Good day everyone and welcome to the fourth quarter results conference call. [Operator Instructions] As a reminder, today's call may be recorded, but 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. The 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 forward-looking statements. I would now like to turn the call over to Ms. Gail Peck. Please go ahead, ma'am.

Thank you Josh. Good morning, everyone. Welcome to the Trinity Industries fourth quarter 2011 results conference call. I'm Gail Peck, Vice President and Treasurer of Trinity. Thank you for joining us today. Following the introduction, you will hear from Tim Wallace, our Chairman and Chief Executive Officer and President. After Tim, our business group leaders will provide overviews of the businesses within their respective groups. Our speakers are: Steve Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups; Antonio Carrillo, Senior Vice President and Group President of the Energy Equipment Group; and Bill McWhirter, Senior Vice-President and Group President of the Construction Product and Inland Barge Group. Following their comments, James Perry, our Senior Vice President and Chief Financial Officer will provide the financial summary and guidance. We will then move to the Q&A session. Mary Henderson, our Vice President and Chief Accounting Officer, is also in the room with us today. I will now turn the call over Tim Wallace for his comments.

Thank you, Gail, and good morning, everyone. I'm please with the improvements in our financial performance during the fourth quarter. All of our business segments, with the exception of one, produced solid results. 2011 was a significant growth year for Trinity; our businesses clearly demonstrated their ability to generate growth in specialized areas where demand was strong. I'm very pleased with the way they worked together to leverage our existing manufacturing capacity to take advantage of growth opportunities. During 2011, Trinity's annual revenues grew approximately 42%. If you extract the earnings associated with the flood insurance claims settled during the year, our normalized EPS growth was approximately 94% for the year. As we begin 2012, I'm very pleased with the positive momentum that is occurring within our company. The operating environment is in place for our businesses to generate operating leverage during 2012. Predicting operating leverage with precision is difficult because there are many factors to consider. Demand for rail cars in North America remains consistent during the fourth quarter. Orders in our Rail Group exceeded deliveries, resulting in backlog growth for the eighth consecutive quarter. Our rail car manufacturing business's ability to achieve operating leverage during the fourth quarter was an accomplishment due to the steep ramp-up these businesses experienced during the quarter. Their current production footprint provides a nice platform for further improvements. Our Rail Car Leasing business has great momentum. Their commercial team continues to originate rail car leases with attractive least terms that tie nicely with existing production plants. Our Leasing commercial team is also obtaining better terms for renewals on existing Leasing equipment. Strong rail car demand has created an environment that is ideal for selling rail cars from a lease lead into the secondary market. Our Inland Barge Group is also experiencing consistent demand.…

Thank you, Tim. Good morning. We are pleased with the 2011 operating results of the Rail and Leasing Groups, and the operating momentum building in both business groups at year-end. During 2011, our Rail Group increased production and operating profit in each quarter in route to producing over 14,000 rail cars. During the fourth quarter, our Rail Group posted an operating profit of $34.4 million, a 90% increase over the third quarter. Rail car shipments during the fourth quarter increased more than 41% when compared to the third quarter. Our rail car order backlog increased for the eighth consecutive quarter and is at its highest level since the fourth quarter of 2007. During 2011, our Leasing Group experienced consistently strong fleet utilization and strengthening lease rates. During the fourth quarter 2011, the Leasing Group posted a 34% increase in operating profit compared to the fourth quarter of 2010, due principally to higher lease renewal rates and profit from lease portfolio sales. Lease rate and renewal trends continue to remain favorable during the fourth quarter. Industry demand for new rail cars during 2011 outpaced general economic growth and was driven primarily by orders for rail cars needed to transport crude oil from shale and tar sands fields, small covered hoppers for sand use and shale frac-ing operations and large covered hoppers for minerals and agricultural products. In the long run, we believe the demand for rail transportation to support crude oil transport and gas frac-ing will continue to generate additional new rail car orders. Near-term, the current price and abundant supply levels of natural gas may negatively impact drilling plus reducing demand for frac sand and therefore, small covered hoppers. This cycle is very characteristic of many new markets we serve. At current oil price levels, we expect oil drilling and…

Thank you Steve and good morning. Since our last conference call, progress has been made towards resolving a number of challenges facing our wind tower business. We will provide only a small level of color about this business today, due to pending litigation and contractual disputes that are still in the process of being resolved. You will recall that to accommodate a customer, we transitioned last May from manufacturing 80-meter towers to manufacturing 100-meter towers. Since then, we have encountered a variety of issues related to this transition. During the fourth quarter, we made progress working through a number of these issues. One of our priorities has been to enhance our manufacturing flexibility so we can respond efficiently to customer needs. We have made significant progress in this area, and are currently in the process of transitioning back to 80-meter towers at some of our facilities under the terms of our original contract. In respect to contractual issues, we expect customers that have placed orders with us to fulfill their commitments. To the extent that customers require contractual modifications and we can identify terms that are mutually acceptable to both parties, we will work towards a resolution. We are currently in the middle of discussions with customers about contract modifications. These discussions are moving slowly due to the complexity of the issues involved. You may be aware that Trinity Structural Towers has joined a group of other U.S. wind tower manufacturers in a trade case against wind tower imports from China and Vietnam. For the past few years, U.S. wind tower manufacturers have seen what we believe are unfair pricing practices on the part of wind tower manufacturers in these countries. Last week, the International Trade Commission unanimously decided that there is enough evidence to support an investigation. We're closely monitoring developments in this case. With respect to the other business lines within the energy equipment group, I am pleased with the solid revenue increases we experienced throughout the year. Our businesses clearly demonstrated their ability to react, to specialized demand to take advantage of growth opportunities. I will now turn it over to Bill for his comments.

Thank you Antonio, and good morning, everyone. Our Construction Products Group continued to perform well during the fourth quarter, producing an operating profit of $11.2 million for the quarter compared to $6.7 million in the same quarter a year ago. This significant improvement in results was primarily due to 2 factors: relatively mild winter weather that has continued into 2012, and to a larger extent, the success of our efforts in 2011 to reposition this segment. During 2011, we reduced our exposure to Ready Mix concrete while growing our highway products, construction aggregates and galvanizing business lines. All of these business lines provide us the potential for higher margins with reduced market volatility compared with the Ready Mix concrete business. Looking forward into 2012, I see more opportunities to grow our higher margin businesses through acquisitions and continue our efforts to improve our overall returns within the Construction Products Group. Moving to our Inland Barge Group. For the fourth quarter, our barge business had sales of $150 million and reported operating profits of $39.6 million. $17 million of these operating profits were a one-time gain related to the flood that occurred at our facility in May of 2011. The net result is a normalized profit of $22.6 million for the fourth quarter which compares with $18 million in the same quarter of 2010. Barge movement of petroleum products, chemicals, and coal continues to be strong. During the quarter, we signed $80 million in new orders. Our barge backlog now stands at $495 million at the quarter's end. Market activity for new barges for 2012 and 2013 continues to be encouraging. Overall, I am very pleased with the 2011 performance of both our barge and construction products groups. Our team of employees had an excellent year. At this time, I'll turn the presentation over to James.

My comments relate primarily to the fourth quarter of 2011. We will file our form 10K later today. For the fourth quarter of 2011, Trinity reported earnings of $0.70 per common diluted share. This compares to $0.22 per common diluted share in the fourth quarter of 2010. Revenues for the fourth quarter of 2011 increased 48% to $942 million compared to $636 million of revenues in the same quarter last year. This is resulting from a higher level of railcar and tank barge deliveries, continued growth in our railcar leasing operations, and an increased level of railcar sales from the leasing portfolio. Trinity's operating profit increased 72% during the fourth quarter to $139 million and our EBITDA increased to $188 million from $122 million in the same quarter of 2010. The reconciliation of EBITDA was provided in our press release yesterday. The results for the fourth quarter of 2011 include a pre-tax gain of $17 million or $0.14 per common diluted share related to the final settlement for the disposition of insured property, plant, and equipment damaged by a flood at Trinity's Missouri barge facility last May. The insurance claim related to the flood is now closed. As we mentioned on our last conference call, our earnings guidance for the fourth quarter did not include this gain. Our fourth quarter 2010 results included a pre-tax charge of $6 million or $0.04 per common diluted share related to the redemption of the company's senior notes. For the total year 2011, our revenues increased 43% to $3.1 billion compared to $2.2 billion in 2010. Our earnings per common diluted share in 2011 were $1.77 compared to $0.85 in 2010. Our operating profit was $425 million in 2011, compared to $304 million in 2010, and our EBITDA totaled $616 million, compared to $488…

[Operator Instructions] We will pause for a moment for any questions to populate the queue. Our first question comes from Steve Barger with Keybanc Capital.

This is actually Alex Walsh sitting in for Steve. Thanks for taking my questions. First off, pretty solid order activity in the quarter. I was wondering if you could just talk to or characterize what you are seeing in terms of order rates and inquiry levels thus far in this year.

Alex, are you talking -- which business? All of our businesses?

For the Rail Group.

Oh, for the Rail Group? Steve, why don't you take that.

Sure, Alex. We've seen fairly consistent demand here in the first quarter compared to the fourth quarter. Again, as I mentioned in my comments, with gas prices weakening, we are seeing some slowing down in near-term gas drilling, but we would expect that that would pick up somewhere down the road. But generally, consistent demand here in the first quarter, that we saw in the fourth quarter.

Okay. And it looks like implied price per car in the backlog took a nice step up. I know that can be impacted by mix. I was wondering if you could just talk directionally about pricing for both new cars and lease rates, and how that kind of compares to this same time last year.

Okay. Steve, do you want to take it?

Sure. It's always difficult to generalize about pricing, as you mentioned, because of mix and other issues. But clearly, we're seeing strong demand, with the existing fleet very much in equilibrium and fully utilized and extended production backlogs. That really contributes to a very strong pricing environment, as evidenced in our renewal trends, and we're clearly seeing increased prices in our new rail cars as well.

OK. I guess as I think about pricing and what sounds like production possibly leveling off, given the targets that you've talked about, as you got the infrastructure in place to really expand margins, how you guys thinking about incrementals relative to prior cycles? It looks like on implied, it's maybe a low double-digit incremental, and I think you've done a north of that in the past.

Sure, Alex. This is James, and as we indicated, we are at relatively steady level of production going into this year. We indicated margins of 7% to 9% in the first quarter, and every cycles going to be little bit different. You are still looking at a level of cars this year that is well south of the peak in the prior years. We produced 28,000 cars or so; the industry was producing north of 70,000 cars. So while demand is strong right now, it's hard to speculate too far out beyond the next couple of quarters on what margins may do given the embedded pricing and leverage we're able to achieve.

OK. That's helpful. And one more before I jump back in line: you talked about the implications of oil and gas demand on the Rail Group, but I was wondering if you could kind of talk through the implications for Barge and what your longer-term expectations were there, and I guess maybe just kind of comment on order rates for the quarter as well.

Bill?

Yes. I guess I will start with the order rate in the quarter. I think, consistent with Steve's comments, we're seeing a nice demand in the business. Business does tend to be a little seasonal in orders, with third quarter typically being a little higher than fourth quarter, but I am encouraged by the overall market activity. Again, much to Steve's' comments, I think the tank barge business in particular has benefitted from the move of petrochemicals and chemical products, and we've seen what I would call a fairly robust demand throughout our product line on the tank barge side.

Next question from the site of Bascome Majors with Susquehanna.

Looking at the order, delivery and the backlog trends in your Rail business, pretty much across the board, you gained share this quarter and outpaced the industry. I was curious if you could talk a little bit to why you think you're gaining share at this point of cycle -- is that strategy? Is that mix? Is it a little bit of both? And sort of how you feel about your position there and where it might move in the next few quarters here.

Steve?

For sure. Bascome, as we talked many times on this conference call, we don't really drive our business by market share. Market share is a number we measure kind of as an output, and we're really focused on orders that support our production plan and support the product lines that we find to be most profitable for us. And generally, we see demand consistent with our production plans, and we were able to continue to fill our production lines with orders that we're currently making. So there are some areas in the marketplace that we have less interest, where we see pricing levels less attractive and where competition is much more heated, and we saw orders for cars in the fourth quarter for some of those. So it really depends upon mix and now we look at the business going forward and what cars we're producing, but market share really isn't something that drives our day-to-day decisions.

Could you be a little bit more specific about those where you're deliberately not playing now, just out of curiosity?

Well, as I mentioned in my script, about 25% of new orders during the fourth quarter for inter-modal cars, that's not a market that we're currently heavily focused on.

Okay. Well, thank you. And could you talk a little bit, with your order uptick, could you talk a bit about the customer mix and maybe how that's changed in the last few months and subsequent to quarter-end?

Yes, Bascome, Steve again. In answering that question, really look at 2011, and I think one of the largest developments from our customer mix standpoint was the return of third-party lessors. Third-party lessors have been active in the marketplace, ordering new cars, and I see that as a big change in 2011 versus 2010, and I would expect third-party lessors will stay active in the business in 2012, given the supply/demand levels and the attractive nature of investment opportunities. Railroads are buying cars, industrial shippers are both buying cars and leasing cars, so we really see a broad customer base responding in the current market.

Okay. And I'll just take one more and hop off. Can you talk a little bit about TRIP and sort of its profit contribution and if you could see that becoming more material in the future.

Sure. This is James, Bascome. TRIP is at a relatively steady level right now, as you know. TRIP has the opportunity to do the same thing as our Leasing business is doing with seeing renewal rates and those type things. You will see in the 10-K some car sales from TRIP from time to time. But, you know, TRIP is working through its operating efficiency as we look at lease rates and expenses and those type things as our overall Leasing business is. We did recapitalize TRIP last year, so you see a different level of interest expense that's detailed in the 10-K as well. But in terms of it becoming more material, right now, as TRIP is positioned, it's a relatively steady size, and so its size in relation of materiality to the overall Leasing company, we don't see changing much in the near-term.

Our next question comes from the site of Allison Poliniak with Wells Fargo.

Bill, just going back to the barge, if I remember correctly, I think the dry barges have been the primary production that you guys have been doing, but it sounds like, obviously, a lot more interest on the tank barges. Could we expect maybe a more favorable mix as we move toward the back half of 2012 as a result, in that segment?

I think, Allison, I think the mix is going to be relatively consistent. Our plants now are at a very, very high production rate. I never call it 100%, but we are running at a pretty hot pace in all of our facilities. So I think the mix you fill find will be more in whether the tank barges will be in 30Ks, 10Ks, hot oil or clean oil barges. And so that can drive the margin a little bit, but overall, it's probably pretty steady as we go forward.

Your next question comes from the site of Paul Bodnar, with Longbow Research.

A couple of questions. First, it's just on the guidance. It seemed like in the quarter, your 18,000 to 20,000 deliveries for 2012, obviously, you've kind of exceeding that pace in the fourth quarter. I was just wondering if you're kind of being conservative for the back half of 2012, or if you could just give a little more detail on that.

Steve, you want to take that?

Just to be clear, I think what I said was we're projecting deliveries at this time in 2012 of 18,000 to 20,000 cars, and our production level in the fourth quarter was slightly above 5,100 cars. So, I think what we're looking at right now, Paul, is that for the next few quarters, we would expect a stable manufacturing environment from a production level standpoint. We'll see where the market goes from there, and react and adjust accordingly for the second half of the year. We remain flexible. We've got the ability to scale up if we see demand continuing to increase. We're comfortable with producing at our current levels, and if the economy goes a different way, we're prepared to take actions there too.

You know, I guess along those lines, tank car demand for these oil shale plays seems to be pretty strong, and from what I understand, you guys are pretty much sold out for 2012 on the tank car side. What would it take to open up some initial production?

Well, I think we stated over the last couple quarters, too, that before we open up additional capacity, we want to be confident that there is sustainable demand, and sustainable demand is more than demand for a couple of quarters. So, when we see that type of sustainable demand, our plants are very flexible. Obviously, we have idle facilities, but we also have facilities making other product lines that, if we see keen opportunities, we're able to shift those product lines at those plants and move into producing rail cars. In fact, if you look back a few years ago, we were building rail cars at a number of plants. Our rail car business began to slow, wind towers was taking off and we were able to convert those plants to wind towers, and similarly, we went back the other way. So our flexibility is really our key in responding to market shifts, and we really do keep our ear to the ground in the market to anticipate those shifts and be ready to move if we see sustainable demand.

Do you think you'd actually convert one of wind facilities back to tank car production, or would you probably go with a new one?

It really depends upon the circumstances at that time, Paul. But we certainly have that flexibility, and we evaluate that continually, on a regular basis.

And then, I just want to make sure I heard something right on the Barge side. Did you say 13% to 15% operating margin was the guidance for the quarter?

Yes, Paul, that is correct.

Give just a little more detail on that, too, just sequentially. I mean, even if you kind of make the adjustments for last year, that will be kind of be below any quarter, I think.

Bill?

No, Paul I think if you make the adjustments for last quarter, we would have been sitting in Q4 2010 at somewhere around 14.5%. Normalized on this quarter, we come off about 15.1%, 15.2% so, very much in line with that kind of mid-teens margin perspective.

Okay, and I guess, one last question is on the oil shale and the tank car side. I mean, are those customers leasing or are they buying, or what kind of mix are you seeing on that?

This is Steve again, Paul. We've actually seen both. We've seen some exploration companies, we've seen some producers, we've seen oil brokers both buy cars and lease cars.

What kind of terms are you on leasing? Are you going pretty long on those?

I prefer not to comment about specific commercial terms on our leases.

The next question comes from the site of Sal Vitale with Sterne Agee.

I guess the first question is on the lease side, so just trying to understand the guidance you gave there. So basically, you're saying $0.03 to $0.04 per share of lease gains in 1Q, and that works out to about $4 million to $5 million. So, I'm just trying to get sense for how that compares to 4Q. In 4Q, it was more like $0.14 or $0.15, $18 million. So, what was so unique about 4Q? I mean, was it that you just saw the opportunity to sell cars at attractive prices, and could you see another type of quarter maybe, not $18 million, but, say, something like a $10 million quarter at some point this year? I mean, is your guidance just a little bit on the conservative side as it pertains to that?

James why don't you take that?

Sure Sal, I'll tackle that for you. The guidance we give is where we see the market right now and the secondary market conversations we're having. Clearly, the fourth quarter was higher than we saw in the third quarter and we're projecting right now. We did have a lot of good opportunities in the fourth quarter. It allowed us to do some diversification to achieve some nice returns, and as we see opportunities, just like in the manufacturing side, that are attractive for us to take part in the secondary transactions, we'll certainly look at those very carefully if they fit the different goals we're trying to achieve. So, we would tell you this is where we see things right now. We wanted to be sure you had an understanding of what was embedded in our guidance, and if we have adjustments to that as we go forward in the year, each quarter, as we update our guidance on these calls, we'll provide that detail.

Okay, that's helpful. Then, also another question on the lease side, can you give us a sense of, and I'm sorry if you already mentioned this earlier, but how much of your, and I guess overall between TRIP and your core lease fleet, your overall lease fleet, what percentage of the leases, of the cars under lease, are coming up for renewal this year? And to follow-up on that, roughly how far below the market are they currently?

James?

Yes, I'll handle that. The first part of your question, how much is up for renewal, the average lease remaining term in the overall portfolio is about 3.5 years, so that would tell you that about 1/7 or kind of that 15% ballpark renews in a given year. We don't have any given year where that is abnormal. We don't get real specific on that but I don't think this year is going to be abnormal versus the last couple of years or the next couple of years, given that remaining lease term. The second part of your question, how much of that is under market per se, we certainly don't get into that. As Steve said, we are seeing renewal trends favorable and new lease terms favorable but it's really hard to dissect, nor would we, for competitive reasons, dive too much into specific lease pricing or what may be up for renewal.

OK. Then if I could just switch over to the manufacturing side for a moment, if I look at the guidance of 18,000 to 20,000 cars for the year, what would you say could account for the variability in that range? Is it mostly on the energy side, the shale play?

Steve?

Sure, Sal, Steve Menzies. Well, first of all, we have commercial risk in that we do still have open production spots and order places yet to be sold this year. So that is a variable that kind of heads the list as far as what determines the 18,000 to 20,000 range. And we still are experiencing operating efficiency growth and we still have productivity growth. So our operations group, while improving, still has more improvement to make, and there are certainly continued challenges in that. The last thing, I would say, is supply chain. While today, we've not had any major supply chain interruptions, the supply chain is still very tight, and they, too, are struggling to ramp up their operations. So I would look at those 3 components as major variables to our production output for this year.

Our next question comes from the site of Zahid Siddique with Gabelli & Company.

My first question is on the wind customer. I know you won't comment on the specifics, but you did, in one of the press releases, indicate that you have a backlog of about roughly $410 million with regards to this customer. How much of that is in production? I'm trying to kind of put a handle on the actual cost on your end.

James?

Sure, sure. This is James. When you look at that lawsuit that was filed in the press release and the details there, we did indicate that we did not have any production capacity right now reserved for fulfilling orders from that backlog, given we don't have those commitments in hand. So that is in the backlog as there's a firm commitment from that customer to buy wind towers from us, but right now, we don't incorporate that as part of our guidance, given the production planning that we have.

OK. So, in the extreme case, you wouldn't really be losing anything, there. It's just the incremental gain that you're worried about, if I understand.

I think that 's fair. We certainly have wind tower capacity that we're filling with orders that we have, but right now we don't assume there's any production space dedicated to that backlog.

OK and my next question is on the frac-ing and oil and tar business. How much of the cars, either in the backlog or in orders, are related to those businesses?

Zahid, this is Steve Menzies. We don't disclose specifics about our backlog by car types or customers, but certainly it's had a significant impact on the entire industry, both in deliveries in 2011, as well as order backlog for 2012.

OK. Last question is on the Q1 guidance. I guess back in Q3 when you guided Q4 you said $0.38 to $0.43, and you came out at $0.56 if you adjust for the gains. Why for Q1 $0.43 to $0.48 when, I guess, your orders are higher, your backlog is better, you know, why not for Q1 say, you know, $0.55?

James?

James. Sure and I think we highlighted a couple of specific things. If you look quarter-over-quarter, the level of car sales we are anticipating is lower. That's where you had in the mid-teens range on an earnings per share. This quarter we're projecting $0.03 to $0.04. We're also projecting slightly more EPS elimination of profit as we ship more cars to the lease fleet first quarter versus fourth quarter. Otherwise, the business is as we've projected, the margins and revenues are up and down a little bit, but those are the two big changes I think I'd highlight quarter to quarter.

OK. So it's about a $0.10 delta on the gains and maybe some other on the eliminations?

Those are the primary items that we've highlighted, yes.

I see no further questions at this time. I would now like to turn the call back over to our speakers.

That concludes today's conference call. A replay of this call will be available after 1:00 Eastern Standard Time today through midnight on February 23rd, 2012. The access number is 4022200120. Also, the replay will be available on the 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. You may now disconnect and have a great day.