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Section 1: 8-K (FORM 8-K)


UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):
October 17, 2018


Trinity Industries, Inc.
 

(Exact name of registrant as specified in its charter)

Delaware
1-6903
75-0225040
(State or other jurisdiction of incorporation)
(Commission File No.)
(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

Not Applicable
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



Item 8.01          Other Events.

Mailing of Arcosa Information Statement to Trinity Shareholders

Arcosa, Inc. (“Arcosa”) previously filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form 10, initially filed on May 15, 2018 (as amended, the “Registration Statement”), relating to the separation of Arcosa from Trinity Industries, Inc. (“Trinity”) by means of a spin-off.  On October 1, 2018, the Registration Statement was declared effective by the SEC.  The Registration Statement includes an information statement that describes the separation and distribution, and provides important information regarding Arcosa’s business and management.

The final information statement, dated October 17, 2018 (the “Information Statement”), is attached hereto as Exhibit 99.1. On October 17, 2018, Trinity began mailing to its shareholders a copy of the Information Statement.

As further described in the Information Statement, Trinity expects to distribute to Trinity stockholders one share of Arcosa common stock for every three shares of Trinity common stock they own as of 5:00 p.m. local New York City time on October 17, 2018, the record date for the distribution.  The distribution is expected to be effective at 12:01 a.m. local New York City time on November 1, 2018. Completion of the distribution is conditioned upon the satisfaction or waiver of certain conditions as set forth in the Separation and Distribution Agreement previously filed with the SEC. Arcosa common stock is expected to begin trading “regular way” on the New York Stock Exchange under the ticker symbol “ACA” on November 1, 2018, the first trading day following the distribution.

Item 9.01          Financial Statements and Exhibits.

Exhibit No.
Description
Information Statement of Arcosa, Inc., dated October 17, 2018
 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Trinity Industries, Inc.
   
 October 18, 2018
By:
 /s/ James E. Perry
   
Name:
James E. Perry
   
Title:
Senior Vice President and Chief Financial Officer


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

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Exhibit 99.1


Dear Trinity Industries Stockholder:

In December 2017, we announced our plan to separate Trinity Industries, Inc. into two standalone, publicly traded companies through the spin-off of our infrastructure-related businesses to our stockholders. Upon completion of the spin-off, Trinity will continue to operate our integrated rail manufacturing, leasing, and services businesses, together with certain other businesses. The new company distributed to Trinity stockholders in the spin-off, Arcosa, Inc. (“Arcosa”), will be a growth-oriented company focused on infrastructure-related products and services with leading positions in construction, energy, and transportation markets.

Trinity believes that both the long-term potential and overall valuation of its businesses will be enhanced as a result of separating its current portfolio into two independent companies. We believe Trinity and Arcosa will each enhance their competitive positions as standalone companies focused on their respective industries. Arcosa will also be positioned to grow revenue and profitability, and will have the balance sheet strength and capital allocation flexibility to pursue acquisitions, and to capitalize on the large and growing market opportunity in infrastructure spending. Trinity is positioned to generate stable cash flows and earnings growth opportunities throughout rail transportation business cycles, giving the company an ability to pursue an optimized capital structure, efficiently allocate capital and effectively leverage its multiple rail platforms.

The spin-off will be effected through a pro rata distribution of all of the outstanding shares of Arcosa common stock to holders of Trinity common stock in a transaction that is intended to be tax-free to holders of Trinity common stock for United States federal income tax purposes (other than with respect to any cash received in lieu of fractional shares). Each Trinity stockholder will receive one share of Arcosa common stock for every three shares of Trinity common stock held on October 17, 2018, the record date for the distribution. Stockholder approval of the distribution is not required and you do not need to take any action to receive the shares of Arcosa common stock to which you are entitled as a Trinity stockholder. In addition, you do not need to pay any consideration or surrender or exchange your Trinity common stock in order to receive shares of Arcosa common stock.

I encourage you to read the attached information statement, which is being provided to all holders of Trinity common stock as of October 17, 2018. The information statement describes the separation and distribution in detail and contains important business and financial information about Arcosa.

Sincerely,

Timothy R. Wallace
Chairman, Chief Executive Officer, and President
Trinity Industries, Inc.
 

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Dear Future Arcosa Stockholder:

I am delighted to welcome you as a future stockholder of our company, Arcosa, Inc., which will soon begin operating independently as a growth-oriented company focused on infrastructure-related products and services.

Our businesses have well-established positions in the construction, energy, and transportation markets that are critical to global infrastructure needs. Following the spin-off, both Arcosa and Trinity will be positioned to focus attention on a distinct investment thesis, enabling investors to more clearly evaluate the inherent value of each company’s portfolio of businesses and invest accordingly.

I would like to briefly discuss four themes that I believe will help Arcosa thrive as an independent public company. You will read about these themes in more depth throughout the attached information statement, and I look forward to sharing more about them in the upcoming months:

Strong platform of leading businesses with established reputations: Arcosa will be a new publicly traded company, but our individual businesses have built reputations for quality, service, and operational excellence over decades. Our company name may have changed, but customers will still recognize us as key partners that provide products and services integral to their success. Arcosa also inherits Trinity’s deep culture of operational flexibility that will enable the company to quickly respond to changes in market demand.
Well-positioned to benefit from North American economic growth and infrastructure spending: With our current platform of businesses and additional growth opportunities, we believe we are well-aligned with key market trends, such as the replacement and growth of aging transportation and energy infrastructure, the continued shift to renewable power generation, and the expansion of downstream energy infrastructure.
Focused on growth, both through organic capital investments and acquisitions: We intend to pursue a strategy that combines organic growth and disciplined acquisitions to capitalize on the fragmented nature of many of the industries in which we operate. At the same time, we believe that Arcosa’s products have great potential internationally. We intend to use our long-standing experience in Mexico as a platform to pursue those opportunities.
Proven leadership team: Arcosa’s management team brings significant expertise to our new company. I have worked with most of our management team in the past, and I know what they are capable of delivering. After 16 years with Trinity, I had the opportunity to become CEO of a global, publicly-traded enterprise, which provided me with additional skill-sets that will prove invaluable in this new stage of Arcosa’s development. Running a global, decentralized company also provided me the foundation for developing the operating model that I plan to implement at our new company. Arcosa is expected to be a lean organization, decentralized in its decision making process, and supported with a strong compliance system. Arcosa will be an agile company focused on growth and creating an exciting work environment for our team members.

Arcosa will be a company dedicated to delivering value to our many stakeholders, including our stockholders, our customers and suppliers, the communities in which we operate, and our team members throughout the organization. We are very proud of our historical roots as part of Trinity Industries, and are equally honored to be part of the exciting future we see ahead of us as a standalone public company.

We have been given an opportunity to create a new public company with a strong heritage of success. Our prospects are very bright, and we look forward to enhancing stockholder value.

Sincerely,
 
   
 
Antonio Carrillo
 
President and Chief Executive Officer
 
Arcosa, Inc.
 

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INFORMATION STATEMENT

ARCOSA, INC.

Common Stock
(par value $0.01 per share)

This information statement is being furnished in connection with the distribution by Trinity Industries, Inc. (“Trinity”) to its stockholders of the outstanding shares of common stock of Arcosa, Inc. (“Arcosa” or the “Company”), a wholly-owned subsidiary of Trinity. Arcosa will hold directly and/or indirectly assets and liabilities associated with Trinity’s infrastructure-related businesses, including Trinity’s inland barge, transportation-related steel components, construction products, and energy equipment businesses as more fully described in this information statement. Trinity will distribute 100 percent of the outstanding shares of Arcosa common stock on a pro rata basis to existing stockholders of Trinity.

For every three shares of Trinity common stock held of record by you as of 5:00 p.m. local New York City time on October 17, 2018, the record date for the distribution, you will receive one share of Arcosa common stock. You will receive cash in lieu of any fractional shares which you would have received after application of the above ratio. We expect our common stock will be distributed by Trinity to you on or about November 1, 2018, the distribution date. As discussed under “The Separation and Distribution—Trading Between the Record Date and the Distribution Date,” if you sell your shares of Trinity common stock in the “regular-way” market after the record date and before the distribution date, you also will be selling your right to receive shares of Arcosa common stock in connection with the spin-off.

We are not asking you for a proxy and you are not requested to send Trinity a proxy. No vote of Trinity’s stockholders is required in connection with the distribution. You will not be required to pay any consideration or to exchange or surrender your existing shares of Trinity or take any other action to receive the shares of Arcosa on the distribution date to which you are entitled.

We intend for the distribution to be tax-free to our stockholders (other than with respect to any cash received in lieu of fractional shares) for United States federal income tax purposes. You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability of any state, local, and foreign tax laws.

There is no current trading market for our common stock, although we expect that a limited market, commonly known as a “when-issued” trading market will develop on or shortly before the record date for the distribution, and we expect “regular-way” trading of our common stock to begin on the first trading day following the completion of the distribution. We intend to apply to list our common stock on The New York Stock Exchange (“NYSE”) under the symbol “ACA”.

In reviewing the information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 18.

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement is first being mailed to Trinity stockholders on or about October 17, 2018.

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PRESENTATION OF INFORMATION

Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement, including the Audited Annual Combined Financial Statements and Unaudited Interim Combined Financial Statements of Arcosa, which are comprised of the assets and liabilities of Trinity’s infrastructure-related businesses, assumes the completion of all the transactions referred to in this information statement in connection with the separation and distribution (together, the “spin-off”).

Unless the context otherwise requires, references in this information statement to “Arcosa, Inc.,” “Arcosa,” “Company,” “we,” “us,” “our” and “our company” refer to Arcosa, Inc. and its combined subsidiaries. References in this information statement to “Trinity” refer to Trinity Industries, Inc. and its combined subsidiaries (other than Arcosa and its combined subsidiaries), unless the context otherwise requires or as otherwise specified herein.

This information statement is being furnished solely to provide information to Trinity stockholders who will receive shares of Arcosa common stock in the distribution. It is not and is not to be construed as an inducement or encouragement to buy or sell any of Arcosa’s securities or any securities of Trinity. This information statement describes Arcosa’s business, Arcosa’s relationship with Trinity and how the spin-off affects Trinity and its stockholders and provides other information to assist you in evaluating the benefits and risks of holding or disposing of Arcosa common stock that you will receive in the distribution. You should be aware of certain risks relating to the spin-off, Arcosa’s business and ownership of Arcosa common stock, which are described under the section entitled “Risk Factors”.

TRADEMARKS AND TRADE NAMES

We own or have rights to use the trademarks and trade names that we use in conjunction with the operation of our business. Solely for convenience, we only use the TM or ® symbols the first time any trademark or trade name is mentioned. Such references are not intended to indicate in any way that we will not assert, to the fullest extent permitted under applicable law, our rights to our trademarks and trade names.

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INFORMATION STATEMENT SUMMARY

This summary highlights some of the information in this information statement relating to Arcosa, our separation from Trinity and the distribution of our common stock by Trinity to its stockholders. For a more complete understanding of our business and the separation and distribution, you should read carefully the more detailed information set forth under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “The Separation and Distribution” and the other information included in this information statement.

Arcosa, Inc.

Arcosa is focused on infrastructure-related products and services and is currently owned by Trinity, a diversified industrial company. Arcosa is comprised primarily of businesses from Trinity’s Construction Products Group, Energy Equipment Group, and Inland Barge Group. In December 2017, Trinity announced the spin-off of Arcosa into a separate, publicly-traded company. Arcosa will have leading positions in construction, energy, and transportation markets. Arcosa will be a growth-oriented company with the balance sheet strength and capital allocation flexibility to pursue growth through disciplined acquisitions and to capitalize on the large and growing market opportunity in infrastructure spending.

Reasons for the Spin-Off

The Trinity Board of Directors believes that separating the Arcosa business from the remainder of Trinity is in the best interests of Trinity and its stockholders for a number of reasons, including:

Enhances Overall Growth Potential through Focused Companies—Trinity believes that both the long-term growth potential and overall valuation of its businesses will be enhanced as a result of separating its current portfolio of business into two independent companies. Trinity believes Trinity and Arcosa will each enhance their competitive positions as standalone companies focused on their respective industries.
Enables Each Company to Optimize Balance Sheet and Capital Allocation Priorities—Each company plans to pursue distinct investment decisions with capital structures based on their needs and potential opportunities, and will be able to create value by allocating capital to the alternatives that achieve the best returns for their respective stockholders.
Allows Businesses to Advance Differentiated Investment Theses—Each company will be positioned to focus attention on independent and unique investment theses. Each company will be tied to different demand drivers, which will allow investors to model each company independently, evaluate the inherent value of each company, and invest accordingly.

Trinity’s Board of Directors also considered potentially negative factors in evaluating the spin-off, including risks relating to the creation of a new public company, possible increased administrative costs and one-time separation costs, but concluded that the potential benefits of the spin-off outweighed these factors. The anticipated benefits of the spin-off are based on a number of assumptions, and there can be no assurance that such benefits will materialize to the extent anticipated, or at all. In the event the spin-off does not result in such benefits, the costs associated with the spin-off could have an adverse effect on each company individually and in the aggregate. For more information, see the sections entitled “The Separation and Distribution—Reasons for the Spin-Off” and “Risk Factors” included elsewhere in this information statement.

Business Overview

Arcosa is a growth-oriented manufacturer and producer of infrastructure-related products with revenues and operating profit of $1.5 billion and $132 million, respectively, for the fiscal year ended December 31, 2017. We provide critical products for a broad spectrum of markets throughout construction, energy, and transportation. We own businesses with well-established positions in attractive markets with favorable long-term demand drivers, which should provide us with compelling organic and acquisition opportunities.

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We will operate in and report financial results for three segments: Construction Products, Energy Equipment, and Transportation Products.

($ in millions)



2017 Revenues
$259
$844
$363
 
 
 
 
2017 Operating       profit
$54
$78
$39
 
 
 
 
Primary products
• Natural aggregates
  (sand and gravel)
• Lightweight aggregates
• Trench shields and
  shoring products
• Wind towers
• Utility structures
• Pressurized and non-
  pressurized storage and
  distribution containers
• Inland barges
• Fiberglass covers and
  other barge components
• Axles and couplers
• Industrial and mining   components
Primary markets served
• Residential,
  commercial, industrial
  construction
• Road and bridge
  construction
• Underground
  construction
• Wind power generation
• Power transmission and
  distribution
• Gas and liquids storage
  and distribution in the
  energy, agriculture, and
  industrial markets
• Transportation products
  serving numerous
  markets, including:
  - Agriculture/food
     products
  - Refined products
  - Chemicals
  - Upstream oil
Number of operating facilities
20
15
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Our Competitive Strengths

Strong market positions with established reputations for quality and service. We own numerous businesses that are market leaders in their respective product categories or geographic areas. Our businesses have long-standing relationships with customers that have been built by delivering quality products, on-time performance, and excellent customer service.

For example, in our Transportation Products Group, our McConway & Torley foundry business has been serving customers in the transportation industry since 1868, and our inland barge business traces its history back more than 70 years. In our Energy Equipment Group, Trinity Meyer Utility Structures was a pioneer in the steel transmission pole industry, and our TATSA® brand in Mexico has been operating in the storage and distribution containers business since 1955. In our Construction Products Group, our construction aggregates business has operated in Texas for more than 25 years, and our GME® brand was an industry pioneer in the trench shoring industry in the 1960s.

Well-positioned to benefit from North American economic growth and infrastructure spending. We believe we are well-positioned to benefit from economic growth and infrastructure spending in North America. Primary drivers of this growth are expected to include:

Continued strength in overall industrial production — According to data released by the Board of Governors of the Federal Reserve System (the “Federal Reserve”), United States industrial production demonstrated year-over-year growth in every month from March 2017 to March 2018.
Replacement and growth of aging infrastructure — The American Society of Civil Engineers (“ASCE”) estimates that a total investment of $4.6 trillion is needed from 2016 to 2025 in order to improve United States infrastructure to an adequate state. The ASCE also estimates that funding has already been provided for approximately $2.5 trillion of the required investment.
Replacement and growth of aging energy infrastructure — The age of the United States electrical grid requires significant upgrades and expansion. In a November 2014 study, the United States Department of Energy reported that 70 percent of the grid’s transmission lines and power transformers are over 25 years old, and the average age of power plants is over 30 years old. The ASCE estimates that $934 billion of the $2.5 trillion investment noted above is required to improve the electricity infrastructure in the United States.

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Continued shift to renewable power generation, with associated transmission projects — In a continued transformation of the United States electrical grid, the United States Energy Information Administration (“EIA”) estimates that approximately 110 gigawatts of utility-scale renewable electricity generation capacity, mostly wind and solar power, will be added in the United States from 2018 to 2030, representing 56 percent of all new power sector electricity generation capacity estimated to be brought online.
Expansion of United States petrochemical industry — According to the American Chemistry Council, more than 300 announced chemical industry investment projects worth more than $185 billion will come online in the United States over the next decade, supported by low cost feedstocks. In 2016, the chemical industry accounted for nearly half of construction spending in United States manufacturing.

Proven ability to operate efficiently in cyclical markets. A number of our businesses operate in cyclical markets where scale, flexibility, low-cost manufacturing, and operating experience are keys to success. Our business leaders have significant experience generating attractive through-the-cycle financial returns in markets with strong long-term fundamentals. Given our history operating in cyclical markets, our company has developed a capable and flexible manufacturing culture allowing us to capture additional opportunities to enhance financial returns.

Since the second-half of 2015, our Transportation Products Group has been in a cyclical low period due to weak demand conditions and an oversupply of inland barges and freight and tank railcars in North America. However, we believe we are well-positioned to benefit from a market recovery when demand for new inland barge construction and transportation-related steel components recovers, the potential early signs of which we are now experiencing.

We expect to be able to compete in different markets by maintaining a lean, dynamic, and decentralized organization. Additionally, steel is a primary raw material in many of our products, and our scale and purchasing expertise improves our ability to serve customers.

Attractive path to grow through strategic acquisitions. Arcosa should have an attractive path to grow through strategic acquisitions. We operate in a number of fragmented or niche industries that present compelling growth opportunities. Following the spin-off from Trinity, we expect to continue seeking acquisitions to accelerate our market penetration and expand our manufacturing capacity and capability. Our efforts will be focused on infrastructure opportunities, both domestic and abroad, and we will no longer be competing for capital with Trinity’s rail-related businesses.

Recent examples of our growth include operating asset acquisitions and land reserve purchases in our construction aggregates business, where we have built a strong platform in lightweight aggregates nationwide and natural aggregates in Texas and Louisiana. Additionally, we have expanded in the trench shoring businesses through acquisitions.

Our team has expertise integrating acquisitions, which will facilitate the continued execution of our growth strategy, helping to reduce integration risks.

Balance sheet flexibility to pursue growth organically and through acquisitions. Arcosa will have the balance sheet strength to pursue both disciplined acquisitions and organic growth. We anticipate having sufficient cash on hand, committed credit availability and debt capacity to pursue sizeable acquisitions. Arcosa is expected to generate healthy operating cash flow that will also be available to invest in corporate development and organic initiatives.

Opportunities to leverage extensive platform in Mexico. We have been operating in Mexico for over 60 years, and we intend to use our extensive platform to find international expansion opportunities, enabling us to grow our established market positions by leveraging our competitive strengths. Our management team has the experience and ability to evaluate and execute on both organic and acquisition opportunities.

Experienced leadership team with track record of growth. Our leadership team has extensive industry experience and a successful track record of operational excellence, including delivery of attractive financial returns through the cycle. We will be focused on growth opportunities, driving operating efficiencies, and return on invested capital (“ROIC”). Antonio Carrillo, our Chief Executive Officer, has executed transformational acquisitions and ROIC improvement in his former role as chief executive officer of Mexichem S.A.B. de C.V., a publicly traded global specialty chemical company. Under his leadership, our operating leaders will continue to have a strong ROIC focus.

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Our Business Strategy

Capitalize on favorable market conditions and market recoveries. The United States continues to experience economic growth, including an expansion in industrial production, which grew 1.6 percent in 2017 and averaged 3.9 percent year-over-year growth in the first quarter of 2018. Our businesses are well-positioned to take advantage of broad-based demand from the increase in industrial activity across North America.

The businesses in our Construction Products Group should benefit from multiple activities in the United States to replace its aging infrastructure. Additionally, the core Texas markets served by our natural aggregates operations continue to show strength and positive long-term demographics that support continued infrastructure investment.

In our Energy Equipment Group, the replacement of an aging power transmission infrastructure should provide growth opportunities for our utility structures business. This group will also benefit from growth in renewable power generation, which should require additional wind tower installations and transmission projects to connect to centers of demand. Additionally, we anticipate that growth in Mexico’s energy infrastructure should create opportunities to serve terminals that import and distribute petrochemicals and other liquids.

Since 2015, the markets served by our Transportation Products Group have been in a cyclical downturn due to weak demand conditions and an oversupply of inland barges and railcars in North America. This resulted in revenues for this group contracting from $978 million in 2015 to $363 million in 2017. While we do not expect an immediate recovery, we have continued to maintain profitability despite the steep drop in demand. As such, we believe we are well-positioned to benefit over the next several years as demand for our products in this segment recovers, the potentially early signs of which we are now experiencing.

Maintain dedicated customer focus. We believe that maintaining a close partnership with our customers allows us to effectively focus our efforts and respond to their changing demands at a global, regional, and local level. Our customers operate in dynamic environments, and we continually partner with them to improve our products and services.

Leverage operational excellence expertise to achieve low-cost production and safe, sustainable operations. Our experienced leadership team has a track record of operational excellence and delivering attractive financial returns through the cycle. Our corporate support functions will be designed to maintain robust levels of safety, quality, and compliance, while promoting a lean, decentralized operating model. We are focused on reducing our selling, engineering, and administrative (“SE&A”) costs through process redesign and other cost reduction measures.

Drive growth through disciplined acquisitions and organic investments. Arcosa is expected to possess the balance sheet strength and capital allocation flexibility to pursue organic growth, as well as strategic acquisitions. We intend to pursue a disciplined growth strategy in our core infrastructure markets, capitalizing on the fragmented nature of many of the industries in which we operate. Additionally, by leveraging the central location of our operations in Mexico, we should be able to expand our footprint and product lines into other international geographies and markets. Consistent with our stated strategy to pursue acquisitions, Arcosa currently has a pipeline of potential acquisitions that it is evaluating in its current construction, energy, and transportation markets as well as other potential strategic opportunities which are in various stages of development, some or all of which may or may not result in a transaction.

Continually assess our portfolio to allocate capital towards the best opportunities. Following the spin-off, Arcosa will be positioned to focus attention on its distinct investment thesis. We will utilize a robust process to effectively identify and execute on organic and acquisition growth opportunities, and our organization will be structured so it can quickly and efficiently integrate new acquisitions.

Our Segments

Construction Products Group

Markets

Our Construction Products Group participates in multiple areas of construction infrastructure. Our products are used across the construction landscape, including commercial, industrial, road and bridge, and underground construction. As the United States continues to replace its aging infrastructure, our businesses are well-positioned to benefit from this activity.

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Products, Customers and Competitors

We are a well-known producer and distributor of lightweight and natural construction aggregates in certain regions of the United States serving both public infrastructure and private construction markets. Lightweight aggregates, produced and distributed by us nationwide, are select shales and clay that are expanded and hardened by high temperatures in a rotary kiln and possess a bulk density that can be less than half that of natural aggregates. Product applications include structural lightweight concrete, lightweight masonry block, and asphalt surface treatments. Our natural aggregates are produced in Texas and Louisiana and include sand, gravel, crushed limestone base, and various other products for use typically in ready mixed concrete, concrete pipe, and road construction. 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 hold a strong market position in the manufacture of trench shields and shoring products for the United States construction industry. Trench shields and shoring products are used for water and sewer construction, utility installations, manhole work, oil and gas pipeline construction, and other underground applications. Our customers are equipment rental dealers and commercial, residential, and industrial contractors. We compete with manufacturers nationwide. We additionally participate in certain regional rental markets for trench shoring equipment.

Energy Equipment Group

Markets

Our Energy Equipment Group serves a broad spectrum of energy markets, including wind power generation, power transmission and distribution, and the storage and transportation of gas and liquid products for use in the energy, agricultural, and industrial markets.

As the United States and Mexico expand their renewable energy power generation, we believe we are well-positioned to benefit from future wind power installations as well as from the associated transmission projects to connect to centers of demand. Wind energy is an important part of Mexico’s strategy of focusing on renewable energy to complement its current generation portfolio. Furthermore, we believe we are well-positioned to benefit from transmission projects in the United States and Mexico as public and private utilities seek to replace aging transmission infrastructure and improve the reliability of the electrical grid.

Additionally, our storage and distribution containers support oil, gas, and chemical markets 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 agricultural markets, including bulk storage, farm storage, and the application and distribution of anhydrous ammonia.

Products, Customers and Competitors

We are one of the foremost manufacturers of structural wind towers in the United States and Mexico. Our primary customers are wind turbine producers and we compete with both domestic and foreign producers of towers.

We are a well-established manufacturer in the United States and Mexico of steel utility structures for electricity transmission and distribution. Through our recognized brands, we have developed strong relationships with our primary customers, public and private utilities. We compete with both domestic and foreign manufacturers.

Arcosa is one of the primary manufacturers in North America of pressurized and non-pressurized storage and distribution containers that store and transport a wide variety of products, including propane, anhydrous ammonia, and natural gas liquids. We manufacture cryogenic storage and transport containers and manufacture oil and gas processing and storage equipment used at well sites and in midstream locations.

We are a principal producer of pressure vessels in Mexico, where we have operated for over 60 years. We believe the Company is very well-positioned in Mexico to capitalize on opportunities associated with the country’s energy reform as well as the large need for terminals in Mexico to import and distribute petrochemicals and other liquids.

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Transportation Products Group

Markets

Our Transportation Products Group consists of established companies that supply manufactured steel products to the transportation industry. These transportation products serve a wide variety of markets, including the transportation of commodities such as grain, coal, aggregates, chemicals, fertilizers, petrochemicals, and refined products.

Products, Customers and Competitors

We have a leading position in the United States market for the manufacture of inland barges and fiberglass barge covers. We manufacture a variety of hopper barges, tank barges, and fiberglass covers, and we provide a full line of deck hardware to the marine industry, including hatches, castings and winches for towboats and dock facilities. Our customers are primarily commercial marine transportation companies and industrial shippers. We compete with a number of other manufacturers in the United States.

Arcosa is also a recognized manufacturer of steel components for railcars and other transportation equipment. We manufacture axles, circular forgings and coupling devices for freight, tank, locomotive and passenger rail transportation equipment, as well as other industrial uses, and also provide cast components for use in the industrial and mining sectors. Our customers are primarily freight and passenger railcar manufacturers, rail maintenance and repair facilities, railroads, steel mills, and mining equipment manufacturers. We compete with both domestic and foreign manufacturers.

Our Principal Office

Our principal executive offices are currently located at 2525 N. Stemmons Freeway, Dallas, Texas 75207-2401, and our telephone number is currently 214-631-4420. We maintain a website at www.arcosa.com. The information contained on our website or that can be accessed through our website neither constitutes part of this information statement nor is incorporated by reference herein.

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QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION

What is Arcosa and why is Trinity separating Arcosa’s business and distributing Arcosa stock?
Arcosa currently is a wholly-owned subsidiary of Trinity that was formed to hold Trinity’s infrastructure-related businesses. The separation of Arcosa from Trinity and the distribution of Arcosa common stock are intended to provide you with equity investments in two separate companies, each of which will be able to focus on their respective businesses. Trinity and Arcosa believe that the spin-off will result in enhanced long-term performance of each business for the reasons discussed in the section entitled “The Separation and Distribution—Reasons for the Spin-Off”.
 
 
 
Why am I receiving this document?
Trinity is delivering this document to you because you are a holder of Trinity common stock. If you are a holder of Trinity common stock as of 5:00 p.m. local New York City time on October 17, 2018, the record date for the distribution, you will be entitled to receive one share of Arcosa common stock for every three shares of Trinity common stock that you hold at such time. This document will help you understand how the separation and distribution will affect your investment in Trinity and your investment in Arcosa after the spin-off.
 
 
 
How will the spin-off of Arcosa from Trinity work?
The spin-off will be accomplished through a series of transactions in which (i) the equity interests of the entities that hold assets and liabilities of Trinity’s infrastructure-related businesses described herein will be transferred to Arcosa, (ii) other assets and liabilities will be assigned to or assumed by Arcosa, and (iii) Trinity will then distribute all of the outstanding shares of common stock of Arcosa to Trinity’s stockholders on a pro rata basis as a distribution.
 
 
 
Why is the spin-off of Arcosa structured as a distribution?
Trinity believes that a distribution of Arcosa shares to Trinity stockholders, which Trinity intends to be tax-free for United States federal income tax purposes, is an efficient way to separate its infrastructure-related businesses in a manner that is expected to create long-term benefits and value for Trinity, Arcosa and their respective stockholders.
 
 
 
What is the record date for the distribution?
The record date for the distribution is 5:00 p.m. local New York City time on October 17, 2018.
 
 
 
When will the distribution occur?
It is expected that all of the shares of Arcosa common stock will be distributed by Trinity on or about November 1, 2018, to holders of record of Trinity common stock as of 5:00 p.m. local New York City time on October 17, 2018, the record date. However, no assurance can be provided as to the timing of the distribution or that all conditions to the distribution will be met.
 
 
 
Is a stockholder vote required to approve the distribution?
No stockholder vote is required to approve the distribution.
 
 
 
What do stockholders need to do to participate in the distribution?
Stockholders of Trinity entitled to receive shares in the distribution will not be required to take any action to receive Arcosa common stock in the distribution, but you are urged to read this entire information statement carefully. No stockholder approval of the distribution is required. You are not being asked for a proxy. You do not need to pay any consideration,

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exchange or surrender your existing Trinity common stock or take any other action to receive your shares of Arcosa common stock. Please do not send in your Trinity stock certificates.
 
 
 
Will I receive physical certificates representing shares of Arcosa common stock following the spin-off?
No. Following the spin-off, Arcosa will not issue physical certificates representing shares of Arcosa common stock. If you own Trinity common stock as of 5:00 p.m. local New York City time on October 17, 2018, the record date, Trinity, with the assistance of American Stock Transfer & Trust Company, the distribution agent, will electronically distribute shares of Arcosa common stock to you or to your brokerage firm on your behalf by way of direct registration form. “Direct registration form” refers to a method of recording share ownership when no physical share certificates are issued to stockholders, as is the case in this distribution. The distribution agent or the transfer agent will mail you a book-entry account statement that reflects your shares of Arcosa common stock, or your bank or brokerage firm will credit your account for the shares.
 
 
 
 
Following the distribution, stockholders whose shares are held in book-entry form may request that their shares of Arcosa common stock held in book-entry form be transferred to a brokerage or other account at any time.
 
 
 
How many shares of Arcosa common stock will I receive in the distribution?
Trinity will distribute to you one share of Arcosa common stock for every three shares of Trinity common stock held by you as of 5:00 p.m. local New York City time on the record date. Based on approximately 146.5 million shares of Trinity common stock outstanding as of September 24, 2018, a total of approximately 48.8 million shares of Arcosa common stock will be distributed. For additional information on the distribution, see the section entitled “The Separation and Distribution”.
 
 
 
Will Arcosa issue fractional shares of its common stock in the distribution?
No. Arcosa will not issue fractional shares of its common stock in the distribution. Fractional shares that Trinity stockholders would otherwise have been entitled to receive will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed pro rata (based on the fractional share such holder would otherwise be entitled to receive) to those stockholders who would otherwise have been entitled to receive fractional shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares. The receipt of cash in lieu of fractional shares generally will be taxable to the recipient stockholders for United States federal income tax purposes as described in the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.
 
 
 
What are the conditions to the distribution?
The distribution of our common stock by Trinity is subject to the satisfaction of the following conditions:
 
 
 
 
The SEC will have declared effective the registration statement of which this information statement forms a part, and no stop order relating to the registration statement will be in effect.

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The NYSE, or a comparable public market, will have approved the listing of Arcosa common stock, subject to official notice of issuance.
 
 
 
 
Trinity will have received a private letter ruling (the “IRS ruling”) from the United States Internal Revenue Service (the “IRS”), substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the United States Internal Revenue Code of 1986, as amended, (the “Code”). Trinity has received the IRS ruling. See the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.
 
 
 
 
Trinity will have received an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity (the “tax opinions”), substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. See the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.
 
 
 
 
All permits, registrations and consents required under the securities or blue sky laws of states or other political subdivisions of the United States or of foreign jurisdictions in connection with the distribution will have been received.
 
 
 
 
No order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions will be in effect.
 
 
 
 
The reorganization of the Trinity and Arcosa businesses prior to the separation and distribution will have been effectuated.
 
 
 
 
No events or developments shall have occurred or exist that, in the sole and absolute judgment of the Trinity Board of Directors, make it inadvisable to effect the distribution or would result in the distribution and related transactions not being in the best interest of Trinity or its stockholders.
 
 
 
 
Trinity and Arcosa cannot assure you that any or all of these conditions will be met, and Trinity may also waive conditions to the distribution. Trinity may decline at any time to go forward with the distribution, whether or not the conditions are satisfied.

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What is the expected date of completion of the spin-off?
The completion and timing of the spin-off are dependent upon a number of conditions. It is expected that the shares of Arcosa common stock will be distributed by Trinity on or about November 1, 2018 to the holders of record of Trinity common stock as of 5:00 p.m. local New York City time on October 17, 2018. However, no assurance can be provided as to the timing of the spin-off or that all conditions to the spin-off will be met.
 
 
 
Can Trinity decide to cancel the distribution of Arcosa common stock even if all the conditions have been met?
Yes. Until the distribution has occurred, Trinity has the unilateral and sole and exclusive right to terminate the distribution for any reason, even if all of the conditions are satisfied. See the section entitled “Risk Factors—Risks Related to Arcosa Common Stock”.
 
 
 
What if I want to sell my Trinity common stock or my Arcosa common stock?
You should consult with your financial advisors, such as your stockbroker, bank or tax advisor.
 
 
 
What is “regular-way” and “ex-distribution” trading?
Beginning on or shortly before the record date and continuing up to and through the distribution date, it is expected that there will be two markets in Trinity common stock: a “regular-way” market and an “ex-distribution” market. Shares of Trinity common stock that trade in the “regular-way” market will trade with an entitlement to shares of Arcosa common stock distributed pursuant to the distribution. Shares that trade in the “ex-distribution” market will trade without an entitlement to shares of Arcosa common stock distributed pursuant to the distribution. Each stockholder trading in Trinity shares would make any decision as to whether to trade one or more of such stockholder’s shares in Trinity in the “regular-way” market or the “ex-distribution” market.
 
 
 
 
If you decide to sell any shares of your Trinity common stock before the distribution date, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your Trinity common stock with or without your entitlement to Arcosa common stock pursuant to the distribution.
 
 
 
Where will I be able to trade shares of Arcosa common stock?
Arcosa intends to apply to list its common stock on the NYSE under the symbol “ACA”. Arcosa expects that trading in shares of its common stock will begin on a “when-issued” basis on or about the record date and will continue up to and through the distribution date and that “regular-way” trading in Arcosa common stock will begin on the first trading day following the distribution date. If trading begins on a “when-issued” basis, you may purchase or sell Arcosa common stock up to and through the distribution date, but your transaction will not settle until after the distribution date. Arcosa cannot predict the trading prices for its common stock before, on or after the distribution date.
 
 
 
What will happen to the listing of Trinity common stock?
Trinity common stock will continue to trade on the NYSE under the symbol “TRN” both before and after the distribution.
 
 
 
Will the number of shares of Trinity common stock that I own change as a result of the distribution?
No. The number of shares of Trinity common stock that you own will not change as a result of the distribution.

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What are the material United States federal income tax consequences of the distribution?
It is a condition to the completion of the distribution that Trinity receives (i) a private letter ruling from the IRS and (ii) an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. Trinity has received the IRS ruling.
 
 
 
 
Accordingly, and so long as the distribution so qualifies, for United States federal income tax purposes, no gain or loss will be recognized by you, and no amount will be included in your income, upon the receipt of shares of Arcosa common stock pursuant to the distribution. You will, however, recognize gain or loss for United States federal income tax purposes with respect to cash received in lieu of a fractional share of Arcosa common stock.
 
 
 
 
For more information regarding the potential United States federal income tax consequences to Arcosa, to Trinity and to you, see the section entitled “Material United States Federal Income Tax Consequences of the Distribution”. You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability of any state, local, and foreign tax laws.
 
 
 
What are the material state, local and foreign income tax consequences of the distribution?
The tax opinions will not address the state, local or foreign income tax consequences of the distribution. You should consult your tax advisor about the particular state, local and foreign tax consequences of the distribution to you, which consequences may differ from those described in the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.
 
 
 
How will I determine my tax basis in the Arcosa shares I receive in the distribution?
Assuming that the distribution is tax-free to Trinity stockholders, your tax basis in your Trinity common stock held by you immediately prior to the distribution will be allocated between your Trinity common stock and Arcosa common stock that you receive in the distribution (including any fractional share interest in Arcosa common stock for which cash is received) in proportion to the relative fair market values of each immediately following the distribution. Trinity will provide its stockholders with information to enable them to compute their tax basis in both Trinity and Arcosa shares. This information will be posted on Trinity’s website following the distribution date. You should consult your tax advisor about how this allocation will work in your situation, including a situation where you have purchased Trinity shares at different times or for different amounts, and regarding any particular consequences of the distribution to you.
 
 
 
 
For a more detailed description, see the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.

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What will Arcosa’s relationship be with Trinity following the spin-off?
Following the completion of the spin-off, Trinity and Arcosa will be independent companies, and the relationship between Arcosa and Trinity will be governed by, among others, a separation and distribution agreement, a transition services agreement, a tax matters agreement, an intellectual property matters agreement and an employee matters agreement. These agreements will provide for the allocation between Arcosa and Trinity of Trinity’s and Arcosa’s assets, employees, liabilities and obligations (including employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Arcosa’s spin-off from Trinity. For additional information regarding these agreements, see the sections entitled “Risk Factors—Risks Related to the Spin-Off” and “Certain Relationships and Related Transactions”.
 
 
 
Will I have appraisal rights in connection with the distribution?
No. Holders of Trinity common stock are not entitled to appraisal rights in connection with the distribution.
 
 
 
Are there risks associated with owning Arcosa common stock?
Yes. Ownership of Arcosa common stock is subject to both general and specific risks relating to Arcosa’s businesses, the industry in which it operates, its ongoing contractual relationships with Trinity, and its status as a separate, publicly-traded company. Ownership of Arcosa common stock is also subject to risks relating to the spin-off, including that following the spin-off, Arcosa’s business will be less diversified than Trinity’s business prior to the spin-off. These risks are described in the “Risk Factors” section of this information statement. You are encouraged to read that section carefully.
 
 
 
Who will manage Arcosa after the spin-off?
Arcosa benefits from having in place a management team with an extensive background in the infrastructure-related business. Led by Antonio Carrillo, Arcosa’s President and Chief Executive Officer, Arcosa’s management team possesses deep knowledge of, and extensive experience in, its industries as well as governance, management, and administration of a publicly traded entity.
 
 
 
 
For more information regarding Arcosa’s named executive officers and other members of its management team, see the section entitled “Management”.
 
 
 
What will Arcosa’s dividend and share repurchase policy be after the spin-off?
Although Arcosa anticipates that it will likely pay quarterly dividends following the distribution, Arcosa has not yet determined the extent to which it will pay dividends on its common stock. The timing, declaration, amount of, and payment of any dividends following the spin-off by Arcosa is within the discretion of its Board of Directors and will depend upon many factors, including Arcosa’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of Arcosa’s planned debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets, and other factors deemed relevant by its Board of Directors. Moreover, if Arcosa determines to pay any dividend in the future, there can be no assurance that it will continue to pay such dividends or the amount of such dividends. In addition, Arcosa expects to be

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authorized to implement a share repurchase program if circumstances warrant. See the section entitled “Dividend Policy”.
 
 
 
Will Arcosa incur any debt prior to or at the time of the distribution?
Information regarding Arcosa’s indebtedness following Arcosa’s spin-off from Trinity will be provided in subsequent amendments to this information statement. See the section entitled “Description of Indebtedness”.
 
 
 
Who will be the distribution agent, transfer agent, and registrar for the Arcosa common stock?
The distribution agent, transfer agent and registrar for Arcosa common stock will be American Stock Transfer & Trust Company. For questions relating to the transfer or mechanics of the stock distribution, you should contact:
 
 
 
 
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Tel: (800) 937-5449
 
 
 
Where can I find more information about Trinity and Arcosa?
If you have any questions relating to Trinity, you should contact:
 
 
 
 
Trinity Industries, Inc.
Investor Relations
2525 N. Stemmons Freeway
Dallas, Texas 75207-2401
Tel: 214-631-4420
 
 
 
 
After the distribution, Arcosa stockholders who have any questions relating to Arcosa should contact Arcosa at:
 
 
 
 
Arcosa, Inc.
Investor Relations
2525 N. Stemmons Freeway
Dallas, Texas 75207-2401
Tel: 214-631-4420

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SUMMARY OF THE SEPARATION AND DISTRIBUTION

Distributing company
Trinity Industries, Inc.
Distributed company
Arcosa, Inc.

We are a Delaware corporation and, prior to the spin-off, a wholly-owned subsidiary of Trinity. After completion of the separation and distribution, we will be an independent, publicly-traded company.

Distribution ratio
Each holder of Trinity common stock will receive one share of Arcosa common stock for every three shares of Trinity common stock held on October 17, 2018, the record date. Cash will be distributed in lieu of fractional shares, as described in the section entitled “The Separation and Distribution—General Treatment of Fractional Shares of Common Stock”.
Distributed securities
Trinity will distribute all of the shares of Arcosa common stock owned by Trinity, which will be 100 percent of Arcosa’s common stock outstanding immediately prior to the distribution. Based on the approximately 146.5 million shares of Trinity common stock outstanding on September 24, 2018, and applying the distribution ratio of one share of Arcosa common stock for every three shares of Trinity common stock, Trinity will distribute approximately 48.8 million shares of Arcosa common stock to Trinity stockholders who hold Trinity common stock as of the record date. The number of shares that Trinity will distribute to its stockholders will be reduced to the extent that cash payments are to be made in lieu of the issuance of fractional shares of Arcosa common stock, as described below.
Record date
The record date is expected to be 5:00 p.m. local New York City time on October 17, 2018.
Distribution date
The distribution date is expected to be on or about November 1, 2018.
Distribution
On the distribution date, Trinity, with the assistance of American Stock Transfer & Trust Company, the distribution agent, will electronically distribute shares of Arcosa common stock to your bank or brokerage firm on your behalf or through the systems of the DTC (if you hold the shares through a bank or brokerage firm that uses DTC) or to you in book-entry form. You will not be required to make any payment or surrender or exchange your shares of Trinity common stock or take any other action to receive your shares of Arcosa on the distribution date. Your bank or brokerage firm will credit your account for the shares of Arcosa common stock or the distribution agent or the transfer agent will mail you a book-entry account statement that reflects your shares of Arcosa.

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Conditions to the Distribution
The distribution of shares of our common stock by Trinity is subject to the satisfaction of the following conditions:
The SEC will have declared effective the registration statement of which this information statement forms a part, and no stop order relating to the registration statement will be in effect.
The NYSE, or a comparable public market, will have approved the listing of Arcosa common stock, subject to official notice of issuance.
Trinity will have received a private letter ruling from the IRS, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. Trinity has received the IRS ruling.
Trinity will have received an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code.
All permits, registrations and consents required under the securities or blue sky laws of states or other political subdivisions of the United States or of foreign jurisdictions in connection with the distribution will have been received.
No order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions will be in effect.
The reorganization of the Trinity and Arcosa businesses prior to the separation and distribution will have been effectuated.
No events or developments shall have occurred or exist that, in the sole and absolute judgment of the Trinity Board of Directors, make it inadvisable to effect the distribution or would result in the distribution and related transactions not being in the best interest of Trinity or its stockholders.

Trinity and Arcosa cannot assure you that any or all of these conditions will be met, and Trinity may also waive conditions to the distribution. Trinity may decline at any time to go forward with the distribution, whether or not the conditions are satisfied.

Stock exchange listing
We intend to apply to list our common stock on the NYSE under the symbol “ACA”.
Distribution agent
American Stock Transfer & Trust Company
Tax considerations
It is a condition to the completion of the distribution that Trinity receives (i) a private letter ruling from the IRS and (ii) an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal

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income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. Trinity has received the IRS ruling. Accordingly, and so long as the distribution so qualifies, for United States federal income tax purposes, no gain or loss will be recognized by you, and no amount will be included in your income, upon the receipt of shares of Arcosa common stock pursuant to the distribution. You will, however, recognize gain or loss for United States federal income tax purposes with respect to cash received in lieu of a fractional share of Arcosa common stock.

For more information regarding the potential United States federal income tax consequences to Arcosa, Trinity, and to you of the separation and distribution, see the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.

Relationship between Trinity and Arcosa following the spin-off
Following the completion of the spin-off, Trinity and Arcosa will be independent companies, and the relationship between Arcosa and Trinity will be governed by, among others, a separation and distribution agreement, a transition services agreement, a tax matters agreement, an intellectual property matters agreement, and an employee matters agreement. These agreements will provide for the allocation between Arcosa and Trinity of Trinity’s and Arcosa’s assets, employees, liabilities, and obligations (including employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Arcosa’s spin-off from Trinity. For additional information regarding these agreements, see the sections entitled “Risk Factors—Risks Related to the Separation” and “Certain Relationships and Related Person Transactions”.

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RISK FACTORS

You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this information statement. The risks and uncertainties described below are those that we have identified as material, but are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, geopolitical events, changes in laws or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters, or other disruptions of expected economic or business conditions. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity, and financial condition.

Risks Related to Arcosa’s Business

Many of the industries in which Arcosa operates are subject to global market volatility and economic cyclicality.

Instability in the global economy, negative conditions in the global credit markets, volatility in the industries that Arcosa’s products serve, fluctuations in commodity prices that Arcosa’s 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 Arcosa’s customers could lead to a reduction in orders for Arcosa’s products and customers’ requests for deferred deliveries of Arcosa’s backlog orders. Additionally such events could result in Arcosa’s customers’ attempts to unilaterally cancel or terminate firm contracts or orders in whole or in part resulting in contract or purchase order breaches which could result in increased commercial litigation costs.

If volatile conditions in the global credit markets prevent Arcosa’s customers’ access to credit, product order volumes may decrease or customers may default on payments owed to Arcosa. Likewise, if Arcosa’s suppliers face challenges obtaining credit, selling their products to customers that require purchasing credit, or otherwise operating their businesses, the supply of materials Arcosa purchases from them to manufacture its products may be interrupted.

Periodic downturns in economic conditions usually have a significant adverse effect on cyclical industries in which Arcosa participates 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 barge and wind energy industries in particular have previously experienced sharp cyclical downturns and at such times operated with a minimal backlog. While the business cycles of Arcosa’s different operations may not typically coincide, an economic downturn could affect disparate cycles contemporaneously.

Any of the foregoing market or industry conditions or events could result in reductions in Arcosa’s revenues, increased price competition or increased operating costs, which could adversely affect Arcosa’s business, cash flows, results of operations, and financial condition.

Arcosa operates in highly competitive industries. Arcosa may not be able to sustain its market leadership positions, which may impact its financial results.

Arcosa faces aggressive competition in all geographic markets and each industry sector in which it operates. In addition to price, Arcosa faces 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 Arcosa’s revenues and operating profits, limit Arcosa’s ability to grow, increase pricing pressure on Arcosa’s products, and otherwise affect Arcosa’s financial results.

Equipment failures or extensive damage to Arcosa’s 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.

Arcosa operates a substantial amount of equipment at Arcosa’s production facilities, several of which are situated in tornado and hurricane zones and on navigable waterways in the United States. An interruption in production capabilities or maintenance and repair capabilities at Arcosa’s facilities, as a result of equipment failure or acts of nature, including non-navigation orders resulting from excessive or low-water conditions issued from time to time by the United States Army Corps of Engineers on one or more United States rivers that serve Arcosa’s facilities, could reduce or prevent Arcosa’s production, delivery, service, or repair of Arcosa’s products and increase Arcosa’s costs and expenses. A halt of production at any of Arcosa’s manufacturing facilities could severely affect delivery times to Arcosa’s customers. While Arcosa maintains emergency response and business recovery plans that are intended to

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allow Arcosa to recover from natural disasters that could disrupt Arcosa’s business, Arcosa cannot provide assurances that its plans would fully protect Arcosa from the effects of all such disasters. In addition, insurance may not adequately compensate Arcosa for any losses incurred as a result of natural or other disasters, which may adversely affect Arcosa’s financial condition. Any significant delay in deliveries not otherwise contractually mitigated by favorable force majeure or other provisions could result in cancellation of all or a portion of Arcosa’s orders, cause Arcosa to lose future sales, and negatively affect Arcosa’s reputation and Arcosa’s results of operations.

Arcosa depends on its key management employees, and Arcosa may not be able to retain their services in the future.

Arcosa’s success depends on the continued services of its executive team and key management employees, none of whom currently have an employment agreement with Arcosa. Although Trinity has historically been largely successful in retaining the services of Arcosa’s executives and key management, Arcosa may not be able to do so in the future. The loss of the services of one or more executives or key members of Arcosa’s management team could result in increased costs associated with attracting and retaining a replacement and could disrupt Arcosa’s operations and result in a loss of revenues.

A material disruption at one or more of Arcosa’s manufacturing facilities or in Arcosa’s supply chain could have a material adverse effect on us.

Arcosa owns and operates manufacturing facilities of various ages and levels of automated control and relies on a number of third parties as part of Arcosa’s supply chain, including for the efficient distribution of products to Arcosa’s customers. Any disruption at one of Arcosa’s manufacturing facilities or within Arcosa’s supply chain could prevent Arcosa from meeting demand or require Arcosa to incur unplanned capital expenditures. Older facilities are generally less energy-efficient and are at an increased risk of breakdown or equipment failure, resulting in unplanned downtime. Any unplanned downtime at Arcosa’s facilities may cause delays in meeting customer timelines, result in liquidated damages claims or cause Arcosa to lose or harm customer relationships.

Additionally, Arcosa requires specialized equipment to manufacture certain of its products, and if any of its manufacturing equipment fails, the time required to repair or replace this equipment could be lengthy, which could result in extended downtime at the affected facility. Any unplanned repair or replacement work can also be very expensive. Moreover, manufacturing facilities can unexpectedly stop operating because of events unrelated to Arcosa or beyond its control, including fires and other industrial accidents, floods and other severe weather events, natural disasters, environmental incidents or other catastrophes, utility and transportation infrastructure disruptions, shortages of raw materials, and acts of war or terrorism. Work stoppages, whether union-organized or not, can also disrupt operations at manufacturing facilities.

Furthermore, while Arcosa is generally responsible for delivering products to the customer, any shortages in trucking capacity, any increase in the cost thereof or any other disruption to the highway systems could limit Arcosa’s ability to deliver its products in a timely manner or at all. Any material disruption at one or more of Arcosa’s facilities or those of Arcosa’s customers or suppliers or otherwise within Arcosa’s supply chain, whether as a result of downtime, facility damage, an inability to deliver Arcosa’s products or otherwise, could prevent Arcosa from meeting demand, require Arcosa to incur unplanned capital expenditures or cause other material disruption to Arcosa’s operations, any of which could have a material adverse effect on Arcosa’s business, financial condition, and results of operations.

Delays in construction projects and any failure to manage Arcosa’s inventory could have a material adverse effect on us.

Many of Arcosa’s products are used in large-scale construction projects which generally require a significant amount of planning and preparation before construction commences. However, construction projects can be delayed and rescheduled for a number of reasons, including unanticipated soil conditions, adverse weather or flooding, changes in project priorities, financing issues, difficulties in complying with environmental and other government regulations or obtaining permits, and additional time required to acquire rights-of-way or property rights. These delays or rescheduling may occur with too little notice to allow Arcosa to replace those projects in Arcosa’s manufacturing schedules or to adjust production capacity accordingly, creating unplanned downtime, increasing costs and inefficiencies in Arcosa’s operations, and increased levels of obsolete inventory.

Additionally, Arcosa maintains an inventory of certain products that meet standard specifications and are ultimately purchased by a variety of end users. Arcosa forecasts demand for these products to ensure that it keeps sufficient

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inventory levels of certain products that Arcosa expects to be in high demand and limit its inventory for which Arcosa does not expect much interest. However, Arcosa’s forecasts are not always accurate and unexpected changes in demand for these products, whether because of a change in preferences or otherwise, can lead to increased levels of obsolete inventory. Any delays in construction projects and Arcosa’s customers’ orders or any inability to manage Arcosa’s inventory could have a material adverse effect on Arcosa’s business, financial condition, and results of operations.

The seasonality of Arcosa’s business and its susceptibility to severe and prolonged periods of adverse weather and other conditions could have a material adverse effect on us.

Demand for Arcosa’s products in some markets is typically seasonal, with periods of snow or heavy rain negatively affecting construction activity. For example, sales of Arcosa’s products in Canada and the Northeast and Midwest regions of the United States are somewhat higher from spring through autumn when construction activity is greatest. Construction activity declines in these markets during the winter months in particular due to inclement weather, frozen ground, and fewer hours of daylight. Construction activity can also be affected in any period by adverse weather conditions such as hurricanes, severe storms, torrential rains and floods, natural disasters such as fires and earthquakes, and similar events, any of which could reduce demand for Arcosa’s products, push back existing orders to later dates or lead to cancellations.

Furthermore, Arcosa’s ability to deliver products on time or at all to Arcosa’s customers can be significantly impeded by such conditions and events, such as these described above. Public holidays and vacation periods constitute an additional factor that may exacerbate certain seasonality effects, as building projects or industrial manufacturing processes may temporarily cease. These conditions, particularly when unanticipated, can leave both equipment and personnel underutilized.

Additionally, the seasonal nature of Arcosa’s business has led to variation in Arcosa’s quarterly results in the past and may continue to do so in the future. This general seasonality of Arcosa’s business and any severe or prolonged adverse weather conditions or other similar events could have a material adverse effect on Arcosa’s business, financial condition, and results of operations.

Risks related to Arcosa’s operations outside of the United States, particularly Mexico, could decrease Arcosa’s profitability.

Arcosa’s operations outside of the United States 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 Arcosa’s respective foreign business activities and operations, including the ability to hire and retain employees. Violence in Mexico associated with drug trafficking is continuing. Arcosa has not, to date, been materially affected by any of these risks, but Arcosa cannot predict the likelihood of future effects from such risks or any resulting adverse impact on Arcosa’s business, results of operations or financial condition. Many items manufactured by Arcosa in Mexico are sold in the United States and the transportation and import of such products may be disrupted. Some foreign countries where Arcosa operates have regulatory authorities that regulate products sold or used in those countries. If Arcosa fails to comply with the applicable regulations within the foreign countries where Arcosa operates, Arcosa may be unable to market and sell its products in those countries. In addition, with respect to operations in Mexico and other foreign countries, unexpected changes in the political environment, 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 Arcosa’s products less timely or more difficult. Furthermore, any material change in the quotas, regulations or duties on imports imposed by the United States government and agencies or on exports by the government of Mexico or its agencies, could affect Arcosa’s ability to export products that Arcosa manufactures in Mexico. Because Arcosa has operations outside the United States, Arcosa could be adversely affected by final judgments of non-compliance with the United States Foreign Corrupt Practices Act of 1977 (“FCPA”) or import/export rules and regulations and similar anti-corruption, anti-bribery or import/export laws of other countries.

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Potential expansion of our business may expose us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States.

We may in the future expand our business and operations into jurisdictions outside of the United States in which we have limited operating experience, including with respect to seeking regulatory approvals, marketing or selling products. Our operations in these jurisdictions may be adversely affected by a number of factors, including: general economic conditions and economic and fiscal policy; financial risks, such as longer payment cycles, difficulty in collecting from international customers, the effect of local and regional financial crises and exposure to foreign currency exchange rate fluctuations and controls; multiple, conflicting and changing laws and regulations such as export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; interest rates and taxation laws and policies; increased government regulation; social stability; and political, economic, or diplomatic developments. Certain jurisdictions have, from time to time, experienced instances of civil unrest and hostilities, both internally and with neighboring countries. Rioting, military activity, terrorist attacks, or armed hostilities could cause our operations in such jurisdictions to be adversely affected or suspended. We generally do not have insurance for losses and interruptions caused by terrorist attacks, military conflicts and wars.

In addition, anti-bribery and anti-corruption laws may conflict with some local customs and practices in foreign jurisdictions. Our operations in international jurisdictions may be adversely affected by regulatory and compliance risks that relate to maintaining accurate information and control over activities that may fall within the purview of the FCPA, including both its books and records provisions and its anti-bribery provisions. As a result of our policy to comply with the FCPA and similar anti-bribery laws, we may be at a competitive disadvantage to competitors that are not subject to, or do not comply with, such laws

Any of these factors could significantly harm our potential international expansion and operations and, consequently, our revenues, costs, results of operations, and financial condition.

Arcosa may incur increased costs due to fluctuations in interest rates and foreign currency exchange rates.

Arcosa is exposed to risks associated with fluctuations in interest rates and changes in foreign currency exchange rates. Under varying circumstances, Arcosa 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.

Repercussions from terrorist activities or armed conflict could harm Arcosa’s business.

Terrorist activities, anti-terrorist efforts, and other armed conflict involving the United States or its interests abroad may adversely affect the United States and global economies, potentially preventing Arcosa from meeting its financial and other obligations. In particular, the negative impacts of these events may affect the industries in which Arcosa operates. This could result in delays in or cancellations of the purchase of Arcosa’s products or shortages in raw materials, parts or components. Any of these occurrences could have a material adverse impact on Arcosa’s operating results, revenues, costs, and financial condition.

Arcosa could potentially fail to successfully integrate new businesses or products into its current business.

Arcosa expects to routinely engage in the search for growth opportunities, including assessment of merger and acquisition prospects in new markets and/or products. Any merger or acquisition into which Arcosa enters is subject to integration into Arcosa’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 Arcosa’s business, operations or financial condition.

Arcosa’s access to capital may be limited or unavailable due to deterioration of conditions in the global capital markets and/or weakening of macroeconomic conditions.

In general, Arcosa will rely in large part upon banks and capital markets to fund its growth strategy. 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 Arcosa to incur increased borrowing costs and have greater difficulty accessing public and private markets for both secured and unsecured debt,

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which factors include Arcosa’s financial performance. If Arcosa is unable to secure financing on acceptable terms, Arcosa’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.

Fluctuations in the price and supply of raw materials and parts and components used in the production of Arcosa’s products could have a material adverse effect on its ability to cost-effectively manufacture and sell Arcosa’s products. In some instances, Arcosa relies on a limited number of suppliers for certain raw materials, parts and components needed in its production.

A significant portion of Arcosa’s business depends on the adequate supply of numerous specialty and other parts and components at competitive prices such as flanges for the structural wind towers business. Arcosa’s manufacturing operations partially depend on Arcosa’s ability to obtain timely deliveries of raw materials, parts, and components in acceptable quantities and quality from Arcosa’s suppliers. Certain raw materials, parts, and components for Arcosa’s products are currently available from a limited number of suppliers and, as a result, Arcosa may have limited control over pricing, availability, and delivery schedules. If Arcosa is unable to purchase a sufficient quantity of raw materials, parts, and components on a timely basis, Arcosa could face disruptions in its production and incur delays while Arcosa attempts to engage alternative suppliers. Fewer suppliers could result from unimproved or worsening economic or commercial conditions, potentially increasing Arcosa’s rejections for poor quality and requiring Arcosa to source unknown and distant supply alternatives. Any such disruption or conditions could harm Arcosa’s business and adversely impact Arcosa’s results of operations.

The principal material used in Arcosa’s 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, tariffs, and other market factors. Arcosa often uses contract-specific purchasing practices, supplier commitments, contractual price escalation provisions, and other arrangements with Arcosa’s customers to mitigate the effect of this volatility on Arcosa’s operating profits for the year. To the extent that Arcosa does not have such arrangements in place, a change in steel prices could materially lower Arcosa’s profitability. In addition, meeting production demands is dependent on Arcosa’s ability to obtain a sufficient amount of steel. An unanticipated interruption in Arcosa’s supply chain could have an adverse impact on both Arcosa’s margins and production schedules.

Reductions in the availability of energy supplies or an increase in energy costs may increase Arcosa’s operating costs.

Arcosa uses various gases, including natural gas, at Arcosa’s manufacturing facilities and uses diesel fuel in vehicles to transport Arcosa’s products to customers and to operate its plant equipment. An outbreak or escalation of hostilities between the United States 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, including rationing thereof, 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 Arcosa’s business cost effectively.

Shortages of skilled labor could adversely impact Arcosa’s operations.

Arcosa depends on skilled labor in the manufacture, maintenance, and repair of Arcosa’s products. Some of Arcosa’s 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 Arcosa’s ability to maintain or increase production rates and could increase Arcosa’s labor costs.

Some of Arcosa’s employees belong to labor unions and strikes or work stoppages could adversely affect Arcosa’s operations.

Arcosa is a party to collective bargaining agreements with various labor unions at some of Arcosa’s operations in the United States and all of Arcosa’s operations in Mexico. Disputes with regard to the terms of these agreements or Arcosa’s potential inability to negotiate acceptable contracts with these unions in the future could result in, among

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other things, strikes, work stoppages, or other slowdowns by the affected workers. Arcosa cannot be assured that its relations with its workforce will remain positive or that union organizers will not be successful in future attempts to organize at some of Arcosa’s facilities. If Arcosa’s 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, Arcosa could experience a significant disruption of its operations and higher ongoing labor costs. In addition, Arcosa 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 its operations or difficulties of restarting Arcosa’s operations that have been temporarily shuttered.

Our business is subject to significant regulatory compliance burdens.

We are subject to various governmental regulations related to occupational safety and health, labor, and business practices. Failure to comply with current or future regulations could result in the imposition of substantial fines, suspension of production, alterations of our production processes, cessation of operations, or other actions which could harm our business.

Although we believe that we are in material compliance with all applicable regulations material to our business operations, amendments to existing statutes and regulations or adoption of new statutes and regulations could require us to continually alter our methods of operation and/or discontinue the sale of certain of our products resulting in costs to us that could be substantial. We may not be able, for financial or other reasons, to comply with applicable laws, rules, regulations, and permit requirements. Our failure to comply with applicable laws, rules or regulations or permit requirements could subject us to civil remedies, including substantial fines, penalties, and injunctions, as well as possible criminal sanctions, which would, if of significant magnitude, materially adversely impact our operations and future financial condition.

Violations of or changes in the regulatory requirements applicable to the industries in which Arcosa operates may increase Arcosa’s operating costs.

Arcosa’s inland barge operations are subject to regulation including, but not limited to, by the United States Coast Guard; the United States National Transportation Safety Board; the United States Customs Service; the Maritime Administration of the United States 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.

Arcosa’s Construction Products Group is subject to regulation by the United States Occupational Safety and Health Administration (“OSHA”), the United States Mine Safety and Health Administration (“MSHA”), and various state agencies.

Arcosa’s storage and distribution containers are subject to the regulations by the United States Pipeline and Hazardous Materials Safety Administration (“PHMSA”) and the United States Federal Motor Carrier Safety Administration (“FMCSA”), both of which are part of the United States Department of Transportation (“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 transport arrangement, and distribution of regulated and non-regulated substances.

Arcosa’s operations are also subject to regulation of health and safety matters by OSHA and MSHA. Arcosa believes it employs appropriate precautions to protect its employees and others from workplace injuries and harmful exposure to materials handled and managed at Arcosa’s facilities.

Future regulatory changes or the determination that Arcosa’s 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 Arcosa’s financial condition and operations.

Arcosa is subject to health and safety laws and regulations and any failure to comply with any current or future laws or regulations could have a material adverse effect on us.

Manufacturing and construction sites are inherently dangerous workplaces. Arcosa’s manufacturing sites often put Arcosa’s employees and others in close proximity with large pieces of mechanized equipment, moving vehicles, chemical and manufacturing processes, heavy products and other items, and highly regulated materials. As a result,

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Arcosa is subject to a variety of health and safety laws and regulations dealing with occupational health and safety. Unsafe work sites have the potential to increase employee turnover and raise Arcosa’s operating costs. Arcosa’s safety record can also impact Arcosa’s reputation. Arcosa maintains functional groups whose primary purpose is to ensure Arcosa implements effective work procedures throughout Arcosa’s organization and take other steps to ensure the health and safety of Arcosa’s work force, but there can be no assurances these measures will be successful in preventing injuries or violations of health and safety laws and regulations. Any failure to maintain safe work sites or violations of applicable law could expose Arcosa to significant financial losses and reputational harm, as well as civil and criminal liabilities, any of which could have a material adverse effect on Arcosa’s business, financial condition, and results of operations.

Employment related lawsuits could be brought against us for improper termination of employment, sexual harassment, hostile work environment and other claims. These lawsuits could be expensive, time consuming, and result in substantial damages to us and increases in our insurance rates.

If Arcosa terminates someone’s employment for improper reasons, fails to provide an appropriate work environment, or it is alleged that we did so, Arcosa may become subject to substantial and costly litigation by its former and current employees. Such claims could divert management’s attention from Arcosa’s core business, be expensive to defend, and result in sizable damage awards against Arcosa. Arcosa’s current insurance coverage may not apply or may not be sufficient to cover these claims and the coverage Arcosa has is subject to deductibles for which we are responsible. Moreover, in the future, Arcosa may not be able to obtain insurance in amount or scope sufficient to provide it with adequate coverage against potential liabilities. Any employment related claims brought against Arcosa, with or without merit, could increase employment law insurance rates or prevent Arcosa from securing continuing coverage, could harm Arcosa’s reputation in the industry and reduce product sales. Arcosa would need to pay any losses in excess of insurance coverage out of cash reserves, harming Arcosa’s financial condition and adversely affecting operating results.

Arcosa has potential exposure to environmental liabilities that may increase costs and lower profitability.

Arcosa is subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to: (i) the release or discharge of regulated materials into the environment at Arcosa’s facilities or with respect to Arcosa’s products while in operation; (ii) the management, use, processing, handling, storage, transport and transport arrangement, 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 Arcosa to liability for its own acts and in certain instances potentially expose Arcosa to liability for the acts of others. These laws and regulations also may impose liability on Arcosa currently under circumstances where at the time of the action taken, Arcosa’s 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. Arcosa’s operations involving hazardous materials also raise potential risks of liability under common law.

Environmental operating permits are, or may be, required for Arcosa’s operations under these laws and regulations. These operating permits are subject to modification, renewal, and revocation. Although Arcosa regularly monitors and reviews its operations, procedures, and policies for compliance with Arcosa’s operating permits and related laws and regulations, the risk of environmental liability is inherent in the operation of Arcosa’s 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 Arcosa’s products and related business activities and properties, may give rise to additional compliance and other costs that could have a material adverse effect on Arcosa’s financial condition and operations.

In addition to environmental laws, the transportation of commodities by rail, 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 an 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 shipper, the buyer, and the seller of the substances being transported, or the manufacturer of the barge, container, or its components. Additionally, the severity of injury or property damage arising from an incident may influence the causation responsibility analysis, exposing

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Arcosa to potentially greater liability. Under certain circumstances, strict liability concepts may apply and if Arcosa is found liable in any such incident, it could have a material adverse effect on Arcosa’s financial condition, business and operations.

Responding to claims relating to improper handling, transport, storage or disposal of hazardous materials could be time consuming and costly.

We use controlled hazardous materials in our business and generate wastes that are regulated as hazardous wastes under United States federal, state, and local environmental laws and under equivalent provisions of law in those and other jurisdictions in which our manufacturing facilities are located. Our use of these substances and materials is subject to stringent, and periodically changing, regulation that can impose costly compliance obligations on us and have the potential to adversely affect our manufacturing activities. We are also subject 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 use to transport or store hazardous, flammable, toxic, or explosive materials.

The risk of accidental contamination or injury from these materials cannot be completely eliminated. If an accident with these substances occurs, we could be held liable for any damages that result, as well as incurring clean-up costs and liabilities, which can be substantial. Additionally, an accident could damage our facilities, resulting in delays and increased costs.

Our manufacturing plants or other facilities may have unknown environmental conditions that could be expensive and time-consuming to correct.

There can be no assurance that we will not encounter hazardous environmental conditions at any of our manufacturing plants or other facilities that may require us to incur significant clean-up or correction costs. Upon encountering a hazardous environmental condition or receiving a notice of a hazardous environmental condition, we may be required to correct the condition. The presence of a hazardous environmental condition relating to any of our manufacturing plants or other facilities may require significant expenditures to correct the environmental condition.

Business, regulatory, and legal developments regarding climate change may affect the demand for Arcosa’s products or the ability of Arcosa’s critical suppliers to meet Arcosa’s needs.

Arcosa has 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, Arcosa periodically reviews the potential challenges and opportunities for Arcosa 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 Arcosa’s industries.

Potential impacts of climate change include physical impacts, such as disruption in production and product distribution due to impacts from major storm events, shifts in regional weather patterns and intensities, and potential impacts from sea level changes. There is also a potential for climate change legislation and regulation that could adversely impact the cost of certain manufacturing inputs, including the cost of energy and electricity.

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 United States Congress and by the United States Environmental Protection Agency. Some of these proposals would require industries to meet stringent new standards that may require substantial reductions in carbon emissions. While Arcosa 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, while potential challenges could include decreased demand for certain types of 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 Arcosa’s manufacturing facilities as well as the price of insuring company assets or other unforeseen disruptions of Arcosa’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.

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The impacts of climate change on our operations and the Company overall are highly uncertain and difficult to estimate. However, climate change legislation and regulation concerning greenhouse gases could have a material adverse effect on our future financial position, results of operations or cash flows.

Arcosa may be required to reduce the value of Arcosa’s long-lived assets, including intangible assets, and/or goodwill, which would weaken Arcosa’s financial results. Further, if the goodwill or intangible assets we have recorded in connection with acquisitions becomes impaired, it could have a material adverse impact on our financial condition, results of operations, shareholder’s equity, and/or share price.

Arcosa periodically evaluates for potential impairment the carrying values of Arcosa’s long-lived assets, including intangible 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.

Certain noncash impairments may result from a change in our strategic goals, business direction, or other factors relating to the overall business environment. Any impairment of the value of goodwill or other intangible assets will result in a noncash charge against earnings, which could have a material adverse effect on our financial condition, results of operations, shareholder’s equity, and/or share price.

Changes in accounting policies or inaccurate estimates or assumptions in the application of accounting policies could adversely affect the reported value of Arcosa’s assets or liabilities and financial results.

Arcosa’s financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The significant accounting policies, together with the other notes that follow, are an integral part of the financial statements. Some of these policies require the use of estimates and assumptions that may affect the reported value of Arcosa’s assets or liabilities and financial results and require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC, and Arcosa’s 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 Arcosa records and reports its financial condition and results of operations. In some cases, Arcosa 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 Arcosa’s critical accounting policies and standards and recent accounting changes, see Critical Accounting Policies and Estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations, Note 3 “Summary of Significant Accounting Policies” of the Notes to Audited Annual Combined Financial Statements, and Note 1 “Summary of Significant Accounting Policies” of the Notes to Unaudited Interim Combined Financial Statements.

From time to time Arcosa may take tax positions that the Internal Revenue Service or other taxing jurisdictions may contest.

The subsidiaries and businesses of Trinity that will comprise Arcosa have in the past and Arcosa may in the future take tax positions that the Internal Revenue Service or other taxing jurisdictions may challenge. Arcosa is required to disclose to the IRS as part of Arcosa’s tax returns particular tax positions in which Arcosa has 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 Arcosa takes, Arcosa may be required to pay additional taxes or fines which may not have been previously accrued that may adversely affect its results of operations and financial position.

The limited number of customers for certain of Arcosa’s products, the variable purchase patterns of Arcosa’s customers in all of its segments, and the timing of completion, delivery, and customer acceptance of orders may cause Arcosa’s revenues and income from operations to vary substantially each quarter, potentially resulting in significant fluctuations in its quarterly results.

Some of the markets Arcosa serves have a limited number of customers. The volumes purchased by customers in each of Arcosa’s business segments vary from year to year, and not all customers make purchases every year. As a result, the order levels for Arcosa’s products have varied significantly from quarterly period to quarterly period in the past

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and may continue to vary significantly in the future. Therefore, Arcosa’s results of operations in any particular quarterly period may also vary. As a result of these quarterly fluctuations, Arcosa believes that comparisons of its sales and operating results between quarterly periods may not be meaningful and should not be relied upon as indicators of future performance.

Some of Arcosa’s products are sold to contractors, distributors, installers, and rental companies who may misuse, abuse, improperly install or improperly or inadequately maintain or repair such products, thereby potentially exposing Arcosa to claims that could increase Arcosa’s costs and weaken Arcosa’s financial condition.

The products Arcosa manufactures are designed to work optimally when properly assembled, operated, installed, repaired, and maintained. When this does not occur, Arcosa may be subjected to claims or litigation associated with personal or bodily injuries or death and property damage.

Some of Arcosa’s customers place orders for Arcosa’s products (i) 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 (ii) to utilize federal-aid programs that allow for purchase price reimbursement or other government funding or subsidies, any of which benefits, credits or programs could be discontinued or allowed to expire without extension thereby reducing demand for certain of Arcosa’s products.

There is no assurance that the United States government will reauthorize, modify, or otherwise not allow the expiration of tax benefits, tax credits, subsidies, or federal-aid programs that may include funding of the purchase or purchase price reimbursement of certain of Arcosa’s products. In instances where such benefits, credits, subsidies or programs are allowed to expire or are otherwise modified or discontinued, the demand for Arcosa’s products could decrease, thereby creating the potential for a material adverse effect on Arcosa’s financial condition or results of operations.

United States government actions relative to the federal budget, taxation policies, government expenditures, United States borrowing/debt ceiling limits, and trade policies could adversely affect Arcosa’s business and operating results.

Periods of impasse, deadlock, and last minute accords may continue to permeate many aspects of United States governance, including federal government budgeting and spending, taxation, United States deficit spending and debt ceiling adjustments, and international commerce. Such periods could negatively impact United States domestic and global financial markets, thereby reducing customer demand for Arcosa’s products and services and potentially result in reductions in Arcosa’s revenues, increased price competition, or increased operating costs, any of which could adversely affect Arcosa’s business, results of operations, and financial condition. Arcosa produces many of its products at its manufacturing facilities in Mexico. Arcosa’s business benefits from free trade agreements such as the North American Free Trade Agreement (“NAFTA”). NAFTA and future import taxes are currently under scrutiny by the current United States administration. On August 6, 2017, the United States Trade Representative opened the renegotiation of NAFTA with the governments of Canada and Mexico. The United States administration has indicated a willingness to exercise its right to withdraw from NAFTA after a six month notice period. If a preference for bi-lateral trade agreements emerges, then wholesale renegotiation of, or a United States withdrawal from, NAFTA could result and cause significant change or interruption to commercial transactions between the United States and Mexico that could adversely affect Arcosa’s business, financial condition, and results of operations.

Arcosa’s business is based in part on government-funded infrastructure projects and building activities, and any reductions or re-allocation of spending or related subsidies in these areas could have an adverse effect on us.

Certain of Arcosa’s businesses depend on government spending for infrastructure and other similar building activities. As a result, demand for some of Arcosa’s products is influenced by United States federal government fiscal policies and tax incentives and other subsidies. Projects in which Arcosa participates may be funded directly by governments or privately-funded, but are otherwise tied to or impacted by government policies and spending measures.

Government infrastructure spending and governmental policies with respect thereto depend primarily on the availability of public funds, which is influenced by many factors, including governmental budgets; public debt levels; interest rates; existing and anticipated and actual federal, state, provincial, and local tax revenues; government leadership; and the general political climate, as well as other general macroeconomic and political factors. In addition, United States federal government funds may only be available based on states’ willingness to provide

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matching funding. Government spending is often approved only on a short-term basis and some of the projects in which Arcosa’s products are used require longer-term funding commitments. If government funding is not approved or funding is lowered as a result of poor economic conditions, lower than expected revenues, competing spending priorities or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which could adversely affect the profitability of Arcosa’s business.

Additionally, certain regions or states may require or possess the means to finance only a limited number of large infrastructure projects and periods of high demand may be followed by years of little to no activity. There can be no assurances that governments will sustain or increase current infrastructure spending and tax incentive and other subsidy levels, and any reductions thereto or delays therein could affect Arcosa’s business, financial condition, and results of operations.

Litigated disputes and other claims could increase Arcosa’s costs and weaken Arcosa’s financial condition.

Arcosa is currently, and may from time to time be, involved in various claims or legal proceedings arising out of Arcosa’s operations. Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken Arcosa’s financial condition. Although Arcosa maintains reserves for its reasonably estimable liability, Arcosa’s reserves may be inadequate to cover its portion of claims or final judgments after taking into consideration rights in indemnity and recourse under insurance policies or to third parties as a result of which there could be a material adverse effect on Arcosa’s business, operations, or financial condition.

While state and federal procedural rules exist to curtail the filing of claims against Arcosa in jurisdictions unrelated to the underlying claims, courts sometime may not enforce these rules, exposing Arcosa to a greater likelihood of unfavorable results and increased litigation costs. Whenever Arcosa’s products are sold to or ultimately owned and/or operated by governments or their authorized agencies, Arcosa may be unable to seek redress or recourse to at-fault parties. When litigation arising from the installation, maintenance, replacement or use of Arcosa’s products is filed against Arcosa, recourse to such governments or authorized agencies may be subject to sovereign immunity or related defenses thereby exposing Arcosa to risk of liability and increased costs irrespective of fault.

Arcosa’s manufacturer’s warranties expose Arcosa to product replacement and repair claims.

Depending on the product, Arcosa warrants its workmanship and certain materials (including surface coatings), parts, and components pursuant to express limited contractual warranties. Arcosa may be subject to significant warranty claims in the future such as multiple claims based on one defect repeated throughout Arcosa’s 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 Arcosa’s reputation.

Defects in materials and workmanship could harm our reputation, expose us to product warranty or other liability claims, decrease demand for products, or materially harm existing or prospective customer relationships.

There is an inherent risk in manufacturing technically advanced products. We may experience issues in the field related to manufacturing defects and are exposed to warranty and product liability claims, with or without merit, that may require costly repairs or replacement and may include cost related to disassembly of our products and transportation of the products from the field to our facilities and returning the products to the customer, a change in our manufacturing processes or recall of previously manufactured products, which could result in significant expense and materially harm our existing or prospective customer relationships. Any of the foregoing could materially harm our business, operating results, and financial condition.

Increasing insurance claims and expenses could lower profitability and increase business risk.

Arcosa is subject to potential liability for claims alleging property damage and personal and bodily injury or death arising from the use of or exposure to Arcosa’s products, especially in connection with products Arcosa manufactures that Arcosa’s customers use to transport hazardous, flammable, toxic, or explosive materials. As policies expire, premiums for renewed or new coverage may further increase and/or require that Arcosa increase its self-insured retention or deductibles. Arcosa 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, Arcosa could suffer additional costs associated with accessing its excess coverage policies. Also, an increase in the loss amounts attributable to such claims could expose Arcosa to uninsured damages if Arcosa were unable or elected not to insure against certain claims because of high

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premiums or other reasons. While Arcosa’s liability insurance coverage is at or above levels based on commercial norms in Arcosa’s industries, an unusually large liability claim or a string of claims coupled with an unusually large damage award could exceed Arcosa’s available insurance coverage. In addition, the availability of, and Arcosa’s ability to collect on, insurance coverage is often subject to factors beyond Arcosa’s control, including positions on policy coverage taken by insurers. If any of Arcosa’s third-party insurers fail, cancel or refuse coverage or otherwise are unable to provide Arcosa with adequate insurance coverage, then Arcosa’s risk exposure and Arcosa’s operational expenses may increase and the management of its business operations would be disrupted. Moreover, any accident or incident involving Arcosa’s industries in general or Arcosa or Arcosa’s products specifically, even if Arcosa is fully insured, contractually indemnified, or not held to be liable, could negatively affect Arcosa’s reputation among customers and the public, thereby making it more difficult for Arcosa to compete effectively, and could significantly affect the cost and availability of insurance in the future.

Arcosa’s inability to produce and disseminate relevant and/or reliable data and information pertaining to Arcosa’s 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, Arcosa’s future operations, profitability and competitive position.

Arcosa relies on information technology infrastructure and architecture, including hardware, network including the cloud, software, people, and processes to provide useful and confidential information to conduct Arcosa’s 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 Arcosa’s relations with suppliers and customers, place Arcosa in violation of confidentiality and data protection laws, rules, and regulations, and result in negative impacts to Arcosa’s market share, operations, and profitability. Security breaches in Arcosa’s information technology could result in theft, destruction, loss, misappropriation, or release of confidential data, trade secrets, or other proprietary or intellectual property that could adversely impact Arcosa’s future results.

Cybersecurity incidents could disrupt our business and result in the compromise of confidential information.

Our business is at risk from and may be impacted by information security incidents, including attempts to gain unauthorized access to our confidential data, ransomware, malware, and other electronic security events. Such incidents can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. They can also result from internal compromises, such as human error, or malicious acts. While we employ a number of measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event. Cybersecurity incidents could disrupt our business and compromise confidential information of ours and third parties.

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 Arcosa could create unwarranted volatility in Arcosa’s stock price and losses to Arcosa’s stockholders and could adversely affect Arcosa’s 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 exacerbate the public’s inability to distinguish between what is factual and what is false and could obstruct an effective and timely response to correct inaccuracies or falsehoods. Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning Arcosa in general or Arcosa’s products, Arcosa’s leadership, or Arcosa’s reputation among customers and the public at large, thereby making it more difficult for Arcosa to compete effectively, and potentially having a material adverse effect on Arcosa’s business, operations, or financial condition.

Arcosa’s inability to sufficiently protect Arcosa’s intellectual property rights could adversely affect Arcosa’s business.

Arcosa’s patents, copyrights, trademarks, trade secrets, and other intellectual property rights are important to Arcosa’s success. Arcosa relies on patent, copyright, and trademark law, and trade secret protection and confidentiality and/or license agreements with others to protect Arcosa’s intellectual property rights. Arcosa’s trademarks, service marks,

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copyrights, patents and trade secrets may be exposed to market confusion, commercial abuse, infringement, or misappropriation and possibly challenged, invalidated, circumvented, narrowed, or declared unenforceable by countries where Arcosa’s products and services are made available, including countries where the laws may not protect Arcosa’s intellectual property rights as fully as in the United States. Such instances could negatively impact Arcosa’s competitive position and adversely affect Arcosa’s business. Additionally, Arcosa could be required to incur significant expenses to protect its intellectual property rights.

Risks Related to the Spin-Off

Arcosa may not achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely affect Arcosa’s business.

Arcosa may not be able to achieve the full strategic and financial benefits expected to result from the spin-off, or such benefits may be delayed or not occur at all. The spin-off is expected to provide the following benefits, among others:

allow each company to more effectively pursue its own distinct operating priorities and strategies, enable the management of both companies to pursue separate opportunities for long-term growth and profitability and to recruit, retain and motivate employees pursuant to compensation policies which are appropriate for their respective lines of business;
permit each company to concentrate its financial resources solely on its own operations, providing greater flexibility to invest capital in its business in a time and manner appropriate for its distinct strategy and business needs; and
enable investors to evaluate the merits, performance, and future prospects of each company’s businesses and to invest in each company separately based on these distinct characteristics.

Arcosa may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (a) the spin-off will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Arcosa’s business; (b) following the spin-off, Arcosa’s stock price may be more susceptible to market fluctuations and other events particular to one or more of Arcosa’s products than if it were still a part of Trinity and (c) following the spin-off, Arcosa’s operational and financial profile will change such that Arcosa’s diversification of revenue sources will diminish, and Arcosa’s results of operations, cash flows, working capital, and financing requirements may be subject to increased volatility than prior to the spin-off. Additionally, Arcosa may experience unanticipated competitive developments, including changes in the conditions of Arcosa’s infrastructure-related businesses’ markets that could negate the expected benefits from the spin-off. If Arcosa does not realize some or all of the benefits expected to result from the spin-off, or if such benefits are delayed, the business, financial condition, results of operations, and cash flows of Arcosa could be adversely affected.

Arcosa has no history operating as an independent, publicly-traded company, and Arcosa’s historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly-traded company and therefore may not be a reliable indicator of its future results.

Arcosa is being spun-off from Trinity, its parent company, and has no operating history as an independent, publicly-traded company. The historical information about Arcosa in this information statement refers to Arcosa’s business as part of Trinity. Arcosa’s historical and pro forma financial information included in this information statement is derived from the combined financial statements and accounting records of Trinity. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations, or cash flows that Arcosa would have achieved as a separate, publicly-traded company during the periods presented or those that Arcosa will achieve in the future primarily as a result of the factors described below:

Arcosa will need to make significant investments to replicate or outsource certain systems, infrastructure and functional expertise after its spin-off from Trinity. These initiatives to develop Arcosa’s independent ability to operate without access to Trinity’s existing operational and administrative infrastructure will be costly to implement. Arcosa may not be able to operate its business efficiently or at comparable costs, and its profitability may decline; and

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Arcosa has relied upon Trinity for working capital requirements and other cash requirements, including in connection with Arcosa’s previous acquisitions. Subsequent to the spin-off, Trinity will not be providing Arcosa with funds to finance Arcosa’s working capital or other cash requirements. After the spin-off, Arcosa’s access to and cost of debt financing may be different from the historical access to and cost of debt financing under Trinity. Differences in access to and cost of debt financing may result in differences in the interest rate charged to Arcosa on financings, as well as the amounts of indebtedness, types of financing structures, and debt markets that may be available to Arcosa, which could have an adverse effect on Arcosa’s business, financial condition, results of operations, and cash flows.

For additional information about the past financial performance of Arcosa’s business and the basis of presentation of the historical combined financial statements and the unaudited pro forma combined financial statements of Arcosa’s business, see the sections entitled “Unaudited Pro Forma Combined Financial Statements,” “Selected Historical Combined Financial Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the Audited Annual Combined Financial Statements and accompanying Notes, and the Unaudited Interim Combined Financial Statements and accompanying Notes included elsewhere in this information statement.

Trinity may fail to perform under various transaction agreements that will be executed as part of the spin-off or Arcosa may fail to have necessary systems and services in place when Trinity is no longer obligated to provide services under the various agreements.

Arcosa and Trinity will enter into certain agreements, such as the separation and distribution agreement, a transition services agreement, and those other agreements discussed in greater detail in the section entitled “Certain Relationships and Related Person Transactions—Agreements with Trinity,” which may provide for the performance by each company for the benefit of the other for a period of time after the spin-off. If Trinity is unable to satisfy its obligations under these agreements, including its indemnification obligations, Arcosa could incur operational difficulties or losses.

If Arcosa does not have in place its own systems and services, and does not have agreements with other providers of these services when the transitional or other agreements terminate, or if Arcosa does not implement the new systems or replace Trinity’s services successfully, Arcosa may not be able to operate its business effectively, which could disrupt its business and have a material adverse effect on its business, financial condition, and results of operations. These systems and services may also be more expensive to install, implement and operate, or less efficient than the systems and services Trinity is expected to provide during the transition period.

Potential indemnification liabilities to Trinity pursuant to the separation and distribution agreement could materially and adversely affect Arcosa’s business, financial condition, results of operations, and cash flows.

The separation and distribution agreement, among other things, provides for indemnification obligations designed to make Arcosa financially responsible for certain liabilities that may exist relating to its business activities. If Arcosa is required to indemnify Trinity under the circumstances set forth in the separation and distribution agreement, Arcosa may be subject to substantial liabilities.

Arcosa may be subject to certain contingent liabilities of Trinity following the spin-off.

After the spin-off, there is the possibility that certain liabilities of Trinity could become Arcosa’s obligations. For example, under the Code and the related rules and regulations, each corporation that was a member of the Trinity United States consolidated group during a taxable period or portion of a taxable period ending on or before the effective time of the distribution is jointly and severally liable for the United States federal income tax liability of the entire Trinity United States consolidated group for that taxable period. Consequently, if Trinity is unable to pay the consolidated United States federal income tax liability for a prior period, Arcosa could be required to pay the entire amount of such tax which could be substantial and in excess of the amount allocated to it under the tax matters agreement between it and Trinity. For a discussion of the tax matters agreement, see the section entitled “Certain Relationships and Related Person Transactions—Agreements with Trinity—Tax Matters Agreement”. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans as well as other contingent liabilities.

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In connection with Arcosa’s spin-off from Trinity, Trinity will indemnify Arcosa for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure Arcosa against the full amount of such liabilities, or that Trinity’s ability to satisfy its indemnification obligation will not be impaired in the future.

Trinity will agree to indemnify Arcosa for certain pre-spin-off liabilities as discussed further in “Certain Relationships and Related Person Transactions—Agreements with Trinity”. However, third parties could also seek to hold Arcosa responsible for liabilities that Trinity has agreed to retain, and there can be no assurance that the indemnity from Trinity will be sufficient to protect Arcosa against the full amount of such liabilities, or that Trinity will be able to fully satisfy its indemnification obligations. In addition, Trinity’s insurers may attempt to deny coverage to Arcosa for liabilities associated with certain occurrences of indemnified liabilities prior to the spin-off.

If the distribution of shares of Arcosa, together with certain related transactions, does not qualify as a transaction that is generally tax-free for United States federal income tax purposes, you and Trinity could be subject to significant tax liability and, in certain circumstances, Arcosa could be required to indemnify Trinity for material taxes pursuant to indemnification obligations under the tax matters agreement.

It is a condition to the distribution of shares of Arcosa that Trinity receives (i) a private letter ruling from the IRS and (ii) an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. Trinity has received the private letter ruling from the IRS. The IRS ruling relies, and the tax opinions will rely on certain facts, assumptions, representations, and undertakings from Trinity and Arcosa, including those regarding the past and future conduct of the companies’ respective businesses and other matters, and the tax opinions will rely on the IRS ruling. Notwithstanding the IRS ruling and the tax opinions, the IRS could determine that the distribution or any such related transaction is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated, or that the distribution should be taxable for other reasons, including if the IRS were to disagree with the conclusions in the tax opinions that are not covered by the IRS ruling. For more information regarding the IRS ruling and the tax opinions, see the section entitled “Material United States Federal Income Tax Consequences of the Distribution”.

If the distribution is determined to be taxable for United States federal income tax purposes, a stockholder of Trinity that has received shares of Arcosa common stock in the distribution would be treated as having received a distribution of property in an amount equal to the fair value of such Arcosa shares on the distribution date and could incur significant income tax liabilities. Such distribution would be taxable to such stockholder as a dividend to the extent of Trinity’s current and accumulated earnings and profits, including Trinity’s taxable gain, if any, on the distribution. Any amount that exceeded Trinity’s earnings and profits would be treated first as a non-taxable return of capital to the extent of such stockholder’s tax basis in its shares of Trinity stock, with any remaining amount being taxed as capital gain. Trinity would recognize a taxable gain in an amount equal to the excess, if any, of the fair market value of the shares of Arcosa common stock held by Trinity on the distribution date over Trinity’s tax basis in such shares.

Under the tax matters agreement between Trinity and Arcosa, Arcosa would generally be required to indemnify Trinity against any taxes imposed on Trinity that arise from the failure of the distribution to qualify as tax-free for United States federal income tax purposes within the meaning of Section 355 of the Code or the failure of certain related transactions to qualify for tax-free treatment, to the extent such failure to qualify is attributable to actions, events or transactions relating to Arcosa’s stock, assets or business or any breach of Arcosa’s representations, covenants or obligations under the tax matters agreement (or any other agreement Arcosa enters into in connection with the separation and distribution), the materials submitted to the IRS in connection with the request for the IRS ruling or the representation letters provided by Arcosa in connection with the tax opinions. Events triggering an indemnification obligation under the tax matters agreement include events occurring after the distribution that cause Trinity to recognize a gain under Section 355(e) of the Code, described in the section entitled “Material United States Federal Income Tax Consequences of the Distribution”. Such tax amounts could be significant, and Arcosa’s obligations under the tax matters agreement will not be limited by amount or subject to any cap. For more information, see the section entitled “Certain Relationships and Related Person Transactions—Agreements with Trinity—Tax Matters Agreement”. If Arcosa is required to indemnify Trinity under the circumstances set forth above or otherwise under the tax matters agreement, Arcosa may be subject to substantial liabilities, which could materially adversely affect its financial position.

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Arcosa may not be able to engage in certain corporate transactions after the spin-off.

To preserve the tax-free treatment to Trinity and its stockholders of the distribution and certain related transactions, under the tax matters agreement that Arcosa will enter into with Trinity, Arcosa will be restricted from taking any action following the distribution that prevents the distribution and related transactions from being tax-free for United States federal income tax purposes. Under the tax matters agreement, for the two-year period following the distribution, Arcosa will be prohibited, except in certain circumstances, from:

entering into any transaction resulting in the acquisition of 40 percent or more of its stock or substantially all of its assets, whether by merger or otherwise;
merging, consolidating, or liquidating;
issuing equity securities beyond certain thresholds;
repurchasing its capital stock unless certain condition are met; and
ceasing to actively conduct its business.

These restrictions may limit Arcosa’s ability to pursue certain strategic transactions or other transactions that it may believe to be in the best interests of its stockholders or that might increase the value of its business. In addition, under the tax matters agreement, Arcosa will be required to indemnify Trinity against any such tax liabilities as a result of the acquisition of Arcosa’s stock or assets, even if Arcosa did not participate in or otherwise facilitate the acquisition. For more information, see the section entitled “Certain Relationships and Related Person Transactions—Agreements with Trinity—Tax Matters Agreement”.

The spin-off and related internal restructuring transactions may expose Arcosa to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.

The spin-off could be challenged under various state and federal fraudulent conveyance laws. Fraudulent conveyances or transfers are generally defined to include transfers made or obligations incurred with the actual intent to hinder, delay, or defraud current or future creditors or transfers made or obligations incurred for less than reasonably equivalent value when the debtor was insolvent, or that rendered the debtor insolvent, inadequately capitalized or unable to pay its debts as they become due. An unpaid creditor or an entity acting on behalf of a creditor (including, without limitation, a trustee or debtor-in-possession in a bankruptcy by Trinity or Arcosa or any of their respective subsidiaries) may bring a lawsuit alleging that the spin-off or any of the related transactions constituted a constructive fraudulent conveyance. If a court accepts these allegations, it could impose a number of remedies, including, without limitation, voiding the distribution and returning Arcosa’s assets or Arcosa’s shares and subject Trinity and/or Arcosa to liability.

The distribution of Arcosa common stock is also subject to state corporate distribution statutes. Under Delaware General Corporation Law (“DGCL”), a corporation may only pay dividends to its stockholders either (i) out of its surplus (net assets minus capital) or (ii) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Although Trinity intends to make the distribution of Arcosa common stock entirely out of surplus, Arcosa or Trinity cannot ensure that a court would reach the same conclusion in determining the availability of surplus for the separation and the distribution to Trinity’s stockholders.

After the spin-off, certain of Arcosa’s executive officers and directors may have actual or potential conflicts of interest because of their previous positions at Trinity.

Because of their current or former positions with Trinity, certain of Arcosa’s expected executive officers and directors own equity interests in Trinity. Following the spin-off, even though Arcosa’s Board of Directors will consist of a majority of directors who are independent, and Arcosa’s expected executive officers who are currently employees of Trinity will cease to be employees of Trinity upon the spin-off, some of Arcosa’s executive officers and directors will continue to have a financial interest in shares of Trinity common stock. Continuing ownership of shares of Trinity common stock and equity awards could create, or appear to create, potential conflicts of interest if Arcosa and Trinity pursue the same corporate opportunities or face decisions that could have different implications for Trinity and Arcosa.

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Arcosa may have received better terms from unaffiliated third parties than the terms it will receive in its agreements with Trinity.

The agreements Arcosa will enter into with Trinity in connection with the spin-off, including the separation and distribution agreement, transition services agreement, tax matters agreement, intellectual property matters agreement, and employee matters agreement were prepared in the context of Arcosa’s spin-off from Trinity while Arcosa was still a wholly-owned subsidiary of Trinity. Accordingly, during the period in which the terms of those agreements were prepared, Arcosa did not have a board of directors or management team that was independent of Trinity. While the parties believe the terms reflect arm’s-length terms, there can be no assurance that Arcosa would not have received better terms from unaffiliated third parties than the terms it will receive in its agreements with Trinity. For more information, see the section entitled “Certain Relationships and Related Person Transactions—Agreements with Trinity”.

Some contracts and other assets which will need to be transferred or assigned from Trinity or its affiliates to Arcosa in connection with Arcosa’s spin-off from Trinity may require the consent or involvement of a third party. If such consent is not given, Arcosa may not be entitled to the benefit of such contracts and other assets in the future, which could negatively impact Arcosa’s financial condition and future results of operations.

The separation and distribution agreement and various local transfer agreements provide that in connection with Arcosa’s spin-off from Trinity, a number of contracts with third-parties and other assets are to be transferred or assigned from Trinity or its affiliates to Arcosa. However, the transfer or assignment of certain of these contracts or assets may require providing guarantees or the consent of a third party to such a transfer or assignment. Similarly, in some circumstances, Arcosa and another business unit of Trinity are joint beneficiaries of contracts, and Arcosa will need to enter into a new agreement with the third-party to replicate the existing contract or assign the portion of the existing contract related to the Arcosa business. It is possible that some parties may use the requirement of a guarantee or consent or the fact that the spin-off is occurring to seek more favorable contractual terms from Arcosa or to seek to terminate the contract. If Arcosa is unable to provide a guarantee or obtain such consents on commercially reasonable and satisfactory terms or if the contracts are terminated, Arcosa may be unable to obtain some of the benefits, assets, and contractual commitments which are intended to be allocated to Arcosa as part of Arcosa’s spin-off from Trinity. The failure to timely complete the assignment of existing contracts or assets, or the negotiation of new arrangements, or a termination of any of those arrangements, could negatively impact Arcosa’s financial condition and future results of operations. In addition, where Arcosa does not intend to provide a guarantee or obtain consent from third party counterparties based on Arcosa’s belief that no guarantee or consent is required, the third party counterparties may challenge a transfer of assets on the basis that the terms of the applicable commercial arrangements require that a guarantee be provided or the third party counterparty’s consent. Arcosa may incur substantial litigation and other costs in connection with any such claims and, if Arcosa does not prevail, Arcosa’s ability to use these assets could be adversely impacted.

The degree to which Arcosa could incur indebtedness or could be leveraged following completion of the distribution may have a material adverse effect on Arcosa’s business, financial condition or results of operations and cash flows.

Arcosa has historically relied upon Trinity for working capital requirements and other cash requirements. After the distribution, Arcosa will not be able to rely on the earnings, assets or cash flow of Trinity and Trinity will not provide funds to finance Arcosa’s working capital or other cash requirements. As a result, after the distribution, Arcosa will be responsible for servicing its own debt and obtaining and maintaining sufficient working capital and other funds to satisfy its cash requirements. After the spin-off, Arcosa’s access to and cost of debt financing may be different from the historical access to and cost of debt financing under Trinity. Differences in access to and cost of debt financing may result in differences in the interest rate charged to Arcosa on financings, as well as the amounts of indebtedness, types of financing structures, and debt markets that may be available to Arcosa.

Arcosa’s ability to make payments on and to refinance any indebtedness, if applicable, will depend on Arcosa’s ability to generate cash in the future from operations, financings or asset sales. Arcosa’s ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond Arcosa’s control. If Arcosa is not able to repay or refinance its debt as it becomes due, Arcosa may be forced to sell assets or take other disadvantageous actions. In addition, Arcosa’s ability to withstand competitive pressures and to react to changes in Arcosa’s industry could be impaired. The lenders who hold such debt could also potentially accelerate amounts due, which could potentially trigger a default or acceleration of any of Arcosa’s other debt.

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In addition, Arcosa may incur debt or raise additional capital following the distribution. If Arcosa’s cash flow from operations is less than it anticipates, or if Arcosa’s cash requirements are more than it expects, Arcosa may require more financing. However, debt or equity financing may not be available to Arcosa on terms acceptable to Arcosa, if at all. If Arcosa incurs additional debt or raises equity through the issuance of preferred stock, the terms of the debt or preferred stock issued may give the holders rights, preferences, and privileges senior to those of holders of Arcosa common stock, particularly in the event of liquidation. The terms of the debt may also impose additional and more stringent restrictions on Arcosa’s operations than it currently has. If Arcosa raises funds through the issuance of additional equity, your percentage ownership in Arcosa would be diluted. If Arcosa is unable to raise additional capital when needed, it could affect Arcosa’s financial condition, which could negatively affect your investment in Arcosa.

Following the spin-off, the value of your common stock in: (a) Trinity and (b) Arcosa may collectively trade at an aggregate price less than what Trinity’s common stock might trade at had the spin-off not occurred.

The common stock of: (a) Trinity and (b) Arcosa that you may hold following the spin-off may collectively trade at a value less than the price at which Trinity’s common stock might have traded had the spin-off not occurred. Reasons for this potential difference include the future performance of either Trinity or Arcosa as separate, independent companies, and the future stockholder base and market for Trinity’s common stock and those of Arcosa and the prices at which these shares individually trade.

Until the distribution occurs, Trinity has the sole discretion to change the terms of the distribution in ways which may be unfavorable to Arcosa.

Completion of the spin-off will be contingent upon customary closing conditions, including, among other things, finalization of the entity structure of Arcosa, finalization of the capital structure of the two companies, the effectiveness of appropriate filings with the SEC and final approval from Trinity’s Board of Directors. Until the distribution occurs, Trinity will have the sole and absolute discretion to determine and change the terms of the distribution, including the establishment of the record date and distribution date, the conditions to the spin-off, and all other terms. These changes could be unfavorable to Arcosa. In addition, Trinity may decide at any time not to proceed with the spin-off.

Risks Related to Arcosa Common Stock

Arcosa cannot be certain that an active trading market for its common stock will develop or be sustained after the spin-off and, following the distribution, Arcosa’s stock price may fluctuate significantly.

A public market for Arcosa common stock does not currently exist. Arcosa expects that on or about the record date, trading of shares of its common stock will begin on a “when-issued” basis on the NYSE, or a comparable public market, and will continue through the distribution date. However, Arcosa cannot guarantee that an active trading market will develop or be sustained for its common stock after the spin-off. Nor can Arcosa predict the prices at which shares of its common stock may trade after the spin-off.

Similarly, Arcosa cannot predict the effect of the spin-off on the trading prices of its common stock. After the spin-off, Trinity common stock will continue to be listed and traded on the NYSE under the symbol “TRN”. Subject to the consummation of the spin-off, Arcosa expects the Arcosa common stock to be listed and traded on the NYSE under the symbol “ACA”. The combined trading prices of Trinity common stock and Arcosa common stock after the separation, as adjusted for any changes in the combined capitalization of these companies, may not be equal to or greater than the trading price of Trinity common stock prior to the spin-off. Until the market has fully evaluated the business of Trinity without the Arcosa businesses, or fully evaluated Arcosa, the price at which Trinity or Arcosa common stock trades may fluctuate significantly.

The market price of Arcosa common stock may fluctuate significantly due to a number of factors, some of which may be beyond Arcosa’s control, including:

Arcosa’s business profile, market capitalization, or capital allocation policies may not fit the investment objectives of Trinity’s current stockholders, causing a shift in Arcosa’s investor base and Arcosa common stock may not be included in some indices in which Trinity common stock is included, causing certain holders to sell their shares;
Arcosa’s quarterly or annual earnings, or those of other companies in its industry;

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the failure of securities analysts to cover Arcosa common stock after the spin-off;
actual or anticipated fluctuations in Arcosa’s operating results;
changes in earnings estimates by securities analysts or Arcosa’s ability to meet those estimates;
Arcosa’s ability to meet its forward looking guidance;
the operating and stock price performance of other comparable companies;
overall market fluctuations and domestic and worldwide economic conditions; and
other factors described in these “Risk Factors” and elsewhere in this information statement.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. Broad market and industry factors may materially harm the market price of Arcosa’s common stock, regardless of Arcosa’s operating performance. In the past, following periods of volatility in the market price of a company’s securities, shareholder derivative lawsuits and/or securities class action litigation has often been instituted against that company. Such litigation, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources.

In addition, investors may have difficulty accurately valuing Arcosa common stock. Investors often value companies based on the stock prices and results of operations of other comparable companies. Investors may find it difficult to find comparable companies and to accurately value Arcosa common stock, which may cause the trading price of Arcosa common stock to fluctuate.

A number of shares of Arcosa common stock are or will be eligible for future sale, which may cause Arcosa’s stock price to decline.

Any sales of substantial amounts of shares of Arcosa common stock in the public market or the perception that such sales might occur, in connection with the distribution or otherwise, may cause the market price of Arcosa common stock to decline. Upon completion of the distribution, Arcosa expects that it will have an aggregate of approximately 48.8 million shares of its common stock issued and outstanding based upon approximately 146.5 million shares of Trinity common stock outstanding as of September 24, 2018. These shares will be freely tradeable without restriction or further registration under the United States Securities Act of 1933, as amended (the “Securities Act”), unless the shares are owned by one of Arcosa’s “affiliates,” as that term is defined in Rule 405 under the Securities Act.

Arcosa is unable to predict whether large amounts of its common stock will be sold in the open market following the distribution. Arcosa is also unable to predict whether a sufficient number of buyers would be in the market at that time. A portion of Trinity common stock is held by index funds tied to stock indices. If Arcosa is not included in these indices at the time of distribution, these index funds may be required to sell Arcosa common stock.

Arcosa cannot guarantee the timing, amount, or payment of dividends on its common stock.

The timing, declaration, amount, and payment of future dividends to Arcosa’s stockholders will fall within the discretion of Arcosa’s Board of Directors. The Board of Directors’ decisions regarding the payment of dividends will depend on many factors, such as Arcosa’s financial condition, earnings, capital requirements, debt service obligations, industry practice, legal requirements, regulatory constraints, and other factors that the Board of Directors deems relevant. For more information, see the section entitled “Dividend Policy”. Arcosa’s ability to pay dividends will depend on its ongoing ability to generate cash from operations and access to the capital markets. Arcosa cannot guarantee that it will pay a dividend in the future or continue to pay any dividend if Arcosa commences paying dividends.

Your percentage of ownership in Arcosa may be diluted in the future.

Your percentage ownership in Arcosa may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including, without limitation, equity awards that Arcosa will be granting to its directors, officers, and employees.

In addition, Arcosa’s restated certificate of incorporation will authorize Arcosa to issue, without the approval of Arcosa’s stockholders, one or more classes or series of preferred stock having such designation, powers, preferences, and relative, participating, optional and other special rights, including preferences over Arcosa common stock

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respecting dividends and distributions, as Arcosa’s Board of Directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of Arcosa common stock. For example, Arcosa could grant the holders of preferred stock the right to elect some number of Arcosa’s directors in all events or on the happening of specified events or to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences Arcosa could assign to holders of preferred stock could affect the residual value of Arcosa common stock. See the section entitled “Description of Arcosa’s Capital Stock”.

Certain provisions in Arcosa’s restated certificate of incorporation and amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of Arcosa, which could decrease the trading price of the common stock.

Arcosa’s restated certificate of incorporation and amended and restated bylaws will contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with Arcosa’s Board of Directors rather than to attempt a hostile takeover. These provisions are expected to include, among others:

rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
the right of Arcosa’s Board of Directors to issue preferred stock without stockholder approval;
the ability of Arcosa’s directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of the Board of Directors) on Arcosa’s Board of Directors;
the initial division of Arcosa’s Board of Directors into three classes of directors, with each class serving a staggered term; and
a provision that directors serving on a classified board may be removed by stockholders only for cause.

In addition, following the distribution, Arcosa will be subject to Section 203 of the DGCL. Section 203 provides that, subject to limited exceptions, persons that (without prior board approval) acquire, or are affiliated with a person that acquires, more than 15 percent of the outstanding voting stock of a Delaware corporation shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliate becomes the holder of more than 15 percent of the corporation’s outstanding voting stock.

Arcosa believes these provisions will protect its stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with Arcosa’s Board of Directors and by providing Arcosa’s Board of Directors with more time to assess any acquisition proposal. These provisions are not intended to make Arcosa immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that Arcosa’s Board of Directors determines is not in the best interests of Arcosa and its stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

In addition, an acquisition or further issuance of Arcosa’s stock could trigger the application of Section 355(e) of the Code. For a discussion of Section 355(e), see the section entitled “Material United States Federal Income Tax Consequences of the Distribution”. Under the tax matters agreement, Arcosa would be required to indemnify Trinity for the tax imposed under Section 355(e) of the Code resulting from an acquisition or issuance of Arcosa stock, even if Arcosa did not participate in or otherwise facilitate the acquisition, and this indemnity obligation might discourage, delay or prevent a change of control that you may consider favorable.

Arcosa's restated certificate of incorporation and bylaws will contain exclusive forum provisions that could limit an Arcosa stockholder’s ability to choose a judicial forum that it finds favorable for certain disputes with Arcosa or its directors, officers, stockholders, employees or agents, and may discourage lawsuits with respect to such claims.

Arcosa’s restated certificate of incorporation will provide that unless the Board of Directors otherwise determines, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Arcosa, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder, employee or agent of Arcosa to Arcosa or Arcosa’s stockholders, (iii) any action

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asserting a claim against Arcosa or any director, officer, stockholder, employee or agent of Arcosa arising out of or relating to any provision of the DGCL or Arcosa’s restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against Arcosa or any director, officer, stockholder, employee or agent of Arcosa governed by the internal affairs doctrine, in all cases subject to the court having subject matter jurisdiction and personal jurisdiction over an indispensable party named as a defendant. These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for such disputes and may discourage these types of lawsuits. Alternatively, if a court were to find the exclusive forum provisions inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, Arcosa may incur additional costs associated with resolving such matters in other jurisdictions.

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FORWARD-LOOKING STATEMENTS

This information statement and other materials Trinity and Arcosa have filed or will file with the SEC contain, or will contain, 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. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should” and similar expressions generally 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 Arcosa’s business products and services;
the cyclical nature of the industries in which Arcosa competes;
variations in weather in areas where Arcosa construction products are sold, used or installed;
naturally-occurring events and disasters causing disruption to our manufacturing, product deliveries and production capacity, thereby giving rise to an increase in expenses, loss of revenue, and property losses;
the timing of introduction of new products;
the timing and delivery of customer orders or a breach of customer contracts;
the credit worthiness of customers and their access to capital;
product price changes;
changes in mix of products sold;
the costs incurred to align manufacturing capacity with demand and the extent of its utilization;
the operating leverage and efficiencies that can be achieved by Arcosa 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;
taxes;
the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico;
changes in import and export quotas and regulations;
business conditions in emerging economies;
costs and results of litigation;
changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;
legal, regulatory, and environmental issues, including compliance of Arcosa products with mandated specifications, standards or testing criteria and obligations to remove and replace Arcosa products following installation or to recall our products and install different products manufactured by Arcosa or its competitors;

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actions by the executive and legislative branches of the United States government relative to federal government budgeting, taxation policies, government expenditures, United States borrowing/debt ceiling limits, and trade policies;
the use of social or digital media to disseminate false, misleading, and/or unreliable or inaccurate information;
the inability to sufficiently protect our intellectual property rights;
if the proposed spin-off transaction is not completed;
if the Arcosa does not realize some or all of the benefits expected to result from the spin-off, or if such benefits are delayed;
Arcosa’s ongoing businesses may be adversely affected and subject to certain risks and consequences as a result of pursuing the spin-off transaction;
if the distribution of shares of Arcosa, together with certain related transactions, does not qualify as a transaction that is generally tax-free for United States federal income tax purposes, stockholders and Arcosa could be subject to significant tax liability; and
if the spin-off transaction does not comply with state and federal fraudulent conveyance laws and legal dividend requirements.

In particular, information included under the sections entitled “Information Statement Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “The Separation and Distribution” contain forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made. Neither Trinity nor Arcosa undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, except as required by applicable federal securities laws. Factors that could cause actual results or events to differ materially from those anticipated include the matters described under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

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THE SEPARATION AND DISTRIBUTION

General

Trinity intends to distribute 100 percent of the shares of our common stock held by Trinity to holders of shares of Trinity common stock, subject to certain conditions. The distribution of our common stock is expected to take place on or about November 1, 2018. On the distribution date, each holder of Trinity common stock will receive one share of Arcosa common stock for every three shares of Trinity common stock held as of 5:00 p.m. local New York City time on October 17, 2018, the record date, as described below. You will not be required to make any payment, surrender or exchange your Trinity common stock or take any other action to receive your shares of Arcosa common stock to which you are entitled on the distribution date.

The distribution of our common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. We cannot provide any assurances that the distribution will be completed. For a more detailed description of these conditions, see the section entitled “Conditions to the Distribution” below.

Reasons for the Spin-Off

The Trinity Board of Directors believes that separating the Arcosa business from the remainder of Trinity is in the best interests of Trinity and its stockholders for a number of reasons, including:

Enhances Overall Growth Potential through Focused Companies—Trinity believes that both the long-term growth potential and overall valuation of its businesses will be enhanced as a result of separating its current portfolio of business into two independent companies. Trinity believes Trinity and Arcosa will each enhance their competitive positions as standalone companies focused on their respective industries.
Enables Each Company to Optimize Balance Sheet and Capital Allocation Priorities—Each company plans to pursue distinct investment decisions with capital structures based on their needs and potential opportunities, and will be able to create value by allocating capital to the alternatives that achieve the best returns for their respective stockholders.
Allows Businesses to Advance Differentiated Investment Theses—Each company will be positioned to focus attention on independent and unique investment theses. Each company will be tied to different demand drivers, which will allow investors to model each company independently, evaluate the inherent value of each company, and invest accordingly.

Trinity’s Board of Directors also considered potentially negative factors in evaluating the spin-off, including risks relating to the creation of a new public company, possible increased administrative costs and one-time separation costs, but concluded that the potential benefits of the spin-off outweighed these factors. The anticipated benefits of the spin-off are based on a number of assumptions, and there can be no assurance that such benefits will materialize to the extent anticipated, or at all. In the event the spin-off does not result in such benefits, the costs associated with the spin-off could have an adverse effect on each company individually and in the aggregate. For more information, see the sections entitled “Risk Factors” included elsewhere in this information statement.

Formation of a Holding Company Prior to the Distribution

In connection with and prior to the distribution, Trinity formed Arcosa as a Delaware corporation on April 26, 2018 for the purpose of transferring to Arcosa assets and liabilities, including any entities holding assets and liabilities, associated with Trinity’s infrastructure-related businesses.

Reasons for Furnishing this Information Statement

This information statement is being furnished solely to provide information to Trinity stockholders who are entitled to receive shares of our common stock in the distribution. The information statement is not, and is not to be construed as, an inducement or encouragement to buy, hold or sell any of our securities or securities of Trinity. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither Trinity nor we undertake any obligation to update such information, except as required by applicable federal securities laws.

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Conditions to the Distribution

The distribution of our common stock by Trinity is subject to the satisfaction of the following conditions:

The SEC will have declared effective the registration statement of which this information statement forms a part, and no stop order relating to the registration statement will be in effect.
The NYSE, or a comparable public market, will have approved the listing of Arcosa common stock, subject to official notice of issuance.
Trinity will have received a private letter ruling from the IRS, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. Trinity has received the private letter ruling from the IRS.
Trinity will have received an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code.
All permits, registrations and consents required under the securities or blue sky laws of states or other political subdivisions of the United States or of foreign jurisdictions in connection with the distribution will have been received.
No order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions will be in effect.
The reorganization of the Trinity and Arcosa businesses prior to the separation and distribution will have been effectuated.
No events or developments shall have occurred or exist that, in the sole and absolute judgment of the Trinity Board of Directors, make it inadvisable to effect the distribution or would result in the distribution and related transactions not being in the best interest of Trinity or its stockholders.

Trinity and Arcosa cannot assure you that any or all of these conditions will be met, and Trinity may also waive conditions to the distribution. Trinity may decline at any time to go forward with the distribution, whether or not the conditions are satisfied.

The Number of Shares You Will Receive

For every three common shares of Trinity that you owned as of 5:00 p.m. local New York City time on October 17, 2018, the record date, you will receive one Arcosa common share on or about November 1, 2018, the distribution date.

Transferability of Shares You Receive

Shares of Arcosa common stock distributed to holders in connection with the distribution will be transferable without registration under the Securities Act, except for shares received by persons who may be deemed to be Arcosa affiliates. Persons who may be deemed to be Arcosa affiliates after the distribution generally include individuals or entities that control, are controlled by or are under common control with Arcosa, which may include certain of Arcosa executive officers, directors, or principal stockholders. Securities held by Arcosa affiliates will be subject to resale restrictions under the Securities Act. Arcosa affiliates will be permitted to sell shares of Arcosa common stock only pursuant to an effective registration statement or an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144 under the Securities Act.

When and How You Will Receive the Distributed Shares

Trinity expects to distribute the shares of Arcosa common stock on or about November 1, 2018, the distribution date. American Stock Transfer & Trust Company will serve as distribution agent and registrar for our common stock and as distribution agent in connection with the distribution.

If you own shares of Trinity common stock as of 5:00 p.m. local New York City time on the record date, Trinity, with the assistance of American Stock Transfer & Trust Company, will electronically distribute shares of Arcosa common

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stock to your bank or brokerage firm on your behalf or through the systems of the DTC (if you hold the shares through a bank or brokerage firm that uses DTC) or to you in book-entry form and the distribution agent or the transfer agent will mail you a book-entry account statement that reflects your shares of Arcosa.

Most Trinity stockholders hold their shares of common stock through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold your shares of Trinity common stock through a bank or brokerage firm, your bank or brokerage firm will credit your account for the shares of Arcosa common stock that you are entitled to receive in the distribution. If you have any questions concerning the mechanics of having shares held in “street name,” we encourage you to contact your bank or brokerage firm.

If you sell shares of Trinity common stock in the “regular-way” market up to and including the distribution date, you will be selling your right to receive shares of Arcosa common stock in the distribution.

General Treatment of Fractional Shares of Common Stock

Trinity will not distribute any fractional common stock shares to its stockholders. Instead, the transfer agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate cash proceeds (net of discounts and commissions) of the sales pro rata (based on the fractional shares such holder would otherwise be entitled to receive) to each holder who otherwise would have been entitled to receive a fractional share of common stock in the distribution. The transfer agent, in its sole discretion, without any influence by Trinity or us, will determine when, how, through which broker-dealer, and at what price to sell the whole shares. Any broker-dealer used by the transfer agent will not be an affiliate of either Trinity or us. Neither we nor Trinity will be able to guarantee any minimum sale price in connection with the sale of these shares. Recipients of cash in lieu of fractional shares of common stock will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

The aggregate net cash proceeds of these sales will be taxable for United States federal income tax purposes. For an explanation of the material United States federal income tax consequences of the distribution, see the section entitled “Material United States Federal Income Tax Consequences of the Distribution”. If you are the registered holder of shares of Trinity common stock, you will receive a check from the distribution agent in an amount equal to your pro-rata share of the aggregate net cash proceeds of the sale. If you hold your shares of Trinity common stock through a bank or brokerage firm, your bank or brokerage firm will receive, on your behalf, your pro-rata share of the aggregate net cash proceeds of the sales and will electronically credit your account for your share of such proceeds.

Results of the Distribution

Immediately following the distribution, Arcosa will be a separate, publicly traded company, and we expect to have approximately 48.8 million shares of our common stock outstanding. The actual number of shares to be distributed will be determined after October 17, 2018, the record date of the distribution. The distribution will not affect the number of outstanding shares of Trinity common stock. No fractional shares of Arcosa common stock will be distributed.

Market for Arcosa Common Stock

There is currently no public market for our common stock. A condition to the distribution is the listing of our common stock shares on the NYSE. We intend to apply to list our common stock on the NYSE under the symbol “ACA”. We have not and will not set the initial price of shares of our common stock. The initial price will be established by the public markets.

We cannot predict the price at which shares of our common stock will trade after the distribution. In fact, the combined trading prices, after the spin-off, of shares of our common stock that each Trinity stockholder will receive in the distribution and the shares of common stock of Trinity held at the record date may not equal the “regular-way” trading price of a Trinity share immediately prior to completion of the spin-off. The price at which shares of our common stock trade may fluctuate significantly, particularly until an orderly public market develops. Trading prices for our common stock will be determined in the public markets and may be influenced by many factors.

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Trading Between the Record Date and the Distribution Date

Beginning on or shortly before the record date and continuing up to and including the distribution date, Trinity expects that there will be two markets in Trinity common stock: a “regular-way” market and an “ex-distribution” market. Shares of Trinity common stock that trade on the “regular-way” market will trade with an entitlement to shares of Arcosa common stock distributed pursuant to the distribution. Shares of Trinity common stock that trade on the “ex-distribution” market will trade without an entitlement to shares of Arcosa common stock distributed pursuant to the distribution. Each stockholder trading in Trinity shares would make any decision as to whether to trade one or more of such stockholder’s shares in Trinity in the “regular-way” market or the “ex-distribution” market. If you sell shares of Trinity common stock in the “regular-way” market up to and including through the distribution date, you will be selling your right to receive shares of Arcosa common stock in the distribution. If you own shares of Trinity common stock as of 5:00 p.m. local New York City time on the record date and sell those shares on the “ex-distribution” market up to and including through the distribution date, you will receive the shares of Arcosa common stock that you are entitled to receive pursuant to your ownership as of the record date of Trinity common stock shares.

Furthermore, beginning on or shortly before the record date and continuing up to and including the distribution date, we expect that there will be a “when-issued” market in our common stock. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for our common stock that will be distributed to holders of Trinity common stock on the distribution date. If you own shares of Trinity common stock as of 5:00 p.m. local New York City time on the record date, you will be entitled to shares of our common stock distributed pursuant to the distribution. You may trade this entitlement to our shares, without the Trinity shares you own, on the “when-issued” market. On the first trading day following the distribution date, “when-issued” trading with respect to our common stock will end, and “regular-way” trading will begin.

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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION

The following is a summary of the material United States federal income tax consequences to Trinity and to the holders of shares of Trinity common stock in connection with the distribution. This summary is based on the Code, the Treasury Regulations promulgated thereunder and judicial and administrative interpretations thereof, all as in effect as of the date of this information statement and all of which are subject to differing interpretations and may change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below. This summary assumes that the separation will be consummated in accordance with the separation and distribution agreement and as described in this information statement.

Except as specifically described below, this summary is limited to holders of shares of Trinity common stock that are United States Holders, as defined immediately below. For purposes of this summary, a United States Holder is a beneficial owner of Trinity common stock that is, for United States federal income tax purposes:

an individual who is a citizen or a resident of the United States;
a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia;
an estate, the income of which is subject to United States federal income taxation regardless of its source; or
a trust, if (1) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons have the authority to control all of its substantial decisions or, (2) in the case of a trust that was treated as a domestic trust under the law in effect before 1997, a valid election is in place under applicable Treasury Regulations.

This summary also does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the United States federal income tax laws, such as:

dealers or traders in securities or currencies;
tax-exempt entities;
cooperatives;
banks, trusts, financial institutions or insurance companies;
persons who acquired shares of Trinity common stock pursuant to the exercise of employee stock options or otherwise as compensation;
stockholders who own, or are deemed to own, at least 10 percent or more, by voting power or value, of Trinity’s equity;
holders owning Trinity common stock as part of a position in a straddle or as part of a hedging, conversion, constructive sale, synthetic security, integrated investment or other risk reduction transaction for United States federal income tax purposes;
certain former citizens or former long-term residents of the United States;
holders who are subject to the alternative minimum tax; or
persons that own Trinity common stock through partnerships or other pass-through entities.

This summary does not address the United States federal income tax consequences to stockholders who do not hold shares of Trinity common stock as a capital asset. Moreover, this summary does not address any state, local or foreign tax consequences or any estate, gift or other non-income tax consequences.

If a partnership (or any other entity treated as a partnership for United States federal income tax purposes) holds shares of Trinity common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to the tax consequences of the distribution.

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YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC UNITED STATES FEDERAL, STATE AND LOCAL AND FOREIGN TAX CONSEQUENCES OF THE DISTRIBUTION IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.

Treatment of the Distribution

It is a condition to the completion of the distribution that Trinity receives (i) a private letter ruling from the IRS, and (ii) an opinion of each of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trinity, and KPMG, tax advisor to Trinity, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as tax-free for United States federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. Trinity has received the private letter ruling from the IRS.

Assuming the distribution qualifies as tax-free under Sections 368(a)(1)(D) and 355 of the Code, for United States federal income tax purposes:

no gain or loss will be recognized by Trinity as a result of the distribution (except for certain items that may be required to be recognized under Treasury Regulations regarding consolidated federal income tax returns);
no gain or loss will be recognized by, or be includible in the income of, a holder of Trinity common stock solely as a result of the receipt of our common stock in the distribution;
the aggregate tax basis of the shares of Trinity common stock and shares of our common stock (including any fractional share interest in our common stock for which cash is received) in the hands of each Trinity stockholder immediately after the distribution will be the same as the aggregate tax basis of the shares of Trinity common stock held by such holder immediately before the distribution, allocated between the shares of Trinity common stock and shares of our common stock (including any fractional share interest in our common stock for which cash is received) in proportion to their relative fair market values immediately following the distribution;
the holding period with respect to shares of our common stock received by Trinity stockholders (including any fractional share interest in our common stock for which cash is received) will include the holding period of their shares of Trinity common stock, provided that such shares of Trinity common stock are held as a capital asset immediately following the distribution; and
Trinity stockholders that have acquired different blocks of Trinity common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate adjusted basis among, and their holding period of, our shares distributed with respect to blocks of Trinity common stock.

Although the IRS ruling will generally be binding on the IRS, the IRS ruling is based on certain facts and assumptions, and certain representations and undertakings, from Trinity and us that certain necessary conditions to obtain tax-free treatment under the Code have been satisfied. Furthermore, as a result of the IRS’s general ruling policy with respect to distributions under Section 355 of the Code as in effect at the time the IRS ruling was requested, except in limited situations, the IRS will not rule on whether a distribution satisfies certain critical requirements necessary to obtain tax-free treatment under the Code. Specifically, the IRS will not rule that the distribution was effected for a valid business purpose, that the distribution does not constitute a device for the distribution of earnings and profits or that the distribution is not part of a plan described in Section 355(e) of the Code (as discussed below). Instead, the IRS ruling is based on representations made to the IRS by Trinity that these requirements have been established. Trinity expects to obtain the tax opinions, which are expected to include a conclusion that the distribution is being effected for a valid business purpose, that the distribution does not constitute a device for the distribution of earnings and profits and that the distribution is not part of a plan described in Section 355(e) of the Code (as discussed below). The tax opinions will be expressed as of the date of the distribution and will not cover subsequent periods, and the tax opinions will rely on the IRS ruling. As a result, the tax opinions are not expected to be issued until after the date of this information statement. The tax opinions will not be binding on the IRS or any court. We cannot assure you that the IRS will agree with the conclusions expected to be set forth in the tax opinions, and it is possible that the IRS or another tax authority could adopt a position contrary to one or all of those conclusions and that a court could sustain that contrary position. If any of the facts, representations, assumptions, or undertakings described or made in connection with the IRS ruling or the tax opinions are not correct, are incomplete, or have been violated, the IRS ruling could be revoked retroactively or modified by the IRS and our ability to rely on the tax opinions could be jeopardized. We are not aware of any facts or circumstances, however,

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that would cause these facts, representations or assumptions to be untrue or incomplete or that would cause any of these undertakings to fail to be complied with, in any material respect.

If, notwithstanding the conclusions in the IRS ruling and those that we expect to be included in the tax opinions, it is ultimately determined that the distribution does not qualify as tax-free under Sections 368(a)(1)(D) and 355 of the Code for United States federal income tax purposes, then Trinity would generally recognize gain with respect to the transfer of our common stock and certain related transactions. In addition, each Trinity stockholder that receives shares of our common stock in the distribution could be treated as receiving a distribution in an amount equal to the fair market value of our common stock that was distributed to the stockholder, which generally would be taxed as a dividend to the extent of the stockholder’s pro rata share of Trinity’s current and accumulated earnings and profits, including Trinity’s taxable gain, if any, on the distribution, then treated as a non-taxable return of capital to the extent of the stockholder’s basis in Trinity stock and thereafter treated as capital gain from the sale or exchange of Trinity stock.

Even if the distribution otherwise qualifies for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code, the distribution may result in corporate level taxable gain to Trinity under Section 355(e) of the Code if 50 percent or more, by vote or value, of our stock or Trinity’s stock is treated as acquired or issued as part of a plan or series of related transactions that includes the distribution. If an acquisition or issuance of our stock or Trinity’s stock triggers the application of Section 355(e) of the Code, Trinity would recognize taxable gain as described above, but the distribution would be tax-free to each Trinity stockholder.

A United States Holder that receives cash instead of fractional shares of our common stock should be treated as though the United States Holder first received a distribution of a fractional share of our common stock, and then sold it for the amount of cash. Such United States Holder should recognize capital gain or loss, provided that the fractional share is considered to be held as a capital asset, measured by the difference between the cash received for such fractional share and the United States Holder’s basis in the fractional share, as determined above. Such capital gain or loss should generally be a long-term capital gain or loss if the United States Holder’s holding period for such United States Holder’s Trinity common stock exceeds one year on the date of the distribution.

United States Treasury Regulations require holders of Trinity common stock who receive Arcosa common stock in the distribution who, immediately prior to the distribution, own (i) at least 5 percent of the total outstanding stock of Trinity, or (ii) securities of Trinity with an aggregate tax basis of $1 million or more, to attach a detailed statement setting forth certain information relating to the distribution to their respective United States federal income tax returns for the year in which the distribution occurs. Within a reasonable period after the distribution, Trinity will provide stockholders who receive our common stock in the distribution with the information necessary to comply with such requirement. In addition, all stockholders are required to retain permanent records relating to the amount, basis, and fair market value of our common stock received in the distribution and to make those records available to the IRS upon request of the IRS.

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DIVIDEND POLICY

Although Arcosa anticipates that it will likely pay quarterly dividends following the distribution, Arcosa has not yet determined the extent to which it will pay dividends on its common stock. The payment of any dividends in the future, and the timing and amount thereof, to our stockholders will fall within the sole discretion of our Board of Directors and will depend on many factors, such as our financial condition, earnings, capital requirements, potential obligations in planned financings, industry practice, legal requirements, Delaware corporate surplus requirements, and other factors that our Board of Directors deems relevant. Arcosa’s ability to pay dividends will depend on its ongoing ability to generate cash from operations and on Arcosa’s access to the capital markets. Arcosa cannot guarantee that it will pay a dividend in the future or continue to pay any dividends if Arcosa commences paying dividends. In addition, Arcosa expects to be authorized to implement a share repurchase program if circumstances warrant.

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CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2018 on a historical basis and on a pro forma basis to give effect to the pro forma adjustments included in our unaudited pro forma financial information. The information below is not necessarily indicative of what our capitalization would have been had the separation, distribution, and related financing transactions been completed as of June 30, 2018. In addition, it is not indicative of our future capitalization. This table should be read in conjunction with sections entitled “Unaudited Pro Forma Combined Financial Statements,” “Selected Historical Combined Financial Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as our Audited Annual Combined Financial Statements and Notes thereto and Unaudited Interim Combined Financial Statements and Notes thereto included in the “Index to Combined Financial Statements” sections of this information statement.

 
As of June 30, 2018
 
Historical
Pro Forma
 
(in millions)
Cash and cash equivalents
$
10.6
 
$
210.6
 
 
 
 
 
 
 
 
Debt, including current and long-term:
 
 
 
 
 
 
Current debt
$
0.1
 
$
0.1
 
Long-term debt
 
0.3
 
 
0.3
 
 
 
 
 
 
 
 
Total debt
$
0.4
 
$
0.4
 
 
 
 
 
 
 
 
Equity:
 
 
 
 
 
 
Common stock
$
 
$
0.5
 
Additional paid-in capital
 
 
 
1,613.7
 
Net parent investment
 
1,414.2
 
 
 
Accumulated other comprehensive loss
 
(19.3
)
 
(19.3
)
 
 
 
 
 
 
 
Total Equity
$
1,394.9
 
$
1,594.9
 
Total Capitalization
$
1,395.3
 
$
1,595.3
 

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SELECTED HISTORICAL COMBINED FINANCIAL DATA

The following table presents selected historical combined financial information of Arcosa. The selected historical combined financial information as of December 31, 2017 and 2016 and for the three years ended December 31, 2017 has been derived from Arcosa’s Audited Annual Combined Financial Statements included elsewhere in this information statement. The selected historical combined financial information as of December 31, 2015 and as of and for the years ended December 31, 2014 and 2013 has been derived from Trinity’s underlying financial records and, in the opinion of Arcosa’s management, has been prepared on the same basis as the information included in the table derived from Arcosa’s Audited Annual Combined Financial Statements. The selected historical combined information as of and for the six months ended June 30, 2018 and 2017 has been derived from Arcosa's Unaudited Interim Combined Financial Statements included elsewhere in this information statement. This information was derived from Trinity's underlying financial records and, in the opinion of Arcosa's management, has been prepared on the same basis as the information included in the table from Arcosa's Audited Annual Combined Financial Statements.

The selected historical combined financial data includes expenses of Trinity that were allocated to Arcosa for certain corporate functions including information technology, finance, legal, insurance, compliance, and human resources activities. These costs may not be representative of the future costs we will incur as an independent, publicly-traded company. In addition, Arcosa’s historical combined financial information does not reflect changes that we expect to experience in the future as a result of our spin-off from Trinity, including changes in Arcosa’s cost structure, personnel needs, tax structure, capital structure, financing, and business operations. Arcosa’s Audited Annual Combined Financial Statements and Unaudited Interim Combined Financial Statements also do not reflect the allocation of certain assets and liabilities between Trinity and Arcosa as reflected under “Unaudited Pro Forma Combined Financial Data” included elsewhere in this information statement. Consequently, the financial information included here may not necessarily reflect Arcosa’s financial position, results of operations, and cash flows in the future or what Arcosa’s financial position, results of operations and cash flows would have been had Arcosa been an independent, publicly-traded company during the periods presented.

To ensure a full understanding, this information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Audited Annual Combined Financial Statements and Notes thereto, and the Unaudited Interim Combined Financial Statements and Notes thereto included elsewhere herein.

 
Six Months
Ended June 30,
Year Ended December 31,
 
2018
2017
2017
2016
2015
2014
2013
 
(in millions)
Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
707.4
 
$
749.0
 
$
1,462.4
 
$
1,704.0
 
$
2,140.4
 
$
1,966.8
 
$
1,529.9
 
Income before income taxes
 
59.6
 
 
74.8
 
 
130.1
 
 
197.2
 
 
219.2
 
 
241.5
 
 
176.3
 
Provision for income taxes
 
14.8
 
 
29.3
 
 
40.4
 
 
74.2
 
 
84.2
 
 
85.0
 
 
64.3
 
Net income
$
44.8
 
$
45.5
 
$
89.7
 
$
123.0
 
$
135.0
 
$
156.5
 
$
112.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,601.1
 
$
1,516.5
 
$
1,602.5
 
$
1,526.3
 
$
1,603.7
 
$
1,687.5
 
$
874.0
 
Debt
$
0.4
 
$
 
$
0.5
 
$
 
$
0.5
 
$
0.7
 
$
0.9
 

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the United States federal corporate income tax rate from 35.0 percent to 21.0 percent, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign-sourced earnings. As of December 31, 2017, we have completed an initial assessment of the tax effects of enactment of the Act, and have made a reasonable estimate of the effects on our existing deferred tax balances. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to impact future tax returns. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts resulting in adjustments in future periods in 2018. The impact of the Act may differ from our estimate due to changes in the regulations, rulings, guidance, and interpretations issued by the IRS and the Financial Accounting Standards Board (“FASB”) as well as interpretations and assumptions made by the Company. For the items for which we were able to determine a reasonable estimate, we recognized a provisional net Federal benefit of $6.2 million for the year ended December 31, 2017, which is included as a component of income tax expense.

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On January 1, 2018, the Company adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers,” (ASU 2014-09) which provides common revenue recognition guidance for United States generally accepted accounting principles. The primary impact to the adoption of ASU 2014-09 is a change in the timing of revenue recognition for our wind towers and certain utility structure product lines within our Energy Equipment Group. Previously, the Company recognized revenue when the product was delivered. Under ASU 2014-09, revenue is recognized over time as the products are manufactured. Revenue recognition policies in our other business segments remain substantially unchanged. See Note 1. “Summary of Significant Accounting Policies” of the Notes to Unaudited Interim Combined Financial Statements included elsewhere in this information statement for further details.

Arcosa’s goodwill was tested for impairment at the reporting unit level based on the businesses being included in Arcosa for each of the five years in the period ended December 31, 2017. Accordingly, we determined that the goodwill associated with certain operations included in the Energy Equipment Group was impaired in its entirety and recorded a pre-tax impairment charge of $89.5 million for the year ended December 31, 2015. See Note 7 “Goodwill” of the Notes to the Audited Annual Combined Financial Statements.

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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The Unaudited Pro Forma Combined Financial Statements of Arcosa consists of the unaudited pro forma combined statements of comprehensive income for the year ended December 31, 2017 and the six months ended June 30, 2018 as well as the unaudited pro forma combined balance sheet as of June 30, 2018 prepared in accordance with United States generally accepted accounting principles. The Unaudited Pro Forma Combined Financial Statements reported below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Historical Combined Financial Data,” and the Audited Annual Combined Financial Statements and corresponding Notes thereto, and the Unaudited Interim Combined Financial Statements and corresponding Notes thereto included elsewhere in this information statement. The Unaudited Pro Forma Combined Statements of Comprehensive Income have been prepared to give effect to the pro forma adjustments (described below) as if the pro forma adjustments had become effective January 1, 2017. The Unaudited Pro Forma Combined Balance Sheet has been prepared to give effect to the pro forma adjustments as if the adjustments went into effect on June 30, 2018.

The following Unaudited Pro Forma Combined Financial Statements are subject to assumptions and adjustments, including those described in the accompanying notes. Arcosa’s management believes these assumptions and adjustments are reasonable under the circumstances given the information and estimates available at this time. However, these adjustments are subject to change as Trinity and Arcosa finalize the terms of the spin-off, including the separation and distribution agreement and related transaction agreements. The Unaudited Pro Forma Combined Financial Statements do not purport to represent what Arcosa’s financial position and results of operations actually would have been had the spin-off occurred on the dates indicated, or to project Arcosa’s financial performance for any future period following the spin-off.

These Unaudited Pro Forma Combined Financial Statements include adjustments to reflect the following:

the contribution by Trinity to Arcosa, pursuant to the separation and distribution agreement, of all the assets and liabilities that comprise Arcosa, including the cash contribution to Arcosa of $200 million; and
the impact of the separation and distribution agreement, the tax matters agreement, the employee matters agreement, the intellectual property matters agreement, the transition services agreement, and other commercial agreements between Arcosa and Trinity.

After the spin-off, Arcosa expects to incur incremental costs as an independent public company, including costs to replace services and fees previously provided or incurred by Trinity as well as other standalone costs. We estimate that these costs will range from $10 million to $15 million per year, over and above amounts currently included in the Unaudited Pro Forma Combined Financial Statements. Due to the scope and complexity of these activities, the amount of these costs could vary and, therefore, are not included in the Unaudited Pro Forma Combined Financial Statements.

Arcosa’s Audited Annual Combined Financial Statements and Unaudited Interim Combined Financial Statements include expense allocations for certain support functions that are currently provided on a centralized basis within Trinity, such as expenses for business shared services, and other selling, engineering, and administrative costs that benefit Arcosa. Trinity has incurred spin-off-related transaction costs which are not reflected in the historical financial statements as the costs were one-time, non-recurring costs, substantially all of which have been borne by Trinity.

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Arcosa, Inc. and Subsidiaries
Unaudited Pro Forma Combined Statement of Comprehensive Income
Year Ended December 31, 2017

 
Historical
Pro Forma
Adjustments
Pro Forma
 
(in millions, except per share amounts)
Revenues
$
1,462.4
 
$
      —
 
$
1,462.4
 
Operating costs:
 
 
 
 
 
 
 
 
 
Cost of revenues
 
1,167.7
 
 
 
 
1,167.7
 
Selling, engineering, and administrative expenses
 
163.0
 
 
 
 
163.0
 
 
 
1,330.7
 
 
 
 
1,330.7
 
Total operating profit
 
131.7
 
 
 
 
131.7
 
 
 
 
 
 
 
 
 
 
 
Other (income) expense
 
1.6
 
 
 
 
1.6
 
Income before income taxes
 
130.1
 
 
 
 
130.1
 
 
 
 
 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
40.4
 
 
 
 
40.4
 
 
 
 
 
 
 
 
 
 
 
Net income
 
89.7
 
 
 
 
89.7
 
Other comprehensive loss
 
1.4
 
 
 
 
1.4
 
Comprehensive income
$
88.3
 
$
 
$
88.3
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Earnings Per Share
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
(A) 
$
1.77
 
Diluted
 
 
 
 
 
(B) 
$
1.76
 
Average number of shares used in calculating Unaudited Pro Forma Earnings Per Share:
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
(A) 
 
49.5
 
Diluted
 
 
 
 
 
(B) 
 
49.7
 

See Notes to Unaudited Pro Forma Combined Financial Statements.

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Arcosa, Inc. and Subsidiaries
Unaudited Pro Forma Combined Statement of Comprehensive Income
Six Months Ended June 30, 2018

 
Historical
Pro Forma
Adjustments
Pro Forma
 
(in millions, except per share amounts)
Revenues
$
707.4
 
$
      —
 
$
707.4
 
Operating costs:
Cost of revenues
 
568.6
 
 
 
 
568.6
 
Selling, engineering, and administrative expenses
 
77.0
 
 
 
 
77.0
 
 
 
645.6
 
 
 
 
645.6
 
Total operating profit
 
61.8
 
 
 
 
61.8
 
 
 
 
 
 
 
 
 
 
 
Other (income) expense
 
2.2
 
 
 
 
2.2
 
Income before income taxes
 
59.6
 
 
 
 
59.6
 
 
 
 
 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
14.8
 
 
 
 
14.8
 
 
 
 
 
 
 
 
 
 
 
Net income
 
44.8
 
 
 
 
44.8
 
Other comprehensive (income) loss
 
(0.5
)
 
 
 
(0.5
)
Comprehensive income
$
45.3
 
$
 
$
45.3
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Earnings Per Share
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
(A)
$
0.90
 
Diluted
 
 
 
 
 
(B)
$
0.89
 
Average number of shares used in calculating Unaudited Pro Forma Earnings Per Share:
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
(A) 
 
48.9
 
Diluted
 
 
 
 
 
(B) 
 
49.2
 

See Notes to Unaudited Pro Forma Combined Financial Statements.

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Arcosa, Inc. and Subsidiaries
Unaudited Pro Forma Combined Balance Sheet
As of June 30, 2018

 
Historical
Pro Forma
Adjustments
Pro Forma
 
(in millions)
ASSETS
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
10.6
 
$
200.0
(E) 
$
210.6
 
Receivables
 
168.3
 
 
 
 
168.3
 
Inventories
 
232.7
 
 
 
 
232.7
 
Other
 
9.9
 
 
 
 
9.9
 
Total current assets
 
421.5
 
 
200.0
 
 
621.5
 
 
 
 
 
 
 
 
 
 
 
Property, plant, and equipment, net
 
582.6
 
 
 
 
582.6
 
Goodwill
 
504.2
 
 
 
 
504.2
 
Deferred income taxes
 
8.8
 
 
 
 
8.8
 
Other assets
 
84.0
 
 
 
 
84.0
 
 
$
1,601.1
 
$
200.0
 
$
1,801.1
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
71.5
 
$
 
$
71.5
 
Accrued liabilities
 
111.0
 
 
 
 
111.0
 
Current portion of long-term debt
 
0.1
 
 
 
 
0.1
 
Total current liabilities
 
182.6
 
 
 
 
182.6
 
 
 
 
 
 
 
 
 
 
 
Debt
 
0.3
 
 
 
 
0.3
 
Deferred income taxes
 
14.4
 
 
 
 
14.4
 
Other liabilities
 
8.9
 
 
 
 
8.9
 
 
 
206.2
 
 
 
 
206.2
 
Equity:
 
 
 
 
 
 
 
 
 
Common stock
 
 
 
0.5
(C) 
 
0.5
 
Capital in excess of par value
 
 
 
1,613.7
(D) 
 
1,613.7
 
Net parent investment
 
1,414.2
 
 
(1,414.2
)(C)(D)(E)
 
 
Accumulated other comprehensive loss
 
(19.3
)