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8-K - FORM 8-K - GREENBRIER COMPANIES INCd464767d8k.htm

Exhibit 99.1

 

For release: January 9, 2013, 6:00 a.m. EDT

   Contact:   Mark Rittenbaum
     503-684-7000

Greenbrier Posts Solid First Quarter EPS of $0.35 on Revenue of $415 Million

~ Backlog of 9,700 units valued at $1.11 Billion ~

~ Over $430 Million in new orders received across multiple railcar types ~

Lake Oswego, Oregon, January 9, 2013 – The Greenbrier Companies (NYSE: GBX) today reported results for its first fiscal quarter ended November 30, 2012.

First Quarter Highlights

 

   

Net earnings for the first quarter were $10.4 million, or $.35 per diluted share, on revenue of $415.4 million.

 

   

Adjusted EBITDA for the quarter was $31.8 million, or 7.6% of revenue.

 

   

New railcar deliveries were 2,900 units in the first quarter, a strong start to the year.

 

   

Since September 1, 2012, the beginning of the Company’s fiscal year, Greenbrier has received orders for 4,200 new railcar units valued at over $430 million, of which 1,400 units were received during the quarter, and 2,800 units subsequent to quarter end.

 

   

Subsequent to quarter end, the Company received a multi-year award to perform repair and refurbishment work, with anticipated annual revenue of about $12 million.

 

   

Subsequent to quarter end, the Company received awards for two multi-year management services contracts, with anticipated annual revenue of $3.5 million when fully implemented in fiscal 2014.

 

   

New railcar manufacturing backlog as of November 30, 2012 was 9,700 units with an estimated value of $1.11 billion (average unit sale price of $114,000), compared to 10,700 units with an estimated value of $1.20 billion (average unit sale price of $112,000) as of August 31, 2012.

 

   

Marine backlog totaled 2 units valued at $20 million as of November 30, 2012; subsequent to quarter end, Greenbrier received awards for 2 additional units valued at less than $10 million. Additionally we are party to a letter of intent for 15 barges valued at $60 million, subject to permitting and other conditions.

William A. Furman, president and chief executive officer, said, “We are pleased with our solid quarterly results. Our visibility is growing as the result of major new orders. We expect financial momentum will continue to build sequentially throughout the year, in line with earlier guidance. In North America, we continue to ramp up our higher margin tank car production to capitalize on demand from the strong energy market and are sold out of tank car capacity through calendar 2014. We expect to be at an annual run rate of about 3,800 tank cars in North America by December 2013. At the same time, we are seeing more diversified demand for our products and services in each of the business segments, as well as among railcar types, including automotive, forest products and intermodal.”

Furman continued, “Since September 1, 2012, the beginning of our fiscal year, we have received orders for 4,200 new railcar units in North America and Europe, of which 1,400 were automotive related, 1,250 were tank cars, with the balance including covered hopper cars, gondolas for scrap steel and other car types. With our flexible manufacturing footprint we can readily shift our capacity to railcar types in demand. Additionally, we have recently been awarded a major multi-year maintenance contract and two multi-year management services contracts.”


Furman added, “Our four key focus areas for 2013 are: enhancing operating margins, expanding product and service offerings, increasing free cash flow, and business diversification and growth. We are confident that this focus coupled with our diverse product offerings, integrated business model, and flexible manufacturing footprint position us to continue to gain share, enhance margins, and to grow through the cycle. We believe we have a long runway ahead, in each of our business segments, to drive shareholder value.”

Financial Summary

 

     Q1 FY13     Q4 FY12    

Sequential Comparison – Main Drivers

Revenue

   $ 415.4M      $ 443.5M      Down 6.3% principally due to lower new railcar deliveries with a higher average sales price

Gross margin

     11.5     12.3   Down 80 bps due to lower manufacturing margin, partially offset by higher margins in both other segments

Selling and administrative

   $ 26.1M      $ 27.6M      Down due to lower incentive compensation in Q1 and certain severance costs in Q4

Gain on disposition of equipment

   $ 1.4M      $ 0.07M      Timing of sales fluctuates and is opportunistic

Adjusted EBITDA

   $ 31.8M      $ 36.0 M      Down principally due to lower deliveries and margin

Effective tax rate

     26.7     51.0   Normalized rate in both periods is about 34%; difference from normalized rate is due to certain discrete tax items

Net earnings

   $ 10.4M      $ 7.4M      Up due to lower tax rate in Q1

Diluted EPS – GAAP

   $ 0.35      $ 0.26      “If converted” calculation

Economic EPS

   $ 0.37      $ 0.27      Excludes “if converted” impact of out-of-the-money bonds due 2018

Segment Summary

 

     Q1 FY13     Q4 FY12    

Sequential Comparison – Main Drivers

Manufacturing

Revenue

   $ 285.4M      $ 306.2M      Down 6.8% due to lower deliveries with a higher average sales price

Gross margin

     9.4     11.8   Down 240 bps due to changes in certain production rates and product mix

Deliveries

     2,900        3,500      Down due change in product mix to higher labor content units

Wheel Services, Refurbishment & Parts

      

Revenue

   $ 112.1M      $ 119.1M      Down 5.9% due to lower wheel and part volumes

Gross margin

     9.5     8.1   Up 140 bps due to better mix and improved efficiencies

Leasing & Services

      

Revenue

   $ 17.9M      $ 18.3M      Down 2.2% due to lower interim rents

Gross margin

     57.4     47.6   Up 980 bps due to reduction in certain maintenance accruals

Lease fleet utilization

     95.2     93.5   Up due to Q4 fleet additions placed in service in Q1


Business Outlook

Based on current business trends and industry forecasts, management currently anticipates the Company’s new railcar deliveries in 2013 to be about 13,000 units. While deliveries are expected to be below the 15,000 deliveries for fiscal 2012, the Company anticipates the product mix will be more favorable and include railcars with higher average selling prices. Management anticipates that fiscal 2013 revenue, adjusted EBITDA and earnings per share will be similar to fiscal 2012, with the second half of the year being stronger than the first half of the year.

Certain orders and awards referenced in this release are subject to customary documentation and completion of terms.

Conference Call

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

 

   

January 9, 2013

 

   

8:00 a.m. Pacific Standard Time

 

   

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

 

   

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

Please access the site 10 minutes prior to the start time. Following the call, a webcast replay will be available for 30 days. Telephone replay will be available through January 26, 2013, at 203-369-0948.

About Greenbrier Companies

Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in its four manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 39 locations across North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 10,000 railcars, and performs management services for approximately 221,000 railcars.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This presentation may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company’s products and services, plans to increase manufacturing capacity, new railcar delivery volumes and schedules, growth in demand for the Company’s railcar services and parts business, and the Company’s future financial performance. Greenbrier uses words such as “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “designed to,” “foreseeable future” and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from in the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog is not indicative of our financial results; turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other


matters, changing technologies, production of new railcar types, or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; all as may be discussed in more detail under the headings “Risk Factors” and “Forward Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2012, and our other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.

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

Economic EPS is not a financial measure under GAAP. Economic EPS is used to measure the current economic impact of our Convertible Bonds due in 2018 that have a conversion strike price of $38.05/share, which exceeds our current stock price. We define Economic EPS as net earnings attributable to Greenbrier divided by the sum of weighted average basic common shares outstanding, plus the dilutive effect of warrants. This calculation excludes the dilutive effect of the shares underlying the 2018 bonds under the “if converted” method, which is included in the calculation of Diluted EPS. You should not consider Economic EPS in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Economic EPS is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Economic EPS measure presented may differ from and may not be comparable to similarly titled measures used by other companies.


THE GREENBRIER COMPANIES, INC.

 

Consolidated Balance Sheets

(In thousands, unaudited)

 

     November 30,
2012
     August 31,
2012
     May 31,
2012
     February 29,
2012
     November 30,
2011
 

Assets

              

Cash and cash equivalents

   $ 41,284       $ 53,571       $ 44,915       $ 40,666       $ 20,855   

Restricted cash

     7,322         6,277         6,089         2,249         2,151   

Accounts receivable, net

     163,385         146,326         172,086         177,544         149,559   

Inventories

     363,642         316,741         346,122         365,811         354,045   

Leased railcars for syndication

     54,297         97,798         66,776         79,681         68,029   

Equipment on operating leases, net

     362,522         362,968         334,872         322,811         323,878   

Property, plant and equipment, net

     186,715         182,429         172,729         165,700         159,671   

Goodwill

     137,066         137,066         137,066         137,066         137,066   

Intangibles and other assets, net

     79,500         81,368         84,693         85,155         84,187   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 1,395,733       $ 1,384,544       $ 1,365,348       $ 1,376,683       $ 1,299,441   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities and Equity

              

Revolving notes

   $ 89,826       $ 60,755       $ 71,430       $ 101,446       $ 80,679   

Accounts payable and accrued liabilities

     282,925         329,508         323,977         340,328         311,519   

Deferred income taxes

     96,498         95,363         88,514         89,623         87,395   

Deferred revenue

     28,283         17,194         17,872         1,230         5,724   

Notes payable

     427,697         428,079         428,028         428,454         431,184   

Total equity Greenbrier

     447,080         431,777         418,161         399,788         368,528   

Noncontrolling interest

     23,424         21,868         17,366         15,814         14,412   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     470,504         453,645         435,527         415,602         382,940   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     $1,395,733       $ 1,384,544       $ 1,365,348       $ 1,376,683       $ 1,299,441   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


THE GREENBRIER COMPANIES, INC.

 

Consolidated Statements of Income

(In thousands, except per share amounts, unaudited)

 

     Three Months Ended
November 30,
 
     2012     2011  

Revenue

    

Manufacturing

   $ 285,368      $ 262,656   

Wheel Services, Refurbishment & Parts

     112,100        117,749   

Leasing & Services

     17,906        17,794   
  

 

 

   

 

 

 
     415,374        398,199   

Cost of revenue

    

Manufacturing

     258,492        236,188   

Wheel Services, Refurbishment & Parts

     101,476        105,891   

Leasing & Services

     7,627        9,663   
  

 

 

   

 

 

 
     367,595        351,742   

Margin

     47,779        46,457   

Selling and administrative

     26,100        23,235   

Gain on disposition of equipment

     (1,408     (3,658
  

 

 

   

 

 

 

Earnings from operations

     23,087        26,880   

Other costs

    

Interest and foreign exchange

     5,900        5,383   
  

 

 

   

 

 

 

Earnings before income taxes and loss from unconsolidated affiliates

     17,187        21,497   

Income tax expense

     (4,586     (7,797
  

 

 

   

 

 

 

Earnings before loss from unconsolidated affiliates

     12,601        13,700   

Loss from unconsolidated affiliates

     (40     (372
  

 

 

   

 

 

 

Net earnings

     12,561        13,328   

Net (earnings) loss attributable to noncontrolling interest

     (2,134     1,189   
  

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 10,427      $ 14,517   
  

 

 

   

 

 

 

Basic earnings per common share:

   $ 0.38      $ 0.57   

Diluted earnings per common share:

   $ 0.35      $ 0.48   

Weighted average common shares:

    

Basic

     27,144        25,463   

Diluted

     33,991        33,389   


THE GREENBRIER COMPANIES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

     Three Months Ended
November 30,
 
     2012     2011  

Cash flows from operating activities:

    

Net earnings

   $ 12,561      $ 13,328   

Adjustments to reconcile net earnings to net cash used in operating activities:

    

Deferred income taxes

     940        3,665   

Depreciation and amortization

     10,923        9,889   

Gain on sales of leased equipment

     (1,408     (3,658

Accretion of debt discount

     849        787   

Stock based compensation expense

     1,886        1,742   

Other

     (1,705     2,024   

Decrease (increase) in assets:

    

Accounts receivable

     (15,515     33,687   

Inventories

     (41,465     (34,088

Leased railcars for syndication

     43,501        (37,339

Other

     945        856   

Increase (decrease) in liabilities:

    

Accounts payable and accrued liabilities

     (48,036     260   

Deferred revenue

     11,039        (145
  

 

 

   

 

 

 

Net cash used in operating activities

     (25,485     (8,992
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Proceeds from sales of equipment

     10,086        5,741   

Investment in and net advances from unconsolidated affiliates

     (160     70   

Increase in restricted cash

     (1,045     (38

Capital expenditures

     (25,141     (15,007

Other

     —          10   
  

 

 

   

 

 

 

Net cash used in investing activities

     (16,260     (9,224
  

 

 

   

 

 

 

Cash flows from financing activities:

    

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

     27,935        (9,150

Proceeds from revolving notes with maturities longer than 90 days

     9,195        7,557   

Repayments of revolving notes with maturities longer than 90 days

     (8,941     (5,606

Proceeds from the issuance of notes payable

     —          2,500   

Repayments of notes payable

     (1,230     (1,243

Investment by joint venture partner

     1,182        —     

Excess tax benefit from restricted stock awards

     217        —     
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     28,358        (5,942
  

 

 

   

 

 

 

Effect of exchange rate changes

     1,100        (5,209

Decrease in cash and cash equivalents

     (12,287     (29,367

Cash and cash equivalents

    

Beginning of period

     53,571        50,222   
  

 

 

   

 

 

 

End of period

   $ 41,284      $ 20,855   
  

 

 

   

 

 

 


THE GREENBRIER COMPANIES, INC.

 

SUPPLEMENTAL INFORMATION

Quarterly Results of Operations

(In thousands, except per share amounts, unaudited)

 

     First     Second     Third     Fourth     Total  

2012

          

Revenue

          

Manufacturing

   $ 262,656      $ 320,206      $ 364,930      $ 306,172      $ 1,253,964   

Wheel Services, Refurbishment & Parts

     117,749        119,894        125,145        119,077        481,865   

Leasing & Services

     17,794        18,086        17,722        18,285        71,887   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     398,199        458,186        507,797        443,534        1,807,716   

Cost of revenue

          

Manufacturing

     236,188        290,851        325,424        269,921        1,122,384   

Wheel Services, Refurbishment & Parts

     105,891        106,554        111,610        109,486        433,541   

Leasing & Services

     9,663        9,295        8,825        9,588        37,371   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     351,742        406,700        445,859        388,995        1,593,296   

Margin

     46,457        51,486        61,938        54,539        214,420   

Selling and administrative

     23,235        24,979        28,784        27,598        104,596   

Gain on disposition of equipment

     (3,658     (2,654     (2,585     (67     (8,964
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations

     26,880        29,161        35,739        27,008        118,788   

Other costs

          

Interest and foreign exchange

     5,383        6,630        6,560        6,236        24,809   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     21,497        22,531        29,179        20,772        93,979   

Income tax expense

     (7,797     (5,348     (8,655     (10,593     (32,393

Earnings (loss) from unconsolidated affiliates

     (372     72        201        (317     (416
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

     13,328        17,255        20,725        9,862        61,170   

Net (earnings) loss attributable to Noncontrolling interest

     1,189        415        (1,608     (2,458     (2,462
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 14,517      $ 17,670      $ 19,117      $ 7,404      $ 58,708   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share: (1)

   $ 0.57      $ 0.66      $ 0.71      $ 0.27      $ 2.21   

Diluted earnings per common share: (2)

   $ 0.48      $ 0.57      $ 0.61      $ 0.26      $ 1.91   

 

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely.
(2) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the outstanding warrants using the treasury stock method and the dilutive effect of shares underlying the 2018 Convertible Notes using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings.


THE GREENBRIER COMPANIES, INC.

 

SUPPLEMENTAL INFORMATION

Reconciliation of Net Earnings attributable to Greenbrier to Adjusted EBITDA (1)

(In thousands, unaudited)

 

     Three Months Ended
November 30,
     Three Months Ended
August 31,
 
     2012      2011      2012  

Net earnings attributable to Greenbrier

   $ 10,427       $ 14,517       $ 7,404   

Interest and foreign exchange

     5,900         5,383         6,236   

Income tax expense

     4,586         7,797         10,593   

Depreciation and amortization

     10,923         9,889         11,768   
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 31,836       $ 37,586       $ 36,001   
  

 

 

    

 

 

    

 

 

 

 

(1)

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

 

     Three Months Ended
November 30, 2012
 

Backlog Activity (units)

  

Beginning backlog

     10,700   

Orders received

     1,400   

Production held as Leased railcars for syndication

     (200

Production sold directly to third parties

     (2,200
  

 

 

 

Ending backlog

     9,700   
  

 

 

 

Delivery Information (units)

  

Production sold directly to third parties

     2,200   

Sales of Leased railcars for syndication

     700   
  

 

 

 

Total deliveries

     2,900   
  

 

 

 


THE GREENBRIER COMPANIES, INC.

 

SUPPLEMENTAL INFORMATION

Calculation of Diluted Earnings Per Share

(In thousands, except per share amounts, unaudited)

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

 

     Three Months Ended
November  30,
     Three Months Ended
August  31,
 
     2012      2011      2012  

Weighted average basic common shares outstanding (1)

     27,144         25,463         27,148   

Dilutive effect of warrants

     802         1,881         756   

Dilutive effect of convertible notes (2)

     6,045         6,045         6,045   
  

 

 

    

 

 

    

 

 

 

Weighted average diluted common shares outstanding

     33,991         33,389         33,949   
  

 

 

    

 

 

    

 

 

 

 

(1) Restricted stock grants are treated as outstanding when issued and are included in weighted average basic common shares outstanding when the Company is in a net earnings position.
(2) The dilutive effect of the 2018 Convertible notes are included as they were considered dilutive under the “if converted” method as further discussed below. The dilutive effect of the 2026 Convertible notes was excluded from the share calculations as the stock price for each period presented was less than the initial conversion price of $48.05 and therefore considered anti-dilutive.

Dilutive EPS was calculated using the more dilutive of two approaches. The first approach includes the dilutive effect of outstanding warrants and shares underlying the 2026 Convertible notes in the share count using the treasury stock method. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes issued in March 2011. Under the “if converted method” debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2026 Convertible notes would only be included in the calculation of both approaches if the current stock price is greater than the initial conversion price of $48.05 using the treasury stock method.

 

     Three Months Ended
November 30,
     Three Months Ended
August  31,
 
     2012      2011      2012  

Net earnings attributable to Greenbrier

   $ 10,427       $ 14,517       $ 7,404   

Add back:

        

Interest and debt issuance costs on the 2018 Convertible notes, net of tax

     1,430         1,376         1,416   
  

 

 

    

 

 

    

 

 

 

Earnings before interest and debt issuance costs on convertible notes

   $ 11,857       $ 15,893       $ 8,820   
  

 

 

    

 

 

    

 

 

 

Weighted average diluted common shares outstanding

     33,991         33,389         33,949   

Diluted earnings per share (1)

   $ 0.35       $ 0.48       $ 0.26   

 

(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


THE GREENBRIER COMPANIES, INC.

 

SUPPLEMENTAL INFORMATION

Reconciliation of Basic Earnings Per Share to Economic Earnings Per Share (1)

(In thousands, except per share amounts, unaudited)

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

 

     Three Months Ended
November 30,
     Three Months Ended
August  31,
 
     2012      2011      2012  

Weighted average basic common shares outstanding

     27,144         25,463         27,148   

Dilutive effect of warrants

     802         1,881         756   
  

 

 

    

 

 

    

 

 

 

Weighted average economic diluted common shares outstanding

     27,946         27,344         27,904   
  

 

 

    

 

 

    

 

 

 

Net earnings attributable to Greenbrier

   $ 10,427       $ 14,517       $ 7,404   

Economic earnings per share

   $ 0.37       $ 0.53       $ 0.27   

 

(1)

Economic EPS is not a financial measure under GAAP. Economic EPS is used to measure the current economic impact of our Convertible Bonds due in 2018 that have a conversion strike price of $38.05/share, which exceeds our current stock price. We define Economic EPS as net earnings attributable to Greenbrier divided by the sum of weighted average basic common shares outstanding, plus the dilutive effect of warrants. This calculation excludes the dilutive effect of the shares underlying the 2018 bonds under the “if converted” method, which is included in the calculation of Diluted EPS. You should not consider Economic EPS in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Economic EPS is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Economic EPS measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

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