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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 2002
Commission File Number 1-6903
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PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC.
AND CERTAIN AFFILIATES AS RESTATED EFFECTIVE APRIL 1, 1999
(Full Title of the Plan)
TRINITY INDUSTRIES, INC.
(Name of issuer of the securities held pursuant to the plan)
Delaware 75-0225040
(State of Incorporation) (I.R.S. Employer Identification No.)
2525 Stemmons Freeway, Dallas, Texas 75207-2401
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (214) 631-4420
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Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Financial Statements
As of December 31, 2002 and 2001,
and for the Year ended December 31, 2002
CONTENTS
Report of Independent Auditors...........................................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits..........................................................2
Statement of Changes in Net Assets Available for Benefits................................................3
Notes to Financial Statements............................................................................4
Signatures..............................................................................................12
Exhibit
Consent of Independent Auditors.........................................................................14
(ERNST & YOUNG LETTERHEAD)
Report of Independent Auditors
Board of Directors
Trinity Industries, Inc.
We have audited the accompanying statements of net assets available for benefits
of the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain
Affiliates as Restated Effective April 1, 1999 as of December 31, 2002 and 2001,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2002. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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 net assets available for benefits of the Plan at
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the year ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young, LLP
Dallas, Texas
March 14, 2003
1
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Statements of Net Assets Available for Benefits
DECEMBER 31
2002 2001
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ASSETS
Plan's interest in Trinity Industries, Inc.
Master Trust $102,625,258 $126,844,034
Receivables:
Participant contributions 134,420 351,591
Company contributions 3,157,467 2,678,250
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3,291,887 3,029,841
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Net assets available for benefits $105,917,145 $129,873,875
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See accompanying notes.
2
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
ADDITIONS
Plan interest in Trinity Industries, Inc. Master Trust
investment income (loss) $ (18,317,775)
Contributions:
Participant 9,360,562
Company 3,202,341
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Total additions (5,754,872)
DEDUCTIONS
Benefits paid to participants 21,506,030
Administrative expenses 53,596
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Total deductions 21,559,626
Transfer in from Thrall Plans 3,357,768
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Net decrease (23,956,730)
Net assets available for benefits, at beginning of year 129,873,875
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Net assets available for benefits, at end of year $ 105,917,145
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See accompanying notes.
3
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements
December 31, 2002
1. DESCRIPTION OF THE PLAN
The following brief description of the Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as Restated Effective April 1,
1999 (the Plan) is provided for general information only. Participants should
refer to the Summary Plan Description for a more complete description of the
Plan's provisions.
GENERAL
The Plan, as amended and restated, is a defined contribution plan designed to
comply with the provisions of the Employee Retirement Income Security Act of
1974 (ERISA) sponsored by Trinity Industries, Inc. (the Company).
Effective January 1, 2002, the Plan was amended to change the plan year to be
the calendar year from January 1 through December 31 and to create a short plan
year for the period from April 1, 2001 through December 31, 2001.
Fidelity Management Trust Company (Trustee) is the trustee of the Plan. The
Company and the Trustee have entered into a Master Trust Agreement. Under the
Master Trust Agreement, the Plan participates in the Trinity Industries, Inc.
Master Trust (the Trinity Master Trust) with the McConway & Torley Profit
Sharing Plan (the M&T Plan), the Trinity Rail Group LLC Hourly Employees'
Retirement Savings 401(k) Plan, and the Trinity Rail Group LLC Certain Illinois
Hourly Employees' Retirement Savings Plan (collectively, The Trinity Rail Group
Plans). The Trinity Rail Group Plans began participating in the Trinity Master
Trust on January 1, 2002, per an amendment to the Master Trust Agreement. The
Company is the plan sponsor for each of the participating Plans.
PARTICIPATION
Each employee of the Company is eligible to contribute to the Plan on the first
day of the month following 60 days of eligible employment, and must meet the
following additional requirements:
(1) Must be classified as a full-time employee of the Company; and
(2) Must be in a unit of employees who are designated as eligible to
participate in the Plan; and
4
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
(3) Must not be included in a unit of employees covered by a collective
bargaining agreement, unless benefits under this Plan were included in an
agreement as a result of good faith bargaining.
Effective October 26, 2001, any employee of the Thrall Car Manufacturing Company
or Duchussois Industries, Inc. who, immediately prior to October 26, 2001, was a
participant in, or eligible to participate in, the Thrall Car Manufacturing
Company Salaried Employees' Retirement Savings Plan, the Trinity Rail Group LLC
Hourly Employees' Retirement Savings 401(k) Plan, and the Trinity Rail Group LLC
Certain Illinois Hourly Employees' Retirement Savings Plan (collectively the
Thrall Plans), became eligible to participate in the Plan. In 2002, transfers
from the Thrall Plans of $3,357,768 were made into the Plan.
CONTRIBUTIONS
Each participant electing to contribute to the Plan agrees to contribute not
less than 1% nor more than 14% of their eligible compensation, as defined in the
Plan, in 1% increments as designated by the participant. A salary reduction and
contribution agreement must be entered into by each employee as the employee
begins participation in the Plan, and may be amended at any time.
Company matching contributions shall be made if Company earnings are at least
sufficient to pay dividends to stockholders, but in no event less than $0.33 1/3
per share of common stock. The Board of Directors (Board) may, in its sole
discretion, elect to waive the Company earnings requirement. If the Company
matching contribution is made, then each participant shall receive an amount
equal to a percentage of that portion
5
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
of such participant's contribution, up to six percent of such participant's
total eligible compensation for the year, as defined, under the following
schedule:
PERCENTAGE OF COMPANY
YEARS OF SERVICE CONTRIBUTION
---------------- ---------------------
Less than 1 year 0%
1 but less than 2 years 25%
2 but less than 3 years 30%
3 but less than 4 years 35%
4 but less than 5 years 40%
5 or more years 50%
Company contributions are net of forfeitures, as defined. Company contributions
for a given Plan year shall be deposited in the Trinity Master Trust no later
than the date on which the Company files its federal income tax return for such
year.
PARTICIPANT ACCOUNTS
Participants may direct daily the investment of participant and Company
contributions among any of the thirteen registered investment companies and
Company common stock.
BENEFITS
Distribution of a participant's account balance is payable upon retirement at or
after age 65, total disability, death, or termination of employment.
Distribution is equal to the salary reduction contributions and related
earnings, plus the vested portion of any Company contribution and related
earnings.
Withdrawals of up to 100% of the participant's contributions can be made only to
meet "immediate and heavy financial needs" (medical care, college tuition, the
purchase of a principal residence, or to prevent the foreclosure on a principal
residence), as long as the funds are not available for such needs from other
sources. No withdrawals can be made
6
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
against the earnings on the participant contributions or against any Company
contributions and related earnings. These restrictions no longer apply when the
participant reaches age 59 1/2.
Upon request, distributions shall be made no earlier than the month that follows
the last day of the month in which entitlement occurs. Distributions from the
common stock accounts shall be made in cash unless otherwise designated by the
participant.
PARTICIPANT LOANS
Loans for "immediate and heavy financial needs" may be made for a minimum of
$1,000 up to a maximum of $50,000, not to exceed 50% of the participant's
contribution balance and related earnings plus 50% of the vested portion of the
Company contribution balance and related earnings. Loans are subject to rules
and regulations established by the Committee, as defined by the Plan.
VESTING
The Company contribution and related earnings (losses) vest to participants
depending upon the number of years of vesting service, as defined, completed by
such participant as follows:
PERCENTAGE
YEARS OF SERVICE VESTED
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Less than 1 year 0%
1 but less than 2 years 20%
2 but less than 3 years 40%
3 but less than 4 years 60%
4 but less than 5 years 80%
5 or more years 100%
Participants are 100% vested in Company contributions and the allocated portion
of related earnings (losses) upon their attainment of age 65, and are always
100% vested in participant contributions and the related earnings (losses) on
such contributions.
7
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
The amounts forfeited by participants who terminate employment prior to becoming
fully vested are first used to reduce employer contributions. Any excess amounts
are then used to pay Trustee fees and other administrative expenses of the Plan
and Trust.
ADMINISTRATION OF THE PLAN
The Plan is administered by the Committee, consisting of at least three persons
who are appointed by the Board. The members of the Committee serve at the
discretion of the Board, and any Committee member who is an employee of the
Company shall not receive compensation for their services.
The expenses incurred by the Trustee in the performance of its duties, including
the Trustee's compensation and the services of the recordkeeper, shall be paid
by the Plan unless paid by the Company. All other expenses are paid by the
Company.
AMENDMENT OR TERMINATION OF THE PLAN
The Company may amend the Plan at any time. However, no amendment, unless made
to secure approval of the Internal Revenue Service (IRS) or other governmental
agency, may operate retroactively to reduce or divest the then vested interest
in the Plan of any participant, former participant or beneficiary, or to reduce
or divest any benefit payable under the Plan unless all participants, former
participants, and beneficiaries then having vested interests or benefit payments
affected thereby consent to such amendment.
The Company may terminate the Plan at any time, subject to the provisions of
ERISA. Upon complete or partial termination, the accounts of all participants
affected thereby shall become 100% vested, and the Committee shall direct the
Trustee to distribute the assets in the Trust, after receipt of any required
approval by the IRS and payment of any expenses properly chargeable thereto, to
participants, former participants, and beneficiaries in proportion to their
respective account balances.
8
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis of
accounting. Benefits paid to participants are recorded when paid.
VALUATION OF INVESTMENTS
Investments in the Trinity Master Trust are valued at fair value. Investments in
registered investment companies are valued at published market prices which
represent the net asset value of shares held by the Plan at year-end.
Investments in common stock are stated at fair value based on quoted market
prices.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Realized gains and losses from security transactions are
reported using average cost.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts in the financial statements and accompanying notes.
Actual results could differ from these estimates.
3. TRINITY MASTER TRUST
At December 31, 2002 and 2001, the Plan's interest in the net assets of the
Trinity Master Trust was approximately 90.3% and 90.7%, respectively. Investment
income (loss) and administrative expenses relating to the Trinity Master Trust
are allocated to the Plan based upon average monthly balances invested by the
Plan.
9
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
3. TRINITY MASTER TRUST (CONTINUED)
Investments held in the Trinity Master Trust as of December 31 are as follows:
2002 2001
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Interest-bearing cash $ 43,072,645 $ 48,854,152
Common stock* 11,145,281 17,702,240
Registered investment companies 54,026,745 66,761,713
Participant loans 5,458,798 6,467,740
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Total $113,703,469 $139,785,845
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* Includes $11,145,281 and $17,692,433 of Company common stock as of December
31, 2002 and 2001, respectively.
Investment income (loss) in the Trinity Master Trust for the year ended December
31, 2002, is as follows:
Net depreciation in fair value of investments:
Common stock $ (5,036,648)
Registered investment companies (16,882,569)
Interest and dividend income 1,501,096
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Net investment loss $(20,418,121)
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The Plan provides for investments in various investment securities, which in
general, are exposed to various risks, such as interest rates, credit and
overall market volatility risks. Further, due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect the amounts reported in the statements
of net assets available for benefits.
10
Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates as
Restated Effective April 1, 1999
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the IRS dated February 22,
2001, stating that the Plan is qualified under Section 401(a) of the Internal
Revenue Code (the Code) and, therefore, the related trust is exempt from
taxation. Once qualified, the Plan is required to operate in conformity with the
Code to maintain its qualification. The plan administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is
tax-exempt.
5. SUBSEQUENT EVENT
In March 2003, the Board approved and remitted to the Trinity Master Trust, the
Company match contribution in the amount of $3,157,467 relating to the 2002 Plan
year.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Annual Report to be signed by the undersigned thereunto duly
authorized.
Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain
Affiliates as Restated Effective April 1, 1999
/s/ Timothy R. Wallace
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Timothy R. Wallace
Member, Profit Sharing Committee
/s/ John L. Adams
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John L. Adams
Member, Profit Sharing Committee
/s/ Andrea F. Cowan
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Andrea F. Cowan
Member, Profit Sharing Committee
12
INDEX TO EXHIBITS
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
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23 Consent of Ernst & Young LLP 14
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