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 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 16,800 railcars as of May 31, 2025. 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 designs, builds and markets freight railcars and component parts in North America and Europe. We also perform sustainable conversions and railcar maintenance, which includes wheel and axle services. The Leasing & Fleet Management segment owns and leases approximately 17,000 railcars as of November 30, 2025. We offer railcar management, regulatory compliance services and leasing services to railroads and other railcar owners 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 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.

Current wording

We continue to execute on our strategic plan of 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 18,900 units with an estimated value of $2.5 billion as of May 31, 2025, with deliveries extending into 2027 and beyond. Our backlog includes approximately $390 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 12% of backlog units and estimated backlog value as of May 31, 2025 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.

Current wording

Our railcar backlog was 16,300 units with an estimated value of $2.2 billion as of November 30, 2025, with deliveries extending into 2027 and beyond. Our backlog includes approximately $540 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 13% of backlog units and estimated backlog value as of November 30, 2025 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.

Previous wording

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 13 - Segment Information to the Condensed Consolidated Financial Statements for additional information for additional information on our reportable segments.

Current wording

Effective September 1, 2025, we changed our measurement basis for allocating revenue and expenses associated with syndication activity between our Manufacturing and Leasing & Fleet Management reportable segments. This change reflects the information currently provided to our CODM to assess performance and allocate resources and had no impact on our consolidated results of operations or financial position. Prior period segment results have been recast to conform to the current period presentation. See Note 11 - Segment Information to the Condensed Consolidated Financial Statements for additional information for additional information on our reportable segments.

Previous wording

$7.4 million increase in Income tax expense due to higher pre-tax earnings during the three months ended May 31, 2025.

Current wording

$21.1 million decrease in Income tax expense due to lower pre-tax earnings during the three months ended November 30, 2025.

Previous wording

Net Gain on Disposition of Equipment

Current wording

$17.5 million increase in Net gain on disposition of equipment primarily attributed to higher sales of assets from our lease fleet during the three months ended November 30, 2025.

Previous wording

$11.5 million decrease in Interest and foreign exchange expense primarily attributed to the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar and higher interest income during the three months ended May 31, 2025.

Current wording

$7.9 million decrease in Interest and foreign exchange expense primarily attributed to the change in the Mexican Peso's foreign exchange rates relative to the U.S. Dollar and higher interest income during the three months ended November 30, 2025.

Previous 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.

Current wording

Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products and components, syndication activity associated with leases attached to new railcar sales and performing sustainable conversion services. Manufacturing also generates revenue by providing railcar maintenance services.

Previous 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.

Current wording

The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management services and interim rent on leased railcars for syndication.

Previous wording

Leasing & Fleet Management Revenue increased $15.8 million or 9.5% for the nine months ended May 31, 2025 compared to the nine months ended May 31, 2024. The increase was primarily attributed to an increase of $21.3 million in rents associated with growth of the fleet and improved lease rates. This was partially offset by a $2.1 million decrease in the sale of railcars which we had purchased from third parties with the intent to resell during the nine months ended May 31, 2025.

Current wording

Leasing & Fleet Management Revenue increased $4.1 million or 9.1% for the three months ended November 30, 2025 compared to the three months ended November 30, 2024. The increase was primarily attributed to a $4.9 million increase in rents associated with growth of the lease fleet and improved lease rates for the three months ended November 30, 2025.

Previous wording

Leasing & Fleet Management Cost of revenue decreased $5.6 million or 23.1% for the three months ended May 31, 2025 compared to the three months ended May 31, 2024. The decrease was primarily due to fewer sales of railcars which we had purchased from third parties with the intent to resell during the three months ended May 31, 2025.

Current wording

Leasing & Fleet Management Cost of revenue increased $1.0 million or 5.9% for the three months ended November 30, 2025 compared to the three months ended November 30, 2024. The increase was primarily due to higher costs from a larger lease fleet during the three months ended November 30, 2025.

Previous wording

Leasing & Fleet Management Margin percentage increased 8.3% for the three months ended May 31, 2025 compared to the three months ended May 31, 2024. The increase was primarily attributed to fewer sales of railcars that we purchased from third parties, which have lower margin percentages, improved lease rates and higher syndication activity during the three months ended May 31, 2025.

Current wording

Leasing & Fleet Management Margin percentage increased 1.1% for the three months ended November 30, 2025 compared to the three months ended November 30, 2024. The increase was primarily attributed to improved lease rates during the three months ended November 30, 2025.

Previous wording

Leasing & Fleet Management Earnings from operations increased $17.6 million for the nine months ended May 31, 2025 compared to the nine months ended May 31, 2024. The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates in addition to a $3.2 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet for the nine months ended May 31, 2025.

Current wording

Leasing & Fleet Management Earnings from operations increased $22.1 million for the three months ended November 30, 2025 compared to the three months ended November 30, 2024. The increase was primarily attributed to a $17.6 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet and increase in rents associated with growth of the lease fleet and improved lease rates for the three months ended November 30, 2025.

Previous wording

Selling and administrative expense was $65.9 million for the three months ended May 31, 2025 compared to $59.3 million for the prior comparable period. The $6.6 million increase was primarily attributed to higher employee-related costs for the three months ended May 31, 2025.

Current wording

Selling and administrative expense was $59.9 million for the three months ended November 30, 2025 compared to $62.0 million for the prior comparable period. The $2.1 million decrease was primarily attributed to lower employee-related costs for the three months ended November 30, 2025.

Previous wording

Net gain on disposition of equipment was $7.0 million for the three months ended May 31, 2025 compared to $7.8 million for the prior comparable period. The decrease in Net gain on disposition of equipment was primarily attributed to lower sales of assets from our lease fleet during the three months ended May 31, 2025.

Current wording

Net gain on disposition of equipment was $17.7 million for the three months ended November 30, 2025 compared to $0.2 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, 2025.

Previous wording

The $11.5 million decrease in Interest and foreign exchange expense for the three months ended May 31, 2025 compared to the three months ended May 31, 2024 was primarily attributed to the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar and higher interest income during the three months ended May 31, 2025.

Current wording

The $7.9 million decrease in Interest and foreign exchange expense for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was primarily attributed to the change in the Mexican Peso's foreign exchange rates relative to the U.S. Dollar and higher interest income during the three months ended November 30, 2025.

Previous wording

For the nine months ended May 31, 2024, we had Income tax expense of $30.0 million on pre-tax income of $128.2 million for an effective tax rate of 23.4%. The effective tax rate benefited from net favorable discrete items related to U.S. tax credits and changes in foreign currency exchange rates for our U.S. Dollar denominated foreign operations.

Current wording

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.

Previous wording

Net earnings attributable to noncontrolling interest was $5.5 million for the nine months ended May 31, 2025 compared to $8.9 million for the nine months ended May 31, 2024. 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. The $3.4 million change from the prior year was primarily a result of a decrease in earnings due to lower railcar deliveries at our Mexican railcar manufacturing joint venture.

Current wording

Net earnings attributable to noncontrolling interest was $0.9 million for the three months ended November 30, 2025 compared to $3.8 million for the three months ended November 30, 2024. 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. The $2.9 million decrease from the prior year was primarily a result of a decrease in earnings due to lower deliveries at our European operations.

Previous wording

We continue to be financed through cash generated from operations and borrowings. At May 31, 2025 Cash and cash equivalents and Restricted cash were $342.0 million, a decrease of $26.6 million from $368.6 million at August 31, 2024.

Current wording

We continue to be financed through cash generated from operations and borrowings. At November 30, 2025 Cash and cash equivalents and Restricted cash were $375.4 million, an increase of $49.0 million from $326.4 million at August 31, 2025.

Previous wording

The $29.3 million increase in Net cash provided by operating activities for the nine months ended May 31, 2025 compared to the nine months ended May 31, 2024 was primarily due to a $65.4 million increase in Net earnings, a $41.8 million change in Deferred income taxes due to utilizing accelerated depreciation methods (including bonus depreciation) and a $16.5 million net change in working capital accounts, primarily Accounts payable and accrued liabilities and Deferred revenue associated with the timing of railcar deliveries. This was partially offset by a $103.7 million change in Leased railcars for syndication due to timing of syndication activity.

Current wording

The $141.3 million change in Net cash provided by (used in) operating activities for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was primarily due to a $138.5 million change in Leased railcars for syndication due to timing of syndication activity and a $31.0 million net change in working capital accounts, primarily Accounts receivable, net and Accounts payable and accrued liabilities associated with the timing of deliveries. This was partially offset by a $21.8 million decrease in Net earnings.

Previous wording

Net cash used in investing activities primarily related to capital expenditures net of proceeds from sale of assets. The $126.8 million decrease in cash used in investing activities for the nine months ended May 31, 2025 was primarily attributable to a $115.6 million decrease in Capital expenditures and a $7.5 million increase in Proceeds from the sale of assets compared to the nine months ended May 31, 2024.

Current wording

Cash used in investing activities primarily related to capital expenditures, net of proceeds from sale of assets. The $38.7 million decrease in Net cash used in investing activities for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was primarily attributable to a $41.9 million increase in Proceeds from the sale of assets during the three months ended November 30, 2025.

Previous 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 $75 million for 2025.

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 $165 million for 2026.

Previous wording

Gross capital expenditures for 2025 are expected to be approximately $230 million for Leasing & Fleet Management and approximately $145 million for Manufacturing, which includes the change in capital expenditures accrued in Accounts payable and accrued liabilities. 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 2026 are expected to be approximately $205 million for Leasing & Fleet Management and approximately $80 million for Manufacturing, which includes the change in capital expenditures accrued in Accounts payable and accrued liabilities. Capital expenditures for 2026 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 $175.5 million change in Net cash provided by (used in) financing activities for the nine months ended May 31, 2025 compared to the nine months ended May 31, 2024 was primarily attributed to $124.3 million in lower proceeds from the issuance of notes payable, net of repayments, a $23.8 million decrease in net proceeds from revolving notes and a $20.5 million increase in the repurchase of stock during the nine months ended May 31, 2025.

Current wording

The $78.2 million change in Net cash provided by (used in) financing activities for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was primarily attributed to a $70.3 million decrease in net borrowings and a $12.9 million increase in the repurchase of stock during the three months ended November 30, 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. 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.

Current wording

The Board of Directors has authorized our company to repurchase in aggregate up to $100.0 million of our common stock. 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

During the nine months ended May 31, 2025, we repurchased a total of 507 thousand shares for $21.8 million. During the nine months ended May 31, 2024, we repurchased a total of 38 thousand shares for $1.3 million. As of May 31, 2025, the amount remaining for repurchase under the share repurchase program was $78.2 million.

Current wording

During the three months ended November 30, 2025, we repurchased a total of 303 thousand shares for $12.9 million. There were no share repurchases during the three months ended November 30, 2024. As of November 30, 2025, the amount remaining for repurchase under the share repurchase program was $64.9 million.

Previous wording

As of May 31, 2025, we had $296.8 million in Cash and cash equivalents and $472.3 million in available borrowings. The available balance to draw under committed credit facilities includes $361.1 million on the North American credit facility, $96.0 million on the Mexican credit facilities and $15.1 million on the European credit facilities.

Current wording

As of November 30, 2025, we had $361.8 million in Cash and cash equivalents and $535.4 million in available borrowings. The available balance to draw under committed credit facilities includes $435.2 million on the North American credit facility, $86.0 million on the Mexican credit facilities and $14.2 million on the European credit facilities.

Previous wording

GBX Leasing – As of May 31, 2025, a $450.0 million nonrecourse warehouse credit facility existed to support the operations of GBX Leasing. Advances under this facility are secured by a pool of leased railcars and 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.

Current wording

Leasing warehouse credit facility – As of November 30, 2025, a $450.0 million nonrecourse warehouse credit facility existed to support the operations of our leasing business in North America. Advances under this facility are secured by a pool of leased railcars and bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.70%. Interest rate swap agreements cover approximately 91% 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

North America – The North American credit facility was renewed in May 2025, extending the maturity date from August 2026 to May 2030. As of May 31, 2025, a $600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations. The North American credit facility is secured by substantially all our U.S. assets not otherwise pledged as security for term loans, the warehouse credit facility, or the railcar asset-backed securities. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. Advances under the

Current wording

North American revolving credit facility – As of November 30, 2025, a $600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations. The North American credit facility is secured by substantially all our U.S. assets not otherwise pledged as security for term loans, the warehouse credit facility, or the railcar asset-backed securities. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. Outstanding commitments under the North American credit facility included letters of credit which totaled $5.4 million as of November 30, 2025 and August 31, 2025. Advances under the North American credit facility bear interest at SOFR plus 1.50% plus 0.10% as a SOFR adjustment or Prime plus 0.50% depending on the type of borrowing. The North America credit facility matures in May 2030.

Previous wording

Europe – As of May 31, 2025, lines of credit totaling $96.2 million, secured by certain of our European assets, were available for working capital needs of our European manufacturing operations. The European lines of credit include $34.0 million which is guaranteed by us. The European credit facilities have variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.10% to WIBOR plus 1.40% and Euro Interbank Offered Rate (EURIBOR) plus 1.90%. European credit facilities are regularly renewed and currently have maturities that range from July 2025 through September 2026.

Current wording

European revolving credit facilities – As of November 30, 2025, lines of credit totaling $122.6 million, secured by certain of our European assets, were available for working capital needs of our European manufacturing operations. The European lines of credit include $59.2 million which is guaranteed by us. The European credit facilities have variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.10% to WIBOR plus 1.30% and Euro Interbank Offered Rate (EURIBOR) plus 1.50% to EURIBOR plus 1.90%. The European credit facilities are regularly renewed and currently have maturities that range from January 2026 through December 2026.

Previous wording

Mexico – As of May 31, 2025, our Mexican railcar manufacturing operations had lines of credit totaling $166.0 million for working capital needs, $66.0 million of which the Company and its 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%. Currently, the Mexican credit facilities have maturities that range from June 2026 through March 2027.

Current wording

Mexican revolving credit facilities – As of November 30, 2025, our Mexican railcar manufacturing operations had lines of credit totaling $156.0 million for working capital needs, $56.0 million of which the Company and its joint venture partner have each guaranteed 50%. Advances under these facilities bear interest at variable rates that range from SOFR plus 1.96% to SOFR plus 4.25%. Currently, the Mexican credit facilities have maturities that range from June 2026 through March 2027.

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 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 of each entity, we enter into foreign exchange contracts with established financial institutions to protect the revenue or margin on a portion of forecasted foreign currency sales and expenses. Given the strong credit standing of the counterparties, no provision has been made for credit loss due to counterparty non-performance.

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 $694.9 million of variable rate debt to fixed rate debt as of May 31, 2025.

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 $680.6 million of variable rate debt to fixed rate debt as of November 30, 2025.

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. 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. We performed a qualitative assessment for our annual goodwill impairment test during the third quarter of 2025 and determined that it was more likely than not that the fair values of all reporting units with goodwill exceeded their carrying values; therefore, we concluded that goodwill was not impaired. For further information, see Note 5 - Goodwill to the Condensed Consolidated Financial Statements.

Current 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. 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.

Previous wording

We make certain estimates and assumptions to determine our reporting units and whether the fair value of each reporting unit is greater than its respective carrying value. The above highlighted judgments contemplated estimates and effects of macroeconomic trends that are inherently uncertain. Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ.

Current wording

We make certain estimates and assumptions to determine our reporting units and whether the fair value of each reporting unit is greater than its respective carrying value. The above highlighted judgments contemplate estimates and effects of macroeconomic trends that are inherently uncertain. Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ.

Previous wording

Our annual tax rate is based on our income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Judgment is required in determining our tax expense and in evaluating our tax positions, as tax laws are complex and subject to different interpretations by taxpayers and government taxing authorities. Our income tax rate is affected by the tax rates that apply to our foreign earnings and could be adversely impacted by higher or lower earnings than anticipated in a particular jurisdiction. In addition to local country tax laws and regulations, our income tax rate depends on the extent that our foreign earnings are taxed by the U.S. through provisions such as the global intangible low-taxed income (GILTI) tax and base erosion and anti-abuse tax (BEAT). We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available.

Current wording

Our annual tax rate is based on our income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Judgment is required in determining our tax expense and in evaluating our tax positions, as tax laws are complex and subject to different interpretations by taxpayers and government taxing authorities. Our income tax rate is affected by the tax rates that apply to our foreign earnings and could be adversely impacted by higher or lower earnings than anticipated in a particular jurisdiction. In addition to local country tax laws and regulations which may apply minimum taxes, our income tax rate depends on the extent that our foreign earnings are taxed by the U.S. through provisions such as the global intangible low-taxed income (GILTI) tax and base erosion and anti-abuse tax (BEAT). We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available.