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. Good day, everyone, and welcome to the Trinity Industries' First Quarter Results Conference Call. Currently, all phone lines are in a listen-only mode. Later, there'll be an opportunity to ask questions during a question-and-answer session. Please be advised today's program may be recorded. It is now my pleasure to turn the program over to Ms. Gail Peck. You may begin.

Thank you, Aaron. Good morning, everyone. Welcome to Trinity Industries' first quarter 2018 results conference call. I'm Gail Peck, Vice President, Finance and Treasurer of Trinity. Thank you for joining us this morning. Today, we will follow the format we used on our last earnings call, which included a brief update on the progress we're making on our planned spin-off transaction. On this morning's call, you will hear more detail regarding the anticipated business alignment for the two standalone public companies. Following the call, slides covering today's business alignment discussion will be filed in an 8-K as well as posted on our website www.trin.net under the Trinity's Spin-Off tab and the Events & Presentations tab of the Investor Relations section. We are pleased to announce that Antonio Carrillo, the future President and Chief Executive Officer of the new infrastructure company, officially joined Trinity this week as Senior Vice President and Group President over the Construction, Energy, Marine and Components Group. And he is in the room with us today. Antonio will serve in this role throughout the period, in which Trinity continues to pursue the spin-off. Scott Beasley, the future Chief Financial Officer of the new company, will provide today's commentary for the Construction Products, Energy Equipment and Inland Barge Group. Scott joined Trinity in 2014 and is currently serving as CFO for these business groups and previously held the role of Vice President of Corporate Strategic Planning for Trinity. Today's speakers also include Theis Rice, our Senior Vice President and Chief Legal Officer; Tim Wallace, our Chairman, Chief Executive Officer and President; Melendy Lovett, our Senior Vice President and Chief Administrative Officer; Eric Marchetto, our Executive Vice President and Chief Commercial Officer for TrinityRail; and James Perry, our Senior Vice President and Chief Financial Officer. Following prepared remarks, we will 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 to the Theis Rice.

Thank you, Gail, and good morning. In our last call, I reported on the status of the Joshua Harman False Claims Act litigation pertaining to the company's ET-Plus guardrail end terminal system. As noted, the United States Court of Appeals for the Fifth Circuit reversed the Trial Court's judgment and rendered judgment for Trinity as a matter of law. Following the ruling, the Fifth Circuit also denied Mr. Harman's petition for rehearing. Mr. Harman, thereafter, filed an appellate petition with United States Supreme Court requesting review of the Fifth Circuit's reverse and rendered ruling. Harman's petition was initially distributed to the Supreme Court for consideration at its April 13, 2018 internal conference. The Court has since noted on its public docket that Harman's petition would be rescheduled for a future conference. The Supreme Court reviews petitions over the course of its annual term and can rule at any time depending on multiple factors. Ultimately, whether Mr. Harman's petition for review is granted or denied is wholly discretionary with the Court. Historically, the Supreme Court grants approximately 1% of the hearing requests it receives. I have also reported previously on lawsuits regarding the ET-Plus that were filed in the wake of the original jury verdict in the Harman case. While we continue to incur costs associated with our defense in these cases, we are supported in that defense by the Fifth Circuit's unanimous panel opinion, in which the court recognized that the ET-Plus internal system meets all applicable federal safety standards and the government has never wavered in its approval of the product. For a more detailed disclosure of the False Claims Act case and the company's other litigation, please see Note 18 to the financial statements in Trinity's Form 10-Q for the period ended March 31, 2018, which will be filed today. Additional information on the False Claims Act case and a copy of the Fifth Circuit's opinion can be found at www.etplusfacts.com. I will now turn the call over to Tim.

Thank you, Theis, and good morning to everyone. We're off to a good start this year. Our consolidated financial results for the first quarter reflect the weak business conditions that persisted during the last few years. Today, market fundamentals and several of our businesses are encouraging. We see positive momentum with respect to the level of order inquiries for some of our products. Historically, when this occurs for an extended period of time, it tends to be an early sign of an eventual increase in demand. It's difficult to precisely predict when a market is making a sustainable recovery. However, the current atmosphere reminds me of previous downturns when demand began moving in a more positive direction. We're closely monitoring this situation and will respond accordingly. I'm pleased to report that we're making good progress towards achieving our goal of a seamless and efficient spin-off of our infrastructure businesses to our shareholders. Having Antonio onboard at this stage of the process is very helpful. He will immediately begin to add value as well as provide input to the pre-spin activities. Before Melendy gives her update on spin-off related matters, I will provide some insight regarding the alignment of our businesses between Trinity and the infrastructure company. Following this spin-off, the businesses that will comprise the infrastructure company include our construction aggregates, trench shoring, wind towers, utility structures, tank containers for gas and liquid products, Inland Barge, our forging and casting components businesses. It will also include our businesses in Mexico that manufacture these types of products. Post spin-off, Trinity will comprise primarily our rail-related businesses, including our Railcar Leasing and Management Services business, our railcar manufacturing businesses in the U.S. and Mexico, our railcar maintenance business, our railcar aftermarket parts business as well as our tank car heads business. As we've reviewed several potential alignments of our business and discussed a number of key factors, we decided that our highway products business should remain with Trinity. Keeping highway products within Trinity will provide continuity for ongoing litigation management. We also spent time discussing the placement of our forging and casting businesses that manufacture a number of products, including railcar axles and couplers as well as other industrial products for customers that serve infrastructure market. We believe these businesses will be well-positioned for growth as part of the infrastructure company. Antonio and I are enthusiastic about our respective opportunities to lead these organizations. Trinity's achievements during the first quarter reflect the skills and talents of our people. Our organization has a performance-driven culture that is characterized by flexibility, collaboration and responsiveness. These attributes have contributed to our success during the past several years as our businesses have responded to challenging market conditions. These same characteristics are proving highly beneficial as we move through the spin-off process. I'm excited about the future of our company and the potential opportunities for both Trinity and our new infrastructure company. I will now turn it over to Melendy.

Thank you, Tim, and good morning, everyone. Planning and execution of the spin-off of Trinity's infrastructure-related businesses has continued to progress well following our fourth quarter earnings call in February. Our teams are working together alongside our advisors to create what we anticipate will be too strong and valuable public companies. At this time, we remain on track to complete the spin-off in the fourth quarter of this year. Since our last call, we've continued to work with the IRS regarding our private letter ruling filed in February. We have made additional progress in finalizing key elements of the initial Form 10, which we plan to file with the SEC in the second quarter. As a reminder, the Form 10 is the primary public filing describing the infrastructure businesses that are being spun-off. The business segment alignment that Tim discussed is an important milestone for this filing. We are also in the process of preparing the new infrastructure companies' historical financials, which are also a key part of the Form 10. These financials will reflect the last three years for the new company as if it were a standalone entity during that time. We also expect to finalize the name of the new company by the time we file our initial Form 10. The strategic direction and capital allocation priorities set by each executive management team and board of directors will be critical elements in establishing their new capital structures once the spin-off is complete. We look forward to sharing this information with you in due course. Numerous other matters related to day one separation and transitional services requirements are underway and proceeding well. Trinity's cross-functional team of leaders assisting with the transaction and separation is doing a tremendous job and has been very successful at minimizing disruption to our day-to-day business operations. The effort the spin-off team is undertaking is significant and the spirit in which they are approaching this effort embodies our core values of flexibility, collaboration and dedication to excellence. We are grateful to all of our employees who are continuing to deliver quality business results to both internal and external stakeholders as we work through the spin-off process. While we are focused on a successful spin-off, we are also focused on operating as one Trinity company until the spin-off is complete. We will continue to update our stakeholders on our quarterly earnings calls and at other times as appropriate. I will now turn the call over to Scott.

Thank you, Melendy, and good morning, everyone. Over the years, Trinity has built a strong platform of market-leading businesses to serve infrastructure markets. I am honored to be part of the new company's exciting future. We are working well together as a leadership team and Antonio and I look forward to sharing more details about the company and our strategy in the upcoming months. Today, I will provide commentary on the Energy Equipment, Inland Barge and Construction Products groups and you will hear directly from Antonio on future earnings calls. Turning to results for the first quarter, the Energy Equipment Group reported lower revenues and operating profit compared to last year. Overall, our results continue to reflect mixed-market conditions for our Energy Equipment businesses. Additionally, our wind towers business experienced a one-time impact from revenue recognition rules that will be detailed in our 10-Q filed later today. One factor driving our year-over-year decline in Energy Equipment revenues was the amendment of a long-term wind tower agreement that we discussed on our last earnings call. This agreement extended deliveries into 2020, but reduced expected volumes in 2018. We continue to anticipate a relatively stable level of wind tower production throughout this year. As we have indicated on many of our previous calls, the scheduled phase-out of the production tax credit for wind power continues to put pressure on wind tower margins. On a positive note, our utility structures business improved its year-over-year performance during the first quarter, driven by increased volumes and pricing. Project sizes remain small, but bidding activity continues to be strong. We remain optimistic about long-term market fundamentals. The country's need to replace aging infrastructure, to improve the reliability of the grid and to connect renewables and other new sources of generation continued to support our positive long-term…

Thank you, Scott, and good morning, everyone. The first quarter performance for the business segments within TrinityRail reflects both the scale and strength of the integrated business model which differentiate our railcar leasing, manufacturing and service platforms. I will provide comments on the rail market, our commercial activity and operating performance of our TrinityRail platforms. North American rail traffic volumes were positive during the first quarter as compared to last year's first quarter despite weather and service-related challenges that negatively impacted rail system fluidity. As industrial production gains momentum and new business investments continue, we believe demand for railcars is also improving. We're experiencing increased demand for railcars across many commodity markets and available railcar equipment in these markets is tightening in response. The North American railcar active fleet grew during the first quarter as over 25,000 previously idle railcars were placed into service. We remain encouraged by improving railcar fundamentals. We remain active within the railcar secondary market with two transactions completed during the first quarter. We sold a small portfolio of railcars to an RIV partner to complement their previous portfolio acquisition from TrinityRail. Institutional investors continue to show interest in investing in railcar lease portfolios. As referenced during our last call, we acquired a portfolio in the secondary market of approximately 1,100 tank cars at a discount replacement value. Many of these railcars were off-leased at the time of purchase, negatively impacting our quarterly utilization statistic. We have placed some of these railcars into service already and based on our recent commercial activity, we are optimistic we will be able to place a majority of these railcars into service in the near term. We are watching the market closely and planning additional portfolio purchases in the secondary market this year. We continue to grow the TrinityRail lease…

Thank you, Eric, and good morning, everyone. Yesterday, we announced our results for the first quarter of 2018. For the quarter, the company reported revenues of $831 million and earnings per share of $0.26, including transaction expenses of $0.04 per share related to the company's planned spin-off. This resulted in an adjusted first quarter EPS of $0.30 for core earnings for the first quarter, matching last year's earnings level for the same quarter. During the first quarter, we invested $318 million in our wholly-owned leased fleet, including new railcars, secondary market purchases and modifications and invested $41 million at the corporate level and across our businesses. During the first quarter, we also invested $50 million in share repurchases with a purchase of over 1.5 million shares of Trinity stock under our new program. We will provide updates on any additional share repurchase program activity as we report each quarter's financial results. Earlier this week, we provided a notice to call our $450 million of convertible notes at par on June 1. This is our first opportunity to call these notes since issuance in 2006. A call of the notes will likely force holders to convert since the current stock price is above the current conversion price of $24.13 per share. We are required to settle the par amount of a conversion in cash and have the option to settle that in-the-money premium above $450 million in cash, stock or a combination. We intend to settle the conversion fully in cash. Therefore, beginning in the second quarter, we will no longer carry any EPS dilution related to the premium. At yesterday's closing stock price, the premium would equate to 4.5 million shares of dilution and the aggregate cash payable amount upon conversion would total approximately $590 million. The aggregate amount payable…

And we will take our first question from Allison Poliniak with Wells Fargo. Your line is open.

Hi, guys. Good morning.

Good morning, Allison.

James, I just want to go back to the margin commentary around rail. You significantly outperformed in Q1. It seems like you have decent visibility there. I mean, should we expect another significant step-down sequentially in Q2? I mean, look, how is the cadence of that in terms of how we should think about margin and is it price, is it mix, a little bit of both? Any comments there?

Yeah. Allison, it's going to move around quarter-to-quarter. We've maintained our 8% for the year as we look at what's in the backlog, as we look at our planned production. That will step down a bit as we go through the year, given the number of cars we've produced in the first quarter and the guidance for the year. First quarter, efficiencies were very good. The mix of orders and the pricing on those railcars were a little bit higher that were on the backlog that we produced in the first quarter and that's going to move around quarter-to-quarter. So, without giving sequential cadence as we go through the year, we do look at reverting back to the 8% as we look at 2018 in total.

Okay. Thanks. And then, just a commentary around Highway staying with Trinity Corporate on the rail side, and I'm not sure how much you can talk about this, but what's the long-term plan there? I mean, are we waiting for the case to be handled and then a decision could be made with that business? Does it go back to infrastructure if a decision is made sooner? How should we think about that business longer term?

Yeah. Allison, not much more to say beyond what Tim was able to share and we were pleased to tell everybody about the business alignments today. The long-term plan for Highway right now, we've not really talked about is status quo for running the business. We've got a good line of products and the teams are doing a good job producing good results. But in terms of resolution of the litigation, we continue to expect that to wind down. That will be a favorable thing for the business, but we've not yet talked about already to visit much on long-term plans, but we do anticipate, at least at the spin-off, as we said, that the business would be with Trinity.

All right. Thank you.

And we can take our next question from Prashant Rao with Citigroup. Your line is now open.

Good morning. Thanks for taking the question. I wanted to ask about the 45% of Rail Group manufacturing that's going to the leased fleet. It's higher than it has been historically. Just wanted to get a sense of what are the end-markets that are driving that demand for leasing, any particular types of cars? Any color around that would be helpful?

Eric?

Hey, Prashant. This is Eric. In terms of mix driving leasing, generally, our customers drive whether they're going to purchase or lease railcars. We really don't influence that in each individual transaction. But in terms of the markets that are more lease heavy, it's the traditional ones. A lot of the tank car markets are generally leased products. And then also, on the covered hopper side, some of the specialty covered hoppers and also some of the general service covered hoppers are all leased products.

And, Prashant, as Eric said, it's really customer-driven, but we're fortunate that we are able to provide a direct sale or a lease. And what we're even more fortunate is with the RIV platform, a lot of those cars that we put into the lease fleet will be sold to our RIV partners. So, they end up being – we get the proceeds from those, whether (34:12) timing. But it really gives us nice inventory to meet the demands of our institutional investors. We've been in the 40s before. It tends to be cyclical to some degree. As Eric said, based on which products that you ask very astutely are really in the order book right now. We've been in the 40s and we've kind of been in the 30s the prior years before last year.

Okay. That's very helpful. Thanks. And then, a question on the guidance, might be slightly weird one, but the transaction expenses that are to be excluded stepped up versus the previous guidance. I wanted to get a sense of what was driving that if it's a sign of maybe acceleration as you go to the past to the spin-off as you're moving along maybe a little faster than you initially expected or were there may be some other costs in there that – I know these are sort of squishy targets, they're hard to really ballpark, but just any color to read into there would be great?

Yeah, Prashant. This is James. We are still anticipating a fourth quarter transaction. So, I wouldn't attribute it to that. Really, as we've gone through the process, even in the last couple months, we've got more visibility into what expenses are needed, everything from the IT type things we need to do to set both companies up to operate independently to some HR type things, working with our advisers. So, I wouldn't point to any one particular item, but we thought it was appropriate to move that guidance up a little bit to give you a sense of how the corporate expenses are moving.

Great. Thank you very much. I'll turn it over.

Thank you, Prashant.

And we will take our next question from Bascome Majors with Susquehanna. Your line is open.

Yeah. Thanks for taking my question, guys. It is encouraging to see you, guys, put some capital to work in your own stock this quarter with the $50 million common repurchase and the effective 150-ish-million buyback via the convert retirement. So, I assume that convert retirement doesn't count at all against the $500 million plan that you laid out in December. Can you guys confirm that and whether or not the EPS guidance update includes any accretion from that convert?

Yeah, Bascome. This is James. Thanks for picking up on that. Yeah, we were pleased to do the share repurchase in the first quarter and pleased to be able to call the convert and use our capital to do that cash and financing that we plan on doing. It does not technically count against the share repurchase program as you pointed out. However, to your point, it does remove dilution. So, it has the same impact as making a share repurchase. So, in the guidance we gave previously, we did not yet assume that the convert was going to be called. It was too early to make that determination. So, we still had dilution from those shares that would have counted. As I mentioned now, it's about 4.5 million in our first guidance that we provided earlier this year. That is now out. So, really the biggest change in the guidance moving up $0.05 at the low and top-end of the range is related to now that dilution being removed.

Okay. And I appreciate that. And I know you've said you're not going to provide any color on the cadence repurchases and I'm not asking you to, when the board looks at this, like is it an opportunistic look at the stock price and assessment of value or should we think about kind of a pro rata way to deploy capital as you move through the year and into next?

Yeah, Bascome. It's James again. Hard to give a lot of insight there. We certainly have conversations with the board each quarter and even between quarters of course, but it's a myriad of things. Everything from other opportunities we have to deploy our capital, the capital we think we're going to need down the road. So, there's really a lot of things. I wouldn't point to one in particular nor provide any guidance as to what the plans are beyond the first quarter.

Fair enough. And I'll just ask one more very high level one. I mean, there's a lot going on, a lot moving parts between now and the end of the year between the transactions and the capital changes. But maybe for Tim, if you take a step back and we were to fast forward to April 2019 and everything goes as planned, what does an optimal outcome look like for Trinity post the spin? How will the businesses and strategies look different from where they are today, just a very 10,000-foot view?

Well, this is Tim responding. When you look out into the future, one of the main benefits we're going to get is the concentration of focus on a smaller portfolio of businesses that Antonio will have in the infrastructure, meaning, the rail business which is the largest in our portfolio now will be part of Trinity. And then, as far as Trinity goes, you could have a concentration of focus. What and where we see opportunities within that rail ecosphere, so to speak, and then areas of opportunities that we see that we can grow and expand our portfolio of leased railcars as well as our manufacturing footprint as well as the services that we have to be able to offer the move into the value chain that is within that rail ecosphere. So, we're very excited about both companies being in a position with boards that can have great strategic reviews and discussions of the opportunities in those particular businesses. And so, probably in the first quarter, second quarter of 2019, you will then have more conversations about the visions of the companies and the opportunities that we see and where we're trying to drive the resources in the companies, in those particular areas, whereas right now we're primarily focused on let's keep business as usual, let's pursue the opportunities that are starting to emerge within our particular markets. If we see something that's very intriguing in the acquisition area, then we will definitely put some resources towards that area, but we're not really focused on what is the long-term vision for the companies because we're going to be adding some more board members and we want to be sure that the board members that we get are included in that process.

And, Bascome, this is James. I would add from my chair and you alluded to this a little bit earlier, Tim mentioned the clarity of focus that allows us to really focus our capital structures as well for both companies, so we can appropriately look at what the leverage ratios need to look like, the cash flows that support those leverage ratios are and then also where to invest that capital, to your point whether its share repurchase, acquisitions, leased railcars, those kind of things. So we really look forward to executing on the visions and providing more clarity on that in the coming quarters.

And I appreciate that detailed response just from both of you guys. As far as the timeline goes, you said that Form 10 will be out in 2Q. Is that a May or June timeframe sort of outcome and are you planning an Investor Day or some sort of other event ahead of the spin to really kind of lay out the strategy in more detail?

Yeah, Bascome. It's James. I'd say – we're still looking at second quarter. We don't have much more details on that. In terms of investors, we certainly plan to get out and see our investment communities. In terms of where that is and what the format is, watch for details to follow in the coming months.

Thank you for the time.

And we will take our next question from Matt Elkott with Cowen Research. Your line is now open. Matt Elkott - Cowen & Co. LLC: Good morning. I want to go back to the Rail Group margin question. So, you guys maintained your delivery guidance for the year despite what seems to be an accelerating demand environment. So, I guess it's reasonable to assume that there's a decent amount of upside to this guidance in 2018. And, Eric, you mentioned earlier operating leverage. Can you help us maybe understand the extent of this operating leverage? Meaning, how many more railcars can you build beyond the current guidance without having to materially ramp up resources?

Yeah, Matt. So, we don't have a sold-out sign on our business. So, we can ramp up to meet customer demand whenever that customer demand is. As I mentioned, we are – lead times for material had moved as domestic steel markets have changed. That puts a little bit of a governor on what we have the ability to do. When I talk about operational efficiencies, one of the big things in our business is the amount of changeovers we have and our order mix this year is going to provide less changeovers than we've had in years past. So, that will have a positive impact on margins. And then, we're focused on lowering both our direct and indirect cost of the products we produce. So, we've got teams focused on all of those things. Matt Elkott - Cowen & Co. LLC: That's very helpful. Is there any way to kind of gauge, maybe have an internal rule of thumb at this point in the cycle? If you, for instance, produce, 1,000 cars more than your current guidance, what the impact on the margin would be?

Yeah. Matt, this is James. There's just not a rule of thumb. That's quite that simple. As Eric mentioned, it depends on are we making changeovers, is it extensions of current production runs, what type of products are they, those kind of things. So, we certainly have a lot of levers internally that we work on and we look at things when we take each order into each production plan as a rail team do that very frequently. But I wouldn't give you a rule of thumb that X equals Y. Matt Elkott - Cowen & Co. LLC: Got it.

This is Tim. We do like to pursue orders that we can tack on or layer on top of our existing ones. And when those are out there, we go fairly aggressive in that area. And Eric and Paul and the whole manufacturing team is really, really good at being able to drive efficiencies when they have base loads of railcars running and layer them on top of them. They do a tremendous job in that area. And as Eric said, we don't really look at ourselves as being sold out ever. We try to accommodate and we've got the flexibility within our company, with our people and our competencies of layering more production on top when the demand comes. Matt Elkott - Cowen & Co. LLC: That does make sense. I guess it's less of a concern now given how the market has turned in a favorable way over the past year, but I was looking back at the Rail Group margins historically and in past cycles during the down part of the cycle, things can get much, much worse than they have in this current cycle. I think the lowest you've registered in this current cycle was in 2Q 2017, which was 7.9%. I would assume that you guys are pretty confident at this point that this may be the floor in this current down-cycle?

Well, it's hard to peg where that is until we look backwards. But what's been very good for us the last couple of years, even in the down-cycle is our backlogs. And when you're operating in an environment, as you enter a down-cycle with backlogs and as you continue to get orders as we have last couple quarters, then you can really hone in on your production planning. As Tim said, Paul and the team do a great job of that. Eric's team does a good job of securing those orders. They keep those production lines going, but we won't project where margins are going to go the next few quarters that precisely quite yet. Matt Elkott - Cowen & Co. LLC: Got it. Thank you very much.

Thank you, Matt.

And we will take our next question from Justin Long with Stephens. Your line is now open.

Thank you and good morning.

Good morning, Justin.

Good morning.

So, maybe to dovetail on a question earlier about capital allocation, clearly there's a lot going on in the company right now with the spin underway. With that in mind, would it be reasonable to say that it's unlikely we see a material amount of capital deployed towards an acquisition or a buyback beyond the current authorization until the spin is completed? I just wanted to get your thoughts around the timing of capital allocation going forward.

This is Tim. I think that's reasonable to assume. We have a major program going on with this convert and capital being deployed there and resources being deployed there. You layer that Form 10 on, but we can handle a whole lot. We're always out in the secondary market looking for railcars and then we're always looking for business opportunities that we can add to our various businesses. And so, I don't think you'll see a real aggressive one of high dollar amount, but you will probably see some that are strategic to us and kind of building blocks for the future in some of our businesses. Antonio's area of expertise is identifying acquisitions and pursuing them. And the good news is he's going to have a lot of time on his hand the next two to three to four months where he can start networking and building relationships and looking at the business. And as the new board comes together there with his group, he'll be able to talk and be fresh with ideas. It's fabulous that he's not joining the company at spin. He's got a long pre-season here that he's going to really be able to work up a lot of opportunities in that business. And then, that frees me up to be able to spend time with the Rail Group. So, we've got a lot of positive things on the horizon that I think our shareholders and stakeholders can look forward to.

That's helpful. Thanks, Tim. And, James, going to my second question, I think you mentioned new railcar pricing today is not getting reflected in 2018 results. I was wondering if you could help put some more color around that comment. If you applied new railcar pricing today to your expected deliveries in 2018, any ballpark on what Rail Group margins would look like relative to the outlook for 8% even just directionally.

Let me be sure I clarify something here. What happens when you have a backlog like we do in our Rail business is you have sales orders that are embedded in the backlog that represent markets at which time those products were sold. And what we're saying and seeing today is that we're seeing inquiry levels and that is customers that are coming in and kicking the tires as well as have bona fide needs that are asking us to give them quotes for orders and there's been a significant uptick in those. Now, that doesn't mean that we've received orders for with real strong pricing in it. It just means that there's a lot of enthusiasm out there in the market people considering purchasing or leasing railcars and this was not apparent in the market 60 days ago or even 30 days ago. And so, it's something that has just surfaced, but it surfaced, Eric, on a wide range of diverse products as well.

That's correct. That's correct.

Hey, Justin, to the other part of your question, this is James, there's a lot of calculus involved in what pricing will do. And really my comment was twofold. It was one to remind you that the margins we're seeing this year are really reflective of orders we took in weaker conditions over the last few quarters. And as Eric said, we are taking some orders for this year, but the majority of what we're producing this year is clearly orders that we took over the last several quarters and couple of years in weaker conditions. And orders we do take, as Tim said, in pricing, that is starting to pick up. You may get some of that in 2019, but that's more in 2019. But we wouldn't put a number on that yet and how it would look compared to that 8% margin beyond 2018 yet.

Okay. Fair enough. That's helpful. I appreciate the time today.

Thank you.

And we will take our next question from Mike Baudendistel with Stifel. Your line is open. Michael James Baudendistel - Stifel, Nicolaus & Co., Inc.: Thank you. Yeah, this will be a little bit similar to some of the earlier questions, but just wanted to ask you, I mean you've talked in the past about increasing the leverage on your lease fleet and would you envision doing that before transaction in conjunction with the transaction of the hypothetical Investor Day that you may or may not have or sort of after the transaction?

Yeah. This is James. You're going to see some of that. As we mentioned, we plan on using some of our cash, but also some financings at the non-recourse level which implies what you're asking to take out the convert. So, that will naturally do that and you'll get more details on that probably by the next call as you see what we do there. Otherwise, we're still forming our capital structuring plans as we're a more focused rail company and certainly, with the bigger concentration of our balance sheet being with leasing, we do anticipate for that leverage to go up as we pursue growth opportunities that Tim talked about at length earlier. But in terms of details and what that looks like, it's a little early to do that, but we're clearly focused on what that needs to look like, what the company can handle over the next few years and, most importantly, where we can invest the capital that we would achieve from taking that leverage out. Michael James Baudendistel - Stifel, Nicolaus & Co., Inc.: Great. That makes sense. And then, just wanted to ask you on the barge area, I mean you saw a nice uptick in orders and I saw that Kirby's results were pretty good. I mean, do you feel like that area really has some sustainable improvement there or do you think that's more of a one or two-quarter blip?

Scott?

Yeah. Thanks, Michael. This is Scott. I'll take that one. So, I think the overall answer is that the market continues to be challenging, but there are a few potential bright spots. So, on the liquid side, like you said, Kirby's utilization went up. I think we're seeing increased inquiries on the liquid side across the broad spectrum of commodities. But again, we still feel like the overall industry is in an oversupply situation on the dry and the liquid side. And I think our customers want to see improved utilization for a few more months and a few more quarters before they say it's really a sustained recovery. So, again, it's still challenging for us, but there are a few bright spots in there. Michael James Baudendistel - Stifel, Nicolaus & Co., Inc.: Got it. That's all I had. Thank you.

Thank you.

And we will take our next question from Willard Milby with Seaport Global Securities. Your line is open.

Hey. Good morning, everybody. I wanted to touch on the margin outlook for the Leasing Group. Obviously, a few points lower than in years past. Is that reflective of additional cost maybe to kind of get these cars you've added leased, additional marketing expenses or maybe the cars coming off lease, you're having to kind of refresh those to new customers? Can you talk about those dynamics of what's in that margin and the step-down from prior years?

Willard, this is Eric. I'll take that. So, generally, if we have placed a lot of cars back into service, there are costs that we incur when we put cars back in service. So, that has an impact on our margins. And as I mentioned in the prepared remarks, lease rates are still below expiring rates. So, that also will have an impact. That flows straight to the bottom line. That's going to have an impact on the margin in our leasing business.

And on utilization, what do you think the – I mean, I guess – obviously optimal would be in the upper-90s, but how quickly do you think you can accelerate the utilization of these new cars? Is this a kind of throughout the remainder of 2018 timeframe you're looking at or is a shorter near-term you think these cars can get leased up?

We have inquiries on the railcars. Ultimately, the customers need to make the decisions to actually sign up on those offers. I do think it's in the near term, whether that's this quarter or this year remains to be seen in terms of when they actually get delivered.

All right. Thanks very much for the time.

Thanks.

And we will take our next question from Matt Brooklier with Buckingham Research Group. Your line is now open.

Hey. Thanks and good morning. So, another lease division question. You mentioned that you had some early termination, had some cars coming back with a customer bankruptcy. Can you talk to how many cars were included in the early termination or how much it impacted utilization in the quarter? And then, if you're able – I know you won't talk to the customer, but talk to the car type or the end-market?

Yeah. This is James. We just don't want to provide or get into that kind of detail. We're working to put those cars back on lease. It is a commodity that there is some demand for, but we won't give a lot of detail there. Also don't want to really put an impact, but it certainly was a bit of a drag on the utilization, along with the cars that we bought in the quarter that didn't have leases on them. But as we get both of those back on lease, it leads to Eric's last answer that as we go through the year, we'll work through that. This was a pretty special situation for the customer, not really an epidemic type issue that we have across any other customers at this time.

Okay. That's helpful. And then, Tim, earlier in the call, you talked to some bright spots, demand starting to maybe pick up, starting to become a little bit healthier as we move away from weaker periods. But could you maybe talk to what some of the bright spots are on the railcar side? It's a little bit easier for us, obviously, to track, given we have industry data in front of us. But maybe talk to the end-markets, a little bit more positive on within the railcar business and then talk about the non-railcar side of things. I think, tank, the Inland Barge portion of your business was mentioned, but maybe some of the other non-railcar businesses where you're starting to see improvement in demand.

Okay. I just talked about the inquiry levels and that is one thing that we look as an early sign. And when I say inquiry levels, I'm talking about customers that are sending us requests for quotes. And we monitor that fairly extensively in our rail business. And then, we look at the spreads as to car types that it's over. And, Eric, I think it's pretty well distributed. It's higher significantly, and it's distributed across all car types...

That's correct. That's correct.

...in that particular area. So, that's an indicator that we watch closely. And so, you have various things happening there. You've got the Canadian crude movements that are happening. You've got a lot of refined products that are transferring down to Mexico to feed their needs. You've got sand that is involved with this. You've got plastic products, the plastic pellets that are being supported in those. You got automotive activity that has moved. You've got – we even had some – we've had interest in refrigerated railcars that transport food. You've got intermodal out there that is moving as well in demand. So, it's really been box cars to transport various products. You've got interest in lumber that's been moving on those centerbeam cars that are out there. So, it's been across the board and that's what kind of gives us the goosebumps, so to speak, is that when you see interest from significant players in the industry for railcar inquiries and request for quotes, it puts a lot of our people in the back room to work having to get these quotes out, which we like, and then you've got our production planning people sitting around saying, okay, where would we build a lot of these things? So, there is an air of excitement going on. I think you're seeing some of the early signs, Scott, as you were talking about in the liquid barge area showing that. Our utility structures business also has some of the same things going on, our shoring business, they have a need for products in those areas and then in the aggregates business. So, it's hitting the infrastructure businesses at early stages as well as the railcar business.

Okay. Very helpful detail. Appreciate the time.

Thank you.

And we will take our next question from Steve Barger with KeyBanc Capital Markets. Your line is now open.

Hey. Thanks for getting me in. Tim, just to follow up on that last and kind of at a high level, with rail and barge maybe seeing cyclical inflection here, what is the message to the operating teams? Are you telling them to focus on market share and revenue or is it more operating margin and cash flow at this point?

Well, we don't really have to send a message to our operating team. They are very seasoned in these type of areas and the first thing that they are doing is they're processing all the quotes, they're getting out there with the customers, they're trying to understand what the needs are that they have and they're trying to accommodate as best they can. There's a lot of production scheduling activities going on that are pro formas that our businesses make and then, they start talking about capacity and how they would do it. But this is a very seasoned group of people that we have running our businesses. And so, it doesn't take me or anyone to get them together and say, okay, let's focus on these things. They know what to do and they know how to go after their business in this area and it's just a pleasure listening to them talk about these type of opportunities.

That's great color, but they must have an operating plan, right? Are they incentivized on margin...

Absolutely. Absolutely. They've got an operating plan and they incentivized. Their whole compensation incentive has got a very aggressive target for the generation of income, operating profit this year. And our board raised that fairly dramatically and they're all aware of it. And so, layering on production on top of existing production is how we generate that operating leverage. So, they're all going after it. And pricing, you can't push pricing. You have to be competitive in the market. You have to target which particular product that you can bring in and layer on top of the existing products that are running, but again, these people are – they're very professional and pros in this particular area.

Got it. Okay. Thanks. And, James, when you think about the manufacturing plan that's in your guidance and how you're seeing lease fleet additions in sales, do you have an expected free cash flow range for the company this year?

We don't disclose that. It certainly moves around. If you kind of take a lot of the moving parts we talked about, working capital, relatively consistent this year. It's moving up some, as our production has, but that bounces around. And we gave you the overall net lease investment of $520 million. So, I think we're going to do well in that area, but there's still a lot of moving parts in terms of the financing we're going to do. I know that's kind of post free cash flow as you talk about it, but we really think about it in the aggregate, because our leasing investment and our financing associated with that, we consider part of cash flow as well. So, we'll kind of provide those as we go through the quarters, but not in a forecast basis.

Okay. Thanks.

Thanks, Steve.

Thank you. This does complete the Q&A session. I'd now like to turn the program back over to Ms. Gail Peck for any additional remarks.

Thank you, Aaron. That concludes today's conference call. A replay of today's call will be available after 1 o'clock Eastern Standard Time through midnight on May 3. The access number is 402-220-2103. Also, the 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.

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