GREENBRIER COMPANIES INC

Previous 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.

Current wording

We operate in two reportable segments: Manufacturing and Leasing & Fleet Management. Our segments are operationally integrated. The Manufacturing segment, which primarily 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 16,600 railcars as of February 28, 2025. We also provide fleet management for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.

Previous wording

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 wording

We continue to execute on our multi-year strategy. Overall, demand in the marketplace is relatively steady for our products and services. We delivered strong results for the six months ended February 28, 2025, which included the following:

Previous wording

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 wording

Margin percentage of 19.1% which was a 4.5% improvement compared to the same period last year. The increase was driven by operating efficiencies and a favorable product mix in our Manufacturing segment.

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 & Fleet Management 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 aggregate gross margin, and raising return on invested capital. Recurring revenue is defined as Leasing & Fleet Management revenue excluding the impact of syndication transactions. With a global footprint, supply chain and customer base, we are focused on navigating the impact of changing trade policies, such as tariffs, as well as general geopolitical and macroeconomic uncertainty.

Previous 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.

Current wording

Our railcar backlog was 20,400 units with an estimated value of $2.6 billion as of February 28, 2025, with deliveries extending into 2026 and beyond. Our backlog includes approximately $590 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 6% of backlog units and 5% of estimated backlog value as of February 28, 2025 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, 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.

Current wording

Risks, uncertainties and other important factors described in Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024 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

Three Months Ended November 30, 2024 Compared to the Three Months Ended November 30, 2023

Current wording

Revenue decreased 11.7% for the three months ended February 28, 2025 as compared to the three months ended February 29, 2024 primarily due to a 5.7% decrease in railcar deliveries and a change in product mix.

Previous 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.

Current wording

Leasing & Fleet Management Cost of revenue increased $3.0 million or 19.9% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily due to higher costs from a larger fleet during the three months ended February 28, 2025.

Previous wording

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 wording

Leasing & Fleet Management Margin percentage decreased 0.1% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The decrease was primarily attributed to higher sales of railcars that we purchased from third parties, which have lower margin percentages, during the three months ended February 28, 2025. This was partially offset by improved lease rates and higher syndication activity for the three months ended February 28, 2025.

Previous 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.

Current wording

Leasing & Fleet Management Earnings from operations increased $12.4 million for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates, a $4.3 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet and higher syndication activity for the three months ended February 28, 2025.

Previous wording

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 wording

Selling and administrative expense was $64.6 million for the three months ended February 28, 2025 compared to $63.6 million for the prior comparable period. The $1.0 million increase was primarily attributed to higher employee-related costs for the three months ended February 28, 2025.

Previous 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.

Current 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 lease fleet and to manage risk and liquidity.

Previous 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.

Current wording

Net gain on disposition of equipment was $9.6 million for the three months ended February 28, 2025 compared to $4.9 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 February 28, 2025.

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 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.

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 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 $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.

Current wording

Earnings from unconsolidated affiliates were $4.3 million and $4.0 million for the three months ended February 28, 2025 and February 29, 2024, respectively. The increase was primarily related to $0.5 million in higher earnings at our Brazil operations for the three months ended February 28, 2025.

Previous 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.

Current wording

Margin percentage increased 4.5% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 primarily due to operating efficiencies within our Manufacturing segment. This was partially offset by a 4.2% decrease in Leasing & Fleet Management Margin percentage for the six months ended February 28, 2025 primarily attributed to higher sales of railcars that we purchased from third parties, which have lower margin percentages, and lower syndication activity.

Previous 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.

Current wording

$68.7 million increase in Margin primarily due to operating efficiencies within our Manufacturing segment for the six months ended February 28, 2025.

Previous wording

$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 wording

$6.7 million increase in Selling and administrative expense primarily attributed to higher employee-related costs for the six months ended February 28, 2025.

Previous 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.

Current wording

Leasing & Fleet Management Revenue increased $16.5 million or 16.4% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The increase was primarily attributed to an increase of $14.4 million in rents associated with growth of the fleet and improved lease rates in addition to a $6.8 million increase in the sale of railcars which we had purchased from third parties with the intent to resell during the six months ended February 28, 2025. These were partially offset by lower syndication activity during the six months ended February 29, 2024.

Previous 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.

Current wording

Leasing & Fleet Management Cost of revenue increased $9.9 million or 32.9% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. 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 six months ended February 28, 2025.

Previous wording

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 wording

The $2.7 million decrease in Interest and foreign exchange expense for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 was attributed to a higher interest income during the six months ended February 28, 2025. This was partially offset by a $2.6 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.

Previous wording

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 wording

During the six months ended February 28, 2025, 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.

Previous 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.

Current wording

Net loss attributable to noncontrolling interest was $1.9 million for the six months ended February 28, 2025 compared to Net earnings attributable to noncontrolling interest of $2.2 million for the six months ended February 29, 2024. Net (earnings) loss 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 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.

Current wording

We continue to be financed through cash generated from operations and borrowings. At February 28, 2025 Cash and cash equivalents and Restricted cash were $301.9 million, a decrease of $66.7 million from $368.6 million at August 31, 2024.

Previous 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.

Current wording

The $25.9 million decrease in Net cash provided by operating activities for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 was primarily due to a $139.7 million change in Leased railcars for syndication due to timing of syndication activity. This was partially offset by a $48.9 million change in Deferred income taxes, a $38.5 million increase in Net earnings and a $22.0 million net change in working capital accounts, primarily Inventories, Deferred revenue, and Accounts payable and accrued liabilities.

Previous 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.

Current wording

Net cash used in investing activities primarily related to capital expenditures net of Proceeds from the sale of assets. The $98.1 million decrease in cash used in investing activities for the six months ended February 28, 2025 was primarily attributable to a $64.1 million decrease in Capital expenditures and a $29.7 million increase in proceeds from the sale of assets compared to the six months ended February 29, 2024.

Previous 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.

Current wording

Gross capital expenditures for 2025 are expected to be approximately $300 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 $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 wording

The $111.4 million change in Net cash provided by (used in) financing activities for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 was primarily attributed to $131.6 million in lower proceeds from the issuance of notes payable, net of repayments. This was partially offset by a $19.7 million increase in net proceeds from revolving notes.

Previous 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.

Current wording

During the six months ended February 29, 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 $65.1 million on the GBX Leasing warehouse facility to grow the fleet.

Previous wording

A quarterly dividend of $0.30 per share was declared on January 8, 2025.

Current wording

A quarterly dividend of $0.32 per share was declared on April 1, 2025.

Previous 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.

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. 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. 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

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.

Current wording

During the six months ended February 28, 2025, there were no shares repurchased. During the six months ended February 29, 2024, we repurchased a total of 38 thousand shares for $1.3 million. As of February 28, 2025, the amount remaining for repurchase under the share repurchase program was $100.0 million.

Previous 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.

Current wording

As of February 28, 2025, we had $263.5 million in Cash and cash equivalents and $488.0 million in available borrowings. The available balance to draw under committed credit facilities includes $366.0 million on the North American credit facility, $26.0 million on the European credit facilities and $96.0 million on the Mexican credit facilities.

Previous 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.

Current wording

GBX Leasing – As of February 28, 2025, a $450.0 million nonrecourse warehouse credit facility existed to support the operations of GBX Leasing. Advances under this facility bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.70%. Interest rate swap agreements cover approximately 88% 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 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.

Current wording

Europe – As of February 28, 2025, lines of credit totaling $75.0 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 $31.2 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 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.

Current wording

Mexico – As of February 28, 2025, 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%.

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 $667.8 million of variable rate debt to fixed rate debt as of November 30, 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 $701.9 million of variable rate debt to fixed rate debt as of February 28, 2025.