Open the filing on EDGARTrinity Industries, Inc. Announces Second Quarter 2026 Results
Reports quarterly earnings from continuing operations of $1.25 per diluted share
Generates year-to-date operating cash flow of $172 million and net gains on lease portfolio sales of $30 million
Completed railcar partnership transaction and recorded non-cash pre-tax gain of $132 million
Lease fleet utilization of 97.3% at quarter-end
Delivered 1,570 railcars in the quarter; backlog of $1.6 billion at quarter-end
DALLAS, Texas - July 30, 2026 - Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the second quarter ended June 30, 2026.
Financial and Operational Highlights - Second Quarter
- Quarterly total company revenues of $485 million
- Quarterly income from continuing operations per common diluted share ("EPS") of $1.25
- Lease fleet utilization of 97.3% and Future Lease Rate Differential ("FLRD") of 3.5% at quarter-end
- Railcar deliveries of 1,570 and new railcar orders of 1,560
- Year-to-date cash flow from continuing operations of $172 million and net gains on lease portfolio sales of $30 million
- Last twelve months ("LTM") Return on Equity ("ROE") of 30.2% and Adjusted ROE of 32.4%
2026 Guidance
- Industry deliveries of approximately 25,000 railcars
- Net fleet investment of $300 million to $400 million
- Operating and administrative capital expenditures of $55 million to $65 million
- EPS of $2.20 to $2.40
Management Commentary
"In the second quarter, Trinity delivered EPS of $1.25 anchored by the $132 million non-cash pre-tax gain from the completion of our railcar partnership transaction with Napier Park," said Jean Savage, Trinity's Chief Executive Officer and President. "This outcome reflects the depth of value embedded in our lease fleet and our ability to unlock it in ways that create tangible returns for shareholders."
"Our leasing platform continues to strengthen. Fleet utilization remained at 97.3%, renewal success rates improved to 75%, and a Future Lease Rate Differential of positive 3.5% points to continued lease rate growth in the periods ahead." Ms. Savage added, "We also expanded our global footprint with the acquisition of a 32.0% interest in the Touax Texmaco Railcar Leasing Private Limited joint venture in India giving us a presence in India's rapidly developing rail market."
"Inquiry levels are trending upward and the quarter's book-to-bill approached 1.0x, early signs that the demand environment in Rail Products is beginning to build," Ms. Savage continued. "Second quarter margin fell short of our expectations due to temporary operational challenges, though the operational improvements we have made over the past several years remain firmly in place. With a meaningful increase in delivery volumes in the second half of the year, our full-year margin outlook of 5% to 6% is unchanged."
"The industrial indicators underpinning our markets, including manufacturing PMI, carload growth, and customer inquiry levels, have each trended positively, and we believe the freight cycle is turning in rail's favor." Ms. Savage concluded, "With our leasing platform performing well, our balance sheet in strong shape, and our full-year EPS guidance of $2.20 to $2.40 intact, we are confident in Trinity's ability to continue generating above-market returns for our shareholders."
Excludes items outside our core business operations
Consolidated Financial Summary
| Three Months Ended June 30, | |
|---|
| 2026 | 2025 | Year over Year - Comparison |
|---|
| ($ in millions, except per share amounts) | |
|---|
| Revenues | | $485.1 | | $506.2 | Reduced revenues resulting from the divestitures of two partially-owned leasing subsidiaries since the prior year period, partially offset by higher lease rates |
| Operating profit | | $199.8 | | $95.4 | $132 million non-cash gain on railcar partnership transaction and higher lease rates, partially offset by higher operating costs for the lease fleet. Additionally, Q2-25 included the results of two partially-owned leasing subsidiaries that have since been divested |
| Interest expense, net | | $64.3 | | $67.7 | |
| Net income from continuing operations attributable to Trinity Industries, Inc. | | $102.2 | | $16.0 | |
| EBITDA | | $272.2 | | $171.7 | |
| Effective tax expense rate | 23.7% | | 15.8% | | Q2 2025 tax rate includes the benefit of tax credits purchased at a discount |
| Diluted EPS - GAAP | | $1.25 | | $0.19 | |
| Six Months Ended June 30, | |
| | 2026 | | 2025 | Year over Year - Comparison |
| (in millions) | |
| Net cash provided by operating activities - continuing operations | | $172.4 | | $141.9 | Income tax refunds received in the current year period and the purchase of tax credits in the prior year period, partially offset by an increase in inventory and the timing of payments for operating liabilities |
| Cash flow from operations with net gains on lease portfolio sales | | $202.6 | | $155.6 | |
| Net fleet investment | | $126.0 | | $232.7 | Timing of fleet additions and lease portfolio sales |
| Returns of capital to stockholders | | $71.3 | | $89.6 | |
Non-GAAP financial measure. See the Reconciliations of Non-GAAP Measures section within this Press Release for a reconciliation to the most directly comparable GAAP measure and why management believes this measure is useful to management and investors.
Additional Business Items
- Total committed liquidity of $1.0 billion as of June 30, 2026.
Business Group Summary
| Three Months Ended June 30, | |
|---|
| 2026 | 2025 | Year over Year - Comparison |
|---|
| ($ in millions) | |
|---|
| Railcar Leasing and Services Group | |
| Revenues | | $281.1 | | $302.4 | Reduced revenues resulting from the divestitures of two partially-owned leasing subsidiaries since the prior year period, partially offset by higher lease rates and a favorable mix of repairs |
| Operating profit | | $224.3 | | $118.6 | Gain on railcar partnership transaction and higher lease rates, partially offset by higher maintenance and compliance costs for the lease fleet. Additionally, Q2-25 included the results of two partially-owned leasing subsidiaries that have since been divested |
| Operating profit margin | 79.8% | | 39.2% | | |
| Gains on lease portfolio sales | | $8.2 | | $7.8 | |
| Gain on divestiture of partially-owned leasing subsidiary | | $131.6 | $ - | |
| Fleet utilization | 97.3% | | 96.8% | | |
| FLRD | +3.5 | % | +18.3 | % | |
| Wholly-owned lease fleet (in units) | | 96,280 | | 88,285 | As a result of the railcar partnership transactions completed since the prior year period, approximately 6,235 railcars were transferred from partially-owned to wholly-owned and approximately 17,025 railcars were transferred from partially-owned to investor-owned. |
| Partially-owned lease fleet (in units) | | - | | 23,260 | |
| Investor-owned lease fleet (in units) | | 50,650 | | 34,205 | |
| Rail Products Group | | | |
| Revenues | | $258.5 | | $293.5 | Lower deliveries |
| Operating profit | | $3.4 | | $8.9 | Lower deliveries and the impact of a production interruption in one of our manufacturing facilities |
| Operating profit margin | 1.3% | | 3.0% | | |
| New railcars: | | | |
| Deliveries (in units) | | 1,570 | | 1,815 | |
| Orders (in units) | | 1,560 | | 2,310 | |
| Order value | | $189.3 | | $318.3 | |
| Backlog value | | $1,585.2 | | $1,959.8 | |
| Sustainable railcar conversions: | | | |
| Deliveries (in units) | | 115 | | 25 | |
| Backlog (in units) | | 370 | | - | |
| Backlog value | | $28.2 | $ - | |
| Eliminations | | | |
| Eliminations - revenues | | $(54.5) | | $(89.7) | |
| Eliminations - operating profit | | $(0.8) | | $(5.6) | |
| Corporate and other | | | |
| Selling, engineering, and administrative expenses | | $27.1 | | $28.8 | |
| June 30, 2026 | December 31, 2025 | |
| Loan-to-value ratio | | | |
| Wholly-owned subsidiaries | 70.8% | | 70.2% | | |
Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements.
FLRD calculates the implied change in lease rates for railcar leases expiring over the next four quarters. The FLRD assumes that these expiring leases will be renewed at the most recent quarterly transacted lease rates for each railcar type. We believe the FLRD is useful to both management and investors as it provides insight into the near-term trend in lease rates.
Conference Call
Trinity will hold a conference call at 8:00 a.m. Eastern on July 30, 2026 to discuss its second quarter results. To listen to the call, please visit the Investor Relations section of the Company's website at www.trin.net and access the Events & Presentations webpage, or the live call can be accessed at 1-888-317-6003 with the conference passcode "7321941". Please call at least 10 minutes in advance to ensure a proper connection. An audio replay may be accessed through the Company’s website or by dialing 1-877-344-7529 with passcode "7528453" until 11:59 p.m. Eastern on August 6, 2026.
Additionally, the Company will provide a quarterly investor presentation that will be accessible both within the webcast and on Trinity's Investor Relations website under the Events and Presentations portion of the site along with the Second Quarter Earnings Call event weblink.
Non-GAAP Financial Measures
We have included financial measures compiled in accordance with generally accepted accounting principles ("GAAP") and certain non-GAAP measures in this earnings press release to provide management and investors with additional information regarding our financial results. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. For each non-GAAP financial measure, a reconciliation to the most comparable GAAP measure has been included in the accompanying tables. When forward-looking non-GAAP measures are provided, quantitative reconciliations to the most directly comparable GAAP measures are not provided because management cannot, without unreasonable effort, predict the timing and amounts of certain items included in the computations of each of these measures. These factors include, but are not limited to: the product mix of expected railcar deliveries; the timing and amount of significant transactions and investments, such as lease portfolio sales, capital expenditures, and returns of capital to stockholders; and the amount and timing of certain other items outside the normal course of our core business operations.
About Trinity Industries
Trinity Industries, Inc., headquartered in Dallas, Texas, owns businesses that are leading providers of rail transportation products and services in North America. Our businesses market their railcar products and services under the trade name TrinityRail®. Our platform also includes the brands of RSI Logistics, a provider of software and logistics solutions, and Holden America, a supplier of railcar parts and components. Our platform provides railcar leasing and management services; railcar manufacturing; railcar maintenance and modifications; and other railcar logistics products and services. Trinity reports its financial results in two reportable business segments: (1) Railcar Leasing and Services Group and (2) Rail Products Group. For more information, visit: www.trin.net.
Forward-looking statements notice
Some statements in this release, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Trinity's estimates, expectations, beliefs, intentions or strategies for the future, and the assumptions underlying these forward-looking statements, including, but not limited to, future financial and operating performance, future opportunities and any other statements regarding events or developments that Trinity believes or anticipates will or may occur in the future. Trinity uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance,” “projected,” “outlook,” and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this release, and Trinity expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Trinity’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to risks and uncertainties regarding geopolitical events and conflicts, as well as economic, competitive, governmental, and technological factors affecting Trinity’s operations, markets, products, services and prices, and such forward-looking statements are not guarantees of future performance. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and “Forward-Looking Statements” in Trinity’s Annual Report on Form 10-K for the most recent fiscal year, as may be revised and updated by Trinity’s Quarterly Reports on Form 10-Q, and Trinity’s Current Reports on Form 8-K.
Condensed Consolidated Statements of Operations
(in millions, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Revenues | $485.1 | | $506.2 | | $977.1 | | $1,091.6 | |
| Operating costs: | | | | |
| Cost of revenues | 375.2 | | 372.8 | | 738.3 | | 816.0 | |
| Selling, engineering, and administrative expenses | 51.1 | | 49.4 | | 101.8 | | 99.4 | |
| Gains on dispositions of property and other divestitures: | | | | |
| Lease portfolio sales | 8.2 | | 7.8 | | 30.2 | | 13.7 | |
| Gain on divestiture of partially-owned leasing subsidiary | 131.6 | | - | | 131.6 | | - | |
| Other | 1.2 | | 3.6 | | 2.1 | | 5.3 | |
| 285.3 | | 410.8 | | 676.2 | | 896.4 | |
| Operating profit | 199.8 | | 95.4 | | 300.9 | | 195.2 | |
| Interest expense, net | 64.3 | | 67.7 | | 129.7 | | 133.8 | |
| Other, net | 1.5 | | 1.7 | | 2.1 | | (1.0) | |
| Income from continuing operations before income taxes | 134.0 | | 26.0 | | 169.1 | | 62.4 | |
| Provision for income taxes | 31.8 | | 4.1 | | 40.3 | | 11.5 | |
| Income from continuing operations | 102.2 | | 21.9 | | 128.8 | | 50.9 | |
| Loss from discontinued operations, net of income taxes | (3.9) | | (1.9) | | (5.7) | | (3.8) | |
| Net income | 98.3 | | 20.0 | | 123.1 | | 47.1 | |
| Net income attributable to noncontrolling interest | - | | 5.9 | | 0.6 | | 10.9 | |
| Net income attributable to Trinity Industries, Inc. | $98.3 | | $14.1 | | $122.5 | | $36.2 | |
| Basic earnings per common share: | | | | |
| Income from continuing operations | $1.28 | | $0.20 | | $1.61 | | $0.49 | |
| Loss from discontinued operations | (0.05) | | (0.02) | | (0.07) | | (0.05) | |
| Net income attributable to Trinity Industries, Inc. | $1.23 | | $0.17 | | $1.54 | | $0.44 | |
| Diluted earnings per common share: | | | | |
| Income from continuing operations | $1.25 | | $0.19 | | $1.57 | | $0.48 | |
| Loss from discontinued operations | (0.05) | | (0.02) | | (0.07) | | (0.05) | |
| Net income attributable to Trinity Industries, Inc. | $1.20 | | $0.17 | | $1.50 | | $0.43 | |
| Weighted average number of shares outstanding: | | | | |
| Basic | 79.6 | | 81.3 | | 79.7 | | 81.4 | |
| Diluted | 81.6 | | 82.9 | | 81.8 | | 83.4 | |
Note: Earnings per common share is calculated independently for each component and may not sum to total net income attributable to Trinity Industries, Inc. per common share due to rounding.
Trinity has certain unvested restricted stock awards that participate in dividends on a nonforfeitable basis and are therefore considered to be participating securities. Consequently, diluted net income attributable to Trinity Industries, Inc. per common share is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.
Condensed Consolidated Balance Sheets
(in millions)
| June 30, 2026 | December 31, 2025 |
|---|
| ASSETS | | |
| Cash and cash equivalents | $155.7 | $201.3 |
| Receivables, net of allowance | 339.2 | 389.1 |
| Income tax receivable | 6.7 | 27.5 |
| Inventories | 533.6 | 469.1 |
| Restricted cash | 114.2 | 122.3 |
| Property, plant, and equipment, net: | | |
| Railcars in our lease fleet: | | |
| Wholly-owned subsidiaries | 6,532.6 | 6,512.4 |
| Partially-owned subsidiary | - | 372.2 |
| Deferred profit on railcar products sold | (560.8) | (628.6) |
| Operating and administrative assets | 360.7 | 365.3 |
| 6,332.5 | 6,621.3 |
| Goodwill | 221.5 | 221.5 |
| Other assets | 528.6 | 372.3 |
| Total assets | $8,232.0 | $8,424.4 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Accounts payable | $276.5 | $269.6 |
| Accrued liabilities | 272.2 | 301.2 |
| Debt: | | |
| Recourse | 598.8 | 598.5 |
| Non-recourse: | | |
| Wholly-owned subsidiaries | 4,627.7 | 4,573.4 |
| Partially-owned subsidiary | - | 270.6 |
| 5,226.5 | 5,442.5 |
| Deferred income taxes | 1,178.0 | 1,129.0 |
| Other liabilities | 133.1 | 136.8 |
| Stockholders' equity: | | |
| Trinity Industries, Inc. | 1,143.1 | 1,077.2 |
| Noncontrolling interest | 2.6 | 68.1 |
| 1,145.7 | 1,145.3 |
| Total liabilities and stockholders' equity | $8,232.0 | $8,424.4 |
Condensed Consolidated Statements of Cash Flows
(in millions)
| Six Months Ended June 30, |
|---|
| 2026 | 2025 |
|---|
| Operating activities: | | |
| Net cash provided by operating activities - continuing operations | $172.4 | | $141.9 | |
| Net cash used in operating activities - discontinued operations | (5.7) | | (3.8) | |
| Net cash provided by operating activities | 166.7 | | 138.1 | |
| Investing activities: | | |
| Capital expenditures - lease fleet | (240.3) | | (295.7) | |
| Proceeds from lease portfolio sales | 114.3 | | 63.0 | |
| Capital expenditures - operating and administrative | (18.0) | | (17.9) | |
| Other investing activities | (37.8) | | 8.5 | |
| Net cash used in investing activities | (181.8) | | (242.1) | |
| Financing activities: | | |
| Net proceeds from (repayments of) debt | 45.7 | | 160.1 | |
| Shares repurchased | (20.3) | | (39.0) | |
| Dividends paid to common shareholders | (50.5) | | (50.4) | |
| Other financing activities | (13.5) | | (25.8) | |
| Net cash provided by (used in) financing activities | (38.6) | | 44.9 | |
| Net decrease in cash, cash equivalents, and restricted cash | (53.7) | | (59.1) | |
| Cash, cash equivalents, and restricted cash at beginning of period | 323.6 | | 374.4 | |
| Cash, cash equivalents, and restricted cash at end of period | $269.9 | | $315.3 | |
Reconciliations of Non-GAAP Measures
($ in millions, except percentages)
Adjusted Return on Equity
Adjusted Return on Equity (“Adjusted ROE”) is defined as a ratio for which (i) the numerator is calculated as income or loss from continuing operations, adjusted to exclude the effects of net income or loss attributable to noncontrolling interest; and (ii) the denominator is calculated as average Trinity stockholders’ equity (which excludes noncontrolling interest). In the following table, the numerator and denominator of our Adjusted ROE calculation are reconciled to income from continuing operations and total stockholders’ equity, respectively, which are the most directly comparable GAAP financial measures. Management believes that Adjusted ROE is a useful measure to both management and investors as it provides an indication of the economic return on the Company’s investments over time. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
| LTM June 30, 2026 | June 30, 2025 |
|---|
| ($ in millions) |
|---|
| Numerator: | | |
| Income from continuing operations | $362.4 | |
| Net income attributable to noncontrolling interest | (13.9) | |
| Net income from continuing operations attributable to Trinity Industries, Inc. | 348.5 | |
| Denominator: | | |
| Total stockholders' equity | $1,145.7 | $1,257.8 |
| Noncontrolling interest | (2.6) | (248.7) |
| Trinity stockholders' equity | $1,143.1 | $1,009.1 |
| Average total stockholders' equity | $1,201.8 | |
| Return on Equity | 30.2% | |
| Average Trinity stockholders' equity | $1,076.1 | |
| Adjusted Return on Equity | 32.4% | |
Return on Equity is calculated as income from continuing operations divided by average total stockholders' equity.
Adjusted Return on Equity is calculated as net income from continuing operations attributable to Trinity Industries, Inc. divided by average Trinity stockholders' equity, each as defined and reconciled above.
Cash Flow from Operations with Net Gains on Lease Portfolio Sales
Cash flow from operations with net gains on lease portfolio sales is a non-GAAP financial measure. We believe this measure is useful to both management and investors as it provides a relevant measure of liquidity and a useful basis for assessing the breadth of the cash flow generation capabilities across our operating platform, as well as our ability to fund our operations and repay our debt. This measure is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus net gains on lease portfolio sales and is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following table. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
| Six Months Ended June 30, |
|---|
| 2026 | 2025 |
|---|
| Net cash provided by operating activities - continuing operations | $172.4 | | $141.9 | |
| Net gains on lease portfolio sales | 30.2 | | 13.7 | |
| Cash flow from operations with net gains on lease portfolio sales | $202.6 | | $155.6 | |
EBITDA
“EBITDA” is defined as income from continuing operations plus interest expense, provision for income taxes, and depreciation and amortization expense. EBITDA is a non-GAAP financial measure; however, the amounts included in the calculation are derived from amounts included in our GAAP financial statements. EBITDA is reconciled to net income, the most directly comparable GAAP financial measure, in the following table. This information is provided to assist management and investors in making meaningful comparisons of our operating performance between periods. We believe EBITDA is a useful measure for analyzing the performance of our business. We also believe that EBITDA is commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation or amortization (which can vary significantly depending on many factors). EBITDA should not be considered as an alternative to net income, as an indicator of our operating performance, or as an alternative to operating cash flows as measures of liquidity. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
| Three Months Ended June 30, | Six Months Ended June 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Net income | $98.3 | | $20.0 | | $123.1 | | $47.1 | |
| Less: Loss from discontinued operations, net of income taxes | (3.9) | | (1.9) | | (5.7) | | (3.8) | |
| Income from continuing operations | 102.2 | | 21.9 | | 128.8 | | 50.9 | |
| Interest expense | 66.7 | | 70.5 | | 134.9 | | 139.3 | |
| Provision for income taxes | 31.8 | | 4.1 | | 40.3 | | 11.5 | |
| Depreciation and amortization expense | 71.5 | | 75.2 | | 144.1 | | 149.5 | |
| EBITDA | $272.2 | | $171.7 | | $448.1 | | $351.2 | |
Contacts
Leigh Anne Mann
Vice President, Investor Relations
(Investors) 214/631-4420
Jack L. Todd
Vice President, Public Affairs
(Media Line) 214/589-8909
TABLES TO FOLLOW -
Open the filing on EDGARTrinity Industries, Inc.
Earnings Release Conference Call - Q2 2026
Leigh Anne Mann
Vice President, Investor Relations
Thank you, operator. Good morning everyone. We appreciate you joining us for the Company’s second quarter 2026 financial results conference call.
Our prepared remarks will include comments from Jean Savage, Trinity’s Chief Executive Officer and President, and Eric Marchetto, the Company’s Chief Financial Officer. We will hold a Q&A session following the prepared remarks from our leaders.
During the call today, we will reference certain non-GAAP financial metrics. The reconciliations of the non-GAAP metrics to comparable GAAP measures are provided in the appendix of the quarterly investor slides, which are accessible on our investor relations website at www.trin.net. These slides are under the Events and Presentations portion of the website, along with the Second Quarter Earnings Conference Call event link.
A replay of today’s call will be available after 10:30 a.m. Eastern time through midnight on August 6th, 2026. Replay information is available under the Events and Presentations page on our Investor Relations website.
It is now my pleasure to turn the call over to Jean.
E. Jean Savage
Chief Executive Officer and President
Thank you, Leigh Anne, and good morning everyone.
Second quarter earnings per share from continuing operations came in at $1.25, reflecting the successful completion of our Napier Park partnership transaction alongside execution headwinds in Rail Products that are specific and transitional. The Napier gain was $132 million pre-tax and demonstrates the embedded value we have been building in our fleet. It is also proof of what this platform was designed to do: perform profitably through the cycle and convert hard asset value into shareholder returns. Rail Products came in below expectations at a 1.3% operating margin, driven by two specific items we quantify at 270 basis points.
Leasing continued to perform. Fleet utilization held at 97.3%. Lease rates moved higher. Rail Products ended the quarter with a $1.6 billion backlog and a book-to-bill just below 1.0x. The demand signal is there. And on a last twelve month basis, our Adjusted Return on Equity expanded to 32.4%, reflecting the impact of the work completed on the business and the Napier Park and secondary market transactions in the last 12 months.
Now let me walk you through what we're seeing in the market.
Market Update
The market is turning. Not all at once, and not without friction - but the direction is clear.
The PMI Manufacturing Index has been positive for six consecutive months. Industrial production improved year over year. Carload growth is materializing across agriculture, energy, and industrial construction - segments where rail has a natural advantage. In particular, agriculture carloads have shown the most strength due to soybean strength and steady increases in ethanol. Railcars in storage have been below 20% for the last four months. Inquiry levels for new railcars are strong reflecting growing customer conviction that the cycle has turned, and demand-side signals continue to be stronger than supply-side signals.
Rail's structural advantages are playing to our favor as well. Fuel efficiency relative to trucking, capacity constraints in the over-the-road network, and increasing pressure on supply chains to reduce carbon footprints are all driving freight toward rail. These are durable trends. And when I look at the core indicators - PMI, industrial production, carloads, inquiry levels - the trajectory is constructive and gaining momentum. We enter the second half of 2026 with growing confidence.
Segment Performance
I'll take you through both segments, starting with Leasing and Services.
Leasing and Services
Leasing performed. Utilization held at 97.3%. Renewal success rates improved to 75%, up from 60% in the first quarter. The Future Lease Rate Differential moved to a positive 3.5%, up from 1.2% in the first quarter. This is a meaningful acceleration, and FLRD has now been positive for 20 consecutive quarters, a forward indicator that lease rates should continue to grow as renewals convert. These are the metrics that tell us the fleet is healthy and the market is supporting our pricing.
Leasing revenues were down year over year, and the reason is structural - we closed railcar partnership transactions in Q2 2026 and Q4 2025 that reduced our owned fleet. For context, in the second quarter of 2025 the revenue contribution from the consolidated Napier Park fleets was about $30 million. We are growing our overall platform while monetizing embedded fleet value and simplifying the balance sheet. As of June 30th, our wholly-owned railcar fleet stands at 96,280 railcars and our investor-owned fleet count, which we manage, is 50,650. Higher lease rates and stronger external repair pricing partially offset the revenue impact of the smaller consolidated fleet.
Leasing segment operating margin was 79.8%, including the $132 million non-cash gain from the Napier Park transaction. Excluding that gain, the Leasing and Services margin was 33.0%, reflecting higher maintenance and depreciation costs and the mix impact of a smaller consolidated fleet. Additionally, we incurred disposal charges related to the exit of certain logistics solutions locations in the quarter. On the portfolio management side, we completed $31 million of lease portfolio sales in the quarter, generating $8 million in gains. The secondary market remains active, and we continue to use it as a capital allocation tool.
Rail Products
In the Rail Products segment, we received orders for 1,560 new railcars and delivered 1,570 railcars in the quarter, ending the quarter with a backlog of $1.6 billion. We currently hold just under half of the industry backlog. Revenues were down slightly year over year driven by lower deliveries.
Rail Products operating profit margin came in at 1.3%. Two items drove roughly 270 basis points of that shortfall: an unplanned production interruption at our Longview manufacturing facility and temporary re-alignment expenses tied to our Mexico manufacturing footprint. Excluding those items, underlying margin was in the 4% range - still below the annual trajectory we are targeting. Additionally, the mix of deliveries in the second quarter was less favorable than the first quarter.
Last year, we initiated a significant consolidation and automation initiative at our Longview operations, transitioning from two facilities to one. While we are excited about the long-term operational improvements this project will deliver, it can affect our productivity while it is ongoing. We expect this project to reach completion early in 2027.
The full year Rail Products margin is expected to land at the low end of our 5% to 6% range as production normalizes in the second half and mix improves in Q3 and Q4. The structural work we have done on automation, right-sizing, and breakeven reduction is intact and performing. The second quarter results do not reflect that progress but the full year will.
Conclusion
Before I turn the call to Eric, I want to highlight a strategic development for Trinity. In June, we acquired a 32.0% interest in Touax Texmaco Railcar Leasing Private Limited, or TTRL, which is a railcar leasing company in India. This is a joint venture with Touax Group, a global asset management company, and Texmaco Rail & Engineering Limited, a rail solution provider in India. We are contributing our leasing expertise while gaining meaningful exposure to India, a growing rail market. While we do not expect material P&L contribution in 2026 as the joint venture completes its additional fleet buildout, we are excited about this JV’s ability to generate solid returns and meaningful growth.
In summary, we delivered strong EPS growth, closed a significant transaction that demonstrates the value embedded in our fleet, and maintained the leasing metrics that matter most - utilization, renewal success, and FLRD. Rail Products had a difficult quarter on margin, but inquiries are growing, and our full-year expectations are unchanged.
The market environment is improving, and Trinity is built to capture that improvement. I'm proud of how this team is executing - closing significant transactions, navigating a complex operating environment, and accelerating into a strengthening market. The platform is sound, the leasing business is strong, the strategic moves we are making are the right ones, and the team is focused on delivering in the second half.
I'll now turn the call over to Eric, who will take you through the financials and our updated guidance.
Eric R. Marchetto
Executive Vice President and Chief Financial Officer
Thank you, Jean, and good morning everyone. Before we go through the financial statements, I wanted to quickly talk through the second quarter railcar partnership transaction with Napier Park. As you will recall, we completed the first piece of this transaction in the fourth quarter, moving the TRP 2021 fleet to wholly-owned and the Triumph fleet into our managed fleet and recording a non-cash gain on that exchange.
In the second quarter, we contributed our remaining membership interests in the Tribute partially-owned fleet for an 11.2% limited partnership interest in Napier Park SPE Holdings. The Tribute fleet is now part of our managed fleet and we no longer have direct ownership interests in TRIP Holdings. Because the book value of this fleet was well below the market value, we recorded a non-cash pre-tax gain of $132 million in the second quarter.
It is worth noting that, while these transactions have simplified our financial statements and have allowed us to unlock significant value in our railcars, there are other notable impacts to our financial statements, especially in comparison to prior periods.
Income Statement
Starting with the income statement, revenues for the quarter were $485 million, down slightly both sequentially and year over year, reflecting the deconsolidation of the partially-owned leasing subsidiaries. As these railcars move into the managed fleet, the partially owned railcar count and minority interest goes to zero - both expected outcomes of the partnership structure. Earnings per share in the quarter were $1.25, up both sequentially and year over year as a result of the $132 million railcar partnership gain.
We also recorded a gain of $8 million in the quarter from lease portfolio sales.
Cash Flow Statement
Moving to the cash flow statement, year to date cash flow from continuing operations was $172 million. We have returned $71 million this year to shareholders through dividends paid and shares repurchased. Year to date net lease fleet investment was $126 million.
Cash flow from operations with net gains on lease portfolio sales was $81 million in the quarter and $203 million year to date, reflecting significant cash generation even in a slower delivery environment.
Balance Sheet
Turning to our balance sheet, we continue to work to strengthen and improve our financial position. We have liquidity of $1 billion.
Our second quarter balance sheet now reflects the de-consolidation of all balances related to TRIP Holdings, both on the asset side with a lower Property, Plant, and Equipment balance and the removal of the associated partially-owned debt from our balance sheet. Furthermore, the Other Assets line item includes our new equity method investment in the Napier Park railcar fleet.
Additionally in the quarter, we amended and extended our $600 million corporate revolver to provide more flexibility and issued TRL-2025 Series 2026-1 Secured Railcar Equipment Notes to redeem in full the Series 2019-1 Notes. The financing increased the loan-to-value on our wholly-owned lease fleet to 70.8%, which is slightly above our targeted range. The higher advance rate on the fleet reflects the increased market value supported by higher lease rates on our fleet. Our unencumbered fleet is approximately $900 million giving us financial and operational flexibility.
Guidance
And now I’d like to give some thoughts on guidance for the rest of the year.
We continue to expect 25,000 industry deliveries this year, well below replacement levels as customers manage through cost uncertainty and economic headwinds. Despite the softer delivery environment, we are maintaining capital discipline. We are slightly lowering our net lease fleet investment to a range of $300 million to $400 million with gains of $160 million to $180 million. Year to date, we have booked $162 million in gains, which means our guidance contemplates limited secondary market sales in the back half of the year.
We are also holding our full year EPS guidance of $2.20 to $2.40 and expect Rail Products Group full year segment margin to be in the 5% to 6% range. This means we expect the Rail Products operating margin to normalize in the second half of the year as the headwinds we experienced in the quarter clear. Additionally, we expect Rail Products deliveries in the second half to be higher than the first half, which brings meaningful operating leverage on our cost base and supports the full year margin trajectory.
To summarize: the balance sheet is stronger, liquidity stands at $1 billion, and our capital allocation priorities are unchanged - disciplined fleet investment, active portfolio management, and returning capital to shareholders. The financial foundation is sound, the recovery drivers are in place, and we are holding guidance. We look forward to demonstrating that in the second half of 2026.
Operator, we are now ready for our first question.
E. Jean Savage
Chief Executive Officer and President
Thank you for joining us today. Our second quarter results reflect a strengthening Leasing business and specific, transitional headwinds in Rail Products that we've quantified and are working through. We closed the Napier Park transaction as signaled, we're holding our full-year guidance, and the platform is positioned to deliver the second half. Thank you for your continued interest in Trinity.