Earnings Per Share (Tables)

9 Months Ended

May 31, 2016

Reconciliation of Shares Used in Computation of Basic and Diluted Earnings Per Common Share

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


(In thousands)	Three Months Ended May 31,				Nine Months Ended May 31,
(In thousands)	2016		2015		2016		2015
Weighted average basic common shares outstanding ⁽¹⁾		29,059		27,842		29,182		27,514
Dilutive effect of 2018 Convertible notes ⁽²⁾		3,224		5,155		3,202		5,745
Dilutive effect of 2026 Convertible notes ⁽³⁾		—		3		—		3
Dilutive effect of performance based restricted stock units ⁽⁴⁾		59		—		91		—

Weighted average diluted common shares outstanding		32,342		33,000		32,475		33,262

(1)

Restricted stock grants and restricted stock units, 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 the 2018 Convertible notes was included for the three and nine months ended May 31, 2016 and 2015 as they were considered dilutive under the “if converted” method as further discussed below.

(3)

The dilutive effect of the 2026 Convertible notes was excluded for the three and nine months ended May 31, 2016 as the average stock price was less than the conversion price of $47.15 and therefore was considered anti-dilutive. The effect of the 2026 Convertible notes was included for the three and nine months ended May 31, 2015 as the average stock price was greater than the applicable conversion price, as further described below.

(4)

Restricted stock units that are 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.

Approach to Calculate Diluted Earning per Share


	Three Months Ended May 31,				Nine Months Ended May 31,
	2016		2015		2016		2015
Net earnings attributable to Greenbrier	$	35,352	$	42,811	$	149,653	$	125,948
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax		733		1,234		1,962		4,066

Earnings before interest and debt issuance costs on convertible notes	$	36,085	$	44,045	$	151,615	$	130,014

Weighted average diluted common shares outstanding		32,342		33,000		32,475		33,262
Diluted earnings per share ⁽¹⁾	$	1.12	$	1.33	$	4.67	$	3.91

(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