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Trinity Industries, Inc. (TRN)
F4Q09 (Qtr End 12/31/09) Earnings Call
February 18, 2010 11:00 am ET
James E. Perry – Vice President, Finance & Treasurer
Timothy R. Wallace – Chairman, President & Chief Executive Officer
D. Stephen Menzies – Senior Vice President & Group President of TrinityRail
William A. McWhirter II – Senior Vice President & Chief Financial Officer
Steve Barger – KeyBanc Capital Markets
John Mims – BB&T Capital Markets
Alexander Blanton – Ingalls & Snyder
John Parker – Jefferies & Co.
Marty Pollack – NWQ Investment Management Co
Patrick McGlinchey – Sidoti & Company
Previous Statements by TRN
» Trinity Industries Inc. Q3 2009 Earnings Call Transcript
» Trinity Industries Inc. Q2 2009 Earnings Call Transcript
» Trinity Industries, Inc. Q1 2009 Earnings Call Transcript
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.
And now it is my pleasure to turn the conference over to James Perry, Vice President, Finance and Treasurer of Trinity Industries. Please go ahead.
James E. Perry
Thank you, Tasha. Good morning from Dallas, Texas, and welcome to the Trinity Industries fourth quarter 2009 results conference call. I am James Perry, Vice President, Finance and Treasurer for Trinity. Thank you for joining us today.
In addition to me, you will hear today from Tim Wallace, Chairman, Chief Executive Officer and President; Steve Menzies, Senior Vice President and Group President of the Rail Group; and Bill McWhirter, Senior Vice President and Chief Financial Officer. Following their comments, we will move to the Q&A session. Mary Henderson, our Corporate Controller is also in the room with us.
A replay of this conference call will be available starting one hour after the conference call ends today through midnight on Thursday, February 25. The replay number is 402-220-0120. Replay of this broadcast will also be available on our website located at www.trin.net.
On December 31, 2009, we had total borrowings of $1.85 billion. Borrowings at the corporate level were $450 million of convertible subordinated notes, $201.5 million of senior notes, and $2.7 million of other indebtedness. We had no borrowings under our $425 million revolver.
The leasing company’s debt included $1.17 billion of debt under long-term financing and $141.4 million outstanding under our $475 million railcar leasing warehouse facility for total leasing company debt of $1.31 billion at December 31, 2009. This compares to a book value for total leasing equipment of $2.85 billion, resulting in total leasing debt to total equipment on lease of 46%.
At December 31, we had $333.6 million available under our railcar leasing warehouse facility and $335.4 million available under our revolving credit facility after accounting for $89.6 million in letters of credit. Combined with our unrestricted cash and short-term marketable securities balance of $681.8 million, our total liquidity was in excess of $1.35 billion at December 31, 2009.
During the next 12 months through December 31 of 2010, our scheduled debt repayment commitment totaled $62.6 million. Our next debt maturity or renewal occurs in early 2011, when we will revisit our leasing warehouse facility. Details of future commitments and our debt can be found in our 10-K.
In today’s call, you’ll hear us refer to the non-GAAP term EBITDA, a reconciliation of which was provided in our news release yesterday. For the fourth quarter, EBITDA was $100.3 million, and for 2009 EBITDA totaled $462.1 million. We remained well positioned with a strong balance sheet and solid cash flows. We've been very focused on these items to ensure we are positioned to capitalize on business opportunities as they arrive.
On January 1, 2010, the company adopted the provisions of a new accounting pronouncement requiring the inclusion of the consolidated financial statements of TRIP Holdings and its subsidiaries in Trinity's consolidated financial statements. As a remainder TRIP is railcar leasing company formed in 2007. They purchased $1.285 billion of railcars from Trinity over a two year period.
Trinity is currently a 28% equity owner of TRIP and serves as the manager of the railcar portfolio. You will see this inclusion beginning with the March 31, 2010 Form 10-Q. At December 31, 2009, TRIP had $1.056 billion in debt and has approximately 14,740 railcars with the book value of $1.227 billion. The debt is a short-term facility with interest expense of approximately $48 million in 2010.
The debt will begin amortizing in June of 2011, unless refinanced before then. Refinancing TRIP is just one option available to the equity members and we will be working with them over the next year to determine the best solution for TRIP’s continued success. In note six of our 10-K that we will file after this conference call, we provide the estimated condensed pro forma effects on Trinity’s consolidated balance sheet as of December 31, 2009.
Neither the activities of TRIP nor our role in TRIP created this change of presentation. It was simply due to new accounting pronouncements. TRIP’s debt remains non-recourse to Trinity and has no impact on our debt covenants. Bill will provide more detail on the impact of TRIP consolidation in his remarks.