Earnings (Loss) Per Share

3 Months Ended

Nov. 30, 2021

Note 9 – Earnings (Loss) Per Share

The shares used in the computation of basic and diluted earnings (loss) per common share are reconciled as follows:


	Three Months Ended November 30,
(In thousands)	2021		2020
Weighted average basic common shares outstanding (1)		32,510		32,723
Dilutive effect of 2.875% convertible notes due 2024 (2) (3)		—		—
Dilutive effect of 2.875% convertible notes due 2028 (4)		—	N/A
Dilutive effect of 2.25% convertible notes due 2024 (2) (5)	N/A			—
Dilutive effect of restricted stock units (2) (6)		1,060		—
Weighted average diluted common shares outstanding		33,570		32,723

(1) Restricted stock grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position.

(2) The dilutive effect of common stock equivalents was excluded from the share calculation for the three months ended November 30, 2020 due to a net loss.

(3) The dilutive effect of the 2.875% Convertible notes due 2024 was excluded for the three months ended November 30, 2021 as they were considered anti-dilutive under the “if converted” method as further discussed below.

(4) The dilutive effect of the 2.875% Convertible notes due 2028 was excluded for the three months ended November 30, 2021 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. As these notes require cash settlement for the principal, only the premium is dilutive under the "if converted" method as further discussed below. These convertible notes were issued in April 2021.

(5) The 2.25% Convertible notes due 2024 were retired in April 2021.

(6) Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

The Company's approach for calculating diluted EPS was modified beginning September 1, 2021 upon the adoption of Accounting Standard Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. See Note 1 - Interim Financial Statements for additional information.

For the three months ended November 30, 2021, diluted EPS was calculated using the more dilutive of two methods. The first method includes the dilutive effect, using the treasury stock method, associated with restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second method supplements the first by also including the “if converted” effect of the 2.875% Convertible notes due 2024 and shares underlying the 2.875% Convertible notes due 2028, when there is a conversion premium. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes due 2024 are added back to net earnings and the share count is increased by the shares underlying the convertible notes.

For the three months ended November 30, 2020, diluted EPS was calculated using the treasury stock method associated with shares underlying the 2.875% Convertible notes due 2024, 2.25% convertible notes due 2024, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The dilutive effect of common stock equivalents was excluded from the share calculation for the three months ended November 30, 2020 due to a net loss.


	Three Months Ended November 30,
(in millions, except shares which are reflected in thousands, and per share amounts)	2021		2020
Net earnings (loss) attributable to Greenbrier	$	10.8	$	(10.0	)
Weighted average diluted common shares outstanding		33,570		32,723
Diluted earnings (loss) per share	$	0.32	$	(0.30	)