TRINITY INDUSTRIES INC (Form: 10-K, Received: 02/17/2017 12:27:04)

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, 2016



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

Commission File Number 1-6903

(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 ($0.01 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 30, 2016) was $2,780.4 million .

At January 31, 2017 the number of shares of common stock outstanding was 152,189,108 .

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 2017 Proxy Statement.

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	16
Item 2. Properties	17
Item 3. Legal Proceedings	17
Item 4. Mine Safety Disclosures	17

PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	18
Item 6. Selected Financial Data	21
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	44
Item 8. Financial Statements and Supplementary Data	45
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	96
Item 9A. Controls and Procedures	96
Item 9B. Other Information	98

PART III
Item 10. Directors, Executive Officers and Corporate Governance	98
Item 11. Executive Compensation	98
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	99
Item 13. Certain Relationships and Related Transactions, and Director Independence	99
Item 14. Principal Accountant Fees and Services	99

PART IV
Item 15. Exhibits and Financial Statement Schedules	100
Item 16. Form 10-K Summary	100

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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 complementary market-leading businesses providing products and services to the energy, chemical, agriculture, transportation, and construction sectors, among others. 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, 2016 , 2015 , and 2014 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;


•	parts and steel components;


•	the leasing, management, and maintenance of railcars;


•	highway products;


•	construction aggregates;


•	inland barges;


•	structural wind towers;


•	steel utility structures;


•	storage and distribution containers; and


•	trench shields and shoring products.

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 (the “Rail Group”).

The Rail Group offers a complete array of railcar solutions to our customers. We are capable of manufacturing a full line of railcars, including:

Autorack Cars - Autoracks and flatcars transport finished automobiles, SUV's, and light trucks.

Box Cars - Box cars carry a wide variety of bulk cargo such as auto parts, paper, and food products.

Covered Hopper Cars - Covered hopper cars transport commodities such as industrial sand and cement, grain products, dry fertilizer, and plastics. Pressure differential covered hopper cars carry products such as flour and starch.

Gondola Cars - Rotary gondola cars are primarily used for coal service. Other gondola cars carry bulk commodities such as scrap metal, aggregates, ores, and finished steel.

Intermodal Cars - Intermodal cars transport shipping containers in single or double stacked configurations as well as truck trailers.

Open Hopper Cars - Open hopper cars are used to transport coal, aggregates, and other similar products.

Tank Cars - Non-pressurized tank cars transport a wide variety of liquid commodities including chemicals, food products, and petroleum products. Pressurized tank cars are used to transport liquefied gases.

Our Rail Group is capable of manufacturing a diversified railcar product line, allowing us to capitalize on changing industry trends and developing opportunities in various markets including the energy, chemical, agriculture, automotive, and construction markets. Through plants in Mexico and the U.S., we are a leading manufacturer of railcar axles and coupling devices in North America and also manufacture and sell a variety of other railcar parts and components used in manufacturing and repairing railcars. We provide railcar maintenance services at multiple facilities in the U.S.

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 primarily against five major railcar manufacturers.

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For the year ended December 31, 2016 we shipped 27,240 railcars, or 42% of total North American railcar shipments. As of December 31, 2016 , our Rail Group backlog consisted of 29,220 railcars valued at $3.0 billion . This amount included approximately $ 0.9 billion in orders from our Railcar Leasing and Management Services Group (“Leasing Group”). The orders in our backlog from the Leasing Group are fully supported by lease commitments with external customers. The final amount dedicated to the Leasing Group may vary by the time of delivery as customers may alternatively choose to purchase railcars as external sales from the Rail Group.

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. 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.

In addition, TILC originates and manages railcar leases for third-party investor-owned funds and provides fleet maintenance and management services to industrial shippers. Our affiliations with third-party investor-owned funds, through strategic railcar alliances and the formation of railcar investment vehicles, combined with TILC's fleet maintenance and management services capabilities, complement our leasing business by generating stable fee income, strengthening customer relationships, and enhancing the view of TrinityRail ^® as a leading provider of railcar products and services.

The railcars in our lease fleet are leased to industrial shippers and railroads. These companies operate in various markets including the chemical, agricultural, automotive, and energy industries. 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, predominantly under full-service leases. A small percentage of our fleet is leased on a per diem basis. As of December 31, 2016 , the lease fleet of our subsidiaries included 85,110 owned or leased railcars that were 97.6% utilized. Of this total, 75,550 railcars were owned by TILC or its affiliates and 9,560 railcars were financed in sale-leaseback transactions. Total railcars under management including those managed for third-parties totaled 103,840 railcars.

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 primarily-steel products for infrastructure-related projects; and mines and produces construction aggregates. Many of these lines of business are seasonal and revenues are impacted by weather conditions and fluctuations in government spending levels.

Our highway products business is a leading U.S. manufacturer of guardrail, crash cushions, and other barriers. The Federal Highway Administration, which determines product eligibility for cost reimbursement using federal funds, has approved many of our products as eligible for federal-aid reimbursement based on satisfactory performance testing pursuant to criteria established under either the National Cooperative Highway Research Program Report 350 or the Manual for Assessing Safety Hardware, as applicable. Our crash cushion, barrier, and guardrail products include multiple proprietary products manufactured under license from certain public and private research organizations and inventors as well as Company-held patents. We sell highway products in Canada, Mexico, and throughout the U.S., and we export highway products, including proprietary products, internationally. The Company does not perform any installation services with respect to its highway products, except minimally in Mexico. We compete against several national and regional highway products manufacturers.

We are a leading producer and distributor of lightweight and natural construction 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 construction aggregates customers are concrete producers; commercial, residential, and highway contractors; manufacturers of masonry products; and state and local governments. We compete with lightweight construction aggregates producers nationwide and natural construction aggregates producers located in the regions where we operate.

We also manufacture a line of trench shields and shoring products for the construction industry.

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 including chemicals and a variety of petroleum products. Our fiberglass reinforced lift covers are used primarily for grain barges. Our 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, 2016 was approximately $ 120.0 million .

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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.

Energy Equipment Group. Through wholly-owned subsidiaries, our Energy Equipment Group manufactures structural wind towers; utility steel structures for electricity transmission and distribution; storage and distribution containers; cryogenic tanks; and tank heads for pressure and non-pressure vessels.

We are 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, 2016 was approximately $1.1 billion .

We are one of the leading manufacturers in North America of steel utility structures for electricity transmission and distribution, 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.

We are a leading manufacturer in North America of storage and distribution containers. We manufacture these products in the U.S., Mexico, and Canada. We market a portion of our products in Mexico under the brand name of TATSA ^® . Our storage and distribution containers 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 and distribution containers for bulk storage, farm storage, and the application and distribution of anhydrous ammonia. We also manufacture cryogenic tanks and trailers for the distribution of industrial gases and liquefied natural gas. Our storage and distribution container products range from nine-gallon containers for motor fuel use to 1.8 million-gallon bulk storage spheres. We sell our storage and distribution containers to dealers and large industrial users. We generally deliver storage and distribution containers to our customers who install and fill the containers. Our competitors include large and small manufacturers of storage and distribution containers. Additionally, we manufacture and sell oil and gas process and storage equipment.

We also 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 and distribution containers. We also sell our tank heads to a broad range of other manufacturers. There are many competitors in the tank heads business.

There are a number of well-established entities that actively compete with us in the business of manufacturing energy equipment.

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 7.7%, 7.0%, and 5.8% of our consolidated revenues for the years ended December 31, 2016 , 2015 , and 2014 , respectively. As of December 31, 2016 and 2015 , we had 3.3% and 3.9%, respectively, of our long-lived assets located outside the U.S. We manufacture railcars, storage and distribution containers, tank heads, structural wind towers, steel 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.

Backlog. As of December 31, 2016 and 2015 , our backlog of firm orders was as follows:



	December 31, 2016		December 31, 2015
	(in millions)
Rail Group
External Customers	$	2,156.6	$	3,948.5
Leasing Group	850.9		1,452.7
	$	3,007.5	$	5,401.2
Inland Barge Group	$	120.0	$	416.0
Wind towers	$	1,148.4	$	371.3

For the twelve months ended December 31, 2016 , our rail manufacturing businesses received orders for 7,825 railcars. The change in backlog as of December 31, 2016 compared with our backlog as of December 31, 2015 reflects the value of orders taken, net of cancellations during 2016 totaling 250 railcars, executory contract change orders and price modifications, and orders delivered during the year. The orders in our backlog from the Leasing Group are fully supported by lease commitments with external customers. The final amount dedicated to the Leasing Group may vary by the time of delivery as customers may alternatively choose to purchase railcars as external sales from the Rail Group. Approximately 41% of our railcar backlog is expected to be delivered during the twelve months ending December 31, 2017 with the remainder to be delivered from 2018 through 2021. Substantially all of our Inland Barge backlog is expected to be delivered during the twelve months ending December 31, 2017.

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Approximately 30% of our structural wind towers backlog is expected to be delivered during the twelve months ending December 31, 2017 with the remainder to be delivered during 2018 and 2019. The Company does not report backlog from its utility structures business because certain contracts contain partial order cancellation provisions.

Marketing. We sell or lease 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, Sweden, and Peru. 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 2016, the supply of steel was sufficient to support our manufacturing requirements. Market steel prices continue to exhibit periods of volatility and ended 2016 higher than 2015. Steel prices may be volatile in the future in part as a result of market conditions. 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.

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

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



Business Group	December 31, 2016
Rail Group	9,090
Construction Products Group	1,370
Inland Barge Group	980
Energy Equipment Group	5,230
Railcar Leasing and Management Services Group	200
All Other	450
Corporate	360
	17,680

As of December 31, 2016 , approximately 8,350 employees were employed in the U.S. and 9,270 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, natural resources, 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. Our railcar and related manufacturing, maintenance services, and leasing businesses are regulated by multiple governmental regulatory agencies such as the U.S. Environmental Protection Agency ("USEPA"); Transport Canada ("TC"); the U.S. Department of Transportation ("USDOT") and the administrative agencies it oversees, including the Federal Railroad Administration ("FRA"), the Pipeline and Hazardous Materials Safety Administration ("PHMSA"), and the Research and Special Programs Administration; and industry authorities such as the Association of American Railroads ("AAR"). All such agencies and

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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. We believe that our product designs and operations are in compliance with these specifications, standards, and regulations applicable to our business.

Revised regulations pertaining to the transportation of flammable materials by rail are now in effect. These regulatory changes materially impact: the rail industry as a whole; railroad operations; older and newer tank railcars that met or exceeded prior regulatory requirements and standards; future tank railcar specifications; and market decisions relative to capital investment in rail products.

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 USDOT; and private industry organizations such as the American Bureau of Shipping. These organizations establish safety criteria, investigate vessel accidents, and recommend improved safety standards. We believe that our product specifications and operations are in compliance with the laws and regulations applicable to our business.

Highway Products. The primary regulatory and industry authorities involved in the regulation of highway products manufacturers are the USDOT, the Federal Highway Administration ("FHWA"), and various state highway departments and administrative agencies. These organizations, with participation from the American Association of State Highway and Transportation Officials ("AASHTO"), establish certain specifications, product testing criteria, and performance standards related to the manufacture of our highway products. We believe that our highway products are in compliance with the standards and specifications applicable to our business.

Storage and Distribution Containers. The primary regulatory authorities involved in the regulation of manufacturers of storage, transportation, and distribution containers are the PHMSA and the Federal Motor Carrier Safety Administration ("FMCSA"), both agencies being part of the USDOT. These agencies promulgate and interpret rules and regulations and issue approvals and special permits pertaining, in part, to the manufacture of containers that are used in the storage, transportation, and distribution of regulated and non-regulated substances. We believe that our storage and distribution containers are in compliance with the rules, regulations, and permits applicable to our business.

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.

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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 2017.



Name	Age	Office	Officer Since
Timothy R. Wallace*	63	Chairman, Chief Executive Officer, and President	1985
James E. Perry*	45	Senior Vice President and Chief Financial Officer	2005
Melendy E. Lovett*	58	Senior Vice President and Chief Administrative Officer	2014
William A. McWhirter II*	52	Senior Vice President and Group President	2005
D. Stephen Menzies*	61	Senior Vice President and Group President	2001
S. Theis Rice*	66	Senior Vice President and Chief Legal Officer	2002
Kathryn A. Collins	53	Vice President, Human Resources	2014
Virginia C. Gray, Ph.D.	57	Vice President, Organizational Development	2007
Mary E. Henderson*	58	Vice President and Chief Accounting Officer	2009
W. Relle Howard	47	Vice President, Information Technology	2016
John M. Lee	56	Vice President, Business Development	1994
Steven L. McDowell	55	Vice President and Chief Audit Executive	2013
Gail M. Peck	49	Vice President, Finance and Treasurer	2010
Stephen W. Smith	67	Vice President and Chief Technical Officer	2012
Bryan P. Stevenson	43	Vice President, Associate General Counsel and Secretary	2015
Sarah Teachout	44	Vice President and Deputy General Counsel	2016
Jack Todd	53	Vice President, Public Affairs	2015

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

The following officers, for the preceding five years, have either not been in full time employment with the Company or have had changes in responsibilities during that period:

Ms. Collins joined Trinity in 2014 as Vice President, Human Resources. Prior to joining Trinity, she worked for RealPage, Inc. from 2012 to 2014, most recently serving as Vice President, Talent Management and HR Systems. She served as Divisional Vice President, Organization Effectiveness and Vice President, Associate Recruitment at J.C. Penney Company, Inc. where she held management and executive positions from 2009 to 2012.

Mr. Howard joined the Company in 2016 as Vice President, Information Technology. Prior to joining Trinity, he worked for Flowserve Corporation from 2009 to 2016, serving as Vice President Information Technology, Operating Divisions and, beginning in 2014, as Global Vice President, Information Technology.

Ms. Lovett joined the Company in 2014 as Senior Vice President and Chief Administrative Officer. A member of the Company's Board of Directors since 2012, Ms. Lovett resigned her Board position at the time of her appointment as an officer of the Company. Prior to joining Trinity in 2014, she was the Senior Vice President and President of the Education Technology business, for Texas Instruments, a major semiconductor manufacturer.

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.

Ms. Peck joined Trinity in 2010 as Treasurer and was appointed Vice President and Treasurer in 2011 and Vice President, Finance and Treasurer in 2014. Prior to joining Trinity, she worked for Centex Corporation from 2001 to 2009, serving as Vice President and Treasurer beginning in 2004.

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.

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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 serving 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. Stevenson joined the Company in 2015 as Associate General Counsel and Secretary and was appointed Vice President, Associate General Counsel and Secretary in 2016. Prior to joining Trinity, Mr. Stevenson was Vice President, General Counsel and Secretary for U.S. Auto Parts Network, Inc. from 2011 to 2015, where he oversaw all of the company's legal efforts. Prior to his tenure at U.S. Auto Parts, he served as Vice President, Associate General Counsel for Blockbuster, Inc., which he joined as Senior Corporate Counsel in 2004. Before Mr. Stevenson joined Blockbuster, he worked at the law firm of Beirne, Maynard & Parsons, LLP.

Ms. Teachout joined the Company in 2015 as Deputy General Counsel and was elected Vice President and Deputy General Counsel in 2016. Prior to joining Trinity, Ms. Teachout was a partner at the law firm of Akin Gump Strauss Hauer & Feld LLP from 2012 to 2015. Before joining Akin Gump, Ms. Teachout had been a partner at the law firm of Haynes and Boone, LLP since 2007.

Mr. Todd joined Trinity in 2006, initially serving as Director of Public Affairs for the Construction, Energy, Marine, and Components Group. Since 2009, Mr. Todd has held several leadership positions at Trinity, culminating in his election in 2015 as Vice President, Public Affairs. Prior to joining Trinity, Mr. Todd had a distinguished 20-year career in the U.S. Navy retiring as a Lieutenant Commander.

Messrs. Wallace, Perry, Menzies, and Lee, Ms. Henderson, 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.

Our business is subject to a number of risks which are discussed below. 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. You should consider carefully these risks and uncertainties in addition to the other information contained in this report and our other filings with the SEC including our subsequent reports on Forms 10-Q and 8-K, and any amendments thereto before deciding to buy, sell, or hold our securities. If any of the following known risks or uncertainties actually occurs with material adverse effects on us, our business, financial condition, results of operations, and/or liquidity could be harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment.

The cautionary statements below discuss important factors that could cause our business, financial condition, operating results, and cash flows to be materially adversely affected. 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.

Many of the industries in which we operate are cyclical, and, accordingly, our business is subject to changes in the economy. We operate in cyclical industries. Downturns in economic conditions usually have a significant adverse effect on cyclical industries due to decreased demand for new and replacement products. Decreased demand could result in lower sales volumes, lower prices, and/or a decline in or 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. While the business cycles of our different operations may not typically coincide, an economic downturn could affect disparate cycles contemporaneously. The impacts of such an economic downturn may magnify the adverse effect on our business.

Volatility in the global markets may adversely affect our business and operating results. Instability in the global economy, negative conditions in the global credit markets, volatility in the industries that our products serve, fluctuations in commodity prices that our customers produce and transport, 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 unilaterally cancel or terminate firm contracts or orders in whole or in part resulting in contract breaches or purchase order breaches, and increased commercial litigation costs. Such occurrences could adversely affect our cash flows and results of operations.

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,

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increased price competition, or increased operating costs, which could adversely affect our business, results of operations, and financial condition.

Litigated disputes and other 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 judgments and outcomes in some or all of these matters could result in significant losses and costs that could 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 final judgments after taking into consideration rights in indemnity and recourse to third parties as a result of which there could be a material adverse effect on our business, operations, or financial condition. See Note 18 of the Consolidated Financial Statements for a summary of the Company's Highway Products litigation.

Changes 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 may exhibit 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, a change in steel prices could materially lower our 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 that 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, substances, and materials; and (iii) other activities relating to the protection of human health and the environment. Such laws and regulations expose us to liability for our own acts and in certain instances potentially expose us to liability for the acts of others. These laws and regulations also may impose liability on us currently under circumstances where at the time of the action taken, our acts or those of others complied with then applicable laws and regulations. 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, barge, or container raises potential risks in the event of an accident that results in the release of an environmentally sensitive substance. Generally, liability under existing laws 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 railcar, barge, or container, or its components. Additionally, the severity of injury or property damage arising from an incident may influence the causation responsibility analysis, exposing the Company to potentially greater liability. 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 respect to product performance and technological innovation, quality, reliability of delivery, customer service, and other factors. The effects of this competition, which is often intense, 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 for certain of our products, the variable purchase patterns of our customers in all of 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, potentially resulting in significant fluctuations in our quarterly results. Some of the markets we serve have a limited number of customers. The volumes purchased by customers in each of our business segments vary from year to year, and not all customers make purchases every year. As a result, the order levels for our products 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 also vary. As a result of these quarterly fluctuations, we believe

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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.

Our access to capital may be limited or unavailable due to deterioration of conditions in the global capital markets, weakening of macroeconomic conditions, and negative changes in our credit ratings. In general, the Company, and more specifically its leasing subsidiaries' operations, relies 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 extended periods 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 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 Financial Services LLC, Moody's Investors Service, Inc., and Fitch Ratings, Inc. 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.

We may be unable to maintain railcar assets on lease at satisfactory lease rates. The profitability of our railcar leasing business depends on our ability to lease railcars at satisfactory lease rates, to re-lease railcars at satisfactory lease rates upon the expiration and non-renewal of existing leases, and to sell railcars in the secondary market as part of our ordinary course of business. Our ability to lease, re-lease, maintain satisfactory lease rates, or sell leased or unleased railcars profitably is dependent upon several factors, including, among others:

• the cost of and demand for leases or ownership of newer or specific-use railcar types;

• the general availability in the market of competing used or new railcars;

• the degree of obsolescence of leased or unleased railcars, including railcars subject to regulatory obsolescence;

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

• the market demand or governmental mandate 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 or unleased railcars on favorable terms could result in lower lease rates, lower lease utilization percentages, and reduced revenues and operating profit.

Fluctuations in the price and supply of raw materials and parts and components 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 raw materials and parts and 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 structural wind towers business. Our manufacturing operations partially depend on our ability to obtain timely deliveries of raw materials, parts, and components in acceptable quantities and quality from our suppliers. Certain raw materials and parts and components for 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 raw materials and 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, potentially increasing our rejections for poor quality and requiring 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. Extreme weather conditions and natural occurrences such as hurricanes, tornadoes, and floods could result in varying states of disaster and 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 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 (including surface coatings, primers, sealants, and interior linings), parts, and components pursuant to express limited contractual warranties. We may be subject to significant warranty

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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 significant costs associated with product recalls or product repair or replacement, 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 potential liability for claims alleging property damage and personal and bodily injury or death arising from the use of or exposure to our products, especially in connection with products we manufacture that our customers install along US highways or that our customers use to transport hazardous, flammable, toxic, or explosive materials. As policies expire, increased premiums for renewed or new coverage may further increase our insurance expense and/or require that we increase our self-insured retention or deductibles. The Company maintains primary coverage and excess coverage policies. If the number of claims or the dollar amounts of any such claims rise in any policy year we could suffer additional costs associated with accessing our excess coverage policies. Also, an increase in the loss amounts attributable to such claims could expose us to uninsured damages if we were unable or elected not to insure against certain claims 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 available 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, or refuse coverage, or otherwise are unable to provide us with adequate insurance coverage, then our 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.

Many of our products are sold to leasing companies, contractors, distributors, and installers who may misuse, abuse, improperly install or improperly or inadequately maintain or repair such products thereby potentially exposing the Company to claims that could increase our costs and weaken our financial condition. The products we manufacture are designed to work optimally when properly assembled, operated, installed, repaired, and maintained. When this does not occur, the Company may be subjected to claims or litigation associated with personal or bodily injuries or death and property damage.

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, 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 is continuing. 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 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 products sold or used in those countries. If we fail to comply with the applicable regulations within the foreign countries where we operate, we may be unable to market and sell our products in those countries. In addition, with respect to operations in foreign countries, 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; price exchange controls; and restrictions or regulations affecting cross-border rail and vehicular traffic 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, anti-bribery, or import/export laws of other countries.

U.S. government actions relative to the federal budget, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies could adversely affect our business and operating results. Periods of impasse, deadlock, and last minute accords may continue to permeate many aspects of U.S. governance, including federal government budgeting and spending, taxation, U.S. deficit spending and debt ceiling adjustments, and international commerce. Such periods could negatively impact U.S. domestic and global financial markets thereby reducing customer demand for our products and services and potentially result in reductions in our revenues, increased price competition, or increased operating costs, any of which could adversely affect our business, results of operations, and financial condition. During the recent Presidential election campaign many statements were made about U.S. participation in multi-lateral versus bi-lateral international trade agreements and treaties such as the North America Free Trade Agreement (“NAFTA”). It is presently unclear what the U.S. government's intentions are pertaining to such agreements and treaties. We produce many of our products at our manufacturing facilities in Mexico. If a preference for bi-lateral trade agreements emerges, wholesale renegotiation of or a U.S. withdrawal from NAFTA could result in significant change or interruption to commercial transactions between the U.S. and Mexico that could adversely affect our business, financial condition, and results of operations.

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Equipment failures or extensive damage to our facilities, including as might occur as a result of natural disasters, could lead to production, delivery, 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 that serve our facilities, could reduce or prevent our production, delivery, 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 emergency response and 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 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 USEPA; TC; the USDOT and the administrative agencies it oversees, including the FRA, the PHMSA, and the Research and Special Programs Administration; and industry authorities such as the AAR. 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.

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.

Our Construction Products Group is subject to regulation by the USDOT; the FHWA; and various state highway departments and administrative agencies. These organizations, with participation from AASHTO, establish certain standards, specifications, and product testing criteria related to the manufacture of our highway products.

Our storage and distribution containers are subject to regulation by the PHMSA and the FMCSA, both of which are part of the USDOT. These agencies promulgate and enforce rules and regulations pertaining, in part, to the manufacture of containers that are used in the storage, transportation, and distribution of regulated and non-regulated substances.

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. 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.

Future regulatory changes or the determination that our products or processes are not in compliance with applicable requirements, rules, regulations, specifications, standards, or product testing criteria might result in additional operating expenses, administrative fines or penalties, product recalls or loss of business that could have a material adverse effect on our financial condition and operations.

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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-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. Some scientific studies have suggested that emissions of certain gases, commonly referred to as greenhouse gases (“GHGs”) which include carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere and other climate changes. Additionally, we periodically review the potential challenges and opportunities for the Company that climate change policy and legislation may pose. 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.

In response to an emerging scientific and political consensus, legislation and new rules to regulate emission of GHGs has been introduced in numerous state legislatures, the U.S. Congress, and by the EPA. Some of these proposals would require industries to meet stringent new standards that may require substantial reductions in carbon emissions. While Trinity cannot assess the direct impact of these or other potential regulations, it does recognize that new climate change protocols could affect demand for its products and/or affect the price of materials, input factors, and manufactured components. Potential opportunities could include greater demand for structural wind towers and certain types of railcars, while potential challenges could include decreased demand for certain types of railcars or other products and higher energy costs. Other adverse consequences of climate change could include an increased frequency of severe weather events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring company assets, or other unforeseen disruptions of the Company’s operations, systems, property, or equipment. Ultimately, 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, the Public Company Accounting Oversight Board, 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

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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.

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 trade secret or other 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 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, compromised data security, or cybersecurity threat 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, trade secret, or other proprietary or intellectual property that could adversely impact our future results.

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 result in unexpected claims or otherwise have a material adverse effect on our business, operations, or financial condition.

The use of social and other digital media (including websites, blogs and newsletters) to disseminate false, misleading and/or unreliable or inaccurate data and information about our Company could create unwarranted volatility in our stock price and losses to our stockholders and could adversely affect our reputation, products, business and operating results. The number of people relying on social and other digital media to receive news, data and information is increasing. Social and other digital media can be used by anyone to publish data and information without regard for factual accuracy. The use of social and other digital media to publish inaccurate, offensive and disparaging data and information coupled with the increasingly frequent use of strong language and hostile expression, may influence the public’s inability to distinguish between what is true and what is false and could obstruct an effective and timely response to correct inaccuracies or falsifications. Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning the Company in general or our products, our leadership or our reputation among customers and the public at large, thereby making it more difficult for us to compete effectively, and potentially having a material adverse effect on our business, operations, or financial condition.

Our inability to sufficiently protect our intellectual property rights could adversely affect our business. Our patents, copyrights, trademarks, service marks, trade secrets, proprietary processes, and other intellectual property are important to our success. We rely on patent, copyright and trademark law, and trade secret protection, and confidentiality and/or license agreements with others to protect our intellectual property rights. Our trademarks, service marks, copyrights, patents, and trade secrets may be exposed

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to market confusion, commercial abuse, infringement, or misappropriation and possibly challenged, invalidated, circumvented, narrowed, or declared unenforceable by countries where our products and services are made available, but where the laws may not protect our intellectual property rights as fully as in the U.S. Such instances could negatively impact our competitive position and adversely affect our business. Additionally, we could be required to incur significant expenses to protect our intellectual property rights.

The price for our common stock is subject to volatility which may result in losses to our shareholders. During the two year period ended December 31, 2016, the closing sales price of our stock varied between a high of $36.80 per share and a low of $15.64 per share. Stock price volatility affects the price at which our common stock can be sold and could subject our stockholders to losses. The trading price of our common stock is likely to remain volatile and could fluctuate widely in response to, among other things, the risk factors described in this report and other factors including:


•	actual or anticipated variations in quarterly and annual results or operations;


•	changes in recommendations by securities analysts;


•	changes in composition and perception of the investors who own our stock and other securities;


•	changes in ratings from national rating agencies on publicly or privately owned debt securities;


•	operating and stock price performance of other companies that investors deem comparable to us;


•	news reports relating to trends, concerns and other issues in the industries in which we operate;


•	actual or expected economic conditions that are perceived to affect our Company;


•	perceptions in the marketplace regarding us and/or our competitors;


•	fluctuations in prices of commodities that our customers produce and transport;


•	significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors;


•	changes in government regulations and interpretations of those regulations;


•	shareholder activism; and


•	dissemination of false or misleading statements through the use of social and other media to discredit our Company, disparage our products or to harm our reputation.

Additionally, in the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation has often been initiated. Any such litigation could result in substantial costs and a diversion of management’s attention and resources. We cannot predict the outcome of any such litigation if it were initiated. The initiation of any such litigation or an unfavorable result could have a material adverse effect on our financial condition and results of operations. See Note 18 of the Consolidated Financial Statements for a description regarding certain shareholder class actions related to the Company's Highway Products litigation.

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 and Canada. 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	Canada
Rail Group	6,139,300	131,600	4,147,200	2,123,700	—
Construction Products Group	1,214,200	95,400	1,278,500	31,100	—
Inland Barge Group	853,800	81,000	934,800	—	—
Energy Equipment Group	2,221,200	542,900	1,828,300	865,400	70,400
Corporate Offices	231,200	10,400	221,400	20,200	—
	10,659,700	861,300	8,410,200	3,040,400	70,400

Our estimated weighted average production capacity utilization for the twelve month period ended December 31, 2016 is reflected by the following percentages:



	Production Capacity Utilized
Rail Group	75	%
Construction Products Group	75	%
Inland Barge Group	70	%
Energy Equipment Group	80	%

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.

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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, 2016 and 2015 .



	Prices
Year Ended December 31, 2016	High		Low
Quarter ended March 31, 2016	$	24.32	$	15.64
Quarter ended June 30, 2016	19.93		16.73
Quarter ended September 30, 2016	25.05		18.71
Quarter ended December 31, 2016	29.24		21.01



Year Ended December 31, 2015	High		Low
Quarter ended March 31, 2015	$	35.61	$	24.77
Quarter ended June 30, 2015	36.80		26.43
Quarter ended September 30, 2015	29.79		22.67
Quarter ended December 31, 2015	27.86		22.37

Our transfer agent and registrar as of December 31, 2016 was American Stock Transfer & Trust Company.

Holders

At December 31, 2016 , we had 1,921 record holders of common stock. The par value of the common stock is $0.01 per share.

Dividends

Trinity has paid 211 consecutive quarterly dividends. Quarterly dividends declared by Trinity for the years ended December 31, 2016 and 2015 are as follows:



	Year Ended December 31,
	2016		2015
Quarter ended March 31,	$	0.11	$	0.10
Quarter ended June 30,	0.11		0.11
Quarter ended September 30,	0.11		0.11
Quarter ended December 31,	0.11		0.11
Total	$	0.44	$	0.43

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, 2016 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, 2011.



	2011	2012	2013	2014	2015	2016
Trinity Industries, Inc.	100	121	187	194	169	199
Dow Jones US Commercial Vehicles & Trucks Index	100	112	133	138	105	151
New York Stock Exchange Composite Index	100	116	147	157	151	169

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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, 2016 :



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, 2016 through October 31, 2016	1,020	$	24.12	—	$	215,375,299
November 1, 2016 through November 30, 2016	770	$	26.14	—	$	215,375,299
December 1, 2016 through December 31, 2016	202	$	28.43	—	$	215,375,299
Total	1,992	$	25.34	—	$	215,375,299

⁽¹⁾ These columns include the following transactions during the three months ended December 31, 2016: (i) the surrender to the Company of 1,327 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and (ii) the purchase of 665 shares of common stock by the Trustee for assets held in a non-qualified employee profit-sharing plan trust.

⁽²⁾ In December 2015, the Company's Board of Directors renewed its $250 million share repurchase program effective January 1, 2016 through December 31, 2017. Under the program, no shares were repurchased during the three months ended December 31, 2016 . 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, 2016 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,
	2016			2015			2014			2013			2012
	(in millions, except percent and per share data)
Statement of Operations Data:
Revenues	$	4,588.3		$	6,392.7		$	6,170.0		$	4,365.3		$	3,811.9
Operating profit	742.2			1,438.9			1,251.0			772.9			574.8
Income from continuing operations	364.7			826.0			709.3			386.1			251.9
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), and $1.1	—			—			—			(0.8		)	1.8
Net income	$	364.7		$	826.0		$	709.3		$	392.4		$	253.7
Net income attributable to Trinity Industries, Inc.	$	343.6		$	796.5		$	678.2		$	375.5		$	255.2
Net income attributable to Trinity Industries, Inc. per common share:
Basic:
Continuing operations	$	2.25		$	5.14		$	4.35		$	2.34		$	1.59
Discontinued operations	—			—			—			0.04			0.01
	$	2.25		$	5.14		$	4.35		$	2.38		$	1.60
Diluted:
Continuing operations	$	2.25		$	5.08		$	4.19		$	2.34		$	1.58
Discontinued operations	—			—			—			0.04			0.01
	$	2.25		$	5.08		$	4.19		$	2.38		$	1.59
Weighted average number of shares outstanding:
Basic	148.4			150.2			151.0			152.8			154.7
Diluted	148.6			152.2			156.7			152.9			155.1
Dividends declared per common share	$	0.440		$	0.430		$	0.375		$	0.270		$	0.210

Balance Sheet Data:
Total assets	$	9,125.3		$	8,885.9		$	8,695.3		$	7,274.5		$	6,630.2
Debt - recourse	$	850.6		$	836.7		$	823.6		$	416.5		$	454.4
Debt - non-recourse	$	2,206.0		$	2,358.7		$	2,690.9		$	2,534.4		$	2,561.3
Stockholders' equity	$	4,311.1		$	4,048.7		$	3,397.4		$	2,749.1		$	2,137.6
Ratio of total debt to total capital	41.5		%	44.1		%	50.8		%	51.8		%	58.5		%
Book value per share	$	28.34		$	26.50		$	21.83		$	17.75		$	13.52

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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 complementary market-leading businesses providing products and services to the energy, chemical, agriculture, transportation, and construction sectors, among others. 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, Inland Barge, and Leasing Groups and our structural wind towers, utility structures, and storage and distribution containers businesses operate in cyclical industries. Additionally, results in our Construction Products Group are affected by seasonal fluctuations with the second and third quarters historically being the quarters with the highest revenues. Due to their transactional nature, railcar sales from the lease fleet are the primary driver of fluctuations in results in the Railcar Leasing and Management Services Group.

We continue to experience weak demand levels for many of the Company’s products and services. The ongoing level of uncertainty in the industrial economy has continued to impact our customers’ long-term capital planning processes. The oversupply of railcars and barges in the North American market has limited new order levels for these businesses. We continue to assess demand for our products and services and take steps to align our manufacturing capacity appropriately.

Executive Summary

The Company’s revenues for 2016 were $ 4.6 billion , representing a decrease of $1.8 billion or 28.2% over last year. Operating profit for 2016 totaled $0.7 billion compared to $1.4 billion last year. The decrease in both revenues and operating profit for 2016 , when compared to the previous year, resulted primarily from lower volumes in our Rail and Inland Barge Groups as well as lower leased railcar sales in the Leasing Group. Revenues and operating profit generated by our Energy Equipment Group decreased as a result of lower delivery volumes in our utility structures business and other product lines partially offset by an increase in revenues from our structural wind towers business. In our Leasing Group, leasing and management revenues were substantially unchanged while revenues from railcar sales owned one year or less totaled $126.1 million for the year ended December 31, 2016 compared with $404.9 million for the year ended December 31, 2015. Revenues in our Construction Products Group declined by 1.8% as a result of lower volumes in the Group's other business lines including lost revenues resulting from the sale of our galvanizing business in June 2015 partially offset by higher volumes in our construction aggregates business. Operating profit in the Construction Products Group increased as a result of higher volumes in our construction aggregates business and reduced operating costs in 2016.

Selling, engineering, and administrative expenses decreased by 14.5% for the year ended December 31, 2016 , when compared to the prior year primarily due to lower compensation expenses. At December 31, 2016 , the Company's headcount, including both production and non-production personnel, had decreased approximately 20% since the end of 2015 primarily due to actions taken to realign our costs with current market conditions.

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As of December 31, 2016 and 2015 our backlog of firm orders was as follows:



	December 31, 2016		December 31, 2015
	(in millions)
Rail Group
External Customers	$	2,156.6	$	3,948.5
Leasing Group	850.9		1,452.7
	$	3,007.5	$	5,401.2
Inland Barge Group	$	120.0	$	416.0
Wind towers	$	1,148.4	$	371.3

Capital expenditures for 2016 were $933.4 million with $799.1 million utilized for net lease fleet additions, net of deferred profit of $178.2 million . Manufacturing and corporate capital expenditures for 2017 are projected to be between $100.0 million and $140.0 million . For 2017 , we expect to invest between $140.0 million and $240.0 million in our wholly-owned lease fleet, after taking into account the proceeds from sales of leased railcars.

During the year ended December 31, 2016 , 2015 , and 2014 the Company received proceeds from the sale of leased railcars as follows:



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Leasing Group:
Railcars owned one year or less at the time of sale	$	126.1	$	404.9	$	486.3
Railcars owned more than one year at the time of sale	37.7		514.6		265.8
Rail Group	8.1		260.5		243.2
	$	171.9	$	1,180.0	$	995.3

In December 2015 , the Company’s Board of Directors renewed its $250 million share repurchase program effective January 1, 2016 through December 31, 2017 . The new program replaced the previous program which expired on December 31, 2015 . Under the Company's share repurchase program, 2,070,600 shares were repurchased during the year ended December 31, 2016 , at a cost of approximately $34.7 million .

A current summary of the Company's Highway Products litigation is provided in Note 18 of the Consolidated Financial Statements.

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Results of Operations

Years Ended December 31, 2016 , 2015 , and 2014

Overall Summary

Revenues



	Year Ended December 31, 2016
	Revenues								Percent Change 2016 versus 2015
	External		Intersegment			Total			Percent Change 2016 versus 2015
	($ in millions)
Rail Group	$	2,006.9	$	1,070.4		$	3,077.3		(31.0	)	%
Construction Products Group	510.6		12.6			523.2			(1.8	)
Inland Barge Group	403.0		0.1			403.1			(38.3	)
Energy Equipment Group	834.7		178.0			1,012.7			(9.1	)
Railcar Leasing and Management Services Group	824.9		2.1			827.0			(25.1	)
All Other	8.2		84.0			92.2			(17.9	)
Segment Totals before Eliminations	4,588.3		1,347.2			5,935.5			(25.6	)
Eliminations – Lease subsidiary	—		(1,021.9		)	(1,021.9		)
Eliminations – Other	—		(325.3		)	(325.3		)
Consolidated Total	$	4,588.3	$	—		$	4,588.3		(28.2	)

	Year Ended December 31, 2015
	Revenues								Percent Change 2015 versus 2014
	External		Intersegment			Total			Percent Change 2015 versus 2014
	($ in millions)
Rail Group	$	3,236.2	$	1,225.6		$	4,461.8		16.9		%
Construction Products Group	520.6		12.0			532.6			(3.5	)
Inland Barge Group	652.9		—			652.9			2.3
Energy Equipment Group	883.6		230.1			1,113.7			12.2
Railcar Leasing and Management Services Group	1,091.6		13.2			1,104.8			(1.2	)
All Other	7.8		104.5			112.3			1.7
Segment Totals before Eliminations	6,392.7		1,585.4			7,978.1			10.4
Eliminations – Lease subsidiary	—		(1,164.4		)	(1,164.4		)
Eliminations – Other	—		(421.0		)	(421.0		)
Consolidated Total	$	6,392.7	$	—		$	6,392.7		3.6

	Year Ended December 31, 2014
	Revenues
	External		Intersegment			Total
	($ in millions)
Rail Group	$	3,077.6	$	739.2		$	3,816.8
Construction Products Group	546.1		5.6			551.7
Inland Barge Group	638.5		—			638.5
Energy Equipment Group	796.0		196.3			992.3
Railcar Leasing and Management Services Group	1,106.4		11.9			1,118.3
All Other	5.4		105.0			110.4
Segment Totals before Eliminations	6,170.0		1,058.0			7,228.0
Eliminations – Lease subsidiary	—		(710.1		)	(710.1		)
Eliminations – Other	—		(347.9		)	(347.9		)
Consolidated Total	$	6,170.0	$	—		$	6,170.0

Our revenues for the year ended December 31, 2016 , decreased by 28.2% from the previous year primarily as a result of reduced volumes and product mix changes in our Rail Group. We also experienced lower barge shipments and product mix changes in our Inland Barge Group. Revenues from sales of leased railcars in our Leasing Group were lower in 2016 when compared to the prior year. In our Energy Equipment Group, lower volumes in our utility structures business and other product lines were partially offset by higher volumes in our structural wind towers business. Revenues from our Construction Products Group decreased primarily due to lower volumes in the Group's other businesses including lost revenues from the sale of the Group's galvanizing business in 2015.

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Our revenues for the year ended December 31, 2015 , increased by 3.6% from the previous year primarily as a result of higher shipment volumes and pricing in our Rail Group partially offset by product mix changes. We also experienced higher volumes in our Inland Barge Group, and in our Energy Equipment Group, primarily as a result of an acquisition in 2014. Revenues from the Construction Products Group declined as a result of lower revenues from our highway products business partially offset by higher acquisition-related volumes in our construction aggregates business. Our Leasing Group experienced lower revenues from external sales of railcars owned one year or less, partially offset by higher leasing and management revenues due to increased rental rates and net lease fleet additions.

Operating Costs

Operating costs are comprised of cost of revenues; selling, engineering, and administrative costs; and gains or losses on property disposals.



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Rail Group	$	2,617.4		$	3,530.2		$	3,092.7
Construction Products Group	450.6			478.1			486.3
Inland Barge Group	357.8			535.9			524.1
Energy Equipment Group	879.6			962.8			884.2
Railcar Leasing and Management Services Group	466.9			498.6			602.0
All Other	111.1			120.5			136.0
Segment Totals before Eliminations and Corporate Expenses	4,883.4			6,126.1			5,725.3
Corporate	131.0			152.6			119.0
Eliminations – Lease subsidiary	(843.7		)	(904.8		)	(577.0		)
Eliminations – Other	(324.6		)	(420.1		)	(348.3		)
Consolidated Total	$	3,846.1		$	4,953.8		$	4,919.0

Operating costs for the year ended December 31, 2016 decreased by 22.4% over the previous year primarily due to lower shipment levels in our Rail and Inland Barge Groups. Operating costs in our Energy Equipment Group decreased over the prior year primarily due to lower volumes in our utility structures and other businesses. Our Construction Products Group experienced lower operating costs over the prior year primarily as a result of improved manufacturing efficiencies in our highway products business and lower volumes in the Group's other businesses including the effects of the 2015 sale of assets of the galvanizing business. Operating costs in our Leasing Group decreased primarily as a result of lower profit from railcar sales partially offset by higher maintenance and compliance costs. Selling, engineering, and administrative expenses decreased for the year ended December 31, 2016 , by 14.5% primarily due to lower compensation expenses. As a percentage of revenue, selling, engineering, and administrative expenses were 8.9% for 2016 as compared to 7.5% for 2015 and 6.5% for 2014 .

Operating costs for the year ended December 31, 2015 increased by 1.0% over the previous year primarily due to higher shipment levels in our Rail Group as well as acquisition-related increases in our Energy Equipment Group. Operating costs in our Leasing Group declined as a result of lower sales of railcars owned one year or less during the year ended December 31, 2015 over the prior year in addition to higher gains from railcar sales owned more than one year in 2015 over the prior year. Selling, engineering, and administrative expenses increased in 2015 primarily due to higher legal and litigation-related expenses as well as increased compensation costs resulting from acquisitions and higher average headcount during the year.

Operating Profit (Loss)



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Rail Group	$	459.9		$	931.6		$	724.1
Construction Products Group	72.6			54.5			65.4
Inland Barge Group	45.3			117.0			114.4
Energy Equipment Group	133.1			150.9			108.1
Railcar Leasing and Management Services Group	360.1			606.2			516.3
All Other	(18.9		)	(8.2		)	(25.6		)
Segment Totals before Eliminations and Corporate Expenses	1,052.1			1,852.0			1,502.7
Corporate	(131.0		)	(152.6		)	(119.0		)
Eliminations – Lease subsidiary	(178.2		)	(259.6		)	(133.1		)
Eliminations – Other	(0.7		)	(0.9		)	0.4
Consolidated Total	$	742.2		$	1,438.9		$	1,251.0

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Our operating profit for the year ended December 31, 2016 decreased by 48.4% primarily as a result of lower shipment volumes in our Rail and Inland Barge Groups. Operating profit was affected by additional costs associated with aligning our production footprint with demand in several of our business groups. Operating profit in the Construction Products Group increased when compared to the prior year primarily due to lower selling, engineering and administrative costs, higher volumes in our construction aggregates business and improved manufacturing efficiencies in our highway products business. These factors were partially offset by lower volumes in the Group's other businesses and property disposition gains in 2015 related to the sale of assets of our galvanizing business in 2015 . Operating profit in our Energy Equipment Group decreased when compared to the prior year as lower volumes from our utility structures and other businesses were partially offset by higher volumes in our structural wind towers business. Operating profit in our Leasing Group decreased for the year ended December 31, 2016 over the prior year primarily as a result of lower railcar sales and higher maintenance and compliance costs. Operating profit from railcar sales in our Leasing Group totaled $47.6 million and $275.1 million for the years ended December 31, 2016 and 2015 , respectively.

Our operating profit for the year ended December 31, 2015 increased by 15.0% primarily as a result of higher shipment volumes in our Rail Group and acquisition-related improvements in our Energy Equipment Group. Rail Group operating profit also increased as a result of improved pricing and higher operating efficiencies partially offset by product mix changes. Operating profit in our Leasing Group increased for the year ended December 31, 2015 over the prior year period from higher leasing and management revenues as well as higher operating profit from railcar sales. Operating profit in our Inland Barge Group was substantially unchanged while operating profit in the Construction Products Group decreased for the year ended December 31, 2015 when compared to the prior year, as higher volumes in our construction aggregates business related to an acquisition in 2015 were more than offset by lower volumes in our highway products business.

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

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



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Interest income	$	(5.4	)	$	(2.2	)	$	(1.9	)
Interest expense	181.9			194.7			193.4
Other, net	(1.1		)	(5.6		)	(4.6		)
Consolidated Total	$	175.4		$	186.9		$	186.9

Interest expense in 2016 decreased $12.8 million over the prior year primarily due to the repayment of certain Leasing Group debt in 2015. Interest expense in 2015 increased $1.3 million over the prior year primarily due to the issuance of the Company's Senior Notes in 2014, partially offset by the repayment of certain Leasing Group debt in 2015.

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 before income taxes:



	Year Ended December 31,
	2016		2015		2014
Statutory rate	35.0	%	35.0	%	35.0	%
State taxes	1.4		1.2		1.4
Domestic production activities deduction	—		(1.4	)	(2.0	)
Noncontrolling interest in partially-owned subsidiaries	(1.3	)	(0.8	)	(1.1	)
Changes in valuation allowances and reserves	0.3		—		0.1
Other, net	0.3		—		(0.1	)
Effective rate	35.7	%	34.0	%	33.3	%

Our effective tax rate reflects the Company's estimate for 2016 of its state income tax expense and the effect of not providing income attributable to the noncontrolling interests in partially-owned leasing subsidiaries for the income tax expense. See Note 5 of the Consolidated Financial Statements for a further explanation of activities with respect to our partially-owned leasing subsidiaries. See Note 13 of the Consolidated Financial Statements for a further discussion of income taxes.

Income (loss) before income taxes for the years ended December 31, 2016 , 2015 , and 2014 was $573.1 million , $1,241.1 million , and $1,051.4 million , respectively, for U.S. operations, and $(6.3) million , $10.9 million , and $12.6 million , respectively, for foreign operations, principally Mexico. The Company provides deferred income taxes on the unrepatriated earnings of its foreign operations where it results in a deferred tax liability.

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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 in 2028 and 2029 . We have established a valuation allowance for federal, state, and foreign tax operating losses and credits that we have estimated may not be realizable.

During the fourth quarter of 2016, the Internal Revenue Service ("IRS") formally closed its audit of the 2010-2011 tax years and sent the results of its 2006-2009 tax year examinations to the Joint Committee on Taxation ("JCT") for review as required. We now consider the 2010-2011 tax years effectively settled and, as of December 31, 2016, have adjusted the related reserves and deferred tax assets affected by the settlement with no significant effect on the Company’s consolidated financial statements. We expect the 2006-2009 tax year examinations to be effectively settled in 2017. The 2013-2015 tax years are currently under IRS audit examination. The statute of limitations expired on the 2012 tax year for the federal tax return.

Income tax payments, net of refunds, differ from the current provision primarily based on when estimated tax payments were due as compared to when the related income was earned and taxable. The Company's consolidated income tax position was a net receivable of $101.1 million and $85.0 million from federal, state, and foreign jurisdictions at December 31, 2016 and 2015 , respectively. Income tax payments (refunds) during the years ended December 31, 2016 , 2015 , and 2014 totaled $(57.9) million , $326.8 million , and $399.0 million , respectively.

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Segment Discussion

Rail Group



	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues:
Railcars	$	2,894.3		$	4,301.7		$	3,674.8		(32.7	)%	17.1	%
Components and maintenance services	183.0			160.1			142.0			14.3		12.7
Total revenues	3,077.3			4,461.8			3,816.8			(31.0	)	16.9

Operating costs:
Cost of revenues	2,555.0			3,449.4			3,027.2			(25.9	)	13.9
Selling, engineering, and administrative costs	63.6			80.8			65.5			(21.3	)	23.4
Property disposition gains	(1.2		)	—			—
Operating profit	$	459.9		$	931.6		$	724.1		(50.6	)	28.7
Operating profit margin	14.9		%	20.9		%	19.0		%

As of December 31, 2016 , 2015 , and 2014 our Rail Group backlog of railcars was as follows:



	Year Ended December 31,
	2016		2015		2014
	(in millions)
External Customers	$	2,156.6	$	3,948.5	$	5,204.3
Leasing Group	850.9		1,452.7		2,010.5
Total	$	3,007.5	$	5,401.2	$	7,214.8

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



	Year Ended December 31,
	2016		2015		2014
Beginning balance	48,885		61,035		39,895
Orders received	7,825		22,145		51,395
Shipments	(27,240	)	(34,295	)	(30,255	)
Ending balance ⁽¹⁾	29,220		48,885		61,035

⁽¹⁾ The ending backlog figures for the year ended December 31, 2016 reflect the removal of 250 railcars that have not been netted against orders.

Revenues decreased for the year ended December 31, 2016 by 31.0 % when compared to the prior year with approximately 63% of the decrease in Rail Group revenue resulting from a decrease in unit deliveries with the remainder primarily due to product mix changes. Cost of revenues decreased for the year ended December 31, 2016 by 25.9 % when compared with the prior year primarily due to a decrease in unit deliveries.

Revenues increased for the year ended December 31, 2015 by 16.9 % when compared to 2014 . Approximately 75% of the increase in Rail Group revenue results from an increase in unit deliveries with the remainder due to improved pricing partially offset by product mix changes. Cost of revenues increased for the year ended December 31, 2015 by 13.9 % when compared with the prior year primarily due to an increase in unit deliveries partially offset by greater operating efficiencies.

Unit decreases and lower prices decreased total backlog dollars by 44.3% when comparing December 31, 2016 to the prior year. The average selling price in the backlog at December 31, 2016 was 6.8% lower as compared to the previous year primarily due to product mix changes. Backlog decreased when comparing 2015 versus 2014 due to unit decreases and lower prices. The average selling price in the backlog at December 31, 2015 was 6.5% lower as compared to the previous year primarily due to product mix changes. Approximately 41% of our railcar backlog is expected to be delivered during the twelve months ending December 31, 2017 with the remainder to be delivered from 2018 through 2021. 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 as customers may alternatively choose to purchase railcars as external sales from the Rail Group.

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For the year ended December 31, 2016 , Rail Group revenues included sales to the Leasing Group of $ 1,021.9 million with a deferred profit of $ 178.2 million , representing 9,385 railcars, compared to $ 1,164.4 million with a deferred profit of $ 259.6 million , representing 8,760 railcars, in the comparable period in 2015 . Results for the year ended December 31, 2014 , included sales to the Leasing Group of $ 710.1 million with a deferred profit of $ 133.1 million , representing 6,810 railcars. Sales to the Leasing Group and related profits are included in the operating results of the Rail Group but are eliminated in consolidation. For the years ended December 31, 2016 , 2015 , and 2014 , Rail Group revenues included sales of leased railcars to third parties of $8.1 million , $260.5 million , and $243.2 million , respectively.

The Leasing Group purchases a portion of our railcar production utilizing the Company's cash or alternatively, financing a portion of the purchase price through a non-recourse warehouse loan facility. Periodically, the Leasing Group refinances those borrowings through equipment financing transactions. In 2016 , the Leasing Group purchased 34.5% of our railcar production compared to 25.5% in 2015 and 22.5% in 2014.

Construction Products Group



	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues:
Highway products	$	271.3		$	277.9		$	317.6		(2.4	)%	(12.5	)%
Construction aggregates	213.4			192.0			152.1			11.1		26.2
Other	38.5			62.7			82.0			(38.6	)	(23.5	)
Total revenues	523.2			532.6			551.7			(1.8	)	(3.5	)

Operating costs:
Cost of revenues	378.6			407.4			430.9			(7.1	)	(5.5	)
Selling, engineering, and administrative costs	73.7			81.0			67.8			(9.0	)	19.5
Property disposition gains	(1.7		)	(10.3		)	(12.4		)
Operating profit	$	72.6		$	54.5		$	65.4		33.2		(16.7	)
Operating profit margin	13.9		%	10.2		%	11.9		%

Revenues and cost of revenues decreased by 1.8% and 7.1 %, respectively, for the year ended December 31, 2016 , when compared to the same period in 2015 . The decrease in revenues resulted primarily from lower volumes in our other businesses including lost revenues from the sale of our galvanizing business in June 2015, partially offset by higher volumes in our construction aggregates business. The decrease in cost of revenues of 7.1% resulted from lower volumes in our other businesses including lower volumes from the sale of the galvanizing business and lower costs in our highway products business from improved manufacturing efficiencies partially offset by higher volumes in our construction aggregates business. Selling, engineering, and administrative costs decreased by 9.0% , for the year ended December 31, 2016 compared to the same period in 2015 . The decrease for the year ended December 31, 2016 was primarily due to lower compensation costs, partially offset by higher legal expenses. The property disposition gains for the year ended December 31, 2015 primarily related to the sale of assets of our galvanizing business which included six facilities in Texas, Mississippi, and Louisiana.

Revenues decreased for the year ended December 31, 2015 by 3.5% compared to the same period in 2014 . Higher revenues in our construction aggregates business primarily related to an acquisition were more than offset by lower volumes in our highway products and other businesses including lost revenues from the sale of our galvanizing business in June 2015. Similarly, cost of revenues decreased by 5.5% for the year ended December 31, 2015 , compared to the same period in 2014 as the effects of our construction aggregates acquisition were more than offset by lower volumes in our highway products and other businesses. Additionally, cost of revenues for the year ended December 31, 2014 , included a $2.6 million gain from the settlement of certain liabilities related to construction aggregates acquisitions in 2013. Selling, engineering, and administrative costs increased by 19.5% for the year ended December 31, 2015 , compared to the same period in 2014 primarily due to higher legal expenses and compensation costs. The property disposition gains for the year ended December 31, 2014 primarily related to the sale of certain land held by our construction aggregates business.

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Inland Barge Group



	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues	$	403.1		$	652.9		$	638.5		(38.3	)%	2.3	%

Operating costs:
Cost of revenues	344.3			518.3			506.6			(33.6	)	2.3
Selling, engineering, and administrative costs	13.5			18.0			17.5			(25.0	)	2.9
Property disposition gains	—			(0.4		)	—
Operating profit	$	45.3		$	117.0		$	114.4		(61.3	)	2.3
Operating profit margin	11.2		%	17.9		%	17.9		%

Revenues decreased for the year ended December 31, 2016 by 38.3% compared to the same period in 2015 primarily due to lower barge deliveries and product mix changes. Cost of revenues decreased by 33.6% for the year ended December 31, 2016 , when compared to the same period in 2015 due to lower volumes and product mix changes. Selling, engineering, and administrative costs decreased for the year ended December 31, 2016 compared to the same period in 2015 due to lower compensation costs.

Revenues and cost of revenues increased for the year ended December 31, 2015 by 2.3% compared to the same period in 2014 primarily from higher delivery volumes of hopper barges, partially offset by lower delivery volumes of tank barges. Selling, engineering, and administrative costs increased for the year ended December 31, 2015 compared to the same period in 2014 due to higher compensation and consulting costs.

As of December 31, 2016 , the backlog for the Inland Barge Group was $ 120.0 million compared to $ 416.0 million as of December 31, 2015 . Substantially all our Inland Barge backlog is expected to be delivered during the twelve months ending December 31, 2017 . Deliveries for multi-year barge agreements are included in the backlog when specific production quantities for future years have been determined.

Energy Equipment Group



	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues:
Wind towers and utility structures	$	641.1		$	611.8		$	454.6		4.8	%	34.6	%
Other	371.6			501.9			537.7			(26.0	)	(6.7	)
Total revenues	1,012.7			1,113.7			992.3			(9.1	)	12.2

Operating costs:
Cost of revenues	806.9			879.8			810.5			(8.3	)	8.6
Selling, engineering, and administrative costs	72.7			83.0			74.8			(12.4	)	11.0
Property disposition gains	—			—			(1.1		)
Operating profit	$	133.1		$	150.9		$	108.1		(11.8	)	39.6
Operating profit margin	13.1		%	13.5		%	10.9		%

Revenues for the year ended December 31, 2016 decreased by 9.1% compared to the same period in 2015 . Revenues from our wind towers and utility structures product lines increased by 4.8% for the year ended December 31, 2016 primarily due to an increase in structural wind tower volumes. Revenues from other product lines for the year ended December 31, 2016 decreased by 26.0% when compared to 2015 primarily as a result of decreases in shipment volumes. Other revenues include results primarily from our storage and distribution containers and tank heads product lines. Similarly, cost of revenues decreased by 8.3% for the year ended December 31, 2016 compared to 2015 due to lower volumes in our utility structures and other product lines, partially offset by increased volumes in our structural wind towers business. Selling, engineering, and administrative costs decreased by 12.4% for the year ended December 31, 2016 , resulting primarily from lower professional service expenses and decreased compensation expenses.

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Revenues for the year ended December 31, 2015 increased by 12.2 % compared to the same period in 2014 . Revenues from our wind towers and utility structures product lines increased by 34.6% primarily due to an acquisition in 2014 . Revenues from other product lines for the year ended December 31, 2015 decreased by 6.7% when compared to 2014 primarily as a result of changes in shipment volumes. Cost of revenues increased by 8.6% for the year ended December 31, 2015 compared to 2014 while selling, engineering, and administrative costs increased by 11.0 %. Substantially all of the increase in operating costs for the year ended December 31, 2015 was due to an acquisition.

As of December 31, 2016 , the backlog for structural wind towers was $1,148.4 million compared to $371.3 million as of December 31, 2015 . Approximately 30% of our structural wind towers backlog is expected to be delivered during the twelve months ending December 31, 2017 with the remainder to be delivered during 2018 and 2019. The Company does not report backlog from its utility structures business because certain contracts contain partial order cancellation provisions.

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Railcar Leasing and Management Services Group



	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues:
Leasing and management	$	700.9		$	699.9		$	632.0		0.1	%	10.7	%
Sale of railcars owned one year or less at the time of sale	126.1			404.9			486.3
Total revenues	$	827.0		$	1,104.8		$	1,118.3		(25.1	)	(1.2	)

Operating profit:
Leasing and management	$	312.5		$	331.1		$	287.9		(5.6	)	15.0
Railcar sales:
Railcars owned one year or less at the time of sale	34.1			109.0			136.1
Railcars owned more than one year at the time of sale	13.5			166.1			92.3
Total operating profit	$	360.1		$	606.2		$	516.3		(40.6	)	17.4

Operating profit margin:
Leasing and management	44.6		%	47.3		%	45.6		%
Railcar sales	*			*			*
Total operating profit margin	43.5		%	54.9		%	46.2		%

Selected expense information ⁽¹⁾ :
Depreciation	$	156.2		$	142.3		$	130.0		9.8		9.5
Maintenance and compliance	$	104.3		$	97.3		$	78.9		7.2		23.3
Rent	$	39.3		$	41.6		$	52.9		(5.5	)	(21.4	)
Interest	$	125.2		$	138.8		$	153.3		(9.8	)	(9.5	)

* Not meaningful

⁽¹⁾ Depreciation, maintenance and compliance, 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.

Total revenues decreased by 25.1 % for the year ended December 31, 2016 compared to 2015 primarily due to a lower volume of railcar sales owned one year or less. Leasing and management revenues were substantially unchanged with revenues associated with net fleet additions offset by the effect of lower average rental rates.

Total revenues decreased by 1.2 % for the year ended December 31, 2015 compared to 2014 due to a lower volume of railcar sales owned one year or less, partially offset by growth in leasing and management revenues. Approximately half of the increase in leasing and management revenues was due to higher average rental rates with the remainder primarily due to net fleet additions.

During the year ended December 31, 2016 , 2015 , and 2014 the Leasing Group received proceeds from the sale of leased railcars as follows:



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Leasing Group:
Railcars owned one year or less at the time of sale	$	126.1	$	404.9	$	486.3
Railcars owned more than one year at the time of sale	37.7		514.6		265.8
Rail Group	8.1		260.5		243.2
	$	171.9	$	1,180.0	$	995.3

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Operating profit decreased by 40.6% for the year ended December 31, 2016 compared to 2015 primarily due to a lower volume of railcar sales. Leasing and management operating profit for the year ended December 31, 2016 decreased by 5.6% due to lower average rental rates and higher maintenance and compliance expense associated with routine regulatory testing partially offset by operating profit associated with net fleet additions. In February 2015, the Leasing Group purchased all of the railcars which previously had been leased to the Company from one of the independent owner trusts resulting in lower rent expense for the year ended December 31, 2016 when compared to 2015 . Interest expense decreased primarily due to the repayment in full of certain Leasing Group debt in May 2015. See Note 6 to the Consolidated Financial Statements for a description of lease arrangements with the independent owner trusts.

Operating profit increased by 17.4 % for the year ended December 31, 2015 compared to 2014 due to higher profit from railcar sales and higher leasing and management operating profit. Leasing and management profit for the year ended December 31, 2015 increased due to higher average rental rates, net fleet additions, and decreased rent expense partially offset by higher depreciation and maintenance expense.

The Leasing Group generally uses its non-recourse warehouse loan facility or cash to provide initial funding for a portion of the purchase price of the railcars. After initial funding, the Leasing Group may obtain 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; long-term recourse debt such as equipment trust certificates; or third-party equity. See Other Investing and Financing Activities .

Information regarding the Leasing Group’s lease fleet, owned through its wholly-owned and partially-owned subsidiaries, follows:



	December 31, 2016		December 31, 2015		December 31, 2014
Number of railcars:
Wholly-owned	60,440		52,030		51,115
Partially-owned	24,670		24,735		24,815
	85,110		76,765		75,930
Average age in years	8.2		8.1		7.8
Average remaining lease term in years	3.5		3.2		3.4
Fleet utilization	97.6	%	97.7	%	99.5	%

All Other



	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues	$	92.2		$	112.3		$	110.4		(17.9	)%	1.7	%

Operating costs:
Cost of revenues	103.1			114.0			125.2			(9.6	)	(8.9	)
Selling, engineering, and administrative costs	7.5			8.5			9.4			(11.8	)	(9.6	)
Property disposition (gains)/losses	0.5			(2.0		)	1.4
Operating loss	$	(18.9	)	$	(8.2	)	$	(25.6	)

Revenues decreased for the year ended December 31, 2016 compared to 2015 primarily due to a decrease in internal shipments from our transportation company. Cost of revenues decreased for the year ended December 31, 2016 compared to 2015 primarily as a result of lower costs from our transportation company partially offset by higher costs related to non-operating facilities.

Revenues were substantially unchanged for the year ended December 31, 2015 compared to 2014 . The decrease in operating loss for the year ended December 31, 2015 was due to improved efficiency from internal logistics operations, certain reserves recorded in 2014 , and gains from certain property dispositions.

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Corporate



	Year Ended December 31,						Percent Change
	2016		2015		2014		2016 versus 2015		2015 versus 2014
	($ in millions)
Operating costs	$	131.0	$	152.6	$	119.0	(14.2	)%	28.2	%

The decrease in operating costs for the year ended December 31, 2016 compared to 2015 is primarily due to lower compensation and legal and litigation-related expenses.

The increase in operating costs for the year ended December 31, 2015 compared to 2014 is primarily due to higher legal and litigation-related expenses as well as performance-related compensation costs and increased staffing compared to 2014 .

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,
	2016			2015			2014
	(in millions)
Total cash provided by (required by):
Operating activities	$	1,090.2		$	939.7		$	819.2
Investing activities	(1,022.7		)	(511.3		)	(814.7		)
Financing activities	(290.1		)	(530.3		)	454.9
Net increase (decrease) in cash and cash equivalents	$	(222.6	)	$	(101.9	)	$	459.4

2016 compared with 2015

Operating Activities . Net cash provided by operating activities for the year ended December 31, 2016 was $1,090.2 million compared to net cash provided by operating activities of $939.7 million for the year ended December 31, 2015 . Cash flow provided by operating activities increased primarily due to a higher decrease in inventories and a lower decrease in accrued liabilities for the year ended December 31, 2016 when compared to the prior year as well as a higher provision for deferred taxes and lower net gains on railcar lease fleet sales, partially offset by lower net income for the year ended December 31, 2016 .

Receivables at December 31, 2016 increased by $16.0 million or 3.4% from December 31, 2015 primarily due to a higher income tax receivable. Raw materials inventory at December 31, 2016 decreased by $ 176.1 million or 36.8% since December 31, 2015 primarily attributable to lower levels in our Rail Group from lower production volumes and improved inventory management. At December 31, 2016 , work in process inventory decreased by $33.3 million or 14.9% primarily in our Rail Group while finished goods inventory decreased by $67.9 million or 28.1% since December 31, 2015 due to higher inventory balances carried at the previous year end for scheduled shipments in early 2016 in our Rail and Energy Equipment Groups. Accounts payable decreased by $60.7 million as a result of lower inventory levels, while accrued liabilities decreased by $ 104.9 million from December 31, 2015 primarily due to lower compensation accruals. 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, 2016 was $1,022.7 million compared to $511.3 million for the year ended December 31, 2015 . Capital expenditures for the year ended December 31, 2016 were $ 933.4 million , which included $891.1 million for investment in the lease fleet less $92.0 million for the cost of sold lease fleet railcars owned one year or less. This compares to $ 1,029.8 million of capital expenditures for the same period last year, which included $1,129.7 million for additions to the lease fleet less $295.9 million for the cost of sold lease fleet railcars owned one year or less. Proceeds from the sale of property, plant, and equipment and other assets totaled $ 53.7 million for the year ended December 31, 2016 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 37.7 million . This compares to $ 522.8 million for the same period in 2015 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 514.6 million . Full-year manufacturing/corporate capital expenditures for 2017 are projected to range between $ 100.0 million and $ 140.0 million . For 2017 , we expect to invest between $140.0 million and $240.0 million in our wholly-owned lease fleet, after taking into account the proceeds from sales of leased railcars. Short-term marketable securities increased by $149.8 million for the year ended December 31, 2016 . There was no acquisition or divestiture activity for the year ended December 31, 2016 . Net cash required related to acquisitions amounted to $46.2 million for the year ended December 31, 2015 while proceeds from business divestitures totaled $51.3 million .

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Financing Activities. Net cash required by financing activities during the year ended December 31, 2016 was $290.1 million compared to $530.3 million of net cash required by financing activities for the same period in 2015 . During the year ended December 31, 2016 , we retired $ 162.5 million in debt as scheduled. During the year ended December 31, 2015 , we retired $ 587.2 million in debt including $340.0 million for the full repayment of promissory notes related to one of our wholly-owned leasing subsidiaries. We borrowed $ 242.4 million , net of debt issuance costs, during the year ended December 31, 2015 , from our TILC warehouse loan facility. Additionally, we repurchased shares of the Company’s stock under 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. Additionally, we may use our cash and committed credit facilities to retire or repurchase the Company's outstanding debt prior to its stated maturity or repurchase shares of its common stock.

2015 compared with 2014

Operating Activities. Net cash provided by operating activities for the year ended December 31, 2015 was $939.7 million compared to net cash provided by operating activities of $819.2 million for the same period in 2014 . Cash flow provided by operating activities increased primarily due to higher operating profits in 2015 .

Receivables at December 31, 2015 were substantially unchanged from December 31, 2014 , as a higher income tax receivable was offset by lower trade receivables in our Rail, Energy Equipment, and Construction Products Groups. Raw materials inventory at December 31, 2015 decreased by $ 106.8 million or 18.2% since December 31, 2014 primarily attributable to lower levels in our Rail Group from improved inventory management. Finished goods inventory at December 31, 2015 increased by $ 56.9 million or 30.8% since December 31, 2014 primarily due to higher inventory related to scheduled shipments in early 2016 in our Rail and Energy Equipment Groups. Accounts payable decreased by $78.6 million as a result of lower inventory levels, while accrued liabilities decreased by $ 169.6 million from December 31, 2014 due to lower customer advances outstanding.

Investing Activities. Net cash required by investing activities for the year ended December 31, 2015 was $511.3 million compared to $814.7 million for the year ended December 31, 2014 . Capital expenditures for the year ended December 31, 2015 were $ 1,029.8 million , which included $1,129.7 million for investment in the lease fleet less $295.9 million for the cost of sold lease fleet railcars owned one year or less. This compares to $464.6 million of capital expenditures for the same period in 2014 , of which $245.3 million were for additions to the lease fleet. Proceeds from the sale of property, plant, and equipment and other assets totaled $ 522.8 million for the year ended December 31, 2015 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 514.6 million . This compares to $ 288.8 million for the year ended December 31, 2014 , including railcar sales from the lease fleet owned more than one year at the time of sale totaling $ 265.8 million . Net cash required related to acquisitions amounted to $ 46.2 million and $ 714.4 million for the years ended December 31, 2015 and 2014 , respectively. Proceeds from business divestitures totaled $51.3 million for the year ended December 31, 2015 . Short-term marketable securities for the year ended December 31, 2015 decreased $9.9 million .

Financing Activities. Net cash required by financing activities during the year ended December 31, 2015 was $530.3 million compared to $454.9 million of net cash provided by financing activities for the same period in 2014 . During the year ended December 31, 2015 , we retired $ 587.2 million in debt including $340.0 million for the full repayment of promissory notes related to one of our wholly-owned leasing subsidiaries. We borrowed $ 242.4 million , net of debt issuance costs, during the year ended December 31, 2015 , from our TILC warehouse loan facility. During the year ended December 31, 2014 , we retired $186.6 million in debt as scheduled. We borrowed $727.3 million , net of debt issuance costs, during the year ended December 31, 2014, from the issuance of $400.0 million in senior notes and, the issuance by a wholly-owned subsidiary of TRIP Holdings of $335.7 million in secured equipment notes. Also, during the year ended December 31, 2014 , we received $49.6 million in equity contributions from noncontrolling interests in one of the Company's partially-owned leasing subsidiaries. Additionally, we repurchased shares of the Company’s stock under a share repurchase program as described further below.

Other Investing and Financing Activities

During the year ended December 31, 2016 , 2015 , and 2014 the Company received proceeds from the sale of leased railcars as follows:



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Leasing Group:
Railcars owned one year or less at the time of sale	$	126.1	$	404.9	$	486.3
Railcars owned more than one year at the time of sale	37.7		514.6		265.8
Rail Group	8.1		260.5		243.2
	$	171.9	$	1,180.0	$	995.3

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The $1.0 billion TILC warehouse loan facility, established to finance railcars owned by TILC, had $204.1 million in outstanding borrowings as of December 31, 2016 . Under the facility, $795.9 million was unused and available as of December 31, 2016 based on the amount of warehouse-eligible, unpledged equipment. The warehouse loan facility 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 trust. 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 2.64% at December 31, 2016 . Amounts outstanding at maturity, absent renewal, are payable under the renewed facility in April 2019 .

As of December 31, 2016 , we had letters of credit issued under our $600 million revolving credit facility in an aggregate principal amount of $92.3 million , leaving $507.7 million available for borrowing. Other than these letters of credit, there were no borrowings under our revolving credit facility as of December 31, 2016 , or for the two year period then ended. Borrowings under the credit facility bear interest at a defined index rate plus a margin and are guaranteed by certain 100%-owned subsidiaries of the Company.

Equity Investment

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

Future Operating Requirements

We expect to finance future operating requirements with cash, cash equivalents, and short-term marketable securities; cash flows from operations; and, depending on market conditions, short-term debt, 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. As of December 31, 2016 , the Company had unrestricted cash, cash equivalents, and short-term marketable securities balances of $ 798.1 million , and $507.7 million available under its revolving credit facility. Under the TILC warehouse facility, $795.9 million was unused and available as of December 31, 2016 based on the amount of warehouse-eligible, unpledged equipment. 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

As of December 31, 2016 , we had letters of credit issued under our revolving credit facility in an aggregate principal amount of $92.3 million , of which $92.2 million is expected to expire in 2017 and the remainder in 2018 . The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew each year. See Note 11 of the Notes to the Consolidated Financial Statements for information about our corporate revolving credit facility.

As described further in Note 18 of the Notes to the Consolidated Financial Statements, the Company posted a supersedeas bond in the amount of $686.0 million related to its Highway Products litigation. The Company obtained the supersedeas bond on an unsecured basis for a current annual premium of $3.7 million . Additionally, at December 31, 2016 the Company has outstanding surety bonds in the amount of $22.3 million issued to support our operations and, as required under the terms of certain customer agreements, to guarantee our performance.

See Note 6 of the Notes to the Consolidated Financial Statements for information about off balance sheet arrangements with regard to our Leasing Group.

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Derivative Instruments

We may 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 may 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 Financial Accounting Standards Board ("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 hedged 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, 2016 . 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, 2016
	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	%	$	—	$	(0.7	)	$	—
TRIP Holdings warehouse loan	$	788.5	3.60	%	$	—	$	5.9		$	8.0
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	38.7	2.62	%	$	0.9	$	0.4		$	0.5


⁽¹⁾	Weighted average fixed interest rate



	Effect on interest expense-increase/(decrease)
	Year Ended December 31,									Expected effect during next twelve months ⁽¹⁾
	2016			2015			2014			Expected effect during next twelve months ⁽¹⁾
	(in millions)
Expired hedges:
2006 secured railcar equipment notes	$	(0.4	)	$	(0.3	)	$	(0.3	)	$	(0.2	)
Promissory notes	$	—		$	1.2		$	2.9		$	—
TRIP Holdings warehouse loan	$	4.8		$	4.9		$	5.1		$	4.5
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	0.9		$	1.3		$	1.5		$	0.6
Promissory notes	$	—		$	5.3		$	15.4		$	—

⁽¹⁾ Based on the fair value of open hedges as of December 31, 2016

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.

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 were being accounted for as cash flow hedges with changes in

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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 was being amortized over the term of the related debt. These derivative instruments were fully amortized in May 2015. The effect on interest expense is due to amortization of the AOCL balance.

In 2008 , we entered into an interest rate swap derivative instrument to fix the variable Libor component of the Promissory Notes. This derivative instrument expired in May 2015 and was being accounted for as a cash flow hedge. The effect on interest expense is primarily from a result of 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 $4.5 million of additional interest expense expected to be recognized during the twelve months following December 31, 2016 . Also in July 2011 , TRIP Holdings’ wholly-owned subsidiary, TRIP Master Funding, entered into an interest rate swap derivative instrument, expiring in 2021 , with an initial 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

Natural gas and diesel fuel

We maintain a program to mitigate the impact of fluctuations in the price of natural gas and diesel fuel. 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, 2016 for these instruments was an asset of $0.3 million . The effect of these hedges was to decrease cost of revenues for the year ended December 31, 2016 by $0.4 million , and to increase cost of revenues for the years ended December 31, 2015 and 2014 by $1.1 million and $2.3 million , respectively.

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.

Employee Retirement Plans

As disclosed in Note 14 of the Notes to the Consolidated Financial Statements, the projected benefit obligations of the employee retirement plans exceeded the plans' assets by $17.1 million and $22.5 million as of December 31, 2016 and 2015 , respectively. The change was primarily due to a higher return on assets partially offset by a decrease in the obligation discount rate assumption. 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. Finally the Company contributes to a multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covers certain union-represented employees at one of our facilities.

Employer contributions for the year ending December 31, 2017 are expected to be $2.5 million for the defined benefit plans compared to $4.7 million contributed during 2016 . Employer contributions to the 401(k) plans and the Supplemental Profit Sharing Plan for the year ending December 31, 2017 are expected to be $15.2 million compared to $18.5 million contributed during 2016 . Employer contributions for the year ending December 31, 2017 are expected to be $2.3 million for the multiemployer plan compared to $2.3 million contributed during 2016 .

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Contractual Obligation and Commercial Commitments

As of December 31, 2016 , 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 ⁽¹⁾ :
Debt:
Parent and wholly-owned subsidiaries, excluding unamortized debt discount	$	1,700.8	$	64.0	$	284.4	$	113.3	$	1,239.1
Partially-owned subsidiaries	1,381.0		51.5		135.8		137.8		1,055.9
Capital lease obligations	32.1		3.6		28.5		—		—
Interest	705.9		144.3		238.8		181.8		141.0
	3,819.8		263.4		687.5		432.9		2,436.0

Operating leases:
Leasing Group	319.7		41.3		79.5		67.5		131.4
Other	27.0		10.0		10.9		2.4		3.7
Obligations for purchase of goods and services ⁽²⁾	584.8		540.0		33.0		11.8		—
Other	8.6		5.6		3.0		—		—
Total	$	4,759.9	$	860.3	$	813.9	$	514.6	$	2,571.1

⁽¹⁾ Includes interest on the Company's Convertible Subordinated Notes through June 1, 2018. See Note 11 of the Notes to the Consolidated Financial Statements.

⁽²⁾ Includes $471.1 million in purchase obligations for raw materials and components principally by the Rail, Inland Barge, and Energy Equipment Groups.

As of December 31, 2016 and 2015 , we had $37.1 million and $77.7 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 quantitative 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 three inputs, 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, 2016 , the Company concluded that no impairment charges were determined to be necessary and that none of the reporting units evaluated was at risk of failing the first step of the goodwill impairment test. A reporting unit is considered to be at risk if its estimated fair value does not exceed the carrying value of its net assets by 10% or more. 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 various express, limited product warranties that generally range 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 asserted by customers. Second, based on historical, accepted 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. See Note 10 of the Notes to the Consolidated Financial Statements.

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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 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. See Note 18 of the Notes to the Consolidated Financial Statements for further explanation.

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 recourse. However, estimates of future response costs are necessarily imprecise. Accordingly, there can be no assurance that we will not become involved in future environmental 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 of 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, 2016 , the Company had $21.0 million of federal consolidated net operating loss carryforwards and $6.5 million of tax-effected state loss carryforwards remaining. 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 in 2028 and 2029 . We have established a valuation allowance for federal, state, and foreign tax operating losses and credits that we have estimated may not be realizable. We believe 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 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 that was closed to new participants in 2014. 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,
	2016		2015		2014
Assumptions used to determine benefit obligations at the annual measurement date were:
Obligation discount rate	4.34	%	4.79	%	4.33	%
Compensation increase rate	4.00	%	4.00	%	4.00	%
Assumptions used to determine net periodic benefit costs were:
Obligation discount rate	4.79	%	4.33	%	5.22	%
Long-term rate of return on plan assets	6.50	%	7.00	%	7.75	%
Compensation increase rate	4.00	%	4.00	%	4.00	%

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, estimates were developed 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, 2016 and on the projected benefit obligations at December 31, 2016 is summarized as follows:



	Effect on Net Retirement Cost for the Year Ended December 31, 2016			Effect on Projected Benefit Obligations at December 31, 2016
Assumptions:	Increase/(decrease) (in millions)
Obligation discount rate:
Increase of 50 basis points	$	(0.7	)	$	(27.6	)
Decrease of 50 basis points	$	0.7		$	30.6
Long-term rate of return on plan assets:
Increase of 50 basis points	$	(2.1	)	$	—
Decrease of 50 basis points	$	2.1		$	—

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 customer 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, sales of leased railcars, 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 costs incurred to align manufacturing capacity with demand and the extent of its utilization;


•	the operating leverage and efficiencies that can be achieved by our manufacturing businesses;


•	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;


•	changes in our stock price resulting in a dilutive impact on earnings per share related to conversion features in our financing instruments;


•	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, including trial and appellate costs and supersedes bonding costs;


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


•	legal, regulatory, and environmental issues, including compliance of our products with mandated specifications, standards, or testing criteria and obligations to remove and replace our products following installation or to recall our products and install different products manufactured by us or our competitors;


•	actions by the executive and legislative branches of the U.S. government relative to federal government budgeting, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies;


•	the use of social or digital media to disseminate false, misleading and/or unreliable or inaccurate information; and


•	the inability to sufficiently protect our intellectual property rights.

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. For a discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, "Risk Factors" included elsewhere herein.

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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 8.2% of our total debt as of December 31, 2016 . If interest rates average one percentage point more in fiscal year 2017 than they did during 2016 , our interest expense would increase by $2.2 million, after considering the effects of interest rate hedges. In comparison, at December 31, 2015 , we estimated that if interest rates averaged one percentage point more in fiscal year 2016 than they did during 2015 , our interest expense would increase by $2.8 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, 2016 and 2015 . A one percentage point increase in the interest rate yield would decrease the fair value of the fixed rate debt by approximately $189.7 million. A one percentage point decrease in the interest rate yield would increase the fair value of the fixed rate debt by approximately $213.0 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, 2016 are based on the New York Mercantile Exchange for natural gas and heating oil. Hedge transactions are settled with the counterparty in cash. The effect of these transactions on the consolidated balance sheets was an asset of $0.3 million and a liability of $0.8 million at December 31, 2016 and 2015 , respectively. The effect on the consolidated statement of operations for the year ended December 31, 2016 was operating income of $0.4 million, and for the year ended December 31, 2015 was an operating expense of $1.1 million. Based on hedge positions at December 31, 2016 we estimate that a hypothetical 10% increase in the price of these commodities would increase the asset and the related operating income by $0.2 million. Similarly, a hypothetical 10% decrease in the price of these commodities would decrease the asset and the related operating income by $0.2 million.

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, 2016 was $280.7 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	46
Consolidated Statements of Operations for the years ended December 31, 2016, 2015, and 2014	47
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015, and 2014	48
Consolidated Balance Sheets as of December 31, 2016 and 2015	49
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014	50
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2016, 2015, and 2014	51
Notes to Consolidated Financial Statements	52

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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, 2016 and 2015, 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, 2016. 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, 2016 and 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, 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, 2016, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 17, 2017 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Dallas, Texas

February 17, 2017

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Trinity Industries, Inc. and Subsidiaries

Consolidated Statements of Operations



	Year Ended December 31,
	2016			2015			2014
	(in millions, except per share amounts)
Revenues:
Manufacturing	$	3,763.4		$	5,301.1		$	5,063.6
Leasing	824.9			1,091.6			1,106.4
	4,588.3			6,392.7			6,170.0
Operating costs:
Cost of revenues:
Manufacturing	3,019.6			4,043.9			3,975.1
Leasing	436.5			612.3			644.7
	3,456.1			4,656.2			4,619.8
Selling, engineering, and administrative expenses:
Manufacturing	231.0			271.4			235.0
Leasing	45.4			52.4			49.6
Other	131.0			152.6			119.0
	407.4			476.4			403.6
Gains on disposition of property:
Net gains on railcar lease fleet sales owned more than one year at the time of sale	13.5			166.1			92.3
Other	3.9			12.7			12.1
	17.4			178.8			104.4
Total operating profit	742.2			1,438.9			1,251.0
Other (income) expense:
Interest income	(5.4		)	(2.2		)	(1.9		)
Interest expense	181.9			194.7			193.4
Other, net	(1.1		)	(5.6		)	(4.6		)
	175.4			186.9			186.9
Income before income taxes	566.8			1,252.0			1,064.1
Provision (benefit) for income taxes:
Current	(119.3		)	309.4			360.6
Deferred	321.4			116.6			(5.8		)
	202.1			426.0			354.8
Net income	364.7			826.0			709.3
Net income attributable to noncontrolling interest	21.1			29.5			31.1
Net income attributable to Trinity Industries, Inc.	$	343.6		$	796.5		$	678.2

Net income attributable to Trinity Industries, Inc. per common share:
Basic	$	2.25		$	5.14		$	4.35
Diluted	$	2.25		$	5.08		$	4.19
Weighted average number of shares outstanding:
Basic	148.4			150.2			151.0
Diluted	148.6			152.2			156.7
Dividends declared per common share	$	0.440		$	0.430		$	0.375

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,
	2016			2015			2014
	(in millions)
Net income	$	364.7		$	826.0		$	709.3
Other comprehensive income (loss):
Derivative financial instruments:
Unrealized losses arising during the period, net of tax benefit of $-, $0.2, and $0.6	(0.3		)	(0.7		)	(1.2		)
Reclassification adjustments for losses included in net income, net of tax benefit of $0.7, $3.4, and $8.4	4.6			9.0			16.0
Currency translation adjustment	0.8			(6.0		)	(2.0		)
Defined benefit plans:
Unrealized losses arising during the period, net of tax benefit of $2.0, $3.4, and $26.7	(3.3		)	(6.0		)	(45.1		)
Amortization of net actuarial losses, net of tax benefit of $1.9, $1.8, and $0.8	3.2			3.2			1.3
	5.0			(0.5		)	(31.0		)
Comprehensive income	369.7			825.5			678.3
Less: comprehensive income attributable to noncontrolling interest	24.2			32.5			34.1
Comprehensive income attributable to Trinity Industries, Inc.	$	345.5		$	793.0		$	644.2

See accompanying notes to consolidated financial statements.

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Trinity Industries, Inc. and Subsidiaries

Consolidated Balance Sheets



	December 31, 2016			December 31, 2015
	(in millions)
ASSETS
Cash and cash equivalents	$	563.4		$	786.0
Short-term marketable securities	234.7			84.9
Receivables, net of allowance for doubtful accounts of $11.8 and $11.1	378.7			369.9
Income tax receivable	102.1			94.9
Inventories:
Raw materials and supplies	302.5			478.6
Work in process	189.5			222.8
Finished goods	173.8			241.7
	665.8			943.1
Restricted cash, including partially-owned subsidiaries of $78.4 and $89.9	178.2			195.8
Property, plant, and equipment, at cost, including partially-owned subsidiaries of $1,979.8 and $1,980.1	7,981.0			7,145.4
Less accumulated depreciation, including partially-owned subsidiaries of $364.9 and $313.7	(2,014.2		)	(1,797.4		)
	5,966.8			5,348.0
Goodwill	754.1			753.8
Other assets	281.5			309.5
	$	9,125.3		$	8,885.9
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	156.1		$	216.8
Accrued liabilities	426.1			529.6
Debt:
Recourse, net of unamortized discount of $27.1 and $44.2	850.6			836.7
Non-recourse:
Wholly-owned subsidiaries	840.0			928.7
Partially-owned subsidiaries	1,366.0			1,430.0
	3,056.6			3,195.4
Deferred income	23.5			27.1
Deferred income taxes	1,072.9			752.2
Other liabilities	79.0			116.1
	4,814.2			4,837.2
Stockholders’ equity:
Preferred stock – 1.5 shares authorized and unissued	—			—
Common stock – shares authorized at December 31, 2016 - 400.0; at December 31, 2015 - 400.0; shares issued and outstanding at December 31, 2016 – 152.2; at December 31, 2015 – 152.9	1.6			1.5
Capital in excess of par value	534.6			548.5
Retained earnings	3,497.3			3,220.3
Accumulated other comprehensive loss	(113.5		)	(115.4		)
Treasury stock – shares at December 31, 2016 – 0.1; at December 31, 2015 – 0.1	(1.5		)	(1.0		)
	3,918.5			3,653.9
Noncontrolling interest	392.6			394.8
	4,311.1			4,048.7
	$	9,125.3		$	8,885.9

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,
	2016			2015			2014
	(in millions)
Operating activities:
Net income	$	364.7		$	826.0		$	709.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	283.0			266.4			244.6
Stock-based compensation expense	41.3			61.1			53.3
Excess tax benefits from stock-based compensation	(1.0		)	(13.3		)	(24.4		)
Provision (benefit) for deferred income taxes	321.4			116.6			(5.8		)
Net gains on railcar lease fleet sales owned more than one year at the time of sale	(13.5		)	(166.1		)	(92.3		)
Gains on disposition of property and other assets	(3.9		)	(12.7		)	(12.1		)
Non-cash interest expense	28.5			30.1			30.7
Other	(3.4		)	(2.5		)	(4.5		)
Changes in assets and liabilities:
(Increase) decrease in receivables	(16.0		)	(0.8		)	(56.4		)
(Increase) decrease in inventories	273.3			128.5			(186.3		)
(Increase) decrease in restricted cash	—			(9.4		)	25.0
(Increase) decrease in other assets	18.6			(40.9		)	(8.3		)
Increase (decrease) in accounts payable	(60.7		)	(78.6		)	60.7
Increase (decrease) in accrued liabilities	(104.9		)	(169.6		)	82.1
Increase (decrease) in other liabilities	(37.2		)	4.9			2.6
Net cash provided by operating activities - continuing operations	1,090.2			939.7			818.2
Net cash provided by operating activities - discontinued operations	—			—			1.0
Net cash provided by operating activities	1,090.2			939.7			819.2
Investing activities:
(Increase) decrease in short-term marketable securities	(149.8		)	(9.9		)	74.7
Proceeds from railcar lease fleet sales owned more than one year at the time of sale	37.7			514.6			265.8
Proceeds from disposition of property and other assets	16.0			8.2			23.0
Capital expenditures – leasing, net of sold lease fleet railcars owned one year or less with a net cost of $92.0, $295.9, and $350.2	(799.1		)	(833.8		)	(245.3		)
Capital expenditures – manufacturing and other	(134.3		)	(196.0		)	(219.3		)
Acquisitions, net of cash acquired	—			(46.2		)	(714.4		)
Divestitures	—			51.3			—
Other	6.8			0.5			0.8
Net cash required by investing activities - continuing operations	(1,022.7		)	(511.3		)	(814.7		)
Net cash required by investing activities - discontinued operations	—			—			—
Net cash required by investing activities	(1,022.7		)	(511.3		)	(814.7		)
Financing activities:
Proceeds from issuance of common stock, net	—			0.3			0.6
Excess tax benefits from stock-based compensation	1.0			13.3			24.4
Payments to retire debt	(162.5		)	(587.2		)	(186.6		)
Proceeds from issuance of debt	—			242.4			727.3
(Increase) decrease in restricted cash	17.6			48.3			1.0
Shares repurchased	(34.7		)	(115.0		)	(36.5		)
Dividends paid to common shareholders	(66.7		)	(64.9		)	(54.4		)
Purchase of shares to satisfy employee tax on vested stock	(16.3		)	(27.5		)	(38.3		)
Contributions from noncontrolling interest	—			—			49.6
Distributions to noncontrolling interest	(26.4		)	(39.2		)	(28.2		)
Other	(2.1		)	(0.8		)	(2.5		)
Net cash provided (required) by financing activities - continuing operations	(290.1		)	(530.3		)	456.4
Net cash required by financing activities - discontinued operations	—			—			(1.5		)
Net cash provided (required) by financing activities	(290.1		)	(530.3		)	454.9
Net increase (decrease) in cash and cash equivalents	(222.6		)	(101.9		)	459.4
Cash and cash equivalents at beginning of period	786.0			887.9			428.5
Cash and cash equivalents at end of period	$	563.4		$	786.0		$	887.9

Interest paid for the years ended December 31, 2016 , 2015 , and 2014 was $151.0 million , $164.3 million , and $158.3 million , respectively. Income tax payments (refunds) for the years ended December 31, 2016 , 2015 , and 2014 were $(57.9) million , $326.8 million , and $399.0 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		$0.01 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, 2013	81.7		$	81.7		$	686.6		$	1,870.0		$	(78.2	)	(4.3	)	$	(158.0	)	$	2,402.1		$	347.0		$	2,749.1
Net income	—		—			—			678.2			—			—		—			678.2			31.1			709.3
Other comprehensive income (loss)	—		—			—			—			(34.0		)	—		—			(34.0		)	3.0			(31.0		)
Cash dividends on common stock	—		—			—			(58.3		)	—			—		—			(58.3		)	—			(58.3		)
Restricted shares, net	0.1		0.1			29.8			—			—			0.6		(15.0		)	14.9			—			14.9
Shares repurchased	—		—			—			—			—			(0.6	)	(31.5		)	(31.5		)	—			(31.5		)
Stock options exercised	0.1		0.1			(0.1		)	—			—			0.1		0.6			0.6			—			0.6
Excess tax benefits from stock-based compensation	—		—			24.2			—			—			—		—			24.2			—			24.2
Contributions from noncontrolling interest	—		—			—			—			—			—		—			—			49.6			49.6
Distributions to noncontrolling interest	—		—			—			—			—			—		—			—			(28.2		)	(28.2		)
Retirement of treasury stock	(4.2	)	(4.2		)	(198.9		)	—			—			4.2		203.1			—			—			—
Stock Split	78.0		78.0			(78.0		)	—			—			—		—			—			—			—
Other	—		—			(0.4		)	—			0.3			(0.1	)	(0.2		)	(0.3		)	(1.0		)	(1.3		)
Balances at December 31, 2014	155.7		$	155.7		$	463.2		$	2,489.9		$	(111.9	)	(0.1	)	$	(1.0	)	$	2,995.9		$	401.5		$	3,397.4
Net income	—		—			—			796.5			—			—		—			796.5			29.5			826.0
Other comprehensive income (loss)	—		—			—			—			(3.5		)	—		—			(3.5		)	3.0			(0.5		)
Cash dividends on common stock	—		—			—			(66.1		)	—			—		—			(66.1		)	—			(66.1		)
Restricted shares, net	2.1		—			64.4			—			—			(1.1	)	(30.8		)	33.6			—			33.6
Shares repurchased	—		—			—			—			—			(3.9	)	(115.0		)	(115.0		)	—			(115.0		)
Stock options exercised	0.1		—			0.4			—			—			—		—			0.4			—			0.4
Excess tax benefits from stock-based compensation	—		—			12.1			—			—			—		—			12.1			—			12.1
Distributions to noncontrolling interest	—		—			—			—			—			—		—			—			(39.2		)	(39.2		)
Retirement of treasury stock	(5.0	)	—			(145.8		)	—			—			5.0		145.8			—			—			—
Change in par value of common stock	—		(154.2		)	154.2			—			—			—		—			—			—			—
Balances at December 31, 2015	152.9		$	1.5		$	548.5		$	3,220.3		$	(115.4	)	(0.1	)	$	(1.0	)	$	3,653.9		$	394.8		$	4,048.7
Net income	—		—			—			343.6			—			—		—			343.6			21.1			364.7
Other comprehensive income	—		—			—			—			1.9			—		—			1.9			3.1			5.0
Cash dividends on common stock	—		—			—			(66.6		)	—			—		—			(66.6		)	—			(66.6		)
Restricted shares, net	2.6		0.1			46.2			—			—			(1.2	)	(21.3		)	25.0			—			25.0
Shares repurchased	—		—			—			—			—			(2.1	)	(34.7		)	(34.7		)	—			(34.7		)
Excess net tax deficiency from stock-based compensation	—		—			(4.5		)	—			—			—		—			(4.5		)	—			(4.5		)
Distributions to noncontrolling interest	—		—			—			—			—			—		—			—			(26.4		)	(26.4		)
Retirement of treasury stock	(3.3	)	—			(56.0		)	—			—			3.3		56.0			—			—			—
Other	—		—			0.4			—			—			—		(0.5		)	(0.1		)	—			(0.1		)
Balances at December 31, 2016	152.2		$	1.6		$	534.6		$	3,497.3		$	(113.5	)	(0.1	)	$	(1.5	)	$	3,918.5		$	392.6		$	4,311.1

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 a controlling interest. All significant intercompany accounts and transactions have been eliminated.

Stockholders' Equity

On May 5, 2014 , the Company's Board of Directors authorized a 2 -for-1 stock split on its common shares in the form of a 100% stock dividend. The additional shares were distributed on June 19, 2014 , to shareholders of record at the close of business on June 5, 2014 . The stock split is reflected in the consolidated statement of stockholders' equity by the reclassification of $78.0 million from "Capital in Excess of Par Value" to "Common Stock" representing the par value of the additional shares issued.

In December 2015 , the Company’s Board of Directors renewed its $250 million share repurchase program effective January 1, 2016 through December 31, 2017 . The new program replaced the previous program which expired on December 31, 2015 . Under the new program, 2,070,600 shares were repurchased during the year ended December 31, 2016 , at a cost of $34.7 million . During the year ended December 31, 2015 , the Company repurchased 3,947,320 shares at a cost of $115.0 million .

In May 2015 , the Company's stockholders approved amendments to the Company's Certificate of Incorporation increasing the number of authorized shares of common stock from 200 million to 400 million and reducing the par value of the Company's common stock to $0.01 per share from $1.00 per share.

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. Revenue from rentals and operating leases, including contracts that 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 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 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 (using level two inputs), receivables,

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and accounts payable are considered to be representative of their respective fair values. At December 31, 2016 , one Rail Group customer's net receivable balance, substantially all paid subsequent to December 31, 2016, accounted for 21% 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.

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. Based on the Company's evaluations, no impairment charges were determined to be necessary as of December 31, 2016 and 2015 .

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 quantitative 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 three inputs, related to revenue and operating profit growth, discount rates and exit multiples. As of December 31, 2016 and 2015 , the Company's annual impairment test of goodwill was completed at the reporting unit level and no impairment charges were determined to be necessary.

The net book value of intangible assets totaled $79.7 million and $86.9 million as of December 31, 2016 and 2015 , respectively, and included intangible assets with defined useful lives of $43.1 million and $50.3 million , respectively, which are amortized over their estimated useful lives ranging from 1 to 20 years . Intangible assets were evaluated for potential impairment as of December 31, 2016 and 2015 .

Restricted Cash

Restricted cash consists of cash and cash equivalents held either as collateral for the Company's non-recourse debt and lease obligations or as security for the performance of certain product sales agreements. As such, they 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

The Company provides various express, limited product warranties that generally range 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 asserted by customers. Second, based on historical, accepted 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

Certain 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 income. The functional currency of our Mexico operations is considered to be the United States dollar. The functional currency of our Canadian operations is considered to be the Canadian 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 May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers," ("ASU 2014-09") providing common revenue recognition guidance for U.S. GAAP. Under ASU 2014-09, an entity recognizes revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. It also requires additional detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2017.

The Company plans to adopt ASU 2014-09 effective January 1, 2018 using the modified retrospective method of adoption. Under this method, the guidance will be applied only to the most current period presented in the financial statements and the cumulative effect of initially applying the standard will result in an adjustment to the opening balance of retained earnings as of the date of adoption.

Using both internal and external resources, the Company continues to evaluate the requirements of the standard and their application to our various business units. While our technical analysis is on-going, we anticipate a change in the timing of revenue recognition for our wind towers and utility structures product lines within our Energy Equipment Group, no longer recognizing revenue when products are delivered, but under the new guidance, recognizing revenue over time as products are manufactured. The impact of this change cannot be reasonably estimated at this time. We expect revenue recognition policies related to our other business segments to remain substantially unchanged as a result of adopting ASU 2014-09, although this could change based on our on-going analysis. Additionally, we do not anticipate significant changes in business processes or systems.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases", ("ASU 2016-02") which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company plans to adopt ASU 2016-02 effective January 1, 2019. We are continuing to assess the potential effects of the new standard, including its effects on our consolidated financial statements and the accounting for revenue from full service leases.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, "Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting", ("ASU 2016-09") which changes how companies account for certain aspects of share-based payments to employees. Excess tax benefits or deficiencies related to vested awards, previously recognized in stockholders' equity, will be required to be recognized in the income statement when the awards vest. ASU 2016-09 became effective for public companies during interim and annual reporting periods beginning after December 15, 2016 with early adoption permitted. Accordingly, the Company adopted this new standard on January 1, 2017. The effect of adopting this standard will result in volatility in the provision for income taxes depending on fluctuations in the price of the Company's stock.

In December 2016, the FASB issued Accounting Standards Update No. 2016-18, "Restricted Cash", ("ASU 2016-18") which clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. The new guidance requires a reconciliation of totals in the statement of cash flows to the related cash and cash equivalents and restricted cash captions in the balance sheet. ASU 2016-18 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company plans to adopt ASU 2016-18 effective January 1, 2018.

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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 as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Note 2. Acquisitions and Divestitures

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



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Acquisitions:
Purchase price	$	—	$	46.2	$	720.9
Net cash paid	$	—	$	46.2	$	714.4
Goodwill recorded	$	—	$	—	$	495.0

Divestitures:
Proceeds	$	—	$	51.3	$	—
Gain recognized	$	—	$	8.3	$	—
Goodwill charged off	$	—	$	17.3	$	—

In March 2015 , we completed the acquisition of the assets of a lightweight construction aggregates business in our Construction Products Group with facilities located in Louisiana, Alabama, and Arkansas.

In June 2015, we sold the assets of our galvanizing business which included six facilities in Texas, Mississippi, and Louisiana, recognizing a gain of $8.3 million which is included in other gains on dispositions of property in the accompanying consolidated statements of operations. The assets and results of operations for this divestiture were included in the Construction Products Group.

Acquisition of Meyer Steel Structures

In August 2014, Trinity acquired the assets of Meyer Steel Structures ("Meyer"). Meyer is one of North America's leading providers of tubular steel structures for electricity transmission and distribution and is included in the Company's Energy Equipment Group. For the year ended December 31, 2014 , the Company incurred $8.7 million in acquisition-related transaction costs which have been expensed in our Corporate segment and $1.5 million in non-recurring additional state income tax expense included in our consolidated provision for income taxes. The following table represents our final purchase price allocation using level three inputs (in millions):



Accounts receivable	$	29.4
Inventories	35.2
Property, plant, and equipment	70.5
Goodwill	410.2
Other assets	76.0
Accounts payable	(15.4		)
Accrued liabilities	(10.3		)
Total net assets acquired	$	595.6

Level three inputs are those that reflect our estimates about the assumptions market participants would use in determining the fair value of the asset or liability based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using level three inputs may include methodologies such as the market approach, the income approach or the cost approach and may use unobservable inputs such as projections, estimates, and management’s interpretation of current market data. These unobservable inputs are utilized only to the extent that observable inputs are not available or cost effective to obtain. Goodwill, all tax-deductible, was primarily related to the value of Meyer's market position and its existing workforce.

Based on our final valuation, other assets include intangibles arising from the Meyer acquisition as follows (in millions):



			Weighted average useful life
Customer relationships	$	35.3	10.5 years
Trademarks/trade names	34.1		Indefinite
Technology	5.6		5.0 years
	$	75.0

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In addition to Meyer, during the year ended December 31, 2014 , we completed the acquisition of three businesses in our Energy Equipment Group located in the U.S. and Canada and one business in our Construction Products Group located in the U.S. The operating results of our 2014 acquisitions, as summarized in the following table, are included in the consolidated statements of operations from their date of acquisition, exclude transaction-related acquisition costs that are included in the Corporate segment, and include additional amortization expense resulting from the preliminary purchase price allocation:



	Year Ended December 31, 2014
	(in millions)
Revenues	187.4
Operating profit	2.4

The following table represents the pro-forma consolidated operating results of the Company as if our 2014 acquisitions had been acquired on January 1, 2013. The pro-forma information should not be considered indicative of the results that would have occurred if the acquisitions had been completed on January 1, 2013, nor is such pro-forma information necessarily indicative of future results.



	Year Ended December 31, 2014		Year Ended December 31, 2013
	(in millions)
Revenues	$	6,369.8	$	4,830.8
Operating profit	$	1,274.4	$	834.1

The aggregate purchase price related to our acquisition activity for the years ended December 31, 2016, 2015, and 2014 by segment follows:



	Year ended December 31,
	2016		2015		2014
	(in millions)
Construction Products Group	$	—	$	46.2	$	6.1
Energy Equipment Group	—		—		714.8
	$	—	$	46.2	$	720.9

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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, 2016
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents	$	188.7	$	—	$	—	$	188.7
Restricted cash	178.2		—		—		178.2
Equity instruments ⁽¹⁾	—		3.1		—		3.1
Fuel derivative instruments ⁽¹⁾	—		0.3		—		0.3
Total assets	$	366.9	$	3.4	$	—	$	370.3

Liabilities:
Interest rate hedge: ⁽²⁾
Partially-owned subsidiaries	$	—	$	0.9	$	—	$	0.9
Total liabilities	$	—	$	0.9	$	—	$	0.9

	Fair Value Measurement as of December 31, 2015
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents	$	174.0	$	—	$	—	$	174.0
Restricted cash	195.8		—		—		195.8
Total assets	$	369.8	$	—	$	—	$	369.8

Liabilities:
Interest rate hedges: ⁽²⁾
Partially-owned subsidiaries	$	—	$	1.6	$	—	$	1.6
Fuel derivative instruments ⁽²⁾	—		0.8		—		0.8
Total liabilities	$	—	$	2.4	$	—	$	2.4

⁽¹⁾ Included in other assets on the consolidated balance sheet.

⁽²⁾ Included in accrued 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 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. 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. The equity instruments consist of warrants for the purchase of certain publicly-traded equity securities and are valued using the Black-Scholes-Merton pricing model and certain assumptions regarding the exercisability of the options under the related agreement.

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.

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



	December 31, 2016					December 31, 2015
	Carrying Value			Estimated Fair Value		Carrying Value			Estimated Fair Value
	(in millions)
Recourse:
Senior notes	$	399.6		$	386.3	$	399.6		$	370.3
Convertible subordinated notes	449.4			575.5		449.4			534.8
Less: unamortized discount	(26.7		)			(43.8		)
	422.7					405.6
Capital lease obligations	32.1			32.1		35.8			35.8
Other	—			—		0.5			0.5
	854.4			993.9		841.5			941.4
Less: unamortized debt issuance costs	(3.8		)			(4.8		)
	850.6					836.7
Non-recourse:
2006 secured railcar equipment notes	194.2			201.5		204.1			218.2
2009 secured railcar equipment notes	172.5			189.9		179.2			207.2
2010 secured railcar equipment notes	280.6			284.3		296.2			314.2
TILC warehouse facility	204.1			204.1		264.3			264.3
TRL 2012 secured railcar equipment notes	425.5			395.6		449.1			436.9
TRIP Master Funding secured railcar equipment notes	955.5			960.6		997.8			1,039.5
	2,232.4			2,236.0		2,390.7			2,480.3
Less: unamortized debt issuance costs	(26.4		)			(32.0		)
	2,206.0					2,358.7
Total	$	3,056.6		$	3,229.9	$	3,195.4		$	3,421.7

The estimated fair values of our senior notes and convertible subordinated notes were based on a quoted market price in a market with little activity as of December 31, 2016 and 2015 ( Level 2 input). The estimated fair values of our 2006 , 2009 , 2010 , and 2012 secured railcar equipment notes and TRIP Rail Master Funding LLC (“TRIP Master Funding”) secured railcar equipment notes are based on our estimate of their fair value as of December 31, 2016 and 2015 . 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, components, and maintenance services; (2) the Construction Products Group, which manufactures and sells highway products and other primarily-steel products and services for infrastructure-related projects, and produces and sells construction 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, steel utility structures for electricity transmission and distribution, storage and distribution containers, and tank heads for pressure and non-pressure vessels; 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 leasing, management, maintenance, and administrative 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 related to manufacturing and dedicated to the specific manufacturing operations of a particular segment are included in the 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.

Sales and related net profits ("deferred profit") from the Rail Group to the Leasing Group are recorded in the Rail Group and eliminated in consolidation and reflected in the "Eliminations - Lease subsidiary" line in the table below. Sales between these groups are recorded at prices comparable to those charged to external customers, taking into consideration quantity, features, and production demand. Amortization of deferred profit on railcars sold to the Leasing Group is included in the operating profit 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 for these segments is shown in the tables below. We operate principally in North America.

Year Ended December 31, 2016



	Revenues								Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	External		Intersegment			Total			Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	(in millions)
Rail Group	$	2,006.9	$	1,070.4		$	3,077.3		$	459.9		$	1,014.1		$	41.7		$	29.2
Construction Products Group	510.6		12.6			523.2			72.6			470.3			23.8			49.9
Inland Barge Group	403.0		0.1			403.1			45.3			120.8			8.4			3.2
Energy Equipment Group	834.7		178.0			1,012.7			133.1			1,035.7			36.6			25.0
Railcar Leasing and Management Services Group	824.9		2.1			827.0			360.1			6,095.7			156.2			799.1
All Other	8.2		84.0			92.2			(18.9		)	114.3			7.7			9.0
Segment Totals before Eliminations and Corporate	4,588.3		1,347.2			5,935.5			1,052.1			8,850.9			274.4			915.4
Corporate	—		—			—			(131.0		)	1,079.3			8.7			18.0
Eliminations – Lease subsidiary	—		(1,021.9		)	(1,021.9		)	(178.2		)	(798.1		)	—			—
Eliminations – Other	—		(325.3		)	(325.3		)	(0.7		)	(6.8		)	(0.1		)	—
Consolidated Total	$	4,588.3	$	—		$	4,588.3		$	742.2		$	9,125.3		$	283.0		$	933.4

Year Ended December 31, 2015



	Revenues								Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	External		Intersegment			Total			Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	(in millions)
Rail Group	$	3,236.2	$	1,225.6		$	4,461.8		$	931.6		$	1,245.3		$	38.8		$	84.0
Construction Products Group	520.6		12.0			532.6			54.5			445.1			24.1			28.1
Inland Barge Group	652.9		—			652.9			117.0			157.7			10.5			5.8
Energy Equipment Group	883.6		230.1			1,113.7			150.9			1,118.3			38.2			53.5
Railcar Leasing and Management Services Group	1,091.6		13.2			1,104.8			606.2			5,358.2			142.3			833.8
All Other	7.8		104.5			112.3			(8.2		)	64.2			4.8			9.8
Segment Totals before Eliminations and Corporate	6,392.7		1,585.4			7,978.1			1,852.0			8,388.8			258.7			1,015.0
Corporate	—		—			—			(152.6		)	1,175.6			7.8			14.8
Eliminations – Lease subsidiary	—		(1,164.4		)	(1,164.4		)	(259.6		)	(673.0		)	—			—
Eliminations – Other	—		(421.0		)	(421.0		)	(0.9		)	(5.5		)	(0.1		)	—
Consolidated Total	$	6,392.7	$	—		$	6,392.7		$	1,438.9		$	8,885.9		$	266.4		$	1,029.8

Year Ended December 31, 2014



	Revenues								Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	External		Intersegment			Total			Operating Profit (Loss)			Assets			Depreciation & Amortization			Capital Expenditures
	(in millions)
Rail Group	$	3,077.6	$	739.2		$	3,816.8		$	724.1		$	1,322.4		$	32.7		$	98.3
Construction Products Group	546.1		5.6			551.7			65.4			459.3			22.7			37.1
Inland Barge Group	638.5		—			638.5			114.4			177.1			9.3			9.7
Energy Equipment Group	796.0		196.3			992.3			108.1			1,160.0			33.0			56.0
Railcar Leasing and Management Services Group	1,106.4		11.9			1,118.3			516.3			4,939.1			130.0			245.3
All Other	5.4		105.0			110.4			(25.6		)	56.3			9.6			9.3
Segment Totals before Eliminations and Corporate	6,170.0		1,058.0			7,228.0			1,502.7			8,114.2			237.3			455.7
Corporate	—		—			—			(119.0		)	1,141.6			7.4			8.9
Eliminations – Lease subsidiary	—		(710.1		)	(710.1		)	(133.1		)	(557.2		)	—			—
Eliminations – Other	—		(347.9		)	(347.9		)	0.4			(3.3		)	(0.1		)	—
Consolidated Total	$	6,170.0	$	—		$	6,170.0		$	1,251.0		$	8,695.3		$	244.6		$	464.6

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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.

Revenues and operating profit for our Mexico operations for the years ended December 31, 2016 , 2015 , and 2014 are presented below. Our Canadian operations were not significant in relation to the consolidated financial statements.



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Mexico:
Revenues:
External	$	118.9	$	106.0	$	130.4
Intercompany	199.0		230.6		217.6
	$	317.9	$	336.6	$	348.0

Operating profit	$	59.0	$	77.1	$	16.8

Total assets and long-lived assets for our Mexico operations as of December 31, 2016 and 2015 are presented below:



	Total Assets				Long-Lived Assets
	December 31,
	2016		2015		2016		2015
	(in millions)
Mexico	$	319.0	$	318.5	$	195.5	$	207.5

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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 in which the Company has a controlling interest. Each is 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.

At December 31, 2016 , the Company's carrying value of its investment in TRIP Holdings and RIV 2013 totaled $222.4 million . The Company's weighted average ownership interest in TRIP Holdings and RIV 2013 is 39% while the remaining 61% weighted average interest is owned by third-party investor-owned funds. The Company's investments in its partially-owned leasing subsidiaries are eliminated in consolidation.

Each of TRIP Holdings and RIV 2013 has wholly-owned subsidiaries that are the owners of railcars acquired from the Company's Rail and Leasing Groups. 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). Railcar purchases by these subsidiaries were funded by secured borrowings and capital contributions from TILC and third-party equity investors. 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.

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.

The assets of each of TRIP Master Funding and TRL 2012 may only be used to satisfy the particular subsidiary's liabilities, and the creditors of each of TRIP Master Funding 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 available, 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. TILC and the third-party equity investors have commitments to provide additional equity funding to TRIP Holdings that expire in May 2019 contingent upon certain returns on investment in TRIP Holdings and other conditions being met. There are no remaining equity commitments with respect to RIV 2013.

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, 2016
	Leasing Group
	Wholly- Owned Subsidiaries			Partially- Owned Subsidiaries			Manufacturing/ Corporate			Total
	(in millions)
Cash, cash equivalents, and short-term marketable securities	$	7.2		$	—		$	790.9		$	798.1
Property, plant, and equipment, net	$	3,923.6		$	1,879.6		$	961.7		$	6,764.9
Net deferred profit on railcars sold to the Leasing Group										(798.1		)
Consolidated property, plant, and equipment, net										$	5,966.8
Restricted cash	$	99.7		$	78.4		$	0.1		$	178.2
Debt:
Recourse	$	32.1		$	—		$	849.4		$	881.5
Less: unamortized discount	—			—			(27.1		)	(27.1		)
Less: unamortized debt issuance costs	(0.1		)	—			(3.7		)	(3.8		)
	32.0			—			818.6			850.6
Non-recourse	851.4			1,381.0			—			2,232.4
Less: unamortized debt issuance costs	(11.4		)	(15.0		)	—			(26.4		)
	840.0			1,366.0			—			2,206.0
Total debt	$	872.0		$	1,366.0		$	818.6		$	3,056.6
Net deferred tax liabilities	$	956.6		$	2.0		$	98.4		$	1,057.0



	December 31, 2015
	Leasing Group
	Wholly- Owned Subsidiaries			Partially- Owned Subsidiaries			Manufacturing/ Corporate			Total
	(in millions)
Cash, cash equivalents, and short-term marketable securities	$	3.8		$	—		$	867.1		$	870.9
Property, plant, and equipment, net	$	3,126.3		$	1,938.6		$	956.1		$	6,021.0
Net deferred profit on railcars sold to the Leasing Group										(673.0		)
Consolidated property, plant, and equipment, net										$	5,348.0
Restricted cash	$	105.9		$	89.9		$	—		$	195.8
Debt:
Recourse	$	35.8		$	—		$	849.9		$	885.7
Less: unamortized discount	—			—			(44.2		)	(44.2		)
Less: unamortized debt issuance costs	(0.1		)	—			(4.7		)	(4.8		)
	35.7			—			801.0			836.7
Non-recourse	943.8			1,446.9			—			2,390.7
Less: unamortized debt issuance costs	(15.1		)	(16.9		)	—			(32.0		)
	928.7			1,430.0			—			2,358.7
Total debt	$	964.4		$	1,430.0		$	801.0		$	3,195.4
Net deferred tax liabilities	$	746.0		$	1.4		$	(12.6	)	$	734.8

Net deferred profit on railcars sold to the Leasing Group consists of intersegment profit that is eliminated in consolidation and is, therefore, not allocated to an operating segment. 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.

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	Year Ended December 31,									Percent Change
	2016			2015			2014			2016 versus 2015		2015 versus 2014
	($ in millions)
Revenues:
Leasing and management	$	700.9		$	699.9		$	632.0		0.1	%	10.7	%
Sale of railcars owned one year or less at the time of sale	126.1			404.9			486.3
Total revenues	$	827.0		$	1,104.8		$	1,118.3		(25.1	)	(1.2	)

Operating profit:
Leasing and management	$	312.5		$	331.1		$	287.9		(5.6	)	15.0
Railcar sales:
Railcars owned one year or less at the time of sale	34.1			109.0			136.1
Railcars owned more than one year at the time of sale	13.5			166.1			92.3
Total operating profit	$	360.1		$	606.2		$	516.3		(40.6	)	17.4

Operating profit margin:
Leasing and management	44.6		%	47.3		%	45.6		%
Railcar sales	*			*			*
Total operating profit margin	43.5		%	54.9		%	46.2		%

Selected expense information ⁽¹⁾ :
Depreciation	$	156.2		$	142.3		$	130.0		9.8		9.5
Maintenance and compliance	$	104.3		$	97.3		$	78.9		7.2		23.3
Rent	$	39.3		$	41.6		$	52.9		(5.5	)	(21.4	)
Interest	$	125.2		$	138.8		$	153.3		(9.8	)	(9.5	)

* Not meaningful

⁽¹⁾ Depreciation, maintenance and compliance, 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 profit 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.

During the year ended December 31, 2016 , 2015 , and 2014 the Company received proceeds from the sale of leased railcars as follows:



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Leasing Group:
Railcars owned one year or less at the time of sale	$	126.1	$	404.9	$	486.3
Railcars owned more than one year at the time of sale	37.7		514.6		265.8
Rail Group	8.1		260.5		243.2
	$	171.9	$	1,180.0	$	995.3

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Equipment consists primarily of railcars leased to 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:



	2017		2018		2019		2020		2021		Thereafter		Total
	(in millions)
Future contractual minimum rental revenues	$	521.5	$	436.9	$	356.1	$	277.5	$	177.2	$	336.4	$	2,105.6

Debt. The Leasing Group’s debt at December 31, 2016 consisted primarily of non-recourse debt. In 2009 , the Company entered into capital lease obligations totaling $56.6 million . 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, 2016 , Trinity’s wholly-owned subsidiaries included in the Leasing Group held equipment with a net book value of $1,393.0 million which is pledged as collateral for Leasing Group debt held by those subsidiaries, including equipment with a net book value of $42.2 million securing capital lease obligations. The net book value of unpledged equipment at December 31, 2016 was $2,466.1 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 non-recourse to Trinity and TILC. Creditors of each of TRIP Holdings and RIV 2013 and their respective subsidiaries have recourse only to the particular subsidiary's assets. TRIP Master Funding equipment with a net book value of $1,311.0 million is pledged as collateral for the TRIP Master Funding debt. TRL 2012 equipment with a net book value of $568.6 million 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 each of the respective Trusts is considered to be the primary beneficiary of the Trust and therefore, the accounts of the Trusts, including the debt related to each of the Trusts, are 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. In February 2015, the Leasing Group purchased all of the railcars of one of the Trusts for $121.1 million , resulting in the termination of the selling trust and the Leasing Group's remaining future operating lease obligations to the selling trust totaling $105.8 million . Under the terms of the operating lease agreements between the subsidiaries and the remaining Trusts, the Leasing Group has the option to purchase, at a predetermined fixed price, certain railcars from the remaining Trusts in 2019 . The Leasing Group also has options to purchase the railcars at the end of the respective lease agreements in 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, 2016 of $145.5 million , including cash of $53.5 million and railcars of $64.1 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:



	2017		2018		2019		2020		2021		Thereafter		Total
	(in millions)
Future operating lease obligations of Trusts’ railcars	$	29.2	$	29.2	$	28.8	$	26.1	$	26.1	$	118.0	$	257.4
Future contractual minimum rental revenues of Trusts’ railcars	$	44.8	$	34.1	$	24.0	$	14.7	$	9.6	$	14.5	$	141.7

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 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.

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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:



	2017		2018		2019		2020		2021		Thereafter		Total
	(in millions)
Future operating lease obligations	$	12.1	$	12.0	$	9.5	$	7.7	$	7.6	$	13.4	$	62.3
Future contractual minimum rental revenues	$	15.3	$	8.3	$	6.2	$	4.3	$	3.4	$	4.2	$	41.7

Operating lease obligations totaling $9.3 million are guaranteed by Trinity Industries, Inc. and certain subsidiaries.

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Note 7. Derivative Instruments

We may 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 may 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 hedged 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, 2016 .

Interest rate hedges



					Included in accompanying balance sheet at December 31, 2016
	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	%	$	—	$	(0.7	)	$	—
TRIP Holdings warehouse loan	$	788.5	3.60	%	$	—	$	5.9		$	8.0
Open hedge:
TRIP Master Funding secured railcar equipment notes	$	38.7	2.62	%	$	0.9	$	0.4		$	0.5


⁽¹⁾	Weighted average fixed interest rate



	Effect on interest expense-increase/(decrease)
	Year Ended December 31,									Expected effect during next twelve months ⁽¹⁾
	2016			2015			2014			Expected effect during next twelve months ⁽¹⁾
	(in millions)
Expired hedges:
2006 secured railcar equipment notes	$	(0.4	)	$	(0.3	)	$	(0.3	)	$	(0.2	)
Promissory notes	$	—		$	1.2		$	2.9		$	—
TRIP Holdings warehouse loan	$	4.8		$	4.9		$	5.1		$	4.5
Open hedges:
TRIP Master Funding secured railcar equipment notes	$	0.9		$	1.3		$	1.5		$	0.6
Promissory notes	$	—		$	5.3		$	15.4		$	—

⁽¹⁾ Based on the fair value of open hedges as of December 31, 2016

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2008 . The balance was being amortized over the term of the related debt. These derivative instruments were fully amortized in May 2015. The effect on interest expense is due to amortization of the AOCL balance.

See Note 11 Debt regarding the related debt instruments.

Other Derivatives

Natural gas and diesel fuel

Note 8. Property, Plant, and Equipment

The following table summarizes the components of property, plant, and equipment as of December 31, 2016 and 2015 .



	December 31, 2016			December 31, 2015
	(in millions)
Manufacturing/Corporate:
Land	$	103.3		$	86.5
Buildings and improvements	642.6			610.4
Machinery and other	1,151.1			1,095.9
Construction in progress	39.1			68.7
	1,936.1			1,861.5
Less accumulated depreciation	(974.4		)	(905.4		)
	961.7			956.1
Leasing:
Wholly-owned subsidiaries:
Machinery and other	10.7			10.7
Equipment on lease	4,673.0			3,763.5
	4,683.7			3,774.2
Less accumulated depreciation	(760.1		)	(647.9		)
	3,923.6			3,126.3
Partially-owned subsidiaries:
Equipment on lease	2,309.4			2,307.7
Less accumulated depreciation	(429.8		)	(369.1		)
	1,879.6			1,938.6

Deferred profit on railcars sold to the Leasing Group	(948.2		)	(798.0		)
Less accumulated amortization	150.1			125.0
	(798.1		)	(673.0		)
	$	5,966.8		$	5,348.0

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We lease certain equipment and facilities under operating leases. Future minimum rent expense on non-Leasing Group leases in each year is (in millions): 2017 - $10.0 ; 2018 - $6.8 ; 2019 - $4.1 ; 2020 - $1.6 ; 2021 - $0.8 ; and $3.7 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 2016 or 2015 .

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, 2016 , the Company had non-operating plants with a net book value of $65.1 million . Our estimated fair value of these assets exceeds their book value.

Note 9. Goodwill

Goodwill by segment is as follows:



	December 31, 2016		December 31, 2015
	(in millions)
Rail Group	$	134.6	$	134.6
Construction Products Group	111.0		111.0
Energy Equipment Group	506.7		506.4
Railcar Leasing and Management Services Group	1.8		1.8
	$	754.1	$	753.8

As of December 31, 2016 and 2015 , the Company's annual impairment test of goodwill was completed at the reporting unit level and no impairment charges were determined to be necessary. As of December 31, 2016 and 2015 , Rail Group goodwill is net of a 2009 impairment charge of $325.0 million .

Changes in goodwill during the year ended December 31, 2016 resulted from fluctuations in foreign currency exchange rates.

Note 10. Warranties

The changes in the accruals for warranties for the years ended December 31, 2016, 2015, and 2014 are as follows:



	December 31, 2016			December 31, 2015			December 31, 2014
	(in millions)
Beginning balance	$	21.5		$	17.8		$	14.7
Warranty costs incurred	(9.4		)	(7.1		)	(6.1		)
Warranty originations and revisions	8.0			17.2			12.6
Warranty expirations	(4.4		)	(6.4		)	(3.4		)
Ending balance	$	15.7		$	21.5		$	17.8

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Note 11. Debt

The following table summarizes the components of debt as of December 31, 2016 and 2015 :



	December 31, 2016			December 31, 2015
	(in millions)
Corporate – Recourse:
Revolving credit facility	$	—		$	—
Senior notes, net of unamortized discount of $0.4 and $0.4	399.6			399.6
Convertible subordinated notes, net of unamortized discount of $26.7 and $43.8	422.7			405.6
Other	—			0.5
	822.3			805.7
Less: unamortized debt issuance costs	(3.7		)	(4.7		)
	818.6			801.0
Leasing – Recourse:
Capital lease obligations, net of unamortized debt issuance costs of $0.1 and $0.1	32.0			35.7
Total recourse debt	850.6			836.7

Leasing – Non-recourse:
Wholly-owned subsidiaries:
2006 secured railcar equipment notes	194.2			204.1
2009 secured railcar equipment notes	172.5			179.2
2010 secured railcar equipment notes	280.6			296.2
TILC warehouse facility	204.1			264.3
	851.4			943.8
Less: unamortized debt issuance costs	(11.4		)	(15.1		)
	840.0			928.7
Partially-owned subsidiaries:
TRL 2012 secured railcar equipment notes	425.5			449.1
TRIP Master Funding secured railcar equipment notes	955.5			997.8
	1,381.0			1,446.9
Less: unamortized debt issuance costs	(15.0		)	(16.9		)
	1,366.0			1,430.0
Total non–recourse debt	2,206.0			2,358.7
Total debt	$	3,056.6		$	3,195.4

Corporate

We have a $600.0 million unsecured corporate revolving credit facility that matures in May 2020 . As of December 31, 2016 , we had letters of credit issued under our revolving credit facility in an aggregate principal amount of $92.3 million , leaving $507.7 million available for borrowing. Other than these letters of credit, there were no borrowings under our revolving credit facility as of December 31, 2016 , or for the twelve month period then ended. Of the outstanding letters of credit as of December 31, 2016 , a total of $92.2 million is expected to expire in 2017 and the remainder in 2018 . The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew by their terms 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, 2016 , we were in compliance with all such financial covenants. Borrowings under the credit facility bear interest at a defined index rate plus a margin and are guaranteed by certain 100%-owned subsidiaries of the Company.

The Company's 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 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) up to, but excluding, the purchase date.

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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, 2016 and 2015 , capital in excess of par value included $92.5 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, 2016 , 2015 , and 2014 , is as follows:



	Year Ended December 31,
	2016		2015		2014
	(in millions)
Coupon rate interest	$	17.4	$	17.4	$	17.4
Amortized debt discount	17.1		15.7		14.5
	$	34.5	$	33.1	$	31.9

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 applicable 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 $24.57 per share as of December 31, 2016 . The Convertible Subordinated Notes were not subject to conversion as of January 1, 2017. 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.

In September 2014, the Company issued $400.0 million aggregate principal amount of 4.55% senior notes ("Senior Notes") due October 2024 . Interest on the Senior Notes is payable semiannually commencing April 1, 2015. The Senior Notes rank senior to existing and future subordinated debt, including the Company's Convertible Subordinated Notes and rank equal to existing and future senior indebtedness, including the Company's revolving credit facility. The Senior Notes are subordinated to all the Company's existing and future secured debt to the extent of the value of the collateral securing such indebtedness. The Senior Notes contain covenants that limit our ability and/or certain subsidiaries' ability to create or permit to exist certain liens; enter into sale and leaseback transactions; and consolidate, merge, or transfer all or substantially all of our assets. The Company’s Senior Notes are fully and unconditionally and jointly and severally guaranteed by each of Trinity’s domestic subsidiaries that is a guarantor under the Company's revolving credit facility. See Note 19 Financial Statements for Guarantors of the Senior 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 $194.2 million was outstanding as of December 31, 2016 . 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 November 2009 , Trinity Rail Leasing VII LLC, a Delaware limited liability company (“TRL VII”) and 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 $172.5 million was outstanding as of December 31, 2016 . 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.

In October 2010 , Trinity Rail Leasing 2010 LLC, a Delaware limited liability company ("TRL 2010 ") and 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 $280.6 million was outstanding as of December 31, 2016 . The 2010 Secured Railcar Equipment Notes were issued pursuant to an Indenture, dated as

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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 $1.0 billion TILC warehouse loan facility, established to finance railcars owned by TILC, had $204.1 million in outstanding borrowings as of December 31, 2016 . Under the facility, $795.9 million was unused and available as of December 31, 2016 based on the amount of warehouse-eligible, unpledged equipment. The warehouse loan facility 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 trust. 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 2.64% at December 31, 2016 . The warehouse loan facility has been renewed and extended through April 2018 . Interest rate pricing remained unchanged under the renewed facility. Amounts outstanding at maturity, absent renewal, are payable under the renewed facility in April 2019 .

In 2009 , the Company entered into capital lease obligations totaling $56.6 million , of which $32.1 million was outstanding as of December 31, 2016 . The capital lease obligations are guaranteed by the Company and certain subsidiaries and secured by railcar equipment and related leases.

Partially-owned leasing subsidiaries

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. The TRIP Holdings Senior Secured Notes were repaid in full in May 2013 .

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, with a final maturity date in July 2041 . As of December 31, 2016 , there were $88.1 million , $49.8 million , and $509.6 million of Class A-1a, Class A-1b, and of Class A-2 notes outstanding, respectively. In May 2014 , TRIP Master Funding issued $335.7 million in aggregate principal amount of Series 2014-1 Secured Railcar Equipment Notes consisting of two classes with the Class A-1 notes bearing interest at 2.86% and the Class A-2 notes bearing interest at 4.09% , with a final maturity date of April 2044 . As of December 31, 2016 , there were $87.3 million and $220.7 million of Class A-1 and Class A-2 notes outstanding, respectively. The TRIP Master Funding Secured Railcar Equipment Notes and the TRIP Master Funding Series 2014-1 Secured Railcar Equipment Notes are issued pursuant to a Master Indenture dated July 6, 2011 between TRIP Master Funding and Wilmington Trust Company, as indenture trustee; are non-recourse to Trinity, TILC, TRIP Holdings, 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.

In December 2012 , Trinity Rail Leasing 2012 LLC, a Delaware limited liability company ("TRL 2012 ") and 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 $79.2 million and $188.4 million , respectively, were outstanding as of December 31, 2016 . 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 of which $157.9 million was outstanding as of December 31, 2016 . 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 2012 Secured Railcar Equipment Notes and the 2013-1 Secured Railcar Equipment Notes were issued pursuant to a Master Indenture dated December 19, 2012 between TRL 2012 and Wilmington Trust Company, as indenture trustee; are non-recourse to Trinity, TILC, RIV 2013, and the other equity investors in RIV 2013; and are secured by TRL 2012's portfolio of railcars and operating leases thereon, its cash reserves, and all other assets owned by TRL 2012 .

TRIP Master Funding and TRL 2012 are wholly-owned subsidiaries of TRIP Holdings and RIV 2013, respectively, which, in turn, are partially-owned subsidiaries of the Company, through its wholly-owned subsidiary, TILC. The Company's combined weighted average ownership interest in TRIP Holdings and RIV 2013 is 39% . See Note 5 Partially-Owned Leasing Subsidiaries for further explanation.

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The remaining principal payments under existing debt agreements as of December 31, 2016 are as follows:



	2017		2018		2019		2020		2021		Thereafter
	(in millions)
Recourse:
Corporate	$	—	$	—	$	—	$	—	$	—	$	849.4
Leasing – capital lease obligations (Note 6)	3.6		28.5		—		—		—		—
Non-recourse – leasing (Note 6):
2006 secured railcar equipment notes	35.9		25.3		28.0		29.8		29.2		46.0
2009 secured railcar equipment notes	6.3		6.4		11.2		6.6		13.4		128.6
2010 secured railcar equipment notes	13.6		10.0		7.6		14.2		20.1		215.1
TILC warehouse facility	8.2		8.2		2.1		—		—		—
Facility termination payments - TILC warehouse facility	—		—		185.6		—		—		—
TRL 2012 secured railcar equipment notes	22.7		22.9		21.9		19.3		19.9		318.8
TRIP Master Funding secured railcar equipment notes	28.8		41.5		49.5		48.8		49.8		737.1
Total principal payments	$	119.1	$	142.8	$	305.9	$	118.7	$	132.4	$	2,295.0

Note 12. Other, Net

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



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Foreign currency exchange transactions	$	2.4		$	(2.1	)	$	(1.2	)
(Gain) loss on equity investments	(0.1		)	0.1			(0.8		)
Other	(3.4		)	(3.6		)	(2.6		)
Other, net	$	(1.1	)	$	(5.6	)	$	(4.6	)

Other for the year ended December 31, 2016 includes $2.3 million in income related to the change in fair value of certain equity instruments.

Note 13. Income Taxes

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



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Current:
Federal	$	(130.3	)	$	271.2		$	322.7
State	3.3			19.6			19.4
Foreign	7.7			18.6			18.5
Total current	(119.3		)	309.4			360.6
Deferred:
Federal	313.0			117.4			(4.0		)
State	8.1			(0.3		)	1.2
Foreign	0.3			(0.5		)	(3.0		)
Total deferred	321.4			116.6			(5.8		)
Provision	$	202.1		$	426.0		$	354.8

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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 before income taxes:



	Year Ended December 31,
	2016		2015		2014
Statutory rate	35.0	%	35.0	%	35.0	%
State taxes	1.4		1.2		1.4
Domestic production activities deduction	—		(1.4	)	(2.0	)
Noncontrolling interest in partially-owned subsidiaries	(1.3	)	(0.8	)	(1.1	)
Changes in valuation allowances and reserves	0.3		—		0.1
Other, net	0.3		—		(0.1	)
Effective rate	35.7	%	34.0	%	33.3	%

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,
	2016			2015
	(in millions)
Deferred tax liabilities:
Depreciation, depletion, and amortization	$	919.6		$	711.6
Partially-owned subsidiaries basis difference	171.5			144.0
Convertible debt	137.4			125.2
Total deferred tax liabilities	1,228.5			980.8
Deferred tax assets:
Workers compensation, pensions, and other benefits	46.7			73.7
Warranties and reserves	12.1			11.4
Equity items	52.6			52.4
Tax loss carryforwards and credits	24.9			25.7
Inventory	29.2			34.1
Accrued liabilities and other	6.5			8.3
Total deferred tax assets	172.0			205.6
Net deferred tax liabilities before valuation allowances	1,056.5			775.2
Valuation allowances	11.7			10.1
Net deferred tax liabilities before reserve for uncertain tax positions	1,068.2			785.3
Deferred tax assets included in reserve for uncertain tax positions	(11.2		)	(50.5		)
Adjusted net deferred tax liabilities	$	1,057.0		$	734.8

Taxing authority examinations

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

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its statute of limitations remains open through the later of the resolution of the mutual agreement process or July 2018 . The remaining entities are generally open for their 2010 tax years and forward.

Unrecognized tax benefits

The change in unrecognized tax benefits for the years ended December 31, 2016 , 2015 , and 2014 was as follows:



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Beginning balance	$	65.2		$	62.3		$	55.0
Additions for tax positions related to the current year	—			5.5			5.0
Additions for tax positions of prior years	1.0			—			2.5
Reductions for tax positions of prior years	(26.6		)	(0.7		)	(0.1		)
Settlements	(7.1		)	(1.9		)	—
Expiration of statute of limitations	(4.3		)	—			(0.1		)
Ending balance	$	28.2		$	65.2		$	62.3

Additions for tax positions related to the current year in the amount of $5.5 million for the year ended December 31, 2015 were amounts provided for tax positions that were taken for federal and state income tax purposes when we filed the tax return. Additions for tax positions related to the current year in the amount of $5.0 million for the year ended December 31, 2014 , were amounts provided for tax positions taken for federal, state, and Mexico income tax purposes.

Additions for tax positions related to prior years of $1.0 million for the year ended December 31, 2016 are due to a state filing position. Additions for tax positions of prior years in the amount of $2.5 million recorded in the year ended December 31, 2014 are related to federal, state, and foreign tax positions.

Reductions for tax positions of prior years of $26.6 million for the year ended December 31, 2016 related primarily to remeasured federal tax positions based upon new information for which we are now highly certain that we would ultimately prevail. The corresponding deferred tax assets related to these positions have also been removed. The reduction in tax positions of prior years of $0.7 million for the year ended December 31, 2015 was related to changes to transfer pricing and state taxes and $0.1 million for the year ended December 31, 2014 was primarily related to changes in state taxes.

Settlements for the year ended December 31, 2016 represent federal tax positions for the 2010-2011 tax years that settled during the fourth quarter of 2016. Expiration of statutes of limitations relate to the 2012 federal tax return as well as some state statutes. Settlements during the twelve months ended December 31, 2015 were due to a state tax position effectively settled upon audit and a settlement of an audit of one of our Mexican companies.

The total amount of unrecognized tax benefits including interest and penalties at December 31, 2016 and 2015 , that would affect the Company’s effective tax rate if recognized was $13.1 million and $13.9 million , respectively. There is a reasonable possibility that unrecognized federal and state tax benefits will decrease by $24.4 million by December 31, 2017 due to settlements and lapses in statutes of limitations for assessing tax years in which an extension was not requested by the taxing authority.

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, 2016 and 2015 was $8.9 million and $12.4 million , respectively. Income tax expense for the year ended December 31, 2016 included decreases of $3.5 million with regard to interest expense and penalties related to uncertain tax positions. Income tax expense for the years ended December 31, 2015 and 2014 included increases of $0.8 million , and $0.8 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,
	2016	2015	2014
Assumptions used to determine benefit obligations at the annual measurement date were:
Obligation discount rate	4.34%	4.79%	4.33%
Compensation increase rate	4.00%	4.00%	4.00%
Assumptions used to determine net periodic benefit costs were:
Obligation discount rate	4.79%	4.33%	5.22%
Long-term rate of return on plan assets	6.50%	7.00%	7.75%
Compensation increase rate	4.00%	4.00%	4.00%

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, estimates were developed 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, which was closed to new participants in 2014. The accrued benefits of the Company's remaining pension plans were frozen in 2009.

Components of net retirement cost



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Expense Components
Service cost	$	0.4		$	0.5		$	0.5
Interest	20.8			20.0			20.2
Expected return on plan assets	(27.2		)	(30.5		)	(31.0		)
Amortization of actuarial loss	5.1			5.0			2.1
Defined benefit expense	(0.9		)	(5.0		)	(8.2		)
Profit sharing	15.2			18.7			17.4
Multiemployer plan	2.3			2.4			0.8
Net expense	$	16.6		$	16.1		$	10.0

The expected return on plan assets is based on the plan assets' fair value. Amortization of actuarial loss is determined using the corridor method. Under the corridor method, unamortized actuarial gains or losses in excess of 10% of the greater of the projected benefit obligation or the fair value of plan assets as of the beginning of the plan year are amortized, for frozen plans, over the average expected remaining lifetime of frozen and inactive participants. Substantially all of the Company's defined benefit plans were frozen as of December 31, 2016 .

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Obligations and funded status



	Year Ended December 31,
	2016			2015
	(in millions)
Accumulated Benefit Obligations	$	459.6		$	445.3
Projected Benefit Obligations:
Beginning of year	$	445.3		$	473.9
Service cost	0.4			0.5
Interest	20.8			20.0
Benefits paid	(18.1		)	(17.3		)
Actuarial (gain)/loss	11.2			(31.8		)
End of year	$	459.6		$	445.3
Plans' Assets:
Beginning of year	$	422.8		$	434.5
Actual return on assets	33.1			(10.6		)
Employer contributions	4.7			16.2
Benefits paid	(18.1		)	(17.3		)
End of year	$	442.5		$	422.8

Consolidated Balance Sheet Components:
Other assets	$	5.1		$	3.5
Accrued liabilities	(22.2		)	(26.0		)
Net funded status	$	(17.1	)	$	(22.5	)
Percent of projected benefit obligations funded	96.3		%	94.9		%

None of the plans' assets are expected to be returned to us during the year ending December 31, 2017 .

Amounts recognized in other comprehensive income (loss)



	Year Ended December 31,
	2016			2015			2014
	(in millions)
Actuarial loss	$	(5.3	)	$	(9.4	)	$	(71.9	)
Amortization of actuarial loss	5.1			5.0			2.1
Curtailment	—			—			0.1
Total before income taxes	(0.2		)	(4.4		)	(69.7		)
Income tax expense (benefit)	(0.1		)	(1.6		)	(25.9		)
Net amount recognized in other comprehensive loss	$	(0.1	)	$	(2.8	)	$	(43.8	)

At December 31, 2016 AOCL included unrecognized actuarial losses of $142.8 million ( $89.7 million net of related income taxes). Actuarial losses included in AOCL and expected to be recognized in net periodic pension cost for the year ended December 31, 2017 are $5.0 million ( $3.1 million net of related income taxes).

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Plan assets

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 for the purpose of providing the capital assets necessary to meet the financial obligations made to participants of the Company's pension 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 Company's investment policy statement allocates its pension plan assets into two portfolios as follows:

• Liability hedging portfolio - The objective of the liability hedging portfolio is to match the characteristics of the pension plans' liabilities. This portfolio consists primarily of investment grade long duration bonds.

• Growth portfolio - The objective of the growth portfolio is to focus upon total return with an acceptable level of risk. This portfolio is heavily weighted toward U.S. equities with a lesser exposure to international equities, domestic real estate investment trusts, U.S. high yield and emerging market sovereign debt.

The target allocation between these two portfolios varies on a sliding scale based on the pension plans' percentage of projected benefit obligations funded ("Funding Percentage"), beginning with a 50% / 50% target allocation at a Funding Percentage of less than 100% and increasing to a 100% liability hedging portfolio target allocation at a Funding Percentage exceeding 110% . The range of target asset allocations has been determined after giving consideration to the expected returns of each asset category within the two portfolios, the expected performance of each asset category, the volatility of asset returns over time, and the complementary nature of the asset mix within the portfolio. The principal pension investment strategies include asset allocation and active asset management within approved guidelines. These assets are managed by an investment advisor.

The target and actual allocations of the plans' assets at December 31, 2016 are as follows:



	Target Allocation	December 31, 2016
Cash and cash equivalents		1	%
Liability hedging portfolio	50%	46	%
Growth portfolio	50%	53	%
Total		100	%

The estimated fair value of the plans' assets at December 31, 2016 and 2015 , indicating input levels used to determine fair value are as follows:



	Fair Value Measurement as of December 31, 2016
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	5.9	$	—	$	—	$	5.9
Debt common trust funds	—		277.2		—		277.2
Equity common trust funds	—		159.4		—		159.4
	$	5.9	$	436.6	$	—	$	442.5



	Fair Value Measurement as of December 31, 2015
	(in millions)
	Level 1		Level 2		Level 3		Total

Temporary cash investments	$	1.8	$	—	$	—	$	1.8
Debt common trust funds	—		273.9		—		273.9
Equity common trust funds	—		147.1		—		147.1
	$	1.8	$	421.0	$	—	$	422.8

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.

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Multiemployer plan

As a result of the acquisition of Meyer, the Company contributes to a multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covers certain union-represented employees at one of Meyer's facilities. The risks of participating in a multiemployer plan are different from a single-employer plan in the following aspects:

• Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

• If a participating employer stops contributing to a multiemployer plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

• If the Company chooses to stop participating in the multiemployer plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

Our participation in the multiemployer plan for the year ended December 31, 2016 is outlined in the table below. The Pension Protection Act ("PPA") zone status at December 31, 2016 and 2015 is as of the plan years ended December 31, 2015 and 2014, respectively, and is obtained from the multiemployer plan's regulatory filings available in the public domain and certified by the plan's actuary. Among other factors, plans in the yellow zone are less than 80% funded while plans in the red zone are less than 65% funded. Federal law requires that plans classified in the yellow or red zones adopt a funding improvement plan in order to improve the financial health of the plan. The plan utilized an amortization extension and the funding relief provided under the Internal Revenue Code and under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act in determining the zone status. The Company's contributions to the multiemployer plan were less than 5% of total contributions to the plan. The last column in the table lists the expiration date of the collective bargaining agreement to which the plan is subject.



		PPA Zone Status			Contributions for Year Ended December 31,
Pension Fund	Employer Identification Number	2016	2015	Financial improvement plan status	2016		2015		2014		Surcharge imposed	Expiration date of collective bargaining agreement
					(in millions)
Boilermaker-Blacksmith National Pension Trust	48-6168020	Yellow	Yellow	Implemented	$	2.3	$	2.5	$	0.6	No	July 3, 2019

Cash flows

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



	Year Ending December 31,
	(in millions)
2017	$	20.4
2018	21.5
2019	23.4
2020	24.4
2021	25.3
2022-2026	138.6

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, 2016 , 2015 , and 2014 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, 2013	$	(16.5	)	$	(18.7	)	$	(43.0	)	$	(78.2	)
Other comprehensive loss, net of tax, before reclassifications	(2.0		)	(1.2		)	(45.1		)	(48.3		)
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $-, $8.4, $0.8, and $9.2	—			16.0			1.3			17.3
Less: noncontrolling interest	—			(3.0		)	—			(3.0		)
Other comprehensive income (loss)	(2.0		)	11.8			(43.8		)	(34.0		)
Transfer of interests in partially-owned leasing subsidiaries	—			0.3			—			0.3
Balances at December 31, 2014	(18.5		)	(6.6		)	(86.8		)	(111.9		)
Other comprehensive loss, net of tax, before reclassifications	(6.0		)	(0.7		)	(6.0		)	(12.7		)
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $-, $3.4, $1.8, and $5.2	—			9.0			3.2			12.2
Less: noncontrolling interest	—			(3.0		)	—			(3.0		)
Other comprehensive income (loss)	(6.0		)	5.3			(2.8		)	(3.5		)
Balances at December 31, 2015	(24.5		)	(1.3		)	(89.6		)	(115.4		)
Other comprehensive income (loss), net of tax, before reclassifications	0.8			(0.3		)	(3.3		)	(2.8		)
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $-, $0.7, $1.9, and $2.6	—			4.6			3.2			7.8
Less: noncontrolling interest	—			(3.1		)	—			(3.1		)
Other comprehensive income (loss)	0.8			1.2			(0.1		)	1.9
Balances at December 31, 2016	$	(23.7	)	$	(0.1	)	$	(89.7	)	$	(113.5	)

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 $4.1 million , $4.2 million , and $1.7 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, 2016 , 2015 , and 2014 , respectively.

Note 16. Stock-Based Compensation

The Company's 2004 Third Amended and Restated Stock Option and Incentive Plan (the "Plan”) provides for awarding 17,450,000 (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, 2016 , a total of 2,123,136 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. 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 is referred to as share-based payments and is based on the grant date fair-value of those awards. Stock-based compensation includes compensation expense, recognized over the applicable vesting periods, for share-based awards. The Company uses the Black-Scholes-Merton option pricing model to

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determine the fair value of stock options granted to employees. Stock-based compensation totaled $41.3 million , $61.1 million , and $53.3 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively.

The income tax benefit related to stock-based compensation expense was $18.0 million , $28.5 million , and $40.1 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The Company has presented excess tax benefits related to 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. All options outstanding at December 31, 2016 and December 31, 2015 were exercisable.



	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)	Aggregate Intrinsic Value
					(in millions)
Options outstanding at December 31, 2015	60,793	$	8.12	2.9	$1.0
Granted	—	—
Exercised	—	—
Cancelled	—	—
Options outstanding at December 31, 2016	60,793	$	8.12	1.9	$1.2

At December 31, 2016 , there was no unrecognized compensation expense related to stock options. The intrinsic value of options exercised totaled zero , $0.7 million , and $1.8 million during the years ended December 31, 2016 , 2015 , and 2014 , 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 shorter. 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 upon 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 three years.



	Number of Restricted Share Awards		Weighted Average Grant-Date Fair Value per Award
Restricted share awards outstanding at December 31, 2015	6,798,175		$	23.76
Granted	2,969,439		19.06
Vested	(2,746,507	)	21.93
Forfeited	(272,024	)	25.90
Restricted share awards outstanding at December 31, 2016	6,749,083		$	22.35

At December 31, 2016 , unrecognized compensation expense related to restricted share awards totaled $63.1 million which will be recognized over a weighted average period of 4.8 years. The total vesting-date fair value of shares vested and released during the years ended December 31, 2016 , 2015 , and 2014 was $47.0 million , $76.9 million , and $105.2 million , respectively. The weighted average grant-date fair value of restricted share awards granted during the years ended December 31, 2016 , 2015 , and 2014 was $19.06 , $24.31 , and $32.35 per share, respectively.

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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. See Note 11 Debt for further explanation of the Company's Convertible Subordinated Notes. Total weighted average restricted shares and antidilutive stock options were 6.6 million shares, 6.8 million shares, and 7.4 million shares, for the years ended December 31, 2016 , 2015 , and 2014 , respectively.

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



	Year Ended December 31, 2016
	(in millions, except per share amounts)
	Income (Loss)			Average Shares	EPS
Net income attributable to Trinity Industries, Inc.	$	343.6
Unvested restricted share participation	(9.4		)
Net income attributable to Trinity Industries, Inc. – basic	334.2			148.4	$	2.25
Effect of dilutive securities:
Stock options	—			—
Convertible subordinated notes	—			0.2
Net income attributable to Trinity Industries, Inc. – diluted	$	334.2		148.6	$	2.25



	Year Ended December 31, 2015
	(in millions, except per share amounts)
	Income (Loss)			Average Shares	EPS
Net income attributable to Trinity Industries, Inc.	$	796.5
Unvested restricted share participation	(24.1		)
Net income attributable to Trinity Industries, Inc. – basic	772.4			150.2	$	5.14
Effect of dilutive securities:
Stock options	—			—
Convertible subordinated notes	0.3			2.0
Net income attributable to Trinity Industries, Inc. – diluted	$	772.7		152.2	$	5.08



	Year Ended December 31, 2014
	(in millions, except per share amounts)
	Income (Loss)			Average Shares	EPS
Net income attributable to Trinity Industries, Inc.	$	678.2
Unvested restricted share participation	(22.1		)
Net income attributable to Trinity Industries, Inc. – basic	656.1			151.0	$	4.35
Effect of dilutive securities:
Stock options	—			0.1
Convertible subordinated notes	0.7			5.6
Net income attributable to Trinity Industries, Inc. – diluted	$	656.8		156.7	$	4.19

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Note 18. Commitments and Contingencies

Highway products litigation

We previously reported the filing of a False Claims Act (“FCA”) complaint in the United States District Court for the Eastern District of Texas, Marshall Division (“District Court”) styled Joshua Harman, on behalf of the United States of America, Plaintiff/Relator v. Trinity Industries, Inc., Defendant , Case No. 2:12-cv-00089-JRG (E.D. Tex.). In this case, the relator, Mr. Joshua Harman, alleged the Company violated the FCA pertaining to sales of the Company's ET-Plus® System, a highway guardrail end-terminal system (“ET Plus”). On October 20, 2014, a trial in this case concluded with a jury verdict stating that the Company and its subsidiary, Trinity Highway Products, LLC (“Trinity Highway Products”), “knowingly made, used or caused to be made or used, a false record or statement material to a false or fraudulent claim" and awarding $175.0 million in damages. Following unsuccessful settlement negotiations to resolve this dispute and the District Court's denial of the Company’s post-verdict motion for judgment as a matter of law, on June 9, 2015 the District Court entered judgment on the verdict in the total amount of $682.4 million , comprised of $175.0 million in damages, which amount is automatically trebled under the FCA to $525.0 million plus $138.4 million in civil penalties and $19.0 million in costs and attorneys' fees.

On June 23, 2015, the District Court approved the Company’s posting of a supersedeas bond in the amount of $686.0 million (the “Bond”) and ordered a stay of the execution of the District Court’s June 9, 2015 entry of judgment of $682.4 million against the Company pending resolution of all appeals. The Company obtained the Bond on an unsecured basis and the annual premium is currently $3.7 million .

On July 7, 2015, the Company filed a Motion for New Trial with the District Court and on August 3, 2015, the Motion was denied. On August 28, 2015, the Company filed a Notice of Appeal to the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”). On March 21, 2016, the Company filed its opening appellate brief. On March 28, 2016, six separate amicus curiae briefs were filed in the Fifth Circuit by the following organizations and individuals in support of Trinity’s appeal seeking a reversal of the judgment: (i) Eleven states - Texas, Alabama, Arkansas, Colorado, Indiana, Louisiana, Nevada, Oklahoma, South Carolina, Utah and Wisconsin; (ii) the National Association of Manufacturers, United States Chamber of Commerce, and the American Tort Reform Association; (iii) five former United States Department of Justice Officials; (iv) Mothers Against Drunk Driving; (v) the Cato Institute; and (vi) the Washington Legal Foundation. On June 9, 2016, Mr. Joshua Harman filed his responsive appeal brief in the Fifth Circuit. On June 16, 2016, six amicus curiae briefs were filed in the Fifth Circuit by several organizations and individuals in support of Mr. Harman's opposition to the Company's appeal. On July 21, 2016, the Company filed its reply brief in this matter and on December 7, 2016, the Fifth Circuit heard the parties' oral arguments. The Fifth Circuit's ruling on the Company's appeal is pending.

Texas A&M Transportation Institute (“TTI”), a member of The Texas A&M University System, designed the technology employed in the ET Plus. The Texas A&M University System is the owner of patents issued by the U.S. Patent Office that cover the ET Plus. Trinity Highway Products manufactures and markets the ET Plus pursuant to an exclusive license granted by The Texas A&M University System. In 2005, Trinity Highway Products contracted with TTI to conduct crash testing of the ET Plus to demonstrate compliance with the required crash test criteria set out in National Cooperative Highway Research Program Report 350 (“Report 350”). Following the 2005 crash testing, TTI prepared and provided to Trinity Highway Products the test reports on the crash test performance of the ET Plus. These reports were reviewed by the Federal Highway Administration (the “FHWA”) in their 2005 acceptance of the product for use on the national highway system and determination of the product’s eligibility for federal-aid reimbursement. In a memorandum dated June 17, 2014, the FHWA confirmed that “The Trinity ET Plus with 4-inch guide channels became eligible for federal-aid reimbursement under FHWA letter CC-94 on September 2, 2005. In addition, the device is eligible for reimbursement under FHWA letters CC-94A and CC-120.” In this memorandum the FHWA confirmed that the reimbursement eligibility applies at guardrail heights from 27 ¾" to 31". The memorandum goes on to state that an “unbroken chain of eligibility for federal-aid reimbursement has existed since September 2, 2005 and the ET Plus continues to be eligible today.”

Preceding the October 2014 trial in this matter, the Company filed a Petition for Writ of Mandamus with the Fifth Circuit based, in part, on the District Court’s failure to apply precedential case law. The Fifth Circuit denied this petition, but expressed concern regarding the District Court’s failure to issue a reasoned ruling rejecting the Company’s prior motions for judgment as a matter of law. The Fifth Circuit also stated that the FHWA’s authoritative memorandum of June 17, 2014 appears to compel the conclusion that the FHWA, after due consideration of all the facts, found the ET Plus sufficiently compliant with federal safety standards and therefore fully eligible, in the past, present and future, for federal-aid reimbursement claims. Additionally, the Fifth Circuit noted that a strong argument could be made that the Company’s actions were neither material nor were any false claims based on false certifications presented to the government. We believe this reinforces our prospects for a successful outcome on appeal.

Crash testing and FHWA assessments

Following the October 20, 2014 jury verdict, the FHWA requested that the Company conduct eight separate crash tests pursuant to crash test criteria set out in Report 350. Due to the FHWA’s request for additional ET Plus crash tests, on October 24, 2014 the Company announced that it would suspend shipment of the ET Plus to customers. The FHWA-requested tests were conducted in December 2014 and January 2015 at Southwest Research Institute, an FHWA-approved and independent research facility. Following

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completion of the first four tests at a 27 ¾" guardrail installation height, and again after completion of the second four tests at a 31" guardrail installation height, the FHWA reported that the ET Plus passed all tests. Performance evaluation results from eight successful crash tests validate Trinity Highway Products' long standing position that the ET Plus performs as tested for both guardrail installation heights when properly installed and maintained. On March 11, 2015, the FHWA and the American Association of State Highway and Transportation Officials ("AASHTO") released the findings of a joint task force ("Task Force I"), comprised of representatives from the FHWA, AASHTO, the state Departments of Transportation of South Dakota, New Hampshire, Missouri, Ohio, Delaware, and Wyoming, and the Ministry of Transportation of Ontario, Canada, that evaluated field measurement data collected by FHWA engineers from more than 1,000 4-inch ET Plus devices installed on roadways throughout the country. Task Force I concluded there is no evidence to suggest that there are multiple versions of the 4-inch ET Plus on the nation's roadways. Task Force I also concluded that the ET Plus end terminals crash tested at Southwest Research Institute in December 2014 and January 2015 were representative of the devices installed across the country.

The FHWA and AASHTO formed a second joint task force ("Task Force II”) comprised of representatives from the FHWA, AASHTO, the state Departments of Transportation of Iowa, Georgia, New Hampshire, North Carolina, New York, Michigan, Missouri, Delaware, and Utah, and independent experts to further evaluate the in-service performance of the ET Plus and other guardrail end terminals through the collection and analysis of a broad array of data. In a report dated September 11, 2015, the FHWA and AASHTO released certain findings, conclusions, and recommendations of Task Force II, including but not limited to, the following: there are no performance limitations unique to the ET Plus; there will be real-world accident conditions that exceed the performance expectations of all manufacturers’ guardrail end terminal systems; and additional crash testing of all existing Report 350 compliant guardrail end terminals, including the ET Plus, “would not be informative” and “would be irrelevant”.

The Company is vigorously pursuing a reversal of the $682.4 million judgment before the Fifth Circuit. Appellate review will continue to result in legal expenses that are expensed as incurred. We remain confident in the performance of the product at issue in this matter, and we maintain that the allegations in the case are baseless and without merit. We believe our filing in the Fifth Circuit articulates in a clear and convincing way why the judgment should not stand.

Based on information currently available to the Company, including, but not limited to the significance of the successful completion of eight post-verdict crash tests of the ET Plus and the favorable findings and conclusions published by both Task Force I and II regarding ET Plus end terminal systems installed on the nation's roadways, we do not believe that a loss is probable in this matter, therefore no accrual has been included in the accompanying consolidated financial statements.

There were no revenues from the sales of ET Plus systems in the United States for the first three quarters of 2015 as a result of the Company’s action to suspend shipments of the product during that time. The Company resumed shipment of ET Plus systems in the fourth quarter of 2015. Revenues from sales of the ET Plus, included in the Construction Products Group, totaled approximately $4.1 million for the year ended December 31, 2016 .

State, county, and municipal actions

Trinity is aware of 29 states and the District of Columbia that have removed the ET Plus from their respective qualified products list.

Mr. Harman has also filed nine separate state qui tam actions pursuant to: the Virginia Fraud Against Taxpayers Act ( Commonwealth of Virginia ex rel. Joshua M. Harman v. Trinity Industries, Inc. and Trinity Highway Products, LLC , Case No. CL13-698, in the Circuit Court, Richmond, Virginia); the Indiana False Claims and Whistleblower Protection Act ( State of Indiana ex rel. Joshua M. Harman Qui Tam v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. 49D06-1407-PL-024117, in the Sixth Court of Marion County, Indiana); the Delaware False Claims and Reporting Act ( State of Delaware ex rel. Joshua M. Harman v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Civ. No. N14C-06-227 MMJ CCLD, in the Superior Court of the State of Delaware In and For New Castle County); the Iowa False Claims Act ( State of Iowa ex rel. Joshua M. Harman v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. CVCV048309, in the Iowa District Court for Polk County); the Rhode Island False Claims Act ( State of Rhode Island ex rel. Joshua M. Harman v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. 14-3498, in the Superior Court for the State of Rhode Island and Providence Plantations); the Tennessee False Claims Act ( State of Tennessee ex rel. Joshua M. Harman v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. 14C2652, in the Circuit Court for Davidson County, Tennessee); the Minnesota False Claims Act ( State of Minnesota ex rel. Joshua M. Harman Qui Tam v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. 62-CV-14-3457, in the Second Judicial District Court, Ramsey County, Minnesota); the Montana False Claims Act ( State of Montana ex rel. Joshua M. Harman v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. DV 14-0692, in the Montana Thirteenth Judicial District Court for Yellowstone County); and the Georgia Taxpayer Protection False Claims Act ( State of Georgia ex rel. Joshua M. Harman v. Trinity Industries, Inc., and Trinity Highway Products, LLC , Case No. 1:15-CV-1260, in the U.S. District Court for the Northern District of Georgia). In each of these nine cases Mr. Harman is alleging the Company violated the respective states' false claims act pertaining to sales of the ET Plus, and he is seeking damages, civil penalties, attorneys’ fees, costs and interest. Also, the respective states’ Attorneys General filed Notices of Election to Decline Intervention in all of these matters, with the exception of the Commonwealth of Virginia Attorney General who intervened in the Virginia matter. At this time all of the above-referenced state qui tam cases are stayed.

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The Company believes these state qui tam lawsuits are without merit and intends to vigorously defend all allegations. Other states could take similar or different actions, and could be considering similar state false claims or other litigation against the Company.

The Company is aware of three class action lawsuits involving claims pertaining to the ET Plus. The Company has been served in a lawsuit filed November 26, 2014, titled Hamilton County, Illinois and Macon County, Illinois, Individually and on behalf of all Other Counties in the State of Illinois vs. Trinity Industries, Inc. and Trinity Highway Products, LLC , Case No. 3:14-cv-1320 (Southern District of Illinois). This complaint was later amended to substitute St. Clair County, Illinois for Hamilton County as a lead plaintiff and to expand the proposed class. The case is being brought by plaintiffs for and on behalf of themselves and the other 101 counties of the State of Illinois and on behalf of cities, villages, incorporated towns, and township governments of the State of Illinois. The plaintiffs allege that the Company and Trinity Highway Products made a series of un-tested modifications to the ET Plus and falsely certified that the modified ET Plus was acceptable for use on the nation’s highways based on federal testing standards and approval for federal-aid reimbursement. The plaintiffs also allege breach of implied warranties, violation of the Illinois Uniform Deceptive Trade Practices Act and unjust enrichment, for which plaintiffs seek actual damages related to purchases of the ET Plus, compensatory damages for establishing a common fund for class members, punitive damages, attorneys' fees and costs, and injunctive relief.

The Company has also been served in a lawsuit filed February 11, 2015, titled The Corporation of the City of Stratford and Trinity Industries, Inc., Trinity Highway Products, LLC, and Trinity Industries Canada, Inc. , Case No. 15-2622 CP , pending in Ontario Superior Court of Justice. The alleged class in this matter has been identified as persons in Canada who purchased and/or used an ET Plus guardrail end terminal. The plaintiff alleges that Trinity Industries, Inc., Trinity Highway Products, LLC, and Trinity Industries Canada, Inc., failed to warn of dangers associated with undisclosed modifications to the ET Plus guardrail end terminals, breached an implied warranty, breached a duty of care, and were negligent. The plaintiff is seeking $400 million in compensatory damages and $100 million in punitive damages. Alternatively, the plaintiff claims the right to an accounting or other restitution remedy for disgorgement of the revenues generated by the sale of the modified ET Plus in Canada.

The Company has been served in a lawsuit filed November 5, 2015, titled Jackson County, Missouri, individually and on behalf of a class of others similarly situated vs. Trinity Industries, Inc. and Trinity Highway Products, LLC , Case No. 1516-CV23684 (Circuit Court of Jackson County, Missouri). The case is being brought by plaintiff for and on behalf of itself and all Missouri counties with a population of 10,000 or more persons, including the City of St. Louis, and the State of Missouri’s transportation authority. The plaintiff alleges that the Company and Trinity Highway Products did not disclose design changes to the ET Plus and these allegedly undisclosed design changes made the ET Plus allegedly defective, unsafe, and unreasonably dangerous. The plaintiff alleges product liability negligence, product liability strict liability, and negligently supplying dangerous instrumentality for supplier’s business purposes. The plaintiff seeks compensatory damages, interest, attorneys' fees and costs, and in the alternative plaintiff seeks a declaratory judgment that the ET Plus is defective, the Company’s conduct was unlawful, and class-wide costs and expenses associated with removing and replacing the ET Plus throughout Missouri.

The Company believes each of these county and municipal class action lawsuits is without merit and intends to vigorously defend all allegations. While the financial impacts of these three county and municipal class action lawsuits are currently unknown, they could be material.

Based on the information currently available to the Company, we currently do not believe that a loss is probable in any one or more of the actions described under "State, county, and municipal actions," therefore no accrual has been included in the accompanying consolidated financial statements. Because of the complexity of these actions as well as the current status of certain of these actions, we are not able to estimate a range of possible losses with respect to any one or more of these actions.

Product liability cases

The Company is currently defending a number of product liability lawsuits in several different states that are alleged to involve the ET Plus as well as other products manufactured by Trinity Highway Products. These cases are diverse in light of the randomness of collisions in general and the fact that each accident involving a roadside device such as an end terminal, or any other fixed object along the highway has its own unique facts and circumstances. Report 350 recognizes that performance of even the most carefully researched and tested roadside device is subject to physical laws and the crash worthiness of vehicles. The Company expects the judgment in the FCA case, coupled with the media attention such judgment has generated, will prompt the plaintiff’s bar to seek out individuals involved in collisions with a Trinity Highway Products manufactured product as potential clients, which may result in additional product liability lawsuits being filed against the Company. The Company carries general liability insurance to mitigate the impact of adverse judgment exposures in these product liability cases. To the extent that the Company believes that a loss is probable with respect to these product liability cases, the accrual for such losses is included in the amounts described below under "Other matters".

Shareholder class actions

On January 11, 2016, the previously reported cases styled Thomas Nemky, Individually and On Behalf of All Other Similarly Situated v. Trinity Industries, Inc., Timothy R. Wallace, and James E. Perry , Case No. (2:15-CV-00732) (“Nemky”) and Richard

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J. Isolde, Individually and On Behalf of All Other Similarly Situated v. Trinity Industries, Inc., Timothy R. Wallace, and James E. Perry, Case No. (3:15-CV-2093) ("Isolde"), were consolidated in the District Court for the Northern District of Texas, with all future filings to be filed in the Isolde case. On March 9, 2016, the Court appointed the Department of the Treasury of the State of New Jersey and its Division of Investment and the Plumbers and Pipefitters National Pension Fund and United Association Local Union Officers & Employees’ Pension Fund as co-lead plaintiffs ("Lead Plaintiffs). On May 11, 2016, the Lead Plaintiffs filed their Consolidated Complaint alleging defendants Trinity Industries, Inc., Timothy R. Wallace, James E. Perry, and Gregory B. Mitchell violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and defendants Mr. Wallace and Mr. Perry violated Section 20(a) of the Securities Exchange Act of 1934 by making materially false and misleading statements and/or by failing to disclose material facts about Trinity's ET Plus and the FCA case styled Joshua Harman, on behalf of the United States of America, Plaintiff/Relator v. Trinity Industries, Inc., Defendant , Case No. 2:12-cv-00089-JRG (E.D. Tex.). On August 18, 2016, Trinity, Mr. Wallace, Mr. Perry, and Mr. Mitchell filed motions to dismiss Lead Plaintiffs Consolidated Complaint, which remain pending.

Trinity, Mr. Wallace, Mr. Perry, and Mr. Mitchell deny and intend to vigorously defend against the allegations in the Isolde case. Based on the information available to the Company, we currently do not believe that a loss is probable with respect to this shareholder class action; therefore no accrual has been included in the accompanying consolidated financial statements. Because of the complexity of these actions as well as the current status of certain of these actions, we are not able to estimate a range of possible losses with respect to these matters.

Stockholder books and records requests

The Company has received multiple requests from stockholders pursuant to the Delaware General Corporation Law to review certain of the Company's books and records related to the ET Plus and the FCA case styled Joshua Harman, on behalf of the United States of America, Plaintiff/Relator v. Trinity Industries, Inc., Defendant , Case No. 2:12-cv-00089-JRG (E.D. Tex.) . The stockholders' stated purpose for seeking access to the Company's books and records is to investigate the possibility of whether the directors or officers of the Company committed breaches of fiduciary duty or other wrongdoing. In accordance with the Company's obligations under the Delaware law when such requests are properly filed, the Company has provided books and records to some of those stockholders.

Other matters

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 $3.2 million to $20.2 million . This range includes any amount related to the Highway Products litigation matters described above in the section titled “Product liability cases.” At December 31, 2016 , total accruals of $10.3 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.

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 $3.7 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 $584.8 million as of December 31, 2016 , of which $471.1 million is for the purchase of raw materials and components, principally by the Rail, Inland Barge, and Energy Equipment Groups.

Note 19. Financial Statements for Guarantors of the Senior Notes

The Company’s Senior Notes are fully and unconditionally and jointly and severally guaranteed by certain of Trinity’s 100%-owned subsidiaries: Trinity Industries Leasing Company; Trinity Marine Products, Inc.; Trinity North American Freight Car, Inc.; Trinity Rail Group, LLC; Trinity Tank Car, Inc.; and Trinity Meyer Utility Structures LLC (collectively, the "Combined Guarantor Subsidiaries”). The Senior Notes indenture agreement includes customary provisions for the release of the guarantees by the Combined Guarantor Subsidiaries upon the occurrence of certain allowed events including the release of one or more of the Combined Guarantor Subsidiaries as guarantor under the Company's revolving credit facility. See Note 11 Debt. The Senior Notes are not guaranteed by any remaining 100%-owned subsidiaries of the Company or partially-owned subsidiaries (“Combined Non-Guarantor Subsidiaries”).

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As of December 31, 2016 , assets held by the Combined Non-Guarantor Subsidiaries included $ 147.1 million of restricted cash that was not available for distribution to Trinity Industries, Inc. (“Parent”), $ 3,300.9 million of equipment securing certain non-recourse debt, $ 68.0 million of equipment securing certain lease obligations held by the Combined Non-Guarantor Subsidiaries, and $ 349.4 million of assets located in foreign locations. As of December 31, 2015 , assets held by the Combined Non-Guarantor Subsidiaries included $ 160.5 million of restricted cash that was not available for distribution to the Parent, $ 3,437.1 million of equipment securing certain non-recourse debt, $ 71.2 million of equipment securing certain lease obligations held by the Combined Non-Guarantor Subsidiaries, and $ 359.0 million of assets located in foreign locations.

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Statement of Operations and Comprehensive Income
Year Ended December 31, 2016
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
Revenues	$	—		$	2,880.8		$	2,475.3	$	(767.8	)	$	4,588.3
Cost of revenues	(1.3		)	2,331.5			1,921.7		(795.8		)	3,456.1
Selling, engineering, and administrative expenses	125.3			121.8			160.3		—			407.4
Gains on dispositions on property	(0.5		)	11.1			6.8		—			17.4
	124.5			2,442.2			2,075.2		(795.8		)	3,846.1
Operating profit (loss)	(124.5		)	438.6			400.1		28.0			742.2
Other (income) expense	(128.8		)	67.4			236.8		—			175.4
Equity in earnings of subsidiaries, net of taxes	387.5			91.8			—		(479.3		)	—
Income before income taxes	391.8			463.0			163.3		(451.3		)	566.8
Provision (benefit) for income taxes	48.2			154.3			56.8		(57.2		)	202.1
Net income	343.6			308.7			106.5		(394.1		)	364.7
Net income attributable to noncontrolling interest	—			—			—		21.1			21.1
Net income attributable to controlling interest	$	343.6		$	308.7		$	106.5	$	(415.2	)	$	343.6

Net income	$	343.6		$	308.7		$	106.5	$	(394.1	)	$	364.7
Other comprehensive income (loss)	0.6			(0.4		)	4.8		—			5.0
Comprehensive income	344.2			308.3			111.3		(394.1		)	369.7
Comprehensive income attributable to noncontrolling interest	—			—			—		24.2			24.2
Comprehensive income attributable to controlling interest	$	344.2		$	308.3		$	111.3	$	(418.3	)	$	345.5



Statement of Operations and Comprehensive Income
Year Ended December 31, 2015
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
Revenues	$	—		$	4,668.8	$	2,642.6	$	(918.7	)	$	6,392.7
Cost of revenues	(2.0		)	3,594.9		2,005.3		(942.0		)	4,656.2
Selling, engineering, and administrative expenses	147.0			153.3		176.1		—			476.4
Gains on dispositions on property	2.0			86.0		90.8		—			178.8
	143.0			3,662.2		2,090.6		(942.0		)	4,953.8
Operating profit (loss)	(143.0		)	1,006.6		552.0		23.3			1,438.9
Other (income) expense	(118.7		)	68.6		237.0		—			186.9
Equity in earnings of subsidiaries, net of taxes	920.0			217.4		—		(1,137.4		)	—
Income before income taxes	895.7			1,155.4		315.0		(1,114.1		)	1,252.0
Provision (benefit) for income taxes	99.2			353.2		12.5		(38.9		)	426.0
Net income	796.5			802.2		302.5		(1,075.2		)	826.0
Net income attributable to noncontrolling interest	—			—		—		29.5			29.5
Net income attributable to controlling interest	$	796.5		$	802.2	$	302.5	$	(1,104.7	)	$	796.5

Net income	$	796.5		$	802.2	$	302.5	$	(1,075.2	)	$	826.0
Other comprehensive income (loss)	(6.0		)	—		5.5		—			(0.5		)
Comprehensive income	790.5			802.2		308.0		(1,075.2		)	825.5
Comprehensive income attributable to noncontrolling interest	—			—		—		32.5			32.5
Comprehensive income attributable to controlling interest	$	790.5		$	802.2	$	308.0	$	(1,107.7	)	$	793.0

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Statement of Operations and Comprehensive Income
Year Ended December 31, 2014
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
Revenues	$	—		$	4,290.3		$	2,700.2	$	(820.5	)	$	6,170.0
Cost of revenues	2.3			3,345.5			2,098.5		(826.5		)	4,619.8
Selling, engineering, and administrative expenses	115.6			124.9			163.1		—			403.6
Gains on dispositions on property	(1.4		)	41.3			64.5		—			104.4
	119.3			3,429.1			2,197.1		(826.5		)	4,919.0
Operating profit (loss)	(119.3		)	861.2			503.1		6.0			1,251.0
Other (income) expense	(60.3		)	57.1			190.1		—			186.9
Equity in earnings of subsidiaries, net of taxes	741.7			191.8			—		(933.5		)	—
Income before income taxes	682.7			995.9			313.0		(927.5		)	1,064.1
Provision (benefit) for income taxes	4.5			297.2			50.6		2.5			354.8
Net income	678.2			698.7			262.4		(930.0		)	709.3
Net income attributable to noncontrolling interest	—			—			—		31.1			31.1
Net income attributable to controlling interest	$	678.2		$	698.7		$	262.4	$	(961.1	)	$	678.2

Net income	$	678.2		$	698.7		$	262.4	$	(930.0	)	$	709.3
Other comprehensive income (loss)	(33.9		)	(8.5		)	11.4		—			(31.0		)
Comprehensive income	644.3			690.2			273.8		(930.0		)	678.3
Comprehensive income attributable to noncontrolling interest	—			—			—		34.1			34.1
Comprehensive income attributable to controlling interest	$	644.3		$	690.2		$	273.8	$	(964.1	)	$	644.2

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Balance Sheet
December 31, 2016
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
Assets:
Cash and cash equivalents	$	537.9	$	5.2	$	51.3	$	(31.0	)	$	563.4
Short-term marketable securities	234.7		—		—		—			234.7
Receivables, net of allowance	1.1		201.1		176.5		—			378.7
Income tax receivable	99.9		—		2.2		—			102.1
Inventory	—		409.2		266.5		(9.9		)	665.8
Property, plant, and equipment, net	48.8		2,329.6		4,047.6		(459.2		)	5,966.8
Investments in and advances to subsidiaries	4,862.4		2,441.1		470.0		(7,773.5		)	—
Restricted cash	—		—		147.1		31.1			178.2
Goodwill and other assets	150.8		584.9		301.2		(1.3		)	1,035.6
	$	5,935.6	$	5,971.1	$	5,462.4	$	(8,243.8	)	$	9,125.3
Liabilities:
Accounts payable	$	5.7	$	45.2	$	105.7	$	(0.5	)	$	156.1
Accrued liabilities	200.0		84.2		143.2		(1.3		)	426.1
Debt	818.7		32.0		2,205.9		—			3,056.6
Deferred income	—		21.9		1.6		—			23.5
Deferred income taxes	78.6		984.9		9.1		0.3			1,072.9
Advances from subsidiaries	458.2		11.5		—		(469.7		)	—
Other liabilities	63.3		13.5		2.2		—			79.0
Total stockholders' equity	4,311.1		4,777.9		2,994.7		(7,772.6		)	4,311.1
	$	5,935.6	$	5,971.1	$	5,462.4	$	(8,243.8	)	$	9,125.3



Balance Sheet
December 31, 2015
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
Assets:
Cash and cash equivalents	$	768.3	$	1.7	$	51.1	$	(35.1	)	$	786.0
Short-term marketable securities	84.9		—		—		—			84.9
Receivables, net of allowance	0.1		196.3		173.5		—			369.9
Income tax receivable	94.9		—		—		—			94.9
Inventory	—		634.1		325.4		(16.4		)	943.1
Property, plant, and equipment, net	37.7		1,597.0		4,204.3		(491.0		)	5,348.0
Investments in and advances to subsidiaries	6,262.9		3,633.1		908.5		(10,804.5		)	—
Restricted cash	—		0.2		160.5		35.1			195.8
Goodwill and other assets	178.8		579.8		304.7		—			1,063.3
	$	7,427.6	$	6,642.2	$	6,128.0	$	(11,311.9	)	$	8,885.9
Liabilities:
Accounts payable	$	9.9	$	62.9	$	144.3	$	(0.3	)	$	216.8
Accrued liabilities	224.9		137.3		168.5		(1.1		)	529.6
Debt	800.6		35.6		2,359.2		—			3,195.4
Deferred income	—		25.4		1.7		—			27.1
Deferred income taxes	31.2		711.3		9.4		0.3			752.2
Advances from subsidiaries	2,212.2		—		—		(2,212.2		)	—
Other liabilities	100.1		13.6		2.4		—			116.1
Total stockholders' equity	4,048.7		5,656.1		3,442.5		(9,098.6		)	4,048.7
	$	7,427.6	$	6,642.2	$	6,128.0	$	(11,311.9	)	$	8,885.9

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Statement of Cash Flows
Year Ended December 31, 2016
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating activities:
Net income	$	343.6		$	308.7		$	106.5		$	(394.1	)	$	364.7
Equity in earnings of subsidiaries, net of taxes	(387.5		)	(91.8		)	—			479.3			—
Other	64.5			482.1			212.3			(33.4		)	725.5
Net cash provided (required) by operating activities - continuing	20.6			699.0			318.8			51.8			1,090.2
Net cash provided by operating activities - discontinued	—			—			—			—			—
Net cash provided (required) by operating activities	20.6			699.0			318.8			51.8			1,090.2
Investing activities:
(Increase) decrease in short-term marketable securities	(149.8		)	—			—			—			(149.8		)
Proceeds from railcar lease fleet sales owned more than one year	—			27.3			10.4			—			37.7
Proceeds from disposition of property and other assets	—			4.1			11.9			—			16.0
Capital expenditures – leasing	—			(798.7		)	(0.4		)	—			(799.1		)
Capital expenditures – manufacturing and other	(18.0		)	(8.6		)	(107.7		)	—			(134.3		)
Acquisitions, net of cash acquired	—			—			—			—			—
(Increase) decrease in investment in partially-owned subsidiaries	—			17.1			—			(17.1		)	—
Divestitures	—			—			—			—			—
Other	—			0.8			6.0			—			6.8
Net cash provided (required) by investing activities - continuing	(167.8		)	(758.0		)	(79.8		)	(17.1		)	(1,022.7		)
Net cash provided by investing activities - discontinued	—			—			—			—			—
Net cash provided (required) by investing activities	(167.8		)	(758.0		)	(79.8		)	(17.1		)	(1,022.7		)
Financing activities:
Proceeds from issuance of common stock, net	—			—			—			—			—
Excess tax benefits from stock-based compensation	1.0			—			—			—			1.0
Payments to retire debt	—			(3.6		)	(158.9		)	—			(162.5		)
Proceeds from issuance of debt	—			—			—			—			—
(Increase) decrease in restricted cash	—			0.2			13.4			4.0			17.6
Shares repurchased	(34.7		)	—			—			—			(34.7		)
Dividends paid to common shareholders	(66.7		)	—			—			—			(66.7		)
Purchase of shares to satisfy employee tax on vested stock	(16.3		)	—			—			—			(16.3		)
Contributions from noncontrolling interest	—			—			—			—			—
Contributions from controlling interest in partially-owned leasing subsidiaries	—			—			—			—			—
Distributions to noncontrolling interest	—			—			(26.4		)	—			(26.4		)
Distributions to controlling interest in partially-owned leasing subsidiaries	—			—			(17.1		)	17.1			—
Change in intercompany financing between entities	33.5			65.9			(47.7		)	(51.7		)	—
Other	—			—			(2.1		)	—			(2.1		)
Net cash provided (required) by financing activities - continuing	(83.2		)	62.5			(238.8		)	(30.6		)	(290.1		)
Net cash provided (required) by financing activities - discontinued	—			—			—			—			—
Net cash provided (required) by financing activities	(83.2		)	62.5			(238.8		)	(30.6		)	(290.1		)
Net increase (decrease) in cash and cash equivalents	(230.4		)	3.5			0.2			4.1			(222.6		)
Cash and cash equivalents at beginning of period	768.3			1.7			51.1			(35.1		)	786.0
Cash and cash equivalents at end of period	$	537.9		$	5.2		$	51.3		$	(31.0	)	$	563.4

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Statement of Cash Flows
Year Ended December 31, 2015
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating activities:
Net income	$	796.5		$	802.2		$	302.5		$	(1,075.2	)	$	826.0
Equity in earnings of subsidiaries, net of taxes	(920.0		)	(217.4		)	—			1,137.4			—
Other	57.8			(33.1		)	146.4			(57.4		)	113.7
Net cash provided (required) by operating activities - continuing	(65.7		)	551.7			448.9			4.8			939.7
Net cash provided by operating activities - discontinued	—			—			—			—			—
Net cash provided (required) by operating activities	(65.7		)	551.7			448.9			4.8			939.7
Investing activities:
(Increase) decrease in short-term marketable securities	(9.9		)	—			—			—			(9.9		)
Proceeds from railcar lease fleet sales owned more than one year	—			290.6			267.2			(43.2		)	514.6
Proceeds from disposition of property and other assets	—			1.9			6.3			—			8.2
Capital expenditures – leasing	—			(821.6		)	(55.4		)	43.2			(833.8		)
Capital expenditures – manufacturing and other	(14.5		)	(39.1		)	(142.4		)	—			(196.0		)
Acquisitions, net of cash acquired	—			—			(46.2		)	—			(46.2		)
(Increase) decrease in investment in partially-owned subsidiaries	—			24.8			—			(24.8		)	—
Divestitures	—			—			51.3			—			51.3
Other	—			0.2			0.3			—			0.5
Net cash provided (required) by investing activities - continuing	(24.4		)	(543.2		)	81.1			(24.8		)	(511.3		)
Net cash provided by investing activities - discontinued	—			—			—			—			—
Net cash provided (required) by investing activities	(24.4		)	(543.2		)	81.1			(24.8		)	(511.3		)
Financing activities:
Proceeds from issuance of common stock, net	0.3			—			—			—			0.3
Excess tax benefits from stock-based compensation	13.3			—			—			—			13.3
Payments to retire debt	—			(3.2		)	(584.0		)	—			(587.2		)
Proceeds from issuance of debt	(1.5		)	—			243.9			—			242.4
(Increase) decrease in restricted cash	—			(0.2		)	43.3			5.2			48.3
Shares repurchased	(115.0		)	—			—			—			(115.0		)
Dividends paid to common shareholders	(64.9		)	—			—			—			(64.9		)
Purchase of shares to satisfy employee tax on vested stock	(27.5		)	—			—			—			(27.5		)
Contributions from noncontrolling interest	—			—			—			—			—
Contributions from controlling interest in partially-owned leasing subsidiaries	—			—			—			—			—
Distributions to noncontrolling interest	—			—			(39.2		)	—			(39.2		)
Distributions to controlling interest in partially-owned leasing subsidiaries	—			—			(24.8		)	24.8			—
Change in intercompany financing between entities	226.0			(14.5		)	(206.7		)	(4.8		)	—
Other	—			—			(0.8		)	—			(0.8		)
Net cash provided (required) by financing activities - continuing	30.7			(17.9		)	(568.3		)	25.2			(530.3		)
Net cash provided (required) by financing activities - discontinued	—			—			—			—			—
Net cash provided (required) by financing activities	30.7			(17.9		)	(568.3		)	25.2			(530.3		)
Net increase (decrease) in cash and cash equivalents	(59.4		)	(9.4		)	(38.3		)	5.2			(101.9		)
Cash and cash equivalents at beginning of period	827.7			11.1			89.4			(40.3		)	887.9
Cash and cash equivalents at end of period	$	768.3		$	1.7		$	51.1		$	(35.1	)	$	786.0

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Statement of Cash Flows
Year Ended December 31, 2014
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating activities:
Net income	$	678.2		$	698.7		$	262.4		$	(930.0	)	$	709.3
Equity in earnings of subsidiaries, net of taxes	(741.7		)	(191.8		)	—			933.5			—
Other	(26.5		)	(99.0		)	240.1			(5.7		)	108.9
Net cash provided (required) by operating activities - continuing	(90.0		)	407.9			502.5			(2.2		)	818.2
Net cash provided by operating activities - discontinued	—			—			1.0			—			1.0
Net cash provided (required) by operating activities	(90.0		)	407.9			503.5			(2.2		)	819.2
Investing activities:
(Increase) decrease in short-term marketable securities	74.7			—			—			—			74.7
Proceeds from railcar lease fleet sales owned more than one year	—			549.2			140.3			(423.7		)	265.8
Proceeds from disposition of property and other assets	0.3			—			22.7			—			23.0
Capital expenditures – leasing	—			(222.8		)	(446.2		)	423.7			(245.3		)
Capital expenditures – manufacturing and other	(8.3		)	(58.3		)	(152.7		)	—			(219.3		)
Acquisitions, net of cash acquired	—			(595.6		)	(118.8		)	—			(714.4		)
(Increase) decrease in investment in partially-owned subsidiaries	—			(4.5		)	—			4.5			—
Divestitures	—			—			—			—			—
Other	0.9			(0.8		)	0.7			—			0.8
Net cash provided (required) by investing activities - continuing	67.6			(332.8		)	(554.0		)	4.5			(814.7		)
Net cash provided by investing activities - discontinued	—			—			—			—			—
Net cash provided (required) by investing activities	67.6			(332.8		)	(554.0		)	4.5			(814.7		)
Financing activities:
Proceeds from issuance of common stock, net	0.6			—			—			—			0.6
Excess tax benefits from stock-based compensation	24.4			—			—			—			24.4
Payments to retire debt	(0.5		)	(3.1		)	(183.0		)	—			(186.6		)
Proceeds from issuance of debt	395.7			—			331.6			—			727.3
(Increase) decrease in restricted cash	—			—			13.9			(12.9		)	1.0
Shares repurchased	(36.5		)	—			—			—			(36.5		)
Dividends paid to common shareholders	(54.4		)	—			—			—			(54.4		)
Purchase of shares to satisfy employee tax on vested stock	(38.3		)	—			—			—			(38.3		)
Contributions from noncontrolling interest	—			—			49.6			—			49.6
Contributions from controlling interest in partially-owned leasing subsidiaries	—			—			4.5			(4.5		)	—
Distributions to noncontrolling interest	—			—			(28.2		)	—			(28.2		)
Distributions to controlling interest in partially-owned leasing subsidiaries	—			—			—			—			—
Change in intercompany financing between entities	149.4			(62.3		)	(89.3		)	2.2			—
Other	—			(0.7		)	(1.8		)	—			(2.5		)
Net cash provided (required) by financing activities - continuing	440.4			(66.1		)	97.3			(15.2		)	456.4
Net cash provided (required) by financing activities - discontinued	—			—			(1.5		)	—			(1.5		)
Net cash provided (required) by financing activities	440.4			(66.1		)	95.8			(15.2		)	454.9
Net increase (decrease) in cash and cash equivalents	418.0			9.0			45.3			(12.9		)	459.4
Cash and cash equivalents at beginning of period	409.7			2.1			44.1			(27.4		)	428.5
Cash and cash equivalents at end of period	$	827.7		$	11.1		$	89.4		$	(40.3	)	$	887.9

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Note 20. Selected Quarterly Financial Data (Unaudited)



	Three Months Ended
	March 31, 2016		June 30, 2016		September 30, 2016		December 31, 2016
	(in millions except per share data)
Revenues:
Manufacturing	$	1,010.1	$	888.8	$	938.5	$	926.0
Leasing	177.8		296.1		173.2		177.8
	1,187.9		1,184.9		1,111.7		1,103.8
Operating costs:
Costs of revenues:
Manufacturing	793.9		719.1		745.4		761.2
Leasing	96.0		178.6		81.9		80.0
	889.9		897.7		827.3		841.2
Selling, engineering, and administrative expenses	96.5		106.7		102.3		101.9
Gains on disposition of property	1.9		11.1		1.5		2.9
Operating profit	203.4		191.6		183.6		163.6
Net income	102.1		98.8		89.6		74.2
Net income attributable to Trinity Industries, Inc.	97.2		94.6		84.2		67.6
Net income attributable to Trinity Industries, Inc. per common share:
Basic	$	0.64	$	0.62	$	0.55	$	0.44

Diluted	$	0.64	$	0.62	$	0.55	$	0.44



	Three Months Ended
	March 31, 2015		June 30, 2015		September 30, 2015		December 31, 2015
	(in millions except per share data)
Revenues:
Manufacturing	$	1,382.5	$	1,445.4	$	1,295.6	$	1,177.6
Leasing	244.2		231.4		246.6		369.4
	1,626.7		1,676.8		1,542.2		1,547.0
Operating costs:
Costs of revenues:
Manufacturing	1,084.5		1,101.8		976.0		881.6
Leasing	126.6		117.8		133.4		234.5
	1,211.1		1,219.6		1,109.4		1,116.1
Selling, engineering, and administrative expenses	98.3		114.4		126.6		137.1
Gains on disposition of property	15.8		40.1		58.7		64.2
Operating profit	333.1		382.9		364.9		358.0
Net income	189.0		220.8		212.2		204.0
Net income attributable to Trinity Industries, Inc.	180.2		212.0		204.3		200.0
Net income attributable to Trinity Industries, Inc. per common share:
Basic	$	1.15	$	1.36	$	1.32	$	1.30

Diluted	$	1.13	$	1.33	$	1.31	$	1.30

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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 disclosure controls and procedures designed to ensure that it is able to collect and record 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 that 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 1) 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 and 2) accumulate and communicate this information to the Company's management, including its Chief Executive and Chief Financial Officers, to allow timely decisions regarding this disclosure.

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.

During the three months ended December 31, 2016, 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 assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2016 . In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (the 2013 Framework) (COSO) in Internal Control - Integrated Framework. Based on our assessment, we believe that, as of December 31, 2016 , 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, 2016 , 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, 2016, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 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, 2016, 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, 2016 and 2015, 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, 2016 of Trinity Industries, Inc. and Subsidiaries and our report dated February 17, 2017 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Dallas, Texas

February 17, 2017

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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 2017 Annual Meeting of Stockholders (the “ 2017 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 2017 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 2017 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 2017 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 2017 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 2017 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 2017 Proxy Statement.

Table of Contents

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 2017 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, 2016 .

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	60,793		$	8.12
Restricted stock units and performance units	2,740,840	1	$	—
	2,801,633				2,123,136
Equity compensation plans not approved by security holders	—	2			—
Total	2,801,633				2,123,136

____________

¹ Includes 1,230,861 shares of common stock issuable upon the vesting and conversion of restricted stock units and 1,509,979 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 stock units with a fair market value equal to the value of the fees deferred, and such 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, 2016 , there were 224,589 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 2017 Proxy Statement, under the caption “Executive Compensation - Compensation Discussion and Analysis - Components of Compensation - Post-employment Benefits.” At December 31, 2016 , there were 86,873 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 2017 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 2017 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 2016 and 2015 ” in the Company's 2017 Proxy Statement.

Table of Contents

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.

Item 16. Form 10-K Summary.

None

100

Table of Contents

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),


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


15)	Registration Statement (Form S-3, No. 333-198744),


16)	Registration Statement (Form S-8, No. 333-203876), and


17)	Registration Statement (Form S-8, No. 333-215067);

of our reports dated February 17, 2017 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, 2016 .

/s/ ERNST & YOUNG LLP

Dallas, Texas

February 17, 2017

101

Table of Contents

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 17, 2017

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/ Douglas L. Rock
John L. Adams	Douglas L. Rock
Director	Director
Dated: February 17, 2017	Dated: February 17, 2017

/s/ Rhys J. Best	/s/ Dunia A. Shive
Rhys J. Best	Dunia A. Shive
Director	Director
Dated: February 17, 2017	Dated: February 17, 2017

/s/ David W. Biegler
David W. Biegler	Principal Executive Officer:
Director
Dated: February 17, 2017	/s/ Timothy R. Wallace
	Timothy R. Wallace
/s/ Antonio Carrillo	Chairman, Chief Executive Officer, President, and Director
Antonio Carrillo	Dated: February 17, 2017
Director
Dated: February 17, 2017
	Principal Financial Officer:
/s/ Leldon E. Echols
Leldon E. Echols	/s/ James E. Perry
Director	James E. Perry
Dated: February 17, 2017	Senior Vice President and Chief Financial Officer
	Dated: February 17, 2017
/s/ Ronald J. Gafford
Ronald J. Gafford
Director	Principal Accounting Officer:
Dated: February 17, 2017
	/s/ Mary E. Henderson
/s/ Adrián Lajous	Mary E. Henderson
Adrián Lajous	Vice President and Chief Accounting Officer
Director	Dated: February 17, 2017
Dated: February 17, 2017

/s/ Charles W. Matthews
Charles W. Matthews
Director
Dated: February 17, 2017

102

Table of Contents

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

NO.		DESCRIPTION
(2.1)		Purchase Agreement, dated as of June 26, 2014, by and among McKinley 2014 Acquisition LLC, Thomas & Betts Corporation and Thomas & Betts International, LLC (incorporated by reference to Exhibit 2.1 to our Form 8-K filed June 30, 2014).
(3.1)		Amended and Restated Certificate of Incorporation of Trinity Industries, Inc., effective May 11, 2015(incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015).
(3.2)		Amended and Restated By-Laws of Trinity Industries, Inc., effective May 4, 2015 (incorporated by reference to Exhibit 3.1 to our Form 8-K filed May 8, 2015).
(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) (filed herewith).
(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 (filed herewith).
(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)		Indenture dated September 25, 2014, by and among Trinity Industries, Inc., certain of its subsidiaries, as guarantors, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to our Form 8-K filed September 25, 2014).
(4.3.1)		First Supplemental Indenture dated September 25, 2014, by and among Trinity Industries, Inc., certain of its subsidiaries, as guarantors, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to our Form 8-K filed September 25, 2014).
(4.3.2)		Second Supplemental Indenture dated March 24, 2015, by and among Trinity Industries, Inc., certain of its subsidiaries, as guarantors, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015).
(4.3.3)		Form of 4.550% Senior Note due 2024 (included in Exhibit 4.3.1 and incorporated by reference to Exhibit 4.3 to our Form 8-K filed September 25, 2014).
(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 (incorporated by reference to Exhibit 10.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(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, 2015).*
(10.2.2)		Amendment No. 3 to the Trinity Industries, Inc. Directors' Retirement Plan (filed herewith).*
(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 (filed herewith).*
(10.3.2)		Amendment No. 2 to the 1993 Stock Option and Incentive Plan (filed herewith).*
(10.3.3)		Amendment No. 3 to the 1993 Stock Option and Incentive Plan (filed herewith).*
(10.3.4)		Amendment No. 4 to the 1993 Stock Option and Incentive Plan (filed herewith).*
(10.3.5)		Amendment No. 5 to the 1993 Stock Option and Incentive Plan (filed herewith).*
(10.4)		Supplemental Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates as restated effective January 1, 2005 (incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(10.5)		Trust Agreement for Trinity Industries, Inc. Deferred Compensation Trust dated December 15, 2011 (filed herewith).*
(10.6)		Trust Agreement for Trinity Industries, Inc. Supplemental Profit Sharing and Directors Fee Trust dated December 15, 2011 (filed herewith).*
(10.7)		Supplemental Retirement Plan as Amended and Restated effective January 1, 2009 (incorporated by reference to Exhibit 10.7 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(10.7.1)		Amendment No. 1 to the Supplemental Retirement Plan as Amended and Restated effective January 1, 2009 (incorporated by reference to Exhibit 10.7.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*

103

Table of Contents

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

NO.		DESCRIPTION
(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).*
(10.8.1)		Amendment to Trinity Industries, Inc. Deferred Plan for Director Fees dated December 7, 2005 (filed herewith).*
(10.8.2)		Trinity Industries, Inc. 2005 Deferred Plan for Director Fees (filed herewith).*
(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, 2015).*
(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, 2015).*
(10.9.3)		Amendment No. 3 to the Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (filed herewith).*
(10.9.4)		Amendment No. 4 to the Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (filed herewith).*
(10.10)		Third Amended and Restated Trinity Industries, Inc. 2004 Stock Option and Incentive Plan (incorporated by reference to Exhibit 99.1 of Registration Statement No. 333-203876 filed May 5, 2015).*
(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 (incorporated by reference to Exhibit 10.10.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(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 (incorporated by reference to Exhibit 10.10.2 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(10.10.3)		Form of Restricted Stock Grant Agreement for grants issued prior to 2008 (incorporated by reference to Exhibit 10.10.3 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(10.10.3.1)		Form of Restricted Stock Grant Agreement for grants issued commencing 2008 (incorporated by reference to Exhibit 10.10.3.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(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, 2015).*
(10.10.5)		Form of Restricted Stock Unit Agreement for Non-Employee Directors for grants issued prior to 2008 (incorporated by reference to Exhibit 10.10.5 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(10.10.5.1)		Form of Restricted Stock Unit Agreement for Non-Employee Directors for grants issued commencing 2008 (incorporated by reference to Exhibit 10.10.5.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(10.10.6)		Form of Performance Restricted Stock Unit Grant Agreement for grants issued commencing 2011 (filed herewith).*
(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 (incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K for the annual period ended December 31, 2013).*
(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)		Credit Agreement, dated as of May 20, 2015, by and among Trinity Industries, Inc., as Borrower, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent and Wells Fargo Bank, N.A., as Documentation Agent (incorporated by reference to Exhibit 10.1 to our Form 8-K filed May 22, 2015).
(10.14.1)		First Amendment to Credit Agreement, dated as of January 28, 2016, by and among Trinity Industries, Inc., as Borrower, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent and Wells Fargo Bank, N.A., as Documentation Agent (incorporated by reference to Exhibit 10.14.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2015).
(10.15)		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).

104

Table of Contents

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

NO.		DESCRIPTION
(10.15.1)		Amendment No. 1 to the Third Amended and Restated Warehouse Loan Agreement, dated as of April 8, 2015, among Trinity Industries Leasing Company, Trinity Rail Leasing Warehouse Trust, the banks and other lending institutions from time time party thereto, 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 April 9, 2015).
(10.16)		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, 2014).
(10.16.1)		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, 2014).
(10.17)		Perquisite Plan 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, 2014).*
(10.18)		Purchase and Contribution Agreement, dated May 18, 2006, among Trinity Industries Leasing Company, Trinity Leasing Trust II, and Trinity Rail Leasing V L.P. (filed herewith).
(10.18.1)		Master Indenture dated May 24, 2006, between Trinity Rail Leasing V L.P. and Wilmington Trust Company, as indenture trustee (filed herewith).
(10.19)		Board Compensation Summary Sheet (incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K for the annual period ended December 31, 2014).*
(10.20)		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 10.20 to our Annual Report on Form 10-K for the annual period ended December 31, 2015).
(10.20.1)		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 10.20.1 to our Annual Report on Form 10-K for the annual period ended December 31, 2015).
(10.21)		Purchase and Contribution Agreement dated July 6, 2011, among TRIP Rail Leasing, LLC, Trinity Industries Leasing Company, TRIP Rail Master Funding LLC (filed herewith).
(10.21.1)		Master Indenture dated July 6, 2011, among TRIP Rail Master Funding LLC and Wilmington Trust Company, as indenture trustee (filed herewith).
(10.22)		Form of Indemnification Agreement between Trinity Industries, Inc. and certain directors and executive officers (filed herewith).
(10.23)		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).
(10.23.1)		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 101 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 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(32.2)		Certification pursuant to 18 U.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.

105

Exhibit 4.1

TRINITY INDUSTRIES, INC.,

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS TRUSTEE

3 ⁷ / ₈ % Convertible Subordinated Notes due 2036

INDENTURE

Dated as of June 7, 2006

TABLE OF CONTENTS




		Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1.	Definitions		1
SECTION 1.2.	Other Definitions		10
SECTION 1.3.	Incorporation by Reference of Trust Indenture Act		11
SECTION 1.4.	Rules of Construction		12

ARTICLE II
THE SECURITIES
SECTION 2.1.	Title and Terms		12
SECTION 2.2.	Form of Securities		14
SECTION 2.3.	Legends		15
SECTION 2.4.	Execution and Authentication		16
SECTION 2.5.	Registrar and Paying Agent		17
SECTION 2.6.	Paying Agent To Hold Money in Trust		18
SECTION 2.7.	Securityholder Lists		18
SECTION 2.8.	General Provisions Relating to Transfer and Exchange		18
SECTION 2.9.	Book-Entry Provisions for the Global Securities		19
SECTION 2.10.	Mutilated, Destroyed, Lost or Stolen Securities		21
SECTION 2.11.	Outstanding Securities		22
SECTION 2.12.	Temporary Securities		22
SECTION 2.13.	Cancellation		23
SECTION 2.14.	Payment of Interest; Defaulted Interest		23
SECTION 2.15.	Computation of Interest		24
SECTION 2.16.	CUSIP and ISIN Numbers		24

ARTICLE III
COVENANTS
SECTION 3.1.	Payment of Securities		25
SECTION 3.2.	Maintenance of Office or Agency		25
SECTION 3.3.	Corporate Existence		26
SECTION 3.4.	Payment of Taxes and Other Claims		26
SECTION 3.5.	Payments for Consent		26
SECTION 3.6.	Compliance Certificate		27
SECTION 3.7.	Further Instruments and Acts		27
SECTION 3.8.	Statement by Officers as to Default		27
SECTION 3.9.	Tax Treatment		27
SECTION 3.10.	Delivery of Certain Information		28

ARTICLE IV
SUCCESSOR COMPANY
SECTION 4.1.	Consolidation, Merger and Sale of Assets		28



		Page
ARTICLE V
REDEMPTION OF SECURITIES
SECTION 5.1.	Optional Redemption		29
SECTION 5.2.	Applicability of Article		29
SECTION 5.3.	Election to Redeem; Notice to Trustee		29
SECTION 5.4.	Selection by Trustee of Securities to Be Redeemed		29
SECTION 5.5.	Notice of Redemption		30
SECTION 5.6.	Deposit of Redemption Price		31
SECTION 5.7.	Securities Payable on Redemption Date		31
SECTION 5.8.	Securities Redeemed in Part		32

ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1.	Events of Default		32
SECTION 6.2.	Acceleration		34
SECTION 6.3.	Other Remedies		35
SECTION 6.4.	Waiver of Past Defaults		35
SECTION 6.5.	Control by Majority		35
SECTION 6.6.	Limitation on Suits		35
SECTION 6.7.	Rights of Holders to Receive Payment		36
SECTION 6.8.	Collection Suit by Trustee		36
SECTION 6.9.	Trustee May File Proofs of Claim		36
SECTION 6.10.	Priorities		37
SECTION 6.11.	Undertaking for Costs		37

ARTICLE VII
TRUSTEE
SECTION 7.1.	Duties of Trustee		37
SECTION 7.2.	Rights of Trustee		39
SECTION 7.3.	Individual Rights of Trustee		40
SECTION 7.4.	Trustee’s Disclaimer		40
SECTION 7.5.	Notice of Defaults		40
SECTION 7.6.	Reports by Trustee to Holders		41
SECTION 7.7.	Compensation and Indemnity		41
SECTION 7.8.	Replacement of Trustee		42
SECTION 7.9.	Successor Trustee by Merger		42
SECTION 7.10.	Eligibility; Disqualification		43
SECTION 7.11.	Preferential Collection of Claims Against Company		43
SECTION 7.12.	Trustee’s Application for Instruction from the Company		43

ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.1.	Discharge of Liability on Securities		43
SECTION 8.2.	Reinstatement		44
SECTION 8.3.	Officers’ Certificate; Opinion of Counsel		45

ARTICLE IX
AMENDMENTS
SECTION 9.1.	Without Consent of Holders		45




		Page
SECTION 9.2.	With Consent of Holders		46
SECTION 9.3.	Compliance with Trust Indenture Act		47
SECTION 9.4.	Revocation and Effect of Consents and Waivers		47
SECTION 9.5.	Notation on or Exchange of Securities		47
SECTION 9.6.	Trustee To Sign Amendments		48

ARTICLE X
SUBORDINATION
SECTION 10.1.	Agreement of Subordination		48
SECTION 10.2.	Payments to Holders		48
SECTION 10.3.	Subrogation of Securities		51
SECTION 10.4.	Authorization to Effect Subordination		52
SECTION 10.5.	Notice to Trustee		52
SECTION 10.6.	Trustee’s Relation to Senior Debt		53
SECTION 10.7.	No Impairment of Subordination		53
SECTION 10.8.	Certain Conversions Not Deemed Payment		53
SECTION 10.9.	Article Applicable to Payment Agents		54
SECTION 10.10.	Senior Debt Entitled to Rely		54

ARTICLE XI
PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE; REPURCHASE AT THE OPTION OF HOLDERS
SECTION 11.1.	Purchase at the Option of the Holder Upon a Fundamental Change		54
SECTION 11.2.	Purchase of Securities at the Option of the Holder		56
SECTION 11.3.	Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change and Purchase of Securities at the Option of the Holder		58

ARTICLE XII
CONVERSION
SECTION 12.1.	Conversion of Securities		61
SECTION 12.2.	Adjustments to Conversion Rate		65
SECTION 12.3.	Effect of Reclassification, Consolidation, Merger or Sale		72
SECTION 12.4.	Responsibility of Trustee		73
SECTION 12.5.	Notice to Holders Prior to Certain Actions		74
SECTION 12.6.	Stockholder Rights Plan		75

ARTICLE XIII
MISCELLANEOUS
SECTION 13.1.	Trust Indenture Act Controls		75
SECTION 13.2.	Notices		75
SECTION 13.3.	Communication by Holders with other Holders		77
SECTION 13.4.	Certificate and Opinion as to Conditions Precedent		77
SECTION 13.5.	Statements Required in Certificate or Opinion		77
SECTION 13.6.	When Securities Disregarded		77
SECTION 13.7.	Rules by Trustee, Paying Agent and Registrar		78
SECTION 13.8.	Legal Holidays		78
SECTION 13.9.	GOVERNING LAW; WAIVER OF JURY TRIAL		78
SECTION 13.10.	No Recourse Against Others		78

iii




		Page
SECTION 13.11.	Successors		79
SECTION 13.12.	Multiple Originals		79
SECTION 13.13.	Table of Contents; Headings		79
SECTION 13.14.	Force Majeure		79
SECTION 13.15.	Severability Clause		79




EXHIBIT A		Form of the Security
EXHIBIT B		Form of Indenture Supplements

CROSS-REFERENCE TABLE




TIA		Indenture
Section		Section
310	(a)(1)		7.10
	(a)(2)		7.10
	(a)(3)		N.A.
	(a)(4)		N.A.
	(a)(5)		7.10
	(b)		7.8; 7.10
	(c)		N.A.
311	(a)		7.11
	(b)		7.11
	(c)		N.A.
312	(a)		2.7
	(b)		13.3
	(c)		13.3
313	(a)		7.6
	(b)(1)		N.A.
	(b)(2)		7.6
	(c)		7.6
	(d)		7.6
314	(a)		3.6; 3.8, 3.10, 13.5
	(b)		N.A.
	(c)(1)		13.4
	(c)(2)		13.4
	(c)(3)		N.A.
	(d)		N.A.
	(e)		13.5
	(f)		N.A.
315	(a)		7.1
	(b)		7.5; 13.2
	(c)		7.1
	(d)		7.1
	(e)		6.11
316	(a)(last sentence)		13.6
	(a)(1)(A)		6.5(a)
	(a)(1)(B)		6.4
	(a)(2)		N.A.
	(b)		6.7
	(c)		6.5(b)
317	(a)(1)		6.8
	(a)(2)		6.9
	(b)		2.6
318	(a)		13.1
	(b)		N.A.
	(c)		13.1
	N.A. means Not Applicable.

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

INDENTURE dated as of June 7, 2006, among TRINITY INDUSTRIES, INC., a Delaware corporation (the “ Company ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “ Trustee ”), as Trustee.

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Company’s

3 ⁷ / ₈ % Convertible Subordinated Notes due 2036 (the “ Securities ”) on the date hereof and the guarantees thereof by certain of the Company’s subsidiaries.

ARTICLE I

Definitions and Incorporation by Reference

SECTION 1.1. Definitions .

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling, 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; provided, however , that the existence of a management contract by the Company or an Affiliate of the Company to manage another entity shall not be deemed to be control.

“ Applicable Five Day Trading Period ” means, with respect to any interest period in which Contingent Interest may be payable, the five Trading Days ending on the second Trading Day immediately preceding the first day of such interest period.

“ Attributable Debt ” in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Securities, compounded semi-annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended).

“ Average Securities Price ” means, as of any date of determination, the average of the secondary market bid quotations per $1,000 principal amount of Securities obtained by the Bid Agent for $10,000,000 principal amount of Securities at approximately 4:00 p.m. (New York City time) on such determination date from three unaffiliated recognized securities dealers in The City of New York (none of which shall be an Affiliate of the Company) selected by the Company; provided, however, if (a) at least three such bids are not obtained by the Bid Agent or (b) in the Company’s reasonable judgment, the bid quotations are not indicative of the secondary market value of the Securities as of such determination date, then the Average Securities Price for such determination date shall equal (i) the Conversion Rate in effect as of such determination date multiplied by (ii) the average Last Reported Sale Price for the five Trading Days ending on such determination date, appropriately adjusted to take into account the occurrence, during the period commencing on the first of such trading days during such five Trading Day period and ending on such determination date, of any event described in Section 12.2 .

“ Bankruptcy Law ” means Title 11 of the United States Code, as amended from time to time, or any similar federal or state law for the relief of debtors.

“ Beneficial Owner ” shall mean any person who is considered a beneficial owner of a security in accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act.

“ Bid Agent ” means a bid agent appointed by the Company to act in such capacity for the purposes of determining the Securities Price; provided that such agent shall not be the Company or an Affiliate of the Company. The Bid Agent appointed by the Company shall initially be the Trustee.

“ Board of Directors ” means, as to any Person, the board of directors of such Person or any duly authorized committee thereof.

“ Board Resolution ” means a copy of a resolution certified by the Secretary or Assistant Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“ Business Day ” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close.

“ Capital Stock ” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“ Capitalized Lease Obligations ” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Debt represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty.

“ Cash Settlement Averaging Period ” means, with respect to any Securities, the 20 consecutive Trading-Day period beginning on and including the second Trading Day after a Holder delivers a conversion notice to the Conversion Agent.

“ Clearstream ” means Clearstream Banking, société anonyme, or any successor securities clearing agency.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Common Equity ” of any Person means capital stock of such Person that is generally entitled to (1) vote in the election of directors of such Person or (2) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

“ Common Stock ” means the Company’s Common Stock, par value $1.00 per share.

“ Company ” means Trinity Industries, Inc. or its successors and assigns.

“ Continuing Director ” means a director who either was a member of the Board of Directors of the Company on June 1, 2006 or who becomes a member of the Board of Directors of the Company subsequent to that date and whose election, appointment or nomination for election by stockholders of the Company, is duly approved by a majority of the Continuing Directors on the Board of Directors of the Company at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Company on behalf of the entire Board of Directors of the Company in which such individual is named as nominee for director.

“ Conversion Agent ” means the office or agency appointed by the Company where Securities may be presented for conversion. The Conversion Agent appointed by the Company shall initially be the Trustee.

“ Conversion Price ” means the principal amount of Securities that can be exchanged for one share of Common Stock (initially $78.34 and thereafter computed by dividing $1,000 by the then applicable Conversion Rate).

“ Conversion Rate ” means the number of shares of Common Stock issuable in respect of $1,000 principal amount of Securities, initially 12.7648 shares, subject to adjustments as set forth herein.

“ Custodian ” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

“ Debt ” means, with respect to any Person on any date of determination (without duplication):

(i) any indebtedness or obligation, (1) evidenced by a credit or loan agreement, note, bond, debenture or similar written obligation or instrument (whether or not the recourse of the lender is to the whole of the assets of such Person or to only a portion thereof) or (2) for money borrowed,

(ii) all Capitalized Lease Obligations and Attributable Debt of such Person,

(iii) all obligations under Interest Rate Agreements, Exchange Rate Contracts, treasury management agreements or similar agreements or arrangements,

(iv) the principal component of all obligations and liabilities (contingent or otherwise) of such Person with respect to letters of credit, bankers’ acceptances and similar facilities (including reimbursement obligations with respect to the foregoing),

(v) the principal component of all obligations and liabilities (contingent or otherwise) of such Person issued or assumed as the deferred purchase price of any property or

services (but excluding trade accounts payable and accrued liabilities arising in the ordinary course of business),

(vi) obligations of the type described in clauses (i) through (v) above of any third party and all dividends of any third party payment of which, in either case, such Person has assumed or guaranteed, or for which the Person first referenced above is responsible or liable, jointly or severally, as obligor, guarantor or otherwise, or that are secured by a lien on such Person’s property and

(vii) any and all renewals, extensions, modifications, replacements, restatements and refundings of, or any indebtedness or obligation issued in exchange for, any indebtedness, obligation or liability of the kinds described in clauses (i) through (vi).

The amount of any Debt of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date. The amount of any Debt outstanding as of any date shall be the accreted value thereof, in the case of any Debt issued with original issue discount. The amount of any Indebtedness outstanding as of any date with respect to any Exchange Rate Contract or Interest Rate Agreement shall be the termination value thereof. Debt shall not include liabilities for taxes of any kind.

“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“ Definitive Securities ” mean certificated Securities.

“ Designated Senior Debt ” means, with respect to the Company, obligations under any Senior Debt in which the instrument creating or evidencing such Senior Debt or the assumption or guarantee thereof (or related agreements or documents to which the Company is a party) expressly provides that such Senior Debt shall be “Designated Senior Debt” for purposes of this Indenture. The instrument, agreement or other document evidencing any Designated Senior Debt may place limitations and conditions on the right of such Senior Debt to exercise the rights of Designated Senior Debt.

“ DTC ” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Company.

“ Euroclear ” means Euroclear Bank S.A./N.V. or any successor securities clearing agency.

“ Exchange ” means initially the New York Stock Exchange and from time to time thereafter the national securities exchange on which the Common Stock is primarily traded.

“ Exchange Rate Contract ” means, with respect to any Person, any currency swap agreement, forward exchange rate agreement, foreign currency future or option, exchange rate collar agreement, exchange rate insurance or other agreement or arrangement, or

combination thereof, the principal purpose of which is to provide protection against fluctuations in currency exchange rates. An Exchange Rate Contract may also include an Interest Rate Agreement.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Fair Market Value ” means the amount that a willing buyer would pay a willing seller in an arm’s length transaction.

“ Fiscal Year ” means the fiscal year of the Company ending on December 31 of each year, or as otherwise determined by the Board of Directors.

A “ Fundamental Change ” shall be deemed to have occurred at such time after the original issuance of the Securities as any of the following occurs:



(1)		any “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, any Subsidiary of the Company or any employee benefit plan of the Company or any such Subsidiary, files a Schedule TO or any other schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate Beneficial Owner of Common Equity of the Company representing more than 50% of the voting power of the Company’s Common Equity;

(2)		consummation of any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other transfer (in one transaction or a series of transactions) of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Subsidiaries; provided, however, that a transaction where the holders of more than 50% of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee immediately after such event shall not be a Fundamental Change;

(3)		Continuing Directors cease to constitute at least a majority of the Company’s Board of Directors;

(4)		the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or

(5)		the Common Stock ceases to be listed on a national securities exchange or quoted on the Nasdaq National Market or another established automated over-the-counter trading market in the United States;

provided, however, that a Fundamental Change shall not be deemed to have occurred if at least 90% of the consideration, in the transaction or transactions constituting the Fundamental Change consists of shares of common stock with full voting rights traded on a national securities exchange or quoted on the Nasdaq National Market or which shall be so traded or quoted when issued or exchanged in connection with such Fundamental Change (such securities being referred to as “ Publicly Traded Securities ”) and as a result of such transaction or transactions the Securities become convertible into such Publicly Traded Securities (excluding cash payments for fractional shares).

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession as in effect from time to time.

“ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:



(1)		to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or

(2)		entered into for purposes of assuring in any other manner the obligee of such Debt of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“ Holder ” or “ Securityholder ” means the Person in whose name a Security is registered in the Securities Register.

“ Incur ” means issue, create, assume, Guarantee, incur or otherwise become liable for; and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing.

“ Indenture ” means this Indenture, as amended or supplemented from time to time.

“ Interest Rate Agreement ” means, with respect to any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement the principal purpose of which is to protect the party indicated therein against fluctuations in interest rates.

“ Issue Date ” means June 7, 2006.

“ Last Reported Sale Price ” of the Common Stock on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) on that date as reported in the composite transactions for the principal U.S. securities exchange on which the Common Stock is traded or, if the Common Stock is not listed on a U.S. national or regional securities exchange, as reported by the Nasdaq National Market.

If the Common Stock is not listed for trading on a U.S. national or regional securities exchange and not reported by the Nasdaq National Market on the relevant date, the Last Reported Sale Price shall be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization.

If the Common Stock is not so quoted, the Last Reported Sale Price shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

“ Market Disruption Event ” means (i) a failure by the Exchange to open for trading during its regular trading session or (ii) the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any trading day for the Common Stock of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.

“ Moody’s ” means Moody’s Investors Service, Inc., or, if Moody’s Investors Service, Inc. shall cease rating debt securities having a maturity at original issuance of at least one year and such ratings business shall have been transferred to a successor Person, such successor Person; provided , however , that if there is no successor Person, then “Moody’s” shall mean any other nationally recognized rating agency, other than S&P, that rates debt securities having a maturity at original issuance of at least one year and that shall have been designated by the Company.

“ Non-Recourse Debt ” means Debt or that portion of Debt (i) as to which neither the Company nor its Subsidiaries (A) provides credit support (including any undertaking, agreement or instrument which would constitute Debt), (B) is directly or indirectly liable or (C) constitute the lender and (ii) in respect of which a default would not permit (upon notice, lapse of time or both) any holder of any other Debt of the Company or its Subsidiaries to declare a default on such other Debt or cause a payment thereof to be accelerated or payable prior to its Stated Maturity.

“ Officer ” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, Controller or the Secretary of the Company.

“ Officers’ Certificate ” means a certificate signed by any Officers or attorneys-in-fact or by an Assistant Treasurer or an Assistant Secretary of the Company, as applicable.

“ Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

“ Preferred Stock ”, as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.

“ Prospectus ” means the prospectus, dated June 1, 2006, relating to the offering by the Company of $550 million of the 3 ⁷ / ₈ % Convertible Subordinated Notes due 2036.

“ Publicly Traded Securities ” has the meaning provided in the definition of Fundamental Change in this Section 1.1 .

“ Purchase Price ” has the meaning provided in paragraph 7 of the Securities.

“ Redemption Date ” means, with respect to any redemption of Securities, the date of redemption with respect thereto.

“ Regular Record Date ” for the interest on the Securities (including Contingent Interest, if any), means May 15 (whether or not a Business Day) next preceding an interest payment date on June 1 and November 15 (whether or not a Business Day) next preceding an interest payment date on December 1.

“ Representative ” means the (i) indenture trustee or other trustee, agent or representative for any Senior Debt or (ii) with respect to any Senior Debt that does not have any such trustee, agent or other representative, (1) in the case of such Senior Debt issued pursuant to an agreement providing for voting arrangements as among the holders or owners of such Senior Debt, any holder or owner of such Senior Debt acting with the consent of the required Persons necessary to bind such holders or owners of such Senior Debt and (2) in the case of all other such Senior Debt, the holder or owner of such Senior Debt.

“ S&P ” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc., or, if Standard & Poor’s Ratings Service shall cease rating debt securities having a maturity at original issuance of at least one year and such ratings business shall have been transferred to a successor Person, such successor Person; provided , however , that if there is no successor Person, then “S&P” shall mean any other nationally recognized rating agency, other than Moody’s, that rates debt securities having a maturity at original issuance of at least one year and that shall have been designated by the Company.

“ Sale and Lease-Back Transaction” means any arrangement with any Person providing for the leasing by the Company or its Subsidiaries of any property or assets (other than

any such arrangement involving (i) a lease for a term, including renewal rights, of not more than 36 months, (ii) a lease of property within 18 months from the acquisition or, in the case of the construction, alteration or improvement of property, the later of the completion of the construction, alteration or improvement of such property or the commencement of commercial operation of the property, or (iii) leases between or among the Company and a Subsidiary or Subsidiaries), which property or asset has been or is to be sold or transferred by the Company or a Subsidiary to such Person.

“ SEC ” means the United States Securities and Exchange Commission.

“ Securities ” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

“ Securities Custodian ” means the custodian with respect to the Global Security (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee.

“ Securities Register ” means the register of Securities, maintained by the Registrar, pursuant to Section 2.5 .

“ Senior Debt ” means, with respect to the Company, the principal of (and premium, if any) and interest (including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding) on, and all fees and other amounts payable in connection with, any Debt of the Company, whether absolute or contingent, secured or unsecured, due or to become due, outstanding on the date of this Indenture or thereafter created, incurred, assumed or guaranteed by the Company. Notwithstanding the foregoing, the term Senior Debt shall not include (i) the Securities, (ii) any Indebtedness, created, evidenced, assumed or guaranteed by an instrument that expressly provides that such Indebtedness shall not be senior in right of payment to the Securities or expressly provides that such Indebtedness is “ pari passu ” or “junior” to the Securities, (iii) any Indebtedness of the Company to any Subsidiary of the Company or (iv) any Indebtedness of or amounts owed by the Company for trade payables or otherwise for goods or materials purchased or services obtained in the ordinary course of business.

“ Significant Subsidiary ” means any Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

“ Stock Price ” means the price per share of Common Stock paid in connection with a Fundamental Change, which shall be equal to (i) if holders of Common Stock receive only cash in such corporate transaction, the cash amount paid per share of Common Stock and (ii) in

all other cases, the average of the Last Reported Sale Prices of Common Stock over the five Trading Day period ending on the Trading Day preceding the Effective Date.

“ Subsidiary ” of the Company means (i) a corporation a majority of whose Capital Stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by one or more Subsidiaries of the Company or (ii) any other Person (other than a corporation) in which the Company, one or more Subsidiaries of the Company or the Company and one or more Subsidiaries of the Company, directly or indirectly, at the date of determination thereof, has greater than a 50% ownership interest.

“ TIA ” or “ Trust Indenture Act ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as in effect on the date of this Indenture, except as provided in Section 9.3 .

“ Trading Day ” means a day during which (i) trading in the Common Stock generally occurs, (ii) there is no Market Disruption Event and (iii) a closing sale price for the Common Stock is provided on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then traded.

“ Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“ Trust Officer ” shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

SECTION 1.2. Other Definitions .



	Defined in
Term	Section
“ Additional Shares ”	12.2	(f)
“ Adjustment Event ”	12.2	(k)
“ Agent ”	3.4
“ Agent Member ”	2.9
“ Authenticating Agent ”	2.4
“ Cash Percentage ”	12.1	(e)
“ Cash Percentage Notice ”	12.1	(e)
“ Certificate of Destruction ”	2.13
“ Company Notice ”	11.3	(a)




	Defined in
Term	Section
“ Company Notice Date ”	11.3	(a)
“ Company Order ”	2.4
“ Contingent Interest ”	2.1	(d)
“ Conversion Date ”	12.1	(b)
“ cross acceleration provision ”	6.1
“ Daily Excess Amount ”	12.1	(c)
“ Daily Settlement Amount ”	12.1	(c)
“ Daily Conversion Value ”	12.1	(c)
“ Defaulted Interest ”	2.14
“ Determination Date ”	12.2	(k)
“ Effective Date ”	12.2	(f)
“ Event of Default ”	6.1
“ ex dividend date ”	12.2	(a)
“ Expiration Time ”	12.2	(e)
“ Fundamental Change Purchase Date ”	11.1
“ Fundamental Change Purchase Notice ”	11.1	(b)
“ Fundamental Change Purchase Price ”	11.1
“ Global Securities ”	2.2	(b)
“ Global Security Legend ”	2.3
“ Initial Dividend Rate ”	12.2	(d)
“ judgment default provision ”	6.1
“ Legal Holiday ”	13.8
“ Paying Agent ”	2.5
“ Payment Default ”	6.1
“ Purchase Date ”	11.2	(a)
“ Purchase Notice ”	11.2	(a)(1)
“ Reference Properties ”	12.3	(a)
“ Redemption Price ”	5.1
“ Registrar ”	2.5
“ Settlement Amount ”	12.1	(c)
“ Special Interest Payment Date ”	2.14	(a)
“ Special Record Date ”	2.14	(a)
“ Spin-Off ”	12.2	(c)
“ Successor Company ”	4.1

SECTION 1.3. Incorporation by Reference of Trust Indenture Act .

This Indenture is subject to the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

“ Commission ” means the SEC.

“ indenture securities ” mean the Securities.

“ indenture security holder ” means a Securityholder.

“ indenture to be qualified ” means this Indenture.

“ indenture trustee ” or “ institutional trustee ” means the Trustee.

“ obligor ” on the indenture securities means the Company and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

SECTION 1.4. Rules of Construction .

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) “including” means including without limitation;

(5) words in the singular include the plural and words in the plural include the singular;

(6) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; and

(7) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater.

ARTICLE II

The Securities

SECTION 2.1. Title and Terms .

(a) The Securities shall be known and designated as the “3 ⁷ / ₈ % Convertible Subordinated Notes due 2036” of the Company. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $500.0 million, except for Securities authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of other Securities pursuant to Section 2.8 , 2.9 , 2.10 , 2.12 , 2.13 , 5.8 , 9.5 , 11.3 or 12.1 . The Securities shall be issuable in denominations of $1,000 or integral multiples thereof.

(b) The Securities shall mature on June 1, 2036.

(c) Interest shall accrue at the rate specified in paragraph 1 of the Securities from, and including, June 7, 2006 until the principal thereof is paid or made available for payment. Interest shall be payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2006.

(d) In addition, interest, if any (“ Contingent Interest ”), will accrue on each Security during any six-month period from June 1 to and including November 30 and from December 1 to and including May 31, as appropriate, commencing with the six-month period beginning June 1, 2018, if the Average Securities Price for the Applicable Five Trading Day Period with respect to such interest period equals 120% or more of $1,000 principal amount of Securities. The amount of Contingent Interest payable per $1,000 principal amount of Securities in respect of any interest period shall equal 0.375% of the average Securities Price for the Applicable Five Day Trading Period with respect to such interest period. Contingent Interest, if any, will accrue from, and including, June 1 or December 1, as applicable, through November 30 or May 31, as applicable, and will be payable on the next succeeding December 1 or June 1 interest payment date, as the case may be. Contingent Interest will be paid to the person in whose name a Security is registered at the close of business on May 15 or November 15, as the case may be, immediately preceding the relevant interest payment date on which Contingent Interest is payable. All payments of Contingent Interest shall be made in cash.

Upon determination that Holders will be entitled to receive Contingent Interest during an interest period, on or prior to the first day of such interest period, the Company shall notify the Trustee and issue a press release through Dow Jones & Company, Inc. or Bloomberg Business News containing such information with respect to the payment of Contingent Interest or publish such information on its web site or through such other public medium as the Company may use at that time.

(e) A Holder of any Security at the close of business on a Regular Record Date shall, except as otherwise provided in this Section 2.1(e) , be entitled to receive interest (including Contingent Interest, if any), on such Security on the corresponding interest payment date. Holders of Securities at the close of business on a Regular Record Date will receive payment of interest (including any Contingent Interest) payable on the corresponding interest payment date notwithstanding the conversion of such Securities at any time after 5:00 p.m., New York City time, on such Regular Record Date. Securities surrendered for conversion during the period from 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the immediately following interest payment date (except for (i) Securities in respect of which a Redemption Date has been declared that falls within this period or on such interest payment date, (ii) Securities in respect of which a Fundamental Change Purchase Date has been established that falls within this period or on such interest payment date, (iii) Securities in respect of which a Conversion Notice was received after 5:00 p.m., New York City time, on the Record Date immediately preceding the final interest payment date, or (iv) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to a Security) must be accompanied by payment of an amount equal to the interest (including any Contingent Interest) that the Holder is to receive on the Securities. Except where Securities surrendered for conversion must be accompanied by payment as described above, no interest or

Contingent Interest on converted Securities will be payable by the Company on any interest payment date subsequent to the date of conversion. Notwithstanding the foregoing, a Holder shall be entitled to receive accrued and unpaid interest, including any Contingent Interest in respect of a Security (w) if the Company calls such Security for redemption and such Holder converts its Security prior to the Redemption Date, (x) if the Company establishes a Fundamental Change Purchase Date during the period from the close of business on any Regular Record Date to the opening of business on the corresponding interest payment date that falls within this period or on such interest payment day and such Holder converts its Security prior to the Fundamental Change Purchase Date, (y) in respect of which a Conversion Notice was received after 5:00 p.m., New York City time, on the Record Date immediately preceding the final interest payment date or (z) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to a Security.

(f) Principal of and interest (including Contingent Interest, if any), on, any Global Security registered in the name of the Depository Trust Company, its nominee or its or their successor and assign, or such other depository institution appointed by the Company, shall be payable to such registered Holder in immediately available funds.

(g) Principal on Definitive Securities shall be payable in immediately available funds or, at the option of the Company, at the office or agency of the Company maintained for such purpose in the Borough of Manhattan in the City of New York, initially the corporate trust office of the Trustee and its agency in New York, New York. Interest (including Contingent Interest, if any), on Definitive Securities will be payable (i) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the relevant Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Registrar to the contrary.

(h) The Securities shall be redeemable at the option of the Company as provided in Article V .

(i) The Securities shall be repurchaseable by the Company at the option of Holders as provided in Article XI .

(j) The Securities shall be convertible at the option of the Holders as provided in Article XII .

(k) The Securities are subordinated in right of payment to the Senior Debt, as provided in Article X .

SECTION 2.2. Form of Securities .

(a) Except as otherwise provided pursuant to this Section 2.2 , the Securities are issuable in fully registered form without coupons in substantially the form of Exhibit A hereto, with such applicable legends as are provided for in Section 2.3 . The Securities are not issuable in bearer form. The terms and provisions contained in the form of Security shall

constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Any of the Securities may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Securities may be listed or designated for issuance, or to conform to usage.

(b) The Securities are being offered and sold by the Company pursuant to an underwriting agreement. The Securities offered and sold, as provided in such underwriting agreement, shall be issued initially in the form of one or more global Securities in fully registered form without interest coupons, substantially in the form of Exhibit A hereto (each a “ Global Security ” and collectively the “ Global Securities ”). Each Global Security shall be duly executed by the Company and authenticated and delivered by the Trustee, and shall be registered in the name of DTC or its nominee and retained by the Trustee, as Custodian, at its corporate trust office, for credit to the accounts of the Agent Members holding the Securities evidenced thereby. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee, as Custodian, and of DTC or its nominee, as hereinafter provided.

SECTION 2.3. Legends.

(a) Global Security Legend

Each Global Security shall also bear the following legend (the “ Global Security Legend ”) on the face thereof:

“THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF

OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

(b) Legend for Definitive Securities

Definitive Securities, in addition to the legend set forth in Section 2.3(a)(1) , will also bear a legend substantially in the following form:

“THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO SECURITIES.”

SECTION 2.4. Execution and Authentication .

One Officer shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

A Security shall not be valid until an authorized signatory of the Trustee manually authenticates the Security. The signature of the Trustee on a Security shall be conclusive evidence that such Security has been duly and validly authenticated and issued under this Indenture. A Security shall be dated the date of its authentication.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a written order of the Company signed by an Officer or by an Assistant Treasurer or an Assistant Secretary of the Company (the “ Company Order ”) for the authentication and delivery of such Securities, and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $500.0 million outstanding, except for Securities authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities of the same class pursuant to Section 2.8 , 2.9 , 2.10 , 2.12 , 2.13 , 5.8 , 9.5 , 11.3 or 12.1 . All Securities issued on the Issue Date shall be identical in all respects other than issue dates, the date from which interest accrues and any changes relating thereto. Notwithstanding anything to the contrary contained in this Indenture, subject to Section 2.12 , all Securities issued under this Indenture shall vote and consent together on all matters as one class and no series of Securities will have the right to vote or consent as a separate class on any matter.

The Trustee may appoint an agent (the “ Authenticating Agent ”) reasonably acceptable to the Company to authenticate the Securities. Initially, the Trustee will act as Authenticating Agent. Any such instrument shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of which shall be furnished to the Company. Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the

Trustee includes authentication by the Authenticating Agent. An Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

In case the Company, pursuant to Article IV or Section 10.2, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article IV, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.4 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name.

SECTION 2.5. Registrar and Paying Agent .

The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency where Securities may be presented for payment (the “ Paying Agent ”). The Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in the Borough of Manhattan, The City of New York. The Registrar shall keep a register of the Securities and of their transfer and exchange (the “ Securities Register ”). The Company may have one or more co-registrars and one or more additional paying agents. The term “ Paying Agent ” includes any additional paying agent and the term “ Registrar ” includes any co-registrar.

The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7 . The Company or any of its domestically organized, wholly owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.

The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities. The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying

Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee.

SECTION 2.6. Paying Agent To Hold Money in Trust .

By no later than 10:00 a.m., New York City time, on the date on which any principal of or interest (including Contingent Interest, if any), on any Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal or interest (including Contingent Interest, if any), when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by such Paying Agent for the payment of principal of or interest (including Contingent Interest, if any), on the Securities and shall notify the Trustee in writing of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.6 , the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.

SECTION 2.7. Securityholder Lists .

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, and the Company, on its own behalf, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders and the Company shall otherwise comply with TIA § 312(a).

SECTION 2.8. General Provisions Relating to Transfer and Exchange .

The Securities are issuable only in registered form. A Holder may transfer a Security only 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, final acceptance and registration of the transfer by the Registrar in the Securities Register. Furthermore, any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by the Holder of such Global Security (or its agent) and that ownership of a beneficial interest in the Global Security shall be required to be reflected in a book-entry.

When Securities are presented to the Registrar with a request to register the transfer or to exchange them for an equal aggregate principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met (including that such Securities are duly endorsed or accompanied by a written instrument of transfer duly executed by the Holder thereof or by an attorney who is authorized in writing to act on behalf of the Holder). Subject to Section 2.4 , to permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar’s request. No service charge shall be made for any registration of transfer or exchange or redemption of the Securities, 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 exchanges in connection with which a Security is issued to a Person other than the Holder submitting the Security for exchange).

Neither the Company nor the Registrar shall be required to exchange or register a transfer of any Securities:

(a) for a period of 15 days prior to the mailing of a notice of redemption of Securities selected for redemption under Article V ;

(b) so selected for redemption or, if a portion of any Security is selected for redemption, the portion thereof selected for redemption; or

(c) surrendered for conversion or, if a portion of any Security is surrendered for conversion, the portion thereof surrendered for conversion.

Each Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Security in violation of any provision of this Indenture and/or applicable United States federal or state securities law.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between beneficial owners of any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

SECTION 2.9. Book-Entry Provisions for the Global Securities .

(a) The Global Securities initially shall:



(i)		be registered in the name of DTC (or a nominee thereof);

(ii)		be delivered to the Trustee as custodian for DTC; and

(iii)		bear the Global Security Legend set forth in Section 2.3(a) .

Members of, or participants in, DTC (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by DTC, or the Trustee as its custodian, or under such Global Security, and DTC may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing contained herein shall prevent the Company, the Trustee or any agent of the Company or Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and the Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security. With respect to any Global Security deposited on behalf of the subscribers for the Securities represented thereby with the Trustee as custodian for DTC for credit to their respective accounts (or to such other accounts as they may direct) at Euroclear or Clearstream, the provisions of the “Operating Procedures of the Euroclear System” and the “Terms and Conditions Governing Use of Euroclear” and the “Management Regulations” and “Instructions to Participants” of Clearstream, respectively, shall be applicable to the Global Securities.

(b) The Holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

(c) A Global Security may not be transferred, in whole or in part, to any Person other than DTC (or a nominee thereof), and no such transfer to any such other Person may be registered. Beneficial interests in a Global Security may be transferred in accordance with the rules and procedures of DTC and the provisions of Section 2.10 .

(d) If at any time:

(i) DTC notifies the Company in writing that it is unwilling or unable to continue to act as depositary for the Global Securities and a successor depositary for the Global Securities is not appointed by the Company within 90 days of such notice;

(ii) DTC ceases to be registered as a “clearing agency” under the Exchange Act and a successor depositary for the Global Securities is not appointed by the Company within 90 days of such cessation;

(iii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Definitive Securities under this Indenture in exchange for all or any part of the Securities represented by a Global Security or Global Securities, subject to the procedures of DTC; or

(iv) an Event of Default has occurred and is continuing and the Registrar has received a request from DTC for the issuance of Definitive Securities in exchange for such Global Security or Global Securities;

DTC shall surrender such Global Security or Global Securities to the Trustee for cancellation and the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate and Company Order for the authentication and delivery of Securities, shall authenticate and deliver in

exchange for such Global Security or Global Securities, Definitive Securities in an aggregate principal amount equal to the aggregate principal amount of such Global Security or Global Securities. Such Definitive Securities shall be registered in such names as DTC shall identify in writing as the beneficial owners of the Securities represented by such Global Security or Global Securities (or any nominee thereof).

(e) Notwithstanding the foregoing, in connection with any transfer of beneficial interests in a Global Security to the beneficial owners thereof pursuant to Section 2.9(d) , the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such Global Security in an amount equal to the principal amount of the beneficial interests in such Global Security to be transferred.

SECTION 2.10. Mutilated, Destroyed, Lost or Stolen Securities .

If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Securityholder (a) satisfies the Company or the Trustee within a reasonable time after such Securityholder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Company or Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code and (c) satisfies any other reasonable requirements of the Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section 2.10 , the Company may 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) in connection therewith.

Every new Security issued pursuant to this Section 2.10 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company and any other obligor upon the Securities, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

The provisions of this Section 2.10 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 2.11. Outstanding Securities .

Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.11 as not outstanding. A Security does not cease to be outstanding in the event the Company or a Subsidiary of the Company holds the Security, provided, however, that (i) for purposes of determining which are outstanding for consent or voting purposes hereunder, the provisions of Section 13.6 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding.

If a Security is replaced or paid pursuant to Section 2.10 , it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser.

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Redemption Date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

SECTION 2.12. Temporary Securities .

In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Securities. After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall authenticate and make available for delivery in exchange therefor, one or more Definitive Securities representing an equal principal amount of Securities. Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Securities.

SECTION 2.13. Cancellation .

The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies and customary procedures including delivery of a certificate (a “ Certificate of Destruction ”) describing such Securities disposed (subject to the record retention requirements of the Exchange Act) or deliver canceled Securities to the Company pursuant to written direction by an Officer. The Company may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by DTC to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

SECTION 2.14. Payment of Interest; Defaulted Interest .

Interest (including any Contingent Interest) on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Security (or one or more predecessor Securities) is registered at the close of business on the Regular Record Date for such payment at the office or agency of the Company maintained for such purpose pursuant to Section 2.5 .

Any interest (including any Contingent Interest) on any Security which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the Regular Record Date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest (including any Contingent Interest) at the rate borne by the Securities (such defaulted interest (including any Contingent Interest) and interest thereon herein collectively called “ Defaulted Interest ”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

(a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed payment (the “ Special Interest Payment Date ”), and at the same time the Company shall deposit with the Trustee an amount of

money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a record date (the “ Special Record Date ”) for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 13.2 , not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

(b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section 2.14 , each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest (including any Contingent Interest) accrued and unpaid, and to accrue, which were carried by such other Security.

SECTION 2.15. Computation of Interest .

Interest (including any Contingent Interest) on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 2.16. CUSIP and ISIN Numbers .

The Company in issuing the Securities may use “CUSIP” and “ISIN” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of redemption as a convenience to Holders; provided, however , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such CUSIP or ISIN numbers. The Company shall promptly notify the Trustee in writing of any change in the CUSIP and ISIN numbers.

ARTICLE III

Covenants

SECTION 3.1. Payment of Securities .

The Company shall promptly pay the principal of and interest (including Contingent Interest, if any), on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest (including any Contingent Interest), shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all principal and interest (including any Contingent Interest), then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture.

The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest (including any Contingent Interest), payments hereunder. If the Company pays withholding taxes on behalf of a Holder as a result of an adjustment to the Conversion Rate, the Company may, at its option, set off such payment against payments of cash and shares of Common Stock on the Securities.

SECTION 3.2. Maintenance of Office or Agency .

The Company will maintain in The City of New York, an office or agency where the Securities may be presented or surrendered for payment, where, if applicable, the Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The agency of the Trustee (the “ Agent ”) currently located in The City of New York shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Agent of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York

for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

SECTION 3.3. Corporate Existence .

Except as otherwise provided in Article IV and Section 11.2(b) , the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership, limited liability company or other existence of each Significant Subsidiary or the respective corporate, partnership, limited liability company or other existences of each member of any group of Subsidiaries that taken together would constitute a Significant Subsidiary of the Company and the rights (charter and statutory), licenses and franchises of the Company and each Significant Subsidiary or each member of any group of Subsidiaries that taken together would constitute a Significant Subsidiary of the Company; provided, however, that the Company shall not be required to preserve any such right, license or franchise or the corporate, partnership, limited liability company or other existence of any Significant Subsidiary or the respective corporate, partnership, limited liability company or other existences of each member of any group of Subsidiaries that taken together would constitute a Significant Subsidiary of the Company, if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and each of its Subsidiaries, taken as a whole, and that the loss thereof is not, and will not be, disadvantageous in any material respect to the Holders; provided, further, that the Company shall not be required to preserve any such right, license or franchise or the corporate, partnership, limited liability company or other existence of a Subsidiary that is neither a Significant Subsidiary nor a member of any group of Subsidiaries that taken together would constitute a Significant Subsidiary of the Company.

SECTION 3.4. Payment of Taxes and Other Claims .

The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous to the Holders.

SECTION 3.5. Payments for Consent .

Neither the Company nor any of its Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fees or otherwise, to any Holder of any Securities for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be

paid or is paid to all Holders of the Securities that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or amendment.

SECTION 3.6. Compliance Certificate .

The Company shall deliver to the Trustee within 120 days after the end of each Fiscal Year of the Company, beginning with the Fiscal Year ending December 31, 2006 an Officers’ Certificate, one of the signers of which shall be the principal executive officer, principal financial officer or principal accounting officer of the Company, stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during such period. If they do, the certificate shall describe the Default or Event of Default, its status and the action the Company is taking or proposes to take with respect thereto. The Company also shall comply with TIA § 314(a)(4).

SECTION 3.7. Further Instruments and Acts .

Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

SECTION 3.8. Statement by Officers as to Default .

The Company shall deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or default, its status and the action which the Company proposes to take with respect thereto.

SECTION 3.9. Tax Treatment .

The Company agrees, and by acceptance of beneficial ownership interest in the Securities each beneficial holder of Securities will be deemed to have agreed, for United States federal income tax purposes (1) to treat the Securities as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and, for purposes of the Contingent Payment Regulations, to treat any cash and the fair market value of stock beneficially received by a beneficial holder upon any conversion of the Securities as a contingent payment and (2) to be bound by the Company’s determination of the “comparable yield” and “projected payment schedule,” within the meaning of the Contingent Payment Regulations, with respect to the Securities. A Holder of Securities may obtain the amount of original issue discount, issue date, yield to maturity, comparable yield and projected payment schedule by submitting a written request for it to the Company at the following address: 2525 Stemmons Freeway, Dallas, Texas 75207-2401, Attn: S. Theis Rice; provided , that neither the Company nor any beneficial holder shall be required to treat the Securities, or to report income from the Securities, for United States federal income tax purposes in a manner that is contrary to applicable legal requirements or applicable published positions of the Internal Revenue Service.

SECTION 3.10. Delivery of Certain Information .

The Company will deliver to the Trustee within fifteen (15) days after the filing of the same with the SEC, copies of the quarterly and annual reports and of the information, documents and other reports, if any, which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and shall otherwise comply with the requirements of TIA § 314(a); provided that (i) any failure by the Company to comply with this provision shall not constitute a Default or Event of Default and (ii) only the Trustee may institute a legal proceeding against the Company to enforce such delivery obligation.

ARTICLE IV

Successor Company

SECTION 4.1. Consolidation, Merger and Sale of Assets .

The Company shall not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, another Person, unless:

(i) the resulting, surviving or transferee Person (the “ Successor Company ”) if not the Company shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture;

(ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(iii) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture, if any, comply with this Indenture.

For purposes of this Section 4.1 , the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company; provided , that in no event shall any Sale and Leaseback Transaction entered into in the ordinary course of business be deemed to constitute the transfer of all or substantially all of the properties and assets of the Company.

The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, but, in the case of a lease of all or substantially all its assets, the Company will not be released from the obligation to pay the principal of and interest (including Contingent Interest, if any), on the Securities.

ARTICLE V

Redemption of Securities

SECTION 5.1. Optional Redemption .

The Securities may be redeemed, as a whole or from time to time in part, subject to the conditions and at the redemption price (the “ Redemption Price ”), which shall be payable in cash, specified in paragraph 6 of the form of Securities set forth in Exhibit A hereto, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest (including Contingent Interest, if any), to the Redemption Date.

SECTION 5.2. Applicability of Article .

Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article V .

SECTION 5.3. Election to Redeem; Notice to Trustee .

The election of the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company, the Company shall, upon not later than the earlier of the date that is 45 days prior to the Redemption Date fixed by the Company or the date on which notice is given to the Holders (except as provided in Section 5.5 or unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 5.4 . Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.

SECTION 5.4. Selection by Trustee of Securities to Be Redeemed .

If less than all the Securities are to be redeemed at any time pursuant to an optional redemption, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities not previously called for redemption, by lot, or on a pro rata basis or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) and which may provide for the selection for redemption of portions of the principal of the Securities; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than $1,000.

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any Security redeemed

or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

If any Securities selected for partial redemption are thereafter surrendered for conversion in part before termination of the conversion right with respect to the portion of the Securities so selected, the converted portion of such Securities shall be deemed (so far as may be), solely for purposes of determining the aggregate principal amount of Securities to be redeemed by the Company, to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection. Nothing in this Section 5.4 shall affect the right of any Holder to convert any Securities pursuant to Article XII before the termination of the conversion right with respect thereto.

SECTION 5.5. Notice of Redemption .

Notice of redemption shall be given in the manner provided for in Section 13.2 and at the Company’s expense not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed. At the Company’s expense, the Trustee shall give notice of redemption in the Company’s name; provided, however, that the Company shall deliver to the Trustee, at least 45 days prior to the Redemption Date, an Officers’ Certificate requesting that the Trustee give such notice at the Company’s expense and setting forth the information to be stated in such notice as provided in the following items.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the redemption price and the amount of accrued interest (including Contingent Interest, if any), to the Redemption Date payable as provided in Section 5.7 , if any,

(3) the then current Conversion Rate, a statement that the Securities called for redemption may be converted at any time before the close of business on the second Trading Day prior to the Redemption Date, and that Holders who wish to convert Securities must comply with the procedures in paragraph 8 of the Securities,

(4) if less than all outstanding Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption,

(5) in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

(6) that on the Redemption Date the redemption price (and accrued interest, if any, (including Contingent Interest, if any), to the Redemption Date payable as provided in Section 5.7 ) will become due and payable upon each such Security, or the portion thereof, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest (including Contingent Interest, if any), on Securities called for redemption (or the portion thereof) will cease to accrue on and after said date,

(7) the place or places where such Securities are to be surrendered for payment of the redemption price and accrued interest, if any, and any Contingent Interest,

(8) the name and address of the Paying Agent and the Conversion Agent,

(9) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price,

(10) the CUSIP number, and that no representation is made as to the accuracy or correctness of the CUSIP number, if any, listed in such notice or printed on the Securities, and

(11) the paragraph of the Securities pursuant to which the Securities are to be redeemed.

SECTION 5.6. Deposit of Redemption Price .

Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.6 ) an amount of money sufficient to pay the redemption price of, and accrued interest (including any Contingent Interest), on, all the Securities which are to be redeemed on that date other than Securities or portions of Securities called for redemption that are beneficially owned by the Company and have been delivered by the Company to the Trustee for cancellation.

SECTION 5.7. Securities Payable on Redemption Date .

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued and unpaid interest, if any, and any Contingent Interest, to but excluding the Redemption Date), and from and after such date (unless the Company shall default in the payment of the redemption price and accrued and unpaid interest (including Contingent Interest, if any)) such Securities shall cease to bear interest or Contingent Interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the redemption price, together with accrued interest, if any, any Contingent Interest, to the Redemption Date (subject to the rights of Holders of record on the relevant Record Date to receive interest due on the relevant interest payment date).

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest (including Contingent Interest, if any), from the Redemption Date at the rate borne by the Securities.

SECTION 5.8. Securities Redeemed in Part .

Any Security which is to be redeemed only in part (pursuant to the provisions of this Article V ) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 3.2 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security at the expense of the Company, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, provided that each such new Security will be in a principal amount of $1,000 or integral multiple thereof.

ARTICLE VI

Defaults and Remedies

SECTION 6.1. Events of Default .

Each of the following is an “ Event of Default ”:

(1) default in any payment of interest, including any Contingent Interest on any Security, when the same becomes due and payable, and such default continues for a period of 30 days;

(2) default in the payment of the principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

(3) failure by the Company to comply with its obligation to convert the Securities into cash or a combination of cash and Common Stock, as applicable, upon exercise of a Holder’s conversion right and such failure continues for a period of ten calendar days;

(4) failure by the Company to comply with any of its obligations under Article IV ;

(5) the Company defaults in the performance of or a breach by the Company of any other covenant or agreement in this Indenture or under the Securities (other than those referred to in (1), (2), (3) or (4) above or any other covenant or agreement of this Indenture that expressly provides that a violation of such covenant or

agreement shall not constitute an Event of Default) and such default continues for 60 days after the notice specified below;

(6) there is a default under any mortgage, agreement or other instrument under which there may be issued or by which there may be outstanding, or by which there may be secured or evidenced any Debt for money borrowed by the Company or any of its Subsidiaries (other than Non-Recourse Debt of the Company or any Subsidiary), whether such Debt now exists, or is created after the date of this Indenture, which default

(A) is caused by a failure to pay principal of, or interest or premium, if any, on such Debt prior to the expiration of the grace period provided in such Debt (“ Payment Default ”) or

(B) results in the acceleration of such Debt prior to its maturity (the “ cross acceleration provision ”)

and, in each case, the principal amount of any such Debt, together with the principal amount of any other such Debt under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or more or its foreign currency equivalent at the time and such acceleration shall not have been rescinded or annulled within 10 days after written notice of such acceleration has been received by the Company or such Subsidiary;

(7) failure by the Company to issue a Company Notice of a Fundamental Change in accordance with the terms of Section 11.1 and Section 11.3 .

(8) the Company pursuant to or within the meaning of any Bankruptcy Law:

(A) commences a voluntary case or proceeding;

(B) consents to the entry of judgment, decree or order for relief against it in an involuntary case or proceeding;

(D) makes a general assignment for the benefit of its creditors;

(E) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it;

(F) takes any corporate action to authorize or effect any of the foregoing; or

(G) takes any comparable action under any foreign laws relating to insolvency; or

(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(A) is for relief against the Company in an involuntary case;

(B) appoints a Custodian of the Company for all or substantially all of the Company’s property;

(C) orders the winding up or liquidation of the Company; and in each case the order or decree or relief remains unstayed and in effect for 90 days; or

(10) there has been entered in a court of competent jurisdiction a final judgment for the payment of $50.0 million or more rendered against the Company or any Subsidiary, which judgment is not covered by insurance (other than with respect to customary deductibles) or not discharged, bonded or stayed within 90 days after (A) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (B) the date on which all rights to appeal have been extinguished (“ judgment default provision ”).

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

Notwithstanding the foregoing, a Default under clause (5) of this Section 6.1 will not constitute an Event of Default until the Trustee or the Holders of 25% or more in principal amount of the outstanding Securities notify the Company of the Default in writing and the Company does not cure such Default within the time specified in clause (5) of this Section 6.1 after receipt of such notice. A violation of Section 3.10 or any other covenant or agreement in this Indenture that expressly provides that a violation of such covenant or agreement shall not constitute an Event of Default may only be enforced by the Trustee or such other Person specified in such covenant or agreement by instituting a legal proceeding against the Company for enforcement of such covenant or agreement.

The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers’ Certificate of any Default or Event of Default under clauses (3), (4), (5), (6), (7), (8), (9) or (10) of this Section 6.1 , which such notice shall contain the status thereof and a description of the action being taken or proposed to be taken by the Company in respect thereof.

SECTION 6.2. Acceleration .

If an Event of Default occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in outstanding principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of and accrued and unpaid interest, if any, (including Contingent Interest, if any), on all the Securities to be due and payable; provided that upon an Event of Default of a type set forth in Clause 8 or Clause 9 of Section 6.1 , the Trustee shall be

deemed to have made such declaration. Upon such an actual or deemed declaration, such principal, premium, if any, and accrued and unpaid interest (including Contingent Interest, if any), shall be due and payable immediately.

SECTION 6.3. Other Remedies .

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest (including Contingent Interest, if any), on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.

SECTION 6.4. Waiver of Past Defaults .

The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may (a) waive, by their consent (including, without limitation consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities), an existing Default or Event of Default and its consequences except (i) a Default or Event of Default in the payment of the principal of or interest (including Contingent Interest, if any), on a Security or (ii) a Default or Event of Default in respect of a provision that under Section 9.2 cannot be amended without the consent of each Securityholder affected and (b) rescind any such acceleration with respect to the Securities and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of and interest (including Contingent Interest, if any), on the Securities that have become due solely by such declaration of acceleration, have been cured or waived. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

SECTION 6.5. Control by Majority .

The Holders of a majority in principal amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of 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 or, subject to Sections 7.1 and 7.2 , that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

SECTION 6.6. Limitation on Suits .

Subject to Section 6.7 , a Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless:

(1) such Holder has previously given to the Trustee written notice stating that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the outstanding Securities have requested that the Trustee pursue the remedy;

(3) such Holders have offered to the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity; and

(5) the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request during such 60-day period.

A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder.

SECTION 6.7. Rights of Holders to Receive Payment .

Notwithstanding any other provision of this Indenture (including, without limitation, Section 6.6 ), the right of any Holder to receive payment of principal of or interest (including Contingent Interest, if any), on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, 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 6.8. Collection Suit by Trustee .

If an Event of Default specified in clauses (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest (including any Contingent Interest) to the extent lawful) and the amounts provided for in Section 7.7 .

SECTION 6.9. Trustee May File Proofs of Claim .

The Trustee may 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 (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter, and may vote on behalf of the Holders in any

election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7 .

SECTION 6.10. Priorities .

If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:

FIRST: to the Trustee for amounts due under Section 7.7 ;

SECOND: to Securityholders for amounts due and unpaid on the Securities for principal and interest (including Contingent Interest, if any), ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

THIRD: to the Company.

The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 6.10 . At least 15 days before such record date, the Company shall mail to each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid.

SECTION 6.11. 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 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 attorneys’ 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. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Securities.

ARTICLE VII

Trustee

SECTION 7.1. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under

this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against loss, liability or expense.

(b) Except during the continuance of an Event of Default:

(1) the Trustee undertakes to perform such duties and only 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

(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, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates, opinions or orders which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions 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).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.1 ;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer of the Trustee unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5 .

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.1 .

(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability 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 to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(h) 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 7.1 and to the provisions of the TIA.

(i) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

(j) 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 unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

SECTION 7.2. Rights of Trustee .

Subject to Section 7.1 :

(a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall receive and retain financial reports and statements of the Company as provided herein, but shall have no duty to review or analyze such reports or statements to determine compliance under covenants or other obligations of the Company.

(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

(e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) The Trustee shall not be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) resulting from actions taken in good faith and which the Trustee believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at its designated corporate trust office, and such notice references the Securities and this Indenture.

(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(i) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

SECTION 7.3. Individual Rights of Trustee .

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11 . In addition, the Trustee shall be permitted to engage in transactions with the Company; provided, however, that if the Trustee acquires any conflicting interest the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as Trustee or (iii) resign.

SECTION 7.4. Trustee’s Disclaimer .

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, shall not be accountable for the Company’s use of the proceeds from the Securities, shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

SECTION 7.5. Notice of Defaults .

If a Default or Event of Default occurs and is continuing and if a Trust Officer of the Trustee has actual knowledge thereof, the Trustee shall, within 90 days after such Default occurs, mail by first class mail (a) to each Securityholder at the address set forth in the Securities Register, (b) to such Holders as have, within the two years preceding the date of such mailing, filed their names and addresses with the Trustee for that purpose, and (c) as otherwise required by TIA § 313(c). Except in the case of a Default or Event of Default in payment of principal of or interest (including Contingent Interest, if any), on any Security (including payments pursuant to the optional redemption or required repurchase provisions of such Security, if any), the Trustee may withhold the notice if and so long as its board of directors, a committee of its board of directors or a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders.

SECTION 7.6. Reports by Trustee to Holders .

As promptly as practicable after each May 15 beginning with the May 15 following the date of this Indenture, and in any event prior to November 15 in each year, the Trustee shall mail to each Securityholder a brief report dated as of such May 15 that complies with TIA § 313(a), if required by such TIA § 313(a). The Trustee also shall comply with TIA § 313(b). The Trustee shall transmit by mail all reports required by TIA § 313(c) in accordance with the requirements set forth in TIA § 313(c).

A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee in writing whenever the Securities become listed on any stock exchange and of any delisting thereof.

SECTION 7.7. Compensation and Indemnity .

The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the Company and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of notices to Securityholders and reasonable costs of counsel retained by the Trustee in connection with the delivery of an Opinion of Counsel or otherwise, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts related to this Indenture. The Company shall indemnify the Trustee against any and all loss, liability, damages, claims or expense (including reasonable attorneys’ fees and expenses) incurred by it without negligence or bad faith on its part in connection with the administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture (including this Section 7.7 ) and of defending itself against any claims (whether asserted by any Securityholder or otherwise). The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall provide reasonable cooperation at the Company’s expense in the defense. The Trustee may have separate counsel (subject to the approval of the Company not to be unreasonably withheld or delayed) and the Company shall pay the reasonable fees and expenses of such counsel, provided that the Company shall not be required to pay such fees and expenses if it assumes the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of interest between the Company and the Trustee in connection with such defense. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The Company’s payment obligations pursuant to this Section 7.7 shall survive the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default

specified in clauses (8) and (9) of Section 6.1 with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law.

SECTION 7.8. Replacement of Trustee .

The Trustee may resign at any time upon 60 days’ prior written notice to the Company. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10 ;

(2) the Trustee is adjudged bankrupt or insolvent;

(3) a receiver or other public officer takes charge of the Trustee or its property; or

(4) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7 .

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Securities may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10 , unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section 7.8 , the Company’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

SECTION 7.9. Successor Trustee by Merger .

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking

association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; provided that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor Trustee shall only apply to its successor or successors by merger, consolidation or conversion.

SECTION 7.10. Eligibility; Disqualification .

The Trustee shall at all times satisfy the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b); provided, however , that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

SECTION 7.11. Preferential Collection of Claims Against Company .

The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

SECTION 7.12. Trustee’s Application for Instruction from the Company .

Any application by the Trustee for written instructions from the Company may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

ARTICLE VIII

Discharge of Indenture

SECTION 8.1. Discharge of Liability on Securities .

When (1) the Company shall deliver to the Registrar for cancellation all Securities theretofore authenticated (other than any Securities which have been destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) and not theretofore canceled, or (2) all the Securities not theretofore canceled or delivered to the Registrar for cancellation shall have (a) been deposited for conversion and the Company shall deliver to the Holders cash or cash and shares of Common Stock, in each case, sufficient to pay all amounts owing in respect of all Securities (other than any Securities which shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) not theretofore canceled or delivered to the Registrar for cancellation or (b) become due and payable on the Stated Maturity, Purchase Date, Fundamental Change Purchase Date or Redemption Date, as applicable, and the Company shall deposit with the Trustee cash or cash and shares of Common Stock (solely to satisfy outstanding conversions, if applicable), as applicable, sufficient to pay all amounts owing in respect of all Securities (other than any Securities which shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) not theretofore canceled or delivered to the Registrar for cancellation, including the principal amount and interest (including Contingent Interest, if any), accrued and unpaid to such Stated Maturity, Purchase Date, Fundamental Change Purchase Date or Redemption Date, as the case may be, and if in either case (1) or (2) the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then the Indenture with respect to the Securities shall cease to be of further effect (except as to (i) remaining rights of registration of transfer, substitution and exchange and conversion of Securities; (ii) rights hereunder of Holders to receive payments of the amounts then due, including interest (including Contingent Interest, if any), with respect to the Securities and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee; and (iii) the rights, obligations and immunities of the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar under the Indenture with respect to the Securities). On, or after, such time, the Trustee, on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 8.3 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging the Indenture with respect to the Securities; the Company, however, hereby agrees to reimburse the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar for any costs or expenses thereafter reasonably and properly incurred by the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar and to compensate the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar for any services thereafter reasonably and properly rendered by the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar in connection with the Indenture with respect to the Securities or the Securities.

SECTION 8.2. Reinstatement .

If the Trustee or the Paying Agent is unable to apply any money to the Holders entitled thereto by reason of any order or judgment of any court of governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture with respect to the Securities and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with the

Indenture and the Securities to the Holders entitled thereto; provided, however, that if the Company makes any payment of principal amount of or interest (including Contingent Interest, if any), on any Securities following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent.

SECTION 8.3. Officers’ Certificate; Opinion of Counsel .

Upon any application or demand by the Company to the Trustee to take any action under Section 8.1 , the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in the 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 have been complied with.

Each certificate or Opinion of Counsel provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant pursuant to the previous paragraph shall include: (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to compliance with such covenant or condition; and (4) a statement as to whether or not, in the opinion of such Person, there is compliance with such condition or covenant.

ARTICLE IX

Amendments

SECTION 9.1. Without Consent of Holders .

The Company and the Trustee may amend this Indenture or the Securities without notice to or consent of any Securityholder:

(1) to cure any ambiguity, omission, defect or inconsistency;

(2) to comply with Article IV in respect of the assumption by a Successor Company of an obligation of the Company under this Indenture;

(3) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code;

(4) to add Guarantees with respect to the Securities;

(5) to secure the Securities;

(6) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; or

(7) to make any change that does not materially adversely affect the rights of any Holder, provided that any amendment to conform the terms of the Securities to the description contained in the prospectus filed with the registration statement pursuant to which this Indenture has been qualified and any supplemental prospectus thereto relating to the Securities shall be deemed not to be adverse to any Security holder.

After an amendment under this Section 9.1 becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.1 .

SECTION 9.2. With Consent of Holders .

The Company and the Trustee may amend this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) and compliance with the provisions of this Indenture may be waived with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities). However, without the consent of each Securityholder affected, an amendment or waiver may not:

(1) reduce the amount of Securities whose Holders must consent to an amendment of the Indenture or to waive any past Default or Event of Default;

(2) reduce the rate of or extend the stated time for payment of interest, including Contingent Interest, on any Security;

(3) reduce the principal of or extend the Stated Maturity of any Security;

(4) make any change that impairs or adversely affects the conversion rights of any Securities;

(5) reduce the redemption price, the Fundamental Change Purchase Price, the Purchase Price payable upon the redemption or repurchase of any Security or amend or modify in any manner adverse to holders of the Securities the Company’s obligation to make such payments, whether through an amendment to or waiver of Article V , Article IX , a definition or otherwise;

(6) make any Security payable in money other than that stated in the Security (it being understood that all references to cash in this Indenture and the Securities are to U.S. legal tender);

(7) impair the right of any Holder to receive payment of principal of and interest (including Contingent Interest, if any), on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities; or

(8) make any change to the amendment provisions which require each Holder’s consent or to the waiver provisions.

It shall not be necessary for the consent of the Holders under this Section 9.2 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment or waiver under this Indenture by any Holder of the Securities given in connection with a tender or exchange of such Holder’s Securities will not be rendered invalid by such tender or exchange.

After an amendment under this Section 9.2 becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.2 .

SECTION 9.3. Compliance with Trust Indenture Act .

Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect.

SECTION 9.4. Revocation and Effect of Consents and Waivers .

A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective or otherwise in accordance with any related solicitation documents. After an amendment or waiver becomes effective, it shall bind every Securityholder. An amendment or waiver shall become effective upon receipt by the Trustee of the requisite number of written consents under Section 9.1 or 9.2 , as applicable.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall become valid or effective more than 120 days after such record date.

SECTION 9.5. Notation on or Exchange of Securities .

If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.

SECTION 9.6. Trustee To Sign Amendments .

The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Sections 7.1 and 7.2 ) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, subject to customary exceptions and complies with the provisions hereof (including Section 9.3 ).

ARTICLE X

Subordination

SECTION 10.1. Agreement of Subordination .

The Company covenants and agrees, and each Holder by its acceptance thereof likewise covenants and agrees, that all Securities shall be issued subject to the provisions of this Article X ; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions.

The payment of the principal of and Interest (including Contingent Interest, if any) on all Securities (including, but not limited to, the Redemption Price and the Fundamental Change Purchase Date with respect to the Securities subject to redemption or repurchase in accordance with Articles V and XI , respectively, and the payment of any cash upon conversion in accordance with Article XII ) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full in cash or other payment satisfactory to the holders of Senior Debt of all Senior Debt, whether outstanding at the date of this Indenture or thereafter incurred.

No provision of this Article X shall prevent the occurrence of any Default or Event of Default hereunder.

SECTION 10.2. Payments to Holders .

No payment shall be made with respect to the principal of or interest (including Contingent Interest, if any) on the Securities (including, but not limited to, the Redemption Price and the Fundamental Change Purchase Date with respect to the Securities subject to redemption or purchase in accordance with Articles V and XI , respectively, and any payment of cash upon

conversion in accordance with Article XII ), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 10.5 , if:

(a) a default in the payment of principal, premium, interest or other amounts due on any Senior Debt, or in respect of any redemption or repurchase obligation under any Senior Debt, occurs and is continuing (or, in the case of Senior Debt for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Debt); or

(b) a default, other than a Payment Default, on any Designated Senior Debt occurs and is continuing that then permits holders of such Designated Senior Debt (or any Representative) to accelerate its maturity (a “ Non-Payment Default ”) and a Trust Officer of the Trustee receives at the corporate trust office a written notice of the default (a “ Payment Blockage Notice ”) from the Company or a Representative of Designated Senior Debt.

Notwithstanding the foregoing, following the delivery of a Payment Blockage Notice, no new Payment Blockage Notice may be delivered and no new period of payment blockage with respect to the Securities may begin until both (i) 365 consecutive days have elapsed since the effectiveness of the first Payment Blockage Notice and (ii) all scheduled payments of principal and interest with respect to the Securities that are due have been paid in full in cash. No default that existed or was continuing on the date of delivery of any Payment Blockage Notice with respect to the Designated Senior Debt whose holders delivered the Payment Blockage Notice may be made the basis of a subsequent Payment Blockage Notice by the holders of such Designated Senior Debt, unless the Non-Payment Default shall have been cured or waived for a period of not less than 90 consecutive days.

The Company may and shall resume payments on and distributions in respect of the Securities upon:

(1) in the case of a Payment Default, the date upon which the default is cured or waived or ceases to exist or the Senior Debt shall have been discharged or paid in full, or

(2) in the case of a Non-Payment Default, the earlier of the date on which such default is cured or waived or ceases to exist, in each case as and to the extent permitted under the documentation for the Designated Senior Debt or the Designated Senior Debt shall have been discharged or paid in full, or the 179 ^th day after the date on which the applicable Payment Blockage Notice is received, in each case, unless the maturity of the Designated Senior Debt has been accelerated or this Article X otherwise prohibits the payment or distribution at the time of such payment or distribution.

Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or liquidation or reorganization of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership or similar proceedings, all amounts due or to become due upon all Senior Debt shall first be paid in full in cash, or other payments satisfactory to the holders of Senior Debt before any payment of cash, property or securities is made on account of

the principal of or Interest (including Contingent Interest, if any) on, or with respect to the conversion of, the Securities (except, to the extent required by applicable law, payments made pursuant to Article VIII from monies deposited with the Trustee pursuant thereto prior to commencement of proceedings for such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization of the Company or bankruptcy, insolvency, receivership or other proceeding, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled, except for the provision of this Article X , shall (except as aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Debt (pro rata to such holders on the basis of the respective amounts of Senior Debt held by such holders, or as otherwise required by law or a court order) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Debt may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Debt in full in cash, or other payment satisfactory to the holders of Senior Debt, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt, before any payment or distribution is made to the Holders of the Securities or to the Trustee.

For purposes of this Article X , the words, “cash, property or securities” shall not be deemed to include shares of Capital Stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article X with respect to the Securities to the payment of all Senior Debt which may at the time be outstanding; provided that (i) the Senior Debt is assumed by the new corporation, if any, resulting from any reorganization or readjustment, and (ii) the rights of the holders of Senior Debt (other than leases which are not assumed by the Company or the new corporation, as the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance, transfer or lease of all or substantially all its property to another corporation upon the terms and conditions provided for in Article IV shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 10.2 if such other corporation shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions stated in Article IV .

If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt or their Representatives of such acceleration. The Company shall not pay the Securities until five days after the holders or Representatives for the holders of Senior Debt receive notice of the acceleration and after which the Company shall pay the Securities only if this Article X otherwise permits payment at that time.

In the event that, notwithstanding the foregoing provisions, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (including, without limitation, by way of setoff or otherwise), prohibited by the

foregoing, shall be received by the Trustee or the Holders of the Securities before all Senior Debt is paid in full, in cash or other payment satisfactory to the holders of Senior Debt, or provision is made for such payment thereof in accordance with its terms in cash or other payment satisfactory to the holders of Senior Debt, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Debt or their Representative or Representatives, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in full, in cash or other payment satisfactory to the holders of Senior Debt or their Representative, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Debt.

Nothing in this Section 10.2 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.10 and Section 7.7 . This Section 10.2 shall be subject to the further provisions of Section 10.5 .

SECTION 10.3. Subrogation of Securities .

Subject to the payment in full, in cash or other payment satisfactory to the holders of Senior Debt, of all Senior Debt, the rights of the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article X (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to other indebtedness of the Company to substantially the same extent as the Securities are subordinated and is entitled to like rights of subrogation) to the rights of the holders of Senior Debt to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Debt until the principal of and Interest on the Securities shall be paid in full in cash or other payment satisfactory to the Holders of Securities; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article X , and no payment over pursuant to the provisions of this Article X , to or for the benefit of the holders of Senior Debt by Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment by the Company to or on account of the Senior Debt; and no payment or distribution of cash, property or securities to or for the benefit of the Holders of the Securities pursuant to the subrogation provisions of this Article X , which would otherwise have been paid to the holders of Senior Debt shall be deemed to be a payment by the Company to or for the account of the Securities. It is understood that the provisions of this Article X are and are intended solely for the purposes of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Debt, on the other hand.

Nothing contained in this Article X or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Debt, and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of and Interest (including Contingent Interest, if any) on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company other than the holders of the Senior Debt.

Upon any payment or distribution of assets of the Company referred to in this Article X , the Trustee, subject to the provisions of Section 7.1 , and the Holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon and all other facts pertinent thereto or to this Article X .

SECTION 10.4. Authorization to Effect Subordination .

Each Holder of a Security by the Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article X and appoints the Trustee to act as the Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 10.3 hereof at least 30 days before the expiration of the time to file such claim, the holders of any Senior Debt or their representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Securities.

SECTION 10.5. Notice to Trustee .

The Company shall give prompt written notice in the form of an Officers’ Certificate to a Trust Officer of the Trustee and to any Paying Agent of any fact known to the Company that would prohibit the making of any payment of monies to or by the Trustee or any Paying Agent in respect of the Securities pursuant to the provisions of this Article X . Notwithstanding the provisions of this Article X or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article X , unless and until a Trust Officer of the Trustee shall have received written notice thereof at the applicable corporate trust office from the Company (in the form of an Officers’ Certificate) or a Representative or a Holder or Holders of Senior Debt or from any trustee thereof; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.1 , shall be entitled in all respects to assume that no such facts exist; provided that, if on a date not less than two Business Days prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitation, the payment of the principal of or Interest on any Security) the Trustee shall not have received, with respect to such monies, the notice provided for in this Section 10.5 , then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date. Notwithstanding anything in this Article X to the contrary, nothing shall prevent any payment by the Trustee to the Holders of monies deposited with it pursuant to Article VIII , and any such payment shall not be subject to the provisions of this Article X.

The Trustee, subject to the provisions of Section 7.1 , shall be entitled to rely on the delivery to it of a written notice by a Representative or a person representing himself to be a holder of Senior Debt (or a trustee on behalf of such holder) to establish that such notice has been given by a Representative or a holder of Senior Debt. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article X , the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article X , and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

SECTION 10.6. Trustee’s Relation to Senior Debt .

The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article X in respect of any Senior Debt at any time held by it, to the same extent as any other holder of Senior Debt, and nothing in Section 7.11 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder.

With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article X , and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and, subject to the provisions of Section 7.1 , the Trustee shall not be liable to any holder of Senior Debt if it shall pay over or deliver to Holders of Securities, the Company or any other Person money or assets to which any holder of Senior Debt shall be entitled by virtue of this Article X or otherwise.

SECTION 10.7. No Impairment of Subordination .

No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof with which any such holder may have or otherwise be charged.

SECTION 10.8. Certain Conversions Not Deemed Payment .

For the purposes of this Article X only, the issuance and delivery of Common Stock and the payment of cash in lieu of fractional shares of such Common Stock upon conversion of a Security in accordance with Article XII shall not be deemed to constitute a payment or distribution on account of the principal of or Interest on such Security. Nothing contained in this Article X or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than holders of Senior Debt and the Holders, the right,

which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article XII .

SECTION 10.9. Article Applicable to Payment Agents .

If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article shall (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided , however, that the first paragraph of Section 10.10 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

SECTION 10.10. Senior Debt Entitled to Rely .

The holders of Senior Debt (including, without limitation, Designated Senior Debt) shall have the right to rely upon this Article X , and no amendment or modification of the provisions contained herein shall diminish the rights of such holders unless such holders shall have agreed in writing thereto.

ARTICLE XI

Purchase at Option of Holder Upon a Fundamental Change; Repurchase at the Option of Holders

SECTION 11.1. Purchase at the Option of the Holder Upon a Fundamental Change .

If a Fundamental Change shall occur at any time, each Holder shall have the right, at such Holder’s option, to require the Company to purchase any or all of such Holder’s Securities on a date, of the Company’s choosing that is not less than 20 nor more than 35 Business Days after the date of the Company Notice of the occurrence of such Fundamental Change (subject to extension to comply with applicable law, as provided in Section 11.3(d) ) (the “ Fundamental Change Purchase Date ”). The Securities shall be repurchased in integral multiples of $1,000 of the principal amount. The Company shall purchase such Securities at a price (the “ Fundamental Change Purchase Price ”), which shall be paid in cash, equal to 100% of the principal amount of the Securities to be repurchased plus accrued and unpaid interest, including Contingent Interest, if any, to but excluding the Fundamental Change Purchase Date (unless the Fundamental Change Purchase Date is between a Regular Record Date and the interest payment date to which it relates, in which case such accrued and unpaid interest will be paid to the Holder as of such Regular Record Date).

(a) Notice of Fundamental Change . The Company, or at its request (which must be received by the Paying Agent at least three Business Days (or such lesser period as agreed to by the Paying Agent) prior to the date the Paying Agent is requested to give such notice as described below), the Paying Agent in the name of and at the expense of the Company, shall mail to all Holders and the Trustee a Company Notice of the occurrence of a Fundamental

Change and of the purchase right arising as a result thereof, including the information required by Section 11.3(a) hereof, on or before the 20th day after the occurrence of such Fundamental Change. The Company shall promptly furnish to the Paying Agent a copy of such Company Notice.

(b) Exercise of Option . For a Security to be so purchased at the option of the Holder, the Paying Agent must receive such Security duly endorsed for transfer, together with a written notice of purchase (a “ Fundamental Change Purchase Notice ”) and the form entitled “Form of Fundamental Change Purchase Notice” on the reverse thereof duly completed, on or before the Fundamental Change Purchase Date. The Fundamental Change Purchase Notice shall state:

(1) if certificated, the certificate numbers of the Securities which the Holder shall deliver to be purchased;

(2) the portion of the principal amount of the Securities which the Holder shall deliver to be purchased, which portion must be $1,000 in principal amount or an integral multiple thereof; and

(3) that such Securities shall be purchased as of the Fundamental Change Purchase Date pursuant to the terms and conditions specified in paragraph 7 of the Securities and in this Indenture.

(c) Procedures . The Company shall purchase from a Holder, pursuant to this Section 11.1 , Securities if the principal amount of such Securities is $1,000 or a multiple of $1,000 if so requested by such Holder.

Any purchase by the Company contemplated pursuant to the provisions of this Section 11.1 shall be consummated by the delivery of the Fundamental Change Purchase Price to be received by the Holder promptly following the later of the Fundamental Change Purchase Date or the time of book-entry transfer or delivery of the Securities.

Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Purchase Notice contemplated by this Section 11.1 shall have the right at any time prior to the close of business on the Business Day prior to the Fundamental Change Purchase Date to withdraw such Fundamental Change Purchase Notice (in whole or in part) by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 11.3(b) .

The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or written notice of withdrawal thereof.

On or before 10:00 a.m. (New York City time) on the Fundamental Change Purchase Date, the Company shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust) cash sufficient to pay the aggregate Fundamental Change Purchase Price of the Securities to be purchased pursuant to this Section 11.1 . Payment by the Paying Agent of the Fundamental Change Purchase Price for such Securities shall be made promptly following the later of the

Fundamental Change Purchase Date or the time of book-entry transfer or delivery of such Securities. Subject to Section 12.2 herein and paragraph 8 of the Securities, no payment or adjustment shall be made for dividends on the Common Stock the record date for which occurred on or prior to the Fundamental Change Purchase Date. If the Paying Agent holds, in accordance with the terms of this Indenture, cash sufficient to pay the Fundamental Change Purchase Price of such Securities on the Business Day immediately following the Fundamental Change Purchase Date, then, on and after such date, such Securities shall cease to be outstanding and interest (including Contingent Interest, if any), on such Securities shall cease to accrue, whether or not book-entry transfer of such Securities is made or such Securities are delivered to the Paying Agent, and all other rights of the Holder shall terminate (other than the right to receive the Fundamental Change Purchase Price and previously accrued and unpaid interest (including Contingent Interest, if any), upon delivery or transfer of the Securities). Nothing herein shall preclude any withholding tax required by law.

The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all cash held by the Paying Agent for the payment of the Fundamental Change Purchase Price and shall notify the Trustee of any default by the Company in making any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall segregate the cash held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to deliver all cash held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no further liability for the cash delivered to the Trustee.

SECTION 11.2. Purchase of Securities at the Option of the Holder .

(a) On June 1, 2018 (the “ Purchase Date ”), at a Purchase Price, which shall be paid in cash, equal to 100% of the principal amount of the Securities to be repurchased plus accrued and unpaid interest, including any Contingent Interest, to but excluding the Purchase Date (unless the Purchase Date is between a Regular Record Date and the interest payment date to which it relates, in which case such accrued and unpaid interest will be paid to the Holder as of such Regular Record Date), a Holder shall have the option to require the Company to purchase all or a portion of the outstanding Securities held by such Holder, upon:

(1) delivery to the Paying Agent by the Holder of a written notice of purchase (a “ Purchase Notice ”) at any time from the opening of business on the date that is 20 Business Days prior to a Purchase Date until the close of business on the fifth Business Day prior to such Purchase Date, stating:

(i) if certificated, the certificate numbers of the Securities which the Holder will deliver to be purchased, or, if not certificated, the Purchase Notice must comply with appropriate DTC procedures;

(ii) the portion of the principal amount of the Securities which the Holder will deliver to be purchased, which portion must be $1,000 in principal amount or an integral multiple thereof;

(iii) that such Securities shall be purchased as of the Purchase Date pursuant to the terms and conditions specified in paragraph 7 of the Securities and in this Indenture; and

(2) delivery or book-entry transfer of such Securities to the Paying Agent prior to, on or after the Purchase Date (together with all necessary endorsements) at the offices of the Paying Agent, such delivery or transfer being a condition to receipt by the Holder of the Purchase Price therefor; provided, however, that such Purchase Price shall be so paid pursuant to this Section 11.2 only if the Securities so delivered or transferred to the Paying Agent shall conform in all respects to the description thereof in the related Purchase Notice.

(b) The Company shall purchase from a Holder, pursuant to this Section 11.2 , Securities if the principal amount of such Securities is $1,000 or a multiple of $1,000 if so requested by such Holder.

(c) Any purchase by the Company contemplated pursuant to the provisions of this Section 11.2 shall be consummated by the delivery of the Purchase Price to be received by the Holder promptly following the later of the Purchase Date or the time of book-entry transfer or delivery of the Securities.

(d) Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Purchase Notice contemplated by this Section 11.2 shall have the right at any time prior to the close of business on the Business Day prior to the Purchase Date to withdraw such Purchase Notice (in whole or in part) by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 11.3(b) .

(e) The Paying Agent shall promptly notify the Company of the receipt by it of any Purchase Notice or written notice of withdrawal thereof.

(f) On or before 10:00 a.m. (New York City time) on the Purchase Date, the Company shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust) cash sufficient to pay the aggregate Purchase Price of the Securities to be purchased pursuant to this Section 11.2 . Payment by the Paying Agent of the Purchase Price for such Securities shall be made promptly following the later of the Purchase Date or the time of book-entry transfer or delivery of such Securities. Subject to Section 12.2 herein and paragraph 8 of the Securities, no payment or adjustment shall be made for dividends on the Common Stock the record date for which occurred on or prior to the Purchase Date. If the Paying Agent holds, in accordance with the terms of the Indenture, cash sufficient to pay the Purchase Price of such Securities on the Purchase Date, then, on and after such date, such Securities shall cease to be outstanding and interest (including any Contingent Interest), on such Securities shall cease to accrue, whether or not book-entry transfer of such Securities is made or such Securities are delivered to the Paying Agent, and all other rights of the Holder shall terminate (other than the right to receive the Purchase Price and previously accrued interest (including any Contingent Interest), upon delivery or transfer of the Securities). Nothing herein shall preclude any withholding tax required by law.

(g) The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all cash held by the Paying Agent for the payment of the Purchase Price and shall notify the Trustee of any default by the Company in making any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall segregate the cash held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to deliver all cash held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no further liability for the cash delivered to the Trustee.

SECTION 11.3. Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change and Purchase of Securities at the Option of the Holder .

(a) Notice of Purchase Date or Fundamental Change . The Company shall send notices (each, a “ Company Notice ”) to the Holders (and to beneficial owners as required by applicable law) at their addresses shown in the Securities Register maintained by the Registrar, and delivered to the Trustee and Paying Agent, not less than 25 Business Days prior to the Purchase Date, or on or before the 20th day after the occurrence of the Fundamental Change, as the case may be (each such date of delivery, a “ Company Notice Date ”). Each Company Notice shall include a form of Purchase Notice or Fundamental Change Purchase Notice to be completed by a Holder and shall state:

(1) the applicable Purchase Price or Fundamental Change Purchase Price, excluding accrued and unpaid interest, and any Contingent Interest, Conversion Rate at the time of such notice and any expected adjustments to the Conversion Rate and, to the extent known at the time of such notice, the amount of interest (including any Contingent Interest), if any, that will be payable with respect to the Securities on the applicable Purchase Date or Fundamental Change Purchase Date;

(2) the applicable Purchase Date or Fundamental Change Purchase Date and the last date on which a Holder may exercise its repurchase rights under Section 11.1 or 11.2 , as applicable;

(3) the name and address of the Paying Agent and the Conversion Agent;

(4) that Securities must be surrendered to the Paying Agent to collect payment of the Purchase Price or Fundamental Change Purchase Price;

(5) that Securities as to which a Purchase Notice or Fundamental Change Purchase Notice has been given may be converted only if the applicable Purchase Notice or Fundamental Change Purchase Notice has been withdrawn in accordance with the terms of this Indenture;

(6) that the Purchase Price or Fundamental Change Purchase Price for any Securities as to which a Purchase Notice or a Fundamental Change Purchase Notice, as applicable, has been given and not withdrawn shall be paid by the Paying Agent

promptly following the later of the Purchase Date or Fundamental Change Purchase Date, as applicable, or the time of book-entry transfer or delivery of such Securities;

(7) the procedures the Holder must follow under Sections 11.1 or 11.2 , as applicable, and Section 11.3 ;

(8) briefly, the conversion rights of the Securities including, if applicable, the applicable Conversion Rate and any adjustments to the applicable Conversion Rate;

(9) that, unless the Company defaults in making payment of such Purchase Price or Fundamental Change Purchase Price on Securities covered by any Purchase Notice or Fundamental Change Purchase Notice, as applicable, interest (including any Contingent Interest), will cease to accrue on and after the Purchase Date or Fundamental Change Purchase Date, as applicable;

(10) the CUSIP or ISIN number of the Securities;

(11) the procedures for withdrawing a Purchase Notice or Fundamental Change Purchase Notice; and

(12) in the case of a Company Notice pursuant to Section 11.1 , the events causing a Fundamental Change and the date of the Fundamental Change.

Simultaneously with providing such Company Notice, the Company will publish a notice containing the information in such Company Notice in a newspaper of general circulation in The City of New York or publish such information on its then existing website or through such other public medium as it may use at the time.

(b) Effect of Purchase Notice or Fundamental Change Purchase Notice; Effect of Event of Default . Upon receipt by the Company of the Purchase Notice or Fundamental Change Purchase Notice specified in Section 11.2(a) or Section 11.1(b) , as applicable, the Holder of the Securities in respect of which such Purchase Notice or Fundamental Change Purchase Notice, as the case may be, was given shall (unless such Purchase Notice or Fundamental Change Purchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Purchase Price or Fundamental Change Purchase Price with respect to such Securities. Such Purchase Price or Fundamental Change Purchase Price shall be paid by the Paying Agent to such Holder promptly following the later of (x) the Purchase Date or the Fundamental Change Purchase Date, as the case may be, with respect to such Securities (provided the conditions in Section 11.2(a) or Section 11.1(b) , as applicable, have been satisfied) and (y) the time of delivery or book-entry transfer of such Securities to the Paying Agent by the Holder thereof in the manner required by Section 11.2(a) or Section 11.1(b) , as applicable. Securities in respect of which a Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has been given by the Holder thereof may not be converted on or after the date of the delivery of such Purchase Notice or Fundamental Change Purchase Notice, as the case may be, unless such Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has first been validly withdrawn as specified in the following two paragraphs.

A Purchase Notice or Fundamental Change Purchase Notice, as the case may be, may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent at any time prior to 5:00 p.m., New York City time, on the Business Day prior to the Purchase Date or the Fundamental Change Purchase Date, as the case may be, to which it relates specifying:

(1) the principal amount of the Securities with respect to which such notice of withdrawal is being submitted;

(2) if certificated, the certificate number of the Securities in respect of which such notice of withdrawal is being submitted, or, if not certificated, the written notice of withdrawal must comply with appropriate DTC procedures; and

(3) the principal amount, if any, of such Securities which remains subject to the original Purchase Notice or Fundamental Change Purchase Notice, as the case may be, and which has been or shall be delivered for purchase by the Company.

There shall be no purchase of any Securities pursuant to Section 11.2 or Section 11.1 , if an Event of Default has occurred and is continuing (other than a default that is cured by the payment of the Purchase Price or Fundamental Change Purchase Price, as the case may be). The Paying Agent shall promptly return to the respective Holders thereof any Securities (x) with respect to which a Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default that is cured by the payment of the Purchase Price or Fundamental Change Purchase Price, as the case may be) in which case, upon such return, the Purchase Notice or Fundamental Change Purchase Notice with respect thereto shall be deemed to have been withdrawn.

(c) Securities Purchased in Part . Any Securities that are to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Company shall execute and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder of such Securities, without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Securities so surrendered which is not purchased or redeemed.

(d) Covenant to Comply with Securities Laws Upon Purchase of Securities . In connection with any offer to purchase Securities under Section 11.2 or Section 11.1 , the Company shall, to the extent applicable, (a) comply with Rules 13e-4 and 14e-1 (and any successor provisions thereto) and any other tender offer rule, in each case under the Exchange Act, if applicable; (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, if applicable; and (c) otherwise comply with all applicable federal and state securities laws so as to permit the rights and obligations under Section 11.2 or Section 11.1 to be exercised in the time and in the manner specified in Section 11.2 or Section 11.1 .

(e) Repayment to the Company . The Trustee and the Paying Agent shall return to the Company any cash or property that remains unclaimed as provided in paragraph 10 of the Securities, together with interest that the Trustee or Paying Agent, as the case may be, has agreed to pay, if any, held by them for the payment of a Purchase Price or Fundamental Change Purchase Price, as the case may be; provided, however, that to the extent that the aggregate amount of cash or property deposited by the Company pursuant to Section 11.2(f) or Section 11.1(c) , as applicable, exceeds the aggregate Purchase Price or Fundamental Change Purchase Price, as the case may be, of the Securities or portions thereof which the Company is obligated to purchase as of the Purchase Date or Fundamental Change Purchase Date, as the case may be, then promptly on and after the Business Day following the Purchase Date or Fundamental Change Purchase Date, as the case may be, the Trustee and the Paying Agent shall return any such excess to the Company together with interest that the Trustee or Paying Agent, as the case may be, has agreed to pay, if any.

(f) Officers’ Certificate . At least five Business Days before the Company Notice Date, the Company shall deliver an Officers’ Certificate to the Trustee specifying whether the Company desires the Trustee to give the Company Notice required by Section 11.3(a) herein; provided, however, that, in all cases, the text of the Company Notice shall be prepared by the Company.

(g) Company’s Determination Final and Binding . All questions as to the validity, eligibility (including time of receipt) and acceptance of any Securities for repurchase shall be determined by the Company in good faith, whose determination shall be final and binding absent manifest error.

ARTICLE XII

Conversion

SECTION 12.1. Conversion of Securities.

(a) Right to Convert . A Holder may convert its Securities at any time during which the conditions stated in paragraph 8 of the Securities are met. The Company will determine at the beginning of each fiscal quarter commencing at any time after September 30, 2006 (through the fiscal year ending March 31, 2036), whether the Securities are convertible pursuant to paragraph 8(a) of the Securities and notify the Trustee thereof. Whenever the Securities shall become convertible upon one or more of the conditions stated in paragraph 8 of the Securities being met, the Company or, at the Company’s request, the Trustee in the name and at the expense of the Company, shall notify the Holders of the event triggering such convertibility in the manner provided in Section 13.2 , and the Company shall also publicly announce such information by publication on the Company’s website or through such other public medium as it may use at such time. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice.

A Holder converting its Securities must follow the procedures set forth in paragraph 8 of the Securities. A Holder may convert a portion of the principal amount of Securities if the portion is $1,000 or a multiple of $1,000.

The cash payable, and the number of shares of Common Stock issuable, if any, upon conversion of a Security shall be determined as set forth in Section 12.1(c) .

(b) Conversion Procedures . To convert Securities, a Holder must satisfy the requirements in paragraph 8 of the Securities. The date on which the Holder satisfies all those requirements is the “ Conversion Date ”.

On conversion of Securities, any accrued and unpaid interest with respect to the converted Securities shall not be canceled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through delivery of cash, or a combination of cash and the Common Stock (together with the cash payment, if any, in lieu of fractional shares), in exchange for the Securities being converted pursuant to the provisions hereof, and the cash and the Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive evidence of such Fair Market Value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of any shares of Common Stock (together with any such cash payment in lieu of fractional shares) shall be treated as issued, to the extent thereof, first in exchange for interest accrued and unpaid through the Conversion Date, and the balance, if any, of such cash and such Fair Market Value (determined as aforesaid) of any such Common Stock (and any such cash payment) shall be treated as issued in exchange for the principal amount of the Securities being converted pursuant to the provisions hereof. Notwithstanding the foregoing, a Holder shall be entitled to receive accrued and unpaid interest, including any Contingent Interest, in respect of a Security (w) if the Company calls such Security for redemption and such Holder converts its Security prior to the Redemption Date, (x) if the Company establishes a Fundamental Change Purchase Date during the period from the close of business on any Regular Record Date to the opening of business on the corresponding interest payment date that falls within this period or on such interest payment day and such Holder converts its Security prior to close of business on the second Trading Day prior to the Fundamental Change Purchase Date, (y) in respect of which a Conversion Notice was received after 5:00 p.m., New York City time, on the Record Date immediately preceding the final interest payment date or (z) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to a Security

If a Holder converts more than one Security at the same time, the cash and number of shares of Common Stock issuable upon the conversion, if any, shall be based on the total principal amount of the Securities converted.

Upon surrender of a Security that is converted in part, the Company shall execute, and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder, a new Security in an authorized denomination equal in principal amount to the unconverted portion of the Security surrendered.

If the last day on which Securities may be converted is a legal holiday in a place where a Conversion Agent is located, the Securities may be surrendered to that Conversion Agent on the next succeeding day that it is not a legal holiday.

(c) Payment Upon Conversion . Upon any conversion of Securities, the Company will deliver to converting Holders in respect of each $1,000 principal amount of Securities being converted a “ Settlement Amount ” equal to the sum of the Daily Settlement

Amount for each of the 20 consecutive Trading Days during the Cash Settlement Averaging Period.

“ Daily Settlement Amount ”, for each of the 20 consecutive Trading Days during the Cash Settlement Averaging Period, shall consist of:

(i) cash equal to the lesser of $50 and the Daily Conversion Value; and

(ii) to the extent the Daily Conversion Value exceeds $50, a number of shares equal to, (A) the difference between the Daily Conversion Value and $50 (the “ Daily Excess Amount ”), divided by (B) the Last Reported Sale Price of the Common Stock for such day (or the consideration into which the Common Stock has been converted in connection with transactions to which Section 12.3 is applicable); provided that the Company may, pay all or portion of such Daily Excess Amount in cash pursuant to clause (d) and (e) below.

“ Daily Conversion Value ” means, for each of the 20 consecutive Trading Days during the Cash Settlement Averaging Period, one-twentieth (1/20) of the product of (1) the applicable Conversion Rate and (2) the Last Reported Sale Price of the Common Stock (or the consideration into which the Common Stock has been converted in connection with transactions to which Section 12.3 is applicable) on such day. For the purposes of determining the Daily Conversion Value the following provisions shall apply: (i) if the Applicable Consideration includes securities for which the price can be determined in a manner contemplated by the definition of “Last Reported Sale Price,” then the value of such securities shall be determined in accordance with the principles set forth in such definition; (ii) if the Applicable Consideration includes other property (other than securities as to which clause (i) applies or cash), then the value of such property shall be the fair market value of such property as determined by the Company’s Board of Directors in good faith; and (iii) if the Applicable Consideration includes cash, then the value of such cash shall be the amount thereof.

The Settlement Amount will be delivered to converting Holders on the third Business Day immediately following the last day of the Cash Settlement Averaging Period.

(d) Cash Payments in Lieu of Fractional Shares . The Company shall not issue a fractional share of Common Stock upon conversion of Securities. Instead the Company shall deliver cash for the current market value of the fractional share. The current market value of a fractional share shall be determined to the nearest 1/10,000th of a share by multiplying the Last Reported Sale Price of a full share of Common Stock on the Trading Day immediately preceding the Conversion Date by the fractional amount and rounding the product to the nearest whole cent.

(e) Optional Cash Payments in Lieu of Shares . The Company may elect to reduce the number of shares of Common Stock that it shall issue upon conversion of the Securities by specifying a percentage of the Daily Excess Amount that will be settled in cash (the “ Cash Percentage ”), no later than by the close of business on the day prior to the first Trading Day of the applicable Cash Settlement Averaging Period, and the Company will notify the Holder of such Cash Percentage by notifying the Trustee (such notice, the “ Cash Percentage

Notice ”). If the Company elects to specify a Cash Percentage, the amount of cash that it shall deliver in lieu of shares in respect of each Trading Day in the applicable Cash Settlement Averaging Period shall equal the product of (i) the Cash Percentage and (ii) the Daily Excess Amount for such Trading Day. The number of shares of Common Stock deliverable in respect of each Trading Day in the applicable Cash Settlement Averaging Period shall equal (i) the product of (1) 100% minus the Cash Percentage and (2) the Daily Excess Amount for such Trading Day, divided by (ii) the Last Reported Sale Price of the Common Stock (or the consideration into which such Common Stock has been converted in connection with transactions to which Section 12.3 is applicable) for such day. If the Company does not specify a Cash Percentage by the close of business on the Trading Day immediately preceding the start of the applicable Cash Settlement Averaging Period (including by timely revoking a Cash Percentage Notice as set forth below), the Cash Percentage shall be deemed to be zero. To the extent the Cash Percentage is less than 100%, the Company shall, in addition to any amounts payable pursuant to this Clause (e), deliver cash in lieu of any fractional shares of Common Stock in accordance with Cause (d) above. The Company may, at its option, revoke any Cash Percentage Notice by notifying the Trustee no later than by the close of business on the Trading Day immediately preceding the start of the applicable Cash Settlement Averaging Period.

(f) Taxes on Conversion . If a Holder converts Securities, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon the conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Conversion Agent may refuse to deliver the certificates representing the Common Stock being issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which shall be due because the shares are to be issued in a name other than the Holder’s name. Nothing herein shall preclude any withholding of tax required by law.

(g) Certain Covenants of the Company . The Company shall, prior to issuance of any Securities hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Common Stock or shares of Common Stock held in treasury, sufficient number of shares of Common Stock, free of preemptive rights, to permit the conversion of the Securities.

All shares of Common Stock delivered upon conversion of the Securities shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim.

The Company shall endeavor promptly to comply with all federal and state securities laws regulating the order and delivery of shares of Common Stock upon the conversion of Securities, if any, and shall cause to have listed or quoted all such shares of Common Stock on each U.S. national securities exchange or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.

Before taking any action which would cause an adjustment increasing the Conversion Rate to an amount that would cause the Conversion Price to be reduced below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Securities, the Company will take all corporate action which may, in the opinion of its counsel, be necessary

in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

SECTION 12.2. Adjustments to Conversion Rate .

The Conversion Rate shall be adjusted from time to time by the Company as follows (provided that in no event will adjustments to the Conversion Rate solely by reason of clauses (d) or (f) below result in a Conversion Rate that exceeds 17.2325 shares per $1,000 principal amount of Securities, subject to adjustment in the same manner as the Conversion Rate is adjusted pursuant to clauses (a), (b), (c) and (e) below):

(a) If the Company issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:

where,




CR ₀	=	the Conversion Rate in effect immediately prior to the ex-dividend date for such dividend or distribution, or the effective date of such share split or share combination, as the case may be

CR’	=	the Conversion Rate in effect immediately after the ex-dividend date for such dividend or distribution, or the effective date of such share split or share combination, as the case may be

OS ₀	=	the number of shares of Common Stock outstanding immediately prior to such dividend or distribution, or the effective date of such share split or share combination, as the case may be, and

OS’	=	the number of shares of Common Stock outstanding immediately after the such dividend or distribution, or the effective date of such share split or share combination, as the case may be.

Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the Business Day following the date fixed for such determination. The Company will not pay any dividend or make any distribution on shares of Common Stock held in treasury by the Company. If any dividend or distribution of the type described in this Section 12.2(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

As used in this Section 12.2 , ‘‘ ex-dividend date ’’ means the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance or distribution in question.

(b) If the Company issues to all or substantially all holders of its Common Stock any rights or warrants entitling them for a period of not more than 60 calendar days from the record date of such distribution to subscribe for or purchase shares of Common Stock, at a price per share less than the Last Reported Sale Price of Common Stock on the Business Day immediately preceding the date of announcement of such issuance, the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to their expiration):

where,




CR ₀	=	the Conversion Rate in effect immediately prior to announcement of such issuance

CR’	=	the Conversion Rate in effect immediately after announcement of such issuance

OS ₀	=	the number of shares of Common Stock outstanding immediately prior to announcement of such issuance

X	=	the total number of shares of Common Stock issuable pursuant to such rights or warrants, and

Y	=	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period ending on the Business Day immediately preceding the ex-dividend for the issuance of such rights or warrants.

Such adjustment shall be successively made whenever any such rights or warrants are issued and shall become effective immediately after 9:00 a.m., New York City time, on the Business Day following the date fixed for such determination. The Company shall not issue any such rights, options or warrants in respect of shares of Common Stock held in treasury by the Company. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed.

In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Last Reported Sale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on

exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

(c) If the Company distributes shares of Capital Stock, evidences of its indebtedness or other assets or property of the Company to all or substantially all holders of the Common Stock, excluding:

(i) dividends or distributions and rights or warrants referred to in clause (a) or (b) above;

(ii) dividends or distributions paid exclusively in cash; and

(iii) any Spin-Off to which the provisions set forth below in this clause (c) shall apply;

then the Conversion Rate will be adjusted based on the following formula:

where,




CR ₀	=	the Conversion Rate in effect immediately prior to the ex-dividend date for such distribution

CR’	=	the Conversion Rate in effect immediately after the ex-dividend date for such distribution

SP ₀	=	the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Business Day immediately preceding the ex-dividend date for such distribution; and

FMV	=	the fair market value (as determined by the Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Stock on the ex-dividend Date for such distribution.

Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on the Business Day following the date fixed for the determination of stockholders entitled to receive such distribution.

With respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on the Common Stock or shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit (a “ Spin-Off ”) the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the tenth Trading Day immediately following, and including, the effective date of the spin-off will be increased based on the following formula:

where,




CR ₀	=	the Conversion Rate in effect immediately prior to the tenth Trading Day immediately following, and including, the effective date of the spin-off
CR’	=	the Conversion Rate in effect immediately after the tenth Trading Day immediately following, and including, the effective date of the spin-off
FMV ₀	=	the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period after the effective date of the Spin-Off, and
MP ₀	=	the average of the Last Reported Sale Prices of Common Stock over the first 10 consecutive Trading Day period after the effective date of the Spin-Off.

Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the Spin-Off. As a result, any conversion within the ten Trading Days following the effective date of any Spin-Off will be deemed not to have occurred until the end of the ten-Trading Day period.

(d) If any cash dividend or distribution is made to all or substantially all holders of Common Stock during any quarterly fiscal period other than regular quarterly cash dividends that do not exceed $0.09 per share (appropriately adjusted from time to time in a manner inversely proportional to the adjustments of the Conversion Rate) (the “ Initial Dividend Rate ”), the Conversion Rate will be adjusted based on the following formula:

where,




CR ₀	=	the Conversion Rate in effect immediately prior to the ex-dividend date for such distribution

CR’	=	the Conversion Rate in effect immediately after the ex-dividend date for such distribution

SP ₀	=	the Last Reported Sale Prices of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution, and

C	=	the amount in cash per share the Company distributes to holders of Common Stock in excess of the Initial Dividend Threshold, in the case of

a regular quarterly dividend, or, in the case of any other dividend or distribution, the full amount of such dividend or distribution.

Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the record date for such dividend or distribution; provided that if such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for Common Stock, if the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (such last date, the “ Expiration Time ”), the Conversion Rate will be increased based on the following formula:

where,




CR ₀	=	the Conversion Rate in effect on the day immediately following the date such tender or exchange offer expires

CR’	=	the Conversion Rate in effect on the second day immediately following the date such tender or exchange offer expires

AC	=	the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares purchased in such tender or exchange offer

OS ₀	=	the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires

OS’	=	the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires

SP’	=	the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires.

If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

If, however, the application of the foregoing formulas (other than the formula set forth in clause (a) would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made.

Except as stated herein, the Company will not adjust the Conversion Rate for the issuance of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or the right to purchase shares of Common Stock or such convertible or exchangeable securities.

(f) If a Securityholder elects to exchange its notes in connection with a specified corporate transaction pursuant to paragraph 8 of the Securities that occurs prior to June 1, 2018, and the corporate transaction also constitutes a Fundamental Change, the Conversion Rate shall be increased by an additional number of shares of Common Stock (the “ Additional Shares ”) as described below during the period from and including the effective date of the Fundamental Change to and including the Trading Day prior to the related Fundamental Change Purchase Date, provided that if the Stock Price is greater than $180.00 or less than $58.03 (subject in each case to adjustment as described below), the number of Additional Shares shall be zero. Any conversion occurring at a time when the Securities would be convertible in light of the expected or actual occurrence of a Fundamental Change will be deemed to have occurred in connection with such Fundamental Change notwithstanding the fact that a Security may then be convertible because another condition to conversion has been satisfied.

The Company shall provide notice of the occurrence of a Fundamental Change having such effect no later than 25 calendar days prior to the anticipated Effective Date (or if only determinable subsequent to such date, then as promptly as can be determined subsequent to such 25 ^th calendar day)

The number of Additional Shares will be determined by reference to the table attached as Schedule A hereto, based on the date on which such Fundamental Change occurs or becomes effective (the “ Effective Date ”) and the Stock Price with respect to such Fundamental Change; provided that if the Stock Price is between two Stock Price amounts in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares will be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Price amounts and the two dates, as applicable, based on a 365-day year.

The Stock Prices set forth in the first row of the table in Schedule A hereto and set forth in the first paragraph of this Section 12.2(f ) will be adjusted as of any date on which the Conversion Rate of the Securities is adjusted pursuant to this Section 12.2 . The adjusted Stock Prices will equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares will be adjusted in the same manner as the Conversion Rate as set forth in this Section 12.2 .

(g) Notwithstanding the foregoing provisions of this Section 12.2 , no adjustment shall be made thereunder, nor shall an adjustment be made to the ability of Holders of a Security to convert, for any distribution described therein if the Holders will otherwise participate in the distribution without conversion of the Securities.

(h) The Company may (but is not required to) make such increases in the Conversion Rate, in addition to those required by clauses (a) through (f) of this Section 12.2 as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or any similar event treated as such for income tax purposes.

To the extent permitted by applicable law, the Company from time to time may increase the Conversion Rate by any amount for any period of at least 20 days if the Board of Directors shall have made a determination that such increase would be in the best interests of the Company, which determination shall be conclusive.

(i) No adjustment to the Conversion Rate need be made:

(1) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan;

(2) upon the issuance of any shares of Common Stock or options or rights to purchase shares of Common Stock pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries;

(3) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security not described in (ii) above and outstanding as of the date the Securities were first issued;

(4) for a change in the par value of the Common Stock; or

(5) for accrued and unpaid interest (including any Contingent Interest).

To the extent the Securities become convertible into cash, assets or property, no adjustment shall be made thereafter as to the cash, assets or property. Interest shall not accrue on such cash, assets or property.

(j) All calculations under this Article XII shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be. The Company will not be required to make an adjustment in the Conversion Rate unless the adjustment would require a change of at least 1% in the Conversion Rate. However, the Company will carry forward any adjustments that are less than 1% of the Conversion Rate and make such carried forward adjustments, regardless of whether aggregate adjustment is less than 1% within one year of the first such adjustment carried forward, upon redemption, upon a Fundamental Change or upon the Stated Maturity.

(k) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth

a brief statement of the facts requiring such adjustment. Unless and until a Trust Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the Holder of each Security at his last address appearing on the Securities Register provided for in Section 2.5 of this Indenture, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(l) Any case in which this Section 12.2 provides that an adjustment shall become effective immediately after (1) a record date or Stock Record Date for an event, (2) the date fixed for the determination of stockholders entitled to receive a dividend or distribution pursuant to Section 12.2(a) , (3) a date fixed for the determination of stockholders entitled to receive rights or warrants pursuant to Section 12.2(b) or (4) the Expiration Time for any tender or exchange offer pursuant to Section 12.2(e) , (each a “ Determination Date ”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Security converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 12.1 . For purposes of this Section 12.2(l) , the term “ Adjustment Event ” shall mean:

(i) in any case referred to in clause (a) hereof, the occurrence of such event,

(ii) in any case referred to in clause (b) hereof, the date any such dividend or distribution is paid or made,

(iii) in any case referred to in clause (c) hereof, the date of expiration of such rights or warrants, and

(iv) in any case referred to in clause (d) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.

(m) For purposes of this Section 12.2 , the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company.

SECTION 12.3. Effect of Reclassification, Consolidation, Merger or Sale .

(a) If any of the following events occur: (i) any reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which

Section 12.2(c) applies), (ii) any consolidation, merger, binding share exchange or combination of the Company with another Person, or (iii) any sale or conveyance of all or substantially all of the properties and assets of the Company to any other Person in each case as a result of which holders of Common Stock shall be entitled to receive cash, securities or other property with respect to or in exchange for such Common Stock, then the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing that each Security shall be convertible into : (i) cash up to the aggregate principal amount thereof; and (ii) in lieu of Common Stock otherwise deliverable, the same type (in the same proportions) of consideration received by holders of Common Stock in the relevant event (the “ Reference Property ”), subject to our right to deliver cash in lieu of all or a portion of the Reference Property in accordance with applicable procedures set forth in Section 12.1 . For purposes of the foregoing, the type and amount of consideration that a holder of Common Stock would have been entitled to in the case of reclassifications, consolidations, mergers, sales or transfers of assets or other transactions that cause Common Stock to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of shareholder election) will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election. Such supplemental indenture shall provide for provisions and adjustments which shall be as nearly equivalent as may be practicable to the provisions and adjustments provided for in this Article XII and Article XI and the definition of Fundamental Change, as appropriate, as determined in good faith by the Company (which determination shall be conclusive and binding), to make such provisions apply to such other Person if different from the original issuer of the Securities.

(b) The Company shall cause notice of the execution of any supplemental indenture required by this Section 12.3 to be mailed to each holder of Securities, at its address appearing on the Securities Register provided for in Section 2.5 of this Indenture, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

(c) The above provisions of this Section 12.3 shall similarly apply to successive reclassifications, changes, consolidations, mergers, binding share exchanges, combinations, sales and conveyances.

(d) If this Section 12.3 applies to any event or occurrence, Section 12.2 shall not apply in respect of such event or occurrence.

SECTION 12.4. Responsibility of Trustee .

The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to the Company or any holder of Securities to determine the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of

Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Security; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any cash or shares of Common Stock or stock certificates or other securities or property upon the surrender of any Security for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article XII . Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 12.3 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Securities after any event referred to in such Section 12.3(a) or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.1 , may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

SECTION 12.5. Notice to Holders Prior to Certain Actions .

In case after the date hereof:

(a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 12.2 ; or

(b) the Company shall authorize the granting to the holders of all or substantially all of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants; or

(c) of any reclassification or reorganization of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;

the Company shall cause to be filed with the Trustee and to be mailed to each Holder of Securities at his address appearing on the Securities Register provided for in Section 2.5 of this Indenture, as promptly as possible but in any event at least three (3) calendar days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is

expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

Notwithstanding and in addition to the foregoing, the Company shall be required to give the notices specified in paragraph 7 of the Securities.

SECTION 12.6. Stockholder Rights Plan .

To the extent that the Company has a rights plan in effect upon conversion of the Securities into Common Stock, the Holder will receive, in addition to the Common Stock, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Stock, in which case the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of Common Stock, shares of the Company’s capital stock, evidences of indebtedness or assets as described in Section 12.2(c) above, subject to readjustment in the event of the expiration, termination or redemption of such rights. In lieu of any such adjustment, the Company may amend such applicable stockholder rights agreement to provide that upon conversion of the Securities the Holders will receive, in addition to the Common Stock issuable upon such conversion, the rights which would have attached to such Common Stock if the rights had not become separated from the Common Stock under such applicable stockholder rights agreement.

ARTICLE XIII

Miscellaneous

SECTION 13.1. Trust Indenture Act Controls .

If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control.

SECTION 13.2. Notices .

Any notice or communication shall be in writing, by telecopy, facsimile transmission, overnight courier guaranteeing next day delivery, delivered in person or mailed by first-class mail addressed as follows:

if to the Company:

Trinity Industries, Inc.

2525 Stemmons Freeway

Dallas, Texas 75207-2401

Attn: S. Theis Rice

Telephone No.: (214) 589-8170

Telecopier No.: (214) 589-8824

With a copy to:

Haynes and Boone, LLP

901 Main Street

Suite 3100

Dallas, Texas 75202

Attn: W. Scott Wallace

Telephone No.: (214) 651-5587

Telecopier No.: (214) 200-0674

if to the Trustee:

Wells Fargo Bank N.A.

Corporate Trust Services

MAC T5303-022

1445 Ross Ave., 2 ^nd Floor

Dallas, TX 75202

Attn: Nancye Patterson

Telephone No.: (214) 777-4078

Telecopier No.: (214) 777-4086

E-Mail: nancye.patterson@wellsfargo.com

For purposes of Section 2.5 (with respect to presentation of Securities for payment or for registrations of transfer or exchange) if to the Trustee:

Wells Fargo Bank, N.A.

MAC N9303-121

Corporate Trust Operation

608 2 ^nd Ave.

Minneapolis, MN 55479

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied or sent by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight and courier guaranteeing next day delivery.

Any notice or communication mailed to a registered Securityholder shall be mailed to the Securityholder at the Securityholder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee shall be effective only upon receipt.

SECTION 13.3. Communication by Holders with other Holders .

Securityholders may communicate pursuant to TIA § 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

SECTION 13.4. Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, the Company has complied with all conditions precedent, if any, provided for in this Indenture relating to the proposed action; and

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, the Company has complied with all such conditions precedent.

SECTION 13.5. Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

(1) a statement that the individual making such certificate or opinion has read such covenant or condition;

(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 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 there is compliance with such covenant or condition; and

(4) a statement as to whether or not, in the opinion of such individual, there is compliance with such covenant or condition.

In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

SECTION 13.6. When Securities Disregarded .

In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

SECTION 13.7. Rules by Trustee, Paying Agent and Registrar .

The Trustee may make reasonable rules for action by, or a meeting of, Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions.

SECTION 13.8. Legal Holidays .

A “ Legal Holiday ” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York City. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest, Contingent Interest, if any, shall accrue for the intervening period. If a Regular Record Date is a Legal Holiday, the record date shall not be affected.

SECTION 13.9. GOVERNING LAW; WAIVER OF JURY TRIAL .

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY; PROVIDED, HOWEVER, THAT SUCH WAIVER OF TRIAL BY JURY BY THE COMPANY AND THE TRUSTEE SHALL IN NO WAY LIMIT ANY AND ALL RIGHT TO TRIAL BY JURY OF ANY HOLDER OF THE SECURITIES IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

SECTION 13.10. No Recourse Against Others .

An incorporator, director, officer, employee, Affiliate or stockholder of the Company, solely by reason of this status, shall not have any liability for any obligations of the Company under the Securities, this Indenture or the Subsidiary Guarantees or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities.

SECTION 13.11. Successors .

All agreements of the Company in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 13.12. Multiple Originals .

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.

SECTION 13.13. Table of Contents; Headings .

The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 13.14. Force Majeure .

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

SECTION 13.15. Severability Clause .

In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.




		TRINITY INDUSTRIES, INC .

		By:
		Name:
		Title:

		WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

		By:
		Name:
		Title:

SCHEDULE A

* The following table sets forth the stock price and the number of additional shares to be received per $1,000 principal amount of notes:




Effective date	$ 58.03		$ 60.00		$ 70.00		$ 80.00		$ 90.00		$100.00		$110.00		$120.00		$130.00		$140.00		$150.00		$160.00		$170.00		$180.00
6/7/2006		4.4677		4.6307		3.5911		2.8558		2.3141		1.9022		1.5809		1.3253		1.1184		0.9487		0.8077		0.6896		0.5897		0.5047
6/1/2007		4.4677		4.6031		3.5529		2.8143		2.2728		1.8630		1.5446		1.2921		1.0884		0.9216		0.7834		0.6679		0.5703		0.4874
6/1/2008		4.4677		4.5734		3.5102		2.7673		2.2260		1.8185		1.5035		1.2547		1.0546		0.8914		0.7565		0.6439		0.5491		0.4687
6/1/2009		4.4677		4.5639		3.4768		2.7235		2.1788		1.7716		1.4587		1.2131		1.0165		0.8568		0.7253		0.6159		0.5241		0.4464
6/1/2010		4.4677		4.5425		3.4284		2.6637		2.1160		1.7101		1.4008		1.1597		0.9679		0.8130		0.6861		0.5809		0.4929		0.4187
6/1/2011		4.4677		4.5035		3.3588		2.5820		2.0322		1.6292		1.3254		1.0906		0.9055		0.7571		0.6362		0.5366		0.4536		0.3839
6/1/2012		4.4677		4.4502		3.2687		2.4783		1.9270		1.5288		1.2326		1.0067		0.8305		0.6906		0.5776		0.4851		0.4086		0.3446
6/1/2013		4.4677		4.3747		3.1482		2.3419		1.7902		1.3994		1.1141		0.9003		0.7362		0.6075		0.5049		0.4218		0.3535		0.2967
6/1/2014		4.4677		4.2824		2.9957		2.1681		1.6161		1.2357		0.9655		0.7681		0.6202		0.5066		0.4176		0.3464		0.2886		0.2410
6/1/2015		4.4677		4.1633		2.7930		1.9361		1.3851		1.0208		0.7732		0.5998		0.4749		0.3823		0.3117		0.2565		0.2124		0.1764
6/1/2016		4.4677		4.0128		2.5151		1.6145		1.0683		0.7327		0.5222		0.3865		0.2961		0.2335		0.1882		0.1541		0.1275		0.1059
6/1/2017		4.4677		3.8633		2.1239		1.1363		0.6051		0.3317		0.1945		0.1258		0.0899		0.0696		0.0567		0.0474		0.0401		0.0338
6/1/2018		4.4677		3.9079		1.5260		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000

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EXHIBIT A

[FORM OF FACE OF SECURITY]

[Global Security Legend, if applicable]

No. [___] Principal Amount $450,000,000, as revised by the Schedule of Increases and Decreases in Global Security attached hereto

CUSIP NO.: 896522 AF 6

ISIN: [___________]

3 ⁷ / ₈ % Convertible Subordinated Notes due 2036

Trinity Industries, Inc., a Delaware corporation, promises to pay to [___], or registered assigns, the principal sum of $450,000,000 Dollars, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on June 1, 2036.

Interest Payment Dates: June 1 and December 1

Regular Record Dates: May 15 and November 15

Additional provisions of this Security are set forth on the other side of this Security.

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IN WITNESS WHEREOF, Trinity Industries, Inc. has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated: June 7, 2006




		TRINITY INDUSTRIES, INC.

		By:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Trustee, certifies

that this is one of

the Securities referred

to in the Indenture.




By:

Authorized Signatory

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[FORM OF REVERSE SIDE OF SECURITY]

3 ⁷ / ₈ % Convertible Subordinated Notes due 2036

1. Interest

Trinity Industries, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate of 3 ⁷ / ₈ % per annum.

The Company will pay interest semiannually on June 1 and December 1 of each year commencing December 1, 2006. Interest on the Securities will accrue from the most recent date to which interest has been paid on the Securities or, if no interest has been paid, from June 7, 2006. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

Interest on Securities converted after the close of business on a Regular Record Date, but prior to the opening of business on the corresponding interest payment date, will be paid to the Holder on the Regular Record Date but, upon conversion, the Holder must pay the Company the interest which has accrued and will be paid to the Holder on such interest payment date. No such payment need be made with respect to Securities in respect of which a Redemption Date has been declared that falls within such period or on such interest payment date. A Holder shall be entitled to receive accrued and unpaid interest, including any Contingent Interest, in respect of a Security (A) if the Company calls such Security for redemption and such Holder converts such Security on or prior to the Redemption Date, (B) if the Company establishes a Fundamental Change Purchase Date during the period from the close of business on any Regular Record Date to the opening of business on the corresponding interest payment date has been established that falls within this period or on such interest payment day and such Holder converts its Security prior to the Fundamental Change Purchase Date, (C) if a Holder converts the Securities following the Record Date immediately preceding the Stated Maturity, or (D) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to a Security.

If the principal hereof or any portion of such principal is not paid when due (whether upon acceleration, upon the date set for payment of the redemption price pursuant to paragraph 6 hereof, upon the date set for payment of a Purchase Price or Fundamental Change Purchase Price pursuant to paragraph 7 hereof or upon the Stated Maturity of this Security) or if interest (including Contingent Interest, if any) due hereon or any portion of such interest is not paid when due in accordance with this paragraph, then in each such case the overdue amount shall bear interest at the rate of 3 ⁷ / ₈ % per annum, compounded semiannually (to the extent that the payment of such interest shall be legally enforceable), which interest shall accrue from the date such overdue amount was due to the date payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable on demand.

2. Method of Payment

By no later than 10:00 a.m. (New York City time) on the date on which any principal of or interest (including Contingent Interest, if any), on any Security is due and

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payable, the Company shall deposit with the Paying Agent money sufficient to pay such amount. The Company will pay interest (including Contingent Interest, if any) (except Defaulted Interest) to the Persons who are registered Holders of Securities at the close of business on the May 15 or November 15 next preceding the interest payment date even if Securities are cancelled, repurchased or redeemed after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal and interest (including any Contingent Interest), if any, will be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will pay principal of Definitive Securities at the office or agency designated by the Company in the Borough of Manhattan, The City of New York. Interest (including Contingent Interest, if any), on Definitive Securities will be payable (i) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the relevant record date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Registrar to the contrary.

3. Paying Agent, Registrar, Conversion Agent, Authenticating Agent and Bid Agent

Initially, Wells Fargo Bank, National Association (the “Trustee”), will act as Trustee, Paying Agent, Registrar, Conversion Agent, Authenticating Agent and Bid Agent. The Company may appoint and change any Paying Agent, Registrar or co-registrar, Conversion Agent, Authenticating Agent or Bid Agent without notice to any Securityholder. The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-registrar, Conversion Agent or Authenticating Agent, subject to the terms of the Indenture. Neither the Company nor any of its Affiliates may act as Bid Agent.

4. Indenture

The Company issued the Securities under an Indenture dated as of June 7, 2006 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of those terms.

The Securities are general unsecured subordinated obligations of the Company limited to $500.0 million aggregate principal amount, except for Securities authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of other Securities pursuant to Section 2.8 , 2.9 , 2.10 , 2.12 , 2.13 , 5.8 , 9.5 , 11.3 or 12.1 of the Indenture. The Securities will be treated as a single class of securities under the Indenture. The Indenture

A-6

imposes certain limitations on, among other things, consolidation, mergers and sale of assets of the Company.

5. Contingent Interest

The Company shall pay Contingent Interest in cash to the Holders in respect of any six-month period from and including June 1 to and including November 30 and from and including December 1 to and including May 31, commencing with the six-month period beginning June 1, 2018, if the average Securities Price for the Applicable Five Trading Day Period with respect to such interest period equals 120% or more of $1,000 principal amount of Securities. The amount of Contingent Interest payable per $1,000 principal amount of Securities in respect of any interest period shall equal 0.375% of the average Securities Price for the Applicable Five Day Trading Period with respect to such interest period. Contingent interest, if any, will accrue from June 1 or December 1, as applicable, and will be payable on the next succeeding December 1 or June 1 interest payment date, as the case may be. Contingent interest will be paid to the person in whose name a Security is registered at the close of business on May 15 or November 15, as the case may be, immediately preceding the relevant interest payment date on which Contingent Interest is payable. All payments of Contingent Interest shall be made in cash.

6. Redemption

No sinking fund is provided for the Securities. The Securities will be redeemable, at the option of the Company, in whole at any time or in part from time to time, at any time on or after June 1, 2018, on at least 30 days but not more than 60 days’ prior notice mailed to the registered address of each Holder of Securities to be so redeemed, at a Redemption Price in cash equal to 100% of their principal amount plus accrued but unpaid interest (including any Contingent Interest), if any, to but excluding the Redemption Date.

In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee by lot, or on a pro rata basis, or by another method as the Trustee shall deem to be fair and appropriate, although no Securities of $1,000 in original principal amount or less will be redeemed in part. If any Security is to be redeemed in part only, the notice of redemption relating to such Security shall state the portion of the principal amount thereof to be redeemed. A new Security in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security. On and after the Redemption Date, interest (including any Contingent Interest), if any, will cease to accrue on Securities or portions thereof called for redemption as long as the Company has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture.

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7.		Purchase By the Company at the Option of the Holder; Purchase at the Option of the Holder Upon a Fundamental Change

(a) Subject to the terms and conditions of the Indenture, a Holder shall have the option to require the Company to purchase on June 1, 2018 (the “Purchase Date”)all or a portion of the Securities held by such Holder at a purchase price (the “Purchase Price”) equal to 100% of the principal amount of the Securities to be purchased plus any accrued and unpaid interest (including any Contingent Interest), to but excluding such Purchase Date (unless the Purchase Date is between the Regular Record Date and the interest payment date to which it relates, in which case such accrued and unpaid interest will be paid to the Holder as of such Regular Record Date), upon delivery of a Purchase Notice containing the information set forth in the Indenture, from the opening of business on the date that is 20 Business Days prior to such Purchase Date until the close of business on the fifth Business Day prior to such Purchase Date and upon delivery of the Securities to the Paying Agent by the Holder as set forth in the Indenture. The Company will pay the Purchase Price in cash for any Securities to be purchased.

Securities in denominations larger than $1,000 principal amount may be purchased in part, but only in integral multiples of $1,000 principal amount.

(b) If a Fundamental Change shall occur at any time, each Holder shall have the right, at such Holder’s option and subject to the terms and conditions of the Indenture, to require the Company to purchase any or all of such Holder’s Securities or any portion of the principal amount thereof that is equal to $1,000 or an integral multiple of $1,000 on the day the Company selects that is not less than 20 or more than 35 Business Days after the date of the Company Notice of the occurrence of the Fundamental Change (subject to extension to comply with applicable law) for a Fundamental Change Purchase Price equal to the principal amount of Securities purchased plus, unless the Fundamental Change Purchase Date is between a Regular Record Date and the interest payment date to which it relates, accrued and unpaid interest, including any Contingent Interest, if any, to but excluding the Fundamental Change Purchase Date, which Fundamental Change Purchase Price shall be paid by the Company in cash.

(c) Holders have the right to withdraw any Purchase Notice or Fundamental Change Purchase Notice, as the case may be, by delivery to the Paying Agent of a written notice of withdrawal in accordance with the provisions of the Indenture.

(d) If cash sufficient to pay a Fundamental Change Purchase Price or Purchase Price, as the case may be, of all Securities or portions thereof to be purchased as of the Purchase Date or the Fundamental Change Purchase Date, as the case may be, is deposited with the Paying Agent on the Business Day following the Purchase Date or the Fundamental Change Purchase Date, as the case may be, interest (including any Contingent Interest), if any, shall cease to accrue on such Securities (or portions thereof) on and after such date, and the Holder thereof shall have no other rights as such (other than the right to receive the Purchase Price or Fundamental Change Purchase Price, as the case may be, upon surrender of such Security).



8.		Conversion

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Subject to the procedures set forth in the Indenture, a Holder may convert Securities into Common Stock of the Company at any time on or before 5:00 p.m., New York City time, on the Trading Day immediately preceding the maturity date if at least one of the following conditions (including the applicable conversion time constraints) is satisfied on the Conversion Date:

(a) the Last Reported Sale Prices of the Common Stock for at least 20 Trading Days in the period of 30 consecutive Trading Days ending on the last Trading Day of the calendar quarter immediately preceding the calendar quarter in which the potential Conversion Date occurs is greater than or equal to 130% of the applicable Conversion Price per share of Common Stock on the last Trading Day of such preceding calendar quarter; provided that in no event may a Conversion Date occur prior to the calendar quarter beginning after September 30, 2006 pursuant to this clause (a);

(b) the conversion occurs at any time on or after May 1, 2036 until 5:00 p.m., New York City time, on the Trading Day immediately preceding the Stated Maturity;

(c) any or all of the Securities have been called for redemption by the Company, in which case a Holder may convert Securities called for redemption into Common Stock at any time prior to the close of business on the second Trading Day prior to the Redemption Date;

(d) the Company elects to (i) distribute to all or substantially all holders of Common Stock rights entitling them to purchase, for a period expiring within 60 days after the date of such distribution, Common Stock at less than the Last Reported Sale Price at the time of such distribution or (ii) distribute to all or substantially all holders of Common Stock assets, debt securities or rights to purchase securities of the Company, which distribution has a per share value as determined by the Company’s Board of Directors exceeding 10% of the Last Reported Sale Price of the Common Stock on the day preceding the declaration date for such distribution. In the case of the foregoing clauses (i) and (ii), the Company must notify the Holders at least 20 Business Days prior to the ex-dividend date for such distribution. Once the Company has given such notice, Holders may surrender their Securities for conversion at any time thereafter until the earlier of 5:00 p.m., New York City time, on the Business Day immediately prior to the ex-dividend date or the Company’s announcement that such distribution will not take place. The ex-dividend date is the first date upon which a sale of the Common Stock does not automatically transfer the right to receive the relevant dividend or other distribution from the seller of the Common Stock to its buyer; or

(e) the Company becomes party to a consolidation, merger or binding share exchange pursuant to which Common Stock would be converted into cash or property (other than securities), in which case a Holder may surrender Securities for conversion at any time from and after the 25th calendar day prior (or, if only determinable subsequent to such date, then as promptly as can be determined subsequent to such 25th calendar day) to the anticipated effective date of the transaction until 30 calendar days after the actual effective date of such transaction or in the case of a consolidation, merger or share exchange also constituting a Fundamental Change, until the Trading Day prior to the repurchase date corresponding to such Fundamental Change. The Company shall notify Holders of the anticipated effective date of a transaction giving rise to

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a conversion right under this provision as soon as practicable after it first determines the effective date of such transaction;

Securities in respect of which a Holder has delivered a notice of exercise of the option to require the Company to purchase such Securities pursuant to paragraph 7 hereof and Section 11.1 or Section 11.2 of the Indenture may be converted only if the notice of exercise is withdrawn in accordance with the terms of the Indenture.

The initial Conversion Rate is 12.7648 shares of our Common Stock per $1,000 principal amount of Securities, subject to adjustment in certain events described in the Indenture. Upon conversion, the Company will pay cash and shares of Common Stock (or, at the Company’s election, cash in lieu of some or all of such Common Stock as permitted by the Indenture), if any, based on a Daily Conversion Value calculated on a proportionate basis for each day of the 20-day Cash Settlement Averaging Period, as set forth in the Indenture. The Company shall deliver cash or a check in lieu of any fractional share of Common Stock based on the Last Reported Sale Price and may, pursuant to a timely Cash Percentage Notice, elect to deliver additional cash in lieu of all or some of the shares of Common Stock.

Holders of Securities at 5:00 p.m., New York City time, on a Regular Record Date will receive payment of interest (including any Contingent Interest) payable on the corresponding interest payment date notwithstanding the conversion of such Securities at any time after 5:00 p.m., New York City time on such Regular Record Date. Securities surrendered for conversion during the period from 5:00 p.m., New York City time on any Regular Record Date to 9:00 a.m., New York City time on the corresponding interest payment date (except for (i) Securities in respect of which a Redemption Date has been declared that falls within this period or on such interest payment date, (ii) Securities in respect of which a Fundamental Change Purchase Date has been established that falls within this period or on such interest payment day, (iii) Securities which have been converted after the Record Date immediately preceding the Stated Maturity, or (iv) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to a Security) must be accompanied by payment of an amount equal to the interest (including any Contingent Interest) that the Holder is to receive on the Securities. Except where Securities surrendered for conversion must be accompanied by payment as described above, no separate payment for interest or Contingent Interest on converted Securities will be payable by the Company on any interest payment date subsequent to the date of conversion. Notwithstanding the foregoing, a Holder shall be entitled to receive accrued and unpaid interest, including any Contingent Interest in respect of a Security (w) if the Company calls such Security for redemption and such Holder converts its Security prior to the Redemption Date, (x) if the Company establishes a Fundamental Change Purchase Date during the period from the close of business on any Regular Record Date to the opening of business on the corresponding interest payment date has been established that falls within this period or on such interest payment day and such Holder converts its Security prior to the Fundamental Change Purchase Date, (y) a Holder converts the Securities after the Record Date immediately preceding the Stated Maturity, or (z) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to a Security.

To convert Securities that are Global Securities, a beneficial owner or participant must comply with DTC’s procedures for converting a beneficial interest in the Global Security

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and, if required, pay funds equal to interest payable on the next interest payment date to which the converting beneficial owner or participant is not entitled and, if required, pay all taxes or duties, if any.

To convert Definitive Securities, a Holder must (1) complete and manually sign the irrevocable conversion notice on the back of the Securities (or complete and manually sign a facsimile of such notice), (2) deliver such notice, which is irrevocable, to the Conversion Agent at the office maintained by the Conversion Agent for such purpose, and surrender the Securities to the Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Company or the Trustee, (4) pay any transfer or similar tax, if required and (5) if required, pay funds equal to interest payable on the next interest payment date to which the Holder is not entitled.

A Holder may convert a portion of the Securities only if the principal amount of such portion is $1,000 or a multiple of $1,000. No payment or adjustment shall be made for dividends on the Common Stock except as provided in the Indenture. On conversion of the Securities, that portion of accrued and unpaid interest attributable to the period from the Issue Date to the Conversion Date and accrued and unpaid Contingent Interest with respect to the converted portion of the Securities shall not be canceled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through the delivery of cash and any Common Stock (together with any cash payment in lieu of fractional shares) delivered in exchange for the portion of the Securities being converted pursuant to the terms hereof; provided that the Company may, pursuant to a timely Cash Percentage Notice, elect to deliver additional cash in lieu of all or some of the shares of Common Stock; and the cash and Fair Market Value of any such shares of Common Stock (together with any such cash payment in lieu of fractional shares or cash payment in lieu of shares pursuant to a Cash Percentage Notice) shall be treated issued, to the extent thereof, first in exchange for interest accrued and unpaid through the Conversion Date and accrued and unpaid Contingent Interest, and the balance, if any, of such Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive evidence of such Fair Market Value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of any such Common Stock (and any such cash payment) shall be treated as issued in exchange for the principal amount of the Securities being converted pursuant to the provisions hereof. Notwithstanding the foregoing, a Holder shall be entitled to receive accrued and unpaid interest, including any Contingent Interest in respect of a Security if the Company calls such Security for redemption and such Holder converts its Security prior to the Redemption Date.

9. Denominations; Transfer; Exchange

The Securities are in registered form without coupons in denominations of principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of Securities (i) for a period of 15 days prior to the mailing of a notice of redemption of Securities selected for redemption under Article V of the Indenture; (ii) so selected for redemption or, if a portion of any Security is selected for redemption, the portion thereof selected

A-11

for redemption; or (iii) surrendered for conversion or, if a portion of any Security is surrendered for conversion, the portion thereof surrendered for conversion.

10. Persons Deemed Owners

The registered Holder of this Security may be treated as the owner of it for all purposes.

11. Unclaimed Money

If money for the payment of principal or interest (including any Contingent Interest), if any, remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

12. Amendment, Waiver

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities and (ii) any default (other than with respect to nonpayment or in respect of a provision that cannot be amended without the written consent of each Securityholder affected) or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount of the then outstanding Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Securityholder, the Company and the Trustee may amend the Indenture or the Securities to cure any ambiguity, omission, defect or inconsistency, or to comply with Article IV of the Indenture, or to provide for uncertificated Securities in addition to or in place of certificated Securities, or to add guarantees with respect to the Securities, or to secure the Securities, or to add additional covenants of the Company or its Subsidiaries, or to make any change that does not materially adversely affect the rights of any Securityholder; provided, that any amendment to conform the terms of the Securities to the description contained in the prospectus filed with the Registration Statement pursuant to which the Indenture has been qualified and any supplemental prospectus thereto relating to the Securities shall be deemed not to be adverse to any Securityholder.

13. Defaults and Remedies

Under the Indenture, Events of Default include, but are not limited to, (i) default in any payment of interest, including any Contingent Interest on any Security when the same becomes due and payable, and such default continues for a period of 30 days; (ii) default in payment of principal on the Securities at Stated Maturity, upon required repurchase pursuant to paragraph 7 or upon optional redemption pursuant to paragraph 6 of the Securities, upon declaration or otherwise; (iii) the failure by the Company to comply with its obligations to convert the Securities into cash or a combination of cash and Common Stock, as applicable, upon the exercise of a holder’s conversion right and such failure continues for a period of ten calendar days; (iv) the failure by the Company to comply with its obligations under Article IV of the Indenture; (v) the failure by the Company to comply for 60 days after written notice with its other agreements contained in the Indenture or under the Securities (other than those referred to

A-12

in (i), (ii), (iii) or (iv) above); (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be outstanding, or by which there may be secured or evidenced any Debt for money borrowed by the Company or any of its Subsidiaries (other than Non-Recourse Debt to the Company), whether such Debt now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of, or interest (including any Contingent Interest), if any, or on such Debt prior to the expiration of the grace period provided in such Debt (“Payment Default”) or (b) results in the acceleration of such Debt prior to its maturity (the “cross acceleration provision”) and, in each case, the principal amount of any such Debt, together with the principal amount of any other such Debt under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or more or its foreign currency equivalent at the time and such acceleration shall not have been rescinded or annulled within 10 days after written notice of such acceleration has been received by the Company or such Subsidiary; (vii) failure by the Company to issue a Company Notice of a Fundamental Change in accordance with the terms of the Indenture; (viii) certain events of bankruptcy, insolvency or reorganization of the Company (the “bankruptcy provisions”); or (ix) entry in a court of competent jurisdiction of a final judgment for the payment of $50.0 million or more rendered against the Company or any Subsidiary, which judgment is not covered by insurance (other than with respect to customary deductibles) or not discharged, bonded or stayed within 90 days after (A) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (B) the date on which all rights to appeal have been extinguished (the “judgment default provision”). However, a default under clause (v) will not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities notify the Company of the default and the Company does not cure such default within the time specified in clause (v) hereof after receipt of such notice.

If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities by notice to the Company to be due and payable immediately. A violation of any convent or agreement in the Indenture that expressly provides that a violation of such covenant or agreement shall not constitute an Event of Default may be enforced only by the Trustee or such other Person specified in such covenant or agreement by instituting a legal proceeding against the Company for enforcement of such covenant or agreement.

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest (including any Contingent Interest), if any, if it determines that withholding notice is in their interest.

14. Trustee Dealings with the Company

Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities

A-13

and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

15. No Recourse Against Others

An incorporator, director, officer, employee, Affiliate or stockholder, of each of the Company solely by reason of this status, shall not have any liability for any obligations of the Company under the Securities, the Indenture or any Subsidiary Guarantees or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

16. Subordination

This Security is subordinated in right of payment to all existing and future Senior Debt as provided in Article X of the Indenture.

17. Authentication

This Security shall not be valid until an authorized signatory of the Trustee manually authenticates this Security.

18. Abbreviations

Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).

19. CUSIP Numbers

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

20. Governing Law

This Security shall be governed by, and construed in accordance with, the laws of the State of New York.

The Company will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to:

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Trinity Industries, Inc.

2525 Stemmons Freeway

Dallas, Texas 75207-2401

Attn: S. Theis Rice

Telephone No.: (214) 589-8170

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[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

Principal Amount of this Global

Signature of authorized

Amount of decreasein Principal

Amount of increase in Principal

Security following such

signatory of Trustee or

Date

Amount of this Global Security

decrease or increase

Securities Custodian

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FORM OF CONVERSION NOTICE

To: Trinity Industries, Inc.

The undersigned registered holder of this Security hereby exercises the option to convert this Security, or portion hereof (which is $1,000 principal amount or an integral multiple thereof) designated below, for cash and shares of Common Stock of Trinity Industries, Inc., if any, in accordance with the terms of the Indenture referred to in this Security, and directs that cash and the shares, if any, issuable and deliverable upon such conversion, and any Securities representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If cash, shares or any portion of this Security not converted are to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto.

This notice shall be deemed to be an irrevocable exercise of the option to convert this Security.




Dated:


		Signature(s)

		The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


		Signature Guarantee




Fill in for registration of shares if to be delivered, and Securities if to be issued other than to and in the name of registered holder:

(Name)		Principal amount to be converted (if less than all): $___,000

(Street Address)

(City state and zip code)		Social Security or Other Taxpayer Number
Please print name and address

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FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To: Trinity Industries, Inc.

The undersigned registered holder of this Security hereby acknowledges receipt of a notice from Trinity Industries, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to repurchase this Security, or the portion hereof (which is $1,000 principal amount or a integral multiple thereof) designated below, in accordance with the terms of the Indenture referred to in this Security and this Security and directs that the check or Common Stock of the Company, as applicable, in payment for this Security or the portion thereof and any Securities representing any unrepurchased principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If any portion of this Security not repurchased is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto.




Dated:



		Signature(s)

		The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

		Signature Guarantee

Fill in if a check is to be issued, or Securities are to be issued, other than to and in the name of registered holder:




(Name)		Principal amount to be purchased (if less than all): $ ,000

(Street Address)

(City state and zip code)		Social Security or Other Taxpayer Number
Please print name and address

FORM OF PURCHASE NOTICE

To: Trinity Industries, Inc.

The undersigned registered holder of this Security hereby acknowledges receipt of a notice from Trinity Industries, Inc. (the “Company”) as to the holder’s option to require the Company to repurchase this Security and requests and instructs the Company to repurchase this Security, or the portion hereof (which is $1,000 principal amount or a integral multiple thereof) designated below, in accordance with the terms of the Indenture referred to in this Security and directs that the check or Common Stock of the Company, as applicable, in payment for this Security or the portion thereof and any Securities representing any unrepurchased principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If any portion of this Security not repurchased is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto.




Dated:



		Signature(s)

		The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

		Signature Guarantee

Fill in if a check is to be issued, or Securities are to be issued, other than to and in the name of registered holder:




(Name)		Principal amount to be purchased (if less than all): $ ,000

(Street Address)

(City state and zip code)		Social Security or Other Taxpayer Number
Please print name and address

Exhibit 4.1.1

OFFICERS’ CERTIFICATE

TRINITY INDUSTRIES, INC.

The undersigned, James Perry, does hereby certify that he is the Vice President and Treasurer of Trinity Industries, Inc., a Delaware corporation (the “ Company ”), and the undersigned, Chas Michel, does hereby certify that he is the Vice President, Controller and Chief Accounting Officer of the Company, and pursuant to Section 12.2 of the Indenture (the “ Indenture ,” with capitalized terms used in the Officers’ Certificate, as defined in the Indenture), between the Company and Wells Fargo Bank, National Association, as Trustee (the “ Trustee ”), dated as of June 7, 2006, relating to the Company’s 3 7/8% Convertible Subordinated Notes Due 2036 (the “ Notes ”), do hereby certify that:

1. On May 15, 2006 the Company declared a 3-for-2 stock split in the form of a stock dividend (the “ Stock Dividend ”) to holders of record of the Company’s common stock (the “ Common Stock ”) as of May 26, 2006. As a result of the Stock Dividend, each holder of two shares of the Common Stock received one additional share of Common Stock as of the distribution date on June 9, 2006. The ex-dividend date for the Stock Dividend was June 12, 2006.

2. The initial Conversion Rate was 12.7648 and the initial Conversion Price under the Indenture was $78.34. Immediately after 9:00 a.m., New York City time, on June 13, 2006 (subject to further adjustment as provided in the Indenture), the Conversion Rate is 19.1472 and the Conversion Price is $52.23, calculated in accordance with Section 12.2(a) of the Indenture (collectively, the “ Conversion Rate Adjustment ”).

3. Such officers have read the provisions of the Indenture applicable to the Conversion Rate Adjustment, including, without limitation, Section 12.2 thereof.

4. The statements or opinions contained in this certificate are based on the undersigned’s review of the Indenture and certain other corporate documents and records.

5. We are of the opinion that we have made such examination or investigation as is necessary to enable us to express an informed opinion that the Conversion Rate Adjustment is permitted by the Indenture and whether or not the conditions precedent to Conversion Rate Adjustment have been complied with.

6. We are of the opinion that Conversion Rate Adjustment is permitted under the Indenture and that upon mailing a notice thereof to the holders of the Notes in accordance with the Indenture, all conditions precedent provided for in the Indenture relating to the Conversion Rate Adjustment have been complied with.

*******

IN WITNESS WHEREOF, the undersigned have executed this Officers’ Certificate as of this ___ day of June, 2006.




		/s/ James E. Perry

		Name: James Perry
		Title: Vice President and Treasurer

		/s/ Chas Michel

		Name: Chas Michel
		Title: Vice President, Controller and Chief Accounting Officer

Exhibit 10.5

Trinity Industries, Inc. Deferred Compensation Trust

Table of Contents

Page


1.	Continuation of Trust 1


2.	Payments to Plan Participants and their Beneficiaries 3


3.	Trustee Responsibility Regarding Payments to Trust Beneficiary When

Company Is Insolvent 5


4.	Payments to the Company 6


5.	Investment Authority 6


6.	Disposition of Income 8


7.	Proxies 8


8.	Corporate Actions 9


9.	Class Action Litigation 9


10.	Records; Annual Account 11


11.	Responsibility of Trustee 11


12.	Indemnification 13


13.	Compensation and Expenses of the Trustee 14


14.	Resignation and Removal of Trustee 15


15.	Appointment of Successor 15


16.	Amendment or Termination 15


17.	Miscellaneous 16


EXHIBIT A	List of Plans Covered by this Agreement 21


EXHIBIT B	Secretary’s Certificate 17


EXHIBIT C	Benefit Payment Services to be Provided by the Trustee 18


EXHIBIT D	Information to be Provided for Benefit Payment Services 19


EXHIBIT E	Electronic Access 20


SCHEDULE 1	Scope of Services 22

TRUST FOR NON-QUALIFIED DEFERRED COMPENSATION BENEFIT PLANS OF

TRINITY INDUSTRIES, INC.

This Agreement ( “Agreement” ) effective as of the _____ day of _______________, 20__ by and between Trinity Industries, Inc. ( “Company” ) and JPMorgan Chase Bank, N.A. ( “Trustee” );

RECITALS

(A) The Company has adopted the nonqualified deferred compensation Plan(s) as listed in Exhibit A.

(B) The Company has incurred or expects to incur liability under the terms of such Plan(s) with respect to the individuals participating in such Plan(s);

(C) The Company wishes to continue a trust (hereinafter called “Trust”) previously established and wishes to contribute to the Trust assets that shall be held therein, subject to the claims of the Company’s creditors in the event of the Company’s Insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan(s);

(D) The Company desires to appoint JPMorgan Chase Bank, N.A. as trustee of the Trust pursuant to resolutions of the Company’s governing body. The Company shall provide the Trustee with a certified copy of such resolutions substantially in the form annexed hereto as Exhibit B;

(E) It is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan(s) as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974;

(F) It is the intention of the Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan(s);

(G) The Company and the Trustee desire to amend and restate the instrument governing the Trust in its entirety.

AGREEMENT

1. Continuation of Trust

(a) The Company and the Trustee hereby amend and restate the instrument governing the Trust and continue the Trust as the funding vehicle for the Plan, upon the terms and conditions set forth below. “Trust Fund” means all assets held by the Trustee in the Trust under the provisions of this Agreement at the time of reference.

(b) The Trust hereby continued shall be irrevocable by the Company.

(c) The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

(d) The principal of the Trust, and any earnings thereon, shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan(s) and this Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the Company’s general creditors under federal and state law in the event of the Company’s Insolvency, as defined in Section 3(a) herein.

(e) The Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property acceptable to the Trustee in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Agreement; provided, however, that each 12-month period ending December 31, the Company shall contribute to the Trust an amount of cash or property at least equal in value to the total amount of deferrals and contributions credited to the Accounts of participants employed by the Company pursuant to the Supplemental Profit Sharing Plan during such 12-month period, and the Company shall contribute to the Trust each 12-month period ending December 31 an amount of cash or property at least equal in value to the total amount of deferrals credited to the Accounts of participants pursuant to the Director Plan during such 12-month period. In lieu of all or a portion of the contribution to the Trust required by this paragraph, the Company may make contributions in

the form of premium payments on insurance policies that are assets of the Trust in such amount and in such manner as determined by the Company.

The Company may, in its sole discretion, but shall not be obligated to, make additional deposits of cash or other property acceptable to the Trustee in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee for purposes of funding the benefits of certain participants pursuant to any Plan other than the Supplemental Profit Sharing Plan or the Director Plan.

(g) Upon a Change in Control, as defined in the Plans, the Company shall (i) as soon as possible, but in no event more than two business days following the date of such Change in Control, notify the Trustee in writing that a Change in Control has occurred, (ii) as soon as possible, but in no event more than two business days following the date of such Change in Control, make an irrevocable contribution to the Trust in an amount, as determined by an Independent Committee, as defined below, which when added to the total value of the assets under the Trust at such time equals 125% of the total amount credited to all Accounts under the Supplemental Profit Sharing Plan and the Director Plan as of the date on which the Change in Control occurred, and (ii) on and after the date of the Change in Control, make monthly contributions to the Trust in amounts sufficient, as determined by the Independent Committee, to maintain the total value of the assets at an amount equal to 125% of the total amount credited to all Accounts under the Supplemental Profit Sharing Plan and the Director Plan.

Notwithstanding the preceding provisions of this Section 1(g), such funding after a Change in Control shall be prohibited if the Change in Control occurs in connection with a change in the Company’s financial health, within the meaning of Internal Revenue Code Section 409A(b)(2).

(h) Notwithstanding any provision of this Agreement to the contrary, the Company shall not contribute funds to the Trust during any “restricted period,” as defined in Internal Revenue Code Section 409A(b)(3)(B), in relation to a single-employer defined benefit pension plan sponsored by the Company or any affiliate in a “controlled group” with the Company under Internal Revenue Code Section 414(b) and (c).

(i) Neither the Trustee nor any Plan participant or beneficiary shall have any right to compel deposits to the Trust.

2. Payments to Plan Participants and their Beneficiaries

(a) The administrative committee appointed by the Company (“Plan Committee”) shall deliver to the Trustee a schedule (the “Payment Schedule” ) that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries) or that provides other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. Except as otherwise provided herein, the Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule and will provide the services identified in Exhibit C ( “Benefit Payment Services” ). The Company shall provide the Trustee with written instructions as to the aggregate amount of any federal, state and local taxes that may be required to be withheld with respect to the payment of benefits from the Trust, and the Trustee shall remit such amounts to the Company for payment and reporting to the appropriate taxing authorities by the Company.

(b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan(s) shall be determined by the Plan Committee or such party as it shall designate under the Plan(s) (which party shall not be the Trustee), and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan(s).

(c) The Company or the Plan Committee shall provide the Trustee with the data listed in Exhibit D in a format reasonably acceptable to the Trustee before the cut-off times specified in Exhibit D. The Company and the Plan Committee shall be solely responsible for the accuracy of the data provided to the Trustee.

(d) The Plan Committee shall review promptly any reports relating to the Benefit Payment Services produced by the Trustee for accuracy and completeness and after such review, shall bear the responsibility for the contents of reports (including but not limited to past and future periodic payments to participants and their beneficiaries). The Company shall pay the Trustee a reasonable fee for correcting any report which is incorrect due to the Trustee being provided inaccurate information. The Trustee shall have no Liability, as hereinafter defined, to the Company, the Plan Committee, any participant or beneficiary, or governmental agency or entity, including, without limitation, for the collection of, or any claim, lawsuit, penalties, consequential damages or reimbursement to the Plan or participant(s) or beneficiary(ies) arising out of any past or future incorrect payments, or past or future overpayments made to a participant or beneficiary or erroneous information reports filed with any party or governmental agency or entity in the event that the Company or Plan Committee fails to notify the Trustee of any errors in any such reports within sixty (60) days after receipt thereof.

(e) Subject to the provisions of Article 12, the Trustee’s Liability with respect to any one incident or any series of related incidents with respect to the Benefit Payment Services pursuant to this Section 2 shall be limited to an amount not in excess of one quarter of the annual fee paid for such Benefit Payment Services.

(f) The Company may make payment of benefits directly to its Plan participants or their beneficiaries as they become due under the terms of the Plan(s), in lieu of payment from the Trust. In such event, the Company may direct the Trustee to reimburse the Company for its payment of Plan benefits or other expenses paid by the Company upon the Company’s written certification that it has made such payment and the amount to be reimbursed. The Trustee shall notify the Company where principal and earnings are not sufficient to comply with the Company’s specific payment instructions..

(g) The Trustee shall have no duty to question the propriety of any direction of the Company to make payments, reimbursements or transfers, to account for funds retained in or disbursed from any accounts to which payments or transfers are made, to see to the application of payments, reimbursements or transfers, or to ascertain whether the Company’s directions to make payments, reimbursements or transfers comply with the terms of the Plan(s). The Trustee shall not incur any Liabilities hereunder and shall be fully protected by the Company against any Liabilities from its making payments, reimbursements or transfers pursuant to the Company’s direction or failure to make any payments, reimbursements or transfers in the absence of directions if the Trustee’s action or inaction, as the case may be, is not the result of the Trustee’s fraud, negligence, or willful misconduct.

(g) Any provision of this Agreement to the contrary notwithstanding, upon and after a Change in Control, the Trustee shall make payments to Plan participants or their beneficiaries in accordance with the direction of the Independent Committee rather than the Plan Committee, regardless of whether the Trustee has received a Payment Schedule or any other form of direction from the Plan Committee to make such payments. In this case, the Trustee shall not make any payments until thereafter instructed by the Independent Committee.

3. Appointment of Independent Committee.

(a) Any provision of this Agreement to the contrary notwithstanding, upon a Change in Control, the Independent Committee shall:

(1) determine the amount of the irrevocable contributions to be made pursuant to Section 1(g) hereof;

(2) determine in accordance with the Plans the amounts payable with respect to each Plan participant (and his or her beneficiaries), the form in which such amounts are to be paid, and the time of commencement for payment of such amounts pursuant to Section 2(a) hereof;

(3) determine the entitlement of Plan participants and beneficiaries to benefits under the terms of the Plans pursuant to Section 2(b) hereof;

(4) direct the Trustee to make payments to Plan participants and their beneficiaries pursuant to Section 2 hereof; and

(5) select a successor trustee for the Trust if the Trustee resigns or is removed on or after the date of a Change in Control pursuant to Section 12.(b).

4. Trustee Responsibility Regarding Payments to Trust Beneficiary When the Company Is Insolvent

(a) The Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. The Company shall be considered “ Insolvent ” for purposes of this Agreement if (i) the Company is unable to pay its debts as they become due, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

(b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.

(1) The Plan Committee and the Chief Executive Officer of the Company shall have the duty to inform the Trustee in writing of the Company’s Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to the Company’s participants or their beneficiaries.

(2) Unless the Trustee has actual knowledge of the Company’s Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether an Company is Insolvent. The Trustee may in all events rely on such evidence concerning the

Company’s solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company’s solvency. The Trustee shall not be considered to have knowledge or received notice of an Company’s Insolvency unless and until the knowledge or notice is actually received by:

(i) The individual, or his successor, last identified in writing by the Trustee as the proper party to receive notices; or

(ii) The individuals held out to the Company as being responsible for the day to day administration of this Agreement; or

(iii) The manager of the department in which the individuals described in Subsection (ii) above perform their duties with respect to this Agreement.

(3) If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of the Trust for the benefit of the Company’s general creditors. Nothing in this Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of the Company with respect to benefits due under the Plan(s) or otherwise.

(4) The Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent).

(c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 4(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the Payment Schedule for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by the Company in lieu of the payments provided for hereunder during any such period of discontinuance.

5. Payments to the Company

To the extent that the Plan Committee at any time determines, based upon information provided to the Committee by the Trustee, that the value of the assets under the Trust exceeds 125% of the amounts credited to Plan Accounts for which the Company is liable as of the most recent valuation date plus any deferrals or contributions made since that date, upon the written direction of the Plan Committee, the Trustee shall pay such amounts as directed in writing to the Company upon receipt of written request therefor; provided, however, that no such payment of excess assets to the Company shall be directed on or after the date of a Change in Control without the written approval of two-thirds of the participants who maintain an Account pursuant to a Plan, as determined by the Independent Committee and confirmed by the Independent Committee in writing to the Trustee.

Except as provided in (i) Section 2(a) with respect to remittance to the Company of withheld taxes, (ii) Section 2(e) with respect to reimbursement to the Company of benefits paid directly to the Plan participant or his or her beneficiary and expenses paid by the Company, (iii) the above provisions of this Section 5 with respect to excess funding; and (iv) Section 17 with respect to amendment and termination the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before all payment of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan(s). The Trustee shall not be required to independently determine whether all benefit payments have been made to Plan participants and beneficiaries pursuant to the terms of the Plan(s) and may rely upon written notification to such effect as provided by the Company.

6. Investment Authority

(a) The Trustee shall have no discretion or authority with respect to the investment of Trust assets, but shall act solely as a directed Trustee, and shall invest and reinvest the principal and income of the Trust and keep the Trust invested in such investments as directed by the Company or one or more investment managers appointed by the Company in accordance with Section 6(b); provided, however, that on and after the date of a Change in Control, the Independent Committee, rather than the Company, shall have the sole authority to direct the Trustee with regard to the investment of Trust assets. The Trustee shall have no duty to question any action or direction or failure to give directions of the Company or any duly appointed investment manager as to the investment, reinvestment, management, disposition or distribution of Trust assets. To the extent necessary to carry out the directions of the Company or any duly appointed investment manager, the Trustee is authorized and empowered, but not by way of limitation, with the following powers, rights and duties:

(1) to invest any part or all of the Trust without distinction between principal and income and in such securities or any kind of property, real or personal, wherever situated, including, but not limited to, common or preferred stocks, warrants, rights, securities of any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, as amended (including any such investment company or investment trust to which the Trustee or an affiliate provides services and/or from which it receives fees as investment advisor, custodian, transfer agent or sub-transfer agent, registrar, administrator or sub-administrator, or in any other capacity), exchange funds, real estate investment trusts, limited partnerships, venture capital funds, private equity investments, closely held companies, and corporate or government bonds, notes, debentures and other evidence of indebtedness or ownership.

(2) to invest and reinvest or otherwise deposit the Trust assets in savings accounts, time deposit accounts, certificates of deposit, money market funds, or other evidences of deposit issued by the Trustee and/or any other national bank, savings and loan institution, state member bank, state non-member bank, or other depository institution, including any such entity which now or in the future is an affiliate of the Trustee.

(3) to retain in cash or cash equivalents so much of the Trust as may be required for liquidity needs of the Plan(s) and to deposit any such cash held in the Trust with any bank or savings institution, including its own banking department, without liability for interest on such cash deposits.

(4) to exercise any exchange privileges, conversion privileges and conversion rights available under any security or other property held in the Trust; consent to or dissent from the reorganization, consolidation, merger or the readjustment of the finances of, or the sale, mortgage, pledge, or lease of the property of any entity that has issued any security held in the Trust; deposit any securities or other property held in the Trust with any protective, reorganization, or similar committee and delegate discretionary power to that committee; do any other act in connection with matters described in this Section, including exercising options, making agreements or subscriptions, or paying expenses, assessments, or subscriptions which the Trustee believes is necessary or advisable.

(5) to vote any stock or other security and exercise any right appurtenant to any stock, security or other property held in the Trust, either in person or by general or limited proxy, power of attorney or other instrument.

(6) to settle, compromise, or submit to arbitration any claims, debts or damages due to or owing from the Trust, commence and defend suits or legal proceedings and represent the Trust in all suits or legal proceedings, except that the Trustee may not exercise any of the powers referred to in this Subsection without the consent of the Company if the matter relates solely to the rights or status under the Plan(s) of a participant or beneficiary or any other person.

(7) to manage, operate, repair, or improve and collect the income from any real or personal property held in the Trust.

(8) to renew or extend, or participate in the renewal or extension of, any debt owing to the Trust and agree to a reduction in the rate of interest on any such debt or to any other modifications or changes to the terms of any mortgage or of any guarantee pertaining thereto; waive any default whether in the performance of any covenant or condition of any evidence of any debt or mortgage or in the performance of any guarantee or to enforce any rights available to the Trustee because of any default; exercise and enforce any and all rights of foreclosure, bid in property on foreclosure, take a deed in lieu of foreclosure, with or without consideration, and release the obligation on any note or other evidence of debt secured by that mortgage; and exercise and enforce in any action, suit or other proceeding at law and in equity any rights or remedies in respect to any such debt, mortgage or guarantee.

(9) to hold securities in bulk or bearer form, or deposit them with any central depository authorized under applicable law, in its own name or in the name of a nominee without the addition of words indicating that the property is held in a fiduciary capacity.

(10) to join in or oppose the reorganization, recapitalization, consolidation, sale or merger of corporations or properties, including those in which it is interested as Trustee.

(11) to make, execute and deliver, as Trustee, with or without providing for no individual liability on behalf of the Trust, any and all conveyances, mortgages, contracts, waivers, releases, leases, assignments, powers of attorney or other written instruments considered necessary and appropriate in the administration of the Trust.

(12) to lend securities to banks and broker-dealers approved by the Company, consistent with regulations issued by applicable regulatory authorities, and under the terms of a written agreement between the Company and the Trustee.

(13) except as otherwise provided in this Agreement or under applicable law, execute all instruments, engage in all proceedings and exercise all rights, powers and privileges considered necessary and appropriate to discharge the purposes of this Agreement.

(b) The Company may appoint one or more investment managers ( “Investment Managers” ), pursuant to a written investment management agreement describing the powers and duties of the Investment Manager, to direct the investment and reinvestment of all or a portion of the Trust. The Company shall furnish the Trustee with written notice of the appointment of each Investment Manager hereunder in the form as provided by the Trustee and of the termination of any such appointment and shall cause each Investment Manager to provide the Trustee with written certification of its capacity in the form as provided by the Trustee. Such notice shall specify the assets which shall constitute the Investment Account. The Trustee shall be fully protected in relying upon the effectiveness of such appointment and the Investment Manager’s continuing satisfaction of the requirements set forth above until it receives written notice from the Company to the contrary.

(c) Any instructions received from the Company or an Investment Manager under this Section will remain in effect and will be binding until they are revoked or amended in writing or otherwise in accordance with the Trustee’s prescribed procedures and delivered to the Trustee. The Trustee is not responsible for the propriety of any directed investment, will not be required to consult with or advise the Company or Investment Manager regarding the investment quality of any directed investment, and shall have no obligation to review or make recommendations with respect to any investment made at the direction of the Company or Investment Manager. The Trustee will retain custody of any securities or other property acquired as a result of any investment directions received from the Company or Investment Manager until the Company or Investment Manager, as the case may be, directs the Trustee, in writing or otherwise in accordance with prescribed procedures, to dispose of them.

(d) The Trustee may invest in securities (including stock or rights to acquire stock) or obligations issued by the Company. All rights associated with assets of the Trust shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan participants.

The Company shall have the right, at any time, and from time to time in its sole discretion, to substitute assets acceptable to the Trustee of equal fair market value for any asset held by the Trust; provided, however, that on and after the date of a Change in Control, any assets transferred to the Trust in substitution for assets held by the Trust must consist of cash or marketable securities acceptable to the Independent Committee and the fair market value of the respective assets shall be determined by the Trustee. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.

7. Disposition of Income

During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested.

8. Proxies

(a) The Trustee will monitor information distributed to holders of securities or other property about upcoming shareholder meetings, promptly notify the applicable Investment Manager (or the Company in the case of a Company directed account) of such information and, subject to Section 7(c), act in accordance with the instructions of the Investment Manager (or the Company, as the case may be) in relation to such meetings (the “Proxy Voting Service” ).

(b) The Proxy Voting Service is available only in certain markets, details of which are available from the Trustee on request. Provision of the Proxy Voting Service is conditional upon receipt by the Trustee of any additional documentation that may be required for certain markets.

(c) The Proxy Voting Service does not include physical attendance at shareholder meetings. Requests for physical attendance at shareholder meetings can be made but they will be evaluated and agreed to by the Trustee on a case by case basis.

(d) The Company acknowledges that the provision of the Proxy Voting Service may be precluded or restricted under a variety of circumstances. These circumstances include, but are not limited to:

(i) the securities or other property being on loan or out for registration;

(ii) the pendency of conversion or another Corporate Action (as hereinafter defined);

(iii) the securities or other property being held in a margin or collateral account at the Trustee or another bank or broker, or otherwise in a manner which affects voting;

(iv) local market regulations or practices, or restrictions by the issuer; and

(v) the Trustee being required to vote all shares held for a particular issue for all of the Trustee’s customers on a net basis (i.e., a net yes or no vote based on voting instructions received from all its customers). Where this is the

case, the Trustee will notify the applicable Investment Manager (or the Company in the case of a Company directed account).

9. Corporate Actions

“Corporate Action” means any subscription right, bonus issue, stock repurchase plan, redemption, exchange, tender offer, or similar matters with respect to any securities or other property that requires discretionary action by the Trust Fund, but does not include rights with respect to class action litigation or proxy voting.

(a) The Trustee will act in accordance with local market practice to obtain information concerning Corporate Actions that is publicly available in the local market. The Trustee also will review information obtained from sources to which it subscribes for information concerning such Corporate Actions. The Trustee will promptly provide that information (or summaries that reflect the material points concerning the applicable Corporate Action) to the applicable Investment Manager (or the Company in the case of a Company directed account). The Trustee does not commit, however, to provide information concerning Corporate Actions relating to securities or other property being held at the applicable Investment Manager’s (or the Company’s, as the case may be) request in a name not subject to the control of the Trustee.

(b) The Trustee will act in accordance with the instructions of the Investment Manager (or the Company, as the case may be) in relation to such Corporate Actions. If the Investment Manager (or the Company, as the case may be) fails to provide the Trustee with timely instructions with respect to any Corporate Action, neither the Trustee nor its nominees will take any action in relation to that Corporate Action, except as otherwise agreed in writing by the Trustee and the applicable Investment Manager (or the Company, as the case may be) or as may be set forth by the Trustee as a default action in the notification it provides under Section 8(a) with respect to that Corporate Action.

(c) In the event that, as a result of holding of securities or other property in an omnibus account, the Trust receives fractional interests in securities or other property arising out of a Corporate Action or class action litigation, the Trustee is directed to credit the Trust Fund with the amount of cash the Trust Fund would have received had the securities or other property not been held in an omnibus account, and the Trust Fund shall relinquish to the Trustee its interest in such fractional interests. If some, but not all, of an outstanding class of securities or other property is called for redemption, the Trustee may allot the amount redeemed among the respective beneficial holders of such class of securities or other property on a pro rata basis or in a similar manner the Trustee deems to be fair and equitable.

10. Class Action Litigation

(a) (i) Any notices received by the Trustee’s corporate actions department about settled securities class action litigation that requires action by affected owners of the underlying securities or other property will be promptly notified to the Company if the Trustee, using reasonable care and diligence in the circumstances, identifies that the Trust Fund was a shareholder and held the relevant securities or other property in the Trust Fund with the Trustee at the relevant time. The services set forth in this Section 9 are available only in certain markets, details of which are available from the Trustee on request.

(ii) Except as otherwise provided in this Section 9, the Trustee will provide the following administrative services with respect to notifications of securities class actions that the Trustee may receive from time to time with regard to the Trust Fund’s accounts:

(A) preparing and submitting claims and supporting documentation on the Trust’s behalf in respect of securities class action notifications relating to the securities held in the Trust Fund’s Accounts during the relevant class period;

(B) responding to inquiries from claims administrators arising from the Trust’s participation in securities class actions and making changes to the filings of claim forms as needed to address such inquiries. Where additional information is required to make such changes, the Trustee will promptly contact the Company;

(C) communicating with claims administrators from time to time, in the Trustee’s discretion, with regard to the status of the Trust Fund’s claims; and

(D) crediting the Trust Fund upon receipt of claim proceeds from the claims administrator.

(ii) Schedule 1 lists those markets, types of securities class actions and limitations, if any, under which the Trustee provides the class action services under this Section 9. The Trustee may from time to time, in the Trustee’s discretion, modify such Schedule upon notice to the Company.

(iv) Except as otherwise expressly agreed by the parties, the services shall only be provided in respect of securities class action notifications listed on Schedule 1.

(v) When the Trustee completes and files claim forms or other documentation on the Trust Fund’s behalf, the Trustee shall be acting solely in a clerical capacity as the Company’s agent and shall not be a fiduciary to the Plan with respect to the performance of the services in the Section 9, even though, in its capacity as trustee, it may act separately as a fiduciary. The Trustee is not making any representation or warranty as to the advisability of the Trust participating in the securities class action; the Trustee is not representing any view of the Trustee in relation to the securities class action; and the Trustee is not making any representation or warranty as to the likely outcome of any class action, participation in which is wholly at the Company’s request and for the Trust Fund’s risk.

(vi) The Trustee will not file claims in respect of the Trust Fund’s securities transactions whilst such securities were held at other trustees or custodians or in a name that was not under the control of the Trustee during the relevant class period unless otherwise agreed in writing. If the Company so requests the Trustee to include such transactions, the Company represents that such information provided to the Trustee is true, correct and complete and agrees to indemnify and hold the Trustee harmless from any and all liabilities that may result from such transactions.

(vii) The Trustee shall not be obliged to file a claim or take any action in any securities action where the Trustee reasonably determine such securities class action proceeding does not conform with the standards or market practices prevailing in the relevant market.

(viii) The Trustee shall not be obliged to file a claim or take any action in any securities class action where such securities class action would require the Trustee to file a claim in its own name due to applicable law, regulation or market practice in the relevant market. The Trustee will promptly inform the Company in writing each time such a situation arises.

(b) (i) When the Trustee has received in accordance with market practice a securities class action notification, the Trustee shall, as contemplated by this Agreement, research records of accounts to identify the Trust’s interest, if any, with respect to any such securities class action notification and shall notify the Committee of the same by posting such notice on the Trustee’s website.

(ii) The Company shall instruct the Trustee prior to its standard cut-off time whether the Committee disagrees with any of the information provided by the Trustee under Clause 2(a) or if the Company does not wish the Trustee to proceed with filing a claim on the Trust’s behalf, as applicable in such market.

(iii) Except with respect to securities issued by the Company, unless the Trustee has received Instructions not to file a claim on the Trust’s behalf at its central securities class actions department by the cut-off time, the Trustee shall, to the extent applicable in such market, be under standing instructions to complete and file the required claim forms for the particular securities class action with the claims administrator. The Trustee will not file claims in respect of securities issued by the Company but will assist the Company in completing any documentation reasonably necessary for the Company to file such claim.

(iv) The Trustee shall present with the claim any supporting information that the Trustee has in its possession and that is required as part of the filing as set out in the securities class action notification. The Trustee shall be authorized to disclose such information regarding the Trust Fund as may be reasonably required to complete and file claims on the Trust’s behalf.

(c) (i) The Company will provide the Trustee with such information and documentation as the Trustee may reasonably require in connection with the services under this Section 9.

(ii) The Company acknowledges that in relation to any securities class action it is important that only one claim is filed on the Trust’s behalf in respect of a custodial holding or securities transaction. If, in the same securities class action, multiple claims are submitted on the Trust’s behalf for the same custodial holding, then all such claims might be rejected by the claims administrator. Therefore, where a claim is to be submitted by the Trustee as set out in a notification, as provided by this authorization, no other party should submit a claim on the Trust’s behalf for the same custodial holding or securities transaction in the same securities class action and the Trustee shall have no duty to check whether any other claims have been filed by any third party on the Trust’s behalf in the same securities class action. Subject to Subsection (d) the Trustee will have no responsibility in the event that a claim is rejected on the basis that a duplicate claim has been filed by the Company or another party.

(iii) Should the Company engage a third party to make a claim on the Trust’s behalf in respect of a custodial holding or securities transaction with the Trustee, the Company shall be responsible for instructing the Trustee not to file a claim on the Trust’s behalf by the deadline referred to in the relevant notification.

(d) In the event that the Trustee is notified by the claims administrator that it has rejected a claim, the Trustee will use reasonable endeavors to contact the Company and discuss, in good faith, how to cure the rejected claim, if possible.

(e) The Company agrees that the Trustee’s annual aggregate liability with respect to losses arising out of the Additional Services provided under this Schedule (whether for breach of contract, tort, or otherwise, but excluding losses caused by fraud, negligence, or willful misconduct on the part of the Trustee) that may be incurred during any calendar year shall not exceed USD 100,000 and that this shall be the Company’s and the Trust’s exclusive remedy. No action, regardless of form, arising out of or pertaining to the Additional Services may be brought more than six years after the cause of action has accrued.

11. Records; Annual Account

The Trustee shall maintain appropriate records pertaining to administration of the Trust and the Trust Fund and any other records that the Company requests and which the Trustee agrees to maintain. At any time during the Trustee’s normal business hours, the Company or any person designated by the Company may audit and inspect the accounts, books and records of the Trustee maintained in connection with the Trust Fund. Within 90 days following the close of each fiscal year of the Trust and within 90 days following the effective date of the removal or resignation of the Trustee or termination of the Trust, the Trustee shall file with the Company a written accounting of all Trust Fund transactions since the most recent report was filed. The Company may approve this accounting by giving written notice of approval to the Trustee. The Company will be deemed to have approved any accounting to which it has not objected by giving the Trustee written notice of its objection within 60 days after receiving the accounting. If the Company approves the accounting in writing (or fails to object, in writing, within 60 days after receiving the accounting), the Trustee shall be released and discharged as to all items, matters and things included in that accounting (except as to any item, matter or thing that (i) is attributable to the Trustee's fraud, gross negligence, criminal violation, or willful misconduct, or (ii) could not have been discovered by a reasonably diligent review of the accounting). The Trustee also may have its accounts settled by judicial proceedings. In such event, only the Trustee and the Company shall be necessary parties although the Trustee, in its discretion, may join as defendants any other person or persons who may have or claim an interest in the Trust Fund. Except as otherwise provided by applicable law, only the Company may require the Trustee to prepare an accounting under this Section or may institute an action or proceeding against the Trustee with respect to any accounting delivered under this Section.

12. Responsibility of Trustee

(a) The Trustee shall perform those duties under this Agreement that constitute it as a fiduciary under ERISA in accordance with the standard of care set forth in Section 404(a) of ERISA; the Trustee shall exercise reasonable care with respect to its remaining duties and obligations under this Agreement.

(b) The Trustee shall not be required to defend any suit or other action against the Trust Fund unless it holds assets in the Trust Fund sufficient for, or has been indemnified to its satisfaction for, its reasonable counsel fees, costs, disbursements and all other reasonable associated expenses and liabilities to which it may, in its judgment, be subjected on account of that suit or other action. The Trustee may seek reimbursement for such expenses from the Company as described in Section 13(a) or may apply any asset of the Trust Fund to meet those expenses and liabilities.

(c) The Trustee has the right, but not the obligation, to consult with counsel of its own choosing, who also may be counsel for the Trustee or the Company, and to act or decline to act in accordance with such counsel’s advice. The Trustee may also act or decline to act in accordance with the opinion or determination of the Company’s auditor with respect to matters within the authority of the auditor. To the extent permitted by law, the Trustee shall have no Liability in any respect for any action taken, suffered or omitted in good faith by the Trustee either in accordance with the advice of counsel chosen by the Trustee, or in accordance with any opinion of counsel to the Company addressed and delivered to the Trustee, or in accordance with the opinion or determination of the Company’s auditor provided that the Trustee reasonably took or omitted to take action pursuant to such advice.

(d) The Trustee may use third party delivery services and providers of information regarding matters such as pricing, proxy voting, Corporate Actions and class action litigation and use local agents to provide extraordinary services such as attendance at annual meetings of issuers of securities or other property). Provided that the Trustee satisfies the applicable standard of care under Section 11(a) of this Agreement in the selection and retention of such third party providers and local agents, it will not be responsible for any errors or omissions made by them in providing the relevant information or services.

(e) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. The Trustee shall not be liable for any acts or omissions of any such person provided that the Trustee selects and supervises that person in accordance with the standard of care set forth in Section 11(a) of this Agreement.

(f) Subject to the terms of this Agreement, the Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if the Trustee agrees

to hold an insurance policy as an asset of the Trust, the Trustee shall have no responsibility to review the policy or the creditworthiness of the issuer thereof at any time or from time to time or to determine the amount of premium to be paid, and no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. The Company may make premium payments directly to the insurance carrier with respect to any insurance policy held as an asset of the Trust.

(g) Each direction, notice, request, or approval by the Company (whether or not certified to the Trustee in writing) shall constitute a certification by the Company to the Trustee that such direction conforms with the Plan(s) and applicable law.

(h) The Trustee shall not be under any duty to require payment of any contributions to the Trust, or to see that any payment made to it is computed in accordance with the provisions of the Plan(s), or otherwise be responsible for the adequacy of the Trust to meet and discharge any liabilities under the Plan(s).

(i) Notwithstanding any powers granted to the Trustee pursuant to this Agreement or to applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.

(j) Unless otherwise specifically required by this Agreement, directives, instructions and other communications under this Agreement or relating to the Trust Fund (including, without limitation, instructions regarding the investments of the Trust Fund and directions to make benefit payments and other disbursements) must be provided in writing or by telex, fax or facsimile transmission, bank wire or other teleprocess or electronic or trade information system acceptable to the Trustee.

(k) “Security Procedure” means security procedures to be followed by the Company upon the issuance of an instruction and/or by the Trustee upon the receipt of an instruction, so as to enable the Trustee to verify that such instruction is authorized, as set forth in service level documentation in effect from time to time between the parties with respect to the services set forth in this Agreement, or as otherwise agreed in writing by the parties. A Security Procedure may, without limitation, involve the use of algorithms, codes, passwords, encryption or telephone call backs, and may be updated by the Trustee from time to time upon notice to the Company. The Company acknowledges that Security Procedures are designed to verify the authenticity of, and not detect errors in, instructions. For the avoidance of doubt, the parties agree that a SWIFT message issued in the name of the Trust through any third party utility agreed upon by the parties as being a method for providing instructions and authenticated in accordance with that utility’s customary procedures, shall be deemed to be an authorized instruction.

(l) The duties and obligations of the Trustee shall be limited to those expressly imposed upon it by this Agreement or subsequently agreed upon by the parties in writing, notwithstanding any reference herein to the Plan(s), or to the provisions thereof, it being expressly agreed that the Trustee is not a party to the Plan(s). The Trustee has no responsibility for the application of the terms or administration of the Plan(s), including, without limitation, the determination of matters relating to the eligibility of any employee to become a participant or remain a participant, the amount of benefit which a participant or beneficiary is entitled to receive, whether a distribution to a participant or beneficiary is appropriate, or the size and type of any insurance policy to be purchased from any insurer for any participant; the Company has these responsibilities under the Plan(s).

13. Indemnification

(a) The Company shall indemnify and hold harmless the Trustee, its affiliates, and their respective nominees, directors, officers, employees and agents (each an “Indemnified Person” ) from and against any and all Liability to which any Indemnified Person may be subjected as a result of this Agreement or the Trustee’s performance of services hereunder, including, but not limited to, any Liability arising from (i) any action or failure to act resulting from compliance with proper instructions of the Company or any other person authorized by the Company to give directions to the Trustee, or (ii) by reason of any breach of any statutory or other duty owed to the Plan(s) or Plan participants by the Company, or any of its officers, directors, employees, or agents; provided that the Trustee does not participate knowing in, or knowingly undertake to conceal, any act or omission of any such person acting as a fiduciary to the Plan(s), knowing such act or omission to be a breach of fiduciary responsibility by such person.

(b) The Trustee, its affiliates, and their officers, agents and employees may bring action against the Company to contribute to the satisfaction of any Liability to the extent that the Liability (i) is not subject to indemnification under Subsection (a);and (ii) is caused by the culpable conduct of the Company or any of its affiliates or agents, including but not limited to, any Investment Manager.

(c) The Trustee will be liable for the Trust’s or the Company’s direct damages to the extent they result from the Trustee’s fraud, negligence or willful misconduct in performing its duties as set out in this Agreement. Nevertheless, under no circumstances will the Trustee be liable for any indirect, incidental, consequential or special damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, with respect to the Accounts, the Trustee’s performance under this Agreement, or the Trustee’s role as trustee. In addition, the Trustee shall reimburse the Company and the Committee (collectively, the “Company Indemnitees”) for any other Liability payable by the Company Indemnitees to a third party to the extent such Liability is determined by a final, unappealable judgment of a court of competent jurisdiction to be attributable to the Trustee’s negligence, fraud, or willful misconduct, provided, however, that the Trustee shall not be obligated to reimburse any Company Indemnitee for Liability that constitute consequential, special or incidental damages of any party and provided further that the Company Indemnitees have taken reasonable steps to mitigate damages.

(d) The foregoing rights of indemnification and contribution shall not supersede any common law or equitable rights or remedies which may be available.

(e) For purposes of this Agreement, “Liabilities” means any liabilities, losses, claims, costs, damages, penalties, fines, obligations, taxes (other than taxes based solely on the Trustee’s income) or expenses of any kind whatsoever (including, without limitation, reasonable attorneys’, accountants’, consultants’ or experts’ fees and disbursements).

(f) The provisions of this Section 13 shall survive the termination of this Agreement.

14. Compensation and Expenses of the Trustee

(a) The Trustee shall be paid such reasonable compensation as shall from time to time be agreed upon by the Company and the Trustee. Such compensation and all reasonable and proper expenses of administration of the Trust, (including, without limitation, counsel fees and legal fees and tax or related fees incidental to processing charged directly or indirectly by governmental authorities, issuers, or their agents) shall be withdrawn by the Trustee out of the Trust Fund unless paid by the Company, but such compensation and expenses shall be paid by the Company if the same cannot by operation of law be withdrawn from the Trust Fund. All payments under this Article 13 may be made from the Trust Fund without approval of or instructions from the Company in the event that the Company have not paid the same or notified Trustee in writing of their intent to pay by the billing period subsequent to the charge. If the Company disputes an invoice it shall nevertheless pay, or allow the Trustee to deduct on or before the date that payment is due, such portion of the invoice that is not subject to a bona fide dispute. The Trustee shall be entitled, as an additional part of its compensation under this Agreement, to the earnings derived from use of funds ( “float” ) that may be held (i) as uninvested trust cash, (ii) with respect to failed securities transactions or (iii) in demand deposit or other non-interest bearing accounts established for the payment of benefits or Plan disbursements or that are otherwise maintained for similar purposes in administering the Trust Fund. The float period for (i) disbursements commences one to five business days after a check for the payment of such benefits or Plan disbursements is mailed and ends on the date the check is presented to the Trustee for payment; (ii) failed securities transactions commences on the contractual settlement date and ends on the date the transaction is settled or cancelled at the direction of the Investment Manager (or the Company in the case of a Company directed Account, as applicable); and (iii) uninvested cash commences when such cash is received and ends on the date such cash is invested pursuant to instructions. Float is generally earned at the federal funds rate.

(b) The Trustee is authorized to advance cash or securities to effect the orderly processing and settlement of securities and other financial market transactions and the distribution of funds from the Trust in accordance with the Trustee’s established settlement policies and procedures for overdraft protection services. The Trustee shall be entitled to immediate repayment of any such advanced funds plus the Trustee’s customary overdraft charges and shall bear interest at the applicable rate charged by the Trustee from time to time, which, as of the date of this Agreement, is the Federal Funds rate plus two hundred basis points, for such overdrafts, from the date of such advance to the date of payment. Whenever such an advance is made, the Trustee shall have a security interest in and a lien on the securities or other property to the extent and for the duration of such advance until repaid and all the rights of a secured party under the New York Uniform Commercial Code. Except with respect to real estate and deferred capital contributions to investments in alternative assets, securities or other property shall not be subject to any encumbrance or security interest that has priority over the security interest, lien and rights of set off granted to the Trustee under this Agreement over securities or other property, to secure fees and charges in the ordinary course of business (including costs of purchases of securities or other property) or returned items and charge backs in the ordinary course of business. The Company undertakes that it will not create or permit to subsist any such encumbrance or security interest to the extent provided in this Subsection (b) over such securities or other property. The Trust shall be deemed to be in default with respect to any such overdraft upon the occurrence of any event with respect to the Company of the type specified in section 365(e)(1) of the U. S. Bankruptcy Code, as amended from time to time.

(c) Without prejudice to the Trustee’s rights under Applicable Law, the Trustee may set off against any indebtedness any amount standing to the credit of any of the Company’s or Trust Fund’s accounts (whether deposit or otherwise) with any Trustee branch or office or with any Affiliate of the Trustee. For this purpose, the Trustee shall be entitled to accelerate the maturity of any fixed term deposits.

15. Resignation and Removal of Trustee

(a) The Trustee may resign at any time by giving written notice to the Company at least 60 days before its effective date unless the Company and the Trustee agree to reduce this period.

(b) The Company may remove the Trustee at any time by giving written notice to the Trustee at least 60 days before its effective date unless the Company and the Trustee agree to reduce this period.

(c) Upon resignation or removal of the Trustee and appointment of a successor Trustee, the resigning or removed Trustee shall transfer and deliver all assets to the successor Trustee after reserving such reasonable amount as it shall deem necessary to provide for any expenses and payments then chargeable against the Trust Fund for which the Trust Fund may be liable, or for payment of the retiring Trustee’s fees and expenses in connection with the settlement of its account or otherwise. If the assets so withheld shall be insufficient or excessive for such purposes, the retiring Trustee shall be entitled to reimbursement for any deficiency out of the Trust Fund from the successor Trustee, or shall deliver the excess to the successor Trustee, as the case may be.

(d) If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 15 hereof, by the effective date of resignation or removal under paragraphs (a) or (b) of this Section. If no such appointment has been made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust.

16. Appointment of Successor

(a) If the Trustee resigns or is removed in accordance with Section 14(a) or (b) hereof, the Company may appoint as successor any third party, such as a bank trust department or other party that may be granted corporate trustee powers; provided, however, that if the Trustee resigns or is removed on or after the date of a Change in Control, the Independent Committee shall select a successor trustee in accordance with this Section 16. The appointment of a successor shall be effective when accepted in writing by the new trustee, who shall have all of the rights and powers of the former trustee, including ownership rights in the Trust assets. The former trustee shall execute any instrument necessary or reasonably requested by the Company or the successor trustee to evidence the transfer.

(b) The successor trustee need not examine the records and acts of any prior trustee, and may retain or dispose of existing Trust assets, subject to Sections 10 and 11 hereof. The successor trustee shall not be responsible for, and the Company shall indemnify and defend the successor trustee from, any claim or liability resulting from any action or inaction of any prior trustee or from any other past event or any condition existing at the time it becomes successor trustee.

(c) Any corporation into which the Trustee or any successor corporate trustee hereunder may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee or any successor trustee may be a party, or any corporation to which all or substantially all the trust business of the Trustee or any successor trustee may be transferred, shall thereupon become and be the trustee of the Trust with the same effect as though specifically so named and without the filing of any instrument or performance of any further act.

17. Amendment or Termination

(a) This Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, (i) no such amendment shall make the Trust revocable, and (ii) this Trust Agreement may not be amended on or after the date of a Change in Control without the written consent of a majority of the participants in the Plans.

(b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan(s). Upon termination of the Trust, any assets remaining in the Trust shall be returned to the Company.

Upon written approval of all of the participants (including any beneficiaries of deceased participants entitled to payment of benefits pursuant to the terms of the Plans) (as determined solely by the Company), the Company may notify the Trustee of such written approval and direct the Trustee to terminate this Trust prior to the time all benefit payments under the Plans have been made. Upon termination of the Trust, any assets remaining in the Trust shall be returned to the Company.

18. Miscellaneous

(a) Any provision of this Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

(b) Benefits payable to Plan participants and their beneficiaries under this Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.

(c) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its choice of law rules, except that the foregoing shall not reduce any statutory right to choose New York law or forum. The United States District Court for the Southern District of New York shall have the sole and exclusive jurisdiction over any lawsuit or other judicial proceeding relating to or arising from this Agreement. If that court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York, New York County shall have sole and exclusive jurisdiction. Either of these courts shall have proper venue for any such lawsuit or judicial proceeding, and the parties waive any objection to venue or their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of process to vest personal jurisdiction over them in any of these courts. The parties further hereby knowingly, voluntarily and intentionally waive, to the fullest extent permitted by applicable law, any right to a trial by jury with respect to any such lawsuit or judicial proceeding arising or relating to this Agreement or the transactions contemplated hereby. To the extent that in any jurisdiction Company may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, Company shall not claim, and it hereby irrevocably waives, such immunity.

(d) The Company shall certify to the Trustee the names and specimen signatures of those persons entitled to act on behalf of the Company or any affiliate of the Company who adopts the Plan pursuant to subsection (i) below (an “Employer”) (in the form as provided by the Trustee) (“Authorized Persons”). Such certificates will be conclusive proof of the authority of those named until the Trustee is provided with a subsequent certificate stating that such authority is withdrawn. The Trustee may rely upon any instrument, certificate or document it reasonably believes to be genuine and to have been signed or presented by an authorized person. The Trustee shall not be required to inquire into or to determine the validity of the Plan(s), this Agreement or any other document, instruction or authorization which it believes to be genuine, or their proper execution or adoption by the Company.

(e) The Company, or its designated agent, are responsible for the timely and accurate provision of any necessary information to the Trustee to enable the Trustee to perform its duties hereunder, including, but not limited to information relating to distributions to participants. The Trustee shall not be responsible for the completeness and accuracy of the material and information provided to it under this Agreement.

(f) The terms and conditions, procedures, and rights and obligations of the parties with respect to the Trustee’s provision of record keeping, funds transfer, depository, banking, and other services for or on behalf of the Plan(s) or Trust may from time to time be described in and/or subject to separate written procedures, agreements, user guides, service terms or other instruments (“Services Documents” ), which are hereby incorporated by reference and made a part hereof. In the event of a conflict between this Agreement and any Services Documents, the provisions of the Services Documents shall control with respect to the subject matter thereof, subject at all times to the provisions of applicable law.

(g) The Trustee will maintain and update from time to time and implement, when necessary, business continuation and disaster recovery procedures with respect to its directed trustee business that it determines from time to time meet reasonable commercial standards. The Trustee will have no liability, however, for any damage, loss, expense or liability of any nature that any Person may suffer or incur, caused by an act of God, fire, flood, civil or labor disturbance, war, terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), legal constraint, fraud or forgery (other than on the part of the Trustee or its employees), malfunction of equipment or software (except where such malfunction is primarily and directly attributable to the Trustee’s negligence in maintaining the equipment or software), failure of or the effect of rules or operations of any external funds transfer system, inability to obtain or interruption of external communications facilities, or any other cause beyond the reasonable control of the Trustee (including without limitation, the non-availability of appropriate foreign exchange).

(h) In the event that a dispute arises between a Plan participant or beneficiary and the participant’s Employer, the Company or the Trustee with respect to the payment of amounts from the Trust and the participant or beneficiary is successful in pursuing a benefit to which he or she is entitled under the terms of the Plans and this Trust against the participant’s Employer, the Company, the Trustee or any other party in the course of litigation or otherwise and incurs attorneys’ fees, expenses and costs in connection therewith, the participant’s Employer shall reimburse the participant or beneficiary for the full amount of any such attorneys’ fees, expenses and costs.

(i) Upon the written consent of the Company delivered to the Trustee, any other affiliate of the Company that adopts the Supplemental Profit Sharing Plan may become a party to this Trust by delivering to the Trustee a certified copy of a resolution of its board of directors or other governing authority adopting this Trust. For purposes of this Trust, any such affiliate that adopts this Trust with the written consent of the Company shall be an Employer hereunder.

(j) Only the Company and the Trustee are necessary parties to any action arising under or in connection with this Agreement and notice of any action need not be given to any participant, beneficiary or other person claiming an interest in the Trust Fund. However, the Trustee or the Company may join as a defendant any participant, beneficiary or other person claiming an interest in the Trust Fund. Any judgment entered or settlement reached on any matter affecting the Trust Fund will be conclusive upon all persons claiming an interest in the Trust Fund, whether or not they were notified of or joined as a party to the action.

(k) With respect to Securities and Exchange Commission Rule 14b-2 under the U.S. Shareholder Communications Act, regarding disclosure of beneficial owners to issuers of securities, Trustee is instructed not to disclose the name, address or security positions of the Trust in response to shareholder communications requests regarding the Account.

(l) If the Company has agreed to access information concerning the Trust Fund through the Trustee’s Internet site, the Trustee may make any notifications required under this Agreement, other than notifications pursuant to Section 14, by posting it on the Internet site. Any notices given under Section 14 of this Agreement shall be sent or served by registered mail, nationally recognized delivery services, such as Federal Express (FedEx) or United Parcel Service (UPS), etc., courier services or hand delivery to the address of the respective parties as set out on the signature page of this Agreement, unless notice of a new address is given to the other party in writing. Each party to this Agreement shall notify all other parties of any change in its address in the manner provided in this Section.

(m) Access by the Company and any Investment Manager to certain applications or products of the Trustee via the Trustee’s web site or otherwise shall be governed by this Agreement and the terms and conditions set forth in Exhibit E.

(n) Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ( “USA PATRIOT Act” ) requires the Trustee to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, the Company acknowledges that Section 326 of the USA PATRIOT Act and the Trustee’s identity verification procedures require the Trustee to obtain information which may be used to confirm the Company's identity including without limitation the Company's name, address and organizational documents ( “identifying information” ). The Company may also be asked to provide information about its financial status such as its current audited and unaudited financial statements. The Company agrees to provide the Trustee with and consents to the Trustee obtaining from third parties any such identifying and financial information required as a condition of opening an account with or using any service provided by the Trustee.

IN CONSIDERATION OF THE FOREGOING, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the day and year first above written.



Trinity Industries, Inc.		JPMorgan Chase Bank, N.A.

By:	/s/ S. Theis Rice	By:	/s/ Kristin Brown

Name:	S. Theis Rice	Name:	Kristin Brown
	Senior Vice President, Human Resources and Chief Legal		Vice President, Relationship
Title:	Officer	Title:	Management

Address:	2525 Stemmons Freeway	Address:
	Dallas, TX 75207


Company Tax Identification Number:

EXHIBITS AND SCHEDULES


EXHIBIT A	List of Plans Covered by this Agreement

The following plans are each a “Plan” for purposes of this Agreement.

Trinity Industries, Inc. Deferred Compensation Trust


EXHIBIT B	Secretary’s Certificate

[COMPANY]

Secretary’s Certificate

The undersigned does hereby certify that he/she is the duly elected and qualified Secretary of [Company] (the “Company”).

I further certify that the following is a true copy of resolutions duly adopted by the governing body (“Board”) of the Company:

WHEREAS, the Company sponsors one or more non-qualified deferred compensation plans and desire to establish a trust (the “Trust”); and

WHEREAS, the Company desires to appoint a trustee for the Trust, and in connection therewith to enter into a trust agreement; and

WHEREAS, the Board has reviewed a form of trust agreement (together with the exhibits, schedules and ancillary documents) provided by JPMorgan Chase Bank, N.A. (“J.P. Morgan”) for use in connection with the opening of one or more trust accounts and the conduct of such other transactions between the Company and J.P. Morgan as referred to therein. The form of trust agreement had been reviewed by an officer of the Company, and the indemnities given to J.P. Morgan in the trust agreement were noted. The Board considered the form of the trust agreement.

NOW, THEREFORE, IT IS RESOLVED that the Board hereby approves the Company’s amendment and restatement of the provisions of the Trust in the form of trust agreement (together with the exhibits, schedules and ancillary documents) completed in the manner and form presented to the Board.

FURTHER RESOLVED, that J.P. Morgan is appointed as trustee of the Trust effective upon the delivery of the assets of the Trust to J.P. Morgan.

I further certify that the individuals whose names, titles and specimen signatures appear below are duly elected, qualified and acting officers of the Company holding the positions set forth opposite their names, that their signatures as set forth below are true and genuine and that they have been duly authorized by the Board, in accordance with our By-Laws, to execute the trust agreement, tax documents and any related documentation with respect to our trust account(s) with J.P. Morgan.



Name	Title	Signature

IN WITNESS WHEREOF, I have subscribed my name this ________ day of ____________________, 20______.

Secretary

(Affix Seal)

Organization has no Seal


EXHIBIT C	Benefit Payment Services to be Provided by the Trustee


·	Issue monthly annuity and lump sum payments either by check or electronic funds transfer (EFT)


·	Produce and mail advices for all EFT payments (unless otherwise directed)


·	Notify Company regarding all outstanding payments over 90 days


·	Supply monthly reporting through InfoWeb


·	Supply check photocopies


·	In the event of a forged endorsement, make a payment demand for the amount of the item on any honoring bank (and furnish such bank with appropriate documentation for the payment demand). Trustee shall not be required to undertake any recovery litigation.


·	Process levies, wage garnishments and other withholding orders as directed the Company.


·	Notify the Company of any levy or other withholding order received directly and comply with the same, as directed by the Company.


·	As directed by the Company, contest any levy or other withholding order upon the Company’s agreement to indemnify Trustee for its reasonable fees and expenses (including reasonable attorneys’ fees) which it may incur in contesting such levy or other withholding order.


·	Make available semi-annual SAS70 or SSAE16 independent auditor controls report, as applicable


·	Provide electronic access to plan sponsor and participant applications as listed in Schedule 1 to Exhibit E


EXHIBIT D	Information to be Provided for Benefit Payment Services

Information to be Provided by the Company or Plan Committee


·	All payee information and payment direction including:


·	Adds, changes and terminations


·	Stop and reissue requests


·	Photocopy requests


·	Authorized signature cards


·	Completed Security Administrator Form


·	Completed user access application forms, as required


·	Funding is required to the custody account at least five business days prior to the benefit payment date or such other date as is notified to the Company or Plan Committee.

Information to be Provided by Trustee


·	Cut-off times-As set forth in Trustee’s monthly processing calendar


EXHIBIT E	Electronic Access

1. The Trustee may permit the Company and its Authorized Persons to access certain electronic systems, applications and Data (as defined below) in connection with the Agreement (collectively, the “Products”). The Trustee may, from time to time, introduce new features to the Products or otherwise modify or delete existing features of the Products in its sole discretion. The Trustee shall endeavor to give the Company reasonable notice of its termination or suspension of access to the Products, but may do so immediately if the Trustee determines, in its sole discretion, that providing access to the Products would violate applicable law or that the security or integrity of the Products is at risk. Access to the Products shall be subject to the Security Procedures.

2. In consideration of the fees paid by the Company or the Trust Fund to The Trustee and subject to any applicable software license addendum in relation to Trustee-owned or sublicensed software provided for a particular application and applicable law, the Trustee grants to the Company a non-exclusive, non-transferable, limited and revocable license to use the Products and the information and data made available through the Products (the “Data”) for the Company’s and the Trust Fund’s internal business use only. The Company may download the Data and print out hard copies for its reference, provided that it does not remove any copyright or other notices contained therein. The license granted herein will permit use by Company’s Authorized Persons, provided that such use shall be in compliance with the Agreement, including this Exhibit.

3. The Company acknowledges that there are security, corruption, transaction error and access availability risks associated with using open networks such as the Internet, and the Company hereby expressly assumes such risks. The Company is solely responsible for obtaining, maintaining and operating all software (including antivirus software, anti-spyware software, and other Internet security software) and personnel necessary for the Company to access and use the Products. All such software must be interoperable with the Trustee’s software. Each of the Company and the Trustee shall be responsible for the proper functioning, maintenance and security of its own systems, services, software and other equipment.

4. In cases where the Trustee’s web site is unexpectedly down or otherwise unavailable, the Trustee shall, absent a force majeure event, provide other appropriate means for the Company or its Authorized Persons to instruct the Trustee or obtain reports from the Trustee. The Trustee shall not be liable for any Liabilities arising out of the Company’s use of, access to or inability to use the Products via the Trustee’s web site in the absence of the Trustee’s gross negligence or willful misconduct.

5. Use of the Products may be monitored, tracked, and recorded. In using the Products, the Company hereby expressly consents to such monitoring, tracking, and recording. Individuals and organizations should have no expectation of privacy unless local law, regulation, or contract provides otherwise. The Trustee shall own all right, title and interest in the data reflecting Company usage of the Products or the Trustee’s web site (including, but not limited to, general usage data and aggregated transaction data). The Trustee may use and sublicense data obtained by it regarding the Company’s use of the Products or the Trustee’s website, as long as the Trustee does not disclose to others that the Company was the source of such data or the details of individual transactions effected using the Products or web site.

6. The Company shall not knowingly use the Products to transmit (i) any virus, worm, or destructive element or any programs or data that may be reasonably expected to interfere with or disrupt the Products or servers connected to the Products; (ii) material that violates the rights of another, including but not limited to the intellectual property rights of another; and (iii) “junk mail”, “spam”, “chain letters” or unsolicited mass distribution of e-mail.

7. The Company shall promptly and accurately designate in writing to the Trustee the geographic location of its users upon written request. The Company further represents and warrants to the Trustee that the Company shall not access the service from any jurisdiction which the Trustee informs the Company or where the Company has actual knowledge that the service is not authorized for use due to local regulations or laws, including applicable software export rules and regulations. Prior to submitting any document which designates the persons authorized to act on the Company’s behalf, the Company shall obtain from each individual referred to in such document all necessary consents to enable the Trustee to process the data set out therein for the purposes of providing the Products.

8. The Company will be subject to and shall comply with all applicable laws, rules and regulations concerning restricting collection, use, disclosure, processing and free movement of the Data (collectively, the “Privacy Regulations”). The Privacy Regulations may include, as applicable, the Federal “Privacy of Consumer Financial Information” Regulation (12 CFR Part 30), as amended from time to time, issued pursuant to Section 504 of the Gramm-Leach-Bliley Act of 1999 (15 U.S.C. §6801, et seq.), the Health and Insurance Portability and Accountability Act of 1996 (42 U.S.C. §1320d), The Data Protection Act 1998 and Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to processing of personal data and the free movement of such data.

9. The Company shall be responsible for the compliance of its Authorized Persons with the terms of the Agreement, including this Exhibit.

SCHEDULE 1

Scope of Services

The following table shows the markets and types of Class Actions for which J.P. Morgan will provide the Services.



MARKET	SETTLED / NOT SETTLED	INSTRUCTION REQUIRED TO PARTICIPATE
U.S.A.	Settled	N

Exhibit 10.6

Trinity Industries, Inc. Supplemental Profit Sharing and Directors Fee Trust

Table of Contents

Page


1.	Continuation of Trust 1


2.	Payments to Plan Participants and their Beneficiaries 3


3.	Trustee Responsibility Regarding Payments to Trust Beneficiary When

Company Is Insolvent 5


4.	Payments to the Company 6


5.	Investment Authority 6


6.	Disposition of Income 8


7.	Proxies 8


8.	Corporate Actions 9


9.	Class Action Litigation 9


10.	Records; Annual Account 11


11.	Responsibility of Trustee 11


12.	Indemnification 13


13.	Compensation and Expenses of the Trustee 14


14.	Resignation and Removal of Trustee 15


15.	Appointment of Successor 15


16.	Amendment or Termination 15


17.	Miscellaneous 16


EXHIBIT A	List of Plans Covered by this Agreement 21


EXHIBIT B	Secretary’s Certificate 17


EXHIBIT C	Benefit Payment Services to be Provided by the Trustee 18


EXHIBIT D	Information to be Provided for Benefit Payment Services 19


EXHIBIT E	Electronic Access 20


SCHEDULE 1	Scope of Services 22

TRUST FOR NON-QUALIFIED DEFERRED COMPENSATION BENEFIT PLANS OF

TRINITY INDUSTRIES, INC.

This Agreement ( “Agreement” ) effective as of the _____ day of _______________, 20__ by and between Trinity Industries, Inc. ( “Company” ) and JPMorgan Chase Bank, N.A. ( “Trustee” );

RECITALS

(A) The Company has adopted the nonqualified deferred compensation Plan(s) as listed in Exhibit A.

(B) The Company has incurred or expects to incur liability under the terms of such Plan(s) with respect to the individuals participating in such Plan(s);

(F) It is the intention of the Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan(s);

(G) The Company and the Trustee desire to amend and restate the instrument governing the Trust in its entirety.

AGREEMENT

1. Continuation of Trust1. Continuation of Trust