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Trinity Industries Lifts FY EPS View; Accelerates Share Repurchase Program

Trinity Industries Inc. (TRN) raised its full year 2019 earnings per share guidance. It has entered into an accelerated share repurchase or "ASR" program with JPMorgan Chase Bank, National Association to repurchase $350 million of its common stock. The accelerated share repurchase program will complete Trinity's current share repurchase authorization for an aggregate of $500 million of its common stock.

Trinity said it will fund the accelerated share repurchase with proceeds received from an increase in borrowing under the Amended and Restated Term Loan Agreement of Trinity Rail Leasing 2017 LLC.

Trinity Industries raised its full year 2019 earnings per share guidance to $1.15 to $1.35 from the prior range of $0.90 to $1.10. Analysts polled by Thomson Reuters expect the company to report earnings of $ 1.10 per share for fiscal year 2019. Analysts' estimates typically exclude special items.

The guidance was updated due to the projected impact of the ASR program and orders received for new railcars since the issuance of the prior guidance. The Company now expects 2019 railcar deliveries of 23,500 to 25,500 as compared to the prior guidance of 22,500 to 24,000 railcars.

The Company's previous earnings guidance provided in the third quarter 2018 quarterly earnings announcement did not include the ASR program announced today. The ASR program is expected to benefit 2019 earnings per share by approximately $0.13, based on the closing stock price on November 15, 2018. Through September 30, 2018, Trinity has repurchased approximately 4.3 million shares for a total of $150 million under the current authorization. As of October 17, 2018, the company had total shares outstanding of approximately 146.3 million shares.

Under the terms of the ASR, Trinity has agreed to repurchase from JPMorgan $350 million of its common stock, with an initial delivery of approximately 12.9 million shares, representing approximately 80% of the notional amount of the ASR based on the closing price of $21.74 on November 15, 2018. The final number of shares to be repurchased will be based on the average of Trinity's daily volume-weighted average stock price, less a discount, during the term of the ASR program, which is expected to be completed by the end of the first quarter of 2019. The ASR program is expected to commence on November 19, 2018.

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