UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 31,~~JUNE 30, 2004


[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~_______~~to ~~__________~~. ___to ___.

Commission File Number 1-6903

Trinity Industries, Inc.

(Exact name of registrant as specified in its charter)


Delaware (State of Incorporation)		75-0225040 (I.R.S. Employer Identification No.)


2525 Stemmons Freeway
Dallas, Texas (Address of principal executive offices)		75207-2401 (Zip Code)

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 or15(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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No []

At ~~April~~July 30, 2004 there were ~~47,011,368~~47,134,910 shares of the Registrant’s common stock outstanding.

Item 11.. Financial Statements

Trinity Industries, Inc. and Subsidiaries
Consolidated Statements of Operations


	Three Months Ended March 31,						Three Months Ended June 30,
	2004			2003			2004			2003
	(unaudited)						(unaudited)
	(in millions except per share amounts)						(in millions except per share amounts)
Revenues	$	454.9		$	289.1		$	548.7		$	365.8
Operating costs:
Cost of revenues		425.1			266.4			491.4			320.5
Selling, engineering and administrative expenses		36.3			34.1			43.0			34.9

		461.4			300.5			534.4			355.4

Operating loss		(6.5	)		(11.4	)
Operating profit								14.3			10.4
Other (income) expense:
Interest income		(0.2	)		(0.1	)		(0.5	)		(0.2	)
Interest expense		10.1			9.5			10.9			8.4
Other, net		0.1			(0.8	)		(1.6	)		(2.6	)

		10.0			8.6			8.8			5.6

Loss before income taxes		(16.5	)		(20.0	)
Provision (benefit) for income taxes		(5.7	)		(5.5	)
Income before income taxes								5.5			4.8
Provision for income taxes								1.9			1.3

Net loss		(10.8	)		(14.5	)
Net income								3.6			3.5
Dividends on Series B preferred stock		(0.8	)		—			(0.7	)		—

Net loss applicable to common shareholders	$	(11.6	)	$	(14.5	)
Net income applicable to common shareholders							$	2.9		$	3.5

Net loss applicable to common shareholders per common share:
Net income applicable to common shareholders per common share:
Basic	$	(0.25	)	$	(0.32	)	$	0.06		$	0.08

Diluted	$	(0.25	)	$	(0.32	)	$	0.06		$	0.08

Weighted average number of shares outstanding:
Basic		46.2			45.5			46.4			45.5
Diluted		46.2			45.5			47.4			45.6

Trinity Industries, Inc. and Subsidiaries
Consolidated ~~Balance Sheets~~Statements of Operations

March 31, December 31,
2004
2003
(unaudited)
(in millions)
Assets

Cash and cash equivalents $ 151.3 $ 46.0
Receivables, net of allowance 235.3 198.1
Inventories:
Raw materials and supplies 155.5 158.4
Work in process 76.8 60.0
Finished goods 43.5 39.6

275.8 258.0
Property, plant and equipment, at cost 1,624.2 1,627.1
Less accumulated depreciation (689.8 ) (681.9 )

934.4 945.2
Goodwill 420.2 415.1
Other assets 149.2 145.5

$ 2,166.2 $ 2,007.9

Liabilities and Stockholders’ Equity

Accounts payable and accrued liabilities $ 444.9 $ 460.2
Debt:
Recourse 475.6 298.5
Non-recourse 108.6 96.7

584.2 395.2
Deferred income 30.4 32.2
Other liabilities 52.7 58.7

1,112.2 946.3
Series B redeemable convertible preferred stock, no par value, $0.1 liquidation value 57.9 57.8
Stockholders’ equity:
Preferred stock – 1.5 shares authorized and unissued — —
Common stock — shares issued and outstanding at March 31, 2004 - 50.9; at December 31, 2003 - 50.9 50.9 50.9
Capital in excess of par value 431.5 434.7
Retained earnings 635.5 649.9
Accumulated other comprehensive loss (27.6 ) (27.3 )
Treasury stock (4.0 shares at March 31, 2004 and 4.3 shares at December 31, 2003) (94.2 ) (104.4 )

996.1 1,003.8

$ 2,166.2 $ 2,007.9


	Six Months Ended June 30,
	2004			2003
	(unaudited) (in millions except per share amounts)
Revenues	$	1,003.6		$	654.9
Operating costs:
Cost of revenues		916.5			586.9
Selling, engineering and administrative expenses		79.3			69.0

		995.8			655.9

Operating profit (loss)		7.8			(1.0	)
Other (income) expense:
Interest income		(0.7	)		(0.3	)
Interest expense		21.0			17.9
Other, net		(1.5	)		(3.4	)

		18.8			14.2

Loss before income taxes		(11.0	)		(15.2	)
Provision (benefit) for income taxes		(3.8	)		(4.2	)

Net loss		(7.2	)		(11.0	)
Dividends on Series B preferred stock		(1.5	)		—

Net loss applicable to common shareholders	$	(8.7	)	$	(11.0	)

Net loss applicable to common shareholders per common share:
Basic	$	(0.19	)	$	(0.24	)

Diluted	$	(0.19	)	$	(0.24	)

Weighted average number of shares outstanding:
Basic		46.3			45.5
Diluted		46.3			45.5

See accompanying notes to consolidated financial statements.

Trinity Industries, Inc. and Subsidiaries
Consolidated ~~Statements Cash Flows~~Balance Sheets

Three Months Ended March 31,
2004
2003
(unaudited)
(in millions)
Operating activities:
Net loss $ (10.8 ) $ (14.5 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 22.1 21.8
Deferred income taxes (5.7 ) (1.8 )
Gain on sale of property, plant, equipment and other assets (0.6 ) (1.4 )
Other 0.5 (0.6 )
Changes in assets and liabilities:
(Increase) decrease in receivables (37.5 ) 15.4
Decrease in tax receivable — 46.2
(Increase) decrease in inventories (16.8 ) 5.7
(Increase) decrease in other assets (6.8 ) 10.9
(Decrease) increase in accounts payable and accrued liabilities (15.2 ) 4.8
(Decrease) increase in other liabilities (0.9 ) 1.1

Net cash (required) provided by operating activities (71.7 ) 87.6

Investing activities:
Proceeds from sale of property, plant, equipment and other assets 4.1 2.5
Capital expenditures — lease subsidiary (31.8 ) (65.5 )
Capital expenditures — other (5.0 ) (2.9 )
Payment for purchase of acquisitions, net of cash acquired (15.7 ) —
Sale of investment in equity trust 8.5 —

Net cash required by investing activities (39.9 ) (65.9 )

Financing activities:
Payments to retire debt (177.6 ) (67.5 )
Proceeds from issuance of debt 392.2 74.8
Proceeds from issuance of common stock, net 6.5 —
Dividends paid to common shareholders (2.8 ) (2.8 )
Dividends paid to preferred shareholders (1.4 ) —

Net cash provided by financing activities 216.9 4.5

Net increase in cash and cash equivalents 105.3 26.2
Cash and cash equivalents at beginning of period 46.0 19.1

Cash and cash equivalents at end of period $ 151.3 $ 45.3


	June 30,			December 31,
	2004			2003
	(unaudited)			(as reported)
	(in millions)
Assets
Cash and cash equivalents	$	187.6		$	46.0
Receivables, net of allowance		241.9			198.1
Inventories:
Raw materials and supplies		181.6			158.4
Work in process		81.9			60.0
Finished goods		48.9			39.6

		312.4			258.0
Property, plant and equipment, at cost		1,622.8			1,627.1
Less accumulated depreciation		(690.1	)		(681.9	)

		932.7			945.2
Goodwill		420.2			415.1
Other assets		146.7			145.5

	$	2,241.5		$	2,007.9

Liabilities and Stockholders’ Equity
Accounts payable and accrued liabilities	$	466.7		$	460.2
Debt:
Recourse		475.7			298.5
Non-recourse		155.1			96.7

		630.8			395.2
Deferred income		30.9			32.2
Other liabilities		56.5			58.7

		1,184.9			946.3
Series B redeemable convertible preferred stock, no par value, $0.1 liquidation value		58.0			57.8
Stockholders’ equity:
Preferred stock — 1.5 shares authorized and unissued		—			—
Common stock — shares issued and outstanding at June 30, 2004 - 50.9; at December 31, 2003 —50.9		50.9			50.9
Capital in excess of par value		430.0			434.7
Retained earnings		635.5			649.9
Accumulated other comprehensive loss		(27.5	)		(27.3	)
Treasury stock (3.8 shares at June 30, 2004 and 4.3 shares at December 31, 2003)		(90.3	)		(104.4	)

		998.6			1,003.8

	$	2,241.5		$	2,007.9

Interest paid for the three months ended March 31, 2004 and 2003 was $10.7 and $11.5, respectively. Taxes paid, net of refunds received, were $4.0 for the three months ended March 31, 2004 and taxes received, net of payments made were $47.3 for the three months ended March 31, 2003.

See accompanying notes to consolidated financial statements.

Trinity Industries, Inc. and Subsidiaries
Consolidated ~~Statement~~Statements Cash Flows


	Six Months Ended June 30,
	2004			2003
	(unaudited)
	(in millions)
Operating activities:
Net loss	$	(7.2	)	$	(11.0	)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization		43.6			42.8
Deferred income taxes		(3.8	)		7.9
Gain on sale of property, plant, equipment and other assets		(3.0	)		(4.4	)
Other		(4.5	)		1.7
Changes in assets and liabilities:
(Increase) decrease in receivables		(44.1	)		(40.5	)
Decrease in tax receivable		—			45.4
(Increase) decrease in inventories		(53.4	)		(5.8	)
(Increase) decrease in other assets		(5.3	)		13.0
Increase in accounts payable and accrued liabilities		6.0			23.5
Increase in other liabilities		1.0			14.6

Net cash (required) provided by operating activities		(70.7	)		87.2

Investing activities:
Proceeds from sale of property, plant, equipment and other assets		47.2			31.9
Capital expenditures — lease subsidiary		(77.1	)		(112.6	)
Capital expenditures — other		(13.3	)		(8.6	)
Payment for purchase of acquisitions, net of cash acquired		(15.7	)		—
Sale of investment in equity trust .		8.5			—

Net cash required by investing activities		(50.4	)		(89.3	)

Financing activities:
Issuance of redeemable preferred stock		—			57.6
Payments to retire debt		(188.5	)		(105.2	)
Proceeds from issuance of debt		449.7			108.2
Proceeds from issuance of common stock, net		8.5			—
Dividends paid to common shareholders		(5.6	)		(5.7	)
Dividends paid to preferred shareholders		(1.4	)		—

Net cash provided by financing activities		262.7			54.9

Net increase in cash and cash equivalents		141.6			52.8
Cash and cash equivalents at beginning of period		46.0			19.1

Cash and cash equivalents at end of period	$	187.6		$	71.9

Interest paid for the six months ended June 30, 2004 and 2003 was $12.1 and $15.9, respectively. Taxes paid, net of ~~Stockholders’ Equity~~

Common Common Capital Accumulated
Shares Stock in Excess Other Treasury Total
(100,000,000 $1.00 Par of Par Retained Comprehensive Treasury Stock at Stockholders’
Authorized)
Value
Value
Earnings
Loss
Shares
Cost
Equity
(unaudited) (in millions except share and per share data)
Balance at December 31, 2003 50,940,351 $ 50.9 $ 434.7 $ 649.9 $ (27.3 ) (4,260,860 ) $ (104.4 ) $ 1,003.8
Net loss — — — (10.8 ) — — — (10.8 )
Currency translation adjustments — — — — 0.1 — — 0.1
Unrealized loss on derivative financial instruments — — — — (0.4 ) — — (0.4 )

Comprehensive net loss (11.1 )
Cash dividends ($0.06 per common share) — — — (2.8 ) — — — (2.8 )
Dividend on Series B preferred stock — — — (0.8 ) — — — (0.8 )
Restricted shares issued — — (0.1 ) — — 20,800 0.6 0.5
Stock options exercised — — (3.1 ) — — 277,921 9.6 6.5

Balance at March 31, 2004 50,940,351 $ 50.9 $ 431.5 $ 635.5 $ (27.6 ) (3,962,139 ) $ (94.2 ) $ 996.1

refunds received, were $7.0 for the six months ended June 30, 2004 and taxes received, net of payments made were $45.5 for the six months ended June 30, 2003.

See accompanying notes to consolidated financial statements.

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


	Common		Common		Capital						Accumulated
	Shares		Stock		in Excess						Other						Treasury			Total
	(100,000,000		$1.00 Par		of Par			Retained			Comprehensive			Treasury			Stock at			Stockholders'
	Authorized)		Value		Value			Earnings			Loss			Shares			Cost			Equity
	(unaudited)
	(in millions except share and per share data)
Balance at December 31, 2003		50,940,351	$	50.9	$	434.7		$	649.9		$	(27.3	)		(4,260,860	)	$	(104.4	)	$	1,003.8
Net loss		—		—		—			(7.2	)		—			—			—			(7.2	)
Currency translation adjustments		—		—		—			—			(1.0	)		—			—			(1.0	)
Unrealized loss on derivative financial instruments		—		—		—			—			0.8			—			—			0.8

Comprehensive net loss																					(7.4	)
Cash dividends ($0.12 per common share)		—		—		—			(5.7	)		—			—			—			(5.7	)
Dividends on Series B preferred stock.		—		—		—			(1.5	)		—			—			—			(1.5	)
Restricted shares issued.		—		—		(0.1	)		—			—			20,800			0.7			0.6
Stock options exercised.		—		—		(4.3	)		—			—			371,850			12.6			8.3
Other		—		—		(0.3	)		—			—			25,425			0.8			0.5

Balance at June 30, 2004		50,940,351	$	50.9	$	430.0		$	635.5		$	(27.5	)		(3,842,785	)	$	(90.3	)	$	998.6

See accompanying notes to consolidated financial statements.

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 ~~March 31,~~June 30, 2004 and the results of operations for the three-month and six-month periods ended June 30, 2004 and 2003, and cash flows for the ~~three-month period~~six-month periods ended ~~March 31,~~June 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 ~~period~~and six-month periods ended ~~March 31,~~June 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 six months ended ~~March 31,~~June 30, 2004 and 2003 are shown in the accompanying table (in millions).

Three Months Ended
March 31,
2004
2003
Pro forma
Net loss applicable to common shareholders, as reported $ (11.6 ) $ (14.5 )
Add: Stock compensation expense related to restricted stock 0.5 0.5
Deduct: Total stock based employee compensation expense determined under fair value based method for all awards, net of related income tax effects (1.2 ) (1.7 )

Pro forma net loss applicable to common shareholders $ (12.3 ) $ (15.7 )

Pro forma net loss applicable to common shareholders per diluted share $ (0.27 ) $ (0.35 )

Net loss applicable to common shareholders per diluted share - as reported $ (0.25 ) $ (0.32 )

Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Pro forma
Net income (loss) applicable to common shareholders, as reported . $ 2.9 $ 3.5 $ (8.7 ) $ (11.0 )
Add: Stock compensation expense related to restricted stock 0.8 0.4 1.3 0.9
Deduct: Total stock based employee compensation expense determined under fair value based method for all awards, net of related income tax effects (1.4 ) (1.6 ) (2.6 ) (3.3 )

Pro forma net income (loss) applicable to common shareholders $ 2.3 $ 2.3 $ (10.0 ) $ (13.4 )

Pro forma net income (loss) applicable to common shareholders per diluted share $ 0.05 $ 0.05 $ (0.22 ) $ (0.29 )

Net income (loss) applicable to common shareholders per diluted share — as reported $ 0.06 $ 0.08 $ (0.19 ) $ (0.24 )

adjusted for dividends on the Series B preferred stock in 2004. The difference between the denominator in the basic calculation and the denominator in the diluted calculation for the three months ended June 30, 2004 and June 30, 2003 was 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 ~~2004~~all periods presented and therefore not considered in ~~average shares outstanding in~~ the diluted net ~~loss applicable~~income (loss) per common share calculation.

Reclassifications

Certain reclassifications have been made to ~~common shareholders calculation.~~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 ~~guardrail and~~ safety products, concrete and aggregate, 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 ~~March 31,~~June 30, 2004 (in millions)


																				Operating
	Revenues								Operating Profit			Revenues								Profit
	Outside		Intersegment			Total			(Loss)			Outside		Intersegment			Total			(Loss)
Rail Group	$	225.2	$	35.7		$	260.9		$	(3.6	)	$	224.6	$	49.0		$	273.6		$	0.9
Construction Products Group		120.0		0.1			120.1			2.0			153.2		0.5			153.7			14.5
Inland Barge Group		43.3		—			43.3			(5.7	)		64.1		—			64.1			(5.4	)
Industrial Products Group		30.4		1.4			31.8			0.8			34.3		1.1			35.4			3.9
Railcar Leasing and Management Services Group		35.1		—			35.1			9.6			71.7		—			71.7			14.4
All Other		0.9		6.7			7.6			1.3			0.8		7.5			8.3			(1.6	)
Corporate		—		—			—			(7.6	)		—		—			—			(9.0	)
Eliminations		—		(43.9	)		(43.9	)		(3.3	)		—		(58.1	)		(58.1	)		(3.4	)

Consolidated Total	$	454.9	$	—		$	454.9		$	(6.5	)	$	548.7	$	—		$	548.7		$	14.3

Six Months Ended June 30, 2004 (in millions)

Operating
Revenues Profit
Outside Intersegment Total (Loss)
Rail Group $ 449.8 $ 84.7 $ 534.5 $ (2.7 )
Construction Products Group 273.2 0.6 273.8 16.5
Inland Barge Group 107.4 — 107.4 (11.1 )
Industrial Products Group 64.7 2.5 67.2 4.7
Railcar Leasing and Management Services Group 106.8 — 106.8 24.0
All Other 1.7 14.2 15.9 (0.3 )
Corporate — — — (16.6 )
Eliminations — (102.0 ) (102.0 ) (6.7 )

Consolidated Total $ 1,003.6 $ — $ 1,003.6 $ 7.8

Six Months Ended June 30, 2003 (in millions)

Operating
Revenues Profit
Outside Intersegment Total (Loss)
Rail Group $ 190.8 $ 113.0 $ 303.8 $ (16.4 )
Construction Products Group 235.6 0.2 235.8 18.4
Inland Barge Group 87.3 — 87.3 0.2
Industrial Products Group 55.4 1.6 57.0 1.6
Railcar Leasing and Management Services Group 82.8 — 82.8 21.2
All Other 3.0 12.0 15.0 (3.0 )
Corporate — — — (15.4 )
Eliminations — (126.8 ) (126.8 ) (7.6 )

Consolidated Total $ 654.9 $ — $ 654.9 $ (1.0 )

Note 3. Property, Plant and Equipment

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


	March 31,			December 31,			June 30,			December 31,
	2004			2003			2004			2003
Corporate/Manufacturing:
Property, plant and equipment	$	869.8		$	868.6		$	860.7		$	868.6
Less accumulated depreciation		(572.2	)		(569.0	)
Less accumulated depreciation.								(571.6	)		(569.0	)

		297.6			299.6			289.1			299.6

Leasing:
Property, plant and equipment		754.4			758.5			762.1			758.5
Less accumulated depreciation		(117.6	)		(112.9	)
Less accumulated depreciation.								(118.5	)		(112.9	)

		636.8			645.6			643.6			645.6

	$	934.4		$	945.2		$	932.7		$	945.2

The Company has a deposit agreement with Altos Hornos de Mexico, SA de C.V. (“AHMSA”) that provides ~~for~~ funds ~~to be deposited~~on deposit with AHMSA that are ~~then~~ used along with other funds from the Company to purchase steel from AHMSA. As of ~~March 31,~~June 30, 2004, total funds on deposit including interest due, ~~amounted to~~which will be recognized as income on a cash basis, were approximately ~~$19.1~~$13.5 million. Since May 1999 AHMSA has been operating under a judicial declaration of suspension of payments, which under applicable Mexican law, allows companies in Mexico to (1) seek a debt restructuring ~~agreement~~agreements with their creditors in an orderly fashion; (2) continue their operations; and (3) avoid declaration of bankruptcy and liquidation of assets. The Company’s understanding of Mexican law is that all funds on deposit are required to be returned to the Company regardless of whether the supplier is able to operate under the declaration of suspension of payments. Trinity reduced ~~$5.0~~$5.6 million of this deposit through purchases in the quarter ended ~~March 31,~~June 30, 2004. The timing of future reductions of the deposit balance will depend on the rate of future steel ~~purchases.~~purchases from AHMSA.

In March 2004, the Company issued ~~through a private offering,~~ $300 million aggregate principal amount 6 1/2% senior notes (Senior Notes) due ~~2014.~~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,~~debt; make certain distributions, investments and other restricted ~~payments, sell assets,~~payments; create certain ~~liens and merge, consolidate~~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 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 during the first quarter of 2004 bear interest at LIBOR plus 1.75%.~~ 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 current credit rating of the Company not to exceed $25 million annually. At ~~March 31,~~June 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 a $300 million non-recourse warehouse facility to finance or refinance railcars acquired or owned by TILC. ~~While the~~The warehouse facility is due

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 ~~end~~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 ~~March 31,~~June 30, 2004 are as follows (in millions):


	Remaining												Remaining
	nine months of												six months of
	2004		2005		2006		2007		2008		Thereafter		2004		2005		2006		2007		2008		Thereafter
Recourse:
Corporate/Manufacturing	$	0.8	$	0.8	$	0.3	$	0.2	$	0.1	$	303.4	$	0.7	$	0.9	$	0.4	$	0.2	$	0.1	$	303.4
Leasing – equipment trust certificates (Note 7)		—		39.9		10.3		43.4		14.2		62.2
Leasing — equipment trust certificates (Note 7).														—		39.9		10.3		43.4		14.2		62.2
Non-recourse:
Leasing –warehouse facility (Note 7)		1.3		71.5		35.8		—		—		—
Leasing —warehouse facility (Note 7)														0.5		103.1		51.5		—		—		—

Total principal payments	$	2.1	$	112.2	$	46.4	$	43.6	$	14.3	$	365.6	$	1.2	$	143.9	$	62.2	$	43.6	$	14.3	$	365.6

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

Three Months Ending
March 31,
2004
2003
Statement of Operations

Revenues $ 35.1 $ 28.5
Operating profit 9.6 8.6
Interest expense 4.6 4.2

Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Statement of Operations Revenues $ 71.7 $ 54.3 $ 106.8 $ 82.8
Operating Profit $ 14.4 $ 12.6 $ 24.0 $ 21.2
     Interest expense, which is not a component of operating profit, was $4.7 and $9.3 for the three and six month periods ended June 30, 2004 and $3.9 and $8.1 for the same periods last year.
     Equipment on lease 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 as of ~~March 31,~~June 30, 2004 are as follows: the remaining ~~nine~~six months of 2004 — ~~$76.1~~$50.7 million; 2005 — ~~$89.4~~$92.8 million; 2006 — ~~$75.3~~$80.0 million; 2007 — ~~$64.1~~$69.4 million; 2008 - - ~~$52.1~~$56.9 million and ~~$305.3~~$312.9 million thereafter. Leasing Group equipment with a net book value of ~~$397.2~~$456.3 million is pledged as collateral for debt.
     The Leasing Group’s debt consists of both recourse and non-recourse debt. See Note 6 for maturities for the debt.
11

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

The Company ~~had no contributions~~contributed $3.6 million to the Company’s defined benefit pension plan for the three and six months ended ~~March 31,~~June 30, 2004 and ~~2003, respectively.~~$0.5 million for the three and six months ended June 30, 2003. Total contributions to the Company’s pension plan in 2004 are ~~currently~~ expected to be approximately $17.5 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. ~~Such~~Absent certification of the class, the four suits involve 30 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 recision 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 ~~March 31,~~June 30, 2004, one of the plaintiffs owes TMP approximately ~~$8.7~~$8.8 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 an action ~~seeking declaration by~~petitioning the Court ofto declare the Company’s and TMP’s (i) obligations related to allegations of certain barge owners as to exterior coatings and coatings application on 65 tank barges and (ii) rights and remedies relative to an insurance policy in which TMP was named as an additional insured and which was 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 punitive damages of $10 million.

A subsidiary of the Company, Transit Mix Concrete and Materials Company, Inc., ~~was~~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 ~~the~~ favor of the plaintiff, the presiding judge entered a final judgment in the amount of ~~$33.9~~$37.4 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 ~~provided reserves amounting to $13.4~~reserved $13.5 million to cover probable and estimable liabilities of the Company with respect to investigations of and remedial response to such ~~investigations and cleanup activities,~~matters, taking into account currently available information and the Company’s contractual rights ofto 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.

1314

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 June 30, 2004, assets held by the non guarantor subsidiaries include $40.2 million of restricted assets that are not available for distribution to the Parent, $207.0 million of assets securing certain debt held by the non guarantor subsidiaries, and $235.2 million of assets located in foreign locations.

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

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Revenues $ 62.9 $ 299.8 $ 197.7 $ (11.7 ) $ 548.7
Operating costs:
Cost of revenues 52.2 265.9 185.0 (11.7 ) 491.4
Selling, engineering and administrative expenses 14.2 18.7 10.1 — 43.0

66.4 284.6 195.1 (11.7 ) 534.4

Operating profit (loss) (3.5 ) 15.2 2.6 — 14.3
Other (income) expense (3.4 ) 0.8 (4.8 ) 16.2 8.8

Income (loss) before income taxes (0.1 ) 14.4 7.4 (16.2 ) 5.5
Provision (benefit) for income taxes (3.7 ) 5.7 (0.1 ) — 1.9

Net income (loss) $ 3.6 $ 8.7 $ 7.5 $ (16.2 ) $ 3.6

Condensed Consolidating Statements of Income for the Six Months Ended June 30, 2004

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Revenues $ 113.6 $ 552.3 $ 358.8 $ (21.1 ) $ 1,003.6
Operating costs:
Cost of revenues 93.1 497.9 346.6 (21.1 ) 916.5
Selling, engineering and administrative expenses 24.6 34.2 20.5 — 79.3

117.7 532.1 367.1 (21.1 ) 995.8

Operating profit (loss) (4.1 ) 20.2 (8.3 ) — 7.8
Other (income) expense 10.2 5.4 (8.9 ) 12.1 18.8

Income (loss) before income taxes (14.3 ) 14.8 0.6 (12.1 ) (11.0 )
Provision (benefit) for income taxes (7.1 ) 6.7 (3.4 ) — (3.8 )

Net loss $ (7.2 ) $ 8.1 $ 4.0 $ (12.1 ) $ (7.2 )

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

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Revenues $ 42.9 $ 153.0 $ 178.1 $ (8.2 ) $ 365.8
Operating costs:
Cost of revenues 31.3 132.0 165.4 (8.2 ) 320.5
Selling, engineering and administrative Expenses 14.8 12.6 7.5 — 34.9

46.1 144.6 172.9 (8.2 ) 355.4

Operating profit (loss) (3.2 ) 8.4 5.2 — 10.4
Other (income) expense (4.2 ) 3.7 (2.7 ) 8.8 5.6

Income (loss) before income taxes 1.0 4.7 7.9 (8.8 ) 4.8
Provision (benefit) for income taxes (2.5 ) 1.4 2.4 — 1.3

Net income (loss) $ 3.5 $ 3.3 $ 5.5 $ (8.8 ) $ 3.5

Condensed Consolidating Statements of Income for the Six Months Ended June 30, 2003

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Revenues $ 93.7 $ 290.3 $ 286.3 $ (15.4 ) $ 654.9
Operating costs:
Cost of revenues 72.4 241.1 288.8 (15.4 ) 586.9
Selling, engineering and administrative Expenses 23.8 27.1 18.1 — 69.0

96.2 268.2 306.9 (15.4 ) 655.9

Operating profit (loss) (2.5 ) 22.1 (20.6 ) — (1.0 )
Other (income) expense 12.5 7.4 (4.8 ) (0.9 ) 14.2

Income (loss) before income taxes (15.0 ) 14.7 (15.8 ) 0.9 (15.2 )
Provision (benefit) for income taxes (4.0 ) 4.3 (4.5 ) — (4.2 )

Net income (loss) $ (11.0 ) $ 10.4 $ (11.3 ) $ 0.9 $ (11.0 )

Condensed Consolidating Balance Sheets as of June 30, 2004

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Assets

Cash and cash equivalents $ 164.3 $ 1.7 $ 21.6 $ — $ 187.6
Receivables, net of allowance 76.1 115.8 50.0 — 241.9
Inventories 34.6 173.7 104.1 — 312.4
Property, plant and equipment, net 53.1 394.5 485.1 — 932.7
Investments in subsidiaries / intercompany receivable (payable), net 1,089.0 (258.2 ) 133.2 (964.0 ) —
Other assets 196.8 353.0 149.5 (132.4 ) 566.9

$ 1,613.9 $ 780.5 $ 943.5 $ (1,096.4 ) $ 2,241.5

Liabilities and Stockholders’ Equity

Accounts payable and accrued liabilities $ 198.6 $ 152.2 $ 115.9 $ — $ 466.7
Deferred income 21.5 0.8 8.6 — 30.9
Other liabilities 32.5 159.1 (2.7 ) (132.4 ) 56.5
Debt 304.7 170.2 155.9 — 630.8
Redeemable convertible preferred stock 58.0 — — — 58.0
Total stockholder’s equity 998.6 298.2 665.8 (964.0 ) 998.6

$ 1,613.9 $ 780.5 $ 943.5 $ (1,096.4 ) $ 2,241.5

Condensed Consolidating Balance Sheets as of December 31, 2003

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Assets

Cash and cash equivalents $ 31.5 $ 1.0 $ 13.5 $ — $ 46.0
Receivables, net of allowance 51.1 97.5 49.5 — 198.1
Inventories 19.8 127.9 110.3 — 258.0
Property, plant and equipment, net 60.0 458.2 427.0 — 945.2
Investments in subsidiaries / intercompany receivable (payable), net 1,050.4 (266.0 ) 168.3 (952.7 ) —
Other assets 194.6 351.7 141.3 (127.0 ) 560.6

$ 1,407.4 $ 770.3 $ 909.9 $ (1,079.7 ) $ 2,007.9

Liabilities and Stockholder’ Equity

Accounts payable and accrued liabilities $ 171.0 $ 154.3 $ 134.9 $ — $ 460.2
Deferred income 18.6 3.1 10.5 — 32.2
Other liabilities 29.0 152.6 4.1 (127.0 ) 58.7
Debt 127.2 170.2 97.8 — 395.2
Redeemable convertible preferred stock 57.8 — — — 57.8
Total stockholder’s equity 1,003.8 290.1 662.6 (952.7 ) 1,003.8

$ 1,407.4 $ 770.3 $ 909.9 $ (1,079.7 ) $ 2,007.9

Condensed Consolidating Statements of Cash Flow for the Six Months Ended June 30, 2004

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Net cash provided (required) by operating activities $ (51.4 ) $ (47.6 ) $ 28.3 $ — $ (70.7 )
Net cash provided (required) by investing activities 5.2 48.3 (103.9 ) — (50.4 )
Net cash provided by financing activities 179.0 — 83.7 — 262.7

Net increase in cash and cash equivalents 132.8 0.7 8.1 — 141.6
Cash and cash equivalents at beginning of period 31.5 1.0 13.5 — 46.0

Cash and cash equivalents at end of period $ 164.3 $ 1.7 $ 21.6 $ — $ 187.6

Condensed Consolidating Statements of Cash Flow for the Six Months Ended June 30, 2003

Combined Combined
Guarantor Non Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
Net cash provided (required) by operating activities $ 47.1 $ 9.5 $ 30.6 $ — $ 87.2
Net cash provided (required) by investing activities 0.5 (6.3 ) (83.5 ) — (89.3 )
Net cash provided (required) by financing activities 3.1 (2.2 ) 54.0 — 54.9

Net increase (decrease) in cash and cash equivalents 50.7 1.0 1.1 — 52.8
Cash and cash equivalents at beginning of period 3.5 2.6 13.0 — 19.1

Cash and cash equivalents at end of period $ 54.2 $ 3.6 $ 14.1 $ — $ 71.9

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations

General

The following discussion should be read in conjunction with the unaudited consolidated financial statements and related notes thereto appearing elsewhere in this document.

Three Months Ended ~~March 31,~~June 30, 2004 Compared with Three Months Ended ~~March 31,~~June 30, 2003 — Results of Operations

Our consolidated net ~~loss~~income for the three months ended ~~March 31,~~June 30, 2004 was ~~$10.8~~$3.6 million compared to a net ~~loss~~income of ~~$14.5~~$3.5 million for the same period last year. Net ~~loss~~income applicable to common shareholders for the three months ended ~~March 31,~~June 30, 2004 was ~~$ 11.6~~$2.9 million ($~~0.25 loss~~0.06 per diluted share) as compared to ~~$14.5~~$3.5 million ($~~0.32~~0.08 per diluted share) for the three months ended ~~March 31,~~June 30, 2003. The difference between net ~~loss~~income and net ~~loss~~income applicable to common ~~shares~~shareholders for the three months ended ~~March 31,~~June 30, 2004 iswas the ~~$0.8~~$0.7 million in accrued dividends and accreted discount costs on the Series B preferred stock.

Revenues.Revenues were ~~$454.9~~$548.7 million for the three months ended ~~March 31,~~June 30, 2004 compared to ~~$289.1~~$365.8 million for the three months ended ~~March 31,~~June 30, 2003. The increase was primarily due to a significant increase in outside sales by the Rail Group. The increase in revenues for the Construction Products Group iswas the result of ~~favorable weather conditions~~increased market demand in the Highway Safety and Fittings businesses and the acquisitions made by Concrete and Aggregate business during the ~~later~~latter part of ~~2003.~~2003 and early 2004, offset by unfavorable weather conditions. The increased revenue from the Railcar Leasing and Management Services Group iswas a result of an increase in the size of the fleet as well as an improvement in utilization and an increase in ~~utilization.~~lease fleet sales.

The following table reconciles the revenue amounts discussed under our operating segments with the consolidated total revenues ~~shown in the Selected Financial Data~~ (in millions).


	Three Months Ended March 31, 2004								Three Months Ended March 31, 2003								Three Months Ended June 30, 2004								Three Months Ended June 20, 2003
	Revenues								Revenues								Revenues								Revenues
	Outside		Intersegment			Total			Outside		Intersegment			Total			Outside		Intersegment			Total			Outside		Intersegment			Total
Rail Group	$	225.2	$	35.7		$	260.9		$	84.0	$	65.1		$	149.1		$	224.6	$	49.0		$	273.6		$	106.8	$	47.9		$	154.7
Construction Products Group		120.0		0.1			120.1			103.4		0.1			103.5			153.2		0.5			153.7			132.2		0.1			132.3
Inland Barge Group		43.3		—			43.3			44.1		—			44.1			64.1		—			64.1			43.2		—			43.2
Industrial Products Group		30.4		1.4			31.8			27.7		0.8			28.5			34.3		1.1			35.4			27.7		0.8			28.5
Railcar Leasing and Management Services Group		35.1		—			35.1			28.5		—			28.5			71.7		—			71.7			54.3		—			54.3
All Other		0.9		6.7			7.6			1.4		5.9			7.3			0.8		7.5			8.3			1.6		6.1			7.7
Eliminations		—		(43.9	)		(43.9	)		—		(71.9	)		(71.9	)		—		(58.1	)		(58.1	)		—		(54.9	)		(54.9	)

Consolidated Total	$	454.9	$	—		$	454.9		$	289.1	$	—		$	289.1		$	548.7	$	—		$	548.7		$	365.8	$	—		$	365.8

Operating Profit (Loss)

Operating ~~loss decreased $4.9~~profit increased $3.9 million to ~~$6.5~~$14.3 million for the three months ended ~~March 31,~~June 30, 2004 compared to ~~$11.4~~$10.4 million for the same period in 2003. This improvement is primarily the result of ~~improved efficiencies due to~~ increased sales volumes and an increase in our leasing fleet size and ~~utilization, partially~~utilization. Improvements have been offset by ~~losses on sales contracts resulting from~~significant increases in ~~the price~~steel and component costs and temporary shortages of steel and ~~other raw materials with steel content.~~components, primarily in our Rail and Inland Barge Groups and in barge litigation and related costs.

Other Income and Expenses.Other income and expense included interest income, interest expense and other, net. Interest

Other, net was ~~a loss~~income of ~~$0.1~~$1.6 million ~~of expense~~ for the three months ended ~~March 31,~~June 30, 2004 compared to income of ~~$0.8~~$2.6 million for the comparable period in 2003. The decrease was primarily due to a smaller amount of gains on sales of property, plant, and equipment and an increase in foreign currency losses in 2004.

Income Taxes.The current year effective tax rate of 34.75% was slightly lower than the statutory rate of 35% due to higher foreign income which is at lower effective tax rates. The prior year effective tax rate of 27.5% was due to the absence of tax benefits on certain foreign losses.

Rail Group

Three Months
Ended
June 30,
2004 2003
(in millions)
Revenues:
North American Rail $ 192.1 $ 89.7
Europe Rail 53.3 41.3
Components 28.2 23.7

Total revenues $ 273.6 $ 154.7

Operating profit (loss) $ 0.9 $ (6.1 )
Operating profit (loss) margin 0.3 % (3.9 )%

Railcars shipped in North America increased 111.9% to approximately 3,180 cars during the three months ended June 30, 2004 compared to the same period in 2003, resulting in a revenue increase for the North American operations of 114.2% over the same period last year. As of June 30, 2004, the North American backlog increased 65.4% to approximately 17,500 cars compared to the same date last year.

Revenues for the European operations increased 29.1% over the same period in 2003 due to a 6.4% increase in railcars shipped in Europe to approximately 660 cars and a change in product mix. As of June 30, 2004, the European backlog was approximately 1,800 cars compared to 2,400 in the same date last year.

The operating profit for the Rail Group increased $7.0 million to $0.9 million for the three months ended June 30, 2004 compared to the same period last year. While increased production volumes improved manufacturing efficiencies, operating profit was adversely affected by increased steel and component costs ($2.7 million), shortages of materials and unanticipated plant shut-downs ($4.0 million), and start-up costs related to reopening manufacturing facilities ($1.0 million). While we have taken steps to mitigate the impact of cost fluctuations, such as adding price escalation clauses to sales contracts and other measures, steel and component cost and availability could continue to impact operations going forward. At June 30, 2004, approximately 47% of our North American railcar backlog orders included price escalation clauses. Material cost increases not passed on to customers are expected to reduce operating profit in the next six months of 2004 by $11.0 million.

In the three months ended June 30, 2004 railcar sales to the Railcar Leasing and Management Services Group included in the Rail Group results were $48.5 million compared to $45.9 million in the comparable period in 2003 with profit of $3.4 million compared to $3.7 million for the same period in 2003. Sales to the Railcar Leasing and Management Services Group and related profits are eliminated in consolidation.

Construction Products Group

Three Months
Ended
June 30,
2004 2003
(in millions)
Revenues $ 153.7 $ 132.3
Operating profit $ 14.5 $ 15.3
Operating profit margin 9.4 % 11.6 %

Revenues increased 16.2% for the three months ended June 30, 2004 compared to the same period in 2003. The increase in revenues was primarily attributable to an increase in the Highway Safety, Fittings, and Concrete and Aggregate businesses. Market demand for our products in Highway Safety and Fittings businesses has steadily improved in 2004. The Concrete and Aggregate business has increased due to acquisitions in the latter part of 2003 and early 2004. The operating profit percentage for the quarter decreased over the same period last year as a result of poor weather conditions that impacted Texas in April and

June and increased steel costs in the Bridge business. These declines were partially offset by improving margins in the Highway Safety and Fittings businesses due to the increase in production volumes.

Inland Barge Group

Three Months
Ended
June 30,
2004 2003
(in millions)
Revenues $ 64.1 $ 43.2
Operating profit (loss) $ (5.4 ) $ 1.0
Operating profit (loss) margin (8.4 )% 2.3 %

Revenues increased $20.9 million for the three months ended June 30, 2004 compared to the same period in 2003. This was primarily due to an increase in sales for both hopper and tank barges. Operating loss in the current quarter was $5.4 million, a decrease of $6.4 million compared to $1.0 million in operating profit for the same period last year. This was primarily due to a $4.5 million loss related to steel price increases on contracts that will be completed during the remainder of 2004 and increased barge litigation and related costs. Barge litigation and related costs were $2.1 and $0.8 million for the three months ended June 30, 2004 and 2003, respectively.

Industrial Products Group

Three Months
Ended
June 30,
2004 2003
(in millions)
Revenues $ 35.4 $ 28.5
Operating profit $ 3.9 $ 1.6
Operating profit margin 11.0 % 5.6 %

Revenues increased 24.2% for the three months ended June 30, 2004 compared to the same period in 2003. This increase of $6.9 million was due to increased sales in domestic tanks in the U.S. and an increase in the sale of heads used for tank car production and other railcar equipment. The operating profit margin for the current quarter was higher than the same quarter last year due to improved efficiencies based on increased volume and increased sales of tank car heads and other railcar equipment.

Railcar Leasing and Management Services Group

Three Months
Ended
June 30,
2004 2003
(in millions)
Revenues:
Leasing and management $ 35.4 $ 28.9
Lease fleet sales 36.3 25.4

Total revenues $ 71.7 $ 54.3

Operating Profit:
Leasing and management $ 9.8 $ 9.5
Lease fleet sales 4.6 3.1

Total operating profit $ 14.4 $ 12.6
Operating profit margin 20.1 % 23.2 %
Fleet utilization 98.2 % 96.0 %

Total revenues increased $17.4 million for the three months ended June 30, 2004 compared to the same period last year. This increase of 32.0% was due to lease fleet sales and increased rental revenues related to additions to the lease fleet and improved fleet utilization of 98.2%. Operating profit increased to $14.4 million for the three months ended June 30, 2004 compared to $12.6 million for the same period in 2003. The increase in operating profit was due to increased lease fleet sales, the increased size of the rental fleet and improved utilization, offset by an increase in lease expense associated with an increase in the size of the fleet.

As of June 30, 2004, the Leasing and Management Services Group’s rental fleet of approximately 19,200 owned or leased railcars has an average age of 5.37 years and an average remaining lease term of 6.24 years.

All Other

Revenues in All Other increased to $8.3 million for the three months ended June 30, 2004. This increase was primarily attributable to an increase in intersegment sales by our transportation company. Operating loss was $1.6 million for the three months ended June 30, 2004 compared to $2.1 million in the same period in 2003.

Six Months Ended June 30, 2004 Compared with Six Months Ended June 30, 2003 — Results of Operations

Our consolidated net loss for the six months ended June 30, 2004 was $7.2 million compared to a net loss of $11.0 million for the same period last year. Net loss applicable to common shareholders for the six months ended June 30, 2004 was $8.7 million ($0.19 per diluted share) as compared to $11.0 million ($0.24 per diluted share) for the six months ended June 30, 2003. The difference between net loss and net loss applicable to common shares for the three months ended June 30, 2004 was the $1.5 million in accrued dividends and accreted discount costs on the Series B preferred stock.

Revenues.Revenues were $1,003.6 million for the six months ended June 30, 2004 compared to $654.9 million for the six months ended June 30, 2003. The increase was primarily due to a significant increase in outside sales by the Rail Group. The increase in revenues for the Construction Products Group was the result of increased market demand in the Highway Safety and Fittings businesses and the acquisitions made by Concrete and Aggregate during the latter part of 2003 and early 2004. The increased revenue from the Railcar Leasing and Management Services Group resulted from an increase in the size of the fleet, an improvement in utilization, and an increase in sales from the lease fleet.

The following table reconciles the revenue amounts discussed under our operating segments with the consolidated total revenues (in millions).

Six Months Ended June 30, 2004 Six Months Ended June 20, 2003
Revenues Revenues
Outside Intersegment Total Outside Intersegment Total
Rail Group $ 449.8 $ 84.7 $ 534.5 $ 190.8 $ 113.0 $ 303.8
Construction Products Group 273.2 0.6 273.8 235.6 0.2 235.8
Inland Barge Group 107.4 — 107.4 87.3 — 87.3
Industrial Products Group 64.7 2.5 67.2 55.4 1.6 57.0
Railcar Leasing and Management Services Group 106.8 — 106.8 82.8 — 82.8
All Other 1.7 14.2 15.9 3.0 12.0 15.0
Eliminations — (102.0 ) (102.0 ) — (126.8 ) (126.8 )

Consolidated Total $ 1,003.6 $ — $ 1,003.6 $ 654.9 $ — $ 654.9

Operating Profit (Loss)

Six Months
Ended
June 30,
2004 2003
(in millions)
Rail Group $ (2.7 ) $ (16.4 )
Construction Products Group 16.5 18.4
Inland Barge Group (11.1 ) 0.2
Industrial Products Group 4.7 1.6
Railcar Leasing and Management Services Group 24.0 21.2
All Other (0.3 ) (3.0 )
Corporate (16.6 ) (15.4 )
Eliminations (6.7 ) (7.6 )

Consolidated Total $ 7.8 $ (1.0 )

Operating profit increased $8.8 million to $7.8 million for the six months ended June 30, 2004 compared to an operating loss of $1.0 million for the same period in 2003. This improvement was primarily the result of increased production volumes and an increase in our leasing fleet size and utilization. Improvements have been offset by significant increases in steel and component costs and temporary shortages of steel and components, primarily in our Rail and Inland Barge Groups and barge litigation and related costs.

Other Income and Expenses.Other income and expense included interest income, interest expense and other, net. Interest expense, net of interest income increased $2.7 million to $20.3 million for the six months ended June 30, 2004 compared to

$17.6 million for the same period in 2003, an increase of 15.3%. The increase was primarily attributable to the write-off of deferred loan fees of $1.2 million in connection with early retirement of the term loan in March of 2004 and an increase in debt balances during the second quarter.

Other, net was income of $1.5 million for the six months ended June 30, 2004 compared to income of $3.4 million for the comparable period in 2003. The decrease was primarily due to a smaller amount of gains on sales of property, plant, and equipment and an increase in foreign currency losses in 2004.

Income Taxes.The current year effective tax rate of 34.75% was less than the statutory rate of 35% due to higher foreign income which is at lower effective tax rates. The prior year effective tax rate of 27.5% was due to the absence of tax benefits on certain foreign losses.

Rail Group


	Three Months						Six Months
	Ended						Ended
	March 31,						June 30,
	2004			2003			2004			2003
	(in millions)						(in millions)
Revenues:
North American Rail	$	172.7		$	98.1		$	364.8		$	187.8
Europe Rail		55.8			29.5			109.1			70.8
Components		32.4			21.5			60.6			45.2

Total revenues	$	260.9		$	149.1		$	534.5		$	303.8
Operating loss	$	(3.6	)	$	(10.3	)	$	(2.7	)	$	(16.4	)
Operating loss margin		(1.4	)%		(6.9	)%		(0.5	)%		(5.4	)%

Railcars shipped in North America increased ~~64.0%~~86.4% to approximately ~~2,800~~6,000 cars during the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to the same period in 2003, resulting in a revenue increase for the North American operations of ~~76.0%~~94.2% over the same period last year. ~~As of March 31, 2004, the North American backlog increased 109% to approximately 17,200 cars compared to the same period last year.~~

~~Railcars shipped in Europe increased 65.7% to approximately 800 cars during the three months ended March 31, 2004 compared to the same period last year, while revenues~~Revenues for the European operations increased ~~89.2%~~54.1% over the same period in ~~2003. As of March 31, 2004, the European backlog was~~2003 due to a 31.5% increase in railcars shipped in Europe to approximately ~~2,000~~1,400 cars ~~compared to 2,400~~and a change in ~~the same period last year.~~product mix.

The operating loss for the Rail Group decreased ~~$6.7~~$13.7 million to ~~$3.6~~$2.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to the same period last year. While increased production volumes improved manufacturing efficiencies, operating profit was adversely affected by the mix of orders which were completed during the first quarter as well as increased material costs ($6.5 million), shortages of materials and unanticipated plant shut-downs ($6.6), and start-up costs related to reopening manufacturing facilities ($1.9 million). While we have taken steps to mitigate the impact of cost fluctuations, such as adding price escalation clauses to sales contracts and ~~increased steel and component costs. During the quarter ended March 31, 2004, the Rail Group recorded a loss provision of $2.7 million related to~~other measures, steel and component cost and availability could continue to impact operations going forward. Material cost increases not passed on ~~certain contracts which will be completed during~~to customers are expected to reduce operating profit in the ~~remainder~~next six months of ~~2004.~~2004 by $11.0 million.

In the ~~three~~six months ended ~~March 31,~~June 30, 2004 railcar sales to ~~Trinity Industries~~the Railcar Leasing ~~Company~~and Management Services Group included in the Rail Group results were ~~$34.2~~$82.7 million compared to ~~$64.3~~$110.2 million in the comparable period in 2003 with profit of ~~$3.3~~$6.7 million compared to ~~$3.9~~$7.6 million for the same period in 2003. Sales to ~~Trinity Industries~~the Railcar Leasing ~~Company~~and Management Services Group and related profits are eliminated in consolidation.

Revenues increased ~~16%~~16.1% for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to the same period in 2003. The increase in revenues was primarily attributable to an increase in the Highway Safety, ~~business and the~~ Concrete and Aggregate, ~~business.~~and Fittings business units. The Highway Safety business ~~has~~ increased due to favorable weather conditions ~~and~~in the first quarter as well as an improvement in ~~the market demand for~~

the market demand for our products. The Concrete and Aggregate business ~~has~~ increased due to acquisitions in the ~~later~~latter part of 2003 and early ~~2004.~~2004, offset by unfavorable weather conditions in the second quarter. The increase in revenues in the Fittings business was also attributable to an increase in market demand. Operating profit percentage for the ~~quarter~~six months ended June 30, 2004 decreased over the same period last year as a result of the steel price increases in the Structural Bridge portion of this segment and competitive pricing pressure in certain markets of our Concrete and Aggregate business as well as the impact of year over year unfavorable ~~weather.~~weather, offset by the increase in production volumes in our Highway Safety and Fittings businesses.

Inland Barge Group

Three Months
Ended
March 31,
2004
2003
(in millions)
Revenues $ 43.3 $ 44.1
Operating loss $ (5.7 ) $ (0.8 )
Operating loss margin (13.2 )% (1.8 )%

Six Months
Ended
June 30,
2004 2003
(in millions)
Revenues $ 107.4 $ 87.3
Operating profit (loss) $ (11.1 ) $ 0.2
Operating profit (loss) margin (10.3 )% 0.2 %

Revenues ~~decreased $0.8~~increased $20.1 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to the same period in 2003. This was primarily due to ~~a decrease in tank barge volume, offset by~~ an increase in hopper barge sales volume and the deck and specialty barge ~~sales.~~business. Operating loss for the ~~current quarter~~six months ended June 30, 2004 was ~~$5.7~~$11.1 million, ~~an increase~~a decrease of ~~$4.9~~$11.3 million compared to $0.2 million in operating profit for the same period last year. This was primarily due to a ~~$4.6~~$9.1 million loss related to steel price increases on contracts that will be completed during the remainder of 2004 and increased barge litigation and related costs. Barge litigation and related costs were ~~$1.0~~$3.1 and ~~$0.6~~$1.4 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 and 2003, respectively.

Industrial Products Group


	Three Months						Six Months
	Ended						Ended
	March 31,						June 30,
	2004			2003			2004			2003
	(in millions)						(in millions)
Revenues	$	31.8		$	28.5		$	67.2		$	57.0
Operating profit	$	0.8		$	—		$	4.7		$	1.6
Operating profit margin		2.5	%		—	%		7.0	%		2.8	%

Revenues increased ~~11.6%~~17.9% for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to the same period in 2003. ~~This~~The increase of ~~$3.3~~$10.2 million was due to increased sales in domestic tanks in the U.S. and an increase in the sale of heads used for tank car production and other railcar ~~equipment, offset by lower sales in Mexico.~~equipment. The operating profit margin for the current ~~quarter is~~six months was higher than the same quarter last year due to improved efficiencies based on increased volume and increased sales of tank car heads and other railcar equipment.

Total revenues increased ~~$6.6~~$24.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to the same period last year. This increase of ~~23.2% is~~29.0% was due to ~~both an increase in~~increased lease fleet sales and increased rental revenues ~~due~~related to additions to the lease fleet ~~as well as~~and improved fleet utilization. Operating profit increased to ~~$9.6~~$24.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to ~~$8.6 million for~~

$21.2 million for the same period in 2003. The increase in operating profit iswas due to increased lease fleet sales, the increased size of the rental fleet and improved utilization, offset by an increase in lease expense associated with an increase in the ~~leveraged lease financing.~~

Assize of ~~March 31, 2004,~~ the ~~Leasing and Management Services Group’s rental fleet of approximately 19,100 owned or leased railcars has an average age of 5.3 years and an average remaining lease term of 6.26 years.~~fleet.

All Other

Revenues in All Other increased to ~~$7.6~~$15.9 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004. This increase was primarily attributable to an increase in intersegment sales by our transportation company. Operating ~~profit~~loss was ~~$1.3~~$0.3 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 compared to an operating loss of ~~$0.9~~$3.0 million in the same period in 2003.

Liquidity and Capital Resources

2004 Financing Activity

In March 2004, we issued ~~through a private offering,~~ $300 million aggregate principal amount 6 1/2% senior notes (Senior Notes) due ~~2014.~~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 our existing and future senior debt and are subordinated to all our existing and future secured debt to the extent of the value of the assets securing such debt. We 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. We 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 our ability to incur additional ~~debt,~~debt; make certain distributions, investments and other restricted ~~payments, sell assets,~~payments; create certain ~~liens and merge, consolidate~~liens; merge; consolidate; or sell substantially all or a portion of our assets. We applied approximately $163 million of the net proceeds of the offering to repay all indebtedness under its existing bank credit facility.

In connection with the issuance of our Senior Notes, we extended ~~its~~our secured credit agreement to provide for a three-year, $250 million revolving credit facility and repaid the existing term loan facility. ~~Amounts borrowed under the revolving credit facility during the first quarter of 2004 bear interest at LIBOR plus 1.75%.~~ 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. Our accounts receivable and inventory secure the agreement. The agreement limits the amount of capital expenditures related to our 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 our current credit rating not to exceed $25 million annually. At ~~March 31,~~June 30, 2004, there were no borrowings under the revolving credit facility.

Cash Flows

Operating Activities.Net cash required by operating activities for the ~~three~~six months ended ~~March 31,~~June 30, 2004 was ~~$71.7~~$70.7 million compared to ~~$87.6~~$87.2 million net cash provided by operating activities for the same period in 2003. This was partially due to an increase in working capital related to increased production volumes in the Rail Group. In addition, a tax refund of ~~$47.6~~$45.4 million was collected in the ~~three~~six months ended ~~March 31,~~June 30, 2003. The increase in working capital needs is reflective of the ~~gradual~~ upturn in ~~the~~our businesses.

Investing Activities.Net cash required by investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2004 was ~~$39.9~~$50.4 million compared to ~~$65.9~~$89.3 million for the same period last year. Capital expenditures for the ~~three~~six months ended ~~March 31,~~June 30, 2004 were ~~$36.8~~$90.4 million, of which ~~$31.8~~$77.1 million were for additions to the lease subsidiary. This compares to ~~$68.4~~$121.2 million of capital expenditures for the same period last year, of which ~~$65.5~~$112.6 million was for additions to the lease subsidiary. Proceeds from the sale of property, plant and equipment were ~~$4.1~~$47.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2004 composed primarily of railcar sales from the lease fleet and the sale of non-operating assets, compared to ~~$2.5~~$31.9 million for the same period in 2003 composed primarily of railcar sales from the lease fleet. In addition, $15.7 million of cash was required for an acquisition by our Construction Products Group and $8.5 million of cash was provided by the sale of the Leasing’s Group equity ownership in a trust.

Financing Activities.Net cash provided by financing activities during the ~~three~~six months ended ~~March 31,~~June 30, 2004 was ~~$216.9~~

Contractual Obligation and Commercial Commitments

As of ~~March 31,~~June 30, 2004 other commercial commitments related to letters of credit have increased to ~~$118.2~~$117.0 million from $116.4 million as of December 31, 2003. Refer to Note 6 in the financial statements for changes to our outstanding debt and maturities. Other commercial commitments that relate to operating leases under ~~sales/~~sale/leaseback transactions were basically unchanged.

Forward-Looking Statements.This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking statements and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performance, estimates, projections, goals and forecasts. Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements, include among others:

market conditions and demand for our products;

the cyclical nature of both the railcar and barge industries;

variations in weather in areas where construction products are sold and used;

the timing of introduction of new products;

the timing of customer orders;

price changes;

changes in mix of products sold;

the extent of utilization of manufacturing capacity;

availability and costs of component parts, supplies, and raw materials;

competition and other competitive factors;

changing technologies;

steel prices;

surcharges added to fixed pricing agreements for raw materials;

interest rates and capital costs;

long-term funding of our leasing warehouse facility;

taxes;

the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico and Romania;

changes in import and export quotas and regulations;

business conditions in emerging economies;

results of litigation; and

legal, regulatory, and environmental issues.

Any forward-looking statement speaks only as of the date on which such statement is made. Trinity undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

Item 3.Quantitative and Qualitative Disclosures ~~about~~About Market Risk

There has been no material change in our market risks since December 31, 2003.

Item 4.Controls and Procedures

Disclosure Controls and Procedures

The Company maintains controls and procedures designed to ensure that it is able to collect the information it is required to disclose in the reports it files with the SEC, and to process, summarize, and disclose this information within the time periods specified in the rules of the SEC. The Company’s Chief Executive and Chief Financial Officers are responsible for establishing

Internal Controls

The Company maintains a system of internal controls designed to provide reasonable assurance that: transactions are executed in accordance with management’s general or specific authorization; transactions are recorded as necessary (1) to permit preparation of financial statements in conformity with generally accepted accounting principles, and (2) to maintain accountability for assets; access to assets is permitted only in accordance with management’s general or specific authorization; and the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

Since the date of the most recent evaluation of the Company’s internal controls by the Chief Executive and Chief Financial Officers, there have been no significant changes in such controls or in other factors that could have significantly affected those controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II

Item 1.Legal Proceedings

On March 15, 2004, the Company and its wholly owned subsidiary, Trinity Marine Products, Inc. (“TMP”), settled its claims in a case 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 J. Russell Flowers, Inc. (“Flowers”) on October 7, 2002, Marquette Transportation Company and Iowa Fleeting Services, Inc. (“Marquette”) on March 7, 2003, Waxler Transportation Company, Inc. (“Waxler”) on April 7, 2003 and LeBeouf Bros. Towing (“LeBeouf”) on July 3, 2003. The Marquette and Waxler cases are pending in the 25th Judicial District Court in Plaquemines Parish, Louisiana, and the Flowers case is pending in the U.S. District Court, Northern District of Mississippi, in Greenville, Mississippi, and the LeBeouf case is pending in the U.S. District Court for the Eastern District of Louisiana. In ~~the~~ Waxler, ~~case,~~ the plaintiff has petitioned the court for certification of a class which if certified by the ~~courts,~~court, could increase the total number of barges involved in the Waxler litigation. Absent certification of a class in the Waxler case, the Waxler and LeBeouf suits currently involve 30 tank barges sold at an approximate average price of $1.4 million and the Marquette and Flowers suits involve 140 hopper barges sold at an approximate average price of $280,000. Each of the four cases set forth allegations pertaining to damages arising from alleged 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 recision of the barge purchase contracts. Independent experts investigating the claims on behalf of the Company and TMP have expressed the opinion that technical arguments presented by the plaintiffs in the litigation are without merit. As of ~~March 31,~~June 30, 2004, one of the four plaintiffs owes TMP approximately ~~$8.7~~$8.8 million related to contracts for barges not involved in the litigation. TMP has filed suit for collection of the past due amounts.

Item 2.Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

This table provides information with respect to purchases by the Company of shares of its Common Stock during the quarter ended June 30, 2004:

Number of Average Price Paid
Period Shares Purchased (1) per Share (1)
April 1, 2004 through April 30, 2004 28,544 $ 29.86
May 1, 2004 through May 31, 2004 4,288 $ 27.24
June 1, 2004 through June 30, 2004 2,145 $ 29.43

Total 34,977 $ 29.51

(1) This column includes the following transactions during the three months ended June 30, 2004: (i) the deemed surrender to the Company on 8,419 shares of Common Stock to pay the exercise price in connection with the exercise of employee stock options, (ii) the surrender to the Company of 22,270 shares of Commons Stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees, and (iii) purchase of 4,288 shares of Common Stock by the Trustee for assets held in a non-qualified employee profit sharing plan trust.

Item 4.Submission of Matters to a Vote of Security Holders

At the Annual Meeting of Stockholders held May 10, 2004, stockholders elected eight incumbent directors for a one-year term (Proposal 1), approved the Trinity Industries, Inc. 2004 Stock Option and Incentive Plan (Proposal 2), and approved ratification of Ernst & Young LLP as independent auditors for the year ending December 31, 2004 (Proposal 3). The vote tabulation follows for each proposal:

Proposal 1 — Election of Directors

Nominee For Withheld
David W. Biegler 35,853,812 811,302
Craig J. Duchossois 28,177,286 8,487,828
Ronald J. Gafford 36,014,023 651,091
Barry J. Galt 36,244,432 420,682
Clifford J. Grum 36,272,441 392,673
Jess T. Hay 29,409,243 7,255,871
Diana S. Natalicio 36,012,098 653,016
Timothy R. Wallace 35,942,058 723,056

Proposal 2 — 2004 Stock Option and Incentive Plan

For Against Abstentions Broker Non-votes
26,082,728 5,180,665 358,130 5,043,591

Proposal 3 — Independent Auditors

For Against Abstentions Broker Non-votes
36,172,637 459,369 33,108 —

Item 6.Exhibits and Reports on Form ~~8-K.~~8-K

~~(a)~~ a)Exhibits.


Exhibit Number		Description
~~10.1~~		~~Amendment No. 3~~
10.12		Trinity Industries, Inc. 2004 Stock Option and Incentive Plan (incorporated by reference to Exhibit 99.1 to the ~~Supplemental Profit Sharing Plan of~~Form S-8 Registration Statement filed by Trinity Industries, ~~and Certain Affiliates.~~ Inc. on May 11, 2004).*

~~10.2~~		Amendment No. 3 to the Supplemental Retirement Plan of Trinity Industries and Certain Affiliates. *

~~10.3~~		Amendment No. 4 to the Supplemental Retirement Plan of Trinity Industries and Certain Affiliates. *

~~10.4~~		Supplemental Retirement and Director Retirement Trust. *

~~10.5~~		Amended and Restated Credit Agreement dated as of March 10, 2004 among Trinity Industries, Inc., as Borrower, JP Morgan Chase Bank, individually as a Lender and Issuing Banks and as Administrative Agent, and Dresdner Bank AG, New York and Grand Cayman Branches and The Royal Bank of Scotland plc., each individually as a Lender and collectively as Syndication Agents, and certain other Lenders party thereto from time to time.

~~10.6~~		Purchase Agreement dated as of March 5, 2004 by and among Trinity Industries, Inc., certain subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers.

~~10.7~~		Amendment No.1 to Purchase Agreement dated as of March 9, 2004 by and among Trinity Industries, Inc., certain subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers, amending the Purchase Agreement dated as of March 5, 2004.

~~10.8~~		Registration Rights Agreement dated as of March 10, 2004 by and among Trinity Industries, Inc., certain subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers.

~~10.9~~		~~Indenture dated as of March 10, 2004 by and between Trinity Industries, Inc., certain subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as Trustee.~~

~~10.10~~		~~Equipment Lease Agreement (TRL III 2003-1A) between TRL III-1A Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee.~~

~~10.10.1~~		~~Participation Agreement (TRL III 2003-1A) between TRL III-1A among Trinity Rail Leasing III L.P., lessee, et. al.~~

~~10.10.2~~		~~Equipment Lease Agreement (TRL III 2003-1B) between TRL III-1B Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee.~~

~~10.10.3~~		~~Participation Agreement (TRL III 2003-1B) between TRL III-1B among Trinity Rail Leasing III L.P., lessee, et. al.~~

~~10.10.4~~		~~Equipment Lease Agreement (TRL III 2003-1C) between TRL III-1C Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee.~~

~~10.10.5~~		~~Participation Agreement (TRL III 2003-1C) between TRL III-1C among Trinity Rail Leasing III L.P., lessee, et. al.~~


~~Exhibit Number~~		~~Description~~
31.1		Rule 13a-15(e) and 15d-15(e) Certification of Chief Executive ~~Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~Officer.

31.2		Rule 13a-15(e) and 15d-15(e) Certification of Chief Financial ~~Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~Officer.

32.1		Certification ~~by Chief Executive Officer~~ pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification ~~by Chief Financial Officer~~ pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~Management contracts and compensatory plan arrangements.~~

~~(b)~~* Management contracts and compensatory plan arrangements.

b) Reports on Form 8-K during the quarter ended ~~March 31, 2004~~June 30, 2004.

(1) Trinity filed a current Report on Form 8-K dated ~~February 26,~~May 6, 2004, reporting, under Item 9 and ~~Item~~ 12, operating results for the ~~fourth~~first quarter of 2004, and attaching a news release dated ~~February 25,~~May 5, 2004 and a script of the conference call dated February 26, 2003. In addition, Trinity reported the announcement of an agreement with The Burlington Northern and Santa Fe Railway Company to build hopper cars, and attaching a news release dated February 26, 2004.
~~(2)~~ Trinity filed a current report on Form 8-K dated February 27, 2004, reporting, under Item 5, the offering of up to $300 million aggregate principal amount of senior notes due 2014, and attaching a news release dated February 27, 2004.
~~(3)~~ ~~Trinity filed a current report on Form 8-K dated March 10, 2004, reporting, under Item 5, the issuance of $300 million aggregate principal amount of~~May 6, ~~½% senior notes due 2014 in a private offering, and attaching a news release dated March 10, 2004.~~
~~(4)~~ Trinity filed a current report on Form 8-K dated March 15, 2004, reporting, under Item 5, the litigation settlement with Florida Marine Transporters, Inc., and attaching a news release dated March 15, 2004.

2229

INDEX TO EXHIBITS


Exhibit Number		Description
	~~10.1~~		Amendment No. 3 to the Supplemental Profit Sharing Plan of Trinity Industries and Certain Affiliates. *

	~~10.2~~10.12		~~Amendment No. 3~~Trinity Industries, Inc. 2004 Stock Option and Incentive Plan (incorporated by reference to Exhibit 99.1 to the ~~Supplemental Retirement Plan of~~Form S-8 Registration Statement filed by Trinity Industries, ~~and Certain Affiliates.~~ Inc. on May 11, 2004).*

	~~10.3~~		Amendment No. 4 to the Supplemental Profit Sharing Plan of Trinity Industries and Certain Affiliates. *

	~~10.4~~		Supplemental Retirement and Director Retirement Trust. *

	~~10.5~~		Amended as Restated Credit Agreement dated as of March 10, 2004 among Trinity Industries, Inc., as Borrower, JP Morgan Chase Bank, individually as a Lender and Issuing Bank and as Administrative Agent, and Dresdner Bank AG, New York and Grand Cayman Branches and The Royal Bank of Scotland plc., each individually as a Lender as collectively as Syndication Agents, and certain other Lenders party thereto from time to time.

	~~10.6~~		Purchase Agreement dated as of March 5, 2004 by and among Trinity Industries, Inc. certain subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers.

	~~10.7~~		Amendment No. 1 to the Purchase Agreement dated as of March 9, 2004 by and among Trinity Industries, Inc., certain subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers, amending the Purchase Agreement dated as of March 5, 2004.

	~~10.8~~		Registration Rights Agreement dated as of March 10, 2004 by and among Trinity Industries, Inc., certain subsidiary guarantors party thereto and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers.

	~~10.9~~		~~Indenture dated as of March 10, 2004 by and between Trinity Industries, Inc., certain subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as Trustee~~

	~~10.10~~		~~Equipment Lease Agreement (TRL III 2003-1A) between TRL III-1A Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee.~~

	~~10.10.1~~		~~Participation Agreement (TRL III 2003-1A) between TRL III-1A among Trinity Rail Leasing III L.P., lessee, et. al.~~

	~~10.10.2~~		~~Equipment Lease Agreement (TRL III 2003-1B) between TRL III-1B Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee.~~

	~~10.10.3~~		~~Participation Agreement (TRL III 2003-1B) between TRL III-1B among Trinity Rail Leasing III L.P., lessee, et. al.~~

	~~10.10.4~~		~~Equipment Lease Agreement (TRL III 2003-1C) between TRL III-1C Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee.~~

	~~10.10.5~~		~~Participation Agreement (TRL III 2003-1C) between TRL III-1C among Trinity Rail Leasing III L.P., lessee, et. al.~~

	31.1		Rule 13a-15(e) and 15d-15(e) Certification of Chief Executive Officer.

	31.2		Rule 13a-15(e) and 15d-15(e) Certification of Chief Financial Officer.

	32.1		Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	32.2		Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Management contracts and compensatory plan arrangements.


Caption	Page
PART I FINANCIAL INFORMATION
Item 1 Financial Statements		3
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		1419
Item 3 Quantitative and Qualitative Disclosures About Market Risk		1826
Item 4 Controls and Procedures		1826
PART II OTHER INFORMATION
Item 1 Legal Proceedings		1927
Item 2 Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		28
Item 4 Submission of Matters to a Vote of Security Holders		28
Item 6 Exhibits and Reports on Form 8-K		2129
SIGNATURES		2330
CERTIFICATIONS
~~Amendment No. 3 to Supplemental Profit Sharing~~
~~Amendment No. 3 to Supplemental Retirement Plan~~
~~Amendment No. 4 to Supplemental Profit Sharing~~
~~Supplemental Retirement/Director Retirement Trust~~
~~Amended and Restated Credit Agreement~~
~~Purchase Agreement~~
~~Amendment No. 1 to the Purchase Agreement~~
~~Registration Rights Agreement~~
~~Indenture~~
~~Equipment Lease Agreement~~
~~Participation Agreement~~
~~Equipment Lease Agreement~~
~~Participation Agreement~~
~~Equipment Lease Agreement~~
~~Participation Agreement~~
Rule ~~13a-15(e) and 15d-15(e)~~13a-14(a) Certification of CEO
Rule ~~13a-15(e) and 15d-15(e)~~13a-14(a) Certification of CFO
Certification Pursuant to Section 906
Certification Pursuant to Section 906


	Three Months Ended
	March 31,
	2004			2003
Pro forma
Net loss applicable to common shareholders, as reported	$	(11.6	)	$	(14.5	)
Add: Stock compensation expense related to restricted stock		0.5			0.5
Deduct: Total stock based employee compensation expense determined under fair value based method for all awards, net of related income tax effects		(1.2	)		(1.7	)

Pro forma net loss applicable to common shareholders	$	(12.3	)	$	(15.7	)

Pro forma net loss applicable to common shareholders per diluted share	$	(0.27	)	$	(0.35	)

Net loss applicable to common shareholders per diluted share - as reported	$	(0.25	)	$	(0.32	)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
Pro forma
Net income (loss) applicable to common shareholders, as reported .	$	2.9		$	3.5		$	(8.7	)	$	(11.0	)
Add: Stock compensation expense related to restricted stock		0.8			0.4			1.3			0.9
Deduct: Total stock based employee compensation expense determined under fair value based method for all awards, net of related income tax effects		(1.4	)		(1.6	)		(2.6	)		(3.3	)

Pro forma net income (loss) applicable to common shareholders	$	2.3		$	2.3		$	(10.0	)	$	(13.4	)

Pro forma net income (loss) applicable to common shareholders per diluted share	$	0.05		$	0.05		$	(0.22	)	$	(0.29	)

Net income (loss) applicable to common shareholders per diluted share — as reported	$	0.06		$	0.08		$	(0.19	)	$	(0.24	)


																			Operating
	Revenues								Operating Profit			Revenues								Profit
	Outside		Intersegment			Total			(Loss)			Outside		Intersegment			Total			(Loss)
Rail Group	$	84.0	$	65.1		$	149.1		$	(10.3	)	$	106.8	$	47.9		$	154.7		$	(6.1	)
Construction Products Group		103.4		0.1			103.5			3.1			132.2		0.1			132.3			15.3
Inland Barge Group		44.1		—			44.1			(0.8	)		43.2		—			43.2			1.0
Industrial Products Group		27.7		0.8			28.5			—			27.7		0.8			28.5			1.6
Railcar Leasing and Management Services Group		28.5		—			28.5			8.6			54.3		—			54.3			12.6
All Other		1.4		5.9			7.3			(0.9	)		1.6		6.1			7.7			(2.1	)
Corporate		—		—			—			(7.2	)		—		—			—			(8.2	)
Eliminations		—		(71.9	)		(71.9	)		(3.9	)		—		(54.9	)		(54.9	)		(3.7	)

Consolidated Total	$	289.1	$	—		$	289.1		$	(11.4	)	$	365.8	$	—		$	365.8		$	10.4


	Three Months Ending
	March 31,
	2004		2003
Statement of Operations
Revenues	$	35.1	$	28.5
Operating profit		9.6		8.6
Interest expense		4.6		4.2


				Combined		Combined
				Guarantor		Non Guarantor
	Parent			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Revenues	$	62.9		$	299.8	$	197.7		$	(11.7	)	$	548.7
Operating costs:
Cost of revenues		52.2			265.9		185.0			(11.7	)		491.4
Selling, engineering and administrative expenses		14.2			18.7		10.1			—			43.0

		66.4			284.6		195.1			(11.7	)		534.4

Operating profit (loss)		(3.5	)		15.2		2.6			—			14.3
Other (income) expense		(3.4	)		0.8		(4.8	)		16.2			8.8

Income (loss) before income taxes		(0.1	)		14.4		7.4			(16.2	)		5.5
Provision (benefit) for income taxes		(3.7	)		5.7		(0.1	)		—			1.9

Net income (loss)	$	3.6		$	8.7	$	7.5		$	(16.2	)	$	3.6


	Six Months Ended June 30, 2004								Six Months Ended June 20, 2003
	Revenues								Revenues
	Outside		Intersegment			Total			Outside		Intersegment			Total
Rail Group	$	449.8	$	84.7		$	534.5		$	190.8	$	113.0		$	303.8
Construction Products Group		273.2		0.6			273.8			235.6		0.2			235.8
Inland Barge Group		107.4		—			107.4			87.3		—			87.3
Industrial Products Group		64.7		2.5			67.2			55.4		1.6			57.0
Railcar Leasing and Management Services Group		106.8		—			106.8			82.8		—			82.8
All Other		1.7		14.2			15.9			3.0		12.0			15.0
Eliminations		—		(102.0	)		(102.0	)		—		(126.8	)		(126.8	)

Consolidated Total	$	1,003.6	$	—		$	1,003.6		$	654.9	$	—		$	654.9

Operating Profit (Loss)


	Number of		Average Price Paid
Period	Shares Purchased (1)		per Share (1)
April 1, 2004 through April 30, 2004		28,544	$	29.86
May 1, 2004 through May 31, 2004		4,288	$	27.24
June 1, 2004 through June 30, 2004		2,145	$	29.43

Total		34,977	$	29.51


Nominee	For		Withheld
David W. Biegler		35,853,812		811,302
Craig J. Duchossois		28,177,286		8,487,828
Ronald J. Gafford		36,014,023		651,091
Barry J. Galt		36,244,432		420,682
Clifford J. Grum		36,272,441		392,673
Jess T. Hay		29,409,243		7,255,871
Diana S. Natalicio		36,012,098		653,016
Timothy R. Wallace		35,942,058		723,056


For	Against	Abstentions	Broker Non-votes
26,082,728	5,180,665	358,130	5,043,591

(1)		Trinity filed a current Report on Form 8-K dated ~~February 26,~~May 6, 2004, reporting, under Item 9 and ~~Item~~ 12, operating results for the ~~fourth~~first quarter of 2004, and attaching a news release dated ~~February 25,~~May 5, 2004 and a script of the conference call dated February 26, 2003. In addition, Trinity reported the announcement of an agreement with The Burlington Northern and Santa Fe Railway Company to build hopper cars, and attaching a news release dated February 26, 2004.

~~(2)~~		Trinity filed a current report on Form 8-K dated February 27, 2004, reporting, under Item 5, the offering of up to $300 million aggregate principal amount of senior notes due 2014, and attaching a news release dated February 27, 2004.

~~(3)~~		~~Trinity filed a current report on Form 8-K dated March 10, 2004, reporting, under Item 5, the issuance of $300 million aggregate principal amount of~~May 6, ~~½% senior notes due 2014 in a private offering, and attaching a news release dated March 10, 2004.~~

~~(4)~~		Trinity filed a current report on Form 8-K dated March 15, 2004, reporting, under Item 5, the litigation settlement with Florida Marine Transporters, Inc., and attaching a news release dated March 15, 2004.


TRINITY INDUSTRIES, INC.		By /s/ JIM S. IVY
Registrant
		Jim S. Ivy
		Senior Vice President and
		Chief Financial Officer
		~~May 6,~~August 5, 2004