TRINITY INDUSTRIES INC

Segment Performance

I will now highlight segment performance for the quarter, beginning with the Railcar Leasing and Services segment, which includes leasing, maintenance, and digital and logistics services.

Leasing and Services

The Leasing and Services business remains the foundation of Trinity’s earnings stability. Full year revenues increased 5.5% year over year, driven by higher lease rates and net fleet growth. Net lease fleet investment totaled $350 million at the high end of our guidance range, and we used the secondary market effectively as both a buyer and a seller to strategically grow and strengthen the composition of our lease fleet.

Segment operating profit increased 53% year over year, supported by the railcar partnership restructuring we completed with Napier Park in December, recording a $194 million non-cash gain in the segment. Additionally, we recorded $56 million in gains on railcar sales in the fourth quarter, resulting in a full year gain of $91 million.

Fleet utilization remained strong at 97.1% with renewal success of 73% in the fourth quarter. While the Future Lease Rate Differential, or FLRD, moderated to 6.0% as renewal growth normalized, renewing rates were 27% higher than expiring rates. We believe there is still significant room for lease rate expansion and remain very positive about this business.

Eric will walk through the financial impacts of our recently completed railcar partnership restructuring, but I did want to highlight the change in fleet composition. The transaction simplified our ownership structure, resulting in approximately 17,100 railcars removed from the partially-owned railcar category. We assumed full ownership of 6,235 railcars. The remaining railcars moved from partially-owned to investor-owned, which will reduce reported revenue and operating profit, but this impact is largely offset by a corresponding reduction in minority interest. The restructuring simplified our ownership structure, increased transparency, and improved earnings, while maintaining economic value.

Rail Products

Rail Products delivered a full year operating margin of 5.2%, within guidance, despite deliveries declining 46%. Cost discipline, automation, and workforce actions enabled profitability in a low-volume environment. Additionally, the headcount rationalization decisions we made in 2025 have right-sized the organization for the current reality and allow us to maintain profitability. With an aging fleet and continued net retirements, we expect demand to return over time allowing meaningful margin expansion as volumes recover.

In the fourth quarter, we recorded a one-time credit loss related to a customer receivable within Rail Products. This charge was included in SE&A and reduced the Rail Products Group operating margin by 190 basis points for the quarter. This was an isolated incident and not reflective of ongoing performance.