TRINITY INDUSTRIES INC (Form: 10-K, Received: 02/20/2014 12:26:55)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K



(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013



	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6903

Trinity Industries, Inc.

(Exact name of registrant as specified in its charter)



Delaware	75-0225040
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

2525 N. Stemmons Freeway, Dallas, Texas	75207-2401
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (214) 631-4420

Securities Registered Pursuant to Section 12(b) of the Act



Title of each class	Name of each exchange on which registered
Common Stock ($1.00 par value)	New York Stock Exchange, Inc.

Securities registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrant's most recently completed second fiscal quarter (June 28, 2013) was $2,982.4 million .

At January 31, 2014 the number of shares of common stock outstanding was 77,485,876 .

The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the Registrant's definitive 2014 Proxy Statement.

Table of Contents

TRINITY INDUSTRIES, INC.

FORM 10-K

TABLE OF CONTENTS



Caption	Page
PART I
Item 1. Business	3
Item 1A. Risk Factors	9
Item 1B. Unresolved Staff Comments	15
Item 2. Properties	16
Item 3. Legal Proceedings	16
Item 4. Mine Safety Disclosures	16

PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6. Selected Financial Data	20
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	43
Item 8. Financial Statements and Supplementary Data	44
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	87
Item 9A. Controls and Procedures	87
Item 9B. Other Information	89

PART III
Item 10. Directors, Executive Officers and Corporate Governance	89
Item 11. Executive Compensation	89
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	90
Item 13. Certain Relationships and Related Transactions, and Director Independence	90
Item 14. Principal Accountant Fees and Services	90

PART IV
Item 15. Exhibits and Financial Statement Schedules	91

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PART I

Item 1. Business.

General Development of Business. Trinity Industries, Inc. and its consolidated subsidiaries, (“Trinity”, “Company”, “we”, or “our”) headquartered in Dallas, Texas, is a diversified industrial company that owns a variety of market-leading businesses providing products and services to the energy, transportation, chemical, and construction sectors. Trinity was incorporated in 1933.

Trinity became a Delaware corporation in 1987. Our principal executive offices are located at 2525 N. Stemmons Freeway, Dallas, Texas 75207-2401, our telephone number is 214-631-4420, and our Internet website address is www.trin.net .

Financial Information About Industry Segments. Financial information about our industry segments for the years ended December 31, 2013 , 2012 , and 2011 is presented in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations.”

Narrative Description of Business. As a diversified industrial company, we manufacture and sell a variety of products and services principally including:


•	railcars and railcar parts;


•	the leasing of railcars;


•	inland barges;


•	structural wind towers;


•	highway products;


•	aggregates;


•	storage containers; and


•	parts and steel components.

We serve our customers through the following five business groups:

Rail Group. Through wholly-owned subsidiaries with manufacturing facilities in the U.S. and Mexico, our Rail Group is a leading manufacturer of freight and tank railcars in North America used for transporting a wide variety of liquids, gases, and dry cargo (“Trinity Rail Group” or “Rail Group”).

Trinity Rail Group offers a complete array of railcar solutions to our customers. We manufacture a full line of railcars, including:

Auto Carrier Cars - Auto carrier railcars transport automobiles and a variety of other vehicles.

Box Cars - Box railcars transport cargo such as food products, auto parts, wood products, and paper.

Gondola Cars - Rotary gondola railcars are primarily used for coal service. Top-loading gondola railcars transport a variety of other heavy bulk commodities such as scrap metals and steel products.

Hopper Cars - Covered hopper railcars carry cargo such as grain, distillers dried grain, dry fertilizer, plastic, cement, and sand. Open-top hoppers are most often used to haul coal and aggregates.

Intermodal Cars - Intermodal railcars transport intermodal containers and trailers, which are generally interchangeable among railcars, trucks, and ships.

Specialty Cars - Specialty railcars are designed to address the special needs of a particular industry or customer, such as waste-hauling gondolas, side dump railcars, flatcars, and pressure differential railcars used to haul fine grain food products such as starch and flour.

Tank Cars - Tank railcars transport products such as liquefied petroleum products including crude oil; alcohol and renewable fuels; liquid fertilizer; and food and grain products such as vegetable oil and corn syrup.

Our Rail Group manufactures a diversified railcar product line, allowing us to capitalize on changing industry trends and developing market opportunities, including the oil, gas, and chemical markets. We also manufacture and sell a variety of railcar parts and components used in manufacturing and repairing railcars including couplers, axles, and other equipment. We have plants in Mexico and the U.S. that manufacture parts and components, primarily for the North American market. We provide railcar maintenance services at four facilities in the U.S.

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Our customers include railroads, leasing companies, and industrial shippers of products, such as utilities, petrochemical companies, grain shippers, agricultural product companies, and major construction and industrial companies. We compete in the North American market against five major railcar manufacturers.

For the year ended December 31, 2013 we shipped 24,335 railcars, or 44% of total North American railcar shipments. As of December 31, 2013 , our Rail Group backlog consisted of 39,895 railcars valued at $5.0 billion . This amount included approximately $ 827.0 million in orders from our Railcar Leasing and Management Services Group (“Leasing Group”). The total amount of orders in our backlog from the Leasing Group was supported by lease commitments with external customers. The final amount dedicated to the Leasing Group may vary by the time of delivery.

We hold patents of varying duration for use in our manufacture of railcars and components. We believe patents offer a marketing advantage in certain circumstances. No material revenues are received from the licensing of these patents.

Railcar Leasing and Management Services Group. Our Railcar Leasing and Management Services Group is a leading provider in North America of comprehensive rail industry services. Through wholly-owned subsidiaries, primarily Trinity Industries Leasing Company ("TILC"), and partially-owned subsidiaries, TRIP Rail Holdings LLC (“TRIP Holdings”) and RIV 2013 Rail Holdings LLC ("RIV 2013"), we offer operating leases for tank and freight railcars. TILC also offers management, maintenance, and administrative services. By providing leasing and management, maintenance, and administrative services, in addition to management services for investor-owned funds, our Leasing Group is an important strategic resource that further links our Rail Group with our customers. Trinity's Rail Group and TILC coordinate sales and marketing activities under the registered trade name TrinityRail ^® , thereby providing a single point of contact for railroads and shippers seeking rail equipment and services.

The railcars in our lease fleet are leased to industrial shippers and railroads. These companies operate in the chemical, agricultural, and energy industries, among others. Substantially all of the railcars in our lease fleet were manufactured by our Rail Group. The terms of our railcar leases generally vary from one to twenty years and provide for fixed monthly rentals. A small percentage of our fleet is leased on a per diem basis. As of December 31, 2013 , the lease fleet of our subsidiaries included 75,685 owned or leased railcars that were 99.5% utilized. Of this total, 63,255 railcars were owned by TILC or its affiliates and 12,430 railcars were financed in sale-leaseback transactions.

We also manage railcar fleets on behalf of third parties. We believe our railcar fleet management services complement our leasing business by generating stable fee income, strengthening customer relationships, and enhancing the view of Trinity as a leading provider of railcar products and services.

Our railcar leasing businesses compete against a number of well-established entities that are also in the business of leasing railcars.

Construction Products Group. Through wholly-owned subsidiaries, our Construction Products Group manufactures highway products as well as other steel products for infrastructure-related projects; mines and produces aggregates; and provides galvanizing services. Many of these lines of business are seasonal and revenues are impacted by weather conditions and fluctuations in government spending levels.

Our highway products businesses are leading U.S. manufacturers of guardrail, crash cushions, and other protective barriers. The Federal Highway Administration, which determines product eligibility for cost reimbursement using federal funds, has approved many of our products as eligible for cost reimbursement based on requirements set forth by the National Cooperative Highway Research Program. Our crash cushion, protective barrier, and guardrail products include multiple proprietary products manufactured under license from certain public and private research organizations and inventors and Company-held patents. We sell highway products in Canada, Mexico, and throughout the U.S and we export highway products, including proprietary products to more than 60 countries. We compete against several national and regional guardrail manufacturers.

We are a leading producer and distributor of lightweight and natural aggregates, including expanded shale and clay; crushed stone; sand and gravel; asphalt rock; and various other products in the western and southwestern U.S. Our aggregates customers are concrete producers; commercial, residential, and highway contractors; manufacturers of masonry products; and state and local municipalities. We compete with lightweight aggregates producers nationwide and natural aggregates producers located in the regions where we operate.

We provide hot-dip galvanizing services to manufacturers of fabricated steel materials from our service facilities in Texas, Louisiana, and Mississippi and manufacture a line of trench shields and shoring products for the construction industry and a line of construction equipment for the mining industry.

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Energy Equipment Group. Through wholly-owned subsidiaries, our Energy Equipment Group manufactures structural wind towers; utility, traffic, and lighting structures; storage containers; and tank heads for pressure and non-pressure vessels.

Our structural wind towers business is a leading manufacturer in North America of structural wind towers used in the wind energy market. These towers are manufactured in the U.S. and Mexico to customer specifications and installed by our customers. Our customers are generally wind turbine producers. Our structural wind towers backlog as of December 31, 2013 was approximately $553.9 million .

We are a leading manufacturer in North America of storage containers and tank heads for pressure and non-pressure vessels. We manufacture these products in the U.S. and Mexico. We market a portion of our products in Mexico under the brand name of TATSA ^® .

We manufacture storage containers that support the oil, gas, and chemical industries and are used by industrial plants, utilities, residences, and small businesses in suburban and rural areas. Additionally, we manufacture fertilizer storage containers for bulk storage, farm storage, and the application and distribution of anhydrous ammonia. We also manufacture cryogenic tanks for the distribution of industrial gases and liquefied natural gas. Our storage container products range from nine-gallon containers for motor fuel use to 1.8 million-gallon bulk storage spheres. We sell our storage containers to dealers and large industrial users. In the U.S. we generally deliver storage containers to our customers who install and fill the containers. Our competitors include large and small manufacturers of storage containers.

We manufacture tank heads, which are pressed metal components used in the manufacturing of many of our finished products, both pressure rated and non-pressure rated, depending on their intended use. We use a significant portion of the tank heads we manufacture in the production of our railcars and storage containers. We also sell our tank heads to a broad range of other manufacturers. There is strong competition in the tank heads business.

We manufacture utility, traffic, and lighting structures, which are used principally by municipalities and other local and state governmental entities as well as by public and private utilities. These structures are manufactured in the U.S. and Mexico to customer specifications and installed by our customers.

There are a number of well-established entities that actively compete with us in the business of manufacturing energy equipment including several domestic and foreign manufacturers of structural wind towers for the North American market.

Inland Barge Group. Through wholly-owned subsidiaries, our Inland Barge Group is a leading U.S. manufacturer of inland barges and fiberglass barge covers. We manufacture a variety of dry cargo barges, such as deck barges, and open or covered hopper barges that transport various commodities, such as grain, coal, and aggregates. We also manufacture tank barges used to transport liquids such as crude oil, chemicals and a variety of petroleum products. Our fiberglass reinforced lift covers are used primarily for grain barges. Our four barge manufacturing facilities are located along the U.S. inland river systems, allowing for rapid delivery to our customers. Our Inland Barge Group backlog as of December 31, 2013 was approximately $ 429.6 million .

Our primary Inland Barge customers are commercial marine transportation companies. Many companies have the capability to enter into, and from time to time do enter into, the inland barge manufacturing business. We strive to compete through operational efficiency, timely delivery, and quality products. We have a number of competitors for our products in this industry.

All Other. All Other includes our captive insurance and transportation companies; legal, environmental, and maintenance costs associated with non-operating facilities; and other peripheral businesses.

Foreign Operations. Trinity's foreign operations are primarily located in Mexico. Continuing operations included sales to foreign customers, primarily in Mexico, which represented 11.7%, 10.0%, and 10.6% of our consolidated revenues for the years ended December 31, 2013 , 2012 , and 2011 , respectively. As of December 31, 2013 and 2012 , we had 3.5% and 3.1%, respectively, of our long-lived assets not held for sale located outside the U.S. We manufacture railcars, storage containers, tank heads, structural wind towers, utility structures, parts and steel components, and other products at our Mexico facilities for local consumption as well as for export to the U.S. and other countries.

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Backlog. As of December 31, 2013 and 2012 , our backlog of firm and noncancellable orders was as follows:



	December 31, 2013		December 31, 2012
	(in millions)
Rail Group
External Customers	$	4,189.6	$	2,867.5
Leasing Group	827.0		834.7
	$	5,016.6	$	3,702.2
Inland Barge	$	429.6	$	564.1
Structural wind towers
Not subject to ongoing litigation	$	553.9	$	267.8
Subject to ongoing litigation	—		412.5
	$	553.9	$	680.3

For the twelve months ended December 31, 2013 , our rail manufacturing businesses received orders for 32,240 railcars. The increase in backlog as of December 31, 2013 reflects the value of orders taken during the year. The orders in our backlog from the Leasing Group are supported by lease commitments with external customers. The final amount dedicated to the Leasing Group may vary by the time of delivery. Approximately 60% of our railcar backlog is expected to be delivered in the twelve months ending December 31, 2014 with the remainder to be delivered from 2015 through 2016. All of our Inland Barge backlog is expected to be delivered in the twelve months ending December 31, 2014. Deliveries for multi-year barge agreements are included in the backlog when specific production quantities for future years have been determined. Approximately $412.5 million included in our structural wind towers backlog at December 31, 2012 is the subject of ongoing litigation with one of the Company's customers leaving a remainder of $267.8 million not subject to litigation. The Company has removed the amount subject to litigation from its wind tower backlog at December 31, 2013 due to the expectation that the purchases will not be made as contracted. The litigation, in which Trinity seeks damages for lost profits under the contract, is pending and is discussed in Note 18 of the Notes to the Consolidated Financial Statements under "Other Matters".

Marketing. We sell substantially all of our products and services through our own sales personnel operating from offices in multiple locations in the U.S. as well as Canada, Mexico, the United Kingdom, Singapore, and Sweden. We also use independent sales representatives on a limited basis.

Raw Materials and Suppliers.

Railcar Specialty Components and Steel. Products manufactured at our railcar manufacturing facilities require a significant supply of raw materials such as steel, as well as numerous specialty components such as brakes, wheels, axles, side frames, bolsters, and bearings. Although the number of alternative suppliers of specialty components has declined in recent years, at least two suppliers continue to produce most components.

The principal material used in our manufacturing segments is steel. During 2013, the supply of steel was sufficient to support our manufacturing requirements. Market steel prices continue to exhibit short periods of volatility with 2013 prices averaging lower than 2012. Steel prices may continue to be volatile in part as a result of scrap surcharges assessed by steel mills and other market factors. We often use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers, to mitigate the effect of steel price volatility on our operating profits for the year. In general, we believe there is enough capacity in the supply industry to meet current production levels and that our existing contracts and other relationships we have in place will meet our current production forecasts.

Aggregates. Natural and lightweight aggregates can be found throughout the U.S., and many producers exist nationwide. Shipments of natural aggregates from an individual quarry are generally limited in geographic scope because the cost of transporting processed aggregates to customers is high in relation to the value of the product itself. Lightweight aggregates have a much wider, multi-state distribution area due to their higher value relative to their distribution costs. We operate 16 mining facilities strategically located in Texas, Arkansas, Louisiana, Colorado, and California.

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Employees. The following table presents the approximate headcount breakdown of employees by business group:



Business Group	December 31, 2013
Rail Group	9,600
Construction Products Group	1,610
Inland Barge Group	1,960
Energy Equipment Group	4,470
Railcar Leasing and Management Services Group	140
All Other	380
Corporate	300
	18,460

As of December 31, 2013 , approximately 9,910 employees were employed in the U.S. and approximately 8,550 employees were employed in Mexico.

Acquisitions and Divestitures. See Note 2 of the Notes to Consolidated Financial Statements.

Environmental Matters. We are subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to the release or discharge of materials into the environment; the management, use, processing, handling, storage, transport, and disposal of hazardous and non-hazardous waste and materials; and other activities relating to the protection of human health and the environment.

Environmental operating permits are, or may be, required for our operations under these laws and regulations. These operating permits are subject to modification, renewal, and revocation. We regularly monitor and review our operations, procedures, and policies for compliance with our operating permits and related laws and regulations. We believe that our operations and facilities, whether owned, managed, or leased, are in substantial compliance with applicable environmental laws and regulations and that any non-compliance is not likely to have a material adverse effect on our operations or financial condition.

Governmental Regulation.

Railcar Industry. The primary regulatory and industry authorities involved in the regulation of the railcar industry are the U.S. Environmental Protection Agency; the Research and Special Programs Administration, the Federal Railroad Administration ("FRA"), and the Pipeline and Hazardous Materials Safety Administration ("PHMSA"), all divisions of the U.S. Department of Transportation ("USDOT"); and the Association of American Railroads ("AAR"). These organizations establish rules and regulations for the railcar industry, rail infrastructure, and rail interchange, including product specifications and standards for the design and manufacture of railcars and railcar parts; mechanical, maintenance, and related standards for railcars; safety of railroad equipment, tracks, and operations; and packaging and transportation of hazardous or toxic materials. We believe that our product designs and operations are in compliance with these specifications, standards and regulations.

Recent derailments in North America of trains transporting crude oil have caused various regulatory agencies and industry organizations, including but not limited to the USDOT; FRA; PHMSA; AAR and the AAR Tank Car Committee ("AARTCC"); American Petroleum Institute ("API"); and Railcar Supply Institute ("RSI"), as well as community governments, to focus attention on transportation by rail of flammable materials. In September 2013, PHMSA published an Advance Notice of Proposed Rulemaking seeking interested party comments on potential regulatory initiatives pertaining to the transportation of flammable materials by rail. While the regulatory process itself and the scope of any potential regulatory change is uncertain, the Company is assessing its position under a variety of potentially diverse, final rule scenarios. Any final rule may or may not materially impact the rail industry as a whole; railroad operations; older and newer tank railcars that meet or exceed currently mandated FRA standards; future tank railcar specifications; and the capability of the nation’s railcar manufacturing, repair and maintenance infrastructure to implement mandated retrofit configurations or new construction. The Company cannot assure that costs incurred to comply with standards and regulations emerging from PHMSA’s rulemaking process will not be material to the Company’s financial position or results of operations.

Inland Barge Industry. The primary regulatory and industry authorities involved in the regulation of the inland barge industry are the U.S. Coast Guard; the U.S. National Transportation Safety Board; the U.S. Customs Service; the Maritime Administration of the U.S. Department of Transportation; and private industry organizations such as the American Bureau of Shipping. These organizations establish safety criteria, investigate vessel accidents, and recommend improved safety standards. Violations of these laws and related regulations can result in substantial civil and criminal penalties as well as injunctions curtailing operations. We believe that our product specifications and operations are in compliance with applicable laws and regulations.

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Highway Products. The primary regulatory and industry authorities involved in the regulation of highway products manufacturers are the U.S. Department of Transportation, the Federal Highway Administration, and various state highway departments. These organizations establish certain standards, specifications, and product testing criteria related to the manufacture of our highway products. If our products were found not to be in compliance with these standards, specifications, or testing criteria we would be required to re-qualify our products for installation on state and national highways. We believe that our highway products are in compliance with all applicable standards and specifications.

Occupational Safety and Health Administration and Similar Regulations. Our operations are subject to regulation of health and safety matters by the U.S. Occupational Safety and Health Administration and the U.S. Mine Safety and Health Administration. We believe that we employ appropriate precautions to protect our employees and others from workplace injuries and harmful exposure to materials handled and managed at our facilities. However, claims that may be asserted against us for work-related illnesses or injury and the further adoption of occupational and mine safety and health regulations in the U.S. or in foreign jurisdictions in which we operate could increase our operating costs. While we do not anticipate having to make material expenditures in order to remain in substantial compliance with health and safety laws and regulations, we are unable to predict the ultimate cost of compliance.

See Item 1A for further discussion of risk factors with regard to environmental, governmental, and other matters.

Executive Officers and Other Corporate Officers of the Company.

The following table sets forth the names and ages of all of our executive officers and other corporate officers, their positions and offices presently held by them, and the year each person first became an officer. All officer terms expire in May 2014.



Name	Age	Office	Officer Since
Timothy R. Wallace ^*	60	Chairman, Chief Executive Officer, and President	1985
James E. Perry ^*	42	Senior Vice President and Chief Financial Officer	2005
William A. McWhirter II ^*	49	Senior Vice President and Group President	2005
D. Stephen Menzies ^*	58	Senior Vice President and Group President	2001
S. Theis Rice ^*	63	Senior Vice President and Chief Legal Officer	2002
Tammy D. Gilbert	53	Vice President, Information Technology	2012
Virginia C. Gray, Ph.D.	54	Vice President, Organizational Development	2007
Mary E. Henderson ^*	55	Vice President and Chief Accounting Officer	2009
John M. Lee	53	Vice President, Business Development	1994
Steven L. McDowell	52	Vice President and Chief Audit Executive	2013
Gail M. Peck	46	Vice President and Treasurer	2010
Heather Perttula Randall	40	Vice President, Legal Affairs and Government Relations	2011
Jared S. Richardson	41	Vice President, Associate General Counsel and Secretary	2010
Stephen W. Smith	64	Vice President and Chief Technical Officer	2012
C. Michael Williams	58	Vice President, Human Resources	2012

^* Executive officer subject to reporting requirements under Section 16 of the Securities Exchange Act of 1934.

Ms. Gilbert joined Trinity in 2012 as Vice President, Information Technology. Prior to joining Trinity, she worked for Hewlett-Packard from 2006 to 2012, most recently serving as the America's Vice President, Transition, Transformation, and Project/Program Management. She has also held executive positions with Electronic Data Systems, Sabre Holdings, American Airlines, and Harris Methodist Hospital.

Ms. Henderson joined the Company in 2003 as Director of Financial Reporting. She was named Assistant Controller in 2005 and Controller in 2009. In 2010, Ms. Henderson was elected Vice President and Chief Accounting Officer.

Mr. McWhirter joined the Company in 1985 and held various accounting positions until 1992, when he became a business group officer. In 1999, he was elected to a corporate position as Vice President for Mergers and Acquisitions. In 2001, he was named Executive Vice President of a business group. In March 2005, he became Vice President and Chief Financial Officer and in 2006, Senior Vice President and Chief Financial Officer. In 2010, Mr. McWhirter was named Senior Vice President and Group President of the Construction Products and Inland Barge Groups. In 2012, Mr. McWhirter was named Senior Vice President and Group President of the Construction Products, Energy Equipment, and Inland Barge Groups.

Mr. McDowell joined the Company in 2013 as Vice President and Chief Audit Executive. Prior to joining Trinity, he worked for Dean Foods from 2007 to 2013, where he held a variety of management positions and most recently served as Vice President, Internal Audit and Risk Management. Prior to his tenure at Dean Foods, he served as Vice President - Internal Audit at Centex Corporation.

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Ms. Peck joined Trinity in 2010 as Treasurer and was appointed Vice President and Treasurer in 2011. Prior to joining Trinity, she worked for Centex Corporation from 2001 to 2009, most recently serving as Vice President and Treasurer since 2004.

Mr. Perry joined Trinity in 2004 and was appointed Treasurer in April 2005. Mr. Perry was named a Vice President of Trinity in 2006 and appointed its Vice President, Finance in 2007. In 2010, Mr. Perry was appointed Chief Financial Officer and in 2011 was elected Senior Vice President and Chief Financial Officer.

Ms. Randall joined the Company in 2005 as Chief Counsel of TrinityRail. In 2006, she became Deputy General Counsel in charge of litigation for Trinity. In 2011, Ms. Randall was elected Vice President, Legal Affairs and Government Relations.

Mr. Rice joined the Company in 1991 and held various legal and business positions until 2005, when he was elected Vice President and Chief Legal Officer. He was named Senior Vice President, Human Resources and Chief Legal Officer in 2011 and was named Senior Vice President and Chief Legal Officer in 2013.

Mr. Richardson joined the Company in 2010 as Associate General Counsel and Secretary. In 2012, Mr. Richardson was elected Vice President, Associate General Counsel, and Secretary. From 2004 to 2009, he handled legal, corporate governance, and secretary matters for Energy Future Holdings Corp. (formerly TXU Corp.), a company engaged in the generation, sale, transmission, and distribution of electricity.

Mr. Smith joined the Company in 1976 and held various engineering positions advancing to Senior Vice President Engineering for TrinityRail. In 2008, Mr. Smith was promoted to a corporate position and has served as an engineering and technical advisor to Trinity's Group Presidents and corporate officers. In 2012, Mr. Smith was elected Vice President and was named Chief Technical Officer in 2013.

Mr. Williams joined Trinity in 2012 as Vice President, Human Resources. Prior to joining Trinity, he was Vice President and Chief People Officer at Luminant, the power generation and mining subsidiary of Energy Future Holdings Corp from 2010 to 2012. He has also held human resources leadership positions at Safety-Kleen Systems, Inc., Service Master, Inc., and Waste Management, Inc.

Messrs. Wallace, Menzies, and Lee and Dr. Gray have been in full time employment of Trinity or its subsidiaries for more than five years and have performed essentially the same respective duties during such time.

Item 1A. Risk Factors.

There are risks and uncertainties that could cause our actual results to be materially different from those mentioned in forward-looking statements that we make from time to time in filings with the Securities and Exchange Commission (“SEC”), news releases, reports, proxy statements, registration statements, and other written communications, as well as oral forward-looking statements made from time to time by representatives of our Company. All known material risks and uncertainties are described below. The cautionary statements below discuss important factors that could cause our business, financial condition, operating results, and cash flows to be materially adversely affected. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements contained herein. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Volatility in the global financial markets may adversely affect our business and operating results. During periods of volatility in the global financial markets, certain of our customers could delay or otherwise reduce their purchases of railcars, barges, wind towers, and other products and services. If volatile conditions in the global credit markets prevent our customers' access to credit, product order volumes may decrease or customers may default on payments owed to us. Likewise, if our suppliers face challenges obtaining credit, selling their products to customers that require purchasing credit, or otherwise operating their businesses, the supply of materials we purchase from them to manufacture our products may be interrupted. Any of these conditions or events could result in reductions in our revenues, increased price competition, or increased operating costs, which could adversely affect our business results of operations and financial condition.

Our backlog is not necessarily indicative of the level of our future revenues. Our backlog represents future production and estimated potential revenue attributable to firm contracts with, or approved purchase orders from, our customers for delivery in various periods. Instability in the global economy, negative conditions in the global credit markets, volatility in the industries that our products serve, changes in legislative policy, adverse changes in the availability of raw materials and supplies, or adverse changes in the financial condition of our customers could lead to customers' requests for deferred deliveries of our backlog orders. Additionally such events could result in our customers' attempts to cancel orders in whole or in part or terminate firm contracts resulting in un-remedied contract breaches or purchase order breaches, and increased commercial litigation costs. Such occurrences could adversely affect our cash flows and results of operations.

The cyclical nature of our business results in lower revenues during economic downturns. We operate in cyclical industries. Downturns in overall economic conditions usually have a significant adverse effect on cyclical industries due to decreased demand

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for new and replacement products. Decreased demand could result in lower sales volumes, lower prices, and/or a loss of profits. The railcar, barge, and wind energy industries have previously experienced sharp cyclical downturns and at such times operated with a minimal backlog.

Litigation claims could increase our costs and weaken our financial condition. We are currently, and may from time to time be, involved in various claims or legal proceedings arising out of our operations. Adverse outcomes in some or all of these matters could result in judgments against us for significant monetary damages that could increase our costs and weaken our financial condition. Although we maintain reserves for our reasonably estimable liability, our reserves may be inadequate to cover our portion of claims or judgments after taking into consideration rights in indemnity and recourse to third parties. Any such claims or judgments could have a material adverse effect on our business, operations, or overall financial condition.

Increases in the price and demand for steel could lower our margins and profitability. The principal material used in our manufacturing segments is steel. Market steel prices continue to exhibit short periods of volatility. Steel prices may experience further volatility as a result of scrap surcharges assessed by steel mills and other market factors. We often use contract-specific purchasing practices, existing supplier commitments, contractual price escalation provisions, and other arrangements with our customers to mitigate the effect of this volatility on our operating profits for the year. To the extent that we do not have such arrangements in place, an increase in steel prices could materially lower our margins and profitability. In addition, meeting production demands is dependent on our ability to obtain a sufficient amount of steel. An unanticipated interruption in our supply chain could have an adverse impact on both our margins and production schedules.

We have potential exposure to environmental liabilities, which may increase costs and lower profitability. We are subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to: (i) the release or discharge of materials into the environment at our facilities or with respect to our products while in operation; (ii) the management, use, processing, handling, storage, transport, and disposal of hazardous and non-hazardous waste and materials; and (iii) other activities relating to the protection of human health and the environment. Such laws and regulations not only expose us to liability for our own acts, but also may expose us to liability for the acts of others or for our actions which were in compliance with all applicable laws at the time these actions were taken. In addition, such laws may require significant expenditures to achieve compliance, and are frequently modified or revised to impose new obligations. Civil and criminal fines and penalties may be imposed for non-compliance with these environmental laws and regulations. Our operations involving hazardous materials also raise potential risks of liability under common law.

Environmental operating permits are, or may be, required for our operations under these laws and regulations. These operating permits are subject to modification, renewal, and revocation. Although we regularly monitor and review our operations, procedures, and policies for compliance with our operating permits and related laws and regulations, the risk of environmental liability is inherent in the operation of our businesses, as it is with other companies operating under environmental permits.

However, future events, such as changes in, or modified interpretations of, existing environmental laws and regulations or enforcement policies, or further investigation or evaluation of the potential health hazards associated with the manufacture of our products and related business activities and properties, may give rise to additional compliance and other costs that could have a material adverse effect on our financial condition and operations.

In addition to environmental laws, the transportation of commodities by railcar or barge raises potential risks in the event of a derailment or other accident that results in the release of an environmentally sensitive substance. Generally, liability under existing law in the U.S. for a derailment or other accident depends upon causation analysis and the acts, errors, or omissions, if any, of a party involved in the transportation activity, including, but not limited to, the railroad, the shipper, the buyer and seller of the substances being transported, or the manufacturer of the barge, railcar, or its components. Under certain circumstances strict liability concepts may apply and if we are found liable in any such incident, it could have a material adverse effect on our financial condition, business, and operations.

We operate in highly competitive industries. We may not be able to sustain our market leadership positions, which may impact our financial results. We face aggressive competition in all geographic markets and each industry sector in which we operate. In addition to price, we face competition in product performance and technological innovation, quality, reliability of delivery, customer service, and other factors. This competition is often intense, the effects of which could reduce our revenues and operating profits, limit our ability to grow, increase pricing pressure on our products, and otherwise affect our financial results.

The limited number of customers in certain of our businesses, the variable purchase patterns of our customers in all our segments, and the timing of completion, delivery, and customer acceptance of orders may cause our revenues and income from operations to vary substantially each quarter, which would result in significant fluctuations in our quarterly results. Some of the markets we serve are dominated by a limited number of customers. Customers in each of our business segments do not purchase a similar volume of products each year nor make purchases consistently from year-to-year. As a result, the order levels for our products

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have varied significantly from quarterly period to quarterly period in the past and may continue to vary significantly in the future. Therefore, our results of operations in any particular quarterly period may be significantly affected. As a result of these quarterly fluctuations, we believe that comparisons of our sales and operating results between quarterly periods may not be meaningful and should not be relied upon as indicators of future performance.

Access to capital due to deterioration of conditions in the global capital markets, weakening of macroeconomic conditions, and negative changes in credit ratings may be limited or unavailable. In general, the Company, and more specifically its leasing subsidiaries' operations, rely in large part upon banks and capital markets to fund its operations and contractual commitments and refinance existing debt. These markets can experience high levels of volatility and access to capital can be constrained for an extended period of time. In addition to conditions in the capital markets, a number of other factors could cause the Company to incur increased borrowing costs and to have greater difficulty accessing public and private markets for both secured and unsecured debt. These factors include the Company's financial performance and its credit ratings and rating outlook as determined primarily by rating agencies such as Standard & Poor's, Moody's, and Fitch's. If the Company is unable to secure financing on acceptable terms, the Company's other sources of funds, including available cash, bank facilities, and cash flow from operations may not be adequate to fund its operations and contractual commitments and refinance existing debt.

Lower demand for re-marketed railcars from expiring leases on favorable terms could result in lower lease utilization percentages and reduced revenues. The profitability of our railcar leasing business is partially dependent on our ability to re-lease railcars upon the expiration and non-renewal of existing leases, to sell railcars in the secondary market as part of our ongoing business activities, or upon lease defaults or bankruptcy filings by third party lessees. Our ability to re-lease or sell leased railcars profitably is dependent upon several factors, including, among others:


•	the cost of and demand for leases or ownership of newer or specific use models;


•	the availability in the market generally of other used or new railcars;


•	the degree of obsolescence of leased railcars, including railcars subject to expedited regulatory mandate;


•	the prevailing market and economic conditions, including the availability of credit, interest rates, and inflation rates;


•	the demand for refurbishment; and


•	the volume and nature of railcar traffic and loadings

A downturn in the industries in which our lessees operate and decreased demand for railcars could also increase our exposure to re-marketing risk because lessees may demand shorter lease terms or newer railcars, requiring us to re-market leased railcars more frequently. Furthermore, the resale market for previously leased railcars has a limited number of potential buyers. Our inability to re-lease or sell leased railcars on favorable terms could result in lower lease rates, lower lease utilization percentages, and reduced revenues.

Fluctuations in the price and supply of specialty and other component parts used in the production of our products could have a material adverse effect on our ability to cost-effectively manufacture and sell our products. In some instances, we rely on a limited number of suppliers for certain components needed in our production. A significant portion of our business depends on the adequate supply of numerous specialty and other parts and components at competitive prices such as brakes, wheels, side frames, bolsters, and bearings for the railcar business, as well as flanges for the wind towers business. Our manufacturing operations partially depend on our ability to obtain timely deliveries of materials, parts, and components in acceptable quantities and quality from our suppliers. Certain parts and components of our products are currently available from a limited number of suppliers and, as a result, we may have limited control over pricing, availability, and delivery schedules. If we are unable to purchase a sufficient quantity of parts and components on a timely basis, we could face disruptions in our production and incur delays while we attempt to engage alternative suppliers. Fewer suppliers could result from unimproved or worsening economic or commercial conditions which could increase our rejections for poor quality and require us to source unknown and distant supply alternatives. Any such disruption or conditions could harm our business and adversely impact our results of operations.

Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs. We use various gases, including natural gas, at our manufacturing facilities and use diesel fuel in vehicles to transport our products to customers and to operate our plant equipment. An outbreak or escalation of hostilities between the U.S. and any foreign power and, in particular, prolonged conflicts could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of natural gas or energy in general. Hurricanes or other natural disasters could result in a real or perceived shortage of petroleum and/or natural gas potentially resulting in an increase in natural gas prices or general energy costs. Speculative trading in energy futures in the world markets could also result in an increase in natural gas and general energy cost. Future

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limitations on the availability (including limitations imposed by increased regulation or restrictions on rail, road, and pipeline transportation of energy supplies) or consumption of petroleum products and/or an increase in energy costs, particularly natural gas for plant operations and diesel fuel for vehicles and plant equipment, could have an adverse effect upon our ability to conduct our business cost effectively.

Our manufacturer's warranties expose us to product replacement and repair claims. Depending on the product, we warrant against manufacturing defects due to our workmanship and certain materials, parts, and components pursuant to express limited contractual warranties. Accordingly, we may be subject to significant warranty claims in the future such as multiple claims based on one defect repeated throughout our production process or claims for which the cost of repairing or replacing the defective part, component or material is highly disproportionate to the original price. These types of warranty claims could result in costly product recalls, significant repair or replacement costs, and damage to our reputation.

Increasing insurance claims and expenses could lower profitability and increase business risk. The nature of our business subjects us to product liability, property damage, and personal injury claims, especially in connection with the repair and manufacture of products that our customers use to transport hazardous, flammable, toxic, or explosive materials. Over the last several years, insurance carriers have raised premiums for many companies operating in our industries. Increased premiums may further increase our insurance expense as coverage expires or otherwise cause us to raise our self-insured retention. If the number or severity of claims within our self-insured retention increases, we could suffer costs in excess of the reserves we maintain for the reasonably estimable liability in such claims or such number and severity of claims could expose us to uninsured damages if we were unable or elected not to insure against certain hazards because of high premiums or other reasons. While our liability insurance coverage is at or above levels based on commercial norms in our industries, an unusually large liability claim or a string of claims coupled with an unusually large damage award could exceed our liability insurance coverage. In addition, the availability of, and our ability to collect on, insurance coverage is often subject to factors beyond our control. If any of our third-party insurers fail, cancel our coverage, or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase and the management of our business operations would be disrupted. Moreover, any accident or incident involving our industries in general or us or our products specifically, even if we are fully insured, contractually indemnified, or not held to be liable, could negatively affect our reputation among customers and the public, thereby making it more difficult for us to compete effectively, and could significantly affect the cost and availability of insurance in the future.

Risks related to our operations outside of the U.S., particularly Mexico, could decrease our profitability. Our operations outside of the U.S. are subject to the risks associated with cross-border business transactions and activities. Political, legal, trade, economic change or instability, unrestrained criminal activities, or social unrest could limit or curtail our respective foreign business activities and operations, including the ability to hire and retain employees. Violence in Mexico associated with drug trafficking has not abated. We have not, to date, been materially affected by any of these risks, but we cannot predict the likelihood of future effects from such risks or any resulting adverse impact on our business, results of operations, or financial condition. Many items manufactured by us in Mexico are sold primarily in the U.S. and the transportation and import of such products may be disrupted. Some foreign countries where we operate have regulatory authorities that regulate railroad safety, railcar and railcar component part design, performance, and manufacture of equipment used on their railroad systems. If we fail to obtain and maintain certifications of our railcars and railcar parts and components within the various foreign countries where we operate, we may be unable to market and sell our railcars, parts, and components in those countries. In addition, unexpected changes in laws, rules, and regulatory requirements; tariffs and other trade barriers, including regulatory initiatives for buying goods produced in America; more stringent or restrictive laws, rules, and regulations relating to labor or the environment; adverse tax consequences; and price exchange controls could limit operations affecting production throughput and making the manufacture and distribution of our products less timely or more difficult. Furthermore, any material change in the quotas, regulations, or duties on imports imposed by the U.S. government and agencies, or on exports by the government of Mexico or its agencies, could affect our ability to export products that we manufacture in Mexico. Because we have operations outside the U.S., we could be adversely affected by final judgments of non-compliance with the U.S. Foreign Corrupt Practices Act or import/export rules and regulations and similar anti-corruption or import/export laws of other countries.

Equipment failures or extensive damage to our facilities, including as might occur as a result of natural disasters, could lead to production or service curtailments or shutdowns, loss of revenue or higher expenses. We operate a substantial amount of equipment at our production facilities, several of which are situated in tornado and hurricane zones and on navigable waterways in the U.S. An interruption in production capabilities or maintenance and repair capabilities at our facilities, as a result of equipment failure or acts of nature, including non-navigation orders resulting from low-water conditions issued from time to time by the U.S. Army Corps of Engineers on one or more U.S. rivers which serve our facilities, could reduce or prevent our production, service, or repair of our products and increase our costs and expenses. A halt of production at any of our manufacturing facilities could severely affect delivery times to our customers. While we maintain business recovery plans that are intended to allow us to recover from natural disasters that could disrupt our business, we cannot provide assurances that our plans would fully protect us from the effects of all such disasters. In addition, insurance may not adequately compensate us for any losses incurred as a result of natural or other disasters, which may adversely affect our financial condition. Any significant delay in deliveries not otherwise contractually

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mitigated by favorable force majeure provisions could result in cancellation of all or a portion of our orders, cause us to lose future sales, and negatively affect our reputation and our results of operations.

Because we do not have employment contracts with our key management employees, we may not be able to retain their services in the future. Our success depends on the continued services of our key management employees, none of whom currently have an employment agreement with us. Although we have historically been largely successful in retaining the services of our key management, we may not be able to do so in the future. The loss of the services of one or more key members of our management team could result in increased costs associated with attracting and retaining a replacement and could disrupt our operations and result in a loss of revenues.

Repercussions from terrorist activities or armed conflict could harm our business. Terrorist activities, anti-terrorist efforts, and other armed conflict involving the U.S. or its interests abroad may adversely affect the U.S. and global economies, potentially preventing us from meeting our financial and other obligations. In particular, the negative impacts of these events may affect the industries in which we operate. This could result in delays in or cancellations of the purchase of our products or shortages in raw materials, parts, or components. Any of these occurrences could have a material adverse impact on our operating results, revenues, and costs.

Violations of or changes in the regulatory requirements applicable to the industries in which we operate may increase our operating costs. Our railcar manufacturing and leasing businesses are regulated by multiple governmental regulatory agencies such as the U.S. Environmental Protection Agency; the U.S. Department of Transportation and the administrative agencies it oversees, including the Federal Railroad Administration, the Pipeline and Hazardous Materials Safety Administration, and the Research and Special Programs Administration; and industry authorities such as the Association of American Railroads. All such agencies and authorities promulgate rules, regulations, specifications, and operating standards affecting railcar design, configuration, and mechanics; maintenance, and rail-related safety standards for railroad equipment, tracks, and operations, including the packaging and transportation of hazardous or toxic materials. Future regulatory changes in the rail industry, including rules, regulations, and specifications mandating modified railcar designs, configurations, materials, and equipment could affect compliance costs and may have a material adverse effect on our financial condition and operations.

Our Inland Barge operations are subject to regulation by the U.S. Coast Guard; the U.S. National Transportation Safety Board; the U.S. Customs Service; the Maritime Administration of the U.S. Department of Transportation; and private industry organizations such as the American Bureau of Shipping. These organizations establish safety criteria, investigate vessel accidents and recommend improved safety standards. Violations of these laws and related regulations can result in substantial civil and criminal penalties as well as injunctions curtailing operations.

Our Construction Products Group is subject to regulation by the U.S. Department of Transportation; the Federal Highway Administration; and state highway departments and administrative agencies. These organizations establish certain standards, specifications, and product testing criteria related to the manufacture of our highway products. If our products were found to be not in compliance with these standards, specifications, or product testing criteria, we would be required to re-qualify our products for installation on state and national highways.

Our operations are also subject to regulation of health and safety matters by the U.S. Occupational Safety and Health Administration and the U.S. Mine Safety and Health Administration. Although we believe we employ appropriate precautions to protect our employees and others from workplace injuries and harmful exposure to materials handled and managed at our facilities, claims that may be asserted against us for work-related illnesses or injury, and the further adoption of occupational and mine safety and health regulations in the U.S. or in foreign jurisdictions in which we operate could increase our operating costs. We are unable to predict the ultimate cost of compliance with these health and safety laws and regulations.

Some of our customers place orders for our products in reliance on their ability to utilize tax benefits or tax credits such as accelerated depreciation or the production tax credit for renewable energy, or to recover the cost of products acquired to comply with federal requirements or standards. There is no assurance that the U.S. government will reauthorize, modify, or otherwise not allow the expiration of such tax benefits, tax credits, or reimbursement policies, and in cases where such subsidies and policies are materially modified to reduce the available benefit, credit, or reimbursement or are otherwise allowed to expire, the demand for our products could decrease, thereby creating the potential for a material adverse effect on our financial condition or results of operations.

We may be required to reduce the value of our long-lived assets and/or goodwill, which would weaken our financial results. We periodically evaluate for potential impairment the carrying values of our long-lived assets to be held and used. The carrying value of a long-lived asset to be held and used is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset is less than the carrying value. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved or market quotes as available. Impairment losses on long-

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lived assets held for sale are determined in a similar manner, except that fair values are reduced commensurate with the estimated cost to dispose of the assets. In addition, goodwill is required to be tested for impairment annually, or on an interim basis whenever events or circumstances change, indicating that the carrying amount of the goodwill might be impaired. Impairment losses related to reductions in the value of our long-lived assets or our goodwill could weaken our financial condition and results of operations.

We may incur increased costs due to fluctuations in interest rates and foreign currency exchange rates. We are exposed to risks associated with fluctuations in interest rates and changes in foreign currency exchange rates. Under varying circumstances, we may seek to minimize these risks through the use of interest rate hedges and similar financial instruments and other activities, although these measures, if and when implemented, may not be effective. Any material and untimely changes in interest rates or exchange rates could result in significant losses to us.

Railcars as a significant mode of transporting freight could decline, become more efficient over time, experience a shift in types of modal transportation, and/or certain railcar types could become obsolete. As the freight transportation markets we serve continue to evolve and become more efficient, the use of railcars may decline in favor of other more economic transportation modalities or the number of railcars needed to transport current or an increasing volume of goods may decline. Features and functionality specific to certain railcar types could result in those railcars becoming obsolete as customer requirements for freight delivery change or as regulatory mandates are promulgated that affect railcar design, configuration, and manufacture.

Business, regulatory, and legal developments regarding climate change may affect the demand for our products or the ability of our critical suppliers to meet our needs. We have followed the current debate over climate change in general, and the related science, policy discussion, and prospective legislation. Additionally, the potential challenges and opportunities for the Company that climate change policy and legislation may pose have been reviewed. However, any such challenges or opportunities are heavily dependent on the nature and degree of climate change legislation and the extent to which it applies to our industries. At this time, the Company cannot predict the ultimate impact of climate change and climate change legislation on the Company's operations or opportunities. Potential opportunities could include greater demand for wind towers and certain types of railcars, while potential challenges could include decreased demand for certain types of railcars and higher energy costs. Further, when or if these impacts may occur cannot be assessed until scientific analysis and legislative policy are more developed and specific legislative proposals begin to take shape.

Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies could adversely affect our financial results . Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the reported value of our assets or liabilities and financial results and are critical because they require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC, and our independent registered public accounting firm) may amend or even reverse their previous interpretations or positions on how these standards should be applied. These changes can be difficult to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements. For a further discussion of some of our critical accounting policies and standards and recent accounting changes, see Critical Accounting Policies and Estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

Shortages of skilled labor could adversely impact our operations. We depend on skilled labor in the manufacture, maintenance, and repair of our products. Some of our facilities are located in areas where demand for skilled laborers may exceed supply. Shortages of some types of skilled laborers, such as welders, could restrict our ability to maintain or increase production rates and could increase our labor costs.

Some of our employees belong to labor unions, and strikes or work stoppages could adversely affect our operations. We are a party to collective bargaining agreements with various labor unions at some of our operations in the U.S. and all of our operations in Mexico. Disputes with regard to the terms of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers. We cannot be assured that our relations with our workforce will remain positive or that union organizers will not be successful in future attempts to organize at some of our facilities. If our workers were to engage in a strike, work stoppage or other slowdown, or other employees were to become unionized, or the terms and conditions in future labor agreements were renegotiated, we could experience a significant disruption of our operations and higher ongoing labor costs. In addition, we could face higher labor costs in the future as a result of severance or other charges associated with lay-offs, shutdowns or reductions in the size and scope of our operations or difficulties of restarting our operations that have been temporarily shuttered.

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From time to time we may take tax positions that the Internal Revenue Service or other taxing jurisdictions may contest. We have in the past and may in the future take tax positions that the Internal Revenue Service (“IRS”) or other taxing jurisdictions may challenge. We are required to disclose to the IRS as part of our tax returns particular tax positions in which we have a reasonable basis for the position but not a "more likely than not" chance of prevailing. If the IRS successfully contests a tax position that we take, we may be required to pay additional taxes or fines which may not have been previously accrued that may adversely affect our results of operations and financial position.

Our inability to produce and disseminate relevant and/or reliable data and information pertaining to our business in an efficient, cost-effective, secure, and well-controlled fashion may have significant negative impacts on confidentiality requirements and obligations and proprietary needs and expectations and, therefore, our future operations, profitability, and competitive position. Management relies on information technology infrastructure and architecture, including hardware, network, software, people, and processes to provide useful and confidential information to conduct our business in the ordinary course, including correspondence and commercial data and information interchange with customers, suppliers, legal counsel, governmental agencies, and financial institution consultants, and to support assessments and conclusions about future plans and initiatives pertaining to market demands, operating performance, and competitive positioning. In addition, any material failure, interruption of service, or compromised data security could adversely affect our relations with suppliers and customers, place us in violation of confidentiality and data protection laws, rules, and regulations, and result in negative impacts to our market share, operations, and profitability. Security breaches in our information technology could result in theft, destruction, loss, misappropriation, or release of confidential data or intellectual property which could adversely impact our future results.

Discord, conflict, and lack of compromise within and amongst the executive and legislative branches of the U.S. government relative to federal government budgeting, taxation policies, government expenditures, and U.S. borrowing/debt ceiling limits could adversely affect our business and operating results. The inability of the legislative and executive branches of the U.S. government to pass a federal government budget, address tax revenue requirements, control deficit spending, and effectively manage short and long term U.S. government borrowing, debt ratings, and debt ceiling adjustments, could negatively impact U.S. domestic and global financial markets thereby reducing demand by our customers for our products and services thereby reducing revenues. Similarly, if our suppliers face challenges in obtaining credit, in selling their products, or otherwise in operating their businesses, they may become unable to continue to offer the materials we purchase from them to manufacture our products. These actions could result in reductions in our revenues, increased price competition, or increased operating costs, which could adversely affect our business results of operations and financial condition.

The Company could potentially fail to successfully integrate new businesses or products into its current business. The Company routinely engages in the search for growth opportunities, including assessment of merger and acquisition prospects in new markets and/or products. Any merger or acquisition in which the Company becomes involved and ultimately concludes is subject to integration into the Company's businesses and culture. If such integration is unsuccessful to any material degree, such lack of success could have a material adverse effect on our business, operations, or overall financial condition.

Additional Information. Our Internet website address is www.trin.net . Information on the website is available free of charge. We make available on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments thereto, as soon as reasonably practicable after such material is filed with, or furnished to, the SEC. The contents of our website are not intended to be incorporated by reference into this report or in any other report or document we file and any reference to our website is intended to be an inactive textual reference only.

Item 1B. Unresolved Staff Comments.

None.

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Item 2. Properties.

We principally operate in various locations throughout the U.S. and in Mexico. Our facilities are considered to be in good condition, well maintained, and adequate for our purposes.



	Approximate Square Feet		Approximate Square Feet Located In
	Owned	Leased	US	Mexico
Rail Group	5,797,300	99,500	3,820,000	2,076,800
Construction Products Group	1,770,200	102,400	1,841,500	31,100
Inland Barge Group	986,300	81,000	1,067,300	—
Energy Equipment Group	1,692,300	435,000	1,439,400	687,900
Executive Offices	231,200	3,100	211,000	23,300
	10,477,300	721,000	8,379,200	2,819,100

Our estimated weighted average production capacity utilization for the twelve month period ended December 31, 2013 is reflected by the following percentages:



	Production Capacity Utilized
Rail Group	80	%
Construction Products Group	70	%
Inland Barge Group	85	%
Energy Equipment Group	85	%

Item 3. Legal Proceedings.

See Note 18 of the Notes to Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-K.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the New York Stock Exchange under the ticker symbol “TRN”. The following table shows the closing price range of our common stock by quarter for the years ended December 31, 2013 and 2012 .



	Prices
Year Ended December 31, 2013	High		Low
Quarter ended March 31, 2013	$	45.39	$	36.20
Quarter ended June 30, 2013	44.62		35.29
Quarter ended September 30, 2013	46.17		35.75
Quarter ended December 31, 2013	56.65		43.58



Year Ended December 31, 2012	High		Low
Quarter ended March 31, 2012	$	35.93	$	29.69
Quarter ended June 30, 2012	33.48		22.80
Quarter ended September 30, 2012	33.55		21.85
Quarter ended December 31, 2012	36.05		29.01

Our transfer agent and registrar as of December 31, 2013 was American Stock Transfer & Trust Company.

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Holders

At December 31, 2013 , we had 1,822 record holders of common stock. The par value of the common stock is $1.00 per share.

Dividends

Trinity has paid 199 consecutive quarterly dividends. Quarterly dividends declared by Trinity for the years ended December 31, 2013 and 2012 are as follows:



	Year Ended December 31,
	2013		2012
Quarter ended March 31,	$	0.11	$	0.09
Quarter ended June 30,	0.13		0.11
Quarter ended September 30,	0.15		0.11
Quarter ended December 31,	0.15		0.11
Total	$	0.54	$	0.42

Recent Sales of Unregistered Securities

None.

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Performance Graph

The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

The following graph compares the Company's cumulative total stockholder return (assuming reinvestment of dividends) during the five-year period ended December 31, 2013 with an overall stock market index (New York Stock Exchange Composite Index) and the Company's peer group index (Dow Jones US Commercial Vehicles & Trucks Index). The data in the graph assumes $100 was invested on December 31, 2008.



	2008	2009	2010	2011	2012	2013
Trinity Industries, Inc.	100	113	175	200	242	373
Dow Jones US Commercial Vehicles & Trucks Index	100	146	240	211	236	282
New York Stock Exchange Composite Index	100	129	146	141	164	208

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Issuer Purchases of Equity Securities N EED

This table provides information with respect to purchases by the Company of shares of its common stock during the quarter ended December 31, 2013 :



Period	Number of Shares Purchased ⁽¹⁾	Average Price Paid per Share ⁽¹⁾		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs ⁽²⁾	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs ⁽²⁾
October 1, 2013 through October 31, 2013	357	$	46.02	—	$	126,211,453
November 1, 2013 through November 30, 2013	253,847	$	53.07	240,000	$	113,474,571
December 1, 2013 through December 31, 2013	399,065	$	54.12	399,000	$	91,880,173
Total	653,269	$	53.71	639,000	$	91,880,173

⁽¹⁾ These columns include the following transactions during the three months ended December 31, 2013: (i) the deemed surrender to the Company of 2,782 shares of common stock to pay the exercise price and satisfy tax withholding in connection with the exercise of employee stock options, (ii) the surrender to the Company of 11,137 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees, (iii) the purchase of 350 shares of common stock by the Trustee for assets held in a non-qualified employee profit-sharing plan trust, and (iv) the purchase of 639,000 shares of common stock on the open market as part of the stock repurchase program.

⁽²⁾ In September 2012, the Company's Board of Directors authorized a $200 million share repurchase program, effective October 1, 2012, which expires on December 31, 2014. During the three months ended December 31, 2013, the Company repurchased 639,000 shares under the program at a cost of approximately $34.3 million. Certain shares of stock repurchased during December 2013, totaling $5.0 million, were cash settled in January 2014 in accordance with normal settlement practices. The approximate dollar value of shares that were eligible to be repurchased under such share repurchase program is shown as of the end of such month or quarter.

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Item 6. Selected Financial Data.

The following financial information for the five years ended December 31, 2013 has been derived from our audited consolidated financial statements. This information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included elsewhere herein.



	Year Ended December 31,
	2013			2012			2011			2010			2009
	(in millions, except percent and per share data)
Statement of Operations Data:
Revenues	$	4,365.3		$	3,811.9		$	2,938.3		$	1,930.7		$	2,162.9
Operating profit (loss)	772.9			574.8			426.8			294.2			(36.1		)
Income (loss) from continuing operations	386.1			251.9			146.8			69.4			(140.8		)
Gain on sale of discontinued operations, net of provision for income taxes of $5.4, $-, $-, $-, and $-	7.1			—			—			—			—
Income (loss) from discontinued operations, net of provision (benefit) for income taxes of $(0.8), $1.1, $(0.4), $3.6, and $2.0	(0.8		)	1.8			(1.1		)	6.0			3.1
Net income (loss)	$	392.4		$	253.7		$	145.7		$	75.4		$	(137.7	)
Net income (loss) attributable to Trinity Industries, Inc.	$	375.5		$	255.2		$	142.2		$	67.4		$	(137.7	)
Net income (loss) attributable to Trinity Industries, Inc. per common share:
Basic:
Continuing operations	$	4.68		$	3.18		$	1.78		$	0.77		$	(1.85	)
Discontinued operations	0.08			0.02			(0.01		)	0.08			0.04
	$	4.76		$	3.20		$	1.77		$	0.85		$	(1.81	)
Diluted:
Continuing operations	$	4.67		$	3.17		$	1.78		$	0.77		$	(1.85	)
Discontinued operations	0.08			0.02			(0.01		)	0.08			0.04
	$	4.75		$	3.19		$	1.77		$	0.85		$	(1.81	)
Weighted average number of shares outstanding:
Basic	76.4			77.3			77.5			76.8			76.4
Diluted	76.5			77.5			77.8			77.0			76.4
Dividends declared per common share	$	0.54		$	0.42		$	0.35		$	0.32		$	0.32

Balance Sheet Data:
Total assets	$	7,313.4		$	6,669.9		$	6,121.0		$	5,760.0		$	4,656.4
Debt - recourse	$	419.0		$	458.1		$	455.0		$	449.4		$	645.5
Debt - non-recourse	$	2,570.8		$	2,596.9		$	2,517.2		$	2,457.4		$	1,199.1
Stockholders' equity	$	2,749.1		$	2,137.6		$	1,948.3		$	1,845.7		$	1,806.3
Ratio of total debt to total capital	52.1		%	58.8		%	60.4		%	61.2		%	50.5		%
Book value per share	$	35.52		$	27.02		$	24.29		$	23.13		$	22.81

Due to the adoption of Accounting Standards Codification (“ASC”) 810-10, effective January 1, 2010, the Consolidated Balance Sheets as of December 31, 2013, 2012, 2011, and 2010, and the Consolidated Statements of Operations, Comprehensive Income, Cash Flows, and Stockholder's Equity for each of the years then ended include the financial position and results of operations of TRIP Holdings and its subsidiaries. Prior periods were not restated.

A goodwill impairment charge of $325.0 million was recorded in 2009 related to the Rail Group segment.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Our MD&A is presented in the following sections:

• Company Overview

• Executive Summary

• Results of Operations

• Liquidity and Capital Resources

• Contractual Obligations and Commercial Commitments

• Critical Accounting Policies and Estimates

• Recent Accounting Pronouncements

• Forward-Looking Statements

Our MD&A should be read in conjunction with our Consolidated Financial Statements and related Notes in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Company Overview

Trinity Industries, Inc., headquartered in Dallas, Texas, is a diversified industrial company that owns market-leading businesses providing products and services to the energy, transportation, chemical, and construction sectors. We operate in five distinct business groups which we report on a segment basis: the Rail Group, Construction Products Group, Inland Barge Group, Energy Equipment Group, and Railcar Leasing and Management Services Group. We also report the All Other segment which includes the Company's captive insurance and transportation companies; legal, environmental, and maintenance costs associated with non-operating facilities; and other peripheral businesses.

Our Rail and Inland Barge Groups and our structural wind towers and storage containers businesses operate in cyclical industries. Results in our Construction Products and Energy Equipment Groups are subject to seasonal fluctuations with the first quarter historically being the weakest quarter. Railcar sales from the lease fleet are the primary driver of fluctuations in results in the Railcar Leasing and Management Services Group.

Demand conditions and corresponding order levels for new railcars and barges are currently mixed. Demand conditions for railcars and tank barges serving the oil, gas, and chemicals industries continue to be favorable. Demand conditions and corresponding order levels in other markets, including coal and intermodal, are less favorable for railcars and are weak for hopper barges. Orders for structural wind towers increased in 2013 principally related to the January 2013 renewal of the Federal production tax credit. The slowdown in the commercial construction markets and budgetary constraints at the state level have negatively impacted the results of our Construction Products Group.

We continually assess our manufacturing capacity and take steps to align our production capacity with demand for our products. Rail Group operating results in 2012 included certain costs associated with the repositioning of a portion of the Company's production capacity to meet increased railcar demand. Due to improvements in demand for certain products, we have continued to increase production staff at certain facilities. We expect that facilities on non-operating status will be available for future operations to the extent that demand further increases.

Executive Summary

The Company’s revenues for 2013 were $ 4.4 billion , representing an increase of $ 553.4 million or 14.5% over last year. Operating profit increased to $ 772.9 million compared to $ 574.8 million last year for an increase of 34.5%. Operating margin improved to 17.7% in 2013 from 15.1% in 2012. The largest contributors to the increase were our Rail, Energy Equipment, and Construction Products Groups. The increase in revenues for 2013, when compared to the prior year, resulted primarily from higher shipment volumes and a more favorable product mix in our Rail Group combined with the effects of acquisition-related volumes in our Construction Products and Energy Equipment Groups. Our Leasing Group experienced higher leasing and management revenues from higher fleet additions and an increase in rental rates offset by lower revenues from external railcar sales. Lower shipment levels and a less favorable product mix led to lower overall revenues for our Inland Barge Group. Overall operating profit and margin grew for the year ended December 31, 2013 when compared with the prior year, primarily due to higher shipment levels and the effects of a more favorable product mix in our Rail Group and improved efficiencies in our Energy Equipment Group. Net income attributable to Trinity Industries, Inc. common stockholders for 2013 increased $ 120.3 million compared to last year.

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As of December 31, 2013 and 2012 our backlog of firm and noncancellable orders was as follows:



	December 31, 2013		December 31, 2012
	(in millions)
Rail Group
External Customers	$	4,189.6	$	2,867.5
Leasing Group	827.0		834.7
	$	5,016.6	$	3,702.2
Inland Barge Group	$	429.6	$	564.1
Structural wind towers
Not subject to ongoing litigation	$	553.9	$	267.8
Subject to ongoing litigation	—		412.5
	$	553.9	$	680.3

For the twelve months ended December 31, 2013 , our rail manufacturing businesses received orders for 32,240 railcars. The increase in backlog as of December 31, 2013 reflects the value of orders taken during the year. Approximately 60% of the railcar backlog is expected to be delivered in the twelve months ending December 31, 2014 with the remainder to be delivered from 2015 through 2016. The orders in our backlog from the Leasing Group are supported by lease commitments with external customers. The final amount dedicated to the Leasing Group may vary by the time of delivery. All of our Inland Barge backlog is expected to be delivered in the twelve months ending December 31, 2014. Deliveries for multi-year barge agreements are included in the backlog when specific production quantities for future years have been determined. Approximately $412.5 million included in our backlog at December 31, 2012 is the subject of ongoing litigation with one of the Company's structural wind tower customers leaving a remainder of $267.8 million not subject to litigation. The Company has removed the amount subject to litigation from its wind tower backlog at December 31, 2013 due to the expectation that the purchases will not be made as contracted. The litigation, in which Trinity seeks damages for lost profits under the contract, is pending and is discussed in Note 18 of the Notes to the Consolidated Financial Statements under "Other Matters".

Capital expenditures for 2013 were $731.0 million with $581.1 million utilized for net lease fleet additions, including additions to RIV 2013, net of deferred profit of $135.4 million . Manufacturing and corporate capital expenditures for 2014 are projected to be between $200.0 million and $250.0 million . For 2014, we do not expect the net investment in new railcars to consume any cash after considering the expected proceeds received from railcar sales during the year.

In March 2013, the Company completed the sale of its remaining ready-mix concrete operations. The divestiture of our ready-mix concrete operations has been accounted for and reported as a discontinued operation. Assets and liabilities related to the discontinued operations have been classified as Assets/Liabilities Held for Sale and Discontinued Operations in the accompanying consolidated balance sheets.

In May 2013, Trinity increased its quarterly dividend by 18% to $0.13 per share

In May 2013, the Company sold an interest in TRIP Holdings to certain third-party investors for a net amount of $200.3 million . Proceeds from the sale along with an additional equity contribution by TILC, were primarily used to retire the TRIP Holdings senior secured notes in their entirety. Additionally, the remaining interests of certain other equity investors were repurchased by TRIP Holdings for $52.3 million . The Company formed RIV 2013, contributing its investment in TRL 2012 which had been formed in December 2012 as a wholly-owned railcar leasing subsidiary of TILC, and sold an interest in RIV 2013 to certain third-party investors for a net amount of $94.6 million .

In June 2013, the $475 million TILC warehouse loan facility was renewed and extended and now matures in June 2015 . Amounts outstanding at maturity, absent renewal, will be payable in three installments in December 2015 , June 2016 , and December 2016 .

In August 2013 , TRL 2012 issued an additional $183.4 million in aggregate principal amount of Series 2013 -1 Secured Railcar Equipment Notes pursuant to the Master Indenture between TRL 2012 and Wilmington Trust Company, as indenture trustee, of which $180.7 million was outstanding as of December 31, 2013 . The 2013 -1 Secured Railcar Equipment Notes bear interest at a fixed rate of 3.9% , are payable monthly, and have a stated final maturity date of July 15, 2043 . The 2013 -1 Secured Railcar Equipment Notes are obligations of TRL 2012 and are non-recourse to Trinity, TILC, and the other equity investors in RIV 2013. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and all other assets acquired and owned by TRL 2012 .

In September 2013, Trinity increased its quarterly dividend by 15% to $0.15 per share.

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In September 2013, the Pipeline and Hazardous Materials Safety Administration, a division of the U.S. Department of Transportation, published an Advance Notice of Proposed Rulemaking seeking interested party comments on potential regulatory initiatives pertaining to the transportation of flammable materials by rail. The Company is currently assessing its position with respect to this matter. See Item 1 Business - Governmental Regulation for further discussion.

In December 2013, the Company entered into a strategic alliance with Element Financial Corporation ("Element"), a major equipment finance company in North America, to develop a diversified portfolio of up to $2 billion of leased railcars. Element is expected to acquire a portfolio of leased railcars primarily consisting of new railcars manufactured by the Company's Rail Group, existing railcars from TILC, as well as secondary market purchases. TILC acts as servicer of the Element-owned leased railcar fleet and receives fees accordingly. The initial sale of leased railcars, with a total value of approximately $105.0 million closed in December 2013 with recorded revenue of $39.6 million, while the second closing, with a total value of approximately $396.0 million, occurred in January 2014 with recorded revenue of $173.5 million. Both sales consisted of railcars from the Company's wholly-owned lease fleet.

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Results of Operations

Years Ended December 31, 2013 , 2012 , and 2011

Overall Summary for Continuing Operations

Revenues



	Year Ended December 31, 2013
	Revenues								Percent Change 2013 versus 2012
	External		Intersegment			Total			Percent Change 2013 versus 2012
	($ in millions)
Rail Group	$	2,093.5	$	774.0		$	2,867.5		42.4	%
Construction Products Group	508.6		16.4			525.0			8.5
Inland Barge Group	576.6		0.1			576.7			(14.6	)
Energy Equipment Group	536.5		128.9			665.4			19.1
Railcar Leasing and Management Services Group	645.4		—			645.4			(0.3	)
All Other	4.7		81.9			86.6			6.4
Segment Totals before Eliminations	4,365.3		1,001.3			5,366.6			20.4
Eliminations – Lease subsidiary	—		(756.5		)	(756.5		)
Eliminations – Other	—		(244.8		)	(244.8		)
Consolidated Total	$	4,365.3	$	—		$	4,365.3		14.5

	Year Ended December 31, 2012
	Revenues								Percent Change 2012 versus 2011
	External		Intersegment			Total			Percent Change 2012 versus 2011
	($ in millions)
Rail Group	$	1,512.1	$	500.9		$	2,013.0		57.9	%
Construction Products Group	461.2		22.5			483.7			6.7
Inland Barge Group	675.2		—			675.2			23.1
Energy Equipment Group	506.0		52.6			558.6			18.1
Railcar Leasing and Management Services Group	644.4		2.7			647.1			17.2
All Other	13.0		68.4			81.4			31.7
Segment Totals before Eliminations	3,811.9		647.1			4,459.0			32.6
Eliminations – Lease subsidiary	—		(485.9		)	(485.9		)
Eliminations – Other	—		(161.2		)	(161.2		)
Consolidated Total	$	3,811.9	$	—		$	3,811.9		29.7

	Year Ended December 31, 2011
	Revenues
	External		Intersegment			Total
	($ in millions)
Rail Group	$	931.7	$	343.0		$	1,274.7
Construction Products Group	440.4		12.9			453.3
Inland Barge Group	548.5		—			548.5
Energy Equipment Group	454.8		18.0			472.8
Railcar Leasing and Management Services Group	551.4		0.6			552.0
All Other	11.5		50.3			61.8
Segment Totals before Eliminations	2,938.3		424.8			3,363.1
Eliminations – Lease subsidiary	—		(325.5		)	(325.5		)
Eliminations – Other	—		(99.3		)	(99.3		)
Consolidated Total	$	2,938.3	$	—		$	2,938.3

Our revenues for the year ended December 31, 2013 , increased by 14.5% from the previous year. The overall increase was primarily due to higher shipment volumes and a favorable change in product mix in our Rail Group, acquisition-related higher shipment volumes in the Aggregates and Other product lines of our Construction Products Group, and higher revenues in our Energy Equipment Group resulting primarily from increased demand for storage container vessels and other product lines. Lower revenues in our Inland Barge Group were due to lower volumes and a less favorable product mix change while revenues in our Railcar Leasing and Management Services Group were substantially unchanged as higher revenue from leasing and management were offset by lower revenues from railcar sales.

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Our revenues for the year ended December 31, 2012 increased from the previous year by 29.7% primarily due to higher shipment volumes in our Rail and Inland Barge Groups while our Leasing Group experienced increased revenues primarily due to higher railcar sales from the lease fleet, increased revenues from lease fleet additions, and higher rental rates.

Operating Costs



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Rail Group	$	2,377.8		$	1,814.0		$	1,197.4
Construction Products Group	472.4			438.9			398.4
Inland Barge Group	480.7			550.5			442.1
Energy Equipment Group	604.0			540.4			463.9
Railcar Leasing and Management Services Group	348.6			346.2			297.5
All Other	100.3			91.6			65.6
Segment Totals before Eliminations and Corporate Expenses	4,383.8			3,781.6			2,864.9
Corporate	73.4			51.5			43.6
Eliminations – lease subsidiary	(621.1		)	(435.1		)	(297.2		)
Eliminations – other	(243.7		)	(160.9		)	(99.8		)
Consolidated Total	$	3,592.4		$	3,237.1		$	2,511.5

Operating costs for the year ended December 31, 2013 , increased by 11.0% over the previous year primarily due to higher shipment levels in our Rail, Construction Products, and Energy Equipment Groups. Operating costs from our Inland Barge Group decreased due to lower shipment volumes and a change in the mix of barge types. For 2012, the 28.9% increase in operating costs was primarily volume-related and included certain repositioning costs from our Rail Group in 2012. Selling, engineering, and administrative expenses as a percentage of revenue increased to 6.7% for 2013 as compared to 5.9% for 2012 and 6.6% for 2011 due to compensation increases resulting from the Company's strong financial performance.

Operating Profit (Loss)



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Rail Group	$	489.7		$	199.0		$	77.3
Construction Products Group	52.6			44.8			54.9
Inland Barge Group	96.0			124.7			106.4
Energy Equipment Group	61.4			18.2			8.9
Railcar Leasing and Management Services Group	296.8			300.9			254.5
All Other	(13.7		)	(10.2		)	(3.8		)
Segment Totals before Eliminations and Corporate Expenses	982.8			677.4			498.2
Corporate	(73.4		)	(51.5		)	(43.6		)
Eliminations – lease subsidiary	(135.4		)	(50.8		)	(28.3		)
Eliminations – other	(1.1		)	(0.3		)	0.5
Consolidated Total	$	772.9		$	574.8		$	426.8

Our operating profit for the year ended December 31, 2013 , increased primarily as a result of higher shipment levels in our Rail Group in addition to improved efficiencies in our Energy Equipment Group. Our operating profit for the year ended December 31, 2012 increased primarily as a result of higher shipment levels in our Rail and Inland Barge groups and from revenue growth and an increase in the net gain on the sales of railcars from our lease fleet in our Leasing Group. Operating profit in 2011 included flood-related gains of $15.5 million in our Inland Barge Group.

For a further discussion of revenues, costs, and the operating results of individual segments, see Segment Discussion below.

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Other Income and Expense . Other income and expense is summarized in the following table:



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Interest income	$	(2.1	)	$	(1.5	)	$	(1.5	)
Interest expense	187.3			194.7			185.3
Other, net	(2.8		)	(4.3		)	4.0
Consolidated Total	$	182.4		$	188.9		$	187.8

Interest expense in 2013 decreased $ 7.4 million over the prior year primarily due to the TRIP Holdings debt refinancing completed in May 2013. The decrease in Other, net income for the year ended December 31, 2013 was due to foreign currency translation gains in 2012 exceeding the gains recognized in 2013 from the change in fair value of certain equity repurchase agreements. The decrease in Other, net expense for the year ended December 31, 2012 was primarily due to higher foreign currency translation gains over the previous year.

Income Taxes. The provision for income taxes results in effective tax rates that differ from the statutory rates. The following is a reconciliation between the statutory U.S. Federal income tax rate and the Company’s effective income tax rate on income from continuing operations:



	Year Ended December 31,
	2013		2012		2011
Statutory rate	35.0	%	35.0	%	35.0	%
State taxes	2.1		2.0		2.1
Domestic production activities deduction	(1.4	)	—		—
Noncontrolling interest in partially-owned subsidiaries	(0.9	)	—		—
Tax assessments and settlements	—		(0.6	)	—
Changes in valuation allowance and reserves	(0.8	)	(1.4	)	0.4
Other, net	0.6		(0.3	)	1.1
Effective rate	34.6	%	34.7	%	38.6	%

Income from continuing operations before income taxes for the years ended December 31, 2013 , 2012 , and 2011 was $571.2 million , $376.3 million , and $225.9 million , respectively, for U.S. operations, and $19.3 million , $9.6 million , and $13.1 million , respectively, for foreign operations. The Company provides deferred income taxes on the un-repatriated earnings of its foreign operations where it results in a deferred tax liability. In May 2013, TRIP Holdings and RIV 2013 elected to be treated as partnerships for income tax purposes and consequently no income tax expense has been provided with respect to income earned after this election attributable to the noncontrolling interests. See Note 5 of the Notes to the Consolidated Financial Statements for a further explanation of activities with respect to TRIP Holdings and RIV 2013. See Note 13 of the Notes to the Consolidated Financial Statements for a further discussion of income taxes.

During the year ended December 31, 2013, the Company utilized $63.9 million in Federal consolidated net operating loss carryforwards and all of its foreign tax credit carryforwards of $42.2 million . As a result of a 2013 election to treat TRIP Holdings as a partnership for tax purposes, TRIP Holdings utilized its $439.7 million Federal tax operating loss carryforward during 2013. At December 31, 2013 , the Company had $39.4 million of Federal consolidated net operating loss carryforwards and $5.2 million of tax-effected state loss carryforwards remaining. The majority of the Federal net operating loss carryforwards were acquired as part of an acquisition of a company in 2010 and are subject to limitations on the amount that can be utilized in any one tax year. The Federal net operating loss carryforwards are due to expire between 2028 and 2029 . We have established a valuation allowance for Federal, state, and foreign tax operating losses and credits which we have estimated may not be realizable.

For the year ended December 31, 2013 , net cash taxes paid as compared to our current provision are different based on the timing of when estimated tax payments are due as compared to when the income was earned, as well as changes in our uncertain tax positions that are reflected in current expense. At December 31, 2012 , receivables included an income tax receivable of $5.2 million whereas at December 31, 2013 , accrued liabilities included an income tax payable of $28.9 million for a net change of $34.1 million. For the year ended December 31, 2012 , cash taxes were not substantially different than the current provision for income taxes. For the year ended December 31, 2011 , the difference between cash taxes and the current tax provision was due to net refunds from prior years offset by additional accruals for uncertain tax positions.

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taxing authorities to coordinate taxation in a formal mutual agreement process (“MAP”). During 2013, we received the revenue agent report for the 2009-2011 audit cycle. All issues have been concluded and agreed to except for transfer pricing issues. These issues have been appealed and we have requested they be addressed in the same MAP of the 2006-2008 cycle. At this time, we cannot determine when the 2006-2008 or the 2009-2011 cycle will close and all issues formally settled.

Segment Discussion

Rail Group



	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues:
Rail	$	2,736.7		$	1,850.5		$	1,105.5		47.9	%	67.4	%
Components	130.8			162.5			169.2			(19.5	)	(4.0	)
Total revenues	2,867.5			2,013.0			1,274.7			42.4		57.9

Operating costs:
Cost of revenues	2,330.8			1,773.9			1,167.3			31.4		52.0
Selling, engineering, and administrative costs	47.0			40.1			34.0			17.2		17.9
Property disposition gains	—			—			(3.9		)
Operating profit	$	489.7		$	199.0		$	77.3
Operating profit margin	17.1		%	9.9		%	6.1		%

As of December 31, 2013 , 2012 , and 2011 our Rail Group backlog of railcars was as follows:



	Year Ended December 31,
	2013		2012		2011
	(in millions)
External Customers	$	4,189.6	$	2,867.5	$	1,973.2
Leasing Group	827.0		834.7		621.9
Total	$	5,016.6	$	3,702.2	$	2,595.1

The changes in the number of railcars in the Rail Group backlog are as follows:



	Year Ended December 31,
	2013		2012		2011
Beginning balance	31,990		29,000		5,960
Orders received	32,240		22,350		37,105
Shipments	(24,335	)	(19,360	)	(14,065	)
Ending balance	39,895		31,990		29,000

Revenues increased for the year ended December 31, 2013 by 42.4% when compared with the prior year with slightly more than half of the increase resulting from an increase in unit deliveries with the remainder of the increase due to improved pricing and product mix changes. Cost of revenues increased for the year ended December 31, 2013 by 31.4% when compared with the prior year with approximately 80% of the increase resulting from an increase in unit deliveries and the remainder arising from product mix changes.

Revenues increased for the year ended December 31, 2012 by 57.9% when compared to 2011 with slightly more than half of the increase resulting primarily from an increase in unit deliveries and the remainder arising from product mix changes. Cost of revenues increased for the year ended December 31, 2012 by 52.0% when compared with the prior year with 75% of the increase resulting primarily from higher unit deliveries and the remainder arising from product mix changes. Production efficiencies and costs were impacted by costs of $ 10.6 million incurred in 2012 to reposition a portion of the Company's production capacity to meet railcar demand. Additionally, the Company incurred capital expenditures of $10.0 million for the year ended December 31, 2012 related to these repositioning efforts.

Unit and price increases, as well as product mix change increased total backlog dollars 35.5% when comparing December 31, 2013 to the prior year. The average selling price in the backlog at December 31, 2013 increased as compared to the previous year due to higher demand and product mix. Backlog increased when comparing 2012 versus 2011 due to unit and price increases, as

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well as product mix change. The increase in backlog as of December 31, 2012 also reflects contractual pricing adjustments on long-term orders previously received. The backlog dedicated to the Leasing Group is supported by lease commitments with external customers. The final amount dedicated to the Leasing Group may vary by the time of delivery.

For the year ended December 31, 2013 , railcar shipments included sales to the Leasing Group of $ 756.5 million compared to $ 485.9 million in the comparable period in 2012 , with a deferred profit of $ 135.4 million compared to $ 50.8 million for the same period in 2012 . Results for the year ended December 31, 2011 , included $ 325.5 million in sales to the Leasing Group with a deferred profit of $ 28.3 million . Sales to the Leasing Group and related profits are included in the operating results of the Rail Group but are eliminated in consolidation.

The Leasing Group purchases a portion of our railcar production, financing a portion of the purchase price through a non-recourse warehouse loan facility or cash, and periodically refinances those borrowings through equipment financing transactions. In 2013 , the Leasing Group purchased 27.2% of our railcar production compared to 28.0% in 2012 . On a segment basis, sales to the Leasing Group and related profits are included in the operating results of our Rail Group but are eliminated in consolidation.

Construction Products Group



	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues:
Highway Products	$	335.9		$	376.1		$	377.0		(10.7	)%	(0.2	)%
Aggregates	112.7			65.1			45.5			73.1		43.1
Other	76.4			42.5			30.8			79.8		38.0
Total revenues	525.0			483.7			453.3			8.5		6.7

Operating costs:
Cost of revenues	409.6			387.0			357.9			5.8		8.1
Selling, engineering, and administrative costs	63.3			52.0			40.8			21.7		27.5
Property disposition gains	(0.5		)	(0.1		)	(0.3		)
Operating profit	$	52.6		$	44.8		$	54.9
Operating profit margin	10.0		%	9.3		%	12.1		%

Revenues increased for the year ended December 31, 2013 by 8.5% compared to the same period in 2012. Increases in revenue in our Aggregates and Other businesses were due to acquisitions while the 10.7% decrease in our Highway Products business was due to lower sales volumes. Similarly, cost of revenues increased by 5.8% for the year ended December 31, 2013 , due to acquisition-related increases of approximately 15.6% offset by lower costs from lower Highway Products volumes of 9.8%. Selling, engineering, and administrative costs increased by 21.7% in 2013 primarily due to acquisitions.

Revenues increased for the year ended December 31, 2012 by 6.7% compared to the same period in 2011 primarily due to higher Aggregate volumes and increased sales in other product lines. For 2012, cost of revenues increased by 8.1% when compared with 2011 primarily due to higher volume-related costs in our Aggregates business and other product lines. Selling, engineering, and administrative costs increased by 27.5% for 2012 when compared to 2011 due to higher legal and compensation costs.

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Inland Barge Group



	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues	$	576.7		$	675.2		$	548.5		(14.6	)%	23.1	%

Operating costs:
Cost of revenues	461.5			538.9			445.0			(14.4	)	21.1
Selling, engineering, and administrative costs	19.2			15.4			14.7			24.7		4.8
Property disposition gains	—			(3.8		)	(17.6		)
Operating profit	$	96.0		$	124.7		$	106.4
Operating profit margin	16.6		%	18.5		%	19.4		%

Revenues decreased for the year ended December 31, 2013 by 14.6% compared to the same period in the prior year with two-thirds of the decrease resulting from lower delivery volumes and the remainder arising from a change in the mix of barge types. Cost of revenues decreased disproportionately from revenues, primarily due to product mix changes. Selling, engineering, and administrative costs increased by 24.7% for the year ended December 31, 2013 primarily as a result of increased employee-related and consulting costs as well as a legal reserve recorded during the three month period ended March 31, 2013 regarding a matter originating over ten years ago involving a foreign subsidiary.

Revenues increased for the year ended December 31, 2012 by 23.1% with 12.0% of the increase resulting from an increase in shipping volumes and 11.1% of the increase arising from a change in the mix of barge types. Hopper barge volume increased, when comparing 2012 to 2011 , primarily due to the recovery from the 2011 flood at our Missouri manufacturing facility. The increase in cost of revenues of 21.1% was due to increased shipping volumes of which 1.4% was partially offset by improved efficiencies related to higher tank barge production when comparing 2012 to 2011 . Operating costs for the year ended December 31, 2012 included a $3.4 million net gain from sales of barges previously included in property, plant, and equipment that were under lease to third-party customers.

A summary of the impact on operating profit of floods at two of our manufacturing facilities follows:



	Impact to Operating Profit as a Result of Floods Benefit (Cost)
	Year Ended December 31,
	2013		2012		2011
	(in millions)
Tennessee flood - May 2010
Insurance proceeds related to business interruption	$	—	$	—	$	6.5
Gain on disposition of damaged property, plant, and equipment	—		—		0.6
	—		—		7.1
Missouri flood - May 2011
Costs, net of insurance advances related to damages and lost productivity	—		—		(8.6		)
Gain on disposition of damaged property, plant, and equipment	—		0.4		17.0
	—		0.4		8.4
Combined net effect of both floods	$	—	$	0.4	$	15.5

As of December 31, 2013 , the backlog for the Inland Barge Group was $ 429.6 million compared to $ 564.1 million as of December 31, 2012 . Deliveries for multi-year barge agreements are included in the backlog when specific production quantities for future years have been determined.

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Energy Equipment Group



	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues:
Structural wind towers	$	236.9		$	262.4		$	245.2		(9.7	)%	7.0	%
Other	428.5			296.2			227.6			44.7		30.1
Total revenues	665.4			558.6			472.8			19.1		18.1

Operating costs:
Cost of revenues	559.0			510.3			432.1			9.5		18.1
Selling, engineering, and administrative costs	45.0			30.8			31.8			46.1		(3.1	)
Property disposition gains	—			(0.7		)	—
Operating profit	$	61.4		$	18.2		$	8.9
Operating profit margin	9.2		%	3.3		%	1.9		%

Revenues for the year ended December 31, 2013 increased by 19.1% compared to the same period in 2012 . Revenues from other product lines increased by 44.7%, with two-thirds of the increase due to volume increases and the remainder due to an acquisition. Revenue from structural wind towers decreased by 9.7% due primarily to a change in mix of wind towers types produced. Cost of revenues for the year ended December 31, 2013 increased 9.5% consisting of a 19.9% increase due to higher volumes in our storage containers, tank heads, and utility structures businesses partially offset by a 10.4% decrease due to product mix changes in our structural wind towers business. Selling, engineering, and administrative costs increased in 2013 by 46.1% primarily related to an acquisition and additional compensation costs.

Revenues for the year ended December 31, 2012 , increased 18.1% compared to the same period in 2011 as a result of higher structural wind towers shipments and increased demand for storage containers, tank heads, and utility structures. Operating costs for the year ended December 31, 2012 increased at a lesser rate than revenues compared to 2011 as the manufacturing challenges which negatively impacted 2011 results improved.

As of December 31, 2013 , the backlog for structural wind towers was $553.9 million compared to $680.3 million as of December 31, 2012 . Approximately $412.5 million included in our backlog at December 31, 2012 is the subject of ongoing litigation with one of the Company's structural wind towers customers, leaving a remainder in backlog of $267.8 million not subject to litigation. The Company has removed the backlog subject to litigation from its structural wind towers backlog at December 31, 2013 due to the expectation that the purchases will not be made as contracted. The litigation, in which Trinity seeks damages for lost profits under the contract, is pending and is discussed in Note 18 of the Notes to the Consolidated Financial Statements under "Other Matters".

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Railcar Leasing and Management Services Group



	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues:
Leasing and management	$	586.9		$	528.5		$	492.6		11.1	%	7.3	%
Sale of railcars owned one year or less at the time of sale	58.5			118.6			59.4			*		*
Total revenues	$	645.4		$	647.1		$	552.0		(0.3	)	17.2

Operating profit:
Leasing and management	$	267.3		$	242.6		$	225.1		10.2		7.8
Railcar sales:
Railcars owned one year or less at the time of sale	9.1			24.8			13.2
Railcars owned more than one year at the time of sale	20.4			33.5			16.2
Total operating profit	$	296.8		$	300.9		$	254.5		(1.4	)	18.2

Operating profit margin:
Leasing and management	45.5		%	45.9		%	45.7		%
Railcar sales	*			*			*
Total operating profit margin	46.0			46.5			46.1

Selected expense information ⁽¹⁾ :
Depreciation	$	129.0		$	120.5		$	115.7		7.1		4.1
Maintenance	$	71.5		$	59.4		$	58.2		20.4		2.1
Rent	$	53.3		$	50.9		$	48.6		4.7		4.7
Interest:
External	$	153.5		$	161.2		$	154.4
Intercompany	3.8			13.1			6.4
Total interest expense	$	157.3		$	174.3		$	160.8		(9.8	)	8.4

* Not meaningful

⁽¹⁾ Depreciation, maintenance, and rent expense are components of operating profit. Amortization of deferred profit on railcars sold from the Rail Group to the Leasing Group is included in the operating profits of the Leasing Group resulting in the recognition of depreciation expense based on the Company's original manufacturing cost of the railcars. Interest expense is not a component of operating profit and includes the effect of hedges. Intercompany interest expense arises from Trinity’s previous ownership of a portion of TRIP Holdings’ Senior Secured Notes and is eliminated in consolidation. See Note 11 Debt of the Notes to the Consolidated Financial Statements.

Total revenues for the year ended December 31, 2013 were substantially unchanged compared to the prior year, reflecting a decrease in railcar sales from the lease fleet due, primarily, to lower volume, offset by an 11.1% increase in leasing and management revenues. Of the increase in leasing and management revenues, 70% was due to lease fleet additions while the remainder was due primarily to higher rental rates in our lease fleet. Total revenues increased for the year ended December 31, 2012 compared to 2011 by 17.2%, reflecting an increase in revenue from the sale of railcars from the lease fleet due, primarily, to changes in the mix of railcars sold, and a 7.3% increase in leasing and management revenues. Of the increase in leasing and management revenues, approximately half was due to lease fleet additions and half was due to higher rental rates in our lease fleet.

Operating profit for the year ended December 31, 2013 was substantially unchanged compared to the prior year with lower profit from railcar sales offset by higher profit from operations. Increased profit from operations resulting from higher rental rates and additions to the lease fleet more than offset higher operating costs for the year ended December 31, 2013 when compared to the prior year. Depreciation, maintenance, and rent expense increased due to lease fleet additions and additional maintenance costs resulting primarily from increased mileage and regulatory requirements. Interest expense decreased as a result of lower borrowings. Operating profit increased $46.4 million for the year ended December 31, 2012 compared to 2011 due primarily to profit from lease fleet sales. In addition, lease fleet additions and higher rental rates more than offset increased depreciation and rent expense for the year ended December 31, 2012 when compared to 2011 . Interest expense increased during 2012 compared with 2011 due to the refinancing of the TRIP warehouse loan in 2011 .

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To fund the continued expansion of its lease fleet to meet market demand, the Leasing Group generally uses its non-recourse $475 million warehouse facility or cash to provide initial financing for a portion of the purchase price of the railcars. After initial financing, the Leasing Group generally obtains long-term financing for the railcars in the lease fleet through non-recourse asset-backed securities, long-term non-recourse operating leases pursuant to sales/leaseback transactions, or long-term recourse debt such as equipment trust certificates or third-party equity. See Financing Activities .

Information regarding the Leasing Group’s lease fleet follows:



	December 31, 2013		December 31, 2012		December 31, 2011
Number of railcars	75,685		71,455		68,945
Average age in years	7.2		6.7		6.1
Average remaining lease term in years	3.3		3.3		3.4
Fleet utilization	99.5	%	98.6	%	99.5	%

All Other



	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues	$	86.6		$	81.4		$	61.8		6.4	%	31.7	%

Operating costs:
Cost of revenues	94.6			86.8			61.8			9.0		40.5
Selling, engineering, and administrative costs	6.0			5.2			5.8			15.4		(10.3	)
Property disposition gains	(0.3		)	(0.4		)	(2.0		)
Operating loss	$	(13.7	)	$	(10.2	)	$	(3.8	)

The increase in revenues for the year ended December 31, 2013 compared to the prior year of 6.4% was primarily due to higher internal billings related to facility maintenance activities. The increase in operating loss for the year ended December 31, 2013 was primarily due to certain reserves related to non-operating facilities. The increase in revenues for the year ended December 31, 2012 compared to 2011 of 31.7% was primarily due to an increase in sales by our transportation company. The increase in operating loss for the year ended December 31, 2012 was primarily due to higher claim costs related to our captive insurance company, higher environmental and legal reserves, and higher gains in 2011 from property dispositions.

Corporate



	Year Ended December 31,						Percent Change
	2013		2012		2011		2013 versus 2012		2012 versus 2011
	($ in millions)
Operating costs	$	73.4	$	51.5	$	43.6	42.5	%	18.1	%

The increase in operating costs for the year ended December 31, 2013 compared to the prior year is primarily due to higher compensation, resulting from the Company's higher financial performance, and consulting costs. The increase in operating costs for the year ended December 31, 2012 compared with 2011 was due to higher incentive and deferred compensation costs and an increase in certain legal reserves.

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Liquidity and Capital Resources

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for each of the last three years:



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Total cash provided by (required by):
Operating activities	$	662.2		$	527.4		$	110.9
Investing activities	(818.0		)	(311.4		)	(85.0		)
Financing activities	11.3			5.9			(28.8		)
Net increase (decrease) in cash and cash equivalents	$	(144.5	)	$	221.9		$	(2.9	)

2013 compared with 2012

Operating Activities . Net cash provided by operating activities for the year ended December 31, 2013 was $662.2 million compared to net cash provided by operating activities of $527.4 million for the year ended December 31, 2012 . Cash flow provided by operating activities increased primarily due to higher operating profits in 2013 .

Receivables at December 31, 2013 decreased slightly by $ 17.2 million or 4.4% from December 31, 2012 , primarily due to lower receivables from the Energy Equipment Group. At December 31, 2013 , one customer’s net receivable balance in our Energy Equipment Group, all within terms, accounted for 16% of the consolidated net receivables balance outstanding. Raw materials inventory at December 31, 2013 increased by $ 37.3 million or 8.5% since December 31, 2012 primarily attributable to higher levels in our Rail Group required to meet production demands. Finished goods inventory at December 31, 2013 increased by $ 14.8 million or 12.2% since December 31, 2012 primarily due to higher levels in our Rail Group pending delivery. Accounts payable increased by $29.0 million to support higher inventory levels, while accrued liabilities increased by $ 72.4 million from December 31, 2012 due to higher income taxes payable and certain other payroll-related accruals. Customer advances totaled $ 141.7 million at December 31, 2013 . We continually review reserves related to bad debt as well as the adequacy of lower of cost or market valuations related to accounts receivable and inventory.

Investing Activities. Net cash required by investing activities for the year ended December 31, 2013 was $818.0 million compared to $311.4 million for the year ended December 31, 2012 . Capital expenditures for the year ended December 31, 2013 were $ 731.0 million , of which $ 581.1 million were for additions to the lease fleet. This compares to $ 469.2 million of capital expenditures for the same period last year, of which $ 352.6 million were for additions to the lease fleet. Full-year manufacturing and corporate capital expenditures for 2014 are projected to range between $ 200.0 million and $ 250.0 million . For 2014, we do not expect the net investment in new railcars to consume any cash after considering the expected proceeds received from railcar sales during the year. Proceeds from the sale of property, plant, and equipment and other assets totaled $ 135.3 million for the year ended December 31, 2013 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 131.6 million . This compares to $ 201.4 million for the same period in 2012 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 126.3 million . Net cash required related to acquisitions amounted to $73.2 million and $46.2 million for the years ended December 31, 2013 and 2012 , respectively. Short-term marketable securities for the year ended December 31, 2013 increased $149.7 million .

Financing Activities. Net cash provided by financing activities during the year ended December 31, 2013 was $11.3 million compared to $5.9 million of cash provided by financing activities for the same period in 2012 . During the year ended December 31, 2013 , we retired $ 262.1 million in debt principally consisting of the repayment of the Leasing Group term loan and the TRIP Holdings senior secured notes. During the year ended December 31, 2012 , we retired $ 378.4 million in debt principally consisting of repayments of the TILC warehouse loan facility. We borrowed $ 175.0 million , net of debt issuance costs, during the year ended December 31, 2013 , primarily from the issuance by TRL 2012 of its 2013-1 Secured Railcar Equipment Notes, as further described below. During the year ended December 31, 2012 , we borrowed $ 443.8 million , net of $5.2 million of deferred loan costs, primarily from the issuance by TRL 2012 of $333.8 million in Secured Railcar Equipment Notes, and from advances under our TILC warehouse loan facility. During the year ended December 31, 2013 , we received proceeds of $296.7 million related to the sale of equity interests in certain partially-owned leasing subsidiaries and we received $50.0 million in equity contributions from noncontrolling interests in one of the Company's partially-owned leasing subsidiaries. During 2013, TRIP Holdings repurchased the equity interests of certain equity investors for $84.0 million. Additionally, we repurchased shares of the Company’s stock under

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a share repurchase program as described further below. We intend to use our cash and committed credit facilities to fund the operations, expansions, and growth initiatives of the Company.

2012 compared with 2011

Operating Activities. Net cash provided by operating activities for the year ended December 31, 2012 was $527.4 million compared to $110.9 million of net cash provided by operating activities for the same period in 2011 . Cash flow provided by operating activities increased due to higher operating profits in 2012 , a lower increase in inventories in 2012 compared with 2011 , and an increase in accrued liabilities for the year ended December 31, 2012 .

Receivables at December 31, 2012 increased by $ 2.7 million or 0.7% since December 31, 2011 primarily due to higher receivables from the Rail Group partially offset by lower receivables from our Inland Barge and Energy Equipment Groups. At December 31, 2012 , one customer's net receivable balance in our Energy Equipment Group, all within terms, accounted for 21% of the consolidated net receivables balance outstanding. Raw materials inventory at December 31, 2012 increased by $ 120.2 million or 37.6% since December 31, 2011 primarily attributable to higher levels in our Rail Group required to meet production demands. Finished goods inventory at December 31, 2012 increased by $ 22.0 million or 22.1% since December 31, 2011 primarily attributable to higher levels of production in our Energy Equipment Group. Accounts payable decreased slightly while accrued liabilities increased by $ 125.5 million or 29.8% from December 31, 2011 primarily due to customer advance payments received by our Rail Group.

Investing Activities. Net cash required by investing activities for the year ended December 31, 2012 was $311.4 million compared to $85.0 million for the year ended December 31, 2011 . Capital expenditures for the year ended December 31, 2012 were $ 469.2 million , of which $ 352.6 million were for additions to the lease fleet. This compares to $ 335.6 million of capital expenditures for the same period in 2011 , of which $ 258.6 million were for additions to the lease fleet. Proceeds from the sale of property, plant, and equipment and other assets were $ 201.4 million for the year ended December 31, 2012 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 126.3 million . This compares to $ 136.8 million for the year ended December 31, 2011 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 60.6 million . Net cash required related to acquisitions amounted to $ 46.2 million and $ 42.5 million for the years ended December 31, 2012 and 2011 , respectively.

Financing Activities. Net cash provided by financing activities during the year ended December 31, 2012 was $5.9 million compared to $28.8 million of cash required by financing activities for the year ended December 31, 2011 . During the year ended December 31, 2012 , we retired $ 378.4 million in debt principally consisting of repayments of the TILC warehouse loan facility. During the year ended December 31, 2011 , we retired $1,112.3 million in debt principally consisting of repayment of the TRIP Warehouse Loan. We borrowed $ 443.8 million during the year ended December 31, 2012 , net of $5.2 million of deferred loan costs, primarily from the issuance by TRL 2012 of $333.8 million in Secured Railcar Equipment Notes and from advances under our TILC warehouse loan facility. During the year ended December 31, 2011 , we borrowed $1,143.3 million, primarily consisting of $920.0 million raised to refinance the TRIP Warehouse Loan, with the remainder primarily from our TILC warehouse loan facility. Additionally, in 2011, we repurchased shares of the Company's stock under a share repurchase program.

Other Financing Activities

At December 31, 2013 and for the two year period then ended, there were no borrowings under our $425.0 million revolving credit facility that matures on October 20, 2016 . Interest on the revolving credit facility is calculated at Libor plus 1.50% or prime plus 0.50% . After subtracting $68.7 million for letters of credit outstanding, $356.3 million was available under the revolving credit facility as of December 31, 2013 .

The $475.0 million TILC warehouse loan facility, established to finance railcars owned by TILC, had $152.0 million outstanding and $323.0 million available as of December 31, 2013 . The warehouse loan is a non-recourse obligation secured by a portfolio of railcars and operating leases, certain cash reserves, and other assets acquired and owned by the warehouse loan facility. The principal and interest of this indebtedness are paid from the cash flows of the underlying leases. Advances under the facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 1.93% at December 31, 2013 . In June 2013, the warehouse loan facility was renewed and extended through June 2015 . Amounts outstanding at maturity, absent renewal, will be payable in three installments in December 2015 , June 2016 , and December 2016 .

In August 2013 , TRL 2012 issued an additional $183.4 million in aggregate principal amount of Series 2013 -1 Secured Railcar Equipment Notes pursuant to the Master Indenture between TRL 2012 and Wilmington Trust Company, as indenture trustee, with regard to the 2012 secured railcar equipment notes, of which $180.7 million was outstanding as of December 31, 2013 . The 2013 -1 Secured Railcar Equipment Notes bear interest at a fixed rate of 3.9% , are payable monthly, and have a stated final maturity date

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of July 15, 2043 . The 2013 -1 Secured Railcar Equipment Notes are obligations of TRL 2012 and are non-recourse to Trinity, TILC, and the other equity investors in RIV 2013. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL 2012 .

In September 2012 , the Company’s Board of Directors authorized a $ 200.0 million share repurchase program, effective October 1, 2012 , which expires on December 31, 2014 . Under the Company's share repurchase programs, 2,473,189 shares and 1,834,221 shares were repurchased during the years ended December 31, 2013 and 2012, respectively, at a cost of approximately$ 108.2 million and $45.2 million, respectively.

We continually assess our manufacturing capacity and take steps to align our production capacity with demand for our products. Due to improvements in demand for certain products, we have continued to increase production staff at certain facilities. We expect that facilities on non-operating status will be available for future operations to the extent that demand further increases.

Equity Investment

See Note 5 of the Notes to the Consolidated Financial Statements for information about the investment in partially-owned subsidiaries.

Future Operating Requirements

We expect to finance future operating requirements with cash on hand, cash flows from operations, and, depending on market conditions, short-term and long-term debt, and equity. Debt instruments that the Company has utilized include its revolving credit facility, the TILC warehouse facility, senior notes, convertible subordinated notes, asset-backed securities, and sale-leaseback transactions. The Company has also issued equity at various times. As of December 31, 2013 , the Company had unrestricted cash and short-term marketable securities balances of $ 578.2 million , $356.3 million available under its revolving credit facility, and $323.0 million available under its TILC warehouse facility. The Company believes it has access to adequate capital resources to fund operating requirements and is an active participant in the capital markets.

Off Balance Sheet Arrangements

See Note 6 of the Notes to the Consolidated Financial Statements for information about off balance sheet arrangements.

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Derivative Instruments

We use derivative instruments to mitigate the impact of changes in interest rates, both in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding. We also use derivative instruments to mitigate the impact of changes in natural gas and diesel fuel prices and changes in foreign currency exchange rates. For derivative instruments designated as hedges, the Company formally documents the relationship between the derivative instrument and the hedged item, as well as the risk management objective and strategy for the use of the derivative instrument. This documentation includes linking the derivatives that are designated as fair value or cash flow hedges to specific assets or liabilities on the balance sheet, commitments, or forecasted transactions. At the time a derivative instrument is entered into, and at least quarterly thereafter, the Company assesses whether the derivative instrument is effective in offsetting the changes in fair value or cash flows of the hedged item. Any change in fair value resulting in ineffectiveness, as defined by accounting standards issued by the FASB, is recognized in current period earnings. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is recorded in accumulated other comprehensive loss ("AOCL") as a separate component of stockholders' equity and reclassified into earnings in the period during which the hedge transaction affects earnings. Trinity monitors its derivative positions and the credit ratings of its counterparties and does not anticipate losses due to counterparties' non-performance. See Note 3 of the Notes to Consolidated Financial Statements for discussion of how the Company valued its commodity hedges and interest rate swaps at December 31, 2013 . See Note 11 of the Notes to Consolidated Financial Statements for a description of the Company's debt instruments.

Interest rate hedges



					Included in accompanying balance sheet at December 31, 2013
	Notional Amount		Interest Rate ⁽¹⁾		Liability		AOCL – loss/ (income)			Noncontrolling Interest
	(in millions, except %)
Expired hedges:
2006 secured railcar equipment notes	$	200.0	4.87	%	$	—	$	(1.6	)	$	—
Promissory notes	$	370.0	5.34	%	$	—	$	4.1		$	—
TRIP Holdings warehouse loan	$	788.5	3.60	%	$	—	$	12.9		$	15.9
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	67.2	2.62	%	$	2.1	$	0.9		$	1.1
Promissory notes	$	415.0	4.13	%	$	21.7	$	20.0		$	—


⁽¹⁾	Weighted average fixed interest rate



	Effect on interest expense-increase/(decrease)
	Year Ended December 31,									Expected effect during next twelve months ⁽¹⁾
	2013			2012			2011			Expected effect during next twelve months ⁽¹⁾
	(in millions)
Expired hedges:
2006 secured railcar equipment notes	$	(0.3	)	$	(0.3	)	$	(0.4	)	$	(0.3	)
Promissory notes	$	3.1		$	3.3		$	3.5		$	2.9
TRIP Holdings warehouse loan	$	6.1		$	6.0		$	17.4		$	5.1
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	1.8		$	2.0		$	1.1		$	1.5
Promissory notes	$	15.8		$	18.4		$	19.6		$	15.7


⁽¹⁾	Based on fair value of open hedges as of December 31, 2013

During 2005 and 2006 , we entered into interest rate swap derivatives in anticipation of issuing our 2006 Secured Railcar Equipment Notes. These derivative instruments, with a notional amount of $200.0 million , were settled in 2006 and fixed the interest rate on a portion of the related debt issuance. These derivative instrument transactions are being accounted for as cash flow hedges with changes in the fair value of the instruments of $4.5 million in income recorded in AOCL through the date the related debt issuance closed in 2006 . The balance is being amortized over the term of the related debt. The effect on interest expense is due to amortization of the AOCL balance.

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During 2006 and 2007 , we entered into interest rate swap derivatives in anticipation of issuing our Promissory Notes. These derivative instruments, with a notional amount of $370.0 million , were settled in 2008 and fixed the interest rate on a portion of the related debt issuance. These derivative instrument transactions are being accounted for as cash flow hedges with changes in the fair value of the instruments of $24.5 million recorded as a loss in AOCL through the date the related debt issuance closed in 2008 . The balance is being amortized over the term of the related debt. The effect on interest expense is due to amortization of the AOCL balance.

In 2008 , we entered into an interest rate swap derivative instrument, expiring in 2015 , to fix the variable Libor component of the Promissory Notes. This derivative instrument transaction is being accounted for as a cash flow hedge. The effect on interest expense results primarily from monthly interest settlements.

Between 2007 and 2009 , TRIP Holdings, as required by the TRIP Warehouse Loan, entered into interest rate swap derivatives, all of which qualified as cash flow hedges, to reduce the effect of changes in variable interest rates in the TRIP Warehouse Loan. In July 2011 , these interest rate hedges were terminated in connection with the refinancing of the TRIP Warehouse Loan. Balances included in AOCL at the date the hedges were terminated are being amortized over the expected life of the new debt with $5.1 million of additional interest expense expected to be recognized during the twelve months following December 31, 2013 . Also in July 2011 , TRIP Holdings’ wholly-owned subsidiary, TRIP Master Funding, entered into an interest rate swap derivative instrument, expiring in 2021 , with a notional amount of $94.1 million to reduce the effect of changes in variable interest rates associated with the Class A-1b notes of the TRIP Master Funding secured railcar equipment notes. The effect on interest expense results primarily from monthly interest settlements.

See Note 11 of the Notes to Consolidated Financial Statements regarding the related debt instruments.

Other Derivatives



	Effect on operating income - increase/(decrease)
	Year Ended December 31,
	2013		2012			2011
	(in millions)
Fuel hedges ⁽¹⁾
Effect of mark-to-market valuation	$	—	$	0.4		$	—
Settlements	—		—			0.4
	$	—	$	0.4		$	0.4
Foreign exchange hedges ⁽²⁾	$	—	$	(0.4	)	$	0.1


⁽¹⁾	Included in cost of revenues in the accompanying consolidated statement of operations


⁽²⁾	Included in other, net in the accompanying consolidated statement of operations

Natural gas and diesel fuel

We maintain a program to mitigate the impact of fluctuations in the price of natural gas and diesel fuel purchases. The intent of the program is to protect our operating profit from adverse price changes by entering into derivative instruments. For those instruments that do not qualify for hedge accounting treatment, any changes in their valuation are recorded directly to the consolidated statement of operations. The amount recorded in the consolidated balance sheet as of December 31, 2013 for these instruments was not significant.

Foreign exchange hedge

We enter into foreign exchange hedges to mitigate the impact on operating profit of unfavorable fluctuations in foreign currency exchange rates. These instruments are short term with quarterly maturities and no remaining balance in AOCL as of December 31, 2013 .

Stock-Based Compensation

We have a stock-based compensation plan covering our employees and our Board of Directors. See Note 16 of the Notes to the Consolidated Financial Statements.

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Employee Retirement Plans

As disclosed in Note 14 of the Notes to the Consolidated Financial Statements, the assets of the employee retirement plans exceeded the projected benefit obligation by $7.1 million as of December 31, 2013 while the projected benefit obligation exceeded the plans' assets by $102.4 million as of December 31, 2012 . The change was primarily due to a 97 basis point increase in the obligation discount rate assumption and a higher return on assets. We continue to sponsor an employee savings plan under the existing 401(k) plan that covers substantially all employees and includes both a company matching contribution and an annual retirement contribution of up to 3% each of eligible compensation based on our performance, as well as a Supplemental Profit Sharing Plan. Both the annual retirement contribution and the company matching contribution are discretionary, requiring board approval, and made annually with the investment of the funds directed by the participants.

Employer contributions for the year ending December 31, 2014 are expected to be $15.3 million for the defined benefit plans compared to $18.9 million contributed during 2013 . Employer contributions to the 401(k) plans and the Supplemental Profit Sharing Plan for the year ending December 31, 2014 are expected to be $12.5 million compared to $11.7 million during 2013 .

Contractual Obligation and Commercial Commitments

As of December 31, 2013 , we had the following contractual obligations and commercial commitments:



			Payments Due by Period
Contractual Obligations and Commercial Commitments	Total		1 Year or Less		2-3 Years		4-5 Years		After 5 Years
	(in millions)
Debt and capital lease obligations:
Debt:
Parent and wholly-owned subsidiaries, excluding unamortized debt discount	$	1,765.6	$	64.9	$	611.5	$	86.2	$	1,003.0
Partially-owned subsidiaries	1,256.1		65.1		111.1		86.8		993.1
Capital lease obligations	42.2		3.1		6.8		32.3		—
Interest	880.2		146.1		265.4		196.7		272.0
	3,944.1		279.2		994.8		402.0		2,268.1

Operating leases	14.7		5.3		6.1		2.3		1.0
Obligations for purchase of goods and services ¹	694.9		665.8		20.9		3.2		5.0
Letters of credit	69.6		68.5		1.1		—		—
Leasing Group - operating leases related to sale/leaseback transactions	569.2		57.5		108.6		111.3		291.8
Other	13.5		7.9		4.4		1.2		—
Total	$	5,306.0	$	1,084.2	$	1,135.9	$	520.0	$	2,565.9

¹ Includes $577.8 million in purchase obligations for raw materials and components principally by the Rail, Inland Barge, and Energy Equipment Groups.

As of December 31, 2013 and 2012 , we had $65.8 million and $59.0 million , respectively, of tax liabilities, including interest and penalties, related to uncertain tax positions. Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, we are unable to estimate the years in which settlement will occur with the respective taxing authorities. See Note 13 of the Notes to the Consolidated Financial Statements.

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Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to bad debts, inventories, property, plant, and equipment, goodwill, income taxes, warranty obligations, insurance, restructuring costs, contingencies, and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Inventory

We state all our inventories at the lower of cost or market. Our policy related to excess and obsolete inventory requires an analysis of inventory at the business unit level on a quarterly basis and the recording of any required adjustments. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements and compare that with the current or committed inventory levels. It is possible that changes in required inventory reserves may occur in the future due to then current market conditions.

Long-lived Assets

We periodically evaluate the carrying value of long-lived assets to be held and used for potential impairment. The carrying value of long-lived assets to be held and used is considered impaired only when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the assets is less than their carrying value. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved or market quotes as available. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced by the estimated cost to dispose of the assets.

Goodwill

Goodwill is required to be tested for impairment annually, or on an interim basis, whenever events or circumstances change, indicating that the carrying amount of the goodwill might be impaired. The goodwill impairment test is a two-step process with step one requiring the comparison of the reporting unit's estimated fair value with the carrying amount of its net assets. Step two of the impairment test is necessary to determine the amount of goodwill impairment to be recorded when the reporting unit's recorded net assets exceed its fair value. Impairment is assessed at the “reporting unit” level by applying a fair value-based test for each unit with recorded goodwill. The estimates and judgments that most significantly affect the fair value calculations are assumptions related to revenue and operating profit growth, discount rates and exit multiples. Based on the Company's annual goodwill impairment test, performed at the reporting unit level as of December 31, 2013 , the Company concluded that 1) no impairment charges were determined to be necessary and 2) none of the reporting units evaluated could reasonably be expected to fail the first step of the goodwill impairment test. See Note 1 of the Notes to the Consolidated Financial Statements for further explanation.

Given the uncertainties of the economy and its potential impact on our businesses, there can be no assurance that our estimates and assumptions regarding the fair value of our reporting units, made for the purposes of the long-lived asset and goodwill impairment tests, will prove to be accurate predictions of the future. If our assumptions regarding forecasted cash flows are not achieved, it is possible that impairments of remaining goodwill and long-lived assets may be required.

Warranties

The Company provides warranties against materials and manufacturing defects generally ranging from one to five years depending on the product. The warranty costs are estimated using a two-step approach. First, an engineering estimate is made for the cost of all claims that have been filed by a customer. Second, based on historical claims experience, a cost is accrued for all products still within a warranty period for which no claims have been filed. The Company provides for the estimated cost of product warranties at the time revenue is recognized related to products covered by warranties and assesses the adequacy of the resulting reserves on a quarterly basis.

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Insurance

We are effectively self-insured for workers' compensation claims. A third-party administrator processes all such claims. We accrue our workers' compensation liability based upon independent actuarial studies. To the extent actuarial assumptions change and claims experience rates differ from historical rates, our liability may change.

Contingencies and Litigation

The Company is involved in claims and lawsuits incidental to our business. Based on information currently available with respect to such claims and lawsuits, including information on claims and lawsuits as to which the Company is aware but for which the Company has not been served with legal process, it is management's opinion that the ultimate outcome of all such claims and litigation, including settlements, in the aggregate will not have a material adverse effect on the Company's overall financial condition for purposes of financial reporting. However, resolution of certain claims or lawsuits by settlement or otherwise, could impact the operating results of the reporting period in which such resolution occurs.

Environmental

We are involved in various proceedings related to environmental matters. We have provided reserves to cover probable and estimable liabilities with respect to such proceedings, taking into account currently available information and our contractual rights of indemnification. However, estimates of future response costs are necessarily imprecise. Accordingly, there can be no assurance that we will not become involved in future litigation or other proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to us.

Income Taxes

The Company accounts for income taxes under the asset and liability method prescribed by ASC 740. See Note 13 in the Notes to the Consolidated Financial Statements. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and other tax attributes using currently enacted tax rates. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. Management is required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets and assess deferred tax liabilities based on enacted law and tax rates for the appropriate tax jurisdictions to determine the amount of such deferred tax assets and liabilities. Changes in the calculated deferred tax assets and liabilities may occur in certain circumstances, including statutory income tax rate changes, statutory tax law changes, or changes in the structure or tax status of the Company. The Company assesses whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. This assessment considers, among other matters, the nature, frequency and severity of recent losses; a forecast of future profitability; the duration of statutory carryback and carryforward periods; the Company's experience with tax attributes expiring unused; and tax planning alternatives.

At December 31, 2013 , the Company had $39.4 million of Federal consolidated net operating loss carryforwards. The majority of these net operating loss carryforwards were acquired as part of an acquisition of a company in 2010 and are subject to limitations on the amount that can be utilized in any one tax year. In addition, the Company had tax-effected $5.2 million of state loss carryforwards. The Company is expecting to utilize all of its $42.2 million in remaining foreign tax credit carryforwards on its 2013 Federal income tax return. The Federal net operating loss carryforwards are due to expire between 2028 and 2029 . We have established a valuation allowance for Federal, state, and foreign tax operating losses and credits which may not be realizable. We believe that it is more likely than not that we will be able to generate sufficient future taxable income to utilize the remaining deferred tax assets.

At times, we may claim tax benefits that may be challenged by a tax authority. We recognize tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in our tax returns that do not meet these recognition and measurement standards.

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Pensions

The Company sponsors defined benefit plans which provide retirement income and death benefits for certain eligible employees. The Company's pension costs and liabilities are primarily determined using actuarial assumptions regarding the long-term rate of return on plan assets and the discount rate used to determine the present value of future benefit obligations. The compensation increase rate assumption pertains solely to the pension plan of the Company's Inland Barge segment as the accrued benefits of the Company's remaining pension plans were frozen in 2009. Pension assumptions are reviewed annually by outside actuaries and the Company's management. These actuarial assumptions are summarized in the following table:



	Year Ended December 31,
	2013		2012		2011
Assumptions used to determine benefit obligations at the annual measurement date were:
Obligation discount rate	5.22	%	4.25	%	5.40	%
Compensation increase rate	4.00	%	4.00	%	3.00	%
Assumptions used to determine net periodic benefit costs were:
Obligation discount rate	4.25	%	5.40	%	5.90	%
Long-term rate of return on plan assets	7.75	%	7.75	%	7.75	%
Compensation increase rate	4.00	%	3.00	%	3.00	%

The obligation discount rate assumption is determined by deriving a single discount rate from a theoretical settlement portfolio of high quality corporate bonds sufficient to provide for the plans' projected benefit payments. The expected long-term rate of return on plan assets is an assumption reflecting the anticipated weighted average rate of earnings on the portfolio over the long-term. To arrive at this rate, we developed estimates based upon the anticipated performance of the plans' assets. The effect of a change in either of these assumptions on the net retirement cost for the year ended December 31, 2013 and on the projected benefit obligations at December 31, 2013 is summarized as follows:



	Effect on Net Retirement Cost for the Year Ended December 31, 2013			Effect on Projected Benefit Obligations at December 31, 2013
Assumptions:	Increase/(decrease) (in millions)
Obligation discount rate:
Increase of 50 basis points	$	(0.5	)	$	(25.3	)
Decrease of 50 basis points	$	0.4		$	27.0
Long-term rate of return on plan assets:
Increase of 50 basis points	$	(1.7	)	$	—
Decrease of 50 basis points	$	1.7		$	—

Recent Accounting Pronouncements

See Note 1 of the Notes to the Consolidated Financial Statements for information about recent accounting pronouncements.

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Forward-Looking Statements

This annual report on Form 10-K (or statements otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the Securities and Exchange Commission (“SEC”), news releases, conferences, World Wide Web postings or otherwise) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking statements and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performances, estimates, projections, goals, and forecasts. Trinity uses the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” and similar expressions to identify these forward-looking statements. Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements include, among others:


•	market conditions and demand for our business products and services;


•	the cyclical nature of industries in which we compete;


•	variations in weather in areas where our construction products are sold, used, or installed;


•	naturally-occurring events and disasters causing disruption to our manufacturing, product deliveries, and production capacity, thereby giving rise to an increase in expenses, loss of revenue, and property losses;


•	the timing of introduction of new products;


•	the timing and delivery of customer orders or a breach of customer contracts;


•	the credit worthiness of customers and their access to capital;


•	product price changes;


•	changes in mix of products sold;


•	the extent of utilization of manufacturing capacity;


•	availability and costs of steel, component parts, supplies, and other raw materials;


•	competition and other competitive factors;


•	changing technologies;


•	surcharges and other fees added to fixed pricing agreements for steel, component parts, supplies and other raw materials;


•	interest rates and capital costs;


•	counter-party risks for financial instruments;


•	long-term funding of our operations;


•	taxes;


•	the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico;


•	changes in import and export quotas and regulations;


•	business conditions in emerging economies;


•	costs and results of litigation;


•	changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies; and


•	legal, regulatory, and environmental issues.

Any forward-looking statement speaks only as of the date on which such statement is made. Trinity undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Our earnings could be affected by changes in interest rates due to the impact those changes have on our variable rate debt obligations, which represented 20.8% of our total debt as of December 31, 2013 . If interest rates average one percentage point more in fiscal year 2014 than they did during 2013 , our interest expense would increase by $1.7 million, after considering the effects of interest rate hedges. In comparison, at December 31, 2012 , we estimated that if interest rates averaged one percentage point more in fiscal year 2013 than they did during 2012 , our interest expense would increase by $2.5 million. The impact of an increase in interest rates was determined based on the impact of the hypothetical change in interest rates and scheduled principal payments on our variable-rate debt obligations as of December 31, 2013 and 2012 . A one percentage point increase in the interest rate yield would decrease the fair value of the fixed rate debt by approximately $202.3 million. A one percentage point decrease in the interest rate yield would increase the fair value of the fixed rate debt by approximately $231.7 million.

Trinity uses derivative instruments to mitigate the impact of increases in natural gas and diesel fuel prices. Existing hedge transactions as of December 31, 2013 are based on the New York Mercantile Exchange for natural gas and heating oil. Hedge transactions are settled with the counterparty in cash. At December 31, 2013 and December 31, 2012 the effect on the consolidated balance sheets was insignificant. The effect on the consolidated statement of operations for the year ended December 31, 2013 was immaterial, and for the year ended December 31, 2012 was operating income of $0.4 million. We estimate that the impact to earnings and the balance sheet that could result from hypothetical price changes of up to 10% is not significant based on hedge positions at December 31, 2013 .

In addition, we are subject to market risk related to our net investments in our foreign subsidiaries. The net investment in foreign subsidiaries as of December 31, 2013 was $233.2 million. The impact of such market risk exposures as a result of foreign exchange rate fluctuations has not been material to us. See Note 12 of the Notes to the Consolidated Financial Statements.

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Item 8. Financial Statements

Trinity Industries, Inc.

Index to Financial Statements



	Page
Report of Independent Registered Public Accounting Firm	45
Consolidated Statements of Operations for the years ended December 31, 2013, 2012, and 2011	46
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012, and 2011	47
Consolidated Balance Sheets as of December 31, 2013 and 201 2	48
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012, and 2011	49
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2013, 2012, and 2011	50
Notes to Consolidated Financial Statements	51

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Trinity Industries, Inc.

We have audited the accompanying consolidated balance sheets of Trinity Industries, Inc. and Subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, cash flows and stockholders' equity for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Trinity Industries, Inc. and Subsidiaries at December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Trinity Industries, Inc. and Subsidiaries' internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) an d our report dated February 20, 2014 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Dallas, Texas

February 20, 2014

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Trinity Industries, Inc. and Subsidiaries

Consolidated Statements of Operations



	Year Ended December 31,
	2013			2012			2011
	(in millions, except per share amounts)
Revenues:
Manufacturing	$	3,719.9		$	3,167.5		$	2,386.9
Leasing	645.4			644.4			551.4
	4,365.3			3,811.9			2,938.3
Operating costs:
Cost of revenues:
Manufacturing	2,990.9			2,701.2			2,067.2
Leasing	331.4			350.3			290.3
	3,322.3			3,051.5			2,357.5
Selling, engineering, and administrative expenses:
Manufacturing	180.4			143.4			127.1
Leasing	37.6			29.4			23.4
Other	73.3			51.3			43.5
	291.3			224.1			194.0
Gains on disposition of property, plant, and equipment:
Net gains on railcar lease fleet sales owned more than one year at the time of sale	20.4			33.5			16.2
Disposition of flood-damaged property, plant, and equipment	—			0.4			17.6
Other	0.8			4.6			6.2
	21.2			38.5			40.0
Total operating profit	772.9			574.8			426.8
Other (income) expense:
Interest income	(2.1		)	(1.5		)	(1.5		)
Interest expense	187.3			194.7			185.3
Other, net	(2.8		)	(4.3		)	4.0
	182.4			188.9			187.8
Income from continuing operations before income taxes	590.5			385.9			239.0
Provision for income taxes:
Current	158.6			7.7			31.7
Deferred	45.8			126.3			60.5
	204.4			134.0			92.2
Net income from continuing operations	386.1			251.9			146.8
Discontinued operations:
Gain on sale of discontinued operations, net of provision for income taxes of $5.4, $-, and $-	7.1			—			—
Income (loss) from discontinued operations, net of provision (benefit) for income taxes of $(0.8), $1.1, and $(0.4)	(0.8		)	1.8			(1.1		)
Net income	392.4			253.7			145.7
Net income (loss) attributable to noncontrolling interest	16.9			(1.5		)	3.5
Net income attributable to Trinity Industries, Inc.	$	375.5		$	255.2		$	142.2
Net income (loss) attributable to Trinity Industries, Inc. per common share:
Basic:
Continuing operations	$	4.68		$	3.18		$	1.78
Discontinued operations	0.08			0.02			(0.01		)
	$	4.76		$	3.20		$	1.77
Diluted:
Continuing operations	$	4.67		$	3.17		$	1.78
Discontinued operations	0.08			0.02			(0.01		)
	$	4.75		$	3.19		$	1.77
Weighted average number of shares outstanding:
Basic	76.4			77.3			77.5
Diluted	76.5			77.5			77.8
Dividends declared per common share	$	0.54		$	0.42		$	0.35

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income



	Year Ended December 31,
	2013		2012			2011
	(in millions)
Net income	$	392.4	$	253.7		$	145.7
Other comprehensive income (loss):
Unrealized losses on derivative financial instruments:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.8, $4.2, and $(1.9)	0.8		7.2			(3.9		)
Reclassification adjustments for losses included in net income, net of tax benefit of $8.7, $3.2, and $2.3	18.1		5.8			4.1
Currency translation adjustment – reclassification adjustment for losses included in net income, net of tax benefit of $-, $0.4, and $-	—		0.6			—
Net actuarial gains (losses) of defined benefit plans:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $31.0, $(17.8), and $(17.5)	52.7		(30.3		)	(29.8		)
Amortization of net actuarial losses, net of tax benefit of $1.9, $1.1, and $0.6	3.1		2.2			1.2
	74.7		(14.5		)	(28.4		)
Comprehensive income	467.1		239.2			117.3
Less: comprehensive income attributable to noncontrolling interest	21.1		0.1			3.6
Comprehensive income attributable to Trinity Industries, Inc.	$	446.0	$	239.1		$	113.7

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries

Consolidated Balance Sheets



	December 31, 2013			December 31, 2012
	(in millions)
ASSETS
Cash and cash equivalents	$	428.5		$	573.0
Short-term marketable securities	149.7			—
Receivables, net of allowance for doubtful accounts of $3.1 and $4.6	372.7			390.0
Inventories:
Raw materials and supplies	477.0			439.7
Work in process	201.4			140.9
Finished goods	136.3			121.5
	814.7			702.1
Restricted cash, including partially-owned subsidiaries of $77.1 and $57.8	260.7			223.2
Property, plant, and equipment, at cost, including partially-owned subsidiaries of $1,887.2 and $1,661.0	6,275.8			5,642.0
Less accumulated depreciation, including partially-owned subsidiaries of $202.1 and $153.8	(1,505.2		)	(1,343.0		)
	4,770.6			4,299.0
Goodwill	278.2			240.4
Assets held for sale and discontinued operations	—			27.9
Other assets	238.3			214.3
	$	7,313.4		$	6,669.9
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	216.3		$	188.2
Accrued liabilities	567.4			583.1
Debt:
Recourse, net of unamortized discount of $74.1 and $87.5	419.0			458.1
Non-recourse:
Wholly-owned subsidiaries	1,314.7			1,404.2
Partially-owned subsidiaries	1,256.1			1,192.7
	2,989.8			3,055.0
Deferred income	40.8			44.5
Deferred income taxes	650.7			572.4
Liabilities held for sale and discontinued operations	—			3.7
Other liabilities	99.3			85.4
	4,564.3			4,532.3
Stockholders’ equity:
Preferred stock – 1.5 shares authorized and unissued	—			—
Common stock – 200.0 shares authorized; shares issued and outstanding at December 31, 2013 and 2012 – 81.7	81.7			81.7
Capital in excess of par value	686.6			652.6
Retained earnings	1,870.0			1,536.7
Accumulated other comprehensive loss	(78.2		)	(150.1		)
Treasury stock – shares at December 31, 2013 – 4.3; at December 31, 2012 – 2.6	(158.0		)	(67.9		)
	2,402.1			2,053.0
Noncontrolling interest	347.0			84.6
	2,749.1			2,137.6
	$	7,313.4		$	6,669.9

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries

Consolidated Statements of Cash Flows



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Operating activities:
Net income	$	392.4		$	253.7		$	145.7
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations	(6.3		)	(1.8		)	1.1
Depreciation and amortization	211.5			193.7			187.7
Stock-based compensation expense	44.5			27.7			22.8
Excess tax benefits from stock-based compensation	(8.5		)	(0.6		)	(3.2		)
Provision for deferred income taxes	45.8			126.3			60.5
Net gains on railcar lease fleet sales owned more than one year at the time of sale	(20.4		)	(33.5		)	(16.2		)
Gain on disposition of property, plant, equipment, and other assets	(0.8		)	(4.6		)	(6.2		)
Gain on disposition of flood-damaged property, plant, equipment, and other assets	—			(0.4		)	(17.6		)
Non-cash interest expense	30.8			31.2			18.6
Other	(6.4		)	(3.2		)	1.4
Changes in assets and liabilities:
(Increase) decrease in receivables	17.2			2.7			(150.3		)
(Increase) decrease in inventories	(95.6		)	(128.0		)	(234.4		)
(Increase) decrease in restricted cash	(25.0		)	—			—
(Increase) decrease in other assets	(29.1		)	(41.5		)	14.2
Increase (decrease) in accounts payable	29.0			(16.7		)	74.9
Increase (decrease) in accrued liabilities	72.4			125.5			(11.5		)
Increase (decrease) in other liabilities	8.2			(3.9		)	14.0
Net cash provided by operating activities - continuing operations	659.7			526.6			101.5
Net cash provided by operating activities - discontinued operations	2.5			0.8			9.4
Net cash provided by operating activities	662.2			527.4			110.9
Investing activities:
(Increase) decrease in short-term marketable securities	(149.7		)	—			158.0
Proceeds from railcar lease fleet sales owned more than one year at the time of sale	131.6			126.3			60.6
Proceeds from railcar lease fleet sales – sale and leaseback	—			58.3			44.4
Proceeds from disposition of property, plant, equipment, and other assets	3.7			16.8			8.5
Proceeds from disposition of flood-damaged property, plant, and equipment	—			—			23.3
Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less with a net cost of $49.4, $93.8 and $46.2	(581.1		)	(352.6		)	(258.6		)
Capital expenditures – manufacturing and other	(149.9		)	(116.6		)	(47.6		)
Capital expenditures – replacement of flood-damaged property, plant, and equipment	—			—			(29.4		)
Acquisitions, net of cash acquired	(73.2		)	(46.2		)	(42.5		)
Other	—			1.7			—
Net cash required by investing activities - continuing operations	(818.6		)	(312.3		)	(83.3		)
Net cash provided (required) by investing activities - discontinued operations	0.6			0.9			(1.7		)
Net cash required by investing activities	(818.0		)	(311.4		)	(85.0		)
Financing activities:
Proceeds from issuance of common stock, net	2.5			4.1			2.1
Excess tax benefits from stock-based compensation	8.5			0.6			3.2
Payments to retire debt	(262.1		)	(378.4		)	(1,112.3		)
Proceeds from issuance of debt	175.0			443.8			1,143.3
(Increase) decrease in restricted cash	(12.5		)	17.1			(33.2		)
Shares repurchased	(103.2		)	(45.2		)	—
Dividends paid to common shareholders	(39.3		)	(31.7		)	(27.2		)
Proceeds from sale of interests in partially-owned leasing subsidiaries	296.7			—			—
Repurchase of noncontrolling interests in partially-owned leasing subsidiary	(84.0		)	—			—
Contributions from noncontrolling interest	50.0			—			—
Distributions to noncontrolling interest	(10.0		)	—			(6.6		)
Other	(8.8		)	(5.3		)	—
Net cash provided (required) by financing activities - continuing operations	12.8			5.0			(30.7		)
Net cash provided (required) by financing activities - discontinued operations	(1.5		)	0.9			1.9
Net cash provided (required) by financing activities	11.3			5.9			(28.8		)
Net increase (decrease) in cash and cash equivalents	(144.5		)	221.9			(2.9		)
Cash and cash equivalents at beginning of period	573.0			351.1			354.0
Cash and cash equivalents at end of period	$	428.5		$	573.0		$	351.1

Interest paid for the years ended December 31, 2013 , 2012 , and 2011 was $163.6 million , $174.8 million , and $154.9 million , respectively. Net tax payments made for the years ended December 31, 2013 , 2012 , and 2011 were $110.9 million , $18.4 million , and $2.5 million , respectively.

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity



	Common Stock												Treasury Stock
	Shares	$1 Par Value		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Shares		Amount			Trinity Stockholders’ Equity			Noncontrolling Interest			Total Stockholders’ Equity
	(in millions, except par value)
Balances at December 31, 2010	81.7	$	81.7	$	606.1		$	1,200.5		$	(95.5	)	(1.9	)	$	(28.0	)	$	1,764.8		$	80.9		$	1,845.7
Net income	—	—		—			142.2			—			—		—			142.2			3.5			145.7
Other comprehensive income (loss)	—	—		—			—			(28.5		)	—		—			(28.5		)	0.1			(28.4		)
Cash dividends on common stock	—	—		—			(28.0		)	—			—		—			(28.0		)	—			(28.0		)
Restricted shares, net	—	—		6.7			—			—			0.2		0.3			7.0			—			7.0
Stock options exercised	—	—		(0.5		)	—			—			0.2		2.6			2.1			—			2.1
Excess tax benefits from stock-based compensation	—	—		3.5			—			—			—		—			3.5			—			3.5
Stock-based compensation expense	—	—		0.6			—			—			—		—			0.6			—			0.6
Reclassification of purchase of additional interest in TRIP Holdings	—	—		15.5			—			(15.5		)	—		—			—			—			—
Tax expense allocation related to TRIP Holdings unrealized loss on derivative financial instruments	—	—		(5.5		)	—			5.5			—		—			—			—			—
Other	—	—		0.1			—			—			—		—			0.1			—			0.1
Balances at December 31, 2011	81.7	$	81.7	$	626.5		$	1,314.7		$	(134.0	)	(1.5	)	$	(25.1	)	$	1,863.8		$	84.5		$	1,948.3
Net income (loss)	—	—		—			255.2			—			—		—			255.2			(1.5		)	253.7
Other comprehensive income (loss)	—	—		—			—			(16.1		)	—		—			(16.1		)	1.6			(14.5		)
Cash dividends on common stock	—	—		—			(33.2		)	—			—		—			(33.2		)	—			(33.2		)
Restricted shares, net	—	—		26.4			—			—			0.4		(1.7		)	24.7			—			24.7
Stock options exercised	—	—		(0.7		)	—			—			0.3		4.8			4.1			—			4.1
Excess tax benefits from stock-based compensation	—	—		0.2			—			—			—		—			0.2			—			0.2
Stock-based compensation expense	—	—		0.2			—			—			—		—			0.2			—			0.2
Shares repurchased	—	—		—			—			—			(1.8	)	(45.2		)	(45.2		)	—			(45.2		)
Other	—	—		—			—			—			—		(0.7		)	(0.7		)	—			(0.7		)
Balances at December 31, 2012	81.7	$	81.7	$	652.6		$	1,536.7		$	(150.1	)	(2.6	)	$	(67.9	)	$	2,053.0		$	84.6		$	2,137.6
Net income	—	—		—			375.5			—			—		—			375.5			16.9			392.4
Other comprehensive income	—	—		—			—			70.5			—		—			70.5			4.2			74.7
Cash dividends on common stock	—	—		—			(42.2		)	—			—		—			(42.2		)	—			(42.2		)
Restricted shares, net	—	—		23.3			—			—			0.7		13.8			37.1			—			37.1
Shares repurchased	—	—		—			—			—			(2.5	)	(108.2		)	(108.2		)	—			(108.2		)
Stock options exercised	—	—		(2.0		)	—			—			0.1		4.3			2.3			—			2.3
Excess tax benefits from stock-based compensation	—	—		8.7			—			—			—		—			8.7			—			8.7
Repurchase of interests in partially-owned leasing subsidiary	—	—		11.8			—			(11.8		)	—		—			—			(84.2		)	(84.2		)
Sale of interests in partially-owned leasing subsidiaries	—	—		(7.3		)	—			13.2			—		—			5.9			285.4			291.3
Contributions from noncontrolling interest	—	—		—			—			—			—		—			—			50.0			50.0
Distributions to noncontrolling interest	—	—		—			—			—			—		—			—			(9.9		)	(9.9		)
Other	—	—		(0.5		)	—			—			—		—			(0.5		)	—			(0.5		)
Balances at December 31, 2013	81.7	$	81.7	$	686.6		$	1,870.0		$	(78.2	)	(4.3	)	$	(158.0	)	$	2,402.1		$	347.0		$	2,749.1

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation

The financial statements of Trinity Industries, Inc. and its consolidated subsidiaries (“Trinity”, “Company”, “we” or “our”) include the accounts of its wholly-owned subsidiaries and its partially-owned subsidiaries, TRIP Rail Holdings LLC ("TRIP Holdings") and RIV 2013 Rail Holdings LLC ("RIV 2013"), in which the Company has controlling interest. All significant intercompany accounts and transactions have been eliminated.

Stockholders' Equity

In September 2012 , the Company’s Board of Directors authorized a $200 million share repurchase program, effective October 1, 2012 , which expires on December 31, 2014 . During the year ended December 31, 2013 , the Company repurchased 2,473,189 shares under the program at a cost of $108.2 million . Certain shares of stock repurchased during December 2013 , totaling $ 5.0 million , were cash settled in January 2014 in accordance with normal settlement practices. During the year ended December 31, 2012 , the Company repurchased 1,834,221 shares under the prior program at a cost of $ 45.2 million .

In 2011 , an amount of $15.5 million was reclassified between capital in excess of par value and accumulated other comprehensive loss to properly reflect the additional amount of accumulated unrealized loss on derivative financial instruments attributable to the Company after the purchase of additional interests in TRIP Holdings.

Revenue Recognition

Revenues for contracts providing for a large number of units and few deliveries are recorded as the individual units are produced, inspected, and accepted by the customer as the risk of loss passes to the customer upon delivery acceptance on these contracts. This occurs primarily in the Rail and Inland Barge Groups. Revenue from rentals and operating leases, including contracts which contain non-level fixed rental payments, is recognized monthly on a straight-line basis. Revenue is recognized from the sales of railcars from the lease fleet on a gross basis in leasing revenues and cost of revenues if the railcar has been owned for one year or less at the time of sale. Sales of railcars from the lease fleet that have been owned for more than one year are recognized as a net gain or loss from the disposal of a long-term asset. Fees for shipping and handling are recorded as revenue. For all other products, we recognize revenue when products are shipped or services are provided.

Income Taxes

The liability method is used to account for income taxes. Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized.

The Company regularly evaluates the likelihood of realization of tax benefits derived from positions it has taken in various federal and state filings after consideration of all relevant facts, circumstances, and available information. For those tax positions that are deemed more likely than not to be sustained, the Company recognizes the benefit it believes is cumulatively greater than 50% likely to be realized. To the extent the Company were to prevail in matters for which accruals have been established or be required to pay amounts in excess of recorded reserves, the effective tax rate in a given financial statement period could be materially impacted.

Financial Instruments

The Company considers all highly liquid debt instruments to be either cash and cash equivalents if purchased with a maturity of three months or less, or short-term marketable securities if purchased with a maturity of more than three months and less than one year . The Company intends to hold its short-term marketable securities until they are redeemed at their maturity date and believes that under the "more likely than not" criteria, the Company will not be required to sell the securities before recovery of their amortized cost bases, which may be maturity.

Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash investments including restricted cash, short-term marketable securities, and receivables. The Company places its cash investments and short-term marketable securities in bank deposits and investment grade, short-term debt instruments and limits the amount of credit exposure to any one commercial issuer. Concentrations of credit risk with respect to receivables are limited due to control procedures that monitor the credit worthiness of customers, the large number of customers in the Company's customer base, and their dispersion across different industries and geographic areas. As receivables are generally unsecured, the Company maintains an allowance for

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doubtful accounts based upon the expected collectibility of all receivables. Receivable balances determined to be uncollectible are charged against the allowance. The carrying values of cash, short-term marketable securities, receivables and accounts payable are considered to be representative of their respective fair values. At December 31, 2013 , one customer’s net receivable balance in our Energy Equipment Group, all within terms, accounted for 16% of the consolidated net receivables balance outstanding.

Inventories

Inventories are valued at the lower of cost or market, with cost determined principally on the first in first out method. Market is replacement cost or net realizable value. Work in process and finished goods include material, labor, and overhead.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. The estimated useful lives are: buildings and improvements - 3 to 30 years ; leasehold improvements - the lesser of the term of the lease or 7 years ; machinery and equipment - 2 to 10 years ; information systems hardware and software - 2 to 5 years ; and railcars in our lease fleet - generally 35 years . The costs of ordinary maintenance and repair are charged to operating costs while renewals and major replacements are capitalized.

Long-lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used for potential impairment. The carrying value of long-lived assets to be held and used is considered impaired only when their carrying value is not recoverable through undiscounted future cash flows and the fair value of the assets is less than their carrying value. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved or market quotes as available. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced by the estimated cost to dispose of the assets. Impairment losses were not material for the years ended December 31, 2013 , 2012 , and 2011 .

Goodwill and Intangible Assets

Goodwill is required to be tested for impairment annually, or on an interim basis whenever events or circumstances change, indicating that the carrying amount of the goodwill might be impaired. The goodwill impairment test is a two-step process with step one requiring the comparison of the reporting unit's estimated fair value with the carrying amount of its net assets. If necessary, step two of the impairment test determines the amount of goodwill impairment to be recorded when the reporting unit's recorded net assets exceed its fair value. Impairment is assessed at the “reporting unit” level by applying a fair value-based test for each unit with recorded goodwill. The estimates and judgments that most significantly affect the fair value calculations are assumptions, consisting of level 3 inputs, related to revenue and operating profit growth, discount rates and exit multiples. As of December 31, 2013 and 2012 , the Company's annual impairment test of goodwill was completed at the reporting unit level and no impairment charges were determined to be necessary.

Intangible assets with defined useful lives, which as of December 31, 2013 had net book values of $19.5 million , are amortized over their estimated useful lives, and were also evaluated for potential impairment as of December 31, 2013 .

Restricted Cash

Restricted cash consists of cash and cash equivalents that are held either as collateral for the Company's non-recourse debt and lease obligations or security for the performance of certain product sales agreements and as such are restricted in use.

Insurance

The Company is effectively self-insured for workers' compensation claims. A third party administrator is used to process claims. We accrue our workers' compensation liability based upon independent actuarial studies.

Warranties

Depending on the product, the Company provides warranties against materials and manufacturing defects generally ranging from one to five years. The warranty costs are estimated using a two-step approach. First, an engineering estimate is made for the cost of all claims that have been asserted by customers. Second, based on historical claims experience, a cost is accrued for all products still within a warranty period for which no claims have been filed. The Company provides for the estimated cost of product warranties at the time revenue is recognized related to products covered by warranties, and assesses the adequacy of the resulting reserves on a quarterly basis.

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Foreign Currency Translation

Operations outside the United States prepare financial statements in currencies other than the United States dollar. The income statement amounts are translated at average exchange rates for the year, while the assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of stockholders' equity and other comprehensive loss. The functional currency of our Mexico operations is considered to be the United States dollar.

Other Comprehensive Income (Loss)

Other comprehensive net income (loss) consists of foreign currency translation adjustments, the effective unrealized gains and losses on the Company's derivative financial instruments, and the net actuarial gains and losses of the Company's defined benefit plans, the sum of which, along with net income (loss), constitutes comprehensive net income (loss). See Note 15 Accumulated Other Comprehensive Loss (“AOCL”). All components are shown net of tax.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, "Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income," ("ASU 2013-02") which amended prior reporting requirements with respect to comprehensive income by requiring additional disclosures about the amounts reclassified out of accumulated other comprehensive loss by component. ASU 2013-02 became effective for public companies during interim and annual reporting periods beginning after December 15, 2012 with early adoption permitted. Accordingly, the Company adopted this new standard on January 1, 2013. The adoption of ASU 2013-02 did not have an impact on the Company's consolidated financial position, results of operations, or cash flows.

Management's Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior year balances have been reclassified in the consolidated balance sheets and consolidated statements of cash flows to conform to the 2013 presentation.

Note 2. Acquisitions and Divestitures

The Company's acquisition and divestiture activities are summarized below:



	Year Ended December 31,
	2013		2012		2011
	(in millions)
Acquisitions:
Purchase price	$	125.2	$	48.8	$	56.4
Net cash paid	$	73.2	$	46.2	$	42.5
Goodwill recorded	$	37.0	$	20.9	$	29.3

Divestitures:
Proceeds	$	35.6	$	2.1	$	8.3
Gain recognized	$	12.5	$	1.5	$	0.7
Goodwill charged off	$	4.8	$	0.1	$	1.0

The four acquisitions completed in 2013 were recorded based on preliminary valuations of the related assets and liabilities at their acquisition date fair value using level three inputs. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated or segment level. See Note 3 Fair Value Accounting for a discussion of inputs in determining fair value.

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The aggregate purchase price related to our acquisition activity for the years ended December 31, 2013, 2012, and 2011 by segment follows:



	Year ended December 31,
	2013		2012		2011
	(in millions)
Rail Group	$	23.1	$	—	$	—
Construction Products Group	74.2		48.8		56.4
Energy Equipment Group	27.9		—		—
	$	125.2	$	48.8	$	56.4

Discontinued operation - Ready-Mix Concrete Operations

During the year ended December 31, 2013 , the Company sold its remaining ready-mix concrete operations in exchange for certain aggregates operations in Texas, Colorado, and California. The fair value of the proceeds received in exchange for the divested operations was based on the Company’s estimate of fair value of the operations disposed using a discounted cash flow analysis. A gain of $12.5 million was recognized based on the fair value of the proceeds less the assets’ carrying amounts and certain transaction costs. The div estiture of our ready-mix concrete operations has been accounted for and reported as a discontinued operation. Assets and liabilities related to the discontinued operations have been classified as Assets/Liabilities Held for Sale and Discontinued Operations in the accompanying consolidated balance sheets as follows:



	December 31, 2013		December 31, 2012
	(in millions)
Assets of Ready-Mix Concrete Operations:
Inventories	$	—	$	4.5
Property, plant, and equipment, net	—		16.9
Goodwill	—		6.3
Other	—		0.2
	$	—	$	27.9
Liabilities of Ready-Mix Concrete Operations:
Debt	$	—	$	3.7
	$	—	$	3.7

Condensed results of operations for the ready-mix concrete operations for the years ended December 31, 2013, 2012, and 2011 are as follows:



	Year Ended December 31,
	2013			2012		2011
	(in millions)
Revenues	$	31.6		$	121.4	$	136.8

Income (loss) from discontinued operations before income taxes	$	(1.6	)	$	2.9	$	(1.5	)
Provision (benefit) for income taxes	(0.8		)	1.1		(0.4		)
Net income (loss) from discontinued operations	$	(0.8	)	$	1.8	$	(1.1	)

In January and February of 2014, we acquired the operating assets of three unrelated businesses in our Energy Equipment Group for a total purchase price of approximately $119.4 million .

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Note 3. Fair Value Accounting

Assets and liabilities measured at fair value on a recurring basis are summarized below:



	Fair Value Measurement as of December 31, 2013
	(in millions)
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	230.6	$	—	$	—	$	230.6
Restricted cash	260.7		—		—		260.7
Total assets	$	491.3	$	—	$	—	$	491.3

Liabilities:
Interest rate hedges: ⁽¹⁾
Wholly-owned subsidiaries	$	—	$	21.7	$	—	$	21.7
Partially-owned subsidiaries	—		2.1		—		2.1
Total liabilities	$	—	$	23.8	$	—	$	23.8

	Fair Value Measurement as of December 31, 2012
	(in millions)
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	246.6	$	155.0	$	—	$	401.6
Restricted cash	223.2		—		—		223.2
Equity call agreement with TRIP Holdings equity investor ⁽²⁾	—		—		0.8		0.8
Fuel derivative instruments ⁽²⁾	—		0.1		—		0.1
Total assets	$	469.8	$	155.1	$	0.8	$	625.7

Liabilities:
Interest rate hedges: ⁽¹⁾
Wholly-owned subsidiaries	$	—	$	37.6	$	—	$	37.6
Partially-owned subsidiaries	—		5.2		—		5.2
Equity put agreement with TRIP Holdings equity investor ⁽³⁾	—		—		2.9		2.9
Total liabilities	$	—	$	42.8	$	2.9	$	45.7

⁽¹⁾ Included in accrued liabilities on the consolidated balance sheet.

⁽²⁾ Included in other assets on the consolidated balance sheet.

⁽³⁾ Included in other liabilities on the consolidated balance sheet.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to establish a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair values are listed below:

Level 1 – This level is defined as quoted prices in active markets for identical assets or liabilities. The Company’s cash equivalents, excluding commercial paper, and restricted cash are instruments of the U.S. Treasury or highly-rated money market mutual funds.

Level 2 – This level is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Cash equivalents include commercial paper valued using quoted prices in secondary markets. The Company’s fuel derivative instruments, which are commodity swaps, are valued using energy and commodity market data. Interest rate hedges are valued at exit prices obtained from each counterparty. See Note 7 Derivative Instruments and Note 11 Debt.

Level 3 – This level is defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The equity put and call agreements with the TRIP equity investor are valued based on cash flow projections and certain assumptions regarding the likelihood of exercising the option under the related agreement. See Note 5 Partially-Owned Leasing Subsidiaries.

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The carrying amounts and estimated fair values of our long-term debt are as follows:



	December 31, 2013					December 31, 2012
	Carrying Value			Estimated Fair Value		Carrying Value			Estimated Fair Value
	(in millions)
Recourse:
Convertible subordinated notes	$	450.0		$	593.4	$	450.0		$	506.6
Less: unamortized discount	(74.1		)			(87.5		)
	375.9					362.5
Capital lease obligations	42.2			42.2		45.8			45.8
Term loan	—			—		48.6			53.3
Other	0.9			0.9		1.2			1.2
	419.0			636.5		458.1			606.9
Non-recourse:
2006 secured railcar equipment notes	240.7			259.2		255.8			292.0
Promissory notes	396.1			389.6		424.1			414.6
2009 secured railcar equipment notes	199.0			229.5		209.2			260.4
2010 secured railcar equipment notes	326.9			342.7		341.5			387.2
TILC warehouse facility	152.0			152.0		173.6			173.6
TRL 2012 secured railcar equipment notes - RIV 2013	499.3			483.4		333.8			321.7
TRIP Holdings senior secured notes	—			—		61.2			62.5
TRIP Master Funding secured railcar equipment notes	756.8			819.8		797.7			952.0
	2,570.8			2,676.2		2,596.9			2,864.0
Total	$	2,989.8		$	3,312.7	$	3,055.0		$	3,470.9

The estimated fair value of our convertible subordinated notes was based on a quoted market price in a market with little activity as of December 31, 2013 and 2012 , respectively ( Level 2 input). The estimated fair values of our 2006 , 2009 , 2010 , and 2012 secured railcar equipment notes, promissory notes, TRIP Holdings senior secured notes, TRIP Rail Master Funding LLC (“TRIP Master Funding”) secured railcar equipment notes, and term loan are based on our estimate of their fair value as of December 31, 2013 and 2012 , respectively. These values were determined by discounting their future cash flows at the current market interest rate ( Level 3 inputs). The carrying value of our Trinity Industries Leasing Company (“TILC”) warehouse facility approximates fair value because the interest rate adjusts to the market interest rate ( Level 3 input). The fair values of all other financial instruments are estimated to approximate carrying value. See Note 11 Debt for a description of the Company's long-term debt.

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Note 4. Segment Information

The Company reports operating results in five principal business segments: (1) the Rail Group, which manufactures and sells railcars and related parts and components; (2) the Construction Products Group, which manufactures and sells highway products and other steel products for infrastructure-related projects, and produces and sells aggregates; (3) the Inland Barge Group, which manufactures and sells barges and related products for inland waterway services; (4) the Energy Equipment Group, which manufactures and sells products for energy related businesses, including structural wind towers, storage containers, tank heads for pressure and non-pressure vessels, and utility, traffic, and lighting structures; and (5) the Railcar Leasing and Management Services Group (“Leasing Group”), which owns and operates a fleet of railcars as well as provides third-party fleet management, maintenance, and leasing services. The segment All Other includes our captive insurance and transportation companies; legal, environmental, and maintenance costs associated with non-operating facilities; and other peripheral businesses. Gains and losses from the sale of property, plant, and equipment that are related to manufacturing and dedicated to the specific manufacturing operations of a particular segment are included in operating profit of that respective segment. Gains and losses from the sale of property, plant, and equipment that can be utilized by multiple segments are included in operating profit of the All Other segment.

As discussed in Note 2, Acquisitions and Divestitures, the Company sold its remaining ready-mix concrete operations that have historically been a component of the Construction Products Group. The divestiture of our ready-mix concrete operations has been accounted for and reported as a discontinued operation and, accordingly, historical segment information previously reported has been adjusted to exclude the discontinued operations from the Construction Products Group.

Sales and related net profits from the Rail Group to the Leasing Group are recorded in the Rail Group and eliminated in consolidation. Sales between these groups are recorded at prices comparable to those charged to external customers, taking into consideration quantity, features, and production demand. Intersegment sales and net profit ("deferred profit") are eliminated in consolidation and reflected in the "Eliminations – Lease subsidiary" line in the table below. Amortization of deferred profit on railcars sold to the Leasing Group is included in the operating profits of the Leasing Group, resulting in the recognition of depreciation expense based on the Company's original manufacturing cost of the railcars. Sales of railcars from the lease fleet are included in the Leasing Group, with related gains and losses computed based on the net book value of the original manufacturing cost of the railcars.

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The financial information from continuing operations for these segments is shown in the tables below. We operate principally in North America.

Year Ended December 31, 2013



	Revenues								Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	External		Intersegment			Total			Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	(in millions)
Rail Group	$	2,093.5	$	774.0		$	2,867.5		$	489.7		$	1,063.9		$	27.2		$	42.4
Construction Products Group	508.6		16.4			525.0			52.6			459.9			20.9			17.1
Inland Barge Group	576.6		0.1			576.7			96.0			170.3			8.1			18.4
Energy Equipment Group	536.5		128.9			665.4			61.4			364.3			18.2			41.5
Railcar Leasing and Management Services Group	645.4		—			645.4			296.8			5,026.9			129.0			581.1
All Other	4.7		81.9			86.6			(13.7		)	49.8			3.7			4.4
Segment Totals before Eliminations and Corporate	4,365.3		1,001.3			5,366.6			982.8			7,135.1			207.1			704.9
Corporate	—		—			—			(73.4		)	731.0			4.5			26.1
Eliminations – Lease subsidiary	—		(756.5		)	(756.5		)	(135.4		)	(549.7		)	—			—
Eliminations – Other	—		(244.8		)	(244.8		)	(1.1		)	(3.0		)	(0.1		)	—
Consolidated Total	$	4,365.3	$	—		$	4,365.3		$	772.9		$	7,313.4		$	211.5		$	731.0

Year Ended December 31, 2012



	Revenues								Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	External		Intersegment			Total			Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	(in millions)
Rail Group	$	1,512.1	$	500.9		$	2,013.0		$	199.0		$	916.2		$	21.8		$	47.8
Construction Products Group	461.2		22.5			483.7			44.8			415.2			16.6			15.7
Inland Barge Group	675.2		—			675.2			124.7			154.4			7.6			15.0
Energy Equipment Group	506.0		52.6			558.6			18.2			400.1			19.0			25.2
Railcar Leasing and Management Services Group	644.4		2.7			647.1			300.9			4,538.8			120.5			352.6
All Other	13.0		68.4			81.4			(10.2		)	30.9			4.4			6.6
Segment Totals before Eliminations and Corporate	3,811.9		647.1			4,459.0			677.4			6,455.6			189.9			462.9
Corporate	—		—			—			(51.5		)	744.9			3.9			6.3
Eliminations – Lease subsidiary	—		(485.9		)	(485.9		)	(50.8		)	(446.2		)	—			—
Eliminations – Other	—		(161.2		)	(161.2		)	(0.3		)	(112.3		)	(0.1		)	—
Consolidated Total	$	3,811.9	$	—		$	3,811.9		$	574.8		$	6,642.0		$	193.7		$	469.2

Year Ended December 31, 2011



	Revenues								Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	External		Intersegment			Total			Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	(in millions)
Rail Group	$	931.7	$	343.0		$	1,274.7		$	77.3		$	684.6		$	23.9		$	11.4
Construction Products Group	440.4		12.9			453.3			54.9			370.7			15.5			7.7
Inland Barge Group	548.5		—			548.5			106.4			189.2			6.4			38.0
Energy Equipment Group	454.8		18.0			472.8			8.9			392.9			18.4			10.4
Railcar Leasing and Management Services Group	551.4		0.6			552.0			254.5			4,462.1			115.7			258.6
All Other	11.5		50.3			61.8			(3.8		)	30.5			4.4			4.0
Segment Totals before Eliminations and Corporate	2,938.3		424.8			3,363.1			498.2			6,130.0			184.3			330.1
Corporate	—		—			—			(43.6		)	512.9			3.6			5.5
Eliminations – Lease subsidiary	—		(325.5		)	(325.5		)	(28.3		)	(440.3		)	—			—
Eliminations – Other	—		(99.3		)	(99.3		)	0.5			(114.1		)	(0.2		)	—
Consolidated Total	$	2,938.3	$	—		$	2,938.3		$	426.8		$	6,088.5		$	187.7		$	335.6

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Corporate assets are composed of cash and cash equivalents, short-term marketable securities, notes receivable, certain property, plant, and equipment, and other assets. Capital expenditures do not include business acquisitions. Capital expenditures for the Inland Barge Group in 2011 primarily relate to the repair and replacement of flood-damaged property, plant, and equipment at the Company's manufacturing facilities in Missouri and Tennessee. See Note 8 Property, Plant, and Equipment.

Externally reported revenues and operating profit for our Mexico operations for the years ended December 31, 2013 , 2012 , and 2011 are presented below:



	External Revenues						Operating Profit
	Year Ended December 31,						Year Ended December 31,
	2013		2012		2011		2013		2012		2011
	(in millions)
Mexico	$	133.5	$	96.4	$	123.0	$	4.0	$	0.2	$	18.4

Total assets and long-lived assets for our Mexico operations as of December 31, 2013 and 2012 are presented below:



	Total Assets		Long-Lived Assets
	December 31,
	2013	2012	2013	2012
	(in millions)
Mexico	$306.9	$285.8	$177.7	$141.2

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Note 5. Partially-Owned Leasing Subsidiaries

The Company, through its wholly-owned subsidiary, TILC, formed two subsidiaries, TRIP Holdings and RIV 2013, for the purpose of providing railcar leasing in North America. Each of TRIP Holdings and RIV 2013 are direct, partially-owned subsidiaries of TILC and are each governed by a seven -member board of representatives, two of whom are designated by TILC. TILC is the agent of each of TRIP Holdings and RIV 2013 and as such, has been delegated the authority, power, and discretion to take certain actions on behalf of the respective companies. Each of TRIP Holdings and RIV 2013 in turn has wholly-owned subsidiaries which are the owners of railcars. These wholly-owned subsidiaries are TRIP Master Funding (wholly-owned by TRIP Holdings) and Trinity Rail Leasing 2012 LLC ("TRL 2012", wholly-owned by RIV 2013). TILC is the contractual servicer for TRIP Master Funding and TRL 2012, with the authority to manage and service each entity's owned railcars. The Company's controlling interest in each of TRIP Holdings and RIV 2013 results from its combined role as both equity member and agent/servicer. The noncontrolling interest included in the accompanying consolidated balance sheets represents the non-Trinity equity interest in these partially-owned subsidiaries. The railcars owned by TRIP Master Funding were originally acquired from the Company's Rail and Leasing Groups by TRIP Rail Leasing LLC ("TRIP Leasing"), a wholly-owned subsidiary of TRIP Holdings. TRIP Master Funding acquired the railcars from TRIP Leasing in July 2011. TRIP Leasing currently owns no railcars and is not expected to acquire any railcars.

TRIP Holdings and RIV 2013, through TRIP Leasing and TRL 2012, respectively, acquired railcars from the Company's Rail and Leasing Groups funded by capital contributions from TILC and third-party equity investors, and from secured borrowings. Railcars purchased from the Company by TRL 2012 are required to be purchased at fair value as determined by TILC and approved by TRL 2012's board of representatives. The assets of each of TRIP Holdings, TRIP Master Funding, RIV 2013, and TRL 2012 may only be used to satisfy the particular subsidiary's liabilities, and the creditors of each of TRIP Holdings, TRIP Master Funding, RIV 2013, and TRL 2012 have recourse only to the particular subsidiary's assets. Each of TILC and the third-party equity investors receive distributions from TRIP Holdings and RIV 2013, when allowed, in proportion to its respective equity interests, and has an interest in the net assets of the partially-owned subsidiaries upon a liquidation event in the same proportion. TILC is paid fees for the services it provides to TRIP Master Funding and TRL 2012 and has the potential to earn certain incentive fees. With respect to RIV 2013, TILC has a commitment that expires May 2016 to provide additional equity funding for the purchase of railcars and satisfaction of certain other liabilities of RIV 2013 of up to $27.9 million as of December 31, 2013 . The third-party equity investors in RIV 2013 have a similar commitment that expires May 2016 to provide up to $63.4 million of additional equity funding. TILC and the third-party equity investors may have additional commitments to provide equity funding to RIV 2013 that expire in May 2019 contingent upon certain returns on investment in RIV 2013 and other conditions being met. Trinity has no obligation to guarantee performance under any of the partially-owned subsidiaries' (or their respective subsidiaries') debt agreements, guarantee any railcar residual values, shield any parties from losses, or guarantee minimum yields.

TRIP Holdings. In March 2013, the Company purchased an additional interest in TRIP Holdings from another equity investor for $31.7 million resulting in a reduction in the carrying amount of noncontrolling interest by $32.3 million . As a result, certain previous put/call agreements with the equity investor regarding their equity interest were terminated. In May 2013, the Company sold an interest in TRIP Holdings to certain third-party investors for a net amount of $200.3 million . Proceeds from the sale along with an additional equity contribution by TILC, were primarily used to retire the TRIP Holdings senior secured notes in their entirety. Additionally, the remaining interests of certain other equity investors were repurchased by TRIP Holdings for $52.3 million . At December 31, 2013 , the Company's carrying value of its investment in TRIP Holdings, eliminated in consolidation, was $160.2 million representing the Company's 45% ownership interest.

RIV 2013. In May 2013, the Company formed RIV 2013, contributing its investment in TRL 2012 which had been formed as a wholly-owned railcar leasing subsidiary of TILC in December 2012. In May 2013, the Company sold an interest in RIV 2013 to certain third-party investors for a net amount of $94.6 million . On July 31, 2013, TILC and the third-party investors of RIV 2013 contributed $23.4 million and $50.0 million , respectively, net of expenses, to RIV 2013 in proportion to their respective equity interests. These contributions combined with additional secured borrowings were used to purchase additional railcar equipment from TILC. In August 2013, one of the third-party investors purchased an additional interest in RIV 2013 from the remaining investors for $2.5 million . At December 31, 2013 , the Company's carrying value of its investment in RIV 2013, net of proceeds received from the sale of its previously-owned interest and eliminated in consolidation, was $44.6 million , representing the Company's 31% interest.

See Note 11 Debt regarding the debt of TRIP Holdings and RIV 2013 and their respective subsidiaries.

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Note 6. Railcar Leasing and Management Services Group

The Railcar Leasing and Management Services Group owns and operates a fleet of railcars as well as provides third-party fleet management, maintenance, and leasing services. Selected consolidating financial information for the Leasing Group is as follows:



	December 31, 2013
	Leasing Group
	Wholly- Owned Subsidiaries		Partially- Owned Subsidiaries		Manufacturing/ Corporate			Total
	(in millions)
Cash, cash equivalents, and short-term marketable securities	$	3.5	$	—	$	574.7		$	578.2
Property, plant, and equipment, net	$	2,964.6	$	1,685.1	$	670.6		$	5,320.3
Net deferred profit on railcars sold to the Leasing Group								(549.7		)
Consolidated property, plant, and equipment, net								$	4,770.6
Restricted cash	$	183.6	$	77.1	$	—		$	260.7
Debt:
Recourse	$	42.2	$	—	$	450.9		$	493.1
Less: unamortized discount	—		—		(74.1		)	(74.1		)
	42.2		—		376.8			419.0
Non-recourse	1,314.7		1,256.1		—			2,570.8
Total debt	$	1,356.9	$	1,256.1	$	376.8		$	2,989.8
Net deferred tax liabilities	$	671.9	$	—	$	(32.5	)	$	639.4



	December 31, 2012
	Leasing Group
	Wholly- Owned Subsidiaries		Partially- Owned Subsidiaries			Manufacturing/ Corporate			Total
	(in millions)
Cash and cash equivalents	$	5.7	$	—		$	567.3		$	573.0
Property, plant, and equipment, net	$	2,698.7	$	1,507.2		$	539.3		$	4,745.2
Net deferred profit on railcars sold to the Leasing Group									(446.2		)
Consolidated property, plant, and equipment, net									$	4,299.0
Restricted cash	$	165.4	$	57.8		$	—		$	223.2
Debt:
Recourse	$	94.4	$	—		$	451.2		$	545.6
Less: unamortized discount	—		—			(87.5		)	(87.5		)
	94.4		—			363.7			458.1
Non-recourse	1,404.2		1,301.5			—			2,705.7
Less: non-recourse debt owned by Trinity	—		(108.8		)	—			(108.8		)
Total debt	$	1,498.6	$	1,192.7		$	363.7		$	3,055.0
Net deferred tax liabilities	$	671.1	$	5.4		$	(120.7	)	$	555.8

See Note 5 Partially-Owned Leasing Subsidiaries and Note 11 Debt for a further discussion regarding the Company’s investment in its partially-owned leasing subsidiaries and the related indebtedness. Certain prior year balances with respect to RIV 2013 have been reclassified as pertaining to a partially-owned subsidiary to conform to the 2013 presentation. See Note 5 Partially-Owned Leasing Subsidiaries.

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	Year Ended December 31,									Percent Change
	2013			2012			2011			2013 versus 2012		2012 versus 2011
	($ in millions)
Revenues:
Leasing and management	$	586.9		$	528.5		$	492.6		11.1	%	7.3	%
Sale of railcars owned one year or less at the time of sale	58.5			118.6			59.4			*		*
Total revenues	$	645.4		$	647.1		$	552.0		(0.3	)	17.2

Operating profit:
Leasing and management	$	267.3		$	242.6		$	225.1		10.2		7.8
Railcar sales:
Railcars owned one year or less at the time of sale	9.1			24.8			13.2
Railcars owned more than one year at the time of sale	20.4			33.5			16.2
Total operating profit	$	296.8		$	300.9		$	254.5		(1.4	)	18.2

Operating profit margin:
Leasing and management	45.5		%	45.9		%	45.7		%
Railcar sales	*			*			*
Total operating profit margin	46.0			46.5			46.1

Selected expense information ⁽¹⁾ :
Depreciation	$	129.0		$	120.5		$	115.7		7.1		4.1
Maintenance	$	71.5		$	59.4		$	58.2		20.4		2.1
Rent	$	53.3		$	50.9		$	48.6		4.7		4.7
Interest:
External	$	153.5		$	161.2		$	154.4
Intercompany	3.8			13.1			6.4
Total interest expense	$	157.3		$	174.3		$	160.8		(9.8	)	8.4

* Not meaningful

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Equipment consists primarily of railcars leased by third parties. The Leasing Group purchases equipment manufactured predominantly by the Rail Group and enters into lease contracts with third parties with terms generally ranging between one and twenty years. The Leasing Group primarily enters into operating leases. Future contractual minimum rental revenues on leases are as follows:



	2014		2015		2016		2017		2018		Thereafter		Total
	(in millions)
Future contractual minimum rental revenue	$	425.2	$	359.8	$	297.0	$	232.6	$	161.4	$	274.2	$	1,750.2

Debt. The Leasing Group’s debt at December 31, 2013 consisted of both recourse and non-recourse debt. In 2009 , the Company entered into a seven -year $61.0 million term loan agreement and capital lease obligations totaling $56.6 million . The Company's term loan agreement was repaid in full in March 2013. The capital lease obligations are guaranteed by Trinity Industries, Inc. and certain subsidiaries, and secured by railcar equipment and related leases. As of December 31, 2013 , Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $1,973.2 million , excluding deferred profit, which is pledged as collateral for Leasing Group debt held by those subsidiaries, including equipment with a net book value of $47.3 million securing capital lease obligations. The net book value, excluding deferred profit, of unpledged equipment at December 31, 2013 was $904.4 million . See Note 11 Debt for the form, maturities, and descriptions of Leasing Group debt.

Partially-owned subsidiaries. Debt owed by TRIP Holdings and RIV 2013 and their respective subsidiaries is nonrecourse to Trinity and TILC. Creditors of each of TRIP Holdings and RIV 2013 and their subsidiaries have recourse only to the particular subsidiary's assets. TRIP Master Funding equipment with a net book value of $1,065.0 million , excluding deferred profit, resulting from the sale of railcars to TRIP Master Funding, is pledged as collateral for the TRIP Master Funding debt. TRL 2012 equipment with a net book value of $620.1 million , excluding deferred profit, resulting from the sale of railcars to TRL 2012, is pledged solely as collateral for the TRL 2012 secured railcar equipment notes. See Note 5 Partially-Owned Leasing Subsidiaries for a description of TRIP Holdings and RIV 2013.

Off Balance Sheet Arrangements. In prior years, the Leasing Group completed a series of financing transactions whereby railcars were sold to one or more separate independent owner trusts (“Trusts”). Each of the Trusts financed the purchase of the railcars with a combination of debt and equity. In each transaction, the equity participant in the Trust is considered to be the primary beneficiary of the Trust and therefore, the debt related to the Trust is not included as part of the consolidated financial statements. The Leasing Group, through wholly-owned, qualified subsidiaries, leased railcars from the Trusts under operating leases with terms of 22 years, and subleased the railcars to independent third-party customers under shorter term operating rental agreements. Under the terms of the operating lease agreements between the subsidiaries and the Trusts, the Leasing Group has the option to purchase at a predetermined fixed price, certain of the railcars from the Trusts in 2016 and other railcars in 2019 . The Leasing Group also has options to purchase the railcars at the end of the respective lease agreements in 2023 , 2026 , and 2027 at the then fair market value of the railcars as determined by a third party, independent appraisal. At the expiration of the operating lease agreements, the Company has no further obligations with respect to the leased railcars.

These Leasing Group subsidiaries had total assets as of December 31, 2013 of $207.5 million , including cash of $83.1 million and railcars of $86.1 million . The subsidiaries' cash, railcars, and an interest in each sublease are pledged to collateralize the lease obligations to the Trusts and are included in the consolidated financial statements of the Company. Trinity does not guarantee the performance of the subsidiaries’ lease obligations. Certain ratios and cash deposits must be maintained by the Leasing Group’s subsidiaries in order for excess cash flow, as defined in the agreements, from the lease to third parties to be available to Trinity. Future operating lease obligations of the Leasing Group’s subsidiaries as well as future contractual minimum rental revenues related to these leases due to the Leasing Group are as follows:



	2014		2015		2016		2017		2018		Thereafter		Total
	(in millions)
Future operating lease obligations of Trusts’ railcars	$	44.7	$	43.0	$	40.1	$	41.9	$	45.3	$	253.6	$	468.6
Future contractual minimum rental revenues of Trusts’ railcars	$	62.7	$	49.0	$	38.3	$	28.8	$	18.5	$	35.5	$	232.8

In each transaction, the Leasing Group has entered into a servicing and re-marketing agreement with the Trusts that requires the Leasing Group to endeavor, consistent with customary commercial practice as would be used by a prudent person, to maintain

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railcars under lease for the benefit of the Trusts. The Leasing Group also receives management fees under the terms of the agreements. In each transaction, an independent trustee for the Trusts has authority for appointment of the railcar fleet manager.

Operating Lease Obligations. Future amounts due as well as future contractual minimum rental revenues related to operating leases other than leases discussed above are as follows:



	2014		2015		2016		2017		2018		Thereafter		Total
	(in millions)
Future operating lease obligations	$	12.8	$	12.8	$	12.7	$	12.1	$	12.0	$	38.2	$	100.6
Future contractual minimum rental revenues	$	18.8	$	13.8	$	12.7	$	9.5	$	5.7	$	8.8	$	69.3

Operating lease obligations totaling $21.9 million are guaranteed by Trinity Industries, Inc. and certain subsidiaries.

In December 2013 , the Company entered into a strategic alliance with Element Financial Corporation ("Element"), a major equipment finance company in North America, to develop a diversified portfolio of up to $2.0 billion of leased railcars. Element is expected to acquire a portfolio of leased railcars primarily consisting of new railcars manufactured by the Company's Rail Group, existing railcars from TILC, as well as secondary market purchases. TILC acts as servicer of the Element-owned leased railcar fleet and receives fees accordingly. The initial sale of leased railcars with a total value of approximately $105.0 million closed in December 2013 with recorded revenue of $39.6 million while the second closing, with a total value of approximately $396.0 million , occurred in January 2014 with recorded revenue of $173.5 million . Both sales consisted of railcars from the Company's wholly-owned lease fleet.

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Note 7. Derivative Instruments

We use derivative instruments to mitigate the impact of changes in interest rates, both in anticipation of future debt issuances and to offset interest rate variability of certain floating rate debt issuances outstanding. We also use derivative instruments to mitigate the impact of changes in natural gas and diesel fuel prices and changes in foreign currency exchange rates. For derivative instruments designated as hedges, the Company formally documents the relationship between the derivative instrument and the hedged item, as well as the risk management objective and strategy for the use of the derivative instrument. This documentation includes linking the derivatives that are designated as fair value or cash flow hedges to specific assets or liabilities on the balance sheet, commitments, or forecasted transactions. At the time a derivative instrument is entered into, and at least quarterly thereafter, the Company assesses whether the derivative instrument is effective in offsetting the changes in fair value or cash flows of the hedged item. Any change in fair value resulting in ineffectiveness, as defined by accounting standards issued by the FASB, is recognized in current period earnings. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is recorded in AOCL as a separate component of stockholders' equity and reclassified into earnings in the period during which the hedge transaction affects earnings. Trinity monitors its derivative positions and the credit ratings of its counterparties and does not anticipate losses due to counterparties' non-performance. See Note 3 Fair Value Accounting for discussion of how the Company valued its commodity hedges and interest rate swaps at December 31, 2013 . See Note 11 Debt for a description of the Company's debt instruments.

Interest rate hedges



					Included in accompanying balance sheet at December 31, 2013
	Notional Amount		Interest Rate ⁽¹⁾		Liability		AOCL – loss/ (income)			Noncontrolling Interest
	(in millions, except %)
Expired hedges:
2006 secured railcar equipment notes	$	200.0	4.87	%	$	—	$	(1.6	)	$	—
Promissory notes	$	370.0	5.34	%	$	—	$	4.1		$	—
TRIP Holdings warehouse loan	$	788.5	3.60	%	$	—	$	12.9		$	15.9
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	67.2	2.62	%	$	2.1	$	0.9		$	1.1
Promissory notes	$	415.0	4.13	%	$	21.7	$	20.0		$	—


⁽¹⁾	Weighted average fixed interest rate



	Effect on interest expense-increase/(decrease)
	Year Ended December 31,									Expected effect during next twelve months ⁽¹⁾
	2013			2012			2011			Expected effect during next twelve months ⁽¹⁾
	(in millions)
Expired hedges:
2006 secured railcar equipment notes	$	(0.3	)	$	(0.3	)	$	(0.4	)	$	(0.3	)
Promissory notes	$	3.1		$	3.3		$	3.5		$	2.9
TRIP Holdings warehouse loan	$	6.1		$	6.0		$	17.4		$	5.1
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	1.8		$	2.0		$	1.1		$	1.5
Promissory notes	$	15.8		$	18.4		$	19.6		$	15.7

⁽¹⁾ Based on the fair value of open hedges as of December 31, 2013

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Between 2007 and 2009 , TRIP Holdings, as required by the TRIP Warehouse Loan, entered into interest rate swap derivatives, all of which qualified as cash flow hedges, to reduce the effect of changes in variable interest rates in the TRIP Warehouse Loan. In July 2011 , these interest rate hedges were terminated in connection with the refinancing of the TRIP Warehouse Loan. Balances included in AOCL at the date the hedges were terminated are being amortized over the expected life of the new debt with $5.1 million of additional interest expense expected to be recognized during the twelve months following December 31, 2013 . Also in July 2011 , TRIP Holdings’ wholly-owned subsidiary, TRIP Master Funding, entered into an interest rate swap derivative instrument, expiring in 2021 , with a notional amount of $94.1 million to reduce the effect of changes in variable interest rates associated with the Class A-1b notes of the TRIP Master Funding secured railcar equipment notes. The effect on interest expense is primarily a result of monthly interest settlements.

See Note 11 Debt regarding the related debt instruments.

Other Derivatives



	Effect on operating income - increase/(decrease)
	Year Ended December 31,
	2013		2012			2011
	(in millions)
Fuel hedges ⁽¹⁾
Effect of mark-to-market valuation	$	—	$	0.4		$	—
Settlements	—		—			0.4
	$	—	$	0.4		$	0.4
Foreign exchange hedges ⁽²⁾	$	—	$	(0.4	)	$	0.1


⁽¹⁾	Included in cost of revenues in the accompanying consolidated statement of operations


⁽²⁾	Included in other, net in the accompanying consolidated statement of operations

Natural gas and diesel fuel

Foreign exchange hedge

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Note 8. Property, Plant, and Equipment

The following table summarizes the components of property, plant, and equipment as of December 31, 2013 and 2012 .



	December 31, 2013			December 31, 2012
	(in millions)
Manufacturing/Corporate:
Land	$	44.2		$	37.7
Buildings and improvements	463.2			431.0
Machinery and other	832.5			745.3
Construction in progress	79.0			46.1
	1,418.9			1,260.1
Less accumulated depreciation	(748.3		)	(720.8		)
	670.6			539.3
Leasing:
Wholly-owned subsidiaries:
Machinery and other	10.3			9.6
Equipment on lease	3,509.1			3,157.5
	3,519.4			3,167.1
Less accumulated depreciation	(554.8		)	(468.4		)
	2,964.6			2,698.7
Partially-owned subsidiaries:
Equipment on lease	1,887.2			1,661.0
Less accumulated depreciation	(202.1		)	(153.8		)
	1,685.1			1,507.2

Net deferred profit on railcars sold to the Leasing Group	(549.7		)	(446.2		)
	$	4,770.6		$	4,299.0

Certain prior year balances with respect to RIV 2013 have been reclassified as pertaining to a partially-owned subsidiary to conform to the 2013 presentation. See Note 5 Partially-Owned Leasing Subsidiaries.

We lease certain equipment and facilities under operating leases. Future minimum rent expense on non-Leasing Group leases in each year is (in millions): 2014 - $5.3 ; 2015 - $3.5 ; 2016 - $2.6 ; 2017 - $1.6 ; 2018 - $0.7 ; and $1.0 thereafter. See Note 6 Railcar Leasing and Management Services Group for information related to the lease agreements, future operating lease obligations, and future minimum rent expense associated with the Leasing Group.

We did not capitalize any interest expense as part of the construction of facilities and equipment during 2013 or 2012 .

In May 2011 and May 2010 , the Company's inland barge manufacturing facilities in Missouri and Tennessee, respectively, experienced floods that resulted in significant damage to Trinity's property and temporary disruption of its production activities. The Company is insured against losses due to property damage and business interruption subject to certain deductibles. With respect to the Missouri flood, Trinity received $35.0 million in payments from its insurance carriers of which $22.7 million pertained to the replacement of or repairs to damaged property, plant, and equipment with a net book value of $5.7 million , with the remainder pertaining primarily to the reimbursement of flood-related expenses and lost production. Accordingly, the Company recognized a gain of $0.4 million in 2012 and $17.0 million in 2011 from the disposition of the Missouri flood-damaged property, plant, and equipment. With respect to the Tennessee flood, Trinity received $27.5 million in payments from its insurance carrier of which $12.6 million pertained to the replacement of or repairs to damaged property, plant, and equipment with a net book value of $2.3 million , with the remainder pertaining primarily to the reimbursement of flood-related expenses. Accordingly, the Company recognized a gain of $0.6 million in 2011 and $9.7 million in 2010 from the disposition of the Tennessee flood-damaged property, plant, and equipment.

We estimate the fair market value of properties no longer in use based on the location and condition of the properties, the fair market value of similar properties in the area, and the Company's experience selling similar properties in the past. As of December 31, 2013 , the Company had non-operating plants with a net book value of $24.3 million . Our estimated fair value of these assets exceeds their book value.

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Note 9. Goodwill

Goodwill by segment is as follows:



	December 31, 2013		December 31, 2012
	(in millions)
Rail Group	$	134.6	$	122.5
Construction Products Group	126.9		105.2
Energy Equipment Group	14.9		10.9
Railcar Leasing and Management Services Group	1.8		1.8
	$	278.2	$	240.4

As of December 31, 2013 and 2012 , the Company's annual impairment test of goodwill was completed at the reporting unit level and no additional impairment charges were determined to be necessary. As of December 31, 2013 and 2012 , Rail Group goodwill is net of a 2009 impairment charge of $325.0 million .

The net increase in the Rail Group, Construction Products Group, and the Energy Equipment Group goodwill as of December 31, 2013 is primarily due to acquisition and divestiture activity during the twelve months ended December 31, 2013 . See Note 2 Acquisitions and Divestitures.

Note 10. Warranties

The changes in the accruals for warranties for the years ended December 31, 2013, 2012, and 2011 are as follows:



	December 31, 2013			December 31, 2012			December 31, 2011
	(in millions)
Beginning balance	$	12.5		$	13.5		$	13.2
Warranty costs incurred	(5.9		)	(5.9		)	(6.3		)
Warranty originations and revisions	11.9			7.7			9.1
Warranty expirations	(3.8		)	(2.8		)	(2.5		)
Ending balance	$	14.7		$	12.5		$	13.5

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Note 11. Debt

The following table summarizes the components of debt as of December 31, 2013 and 2012 :



	December 31, 2013			December 31, 2012
	(in millions)
Corporate – Recourse:
Revolving credit facility	$	—		$	—
Convertible subordinated notes	450.0			450.0
Less: unamortized discount	(74.1		)	(87.5		)
	375.9			362.5
Other	0.9			1.2
	376.8			363.7
Leasing – Recourse:
Capital lease obligations	42.2			45.8
Term loan	—			48.6
	42.2			94.4
Total recourse debt	419.0			458.1

Leasing – Non-recourse:
Wholly-owned subsidiaries:
2006 secured railcar equipment notes	240.7			255.8
Promissory notes	396.1			424.1
2009 secured railcar equipment notes	199.0			209.2
2010 secured railcar equipment notes	326.9			341.5
TILC warehouse facility	152.0			173.6
	1,314.7			1,404.2
Partially-owned subsidiaries:
TRL 2012 secured railcar equipment notes - RIV 2013	499.3			333.8
TRIP Master Funding secured railcar equipment notes	756.8			797.7
TRIP Holdings senior secured notes:
Total outstanding	—			170.0
Less: owned by Trinity	—			(108.8		)
	—			61.2
	1,256.1			1,192.7
Total non–recourse debt	2,570.8			2,596.9
Total debt	$	2,989.8		$	3,055.0

Corporate

We have a $425.0 million unsecured revolving credit facility that matures on October 20, 2016 . As of December 31, 2013 , we had letters of credit issued under our revolving credit facility in an aggregate principal amount of $68.7 million , leaving $356.3 million available for borrowing. Other than these letters of credit, there were no borrowings under our revolving credit facility as of December 31, 2013 , or for the twelve month period then ended. Of the outstanding letters of credit as of December 31, 2013 , a total of $68.5 million is expected to expire in 2014 and the remainder in 2015 . The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew each year. Trinity’s revolving credit facility requires the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage. As of December 31, 2013 , we were in compliance with all such financial covenants. Borrowings under the credit facility bear interest at Libor plus 1.50% or prime plus 0.50% .

The Company's $450.0 million of Convertible Subordinated Notes due 2036 (“Convertible Subordinated Notes”) bear an interest rate of 3 7/8% per annum on the principal amount payable semi-annually in arrears on June 1 and December 1 of each year. In addition, commencing with the six -month period beginning June 1, 2018 and for each six -month period thereafter, we will pay contingent interest to the holders of the Convertible Subordinated Notes under certain circumstances. The Convertible Subordinated Notes mature on June 1, 2036 , unless redeemed, repurchased, or converted earlier. We may not redeem the Convertible Subordinated Notes before June 1, 2018 . On or after that date, we may redeem all or part of the Convertible Subordinated Notes for cash at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest (including any contingent interest) up to, but excluding, the redemption date . Holders of the Convertible Subordinated Notes may require us to purchase all or a portion of their notes on June 1, 2018 or upon a fundamental change. In each case, the Convertible Subordinated Notes would be purchased

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for cash at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest (including any contingent interest) to, but excluding, the purchase date.

The Convertible Subordinated Notes are recorded net of unamortized discount to reflect their underlying economics by capturing the value of the conversion option as borrowing costs. As of December 31, 2013 and 2012 , capital in excess of par value included $92.8 million related to the estimated value of the Convertible Subordinated Notes’ conversion options, in accordance with ASC 470-20. Debt discount recorded in the consolidated balance sheet is being amortized through June 1, 2018 to yield an effective annual interest rate of 8.42% based upon the estimated market interest rate for comparable non-convertible debt as of the issuance date of the Convertible Subordinated Notes. Total interest expense recognized on the Convertible Subordinated Notes for the years ended December 31, 2013 , 2012 , and 2011 , is as follows:



	Year Ended December 31,
	2013		2012		2011
	(in millions)
Coupon rate interest	$	17.4	$	17.4	$	17.4
Amortized debt discount	13.4		12.3		11.3
	$	30.8	$	29.7	$	28.7

Holders of the Convertible Subordinated Notes may convert their notes under the following circumstances: 1) if the daily closing price of our common stock is greater than or equal to 130% of the conversion price during 20 of the last 30 trading days of the preceding calendar quarter; 2) upon notice of redemption; or 3) upon the occurrence of specified corporate transactions pursuant to the terms of the Indenture. Upon conversion, the Company is required to pay cash up to the aggregate principal amount of the Convertible Subordinated Notes to be converted. Any conversion obligation in excess of the aggregate principal amount of the Convertible Subordinated Notes to be converted may be settled in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election. The conversion price, which is subject to adjustment upon the occurrence of certain events, was $50.78 per share as of December 31, 2013 . The Convertible Subordinated Notes were not subject to conversion as of December 31, 2013 . See Note 17 Earnings Per Common Share for an explanation of the effects of the Convertible Subordinated Notes on earnings per share. The Company has not entered into any derivatives transactions associated with these notes.

Wholly-owned leasing subsidiaries

In May 2006 , Trinity Rail Leasing V, L.P., a limited partnership (“TRL V”) and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC issued $355.0 million in aggregate principal amount of Secured Railcar Equipment Notes, Series 2006 -1A (the “ 2006 Secured Railcar Equipment Notes”), of which $240.7 million was outstanding as of December 31, 2013 . The 2006 Secured Railcar Equipment Notes were issued pursuant to a Master Indenture, dated May 24, 2006 , between TRL V and Wilmington Trust Company, as indenture trustee. The 2006 Secured Railcar Equipment Notes bear interest at a fixed rate of 5.90% per annum, are payable monthly, and have a final maturity of May 14, 2036 . The 2006 Secured Railcar Equipment Notes are obligations of TRL V and are non-recourse to Trinity. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL V.

In May 2008 , Trinity Rail Leasing VI LLC, a Delaware limited liability company (“TRL VI”), a limited purpose, indirect wholly-owned subsidiary of Trinity, issued $572.2 million of 30 -year promissory notes (the “Promissory Notes”) to financial institutions, of which $396.1 million was outstanding as of December 31, 2013 . The Promissory Notes are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL VI. The Promissory Notes are obligations of TRL VI and are non-recourse to Trinity. The Promissory Notes bear interest at a floating rate of one -month Libor plus a margin of 1.50% . The Libor portion of the interest rate on the Promissory Notes is fixed at 4.13% for the first seven years from the date of issuance of the Promissory Notes through interest rate swaps. The interest rate margin on the Promissory Notes will increase by 0.50% on each of the seventh and eighth anniversary dates of the issuance of the Promissory Notes, and by an additional 2.00% on the tenth anniversary date of the issuance of the Promissory Notes. The Promissory Notes may be prepaid at any time.

In November 2009 , Trinity Rail Leasing VII LLC, a Delaware limited liability company (“TRL VII”), a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $238.3 million in aggregate principal amount of Secured Railcar Equipment Notes, Series 2009 -1 (“the 2009 Secured Railcar Equipment Notes”), of which $199.0 million was outstanding as of December 31, 2013 . The 2009 Secured Railcar Equipment Notes were issued pursuant to a Master Indenture, dated November 5, 2009 between TRL VII and Wilmington Trust Company, as indenture trustee. The 2009 Secured Railcar Equipment Notes bear interest at a fixed rate of 6.66% per annum, are payable monthly, and have a final maturity date of November 16, 2039 . The 2009 Secured Railcar Equipment Notes are obligations of TRL VII and are non-recourse to Trinity. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL VII.

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In October 2010 , Trinity Rail Leasing 2010 LLC, a Delaware limited liability company ("TRL 2010 "), a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $369.2 million in aggregate principal amount of Secured Railcar Equipment Notes, Series 2010 -1 (“ 2010 Secured Railcar Equipment Notes"), of which $326.9 million was outstanding as of December 31, 2013 . The 2010 Secured Railcar Equipment Notes were issued pursuant to an Indenture, dated as of October 25, 2010 between TRL 2010 and Wilmington Trust Company, as indenture trustee. The 2010 Secured Railcar Equipment Notes bear interest at a fixed rate of 5.19% , are payable monthly, and have a stated final maturity date of October 16, 2040 . The 2010 Secured Railcar Equipment Notes are obligations of TRL 2010 and are non-recourse to Trinity. The obligations are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL 2010 .

The $475.0 million TILC warehouse loan facility, established to finance railcars owned by TILC, had $152.0 million outstanding and $323.0 million available as of December 31, 2013 . The warehouse loan is a non-recourse obligation secured by a portfolio of railcars and operating leases, certain cash reserves, and other assets acquired and owned by the warehouse loan facility. The principal and interest of this indebtedness are paid from the cash flows of the underlying leases. Advances under the facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 1.93% at December 31, 2013 . In June 2013 , the warehouse loan facility was renewed and extended through June 2015 . Amounts outstanding at maturity, absent renewal, will be payable in three installments in December 2015 , June 2016 , and December 2016 .

In 2009 , the Company entered into a seven -year $61.0 million term loan agreement and capital lease obligations totaling $56.6 million . The Company's term loan agreement was repaid in full in March 2013 . The capital lease obligations are guaranteed by the Company and secured by railcar equipment and related leases.

Partially-owned leasing subsidiaries

In June 2007 , TRIP Leasing entered into a $1.19 billion Warehouse Loan Agreement which contained a floating rate revolving facility (the “TRIP Warehouse Loan”). In July 2011 , TRIP Holdings issued $175.0 million in Senior Secured Notes (the “TRIP Holdings Senior Secured Notes”) and TRIP Master Funding, a Delaware limited liability company and limited purpose, wholly-owned subsidiary of TRIP Holdings, issued $857.0 million in Secured Railcar Equipment Notes (the “TRIP Master Funding Secured Railcar Equipment Notes”). The proceeds from the TRIP Holdings Senior Secured Notes and the TRIP Master Funding Secured Railcar Equipment Notes were primarily used by TRIP Master Funding to purchase all of the railcar equipment owned by TRIP Leasing which, in turn, repaid the TRIP Warehouse Loan in full. The TRIP Holdings Senior Secured Notes were repaid in full in May 2013 . See Note 5 Partially-Owned Leasing Subsidiaries for further explanation.

The TRIP Master Funding Secured Railcar Equipment Notes were issued pursuant to an Indenture, dated July 6, 2011 between TRIP Master Funding and Wilmington Trust Company, as indenture trustee, with a final maturity date in July 2041 . The TRIP Master Funding Secured Railcar Equipment Notes consist of three classes with the Class A-1a notes bearing interest at 4.37% , the Class A-1b notes bearing interest at Libor plus 2.50% , and the Class A-2 notes bearing interest at 6.02% , all payable monthly. The TRIP Master Funding Secured Railcar Equipment Notes are non-recourse to Trinity, TILC, and the other equity investors in TRIP Holdings and are secured by TRIP Master Funding's portfolio of railcars and operating leases thereon, its cash reserves, and all other assets owned by TRIP Master Funding. As of December 31, 2013 , there were $157.9 million , $89.3 million , and $509.6 million of Class A-1a, Class A-1b, and of Class A-2 notes outstanding, respectively.

In December 2012 , Trinity Rail Leasing 2012 LLC, a Delaware limited liability company ("TRL 2012 "), a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $145.4 million in aggregate principal amount of Series 2012 -1 Class A-1 Secured Railcar Equipment Notes (the " 2012 Class A-1 Notes") and $188.4 million in aggregate principal amount of Series 2012 -1 Class A-2 Secured Railcar Equipment Notes (the " 2012 Class A-2 Notes") and collectively with the 2012 Class A-1 Notes, the "2012 Secured Railcar Equipment Notes", of which $130.2 million and $188.4 million , respectively, were outstanding as of December 31, 2013 . The 2012 Class A-1 Notes and the 2012 Class A-2 notes were issued pursuant to an Indenture, dated as of December 19, 2012 between TRL 2012 and Wilmington Trust Company, as indenture trustee. The 2012 Class A-1 Notes bear interest at a fixed rate of 2.27% , are payable monthly, and have a stated final maturity date of January 15, 2043 . The 2012 Class A-2 Notes bear interest at a fixed rate of 3.53% , are payable monthly, and have a stated final maturity date of January 15, 2043 . In May 2013, TRL 2012 became a subsidiary of one of the Company's partially-owned subsidiaries, RIV 2013. See Note 5 Partially-Owned Leasing Subsidiaries for further explanation.

In August 2013 , TRL 2012 issued $183.4 million in aggregate principal amount of Series 2013 -1 Secured Railcar Equipment Notes pursuant to the Master Indenture between TRL 2012 and Wilmington Trust Company, as indenture trustee, with regard to the 2012 Secured Railcar Equipment Notes, of which $180.7 million was outstanding as of December 31, 2013 . The 2013 -1 Secured Railcar Equipment Notes bear interest at a fixed rate of 3.9% , are payable monthly, and have a stated final maturity date of July 15, 2043 .

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The 2012 Secured Railcar Equipment Notes and, collectively with the 2013-1 Secured Railcar Equipment Notes, the "TRL 2012 Secured Railcar Equipment Notes", are obligations of TRL 2012 and are non-recourse to Trinity, TILC, and the other equity investors in RIV 2013. The obligations are secured by TRL 2012's portfolio of railcars and operating leases thereon, its cash reserves, and all other assets owned by TRL 2012 .

The remaining principal payments under existing debt agreements as of December 31, 2013 are as follows:



	2014		2015		2016		2017		2018		Thereafter
	(in millions)
Recourse:
Corporate	$	0.2	$	0.2	$	0.2	$	0.3	$	—	$	450.0
Leasing – capital lease obligations (Note 6)	3.1		3.3		3.5		3.7		28.6		—
Non-recourse – leasing (Note 6):
2006 secured railcar equipment notes	16.9		18.6		21.9		24.0		25.4		133.9
Promissory notes	23.9		21.7		350.5		—		—		—
2009 secured railcar equipment notes	9.9		9.6		6.5		6.3		6.5		160.2
2010 secured railcar equipment notes	14.0		15.3		15.0		13.7		10.0		258.9
TILC warehouse facility - facility termination payments	—		50.7		101.3		—		—		—
TRL 2012 secured railcar equipment notes - RIV 2013	25.0		23.5		22.6		23.1		23.4		381.7
TRIP Master Funding secured railcar equipment notes	40.1		35.7		29.3		20.4		19.9		611.4
Total principal payments	$	133.1	$	178.6	$	550.8	$	91.5	$	113.8	$	1,996.1

Note 12. Other, Net

Other, net (income) expense consists of the following items:



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Foreign currency exchange transactions	$	0.3		$	(2.3	)	$	3.1
Gain on equity investments	(0.3		)	(0.4		)	(0.6		)
Other	(2.8		)	(1.6		)	1.5
Other, net	$	(2.8	)	$	(4.3	)	$	4.0

Other for the years ended December 31, 2013 , 2012 , and 2011 includes $1.7 million and $0.3 million in income and $2.4 million in expense, respectively, related to the change in fair value of certain equity repurchase agreements with an investor in TRIP Holdings. See Note 3 Fair Value Accounting and Note 5 Partially-Owned Leasing Subsidiaries.

Note 13. Income Taxes

The components of the provision for income taxes from continuing operations are as follows:



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Current:
Federal	$	141.8		$	(5.7	)	$	20.8
State	13.7			7.0			5.5
Foreign	3.1			6.4			5.4
Total current	158.6			7.7			31.7
Deferred:
Federal	44.3			126.6			62.2
State	2.3			3.2			1.3
Foreign	(0.8		)	(3.5		)	(3.0		)
Total deferred	45.8			126.3			60.5
Provision	$	204.4		$	134.0		$	92.2

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The provision for income taxes results in effective tax rates that differ from the statutory rates. The following is a reconciliation between the statutory U.S. Federal income tax rate and the Company’s effective income tax rate on income from continuing operations:



	Year Ended December 31,
	2013		2012		2011
Statutory rate	35.0	%	35.0	%	35.0	%
State taxes	2.1		2.0		2.1
Domestic production activities deduction	(1.4	)	—		—
Noncontrolling interest in partially-owned subsidiaries	(0.9	)	—		—
Tax assessments and settlements	—		(0.6	)	—
Changes in valuation allowance and reserves	(0.8	)	(1.4	)	0.4
Other, net	0.6		(0.3	)	1.1
Effective rate	34.6	%	34.7	%	38.6	%

In May 2013, TRIP Holdings and RIV 2013 elected to be treated as partnerships for income tax purposes and consequently no income tax expense has been provided with respect to income earned after this election attributable to the noncontrolling interests. See Note 5 Partially-Owned Leasing Subsidiaries for a further explanation of activities with respect to TRIP Holdings and RIV 2013.

During 2013, after the filing of its 2012 Federal income tax return, the Company determined that it would utilize previously reserved foreign tax credits on our 2013 Federal income tax return which were due to expire in 2014-2016. Accordingly, the related $6.4 million valuation allowance was reversed and recorded as an income tax benefit during 2013. During the year ended December 31, 2013 , the Company completed a review of its state tax filing positions based upon its current operational footprint. As a result of this review, we recorded a charge of $5.1 million in order to adjust our net overall deferred tax liability based upon our current state tax filing responsibilities.

Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax liabilities and assets are as follows:



	December 31,
	2013			2012
	(in millions)
Deferred tax liabilities:
Depreciation, depletion, and amortization	$	668.9		$	887.6
Derivatives	—			12.4
Accrued liabilities and other	48.3			—
Convertible debt	105.4			96.5
Total deferred tax liabilities	822.6			996.5
Deferred tax assets:
Workers compensation, pensions, and other benefits	61.3			52.4
Warranties and reserves	13.8			15.6
Equity items	33.4			81.5
Tax loss carryforwards and credits	27.5			249.7
Inventory	18.8			17.9
Accrued liabilities and other	—			3.9
Total deferred tax assets	154.8			421.0
Net deferred tax liabilities before valuation allowance	667.8			575.5
Valuation allowance	10.2			19.7
Net deferred tax liabilities before reserve for uncertain tax positions	678.0			595.2
Deferred tax assets included in reserve for uncertain tax positions	(38.6		)	(39.4		)
Adjusted net deferred tax liabilities	$	639.4		$	555.8

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Taxing authority examinations

During the year ended December 31, 2012 , we settled our audit with the Internal Revenue Service ("IRS") for the 2004-2005 tax years. As a result of closing this audit, we recognized a $3.5 million tax benefit, primarily related to favorable claims filed and approved by the IRS in the final audit settlement. Additionally, we recognized a tax benefit of $4.4 million due to the release of net tax reserves primarily as a result of certain state tax issues where the statute of limitations had lapsed.

The IRS field work for our 2006-2008 audit cycle has concluded and all issues, except for transfer pricing, have been agreed upon and tentatively settled. The transfer pricing issue has been appealed and we are working with both the U.S. and Mexican taxing authorities to coordinate taxation in a formal mutual agreement process (“MAP”). On September 30, 2013, we received the revenue agent report for the 2009-2011 audit cycle. All issues have been concluded and agreed to except for transfer pricing issues. These issues have been appealed and we have requested they be addressed in the same MAP of the 2006-2008 cycle. At this time, we cannot determine when the 2006-2008 or the 2009-2011 cycle will close and all issues formally settled.

We have various subsidiaries in Mexico that file separate tax returns and are subject to examination by taxing authorities at different times. The 2007 tax year of one of our Mexican subsidiaries is still under review for transfer pricing purposes only, and its statute of limitations remains open through the later of the resolution of the MAP or August 2017 . The remaining entities are generally open for their 2008 tax years and forward.

Our two Swiss subsidiaries, one of which is a holding company and the other of which is dormant, have been audited by the taxing authorities through 2008 and 2009 . The statute of limitations in Switzerland is generally five years from the end of the tax year, but can be extended up to 15 years in certain cases if the audit has commenced during the original five year period. We also currently have sales offices in Europe and Canada that are subject to various statutes of limitations with regard to their tax status. Generally, states’ statutes of limitations in the U.S. are open from 2003 forward due to the use of tax loss carryforwards in certain jurisdictions.

Unrecognized tax benefits

The change in unrecognized tax benefits for the years ended December 31, 2013 , 2012 , and 2011 was as follows:



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Beginning balance	$	48.7		$	52.5		$	36.8
Additions for tax positions related to the current year	4.8			4.1			3.8
Additions for tax positions of prior years	2.8			—			16.4
Reductions for tax positions of prior years	—			(1.1		)	(0.1		)
Settlements	(0.3		)	(3.4		)	(3.5		)
Expiration of statute of limitations	(1.0		)	(3.4		)	(0.9		)
Ending balance	$	55.0		$	48.7		$	52.5

Additions for tax positions related to the current year for 2013 and 2012 were amounts provided for tax positions taken for Federal, state, and Mexican income tax purposes. Additions for tax positions related to the current year for 2011 were amounts provided for tax positions previously taken in foreign jurisdictions and tax positions taken for Federal and state income tax purposes as well as deferred tax liabilities that have been reclassified to uncertain tax positions.

Additions for tax positions of prior years in the amount of $2.8 million and recorded in the current year, were for Federal, state, and Mexican tax positions taken on the prior year tax returns which the taxing authorities have previously identified. Additions for tax positions of prior years for 2011 were primarily due to Federal tax positions taken on prior year returns where the IRS proposed an adjustment that was not previously reserved. A corresponding deferred tax asset was recorded for uncertain tax positions where a future deduction will be allowed.

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The reduction in tax positions of prior years of $1.1 million for the twelve months ended December 31, 2012 , was primarily related to new guidance issued in March 2012 by the IRS regarding the capitalization of fixed assets as well as state taxes. Settlements during the twelve months ended December 31, 2013 relate to settled positions with the IRS for one of our subsidiaries as well as settled positions with Mexican taxing authorities in the settlement of the 2003 exam. Settlements during 2012 primarily related to the settlement of our 2004-2005 IRS audit as well as the related impact on state tax returns. Settlements during 2011 primarily related to an audit of a separate tax return of our Swiss subsidiary. The expiration of statute of limitations relates to state taxes where the statute of limitations has closed.

The total amount of unrecognized tax benefits including interest and penalties at December 31, 2013 and 2012 , that would affect the Company’s overall effective tax rate if recognized was $13.8 million and $13.2 million , respectively. There is a reasonable possibility that unrecognized Federal and state tax benefits will decrease by $3.6 million by December 31, 2014 due to settlements and lapses in statutes of limitations for assessing tax. During 2013, we entered into an agreement with the IRS to extend the statute of limitations to assess tax on our 2006-2008 tax years. Thus, items that were previously expected to settle during 2013 are now expected to settle during 2014 .

Trinity accounts for interest expense and penalties related to income tax issues as income tax expense. Accordingly, interest expense and penalties associated with an uncertain tax position are included in the income tax provision. The total amount of accrued interest and penalties as of December 31, 2013 and 2012 was $10.8 million and $10.3 million , respectively. Income tax expense for the years ended December 31, 2013 , 2012 , and 2011 included an increase of $0.5 million , a decrease of $3.0 million , and an increase of $2.1 million , respectively, with regard to interest expense and penalties related to uncertain tax positions.

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Note 14. Employee Retirement Plans

The Company sponsors defined benefit plans and defined contribution profit sharing plans that provide retirement income and death benefits for eligible employees. The annual measurement date of the benefit obligations, fair value of plan assets, and funded status is December 31.

Actuarial Assumptions



	Year Ended December 31,
	2013	2012	2011
Assumptions used to determine benefit obligations at the annual measurement date were:
Obligation discount rate	5.22%	4.25%	5.40%
Compensation increase rate	4.00%	4.00%	3.00%
Assumptions used to determine net periodic benefit costs were:
Obligation discount rate	4.25%	5.40%	5.90%
Long-term rate of return on plan assets	7.75%	7.75%	7.75%
Compensation increase rate	4.00%	3.00%	3.00%

The obligation discount rate assumption is determined by deriving a single discount rate from a theoretical settlement portfolio of high quality corporate bonds sufficient to provide for the plans' projected benefit payments. The expected long-term rate of return on the plans' assets is an assumption reflecting the anticipated weighted average rate of earnings on the portfolio over the long-term. To arrive at this rate, we developed estimates based upon the anticipated performance of the plans' assets. The compensation increase rate pertains solely to the pension plan of the Company's Inland Barge segment as the accrued benefits of the Company's remaining pension plans were frozen in 2009.

Components of Net Retirement Cost



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Expense Components
Service cost	$	1.1		$	0.9		$	0.8
Interest	18.5			19.4			19.6
Expected return on plan assets	(26.6		)	(22.9		)	(22.8		)
Amortization of actuarial loss	4.9			3.2			1.8
Prior service cost	0.1			0.1			0.1
Defined benefit expense	(2.0		)	0.7			(0.5		)
Profit sharing	12.3			11.9			9.3
Net expense	$	10.3		$	12.6		$	8.8

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Obligations and Funded Status



	Year Ended December 31,
	2013			2012
	(in millions)
Accumulated Benefit Obligations	$	392.1		$	442.5
Projected Benefit Obligations:
Beginning of year	$	442.5		$	364.8
Service cost	1.1			0.9
Interest	18.5			19.4
Benefits paid	(15.8		)	(13.3		)
Actuarial (gain)/loss	(54.2		)	70.7
End of year	$	392.1		$	442.5
Plans' Assets:
Beginning of year	$	340.1		$	290.6
Actual return on assets	56.0			45.5
Employer contributions	18.9			17.3
Benefits paid	(15.8		)	(13.3		)
End of year	$	399.2		$	340.1

Consolidated Balance Sheet Components:
Other assets	$	17.8		$	—
Accrued liabilities	(10.7		)	(102.4		)
Net funded status	$	7.1		$	(102.4	)
Percent of projected benefit obligations funded	101.8		%	76.9		%

No ne of the plans' assets are expected to be returned to us during the year ending December 31, 2014 .

Amounts Recognized in Other Comprehensive Income (Loss)



	Year Ended December 31,
	2013		2012			2011
	(in millions)
Actuarial gain (loss)	$	83.7	$	(48.1	)	$	(47.3	)
Amortization of actuarial loss	4.9		3.2			1.7
Amortization of prior service cost	0.1		0.1			0.1
Total before income taxes	88.7		(44.8		)	(45.5		)
Income tax expense (benefit)	32.9		(16.7		)	(16.9		)
Net amount recognized in other comprehensive income (loss)	$	55.8	$	(28.1	)	$	(28.6	)

Included in AOCL at December 31, 2013 were the following amounts that have not been recognized in net periodic pension cost: prior service cost of $0.1 million ( $0.1 million net of related income taxes) and unrecognized actuarial losses of $68.3 million ( $42.9 million net of related income taxes).

Actuarial loss included in AOCL and expected to be recognized in net periodic pension cost for the year ended December 31, 2014 is $1.3 million ( $0.8 million net of related income taxes).

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Plan Assets

The estimated fair value of the plans' assets at December 31, 2013 and 2012 , indicating input levels used to determine fair value, and the range of target asset allocations are as follows:



	Target Allocation	December 31, 2013		December 31, 2012
Cash and cash equivalents		2	%	1	%
Equity securities	60-80%	73		73
Debt securities	20-40%	25		26
Total		100	%	100	%



	Fair Value Measurement as of December 31, 2013
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	7.0	$	—	$	—	$	7.0
Common trust funds	—		392.2		—		392.2
	$	7.0	$	392.2	$	—	$	399.2



	Fair Value Measurement as of December 31, 2012
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	3.3	$	—	$	—	$	3.3
Common trust funds	—		336.8		—		336.8
	$	3.3	$	336.8	$	—	$	340.1

The Company's pension plan investment strategies have been developed as part of a comprehensive asset/liability management process that considers the relationship between both the assets and liabilities of the plans. These strategies consider not only the expected risk and returns on the plans' assets, but also the actuarial projections of liabilities, projected contributions, and funded status. The equity allocation is heavily weighted toward U.S. equities. There is also a lesser exposure to international equities and domestic real estate investment trusts. The fixed income allocation is weighted toward domestic long duration bonds. There is also a lesser exposure to U.S. high yield and emerging market sovereign debt. This asset mix is designed to meet the longer-term obligations of the plans as projected by actuarial studies.

The principal pension investment strategies include asset allocation and active asset management within approved guidelines. The range of target asset allocations has been determined after giving consideration to the expected returns of each asset category, the expected performance of each asset category, the volatility of the asset returns over time, and the complementary nature of the asset mix within the portfolio. Each asset category is managed by external money managers with the objective of generating returns that exceed market-based benchmarks.

The pension plans' assets are valued at fair value. The following is a description of the valuation methodologies used in determining fair value, including the general classification of such instruments pursuant to the valuation hierarchy as described further in Note 3 Fair Value Accounting.

Temporary cash investments - These investments consist of U.S. dollars held in master trust accounts with the trustee. These temporary cash investments are classified as Level 1 instruments.

Common trust funds - Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Holdings of common trust funds are classified as Level 2 investments.

Cash Flows

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Benefit payments for the Company's defined benefit plans expected to be paid during the next ten years are as follows:



	Years ending December 31,
	(in millions)
2014	$	17.0
2015	18.1
2016	19.3
2017	20.5
2018	21.7
2019-2023	127.9

Participants in the Pension Plans are eligible to receive future retirement benefits through a company-funded annual retirement contribution provided through the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates. The contribution ranges from one to three percent of eligible compensation based on service. Both the annual retirement contribution and the company matching contribution are discretionary, requiring board approval, and are made annually with the investment of the funds directed by the participants.

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Note 15. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss for the twelve months ended December 31, 2013 , 2012 , and 2011 are as follows:



	Currency translation adjustments			Unrealized loss on derivative financial instruments			Net actuarial gains/(losses) of defined benefit plans			Accumulated Other Comprehensive Loss
	(in millions)
Balances at December 31, 2010	$	(17.1	)	$	(36.3	)	$	(42.1	)	$	(95.5	)
Other comprehensive loss before reclassifications	—			(3.9		)	(29.8		)	(33.7		)
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $-, $2.3, $0.6, and $2.9	—			4.1			1.2			5.3
Less: noncontrolling interest	—			(0.1		)	—			(0.1		)
Other comprehensive income (loss)	—			0.1			(28.6		)	(28.5		)
Reclassification of purchase of additional interest in TRIP Holdings	—			(15.5		)	—			(15.5		)
Tax expense allocation related to TRIP Holdings unrealized loss on derivative financial instruments	—			5.5			—			5.5
Balances at December 31, 2011	(17.1		)	(46.2		)	(70.7		)	(134.0		)
Other comprehensive income (loss) before reclassifications	—			7.2			(30.3		)	(23.1		)
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $0.4, $3.2, $1.1, and $4.7	0.6			5.8			2.2			8.6
Less: noncontrolling interest	—			(1.6		)	—			(1.6		)
Other comprehensive income (loss)	0.6			11.4			(28.1		)	(16.1		)
Balances at December 31, 2012	(16.5		)	(34.8		)	(98.8		)	(150.1		)
Other comprehensive income before reclassifications	—			0.8			52.7			53.5
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $-, $8.7, $1.9, and $10.6	—			18.1			3.1			21.2
Less: noncontrolling interest	—			(4.2		)	—			(4.2		)
Other comprehensive income	—			14.7			55.8			70.5
Sale of interests in partially-owned leasing subsidiaries	—			13.2			—			13.2
Repurchase of interests in partially-owned leasing subsidiary	—			(11.8		)	—			(11.8		)
Balances at December 31, 2013	$	(16.5	)	$	(18.7	)	$	(43.0	)	$	(78.2	)

See Note 7 Derivative Instruments for information on the reclassification of amounts in accumulated other comprehensive loss into earnings. Reclassifications of unrealized before-tax losses on derivative financial instruments are included in interest expense in the consolidated statements of operations. Approximately $4.0 million , $2.7 million , and $1.5 million of the before-tax reclassification of net actuarial gains/(losses) of defined benefit plans are included in cost of revenues with the remainder included in selling, engineering, and administrative expenses in the consolidated statements of operations for the years ended December 31, 2013 , 2012 , and 2011 , respectively.

Note 16. Stock-Based Compensation

The Company's 2004 Second Amended and Restated Stock Option and Incentive Plan (the "Plan”) provides for awarding 7,600,000 (adjusted for stock splits) shares of common stock plus (i) shares covered by forfeited, expired, and canceled options granted under prior plans; and (ii) shares tendered as full or partial payment for the purchase price of an award or to satisfy tax withholding obligations. At December 31, 2013 , a total of 1,939,736 shares were available for issuance. The Plan provides for the granting of nonqualified and incentive stock options having maximum ten -year terms to purchase common stock at its market value on the award date; stock appreciation rights based on common stock fair market values with settlement in common stock or cash; restricted stock awards; restricted stock units; and performance awards with settlement in common stock or cash on achievement of specific business objectives. Under previous plans, nonqualified and incentive stock options, restricted shares, and

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restricted stock units were granted at their fair market values. Options become exercisable in various percentages over periods ranging up to five years.

The cost of employee services received in exchange for awards of equity instruments are referred to as share-based payments and are based on the grant date fair-value of those awards. Stock-based compensation includes compensation expense, recognized over the applicable vesting periods, for both new share-based awards and share-based awards granted prior to, but not yet vested, as of January 1, 2006. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options granted to employees. Stock-based compensation totaled $44.5 million , $28.3 million , and $23.5 million for the years ended December 31, 2013 , 2012 , and 2011 , respectively.

The income tax benefit related to stock-based compensation expense was $15.6 million , $6.4 million , and $10.0 million for the years ended December 31, 2013 , 2012 , and 2011 , respectively. The Company has presented excess tax benefits from the exercise of stock-based compensation awards as a financing activity in the consolidated statements of cash flows.

Stock Options

Expense related to stock options issued to eligible employees under the Plan is recognized over their vesting period on a straight- line basis. Stock options generally vest over five years and have contractual terms of ten years.



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)	Aggregate Intrinsic Value
						(in millions)
Options outstanding at December 31, 2012	233,985		$	16.78
Granted	—		—
Exercised	(152,783	)	$	16.23
Cancelled	—		—
Options outstanding at December 31, 2013	81,202		$	17.80	3.3	$3.0

Options exercisable:
December 31, 2012	233,985		$	16.78	4.1	$4.5
December 31, 2013	81,202		$	17.80	3.3	$3.0

At December 31, 2013 , there was no unrecognized compensation expense related to stock options. The intrinsic value of options exercised totaled $4.4 million , $6.6 million , and $3.6 million during fiscal years 2013 , 2012 , and 2011 , respectively.

Restricted Stock

Restricted share awards consist of restricted stock, restricted stock units, and performance units. Restricted stock and restricted stock units generally vest for periods ranging from one to fifteen years from the date of grant. Certain restricted stock and restricted stock units vest in their entirety upon the employee's retirement from the Company, the employee's reaching the age of 65 , or when the employee's age plus years of vested service equal 80 . Restricted stock units issued to non-employee directors under the Plan vest on the grant date or on the first business day immediately preceding the next Annual Meeting of Stockholders and are released upon completion of the directors' service to the Company. Expense related to restricted stock and restricted stock units issued to eligible employees under the Plan is recognized ratably over the vesting period or to the date on which retirement eligibility is achieved, if sh orter. Performance units are granted to employees based upon a target level, however, depending upon the achievement of certain specified goals during the performance period, performance units may be adjusted to a level ranging between 0% and 200% of the target level. The performance units vest up on certification by the Human Resources Committee of the Board of Directors of the achievement of the specified performance goals. Expense related to performance units is recognized ratably from their award date to the end of the performance period, generally either two or three years.



	Number of Restricted Share Awards		Weighted Average Fair Value per Award
Restricted share awards outstanding at December 31, 2012	3,301,371		$	27.82
Granted	1,435,653		41.52
Vested	(729,782	)	25.95
Forfeited	(102,190	)	30.02
Restricted share awards outstanding at December 31, 2013	3,905,052		$	32.99

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At December 31, 2013 , unrecognized compensation expense related to restricted share awards totaled $86.9 million which will be recognized over a weighted average period of 3.8 years. The total fair value of shares vested and released during fiscal years 2013 , 2012 , and 2011 was $29.9 million , $16.9 million , and $23.3 million , respectively. The weighted average fair value of restricted share awards granted during 2013 , 2012 , and 2011 was $41.52 , $29.44 , and $34.21 per share, respectively.

Note 17. Earnings Per Common Share

Basic net income attributable to Trinity Industries, Inc. per common share is computed by dividing net income attributable to Trinity remaining after allocation to unvested restricted shares by the weighted average number of basic common shares outstanding for the period. Except when the effect would be antidilutive, the calculation of diluted net income attributable to Trinity per common share includes 1) the net impact of unvested restricted shares and shares that could be issued under outstanding stock options and 2) the incremental shares calculated by dividing the value of the conversion obligation in excess of the Convertible Subordinated Notes' aggregate principal amount by the average price of the Company's common stock during the period. The effect of the Convertible Subordinated Notes was antidilutive for the years ended December 31, 2013 , 2012 , and 2011 . See Note 11 Debt for further explanation of the Company's Convertible Subordinated Notes. Total weighted average restricted shares and antidilutive stock options were 3.5 million shares, 3.1 million shares, and 3.0 million shares, for the years ended December 31, 2013 , 2012 , and 2011 , respectively.

The computation of basic and diluted net income attributable to Trinity Industries, Inc. follows.



	Year Ended December 31, 2013
	(in millions, except per share amounts)
	Income (Loss)			Average Shares	EPS
Net income from continuing operations	$	386.1
Less: net income from continuing operations attributable to noncontrolling interest	16.9
Net income from continuing operations attributable to Trinity Industries, Inc.	369.2
Unvested restricted share participation	(12.0		)
Net income from continuing operations attributable to Trinity Industries, Inc. – basic	357.2			76.4	$	4.68
Effect of dilutive securities:
Stock options	—			0.1
Net income from continuing operations attributable to Trinity Industries, Inc. – diluted	$	357.2		76.5	$	4.67

Net income from discontinued operations, net of taxes	$	6.3
Unvested restricted share participation	(0.2		)
Net income from discontinued operations, net of taxes – basic	6.1			76.4	$	0.08
Effect of dilutive securities:
Stock options	—			0.1
Net income from discontinued operations, net of taxes – diluted	$	6.1		76.5	$	0.08

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	Year Ended December 31, 2012
	(in millions, except per share amounts)
	Income (Loss)			Average Shares	EPS
Net income from continuing operations	$	251.9
Less: net loss from continuing operations attributable to noncontrolling interest	(1.5		)
Net income from continuing operations attributable to Trinity Industries, Inc.	253.4
Unvested restricted share participation	(7.7		)
Net income from continuing operations attributable to Trinity Industries, Inc. – basic	245.7			77.3	$	3.18
Effect of dilutive securities:
Stock options	—			0.2
Net income from continuing operations attributable to Trinity Industries, Inc. – diluted	$	245.7		77.5	$	3.17

Net income from discontinued operations, net of taxes	$	1.8
Unvested restricted share participation	(0.1		)
Net income from discontinued operations, net of taxes – basic	1.7			77.3	$	0.02
Effect of dilutive securities:
Stock options	—			0.2
Net income from discontinued operations, net of taxes – diluted	$	1.7		77.5	$	0.02



	Year Ended December 31, 2011
	(in millions, except per share amounts)
	Income (Loss)			Average Shares	EPS
Net income from continuing operations	$	146.8
Less: net income from continuing operations attributable to noncontrolling interest	3.5
Net income from continuing operations attributable to Trinity Industries, Inc.	143.3
Unvested restricted share participation	(5.0		)
Net income from continuing operations attributable to Trinity Industries, Inc. – basic	138.3			77.5	$	1.78
Effect of dilutive securities:
Stock options	—			0.3
Net income from continuing operations attributable to Trinity Industries, Inc. – diluted	$	138.3		77.8	$	1.78

Net loss from discontinued operations, net of taxes	$	(1.1	)
Unvested restricted share participation	—
Net loss from discontinued operations, net of taxes – basic	(1.1		)	77.5	$	(0.01	)
Effect of dilutive securities:
Stock options	—			0.3
Net loss from discontinued operations, net of taxes – diluted	$	(1.1	)	77.8	$	(0.01	)

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Note 18. Commitments and Contingencies

Highway Products Litigation

As previously reported, on January 28, 2013, the Company was advised that the United States filed a “Notice of Election to Decline Intervention” in a False Claims Act (Qui Tam) complaint filed under seal on March 6, 2012 in the United States District Court for the Eastern District of Texas, Marshall Division styled JOSHUA HARMAN, on behalf of the UNITED STATES OF AMERICA, PLAINTIFF/Relator (“Mr. Harman”) v. TRINITY INDUSTRIES, INC., DEFENDANT, Case 2:12-cv-00089-JRG. Although the Company did not receive service of process with respect to the Original Complaint, the Company was served with Mr. Harman's Amended Complaint on May 17, 2013. Mr. Harman alleges that the Company presented false or fraudulent claims, records or statements to the United States to obtain payment or approval related to the Company's ET-Plus guardrail end-terminal, and seeks damages equaling the cost to recall and replace all installations of the ET-Plus trebled, plus civil penalties, costs, and interest. The Company notes that since its introduction in 2000, including all improvement modifications thereafter, the ET-Plus has satisfied the testing criteria required by the governing National Cooperative Highway Research Program Report 350 and the product approval requirements of the Federal Highway Administration. The Company intends to vigorously defend against Mr. Harman's allegations which will likely result in certain legal expenses. We do not believe that a loss is probable nor can a range of losses be determined. Accordingly, no accrual or range of loss has been included in the accompanying consolidated financial statements.

Train Derailment

The Company has been named as a respondent in litigation filed July 15, 2013 in Superior Court, Province of Quebec, District of Saint-Francois, styled Yannick Gagne and Guy Ouellet vs. Rail World, Inc., et al . The Company has also been named as a defendant in multiple cases filed by the estates of decedents beginning August 14, 2013 in the Circuit Court of Cook County, Illinois. These cases seek damages for alleged wrongful death and property damage arising from the July 2013 derailment in Lac-Mégantic, Quebec, of a unit train transporting certain types of crude oil. The litigation filed in Quebec is seeking “class” status which, if certified, could lead to multiple individuals and business entities becoming class members. The Company’s tank car manufacturing subsidiary manufactured 35 of the 72 tank railcars involved in the derailment. A partially-owned subsidiary of the Company owned and leased to a third party 13 of the railcars involved in the incident, which lessee is also named as a defendant in the Province of Quebec litigation. The Company could be named in similar litigation involving other affected plaintiffs, but the ultimate number of claims and the jurisdiction in which such claims are filed may vary. We do not believe at this time that a loss is probable nor can a range of losses be determined. Accordingly, no accrual or range of loss has been included in the accompanying consolidated financial statements.

Railworthiness Directive

As previously reported, in 2011 the Company received the approval of the Federal Railroad Administration to implement a voluntary recertification of 948 tank railcars owned or managed by the Company’s wholly-owned, railcar leasing subsidiary and used in transporting poison inhalation hazard (“PIH”) materials. The recertification process, having been completed for over 90% of the tank railcars as of December 31, 2013 , is progressing and being performed in conjunction with the normal three to five year, federally mandated inspection cycle for tank railcars in PIH service. Maintenance costs associated with this recertification process are expensed as incurred. The additional costs estimated to be incurred for compliance with the directive are not expected to be significant.

Other Matters

As previously reported, Trinity Structural Towers, Inc., a wholly-owned subsidiary of the Company, is in litigation with a structural wind towers customer for the customer’s breach of a long-term supply contract for the manufacture of towers. While the customer partially performed the contract, it ultimately defaulted on its purchase obligation and did not remedy such default following written notice.

The Company is involved in claims and lawsuits incidental to our business arising from various matters including product warranty, personal injury, environmental issues, workplace laws, and various governmental regulations. The Company evaluates its exposure to such claims and suits periodically and establishes accruals for these contingencies when a range of loss can be reasonably estimated. The range of reasonably possible losses for such matters, taking into consideration our rights in indemnity and recourse to third parties is $9.4 million to $30.1 million . At December 31, 2013 , total accruals of $17.8 million , including environmental and workplace matters described below, are included in accrued liabilities in the accompanying consolidated balance sheet. The Company believes any additional liability would not be material to its financial position or results of operations.

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Trinity is subject to remedial orders and Federal, state, local, and foreign laws and regulations relating to the environment and the workplace. The Company has reserved $8.3 million to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such matters, taking into account currently available information and our contractual rights to indemnification and recourse to third parties. However, estimates of liability arising from future proceedings, assessments, or remediation are inherently imprecise. Accordingly, there can be no assurance that we will not become involved in future litigation or other proceedings involving the environment and the workplace or, if we are found to be responsible or liable in any such litigation or proceeding, that such costs would not be material to the Company. We believe that we are currently in substantial compliance with environmental and workplace laws and regulations.

Other Commitments

Non-cancelable purchase obligations amounted to $694.9 million as of December 31, 2013 , of which $577.8 million is for the purchase of raw materials and components, principally by the Rail, Inland Barge, and Energy Equipment Groups.

Note 19. Selected Quarterly Financial Data (Unaudited)



	Three Months Ended
	March 31, 2013		June 30, 2013			September 30, 2013		December 31, 2013
	(in millions except per share data)
Revenues:
Manufacturing	$	798.5	$	896.5		$	959.7	$	1,065.2
Leasing	134.4		169.6			150.6		190.8
	932.9		1,066.1			1,110.3		1,256.0
Operating costs:
Costs of revenues:
Manufacturing	641.2		726.0			767.0		856.7
Leasing	69.9		86.2			69.3		106.0
	711.1		812.2			836.3		962.7
Selling, engineering, and administrative expenses	69.0		71.5			70.6		80.2
Gain on disposition of property, plant, and equipment	6.7		1.0			2.2		11.3
Operating profit	159.5		183.4			205.6		224.4
Net income from continuing operations	72.2		89.2			105.8		118.9
Discontinued operations, net of tax	6.6		(1.0		)	0.3		0.4
Net income	78.8		88.2			106.1		119.3
Net income attributable to Trinity Industries, Inc.	79.1		84.0			99.6		112.8
Net income (loss) attributable to Trinity Industries, Inc. per common share:
Basic:
Continuing operations	$	0.91	$	1.07		$	1.26	$	1.43
Discontinued operations	0.08		(0.01		)	—		0.01
	$	0.99	$	1.06		$	1.26	$	1.44
Diluted:
Continuing operations	$	0.91	$	1.07		$	1.26	$	1.43
Discontinued operations	0.08		(0.01		)	—		0.01
	$	0.99	$	1.06		$	1.26	$	1.44

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	Three Months Ended
	March 31, 2012			June 30, 2012		September 30, 2012		December 31, 2012
	(in millions except per share data)
Revenues:
Manufacturing	$	754.1		$	803.2	$	748.0	$	862.2
Leasing	142.1			192.3		159.3		150.7
	896.2			995.5		907.3		1,012.9
Operating costs:
Costs of revenues:
Manufacturing	656.8			680.2		643.8		720.4
Leasing	73.4			112.1		84.3		80.5
	730.2			792.3		728.1		800.9
Selling, engineering, and administrative expenses	50.7			53.0		55.8		64.6
Gain on disposition of property, plant, and equipment	7.4			2.3		17.3		11.5
Operating profit	122.7			152.5		140.7		158.9
Net income from continuing operations	52.4			66.1		62.4		71.0
Discontinued operations, net of tax	(0.1		)	1.4		0.7		(0.2		)
Net income	52.3			67.5		63.1		70.8
Net income attributable to Trinity Industries, Inc.	52.9			67.8		63.2		71.3
Net income attributable to Trinity Industries, Inc. per common share:
Basic:
Continuing operations	$	0.66		$	0.82	$	0.79	$	0.90
Discontinued operations	—			0.02		0.01		—
	$	0.66		$	0.84	$	0.80	$	0.90
Diluted:
Continuing operations	$	0.66		$	0.82	$	0.79	$	0.90
Discontinued operations	—			0.02		0.01		—
	$	0.66		$	0.84	$	0.80	$	0.90

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures.

The Company maintains controls and procedures designed to ensure that it is able to collect the information it is required to disclose in the reports it files with the SEC, and to process, summarize, and disclose this information within the time periods specified in the rules of the SEC. The Company's Chief Executive and Chief Financial Officers are responsible for establishing and maintaining these procedures and, as required by the rules of the SEC, evaluating their effectiveness. Based on their evaluation of the Company's disclosure controls and procedures which took place as of the end of the period covered by this report, the Chief Executive and Chief Financial Officers believe that these procedures are effective to ensure that the Company is able to collect, process, and disclose the information it is required to disclose in the reports it files with the SEC within the required time periods.

During the three months ended December 31, 2013, there have been no changes in the Company’s internal controls over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal controls over financial reporting.

Management's Report on Internal Control over Financial Reporting.

Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance, as opposed to absolute assurance, of achieving their internal control objectives.

Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2013 . In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on our assessment, we believe that, as of December 31, 2013 , the Company's internal control over financial reporting was effective based on those criteria.

The effectiveness of internal control over financial reporting as of December 31, 2013 , has been audited by Ernst & Young LLP, the independent registered public accounting firm who also audited the Company's consolidated financial statements. Ernst & Young LLP's attestation report on effectiveness of the Company's internal control over financial reporting follows:

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Trinity Industries, Inc.

We have audited Trinity Industries, Inc. and Subsidiaries' internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commissi on (1992 Framework) (the COSO criteria). Trinity Industries, Inc. and Subsidiaries' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Trinity Industries, Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Trinity Industries, Inc. and Subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, cash flows, and stockholders' equity for each of the three years in the period ended December 31, 2013 of Trinity Industries, Inc. and Subsidiaries and our report dated February 20, 2014 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Dallas, Texas

February 20, 2014

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Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Information regarding the directors of the Company is incorporated by reference to the information set forth under the caption “Proposal 1 - Election of Directors” in the Company's Proxy Statement for the 2014 Annual Meeting of Stockholders (the “ 2014 Proxy Statement”). Information relating to the executive officers of the Company is set forth in Part I of this report under the caption “Executive Officers and Other Corporate Officers of the Company.” Information relating to the Board of Directors' determinations concerning whether at least one of the members of the Audit Committee is an “audit committee financial expert” as that term is defined under Item 407 (d)(5) of Regulation S-K is incorporated by reference to the information set forth under the caption “Corporate Governance - Board Committees - Audit Committee” in the Company's 2014 Proxy Statement. Information regarding the Company's Audit Committee is incorporated by reference to the information set forth under the caption “Corporate Governance - Board Committees - Audit Committee” in the Company's 2014 Proxy Statement. Information regarding compliance with Section 16(a) of the Securities and Exchange Act of 1934 is incorporated by reference to the information set forth under the caption “Additional Information - Section 16(a) Beneficial Ownership Reporting Compliance” in the Company's 2014 Proxy Statement.

The Company has adopted a Code of Business Conduct and Ethics that applies to all of its directors, officers, and employees. The Code of Business Conduct and Ethics is on the Company's website at www.trin.net under the caption “Investor Relations/ Governance.” The Company intends to post any amendments or waivers for its Code of Business Conduct and Ethics to the Company's website at www.trin.net to the extent applicable to an executive officer or director of the Company.

Item 11. Executive Compensation.

Information regarding compensation of executive officers and directors is incorporated by reference to the information set forth under the caption “Executive Compensation” in the Company's 2014 Proxy Statement. Information concerning compensation committee interlocks and insider participation is incorporated by reference to the information set forth under the caption “Corporate Governance - Compensation Committee Interlocks and Insider Participation” in the Company's 2014 Proxy Statement. Information about the compensation committee report is incorporated by reference to the information set forth under the caption “Executive Compensation - Human Resources Committee Report” in the Company's 2014 Proxy Statement.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the Company's 2014 Proxy Statement, under the caption “Security Ownership - Security Ownership of Certain Beneficial Owners and Management.”

The following table sets forth information about Trinity common stock that may be issued under all of Trinity's existing equity compensation plans as of December 31, 2013 .

Equity Compensation Plan Information

	(a)		(b)		(c)
	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category:
Equity compensation plans approved by security holders:
Stock Options	81,202		$	17.80
Restricted stock units and performance units	1,300,113	1	$	—
	1,381,315				1,939,736
Equity compensation plans not approved by security holders	—	2			—
Total	1,381,315				1,939,736

____________

¹ Includes 349,703 shares of common stock issuable upon the vesting and conversion of restricted stock units and 950,410 shares of common stock issuable upon the vesting and conversion of performance units. The restricted stock units and performance units do not have an exercise price. The performance units are granted to employees based upon a target level, however, depending upon the achievement of certain specified goals during the performance period, performance units may be adjusted to a level ranging between 0% and 200% of the target level.

² Excludes information regarding the Trinity Deferred Plan for Director Fees. This plan permits the deferral of the payment of the annual retainer fee and board and committee meeting fees. At the election of the participant, the deferred fees may be converted into phantom stock units with a fair market value equal to the value of the fees deferred, and such phantom stock units are credited to the director's account (along with the amount of any dividends or stock distributions). At the time a participant ceases to be a director, cash will be distributed to the participant. At December 31, 2013 , there were 113,826 phantom stock units credited to the accounts of participants. Also excludes information regarding the Trinity Industries Supplemental Profit Sharing Plan (“Supplemental Plan”) for certain of its highly compensated employees. Information about the Supplemental Plan is incorporated herein by reference from the Company's 2014 Proxy Statement, under the caption “Executive Compensation - Post-employment Benefits.” At December 31, 2013 , there were 43,828 stock units credited to the accounts of participants under the Supplemental Plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Information regarding certain relationships and related person transactions is incorporated by reference to the information set forth under the captions “Corporate Governance-Compensation Committee Interlocks and Insider Participation” and “Transactions with Related Persons” in the Company's 2014 Proxy Statement. Information regarding the independence of directors is incorporated by reference to the information set forth under the captions “Corporate Governance-Independence of Directors” in the Company's 2014 Proxy Statement.

Item 14. Principal Accountant Fees and Services.

Information regarding principal accountant fees and services is incorporated by reference to the information set forth under the captions “Fees of Independent Registered Public Accounting Firm for Fiscal Years 2013 and 2012 ” in the Company's 2014 Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) (1) Financial Statements.

See Item 8.

(2) Financial Statement Schedule.

All schedules are omitted because they are not required, not significant, not applicable or the information is shown in the financial statements or the notes to consolidated financial statements.

(3) Exhibits.

See Index to Exhibits for a listing of Exhibits which are filed herewith or incorporated herein by reference to the location indicated.

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EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:


1)	Post-Effective Amendment No. 3 to the Registration Statement (Form S-8, No. 2-64813),


2)	Post-Effective Amendment No. 1 to the Registration Statement (Form S-8, No. 33-10937),


3)	Registration Statement (Form S-8, No. 33-35514),


4)	Registration Statement (Form S-8, No. 33-73026),


5)	Registration Statement (Form S-8, No. 333-77735),


6)	Registration Statement (Form S-8, No. 333-91067),


7)	Registration Statement (Form S-8, No. 333-85588),


8)	Registration Statement (Form S-8, No. 333-85590),


9)	Registration Statement (Form S-8, No. 333-114854),


10)	Registration Statement (Form S-8, No. 333-115376),


11)	Registration Statement (Form S-3, No. 333-134596),


12)	Registration Statement (Form S-8, No. 333-159552),


13)	Registration Statement (Form S-8, No. 333-169452), and


14)	Registration Statement (Form S-8, No. 333-183941);

of our reports dated February 20, 2014 with respect to the consolidated financial statements of Trinity Industries, Inc. and Subsidiaries and the effectiveness of internal control over financial reporting of Trinity Industries, Inc. and Subsidiaries included in this Annual Report (Form 10-K) of Trinity Industries, Inc. and Subsidiaries for the year ended December 31, 2013 .

/s/ ERNST & YOUNG LLP

Dallas, Texas

February 20, 2014

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



TRINITY INDUSTRIES, INC.	By	/s/ James E. Perry
Registrant
		James E. Perry
		Senior Vice President and
		Chief Financial Officer
		February 20, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Directors:



/s/ John L. Adams	/s/ Charles W. Matthews
John L. Adams	Charles W. Matthews
Director	Director
Dated: February 20, 2014	Dated: February 20, 2014

/s/ Rhys J. Best	/s/ Douglas L. Rock
Rhys J. Best	Douglas L. Rock
Director	Director
Dated: February 20, 2014	Dated: February 20, 2014

/s/ David W. Biegler
David W. Biegler	Principal Executive Officer:
Director
Dated: February 20, 2014	/s/ Timothy R. Wallace
	Timothy R. Wallace
/s/ Leldon E. Echols	Chairman, Chief Executive Officer, President, and Director
Leldon E. Echols	Dated: February 20, 2014
Director
Dated: February 20, 2014
	Principal Financial Officer:
/s/ Ronald J. Gafford
Ronald J. Gafford	/s/ James E. Perry
Director	James E. Perry
Dated: February 20, 2014	Senior Vice President and Chief Financial Officer
	Dated: February 20, 2014
/s/ Adrián Lajous
Adrián Lajous
Director	Principal Accounting Officer:
Dated: February 20, 2014
	/s/ Mary E. Henderson
	Mary E. Henderson
	Vice President and Chief Accounting Officer
	Dated: February 20, 2014

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INDEX TO EXHIBITS Trinity Industries, Inc. Index to Exhibits (Item 15(b))

NO.		DESCRIPTION
(3.1)		Certificate of Incorporation of Trinity Industries, Inc., as amended May 23, 2007 (incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2012).
(3.2)		Amended and Restated By-Laws of Trinity Industries, Inc., as amended September 5, 2013 (incorporated by reference to Exhibit 3.1 to our Form 8-K filed September 11, 2013).
(4.1)		Indenture, dated June 7, 2006, between Trinity Industries, Inc. and Wells Fargo Bank, National Association, as trustee (including the Form of 3 7/8% Convertible Subordinated Note due 2036 as an exhibit thereto) (incorporated by reference to Exhibit 4.01 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).
(4.1.1)		Officers' Certificate of Trinity Industries, Inc. pursuant to the Indenture dated June 7, 2006, relating to the Company's 3 7/8% Convertible Subordinated Notes due 2036 (incorporated by reference to Exhibit 4.01.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).
(4.2)		Specimen Common Stock Certificate of Trinity Industries, Inc. (incorporated by reference to Exhibit 4.1 of Registration Statement No. 333-159552 filed May 28, 2009).
(4.3)		Pass Through Trust Agreement dated as of February 15, 2002 among Trinity Industries Leasing Company, Trinity Industries, Inc. and Wilmington Trust Company, as Trustee (filed herewith).
(4.3.1)		Trust Indenture and Security Agreement dated as of February 15, 2002 among Trinity Industries Leasing Company, Trinity Industries, Inc. and The Bank of New York, as Trustee (filed herewith).
(4.3.2)		Trust Indenture and Security Agreement dated as of February 15, 2002 among Trinity Industries Leasing Company, Trinity Industries, Inc. and The Bank of New York, as Trustee (filed herewith).
(4.3.3)		Trust Indenture and Security Agreement dated as of February 15, 2002 among Trinity Industries Leasing Company, Trinity Industries, Inc. and The Bank of New York, as Trustee (filed herewith).
(10.1)		Form of Change in Control Agreement entered into between Trinity Industries, Inc. and the Chief Executive Officer, and each of the Senior Vice Presidents (filed herewith).*
(10.2)		Trinity Industries, Inc. Directors' Retirement Plan, as amended September 10, 1998 (incorporated by reference to Exhibit 10.2 of Registration Statement No. 333-117526 filed July 21, 2004).*
(10.2.1)		Amendment No. 2 to the Trinity Industries, Inc. Directors' Retirement Plan (incorporated by reference to Exhibit 10.2.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2010).*
(10.2.2)		Amendment No. 3 to the Trinity Industries, Inc. Directors' Retirement Plan (incorporated by reference to Exhibit 10.2.2 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.3)		1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 4.1 of Registration Statement No. 33-73026 filed December 15, 1993).*
(10.3.1)		Amendment No. 1 to the 1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.3.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.3.2)		Amendment No. 2 to the 1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.3.2 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.3.3)		Amendment No. 3 to the 1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.3.3 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.3.4)		Amendment No. 4 to the 1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.3.4 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.3.5)		Amendment No. 5 to the 1993 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.3.5 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.4)		Supplemental Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates as restated effective January 1, 2005 (filed herewith).*
(10.5)		Trust Agreement for Trinity Industries, Inc. Deferred Compensation Trust dated December 15, 2011 (incorporated by reference to Exhibit 10.5 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.6)		Trust Agreement for Trinity Industries, Inc. Supplemental Profit Sharing and Directors Fee Trust dated December 15, 2011 (incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.7)		Supplemental Retirement Plan as Amended and Restated effective January 1, 2009 (filed herewith).*
(10.7.1)		Amendment No. 1 to the Supplemental Retirement Plan as Amended and Restated effective January 1, 2009 (filed herewith).*
(10.8)		Trinity Industries, Inc. Deferred Plan for Director Fees, as amended (incorporated by reference to Exhibit 10.9 of Registration Statement No. 333-117526 filed July 21, 2004).*

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INDEX TO EXHIBITS Trinity Industries, Inc. Index to Exhibits (Item 15(b))

NO.		DESCRIPTION
(10.8.1)		Amendment to Trinity Industries, Inc. Deferred Plan for Director Fees dated December 7, 2005 (incorporated by reference to Exhibit 10.8.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.8.2)		Trinity Industries, Inc. 2005 Deferred Plan for Director Fees (incorporated by reference to Exhibit 10.8.2 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.9)		Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (incorporated by reference to Exhibit 4.2 of Registration Statement No. 333-77735 filed May 4, 1999).*
(10.9.1)		Amendment No. 1 to the Trinity Industries, Inc. 1998 Stock Option Plan and Incentive Plan (incorporated by reference to Exhibit 10.9.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2009).*
(10.9.2)		Amendment No. 2 to the Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.9.2 to our Annual Report on Form 10-K for the annual period ended December 31, 2009).*
(10.9.3)		Amendment No. 3 to the Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.9.3 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.9.4)		Amendment No. 4 to the Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.9.4 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).*
(10.10)		Second Amended and Restated Trinity Industries, Inc. 2004 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.1 to our Form 8-K filed May 8, 2013).*
(10.10.1)		Form of Notice of Grant of Stock Options and Non-Qualified Option Agreement with Non-Qualified Stock Option Terms and Conditions as of December 9, 2008 (filed herewith).*
(10.10.2)		Form of Notice of Grant of Stock Options and Incentive Stock Option Agreement with Incentive Stock Option Terms and Conditions as of December 9, 2008 (filed herewith).*
(10.10.3)		Form of Restricted Stock Grant Agreement for grants issued prior to 2008 (filed herewith).*
(10.10.3.1)		Form of Restricted Stock Grant Agreement for grants issued commencing 2008 (filed herewith).*
(10.10.4)		Form of Non-Qualified Stock Option Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.10.4 to our Annual Report on Form 10-K for the annual period ended December 31, 2010).*
(10.10.5)		Form of Restricted Stock Unit Agreement for Non-Employee Directors for grants issued prior to 2008 (filed herewith).*
(10.10.5.1)		Form of Restricted Stock Unit Agreement for Non-Employee Directors for grants issued commencing 2008 (filed herewith).*
(10.10.6)		Form of Performance Restricted Stock Unit Grant Agreement for grants issued commencing 2011 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011).*
(10.11)		Trinity Industries, Inc. Supplemental Retirement Plan Trust (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2012).*
(10.12)		Form of 2008 Deferred Compensation Plan and Agreement as amended and restated entered into between Trinity Industries, Inc. and certain officers of Trinity Industries, Inc. or its subsidiaries (filed herewith).*
(10.13)		Trinity Industries, Inc. Annual Incentive Plan (incorporated by reference to Exhibit 10.2 to our Form 8-K filed May 8, 2013).*
(10.14)		Equipment Lease Agreement (TRL 1 2001-1A) dated as of May 17, 2001 between TRLI-1A Railcar Statutory Trust, lesser, and Trinity Rail Leasing I L.P., lessee (filed herewith).
(10.14.1)		Participation Agreement (TRL 1 2001-1A) dated as of May 17, 2001 among Trinity Rail Leasing I L.P., lessee, et. al. (filed herewith).
(10.14.2)		Equipment Lease Agreement (TRL 1 2001-1B) dated as of July 12, 2001 between TRL 1 2001-1B Railcar Statutory Trust, lessor, and Trinity Rail Leasing I L.P., lessee (filed herewith).
(10.14.3)		Participation Agreement (TRL 1 2001-1B) dated as of May 17, 2001 among Trinity Rail Leasing I L.P., lessee, et. al. (filed herewith).
(10.14.4)		Equipment Lease Agreement (TRL 1 2001-1C) dated as of December 28, 2001 between TRL 1 2001-1C Railcar Statutory Trust, lessor, and Trinity Rail Leasing 1 L.P., lessee (filed herewith).
(10.14.5)		Participation Agreement (TRL 1 2001-1C) dated as of December 28, 2001 among Trinity Rail Leasing 1 L.P., lessee, et. al. (filed herewith).

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INDEX TO EXHIBITS Trinity Industries, Inc. Index to Exhibits (Item 15(b))

NO.		DESCRIPTION
(10.15)		Equipment Lease Agreement (TRL III 2003-1A) dated as of November 12, 2003 between TRL III-1A Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee (filed herewith).
(10.15.1)		Participation Agreement (TRL III 2003-1A) dated as of November 12, 2003 between TRL III-1A among Trinity Rail Leasing III L.P., lessee, et. al. (filed herewith).
(10.15.2)		Equipment Lease Agreement (TRL III 2003-1B) dated as of November 12, 2003 between TRL III-1B Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee, (filed herewith).
(10.15.3)		Participation Agreement (TRL III 2003-1B) dated as of November 12, 2003 between TRL III-1B among Trinity Rail Leasing III L.P., lessee, et. al. (filed herewith).
(10.15.4)		Equipment Lease Agreement (TRL III 2003-1C) dated as of November 12, 2003 between TRL III-1C Railcar Statutory Trust, lessor, and Trinity Rail Leasing III L.P., lessee (filed herewith).
(10.15.5)		Participation Agreement (TRL III 2003-1C) dated as of November 12, 2003 between TRL III-1C among Trinity Rail Leasing III L.P., lessee, et. al. (filed herewith).
(10.16)		Equipment Lease Agreement (TRL IV 2004-1A) between TRL IV 2004-1A Statutory Trust, lessor, and Trinity Rail Leasing IV L.P., lessee (filed herewith).
(10.16.1)		Participation Agreement (TRL IV 2004-1A) among Trinity Rail Leasing IV, L.P., lessee, et. al (filed herewith).
(10.17)		Third Amended and Restated Credit Agreement dated as of October 20, 2011 among Trinity Industries, Inc, as Borrower, JP Morgan Chase Bank, N.A., individually and as Administrative Agent, and certain other Lenders party thereto from time to time (incorporated by reference to Exhibit 10.17 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).
(10.18)		Third Amended and Restated Warehouse Loan Agreement dated as of June 17, 2013 among Trinity Industries Leasing Company, Trinity Rail Leasing Warehouse Trust, the banks and other lending institutions from time to time party hereto, Credit Suisse AG, New York Branch, as Agent, and Wilmington Trust Company, as Collateral Agent and Depositary (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on June 21, 2013).
(10.19)		Term Loan Agreement dated as of May 9, 2008 among Trinity Rail Leasing VI LLC, the Committed Lenders and the Conduit Lenders From Time to Time Party Hereto, DVB Bank AG, as Agent, and Wilmington Trust Company; as Collateral and Depositary (filed herewith).
(10.19.1)		Purchase and Sale Agreement (TILC) dated as of May 9, 2008 among Trinity Industries Leasing Company, as Seller and Trinity Rail Leasing VI LLC, as Buyer (filed herewith).
(10.19.2)		Purchase and Sale Agreement (TRLT-II) dated as of May 9, 2008 among Trinity Rail Leasing Trust II, as Seller, Trinity Rail Leasing VI LLC, as Buyer and Trinity Industries Leasing Company (filed herewith).
(10.20)		Master Indenture dated November 5, 2009, between Trinity Rail Leasing VII LLC and Wilmington Trust Company, as indenture trustee (incorporated by reference to Exhibit 10.20 to our Annual Report on Form 10-K for the annual period ended December 31, 2009).
(10.20.1)		Purchase and Contribution Agreement, dated November 5, 2009, among Trinity Industries Leasing Company, Trinity Rail Leasing Warehouse Trust, and Trinity Rail Leasing VII L.L.C. (incorporated by reference to Exhibit 10.20.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2009).
(10.21)		Perquisite Plan beginning January 1, 2004 in which the Company's Executive Officers participate (incorporated by reference to Exhibit 10.21 to our Annual Report on Form 10-K for the annual period ended December 31, 2010).*
(10.22)		Purchase and Contribution Agreement, dated May 18, 2006, among Trinity Industries Leasing Company, Trinity Leasing Trust II, and Trinity Rail Leasing V L.P. (incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).
(10.22.1)		Master Indenture dated May 24, 2006, between Trinity Rail Leasing V L.P. and Wilmington Trust Company, as indenture trustee (incorporated by reference to Exhibit 10.22.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).
(10.23)		Board Compensation Summary Sheet (filed herewith).*
(10.25)		Indenture dated as of October 25, 2010, between Trinity Rail Leasing 2010 LLC and Wilmington Trust Company, as indenture trustee (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010).
(10.25.1)		Purchase and Contribution Agreement, dated as of October 25, 2010, among Trinity Rail Leasing Warehouse Trust, Trinity Industries Leasing Company, and Trinity Rail Leasing 2010 LLC (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010).

Table of Contents

INDEX TO EXHIBITS Trinity Industries, Inc. Index to Exhibits (Item 15(b))

NO.		DESCRIPTION
(10.25.2)		Note Purchase Agreement dated October 18, 2010 among Trinity Industries, Inc., Trinity Industries Leasing Company, Trinity Rail Leasing 2010 LLC, Credit Suisse Securities (USA) LLC, Lloyds TSB Bank PLC, Credit Agricole Securities (USA) Inc., Wells Fargo Securities, LLC, and Rabo Securities USA, Inc. (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010).
(10.26)		Note Purchase Agreement dated June 29, 2011, among Trinity Industries Leasing Company, TRIP Rail Holdings LLC, TRIP Rail Leasing LLC, and TRIP Rail Master Funding LLC, and Credit Suisse Securities (USA) LLC (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011).
(10.26.1)		Purchase and Contribution Agreement dated July 6, 2011, among TRIP Rail Leasing, LLC, Trinity Industries Leasing Company, TRIP Rail Master Funding LLC (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011).
(10.26.2)		Master Indenture dated July 6, 2011, among TRIP Rail Master Funding LLC and Wilmington Trust Company, as indenture trustee (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011).
(10.27)		Form of Indemnification Agreement between Trinity Industries, Inc. and certain directors and executive officers (incorporated by reference to Exhibit 10.28 to our Annual Report on Form 10-K for the annual period ended December 31, 2011).
(10.28)		Note Purchase Agreement dated December 12, 2012, among Trinity Industries, Inc., Trinity Industries Leasing Company, Trinity Rail Leasing 2012 LLC, Credit Suisse Securities (USA) LLC, Credit Agricole Securities (USA) Inc., Lloyd's Securities Inc., Rabo Securities USA, Inc., and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 10.28 to our Annual Report on Form 10-K for the annual period ended December 31, 2012).
(10.28.1)		Master Indenture dated December 19, 2012, between Trinity Rail Leasing 2012 LLC and Wilmington Trust Company, as Indenture Trustee (incorporated by reference to Exhibit 10.28.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2012).
(10.28.2)		Purchase and Contribution Agreement, dated December 19, 2012, among Trinity Rail Leasing Warehouse Trust, Trinity Industries Leasing Company, and Trinity Rail Leasing 2012 LLC (incorporated by reference to Exhibit 10.28.2 to our Annual Report on Form 10-K for the annual period ended December 31, 2012).
(12)		Computation of Ratio of Earnings to Fixed Charges (filed herewith).
(21)		Listing of subsidiaries of Trinity Industries, Inc. (filed herewith).
(23)		Consent of Ernst & Young LLP (contained on page 92 of this document and filed herewith).
(31.1)		Rule 13a-15(e) and 15d-15(e) Certification of the Chief Executive Officer (filed herewith).
(31.2)		Rule 13a-15(e) and 15d-15(e) Certification of the Chief Financial Officer (filed herewith).
(32.1)		Certification pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(32.2)		Certification pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(95)		Mine Safety Disclosure Exhibit (filed herewith).
101.INS		XBRL Instance Document (filed electronically herewith)
101.SCH		XBRL Taxonomy Extension Schema Document (filed electronically herewith)
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (filed electronically herewith)
101.LAB		XBRL Taxonomy Extension Label Linkbase Document (filed electronically herewith)
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (filed electronically herewith)
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (filed electronically herewith)

_________________

* Management contracts and compensatory plan arrangements.

EXHIBIT 4.3

================================================================================

PASS THROUGH TRUST AGREEMENT

TRINITY INDUSTRIES LEASING COMPANY,

Company

TRINITY INDUSTRIES, INC.,

Guarantor

And

WILMINGTON TRUST COMPANY,

Trustee

Dated as of February 15, 2002

$170,000,000

Trinity Industries Leasing Company

2002-1 Pass Through Trust

7.755% Pass Through Certificates,

Series 2002-1

================================================================================

TABLE OF CONTENTS

Page

----

ARTICLE I.

DEFINITIONS

Section 1.01. Definitions 1

Section 1.02. Compliance Certificates and Opinions 8

Section 1.03. Form of Documents Delivered to Trustee 8

Section 1.04. Acts of Holders 9

ARTICLE II.

ACQUISITION OF EQUIPMENT NOTES;

ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01. Issuance of Certificates; Acquisition of Equipment Notes 10

Section 2.02. Acceptance by Trustee 10

Section 2.03. Limitation of Powers 10

ARTICLE III.

THE CERTIFICATES

Section 3.01. Form of Certificates 11

Section 3.02. Restrictive Legends 12

Section 3.03. Execution, Authentication and Denomination of Certificates 13

Section 3.04. Temporary Certificates 13

Section 3.05. Registration of Transfer and Exchange of Certificates 14

Section 3.06. Book-Entry Provisions for Global Certificates 15

Section 3.07. Special Transfer Provisions 16

Section 3.08. Mutilated, Destroyed, Lost or Stolen Certificates 18

Section 3.09. Persons Deemed Owners 18

Section 3.10. Cancellation 18

Section 3.11. Limitation of Liability for Payments 19

ARTICLE IV.

DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS

Section 4.01. Certificate Account and Special Payments Account 19

Section 4.02. Distributions from Certificate Account and Special Payments Account 19

Section 4.03. Statements to Certificateholders 20

Section 4.04. Investment of Special Payment Moneys 21

ARTICLE V.

DEFAULT

Section 5.01. Events of Default 22

Section 5.02. Incidents of Sale of Equipment Notes 22

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Section 5.03. Judicial Proceedings Instituted by Trustee 23

Section 5.04. Control by Certificateholders 24

Section 5.05. Waiver of Past Defaults 24

Section 5.06. Undertaking to Pay Court Costs 25

Section 5.07. Right of Certificateholders to Receive Payments Not to Be Impaired 25

Section 5.08. Certificateholders May Not Bring Suit Except Under Certain Conditions 25

Section 5.09. Remedies Cumulative 26

ARTICLE VI.

THE TRUSTEE

Section 6.01. Certain Duties and Responsibilities 26

Section 6.02. Notice of Defaults 27

Section 6.03. Certain Rights of Trustee 28

Section 6.04. Not Responsible for Recitals or Issuance of Certificates 29

Section 6.05. May Hold Certificates 29

Section 6.06. Money Held in Trust 29

Section 6.07. Compensation and Reimbursement 29

Section 6.08. Corporate Trustee Required; Eligibility 30

Section 6.09. Resignation and Removal; Appointment of Successor 31

Section 6.10. Acceptance of Appointment by Successor 32

Section 6.11. Merger, Conversion, Consolidation or Succession to Business 32

Section 6.12. Maintenance of Agencies 33

Section 6.13. Money for Certificate Payments to Be Held in Trust 34

Section 6.14. Registration of Equipment Notes in Trustee's Name 34

Section 6.15. Representations and Warranties of Trustee 35

Section 6.16. Withholding Taxes; Information Reporting; Tax Returns 35

Section 6.17. Trustee's Liens 36

ARTICLE VII.

THE COMPANY

Section 7.01. Maintenance of Corporate Existence 36

Section 7.02. Consolidation, Merger, Etc 36

ARTICLE VIII.

CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

Section 8.01. The Company to Furnish Trustee with Names and Addresses of Certificateholders 37

Section 8.02. Preservation of Information; Communications to Certificateholders 37

Section 8.03. Reports by the Company 38

ARTICLE IX.

SUPPLEMENTAL TRUST AGREEMENTS

Section 9.01. Supplemental Trust Agreements Without Consent of Certificateholders 39

Section 9.02. Supplemental Trust Agreements with Consent of Certificateholders 39

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Section 9.03. Documents Affecting Immunity or Indemnity 40

Section 9.04. Execution of Supplemental Trust Agreements 40

Section 9.05. Effect of Supplemental Trust Agreements 40

Section 9.06. Reference in Certificates to Supplemental Trust Agreements 41

ARTICLE X.

AMENDMENTS TO TRANSACTION DOCUMENTS

Section 10.01. Amendments and Supplements to Transaction Documents 41

ARTICLE XI.

TERMINATION OF TRUST

Section 11.01. Termination of the Trust 41

ARTICLE XII.

MISCELLANEOUS PROVISIONS

Section 12.01. Limitation on Rights of Certificateholders 42

Section 12.02. Certificates Nonassessable and Fully Paid 42

Section 12.03. Notices 43

Section 12.04. Governing Law 43

Section 12.05. Severability of Provisions 43

Section 12.06. Effect of Headings and Table of Contents 43

Section 12.07. Successors and Assigns 43

Section 12.08. Benefits of Trust Agreement 44

Section 12.09. Legal Holidays 44

Section 12.10. Counterpart 44

Section 12.11. Tax Treatment 44

Section 12.12. No Partnership 44

Exhibit A Form of Certificate

Exhibit B Form of Letter of Representations

Exhibit C Form of Certificate for Unlegended Certificates

Exhibit D Form of Certificate to Be Delivered in Connection with

Transfers Pursuant to Regulation S

Exhibit E Form of Transfer Notice

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This PASS THROUGH TRUST AGREEMENT (this "Trust Agreement"), dated as of February

15, 2002, among TRINITY INDUSTRIES LEASING COMPANY, a Delaware corporation (the

"Company"), TRINITY INDUSTRIES, INC., a Delaware corporation (the "Guarantor"),

and WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its

individual capacity but solely as trustee hereunder (unless otherwise specified)

(the "Trustee").

WITNESSETH:

WHEREAS, the Company and the Trustee hereby declare the

creation of the Trust for the benefit of the Holders of the Certificates to be

issued hereunder, and the initial Holders of the Certificates, as the grantors

of the Trust, by their respective acceptances of the Certificates, hereby join

in the creation of the Trust with the Trustee;

WHEREAS, all Certificates will evidence fractional undivided

interests in the Trust; and

WHEREAS, the Trustee on behalf of the Trust shall purchase

three issues of Equipment Notes issued by the Company pursuant to three separate

Indentures, having the identical interest rate as, and final maturity dates not

later than the final expected Regular Distribution Date of, the Certificates and

shall hold such Equipment Notes in trust for the benefit of the

Certificateholders.

NOW, THEREFORE, in consideration of the mutual agreements

herein contained, and of other good and valuable consideration the receipt and

adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.01. Definitions. For all purposes of this Trust

Agreement, except as otherwise expressly provided or unless the context

otherwise requires:

(1) the terms used herein that are defined in this Article

have the meanings assigned to them in this Article, and include the

plural as well as the singular;

(2) all references in this Trust Agreement to designated

"Articles", "Sections" and other subdivisions are to the designated

Articles, Sections and other subdivisions of this Trust Agreement; and

(3) the words "herein", "hereof" and "hereunder" and other

words of similar import refer to this Trust Agreement as a whole and

not to any particular Article, Section or other subdivision.

"Act" when used with respect to any Holder, has the meaning

specified in Section 1.04.

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"Affiliate" of any specified Person, means any other Person

directly or indirectly controlling or controlled by or under direct or indirect

common control with such specified Person. For the purposes of this definition,

"control" when used with respect to any specified Person means the power to

direct the management and policies of such Person, directly or indirectly,

whether through the ownership of voting securities, by contract or otherwise;

and the terms "controlling" and "controlled" have meanings correlative to the

foregoing.

"Authorized Agent" means any Paying Agent or Registrar.

"Book-Entry Certificates" means a beneficial interest in the

Certificates, ownership and transfers of which shall be made through book

entries by a Clearing Agency.

"Business Day" means any day other than a Saturday, a Sunday

or a day on which banking institutions in New York, New York, or the city in

which the Trustee or the Indenture Trustee maintains its Corporate Trust Office

are authorized or obligated by law, executive order, or governmental decree to

be closed.

"Certificate" means any one of the certificates executed and

authenticated by the Trustee, substantially in the form of Exhibit A hereto.

"Certificate Account" means the account or accounts created

and maintained pursuant to Section 4.01(a).

"Certificate Owner" means, when used in Section 3.09, the

Person for whom a Clearing Agency Participant acts.

"Certificated Certificates" has the meaning specified in

Section 3.01(d).

"Certificateholder or Holder" means the Person in whose name a

Certificate is registered in the Register, except when used in connection with a

Book-Entry Certificate, where such term shall mean the Person who holds an

interest in such Book-Entry Certificate through a Clearing Agency pursuant to

Section 3.06.

"Clearing Agency" means an organization registered as a

"clearing agency" pursuant to Section 17A of the Securities Exchange Act of

1934, as amended.

"Clearing Agency Participant" means a broker, dealer, bank,

other financial institution or other Person for whom from time to time a

Clearing Agency effects, directly or indirectly, book entry transfers and

pledges of securities deposited with the Clearing Agency.

"Clearstream" means Clearstream Banking, societe anonyme.

"Closing Date" means February 15, 2002.

"Code" means the Internal Revenue Code of 1986, as amended.

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"Commission" means the Securities and Exchange Commission, as

from time to time constituted, created under the Securities Exchange Act of

1934, and any successor agency.

"Company" means Trinity Industries Leasing Company, a Delaware

corporation, its successors in interest and permitted assigns.

"Consideration" has the meaning specified in Section 2.01(a).

"Corporate Trust Office" with respect to the Trustee and the

Indenture Trustee, means the Corporate Trust Administration department of such

trustee in the city at which at any particular time its corporate trust business

shall be principally administered.

"Depository" means The Depository Trust Company, and any

successor entity to the Depository as depositary for the Certificates.

"Direction" has the meaning specified in Section 1.04(c).

"Distribution Date" means any Regular Distribution Date or

Special Distribution Date.

"Equipment Note" means any of the equipment notes issued under

an Indenture, including without limitation any equipment note issued under such

Indenture in replacement or substitution therefor, held by the Trustee.

"ERISA" means the Employee Retirement Income Security Act of

1974, as amended from time to time, or any successor federal statute.

"Euroclear" means Euroclear Bank S.A./N.V.

"Event of Default" means an event described in Section 5.01.

"Fractional Undivided Interest" means the fractional undivided

interest in the Trust that is evidenced by a Certificate.

"Global Certificates" has the meaning specified in Section

3.01(d).

"Guarantor" means Trinity Industries, Inc., a Delaware

corporation, its successors in interest and permitted assigns.

"Holder" has the meaning specified in the definition of

"Certificateholder or Holder".

"Indenture" means any of the [A] Trust Indenture and Security

Agreement, [B] Trust Indenture and Security Agreement or [C] Trust Indenture and

Security Agreement, each dated as of the date hereof among the Company, the

Guarantor and The Bank of New York, as trustee, providing for the issuance of a

series of Equipment Notes, as each such Indenture may from time to time be

amended or supplemented.

-3-

"Indenture Default" with respect to any Indenture, means any

Indenture Event of Default as such term is defined in such Indenture.

"Indenture Trustee" means The Bank of New York, as indenture

trustee under each of the Indentures; and any successor to such Indenture

Trustee as such trustee.

"Items of Equipment" with respect to any Equipment Note, has

the meaning ascribed thereto in the Indenture pursuant to which such Equipment

Note was issued.

"Letter of Representations" means the agreement among the

Company, the Trustee and the Depository, substantially in the form attached

hereto as Exhibit B.

"Non-U.S. Person" means a Person that is not a U.S. person, as

defined in Regulation S.

"Officer's Certificate" means, with respect to the Company, a

certificate signed by the Chairman, the Vice Chairman, the President, any Vice

President, any Assistant Vice President, the Treasurer or the Secretary, and

means, with respect to the Indenture Trustee, a certificate signed by a

Responsible Officer of the Indenture Trustee and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of legal counsel,

who may be (a) an attorney employed by the Company or the Guarantor or (b) such

other counsel designated by the Company or the Indenture Trustee, whether or not

such counsel is an employee of any of them and who shall be reasonably

acceptable to the Trustee.

"Outstanding" when used with respect to Certificates, means,

as of any date of determination, all Certificates theretofore authenticated and

delivered under this Trust Agreement, except:

(i) Certificates theretofore cancelled by the Registrar or

delivered to the Trustee or the Registrar for cancellation;

(ii) Certificates for which amounts in the aggregate original

principal amount of such Certificates have been theretofore deposited

with the Trustee or any Paying Agent in trust for the Holders of such

Certificates as provided in Section 4.01 pending distribution of such

money to the Certificateholders pursuant to the final distribution

payment to be made pursuant to Section 11.01 hereof; and

(iii) Certificates in exchange for or in lieu of which other

Certificates have been authenticated and delivered pursuant to this

Trust Agreement.

"Paying Agent" means the paying agent maintained and appointed

pursuant to Section 6.12(b).

"Permanent Regulation S Global" has the meaning specified in

Section 3.01(c).

-4-

"Permitted Investments" means obligations of the United States

of America for the payment of which the full faith and credit of the United

States of America is pledged, maturing in not more than sixty (60) days or such

lesser time as is necessary for payment of any Special Payments on a Special

Distribution Date.

"Person" means any person, including any individual,

corporation, partnership, joint venture, association, joint stock company,

trust, unincorporated organization, or government or any agency or political

subdivision thereof.

"Pool Balance" means, with respect to the Certificates as of

any date, , the aggregate unpaid principal amount of the Equipment Notes held in

the Pass Through Trust on that date plus any amounts in respect of principal of

the Equipment Notes held by the Pass Through Trustee and not yet distributed.

The Pool Balance as of any Regular Distribution Date or Special Distribution

Date shall be computed after giving effect to the payment of principal, if any,

on the Equipment Notes or other Trust Property held in the Trust and the

distribution thereof to be made on such date.

"Pool Factor" means, with respect to any Certificate as of any

date, the quotient (rounded to the seventh decimal place, with 0.00000005 being

rounded upward) computed by dividing (i) the Pool Balance as of such date by

(ii) the original aggregate face amount of the Certificates. The Pool Factor as

of any Regular Distribution Date or Special Distribution Date shall be computed

after giving effect to the payment of principal, if any, on the Equipment Notes

or other Trust Property held in the Trust and the distribution thereof to be

made on such date.

"Private Placement Legend" has the meaning specified in

Section 3.02(a).

"QIB" means a "qualified institutional buyer" as defined in

Rule 144A.

"Record Date" means (i) for Scheduled Payments to be

distributed on any Regular Distribution Date, other than the final distribution,

the 15th day (whether or not a Business Day) preceding such Regular Distribution

Date and (ii) for Special Payments to be distributed on any Special Distribution

Date, other than the final distribution, the 15th day (whether or not a Business

Day) preceding such Special Distribution Date.

"Register and Registrar" means the register maintained and the

registrar appointed pursuant to Section 3.05.

"Regular Distribution Date" means, with respect to

distributions of Scheduled Payments, each date designated as such in this Trust

Agreement, until payment of all the Scheduled Payments to be made under the

Equipment Notes held in the Trust have been made or until such Equipment Notes

have been redeemed or otherwise prepaid in full.

"Regulation S" means Regulation S under the Securities Act.

"Regulation S Certificated Certificates" has the meaning

specified in Section 3.01(d).

-5-

"Regulation S Global" has the meaning specified in Section

3.01(c).

"Request" means a written request by the Company setting forth

the subject matter of the request accompanied by an Officer's Certificate and an

Opinion of Counsel as provided in Section 1.02.

"Responsible Officer" when used with respect to the initial

Trustee or the initial Indenture Trustee, means any officer in the Corporate

Trust Office; when used with respect to any successor Trustee or successor

Indenture Trustee, means the chairman or vice-chairman of the board of directors

or trustees, the chairman or vice-chairman of the executive or standing

committee of the board of directors or trustees, the president, the chairman of

the committee on trust matters, any vice-president, any second vice-president,

the secretary, any assistant secretary, the treasurer, any assistant treasurer,

the cashier, any assistant cashier, any trust officer or assistant trust

officer, the comptroller and any assistant comptroller; and, when used with

respect to the Trustee or the Indenture Trustee, also means any other officer of

the Trustee or the Indenture Trustee customarily performing functions similar to

those performed by any of the above designated officers and also means, with

respect to a particular corporate trust matter, any other officer to whom such

matter is referred because of his knowledge of and familiarity with the

particular subject.

"Restricted Global" has the meaning specified in Section

3.01(b).

"Rule 144A" means Rule 144A under the Securities Act.

"Scheduled Payment", with respect to a Distribution Date,

means any payment (other than a Special Payment) of principal or interest on an

Equipment Note, due from the obligor thereon, which payment represents the

payment of principal at the stated maturity of such Equipment Note or any

regularly scheduled installment of principal at the due date thereof, or the

payment of regularly scheduled interest accrued on such Equipment Note.

"Securities Act" means the Securities Act of 1933, as amended

from time to time.

"Special Distribution Date" means (i) with respect to any

payment described in clause (i) of the definition of Special Payment, the day on

which such prepayment is scheduled to occur pursuant to the terms of the

applicable Indenture and (ii) with respect to any Special Payment relating to an

Equipment Note other than as described in clause (i) of the definition of

Special Payments, 20 days after the earliest day for which it is practicable for

the Trustee to give notice pursuant to Section 4.02(c).

"Special Payment", with respect to an Equipment Note, means

(i) any payment of principal, premium, if any, and interest on such Equipment

Note resulting from the redemption of such Equipment Note pursuant to Section

2.12 of the applicable Indenture, except a payment described in clause (iii)

below, (ii) any payment of principal and interest (including any interest

accruing upon default) on, or any other amount in respect of, such Equipment

Note upon an Indenture Event of Default in respect thereof or upon the exercise

of remedies under the Indenture relating to such Equipment Note, (iii) any

Scheduled Payment or any Special Payment referred to in clause (i) of this

definition which is not in fact paid within five days of the

-6-

Distribution Date applicable thereto or (iv) any proceeds from the sale of any

Equipment Note by the Trustee pursuant to Article V hereof and "Special

Payments" means all of such Special Payments.

"Special Payments Account" means the account or accounts

created and maintained pursuant to Section 4.01(b).

"Specified Investments" means (i) direct obligations of the

United States of America and agencies thereof for which the full faith and

credit of the United States is pledged, (ii) obligations fully guaranteed by the

United States of America, (iii) certificates of deposit issued by, or bankers'

acceptances of, or time deposits with, any bank, trust company or national

banking association incorporated or doing business under the laws of the United

States of America or one of the States thereof having combined capital and

surplus and retained earnings of at least five hundred million dollars

($500,000,000) (including the Indenture Trustee or the Trustee if such

conditions are met), (iv) commercial paper of companies (including the Company),

banks, trust companies or national banking associations incorporated or doing

business under the laws of the United States of America or one of the States

thereof and in each case having a rating assigned to such commercial paper by

Standard & Poor's Ratings Group, a division of the McGraw Hill Companies, Inc.,

or Moody's Investors Service, Inc. (or, if neither such organization shall rate

such commercial paper at any time, by any nationally recognized rating

organization in the United States of America) equal to the highest rating

assigned by such organization, and (v) repurchase agreements with any financial

institution having a combined capital and surplus of at least seven hundred and

fifty million dollars ($750,000,000) fully collateralized by obligations of the

type described in clauses (i) through (iv) above; provided that if all of the

above investments are unavailable, the entire amount to be invested may be used

to purchase Federal funds from an entity described in (iii) above; and provided,

further that no investment shall be eligible as a "Specified Investment" unless

it is held to maturity and the final maturity or date of return of such

investment is 91 days or less from the date of purchase thereof.

"Temporary Regulation S Global" has the meaning specified in

Section 3.01(c).

"Transaction Documents" means, with respect to any Equipment

Note, the related Indenture, as each such document may hereafter be amended or

supplemented in accordance with its respective terms.

"Trust" means the trust created by this Trust Agreement, the

estate of which consists of the Trust Property.

"Trust Property" means the Equipment Notes held as the

property of the Trust created hereby and all monies at any time paid thereon and

all monies due and to become due thereunder, funds from time to time deposited

in the Certificate Account and the Special Payments Account and any proceeds

from the sale by the Trustee pursuant to Article V hereof of any Equipment Note.

-7-

"Trustee" means the institution executing this Trust Agreement

not in its individual capacity but solely in its capacity as trustee hereunder

(unless otherwise specified), or its successor in interest, and any successor

trustee appointed as provided herein.

"U.S. Certificated Certificates" has the meaning specified in

Section 3.01(d).

"U.S. Person" has the meaning specified in Rule 902 under the

Securities Act.

Section 1.02. Compliance Certificates and Opinions. Upon any

application or request by the Company or the Indenture Trustee to the Trustee to

take any action under any provision of this Trust Agreement, the Company or the

Indenture Trustee, as the case may be, shall furnish to the Trustee an Officer's

Certificate stating that, in the opinion of the signer, all conditions

precedent, if any, provided for in this Trust Agreement relating to the proposed

action have been complied with and an Opinion of Counsel stating that in the

opinion of such counsel all such conditions precedent, if any, have been

complied with, except that in the case of any such application or request as to

which the furnishing of such documents is specifically required by any provision

of this Trust Agreement relating to such particular application or request, no

additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a

condition or covenant provided for in this Trust Agreement shall include:

(1) a statement that each individual signing such certificate

or opinion has read such covenant or condition and the definitions

herein relating thereto;

(2) a brief statement as to the nature and scope of the

examination or investigation upon which the statements or opinions

contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual,

he has made such examination or investigation as is necessary to enable

him to express an informed opinion as to whether or not such covenant

or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such

individual, such condition or covenant has been complied with.

Section 1.03. Form of Documents Delivered to Trustee. In any

case where several matters are required to be certified by, or covered by an

opinion of, any specified Person, it is not necessary that all such matters be

certified by, or covered by the opinion of, only one such Person, or that they

be so certified or covered by only one document, but one such Person may certify

or give an opinion with respect to some matters and one or more other such

Persons as to other matters and any such Person may certify or give an opinion

as to such matters in one or several documents.

Any Opinion of Counsel stated to be based on the opinion of

other counsel shall be accompanied by a copy of such other opinion.

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Where any Person is required to make, give or execute two or

more applications, requests, consents, certificates, statements, opinions or

other instruments under this Trust Agreement, they may, but need not, be

consolidated and form one instrument.

Section 1.04. Acts of Holders. (a) Any direction, consent,

waiver or other action provided by this Trust Agreement to be given or taken by

Holders may be embodied in and evidenced by one or more instruments of

substantially similar tenor signed by such Holders in person or by an agent duly

appointed in writing; and, except as herein otherwise expressly provided, such

action shall become effective when such instrument or instruments are delivered

to the Trustee and, where it is hereby expressly required, to the Company or the

Indenture Trustee. Such instrument or instruments (and the action embodied

therein and evidenced thereby) are herein sometimes referred to as the "Act" of

the Holders signing such instrument or instruments. Proof of execution of any

such instrument or of a writing appointing any such agent shall be sufficient

for any purpose of this Trust Agreement and (subject to Section 6.01) conclusive

in favor of the Trustee, the Company and the Indenture Trustee, if made in the

manner provided in this Section.

(b) The fact and date of the execution by any Person of any

such instrument or writing may be proved by the certificate of any notary public

or other officer of any jurisdiction authorized to take acknowledgments of deeds

or administer oaths that the Person executing such instrument acknowledged to

him the execution thereof, or by an affidavit of a witness to such execution

sworn to before any such notary or such other officer and where such execution

is by an officer of a corporation or association or a member of a partnership,

on behalf of such corporation, association or partnership, such certificate or

affidavit shall also constitute sufficient proof of his authority. The fact and

date of the execution of any such instrument or writing, or the authority of the

Person executing the same, may also be proved in any other reasonable manner

which the Trustee deems sufficient.

Fractional Undivided Interests of Certificates outstanding have given any

direction, consent or waiver (a "Direction"), under this Trust Agreement,

Certificates owned by the Company, the Guarantor or any Affiliate of any such

Person shall be disregarded and deemed not to be Outstanding under this Trust

Agreement for purposes of any such determination. In determining whether the

Trustee shall be protected in relying upon any such Direction, only Certificates

which the Trustee has actual knowledge of such ownership shall be so

disregarded. Notwithstanding the foregoing, (i) if any such Person owns 100% of

the Certificates Outstanding, such Certificates shall not be so disregarded as

aforesaid, and (ii) if any amount of Certificates so owned by any such Person

have been pledged in good faith, such Certificates shall not be disregarded as

aforesaid if the pledgee establishes to the satisfaction of the Trustee the

pledgee's right so to act with respect to such Certificates and that the pledgee

is not the Company, the Guarantor or any Affiliate of any such Persons.

(d) Any Direction or other action by the Holder of any

Certificate shall bind the Holder of every Certificate issued upon the transfer

thereof or in exchange therefor or in lieu thereof, whether or not notation of

such action is made upon such Certificate.

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(e) Except as otherwise provided in Section 1.04(c),

Certificates owned by or pledged to any Person shall have an equal and

proportionate benefit under the provisions of this Trust Agreement, without

preference, priority, or distinction as among all of the Certificates.

ARTICLE II.

ACQUISITION OF EQUIPMENT NOTES;

ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01. Issuance of Certificates; Acquisition of

Equipment Notes. Upon request of the Company and the satisfaction of the closing

conditions with respect to the purchase of Equipment Notes to be purchased on

the Closing Date, the Trustee shall execute, deliver and authenticate on the

Closing Date Certificates equaling in the aggregate the total aggregate

principal amount of the Equipment Notes expected to be purchased by the Trustee,

evidencing the entire ownership of the Trust. The Trustee shall issue and sell

such Certificates on the Closing Date, in authorized denominations and in such

Fractional Undivided Interests, so as to result in the receipt by the Trustee of

consideration in an amount equal to the aggregate principal amount of all such

Equipment Notes (the "Consideration"). The Trustee shall purchase the Equipment

Notes on the Closing Date at an aggregate purchase price for all such Equipment

Notes equal to the amount of the Consideration. Except as provided in Sections

3.04, 3.05 and 3.08 hereof, the Trustee shall not execute or deliver

Certificates in an aggregate amount in excess of the aggregate amount specified

in this paragraph.

Section 2.02. Acceptance by Trustee. (a) The Trustee, upon the

execution and delivery of this Trust Agreement, acknowledges its acceptance of

all right, title, ownership and interest in and to the Equipment Notes acquired

pursuant to Section 2.01 hereof and declares that the Trustee holds and will

hold such right, title, ownership and interest, together with all other property

constituting the Trust Property, for the benefit of all present and future

Certificateholders, upon the terms herein set forth.

(b) The Company shall deliver to the Trustee, prior to or

promptly following the establishment of the Trust, copies of all Indentures and

the related Indenture supplements, unless the Pass Through Trustee shall have

previously received such documents.

deliver the Letter of Representations.

Section 2.03. Limitation of Powers. The Trust is constituted

solely for the purpose of making the investment in the Equipment Notes, and,

except as set forth herein, the Trustee is not authorized or empowered to

acquire any other investments or engage in any other activities and, in

particular, the Trustee is not authorized or empowered to do anything that would

cause the Trust to fail to qualify as a "grantor trust" (within the meaning of

Subpart E, Part I of Subchapter J of the Code) for U.S. federal income tax

purposes (including, as subject to this restriction, acquiring any Item of

Equipment (as defined in the respective Indentures) by bidding on the Equipment

Notes or otherwise, or taking any action with respect to any such Item of

Equipment once acquired).

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ARTICLE III.

THE CERTIFICATES

Section 3.01. Form of Certificates. (a) The Certificates shall

be in registered form without coupons and shall be substantially in the form

attached hereto as Exhibit A, with such omissions, variations and insertions as

are permitted by this Trust Agreement, and may have such letters, numbers or

other marks of identification and such legends or endorsements printed,

lithographed or engraved thereon, as may be required to comply with the rules of

any Clearing Agency or to conform to any usage in respect thereof, or as may,

consistently herewith, be prescribed by the Trustee or by the officer executing

such Certificates, such determination by said officer to be evidenced by such

officer signing the Certificates.

(b) Certificates offered and sold in reliance on Rule 144A

shall be issued initially in the form of a permanent global Certificate in

registered form, substantially in the form set forth in Exhibit A (the

"Restricted Global"), registered in the name of a nominee of the Depository,

deposited with the Trustee, as custodian for the Depository, duly executed and

authenticated by the Trustee as hereinafter provided. The aggregate principal

amount of a Restricted Global may from time to time be increased or decreased by

adjustments made on the records of the Registrar as hereinafter provided.

reliance on Regulation S shall be issued initially in the form of a temporary

global Certificate in registered form substantially in the form set forth in

Exhibit A (the "Temporary Regulation S Global") registered in the name of a

nominee of the Depository for the accounts of Euroclear and Clearstream,

deposited on behalf of the purchasers of the Certificates represented thereby

with the Trustee, as custodian for the Depository, duly executed and

authenticated by the Trustee as hereinafter provided. At any time following

March 27, 2002, upon receipt by the Trustee and the Company of a certificate

substantially in the form of Exhibit C hereto, one or more permanent global

Certificates in registered form substantially in the form set forth in Exhibit A

(the "Permanent Regulation S Global" and, together with the Temporary Regulation

S Global, the "Regulation S Global") duly executed and authenticated by the

Trustee as hereinafter provided shall be deposited with the Trustee, as

custodian for the Depository which shall reflect on its books and records the

date and a decrease in the principal amount of the Temporary Regulation S Global

in an amount equal to the principal amount of the beneficial interest in the

Temporary Regulation S Global transferred. The aggregate principal amount of a

Regulation S Global may from time to time be increased or decreased by

adjustments made in the records of the Trustee, as custodian for the Depository

or its nominee, as herein provided.

(d) Certificates issued pursuant to Section 3.06 in exchange

for interests in the Regulation S Global shall be in the form of definitive

Certificates in registered form substantially in the form set forth in Exhibit A

(the "Regulation S Certificated Certificates"). Certificates issued pursuant to

Section 3.06 in exchange for interests in the Restricted Global shall be in the

form of definitive Certificates in registered form substantially in the form set

forth in Exhibit A (the "U.S. Certificated Certificates").

-11-

The Regulation S Certificated Certificates and the U.S.

Certificated Certificates are sometimes collectively referred to herein as the

"Certificated Certificates." The Restricted Global and Regulation S Global are

sometimes collectively herein referred to as the "Global Certificates."

The Certificated Certificates shall be typed, printed,

lithographed or engraved or produced by any combination of these methods or may

be produced in any other manner determined by the officers executing such

Certificates, as evidenced by their execution of such Certificates.

Section 3.02. Restrictive Legends. (a) Certificate Legends.

Each Restricted Global, Temporary Regulation S Global and U.S. Certificated

Certificate shall bear the legend (the "Private Placement Legend") set forth

below on the face thereof:

THIS PASS THROUGH CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE

OR OTHER JURISDICTION. NEITHER THIS PASS THROUGH CERTIFICATE NOR ANY

INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED,

TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE

ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

THE HOLDER OF THIS PASS THROUGH CERTIFICATE, BY ITS ACCEPTANCE HEREOF,

AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS PASS THROUGH

CERTIFICATE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY

(I) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY

BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A

UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF

RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN

ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN

EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE

144 (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION

STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV)

IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE

UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS

REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS PASS THROUGH

CERTIFICATE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)

ABOVE.

(b) Global Certificate Legend. Each Global Certificate shall

also bear the following legend on the face thereof:

UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS

AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE

ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY

AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST

COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR

SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.

OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE

OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE

HEREOF FOR VALUE OR

-12-

OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER

HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN

WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR

THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS

GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE

RESTRICTIONS SET FORTH IN SECTION 3.07 OF THE TRUST AGREEMENT REFERRED

TO HEREIN.

face thereof:

BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT EITHER (I) IT IS NOT (A)

AN "EMPLOYEE BENEFIT PLAN" SUBJECT TO TITLE I OF ERISA, (B) A PLAN SUBJECT TO

SECTION 4975 OF THE CODE, (C) AN ENTITY THE UNDERLYING ASSETS OF WHICH INCLUDE

THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA OR SECTION

4975 OF THE CODE OR (D) A GOVERNMENTAL OR OTHER PLAN THAT IS SUBJECT TO ANY LAW

THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR

SECTION 4975 OF THE CODE, OR (II) THE PURCHASE AND HOLDING OF THIS CERTIFICATE

OR INTEREST THEREIN BY SUCH HOLDER WILL NOT RESULT IN A PROHIBITED TRANSACTION

UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE CODE OR ANY SUBSTANTIALLY

SIMILAR LAW FOR WHICH AN EXEMPTION IS NOT AVAILABLE.

Section 3.03. Execution, Authentication and Denomination of

Certificates. (a) The Certificates shall be executed on behalf of the Trustee by

manual or facsimile signature of a Responsible Officer of the Trustee.

Certificates bearing the manual or facsimile signature of an individual who was,

at the time when such signature was affixed, authorized to sign on behalf of the

Trustee shall be valid and binding obligations of the Trustee, notwithstanding

that such individual has ceased to be so authorized prior to the authentication

and delivery of such Certificates or did not hold such office at the date of

such authentication and delivery. No Certificate shall be entitled to any

benefit under this Trust Agreement, or be valid for any purposes, unless there

appears on such Certificate a certificate of authentication substantially in the

form set forth in Exhibit A hereto executed by the Trustee by manual signature,

and such certificate upon any Certificate shall be conclusive evidence, and the

only evidence, that such Certificate has been duly authenticated and delivered

hereunder. All Certificates shall be dated the date of their authentication.

(b) The Certificates shall be issued in minimum denominations

of $100,000 and integral multiples of $1,000 in excess thereof, except that one

Certificate may be in a denomination of less than $1,000.

Company, will cause to be authenticated and delivered, simultaneously with the

sale, assignment, and transfer to the Trustee of the Equipment Notes pursuant to

Section 2.01 hereof, Certificates duly authenticated by the Trustee, in

authorized denominations equaling in the aggregate the aggregate principal

amount of the Equipment Notes so purchased and evidencing the entire ownership

of the Trust.

Section 3.04. Temporary Certificates. Pending the preparation

of definitive Certificates, the Trustee may execute, authenticate and deliver

temporary Certificates which are

-13-

printed, lithographed, typewritten, or otherwise produced, in any denomination,

containing substantially the same terms and provisions as set forth in Exhibit

A, except for such appropriate insertions, omissions, substitutions and other

variations relating to their temporary nature as the officer executing such

temporary Certificates may determine, as evidenced by such officer's execution

of such temporary Certificates.

If temporary Certificates are issued, the Trustee will cause

definitive Certificates to be prepared without unreasonable delay. After the

preparation of definitive Certificates, the temporary Certificates shall be

exchangeable for definitive Certificates upon surrender of the temporary

Certificates at the Corporate Trust Office of the Trustee, or at the office or

agency of the Trustee maintained in accordance with Section 6.12, without charge

to the holder. Upon surrender for cancellation of any one or more temporary

Certificates, the Trustee shall execute, authenticate and deliver in exchange

therefor definitive Certificates of authorized denominations of a like aggregate

Fractional Undivided Interest. Until so exchanged, such temporary Certificates

shall in all respects be entitled to the same benefits under this Trust

Agreement as definitive Certificates.

Section 3.05. Registration of Transfer and Exchange of

Certificates. The Trustee shall cause to be kept at the office or agency to be

maintained by it in accordance with the provisions of Section 6.12 a register

(the "Register") in which, subject to such reasonable regulations as it may

prescribe, the Trustee shall provide for the registration of Certificates and of

transfers and exchanges of Certificates as herein provided. The Trustee shall

initially be the registrar (the "Registrar") for the purpose of registering

Certificates and transfers and exchanges of Certificates as herein provided.

Upon surrender for registration of transfer of any Certificate

at the Corporate Trust Office or such other office or agency, the Trustee shall

execute, authenticate and deliver, in the name of the designated transferee or

transferees, one or more new Certificates in authorized denominations of a like

aggregate Fractional Undivided Interest.

At the option of a Certificateholder, Certificates may be

exchanged for other Certificates of authorized denominations of a like aggregate

Fractional Undivided Interest, upon surrender of the Certificates to be

exchanged at any such office or agency. Whenever any Certificates are so

surrendered for exchange, the Trustee shall execute, authenticate and deliver

the Certificates that the Certificateholder making the exchange is entitled to

receive. Every Certificate presented or surrendered for registration of transfer

or exchange shall be duly endorsed or accompanied by a written instrument of

transfer in form satisfactory to the Registrar.

No service charge shall be made to a Certificateholder for any

registration of transfer or exchange of Certificates, but the Trustee shall

require payment of a sum sufficient to cover any tax or governmental charge that

may be imposed in connection with any transfer or exchange of Certificates.

All Certificates surrendered for registration of transfer and

exchange shall be cancelled and subsequently destroyed by the Trustee.

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Section 3.06. Book-Entry Provisions for Global Certificates.

(a) Each Restricted Global and Regulation S Global initially shall (i) be

registered in the name of the Depository or the nominee of such Depository, (ii)

be delivered to the Trustee as custodian for such Depository and (iii) bear

legends as set forth in Section 3.02 hereof.

Clearing Agency Participants shall have no rights under this

Trust Agreement with respect to any Global Certificate held on their behalf by

the Depository, or the Trustee as its custodian, or under any Global

Certificate, and the Depository may be treated by the Company, the Trustee and

any agent of the Company or the Trustee as the absolute owner of such Global

Certificate for all purposes whatsoever. Notwithstanding the foregoing, nothing

herein shall prevent the Company, the Trustee or any agent of the Company or the

Trustee from giving effect to any written certification, proxy or other

authorization furnished by the Depository or impair, as between the Depository

and the Clearing Agency Participants, the operation of customary practices

governing the exercise of the rights of a beneficial owner of any Certificate.

(b) Transfers of a Global Certificate shall be limited to

transfers of such Global Certificate in whole, but not in part, to the

Depository, its successors or their respective nominees. Transfers of interests

in one Global Certificate to parties who will hold the interests through the

same Global Certificate will be effected in the ordinary way in accordance with

the respective rules and operating procedures of the Depository, Euroclear or

Clearstream, as the case may be, and the provisions of Section 3.07 hereof. In

addition, U.S. Certificated Certificates or Regulation S Certificated

Certificates shall be issued to all beneficial owners in exchange for their

beneficial interests in a Restricted Global or a Regulation S Global,

respectively, if (i) the Depository notifies the Company that it is no longer

willing or able to continue as a depositary or the Depositary ceases to be a

Clearing Agency and a successor is not appointed within 90 days of such notice

or cessation, (ii) the Company, at its option, advises the Trustee in writing

that it elects to cause the issuance of Certificated Certificates or (iii) after

the occurrence of an Event of Default, Holders of Book-Entry Certificates

evidencing Fractional Undivided Interests aggregating not less than a majority

in interest in the Trust, by Act of said Holders delivered to the Company and

the Trustee, advise the Trustee and the Depository through the Clearing Agency

Participants in writing that the continuation of a book-entry system through the

Clearing Agency is no longer in the best interests of the Holders.

that is transferred to a Person who takes delivery in the form of an interest in

the other Global Certificate will, upon transfer, cease to be an interest in

such Global Certificate and become an interest in the other Global Certificate

and, accordingly, will thereafter be subject to all transfer restrictions, if

any, and other procedures applicable to beneficial interests in such other

Global Certificate for as long as it remains such an interest.

(d) In connection with the transfer of all the beneficial

interests in a Restricted Global or Regulation S Global to beneficial owners

pursuant to paragraph (b) of this Section 3.06, the Restricted Global or

Regulation S Global, as the case may be, shall be deemed to be surrendered to

the Trustee for cancellation, and the Trustee shall execute, authenticate and

deliver, to each beneficial owner identified by the Depository in exchange for

its beneficial interest in the Restricted Global or Regulation S Global, as the

case may be, an equal aggregate

-15-

principal amount of U.S. Certificated Certificates or Regulation S Certificated

Certificates, as the case may be, of authorized denominations.

(e) The registered holder of a Global Certificate may grant

proxies and otherwise authorize any Person, including Clearing Agency

Participants and Persons that may hold interests through Clearing Agency

Participants, to take any action which a Holder is entitled to take under this

Trust Agreement or the Certificates.

(f) Whenever this Trust Agreement requires or permits actions

to be taken based upon instructions or directions of Holders of Certificates

evidencing a specified percentage of the Fractional Undivided Interests in the

Trust, the Depository shall be deemed to represent such percentage only to the

extent that it has received instructions to such effect from Certificateholders

or Clearing Agency Participants owning or representing, respectively, such

required percentage of the Fractional Undivided Interests in the Trust and has

delivered such instructions to the Trustee; provided that the Trustee shall have

no obligation to determine whether the Depository has in fact received any such

instructions.

Section 3.07. Special Transfer Provisions. (a) Transfers to

QIBs. The following provisions shall apply with respect to the registration of

any proposed transfer to a QIB (excluding Non-U.S. Persons):

(i) If the Certificates to be transferred consists of

Certificated Certificates or an interest in a Temporary Regulation S

Global, the Registrar shall register the transfer if such transfer is

being made by a proposed transferor who has checked the box provided

for on the form of Certificate stating, or has otherwise advised the

Company and the Registrar in writing, that the sale has been made in

compliance with the provisions of Rule 144A to a transferee which has

signed the certification provided for on the form of Certificate

stating, or has otherwise advised the Company and the Registrar in

writing, that it is purchasing the Certificate for its own account or

an account with respect to which it exercises sole investment

discretion and that it and any such account is a QIB, and is aware that

the sale to it is being made in reliance on Rule 144A and acknowledges

that it has received such information regarding the Trust and/or the

Company as it has requested pursuant to Rule 144A or has determined not

to request such information and that it is aware that the transferor is

relying upon its foregoing representations in order to claim the

exemption from registration under the Securities Act provided by Rule

144A.

(ii) If the transferor is a Clearing Agency Participant

holding a beneficial interest in the Restricted Global, upon receipt by

the Registrar of the documents referred to in clause (i) and

instructions given in accordance with the Depository's and the

Registrar's procedures, the Registrar shall reflect on its books and

records the date and an increase in the principal amount of such

Restricted Global in an amount equal to the principal amount of the

interests U.S. Certificated Certificates or in the Temporary Regulation

S Global, as the case may be, to be transferred, and the Trustee shall

cancel such Certificated Certificates or decrease the amount of such

Temporary Regulation S Global so transferred.

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(b) Transfers of Interests in Permanent Regulation S Global or

Regulation S Certificated Certificates to U.S. Persons. The Registrar shall

Regulation S Certificated Certificates without requiring any additional

certification.

provisions shall apply with respect to any transfer of a Certificate to a

Non-U.S. Person:

(i) The Registrar shall register any proposed transfer to any

Non-U.S. Person if the Certificate to be transferred is an interest in

a Restricted Global only upon receipt of a certificate substantially in

the form of Exhibit D from the proposed transferor.

(ii) (A) If the proposed transferor is a Clearing Agency

Participant holding a beneficial interest in a Restricted Global, upon

receipt by the Registrar of (x) the documents required by paragraph (i)

and (y) instructions in accordance with the Depository's and the

Registrar's procedures, the Registrar shall reflect on its books and

records the date and a decrease in the principal amount of such

Restricted Global in an amount equal to the principal amount of the

beneficial interest in the Restricted Global to be transferred, and (B)

the proposed transferee is a Clearing Agency Participant, upon receipt

by the Registrar of instructions given in accordance with the

Depository's and the Registrar's procedures, the Registrar shall

reflect on its books and records the date and an increase in the

principal amount of such Regulation S Global in an amount equal to the

principal amount of the U.S. Certificated Certificates or the

Restricted Global, as the case may be, to be transferred, and the

Trustee shall cancel such Certificated Certificates, if any, so

transferred or decrease the amount of the Restricted Global.

(d) Private Placement Legend. Upon the registration of

transfer, exchange or replacement of Certificates not bearing the Private

Placement Legend, the Registrar shall deliver Certificates that do not bear the

Private Placement Legend. Upon the registration of transfer, exchange or

replacement of Certificates bearing the Private Placement Legend, the Registrar

shall deliver only Certificates that bear the Private Placement Legend unless

either (i) the Private Placement Legend is no longer required by Section 3.02 or

(ii) there is delivered to the Registrar an Opinion of Counsel reasonably

satisfactory to the Company and the Trustee to the effect that neither such

legend nor the related restrictions on transfer are required in order to

maintain compliance with the provisions of the Securities Act.

(e) General. By its acceptance of any Certificate bearing the

Private Placement Legend, each Holder of such a Certificate acknowledges the

restrictions on transfer of such Certificate set forth in this Trust Agreement

and in the Private Placement Legend and agrees that it will transfer such

Certificate only as provided in this Trust Agreement. The Registrar shall not

restrictions on transfer of such Certificate set forth in this Trust Agreement.

In connection with any transfer of Certificates, each Certificateholder agrees

by its acceptance of the Certificates to furnish to the Registrar and the

Trustee such certificates, legal opinions or other information as either of them

may reasonably require to confirm that such transfer is being made pursuant to

an exemption from, or a transaction not subject to, the Securities Act; provided

that the Registrar shall not be

-17-

required to determine the sufficiency of any such certifications, legal opinions

or other information.

Until such time as no Certificates remain outstanding, the

Registrar shall retain, in accordance with its customary procedures, copies of

all letters, notices and other written communications received pursuant to

Section 3.06 or this Section 3.07. The Trustee shall have the right to inspect

and make copies of all such letters, notices or other written communications at

any reasonable time upon the giving of reasonable written notice to the

Registrar.

(f) Notwithstanding anything contained herein to the contrary,

subject to compliance with the provisions of this Section 3.07, the Trustee

shall not be responsible for independently ascertaining whether any transfer in

fact complies with the registration requirements or exemptions therefrom under

the Securities Act or the Securities Act of 1934, as amended, applicable state

or other federal securities law or the Investment Company Act of 1940, as

amended.

Section 3.08. Mutilated, Destroyed, Lost or Stolen

Certificates. If (a) any mutilated Certificate is surrendered to the Registrar,

or the Registrar receives evidence to its satisfaction of the destruction, loss

or theft of any Certificate and (b) there is delivered to the Registrar and the

Trustee such security, indemnity or bond, as may be required by them to save

each of them harmless, then, in the absence of notice to the Registrar or the

Trustee that such Certificate has been acquired by a protected purchaser, the

Trustee shall execute, authenticate and deliver, in exchange for or in lieu of

any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of

like Fractional Undivided Interest with the same final Distribution Date. In

connection with the issuance of any new Certificate under this Section 3.08, the

Trustee shall require the payment of a sum sufficient to cover any tax or other

governmental charge that may be imposed in relation thereto and any other

expenses (including the fees and expenses of the Trustee and the Registrar)

connected therewith. Any duplicate Certificate issued pursuant to this Section

3.08 shall constitute conclusive evidence of the appropriate Fractional

Undivided Interest in the Trust, as if originally issued, whether or not the

lost, stolen or destroyed Certificate shall be found at any time.

Section 3.09. Persons Deemed Owners. Prior to due presentation

of a Certificate for registration of transfer, the Trustee, the Registrar, and

any Paying Agent of the Trustee shall treat the person in whose name any

Certificate is registered as the owner of such Certificate for the purpose of

receiving distributions pursuant to Section 4.02 and for all other purposes

whatsoever, and neither the Trustee, the Registrar, nor any Paying Agent of the

Trustee shall be affected by any notice to the contrary.

Section 3.10. Cancellation. All Certificates surrendered for

payment, registration of transfer or exchange shall, if surrendered to any

Person or party hereto other than the Registrar, be delivered by such Person to

the Registrar for cancellation. No Certificates shall be authenticated in lieu

of or in exchange for any Certificates cancelled as provided in this Section,

except as expressly permitted by this Trust Agreement. All cancelled

Certificates held by the Registrar shall be destroyed and a certification of

their destruction delivered to the Trustee.

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Section 3.11. Limitation of Liability for Payments. All

payments or distributions made to Certificateholders under this Trust Agreement

shall be made only from the Trust Property and only to the extent that the

Trustee shall have sufficient income or proceeds from the Trust Property to make

such payments in accordance with the terms of Article IV of this Trust

Agreement. Each Holder of a Certificate, by its acceptance of such Certificate,

agrees that it will look solely to the income and proceeds from the Trust

Property to the extent available for distribution to the Holder thereof as

provided in this Trust Agreement.

ARTICLE IV.

DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS

Section 4.01. Certificate Account and Special Payments

Account. (a) The Trustee shall establish and maintain on behalf of the

Certificateholders the Certificate Account with the Trustee as one or more

non-interest bearing accounts. The Trustee shall hold the Certificate Account in

trust for the benefit of the Certificateholders, and shall make or permit

withdrawals therefrom only as provided in this Trust Agreement. On each day when

a Scheduled Payment is made under any Indenture to the Trustee, as holder of the

Equipment Notes issued under such Indenture, the Trustee upon receipt shall

immediately deposit the aggregate amount of such Scheduled Payment in the

Certificate Account.

(b) The Trustee shall establish and maintain on behalf of the

Certificateholders the Special Payments Account with the Trustee as one or more

accounts, which shall be non-interest bearing except as provided in Section

4.04. The Trustee shall hold the Special Payments Account in trust for the

benefit of the Certificateholders, and shall make or permit withdrawals

therefrom only as provided in this Trust Agreement. On each day when a Special

Payment is made under any Indenture to the Trustee, as holder of the Equipment

Notes issued under such Indenture, the Trustee upon receipt shall immediately

deposit the aggregate amount of such Special Payments in the Special Payments

Account.

which an Equipment Note relates such Equipment Note on the date of its stated

final maturity, or in the case of any Equipment Note which is to be prepaid in

whole pursuant to the relevant Indenture, on the applicable prepayment date

under such Indenture.

Section 4.02. Distributions from Certificate Account and

Special Payments Account. (a) Subject to Section 6.07(b), on each Regular

Distribution Date or as soon thereafter as the Trustee has confirmed receipt of

the payment of the Scheduled Payments due on the Equipment Notes, the Trustee

shall distribute out of the Certificate Account the entire amount deposited

therein pursuant to Section 4.01(a). There shall be so distributed to each

Certificateholder of record on the Record Date with respect to such Regular

Distribution Date (other than as provided in Section 11.01 concerning the final

distribution) by check mailed to such Certificateholder at the address appearing

in the Register such Certificateholder's pro rata share (based on the aggregate

Fractional Undivided Interest held by such Certificateholder) of the aggregate

amount in the Certificate Account, except that, with respect to Certificates

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registered on the Record Date in the name of the Depository (or its nominee),

such distribution shall be made by wire transfer in immediately available funds

to the account designated by the Depository (or such nominee).

(b) On each Special Distribution Date with respect to any

Special Payment or as soon thereafter as the Trustee has confirmed receipt of

the Special Payments due on the Equipment Notes or realized upon the sale of any

Equipment Note, the Trustee shall distribute out of the Special Payments Account

the entire amount deposited therein pursuant to Section 4.01(b). There shall be

so distributed to each Certificateholder of record on the Record Date with

respect to such Special Distribution Date (other than as provided in Section

11.01 concerning the final distribution) by check mailed to such

Certificateholder at the address appearing in the Register such

Certificateholder's pro rata share (based on the aggregate Fractional Undivided

Interest held by such Certificateholder) of the aggregate amount in the Special

Payments Account on account of such Special Payment, except that, with respect

to Certificates registered on the Record Date in the name of the Depository (or

its nominee), such distribution shall be made by wire transfer in immediately

available funds to the account designated by the Depository (or such nominee).

notice of each Special Payment to be mailed to each Holder of a Certificate at

his address as it appears in the Register. In the event of prepayment of

Equipment Notes, such notice shall be mailed not less than 20 days prior to the

date any such Special Payment is scheduled to be distributed. In the case of any

other Special Payments, such notice shall be mailed as soon as practicable after

the Trustee has confirmed that it has received funds for such Special Payment

and shall state the Special Distribution Date for such Special Payment, which

shall occur 20 days after the date of such notice of Special Payment or (if such

20th day is not practicable) as soon as practicable thereafter. Notices mailed

by the Trustee shall set forth:

(i) the Special Distribution Date and the Record Date therefor

(except as otherwise provided in Section 11.01),

(ii) the amount of the Special Payment for each $1,000 face

amount Certificate and the amount thereof constituting principal,

premium, if any, and interest,

(iii) the reason for the Special Payment, and

(iv) if the Special Distribution Date is the same date as a

Regular Distribution Date, the total amount to be received on such date

for each $1,000 face amount Certificate.

If the amount of premium payable upon the prepayment of an Equipment Note has

not been calculated at the time that the Trustee mails notice of a Special

Payment, it shall be sufficient if the notice sets forth the other amounts to be

distributed and states that any premium received will also be distributed.

Section 4.03. Statements to Certificateholders. (a) On each

Regular Distribution Date and Special Distribution Date, the Trustee will

include with each distribution to

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Certificateholders of record a statement, giving effect to such distribution to

be made on such Regular Distribution Date or Special Distribution Date, as the

case may be, setting forth the following information (per a $1,000 face amount

Certificate as to (i) and (ii) below):

(i) the amount of such distribution allocable to principal

and the amount allocable to premium, if any; and

(ii) the amount of such distribution allocable to interest;

and

(iii) the Pool Balance and the Pool Factor.

With respect to the Certificates registered in the name of the

Depository or its nominee, on the Record Date prior to each Regular Distribution

Date and Special Distribution Date, the Trustee will request from the Depository

a securities position listing setting forth the names of all the Clearing Agency

Participants reflected on the Depository's books as holding interests in the

Certificates on such Record Date. On each Regular Distribution Date and Special

Distribution Date, the Trustee will mail to each such Clearing Agency

Participant the statement described above and will make available additional

copies as requested by such Clearing Agency Participants for forwarding to

holders of the Certificates.

(b) Within a reasonable period of time after the end of each

calendar year but not later than the latest date permitted by law, the Trustee

shall furnish to each Person who at any time during such calendar year was a

Certificateholder of record a statement containing the sum of the amounts

determined pursuant to clauses (a) (i) and (a) (ii) with respect to the Trust

for such calendar year or, in the event such Person was a Certificateholder of

record during a portion of such calendar year, for the applicable portion of

such year, and such other items as are readily available to the Trustee and

which a Certificateholder shall reasonably request in writing as necessary for

the purpose of such Certificateholder's preparation of its Federal income tax

returns. With respect to Certificates registered in the name of the Depository

or its nominee, such statement and such other items shall be prepared on the

basis of information supplied to the Trustee by the Clearing Agency Participants

and shall be delivered by the Trustee to such Clearing Agency Participants to be

available for forwarding by such Clearing Agency Participants to the holders of

interests in the Certificates.

Section 4.04. Investment of Special Payment Moneys. Any money

received by the Trustee pursuant to Section 4.01(b) representing a Special

Payment which is not to be promptly distributed shall, to the extent

practicable, be invested in Permitted Investments by the Trustee pending

distribution of such Special Payment pursuant to Section 4.02. Any investment

made pursuant to this Section 4.04 shall be in such Permitted Investments having

maturities not later than the date that such moneys are required to be used to

make the payment required under Section 4.02 on the applicable Special

Distribution Date and the Trustee shall hold any such Permitted Investments

until maturity. The Trustee shall have no liability with respect to any

investment made pursuant to this Section 4.04, other than by reason of the

willful misconduct or gross negligence (or negligence in the handling of funds)

of the Trustee. All income and earnings from such investments shall be

distributed on such Special Distribution Date as part of such Special Payment.

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ARTICLE V.

DEFAULT

Section 5.01. Events of Default. If any Indenture Default

under any Indenture (an "Event of Default") shall occur and be continuing, then,

and in each and every case, so long as such Event of Default shall be

continuing, the Trustee may, but shall have no duty to, vote all of the

Equipment Notes held in the Trust to which such Event of Default relates, and

upon the direction of the holders of Certificates evidencing Fractional

Undivided Interests aggregating not less than a majority in interest in the

Trust, the Trustee shall vote a corresponding majority of such Equipment Notes,

in favor of directing the Indenture Trustee to which such Event of Default

relates, to declare the unpaid principal amount of the Equipment Notes then

outstanding to which such Event of Default relates and accrued interest thereon

to be due and payable under, and in accordance with the provisions of, the

relevant Indenture. In addition, subject to Section 5.04, if an Indenture

Default shall have occurred and be continuing under any Indenture, the Trustee

may, but shall have no duty to, and upon the direction of the holders of

Certificates evidencing Fractional Undivided Interests aggregating not less than

a majority in interest in the Trust, the Trustee shall, in accordance with the

relevant Indenture, vote the Equipment Notes held in the Trust to which such

Event of Default relates to direct the Indenture Trustee regarding the exercise

of remedies provided in Article IV of such Indenture. The Trustee shall so vote

only Equipment Notes issued under an Indenture with respect to which an

Indenture Default has occurred and is continuing.

In addition, after an Event of Default shall have occurred and

be continuing with respect to any Equipment Notes, the Trustee may, but shall be

under no duty to, in its discretion, and upon the direction of the

Certificateholders evidencing Fractional Undivided Interests aggregating not

less than a majority in interest in the Trust shall, by such officer or agent as

it may appoint, sell, convey, transfer and deliver such Equipment Note or

Equipment Notes, without recourse to or warranty by the Trustee or any

Certificateholder, to any Person. In any such case, the Trustee shall sell,

assign, contract to sell or otherwise dispose of and deliver such Equipment Note

or Equipment Notes in one or more parcels at public or private sale or sales, at

any location or locations at the option of the Trustee, all upon such terms and

conditions as it may reasonably deem advisable and at such prices as it may

reasonably deem advisable, for cash. If the Trustee so decides or is required to

sell or otherwise dispose of any Equipment Note pursuant to this Section, the

Trustee shall take such of the actions described above as it may reasonably deem

most effective to complete the sale or other disposition of such Equipment Note,

so as to provide for the payment in full of all amounts due on the Certificates.

The Trustee shall give notice to the Company promptly after any such sale.

Notwithstanding the foregoing, any action taken by the Trustee under this

Section shall not, in the reasonable judgment of the Trustee, be adverse to the

best interests of the Certificateholders.

Section 5.02. Incidents of Sale of Equipment Notes. Upon any

sale of all or any part of the Equipment Notes made either under the power of

sale given under this Trust Agreement or otherwise for the enforcement of this

Trust Agreement, the following shall be applicable:

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(1) Certificateholders and Trustee May Purchase Equipment

Notes. Any Certificateholder, the Trustee in its individual or any

other capacity or any other Person may bid for and purchase any of the

Equipment Notes, and upon compliance with the terms of sale, may hold,

retain, possess and dispose of such Equipment Notes in their or its or

his own absolute right without further accountability.

(2) Receipt of Trustee Shall Discharge Purchaser. The receipt

of the Trustee or of the officer making such sale shall be a sufficient

discharge to any purchaser for his purchase money, and, after paying

such purchase money and receiving such receipt, such purchaser or his

personal representative or assigns shall not be obliged to see to the

application of such purchase money, or be in any way answerable for any

loss, misapplication or nonapplication thereof.

(3) Application of Moneys Received upon Sale. Any moneys

collected by the Trustee upon any sale made either under the power of

sale given by this Trust Agreement or otherwise for the enforcement of

this Trust Agreement, shall be applied as provided in Section 4.02.

Section 5.03. Judicial Proceedings Instituted by Trustee. (a)

If there shall be a failure to make payment of the principal of, premium, if

any, or interest on any Equipment Note, then the Trustee, in its own name, and

as trustee of an express trust, as holder of such Equipment Notes, shall be, to

the extent permitted by and in accordance with the terms of the Transaction

Documents, entitled and empowered to institute any suits, actions or proceedings

at law, in equity or otherwise, for the collection of the sums so due and unpaid

on such Equipment Notes and may prosecute any such claim or proceeding to

judgment or final decree with respect to the whole amount of any such sums so

due and unpaid.

(b) The Trustee in its own name, or as trustee of an express

trust, or as attorney-in-fact for the Certificateholders, or in any one or more

of such capacities (irrespective of whether distributions on the Certificates

shall then be due and payable, or the payment of the principal on the Equipment

Notes shall then be due and payable, as therein expressed or by declaration or

otherwise and irrespective of whether the Trustee shall have made any demand to

the Indenture Trustee for the payment of overdue principal, premium (if any) or

interest on the Equipment Notes), shall be entitled and empowered to file such

proofs of claim and other papers or documents as may be necessary or advisable

in order to have the claims of the Trustee and of the Certificateholders allowed

in any receivership, insolvency, bankruptcy, liquidation, readjustment,

reorganization or any other judicial proceedings relative to the Company or a

Lessor, their respective creditors or property. Any receiver, assignee, trustee,

liquidator, sequestrator (or similar official) in any such judicial proceeding

is hereby authorized by each Certificateholder to make payments in respect of

such claim to the Trustee, and in the event that the Trustee shall consent to

the making of such payments directly to the Certificateholders, to pay to the

Trustee any amount due to it for the reasonable compensation, expenses,

disbursements and advances of the Trustee, its agents and counsel and any other

amounts owed to the Trustee under Section 6.07. Nothing contained in this Trust

Agreement shall be deemed to give to the Trustee any right to accept or consent

to any plan of reorganization or otherwise by

-23-

action of any character in any such proceeding to waive or change in any way any

right of any Certificateholder.

Section 5.04. Control by Certificateholders. The

Certificateholders evidencing Fractional Undivided Interests aggregating not

less than a majority in interest in the Trust shall have the right to direct the

time, method and place of conducting any proceeding for any remedy available to

the Trustee, or exercising any trust or power conferred on the Trustee under

this Trust Agreement, including any right of the Trustee as holder of the

Equipment Notes, provided that:

(1) such direction shall not be in conflict with any rule of

law or with this Trust Agreement and would not involve the Trustee in

personal liability or expense for which indemnification acceptable in

form and substance to the Trustee has not been provided,

(2) the Trustee shall not determine that the action so

directed would be unjustly prejudicial to the Certificateholders not

taking part in such direction,

(3) the Trustee may take any other action deemed proper by the

Trustee which is not inconsistent with such direction, and

(4) if an Indenture Default under any Indenture shall have

occurred and be continuing, such direction shall not obligate the

Trustee to vote more than a corresponding majority of the related

Equipment Notes held by the Trust in favor of directing any action by

the Indenture Trustee with respect to such Indenture Default.

Section 5.05. Waiver of Past Defaults. The Certificateholders

evidencing Fractional Undivided Interests aggregating not less than a majority

in interest in the Trust may on behalf of the Certificateholders of all the

Certificates waive any past Event of Default hereunder and its consequences or

may instruct the Trustee to waive any past default under any Indenture or this

Trust Agreement and its consequences, except a default

(1) in the deposit of any Scheduled Payment or Special Payment

under Section 4.01 or in the distribution of any payment under Section

4.02 on the Certificates, or

(2) in the payment of the principal of (or premium, if any) or

interest on any Equipment Notes, or

(3) in respect of a covenant or provision hereof which under

Article IX hereof cannot be modified or amended without the consent of

the Certificateholder of each Outstanding Certificate affected.

Upon any such waiver, such default shall cease to exist with

respect to this Trust Agreement, and any Event of Default arising therefrom

shall be deemed to have been cured for every purpose of this Trust Agreement and

any direction given by the Trustee on behalf of such holders to the Indenture

Trustee shall be annulled with respect thereto; but no such waiver shall extend

to any subsequent or other default or Event of Default or impair any right

consequent

-24-

thereon. Upon any such waiver, the Trustee shall vote the Equipment Notes issued

under the relevant Indenture to waive the corresponding Indenture Default.

Section 5.06. Undertaking to Pay Court Costs. All parties to

this Trust Agreement, and each Certificateholder by his acceptance of a

Certificate, shall be deemed to have agreed that any court may in its discretion

require, in any suit, action or proceeding for the enforcement of any right or

remedy under this Trust Agreement, or in any suit, action or proceeding against

the Trustee for any action taken or omitted by it as Trustee hereunder, the

filing by any party litigant in such suit, action or proceeding of an

undertaking to pay the costs of such suit, action or proceeding, and that such

court may, in its discretion, assess reasonable costs, including reasonable

attorneys' fees, against any party litigant in such suit, action or proceeding,

having due regard to the merits and good faith of the claims or defenses made by

such party litigant; provided, however, that the provisions of this Section

shall not apply to (a) any suit, action or proceeding instituted by any

Certificateholder or group of Certificateholders evidencing Fractional Undivided

Interests aggregating more than 10% of the Trust, (b) any suit, action or

proceeding instituted by any Certificateholder for the enforcement of the

distribution of payments pursuant to Section 4.02 hereof on or after the

respective due dates expressed herein or (c) any suit, action or proceeding

instituted by the Trustee.

Section 5.07. Right of Certificateholders to Receive Payments

Not to Be Impaired. Anything in this Trust Agreement to the contrary

notwithstanding, including, without limitation, Section 5.08 hereof, the right

of any Certificateholder to receive distributions of payments required pursuant

to Section 4.02 hereof on the Certificates when due, or to institute suit for

the enforcement of any such payment on or after the applicable Distribution Date

or Special Distribution Date, shall not be impaired or affected without the

consent of such Certificateholder.

Section 5.08. Certificateholders May Not Bring Suit Except

Under Certain Conditions. A Certificateholder shall not have the right to

institute any suit, action or proceeding at law or in equity or otherwise with

respect to this Trust Agreement, for the appointment of a receiver or for the

enforcement of any other remedy under this Trust Agreement, unless:

(1) such Certificateholder previously shall have given written

notice to the Trustee of a continuing Event of Default;

(2) the Certificateholders evidencing Fractional Undivided

Interests aggregating not less than a majority in interest of the Trust

shall have requested the Trustee in writing to institute such action,

suit or proceeding and shall have offered to the Trustee indemnity as

provided in Section 6.03(e);

(3) the Trustee shall have refused or neglected to institute

any such action, suit or proceeding for 60 days after receipt of such

notice, request and offer of indemnity; and

(4) no direction inconsistent with such written request has

been given to the Trustee during such 60 day period by the

Certificateholders evidencing Fractional Undivided Interests

aggregating not less than a majority in interest in the Trust.

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It is understood and intended that no one or more of the

Certificateholders shall have any right in any manner whatever hereunder or

under the Certificates to (i) surrender, impair, waive, affect, disturb or

prejudice any property which is part of the Trust Property or the lien of any

Indenture on any property subject thereto, or the rights of the

Certificateholders or the holders of the Equipment Notes, (ii) obtain or seek to

obtain priority over or preference to any other such Holder or (iii) enforce any

right under this Trust Agreement, except in the manner herein provided and for

the equal, ratable and common benefit of all the Certificateholders subject to

the provisions of this Trust Agreement.

Section 5.09. Remedies Cumulative. Every remedy given

hereunder to the Trustee or to any of the Certificateholders shall not be

exclusive of any other remedy or remedies, and every such remedy shall be

cumulative and in addition to every other remedy given hereunder or now or

hereafter given by statute, law, equity or otherwise.

ARTICLE VI.

THE TRUSTEE

Section 6.01. Certain Duties and Responsibilities. (a) Except

during the continuance of an Event of Default:

(1) the Trustee undertakes to perform such duties as are

specifically set forth in this Trust Agreement, and no implied

covenants or obligations shall be read into this Trust Agreement

against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may

conclusively rely, as to the truth of the statements and the

correctness of the opinions expressed therein, upon certificates or

opinions furnished to the Trustee and conforming to the requirements of

this Trust Agreement; but in the case of any such certificates or

opinions which by any provision hereof are specifically required to be

furnished to the Trustee, the Trustee shall be under a duty to examine

the same to determine whether or not they conform to the requirements

of this Trust Agreement.

(b) In case an Event of Default has occurred and is

continuing, the Trustee shall exercise such of the rights and powers vested in

it by this Trust Agreement, and use the same degree of care and skill in their

exercise, as a prudent man would exercise or use under the circumstances in the

conduct of his own affairs; provided however, that the Trustee shall take no

action that would cause the Trust to cease to qualify as a "grantor trust"

(within the meaning of Subpart E, Part I, Subchapter J of the Code) for U.S.

federal income tax purposes.

relieve the Trustee from liability for its own grossly negligent action (or

negligent action in the handling of funds), its own grossly negligent failure to

act (or negligent failure to act in the handling of funds), or its own willful

misconduct, except that:

-26-

(1) this Subsection shall not be construed to limit the effect

of Subsection (a) of this Section;

(2) the Trustee shall not be liable for any error of judgment

made in good faith by a Responsible Officer of the Trustee, unless it

shall be proved that the Trustee was negligent in ascertaining the

pertinent facts;

(3) the Trustee shall not be liable with respect to any action

taken or omitted to be taken by it in good faith in accordance with the

direction of the Certificateholders evidencing Fractional Undivided

Interests aggregating not less than a majority in interest in the Trust

(unless this Trust Agreement expressly provides for a different

aggregate amount) relating to the time, method and place of conducting

any proceeding for any remedy available to the Trustee on behalf of the

Holders or the Trust, or managing the Trust or exercising any trust or

power conferred upon the Trustee for the benefit of such Holders or the

Trust, under this Trust Agreement; and

(4) no provision of this Trust Agreement shall require the

Trustee to expend or risk its own funds in the performance of any of

its duties hereunder, or in the exercise of any of its rights or

powers, if it shall have reasonable grounds for believing that

repayment of such funds or adequate indemnity against such risk is not

reasonably assured to it.

(d) Whether or not herein expressly so provided, every

provision of this Trust Agreement relating to the conduct or affecting the

liability of or affording protection to the Trustee shall be subject to the

provisions of this Section.

(e) The Trustee is authorized and directed to execute such

other documents and take such other action as Holders of Certificates evidencing

Fractional Undivided Interests aggregating not less than a majority in interest

in the Trust specifically direct in written instructions delivered to the

Trustee; provided, however, that the Trustee shall not be required to take any

action if the Trustee shall determine, or shall be advised by counsel, that such

action is likely to result in personal liability or is contrary to applicable

law or any agreement to which the Trustee is a party or would cause the Trust to

cease to qualify as a "grantor trust" (within the meaning of Subpart E, Part I,

Subchapter J of the Code) for U.S. federal income tax purposes. The Trustee

shall have the right to obtain an opinion of counsel to the effect that such

action would not cause the Trust to cease to qualify as a "grantor trust"

(within the meaning of Subpart E, Part I, Subchapter J of the Code) for U.S.

federal income tax purposes.

Section 6.02. Notice of Defaults. As promptly as practicable,

and in any event within 90 days after, the occurrence of any default (as such

term is defined below) hereunder actually known to the Trustee, the Trustee

shall transmit by mail to the Company and the Indenture Trustee in accordance

with Section 12.03 and to all Certificateholders, as their names and addresses

appear in the Register, notice of such default, unless such default shall have

been cured or waived; provided, however, that, except in the case of a default

in the payment of the principal of (or premium, if any) or interest on any

Equipment Note, the Trustee shall be protected in withholding such notice if and

so long as the board of directors, the executive

-27-

committee or a trust committee of directors and/or Responsible Officers of the

Trustee in good faith determine that the withholding of such notice is in the

interests of the Certificateholders. For the purpose of this Section, the term

"default" means an event which is, or after notice or lapse of time or both

would become, an Event of Default pursuant to any Indenture.

Section 6.03. Certain Rights of Trustee. Except as otherwise

provided in Section 6.01:

(a) the Trustee may rely and shall be protected in acting or

refraining from acting in reliance upon any resolution, certificate, statement,

instrument, opinion, report, notice, request, direction, consent, order, bond,

debenture or other paper or document believed by it to be genuine and to have

been signed or presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein

shall be sufficiently evidenced by a Request;

Trustee shall deem it desirable that a matter be proved or established prior to

taking, suffering or omitting any action hereunder, the Trustee (unless other

evidence be herein specifically prescribed) may, in the absence of bad faith on

its part, rely upon an Officer's Certificate of the Company or the Indenture

Trustee;

(d) the Trustee may consult with counsel and the written

advice of such counsel or any Opinion of Counsel shall be full and complete

authorization and protection in respect of any action taken, suffered or omitted

by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any

of the rights or powers vested in it by this Trust Agreement at the request or

direction of any of the Certificateholders pursuant to this Trust Agreement,

unless such Certificateholders shall have offered to the Trustee reasonable

security or indemnity against the cost, expenses and liabilities which might be

incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation

into the facts or matters stated in any resolution, certificate, statement,

instrument, opinion, report, notice, request, direction, consent, order, bond,

debenture or other paper or document; and

(g) the Trustee may execute any of the trusts or powers

hereunder or perform any duties hereunder either directly or by or through

agents or attorneys and the Trustee shall not be responsible for any misconduct

or negligence on the part of any agent or attorney appointed with due care by it

hereunder;

(h) the Trustee shall not be liable for any action taken or

omitted by it in good faith and believed by it to be authorized or within the

discretion, rights or powers conferred upon it by this Trust Agreement, other

than any liabilities arising out of its own gross negligence (or negligence in

the handling of funds) or willful misconduct;

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(i) the permissive rights of the Trustee to do things

enumerated in this Agreement shall not be construed as a duty, and the Trustee

shall not be answerable for other than its gross negligence (or negligence in

the handling of funds) or wilful misconduct;

(j) the Trustee shall not be required to give any note or

surety in respect of the execution of the trusts and powers hereunder or

otherwise in respect of the premises; and

(k) except for (i) a payment default and (ii) any other event

of which the Trustee has "actual knowledge", which event is or, with the giving

of notice or the passage of time or both, would constitute an Event of Default,

the Trustee shall not be deemed to have notice of any such default or event

unless specifically notified in writing of such event by the Company, any

Indenture Trustee or any Holder; as used herein, the term "actual knowledge"

means the actual fact or statement of knowing, without any duty to make any

investigation with regard thereto.

Section 6.04. Not Responsible for Recitals or Issuance of

Certificates. The recitals contained herein and in the Certificates, except the

certificates of authentication, shall not be taken as the statements of the

Trustee, and the Trustee assumes no responsibility for their correctness.

Subject to Section 6.15, the Trustee makes no representations as to the validity

or sufficiency of this Trust Agreement, any Indenture, the Equipment Notes or

the Certificates, except that the Trustee hereby represents and warrants that

this Trust Agreement has been, and each Certificate will be, executed and

delivered by one of its officers who is duly authorized to execute and deliver

such document on its behalf.

Section 6.05. May Hold Certificates. The Trustee, any Paying

Agent, the Registrar or any other agent, in their respective individual or any

other capacity, may become the owner or pledgee of Certificates and may

otherwise deal with the Company or the Indenture Trustee with the same rights it

would have if it were not Trustee, Paying Agent, Registrar or such other agent.

Section 6.06. Money Held in Trust. Money held by the Trustee

or any Paying Agent in trust hereunder need not be segregated from other funds

except to the extent required herein or by law and neither the Trustee nor any

Paying Agent shall have any liability for interest upon any such moneys except

as provided for herein.

Section 6.07. Compensation and Reimbursement. (a) The Company

agrees:

(1) to pay, or cause to be paid, to the Trustee from time to

time such compensation for all services rendered by it hereunder as the

Company and the Trustee may agree in writing from time to time (which

compensation shall not be limited by any provision of law in regard to

the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to

reimburse, or cause to be reimbursed, the Trustee upon its request for

all reasonable out of pocket expenses, disbursements and advances

incurred or made by the Trustee in accordance with any provision of

this Trust Agreement (including the reasonable compensation and the

expenses and disbursements of its agents and counsel), except any such

expense, disbursement or advance as may be attributable to the gross

negligence (or negligence in

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the handling of funds), willful misconduct or bad faith of the Trustee

or as may be incurred due to the Trustee's breach of its

representations, warranties and agreements set forth in Sections 6.04,

6.15 and 6.17 or the Trustee's failure to perform any of its

obligations hereunder in accordance with its standard of care; and

(3) to indemnify, or cause to be indemnified, the Trustee,

solely in its individual capacity, for, and to hold it harmless

against, any loss, liability, tax (other than any tax referred to in

the next paragraph or any tax attributable to the Trustee's

compensation for serving as such), cost or expense incurred without

gross negligence (or negligence in the handling of funds), willful

misconduct or bad faith on its part, arising out of or in connection

with the acceptance or administration of any Trust, including the costs

and expenses of (a) defending itself against any claim or liability in

connection with the exercise or performance of any of its powers or

duties hereunder or (b) contesting the imposition of any such tax,

except in each case for any such loss, liability, tax, cost or expense

incurred by reason of the Trustee's breach of its representations and

warranties set forth in Section 6.04 or 6.15 or the Trustee's failure

to perform any of its obligations hereunder in accordance with its

standard of care. The Trustee shall notify the Company promptly of any

claim or tax for which it may seek indemnity. The Company shall defend

the claim and the Trustee shall cooperate in the defense. The Trustee

may have separate counsel with the consent of the Company and the

Company will pay the reasonable fees and expenses of such counsel. The

Company need not pay for any settlement made or any taxes paid, in

settlement or otherwise, without its consent.

(b) In addition, the Trustee shall be entitled to

reimbursement from, and shall have a lien prior to the Certificates upon, all

property and funds held or collected by the Trustee in its capacity as Trustee

for any tax (and if an Event of Default shall have occurred and be continuing,

any and all amounts then due and payable to the Trustee under this Trust

Agreement which is not paid by the Company within 30 days after demand to the

Company for such payment) incurred without gross negligence, bad faith or

willful misconduct, on its part, arising out of or in connection with the

acceptance or administration of the Trust created hereby (other than any tax

attributable to the Trustee's compensation for serving as such), including any

costs and expenses incurred in contesting the imposition of any such tax. If the

Trustee reimburses itself for any such tax it will within 30 days mail a brief

report setting forth the circumstances thereof to the Company and to all

Certificateholders as their names and addresses appear in the Register.

after an Event of Default arising as a result of any bankruptcy or insolvency of

the Company, the expenses and compensation for such services (including the fees

and expenses of its agents and counsel) are intended to constitute expenses of

administration in any such bankruptcy or insolvency proceeding.

Section 6.08. Corporate Trustee Required; Eligibility. There

shall at all times be a Trustee hereunder which shall be an institution

organized and doing business under the laws of the United States of America or

of any state, authorized under such laws to exercise corporate trust powers,

having a combined capital and surplus (together with that of its parent) of at

least

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$100,000,000, and subject to supervision or examination by Federal or

state authority. If such corporation publishes reports of condition at least

annually, pursuant to law or to the requirements of the aforesaid supervising or

examining authority, then for the purposes of this Section, the combined capital

and surplus of such corporation shall be deemed to be its combined capital and

surplus as set forth in its most recent report of condition so published. If at

any time the Trustee shall cease to be eligible in accordance with the

provisions of this Section, it shall resign immediately in the manner and with

the effect hereinafter specified in this Article.

Section 6.09. Resignation and Removal; Appointment of

Successor. (a) No resignation or removal of the Trustee and no appointment of a

successor Trustee pursuant to this Article shall become effective until the

acceptance of appointment by the successor Trustee under Section 6.10.

(b) The Trustee may resign at any time by giving written

notice thereof to the Company, the Authorized Agents and the Indenture Trustee.

If an instrument of acceptance by a successor Trustee shall not have been

delivered to the Company and the Trustee within 30 days after the giving of such

notice of resignation, the resigning Trustee may petition any court of competent

jurisdiction for the appointment of a successor Trustee.

Holders holding Certificates evidencing Fractional Undivided Interests

aggregating not less than a majority in interest in the Trust delivered to the

Trustee and to the Company and the Indenture Trustee.

(d) If at any time:

(1) the Trustee shall cease to be eligible under Section 6.08

and shall fail to resign after written request therefor by the Company

or by any Certificateholder; or

(2) the Trustee shall become incapable of acting or shall be

adjudged a bankrupt or insolvent or a receiver of the Trustee or of its

property shall be appointed or any public officer shall take charge or

control of the Trustee or of its property or affairs for the purpose of

rehabilitation, conservation or liquidation;

then, in any case, (i) the Company may remove the Trustee or (ii) subject to

Section 5.06, any Certificateholder who has been a bona fide Holder of a

Certificate for at least six months may, on behalf of himself and all others

similarly situated, petition any court of competent jurisdiction for the removal

of the Trustee and the appointment of a successor Trustee.

(e) If a Responsible Officer of the Trustee shall obtain

actual knowledge of an Avoidable Tax (as hereinafter defined) which has been or

is likely to be asserted, the Trustee shall promptly notify the Company thereof

and shall, within 30 days of such notification, resign hereunder unless within

such 30-day period the Trustee shall have received notice that the Company has

agreed to pay such tax. The Company shall promptly appoint a successor Trustee

in a jurisdiction where there are no Avoidable Taxes. As used herein an

Avoidable Tax means a state or local tax: (i) upon (w) the Trust, (x) the Trust

Property, (y) Holders of the Certificates or (z) the Trustee for which the

Trustee is entitled to seek reimbursement from the Trust Property, and (ii)

which would be avoided if the Trustee were located in another state, or

jurisdiction

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within a state, within the United States. A tax shall not be an Avoidable Tax if

the Company shall agree to pay, and shall pay, such tax.

(f) If the Trustee shall resign, be removed or become

incapable of acting, or if a vacancy shall occur in the office of the Trustee

for any reason, the Company shall promptly appoint a successor Trustee. If,

within one year after such resignation, removal or incapability, or the

occurrence of such vacancy, a successor Trustee shall be appointed by Act of the

Holders holding Certificates evidencing Fractional Undivided Interests

aggregating not less than a majority in interest in the Trust delivered to the

Company, the Indenture Trustee and the retiring Trustee, the successor Trustee

so appointed shall, forthwith upon its acceptance of such appointment, become

the successor Trustee and supersede the successor Trustee appointed as provided

above. If no successor Trustee shall have been so appointed as provided above

and accepted appointment in the manner hereinafter provided, any

Certificateholder who has been a bona fide Holder of a Certificate for at least

six months may, on behalf of himself and all others similarly situated, petition

any court of competent jurisdiction for the appointment of a successor Trustee.

(g) The successor Trustee shall give notice of the resignation

and removal of the Trustee and appointment of the successor Trustee by mailing

written notice of such event by first-class mail, postage prepaid, to the

Holders of Certificates as their names and addresses appear in the Register.

Each notice shall include the name of such successor Trustee and the address of

its Corporate Trust Office.

Section 6.10. Acceptance of Appointment by Successor. Every

successor Trustee appointed hereunder shall execute, acknowledge and deliver to

the Company and to the retiring Trustee an instrument accepting such

appointment, and thereupon the resignation or removal of the retiring Trustee

shall become effective and such successor Trustee, without any further act, deed

or conveyance, shall become vested with all the rights, powers, trusts and

duties of the retiring Trustee; but, on request of the Company or the successor

Trustee, such retiring Trustee shall execute and deliver an instrument

transferring to such successor Trustee all the rights, powers and trusts of the

retiring Trustee and shall duly assign, transfer and deliver to such successor

Trustee all property and money held by such retiring Trustee hereunder, subject

nevertheless to its lien, if any, provided for in Section 6.07. Upon request of

any such successor Trustee, the Company, the retiring Trustee and such successor

Trustee shall execute and deliver any and all instruments containing such

provisions as shall be necessary or desirable to transfer and confirm to, and

for more fully and certainly vesting in, such successor Trustee all such rights,

powers and trusts.

No successor Trustee shall accept its appointment unless at

the time of such acceptance such successor Trustee shall be qualified and

eligible under this Article.

Section 6.11. Merger, Conversion, Consolidation or Succession

to Business. Any corporation into which the Trustee may be merged or converted

or with which it may be consolidated, or any corporation resulting from any

merger, conversion or consolidation to which the Trustee shall be a party, or

any corporation succeeding to all or substantially all of the corporate trust

business of the Trustee, shall be the successor of the Trustee hereunder,

provided

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such corporation shall be otherwise qualified and eligible under this Article,

without the execution or filing of any paper or any further act on the part of

any of the parties hereto. In case any Certificates shall have been

authenticated, but not delivered, by the Trustee then in office, any successor

by merger, conversion or consolidation to such authenticating Trustee may adopt

such authentication and deliver the Certificates so authenticated with the same

effect as if such successor Trustee had itself authenticated such Certificates.

Section 6.12. Maintenance of Agencies. (a) There shall at all

times be maintained an office or agency where Certificates may be presented or

surrendered for registration of transfer or for exchange, and for payment

thereof and where notices and demands to or upon the Trustee in respect of the

Certificates or of this Trust Agreement may be served. Such office or agency

shall be initially at the Corporate Trust Office. Written notice of each such

other office or agency and of any change of location thereof shall be given by

the Trustee to the Company, the Indenture Trustee and the Certificateholders. In

the event that no such office or agency shall be maintained or no such notice of

location or of change of location shall be given, presentations and demands may

be made and notices may be served at the Corporate Trust Office of the Trustee.

(b) There shall at all times be a Registrar and a Paying Agent

hereunder. Each such Authorized Agent shall be a bank or trust company, shall be

a corporation organized and doing business under the laws of the United States

or any state, with a combined capital and surplus (together with that of its

parent) of at least $100,000,000, and shall be authorized under such laws to

exercise corporate trust powers, subject to supervision by Federal or state

authorities. The Trustee shall initially be the Paying Agent and, as provided in

Section 3.05, Registrar hereunder. Each Registrar shall furnish to the Trustee,

at stated intervals of not more than six months, and at such other times as the

Trustee may request in writing, a copy of the Register.

merged or converted or with which it may be consolidated, or any corporation

resulting from any merger, consolidation or conversion to which any Authorized

Agent shall be a party, or any corporation succeeding to the corporate trust

business of any Authorized Agent, shall be the successor of such Authorized

Agent hereunder, if such successor corporation is otherwise eligible under this

Section, without the execution or filing of any paper or any further act on the

part of the parties hereto or such Authorized Agent or such successor

corporation.

(d) Any Authorized Agent may at any time resign by giving

written notice of resignation to the Trustee, the Company and the Indenture

Trustee. The Company may, and at the request of the Trustee shall, at any time

terminate the agency of any Authorized Agent by giving written notice of

termination to such Authorized Agent and to the Trustee. Upon the resignation or

termination of an Authorized Agent or in case at any time any such Authorized

Agent shall cease to be eligible under this Section (when, in either case, no

other Authorized Agent performing the functions of such Authorized Agent shall

have been appointed), the Company shall promptly appoint one or more qualified

successor Authorized Agents, reasonably satisfactory to the Trustee, to perform

the functions of the Authorized Agent which has resigned or whose agency has

been terminated or who shall have ceased to be eligible under this Section.

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The Company shall give written notice of any such appointment made by it to the

Trustee and the Indenture Trustee; and in each case the Trustee shall mail

notice of such appointment to all Holders as their names and addresses appear on

the Register.

(e) The Company agrees to pay, or cause to be paid, from time

to time to each Authorized Agent the compensation as set forth in the schedule

agreed to by each Authorized Agent and the Company for its services and to

reimburse it for its reasonable expenses.

Section 6.13. Money for Certificate Payments to Be Held in

Trust. All moneys deposited with any Paying Agent for the purpose of any payment

on Certificates shall be deposited and held in trust for the benefit of the

Holders of the Certificates entitled to such payment, subject to the provisions

of this Section. Moneys so deposited and held in trust shall constitute a

separate trust fund for the benefit of the Holders of the Certificates with

respect to which such money was deposited.

The Trustee will cause each Paying Agent other than the

Trustee to execute and deliver to it an instrument in which such Paying Agent

shall agree with the Trustee, subject to the provisions of this Section, that

such Paying Agent will:

(1) hold all sums held by it for payments on Certificates in

trust for the benefit of the Persons entitled thereto until such sums

shall be paid to such Persons or otherwise disposed of as herein

provided;

(2) give the Trustee notice of any default by any obligor upon

the Certificates in the making of any such payment; and

(3) at any time during the continuance of any such default,

upon the written request of the Trustee, forthwith pay to the Trustee

all sums so held in trust by such Paying Agent.

The Trustee may at any time, for the purpose of obtaining the

satisfaction and discharge of this Trust Agreement or for any other purpose,

direct any Paying Agent to pay to the Trustee all sums held in trust by such

Paying Agent, such sums to be held by the Trustee upon the same trusts as those

upon which such sums were held by such Paying Agent; and, upon such payment by

any Paying Agent to the Trustee, such Paying Agent shall be released from all

further liability with respect to such money.

Section 6.14. Registration of Equipment Notes in Trustee's

Name. The Trustee agrees that all Equipment Notes and Specified Investments, if

any, shall be issued in the name of the Trustee or its nominee and held by the

Trustee, or, if not so held, the Trustee or its nominee shall be reflected as

the owner of such Equipment Notes or Specified Investments, as the case may be,

in the register of the issuer of such Equipment Notes or Specified Investments.

In no event shall the Trustee invest in, or hold, Equipment Notes or Specified

Investments in a manner that would cause the Trustee not to have the ownership

interest in such Equipment Notes or Specified Investments under the applicable

provisions of the Uniform Commercial Code in effect where the Trustee holds such

Equipment Notes or Specified Investments, or other applicable law then in

effect.

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Section 6.15. Representations and Warranties of Trustee. The

Trustee hereby represents and warrants that:

(i) the Trustee is a Delaware banking corporation duly

organized, validly existing, and in good standing under the laws of the

State of Delaware;

(ii) the Trustee has full corporate power, authority and legal

right under the laws of the State of Delaware and the laws of the

United States pertaining to its banking and trust powers to execute,

deliver, and perform this Trust Agreement and has taken all necessary

action to authorize the execution, delivery, and performance by it of

this Trust Agreement;

(iii) the execution, delivery and performance by the Trustee

of this Trust Agreement will not contravene any law, rule or regulation

of the State of Delaware or any United States governmental authority or

agency regulating the Trustee's banking or trust powers or any judgment

or order applicable to or binding on the Trustee and will not

contravene or result in any breach of, or constitute a default under,

the Trustee's charter or by-laws or the provision of any indenture,

mortgage, contract or other agreement to which it is a party or by

which it or any of its properties is bound;

(iv) the execution, delivery and performance by the Trustee of

this Trust Agreement will not require the authorization, consent, or

approval of, the giving of notice to, the filing or registration with,

or the taking of any other action in respect of, any United States or

Delaware governmental authority or agency regulating the banking and

trust activities of the Trustee; and

(v) this Trust Agreement has been duly executed and delivered

by the Trustee and constitutes the legal, valid, and binding agreements

of the Trustee, enforceable in accordance with its terms, provided that

enforceability may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the rights of

creditors generally and general principles of equity.

Section 6.16. Withholding Taxes; Information Reporting; Tax

Returns. The Trustee, as trustee of a grantor trust, shall exclude and withhold

from each distribution of principal, premium, if any, and interest and other

amounts due hereunder or under the Certificates any and all federal withholding

taxes applicable thereto as required by federal law. The Trustee agrees to act

as such withholding agent and, in connection therewith, whenever any present or

future taxes or similar charges are required to be withheld with respect to any

amounts payable in respect of the Certificates, to withhold such amounts and

timely pay the same to the appropriate authority in the name of and on behalf of

the Holders of the Certificates, that it will file any necessary withholding tax

returns or statements when due, and that, as promptly as possible after the

payment thereof, it will deliver to each Holder of a Certificate appropriate

documentation showing the payment thereof, together with such additional

documentary evidence as such Holders may reasonably request from time to time.

The Trustee agrees to file any other information reports and tax returns and

forms as it may be required to file relating to such withholding taxes and shall

otherwise file any other information reports as it may be

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requested and directed to file under applicable law. The Trustee shall be

permitted to rely upon any properly completed certificate presented by a Holder

of Certificates claiming an exemption from or reduction of withholding taxes,

absent bad faith on the part of the Trustee. Each Certificateholder agrees to

indemnify (on an after-tax basis) and hold harmless the Trustee against any

United States withholding taxes and related interest and penalties which the

Trustee fails to withhold on payments to such Certificateholder as a result of

the invalidity of any certificate or form provided by such Certificateholder to

the Trustee. Any amount payable by a Certificateholder hereunder shall be paid

within 30 days after receipt by a Certificateholder of a written demand thereof.

Section 6.17. Trustee's Liens. The Trustee, in its individual

capacity, agrees that it will at its own cost and expense promptly take any

action as may be necessary to duly discharge and satisfy in full any mortgage,

pledge, lien, charge, encumbrance, security interest or claim ("Trustee's

Liens") on or with respect to the Trust Property which is either (i)

attributable to the Trustee in its individual capacity and which is unrelated to

the transactions contemplated by this Trust Agreement or the other Transaction

Documents, or (ii) which is attributable to the Trustee as trustee hereunder or

in its individual capacity and which arise out of acts or omissions which are

prohibited by this Trust Agreement.

ARTICLE VII.

THE COMPANY

Section 7.01. Maintenance of Corporate Existence. The Company,

at its own cost and expense, will do or cause to be done all things necessary to

preserve and keep in full force and effect its corporate existence, rights and

franchises, except as otherwise specifically permitted in Section 7.02;

provided, however, that the Company shall not be required to preserve any right

or franchise if the Company determines that the preservation thereof is no

longer desirable in the conduct of the business of the Company.

Section 7.02. Consolidation, Merger, Etc. (a) Each of the

Company and the Guarantor agrees that it shall not consolidate with or merge

into any other corporation under circumstances where the Company or the

Guarantor is not the surviving corporation or convey, transfer or lease

substantially all of its assets as an entirety to any Person (other than the

Guarantor) unless the corporation formed by such consolidation or into which the

Company or Guarantor is merged or the Person that acquires by conveyance,

transfer or lease substantially all of the assets of the Company or the

Guarantor, as the case may be, as an entirety shall be organized and validly

existing under the laws of the United States of America or any state thereof or

the District of Columbia, and such corporation or Person executes and delivers

to the Trustee an agreement in form and substance reasonably satisfactory to the

Trustee containing an assumption by such successor or transferee entity of the

due and punctual performance and observance of each covenant and condition of

this Trust Agreement.

(b) Upon any such consolidation, merger, conveyance, transfer

or lease, the successor or transferee entity shall succeed to, and be

substituted for, and may exercise every

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right and power of, the Company or the Guarantor, as the case may be, under this

Trust Agreement with the same effect as if such successor or transferee entity

had been named as the Company or the Guarantor herein.

Event of Default or event which with notice or the passage of time or both would

be an Event of Default shall have occurred and be continuing.

(d) The Trustee may receive an Officer's Certificate and an

Opinion of Counsel of the Company or the Guarantor, as the case may be, as

conclusive evidence that any such consolidation, merger, conveyance, transfer or

lease, and any such assumption, complies with the provisions of this Section

7.02.

ARTICLE VIII.

CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

Section 8.01. The Company to Furnish Trustee with Names and

Addresses of Certificateholders. The Company will furnish to the Trustee within

15 days after each Record Date with respect to a Scheduled Payment, and at such

other times as the Trustee may request in writing, within 30 days after receipt

by the Company of any such request, a list, in such form as the Trustee may

reasonably require, of all information in the possession or control of the

Company as to the names and addresses of the Holders of Certificates, in each

case as of a date not more than 15 days prior to the time such list is

furnished; provided, however, that so long as the Trustee is the sole Registrar,

no such list need be furnished; and provided further, however, that no such list

need be furnished for so long as a copy of the Register is being furnished to

the Trustee pursuant to Section 6.12(b).

Section 8.02. Preservation of Information; Communications to

Certificateholders. (a) The Trustee shall preserve, in as current a form as is

reasonably practicable, the names and addresses of the Holders of Certificates

contained in the most recent list furnished to the Trustee as provided in

Section 6.12(b) or Section 8.01, as the case may be, and the names and addresses

of Holders of Certificates received by the Trustee in its capacity as Registrar,

if so acting. The Trustee may destroy any list furnished to it as provided in

Section 6.12(b) or Section 8.01, as the case may be, upon receipt of a new list

so furnished.

(b) If three or more Holders of Certificates (such Holders

hereinafter referred to as "applicants") apply in writing to the Trustee, and

furnish to the Trustee reasonable proof that each such applicant has owned a

Certificate for a period of at least six months preceding the date of such

application, and such application states that the applicants desire to

communicate with other Holders of Certificates with respect to their rights

under this Trust Agreement or under the Certificates and is accompanied by a

copy of the form of proxy or other communication which such applicants propose

to transmit, then the Trustee shall, within five Business Days after the receipt

of such application, at its election, either:

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(ii) afford such applicants access to the information

preserved at the time by the Trustee in accordance with Section

8.02(a); or

(iii) inform such applicants as to the approximate number of

Holders of Certificates whose names and addresses appear in the

information preserved at the time by the Trustee in accordance with

Section 8.02(a), and as to the approximate cost of mailing to such

Certificateholders the form of proxy or other communication, if any,

specified in such application.

If the Trustee shall elect not to afford such applicants

access to such information, the Trustee shall, upon the written request of such

applicants, mail to each Certificateholder whose name and address appear in the

information preserved at the time by the Trustee in accordance with Section

8.02(a), a copy of the form of proxy or other communication which is specified

in such request, with reasonable promptness after a tender to the Trustee of the

material to be mailed and of payment, or provision for the payment, of the

reasonable expenses of mailing, unless within five Business Days after such

tender, the Trustee shall mail to such applicants, together with a copy of the

material to be mailed, a written statement to the effect that, in the opinion of

the Trustee, such mailing would be contrary to the best interests of the Holders

of Certificates or would be in violation of applicable law. Such written

statement shall specify the basis of such opinion. If the applicants shall

obtain a court order, after notice to the Trustee and opportunity for hearing,

so directing the Trustee, the Trustee shall mail copies of such material to all

such Certificateholders with reasonable promptness after the entry of such order

and the renewal of the applicants' tender.

same, agrees with the Company and the Trustee that neither the Company nor the

Trustee shall be held accountable by reason of the disclosure of any such

information as to the names and addresses of the Holders of Certificates in

accordance with Section 8.02(b), regardless of the source from which such

information was derived, and that the Trustee shall not be held accountable by

reason of mailing any material pursuant to a request made under Section 8.02(b).

Section 8.03. Reports by the Company. The Company will:

(a) while any of the Certificates remain outstanding, make

available, upon request, to any seller of the Certificates or any beneficial

interest therein the information specified in Rule 144A(d)(4) under the

Securities Act unless such information is not required to be so furnished

pursuant to such Rule 144A(d)(4);

(b) file with the Trustee, within 30 days after the Guarantor

is required to file the same with the Commission, copies of the annual reports

and of the information, documents and other reports (or copies of such portions

of any of the foregoing as the Commission may from time to time by rules and

regulations prescribe) which the Guarantor may be required to file with the

Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange

Act of 1934; or if the Guarantor is not required to file information, documents

or reports pursuant to either of said Sections, then it will file with the

Trustee and the Commission, in accordance with rules and regulations prescribed

from time to time by the Commission, such of the supplementary and

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periodic information, documents and reports which may be required pursuant to

Section 13 of the Securities Exchange Act of 1934 in respect of a security

listed and registered on a national securities exchange as may be prescribed

from time to time in such rules and regulations.

ARTICLE IX.

SUPPLEMENTAL TRUST AGREEMENTS

Section 9.01. Supplemental Trust Agreements Without Consent of

Certificateholders. Without the consent of the Holder of any Certificates, the

Company may, and the Trustee (subject to Section 9.03 and upon receipt of an

Officer's Certificate of the Company) shall, at any time and from time to time

enter into one or more agreements supplemental hereto, in form satisfactory to

the Trustee, for any of the following purposes so long as such agreement shall

not cause the Trust to cease to qualify as a "grantor trust" (within the meaning

of Subpart E, Part I, Subchapter J of the Code) for U.S. federal income tax

purposes:

(1) to evidence the succession of another corporation to the

Company, and the assumption by any such successor of the obligations of

the Company herein contained; or

(2) to add to the covenants of the Company, for the benefit of

the Holders of the Certificates, or to surrender any right or power

herein conferred upon the Company;

(3) to cure any ambiguity, to correct or supplement any

provision herein which may be defective or inconsistent with any other

provision herein or to make any other provisions with respect to

matters or questions arising under this Trust Agreement as may be

necessary or desirable; provided that any such action shall not

adversely affect the interests of the Holders of the Certificates; or

(4) to evidence and provide for the acceptance of appointment

under this Trust Agreement of a successor Trustee with respect to the

Trust and to add or change any of the provisions of this Trust

Agreement as shall be necessary to provide for or facilitate the

administration of the Trust, provided that any such action shall not

adversely affect the interests of the Holders of the Certificates.

Section 9.02. Supplemental Trust Agreements with Consent of

Certificateholders. With the consent of the Holders of Certificates evidencing

Fractional Undivided Interests aggregating not less than a majority in interest

in the Trust, by Act of said Holders delivered to the Company and the Trustee,

the Company may, and the Trustee (subject to Section 9.03) shall, enter into an

agreement or agreements supplemental hereto for the purpose of adding any

provisions to or changing in any manner or eliminating any of the provisions of

this Trust Agreement or of modifying in any manner the rights and obligations of

the Holders of the Certificates under this Trust Agreement; provided, however,

that no such supplemental agreement shall, without the consent of the Holder of

each Outstanding Certificate affected thereby:

-39-

(1) reduce in any manner the amount of, or delay the timing

of, any receipt by the Trustee of payments on the Equipment Notes or

distributions that are required to be made herein on any Certificate,

or change any date of payment on any Certificate, or change the place

of payment where, or the coin or currency in which, any Certificate is

payable, or impair the right to institute suit for the enforcement of

any such payment or distribution on or after the Regular Distribution

Date or Special Distribution Date applicable thereto; or

(2) permit the disposition of any Equipment Note in the Trust

Property except as permitted by this Trust Agreement, or otherwise

deprive any Certificateholder of the benefit of the ownership of the

Equipment Notes in the Trust; or

(3) reduce the percentage of the aggregate Fractional

Undivided Interests of the Trust which is required for any such

supplemental agreement, or reduce such percentage required for any

waiver (of compliance with certain provisions of this Trust Agreement

or certain defaults hereunder and their consequences) provided for in

this Trust Agreement;

(4) modify any of the provisions of this Section or Section

5.05, except to increase any such percentage or to provide that certain

other provisions of this Trust Agreement cannot be modified or waived

without the consent of the Holder of each Certificate affected thereby;

(5) cause the Trust to cease to qualify as a "grantor trust"

(within the meaning of Subpart E, Part I, Subchapter J of the Code) for

U.S. federal income tax purposes.

It shall not be necessary for any Act of Certificateholders

under this Section to approve the particular form of any proposed supplemental

agreement, but it shall be sufficient if such Act shall approve the substance

thereof.

Section 9.03. Documents Affecting Immunity or Indemnity. If in

the opinion of the Trustee any document required to be executed by it pursuant

to the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity

or indemnity in favor of the Trustee under this Trust Agreement, the Trustee may

in its discretion decline to execute such document.

Section 9.04. Execution of Supplemental Trust Agreements. In

executing, or accepting the additional trusts created by, any supplemental

agreement permitted by this Article or the modifications thereby of the trusts

created by this Trust Agreement, the Trustee shall be entitled to receive, and

(subject to Section 6.01) shall be fully protected in relying upon, an Opinion

of Counsel stating that the execution of such supplemental agreement is

authorized or permitted by this Trust Agreement.

Section 9.05. Effect of Supplemental Trust Agreements. Upon

the execution of any supplemental agreement under this Article, this Trust

Agreement shall be modified in accordance therewith, and such supplemental

agreement shall form a part of this Trust Agreement for all purposes; and every

Holder of Certificates theretofore or thereafter authenticated and delivered

hereunder shall be bound thereby.

-40-

Section 9.06. Reference in Certificates to Supplemental Trust

Agreements. Certificates authenticated and delivered after the execution of any

supplemental agreement pursuant to this Article may bear a notation in form

approved by the Trustee as to any matter provided for in such supplemental

agreement; and, in such case, suitable notation may be made upon Outstanding

Certificates after proper presentation and demand.

ARTICLE X.

AMENDMENTS TO TRANSACTION DOCUMENTS

Section 10.01. Amendments and Supplements to Transaction

Documents. In the event that the Trustee, as holder of any Equipment Note in

trust for the benefit of the Certificateholders, receives a request for a

consent to any amendment, modification, waiver or supplement under any

Indenture, the Trustee shall forthwith send a notice of such proposed amendment,

modification, waiver or supplement, to each Certificateholder registered on the

Directions as to (i) whether or not to direct the Indenture Trustee to take or

refrain from taking any action which a holder of such Equipment Note has the

option to direct, (ii) whether or not to give or execute any waivers, consents,

amendments, modifications or supplements as a holder of such Equipment Note, and

(iii) how to vote any Equipment Note if a vote has been called for with respect

thereto. Provided such a request for Certificateholder Direction shall have been

made, in directing any action or casting any vote or giving any consent as the

holder of any Equipment Note, the Trustee shall vote or consent with respect to

such Equipment Note in the same proportion as the Certificates were actually

voted by Acts of Holders delivered to the Trustee prior to two Business Days

before the Trustee directs such action or casts such vote or gives such consent.

Notwithstanding the foregoing, but subject to Section 5.04, in the case that an

Event of Default hereunder shall have occurred and be continuing, the Trustee

may, in its own discretion and at its own direction, consent and notify the

Indenture Trustee of such consent to any amendment, modification, waiver or

supplement under any Indenture. Any action under an Indenture which requires the

unanimous consent of all holders of the Equipment Notes outstanding under such

Indenture shall require the unanimous consent of the Certificateholders.

If in the opinion of the Trustee any document required to be

executed by it pursuant to the terms of this Section adversely affects any

interest, right, duty, immunity or indemnity in favor of the Trustee under this

Trust Agreement, the Trustee may in its discretion decline to execute such

document.

ARTICLE XI.

TERMINATION OF TRUST

Section 11.01. Termination of the Trust. The respective

obligations and responsibilities of the Company and the Trustee created hereby

and the Trust created hereby shall terminate upon the distribution to all

Certificateholders of all amounts required to be

-41-

distributed to them pursuant to this Trust Agreement and the disposition of all

property held as part of the Trust Property; provided, however, that in no event

shall the Trust created hereby continue beyond the expiration of 21 years from

the death of the last survivor of the descendants of George Herbert Walker Bush,

former President of the United States, living on the date of this Trust

Agreement.

Notice of any termination, specifying the Regular Distribution

Date (or Special Distribution Date, as the case may be) upon which the

Certificateholders may surrender their Certificates to the Trustee for payment

of the final distribution and cancellation, shall be mailed promptly by the

Trustee to Certificateholders not earlier than the 60th day and not later than

the 20th day next preceding such final distribution specifying (A) the Regular

Distribution Date (or Special Distribution Date, as the case may be) upon which

final payment of the Certificates will be made upon presentation and surrender

of Certificates at the office or agency of the Trustee therein specified, (B)

the amount of any such final payment, and (C) that the Record Date otherwise

applicable to such Regular Distribution Date (or Special Distribution Date, as

the case may be) is not applicable, payments being made only upon presentation

and surrender of the Certificates at the office or agency of the Trustee therein

specified. The Trustee shall give such notice to the Registrar at the time such

notice is given to Certificateholders. Upon presentation and surrender of the

Certificates, the Trustee shall cause to be distributed to Certificateholders

amounts distributable on such Regular Distribution Date or Special Distribution

Date, as the case may be, pursuant to Section 4.02.

In the event that all of the Certificateholders shall not

surrender their Certificates for cancellation within six months after the date

specified in the above-mentioned written notice, the Trustee shall give a second

written notice to the remaining Certificateholders to surrender their

Certificates for cancellation and receive the final distribution with respect

thereto. In the event that any money held by the Trustee for the payment of

distributions on the Certificates shall remain unclaimed for two years (or such

lesser time as the Trustee shall be satisfied, after sixty days' notice from the

Company, is one month prior to the escheat period provided under applicable law)

after the final distribution date with respect thereto, the Trustee shall pay to

the Indenture Trustee the appropriate amount of money relating to the Indenture

Trustee and shall give written notice thereof to the Company.

ARTICLE XII.

MISCELLANEOUS PROVISIONS

Section 12.01. Limitation on Rights of Certificateholders. The

death or incapacity of any Certificateholder shall not operate to terminate this

Trust Agreement or the Trust, nor entitle such Certificateholder's legal

representatives or heirs to claim an accounting or to take any action or

commence any proceeding in any court for a partition or winding up of the Trust,

nor otherwise affect the rights, obligations, and liabilities of the parties

hereto or any of them.

Section 12.02. Certificates Nonassessable and Fully Paid.

Certificateholders shall not be personally liable for obligations of the Trust.

The Fractional Undivided Interests

-42-

represented by the Certificates shall be nonassessable for any losses or

expenses of the Trust or for any reason whatsoever, and Certificates upon

authentication thereof by the Trustee pursuant to Section 3.02 are and shall be

deemed fully paid. No Certificateholder shall have any right (except as

expressly provided herein) to vote or in any manner otherwise control the

operation and management of the Trust Property, the Trust established hereunder,

or the obligations of the parties hereto, nor shall anything set forth herein,

or contained in the terms of the Certificates, be construed so as to constitute

the Certificateholders from time to time as partners or members of an

association.

Section 12.03. Notices. All demands, notices, and

communications hereunder shall be in writing, personally delivered or mailed by

certified mail return receipt requested, and shall be deemed to have been duly

given upon receipt, in the case of the Company and the Guarantor, at the

following address: Trinity Industries Leasing Company, 2525 Stemmons Freeway,

Dallas, Texas 75207, Attention: General Counsel, and in the case of the Trustee,

at the following address: Rodney Square North, 1100 North Market Street,

Wilmington, Delaware 19890, Attention: Corporate Trust Administration, or, in

each case, at such other address as shall be designated by such party in a

written notice to the other parties. Any notice required or permitted to be

given to a Certificateholder hereunder shall be mailed by first class mail,

postage prepaid, at the address of such Holder as shown in the Register. Any

notice so mailed within the time prescribed in this Trust Agreement shall be

conclusively presumed to have been duly given, whether or not the

Certificateholder receives such notice. The Trustee shall promptly furnish the

Company with a copy of each demand, notice or written communication received by

the Trustee hereunder from any Certificateholder or the Indenture Trustee.

Section 12.04. Governing Law. THIS TRUST AGREEMENT HAS BEEN

DELIVERED IN THE STATE OF NEW YORK AND TOGETHER WITH THE CERTIFICATES SHALL BE

GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK

AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE

DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 12.05. Severability of Provisions. If any one or more

of the covenants, agreements, provisions, or terms of this Trust Agreement shall

be for any reason whatsoever held invalid, then such covenants, agreements,

provisions, or terms shall be deemed severable from the remaining covenants,

agreements, provisions, or terms of this Trust Agreement and shall in no way

affect the validity or enforceability of the other provisions of this Trust

Agreement or the Trust, or of the Certificates or the rights of the Holders

thereof.

Section 12.06. Effect of Headings and Table of Contents. The

Article and Section headings herein and the Table of Contents are for

convenience only and shall not affect the construction hereof.

Section 12.07. Successors and Assigns. All covenants,

agreements, representations and warranties in this Trust Agreement by the

Trustee and the Company shall bind and, to the extent permitted hereby, shall

inure to the benefit of and be enforceable by their respective successors and

assigns, whether so expressed or not.

-43-

Section 12.08. Benefits of Trust Agreement. Nothing in this

Trust Agreement or in the Certificates, express or implied, shall give to any

Person, other than the parties hereto and their successors hereunder, and the

Holders of Certificates, any benefit or any legal or equitable right, remedy or

claim under this Trust Agreement.

Section 12.09. Legal Holidays. In any case where any Regular

Distribution Date or Special Distribution Date relating to any Certificate shall

not be a Business Day, then (notwithstanding any other provision of this Trust

Agreement) payment need not be made on such date, but may be made on the next

succeeding Business Day with the same force and effect as if made on such

Regular Distribution Date or Special Distribution Date, and no interest shall

accrue during the intervening period.

Section 12.10. Counterpart. For the purpose of facilitating

the execution of this Trust Agreement and for other purposes, this Trust

Agreement may be executed simultaneously in any number of counterparts, each of

which counterparts shall be deemed to be an original, and all of which

counterparts shall constitute but one and the same instrument.

Section 12.11. Tax Treatment. For United States federal income

tax purposes, the Equipment Notes shall be treated as debt obligations, and

interest and other income arising thereunder shall be treated as from sources

within the United States in accordance with United States federal income tax

principles and the Trust shall be treated as a "grantor trust" (within the

meaning of Subpart E, Part I, Subchapter J of the Code) so that each

Certificateholder will be treated as owning a pro rata undivided interest in the

Equipment Notes.

Section 12.12. No Partnership. All parties to this Trust

Agreement and each Certificateholder, by his acceptance of a Certificate,

specifically disavow any intent to form a partnership or joint venture for U.S.

federal income tax purposes or otherwise, and agree not to make any filings or

take any positions inconsistent with such intent.

-44-

IN WITNESS WHEREOF, the Company, the Guarantor and the Trustee

have caused this Trust Agreement to be duly executed by their respective

officers, all as of the day and year first above written.

TRINITY INDUSTRIES LEASING COMPANY,

Company

By:

-------------------------------

Name:

Title:

TRINITY INDUSTRIES, INC.,

Guarantor

By:

--------------------------------

Name:

Title:

WILMINGTON TRUST COMPANY,

Trustee

By:

--------------------------------

Name:

Title:

-45-

EXHIBIT A

[FORM OF CERTIFICATE]

TRINITY INDUSTRIES LEASING COMPANY

2002-1 PASS THROUGH TRUST

THIS PASS THROUGH CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT

OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.

NEITHER THIS PASS THROUGH CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN

MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE

DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION

THEREFROM.

THE HOLDER OF THIS PASS THROUGH CERTIFICATE, BY ITS ACCEPTANCE HEREOF, AGREES

FOR THE BENEFIT OF THE ISSUER THAT (A) THIS PASS THROUGH CERTIFICATE MAY BE

OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) INSIDE THE UNITED

STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED

INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A

TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED

STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE

SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE

SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE) OR (IV) PURSUANT TO AN

EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)

THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF

THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS

REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS PASS THROUGH CERTIFICATE

FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF

THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF

TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF

CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF

THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE

TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER

USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE

REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT

NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH

SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE

LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN

SECTION 3.07 OF THE TRUST AGREEMENT REFERRED TO HEREIN.

BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT EITHER (I) IT IS NOT (A)

AN "EMPLOYEE BENEFIT PLAN" SUBJECT TO TITLE I OF ERISA, (B) A PLAN SUBJECT TO

SECTION 4975 OF THE CODE, (C) AN ENTITY THE UNDERLYING ASSETS OF WHICH INCLUDE

THE ASSETS OF ANY

EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR

(D) A GOVERNMENTAL OR OTHER PLAN THAT IS SUBJECT TO ANY LAW THAT IS

SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975

OF THE CODE, OR (II) THE PURCHASE AND HOLDING OF THIS CERTIFICATE OR INTEREST

THEREIN BY SUCH HOLDER WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION

406 OF ERISA, SECTION 4975 OF THE CODE OR ANY SUBSTANTIALLY SIMILAR LAW FOR

WHICH AN EXEMPTION IS NOT AVAILABLE.

-2-

TRINITY INDUSTRIES LEASING COMPANY

2002-1 PASS THROUGH TRUST

7.755% Pass Through

Certificate, Series 2002-1

CUSIP

---------

Final Expected Regular Distribution Date:

-----------

Evidencing a fractional undivided interest in

a trust, the property of which includes

certain equipment notes, each secured by

certain railcars owned by

Trinity Industries Leasing Company

Certificate No. $_________ fractional Undivided

Interest representing

.000588235% of the Trust per

$1,000 face amount

THIS CERTIFIES THAT ____________, for value received, is the

registered owner of a $__________ (_____________ Dollars) (as such amount may be

increased or decreased from time to time as provided in the Agreement)

Fractional Undivided Interest in the Trinity Industries Leasing Company 2002-1

Pass Through Trust (the "Trust") created pursuant to a Pass Through Trust

Agreement dated as of February 15, 2002 (as amended from time to time, the

"Agreement"), among Trinity Industries Leasing Company, a corporation

incorporated under Delaware law (the "Company"), Trinity Industries, Inc., a

corporation incorporated under Delaware law (the "Guarantor") and Wilmington

Trust Company, as trustee (the "Trustee"), a summary of certain of the pertinent

provisions of which is set forth below. To the extent not otherwise defined

herein, the capitalized terms used herein have the meanings assigned to them in

the Agreement. This Certificate is one of the duly authorized Certificates

designated as "7.755% Pass Through Certificates, Series 2002-1" (herein called

the "Certificates"). This Certificate is issued under and is subject to the

terms, provisions, and conditions of the Agreement, to which Agreement the

Holder of this Certificate by virtue of the acceptance hereof assents and by

which such Holder is bound. The property of the Trust includes certain Equipment

Notes and certain funds received in connection therewith (the "Trust Property").

Each issue of Equipment Notes is secured by a security interest in railroad

rolling stock owned by the Company and fully and unconditionally guaranteed by

the Guarantor. Subject to and in accordance with the terms of the Agreement,

from funds then available to the Trustee, there will be distributed on each

February 15 and August 15 (each, a "Regular Distribution Date"), commencing on

August 15, 2002, to the Person in whose name this Certificate is registered at

the close of business on the day of the month which is 15 days preceding the

Regular Distribution Date, an amount in respect of the Scheduled Payments on the

Equipment Notes due on such Distribution Date, the receipt of which has been

confirmed by the Trustee, equal to the product of the percentage interest in the

Trust evidenced by this Certificate and an amount equal to the

-3-

sum of such Scheduled Payments so received. Subject to and in accordance with

the terms of the Agreement, in the event that Special Payments on the Equipment

Notes are received by the Trustee, from funds then available to the Trustee,

there shall be distributed on the applicable Special Distribution Date, to the

Person in whose name this Certificate is registered at the close of business on

the day of the month which is 15 days preceding the Special Distribution Date,

an amount in respect of such Special Payments on the Equipment Notes, the

receipt of which has been confirmed by the Trustee, equal to the product of the

percentage interest in the Trust evidenced by this Certificate and an amount

equal to the sum of such Special Payments so received. If a Regular Distribution

Date or Special Distribution Date is not a Business Day, distribution shall be

made on the immediately following Business Day and no additional interest shall

accrue. The Special Distribution Date shall be the day of the month determined

as provided in the Agreement. The Trustee shall mail notice of each Special

Payment and the Special Distribution Date therefor to the Holders of the

Certificates.

Distributions on this Certificate will be made by the Trustee

by check mailed to the Person entitled thereto, without the presentation or

surrender of this Certificate or the making of any notation hereon. Except as

otherwise provided in the Agreement and notwithstanding the above, the final

distribution on this Certificate will be made after notice mailed by the Trustee

of the pendency of such distribution and only upon presentation and surrender of

this Certificate at the office or agency of the Trustee specified in such

notice.

The Agreement provides that for United States federal income

tax purposes, interest and other income arising under the Equipment Notes shall

be treated as from sources within the United States and the Trust shall be

treated as a "grantor trust" (within the meaning of Subpart E, Part I,

Subchapter J of the Code) so that each Certificateholder will be treated as

owning a proportionate undivided interest in the Equipment Notes. Furthermore,

pursuant to the Agreement, by acceptance of a Certificate, each

Certificateholder specifically disavows any intent to form a partnership or

joint venture for U.S. federal income tax purposes or otherwise, and agrees not

to make any filings or take any positions inconsistent with such intent.

THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Reference is hereby made to the further provisions of this

Certificate set forth on the reverse hereof, which further provisions shall for

all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been

executed by the Trustee, by manual signature, this Certificate shall not be

entitled to any benefit under the Agreement or be valid for any purpose.

-4-

IN WITNESS WHEREOF, the Trustee has caused this Certificate to

be duly executed.

WILMINGTON TRUST COMPANY,

not in its individual capacity but solely as

Trustee of TRINITY INDUSTRIES LEASING COMPANY

2002-1 PASS THROUGH TRUST,

By:

-----------------------------------------

Name:

Title:

-5-

[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

Dated:

This is one of the Certificates referred

to in the within-mentioned Agreement

WILMINGTON TRUST COMPANY,

as Trustee,

By:

-----------------------------------------

Authorized Signatory

[Reverse of Certificate]

The Certificates do not represent a direct obligation of, or

an obligation guaranteed by, or an interest in, the Company or the Trustee or

any Affiliate thereof. The Certificates are limited in right of payment, all as

more specifically set forth on the face hereof and in the Agreement. All

payments or distributions made to Certificateholders under the Agreement shall

be made only from the Trust Property and only to the extent that the Trustee

shall have sufficient income or proceeds from the Trust Property to make such

payments in accordance with the terms of the Agreement. Each Holder of this

Certificate, by its acceptance hereof, agrees that it will look solely to the

income and proceeds from the Trust Property to the extent available for

distribution to such Holder as provided in the Agreement. This Certificate does

not purport to summarize the Agreement and reference is made to the Agreement

for information with respect to the interests, rights, benefits, obligations,

proceeds and duties evidenced hereby. A copy of the Agreement may be examined

during normal business hours at the principal office of the Trustee, and at such

other places, if any, designated by the Trustee, by any Certificateholder upon

request.

The Agreement permits, with certain exceptions therein

provided, the amendment thereof and the modification of the rights and

obligations of the Company and the rights of the Certificateholders under the

Agreement at any time by the Company and the Trustee with the consent of the

Holders of Certificates evidencing Fractional Undivided Interests aggregating

not less than a majority in interest in the Trust. Any such consent by the

Holder of this Certificate shall be conclusive and binding on such Holder and

upon all future Holders of this Certificate and of any Certificate issued upon

the transfer hereof or in exchange hereof or in lieu hereof whether or not

notation of such consent is made upon this Certificate. The Agreement also

permits the amendment thereof, in certain limited circumstances, without the

consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain

limitations therein set forth, the transfer of this Certificate is registrable

in the Register upon surrender of this Certificate for registration of transfer

at the offices or agencies maintained by the Trustee in its capacity as

Registrar, or by any successor Registrar, duly endorsed or accompanied by a

written instrument of transfer in form satisfactory to the Trustee and the

Registrar duly executed by the Holder hereof or such Holder's attorney duly

authorized in writing, and thereupon one or more new Certificates of authorized

denominations evidencing the same aggregate Fractional Undivided Interest in the

Trust will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates

without coupons in minimum denominations of $100,000 Fractional Undivided

Interest and integral multiples of $1,000 in excess thereof except that one

Certificate may be in a denomination of less than $1,000. As provided in the

Agreement and subject to certain limitations therein set forth, Certificates are

exchangeable for new Certificates of authorized denominations evidencing the

same aggregate Fractional Undivided Interest in the Trust, as requested by the

Holder surrendering the same.

No service charge will be made for any such registration of

transfer or exchange, but the Trustee shall require payment of a sum sufficient

to cover any tax or governmental charge payable in connection therewith.

The Trustee, the Registrar, and any agent of the Trustee or

the Registrar may treat the person in whose name this Certificate is registered

as the owner hereof for all purposes, and neither the Trustee, the Registrar,

nor any such agent shall be affected by any notice to the contrary.

The obligations and responsibilities created by the Agreement and the Trust

created thereby shall terminate upon the distribution to Certificateholders of

all amounts required to be distributed to them pursuant to the Agreement and the

disposition of all property held as part of the Trust Property.

-2-

EXHIBIT B

FORM OF

LETTER OF REPRESENTATIONS

B-1

EXHIBIT C

Trust

Agreement

Form of Certificate for Unlegended Certificates

Wilmington Trust Company

[Address] [DATE]

Attention: Corporate Trust Administration

Re: Trinity Industries Leasing Company 2002-1 Pass Through Trust

7.755% 2002-1 Pass Through Certificates (the "Certificates")

Ladies and Gentlemen:

This letter relates to $ ____________ Fractional Undivided

Interest of Certificates represented by a Certificate (the "Legended

Certificate") which bears a legend outlining restrictions upon transfer of such

Legended Certificate. Pursuant to Section 3.01 of the Pass Through Trust

Agreement (the "Agreement") dated as of February 15, 2002 relating to the

Certificate, we hereby certify that we are (or we will hold such Certificate on

behalf of) a person outside the United States to whom the Certificates could be

transferred in accordance with Rule 904 of Regulation S promulgated under the

U.S. Securities Act of 1933, as amended. Accordingly, you are hereby requested

to exchange the legended certificate for an unlegended certificate representing

an identical principal amount of Certificates, all in the manner provided for in

the Agreement.

You and the Company are entitled to rely upon this letter and

are irrevocably authorized to produce this letter or a copy hereof to any

interested party in any administrative or legal proceedings or official inquiry

with respect to the matters covered hereby. Terms used in this certificate have

the meanings set forth in Regulation S.

Very truly yours,

[Name of Holder]

By:

----------------------------

Authorized Signature

C-1

EXHIBIT D

Trust Agreement

Form of Certificate to Be Delivered

in Connection with Transfers

Pursuant to Regulation S

Wilmington Trust Company

[Address] [DATE]

Attention: Corporate Trust Administration

Re: Trinity Industries Leasing Company 2002-1 Pass Through Trust

7.755% 2002-1 Pass Through Certificates (the "Certificates")

Ladies and Gentlemen:

In connection with our proposed sale of $ _______ Fractional

Undivided Interest of the Certificates, we confirm that such sale has been

effected pursuant to and in accordance with Regulation S under the Securities

Act of 1933, as amended, and, accordingly, we represent that:

1. the offer of the Certificates was not made to a person in

the United States;

2. at the time the buy order was originated, the transferee

was outside the United States or we and any person acting on our behalf

reasonably believed that the transferee was outside the United States;

3. no directed selling efforts have been made by us in the

United States in contravention of the requirements of Rule 903(b) or

Rule 904(b) of Regulation S, as applicable; and

4. the transaction is not part of a plan or scheme to evade

the registration requirements of the U.S. Securities Act of 1933.

You and the Company are entitled to rely upon this letter and

are irrevocably authorized to produce this letter or a copy hereof to any

interested party in any administrative or legal proceedings or official inquiry

with respect to the matters covered hereby. Terms used in this certificate have

the meanings set forth in Regulation S.

Very truly yours,

[Name of Transferor]

By:

----------------------------

Authorized Signature

D-1

EXHIBIT E

Trust Agreement

[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby

sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

--------------------------------------------------------------------------------

Please print or typewrite name and address including zip code of assignee

--------------------------------------------------------------------------------

the within Certificate and all rights thereunder, hereby irrevocably

constituting and appointing ______________________________________ attorney to

transfer said Certificate on the books of the Company with full power of

substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL CERTIFICATES OTHER THAN UNLEGENDED

REGULATION S GLOBAL AND UNLEGENDED

REGULATION S CERTIFICATED CERTIFICATES]

In connection with any transfer of this Certificate occurring prior to the date

which is the end of the period referred to in Rule 144(k) under the Securities

Act, the undersigned confirms that without utilizing any general solicitation or

general advertising that:

[Check One]

[ ](a) this Certificate is being transferred in compliance with the

exemption from registration under the Securities Act of 1933, as

amended, provided by Rule 144A thereunder.

[ ](b) this Certificate is being transferred other than in accordance

with (a) above and documents are being furnished which comply with the

conditions of transfer set forth in this Certificate and the Trust

Agreement.

If none of the foregoing boxes is checked, the Trustee or other Registrar shall

not be obligated to register this Certificate in the name of any Person other

than the Holder hereof unless and until the conditions to any such transfer of

registration set forth herein and in Section 3.07 of the Indenture shall have

been satisfied.

E-1

Date:

--------------- -----------------------------------------------

NOTICE: The signature to this assignment must

correspond with the name as written upon the

face of the within-mentioned instrument in

every particular, without alteration or any

change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this

Certificate for its own account or an account with respect to which it exercises

sole investment discretion and that it and any such account is a "qualified

institutional buyer" within the meaning of Rule 144A under the Securities Act of

1933, as amended, and is aware that the sale to it is being made in reliance on

Rule 144A and acknowledges that it has received such information regarding the

Company and/or the Trust as the undersigned has requested pursuant to Rule 144A

or has determined not to request such information and that it is aware that the

transferor is relying upon the undersigned's foregoing representations in order

to claim the exemption from registration provided by Rule 144A.

Dated:

-------------- -----------------------------------------------

NOTICE: To be executed by an executive officer

E-2

EXHIBIT 4.3.1

================================================================================

[A] TRUST INDENTURE AND SECURITY AGREEMENT

Dated as of February 15, 2002

among

TRINITY INDUSTRIES LEASING COMPANY

and

TRINITY INDUSTRIES, INC.

and

THE BANK OF NEW YORK,

Trustee

================================================================================

TABLE OF CONTENTS

Page

----

ARTICLE I

DEFINITIONS

Section 1.01 Certain Definitions 3

ARTICLE II

THE EQUIPMENT NOTES

Section 2.01 Form of Equipment Notes 3

Section 2.02 Execution, Authentication and Denominations 4

Section 2.03 Registrar and Paying Agent 4

Section 2.04 Paying Agent to Hold Money in Trust 5

Section 2.05 Transfer and Exchange 5

Section 2.06 Replacement Equipment Notes 6

Section 2.07 Outstanding Equipment Notes 6

Section 2.08 Cancellation 7

Section 2.09 Application of Payments to Principal Amount and Interest 7

Section 2.10 Termination of Interest in Indenture Estate 7

Section 2.11 Equally and Ratably Secured 7

Section 2.12 Redemption; Notice of Redemption 7

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION

OF INCOME FROM THE INDENTURE ESTATE

Section 3.01 Payments Prior to Indenture Event of Default 9

Section 3.02 [Reserved] 9

Section 3.03 Payments After Indenture Event of Defaul 9

Section 3.04 Other Payments 10

ARTICLE IV

REMEDIES OF THE TRUSTEE

UPON AN INDENTURE EVENT OF DEFAULT

Section 4.01 Indenture Events of Default 10

Section 4.02 Acceleration; Rescission and Annulment 11

Section 4.03 Remedies with Respect to Indenture Estate 12

Section 4.04 Waiver of Existing Defaults 14

Section 4.05 Control by Majority 14

Section 4.06 Limitation on Suits 15

Section 4.07 Rights of Holders to Receive Payment 15

Section 4.08 Delay or Omission Not Waiver 15

Section 4.09 Remedies Cumulative 15

Section 4.10 Discontinuance of Proceedings 16

Section 4.11 Undertaking for Costs 16

ARTICLE V

THE TRUSTEE

Section 5.01 Acceptance of Trusts and Duties 16

Section 5.02 Certain Duties and Responsibilities 16

Section 5.03 Notice of Indenture Defaults 17

Section 5.04 Certain Rights of Trustee 17

Section 5.05 Not Responsible for Recitals or Issuance of Equipment Notes 18

Section 5.06 May Hold Equipment Notes 19

Section 5.07 Indenture Supplements 19

Section 5.08 Effect of Replacements 19

Section 5.09 Withholding Taxes 19

Section 5.10 No Representations or Warranties as to the Items of Equipment or Documents 19

Section 5.11 No Segregation of Moneys; No Interest; Investments 19

Section 5.12 No Compensation from Holders or Indenture Estate 20

Section 5.13 Limitation on Duty of Trustee in Respect of Indenture Estate 20

Section 5.14 No Liability of Trustee 20

ARTICLE VI

INDEMNIFICATION AND COMPENSATION OF TRUSTEE

Section 6.01 Scope of Indemnification 21

Section 6.02 Compensation 21

ARTICLE VII

SUCCESSOR TRUSTEES

Section 7.01 Resignation of Trustee; Appointment of Successor 22

Section 7.02 Appointment of Co-Trustee 23

Section 7.03 No Liability for Clean-up of Hazardous Materials 24

ARTICLE VIII

SUPPLEMENTS AND AMENDMENTS

TO THIS INDENTURE AND OTHER DOCUMENTS

Section 8.01 Supplemental Indentures 24

Section 8.02 Trustee Protected 26

Section 8.03 Request of Substance, Not Form 26

Section 8.04 Documents Mailed to Holders 26

Section 8.05 Notation on or Exchange of Equipment Notes 26

ARTICLE IX

COVENANTS OF THE COMPANY

Section 9.01 Payment of Equipment Notes 27

Section 9.02 Maintenance of Corporate Existence 27

Section 9.03 Consolidation, Merger or Sale of Assets of the Company 27

Section 9.04 Annual Statements as to Compliance by the Company 28

Section 9.05 Notices of Indenture Defaults 28

Section 9.06 Liens 28

Section 9.07 Maintenance; Compliance with Laws; Possession; Identification Marks 28

Section 9.08 Replacement of Parts 29

Section 9.09 Insurance 29

Section 9.10 Age of Equipment 30

Section 9.11 Replacement of Items of Equipment upon Event of Loss 30

Section 9.12 Scope of Business Activities Abroad 31

Section 9.13 Filings and Opinions 31

Section 9.14 Substitution and Replacement of Equipment 32

ARTICLE X

GUARANTEE

Section 10.01 Guarantee 33

Section 10.02 Consolidation, Merger or Sale of Assets of Guarantor 34

ARTICLE XI

MISCELLANEOUS

Section 11.01 Release of Property 35

Section 11.02 Defeasance and Covenant Defeasance 35

Section 11.03 No Legal Title to Indenture Estate in Holders 38

Section 11.04 Sale of Items of Equipment by Trustee Is Binding 38

Section 11.05 Indenture and Equipment Notes for Benefit of the Company, Guarantor, Trustee and Holders

Only 38

Section 11.06 Further Assurances 38

Section 11.07 Compliance Certificates and Opinions 39

Section 11.08 Form of Documents Delivered to Trustee 39

Section 11.09 Acts of Holders 39

Section 11.10 Notices 40

Section 11.11 Severability 40

iii

Section 11.12 Separate Counterparts 40

Section 11.13 Successors and Assigns 41

Section 11.14 Headings 41

Section 11.15 Governing Law 41

Section 11.16 No Partnership 41

EXHIBIT A - Form of Trust Indenture Supplements

EXHIBIT B - Form of Equipment Notes

EXHIBIT C - Form of Notice to Lessees

EXHIBIT D - Form of Memorandum of Trust

EXHIBIT E - Form of Memorandum of Lease

APPENDIX A - Definitions

[A] TRUST INDENTURE AND SECURITY AGREEMENT

This [A] TRUST INDENTURE AND SECURITY AGREEMENT, dated as of

February 15, 2002 (this "Indenture"), by and among Trinity Industries Leasing

Company, a Delaware corporation (the "Company"), Trinity Industries, Inc. a

Delaware corporation (the "Guarantor"), and The Bank of New York, a New York

banking corporation, as Trustee hereunder, and any successor appointed in

accordance with the terms hereof (the "Trustee");

WITNESSETH:

WHEREAS, the Company has duly authorized the execution and

delivery of this Indenture to provide for the issuance of the 7.755% Equipment

Notes (the "Equipment Notes") issuable as provided in this Indenture;

WHEREAS, the Company and the Guarantor desire by this

Indenture, among other things, to provide for (i) the issuance by the Company of

the Equipment Notes, (ii) the guarantee by the Guarantor of the Company's

obligations in respect of the Equipment Notes and under this Indenture, and

(iii) the assignment, mortgage and pledge by the Company to the Trustee, as part

of the Indenture Estate hereunder, among other things, of, and the grant of a

security interest in, all of the Company's right, title and interest in and to

the Items of Equipment, the Leases and the proceeds thereof, in accordance with

the terms hereof, in trust, as security for, among other things, the Company's

obligations to the holders of the Equipment Notes for the equal and ratable

benefit of such holders;

WHEREAS, all things have been done to make the Equipment

Notes, when executed by the Company and authenticated and delivered by the

Trustee hereunder, the valid, binding and enforceable obligations of the

Company; and

WHEREAS, all things necessary to make this Indenture the

legal, valid and binding obligation of the Company, the Guarantor and the

Trustee, for the uses and purposes herein set forth, in accordance with its

terms, have been done and performed and have happened.

GRANTING CLAUSE

NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT

WITNESSETH that, to secure the prompt payment of the principal of and interest

and premium, if any, on and all other amounts due with respect to, the Equipment

Notes from time to time outstanding hereunder and the performance and observance

by the Company of all the agreements, covenants and provisions herein and in the

Equipment Notes all for the benefit of the holders of the Equipment Notes, and

for the uses and purposes and subject to the terms and provisions hereof, and in

consideration of the premises and of the covenants herein contained, the Company

does hereby sell, assign, transfer, convey, mortgage, pledge and confirm unto

the Trustee, its successors and assigns, for the security and benefit of the

holders of the Equipment Notes from time to time, a first priority security

interest in and mortgage lien on all right, title and interest of the Company in

and to the following described property, rights, interests and privileges (which

collectively, including all property hereafter specifically

subjected to the Lien of this Indenture by any instrument supplemental hereto,

being herein called the "Indenture Estate"), to wit:

(i) the Items of Equipment including, without limitation, all

additions, alterations or modifications thereto or replacements of any

part thereof, whenever made or performed or acquired and all other

items of tangible personal property of any kind acquired by the Company

in connection with the acquisition of the Items of Equipment, in each

case whether acquired at the time of acquisition of the Items of

Equipment or thereafter acquired pursuant to this Indenture or

otherwise; and

(ii) all Leases, including, without limitation, all amounts of

rent, insurance proceeds and other payments of any kind for or with

respect to the Equipment subject to each Lease;

(iii) all monies and securities now or hereafter paid or

deposited or required to be paid or deposited with the Trustee pursuant

to any provision of this Indenture, or any Lease or required to be held

by the Trustee hereunder or thereunder; and

(iv) all right, title and interest of the Company in and to

all proceeds, rents, issues, profits, products, revenues and other

income, from and on account of the property, rights and privileges

subjected or required to be subjected to the Lien of this Indenture.

TO HAVE AND TO HOLD all and singular the aforesaid property

unto the Trustee, its successors and assigns, in trust for the benefit and

security of the holders of the Equipment Notes from time to time, without any

priority of any one Equipment Note over any other Equipment Note, and for the

uses and purposes, and subject to the terms and provisions, set forth in this

Indenture.

UPON CONDITION that, unless and until an Event of Default

shall have occurred and be continuing, the Company shall be permitted, to the

exclusion of the Trustee, to possess and use the Indenture Estate and exercise

all rights with respect thereto.

It is expressly agreed that anything herein contained to the

contrary notwithstanding, the Company shall remain liable under each of the

Operative Documents and Leases to which it is a party to perform all of the

obligations, if any, assumed by it thereunder, all in accordance with and

pursuant to the terms and provisions thereof, and the Trustee and the holders

shall have no obligation or liability under any of the Operative Documents or

Leases to which the Company is a party by reason of or arising out of this

assignment, nor shall the Trustee or the holders of Equipment Notes be required

or obligated in any manner to perform or fulfill any obligations of the Company

under or pursuant to any of the Operative Documents or Leases to which the

Company is a party or, except as herein expressly provided, to make any payment,

or to make any inquiry as to the nature or sufficiency of any payment received

by it, or present or file any claim, or take any action to collect or enforce

the payment of any amounts which may have been assigned to it or to which it may

be entitled at any time or times.

The Company does hereby constitute the Trustee the true and

lawful attorney of the Company, irrevocably, with full power (in the name of the

Company or otherwise) to ask, require, demand, receive, compound and give

acquittance for any and all money and claims for

money due and to become due to the Company which are part of the Indenture

Estate, to endorse any checks or other instruments or orders in connection

therewith and to file any notices or claims or take any action or institute any

proceedings which the Trustee may deem to be necessary or advisable in the

premises.

The Company agrees that at any time and from time to time, the

Company will promptly and duly execute, deliver and file or cause to be

executed, delivered and filed any and all such further instruments and documents

as may be necessary or as the Trustee may reasonably request in order to obtain

the full benefits of this assignment and of the rights and powers herein

granted.

The Company does hereby warrant and represent that it has not

assigned or pledged, and hereby covenants that it will not assign or pledge, so

long as the assignment hereunder shall remain in effect, any of its right, title

or interest hereby assigned to anyone other than the Trustee and that it will

not, except as provided in or permitted by this Indenture, accept any payment

constituting part of the Indenture Estate or enter into an agreement amending or

supplementing any of the Operative Documents, execute any waiver or modification

of, or consent under the terms of any of the Operative Documents, settle or

compromise any claim arising under any of the Operative Documents, or submit or

consent to the submission of any dispute, difference or other matter arising

under or in respect of any of the Operative Documents to arbitration thereunder.

IT IS HEREBY COVENANTED AND AGREED by and among the parties

hereto as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Certain Definitions. Unless the context otherwise

requires, all capitalized terms used herein and not otherwise defined shall have

the meanings set forth in Appendix A hereto for all purposes of this Indenture.

All references to articles, sections, clauses, schedules, exhibits, annexes and

appendices in this Indenture are to articles, sections, clauses, schedules,

exhibits, annexes and appendices in and to this Indenture unless otherwise

indicated.

ARTICLE II

THE EQUIPMENT NOTES

Section 2.01 Form of Equipment Notes. (a) The Equipment Notes

and the Trustee's certificate of authentication with respect thereto shall be

substantially in the form annexed hereto as Exhibit B. The Equipment Notes may

have such appropriate insertions, omissions, substitutions and other variations

as are required or permitted by this Indenture and may have letters, notations,

legends or endorsements required by law, stock exchange agreements to which the

Company is subject, or usage. Any portion of the text of any Equipment Note may

be set forth on the reverse thereof, with an appropriate reference thereto on

the face of the Equipment Note. The Company shall approve the form of the

Equipment Notes and any notation, legend or endorsement on the Equipment Notes.

Each Equipment Note shall be dated the date of its authentication.

The terms and provisions contained in the form of the

Equipment Notes annexed hereto as Exhibit B shall constitute, and are hereby

expressly made, a part of this Indenture. Each of the Company and the Trustee,

by its execution and delivery of this Indenture, expressly agrees to the terms

and provisions of the Equipment Notes applicable to it and to be bound thereby.

The Equipment Notes shall be typed, printed, lithographed or

engraved or produced by any combination of these methods or may be produced in

any other manner determined by the officers executing such Equipment Notes, as

evidenced by their execution of such Equipment Notes.

Section 2.02 Execution, Authentication and Denominations. The

Equipment Notes shall be executed by an Officer of the Company authorized to

execute Equipment Notes, by facsimile or manual signature, in the name and on

behalf of the Company.

If an officer whose signature is on an Equipment Note no

longer holds that office at the time the Trustee authenticates the Equipment

Note, the Equipment Note shall be valid nevertheless.

An Equipment Note shall not be valid until the Trustee

manually signs the certificate of authentication on the Equipment Note. The

signature shall be conclusive evidence that the Equipment Note has been

authenticated under this Indenture.

At any time and from time to time after the execution of this

Indenture, the Trustee shall, upon receipt of a Company Order, authenticate for

original issue Equipment Notes in the aggregate principal amount specified in

such Company Order. Such Company Order shall specify the amount of Equipment

Notes to be authenticated and the date on which the issue of Equipment Notes is

to be authenticated.

Section 2.03 Registrar and Paying Agent. The Company shall

maintain an office or agency where Equipment Notes may be presented for

registration of transfer or for exchange (the "Registrar"), an office or agency

where Equipment Notes may be presented for payment (the "Paying Agent"), and an

office or agency where notices and demands to or upon the Company in respect of

the Equipment Notes and this Indenture may be served. The Company shall cause

the Registrar to keep a register of the Equipment Notes and of their transfer

and exchange (the "Equipment Note Register"). The Company may have one or more

additional Paying Agents.

The Company shall enter into an appropriate agency agreement

with any Agent not a party to this Indenture. The agreement shall implement the

provisions of this Indenture that relate to such Agent. The Company shall give

prompt written notice to the Trustee of the name and address of any such Agent

and any change in the address of such Agent. If the Company fails to maintain a

Registrar, Paying Agent and/or agent for service of notices and demands, the

Trustee shall act as such Registrar, Paying Agent and/or agent for service of

notices and demands

for so long as such failure shall continue. The Company may remove any Agent

upon written notice to such Agent and the Trustee; provided that no such removal

shall become effective until (i) the acceptance of an appointment by a successor

Agent to such Agent as evidenced by an appropriate agency agreement entered into

by the Company and such successor Agent and delivered to the Trustee or (ii)

notification to the Trustee that the Trustee shall serve as such Agent until the

appointment of a successor Agent in accordance with clause (i) of this proviso.

The Company or any Affiliate of the Company may act as Paying Agent, Registrar,

and/or agent for service of notice and demands. The Company shall initially act

as the Paying Agent.

The Company initially appoints the Trustee as Registrar,

Paying Agent and authenticating agent. If, at any time, the Trustee is not the

Registrar, the Registrar shall make available to the Trustee on or before each

Interest Payment Date and at such other times as the Trustee may reasonably

request, the names and addresses of the Holders as they appear in the Equipment

Note Register.

Section 2.04 Paying Agent to Hold Money in Trust. The Company

shall require each Paying Agent, if any, other than the Trustee to agree in

writing that such Paying Agent shall hold in trust for the benefit of the

Holders or the Trustee all money held by the Paying Agent for the payment of

principal of, premium, if any, or interest on the Equipment Notes (whether such

money has been paid to it by the Company or the Guarantor on the Equipment

Notes), and that such Paying Agent shall promptly notify the Trustee of any

default by the Company (or the Guarantor on the Equipment Notes) in making any

such payment. The Company at any time may require a Paying Agent to pay all

money held by it to the Trustee and account for any funds disbursed, and the

Trustee may at any time during the continuance of any payment default, upon

written request to a Paying Agent, require such Paying Agent to pay all money

held by it to the Trustee and to account for any funds disbursed. Upon doing so,

the Paying Agent shall have no further liability for the money so paid over to

the Trustee. If the Company or any Subsidiary of the Company or any Affiliate of

any of them acts as Paying Agent, it will, on or before each due date of any

principal of, premium, if any, or interest on the Equipment Notes, segregate and

hold in a separate trust fund for the benefit of the Holders a sum of money

sufficient to pay such principal, premium, if any, or interest so becoming due

until such sum of money shall be paid to such Holders or otherwise disposed of

as provided in this Indenture, and will promptly notify the Trustee of its

action or failure to act as required by this Section 2.04.

Section 2.05 Transfer and Exchange. The Equipment Notes are

issuable only in registered form. A Holder may transfer an Equipment Note by

written application to the Registrar stating the name of the proposed transferee

and otherwise complying with the terms of this Indenture. No such transfer shall

be effected until, and such transferee shall succeed to the rights of a Holder

only upon registration of the transfer by the Registrar in the Equipment Note

herein, the Company, the Trustee, and any agent of the Company or the Trustee

shall treat the Person in whose name the Equipment Note is registered as the

owner thereof for all purposes and none of the Company, the Trustee, or any such

agent shall be affected by notice to the contrary. When Equipment Notes are

presented to the Registrar with a request to register the transfer or to

exchange them for an equal principal amount of Equipment Notes of other

authorized denominations, the Registrar shall register the transfer or make the

exchange as requested if its requirements for such transactions are met. To

permit registrations of transfers and exchanges in accordance with

the terms, conditions and restrictions hereof, the Company shall execute and the

Trustee shall authenticate Equipment Notes. No service charge shall be made to

any Holder for any registration of transfer or exchange or redemption of the

Equipment Notes, but the Company may require payment of a sum sufficient to

cover any transfer tax or similar governmental charge payable in connection

therewith (other than any such transfer taxes or other similar governmental

charge payable upon transfers or exchanges pursuant to Section 2.12 or 8.05).

Section 2.06 Replacement Equipment Notes. If (i) a mutilated

Equipment Note is surrendered to the Trustee or the Trustee receives evidence to

its satisfaction of the destruction, loss or theft of any Equipment Note, and

(ii) there is delivered to the Company and the Trustee such security or

indemnity as may be required by them to hold each of them harmless, then, in the

absence of notice to the Company, the Registrar or the Trustee that such

Equipment Note has been acquired by a protected purchaser, the Company shall

execute and upon its request the Trustee shall authenticate and deliver, in

exchange for or in lieu of any such mutilated, destroyed, lost or stolen

Equipment Note, a replacement Equipment Note of like tenor and amount; provided,

however, that if any such mutilated, destroyed, lost or stolen Equipment Note

has become or is about to become due and payable, the Company, in its

discretion, may pay such Equipment Note instead of issuing a new Equipment Note

in replacement thereof.

Upon the issuance of any replacement Equipment Note under this

Section, the Company may require the payment by the Holder of such Equipment

Note of a sum sufficient to cover any tax or other governmental charge that may

be imposed in relation thereto and any other reasonable expenses (including the

fees and expenses of the Trustee) connected therewith.

Every replacement Equipment Note issued pursuant to this

Section in replacement of any mutilated, destroyed, lost or stolen Equipment

Note shall constitute an original additional contractual obligation of the

Company, whether or not the mutilated, destroyed, lost or stolen Equipment Note

shall be at any time enforceable by anyone, and shall be entitled to all the

benefits of this Indenture equally and proportionately with any and all other

Equipment Notes duly issued hereunder.

Section 2.07 Outstanding Equipment Notes. Equipment Notes

outstanding at any time are all Equipment Notes that have been authenticated by

the Trustee except for those cancelled by it, those delivered to it for

cancellation and those described in this Section 2.07 as not outstanding.

If an Equipment Note is replaced pursuant to Section 2.06, it

ceases to be outstanding unless and until the Trustee and the Company receive

proof reasonably satisfactory to them that the replaced Equipment Note is held

by a protected purchaser.

An Equipment Note does not cease to be outstanding because the

Company or one of its Affiliates holds such Equipment Note; provided, however,

that, in determining whether the Holders of the requisite principal amount of

the outstanding Equipment Notes have given any request, demand, authorization,

direction, notice, consent or waiver hereunder, Equipment Notes owned by the

Company or any other obligor upon the Equipment Notes or any Affiliate of the

Company or of such other obligor shall be disregarded and deemed not to be

outstanding, except that, in determining whether the Trustee shall be protected

in relying upon any such request,

demand, authorization, direction, notice, consent or waiver, only Equipment

Notes which a Responsible Officer of the Trustee knows to be so owned shall be

so disregarded. Equipment Notes so owned which have been pledged in good faith

may be regarded as outstanding if the pledgee establishes to the satisfaction of

the Trustee the pledgee's right so to act with respect to such Equipment Notes

and that the pledgee is not the Company or any other obligor upon the Equipment

Notes or any Affiliate of the Company or of such other obligor.

Section 2.08 Cancellation. The Company at any time may deliver

to the Trustee for cancellation any Equipment Notes previously authenticated and

delivered hereunder which the Company may have acquired in any manner

whatsoever. The Registrar and the Paying Agent shall forward to the Trustee any

Equipment Notes surrendered to them for registration of transfer, exchange,

purchase or payment. The Trustee shall cancel all Equipment Notes surrendered

for registration of transfer, exchange, purchase, payment or cancellation and

shall return all such Equipment Notes to the Company. The Company shall not

issue Equipment Notes to replace Equipment Notes it has paid in full or

delivered to the Trustee for cancellation.

Section 2.09 Application of Payments to Principal Amount and

Interest. In the case of each Equipment Note, each payment of principal thereof

and premium, if any, and interest thereon shall be applied, first, to the

payment of accrued but unpaid interest on such Equipment Note then due

thereunder (as well as any interest on any overdue principal amount) and (to the

extent permitted by law) any overdue premium, if any, any overdue interest and

any other overdue amounts thereunder to the date of such payment, second, to the

payment of any premium then due thereon, and third, to the payment of the

principal amount of such Equipment Note then due thereunder (which, in the case

of any partial redemption pursuant to Section 2.12, shall be applied toward the

pro rata reduction of all remaining installments of principal on such Equipment

Note).

Section 2.10 Termination of Interest in Indenture Estate. A

Holder shall have no further interest in, or other right with respect to, the

Indenture Estate when and if the principal amount of and interest on all

Equipment Notes held by such Holder and all other sums payable to such Holder

hereunder and under such Equipment Notes shall have been paid in full.

Section 2.11 Equally and Ratably Secured. All Equipment Notes

at any time outstanding under this Indenture shall be equally and ratably

secured hereby without preference, priority or distinction on account of the

date or dates, the actual time or times of the issue or maturity of such

Equipment Notes so that all Equipment Notes at any time issued and outstanding

hereunder shall have the same rights and preferences, and be entitled to the

same benefits provided by the Liens created, under and by virtue of this

Indenture.

Section 2.12 Redemption; Notice of Redemption. (a) The Company

may, at its option, on not less than 30 (and no more than 60) days' notice to

the Trustee, redeem on any date the outstanding Equipment Notes in whole or in

part, at a redemption price equal to the greater of (1) 100% of the principal

amount of the Equipment Notes to be redeemed, and (2) as determined by the

Quotation Agent, the sum of the present values of the remaining scheduled

payments of principal and interest in respect of the Equipment Notes to be

redeemed (not including any portion of those payments of interest accrued as of

the date of redemption) discounted to the date of redemption on a semiannual

basis (assuming a 360-day year consisting of twelve 30-day

months) at the Adjusted Treasury Rate plus 25 basis points, plus, in each case,

accrued interest to the date of redemption.

"Adjusted Treasury Rate" means, with respect to any redemption

date, the rate per year equal to the semiannual equivalent yield to maturity of

the Comparable Treasury Issue, assuming a price for the Comparable Treasury

Issue (expressed as a percentage of its principal amount) equal to the

Comparable Treasury Price for that redemption date.

"Comparable Treasury Issue" means the United States Treasury

security selected by the Quotation Agent as having a maturity comparable to the

remaining term of the Equipment Notes to be redeemed that would be utilized, at

the time of selection and in accordance with customary financial practice, in

pricing new issues of corporate debt securities of comparable maturity to the

remaining term of those Equipment Notes.

"Comparable Treasury Price" means, with respect to any

redemption date, (i) the average of the Reference Treasury Dealer Quotations for

that redemption date, after excluding the highest and lowest Reference Treasury

Dealer Quotations, or (ii) if the Trustee obtains fewer than three Reference

Treasury Dealer Quotations, the average of all Reference Treasury Dealer

Quotations so received.

"Quotation Agent" means the Reference Treasury Dealer

appointed by the Company.

"Reference Treasury Dealer" means (1) J.P. Morgan Securities

Inc. and its successors, provided, however, that if the foregoing shall cease to

be a primary U.S. Government securities dealer in New York City (a "Primary

Treasury Dealer"), the Company shall substitute another Primary Treasury Dealer,

and (2) any other Primary Treasury Dealer selected by the Company.

"Reference Treasury Dealer Quotations" means, with respect to

each Reference Treasury Dealer and any redemption date, the average, as

determined by the Reference Treasury Dealer, of the bid and asked prices for the

Comparable Treasury Issue (expressed in each case as a percentage of its

principal amount) quoted in writing by that Reference Treasury Dealer at 5:00

p.m., New York City time, on the third Business Day preceding that redemption

date.

Upon the redemption of any Equipment Notes pursuant to this

Section 2.12(a), the Trustee shall, in accordance with Section 11.01(a), release

from the Lien of this Indenture the Items of Equipment specified by the Company

in a Company Order having an aggregate Fair Value as determined by the Company

equal to or less than the product obtained by multiplying the aggregate Fair

Value of all Items of Equipment subject to the Lien of this Indenture by a

fraction, the numerator of which shall be the aggregate unpaid principal amount

of the Equipment Notes so redeemed and the denominator of which shall be the

aggregate unpaid principal amount of all Equipment Notes outstanding immediately

prior to such redemption.

(b) In connection with an Event of Loss (unless the Company

shall have elected the option set forth in Section 9.11(a)(i) with respect

thereto), the Company shall, on or before the relevant Loss Redemption Date (as

defined in Section 9.11(a)), redeem a principal amount of the Equipment Notes

equal to the product obtained by multiplying the aggregate

unpaid principal amount of all Equipment Notes on the date notice of the

Company's election to redeem is given to the Trustee pursuant to Section

9.11(a), by a fraction, the numerator of which shall be the Fair Value of the

Equipment with respect to which such Event of Loss occurred and the denominator

of which shall be the aggregate Fair Value of all Equipment subject to the Lien

hereof immediately prior to the occurrence of such Event of Loss. The redemption

price payable upon a redemption pursuant to this Section 2.12(b) shall equal the

principal amount of the Equipment Notes to be redeemed as determined pursuant to

the immediately preceding sentence, together with accrued and unpaid interest on

such principal amount to the date of such redemption but without the payment of

any premium.

any redemption pursuant to this Section 2.12.

(d) The Equipment Notes are not subject to redemption or

prepayment except as provided in this Section 2.12 and in Section 3.03 of this

Indenture.

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION

OF INCOME FROM THE INDENTURE ESTATE

Section 3.01 Payments Prior to Indenture Event of Default.

Except as otherwise provided in Section 3.03, any money paid over by the Company

to the Trustee for payment on the Equipment Notes shall be distributed by the

Trustee as promptly as possible to the holders of the Equipment Notes to pay in

full the aggregate amount of the payment or payments of principal, premium, if

any, and interest (as well as any interest on overdue principal) then due, such

distribution to be made ratably, in the proportion that the amount of such

payment or payments then due or so scheduled with respect to each such Equipment

Note bears to the aggregate amount of payments then due under all such Equipment

Notes. The amount so distributed to a Holder of an Equipment Note shall be

applied by such Holder in payment of such Equipment Note in accordance with the

terms of Section 2.09.

Section 3.02 [Reserved].

Section 3.03 Payments After Indenture Event of Default. (a)

All payments received and amounts realized by the Trustee after an Indenture

Event of Default shall have occurred and be continuing and after the Equipment

Notes shall have been accelerated pursuant to Section 4.02 or the Trustee has

elected to foreclose or otherwise enforce its rights under this Indenture

(including any amounts realized by the Trustee from the exercise of any remedies

pursuant to Article IV), as well as all payments or amounts then held or

thereafter received by the Trustee as part of the Indenture Estate while such

Indenture Event of Default shall be continuing, shall be distributed forthwith

by the Trustee in the following order of priority: first, so much of such

payments or amounts as shall be required to pay or reimburse the Trustee for any

unpaid fees for its services under this Indenture and any tax, liability,

expense (including reasonable attorneys' fees) or other loss incurred by the

Trustee (to the extent reimbursable and not previously reimbursed and to the

extent reasonably incurred in connection with its duties as

Trustee) shall be distributed to the Trustee; second, so much of such payments

or amounts as shall be required to reimburse the Holders of the Equipment Notes

for payments made by them to the Trustee pursuant to Article V (to the extent

not previously reimbursed), shall be distributed to such Holders of the

Equipment Notes, without priority of one over the other, in accordance with the

amount of the payment or payments made by, or payable to, each such Holder;

third, so much of such payments or amounts as shall be required to pay in full

the aggregate unpaid principal amount of all Equipment Notes, plus the accrued

but unpaid interest thereon to the date of distribution, shall be distributed to

the Holders of the Equipment Notes, and in case the aggregate amount so to be

distributed shall be insufficient to pay in full the aforesaid amounts, then,

ratably, without priority of one over another, in the proportion that the

aggregate unpaid principal amount of all Equipment Notes held by each such

Holder, plus the accrued but unpaid interest thereon to the date of

distribution, bears to the aggregate unpaid principal amount of all Equipment

Notes, plus the accrued but unpaid interest thereon to the date of distribution;

and fourth, the balance, if any, of such payments or amounts remaining

thereafter shall be distributed to, or as directed by, the Company;

(b) If an Indenture Event of Default shall have occurred and

be continuing, the Trustee shall not make any distribution to the Company but

shall hold amounts otherwise distributable to the Company as collateral security

for the obligations secured hereby until such time as no Indenture Event of

Default shall be continuing hereunder or such amounts are applied pursuant to

Section 3.03(a).

Section 3.04 Other Payments. Except as otherwise provided in

Section 3.03,

(a) any payments received by the Trustee for which no

provision as to the application thereof is made elsewhere in this

Article III, and

(b) all payments received and amounts realized by the Trustee

with respect to the Items of Equipment to the extent received or

realized at any time after payment in full of the principal of and

interest and premium, if any, on all Equipment Notes, as well as any

other amounts remaining as part of the Indenture Estate after payment

in full of the principal of and interest and premium, if any, on all

Equipment Notes issued hereunder,

shall be distributed forthwith by the Trustee in the order of priority set forth

in Section 3.03, except that in the case of any payment described in clause (b)

above, such payment shall be distributed omitting clause "third" of such Section

3.03(a).

ARTICLE IV

REMEDIES OF THE TRUSTEE

UPON AN INDENTURE EVENT OF DEFAULT

Section 4.01 Indenture Events of Default. The following events

shall constitute "Indenture Events of Default" and each such Indenture Event of

Default shall be deemed to exist and continue so long as, but only so long as,

it shall not have been remedied:

(a) default by the Company in making any payment when due of

any principal of or premium (if any) on, any Equipment Note;

(b) default by the Company in making any payment when due of

any interest on any Equipment Note, and the continuance of such default

unremedied for 10 Business Days after the same shall have become due

and payable;

perform in any material respect any covenant or obligation of it, in

this Indenture or the Equipment Notes if, but only if, such failure is

not remedied within a period of 120 days after there has been given to

the Company or the Guarantor, as the case may be, by the Trustee or the

Holders of 25% or more in aggregate principal amount of the Equipment

Notes then outstanding a written notice specifying such failure and

requiring it to be remedied;

(d) any representation or warranty made by the Company

hereunder, or by any representative of the Company in any document or

certificate furnished to the Trustee in connection herewith or pursuant

hereto, shall prove at any time to have been incorrect in any material

adverse respect as of the date made and such incorrectness shall remain

material and unremedied for a period of 120 days after the date on

which there has been given to the Company by the Trustee or the Holders

of 25% or more in aggregate principal amount of the Equipment Notes

then outstanding a written notice specifying such incorrectness;

(e) the Guarantee shall cease to be in full force and effect

or the Guarantor shall take any action to seek to have the Guarantee

declared void or unenforceable;

(f) either the Company or the Guarantor shall (i) commence a

voluntary case or other proceeding seeking liquidation, reorganization

or other relief with respect to itself or its debts under any

bankruptcy, insolvency or other similar law now or hereafter in effect,

or seeking the appointment of a trustee, receiver, liquidator,

custodian or other similar official of it or any substantial part of

its property, or (ii) consent to any such relief or to the appointment

of or taking possession by any such official in any voluntary case or

other proceeding commenced against it, or (iii) admit in writing its

inability to pay its debts generally as they come due, or (iv) make a

general assignment for the benefit of creditors, or (v) take any

corporate action to authorize any of the foregoing; or

(g) an involuntary case or other proceeding shall be commenced

against either the Company or the Guarantor seeking liquidation,

reorganization or other relief with respect to it or its respective

debts under any bankruptcy, insolvency or other similar law now or

hereafter in effect, or seeking the appointment of a trustee, receiver,

liquidator, custodian or other similar official of it or any

substantial part of its property, and such involuntary case or other

proceeding shall remain undismissed and unstayed for a period of 90

days.

Section 4.02 Acceleration; Rescission and Annulment. If an

Indenture Event of Default (other than as described in Section 4.01(f) or (g))

shall occur and be continuing, the Trustee may, and when instructed by the

Holders of at least 25% in aggregate principal amount

of the Equipment Notes then outstanding, shall, by written notice to the

Company, declare the unpaid principal amount of all Equipment Notes then

outstanding to be immediately due and payable, together with all accrued and

unpaid interest thereon and all other amounts due thereunder. If an Indenture

Event of Default described in Section 4.01(f) or (g) shall have occurred and be

continuing, the unpaid principal amount of all Equipment Notes then outstanding,

together with all accrued and unpaid interest thereon and all other amounts due

thereunder, shall immediately become due and payable, without any notice or

action by the Trustee or any Noteholder, to the fullest extent permitted by law.

At any time after acceleration and prior to the sale of any of the Indenture

Estate pursuant to this Article IV, a Majority in Interest, by written notice to

the Company and the Trustee, may rescind and annul such acceleration and thereby

annul its consequences if: (i) there has been paid to or deposited with the

Trustee an amount sufficient to pay all overdue installments of interest on the

Equipment Notes, and the principal of and premium, if any, on any Equipment

Notes that have become due otherwise than by such acceleration, (ii) the

rescission would not conflict with any judgment or decree, and (iii) all other

Indenture Defaults and Indenture Events of Default, other than nonpayment of

principal or interest on the Equipment Notes that have become due solely because

of such acceleration, have been cured or waived.

Section 4.03 Remedies with Respect to Indenture Estate. (a) If

an Indenture Event of Default shall have occurred and be continuing, and the

Equipment Notes shall have been accelerated (and such acceleration shall not

have been rescinded) pursuant to Section 4.02, then and in every such case the

Trustee shall be entitled to exercise any or all of the rights and powers and

pursue any and all of the remedies pursuant to this Article IV and may recover

judgment in its own name as Trustee against the Company and Indenture Estate and

may take possession of all or any part of the Indenture Estate, and may exclude

the Company and all persons claiming under the Company wholly or partly

therefrom.

(b) The Trustee may, if at the time such action may be lawful

and always subject to compliance with any mandatory legal requirements, either

with or without taking possession, and either before or after taking possession,

and without instituting any legal proceedings whatsoever, and having first given

written notice of such sale to the Company at least 30 days prior to the date of

such sale or the date on which the Trustee enters into a binding contract for a

private sale, and any other notice which may be required by law, sell and

dispose of the Indenture Estate, or any part thereof, or interest therein, at

public auction to the highest bidder or at private sale in one lot as an

entirety or in separate lots, and either for cash or on credit and on such terms

as the Trustee may determine, and at any place (whether or not it be the

location of the Indenture Estate or any part thereof) and time designated in the

notice above referred to. Any such public sale or sales may be adjourned from

time to time by announcement at the time and place appointed for such sale or

sales, or for any such adjourned sale or sales, without further notice, and the

Trustee or the Holder or Holders of any Equipment Notes, or any interest

therein, may bid and become the purchaser at any such public sale. The Trustee

may exercise such right without possession or production of the Equipment Notes

or proof of ownership thereof, and as representative of the Holders may exercise

such right without including the Holders as parties to any suit or proceeding

relating to foreclosure of any property in the Indenture Estate. The Company

hereby irrevocably constitutes the Trustee the true and lawful attorney-in-fact

of the Company (in the name of the Company or otherwise) for the purpose of

effecting any sale, assignment, transfer or delivery for enforcement of the Lien

of this

Indenture, whether pursuant to foreclosure or power of sale or otherwise, to

execute and deliver all such bills of sale, assignments and other instruments as

the Trustee may consider necessary or appropriate, with full power of

substitution, the Company hereby ratifying and confirming all that such attorney

or any substitute shall lawfully do by virtue hereof. Nevertheless, if so

requested by the Trustee or any purchaser, the Company shall ratify and confirm

any such sale, assignment, transfer or delivery, by executing and delivering to

the Trustee or such purchaser all bills of sale, assignments, releases and other

proper instruments to effect such ratification and confirmation as may be

designated in any such request.

may, that, in case one or more of the Indenture Events of Default shall have

occurred and be continuing, then, in every such case, the Trustee may take

possession of all or any part of the Indenture Estate and, subject to the rights

of the lessees under the Leases, may exclude the Company and all persons

claiming under any of them wholly or partly therefrom. At the request of the

Trustee, the Company shall promptly execute and deliver to the Trustee such

instruments of title and other documents as the Trustee may deem necessary or

advisable to enable the Trustee or an agent or representative designated by the

Trustee, at such time or times and place or places as the Trustee may specify,

to obtain possession, subject to the rights of the lessees under the Leases, of

all or any part of the Indenture Estate. If the Company shall fail for any

reason to execute and deliver such instruments and documents to the Trustee, the

Trustee may pursue all or part of the Indenture Estate wherever it may be found

and may enter any of the premises of the Company wherever the Indenture Estate

may be or be supposed to be and search for the Indenture Estate and take

possession of and remove the Indenture Estate, subject to the rights of the

lessees under the Leases. Upon every such taking of possession, the Trustee may,

from time to time, at the expense of the Indenture Estate, make all such

expenditures for maintenance, insurance, repairs, replacements, alterations,

additions and improvements to any of the Indenture Estate, as it may deem proper

or as it may otherwise be directed to do so by a Majority in Interest. In each

such case, and subject to the rights of the lessees under the Leases, the

Trustee shall have the right to use, operate, store, control or manage the

Indenture Estate, and to carry on the business and to exercise all rights and

powers of the Company relating to the Indenture Estate, including the right to

enter into any and all such agreements with respect to the maintenance,

operation, leasing or storage of the Indenture Estate or any part thereof; and

the Trustee shall be entitled to collect and receive all tolls, rents, revenues,

issues, income, products and profits of the Indenture Estate and every part

thereof, without prejudice, however, to the right of the Trustee under any

provision of this Indenture to collect and receive all cash held by, or required

to be deposited with, the Trustee hereunder. Such tolls, rents, revenues,

issues, income, products and profits shall be applied to pay the expenses of

holding and operating the Indenture Estate and of conducting the business

thereof, and of all maintenance, repairs, replacements, alterations, additions

and improvements, and to make all payments which the Trustee may be required or

may elect to make, if any, for taxes, assessments, insurance or other proper

charges upon the Indenture Estate or any part thereof (including the employment

of engineers and accountants to examine, inspect and make reports upon the

properties and books and records of the Company), and all other payments which

the Trustee may be required or authorized to make under any provision of this

Indenture, as well as just and reasonable compensation for the services of the

Trustee, and of all persons properly engaged and employed by the Trustee,

including the reasonable expenses of the Trustee. Any action by the Trustee

pursuant to this Section 4.03(c)

will in all respects be subject to compliance with any mandatory legal

requirements applicable to any such action and to the rights of the lessees

under the Leases, if any.

(d) If an Indenture Event of Default occurs and is continuing

and the Trustee shall have obtained possession of an Item of Equipment, the

Trustee shall not be obligated to cause any Person to use or operate such Item

of Equipment or cause such Item of Equipment to be used or operated directly or

indirectly by itself or through agents or other representatives or to lease,

license or otherwise permit or provide for the use or operation of such Item of

Equipment by any other Person unless (i) the Trustee, as directed by a Majority

in Interest, shall have been able to obtain insurance in kinds, at rates and in

amounts satisfactory to a Majority in Interest to protect the Indenture Estate

and the Trustee, as trustee and individually, against any and all liability for

loss or damage to such Item of Equipment and for public liability and property

damage resulting from use or operation of such Item of Equipment and (ii) funds

are available in the Indenture Estate to pay for all such insurance or, in lieu

of such insurance, the Trustee is furnished with indemnification from the

holders of the Equipment Notes or any other Person upon terms and in amounts

satisfactory to the Trustee in its discretion to protect the Indenture Estate

and the Trustee, as trustee and individually, against any and all such

liabilities.

(e) If an Indenture Event of Default shall occur and be

continuing, the Trustee may proceed to protect and enforce this Indenture and

the Equipment Notes by suits or proceedings in equity, at law or in bankruptcy,

and whether for specific performance of any covenant or agreement or in

execution or aid of any power herein granted, or for foreclosure hereunder, or

the appointment of a receiver or receivers for the Indenture Estate or any part

thereof, or for the recovery of a judgment for the indebtedness secured hereby,

or the enforcement of any other legal or equitable remedy available to a

mortgagee or a secured party under the Uniform Commercial Code of the relevant

jurisdiction or any other applicable law.

(f) If an Indenture Event of Default shall occur and be

continuing, the Trustee and the Company shall give the "account debtor" (as

defined in Article 9 of the Uniform Commercial Code of the relevant

jurisdiction) under each Lease a notice in substantially the form of Exhibit C

hereto. The Company hereby irrevocably constitutes the Trustee the true and

lawful attorney-in-fact of the Company (in the name of the Company or otherwise)

for the purpose of giving such notice.

Section 4.04 Waiver of Existing Defaults. A Majority in

Interest by notice to the Trustee on behalf of all Holders of the Equipment

Notes may waive any past default hereunder and its consequences, except that the

consent of each Holder of an Equipment Note affected thereby shall be required

to waive a default (i) in the payment of the principal of, premium, if any, or

interest on any Equipment Note or (ii) in respect of a covenant or provision

hereof which under Article VIII hereof cannot be modified or amended without the

consent of the Holder of each Equipment Note affected. Upon any such waiver,

such default shall cease to exist, and any Indenture Event of Default arising

therefrom shall be deemed to have been cured for every purpose of this

Indenture; but no such waiver shall extend to any subsequent or other default or

impair any right consequent thereon.

Section 4.05 Control by Majority. A Majority in Interest may

direct the time, method and place of conducting any proceeding for any remedy

available to the Trustee or

exercising any trust or power conferred on the Trustee. However, the Trustee may

refuse to follow any direction that conflicts with law or this Indenture that

may involve the Trustee in personal liability, or that the Trustee determines in

good faith may be unduly prejudicial to the rights of Holders of the Equipment

Notes not joining in the giving of such direction, and may take any other action

it deems proper that is not inconsistent with any such direction received from

Holders of the Equipment Notes.

Section 4.06 Limitation on Suits. A Holder may not pursue any

remedy with respect to this Indenture or the Equipment Notes unless:

(i) the Holder gives the Trustee written notice of a

continuing Indenture Event of Default;

(ii) the Holders of at least 25% in aggregate principal amount

of outstanding Equipment Notes make a written request to the Trustee to

pursue the remedy;

(iii) such Holder or Holders offer the Trustee indemnity

satisfactory to the Trustee against any costs, liability or expense;

(iv) the Trustee does not comply with the request within 60

days after receipt of the request and the offer of indemnity; and

(v) during such 60-day period, a Majority in Interest does not

give the Trustee a direction that is inconsistent with the request.

A Holder may not use this Indenture to prejudice the rights of

another Holder or to obtain a preference or priority over such other Holder.

Section 4.07 Rights of Holders to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder

of an Equipment Note to receive payment of principal of, premium, if any, or

interest on such Holder's Equipment Note on or after the respective due dates

expressed on such Equipment Note, or to bring suit for the enforcement of any

such payment on or after such respective dates, shall not be impaired or

affected without the consent of such Holder.

Section 4.08 Delay or Omission Not Waiver. No delay or

omission of the Trustee or of any Holder to exercise any right or remedy

accruing upon any Indenture Event of Default shall impair any such right or

remedy or constitute a waiver of any such Indenture Event of Default or an

acquiescence therein. Every right and remedy given under this Indenture or by

law to the Trustee or to the Holders may be exercised from time to time, and as

often as may be deemed expedient, by the Trustee or by the Holders, as the case

may be.

Section 4.09 Remedies Cumulative. Each and every right, power

and remedy herein specifically given to the Trustee or otherwise in this

Indenture shall be cumulative and shall be in addition to every other right,

power and remedy herein specifically given or now or hereafter existing at law,

in equity or by statute, and each and every right, power and remedy whether

specifically herein given or otherwise existing may be exercised from time to

time and as often and in such order as may be deemed expedient by the Trustee,

and the exercise or the

beginning of the exercise of any power or remedy shall not be construed to be a

waiver of the right to exercise at the time or thereafter any other right, power

or remedy. No delay or omission by the Trustee in the exercise of any right,

remedy or power or in the pursuance of any remedy shall impair any such right,

power or remedy or be construed to be a waiver of any default on the part of the

Company or to be an acquiescence therein.

Section 4.10 Discontinuance of Proceedings. In case the

Trustee shall have proceeded to enforce any right, power or remedy under this

Indenture by foreclosure, entry or otherwise, and such proceedings shall have

been discontinued or abandoned for any reason or shall have been determined

adversely to the Trustee, then and in every such case the Company and, the

Trustee shall be restored to their former positions and rights hereunder with

respect to the Indenture Estate, and all rights, remedies and powers of the

Trustee shall continue as if no such proceedings had been undertaken (but

otherwise without prejudice).

Section 4.11 Undertaking for Costs. In any suit for the

enforcement of any right or remedy under this Indenture or in any suit against

the Trustee for any action taken or omitted by it as a Trustee, a court in its

discretion may require the filing by any party litigant in the suit of an

undertaking to pay the costs of the suit, and the court in its discretion may

assess reasonable costs, including reasonable attorney's fees and expenses,

against any party litigant in the suit, having due regard to the merits and good

faith of the claims or defenses made by the party litigant, provided that the

provisions of this Section shall not apply to any suit instituted by any Holder

of an Equipment Note.

ARTICLE V

THE TRUSTEE

Section 5.01 Acceptance of Trusts and Duties. The Trustee

accepts the trusts hereby created and applicable to it and agrees to perform the

same but only upon the terms of this Indenture and agrees to receive and

disburse all money received by it constituting part of the Indenture Estate in

accordance with the terms hereof.

Section 5.02 Certain Duties and Responsibilities. (a) Except

during the continuance of an Indenture Event of Default:

(i) the Trustee undertakes to perform such duties as are

specifically set forth in this Indenture, and no implied covenants or

obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may

conclusively rely, as to the truth of the statements and the

correctness of the opinions expressed therein, upon certificates or

opinions furnished to the Trustee and conforming to the requirements of

this Indenture; but in the case of any such certificates or opinions

which by any provision hereof are specifically required to be furnished

to the Trustee, the Trustee shall be under a duty to examine the same

to determine whether or not they conform to the requirements of this

Indenture (but need not confirm or investigate the accuracy of

mathematical calculations or other facts stated therein).

(b) In case an Indenture Event of Default shall occur and be

continuing, the Trustee shall exercise such of the rights and powers vested in

it by this Indenture, and use the same degree of care and skill in their

exercise, as a prudent person would exercise or use under the circumstances in

the conduct of his own affairs.

relieve the Trustee from liability for its own grossly negligent action (or

negligent action in the handling of funds), its own grossly negligent failure to

act (or negligent failure to action in the handling of funds), or its own

willful misconduct, except that:

(i) this subsection shall not be construed to limit the effect

of subsection (a) of this Section;

(ii) the Trustee shall not be liable for any error of judgment

made in good faith by a Responsible Officer of the Trustee, unless it

shall be proved that the Trustee was negligent in ascertaining the

pertinent facts;

(iii) the Trustee shall not be liable with respect to any

action taken or omitted to be taken by it in good faith in accordance

with the direction of a Majority in Interest relating to the time,

method and place of conducting any proceeding for any remedy available

to the Trustee, or exercising any trust or power conferred upon the

Trustee, under this Indenture; and

(iv) no provision of this Indenture shall require the Trustee

to expend or risk its own funds in the performance of any of its duties

hereunder, or in the exercise of any of its rights or powers, if it

shall have reasonable grounds for believing that repayment of such

funds or adequate indemnity against such risk is not reasonably assured

to it.

(d) Whether or not herein expressly so provided, every

provision of this Indenture relating to the conduct or affecting the liability

of or affording protection to the Trustee shall be subject to the provisions of

this Section.

Section 5.03 Notice of Indenture Defaults. If the Trustee

shall have knowledge of any Indenture Default or Indenture Event of Default

hereunder, the Trustee shall promptly give notice thereof to the Company in

accordance with Section 11.10 and to all Holders, as their names and addresses

appear in the Equipment Note Register, unless such Indenture Default shall have

been cured or waived; provided, however, that, except in the case of a default

in the payment of the principal of (or premium, if any) or interest on any

Equipment Note, the Trustee shall be protected in withholding such notice if and

so long as the board of directors, the executive committee or a trust committee

of directors and/or Responsible Officers of the Trustee in good faith determine

that the withholding of such notice is in the interest of the Holders.

Section 5.04 Certain Rights of Trustee. Except as otherwise

provided in Section 5.02:

(a) the Trustee may conclusively rely and shall be protected

in acting or refraining from acting in reliance upon any resolution,

certificate, statement, instrument, opinion, report, notice, request,

direction, consent, order, bond, debenture or other paper

or document believed by it to be genuine and to have been signed or

presented by the proper party or parties;

(b) whenever in the administration of this Indenture the

Trustee shall deem it desirable that a matter be proved or established

prior to taking, suffering or omitting any action hereunder, the

Trustee (unless other evidence be herein specifically prescribed) may,

in the absence of bad faith on its part, conclusively rely upon an

Officer's Certificate of the Company;

advice of such counsel or any Opinion of Counsel shall be full and

complete authorization and protection in respect of any action taken,

suffered or omitted by it hereunder in good faith and in reliance

thereon;

(d) the Trustee shall be under no obligation to exercise any

of the rights or powers vested in it by this Indenture at the request

or direction of any of the Holders pursuant to this Indenture, unless

such Holders shall have offered to the Trustee security or indemnity

satisfactory to it against the cost, expenses and liabilities which

might be incurred by it in compliance with such request or direction;

(e) the Trustee shall not be bound to make any investigation

into the facts or matters stated in any resolution, certificate,

statement, instrument, opinion, report, notice, request, direction,

consent, order, bond, debenture or other paper or document;

(f) the Trustee may execute any of the trusts or powers

hereunder or perform any duties hereunder either directly or by or

through agents or attorneys and the Trustee shall not be responsible

for any misconduct or negligence on the part of any agent or attorney

appointed with due care by it hereunder;

(g) the Trustee shall not be deemed to have notice of any

Indenture Default or Indenture Event of Default unless a Responsible

Officer of the Trustee has actual knowledge thereof or unless written

notice of any such event is received by the Trustee at the Corporate

Trust Office of the Trustee, and such notice references the Equipment

Notes and this Indenture; and

(h) the Trustee may request that the Company deliver an

Officer's Certificate setting forth the names of individuals and/or

titles of officers authorized at such time to take specified actions

pursuant to this Indenture, which Officer's Certificate may be signed

by any person authorized to sign an Officer's Certificate, including

any person specified as so authorized in any such certificate

previously delivered and not superseded.

Section 5.05 Not Responsible for Recitals or Issuance of

Equipment Notes. The recitals contained herein and in the Equipment Notes,

except the certificates of authentication, shall not be taken as the statements

of the Trustee, and the Trustee assumes no responsibility for their correctness.

The Trustee makes no representations as to the validity or sufficiency of this

Indenture or the Equipment Notes, except that the Trustee hereby represents and

warrants that this Indenture has been executed and delivered by one of its

officers who is duly authorized to execute and deliver such document on its

behalf.

Section 5.06 May Hold Equipment Notes. The Trustee may become

the owner or pledgee of Equipment Notes and may otherwise deal with the Company

with the same rights it would have if it were not Trustee.

Section 5.07 Indenture Supplements. In the event there is

delivered to the Trustee for execution an Indenture Supplement or a Memorandum

of Trust, as contemplated by Section 9.11, 9.13 or 9.14, the Trustee agrees,

subject to Section 8.02, for the benefit of the holders of the Equipment Notes

and the Company, to execute and deliver such Indenture Supplement or Memorandum

of Trust, as the case may be.

Section 5.08 Effect of Replacements. In the event of the

substitution of a Replacement Item of Equipment, all provisions of this

Indenture relating to the Item of Equipment or Items of Equipment being replaced

shall be applicable to such Replacement Item of Equipment with the same force

and effect as if such Replacement Item of Equipment was the same Item of

Equipment being replaced.

Section 5.09 Withholding Taxes. The Trustee, as agent for the

Company, shall exclude and withhold from each payment of principal, premium, if

any, and interest and other amounts due hereunder or under the Equipment Notes

any and all withholding taxes applicable thereto as required by law. The Trustee

agrees to act as such withholding agent and, in connection therewith, whenever

any present or future taxes or similar charges are required to be withheld by it

with respect to any amounts payable in respect of the Equipment Notes, to

withhold such amounts and timely pay the same to the appropriate authority in

the name of and on behalf of the holders of the Equipment Notes, that it will

file any necessary withholding tax returns or statements when due, and that, as

promptly as possible after the payment thereof, it will deliver to each holder

of an Equipment Note appropriate documentation showing the payment thereof,

together with such additional documentary evidence as such holders may

reasonably request from time to time.

Section 5.10 No Representations or Warranties as to the Items

of Equipment or Documents. THE TRUSTEE NEITHER MAKES NOR SHALL BE DEEMED TO HAVE

MADE (i) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE,

CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE ITEMS OF

EQUIPMENT OR AS TO THE TITLE THERETO, OR ANY OTHER REPRESENTATION OR WARRANTY

WITH RESPECT TO THE ITEMS OF EQUIPMENT WHATSOEVER, or (ii) any representation or

warranty as to the validity, legality or enforceability of this Indenture, the

Equipment Notes, or any Indenture Supplement or any other document or instrument

or as to the correctness of any statement contained in any thereof (except as to

the representations and warranties made by the Trustee herein).

Section 5.11 No Segregation of Moneys; No Interest;

Investments. (a) Subject to Section 5.12(b), no money received by the Trustee

hereunder need be segregated in any manner except to the extent required by law,

and any such money may be deposited under such general conditions for the

holding of trust funds as may be prescribed by law applicable to the Trustee,

and, except as otherwise agreed by the Trustee, the Trustee shall not be liable

for any interest thereon.

(b) Any amounts held by the Trustee pursuant to the express

terms of this Indenture and not required to be distributed as herein provided

shall be invested and reinvested by the Trustee from time to time in Specified

Investments at the written direction and at the risk and expense of the Company,

except that in the absence of any such direction or after an Indenture Event of

Default shall have occurred and be continuing, such amounts shall be so invested

by the Trustee in Specified Investments of the type specified in clause (f) of

the definition thereof, except as provided below, and the Trustee shall hold any

such Specified Investments until maturity. Any net income or gain realized as a

result of any such investments shall be held as part of the Indenture Estate and

shall be applied by the Trustee at the same times, on the same conditions and in

the same manner as the amounts in respect of which such income or gain was

realized are required to be distributed in accordance with the provisions hereof

pursuant to which such amounts were required to be held and if no Indenture

Event of Default shall have occurred and be continuing any excess shall be paid

to the Company upon its request. Any such Specified Investments may be sold or

otherwise reduced to cash (without regard to maturity date) by the Trustee

whenever necessary to make any application as required by such provision. The

Trustee shall have no liability for any loss resulting from any such investment

other than by reason of the willful misconduct or negligence of the Trustee.

Section 5.12 No Compensation from Holders or Indenture Estate.

The Trustee agrees that it shall have no right against the Holders of the

Equipment Notes or, except as provided in Sections 3.03 and 4.03, the Indenture

Estate, for any fee as compensation for its services hereunder.

Section 5.13 Limitation on Duty of Trustee in Respect of

Indenture Estate. (a) Except as otherwise provided in this Indenture, the

Trustee shall have no duty as to any Indenture Estate in its possession or

control or in the possession or control of any agent or bailee or any income

thereon or as to preservation of rights against prior parties or any other

rights pertaining thereto and the Trustee shall not be responsible for filing

any financing or continuation statements or recording any documents or

instruments in any public office at any time or times or otherwise perfecting or

maintaining the perfection of any security interest in the Indenture Estate.

(b) The Trustee shall not be responsible for (i) the

existence, genuineness or value of any of the Indenture Estate or for the

validity, perfection, priority or enforceability of the Liens in any of the

Indenture Estate, whether impaired by operation of law or by reason of any

action or omission to act on its part hereunder, except to the extent such

action or omission constitutes negligence, bad faith or willful misconduct on

the part of the Trustee, (ii) for the validity or sufficiency of the Indenture

Estate or any agreement or assignment contained therein, (iii) for the validity

of the title of the Company to the Indenture Estate, (iv) for insuring the

Indenture Estate or (v) for the payment of taxes, charges, assessments or Liens

upon the Indenture Estate or otherwise as to the maintenance of the Indenture

Estate.

Section 5.14 No Liability of Trustee. Anything in this

Indenture to the contrary notwithstanding, in no event shall the Trustee be

liable under or in connection with this Indenture for indirect, special,

incidental, punitive or consequential losses or damages of any kind whatsoever,

including but not limited to lost profits, whether or not foreseeable, even if

the

Trustee has been advised of the possibility thereof and regardless of the form

of action in which such damages are sought.

ARTICLE VI

INDEMNIFICATION AND COMPENSATION OF TRUSTEE

Section 6.01 Scope of Indemnification. The Company hereby

agrees, whether or not any of the transactions contemplated hereby shall be

consummated, to assume liability for, and does hereby indemnify, protect, save

and keep harmless the Trustee, in each of its capacities hereunder, including in

its individual capacity, and its successors, assigns, agents and servants, from

and against any and all liabilities (including strict tort liability),

obligations, losses, damages, penalties, taxes (excluding any taxes, fees or

other charges on, based on, or measured by, any fees or compensation received by

the Trustee for services rendered in connection with the transactions

contemplated hereby), claims, actions, suits, costs, expenses or disbursements

(including reasonable legal fees and expenses) of any kind and nature whatsoever

which may be imposed on, incurred by or asserted against the Indenture Estate or

the Trustee (whether or not also indemnified against by any other person under

any other document) in any way relating to or arising out of this Indenture, any

Indenture Supplement or the Equipment Notes, or the enforcement of any of the

terms of any thereof, or in any way relating to or arising out of the

manufacture, purchase, acceptance, nonacceptance, rejection, ownership,

delivery, lease, sublease, registration, re-registration, possession, use,

operation, condition, sale, return or other disposition of the Items of

Equipment or any part thereof (including, without limitation, latent and other

defects, whether or not discoverable, and any claim for patent, trademark or

administration of the Indenture Estate or the action or inaction of the Company

hereunder, or the Trustee hereunder except only in the case of willful

misconduct, bad faith or gross negligence (or negligence in the handling of

funds) of the Trustee in the performance of its duties hereunder or the breach

of any of its representations and warranties set forth herein.

Section 6.02 Compensation. The Company agrees

(a) to pay to the Trustee from time to time such compensation

as the Company and the Trustee shall from time to time agree in writing for all

services rendered by it hereunder (which compensation shall not be limited by

any provision of law in regard to the compensation of a trustee of an express

trust); and

(b) except as otherwise expressly provided herein, to

reimburse the Trustee upon its request for all reasonable expenses,

disbursements and advances incurred or made by the Trustee in accordance with

any provision of this Indenture (including the reasonable compensation and the

expenses and disbursements of its agents and counsel), except any such expense,

disbursement or advance as may be attributable to its negligence, wilfull

misconduct or bad faith.

The Trustee shall have a lien prior to the Equipment Notes as

to all property and funds held by it hereunder for any amount owing it or any

predecessor Trustee pursuant to

Sections 6.01 and 6.02, except with respect to funds held in trust for the

benefit of the Holders of particular Equipment Notes.

When the Trustee incurs expenses or renders services in

connection with an Indenture Event of Default specified in Section 4.01(f) or

Section 4.01(g), the expenses (including the reasonable charges and expenses of

its counsel) and the compensation for the services are intended to constitute

expenses of administration under any applicable federal or state bankruptcy,

insolvency or other similar law.

The provisions of this Section 6.02 shall survive the

termination of this Indenture.

ARTICLE VII

SUCCESSOR TRUSTEES

Section 7.01 Resignation of Trustee; Appointment of Successor.

(a) The resignation or removal of the Trustee and the appointment of a successor

Trustee shall become effective only upon the successor Trustee's acceptance of

appointment as provided in this Section 7.01. The Trustee or any successor

thereto may resign at any time without cause by giving at least 30 days' prior

written notice to the Company and the Holders of the Equipment Notes. A Majority

in Interest may at any time remove the Trustee without cause upon 60 days prior

written notice by an instrument in writing delivered to the Company and the

Trustee. In addition, the Company may remove the Trustee if: (i) the Trustee

fails to comply with Section 7.01(c), (ii) the Trustee is adjudged a bankrupt or

an insolvent, (iii) a receiver or public officer takes charge of the Trustee or

its property or (iv) the Trustee becomes incapable of acting as provided herein.

In the case of the resignation or removal of the Trustee, the

Company shall promptly appoint a successor Trustee, provided that a Majority in

Interest may appoint, within one year after such resignation or removal, a

successor Trustee which may be other than the successor Trustee appointed as

provided above, and such successor Trustee appointed as provided above shall be

superseded by the successor Trustee so appointed by a Majority in Interest. If a

successor Trustee shall not have been appointed and accepted its appointment

hereunder within 60 days after the Trustee gives notice of resignation as

provided above, the retiring Trustee, the Company or a Majority in Interest may

petition any court of competent jurisdiction for the appointment of a successor

Trustee. Any successor Trustee so appointed by such court shall immediately and

without further act be superseded by any successor Trustee appointed as provided

in the proviso to the fifth sentence of this paragraph (a) within one year from

the date of the appointment by such court.

(b) Any successor Trustee, however appointed, shall execute

and deliver to the Company and to the predecessor Trustee an instrument

accepting such appointment, and thereupon such successor Trustee, without

further act, shall become vested with all the estates, properties, rights,

powers, duties and trusts of the predecessor Trustee hereunder in the trusts

hereunder applicable to it with like effect as if originally named the Trustee

herein; but nevertheless, upon the written request of such successor Trustee,

such predecessor Trustee shall

execute and deliver an instrument transferring to such Trustee, upon the trusts

herein expressed applicable to it, all the estates, properties, rights, powers

and trusts of such predecessor Trustee, and such Trustee shall duly assign,

transfer, deliver and pay over to such successor Trustee all money or other

property then held by such predecessor Trustee hereunder.

under the laws of the United States of America or any state thereof, having a

combined capital and surplus of at least $50,000,000 (or the obligations and

liabilities of which are irrevocably and unconditionally guaranteed by an

affiliated company having a combined capital and surplus of at least

$50,000,000), if there be such an institution willing, able and legally

qualified to perform the duties of the Trustee hereunder upon reasonable or

customary terms.

(d) Any corporation into which the Trustee may be merged or

converted or with which it may be consolidated, or any corporation resulting

from any merger, conversion or consolidation to which the Trustee shall be a

party, or any corporation to which substantially all the corporate trust

business of the Trustee may be transferred, shall, subject to the terms of

paragraph (c) of this Section, be the Trustee under this Indenture without

further act.

Section 7.02 Appointment of Co-Trustee. It is the purpose of

this Indenture that there shall be no violation of any law of any jurisdiction

denying or restricting the right of banking corporations or associations to

transact business as trustee in such jurisdiction. It is recognized that in case

of litigation under this Indenture, and in particular in case of the enforcement

thereof on default, or in the case the Trustee deems that by reason of any

present or future law of any jurisdiction it may not exercise any of the powers,

rights or remedies herein granted to the Trustee or hold title to the

properties, in trust, as herein granted or take any action which may be

desirable or necessary in connection therewith, it may be necessary that the

Trustee appoint an individual or institution as a separate or co-trustee,

provided that unless an Indenture Event of Default shall have occurred and be

continuing, any such appointment of a co-trustee shall be subject to the consent

of the Company, which consent shall not be unreasonably withheld. The following

provisions of this Section are adopted to these ends.

In the event that the Trustee appoints an additional

individual or institution as a separate or co-trustee, each and every remedy,

power, right, claim, demand, cause of action, immunity, estate, title, interest

and lien expressed or intended by this Indenture to be exercised by or vested in

or conveyed to the Trustee with respect thereto shall be exercisable by and vest

in such separate or co-trustee but only to the extent necessary to enable such

separate or co-trustee to exercise such powers, rights and remedies, and only to

the extent that the Trustee by the laws of any jurisdiction is incapable of

exercising such powers, rights and remedies and every covenant and obligation

necessary to the exercise thereof by such separate or co-trustee shall run to

and be enforceable by either of them.

Should any instrument in writing from the Company be required

by the separate or co-trustee so appointed by the Trustee for more fully and

certainly vesting in and confirming to him or it such properties, rights,

powers, trusts, duties and obligations, any and all such instruments in writing

shall, on request, be executed, acknowledged and delivered by the Company;

provided, that if an Indenture Event of Default shall have occurred and be

continuing, if the Company does not execute any such instrument within fifteen

(15) days after request

therefor, the Trustees shall be empowered as an attorney-in-fact for the Company

to execute any such instrument in the Company's name and stead. In case any

separate or co-trustee or a successor to either shall die, become incapable of

acting, resign or be removed, all the estates, properties, rights, powers,

trusts, duties and obligations of such separate or co-trustee, so far as

permitted by law, shall vest in and be exercised by the Trustee until the

appointment of a new trustee or successor to such separate or co-trustee.

Every separate trustee and co-trustee shall, to the extent

permitted by law, be appointed and act subject to the following provisions and

conditions:

(i) all rights and powers, conferred or imposed upon the

Trustee shall be conferred or imposed upon and may be exercised or

performed by such separate trustee or co-trustee; and

(ii) no trustee hereunder shall be personally liable by reason

of any act or omission of any other trustee hereunder.

Any notice, request or other writing given to the Trustee

shall be deemed to have been given to each of the then separate trustees and

co-trustees, as effectively as if given to each of them. Every instrument

appointing any separate trustee or co-trustee shall refer to this Indenture of

this Section.

Any separate trustee or co-trustee may at any time appoint the

Trustee as its agent or attorney-in-fact with full power and authority, to the

extent not prohibited by law, to do any lawful act under or in respect of this

Indenture on its behalf and in its name. If any separate trustee or co-trustee

shall die, become incapable of acting, resign or be removed, all of its estates,

properties, rights, remedies and trusts shall vest in and be exercised by the

Trustee, to the extent permitted by law, without the appointment of a new or

successors trustee.

Section 7.03 No Liability for Clean-up of Hazardous Materials.

In the event that the Trustee is required to acquire title to an asset for any

reason, or take any managerial action of any kind in regard thereto, in order to

carry out any fiduciary or trust obligation for the benefit of another, which in

the Trustee's sole discretion may cause the Trustee to be considered an "owner

or operator" under the provisions of the Comprehensive Environmental Response,

Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601, et seq., or

otherwise cause the Trustee to incur liability under CERCLA or any other

federal, state or local law, the Trustee reserves the right to, instead of

taking such action, either resign as Trustee or arrange for the transfer of the

title or control of the asset to a court appointed receiver.

ARTICLE VIII

SUPPLEMENTS AND AMENDMENTS

TO THIS INDENTURE AND OTHER DOCUMENTS

Section 8.01 Supplemental Indentures. (a) Supplemental

Indentures Without Consent of Holders. The Company, the Guarantor and the

Trustee, at any time and from time to

time, without notice to or the consent of any Holders of any Equipment Notes,

may enter into one or more indentures supplemental hereto for any of the

following purposes:

(i) to correct or amplify the description of any property at

any time subject to the lien of this Indenture or better to assure,

convey and confirm unto the Trustee any property subject or required to

be subject to the lien of this Indenture or to subject to the lien of

this Indenture any Item of Equipment or Lease in accordance with the

provisions of Section 9.11, 9.13 or 9.14; provided, however, that

Indenture Supplements entered into for the purpose of subjecting to the

lien of this Indenture any Item of Equipment or Lease need only be

executed by the Company; or

(ii) to evidence (in accordance with Article VII) the

succession of a successor Trustee hereunder; or

(iii) to add to the covenants of the Company or the Guarantor,

for the benefit of the holders of the Equipment Notes, or to surrender

any right or power herein conferred upon the Company; or

(iv) to cure any ambiguity, to correct or supplement any

provision herein which may be defective or inconsistent with any other

provision herein, or to make any other provisions with respect to

matters or questions arising hereunder so long as any such action does

not adversely affect the interests of the Holders of the Equipment

Notes.

(b) Supplemental Indentures with Consent of Majority in

Interest. With the written consent of a Majority in Interest, the Company and

the Guarantor may, and the Trustee, subject to Section 8.02 hereof, shall, at

any time and from time to time, enter into an indenture or indentures

supplemental hereto for the purpose of adding any provisions to or changing in

any manner or eliminating any of the provisions of this Indenture or of

modifying in any manner the rights and obligations of Holders of the Equipment

Notes under this Indenture; provided, however, without the consent of each

Holder of an Equipment Note affected thereby, no such Supplemental Indenture

shall:

(i) change the final maturity of the principal of any

Equipment Note, or change the dates or amounts of payment of any

installment of the principal of or premium, if any, or interest on any

Equipment Note, or reduce the principal amount thereof or the premium,

if any, or interest thereon, or change to a location outside the United

States the place of payment where, or the coin or currency in which,

any Equipment Note or the premium, if any, or interest thereon is

payable, or impair the right to institute suit for the enforcement of

any such payment of principal or premium, if any, or interest on or

after the date such principal or premium, if any, or interest becomes

due and payable;

(ii) create any lien with respect to the Indenture Estate

ranking prior to, or on a parity with, the security interest created by

this Indenture except such as are permitted by this Indenture, or

deprive any Holder of an Equipment Note of the benefit of the lien on

the Indenture Estate created by this Indenture;

(iii) reduce the percentage in principal amount of the

Equipment Notes, the consent of whose Holders is required for any such

supplemental indenture, or the consent of whose Holders is required for

any waiver of compliance with certain provisions of this Indenture, or

of certain defaults hereunder and their consequences provided for in

this Indenture;

(iv) modify any provisions of this Section 8.01(b), except to

provide that certain other provisions of this Indenture cannot be

modified or waived without the consent of the Holder of each Equipment

Note affected thereby; or

(v) release the Guarantor from any of its obligations under

the Guarantee or this Indenture.

Section 8.02 Trustee Protected. The Trustee shall be entitled

to receive, and shall be fully protected in relying upon, an Opinion of Counsel

stating that the execution of any amendment, supplement or waiver authorized

pursuant to this Article VIII or Article V is authorized or permitted by this

Indenture. If in the opinion of the Trustee any document required to be executed

pursuant to the terms of Section 8.01 adversely affects any right, duty,

immunity or indemnity in favor of the Trustee under this Indenture, the Trustee

may in its discretion decline to execute such document.

Section 8.03 Request of Substance, Not Form. It shall not be

necessary for the consent of the holders of Equipment Notes under Section

8.01(b) to approve the particular form of any proposed supplemental indenture,

but it shall be sufficient if such consent shall approve the substance thereof.

Section 8.04 Documents Mailed to Holders. Promptly after the

execution by the Trustee of any document entered into pursuant to Section

8.01(b), the Trustee shall mail, by first-class mail, postage prepaid, a

conformed copy thereof to each Holder of an Equipment Note at its address in the

Equipment Note Register, but the failure of the Trustee to mail such conformed

copies shall not impair or affect the validity of such document.

Section 8.05 Notation on or Exchange of Equipment Notes. If an

amendment, supplement or waiver changes the terms of an Equipment Note, the

Trustee may require the Holder to deliver such Equipment Note to the Trustee.

The Trustee may place an appropriate notation on the Equipment Note indicating

the changed terms and return it to the Holder, and the Trustee may place an

appropriate notation on any Equipment Note thereafter authenticated.

Alternatively, if the Company or the Trustee so determines, the Company in

exchange for such changed Equipment Note shall issue and the Trustee shall

authenticate a new Equipment Note that reflects the changed terms.

ARTICLE IX

COVENANTS OF THE COMPANY

Section 9.01 Payment of Equipment Notes. The Company will pay

or cause to be paid the principal of, premium, if any, and interest on the

Equipment Notes on the dates and in the manner provided in the Equipment Notes.

Section 9.02 Maintenance of Corporate Existence. The Company

shall at all times maintain its corporate existence, except as otherwise

specifically permitted in Section 9.03, and shall do or cause to be done all

things necessary to preserve and keep in full force and effect its rights

(charter and statutory) and franchises; provided, however, that the Company

shall not be required to preserve any right or franchise if the Company

determines that the preservation thereof is no longer desirable in the conduct

of the business of the Company.

Section 9.03 Consolidation, Merger or Sale of Assets of the

Company. (a) The Company covenants that it will not merge into or consolidate

with any other corporation or sell, convey or otherwise dispose of all or

substantially all of its assets to any Person unless (i) either (A) the Company

(or the Guarantor) shall be the continuing corporation or (B) the successor

corporation (if other than the Company or the Guarantor) shall be a corporation

organized and existing under the laws of the United States of America or a State

thereof or the District of Columbia, and such corporation shall expressly assume

the due and punctual performance and observance of all of the covenants and

conditions of this Indenture and each other Operative Document to which the

Company is a party to be performed by the Company on the terms set forth herein

or therein by supplemental agreements given by such successor corporation to the

Trustee; (ii) such successor corporation shall make such filings and recordings

as shall be necessary, desirable or otherwise required to evidence such

reorganization, consolidation, merger, sale, conveyance or other disposition;

(iii) immediately after giving effect to such transaction, no Indenture Default

or Indenture Event of Default shall have occurred and be continuing solely as a

result of such consolidation, merger, sale, conveyance or other disposition and

the Company shall have delivered to the Trustee an Officer's Certificate to such

effect; (iv) in the event that the Company is not the surviving corporation, the

Company shall have delivered to the Trustee an Officer's Certificate and an

Opinion of Counsel, each stating that (x) such consolidation, merger, sale,

conveyance or other disposition and the assumption agreement described in clause

(i)(B) above comply with such clause (and in the case of such certificate,

clause (iii) of this Section 9.03(a)), (y) the assumption agreement described in

clause (i)(B) above is a legal, valid and binding obligation of such successor

corporation, and enforceable in accordance with its terms except as such

enforceability may be limited by bankruptcy, reorganization, insolvency,

moratorium and other similar laws and equitable principles affecting the

enforcement of creditors' rights generally, and (z) all conditions precedent

herein provided for relating to such transactions have been complied with.

(b) In case of any such merger, consolidation, sale,

conveyance or other disposition and upon any such assumption by the successor

corporation, such successor corporation shall succeed to and be substituted for

the Company hereunder, with the same effect as if it had been named herein as

the party of the first part.

Section 9.04 Annual Statements as to Compliance by the

Company. The Company covenants and agrees to deliver to the Trustee on or before

a date not more than 120 days after the end of each fiscal year of the Company

ending after the date hereof, an Officer's Certificate stating as to the officer

signing such certificate, whether or not to the best of such officer's knowledge

the Company is in compliance with all of the terms, provisions and conditions

hereof, and, if the Company shall be in default, specifying all such defaults

and the nature hereof, of which such officer may have knowledge.

Section 9.05 Notices of Indenture Defaults. Promptly after

becoming aware of the existence of the occurrence of an Indenture Default or an

Indenture Event of Default, the Company shall give notice thereof to the

Trustee.

Section 9.06 Liens. The Company shall not, directly or

indirectly, create, incur, assume, permit, or suffer to exist any Lien on or

with respect to any Item of Equipment, title thereto or any interest therein or

with respect to any Lease, any interest therein except (a) the rights of the

Trustee as provided in this Indenture, (b) Liens for Taxes either not yet due

and payable or being contested in good faith by appropriate proceedings, (c)

materialmen's, mechanics', workmen's, repairmen's, employees' or other like

Liens arising in the ordinary course of business for amounts of payment of which

is either not yet delinquent or is being contested in good faith by appropriate

proceedings, (d) Liens (other than Liens for Taxes) arising out of judgments or

awards against the Company with respect to which an appeal or proceeding for

review is being prosecuted in good faith and for the payment of which adequate

reserves have been provided or other appropriate provisions have been made and

with respect to which there shall have been secured a stay of execution pending

such appeal or proceeding for review, (e) the interests of lessees (or permitted

sublessees) under the Leases, and (f) salvage or similar rights of insurers

under insurance policies maintained pursuant to Section 9.09 hereof. The Company

will promptly, at its own expense, take such action as may be necessary by

bonding or otherwise duly to discharge any such Lien not excepted above if the

same shall arise at any time.

Section 9.07 Maintenance; Compliance with Laws; Possession;

Identification Marks. (a) Maintenance. The Company, at its own expense, shall

maintain, service and keep each Item of Equipment (i) according to prudent

industry practice in good working order and in good physical condition for

railcars of a similar age and usage, normal wear and tear excepted, (ii) in

accordance in all material respects with applicable manufacturer's warranties,

and (iii) in the same manner as employed by the Company for similar items of

equipment owned or leased by it.

(b) Compliance with Laws, Etc. The Company agrees to (i)

maintain and service each Item of Equipment in compliance with all Applicable

Laws and (ii) make alterations and modifications to each Item of Equipment as

are required by all Applicable Laws.

any user incorporated in the United States of America (or any state thereof or

the District of Columbia), Mexico or Canada for use upon railroad lines located

in the United States of America, Mexico or Canada. No such lease or other

relinquishment of possession of any Item of Equipment shall in any way discharge

or diminish any of the Company's obligations to the Trustee hereunder or

under any other Operative Document for which obligations the Company shall be

and remain primarily liable as a principal and not as a surety.

(d) Identification Marks. With respect to each Item of

Equipment subject to the Lien of this Indenture on the Closing Date, the Company

has caused and, on or prior to the date on which an Indenture Supplement is

executed and delivered in respect of a Replacement Item of Equipment pursuant to

Section 9.11 or 9.14, the Company shall cause each Item of Equipment to be

numbered with its road number and reporting mark set forth in the Indenture

Supplement describing such Item of Equipment and from and after each such date

the Company shall keep and maintain, plainly, distinctly, permanently and

conspicuously marked by a plate or stencil printed in contrasting colors upon

each side of each Item of Equipment, in letters not less than one inch in

height, a legend substantially as follows: "OWNERSHIP SUBJECT TO A SECURITY

AGREEMENT FILED WITH THE SURFACE TRANSPORTATION BOARD", with appropriate changes

thereof and additions thereto as from time to time may be required by law in

order to protect the rights of the Trustee under this Indenture. The Company

shall not change the identification number of any Item of Equipment unless and

until (i) a statement of new number or numbers to be substituted therefor shall

have been filed with the Trustee and duly filed, recorded or deposited, as the

case may be, by the Company in all public offices where this Indenture shall

have been filed, recorded or deposited and (ii) the Company shall have furnished

the Trustee with an opinion of counsel to the effect that such statement has

been so filed, recorded or deposited, and that no other filing, recordation,

deposit or giving of notice with or to any federal, District of Columbia, state,

provincial or local government or agency thereof is necessary to protect the

rights of the Trustee in such Item of Equipment.

Section 9.08 Replacement of Parts. The Company, at its own

cost and expense, shall replace or cause to be replaced all Parts which may from

time to time be incorporated or installed in or attached to any Item of

Equipment and which may from time to time become worn out, lost, stolen or

destroyed.

Section 9.09 Insurance. The Company will at all times, as part

of an insurance program including appropriate risk retention and self-insurance,

and at its own expense, cause to be carried and maintained casualty insurance

and public liability insurance with financially sound and reputable insurers of

recognized responsibility in respect of the Items of Equipment in such amounts,

against such risks and on such terms and conditions as is customarily obtained

by the Company in respect of similar equipment owned by it. The Company will

forthwith give notice to the Trustee of the cancellation of any such insurance,

and, promptly upon obtaining such insurance but in no event later than 30 days

after such cancellation, the Company will give to the Trustee a certificate

reflecting the replacement of insurance required to be maintained pursuant to

this Section 9.09. The Company shall deliver to the Trustee prior to the Closing

Date original or duplicate policies or certificates of insurance in form

satisfactory to the Trustee evidencing all insurance then required to be

maintained by the Company hereunder, and thereafter, within 30 days after the

issuance of any additional policies or amendments or supplements to any of such

policies, the Company will deliver, or cause to be delivered, the same (or

certificates of the insurers under such policies evidencing the same) to the

Trustee, and the Company shall, not later than 30 days prior to the expiration

of any policy, deliver certificates of the insurers evidencing the replacement

thereof.

Section 9.10 Age of Equipment. No Item of Equipment shall be

more than 25 years old.

Section 9.11 Replacement of Items of Equipment upon Event of

Loss. (a) Upon the occurrence of an Event of Loss with respect to an Item of

Equipment, the Company shall notify the Trustee of such occurrence within 60

days after the Company obtains actual knowledge of such occurrence. Within 60

days after the Company so notifies the Trustee of the occurrence of such Event

of Loss, the Company shall give the Trustee notice of its election to perform

one of the following options (it being agreed that if the Company shall not have

given such notice of election within such 60-day period, the Company shall be

deemed to have elected to perform the option set forth in the following clause

(ii)). The Company may elect either to:

(i) not more than 60 days after notice of its election to the

Trustee pursuant to the immediately preceding sentence (such 60th day

being the "Loss Replacement Date"), replace the Item of Equipment

subject to the Event of Loss with railcars having the same or greater

Fair Value; or

(ii) on the first Payment Date occurring at least 30 days

after notice of its election to the Trustee pursuant to the immediately

preceding sentence on which the aggregate principal amount of Equipment

Notes to be redeemed pursuant to Section 2.12(b) (together with

equipment notes to be redeemed pursuant to Section 2.12(b) of each of

the Other Indentures) shall be equal to or greater than $2,000,000

(such Payment Date being the "Loss Redemption Date"), redeem the

Equipment Notes in accordance with Section 2.12(b).

(b) If the Company elects to substitute a Replacement Item of

Equipment pursuant to clause (i) above, the Company shall, at its sole expense,

not later than the Loss Replacement Date:

(i) deliver to the Trustee, (A) for execution pursuant to

Section 5.07, an Indenture Supplement covering the Replacement Item of

Equipment and the related Lease, if any, duly executed by the Company

and the Guarantor, and a Memorandum of Trust covering the Replacement

Item of Equipment, duly executed by the Company and the Guarantor, and

(B) a Memorandum of Lease covering the Lease, if any, relating to such

Replacement Item of Equipment and cause such executed Memorandum of

Trust and Memorandum of Lease, if any, to be duly filed and recorded

with the STB pursuant to 49 U.S.C. Section 11301 and deposited in the

office of the Registrar General of Canada pursuant to Section 105 of

the Canada Transportation Act;

(ii) cause a financing statement or statements with respect to

the Replacement Item of Equipment and the related Lease, if any, to be

filed in such place or places as are necessary in order to evidence and

perfect the interests of the Trustee therein;

(iii) furnish the Trustee with evidence of compliance with the

insurance provisions of Section 9.09 with respect to the Replacement

Item of Equipment substantially similar to that originally furnished to

the Trustee with respect to the replaced Item of Equipment pursuant to

this Indenture;

(iv) furnish the Trustee with an Officer's Certificate

certifying that, upon consummation of such replacement, no Indenture

Default or Indenture Event of Default which arises solely as a result

of such replacement will exist hereunder;

(v) furnish the Trustee with an Officer's Certificate stating

(A) that the Replacement Item of Equipment is free of all Liens (other

than Liens permitted under Section 9.06) and has a Fair Value at least

equal to the Fair Value of the Item of Equipment so replaced

immediately prior to the occurrence of such Event of Loss (which

Certificate shall include the basis for determination of such Fair

Value), (B) whether such Replacement Item of Equipment is then subject

to a lease and, if so, the name of the lessee and such other

information as the Trustee may reasonably request, (C) that each

Replacement Item of Equipment has been marked in accordance with

Section 9.07(d), and (D) that, in the opinion of the signer, all

conditions precedent provided for in this Indenture relating to such

replacement have been complied with; and

(vi) take such other actions and furnish such other

certificates and documents as may be necessary or as the Trustee may

reasonably require in order to assure that the Replacement Item of

Equipment and the related Lease, if any, are duly and properly

subjected to the Lien of this Indenture, to the same extent as the Item

of Equipment replaced thereby and the related Lease, if any.

Section 9.12 Scope of Business Activities Abroad. The Company

shall not engage in any business activities within the territory of Mexico which

might result in the Company being subject to the Mexican Bankruptcy Law ("Ley de

Concursos Mercantiles") without first creating and perfecting a first priority

security interest in all Items of Equipment held or owned by the Company within

the territory of Mexico and delivering to the Trustee an opinion of Mexican

counsel satisfactory to the Trustee as to the perfection and priority of such

security interest and evidence of such filings and recordations as may be

necessary in the opinion of such counsel to establish and perfect such security

interest.

Section 9.13 Filings and Opinions. (a) On or prior to the

Closing Date the Company will cause the Memorandum of Trust and the Memorandum

of Lease, each dated the Closing Date, covering the Items of Equipment and

related Leases described in the Indenture Supplement dated the Closing Date to

be duly filed and recorded with the STB pursuant to 49 U.S.C. Section 11301 and

deposited in the office of the Registrar General of Canada pursuant to Section

105 of the Canada Transportation Act. The Company will furnish to the Trustee

evidence of such filing and recordation.

(b) Each Indenture Supplement and Memorandum of Lease executed

pursuant to Section 9.11(b) or 9.14 shall also cover all Leases not covered by

any Memorandum of Lease previously filed as described in Section 9.13(a) or (b).

Within 90 days of the end of each fiscal year of the Company,

the Company shall deliver to the Trustee an Indenture Supplement for execution

pursuant to Section 5.07, and a Memorandum of Lease (covering all Leases, if

any, executed by the Company not covered by a Memorandum of Lease that has been

filed as described in this sentence or under Section 9.13(a)) duly executed by

the Company and cause such Memorandum of Lease to be duly filed and

recorded with the STB pursuant to 49 U.S.C. Section 11301 and deposited in the

office of the Registrar General of Canada pursuant to Section 105 of the Canada

Transport Act; provided that if any Memorandum of Lease has been so filed

pursuant to Section 9.11 or 9.14 during the three-month period immediately

following the end of such fiscal year, no filing of any additional Memorandum of

Lease or delivery of such an Indenture Supplement will be required pursuant to

this paragraph with respect to such fiscal year. The Company shall also cause a

financing statement or statements with respect to the Leases covered by such

Indenture Supplement to be filed in such place or places as are necessary in

order to evidence and perfect the interests of the Trustee therein and shall

deliver to the Trustee evidence of such filings.

the terms of this Indenture, at its own expense, each Memorandum of Trust and

Memorandum of Lease and financing statements (and continuation statements when

applicable) with respect to the Indenture Estate now existing or hereafter

created meeting the requirements of applicable law in such manner and in such

jurisdictions as are necessary to perfect and maintain the perfection of the

Lien created hereunder in the Indenture Estate, and to promptly deliver a filed

stamped copy of each such financing statement or other evidence of filing or

recordation to the Trustee.

(d) The Company shall deliver to the Trustee (i) within 90

days after the end of each fiscal year of the Company, an Opinion of Counsel, in

form and substance reasonably satisfactory to the Trustee, as to the due filing

of financing statements with the appropriate filing offices and the due filing

with the STB pursuant to 49 U.S.C. Section 11301 and the deposit in the office

of the Registrar General of Canada pursuant to Section 105 of the Canada

Transportation Act of each Memorandum of Trust and each Memorandum of Lease

covering Replacement Items of Equipment subject to the Lien of this Indenture

and Leases executed by the Company, in each case, since the later of the Closing

Date and the date of the last such Opinion of Counsel delivered to the Trustee

and (ii) at any time that the number of Replacement Items of Equipment not

covered by such an Opinion of Counsel totals at least 25, an Opinion of Counsel

in form and substance reasonably satisfactory to the Trustee, as to the due

filing of financing statements with the appropriate filing offices and the due

filing with the STB pursuant to 49 U.S.C. Section 11301 and deposit in the

office of the Registrar General of Canada pursuant to Section 105 of the Canada

Transportation Act of each Memorandum of Trust and each Memorandum of Lease

covering such Replacement Items of Equipment and Leases.

(e) If at any time Mexico, one or more states in Mexico, or

any of the Canadian provinces establishes a state or provincial or other system

for filing and perfecting the security interests of entities such as the

Trustee, at the time that the Company takes such action with respect to other

equipment similar to the Equipment and also upon the request of the Trustee

(given at the request of a Majority in Interest), the Company shall cause any

and all of the Operative Agreements to be recorded with or under such system and

shall cause all other filings and recordings and all such other action required

under such system to be effected and taken, in order to perfect and protect the

right, title and interests of the Trustee.

Section 9.14 Substitution and Replacement of Equipment. (a)

The Company, at its option, may, at any time and from time to time, request the

Trustee to release an Item of Equipment from the Lien of this Indenture, and

upon receipt of a Company Order requesting such release, the Trustee shall

execute and deliver an appropriate instrument furnished by the

Company to the Trustee releasing such Item of Equipment from the Lien of this

Indenture; provided that no Item of Equipment shall be so released unless, in

accordance with this Section, simultaneously there shall be subject to the Lien

of this Indenture railcars having the same or greater Fair Value as the Item of

Equipment to be so released by the Trustee.

(b) At or prior to the time of delivery of any Company Order

for release of any Item of Equipment pursuant to this Section, the Company shall

take all the actions specified in Section 9.11(b)(i) through (vi) (provided

that, except in the case of a substitution resulting from the exercise by a

lessee of its purchase option with respect to an Item of Equipment under a

Lease, the Officer's Certificate provided pursuant to Section 9.11(b)(iv) shall

certify that upon consummation of such replacement, no Indenture Event of

Default will exist hereunder) with respect to each Replacement Item of Equipment

and the related Lease, if any, and deliver to the Trustee an Officer's

Certificate stating the Fair Value, as of the date specified in such

Certificate, of each Item of Equipment so to be released by the Trustee (which

Certificate shall include the basis for such determination).

ARTICLE X

GUARANTEE

Section 10.01 Guarantee. (a) The Guarantor hereby

unconditionally guarantees to each Noteholder and to the Trustee and its

successors and assigns, irrespective of the validity and enforceability of this

Indenture, the Equipment Notes or the obligations of the Company hereunder or

thereunder, that:

(i) the principal of, premium, if any, and interest on the

Equipment Notes will be promptly paid in full when due, and interest on

the overdue principal of, premium, if any, and interest on the

Equipment Notes, if any, if lawful, and all other obligations of the

Company to the Holders or the Trustee hereunder or thereunder will be

promptly paid in full or performed, all in accordance with the terms

hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of

any Equipment Notes or any of such other obligations, that same will be

promptly paid in full when due or performed in accordance with the

terms of the extension or renewal.

Failing payment when due of any amount so guaranteed or any

performance so guaranteed for whatever reason, the Guarantor will pay or perform

the same immediately. The Guarantor agrees that this is a guarantee of payment

and not a guarantee of collection.

(b) The Guarantor hereby agrees that its obligations hereunder

are absolute and unconditional, irrespective of the validity, regularity or

enforceability of the Equipment Notes or this Indenture, the absence of any

action to enforce the same, any waiver or consent by any Noteholder with respect

to any provisions hereof or thereof, the recovery of any judgment against the

Company, any action to enforce the same or any other circumstance which might

otherwise constitute a legal or equitable discharge or defense of a guarantor.

The obligations of the Guarantor hereunder shall remain in full force and effect

until satisfaction of all obligations guaranteed by it hereunder and, without

limiting the generality of the foregoing, to the extent not

prohibited by applicable law, shall not be released, discharged or otherwise

affected by the existence of any claims, set-off, defense, counterclaim or other

rights that the Guarantor may have at any time and from time to time against any

Person, whether in connection herewith or with any unrelated transaction. The

Guarantor hereby waives diligence, presentment, demand of payment, filing of

claims with a court in the event of insolvency or bankruptcy of the Company, any

right to require a proceeding first against the Company, protest, notice and all

demands whatsoever and covenant that this Guarantee will not be discharged

except by complete performance of the obligations contained in the Equipment

Notes and this Indenture.

or otherwise to return to the Company, the Guarantor or any custodian, trustee,

liquidator or other similar official acting in relation to either the Company or

the Guarantor, any amount paid by either to the Trustee or such Noteholder, this

Guarantee, to the extent theretofore discharged, will be reinstated in full

force and effect.

(d) The Guarantor agrees that it will not be entitled to any

right of subrogation in relation to the Noteholders in respect of any

obligations guaranteed hereby until payment in full of all obligations

guaranteed hereby. The Guarantor further agrees that, as between the Guarantor,

on the one hand, and the Noteholders and the Trustee, on the other hand, (i) the

maturity of the obligations guaranteed hereby may be accelerated as provided in

Article IV hereof for the purposes of this Guarantee, notwithstanding any stay,

injunction or other prohibition preventing such acceleration in respect of the

obligations guaranteed hereby, and (ii) in the event of any declaration of

acceleration of such obligations as provided in Article IV hereof, such

obligations (whether or not due and payable) will forthwith become due and

payable by the Guarantor for the purpose of this Guarantee.

(e) The delivery of any Equipment Note by the Trustee, after

the authentication thereof hereunder, will constitute due delivery of the

Guarantee set forth in this Indenture on behalf of the Guarantor.

Section 10.02 Consolidation, Merger or Sale of Assets of

Guarantor. (a) The Guarantor covenants that it will not merge into or

consolidate with any other corporation or sell, convey or otherwise dispose of

all or substantially all of its assets to any Person unless (i) either (A) the

Guarantor shall be the continuing corporation or (B) the successor corporation

(if other than the Guarantor) shall be a corporation organized and existing

under the laws of the United States of America or a State thereof or the

District of Columbia, and such corporation shall expressly assume the due and

punctual performance and observance of all of the covenants and conditions of

this Indenture, the Equipment Notes, and the Guarantee to be performed by the

Guarantor on the terms set forth herein or therein by supplemental agreements

given by such successor corporation to the Guarantor; (ii) such successor

corporation shall make such filings and recordings as shall be necessary,

desirable or otherwise required to evidence such reorganization, consolidation,

merger, sale, conveyance or other disposition; (iii) immediately after giving

effect to such transaction, no Indenture Default or Indenture Event of Default

shall have occurred and be continuing solely as a result of such consolidation,

merger, sale, conveyance or other disposition and the Guarantor shall have

delivered to the Trustee an Officer's Certificate to such effect; (iv) in the

event that the Guarantor is not the surviving corporation, the Guarantor shall

have delivered to the Trustee an Officer's Certificate and an

opinion of counsel to such successor corporation, each stating that (x) such

consolidation, merger, sale, conveyance or other disposition and the assumption

agreement described in clause (i)(B) above comply with such clause (and in the

case of such certificate, clause (iii) of this Section 10.02(a)), (y) the

assumption agreement described in clause (i)(B) above is a legal, valid and

binding obligation of such successor corporation, and enforceable in accordance

with its terms except as such enforceability may be limited by bankruptcy,

reorganization, insolvency, moratorium and other similar laws and equitable

principles affecting the enforcement of creditors' rights generally, and (z) all

conditions precedent herein provided for relating to such transactions have been

complied with.

(b) In case of any such merger, consolidation, sale,

conveyance or other disposition and upon any such assumption by the successor

corporation, such successor corporation shall succeed to and be substituted for

the Guarantor hereunder, with the same effect as if it had been named herein as

the party of the first part.

ARTICLE XI

MISCELLANEOUS

Section 11.01 Release of Property. With respect to each Item

of Equipment, this Indenture and the trusts created hereby shall terminate

without further action and this Indenture shall be of no further force or effect

upon the earliest to occur of (i) the release of such Item of Equipment from the

Lien of this Indenture by the Trustee pursuant to Section 2.12(a), 9.11 or 9.14,

(ii) the payment in full of the principal amount of, interest and any premium

on, all Equipment Notes outstanding hereunder and all other sums payable to the

Trustee and the Holders of the Equipment Notes hereunder and under such

Equipment Notes, and (iii) the date on which all conditions to the defeasance or

covenant defeasance of the Equipment Notes under Section 11.02(d) are satisfied.

The Trustee shall, upon the written request of the Company, execute and deliver

to, and at the expense of, the Person specified by the Company, an appropriate

instrument (in due form for recording) furnished by such Person to the Trustee,

releasing the appropriate Items of Equipment from the Lien of this Indenture.

Section 11.02 Defeasance and Covenant Defeasance. (a) The

Company may, at its option evidenced by a resolution of its board of directors

(or a duly constituted committee thereof) set forth in an Officer's Certificate,

at any time, elect to have either Section 11.02(b) or 11.02(c) be applied to all

outstanding Equipment Notes upon compliance with the conditions set forth below

in Section 11.02(d).

(b) Upon the Company's exercise under Section 11.02(a) of the

option applicable to this Section 11.02(b), each of the Company and the

Guarantor shall be deemed to have been discharged from its obligations with

respect to all outstanding Equipment Notes (including the Guarantee) on the date

the conditions set forth in Section 11.02(d) are satisfied (hereinafter,

"defeasance"). For this purpose, such defeasance means that the Company and the

Guarantor shall be deemed to have paid and discharged the entire indebtedness

represented by the outstanding Equipment Notes (including the Guarantee), which

shall thereafter be deemed to be "outstanding" only for the purposes of Section

11.02(e) and the other Sections of this

Indenture referred to in (i) and (ii) below, and to have satisfied all its other

obligations under such Equipment Notes, the Guarantee and this Indenture (and

the Trustee, on demand and at the expense of the Company, shall execute proper

instruments acknowledging the same), except for the following which shall

survive until otherwise terminated or discharged hereunder: (i) the rights of

Holders of outstanding Equipment Notes to receive, solely from the trust fund

described in Section 11.02(d), payments in respect of the principal of and

premium and interest on, such Equipment Notes when such payments are due, (ii)

the Company's obligations with respect to such Equipment Notes under Sections

2.03, 2.04, 2.05 and 2.06, (iii) the rights, powers, trusts, duties and

immunities of the Trustee hereunder and (iv) this Section 11.02.

option applicable to this Section 11.02(c), the Company shall be released from

its obligations under any covenant contained in Sections 9.04 through 9.14 and

the Guarantor shall be released from its obligation under Section 10.02 with

respect to the outstanding Equipment Notes on and after the date the conditions

set forth in Section 11.02(d) are satisfied (hereinafter, "covenant

defeasance"), and the Equipment Notes shall thereafter be deemed not to be

"outstanding" for the purposes of any direction, waiver, consent or declaration

or act of Holders (and the consequences of any thereof) in connection with such

covenants, but shall continue to be deemed "outstanding" for all other purposes

hereunder. For this purpose, covenant defeasance means that, with respect to the

outstanding Equipment Notes and the Guarantee, the Company and the Guarantor may

omit to comply with and shall have no liability in respect of any term,

condition or limitation set forth in any such covenant, whether directly or

indirectly, by reason of any reference elsewhere herein to any such covenant or

by reason of any reference in any such covenant to any other provision herein or

in any other document and such omission to comply shall not constitute an

Indenture Default or an Indenture Event of Default under Section 4.01, but,

except as specified above, the remainder of this Indenture and such Equipment

Notes shall be unaffected thereby.

(d) The following shall be the conditions to application of

either Section 11.02(b) or Section 11.02(c):

(i) The Company shall have irrevocably deposited with the

Trustee as funds in trust, specifically pledged as security for, and

dedicated solely to, the benefit of the Noteholders, (A) money in an

amount, (B) U.S. Government Obligations that, through the payment of

interest and principal in respect thereof in accordance with their

terms, will provide (not later than one Business Day before the due

date of any payment) money in an amount, or (C) a combination thereof,

sufficient, in the opinion of a nationally recognized firm of

independent certified public accountants expressed in a written

certification thereof delivered to the Trustee, to pay the outstanding

principal amount of and interest on all the Equipment Notes on the

dates such amounts are due.

(ii) In the case of an election under Section 11.01(b), the

Company shall have delivered to the Trustee an Opinion of Counsel to

the effect that there has been a change in tax law since the date

hereof or there has been published by the Internal Revenue Service a

ruling to the effect that, and based thereon such Opinion of Counsel

shall confirm that, the Noteholders and the holders of the Pass Through

Certificates will not recognize income, gain or loss for United States

Federal income tax purposes as a result

of the exercise by the Company of its option under Section 11.02(b) and

will be subject to United States Federal income tax on the same amounts

and in the same manner and at the same times as would have been the

case if such option had not been exercised.

(iii) In the case of an election under Section 11.02(c), the

Company shall have delivered to the Trustee an Opinion of Counsel to

the effect that the Noteholders and the holders of the Pass Through

Certificates will not recognize income, gain or loss for United States

Federal income tax purposes as a result of the exercise by the Company

of its option under Section 11.02(c) and will be subject to United

States federal income tax on the same amounts and in the same manner

and at the same times as would have been the case if such option had

not been exercised.

(iv) The Company shall have delivered to the Trustee an

Opinion of Counsel to the effect that such defeasance trust does not

constitute an "investment company" within the meaning of the Investment

Company Act of 1940, as amended, and after the passage of 90 days

following such deposit, such defeasance trust will not be subject to

Section 547 of the U.S. Bankruptcy Code or Section 15 of the New York

Debtor and Creditor Law.

(v) All other amounts then due and payable hereunder have been

paid.

(vi) Such deposit will not result in a breach or violation of,

or constitute a default or event of default under any other agreement

or instrument to which the Company is a party or by which it is bound.

(vii) No Indenture Event of Default or Indenture Default shall

have occurred and be continuing on the date of such deposit or at any

time during the period ending on the 91st day after the date of such

deposit.

(viii) The Company shall have delivered to the Trustee a

letter from each of Moody's Investor Service, Inc. and Standard &

Poor's Rating Services, a division of the McGraw-Hill Companies, Inc.

to the effect that immediately after giving effect to such defeasance

or covenant defeasance, as the case may be, its respective rating of

the Pass Through Certificates will not be withdrawn, suspended, subject

to Creditwatch, or lowered from its rating in effect immediately before

such defeasance or covenant defeasance.

(ix) The Company shall have delivered to the Trustee an

Officer's Certificate and an Opinion of Counsel, each stating that all

conditions precedent provided for relating to the defeasance or

covenant defeasance (as the case may be) of this Indenture have been

complied with.

(e) All monies and U.S. Government Obligations deposited with

the Trustee pursuant to Section 11.02(d) shall be held in trust and applied by

it, in accordance with the provisions of the Equipment Notes and this Indenture,

to the payment to the Noteholders of all sums due and to become due thereon for

principal and interest, but such money need not be segregated from other funds

except to the extent required by law.

(f) The Trustee shall promptly pay or return to the Company

upon request of the Company any money or U.S. Government Obligations held by it

at any time that are not required for the payment of the amounts described above

in Section 11.02(e) on the Equipment Notes for which money or U.S. Government

Obligations have been deposited pursuant to Section 11.02(d).

(g) If the Trustee is unable to apply any money in accordance

with Section 11.02(e) by reason of any order or judgment of any court or

governmental authority enjoining, restraining or otherwise prohibiting such

application, then the obligations of the Company and the Guarantor under this

Indenture and the Equipment Notes shall be revived and reinstated as though no

deposit had occurred pursuant to Section 11.02(b) or 11.02(c), as the case may

be, until such time as the Trustee is permitted to apply all such money in

accordance with Section 11.02(e); provided, however, that if the Company makes

any payment of principal of or premium or interest on, any Equipment Note

following the reinstatement of its obligations, the Company shall be subrogated

to the rights of the Noteholders to receive such payment from the money held by

the Trustee.

Section 11.03 No Legal Title to Indenture Estate in Holders.

No Holder of an Equipment Note shall have legal title to any part of the

Indenture Estate. The rights of all Holders of Equipment Notes derive solely

from this Indenture (including all supplements to this Indenture) and the

Indenture Estate and the Holders of the Equipment Notes derive no interest in

the Items of Equipment other than their beneficial interest in the Indenture

Estate. No transfer, by operation of law or otherwise, of any Equipment Note or

other right, title and interest of any Holder of an Equipment Note in and to the

Indenture Estate or hereunder shall operate to terminate this Indenture or the

trusts hereunder or entitle any successor or transferee of such Holder to an

accounting or to the transfer to it of legal title to any part of the Indenture

Estate.

Section 11.04 Sale of Items of Equipment by Trustee Is

Binding. Any sale or other conveyance of any Items of Equipment by the Trustee

made pursuant to the terms of this Indenture shall bind the Holders of the

Equipment Notes and the Company and shall be effective to transfer or convey all

right, title and interest of the Trustee, the Company and such Holders of the

Equipment Notes in and to the Equipment. No purchaser or other grantee shall be

required to inquire as to the authorization, necessity, expediency or regularity

of such sale or conveyance or as to the application of any sale or other

proceeds with respect thereto by the Trustee.

Section 11.05 Indenture and Equipment Notes for Benefit of the

Company, Guarantor, Trustee and Holders Only. Nothing in this Indenture, whether

express or implied, shall be construed to give to any Person other than the

Company, the Guarantor, the Trustee and the Holders of the Equipment Notes any

legal or equitable right, remedy or claim under or in respect of this Indenture

or any Equipment Note.

Section 11.06 Further Assurances. The Company and the

Guarantor will duly execute and deliver to the Trustee such further documents

and assurances and take such further action as may be necessary or as the

Trustee may from time to time reasonably request or as may be required by

applicable law or regulation in order to effectively carry out the intent and

purpose of this Indenture and to establish and protect the rights and remedies

created or intended to be created in favor of the Trustee hereunder.

Section 11.07 Compliance Certificates and Opinions. Upon any

application or request by the Company to the Trustee to take any action under

any provision of this Indenture, the Company shall furnish to the Trustee an

Officer's Certificate stating that, in the opinion of the signer, all conditions

precedent, if any, provided for in this Indenture relating to the proposed

action have been complied with and an Opinion of Counsel stating that in the

opinion of such counsel all such conditions precedent, if any, have been

complied with, except that in the case of any such application or request as to

which the furnishing of such documents is specifically required by any provision

of this Indenture relating to such particular application or request, no

additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a

condition or covenant provided for in this Indenture shall include:

(i) a statement that the individual signing such certificate

or opinion has read such covenant or condition and the definitions

herein relating thereto;

(ii) a brief statement as to the nature and scope of the

examination or investigation upon which the statements or opinions

contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of such individual, he

has made such examination or investigation as is necessary to enable

him to express an informed opinion as to whether or not such covenant

or condition has been complied with; and

(iv) a statement as to whether, in the opinion of such

individual, such condition or covenant has been complied with.

Section 11.08 Form of Documents Delivered to Trustee. In any

case where several matters are required to be certified by, or covered by an

opinion of, any specified Person, it is not necessary that all such matters be

certified by, or covered by the opinion of, only one such Person, or that they

be so certified or covered by only one document, but one such Person may certify

or give an opinion with respect to some matters and one or more other such

Persons as to other matters and any such Person may certify or give an opinion

as to such matters in one or several documents.

Any Opinion of Counsel stated to be based on the opinion of

other counsel shall be accompanied by a copy of such other opinion.

Where any Person is required to make, give or execute two or

more applications, requests, consents, certificates, statements, opinions or

other instruments under this Indenture, they may, but need not, be consolidated

and form one instrument.

Section 11.09 Acts of Holders. (a) Any direction, consent,

waiver or other action provided by this Indenture to be given or taken by

Holders may be embodied in and evidenced by one or more instruments of

substantially similar tenor signed by such Holders in person or by an agent duly

appointed in writing; and, except as herein otherwise expressly provided, such

action shall become effective when such instrument or instruments are delivered

to the Trustee and, where it is hereby expressly required, to the Company.