-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DaXojezVqWHHUQaBmnmcy8Bdr1flrQIE2qw8Pycb8kTGeX4TvygE6WNSPBZ/jMA/ tHBKRrl7/UkaufSQLeMusw== 0000912057-00-018043.txt : 20000417 0000912057-00-018043.hdr.sgml : 20000417 ACCESSION NUMBER: 0000912057-00-018043 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000229 FILED AS OF DATE: 20000414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREENBRIER COMPANIES INC CENTRAL INDEX KEY: 0000923120 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD EQUIPMENT [3743] IRS NUMBER: 930816972 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13146 FILM NUMBER: 601000 BUSINESS ADDRESS: STREET 1: ONE CENTERPOINTE DR STREET 2: STE 200 CITY: LAKE OSWEGO STATE: OR ZIP: 97035 BUSINESS PHONE: 5036847000 MAIL ADDRESS: STREET 1: ONE CENTERPOINTE DR STREET 2: STE 200 CITY: LAKE OSWEGO STATE: OR ZIP: 97035 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------------------------------------- FORM 10-Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended February 29, 2000 or /_/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______ to ______ Commission File No. 1-13146 ----------------------------------------------------------- THE GREENBRIER COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 93-0816972 (State of Incorporation) (I.R.S. Employer Identification No.) One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035 (Address of principal executive offices) (Zip Code) (503) 684-7000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ The number of shares of the registrant's common stock, $0.001 par value per share, outstanding on March 31, 2000 was 14,254,632 shares. THE GREENBRIER COMPANIES, INC. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
February 29, August 31, 2000 1999 ------------- ------------- ASSETS Cash and cash equivalents $ 35,833 $ 77,161 Restricted cash and investments - 635 Accounts and notes receivable 50,842 47,514 Inventories 119,384 92,495 Investment in direct finance leases 134,077 143,185 Equipment on operating leases 105,500 93,225 Property, plant and equipment 76,731 69,316 Intangibles and goodwill 24,574 4,000 Other 29,431 23,185 ------------- ------------- $ 576,372 $ 550,716 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Revolving notes $ 23,978 $ 3,783 Accounts payable and accrued liabilities 146,025 131,474 Deferred participation 52,494 50,439 Deferred income taxes 20,843 17,634 Notes payable 153,337 161,401 Subordinated debt 37,788 37,788 Minority interest 6,196 14,034 Commitments and contingencies (Note 7) Stockholders' equity: Preferred stock - $0.001 par value, 25,000 shares authorized, none outstanding - - Common stock - $0.001 par value, 50,000 shares authorized,14,255 outstanding at February 29, 2000 and August 31, 1999 14 14 Additional paid-in capital 50,495 50,495 Retained earnings 87,695 85,534 Accumulated other comprehensive loss (2,493) (1,880) ------------- ------------- 135,711 134,163 ------------- ------------- $ 576,372 $ 550,716 ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. 2 THE GREENBRIER COMPANIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
Three Months Ended Six Months Ended ------------------------------ ------------------------------ February 29, February 28, February 29, February 28, 2000 1999 2000 1999 ------------ ------------- ------------- ------------- REVENUE Manufacturing $ 149,387 $ 145,048 $ 241,182 $ 245,122 Leasing and services 23,436 21,892 44,643 41,904 ------------ ------------- ------------ ------------- 172,823 166,940 285,825 287,026 COST OF REVENUE Manufacturing 132,070 127,128 212,083 217,521 Leasing and services 12,332 10,339 24,546 18,537 ------------ ------------- ------------ ------------- 144,402 137,467 236,629 236,058 MARGIN 28,421 29,473 49,196 50,968 OTHER COSTS Selling and administrative expense 16,184 12,347 28,589 21,792 Interest expense 5,061 5,405 10,039 10,151 ------------ ------------- ------------ ------------- 21,245 17,752 38,628 31,943 Earnings before income tax expense, minority interest, equity in unconsolidated subsidiary and extraordinary charge 7,176 11,721 10,568 19,025 Income tax expense (3,726) (5,592) (5,963) (9,147) ------------ ------------- ------------ ------------- Earnings before minority interest, equity in unconsolidated subsidiary and extraordinary charge 3,450 6,129 4,605 9,878 Minority interest (397) (238) (1,144) (895) Equity in unconsolidated subsidiary 1,250 198 1,266 (28) ------------ ------------- ------------ ------------- Earnings before extraordinary charge 4,303 6,089 4,727 8,955 Extraordinary charge, net of taxes - (938) - (938) ------------ ------------- ------------ ------------- NET EARNINGS $ 4,303 $ 5,151 $ 4,727 $ 8,017 ============ ============= ============ ============= Basic earnings per share: Earnings before extraordinary charge $ 0.30 $ 0.43 $ 0.33 $ 0.63 Extraordinary charge - (0.07) - (0.07) ------------ ------------ ------------ ------------- Net earnings $ 0.30 $ 0.36 $ 0.33 $ 0.56 ============ ============= ============ ============= Diluted earnings per share: Earnings before extraordinary charge $ 0.30 $ 0.43 $ 0.33 $ 0.63 Extraordinary charge - (0.07) - (0.07) ------------ ------------ ------------ ------------- Net earnings $ 0.30 $ 0.36 $ 0.33 $ 0.56 ============ ============ ============ ============= Weighted average shares outstanding: Basic 14,255 14,254 14,255 14,254 Diluted 14,267 14,271 14,295 14,286
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. 3 THE GREENBRIER COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS, UNAUDITED)
Six Months Ended -------------------------------- February 29, February 28, 2000 1999 ------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 4,727 $ 8,017 Adjustments to reconcile net earnings to net cash used in operating activities: Extraordinary charge - 938 Deferred income taxes 3,209 2,243 Deferred participation 2,055 2,852 Depreciation and amortization 9,522 7,534 Gain on sales of equipment (433) (3,203) Other (6,975) 1,055 Decrease (increase) in assets: Accounts and notes receivable (3,302) (27,710) Inventories (19,907) (21,178) Intangibles and goodwill 708 (185) Other (1,622) 673 Increase (decrease) in liabilities: Accounts payable and accrued liabilities (15,052) 1,249 ------------- ------------- Net cash used in operating activities (27,070) (27,715) ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions, net of cash acquired (2,024) (8,553) Principal payments received under direct finance leases 8,929 8,336 Investment in direct finance leases - (120) Proceeds from sales of equipment 15,693 25,513 Purchase of property and equipment (46,845) (23,686) Use of restricted cash and investments 635 15,375 ------------- ------------- Net cash provided by (used in) investing activities (23,612) 16,865 ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 25,158 32,102 Repayments of borrowings (13,238) (35,089) Dividends paid (2,566) (1,710) Proceeds from stock options - 24 ------------- ------------- Net cash provided by (used in) financing activities 9,354 (4,673) ------------- ------------- DECREASE IN CASH AND CASH EQUIVALENTS (41,328) (15,523) Cash and cash equivalents: Beginning of period 77,161 41,912 ------------- ------------- End of period $ 35,833 $ 26,389 ============= ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 9,241 $ 8,644 Income taxes 1,816 2,969
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. 4 THE GREENBRIER COMPANIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, UNAUDITED) NOTE 1 - INTERIM FINANCIAL STATEMENTS The accompanying consolidated financial statements of The Greenbrier Companies, Inc. and Subsidiaries ("Greenbrier" or the "company") have been prepared without audit and reflect all adjustments (consisting of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of the financial position and operating results for the periods indicated. The results of operations for the three and six-month periods ended February 29, 2000 are not necessarily indicative of the results to be expected for the entire year ending August 31, 2000. Certain reclassifications have been made to the prior year's consolidated financial statements to conform with the 2000 presentation. NET EARNINGS PER SHARE - Basic earnings per share ("EPS") excludes potential dilution, which would occur if additional shares were issued upon exercise of outstanding stock options, while diluted EPS takes this potential dilution into account. PROSPECTIVE ACCOUNTING CHANGES - Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," requires that all derivatives be recognized as either assets or liabilities measured at fair value. Adoption of SFAS No. 133 is currently proposed to be effective for the company's fiscal year beginning September 1, 2000. Greenbrier is currently evaluating the effect of this statement. In December 1999 the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," which the Company is required to adopt beginning September 1, 2000. Greenbrier is currently evaluating the effect of SAB No. 101. MANAGEMENT ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. This includes evaluation of the remaining life and recoverability of long-lived assets. Actual results could differ from such estimates. INTANGIBLES AND GOODWILL - Intangibles and goodwill are generally amortized over twelve years using the straight-line method. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Greenbrier's 1999 Annual Report incorporated by reference into the company's 1999 Annual Report on Form 10-K. NOTE 2 - INVENTORIES
February 29, August 31, 2000 1999 ------------- ------------- Manufacturing supplies and raw materials $ 18,838 $ 10,953 Work-in-process 48,097 66,255 Assets held for sale or refurbishment 52,449 15,287 ------------- ------------- $ 119,384 $ 92,495 ============= =============
NOTE 3 - COMPREHENSIVE INCOME The following is a reconciliation of net earnings to comprehensive income:
Three Months Ended Six Months Ended ----------------------------- --------------------------- February 29, February 28, February 29, February 28, 2000 1999 2000 1999 ------------- ------------- ------------- ------------ Net earnings $ 4,303 $ 5,151 $ 4,727 $ 8,017 Foreign currency translation adjustment, net of tax (430) (1,109) (613) (1,035) ------------ ------------- ------------- ----------- Comprehensive income $ 3,873 $ 4,042 $ 4,114 $ 6,982 ============ ============= ============= ===========
5 THE GREENBRIER COMPANIES, INC NOTE 4 - SEGMENT INFORMATION Greenbrier has two reportable segments: manufacturing and leasing and services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in the consolidated financial statements contained in the company's 1999 Annual Report. Performance is evaluated based on margin, which is presented on the Consolidated Statements of Operations. Intersegment sales and transfers are accounted for as if the sales or transfer were to third parties, that is, at market prices. Intersegment elimination of manufacturing revenues are reversed when the related railcars are sold to a third party by the leasing segment. The information in the following table is derived directly from the segments' internal financial reports used for corporate management purposes.
Three Months Ended Six Months Ended ---------------------------- ---------------------------- February 29, February 28, February 29, February 28, 2000 1999 2000 1999 ------------ ------------ ------------ ------------ REVENUE: Manufacturing $ 145,064 $ 133,178 $ 292,265 $ 263,400 Leasing and services 31,240 30,436 58,167 54,464 Eliminate intersegment (3,481) 3,326 (64,607) (30,838) ------------ ------------ ------------ ------------ $ 172,823 $ 166,940 $ 285,825 $ 287,026 ============ ============ ============ ============
NOTE 5 - NOTES PAYABLE In February 1999 Greenbrier issued $30,000 of 6.48% senior term notes due 2006 (the "Notes"). Interest on the Notes is payable semi-annually commencing June 1999 and semi-annual principal payments of $2,800 are required beginning June 2001. In conjunction with the issuance of the Notes, $22,000 of leasing equipment notes payable were repaid. The early retirement of this debt resulted in a $938 extraordinary charge (net of income taxes of $680) in the second quarter of fiscal 1999 for prepayment penalties and prepaid loan costs. NOTE 6 - ACQUISITIONS In December 1999 Greenbrier completed the acquisition of a portion of the minority investor's interest in the Canadian manufacturing subsidiary utilizing operating cash flow and available lines of credit. This acquisition was effective September 1, 1999. In January 2000 Greenbrier completed the purchase of the Freight Wagon Division of DaimlerChrysler Rail Systems GmbH located in Siegen, Germany. The acquired operation provides expertise in the fields of engineering, design, sales and marketing and project management. It also includes a comprehensive portfolio of railcar designs certified for the European marketplace; accordingly a significant portion of the assets acquired are intangibles. The purchase was initially funded with a cash payment of $1.5 million and assumption of net liabilities of $20 million. The acquisition was completed utilizing operating cash flow and available lines of credit. Results of acquired operations have been included in the accompanying financial statements from the date of acquisition. Disclosure of the acquisition on a proforma basis, as if it had taken place on September 1, 1999, is not required as it is not material to the consolidated financial statements or results of operations. NOTE 7 - COMMITMENTS AND CONTINGENCIES Greenbrier is involved as a defendant in litigation in the ordinary course of business, the outcome of which cannot be predicted with certainty. Litigation has been initiated by former shareholders of Interamerican Logistics Inc. ("Interamerican"), which was acquired in 1996 and the operations of which were disposed of in 1998. The plaintiffs allege that Greenbrier violated the agreements pursuant to which it acquired ownership of Interamerican and seek damages aggregating $4,500 Canadian. Management believes that any ultimate liability resulting from litigation will not materially affect the financial position, results of operations or cash flows of the company. 6 THE GREENBRIER COMPANIES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Greenbrier currently operates in two primary business segments: manufacturing and leasing and services. The two business segments are operationally integrated. With operations in North America and Europe, the manufacturing segment produces double-stack intermodal railcars, conventional railcars, marine vessels and forged steel products and performs railcar refurbishment and maintenance activities, a portion of which is for the leasing operation. In Europe the company also manufactures new freight cars through the use of unaffiliated sub-contractors. Such activities are included in the manufacturing segment. The leasing and services segment owns or manages a fleet of approximately 36,000 railcars for railroads, institutional investors and other leasing companies. Railcars are generally manufactured under firm orders from third parties, and revenue is recognized when the cars are completed and accepted by the customer. From time to time Greenbrier commits to manufacture railcars prior to receipt of firm orders to maintain continuity of manufacturing operations, and railcars produced in a given period may be delivered in subsequent periods, delaying revenue recognition. Greenbrier may also build railcars for its own lease fleet. Revenues do not include sales of new railcars to, or refurbishment services performed for, the leasing operation since intercompany transactions are eliminated in preparing the consolidated financial statements. The margin generated from such sales or refurbishment activity is realized by the leasing segment over the related life of the asset or upon sale of the equipment. OVERVIEW Net earnings for the three and six-month periods ended February 29, 2000 were $4.3 million or $.30 per diluted share and $4.7 million or $.33 per diluted share. Net losses from the European operations were $1.9 million for the quarter and $3.8 million for the six-month period ended February 29, 2000. In January 2000 Greenbrier completed the purchase of the Freight Wagon Division of DaimlerChrysler Rail Systems GmbH located in Siegen, Germany. The acquired operation provides expertise in the fields of engineering, design, sales and marketing and project management. It also includes a comprehensive portfolio of railcar designs certified for the European marketplace; accordingly a significant portion of the assets acquired are intangibles. The acquisition was completed utilizing operating cash flow and available lines of credit. Results from the acquired operation, which include freight cars manufactured by unaffiliated sub-contractors, have been included in the accompanying financial statements from the date of acquisition. New railcar delivery and backlog information disclosed herein includes all facilities, including the joint venture in Mexico that is accounted for by the equity method and freight cars manufactured by sub-contractors in Europe. Revenues exclude the joint venture in Mexico, as it is accounted for under the equity method. Results of this operation are included in Equity in unconsolidated subsidiary. THREE MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO THREE MONTHS ENDED FEBRUARY 28, 1999 MANUFACTURING Manufacturing revenue for the three-month period ended February 29, 2000 was $149 million compared to $145 million in the corresponding prior period, an increase of $4 million, or 3%. The current period includes one month of activity from the newly acquired European operations. Deliveries of new railcars, which are the primary contributor to revenue, were approximately 2,700 in the current period compared to 2,000 in the prior comparable period. Railcar deliveries attributable to the joint venture in Mexico, which is accounted for under the equity method, increased in the current period as compared to the prior comparable period. Manufacturing gross margin was 11.6% for the three months ended February 29, 2000 compared to the prior period gross margin of 12.3%, a decrease of .7%. The slight decrease is principally a result of lower margins from the European operations. The backlog of railcars to be manufactured for sale and lease at all facilities as of February 29, 2000 was approximately 5,100 railcars with an estimated value of $330 million compared to 3,900 railcars valued at $260 as of November 30, 1999. Subsequent to February 29, 2000 additional orders for 1,650 railcars valued at approximately $90 million were received. 7 THE GREENBRIER COMPANIES, INC. LEASING AND SERVICES Leasing and services revenue was $23.4 million for the three months ended February 29, 2000 an increase of 7% over the $21.9 million recorded in corresponding prior period. The increase is primarily due to the management of maintenance contracts offset by lower gains on sales of leased equipment. Pre-tax earnings realized on the disposition of leased equipment during the quarter amounted to $363 thousand compared to $600 thousand for the corresponding prior period. Leasing and services operating margin was 47% for the three-month period ended February 29, 2000 compared to 53% in the corresponding prior period. The decreased margin is primarily due to the reduction in gains on sales and lower margins on certain maintenance agreements. OTHER COSTS Selling and administrative expense increased $4 million, or 33%, to $16 million for the three months ended February 29, 2000 as compared to $12 million in the prior comparable period. The increase is primarily due to the addition of the European operations, increased international sales, marketing and business development costs, and higher employee-related costs. Income tax expense for the three months ended February 29, 2000 represents an effective tax rate of 42% on U.S. operations and varying effective tax rates on foreign operations, consistent with the prior comparable period. The consolidated effective tax rate of 52% in the current period is primarily a result of European operating losses for which no tax benefit has been recognized. The consolidated effective tax rate for the prior comparable period was 47.7%. SIX MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO SIX MONTHS ENDED FEBRUARY 28, 1999 MANUFACTURING Manufacturing revenue for the six month period ended February 29, 2000 was $241 million compared to $245 million in the corresponding prior period, a decrease of $4 million or 2%. Deliveries for the current period were 4,100 railcars compared with 3,600 railcars for the prior period. Railcar deliveries attributable to the joint venture in Mexico, which is accounted for under the equity method, increased in the current period as compared to the prior comparable period. The decrease in the revenue resulted primarily from a product mix with a lower unit sales value. Manufacturing gross margin of 12% compares favorably to the prior period gross margin of 11% as a result of improved production efficiencies and economies of long production runs at North American operations. LEASING AND SERVICES Leasing and services revenue increased $3 million, or 7% to $45 million for the six months ended February 29, 2000 compared to $42 million for the six months ended February 28, 1999. The increase was primarily due to the management of maintenance contracts offset by lower gains on sales of leased equipment. Pre-tax earnings realized on the disposition of leased equipment during the six-month period ended February 29, 2000 were $419 thousand compared to $3.1 million in the corresponding prior period. Leasing and services operating margin was 45% for the six months ended February 29, 2000 compared to 56% for the corresponding period in 1999. The decreased margin is primarily due to a reduction in gains on sales of leased equipment and lower margins on certain maintenance agreements. 8 THE GREENBRIER COMPANIES, INC. OTHER COSTS Selling and administrative expense increased $7 million, or 32% to $29 million for the six months ended February 29, 2000 compared to $22 million for the comparable period in 1999. The increase is primarily due to the addition of the European operations, increased international sales, marketing and business development costs, and higher employee-related costs. Income tax expense for the six months ended February 29, 2000 represents an effective tax rate of 42% on U.S. operations and varying effective tax rates on foreign operations. The consolidated effective tax rate of 56% in the current period is primarily a result of European operating losses for which no tax benefit has been recognized. The consolidated effective tax rate for the prior comparable period was 48%. LIQUIDITY AND CAPITAL RESOURCES Cash used in operating activities was $27 million for the six month period ended February 29, 2000 which is consistent with cash used in operating activities for the six month period ended February 28, 1999. During the six months ended February 29, 2000 assets held for sale, included in inventory, increased $37 million principally due to railcars produced and placed on lease during the quarter that are anticipated to be sold in the third and fourth quarters of 2000. Credit facilities aggregated $128 million as of February 29, 2000. A $60 million revolving line of credit is available through May 2001 to provide working capital and interim financing of equipment for the leasing and services operations. A $40 million operating line of credit to be used for working capital is available through February 2002 for U.S. manufacturing operations. A $21 million (at the February 29, 2000 exchange rate) operating line of credit is available through April 2000 for working capital for Canadian manufacturing operations. Operating lines of credit totaling $7 million (at the February 29, 2000 exchange rate) are available principally through December 2000 for working capital for Polish manufacturing operations. Advances under both the revolving and operating lines of credit bear interest at rates which vary depending on the type of borrowing and certain defined ratios. At February 29, 2000 $17 million, $2 million and $5 million were outstanding under the U.S., Canadian and Polish manufacturing operating lines. No amounts were outstanding under the leasing line of credit as of February 29, 2000. Borrowings under these lines are principally based upon defined levels of receivables, inventory and leased equipment. Capital expenditures totaled $47 million for the six months ended February 29, 2000 compared to $24 million for the six months ended February 28, 1999. Of these capital expenditures, approximately $35 million and $17 million, respectively, were attributable to leasing and services operations. Leasing and services capital expenditures for the remainder of 2000 are expected to be approximately $10 million. Greenbrier regularly sells assets from its lease fleet, some of which may have been purchased within the current year and included in capital expenditures. Approximately $12 million and $7 million of the total capital expenditures for the six months ended February 29, 2000 and February 28, 1999 respectively, were attributable to manufacturing operations. Manufacturing capital expenditures for the remainder of 2000 are expected to be approximately $10 million and will include plant improvements and equipment acquisitions to further increase capacity, enhance efficiencies and allow for the production of new products. Foreign operations give rise to market risks from changes in foreign currency exchange rates. Greenbrier utilizes foreign currency forward exchange contracts with established financial institutions to hedge a portion of the risk. No provision has been made for credit loss due to counterparty non-performance. At February 29, 2000 forward exchange contracts for the purchase of Canadian dollars aggregated Canadian $77 million ($53 million US dollars), contracts for the purchase of Polish zloties aggregated 42 million zloties ($10 million US dollars) and contracts for the purchase of US dollars aggregated $4 million. These contacts mature at various dates through December 2000. At February 29, 2000 gains and losses of approximately $1.3 million and $250 thousand respectively, on such contracts have been deferred and will be recognized in income concurrent with the hedged transaction. 9 THE GREENBRIER COMPANIES, INC. A quarterly dividend of $.09 per share was declared in April 2000, to be paid in May 2000. Future dividends are dependent upon earnings, capital requirements and financial condition. Management expects existing funds and cash generated from operations, together with borrowings under existing credit facilities, and long-term financing to be sufficient to fund dividends, working capital needs, planned capital expenditures, acquisitions and expected debt repayments. FORWARD-LOOKING STATEMENTS Statements contained in Management's Discussion and Analysis of Financial Condition and Results of Operations that are not statements of historical fact may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to expectations, beliefs and strategies regarding the future. The following are among the factors that could cause actual results or outcomes to differ materially from the forward-looking statements: general political, regulatory or economic conditions; changes in interest rates; business conditions and growth in the surface transportation industry, both domestic and international; currency and other risks associated with international operations; shifts in market demand; a delay or failure of acquisitions, products or services to compete successfully; changes in product mix and the mix between manufacturing and leasing and services revenue; labor disputes or operating difficulties which might disrupt manufacturing operations or the flow of cargo; competitive factors, including increased competition, new product offerings by competitors and price pressures; actual future costs and availability of materials and a trained workforce; production difficulties and product delivery delays in the future as a result of, among other matters, changing process technologies and increasing production; lower than expected customer orders; the ability to consummate expected sales; delays in receipt of orders or cancellation of orders; and the financial condition of principal customers. Any forward-looking statements should be considered in light of these factors. 10 THE GREENBRIER COMPANIES, INC. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of stockholders of the registrant was held on January 11, 2000. (b) The meeting involved the election of directors. Proxies for the meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934. There was no solicitation in opposition to management's nominees as listed in the proxy statement. All of management's nominees were elected. The following table sets forth information with respect to votes cast for and against each nominee:
Votes Votes Against For Election or Votes Broker Nominee Election Withheld Abstaining Non-Votes ------- -------------- ----------- ---------- --------- Alan James 13,384,695 42,959 - - William A. Furman 13,387,091 40,563 - - C. Bruce Ward 13,390,195 37,459 - -
The term of office for the following directors continued after the meeting: Victor G. Atiyeh, Benjamin R. Whiteley, Peter K. Nevitt and A. Daniel O'Neal, Jr. (c) Stockholders approved the Stock Incentive Plan - 2000 (the "2000 Plan"). The 2000 Plan is intended to provide a means by which selected employees, directors and consultants may be given an opportunity to acquire stock of the company. The 2000 Plan was approved by the vote of 11,438,713 shares in favor, 681,024 shares against, 21,719 shares abstained from voting and 1,286,198 broker non-votes. (d) Stockholders ratified appointment of Deloitte & Touche LLP as independent auditors for fiscal 2000. The appointment was approved by the vote of 13,417,595 shares in favor, 7,476 shares against and 2,583 shares abstained from voting. There were no broker non-votes. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27.1 Financial Data Schedule (b) Form 8-K No reports on Form 8-K were filed during the quarter for which this report is filed. 11 THE GREENBRIER COMPANIES, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE GREENBRIER COMPANIES, INC. Date: April 13, 1999 By: /s/ Larry G. Brady ------------------ --------------------------- Larry G. Brady Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED FEBRUARY 29, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS AUG-31-2000 FEB-29-2000 FEB-29-2000 35,833 0 50,842 0 119,384 0 76,731 0 576,372 0 0 0 0 14 135,697 576,372 0 285,825 236,629 275,257 0 0 10,039 10,568 5,963 4,727 0 0 0 4,727 0.33 0.33
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