Media & Resources Press Releases Greenbrier Reports Second Quarter Results (1)

Greenbrier Reports Second Quarter Results

LAKE OSWEGO, Ore., April 5, 2017 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its second fiscal quarter ended February 28, 2017.

Second Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $34.5 million, or $1.09 per diluted share, on revenue of $566.3 million
  • Adjusted EBITDA for the quarter was $94.5 million, or 16.7% of revenue.
  • Strong balance sheet reflects over $900 million of total liquidity including issuance of $275 million of 2.875% convertible notes.
  • Cash provided by operating activities totaled $52.9 million for the quarter.
  • Diversified orders for 700 new railcars were received during this quarter, valued at approximately $50 million, or an average price of approximately $71,000 per railcar. Orders for 1,000 new railcars were received after quarter end.
  • New railcar backlog as of February 28, 2017 was 22,600 units with an estimated value of $2.44 billion (average unit sale price of $108,000).
  • New railcar deliveries totaled 3,900 units for the quarter.
  • Produced 100,000th intermodal double stack railcar at Gunderson facility in Portland, Oregon.
  • Marine backlog as of February 28, 2017 was approximately $86 million.
  • Board declared a 5% increase in the quarterly dividend to $0.22 per share, payable on May 9, 2017 to shareholders of record as of April 18, 2017.

William A. Furman, Chairman and CEO, said, "We are focused on our two-part strategy to protect and enhance core North American businesses during this time of market inconstancy while we also expand internationally in targeted regions that offer promising growth opportunities for rail transportation. Our substantial advances on both prongs of this strategy resulted in a strong quarter, including a healthy aggregate gross margin of 21%. Our current backlog and production rates remain a key positive for Greenbrier. We are encouraged by the upward trend in rail traffic, order activity in our current quarter, and earnings contribution from our activities in international markets. Midway through a solid fiscal year, we are reaffirming our guidance for the full year.

Furman concluded, "We are making positive progress on our international investments. After quarter close, we received anti-trust approval on our Brazilian investments and expect to close during our fiscal third quarter. Our planned European expansion, Greenbrier-Astra Rail, also received anti-trust approval from two of three jurisdictions and we expect the transaction to close soon after the final anti-trust approval is received from the Polish government. With the completion of these transactions, Greenbrier will further extend its global reach and enhance our ability to serve customers in markets that span four continents. We are pleased to see our global investments yield positive results and are encouraged by the future prospects for our international growth strategy."  

At 9:00 a.m. EDT, Greenbrier will announce an important expansion of an existing multi-year commercial relationship with an international customer. This announcement will be issued to coordinate with an announcement from our customer whose publicly held stock is listed on an international exchange. 

Business Outlook

For fiscal 2017, based on current business trends, production schedules, and excluding the expected benefits of Greenbrier-Astra Rail and our increased Brazil ownership stake, Greenbrier believes:

  • Deliveries will be approximately 14,000 – 16,000 units
  • Revenue will be $2.0$2.4 billion
  • Diluted EPS will be in the range of $3.25 to $3.75, 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.

Financial Summary


Q2 FY17

Q1 FY17

Sequential Comparison – Main Drivers

Revenue

$566.3M

$552.3M

Up 2.5% primarily due to higher wheel volumes and externally sourced railcar syndications

Gross margin

21.0%

20.4%

Up 60 bps due to product mix shifts

Selling and

administrative expense

$39.5M

$41.2M

Down 4.1% due to decreased legal costs related to litigation and timing of employee-related costs

Gain on disposition

of equipment

$2.1M

$1.1M

Timing of sales fluctuates and is opportunistic

Adjusted EBITDA

$94.5M

$85.7M

Higher operating margin

Interest and foreign

exchange

$5.7M

$1.7M

Prior period included foreign exchange gain

Effective tax rate

32.8%

28.7%

Foreign discrete items; expected annual rate of 30%

Loss from

unconsolidated affiliates

($2.0M)

($2.6M)

Continued challenging after-markets operating environment in North America

Net earnings attributable

to noncontrolling interest

$14.5M

$23.0M

Change driven primarily by timing of deliveries from our GIMSA JV

Net earnings attributable

to Greenbrier

$34.5M

$25.0M


Diluted EPS

$1.09

$0.79


Segment Summary


Q2 FY17

Q1 FY17

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$445.5M

$454.0M

Reflects lower deliveries offset by beneficial international mix

  Gross margin

22.2%

21.5%

Up 70 bps reflecting product mix shifts and continued strong operating performance

  Operating margin (1)

19.2%

18.4%


  Deliveries

3,900

4,000


Wheels & Parts

  Revenue

$82.7M

$69.6M

Up 18.8% primarily attributable to higher wheel

volumes

  Gross margin

8.7%

6.7%

Up 200 bps due to efficiencies of higher volumes

  Operating margin (1)

6.7%

4.2%


Leasing & Services

  Revenue

$38.1M

$28.6M

Reflects increased externally sourced railcar syndications 

  Gross margin

33.8%

37.1%

Down 330 bps due to higher volume of externally sourced railcar syndications, which typically have lower margins

  Operating margin (1) (2)

26.0%

25.8%


  Lease fleet utilization

93.8%

94.2%




(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.

Conference Call

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

  • April 5, 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 and Europe.  We also build and market marine barges in North America.  We manufacture freight railcars and rail castings in Brazil through a strategic partnership.  Through our European manufacturing operations, we recently began delivery of U.S.-designed tank cars to Saudi Arabia.  In October 2016, we entered into an agreement with Astra Rail Management GmbH to form a new company, Greenbrier-Astra Rail, which will create an end-to-end, Europe-based freight railcar manufacturing, engineering and repair business.  We expect this combination to be completed during 2017.  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 8,000 railcars and performs management services for over 266,000 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 Greenbrier's financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbrier's indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; policies and priorities of the federal government regarding international trade and infrastructure; sovereign risk to contracts, exchange rates or property rights; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed Greenbrier's insurance coverage; train derailments or other accidents or claims that could subject Greenbrier to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other rail car or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings "Risk Factors" and "Forward Looking Statements" in Greenbrier's Annual Report on Form 10-K for the fiscal year ended August 31, 2016 and Greenbrier's Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2016, and Greenbrier's other reports on file with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof.  Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.

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 company's 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.

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)



February 28,
2017

November 30,

2016

August 31,

2016

May 31,

2016

February 29,

2016

Assets






   Cash and cash equivalents

$    545,752

$    233,790

$    222,679

$    214,440

$    283,541

   Restricted cash

8,696

8,642

24,279

8,669

8,877

   Accounts receivable, net 

295,844

237,037

232,517

213,510

228,072

   Inventories

381,439

402,064

365,805

458,068

421,243

   Leased railcars for syndication

98,398

102,686

144,932

136,812

179,975

   Equipment on operating leases, net

298,269

305,586

306,266

232,791

235,171

   Property, plant and equipment, net

325,325

327,170

329,990

318,010

310,019

   Investment in unconsolidated affiliates

90,762

93,330

98,682

89,297

86,850

   Intangibles and other assets, net

68,228

63,780

67,359

68,648

70,709

   Goodwill

43,265

43,265

43,265

43,265

43,265


$ 2,155,978

$ 1,817,350

$ 1,835,774

$ 1,783,510

$ 1,867,722







Liabilities and Equity






   Revolving notes

$                -

$                -

$                -

$                -

$      75,000

   Accounts payable and accrued liabilities

372,321

345,776

369,754

370,652

401,010

   Deferred income taxes

65,589

54,123

51,619

50,390

55,204

   Deferred revenue

85,441

85,358

95,721

68,158

84,362

   Notes payable, net

532,596

300,331

301,853

304,434

319,952







   Total equity - Greenbrier

942,084

880,725

874,311

840,086

800,940

   Noncontrolling interest

157,947

151,037

142,516

149,790

131,254

   Total equity

1,100,031

1,031,762

1,016,827

989,876

932,194


$ 2,155,978

$ 1,817,350

$ 1,835,774

$ 1,783,510

$ 1,867,722


 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)



Three Months Ended

          Six Months Ended


February 28,
2017


February 29,
2016


  February 28,
2017


February 29,
2016

Revenue








        Manufacturing

$         445,504


$        454,531


$      899,537


$    1,153,192

        Wheels & Parts

82,714


90,458


152,349


169,187

        Leasing & Services

38,064


124,090


66,710


149,089


566,282


669,079


1,118,596


1,471,468

Cost of revenue








        Manufacturing

346,653


361,827


703,208


894,860

        Wheels & Parts

75,497


81,388


140,475


154,390

        Leasing & Services

25,207


105,973


43,237


117,562


447,357


549,188


886,920


1,166,812









Margin

118,925


119,891


231,676


304,656









Selling and administrative expense

39,495


38,244


80,708


74,793

Net gain on disposition of equipment

(2,090)


(10,746)


(3,212)


(11,015)

Earnings from operations

81,520


92,393


154,180


240,878









Other costs








Interest and foreign exchange

5,673


1,417


7,397


6,853

Earnings before income tax and earnings (loss) from unconsolidated affiliates

 

75,847


 

90,976


 

146,783


 

234,025

Income tax expense

(24,858)


(25,734)


(45,244)


(70,453)

Earnings before earnings (loss) from unconsolidated affiliates

 

50,989


 

65,242


 

101,539


 

163,572

Earnings (loss) from unconsolidated affiliates

(1,988)


974


(4,572)


1,357

 

Net earnings

 

49,001


 

66,216


 

96,967


 

164,929

Net earnings attributable to noncontrolling interest

(14,465)


(21,348)


(37,469)


(50,628)









Net earnings attributable to Greenbrier

$          34,536


$        44,868


$      59,498


$        114,301









Basic earnings per common share:

$              1.19


$            1.54


$              2.04


$              3.91









Diluted earnings per common share:

$              1.09


$            1.41


$              1.88


$              3.55









Weighted average common shares:








Basic

29,130


29,098


29,113


29,244

Diluted

32,427


32,360


32,423


32,542









Dividends declared per common share

$              0.21


$            0.20


$              0.42


$              0.40

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited) 




Six Months Ended





February 28,


February 29,





2017


2016


Cash flows from operating activities:







    Net earnings


$

96,967


$       164,929


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







      Deferred income taxes



2,272


(5,287)


      Depreciation and amortization



30,580


27,842


      Net gain on disposition of equipment



(3,212)


(11,015)


      Accretion of debt discount



330


-


      Stock based compensation expense



10,854


10,740


     Noncontrolling interest adjustments



(3,255)


2,815


      Other



548


491


      Decrease (increase) in assets:







          Accounts receivable, net



(67,271)


(30,356)


          Inventories



(17,673)


21,922


          Leased railcars for syndication



37,903


(15,391)


          Other



5,550


(3,717)


    Increase (decrease) in liabilities:







          Accounts payable and accrued liabilities



(1,263)


(55,448)


          Deferred revenue



(10,468)


41,790


    Net cash provided by operating activities



81,862


149,315


Cash flows from investing activities:







    Proceeds from sales of assets



19,898


80,541


    Capital expenditures



(21,194)


(27,974)


    Decrease (increase) in restricted cash



15,583


(8)


    Investment in and advances to unconsolidated affiliates



(550)


(5,140)


    Other



550


2,640


    Net cash provided by investing activities



14,287


50,059


Cash flows from financing activities:







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



-


26,000


    Repayments of revolving notes with maturities longer than 90 days



-


(1,888)


    Proceeds from issuance of notes payable



275,000


-


    Repayments of notes payable



(3,719)


(3,730)


    Debt issuance costs



(9,450)


(4,149)


    Repurchase of stock



-


(33,246)


    Dividends



(12,138)


(11,575)


    Cash distribution to joint venture partner



(19,486)


(53,543)


    Excess tax benefit (deficiency) from restricted stock awards



(2,453)


2,786


    Other



-


(6)


    Net cash provided by (used in) financing activities



227,754


(79,351)


    Effect of exchange rate changes



(830)


(9,412)


    Increase in cash and cash equivalents



323,073


110,611


Cash and cash equivalents







Beginning of period



222,679


172,930


End of period


$

545,752


$       283,541
















 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, except per share amounts, unaudited)








Operating Results by Quarter for 2017 are as follows:









First


Second


Total









Revenue







   Manufacturing

$     454,033


$       445,504


$          899,537


   Wheels & Parts

69,635


82,714


152,349


   Leasing & Services

28,646


38,064


66,710



552,314


566,282


1,118,596


Cost of revenue







   Manufacturing

356,555


346,653


703,208


   Wheels & Parts

64,978


75,497


140,475


   Leasing & Services

18,030


25,207


43,237



439,563


447,357


886,920









Margin

112,751


118,925


231,676









Selling and administrative expense

41,213


39,495


80,708


Net gain on disposition of equipment

(1,122)


(2,090)


(3,212)


Earnings from operations

72,660


81,520


154,180









Other costs







   Interest and foreign exchange

1,724


5,673


7,397


Earnings before income tax and

   loss from unconsolidated affiliates          

 

70,936


 

75,847


 

146,783


Income tax expense

(20,386)


(24,858)


(45,244)


Earnings before loss from 

   unconsolidated affiliates

 

50,550


 

50,989


 

101,539


Loss from unconsolidated affiliates

(2,584)


(1,988)


(4,572)


Net earnings

47,966


49,001


96,967


Net earnings attributable to noncontrolling interest

(23,004)


(14,465)


(37,469)


Net earnings attributable to Greenbrier

$       24,962


$       34,536


$           59,498









Basic earnings per common share (1)

$           0.86


$           1.19


$               2.04


Diluted earnings per common share (1)

$           0.79


$           1.09


$               1.88




(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 2024 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.

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, except per share amounts, unaudited)


Operating Results by Quarter for 2016 are as follows:



First


Second


Third


Fourth


Total













Revenue











   Manufacturing

$        698,661


$      454,531


$      458,494


$     484,645


$  2,096,331


   Wheels & Parts

78,729


90,458


78,417


74,791


322,395


   Leasing & Services

24,999


124,090


75,955


35,754


260,798



802,389


669,079


612,866


595,190


2,679,524


Cost of revenue











   Manufacturing

533,033


361,827


352,775


382,919


1,630,554


   Wheels & Parts

73,002


81,388


69,818


69,543


293,751


   Leasing & Services

11,589


105,973


63,175


23,045


203,782



617,624


549,188


485,768


475,507


2,128,087













Margin

184,765


119,891


127,098


119,683


551,437













Selling and administrative expense

36,549


38,244


43,280


40,608


158,681


Net gain on disposition of equipment

(269)


(10,746)


(311)


(4,470)


(15,796)


Earnings from operations

148,485


92,393


84,129


83,545


408,552













Other costs











   Interest and foreign exchange

5,436


1,417


3,712


2,937


13,502


Earnings before income tax and earnings (loss)

from unconsolidated affiliates          

 

143,049


 

90,976


 

80,417


 

80,608


 

395,050


Income tax expense

(44,719)


(25,734)


(22,449)


(19,420)


(112,322)


Earnings before earnings (loss) from unconsolidated affiliates          

 

98,330


 

65,242


 

57,968


 

61,188


 

282,728


Earnings (loss) from unconsolidated affiliates

383


974


1,564


(825)


2,096


Net earnings

98,713


66,216


59,532


60,363


284,824


Net earnings attributable to noncontrolling interest

 

(29,280)


 

(21,348)


 

(24,180)


 

(26,803)


 

(101,611)


Net earnings attributable to Greenbrier

$        69,433


$         44,868


$        35,352


$      33,560


$     183,213













Basic earnings per common share (1)

$             2.36


$            1.54


$            1.22


$          1.15


$           6.28


Diluted earnings per common share (1)

$             2.15


$            1.41


$            1.12


$          1.06


$           5.73




(1)

Quarterly amounts 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.

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION
(In thousands, unaudited)


Segment Information


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












Three months ended November 30, 2016:





















Revenue


Earnings (loss) from operations



External


Intersegment


  Total


External


Intersegment


Total


Manufacturing

$           454,033


$                       -


$         454,033


$          83,341


$                       -


$       83,341


Wheels & Parts

69,635


7,201


76,836


2,894


612


3,506


Leasing & Services

28,646


5,334


33,980


7,390


5,250


12,640


Eliminations

-


(12,535)


(12,535)


-


(5,862)


(5,862)


Corporate

-


-


-


(20,965)


-


(20,965)



$           552,314


$                      -


$         552,314


$           72,660


$                       -


$       72,660


 


Total assets



 February 28,


  November 30,



2017


2016


Manufacturing

$              724,209


$              729,361


Wheels & Parts

280,207


279,971


Leasing & Services

505,897


471,957


Unallocated

645,665


336,061



$            2,155,978


$           1,817,350


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     




 February 28,  


November 30,




2017


2016



Revenue

$                 64,200


$                 70,300



Loss from operations

$                 (6,900)


$                 (4,600)



Total assets

$               227,200


$               238,300














 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

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


Reconciliation of Net earnings to Adjusted EBITDA





Three Months Ended





  February 28,

2017


November 30,

2016


Net earnings

$             49,001


$             47,966


Interest and foreign exchange

5,673


1,724


Income tax expense

24,858


20,386


Depreciation and amortization

14,985


15,595









Adjusted EBITDA

$             94,517


$             85,671








 




 

Three Months Ended


February 28, 2017

Backlog Activity (units)





Beginning backlog

25,800


Orders received

700


Production held as Leased railcars for syndication

(550)


Production sold directly to third parties

(3,350)


Ending backlog

22,600





Delivery Information (units)



Production sold directly to third parties

3,350


Sales of Leased railcars for syndication

550


Total deliveries

3,900


 

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


February 28,

2017

November 30,

2016

Weighted average basic common shares outstanding (1)

29,130

29,097

Dilutive effect of convertible notes (2)

3,287

3,258

Dilutive effect of performance awards (3)

10

57

Weighted average diluted common shares outstanding

32,427

32,412






(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 was included 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, 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 of using the treasury stock method, associated with shares underlying the 2024 Convertible notes and performance based restricted stock units 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


February 28,

2017

 November 30,

2016

Net earnings attributable to Greenbrier

$          34,536

$          24,962

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

 

$          35,269

 

$            25,695

 

Weighted average diluted common shares outstanding

 

32,427

 

32,412




Diluted earnings per share

$             1.09

$                0.79

 

SOURCE The Greenbrier Companies, Inc. (GBX)