UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the quarterly period ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from ______ to ______
Commission File No.
(Exact name of registrant as specified in its charter)
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(State of Incorporation) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
The number of shares of the registrant’s common stock, without par value, outstanding on March 31, 2021 was
FORM 10-Q
Table of Contents
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Page |
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3 |
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PART I. |
4 |
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Item 1. |
4 |
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4 |
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5 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) |
6 |
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7 |
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9 |
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10 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
Item 3. |
46 |
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Item 4. |
47 |
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PART II. |
48 |
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Item 1. |
48 |
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Item 1A. |
48 |
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Item 2. |
49 |
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Item 6. |
50 |
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51 |
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events and include any statement that does not relate to any historical or current fact. We use words such as “anticipates,” “believes,” “forecast,” “potential,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “future,” “preliminary” and similar expressions to identify forward-looking statements. Forward-looking statements are not guarantees of future performance.
Forward-looking statements are based on currently available operating, financial and market information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to:
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the COVID-19 coronavirus pandemic, the governmental reaction to COVID-19 and the related significant global decline in general economic activity as more fully described in Part II Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q; |
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changes in our product mix or decline in revenue due to shifts in demand; |
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the cyclical nature of our business; |
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equipment failures, technological failures, costs and inefficiencies associated with changing of production lines, or transfer of production between facilities; |
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a decline in demand for our railcar equipment and services; |
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our ability to realize the anticipated benefits of our new leasing strategy; |
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a decline in performance, or increase in efficiency, of the rail freight industry; |
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risks related to our operations outside of the United States (U.S.) including enforcement actions by regulators related to tax, environmental, labor, safety, or other regulations; |
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governmental policy changes impacting international trade and corporate tax; |
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the loss of, or reduction of, business from one or more of our limited number of customers; |
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the loss of, or reduction of, supply of inputs for our business from one or more of our limited number of suppliers; and |
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our inability to lease railcars at satisfactory rates, remarket leased railcars on favorable terms upon lease termination, or realize the expected residual values for end of life railcars due to changes in scrap prices; |
The foregoing risks are described in more detail in Part I Item 1A “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent Quarterly Report on Form 10-Q which are incorporated herein by reference. You are cautioned not to place undue reliance on any forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements. All references to years refer to the fiscal years ended August 31st unless otherwise noted.
3
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
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February 28, 2021 |
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August 31, 2020 |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Income tax receivable |
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Inventories |
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Leased railcars for syndication |
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Equipment on operating leases, net |
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Property, plant and equipment, net |
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Investment in unconsolidated affiliates |
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Intangibles and other assets, net |
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Goodwill |
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$ |
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$ |
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Liabilities and Equity |
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Revolving notes |
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$ |
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$ |
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Accounts payable and accrued liabilities |
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Deferred income taxes |
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Deferred revenue |
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Notes payable, net |
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Commitments and contingencies (Note 14) |
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Contingently redeemable noncontrolling interest |
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Equity: |
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Greenbrier |
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Preferred stock - authorized; |
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Common stock - authorized; February 28, 2021 and August 31, 2020 |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Total equity – Greenbrier |
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Noncontrolling interest |
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Total equity |
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$ |
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$ |
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The accompanying notes are an integral part of these financial statements
4
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
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Three Months Ended |
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Six Months Ended |
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February 28, 2021 |
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February 29, 2020 |
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February 28, 2021 |
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February 29, 2020 |
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Revenue |
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Manufacturing |
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$ |
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$ |
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$ |
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$ |
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Wheels, Repair & Parts |
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Leasing & Services |
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Cost of revenue |
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Manufacturing |
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Wheels, Repair & Parts |
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Leasing & Services |
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Margin |
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Selling and administrative expense |
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Net gain on disposition of equipment |
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( |
) |
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( |
) |
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( |
) |
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( |
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Earnings (loss) from operations |
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( |
) |
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( |
) |
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Other costs |
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Interest and foreign exchange |
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Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates |
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( |
) |
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( |
) |
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Income tax benefit (expense) |
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( |
) |
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( |
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Earnings (loss) before earnings (loss) from unconsolidated affiliates |
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( |
) |
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( |
) |
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Earnings (loss) from unconsolidated affiliates |
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( |
) |
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( |
) |
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Net earnings (loss) |
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( |
) |
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( |
) |
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Net (earnings) loss attributable to noncontrolling interest |
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( |
) |
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( |
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Net earnings (loss) attributable to Greenbrier |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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Basic earnings (loss) per common share |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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Diluted earnings (loss) per common share |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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Weighted average common shares: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these financial statements
5
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands, unaudited)
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Three Months Ended |
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Six Months Ended |
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February 28, 2021 |
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February 29, 2020 |
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February 28, 2021 |
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February 29, 2020 |
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Net earnings (loss) |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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Other comprehensive income (loss) |
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Translation adjustment |
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( |
) |
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( |
) |
Reclassification of derivative financial instruments recognized in net earnings (loss) 1 |
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Unrealized loss on derivative financial instruments 2 |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Other (net of tax effect) |
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( |
) |
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( |
) |
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( |
) |
Comprehensive income (loss) |
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( |
) |
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( |
) |
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Comprehensive (income) loss attributable to noncontrolling interest |
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( |
) |
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( |
) |
Comprehensive income (loss) attributable to Greenbrier |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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1 |
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2 |
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The accompanying notes are an integral part of these financial statements
6
Condensed Consolidated Statements of Equity
(In thousands, except per share amounts, unaudited)
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Attributable to Greenbrier |
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Common Stock Shares |
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Additional Paid-in Capital |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Total Equity - Greenbrier |
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Noncontrolling Interest |
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Total Equity |
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Contingently Redeemable Noncontrolling Interest |
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Balance August 31, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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Cumulative effect adjustment due to adoption of ASU 2016-13 (see Note 1) |
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— |
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— |
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( |
) |
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— |
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( |
) |
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— |
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( |
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— |
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Net loss |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Other comprehensive income, net |
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— |
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— |
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— |
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— |
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Noncontrolling interest adjustments |
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— |
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— |
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— |
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— |
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— |
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( |
) |
|
( |
) |
|
— |
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Joint venture partner distribution declared |
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— |
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— |
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— |
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— |
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— |
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( |
) |
|
( |
) |
|
— |
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Restricted stock awards (net of cancellations) |
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— |
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— |
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— |
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— |
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Unamortized restricted stock |
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— |
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( |
) |
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— |
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— |
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( |
) |
|
— |
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( |
) |
|
— |
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Restricted stock amortization |
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— |
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— |
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— |
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— |
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— |
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Cash dividends ($ |
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— |
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— |
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( |
) |
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— |
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( |
) |
|
— |
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( |
) |
|
— |
|
Balance February 28, 2021 |
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$ |
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$ |
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$ |
( |
) |
$ |
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$ |
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|
$ |
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$ |
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|
Attributable to Greenbrier |
|
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|
|||||||||||||
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Common Stock Shares |
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Additional Paid-in Capital |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Total Equity - Greenbrier |
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Noncontrolling Interest |
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Total Equity |
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Contingently Redeemable Noncontrolling Interest |
|
||||||||
Balance November 30, 2020 |
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|
$ |
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$ |
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$ |
( |
) |
$ |
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$ |
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$ |
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$ |
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Net loss |
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— |
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— |
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( |
) |
|
— |
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( |
) |
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( |
) |
|
( |
) |
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( |
) |
Other comprehensive income, net |
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— |
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— |
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— |
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— |
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Noncontrolling interest adjustments |
|
— |
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— |
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— |
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|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
Joint venture partner distribution declared |
|
— |
|
|
— |
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— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
Noncontrolling interest acquired |
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— |
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— |
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— |
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— |
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— |
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— |
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|
— |
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|
— |
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Restricted stock awards (net of cancellations) |
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— |
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— |
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|
|
|
— |
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|
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— |
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Unamortized restricted stock |
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
Restricted stock amortization |
|
— |
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— |
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— |
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— |
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— |
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Cash dividends ($ |
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— |
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— |
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( |
) |
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
Balance February 28, 2021 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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|
7
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Attributable to Greenbrier |
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|
|
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|||||||||||||
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Common Stock Shares |
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Additional Paid-in Capital |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Total Equity - Greenbrier |
|
Noncontrolling Interest |
|
Total Equity |
|
Contingently Redeemable Noncontrolling Interest |
|
||||||||
Balance August 31, 2019 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Cumulative effect adjustment due to adoption of ASU 2016-02 (See Note 1) |
|
— |
|
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— |
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— |
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— |
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— |
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Net earnings |
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Other comprehensive loss, net |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
— |
|
Noncontrolling interest adjustments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
Joint venture partner distribution declared |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
Noncontrolling interest acquired |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
Restricted stock awards (net of cancellations) |
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Unamortized restricted stock |
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
Restricted stock amortization |
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Cash dividends ($ share) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
Balance February 29, 2020 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
Attributable to Greenbrier |
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Common Stock Shares |
|
Additional Paid-in Capital |
|
Retained Earnings |
|
Accumulated Other Comprehensive Loss |
|
Total Equity - Greenbrier |
|
Noncontrolling Interest |
|
Total Equity |
|
Contingently Redeemable Noncontrolling Interest |
|
||||||||
Balance November 30, 2019 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Net earnings |
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Other comprehensive loss, net |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
— |
|
Noncontrolling interest adjustments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
Joint venture partner distribution declared |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
Restricted stock awards (net of cancellations) |
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Unamortized restricted stock |
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
Restricted stock amortization |
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Cash dividends ($ share) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
Balance February 29, 2020 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
The accompanying notes are an integral part of these financial statements
8
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
|
|
Six Months Ended |
|
|||||
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
( |
) |
|
$ |
|
|
Adjustments to reconcile net earnings (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
|
|
|
|
( |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
Net gain on disposition of equipment |
|
|
( |
) |
|
|
( |
) |
Accretion of debt discount |
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
|
|
|
|
|
|
Noncontrolling interest adjustments |
|
|
( |
) |
|
|
|
|
Other |
|
|
|
|
|
|
( |
) |
Decrease (increase) in assets: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
( |
) |
|
|
|
|
Income tax receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Leased railcars for syndication |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Increase (decrease) in liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Proceeds from sales of assets |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Investments in and advances to / repayments from unconsolidated affiliates |
|
|
|
|
|
|
( |
) |
Cash distribution from unconsolidated affiliates and other |
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
|
( |
) |
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Net change in revolving notes with maturities of 90 days or less |
|
|
|
|
|
|
|
|
Proceeds from revolving notes with maturities longer than 90 days |
|
|
|
|
|
|
— |
|
Repayments of revolving notes with maturities longer than 90 days |
|
|
( |
) |
|
|
— |
|
Repayments of notes payable |
|
|
( |
) |
|
|
( |
) |
Dividends |
|
|
( |
) |
|
|
( |
) |
Cash distribution to joint venture partner |
|
|
( |
) |
|
|
( |
) |
Tax payments for net share settlement of restricted stock |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate changes |
|
|
|
|
|
|
( |
) |
Decrease in cash and cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents and restricted cash |
|
|
|
|
|
|
|
|
Beginning of period |
|
|
|
|
|
|
|
|
End of period |
|
$ |
|
|
|
$ |
|
|
Balance sheet reconciliation |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
|
|
Restricted cash |
|
|
|
|
|
|
|
|
Total cash and cash equivalents and restricted cash as presented above |
|
$ |
|
|
|
$ |
|
|
Cash paid during the period for |
|
|
|
|
|
|
|
|
Interest |
|
$ |
|
|
|
$ |
|
|
Income taxes, net |
|
$ |
|
|
|
$ |
|
|
Non-cash activity |
|
|
|
|
|
|
|
|
Transfer from Leased railcars for syndication and Inventories to Equipment on operating leases, net |
|
$ |
|
|
|
$ |
|
|
Capital expenditures accrued in Accounts payable and accrued liabilities |
|
$ |
|
|
|
$ |
|
|
Change in Accounts payable and accrued liabilities associated with dividends declared |
|
$ |
|
|
|
$ |
( |
) |
Conversion of unconsolidated affiliate note receivable to Investment in unconsolidated affiliates |
|
$ |
— |
|
|
$ |
|
|
Change in Accounts payable and accrued liabilities associated with cash distributions to joint venture partner |
|
$ |
|
|
|
$ |
|
|
The accompanying notes are an integral part of these financial statements
9
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 – Interim Financial Statements
The Condensed Consolidated Financial Statements of The Greenbrier Companies, Inc. and its subsidiaries (Greenbrier or the Company) as of February 28, 2021 and for the three and six months ended February 28, 2021 and February 29, 2020 have been prepared to reflect all adjustments (consisting of normal recurring accruals) that, in the opinion of management, are necessary for a fair presentation of the financial position, operating results and cash flows for the periods indicated. The results of operations for the three and six months ended February 28, 2021 are not necessarily indicative of the results to be expected for the entire year ending August 31, 2021.
Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these unaudited financial statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended August 31, 2020.
Management Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (GAAP) requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.
Reclassifications – Certain immaterial reclassifications have been made to prior year balances in order to conform to the current year’s presentation.
Initial Adoption of Accounting Standards
Measurement of Credit Losses on Financial Instruments
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update 2016-13, Financial Instruments – Credit Losses (ASU 2016-13). This update introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance applies to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. The new guidance also applies to debt securities and other financial assets measured at fair value through other comprehensive income (loss). The new guidance is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance beginning
Prospective Accounting Changes
Convertible Instruments and Contracts in an Entity’s Own Equity
In August 2020, the FASB issued Accounting Standard Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted EPS calculations as a result of these changes. The Company expects this change to reduce reported interest expense, increase reported net income, and result in a reclassification of certain convertible balance sheet amounts from stockholders’ equity to liabilities as it relates to the Company’s convertible senior notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted EPS,
10
which is expected to be incrementally dilutive compared to the Company’s current accounting treatment. The guidance in this ASU can be adopted using either a full or modified retrospective approach and becomes effective for annual reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.
Simplification of Accounting for Income Taxes
In December 2019, the FASB issued Accounting Standard Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 for: recognizing deferred taxes for investments, performing intra-period allocations and calculating taxes in interim periods. The ASU also improves consistent application of GAAP for other areas of Topic 740 by clarifying and amending existing guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The standard is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and disclosures.
Note 2 – Revenue Recognition
Contract balances
Contract assets primarily consist of unbilled receivables related to marine vessel construction and railcar repair services, for which the respective contracts do not yet permit billing at the reporting date. Contract liabilities primarily consist of customer prepayments for manufacturing, maintenance, and other management-type services, for which the Company has not yet satisfied the related performance obligations.
The contract balances are as follows:
(in thousands) |
|
Balance sheet classification |
|
February 28, 2021 |
|
|
August 31, 2020 |
|
|
$ change |
|
|||
Contract assets |
|
Accounts receivable, net |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Contract assets |
|
Inventories |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Contract liabilities 1 |
|
Deferred revenue |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
1 |
|
For the three and six months ended February 28, 2021, the Company recognized $
Performance obligations
As of February 28, 2021, the Company has entered into contracts with customers for which revenue has not yet been recognized.
(in millions) |
|
February 28, 2021 |
|
|
Revenue type: |
|
|
|
|
Manufacturing – Railcar sales |
|
$ |
|
|
Manufacturing – Marine |
|
$ |
|
|
Services |
|
$ |
|
|
Other |
|
$ |
|
|
|
|
|
|
|
Manufacturing – Railcars intended for syndication 1 |
|
$ |
|
|
1 |
|
11
Based on current production and delivery schedules and existing contracts, approximately $
Revenue amounts reflected in Railcars intended for syndication may be syndicated to third parties or held in the Company’s fleet depending on a variety of factors.
Marine revenue is expected to be recognized through 2022 as vessel construction is completed.
Services includes management and maintenance services of which approximately
Note 3 – Inventories
Inventories are valued at the lower of cost or net realizable value using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit. The following table summarizes the Company’s inventory balance:
(In thousands) |
|
February 28, 2021 |
|
|
August 31, 2020 |
|
||
Manufacturing supplies and raw materials |
|
$ |
|
|
|
$ |
|
|
Work-in-process |
|
|
|
|
|
|
|
|
Finished goods |
|
|
|
|
|
|
|
|
Excess and obsolete adjustment |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
|
$ |
|
|
Note 4 – Intangibles and Other Assets, net
Intangible assets that are determined to have finite lives are amortized over their useful lives. Intangible assets with indefinite useful lives are not amortized and are periodically evaluated for impairment.
The following table summarizes the Company’s identifiable intangible and other assets balance:
(In thousands) |
|
February 28, 2021 |
|
|
August 31, 2020 |
|
||
Intangible assets subject to amortization: |
|
|
|
|
|
|
|
|
Customer relationships |
|
$ |
|
|
|
$ |
|
|
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
Other intangibles |
|
|
|
|
|
|
|
|
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
Intangible assets not subject to amortization |
|
|
|
|
|
|
|
|
Prepaid and other assets |
|
|
|
|
|
|
|
|
Operating lease ROU assets |
|
|
|
|
|
|
|
|
Nonqualified savings plan investments |
|
|
|
|
|
|
|
|
Revolving notes issuance costs, net |
|
|
|
|
|
|
|
|
Assets held for sale |
|
|
|
|
|
|
|
|
Total Intangible and other assets, net |
|
$ |
|
|
|
$ |
|
|
Amortization expense was $
12
Note 5 – Revolving Notes
Senior secured credit facilities, consisting of
As of February 28, 2021, a $
As of February 28, 2021, lines of credit totaling $
As of February 28, 2021, the Company’s Mexican railcar manufacturing operations had
As of February 28, 2021, outstanding commitments under the senior secured credit facilities consisted of $
As of August 31, 2020, outstanding commitments under the senior secured credit facilities consisted of $
Note 6 – Accounts Payable and Accrued Liabilities
(In thousands) |
|
February 28, 2021 |
|
|
August 31, 2020 |
|
||
Trade payables |
|
$ |
|
|
|
$ |
|
|
Other accrued liabilities |
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
|
|
|
|
|
|
Accrued payroll and related liabilities |
|
|
|
|
|
|
|
|
Accrued warranty |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
Note 7 – Warranty Accruals
Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on the history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets, are reviewed periodically and updated based on warranty trends and expirations of warranty periods.
13
Warranty accrual activity:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||
Balance at beginning of period |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Charged to cost of revenue, net |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Currency translation effect |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Balance at end of period |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Note 8 – Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss, net of tax effect as appropriate, consisted of the following:
(In thousands) |
|
Unrealized Gain (Loss) on Derivative Financial Instruments |
|
|
Foreign Currency Translation Adjustment |
|
|
Other |
|
|
Accumulated Other Comprehensive Loss |
|
||||
Balance, August 31, 2020 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive loss before reclassifications |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reclassified from Accumulated other comprehensive loss |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Balance, February 28, 2021 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Operations, with financial statement caption, were as follows:
|
|
Three Months Ended |
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Financial Statement Caption |
||
(Gain) loss on derivative financial instruments: |
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts |
|
$ |
|
|
|
$ |
( |
) |
|
Revenue and Cost of revenue |
Interest rate swap contracts |
|
|
|
|
|
|
|
|
|
Interest and foreign exchange |
Total before tax |
|
|
|
|
|
|
|
|
|
|
Income tax |
|
|
( |
) |
|
|
( |
) |
|
|
Net of tax |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
Six Months Ended |
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Financial Statement Caption |
||
(Gain) loss on derivative financial instruments: |
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts |
|
$ |
|
|
|
$ |
|
|
|
Revenue and Cost of revenue |
Interest rate swap contracts |
|
|
|
|
|
|
|
|
|
Interest and foreign exchange |
Total before tax |
|
|
|
|
|
|
|
|
|
|
Income tax |
|
|
( |
) |
|
|
( |
) |
|
|
Net of tax |
|
$ |
|
|
|
$ |
|
|
|
|
14
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 |
|
|
Six Months Ended |
|
||||||||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||
Weighted average basic common shares outstanding (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of 2.875% convertible notes (2)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of 2.25% convertible notes (2)(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of restricted stock units (2)(5) |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
Weighted average diluted common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
Diluted EPS is calculated using the treasury stock method associated with shares underlying the
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
||||||||||
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
||||
Net earnings (loss) attributable to Greenbrier |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
Weighted average diluted common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
15
Note 10 – Stock Based Compensation
The value of stock based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or in some instances the recipient’s eligible retirement date. Stock based compensation expense consists of restricted stock unit, restricted stock and phantom stock unit awards.
Stock based compensation expense was $
Note 11 – Derivative Instruments
Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk. Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in accumulated other comprehensive income or loss.
At February 28, 2021 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; and the purchase of Mexican Pesos and the sale of U.S. Dollars aggregated to $
At February 28, 2021, an interest rate swap agreement maturing in
Fair Values of Derivative Instruments
|
|
Asset Derivatives |
|
|
Liability Derivatives |
|
||||||||||||||
|
|
|
|
February 28, 2021 |
|
|
August 31, 2020 |
|
|
|
|
February 28, 2021 |
|
|
August 31, 2020 |
|
||||
(In thousands) |
|
Balance sheet location |
|
Fair Value |
|
|
Fair Value |
|
|
Balance sheet location |
|
Fair Value |
|
|
Fair Value |
|
||||
Derivatives designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign forward exchange contracts |
|
Accounts receivable, net |
|
$ |
|
|
|
$ |
|
|
|
Accounts payable and accrued liabilities |
|
$ |
|
|
|
$ |
|
|
Interest rate swap contracts |
|
Accounts receivable, net |
|
|
— |
|
|
|
— |
|
|
Accounts payable and accrued liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign forward exchange contracts |
|
Accounts receivable, net |
|
$ |
— |
|
|
$ |
|
|
|
Accounts payable and accrued liabilities |
|
$ |
|
|
|
$ |
— |
|
16
The Effect of Derivative Instruments on the Statements of Operations
Three Months Ended February 28, 2021 and February 29, 2020
Derivatives in cash flow hedging relationships |
|
Location of gain (loss) recognized in income on derivatives |
|
Gain (loss) recognized in income on derivatives three months ended |
|
|||||
|
|
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Foreign forward exchange contract |
|
Interest and foreign exchange |
|
$ |
( |
) |
|
$ |
( |
) |
Derivatives in cash flow hedging relationships |
Gain (loss) recognized in OCI on derivatives three months ended, |
|
Location of gain (loss) reclassified from accumulated OCI into income |
Gain (loss) reclassified from accumulated OCI into income three months ended |
|
Location of gain (loss) on derivative (amount excluded from effectiveness testing) |
Gain (loss) recognized on derivative (amount excluded from effectiveness testing) three months ended |
|
|||||||||||||||
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||||
Foreign forward exchange contracts |
$ |
( |
) |
|
$ |
|
|
Revenue |
$ |
( |
) |
|
$ |
|
|
Revenue |
$ |
|
|
|
$ |
|
|
Foreign forward exchange contracts |
|
( |
) |
|
|
|
|
Cost of revenue |
|
( |
) |
|
|
|
|
Cost of revenue |
|
|
|
|
|
|
|
Interest rate swap contracts |
|
|
|
|
|
( |
) |
Interest and foreign exchange |
|
( |
) |
|
|
( |
) |
Interest and foreign exchange |
|
— |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
The following table presents the amounts in the Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded and the effects of the cash flow hedge activity on these line items for the three months ended February 28, 2021 and February 29, 2020:
|
|
For The Three Months Ended |
|
|||||||||||||
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||||||||
|
|
Total |
|
|
Amount of gain (loss) on cash flow hedge activity |
|
|
Total |
|
|
Amount of gain (loss) on cash flow hedge activity |
|
||||
Revenue |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Cost of revenue |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Interest and foreign exchange |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
17
Six Months Ended February 28, 2021 and February 29, 2020
Derivatives in cash flow hedging relationships |
|
Location of gain (loss) recognized in income on derivatives |
|
Gain (loss) recognized in income on derivatives six months ended |
|
|||||
|
|
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Foreign forward exchange contract |
|
Interest and foreign exchange |
|
$ |
( |
) |
|
$ |
( |
) |
Derivatives in cash flow hedging relationships |
|
Gain (loss) recognized in OCI on derivatives six months ended |
|
|
Location of gain (loss) reclassified from accumulated OCI into income |
|
Gain (loss) reclassified from accumulated OCI into income six months ended |
|
|
Location of gain (loss) on derivative amount excluded from effectiveness testing) |
|
Gain (loss) recognized on derivative (amount excluded from effectiveness testing) six months ended |
|
|||||||||||||||
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||||
Foreign forward exchange contracts |
|
$ |
( |
) |
|
$ |
|
|
|
Revenue |
|
$ |
( |
) |
|
$ |
( |
) |
|
Revenue |
|
$ |
|
|
|
$ |
|
|
Foreign forward exchange contracts |
|
|
( |
) |
|
|
( |
) |
|
Cost of revenue |
|
|
( |
) |
|
|
( |
) |
|
Cost of revenue |
|
|
|
|
|
|
|
|
Interest rate swap contracts |
|
|
|
|
|
|
( |
) |
|
Interest and foreign exchange |
|
|
( |
) |
|
|
( |
) |
|
Interest and foreign exchange |
|
|
— |
|
|
|
( |
) |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
For the Six Months Ended |
|
|||||||||||||
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||||||||
|
|
Total |
|
|
Amount of gain (loss) on cash flow hedge activity |
|
|
Total |
|
|
Amount of gain (loss) on cash flow hedge activity |
|
||||
Revenue |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
Cost of revenue |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Interest and foreign exchange |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Note 12 – Segment Information
The Company operates in
The accounting policies of the segments are described in the summary of significant accounting policies in the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended August 31, 2020. Performance is evaluated based on Earnings (loss) from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. The Company does not allocate Interest and foreign exchange or Income tax benefit (expense) for either external or internal reporting purposes. Intersegment sales and transfers are valued as if the sales or transfers were to third parties. Related revenue and margin are eliminated in consolidation and therefore are not included in consolidated results in the Company’s Consolidated Financial Statements.
The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes.
18
For the three months ended February 28, 2021:
|
|
Revenue |
|
|
Earnings (loss) from operations |
|
||||||||||||||||||
(In thousands) |
|
External |
|
|
Intersegment |
|
|
Total |
|
|
External |
|
|
Intersegment |
|
|
Total |
|
||||||
Manufacturing |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
Wheels, Repair & Parts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Leasing & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Corporate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
For the six months ended February 28, 2021:
|
|
Revenue |
|
|
Earnings (loss) from operations |
|
||||||||||||||||||
(In thousands) |
|
External |
|
|
Intersegment |
|
|
Total |
|
|
External |
|
|
Intersegment |
|
|
Total |
|
||||||
Manufacturing |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
Wheels, Repair & Parts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Leasing & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Corporate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
For the three months ended February 29, 2020:
|
|
Revenue |
|
|
Earnings (loss) from operations |
|
||||||||||||||||||
(In thousands) |
|
External |
|
|
Intersegment |
|
|
Total |
|
|
External |
|
|
Intersegment |
|
|
Total |
|
||||||
Manufacturing |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Wheels, Repair & Parts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Leasing & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Corporate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
For the six months ended February 29, 2020:
|
|
Revenue |
|
|
Earnings (loss) from operations |
|
||||||||||||||||||
(In thousands) |
|
External |
|
|
Intersegment |
|
|
Total |
|
|
External |
|
|
Intersegment |
|
|
Total |
|
||||||
Manufacturing |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Wheels, Repair & Parts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Leasing & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Corporate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
|
Total assets |
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
August 31, 2020 |
|
||
Manufacturing |
|
$ |
|
|
|
$ |
|
|
Wheels, Repair & Parts |
|
|
|
|
|
|
|
|
Leasing & Services |
|
|
|
|
|
|
|
|
Unallocated, including cash |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
19
Reconciliation of Earnings (loss) from operations to Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||
Earnings (loss) from operations |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Interest and foreign exchange |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Note 13 – Leases
Lessor
Equipment on operating leases is reported net of accumulated depreciation of $
Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases at February 28, 2021, will mature as follows:
(in thousands) |
|
|
|
|
Remaining six months of 2021 |
|
$ |
|
|
2022 |
|
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
$ |
|
|
Lessee
The Company leases railcars, real estate, and certain equipment under operating and, to a lesser extent, finance lease arrangements. As of and for the three and six months ended February 28, 2021 and February 29, 2020, finance leases were not a material component of the Company's lease portfolio. The Company’s real estate and equipment leases have remaining lease terms ranging from less than
20
The components of operating lease costs were as follows:
(in thousands) |
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||||
Operating lease expense |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Short-term lease expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Aggregate minimum future amounts payable under operating leases having initial or remaining non-cancelable terms at February 28, 2021 will mature as follows:
(in thousands) |
|
|
|
|
Remaining six months of 2021 |
|
$ |
|
|
2022 |
|
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
$ |
|
|
Less: Imputed interest |
|
|
( |
) |
Total lease obligations |
|
$ |
|
|
The table below presents additional information related to the Company’s leases:
Weighted average remaining lease term: |
|
|
|
|
Operating leases |
|
|
|
|
|
|
|
|
|
Weighted average discount rate: |
|
|
|
|
Operating leases |
|
|
|
% |
Supplemental cash flow information related to leases were as follows:
(in thousands) |
|
Six months ended February 28, 2021 |
|
|
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
Operating cash flows from operating leases |
|
$ |
|
|
ROU assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
21
Note 14 – Commitments and Contingencies
Portland Harbor Superfund Site
The Company’s Portland, Oregon manufacturing facility (the Portland Property) is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting the Company’s manufacturing facility, as a federal "National Priority List" or "Superfund" site due to sediment contamination (the Portland Harbor Site). The Company and more than 140 other parties have received a "General Notice" of potential liability from the EPA relating to the Portland Harbor Site. The letter advised the Company that it may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including the Company (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities did not sign such consent, but nevertheless contributed financially to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over $
Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, entered into a non-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor Site. Approximately 110 additional parties signed tolling agreements related to such allocations. On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 14, 2022.
The EPA's January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take
The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA's selected cleanup remedy will be determined at an unspecified later date. Based on the investigation to date, the Company believes that it did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to its property precedes the Company’s ownership of the Portland Property. Because these environmental investigations are still underway, sufficient information is currently not available to determine the Company’s liability, if any, for the cost of any
22
required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, the Company may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources. In addition, the Company may be required to perform periodic maintenance dredging in order to continue to launch vessels from its launch ways in Portland, Oregon, on the Willamette River, and the river's classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect the Company’s business and Consolidated Financial Statements, or the value of the Portland Property.
On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including the Company as well as the U.S. and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et al., U.S. Court for the District of Oregon Case No. 3i17-CV-00164-SB. The complaint does not specify the amount of damages the plaintiff will seek. The case has been stayed until January 14, 2022.
Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations
The Company entered into a Voluntary Cleanup Agreement with the Oregon Department of Environmental Quality (DEQ) in which the Company agreed to conduct an investigation of whether, and to what extent, past or present operations at the Portland Property may have released hazardous substances into the environment. The Company has also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and the Company is discussing with the DEQ potential remedial actions which may be required. The Company’s aggregate expenditure has not been material, however it could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties.
Other Litigation, Commitments and Contingencies
In connection with the acquisition of the manufacturing business of American Railcar Industries, Inc. (ARI), the Company agreed to assume potential legacy liabilities (known and unknown) related to railcars manufactured by ARI. Among these potential liabilities are certain retrofit and repair obligations arising from regulatory actions by the Federal Railroad Administration and the Association of American Railroads. In some cases, the seller shares with the Company the costs of these retrofit and repair obligations. The Company currently is not able to determine if any of these liabilities will have a material adverse impact on the Company’s Consolidated Financial Statements.
From time to time, Greenbrier is involved as a defendant in litigation in the ordinary course of business, the outcomes of which cannot be predicted with certainty. While the ultimate outcome of such legal proceedings cannot be determined at this time, the Company believes that the resolution of pending litigation will not have a material adverse effect on the Company's Consolidated Financial Statements.
As of February 28, 2021, the Company had outstanding letters of credit aggregating to $
23
Note 15 – Fair Value Measures
Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value, for this disclosure, is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical instruments;
Level 2 - inputs, other than the quoted market prices in active markets for similar instruments, which are observable, either directly or indirectly; and
Level 3 - unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions.
Assets and liabilities measured at fair value on a recurring basis as of February 28, 2021 were:
(In thousands) |
|
Total |
|
|
Level 1 |
|
|
Level 2 (1) |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
— |
|
Nonqualified savings plan investments |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
Cash equivalents |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
— |
|
|
(1) |
|
Assets and liabilities measured at fair value on a recurring basis as of August 31, 2020 were:
(In thousands) |
|
Total |
|
|
Level 1 |
|
|
Level 2 (1) |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
— |
|
Nonqualified savings plan investments |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
Cash equivalents |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
|
$ |
— |
|
Note 16 – Related Party Transactions
The Company has a
The Company has a
24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Summary
We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars, tank cars, conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment performs wheel and axle servicing; railcar repair, refurbishment and maintenance; as well as production of a variety of parts for the rail industry in North America. The Leasing & Services segment owns approximately 8,700 railcars and provides management services for approximately 445,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America as of February 28, 2021. Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil.
The financial results for the six months ended February 28, 2021 are representative of the challenges of the current market conditions. The decrease in operating profits compared to the same period in the prior year is primarily attributable to the cyclical decrease in economic activity in the freight rail equipment market which began prior to the emergence of COVID-19 (Cyclical Downturn). The Cyclical Downturn has intensified due to the COVID-19 Events (as defined below).
We have adhered to disciplined management through this crucial time. Our core strategy since March 2020 has been and continues to be to:
|
1) |
Maintain a strong liquidity base and balance sheet. |
|
2) |
Continue efficient operations throughout the COVID-19 and economic crises by safely operating our factories while generating cash. |
|
3) |
Prepare for economic recovery and forward momentum in our markets expected during the latter half of calendar 2021. We believe we are now in this recovery phase, assuming no further COVID-19 or geopolitical shocks. |
We also continue to take measures to strengthen our financial position through strategic spending reductions which included reducing our selling and administrative expense by $21.8 million during the six months ended February 28, 2021 compared to the prior comparable period.
Our backlog remains strong with railcar deliveries into 2024 and marine deliveries into 2022. Our railcar backlog increased by 1,000 units since November 30, 2020 resulting in total manufacturing backlog of approximately 24,900 units with an estimated value of $2.51 billion as of February 28, 2021. Approximately 9% of backlog units and 6% of estimated backlog value as of February 28, 2021 was associated with our Brazilian manufacturing operations which is accounted for under the equity method. Backlog units for lease may be syndicated to third parties or held in our own fleet depending on a variety of factors. Multi-year supply agreements are a part of rail industry practice. A portion of the orders included in backlog reflects an assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future, which may impact backlog. Marine backlog as of February 28, 2021 was $53 million.
Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms. Customers may attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time.
25
COVID-19 and the Downturn in Global Economic Activity
We continue to actively monitor and manage the impacts on our business of the COVID-19 coronavirus pandemic, the significant decline in global economic activity and governmental reactions to these historic events (COVID-19 Events).
Our manufacturing and service facilities continue regular operations. We function as an essential infrastructure business under guidance issued by the U.S. Department of Homeland Security. Similar guidelines and authorities exist in other nations where we operate. Since the emergence of COVID-19, our facilities in the U.S. have been permitted to continue to operate subject to enhanced safety protocols, both voluntary and government mandated, that aim to protect the health of our workforce and the residents of the communities in which our facilities are located. The situation is similar in our facilities in Mexico, Europe, Brazil and Turkey which also have been permitted by applicable governmental authorities to operate subject to enhanced health and safety protocols.
As described in Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, COVID-19 Events may have a material negative impact on our business, liquidity, results of operations, and stock price. Beyond these general observations, we are unable to predict when, how, or with what magnitude COVID-19 Events, in combination with the Cyclical Downturn, will negatively impact our business.
Greenbrier’s Revised Leasing Strategy
In February 2021 we announced a refined leasing strategy to grow our owned portfolio of leased railcars built by Greenbrier by approximately $200 million per year. This will create an incremental annuity stream of tax-advantaged cash flows while reducing our exposure to the new railcar order and delivery cycle. We will execute this strategy through GBX Leasing, a newly formed joint venture in which we will own over 90%.
GBX Leasing commenced operations in March 2021 upon the closing of a $300 million non-recourse warehouse facility, and the conclusion of the initial sale and contribution of railcars and associated leases by Greenbrier valued at approximately $130 million.
GBX Leasing will be financed with non-recourse debt and is expected to be levered approximately 3:1 debt to equity. We intend that GBX Leasing will aggregate leased railcars to obtain permanent debt financing issued in connection with asset-backed securities. We will consolidate GBX Leasing for financial reporting purposes within the Leasing & Services segment. Greenbrier Management Services will provide management services to the GBX Leasing fleet.
26
Three Months Ended February 28, 2021 Compared to the Three Months Ended February 29, 2020
Overview
Revenue, cost of revenue, margin and Earnings (loss) from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
|
|
Three Months Ended |
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Revenue: |
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
202,094 |
|
|
$ |
489,943 |
|
Wheels, Repair & Parts |
|
|
71,623 |
|
|
|
91,225 |
|
Leasing & Services |
|
|
21,905 |
|
|
|
42,680 |
|
|
|
|
295,622 |
|
|
|
623,848 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Manufacturing |
|
|
201,771 |
|
|
|
422,309 |
|
Wheels, Repair & Parts |
|
|
66,667 |
|
|
|
84,373 |
|
Leasing & Services |
|
|
9,513 |
|
|
|
30,830 |
|
|
|
|
277,951 |
|
|
|
537,512 |
|
Margin: |
|
|
|
|
|
|
|
|
Manufacturing |
|
|
323 |
|
|
|
67,634 |
|
Wheels, Repair & Parts |
|
|
4,956 |
|
|
|
6,852 |
|
Leasing & Services |
|
|
12,392 |
|
|
|
11,850 |
|
|
|
|
17,671 |
|
|
|
86,336 |
|
Selling and administrative |
|
|
43,425 |
|
|
|
54,597 |
|
Net gain on disposition of equipment |
|
|
(27 |
) |
|
|
(6,697 |
) |
Earnings (loss) from operations |
|
|
(25,727 |
) |
|
|
38,436 |
|
Interest and foreign exchange |
|
|
9,568 |
|
|
|
12,609 |
|
Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates |
|
|
(35,295 |
) |
|
|
25,827 |
|
Income tax benefit (expense) |
|
|
21,752 |
|
|
|
(7,463 |
) |
Earnings (loss) before earnings (loss) from unconsolidated affiliates |
|
|
(13,543 |
) |
|
|
18,364 |
|
Earnings (loss) from unconsolidated affiliates |
|
|
(378 |
) |
|
|
1,651 |
|
Net earnings (loss) |
|
|
(13,921 |
) |
|
|
20,015 |
|
Net (earnings) loss attributable to noncontrolling interest |
|
|
4,856 |
|
|
|
(6,386 |
) |
Net earnings (loss) attributable to Greenbrier |
|
$ |
(9,065 |
) |
|
$ |
13,629 |
|
Diluted earnings (loss) per common share |
|
$ |
(0.28 |
) |
|
$ |
0.41 |
|
Performance for our segments is evaluated based on operating profit or loss. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax benefit (expense) for either external or internal reporting purposes.
|
|
Three Months Ended |
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Operating profit (loss): |
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
(17,216 |
) |
|
$ |
46,105 |
|
Wheels, Repair & Parts |
|
|
2,433 |
|
|
|
3,320 |
|
Leasing & Services |
|
|
6,420 |
|
|
|
12,793 |
|
Corporate |
|
|
(17,364 |
) |
|
|
(23,782 |
) |
|
|
$ |
(25,727 |
) |
|
$ |
38,436 |
|
27
Consolidated Results
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
295,622 |
|
|
$ |
623,848 |
|
|
$ |
(328,226 |
) |
|
|
(52.6 |
%) |
Cost of revenue |
|
$ |
277,951 |
|
|
$ |
537,512 |
|
|
$ |
(259,561 |
) |
|
|
(48.3 |
%) |
Margin (%) |
|
|
6.0 |
% |
|
|
13.8 |
% |
|
|
(7.8 |
%) |
|
* |
|
|
Net earnings (loss) attributable to Greenbrier |
|
$ |
(9,065 |
) |
|
$ |
13,629 |
|
|
$ |
(22,694 |
) |
|
|
(166.5 |
%) |
* |
Not meaningful |
Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various average selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.
The 52.6% decrease in revenue for the three months ended February 28, 2021 as compared to the three months ended February 29, 2020 was primarily due to a 58.8% decrease in Manufacturing revenue. The decrease in Manufacturing revenue was primarily attributed to a 54.1% decrease in railcar deliveries.
The 48.3% decrease in cost of revenue for the three months ended February 28, 2021 as compared to the three months ended February 29, 2020 was primarily due to a 52.2% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to a 54.1% decrease in railcar deliveries. The decrease in cost of revenue was also due to a 69.1% decrease in Leasing & Services cost of revenue primarily due to a decrease in the volume of railcars sold that we purchased from third parties.
Margin as a percentage of revenue was 6.0% and 13.8% for the three months ended February 28, 2021 and February 29, 2020, respectively. The overall margin as a percentage of revenue was negatively impacted by a decrease in Manufacturing margin to 0.2% from 13.8% primarily attributed to operating at lower volumes and increased costs associated with operating our manufacturing facilities in the COVID-19 pandemic during the three months ended February 28, 2021.
Net earnings (loss) attributable to Greenbrier is impacted by our operating activities and noncontrolling interest associated with our 50% joint ventures at certain of our Mexican railcar manufacturing facilities and our 75% interest in Greenbrier-Astra Rail, both of which we consolidate for financial reporting purposes. The $22.7 million decrease in net earnings attributable to Greenbrier for the three months ended February 28, 2021 as compared to the three months ended February 29, 2020 was primarily attributable to a decrease in the after-tax margin due to a reduction in railcar deliveries. This was partially offset by a decrease in Selling and administrative expense, a large tax benefit as a result of the net loss and relief allowable under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and a net loss attributable to noncontrolling interest in the current quarter, which is added to Net earnings (loss). Net earnings (loss) attributable to noncontrolling interest represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
28
Manufacturing Segment
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands, except railcar deliveries) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
202,094 |
|
|
$ |
489,943 |
|
|
$ |
(287,849 |
) |
|
|
(58.8 |
%) |
Cost of revenue |
|
$ |
201,771 |
|
|
$ |
422,309 |
|
|
$ |
(220,538 |
) |
|
|
(52.2 |
%) |
Margin (%) |
|
|
0.2 |
% |
|
|
13.8 |
% |
|
|
(13.6 |
%) |
|
* |
|
|
Operating profit (loss) ($) |
|
$ |
(17,216 |
) |
|
$ |
46,105 |
|
|
$ |
(63,321 |
) |
|
|
(137.3 |
%) |
Operating profit (loss) (%) |
|
|
(8.5 |
%) |
|
|
9.4 |
% |
|
|
(17.9 |
%) |
|
* |
|
|
Deliveries |
|
|
1,700 |
|
|
|
3,700 |
|
|
|
(2,000 |
) |
|
|
(54.1 |
%) |
* |
Not meaningful |
Manufacturing revenue decreased $287.8 million or 58.8% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease in revenue was primarily attributed to a 54.1% decrease in railcar deliveries. In addition, the prior year included a $12.9 million customer order contract modification fee received during the three months ended February 29, 2020.
Manufacturing cost of revenue decreased $220.5 million or 52.2% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease in cost of revenue was primarily attributed to a 54.1% decrease in the volume of railcar deliveries.
Manufacturing margin as a percentage of revenue decreased 13.6% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease in margin percentage was primarily attributed to operating at lower volumes and increased costs associated with operating our manufacturing facilities in the COVID-19 pandemic during the three months ended February 28, 2021.
Manufacturing operating profit decreased $63.3 million or 137.3% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease in operating profit was primarily attributed to a decrease in railcar deliveries and increased costs associated with operating our manufacturing facilities during the COVID-19 pandemic during the three months ended February 28, 2021. These were partially offset by a decrease in selling and administrative expense as part of our strategic cost control initiatives during the three months ended February 28, 2021.
29
Wheels, Repair & Parts Segment
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
71,623 |
|
|
$ |
91,225 |
|
|
$ |
(19,602 |
) |
|
|
(21.5 |
%) |
Cost of revenue |
|
$ |
66,667 |
|
|
$ |
84,373 |
|
|
$ |
(17,706 |
) |
|
|
(21.0 |
%) |
Margin (%) |
|
|
6.9 |
% |
|
|
7.5 |
% |
|
|
(0.6 |
%) |
|
* |
|
|
Operating profit ($) |
|
$ |
2,433 |
|
|
$ |
3,320 |
|
|
$ |
(887 |
) |
|
|
(26.7 |
%) |
Operating profit (%) |
|
|
3.4 |
% |
|
|
3.6 |
% |
|
|
(0.2 |
%) |
|
* |
|
* |
Not meaningful |
Wheels, Repair & Parts revenue decreased $19.6 million or 21.5% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease was primarily due to lower wheelset and component volumes due to lower demand. This was partially offset by higher revenues associated with an increase in scrap metal pricing as we scrap wheels and other components and an increase in parts volumes.
Wheels, Repair & Parts cost of revenue decreased $17.7 million or 21.0% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease was primarily due to lower costs associated with a reduction in wheelset and component volumes.
Wheels, Repair & Parts margin as a percentage of revenue decreased 0.6% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease in margin percentage was primarily attributed to operating at lower volumes and increased costs associated with operating our facilities during the COVID-19 pandemic during the three months ended February 28, 2021. This was partially offset by an increase in scrap metal pricing.
Wheels, Repair & Parts operating profit decreased $0.9 million or 26.7% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease in operating profit was primarily attributed to a reduction in volumes and increased costs associated with operating our facilities during the COVID-19 pandemic. These were partially offset by a decrease in selling and administrative expense as part of our strategic cost control initiatives during the three months ended February 28, 2021.
30
Leasing & Services Segment
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
21,905 |
|
|
$ |
42,680 |
|
|
$ |
(20,775 |
) |
|
|
(48.7 |
%) |
Cost of revenue |
|
$ |
9,513 |
|
|
$ |
30,830 |
|
|
$ |
(21,317 |
) |
|
|
(69.1 |
%) |
Margin (%) |
|
|
56.6 |
% |
|
|
27.8 |
% |
|
|
28.8 |
% |
|
* |
|
|
Operating profit ($) |
|
$ |
6,420 |
|
|
$ |
12,793 |
|
|
$ |
(6,373 |
) |
|
|
(49.8 |
%) |
Operating profit (%) |
|
|
29.3 |
% |
|
|
30.0 |
% |
|
|
(0.7 |
%) |
|
* |
|
* |
Not meaningful |
The Leasing & Services segment generates revenue from leasing railcars from its lease fleet, providing various management services, interim rent on leased railcars for syndication, and the sale of railcars purchased from third parties with the intent to resell. The gross proceeds from the sale of these railcars are recorded in revenue and the costs of purchasing these railcars are recorded in cost of revenue.
Leasing & Services revenue decreased $20.8 million or 48.7% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease was primarily attributed to a decrease in the sale of railcars which we had purchased from third parties with the intent to resell.
Leasing & Services cost of revenue decreased $21.3 million or 69.1% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease was primarily due to a decrease in the volume of railcars sold that we purchased from third parties and lower transportation costs.
Leasing & Services margin as a percentage of revenue increased 28.8% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. Margin as a percentage of revenue for the three months ended February 29, 2020 was negatively impacted by higher sales of railcars that we purchased from third parties which have lower margin percentages.
Leasing & Services operating profit decreased $6.4 million or 49.8% for the three months ended February 28, 2021 compared to the three months ended February 29, 2020. The decrease was primarily attributed to a $6.3 million reduction in net gain on disposition of equipment.
31
Selling and Administrative Expense
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Selling and administrative expense |
|
$ |
43,425 |
|
|
$ |
54,597 |
|
|
$ |
(11,172 |
) |
|
|
(20.5 |
%) |
Selling and administrative expense was $43.4 million or 14.7% of revenue for the three months ended February 28, 2021 compared to $54.6 million or 8.8% of revenue for the prior comparable period. The $11.2 million decrease was primarily attributed to a decline in employee related costs resulting from headcount reductions and a decrease in other controllable spending categories as part of our strategic cost control and liquidity initiatives.
Net Gain on Disposition of Equipment
Net gain on disposition of equipment was $27 thousand for the three months ended February 28, 2021 compared to $6.7 million for the prior comparable period.
Net gain on disposition of equipment primarily includes the sale of assets from our lease fleet (Equipment on operating leases, net) that are periodically sold in the normal course of business in order to accommodate customer demand and to manage risk and liquidity; and disposition of property, plant and equipment.
Other Costs
Interest and foreign exchange expense was composed of the following:
|
|
Three Months Ended |
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|||
Interest and foreign exchange: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other expense |
|
$ |
9,893 |
|
|
$ |
10,329 |
|
|
$ |
(436 |
) |
Foreign exchange (gain) loss |
|
|
(325 |
) |
|
|
2,280 |
|
|
|
(2,605 |
) |
|
|
$ |
9,568 |
|
|
$ |
12,609 |
|
|
$ |
(3,041 |
) |
The $3.0 million decrease in interest and foreign exchange expense from the prior comparable period was primarily attributed to the change in the Mexican Peso’s foreign exchange rate relative to the U.S. Dollar in the prior year.
Income Tax
For the three months ended February 28, 2021, we had an income tax benefit of $21.8 million on a pre-tax loss of $35.3 million. The tax benefit for the three months ended February 28, 2021 primarily related to accelerated depreciation and the impact of the CARES Act which allows us to carryback to years when tax rates were higher, resulting in a larger tax benefit. The tax benefit is derived from the tax rate differential between the 2016 rate of 35% and our current US Federal tax rate of 21%. The effective tax rate for the three months ended February 29, 2020 was 28.9%.
The effective tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax benefit (expense).
32
Earnings (Loss) From Unconsolidated Affiliates
Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the after-tax results from these unconsolidated affiliates.
Loss from unconsolidated affiliates was $0.4 million for the three months ended February 28, 2021 compared to earnings from unconsolidated affiliates of $1.7 million for the three months ended February 29, 2020. The decrease in earnings from unconsolidated affiliates was primarily related to a loss at our Brazil operations and a decrease in earnings from our investment in Axis, a joint venture that manufactures and sells axles to its joint venture partners.
Noncontrolling Interest
Net loss attributable to noncontrolling interest was $4.9 million for the three months ended February 28, 2021 compared to Net earnings attributable to noncontrolling interest $6.4 million in the prior comparable period, which primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
33
Six Months Ended February 28, 2021 Compared to the Six Months Ended February 29, 2020
Overview
Revenue, cost of revenue, margin and Earnings (loss) from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
|
|
Six Months Ended |
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Revenue: |
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
510,816 |
|
|
$ |
1,147,310 |
|
Wheels, Repair & Parts |
|
|
137,179 |
|
|
|
177,833 |
|
Leasing & Services |
|
|
50,616 |
|
|
|
68,064 |
|
|
|
|
698,611 |
|
|
|
1,393,207 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Manufacturing |
|
|
482,661 |
|
|
|
1,004,221 |
|
Wheels, Repair & Parts |
|
|
129,651 |
|
|
|
166,265 |
|
Leasing & Services |
|
|
27,957 |
|
|
|
44,196 |
|
|
|
|
640,269 |
|
|
|
1,214,682 |
|
Margin: |
|
|
|
|
|
|
|
|
Manufacturing |
|
|
28,155 |
|
|
|
143,089 |
|
Wheels, Repair & Parts |
|
|
7,528 |
|
|
|
11,568 |
|
Leasing & Services |
|
|
22,659 |
|
|
|
23,868 |
|
|
|
|
58,342 |
|
|
|
178,525 |
|
Selling and administrative |
|
|
87,132 |
|
|
|
108,961 |
|
Net gain on disposition of equipment |
|
|
(949 |
) |
|
|
(10,656 |
) |
Earnings (loss) from operations |
|
|
(27,841 |
) |
|
|
80,220 |
|
Interest and foreign exchange |
|
|
20,671 |
|
|
|
25,461 |
|
Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates |
|
|
(48,512 |
) |
|
|
54,759 |
|
Income tax benefit (expense) |
|
|
29,084 |
|
|
|
(13,457 |
) |
Earnings (loss) before earnings (loss) from unconsolidated affiliates |
|
|
(19,428 |
) |
|
|
41,302 |
|
Earnings (loss) from unconsolidated affiliates |
|
|
(1,122 |
) |
|
|
2,724 |
|
Net earnings (loss) |
|
|
(20,550 |
) |
|
|
44,026 |
|
Net (earnings) loss attributable to noncontrolling interest |
|
|
1,513 |
|
|
|
(22,728 |
) |
Net earnings (loss) attributable to Greenbrier |
|
$ |
(19,037 |
) |
|
$ |
21,298 |
|
Diluted earnings (loss) per common share |
|
$ |
(0.58 |
) |
|
$ |
0.64 |
|
Performance for our segments is evaluated based on operating profit or loss. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax benefit (expense) for either external or internal reporting purposes.
|
|
Six Months Ended |
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Operating profit (loss): |
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
(7,530 |
) |
|
$ |
99,248 |
|
Wheels, Repair & Parts |
|
|
2,233 |
|
|
|
4,434 |
|
Leasing & Services |
|
|
12,310 |
|
|
|
22,570 |
|
Corporate |
|
|
(34,854 |
) |
|
|
(46,032 |
) |
|
|
$ |
(27,841 |
) |
|
$ |
80,220 |
|
34
Consolidated Results
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
698,611 |
|
|
$ |
1,393,207 |
|
|
$ |
(694,596 |
) |
|
|
(49.9 |
%) |
Cost of revenue |
|
$ |
640,269 |
|
|
$ |
1,214,682 |
|
|
$ |
(574,413 |
) |
|
|
(47.3 |
%) |
Margin (%) |
|
|
8.4 |
% |
|
|
12.8 |
% |
|
|
(4.4 |
%) |
|
* |
|
|
Net earnings (loss) attributable to Greenbrier |
|
$ |
(19,037 |
) |
|
$ |
21,298 |
|
|
$ |
(40,335 |
) |
|
|
(189.4 |
%) |
* |
Not meaningful |
Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various average selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.
The 49.9% decrease in revenue for the six months ended February 28, 2021 as compared to the six months ended February 29, 2020 was primarily due to a 55.5% decrease in Manufacturing revenue. The decrease in Manufacturing revenue was primarily attributed to a 54.2% decrease in railcar deliveries. The decrease in revenue was also due to a 22.9% decrease in Wheels, Repair & Parts revenue primarily due to lower wheelset, component and parts volumes due to lower demand.
The 47.3% decrease in cost of revenue for the six months ended February 28, 2021 as compared to the six months ended February 29, 2020 was primarily due to a 51.9% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to a 54.2% decrease in railcar deliveries. The decrease in cost of revenue was also due to a 22.0% decrease in Wheels, Repair & Parts cost of revenue primarily due to lower costs associated with a reduction in wheelset, component and parts volumes.
Margin as a percentage of revenue was 8.4% and 12.8% for the six months ended February 28, 2021 and February 29, 2020, respectively. The overall margin as a percentage of revenue was negatively impacted by a decrease in Manufacturing margin to 5.5% from 12.5% primarily attributed to operating at lower volumes and increased costs associated with operating our manufacturing facilities in the COVID-19 pandemic during the six months ended February 28, 2021.
Net earnings (loss) attributable to Greenbrier is impacted by our operating activities and noncontrolling interest associated with our 50% joint ventures at certain of our Mexican railcar manufacturing facilities and our 75% interest in Greenbrier-Astra Rail, both of which we consolidate for financial reporting purposes. The $40.3 million decrease in net earnings attributable to Greenbrier for the six months ended February 28, 2021 as compared to the six months ended February 29, 2020 was primarily attributable to a decrease in the after-tax margin due to a reduction in railcar deliveries. This was partially offset by a decrease in Selling and administrative expense, a large tax benefit as a result of the net loss and relief allowable under the CARES act, and a net loss attributable to noncontrolling interest in the current year, which is added to Net earnings (loss). Net earnings (loss) attributable to noncontrolling interest represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
35
Manufacturing Segment
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
510,816 |
|
|
$ |
1,147,310 |
|
|
$ |
(636,494 |
) |
|
|
(55.5 |
%) |
Cost of revenue |
|
$ |
482,661 |
|
|
$ |
1,004,221 |
|
|
$ |
(521,560 |
) |
|
|
(51.9 |
%) |
Margin (%) |
|
|
5.5 |
% |
|
|
12.5 |
% |
|
|
(7.0 |
%) |
|
* |
|
|
Operating profit (loss) ($) |
|
$ |
(7,530 |
) |
|
$ |
99,248 |
|
|
$ |
(106,778 |
) |
|
|
(107.6 |
%) |
Operating profit (loss) (%) |
|
|
(1.5 |
%) |
|
|
8.7 |
% |
|
|
(10.2 |
%) |
|
* |
|
|
Deliveries |
|
|
4,400 |
|
|
|
9,600 |
|
|
|
(5,200 |
) |
|
|
(54.2 |
%) |
* |
Not meaningful |
Manufacturing revenue decreased $636.5 million or 55.5% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease in revenue was primarily attributed to a 54.2% decrease in railcar deliveries.
Manufacturing cost of revenue decreased $521.6 million or 51.9% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease in cost of revenue was primarily attributed to a 54.2% decrease in the volume of railcar deliveries.
Manufacturing margin as a percentage of revenue decreased 7.0% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease in margin percentage was primarily attributed to operating at lower volumes and increased costs associated with operating our manufacturing facilities in the COVID-19 pandemic during the six months ended February 28, 2021.
Manufacturing operating profit decreased $106.8 million or 107.6% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease in operating profit was primarily attributed to a decrease in railcar deliveries and increased costs associated with operating our manufacturing facilities during the COVID-19 pandemic during the six months ended February 28, 2021. These were partially offset by a decrease in selling and administrative expense as part of our strategic cost control initiatives during the six months ended February 28, 2021.
36
Wheels, Repair & Parts Segment
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
137,179 |
|
|
$ |
177,833 |
|
|
$ |
(40,654 |
) |
|
|
(22.9 |
%) |
Cost of revenue |
|
$ |
129,651 |
|
|
$ |
166,265 |
|
|
$ |
(36,614 |
) |
|
|
(22.0 |
%) |
Margin (%) |
|
|
5.5 |
% |
|
|
6.5 |
% |
|
|
(1.0 |
%) |
|
* |
|
|
Operating profit ($) |
|
$ |
2,233 |
|
|
$ |
4,434 |
|
|
$ |
(2,201 |
) |
|
|
(49.6 |
%) |
Operating profit (%) |
|
|
1.6 |
% |
|
|
2.5 |
% |
|
|
(0.9 |
%) |
|
* |
|
* |
Not meaningful |
Wheels, Repair & Parts revenue decreased $40.7 million or 22.9% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease was primarily due to lower wheelset, component and parts volumes due to lower demand. This was partially offset by higher revenues associated with an increase in scrap metal pricing as we scrap wheels and other components.
Wheels, Repair & Parts cost of revenue decreased $36.6 million or 22.0% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease was primarily due to lower costs associated with a reduction in wheelset, component and parts volumes.
Wheels, Repair & Parts margin as a percentage of revenue decreased 1.0% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease in margin percentage was primarily attributed to operating at lower volumes and increased costs associated with operating our facilities during the COVID-19 pandemic during the six months ended February 28, 2021. This was partially offset by an increase in scrap metal pricing.
Wheels, Repair & Parts operating profit decreased $2.2 million or 49.6% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease in operating profit was primarily attributed to a reduction in volumes and increased costs associated with operating our facilities during the COVID-19 pandemic. These were partially offset by a decrease in selling and administrative expense as part of our strategic cost control initiatives during the six months ended February 28, 2021.
37
Leasing & Services Segment
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Revenue |
|
$ |
50,616 |
|
|
$ |
68,064 |
|
|
$ |
(17,448 |
) |
|
|
(25.6 |
%) |
Cost of revenue |
|
$ |
27,957 |
|
|
$ |
44,196 |
|
|
$ |
(16,239 |
) |
|
|
(36.7 |
%) |
Margin (%) |
|
|
44.8 |
% |
|
|
35.1 |
% |
|
|
9.7 |
% |
|
* |
|
|
Operating profit ($) |
|
$ |
12,310 |
|
|
$ |
22,570 |
|
|
$ |
(10,260 |
) |
|
|
(45.5 |
%) |
Operating profit (%) |
|
|
24.3 |
% |
|
|
33.2 |
% |
|
|
(8.9 |
%) |
|
* |
|
* |
Not meaningful |
The Leasing & Services segment generates revenue from leasing railcars from its lease fleet, providing various management services, interim rent on leased railcars for syndication, and the sale of railcars purchased from third parties with the intent to resell. The gross proceeds from the sale of these railcars are recorded in revenue and the costs of purchasing these railcars are recorded in cost of revenue.
Leasing & Services revenue decreased $17.4 million or 25.6% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease was primarily attributed to a decrease in the sale of railcars which we had purchased from third parties with the intent to resell and lower interim rent on leased railcars for syndication during the six months ended February 28, 2021.
Leasing & Services cost of revenue decreased $16.2 million or 36.7% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease was primarily due to a decrease in the volume of railcars sold that we purchased from third parties and lower transportation costs.
Leasing & Services margin as a percentage of revenue increased 9.7% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. Margin as a percentage of revenue for the six months ended February 28, 2020 was negatively impacted by higher sales of railcars that we purchased from third parties which have lower margin percentages. Margin as a percentage of revenue was negatively impacted during the three months ended February 28, 2021 by lower interim rent on leased railcars for syndication.
Leasing & Services operating profit decreased $10.3 million or 45.5% for the six months ended February 28, 2021 compared to the six months ended February 29, 2020. The decrease was primarily attributed to a $9.3 million reduction in net gain on disposition of equipment.
38
Selling and Administrative Expense
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|
% Change |
|
||||
Selling and administrative expense |
|
$ |
87,132 |
|
|
$ |
108,961 |
|
|
$ |
(21,829 |
) |
|
|
(20.0 |
%) |
Selling and administrative expense was $87.1 million or 12.5% of revenue for the six months ended February 28, 2021 compared to $109.0 million or 7.8% of revenue for the prior comparable period. The $21.8 million decrease was primarily attributed to a decline in employee related costs resulting from headcount reductions and a decrease in other controllable spending categories as part of our strategic cost control and liquidity initiatives.
Net Gain on Disposition of Equipment
Net gain on disposition of equipment was $0.9 million for the six months ended February 28, 2021 compared to $10.7 million for the prior comparable period.
Net gain on disposition of equipment primarily includes the sale of assets from our lease fleet (Equipment on operating leases, net) that are periodically sold in the normal course of business in order to accommodate customer demand and to manage risk and liquidity; and disposition of property, plant and equipment.
Other Costs
Interest and foreign exchange expense was composed of the following:
|
|
Six Months Ended |
|
|
|
|
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
Increase (Decrease) |
|
|||
Interest and foreign exchange: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other expense |
|
$ |
20,393 |
|
|
$ |
20,568 |
|
|
$ |
(175 |
) |
Foreign exchange loss |
|
|
278 |
|
|
|
4,893 |
|
|
|
(4,615 |
) |
|
|
$ |
20,671 |
|
|
$ |
25,461 |
|
|
$ |
(4,790 |
) |
The $4.8 million decrease in interest and foreign exchange expense from the prior comparable period was primarily attributed to the change in the Mexican Peso’s foreign exchange rate relative to the U.S. Dollar in the prior year.
Income Tax
For the six months ended February 28, 2021, we had an income tax benefit of $29.1 million on a pre-tax loss of $48.5 million. The tax benefit for the six months ended February 28, 2021 primarily related to accelerated depreciation and the impact of the CARES Act which allows us to carryback to years when tax rates were higher, resulting in a larger tax benefit. The tax benefit is derived from the tax rate differential between the 2016 rate of 35% and our current US Federal tax rate of 21%. The effective tax rate for the six months ended February 29, 2020 was 24.6%.
The effective tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax benefit (expense).
39
Earnings (Loss) From Unconsolidated Affiliates
Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the after-tax results from these unconsolidated affiliates.
Loss from unconsolidated affiliates was $1.1 million for the six months ended February 28, 2021 compared to earnings from unconsolidated affiliates of $2.7 million for the six months ended February 29, 2020. The decrease in earnings from unconsolidated affiliates was primarily related to a loss at our Brazil operations and a decrease in earnings from our investment in Axis, a joint venture that manufactures and sells axles to its joint venture partners.
Noncontrolling Interest
Net loss attributable to noncontrolling interest was $1.5 million for the six months ended February 28, 2021 compared to Net earnings attributable to noncontrolling interest of $22.7 million in the prior comparable period, which primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
40
Liquidity and Capital Resources
|
|
Six Months Ended |
|
|||||
(In thousands) |
|
February 28, 2021 |
|
|
February 29, 2020 |
|
||
Net cash used in operating activities |
|
$ |
(94,774 |
) |
|
$ |
(133,174 |
) |
Net cash provided by (used in) investing activities |
|
|
(34,006 |
) |
|
|
10,766 |
|
Net cash used in financing activities |
|
|
(114,597 |
) |
|
|
(34,787 |
) |
Effect of exchange rate changes |
|
|
3,403 |
|
|
|
(2,824 |
) |
Decrease in cash and cash equivalents and restricted cash |
|
$ |
(239,974 |
) |
|
$ |
(160,019 |
) |
We have been financed through cash generated from operations and borrowings. At February 28, 2021, cash and cash equivalents and restricted cash were $602.1 million, a decrease of $240.0 million from $842.1 million at August 31, 2020.
The change in cash used in operating activities for the six months ended February 28, 2021 compared to the six months ended February 29, 2020 was primarily due to a favorable net change in working capital and leased railcars for syndication partially offset by a net loss during the six months ended February 28, 2021 due to lower volumes of operating activities.
Cash provided by (used in) investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates. The change in cash provided by (used in) investing activities for the six months ended February 28, 2021 compared to the six months ended February 29, 2020 was primarily attributable to a reduction in proceeds from the sale of assets and an increase in capital expenditures.
Capital expenditures totaled $50.4 million and $40.8 million for the six months ended February 28, 2021 and February 29, 2020, respectively. Capital expenditures for 2021 primarily relate to additions to our lease fleet and on-going investments into the safety and productivity of our facilities. Leasing & Services and corporate capital expenditures were approximately $35.8 million and $4.9 million for the six months ended February 28, 2021 and February 29, 2020, respectively. Manufacturing capital expenditures were approximately $10.1 million and $31.6 million for the six months ended February 28, 2021 and February 29, 2020, respectively. Wheels, Repair & Parts capital expenditures were approximately $4.5 million and $4.3 million for the six months ended February 28, 2021 and February 29, 2020, respectively.
Proceeds from the sale of assets, which primarily related to sales of railcars from our lease fleet within Leasing & Services, were approximately $11.3 million and $41.8 million for the six months ended February 28, 2021 and February 29, 2020, respectively. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity.
The change in cash used in financing activities for the six months ended February 28, 2021 compared to the six months ended February 29, 2020 was primarily attributed to repayments of debt.
A quarterly dividend of $0.27 per share was declared on April 6, 2021.
The Board of Directors has authorized our company to repurchase shares of our common stock. The share repurchase program has an expiration date of January 31, 2023. The amount remaining for repurchase was $100 million as of February 28, 2021. Under the share repurchase program, shares of common stock may be purchased on the open market or through privately negotiated transactions from time to time. The timing and amount of purchases will be based upon market conditions, securities law limitations and other factors. The program may be modified, suspended or discontinued at any time without prior notice. The share repurchase program does not obligate us to acquire any specific number of shares in any period. There were no shares repurchased under the share repurchase program during the six months ended February 28, 2021 and February 29, 2020.
Senior secured credit facilities, consisting of three components, aggregated to $738.8 million as of February 28, 2021. We had an aggregate of $115.4 million available to draw down under committed credit facilities as of February 28, 2021. This amount consists of $42.5 million available on the North American credit facility, $33.9 million on the European credit facilities and $39.0 million on the Mexican credit facilities.
41
As of February 28, 2021, a $600.0 million revolving line of credit, maturing June 2024, secured by substantially all of our assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the Company’s U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.50% or Prime plus 0.50% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios.
As of February 28, 2021, lines of credit totaling $68.8 million secured by certain of our European assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.5% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $35.0 million of facilities which are guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2021 through September 2022.
As of February 28, 2021, our Mexican railcar manufacturing operations had three lines of credit totaling $70.0 million. The first line of credit provides up to $30.0 million and matures in June 2024. Advances under this facility bear interest at LIBOR plus 3.75% to 4.25%. The second line of credit provides up to $35.0 million, of which we and our joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 3.75%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through June 2021. The third line of credit provides up to $5.0 million and matures in September 2022. Advances under this facility bear interest at LIBOR plus 2.95% and are to be used for working capital needs.
As of February 28, 2021, outstanding commitments under the senior secured credit facilities consisted of $27.9 million in letters of credit and $210.0 million in borrowings under the North American credit facility, $34.8 million outstanding under the European credit facilities and $31.0 million outstanding under the Mexican credit facilities.
The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us and our various subsidiaries, the most restrictive of which, among other things, limit our ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into financing leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all our assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest plus rent) coverage. As of February 28, 2021, we were in compliance with all such restrictive covenants.
From time to time, we may seek to repurchase or otherwise retire or exchange securities, including outstanding convertible notes, borrowings and equity securities, and take other steps to reduce our debt or otherwise improve our balance sheet. These actions may include open market repurchases, unsolicited or solicited privately negotiated transactions or other retirements, repurchases or exchanges. Such retirements, repurchases or exchanges of one note or security for another note or security (now or hereafter existing), if any, will depend on a number of factors, including, but not limited to, prevailing market conditions, trading levels of our debt, our liquidity requirements and contractual restrictions, if applicable. The amounts involved in any such transactions may, individually or in the aggregate, be material and may involve all or a portion of a particular series of notes or other indebtedness which may reduce the float and impact the trading market of notes or other indebtedness which remain outstanding.
We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency, we enter into foreign currency forward exchange contracts with established financial institutions to protect the margin on a portion of foreign currency sales in firm backlog. Given the strong credit standing of the counterparties, no provision has been made for credit loss due to counterparty non-performance.
We expect existing funds and cash generated from operations, together with proceeds from financing activities including borrowings under existing credit facilities and long-term financings, to be sufficient to fund expected debt repayments, working capital needs, planned capital expenditures, additional investments in our unconsolidated affiliates and dividends during the next twelve months.
42
Off-Balance Sheet Arrangements
We do not currently have off balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our Consolidated Financial Statements.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.
Income taxes - The asset and liability method is used to account for income taxes. We are required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets and assess deferred tax liabilities based on enacted law and tax rates for each tax jurisdiction to determine the amount of deferred tax assets and liabilities. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. We recognize liabilities for uncertain tax positions based on whether evidence indicates that it is more likely than not that the position will be sustained on audit. It is inherently difficult and subjective to estimate such amounts, as this requires us to estimate the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis. Changes in tax law or court interpretations may result in the recognition of a tax benefit or an additional charge to the tax provision.
Warranty accruals - Warranty costs to cover a defined warranty period are estimated and charged to operations. The estimated warranty cost is based on historical warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. These estimates are inherently uncertain as they are based on historical data for existing products and judgment for new products. If warranty claims are made in the current period for issues that have not historically been the subject of warranty claims and were not taken into consideration in establishing the accrual or if claims for issues already considered in establishing the accrual exceed expectations, warranty expense may exceed the accrual for that particular product. Conversely, there is the possibility that claims may be lower than estimates. The warranty accrual is periodically reviewed and updated based on warranty trends. However, as we cannot predict future claims, the potential exists for the difference in any one reporting period to be material.
Environmental costs - At times we may be involved in various proceedings related to environmental matters. We estimate future costs for known environmental remediation requirements and accrue for them when it is probable that we have incurred a liability and the related costs can be reasonably estimated based on currently available information. If further developments in or resolution of an environmental matter result in facts and circumstances that are significantly different than the assumptions used to develop these reserves, the accrual for environmental remediation could be materially understated or overstated. Adjustments to these liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or when expenditures for which reserves are established are made. Due to the uncertain nature of environmental matters, there can be no assurance that we will not become involved in future litigation or other proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to us.
Revenue recognition - We measure revenue at the amounts that reflect the consideration to which we expect to be entitled in exchange for transferring control of goods and services to customers. We recognize revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. Payment terms vary by segment and product type and are generally due within normal commercial terms. Our contracts with customers may include multiple performance obligations (e.g. railcars, maintenance, management services, etc.). For such arrangements, we allocate revenues to each performance obligation based on its relative standalone selling price. We have disaggregated revenue from contracts with customers into categories which describe the principal activities from which we generate our revenues.
43
Manufacturing
Railcars are manufactured in accordance with contracts with customers. We recognize revenue upon our customers’ acceptance of the completed railcars at a specified delivery point. From time to time, we enter into multi-year supply agreements. Each railcar delivery is considered a distinct performance obligation, such that the amounts that are recognized as revenue following railcar delivery are generally not subject to change.
We typically recognize marine vessel manufacturing revenue over time using the cost input method, based on progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. This method best depicts our performance in completing the construction of the marine vessel for the customer and is consistent with the percentage of completion method used prior to the adoption of Topic 606: Contracts with Customers (Topic 606).
Wheels, Repair & Parts
We operate a network of wheel, repair and parts shops in North America that provide complete wheelset reconditioning and railcar repair services.
Wheels revenue is recognized when wheelsets are shipped to the customer or when consumed by customers in the case of consignment arrangements. Parts revenue is recognized upon shipment of the parts to the customers.
Repair revenue is typically recognized over time using the cost input method, based on progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. This method best depicts our performance in repairing the railcars for the customer. Repair services are typically completed in less than 90 days.
Leasing & Services
We own a fleet of new and used railcars which are leased to third-party customers. Lease revenue is recognized over the lease-term in the period in which it is earned.
Syndication transactions represent new and used railcars which have been placed on lease to a customer and which we intend to sell to an investor with the lease attached. At the time of such sale, revenue and cost of revenue associated with railcars that we have manufactured are recognized in the Manufacturing segment; while revenue and cost of revenue associated with railcars which were obtained from a third-party with the intent to resell and subsequently sold, are recognized in the Leasing & Services segment.
We enter into multi-year contracts to provide management and maintenance services to customers for which revenue is generally recognized on a straight-line basis over the contract term as a stand-ready obligation. Costs to fulfill these contracts are recognized as incurred.
Goodwill and acquired intangible assets - We periodically acquire businesses in purchase transactions in which the allocation of the purchase price may result in the recognition of goodwill and other intangible assets. The determination of the value of such intangible assets requires management to make estimates and assumptions. These estimates affect the amount of future period amortization and possible impairment charges.
Goodwill and indefinite-lived intangible assets are tested for impairment annually during the third quarter. The provisions of ASC 350 Intangibles – Goodwill and Other, require that we perform this test by comparing the fair value of each reporting unit with its carrying value. We determine the fair value of our reporting units based on a weighting of income and market approaches. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, short-term net working capital changes, other cash flows and the use of discount rates. Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit. Goodwill and indefinite-lived intangible assets are also tested more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists. When changes in circumstances,
44
such as a decline in the market price of our common stock, changes in demand or in the numerous variables associated with the judgments, assumptions and estimates made in assessing the appropriate valuation of goodwill indicate the carrying amount of certain indefinite lived assets may not be recoverable, the assets are evaluated for impairment.
We performed our annual goodwill impairment test during the third quarter of 2020 and we concluded that goodwill was not impaired. The estimated fair value of goodwill in both the Europe Manufacturing and Wheels & Parts reporting units exceeded its carrying value by approximately 5% and 9%, respectively. Since the estimated fair values were not substantially in excess of their carrying values, we may be at risk for an impairment loss in the future if expected profitability trends assumed in the fair value calculation are not realized.
As of February 28, 2021, our goodwill balance was $132.7 million of which $89.4 million related to our Manufacturing segment and $43.3 million related to our Wheels, Repair & Parts segment. Our Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $56.6 million; and the Europe Manufacturing reporting unit with a goodwill balance of $32.8 million.
45
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Currency Exchange Risk
We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter into foreign currency forward exchange contracts to protect revenue or margin on a portion of forecasted foreign currency sales and expenses. At February 28, 2021 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; and the purchase of Mexican Pesos and the sale of U.S. Dollars aggregated to $199.9 million. Because of the variety of currencies in which purchases and sales are transacted and the interaction between currency rates, it is not possible to predict the impact of a movement in a single foreign currency exchange rate would have on future operating results.
In addition to exposure to transaction gains or losses, we are also exposed to foreign currency exchange risk related to the net asset position of our foreign subsidiaries. At February 28, 2021, net assets of foreign subsidiaries aggregated $374.4 million and a 10% strengthening of the U.S. Dollar relative to the foreign currencies would result in a decrease in equity of $37.4 million, or 3.0% of Total equity - Greenbrier. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. Dollar.
Interest Rate Risk
We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $244.3 million of variable rate debt to fixed rate debt. As a result, we are exposed to interest rate risk relating to our revolving debt and a portion of term debt, which are at variable rates. At February 28, 2021, 54% of our outstanding debt had fixed rates and 46% had variable rates. At February 28, 2021, a uniform 10% increase in variable interest rates would result in approximately $0.8 million of additional annual interest expense.
46
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, under the supervision and with the participation of our Principal Executive Officer and Principal Financial and Accounting Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the Exchange Act). Based on that evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended February 28, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
47
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There is hereby incorporated by reference the information disclosed in Note 14 to Consolidated Financial Statements, Part I of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
This Form 10-Q should be read in conjunction with Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2020 and our subsequent Quarterly Report on Form 10-Q. Except as set forth below, there have been no material changes in the Risk Factors described in our Annual Report on Form 10-K for the year ended August 31, 2020 and subsequent Quarterly Report on Form 10-Q.
The COVID-19 coronavirus pandemic, governmental reaction to the pandemic, and related economic disruptions could negatively impact on our business, liquidity and financial position, results of operations, stock price, and ability to convert backlog to revenue.
The COVID-19 coronavirus outbreak continues to present risks to our business. While the approval in certain jurisdictions of one or more COVID-19 vaccinations has occurred, in many geographies, human mortality and morbidity continues and economic activity remains muted. The pandemic has not yet been contained and the number of its victims and the extent of negative impact on the global economy cannot be foreseen. Several of the countries in which we operate continue to be significantly negatively impacted by COVID-19.
We are unable to predict when, how, or with what magnitude COVID-19 and related events will negatively impact our business. We currently identify the following factors as the most significant risks to our business due to COVID-19, governmental actions, and economic conditions.
|
• |
We may be prevented from operating our manufacturing facilities, repair shops, wheel shops or other worksites due to the illness of our employees, “stay-at-home” regulations, and employee reluctance to appear for work. Extended closure of one or more of our large facilities could have a material negative impact on our financial position and results of operations. |
|
• |
We function as an essential infrastructure business under guidance issued by the Department of Homeland Security. Similar guidelines and authorities exist in other nations where we operate. If our current status were eliminated or curtailed, we could be required to temporarily close one or more of our manufacturing facilities, repair shops, wheel shops or other worksites for an extended period of time. |
|
• |
If an outbreak of COVID-19 were to occur at one of our large facilities, we could be obligated to close such facility for an extended period of time, and might not have a workforce adequate to meet our operating needs. |
|
• |
The operations of our customers may be disrupted, thereby increasing the likelihood that our customers may attempt to delay, defer or cancel orders, reduce orders for our products and services in the future or cease to operate as going concerns. |
|
• |
The operations of our suppliers may be disrupted and the markets for the inputs to our business may not operate effectively or efficiently, thereby negatively impacting our ability to purchase inputs for our business at reasonable prices, in a timely manner and in sufficient amounts. |
|
• |
Our indebtedness may increase due to our need to increase borrowing to fund operations during a period of reduced revenue. |
|
• |
The market price of our common stock may drop or remain volatile. |
|
• |
We may incur significant employee health care costs under our self-insurance programs. |
48
The longer the pandemic continues, the more likely that more of the foregoing risks will be realized and that other negative impacts on our business will occur, some of which we cannot now foresee.
Failure to realize the anticipated benefits of our new leasing joint venture may adversely affect our business, results of operations and financial position.
On February 4, 2021, we announced a refined leasing strategy to grow our owned portfolio of leased railcars built by Greenbrier by approximately $200 million per year. The long-term success of our new leasing strategy depends on our ability to lease and re-lease railcars at satisfactory lease rates, our ability to sell railcars into the secondary market at satisfactory prices, our ability to access credit at favorable interest rates and manage increased leverage, our ability to utilize tax benefits, obtain favorable tax treatment under the CARES Act, and our ability to execute successfully our commercial strategies and relationships. If we do not manage these and other factors successfully, the benefits of our new leasing strategy may not be realized as anticipated.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Board of Directors has authorized the Company to repurchase shares of the Company’s common stock. The share repurchase program has an expiration date of January 31, 2023. The amount remaining for repurchase was $100 million as of February 28, 2021. There were no shares repurchased under the share repurchase program during the three months ended February 28, 2021.
49
Item 6. Exhibits
(a) |
List of Exhibits: |
10.1 |
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10.2 |
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Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan. |
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10.3 |
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31.1 |
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31.2 |
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32.1 |
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32.2 |
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101.INS |
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Inline XBRL Instance Document. |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document. |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document. |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
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104 |
|
Cover Page Interactive Data File (Formatted as inline XBRL and contained in Exhibit 101). |
50
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 thereunto duly authorized.
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|
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THE GREENBRIER COMPANIES, INC. |
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Date: |
April 6, 2021 |
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By: |
/s/ Adrian J. Downes |
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Adrian J. Downes |
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Senior Vice President, |
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Chief Financial Officer and Chief Accounting Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
51
Exhibit 10.2
THE GREENBRIER COMPANIES, INC.
STOCK INCENTIVE GRANT PROGRAM FOR NON-EMPLOYEE DIRECTORS UNDER THE 2021 STOCK INCENTIVE PLAN
The following provisions set forth the terms of the Stock Incentive Grant Program (the "Program") for non-employee directors of The Greenbrier Companies, Inc. (the "Company") under the Company's 2021 Stock Incentive Plan (the "Plan"). In the event of any inconsistency between the terms contained in the Program and in the Plan, the Plan shall govern. All capitalized terms that are not defined in the Program have the meanings set forth in the Plan.
Section 1.Eligibility. Each member of the Board elected to the Board who is not otherwise an employee or officer of the Company or any Related Company (an "Eligible Director") shall be eligible to receive Awards as set forth in the Program, subject to the terms of the Program.
Section 2.Stock Incentive Grants
2.1Initial Awards. Upon an Eligible Director's initial election to the Board as an Eligible Director, the Eligible Director shall automatically receive an award of Restricted Stock Units (the "Initial Award"). The Grant Date for an Initial Award to an Eligible Director is the date of that director’s first election to the Board. If such initial election occurs at an annual meeting of shareholders, the Initial Award shall be for a number of shares of Common Stock calculated by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the Grant Date and rounding up to the nearest whole share. If such initial election occurs on another date, the Initial Award shall be for a number of shares of Common Stock calculated by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the Grant Date and multiplying the resulting quotient by a fraction, the numerator of which is the difference obtained by subtracting from twelve the number of whole calendar months that elapse from the date such person first becomes an Eligible Director through the date of the first Annual Award (as defined below) immediately following the date he or she first becomes an Eligible Director and the denominator of which is twelve, and rounding up to the nearest whole share. A director who is also an employee of the Company or a Related Company but who subsequently ceases such employment status but remains a director shall not be eligible for an Initial Award.
2.2Annual Awards. Immediately following each annual meeting of shareholders, each Eligible Director shall automatically receive an award of Restricted Stock Units for a number of shares of Common Stock calculated by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the Grant Date and rounding up to the nearest whole share (the "Annual Award"). The Grant Date of an Annual Award will be the date of such annual meeting.
2.3Vesting and Payment. Each Initial Award and Annual Award shall vest and become payable with respect to 100% of the shares of Common Stock subject to such Award on the earlier of (a) the one-year anniversary of the Grant Date and (b) the next annual meeting of shareholders that occurs prior to such one-year anniversary, but at least 50 weeks after the prior year’s annual meeting of shareholders. One share of Common Stock will be issuable for each
1
Exhibit 10.2
Restricted Stock Unit that vests and becomes payable. As soon as practicable after vesting of an Award, the Company will settle the vested Restricted Stock Units by issuing to the Eligible Director one share of Common Stock for each vested Restricted Stock Unit. The Company will issue the shares of Common Stock by registering the shares of Common Stock in book entry form with the Company's transfer agent in the name of the Eligible Director and any applicable restrictions will be noted in the records of the Company's transfer agent and in the book entry system.
2.4Termination of Service. In the event of an Eligible Director’s Termination of Service due to death, Disability or Retirement, or because such Eligible Director is not nominated or re-elected to serve an additional term as a director, any unvested portion of the Eligible Director’s Initial Award or Annual Award will become fully vested and no longer subject to forfeiture effective immediately prior to such Termination of Service. In the event of an Eligible Director’s Termination of Service due to such Eligible Director’s removal or resignation, any unvested portion of the Eligible Director’s Initial Award or Annual Award will automatically be forfeited.
2.5Dividend Equivalent Rights. In the event that the Company pays an ordinary cash dividend on its Common Stock and the dividend record date occurs before all of the Restricted Stock Units subject to an Award held by an Eligible Director have either been settled or terminated, the Company will credit the Award with a dollar amount equal to (a) the per share cash dividend paid by the Company on its Common Stock on the dividend payment date, multiplied by (b) the total number of outstanding and unsettled Restricted Stock Units subject to the Award (including unvested Units) as of the dividend record date (the "Dividend Equivalent Rights"). Any Dividend Equivalent Rights credited shall be subject to the same vesting, payment and other terms, conditions and restrictions as the Restricted Stock Units to which they relate. The Dividend Equivalent Rights will be paid in the form of shares of the Common Stock calculated by dividing (a) the amount of the Dividend Equivalent Rights, without interest, by (b) the Fair Market Value of the Common Stock on the dividend payment date (rounded down to the nearest whole number of shares).
Section 3.Amendment, Suspension or Termination of Program. The Board may amend, suspend or terminate the Program or any portion of it at any time and in such respects as it deems advisable. Except as provided in the Plan, any such amendment, suspension or termination shall not, without the consent of the Participant, impair or diminish any rights of a Participant under an outstanding Award.
Section 4.Effective Date. The Program shall become effective on the Effective Date of the Plan and, unless sooner terminated by the Board, shall remain effective during the term of the Plan.
Section 5.Change of Control. Upon a Change in Control, all Awards outstanding and held by an Eligible Director as of the date of the Change of Control, and which are not then vested or no longer subject to forfeiture, will immediately become fully vested and no longer subject to forfeiture.
2
Exhibit 10.2
Section 6.General. Provisions of the Plan that are not discussed above, to the extent applicable to Eligible Directors, shall continue to govern the terms and conditions of Awards granted to Eligible Directors.
3
Exhibit 10.3
THIRD AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Third Amendment to Amended and Restated Employment Agreement, dated as of January 27, 2021 (this "Third Amendment"), is by and between The Greenbrier Companies, Inc. (the "Company") and Mark J. Rittenbaum ("Executive") and amends the terms of that certain Amended and Restated Employment Agreement, dated as of August 28, 2012, between the Company and Executive (the "Agreement"), as amended by the First Amendment to Amended and Restated Employment Agreement, dated March 29, 2016, and the Second Amendment to Amended and Restated Employment Agreement dated September 9, 2019 (collectively with the Agreement, the "Amended Agreement").
For good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:
1. Sections 1.1 and 1.2 of the Amended Agreement are hereby amended and restated to read in their entirety as follows:
"1.1Employment of Executive. The Company agrees to employ Executive, and Executive agrees to serve, until August 31, 2022 (the "Retirement Date") as the Company's Executive Vice President upon the conditions set forth in this Agreement.
1.2Responsibilities. Executive shall report to William A. Furman, in his capacity as Chief Executive Officer or Executive Chairman of the Board, as the case may be, for so long as Mr. Furman is an employee of the Company. In the event that Mr. Furman ceases to be an employee of the Company prior to the Retirement Date, Executive shall report to the Chief Executive Officer. While employed by the Company, Executive shall be responsible for onboarding, coaching and supporting his successor as Chief Commercial and Leasing Officer, along with other duties related to the Company’s commercial or leasing activities which may be reasonably assigned by the party to whom Executive reports. Executive agrees to abide by all the policies, practices and rules of the Company.”
2. Section 2.1 of the Amended Agreement is hereby amended and restated to read as follows:
"2.1Term. The term of this Agreement (the "Term") shall commence on the Effective Date and shall continue until all obligations of the parties hereunder have been performed. On the Retirement Date Executive shall submit to the Board his resignation from all executive positions he then holds, including the position of Executive Vice President."
3. Section 2.2 of the Amended Agreement is hereby deleted.
4. Sections 3.1 and 3.2 of the Amended Agreement are hereby amended and restated to read in their entirety as follows:
"3.1Total Compensation; Base Salary. Until August 31, 2022, the Company shall continue to pay Executive his annual base salary in the amount in effect immediately prior to the execution of this Third Amendment (the "Base Salary"). The Base Salary shall be payable in accordance with the Company's usual and customary payroll practices, but no less frequently than monthly installments.
3.2Annual Cash Incentive. Executive shall be eligible to earn a bonus each year in an amount to be determined pursuant to the annual bonus program approved by the Committee and then in effect (the "Annual Bonus"). Executive's target Annual Bonus amount shall be not less than 100% of Executive's Base Salary, but the actual amount earned and paid pursuant to Executive's Annual Bonus for any year may be an amount less than, greater than, or the same as the target amount. Any Annual Bonus shall be paid to Executive in cash (subject to normal withholding and payroll deductions) within 120 days following the end of the fiscal year in which such Annual Bonus shall be earned and in any event within the short-term deferral period specified in Treas. Reg. §1.409(b)(4) (i.e., later of the 15th day of the third month following the end of the calendar year or the 15th day of the third month following the end of the Company's taxable year).”
5. The Amended Agreement is hereby amended by adding a new Section 3.10 as follows:
"3.10For the avoidance of doubt, except as otherwise provided in this Third Amendment, until the Retirement Date Executive will be entitled to continue receiving, without cost, those perquisites and benefits provided to him immediately prior to the execution of this Third Amendment. For clarity, all references in this Section 3.10 to perquisites being provided "without cost" does not mean that Executive will be grossed-up for any tax liability to Executive associated with such perquisites."
6. Section 3.5 of the Amended Agreement is amended by adding the following at the end of such section:
“For the avoidance of doubt, Executive shall be eligible to receive a Supplemental Retirement Plan contribution on his behalf with respect to Plan year (calendar year) 2021, such contribution anticipated to be made in January 2022. While no level of contribution is required and no level of supplemental retirement benefits is guaranteed, the Company intends to make said contribution in the ordinary course in the actuarial determined amount for such year as is intended to provide the target benefit amount. The Company will not treat Executive differently from other
2
current participants in the plan with respect to contributions in such year, other than differences based on compensation levels or actuarial determinations of amounts intended to fund target benefit amounts. If the contribution for such year is less than the amount calculated in accordance with the plan for such year to reach the target benefit, then the Company will make one or more subsequent contributions as soon as it is able to fund benefits in accordance with the terms of the plan.”
7. Section 5 of the Amended Agreement is hereby further amended to add the following at the end of such section:
"For the avoidance of doubt, for purposes of this Section 5 Executive's retirement as an executive on the Retirement Date as contemplated by Section 2.1 shall be considered a voluntary termination by Executive."
8. A new Section 11 is added to the Amended Agreement as follows:
“Section 11. Consulting Engagement. Upon the Retirement Date, Executive shall become a consultant to the Company, but will generally continue to be treated as an employee for tax purposes. Executive’s duties as a consultant shall be mutually agreed upon by Executive and the person to whom Executive reported immediately prior to the Retirement Date. Executive’s consulting term shall continue through November 30, 2022. Executive shall receive a fee for his services as a consultant of $1,000 per month (the “Consulting Fee”). Executive and eligible family members will be eligible for coverage under the Company’s employer-sponsored health insurance while he is acting as a consultant on the same terms as in effect immediately prior to the Retirement Date.”
Except as amended by this Third Amendment, the Amended Agreement shall remain in full force and effect.
THE GREENBRIER COMPANIES, INC. |
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EXECUTIVE |
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By: |
/s/ William A. Furman |
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/s/ Mark J. Rittenbaum |
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Mark J. Rittenbaum |
3
Exhibit 31.1
CERTIFICATIONS
I, William A. Furman, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of The Greenbrier Companies, Inc. for the quarterly period ended February 28, 2021; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Exhibit 31.2
CERTIFICATIONS (cont'd)
I, Adrian J. Downes, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of The Greenbrier Companies, Inc. for the quarterly period ended February 28, 2021; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: April 6, 2021 |
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/s/ Adrian J. Downes |
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Adrian J. Downes |
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Senior Vice President, |
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Chief Financial Officer and Chief Accounting Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of The Greenbrier Companies, Inc. (the "Company") on Form 10-Q for the quarterly period ended February 28, 2021, as filed with the Securities and Exchange Commission on the date therein specified (the "Report"), I, William A. Furman, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: |
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April 6, 2021 |
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/s/ William A. Furman |
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William A. Furman |
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Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of The Greenbrier Companies, Inc. (the "Company") on Form 10-Q for the quarterly period ended February 28, 2021, as filed with the Securities and Exchange Commission on the date therein specified (the "Report"), I, Adrian J. Downes, Senior Vice President, Chief Financial Officer and Chief Accounting Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: |
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April 6, 2021 |
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/s/ Adrian J. Downes |
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Adrian J. Downes |
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Senior Vice President, |
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Chief Financial Officer and Chief Accounting Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Feb. 28, 2021 |
Aug. 31, 2020 |
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Statement Of Financial Position [Abstract] | ||
Preferred stock, without par value | ||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, outstanding | 0 | 0 |
Common stock, without par value | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares outstanding | 32,825,000 | 32,701,000 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
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Revenue | ||||||
Revenue | $ 295,622 | $ 623,848 | $ 698,611 | $ 1,393,207 | ||
Cost of revenue | ||||||
Cost of revenue | 277,951 | 537,512 | 640,269 | 1,214,682 | ||
Margin | 17,671 | 86,336 | 58,342 | 178,525 | ||
Selling and administrative expense | 43,425 | 54,597 | 87,132 | 108,961 | ||
Net gain on disposition of equipment | (27) | (6,697) | (949) | (10,656) | ||
Earnings (loss) from operations | (25,727) | 38,436 | (27,841) | 80,220 | ||
Other costs | ||||||
Interest and foreign exchange | 9,568 | 12,609 | 20,671 | 25,461 | ||
Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates | (35,295) | 25,827 | (48,512) | 54,759 | ||
Income tax benefit (expense) | 21,752 | (7,463) | 29,084 | (13,457) | ||
Earnings (loss) before earnings (loss) from unconsolidated affiliates | (13,543) | 18,364 | (19,428) | 41,302 | ||
Earnings (loss) from unconsolidated affiliates | (378) | 1,651 | (1,122) | 2,724 | ||
Net earnings (loss) | (13,921) | 20,015 | (20,550) | 44,026 | ||
Net (earnings) loss attributable to noncontrolling interest | 4,856 | (6,386) | 1,513 | (22,728) | ||
Net earnings (loss) attributable to Greenbrier | $ (9,065) | $ 13,629 | $ (19,037) | $ 21,298 | ||
Basic earnings (loss) per common share | $ (0.28) | $ 0.42 | $ (0.58) | $ 0.65 | ||
Diluted earnings (loss) per common share | $ (0.28) | $ 0.41 | $ (0.58) | $ 0.64 | ||
Weighted average common shares: | ||||||
Basic | [1] | 32,810 | 32,661 | 32,766 | 32,645 | |
Diluted | 32,810 | 33,482 | 32,766 | 33,382 | ||
Manufacturing | ||||||
Revenue | ||||||
Revenue | $ 202,094 | $ 489,943 | $ 510,816 | $ 1,147,310 | ||
Cost of revenue | ||||||
Cost of revenue | 201,771 | 422,309 | 482,661 | 1,004,221 | ||
Earnings (loss) from operations | (17,216) | 46,105 | (7,530) | 99,248 | ||
Wheels, Repair & Parts | ||||||
Revenue | ||||||
Revenue | 71,623 | 91,225 | 137,179 | 177,833 | ||
Cost of revenue | ||||||
Cost of revenue | 66,667 | 84,373 | 129,651 | 166,265 | ||
Earnings (loss) from operations | 2,433 | 3,320 | 2,233 | 4,434 | ||
Leasing & Services | ||||||
Revenue | ||||||
Revenue | 21,905 | 42,680 | 50,616 | 68,064 | ||
Cost of revenue | ||||||
Cost of revenue | 9,513 | 30,830 | 27,957 | 44,196 | ||
Earnings (loss) from operations | $ 6,420 | $ 12,793 | $ 12,310 | $ 22,570 | ||
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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
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Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
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Statement Of Income And Comprehensive Income [Abstract] | ||||||||
Net earnings (loss) | $ (13,921) | $ 20,015 | $ (20,550) | $ 44,026 | ||||
Other comprehensive income (loss) | ||||||||
Translation adjustment | 597 | (703) | 4,464 | (2,286) | ||||
Reclassification of derivative financial instruments recognized in net earnings (loss) | [1] | 1,274 | 168 | 2,515 | 477 | |||
Unrealized loss on derivative financial instruments | [2] | (142) | (3,638) | (895) | (1,484) | |||
Other (net of tax effect) | 52 | 242 | 53 | (221) | ||||
Other comprehensive income | 1,781 | (3,931) | 6,137 | (3,514) | ||||
Comprehensive income (loss) | (12,140) | 16,084 | (14,413) | 40,512 | ||||
Comprehensive (income) loss attributable to noncontrolling interest | 4,849 | (6,384) | 1,509 | (22,720) | ||||
Comprehensive income (loss) attributable to Greenbrier | $ (7,291) | $ 9,700 | $ (12,904) | $ 17,792 | ||||
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Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
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Statement Of Income And Comprehensive Income [Abstract] | ||||
Reclassification of derivative financial instruments recognized in net earnings (loss), tax | $ (0.4) | $ (0.1) | $ (0.8) | $ (0.2) |
Unrealized loss on derivative financial instruments, tax | $ (0.1) | $ 1.3 | $ (0.1) | $ 0.7 |
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock Shares |
Additional Paid-in Capital |
Retained Earnings |
Retained Earnings
Cumulative Effect Adjustment Due to Adoption
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Accumulated Other Comprehensive (Loss) |
Total Equity - Greenbrier |
Total Equity - Greenbrier
Cumulative Effect Adjustment Due to Adoption
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Noncontrolling Interest |
Equity Excluding Contingently Redeemable Noncontrolling Interest |
Equity Excluding Contingently Redeemable Noncontrolling Interest
Cumulative Effect Adjustment Due to Adoption
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Contingently Redeemable Noncontrolling Interest |
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Beginning balance at Aug. 31, 2019 | $ 453,943 | $ 867,602 | $ 4,393 | $ (44,815) | $ 1,276,730 | $ 4,393 | $ 164,967 | $ 1,441,697 | $ 4,393 | |||
Beginning balance (in shares) at Aug. 31, 2019 | 32,488 | |||||||||||
Beginning balance at Aug. 31, 2019 | $ 31,564 | |||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | |||||||||
Net earnings (loss) | $ 44,026 | $ 21,298 | $ 21,298 | 23,510 | $ 44,808 | |||||||
Other comprehensive income (loss), net | (3,514) | (3,506) | (3,506) | (8) | (3,514) | |||||||
Noncontrolling interest adjustments | 9,038 | 9,038 | ||||||||||
Joint venture partner distribution declared | (8,172) | (8,172) | ||||||||||
Noncontrolling interest acquired | 12,075 | 12,075 | ||||||||||
Restricted stock awards (net of cancellations) | 11,114 | 11,114 | 11,114 | |||||||||
Restricted stock awards (net of cancellations) (in shares) | 154 | |||||||||||
Unamortized restricted stock | (13,008) | (13,008) | (13,008) | |||||||||
Restricted stock amortization | 6,859 | 6,859 | 6,859 | |||||||||
Cash dividends | (17,408) | (17,408) | (17,408) | |||||||||
Ending balance at Feb. 29, 2020 | 458,908 | 875,885 | (48,321) | 1,286,472 | 201,410 | 1,487,882 | ||||||
Ending Balance (in shares) at Feb. 29, 2020 | 32,642 | |||||||||||
Ending Balance at Feb. 29, 2020 | 30,782 | |||||||||||
Net earnings (loss) | (782) | |||||||||||
Beginning balance at Nov. 30, 2019 | 454,900 | 871,300 | (44,392) | 1,281,808 | 191,050 | 1,472,858 | ||||||
Beginning balance (in shares) at Nov. 30, 2019 | 32,596 | |||||||||||
Beginning balance at Nov. 30, 2019 | 31,723 | |||||||||||
Net earnings (loss) | 20,015 | 13,629 | 13,629 | 7,327 | 20,956 | |||||||
Other comprehensive income (loss), net | (3,931) | (3,929) | (3,929) | (2) | (3,931) | |||||||
Noncontrolling interest adjustments | 7,302 | 7,302 | ||||||||||
Joint venture partner distribution declared | (4,267) | (4,267) | ||||||||||
Restricted stock awards (net of cancellations) | 1,642 | 1,642 | 1,642 | |||||||||
Restricted stock awards (net of cancellations) (in shares) | 46 | |||||||||||
Unamortized restricted stock | (1,667) | (1,667) | (1,667) | |||||||||
Restricted stock amortization | 4,033 | 4,033 | 4,033 | |||||||||
Cash dividends | (9,044) | (9,044) | (9,044) | |||||||||
Ending balance at Feb. 29, 2020 | 458,908 | 875,885 | (48,321) | 1,286,472 | 201,410 | 1,487,882 | ||||||
Ending Balance (in shares) at Feb. 29, 2020 | 32,642 | |||||||||||
Ending Balance at Feb. 29, 2020 | 30,782 | |||||||||||
Net earnings (loss) | (941) | |||||||||||
Beginning balance at Aug. 31, 2020 | $ 1,473,055 | 460,400 | $ 885,460 | $ (509) | (52,817) | $ 1,293,043 | $ (509) | 180,012 | $ 1,473,055 | $ (509) | ||
Beginning balance (in shares) at Aug. 31, 2020 | 32,701 | 32,701 | ||||||||||
Beginning balance at Aug. 31, 2020 | 31,117 | |||||||||||
Accounting Standards Update [Extensible List] | ASU 2016-13 | ASU 2016-13 | ASU 2016-13 | |||||||||
Net earnings (loss) | $ (20,550) | $ (19,037) | $ (19,037) | (433) | $ (19,470) | (1,080) | ||||||
Other comprehensive income (loss), net | 6,137 | 6,133 | 6,133 | 4 | 6,137 | |||||||
Noncontrolling interest adjustments | (1,285) | (1,285) | ||||||||||
Joint venture partner distribution declared | (2,441) | (2,441) | ||||||||||
Restricted stock awards (net of cancellations) | 15,497 | 15,497 | 15,497 | |||||||||
Restricted stock awards (net of cancellations) (in shares) | 124 | |||||||||||
Unamortized restricted stock | (17,854) | (17,854) | (17,854) | |||||||||
Restricted stock amortization | 8,951 | 8,951 | 8,951 | |||||||||
Cash dividends | (17,722) | (17,722) | (17,722) | |||||||||
Ending balance at Feb. 28, 2021 | $ 1,444,359 | 466,994 | 848,192 | (46,684) | 1,268,502 | 175,857 | 1,444,359 | |||||
Ending Balance (in shares) at Feb. 28, 2021 | 32,825 | 32,825 | ||||||||||
Ending Balance at Feb. 28, 2021 | 30,037 | |||||||||||
Beginning balance at Nov. 30, 2020 | 462,498 | 866,367 | (48,458) | 1,280,407 | 180,455 | 1,460,862 | ||||||
Beginning balance (in shares) at Nov. 30, 2020 | 32,824 | |||||||||||
Beginning balance at Nov. 30, 2020 | 30,711 | |||||||||||
Net earnings (loss) | $ (13,921) | (9,065) | (9,065) | (4,182) | (13,247) | (674) | ||||||
Other comprehensive income (loss), net | 1,781 | 1,774 | 1,774 | 7 | 1,781 | |||||||
Noncontrolling interest adjustments | (14) | (14) | ||||||||||
Joint venture partner distribution declared | (409) | (409) | ||||||||||
Restricted stock awards (net of cancellations) | 1,301 | 1,301 | 1,301 | |||||||||
Restricted stock awards (net of cancellations) (in shares) | 1 | |||||||||||
Unamortized restricted stock | (1,321) | (1,321) | (1,321) | |||||||||
Restricted stock amortization | 4,516 | 4,516 | 4,516 | |||||||||
Cash dividends | (9,110) | (9,110) | (9,110) | |||||||||
Ending balance at Feb. 28, 2021 | $ 1,444,359 | $ 466,994 | $ 848,192 | $ (46,684) | $ 1,268,502 | $ 175,857 | $ 1,444,359 | |||||
Ending Balance (in shares) at Feb. 28, 2021 | 32,825 | 32,825 | ||||||||||
Ending Balance at Feb. 28, 2021 | $ 30,037 |
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
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Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
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Equity Excluding Contingently Redeemable Noncontrolling Interest | ||||
Cash dividend per share | $ 0.27 | $ 0.27 | $ 0.54 | $ 0.52 |
Interim Financial Statements |
6 Months Ended |
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Feb. 28, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Interim Financial Statements |
Note 1 – Interim Financial Statements The Condensed Consolidated Financial Statements of The Greenbrier Companies, Inc. and its subsidiaries (Greenbrier or the Company) as of February 28, 2021 and for the three and six months ended February 28, 2021 and February 29, 2020 have been prepared to reflect all adjustments (consisting of normal recurring accruals) that, in the opinion of management, are necessary for a fair presentation of the financial position, operating results and cash flows for the periods indicated. The results of operations for the three and six months ended February 28, 2021 are not necessarily indicative of the results to be expected for the entire year ending August 31, 2021. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these unaudited financial statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended August 31, 2020. Management Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (GAAP) requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates. Reclassifications – Certain immaterial reclassifications have been made to prior year balances in order to conform to the current year’s presentation. Initial Adoption of Accounting Standards Measurement of Credit Losses on Financial Instruments In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update 2016-13, Financial Instruments – Credit Losses (ASU 2016-13). This update introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance applies to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. The new guidance also applies to debt securities and other financial assets measured at fair value through other comprehensive income (loss). The new guidance is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance beginning September 1, 2020. The Company estimated the expected lifetime credit loss by pooling financial instruments based on similar characteristics. Expected losses were then estimated using historical loss information and aging considerations, as well as other information such as the current and future economic conditions of its customers and the end markets in which they operate. The Company adopted this guidance using a modified retrospective approach through a cumulative effect adjustment, which decreased opening retained earnings by $0.5 million on September 1, 2020. The ongoing application of ASU 2016-13 is not expected to materially impact the Company’s consolidated financial statements. Prospective Accounting Changes
Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued Accounting Standard Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted EPS calculations as a result of these changes. The Company expects this change to reduce reported interest expense, increase reported net income, and result in a reclassification of certain convertible balance sheet amounts from stockholders’ equity to liabilities as it relates to the Company’s convertible senior notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted EPS, which is expected to be incrementally dilutive compared to the Company’s current accounting treatment. The guidance in this ASU can be adopted using either a full or modified retrospective approach and becomes effective for annual reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures. Simplification of Accounting for Income Taxes In December 2019, the FASB issued Accounting Standard Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 for: recognizing deferred taxes for investments, performing intra-period allocations and calculating taxes in interim periods. The ASU also improves consistent application of GAAP for other areas of Topic 740 by clarifying and amending existing guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The standard is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and disclosures. |
Revenue Recognition |
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Revenue From Contract With Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition |
Note 2 – Revenue Recognition
Contract balances Contract assets primarily consist of unbilled receivables related to marine vessel construction and railcar repair services, for which the respective contracts do not yet permit billing at the reporting date. Contract liabilities primarily consist of customer prepayments for manufacturing, maintenance, and other management-type services, for which the Company has not yet satisfied the related performance obligations.
The contract balances are as follows:
For the three and six months ended February 28, 2021, the Company recognized $2.9 million and $5.6 million, respectively, of revenue that was included in Contract liabilities as of November 30, 2020 and August 31, 2020.
Performance obligations
As of February 28, 2021, the Company has entered into contracts with customers for which revenue has not yet been recognized. The following table outlines estimated revenue related to performance obligations wholly or partially unsatisfied, that the Company anticipates will be recognized in future periods.
Based on current production and delivery schedules and existing contracts, approximately $0.6 billion of Railcar sales are expected to be recognized in the remaining six months of 2021 while the remaining amount is expected to be recognized into 2024. The table above excludes estimated revenue to be recognized at the Company’s Brazilian manufacturing operations, as they are accounted for under the equity method.
Revenue amounts reflected in Railcars intended for syndication may be syndicated to third parties or held in the Company’s fleet depending on a variety of factors.
Marine revenue is expected to be recognized through 2022 as vessel construction is completed.
Services includes management and maintenance services of which approximately 48% are expected to be performed through 2025 and the remaining amount through 2037. |
Inventories |
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Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Note 3 – Inventories Inventories are valued at the lower of cost or net realizable value using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit. The following table summarizes the Company’s inventory balance:
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Intangibles and Other Assets, net |
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Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles and Other Assets, net |
Note 4 – Intangibles and Other Assets, net Intangible assets that are determined to have finite lives are amortized over their useful lives. Intangible assets with indefinite useful lives are not amortized and are periodically evaluated for impairment. The following table summarizes the Company’s identifiable intangible and other assets balance:
Amortization expense was $2.9 million and $5.7 million for the three and six months ended February 28, 2021 and $2.7 million and $5.5 million for the three and six months ended February 29, 2020. Amortization expense for the years ending August 31, 2021, 2022, 2023, 2024 and 2025 is expected to be $11.5 million, $8.1 million, $6.8 million, $6.6 million and $5.7 million, respectively. |
Revolving Notes |
6 Months Ended |
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Feb. 28, 2021 | |
Debt Disclosure [Abstract] | |
Revolving Notes |
Note 5 – Revolving Notes Senior secured credit facilities, consisting of three components, aggregated to $738.8 million as of February 28, 2021. As of February 28, 2021, a $600.0 million revolving line of credit, maturing June 2024, secured by substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, existed to provide working capital and interim financing of equipment, principally for the Company’s U.S. and Mexican operations. Advances under this North American credit facility bear interest at LIBOR plus 1.50% or Prime plus 0.50% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. As of February 28, 2021, lines of credit totaling $68.8 million secured by certain of the Company’s European assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.5% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of the Company’s European manufacturing operations. The European lines of credit include $35.0 million of facilities which are guaranteed by the Company. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2021 through September 2022. As of February 28, 2021, the Company’s Mexican railcar manufacturing operations had three lines of credit totaling $70.0 million. The first line of credit provides up to $30.0 million and matures in June 2024. Advances under this facility bear interest at LIBOR plus 3.75% to 4.25%. The second line of credit provides up to $35.0 million, of which the Company and its joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 3.75%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through June 2021. The third line of credit provides up to $5.0 million and matures in September 2022. Advances under this facility bear interest at LIBOR plus 2.95% and are to be used for working capital needs. As of February 28, 2021, outstanding commitments under the senior secured credit facilities consisted of $27.9 million in letters of credit and $210.0 million in borrowings under the North American credit facility, $34.8 million outstanding under the European credit facilities and $31.0 million outstanding under the Mexican credit facilities. As of February 28, 2021, the Company had an aggregate of $115.4 million available to draw down under committed credit facilities. As of August 31, 2020, outstanding commitments under the senior secured credit facilities consisted of $28.7 million in letters of credit and $275.0 million in borrowings under the North American credit facility, $46.5 million outstanding under the European credit facilities and $30.0 million outstanding under the Mexican credit facilities. |
Accounts Payable and Accrued Liabilities |
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Payables And Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities |
Note 6 – Accounts Payable and Accrued Liabilities
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Warranty Accruals |
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Guarantees And Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Accruals |
Note 7 – Warranty Accruals
Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on the history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets, are reviewed periodically and updated based on warranty trends and expirations of warranty periods.
Warranty accrual activity:
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss |
Note 8 – Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss, net of tax effect as appropriate, consisted of the following:
The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Operations, with financial statement caption, were as follows:
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share |
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:
Diluted EPS is calculated using the treasury stock method associated with shares underlying the 2.875% convertible notes, 2.25% convertible notes, 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.
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Stock Based Compensation |
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Feb. 28, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation |
Note 10 – Stock Based Compensation
The value of stock based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or in some instances the recipient’s eligible retirement date. Stock based compensation expense consists of restricted stock unit, restricted stock and phantom stock unit awards.
Stock based compensation expense was $4.5 million and $9.0 million for the three and six months ended February 28, 2021, respectively and $4.1 million and $7.2 million for the three and six months ended February 29, 2020, respectively. Compensation expense is recorded in Selling and administrative expense and Cost of revenue on the Consolidated Statements of Operations. |
Derivative Instruments |
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Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments |
Note 11 – Derivative Instruments Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk. Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in accumulated other comprehensive income or loss. At February 28, 2021 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; and the purchase of Mexican Pesos and the sale of U.S. Dollars aggregated to $199.9 million. The fair value of the contracts is included on the Consolidated Balance Sheets as Accounts payable and accrued liabilities when there is a loss, or as Accounts receivable, net when there is a gain. As the contracts mature at various dates through November 2022, any such gain or loss remaining will be recognized in manufacturing revenue or cost of revenue along with the related transactions. In the event that the underlying transaction does not occur or does not occur in the period designated at the inception of the hedge, the amount classified in accumulated other comprehensive loss would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence. At February 28, 2021 exchange rates, approximately $1.0 million would be reclassified to revenue or cost of revenue in the next year. At February 28, 2021, an interest rate swap agreement maturing in September 2023 had a notional amount of $103.6 million and an interest rate swap agreement maturing June 2024 had a notional amount of $140.6 million. The fair value of the contracts are included on the Consolidated Balance Sheets in Accounts payable and accrued liabilities when there is a loss, or in Accounts receivable, net when there is a gain. As interest expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified from Accumulated other comprehensive loss and charged or credited to interest expense. At February 28, 2021 interest rates, approximately $5.0 million would be reclassified to interest expense in the next year. Fair Values of Derivative Instruments
The Effect of Derivative Instruments on the Statements of Operations Three Months Ended February 28, 2021 and February 29, 2020
The following table presents the amounts in the Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded and the effects of the cash flow hedge activity on these line items for the three months ended February 28, 2021 and February 29, 2020:
Six Months Ended February 28, 2021 and February 29, 2020
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
Note 12 – Segment Information The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. The accounting policies of the segments are described in the summary of significant accounting policies in the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended August 31, 2020. Performance is evaluated based on Earnings (loss) from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. The Company does not allocate Interest and foreign exchange or Income tax benefit (expense) for either external or internal reporting purposes. Intersegment sales and transfers are valued as if the sales or transfers were to third parties. Related revenue and margin are eliminated in consolidation and therefore are not included in consolidated results in the Company’s Consolidated Financial Statements. The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes. For the three months ended February 28, 2021:
For the six months ended February 28, 2021:
For the three months ended February 29, 2020:
For the six months ended February 29, 2020:
Reconciliation of Earnings (loss) from operations to Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
Note 13 – Leases Lessor Equipment on operating leases is reported net of accumulated depreciation of $33.6 million and $33.4 million as of February 28, 2021 and August 31, 2020, respectively. Depreciation expense was $3.2 million and $6.8 million for the three and six months ended February 28, 2021, respectively and $3.0 million and $6.6 million for the three and six months ended February 29, 2020, respectively. In addition, certain railcar equipment leased-in by the Company on operating leases is subleased to customers under non-cancelable operating leases with lease terms ranging from one to fifteen years. Operating lease rental revenues included in the Company’s Statements of Operations for the three and six months ended February 28, 2021 was $12.3 million and $24.1 million, respectively, which included $3.8 million and $7.4 million, respectively, of revenue as a result of daily, monthly or car hire utilization arrangements. Operating lease rental revenues included in the Company’s Statements of Operations for the three and six months ended February 29, 2020 was $9.8 million and $21.2 million, respectively, which included $2.8 million and $6.5 million, respectively, of revenue as a result of daily, monthly or car hire utilization arrangements. Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases at February 28, 2021, will mature as follows:
Lessee The Company leases railcars, real estate, and certain equipment under operating and, to a lesser extent, finance lease arrangements. As of and for the three and six months ended February 28, 2021 and February 29, 2020, finance leases were not a material component of the Company's lease portfolio. The Company’s real estate and equipment leases have remaining lease terms ranging from less than one year to 77 years, with some including options to extend up to 15 years. The Company recognizes a lease liability and corresponding right-of-use (ROU) asset based on the present value of lease payments. To determine the present value of lease payments, as most of its leases do not provide a readily determinable implicit rate, the Company’s incremental borrowing rate is used to discount the lease payments based on information available at lease commencement date. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when estimating its incremental borrowing rate.
The components of operating lease costs were as follows:
Aggregate minimum future amounts payable under operating leases having initial or remaining non-cancelable terms at February 28, 2021 will mature as follows:
The table below presents additional information related to the Company’s leases:
Supplemental cash flow information related to leases were as follows:
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Commitments and Contingencies |
6 Months Ended |
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Feb. 28, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies |
Note 14 – Commitments and Contingencies Portland Harbor Superfund Site The Company’s Portland, Oregon manufacturing facility (the Portland Property) is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting the Company’s manufacturing facility, as a federal "National Priority List" or "Superfund" site due to sediment contamination (the Portland Harbor Site). The Company and more than 140 other parties have received a "General Notice" of potential liability from the EPA relating to the Portland Harbor Site. The letter advised the Company that it may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including the Company (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities did not sign such consent, but nevertheless contributed financially to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over $110 million during a 17-year period. The Company bore a percentage of the total costs incurred by the LWG in connection with the investigation. The Company’s aggregate expenditure during the 17-year period was not material. Some or all of any such outlay may be recoverable from other responsible parties. The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated. Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, entered into a non-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor Site. Approximately 110 additional parties signed tolling agreements related to such allocations. On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 14, 2022. The EPA's January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA typically expects its cost estimates to be accurate within a range of -30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data collected over a 2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of the Portland Property as well as upstream and downstream of the facility. It also includes a portion of the Company’s riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit. The EPA's ROD concluded that more data was needed to better define clean-up scope and cost. On December 8, 2017, the EPA announced that Portland Harbor is one of 21 Superfund sites targeted for greater attention. On December 19, 2017, the EPA announced that it had entered a new AOC with a group of four potentially responsible parties to conduct additional sampling during 2018 and 2019 to provide more certainty about clean-up costs and aid the mediation process to allocate those costs. The parties to the mediation, including the Company, agreed to help fund the additional sampling, which is now complete. The EPA requested that potentially responsible parties enter AOCs during 2019 agreeing to conduct remedial design studies. Some parties have signed AOCs, including one party with respect to RM9W which includes the area offshore of the Company’s manufacturing facility. The Company has not signed an AOC in connection with remedial design, but will potentially be directly or indirectly responsible for conducting or funding a portion of such RM9W remedial design. The allocation process is continuing in parallel with the process to define the remedial design. The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA's selected cleanup remedy will be determined at an unspecified later date. Based on the investigation to date, the Company believes that it did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to its property precedes the Company’s ownership of the Portland Property. Because these environmental investigations are still underway, sufficient information is currently not available to determine the Company’s liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, the Company may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources. In addition, the Company may be required to perform periodic maintenance dredging in order to continue to launch vessels from its launch ways in Portland, Oregon, on the Willamette River, and the river's classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect the Company’s business and Consolidated Financial Statements, or the value of the Portland Property. On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including the Company as well as the U.S. and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et al., U.S. Court for the District of Oregon Case No. 3i17-CV-00164-SB. The complaint does not specify the amount of damages the plaintiff will seek. The case has been stayed until January 14, 2022. Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations The Company entered into a Voluntary Cleanup Agreement with the Oregon Department of Environmental Quality (DEQ) in which the Company agreed to conduct an investigation of whether, and to what extent, past or present operations at the Portland Property may have released hazardous substances into the environment. The Company has also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and the Company is discussing with the DEQ potential remedial actions which may be required. The Company’s aggregate expenditure has not been material, however it could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties. Other Litigation, Commitments and Contingencies In connection with the acquisition of the manufacturing business of American Railcar Industries, Inc. (ARI), the Company agreed to assume potential legacy liabilities (known and unknown) related to railcars manufactured by ARI. Among these potential liabilities are certain retrofit and repair obligations arising from regulatory actions by the Federal Railroad Administration and the Association of American Railroads. In some cases, the seller shares with the Company the costs of these retrofit and repair obligations. The Company currently is not able to determine if any of these liabilities will have a material adverse impact on the Company’s Consolidated Financial Statements. From time to time, Greenbrier is involved as a defendant in litigation in the ordinary course of business, the outcomes of which cannot be predicted with certainty. While the ultimate outcome of such legal proceedings cannot be determined at this time, the Company believes that the resolution of pending litigation will not have a material adverse effect on the Company's Consolidated Financial Statements. As of February 28, 2021, the Company had outstanding letters of credit aggregating to $27.9 million associated with performance guarantees, facility leases and workers compensation insurance. |
Fair Value Measures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measures |
Note 15 – Fair Value Measures Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value, for this disclosure, is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical instruments; Level 2 - inputs, other than the quoted market prices in active markets for similar instruments, which are observable, either directly or indirectly; and Level 3 - unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value on a recurring basis as of February 28, 2021 were:
Assets and liabilities measured at fair value on a recurring basis as of August 31, 2020 were:
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Related Party Transactions |
6 Months Ended |
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Feb. 28, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions |
Note 16 – Related Party Transactions The Company has a 41.9% interest in Axis, LLC (Axis), a joint venture. The Company purchased $2.2 million and $6.0 million for the three and six months ended February 28, 2021, respectively and $3.2 million and $7.2 million for the three and six months ended February 29, 2020, respectively of railcar components from Axis. The Company has a 40% interest in the common equity of an entity that buys and sells railcar assets that are leased to third parties. As of February 28, 2021, the carrying amount of the investment was $3.6 million which is classified in Investment in unconsolidated affiliates in the Consolidated Balance Sheet. There were no sales to or from this entity during the six months ended February 28, 2021 and February 29, 2020. The Company also provides administrative and remarketing services to this entity and earns management fees for these services which were immaterial for the three and six months ended February 28, 2021 and February 29, 2020. |
Revenue Recognition (Tables) |
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Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue From Contract With Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contract Balances |
The contract balances are as follows:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Estimated Revenue Related to Performance Obligations Wholly or Partially Unsatisfied | The following table outlines estimated revenue related to performance obligations wholly or partially unsatisfied, that the Company anticipates will be recognized in future periods.
|
Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventories |
Inventories are valued at the lower of cost or net realizable value using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit. The following table summarizes the Company’s inventory balance:
|
Intangibles and Other Assets, net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Identifiable Intangible and Other Assets |
The following table summarizes the Company’s identifiable intangible and other assets balance:
|
Accounts Payable and Accrued Liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables And Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities |
|
Warranty Accruals (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees And Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Accrual Activity |
Warranty accrual activity:
|
Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss, Net of Tax |
Accumulated other comprehensive loss, net of tax effect as appropriate, consisted of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts Reclassified out of Accumulated Other Comprehensive Loss |
The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Operations, with financial statement caption, were as follows:
|
Earnings (Loss) Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Shares Used in Computation of Basic and Diluted Earnings (Loss) Per Common Share |
The shares used in the computation of basic and diluted earnings (loss) per common share are reconciled as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Approach to Calculate Diluted Earning (Loss) per Share |
|
Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments |
Fair Values of Derivative Instruments
|
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Effect of Derivative Instruments on the Statements of Operations |
The Effect of Derivative Instruments on the Statements of Operations Three Months Ended February 28, 2021 and February 29, 2020
Six Months Ended February 28, 2021 and February 29, 2020
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Effects of Cash Flow Hedges Included in Statements of Operations |
The following table presents the amounts in the Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded and the effects of the cash flow hedge activity on these line items for the three months ended February 28, 2021 and February 29, 2020:
|
Segment Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments Internal Financial Reports |
The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes. For the three months ended February 28, 2021:
For the six months ended February 28, 2021:
For the three months ended February 29, 2020:
For the six months ended February 29, 2020:
|
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Reconciliation of Earnings (Loss) from Operations to Earnings (Loss) Before Income Tax and Earnings (Loss) from Unconsolidated Affiliates |
Reconciliation of Earnings (loss) from operations to Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates:
|
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Minimum Future Amounts Receivable Under All Non-Cancelable Operating Leases and Subleases |
Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases at February 28, 2021, will mature as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Operating Lease Costs |
The components of operating lease costs were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Minimum Future Amounts Payable Under Operating Leases |
Aggregate minimum future amounts payable under operating leases having initial or remaining non-cancelable terms at February 28, 2021 will mature as follows:
|
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Additional Information Related to Company's Leases |
The table below presents additional information related to the Company’s leases:
|
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Supplemental Cash Flow Information Related to Leases |
Supplemental cash flow information related to leases were as follows:
|
Fair Value Measures (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis |
Assets and liabilities measured at fair value on a recurring basis as of February 28, 2021 were:
Assets and liabilities measured at fair value on a recurring basis as of August 31, 2020 were:
|
Interim Financial Statements - Additional Information (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
Sep. 01, 2020 |
Aug. 31, 2020 |
---|---|---|---|
Equity Class Of Treasury Stock [Line Items] | |||
Retained earnings | $ 848,192 | $ 885,460 | |
ASU 2016-13 | |||
Equity Class Of Treasury Stock [Line Items] | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Sep. 01, 2020 | ||
ASU 2016-13 | Cumulative Effect Adjustment Due to Adoption | |||
Equity Class Of Treasury Stock [Line Items] | |||
Retained earnings | $ (500) |
Revenue Recognition - Summary of Contract Balances (Detail) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2021 |
Aug. 31, 2020 |
|||
Contract With Customer Asset And Liability [Line Items] | ||||
Contract liabilities | [1] | $ 34,824 | $ 27,009 | |
Change in contract liabilities | [1] | 7,815 | ||
Accounts Receivable, Net | ||||
Contract With Customer Asset And Liability [Line Items] | ||||
Contract assets | 26,954 | 430 | ||
Change in contract assets | 26,524 | |||
Inventories | ||||
Contract With Customer Asset And Liability [Line Items] | ||||
Contract assets | 9,137 | $ 7,081 | ||
Change in contract assets | $ 2,056 | |||
|
Revenue Recognition - Additional information (Detail) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Feb. 28, 2021
USD ($)
|
Feb. 28, 2021
USD ($)
|
|
Revenue From Contract With Customers [Line Items] | ||
Revenue recognized from contract with customers liability | $ 2.9 | $ 5.6 |
Railcar sales | ||
Revenue From Contract With Customers [Line Items] | ||
Expected revenue recognized in the reminder of fiscal year | 600.0 | 600.0 |
Services | ||
Revenue From Contract With Customers [Line Items] | ||
Expected revenue recognized in the reminder of fiscal year | $ 129.7 | $ 129.7 |
Expected performance percentage | 48.00% | 48.00% |
Revenue Recognition - Summary of Estimated Revenue Related to Performance Obligations (Detail) $ in Millions |
Feb. 28, 2021
USD ($)
|
|||
---|---|---|---|---|
Railcar sales | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Revenue type 1 | $ 600.0 | |||
Services | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Revenue type 1 | 129.7 | |||
Other | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Revenue type 1 | 61.5 | |||
Manufacturing | Railcar sales | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Revenue type 1 | 2,125.1 | |||
Manufacturing | Marine | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Revenue type 1 | 53.3 | |||
Manufacturing | Railcars for Syndication | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Revenue type 1 | $ 229.3 | [1] | ||
|
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
Aug. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Manufacturing supplies and raw materials | $ 291,698 | $ 263,080 |
Work-in-process | 104,467 | 116,909 |
Finished goods | 148,008 | 173,761 |
Excess and obsolete adjustment | (21,189) | (24,221) |
Inventories | $ 522,984 | $ 529,529 |
Intangibles and Other Assets, Net - Identifiable Intangible and Other Assets (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
Aug. 31, 2020 |
---|---|---|
Intangibles and Other Assets by Major Class [Line Items] | ||
Finite-Lived Intangible Assets, Net, Total | $ 57,290 | $ 60,416 |
Intangible assets not subject to amortization | 2,473 | 2,474 |
Prepaid and other assets | 21,939 | 22,026 |
Operating lease ROU assets | 55,868 | 62,389 |
Nonqualified savings plan investments | 44,150 | 35,744 |
Revolving notes issuance costs, net | 3,150 | 3,623 |
Assets held for sale | 5,413 | 3,650 |
Total Intangible and other assets, net | 190,283 | 190,322 |
Customer Relationships | ||
Intangibles and Other Assets by Major Class [Line Items] | ||
Finite lived intangible assets gross | 89,722 | 89,722 |
Accumulated amortization | (60,328) | (56,509) |
Other Intangible Assets | ||
Intangibles and Other Assets by Major Class [Line Items] | ||
Finite lived intangible assets gross | 39,090 | 37,798 |
Accumulated amortization | $ (11,194) | $ (10,595) |
Intangibles and Other Assets, Net - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2.9 | $ 2.7 | $ 5.7 | $ 5.5 |
Future amortization expense, 2021 | 11.5 | 11.5 | ||
Future amortization expense, 2022 | 8.1 | 8.1 | ||
Future amortization expense, 2023 | 6.8 | 6.8 | ||
Future amortization expense, 2024 | 6.6 | 6.6 | ||
Future amortization expense, 2025 | $ 5.7 | $ 5.7 |
Accounts Payable and Accrued Liabilities - Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
Nov. 30, 2020 |
Aug. 31, 2020 |
Feb. 29, 2020 |
Nov. 30, 2019 |
Aug. 31, 2019 |
---|---|---|---|---|---|---|
Payables And Accruals [Abstract] | ||||||
Trade payables | $ 146,017 | $ 148,971 | ||||
Other accrued liabilities | 104,604 | 100,168 | ||||
Operating lease liabilities | 58,162 | 64,509 | ||||
Accrued payroll and related liabilities | 97,099 | 105,008 | ||||
Accrued warranty | 42,689 | $ 45,620 | 45,224 | $ 46,850 | $ 47,110 | $ 46,678 |
Accounts payable and accrued liabilities | $ 448,571 | $ 463,880 |
Warranty Accruals - Warranty Accrual Activity (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Guarantees And Product Warranties [Abstract] | ||||
Balance at beginning of period | $ 45,620 | $ 47,110 | $ 45,224 | $ 46,678 |
Charged to cost of revenue, net | (603) | 884 | 1,351 | 3,262 |
Payments | (2,429) | (1,136) | (3,844) | (3,135) |
Currency translation effect | 101 | (8) | (42) | 45 |
Balance at end of period | $ 42,689 | $ 46,850 | $ 42,689 | $ 46,850 |
Earnings (Loss) Per Share - Reconciliation of Shares Used in Computation of Basic and Diluted Earnings (Loss) Per Common Share (Detail) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|||||||||||
Earnings Per Share Disclosure [Line Items] | ||||||||||||||
Weighted average basic common shares outstanding | [1] | 32,810 | 32,661 | 32,766 | 32,645 | |||||||||
Dilutive effect of restricted stock units | [2],[3] | 821 | 737 | |||||||||||
Weighted average diluted common shares outstanding | 32,810 | 33,482 | 32,766 | 33,382 | ||||||||||
2.875% Convertible Senior Notes | ||||||||||||||
Earnings Per Share Disclosure [Line Items] | ||||||||||||||
Dilutive effect of convertible notes | [3],[4] | 0 | 0 | 0 | 0 | |||||||||
2.25% Convertible Senior Notes | ||||||||||||||
Earnings Per Share Disclosure [Line Items] | ||||||||||||||
Dilutive effect of convertible notes | [3],[5] | 0 | 0 | 0 | 0 | |||||||||
|
Earnings (Loss) Per Share - Reconciliation of Shares Used in Computation of Basic and Diluted Earnings (Loss) Per Common Share (Parenthetical) (Detail) |
Feb. 28, 2021 |
Feb. 29, 2020 |
---|---|---|
2.875% Convertible Senior Notes | ||
Earnings Per Share Disclosure [Line Items] | ||
Debt instrument, interest rate | 2.875% | |
2.25% Convertible Senior Notes | ||
Earnings Per Share Disclosure [Line Items] | ||
Debt instrument, interest rate | 2.25% | 2.25% |
Earnings (Loss) Per Share - Additional Information (Detail) |
Feb. 28, 2021 |
Feb. 29, 2020 |
---|---|---|
2.875% Convertible Senior Notes | ||
Earnings Per Share Disclosure [Line Items] | ||
Debt instrument, interest rate | 2.875% | |
2.25% Convertible Senior Notes | ||
Earnings Per Share Disclosure [Line Items] | ||
Debt instrument, interest rate | 2.25% | 2.25% |
Earnings (Loss) Per Share - Approach to Calculate Diluted Earning (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Earnings Per Share [Abstract] | ||||
Net earnings (loss) attributable to Greenbrier | $ (9,065) | $ 13,629 | $ (19,037) | $ 21,298 |
Weighted average diluted common shares outstanding | 32,810 | 33,482 | 32,766 | 33,382 |
Diluted earnings (loss) per common share | $ (0.28) | $ 0.41 | $ (0.58) | $ 0.64 |
Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Stock based compensation expense | $ 4,500 | $ 4,100 | $ 8,951 | $ 7,237 |
Derivative Instruments - Additional Information (Detail) |
6 Months Ended |
---|---|
Feb. 28, 2021
USD ($)
| |
Foreign Exchange Contracts | |
Derivative [Line Items] | |
Aggregate derivative notional amount | $ 199,900,000 |
Amount reclassified to revenue or cost of revenue in the next year | 1,000,000.0 |
Interest rate swap contracts | |
Derivative [Line Items] | |
Unrealized pre-tax gain (loss) that would be reclassified to interest expense in the next year | 5,000,000.0 |
Interest rate swap contracts | Derivatives maturing on September 2023 | |
Derivative [Line Items] | |
Aggregate derivative notional amount | $ 103,600,000 |
Maturity date | 2023-09 |
Interest rate swap contracts | Derivatives maturing on June 2024 | |
Derivative [Line Items] | |
Aggregate derivative notional amount | $ 140,600,000 |
Maturity date | 2024-06 |
Derivative Instruments - Effects of Cash Flow Hedges Included in Statements of Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Derivative [Line Items] | ||||
Revenue | $ 295,622 | $ 623,848 | $ 698,611 | $ 1,393,207 |
Cost of revenue | 277,951 | 537,512 | 640,269 | 1,214,682 |
Interest and foreign exchange | 9,568 | 12,609 | 20,671 | 25,461 |
Sales | ||||
Derivative [Line Items] | ||||
Amount of gain (loss) on cash flow hedge activity | (377) | 67 | (623) | (99) |
Cost of Sales | ||||
Derivative [Line Items] | ||||
Amount of gain (loss) on cash flow hedge activity | (8) | 73 | (49) | (2) |
Interest and Foreign Exchange | ||||
Derivative [Line Items] | ||||
Amount of gain (loss) on cash flow hedge activity | $ (1,263) | $ (369) | $ (2,594) | $ (536) |
Segment Information - Additional Information (Detail) |
6 Months Ended |
---|---|
Feb. 28, 2021
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Reconciliation of Earnings (Loss) from Operations to Earnings (Loss) Before Income Tax and Earnings (Loss) from Unconsolidated Affiliates (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Segment Reporting [Abstract] | ||||
Earnings (loss) from operations | $ (25,727) | $ 38,436 | $ (27,841) | $ 80,220 |
Interest and foreign exchange | 9,568 | 12,609 | 20,671 | 25,461 |
Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates | $ (35,295) | $ 25,827 | $ (48,512) | $ 54,759 |
Leases - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
Aug. 31, 2020 |
|
Lessor and Lessee, Lease, Description [Line Items] | |||||
Operating lease rental revenues | $ 12.3 | $ 9.8 | $ 24.1 | $ 21.2 | |
Finance lease option to extend | options to extend up to 15 years | ||||
Car Hire Utilization Arrangements | |||||
Lessor and Lessee, Lease, Description [Line Items] | |||||
Operating lease rental revenues | 3.8 | 2.8 | $ 7.4 | 6.5 | |
Minimum | |||||
Lessor and Lessee, Lease, Description [Line Items] | |||||
Sublease period | 1 year | ||||
Financing lease remaining lease term | 1 year | ||||
Maximum | |||||
Lessor and Lessee, Lease, Description [Line Items] | |||||
Sublease period | 15 years | ||||
Financing lease remaining lease term | 77 years | ||||
Equipment on Operating Lease | |||||
Lessor and Lessee, Lease, Description [Line Items] | |||||
Accumulated depreciation | 33.6 | $ 33.6 | $ 33.4 | ||
Depreciation expense | $ 3.2 | $ 3.0 | $ 6.8 | $ 6.6 |
Leases - Aggregate Minimum Future Amounts Receivable Under All Non-Cancelable Operating Leases and Subleases (Detail) $ in Thousands |
Feb. 28, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
Remaining six months of 2021 | $ 17,049 |
2022 | 30,183 |
2023 | 25,421 |
2024 | 22,777 |
2025 | 12,638 |
Thereafter | 27,870 |
Operating Leases, Future Minimum Payments Receivable, Total | $ 135,938 |
Leases - Components of Operating Lease Costs (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 3,625 | $ 3,424 | $ 7,493 | $ 6,850 |
Short-term lease expense | 1,280 | 3,217 | 2,586 | 4,730 |
Total | $ 4,905 | $ 6,641 | $ 10,079 | $ 11,580 |
Leases - Aggregate Minimum Future Amounts Payable Under Operating Leases (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
Aug. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Remaining six months of 2021 | $ 6,492 | |
2022 | 12,414 | |
2023 | 11,983 | |
2024 | 10,848 | |
2025 | 6,324 | |
Thereafter | 17,409 | |
Total lease payments | 65,470 | |
Less: Imputed interest | (7,308) | |
Total lease obligations | $ 58,162 | $ 64,509 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accounts payable and accrued liabilities |
Leases - Additional Information Related to Company's Leases (Detail) |
Feb. 28, 2021 |
---|---|
Leases [Abstract] | |
Weighted average remaining lease term | 11 years 6 months |
Weighted average discount rate | 3.20% |
Leases - Supplemental Cash Flow Information Related to Leases (Detail) $ in Thousands |
6 Months Ended |
---|---|
Feb. 28, 2021
USD ($)
| |
Cash Flow Operating Activities Lessee [Abstract] | |
Operating cash flows from operating leases | $ 7,327 |
ROU assets obtained in exchange for new operating lease liabilities | $ 30 |
Commitments and Contingencies - Additional Information (Detail) |
204 Months Ended | ||
---|---|---|---|
Jan. 06, 2017
USD ($)
Segment
|
Dec. 31, 2016
USD ($)
|
Feb. 28, 2021
USD ($)
|
|
Commitments and Contingencies Disclosure [Line Items] | |||
Remedial investigation and feasibility study | $ 110,000,000 | ||
Performance Guarantee | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Letter of credit facility outstanding amount | $ 27,900,000 | ||
Portland Harbor Site | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Number of sediment decision units | Segment | 13 | ||
Estimated undiscounted cost | $ 1,700,000,000 | ||
Period for remedial action | 13 years | ||
Period for monitoring | 30 years | ||
New data collection period to reflect actual cost prior to final remedy design | 2 years | ||
Portland Harbor Site | Minimum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Accuracy of cost estimate | (30.00%) | ||
Portland Harbor Site | Maximum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Accuracy of cost estimate | 50.00% |
Related Party Transactions - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Related Party Transaction [Line Items] | ||||
Carrying amount of investment in unconsolidated affiliates | $ 3,600,000 | $ 3,600,000 | ||
Axis LLC | ||||
Related Party Transaction [Line Items] | ||||
Percentage of ownership in entity | 41.90% | 41.90% | ||
Axis LLC | Railcar Components | ||||
Related Party Transaction [Line Items] | ||||
Purchases of goods from related party | $ 2,200,000 | $ 3,200,000 | $ 6,000,000.0 | $ 7,200,000 |
Greenbrier | ||||
Related Party Transaction [Line Items] | ||||
Percentage of ownership in entity | 40.00% | 40.00% | ||
Greenbrier | Leasing Warehouse | ||||
Related Party Transaction [Line Items] | ||||
Revenue recognize from railcars sold | $ 0 | $ 0 |
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