Exhibit 99.1

 

News Release

 

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

 

For release: October 30, 2015, 6:00 a.m. EDT		Contact:		Mark Rittenbaum
				Lorie Tekorius
				503-684-7000

Greenbrier Reports Record Fourth Quarter Results

~ Posts EPS of $2.02 ~

~ Expands aggregate gross margin to 22.8% ~

~ Increases quarterly dividend to $0.20 per share~

~ Issues 2016 earnings guidance at $5.65—$6.15 per share ~

Lake Oswego, Oregon, October 30, 2015 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and full year ended August 31, 2015.

Fourth Quarter Highlights

 

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Net earnings attributable to Greenbrier for the quarter were a record $66.9 million, or $2.02 per diluted share, on record revenue of $765.5 million.

 

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Adjusted EBITDA for the quarter was a record $147.6 million, or 19.3% of revenue.

 

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New railcar backlog as of August 31, 2015 was 41,300 units with an estimated value of $4.71 billion (average unit sale price of $114,000), compared to 45,100 units with an estimated value of $4.86 billion (average unit sale price of $108,000) as of May 31, 2015.

 

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Diversified orders for 2,900 new railcars valued at $470 million were received during the quarter.

 

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New railcar deliveries totaled 6,200 units for the quarter, compared to 5,700 units for the quarter ended May 31, 2015.

 

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Marine backlog as of August 31, 2015 was approximately $52 million.

 

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Quarterly dividend increases 33% to $0.20 per share, payable on December 2, 2015 to shareholders of record as of November 11, 2015.

 

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Repurchased 495,952 shares of common stock at a cost of $21.8 million during the quarter, and an additional 490,123 shares at a cost of $17.8 million subsequent to August 31, 2015.

 

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Nearly $145 million of capital returned to shareholders through dividends and share repurchases since October 2013.

 

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Board authorizes $100 million increase to share repurchase program, bringing cumulative repurchase authorizations to $225 million since October 31, 2013.

Fiscal Year 2015 Highlights

 

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Record net earnings were $192.8 million, or $5.93 per diluted share, on revenue of $2.61 billion.

 

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Adjusted EBITDA was a record $433.8 million or 16.7% of revenue.

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  2

 

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Achieved Return on Invested Capital (ROIC) of 23.7%.

 

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New railcar deliveries totaled 21,100 units.

 

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Orders totaled 32,400 units valued at $3.44 billion across a broad range of railcar types.

 

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Cash generated by operating activities was $192.3 million.

Progress on Longer Term Financial Goals

 

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Aggregate gross margin expanded to 22.8%, compared to 20.9% in the prior quarter, reaching the goal of at least 20% gross margin by the second half of fiscal 2016.

 

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We remain on track to reach the goal of at least 25% ROIC for the second half of fiscal 2016. ROIC of 23.7% for fiscal 2015 reflects record operating results tempered by working capital needs associated with higher production and syndication volumes, and planned capital expenditure programs.

 

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Our Net Funded Debt : LTM EBITDA ratio continued to improve to 0.5 times.

William A. Furman, Chairman and CEO, said, “We continued to realize positive operating momentum in the fourth quarter, leading to record revenue, margin and earnings for both the quarter and fiscal year as a whole. We intend to build on this operating momentum, using the strength of our integrated model and our diversified high margin new railcar backlog, some of which stretches into 2020. We expect these factors will lead to another solid year of earnings and free cash flow in fiscal 2016.”

“While recent new railcar order activity has been dampened by broad economic factors, it is too early to determine whether the level of new orders will continue at this muted pace. We are an agile company and, if needed, we are ready to adapt quickly to market conditions. We remain optimistic about the long term fundamentals and drivers of new railcar demand,” Furman continued. “Industry forecasts support this view, with above long-term average levels of new railcar deliveries expected in North America through 2019. Our strategy to diversify our product offerings, create efficient, flexible manufacturing capacity in low-cost facilities, drive more value through our lease syndication model, and increase revenue diversity in international markets, along with our strong balance sheet, positions us well.”

“We are actively expanding our geographic reach and now sell into more global markets than ever before,” Furman added. “Most recently, we announced our entry into markets in the Middle East with an order for 1,200 tank cars from Saudi Railway Company (SAR). Earlier this year, we expanded into South American markets through our investment in a Brazilian railcar manufacturer, now known as Greenbrier-Maxion. Greenbrier’s global growth complements and leverages our engineering expertise and production facilities in Mexico and Poland and at Gunderson, our flagship manufacturing facility in Oregon. Our international activity extends the Greenbrier brand and provides business diversification and growth opportunities over the longer term.”

Furman concluded, “Greenbrier will continue its balanced approach to investing in projects that generate high rates of return, seeking growth opportunities in our core competencies, and returning capital to shareholders.”

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  3

 

Share Repurchases

We repurchased 495,952 shares of common stock at a cost of $21.8 million during the quarter and an additional 490,123 shares at a cost of $17.8 million subsequent to August 31, 2015. Cumulative repurchases since October 31, 2013 aggregate 2,641,662 shares at a cost of $122.5 million. We have $102.5 million remaining available under our cumulative $225 million share repurchase program.

Subsequent Events

Subsequent to quarter end, the Company refinanced its $290 million North American revolving credit facility, with a new five-year $550 million facility. The Company also acquired a diversified portfolio of nearly 4,000 leased railcars previously owned by WLR-Greenbrier Rail Inc. and managed by Greenbrier, with the intent to sell them in the near term to institutional investors. This portfolio acquisition is consistent with the Company’s successful stated strategy to drive more volume through its lease syndication and asset management model.

Business Outlook

Based on current business trends, industry forecasts and production schedules for fiscal 2016, Greenbrier believes:

 

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Deliveries will be approximately 20,000 – 22,500 units

 

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Revenue will exceed $2.8 billion

 

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Diluted EPS will be in the range of $5.65 to $6.15

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

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  4

 

Financial Summary

 

		Q4 FY15				Q3 FY15				Sequential Comparison – Main Drivers
Revenue		$	765.5M			$	714.6M			Up 7.1% primarily due to increased deliveries
Gross margin			22.8	%			20.9	%		Up 190 bps due to favorable product mix and pricing and improved production efficiencies in the manufacturing segment
Selling and administrative expense		$	39.6M			$	45.6M			Down 13.2% primarily due to non-recurring costs in Q3
Gain on disposition of equipment		$	0.4M			$	0.7M			Timing of sales fluctuates and is opportunistic
Adjusted EBITDA		$	147.6M			$	116.3M			Up 26.9% driven by higher deliveries and margin and non-recurring costs in Q3
Effective tax rate			26.9	%			30.7	%		Reflects a change in the geographic mix of earnings and in GIMSA JV earnings
Net earnings attributable to noncontrolling interest		$	31.1M			$	27.5M			Driven by an increase in deliveries and higher margin from our GIMSA JV
Net earnings		$	66.9M			$	42.8M
Diluted EPS		$	2.02			$	1.33

Segment Summary

 

		Q4 FY15				Q3 FY15				Sequential Comparison – Main Drivers
Manufacturing
Revenue		$	657.5M			$	593.4M			Up 10.8% primarily due to higher deliveries
Gross margin			23.0	%			21.5	%		Up 150 bps due to favorable product mix and pricing and improved efficiencies
Operating margin (1)			21.0	%			19.5	%
Deliveries			6,200				5,700
Wheels & Parts
Revenue		$	84.6M			$	97.4M			Down 13.1% primarily attributable to lower wheel and component volumes
Gross margin			10.8	%			8.0	%		Up 280 bps primarily due to an adverse effect of lower scrap metal prices in Q3
Operating margin (1)			7.8	%			5.2	%
Leasing & Services
Revenue		$	23.4M			$	23.8M			Down 1.7% primarily due to a slight decline in management revenue associated with the timing of maintenance activities
Gross margin			62.0	%			58.0	%		Up 400 bps due to higher margin interim rents on leased railcars for syndication
Operating margin (1) (2)			43.6	%			45.4	%
Lease fleet utilization			96.6	%			97.6	%

 

(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.

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  5

 

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter 2015 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:

 

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October 30, 2015

 

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8:00 a.m. Pacific Daylight Time

 

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

 

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

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

About Greenbrier

Greenbrier, (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in our 4 manufacturing facilities in the U.S. and Mexico and marine barges at our U.S. manufacturing facility. Greenbrier also sells reconditioned wheel sets and provides wheel services at 9 locations throughout the U.S. We recondition, manufacture and sell railcar parts at 4 U.S. sites. Greenbrier is a 50/50 joint venture partner with Watco Companies, LLC in GBW Railcar Services, LLC which repairs and refurbishes freight cars at 33 locations across North America, including 12 tank car repair and maintenance facilities certified by the Association of American Railroads. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through our operations in Poland. Greenbrier owns approximately 12,600 railcars, and performs management services for approximately 258,000 railcars.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company’s products and services, available manufacturing capacity, restructuring plans, new railcar delivery volumes and schedules, demand for the Company’s railcar services and parts business, and the Company’s future financial performance. 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 in 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 are not indicative of our financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our 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; 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

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  6

 

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 our insurance coverage; train derailments or other accidents or claims that could subject us to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other rail car or railroad regulation; all as may be discussed in more detail under the headings “Risk Factors” and “Forward Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014, and our 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, we do not assume any obligation to update any forward-looking statements.

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as Net earnings before Interest and foreign exchange, Income tax expense, Depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier. You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, this measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

Annualized ROIC is calculated by taking year to date Earnings from operations, less cash paid for income taxes, net, which is then annualized and divided by the average balance of the sum of the Revolving notes, plus Notes payable, plus Total equity, less cash in excess of $40 million. The average is calculated based on the quarterly ending balances.

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  7

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

 

		August 31, 2015				May 31, 2015				February 28, 2015				November 30, 2014				August 31, 2014
Assets
Cash and cash equivalents		$	172,930			$	122,783			$	145,512			$	118,958			$	184,916
Restricted cash			8,869				8,912				8,722				9,170				20,140
Accounts receivable, net			196,029				214,890				207,488				191,532				199,679
Inventories			445,535				426,655				418,590				372,039				305,656
Leased railcars for syndication			212,534				213,197				198,010				177,221				125,850
Equipment on operating leases, net			255,391				257,962				261,234				264,615				258,848
Property, plant and equipment, net			303,135				285,570				271,977				258,303				243,698
Investment in unconsolidated affiliates			87,270				91,217				71,225				72,342				69,359
Intangibles and other assets, net			65,554				62,664				64,386				61,937				65,757
Goodwill			43,265				43,265				43,265				43,265				43,265
		$	1,790,512			$	1,727,115			$	1,690,409			$	1,569,382			$	1,517,168
Liabilities and Equity
Revolving notes		$	50,888			$	92,507			$	90,563			$	46,527			$	13,081
Accounts payable and accrued liabilities			455,213				405,544				417,844				374,509				383,289
Deferred income taxes			60,657				75,572				77,632				81,808				81,383
Deferred revenue			33,836				24,209				28,287				27,067				20,603
Notes payable			326,429				346,279				441,326				443,303				445,091
Total equity—Greenbrier			732,838				672,396				541,491				519,884				511,390
Noncontrolling interest			130,651				110,608				93,266				76,284				62,331
Total equity			863,489				783,004				634,757				596,168				573,721
		$	1,790,512			$	1,727,115			$	1,690,409			$	1,569,382			$	1,517,168

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  8

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts, unaudited)

 

		Years ending August 31,
		2015				2014				2013
Revenue
Manufacturing		$	2,136,051			$	1,624,916			$	1,215,734
Wheels & Parts			371,237				495,627				469,222
Leasing & Services			97,990				83,419				71,462
			2,605,278				2,203,962				1,756,418
Cost of revenue
Manufacturing			1,691,414				1,374,008				1,082,889
Wheels & Parts			334,680				463,938				431,501
Leasing & Services			41,831				43,796				35,655
			2,067,925				1,881,742				1,550,045
Margin			537,353				322,220				206,373
Selling and administrative			151,791				125,270				103,175
Net gain on disposition of equipment			(1,330	)			(15,039	)			(18,072	)
Gain on contribution to joint venture			—				(29,006	)			—
Goodwill impairment			—				—				76,900
Restructuring charges			—				1,475				2,719
Earnings from operations			386,892				239,520				41,651
Other costs
Interest and foreign exchange			11,179				18,695				22,158
Earnings before income tax and earnings from unconsolidated affiliates			375,713				220,825				19,493
Income tax expense			(112,160	)			(72,401	)			(25,060	)
Earnings (loss) before earnings from unconsolidated affiliates			263,553				148,424				(5,567	)
Earnings from unconsolidated affiliates			1,756				1,355				186
Net earnings (loss)			265,309				149,779				(5,381	)
Net earnings attributable to noncontrolling interest			(72,477	)			(37,860	)			(5,667	)
Net earnings (loss) attributable to Greenbrier		$	192,832			$	111,919			$	(11,048	)
Basic earnings (loss) per common share:		$	6.85			$	3.97			$	(0.41	)
Diluted earnings (loss) per common share:		$	5.93			$	3.44			$	(0.41	)
Weighted average common shares:
Basic			28,151				28,164				26,678
Diluted			33,328				34,209				26,678
Dividends declared per common share		$	0.60			$	0.15			$	—

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  9

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

		Years Ended August 31,
		2015				2014				2013
Cash flows from operating activities:
Net earnings (loss)		$	265,309			$	149,779			$	(5,381	)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Deferred income taxes			(20,151	)			(4,687	)			(9,662	)
Depreciation and amortization			45,156				40,422				41,447
Net gain on disposition of equipment			(1,330	)			(15,039	)			(18,072	)
Accretion of debt discount			—				—				2,455
Stock based compensation expense			19,459				11,285				6,302
Gain on contribution to joint venture			—				(29,006	)			—
Goodwill impairment			—				—				76,900
Noncontrolling interest adjustments			17,215				2,774				(2,144	)
Other			1,184				576				1,089
Decrease (increase) in assets:
Accounts receivable, net			13,652				(23,749	)			(7,323	)
Inventories			(143,849	)			(9,675	)			19,045
Leased railcars for syndication			(90,614	)			(57,779	)			22,881
Other			575				(4,069	)			969
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities			72,419				63,362				(15,429	)
Deferred revenue			13,308				11,713				(8,485	)
Net cash provided by operating activities			192,333				135,907				104,592
Cash flows from investing activities:
Proceeds from sales of assets			5,295				54,235				75,338
Capital expenditures			(105,989	)			(70,227	)			(60,827	)
Decrease (increase) in restricted cash			271				(333	)			(2,530	)
Investment in and advances to unconsolidated affiliates			(34,453	)			(13,753	)			(2,240	)
Other			3,345				—				(3,582	)
Net cash provided by (used in) investing activities			(131,531	)			(30,078	)			6,159
Cash flows from financing activities:
Net changes in revolving notes with maturities of 90 days or less			49,000				—				(16,396	)
Proceeds from revolving notes with maturities longer than 90 days			44,451				37,819				38,177
Repayments of revolving notes with maturities longer than 90 days			(55,644	)			(72,947	)			(34,966	)
Proceeds from issuance of notes payable			—				200,000				2,186
Repayments of notes payable			(7,475	)			(128,797	)			(58,831	)
Debt issuance costs			—				(382	)			—
Decrease (increase) in restricted cash			11,000				(11,000	)			—
Repurchase of stock			(69,950	)			(33,583	)			—
Dividends			(16,491	)			(4,123	)			—
Cash distribution to joint venture partner			(20,375	)			(5,076	)			—
Investment by joint venture partner			—				419				3,206
Excess tax benefit from restricted stock awards			2,908				109				900
Other			(248	)			—				(8	)
Net cash used in financing activities			(62,824	)			(17,561	)			(65,732	)
Effect of exchange rate changes			(9,964	)			(787	)			(1,155	)
Increase (decrease) in cash and cash equivalents			(11,986	)			87,481				43,864
Cash and cash equivalents
Beginning of period			184,916				97,435				53,571
End of period		$	172,930			$	184,916			$	97,435

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  10

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2015 are as follows:

 

		First				Second				Third				Fourth				Total
Revenue
Manufacturing		$	379,949			$	505,241			$	593,376			$	657,485			$	2,136,051
Wheels & Parts			86,624				102,640				97,407				84,566				371,237
Leasing & Services			28,485				22,268				23,823				23,414				97,990
			495,058				630,149				714,606				765,465				2,605,278
Cost of revenue
Manufacturing			316,037				403,227				465,658				506,492				1,691,414
Wheels & Parts			76,872				92,768				89,645				75,395				334,680
Leasing & Services			14,081				8,844				10,017				8,889				41,831
			406,990				504,839				565,320				590,776				2,067,925
Margin			88,068				125,310				149,286				174,689				537,353
Selling and administrative expense			33,729				32,899				45,595				39,568				151,791
Net gain on disposition of equipment			(83	)			(121	)			(720	)			(406	)			(1,330	)
Earnings from operations			54,422				92,532				104,411				135,527				386,892
Other costs
Interest and foreign exchange			3,141				1,929				4,285				1,824				11,179
Earnings before income tax and earnings (loss) from unconsolidated affiliates			51,281				90,603				100,126				133,703				375,713
Income tax expense			(16,054	)			(29,372	)			(30,783	)			(35,951	)			(112,160	)
Earnings (loss) from unconsolidated affiliates			755				(185	)			982				204				1,756
Net earnings			35,982				61,046				70,325				97,956				265,309
Net earnings attributable to noncontrolling interest			(3,196	)			(10,695	)			(27,514	)			(31,072	)			(72,477	)
Net earnings attributable to Greenbrier		$	32,786			$	50,351			$	42,811			$	66,884			$	192,832
Basic earnings per common share (1)		$	1.19			$	1.86			$	1.54			$	2.23			$	6.85
Diluted earnings per common share (1)		$	1.01			$	1.57			$	1.33			$	2.02			$	5.93

 

(1)

Quarterly amounts may 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 and 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.

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  11

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2014 are as follows:

 

		First				Second				Third				Fourth				Total
Revenue
Manufacturing		$	359,473			$	347,755			$	425,583			$	492,105			$	1,624,916
Wheels & Parts			113,401				136,540				140,663				105,023				495,627
Leasing & Services			17,481				17,921				27,039				20,978				83,419
			490,355				502,216				593,285				618,106				2,203,962
Cost of revenue
Manufacturing			311,440				306,572				351,829				404,167				1,374,008
Wheels & Parts			107,975				127,940				129,825				98,198				463,938
Leasing & Services			9,381				9,853				14,856				9,706				43,796
			428,796				444,365				496,510				512,071				1,881,742
Margin			61,559				57,851				96,775				106,035				322,220
Selling and administrative expense			26,109				28,125				34,800				36,236				125,270
Net gain on disposition of equipment			(3,651	)			(5,416	)			(5,619	)			(353	)			(15,039	)
Restructuring charges			879				540				56				—				1,475
Gain on contribution to joint venture			—				—				—				(29,006	)			(29,006	)
Earnings from operations			38,222				34,602				67,538				99,158				239,520
Other costs
Interest and foreign exchange			4,744				4,099				5,437				4,415				18,695
Earnings before income tax and earnings (loss) from unconsolidated affiliates			33,478				30,503				62,101				94,743				220,825
Income tax expense			(10,522	)			(9,883	)			(16,303	)			(35,693	)			(72,401	)
Earnings (loss) from unconsolidated affiliates			41				(67	)			298				1,083				1,355
Net earnings			22,997				20,553				46,096				60,133				149,779
Net earnings attributable to noncontrolling interest			(7,609	)			(4,966	)			(12,508	)			(12,777	)			(37,860	)
Net earnings attributable to Greenbrier		$	15,388			$	15,587			$	33,588			$	47,356			$	111,919
Basic earnings per common share (1)		$	0.54			$	0.55			$	1.20			$	1.69			$	3.97
Diluted earnings per common share (1)		$	0.49			$	0.50			$	1.03			$	1.43			$	3.44

 

(1)

Quarterly amounts may 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.

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  12

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, unaudited)

Segment Information

Three months ended August 31, 2015:

 

		Revenue												Earnings (loss) from operations
		External				Intersegment				Total				External				Intersegment				Total
Manufacturing		$	657,485			$	—			$	657,485			$	138,319			$	—			$	138,319
Wheels & Parts			84,566				6,807				91,373				6,577				585				7,162
Leasing & Services			23,414				19,067				42,481				10,210				19,067				29,277
Eliminations			—				(25,874	)			(25,874	)			—				(19,652	)			(19,652	)
Corporate			—				—				—				(19,579	)			—				(19,579	)
		$	765,465			$	—			$	765,465			$	135,527			$	—			$	135,527

Three months ended May 31, 2015:

 

		Revenue												Earnings (loss) from operations
		External				Intersegment				Total				External				Intersegment				Total
Manufacturing		$	593,376			$	33			$	593,409			$	115,675			$	—			$	115,675
Wheels & Parts			97,407				7,605				105,012				5,078				607				5,685
Leasing & Services			23,823				11,722				35,545				10,824				11,722				22,546
Eliminations			—				(19,360	)			(19,360	)			—				(12,329	)			(12,329	)
Corporate			—				—				—				(27,166	)			—				(27,166	)
		$	714,606			$	—			$	714,606			$	104,411			$	—			$	104,411

 

		Total assets
		August 31,				May 31,
		2015				2015
Manufacturing		$	675,409			$	697,342
Wheels & Parts			291,798				290,363
Leasing & Services			549,073				538,896
Unallocated			274,232				200,514
		$	1,790,512			$	1,727,115

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, 2015				May 31, 2015
Revenue		$	95,200			$	88,800
Earnings from operations		$	300			$	200
Total assets		$	239,900			$	230,100

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  13

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

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

Reconciliation of Net earnings to Adjusted EBITDA

 

		Three Months Ended
		August 31, 2015				May 31, 2015
Net earnings		$	97,956			$	70,325
Interest and foreign exchange			1,824				4,285
Income tax expense			35,951				30,783
Depreciation and amortization			11,898				10,860
Adjusted EBITDA		$	147,629			$	116,253

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as Net earnings before interest and foreign exchange, income tax expense, depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier. You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Adjusted EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

 

		Three Months Ended August 31, 2015				Year Ended August 31, 2015
Backlog Activity (units)
Beginning backlog			45,100				31,500
Orders received			2,900				32,400
Production held as Leased railcars for syndication			(2,700	)			(8,200	)
Production sold directly to third parties			(4,000	)			(14,400	)
Ending backlog			41,300				41,300
Delivery Information (units)
Production sold directly to third parties			4,000				14,400
Sales of Leased railcars for syndication			2,200				6,700
Total deliveries			6,200				21,100

 

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Greenbrier Reports Record Fourth Quarter Results . . . (Cont.)		Page  14

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Reconciliation of common shares outstanding and 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
		August 31, 2015				May 31, 2015
Weighted average basic common shares outstanding (1)			30,040				27,842
Dilutive effect of convertible notes (2)			3,192				5,158
Dilutive effect of performance awards (3)			165				—
Weighted average diluted common shares outstanding			33,397				33,000

 

(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. The dilutive effect of the 2026 Convertible notes are included in the Weighted average diluted common shares outstanding as the average stock price during the period exceeded the conversion price of $48.05.

(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 2026 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
		August 31, 2015				May 31, 2015
Net earnings attributable to Greenbrier		$	66,884			$	42,811
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax			744				1,234
Earnings before interest and debt issuance costs on convertible notes		$	67,628			$	44,045
Weighted average diluted common shares outstanding			33,397				33,000
Diluted earnings per share		$	2.02			$	1.33

 

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