferred tax liability and a nonrecurring credit of
$7.9 or $0.20 per share.
The provision for federal income taxes is determined on a
consolidated return basis. The Company and the Leasing
Subsidiary file a consolidated federal income tax return. The
significant components of the provision (benefit) for income
taxes follow to the right:
Year Ended March 31
1996 1995 1994
Current
Federal . . . . . . . $83.4 $78.6 $42.5
State . . . . . . . . 9.3 9.0 4.7
92.7 87.6 47.2
Deferred. . . . . . . (20.2) (29.2) (1.3)
Total . . . . . . . . $72.5 $58.4 $45.9
Deferred income tax was provided in the financial statements for differences
between financial and taxable income. The components of deferred liabilities
and assets follow:
Year Ended March 31
1996 1995
Deferred tax liabilities:
Excess of tax depreciation over
financial statement depreciation. . . . . . $ 77.5 $ 84.5
Total deferred tax liabilities . . . . . . . 77.5 84.5
Deferred tax assets:
Profits on long-term contracts recorded
on the percentage of completion
method for financial purposes
and related items . . . . . . . . . . . . . $ 7.8 $ 0.3
Pensions and other benefits. . . . . . . . . 39.1 33.0
Accounts receivable, inventory, and other
asset valuation accounts. . . . . . . . . . 1.7 3.6
Other. . . . . . . . . . . . . . . . . . . . (1.3) 2.7
Total deferred tax assets . . . . . . . . . 47.3 39.6
Net deferred tax liabilities . . . . . . . . $ 30.2 $ 44.9
The provision for income results in effective tax rates different than the
statutory rates. The reconciliation between the effective and statutory
rates follows:
Year Ended March 31
1996 1995 1994
Statutory rate . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0%
State taxes. . . . . . . . . . . . . . . . . . . 3.2 4.0 2.7
Effect of 1% rate increase on deferred taxes . . - - 1.8
Other. . . . . . . . . . . . . . . . . . . . . . 0.7 0.6 0.7
Effective tax rate . . . . . . . . . . . . . . . 38.9% 39.6% 40.2%
In fiscal 1996, 1995 and 1994 income taxes of $118.1, $55.9, and $44.7,
respectively, were paid net of refunds received.
PAGE 27
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 1996, 1995, and 1994
included the following components:
Year Ended March 31
1996 1995 1994
Service cost-benefits earned during the period. $ 8.6 $ 7.6 $ 6.2
Interest cost on projected benefit obligation . 7.8 7.0 6.3
Actual return on assets . . . . . . . . . . . . (18.0) (6.6) (1.5)
Net amortization and deferral . . . . . . . . . 10.8 0.4 (4.4)
Accrual of profit sharing contribution. . . . . 4.2 3.7 2.6
Net periodic pension expense. . . . . . . . . . $ 13.4 $ 12.1 $ 9.2
Assumptions used for valuation of the projected
benefit obligation were: Year Ended March 31
1996 1995 1994
Discount rates. . . . . . . . . . . . . . . . . 7.75% 8.25% 8.25%
Rates of increase in compensation levels. . . . 4.75% 5.25% 5.25%
Expected long-term rate of return on assets . . 9.00% 9.00% 9.00%
Amounts recognized in the Company's Consolidated
Balance Sheet follow: March 31
1996 1995
Actuarial present value of benefit obligation:
Vested benefit obligation . . . . . . . . . . $ 73.4 $ 56.5
Accumulated benefit obligation. . . . . . . . $ 88.1 $ 69.9
Projected benefit obligation. . . . . . . . . . $118.7 $ 88.7
Plan assets at fair value . . . . . . . . . . . 98.5 75.8
Projected benefit obligation
in excess of plan assets . . . . . . . . . . . (20.2) (12.9)
Unrecognized net asset at April 1, 1985 . . . . (1.7) (1.9)
Unrecognized net asset at January 1, 1986 . . . (0.8) (0.9)
Unrecognized net loss at March 31 . . . . . . . 23.9 13.1
Accrued pension expense . . . . . . . . . . . . $ 1.2 $ (2.6)
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
The Company is a defendant in certain litigation involving
alleged damages from a construction subcontract over the
fabrication and erection of structural steel for the construction
of the Marriott Marquis Hotel In Times Square, New York City, New York.
A retrial is scheduled for fall 1996 in the United States District Court
for the Southern District of New York. While the ultimate liability in
this matter is difficult to assess, it is management's belief that the
final outcome is not reasonably likely to have a material adverse affect
on the Company's consolidated financial position.
The Company is involved in various other claims and lawsuits
incidental to its business. In the opinion of management, these
claims and suits in the aggregate will not have a material
adverse affect on the Company's consolidated financial statements.
PAGE 28
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, 1996 and 1995, and the
related consolidated statements of income, cash flows and
stockholders' equity for each of the three years in the period
ended March 31, 1996. 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. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Trinity Industries, Inc. at March 31, 1996
and 1995, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended March
31, 1996, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Dallas, Texas
May 9, 1996
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, 1996:
Revenues . . . . . . . . . . . . . $ 604.7 628.5 602.3 660.5 2,496.0
Operating profit . . . . . . . . . $ 49.3 50.0 49.6 52.4 201.2
Net income . . . . . . . . . . . . $ 27.6 27.8 28.1 30.3 113.8
Net income per common and
common equivalent share . . . . . $ 0.66 0.67 0.67 0.72 2.72
Year ended March 31, 1995:
Revenues . . . . . . . . . . . . . $ 544.3 555.5 576.9 638.2 2,314.9
Operating profit . . . . . . . . . $ 32.4 38.9 40.6 45.6 157.5
Net income . . . . . . . . . . . . $ 18.5 22.2 22.7 25.7 89.1
Net income per common and
common equivalent share . . . . . $ 0.46 0.55 0.56 0.63 2.20
PAGE 29
DIVISION OFFICERS
Railcars
Timothy R. Wallace
Chairman, Railcars
Marvin B. Hughes
President, Railcar Repair
Jeffrey J. Marsh
Executive Vice President
John R. Nussrallah
Executive Vice President
Dan D. Banks
Vice President
Donald C. Bodinger, Sr.
Vice President
Fred M. Groff
Vice President
Dale B. Hill
Vice President
Helmut F. Hvizdalek
Vice President
William C. McDowell
Vice President
W. C. Newby
Vice President
Timothy R. Schitter
Vice President
Douglas H. Schneider
Vice President
Stephen W. Smith
Vice President
William O. Zollicoffer
Vice President
Leasing
Duncan A. Gillies
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, Syro, Inc.
Robert K. Van Noord
President, Fittings Group
Cecil C. Spear, Jr.
Executive Vice President
Rodney A. Boyd
Vice President
Stephen L. Brown
Vice President
Thomas M. Germanson
Vice President
Russell D. McBroom
Vice President
Charles R. Norton
Vice President
Richard A. Pell
Vice President
James B. Sanford
Vice President
Carl E. Stevens
Vice President
Christine S. Stucker
Vice President
Construction Products
Materials & Aggregates
Mark W. Stiles
President
Haywood Walker, III
Executive Vice President
Douglas Almond
Vice President
Richard D. Dalton
Vice President
James Randall Foil
Vice President
G. Cliff Kirkmyer, III
Vice President
William A. McWhirter, II
Vice President
Marine Products
John Dane, III
President, Marine Group
Neal S. Platzer
President, Platzer Shipyards, Inc.
Vincent R. Almerico
Senoir Vice President
Robert E. Kenny
Senior Vice President
Harvey B. Walpert
Senoir Vice President
Clifford Anglin
Vice President
Terry Bollman
Vice President
Wayne J. Bourgeois
Vice President
George A. DeBord
Vice President
Salvadore J. Guarino
Vice President
A. Fred May
Vice President
Sidney C. Mizell
Vice President
W. Philip Nuss
Vice President
Anil Raj
Vice President
James G. Rivers, Jr.
Vice President
Neville Q. Rush
Vice President
Keith L. Voigts
Vice President
Containers
Custom Vessels
Harry W. Hinkle
President, Beaird Industries, Inc.
E. C. Greene
Vice President
George W. Gruner
Vice President
Murphy B. Horton
Vice President
Charles G. Moore
Vice President
John H. Wawrzeniak
Vice President
Steve Zoller
Vice President
LPG Containers
Timothy R. Wallace
Chairman, LPG Containers
John R. McDearman
Executive Vice President
Michael C. Cooper
Vice President
Transportation
Patrick A. Turner
President, Transportation
Trinity Industries
de Mexico
Manuel Castro, Sr.
President
Jorge Bracho
Vice President
Manuel Castro, Jr.
Vice President
Luis Pardo
Vice President
Carlos Reynoso
Vice President
PAGE 30
Directors
David W. Biegler
Chairman, President and
Chief Executive Officer
ENSERCH Corporation
Barry J. Galt
Chairman, President and
Chief Executive Officer
Seagull Energy
Corporation
Clifford J. Grum
Chairman and Chief
Executive Officer
Temple-Inland, Inc.
Dean P. Guerin
Chairman and Chief
Executive Officer
Berry-Barnett Food
Distribution Company
Jess T. Hay
Retired Chairman and
Chief Executive Officer,
Lomas Financial
Corporation
Edmund M. Hoffman
Investments
Ray J. Pulley
Investments
Timothy R. Wallace
Group Vice President
W. Ray Wallace
Chairman, President and
Chief Executive Officer
Executive Officers
W. Ray Wallace
Chairman, President and
Chief Executive Officer
Ralph A. Banks, Jr.
Senior Vice President
Richard G. Brown
Senior Vice President
John T. Sanford
Senior Vice President
John Dane, III
Group Vice President
Mark W. Stiles
Group Vice President
Timothy R. Wallace
Group Vice President
Jack L. Cunningham, Jr.
Vice President
John M. Lee
Vice President
R. A. Martin
Vice President
Tim L. Oglesby
Vice President
F. Dean Phelps, Jr.
Vice President
Joeseph F. Piriano
Vice President
Linda S. Sickels
Vice President
Neil O. Shoop
Treasurer
William J. Goodwin
Controller
J. J. French, Jr.
Secretary
(Employed by outside
law firm)
Executive Offices
2525 Stemmons Freeway
Dallas, Texas
75207-2401
P.O. Box 568887
Dallas, Texas 75356-8887
Tel: (214) 631-4420
Auditors
Ernst & Young LLP
Transfer Agent and
Registrar
The Bank of New York
New York, New York
Annual Meeting
The Annual Meeting of
Stockholders will be on
July 17, 1996, at 9:30
a.m. at the offices of
the Company,
2525 Stemmons Freeway,
Dallas, Texas 75207-2401.
Form 10-K
A copy of the Company's
Form 10-K, filed with the
Securities and Exchange
Commission, shall be
furnished without charge
upon written request to
Michael E. Conley,
Director of Investor
Relations,
Trinity Industries, Inc.,
P. O. Box 568887, Dallas,
Texas 75356-8887.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has
duly caused this Annual Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
TRINITY INDUSTRIES, INC. By:
Registrant F. Dean Phelps, Jr.
Vice President
June 26, 1996
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:
David W. Biegler W. Ray Wallace
Director President and Chairman
June 26, 1996 June 26, 1996
Barry J. Galt
Director Principal Financial Officer
June 26, 1996
John T. Sanford
Clifford J. Grum Senior Vice President
Director June 26, 1996
June 26, 1996
Principal Accounting Officer
Dean P. Guerin
Director
June 26, 1996 F. Dean Phelps, Jr.
Vice President
June 26, 1996
Jess T. Hay
Director
June 26, 1996
Edmund M. Hoffman
Director
June 26, 1996
Ray J. Pulley
Director
June 26, 1996
Timothy R. Wallace
Director
June 26, 1996
EXHIBIT 21
Trinity Industries, Inc.
Listing of Subsidiaries of the Registrant
The Registrant has no parent.
At March 31, 1996, the operating subsidiaries of the Registrant were:
Percentage of
Organized voting securities
under the owned by the
Name of subsidiary laws of Registrant
Beaird Industries, Inc. Delaware 100%
Beaird Industries, Inc. of Orange Delaware 100%
Flo-Bend, Inc. Delaware 100%
Gulf Coast Fabrication, Inc. Mississippi 100%
Helmsdale Limited Isle of Man 100%
Platzer Shipyard, Inc. Delaware 100%
Standard Forged Products, Inc. Delaware 100%
Stearns Airport Equipment Co., Inc. Delaware 100%
Syntechnics, Inc. Delaware 100%
Syro, Inc. Ohio 100%
Transit Mix Concrete & Materials
Company Delaware 100%
Transit Mix Concrete & Materials
Company of Louisiana Louisiana 100%
Trinity Casteel, Inc. Delaware 100%
Trinity Gulf Repair, Inc. Delaware 100%
Trinity Industries Leasing Company Delaware 100%
Trinity Industries Transportation, Inc. Texas 100%
Trinity Marine Baton Rouge, Inc. Delaware 100%
Trinity Marine Caruthersville, Inc. Delaware 100%
Trinity Marine Gulfport, Inc. Nevada 100%
Trinity Marine Nashville, Inc. Delaware 100%
Trinity Marine Panama City, Inc. Delaware 100%
Trinity Marine Pascagoula, Inc. Delaware 100%
Trinity Marine Port Allen, Inc. Delaware 100%
Trinity Materials, Inc. Delaware 100%
Trinity Mobile Railcar Repair, Inc. Delaware 100%
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 9,
1996, included in the 1996 Annual Report to Stockholders of Trinity
Industries, Inc.
Our audits also included the financial statement schedule of
Trinity Industries, Inc. listed in Item 14(a). This schedule is the
responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial
statement schedule referred to above, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
We also consent to the incorporation by reference in
Post-Effective Amendment No. 3 to the Registration Statement (Form S-8,
No. 2-64813), Post-Effective amendment No. 1 to the Registration
Statement (Form S-8, No. 33-10937), Post-Effective Amendment No. 1 to the
Registration Statement (Form S-3, No. 33-12526), Amendment No. 1 to the
Registration Statement (Form S-3, No. 33-57338), Registration Statement
(Form S-8, No. 33-35514), Registration Statement (Form S-8, No.
33-73026), Post-Effective Amendment No. 1 to the Registration Statement
(Form S-4, No. 33-51709) of Trinity Industries, Inc. and in the related
Prospectuses of our report dated May 9, 1996, 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, 1996.
ERNST & YOUNG LLP
Dallas, Texas
June 25, 1996
EXHIBIT 27
[ARTICLE] 5
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] MAR-31-1996
[PERIOD-END] MAR-31-1996
[CASH] 15,400,000
[SECURITIES] 0
[RECEIVABLES] 293,500,000
[ALLOWANCES] 0
[INVENTORY] 403,700,000
[CURRENT-ASSETS] 0
[PP&E] 1,099,000,000
[DEPRECIATION] (406,700,000)
[TOTAL-ASSETS] 1,455,800,000
[CURRENT-LIABILITIES] 0
[BONDS] 0
[COMMON] 41,600,000
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 704,400,000
[TOTAL-LIABILITY-AND-EQUITY] 1,455,800,000
[SALES] 0
[TOTAL-REVENUES] 2,496,000,000
[CGS] 0
[TOTAL-COSTS] 2,143,600,000
[OTHER-EXPENSES] 151,200,000
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 16,600,000
[INCOME-PRETAX] 186,300,000
[INCOME-TAX] 72,500,000
[INCOME-CONTINUING] 113,800,000
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 113,800,000
[EPS-PRIMARY] $2.72
[EPS-DILUTED] $2.72
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, 1996
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, 1996 and 1995 . . . . . . . . . . . 5 - 6
Statement of income and changes in Plan
equity for the years ended March 31, 1996,
1995 and 1994 . . . . . . . . . . . . . . . . 7 - 9
Notes to financial statements . . . . . . . . 10
Schedules - Schedules I, II, and III have been
omitted because the information required is included
in the Financial Statements or the notes thereto.
(b) Exhibits
Number Title Page
1 Consent of independent auditors 19
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 27, 1996
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, 1996 and 1995, and the related statements of income and
changes in plan equity for each of the three years in the period
ended March 31, 1996. 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, 1996 and 1995, and the income and
changes in plan equity for each of the three years in the period
ended March 31, 1996, 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 purposes as
of March 31, 1996 and reportable transactions for the year then
ended are presented for purposes of complying with the Department
of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974, and
are not a required part of the basic financial statements. The
Fund Information in the statements of financial condition and the
statements of income and changes in plan equity is presented for
purposes of additional analysis rather than to present the
financial condition and income and changes in plan equity of each
fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audits of the
basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial
statements taken as a whole.
ERNST & YOUNG LLP
Dallas, Texas
June 21, 1996
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Financial Condition, With Fund Information
March 31, 1996
---------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 . . . . . . . . . $ 41,742 $ 259,915 $ 146,926 $ 62,283 $ 180,536 $ 56,300 $ 747,702
Notes receivable
from participants . . . . . . - - - - - 863,724 863,724
Investment in Trinity
common stock, at market . . . 13,156,629 - - - - - 13,156,629
Investment in guaranteed
investment contracts, at
contract value . . . . . . . - 38,995,425 - - - - 38,995,425
Investment in Putnam mutual
funds, at market . . . . . . - - 7,820,477 4,672,605 7,076,364 - 19,569,446
Interest receivable . . . . . . 390 170,475 179 85 185 400 171,714
Contribution receivable
from Trinity . . . . . . . . 695,789 1,862,773 550,244 284,627 609,861 - 4,003,294
Contribution receivable
from employees. . . . . . . . 229,860 504,942 176,516 85,831 199,050 - 1,196,199
Plan Equity . . . . . . . . . . $14,124,410 $41,793,530 $8,694,342 $5,105,431 $8,065,996 $ 920,424 $78,704,133
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Statement of Financial Condition, With Fund Information
March 31, 1995
---------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 . . . . . . . . . $ 16,953 $ 49,977 $ 6,079 $ - $ 102,359 $ 44,618 $ 219,986
Notes receivable
from participants . . . . . . - - - - - 768,096 768,096
Investment in Trinity
common stock, at market . . . 11,192,467 - - - - - 11,192,467
Investment in guaranteed
investment contracts, at
contract value . . . . . . . - 31,592,821 - - - - 31,592,821
Investment in Putnam mutual
funds, at market . . . . . . - - 4,395,494 3,385,933 3,463,774 - 11,245,201
Interest receivable . . . . . . 369 195,414 31,851 61,111 491 370 289,606
Contribution receivable
from Trinity . . . . . . . . 633,666 1,720,912 383,541 257,537 404,072 - 3,399,728
Contribution receivable
from employees. . . . . . . . 187,758 475,196 117,460 73,752 110,260 - 964,426
Plan Equity . . . . . . . . . . $12,031,213 $34,034,320 $4,934,425 $3,778,333 $4,080,956 $ 813,084 $ 59,672,331
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, With Fund Information
Year Ended March 31, 1996
--------Putnam Mutual Funds--------
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Assets Account Account Income Trust Voyager Loans Total
Net investment income:
Interest . . . . . . . . . . . . $ 5,982 $ 2,405,823 $ 2,869 $ 293,918 $ 2,195 $ 5,447 $ 2,716,234
Dividends. . . . . . . . . . . . 227,852 - 443,358 - 329,350 - 1,000,560
233,834 2,405,823 446,227 293,918 331,545 5,447 3,716,794
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . . 2,316,897 13,731,385 2,358,759 1,363,200 2,313,851 281,365 22,365,457
Aggregate costs . . . . . . . (2,316,897) (13,731,385) (2,326,454) (1,370,449) (2,294,191) (281,365) (22,320,741)
Net realized gain(loss) . . . . . . - - 32,305 (7,249) 19,660 - 44,716
Unrealized appreciation (depreciation)
of investments . . . . . . . . . (788,303) - 1,204,205 84,158 1,331,542 (44) 1,831,558
Contributions:
Employee contribution. . . . . . 2,772,131 6,118,003 1,996,984 1,087,979 2,027,629 289,602 14,292,328
Employer contribution. . . . . . 695,789 1,862,773 570,775 284,627 589,330 - 4,003,294
3,467,920 7,980,776 2,567,759 1,372,606 2,616,959 289,602 18,295,622
Withdrawals, distributions
and transfers. . . . . . . . . . (820,254) (2,627,389) (490,579) (416,335) (314,666) (187,665) (4,856,888)
Net increase in Plan equity . . . . 2,093,197 7,759,210 3,759,917 1,327,098 3,985,040 107,340 19,031,802
Plan equity:
Beginning of year . . . . . . . 12,031,213 34,034,320 4,934,425 3,778,333 4,080,956 813,084 59,672,331
End of year . . . . . . . . . . $14,124,410 $41,793,530 $8,694,342 $5,105,431 $8,065,996 $ 920,424 $78,704,133
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, With Fund Information
Year Ended March 31, 1995
---------Putnam Mutual Funds---------
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Assets Account Account Income Trust Voyager Loans Total
Net investment income:
Interest . . . . . . . . . . . . $ 5,210 $ 2,201,037 $ 871 $ 224,450 $ 1,276 $ 2,707 $ 2,435,551
Dividends. . . . . . . . . . . . 181,964 - 233,501 - 124,601 - 540,066
Other . . . . . . . . . . . . - - - - - 426,863 426,863
187,174 2,201,037 234,372 224,450 125,877 429,570 3,402,480
Realized gain(loss) on investments:
Aggregate proceeds . . . . . . . 2,434,730 14,249,171 1,683,054 1,386,786 1,492,338 - 21,246,079
Aggregate costs . . . . . . . (2,434,730) (14,249,171) (1,678,150) (1,402,797) (1,482,447) - (21,247,295)
Net realized gain(loss) . . . . . . - - 4,904 (16,011) 9,891 - (1,216)
Unrealized appreciation (depreciation)
of investments . . . . . . . . . (245,895) - 248,330 (50,592) 303,866 (81) 255,628
Contributions:
Employee contribution. . . . . . 1,827,576 4,499,784 1,270,743 930,977 1,145,353 (17,444) 9,656,989
Employer contribution. . . . . . 633,665 1,720,912 428,277 257,537 359,336 - 3,399,727
2,461,241 6,220,696 1,699,020 1,188,514 1,504,689 (17,444) 13,056,716
Withdrawals, distributions
and transfers. . . . . . . . . . (218,585) (2,225,366) (369,160) (477,085) (131,969) (240,072) (3,662,237)
Net increase in Plan equity . . . . 2,183,935 6,196,367 1,817,466 869,276 1,812,354 171,973 13,051,371
Plan equity:
Beginning of year . . . . . . . 9,847,278 27,837,953 3,116,959 2,909,057 2,268,602 641,111 46,620,960
End of year . . . . . . . . . . $12,031,213 $34,034,320 $4,934,425 $3,778,333 $4,080,956 $ 813,084 $59,672,331
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, With Fund Information
Year Ended March 31, 1994
---------Putnam Mutual Funds---------
Guaranteed U. S. Govt.
Stock Investment Growth & Income Participant
Assets 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 . . . . . . . . . . (837,596) (1,714,241) 57,912 (743,825) 251,648 (154,737) (3,140,839)
Net increase in Plan equity . . . . 2,256,374 5,110,337 1,256,513 416,671 1,219,983 175,110 10,434,988
Plan equity:
Beginning of year. . . . . . . . 7,590,904 22,727,616 1,860,446 2,492,386 1,048,619 466,001 36,185,972
End of year. . . . . . . . . . . $9,847,278 $27,837,953 $3,116,959 $2,909,057 $2,268,602 $ 641,111 $46,620,960
See accompanying notes to financial statements.
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Notes to Financial Statements
March 31, 1996
1. Description of the Plan
General - The Profit Sharing Plan for Employees of Trinity
Industries, Inc. and Certain Affiliates (the "Plan") was adopted by
the Board of Directors of Trinity Industries, Inc. (the "Board") on
December 11, 1986 and became effective January 1, 1987, for
eligible employees of Trinity Industries, Inc. and Certain
Affiliates (the "Employer"). The Plan was amended and restated
effective April 1, 1994. The Plan is a defined contribution plan
designed to comply with the provisions of Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA"). The following is
a brief description of the Plan. Participants should refer to the
Plan document for complete information regarding the Plan. The
Plan's fiscal year end is March 31.
Participation - Each employee is eligible to contribute to the
Plan on the first day of the calendar quarter on or immediately
following his employment date with the Company and must meet the
following requirements:
* Must be classified as a full-time, part-time, or
temporary employee of Trinity Industries, Inc.; and
* Must be in a unit of employees who are designated as
eligible to participate in the Plan; and
* Must not be included in a unit of employees covered by a
collective bargaining agreement unless benefits under this
Plan were included in an agreement as a result of good
faith bargaining.
Eligible employees automatically become participants and must
indicate on the form or forms provided by the Committee whether or
not they want to make contributions to the plan. If they elect to
contribute, they will authorize the Employer to make payroll
deductions for contributions to the Plan.
Contributions - Each Plan participant agrees to contribute not
less than two percent nor more than ten percent of their
compensation in one percent increments as designated by the
participant. A participant's salary reduction may not exceed
$9,500 and $9,240 per calendar year ended 1996 and 1995,
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 twice
each year.
Employer matching contributions shall be made if Company
earnings are at least $0.333 per share of common stock and
sufficient to pay dividends to stockholders ($0.68, $0.68 and $0.64
per share for the years ended March 31, 1996, 1995, and 1994,
respectively). 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 at least
one but 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 various insurance companies
selected annually by the Committee. At March 31, 1996, the
guaranteed investment contracts had guaranteed annual rates
of return of 9.06% (GAC 5027), 6.24% (GAC 627-05387), 6.08%
(GAC 20254),8.31% (GAC 7614) and 5.15% (GAC 7219).
At March 31, 1995, the guaranteed investment contracts had
guaranteed annual rates of return of 8.8% (GAC 4854), 9.06%
(GAC 5027), 6.24% (GAC 627-05387), 8.31% (GAC 7614) and 5.15%
(GAC 7219).
Participant's accounts invested in the Guaranteed Investment
Account earn interest at a rate blended from all of the
contracts included in the Guaranteed Investment Account. The
account is credited with earnings on the underlying
investments and charged for plan withdrawals and
administrative expenses charged by the insurance companies.
Transfers of participants accounts to and from the Guaranteed
Investment Account are not permitted.
(c) Putnam Mutual Funds Investment Accounts (the "Putnam
Mutual Funds") invests in three mutual funds selected by the
Committee. At March 31, 1996, 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, 1996, 1995 and 1994, the majority of
participants had elected to participate in the guaranteed
investment contracts.
Benefits - Distribution of a participant's account balance is
payable upon retirement at or after age 65, total disability,
death, or termination of employment. Distribution is equal to the
salary reduction contribution and related earnings plus the vested
portion of the Employer contribution and related earnings.
Withdrawal of up to 100 percent of the employee contribution
can be made only to meet "immediate and heavy financial needs"
(medical care, college tuition, the purchase of a principal
residence, or to prevent the foreclosure on a principal residence)
as long as the funds are not available for such needs from other
sources. No withdrawal can be made against the earnings on the
employee contributions or against the Employer contribution and
related earnings. These restrictions no longer apply when the
participant reaches age 59 1/2.
Loans for "immediate and heavy financial needs" may be made
for a minimum of $1,000 up to a maximum of $50,000, not to exceed
50 percent of the Employee contribution and related earnings and
not to exceed 50 percent of the vested portion of the Employer
contribution and related earnings. Loans are subject to rules and
regulations established by the Plan Administrator, as defined in
the Plan.
Vesting - The Employer contribution and related earnings
(losses) vest to participants, depending upon the number of years
of vesting service, as defined, completed by such participant as
follows:
Years of Service Percentage Vested
Less than 1 0
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
Participants are 100 percent vested in their Employer
contribution and allocated portion of related earnings (losses)
upon their attainment of age 65 and are always 100 percent vested
in their employee contribution and related earnings (losses) on
such contribution.
Administration of the Plan - The Plan is administered by the
Committee, consisting of at least three persons who are appointed
by the Board. The members of the Committee serve at the pleasure
of the Board, and any committee member who is an employee of the
Employer shall not receive compensation for his services.
A separate account is maintained for each participant. The
Plan provides that account balances for participants are adjusted
periodically as follows:
(a) Employee contributions are generally allocated on a
quarterly basis;
(b) Participant's share of the Employer contribution shall be
allocated to the participant's account as of a date no later
than the last day of the Plan year;
(c) Earnings and appreciation or depreciation of investment
assets of the Trust Fund for each calendar quarter shall be
allocated to the accounts of participants, former
participants and beneficiaries who had unpaid balances in
their accounts on the last day of such calendar quarter in
proportion to the balances in such accounts at the beginning
of the calendar quarter.
Upon request, distributions shall be made no earlier than the
later of the last day of the calendar quarter in which entitlement
occurs or the date on which the Committee determines the final
balances. Distributions from the Stock Account shall be made in
cash unless otherwise designated by the participant.
Income tax status - The Plan has received a determination
letter from the Internal Revenue Service dated November 4, 1994
stating that the Plan is a qualified plan under Section 401(a) of
the Internal Revenue Code of 1986 (the "Code") and that the Trust
is exempt from federal income tax under Section 501(a) of the Code.
Certain changes have been made to the Plan and a determination
letter has been requested from the Internal Revenue Service. The
Committee believes the Plan is being operated in compliance with
applicable requirements of the code. The Committee is not aware of
any course of action or series of events that have occurred that
might adversely affect the plan's qualified status.
Employee contributions and Employer contributions are not
included in the participant's federal taxable income in the year
such contributions are made. A participant shall not be subject to
federal income taxes with respect to participation in the Plan
until the amounts are withdrawn or distributed.
Amendment or termination of the Plan - The Employer may amend
the Plan at any time. However, no amendment, unless made to secure
approval of the Internal Revenue Service or other governmental
agency, may operate retroactively to reduce or divest the then
vested interest in the Plan of any participant, former participant
or beneficiary, or to reduce or divest any benefit payable under
the Plan unless all participants, former participants and
beneficiaries then having vested interests or benefit payments
affected thereby consent to such amendment.
The Employer may terminate the Plan at any time. Upon complete
or partial termination, the accounts of all participants affected
thereby shall become 100 percent vested, and the Committee shall
direct the Trustee to distribute the assets in the Trust Fund,
after receipt of any required approval by the Internal Revenue
Service and payment of any expenses properly chargeable thereto, to
participants, former participants, and beneficiaries in proportion
to their respective account balances.
2. Significant Accounting Policies
Investments and investment income - Investments in the common
stock of the Employer and the Putnam Mutual Funds are valued at the
last reported sales price on the last business day of the Plan year
as reported on a national securities exchange. The investments in
guaranteed investment contracts are valued at cost which
approximates market value. The Plan is in compliance with AICPA
Statement of Position 94-4, "Reporting of investment contracts held
by health and welfare benefit plans and defined contribution
pension plans," with fair market value approximating stated value
for the guaranteed investment contracts.
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).
Use of estimates in the preparation of financial statements - The
preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates from which
actual results may differ.
Prior year financial statements have been restated in order to
comply with the provisions of the AICPA Statement of Position 92-6
"Accounting and Reporting by Health and Welfare Benefit Plans."
Amounts previously reported as benefits payable have been included in
plan equity and the distributed amounts have been adjusted accordingly.
3. Investments
Investments are as follows:
March 31, 1996 March 31, 1995
Cost Market Cost Market
Trinity Industries,
Inc. common
stock $10,343,845 $13,156,629* $ 7,591,381 $11,192,467
Guaranteed investment
contracts
GAC 20254 9,330,804 9,330,804* - -
GAC 4854 - - 7,669,687 7,669,687
GAC 7219 8,226,153 8,226,153* 7,823,255 7,823,255
GAC 5027 4,776,358 4,776,358* 4,347,428 4,347,428
GAC 627-05387 3,667,622 3,667,622 3,451,726 3,451,726
GAC 7614 12,994,488 12,994,488* 8,300,725 8,300,725
38,995,425 38,995,425 31,592,821 31,592,821
Putnam mutual funds
U.S. Govt.
Income Trust 4,823,110 4,672,605* 3,620,596 3,385,933
Growth & Income 6,434,059 7,820,477* 4,213,280 4,395,494
Voyager 5,347,346 7,076,364* 3,066,299 3,463,774
16,604,515 19,569,446 10,900,175 11,245,201
Participant loans 864,088 863,724 768,416 768,096
$66,807,873 $72,585,224 $50,852,793 $54,798,585
* Investment represents 5 percent or more of the fair value of total
assets.
4. Reconciliation of Financial Statements to the Form 5500
The following is a reconciliation of plan equity per the financial
statements to the Form 5500:
March 31
1996 1995
Plan equity per the financial statements $78,704,133 $59,672,331
Amounts allocated to withdrawing participants (1,545,308) (778,329)
Plan equity per the Form 5500 $77,158,825 $58,894,002
The following is a reconciliation of withdrawals, distributions and
transfers per the financial statements to the Form 5500:
Year Ended March 31
1996 1995
Withdrawals, distributions and transfers
per the financial statements $4,856,888 $3,662,237
Amounts allocated to withdrawing participants at
end of year 1,545,308 778,329
Amounts allocated to withdrawing participants at
beginning of year (778,329) (930,061)
Withdrawals, distributions and transfers
per the Form 5500 $5,623,867 $3,510,505
Amounts allocated to withdrawing participants are recorded on the Form
5500 for withdrawals that have been processed and approved for payment
prior to March 31 but not yet paid as of that date.
5. Unrealized Appreciation (Depreciation) of Investments
Unrealized appreciation (depreciation) of investments in Trinity common
stock, Putnam mutual funds, and Participant loans for the years ended March
31, 1996, 1995, and 1994 were determined as follows:
Net
Investments Investments increase
at market at cost (decrease)
March 31, 1996
Trinity common stock
March 31, 1996 $13,156,629 $10,343,846 $2,812,783
March 31, 1995 11,192,467 7,591,381 3,601,086
1,964,162 2,752,465 (788,303)
Putnam mutual funds
March 31, 1996 19,569,446 16,604,515 2,964,931
March 31, 1995 11,245,201 10,900,175 345,026
8,324,245 5,704,340 2,619,905
Participant loans
March 31, 1996 863,724 864,088 (364)
March 31, 1995 768,096 768,416 (320)
95,628 95,672 (44)
Increase in unrealized
appreciation of
investments $10,384,035 $ 8,552,477 $1,831,558
Net
Investments Investments increase
at market at cost (decrease)
March 31, 1995
Trinity common stock
March 31, 1995 $11,192,467 $ 7,591,381 $3,601,086
March 31, 1994 9,280,170 5,433,189 3,846,981
1,912,297 2,158,192 (245,895)
Putnam mutual funds
March 31, 1995 11,245,201 10,900,175 345,026
March 31, 1994 7,191,495 7,348,073 (156,578)
4,053,706 3,552,102 501,604
Participant loans
March 31, 1995 768,096 768,416 (320)
March 31, 1994 567,334 567,573 (239)
200,762 200,843 (81)
Increase in unrealized
appreciation of
investments $ 6,166,765 $ 5,911,137 $ 255,628
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
6. Expenses
The expenses incurred by the Trustee in the performance of its duties,
including the Trustee's compensation and the services of the recordkeeper,
shall be paid by the Plan unless paid by the Employer. The Employer paid
$300,751, $268,624, and $196,608, for recordkeeping and trustee fees on
behalf of the Plan for the fiscal years ended March 31, 1996, 1995, and
1994, respectively.
Index to Exhibits
Number Description Page
1 Consent of Independent Auditors 20
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 21, 1996, with respect to the financial statements
and supplemental 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, 1996.
ERNST & YOUNG LLP
Dallas, Texas
June 27, 1996
Profit Sharing Plan for Employees
of Trinity Industries, Inc. And Certain Affiliates
Item 27(a) - Assets Held for Investment
March 31, 1996
Units,
shares,
or face Current
Identity amount Cost value
Short Term Money Market
investments $ 747,702 $ 747,702
Trinity Industries, Inc.
common stock 377,251 10,343,845 13,156,629
Guaranteed Investment Contracts
Allstate Life Insurance Co.
GAC 5027, 9.06% 4,776,358 4,776,358
John Hancock Mutual Life
GAC 7219, 5.15% 8,226,153 8,226,153
GAC 7614 8.31% 12,994,488 12,994,488
Metropolitan Life Ins Co.
GAC 20254 6.08% 9,330,804 9,330,804
Provident Life & Accident
Insurance Co.
GAC 627-05387, 6.24% 3,667,622 3,667,622
38,995,425 38,995,425
Putnam mutual funds
U. S. Govt.
Income Trust 365,333 4,823,110 4,672,605
Growth & Income 458,679 6,434,059 7,820,477
Voyager 437,082 5,347,346 7,076,364
16,604,515 19,569,446
Participant loans - 863,724
$66,691,487 $73,332,926
Profit Sharing Plan for Employees
of Trinity Industries, Inc. and Certain Affiliates
Item 27(d) - Reportable Transactions
Year Ended March 31, 1996
(Pursuant to ERISA 2520.103-6(d)(2))
----- Purchases ----- ---------- Sales ----------
Number of Number of Net
trans- trans- gain
actions Cost actions Proceeds (loss)
Category (i)
Individual transactions
in excess of 5% of Plan
equity
Allstate Life - - 1 $8,233,530 -
Insurance Co.
GAC 4854, 8.8%
Category (iii)
Series of securities
transactions in excess
of 5% of Plan equity
John Hancock Mutual 2 $4,693,763 - - -
Life GAC 7614, 8.31%
Metropolitan Life 3 $9,330,804 - - -
Insurance Co.
GAC 20254, 6.08%
Putnam Growth and Income Fund $3,424,983
Putnam Voyager Fund $3,513,229
There were no category (ii) or (iv) reportable transactions.