Good day, and before we get started, let me remind you that today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to estimates, expectations, intentions, and predictions of future financial performance. Statements that are not historical facts are forward-looking. Participants are directed to Trinity’s Form 10-K and other SEC filings for a description of business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in these forward-looking statements. It is now my pleasure to turn the call over to Ms. Gail Peck, Vice President and Treasurer. Please go ahead.

Thank you, James. Good morning, everyone. Welcome to the Trinity Industries' First Quarter 2014 Results Conference Call. I'm Gail Peck, Vice President and Treasurer of Trinity. Thank you for joining us today. Following the introduction, you will hear from Tim Wallace, our Chairman, Chief Executive Officer and President. After Tim, our business group leaders will provide overviews of the businesses within their respective groups. Our speakers are: Bill McWhirter, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Groups; and Steve Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing groups. Following their comments, James Perry, our Senior Vice President and Chief Financial Officer, will provide the financial summary and guidance. We will then move to the Q&A session. Mary Henderson, our Vice President and Chief Accounting Officer, is also in the room with us today. I will now turn the call over to Tim Wallace for his comments.

Thank you, Gail, and good morning, everyone. I'm very pleased with our record financial results for the first quarter, which was enhanced by a large sale of railcars from our lease fleet. Our businesses did an outstanding job of driving operating leverage and efficiencies to the bottom line. We're also making good progress in the business development area. We completed 3 acquisitions during the first quarter within our Energy Equipment Group. These activities built upon the positive momentum already occurring within our company. Our Rail Group generated record financial results in the first quarter and significantly increased its order backlog. I'm pleased with the group's ability to continue improving its performance while converting manufacturing space, making line changeovers and collaborating with Trinity's internal supply chain to maximize profitability. Our Railcar Leasing and Management Services Group delivered another quarter of solid operating results. In addition, they did a good job of completing the railcar transaction I mentioned earlier. I'm pleased with our Inland Barge Group's financial performance during the first quarter. They obtained orders during the first quarter that were crucial to filling gaps in their production lines for the balance of the year. Our Construction Products Group continues to make good progress, improving its overall performance, resulting from the repositioning activities we completed last year. The first quarter financial performance of our Energy Equipment Group continued to show improvement year-over-year. I'm pleased with this group's efforts to expand its product offerings. Today, Trinity is uniquely positioned to provide a variety of transportation and storage products to the oil, gas and chemicals industries. Our Railcar, Barge and Energy Equipment groups have very high quality products to serve the demand in these industries. We will continue to leverage our resources to pursue opportunities to expand our product offerings and extend our market…

Thank you, Tim, and good morning, everyone. The Inland Barge Group achieved strong margins during the first quarter on slightly lower revenue due to a favorable product mix and production efficiencies in our plants. During the first quarter, we received orders totaling approximately $215 million, bringing the barge backlog to $508 million at the end of March. Our production plans for 2014 are now solidified, and orders are being taken for deliveries in 2015. Demand for hopper barges is recovering as scrap prices improve and barge traffic along the inland waterways increases due to stronger exports of corn, wheat and soybeans. Demand drivers for tank barges continues to be favorable, with backlogs in the industry stretching into 2015. As infrastructure investments in the energy sector are completed, we expect additional expansions in downstream markets, resulting in rising shipments of chemical and petrochemical commodities. As a result of the improvement in hopper barge demand and the level of orders taken during the quarter, we recently shifted some production capacity from smaller tank barges to hopper barges. We also enhanced our profit forecast for the Inland Barge Group in 2014. I am pleased with how our barge group has responded to various demand drivers and maximized efficiencies within the plants to drive profit. This group's operational flexibility is a key differentiator, enabling us to enhance profitability and respond to our customers needs. Moving to our Construction Products Group. Year-over-year revenue increased modestly during the first quarter due to acquisition-related volumes. A more favorable product mix drove an increase in operating margin from 7.4% during the first quarter of last year to 9.3% this year on an adjusted basis, excluding the gain on a land sale. I am pleased with the performance of this group, considering much of the first quarter was negatively…

Thank you, Bill. Good morning. I continue to be very pleased with the operating performance and achievements of our Rail and Leasing Groups. The focused efforts of our dedicated TrinityRail team, the benefits of our integrated business model and both our operating and financial flexibility continue to drive record performance levels for our businesses. During the first quarter, our Leasing Group again earned record operating profit due to continued strong market fundamentals as well as profit recognized from sales of leased railcars to Element Financial Corporation. Lease renewals continue to show strong rate increases and longer lease terms. Our lease fleet utilization at the end of the first quarter was 99.5%, up from 98.4% last year. So far in 2014, we have sold $517 million of leased railcars in the secondary market, the majority of which were sold to Element under the strategic alliance formed last December. Selling railcars from our leased portfolio to various financial institutions and managing those leases while retaining our commercial relationships with the lessees is an important strategy of the TrinityRail business model. We developed a strong competency in syndicating leased railcars while simultaneously growing our wholly-owned lease fleet. Secondary market activities help us to manage lease fleet portfolio diversification and create additional value through the monetization of leased assets when market conditions are most favorable. I am very pleased with the success we've had in growing our leasing platform and expanding our access to institutional capital to support our strong lease origination capability. During the first quarter, our Leasing Group took delivery of approximately 2,280 new railcars. Our total lease fleet portfolio, including partially-owned subsidiaries, now stands at approximately 73,545 railcars, a 1% increase year-over-year even after first quarter leased railcar sales. At the end of the quarter, approximately 22% of the units in…

Thank you, Steve, and good morning, everyone. Yesterday, we announced record results for the first quarter of 2014. For the quarter, we reported record revenue of $1.5 billion and record earnings per share of $2.85 compared to our first quarter guidance of $2.45 to $2.65 per share. Included in our results and in first quarter guidance were proceeds from the sale of $514 million of new and existing leased railcars to Element, completed under the strategic alliance that we announced in December, with an EPS impact of $1.43. Our first quarter earnings, without the profit from sales to Element, represent a quarterly record for Trinity. All of our business units contributed to our strong quarterly results, with each group reporting year-over-year improvement in quarterly operating profit and margin. Our tax rate for the first quarter was 32.5%, lower than our guidance of 35% to 36% primarily due to the benefits of certain domestic manufacturing deductions, lower state taxes and the partnership tax status of our noncontrolling interest. The lower tax rate accounted for $0.13 of incremental EPS during the first quarter as compared to our guidance. Our current earnings guidance assumes a tax rate of 34% for the remaining 3 quarters of 2014. As we mentioned on our last call, the company's convertible notes will have a dilutive impact on EPS when the average stock price for the quarter exceeds the conversion price of the notes. During the first quarter, the average stock price was $64.08, which was well above the conversion price, in effect, of $50.69. As a result, 1.9 million additional shares were added to our share count in the calculation of EPS for the first quarter, reducing EPS by $0.06 per share. For the remainder of the year, our guidance assumes a $72.50 stock price, our recent…

[Operator Instructions] And our first question comes from Allison Poliniak of Wells Fargo.

James, you threw out a lot of numbers. Can you walk me through so I understand Element, the second sort of $500 million tranche this year. Is that already in backlog? And I think you mentioned something about the leased backlog. I know some of that gets eliminated, but I know Element's not. Can you kind of walk how I should be thinking about that?

Yes. Let me give you a couple of pieces, Allison. First of all, there's not necessarily $500 million that were scheduled this year. We said we'll complete the first $1 billion. To date, we've done $619 million, so you've got about $380 million left in that $1 billion, and timing will vary quarter to quarter in that, of course. Some of those cars may come directly from our Rail Group, so they'll just be sales within the Rail Group. Some may be existing cars within the lease fleet. There may be cars that move into the lease fleet during the year and are then sold to Element, so they'll be eliminated and then reflected as car sales. We'll provide that geography as the year goes on, but all of those sales, whether they're in the Rail Group or in the Leasing Group, are included in the guidance for the rest of the year.

Okay, perfect. That's helpful. And then just turning to the announcement coming out of Canada about 1 week ago, any thoughts there? I mean, the timeline seems much more aggressive than what the RSI was proposing. Thoughts on how real that number could be. Is there still sort of a comment period on that side?

Steve, you want to take that?

Yes, sure. Allison, yes, we're obviously following this very closely. We're familiar with Transport Canada's actions earlier. And I think we expect that over time, the U.S. and Canadian standards will be synchronized. That's always been the historical pattern. And certainly, as we gain further clarity, we'll provide an update on how we plan to address any regulatory changes. I think due to the fact that PHMSA came out with a more accelerated regulatory process to culminate at the end of September, was certainly trying to accelerate and respond to Transport Canada's actions as well. So yes, we'll continue to follow up and provide updates as we become more clear on what the alternatives are.

And our next question comes from Eric Crawford of UBS.

I guess I'll start with rail. Is there 2014 capacity left that isn't already spoken for? And I guess the real question is, how much upside risk is there to the deliveries guidance that you gave today?

Steve?

Yes, sure. Eric, as I mentioned, we've seen productivity increases in our existing facilities that have yielded some additional capacity. And we have filled orders in some of our open production slots with the freight car orders that we received during the quarter, and I mentioned a new plant that we're expanding that will also be contributing to railcars to be delivered. So we've given a range of 27,500 to 29,000 cars to be delivered yet this year, and we're certainly confident within that range.

Okay, fair enough. On covered hoppers, can you speak a bit more as to what you're seeing in the markets there? I mean, you touched on the main buckets, and as a whole, orders have been improving, but there has been some, I guess, inherent lumpiness from quarter to quarter with respect to where the demand is coming from. So I was hoping maybe you could touch on the 3 buckets from an inquiries level and where you see demand headed.

Yes. I guess, Eric, when I think about demand in the railcar area, if you look back over an extended period of time, there's always been 1 or 2 car types that are driving the market. So the fact that tank cars are taking a little bit of a respite, and so there's regulatory clarity and that covered hoppers are filling the void, that's not unusual. So I think what we're most encouraged by is the first quarter orders reflected really a broadening of demand. We saw strong demand for small cube covered hopper cars for both frac sand and the construction markets. We see the agricultural market again looking for equipment. Automotive remains strong. And while I don't expect to be building any new coal cars, we've actually seen improved demand in the coal sector, which has been supporting stronger lease rates and lease trends there, so.

Okay, great, absolutely. No, great to see and nice to see demand coming back on the dry side of barge, too. On construction, lastly for me and I'll pass it on, but on construction, any preliminary thoughts on the GROW AMERICA Act and how that might impact you guys?

Yes, Eric. This is Bill. Now we're closely monitoring the legislative situation, as you might well guess. We're certainly concerned that it's a punt and we end up back in a situation where we're just doing temporary extensions as we go forward. But we continue to watch it, and we remain ready. Should demand increase, we certainly have the capacity to take care of that demand and our customers.

And our next question comes from Bascome Majors of Susquehanna.

I know there's a lot of noise in the current quarter and the year as a whole, given your partnerships with RIV and Element, but beyond that -- and the RevPAR backlog is very strong, at record levels, and your visibility into future revenues and your larger segment, accordingly, is reaching all-time highs in the quarter. And can you talk a little bit, a very high level, about your expectations for core demand into 2015 in your key markets, both in railcar and your other businesses? I mean, just stripping all the noise away, where do you see some opportunities for incremental organic growth into next year, beyond the strong conditions you're already seeing today?

Well, Steve, you want to give him your perspective on, say, the rail, and then maybe, Bill, yours on wind and barge?

Sure. So Bascome, this is Steve. Certainly, on the rail side, we do have a strong backlog going into 2015, and it's across the widest breadth of our product lines. We certainly have certain production lines that are not built out for 2015, but what I like is the continuing demand trends. I think freight car demand trends are going to remain solid. And again, I think once we get over this regulatory pause, then we're going to see strong demand for tank cars going into 2015. So I'm very encouraged by what we see, and we've developed our production flexibility so that if there's additional demand to meet, we can do that. Or if we have to flex down, we can do that as well. So I like our positioning for '15, and I like the demand characteristics going into the new year.

Yes, Bascome, on the barge side, I think Trinity really had a great experience in the first quarter of 2014, where we used one of our facilities to convert from tank to hopper, back to tank. And the guys just did a fantastic job really proving out kind of the multipurpose capabilities of our facilities. And so as we look forward into '15, we continue to see opportunity on the tank barge side. I think the dry side will be a little more opportunistic, although recent numbers on the fleet profile suggest that scrapping continues at a higher rate than buying, so the fleet continues to get compressed, which should create some demand. So overall, I'm encouraged for '15 on the barge side. And just quickly slipping into the wind tower side, we've got a really nice backlog in the wind tower business, continue to have kind of strong inquiries in that business, and I like the way the guys are producing their products right now. And I think we've got good opportunity in '15 on wind tower.

And just one more on the acquisition front. I mean, you talked a little bit at a high level about it, and you've certainly outlined your strategy as that's become more important over the last 6 months. But as we get to the point where the cash balance is rising pretty substantially, is it -- during the quarter, can you help us a little bit on sizing up the magnitude of the pipeline and the amount of capital you're willing to deploy towards deals over the next few quarters or even 2 years and the pace at which you would like -- or think you can start to deploy that?

Yes, it's Tim. As far as the balance sheet goes, it definitely provides us a great foundation to be able to think small, medium and large as well so we can look at businesses across all those sectors. First off, it's important to remind you that when we look at businesses, we take in consideration our corporate business model that generates value by leveraging the strengths of our businesses within our portfolio. A lot of our businesses, they receive and they share and they generate value through various interactions with each other. So when we're looking for external opportunities, we look for those that will enhance our position of each of our product lines that we have or businesses that are adjacent to our businesses. And so when you see -- you look at the 3 acquisitions that we made in earlier this year, these companies all have a great role in our company in the way that they play off of the competencies that we have and they fit real well. We look to companies that have a heavy manufacturing of steel content. In fact, we like heavy manufacturing as opposed to the lighter manufacturing. We look at businesses that need competencies that we have to offer or we can gain some advantages through some of the supply agreements that we have in the steel area. Right now, our pipeline, as James said in his summary, is fairly robust and full. And so we have an active group, which I'm included, of looking at various businesses.

Okay. And does your full year outlook assume anything on the acquisition front beyond what you've announced in the first quarter?

Nothing that we would talk about, Bascome. We've got certain things included in our forecast that we don't detail, but we wouldn't mention anything at this time.

Our next question comes from Justin Long of Stephens Research.

Last quarter, you gave the number of DOT-111 tank cars and flammable service in your wholly-owned and partially-owned lease fleets, and I wanted to ask a couple of questions on that. First, did that number change materially with the sales to Element in the first quarter? And second, is there a way to break down how many of these tank cars are in your wholly-owned fleet versus the JVs?

Yes. Thanks, Justin, for your question. At the end of the first quarter, our DOT-111 cars and flammable service, both included in our wholly-owned and partially-owned fleets, was approximately 11,300. So that would compare to the number we had given to you previously. I think we disclosed 12,200 in our February call. And at this time, we're not prepared to break out in any further detail the ownership of that number.

Okay, fair enough. And is there any way you could give any detail on how many of those cars are touching Canada and could be subject to the 3-year retrofit or phaseout that they've discussed?

Sure, I can give you a little more detail on that. As far as the A515 tank cars, as I referred to in the duration that was given by Transport Canada, we have approximately 17 of those cars in flammable service, of which 12 have been in Canada recently. And so we're working with our customers there to transition those cars.

Okay, so it's really small. That's helpful detail. My next question, I was wondering if you could comment on the new railcar pricing environment for both tank and nontank. We heard from another OEM that they've actually been turning down some orders based on price. Did you experience that in the first quarter as well?

Well, I'm not sure about the question. We were very pleased with the orders that we took in the first quarter. Our industry continues to be competitive, but I think we're also really continuing to target orders that meet our return requirements and allow us to extend our production runs. And I would say that all the orders we took in the first quarter or virtually all the orders we took in the first quarter supported that strategy.

Okay, great. And one last one for me. I know you're not building marine barges today, but it sounds like this is a market that's heating up. I was wondering if there's any possibility for you to adjust some of your existing facilities in Inland Barge to build some of the smaller marine barges.

Yes, Justin, this is Bill. As far as the -- what you're calling marine, I guess oceangoing barges, we have the ability to build to the smaller side of oceangoing barges but not to the larger side of oceangoing. We'd have to have a new facility with much bigger docks.

Okay. And what kind of capacity would you classify the smaller marine barge, just from a barrel standpoint?

Kind of at the 50,000 and less, maybe a little bigger. It depends on the design of the barge.

And our next question comes from Matt Brooklier of Longbow Research.

So just a question on -- the deliveries in first quarter saw a sequential decline. Just curious to hear if that was just a function of mix or maybe there was some weather or other hindrances in the quarter.

No, Matt. There's -- I would say it was mix. And again, I was very pleased with our production deliveries, and I thought they met our expectations.

Okay. And then you talked about the Georgia facility where you're going to be producing incremental tank cars. Is that a new facility or that's an existing facility where you're adding production lines?

Well, Matt, we actually have several facilities in Georgia and have been producing railcar components at one of those facilities. This is a facility we've owned for a number of years that we're reopening, and we'll be bringing that up to production scale on a very gradual basis.

Got you. And then do you have a sense for when that facility is online, producing? Is that more a second half '14 event, or is that something that could be more near term? And then maybe provide a little bit of color in terms of the incremental investment needed to get that facility up.

Matt, I'm really confident in our team's ability to bring that plan up to speed. I'd prefer not to give specific deliveries for competitive reasons, but the cars that we would expect to see from that facility this year are incorporated into our projections of 27,500 to 29,000 for the year.

Okay. And can you talk to the incremental investment needed on that facility and kind of the timing of those investments?

I'm not prepared to share that.

Actually, I'd say it's not really material and it's got really quick -- usually has really quick payback. Our internal investments that we've made to increase our capacity has given us tremendous returns.

Okay. And then for your '14 guide, can you give a little bit of color in terms of expectations for the lease fleet? What's potentially the size of the lease fleet from a unit perspective by the end of the year?

Yes, this is James, Matt. It's hard to get real precise there. We're going to continue to have sales of cars to Element. We'll continue to add to the fleet. Our leasing backlog is a little over 20% of our total backlog, but we're not prepared to get real precise on where that's going to end up given the timing of some of those transactions.

And our next question comes from Sal Vitale of Sterne Agee. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: So first question, just a segue on the Georgia facility. Can you give a sense for, once the incremental capacity is added, I mean, what do you -- in terms of numbers, I mean, do you think that's a few thousand in terms of additional tank capacity?

Sal, thanks for your question. We really don't provide individual plant capacities and run rates. It's all reflected in our projections for production deliveries for the year, and I think we'll stay with that. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay, that's fine. Just in terms of the opportunity for replacement of the DOT-111s, there are varying estimates. How do you consider the universe of cars that could potentially be replaced? So do you just look at, say, the current DOT -- well, I should say the prepetition DOT-111s that are carrying, say, crude and ethanol, which is about in the mid 50,000s, let's call it 56,000? Or do you look at the entire universe of the DOT-111s that are carrying hazardous materials, which is more like between 150,000 and 160,000?

Well, if I understand your question, Sal, I think the regulatory process is particularly focused on railcars operating in flammable service, so that's where our focus has been, and I think the numbers that the RSI last had in late September were about 85,000 of those cars. So we've told how many numbers that we have in our fleet, and we're certainly focused on transitioning those cars and modifying them, if that's what the appropriate action is, if the economics support that and the regulations support that. And where it doesn't, we feel pretty confident there's going to be a replacement demand for cars that meet any new specifications or regulations. The investments that we're making that I talked about earlier, I think, give us the flexibility to respond to both increased demand for new railcars and to be able to support modifications and regulatory compliance with our own fleet. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay. That's helpful. And then the numbers you mentioned earlier, you said there are currently 11,300. Those are, I guess, the DOT-111s in your lease fleet. And that compares to, say, 12,200 a quarter ago. I remember a figure you mentioned a quarter ago of 9,600. Those are the bad faith cars. What is that level? What -- how many bad faith cars are in your fleet now?

Yes, I don't -- we don't have anything in our fleet that's bad faith. We have good faith cars, but we haven't broken out the 11,300 into different categories. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay, that's fine. So then the other question is just to get a clarification on your guidance. You had said the additional sales of cars in the lease fleet of 160 to 175 and profit on that of $30 million to $35 million. Is the 160 to 175, are those above and beyond the sales to ESN and to Element, or is that inclusive?

No, it's simply above and beyond what we did in the first quarter, so that would include the sales that we have scheduled to Element for the rest of the year. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay. So the 160 to 175, that's assumed to be sales of cars that you've held for less than 1 year, which you recognize as revenue, correct?

The majority of those would be.

And our next question comes from Tom Albrecht of BBT. Thomas S. Albrecht - BB&T Capital Markets, Research Division: I appreciate all of the numbers and everything, but sometimes I get lost, so I want to clarify a couple of things. So I don't know if it was Steve or James, you talked about there could be some margin issues for the rest of the year in the Rail Group. Was that primarily because of the opening of the Georgia plant and the start-up cost, or is it because, as the production mix becomes maybe a little bit less tank, the margins would naturally maybe not stay at that 19.5% level?

Well, I think we've given guidance of 17.5% to 19%, and that was consistent with the first quarter. We've raised our revenue guidance, so the overall profit dollars are significantly higher with the new guidance. Steve did mention a little bit of headwind as we go through some expansions-type things. Mix will always change throughout the year. So again, the margin guidance hasn't changed much, but the dollars have moved up quite a bit on the new delivery guidance that Steve provided.

And just to add to James' point. In addition to start-up costs for our Georgia facility, we're also making investments in our maintenance services, which had some adverse costs associated with that, that impacts margins in the balance of the year. Thomas S. Albrecht - BB&T Capital Markets, Research Division: So those 2 factors, Georgia and the investment in the maintenance services, would be the bigger headwind, if you want to use that term, as opposed to changing mix on the production?

Yes, I think mix has probably a better impact on the rest of the year, and that's what we had forecasted before. Again, our margin guidance hasn't changed. As we go through the year and see which cars are coming through our production facilities, I think mix is probably the bigger piece, but we're not prepared to break out in a lot of detail the distinction between the pieces. Thomas S. Albrecht - BB&T Capital Markets, Research Division: Okay. And then in terms of a second quarter production, I know your production was off in the December quarter, but you had actually guided to that -- no, I think someone may have forgotten about that. But should we be thinking about -- I know what you've given for the full year, but in terms of just kind of an immediate ramp-up, kind of more of the same, around 7,000 for the second quarter?

Yes. I think, Tom, we've given the annual guidance and we'll stay with that. I really don't want to have to be going quarter to quarter on guiding deliveries and -- but again, I think we're confident in the range we've provided for the year. Thomas S. Albrecht - BB&T Capital Markets, Research Division: Okay. And then, James, you gave a number of $619 million that you've done with Element so far. Is that inclusive of April? Because the press release talks about $514 million.

No, that's from December, when we initiated the agreement with Element, through the end of the first quarter. Thomas S. Albrecht - BB&T Capital Markets, Research Division: Okay. I wasn't sure which extra month it included.

Yes, that was the original $105 million we did in December plus the little over $514 million we did in the first quarter, Tom. Thomas S. Albrecht - BB&T Capital Markets, Research Division: Okay. And then just on your guidance, there were a couple of things I missed. Revenue eliminations were $800 million to something. Was it $800 million to $850 million?

$825 million to $875 million during the year. Thomas S. Albrecht - BB&T Capital Markets, Research Division: Okay. And then other revenue eliminations were $270 million to something?

$275 million to $300 million, and that's the nonleasing-related eliminations we have. And as a reminder, Tom, we'll file these remarks very shortly after the call, so you'll have all the numbers. We're happy to walk you through them. Thomas S. Albrecht - BB&T Capital Markets, Research Division: Okay. And then I guess just one last question. I mean, you had tremendous incremental margins from the December quarter into the March quarter even though you delivered about 390 fewer cars. Just in your opinion, what was the biggest influence on either the incremental margin being over 500% or the fact that the absolute margin rose 110 basis points?

This is James, Tom. I think as you look at good pricing on the cars that we produce, we continue to see that as they've come through the backlog. I think the employees at the plants are doing a great job with getting their manufacturing efficiencies through the operational flexibility we have. We've really seen the margin increase quarter-over-quarter. And again, as we said, we project a very good margin the rest of the year for the same reasons.

And our next question comes from Kristine Kubacki of Avondale Partners.

I'm going to ask a little bit bigger question, going back to the regulation side. On PHMSA, it seems like they've laid out here recently a wish list in the car design coinciding with what AAR was proposing on the shelf thickness, full-height head shields, thermal protection and jacking. I guess, can you give us some thoughts, that if that comes to fruition, how this would impact the backlog, the backlog that's already there? Am I wrong to think about, given that we're finally going to get some design certainty, that we would see an increase in the existing backlog pricing as we incorporate those design changes and the new car pricing obviously will be going up in the future on those tanks going into crude methanol?

Thanks, Kristine. Steve. You asked a lot of questions in there. And certainly, I think a possible outcome of regulatory change is increased demand for tank cars, new tank cars to be built. And as we continue to have strong backlogs and new tank cars, that raises -- it gives us greater ability to raise prices. As new tank car prices rise, it also gives us the ability to raise existing car lease rates as well. So I think all those are positive in the long term, but certainly, a lot of details to figure out on what comes through in regulations and investment returns and lease rates and how the market is going to accept those lease rates and investments and modified cars. So there's just a lot to deal with, and we have to really sit down and understand what the final regulations are to be able to develop our plans. And we'll certainly share those with you when that becomes available.

Okay. I guess I would assume then, if you had a, say, a CPC-1232 in the backlog and it was going for crude service, that with those design changes, then probably you would be able to incorporate any new design that they start to mandate and that pricing would be incorporated?

I'm not sure. We'll take a look at things when they become more clear. But that's highly speculative, and it's difficult to respond.

Our next question comes from Bill Baldwin of Baldwin Anthony.

Two questions. I guess, first, Steve, with the uncertainty regarding the regulations, are you seeing any of your customers that have backlog defer in delivery, saying, "Let's wait and see what happens here before we take delivery of our tank cars"?

I think I mentioned in my comments, Bill, that like us, people want to make good investment decisions and understand clearly what equipment to invest in, and that's pretty hard to do in this regulatory uncertainty. I think we're going to have some clarity here towards the end of the summer. And we're certainly going to work with our customers to assist them in being able to build the right cars for their fleet and lease the right cars for their business. And we're just going to have to be flexible working with our customers to make that happen. But I think that adds some flexibility.

Exactly. Yes, just a -- kind of an unusual environment really at this point, with all this going on like it is. And many different people involved, too. So many different organizations.

Well, that's right. And I wouldn't want to be in this position for a long time. But again, I think by the end of the summer, we'll start to have some clarity, as outlined in PHMSA's schedule.

Yes, yes. I hope the regulatory people understand the importance of keeping this process moving. Secondly, Bill, acquisition of these cryogenic companies, cryogenic tank manufacturing. Can you give some color as to the markets that you think these tanks will basically be serving to the markets they'll be going into over the next several years?

Sure, Bill. So we really think about cryogenics in a couple of buckets, just kind of atmospheric gases but then LNG. And so as we look at the markets broadly for LNG, a lot of expansion particularly in the transport side. And that can be traditional transport trailers, but it can also be ISO trailers, serious movement of LNG into the infrastructure to fuel motor vehicles, the potential for fueling locomotives and, certainly, the potential for fueling tows for barge lines. So we see a lot of opportunity across Trinity's broad spectrum of products, and acquiring that technology to complement what we already had in Mexico, really kind of the anchor for what we think could be really nice growth.

And kind of in, I guess, that same vein, a little different product category, but can you talk to us about what Trinity is doing, if anything, really in the compressed natural gas storage markets? And how you see those markets unfolding?

Yes, Bill. We do a little bit of work in the compressed side. We have done some prototyping in the compressed side, but typically right now, we're a little more focused on the liquid side. But we certainly have the capabilities to participate in the compressed side.

Bill, this is Tim. We also manufacture the heads that are used in the -- to build the spheres in the CNG business, and that is a competency that is easily leveraged into that business because if you're building those vessels, steel, I think, is 2.5 to 3 inches thick, and there's not that many people that have the capability of making the heads that go on those vessels. So we're serving that market right now.

Yes, as I recall, that's why you got in the tank car business years ago.

Well, most of our businesses have evolved. It's just businesses that are adjacent to our core businesses, and then they grow from there. That -- it's very fascinating for us and very exciting for us.

It is. How do you see the compressed natural gas markets evolving? I mean, is it really very fuzzy right now, or is there some clarity about what might be going on there?

Well, I think you've got compressed natural gas currently being used by a lot of the large commercial companies that have local vehicles that will be using them, like school buses and other buses and delivery vehicles and things like that. And the compressed natural gas industry is trying to spread that out to where the longer-haul trucks and -- would either go LNG or compressed natural gas in that particular area. But then they've got to put in the infrastructure, and there's a lot of capital being raised to put in infrastructure in these areas.

Okay. It looks like we have no more questions. That concludes today's conference call. A replay of this call will be available after 1:00 Eastern Standard Time today through midnight on May 7, 2014. The access number is (402) 220-0118. Also, the replay will be available on the website located at www.trin.net. We look forward to visiting with you again on our next conference call. Thank you for joining us this morning.

And this concludes your teleconference. Thank you for your participation. You may now disconnect. Have a wonderful day.