UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-Q

(Mark One)

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

OR

For the transition period from                     to                    .

Commission File Number 1-6903

Trinity Industries, Inc.

Registrant’s telephone number, including area code (214) 631-4420

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o.

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o.

     At October 29, 2004 there were 47,557,191 shares of the Registrant’s common stock outstanding.

TRINITY INDUSTRIES, INC.

FORM 10-Q

TABLE OF CONTENTS

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Item 1. Financial Statements

Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Operations

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Operations

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Consolidated Balance Sheets

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Consolidated Statements Cash Flows

Interest paid for the nine months ended September 30, 2004 and 2003 was $30.6 and $26.3, respectively. Taxes paid, net of refunds received, were $5.9 for the nine months ended September 30, 2004 and taxes received, net of payments made were $43.5 for the nine months ended September 30, 2003.

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Consolidated Statement of Stockholders’ Equity

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

     The foregoing consolidated financial statements are unaudited and have been prepared from the books and records of Trinity Industries, Inc. (“Trinity” or the “Company”). In the opinion of management, all adjustments, consisting only of normal and recurring adjustments necessary for a fair presentation of the financial position of the Company as of September 30, 2004 and the results of operations for the three-month and nine-month periods ended September 30, 2004 and 2003, and cash flows for the nine-month periods ended September 30, 2004 and 2003, in conformity with generally accepted accounting principles, have been made. Because of seasonal and other factors, the results of operations for the three-month and nine-month periods ended September 30, 2004 may not be indicative of expected results of operations for the year ending December 31, 2004. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited consolidated financial statements of the Company included in its Form 10-K for the year ended December 31, 2003.

Stock Based Compensation

     The Company has elected to apply the accounting provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” (APB No. 25) and its interpretations and, accordingly, no compensation expense has been recorded for the stock options. The effect of computing compensation expense in accordance with Statement of Accounting Standards No. 123, “Accounting for Stock Based Compensation,” using the Black-Scholes option pricing method for the three and nine months ended September 30, 2004 and 2003 are shown in the accompanying table (in millions).

Net Loss Applicable to Common Shareholders

     Diluted net income applicable to common shareholders is based on the weighted average shares outstanding plus the dilutive impact of stock options and Series B preferred stock. Basic net income applicable to common shareholders is based on the weighted average number of common shares outstanding for the period. The numerator for basic net income (loss) applicable to common shareholders is net income (loss) adjusted for dividends on the Series B preferred stock in 2004 and 2003. The numerator for diluted net income (loss) applicable to common shareholders is net income (loss), adjusted for dividends on the Series B preferred stock in 2004 and 2003. The difference between the denominator in the basic calculation and the denominator in the diluted calculation for the three months ended September 30, 2004 and September 30, 2003 was

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attributable to the effect of employee stock options. Employee stock options were antidilutive for all other periods presented. The Series B preferred stock was antidilutive for all periods presented and therefore not considered in the diluted net income (loss) per common share calculation.

Reclassifications

     Certain reclassifications have been made to prior year statements to conform to the current period presentation.

     Note 2. Segment Information

     The Company reports operating results in the following business segments: (1) the Rail Group, which manufactures and sells railcars and component parts; (2) the Constructions Products Group, which manufactures and sells highway safety products, concrete and aggregates, girders and beams used in the construction of highway and railway bridges, and weld fittings used in pressure piping systems; (3) the Inland Barge Group, which manufactures and sells barges and related products for inland waterway services; (4) the Industrial Products Group, which manufactures and sells tank heads and pressure and non-pressure containers for the storage and transportation of liquefied gases and other liquid and dry products; and (5) the Railcar Leasing and Management Services Group, which provides fleet management, maintenance and leasing services. Finally, All Other includes the Company’s captive insurance and transportation companies, structural towers, and other peripheral businesses.

     Sales and related profits from the Rail Group to Railcar Leasing and Management Services Group are recorded in Rail Group and eliminated in consolidation. Sales of railcars from the lease fleet are included in the Railcar Leasing and Management Services Group. Sales between groups are recorded at prices comparable to those charged to external customers.

Three Months Ended September 30, 2004 (in millions)

Three Months Ended September 30, 2003 (in millions)

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Nine Months Ended September 30, 2004 (in millions)

Nine Months Ended September 30, 2003 (in millions)

Note 3. Property, Plant and Equipment

     The following table summarizes the components of property, plant and equipment as of September 30, 2004 and December 31, 2003 (in millions).

Note 4. Deposit Agreement

     The Company had a deposit agreement with Altos Hornos de Mexico, SA de C.V. (“AHMSA”) that provided funds on deposit with AHMSA that were used along with other funds from the Company to purchase steel from AHMSA. The balance of this deposit has been collected in full, including $8.1 million of accrued interest which was recognized as income on a cash basis in the quarter ended September 30, 2004.

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Note 5. Warranties

     The Company provides for the estimated cost of product warranties at the time revenue is recognized and assesses the adequacy of the resulting reserves on a quarterly basis. The change in the accruals for warranties (included in accounts payable and accrued liabilities) for the three and nine months ended September 30, 2004 and 2003 was as follows (in millions):

Note 6. Debt

     The following table summarizes the components of debt as of September 30, 2004 and December 31, 2003 (in millions).

     In March 2004, the Company issued $300 million aggregate principal amount 6 1/2% senior notes (Senior Notes) due 2014, through a private offering. Interest on the Senior Notes is payable semiannually commencing September 15, 2004. The Senior Notes rank equally with all of the Company’s existing and future senior debt and are subordinated to all the Company’s existing and future secured debt to the extent of the value of the assets securing such debt. The Company may redeem some or all of the Senior Notes at any time on or after March 15, 2009 at a redemption price of 103.25% in 2009, 102.167% in 2010, 101.083% in 2011 and 100.0% in 2012 and thereafter plus accrued interest. The Company may also redeem up to 35% of the aggregate principal amount of the Senior Notes using the proceeds from certain public equity offerings completed on or before March 15, 2007 at a redemption price of 106.5% of the principal amount plus accrued and unpaid interest. The Senior Notes could restrict the Company’s ability to incur additional debt; make certain distributions, investments and other restricted payments; create certain liens; merge; consolidate; or sell substantially all or a portion of its assets. The Company applied approximately $163 million of the net proceeds of the offering to repay all indebtedness under its existing bank credit facility. In September 2004, as required by the contract with the purchasers of the Senior Notes due 2014, the Company made an offer to exchange all of the privately placed Senior Notes for an equal principal amount of the Senior Notes due 2014, which are registered with the Security and Exchange Commission and have substantially identical terms. As of September 30, 2004 all of the privately placed Senior Notes were exchanged for Senior Notes due 2014.

     In connection with the issuance of the Senior Notes, the Company extended its secured credit agreement to provide for a three-year, $250 million revolving credit facility. Amounts borrowed under the revolving credit facility for periods after the first quarter of 2004 will bear interest at LIBOR plus a margin based upon financial performance. The Company’s accounts receivable and inventory secure the agreement. The agreement limits the amount of capital expenditures related to the Company’s leasing business, requires maintenance of ratios related to interest coverage for the leasing and manufacturing operations, leverage, asset coverage and minimum net worth, and restricts the amount of dividend payments based upon the

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current credit rating of the Company not to exceed $25 million annually. At September 30, 2004, there were no borrowings under the revolving credit facility.

     Trinity Industries Leasing Company (“TILC”), through a wholly owned and consolidated business trust, has $47.1 million outstanding of a $300 million non-recourse warehouse facility to finance or refinance railcars acquired or owned by TILC. The warehouse facility is due August 2005 and unless renewed would be payable in three equal installments in February 2006, August 2006, and February 2007. Railcars financed by the warehouse facility have historically been refinanced under long-term financing agreements. Specific railcars and the underlying leases secure the facility. Advances under the facility may not exceed 75% of the fair market value of the eligible railcars securing the facility as defined by the agreement. Advances under the facility bear interest at LIBOR plus 1.375% (3.0524% at September 30, 2004). At September 30, 2004, $252.9 million was available under this facility.

     As of December 31, 2003, the Railcar Leasing and Management Services Group (“Leasing Group”) had an equity ownership in a trust formed to finance the purchase of railcars. This trust was capitalized with $9.5 million from the Leasing Group and outside debt of $25.6 million. Because this trust is a variable interest entity for which the equity investor is the primary beneficiary, the financial statements of the trust were consolidated with the Company’s financial statements as of and for the year ended December 31, 2003. In February 2004, the Leasing Group sold its equity ownership in the trust to a third party. Consequently, the trust, including the non-recourse debt of $25.6 million, is no longer consolidated in the Company’s financial statements.

     Terms and conditions of other debt are described in the Annual Report.

     The remaining principal payments under existing debt agreements as of September 30, 2004 are as follows (in millions):

Note 7. Railcar Leasing and Management Services Group

     The Leasing Group provides fleet management, maintenance and leasing services. Selected combined financial information for the Leasing Group is as follows (in millions):

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     The decline in the Leasing Group operating profit for the three months ended September 30, 2004 was due to the refinancing of railcars under the non-recourse warehouse facility with long-term, fixed rate, off-balance sheet, sale/leaseback financings in November 2003 and August 2004 which effectively converted interest expense (which is not deducted from operating profit) to lease expense (which is deducted from operating profit).

     Interest expense, which is not a component of operating profit, was $4.7 and $14.0 for the three and nine month periods ended September 30, 2004 and $4.1 and $12.2 for the same periods last year.

     During the quarter ended September 30, 2004, the Leasing Group completed a transaction whereby $180.1 million of railcars were sold to independent trusts. These trusts financed the purchase of the railcars with $134.0 million in debt and $46.1 million in third party equity. The equity participants in the trusts are the primary beneficiaries of the trusts. The Leasing Group, through a newly formed, wholly owned qualified subsidiary, leased railcars from the trusts under operating leases with terms of 22 years and subleased the railcars to independent third parties under shorter term operating leases. This qualified subsidiary had total assets of $49.7 million as of September 30, 2004 including cash of $6.1 million, and Leasing Group railcars of $43.6 million. The cash and railcars are pledged to collateralize the lease obligations to the trusts and are included in the consolidated financial statements of the Company. Trinity does not guarantee the performance of the subsidiary’s lease obligations. Under the terms of the operating lease agreement, the Leasing Group has options to purchase at a predetermined, fixed price, certain of the railcars from the trusts in 2019. The Leasing Group also has options to purchase the railcars at the end of the lease agreement at the then fair market value of the railcars as determined by a third party, independent appraisal. At the expiration of the operating lease agreement, the Leasing Group’s qualified subsidiary has no further obligation.. An independent trustee for the trust has authority for appointment of the railcar fleet manager, which at September 30, 2004 was TILC. As fleet manager, TILC is required to endeavor, consistent with customary commercial practice as would be used by a prudent person, to maintain railcars under lease for the benefit of the trusts. TILC receives management fees under the terms of the agreement for services it provides. Certain ratios and cash deposits must be maintained by the Leasing Group’s subsidiaries in order for excess cash flow, as defined in the agreements, from the third parties leases, to be available to Trinity. The sales of railcars by Trinity to the trusts were accounted for as a sale/leaseback transaction. No revenue or profit was recorded at the time of the transactions and all profit was deferred and is being amortized over the terms of the operating leases. Neither the assets, the liabilities, nor equity of the trusts are reflected on the balance sheet of Trinity.

     Equipment on lease, as shown in the table above, consists primarily of railcars leased to third parties with terms generally ranging between one and twenty years, wherein equipment manufactured by Trinity is leased for a specified type of service over the term of the lease.

     As lessor, the Company primarily enters into operating leases. Future minimum rental revenues to be received by the Company on such leases, including the leases in the transaction described above, as of September 30, 2004 are as follows: the remaining three months of 2004 — $25.9 million; 2005 — $95.9 million; 2006 — $82.9 million; 2007 — $71.9 million; 2008 — $59.6 million and $316.4 million thereafter.

     The Leasing Group’s debt consists of both recourse and non-recourse debt. See Note 6 for maturities for the debt. Leasing Group equipment with a net book value of $304.9 million is pledged as collateral for debt.

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Note 8. Other, Net

     Other (income) expense consists of the following items (in millions):

Note 9. Benefit Plans

     The following table summarizes the components of net periodic pension cost for the Company (in millions):

     The Company contributed $13.2 million and $8.8 million, respectively, to the Company’s defined benefit pension plan for the three month periods ended September 30, 2004 and 2003 and $16.8 million and $9.3 million, respectively, for the nine month periods ended September 30, 2004 and 2003. Total contributions to the Company’s pension plan in 2004 are expected to be approximately $17.8 million.

Note 10. Contingencies

     In March 2004, the Company and its wholly owned subsidiary, Trinity Marine Products, Inc. (“TMP”), settled a lawsuit filed by Florida Marine Transporters, Inc. (“FMT”) related to twenty-eight tank barges owned and/or operated by FMT. The settlement involves, among other elements, a joint monitoring of the barge coatings and void compartment maintenance procedures, and a mutual release of all claims against one another.

     The Company and TMP, and certain material suppliers and others, are named as co-defendants in four separate lawsuits filed by multiple plaintiffs on various dates. In one of these four cases the plaintiff has petitioned the court for certification of a class which, if certified by the court, could increase the total number of barges involved in that case. Absent certification of the class, the four suits involve 24 tank barges sold at an average price of approximately $1.4 million, and 140 hopper barges sold at an average price of approximately $280,000. All four cases allege similar causes of action related to defects in coating materials supplied by a co-defendant and coatings application workmanship by TMP. The plaintiffs seek both compensatory and punitive damages and/or rescission of the barge purchase contracts. Independent experts investigating the claims have expressed the opinion that technical arguments presented by the plaintiffs in this litigation are without merit. The Company and TMP are defending these cases vigorously. As of September 30, 2004, one of the plaintiffs owes TMP approximately $8.9 million related to contracts for barges not involved in the litigation. TMP has filed suit for collection of the past due amount.

     In a proceeding unrelated to the foregoing litigation, the Company and TMP filed a declaratory judgment action petitioning the Court to declare the Company’s and TMP’s obligations related to allegations of certain barge owners as to exterior coatings and coatings application on 65 tank barges and TMP’s rights and remedies relative to an insurance policy in which TMP was named as an additional insured (which policy is applicable to the coatings on the 65 barges). On December 9, 2003, the barge owners filed a response proceeding to the declaratory judgment action claiming actual damages of $6.5 million and

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punitive damages of $10 million.

     A subsidiary of the Company, Transit Mix Concrete and Materials Company, Inc., is named as a defendant in a case involving the death of an employee of an independent contractor following an accident that occurred while the decedent was working at a Company owned facility. Following a jury verdict in favor of the plaintiff, the presiding judge entered a final judgment in the amount of $38.1 million (inclusive of fees, costs, and judgment interest). This case has been appealed by Transit Mix and its insurers. Management believes liability in this case, if any, exceeding $3.0 million, will be covered by insurance.

     The Company is also involved in other claims and lawsuits incidental to its business. Based on information currently available, it is management’s opinion that the ultimate outcome of all current litigation and other claims, including settlements, in the aggregate will not have a material adverse effect on the Company’s overall financial condition for purposes of financial reporting. However, resolution of certain claims or lawsuits by settlement or otherwise could have a significant impact on the operating results of the reporting period in which such resolution occurs.

     The Company is subject to federal, state, local, and foreign laws and regulations relating to the environment and to the workplace. The Company believes that it is currently in substantial compliance with such laws and regulations.

     The Company is involved in various proceedings relating to environmental matters. The Company has reserved $12.6 million to cover probable and estimable liabilities of the Company with respect to investigation and remedial response to such matters, taking into account currently available information and the Company’s contractual rights to indemnification. However, estimates of future remedial response costs are necessarily imprecise. Accordingly, there can be no assurance that the Company will not become involved in future litigation or other proceedings or, if the Company were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to the Company.

Note 11: Financial Statements for Guarantors of the Senior Notes

     On March 10, 2004, $300,000,000 of Senior Notes due 2014 were issued by Trinity Industries, Inc. (Parent) which includes the corporate operations and certain operations of the Construction Products Group and the Industrial Products Group. The Senior Notes are fully and unconditionally and jointly and severally guaranteed by certain of Trinity’s wholly owned subsidiaries: Transit Mix Concrete & Material Company, Trinity Industries Leasing Company, Trinity Marine Products, Inc., Trinity Rail Group, LLC, Thrall Trinity Freight Car, Inc., Trinity Tank Car, Inc., and Trinity Rail Components and Repair, Inc. No other subsidiaries guarantee the Senior Notes. As of September 30, 2004, assets held by the non guarantor subsidiaries include $44.4 million of restricted assets that are not available for distribution to the Parent, $57.7 million of assets securing certain debt held by the non guarantor subsidiaries, and $254.2 million of assets located in foreign locations.

Condensed Consolidating Statements of Income for the Three Months Ended September 30, 2004

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Condensed Consolidating Statements of Income for the Nine Months Ended September 30, 2004

Condensed Consolidating Statements of Income for the Three Months Ended September 30, 2003

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Condensed Consolidating Statements of Income for the Nine Months Ended September 30, 2003