Fourth Quarter Highlights

  • Revenue for the quarter of $611.4 million increased 39% from quarter ended May 31, 2017 reflecting higher deliveries.
  • Net earnings attributable to Greenbrier for the quarter were $23.7 million, or $0.75 per diluted share, and include a $3.5 million ($0.11 per share) impact associated with a goodwill impairment charge recorded by GBW.
  • Adjusted net earnings attributable to Greenbrier for the quarter were $27.3 million, or $0.86 per diluted share.
  • Adjusted EBITDA for the quarter was $73.3 million, or 12.0% of revenue.
  • New railcar deliveries totaled 5,500 units for the quarter.
  • Diversified orders of 2,500 railcars were received during the quarter, valued at $200 million.  In September, orders for another 1,400 units were received, valued at $120 million.
  • New railcar backlog as of August 31, 2017 was 28,600 units with an estimated value of $2.80 billion.
  • Board increases the quarterly dividend to $0.23 per share, payable on December 6, 2017 to shareholders of record as of November 15, 2017.
  • Board extends share repurchase authorization to March 2019.

Fiscal Year 2017 Highlights

  • Net earnings attributable to Greenbrier for the year were $116.1 million, or $3.65 per diluted share, and include a $3.5 million ($0.11 per share) impact associated with a goodwill impairment charge recorded by GBW.
  • Adjusted net earnings attributable to Greenbrier for the year were $119.6 million, or $3.76 per diluted share, on revenue of $2.17 billion.
  • Adjusted EBITDA for the year was $317.3 million, or 14.6% of revenue.
  • New railcar deliveries totaled 16,000 units for the year.
  • Orders for the year exceeded 16,500 units valued at over $1.5 billion across a broad range of railcar types.
  • Cash provided by operating activities exceeded $280 million for the year.

William A. Furman, Chairman and CEO, said, “Greenbrier delivered strong results for the fourth quarter and fiscal 2017.  This positive financial performance was achieved by successfully executing on Greenbrier’s strategy to foster and grow its North American business, while simultaneously expanding to global markets.  Greenbrier’s earnings exceeded our guidance range for fiscal 2017.  Aggregate gross margin for the year remained healthy at 19.4%. Operationally, in a competitive North American freight railcar market, Greenbrier added market share during fiscal 2017, receiving orders exceeding 16,500 railcars valued at $1.5 billion – about double the number and value of railcar orders received in fiscal 2016.  Management services added approximately 70,000 railcars to its managed fleet in the year and an additional 15,000 railcars post quarter end. Greenbrier now provides management services for over 20% of the North American fleet.” 

Furman continued, “Financially, we ended the year with a strong balance sheet and liquidity.  The Board of Directors increased the quarterly dividend by 4.5% to $0.23 per share or an annualized rate of $0.92.  We extended share repurchase authorization through March 2019, and improved the capital efficiency of Greenbrier through a newly formed lease warehouse facility.  Greenbrier’s approach to capital deployment will continue to balance investing in internal projects, funding strategic growth, and returning capital to shareholders.”

Furman concluded, “The past year was transformative for Greenbrier, as we diversified our business with increased investments in Europe, Brazil and in the Gulf Cooperation Council region.  Greenbrier will advance its international agenda further in fiscal 2018.  Greenbrier’s backlog of over 28,600 units valued at $2.8 billion is higher now than at the beginning of fiscal 2017, providing visibility into fiscal 2018 and beyond. Backlog spans almost all railcar types and has grown both internationally and domestically.  As we grow Greenbrier’s core North American business and see a larger contribution from international operations, we expect more deliveries to produce greater revenue and higher EPS in fiscal 2018 compared to fiscal 2017.”

Business Outlook

Based on current business trends, industry forecasts and production schedules for fiscal 2018, Greenbrier believes:

  • Deliveries will be 20,000 – 22,000 units including Greenbrier-Maxion (Brazil) which will account for up to 10% of deliveries
  • Revenue will be $2.4$2.6 billion
  • Diluted EPS of up to $4.00

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

Financial Summary

Q4 FY17

Q3 FY17

Sequential Comparison – Main Drivers

Revenue

$611.4M

$439.2M

Up 39.2% primarily due to higher volume of deliveries

Gross margin

16.3%

20.4%

Down 410 bps primarily due to product mix changes

Selling and

administrative expense

$47.1M

$42.8M

Up 10.0% primarily due to expanded European operations and higher legal and consulting related to strategic initiatives

Net gain on disposition

of equipment

($4.9M)

($1.6M)

Increase primarily reflects insurance recovery proceeds from prior losses

Adjusted EBITDA

$73.3M

$63.8M

Higher revenue and margin

Interest and foreign

exchange

$8.9M

$7.9M

Increase driven by higher European borrowings associated with expanded operations

Effective tax rate

20.7%

21.3%

Reflects a change in the geographic mix of earnings and cumulative adjustments due to slightly reduced annual rate of 27.1%

Loss from

unconsolidated affiliates

($6.5M) (1)

($0.7M)

Net (earnings) loss

attributable

to noncontrolling interest

($8.5M)

$1.6M

Driven by higher deliveries and timing of railcar syndications at our GIMSA JV

Adjusted Net earnings attributable to Greenbrier

$27.3M

$32.8M

Better than internal expectations

Adjusted Diluted EPS

$0.86

$1.03

(1) Includes $3.5 million, net of tax, or $0.11 per share, impact associated with a non-cash goodwill impairment charge recorded by GBW.

Segment Summary

Q4 FY17

Q3 FY17

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$508.5M

$317.1M

Up 60.4% due to higher deliveries

  Gross margin

16.3%

22.7%

Down 640 bps primarily due to a change in product mix

  Operating margin (1)

13.5%

18.3%

  Deliveries

5,200

2,600

Wheels & Parts

  Revenue

$75.1M

$85.2M

Down 11.9% primarily attributable to lower wheel and component volumes and scrap sales

  Gross margin

7.0%

8.5%

Down 150 bps primarily due to lower volumes, change in product mix and continued challenging operating environment

  Operating margin (1)

3.0%

5.0%

Leasing & Services

  Revenue

$27.8M

$36.8M

Down 24.5% due to lower volume of externally sourced railcar syndications

  Gross margin

42.1%

28.7%

Up due to more normalized mix of revenue

  Operating margin (1) (2)

27.2%

19.2%

  Lease fleet utilization

92.1%

93.6%

(1) See supplemental segment information on page 12 for additional information.

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

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter 2017 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • October 27, 2017
  • 8:00 a.m. Pacific Daylight Time
  • Phone: 1-630-395-0143, Password: “Greenbrier”
  • Real-time Audio Access:  (“Newsroom” at http://www.gbrx.com)

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

About Greenbrier

Greenbrier­­, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland and Romania that serves customers across Europe and in the nations of the GCC. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of wheel services, parts, railcar management & regulatory compliance services and leasing services to railroads and related transportation industries in North America.  Greenbrier offers freight railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership with Watco Companies, LLC. Through other unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of over 8,300 railcars and performs management services for 355,000 railcars. Learn more about Greenbrier at www.gbrx.com.

 “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This press release may contain forward-looking statements, including any statements that are not purely statements of historical fact.  Greenbrier uses words such as “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions to identify forward-looking statements.  These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, reported backlog and awards that are not indicative of Greenbrier’s financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbrier’s indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; policies and priorities of the federal government regarding international trade, taxation and infrastructure; sovereign risk to contracts, exchange rates or property rights; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed Greenbrier’s insurance coverage; train derailments or other accidents or claims that could subject Greenbrier to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other railcar or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings “Risk Factors” and “Forward Looking Statements” in Greenbrier’s Annual Report on Form 10-K for the fiscal year ended August 31, 2016 and Greenbrier’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2017, and Greenbrier’s other reports on file with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof.  Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

   August 31,

       2017

     May 31,

        2017

 February 28,

       2017

November 30,

        2016

   August 31,

       2016

Assets

   Cash and cash equivalents

$      611,466

$    465,413

$    545,752

$    233,790

$   222,679

   Restricted cash

8,892

8,753

8,696

8,642

24,279

   Accounts receivable, net 

279,964

267,830

295,844

237,037

232,517

   Inventories

400,127

414,012

381,439

402,064

365,805

   Leased railcars for syndication

91,272

149,119

98,398

102,686

144,932

   Equipment on operating leases, net

315,941

315,976

298,269

305,586

306,266

   Property, plant and equipment, net

428,021

330,471

325,325

327,170

329,990

   Investment in unconsolidated affiliates

108,255

110,058

90,762

93,330

98,682

   Intangibles and other assets, net

85,177

68,930

68,228

63,780

67,359

   Goodwill

68,590

43,265

43,265

43,265

43,265

$   2,397,705

$ 2,173,827

$ 2,155,978

$ 1,817,350

$1,835,774

Liabilities and Equity

   Revolving notes

$              4,324

$                –

$                –

$                –

$                –

   Accounts payable and accrued liabilities

415,061

339,001

372,321

345,776

369,754

   Deferred income taxes

75,791

80,482

65,589

54,123

51,619

   Deferred revenue

129,260

82,006

85,441

85,358

95,721

   Notes payable, net

558,228

532,638

532,596

300,331

301,853

Contingently redeemable noncontrolling interest              

36,148

   Total equity – Greenbrier

1,018,130

986,221

942,084

880,725

874,311

   Noncontrolling interest

160,763

153,479

157,947

151,037

142,516

   Total equity

1,178,893

1,139,700

1,100,031

1,031,762

1,016,827

$   2,397,705

$ 2,173,827

$ 2,155,978

$ 1,817,350

$ 1,835,774

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

Years Ended August 31,

2017

2016

2015

Revenue

   Manufacturing

$       1,725,188

$       2,096,331

$       2,136,051

   Wheels & Parts

312,679

322,395

371,237

   Leasing & Services

131,297

260,798

97,990

2,169,164

2,679,524

2,605,278

Cost of revenue

   Manufacturing

1,373,967

1,630,554

1,691,414

   Wheels & Parts

288,336

293,751

334,680

   Leasing & Services

85,562

203,782

41,831

1,747,865

2,128,087

2,067,925

Margin

421,299

551,437

537,353

Selling and administrative

170,607

158,681

151,791

Net gain on disposition of equipment

(9,740)

(15,796)

(1,330)

Earnings from operations

260,432

408,552

386,892

Other costs

Interest and foreign exchange

24,192

13,502

11,179

Earnings before income tax and earnings (loss) from

   unconsolidated affiliates

236,240

395,050

375,713

Income tax expense

(64,014)

(112,322)

(112,160)

Earnings before earnings (loss) from

   unconsolidated affiliates

172,226

282,728

263,553

Earnings (loss) from unconsolidated affiliates

(11,764)

2,096

1,756

Net earnings

160,462

284,824

265,309

Net earnings attributable to noncontrolling interest

(44,395)

(101,611)

(72,477)

Net earnings attributable to Greenbrier

$        116,067

$          183,213

$          192,832

Basic earnings per common share

$              3.97

$                6.28

$                6.85

Diluted earnings per common share

$              3.65

$                5.73

$                5.93

Weighted average common shares

Basic

29,225

29,156

28,151

Diluted

32,562

32,468

33,328

Dividends declared per common share

$              0.86

$                0.81

$                0.60

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

Years Ended August 31,

2017

2016

2015

Cash flows from operating activities:

    Net earnings

$        160,462

$      284,824

$       265,309

    Adjustments to reconcile net earnings to net cash provided by operating activities:

      Deferred income taxes

4,377

(8,935)

(20,151)

      Depreciation and amortization

65,129

63,345

45,156

      Net gain on disposition of equipment

(9,740)

(15,796)

(1,330)

      Stock based compensation expense

26,427

24,037

19,459

      Accretion of debt discount

2,340

      Noncontrolling interest adjustments

(677)

526

17,215

     Other

(845)

560

1,184

      Decrease (increase) in assets:

          Accounts receivable, net

(25,272)

(32,051)

13,652

          Inventories

(2,787)

53,711

(143,849)

          Leased railcars for syndication

41,015

19,154

(90,614)

          Other

17,558

(16,989)

575

    Increase (decrease) in liabilities:

          Accounts payable and accrued liabilities

(30,637)

(91,428)

72,419

          Deferred revenue

33,039

50,712

13,308

    Net cash provided by operating activities

280,389

331,670

192,333

Cash flows from investing activities:

    Acquisitions, net of cash acquired

(27,127)

    Proceeds from sales of assets

24,149

103,715

5,295

    Capital expenditures

(86,065)

(139,013)

(105,989)

    Decrease (increase) in restricted cash

15,387

(15,410)

271

    Investment in and advances to unconsolidated affiliates

(40,632)

(12,855)

(34,453)

    Cash distribution from joint ventures

550

7,855

3,345

    Net cash used in investing activities

(113,738)

(55,708)

(131,531)

Cash flows from financing activities:

    Net changes in revolving notes with maturities of 90 days or less

4,324

(49,000)

49,000

    Proceeds from revolving notes with maturities longer than 90 days

44,451

   Repayments of revolving notes with maturities longer than 90 days

(1,888)

(55,644)

   Proceeds from issuance of notes payable

276,093

    Repayments of notes payable

(8,297)

(22,299)

(7,475)

    Debt issuance costs

(9,082)

(4,161)

    Decrease in restricted cash

11,000

    Repurchase of stock

(33,498)

(69,950)

    Dividends

(24,890)

(23,303)

(16,491)

    Cash distribution to joint venture partner

(28,511)

(95,092)

(20,375)

    Investment by joint venture partner

5,400

    Excess tax benefit from restricted stock awards

2,813

2,908

    Other

(887)

(248)

    Net cash provided by (used in) financing activities

209,637

(221,915)

(62,824)

    Effect of exchange rate changes

12,499

(4,298)

(9,964)

    Increase (decrease) in cash and cash equivalents

388,787

49,749

(11,986)

Cash and cash equivalents

Beginning of period

222,679

172,930

184,916

End of period

$         611,466

$       222,679

$       172,930

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2017 are as follows:

First

Second

Third

Fourth

Total

Revenue

   Manufacturing

$   454,033

$  445,504

$  317,104

$  508,547

$   1,725,188

   Wheels & Parts

69,635

82,714

85,231

75,099

312,679

   Leasing & Services

28,646

38,064

36,826

27,761

131,297

552,314

566,282

439,161

611,407

2,169,164

Cost of revenue

   Manufacturing

356,555

346,653

245,228

425,531

1,373,967

   Wheels & Parts

64,978

75,497

77,985

69,876

288,336

   Leasing & Services

18,030

25,207

26,247

16,078

85,562

439,563

447,357

349,460

511,485

1,747,865

Margin

112,751

118,925

89,701

99,922

421,299

Selling and administrative expense

41,213

39,495

42,810

47,089

170,607

Net gain on disposition of equipment

(1,122)

(2,090)

(1,581)

(4,947)

(9,740)

Earnings from operations

72,660

81,520

48,472

57,780

260,432

Other costs

Interest and foreign exchange

1,724

5,673

7,894

8,901

24,192

Earnings before income tax and loss from
unconsolidated affiliates

70,936

75,847

40,578

48,879

236,240

Income tax expense

(20,386)

(24,858)

(8,656)

(10,114)

(64,014)

Earnings before loss from 

   unconsolidated affiliates

50,550

50,989

31,922

38,765

172,226

Loss from unconsolidated affiliates

(2,584)

(1,988)

(681)

(6,511)

(11,764)

Net earnings

47,966

49,001

31,241

32,254

160,462

Net earnings attributable to

   noncontrolling interest

(23,004)

(14,465)

1,582

(8,508)

(44,395)

Net earnings attributable to Greenbrier

$     24,962

$    34,536

$    32,823

$    23,746

$  116,067

Basic earnings per common share (1)

$        0.86

$       1.19

$        1.12

$        0.81

$        3.97

Diluted earnings per common share (1)

$        0.79

$       1.09

$        1.03

$        0.75

$        3.65

(1)

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

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2016 are as follows:

First

Second

Third

Fourth

Total

Revenue

   Manufacturing

$   698,661

$   454,531

$   458,494

$   484,645

$  2,096,331

   Wheels & Parts

78,729

90,458

78,417

74,791

322,395

   Leasing & Services

24,999

124,090

75,955

35,754

260,798

802,389

669,079

612,866

595,190

2,679,524

Cost of revenue

   Manufacturing

533,033

361,827

352,775

382,919

1,630,554

   Wheels & Parts

73,002

81,388

69,818

69,543

293,751

   Leasing & Services

11,589

105,973

63,175

23,045

203,782

617,624

549,188

485,768

475,507

2,128,087

Margin

184,765

119,891

127,098

119,683

551,437

Selling and administrative expense

36,549

38,244

43,280

40,608

158,681

Net gain on disposition of equipment

(269)

(10,746)

(311)

(4,470)

(15,796)

Earnings from operations

148,485

92,393

84,129

83,545

408,552

Other costs

   Interest and foreign exchange

5,436

1,417

3,712

2,937

13,502

Earnings before income tax and

   earnings (loss) from unconsolidated affiliates

143,049

90,976

80,417

80,608

395,050

Income tax expense

(44,719)

(25,734)

(22,449)

(19,420)

(112,322)

Earnings before earnings (loss) from

   unconsolidated affiliates

98,330

65,242

57,968

61,188

282,728

Earnings (loss) from unconsolidated affiliates

383

974

1,564

(825)

2,096

Net earnings

98,713

66,216

59,532

60,363

284,824

Net earnings attributable to

   noncontrolling interest

(29,280)

(21,348)

(24,180)

(26,803)

(101,611)

Net earnings attributable to Greenbrier

$     69,433

$    44,868

$     35,352

$    33,560

$  183,213

Basic earnings per common share (1)

$         2.36

$        1.54

$        1.22

$        1.15

$       6.28

Diluted earnings per common share (1)

$         2.15

$        1.41

$        1.12

$        1.06

$       5.73

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2026 Convertible Notes, using the treasury stock method and the dilutive effect of shares underlying the 2018 Convertible Notes using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings.

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, unaudited)

Segment Information

Three months ended August 31, 2017:

Revenue

Earnings (loss) from operations

External

Intersegment

  Total

External

Intersegment

Total

Manufacturing

$  508,547

$            –

$  508,547

$   68,723

$            –

$      68,723

Wheels & Parts

75,099

7,468

82,567

2,282

341

2,623

Leasing & Services

27,761

3,772

31,533

7,541

3,497

11,038

Eliminations

(11,240)

(11,240)

(3,838)

(3,838)

Corporate

(20,766)

(20,766)

$  611,407

$            –

$  611,407

$   57,780

$            –

$      57,780

Three months ended May 31, 2017:

Revenue

Earnings (loss) from operations

External

Intersegment

  Total

External

Intersegment

Total

Manufacturing

$  317,104

$    19,291

$  336,395

$   57,901

$     1,022

$      58,923

Wheels & Parts

85,231

8,959

94,190

4,239

839

5,078

Leasing & Services

36,826

595

37,421

7,084

427

7,511

Eliminations

(28,845)

(28,845)

(2,288)

(2,288)

Corporate

(20,752)

(20,752)

$  439,161

$              –

$  439,161

$  48,472

$             –

$     48,472

Total assets

August 31,

May 31,

2017

2017

Manufacturing

$       914,450

$       705,229

Wheels & Parts

236,315

264,308

Leasing & Services

535,323

625,569

Unallocated

711,617

578,721

$    2,397,705

$    2,173,827

The results of operations for GBW, which are shown below, are not reflected in the above tables as the investment is accounted for under the equity method of accounting.

As of and for the

Three Months Ended

August 31,
2017

May 31,
2017

Revenue

$                56,300

$           62,700

Loss from operations

$              (15,400)

$           (5,500)

Total assets

$               206,000

$          218,800

During the fourth quarter of 2017, GBW performed an interim goodwill test as sales and profitability trends declined beyond what was anticipated. As a result, GBW recorded a pre-tax impairment loss of $11.2 million. GBW is accounted for under the equity method of accounting, therefore our share of the non-cash impairment loss recognized by GBW was $3.5 million after-tax ($0.11 per share) and is included as part of Earnings (loss) from unconsolidated affiliates on our Consolidated Statement of Income.

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

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

Reconciliation of Net earnings to Adjusted EBITDA

Three Months Ended

Year Ended

August 31,
2017

May 31,
2017

August 31,
2017

Net earnings

$               32,254

$             31,241

$              160,462

Interest and foreign exchange

8,901

7,894

24,192

Income tax expense

10,114

8,656

64,014

Depreciation and amortization

18,513

16,036

65,129

GBW goodwill impairment

3,522

3,522

Adjusted EBITDA

$               73,304

$               63,827

$              317,319

Three Months
Ended

August 31,

2017

Year

Ended

August 31,
2017

Backlog Activity (units)

Beginning backlog

31,000

27,500

Orders received (1)

2,500

16,600

Astra & Brazil Transfer

100

1,100

Production held as Leased railcars for syndication

(1,100)

(3,450)

Production sold directly to third parties (1)

(3,900)

(13,150)

Ending backlog

28,600

28,600

Delivery Information (units)

Production sold directly to third parties (1)

3,900

13,150

Sales of Leased railcars for syndication

1,600

2,850

Total deliveries

5,500

16,000

(1)

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

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, except per share amounts, unaudited)

Reconciliation of common shares outstanding, adjusted net earnings attributable to Greenbrier and adjusted diluted earnings per share

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

Three Months Ended

Year Ended

August 31,

2017

May 31,

2017

August 31,

2017

Weighted average basic common shares outstanding (1)

29,323

29,348

29,225

Dilutive effect of convertible notes (2)

3,321

3,305

3,295

Dilutive effect of performance awards (3)

58

37

42

Weighted average diluted common shares outstanding

32,702

32,690

32,562

(1)

Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position.

(2)

The dilutive effect of the 2018 Convertible notes are included in the Weighted average diluted common shares outstanding as they were considered dilutive under the “if converted” method as further discussed below.

(3)

Restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, and are included in Weighted average diluted shares outstanding when the company is in a net earnings position.

Diluted earnings per share was calculated using the more dilutive of two approaches.  The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes and performance based restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes issued in March 2011. Under the “if converted method” debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes.

Three Months Ended

Year Ended

August 31,

2017

May 31,

2017

August 31,
2017

Net earnings attributable to Greenbrier

$                23,746

$             32,823

$          116,067

GBW goodwill impairment

3,522

3,522

Adjusted net earnings attributable to Greenbrier

$                27,268

$              32,823

$          119,589

Three Months Ended

Year Ended

August 31,

2017

May 31,

2017

August 31,
2017

Net earnings attributable to Greenbrier

$        23,746

$      32,823

$     116,067

Add back:

Interest and debt issuance costs on the 2018 Convertible notes, net of tax

733

733

2,932

Earnings before interest and debt issuance costs on convertible notes

$        24,479

$      33,556

$     118,999

Weighted average diluted common shares outstanding

32,702

32,690

32,562

Diluted earnings per share

$            0.75

$           1.03

$            3.65

GBW goodwill impairment

0.11

(1)

0.11

(1)

Adjusted diluted earnings per share

$            0.86

$           1.03

$            3.76

(1)

GBW goodwill impairment of $3.5 million, net of tax, divided by weighted average diluted common shares outstanding of 32,702 and 32,562, respectively, for the three and twelve months ended August 31, 2017.

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SOURCE The Greenbrier Companies, Inc. (GBX)

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