Executive Summary
We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts;
and Leasing & Services. 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 rail industry in North America. The Leasing & Services
segment owns approximately 9,300 railcars and provides management services for
approximately 385,000 railcars for railroads, shippers, carriers, institutional
investors and other leasing and transportation companies in North America as of
November 30, 2019. Through unconsolidated affiliates we produce rail and
industrial components and have an ownership stake in a railcar manufacturer in
Brazil and a lease financing warehouse.
Our total manufacturing backlog of railcar units, for direct sale or lease to a
third party, as of November 30, 2019 was approximately 28,500 units with an
estimated value of $3.09 billion. Approximately 4% of backlog units and 2% of
estimated backlog value as of November 30, 2019 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 backlog.
Marine backlog as of November 30, 2019 was $80 million.
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. Subsequent to the quarter, we agreed in principle to remove
575 units in backlog in exchange for financial consideration. 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.

                                       25

--------------------------------------------------------------------------------


                                                  THE GREENBRIER COMPANIES, INC.

Three Months Ended November 30, 2019 Compared to Three Months Ended November 30,
2018
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.

                                                                  Three Months Ended
                                                                     November 30,
(In thousands)                                                   2019            2018
Revenue:
Manufacturing                                                  $ 657,367       $ 471,789
Wheels, Repair & Parts                                            86,608         108,543
Leasing & Services                                                25,384          24,191

                                                                 769,359         604,523
Cost of revenue:
Manufacturing                                                    581,912         417,805
Wheels, Repair & Parts                                            81,892         100,978
Leasing & Services                                                13,366          13,207

                                                                 677,170         531,990
Margin:
Manufacturing                                                     75,455          53,984
Wheels, Repair & Parts                                             4,716           7,565
Leasing & Services                                                12,018          10,984

                                                                  92,189          72,533
Selling and administrative                                        54,364          50,432
Net gain on disposition of equipment                              (3,959 )       (14,353 )

Earnings from operations                                          41,784          36,454
Interest and foreign exchange                                     12,852           4,404

Earnings before income taxes and earnings from
unconsolidated affiliates                                         28,932          32,050
Income tax expense                                                (5,994 )        (9,135 )

Earnings before earnings from unconsolidated affiliates           22,938          22,915
Earnings from unconsolidated affiliates                            1,073             467

Net earnings                                                      24,011          23,382
Net earnings attributable to noncontrolling interest             (16,342 )        (5,426 )

Net earnings attributable to Greenbrier                        $   7,669       $  17,956

Diluted earnings per common share                              $    0.23       $    0.54

Performance for our segments is evaluated based on Earnings from operations (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.



                             Three Months Ended
                                November 30,
(In thousands)               2019          2018
Operating profit (loss):
Manufacturing              $  53,143     $  36,855
Wheels, Repair & Parts         1,114         3,247
Leasing & Services             9,777        17,513
Corporate                    (22,250 )     (21,161 )

                             $41,784       $36,454





                                       26

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses