The Greenbrier Companies, Inc. Annual Report 2018

FY2018 Annual Report · The Greenbrier Companies, Inc.

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2018

The Greenbrier Companies
Annual Report

LETTER FROM THE CHAIRMAN,
CHIEF EXECUTIVE OFFICER AND PRESIDENT

To Our Shareholders:

Fiscal 2018 was a strong year for Greenbrier and positions the Company well for success
as it enters fiscal 2019. Greenbrier continues to advance a four-pillar strategy to 1) defend
and grow in its core North American markets, 2) expand in international railcar markets,
3) aggressively extend its talent base through the creation of a robust Talent Pipeline, and
4) efficiently deploy capital to grow at scale in new and existing markets. Greenbrier’s
strategy for international growth continues to pay off. As the Company executes the four-
further explore ways to increase its global footprint and
pillar strategy, Greenbrier will
access new markets.

Financial Position
Greenbrier’s earnings performance in fiscal 2018 was the Company’s third-best
performance in its history, during a year which presented some distinct headwinds.
Greenbrier ended the year with a robust balance sheet, ample liquidity and no net debt,
positioning the Company for strong operating cash flow in fiscal 2019. Net earnings
attributable to Greenbrier for the year were $151.8 million, or $4.68 per diluted share, on
revenue of $2.5 billion. Aggregate gross margin dipped slightly from fiscal 2017 due to
changes in product mix, but remains healthy at 16.2%. Results included consolidated cash
balances of $530.7 million and positive net operating cash flow for the year of $103 million.
Greenbrier also renewed, extended and increased its revolving credit facility and leasing
term loan. The two facilities total $825 million and feature improved economics and fee structures. This additional
supports Greenbrier’s strategic objective to grow at scale.

liquidity

As a result of Greenbrier’s solid financial position and prospects, the Board of Directors declared a quarterly dividend of
$0.25 per share, payable on December 5, 2018 to shareholders of record as of November 14, 2018, or an annualized rate of
$1.00 per share. Greenbrier’s history of regular dividend increases supports a focus on total shareholder return. In recent years,
Greenbrier has returned over $235 million to shareholders in dividends and stock buybacks. Greenbrier’s approach to capital
deployment balances its ability to scale while providing value to shareholders. During fiscal 2019, Greenbrier will continue to
improve shareholder communications as demonstrated over the past two years with the introduction of streamlined information
presentation, graphics and other visual enhancements to the Company’s proxy.

Manufacturing
Greenbrier has successfully capitalized on the healthy macroeconomic and freight rail outlook for North American and
international markets. The Company now has commercial and new railcar manufacturing operations on four continents and
builds large, ocean-going vessels in the U.S. for Jones Act service. Today, Greenbrier is firmly established as the second-
largest railcar manufacturer in North America and the largest builder in Europe and South America. Worldwide, Greenbrier
generated more than $2.0 billion in revenue for the year from Manufacturing. Greenbrier enters fiscal 2019 with a diversified
railcar backlog of 27,400 units valued at $2.7 billion.

Greenbrier achieved several key milestones in fiscal 2018, including delivering 20,900 railcars, the highest total since 2015, and
securing orders for 21,900 new railcars valued at approximately $2.2 billion, the Company’s best rate in three years. Greenbrier
is optimistic about the future as its Engineering teams are working diligently with their Commercial and Leasing counterparts to
identify new product opportunities and railcar design innovations for the Company’s global markets.

Leasing & Services
Greenbrier’s lease fleet utilization at August 31, 2018 was 94%. Due to supply and demand forces, leasing rates have increased
modestly in fiscal 2018. However, Greenbrier expects improving lease rates in fiscal 2019 as traffic continues to increase. The
active, in-service fleet in North America should approach effective full utilization by calendar year-end 2018 (estimated by many
analysts to be 90% of the fleet in actual service due to seasonality and storage of less efficient railcars). Along with continued
lower velocity on the rail system and railcar shortages in many categories, railcar demand and lease rates should continue to be
steady and strong.

Greenbrier has an active leasing company and a unique asset management services business that are both growing rapidly,
constituting a distinct competitive advantage for the Company and its customers. Greenbrier’s syndication platform allows
in the world, and its management services platform (Greenbrier
Greenbrier access to the most competitive cost of capital
Management Services, or GMS) now touches nearly 25% of the operating North American fleet, with almost 370,000 railcars

under active, multi-faceted asset management. Greenbrier is rebuilding its owned fleet, cycling out older railcars and achieving
tax benefits from new equipment on strong operating leases. In fiscal 2018, Greenbrier renewed leases or remarketed more
than 5,000 railcars.

Thanks to its extensive designs, product and commercial coverage, along with its syndication and asset management
platforms, Greenbrier’s integrated business model provides the opportunity to create substantial value for its customers and
shareholders.

Greenbrier Rail Services (GRS)
Greenbrier’s investment in the GBW railcar repair joint venture did not deliver the returns expected. In August 2018, Greenbrier
and its partner, Watco, dissolved GBW. Greenbrier received 12 legacy repair shops and cash under the terms of the dissolution
agreement. The repair shops have been assumed within the Wheels, Repair & Parts segment, the operating name of which has
reverted to Greenbrier Rail Services (GRS). This reorganization provides an opportunity to profitably operate a smaller railcar
repair shop network that is better integrated with Greenbrier’s successful wheels and parts businesses. GRS continues to see
increased volume in most product lines, and Greenbrier expects steadily improving financial performance in the unit during fiscal
2019.

International
Greenbrier reached a new milestone in its international growth during fiscal 2018 with about 30% of orders and 25% of
deliveries for the fiscal year coming from outside North America.

Greenbrier’s railcar deliveries in Brazil have reached their highest levels since 2016, and backlog in Europe remains strong. The
improvements in the Company’s Romanian plants that
integration of Astra Rail
Greenbrier anticipates will boost overall profitability of the business.

in Europe continues through operational

Greenbrier also continues to assist the Saudi Railway Company (SAR) with creating and maximizing existing and new rail routes
for freight movement throughout the Kingdom and, ultimately, the Gulf Cooperation Council region. Together Greenbrier and
SAR will invest and generate investments totaling 1 billion Saudi riyals ($270 million USD) in the Saudi rail industry. Based on
achieving identified milestones, Greenbrier will provide the venture up to $100 million USD (370 million Saudi riyals) in new
railcars, lift equipment and other terminal investments necessary to place railcars in revenue service, and will operate intermodal
and other freight terminals. SAR will provide locomotives, rail access and service schedules to the venture to facilitate line haul
services. Using its investment syndication model, Greenbrier will facilitate raising $170 million USD (630 million Saudi riyals) in
collaboration with SAR and international public and private investment communities.

In Turkey, Greenbrier took a majority interest in Rayvag, a railcar builder and repair provider. As Greenbrier assesses the
capabilities of Rayvag and develops commercial strategies, the Company foresees a potential agreement to produce hundreds
of wagons over the next several years.

Conclusion
Fiscal 2018 was a year of growth and operational success for Greenbrier. The Company continued its focused strategy of
enhancing core markets in North America, while expanding its international footprint for growth and diversification. Greenbrier
anticipates that the continued growth of its global operations, a favorable economy, and strong rail fundamentals will
lead to
higher revenues and deliveries in fiscal 2019. Greenbrier is also entering its next fiscal year with a strong financial profile and
liquidity as a result of its strategy to deploy capital to increase scale. Based on this range of positive indicators,
additional
Greenbrier expects to achieve a new milestone in 2019 and exceed the $3 billion mark in total revenue.

Greenbrier’s success could not be achieved without its people, which is why building a robust Talent Pipeline is part of the
Company’s strategic platform for fiscal 2019 and beyond. Greenbrier knows that our employees create the success we all
share. For this reason, Greenbrier recognizes the importance of providing our employees with careers where they can feel safe,
be healthy, and thrive. Greenbrier is committed to the health and safety of our employees and recognizes it as its number one
priority.

As the Company has grown, Greenbrier’s commitment to the communities it calls home has expanded. Giving back is
important and Greenbrier prioritizes a high level of community involvement everywhere it operates. Annually, Greenbrier
improves and supports its communities through dedicating tens of thousands of employee volunteer hours to hands-on
charitable assistance and disaster relief. Likewise, Greenbrier contributes hundreds of thousands of dollars globally each year in
direct charitable giving.

The future for Greenbrier is bright, and we look forward to delivering even more in fiscal 2019.

Thank you for your continued support.

Sincerely,

William A. Furman
Chairman, Chief Executive Officer and President

November 2018

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004
FORM 10-K

È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2018

‘ Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

for the transition period from

Commission File No. 1-13146

THE GREENBRIER COMPANIES, INC.
(Exact name of Registrant as specified in its charter)

Oregon
(State of Incorporation)

93-0816972
(I.R.S. Employer Identification No.)

One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035
(Address of principal executive offices)

(503) 684-7000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of Each Class)
Common Stock without par value

(Name of Each Exchange on Which Registered)
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act. Yes

No X

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [

]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in
Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer X Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

No X

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. ‘

Aggregate market value of the Registrant’s Common Stock held by non-affiliates as of February 28, 2018 (based on the closing price of such
shares on such date) was $1,465,342,435.

The number of shares outstanding of the Registrant’s Common Stock on October 19, 2018 was 32,190,763 without par value.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant’s definitive Proxy Statement prepared in connection with the Annual Meeting of Stockholders to be held on
January 9, 2019 are incorporated by reference into Parts II and III of this Report.

THE GREENBRIER COMPANIES, INC.

FORM 10-K

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART I

PAGE

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Item 1A. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B.
PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
MINE SAFETY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4.
EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

Item 5.

Item 6.
Item 7.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

Item 8.
Item 9.

RISK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . .
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III

Item 10.
Item 11.
Item 12.

Item 13.

Item 14.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . .
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL ACCOUNTING FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . .

PART IV

Item 15.
Item 16.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . .
FORM 10-K SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
12
31
31
31
31
32

33
35

50
52

88
88
92

92
92

93
96
97
98

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Forward-Looking Statements

From time to time, The Greenbrier Companies, Inc. and its subsidiaries (Greenbrier or the Company) or their
representatives have made or may make forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including, without limitation, statements as to expectations, beliefs and strategies regarding the future. Such
forward-looking statements may be included in, but not limited to, press releases, oral statements made with the
approval of an authorized executive officer or in various filings made by us with the Securities and Exchange
Commission (SEC), including this filing on Form 10-K and in the Company’s President’s letter to stockholders
that is typically distributed to the stockholders in conjunction with this Form 10-K and the Company’s Proxy
Statement. These statements involve known and unknown risks, uncertainties and other important factors that
may cause our actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements. Investors should not place
undue reliance on forward-looking statements, which speak only as of the date they are made and are not
guarantees of future performance. We undertake no obligations to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.

These forward-looking statements rely on a number of assumptions concerning future events and include
statements relating to:
•
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ability to grow our businesses;
ability to obtain lease and sales contracts which provide adequate protection against attempted modifications
or cancellations, changes in interest rates and increased costs of materials and components;
ability to convert backlog of railcar orders and obtain and execute lease syndication commitments;
ability to recruit, train and retain adequate numbers of qualified employees
ability to obtain adequate certification and licensing of products;
availability of financing sources and borrowing base and loan covenant flexibility for working capital, other
business development activities, capital spending and leased railcars for syndication (sale of railcars with
lease attached);
ability to utilize beneficial tax strategies;
ability to renew, maintain or obtain sufficient credit facilities and financial guarantees on acceptable terms
including loan covenants;
ability to obtain adequate insurance coverage at acceptable rates; and
short-term and long-term revenue and earnings effects of the above items.

•
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•

The following factors, among others, could cause actual results or outcomes to differ materially from the
forward-looking statements:
•

fluctuations in demand for newly manufactured railcars or marine barges, for wheels, repair services and
parts and for railcar management and leasing services;
delays in receipt of orders, risks that contracts may be canceled or modified during their term, not renewed,
unenforceable or breached by the customer and that customers may not purchase the amount of products or
services under the contracts as anticipated;
availability of a trained work force at a reasonable cost and with reasonable terms of employment;
our ability to maintain good relationships with our labor force, third party labor providers and collective
bargaining units representing our direct and indirect labor force;
domestic and international economic conditions including such matters as embargoes, quotas, tariffs, or
modifications to existing trade agreements;
domestic and international political and security conditions including such matters as terrorism, war, civil
disruption and crime;
the policies and priorities of the federal government
infrastructure and corporate taxation;
sovereign risk related to international governments that includes, but is not limited to, governments stopping
payments, repudiating their contracts, nationalizing private businesses and assets or altering foreign exchange
regulations;
growth or reduction in the surface transportation industry, the enactment of policies favoring other types of
surface transportation over rail transportation or the impact from technological advances;

including those concerning international

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trade,

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

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•
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our ability to maintain sufficient availability of credit facilities and to maintain compliance with or to obtain
appropriate amendments to covenants under various credit agreements;
our ability to maintain good relationships with our customers and suppliers;
our ability to renew or replace expiring customer contracts on satisfactory terms;
our ability to obtain and execute suitable lease contracts for leased railcars for syndication;
steel and specialty component price fluctuations and availability, scrap surcharges, steel scrap prices and
other commodity price fluctuations and availability and their impact on product demand and margin;
the delay or failure of acquired businesses or joint ventures, assets, start-up operations, or new products or
services to compete successfully;
our failure to successfully integrate joint ventures or acquired businesses or complete previously announced
transactions;
discovery of previously unknown liabilities associated with acquired businesses;
changes in product mix and the mix of revenue levels among reporting segments;
labor disputes, energy shortages or operating difficulties that might disrupt 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,
equipment failures, changing technologies, transfer of production between facilities or non-performance of
alliance partners, subcontractors or suppliers;
lower than anticipated lease renewal rates, earnings on utilization-based leases or residual values for owned
or managed leased equipment;
discovery of defects in railcars or services resulting in increased warranty costs or litigation;
physical damage, business interruption or product or service liability claims that exceed our insurance
coverage;
commencement of and ultimate resolution or outcome of pending or future litigation and investigations;
natural disasters or severe or unusual weather patterns that may affect either us, our suppliers or our
customers;
loss of business from, or a decline in the financial condition of, any of the principal customers that represent a
significant portion of our total revenues;
competitive factors, including introduction of competitive products, new entrants into certain of our markets,
price pressures, limited customer base, and competitiveness of our manufacturing facilities and products;
industry overcapacity and our manufacturing capacity utilization;
decreases or write-downs in carrying value of inventory, goodwill, intangibles or other assets due to
impairment;
severance or other costs or charges associated with layoffs, shutdowns, or reducing the size and scope of
operations;
changes in future maintenance or warranty requirements;
our ability to adjust to the cyclical nature of the industries in which we operate;
changes in interest rates and financial impacts from interest rates;
our ability and cost to maintain and renew operating permits;
actions or failures to act by various regulatory agencies including changing tank car or other rail car
regulations;
potential environmental remediation obligations;
changes in commodity prices, including oil and gas;
risks associated with our intellectual property rights or those of third parties, including infringement,
maintenance, protection, validity, enforcement and continued use of such rights;
expansion of warranty and product support terms beyond those which have traditionally prevailed in the rail
supply industry;
availability and/or price of essential raw materials, specialties or components, including steel castings, to
permit manufacture of units on order;
the failure of, or our delay in implementing and using, new software or other technologies;
the impact of cybersecurity risks and the costs of mitigating and responding to a data security breach;
our ability to replace maturing lease and management services revenue and earnings from equipment sold
from our lease fleet with revenue and earnings from new commercial transactions, including new railcar
leases, additions to the lease fleet and new management services contracts;
financial impacts from currency fluctuations and currency hedging activities in our worldwide operations;

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

•
•

•

credit limitations upon our ability to maintain effective hedging programs;
increased costs or other impacts on us or our customers due to changes in legislation, taxes, regulations or
accounting pronouncements;
our ability to effectively execute our business and operating strategies if we become the target of shareholder
activism; and
fraud, misconduct by employees and potential exposure to liabilities under the Foreign Corrupt Practices Act
and other anti-corruption laws and regulations.

Any forward-looking statements should be considered in light of these factors. 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 identify forward-looking statements. These forward-
looking statements are not guarantees of future performance and are subject to risks and uncertainties that could
cause actual results to differ materially from the results contemplated by the forward-looking statements. Many
of the important factors that will determine these results and values are beyond our ability to control or predict.
You are cautioned not to place undue reliance on any forward-looking statements, which reflect management’s
opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to
update any forward-looking statements.

In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary
statements contained in this Form 10-K, including, without limitation, those contained under the heading, “Risk
Factors,” contained in Part I, Item 1A of this Form 10-K.

All references to years refer to the fiscal years ended August 31st unless otherwise noted.

The Greenbrier Companies is a registered trademark of The Greenbrier Companies, Inc. Gunderson, Maxi-Stack,
Auto-Max and YSD are registered trademarks of Gunderson LLC.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

PART I

Item 1. BUSINESS

Introduction

We are one of the leading designers, manufacturers and marketers of railroad freight car equipment in North
America, Europe and South America. We manufacture railcars in Brazil through a strategic investment that we
account for under the equity method of accounting and are a manufacturer and marketer of marine barges in
North America. We are a leading provider of freight railcar wheel services, parts, repair and refurbishment in
North America through our wheels, repair & parts business. We also offer railcar management, regulatory
compliance services and leasing services to railroads and related transportation industries in North America.
Through unconsolidated affiliates, we produce industrial and rail castings, tank heads and other components.

We operate an integrated business model in North America that combines freight car manufacturing, wheel
services, repair, refurbishment, component parts, leasing and fleet management services. Our model is designed
to provide customers with a comprehensive set of freight car solutions utilizing our substantial engineering,
mechanical and technical capabilities as well as our experienced commercial personnel. This model allows us to
develop cross-selling opportunities and synergies among our various business segments and to enhance our
margins. We believe our integrated model is difficult to duplicate and provides greater value for our customers.

We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services.
Financial information about our business segments as well as geographic information is located in Note 19
Segment Information to our Consolidated Financial Statements. Prior to August 20, 2018, we operated in four
reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On
August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW Railcar
Services (GBW) railcar repair joint venture, which resulted in 12 repair shops returned to us. Beginning on
August 20, 2018, GBW Joint Venture was no longer considered a reportable segment.

The Greenbrier Companies, Inc., is incorporated in Oregon. Our principal executive offices are located at One
Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035, our telephone number is (503) 684-7000 and our
Internet website is located at http://www.gbrx.com.

Products and Services
Manufacturing Segment

North American Railcar Manufacturing - We manufacture a broad array of railcar types in North America,
which includes most railcar types other than coal cars. We have demonstrated an ability to capture high market
shares in many of the car types we produce. The primary products we produce for the North American market
are:

Intermodal Railcars - We manufacture a comprehensive range of intermodal railcars. Our most important
intermodal product is our articulated double-stack railcar. The double-stack railcar is designed to transport
containers stacked two-high on a single platform and provides significant operating and capital savings over
other types of intermodal railcars.

Tank Cars - We produce a variety of tank cars, including both general and certain pressurized tank cars, which
are designed for the transportation of products such as petroleum products, ethanol, liquefied petroleum gas,
caustic soda, chlorine, urea ammonium nitrate, vegetable oils, bio-diesel and various other products and we
continue to expand our product offerings.

Automotive - We manufacture a full line of railcar equipment specifically designed for the transportation of light
vehicles. Our automotive offerings include the Auto-Max II and Multi-Max products, which are designed to carry
automobiles, SUVs and trucks efficiently.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Conventional Railcars - We produce a variety of covered hopper cars for the grain, fertilizer, sand, cement and
petrochemical industries as well as gondolas and open top hoppers for the steel, metals and aggregate markets.
We also produce a wide range of boxcars, which are used in the transport of paper products, perishables, general
merchandise and commodities. Our flat car products include center partition cars for the forest products industry,
bulkhead flat cars, heavy-duty flat cars, and solid waste service flat cars.

European Railcar Manufacturing - Our European manufacturing operations produce a variety of tank,
automotive and conventional freight railcar (wagon) types, including a comprehensive line of pressurized tank
cars for liquid petroleum gas and ammonia and non-pressurized tank cars for light oil, chemicals and other
products. In addition, we produce flat cars, coil cars for the steel and metals market, gondolas, sliding wall cars
and automobile transporter cars.

Marine Vessel Fabrication - Our Portland, Oregon manufacturing facility, located on a deep-water port on the
Willamette River, includes marine vessel fabrication capabilities. The marine facilities also increase utilization of
steel plate burning and fabrication capacity providing flexibility for railcar production. U.S. coastwise law,
commonly referred to as the Jones Act, requires all commercial vessels transporting merchandise between ports
in the U.S. to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag. We
manufacture a broad range of Jones Act ocean-going and river barges for transporting merchandise between ports
within the U.S. including conventional deck barges, double-hull tank barges, railcar/deck barges, barges for
aggregates and other heavy industrial products and dump barges. Our primary focus is on the larger ocean-going
vessels although the facility has the capability to compete in other marine-related products.

Wheels, Repair & Parts Segment

Wheel Services - We operate a large wheel services network in North America. Our wheel shops, operating in
eight locations, provide complete wheel services including reconditioning of wheels and axles in addition to new
axle machining and finishing and axle downsizing.

Railcar Repair, Refurbishment and Maintenance - We operate a railcar repair, refurbishment and maintenance
network in North America including repair shops certified by the Association of American Railroads (AAR). Our
repairs shops, operating at 12 locations, perform heavy railcar repair, refurbishment and routine railcar
maintenance for third parties and our leased and managed railcar fleet.

Component Parts Manufacturing - Our component parts facilities, operating in four locations, recondition and
manufacture railcar cushioning units, couplers, yokes, side frames, bolsters and various other parts. We also
produce roofs, doors and associated parts for boxcars.

Leasing & Services Segment

Leasing - Through our North American leasing business, our relationships with financial institutions, combined
with our ownership of a lease fleet of approximately 8,100 railcars (6,300 railcars held as equipment on operating
leases, 1,600 held as leased railcars for syndication and 200 held as finished goods inventory), enables us to offer
flexible financing programs including operating leases and “by the mile” leases to our customers. In addition, we
frequently originate leases of railcars, which are either newly built or refurbished by us, or buy railcars from the
secondary market, and sell the railcars and attached leases to financial institutions and subsequently provide such
institutions with management services under multi-year agreements. As an equipment owner and an originator of
leases, we participate principally in the operating lease segment of the market. The majority of our leases are
“full service” leases whereby we are responsible for maintenance and administration. Assets from our owned
lease fleet are periodically sold to take advantage of market conditions, manage risk and maintain liquidity.

Management Services - Our North American management services business offers a broad array of software and
services that include railcar maintenance management, railcar accounting services (such as billing and revenue
collection, car hire receivable and payable administration), total fleet management (including railcar tracking
using proprietary software), administration and railcar re-marketing. We currently provide management services

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

for a fleet of approximately 357,000 railcars for railroads, shippers, carriers, institutional investors and other
leasing and transportation companies in North America. In addition, we have a Regulatory Services Group which
offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail
shipper community, among other services.

Customer Profile

Managed Units:
Class I Railroads
Leasing Companies
Shipping Companies
Non-Class I Railroads
Off-lease

Total Managed Units

Total Owned Units (2)

Total Owned & Managed Units

Fleet Profile (1)
As of August 31, 2018

178,611
105,675
51,369
20,115
985

356,755
8,070

364,825

(1) Each platform of a railcar is treated as a separate unit.
(2) The percentage of owned units on lease was 94.4% at August 31, 2018 with an average remaining lease term of 2.2 years. The average

age of owned units is 10 years.

Unconsolidated Affiliates

Brazilian Railcar Manufacturing - We have a 60% ownership interest in Greenbrier-Maxion Equipamentos E
Serviços Ferroviários S.A. (Greenbrier-Maxion), the leading railcar manufacturer in South America, located near
São Paolo, Brazil. Greenbrier-Maxion also assembles bogies and offers a range of aftermarket services including
railcar overhaul and refurbishment.

Brazilian Castings and Component Parts Manufacturing - We have a 24.5% ownership interest in Amsted-
Maxion Fundição E Equipamentos Ferroviários S.A. (Amsted-Maxion Cruzeiro) based in Cruzeiro, Brazil.
Amsted-Maxion Cruzeiro is a manufacturer of various castings and components for railcars and other heavy
industrial equipment. Amsted-Maxion Cruzeiro has a 40% ownership position in Greenbrier-Maxion and is
integrated with the operations of our Brazilian railcar manufacturer.

Other Unconsolidated Affiliates - We have other unconsolidated affiliates which primarily include joint ventures
that produce rail and industrial castings and tank heads.

Backlog

The following table depicts our reported third party railcar backlog in number of railcars and estimated future
revenue value attributable to such backlog, at the dates shown:

New railcar backlog units (1)
Estimated future revenue value (in millions) (2)
(1) Each platform of a railcar is treated as a separate unit.
(2) Subject to change based on finalization of product mix.

August 31,
2017

2016

2018

27,400
$ 2,740

28,600
$ 2,800

27,500
$ 3,190

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Based on current production schedules, approximately 20,500 units in the August 31, 2018 backlog are scheduled
for delivery in 2019. The balance of the production is scheduled for delivery in 2020 and beyond. Multi-year
supply agreements are a part of rail industry practice. Backlog units for lease may be syndicated to third parties
or held in our own fleet depending on a variety of factors. A portion of the orders included in backlog reflects an
assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future,
which may impact the dollar amount of backlog. Marine backlog as of August 31, 2018 was $61 million
compared to $42 million as of August 31, 2017.

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 and completion of terms. Customers may
attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the
quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time
to time. We cannot guarantee that our reported backlog will convert to revenue in any particular period, if at all.

Customers

Our customers include railroads, leasing companies, financial institutions, shippers, carriers and transportation
companies. We have strong, long-term relationships with many of our customers. We believe that our customers’
leadership in developing innovative products and
preference for high quality products, our technological
competitive pricing of our railcars have helped us maintain our long-standing relationships with our customers.

In 2018, revenue from two customers, TTX Company (TTX) and Wells Fargo & Company (Wells Fargo),
accounted for approximately 31% of total revenue, 36% of Manufacturing revenue, 16% of Wheels, Repair &
Parts revenue and 1% of Leasing & Services revenue. No other customers accounted for greater than 10% of total
revenue.

Raw Materials and Components

Our products require a supply of materials including steel and specialty components such as brakes, wheels and
axles. Specialty components purchased from third parties represent a significant amount of the cost of most
freight cars. Our customers often specify particular components and suppliers of such components. Although the
number of alternative suppliers of certain specialty components has declined in recent years, there are at least two
available suppliers for these components.

Certain materials and components are periodically in short supply which could potentially impact production at
our new railcar and refurbishment facilities. In an effort to mitigate shortages and reduce supply chain costs, we
have entered into strategic alliances and multi-year arrangements for the global sourcing of certain materials and
components, we operate a replacement parts business and we continue to pursue strategic opportunities to protect
and enhance our supply chain. We periodically make advance purchases to avoid possible shortages of material
due to capacity limitations of component suppliers, shipping and transportation delays and possible price
increases.

In 2018, the top ten suppliers for all inventory purchases accounted for approximately 52% of total purchases.
Amsted Rail Company, Inc. accounted for 19% of total inventory purchases in 2018. No other suppliers
accounted for more than 10% of total inventory purchases. We believe we maintain good relationships with our
suppliers.

Competition

We are currently the second largest railcar manufacturer in North America of the seven major railcar
manufacturers competing in North America. There are a handful of specialty builders who focus on niche
markets. We believe that in Europe we are in the top tier of railcar manufacturers. European freight car
manufacturers are largely located in central and eastern Europe where labor rates are lower and work rules are
more flexible. We are the leading railcar manufacturer in South America. The railcar manufacturing industry is
becoming more global as customers are purchasing railcars from manufacturers outside of their geographic
region. In all railcar markets that we serve or participate in, we compete on the basis of quality, price, reliability
of delivery, product design and innovation, reputation and customer service and support.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Competition in the marine industry is dependent on the type of product produced. There are few competitors that
build product types similar to ours. We compete on the basis of price, quality, reliability of delivery, launching
capacity and experience with certain product types.

Competition in the wheels, repair & parts businesses is dependent on the type of product or service provided.
There are many competitors in the railcar repair and refurbishment business and an increasing number of
competitors in the wheel services and other parts businesses. We compete primarily on the basis of quality,
timeliness of delivery, customer service, location of shops, price and engineering expertise.

There are at least twenty institutions in North America that provide railcar leasing and services similar to ours.
Many of them are also customers that buy new railcars from our manufacturing facilities and used railcars from
our lease fleet, as well as utilize our management services. Many of these institutions have greater financial
resources than we do. We compete primarily on the basis of quality, price, delivery, reputation, service offerings
and deal structuring and syndication ability. We believe our strong servicing capability and our ability to sell
railcars with a lease attached (syndicate railcars), integrated with our manufacturing, repair shops, railcar
specialization and expertise in particular lease structures provide a strong competitive position.

Marketing and Product Development

In North America, we leverage an integrated marketing and sales effort to coordinate relationships in our various
segments. We provide our customers with a diverse range of equipment and financing alternatives designed to
satisfy each customer’s unique needs, whether the customer is buying new equipment, refurbishing existing
equipment or seeking to outsource the maintenance or management of equipment. These custom programs may
involve a combination of railcar products, leasing, refurbishing and remarketing services. In addition, we provide
customized maintenance management, equipment management, accounting and compliance services and
proprietary software solutions.

In Europe and South America, we maintain relationships with customers through market-specific sales personnel.
Our engineering and technical staff works closely with their customer counterparts on the design and certification
of railcars. Many European railroads are state-owned and are subject to European Union (EU) regulations
covering the tender of government contracts.

Through our research and customer relationships, insights are derived into the potential need for new products
and services. Marketing and engineering personnel collaborate to evaluate opportunities and develop new
products and features. Recent product launches include the Dura-Max open top hopper and small pressurized
tank cars optimized for the transport of chlorine. Research and development costs incurred during the years
ended August 31, 2018, 2017 and 2016 were $6.0 million, $4.2 million and $2.7 million, respectively.

Patents and Trademarks

We have a number of U.S. and non-U.S. patents of varying duration, and pending patent applications, registered
trademarks, copyrights and trade names that are important to our products and product development efforts. The
protection of our intellectual property is important to our business and we have a proactive program aimed at
protecting our intellectual property and the results from our research and development.

Environmental Matters

We are subject to national, state and local environmental laws and regulations concerning, among other matters,
air emissions, wastewater discharge, solid and hazardous waste disposal and employee health and safety. Prior to
acquiring facilities, we usually conduct
investigations to evaluate the environmental condition of subject
properties and may negotiate contractual terms for allocation of environmental exposure arising from prior uses.
We operate our facilities in a manner designed to maintain compliance with applicable environmental laws and
regulations. Environmental studies have been conducted on certain of our owned and leased properties that
indicate additional investigation and some remediation on certain properties may be necessary.

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Portland Harbor Superfund Site

Our Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the
U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the
Portland Harbor, including the portion fronting our manufacturing facility, as a federal “National Priority List” or
“Superfund” site due to sediment contamination (the Portland Harbor Site). Our company and more than 140
other parties have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor
Site. The letter advised us that we may be liable for the costs of investigation and remediation (which liability
may be joint and several with other potentially responsible parties) as well as for natural resource damages
resulting from releases of hazardous substances to the site. Ten private and public entities, including us (the
Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial
investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional
entities have not signed such consent, but nevertheless contributed money to the effort. The EPA-mandated RI/
FS was produced by the LWG and cost over $110 million during a 17-year period. We bore a percentage of the
total costs incurred by the LWG in connection with the investigation. Our aggregate expenditure during the
17-year period was not material. Some or all of any such outlay may be recoverable from other responsible
parties. The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and
accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the
Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the
federal government, entered into a non-judicial mediation process to try to allocate costs associated with
remediation of the Portland Harbor site. Approximately 110 additional parties signed tolling agreements related
to such allocations. On April 23, 2009, we and the other AOC signatories filed suit against 69 other parties due to
a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S.
District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling
agreements and be dismissed without prejudice, and the case has been stayed by the court until January 16, 2020.
The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active
remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA
typically expects its cost estimates to be accurate within a range of -30% to +50%, but this ROD states that
changes in costs are likely to occur as a result of new data it wants to collect over a 2-year period prior to final
remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the
nearshore area of the river sediments offshore of our Portland, Oregon manufacturing facility as well as upstream
and downstream of the facility. It also includes a portion of our riverbank. The ROD does not break down total
remediation costs by Sediment Decision Unit. The EPA’s ROD concluded that more data was needed to better
define clean-up scope and cost. On December 8, 2017, the EPA announced that Portland Harbor is one of 21
Superfund sites targeted for greater attention. On December 19, 2017, the EPA announced that it had entered a
new AOC with a group of four potentially responsible parties to conduct additional sampling during 2018 and
2019 to provide more certainty about clean-up costs and aid the mediation process to allocate those costs. The
parties to the mediation, including us, have agreed to help fund the additional sampling.

The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the
potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup remedy
will be determined at an unspecified later date. Based on the investigation to date, we believe that we did not
contribute in any material way to contamination in the river sediments or the damage of natural resources in the
Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to our property
precedes our ownership of
the Portland, Oregon manufacturing facility. Because these environmental
investigations are still underway, including the collection of new pre-remedial design sampling data by EPA,
sufficient information is currently not available to determine our liability, if any, for the cost of any required
remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results
of the pending investigations and future assessments of natural resource damages, we may be required to incur
costs associated with additional phases of investigation or remedial action, and may be liable for damages to
natural resources. In addition, we may be required to perform periodic maintenance dredging in order to continue

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to launch vessels from our launch ways in Portland, Oregon, on the Willamette River, and the river’s
classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of
these matters could adversely affect our business and Consolidated Financial Statements, or the value of our
Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including us as well
as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to
the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the
Yakama Nation v. Air Liquide America Corp., et al., United States Court for the District of Oregon Case No.
3i17-CV-00164-SB. We, along with many of the other defendants, moved to dismiss the case. That motion is
pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

We have entered into a Voluntary Cleanup Agreement with the DEQ in which we agreed to conduct an
investigation of whether, and to what extent, past or present operations at our Portland property may have
released hazardous substances into the environment. We have also signed an Order on Consent with the DEQ to
finalize the investigation of potential onsite sources of contamination that may have a release pathway to the
Willamette River. Interim precautionary measures are also required in the order and we are discussing with the
DEQ potential remedial actions which may be required. Our aggregate expenditure has not been material,
however we could incur significant expenses for remediation. Some or all of any such outlay may be recoverable
from other responsible parties.

Regulation

We must comply with the rules of the U.S. Department of Transportation (USDOT) and the administrative
agencies it oversees including the Federal Railroad Administration in the U.S. and Transport Canada in Canada
who administer and enforce laws and regulations relating to railroad safety. These regulations govern equipment
and safety appliance standards for freight cars and other rail equipment used in interstate and international
commerce throughout North America. The AAR promulgates rules and regulations governing the safety and
design of equipment, relationships among railroads and other railcar owners with respect
to railcars in
interchange, and other matters. The AAR also certifies railcar builders and component manufacturers that
provide equipment for use on North American railroads. These regulations require maintaining certifications with
the AAR as a railcar builder, repair and service provider and component manufacturer, and products sold and
leased by us in North America must meet AAR, Transport Canada, and Federal Railroad Administration
standards.

The primary regulatory and industry authorities involved in the regulation of the ocean-going barge industry are
the U.S. Coast Guard, the Maritime Administration of the USDOT, and private industry organizations such as the
American Bureau of Shipping.

The regulatory environment in Europe consists of a combination of EU regulations and country specific
regulations, including a harmonized set of Technical Standards for Interoperability of freight wagons throughout
the EU. The regulatory environment in Brazil consists of oversight from the Ministry of Transportation, the
National Agency of Ground Transportation and the National Association of Railroad Transporters. In all other
countries, we conform to country specific regulations where applicable.

Employees

As of August 31, 2018, we had approximately 13,400 full-time employees at our consolidated entities, consisting
of 12,100 employees in Manufacturing, 1,000 in Wheels, Repair & Parts and 300 employees in Leasing &
Services and corporate. In Manufacturing, 7,300 employees, all of whom are located in Mexico and Europe, are
represented by unions. At our Wheels, Repair & Parts locations, 73 employees are represented by a union. We
believe that our relations with our employees are generally good.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Additional Information

We are a reporting company and file annual, quarterly, current and special reports, proxy statements and other
information with the SEC. Through a link on the Investor Relations section of our website, http://www.gbrx.com,
we make available the following filings as soon as reasonably practicable after they are electronically filed with
or furnished to the SEC: our Annual Report on Form 10-K; Quarterly Reports on Form 10-Q; Current Reports on
Form 8-K; and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended. All such filings are available free of charge. Copies of our Audit
Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee
Charter and the Company’s Corporate Governance Guidelines are also available on our web site at
http://www.gbrx.com. In addition, each of the reports and documents listed above are available free of charge by
contacting our Investor Relations Department at The Greenbrier Companies, Inc., One Centerpointe Drive, Suite
200, Lake Oswego, Oregon 97035.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 1A. RISK FACTORS

In addition to the risks outlined in this annual report under the heading “Forward-Looking Statements,” as well as
other comments included herein regarding risks and uncertainties, the following risk factors should be carefully
considered when evaluating our company. Our business, financial condition or financial results could be
materially and adversely affected by any of these risks. In addition, new risks may emerge at any time, and we
cannot predict those risks or estimate the extent to which they may affect us.

The cyclical nature of our business, economic downturns or a rising interest rate environment can result in
lower demand for our products and services and reduced revenue.

Our business is cyclical. Overall economic conditions and the purchasing practices of buyers have a significant
effect upon our business due to the impact on demand for our products and services. As a result, during
downturns, we could operate with a lower level of backlog and may slow down or halt production at some or all
of our facilities. Economic conditions that result in higher interest rates increase the cost of new leasing
arrangements, which could cause some of our leasing customers to lease fewer of our railcars or demand shorter
lease terms. An economic downturn or increase in interest rates may reduce demand for our products and
services, resulting in lower sales volumes, lower prices, lower lease utilization rates and decreased profits.

Interest rates remain at relatively low levels. Higher interest rates could increase the cost of, or potentially deter,
new leasing arrangements with our customers, reduce our ability to syndicate railcars under lease to financial
institutions, or impact the sales price we may receive on such syndications, any of which could materially
adversely affect our business, financial condition and results of operations.

A change in our product mix due to shifts in demand or fluctuations in commodity and energy prices could
have an adverse effect on our profitability.

We manufacture, lease and repair a variety of railcars. The demand for specific types of these railcars and mix of
repair and refurbishment work varies from time to time. Instability and changes in the global economy, volatility
in the industries that our products serve or adverse changes in the financial condition of our customers could
adversely impact the demand for our railcars. In addition, fluctuations in commodity and energy prices, including
crude oil and gas prices, could negatively impact the activities of our customers resulting in a corresponding
adverse effect on the demand for our products and services. These shifts in demand could affect our results of
operations and could have an adverse effect on our profitability. Demand for railcars that are used to transport
crude oil and other energy related products is dependent on the demand for these commodities. Prices for oil and
gas are subject to large fluctuations in response to relatively minor changes in the supply of, and demand for, oil
and gas, market uncertainty and a variety of other economic factors that are beyond our control.

A decline in performance of the rail freight industry would have an adverse effect on our financial condition
and results of operations.

Our future success depends in part upon the performance of the rail freight industry, which in large part depends
on the health of the economy. If railcar loadings, railcar and railcar components replacement rates or
refurbishment rates or industry demand for our railcar products weaken or otherwise do not materialize, if railcar
transportation becomes more efficient from an increase in velocity or a decrease in dwell times, if there is a
negative impact due to technological advances or if the rail freight industry becomes oversupplied, our financial
condition and results of operations would be adversely affected.

Our backlog is not necessarily indicative of the level of our future revenues.

Our manufacturing backlog represents future production for which we have written orders from our customers in
various periods, and estimated potential revenue attributable to those orders. Some of this backlog is subject to

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

certain conditions, including potential adjustment to prices due to changes in prevailing market prices, or due to
lower prices for new orders accepted by us from other customers for similar cars on similar terms and conditions
during relevant time periods. Our reported backlog may not be converted to revenue in any particular period and
some of our contracts permit cancellations with limited compensation that would not replace lost revenue or
margins. In addition, some customers may attempt to cancel or modify a contract even if the contract does not
allow for such cancellation or modification, and we may not be able to recover all revenue or earnings lost due to
a breach of contract. The likelihood of attempted cancellations or modifications of contracts generally increases
during periods of market weakness. Actual revenue from such contracts may not equal our anticipated revenues
based on our backlog, and therefore, our backlog is not necessarily indicative of the level of our future revenues.

We derive a significant amount of our revenue from a limited number of customers, the loss of or reduction of
business from one or more of which could have an adverse effect on our business.

A significant portion of our revenue is generated from a few major customers. Although we have some long-term
contractual relationships with our major customers, we cannot be assured that our customers will continue to
purchase or lease our products or services or that they will continue to do so at historical levels. A reduction in
the purchasing or leasing of our products or a termination of our services by one or more of our major customers
could have an adverse effect on our business and operating results.

We could be unable to lease railcars at satisfactory rates, remarket leased railcars on favorable terms upon
lease termination or realize the expected residual values for end of life railcars due to changes in scrap prices,
which could reduce our revenue and decrease our overall return or effect our ability to sell leased assets in the
future.

The profitability of our railcar leasing business depends on our ability to lease railcars to our customers at
satisfactory rates, and to remarket, sell or scrap railcars we own or manage upon the expiration of existing lease
terms. The total rental payments we receive under our operating leases do not fully amortize the acquisition costs
of the leased equipment, which exposes us to risks associated with remarketing the railcars and the risk of not
realizing the expected residual values. Our ability to lease or remarket leased railcars profitably is dependent
upon several factors, including, but not limited to, market and industry conditions, cost of and demand for
competing used or newer models, costs associated with the refurbishment of the railcars, market demand or
governmental mandate for refurbishment, assumptions related to expected residual values and interest rates. A
downturn in the industries in which our lessees operate and decreased demand for railcars could also increase our
exposure to remarketing risk because lessees may demand shorter lease terms, requiring us to remarket leased
railcars more frequently. Furthermore, the resale market for previously leased railcars has a limited number of
potential buyers. From August 31, 2015 to August 31, 2018, the percentage of railcars in the fleet on lease has
declined from approximately 97% to 94%. Our inability to lease, remarket or sell leased railcars on favorable
terms could result in reduced revenues and margins or net gain on disposition of equipment and decrease our
overall returns and affect our ability to syndicate railcars to investors.

Risks related to our operations outside of the U.S. could adversely affect our operating results.

Our current operations outside of the U.S. and any future expansion of our international operations are subject to
the risks associated with foreign and cross-border business transactions and activities. Political, legal, trade,
financial market or economic changes or instability could limit or curtail our foreign business activities and
operations. Some foreign countries in which we operate or may operate have regulatory authorities that regulate
railroad safety, railcar design and railcar component part design, performance and manufacturing. If we fail to
obtain and maintain certifications of our railcars and railcar parts within the various foreign countries where we
operate or may operate, we may be unable to market and sell our railcars in those countries. In addition,
unexpected changes in regulatory requirements, tariffs and other trade barriers, more stringent rules relating to
labor or the environment, adverse tax consequences and currency and price exchange controls could limit
operations and make the manufacture and distribution of our products difficult. Sovereign risk exists related to

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international governments that
include, but may not be limited to, governments stopping payments or
repudiating, renegotiating or nullifying their contracts, nationalizing private businesses and assets or altering
banking, foreign exchange or tax regulations. The uncertainty of the legal environment or geo-political risks in
these and other areas could limit our ability to enforce our rights effectively. We may experience longer customer
payment cycles, difficulty in collecting accounts receivable or an inability to effectively protect intellectual
property. Because we have operations outside the U.S., we could be adversely affected by violations of the U.S.
Foreign Corrupt Practices Act and similar worldwide anti-corruption laws. We operate in parts of the world that
have experienced governmental corruption to some degree, and in certain circumstances, strict compliance with
anti-corruption laws may conflict with local customs and practices. The failure to comply with laws governing
international business practices may result in substantial penalties and fines. Any international expansion or
acquisition that we undertake could amplify these risks related to operating outside of the U.S. Our development
of customer relationships in areas outside of the U.S. may expose us to uncertainties arising from local business
practices, judicial processes, cultural considerations and international political and trade tensions and our limited
knowledge of foreign markets or our inability to protect our interests.

If we are unable to successfully manage the risks associated with our international business, our results of
operations, financial condition, liquidity and cash flows may be negatively impacted.

Changes impacting international trade and corporate tax provisions related to the production and sales of our
products may have an adverse effect on our financial condition and results of operations.

We own, lease, operate or have invested in joint ventures or entities which have manufacturing facilities in
Mexico, Brazil and Europe. Our business benefits from free trade agreements such as the North American Free
Trade Agreement (NAFTA) and we also rely on various U.S. corporate tax provisions related to international
commerce as we build, market and sell our products internationally. NAFTA and future import taxes have been
under scrutiny by the U.S. administration. On September 30, 2018 the President of the U.S. and the U.S. Trade
Representative announced a new trade pact with the governments of Canada and Mexico called the United
States-Mexico-Canada Agreement (USMCA). We believe the benefits we currently receive under NAFTA will
continue under the USMCA. To take effect, the USMCA must be enacted by the U.S. Congress under laws
governing Trade Promotion Authority. It is expected NAFTA will remain effective until this occurs. Any
changes in trade treaties, corporate tax policy, import taxes and foreign policies could adversely and significantly
affect our financial condition and results of operations.

Shortages of skilled labor or increased labor costs could adversely affect our operations.

We depend on skilled labor in the manufacture of railcars and marine barges, repair, refurbishment and
maintenance of railcars and provision of wheel services and supply of parts. Some of our facilities are located in
areas where demand for skilled laborers often exceeds supply. Shortages of some types of skilled laborers such as
welders and machine operators could restrict our ability to maintain or increase production rates, lead to
production inefficiencies and increase our labor costs. Due to the competitive nature of the labor markets in
which we operate and the cyclical nature of the railcar industry, the resulting employment cycle increases our
risk of not being able to recruit, train and retain the employees we require, particularly when the economy
expands, production rates are high or competition for such skilled labor increases. Our costs to recruit, train and
retain necessary, qualified employees may exceed our expectations. If we are unable to recruit, train and retain
adequate numbers of qualified employees on a timely basis could materially adversely affect our business and
results of operations.

The rail freight industry could become oversupplied and the use of railcars as a significant mode of
transporting freight could decline, become more efficient over time, experience a shift in types of modal
transportation, and/or certain railcar types could become obsolete.

The rail freight industry could become oversupplied, which could have a significant impact on the pricing, lease
rates or demand for new railcars. In addition, if railcar transportation becomes more efficient from an increase in

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velocity or a decrease in idle times, especially if coupled with lower freight volumes, some of which may be
permanent due to a reduction in coal volumes, this could significantly reduce the demand for our products and
could adversely affect our results of operations. As the freight transportation markets we serve continue to evolve
and become more efficient or are disrupted through technological developments, the use of railcars may decline
in favor of other more economic modes of transportation. Features and functionality specific to certain railcar
types could result in those railcars becoming obsolete as customer requirements for freight delivery change. Our
operations may be adversely impacted by changes in the preferred method used by customers to ship their
products or changes in demand for particular products. The industries in which our customers operate are driven
by dynamic market forces and trends, which are in turn influenced by economic and political factors. Demand for
our railcars may be significantly affected by changes in the markets in which our customers operate. A
significant reduction in customer demand for transportation or manufacture of a particular product or change in
the preferred method of transportation used by customers to ship their products could result in reduced demand
for railcars and the economic obsolescence of our railcars, including those leased by our customers.

We face aggressive competition by a concentrated group of competitors and a number of factors may
influence our performance. If we are unable to compete successfully, our market share, margin and results of
operations may be adversely affected.

We face aggressive competition by a concentrated group of competitors in all geographic markets and in each
area of our business. In addition, other companies may attempt to enter markets in which we compete. Some of
these competitors are owned or financially supported by foreign countries or sovereign wealth funds, and may
potentially sell products and services below cost, or otherwise compete unfairly, in order to gain market share.
These markets are intensely competitive and we expect it to remain so in the foreseeable future. Competitive
factors, including introduction of competitive products, new entrants into certain of our markets, price pressures,
limited customer base and the relative competitiveness of our manufacturing facilities and products affect our
ability to compete effectively. In addition, new technologies or the introduction of new railcars or other product
offerings by our competitors could render our products obsolete or less competitive. If we do not compete
successfully, our market share, margin and results of operations may be adversely affected.

We may pursue strategic opportunities, including new joint ventures, acquisitions and new business endeavors
that involve inherent risks, any of which may cause us not to realize anticipated benefits and we could have
difficulty integrating the operations of companies that we acquire or joint ventures we enter into, which could
adversely affect our results of operations.

We may not be able to successfully identify suitable joint venture, acquisition and new business endeavors to
invest in or complete potential transactions on acceptable terms. Our identification of suitable joint venture
opportunities, acquisition candidates and new business endeavors involve risks inherent in assessing the values,
strengths, weaknesses, risks and profitability of these opportunities. Our failure to identify suitable joint ventures,
acquisition opportunities and new business endeavors may restrict our ability to grow our business. If we are
successful in pursuing such opportunities, we may be required to expend significant funds or incur additional
debt, which could materially adversely affect our results of operations and limit our ability to obtain financing for
working capital or other purposes and we may be more vulnerable to economic downturns and competitive
pressures.

The success of our acquisition and joint venture strategies depends upon our ability to successfully complete
acquisitions, to enter into joint ventures and to integrate any businesses that we acquire into our existing
business. The integration of acquired business operations could disrupt our business by causing unforeseen
operating difficulties, diverting management’s attention from day-to-day operations and requiring significant
financial resources that would otherwise be used for the ongoing development of our business. The difficulties of
integration could be increased by the necessity of coordinating geographically dispersed organizations,
integrating personnel with disparate business backgrounds and combining different corporate cultures. Each of
these circumstances could be more likely to occur or be more severe in consequence in the case of an acquisition
or joint venture involving a business that is outside of our core areas of expertise. In addition, we could be unable

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to retain key employees or customers of the combined businesses. We could face integration issues including
those related to operations, internal controls, information systems and operational functions of the acquired
companies and we also could fail to realize cost efficiencies or synergies that we anticipated when selecting our
acquisition candidates and joint ventures. Any of these items could adversely affect our results of operations.

If we or our joint ventures fail to complete capital expenditure projects on time and within budget, or if these
projects, once completed, fail to operate as anticipated, such failure could adversely affect our business,
financial condition and results of operations.

From time-to-time, we, or our joint ventures, undertake strategic capital projects in order to enhance, expand and/
or upgrade facilities and operational capabilities. Our ability, and our joint ventures’ ability, to complete these
projects on time and within budget, and for us to realize the anticipated increased revenues or otherwise realize
acceptable returns on these investments or other strategic capital projects that may be undertaken is subject to a
number of risks. Many of these risks are beyond our control, including a variety of market, operational,
permitting, and labor related factors. In addition, the cost to implement any given strategic capital project
ultimately may prove to be greater than originally anticipated. If we, or our joint ventures, are not able to achieve
the anticipated results from the implementation of any of these strategic capital projects, or if unanticipated
implementation costs are incurred, our business, financial condition and results of operations may be adversely
affected.

A failure to design or manufacture products or technologies or to achieve timely certification or market
acceptance of new products or technologies could have an adverse effect on our profitability.

We continue to introduce new railcar product innovations and technologies, and we periodically accept orders
prior to receipt of railcar certification or proof of ability to manufacture a quality product that meets customer
standards. We could be unable to successfully design or manufacture these new railcar product innovations or
technologies. Our inability to develop and manufacture such new product innovations or technologies in a timely
fashion and profitable manner, obtain timely certification, or achieve market acceptance, or the existence of
quality problems in our new products, could have a material adverse effect on our revenue and results of
operations and subject us to penalties, cancellation of orders and/or other damages.

Our relationships with our joint venture and alliance partners could be unsuccessful, which could adversely
affect our business.

We have entered into several joint venture agreements and other alliances or investments with other companies to
increase our sourcing alternatives, reduce costs and produce new railcars or components. We may seek to expand
our relationships or enter into new agreements with other companies. If our joint venture or alliance partners are
unable to fulfill their contractual obligations or if these relationships are otherwise not successful in the future,
our manufacturing and other costs could increase, we could encounter production disruptions, growth
opportunities could fail to materialize, or we could be required to fund such joint ventures or alliances in amounts
significantly greater than initially anticipated, any of which could adversely affect our business.

If any of our joint ventures generate significant losses, including future potential intangible asset or goodwill
impairment charges, it could adversely affect our results of operations or cause our investment to be impaired.

We have potential exposure to environmental liabilities, which could increase costs or have an adverse effect
on results of operations.

We are subject to extensive national, state, foreign, provincial and local environmental laws and regulations
concerning, among other things, air emissions, water discharge, solid waste and hazardous substances handling
and disposal and employee health and safety. These laws and regulations are complex and frequently change. We

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could incur unexpected costs, penalties and other civil and criminal liability if we, or in certain circumstances
others, fail to comply with environmental laws or permits issued pursuant to those laws. We also could incur
costs or liabilities related to off-site waste disposal or remediating soil or groundwater contamination at our
properties, including as set forth below. In addition, future environmental laws and regulations may require
significant capital expenditures or changes to our operations, or may impose liability on us in the future for
actions that complied with then applicable laws and regulations when the action was taken.

Portland Harbor Superfund Site

Our Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the
U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the
Portland Harbor, including the portion fronting our manufacturing facility, as a federal “National Priority List” or
“Superfund” site due to sediment contamination (the Portland Harbor Site). We, along with more than 140 other
parties, have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site.
The letter advised us that we may be liable for the costs of investigation and remediation (which liability may be
joint and several with other potentially responsible parties) as well as for natural resource damages resulting from
releases of hazardous substances to the site. Ten private and public entities, including us (the Lower Willamette
Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/
feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have
not signed such consent, but nevertheless contributed money to the effort. The EPA-mandated RI/FS was
produced by the LWG and cost over $110 million during a 17-year period. We bore a percentage of the total
costs incurred by the LWG in connection with the investigation. We cannot provide assurance that some or all of
any such outlay will be recoverable from other responsible parties. The EPA issued its ROD for the Portland
Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the
Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the
federal government, have entered into a non-judicial mediation process to try to allocate costs associated with
remediation of the Portland Harbor Site. Approximately 110 additional parties have signed tolling agreements
related to such allocations. On April 23, 2009, we and the other AOC signatories filed suit against 69 other
parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products,
Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to
sign tolling agreements and be dismissed without prejudice, and the case was stayed by the court until
January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation
steps.

The EPA’s January 6, 2017 ROD identifies a remedy that the EPA estimates will take 13 years of active
remediation, followed by 30 years of monitoring, with an estimated undiscounted cost of $1.7 billion. The EPA
expects its cost estimates to be within a range of -30% to +50%, but this ROD states that changes in costs are
likely to occur as a result of new data it wants to collect over a 2-year period prior to final remedy design. The
ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river
sediments offshore of our Portland, Oregon manufacturing facility as well as upstream and downstream of the
facility. The ROD does not break down total remediation costs by unit.

The ROD does not assign responsibility for the costs of clean-up, nor does it allocate such costs among the
potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup option
will be determined at an unspecified later date. Based on the investigation to date, we believe that we did not
contribute in any material way to contamination in the river sediments or the damage of natural resources in the
Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to our property
precedes our ownership of
the Portland, Oregon manufacturing facility. Because these environmental
investigations are still underway, including the collection of new pre-remedial design sampling data by the EPA,
sufficient information is currently not available to determine our liability, if any, for the cost of any required
remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results
of the pending investigations and future assessments of natural resource damages, we may be required to incur
costs associated with additional phases of investigation or remedial action, and may be liable for damages to

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natural resources. In addition, we may be required to perform periodic maintenance dredging in order to continue
to launch vessels from our launch ways in Portland, Oregon, on the Willamette River, and the river’s
classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of
these matters could adversely affect our business and Consolidated Financial Statements, or the value of our
Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including our
company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural
resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes
and Bands of the Yakama Nation v. Air Liquide America Corp., et. al., United States Court for the District of
Oregon Case No. 3i17-CV-00164-SB. We, along with many of the other defendants, have moved to dismiss the
case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

We have entered into a Voluntary Cleanup Agreement with the DEQ in which we agreed to conduct an
investigation of whether, and to what extent, past or present operations at our Portland property may have
released hazardous substances into the environment. We have also signed an Order on Consent with the DEQ to
finalize the investigation of potential onsite sources of contamination that may have a release pathway to the
Willamette River. Interim precautionary measures are also required in the order and we are currently discussing
with the DEQ potential remedial actions which may be required. We could incur significant expenses for
remediation and we cannot provide assurance that some or all of any such outlay will be recoverable from other
responsible parties.

The timing of our asset sales and related revenue recognition could cause significant differences in our
quarterly results and liquidity.

We may build railcars or marine barges in anticipation of a customer order, or that are leased to a customer and
ultimately planned to be sold to a third party. The difference in timing of production and the ultimate sale
subjects our company to operational and market risks. In addition, we periodically sell railcars from our own
lease fleet and the timing and volume of such sales is difficult to predict. As a result, comparisons of our
manufacturing revenue, deliveries, quarterly net gain on disposition of equipment, income and liquidity between
quarterly periods within one year and between comparable periods in different years may not be meaningful and
should not be relied upon as indicators of our future performance.

We depend on our senior management team and other key employees, and significant attrition within our
management team or unsuccessful succession planning for members of our senior management team and
other key employees who are at or nearing retirement age, could adversely affect our business.

Our success depends in part on our ability to attract, retain and motivate senior management and other key
employees. Achieving this objective may be difficult due to many factors, including fluctuations in global
economic and industry conditions, competitors’ hiring practices, cost reduction activities, and the effectiveness of
our compensation programs. Competition for qualified personnel can be very intense. We must continue to
recruit, retain and motivate senior management and other key employees sufficient to maintain our current
business and support our future projects and growth objectives. We are vulnerable to attrition among our current
senior management team and other key employees. A loss of any such personnel, or the inability to recruit and
retain qualified personnel in the future, could have an adverse effect on our business, financial condition and
results of operations.

Many members of our senior management team and other key employees are at or nearing retirement age. If we
are unsuccessful in our succession planning efforts, the continuity of our business and results of operations could
be adversely affected.

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Changes in the credit markets and the financial services industry could negatively impact our business, results
of operations, financial condition or liquidity.

The credit markets and the financial services industry may experience volatility which can result in tighter
availability of credit on more restrictive terms and limit our ability to sell railcar assets. Our liquidity, financial
condition and results of operations could be negatively impacted if our ability to borrow money to finance
operations, obtain credit from trade creditors, offer leasing products to our customers or sell railcar assets were to
be impaired. In addition, scarcity of capital could also adversely affect our customers’ ability to purchase or pay
for products from us or our suppliers’ ability to provide us with product, either of which could negatively affect
our business and results of operations.

Volatility in the global financial markets may adversely affect our business, financial condition and results of
operations.

During periods of volatility in the global financial markets, certain of our customers could delay or otherwise
reduce their purchases of railcars and other products and services. If volatile conditions in the global credit
markets impact our customers’ access to credit, product order volumes may decrease or customers may default
on payments owed to us.

Likewise, if our suppliers face challenges obtaining credit, or otherwise operating their businesses, the supply of
materials we purchase from them to manufacture our products may be interrupted. Any of these conditions or
events could result in reductions in our revenues, increased price competition, or increased operating costs, which
could adversely affect our business, financial condition and results of operations.

Our actual results may differ significantly from our announced expectations.

From time to time, we have released, and may continue to release guidance estimates in our quarterly and annual
earnings releases, quarterly and annual earnings conference calls, or otherwise, regarding our future performance
that represent our management’s estimates as of the date of release. Although we believe that any such guidance
or estimates would provide investors and analysts with a better understanding of management’s expectations for
the future and could be useful to our shareholders and potential shareholders, such guidance or estimates would
consist of forward-looking statements subject to the risks and uncertainties described in this report and in our
other public filings and public statements. Guidance and estimates are necessarily speculative in nature, and it
can be expected that some or all of the assumptions underlying the guidance or estimates may not materialize or
may vary significantly from actual results. Our actual results may not always be in line with or exceed any
guidance or estimates we may provide, especially in times of economic uncertainty. If our financial results for a
particular period do not meet our guidance or estimates or the expectations of investors or research analysts, or if
we reduce our guidance or estimates for future period, the trading volume or market price of our common stock
may decline. In light of the foregoing, investors are urged not to unduly rely upon any guidance or estimates in
making an investment decision regarding our common stock.

Fluctuations in the availability and price of energy, freight transportation, steel and other raw materials, and
our fixed price contracts could have an adverse effect on our ability to manufacture and sell our products on a
cost effective basis and could adversely affect our margins and revenue.

A significant portion of our business depends upon the adequate supply of steel, components and other raw
materials at competitive prices and a small number of suppliers provide a substantial amount of our requirements.
The cost of steel and all other materials used in the production of our railcars represents more than half of our
direct manufacturing costs per railcar and in the production of our marine barges represents more than 30% of
our direct manufacturing costs per marine barge. Our cost of acquiring steel, components and other raw materials
to manufacture our railcars and marine barges are impacted by tariffs. If we are not able to purchase these
materials at competitive prices, it could adversely impact our ability to produce and sell our products on a cost
effective basis which could affect our revenue and profitability.

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Our businesses also depend upon an adequate supply of energy at competitive prices. When the price of energy
increases, it adversely impacts our operating costs and could have an adverse effect upon our ability to conduct
our businesses on a cost-effective basis. We cannot be assured that we will continue to have access to supplies of
energy or necessary components for manufacturing railcars and marine barges. Our ability to meet demand for
our products could be adversely affected by the loss of access to any of these supplies, the inability to arrange
alternative access to any materials, or suppliers limiting allocation of materials to us.

In some instances, we have fixed price contracts that anticipate material price increases and surcharges, or
contracts that contain actual or formulaic pass-through of material price increases and surcharges. However, if
the price of steel or other raw materials were to fluctuate in excess of anticipated increases on which we have
based our fixed price contracts, or if we were unable to adjust our selling prices or have adequate protection in
our contracts against changes in material prices, or if we are unable to reduce operating costs to offset any price
increases, our margins would be adversely affected. The loss of suppliers or their inability to meet our price,
quality, quantity and delivery requirements could have an adverse effect on our ability to manufacture and sell
our products on a cost-effective basis.

Decreases in the price of scrap adversely impact our Wheels, Repair & Parts margins and revenue and the
residual value and future depreciation of our leased assets. A portion of our Wheels, Repair & Parts businesses
involve scrapping steel parts and the resulting revenue from such scrap steel increases our margins and revenues.
When the price of scrap steel declines, our revenues and margins in such business would decrease.

We rely on limited suppliers for certain components and services needed in our production. If we are not able
to procure specialty components or services on commercially reasonable terms or on a timely basis, our
business, financial condition and results of operations would be adversely affected.

Our manufacturing operations depend in part on our ability to obtain timely deliveries of materials, components
and services in acceptable quantities and quality from our suppliers. In 2018, the top ten suppliers for all
inventory purchases accounted for approximately 52% of total purchases. Amsted Rail Company, Inc. accounted
for 19% of total inventory purchases in 2018. No other suppliers accounted for more than 10% of total inventory
purchases. Certain components of our products, particularly specialized components like castings, bolsters,
trucks, wheels and axels, and certain services, such as lining capabilities, are currently only available from a
limited number of suppliers. Increases in the number of railcars manufactured could increase the demand for
such components and services and strong demand may cause industry-wide shortages if suppliers are in the
process of ramping up production or reach capacity production. Our dependence on a limited number of suppliers
involves risks, including limited control over pricing, availability and delivery schedules. If any one or more of
our suppliers cease to provide us with sufficient quantities of our components or services in a timely manner or
on terms acceptable to us, or cease to provide services or manufacture components of acceptable quality, we
could incur disruptions or be limited in our production of our products and we could have to seek alternative
sources for these components or services. We could also incur delays while we attempt to locate and engage
alternative qualified suppliers and we might be unable to engage acceptable alternative suppliers on favorable
terms, if at all. In addition, we are increasing the number of components and services we manufacture or provide
ourselves, directly or through joint ventures. If we are not successful at manufacturing such components or
providing such services or have production problems after transitioning to self-produced supplies, we may not be
able to replace such components or services from third party suppliers in a timely manner. Any such disruption in
our supply of specialized components and services or increased costs of those components or services could harm
our business and adversely affect our results of operations.

Train derailments or other accidents or claims could subject us to legal claims that adversely impact our
business, financial condition and our results of operations.

We provide a number of services which include the manufacture and supply of new railcars, wheels, components
and parts and the lease and repair of railcars for our customers that transport a variety of commodities, including
tank railcars that transport hazardous materials such as crude oil, ethanol and other products. In addition, we have

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a Regulatory Services Group which offers regulatory, engineering, process consulting and advocacy support to
the tank car and petrochemical rail shipper community, among other services. We could be subject to various
legal claims, including claims for negligence, personal injury, physical damage and product or service liability,
or in some cases strict liability, as well as potential penalties and liability under environmental laws and
regulations, in the event of a derailment or other accident involving railcars, including tank railcars. Additionally,
the severity of injury or property damage arising from an incident may influence the causation responsibility
analysis exposing us to potentially greater liability. If we become subject to any such claims and are unable
successfully to resolve them or have inadequate insurance for such claims, our business, financial condition and
results of operations could be materially adversely affected.

Changes in or failure to comply with legal and regulatory requirements applicable to the industries in which
we operate may adversely impact our business, financial condition and results of operations.

Our operations and the industry we serve, including our customers, are subject to extensive regulation by
governmental, regulatory and industry authorities and by federal, state, local and foreign agencies. These
organizations establish rules and regulations for the railcar industry, including construction specifications and
standards for the design and manufacture of railcars; mechanical, maintenance and related standards; and railroad
safety. New rules and administrative regulations from these entities could impact our financial results, demand
for our products and the economic value of our assets. In addition, if we fail to comply with the requirements and
regulations of these entities, we could face sanctions and penalties that could negatively affect our financial
results.

The risks of substantial costs and liabilities related to compliance with these laws and regulations are an inherent
part of our business. Despite our intention to comply with these laws and regulations, we cannot guarantee that
we will be able to do so at all times and compliance may prove to be more costly and limiting than we currently
anticipate and compliance requirements could increase in future years. These laws and regulations are complex,
change frequently and may become more stringent over time, which could impact our business, financial
condition and results of operations.

In North America regulatory changes, along with prevailing market conditions, could materially affect new tank
railcar manufacturing and retrofitting activities industry-wide, including negative impacts to customer demand
for our products and services. In North America additional laws and regulations have been proposed or adopted
that will potentially have a significant impact on railroad operations, including the implementation of “positive
train control” (PTC) requirements. PTC is a collision avoidance technology intended to override engineer
controlled locomotives and stop certain types of train accidents. While certain of these legal and regulatory
changes could result
in increased levels of railcar repair or refurbishment work and/or new tank car
manufacturing activity, if we are unable to manage to adapt our business successfully to changing regulations,
our business and results of operations could be adversely affected.

In Europe, changes to the process for obtaining regulatory approval for the operation of new or modified railcars
may make it more difficult for us to deliver products to our customers in a timely manner. Effective in June of
2019, issuance of railway vehicle authorizations will be centralized with the European Union Agency for
Railways, rather than being the responsibility of railway safety authorities in each European Union member
country. This change may result in delays of several months for obtaining required regulatory approvals, when
compared to the current system, which may have an adverse effect on our business and results of operations.

An adverse outcome in any pending or future litigation could negatively impact our business and results of
operations.

We are a defendant in several pending cases in various jurisdictions. If we are unsuccessful in resolving these
claims, our business and results of operations could be adversely affected. In addition, future claims that may
arise relating to any pending or new matters, whether brought against us or initiated by us against third parties,
could distract management’s attention from business operations and increase our legal and related costs, which
could also negatively impact our business and results of operations.

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Risks related to potential misconduct by employees may adversely impact us.

Our employees may engage in misconduct or other improper activities, including noncompliance with our
policies or regulatory standards and requirements, which could subject us to regulatory sanctions and reputational
damage and materially harm our business. It is not always possible to deter employee misconduct, and the
precautions we take to prevent and detect this activity may not be effective in controlling unknown or unmanaged
risks or losses, including risks associated with harassment, as well as whistleblower complaints and litigation.
There can be no assurance that we will succeed in preventing misconduct by employees in the future. In addition,
the investigation of alleged misconduct disrupts our operations and may harm the public’s perception of our
company, which may be costly. Any such events in the future may have a material adverse impact on our
financial condition or results of operations.

Some of our employees belong to labor unions and strikes or work stoppages could adversely affect our
operations.

We are a party to collective bargaining agreements with various labor unions at some of our operations. Disputes
with regard to the terms and conditions of these agreements or our potential inability to negotiate acceptable
contracts with these unions in the future could result in, among other things, strikes, work stoppages or other
slowdowns by the affected workers. We cannot be assured that our relations with our workforce will remain
positive. Union organizers are actively working to organize employees at some of our other facilities. If our
workers were to engage in a strike, work stoppage or other slowdown, or other employees were to become
unionized or the terms and conditions in future labor agreements were renegotiated, or if union representation is
implemented at such sites and we are unable to agree with the union on reasonable employment terms, including
wages, benefits, and work rules, we could experience a significant disruption of our operations and incur higher
ongoing labor costs. In addition, we could face higher labor costs in the future as a result of severance or other
charges associated with lay-offs, shutdowns or reductions in the size and scope of our operations or due to the
difficulties of restarting our operations that have been temporarily suspended.

Our stock price has been volatile and may continue to experience large fluctuations.

The price of our common stock has experienced rapid and significant price fluctuations. Our stock price ranged
from a low of $41.95 per share to a high of $60.90 per share for the year ended August 31, 2018 and a low of
$28.95 per share to a high of $51.25 per share for the year ended August 31, 2017. The price for our common
stock is likely to continue to be volatile and subject to price and volume fluctuations in response to market and
other factors, including the factors discussed elsewhere in these risk factors and the following:
•
•
•

quarter-to-quarter variations in our operating results;
the depth and liquidity of the market for our common stock;
shortfalls in revenue or earnings from levels expected by securities analysts and investors, including the level
of our backlog and number of orders received during the period;
changes in securities analysts’ estimates of our future performance;
shareholder activism;
dissemination of false or misleading statements through the use of social and other media to discredit us,
disparage our products or to harm our reputation;
any developments that materially impact investors’ or customers’ perceptions of our business prospects;
dilution resulting from our sale of additional shares of common stock or from the conversion of convertible
notes;
changes in governmental regulation;
significant railcar industry announcements or developments;
the introduction of new products or technologies by us or our competitors;
actual or anticipated variations in our or our competitors’ quarterly or annual financial results;
the general health and outlook of our industry;
general financial and other market conditions; and
domestic and international economic conditions.

•
•
•

•
•

•
•
•
•
•
•
•

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

In addition, public stock markets have experienced, and may in the future experience, extreme price and trading
volume volatility. This volatility has significantly affected the market prices of securities of many companies for
reasons frequently unrelated to, or that disproportionately impact, the operating performance of these companies
and may adversely affect the price of our common stock. These broad market fluctuations may adversely affect
the market price of our common stock in the future.

A material decline in the price of our common stock may result in the assertion of certain claims against us, and/
or the commencement of inquiries and/or investigations against us. A prolonged decline in the price of our
common stock could result in a reduction in the liquidity of our common stock, a reduction in our ability to raise
capital, and the inability of investors to obtain a favorable selling price for their shares. Any reduction in our
ability to raise equity capital in the future may force us to reallocate funds from other planned uses and could
have a significant negative effect on our business plans and operations.

Following periods of volatility in the market price of their stock, historically many companies have been the
subject of securities class action litigation. If we became involved in securities class action litigation in the
future, it could result in substantial costs and diversion of our management’s attention and our resources and
could harm our stock price, business, prospects, financial condition and results of operations.

Our product and service warranties could expose us to potentially significant claims.

We offer our customers limited warranties for many of our products and services. Accordingly, we may be
subject to significant warranty claims in the future, such as multiple claims based on one defect repeated
throughout our production or servicing processes or claims for which the cost of repairing the defective part is
highly disproportionate to the original cost of the part. These types of warranty claims could result in costly
product recalls, customers seeking monetary damages, significant repair costs and damage to our reputation.

If warranty claims attributable to actions of third party component manufacturers are not recoverable from such
parties due to their poor financial condition or other reasons, we could be liable for warranty claims and other
risks for using these materials in our products.

Many of our products are sold to third parties who may misuse, improperly install or improperly or
inadequately maintain or repair such products thereby potentially exposing us to claims that could increase
our costs and weaken our financial condition.

The products we manufacture are designed to work optimally when properly operated, installed, repaired,
maintained and used to transport the intended cargo. When this does not occur, we may be subjected to claims or
litigation associated with product damage, injuries or property damage that could increase our costs and weaken
our financial condition.

Our financial performance and market value could cause future write-downs of goodwill or intangibles in
future periods.

We are required to perform an annual impairment review of goodwill and indefinite lived assets which could
result in an impairment charge if it is determined that the carrying value of the asset is in excess of the fair value.
We perform a goodwill impairment test annually during our third quarter. Goodwill is also tested more
frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists.

When we have continued underperforming operations or changes in circumstances, such as a decline in the
market price of our common stock, changes in demand or in the numerous variables associated with the
judgments, assumptions and estimates made in assessing the appropriate valuation of goodwill indicate the
carrying amount of certain indefinite lived assets may not be recoverable,
the assets are evaluated for
impairment. Among other things, our assumptions used in the valuation of goodwill include growth of revenue

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

and margins and increased cash flows over time. If actual operating results were to differ from these
assumptions, it may result in an impairment of goodwill. As of August 31, 2018, we had $51.1 million of
goodwill in our Wheels, Repair & Parts segment and $27.1 million in our Manufacturing segment. Impairment
charges to our goodwill or our indefinite lived assets would impact our results of operations. Future write-downs
of goodwill and intangibles could affect certain of the financial covenants under debt instruments and could
restrict our financial flexibility. In the event of goodwill impairment, we may have to test other assets for
impairment.

The conversion of our outstanding convertible notes could result in substantial dilution to our current
stockholders.

We have the option to settle outstanding convertible notes in cash, although if we opt not to or do not have the
ability to, the conversion of some or all of our convertible notes may dilute the ownership interests of existing
stockholders. Any sales in the public market of the common stock issuable upon the conversion of the notes
could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may
encourage short selling by market participants, because the conversion of the notes could depress the price of our
common stock.

We are a holding company with no independent operations. Our ability to meet our obligations depends upon
the performance of our subsidiaries and our joint ventures and their ability to make distributions to us.

As a holding company, we are dependent on the earnings and cash flows of, and dividends, distributions, loans or
advances from, our subsidiaries and joint ventures to generate the funds necessary to meet certain of our
obligations including the payment of principal, of premium, if any, and interest on debt obligations. Any payment
of dividends, distributions, loans or advances to us by our subsidiaries could be subject to statutory restrictions
on dividends or repatriation of earnings under applicable local law and monetary transfer restrictions in the
jurisdictions in which our subsidiaries operate. In addition, many of our subsidiaries and our joint ventures are
parties to credit facilities that contain restrictions on the timing and amount of any payment of dividends,
distributions, loans or advances that our subsidiaries may make to us. Under certain circumstances, some or all of
our subsidiaries may be prohibited from making any such payments.

Our governing documents, the indentures governing our 2024 Convertible Notes, and Oregon law contain
certain provisions that could prevent or make more difficult an attempt to acquire us.

Our Articles of Incorporation and Bylaws, as currently in effect, contain certain provisions that may have anti-
takeover effects, including:
•

a classified Board of Directors, with each class containing as nearly as possible one-third of the total number
of members of the Board of Directors and the members of each class serving for staggered three-year terms;
a vote of at least 55% of our voting securities to amend, repeal or adopt an inconsistent provision of certain
provisions of our Articles of Incorporation;
no less than 120 days’ advance notice with respect to nominations of directors or other matters to be voted on
by stockholders other than by or at the direction of the Board of Directors;
removal of directors only for cause;
the calling of special meetings of stockholders only by the president, a majority of the Board of Directors or
the holders of not less than 25% of all votes entitled to be cast on the matters to be considered at such
meeting;
the issuance of preferred stock by our board without further action by the shareholders; and
the availability under the Articles of Series A participating preferred stock that may be issuable.

•

•
•

The provisions discussed above could have anti-takeover effects because they may delay, defer or prevent an
unsolicited acquisition proposal that some, or a majority, of our stockholders might believe to be in their best
interests or in which stockholders might receive a premium for their common stock over the then-prevailing
market price.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

The Oregon Control Share Act and business combination law could limit parties who acquire a significant
amount of voting shares from exercising control over us for specific periods of time. These acts could lengthen
the period for a proxy contest or for a stockholder to vote their shares to elect the majority of our Board and
change management. Additionally,
the indentures governing our 2024 Convertible Notes provide for the
acceleration, at the lenders option, of all outstanding principal and interest owed on the notes upon a change of
control of our company. The rights afforded to our creditors under these indentures could increase the cost of any
potential acquisition of our company and have a resulting chilling effect on interest in acquiring our company.

These restrictions and provisions could have the effect of dissuading other stockholders or third parties from
limitation,
contesting director elections or attempting certain transactions with us,
acquisitions, which could cause investors to view our securities as less attractive investments and reduce the
market price of our common stock and the notes.

including, without

Payments of cash dividends on our common stock may be made only at the discretion of our Board of
Directors and may be restricted by Oregon law.

Any decision to pay dividends will be at the discretion of our Board of Directors and will depend upon our
operating results, strategic plans, capital requirements, financial condition, provisions of our borrowing
arrangements and other factors our Board of Directors considers relevant. Furthermore, Oregon law imposes
restrictions on our ability to pay dividends. Accordingly, we may not be able to continue to pay dividends in any
given amount in the future, or at all.

Fluctuations in foreign currency exchange rates could lead to increased costs and lower profitability.

Outside of the U.S., we primarily conduct business in Mexico and Europe and our non-U.S. businesses conduct
their operations in local currencies and other regional currencies. We also source materials worldwide.
Fluctuations in exchange rates may affect demand for our products in foreign markets or our cost
competitiveness and may adversely affect our profitability. Although we attempt to mitigate a portion of our
exposure to changes in currency rates through currency rate hedge contracts and other activities, these efforts
cannot fully eliminate the risks associated with the foreign currencies. In addition, some of our borrowings are in
foreign currency, giving rise to risk from fluctuations in exchange rates. A material or adverse change in
exchange rates could result in significant deterioration of profits or in losses for us.

We have indebtedness, which could have negative consequences to our business or results of operations.

As of August 31, 2018, our total consolidated indebtedness was approximately $469.7 million (excluding
$26.6 million of debt discount and $6.9 million of debt issuance costs). As of August 31, 2018, approximately
$179.9 million (excluding $0.5 million of debt issuance costs) of our consolidated indebtedness was secured. Our
indebtedness consists of convertible notes, a senior secured revolving credit facility and term loans. Our level of
indebtedness could have a material adverse effect on our business and make it more difficult for us to satisfy our
obligations under our outstanding indebtedness and the notes. As a result of our debt and debt service obligations,
we face increased risks regarding, among other things, the following:
•

our ability to borrow additional amounts or refinance existing indebtedness in the future for working capital,
capital expenditures, acquisitions, debt service requirements, investments, stock repurchases, execution of our
growth strategy, or other purposes may be limited or such financing may be more costly;
our availability of cash flow to fund working capital requirements, capital expenditures,
investments,
acquisitions or other strategic initiatives and other general corporate purposes because a portion of our cash
flow is needed to pay principal and interest on our debt;
our vulnerability to competitive pressures and to general adverse economic or industry conditions, including
fluctuations in market interest rates or a downturn in our business;
our being at a competitive disadvantage relative to our competitors that have greater financial resources than
us or more flexible capital structures than us;

•

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

•
•

•

our ability to satisfy our financial obligations related to our consolidated indebtedness;
our additional exposure to the risk of increased interest rates as certain of our borrowings are at variable rates
of interest, which could result in higher interest expense in the event of an increase in interest rates;
our restrictions under the restrictive covenants in our North American senior secured credit facility, our
secured term loan, our other credit agreements, and any of the agreements governing our future indebtedness
adversely restricting our financial and operating flexibility and subjecting us to other risks; and
the possibility we may suffer a material adverse effect on our business and financial condition if we are
unable to service our debt or obtain additional financing, as needed.

Despite our current indebtedness levels and the restrictive covenants set forth in the agreements governing our
indebtedness, if we, our subsidiaries and our joint ventures are in compliance with the covenants, we, our
subsidiaries and our joint ventures may be able to incur substantially more indebtedness, including secured
indebtedness, and other obligations and liabilities that do not constitute indebtedness. This could increase the
risks associated with our indebtedness. As of August 31, 2018, after giving effect to issued but undrawn letters of
credit, we had approximately $392.6 million of availability under our North American senior secured credit
facility (based on our borrowing base as of such date) and approximately $57.5 million of availability under our
European and Mexican joint venture senior secured credit facilities.

We may need to raise additional capital to operate our business and achieve our business objectives, which
could result in dilution to investors.

We require substantial working capital to fund our business. If additional funds are raised through the issuance of
equity securities, the percentage ownership held by our stockholders will be reduced and these equity securities
may have rights, preferences or privileges senior to those of our common stock. We evaluate opportunities to
access the capital markets taking into account our financial condition and other relevant considerations.
Additional financing may not be available when needed, on terms favorable to us or at all. If adequate funds are
not available or are not available on acceptable terms, we may be unable to develop or enhance our business, take
advantage of future opportunities or respond to competitive pressures, which would harm our business, financial
condition and results of operations.

Our business and operations could be negatively affected if we become subject to shareholder activism, which
could cause us to incur significant expense, hinder execution of our business strategy and impact our stock
price.

Shareholder activism, which could take many forms and arise in a variety of situations, has been increasing in
publicly traded companies recently. Shareholder activism, including potential proxy contests, could result in
substantial costs and divert management’s and our Board of Directors’ attention and resources from our business.
Additionally, such shareholder activism could give rise to perceived uncertainties as to our future, adversely
affect our relationships with service providers and make it more difficult to attract and retain qualified personnel.
Also, we may be required to incur significant legal fees and other expenses related to activist shareholder
matters. Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the
events, risks and uncertainties of any shareholder activism.

We are subject to cybersecurity risks and may incur increasing costs in an effort to minimize those risks.

information regarding our customers, employees,

Our business employs systems and websites that allow for the storage and transmission of proprietary or
confidential
including
financial information, intellectual property and personal identification information. Security breaches and other
disruptions could compromise our information, expose us to liability and harm our reputation and business. The
steps we take to deter and mitigate these risks may not be successful. We may not have the resources or technical
sophistication to anticipate or prevent current or rapidly evolving types of cyber-attacks. Attacks may be targeted
at us, our customers, or others who have entrusted us with information. Actual or anticipated attacks may cause

job applicants and other parties,

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train
employees, and engage third-party experts or consultants. Advances in computer capabilities, or other
technological developments may result in the technology and security measures used by us to protect transaction
or other data being breached or compromised. In addition, data and security breaches can also occur as a result of
non-technical issues, including intentional or inadvertent breach by our employees or by persons with whom we
have commercial relationships. Any compromise or breach of our security could result in a violation of
applicable privacy and other laws, legal and financial exposure, negative impacts on our customers’ willingness
to transact business with us and a loss of confidence in our security measures, which could have an adverse effect
on our results of operations and our reputation.

Updates or changes to our information technology systems may result in problems that could negatively
impact our business.

We have information technology systems, comprising hardware, network, software, people, processes and other
infrastructure that are important to the operation of our businesses. We continue to evaluate and implement
upgrades and changes to information technology systems that support substantially all of our operating and
financial functions. We could experience problems in connection with such implementations,
including
compatibility issues, training requirements, higher than expected implementation costs and other integration
challenges and delays. A significant problem with an implementation, integration with other systems or ongoing
management and operation of our systems could negatively impact our business by disrupting operations. Such a
problem could also have an adverse effect on our ability to generate and interpret accurate management and
financial reports and other information on a timely basis, which could have a material adverse effect on our
financial reporting system and internal controls and adversely affect our ability to manage our business.

If we are unable to protect our intellectual property and prevent its improper use by third parties or if third
parties assert that our products or services infringe their intellectual property rights, our ability to compete in
the market may be harmed, and our business and financial condition may be adversely affected.

The protection of our intellectual property is important to our business. We rely on a combination of trademarks,
copyrights, patents and trade secrets to protect our intellectual property. However, these protections might be
inadequate. Our pending or future trademark, copyright and patent applications might not be approved or, if
allowed, might not be sufficiently broad. If our intellectual property rights are not adequately protected we may
not be able to commercialize our technologies, products or services and our competitors could commercialize our
technologies, which could result in a decrease in our sales and market share and could materially adversely affect
our business, financial condition and results of operations. Conversely, third parties might assert that our
products, services, or other business activities infringe their patents or other intellectual property rights.
Infringement and other intellectual property claims and proceedings brought against us, whether successful or
not, could result in substantial costs and harm our reputation. Such claims and proceedings can also distract and
divert our management and key personnel from other tasks important to the success of our business. In addition,
intellectual property litigation or claims could force us to cease selling or using products that incorporate the
asserted intellectual property, which would adversely affect our revenues, or cause us to pay substantial damages
for past use of the asserted intellectual property or to pay substantial fees to obtain a license from the holder of
the asserted intellectual property, which license may not be available on reasonable terms, if at all. In the event of
an adverse determination in an intellectual property suit or proceeding, or our failure to license essential
technology or redesign our products so as not to infringe third party intellectual property rights, our sales could
be harmed and our costs could increase, which could materially adversely affect our business, financial condition
and results of operations.

We could be liable for physical damage, business interruption or product liability claims that exceed our
insurance coverage.

The nature of our business subjects us to physical damage, business interruption and product liability claims,
especially in connection with the repair and manufacture of products that carry hazardous or volatile materials.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Although we maintain liability insurance coverage at commercially reasonable levels compared to similarly sized
heavy equipment manufacturers, an unusually large physical damage, business interruption or product liability
claim or a series of claims based on a failure repeated throughout our production process could exceed our
insurance coverage or result in damage to our reputation, which could materially adversely impact our financial
condition and results of operations.

We could be unable to procure adequate insurance on a cost-effective basis in the future.

The ability to insure our businesses, facilities and rail assets is an important aspect of our ability to manage risk.
As there are only limited providers of this insurance to the railcar industry, there is no guarantee that such
insurance will be available on a cost-effective basis in the future. In addition, we cannot assure that our insurance
carriers will be able to pay current or future claims.

Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting
policies could adversely affect our financial results.

Our accounting policies and methods are fundamental to how we record and report our financial condition and
results of operations. Some of these policies require use of estimates and assumptions that may affect the
reported value of our assets or liabilities and financial results and are critical because they require management to
make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting
standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards
Board, the SEC, and our independent registered public accounting firm) may amend or even reverse their
previous interpretations or positions on how these standards should be applied. In some cases, we could be
required to apply a new or revised standard retrospectively, resulting in the revision of prior period financial
statements. Changes in accounting standards can be hard to predict and can materially impact how we record and
report our financial condition and results of operations.

Fires, natural disasters, severe weather conditions or public health crises could disrupt our business and result
in loss of revenue or higher expenses.

Any serious disruption at any of our facilities due to fire, hurricane, earthquake, flood, other severe weather
events or any other natural disaster, or an epidemic or other public health crisis, or a panic reaction to a perceived
health risk, could impair our ability to use our facilities and have a material adverse impact on our revenues and
increase our costs and expenses. If there is a natural disaster or other serious disruption at any of our facilities,
particularly at any of our Mexican facilities, it could impair our ability to adequately supply our customers, cause
a significant disruption to our operations, cause us to incur significant costs to relocate or reestablish these
functions and negatively impact our operating results. While we insure against certain business interruption risks,
such insurance may not adequately compensate us for any losses incurred as a result of natural or other disasters.

Unusual weather conditions may reduce demand for our wheel-related parts and repair services.

Performing railcar wheel repair and replacing railcar wheels represents a portion of our business. Seasonal
fluctuations in weather conditions may lead to greater variation in our quarterly operating results as unusually
mild weather conditions will generally lead to lower demand for our wheel-related products and services. In
addition, unusually mild weather conditions throughout the year may reduce overall demand for our wheel-
related products and repair services. If occurring for prolonged periods, such weather could have an adverse
effect on our business, results of operations and financial condition.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Business, regulatory, and legal developments regarding climate change may affect the demand for our
products or the ability of our critical suppliers to meet our needs.

Scientific studies have suggested that emissions of certain gases, commonly referred to as greenhouse gases
(GHGs) including carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere and
other climate changes. Legislation and new rules to regulate emission of GHGs have been introduced in
numerous state legislatures, the U.S. Congress, and by the EPA. Some of these proposals would require
industries to meet stringent new standards that may require substantial reporting of GHGs and other carbon
intensive activities in addition to potentially mandating reductions in our carbon emissions. While we cannot
assess the direct impact of these or other potential regulations, we recognize that new climate change reporting or
compliance protocols could affect our operating costs, the demand for our products and/or affect the price of
materials, input factors and manufactured components which could impact our margins. Potential opportunities
could include greater demand for certain types of railcars, while potential challenges could include decreased
demand for certain types of railcars or other products and higher energy costs. Other adverse consequences of
climate change could include an increased frequency of severe weather events and rising sea levels that could
affect operations at our manufacturing facilities, the price of insuring company assets, or other unforeseen
disruptions of our operations, systems, property or equipment.

Repercussions from terrorist activities or armed conflict could harm our business.

Terrorist activities, anti-terrorist efforts, and other armed conflict involving the U.S. or its interests abroad may
adversely affect the U.S. and global economies, potentially preventing us from meeting our financial and other
obligations. In particular, the negative impacts of these events may affect the industries in which we operate. This
could result in delays in or cancellations of the purchase of our products or shortages in raw materials, parts, or
components. Any of these occurrences could have a material adverse impact on our financial results.

Unanticipated changes in our tax provisions or exposure to additional income tax liabilities could affect our
financial condition and profitability and we may take tax positions that the Internal Revenue Service or other
tax authorities may contest.

We are subject to income taxes in both the United States and foreign jurisdictions. Significant judgment is
required in determining our worldwide provision for income taxes. Changes in estimates of projected future
operating results, loss of deductibility of items, recapture of prior deductions (including related to interest on
convertible notes), our ability to utilize tax net operating losses in the future or changes in assumptions regarding
our ability to generate future taxable income could result in significant increases to our tax expense and liabilities
that could adversely affect our financial condition and profitability.

We have in the past and may in the future take tax positions that the Internal Revenue Service (IRS) or other tax
authorities may contest. We are required by an IRS regulation to disclose particular tax positions to the IRS as
part of our tax returns for that year and future years. If the IRS or other tax authorities successfully contests a tax
position that we take, we may be required to pay additional taxes, interest or fines that may adversely affect our
results of operations and financial position.

Some of our customers place orders for our products in reliance on their ability to utilize tax benefits or tax
credits.

There is no assurance that tax authorities will reauthorize, modify, or otherwise not allow the expiration of such
tax benefits, tax credits, or reimbursement policies, and in cases where such subsidies and policies are materially
modified to reduce the available benefit, credit, or reimbursement or are otherwise allowed to expire, the demand
for our products could decrease, thereby creating the potential for a material adverse effect on our financial
condition or results of operations.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Our share repurchase program is intended to enhance long-term shareholder value although we cannot
guarantee this will occur and this program may be suspended or terminated at any time.

The Board of Directors has authorized our company to repurchase our common stock through a share repurchase
program. Our share repurchase program may be modified, suspended or discontinued at any time without prior
notice. Although the share repurchase program is intended to enhance long-term shareholder value, we cannot
provide assurance that this will occur.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

We operate at the following primary facilities as of August 31, 2018:

Description

Manufacturing Segment

Operating facilities:

Location

Status

Portland, Oregon
3 locations in Mexico

3 locations in Poland
3 locations in Romania
1 location in Turkey

Owned
Owned – 2 locations
Leased – 1 location
Owned
Owned
Owned

Administrative offices:

Colleyville, Texas

Leased

Wheels, Repair & Parts Segment

Operating facilities:

25 locations in the U.S.

Leased – 14 locations
Owned – 9 locations
Customer premises – 2 locations

Administrative offices:

Birmingham, Alabama

Leased

Leasing & Services Segment

Corporate offices, railcar marketing
and leasing activities:

Lake Oswego, Oregon

Leased

We believe that our facilities are in good condition and that the facilities, together with anticipated capital
improvements and additions, are adequate to meet our operating needs for the foreseeable future. We continually
evaluate our facilities in order to remain competitive and to take advantage of market opportunities.

Item 3. LEGAL PROCEEDINGS

There is hereby incorporated by reference the information disclosed in Note 22 to Consolidated Financial
Statements, Part II, Item 8 of this Form 10-K.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Executive Officers of the Registrant

Current information regarding our executive officers is presented below.

William A. Furman, 74, is Chief Executive Officer and Chairman of the Board of Directors. Mr. Furman has
served as Chief Executive Officer since 1994, and as Chairman of the Board of Directors since January 2014.
Mr. Furman was Vice President of the Company, or its predecessor company, from 1974 to 1994.

Martin R. Baker, 62, is Senior Vice President, General Counsel and Chief Compliance Officer, a position he has
held since joining the Company in May 2008. Prior to joining the Company, Mr. Baker was Corporate Vice
President, General Counsel and Secretary of Lattice Semiconductor Corporation.

Alejandro Centurion, 62, is Executive Vice President of the Company and President of Global Manufacturing
Operations, a position he has held since January 2015. Mr. Centurion has served in various management
positions for the Company since 2005, most recently as President of North American Manufacturing Operations.

Brian J. Comstock, 56, is Executive Vice President, Sales and Marketing, a position he has held since April 2018.
Mr. Comstock has served in various management positions for the Company since 1998, most recently as Senior
Vice President and General Manager of Commercial, Americas.

Adrian J. Downes, 55, is Senior Vice President, Chief Accounting Officer and Acting Chief Financial Officer.
Mr. Downes has served as Senior Vice President and Chief Accounting Officer since joining the Company in
March 2013, and as Acting Chief Financial Officer since August 2018.

Anne T. Manning, 55, is Vice President and Corporate Controller, a position she has held since November 2007.
Ms. Manning has served in various financial management positions for the Company since 1995.

Mark J. Rittenbaum, 61, is Executive Vice President, Chief Commercial and Leasing Officer, a position he has
held since February 2016. Mr. Rittenbaum has served in various management positions for the Company since
1990, most recently as Executive Vice President and Chief Financial Officer.

Lorie L. Tekorius, 51, is Executive Vice President and Chief Operating Officer. Ms. Tekorius has served as
Executive Vice President since April 2017 and was promoted to Chief Operating Officer
in August
2018. Ms. Tekorius has served in various management positions for the Company since 1995, most recently as
Executive Vice President and Chief Financial Officer.

Executive officers are designated by the Board of Directors. There are no family relationships among any of the
executive officers of the Company.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES

Our common stock has been traded on the New York Stock Exchange under the symbol GBX since July 14,
1994. There were approximately 348 holders of record of common stock as of October 19, 2018. The following
table shows the reported high and low sales prices of our common stock on the New York Stock Exchange and
dividends declared for the fiscal periods indicated.

2018
Fourth quarter
Third quarter
Second quarter
First quarter
2017
Fourth quarter
Third quarter
Second quarter
First quarter

Dividends

High

Low

Dividends
Declared

$60.90
$52.65
$54.45
$52.75

$51.25
$49.00
$49.50
$39.05

$45.70
$43.05
$44.75
$41.95

$41.45
$40.45
$39.00
$28.95

$0.25
$0.25
$0.23
$0.23

$0.22
$0.22
$0.21
$0.21

Any determination to pay cash dividends to our shareholders is at the discretion of our Board of Directors and
will depend upon our financial condition, operating results, capital requirements, customary debt covenant
restrictions, legal requirements and other factors that our Board of Directors deems relevant. As a result, there is
no assurance as to the payment of future dividends.

Issuer Purchases of Equity Securities

Since October 2013, the Board of Directors has authorized the Company to repurchase in aggregate up to
$225 million of the Company’s common stock. The program may be modified, suspended or discontinued at any
time without prior notice and currently has an expiration date of March 31, 2019. Under the share repurchase
program, shares of common stock may be purchased on the open market or through privately negotiated
transactions from time-to-time. The timing and amount of purchases will be based upon market conditions,
securities law limitations and other factors. The share repurchase program does not obligate the Company to
acquire any specific number of shares in any period.

There were no shares repurchased under the share repurchase program during the quarter ended August 31, 2018.

Period

June 1, 2018 – June 30, 2018
July 1, 2018 – July 31, 2018
August 1, 2018 – August 31, 2018

Average Price
Paid Per Share
(Including
Commissions)

Total Number of
Shares Purchased
as Part of
Publically
Announced Plans
or Programs

Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the Plans or
Programs

Total Number of
Shares Purchased

–
–
–

–

–
–
–

–

$87,989,491
$87,989,491
$87,989,491

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Performance Graph

The following graph demonstrates a comparison of cumulative total returns for the Company’s Common Stock,
the Dow Jones U.S. Industrial Transportation Index and the Standard & Poor’s (S&P) 500 Index. The graph
assumes an investment of $100 on August 31, 2013 in each of the Company’s Common Stock and the stocks
comprising the indices. Each of the indices assumes that all dividends were reinvested and that the investment
was maintained to and including August 31, 2018, the end of the Company’s 2018 fiscal year.

The comparisons in this table are required by the SEC, and therefore, are not intended to forecast or be indicative
of possible future performance of our Common Stock.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among The Greenbrier Companies, Inc., the S&P 500 Index
and the Dow Jones US Industrial Transportation Index

$350

$300

$250

$200

$150

$100

$50

8/13

8/14

8/15

8/16

8/17

8/18

The Greenbrier Companies, Inc.

S&P 500

Dow Jones US Industrial Transportation

*$100 invested on 8/31/13 in stock or index, including reinvestment of dividends.
Fiscal year ending August 31.

Equity Compensation Plan Information

Equity Compensation Plan Information is hereby incorporated by reference to the “Equity Compensation Plan
Information” table in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which
Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after
the end of the Registrant’s year ended August 31, 2018.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 6. SELECTED FINANCIAL DATA

(In thousands, except unit and per share data)
Statement of Operations Data
Revenue:

Manufacturing
Wheels, Repair & Parts
Leasing & Services

2018

2017

2016

2015

2014

YEARS ENDED AUGUST 31,

$2,044,586
347,023
127,855
$2,519,464

$1,725,188
312,679
131,297
$2,169,164

$2,096,331
322,395
260,798
$2,679,524

$2,136,051
371,237
97,990
$2,605,278

$1,624,916
495,627
83,419
$2,203,962

Earnings from operations

$ 252,985

$ 260,432

$ 408,552

$ 386,892

$ 239,520

Net earnings attributable to Greenbrier

$ 151,781(1) $ 116,067(1) $ 183,213

$ 192,832

$ 111,919 (2)

Basic earnings per common share

attributable to Greenbrier:

Diluted earnings per common share

attributable to Greenbrier:

Weighted average common shares outstanding:

Basic
Diluted

Cash dividends paid per share
Balance Sheet Data
Total assets
Revolving notes and notes payable, net
Total equity
Other Operating Data
New railcar units delivered
New railcar backlog (units)
New railcar backlog
Lease fleet:

Units managed
Units owned
Cash Flow Data
Capital expenditures:
Manufacturing
Wheels, Repair & Parts
Leasing & Services

Proceeds from sale of assets

Depreciation and amortization:

Manufacturing
Wheels, Repair & Parts
Leasing & Services

4.92

4.68

30,857
32,835
0.96

3.97

3.65

29,225
32,562
0.86

6.28

5.73

29,156
32,468
0.81

6.85

5.93

28,151
33,328
0.60

3.97

3.44

28,164
34,209
0.15

$2,465,464
$ 463,930
$1,384,215

$2,397,705
$ 562,552
$1,178,893

$1,835,774
$ 301,853
$1,016,827

$1,787,452
$ 374,258
$ 863,489

$1,511,199
$ 452,203
$ 573,721

19,000
27,400
$2,740,000

15,700
28,600
$2,800,000

20,300
27,500
$3,190,000

21,100
41,300
$4,710,000

16,200
31,500
$3,330,000

357,000
8,100

336,000
8,300

264,000
8,900

260,000
9,300

238,000
8,600

59,707
5,204
111,937
$ 176,848

$ 153,224

44,225
10,771
19,360
74,356

54,973
3,129
27,963
86,065

24,149

33,807
11,143
20,179
65,129

51,294
10,190
77,529
$ 139,013

$ 103,715

27,137
11,971
24,237
63,345

84,354
9,381
12,254
$ 105,989

5,295

20,668
11,748
12,740
45,156

55,979
8,774
5,474
70,227

54,235

15,341
12,582
12,499
40,422

(1)

(2)

2018 and 2017 includes the Company’s portion of non-cash goodwill impairment charges taken by GBW. As the
Company accounted for GBW under the equity method of accounting, its 50% share of the non-cash goodwill
impairment losses recognized by GBW was $9.5 million after-tax in 2018 and $3.5 million after-tax in 2017.
2014 includes a non-cash gain on contribution to joint venture of $13.6 million net of tax and a restructuring charge of
$1.0 million net of tax. The gain related to the Company contributing its repair operations to GBW.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Executive Summary

We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Prior
to August 20, 2018, we operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing &
Services; and GBW Joint Venture. On August 20, 2018 we entered into an agreement with our joint venture
partner to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to us.

Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities
in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars,
tank cars,
conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment
performs wheel and axle servicing; railcar repair, refurbishment and maintenance; as well as production of a
variety of parts for the railroad industry in North America. The Leasing & Services segment owns approximately
8,100 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication
and 200 held as finished goods inventory) and provides management services for approximately 357,000 railcars
for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North
America as of August 31, 2018. Through unconsolidated affiliates we produce rail and industrial castings, tank
heads and other components and we have an ownership stake in a railcar manufacturer in Brazil and a lease
financing warehouse.

Our total manufacturing backlog of railcar units as of August 31, 2018 was approximately 27,400 units with an
estimated value of $2.74 billion, of which 21,200 units are for direct sales and 6,200 units are for lease to third
parties. Approximately 3% of backlog units and 2% of the estimated value as of August 31, 2018 was associated
with our Brazilian manufacturing operations which is accounted for under the equity method. Backlog units for
lease may be syndicated to third parties or held in our own fleet depending on a variety of factors. Multi-year
supply agreements are a part of rail industry practice. A portion of the orders included in backlog reflects an
assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future,
which may impact the dollar amount of backlog. Marine backlog as of August 31, 2018 was $61 million
compared to $42 million as of August 31, 2017.

In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake
in Rayvag, a railcar manufacturing company based in Adana, Turkey that also provides maintenance services for
railcars and manufactures bogies and spare parts for railcars in that region. The amount paid to acquire our
ownership stake in Rayvag was not material to our consolidated financial statements.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Overview

Revenue, cost of revenue, margin and operating profit presented below, include amounts from external parties
and exclude intersegment activity that is eliminated in consolidation.

(In thousands)

Revenue:

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Cost of revenue:
Manufacturing
Wheels, Repair & Parts
Leasing & Services

Margin:

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Selling and administrative
Net gain on disposition of equipment

Earnings from operations
Interest and foreign exchange

Earnings before income tax and earnings (loss) from unconsolidated

affiliates

Income tax expense

Earnings before earnings (loss) from unconsolidated affiliates
Earnings (loss) from unconsolidated affiliates

Net earnings
Net earnings attributable to noncontrolling interest

Net earnings attributable to Greenbrier
Diluted earnings per common share

2018

2017

2016

$2,044,586
347,023
127,855

$1,725,188
312,679
131,297

$2,096,331
322,395
260,798

2,519,464

2,169,164

2,679,524

1,727,407
318,330
64,672

1,373,967
288,336
85,562

1,630,554
293,751
203,782

2,110,409

1,747,865

2,128,087

317,179
28,693
63,183

409,055
200,439
(44,369)

252,985
29,368

223,617
(32,893)

190,724
(18,661)

172,063
(20,282)

351,221
24,343
45,735

421,299
170,607
(9,740)

260,432
24,192

236,240
(64,014)

172,226
(11,764)

160,462
(44,395)

465,777
28,644
57,016

551,437
158,681
(15,796)

408,552
13,502

395,050
(112,322)

282,728
2,096

284,824
(101,611)

$ 151,781
4.68
$

$ 116,067
3.65
$

$ 183,213
5.73
$

Performance for our segments is evaluated based on operating profit. Corporate includes selling and
administrative costs not directly related to goods and services and certain costs that are intertwined among
segments due to our integrated business model. Management does not allocate Interest and foreign exchange or
Income tax expense for either external or internal reporting purposes.

(In thousands)

Operating profit:
Manufacturing
Wheels, Repair & Parts
Leasing & Services
Corporate

2018

2017

2016

$240,901
16,731
88,481
(93,128)

$295,334
14,984
31,904
(81,790)

$415,094
19,948
51,723
(78,213)

$252,985

$260,432

$408,552

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Consolidated Results

(In thousands)

2018

2017

2016

Increase
(Decrease)

%
Change

Increase
(Decrease)

%
Change

Years ended August 31,

2018 vs 2017

2017 vs 2016

Revenue
Cost of revenue
Margin (%)
Net earnings attributable to

Greenbrier
* Not meaningful

$2,519,464
$2,110,409
16.2%

$2,169,164
$1,747,865
19.4%

$2,679,524
$2,128,087
20.6%

$350,300
$362,544
(3.2%)

16.1% $(510,360)
20.7% $(380,222)
(1.2%)

(19.0%)
(17.9%)

$ 151,781

$ 116,067

$ 183,213

$ 35,714

30.8% $ (67,146)

(36.6%)

Through our integrated business model, we provide a broad range of products and services in each of our
segments, which have various average selling prices and margins. The demand for and mix of products and
services delivered changes from period to period, which causes fluctuations in our results of operations.

The 16.1% increase in revenue for the year ended August 31, 2018 as compared to the year ended August 31,
2017 was primarily due to an 18.5% increase in Manufacturing revenue. The increase in Manufacturing revenue
was primarily due to a 21.0% increase in the volume of railcar deliveries and a change in product mix. The
increase was also attributed to an 11.0% increase in Wheels, Repair & Parts revenue primarily as a result of
higher wheel set and component volumes due to an increase in demand and an increase in scrap metal pricing.
The 19.0% decrease in revenue for the year ended August 31, 2017 as compared to the year ended August 31,
2016 was primarily due to a 17.7% decrease in Manufacturing revenue. The decrease in Manufacturing revenue
was primarily due to a 22.7% decrease in the volume of railcar deliveries which was partially offset by a higher
average selling price. The decrease was also due to a 49.7% decrease in Leasing & Services revenue, primarily
the result of a decrease in the sale of railcars which we had purchased from third parties with the intent to resell
them.

The 20.7% increase in cost of revenue for the year ended August 31, 2018 as compared to the year ended
August 31, 2017 was primarily due to a 25.7% increase in Manufacturing cost of revenue. The increase in
Manufacturing cost of revenue was primarily due to a 21.0% increase in the volume of railcar deliveries and a
change in product mix. The increase was also attributed to a 10.4% increase in Wheels, Repair & Parts cost of
revenue primarily due to higher wheel set and component costs associated with increased volumes. The overall
increase in cost of revenue was partially offset by a 24.4% decrease in Leasing & Services cost of revenue
primarily due to a decline in the volume of railcars sold that we purchased from third parties, lower maintenance
and transportation costs and fewer railcars on operating leases as we rebalance our lease portfolio. The 17.9%
decrease in cost of revenue for the year ended August 31, 2017 as compared to the year ended August 31, 2016
was primarily due to a 15.7% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of
revenue was primarily due to a 22.7% decrease in the volume of railcar deliveries which was partially offset by a
product mix which had a higher average labor and material content. The decrease was also due to a 58.0%
decrease in Leasing & Services cost of revenue primarily due to a decrease in costs associated with a decline in
the volume of railcars sold that we purchased from third parties.

Margin as a percentage of revenue was 16.2% for the year ended August 31, 2018 and 19.4% for the year ended
August 31, 2017. The overall margin as a percentage of revenue was negatively impacted by a decrease in
Manufacturing margin to 15.5% from 20.4% primarily attributed to a change in product mix. This was partially
offset by an increase in Leasing & Services margin to 49.4% from 34.8%. Leasing & Services margin percentage
in 2018 benefited from fewer sales of railcars that we purchased from third parties which have lower margin
percentages, lower maintenance costs, a higher average volume of rent-producing leased railcars for syndication
and lower transportation costs. Margin as a percentage of revenue was 19.4% for the year ended August 31, 2017
and 20.6% for the year ended August 31, 2016. The overall margin as a percentage of revenue was negatively
impacted by a decrease in Manufacturing margin to 20.4% from 22.2% primarily due to a change in product mix
and a reduction in the volume of railcar deliveries. In addition, the overall margin as a percentage of revenue was
negatively impacted by a decrease in Wheels, Repair & Parts margin to 7.8% from 8.9%, primarily due to lower
wheel set and component volumes. The overall margin as a percentage of revenue was positively impacted by an

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

increase in Leasing & Services margin to 34.8% from 21.9% which was primarily a result of a decrease in the
syndication, or sale, of railcars that we purchased from third parties which have lower margin percentages.

The $35.7 million increase in net earnings attributable to Greenbrier for the year ended August 31, 2018 as
compared to the year ended August 31, 2017 was primarily attributable to a higher Net gain on disposition of
equipment and a reduction in the tax rate due to the Tax Cuts and Jobs Act (Tax Act). See Note 18 – Income
Taxes for further discussion of the impact of the Tax Act. The $67.1 million decrease in net earnings for the year
ended August 31, 2017 as compared to the year ended August 31, 2016 was primarily attributable to a decrease
in margin, net of tax, due to lower railcar deliveries, which was partially offset by lower Net earnings attributable
to noncontrolling interest in 2017 as a result of our Mexican railcar manufacturing 50/50 joint venture operating
at lower volumes and margins.

Manufacturing Segment

(In thousands)

Revenue
Cost of revenue
Margin (%)
Operating profit ($)
Operating profit (%)
Deliveries
* Not meaningful

Years ended August 31,

2018 vs 2017

2017 vs 2016

2018

2017

2016

Increase
(Decrease)

%
Change

Increase
(Decrease)

%
Change

$2,044,586
$1,727,407
15.5%
$ 240,901
11.8%
19,000

$1,725,188
$1,373,967
20.4%
$ 295,334
17.1%
15,700

$2,096,331
$1,630,554
22.2%
$ 415,094
19.8%
20,300

$319,398
$353,440
(4.9%)
$ (54,433)
(5.3%)
3,300

18.5% $(371,143)
25.7% $(256,587)
(1.8%)
(18.4%) $(119,760)
(2.7%)
(4,600)

*
21.0%

(17.7%)
(15.7%)
*
(28.9%)
*
(22.7%)

the Manufacturing segment

As of June 1, 2017,
included the results of Greenbrier-Astra Rail which is
consolidated for financial reporting purposes. The results of Greenbrier-Astra Rail were included for 12 months
in 2018, but only for three months in 2017 which partially contributed to the increase in Manufacturing revenue
and cost of revenue in 2018 compared to 2017.

Manufacturing revenue increased $319.4 million or 18.5% in 2018 compared to 2017. The increase in revenue
was primarily attributed to a 21.0% increase in the volume of railcar deliveries and a change in product mix.
Manufacturing revenue decreased $371.1 million or 17.7% in 2017 compared to 2016 primarily due to a 22.7%
decrease in the volume of railcar deliveries and a change in product mix.

Manufacturing cost of revenue increased $353.4 million or 25.7% in 2018 compared to 2017. The increase in
cost of revenue was primarily attributed to a 21.0% increase in the volume of railcar deliveries and a change in
product mix. Manufacturing cost of revenue decreased $256.6 million or 15.7% in 2017 compared to 2016 due to
a decrease of 22.7% in the volume of railcar deliveries and a change in product mix.

Manufacturing margin as a percentage of revenue decreased 4.9% in 2018 compared to 2017 primarily due to a
change in product mix. Manufacturing margin as a percentage of revenue decreased 1.8% in 2017 compared to
2016 primarily due to a change in product mix partially offset by customer order renegotiation fees received
during the year ended August 31, 2017.

Manufacturing operating profit decreased $54.4 million or 18.4% in 2018 compared to 2017 primarily attributed
to a lower margin percentage from a change in product mix and increased costs associated with expanded
railcar deliveries.
international operations. This was partially offset by an increase in the volume of
Manufacturing operating profit decreased $119.8 million or 28.9% in 2017 compared to 2016 primarily attributed
to a decrease in margin due to lower railcar deliveries.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Wheels, Repair & Parts Segment

(In thousands)

Revenue
Cost of revenue
Margin (%)
Operating profit ($)
Operating profit (%)
* Not meaningful

Years ended August 31,

2018 vs 2017

2017 vs 2016

2018

2017

2016

Increase
(Decrease)

%
Change

Increase
(Decrease)

%
Change

$347,023
$318,330
8.3%
$ 16,731
4.8%

$312,679
$288,336
7.8%
$ 14,984
4.8%

$322,395
$293,751
8.9%
$ 19,948
6.2%

$34,344
$29,994
0.5%
$ 1,747
0.0%

11.0% $(9,716)
10.4% $(5,415)
(1.1%)
11.7% $(4,964)
(1.4%)

(3.0%)
(1.8%)
*

(24.9%)

On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar
repair joint venture, which resulted in 12 repair shops returned to us. Beginning on August 20, 2018, the results
of operations from our repair shops are included in the Wheels, Repair & Parts segment as these repair operations
are now consolidated for financial reporting purposes.

Wheels, Repair & Parts revenue increased $34.3 million or 11.0% in 2018 compared to 2017 primarily as a result
of higher wheel set and component volumes due to an increase in demand and an increase in scrap metal pricing.
Revenue decreased $9.7 million or 3.0% in 2017 compared to 2016 primarily as a result of lower wheel set and
component volumes due to a decrease in demand partially offset by an increase in parts volume.

Wheels, Repair & Parts cost of revenue increased $30.0 million or 10.4% in 2018 compared to 2017 primarily
due to higher wheel set and component costs associated with increased volumes. Cost of revenue decreased
$5.4 million or 1.8% in 2017 compared to 2016 primarily due to lower wheel set and component costs associated
with decreased volumes.

Wheels, Repair & Parts margin as a percentage of revenue increased 0.5% in 2018 compared to 2017 due to
efficiencies from operating at higher wheel set and component volumes and an increase in scrap metal pricing.
This was partially offset by a less favorable parts product mix. Margin as a percentage of revenue decreased
1.1% in 2017 compared to 2016 due to lower wheel set and component volumes. This was partially offset by a
more favorable parts product mix and an increase in scrap metal pricing.

Wheels, Repair & Parts operating profit increased $1.7 million or 11.7% in 2018 compared to 2017 primarily
attributable to higher margins due to an increase in wheel set and component volumes and an increase in
efficiencies. Operating profit decreased $5.0 million or 24.9% in 2017 compared to 2016 primarily attributable to
a decrease in margin due to a decrease in wheel set and component volumes.

Leasing & Services Segment

(In thousands)

Revenue
Cost of revenue
Margin (%)
Operating profit ($)
Operating profit (%)
* Not meaningful

Years ended August 31,

2018 vs 2017

2017 vs 2016

2018

2017

2016

Increase
(Decrease)

%
Change

Increase
(Decrease)

%
Change

$127,855
$ 64,672
49.4%
$ 88,481
69.2%

$131,297
$ 85,562
34.8%
$ 31,904
24.3%

$260,798
$203,782
21.9%
$ 51,723
19.8%

$ (3,442)
$(20,890)
14.6%
$ 56,577
44.9%

(2.6%) $(129,501)
(24.4%) $(118,220)
12.9%
177.3% $ (19,819)
4.5%

(49.7%)
(58.0%)

(38.3%)

The Leasing & Services segment primarily generates revenue from leasing railcars from its lease fleet and
providing various management services. We also earn revenue from rent-producing leased railcars for
syndication, which are held short term and classified as Leased railcars for syndication on our Consolidated
Balance Sheet. From time to time, railcars are purchased from third parties with the intent to resell them. The
gross proceeds from the sale of these railcars are recorded in revenue and the cost of purchasing these railcars are
recorded in cost of revenue.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Leasing & Services revenue decreased $3.4 million or 2.6% in 2018 compared to 2017. The change in revenue
was primarily attributed to a decrease in the sale of railcars which we had purchased from third parties with the
intent to resell them and a decline in leasing revenue due to fewer railcars on operating leases as we rebalance
our lease portfolio. This was partially offset by higher management services revenue from new service
agreements and a higher average volume of rent-producing leased railcars for syndication. Leasing & Services
revenue decreased $129.5 million or 49.7% in 2017 compared to 2016 primarily as the result of a $116.5 million
decrease in the sale of railcars which we had purchased from third parties with the intent to resell them. The
decrease in revenue was also due to lower average volume of rent-producing leased railcars held for syndication.

Leasing & Services cost of revenue decreased $20.9 million or 24.4% in 2018 compared to 2017 primarily due to
a decline in the volume of railcars sold that we purchased from third parties,
lower maintenance and
transportation costs and fewer railcars on operating leases as we rebalance our lease portfolio. Leasing &
Services cost of revenue decreased $118.2 million or 58.0% in 2017 compared to 2016 primarily due to a
decrease in costs associated with a decline in the volume of railcars sold that we purchased from third parties.
This was partially offset by higher transportation and storage costs.

Leasing & Services margin as a percentage of revenue increased 14.6% in 2018 compared to 2017. Margin
percentage for 2018 benefited from fewer sales of railcars that we purchased from third parties which have lower
margin percentages, lower maintenance costs, a higher average volume of rent-producing leased railcars for
syndication and lower transportation costs. Leasing & Services margin as a percentage of revenue increased
12.9% in 2017 compared to 2016 primarily as a result of a benefit from fewer sales of railcars that we purchased
from third parties which have lower margin percentages which was partially offset by higher transportation and
storage costs.

Leasing & Services operating profit increased $56.6 million or 177.3% in 2018 compared to 2017 primarily
attributed to a $40.8 million increase in net gain on disposition of equipment and an $17.4 million increase in
margin. The net gain on disposition of equipment for 2018 related to higher volumes of equipment sales as we
rebalance our lease portfolio. Leasing & Services operating profit decreased $19.8 million or 38.3% in 2017
compared to 2016 primarily attributed to a $11.3 million decrease in margin and a $7.7 million decrease in net
gain on disposition of equipment.

The percentage of owned units on lease was 94.4% at August 31, 2018, 92.1% at August 31, 2017 and 91.0% at
August 31, 2016.

GBW Joint Venture Segment

To reflect our 50% share of GBW’s results, we recorded a net loss of $15.9 million and $9.7 million for the years
ended August 31, 2018 and 2017, respectively, and earnings of $3.2 million for the year ended August 31, 2016.

The losses for the years ended August 31, 2018 and 2017 primarily related to non-cash goodwill impairment
losses recorded by GBW. GBW recorded a pre-tax goodwill impairment loss of $26.4 million in 2018 and
$11.2 million in 2017. As we account for GBW under the equity method of accounting, our 50% share of the
non-cash goodwill impairment loss recognized by GBW was $9.5 million after-tax in 2018 and $3.5 million
after-tax in 2017 which were included as part of Earnings (loss) from unconsolidated affiliates on our
Consolidated Statement of Income.

On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar
repair joint venture, which resulted in 12 repair shops returned to us. Beginning on August 20, 2018, GBW Joint
Venture was no longer considered a reportable segment.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Selling and Administrative

Years ended August 31,

(In thousands)

2018

2017

2016

2018 vs 2017
%
Change

Increase
(Decrease)

2017 vs 2016
%
Change

Increase
(Decrease)

Selling and Administrative

$200,439

$170,607

$158,681

$29,832

17.5% $11,926

7.5%

Selling and administrative expense was $200.4 million or 8.0% of revenue for the year ended August 31, 2018,
$170.6 million or 7.9% of revenue for the year ended August 31, 2017 and $158.7 million or 5.9% of revenue for
the year ended August 31, 2016.

The $29.8 million increase in 2018 compared to 2017 was primarily attributed to a $10.1 million increase in
professional fees, consulting and related costs associated with strategic business development, litigation and IT
initiatives, $8.8 million from the addition of Astra Rail’s selling and administrative costs and a $6.0 million
increase in employee costs.

The $11.9 million increase in 2017 compared to 2016 was primarily attributed to a $9.2 million increase in legal
and consulting costs primarily associated with strategic business development, litigation and IT initiatives. The
increase was also attributed to the addition of Astra Rail’s selling and administrative costs which totaled
$2.6 million since its acquisition on June 1, 2017 and a $0.8 million increase in research and development costs
primarily related to our European manufacturing operations. This was partially offset by a $1.7 million decrease
in the revenue-based fees paid to our joint venture partner in Mexico.

Net Gain on Disposition of Equipment

Net gain on disposition of equipment was $44.4 million, $9.7 million and $15.8 million for the years ended
August 31, 2018, 2017 and 2016, respectively. Net gain on disposition of equipment primarily includes the sale
of assets from our lease fleet (Equipment on operating leases, net) that are periodically sold in the normal course
of business in order to take advantage of market conditions and to manage risk and liquidity and disposition of
property, plant and equipment.

The net gain on disposition of equipment in 2018 was higher than for the prior year primarily due to greater
volumes of equipment sales as we rebalance our lease portfolio. The gain for the year ended August 31, 2017
primarily consisted of $5.2 million in insurance proceeds received in excess of net book value on assets
destroyed in fires at two of our manufacturing facilities and $4.5 million in gains realized on the disposition of
leased assets and property, plant and equipment. The gain for the year ended August 31, 2016 primarily consisted
of $12.0 million in gains realized on the disposition of leased assets and property, plant and equipment and
$3.5 million in insurance proceeds received in excess of net book value on assets destroyed in fires at a
manufacturing facility and a Wheels, Repair & Parts facility.

Interest and Foreign Exchange

Interest and foreign exchange expense was composed of the following:

(In thousands)

Interest and foreign exchange:
Interest and other expense
Foreign exchange loss (gain)

Years ended August 31,
2017

2018

2016

Increase (decrease)

2018 vs 2017

2017 vs 2016

$30,946
(1,578)

$23,519
673

$17,268
(3,766)

$ 7,427
(2,251)

$29,368

$24,192

$13,502

$ 5,176

$ 6,251
4,439

$10,690

Interest and foreign exchange increased $5.2 million in 2018 from 2017 primarily due to interest expense
associated with our $275 million convertible senior notes due 2024 issued in February 2017 and additional
interest expense due to the addition of Astra Rail. This was partially offset by the maturity of the $119 million
convertible senior notes in April 2018 and higher foreign exchange gain in 2018. The change in foreign exchange
loss (gain) was primarily attributed to the change in the Mexican Peso relative to the U.S. Dollar and the change
in the Polish Zloty exchange rates relative to the Euro.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Interest and foreign exchange increased $10.7 million in 2017 from 2016 primarily attributed to interest expense
associated with our $275 million convertible senior notes due 2024 which we issued in February 2017. In
addition, the increase in interest and foreign exchange was attributed to a $0.7 million foreign exchange loss in
2017 compared to $3.8 million gain in 2016. The change in foreign exchange loss (gain) was primarily attributed
to the change in the Mexican Peso and Polish Zloty exchange rates relative to the U.S. Dollar and the change in
the Polish Zloty exchange rates relative to the Euro.

Income Tax

In 2018 our income tax expense was $32.9 million on $223.6 million of pre-tax earnings for an effective tax rate
of 14.7%. In 2017 our income tax expense was $64.0 million on $236.2 million of pre-tax earnings for an
effective tax rate of 27.1%. In 2016 our income tax expense was $112.3 million on $395.0 million of pre-tax
earnings for an effective tax rate of 28.4%.

The reduction in the 2018 tax rate from that of earlier years was primarily due to the enactment of the Tax Act on
December 22, 2017. The Tax Act made significant changes to U.S. federal income tax laws, including, but not
limited to, a reduction of the corporate tax rate from 35% to 21% and a transition tax on foreign earnings not
previously subject to U.S. taxation. Deferred income taxes were remeasured as a result of the new statutory rate.
This resulted in a tax benefit of $33.6 million during 2018. As a result of our fiscal year end, our blended
statutory rate is 25.7% for 2018. See Note 18 – Income Taxes for further discussion of the impact of the Tax Act.

The tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can
also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar
manufacturing joint venture because the joint venture is predominantly treated as a partnership for tax purposes
and, as a result, the partnership’s entire pre-tax earnings are included in Earnings before income taxes and
earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax
expense.

Earnings (Loss) From Unconsolidated Affiliates

Earnings (loss) from unconsolidated affiliates primarily included our share of after-tax results from the GBW
joint venture, our Brazil operations which include a castings joint venture and a railcar manufacturing joint
venture, our lease financing warehouse investment, our North American castings joint venture and our tank head
joint venture.

Earnings (loss) from unconsolidated affiliates was a loss of $18.7 million and $11.8 million for the years ended
August 31, 2018 and 2017, respectively, and earnings of $2.1 million for the year ended August 31, 2016.
Earnings (loss) from unconsolidated affiliates decreased $6.9 million in 2018 and $13.9 million in 2017 primarily
due to goodwill impairment losses recorded by GBW. GBW recorded a pre-tax goodwill impairment loss of
$26.4 million in 2018 and $11.2 million in 2017. As we account for GBW under the equity method of
accounting, our 50% share of the non-cash goodwill impairment loss recognized by GBW was $9.5 million
after-tax in 2018 and $3.5 million after-tax in 2017, which were included as part of Earnings (loss) from
unconsolidated affiliates on our Consolidated Statement of Income.

Net Earnings Attributable to Noncontrolling Interest

The years ended August 31, 2018, 2017 and 2016 include Net earnings attributable to noncontrolling interest of
$20.3 million, $44.4 million and $101.6 million, respectively, which primarily represents our joint venture
partner’s share in the results of operations of our Mexican railcar manufacturing joint venture, adjusted for
intercompany sales and our European partner’s share of the results of Greenbrier-Astra Rail.

The decrease of $24.1 million in 2018 compared to 2017 is primarily a result of a decrease in earnings due to
lower margins at our Mexican railcar manufacturing joint venture and a loss at our Greenbrier-Astra Rail
operations in Europe. The decrease of $57.2 million in 2017 compared to 2016 is primarily a result of a decrease
in the volume of railcar deliveries and lower margins at our Mexican railcar manufacturing joint venture.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Liquidity and Capital Resources

(In thousands)

Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes

Net increase (decrease) in cash and cash equivalents

Years Ended August 31,
2017

2016

2018

$103,341
(80,219)
(89,267)
(14,666)

$ 285,604
(113,738)
204,422
12,499

$ 337,170
(55,708)
(227,415)
(4,298)

$ (80,811) $ 388,787

$ 49,749

We have been financed through cash generated from operations and borrowings. At August 31, 2018 cash and
cash equivalents was $530.7 million, a decrease of $80.8 million from $611.5 million at the prior year end.

The decrease in cash provided by operating activities in 2018 compared to 2017 was primarily due to a net
change in working capital, a change in cash flows associated with leased railcars for syndication, a change in
deferred revenue, an increase in net gain on disposition of equipment and a change in deferred income taxes as a
result of the Tax Act. The decrease in cash provided by operating activities in 2017 compared to 2016 was
primarily due to lower earnings and a net change in working capital.

Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets.
The change in cash used in investing activities in 2018 compared to 2017 was primarily attributable to higher
proceeds from the sale of assets partially offset by an increase in capital expenditures. The change in cash used in
investing activities in 2017 compared to 2016 was primarily attributable to lower proceeds from the sale of
assets, investment related to the Greenbrier-Astra Rail transaction and an increase in investment in and advances
to unconsolidated affiliates, primarily related to our Brazil operations. This was partially offset by lower capital
expenditures for the year ended August 31, 2017 compared to 2016 and less restricted cash compared to the prior
year.

Capital expenditures totaled $176.8 million, $86.1 million and $139.0 million for the years ended August 31,
2018, 2017 and 2016, respectively. Manufacturing capital expenditures were approximately $59.7 million,
$55.0 million and $51.3 million for the years ended August 31, 2018, 2017 and 2016, respectively. Capital
expenditures for Manufacturing are expected to be approximately $75 million in 2019 and primarily relate to
enhancements of our existing manufacturing facilities. Wheels, Repair & Parts capital expenditures were
approximately $5.2 million, $3.1 million and $10.2 million for the years ended August 31, 2018, 2017 and 2016,
respectively. Capital expenditures for Wheels, Repair & Parts are expected to be approximately $15 million in
2019 for enhancements of our existing facilities, including our repair shops. Leasing & Services and corporate
capital expenditures were approximately $111.9 million, $28.0 million and $77.5 million for the years ended
August 31, 2018, 2017 and 2016, respectively. Leasing & Services and corporate capital expenditures for 2019
are expected to be approximately $90 million. Proceeds from sales of leased railcar equipment are expected to be
approximately $120 million for 2019. The asset additions and dispositions for Leasing & Services in 2018
primarily relate to higher volumes of equipment purchases and sales as we rebalance our lease portfolio. Assets
from our lease fleet are periodically sold in the normal course of business in order to take advantage of market
conditions and to manage risk and liquidity.

Proceeds from the sale of assets, which primarily related to sales of railcars from our lease fleet within Leasing &
Services, were approximately $153.2 million, $24.1 million and $103.7 million for the years ended August 31,
2018, 2017 and 2016, respectively. These proceeds included approximately $7.7 million and $44.1 million of
equipment sold pursuant
to sale leaseback transactions for the years ended August 31, 2017 and 2016,
respectively. The gain resulting from the sale leaseback transactions was deferred and is being recognized over
the lease term in Net gain on disposition of equipment. In addition, proceeds from the sale of assets for the years
ended August 31, 2017 and 2016 included $6.2 million and $3.8 million, respectively, of insurance proceeds
associated with our Manufacturing segment in 2017 and 2016 and Wheels, Repair & Parts segment in 2016.

The change in cash provided by (used in) financing activities in 2018 compared to 2017 was primarily attributed
to a decrease in the proceeds of debt, net of repayments and a change in the net activities with joint venture

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

partners. The change in cash provided by (used in) financing activities in 2017 compared to 2016 was primarily
attributed to proceeds from the issuance of convertible senior notes, a reduction in cash distribution to our joint
venture partner and reduced share repurchases.

A quarterly dividend of $0.25 per share was declared on October 24, 2018.

The Board of Directors has authorized our company to repurchase in aggregate up to $225 million of our
common stock. We did not repurchase any shares during the year ended August 31, 2018. As of August 31, 2018,
we had cumulatively repurchased 3,206,226 shares for approximately $137.0 million since October 2013 and had
$88.0 million available under the share repurchase program with an expiration date of March 31, 2019.

In September 2018, we refinanced approximately $170 million of existing senior term debt, due in March 2020,
secured by a pool of leased railcars with new 5-year $225 million senior term debt also secured by a pool of
leased railcars. The new debt bears a floating interest rate of LIBOR plus 1.50% or Prime plus 0.50%. The term
loan is to be repaid in equal quarterly installments of $1.97 million with the remaining outstanding amounts, plus
accrued interest, to be paid on the maturity date in September 2023. An interest rate swap agreement was entered
into on 50% of the initial balance to swap the floating interest rate to a fixed rate of 2.99%.

Our 3.5% convertible senior notes due 2018 matured on April 1, 2018. The conversion of these notes resulted in
the issuance of an additional 3.4 million shares of our common stock. These additional shares have historically
been included in the calculation of diluted earnings per share.

In February 2017, we issued $275 million of convertible senior notes due 2024. The notes are senior unsecured
obligations and rank equally with other senior unsecured debt. The notes bear interest at an annual rate of 2.875%
payable semiannually in arrears on February 1 and August 1 of each year, commencing August 1, 2017. The
notes will mature on February 1, 2024, unless earlier repurchased or converted in accordance with their terms.

Senior secured credit facilities, consisting of three components, aggregated to $635.3 million as of August 31,
2018. We had an aggregate of $450.1 million available to draw down under committed credit facilities as of
August 31, 2018. This amount consists of $392.6 million available on the North American credit facility,
$7.5 million on the European credit facilities and $50.0 million on the Mexican railcar manufacturing joint
venture credit facilities.

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by
substantially all of our assets in the U.S. not otherwise pledged as security for term loans, was available to
provide working capital and interim financing of equipment, principally for
the U.S. and Mexican
operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on
the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of
inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated
capitalization and fixed charges coverage ratios. In September 2018, this revolving line of credit was renewed on
terms similar to the existing facility and increased to $600.0 million with a new maturity date of September 2023.
In addition, advances under this renewed facility bear interest at LIBOR plus 1.50% or Prime plus 0.50%
depending on the type of borrowing.

As of August 31, 2018, lines of credit totaling $35.3 million secured by certain of our European assets, with
variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.3% and
Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of our European
manufacturing operation. European credit facilities are continually being renewed. Currently, these European
credit facilities have maturities that range from December 2018 through June 2019.

As of August 31, 2018, our Mexican railcar manufacturing joint venture had two lines of credit totaling
$50.0 million. The first line of credit provides up to $30.0 million and is fully guaranteed by us and our joint
venture partner. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar
manufacturing joint venture will be able to draw against this facility through January 2019. The second line of
credit provides up to $20.0 million, of which we and our joint venture partner have each guaranteed 50%.
Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture
will be able to draw amounts available under this facility through July 2019.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

As of August 31, 2018, outstanding commitments under the senior secured credit facilities consisted of
$72.2 million in letters of credit under our North American credit facility and $27.7 million outstanding under
our European credit facilities.

The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us and
our various subsidiaries, the most restrictive of which, among other things, limit our ability to: incur additional
indebtedness or guarantees; pay dividends or repurchase stock; enter into capital leases; create liens; sell assets;
engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not
limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of
substantially all our assets; and enter into new lines of business. The covenants also require certain maximum
ratios of debt to total capitalization and minimum levels of fixed charges (interest plus rent) coverage. As of
August 31, 2018, we were in compliance with all such restrictive covenants.

From time to time, we may seek to repurchase or otherwise retire or exchange securities, including outstanding
notes, borrowings and equity securities, and take other steps to reduce our debt or otherwise improve our balance
sheet. These actions may include open market repurchases, unsolicited or solicited privately negotiated
transactions or other retirements, repurchases or exchanges. Such retirements, repurchases or exchanges, if any,
will depend on a number of factors, including, but not limited to, prevailing market conditions, trading levels of
our debt, our liquidity requirements and contractual restrictions, if applicable. The amounts involved in any such
transactions may, individually or in the aggregate, be material and may involve all or a portion of a particular
series of notes or other indebtedness which may reduce the float and impact the trading market of notes or other
indebtedness which remain outstanding.

As of August 31, 2018, we had a $10.0 million note receivable from Amsted-Maxion Cruzeiro, our
unconsolidated Brazilian castings and components manufacturer and a $7.2 million note receivable balance from
Greenbrier-Maxion, our unconsolidated Brazilian railcar manufacturer. These note receivables are included on
the Consolidated Balance Sheet in Accounts receivable, net. In the future, we may make loans to or provide
guarantees for Amsted-Maxion Cruzeiro or Greenbrier-Maxion.

We expect existing funds and cash generated from operations, together with proceeds from financing activities
including borrowings under existing credit facilities and long-term financings, to be sufficient to fund expected
debt
investments in our
unconsolidated affiliates and dividends during the next year.

repayments, working capital needs, planned capital expenditures, additional

The following table shows our estimated future contractual cash obligations as of August 31, 2018:

(In thousands)

Notes payable
Interest (1)
Railcar leases
Operating leases
Revolving notes
Other

Total

2019

Years Ending August 31,
2022
2021
2020

2023

Thereafter

$469,721
58,078
18,341
17,744
27,725
148

$26,775
14,850
6,287
6,048
27,725
129

$167,086
11,604
4,839
4,437
–
19

413 $

7,906
1,821
3,286
–
–

413
7,906
1,792
1,915
–
–

34
7,906
1,792
1,862
–
–

$275,000
7,906
1,810
196
–
–

$591,757

$81,814

$187,985

$13,426

$12,026

$11,594

$284,912

(1) A portion of the estimated future cash obligation relates to interest on variable rate borrowings.

Due to uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits
at August 31, 2018, we are unable to estimate the period of cash settlement with the respective taxing authority.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Therefore, approximately $1.8 million in uncertain tax positions, including interest, have been excluded from the
contractual table above. See Note 18 to the Consolidated Financial Statements for a discussion on income taxes.

Off Balance Sheet Arrangements

We do not currently have off balance sheet arrangements that have or are likely to have a material current or
future effect on our Consolidated Financial Statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S.
requires judgment on the part of management to arrive at estimates and assumptions on matters that are
inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported
in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the
financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods.
Actual results could differ from those estimates.

Income taxes - For financial reporting purposes, income tax expense is estimated based on amounts anticipated to
be reported on tax return filings. Those anticipated amounts may change from when the financial statements are
prepared to when the tax returns are filed. Further, because tax filings are subject to review by taxing authorities,
there is risk that a position taken in preparation of a tax return may be challenged by a taxing authority. If a
challenge is successful, differences in tax expense or between current and deferred tax items may arise in future
periods. Any material effect of such differences would be reflected in the financial statements when management
considers the effect more likely than not of occurring and the amount reasonably estimable. Valuation allowances
reduce deferred tax assets to amounts more likely than not that will be realized based on information available
when the financial statements are prepared. This information may include estimates of future income and other
assumptions that are inherently uncertain.

Maintenance obligations - We are responsible for maintenance on a portion of the managed and owned lease
fleet under the terms of maintenance obligations defined in the underlying lease or management agreement. The
estimated maintenance liability is based on maintenance histories for each type and age of railcar. These
estimates involve judgment as to the future costs of repairs and the types and timing of repairs required over the
lease term. As we cannot predict with certainty the prices, timing and volume of maintenance needed in the
future on railcars under long-term leases, this estimate is uncertain and could be materially different from
maintenance requirements. The liability is periodically reviewed and updated based on maintenance trends and
known future repair or refurbishment requirements. These adjustments could be material due to the inherent
uncertainty in predicting future maintenance requirements.

Warranty accruals - Warranty costs to cover a defined warranty period are estimated and charged to operations.
The estimated warranty cost is based on historical warranty claims for each particular product type. For new
product types without a warranty history, preliminary estimates are based on historical information for similar
product types. These estimates are inherently uncertain as they are based on historical data for existing products
and judgment for new products. If warranty claims are made in the current period for issues that have not
historically been the subject of warranty claims and were not taken into consideration in establishing the accrual
or if claims for issues already considered in establishing the accrual exceed expectations, warranty expense may
exceed the accrual for that particular product. Conversely, there is the possibility that claims may be lower than
estimates. The warranty accrual is periodically reviewed and updated based on warranty trends. However, as we
cannot predict future claims, the potential exists for the difference in any one reporting period to be material.

Environmental costs - At times we may be involved in various proceedings related to environmental matters. We
estimate future costs for known environmental remediation requirements and accrue for them when it is probable
that we have incurred a liability and the related costs can be reasonably estimated based on currently available
information. If further developments in or resolution of an environmental matter result in facts and circumstances
that are significantly different than the assumptions used to develop these reserves, the accrual for environmental
remediation could be materially understated or overstated. Adjustments to these liabilities are made when

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

additional information becomes available that affects the estimated costs to study or remediate any environmental
issues or when expenditures for which reserves are established are made. Due to the uncertain nature of
environmental matters, there can be no assurance that we will not become involved in future litigation or other
proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would
not be material to us.

Revenue recognition - Revenue is recognized when persuasive evidence of an arrangement exists, delivery has
occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably
assured.

Railcars are generally manufactured, repaired or refurbished and wheels and parts produced under firm orders
from third parties. Revenue is recognized when these products or services are completed, accepted by an
unaffiliated customer and contractual contingencies removed. Certain leases are operated under car hire
arrangements whereby revenue is earned based on utilization, car hire rates and terms specified in the lease
agreement. Car hire revenue is reported from a third party source two months in arrears; however, such revenue
is accrued in the month earned based on estimates of use from historical activity and is adjusted to actual when
reported to us. These estimates are inherently uncertain as they involve judgment as to the estimated use of each
railcar. Adjustments to actual have historically not been significant. Revenue from the construction of marine
barges is either recognized on the percentage of completion method during the construction period or on the
completed contract method based on the terms of the contract. Under the percentage of completion method,
judgment is used to determine a definitive threshold against which progress towards completion can be measured
to determine timing of revenue recognition. Under the percentage of completion method, revenue is recognized
based on the progress toward contract completion measured by actual costs incurred to date in relation to the
estimate of total expected costs. Under the completed contract method, revenue is not recognized until the project
has been fully completed.

We will periodically sell railcars with attached leases to financial investors. Revenue and cost of revenue
associated with railcars that the Company has manufactured are recognized in Manufacturing once sold. Revenue
and cost of revenue associated with railcars which were obtained from a third party with the intent to resell them
which are subsequently sold are recognized in Leasing & Services. In addition we will often perform
management or maintenance services at market rates for these railcars. Pursuant to the guidance in Accounting
Standards Codification (ASC) 840-20-40, we evaluate the terms of any remarketing agreements and any
contractual provisions that represent retained risk and the level of retained risk based on those provisions. We
determine whether the level of retained risk exceeds 10% of the individual fair value of the railcars with leases
attached that are delivered. If retained risk exceeded 10%, the transaction would not be recognized as a sale until
such time as the retained risk declined to 10% or less. For any contracts with multiple elements (i.e. railcars,
maintenance, management services, etc.) we allocate revenue among the deliverables primarily based upon
objective and reliable evidence of the fair value of each element in the arrangement. If objective and reliable
evidence of fair value of any element is not available, we will use the element’s estimated selling price for
purposes of allocating the total arrangement consideration among the elements.

Impairment of long-lived assets - When changes in circumstances indicate the carrying amount of certain long-
lived assets may not be recoverable, the assets are evaluated for impairment. If the forecast of undiscounted
future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying
value of the assets to fair value would be recognized in the current period. These estimates are based on the best
information available at the time of the impairment and could be materially different if circumstances change. If
the forecast of undiscounted future cash flows exceeds the carrying amount of the assets it would indicate that the
assets were not impaired.

Goodwill and acquired intangible assets - We periodically acquire businesses in purchase transactions in which
the allocation of the purchase price may result in the recognition of goodwill and other intangible assets. The
determination of the value of such intangible assets requires management to make estimates and assumptions.
These estimates affect the amount of future period amortization and possible impairment charges.

Goodwill and indefinite-lived intangible assets are tested for impairment annually during the third quarter.
Goodwill and indefinite-lived intangible assets are also tested more frequently if changes in circumstances or the

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

occurrence of events indicates that a potential impairment exists. When changes in circumstances, such as a
decline in the market price of our common stock, changes in demand or in the numerous variables associated
with the judgments, assumptions and estimates made in assessing the appropriate valuation of goodwill indicate
the carrying amount of certain indefinite lived assets may not be recoverable, the assets are evaluated for
impairment. Among other things, our assumptions used in the valuation of goodwill include growth of revenue
and margins, market multiples, discount rates and increased cash flows over time. If actual operating results were
to differ from these assumptions, it may result in an impairment of our goodwill.

The provisions of ASC 350, Intangibles - Goodwill and Other, require that we perform an annual impairment test
on goodwill. We compare the fair value of each reporting unit with its carrying value. We determine the fair
value of our reporting units based on a weighting of income and market approaches. Under the income approach,
we calculate the fair value of a reporting unit based on the present value of estimated future cash flows. Under
the market approach, we estimate the fair value based on observed market multiples for comparable businesses.
An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting
unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit.
Our goodwill balance was $78.2 million as of August 31, 2018 of which $51.1 million related to our Wheels,
Repair & Parts segment and $27.1 million related to our Manufacturing segment. We performed our annual
goodwill impairment test during the third quarter of 2018 and we concluded that goodwill was not impaired.

New Accounting Pronouncements

See Note 2 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on
Form 10-K.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

RISK

Foreign Currency Exchange Risk

We have global operations that conduct business in their local currencies as well as other currencies. To mitigate
the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter
into foreign currency forward exchange contracts to protect revenue or margin on a portion of forecast foreign
currency sales and expenses. At August 31, 2018 exchange rates, forward exchange contracts for the purchase of
Polish Zlotys and the sale of Euros; the purchase of Mexican Pesos and the sale of U.S. Dollars; and for the
purchase of US Dollars and the sale of Saudi Riyals and Euros aggregated to $145.4 million. Because of the
variety of currencies in which purchases and sales are transacted and the interaction between currency rates, it is
not possible to predict the impact a movement in a single foreign currency exchange rate would have on future
operating results.

In addition to exposure to transaction gains or losses, we are also exposed to foreign currency exchange risk
related to the net asset position of our foreign subsidiaries. At August 31, 2018, net assets of foreign subsidiaries
aggregated $187.7 million and a 10% strengthening of the U.S. Dollar relative to the foreign currencies would
result in a decrease in equity of $18.8 million, or 1.4% of Total equity – Greenbrier. This calculation assumes
that each exchange rate would change in the same direction relative to the U.S. Dollar.

Interest Rate Risk

We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting
$85.1 million of variable rate debt to fixed rate debt. As a result, we are exposed to interest rate risk relating to
our revolving debt and a portion of term debt, which are at variable rates. At August 31, 2018, 74% of our
outstanding debt had fixed rates and 26% had variable rates. At August 31, 2018, a uniform 10% increase in
variable interest rates would result in approximately $0.4 million of additional annual interest expense.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
The Greenbrier Companies, Inc. and subsidiaries:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of The Greenbrier Companies, Inc. and
subsidiaries (the Company) as of August 31, 2018 and 2017, the related consolidated statements of income,
comprehensive income, equity, and cash flows for each of the years in the three year period ended August 31,
2018, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of August 31,
2018 and 2017, and the results of its operations and its cash flows for each of the years in the three year period
ended August 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2018, based
on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO), and our report dated October 26, 2018
expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the
risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.

We have served as the Company’s auditor since 2011.

/s/ KPMG LLP

Portland, Oregon
October 26, 2018

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Balance Sheets
AS OF AUGUST 31,

(In thousands)

Assets

Cash and cash equivalents
Restricted cash
Accounts receivable, net
Inventories
Leased railcars for syndication
Equipment on operating leases, net
Property, plant and equipment, net
Investment in unconsolidated affiliates
Intangibles and other assets, net
Goodwill

Liabilities and Equity
Revolving notes
Accounts payable and accrued liabilities
Deferred income taxes
Deferred revenue
Notes payable, net

Commitments and contingencies (Notes 21 & 22)

Contingently redeemable noncontrolling interest

Equity:
Greenbrier

2018

2017

$ 530,655
8,819
348,406
432,314
130,926
322,855
457,196
61,414
94,668
78,211

$ 611,466
8,892
279,964
400,127
91,272
315,941
428,021
108,255
85,177
68,590

$2,465,464

$2,397,705

27,725
449,857
31,740
105,954
436,205

4,324
415,061
75,791
129,260
558,228

29,768

36,148

Preferred stock – without par value; 25,000 shares authorized; none outstanding
Common stock – without par value; 50,000 shares authorized; 32,191 and 28,503

–

outstanding at August 31, 2018 and 2017

Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss

Total equity – Greenbrier
Noncontrolling interest

Total equity

–
442,569
830,898
(23,366)

–
315,306
709,103
(6,279)

1,250,101
134,114

1,018,130
160,763

1,384,215

1,178,893

$2,465,464

$2,397,705

The accompanying notes are an integral part of these financial statements.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Consolidated Statements of Income
YEARS ENDED AUGUST 31,

(In thousands, except per share amounts)
Revenue

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Cost of revenue

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Margin
Selling and administrative
Net gain on disposition of equipment

Earnings from operations

Other costs

Interest and foreign exchange

Earnings before income tax and earnings (loss) from unconsolidated

affiliates

Income tax expense

Earnings before earnings (loss) from unconsolidated affiliates
Earnings (loss) from unconsolidated affiliates

Net earnings
Net earnings attributable to noncontrolling interest

Net earnings attributable to Greenbrier

Basic earnings per common share

Diluted earnings per common share

Weighted average common shares:
Basic
Diluted
Dividends declared per common share

2018

2017

2016

$2,044,586
347,023
127,855

$1,725,188
312,679
131,297

$2,096,331
322,395
260,798

2,519,464

2,169,164

2,679,524

1,727,407
318,330
64,672

2,110,409
409,055
200,439
(44,369)

1,373,967
288,336
85,562

1,747,865
421,299
170,607
(9,740)

1,630,554
293,751
203,782

2,128,087
551,437
158,681
(15,796)

252,985

260,432

408,552

29,368

24,192

13,502

223,617
(32,893)

190,724
(18,661)

172,063
(20,282)

236,240
(64,014)

172,226
(11,764)

160,462
(44,395)

395,050
(112,322)

282,728
2,096

284,824
(101,611)

$ 151,781

$ 116,067

$ 183,213

4.92

4.68

30,857
32,835
0.96

3.97

3.65

29,225
32,562
0.86

6.28

5.73

29,156
32,468
0.81

The accompanying notes are an integral part of these financial statements.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Consolidated Statements of Comprehensive Income
YEARS ENDED AUGUST 31,

(In thousands)

Net earnings
Other comprehensive income
Translation adjustment
Reclassification of derivative financial instruments recognized in net

earnings 1

Unrealized gain (loss) on derivative financial instruments 2
Other (net of tax effect)

Comprehensive income
Comprehensive income attributable to noncontrolling interest

Comprehensive income attributable to Greenbrier

2018

2017

2016

$172,063

$160,462

$ 284,824

(16,159)

15,488

(2,204)

(415)
(197)
(335)

3,729
1,944
(665)

(17,106)

20,496

2,544
(5,842)
(84)

(5,586)

154,957
(20,263)

180,958
(44,417)

279,238
(101,573)

$134,694

$136,541

$ 177,665

1 Net of tax of effect of $3 thousand, $1.0 million and $1.2 million for the years ended August 31, 2018, 2017 and 2016, respectively.
2 Net of tax of effect of $0.1 million, $0.8 million and $2.1 million for the years ended August 31, 2018, 2017 and 2016, respectively.

The accompanying notes are an integral part of these financial statements.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Consolidated Statements of Equity

Attributable to Greenbrier

Additional
Paid-in
Capital

Retained
Earnings
$295,444 $458,599
183,213
–

–
–

Accumulated
Other
Comprehensive
Loss
$(21,205)
–
(5,548)

Total
Attributable
to Greenbrier
$ 732,838
183,213
(5,548)

Attributable to
Noncontrolling
Interest
$130,651
101,611
(38)

Total
Equity
$ 863,489
284,824
(5,586)

Contingently
Redeemable
Noncontrolling
Interest
–
$
–
–

28,205

$282,886 $618,178

$(26,753)

$ 874,311

$142,516

$1,016,827

116,067
–

–
20,474

116,067
20,474

46,535
22

162,602
20,496

(2,140)
–

–
–

–
–
–

–
–

526
(1,195)

(94,439)
5,400

6,055
(11,555)
22,502

2,813
(23,634)
(32,373)

–
–
–

526
(1,195)

(94,439)
5,400

6,055
(11,555)
22,502

2,813
(23,634)
(32,373)

–
–

–
–
–

–

–
–

–

–
–
–

–
–

–

–
–

–

5,520
(10,734)
19,826

(2,339)
(25,142)

20,818

(671)

(677)

(28,027)
394

–

–
–

–

–
–
–

–
–

–

38,288

5,520
(10,734)
19,826

(2,339)
(25,142)

20,818

(671)

–
–
–

–
–

–

Common
Stock
Shares
28,907
–
–

–
–

353
–
–

6,055
(11,555)
22,502

–
–
(1,055)

2,813
–
(32,373)

–
(23,634)
–

–
–

–

–
–

–

–
–

–

–
–

–

298
–
–

5,520
(10,734)
19,826

–
–

–

(2,339)
–

–
(25,142)

20,818

(671)

–

–
–

–
–
–

–

–
–

–

–
–
–

(In thousands)
Balance September 1, 2015
Net earnings
Other comprehensive loss, net
Noncontrolling interest

adjustments

Purchase of noncontrolling interest
Joint venture partner distribution

declared

Investment by joint venture partner
Restricted stock awards (net of

cancellations)

Unamortized restricted stock
Restricted stock amortization
Excess tax benefit from restricted

stock awards

Dividends
Repurchase of stock

Balance August 31, 2016
Net earnings (excluding

contingently redeemable
noncontrolling interest)

Other comprehensive income, net
Noncontrolling interest

adjustments

Joint venture partner distribution

declared

Acquisition of minority interest
Contingently redeemable
noncontrolling interest

Restricted stock awards (net of

cancellations)

Unamortized restricted stock
Restricted stock amortization
Tax deficiency from restricted

stock awards

Dividends
2024 Convertible Senior Notes –
equity component, net of tax
2024 Convertible Senior Notes

issuance costs – equity
component, net of tax

Balance August 31, 2017
Net earnings
Other comprehensive income, net
Noncontrolling interest

adjustments

Joint venture partner distribution

declared

Investment by joint venture partner
Noncontrolling interest acquired
Restricted stock awards (net of

cancellations)

Unamortized restricted stock
Restricted stock amortization
Dividends
Conversion of 2018 Convertible
Senior Notes

28,503
–
–

$315,306 $709,103
151,781
–

–
–

$ (6,279)
–
(17,087)

$1,018,130
151,781
(17,087)

$160,763
26,662
(19)

$1,178,893
178,443
(17,106)

$36,148
(6,380)
–

–

–
–
–

336
–
–
–

–

–
–
–

–

–
–
–

7,334
(15,058)
16,100
–

–
–
–
(29,986)

3,352

118,887

–

–
–
–

–
–
–
–

–

–
–
–

7,334
(15,058)
16,100
(29,986)

118,887

2,864

(62,649)
6,500
(7)

–
–
–
–

–

(62,649)
6,500
(7)

7,334
(15,058)
16,100
(29,986)

118,887

–

–
–
–

–
–
–
–

–

Balance August 31, 2018

32,191

$442,569 $830,898

$(23,366)

$1,250,101

$134,114

$1,384,215

$29,768

The accompanying notes are an integral part of these financial statements.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Consolidated Statements of Cash Flows
YEARS ENDED AUGUST 31,

(In thousands)

Cash flows from operating activities:

Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:
Deferred income taxes
Depreciation and amortization
Net gain on disposition of equipment
Stock based compensation expense
Accretion of debt discount
Noncontrolling interest adjustments
Other
Decrease (increase) in assets:
Accounts receivable, net
Inventories
Leased railcars for syndication
Other

Increase (decrease) in liabilities:

Accounts payable and accrued liabilities
Deferred revenue

Net cash provided by operating activities

Cash flows from investing activities:
Acquisitions, net of cash acquired
Proceeds from sales of assets
Capital expenditures
Decrease (increase) in restricted cash
Investment in and advances to unconsolidated affiliates
Cash distribution from joint ventures

Net cash used in investing activities

Cash flows from financing activities:

Net changes in revolving notes with maturities of 90 days or less
Repayments of revolving notes with maturities longer than 90 days
Proceeds from issuance of notes payable
Repayments of notes payable
Debt issuance costs
Repurchase of stock
Dividends
Cash distribution to joint venture partner
Investment by joint venture partner
Tax payments for net share settlement of restricted stock
Excess tax benefit from restricted stock awards
Other

Net cash provided by (used in) financing activities

Effect of exchange rate changes

Increase (decrease) in cash and cash equivalents
Cash and cash equivalents
Beginning of period

End of period

Cash paid during the period for:
Interest
Income taxes, net
Non-cash activity

Conversion of 2018 Senior Convertible Notes
Transfer from Leased railcars for syndication and Inventories to Equipment on operating leases,

net

Capital expenditures accrued in Accounts payable and accrued liabilities
Change in Accounts payable and accrued liabilities associated with cash distributions to joint

venture partner

Change in Accounts payable and accrued liabilities associated with dividends declared
Change in Accounts payable and accrued liabilities associated with repurchase of stock
Transfer of Property, plant and equipment, net to (from) Intangibles and other assets, net

2018

2017

2016

$ 172,063

$ 160,462

$ 284,824

(40,496)
74,356
(44,369)
29,314
4,171
2,864
1,688

(83,551)
(26,592)
(54,023)
34,115

4,377
65,129
(9,740)
26,427
2,340
(677)
(845)

(25,272)
(2,787)
41,015
17,558

(8,935)
63,345
(15,796)
24,037
–
526
560

(32,051)
53,711
19,154
(16,989)

54,032
(20,231)

(25,422)
33,039

(85,928)
50,712

103,341

285,604

337,170

(34,874)
153,224
(176,848)
73
(26,455)
4,661

(27,127)
24,149
(86,065)
15,387
(40,632)
550

–
103,715
(139,013)
(15,410)
(12,855)
7,855

(80,219)

(113,738)

(55,708)

23,401
–
13,771
(22,269)
–
–
(29,914)
(73,033)
6,500
(7,723)
–
–

4,324
–
276,093
(8,297)
(9,082)
–
(24,890)
(28,511)
–
(5,215)
–
–

(49,000)
(1,888)
–
(22,299)
(4,161)
(33,498)
(23,303)
(95,092)
5,400
(5,500)
2,813
(887)

(89,267)

204,422

(227,415)

(14,666)
(80,811)

12,499
388,787

(4,298)
49,749

611,466

222,679

172,930

$ 530,655

$ 611,466

$ 222,679

$ 18,878
$ 66,423

$ 13,962
$ 45,280

$ 12,277
$ 125,455

$ 118,887

–

$ 20,945
$ 13,534

8,668
$
$ 16,145

$ 73,165
8,408
$

$
$
$
$

14
$
(72) $
$
–
$
–

484
$
(252) $
–
$
(63) $

652
(331)
1,125
588

The accompanying notes are an integral part of these financial statements.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Notes to Consolidated Financial Statements

Note 1 - Nature of Operations

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing &
the Company operated in four reportable segments: Manufacturing;
Services. Prior to August 20, 2018,
Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 the Company entered into an
agreement with its joint venture partner to discontinue the GBW railcar repair joint venture which resulted in 12
repair shops returned to the Company. Beginning on August 20, 2018, GBW Joint Venture was no longer
considered a reportable segment.

The segments are operationally integrated. The Manufacturing segment, which currently operates from facilities
in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars,
tank cars,
conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment
performs wheel and axle servicing; railcar repair, refurbishment and maintenance; as well as production of a
variety of parts for the railroad industry in North America. The Leasing & Services segment owns approximately
8,100 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication
and 200 held as finished goods inventory) and provides management services for approximately 357,000 railcars
for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North
America as of August 31, 2018. Through unconsolidated affiliates the Company produces rail and industrial
castings, tank heads and other components and has an ownership stake in a railcar manufacturer in Brazil and a
lease financing warehouse.

Note 2 - Summary of Significant Accounting Policies

Principles of consolidation - The financial statements include the accounts of the Company and its subsidiaries in
which it has a controlling interest. All intercompany transactions and balances are eliminated upon consolidation.

Unclassified balance sheet - The balance sheets of the Company are presented in an unclassified format as a
result of significant leasing activities for which the current or non-current distinction is not relevant. In addition,
the activities of the Manufacturing; Wheels, Repair & Parts; and Leasing & Services segments are so intertwined
that in the opinion of management, any attempt to separate the respective balance sheet categories would not be
meaningful and may lead to the development of misleading conclusions by the reader.

Foreign currency translation - Certain operations outside the U.S., primarily in Europe, prepare financial
statements in currencies other than the U.S. Dollar. Revenues and expenses are translated at monthly average
exchange rates during the year, while assets and liabilities are translated at year-end exchange rates. Translation
adjustments are accumulated as a separate component of equity in other comprehensive income (loss). The net
foreign currency translation adjustment balances were $21.5 million, $5.4 million and $20.8 million as of
August 31, 2018, 2017 and 2016, respectively.

Cash and cash equivalents - Cash may temporarily be invested primarily in money market funds. All highly-
liquid investments with a maturity of three months or less at the date of acquisition are considered cash
equivalents.

Restricted cash - Restricted cash primarily relates to amounts associated with funds temporarily held in
connection with a performance guarantee as part of a 2016 transaction, amounts held to support a target
minimum rate of return on certain agreements and a pass through account for activity related to management
services provided for certain third party customers.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Accounts receivable - Accounts receivable includes receivables from related parties (see Note 17 – Related Party
Transactions) and is stated net of allowance for doubtful accounts of $2.7 million and $1.8 million as of
August 31, 2018 and 2017, respectively.

(In thousands)
Allowance for doubtful accounts
Balance at beginning of period
Additions, net of reversals
Usage
Currency translation effect

Balance at end of period

As of August 31,
2017

2016

2018

$1,768
938
(54)
49

$2,215
370
(891)
74

$2,449
70
(277)
(27)

$2,701

$1,768

$2,215

the lower of cost or market using the first-in first-out method.
Inventories - Inventories are valued at
Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and
railcars not on lease or in transit.

Leased railcars for syndication - Leased railcars for syndication consist of newly-built railcars manufactured at
one of the Company’s facilities or railcars purchased from third parties, which have been placed on lease to a
customer and which the Company intends to sell to an investor with the lease attached. These railcars are
generally anticipated to be sold within six months of delivery of the last railcar in a group or six months from
when the Company acquires the railcar from a third party and are typically not depreciated during that period as
the Company does not believe any economic value of a railcar is lost in the first six months. In the event the
railcars are not sold in the first six months, the railcars are either held in Leased railcars for syndication and are
depreciated or are transferred to Equipment on operating leases and are depreciated. As of August 31, 2018,
Leased railcars for syndication was $130.9 million compared to $91.3 million as of August 31, 2017.

Equipment on operating leases, net - Equipment on operating leases is stated net of accumulated depreciation.
Depreciation to estimated salvage value is provided on the straight-line method over the estimated useful lives of
up to thirty-five years. Management periodically reviews salvage value estimates based on current scrap prices
and what the Company expects to receive upon disposal.

Investment in unconsolidated affiliates - Investment in unconsolidated affiliates includes the Company’s interests
which are accounted for under the equity method of accounting. See Note 7 - Investments in Unconsolidated
Affiliates for additional information.

Property, plant and equipment - Property, plant and equipment is stated at cost, net of accumulated depreciation.
Depreciation is provided on the straight-line method over estimated useful lives which are as follows:

Buildings and improvements
Machinery and equipment
Other

Depreciable Life

10 – 25 years
3 – 15 years
3 – 7 years

Goodwill - Goodwill is recorded when the purchase price of an acquisition exceeds the fair market value of the
net assets acquired. Goodwill is not amortized and is tested for impairment at least annually and more frequently
if material changes in events or circumstances arise. The provisions of ASC 350, Intangibles – Goodwill and
Other, require the Company to perform an annual impairment test on goodwill. The Company compares the fair
value of each reporting unit with its carrying value. An impairment loss is recorded to the extent that the
reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the
total amount of goodwill allocated to the reporting unit.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Intangible and other assets, net - Intangible assets are recorded when a portion of the purchase price of an
acquisition is allocated to assets such as customer contracts and relationships and trade names. Intangible assets
with finite lives are amortized using the straight line method over their estimated useful lives and primarily
include long-term customer agreements which are amortized over 5 to 20 years. Other assets include revolving
note fees and debt acquisition costs which are capitalized and amortized as interest expense over the life of the
related borrowings.

Impairment of long-lived assets - When changes in circumstances indicate the carrying amount of certain long-
lived assets may not be recoverable, the assets are evaluated for impairment. If the forecasted undiscounted
future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying
value of the assets to estimated realizable value is recognized in the current period. No impairment was recorded
in the years ended August 31, 2018, 2017 and 2016.

Maintenance obligations - The Company is responsible for maintenance on a portion of the managed and owned
lease fleet under the terms of maintenance obligations defined in the underlying lease or management agreement.
The estimated liability is based on maintenance histories for each type and age of railcar. The liability, included
in Accounts payable and accrued liabilities, is reviewed periodically and updated based on maintenance trends
and known future repair or refurbishment requirements.

Warranty accruals - Warranty costs are estimated and charged to operations to cover a defined warranty period.
The estimated warranty cost is based on history of warranty claims for each particular product type. For new
product types without a warranty history, preliminary estimates are based on historical information for similar
product types. The warranty accruals, included in Accounts payable and accrued liabilities, are reviewed
periodically and updated based on warranty trends.

Income taxes - The liability method is used to account for income taxes. Deferred income taxes are provided for
the temporary effects of differences between assets and liabilities recognized for financial statement and income
tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than
not be realized. We recognize liabilities for uncertain tax positions based on whether evidence indicates that it is
more likely than not that the position will be sustained on audit. It is inherently difficult and subjective to
estimate such amounts, as this requires us to estimate the probability of various possible outcomes. The Company
reevaluates these uncertain tax positions on a quarterly basis. Changes in assumptions may result in the
recognition of a tax benefit or an additional charge to the tax provision.

Deferred revenue - Cash payments received prior to meeting revenue recognition criteria are recorded in
Deferred revenue. Amounts are reclassified out of Deferred revenue once the revenue recognition criteria have
been met. Deferred revenue primarily consists of customer prepayments and the unrecognized portion of the
$40 million upfront fee from MUL. The Company also has a 40% interest in the common equity of an entity that
buys and sells railcar assets that are leased to third parties. Deferred revenue includes 40% of the revenue and
margin of railcars sold to this entity until the railcars are ultimately sold to a third party. The Deferred revenue
balance was $106.0 million and $129.3 million as of August 31, 2018 and 2017, respectively.

Noncontrolling interest and Contingently redeemable noncontrolling interest - The Company has a joint venture
with Grupo Industrial Monclova, S.A. (GIMSA) that manufactures new railroad freight cars for the North
American marketplace at GIMSA’s existing manufacturing facility located in Frontera, Mexico. Each party owns
a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting
purposes as the Company maintains a controlling interest as evidenced by the right to appoint the majority of the
Board of Directors, control over accounting, financing, marketing and engineering and approval and design of
products. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in
Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Greenbrier-Astra Rail was formed in 2017 between the Company’s existing European operations headquartered
in Swidnica, Poland and Astra Rail, based in Arad, Romania. Greenbrier-Astra Rail is controlled by the
Company with an approximate 75% interest. The Company consolidates Greenbrier-Astra Rail for financial
reporting purposes and includes the noncontrolling interest in the mezzanine section of the Consolidated Balance
Sheet in Contingently redeemable noncontrolling interest (see Note 3 – Acquisitions).

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake
in Rayvag, a railcar manufacturing company based in Adana, Turkey. Rayvag is controlled by the Company. The
Company consolidates Rayvag for financial reporting purposes. The noncontrolling interest related to the
partner’s interest is included in Noncontrolling interest in the equity section of the Company’s Consolidated
Balance Sheet.

The Company has a joint venture with Summit Railroad Products, Inc. to provide axle services. Each party owns
a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting
purposes as the Company has the power to direct the activities which most significantly impact the economic
performance of the entity. The noncontrolling interest related to the partner’s 50% interest in the joint venture is
included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Net earnings attributable to noncontrolling interest on the Company’s Consolidated Statement of Income
represents the Company’s partners’ share of results from operations.

Accumulated other comprehensive loss - Accumulated other comprehensive loss, net of tax as appropriate,
consisted of the following:

(In thousands)

Balance, August 31, 2017
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other

comprehensive loss

Balance, August 31, 2018

Unrealized
Gain (Loss)
on Derivative
Financial
Instruments

Foreign
Currency
Translation
Adjustment

Accumulated
Other
Comprehensive
Loss

Other

$ 181
(197)

(415)

$(431)

$ (5,366)
(16,140)

$(1,094)
(335)

$ (6,279)
(16,672)

–

(415)

$(21,506)

$(1,429)

$(23,366)

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of
Income, with the financial statement caption, were as follows:

(In thousands)

(Gain) loss on derivative financial instruments:

Foreign exchange contracts
Interest rate swap contracts

Year Ended August 31,

2018

2017

Financial Statement
Caption

$(716)
298

(418)
3

$3,644
1,057

Revenue and Cost of revenue
Interest and foreign exchange

4,701
(972)

Total before tax
Tax benefit

$(415)

$3,729

Net of tax

Railcars are generally manufactured, repaired or refurbished under firm orders from third parties. Revenue is
recognized when new, used, refurbished or repaired railcars are completed, accepted by an unaffiliated customer
and contractual contingencies removed. Marine revenue is either recognized on the percentage of completion
method during the construction period or on the completed contract method based on the terms of the contract.
Under the percentage of completion method, revenue is recognized based on the progress toward contract
completion measured by actual costs incurred to date in relation to the estimate of total expected costs. Under the
completed contract method, revenue is not recognized until the project has been fully completed. Cash payments
received prior to meeting revenue recognition criteria are accounted for in Deferred revenue. Operating lease
revenue is recognized as earned under the lease terms. Certain leases are operated under car hire arrangements
whereby revenue is earned based on utilization, car hire rates and terms specified in the lease agreement.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

The Company sells railcars with attached leases to financial investors. Revenue and cost of revenue associated
with railcars that the Company has manufactured are recognized in Manufacturing once sold. Revenue and cost
of revenue associated with railcars which were obtained from a third party with the intent to resell them and
subsequently sold are recognized in Leasing & Services. In addition the Company will often perform
management or maintenance services at market rates for these railcars. The Company evaluates the terms of any
remarketing agreements and any contractual provisions that represent retained risk and the level of retained risk
based on those provisions. The Company applies a 10% threshold to determine whether the level of retained risk
exceeds 10% of the individual fair value of the rail cars delivered. If retained risk exceeded 10%, the transaction
would not be recognized as a sale until such time as the retained risk declined to 10% or less. For any contracts
with multiple elements (i.e. railcars, maintenance, management services, etc.) the Company allocates revenue
among the deliverables primarily based upon objective and reliable evidence of the fair value of each element in
the arrangement. If objective and reliable evidence of fair value of any element is not available, the Company
will use its estimated selling price for purposes of allocating the total arrangement consideration among the
elements.

Interest and foreign exchange - Interest and foreign exchange includes foreign exchange transaction gains and
losses, amortization of loan fee expense, accretion of debt discounts and external interest expense.

(In thousands)

Interest and foreign exchange:
Interest and other expense
Foreign exchange (gain) loss

Years ended August 31,

2018

2017

2016

$30,946
(1,578)

$23,519
673

$17,268
(3,766)

$29,368

$24,192

$13,502

Research and development - Research and development costs are expensed as incurred. Research and
development costs incurred for new product development during the years ended August 31, 2018, 2017 and
2016 were $6.0 million, $4.2 million and $2.7 million, respectively, included in Selling and administrative
expenses.

Forward exchange contracts - Foreign operations give rise to risks from changes in foreign currency exchange
rates. Forward exchange contracts with established financial institutions are used to hedge a portion of such risk.
Realized and unrealized gains and losses on effective hedges are deferred in other comprehensive income (loss)
and recognized in earnings concurrent with the hedged transaction or when the occurrence of the hedged
transaction is no longer considered probable. Ineffectiveness is measured and any gain or loss is recognized in
foreign exchange gain or loss. Even though forward exchange contracts are entered into to mitigate the impact of
currency fluctuations, certain exposure remains, which may affect operating results. In addition, there is risk for
counterparty non-performance.

Interest rate instruments - Interest rate swap agreements are used to reduce the impact of changes in interest rates
on certain debt. The net cash amounts paid or received under the agreements are recognized as an adjustment to
interest expense.

Net earnings per share - Basic earnings per common share (EPS) excludes the potential dilution that would occur
if additional shares were issued upon conversion of bonds. Restricted share grants are treated as outstanding
when issued and restricted stock units are not treated as outstanding when issued. Restricted share grants and
restricted stock units that are considered participating securities, including some grants subject to certain
performance criteria, are included in weighted average basic common shares outstanding when calculating EPS
when the Company is in a net earnings position.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

approach supplements the first by including the “if converted” effect of the 2018 Convertible notes during the
periods in which they were outstanding. 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. The 2024 Convertible notes are included in the calculation of both
approaches using the treasury stock method when the average stock price is greater than the applicable
conversion price.

Stock-based compensation - The value of stock based compensation awards is amortized as compensation
expense from the date of grant through the earlier of the vesting period or the recipient’s eligible retirement date.
Awards are expensed upon grant when the recipient’s eligible retirement date precedes the grant date. Stock
based compensation expense consists of restricted stock units, restricted stock and phantom stock units awards.
Stock based compensation expense for the years ended August 31, 2018, 2017 and 2016 was $29.3 million,
$26.4 million and $24.0 million, respectively and was recorded in Selling and administrative on the Consolidated
Statements of Income.

Restricted stock units and restricted stock are accounted for as equity based awards (see Note 15 – Equity).
Phantom stock units are accounted for as liability based awards.

The Company began granting phantom stock units during the year ended August 31, 2016. Every phantom stock
unit entitles the participant to receive a cash payment equal to the value of a single share of the Company’s
common stock upon vesting. The holders of unvested phantom stock units are entitled to participate in dividend
equivalents.

There were no phantom stock units awarded during the year ended August 31, 2018. During the years ended
August 31, 2017 and 2016, the Company awarded 151,634 and 268,161 phantom stock units, respectively, which
include performance-based grants. As of August 31, 2018, there were a total of 200,686 phantom stock units
associated with unvested performance-based grants. The actual number of phantom stock units that will vest
associated with performance-based phantom stock units will vary depending on the Company’s performance.
Approximately 200,686 additional phantom stock units may be granted if performance-based phantom stock
units vest at stretch levels of performance. These additional units are associated with phantom stock unit awards
granted during the years ended August 31, 2016 and 2017. The grant date fair value of phantom stock awards
was $6.7 million and $7.9 million for the years ended August 31, 2017 and 2016, respectively.

Our phantom stock unit grants are considered liability based awards and therefore are re-measured at the end of
each reporting period. Compensation expense is recognized through the earlier of the vesting period or the
recipient’s eligible retirement date. Time-based awards to employees are expensed upon grant when the
recipient’s eligible retirement date precedes the grant date or during the vesting period if the grantee becomes
retirement eligible before the vesting period is complete. Compensation expense related to phantom stock unit
grants is recorded in Selling and administrative expense and Cost of revenue on the Company’s Consolidated
Statements of Income. Compensation expense recognized related to phantom stock units for the years ended
August 31, 2018, August 31, 2017 and 2016 was $12.1 million, $6.2 million and $1.5 million, respectively.
Unamortized compensation cost related to phantom stock unit grants was $5.9 million, $10.9 million and
$7.5 million as of August 31, 2018, 2017 and 2016, respectively.

Management estimates - The preparation of financial statements in conformity with accounting principles
generally accepted in the U.S. requires judgment on the part of management
to arrive at estimates and
assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities,
revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent
assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and
may be adjusted in future periods. Actual results could differ from those estimates.

Initial Adoption of Accounting Policies - In the first quarter of 2018, the Company adopted Accounting Standards
Update 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). This changes
how companies account for certain aspects of share-based payments to employees. Excess tax benefits or
deficiencies related to vested awards which were previously recognized in stockholders’ equity are now

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

recognized in the income statement when awards vest. For the year ended August 31, 2018, the impact of
adopting this new guidance was immaterial. Prior to adopting the updated standard, excess tax benefits were
reported as financing activities and are now reported as operating activities in the statement of cash flows. In
addition, cash paid by an employer when directly withholding shares for tax withholding purposes were reported
as operating activities and are now classified as financing activities.

Prospective Accounting Changes - In May 2014, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), providing a
common revenue recognition model under U.S. GAAP. Under ASU 2014-09, an entity recognizes revenue in a
way that depicts the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for the goods or services. It also requires
additional disclosures to sufficiently describe the nature, amount, timing, and uncertainty of revenue and cash
flows arising from contracts with customers. The FASB issued a one year deferral and the new standard is
effective for fiscal years and interim periods within those years beginning after December 15, 2017. The
Company plans to adopt this new standard beginning September 1, 2018 using the modified retrospective
method. The Company has substantially completed our evaluation of the requirements of the new standard and is
implementing slight modifications to our affected processes and controls in the first quarter of fiscal 2019. The
majority of our revenue recognition timing will remain unchanged, while we expect certain minor changes
related to maintenance and repair services. Costs incurred while fulfilling maintenance contracts will now be
recognized as incurred while the related revenue will continue to be recognized over time. Additionally, our
repair service revenue, while previously recognized upon completion of a repair order, will now be recognized as
costs are incurred. As a result of these changes, the Company expects to record an increase to retained earnings
liabilities of
of approximately $5.4 million and a reclassification from accrued maintenance to contract
$2.4 million as of September 1, 2018.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (ASU 2016-02). The new
guidance supersedes existing guidance on accounting for leases in Topic 840 and is intended to increase the
transparency and comparability of accounting for lease transactions. ASU 2016-02 requires most leases to be
recognized on the balance sheet. Lessees will need to recognize a right-of-use asset and a lease liability for
virtually all leases. The liability will be equal to the present value of lease payments. The asset will be based on
the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB
retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains
similar to the current model, but updated to align with certain changes to the lessee model and the new revenue
recognition standard. The ASU will require both quantitative and qualitative disclosures regarding key
information about leasing arrangements. The standard is effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be
adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will
include a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The
Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the
impact of this standard on its consolidated financial statements and disclosures.

In December 2016, the FASB issued Accounting Standards Update 2016-18, Restricted Cash (ASU 2016-18).
This update requires additional disclosure and that the Statement of Cash Flow explain the change during the
period in the total cash, cash equivalents and amounts generally described as restricted cash. Therefore, amounts
generally described as restricted cash should be included with cash & cash equivalents when reconciling the
beginning-of-period and end-of-period total amounts shown on the Statement of Cash Flows. The new guidance
is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017
with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2018.

In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging: Targeted
Improvements to Accounting for Hedging Activities (ASU 2017-12). This update improves the financial reporting
of hedging relationships to better portray the economic results of an entity’s risk management activities in its
financial statements and make certain targeted improvements to simplify the application of the hedge accounting
guidance. The guidance expands the ability to hedge non-financial and financial risk components, reduces
complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. The new guidance is
effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company
plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of
this standard on its consolidated financial statements and disclosures.

Note 3 - Acquisitions

GBW

On August 20, 2018, the Company entered into a dissolution agreement with Watco Companies, LLC, its
previous joint venture partner, to discontinue their GBW Railcar Services railcar repair joint venture. Pursuant to
the dissolution agreement, previously operated Greenbrier repair shops and associated employees were returned
to the Company. Additionally, the dissolution agreement provides that certain agreements entered into in
connection with the original creation of GBW in 2014 will be terminated as of the transaction date, including the
leases of real and personal property, service agreements, and certain employment-related agreements. GBW is
expected to exist as a formal legal entity at least through December 31, 2018 to complete its cessation of
activities in an orderly manner.

Beginning on August 20, 2018, the repair shops and their activity are being reported in the Company’s
consolidated financial statements as part of the Wheels, Repair & Parts segment.

As the assets received and liabilities assumed from GBW meet the definition of a business, the Company has
accounted for this transaction as a business combination. The total net assets acquired were approximately
$56.8 million. Additionally, the Company removed the book value of its remaining equity method investment in,
and note receivable due from, the joint venture. The accumulated deficit reflected in GBW’s balance sheet as of
August 31, 2018 will be funded by its parents. The Company has included this assumed liability within the
purchase price allocation in the table below. The impact of the acquisition was not material to the Company’s
results of operations, therefore pro forma financial information has not been included. See Note 17 – Related
Party Transactions for additional information.

The preliminary allocation of the purchase price based on the fair value of the net assets acquired was as follows
as of August 31, 2018:

(in thousands)

Cash and cash equivalents
Accounts receivable, net
Inventories
Property, plant and equipment, net
Intangibles and other assets, net
Goodwill

Total assets acquired
Accounts payable and accrued liabilities

Total liabilities assumed
Net assets acquired

$ 5,000
12,230
18,106
16,748
9,200
7,863

69,147
12,394

12,394
$56,753

As of August 31, 2018, certain liabilities in the table above are estimates and the Company will adjust the
purchase price allocation as they are settled.

Greenbrier Astra Rail

On June 1, 2017, Greenbrier and Astra Holding GmbH (Astra) contributed its European operations to a newly
formed company, Greenbrier-Astra Rail (GAR), a Europe-based freight railcar manufacturing, engineering and
repair business. As consideration for an approximate 75% controlling interest, Greenbrier agreed to pay Astra
€30 million at closing, an additional €30 million which was paid on June 1, 2018 and issue an approximate 25%
noncontrolling interest
in the new company. The total net assets acquired of $115.8 million includes
$38.3 million representing the fair value of the noncontrolling interest at the acquisition date.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Astra also received a put option to sell its entire noncontrolling interest to Greenbrier at an exercise price equal to
the higher of fair value or a defined EBITDA multiple as measured on the exercise date. The option is
exercisable 30 days prior to and up until June 1, 2022. Due to Astra’s redemption right under the put option, the
noncontrolling interest has been classified as a Contingently redeemable noncontrolling interest in the mezzanine
section of the Consolidated Balance Sheets. The carrying value of the noncontrolling interest cannot be less than
the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised.
Adjustments to reconcile the carrying value to the maximum redemption amount are recorded to retained
earnings. There were no such adjustments during the year ended August 31, 2018.

For the year ended August 31, 2018, the European operations contributed by Astra generated revenues of
$136.8 million and a loss from operations of $11.5 million, which are reported in the Company’s consolidated
financial statements as part of the Manufacturing segment. The impact of the acquisition was not material to the
Company’s consolidated results of operations for the twelve-month period ended August 31, 2017, therefore pro
forma financial information has not been included.

The purchase price of the net assets acquired from Astra was allocated as follows:

(in thousands)

Cash and cash equivalents
Accounts receivable, net
Inventories
Property, plant and equipment, net
Intangibles and other assets, net
Goodwill

Total assets acquired
Accounts payable and accrued liabilities
Deferred income taxes
Deferred revenue
Notes payable, net

Total liabilities assumed
Net assets acquired

6,562
10,984
30,454
75,296
17,300
25,746

166,342
17,879
7,292
964
24,382

50,517
$115,825

On August 2, 2018, GAR entered in to an agreement with Rayvag Vagon Sanavi ve Ticaret A.S. (Rayvag) to take
an approximately 68% ownership stake in Rayvag. Rayvag is a railcar manufacturer and provider of railcar repair
and parts services based in Adana, Turkey. The amount paid to acquire the 68% ownership stake in Rayvag and
the impact of the acquisition were not material to the Company’s consolidated balance sheet and results of
operations, therefore pro forma financial information has not been included.

Note 4 - Inventories

(In thousands)

Manufacturing supplies and raw materials
Work-in-process
Finished goods
Excess and obsolete adjustment

As of August 31,

2018

$278,726
105,021
54,181
(5,614)

2017

$222,080
86,794
95,389
(4,136)

$432,314

$400,127

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

(In thousands)
Excess and obsolete adjustment
Balance at beginning of period
Charge to cost of revenue
Disposition of inventory
Currency translation effect

Balance at end of period

As of August 31,
2017

2016

2018

$ 4,136
4,023
(2,455)
(90)

$ 3,257
2,781
(2,003)
101

$ 2,679
2,422
(1,792)
(52)

$ 5,614

$ 4,136

$ 3,257

Note 5 - Equipment on Operating Leases, net

Equipment on operating leases is reported net of accumulated depreciation of $64.9 million and $91.1 million as
of August 31, 2018 and 2017, respectively. Depreciation expense was $11.2 million, $12.1 million and
$16.6 million as of August 31, 2018, 2017 and 2016, respectively. In addition, certain railcar equipment leased-in
by the Company on operating leases (see Note 21 – Lease Commitments) is subleased to customers under
non-cancelable operating leases. Aggregate minimum future amounts receivable under all non-cancelable
operating leases and subleases are as follows:

(In thousands)
Year ending August 31,
2019
2020
2021
2022
2023
Thereafter

$26,246
19,898
13,311
11,311
8,562
14,733

$94,061

Certain equipment is also operated under daily, monthly or car hire utilization arrangements. Associated revenue
amounted to $12.8 million, $13.0 million and $14.7 million for the years ended August 31, 2018, 2017 and 2016,
respectively.

Note 6 - Property, Plant and Equipment, net

(In thousands)
Land and improvements
Machinery and equipment
Buildings and improvements
Construction in progress
Other

Accumulated depreciation

As of August 31,
2017
2018
$ 84,594
$ 84,432
378,311
414,865
186,960
202,973
39,417
48,406
60,747
68,452

819,128
(361,932)

750,029
(322,008)

$ 457,196

$ 428,021

Depreciation expense was $54.5 million, $45.5 million and $39.2 million for the years ended August 31, 2018,
2017 and 2016, respectively.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Note 7 - Investments In Unconsolidated Affiliates

GBW

The Company has a 50% ownership interest in GBW which performed railcar repair, refurbishment and
maintenance until August 20, 2018, on which date the Company entered in to a dissolution agreement (See
Note 3 – Acquisitions). The Company accounts for its interest in GBW under the equity method of accounting.

The assets and liabilities shown below as of August 31, 2018 primarily represent one remaining repair shop and
other corporate related obligations while the summarized income statement for the year ended August 31, 2018 is
for GBW’s full year of activity.

Summarized financial data for GBW is as follows:

(In thousands)

Current assets
Total assets
Current liabilities
Total liabilities

(In thousands)

As of August 31,

2018

$ 8,531
$ 8,531
$23,283
$23,283

2017

$ 81,860
$206,009
$ 33,033
$111,384

Years ended August 31,
2017

2016

2018

Revenue
Margin
Net income (loss) (1)
(1)

$238,033
$373,490
$253,436
$ (6,047) $ (4,058) $ 33,929
4,006
$ (51,679) $ (36,947) $
In 2018 and 2017, GBW recorded a pre-tax goodwill impairment loss of $26.4 million and $11.2 million, respectively, which reduced the
goodwill balance to $15.1 million at the time of the dissolution.

Greenbrier-Maxion

In May 2017, the Company completed a $20 million investment in Greenbrier-Maxion, a railcar manufacturer in
Brazil resulting in an increase in the Company’s ownership interest from 19.5% to 60%. Greenbrier-Maxion also
assembles bogies and offers a range of aftermarket services including railcar overhaul and refurbishment. The
Company does not consolidate Greenbrier-Maxion for financial reporting purposes and accounts for its interest
under the equity method of accounting as the entity’s governance provisions require that all significant decisions
of Greenbrier-Maxion are subject to shared consent of its shareholders.

Summarized financial data for Greenbrier-Maxion is as follows:

(In thousands)

Current assets
Total assets
Current liabilities
Total liabilities

(In thousands)

Revenue
Margin
Net income (loss)

As of August 31,

2018

$41,619
$61,034
$38,027
$41,539

2017

$48,012
$71,455
$38,055
$42,197

Years ended August 31,
2017

2016

2018

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

$187,664
$ 10,086
$ (3,006) $

$228,510
$ 24,372
1,378

$168,465
$ 14,245
$ (4,051)

Amsted-Maxion Cruzeiro

In May 2017, the Company increased its ownership interest in Amsted-Maxion Cruzeiro, a manufacturer of
castings and components for railcars and other heavy equipment, from 19.5% to 24.5% for $3.25 million.
Proceeds from the Company’s increased ownership, along with loans from each of the partners, were used to
retire third-party debt at Amsted-Maxion Cruzeiro. The Company retains an option to increase its ownership to
29.5% subject to certain conditions. Amsted-Maxion Cruzeiro has a 40% ownership position in Greenbrier-
Maxion. The Company accounts for its interest in Amsted-Maxion Cruzeiro under the equity method of
accounting.

Summarized financial data for Amsted-Maxion Cruzeiro is as follows:

(In thousands)

Current assets
Total assets
Current liabilities
Total liabilities

(In thousands)

Revenue
Margin
Net income (loss)

Other Unconsolidated Affiliates

As of August 31,

2018

$ 21,463
$111,589
$ 27,981
$ 83,407

2017

$ 23,777
$142,583
$ 28,084
$ 94,846

Years ended August 31,
2017

2016

2018

$ 87,833
$ 90,114
$96,490
$ 8,001
$ 8,256
$ 5,983
$ (9,590) $(20,114) $(12,640)

The Company has eight other unconsolidated affiliates which are accounted for under the equity method of
accounting. For the year ended August 31, 2018, the Company recognized earnings of $1.8 million from these
other unconsolidated affiliates.

Summarized financial information, shown as 100% of these other unconsolidated affiliates in aggregate are as
follows:

(In thousands)

Current assets
Total assets
Current liabilities
Total liabilities

(In thousands)

Revenue
Margin
Net income (loss)

As of August 31,

2018

$ 32,168
$239,535
$
3,647
$ 52,852

2017

$ 16,996
$283,895
$
3,003
$ 90,064

Years ended August 31,
2017

2016

2018

$25,549
$11,360
$ 6,988

$39,161
$ 8,015
$ 5,202

$75,851
$11,087
$ 6,051

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Note 8 - Goodwill

Changes in the carrying value of goodwill are as follows:

(In thousands)

Balance August 31, 2017
Additions (1)
Translation

Balance August 31, 2018

Manufacturing

Wheels,
Repair & Parts

Leasing
& Services

$25,325
839
919

$27,083

$43,265
7,863
–

$51,128

–
–
–

–

Total

$68,590
8,702
919

$78,211

(1) Additions to goodwill relate to the GBW repair shop transaction and Manufacturing includes final adjustments to the Astra purchase price

allocation. See Note 3 – Acquisitions.

(In thousands)

Gross goodwill balance before accumulated goodwill impairment losses and other reductions
Accumulated goodwill impairment losses
Accumulated other reductions

Balance August 31, 2018

Goodwill

$ 230,736
(128,209)
(24,316)

$ 78,211

The Company performs a goodwill impairment test annually during the third quarter. Goodwill is also tested
more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment
exists. The provisions of ASC 350, Intangibles – Goodwill and Other, require the performance of an impairment
test on goodwill. The Company compares the fair value of each reporting unit with its carrying value. The
Company determines the fair value of the reporting unit based on a weighting of income and market approaches.
Under the income approach, the Company calculates the fair value of a reporting unit based on the present value
of estimated future cash flows. Under the market approach, the Company estimates the fair value based on
observed market multiples for comparable businesses. An impairment loss is recorded to the extent that the
reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the
total amount of goodwill allocated to the reporting unit. Goodwill was tested during the third quarter of 2018 and
the Company concluded that goodwill was not impaired.

Note 9 - Intangibles and Other Assets, net

Intangible assets that are determined to have finite lives are amortized over their useful lives. Intangible assets
with indefinite useful lives are not amortized and are periodically evaluated for impairment.

The following table summarizes the Company’s identifiable intangible and other assets balance:

(In thousands)
Intangible assets subject to amortization:
Customer relationships

Accumulated amortization

Other intangibles

Accumulated amortization

Intangible assets not subject to amortization
Prepaid and other assets
Nonqualified savings plan investments
Debt issuance costs, net
Assets held for sale

As of August 31,
2017
2018

$ 72,521
(43,576)
16,300
(6,400)

$ 64,521
(40,153)
20,207
(4,866)

38,845

5,115
18,935
26,299
1,824
3,650

39,709

912
16,914
20,974
2,623
4,045

$ 94,668

$ 85,177

Amortization expense for the years ended August 31, 2018, 2017 and 2016 was $5.3 million, $4.8 million and
$6.3 million, respectively. Amortization expense for the years ending August 31, 2019, 2020, 2021, 2022 and
2023 is expected to be $5.2 million, $5.2 million, $4.8 million, $3.4 million and $3.2 million, respectively.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Note 10 - Revolving Notes

Senior secured credit facilities, consisting of three components, aggregated to $635.3 million as of August 31,
2018.

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by
substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available
to provide working capital and interim financing of equipment, principally for the U.S. and Mexican
operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on
the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of
inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated
capitalization and fixed charges coverage ratios. After August 31, 2018 this revolving line of credit agreement
was amended (see Note 25 – Subsequent Events).

As of August 31, 2018, lines of credit totaling $35.3 million secured by certain of the Company’s European
assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus
1.3% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of the
European manufacturing operation. European credit facilities are continually being renewed. Currently, these
European credit facilities have maturities that range from December 2018 through June 2019.

As of August 31, 2018, the Company’s Mexican railcar manufacturing joint venture had two lines of credit
totaling $50.0 million. The first line of credit provides up to $30.0 million and is fully guaranteed by the
Company and its joint venture partner. Advances under this facility bear interest at LIBOR plus 2.0%. The
Mexican railcar manufacturing joint venture will be able to draw against this facility through January 2019. The
second line of credit provides up to $20.0 million, of which the Company and its joint venture partner have each
guaranteed 50%. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar
manufacturing joint venture will be able to draw amounts available under this facility through July 2019.

As of August 31, 2018, outstanding commitments under the senior secured credit facilities consisted of
$72.2 million in letters of credit under the North American credit facility and $27.7 million outstanding under the
European credit facilities.

As of August 31, 2017, outstanding commitments under the senior secured credit facilities consisted of
$77.6 million in letters of credit under the North American credit facility and $4.3 million outstanding under the
European credit facilities.

Note 11 - Accounts Payable and Accrued Liabilities

(In thousands)

Trade payables
Other accrued liabilities
Accrued payroll and related liabilities
Accrued warranty
Accrued maintenance
Income taxes payable
Other

As of August 31,
2017
2018

$226,405
73,273
105,111
27,395
9,090
4,771
3,812

$180,592
107,002
84,749
20,737
17,667
–
4,314

$449,857

$415,061

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Note 12 - Maintenance and Warranty Accruals

(In thousands)
Accrued maintenance

Balance at beginning of period
Charged to cost of revenue
Payments

Balance at end of period

Accrued warranty

Balance at beginning of period
Charged to cost of revenue
Acquisition
Payments
Currency translation effect

Balance at end of period

Note 13 - Notes Payable, net

(In thousands)
Convertible senior notes, due 2018
Convertible senior notes, due 2024
Term loans
Other notes payable

Debt discount and issuance costs

As of August 31,
2017

2016

2018

$17,667
(389)
(8,188)

$ 18,646
10,609
(11,588)

$ 18,642
12,926
(12,922)

$ 9,090

$ 17,667

$ 18,646

$20,737
12,323
–
(5,217)
(448)

$ 12,159
6,872
3,526
(2,649)
829

$ 11,512
6,069
–
(5,299)
(123)

$27,395

$ 20,737

$ 12,159

As of August 31,
2017
2018
$119,063
275,000
184,001
19,540

–
275,000
179,923
14,798

$469,721
(33,516)

$597,604
(39,376)

$436,205

$558,228

The Company’s 3.5% convertible senior notes due 2018 with a conversion price of $35.47 matured on April 1,
2018 with a balance of $119.1 million prior to conversion. The conversion of these notes resulted in the issuance
of an additional 3.4 million shares of the Company’s common stock.

Convertible senior notes, due 2024, bear interest at a fixed rate of 2.875%, paid semi-annually in arrears on
February 1st and August 1st. The convertible notes mature on February 1, 2024, unless earlier repurchased by the
Company or converted in accordance with their terms. Upon the satisfaction of certain conditions, holders may
convert at their option prior to the business day immediately preceding the stated maturity date. The convertible
notes are senior unsecured obligations and rank equally with other senior unsecured debt. The convertible notes
are convertible into shares of the Company’s common stock, at an initial conversion rate of 16.6234 shares per
$1,000 principal amount of the notes (which is equal to an initial conversion price of $60.16 per share). The
initial conversion rate and conversion price are subject to adjustment upon the occurrence of certain events, such
as distributions, dividends or stock splits. There were $33.1 million of initial debt discount and $8.0 million of
original debt issuance costs included in Notes Payable, net on the Company’s Consolidated Balance Sheet. The
debt discount represents the difference between the debt principal and the value of a similar debt instrument that
does not have a conversion feature at issuance. The debt discount is being amortized using the effective interest
rate method through February 2024 and the amortization expense is included in Interest and Foreign exchange on
the Company’s Consolidated Statement of Income. In accordance with ASC 470-20, the Company separately
accounts for the liability component (debt principal net of debt discount) and equity component. The liability
component is recognized as the fair value of a similar instrument that does not have a conversion feature at
issuance. To determine the fair value of the liability component, the Company assumed an interest rate of
approximately 5% which resulted in a fair value of $241.9 million. The equity component, which is the
conversion feature at issuance, is recognized as the difference between the proceeds from the issuance of the
notes ($275 million) and the fair value of the liability component ($241.9 million). As of August 31, 2018 and
2017, the equity component was $33.1 million which was recorded on the Company’s Consolidated Balance
Sheet in Additional paid-in capital, net of tax of $12.3 million.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Term loans are primarily composed of:
•

$200 million of senior term debt, with a maturity date of March 2020, which is secured by a pool of leased
railcars. The debt bears a floating interest rate of LIBOR plus 1.75% with principal of $1.75 million paid
quarterly in arrears and a balloon payment of $159.8 million due at maturity. An interest rate swap agreement
was entered into on 50% of the initial balance to swap the floating interest rate of LIBOR plus 1.75% to a
fixed rate of 3.74%. The principal balance as of August 31, 2018 was $170.3 million. After August 31, 2018
this senior term debt agreement was amended (see Note 25 – Subsequent Events).

• Other term loans with an aggregate balance of $9.7 million as of August 31, 2018 and maturity dates ranging

from April 2020 to September 2022.

• Other notes payable includes $14.8 million of unsecured debt with a maturity date of June 2019.

The notes payable, along with the revolving and operating lines of credit, contain certain covenants with respect
to the Company and various subsidiaries, the most restrictive of which, among other things, limit the ability to:
incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into capital leases; create
liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries,
including but not
into mergers,
consolidations or sales of substantially all the Company’s assets; and enter into new lines of business. The
covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed
charges (interest and rent) coverage.

limited to loans, advances, equity investments and guarantees; enter

As of August 31, 2018 principal payments on the notes payable are expected as follows:

(In thousands)

Year ending August 31,
2019
2020
2021
2022
2023
Thereafter (1)

$ 26,775
167,086
413
413
34
275,000

$469,721

(1) The repayment of the $275.0 million of Convertible senior notes due 2024 is assumed to occur at the scheduled maturity in 2024 instead

of assuming an earlier conversion by the holders.

Note 14 - Derivative Instruments

Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency
forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk.
Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The
Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as
cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in accumulated
other comprehensive income or loss.

At August 31, 2018 exchange rates, forward exchange contracts for the purchase of Polish Zlotys and the sale of
Euros; the purchase of Mexican Pesos and the sale of U.S. Dollars; and for the purchase of U.S. Dollars and the sale
of Saudi Riyals and Euros aggregated to $145.4 million. The fair value of the contracts is included on the
Consolidated Balance Sheets as Accounts payable and accrued liabilities when there is a loss, or as Accounts
receivable, net when there is a gain. As the contracts mature at various dates through December 2019, any such gain
or loss remaining will be recognized in manufacturing revenue or cost of revenue along with the related
transactions. In the event that the underlying transaction does not occur or does not occur in the period designated at
the inception of the hedge, the amount classified in accumulated other comprehensive loss would be reclassified to
the results of operations in Interest and foreign exchange at the time of occurrence. At August 31, 2018 exchange
rates, approximately $1.3 million would be reclassified to revenue or cost of revenue in the next year.

At August 31, 2018, an interest rate swap agreement maturing in March 2020 had a notional amount of
$85.1 million. The fair value of the contract is included on the Consolidated Balance Sheets in Accounts payable
and accrued liabilities when there is a loss, or in Accounts receivable, net when there is a gain. As interest

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified
from Accumulated other comprehensive loss and charged or credited to interest expense. At August 31, 2018
interest rates, approximately $0.1 million would be reclassified to interest expense in the next year.

Fair Values of Derivative Instruments

Asset Derivatives

Liability Derivatives

(In thousands)

Balance sheet
caption

Derivatives designated as hedging instruments
Foreign forward

exchange contracts

Interest rate swap

contracts

Accounts receivable,
net
Intangibles and other
assets, net

August 31,

2018

Fair
Value

2017

Fair
Value

$ 700

$2,341

781

–

$1,481

$2,341

Balance sheet
caption

Accounts payable and
accrued liabilities
Accounts payable and
accrued liabilities

August 31,

2018

Fair
Value

2017

Fair
Value

$1,211

$1,761

1,125

$1,212

$2,886

Derivatives not designated as hedging instruments
Accounts receivable,
Foreign forward
net

exchange contracts

$1,473

Accounts payable and
accrued liabilities

$ 354

–

The Effect of Derivative Instruments on the Consolidated Statements of Income

Derivatives in
cash flow
hedging
relationships

Financial statement caption of gain recognized in
income on derivative

Foreign forward exchange contract
Interest rate swap contracts

Interest and foreign exchange
Interest and foreign exchange

Gain (loss)
recognized in OCI on
derivatives (effective
portion)
Years
ended August 31,

2018

2017

Financial
statement
caption of
gain (loss)
reclassified
from
accumulated
OCI into
income

Gain (loss)
reclassified from
accumulated OCI into
income (effective
portion)
Years
ended August 31,

2018

2017

Financial
statement
caption of gain
(loss) in income
on derivative
(ineffective
portion and
amount
excluded from
effectiveness
testing)

Derivatives in
cash flow hedging
relationships

Foreign forward
exchange
contracts
Foreign forward
exchange
contracts

$ (658) $1,746 Revenue

$1,145

$(3,980) Revenue

$ 854

$(2,843)

Interest rate swap

contracts

1,632

(1,093)

385 Cost of revenue
Interest and
foreign
exchange

1,042

(429)

(298)

336 Cost of revenue
Interest and
foreign
exchange

(1,057)

$ (119) $3,173

$ 418

$(4,701)

306

248

–

$1,160

$(2,595)

Gain recognized in
income on derivatives
Years ended
August 31,

2018

2017

$1,052
(1)

$3,207
23

$1,051

$3,230

Gain (loss)
recognized on
derivative
(ineffective
portion and
amount
excluded from
effectiveness
testing)
Years
ended
August 31,

2018

2017

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Note 15 - Equity

Stock Incentive Plan

The 2014 Amended and Restated Stock Incentive Plan was amended and restated as the 2017 Amended and
Restated Stock Incentive Plan on October 24, 2017 and approved by stockholders on January 5, 2018. The
stockholders also approved an increase in the total number of shares reserved for issuance by 1,100,000 shares.
As a result, the maximum aggregate number of the Company’s common shares authorized for issuance is
5,425,000. The 2017 Amended and Restated Stock Incentive Plan provides for the grant of incentive stock
options, non-statutory stock options, restricted shares, restricted stock units and stock appreciation rights.

On August 31, 2018 there were 1,050,675 shares available for grant compared to 233,271 and 476,770 shares
available for grant as of the years ended August 31, 2017 and 2016, respectively. There are no stock options or
stock appreciation rights outstanding as of August 31, 2018. The Company currently grants restricted shares and
restricted stock units. Restricted share grants are considered outstanding shares of common stock at the time they
are issued. The holders of unvested restricted shares are entitled to voting rights and participation in dividends.
Shares associated with restricted stock unit awards are not considered legally outstanding shares of common
stock until vested. Restricted stock unit awards, including performance-based awards, are entitled to participate
in dividends and these awards are considered participating securities and are considered outstanding for earnings
per share purposes when the effect is dilutive.

During the years ended August 31, 2018, 2017 and 2016, the Company awarded restricted share and restricted
stock unit grants totaling 317,036, 269,705 and 447,895 shares, respectively, which include performance-based
grants. As of August 31, 2018, there were a total of 467,710 shares associated with unvested performance-based
grants. The actual number of shares that will vest associated with performance-based grants will vary depending
on the Company’s performance. Approximately 467,710 additional shares may be granted if performance-based
restricted stock unit awards vest at stretch levels of performance. These additional shares are associated with
restricted stock unit awards granted during the years ended August 31, 2018, 2017 and 2016. The fair value of
awards granted was $15.2 million, $11.3 million and $12.5 million for the years ended August 31, 2018, 2017
and 2016, respectively.

The value, at the date of grant, of stock awarded under restricted share grants and restricted stock unit grants is
amortized as compensation expense over the lesser of the vesting period of one to three years or to the recipients
eligible retirement date. Compensation expense recognized related to restricted share grants and restricted stock
unit grants for the years ended August 31, 2018, 2017 and 2016 was $17.2 million, $20.2 million and
$22.5 million, respectively, and was recorded in Selling and administrative and Cost of Revenue on the
Consolidated Statements of Income. Unamortized compensation cost related to restricted stock grants was
$15.5 million as of August 31, 2018.

Total unvested restricted share and restricted stock unit grants were 788,744 and 837,654 as of August 31, 2018
and 2017. The following table summarizes restricted share and restricted stock unit grant transactions for shares,
both vested and unvested, under the 2017 Amended and Restated Stock Incentive Plan:

Balance at August 31, 2015 (1)
Granted
Forfeited

Balance at August 31, 2016 (1)
Granted
Forfeited

Balance at August 31, 2017 (1)
Granted
Forfeited

Balance at August 31, 2018 (1)

(1) Balance represents cumulative grants net of forfeitures.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Shares
3,419,861
447,895
(19,526)

3,848,230
269,705
(26,206)

4,091,729
317,036
(34,440)

4,374,325

Share Repurchase Program

The Board of Directors has authorized the Company to repurchase in aggregate up to $225 million of the
Company’s common stock. The program may be modified, suspended or discontinued at any time without prior
notice. Under the share repurchase program, shares of common stock may be purchased on the open market or
through privately negotiated transactions from time-to-time. The timing and amount of purchases will be based
upon market conditions, securities law limitations and other factors. The share repurchase program does not
obligate the Company to acquire any specific number of shares in any period.

There were no shares repurchased during the years ended August 31, 2018 and 2017. As of August 31, 2018 the
Company had cumulatively repurchased 3,206,226 shares for approximately $137.0 million and had
$88.0 million available under the share repurchase program. In October 2017, the expiration date of this share
repurchase program was extended from January 1, 2018 to March 31, 2019.

Stock Issuance

The Company’s convertible senior notes due 2018 matured on April 1, 2018. The conversion of these notes
resulted in the issuance of an additional 3.4 million shares of the Company’s common stock. See Note 13 – Notes
Payable, net.

Note 16 - Earnings Per Share

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

(In thousands)

Weighted average basic common shares outstanding (1)
Dilutive effect of 2018 Convertible notes (2)
Dilutive effect of 2024 Convertible notes (3)
Dilutive effect of 2026 Convertible notes (4)
Dilutive effect of restricted stock units (5)

Weighted average diluted common shares outstanding

Years ended August 31,
2016
2017
2018

30,857
1,821
–
n/a
157

29,225
3,295
–
n/a
42

29,156
3,214
n/a
–
98

32,835

32,562

32,468

(1) Restricted stock grants and restricted stock units that are considered participating securities, 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.
No restricted stock and restricted stock units were anti-dilutive for the years ended August 31, 2018, 2017 and 2016.

(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. The 2018 Convertible notes matured on April 1, 2018.

(3) The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the year
ended August 31, 2018 and 2017 as the average stock price was less than the applicable conversion price and therefore was considered
anti-dilutive.

(4) The 2026 Convertible notes were retired in August 2016. The effect of the 2026 Convertible notes was excluded for the year ended
August 31, 2016 as the average stock price was less than the applicable conversion price and therefore the notes were considered anti-
dilutive.

(5) Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which
actual 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.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Diluted EPS is 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, 2026
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 second approach supplements the first by including the “if converted” effect of the 2018
Convertible notes during the periods in which they were outstanding. 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. The 2024 Convertible notes and
2026 Convertible notes are included in the calculation of both approaches using the treasury stock method when
the average stock price is greater than the applicable conversion price.

Years ended August 31,
2017

2016

2018

Net earnings attributable to Greenbrier
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax

$151,781

$116,067

$183,213

2,031

2,932

2,695

Earnings before interest and debt issuance costs on convertible notes

$153,812

$118,999

$185,908

Weighted average diluted common shares outstanding
Diluted earnings per share (1)

(1) Diluted earnings per share was calculated as follows:

Earnings before interest and debt issuance costs on convertible notes
Weighted average diluted common shares outstanding

Note 17 - Related Party Transactions

32,835
4.68

32,562
3.65

32,468
5.73

In June 2017, the Company purchased a 40% interest in the common equity of an entity that buys and sells railcar
assets that are leased to third parties. The railcars sold to this lease financing warehouse are principally built by
Greenbrier. The Company accounts for this lease financing warehouse investment under the equity method of
accounting. As of August 31, 2018, the carrying amount of the investment was $6.1 million which is classified in
Investment in unconsolidated affiliates in the Consolidated Balance Sheet. Upon sale of railcars to this entity
from Greenbrier, 60% of the related revenue and margin is recognized and 40% is deferred until the railcars are
ultimately sold by the entity. During the year ended August 31, 2018, the Company recognized $16 million in
revenue associated with railcars sold into the lease financing warehouse and an additional $48 million associated
with railcars sold out of the lease financing warehouse. The Company also provides administrative and
remarketing services to this entity and earns management fees for these services which were immaterial for the
year ended August 31, 2018.

The Company has a 60.0% ownership interest in Greenbrier-Maxion, a railcar manufacturer in Brazil, and a
24.5% ownership interest in Amsted-Maxion Cruzeiro, a manufacturer of various castings and components for
railcars and other heavy industrial equipment in Brazil. The Company accounts for these investments under the
equity method of accounting. As of August 31, 2018, the Company had a $7.2 million note receivable from
Greenbrier-Maxion and a $10.0 million note receivable from Amsted-Maxion Cruzeiro. These note receivables
are included on the Consolidated Balance Sheet in Accounts receivable, net.

In July 2014, the Company and Watco Companies LLC completed the formation of GBW, an unconsolidated
50/50 joint venture. The Company accounted for its interest in GBW under the equity method of accounting. On
August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar
repair joint venture. The Company leased real and personal property to GBW with lease revenue totaling
approximately $5 million for the years ended August 31, 2018, 2017 and 2016. The Company sold wheel sets
and components to GBW which totaled $16.5 million, $18.3 million and $28.5 million for the years ended
August 31, 2018, 2017 and 2016, respectively. GBW provided services to the Company which totaled
$0.4 million, $1.0 million and $1.3 million for the years ended August 31, 2018, 2017 and 2016, respectively.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Mr. Furman is the owner of a private aircraft managed by a private independent management company. From
time to time, the Company’s business requires charter use of privately-owned aircraft. In such instances, it is
possible that charters may be placed on Mr. Furman’s aircraft. The Company placed charters on Mr. Furman’s
aircraft aggregating $0.5 million, $0.5 million and $0.8 million for each of the years ended August 31, 2018,
2017 and 2016, respectively.

Note 18 - Income Taxes

Components of income tax expense were as follows:

(In thousands)

Current

Federal
State
Foreign

Deferred
Federal

State
Foreign

Change in valuation allowance

Income tax expense

Years ended August 31,
2017

2016

2018

$ 28,357
3,244
38,628

$22,710
305
35,893

$ 66,455
4,595
50,299

70,229

58,908

121,349

(33,459)
(344)
(3,690)

9,418
(1,467)
(2,732)

(37,493)

5,219

157

(113)

(6,199)
(1,174)
(1,644)

(9,017)

(10)

$ 32,893

$64,014

$112,322

Income tax expense is computed at rates different from statutory rates. The U.S. federal corporate statutory rate
was significantly reduced from 35% to 21% effective January 1, 2018 by the Tax Act enacted on December 22,
2017. As a result of the Company’s fiscal year, the Company’s statutory federal corporate rate is a blended rate
of 25.7% in 2018, which will be reduced to 21% in 2019 and thereafter.

Deferred income taxes were remeasured as a result of the new statutory rate resulting in a tax benefit of
$33.6 million. The Tax Act also required the Company to accrue a transition tax on foreign earnings not
previously subject to U.S. taxation, which resulted in $6.9 million of tax expense in 2018.

The Company recognized the income tax effects of the Tax Act in accordance with Staff Accounting Bulletin
No. 118 (SAB 118) which required the financial results to reflect effects for which the accounting is complete
and those for which it is provisional. Provisional effects will be adjusted during the measurement period
determined under SAB 118 based on ongoing analysis of data, tax positions and regulatory guidance. The effect
of the transition tax is provisional, in particular the calculation of prior year foreign earnings and profits. The
effect of the remeasurement of domestic deferred taxes is provisional primarily because temporary differences
that have been estimated as of August 31, 2018 could change the remeasurement once they are finalized with the
filing of our fiscal 2018 income tax return. Since many of the deferred tax balances include estimates of future
events, the Company is unable to determine the final impact of the tax rate change at this time.

The Tax Act also imposed a global intangible low-taxed income (GILTI) tax, which does not apply to the
Company until 2019. The Company has made an accounting policy election to treat the GILTI tax as a current
period expense.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

The reconciliation between effective and statutory tax rates on operations is as follows:

Years ended August 31,
2017

2016

2018

Federal statutory rate
State income taxes, net of federal benefit
Foreign operations, excluding transition tax
Transition tax on foreign earnings
Remeasurement of domestic deferred taxes
Change in valuation allowance
Noncontrolling interest in flow-through entity
Permanent differences and other

Effective tax rate

25.7%
0.8
1.8
3.1
(15.0)
0.1
(2.4)
0.6

14.7%

35.0%
0.1
(3.4)
–
–
–
(6.0)
1.4

27.1%

35.0%
0.7
0.1
–
–
–
(7.4)
–

28.4%

Earnings before income tax and earnings from unconsolidated affiliates for the years ended August 31, 2018,
2017 and 2016 were $110.8 million, $123.2 million and $264.8 million, respectively, for our domestic U.S.
operations and $112.8 million, $113.0 million and $130.3 million, respectively, for our foreign operations.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred
tax liabilities were as follows:

(In thousands)
Deferred tax assets:

Accrued payroll and related liabilities
Deferred revenue
Inventories and other
Maintenance and warranty accruals
Net operating losses
Investment and asset tax credits

Deferred tax liabilities:

Fixed assets
Original issue discount
Intangibles
Other
Investment in GBW Joint Venture

Valuation allowance

Net deferred tax liability

As of August 31,
2017
2018

$18,461
10,642
10,518
7,201
2,002
1,439

$ 28,761
7,547
13,641
10,988
320
1,840

50,263

63,097

70,942
6,099
2,474
1,831
–

81,346

657

110,429
11,086
3,605
(831)
14,066

138,355

533

$31,740

$ 75,791

As of August 31, 2018 the Company had $1.5 million of state credit carryforwards that will begin to expire in
2021 and $8.5 million of foreign NOL carryforwards that will begin to expire in 2020. The Company has placed
valuation allowances against any deferred tax assets for which no benefit is anticipated, including those for loss
and credit carryforwards not likely to be used before their expiration dates. The net increase in the total valuation
allowance on deferred taxes for which no benefit is anticipated was approximately $0.1 million for the year
ended August 31, 2018.

Prior to 2018 no provision had been made for U.S. income taxes on the Company’s cumulative undistributed
earnings from foreign subsidiaries. In 2018, however, these earnings were subject to the one-time transition tax
on the deemed repatriation of undistributed foreign earnings, a tax which the Company intends to pay over eight
years as permitted by the Tax Act. Notwithstanding this deemed repatriation, any actual repatriation would be

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

accompanied by foreign withholding taxes. The Company does not intend to repatriate these foreign earnings and
continues to assert that its foreign earnings are indefinitely reinvested.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

(In thousands)

Unrecognized Tax Benefit – Opening Balance
Gross increases – tax positions in prior period
Gross decreases – tax positions in prior period
Settlements
Lapse of statute of limitations

Unrecognized Tax Benefit – Ending Balance

Years ended August 31,
2016
2017
2018

$1,820
237
(449)
–
–

$ 942
1,368
(53)
–
(437)

$1,019
–
–
–
(77)

$1,608

$1,820

$ 942

The Company is subject to taxation in the U.S. and in various states and foreign jurisdictions. The Company is
effectively no longer subject to U.S. Federal examination for fiscal years ending before 2015, to state and local
examinations before 2014, or to foreign examinations before 2013.

Unrecognized tax benefits, excluding interest, at August 31, 2018 were $1.6 million, all of which would affect
the effective tax rate if recognized. The unrecognized tax benefits at August 31, 2017 were $1.8 million. Accrued
interest on unrecognized tax benefits was $0.2 million as of August 31, 2018 and was minimal as of August 31,
2017. The Company recorded annual interest benefits of approximately $0.2 million for changes in the reserves
during each of the years ended August 31, 2018 and 2017. The Company has not accrued any penalties on the
reserves. Interest and penalties related to income taxes are not classified as a component of income tax expense.
Benefits from the realization of unrecognized tax benefits for deductible differences attributable to ordinary
operations will be recognized as a reduction of income tax expense. The Company does not anticipate a
significant decrease in the reserves for uncertain tax positions during the next year.

Note 19 - Segment Information

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing &
Services. Prior to August 20, 2018,
the Company operated in four reportable segments: Manufacturing;
Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 the Company entered into an
agreement with its joint venture partner to discontinue the GBW railcar repair joint venture, which resulted in 12
repair shops returned to the Company. Beginning on August 20, 2018, the GBW Joint Venture was no longer
considered a reportable segment.

The accounting policies of the segments are the same as those described in the summary of significant
accounting policies. Performance is evaluated based on Earnings from operations. Corporate includes selling and
administrative costs not directly related to goods and services and certain costs that are intertwined among
segments due to our integrated business model. The Company does not allocate Interest and foreign exchange or
Income tax expense for either external or internal reporting purposes. Intersegment sales and transfers are valued
as if the sales or transfers were to third parties. Related revenue and margin are eliminated in consolidation and
therefore are not included in consolidated results in the Company’s Consolidated Financial Statements.

The information in the following table is derived directly from the segments’ internal financial reports used for
corporate management purposes. The results of operations for the GBW Joint Venture are not reflected in the
tables below as the investment is accounted for under the equity method of accounting.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

For the year ended August 31, 2018:

Manufacturing
Wheels, Repair & Parts
Leasing & Services
Eliminations
Corporate

External

$2,044,586
347,023
127,855
–
–

Revenue
Intersegment

$ 118,157
41,494
11,847
(171,498)
–

Total

Earnings (loss) from operations
Total
Intersegment

External

$2,162,743
388,517
139,702
(171,498)
–

$240,901
16,731
88,481
–
(93,128)

$ 17,721
2,748
10,296
(30,765)
–

$258,622
19,479
98,777
(30,765)
(93,128)

$2,519,464

–

$2,519,464

$252,985

–

$252,985

For the year ended August 31, 2017:

Manufacturing
Wheels, Repair & Parts
Leasing & Services
Eliminations
Corporate

External

$1,725,188
312,679
131,297
–
–

Revenue
Intersegment

Total

Earnings (loss) from operations
Total
Intersegment

External

$ 19,291
30,861
11,812
(61,964)
–

$1,744,479
343,540
143,109
(61,964)
–

$295,334
14,984
31,904
–
(81,790)

$ 1,022
2,303
11,099
(14,424)
–

$296,356
17,287
43,003
(14,424)
(81,790)

$2,169,164

–

$2,169,164

$260,432

–

$260,432

For the year ended August 31, 2016:

Manufacturing
Wheels, Repair & Parts
Leasing & Services
Eliminations
Corporate

(In thousands)

Assets:
Manufacturing
Wheels, Repair & Parts
Leasing & Services
Unallocated

Depreciation and amortization:
Manufacturing
Wheels, Repair & Parts
Leasing & Services

Capital expenditures:
Manufacturing
Wheels, Repair & Parts
Leasing & Services

External

$2,096,331
322,395
260,798
–
–

Revenue
Intersegment

$ 89,158
32,436
13,101
(134,695)
–

Total

Earnings (loss) from operations
Total
Intersegment

External

$2,185,489
354,831
273,899
(134,695)
–

$415,094
19,948
51,723
–
(78,213)

$ 24,299
2,602
13,101
(40,002)
–

$439,393
22,550
64,824
(40,002)
(78,213)

$2,679,524

–

$2,679,524

$408,552

–

$408,552

Years ended August 31,
2017

2016

2018

$1,020,757
306,756
578,818
559,133

$ 914,450
236,315
535,323
711,617

$ 701,296
275,599
516,147
342,732

$2,465,464

$2,397,705

$1,835,774

44,225
10,771
19,360

74,356

59,707
5,204
111,937

33,807
11,143
20,179

65,129

54,973
3,129
27,963

27,137
11,971
24,237

63,345

51,294
10,190
77,529

$ 176,848

86,065

$ 139,013

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

The following table summarizes selected geographic information.

(In thousands)

Revenue (1):
U.S.
Foreign

Assets:
U.S.
Mexico
Europe

Years ended August 31,
2017

2016

2018

$1,840,877
678,587

$1,674,517
494,647

$2,297,501
382,023

$2,519,464

$2,169,164

$2,679,524

$1,677,144
517,543
270,777

$1,307,239
791,974
298,492

$ 955,674
788,878
91,222

$2,465,464

$2,397,705

$1,835,774

(1) Revenue is presented on the basis of geographic location of customers.

Reconciliation of Earnings from operations to Earnings before income tax and earnings (loss)
unconsolidated affiliates:

from

(In thousands)
Earnings from operations
Interest and foreign exchange

Years ended August 31,
2017

2016

2018

$252,985
29,368

$260,432
24,192

$408,552
13,502

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

$223,617

$236,240

$395,050

The Company has a 50% ownership interest in the GBW Joint Venture and accounts for its interest under the
equity method of accounting. The Company’s 50% share of the results of operations are included in Earnings
(loss) from unconsolidated affiliates in the Consolidated Statement of Income and its investment is included in
Investments in unconsolidated affiliates in the Consolidated Balance Sheet. The GBW Joint Venture was
Greenbrier’s fourth reportable segment until August 20, 2018. Information for 2018, 2017 and 2016 is included
in the tables below which represent totals for GBW rather than Greenbrier’s 50% share, as this is how
performance and resource allocation was previously evaluated.

(In thousands)

GBW Joint Venture:
Revenue
Earnings (loss) from operations
Assets
Depreciation and amortization
Capital expenditures

Note 20 - Customer Concentration

Years ended August 31,
2017

2016

2018

$253,436

$238,033
$ (46,783) $ (32,454) $
$
$
$

$206,009
9,023
$
8,030
$

8,531
8,932
8,514

$373,490
8,558
$247,610
$
7,676
$ 16,110

Customer concentration is defined as a single customer that accounts for more than 10% of total revenues or
accounts receivable. In 2018, revenue from two customers represented 20% and 11% of total revenue. In 2017,
revenue from one customer represented 20% of total revenue. In 2016, revenue from two customers represented
17% and 14% of total revenue. No other customers accounted for more than 10% of total revenues for the years
ended August 31, 2018, 2017, or 2016. One customer had a balance that individually equaled or exceeded 10% of
accounts receivable and represented 19% of the consolidated accounts receivable balance at August 31, 2018.
Three customers had balances that individually equaled or exceeded 10% of accounts receivable and represented
13%, 13% and 10% of the consolidated accounts receivable balance at August 31, 2017.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Note 21 - Lease Commitments

Lease expense for railcar equipment leased-in under non-cancelable leases was $7.5 million, $7.6 million and
$6.6 million for the years ended August 31, 2018, 2017 and 2016. Aggregate minimum future amounts payable
under these non-cancelable railcar equipment leases are as follows:

(In thousands)

Year ending August 31,
2019
2020
2021
2022
2023
Thereafter

$ 6,287
4,839
1,821
1,792
1,792
1,810

$18,341

Operating leases for domestic railcar repair facilities, office space and certain manufacturing and office
equipment expire at various dates through February 2030. Rental expense for facilities, office space and
equipment was $8.7 million, $9.4 million and $9.3 million for the years ended August 31, 2018, 2017 and 2016.
Aggregate minimum future amounts payable under these non-cancelable operating leases are as follows:

(In thousands)

Year ending August 31,
2019
2020
2021
2022
2023
Thereafter

$ 6,048
4,437
3,286
1,915
1,862
196

$17,744

Note 22 - Commitments and Contingencies

Portland Harbor Superfund Site

The Company’s Portland, Oregon manufacturing facility is located adjacent
to the Willamette River. In
December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River
bed known as the Portland Harbor, including the portion fronting the Company’s manufacturing facility, as a
federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site).
The Company and more than 140 other parties have received a “General Notice” of potential liability from the
EPA relating to the Portland Harbor Site. The letter advised the Company that it may be liable for the costs of
investigation and remediation (which liability may be joint and several with other potentially responsible parties)
as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private
and public entities, including the Company (the Lower Willamette Group or LWG), signed an Administrative
Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor
Site under EPA oversight, and several additional entities have not signed such consent, but nevertheless
contributed money to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over
$110 million during a 17-year period. The Company bore a percentage of the total costs incurred by the LWG in
connection with the investigation. The Company’s aggregate expenditure during the 17-year period was not
material. Some or all of any such outlay may be recoverable from other responsible parties. The EPA issued its
Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017,
the AOC was terminated.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

federal government, entered into a non-judicial mediation process to try to allocate costs associated with
remediation of the Portland Harbor site. Approximately 110 additional parties signed tolling agreements related
to such allocations. On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other
parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products,
Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to
sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until
January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation
steps.

The EPA’s January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active
remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA
typically expects its cost estimates to be accurate within a range of -30% to +50%, but this ROD states that
changes in costs are likely to occur as a result of new data it wants to collect over a 2-year period prior to final
remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the
nearshore area of the river sediments offshore of the Company’s Portland, Oregon manufacturing facility as well
as upstream and downstream of the facility. It also includes a portion of the Company’s riverbank. The ROD
does not break down total remediation costs by Sediment Decision Unit. The EPA’s ROD concluded that more
data was needed to better define clean-up scope and cost. On December 8, 2017, the EPA announced that
Portland Harbor is one of 21 Superfund sites targeted for greater attention. On December 19, 2017, the EPA
announced that it had entered a new AOC with a group of four potentially responsible parties to conduct
additional sampling during 2018 and 2019 to provide more certainty about clean-up costs and aid the mediation
process to allocate those costs. The parties to the mediation, including the Company, have agreed to help fund the
additional sampling.

The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the
potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup remedy
will be determined at an unspecified later date. Based on the investigation to date, the Company believes that it
did not contribute in any material way to contamination in the river sediments or the damage of natural resources
in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to its property
precedes its ownership of
the Portland, Oregon manufacturing facility. Because these environmental
investigations are still underway, including the collection of new pre-remedial design sampling data by EPA,
sufficient information is currently not available to determine the Company’s liability, if any, for the cost of any
required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on
the results of the pending investigations and future assessments of natural resource damages, the Company may
be required to incur costs associated with additional phases of investigation or remedial action, and may be liable
for damages to natural resources. In addition, the Company may be required to perform periodic maintenance
dredging in order to continue to launch vessels from its launch ways in Portland, Oregon, on the Willamette
River, and the river’s classification as a Superfund site could result in some limitations on future dredging and
the Company’s business and Consolidated
launch activities. Any of these matters could adversely affect
Financial Statements, or the value of its Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including the
Company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural
resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes
and Bands of the Yakama Nation v. Air Liquide America Corp., et al., United States Court for the District of
Oregon Case No. 3i17-CV-00164-SB. The Company, along with many of the other defendants, has moved to
dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff
will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

The Company has entered into a Voluntary Cleanup Agreement with the Oregon Department of Environmental
Quality (DEQ) in which the Company agreed to conduct an investigation of whether, and to what extent, past or
present operations at the Portland property may have released hazardous substances into the environment. The
Company has also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

sources of contamination that may have a release pathway to the Willamette River. Interim precautionary
measures are also required in the order and the Company is discussing with the DEQ potential remedial actions
which may be required. The Company’s aggregate expenditure has not been material, however the Company
could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other
responsible parties.

Other Litigation, Commitments and Contingencies

In the quarter ended November 30, 2016, the Company received an adverse judgment of approximately
$15 million, which was subsequently reduced to approximately $10 million, on one matter related to commercial
litigation in a foreign jurisdiction. The Company has settled the litigation for less than the judgment.

From time to time, Greenbrier is involved as a defendant in litigation in the ordinary course of business, the
outcomes of which cannot be predicted with certainty. While the ultimate outcome of such legal proceedings
cannot be determined at this time, the Company believes that the resolution of pending litigation will not have a
material adverse effect on the Company’s Consolidated Financial Statements.

As of August 31, 2018, the Company had outstanding letters of credit aggregating $72.2 million associated with
performance guarantees, facility leases and workers compensation insurance.

As of August 31, 2018, the Company had a $10.0 million note receivable from Amsted-Maxion Cruzeiro, its
unconsolidated Brazilian castings and components manufacturer and a $7.2 million note receivable balance from
Greenbrier-Maxion, its unconsolidated Brazilian railcar manufacturer. These note receivables are included on the
Consolidated Balance Sheet in Accounts receivable, net. In the future, the Company may make loans to or
provide guarantees for Amsted-Maxion Cruzeiro or Greenbrier-Maxion.

Note 23 - Fair Value of Financial Instruments

The estimated fair values of financial instruments and the methods and assumptions used to estimate such fair
values are as follows:

(In thousands)

Notes payable as of August 31, 2018
Notes payable as of August 31, 2017

Carrying
Amount 1

$469,721
$597,604

Estimated
Fair Value
(Level 2)

$517,925
$644,708

1 Carrying amount disclosed in this table excludes debt discount and debt issuance costs.

The carrying amount of cash and cash equivalents, accounts and notes receivable, revolving notes, accounts
payable and accrued liabilities, foreign currency forward contracts and interest rate swaps is a reasonable
estimate of fair value of these financial instruments. Estimated rates currently available to the Company for debt
with similar terms and remaining maturities and current market data are used to estimate the fair value of notes
payable.

Note 24 - Fair Value Measures

Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value, for
this disclosure, is defined as an exit price, representing the amount that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy
which prioritizes the inputs used in measuring a fair value as follows:

Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical instruments;
Level 2 - inputs, other than the quoted market prices in active markets for similar instruments, which are

observable, either directly or indirectly; and

Level 3 - unobservable inputs for which there is little or no market data available, which require the reporting

entity to develop its own assumptions.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2018 are:

(In thousands)

Assets:

Derivative financial instruments
Nonqualified savings plan investments
Cash equivalents

Liabilities:

Derivative financial instruments

Total

Level 1

Level 2(1)

Level 3

1,557
26,299
126,430

–
26,299
126,430

$1,557
–
–

$154,286

$152,729

$1,557

1,566

–

$1,566

–
–
–

–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative

Instruments for further discussion.

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2017 are:

(In thousands)

Assets:

Derivative financial instruments
Nonqualified savings plan investments
Cash equivalents

Liabilities:

Derivative financial instruments

Total

Level 1

Level 2(1)

Level 3

3,814
20,974
105,337

–
20,974
105,337

$3,814
–
–

$130,125

$126,311

$3,814

2,886

–

$2,886

–
–
–

–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative

Instruments for further discussion.

Note 25 - Subsequent Events

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by
substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available
to provide working capital and interim financing of equipment, principally for the U.S. and Mexican
operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on
the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of
inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated
capitalization and fixed charges coverage ratios. In September 2018, this revolving line of credit was renewed on
terms similar to the existing facility and increased to $600.0 million with a new maturity date of September 2023.
In addition, advances under this renewed facility bear interest at LIBOR plus 1.50% or Prime plus 0.50%
depending on the type of borrowing.

In September 2018, the Company refinanced approximately $170 million of existing senior term debt, due in
March 2020, secured by a pool of leased railcars with new 5-year $225 million senior term debt also secured by a
pool of leased railcars. The new debt bears a floating interest rate of LIBOR plus 1.50% or Prime plus 0.50%.
The term loan is to be repaid in equal quarterly installments of $1.97 million with the remaining outstanding
amounts, plus accrued interest, to be paid on the maturity date in September 2023. An interest rate swap
agreement was entered into on 50% of the initial balance to swap the floating interest rate to a fixed rate of
2.99%. The Company intends to use hedge accounting to account for the interest rate swap agreement.

In October 2018, the Company announced that Greenbrier and the Saudi Railway Company (SAR) signed an
agreement to form a joint venture that will generate a total investment of 1 billion Saudi Riyals (USD
$270 million) in the Saudi Arabia’s railway system and supply of freight railcars for the Saudi rail industry. The
joint venture is subject to the completion of final due diligence by the parties and required government or
corporate approvals.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)
2018
Revenue

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Cost of revenue

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Margin
Selling and administrative
Net gain on disposition of equipment

First

Second

Third

Fourth

Total

$451,485
78,011
30,039

$511,827
88,710
28,799

$510,099
94,515
36,773

$571,175
85,787
32,244

$2,044,586
347,023
127,855

559,535

629,336

641,387

689,206

2,519,464

380,850
72,506
16,865

429,165
80,708
14,116

427,875
85,850
19,155

489,517
79,266
14,536

1,727,407
318,330
64,672

470,221

523,989

532,880

583,319

2,110,409

89,314
47,043
(19,171)

105,347
50,294
(5,817)

108,507
51,793
(14,825)

105,887
51,309
(4,556)

409,055
200,439
(44,369)

Earnings from operations

61,442

60,870

71,539

59,134

252,985

Other costs

Interest and foreign exchange

7,020

7,029

6,533

8,786

29,368

Earnings before income tax and earnings (loss) from

unconsolidated affiliates

54,422

53,841

65,006

50,348

223,617

Income tax expense

(18,135)

11,301

(15,944)

(10,115)

(32,893)

Earnings (loss) from unconsolidated affiliates

Net earnings
Net earnings attributable to noncontrolling interest

(2,910)

33,377
(7,124)

147

(12,823)

(3,075)

(18,661)

65,289
(3,647)

36,239
(3,288)

37,158
(6,223)

172,063
(20,282)

Net earnings attributable to Greenbrier
Basic earnings per common share: (1)
Diluted earnings per common share: (1)

$ 26,253

$ 61,642

$ 32,951

$ 30,935

$ 151,781

$
$

0.90
0.83

$
$

2.10
1.91

$
$

1.03
1.01

$
$

0.95
0.94

$
$

4.92
4.68

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share
includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not
considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance
above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they
were outstanding, using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings.
The 2018 Convertible notes matured on April 1, 2018.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)
2017
Revenue

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Cost of revenue

Manufacturing
Wheels, Repair & Parts
Leasing & Services

Margin
Selling and administrative
Net gain on disposition of equipment

First

Second

Third

Fourth

Total

$454,033
69,635
28,646

$445,504
82,714
38,064

$317,104
85,231
36,826

$508,547
75,099
27,761

$1,725,188
312,679
131,297

552,314

566,282

439,161

611,407

2,169,164

356,555
64,978
18,030

346,653
75,497
25,207

245,228
77,985
26,247

425,531
69,876
16,078

1,373,967
288,336
85,562

439,563

447,357

349,460

511,485

1,747,865

112,751
41,213
(1,122)

118,925
39,495
(2,090)

89,701
42,810
(1,581)

99,922
47,089
(4,947)

421,299
170,607
(9,740)

Earnings from operations

72,660

81,520

48,472

57,780

260,432

Other costs

Interest and foreign exchange

1,724

5,673

7,894

8,901

24,192

Earnings before income tax and loss from

unconsolidated affiliates

70,936

75,847

40,578

48,879

236,240

Income tax expense

(20,386)

(24,858)

(8,656)

(10,114)

(64,014)

Loss from unconsolidated affiliates

(2,584)

(1,988)

(681)

(6,511)

(11,764)

Net earnings
Net earnings attributable to noncontrolling interest

47,966
(23,004)

49,001
(14,465)

31,241
1,582

32,254
(8,508)

160,462
(44,395)

Net earnings attributable to Greenbrier
Basic earnings per common share: (1)
Diluted earnings per common share: (1)

$ 24,962

$ 34,536

$ 32,823

$ 23,746

$ 116,067

$
$

0.86
0.79

$
$

1.19
1.09

$
$

1.12
1.03

$
$

0.81
0.75

$
$

3.97
3.65

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share
includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are
subject to performance criteria for which actual levels of performance above target have been achieved 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.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Principal Executive
Officer, Principal Financial Officer and Principal Accounting Officer, the effectiveness of our disclosure controls
and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities
Exchange Act of 1934 (the Exchange Act). Based on that evaluation, our Principal Executive Officer, Principal
Financial Officer and Principal Accounting Officer have concluded that, as of the end of the period covered by
this report, our disclosure controls and procedures were effective in ensuring that information required to be
disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner,
and (2) accumulated and communicated to our management, including our Principal Executive Officer, Principal
Financial Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required
disclosure.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting during the quarter ended August 31,
2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control
over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management of The Greenbrier Companies, Inc. together with its consolidated subsidiaries (the Company), is
responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s
internal control over financial reporting is a process designed under the supervision of the Company’s Principal
Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the Company’s financial statements for external reporting purposes in
accordance with accounting principles generally accepted in the United States of America.

As of the end of the Company’s 2018 fiscal year, management conducted an assessment of the effectiveness of
the Company’s internal control over financial reporting based on the framework established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). On August 20, 2018 the Company entered into an agreement to discontinue the GBW
railcar repair joint venture, which resulted in 12 repair shops returned to the Company. In addition, on August 8,
2018 Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag,
a railcar manufacturing company based in Adana, Turkey. Management excluded these 12 repair shops and
Rayvag from our 2018 assessment of the effectiveness of our internal control over financial reporting as of
August 31, 2018. The 12 repair shops and Rayvag accounted for approximately 1.2% of the Company’s total
assets as of August 31, 2018 and from the date of the agreements to August 31, 2018 accounted for
approximately 0.2% of the Company’s revenues for the year ended August 31, 2018. These 12 repair shops and
Rayvag will be included in our assessment of internal controls over financial reporting in fiscal 2019. Based on
this assessment, management has determined that the Company’s internal control over financial reporting as of
August 31, 2018 is effective.

Our independent registered public accounting firm, KPMG LLP, independently assessed the effectiveness of the
Company’s internal control over financial reporting excluding the 12 repair shops and Rayvag, as stated in their
attestation report, which is included at the end of Part II, Item 9A of this Form 10-K.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Inherent Limitations on Effectiveness of Controls

The Company’s management,
including the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer, does not expect that our disclosure controls and procedures or our internal control
over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives
will be met. The design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud
will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
These inherent limitations include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management override of the controls. The design
of any system of controls is based in part on certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over
time, controls may become inadequate because of changes in conditions or deterioration in the degree of
compliance with policies or procedures.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
The Greenbrier Companies, Inc. and subsidiaries:

Opinion on Internal Control Over Financial Reporting

We have audited The Greenbrier Companies, Inc. and subsidiaries’ (the Company) internal control over financial
reporting as of August 31, 2018, based on criteria established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of August 31,
2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2018 and 2017, the
related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in
the three year period ended August 31, 2018, and the related notes (collectively, the consolidated financial
statements), and our report dated October 26, 2018 expressed an unqualified opinion on those consolidated
financial statements.

During fiscal 2018, the Company acquired 12 repair shops and an approximate 68% ownership interest in
Rayvag, a railcar manufacturing company. Management excluded all 12 of the acquired repair shops and
Rayvag’s internal control over financial reporting from its assessment of the effectiveness of the Company’s
internal control over financial reporting as of August 31, 2018. The total assets of these 12 repair shops and
Rayvag represented approximately 1.2% of consolidated total assets as of August 31, 2018 and approximately
0.2% of consolidated revenues for the year ended August 31, 2018. Our audit of internal control over financial
reporting of the Company also excluded an evaluation of the internal control over financial reporting of these 12
repair shops and Rayvag.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audit also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

limitations,

/s/ KPMG LLP

Portland, Oregon
October 26, 2018

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

Item 9B. OTHER INFORMATION

None

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE

GOVERNANCE

There is hereby incorporated by reference the information under the captions “Election of Directors”, “Board
Committees, Meetings and Charters”, “Our Code of Business Conduct and Ethics and FCPA Compliance” and
“Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive Proxy Statement to be
filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and
Exchange Commission within 120 days after the end of Registrant’s year ended August 31, 2018. Information on
the executive officers of the Company is found under the caption “Executive Officers of the Registrant” in Part I
of this 10-K.

Item 11. EXECUTIVE COMPENSATION

There is hereby incorporated by reference the information under the caption “Executive Compensation”,
“Compensation Committee Report”, 2018 Director Compensation”, “Compensation Committee Interlocks and
Insider Participation” and “Risk Oversight” in Registrant’s definitive Proxy Statement to be filed pursuant to
Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission
within 120 days after the end of Registrant’s year ended August 31, 2018.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

There is hereby incorporated by reference the information under the captions “Stock Ownership of Certain
Beneficial Owners and Management” and “Equity Compensation Plan Information” in Registrant’s definitive
Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the
Securities and Exchange Commission within 120 days after the end of Registrant’s year ended August 31, 2018.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND

DIRECTOR INDEPENDENCE

There is hereby incorporated by reference the information under the caption “Related Party Transactions” and
“Director Independence” in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A,
which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days
after the end of Registrant’s year ended August 31, 2018.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

There is hereby incorporated by reference the information under the caption “Ratification of Appointment of
Auditors” in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy
Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end
of the Registrant’s year ended August 31, 2018.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(1) Financial Statements

See Consolidated Financial Statements in Item 8

(a)

(2) Financial Statements Schedule*

* All other schedules have been omitted because they are inapplicable, not required or because the information is given in the
Consolidated Financial Statements or notes thereto. This supplemental schedule should be read in conjunction with the
Consolidated Financial Statements and notes thereto included in this report.

(a)

(3) The following exhibits are filed herewith and this list is intended to constitute the exhibit index:

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

Registrant’s Articles of Incorporation are incorporated herein by reference to Exhibit 3.1 to the
Registrant’s Form 10-Q filed April 5, 2006.

Articles of Merger amending the Registrant’s Articles of Incorporation are incorporated herein by
reference to Exhibit 3.2 to the Registrant’s Form 10-Q filed April 5, 2006.

Registrant’s Bylaws, as amended January 11, 2006, are incorporated herein by reference to Exhibit
3.3 to the Registrant’s Form 10-Q filed April 5, 2006.

Amendment to the Registrant’s Bylaws, dated October 31, 2006, is incorporated herein by reference
to Exhibit 3.1 to the Registrant’s Form 8-K filed November 6, 2006.

Amendment to the Registrant’s Bylaws, dated January 8, 2008, is incorporated herein by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed November 8, 2007.

Amendment to the Registrant’s Bylaws, dated April 8, 2008, is incorporated herein by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed April 11, 2008.

Amendment to the Registrant’s Bylaws, dated April 7, 2009, is incorporated herein by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed April 13, 2009.

Amendment to the Registrant’s Bylaws, dated June 8, 2009, is incorporated herein by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed June 10, 2009.

Amendment to the Registrant’s Bylaws, dated June 10, 2009, is incorporated herein by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed June 12, 2009.

3.10 Amendment to the Registrant’s Bylaws, dated October 30, 2012, is incorporated herein by reference

to Exhibit 3.1 to the Registrant’s Form 8-K filed November 5, 2012.

3.11 Amendment to the Registrant’s Bylaws, dated January 9, 2013, is incorporated herein by reference to

Exhibit 3.1 to the Registrant’s Form 8-K filed January 15, 2013.

3.12 Amendment to the Registrant’s Bylaws, dated October 29, 2013, is incorporated herein by reference

to Exhibit 3.1 to the Registrant’s Form 8-K filed October 31, 2013.

3.13 Amendment to the Registrant’s Bylaws, dated October 29, 2014, is incorporated herein by reference

to Exhibit 3.1 to the Registrant’s Form 8-K filed November 3, 2014.

3.14 Amendment to the Registrant’s Bylaws, dated March 31, 2015, is incorporated herein by reference to

Exhibit 3.1 to the Registrant’s Form 8-K filed April 6, 2015.

3.15 Amendment to the Registrant’s Bylaws, dated July 1, 2015, is incorporated herein by reference to

Exhibit 3.1 to the Registrant’s Form 8-K filed July 8, 2015.

3.16 Amendment to the Registrant’s Bylaws, dated October 21, 2015, is incorporated herein by reference

to Exhibit 3.1 to the Registrant’s Form 8-K filed October 22, 2015.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

3.17

3.18

3.19

4.1

4.2

10.1*

10.2*

10.3*

10.4*

10.5*

10.6*

10.7*

10.8*

10.9*

10.10*

10.11*

Amendment to the Registrant’s Bylaws, dated October 30, 2015, is incorporated herein by
reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 2, 2015.

Amendment to the Registrant’s Bylaws, dated March 31, 2017, is incorporated herein by reference
to Exhibit 3.1 to the Registrant’s Form 8-K filed March 31, 2017.

Amendment to the Registrant’s Bylaws, dated June 23, 2017, is incorporated herein by reference
to Exhibit 3.1 to the Registrant’s Form 8-K filed June 29, 2017.

Specimen Common Stock Certificate of Registrant
is incorporated herein by reference to
Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 filed April 7, 2010 (SEC File
Number 333-165924).

Indenture between the Registrant and Wells Fargo Bank, National Association, as Trustee,
including the Form of Note attached as Exhibit A thereto, dated February 6, 2017, is incorporated
herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed February 6, 2017.

Amended and Restated Employment Agreement between the Registrant and Mr. William A.
Furman, dated August 28, 2012, is incorporated herein by reference to Exhibit 10.3 to the
Registrant’s Form 10-Q filed January 9, 2013.

Form of Amended and Restated Employment Agreement between the Registrant and certain of its
executive officers, as amended and restated on August 28, 2012, is incorporated herein by
reference to Exhibit 10.8 to the Registrant’s Form 10-K filed November 1, 2012.

Amendment No. 1 to Form of Amended and Restated Employment Agreement between the
Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is
incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed January 8,
2014.

Second Amendment to Form of Amended and Restated Employment Agreement between the
Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is
incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed June 29,
2018.

Form of Agreement concerning Indemnification and Related Matters (Directors) between
Registrant and its directors is incorporated herein by reference to Exhibit 10.2 to the Registrant’s
Form 10-Q filed July 1, 2015.

Form of Agreement concerning Indemnification and Related Matters (Officers) between
Registrant and its officers is incorporated herein by reference to Exhibit 10.2 to the Registrant’s
Form 10-Q filed June 29, 2018.

Form of Change of Control Agreement is incorporated herein by reference to Exhibit 10.5 to the
Registrant’s Form 10-Q filed April 4, 2013.

The Greenbrier Companies, Inc. Form of Amendment to Change of Control Agreement, approved
on May 28, 2013, is incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 8-K
filed June 3, 2013.

The Greenbrier Companies, Inc. 2014 Amended and Restated Stock Incentive Plan is incorporated
herein by reference to Appendix A to the Registrant’s Proxy Statement on Schedule 14A filed
November 19, 2014.

The Greenbrier Companies, Inc. 2017 Amended and Restated Stock Incentive Plan is incorporated
herein by reference to Appendix A to the Registrant’s Proxy Statement on Schedule 14A filed
November 14, 2017.

Form of Director Restricted Share Agreement related to the 2017 Amended and Restated Stock
Incentive Plan is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q
filed April 6, 2018.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

10.12*

10.13*

The Greenbrier Companies, Inc. Nonqualified Deferred Compensation Plan 2018 Amendment and
Restatement of the Basic Plan Document is incorporated herein by reference to Exhibit 10.4 to the
Registrant’s Form 10-Q filed June 29, 2018.

The Greenbrier Companies Nonqualified Deferred Compensation Plan 2018 Amendment and
Restatement of the Adoption Agreement is incorporated herein by reference to Exhibit 10.5 to the
Registrant’s Form 10-Q filed June 29, 2018.

10.14* Updated Rabbi Trust Agreements, dated October 1, 2012, related to The Greenbrier Companies,
Inc. Nonqualified Deferred Compensation Plan, are incorporated herein by reference to Exhibit
10.1 to the Registrant’s Form 10-Q filed January 9, 2013.

10.15* Amendment No. 1 to Trust Agreement, dated June 15, 2018, related to The Greenbrier
Companies, Inc. Nonqualified Deferred Compensation Plan, is incorporated by reference to
Exhibit 10.6 to the Registrant’s Form 10-Q filed June 29, 2018.

10.16*

The Greenbrier Companies Nonqualified Deferred Compensation Plan Adoption Agreement for
Directors, dated July 1, 2012,
is incorporated herein by reference to Exhibit 10.28 to the
Registrant’s Form 10-K filed November 1, 2012.

10.17* Amendment No. 1 to the Greenbrier Companies Nonqualified Deferred Compensation Plan
Adoption Agreement for Directors, dated December 15, 2015, is incorporated herein by reference
to Exhibit 10.1 to the Registrant’s Form 10-Q filed April 5, 2016.

10.18* Updated Rabbi Trust Agreements, dated October 1, 2012, related to the Greenbrier Companies,
Inc. Nonqualified Deferred Compensation Plan for Directors, are incorporated herein by reference
to Exhibit 10.2 to the Registrant’s Form 10-Q filed January 9, 2013.

10.19* Amendment No. 1 to Trust Agreement, dated June 15, 2018, related to The Greenbrier
Companies, Inc. Nonqualified Deferred Compensation Plan for Directors, is incorporated by
reference to Exhibit 10.7 to the Registrant’s Form 10-Q filed June 29, 2018.

10.20*

10.21*

10.22*

10.23*

The Greenbrier Companies, Inc. Form of Restricted Stock Unit Award Agreement, approved on
May 22, 2015, is incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q
filed July 1, 2015.

The Greenbrier Companies, Inc. Form of Restricted Stock Unit Award Agreement, approved on
March 27, 2017, is incorporated herein by reference to Exhibit 10.22 of the Registrant’s Form
10-K filed October 27, 2017.

The Greenbrier Companies, Inc. Form of Restricted Stock Unit Award Agreement, approved on
April 2, 2018, is incorporated herein by reference to Exhibit 10.3 of the Registrant’s Form 10-Q
filed June 29, 2018.

The Greenbrier Companies, Inc. 2014 Employee Stock Purchase Plan is incorporated herein by
reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on
November 19, 2014.

10.24* Consulting Services Agreement between Greenbrier Leasing Company LLC and Charles J.
Swindells dated January 7, 2016 is incorporated herein by reference to Exhibit 10.3 to the
Registrant’s Form 10-Q filed April 5, 2016.

10.25

10.26

10.27

The Greenbrier Companies, Inc. Executive Stock Ownership Guidelines, adopted as of June 27,
2018.

Dissolution Agreement, dated August 20, 2018, by and among the Registrant, Greenbrier Rail
Services Holdings, LLC, Watco Companies, L.L.C., Millennium Rail, L.L.C., Watco Mechanical
Services, L.L.C., GBW Railcar Services Holdings, L.L.C., GBW Railcar Services, L.L.C., and
GBW Railcar Services Canada, Inc.

Second Amended and Restated Limited Liability Company Agreement of GBW Railcar Services
Holdings, L.L.C., dated August 20, 2018, by and among Greenbrier Rail Services Holdings, LLC,
Watco Mechanical Services, L.L.C., and Millennium Rail, L.L.C.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

10.28

10.29

10.30

10.31

10.32

10.33

14.1

21.1

23.1

31.1

31.2

32.1

32.2

101

Fourth Amended and Restated Credit Agreement, dated as of September 26, 2018, by and among
The Greenbrier Companies, Inc., Bank of America, N.A., as Administrative Agent, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, MUFG Union
Bank, N.A., as Syndication Agent, Bank of the West, Branch Banking and Trust Company, Fifth
Third Bank, and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the
lenders identified therein.

Fourth Amended and Restated Security Agreement, dated as of September 26, 2018, by and
among The Greenbrier Companies, Inc., and the other parties identified as Debtors therein, in
favor of Bank of America, N.A., as Administrative Agent.

Fourth Amended and Restated Pledge Agreement, dated as of September 26, 2018, by and among
The Greenbrier Companies, Inc., and the other parties identified as Debtors therein, in favor of
Bank of America, N.A., as Administrative Agent.

Amended and Restated Credit Agreement, dated as of September 26, 2018, by and among
Greenbrier Leasing Company LLC, an Oregon limited liability company, Bank of America, N.A.,
as Administrative Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead
Arranger and Sole Bookrunner, MUFG Union Bank, N.A., as Syndication Agent, and the lenders
identified therein.

Amended and Restated Security Agreement, dated as of September 26, 2018, by and between
Greenbrier Leasing Company LLC, an Oregon limited liability company, in favor of Bank of
America, N.A., as Administrative Agent.

Purchase Agreement, dated January 31, 2017, among The Greenbrier Companies, Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. is incorporated herein by
reference to Exhibit 10.1 of the Registrant’s Form 8-K filed February 6, 2017.

Code of Business Conduct and Ethics is incorporated herein by reference to Exhibit 14.1 to the
Registrant’s Form 8-K filed January 12, 2016.

List of the subsidiaries of the Registrant.

Consent of KPMG LLP.

Certification pursuant to Rule 13(a) – 14(a).

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

The following financial information from the Company’s Annual Report on Form 10-K for the
year ended August 31, 2018, formatted in XBRL (eXtensible Business Reporting Language) and
furnished electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated
Statements of
the
Consolidated Statements of Equity (v) the Consolidated Statements of Cash Flows; (vi) the Notes
to Condensed Consolidated Financial Statements.

(iii) Consolidated Statements of Comprehensive Income (iv)

Income;

* Management contract or compensatory plan or arrangement

Note: For all exhibits incorporated by reference, unless otherwise noted above, the SEC file number is 001-13146.

Item 16. FORM 10-K SUMMARY

None.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and 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.

Dated: October 26, 2018

By: /s/ William A. Furman
William A. Furman
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature

/s/ William A. Furman

William A. Furman, President,
Chief Executive Officer and Chairman of the Board

/s/ Duane C. McDougall
Duane C. McDougall, Director

/s/ Graeme A. Jack

Graeme A. Jack, Director

/s/ Charles J. Swindells

Charles J. Swindells, Director

/s/ Donald A. Washburn

Donald A. Washburn, Director

/s/ Kelly M. Williams

Kelly M. Williams, Director

/s/ Thomas B. Fargo

Thomas B. Fargo, Director

/s/ Wanda F. Felton
Wanda F. Felton, Director

/s/ David L. Starling
David L. Starling, Director

/s/ Lorie L. Tekorius

Lorie L. Tekorius, Executive Vice President
and Chief Operating Officer (Principal Financial Officer)

/s/ Adrian J. Downes
Adrian J. Downes, Senior Vice President,
Acting Chief Financial Officer and
Chief Accounting Officer (Principal Accounting Officer)

Date

October 26, 2018

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

CERTIFICATIONS

The Company filed the required 303A.12(a) New York Stock Exchange Certification of its Chief Financial
Officer with the New York Stock Exchange with no qualifications following the 2018 Annual Meeting of
Shareholders and the Company filed as an exhibit to its Annual Report on Form 10-K for the year ended
August 31, 2017, as filed with the Securities and Exchange Commission, a Certification of the Chief Executive
Officer and a Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

T h e G r e e n b r i e r C o m p a n i e s 2 0 1 8 A n n u a l R e p o r t

CHARLES J. SWINDELLS
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

DONALD A. WASHBURN (cid:15)(cid:24)(cid:16)(cid:15)(cid:25)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

KELLY M. WILLIAMS (cid:15)(cid:24)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

(cid:15)(cid:24)(cid:16)(cid:3)(cid:52)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:40)(cid:92)(cid:75)(cid:80)(cid:91)(cid:3)(cid:42)(cid:86)(cid:84)(cid:84)(cid:80)(cid:91)(cid:91)(cid:76)(cid:76)(cid:21)
(cid:15)(cid:25)(cid:16)(cid:3)(cid:52)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:76)(cid:85)(cid:90)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:42)(cid:86)(cid:84)(cid:84)(cid:80)(cid:91)(cid:91)(cid:76)(cid:76)(cid:21)
(cid:15)(cid:26)(cid:16) (cid:52)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:53)(cid:86)(cid:84)(cid:80)(cid:85)(cid:72)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:85)(cid:75)

Corporate Governance Committee.

JUSTIN M. ROBERTS
(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)
(cid:42)(cid:86)(cid:89)(cid:87)(cid:86)(cid:89)(cid:72)(cid:91)(cid:76)(cid:3)(cid:45)(cid:80)(cid:85)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:13)(cid:3)(cid:59)(cid:89)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:89)

LORIE L. TEKORIUS
(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:54)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)

RICK M. TURNER
(cid:58)(cid:76)(cid:85)(cid:80)(cid:86)(cid:89)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)
(cid:46)(cid:89)(cid:76)(cid:76)(cid:85)(cid:73)(cid:89)(cid:80)(cid:76)(cid:89)(cid:3)(cid:57)(cid:72)(cid:80)(cid:83)(cid:3)(cid:58)(cid:76)(cid:89)(cid:93)(cid:80)(cid:74)(cid:76)(cid:90)

SHERRILL A. CORBETT
(cid:42)(cid:86)(cid:89)(cid:87)(cid:86)(cid:89)(cid:72)(cid:91)(cid:76)(cid:3)(cid:58)(cid:76)(cid:74)(cid:89)(cid:76)(cid:91)(cid:72)(cid:89)(cid:96)

DIRECTORS

WILLIAM A. FURMAN
Chairman of the Board
Director

THOMAS B. FARGO (cid:15)(cid:25)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

WANDA F. FELTON (cid:15)(cid:24)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

GRAEME A. JACK (cid:15)(cid:24)(cid:16)(cid:15)(cid:25)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

DUANE C. MCDOUGALL (cid:15)(cid:24)(cid:16)(cid:15)(cid:25)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

DAVID L. STARLING (cid:15)(cid:25)(cid:16)(cid:15)(cid:26)(cid:16)
(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)

ADRIAN J. DOWNES
(cid:58)(cid:76)(cid:85)(cid:80)(cid:86)(cid:89)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
(cid:40)(cid:74)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:45)(cid:80)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)
(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:40)(cid:74)(cid:74)(cid:86)(cid:92)(cid:85)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)

JACK ISSELMANN
(cid:58)(cid:76)(cid:85)(cid:80)(cid:86)(cid:89)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)
(cid:44)(cid:95)(cid:91)(cid:76)(cid:89)(cid:85)(cid:72)(cid:83)(cid:3)(cid:40)(cid:1116)(cid:72)(cid:80)(cid:89)(cid:90)(cid:3)(cid:13)(cid:3)(cid:42)(cid:86)(cid:84)(cid:84)(cid:92)(cid:85)(cid:80)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)

ANNE T. MANNING
(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
Corporate Controller

MARK J. RITTENBAUM
(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:42)(cid:86)(cid:84)(cid:84)(cid:76)(cid:89)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:51)(cid:76)(cid:72)(cid:90)(cid:80)(cid:85)(cid:78)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)

EXECUTIVE AND OTHER OFFICERS

WILLIAM A. FURMAN
(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)

MARTIN R. BAKER
(cid:58)(cid:76)(cid:85)(cid:80)(cid:86)(cid:89)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:83)(cid:80)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)
General Counsel

ALEJANDRO CENTURION
(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)(cid:3)(cid:46)(cid:83)(cid:86)(cid:73)(cid:72)(cid:83)(cid:3)(cid:52)(cid:72)(cid:85)(cid:92)(cid:77)(cid:72)(cid:74)(cid:91)(cid:92)(cid:89)(cid:80)(cid:85)(cid:78)(cid:3)(cid:54)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)

BRIAN J. COMSTOCK
(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)
(cid:58)(cid:72)(cid:83)(cid:76)(cid:90)(cid:3)(cid:13)(cid:3)(cid:52)(cid:72)(cid:89)(cid:82)(cid:76)(cid:91)(cid:80)(cid:85)(cid:78)

JAMES A. COWAN
(cid:58)(cid:76)(cid:85)(cid:80)(cid:86)(cid:89)(cid:3)(cid:61)(cid:80)(cid:74)(cid:76)(cid:3)(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)
(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)(cid:3)(cid:46)(cid:89)(cid:76)(cid:76)(cid:85)(cid:73)(cid:89)(cid:80)(cid:76)(cid:89)(cid:3)(cid:48)(cid:85)(cid:91)(cid:76)(cid:89)(cid:85)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:72)(cid:83)

INVESTOR INFORMATION

CORPORATE OFFICES
The Greenbrier Companies, Inc.
(cid:54)(cid:85)(cid:76)(cid:3)(cid:42)(cid:76)(cid:85)(cid:91)(cid:76)(cid:89)(cid:87)(cid:86)(cid:80)(cid:85)(cid:91)(cid:76)(cid:3)(cid:43)(cid:89)(cid:80)(cid:93)(cid:76)(cid:19)(cid:3)(cid:58)(cid:92)(cid:80)(cid:91)(cid:76)(cid:3)(cid:25)(cid:23)(cid:23)
(cid:51)(cid:72)(cid:82)(cid:76)(cid:3)(cid:54)(cid:90)(cid:94)(cid:76)(cid:78)(cid:86)(cid:19)(cid:3)(cid:54)(cid:57)(cid:3)(cid:32)(cid:30)(cid:23)(cid:26)(cid:28)

ANNUAL SHAREHOLDERS’ MEETING
Wednesday, January 9, 2019 / 2:00 p.m.
Benson Hotel
(cid:26)(cid:23)(cid:32)(cid:3)(cid:58)(cid:62)(cid:3)(cid:41)(cid:89)(cid:86)(cid:72)(cid:75)(cid:94)(cid:72)(cid:96)(cid:19)(cid:3)(cid:55)(cid:86)(cid:89)(cid:91)(cid:83)(cid:72)(cid:85)(cid:75)(cid:19)(cid:3)(cid:54)(cid:89)(cid:76)(cid:78)(cid:86)(cid:85)

FINANCIAL INFORMATION
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(cid:72)(cid:85)(cid:75)(cid:3)(cid:86)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:80)(cid:85)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:90)(cid:79)(cid:86)(cid:92)(cid:83)(cid:75)(cid:3)(cid:73)(cid:76)
made to:

Investor Relations
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(cid:54)(cid:85)(cid:76)(cid:3)(cid:42)(cid:76)(cid:85)(cid:91)(cid:76)(cid:89)(cid:87)(cid:86)(cid:80)(cid:85)(cid:91)(cid:76)(cid:3)(cid:43)(cid:89)(cid:80)(cid:93)(cid:76)(cid:19)(cid:3)(cid:58)(cid:92)(cid:80)(cid:91)(cid:76)(cid:3)(cid:25)(cid:23)(cid:23)
(cid:51)(cid:72)(cid:82)(cid:76)(cid:3)(cid:54)(cid:90)(cid:94)(cid:76)(cid:78)(cid:86)(cid:19)(cid:3)(cid:54)(cid:57)(cid:3)(cid:32)(cid:30)(cid:23)(cid:26)(cid:28)

(cid:44)(cid:20)(cid:84)(cid:72)(cid:80)(cid:83)(cid:33)(cid:3)(cid:80)(cid:85)(cid:93)(cid:76)(cid:90)(cid:91)(cid:86)(cid:89)(cid:21)(cid:89)(cid:76)(cid:83)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:39)(cid:78)(cid:73)(cid:89)(cid:95)(cid:21)(cid:74)(cid:86)(cid:84)
(cid:28)(cid:23)(cid:26)(cid:20)(cid:29)(cid:31)(cid:27)(cid:20)(cid:30)(cid:23)(cid:23)(cid:23)

LEGAL COUNSEL
Tonkon Torp LLP
(cid:55)(cid:86)(cid:89)(cid:91)(cid:83)(cid:72)(cid:85)(cid:75)(cid:19)(cid:3)(cid:54)(cid:89)(cid:76)(cid:78)(cid:86)(cid:85)

INDEPENDENT AUDITORS
KPMG LLP
(cid:55)(cid:86)(cid:89)(cid:91)(cid:83)(cid:72)(cid:85)(cid:75)(cid:19)(cid:3)(cid:54)(cid:89)(cid:76)(cid:78)(cid:86)(cid:85)

TRANSFER AGENT
Computershare Trust Company, N.A.
(cid:55)(cid:54)(cid:3)(cid:41)(cid:86)(cid:95)(cid:3)(cid:28)(cid:23)(cid:28)(cid:23)(cid:23)(cid:23)
(cid:51)(cid:86)(cid:92)(cid:80)(cid:90)(cid:93)(cid:80)(cid:83)(cid:83)(cid:76)(cid:19)(cid:3)(cid:50)(cid:64)(cid:3)(cid:27)(cid:23)(cid:25)(cid:26)(cid:26)

(cid:46)(cid:89)(cid:76)(cid:76)(cid:85)(cid:73)(cid:89)(cid:80)(cid:76)(cid:89)(cid:187)(cid:90)(cid:3)(cid:59)(cid:89)(cid:72)(cid:85)(cid:90)(cid:77)(cid:76)(cid:89)(cid:3)(cid:40)(cid:78)(cid:76)(cid:85)(cid:91)(cid:3)(cid:84)(cid:72)(cid:80)(cid:85)(cid:91)(cid:72)(cid:80)(cid:85)(cid:90)
(cid:90)(cid:91)(cid:86)(cid:74)(cid:82)(cid:79)(cid:86)(cid:83)(cid:75)(cid:76)(cid:89)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:90)(cid:19)(cid:3)(cid:80)(cid:90)(cid:90)(cid:92)(cid:76)(cid:90)(cid:3)(cid:90)(cid:91)(cid:86)(cid:74)(cid:82)(cid:3)
(cid:74)(cid:76)(cid:89)(cid:91)(cid:80)(cid:196)(cid:74)(cid:72)(cid:91)(cid:76)(cid:90)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:75)(cid:80)(cid:90)(cid:91)(cid:89)(cid:80)(cid:73)(cid:92)(cid:91)(cid:76)(cid:90)(cid:3)(cid:75)(cid:80)(cid:93)(cid:80)(cid:75)(cid:76)(cid:85)(cid:75)(cid:90)(cid:21)
(cid:57)(cid:76)(cid:88)(cid:92)(cid:76)(cid:90)(cid:91)(cid:90)(cid:3)(cid:74)(cid:86)(cid:85)(cid:74)(cid:76)(cid:89)(cid:85)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3)(cid:84)(cid:72)(cid:91)(cid:91)(cid:76)(cid:89)(cid:90)
should be directed to Computershare
(cid:59)(cid:89)(cid:92)(cid:90)(cid:91)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:19)(cid:3)(cid:53)(cid:21)(cid:40)(cid:21)

THE GREENBRIER COMPANIES
One Centerpointe Drive, Suite 200
Lake Oswego, Oregon 97035
gbrx.info@gbrx.com