Earnings (Loss) Per Share

9 Months Ended

May 31, 2013

Note 11 – Earnings (Loss) Per Share

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


	Three Months Ended May 31,				Nine Months Ended May 31,
(In thousands)	2013		2012		2013		2012
Weighted average basic common shares outstanding ⁽¹⁾⁽³⁾		26,619		26,981		26,510		26,378
Dilutive effect of warrants ⁽²⁾		—		836		—		1,217
Dilutive effect of restricted stock units ⁽²⁾⁽³⁾		—		—		—		—
Dilutive effect of convertible notes ⁽²⁾⁽⁴⁾		—		6,045		—		6,045

Weighted average diluted common shares outstanding		26,619		33,862		26,510		33,640

(1)

Restricted stock grants are treated as outstanding when issued and are included in weighted average basic common shares outstanding when the Company is in a net earnings position. Shares outstanding exclude shares of unvested restricted stock for the three and nine months ended May 31, 2013 due to a net loss.

(2)

The dilutive effect of common stock equivalents is excluded from the share calculations for the three and nine months ended May 31, 2013 due to a net loss.

(3)

Restricted stock units were granted during the three months ended May 31, 2013. Restricted stock units are not included in weighted average basic common shares outstanding. The dilutive effect of restricted stock units is included in the weighted average diluted common shares outstanding when the Company is in a net earnings position.

(4)

The dilutive effect of the 2018 Convertible notes are included for the three and nine months ended May 31, 2012 as they were considered dilutive under the “if converted” method as further discussed below. The dilutive effect of the 2026 Convertible notes was excluded from the share calculations as the stock price for each period presented was less than the initial conversion price of $48.05 and therefore considered anti-dilutive.

Dilutive EPS for the three and nine months ended May 31, 2012 was calculated using the more dilutive of two approaches. The first approach includes the dilutive effect of outstanding warrants and shares underlying the 2026 Convertible notes in the share count using the treasury stock method. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes issued in March 2011. Under the “if converted method” debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2026 Convertible notes would only be included in the calculation of both approaches if the current stock price is greater than the initial conversion price of $48.05 using the treasury stock method.

The diluted earnings per share calculation below was not applicable for the three and nine months ended May 31, 2013 as the Company was in a net loss and the impact would be anti-dilutive.


	Three Months Ended May 31, 2012			Nine Months Ended May 31, 2012
Net earnings attributable to Greenbrier	$	19,117		$	51,303
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax		1,416			4,262

Earnings before interest and debt issuance costs on convertible notes	$	20,533		$	55,565

Weighted average diluted common shares outstanding		33,862			33,640
Diluted earnings per share	$	0.61	⁽¹⁾	$	1.65	⁽¹⁾

(1)

Diluted earnings per share was calculated as follows:

Earnings before interest and debt issuance costs (net of tax) on convertible notes

Weighted average diluted common shares outstanding

- Definition

The entire disclosure for earnings per share.

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