Trinity Industries, Inc.

Good day and welcome to the Trinity Industries first quarter ended March 31st, 2026 results conference call. All participants will be in listen-only mode. After today's presentation there will be an opportunity to ask questions by pressing star and 1 on your telephone. For operator assistance please press star and 0. Please note today's event is being recorded. Before we get started, let me remind you that today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to estimates, expectations, intentions and predictions of future financial performance. Statements that are not historical facts are forward-looking. Participants are directed to Trinity's Form 10-K and other SEC filings for a description of certain of the business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. I would now like to turn the conference over to Leanne Mann, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone. We appreciate you joining us for the company's first quarter 2026 Financial Results Conference Call. Our prepared remarks will include comments from Gene Savage, Trinity's Chief Executive Officer and President, and Eric Marchetto, the company's Chief Financial Officer. We will hold a Q&A session following the prepared remarks from our leaders. During the call today, we will reference certain non-GAAP financial metrics. The reconciliations of the non-GAAP metrics to comparable GAAP measures are provided in the appendix of the quarterly investor slides, which are accessible on our investor relations website at www.tren.net. These slides are under the events and presentations portion of the website, along with the first quarter earnings conference call event link. A replay of today's call will be available after 10.30 a.m. Eastern Time through midnight on May 7, 2026. Replay information is available under the Events and Presentations page on our Investor Relations website. It is now my pleasure to turn the call over to Jean.

Thank you, Leanne, and good morning, everyone. We grew earnings per share year over year 10%, and the quarter where revenue was down 16%. That's the operating leverage we've been building toward, and it shows up in a 24.6% adjusted return on equity over the last 12 months. Cash flow from continuing operations was $100 million. The business is performing the way we designed it to perform. Before I get into results, I want to recognize the team for closing a transaction after the quarter closed related to our rail car investment partnership with Napier Park. As a result of the transaction, approximately 6,100 rail cars moved from our partially owned fleet to investor-owned fleet, and we took an 11.2% limited partnership interest in the Napier Park entity that owns the majority of Napier Park's rail car holdings. We expect to record a non-cash pre-tax gain of approximately $130 million in the second quarter related to this transaction. This transaction highlights the embedded value of our fleet and is another step in simplifying our balance sheet. Based on strong first quarter performance and our outlook for the balance of the year, we are raising and tightening our full year EPS guidance from a previous range of $1.85 to $2.10 to a new range of $2.20 to $2.40. At the midpoint, this represents a 16% increase in our EPS expectations. Portfolio sales are an integral part of how our leasing platform creates value, and we now expect a higher level of gain on sale activity this year than we originally planned. We expect full year gains to be in the range of $160 million to $180 million. which includes $22 million in the first quarter and approximately $130 million from the rail car investment partnership that we will book in the second quarter. Now let me walk you through what we're seeing in the market. The rail economy is improving. Industrial production grew at an annual rate of 2.4% in the first quarter. The manufacturing PMI, a key monthly economic indicator, was above 50 for three straight months. That's the first back-to-back positive reading in over 40 months, and has been expanding for 17 straight months. Inquiries have been trending up since the start of the year. Furthermore, rail cars and storage moved below 20% as the industry fleet continues to contract and car loads rise. The picture isn't all clean, however. Inflation is still elevated, and employment has flattened. That continues to weigh on consumer-driven markets, particularly autos and intermodal, and tariff uncertainty remains. But the direction is the right one, and we're positioned for it. I'll take you through both segments, starting with leasing and services. Leasing performed. These rates were higher, utilization was higher, and the segment delivered a 37.9% operating margin in the quarter. Revenue was down year over year, and the reason is structural. We closed a railcar partnership exchange in the fourth quarter, which reduced our consolidated fleet. Our own fleet ended the quarter at 101,960 railcars. down about 7% year-over-year. But the number that matters strategically is our combined owned and investor-owned fleet at 146,670 rail cars, which is up 1.6% year-over-year. We are growing the platform and lease rates continue to rise. Renewal rates were 6.6% above expiring rates in the quarter. We continue to invest. Net fleet investment was $68 million in the quarter. Over the last six years, we've added more than 18,000 new builds and over 14,000 cars from the secondary market. We were active in the secondary market again this quarter, completing $83 million of lease portfolio sales. Fleet utilization improved to 97.3%. Renewal success was 60%, and higher assignment activity allowed us to place cars with new customers at higher rates. The future lease rate differential, or FLRD, was a positive 1.2%. The FLRD has been positive for 19 consecutive quarters, allowing for continuing growth in lease rates and leasing revenues. The average lease rate continued to increase quarter over quarter and year over year. Rail products is where the cost work shows up. We delivered 1,970 rail cars at a 7.4% operating margin. On these volumes, that margin is a proof point. It reflects favorable Q1 mix. But more importantly, it reflects several years of right-sizing, automation, and break-even reduction in this business. The cost structure has changed. With the remaining mix of car types to be built, we expect full-year rail products group margins to average 5% to 6%. We received orders for 1,660 new rail cars. Both orders and deliveries remain within our usual market share range. Inquiries are accelerating, and we're ready to ramp up when inquiries convert to orders. Backlog stands at $1.6 billion, just under half of the industry backlog. We're not going to chase volume at the wrong price. When the market turns, we'll be there. Here's where we stand. We did what we said we'd do this quarter. Margins held up. The fleet is in good shape at 97.3% utilization. Lease rates moved in our direction, and rail products delivered a 7.4% operating margin on lower volumes, which is evidence that the cost work we've done over the past several years is paying off. The order book is the watch item. Inquiries are picking up, and we're ready when customers are ready. I'm proud of how this team is executing, and I'm confident in where we're headed. Eric will take you through the financials and our guidance for the rest of the year.