GREENBRIER COMPANIES INC
For the period ended Nov 30, 2024. Filed Jan 10, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 30, 2024 · Filed Jan 10, 2025
GBX$41.51-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-05-31; filed 2024-07-08.
0000950170-24-082097
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-11-30; filed 2025-01-10.
0000950170-25-003839
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 161 previous paragraphs and 103 current paragraphs.
39 unchanged; 41 reworded; 23 added; 68 removed; 13 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
We continue to execute on our multi-year strategy. Overall, demand in the marketplace is steady for our products and services. We delivered strong results for the three months ended November 30, 2024, which included the following:
Current report
Revenue increased $67.1 million and 8.3% compared to the same period last year driven by higher railcar deliveries.
Current report
Margin percentage was 19.8%, our highest percentage in over seven years. This represents a 4.8% improvement compared to the same period last year. The increase was driven by operating efficiencies and a favorable product mix in our Manufacturing segment.
Current report
Earnings from operations was $111.8 million, which represented an increase of 72.3% compared to the same period last year. The increase was attributed to the higher Revenue and Margin percentage described above.
Current report
Effective September 1, 2024, we combined our former Maintenance Services and Manufacturing segments into a single reportable segment, Manufacturing. The combined Manufacturing reportable segment reflects a comprehensive production operation that allows us to streamline production processes and resources to better serve our customers. Separately, we renamed the former Leasing & Management Services reportable segment to Leasing & Fleet Management. These changes reflect the realignment of our organizational structure and reporting regularly provided to our chief operating decision maker to assess performance and allocate resources. These changes had no impact on our consolidated results of operations or financial position. Prior period segment results have been recast to reflect our new reportable segments. See Note 12 - Segment Information to the Condensed Consolidated Financial Statements for additional information for additional information on our reportable segments.
Current report
Revenue increased 8.3% for the three months ended November 30, 2024 as compared to the three months ended November 30, 2023 primarily due to a 7.7% increase in railcar deliveries in the Manufacturing segment.
Current report
Net earnings attributable to Greenbrier increased $24.1 million for the three months ended November 30, 2024 as compared to the three months ended November 30, 2023 primarily due to:
Current report
$5.7 million increase in Selling and administrative expense primarily attributed to higher employee related costs for the three months ended November 30, 2024.
Current report
Manufacturing Revenue increased $60.7 million or 8.0% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023 primarily due to a 7.7% increase in railcar deliveries.
Current report
Manufacturing Cost of revenue increased $7.9 million or 1.2% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase was primarily attributed to a 7.7% increase in railcar deliveries partially offset by operating efficiencies during the three months ended November 30, 2024.
Current report
Manufacturing Margin percentage increased 5.6% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase was primarily attributed to operating efficiencies and a favorable product mix during the three months ended November 30, 2024.
Current report
Manufacturing Earnings from operations increased $51.2 million for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase was primarily attributed to a 7.7% increase in railcar deliveries, operating efficiencies and a favorable product mix during the three months ended November 30, 2024.
Current report
Leasing & Fleet Management Segment
Current report
Leasing & Fleet Management Margin percentage decreased 9.0% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The decrease was primarily attributed to lower syndication activity and higher sales of railcars that we purchased from third parties, which have lower margin percentages, for the three months ended November 30, 2024. These were partially offset by improved lease rates for the three months ended November 30, 2024.
Current report
Selling and administrative expense was $62.0 million or 7.1% of Revenue for the three months ended November 30, 2024 compared to $56.3 million or 7.0% of Revenue for the prior comparable period. The $5.7 million increase was primarily attributed to higher employee related costs for the three months ended November 30, 2024.
Current report
Net (Gain) Loss on Disposition of Equipment
Current report
The $0.2 million increase in Interest and foreign exchange expense for the three months ended November 30, 2024 compared to the three months ended November 30, 2023 was attributed to a $2.0 million increase in foreign exchange loss primarily due to the change in the Brazilian Real's and Mexican Peso's foreign exchange rate relative to the U.S. Dollar. This was partially offset by a decrease in interest expense from lower interest rates.
Current report
For the three months ended November 30, 2024, we had Income tax expense of $33.4 million on pre-tax income of $88.4 million for an effective tax rate of 37.8%. The effective tax rate includes net discrete tax expenses of $6.7 million, primarily related to foreign currency exchange rates at our U.S. Dollar denominated foreign operations.
Current report
For the three months ended November 30, 2023, we had Income tax expense of $10.0 million on pre-tax income of $41.7 million for an effective tax rate of 24.0%. The effective tax rate includes net discrete tax benefits of $3.4 million, primarily related to our U.S. Dollar denominated foreign operations.
Current report
During the three months ended November 30, 2024, we became subject to minimum tax legislation in Europe modeled after the Organization for Economic Co-operation and Development (OECD) Global Anti-Base Erosion Model Rules (Pillar Two). At this time, we do not expect Pillar Two to have a material impact on our Consolidated Financial Statements and will continue to monitor our potential exposure as the U.S., Mexico and Brazil work to enact similar legislation that aligns with the OECD framework.
Current report
The $67.4 million decrease in Net cash provided by financing activities for the three months ended November 30, 2024 compared to the three months ended November 30, 2023 was primarily attributed to $179.5 million in lower proceeds from the issuance of notes payable, net of repayments. This was partially offset by a $114.6 million increase in net proceeds from revolving notes.
Current report
On January 8, 2025, the Board of Directors authorized the extension of the existing share repurchase program from January 31, 2025 to January 31, 2027 and renewed the amount remaining for repurchase to $100.0 million.
Current report
Goodwill- We evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amounts of our reporting units exceed their fair value. We test goodwill for impairment by either performing a qualitative or quantitative assessment. When we perform a qualitative assessment, we analyze macroeconomic and industry conditions, financial performance, and cost estimates associated with a particular reporting unit. This assessment requires subjectivity based on cumulative information available at the assessment date. If a qualitative assessment indicates it is more likely than not that the carrying value of a reporting unit exceeds its respective fair value, a quantitative assessment is performed.
Removed paragraphs (68)
Previous report
Management identifies the following trends which continue to impact our business and our results for the nine months ended May 31, 2024. Overall, demand in the marketplace is steady for our products and services. Supply chain challenges, rail service congestion, inflation, high interest rates, and labor shortages continue to impact our business. Despite this operating environment, we accomplished the following during the nine months ended May 31, 2024:
Previous report
Margin has improved $52.9 million and 16.8% compared to the same period last year driven by operating efficiencies and favorable product mix at our Manufacturing segment and higher rents associated with a larger fleet and improved lease rates in our Leasing and & Management Services segment.
Previous report
Net earnings attributable to Greenbrier of $98.5 million reflects an increase of $60.8 million compared to the same period last year driven in part by operating efficiencies in connection with the ongoing optimization of our industrial footprint to support our strategic plan discussed below.
Previous report
Obtained new railcar orders of 17,300 units valued at approximately $2.2 billion during the nine months ended May 31, 2024.
Previous report
The 21.0% decrease in Revenue for the three months ended May 31, 2024 as compared to the three months ended May 31, 2023 was primarily due to a 21.3% decrease in Manufacturing revenue and 43.1% decrease in Maintenance Services revenue. The decrease in Manufacturing revenue was primarily attributed to a 21.9% decrease in railcar deliveries during the three months ended May 31, 2024. The decrease in Maintenance Services revenue was primarily due to 27.6% lower volumes in our wheels business and a change in product mix during the three months ended May 31, 2024.
Previous report
The 23.5% decrease in Cost of revenue for the three months ended May 31, 2024 as compared to the three months ended May 31, 2023 was primarily due to a 22.4% decrease in Manufacturing cost of revenue and a 43.8% decrease in Maintenance Services cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to a 21.9% decrease in railcar deliveries during the three months ended May 31, 2024. The decrease in Maintenance Services cost of revenue was primarily due to operating at lower volumes and a change in product mix during the three months ended May 31, 2024.
Previous report
The $12.6 million increase in Net earnings attributable to Greenbrier for the three months ended May 31, 2024 as compared to the three months ended May 31, 2023 was primarily due to:
Previous report
Prior year included $16.4 million in Asset impairment, disposal, and exit costs during the three months ended May 31, 2023.
Previous report
$5.5 million increase in Net gain on disposition of equipment from higher sales of assets from our lease fleet during the three months ended May 31, 2024.
Previous report
$4.0 million decrease in Selling and administrative expense for the three months ended May 31, 2024.
Previous report
$4.3 million decrease in Margin for the three months ended May 31, 2024 primarily due to fewer railcar deliveries.
Previous report
Our Manufacturing segment primarily generates revenue from manufacturing a wide range of freight railcars and from the conversion of existing railcars through our facilities in North America and Europe.
Previous report
Manufacturing Revenue decreased $185.1 million or 21.3% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The decrease in Revenue was primarily attributed to a 21.9% decrease in railcar deliveries during the three months ended May 31, 2024.
Previous report
Manufacturing Cost of revenue decreased $176.0 million or 22.4% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The decrease in Cost of revenue was primarily attributed to a 21.9% decrease in railcar deliveries during the three months ended May 31, 2024.
Previous report
Manufacturing Margin as a percentage of revenue increased 1.3% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The increase in margin percentage for the three months ended May 31, 2024 was primarily attributed to favorable product mix during the three months ended May 31, 2024.
Previous report
Manufacturing Operating profit increased $10.1 million for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The increase in operating profit was primarily attributed to the prior year including a $14.3 million loss on the sale of Gunderson Marine during the three months ended May 31, 2023. This was partially offset by $9.1 million decrease in Margin attributed to a 21.9% decrease in railcar deliveries during the three months ended May 31, 2024.
Previous report
Maintenance Services Segment
Previous report
Our Maintenance Services segment primarily generates revenue from railcar component manufacturing and servicing and from providing railcar maintenance services.
Previous report
Maintenance Services Revenue decreased $53.0 million or 43.1% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The decrease was primarily attributed to 27.6% lower volumes in our wheels business and a change in product mix during the three months ended May 31, 2024.
Previous report
Maintenance Services Cost of revenue decreased $48.1 million or 43.8% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The decrease was primarily due to operating at lower volumes and a change in product mix during the three months ended May 31, 2024.
Previous report
Maintenance Services Margin as a percentage of revenue increased 1.1% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The increase in margin percentage was primarily attributed to the a change in product mix during the three months ended May 31, 2024.
Previous report
Maintenance Services Operating profit decreased $5.1 million for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The decrease in Operating profit was primarily attributed to operating at lower volumes during the three months ended May 31, 2024.
Previous report
Leasing & Management Services Segment
Previous report
Leasing & Management Services Margin as a percentage of revenue decreased 6.7% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. Margin as a percentage of revenue for the three months ended May 31, 2024 was negatively impacted by higher sales of railcars that we purchased from third parties which have lower margin percentages.
Previous report
Selling and administrative expense was $59.3 million or 7.2% of Revenue for the three months ended May 31, 2024 compared to $63.3 million or 6.1% of Revenue for the prior comparable period. The $4.0 million decrease was primarily attributed to lower short-term incentive compensation for the three months ended May 31, 2024 as a result of timing of financial performance when compared to the prior year.
Previous report
Asset Impairment, Disposal and Exit Costs
Previous report
The three months ended May 31, 2023 included a loss on the sale of Gunderson Marine of $14.3 million and $2.1 million of severance costs related to ceasing rail production at the Gunderson Facility.
Previous report
The $1.9 million increase in Interest and foreign exchange expense for the three months ended May 31, 2024 compared to the three months ended May 31, 2023 was primarily attributed to an increase in interest expense from higher borrowings.
Previous report
For the three months ended May 31, 2024, we had Income tax expense of $10.7 million on pre-tax income of $47.6 million for an effective tax rate of 22.5%. The effective tax rate primarily benefited from net favorable adjustments related to our foreign subsidiaries and U.S. tax credits.
Previous report
For the three months ended May 31, 2023, we had Income tax expense of $3.6 million on a pre-tax income of $27.9 million for an effective tax rate of 12.9%. Tax expense included net favorable discrete items primarily related to changes in foreign currency exchange rates for our U.S. Dollar denominated foreign operations.
Previous report
Nine Months Ended May 31, 2024 Compared to the Nine Months Ended May 31, 2023
Previous report
Overview
Previous report
Consolidated Results
Previous report
The 14.9% decrease in Revenue for the nine months ended May 31, 2024 as compared to the nine months ended May 31, 2023 was primarily due to a 15.6% decrease in Manufacturing revenue. The decrease in Manufacturing revenue was primarily attributed to a 14.4% decrease in railcar deliveries during the nine months ended May 31, 2024.
Previous report
The 18.7% decrease in Cost of revenue for the nine months ended May 31, 2024 as compared to the nine months ended May 31, 2023 was primarily due to a 18.5% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to a 14.4% decrease in railcar deliveries during the nine months ended May 31, 2024.
Previous report
Margin as a percentage of revenue was 14.7% and 10.7% for the nine months ended May 31, 2024 and May 31, 2023, respectively. Margin as a percentage of revenue was positively impacted by an increase in Manufacturing margin from 7.8% to 10.9% primarily attributed to operating efficiencies and favorable product mix during the nine months ended May 31, 2024.
Previous report
The $60.8 million increase in Net earnings attributable to Greenbrier for the nine months ended May 31, 2024 as compared to the nine months ended May 31, 2023 was primarily due to the following:
Previous report
Prior year included $40.6 million in Asset impairment, disposal and exit costs for the nine months ended May 31, 2023 related to the sale and closure of our Gunderson Facility.
Previous report
$8.5 million increase in Interest and foreign exchange primarily attributed to an increase in interest expense from higher borrowings for the nine months ended May 31, 2024.
Previous report
Manufacturing Segment
Showing the first 40 of 68 passages. Open the source sections for the rest.
Reworded paragraphs (41)
Previous wording
We operate in three reportable segments: Manufacturing; Maintenance Services; and Leasing & Management Services. Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, and Romania, produces freight railcars, tank cars, intermodal railcars and automotive railcar products. The Maintenance Services segment performs wheel and axle servicing, railcar maintenance and produces a variety of parts for the rail industry in North America. The Leasing & Management Services segment owns approximately 15,200 railcars as of May 31, 2024. We also provide management services for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.
Current wording
We operate in two reportable segments: Manufacturing and Leasing & Fleet Management. Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland and Romania, produces freight railcars, tank cars, intermodal railcars, automotive railcar products, sustainable conversions, and a variety of parts for the rail industry. We also perform railcar maintenance, which includes wheel and axle servicing. The Leasing & Fleet Management segment owns approximately 16,700 railcars as of November 30, 2024. We also provide fleet management for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.
Previous wording
We believe our results highlight our continued focus on our strategic plan and we remain focused on increasing recurring revenue, expanding our aggregate gross margin, and raising our return on invested capital. Recurring revenue is defined as Leasing & Management Services revenue excluding the impact of syndication transactions.
Current wording
We believe our results highlight our continued focus on our strategic plan and we remain focused on increasing recurring revenue, expanding our aggregate gross margin, and raising our return on invested capital. Recurring revenue is defined as Leasing & Fleet Management revenue excluding the impact of syndication transactions.
Previous wording
Our backlog remains strong with railcar deliveries into 2027. Our railcar backlog was 29,400 units with an estimated value of $3.7 billion as of May 31, 2024. Our backlog includes nearly $740 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Approximately 2% of backlog units and estimated backlog value as of May 31, 2024 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.
Current wording
Our railcar backlog was 23,400 units with an estimated value of $3.0 billion as of November 30, 2024, with deliveries extending into 2026 and beyond. Our backlog includes approximately $660 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Approximately 2% of backlog units and estimated backlog value as of November 30, 2024 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.
Previous wording
As described in Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2023 the items described above may have a material negative impact on our business, liquidity, results of operations and stock price. Beyond these general observations, we are unable to predict when, how, or with what magnitude these items will impact our business.
Current wording
As described in Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024 the items described therein may have a material negative impact on our business, liquidity, results of operations and stock price. Beyond these general observations, we are unable to predict when, how, or with what magnitude these items will impact our business.
Previous wording
Revenue, Cost of revenue, Margin and Earnings from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
Current wording
Revenue, Cost of revenue, Margin and Earnings from operations presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
Previous wording
Performance for our segments is evaluated based on operating profit or loss. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.
Current wording
Performance for our segments is evaluated based on Earnings from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.
Previous wording
Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.
Current wording
Through our integrated business model, we provide a broad range of custom products and services in each of our reportable segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results.
Previous wording
Leasing & Management Services Cost of revenue increased $13.3 million or 32.4% for the nine months ended May 31, 2024 compared to the nine months ended May 31, 2023. The increase was primarily due to higher costs from an increase in the volume of railcars sold that we purchased from third parties and a larger fleet and during the nine months ended May 31, 2024.
Current wording
Cost of revenue increased 2.2% for the three months ended November 30, 2024 as compared to the three months ended November 30, 2023 primarily due to a 7.7% increase in railcar deliveries partially offset by operating efficiencies in the Manufacturing segment. The increase was also due to higher costs in the Leasing & Fleet Management segment from a greater volume of railcars sold that we purchased from third parties and a larger fleet during the three months ended November 30, 2024.
Previous wording
Margin as a percentage of revenue was 15.1% and 12.3% for the three months ended May 31, 2024 and May 31, 2023, respectively. Margin as a percentage of revenue was positively impacted by favorable product mix within our Manufacturing segment during the three months ended May 31, 2024. This was partially offset by a 6.7% decrease in Leasing & Management Services margin as a percentage of revenue for the three months ended May 31, 2024 from higher sales of railcars that we purchased from third parties which have lower margin percentages.
Current wording
Margin percentage increased 4.8% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023 primarily due to operating efficiencies and a favorable product mix within our Manufacturing segment. This was partially offset by a 9.0% decrease in Leasing & Fleet Management Margin percentage for the three months ended November 30, 2024 from lower syndication activity and higher sales of railcars that we purchased from third parties which have lower margin percentages.
Previous wording
$52.9 million increase in Margin for the nine months ended May 31, 2024 primarily due to operating efficiencies and a favorable product mix within our Manufacturing segment and an increase in rents associated with a larger fleet and improved lease rates in our Leasing & Management Services segment.
Current wording
$52.3 million increase in Margin primarily due to a 7.7% increase in railcar deliveries, operating efficiencies and a favorable product mix within our Manufacturing segment for the three months ended November 30, 2024.
Previous wording
These were partially offset by the following:
Current wording
This was partially offset by the following:
Previous wording
$7.1 million increase in Income tax expense associated with higher pre-tax earnings during the three months ended May 31, 2024.
Current wording
$23.4 million increase in Income tax expense associated with higher pre-tax earnings and a higher effective tax rate for the three months ended November 30, 2024 due to the net unfavorable discrete impact of our U.S. Dollar denominated foreign operations.
Previous wording
Our Manufacturing segment primarily generates revenue from manufacturing a wide range of freight railcars and from the conversion of existing or in-service railcars through our facilities in North America and Europe.
Current wording
Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products, components and the conversion of existing or in-service railcars. Manufacturing also generates revenue by providing railcar maintenance services.
Previous wording
Our Leasing & Management Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, syndication revenue associated with leases attached to new railcar sales, interim rent on leased railcars for syndication and the sale of railcars purchased from third parties with the intent to resell.
Current wording
The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management, syndication activity associated with leases attached to new railcar sales, interim rent on leased railcars for syndication and the sale of railcars purchased from third parties with the intent to resell.
Previous wording
Leasing & Management Services Revenue increased $20.2 million or 44.9% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The increase was primarily attributed to a $8.9 million increase in the sale of railcars which we had purchased from third parties with the intent to resell and an increase of $5.3 million in rents associated with a larger fleet and improved lease rates during the three months ended May 31, 2024.
Current wording
Leasing & Fleet Management Revenue increased $6.4 million or 13.0% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase was primarily attributed to an increase of $6.6 million in rents associated with a larger fleet and improved lease rates and $6.0 million increase in the sale of railcars which we had purchased from third parties with the intent to resell during the three months ended November 30, 2024. These were partially offset by lower syndication activity during the three months ended November 30, 2024.
Previous wording
Leasing & Management Services Cost of revenue increased $10.5 million or 76.6% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The increase was primarily due to higher costs from an increase in the volume of railcars sold that we purchased from third parties and a larger fleet during the three months ended May 31, 2024.
Current wording
Leasing & Fleet Management Cost of revenue increased $6.9 million or 46.0% for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase was primarily due to higher costs from an increase in the volume of railcars sold that we purchased from third parties and a larger fleet during the three months ended November 30, 2024.
Previous wording
Leasing & Management Services Operating profit increased $14.6 million for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates and $5.0 million higher Net gain on disposition of equipment during the three months ended May 31, 2024.
Current wording
Leasing & Fleet Management Earnings from operations increased $0.4 million for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates partially offset by lower syndication activity for the three months ended November 30, 2024.
Previous wording
Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our fleet and to manage risk and liquidity.
Current wording
Net (gain) loss on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our lease fleet and to manage risk and liquidity.
Previous wording
Net gain on disposition of equipment was $7.8 million for the three months ended May 31, 2024 compared to $2.3 million for the prior comparable period. The increase in Net gain on disposition of equipment was primarily attributed to higher sales of assets from our lease fleet during the three months ended May 31, 2024.
Current wording
Net gain on disposition of equipment was $0.2 million for the three months ended November 30, 2024 compared to a loss of $0.1 million for the prior comparable period. The increase in Net gain on disposition of equipment was primarily attributed to higher sales of assets from our lease fleet during the three months ended November 30, 2024.
Previous wording
The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in earnings before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense.
Current wording
The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to changes in the mix of our foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in earnings before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense.
Previous wording
Earnings from unconsolidated affiliates were $3.7 million and $2.4 million for the three months ended May 31, 2024 and May 31, 2023, respectively. The increase was primarily related to $2.4 million in higher earnings at our Brazil operations for the three months ended May 31, 2024.
Current wording
Earnings from unconsolidated affiliates were $4.1 million and $1.5 million for the three months ended November 30, 2024 and November 30, 2023, respectively. The increase was primarily related to $1.5 million in higher earnings at our Brazil operations for the three months ended November 30, 2024.
Previous wording
Net earnings attributable to noncontrolling interest was $6.7 million for the three months ended May 31, 2024 compared to $5.4 million for the three months ended May 31, 2023. Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
Current wording
Net earnings attributable to noncontrolling interest was $3.8 million for the three months ended November 30, 2024 compared to $2.0 million for the three months ended November 30, 2023. Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
Previous wording
We have been financed through cash generated from operations and borrowings. At May 31, 2024 Cash and cash equivalents and Restricted cash were $291.8 million, a decrease of $10.9 million from $302.7 million at August 31, 2023.
Current wording
We continue to be financed through cash generated from operations and borrowings. At November 30, 2024 Cash and cash equivalents and Restricted cash were $312.9 million, a decrease of $55.7 million from $368.6 million at August 31, 2024.
Previous wording
The $137.2 million increase in cash from operating activities for the nine months ended May 31, 2024 compared to the nine months ended May 31, 2023 was primarily due to a $61.2 million increase in Net earnings and $56.2 million net change in working capital.
Current wording
The $20.4 million increase in Net cash used in operating activities for the three months ended November 30, 2024 compared to the three months ended November 30, 2023 was primarily due to a $63.3 million change in Leased railcars for syndication and a $14.8 million net change in working capital. This was partially offset by a $25.9 million increase in Net earnings and a $27.9 million change in Deferred income taxes.
Previous wording
Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates. Proceeds from the sale of assets primarily relate to fleet sales in our Leasing & Management Services segment. The $79.5 million increase in cash used in investing activities for the nine months ended May 31, 2024 was primarily attributable to a $70.8 million increase in capital expenditures compared to the nine months ended May 31, 2023.
Current wording
Net cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets. The $13.6 million decrease in cash used in investing activities for the three months ended November 30, 2024 was primarily attributable to a $9.2 million decrease in capital expenditures compared to the three months ended November 30, 2023.
Previous wording
Capital expenditures primarily relate to additions to our lease fleet and on-going investments into the safety and productivity of our facilities. Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Management Services. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity. Proceeds from sales of assets are expected to be approximately $75 million for 2024.
Current wording
Capital expenditures primarily relate to additions to our lease fleet and on-going investments in the safety, productivity and improvements of our facilities. Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Fleet Management. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity. Proceeds from sales of assets are expected to be approximately $60 million for 2025.
Previous wording
Gross capital expenditures for 2024 are expected to be approximately $280 million for Leasing & Management Services, approximately $150 million for Manufacturing and approximately $15 million for Maintenance Services. Capital expenditures for 2024 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.
Current wording
Gross capital expenditures for 2025 are expected to be approximately $360 million for Leasing & Fleet Management and approximately $120 million for Manufacturing. Capital expenditures for 2025 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.
Previous wording
The $165.3 million increase in cash flow from financing activities for the nine months ended May 31, 2024 compared to the nine months ended May 31, 2023 was primarily attributed to a $71.6 million increase in net proceeds from revolving notes and $53.7 million higher proceeds from the issuance of notes payable, net of repayments. During the nine months ended May 31, 2024 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our GBX Leasing warehouse facility. We also drew $146.9 million on the GBX Leasing warehouse facility to grow the fleet. In February 2024, we paid $47.7 million to retire our 2024 Convertible Notes.
Current wording
During the three months ended November 30, 2023 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our GBX Leasing warehouse facility. We also drew $65.1 million on the GBX Leasing warehouse facility to grow the fleet.
Previous wording
The Board of Directors has authorized our company to repurchase shares of our common stock. The share repurchase program has an expiration date of January 31, 2025. Under the share repurchase program, shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions. The timing and amount of purchases is based upon market conditions, securities law limitations and other factors. The program may be modified, suspended or discontinued at any time without prior notice. The share repurchase program does not obligate us to acquire any specific number of shares in any period.
Current wording
The Board of Directors has authorized our company to repurchase in aggregate up to $100.0 million of our common stock. The program may be modified, suspended, or discontinued at any time without prior notice and as of November 30, 2024 had an expiration date of January 31, 2025. Under the share repurchase program, shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions. The timing and amount of purchases is based upon market conditions, securities law limitations and other factors. The program may be modified, suspended, or discontinued at any time without prior notice. The share repurchase program does not obligate us to acquire any specific number of shares in any period.
Previous wording
During the nine months ended May 31, 2024, we purchased a total of 38 thousand shares for $1.3 million. As of May 31, 2024, the amount remaining for repurchase under the share repurchase program was $45.1 million. During the nine months ended May 31, 2023, we purchased a total of 1.7 million shares for $49.4 million.
Current wording
There were no share repurchases during the three months ended November 30, 2024. As of November 30, 2024, the amount remaining for repurchase under the share repurchase program was $45.1 million. During the three months ended November 30, 2023, we purchased a total of 38 thousand shares for $1.3 million.
Previous wording
As of May 31, 2024, we had $271.6 million in Cash and cash equivalents and $333.7 million in available borrowings. The available balance to draw under committed credit facilities includes $223.7 million on the North American credit facility, $39.0 million on the European credit facilities and $71.0 million on the Mexican credit facilities.
Current wording
As of November 30, 2024, we had $300.0 million in Cash and cash equivalents and $248.7 million in available borrowings. The available balance to draw under committed credit facilities includes $139.5 million on the North American credit facility, $18.2 million on the European credit facilities and $91.0 million on the Mexican credit facilities.
Previous wording
Senior secured credit facilities aggregated to $1.4 billion as of May 31, 2024 which consisted of the following components:
Current wording
Senior secured credit facilities aggregated to $1.3 billion as of November 30, 2024 which consisted of the following components:
Previous wording
GBX Leasing – As of May 31, 2024, a $550.0 million non-recourse warehouse credit facility existed to support the operations of GBX Leasing. Advances under this facility bear interest at SOFR plus 1.85% plus 0.11% as a SOFR adjustment. Interest rate swap agreements cover approximately 99% of the outstanding balance to swap the floating interest rate to a fixed rate. The warehouse credit facility converts to a term loan in August 2025 and matures in August 2027.
Current wording
GBX Leasing – As of November 30, 2024, a $450.0 million non-recourse warehouse credit facility existed to support the operations of GBX Leasing. Advances under this facility bear interest at SOFR plus 1.70%. Interest rate swap agreements cover approximately 85% of the outstanding balance to swap the floating interest rate to a fixed rate. The warehouse credit facility converts to a term loan in September 2027 and matures in September 2029.
Previous wording
Europe – As of May 31, 2024, lines of credit totaling $76.4 million secured by certain of our European assets, with variable rates that range from WIBOR plus 1.10% to WIBOR plus 1.45% and EURIBOR plus 1.90%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $32.5 million which is guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from July 2024 through November 2025.
Current wording
Europe – As of November 30, 2024, lines of credit totaling $74.5 million secured by certain of our European assets, with variable rates that range from WIBOR plus 1.10% to WIBOR plus 1.40% and EURIBOR plus 1.90%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $31.7 million which is guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2025 through September 2026.
Previous wording
Mexico – As of May 31, 2024, our Mexican railcar manufacturing operations had lines of credit totaling $196.0 million for working capital needs, $96.0 of which we and our joint venture partner have each guaranteed 50%. Advances under these facilities bear interest at variable rates that range from SOFR plus 2.22% to SOFR plus 4.25%. The Mexican credit facilities have maturities that range from February 2025 through January 2027.
Current wording
Mexico – As of November 30, 2024, our Mexican railcar manufacturing operations had lines of credit totaling $166.0 million for working capital needs, $66.0 million of which we and our joint venture partner have each guaranteed 50%. Advances under these facilities bear interest at variable rates that range from SOFR plus 2.22% to SOFR plus 4.25%. The Mexican credit facilities have maturities that range from February 2025 through January 2027.
Previous wording
Outstanding commitments under the North American credit facility included letters of credit which totaled $5.9 million and $4.9 million as of May 31, 2024 and August 31, 2023, respectively.
Current wording
Outstanding commitments under the North American credit facility included letters of credit which totaled $6.6 million and $5.9 million as of November 30, 2024 and August 31, 2024, respectively.
Previous wording
The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us and our various subsidiaries, the most restrictive of which, among other things, limit our ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into financing leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all our assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest plus rent) coverage. As of May 31, 2024, we were in compliance with all such restrictive covenants.
Current wording
The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us, the most restrictive of which, among other things, limit our ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into financing leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all our assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest plus rent) coverage. As of November 30, 2024, we were in compliance with all such restrictive covenants.
Previous wording
We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency, we enter into foreign currency forward exchange contracts with established financial institutions to protect the margin on a portion of foreign currency sales in firm backlog.
Current wording
We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency, we enter into foreign exchange contracts with established financial institutions to protect the margin on a portion of foreign currency sales in firm backlog.
Previous wording
To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $659.7 million of variable rate debt to fixed rate debt as of May 31, 2024.
Current wording
To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $667.8 million of variable rate debt to fixed rate debt as of November 30, 2024.
Previous wording
Goodwill- We evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amounts of our reporting units exceed their fair value. When we perform a quantitative assessment, we exercise judgment to develop estimates of the fair values of our reporting units based on a weighting of income and market approaches. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates. Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.
Current wording
When we perform a quantitative assessment, we exercise judgment to develop estimates of the fair values of our reporting units based on a weighting of income and market approaches. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates. Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (13)
Previous report — wording carried elsewhere
Net Gain on Disposition of Equipment
Previous report — wording carried elsewhere
Revenue, Cost of revenue, Margin and Earnings from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
Previous report — wording carried elsewhere
Performance for our segments is evaluated based on operating profit or loss. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.
Previous report — wording carried elsewhere
Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.
Previous report — wording carried elsewhere
These were partially offset by the following:
Previous report — wording carried elsewhere
$18.3 million increase in Income tax expense associated with higher pre-tax earnings during the nine months ended May 31, 2024.
Previous report — wording carried elsewhere
Our Leasing & Management Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, syndication revenue associated with leases attached to new railcar sales, interim rent on leased railcars for syndication and the sale of railcars purchased from third parties with the intent to resell.
Previous report — wording carried elsewhere
Net Gain on Disposition of Equipment
Previous report — wording carried elsewhere
Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our fleet and to manage risk and liquidity.
Previous report — wording carried elsewhere
Interest and foreign exchange expense was composed of the following:
Previous report — wording carried elsewhere
The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in earnings before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense.
Previous report — wording carried elsewhere
Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis.
Previous report — wording carried elsewhere
Net earnings attributable to noncontrolling interest was $8.9 million for the nine months ended May 31, 2024 compared to $8.5 million for the nine months ended May 31, 2023. Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.