UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 23, 2017
THE GREENBRIER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 1-13146
Oregon | 001-13146 | 93-0816972 | ||
(State of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
One Centerpointe Drive, Suite 200, Lake Oswego, OR | 97035 | |
(Address of principal executive offices) | (Zip Code) |
(503) 684-7000
(Registrants telephone number, including area code)
Former name or former address, if changed since last report: N/A
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On June 29, 2017, The Greenbrier Companies issued a press release reporting the Companys results of operations for the three and nine months ended May 31, 2017. A copy of such release is attached as Exhibit 99.1.
The information under this Item 2.02, including the Exhibit attached hereto, shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the Securities Act) or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(d) At its meeting on June 23, 2017, the Board of Directors of the Company elected Wanda F. Felton and David L. Starling to its Board, effective immediately.
Attached as Exhibit 99.2 and incorporated by reference herein is a copy of the Companys press release regarding the election of Ms. Felton and Mr. Starling to the Board of Directors.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
(a) On June 23, 2017, the Board approved an amendment to the Companys Bylaws in order to increase the size of the Board from seven to nine directors.
A copy of the Amendment to the Bylaws of The Greenbrier Companies, Inc. is attached as Exhibit 3.1 and incorporated by reference herein.
Item 7.01 Regulation FD Disclosure
In the press release issued on June 29, 2017 and attached hereto as Exhibit 99.1, Greenbrier also refined its 2017 guidance.
The information under this Item 7.01, including Exhibit 99.1 attached hereto, shall not be deemed filed for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
3.1 | Amendment to the Bylaws of The Greenbrier Companies, Inc. dated June 23, 2017. | |
99.1 | Press Release dated June 29, 2017 of The Greenbrier Companies, Inc. entitled Greenbrier Reports Third Quarter Results. | |
99.2 | Press Release dated June 29, 2017 entitled Greenbrier Adds Two Independent Directors to Board of Directors. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
THE GREENBRIER COMPANIES, INC. | ||||||
Date: June 29, 2017 | By: | /s/ Lorie L. Tekorius | ||||
Lorie L. Tekorius | ||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
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Exhibit 3.1
Amendment to the Bylaws
RESOLVED , that Article III, Section 1 of the Amended and Restated Bylaws of the Company be, and it hereby is, amended to increase the number of Directors which shall constitute the whole of the Board of Directors from seven Directors to nine Directors, effective immediately.
Adopted by the Board of Directors on June 23, 2017.
Exhibit 99.1
One Centerpointe Drive Suite 200 Lake Oswego, Oregon 97035 503-684-7000 | www.gbrx.com |
For release: June 29, 2017, 6:00 a.m. EDT
Contact: |
Lorie Tekorius, Investor Relations
Justin Roberts, Investor Relations Ph: 503-684-7000 |
Greenbrier Reports Third Quarter Results
~ Posts EPS of $1.03 ~
~ Manufacturing gross margin of nearly 23% ~
~ Diversified orders of 11,000 new railcars ~
Lake Oswego, Oregon, June 29, 2017 The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2017.
Third Quarter Highlights
| Net earnings attributable to Greenbrier for the quarter were $32.8 million, or $1.03 per diluted share, on revenue of $439.2 million. |
| Adjusted EBITDA for the quarter was $63.8 million, or 14.5% of revenue. |
| Finalized three major strategic transactions: formed Greenbrier-Astra Rail; executed railcar services and supply agreement with Mitsubishi UFJ Lease & Finance (MUL); and increased stake in Greenbrier-Maxion to 60% and Amsted-Maxion Cruzeiro to 24.5%. |
| Diversified orders for nearly 11,000 railcars were received during the quarter, valued at $1.01 billion, including 6,000 MUL units. Order activity excludes approximately 500 units from Greenbrier-Maxion (not consolidated) and Greenbrier-Astra Rail (formed June 1, 2017). If included, total international order activity would be 1,000 units. |
| New railcar backlog as of May 31, 2017 was 31,000 units with an estimated value of $3.10 billion, compared to 22,600 units with an estimated value of $2.44 billion as of February 28, 2017. Backlog includes approximately 1,000 units related to the formation of Greenbrier-Astra Rail, but does not reflect backlog for Greenbrier-Maxion. |
| New railcar deliveries totaled 2,600 units for the quarter, compared to 3,900 units for the quarter ended February 28, 2017. The decline in deliveries is primarily due to the timing of railcar syndications as well as lower production rates for certain car types. |
| Board declared a quarterly dividend of $0.22 per share payable on August 8, 2017 to shareholders of record as of July 18, 2017. |
William A. Furman, Chairman and CEO said, Our two-part strategy is succeeding. Specifically, our strategy protects and grows our core North American businesses while we also expand internationally in promising regions for rail transportation. By adhering to this strategy, Greenbrier delivered strong third quarter results highlighted by favorable gross margins of 20% and orders for 11,000 railcars. This is a testament to our business flexibility and our teams ability to execute in more challenging markets for our products and services.
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 2 |
Furman continued, We are encouraged by the strong order activity in our third quarter of 11,000 units, and especially in our North American and European markets. Excluding the 6,000 units from the MUL transaction, orders in these traditional markets totaled 5,000 units, the strongest level achieved in the past two years. This total excludes orders received by Greenbrier-Maxion and Astra Rail for the trailing three months. Our backlog of 31,000 railcar units places Greenbrier on a strong footing as we approach fiscal 2018. Since the beginning of the year we have observed sustained and increasing railcar loadings across commodity types, as well as decreasing rail velocity. Both are positive indicators for the near term demand environment.
Furman added, While we see emerging improvements in North American and European rail markets, we still expect a challenging commercial environment into calendar 2018. This makes execution of our two-part strategy even more important in the upcoming fiscal year. Although unforeseen developments in our markets can always occur, we remain cautiously optimistic.
Furman concluded, We will continue to forge new partnerships and expand on existing relationships like the transactions we finalized recently with MUL, Greenbrier-Maxion and Astra Rail. With manufacturing operations on three continents, solid railcar backlog, strong cash flows and a flexible balance sheet, Greenbrier continues to deliver long-term value for its shareholders.
Business Outlook
Based on current business trends and production schedules for fiscal 2017, Greenbrier refines provided guidance for:
| New railcar deliveries to be approximately 15,000 16,000 units |
| Revenue of approximately $2.1 $2.3 billion |
| Diluted EPS in the range of $3.45 to $3.65, excluding $0.17 per share of new convertible note interest expense |
As noted in the Safe Harbor statement, there are risks to achieving this guidance. Certain orders and backlog in this release are subject to customary documentation and completion of terms.
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 3 |
Financial Summary
Q3 FY17 | Q2 FY17 | Sequential Comparison Main Drivers | ||||
Revenue |
$439.2M | $566.3M | Down 22.4% due to timing of railcar syndications and lower deliveries reflecting lower production rates for certain car types | |||
Gross margin |
20.4% | 21.0% | Down 60 bps due primarily to lower deliveries | |||
Selling and administrative expense |
$42.8M | $39.5M | Up 8.4% primarily attributed to higher employee related costs including long-term incentive compensation | |||
Gain on disposition of equipment |
$1.6M | $2.1M | Timing of sales fluctuates and is opportunistic | |||
Adjusted EBITDA |
$63.8M | $94.5M | Lower operating margin driven by lower deliveries | |||
Interest and foreign exchange |
$7.9M | $5.7M | Up due to full quarter of interest expense related to new convertible debt | |||
Effective tax rate |
21.3% | 32.8% | Reflects a change in the geographic mix of earnings, the effects of discrete items and cumulative adjustments due to slightly reduced expected annual rate of 28.8% | |||
Loss from unconsolidated affiliates |
($0.7M) | ($2.0M) | Continued challenging after-markets operating environment in North America partially offset by increased ownership in Brazilian operations | |||
Net (earnings) loss attributable to noncontrolling interest |
$1.6M | ($14.5M) | Timing of railcar syndications at our GIMSA JV and lower production rates for certain car types | |||
Net earnings attributable to Greenbrier |
$32.8M | $34.5M | ||||
Diluted EPS |
$1.03 | $1.09 |
Segment Summary
Q3 FY17 | Q2 FY17 | Sequential Comparison Main Drivers | ||||
Manufacturing |
||||||
Revenue |
$317.1M | $445.5M | Down 28.8% primarily due to timing of railcar syndications and lower production rates for certain car types | |||
Gross margin |
22.7% | 22.2% | Up 50 bps primarily due to change in product mix and strong operating efficiency | |||
Operating margin (1) |
18.3% | 19.2% | ||||
Deliveries |
2,600 | 3,900 | ||||
Wheels & Parts |
||||||
Revenue |
$85.2M | $82.7M | Up 3.0% primarily attributable to increased scrap revenue | |||
Gross margin |
8.5% | 8.7% | Down 20 bps primarily due to change in product mix | |||
Operating margin (1) |
5.0% | 6.7% | ||||
Leasing & Services |
||||||
Revenue |
$36.8M | $38.1M | Down 3.4% primarily due to lower interim rent and externally sourced railcar syndications | |||
Gross margin |
28.7% | 33.8% | Down 510 bps primarily due to lower net interim rent | |||
Operating margin (1) (2) |
19.2% | 26.0% | ||||
Lease fleet utilization |
93.6% | 93.8% |
(1) See supplemental segment information on page 11 for additional information.
(2) Includes Net gain on disposition of equipment, which is excluded from gross margin.
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 4 |
Conference Call
Greenbrier will host a teleconference to discuss its third quarter 2017 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
| June 29, 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 (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to freight rail transportation markets. Greenbrier designs, builds and markets freight railcars in North America, Latin America and Europe. We also build and market marine barges in North America. We manufacture freight railcars in Brazil through a strategic partnership in which we hold a majority interest and produce rail castings through a separate Brazilian partnership. Greenbrier also has a majority stake in Greenbrier-Astra Rail, an end-to-end, Europe-based freight railcar manufacturing, engineering and repair business. Through our European manufacturing operations, we deliver U.S.-designed tank cars to Saudi Arabia. We are a leading provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America and a supplier of freight railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership with Watco Companies, LLC. Through other joint ventures, we produce rail castings, tank heads and other railcar components. Greenbrier owns a lease fleet of over 9,000 railcars and performs management services for 267,000 railcars.
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 Greenbriers financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbriers 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 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
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 5 |
exceed Greenbriers 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 Greenbriers Annual Report on Form 10-K for the fiscal year ended August 31, 2016 and Greenbriers Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2017, and Greenbriers 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 managements opinions only as of the date hereof. Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.
Adjusted EBITDA 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. 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 companys core business. We believe Adjusted EBITDA assists investors in understanding our underlying core operating performance and improves the period to period comparability. 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.
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 6 |
THE GREENBRIER COMPANIES, INC.
C ONSOLIDATED B ALANCE S HEETS
(In thousands, unaudited)
May 31,
2017 |
February 28,
2017 |
November 30,
2016 |
August 31,
2016 |
May 31,
2016 |
||||||||||||||||
Assets |
||||||||||||||||||||
Cash and cash equivalents |
$ | 465,413 | $ | 545,752 | $ | 233,790 | $ | 222,679 | $ | 214,440 | ||||||||||
Restricted cash |
8,753 | 8,696 | 8,642 | 24,279 | 8,669 | |||||||||||||||
Accounts receivable, net |
267,830 | 295,844 | 237,037 | 232,517 | 213,510 | |||||||||||||||
Inventories |
414,012 | 381,439 | 402,064 | 365,805 | 458,068 | |||||||||||||||
Leased railcars for syndication |
149,119 | 98,398 | 102,686 | 144,932 | 136,812 | |||||||||||||||
Equipment on operating leases, net |
315,976 | 298,269 | 305,586 | 306,266 | 232,791 | |||||||||||||||
Property, plant and equipment, net |
330,471 | 325,325 | 327,170 | 329,990 | 318,010 | |||||||||||||||
Investment in unconsolidated affiliates |
110,058 | 90,762 | 93,330 | 98,682 | 89,297 | |||||||||||||||
Intangibles and other assets, net |
68,930 | 68,228 | 63,780 | 67,359 | 68,648 | |||||||||||||||
Goodwill |
43,265 | 43,265 | 43,265 | 43,265 | 43,265 | |||||||||||||||
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$ | 2,173,827 | $ | 2,155,978 | $ | 1,817,350 | $ | 1,835,774 | $ | 1,783,510 | |||||||||||
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Liabilities and Equity |
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Revolving notes |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Accounts payable and accrued liabilities |
339,001 | 372,321 | 345,776 | 369,754 | 370,652 | |||||||||||||||
Deferred income taxes |
80,482 | 65,589 | 54,123 | 51,619 | 50,390 | |||||||||||||||
Deferred revenue |
82,006 | 85,441 | 85,358 | 95,721 | 68,158 | |||||||||||||||
Notes payable, net |
532,638 | 532,596 | 300,331 | 301,853 | 304,434 | |||||||||||||||
Total equity Greenbrier |
986,221 | 942,084 | 880,725 | 874,311 | 840,086 | |||||||||||||||
Noncontrolling interest |
153,479 | 157,947 | 151,037 | 142,516 | 149,790 | |||||||||||||||
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Total equity |
1,139,700 | 1,100,031 | 1,031,762 | 1,016,827 | 989,876 | |||||||||||||||
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$ | 2,173,827 | $ | 2,155,978 | $ | 1,817,350 | $ | 1,835,774 | $ | 1,783,510 | |||||||||||
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 7 |
THE GREENBRIER COMPANIES, INC.
C ONSOLIDATED S TATEMENTS OF I NCOME
(In thousands, except per share amounts, unaudited)
Three Months Ended
May 31, |
Nine Months Ended
May 31, |
|||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue |
||||||||||||||||
Manufacturing |
$ | 317,104 | $ | 458,494 | $ | 1,216,641 | $ | 1,611,686 | ||||||||
Wheels & Parts |
85,231 | 78,417 | 237,580 | 247,604 | ||||||||||||
Leasing & Services |
36,826 | 75,955 | 103,536 | 225,044 | ||||||||||||
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439,161 | 612,866 | 1,557,757 | 2,084,334 | |||||||||||||
Cost of revenue |
||||||||||||||||
Manufacturing |
245,228 | 352,775 | 948,436 | 1,247,635 | ||||||||||||
Wheels & Parts |
77,985 | 69,818 | 218,460 | 224,208 | ||||||||||||
Leasing & Services |
26,247 | 63,175 | 69,484 | 180,737 | ||||||||||||
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349,460 | 485,768 | 1,236,380 | 1,652,580 | |||||||||||||
Margin |
89,701 | 127,098 | 321,377 | 431,754 | ||||||||||||
Selling and administrative expense |
42,810 | 43,280 | 123,518 | 118,073 | ||||||||||||
Net gain on disposition of equipment |
(1,581 | ) | (311 | ) | (4,793 | ) | (11,326 | ) | ||||||||
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Earnings from operations |
48,472 | 84,129 | 202,652 | 325,007 | ||||||||||||
Other costs |
||||||||||||||||
Interest and foreign exchange |
7,894 | 3,712 | 15,291 | 10,565 | ||||||||||||
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Earnings before income tax and earnings (loss) from unconsolidated affiliates |
40,578 | 80,417 | 187,361 | 314,442 | ||||||||||||
Income tax expense |
(8,656 | ) | (22,449 | ) | (53,900 | ) | (92,902 | ) | ||||||||
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Earnings before earnings (loss) from unconsolidated affiliates |
31,922 | 57,968 | 133,461 | 221,540 | ||||||||||||
Earnings (loss) from unconsolidated affiliates |
(681 | ) | 1,564 | (5,253 | ) | 2,921 | ||||||||||
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Net earnings |
31,241 | 59,532 | 128,208 | 224,461 | ||||||||||||
Net (earnings) loss attributable to noncontrolling interest |
1,582 | (24,180 | ) | (35,887 | ) | (74,808 | ) | |||||||||
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Net earnings attributable to Greenbrier |
$ | 32,823 | $ | 35,352 | $ | 92,321 | $ | 149,653 | ||||||||
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Basic earnings per common share: |
$ | 1.12 | $ | 1.22 | $ | 3.16 | $ | 5.13 | ||||||||
Diluted earnings per common share: |
$ | 1.03 | $ | 1.12 | $ | 2.91 | $ | 4.67 | ||||||||
Weighted average common shares: |
||||||||||||||||
Basic |
29,348 | 29,059 | 29,192 | 29,182 | ||||||||||||
Diluted |
32,690 | 32,342 | 32,515 | 32,475 | ||||||||||||
Dividends declared per common share: |
$ | 0.22 | $ | 0.20 | $ | 0.64 | $ | 0.60 |
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Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 8 |
THE GREENBRIER COMPANIES, INC.
C ONSOLIDATED S TATEMENTS OF C ASH F LOWS
(In thousands, unaudited)
Nine Months Ended
May 31, |
||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: |
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Net earnings |
$ | 128,208 | $ | 224,461 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
Deferred income taxes |
16,815 | (10,143 | ) | |||||
Depreciation and amortization |
46,616 | 41,681 | ||||||
Net gain on disposition of equipment |
(4,793 | ) | (11,326 | ) | ||||
Accretion of debt discount |
1,329 | | ||||||
Stock based compensation expense |
19,007 | 19,055 | ||||||
Noncontrolling interest adjustments |
1,203 | 837 | ||||||
Other |
1,017 | 564 | ||||||
(Increase) decrease in assets: |
||||||||
Accounts receivable, net |
(27,109 | ) | (14,333 | ) | ||||
Inventories |
(47,209 | ) | (15,346 | ) | ||||
Leased railcars for syndication |
(16,122 | ) | 28,823 | |||||
Other |
8,419 | (5,191 | ) | |||||
Increase (decrease) in liabilities: |
||||||||
Accounts payable and accrued liabilities |
(41,008 | ) | (88,707 | ) | ||||
Deferred revenue |
(13,650 | ) | 24,303 | |||||
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Net cash provided by operating activities |
72,723 | 194,678 | ||||||
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Cash flows from investing activities: |
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Proceeds from sales of assets |
20,344 | 88,707 | ||||||
Capital expenditures |
(53,848 | ) | (51,707 | ) | ||||
Decrease in restricted cash |
15,526 | 200 | ||||||
Investment in and advances to unconsolidated affiliates |
(34,068 | ) | (9,088 | ) | ||||
Cash distribution from unconsolidated affiliates |
550 | 5,338 | ||||||
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Net cash provided by (used in) investing activities |
(51,496 | ) | 33,450 | |||||
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Cash flows from financing activities: |
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Net change in revolving notes with maturities of 90 days or less |
| (49,000 | ) | |||||
Proceeds from revolving notes with maturities longer than 90 days |
| | ||||||
Repayments of revolving notes with maturities longer than 90 days |
| (1,888 | ) | |||||
Proceeds from issuance of notes payable |
275,000 | | ||||||
Repayments of notes payable |
(5,469 | ) | (19,461 | ) | ||||
Debt issuance costs |
(9,082 | ) | (4,160 | ) | ||||
Repurchase of stock |
| (33,498 | ) | |||||
Dividends |
(18,619 | ) | (17,362 | ) | ||||
Cash distribution to joint venture partner |
(27,267 | ) | (62,710 | ) | ||||
Investment by joint venture partner |
| 5,400 | ||||||
Excess tax benefit (deficiency) from restricted stock awards |
(2,396 | ) | 2,786 | |||||
Other |
| (7 | ) | |||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
212,167 | (179,900 | ) | |||||
|
|
|
|
|||||
Effect of exchange rate changes |
9,340 | (6,718 | ) | |||||
Increase in cash and cash equivalents |
242,734 | 41,510 | ||||||
Cash and cash equivalents |
||||||||
Beginning of period |
222,679 | 172,930 | ||||||
|
|
|
|
|||||
End of period |
$ | 465,413 | $ | 214,440 | ||||
|
|
|
|
- More -
Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 9 |
THE GREENBRIER COMPANIES, INC.
S UPPLEMENTAL I NFORMATION
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2017 are as follows:
First | Second | Third | Total | |||||||||||||
Revenue |
||||||||||||||||
Manufacturing |
$ | 454,033 | $ | 445,504 | $ | 317,104 | $ | 1,216,641 | ||||||||
Wheels & Parts |
69,635 | 82,714 | 85,231 | 237,580 | ||||||||||||
Leasing & Services |
28,646 | 38,064 | 36,826 | 103,536 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
552,314 | 566,282 | 439,161 | 1,557,757 | |||||||||||||
Cost of revenue |
||||||||||||||||
Manufacturing |
356,555 | 346,653 | 245,228 | 948,436 | ||||||||||||
Wheels & Parts |
64,978 | 75,497 | 77,985 | 218,460 | ||||||||||||
Leasing & Services |
18,030 | 25,207 | 26,247 | 69,484 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
439,563 | 447,357 | 349,460 | 1,236,380 | |||||||||||||
Margin |
112,751 | 118,925 | 89,701 | 321,377 | ||||||||||||
Selling and administrative expense |
41,213 | 39,495 | 42,810 | 123,518 | ||||||||||||
Net gain on disposition of equipment |
(1,122 | ) | (2,090 | ) | (1,581 | ) | (4,793 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings from operations |
72,660 | 81,520 | 48,472 | 202,652 | ||||||||||||
Other costs |
||||||||||||||||
Interest and foreign exchange |
1,724 | 5,673 | 7,894 | 15,291 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings before income tax and loss from unconsolidated affiliates |
70,936 | 75,847 | 40,578 | 187,361 | ||||||||||||
Income tax expense |
(20,386 | ) | (24,858 | ) | (8,656 | ) | (53,900 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings before loss from unconsolidated affiliates |
50,550 | 50,989 | 31,922 | 133,461 | ||||||||||||
Loss from unconsolidated affiliates |
(2,584 | ) | (1,988 | ) | (681 | ) | (5,253 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings |
47,966 | 49,001 | 31,241 | 128,208 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (earnings) loss attributable to noncontrolling interest |
(23,004 | ) | (14,465 | ) | 1,582 | (35,887 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings attributable to Greenbrier |
$ | 24,962 | $ | 34,536 | $ | 32,823 | $ | 92,321 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic earnings per common share (1) |
$ | 0.86 | $ | 1.19 | $ | 1.12 | $ | 3.16 | ||||||||
Diluted earnings per common share (1) |
$ | 0.79 | $ | 1.09 | $ | 1.03 | $ | 2.91 |
(1) | Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share excludes the dilutive effect of the 2024 Convertible Notes, since the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive, but includes restricted stock units that are 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. |
- More -
Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 10 |
THE GREENBRIER COMPANIES, INC.
S UPPLEMENTAL I NFORMATION
(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 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. |
- More -
Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 11 |
THE GREENBRIER COMPANIES, INC.
S UPPLEMENTAL I NFORMATION
(In thousands, unaudited)
Segment Information
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 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended February 28, 2017:
Revenue | Earnings (loss) from operations | |||||||||||||||||||||||
External | Intersegment | Total | External | Intersegment | Total | |||||||||||||||||||
Manufacturing |
$ | 445,504 | $ | | $ | 445,504 | $ | 85,369 | $ | | $ | 85,369 | ||||||||||||
Wheels & Parts |
82,714 | 7,233 | 89,947 | 5,569 | 512 | 6,081 | ||||||||||||||||||
Leasing & Services |
38,064 | 2,112 | 40,176 | 9,889 | 1,924 | 11,813 | ||||||||||||||||||
Eliminations |
| (9,345 | ) | (9,345 | ) | | (2,436 | ) | (2,436 | ) | ||||||||||||||
Corporate |
| | | (19,307 | ) | | (19,307 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 566,282 | $ | | $ | 566,282 | $ | 81,520 | $ | | $ | 81,520 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Total assets | ||||||||
May 31,
2017 |
February 28,
2017 |
|||||||
Manufacturing |
$ | 705,229 | $ | 724,209 | ||||
Wheels & Parts |
264,308 | 280,207 | ||||||
Leasing & Services |
625,569 | 505,897 | ||||||
Unallocated |
578,721 | 645,665 | ||||||
|
|
|
|
|||||
$ | 2,173,827 | $ | 2,155,978 | |||||
|
|
|
|
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 |
||||||||
May 31,
2017 |
February 28,
2017 |
|||||||
Revenue |
$ | 62,700 | $ | 64,200 | ||||
Loss from operations |
$ | (5,500 | ) | $ | (6,900 | ) | ||
Total assets |
$ | 218,800 | $ | 227,200 |
- More -
Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 12 |
THE GREENBRIER COMPANIES, INC.
S UPPLEMENTAL I NFORMATION
(In thousands, excluding backlog and delivery units, unaudited)
Reconciliation of Net earnings to Adjusted EBITDA
Three Months Ended | ||||||||
May 31,
2017 |
February 28,
2017 |
|||||||
Net earnings |
$ | 31,241 | $ | 49,001 | ||||
Interest and foreign exchange |
7,894 | 5,673 | ||||||
Income tax expense |
8,656 | 24,858 | ||||||
Depreciation and amortization |
16,036 | 14,985 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | 63,827 | $ | 94,517 | ||||
|
|
|
|
Three Months
Ended May 31, 2017 |
||||
Backlog Activity (units) |
||||
Beginning backlog |
22,600 | |||
Orders received |
11,000 | |||
Astra Rail (1) |
1,000 | |||
Production held as Leased railcars for syndication |
(1,200 | ) | ||
Production sold directly to third parties |
(2,400 | ) | ||
|
|
|||
Ending backlog |
31,000 | |||
|
|
|||
Delivery Information (units) |
||||
Production sold directly to third parties |
2,400 | |||
Sales of Leased railcars for syndication |
200 | |||
|
|
|||
Total deliveries |
2,600 | |||
|
|
(1) | Backlog added as of June 1, 2017. |
- More -
Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 13 |
THE GREENBRIER COMPANIES, INC.
S UPPLEMENTAL I NFORMATION
(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 Companys basic and diluted earnings per common share are reconciled as follows:
Three Months Ended | ||||||||
May 31,
2017 |
February 28,
2017 |
|||||||
Weighted average basic common shares outstanding (1) |
29,348 | 29,130 | ||||||
Dilutive effect of convertible notes (2) |
3,305 | 3,287 | ||||||
Dilutive effect of performance awards (3) |
37 | 10 | ||||||
|
|
|
|
|||||
Weighted average diluted common shares outstanding |
32,690 | 32,427 | ||||||
|
|
|
|
(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 | ||||||||
May 31,
2017 |
February 28,
2017 |
|||||||
Net earnings attributable to Greenbrier |
$ | 32,823 | $ | 34,536 | ||||
Add back: |
||||||||
Interest and debt issuance costs on the 2018 Convertible notes, net of tax |
733 | 733 | ||||||
|
|
|
|
|||||
Earnings before interest and debt issuance costs on convertible notes |
$ | 33,556 | $ | 35,269 | ||||
|
|
|
|
|||||
Weighted average diluted common shares outstanding |
32,690 | 32,427 | ||||||
Diluted earnings per share |
$ | 1.03 | $ | 1.09 |
- More -
Exhibit 99.2
One Centerpointe Drive Suite 200 Lake Oswego, Oregon 97035 503-684-7000 | www.gbrx.com |
For release : June 29, 2017, 6:00 a.m. EDT |
Contact: Jack Isselmann, Public Relations Justin Roberts, Investor Relations Ph: 503-684-7000 |
Greenbrier Adds Two Independent Directors to Board of Directors
~ Wanda Felton and David L. Starling elected to Board of Directors ~
~ Greenbrier increases Board of Directors to nine members ~
Lake Oswego, Oregon, June 29, 2017 The Greenbrier Companies, Inc. (NYSE:GBX) announced today the election of Wanda Felton and David L. Starling to the Companys Board of Directors. The election of two new directors increases Greenbriers Board of Directors to nine members, eight of whom are independent directors.
Wanda Felton has approximately 25 years of investment banking and private equity advisory experience. After twice being confirmed by the United States Senate, Ms. Felton recently completed service as First Vice President and Vice Chair of the Export Import Bank of the United States (Ex-Im Bank). As Vice Chair of the Board of Directors, she voted on policy matters and approved transactions that spanned global markets and addressed many industry sectors, including manufacturing and transportation, among others.
Earlier in her career, Ms. Felton worked in corporate finance, serving clients in the financial services industry. She led transactions that steered more than $3.5 billion to emerging markets, including sub-Saharan Africa.
Prior to joining Ex-Im Bank, she operated MAP Capital Advisors. Previously, she was a managing director at Helix Associates, a division of Jefferies Inc.; a director at Credit Suisse First Boston; and a managing director at Hamilton Lane Advisors. Ms. Felton began her career as a loan officer at Ex-Im Bank. She holds a B.A. from the University of Pennsylvania and MBA from Harvard Business School.
I am very pleased to have an expert in international finance like Wanda join our board, said William A. Furman, Chairman & CEO. Greenbrier will benefit from her experience with international markets and financial strategies as we pursue a growth plan that includes an emphasis on successfully executing transactions around the world.
David L. Starling recently retired from the Board of Directors of Kansas City Southern (KCS) where he served since 2010. From 2008-2016, Mr. Starling also served as President and COO at KCS and as President and CEO and a member of the Board of Directors of its affiliate, Kansas City Southern Railroad. KCS is a NYSE-traded transportation holding company that has railroad investments in the U.S., Mexico and Panama. KCS North American rail holdings and strategic alliances are primary components of a NAFTA railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.
- More -
Greenbrier Adds Two Independent Directors . . . (Cont.) | Page 2 |
Mr. Starling possesses substantial experience in the North American rail industry and in intermodal transportation and global shipping logistics. He began his railroad career in 1971 with the St. Louis-San Francisco Railroad (the Frisco) and over the next 14 years held various positions in rail operations at the Frisco and later Burlington Northern (BN) after the Frisco was acquired by BN. From 1988 to 1999 he served American President Lines (APL) in various roles including as Vice President of Central Asia where he had oversight of APLs operations in Hong Kong, China and Taiwan. Subsequently, he relocated to Panama to serve as president and director general of Panama Canal Railway Company, a KCS affiliate, with responsibility for the reconstruction of the railroad and its subsequent operation. In 2012, Mr. Starling was awarded Railway Ages prestigious Railroader of the Year award.
Furman added, With over four decades in the transportation business, Dave Starling is a railroaders railroader and a well-respected leader in the rail industry. Dave brings to the Board deep industry experience from executive roles in the transportation business on multiple continents. Gaining a director with Daves background in railroading, particularly in Latin America, is advantageous to our pursuit of new railcar markets in Central and South America. As a NAFTA champion throughout his career, Dave will bring an important voice and perspective to Greenbrier when we engage with U.S. and Mexico policymakers during the upcoming NAFTA renegotiations.
Wanda Felton and Dave Starling are two exceptional additions to the Greenbrier Board. We expect them to make immediate and enduring contributions to our Board activities and deliberations. I join all of my fellow Greenbrier Directors in welcoming them both to the Board, Furman concluded.
About Greenbrier
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to freight rail transportation markets. Greenbrier designs, builds and markets freight railcars in North America, Latin America and Europe. We also build and market marine barges in North America. We manufacture freight railcars in Brazil through a strategic partnership in which we hold a majority interest and produce rail castings through a separate Brazilian partnership. Greenbrier also has a majority stake in Greenbrier-Astra Rail, an end-to-end, Europe-based freight railcar manufacturing, engineering and repair business. Through our European manufacturing operations, we deliver U.S.-designed tank cars to Saudi Arabia. We are a leading provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America and a supplier of freight railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership with Watco Companies, LLC. Through other joint ventures, we produce rail castings, tank heads and other railcar components. Greenbrier owns a lease fleet of over 9,000 railcars and performs management services for 267,000 railcars.
# # #