Note 28 - Guarantor/Non Guarantor

The convertible senior notes due 2026 (the Notes) issued on May 22, 2006 are fully and unconditionally and jointly and severally guaranteed by substantially all of Greenbrier’s material 100% owned U.S. subsidiaries: Autostack Company LLC, Greenbrier-Concarril, LLC, Greenbrier Leasing Company LLC, Greenbrier Leasing Limited Partner, LLC, Greenbrier Management Services, LLC, Greenbrier Leasing, L.P., Greenbrier Railcar LLC, Gunderson LLC, Gunderson Marine LLC, Gunderson Rail Services LLC, Meridian Rail Holding Corp., Meridian Rail Acquisition Corp., Meridian Rail Mexico City Corp., Brandon Railroad LLC, Gunderson Specialty Products, LLC and Greenbrier Railcar Leasing, Inc. No other subsidiaries guarantee the Notes including Greenbrier Leasing Limited, Greenbrier Union Holdings I LLC, Greenbrier Europe B.V., Greenbrier Germany GmbH, WagonySwidnica S.A., Zaklad Naprawczy Taboru Kolejowego Olawa sp. z o.o., Gunderson-Concarril, S.A. de C.V., Greenbrier Rail Services Canada Inc, Mexico Meridianrail Services, S.A. de C.V., Greenbrier Railcar Services – Tierra Blanca S.A. de C.V., YSD Doors, S.A. de C.V., Greenbrier-Gimsa, LLC and Gunderson-Gimsa S. de R.L. de C.V.

The following represents the supplemental consolidating condensed financial information of Greenbrier and its guarantor and non guarantor subsidiaries, as of August 31, 2012 and 2011 and for the years ended August 31, 2012, 2011 and 2010. The information is presented on the basis of Greenbrier accounting for its ownership of its wholly owned subsidiaries using the equity method of accounting. The equity method investment for each subsidiary is recorded by the parent in intangibles and other assets. Intercompany transactions of goods and services between the guarantor and non guarantor subsidiaries are presented as if the sales or transfers were at fair value to third parties and eliminated in consolidation.

The Greenbrier Companies, Inc.

Condensed Consolidating Balance Sheet

For the year ended August 31, 2012


(In thousands)	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	34,323		$	294	$	18,954		$	–		$	53,571
Restricted cash		–			2,047		4,230			–			6,277
Accounts receivable, net		(21,666	)		122,917		45,467			(392	)		146,326
Inventories		–			138,236		178,810			(305	)		316,741
Leased railcars for syndication		–			100,590		–			(2,792	)		97,798
Equipment on operating leases, net		–			365,925		–			(2,957	)		362,968
Property, plant and equipment, net		3,721			106,219		72,489			–			182,429
Goodwill		–			137,066		–			–			137,066
Intangibles and other assets, net		688,261			91,278		3,620			(701,791	)		81,368

	$	704,639		$	1,064,572	$	323,570		$	(708,237	)	$	1,384,544

Liabilities and Equity
Revolving notes	$	–		$	–	$	60,755		$	–		$	60,755
Accounts payable and accrued liabilities		(31,814	)		205,477		155,844			1			329,508
Deferred income taxes		9,097			96,593		(7,684	)		(2,643	)		95,363
Deferred revenue		310			15,970		901			13			17,194
Notes payable		295,269			130,953		1,857			–			428,079
Total equity Greenbrier		431,777			615,579		90,761			(706,340	)		431,777
Noncontrolling interest		–			–		21,136			732			21,868

Total equity		431,777			615,579		111,897			(705,608	)		453,645

	$	704,639		$	1,064,572	$	323,570		$	(708,237	)	$	1,384,544

The Greenbrier Companies, Inc.

Condensed Consolidating Statement of Operations

For the year ended August 31, 2012


(In thousands)	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue
Manufacturing	$	–		$	809,629		$	1,057,996		$	(613,661	)	$	1,253,964
Wheel Services, Refurbishment & Parts		–			494,359			–			(12,494	)		481,865
Leasing & Services		1,102			71,382			–			(597	)		71,887

		1,102			1,375,370			1,057,996			(626,752	)		1,807,716
Cost of revenue
Manufacturing		–			730,850			996,591			(605,057	)		1,122,384
Wheels Services, Refurbishment & Parts		–			446,034			–			(12,493	)		433,541
Leasing & Services		–			37,450			–			(79	)		37,371

		–			1,214,334			996,591			(617,629	)		1,593,296
Margin		1,102			161,036			61,405			(9,123	)		214,420
Selling and administrative		42,486			29,383			32,727			–			104,596
Gain on disposition of equipment		–			(8,963	)		–			(1	)		(8,964	)

Earnings (loss) from operations		(41,384	)		140,616			28,678			(9,122	)		118,788
Other costs
Interest and foreign exchange		18,839			3,754			3,336			(1,120	)		24,809

Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates		(60,223	)		136,862			25,342			(8,002	)		93,979
Income tax (expense) benefit		21,560			(51,655	)		(4,362	)		2,064			(32,393	)

		(38,663	)		85,207			20,980			(5,938	)		61,586
Earnings (loss) from unconsolidated affiliates		97,371			(537	)		(1	)		(97,249	)		(416	)

Net earnings (loss)		58,708			84,670			20,979			(103,187	)		61,170
Net loss (earnings) attributable to noncontrolling interest		–			–			(5,574	)		3,112			(2,462	)

Net earnings (loss) attributable to Greenbrier	$	58,708		$	84,670		$	15,405		$	(100,075	)	$	58,708

The Greenbrier Companies, Inc.

Condensed Consolidating Statement of Cash Flows

For the year ended August 31, 2012


(In thousands)	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net earnings (loss)	$	58,708		$	84,670		$	20,979		$	(103,187	)	$	61,170
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Deferred income taxes		23,749			(7,548	)		(2,520	)		(2,064	)		11,617
Depreciation and amortization		2,596			31,618			8,236			(79	)		42,371
Gain on sales of leased equipment		–			(8,963	)		–			(1	)		(8,964	)
Accretion of debt discount		3,259			–			–			–			3,259
Other		8,757			1,024			37			3,844			13,662
Decrease (increase) in assets:
Accounts receivable		13,197			44,373			(20,223	)		416			37,763
Inventories		–			3,395			313			1			3,709
Leased railcars for syndication		–			(78,863	)		–			2,792			(76,071	)
Other		1,847			(393	)		4,878			(6,332	)		–
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		(43,798	)		55,609			4,448			(23	)		16,236
Deferred revenue		(155	)		10,711			735			13			11,304

Net cash provided by (used in) operating activities		68,160			135,633			16,883			(104,620	)		116,056

Cash flows from investing activities:
Proceeds from sales of equipment		–			33,560			–			–			33,560
Investment in and net advances to unconsolidated affiliates		(103,703	)		230			(614	)		103,581			(506	)
Intercompany advances		19,092			–			–			(19,092	)		–
Decrease (increase) in restricted cash		–			66			(4,230	)		–			(4,164	)
Capital expenditures		(709	)		(89,531	)		(28,684	)		1,039			(117,885	)
Other		–			48			–			–			48


Net cash provided by (used in) investing Activities		(85,320	)		(55,627	)		(33,528	)		85,528			(88,947	)

Cash flows from financing activities:
Net changes in revolving notes with maturities of 90 days or less		(60,000	)		–			2,698			–			(57,302	)
Proceeds from revolving notes with maturities longer than 90 days		–			–			63,773			–			63,773
Repayment of revolving notes with maturities longer than 90 days		–			–			(33,934	)		–			(33,934	)
Intercompany advances		76,476			(76,936	)		(18,632	)		19,092			–
Proceeds from issuance of notes Payable		–			250			2,500			–			2,750
Repayments of notes payable		–			(4,166	)		(2,904	)		–			(7,070	)
Excess tax benefit from restricted stock awards		1,627			–			–			–			1,627
Investment by joint venture partner		–			–			1,362			–			1,362

Net cash provided by (used in) financing activities		18,103			(80,852	)		14,863			19,092			(28,794	)

Effect of exchange rate changes		12			611			4,411			–			5,034
Increase (decrease) in cash and cash equivalents		955			(235	)		2,629			–			3,349
Cash and cash equivalents
Beginning of period		33,368			529			16,325			–			50,222

End of period	$	34,323		$	294		$	18,954		$	–		$	53,571

The Greenbrier Companies, Inc.

Condensed Consolidating Balance Sheet

For the year ended August 31, 2011


(In thousands)	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	33,368		$	529	$	16,325		$	–		$	50,222
Restricted cash		–			2,113		–			–			2,113
Accounts receivable, net		86,701			90,442		11,276			24			188,443
Inventories		–			141,631		182,185			(304	)		323,512
Leased railcars for syndication		–			30,690		–			–			30,690
Equipment on operating leases, net		–			323,139		–			(1,998	)		321,141
Property, plant and equipment, net		6,006			101,284		53,910			–			161,200
Goodwill		–			137,066		–			–			137,066
Intangibles and other assets, net		584,892			96,444		2,628			(596,696	)		87,268

	$	710,967		$	923,338	$	266,324		$	(598,974	)	$	1,301,655

Liabilities and Equity
Revolving notes	$	60,000		$	–	$	30,339		$	–		$	90,339
Accounts payable and accrued liabilities		11,571			148,788		156,153			24			316,536
Deferred income taxes		(14,652	)		104,142		(5,071	)		(580	)		83,839
Deferred revenue		465			5,242		193			–			5,900
Notes payable		292,010			134,868		2,262			–			429,140
Total equity Greenbrier		361,573			530,298		68,120			(598,418	)		361,573
Noncontrolling interest		–			–		14,328			–			14,328

Total equity		361,573			530,298		82,448			(598,418	)		375,901

	$	710,967		$	923,338	$	266,324		$	(598,974	)	$	1,301,655

The Greenbrier Companies, Inc.

Condensed Consolidating Statement of Operations

For the year ended August 31, 2011


(In thousands)	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue
Manufacturing	$	1,429		$	413,608		$	532,444		$	(226,379	)	$	721,102
Wheel Services, Refurbishment & Parts		–			467,544			–			(14,679	)		452,865
Leasing & Services		1,833			68,646			–			(1,156	)		69,323

		3,262			949,798			532,444			(242,214	)		1,243,290
Cost of revenue
Manufacturing		–			394,638			492,855			(226,366	)		661,127
Wheels Services, Refurbishment & Parts		–			419,824			–			(14,375	)		405,449
Leasing & Services		–			37,253			–			(70	)		37,183

		–			851,715			492,855			(240,811	)		1,103,759
Margin		3,262			98,083			39,589			(1,403	)		139,531
Selling and administrative		37,450			22,256			20,620			–			80,326
Gain on disposition of equipment		–			(8,227	)		–			(142	)		(8,369	)

Earnings (loss) from operations		(34,188	)		84,054			18,969			(1,261	)		67,574
Other costs
Interest and foreign exchange		32,002			4,022			2,134			(1,166	)		36,992
Loss on extinguishment of debt		15,657			–			–			–			15,657

Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates		(81,847	)		80,032			16,835			(95	)		14,925
Income tax (expense) benefit		30,940			(32,953	)		(1,642	)		91			(3,564	)

		(50,907	)		47,079			15,193			(4	)		11,361
Earnings (loss) from unconsolidated affiliates		57,373			4,196			–			(64,543	)		(2,974	)

Net earnings (loss)		6,466			51,275			15,193			(64,547	)		8,387
Net loss (earnings) attributable to noncontrolling interest		–			–			(1,923	)		2			(1,921	)

Net earnings (loss) attributable to Greenbrier	$	6,466		$	51,275		$	13,270		$	(64,545	)	$	6,466

The Greenbrier Companies, Inc.

Condensed Consolidating Statement of Cash Flows

For the year ended August 31, 2011


(In thousands)	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net earnings (loss)	$	6,466		$	51,275		$	15,193		$	(64,547	)	$	8,387
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Deferred income taxes		(15,380	)		16,560			1,311			(92	)		2,399
Depreciation and amortization		2,701			29,413			6,250			(71	)		38,293
Gain on sales of leased equipment		–			(4,979	)		–			(142	)		(5,121	)
Accretion of debt discount		6,583			–			–			–			6,583
Loss on extinguishment of debt (non-cash portion)		8,453			–			–			–			8,453
Other		7,073			151			(465	)		3			6,762
Decrease (increase) in assets:
Accounts receivable		3,033			(97,572	)		(1,992	)		(21	)		(96,552	)
Inventories		–			(3,503	)		(113,667	)		304			(116,866	)
Leased railcars for syndication		–			(21,857	)		1,018			–			(20,839	)
Other		4,265			3,181			338			1,079			8,863
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		394			36,161			94,096			22			130,673
Deferred revenue		(155	)		(4,154	)		(978	)		–			(5,287	)

Net cash provided by (used in) operating activities		23,433			4,676			1,104			(63,465	)		(34,252	)

Cash flows from investing activities:
Proceeds from sales of equipment		–			18,730			–			–			18,730
Investment in and net advances to unconsolidated affiliates		(57,373	)		(8,420	)		–			63,463			(2,330	)
Intercompany advances		(1,334	)		–			–			1,334			–
Decrease (increase) in restricted cash		–			412			–			–			412
Capital expenditures		(1,996	)		(65,140	)		(17,168	)		2			(84,302	)
Other		–			61			(1,835	)		–			(1,774	)

Net cash provided by (used in) investing activities		(60,703	)		(54,357	)		(19,003	)		64,799			(69,264	)

Cash flows from financing activities:
Net changes in revolving notes with maturities of 90 days or less		60,000			–			11,625			–			71,625
Proceeds from revolving notes with maturities longer than 90 days		–			–			25,159			–			25,159
Repayment of revolving notes with maturities longer than 90 days		–			–			(10,000	)		–			(10,000	)
Intercompany advances		(55,401	)		52,806			3,929			(1,334	)		–
Proceeds from issuance of notes payable		230,000			–			1,250			–			231,250
Debt issuance costs		(11,469	)		–			–						(11,469	)
Repayments of notes payable		(306,750	)		(4,206	)		(404	)		–			(311,360	)
Proceeds from equity offering		63,180			–			–			–			63,180
Expenses from equity offering		(420	)		–			–			–			(420	)
Other		26			–			–			–			26

Net cash provided by (used in) financing activities		(20,834	)		48,600			31,559			(1,334	)		57,991

Effect of exchange rate changes		–			751			(3,868	)		–			(3,117	)
Increase (decrease) in cash and cash equivalents		(58,104	)		(330	)		9,792			–			(48,642	)
Cash and cash equivalents
Beginning of period		91,472			859			6,533			–			98,864

End of period	$	33,368		$	529		$	16,325		$	–		$	50,222

The Greenbrier Companies, Inc.

Condensed Consolidating Statement of Operations

For the year ended August 31, 2010


(In thousands)	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue
Manufacturing	$	–		$	74,526		$	242,771		$	(21,731	)	$	295,566
Wheel Services, Refurbishment & Parts		–			395,053			1,584			(8,203	)		388,434
Leasing & Services		1,803			72,013			–			(1,536	)		72,280

		1,803			541,592			244,355			(31,470	)		756,280
Cost of revenue
Manufacturing		–			69,872			218,890			(20,367	)		268,395
Wheels Services, Refurbishment & Parts		–			351,565			1,160			(8,203	)		344,522
Leasing & Services		–			41,438			–			(73	)		41,365

		–			462,875			220,050			(28,643	)		654,282
Margin		1,803			78,717			24,305			(2,827	)		101,998
Selling and administrative		33,441			21,263			15,227			–			69,931
Gain on disposition of equipment		–			(8,170	)		–			–			(8,170	)
Special items		(11,870	)		–			–			–			(11,870	)

Earnings (loss) from operations		(19,768	)		65,624			9,078			(2,827	)		52,107
Other costs
Interest and foreign exchange		38,866			4,191			3,687			(1,540	)		45,204
Gain on extinguishment of debt		(2,070	)		–			–			–			(2,070	)

Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates		(56,564	)		61,433			5,391			(1,287	)		8,973
Income tax (expense) benefit		24,143			(25,144	)		1,710			250			959

		(32,421	)		36,289			7,101			(1,037	)		9,932
Earnings (loss) from unconsolidated affiliates		36,698			(6,179	)		–			(32,120	)		(1,601	)

Net earnings (loss)		4,277			30,110			7,101			(33,157	)		8,331
Net loss (earnings) attributable to noncontrolling interest		–			–			(4,734	)		680			(4,054	)

Net earnings (loss) attributable to Greenbrier	$	4,277		$	30,110		$	2,367		$	(32,477	)	$	4,277

The Greenbrier Companies, Inc.

Condensed Consolidating Statement of Cash Flows

For the year ended August 31, 2010


(In thousands)	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net earnings (loss)	$	4,277		$	30,110		$	7,101		$	(33,157	)	$	8,331
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Deferred income taxes		5,898			10,045			427			(1,318	)		15,052
Depreciation and amortization		2,063			28,241			7,280			(73	)		37,511
Gain on sales of leased equipment		–			(6,543	)		–			–			(6,543	)
Accretion of debt discount		8,149			–			–			–			8,149
Special items		(11,870	)		–			–			–			(11,870	)
Gain on extinguishment of debt (non-cash portion)		(2,070	)		–			–			–			(2,070	)
Other		5,175			354			(1,972	)		680			4,237
Decrease (increase) in assets:
Accounts receivable		(9,292	)		17,743			12,914			1,065			22,430
Inventories		–			(19,135	)		(26,077	)		–			(45,212	)
Leased railcars for syndication		–			1,778			(1,019	)		–			759
Other		648			6,773			(966	)		–			6,455
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		3,143			(9,134	)		18,765			3			12,777
Deferred revenue		(155	)		(8,353	)		1,063			–			(7,445	)

Net cash provided by (used in) operating activities		5,966			51,879			17,516			(32,800	)		42,561

Cash flows from investing activities:
Proceeds from sales of equipment		–			22,978			–			–			22,978
Investment in and net advances to unconsolidated affiliates		(36,697	)		3,650			–			32,120			(927	)
Intercompany advances		7,866			–			–			(7,866	)		–
Contract placement fee		–			(6,050	)		–			–			(6,050	)
Decrease (increase) in restricted cash		–			(1,442	)		–			–			(1,442	)
Capital expenditures		(3,645	)		(30,430	)		(5,594	)		680			(38,989	)
Other		–			260									260

Net cash provided by (used in) investing activities		(32,476	)		(11,034	)		(5,594	)		24,934			(24,170	)

Cash flows from financing activities:
Net changes in revolving notes with maturities of 90 days or less		–			–			(11,934	)		–			(11,934	)
Proceeds from revolving notes with maturities longer than 90 days		–			–			5,698			–			5,698
Repayment of revolving notes with maturities longer than 90 days		–			–			(5,698	)		–			(5,698	)
Intercompany advances		33,850			(34,061	)		(7,655	)		7,866			–
Proceeds from issuance of notes payable		–			328			1,821			–			2,149
Debt issuance costs		–			–			(109	)					(109	)
Repayments of notes payable		(32,090	)		(5,772	)		(405	)		–			(38,267	)
Proceeds from equity offering		56,250			–			–			–			56,250
Expenses from equity offering		(3,542	)		–			–			–			(3,542	)
Other		29			–			–			–			29

Net cash provided by (used in) financing activities		54,497			(39,505	)		(18,282	)		7,866			4,576

Effect of exchange rate changes		–			(902	)		612			–			(290	)
Increase (decrease) in cash and cash equivalents		27,987			438			(5,748	)		–			22,677
Cash and cash equivalents
Beginning of period		63,485			421			12,281			–			76,187

End of period	$	91,472		$	859		$	6,533		$	–		$	98,864