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0
NYSE: GBX November 2014
Investor Contact:
Website:
www.gbrx.com
1
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, restructuring plans, 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,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from in the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog and awards are not indicative of our financial results; uncertainty or changes 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, inefficiencies associated with expansion or start-up of production lines or increased production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed our insurance coverage; train derailments or other accidents or claims that could subject us to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other rail car or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings "Risk Factors" and “Forward Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014, 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.
Safe Harbor Statement
2
Leading Integrated Transportation Equipment & Service Provider
Wheels, Repair & Parts FY2014 Revenue: $496 million (22% of Total)
Leasing & Services FY2014 Revenue: $83 million (4% of Total)
Manufacturing FY2014 Revenue: $1.62 billion (74% of Total)
Wheel services and parts reconditioning at 13 U.S. sites
GBW Railcar Services (50/50 JV) providing repair services at 38 sites in North America (incl. 14 tank car certified facilities)
Leading manufacturer of railcars in North America and Europe
As of August 31, 2014, railcar backlog was 31,500 units valued at $3.33 billion
In September and October 2014, received orders for 11,400 units valued at $1.0 billion
Leading domestic manufacturer of ocean-going barges. As of August 31, 2014, marine backlog is valued at approximately $112 million.
Owned fleet 8,500
Managed Fleet 238,000
Transitioned to asset light model in FY 2014
Three business segments working together
$-
$400
$800
$1,200
$1,600
$2,000
$2,400
81 84 87 90 93 96 99 02 05 08 11 14
$ in
mill
ions
Historical Revenue
Manufacturing Wheels, Repair & Parts Leasing & Services
IPO
3
Integrated Business Model
Greenbrier’s integrated business model delivers superior value to customers by creating customized freight car solutions over the entire life of a railcar. Our diversified portfolio of quality products and services enhances our financial performance across the business cycle.
4
Investment Highlights
Attractive Industry Dynamics
• Robust rail cycle driven by current business and industry trends ‒ Forecasted to continue through 2018
• Broadening product demand • Changing tank car regulatory environment
• Greenbrier’s Tank Car of the Future
Unique Strategic Position
• Unique strategic position provides customized solutions • Integrated business model allows for multiple ways to profit
through cycle • Transformational initiatives create growth platform
‒ Enhanced Leasing model ‒ Manufacturing product diversification
Strong Financial Profile
• Diverse revenue and earnings stream • Solid railcar backlog • Financial trends and outlook • Strategic initiatives drive shareholder value
5
Transportation Industry Dynamics Favor Rail
Source: FTR Associates – Rail Equipment Outlook (September 2014)
Rail four times more fuel efficient than trucks
Environmental concerns favor rail
Highway congestion, regulation
and aging highway infrastructure constrain trucking
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
50,000,000
2009
2010
2011
2012
2013
2014
F
2015
F
2016
F
2017
F
2018
F
Rai
l Car
load
ings
N.A. Freight Traffic
6
A Robust Cycle Driving New Railcar Demand
Drivers: Shale oil and gas revolution
‒ Changing tank car regulatory environment
Broader growth in:
‒ Intermodal
‒ Automotive loadings
‒ Commodities
‒ Housing
Slowing railroad velocity
Aging fleet
Strong railroad balance sheets and capital expenditure budgets
2000
2001
2002
2003
2004
2012
2006
2005
2007
2008
2009
2010
2011
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2009
2010
2011
2012
2013
2014
F
2015
F
2016
F
2017
F
2018
F
Uni
ts
North American Railcar Deliveries
Industry forecasts continue to exceed the 20 year average of
50,000 units
Source: FTR Associates – Rail Equipment Outlook (September 2014)
7
Aftermarket Demand Drivers
Wheel demand driven by stabilizing coal traffic, crude oil unit trains and intermodal traffic growth
Increasing ton miles and equipment upgrades drive repair spending
Approaching substantial tank car maintenance cycle
Changing tank car regulatory environment
2000
2001
2002
2003
2004
2012
2006
2005
2007
2008
2009
2010
2011
1,400,000
1,450,000
1,500,000
1,550,000
1,600,000
1,650,000
1,700,000
1,750,000
1,800,000
2009
2010
2011
2012
2013
2014
F
2015
F
2016
F
2017
F
2018
F
U.S. Rail Ton Miles
Source: FTR Associates – Rail Equipment Outlook (September 2014)
8
Leasing Demand Drivers
Strong lease market as users seek flexibility and financial institutions seek yield
Trend of increasing private (“leasing / shipping companies”) railcar ownership expected to continue
2000
2001
2002
2003
2004
2012
2006
2005
2007
2008
2009
2010
2011
Source: AAR – Railroad Equipment Outlook (August 2014)
52% 39%
4% 4%
4%
44% 57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Historical N.A. Railcar Fleet Ownership
Railroads TTX Private100% = 1.5 million railcars (2005-1.51 million & 2014-1.52 million)
9
A Cycle is not a Cycle / All Railcars are not Alike
Demand across broadening range of railcars
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2011A 2012A 2013A 2014F 2015F 2016F 2017F 2018F
Un
its
Other hoppers / gondolas
Coal
Flat cars (auto)
Intermodal
Tanks
Boxcar
Covered hopper
Source: FTR Associates – Rail Equipment Outlook (September 2014)
10
Tank car deliveries achieved a record level in 2013
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Historical Tank Car Deliveries
Source: RSI ARCI
15 Year Average
Current strong build reflects crude-by-rail traffic increase. Expected regulatory changes will drive continued high demand.
11
Estimated North American Tank Car Fleet
335,000 Total Tank
Cars
272,000 DOT-111
Non-Pressurized
252,000 Pre-Petition
96,000 Non-
Hazardous
58,000 Crude & Ethanol
23,000 Other
Flammable
75,000 Other
Hazardous
20,000 Petition
2,000 Non-
Hazardous
15,000 Crude & Ethanol
3,000 Other
Flammable
63,000 Pressurized
Source: DOT NPRM June 2014, RSI, AAR
“Pre-Petition” represents tank cars ordered prior to October 2011 built to the long-established industry standard. “Petition” represents the current industry standard voluntarily adopted by AAR, for cars ordered after October 2011.
12
Current Key Tank Car Differences
Pre-petition cars reflect the current government tank car standards (adopted in 1971). Petition cars refer to the P-1577 standards that were adopted by AAR circular CPC-1232 for all cars ordered after October 1, 2011 (also known as “Good Faith” cars).
Source: GBX Engineering 12
Tank Type Pre-Petition Petition Code DOT-111 CPC-1232
Effective Date (new cars) Nov-71 Oct-11
Max Gross Rail Load 263,000 286,000
Normalized Steel Heads & Shells No Yes
Half-Inch Head Shields No Half or Full Height
Head & Shell Thickness 7/16 inch 7/16 to 1/2 inch*
Top Fittings Protection No Yes
Half-Inch Ceramic Insulation No No
Steel Jackets Some Some
High Flow Pressure Relief Valve No Some
Improved BOV Handle No No *Depends on jacketing
13 13
14
Greenbrier’s Tank Car of the Future - Safer at Any Speed
HM-251 Tank Car of Future 8x less likely to breach
HM-251 Tank Car of Future 2x less likely to breach
15
DOT Retrofit Summary
Packing Group Categories Risk Profile Out of service by: Packing Group 1 (predominance of crude) Great Danger Oct. 1, 2017
Packing Group 2 (some Crude, all Ethanol) Medium Danger Oct. 1, 2018
Packing Group 3 (flammable items not in PG1 or PG 2) Minor Danger Oct. 1, 2020
Under the current DOT proposal, existing DOT-111 and CPC-1232 cars could be retrofitted to the new standard, with the exception of the ‘added top fitting protection’ which is deemed not economically beneficial. Below is the current proposed timing of the elimination of the existing DOT-111 fleet in flammable service.
Source: DOT NPRM “Enhanced Tank Car Standards & Operational Controls for High-Hazard Flammable Trains”
Retrofit Option Est. Cost Bottom Outlet Valve Handle $1,200
High Flow Pressure Relief Valve $1,500
New Truck $16,000
Thermal Protection $4,000
Full Jacket $23,000
Full Height Head Shield $17,500
Added Top Fitting Protection* $24,500
ECP Brakes $5,000
Total (*excl. Top Fitting Protection) $68,200
Per the DOT proposal, it is expected that retrofits to DOT-111 and CPC-1232 cars could range between $26,000 - $33,000.
It should be noted that the costs are estimates and actual costs will vary. Also, there is substantial diversity within the tank car classes and not all cars will need the same type of retrofitting.
16 16
17
Improves competitive position due to diverse product mix at lower-cost, flexible manufacturing facilities
Expands available market by increasing throughput and diversifying product portfolio while maintaining the quality customers demand
Diversifies business mix by expanding repair and wheel maintenance business - large aftermarket business provides stability throughout business cycles
Enhances leasing activities, capturing more value throughout the railcar life cycle
Transformational Initiatives Create Growth Platform
Greenbrier is well-positioned to benefit from numerous tailwinds. Our diversified business model leaves Greenbrier relatively well-insulated from any major potential headwinds.
18
Strategic Initiatives Lead to Diversified Revenue Streams
$749 (79%)
$1,625 (74%) $102 (11%)
$496 (22%)
$92 (10%)
$83 (4%)
$943
$2,204
$-
$500
$1,000
$1,500
$2,000
$2,500
2006 2014
$ in
mill
ions
(%
of
Tota
l Rev
enue
)
Manufacturing WR&P Leasing & Services
Greenbrier’s revenue has more than doubled since the prior new railcar delivery peak in 2006.
GBX NA Share*: 2006 – 13% 2014 – 23% *Management estimate - based on calendar year deliveries. Greenbrier’s North America share for 2014 is YTD through September 30, 2014. 2014 Revenue numbers are as of August 31, 2014.
19
Solid Railcar Backlog ($ in millions except per unit values)
Backlog Units 13,400 5,300 15,400 10,700 14,400 31,500
FY 2014 orders totaled 34,300 railcar units valued at $3.42 billion. In September and October 2014, Greenbrier has received orders for an additional 11,400 units valued at approximately $1 billion.
$1,160
$420
$1,230 $1,200 $1,520
$3,330
$87
$79 $80
$112 $106 $106
$-
$20
$40
$60
$80
$100
$120
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Aug. 09 Aug. 10 Aug. 11 Aug. 12 Aug. 13 Aug. 14
Average Sales P
rice/Un
it ($ in
thou
sands) B
ackl
og V
alu
e ($
in m
illio
ns)
20
2006 Backlog by Builder 2006 Backlog by Car Type
Historical Industry Backlog – 2006 (Prior Peak)
GBX, 15%
ARI, 20%
RAIL, 11%
TRN, 42%
Others, 13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
100% = 85,826 units
Covered Hoppers,
31%
Open Hoppers,
7% Gondolas, 10%
Tank Cars, 42%
Flat Cars, 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
100% = 85,826 units
21
Backlog by Builder Backlog by Car Type
Current Industry Backlog – September 2014
GBX, 29%
ARI, 9%
RAIL, 11%
TRN, 42%
Others, 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
100% = 124,437 units
Covered Hoppers,
43%
Tank Cars, 41%
Flat Cars, 9%
Other*, 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
100% = 124,437 units
*Other car types include box cars, gondolas and open hoppers
22
Strategic Initiatives Update & Future Goals
Prior Goals Focus Area Goal Status Actions
Gross Margin Enhancement
Minimum 13.5% by 4Q FY 2014
Q4 FY 2014 aggregate gross margin reached 17.2%. FY 2014 aggregate gross margin 14.6%.
Capital Efficiency Liberate $100
million by 2Q FY 2014
Net debt decreased $149 million since February 2013.
Fix/Sell/Close Take action as needed
Formed GBW- 50/50 joint venture with Watco Companies, LLC. Closed 6 underperforming facilities.
New Goals
Gross Margin Enhancement
Aggregate gross margin of at least 20% by the second half of FY 2016
ROIC At least 25% by the second half of FY 2016
23
Consolidated Financial Trends ($ in millions)
$2,204
$-
$400
$800
$1,200
$1,600
$2,000
$2,400
2009 2010 2011 2012 2013 2014 2015
Revenue
16,200
0
4
8
12
16
20
2009 2010 2011 2012 2013 2014 2015
Deliveries (Units)
7.7x
5.5x 4.6x
2.7x 2.0x
1.1x
0.0x
2.0x
4.0x
6.0x
8.0x
2009 2010 2011 2012 2013 2014
Net Debt(2) to Adj. EBITDA(1)
(1) Adjusted EPS & Adjusted EBITDA exclude gain on contribution to GBW, restructuring charges, goodwill impairment and other special items
(2) Net debt is defined as Gross debt plus debt discount less Cash
$3.07
$(1.00)
$-
$1.00
$2.00
$3.00
$4.00
2009 2010 2011 2012 2013 2014 2015
Adjusted EPS(1)
FY 2015 Revenue to exceed $2.5
billion Deliveries to
exceed 20,000 units
FY 2015 Guidance = $4.25 – 4.55
We expect the downward trend to continue in
FY 2015
24
Net Funded Debt(2) / Adjusted EBITDA(1)
Strong Balance Sheet and Liquidity Provide Flexibility
Liquidity Summary ($ in millions)
24
(1) Adjusted EBITDA exclude gain on contribution to GBW, restructuring charges, goodwill impairment and other special items
(2) Net debt is defined as funded debt less cash
7.7x
5.5x
4.6x
2.7x
2.0x
1.1x
2009 2010 2011 2012 2013 2014
$105 $105
$192
$299 $304 $321 $76 $99
$50
$54 $97
$185
$181 $204
$242
$353
$401
$506
2009 2010 2011 2012 2013 2014
25
Diversified Revenue Streams
Strong Balance Sheet & Liquidity
Solid Railcar Backlog
Strong balance sheet and positive free cash flow trend
Clear Path to Growth and Shareholder Value
Positive trends in average sales price and continued strength in new orders
Unique model that enhances financial performance across the cycle, with powerful cross selling opportunities
Strategic Initiatives
Initiatives to improve gross margins and capital efficiency
26
NYSE: GBX November 2014
Investor Contact:
Website:
www.gbrx.com
27
APPENDIX
28
4Q FY 2014 Key Metrics Highlights
Backlog 31,500 units valued at $3.33 billion
−Received orders of 10,400 units in Q4 valued at
$1.06 billion
−Broad range of car types including automotive,
small and medium cube covered hoppers, and
tank cars
−Less than 40% of backlog are tank cars
Orders for an additional 11,400 units valued
at $1 billion received after August 31, 2014
Delivery of 4,800 units
−Includes 1,100 units syndicated through Leasing
3,500 3,700 3,400 4,300
4,800
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Total Deliveries
700
400
700 900
1,100
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Syndicated Deliveries
14,400 13,500 15,200
26,400 31,500
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Backlog
29
4Q FY 2014 Income Statement Highlights
Revenue of $618.1 million
−Record revenue reflects higher deliveries
Gross margin of 17.2%
−Record gross margin driven by production
efficiencies, leasing strategy, product mix and
pricing
Adjusted EBITDA of $80.8 million*
−Strong operating performance
−Adjusted EBITDA margin of 13.1%
Diluted EPS of $1.03* $0.69
$0.51 $0.51
$1.03 $1.03
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Diluted EPS*
$52.1 $50.0 $44.9
$78.0 $80.8
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Adjusted EBITDA* ($ millions)
$484.2 $490.4 $502.2 $593.3 $618.1
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Revenue ($ millions)
*Excludes Restructuring charges in 4Q FY13 and FY14 and gain on contribution to GBW in 4Q FY14.
30
4Q FY 2014 Balance Sheet & Cash Flow Highlights
Strong Positive Free Cash Flow −Increased capital expenditures, railcars held for syndication and tax payments resulted in lower free cash flow in 4Q
−Available liquidity exceeds $505 million
Board declares quarterly dividend of $0.15 per share
Cumulatively through October 30, 2014, repurchased 1,017,562 shares of common stock,
−Completed $50 million share repurchase program announced October 2013
New $50 million repurchase program announced
Net Funded Debt has decreased $149 million since February 2013, the baseline of the margin and capital efficiency targets
- - -
$0.15 $0.15
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Dividends
$141.3 $176.7 $196.1 $217.3
$133.9
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
LTM Free Cash Flow Generated* ($ millions)
*Excludes Restructuring charges in 4Q FY 2013 and FY 2014 and gain on contribution to GBW in 4Q FY 2014.
$324.7 $330.2 $254.2 $266.7 $273.3
4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Net Funded Debt ($ millions)
31
Build-to-Order Sales Customer orders railcar it desires
to purchase
We build railcar
We deliver product and recognize revenue and margin in Manufacturing segment
Underwriting & Syndication Customer orders railcar it desires to lease
We build railcar subject to lease
We temporarily hold assets / may cross multiple quarter ends − “Railcars held for syndication”
We earn lease revenue − Included in Leasing segment
We sell (“syndicate”) railcar lease transactions to third parties (e.g. Mitsubishi UFJ Lease & Finance) seeking income streams − Revenue recognized in Manufacturing segment
We earn management fees on railcars post sale − Included in Leasing segment
Two Ways to Sell New Railcars
32
Manufacturing
Quarterly Trends
Revenue and Gross Margin % FY 15 Outlook
• Revenue growth driven by increased deliveries and Marine activity
• Margin increase continues to reflect improved efficiencies and favorable product mix including more marine production
• Marine backlog as of August 31, 2014 totaled approximately $112 million
• Deliveries to exceed 20,000 units
• Capital expenditures are expected to be approximately $95 million in FY 2015, primarily related to capacity projects in Mexico, enhanced vertical integration and efficiency enhancements. Capacity projects include doubling of tank car capacity and moving from a leased facility to a lower cost owned facility.
• Substantial syndication volume increase
($ in millions) 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Revenues $351.7 $359.5 $347.8 $425.6 $492.1
Gross Margin $43.3 $48.0 $41.2 $73.8 $87.9 Gross Margin % 12.3% 13.4% 11.8% 17.3% 17.9%
Operating Margin % 8.6% 10.7% 8.7% 14.4% 14.8%
Capital Expenditures $8.8 $3.9 $6.2 $14.7 $31.2 Railcar Backlog $1,520 $1,430 $1,540 $2,750 $3,330
Backlog (units) 14,400 13,500 15,200 26,400 31,500 Deliveries (units) 3,500 3,700 3,400 4,300 4,800
4Q Business Conditions
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2010 2011 2012 2013 2014
$ in
mill
ions
Revenue Margin
33
Wheels, Repair & Parts
Quarterly Trends
Revenue and Gross Margin % FY 15 Outlook
• XX • XX • XX
• Formed GBW Railcar Services, LLC, 50/50 joint venture with Watco Companies, LLC focused on retrofitting, refurbishing and repairing railcars through 38 shop network, including 14 tank car certified facilities
• Revenue decline primarily attributable to contribution of repair operation to unconsolidated GBW in July
• Gross margin % decline due to operating inefficiencies
• Operating margin includes a $29.0 million pre-tax non-cash gain on contribution to GBW
• Capital expenditures are expected to be approximately $10 million in FY 2015
• Improved operating efficiencies and performance
• Greenbrier will account for its interest in GBW under the equity method of accounting – GBW will not be consolidated in Greenbrier’s financial statements
($ in millions) 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14
Revenues $114.0 $113.4 $136.5 $140.7 $105.0
Gross Margin $7.6 $5.4 $8.6 $10.8 $6.8
Gross Margin % 6.7% 4.8% 6.3% 7.7% 6.5%
Operating Margin % (0.1%) (0.3%) 2.6% 3.9% 30.3%*
Capital Expenditures $1.6 $1.6 $1.7 $2.5 $3.0
4Q Business Conditions
0%
2%
4%
6%
8%
10%
12%
$-
$100
$200
$300
$400
$500
$600
2010 2011 2012 2013 2014
$ in
mill
ions
Revenue Margin
*Excluding gain on contribution to GBW, operating margin is 2.7% for Q4 FY 2014.
34
Leasing & Services
Quarterly Trends
Revenue and Gross Margin % FY 15 Outlook
• 4Q FY 2014 in line with normalized revenue trends. 3Q FY 2014 revenue included syndication of third party produced railcars
• Margin % increase reflects improved performance of owned fleet
• Continued growth of Syndication and Management Services activity
• Net capital expenditures are expected to be approximately $25 million in FY 2015 (Gross capital expenditures of $35 million, including corporate expenditures, offset by equipment proceeds of approximately $10 million)
($ in millions) 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 Revenues $18.5 $17.5 $17.9 $27.0 $21.0 Gross Margin $9.4 $8.1 $8.1 $12.2 $11.3
Gross Margin % 50.7% 46.3% 45.0% 45.1% 53.7% Operating Margin % 82.5% 49.6% 53.8% 53.9% 38.9% Net Capital Expenditures ($35.0) ($13.0) ($12.5) ($10.0) ($13.3)
Lease Fleet Utilization 97.4% 97.0% 97.6% 97.9% 98.2%
Owned Fleet (units) 8,600 8,300 8,400 8,300 8,600
Managed Fleet (units) 224,000 231,000 233,000 235,000 238,000
4Q Business Conditions
38%
40%
42%
44%
46%
48%
50%
52%
$-
$20
$40
$60
$80
$100
2010 2011 2012 2013 2014
$ in
mill
ions
Revenue Margin
35
August 31, 2013
August 31, 2014
Corporate & Manufacturing:
Revolving facilities $ 48 $ 13
Senior convertible notes 245 245
Other term loans 3 2
296 260
Less: Cash (97) (185)
Net Corp & Manufacturing Debt $ 199 $ 75
Leasing term loan(1) 126 198
Total Net Debt $ 325 $ 273
Equipment on operating lease
$ 305 $ 259
Leasing debt as % of Equipment on operating lease 41% 76%
Debt Summary ($ in millions)
(1) Recourse to leasing subsidiary only.
The March 2014 refinancing of ~$125 million senior term debt secured by railcars on lease with new six-year $200 million senior term debt more appropriately leverages the lease fleet and reduces net Corporate and Manufacturing debt to $75 million.
36
Quarterly Adjusted EBITDA Reconciliation
Supplemental Disclosure Reconciliation of Net Earnings (loss) to Adjusted EBITDA
(In millions, unaudited) Quarter Ending
Aug. 31, 2013
Nov. 30, 2013
Feb. 28, 2014
May 31, 2014
Aug. 31, 2014
Net earnings (loss) $23.3 $23.0 $20.5 $46.1 $60.1
Interest and foreign exchange 4.0 4.7 4.1 5.4 4.4
Income tax expense 12.2 10.5 9.9 16.3 35.7
Depreciation and amortization 9.9 10.9 9.9 10.1 9.6
Gain on contribution to GBW - - - - (29.0)
Restructuring charges 2.7 0.9 0.5 0.1 -
Adjusted EBITDA $52.1 $50.0 $44.9 $78.0 $80.8
See slide 39 for definition of Adjusted EBITDA
37
Annual Adjusted EBITDA Reconciliation
Supplemental Disclosure Reconciliation of Net Earnings (loss) to Adjusted EBITDA
(In millions, unaudited) Year Ending August 31,
2009 2010 2011 2012 2013 2014
Net earnings (loss) ($57.9) $8.3 $8.4 $61.2 ($5.4) $149.8
Interest and foreign exchange 45.9 45.2 37.0 24.8 22.2 18.7
Income tax expense (benefit) (16.9) (0.9) 3.5 32.4 25.1 72.4
Depreciation and amortization 37.6 37.5 38.3 42.4 41.4 40.4
Goodwill impairment 55.7 - - - 76.9 -
Gain on contribution to GBW - - - - - (29.0)
Loss (gain) on debt extinguishment - (2.1) 15.7 - - -
Special items - (11.9) - - 2.7 1.5
Adjusted EBITDA $64.4 $76.1 $102.9 $160.8 $162.9 $253.8
See slide 39 for definition of Adjusted EBITDA
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Annual Adjusted EPS Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (loss) Attributable to Greenbrier to Net Earnings Excluding Goodwill Impairment, Gain on Contribution to GBW, Loss (gain) on Debt extinguishment and Special Items
(In millions, except per share amounts, unaudited) Year Ending August 31,
2009 2010 2011 2012 2013 2014
Net earnings (loss) attributable to Greenbrier ($56.4) $4.3 $6.5 $58.7 ($11.1) $111.9
Goodwill impairment 51.0 - - - 71.8 -
Gain on contribution to GBW (after-tax) - - - - - (13.6)
Loss (gain) on debt extinguishment (after-tax) - (1.3) 9.4 - - -
Special items (after-tax) - (11.9) - - 1.8 1.0
Adjusted Net Earnings (loss) ($5.4) ($8.9) $15.9 $58.7 $62.5 $99.3
Weighted average diluted shares outstanding 16.8 20.2 26.5 33.7 34.2 34.2
Adjusted Diluted EPS ($0.32) ($0.44) $0.60 $1.91 $2.00 $3.07
See slide 39 for definition of Adjusted EPS
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Net earnings excluding restructuring charges and gain on contribution to GBW, Adjusted EBITDA, and Diluted earnings per share excluding restructuring charges and gain on contribution to GBW are not financial measures under generally accepted accounting principles (GAAP). We define Net earnings excluding restructuring charges and gain on contribution to GBW as Net earnings before restructuring charges (after-tax) and gain on contribution to GBW (after-tax). We define Adjusted EBITDA as Net earnings attributable to Greenbrier before interest and foreign exchange, income tax expense, restructuring charges, gain on contribution to GBW and depreciation and amortization. We define Diluted earnings per share excluding restructuring charges and gain on contribution to GBW as Net earnings excluding restructuring charges and gain on contribution to GBW before interest and debt issuance costs (net of tax) on convertible notes divided by Weighted average diluted common shares outstanding. Net earnings excluding restructuring charges and gain on contribution to GBW, Adjusted EBITDA, and Diluted earnings per share excluding restructuring charges and gain on contribution to GBW are performance measurement tools used by Greenbrier. You should not consider Net earnings excluding restructuring charges and gain on contribution to GBW, Adjusted EBITDA, and Diluted earnings per share excluding restructuring charges and gain on contribution to GBW in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA and Diluted earnings per share excluding restructuring charges and gain on contribution to GBW are not measures of financial performance under GAAP and are susceptible to varying calculations, the Adjusted EBITDA and Diluted earnings per share excluding restructuring charges and gain on contribution to GBW measures presented may differ from and may not be comparable to similarly titled measures used by other companies.
Adjusted Financial Metric Definition