8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 2, 2019

THE GREENBRIER COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Oregon	001-13146	93-0816972
(State of Incorporation)	(Commission File Number)	(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

Former name or former address, if changed since last report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock without par value	GBX	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition

On July 2, 2019, The Greenbrier Companies, Inc. (“Greenbrier” or the “Company”) issued a press release reporting the Company’s results of operations for the three and nine months ended May 31, 2019. A copy of such release is attached as Exhibit 99.1.

The information under this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure

In the press release issued on July 2, 2019 and attached hereto as Exhibit 99.1, Greenbrier also issued its fourth quarter of 2019 guidance.

The information under this Item 7.01, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated July 2, 2019 of The Greenbrier Companies, Inc.

2

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 hereunto duly authorized.

	THE GREENBRIER COMPANIES, INC.
Date: July 2, 2019	By:	/s/ Adrian J. Downes
		Adrian J. Downes
		Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial Officer and Principal Accounting Officer)

3

EX-99.1

Exhibit 99.1

News Release
One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035 503-684-7000	www.gbrx.com

For release:	July 2, 2019, 6:00 a.m. EDT	Contact:	Lorie Tekorius, Investor Relations
			Justin Roberts, Investor Relations
			Ph: 503-684-7000

Greenbrier Reports Third Quarter Results

~ Announces orders of 6,500 railcars valued at $730 million ~

~ Record quarterly revenue exceeding $850 million ~

~ Core North American operations continue to build momentum ~

~ Pending ARI acquisition brings product & geographic diversification and greater scale ~

Lake Oswego, Oregon, July 2, 2019 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2019.

Third Quarter Highlights

• Net earnings attributable to Greenbrier for the quarter were $15.2 million, or $0.46 per diluted share, on revenue of $856.2 million. Quarterly results include a $10.0 million ($0.30 per share) non-cash goodwill impairment charge in the railcar repair operation and $4.3 million, net of tax, ($0.13 per share) of American Railcar Industries (ARI) acquisition costs.

• Adjusted net earnings attributable to Greenbrier were $29.6 million ($0.89 per diluted share) excluding the goodwill impairment and ARI acquisition costs.

• Adjusted EBITDA for the quarter was $84.4 million, or 9.9% of revenue.

• Orders for 6,500 diversified railcars were received during the quarter, valued at $730 million. Book-to-bill ratio was 1.0x.

• New railcar backlog as of May 31, 2019 was 26,100 units with an estimated value of $2.74 billion.

• New railcar deliveries totaled 6,500 units for the quarter.

• Board declares quarterly dividend of $0.25 per share, payable on August 8, 2019 to shareholders as of July 18, 2019.

• Acquisition of the manufacturing assets of ARI remains subject to regulatory review and approval.

William A. Furman, Chairman and CEO, said, “Greenbrier gained the momentum we expected during the quarter, led by improved operating efficiencies in our core North American manufacturing business. Greenbrier’s current and expected performance is consistent with our prior comments that revenue and margin would be back-half weighted this fiscal year. These gains were muted in our overall financial results due to continued weakness in Greenbrier’s railcar repair business and certain international operations, along with costs associated with the ARI acquisition.”

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 2

Furman continued, “Despite certain legacy headwinds and the management attention required on a major acquisition in the quarter, we are pleased with our improved core operating performance. We anticipate further strong momentum in the fourth quarter. Realignment of our railcar repair network is expected to be completed by the end of the year, which will help earnings performance in the Wheels, Repair & Parts segment. In Brazil, the long-delayed rail concession renewal process negatively affected the operations of our joint venture, resulting in a loss this quarter. Greenbrier’s Brazil operations are being right-sized for the current demand environment before order activity ramps up as expected in 2020 and over the coming years. Meanwhile, pricing and manufacturing performance in Europe responded more slowly than expected, but is now kicking in. Headwinds from Europe and Brazil are expected to turn to tailwinds in Q4 and beyond, along with other international performance contributions.”

Furman concluded, “The Company is performing well in a choppy global freight railcar market. Greenbrier received orders for approximately 6,500 new railcars valued at $730 million in the quarter. These orders span a range of railcar types from a diverse set of customers. Greenbrier’s backlog of 26,100 units valued at $2.7 billion provides strong visibility and cash flow into fiscal 2020. Greenbrier’s four-part strategy remains unchanged: reinforcing our core North American markets, executing on our international strategy, developing a robust talent pipeline, and growing the business on a larger scale. The strategy and Greenbrier’s integrated business model work in parallel to support our success over time, especially with the acquisition of ARI, which will allow a larger, more diversified product and geographic mix in North America.”

Fiscal Q4 2019 Outlook

Based on current business trends, Greenbrier believes for the fourth quarter:

• Deliveries will be 7,000 – 8,000 units including Greenbrier-Maxion (Brazil) (which will account for approximately 100 – 200 units).

• Revenue will be nearly $1.0 billion.

• Diluted EPS will be $1.30 - 1.50 excluding any ARI acquisition costs or operational benefits.

As noted in the “Safe Harbor” statement, there are risks to achieving this guidance. Certain orders and backlog in this release are subject to customary documentation and completion of terms.

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 3

Financial Summary

	Q3 FY19		Q2 FY19		Sequential Comparison – Main Drivers
Revenue	$	856.2M	$	658.7M	Up 30% due to increased delivery volumes
Gross margin		12.4%		8.2%	Primarily improved manufacturing efficiency
Selling and administrative expense		$54.4M		$47.9M	Includes $5.8 million of ARI acquisition expenses
Adjusted EBITDA		$84.4M		$37.4M	Increased operating earnings; see reconciliation on page 12
Effective tax rate		30.0%		25.5%	Higher quarterly rate driven by goodwill impairment with no tax benefit; excluding goodwill, the rate would have been ~25%
Loss from unconsolidated affiliates		$4.6M		$0.8M	Decline primarily driven by negative performance in Brazil due to low delivery volume
Net earnings attributable to noncontrolling interest		$10.6M		$3.0M	Increased deliveries and improved mix at GIMSA JV
Adjusted net earnings attributable to Greenbrier		$29.6M(1)		$2.8M	Increased operating earnings reflecting higher delivery volumes and manufacturing gross margin
Adjusted diluted EPS		$0.89(1)		$0.08

(1) Excludes $10.0 million ($0.30 per share) non-cash impact associated with a goodwill impairment charge and $4.3 million ($0.13 per share), net of tax, expense associated with ARI acquisition costs.

Segment Summary

	Q3 FY19	Q2 FY19	Sequential Comparison – Main Drivers
Manufacturing
Revenue	$681.6M	$476.0M	43% increase driven by 44% increase in deliveries
Gross margin	13.3%	6.9%	Improved efficiency and product mix
Operating margin (1)	10.6%	2.9%
Deliveries (2)	6,500	4,500	Higher production levels and syndication activity
Wheels, Repair & Parts
Revenue	$125.0M	$125.3M	Continued seasonally strong volumes
Gross margin	4.1%	5.4%	Continued operating challenges in railcar repair operations
Operating margin (1)	(7.1%)	2.3%	Includes $10.0 million, non-cash goodwill impairment
Leasing & Services
Revenue	$49.6M	$57.4M	Less secondary market syndication activity
Gross margin	21.4%	24.4%	Decline primarily reflects increased transportation costs and less interim rent on certain railcars
Operating margin (1) (3)	30.9%	36.7%	Lower gross margin and modestly lower level of gains on disposition of equipment

(1) See supplemental segment information on page 11 for additional information.

(2) Excludes Brazil deliveries which are not consolidated into manufacturing revenue and margins.

(3) Includes Net gain on disposition of equipment, which is excluded from gross margin.

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 4

Conference Call

Greenbrier will host a teleconference to discuss its third quarter 2019 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:

• July 2, 2019

• 8:00 a.m. Pacific Daylight Time

• Phone: 1-630-395-0143, Password: “Greenbrier”

• Real-time Audio Access: (“Newsroom” at http://www.gbrx.com)

Please access the site 10 minutes prior to the start time.

About Greenbrier

Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in the nations of the Gulf Cooperation Council. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit. Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of 8,900 railcars and performs management services for 374,000 railcars. Learn more about Greenbrier at www.gbrx.com.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release may contain forward-looking statements, including any statements that are not purely statements of historical fact. Greenbrier uses words such as “affirms,” “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog and awards that are not indicative of Greenbrier’s financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbrier’s indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; policies and priorities of the federal government regarding international trade, taxation and infrastructure; sovereign risk to contracts, exchange rates or property rights; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 5

resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed Greenbrier’s insurance coverage; train derailments or other accidents or claims that could subject Greenbrier to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other railcar or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings “Risk Factors” and “Forward Looking Statements” in Greenbrier’s Annual Report on Form 10-K for the fiscal year ended August 31, 2018, Greenbrier’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2019, and Greenbrier’s other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.

Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier, Adjusted diluted EPS and Diluted earnings per share range excluding ARI acquisition costs are not financial measures under generally accepted accounting principles (GAAP). These metrics are performance measurement tools used by rail supply companies and Greenbrier. You should not consider these metrics in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because these metrics are not a measure of financial performance under GAAP and are susceptible to varying calculations, the measures presented may differ from and may not be comparable to similarly titled measures used by other companies.

We define Adjusted EBITDA as Net earnings before Interest and foreign exchange, Income tax expense (benefit), Depreciation and amortization and excluding the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe the presentation of Adjusted EBITDA provides useful information as it excludes the impact of financing, foreign exchange, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s core business. We believe this assists in comparing our performance across reporting periods.

Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. Diluted earnings per share range excluding ARI acquisition costs exclude ARI acquisition costs. We believe these assist in comparing our performance across reporting periods.

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 6

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

	May 31, 2019		February 28, 2019		November 30, 2018		August 31, 2018		May 31, 2018
Assets
Cash and cash equivalents	$	359,625	$	341,500	$	462,797	$	530,655	$	589,969
Restricted cash		21,471		21,584		8,872		8,819		9,204
Accounts receivable, net		330,385		335,732		306,917		348,406		322,328
Inventories		592,099		574,146		492,573		432,314		396,518
Leased railcars for syndication		130,489		163,472		233,415		130,926		158,194
Equipment on operating leases, net		376,241		381,336		317,282		322,855		302,074
Property, plant and equipment, net		478,502		472,739		461,120		457,196		424,035
Investment in unconsolidated affiliates		53,036		58,685		58,682		61,414		75,884
Intangibles and other assets, net		97,022		101,284		95,958		94,668		82,030
Goodwill		74,318		82,743		77,508		78,211		70,347
	$	2,513,188	$	2,533,221	$	2,515,124	$	2,465,464	$	2,430,583
Liabilities and Equity
Revolving notes	$	25,952	$	22,323	$	22,189	$	27,725	$	20,337
Accounts payable and accrued liabilities		473,106		474,863		438,304		449,857		447,827
Deferred income taxes		12,089		29,481		30,631		31,740		36,657
Deferred revenue		76,170		91,533		108,566		105,954		102,919
Notes payable, net		483,918		486,107		487,764		436,205		437,833
Contingently redeemable noncontrolling interest		24,722		25,637		28,449		29,768		31,135
Total equity - Greenbrier		1,262,315		1,257,818		1,257,631		1,250,101		1,225,512
Noncontrolling interest		154,916		145,459		141,590		134,114		128,363
Total equity		1,417,231		1,403,277		1,399,221		1,384,215		1,353,875
	$	2,513,188	$	2,533,221	$	2,515,124	$	2,465,464	$	2,430,583

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 7

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

	Three Months Ended May 31,						Nine Months Ended May 31,
	2019			2018			2019			2018
Revenue
Manufacturing	$	681,588		$	510,099		$	1,629,396		$	1,473,411
Wheels, Repair & Parts		124,980			94,515			358,801			261,236
Leasing & Services		49,584			36,773			131,149			95,611
		856,152			641,387			2,119,346			1,830,258
Cost of revenue
Manufacturing		590,788			427,875			1,451,589			1,237,890
Wheels, Repair & Parts		119,821			85,850			339,254			239,064
Leasing & Services		38,971			19,155			95,554			50,136
		749,580			532,880			1,886,397			1,527,090
Margin		106,572			108,507			232,949			303,168
Selling and administrative expense		54,377			51,793			152,701			149,130
Net gain on disposition of equipment		(11,019	)		(14,825	)		(37,474	)		(39,813	)
Goodwill impairment		10,025			—			10,025			—
Earnings from operations		53,189			71,539			107,697			193,851
Other costs
Interest and foreign exchange		9,770			6,533			23,411			20,582
Earnings before income taxes and loss from unconsolidated affiliates		43,419			65,006			84,286			173,269
Income tax expense		(13,008	)		(15,944	)		(24,391	)		(22,778	)
Earnings before loss from unconsolidated affiliates		30,411			49,062			59,895			150,491
Loss from unconsolidated affiliates		(4,564	)		(12,823	)		(4,883	)		(15,586	)
Net earnings		25,847			36,239			55,012			134,905
Net earnings attributable to noncontrolling interest		(10,599	)		(3,288	)		(19,043	)		(14,059	)
Net earnings attributable to Greenbrier	$	15,248		$	32,951		$	35,969		$	120,846
Basic earnings per common share:	$	0.47		$	1.03		$	1.10		$	3.99
Diluted earnings per common share:	$	0.46		$	1.01		$	1.08		$	3.75
Weighted average common shares:
Basic		32,603			32,034			32,623			30,250
Diluted		33,183			32,914			33,161			32,774
Dividends declared per common share	$	0.25		$	0.25		$	0.75		$	0.71

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 8

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Nine Months Ended May 31,
	2019			2018
Cash flows from operating activities
Net earnings	$	55,012		$	134,905
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Deferred income taxes		(20,478	)		(38,825	)
Depreciation and amortization		60,833			55,161
Net gain on disposition of equipment		(37,474	)		(39,813	)
Accretion of debt discount		3,268			3,109
Stock based compensation expense		10,792			20,311
Goodwill impairment		10,025			—
Noncontrolling interest adjustments		7,322			1,067
Other		1,916			1,345
Decrease (increase) in assets:
Accounts receivable, net		27,926			(24,980	)
Inventories		(169,813	)		(4,270	)
Leased railcars for syndication		(43,796	)		(69,994	)
Other		(2,525	)		30,549
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		30,581			34,898
Deferred revenue		(27,712	)		(23,837	)
Net cash provided by (used in) operating activities		(94,123	)		79,626
Cash flows from investing activities
Proceeds from sales of assets		100,730			129,828
Capital expenditures		(149,945	)		(118,656	)
Investment in and advances to unconsolidated affiliates		(11,393	)		(21,455	)
Cash distribution from unconsolidated affiliates		1,986			3,941
Net cash used in investing activities		(58,622	)		(6,342	)
Cash flows from financing activities
Net change in revolving notes with maturities of 90 days or less		(1,882	)		16,013
Proceeds from issuance of notes payable		225,000			13,749
Repayments of notes payable		(179,803	)		(19,274	)
Debt issuance costs		(2,974	)		—
Investment by joint venture partner		—			6,500
Dividends		(25,072	)		(21,866	)
Cash distribution to joint venture partner		(11,715	)		(69,413	)
Tax payments for net share settlement of restricted stock		(6,321	)		(7,716	)
Net cash used in financing activities		(2,767	)		(82,007	)
Effect of exchange rate changes		(2,866	)		(12,462	)
Decrease in cash, cash equivalents and restricted cash		(158,378	)		(21,185	)
Cash and cash equivalents and restricted cash
Beginning of period		539,474			620,358
End of period	$	381,096		$	599,173
Balance Sheet Reconciliation
Cash and cash equivalents	$	359,625		$	589,969
Restricted cash		21,471			9,204
Total cash and cash equivalents and restricted cash as presented above	$	381,096		$	599,173

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 9

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2019 are as follows:

	First			Second			Third			Total
Revenue
Manufacturing	$	471,789		$	476,019		$	681,588		$	1,629,396
Wheels, Repair & Parts		108,543			125,278			124,980			358,801
Leasing & Services		24,191			57,374			49,584			131,149
		604,523			658,671			856,152			2,119,346
Cost of revenue
Manufacturing		417,805			442,996			590,788			1,451,589
Wheels, Repair & Parts		100,978			118,455			119,821			339,254
Leasing & Services		13,207			43,376			38,971			95,554
		531,990			604,827			749,580			1,886,397
Margin		72,533			53,844			106,572			232,949
Selling and administrative expense		50,432			47,892			54,377			152,701
Net gain on disposition of equipment		(14,353	)		(12,102	)		(11,019	)		(37,474	)
Goodwill impairment		—			—			10,025			10,025
Earnings from operations		36,454			18,054			53,189			107,697
Other costs
Interest and foreign exchange		4,404			9,237			9,770			23,411
Earnings before income taxes and earnings (loss) from unconsolidated affiliates		32,050			8,817			43,419			84,286
Income tax expense		(9,135	)		(2,248	)		(13,008	)		(24,391	)
Earnings before earnings (loss) from unconsolidated affiliates		22,915			6,569			30,411			59,895
Earnings (loss) from unconsolidated affiliates		467			(786	)		(4,564	)		(4,883	)
Net earnings		23,382			5,783			25,847			55,012
Net earnings attributable to noncontrolling interest		(5,426	)		(3,018	)		(10,599	)		(19,043	)
Net earnings attributable to Greenbrier	$	17,956		$	2,765		$	15,248		$	35,969
Basic earnings per common share (1)	$	0.55		$	0.08		$	0.47		$	1.10
Diluted earnings per common share (1)	$	0.54		$	0.08		$	0.46		$	1.08

(1) Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share excludes the dilutive effect of the 2024 Convertible Notes, since the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive, but includes restricted stock units that are not considered participating securities and restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved, when dilutive.

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 10

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2018 are as follows:

	First			Second			Third			Fourth			Total
Revenue
Manufacturing	$	451,485		$	511,827		$	510,099		$	571,175		$	2,044,586
Wheels, Repair & Parts		78,011			88,710			94,515			85,787			347,023
Leasing & Services		30,039			28,799			36,773			32,244			127,855
		559,535			629,336			641,387			689,206			2,519,464
Cost of revenue
Manufacturing		380,850			429,165			427,875			489,517			1,727,407
Wheels, Repair & Parts		72,506			80,708			85,850			79,266			318,330
Leasing & Services		16,865			14,116			19,155			14,536			64,672
		470,221			523,989			532,880			583,319			2,110,409
Margin		89,314			105,347			108,507			105,887			409,055
Selling and administrative expense		47,043			50,294			51,793			51,309			200,439
Net gain on disposition of equipment		(19,171	)		(5,817	)		(14,825	)		(4,556	)		(44,369	)
Earnings from operations		61,442			60,870			71,539			59,134			252,985
Other costs
Interest and foreign exchange		7,020			7,029			6,533			8,786			29,368
Earnings before income tax and earnings (loss) from unconsolidated affiliates		54,422			53,841			65,006			50,348			223,617
Income tax benefit (expense)		(18,135	)		11,301			(15,944	)		(10,115	)		(32,893	)
Earnings before earnings (loss) from unconsolidated affiliates		36,287			65,142			49,062			40,233			190,724
Earnings (loss) from unconsolidated affiliates		(2,910	)		147			(12,823	)		(3,075	)		(18,661	)
Net earnings		33,377			65,289			36,239			37,158			172,063
Net earnings attributable to noncontrolling interest		(7,124	)		(3,647	)		(3,288	)		(6,223	)		(20,282	)
Net earnings attributable to Greenbrier	$	26,253		$	61,642		$	32,951		$	30,935		$	151,781
Basic earnings per common share (1)	$	0.90		$	2.10		$	1.03		$	0.95		$	4.92
Diluted earnings per common share (1)	$	0.83		$	1.91		$	1.01		$	0.94		$	4.68

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share excludes the dilutive effect of the 2024 Convertible Notes, since the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive, but includes restricted stock units that are not considered participating securities and restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved, when dilutive and the dilutive effect of shares underlying the 2018 Convertible Notes using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible Notes matured on April 1, 2018.

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 11

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, unaudited)

Segment Information

Three months ended May 31, 2019:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	681,588	$	29,201		$	710,789		$	72,110		$	2,000		$	74,110
Wheels, Repair & Parts		124,980		11,601			136,581			(8,820	)		808			(8,012	)
Leasing & Services		49,584		5,848			55,432			15,337			4,913			20,250
Eliminations		—		(46,650	)		(46,650	)		—			(7,721	)		(7,721	)
Corporate		—		—			—			(25,438	)		—			(25,438	)
	$	856,152	$	—		$	856,152		$	53,189		$	—		$	53,189

Three months ended February 28, 2019:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	476,019	$	46,855		$	522,874		$	13,990		$	2,358		$	16,348
Wheels, Repair & Parts		125,278		8,858			134,136			2,823			(858	)		1,965
Leasing & Services		57,374		2,911			60,285			21,030			2,101			23,131
Eliminations		—		(58,624	)		(58,624	)		—			(3,601	)		(3,601	)
Corporate		—		—			—			(19,789	)		—			(19,789	)
	$	658,671	$	—		$	658,671		$	18,054		$	—		$	18,054

	Total assets
	May 31, 2019		February 28, 2019
Manufacturing	$	1,143,718	$	1,093,593
Wheels, Repair & Parts		307,630		341,317
Leasing & Services		650,483		704,016
Unallocated		411,357		394,295
	$	2,513,188	$	2,533,221

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 12

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, excluding backlog and delivery units, unaudited)

Reconciliation of Net earnings to Adjusted EBITDA

	Three Months Ended
	May 31, 2019		February 28, 2019
Net earnings	$	25,847	$	5,783
Interest and foreign exchange		9,770		9,237
Income tax expense		13,008		2,248
Depreciation and amortization		20,018		20,115
Goodwill impairment		10,025		—
ARI acquisition costs		5,761		—
Adjusted EBITDA	$	84,429	$	37,383

	Three Months Ended
	May 31, 2019
Backlog Activity (units) (1)
Beginning backlog		26,000
Orders received		6,500
Production held as Leased railcars for syndication		(1,400	)
Production sold directly to third parties		(5,000	)
Ending backlog		26,100
Delivery Information (units) (1)
Production sold directly to third parties		5,000
Sales of Leased railcars for syndication		1,500
Total deliveries		6,500

(1) Includes Greenbrier-Maxion, our Brazilian railcar manufacturer, which is accounted for under the equity method

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Greenbrier Reports Third Quarter Results. . . (Cont.) Page 13

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Reconciliation of common shares outstanding

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

	Three Months Ended
	May 31, 2019		February 28, 2019
Weighted average basic common shares outstanding (1)		32,603		32,628
Dilutive effect of convertible notes (2)		—		—
Dilutive effect of performance awards (3)		580		578
Weighted average diluted common shares outstanding		33,183		33,206

(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 the 2024 Convertible notes was excluded for the three months ended May 31, 2019 and February 28, 2019 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive.

(3) 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 shares outstanding when the Company is in a net earnings position.

	Three Months Ended
	May 31, 2019			February 28, 2019
Net earnings attributable to Greenbrier	$	15,248		$	2,765
Goodwill impairment		10,025			—
ARI acquisition costs, net of tax		4,285			—
Adjusted net earnings attributable to Greenbrier	$	29,558		$	2,765
Weighted average diluted common shares outstanding		33,183			33,206
Diluted earnings per share	$	0.46		$	0.08
Goodwill impairment		0.30	(1)		—
ARI acquisition costs		0.13	(2)		—
Adjusted diluted earnings per share	$	0.89		$	0.08

⁽¹⁾  Goodwill impairment of $10.0 million divided by weighted average diluted common shares outstanding of 33,183 for the three months ended May 31, 2019.

⁽²⁾  ARI acquisition costs of $4.3 million, net of tax, divided by weighted average diluted common shares outstanding of 33,183 for the three months ended May 31, 2019.

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