Good day and welcome to today's teleconference. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during our Q&A session. Please note today's call may be recorded. It is now my pleasure to turn the call over to James Perry, Vice President of Finance and Treasurer of Trinity Industries. Please go ahead, sir.

Thank you, Sarah. Good morning from Dallas, Texas, and welcome to the Trinity Industries first quarter 2009 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. A replay of this conference call will be available starting one hour after the conference call ends today through midnight on Thursday, May 7th. The replay number is 402-220-0398. 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 includes statements as to estimates, expectations, intentions and predictions of future financial performance. Statements that are not historical facts are forward-looking. Participants are directed to Trinity's Form 10-K and other SEC filings for a description of certain of the business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. On March 31, 2009, we had total borrowings of $1.84 billion. Our borrowings at the corporate level were the $450 million of convertible subordinated notes, $201.5 million of senior notes, and $2.7 million of other indebtedness. This is the first quarter in which we reflect the adoption of APB 14-1 as it applies to our $450 million of convertible subordinated debt. As a result of this $321.2 million is shown as debt on the balance sheet with $128.8 million shown…

Thank you, James, and good morning. The first quarter was challenging for our company. Our overall financial results were good considering the difficulties associated with the economic environment. Most of our customers have reduced their capital spending programs until they get a better sense of the economy's direction. Our businesses with small order backlogs decreased their shipments in the first quarter. Our railcar manufacturing and construction products businesses fit into this category. Our Rail Group's revenues decreased 50% over last year's first quarter. As a result, our railcar manufacturing businesses continue to reduce and consolidate their operations. Our Rail Group continues to reduce their shipments as they work off their order backlogs and align their production with lower market demand levels. I was not pleased with our Construction Products Group's financial performance during the first quarter. It was affected by economic slowdown and some abnormally-high material costs that this group carried over from last fall. We worked off the higher material costs in our first quarter shipments and this should not be a factor in the future. We're hopeful our highway products-related businesses will benefit from the infrastructure portion of the economic stimulus bill. Until that occurs or the economy improves, we expect these businesses to have lower than normal business activity and profitability. Our businesses with large backlogs were able to maintain their momentum. This applies to our barge and our structural wind towers businesses. The diversification created by our barge, structural wind towers and leasing businesses helped compensate for the decrease in earnings in our rail and construction products segments. Our Barge Group produced record operating profits and performed very well during the first quarter. We had a great deal of positive momentum in this business during 2008 that continued into the first quarter. The size of our…

Thank you, Tim. Good morning. Operating results for TrinityRail during the first quarter of 2009 reflected the impact of the rapid decline in railcar market conditions, which began in the second half of 2008. We shipped approximately 3,050 railcars during the quarter and maintained a high lease fleet utilization at 98.4%. However, our manufacturing margin dropped from 6.3% in the fourth quarter of 2008 to a 2% loss during the first quarter. Operating results during the quarter were adversely affected by lower railcar production volumes, plant closing costs, and employee severance expense. We expect our operating margins to remain in this range during 2009 as a result of a highly-competitive market environment and significantly reduced production levels. Going forward, the weak economic environment may also place pressure on lease rates and adversely impact lease fleet utilization. During the first quarter, we continue to execute our plan to reduce our railcar production footprint to align with forecasted near-term demand. Our production facilities still in operation are capable of producing a substantial portion of our broad product line. Our operating flexibility positions us to meet shifting customer demand as well as quickly ramp-up production when market conditions improve. We'll continue to monitor the market and make further adjustments to staffing levels as necessary. During the first quarter, TrinityRail shipped approximately 3,050 railcars, 49% less than the 6,010 railcars shipped in the first quarter of 2008. We expect shipments of approximately 2,500 to 3,000 railcars during the second quarter of 2009, and significantly lower production levels in the second half of the year as we work off our order backlog and align car production with weak market demand. Some of these shipments may come from our finished goods of inventory of railcars built in advance of customers' needs. Orders for new railcars continue…

Thank you, Steve, and good morning, everyone. My comments relate primarily to the first quarter of 2009. We will file our Form 10-Q this morning. For the first quarter of 2009, we reported earnings of $0.43 per diluted share. This compares with $0.78 per share in the same quarter of 2008. Revenues for the first quarter of 2009 were $794 million. Earnings were above the upper end of the guidance by $0.13 per share. This was primarily due to a higher level of car sales to TRIP that closed near quarter-end, increasing earnings by $0.15. Moving to our Rail Group, revenues for this group decreased on a quarter-over-quarter basis by 50% to $284 million. Rail Group sales to Trinity's Leasing and Management Services Group totaled $117 million in the first quarter of 2009 with profits of $8.9 million or approximately $0.07 per diluted share. This compares with sales to our leasing group in the first quarter of 2008 with $217 million with profits of $31.2 million or $0.25 per diluted share. This intercompany sales and profits are eliminated in consolidation. Margin results for the Rail Group were a loss of 2%. Looking forward, we anticipate that the Rail Group will report an operating margin loss of between 1% and 3% for the second quarter of 2009. This projection reflects the lower pricing environment, the number of cars to be shipped during the period, and the costs related to right-sizing the business. The Rail Group backlog as of March 31, 2009 consisted of approximately 6,210 railcars with an estimated sales value of $545 million. Our railcar backlog is broken down approximately as follows: Backlog to our leasing company, $260 million; backlog to TRIP, $85 million; and backlog to third parties, $200 million. Now turning to our Inland Barge Group. The Inland…

Thanks, Bill. Now, the operator will prepare us for the Q&A session.

(Operator Instructions). We'll go first to the site of Steve Barger with KeyBanc Capital. Your line is open. Please go ahead.

Thinking about how some of the volumes in the segments are going to come down, I just want to pose a hypothetical. If you run 1,000 cars through one or two plants per quarter in the back half, how should we think about the margin profile of the rail segment? Does it get a lot worse from here or should we be thinking negative 2% or negative 12%?

Yes. Steve, I think it's a little early for us to talk about margins in the back half. Key for us is rationalizing the business to the footprint in that kind of output. The rail guys have done a really exceptional job in bringing the plants down that needed to be brought down, but at this time we're not prepared to give margins to the back half.

Just directionally speaking, could you limit it, hypothetically speaking, to a low single-digit number?

No. I don't think at this time we can comment on the margin of the back half.

Yes. Well, especially a hypothetical?

Yes.

Well, you told us you're going to deliver 5,000 for the rest of the year and 2,500 to 3,000 in your next quarter, so it's not that hypothetical.

That's right and I think, Bill, didn't you give them margins for what we're anticipating?

I gave margins for the second quarter of a loss between 1% and 3% in the second quarter.

Thinking about the utilization for the next couple of quarters in the leasing fleet, what can we expect for lease renewals for stuff that's coming off? And can you just kind of talk about market conditions there?

Steve, why don't you take that one?

Sure. Well, certainly it's a highly-competitive market out there, there's a lot of cars available in the marketplace and we're having to work through that. The market is choppy and we're managing, really, our fleet on a month-to-month basis. We don't have a disproportioned number of renewals this year, a reminder that our fleet is primarily comprised of tank cars, covered hoppers and coal cars. When you look at what we think could be the largest group of types of cars that are idle, we don't have a lot of exposure to those markets. But to try to predict utilization going forward is very difficult and again, we're just evaluating business conditions on a daily basis and making our decisions about renewals and assignments as they come about.

But if I heard you right, you said you don't have that many cars coming off lease this year?

We don't have a disproportionate number that anything beyond what's implied with our average remains in lease terms.

Got it. So one more on the leasing. I mean, the margins look pretty good after excluding the sale. Is that likely peak for a while or there's really no reason to extrapolate out worst performance given what you just said?

Bill, you want to tackle that one?

Yes. Steve, I think you're right. The margins were particularly good in the first quarter moving up to 41% when you pull out the lease versus 35% that we came off of. I think if you look at the business, historically we've kind of ranged between 35% and 40%. A lot of it has to do with the maintenance that flows through in any one given period of time, so I would think we'd be consistent in that range.

Any inquiries coming in the barge fleet? Last one and I'll get back in line.

Yes. The barge business does have inquiries that we are processing and talking with a lot of our customers on potential business, and so we're not saying that business is not dead, but it's not vivacious like it's been in the past. It's kind of reflective to where the economy is.

Could you talk about the credit risk that there is in your lease fleet, potentially? Are you looking at any customers that are having problems right now and how should we be thinking about that issue?

Steve, you want to take that one?

Sure. Well, I mean, to no surprise the current financial downturn is placing pressure on our customers' businesses. We've had historically low levels of credit defaults in our leasing business. The delinquencies have increased over the last six months, higher than our historical norms, again, as one would expect in the economic downturn. There's more risk in the market today, but we're closely monitoring those accounts receivable balances at all times. The diversification of our fleet by customer, by car type, and by industry served will certainly help to mitigate our exposure there, and we've been successful thus far in working with those customers who are in bankruptcy to maintain our railcars in their service post-bankruptcy, but this is a very slow process and every bankruptcy is an individual case to be handled as such. But thus far, the financial downturn and its impact on the creditworthiness of our customers had only a very minimal impact on our lease fleet utilization.

So, you don't necessarily have a disproportionate exposure to ethanol customers, for instance, in the tank fleet?

We certainly have an exposure to that industry in our portfolio. We think over time that we've built a portfolio with perhaps stronger creditworthy customers in that market. We'll survive an industry consolidation. We're certainly monitoring that aspect of our portfolio very, very closely.

Okay. I don't want to take the whole call if anybody else is queued up.

And we'll go next to the site of John Barnes with BB&T Capital Markets. Your line is open. Please go ahead. John Barnes - BB&T Capital Markets: Hey, good morning. You mentioned in your discussion on aligning the rail production with demand. You mentioned that in the margin this quarter was included a plant shutdown cost. Could you give us an idea of the magnitude of those costs and are those costs going to be kind of ongoing or are they more one-time in nature?

Bill, would you want to take that?

Sure. John, I think when you look at the margin, the reason we kind of laid out the two or three items that were involved in the margin pieces, it's difficult to kind of just assess what piece is associated with bringing a plant down. Most of these plants kind of slowly come down or we change production rates from one to another, so it's a bit of a challenge. We're not disclosing how much we think that particular number is. It's a good-sized number, but it's not the vast majority of the loss in those businesses. John Barnes - BB&T Capital Markets: So, the majority of the loss was just from the lower production.

That's right. John Barnes - BB&T Capital Markets: And I don't know if I'm asking a prior question a little different way or, I'm just trying to gauge. What do you believe is the number of units necessary for breakeven results out of the rail division on an annual basis, I mean given what your infrastructure looks like today as you've brought these plants down? Clearly, it's not 5,000 units because you're guiding to some margin weakness in the second quarter. Could you give us some magnitude of what you think it is?

John, this is Tim. It's very difficult for us with the product mixes that we have and the dynamics of the market and the way pricing has been moving, for us to establish one set number that says if we produce between this range of cars and that range of cars that we will produce a breakeven or a loss or a small gain. That's why because things have changed so rapidly and there's still quite a bit of uncertainty in here, we're just taking this on a daily basis and making our decisions as best we can when the orders are out there. So, we'll look out the one quarter that we can, and I think that's the guidance that Bill gave, so you can do your planning around that but we don't have an annual number of cars that we're producing because of the volatility and the dynamics of the market in the mix. John Barnes - BB&T Capital Markets: In terms of railcar pricing, could you just talk a little bit about kind of what market activity you are seeing? I mean, 995 orders in the quarter wasn't bad in comparison to some of your competitors, just what you're seeing in terms of pricing, what you're seeing in terms of the kind of customers that are placing orders. I'm really kind of curious as we've seen in past downturns opportunistic buyers come in when the backlogs get this lean. Is that what you're looking at right now? Is that the kind of customer bids you're seeing right now?

John, it's kind of broken out into three parts. Number one, what's happening with railcar pricing, whether it's railcar pricing or lease rates, and clearly those prices and lease rates are coming down and it's hard to make generalizations because of the mix. But we've also had a reduction in materials prices as well, materials costs, so that helps bring down the pricing for railcars. This is a highly competitive market. Again, the overhang of existing cars really has a great deal of influence on pricing of new cars and pricing of lease rates, and without getting into individual markets in specific, the story kind of varies by car type. At the same time, we've got large overhang of railcars and a number of those owned by third-party lessors who might be interested in buying at the depth of the market, I don't think they're going to be speculative purchasers until they see that overhang shrink considerably. So right now, I don't anticipate any near-term volume purchases of the opportunistic nature by third-party lessors or even by railroads, for that matter, who return in cars they have on lease and who have significant [idle equipment part]. John Barnes - BB&T Capital Markets: That's a good answer. James, going back to your initial comments, and I appreciate the color you provided on the corporate debt and the leasing debt. Could you just give us an idea in '09, 2010, what kind of maturities you're left looking at? And are there any of these facilities, anything out there that's left to be renewed or have some short maturity that's going to have to be handled in the next, say, 18 months?

John, the warehouse, as you know, of course, is up for renewal in the third quarter and we talked about renewing that in the second quarter. The 10-Q lays out for you that will be published right after the conference call, the maturing debt we have. Other than the normal monthly amortization of our long-term leasing pieces, there's no debt with any maturity of any significance prior to the revolver in 2012. Then you'll start getting later into the 2014, 2018 period for the other pieces of debt. So in the near-term, other than the warehouse renewal, there is nothing of significance. John Barnes - BB&T Capital Markets: And then, Tim, lastly, just from kind of a strategic standpoint, it's been a while since you guys pulled the trigger on any kind of major acquisition. Obviously, I'm sure you're thrilled to not be trying to integrate one in this kind of environment given the last downturn. But I'm just kind of curious as to the pipeline of potential acquisition properties out there and what you think right now about purchase multiples and that type of thing.

Well, as I said, we're just evaluating business conditions on a daily basis and we'll make our decisions appropriately. Our primary objective has been to be sure our liquidity position is strong and to be sure that we have a good handle on the existing markets that we have and our position in those markets. At the same time, though, we are always looking at the various opportunities that are out there in the marketplace where companies are up for sale for various reasons. We'll just deal with this with our Board on a one-off type basis and based on the balance sheet and the financial position and our outlook in the industry in general. I think it's safe to say that most businesses right now are selling for multiples at a much lower rate than they were a year ago or two years ago, so we've got a drastically different market. John Barnes - BB&T Capital Markets: Do you think they're fair multiples or you think they're still a little elevated?

I think that they're just across the board. Every business itself has specific issues that are pertaining to their market, their balance sheet, the terms that they're looking for. So it's hard to make a general statement.

Next, we'll go to the site of Art Hatfield with Morgan Keegan. Your line is open. Please go ahead.

Thank you. Good morning, everybody. Just a few questions. First, James, on the converts on the discount, the amortization of that, is that straight-line through 2018?

Bill, why don't you handle that?

No, it's not a straight line. In effect, you bring it back as kind of a discounted note, so it will move as you go, but not a straight-line approach.

Secondly, on the backlog -- and you may have said this, so if you did, forgive me for not catching it, but did you mention how much of the backlog had the cars were on fixed-price contract as opposed to having escalators in them?

No, we didn't. And frankly, so little of the backlog is for outside sales that it's probably not relative at this point in time.

You're talking railcar backlog?

I'm talking railcar backlog.

Yes, I was. Is the barge backlog, same situation or should we think about that?

Yes, the barge backlog at $400 million has all sorts of cost-coverage features in it, whether its firm prices with our materials suppliers or up or down movements with our customers. Given the current market for raw materials, it's really not an issue in today's market.

But you feel like you're comfortably hedged there if things were to move a little bit on you?

Yes.

Then finally, I hate to kind of bring up what everybody else has been asking about with regards to basically fixed-cost margins and where margins can go. I'm not going to ask that, but curious as to when you shut a plant down or close a plant for a period of time, do you have any cash that goes out the door during the period of time that it's closed or all cash outflow stopped at that point in time?

No, Art. There's still a little cash. I mean, obviously, we keep security in those, we have insurance, kind of miscellaneous items like that. But it's the cash drain on a plant moves down significantly.

Would it be fair to say that it's not material?

It's not material to Trinity as a whole but to the rail segment.

Right. Then finally, as we go through this difficult period and you have cars come up for renewal in the lease fleet and/or come up for renewal at TRIP, it's probably going to be difficult to place some of those cars. Are you indifferent where idle cars are, whether they're at Trinity Leasing or at TRIP? My assumption would be that you'd prefer to have better utilization at Trinity Leasing. And if so, how do you handle the competitive aspects of those two different entities with regards to having cars on lease?

Yes. We treat any of those cars the same in our portfolio. We don't discriminate for our portfolio or for TRIP's portfolio, we make the best decision from the economic standpoint of how to deploy that railcar to satisfy the customer's requirement. And our field salespeople have no insight as to what portfolio those cars are drawn from, nor do our customers. We operate that way to satisfy the institutional investors who have invested in TRIP and also support the debt instruments for our own leasing company. So it's not discrimination for or against our own portfolio.

Great. That's helpful. And as to the issue of financial impact, is there a bigger financial drain on either one for having a car idle?

I would think the economics are the same for the ownership interests of that railcar.

Difference meaning your ownership percentage at TRIP is smaller than at Trinity Leasing, correct?

Yes.

And next, we'll go to the site of Louis Sapir with Oppenheimer & Company. Your line is open. Please go ahead. Louis Sapir - Oppenheimer & Company: Thank you very, very much. I missed part of it, but I don't know whether this question has been asked. Formerly, you have indicated the parameters of what your earnings for the year might be, have you in any way indicated what those earnings might be for '09?

Yes. No, we have not. We've only provided guidance for the second quarter of 2009. Just given the uncertainty of business conditions right now, it would be very challenging to provide guidance for the year. The guidance for '09, if you missed it, was $0.20 to $0.30 per diluted share. Louis Sapir - Oppenheimer & Company: For the second quarter?

The second quarter, that's correct. Sorry about that. Louis Sapir - Oppenheimer & Company: But you have no indication of what it might be for the year?

We're not providing guidance for the year.

It appears that we have no further questions. I'd like to turn the call back to Mr. Perry for closing remarks.

Thank you, Sarah. This concludes today's conference call. Remember, a replay of this call will be available starting one hour after this call ends today through midnight Thursday, May 7th. The access number is 402-220-0398. 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.

This does conclude today's teleconference. Thank you for your participation. You may disconnect at any time and have a wonderful day.