Good day, and welcome to today's teleconference. At this time, all participants are in a listen-only mode. Later, there will be an opportunity to ask questions during our Q&A session. Please note, this call may be recorded. And now, I'd like to turn the program over to James Perry, Vice President, Finance and Treasurer. Please go ahead.

Thank you, Kevin. Good morning from Dallas, Texas, and welcome to the Trinity Industries’ first quarter 2008 results conference call. I'm James Perry, Vice President of Finance and Treasurer for Trinity. Thank you for being with 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 that, we'll move to the Q&A session. Also in the room today is Charles Michel, Vice President, Controller and Chief Accounting Officer. A replay of this conference call will be available starting one hour after the conference call ends today through midnight on Thursday, May 8th. The replay number is 402-220-0116. I would also like to welcome to our call our audio webcast listeners today. Replay of this broadcast will also be available on our website located at www.trin.net. Before we get started, let me remind you that today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and include 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. On March 31st, 2008, our borrowings at the corporate level were the $450 million of convertible subordinated notes, $201.5 million of senior notes and $2.9 million of other investments. Our leasing company's debt included $330.5 million of secured railcar equipment notes, $61.4 million of equipment trust certificates and $384.1 million outstanding under our railcar leasing warehouse facility. Our total debt to total capital ratio was 44.8% on March 31st, 2008 as compared to 46.1% at March 31st, 2007. Net of cash, our net debt to total capital ratio was 41.1% on March 31st, 2008 as compared to 41.3% at March 31st, 2007. On March 31st, 2008, our cash position was $199.7 million. In December 2007, Trinity announced authorization for a $200 million share repurchase program through 2009. During the first quarter, we purchased 471,100 shares of stock in the open market for $12.2 million. Our cumulative purchase in the first quarter totaled 575,300 shares for $15.1 million. We will provide details of our purchases when we report our results at the end of each quarter. Now, here is Tim Wallace.

Thank you, James, and good morning everyone. I'm pleased with our first quarter financial results. Trinity's businesses are performing well in a challenging economy. We are benefiting from the diversity of our multi-industry portfolio, our sizeable order backlogs as well as production efficiencies. Each of our business segments except the Rail Group increased its first-quarter profits over last year. Our Rail Group's profitability was within 2% of last year's record results. This was a great accomplishment on the North American Rail Group's part in light of the slowdown in the demand for railcars in North America. We continue to invest capital to increase… to enhance and improve our competitive positions in all of our businesses. Trinity's overall position is stronger as a result of our investments in a variety of initiatives designed to reduce cost, diversify our product lines and increase manufacturing flexibility. We are positioned to compete in virtually any operating environment. General economic downturns like the one the United States is currently experiencing often cause highly competitive pricing. In these types of markets, our businesses aggressively pursue orders to maintain production continuity and efficiencies. We have been an aggressive competitor in all of our businesses for decades. Our businesses strive to have a low-cost basis, which provides them flexibility. During the past decade, we have transitioned much of our manufacturing capacity from higher cost facilities to lower cost operations. We currently have a number of different products being manufactured in our Mexico facilities. By consolidating manufacturing operations for several of our businesses in Mexico, we are able to spread our fixed cost over several product lines. This makes a significant difference in highly competitive markets. Another challenge we're confronted with today is inflationary pricing in the supply side of our business. We're seeing another round of inflationary pricing…

Thank you, Jim. Good morning. Trinity Rail continued to perform well during the first quarter of 2008. Operating profits and margins held steady as continued gains in productivity helped to offset the impact of a competitive pricing environment and materials cost increases. Trinity Rail shipments decreased 8.5% to 6,010 railcars compared to the first quarter of 2007. At this time, we expect our production levels to remain stable with combined shipments of between 13,000 and 14,000 railcars through the second and third quarters of 2008. One of our operating goals is to retain the production efficiencies we gained during the last few years. By keeping our production volumes stable, we should be able to accomplish this. Instead, continued improvements in operating efficiencies have partially offset the downward pricing pressures we anticipated during 2008. Our operations group is doing an outstanding job generating further efficiencies and cost reductions. We're beginning to see benefits from lean manufacturing initiatives at our production facilities. We do however expect our operating margins to decline over the course of 2008 amid a highly competitive environment and rising raw material costs. With regard to the overall railcar market, industry railcar orders during the first quarter continued at a moderate pace. Approximately 10,900 railcar orders were placed industry-wide during the first quarter. At quarter-end, the total industry backlogs stood at approximately 66,300 railcars compared to a backlog of 76,700 railcars at the end of the fourth quarter. Trinity's order backlog comprises 42% of the total industry backlog. Recent order inquiry levels indicate second quarter 2008 orders could be in line with first quarter order levels. Independent forecasts place 2008 railcar production in the low 50,000 car range, which is consistent with the market influence we continue to review. As you know, railcar demand shifts periodically from car type…

Thank you, Steve, and good morning everyone. My comments relate primarily to the first quarter of 2008. We've filed our Form 10 -Q this morning. You will find more details there about our first quarter. For the first quarter of 2008, we reported earnings of $0.81 per diluted share from continuing operations. This compares with $0.74 per share from continuing operations in the same quarter of 2007. Revenues for the first quarter of 2008 increased 8.5% over the same quarter last year. Earnings from continuing operations exceeded the high-end of our guidance by $0.07 per share. These positive results were primarily due to the following; excellent operational performance in our Rail and Inland Barge Groups and improved results in our structural wind tower business. Moving to our Rail Group, revenues for this group were flat on a quarter-over-quarter basis. Rail Group's sales to Trinity's Leasing and Management Services Group were $217 million in the first quarter of 2008 with profits of $31.2 million or approximately $0.25 per diluted share. This compares with sales to our leasing group in the first quarter of 2007 of $173 million with profits of $28.2 million or $0.23 per diluted share. These inter-company's sales and profits are eliminated in consolidation. Our margin results for the Rail Group were 13.6%. At this time, we anticipate margins for the Rail Group of between 11% and 12% for the second quarter. As we look forward, we expect margins of between 6% and 9% for the second half of the year. This margin level represents the competitive pricing environment, the mix of car types to be built during the year and recently announced raw material price increases. The Rail Group backlog as of March 31st, 2008 consisted of 27,960 railcars with an estimated sales value of $2.4 billion. Our…

Thanks, Will. Now, our operator will prepare us for the Q&A session. Question and Answer

[Operator Instructions]. We'll take our first question from John Barnes, BB&T Capital Markets. Please go ahead. John Barnes - BB&T Capital Markets: Hi, guys. Good morning. First, on your raw material cost, can you talk a little bit about what kind of increase you have seen in steel prices and... maybe through the quarter and where it's today? And then, can you also elaborate a little bit as to what percentage of your total business… and I'm talking railcar, wind tower, construction products, you name it, anything that require steel, what percentage of your business or your contracts or backlog is covered by raw material escalators?

John, Bill McWhirter. Good question. Obviously, in my script today we covered what we call cost coverage, which is the escalation of the firm purchase order contracts and the use of raw materials. We are not going to dive into the details of what percent of contracts have any one of those particular types of coverage. As I stated, it is included in our guidance, our expectation of the likely outcome just from a spot basis of where steel is today. And steel today has risen from… anywhere from the $700, $800 upwards to close to a $1000 a ton, just to give you kind of magnitude of steel pricing. John Barnes - BB&T Capital Markets: Okay. And how much steel are you actually buying on spot or how much... how far out do you commit to buying under contract, given… you have got some pretty decent visibility in your business with the backlog, so far out are you going ahead and committing to lock in better rates in the... not be as exposed to kind of the spot rates?

Yes. John again, all of our products are different. Clearly, the bigger the products, the more likely they are to have long-term contracts associated with them. We do use a variety of the steel distribution system for a lot of different reasons, in some cases we're buying parts that are already [inaudible] to that extent. So again, we're not going to go into the details other than to tell you that it is included in our guidance for the full-year. John Barnes - BB&T Capital Markets: Okay. There seems to be kind of… some M&A activity kind of heating up. I mean, there is a couple of larger lease fleets out there that books are out on in other services type businesses. Can you talk a little bit about your appetite for any acquisitions? And also from a lease fleet perspective being for sale, does that give you any kind of… does it put up any kind of roadblock in terms of more railcar orders in the near-term, just from the perspective that a lease fleet being sold is less likely to buy or is that adding to what's already kind of a weaker railcar market or does that have any impact at all?

John, this is Tim Wallace. As far as potential acquisitions, be it companies or cars that may be available in certain lease fleets, we are always in the market looking at a variety of different transactions and we don't make any public statements on any of these transactions unless we are completed with the negotiations of the transaction and we have a firm contract. So, we are not really going to disclose anything that we may be currently looking at other than the fact that as a company Trinity has always been an active acquirer of assets of all types. What was your other question related to? John Barnes - BB&T Capital Markets: In terms of lease fleets available for sale right now that books are out on, given that there are couple of larger ones out there, is that... do you see that being an impediment to railcar orders from the standpoint that maybe a fleet that's for sale is not engaged in purchasing railcars while it’s shopping itself and kind of puts another hurdle on what’s already a tough railcar market? Have you ever seen fleets as far as being sold and therefore really don't have any kind of basis to know?

I think it's a little too early to try to speculate on what may happen because leasing companies at annual plans and a lot of times they have their orders placed for months and a year or two out and this is all just fresh new information. John Barnes - BB&T Capital Markets: Okay. All right. And then lastly, I don't have the information. I can't find it. I don’t know if I overlooked it if you have not provided it yet. But do you have where your rail... your wind tower backlog was a year ago, just to give us an idea of kind of that magnitude of increase?

Well, we have where the wind tower backlog was at the end of the year and where was it a year ago. I don't think we’ve disclosed it back then. We started disclosing it in the third quarter I believe and it was in the $700 million range, $750 million, and then it went to $700 million and now it's at the $1.6 billion. John Barnes - BB&T Capital Markets: Okay, very good. Is there any... are you beginning to hit any constraint issues on that side? I know you've taken on a couple of new facilities on the wind tower side, and maybe you could update us on the status of those, but any further constraints that you see right now in terms of delivering that backlog?

No. We don't see any major constraints. We've been very successful thus far at bringing on additional capacity in the wind tower structure industry and we don't really see any constraints on a go-forward basis. As I said in my prepared comments, we're extremely pleased and I'm very proud of the capabilities in the execution that our wind tower... wind structured tower people folks have been able to perform. They're doing a really good job. John Barnes - BB&T Capital Markets: Yes. I’ve got to congratulate you on that because I never would have expected your wind tower backlog to begin to rival the railcar backlog. So you guys ought to be congratulated for that. It was a nice quarter. Thank you for your time.

Thank you.

[Operator Instructions]. We move next to Alex Blanton from Ingalls & Snyder. Please go ahead. Your line is open. Alexander Blanton - Ingalls & Snyder: Good morning. I'm having a little problem seeing how the guidance stays where it is, three… what is it, $3.20 to $3.40?

$3.20 to $3.45. Alexander Blanton - Ingalls & Snyder: Okay. Because you just reported $0.81 and you said, the margins in the railcar is expected to drop to 6% to 9% in the second half and 11% to 12% for the second quarter. So if I assume sales flat on the railcar side and I put those margins on, that's a reduction, I believe, of about $0.09 in the second quarter from that lower margin and then $0.25 for each of the next two quarters just from the lower margins on the railcar side? Now, your guidance for the year assumes that the $0.80 sort of continues per quarter. Four times $0.81 would be $3.24. So how do you make up for the decline in the margin side in the Railcars, which I assume is coming from the fact that you won't be able to recover all these fuel cost increases? And that's understandable, but… and those steel cost increases must be affecting other parts of your business too. So, what is the effect there? It's at… it has a big impact on the margin for the Railcar side. Would it have an equally big impact on the barges and some of the other products? It's hard for me to see how this all fits together.

Bill, I think you need to handle that question.

Yes Alex, I mean I think you… obviously you’ve asked a very detailed question about each particular business segment. As we give company guidance, consistent with our past practices, each quarter we try and better the overall range down so that we are a little more consistent as we go into the year. Now, given the current marketed demand for our Rail products, the competitive pricing environment and the raw material pressures, we believe the guidance as a whole, $3.20 to $3.45, is representative of our best estimates of the total company's performance. We're not willing to break into a dialog, just extract each individual business segment [inaudible] commentary within those segments. Alexander Blanton - Ingalls & Snyder: Also, you're not going to say how you expect to make up for the decline on the Railcar side then?

Well, what we're going to say is that we believe the earnings pattern and the margin guidance that we provided coupled with kind of overall tax rate, interest expense, etcetera, will bring us to $3.20 to $3.45 range, and then in the next conference call we'll try to refine that guidance even further. Alexander Blanton - Ingalls & Snyder: Okay.

Alex, this is Tim Wallace. We have a really elaborate forecasting system that all of our businesses report in to us on a monthly basis how they are performing, and when we prepare for a conference call, we use the April forecasting system that we have for information and it's fairly complicated. So it's not easy for us to break it down into as many businesses as we have and moving parts to give the numbers. So, we...that's why we provide the annual guidance that lets everybody get a look into what our system is saying to us. Alexander Blanton - Ingalls & Snyder: Okay. A couple of smaller points, when you say the highest profitability, are you talking about margins, is that what you mean? The fourth highest in history I think you said to the railcar--.

No, we were talking operating profit for the quarter and dollars. Alexander Blanton - Ingalls & Snyder: You're not talking margins when you say profitability?

No. Alexander Blanton - Ingalls & Snyder: You're talking operating, okay, and I just what a definition there. On the backlog of wind towers, you said that in the release that was several years. How many… can you narrow that down a bit? How many years are we talking in the backlog area? Did you envision that sort of being a flat or a ramp-up of some kind?

This is Tim Wallace. When you have multiple facilities that are growing at the rate that our facilities are growing as well as some of the lean manufacturing initiatives that we have going in our facilities that’s freeing out additional capacity for us. It's a very dynamic scheduling metrics and it's very similar to what we have in our barge business as well as our railcar business. We have multiple facilities producing products, and you have the flexibility that we have there. We don't have one facility that has... that… we don't have a total number that we can say, our backlog stretches out through this time period. And that's why we give our backlog in dollars and then we focus on growing as aggressively as we can to remain... retain the efficiency levels that we have to be able to meet it. And for competitive reasons, we really don't want to disclose the time frame as well. Alexander Blanton - Ingalls & Snyder: Okay. Thank you.

[Operator Instructions]. We will move next to Giles Wanpra [ph] from Atlantic Investment. Please go ahead.

Just a quick housekeeping question, if I may. The tax rate was higher than I expected in the first quarter. What are you expecting for the remainder of the year?

Giles, we’ve typically said, we look for a tax rate in the 37% and 38% range. It was a little higher this quarter. We had a… kind of a one-time tax [inaudible]. So, I look for it to be something… [inaudible].

Thank you.

And we will move next to Steve Barger from Keybanc. Go ahead please.

Hi, good morning.

Good morning.

Good morning Steve.

I was up and around on another call, so sorry if I missed any of this. But can you... in the... what is the theoretical capacity on a dollar basis in the wind business, once you get all those facilities ramped? I just got at the end of the last, so sorry if you covered this.

Well, Bill probably should address that.

Yes. We haven't addressed the theoretical capacity. What we had provided are two looks at forward guidance. One is the current year where we said that we are anticipating around $390 million in revenue. That's up from $245 million last year to give you a perspective on growth. But even more important than that going forward, Tim Wallace provided on our annual conference call our five-year targeted run-rate for revenues between $800 million and $900 million. So there obviously is significant growth still ahead of us.

Right. Okay. Presumably, that lease facility wasn't included in the $800 million to $900 million contemplated on last quarter or was it?

Yes. From a strategic point of view, we anticipated that we would have growth through additional facilities.

Okay. Will the… will including that lease facility is... are there more implied in the $800 million to $900 million or is this it?

Well, I think in the $800 million to $900 million, we are not going to get into the details of how many facilities or what facilities, a lot of our facilities have the potential just to be expanded within themselves as well as the opportunity to look at other facilities. The $800 million to $900 million is a strategic plan more representative of the marketplace and Trinity's leading position in the marketplace.

Okay. What... can you talk about the operating margin spread between wind towers and the storage tanks?

No. We don't talk about the spread between that. We disclosed the spread for the segment and the segment was 41.1% for the quarter.

Right, now I understand that, okay. In barge, can you breakout volume versus price for the quarter?

No. We don't break out that. We… for competitive reasons, in this business we prefer to talk in dollars. We currently have production lines set up building various types of barges and we feel that it's much easier to talk with the investment community in a dollar figure and Bill provides the guidance number. So you have an idea of what that business will look like from a financial standpoint.

Okay. Thanks for that. Can you talk about the coal market? I think in your earlier comment you'd said something about improving, but East versus West utilization rates by car type, and are you seeing a mix in the geographic usage of coal that's potentially going drive coal car orders?

Okay. Steve, why don’t you handle that one.

Yes, I guess we're seeing two phenomenon in the coal market, Steve. One is continued replacement of steel coal cars, certainly in the West with… lighter aluminum cars are also starting to see some replacement of the first-generation of aluminum cars, which are a little smaller and a little heavier. I think the other dynamic we are seeing, in part driven by the weaker U.S. dollar, is the significant exports of coal. Those seem to be going both offshore from the East and West Coast ports, and that has driven additional demand for coal cars to support that export growth.

Do you have any idea how many cars are in storage right now, and what the outlook is for utilization in East versus West, if you just have kind of an explicit number?

I don't have an explicit number. Our sense is that we are seeing some of the newer cars that works towards beginning to be placed into service and I think some of that overhang is evaporating.

Okay, great. Thanks. I'll get back in line.

[Operator Instructions].

Kevin, if there are no more questions, we will go ahead and conclude today's conference call. Thank you. And remember to everyone, a replay of this call will be available starting one hour after the call ends today through midnight, Thursday, May 8th. The access number is 402-220-0116. Also, this replay will be available on our website located at www.trin.net. We look forward to visiting with you again on our next conference call. Thank you for joining us this morning.

And once again, this does conclude today's teleconference. You may disconnect at any time. Thank you for your participation, and everyone have a wonderful day.