PR Newswire | Oct 23, 2020 06:01AM EDT

10/23 05:00 CDT

Greenbrier Reports Fourth Quarter and 2020 Fiscal Year Results~ Operating cash flow of $183 million in the quarter and $272 million in the full year~~ Orders for 2,800 railcars valued at approximately $250 million in the quarter~~ Backlog of ~$2.4 billion; resized production footprint aligns with market 0020 LAKE OSWEGO, Ore., Oct. 23, 2020

LAKE OSWEGO, Ore., Oct. 23, 2020 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) ("Greenbrier"), a leading international supplier of equipment and services to global freight transportation markets, today reported financial results for its fourth fiscal quarter and year ended August 31, 2020.

Fourth Quarter Highlights

* Liquidity of $919.6 million, including $833.7 million in cash and $85.9 million of available borrowing capacity. Combined with nearly $200 million of additional initiatives in progress, exceeded the $1 billion liquidity and cost savings target. * Generated operating cash flow of $183.2 million in the quarter primarily driven by decreases in working capital and from syndication activity. * Diversified new railcar backlog as of August 31, 2020 was 24,600 units with an estimated value of $2.4 billion, including orders for 2,800 railcars valued at approximately $250.0 million received during the quarter. Deliveries in the quarter were 5,100 units. * Net loss attributable to Greenbrier for the quarter was $0.1 million, or $0.00 per diluted share, on revenue of $636.4 million. Net loss includes $1.9 million, net of tax, ($0.06 per share) of integration related expenses from the American Railcar Industries (ARI) acquisition and $3.6 million, net of tax and noncontrolling interest, ($0.10 per share) of severance expenses. * Adjusted net earnings attributable to Greenbrier for the quarter were $5.5 million, or $0.16 per diluted share, excluding $5.5 million, net of tax, ($0.16 per share) of integration and severance expenses. * Adjusted EBITDA for the quarter was $55.7 million, or 8.7% of revenue. * Board declares a quarterly dividend of $0.27 per share, payable on December 2, 2020 to shareholders as of November 11, 2020 representing Greenbrier's 26th consecutive dividend.

Fiscal Year 2020 Highlights

* Net earnings attributable to Greenbrier for the year were $49.0 million, or $1.46 per diluted share, on revenue of $2.8 billion. Net earnings include $8.4 million, net of tax, ($0.26 per share) of integration related expenses from the ARI acquisition and $12.9 million, net of tax, ($0.38 per share) of severance expenses. * Adjusted net earnings attributable to Greenbrier were $70.2 million, or $2.10 per diluted share, excluding $21.3 million, net of tax and noncontrolling interest, ($0.64 per share) of integration and severance expenses. * Adjusted EBITDA for the year was $310.3 million, or 11.1% of revenue. * Strong cash flows from operations of $272.3 million includes $405.4 million in the second half of the fiscal year. * New railcar deliveries of 21,700 units for the year were the second highest in Greenbrier's history. * Generated new railcar orders of 16,600 units, valued at $1.6 billion, with 40% originating internationally.

William A. Furman, Chairman & CEO commented, "Greenbrier continued to perform well during this period of weaker demand. Critically, our diverse $2.4 billion backlog remains supported by strong customer commitments and provides clear visibility for several years. Entering fiscal 2021, we remain focused on maintaining our strong liquidity position. Greenbrier ended the quarter with more than $830 million of cash, an increase of nearly $100 million from the end of the third quarter. Net debt decreased by nearly $360 million since Greenbrier's fiscal second quarter. Our adjusted manufacturing footprint meets today's demand levels without constraining our ability to increase capacity as markets improve, allowing Greenbrier to maintain our presence in every region we serve around the world. Looking forward, we see early signs that demand will improve later in calendar 2021. Greenbrier is well-positioned to benefit from improving conditions in our core markets."

Business Update & Outlook

As we enter fiscal 2021, Greenbrier continues to execute on its COVID-19 response plan, and protecting our employees within the work environment remains our top priority. The strict protocols enacted and rapid response to clusters has allowed us to operate safely and efficiently throughout the world. Continued vigilance is required as community spread of COVID-19 is increasing in many areas where we operate. We are continuously working to maintain a low incident rate of COVID-19 among our employees by focusing on their health and enhancing the preventative and remedial actions of our rapid response teams across the company.

We also remain focused on preserving the near-term and longer-term financial health of Greenbrier in light of the economic consequences of the pandemic and an industry downturn. Maintaining cash flow and liquidity are essential components of Greenbrier's current operating strategy, and we have been very successful in this regard. We addressed our cost structure by reducing operating expenses and capital expenditures and are appropriately positioned for today's market environment. We closed 13 rail production lines in fiscal 2020 and are continuously adjusting capacity to align with an evolving demand outlook. We also reduced our global workforce by over 6,500 employees, or by about 40%, including both staff and production employees. Looking forward, while we remain focused on managing our cost base, we will be nimble and adjust capacity to ensure Greenbrier's ability to fully participate in an economic recovery. Coupled with a new railcar backlog valued at approximately $2.4 billion, we have preserved Greenbrier's ability to operate in a very challenging market environment.

Financial Summary

Q4 FY20 Q3 FY20 Sequential Comparison - Main Drivers

Revenue $636.4M $762.6M Fewer deliveries and lower activity levels in Wheels, Repair & Parts

Less syndication activity and operating Gross margin 10.5% 14.1% inefficiencies in Manufacturing and Wheels, Repair & Parts

Continuing cost reduction initiatives Selling and result in reduced employee-related and administrative$46.3M $49.5M travel & entertainment expenses; each quarter includes $1.8 million of severance expense

Net gain on disposition of$0.6M $8.8M Minimal fleet disposition activity equipment

Adjusted $55.7M $99.9M Lower operating earnings EBITDA

Effective tax Continued volatility from geographic mix rate 21.3% 41.2% of earnings and discrete items related to foreign currency fluctuations

Adjusted net Lower operating earnings reflecting fewerearnings deliveries, operating inefficiencies and attributable $5.5M^(1)$35.1M^(2)lower net gains on equipment sales to Greenbrier partially offset by lower selling & administrative expense

Adjusted $0.16^(1)$1.05^(2) diluted EPS

^(1) Excludes expense of $5.6 million ($0.16 per share), net of tax andnoncontrolling interest, associated with ARI integration related expenses andseverance expenses.

^(2) Excludes expense of $7.3 million ($0.22 per share), net of tax,associated with ARI integration related expenses and severance expenses.

Segment Summary

Q4 FY20Q3 FY20Sequential Comparison - Main Drivers

Manufacturing

Lower production rates and less Revenue $549.7M$653.0Msyndication activity results in fewer deliveries

Operating inefficiencies from Gross margin 9.4% 13.8% rationalizing capacity and less syndication activity

Operating margin ^(1) 5.4% 10.5%

Deliveries ^(2) 4,900 5,400

Wheels, Repair & Parts

Revenue $64.8M $82.0M Reduced wheel volumes and repair activity

Gross margin 6.0% 8.6% Operating inefficiencies due to lower business activity levels

Operating margin^ (1) 1.3% 4.6%

Leasing & Services

Less interim rent on leased Revenue $22.0M $27.5M railcars for syndication and no externally sourced syndication sales activity

Gross margin 53.2% 37.4% No externally sourced syndication sales activity

Operating margin^ (1) (3)29.7% 43.0%

Fleet utilization 90.4% 92.1%

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

^(2) Excludes Brazil deliveries which are not consolidated into manufacturingrevenue and margins.

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

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:

* October 23, 2020 * 8:00 a.m. Pacific Daylight Time * Phone: 1-630-395-0143, Password: "Greenbrier" * Real-time Audio Access: ("Newsroom" at http://www.gbrx.com)

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

About Greenbrier

Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in other geographies as opportunities arise. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit. Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, and other components. Greenbrier owns a lease fleet of 8,300 railcars and performs management services for 393,000 railcars. Learn more about Greenbrier at www.gbrx.com.

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

August 31, May 31, February 29, November 30, August 31, 2019 2020 2020 2020 2019

Assets

Cash andcash $ 833,745 $ 735,258 $ 169,899 $ 253,602 $ 329,684equivalents

Restricted 8,342 8,704 8,569 8,648 8,803cash

Accountsreceivable, 239,597 261,629 326,229 313,786 373,383net

Inventories 529,529 675,442 709,115 733,806 664,693

Leasedrailcars for 107,671 136,144 255,073 135,319 182,269syndication

Equipmenton operating 350,442 355,841 385,974 396,187 366,688leases, net

Property,plant and 711,524 719,155 723,326 730,730 717,973equipment, net

Investmentin 72,354 75,508 79,082 85,141 91,818unconsolidatedaffiliates

Intangiblesand other 190,322 181,315 160,709 162,089 125,379assets, net

Goodwill 130,308 130,035 129,684 129,468 129,947

$ 3,173,834 $ 3,279,031 $ 2,974,660 $ 2,948,776 $ 2,990,637

Liabilitiesand Equity

Revolving $ 351,526 $ 416,535 $ 37,196 $ 29,502 $ 27,115notes

Accountspayable and 463,880 488,969 499,898 527,789 568,360accruedliabilities

Deferred 7,701 4,354 9,173 9,417 13,946income taxes

Deferred 42,467 63,536 70,869 59,657 85,070revenue

Notes 804,088 806,919 811,860 817,830 822,885payable, net

Contingentlyredeemable 31,117 30,611 30,782 31,723 31,564noncontrollinginterest

Totalequity - 1,293,043 1,291,221 1,286,472 1,281,808 1,276,730Greenbrier

Noncontrolling 180,012 176,886 201,410 191,050 164,967interest

Total 1,473,055 1,468,107 1,487,882 1,472,858 1,441,697equity

$ 3,173,834 $ 3,279,031 $ 2,947,660 $ 2,948,776 $ 2,990,637

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

Years Ended August 31,

2020 2019 2018

Revenue

$ 2,349,971 $ 2,431,499 $ 2,044,586Manufacturing

Wheels, 324,670 444,502 347,023Repair & Parts

Leasing & 117,548 157,590 127,855Services

2,792,189 3,033,591 2,519,464

Cost ofrevenue

2,065,169 2,137,625 1,727,407Manufacturing

Wheels, 302,189 420,890 318,330Repair & Parts

Leasing & 71,700 108,590 64,672Services

2,439,058 2,667,105 2,110,409

Margin 353,131 366,486 409,055

Selling and 204,706 213,308 200,439administrative

Net gain ondisposition of (20,004) (40,963) (44,369)equipment

Goodwill - 10,025 -impairment

Earnings from 168,429 184,116 252,985operations

Other costs

Interest andforeign 43,619 30,912 29,368exchange

Earningsbefore incometax andearnings(loss) from 124,810 153,204 223,617

unconsolidatedaffiliates

Income tax (40,184) (41,588) (32,893)expense

Earningsbeforeearnings(loss) from 84,626 111,616 190,724

unconsolidatedaffiliates

Earnings(loss) from 2,960 (5,805) (18,661)unconsolidatedaffiliates

Net earnings 87,586 105,811 172,063

Net earningsattributableto (38,619) (34,735) (20,282)noncontrollinginterest

Net earningsattributable $ 48,967 $ 71,076 $ 151,781to Greenbrier

Basic earningsper common $ 1.50 $ 2.18 $ 4.92share

Dilutedearnings per $ 1.46 $ 2.14 $ 4.68common share

Weightedaverage commonshares

Basic 32,670 32,615 30,857

Diluted 33,441 33,165 32,835

Dividendsdeclared per $ 1.06 $ 1.00 $ 0.96common share

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

Years Ended August 31,

2020 2019 2018

Cash flows from operatingactivities:

Net earnings $ 87,586 $ 105,811 $ 172,063

Adjustments to reconcilenet earnings to net cashprovided by (used in) operatingactivities:

Deferred income taxes (9,489) (20,225) (40,496)

Depreciation and 109,850 83,731 74,356amortization

Net gain on disposition (20,004) (40,963) (44,369)of equipment

Stock based compensation 8,997 11,153 29,314expense

Accretion of debt 5,504 4,458 4,171discount

Noncontrolling interest 1,436 7,402 2,864adjustments

Goodwill Impairment - 10,025 -

Other 1,142 145 1,688

Decrease (increase) inassets:

Accounts receivable, 135,326 13,022 (83,551)net

Inventories 166,607 (143,168) (26,592)

Leased railcars for (12,942) (96,110) (54,023)syndication

Other assets (64,995) 6,843 34,115

Increase (decrease) inliabilities:

Accounts payable and (108,837) 55,910 54,032accrued liabilities

Deferred revenue (27,920) (19,275) (20,231)

Net cash provided by (used 272,261 (21,241) 103,341in) operating activities

Cash flows from investingactivities:

Acquisitions, net of cash - (361,878) (34,874)acquired

Proceeds from sales of 83,484 125,427 153,224assets

Capital expenditures (66,879) (198,233) (176,848)

Investment in and advances (1,815) (11,393) (26,455)to unconsolidated affiliates

Cash distribution fromunconsolidated affiliates and 12,693 2,096 4,661other

Net cash provided by (used 27,483 (443,981) (80,292)in) investing activities

Cash flows from financingactivities:

Net changes in revolvingnotes with maturities of 90 146,542 (105) 23,401days or less

Proceeds from revolvingnotes with maturities longer 176,500 - -than 90 days

Proceeds from issuance of - 525,000 13,771notes payable

Repayments of notes payable (30,179) (182,971) (22,269)

Debt issuance costs - (8,630) -

Dividends (35,173) (33,193) (29,914)

Cash distribution to joint (38,969) (16,879) (73,033)venture partner

Investment by joint venture - - 6,500partner

Tax payments for net share (2,266) (6,321) (7,723)settlement of restricted stock

Net cash provided by (used in) 216,455 276,901 (89,267)financing activities

Effect of exchange rate (12,599) (12,666) (14,666)changes

Increase (decrease) in cashand cash equivalents and 503,600 (200,987) (80,884)restricted cash

Cash and cash equivalents andrestricted cash

Beginning of period 338,487 539,474 620,358

End of period $ 842,087 $ 338,487 $ 539,474

Balance Sheet Reconciliation:

Cash and cash equivalents $ 833,745 $ 329,684 $ 530,655

Restricted cash 8,342 8,803 8,819

Total cash and cashequivalents and restricted cash $ 842,087 $ 338,487 $ 539,474as presented above

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, May 31, August 31, 2020 2020 2020

Net earnings $ $ $ 7,691 35,869 87,586

Interest and foreign 10,596 7,562 43,619exchange

Income tax expense 2,306 24,421 40,184

Depreciation and 27,398 23,114 109,850amortization

Severance expense 5,919 6,341 21,201

ARI integration 1,750 2,545 7,821related costs

Adjusted EBITDA $ $ $ 55,660 99,852 310,261

Year Ended Three Months Ended

August 31, August 31, 2020 2020

Backlog Activity (units) ^(1)

Beginning backlog 26,700 30,300

Orders received 2,800 16,600

Contract modification -- (575)

Production held as Leased railcars for syndication (700) (3,200)

Production sold directly to third parties (4,200) (18,525)

Ending backlog 24,600 24,600

Delivery Information (units) ^(1)

Production sold directly to third parties 4,200 18,525

Sales of Leased railcars for syndication 900 3,175

Total deliveries 5,100 21,700

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

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2020 are as follows:

First Second Third Fourth Total

Revenue

Manufacturing $ 657,367 $ 489,943 $ 653,007 $ 549,654 $ 2,349,971

Wheels, 86,608 91,225 82,024 64,813 324,670Repair & Parts

Leasing & 25,384 42,680 27,526 21,958 117,548Services

769,359 623,848 762,557 636,425 2,792,189

Cost of revenue

Manufacturing 581,912 422,309 562,793 498,155 2,065,169

Wheels, 81,892 84,373 75,001 60,923 302,189Repair & Parts

Leasing & 13,366 30,830 17,232 10,272 71,700Services

677,170 537,512 655,026 569,350 2,439,058

Margin 92,189 86,336 107,531 67,075 353,131

Selling andadministrative 54,364 54,597 49,494 46,251 204,706expense

Net gain ondisposition of (3,959) (6,697) (8,775) (573) (20,004)equipment

Earnings from 41,784 38,436 66,812 21,397 168,429operations

Other costs

Interest and 12,852 12,609 7,562 10,596 43,619foreign exchange

Earnings beforeincome tax andearnings (loss) 28,932 25,827 59,250 10,801 124,810fromunconsolidatedaffiliates

Income tax (5,994) (7,463) (24,421) (2,306) (40,184)expense

Earnings beforeearnings (loss)from 22,938 18,364 34,829 8,495 84,626unconsolidatedaffiliates

Earnings (loss)from 1,073 1,651 1,040 (804) 2,960unconsolidatedaffiliates

Net earnings 24,011 20,015 35,869 7,691 87,586

Net earningsattributable to (16,342) (6,386) (8,097) (7,794) (38,619)noncontrollinginterest

Net earnings(loss) $ 7,669 $ 13,629 $ 27,772 $ (103) $ 48,967attributable toGreenbrier

Basic earningsper common share $ 0.24 $ 0.42 $ 0.85 $ (0.00) $ 1.50^(1)

Diluted earningsper common share $ 0.23 $ 0.41 $ 0.83 $ (0.00) $ 1.46^(1)

Dividendsdeclared per $ 0.25 $ 0.27 $ 0.27 $ 0.27 $ 1.06common share

Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted EPS is calculated by including the^ dilutive effect, using the treasury stock method, associated with shares(1) 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.

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2019 are as follows:

First Second Third Fourth Total

Revenue

Manufacturing $ 471,789 $ 476,019 $ 681,588 $ 802,103 $ 2,431,499

Wheels, Repair & 108,543 125,278 124,980 85,701 444,502Parts

Leasing & 24,191 57,374 49,584 26,441 157,590Services

604,523 658,671 856,152 914,245 3,033,591

Cost of revenue

Manufacturing 417,805 442,996 590,788 686,036 2,137,625

Wheels, Repair & 100,978 118,455 119,821 81,636 420,890Parts

Leasing & 13,207 43,376 38,971 13,036 108,590Services

531,990 604,827 749,580 780,708 2,667,105

Margin 72,533 53,844 106,572 133,537 366,486

Selling andadministrative 50,432 47,892 54,377 60,607 213,308expense

Net gain ondisposition of (14,353) (12,102) (11,019) (3,489) (40,963)equipment

Goodwill impairment - - 10,025 - 10,025

Earnings from 36,454 18,054 53,189 76,419 184,116operations

Other costs

Interest and foreign 4,404 9,237 9,770 7,501 30,912exchange

Earnings beforeincome tax andearnings (loss) 32,050 8,817 43,419 68,918 153,204 fromunconsolidatedaffiliates

Income tax expense (9,135) (2,248) (13,008) (17,197) (41,588)

Earnings beforeearnings (loss) from 22,915 6,569 30,411 51,721 111,616 unconsolidatedaffiliates

Earnings (loss) fromunconsolidated 467 (786) (4,564) (922) (5,805)affiliates

Net earnings 23,382 5,783 25,847 50,799 105,811

Net earningsattributable to (5,426) (3,018) (10,599) (15,692) (34,735) noncontrollinginterest

Net earningsattributable to $ 17,956 $ 2,765 $ 15,248 $ 35,107 $ 71,076Greenbrier

Basic earnings per $ 0.55 $ 0.08 $ 0.47 $ 1.08 $ 2.18common share ^(1)

Diluted earnings per $ 0.54 $ 0.08 $ 0.46 $ 1.06 $ 2.14common share ^(1)

Dividends declared $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 1.00per common share

Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted EPS is calculated by including the^ dilutive effect, using the treasury stock method, associated with shares(1) 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.

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, unaudited)

Segment Information

Three months ended August 31, 2020:

Revenue Earnings (loss) from operations

External Intersegment Total External Intersegment Total

Manufacturing $ 549,654 $ 1,683 $ 551,337 $ 29,695 $ (19) $ 29,676

Wheels,Repair & 64,813 95 64,908 813 3 816Parts

Leasing & 21,958 10,898 32,856 6,520 10,528 17,048Services

Eliminations - (12,676) (12,676) - (10,512) (10,512)

Corporate - - - (15,631) - (15,631)

$ 636,425 $ - $ 636,425 $ 21,397 $ - $ 21,397

Three months ended May 31, 2020:

Revenue Earnings (loss) from operations

External Intersegment Total External Intersegment Total

Manufacturing $ 653,007 $ 1,151 $ 654,158 $ 68,445 $ 95 $ 68,540

Wheels,Repair & 82,024 1,527 83,551 3,785 (393) 3,392Parts

Leasing & 27,526 14,841 42,367 11,837 14,454 26,291Services

Eliminations - (17,519) (17,519) - (14,156) (14,156)

Corporate - - - (17,255) - (17,255)

$ 762,557 $ - $ 762,557 $ 66,812 $ - $ 66,812

Total assets

August 31, May 31, 2020 2020

Manufacturing $ 1,301,715 $ 1,441,052

Wheels, Repair & Parts 271,862 296,888

Leasing & Services 739,025 777,523

Unallocated, including 861,232 763,568cash

$ 3,173,834 $ 3,279,031







THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)



Reconciliation of common shares outstanding



The shares used in the computation of the Company's basic and diluted earningsper common share are reconciled as follows:



Three Months Year Ended Ended

August May 31,August 31, 31, 2020 2020 2020

Weighted average basic common shares outstanding 32,658 32,690 32,670 ^(1)

Dilutive effect of convertible notes ^(2) - - -

Dilutive effect of restricted stock units ^(3) - 788 771

Weighted average diluted common shares 32,658 33,478 33,441 outstanding





Restricted stock grants and restricted stock units that are considered^ participating securities, including some grants subject to certain(1) performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position.

The dilutive effect of the 2.875% Convertible notes issued in February 2017^ and the 2.25% Convertible notes issued in July 2019 were excluded for the(2) periods in which they were outstanding as the average stock price was less than the applicable conversion price and therefore was anti-dilutive.

Restricted stock units that are not considered participating securities and^ restricted stock units subject to performance criteria, for which actual(3) levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

Reconciliation of Net earnings attributable to Greenbrier to Adjusted netearnings attributable to Greenbrier

Three Months Ended Year Ended

August 31, May 31, August 31,

2020 2020 2020

Net earnings (loss) $ $ $ attributable to Greenbrier (103) 27,772 48,967

ARI integration related 1,936 2,539 8,358costs, net of tax ^(1)

Severance expense, net of tax& noncontrolling interest ^ 3,636 4,803 12,867(2)

Adjusted net earnings $ $ $ attributable to Greenbrier 5,469 35,114 70,192

^(1) Net of tax of $620, $813, and $2,689, respectively.

^(2) Net of tax and noncontrolling interest of $2,283, $1,538 and $8,334, respectively.

Reconciliation of Diluted earnings per share to Adjusted diluted earnings pershare

Three Months Ended Year Ended

August 31, May 31, August 31,

2020 2020 2020

Dilutedearnings per $ 0.00 $ 0.83 $ 1.46share

ARIintegration 0.06 0.08 0.26related costs,net of tax

Severanceexpense, netof tax & 0.10 0.14 0.38noncontrollinginterest

Adjusteddiluted $ 0.16 $ 1.05 $ 2.10earnings pershare



Weightedaveragediluted shares used tocalculate 33,519 33,478 33,441Adjusteddilutedearnings pershare

"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, and variations of words, such as "achieve," "align," "believe," "continue," "improve," "maintain," "target," "will," "working," and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about backlog, future liquidity and cash flow, spending reductions, available borrowing capacity, lower capital expenditures, expected trends as well as other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections "Fourth Quarter Highlights" and "Business Update & Outlook." 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, the following. (1) We are unable to predict when, how, or with what magnitude COVID-19 governmental reaction to the pandemic, and related economic disruptions will negatively impact our business: we may be prevented from operating our facilities; the operations of our customers may be disrupted increasing the likelihood that our customers may attempt to delay, defer or cancel orders, or cease to operate as going concerns; the operations of our suppliers may be disrupted; our indebtedness may increase; we may breach the covenants in our credit agreement; 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. The longer the pandemic continues, the more likely that negative impacts on our business will occur, some of which we cannot now foresee. (2) 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 which may not occur. Customers may attempt to cancel or modify orders or refuse to accept and pay for products. The likelihood of cancellations, modifications, rejection and non-payment for our products generally increases during periods of market weakness. The timing of converting backlog to revenue is also materially impacted by our decision whether to lease railcars, sell railcars, or syndicate railcars with a lease attached to an investor. More information on potential factors that could cause our results to differ from our forward-looking statements is included in the Company's filings with the SEC, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recently filed periodic report on Form 10-K. Except as otherwise required by law, the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof.

Adjusted Financial Metric Definitions

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

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

Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe this assists in comparing our performance across reporting periods.

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SOURCE The Greenbrier Companies, Inc.