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What changed in GREENBRIER COMPANIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GREENBRIER COMPANIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+294 added−304 removedSource: 10-K (2024-10-24) vs 10-K (2023-10-25)

Top changes in GREENBRIER COMPANIES INC's 2024 10-K

294 paragraphs added · 304 removed · 243 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+12 added−14 removed38 unchanged
Biggest changeCompetition We are currently one of the two largest railcar manufacturers in North America. There are also a handful of specialty builders who focus on niche markets. We believe that in Europe we are in the top tier of railcar manufacturers. Through our 60% ownership interest in Greenbrier-Maxion, we are a leading railcar manufacturer in South America.
Biggest changeNo other suppliers accounted for more than 10% of total inventory purchases. We believe we maintain good relationships with our suppliers. Competition We believe we are currently one of the two largest railcar manufacturers in North America. There are also a handful of specialty builders who focus on niche markets.
However, claims asserted against us for work-related illnesses or injury and the further adoption of occupational safety and health regulations in the U.S. or in foreign jurisdictions in which we operate could increase our operating costs.
However, claims asserted against us for work-related illnesses or injury and the further adoption of occupational safety and health regulations in the U.S. or foreign jurisdictions in which we operate could increase our operating costs.
Many European railroads are state-owned and are subject to European Union (EU) regulations covering the tender of government contracts. In Brazil, the government grants long-term concession contracts to private companies to operate and invest in Brazil’s freight rail network. Through our research and customer relationships, insights are derived into the potential need for new products and services.
Many European railroads are state-owned and are subject to European Union (EU) regulations covering the 7 tender of government contracts. In Brazil, the government grants long-term concession contracts to private companies to operate and invest in Brazil’s freight rail network. Through our research and customer relationships, insights are derived into the potential need for new products and services.
Our sustainable conversions are an efficient, environmentally sustainable and cost-savings option for railcar owners looking to diversify and optimize their fleets. We rebody or stretch covered hoppers into larger cubic service, re-rack or perform deck conversion on auto racks, and perform tank car retrofits to help customers manage pending regulations.
Our sustainable conversions are an efficient and cost-savings option for railcar owners looking to diversify and optimize their fleets. We rebody or stretch covered hoppers into larger cubic service, re-rack or perform deck conversion on auto racks, and perform tank car retrofits to help customers manage pending regulations.
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. Automotive - We manufacture a full line of railcar equipment specifically designed for the transportation of light vehicles.
The double-stack railcar is designed to 4 transport containers stacked two-high on a single platform and provides significant operating and capital savings over other types of intermodal railcars. Automotive - We manufacture a full line of railcar equipment specifically designed for the transportation of light vehicles.
Occupational Safety and Health Administration (OSHA) and the Secretaria del Trabajo y Prevision Social (STPS) in Mexico. We believe that we employ appropriate precautions to protect our employees and others from workplace injuries and harmful exposure to 10 materials handled and managed at our facilities.
Occupational Safety and Health Administration (OSHA) and the Secretaria del Trabajo y Prevision Social (STPS) in Mexico. We believe that we employ appropriate precautions to protect our employees and others from workplace injuries and harmful exposure to materials handled and managed at our facilities.
While we do not anticipate having to make material expenditures in order to remain in substantial compliance with health and safety laws and regulations, we are unable to predict the ultimate cost of compliance.
While we do not anticipate having to make material expenditures to remain in substantial compliance with health and safety laws and regulations, we are unable to predict the ultimate cost of compliance.
Item 1. B USINESS Introduction We are one of the leading designers, manufacturers and marketers of railroad freight car equipment in North America, Europe, South America and other geographies as opportunities arise. We offer railcar management, regulatory compliance services and leasing services to railcar owners or other users of railcars in North America.
Item 1. B USINESS Introduction We are one of the leading designers, manufacturers and marketers of railroad freight car equipment and services in North America, Europe, and South America and may enter other geographies as opportunities arise. We offer railcar management, regulatory compliance and leasing services to railcar owners or other users of railcars in North America.
Our integrated model allows us to develop cross-selling opportunities and synergies among our various operating segments thereby enhancing our margins. We believe our integrated model is difficult to duplicate and provides greater value for our customers and investors. We operate in three reportable segments: Manufacturing; Maintenance Services; and Leasing & Management Services.
Our integrated model allows us to develop cross-selling opportunities and synergies among our reportable segments thereby enhancing our margins. We believe our integrated model is difficult to duplicate and provides greater value for our customers and investors. We operate in three reportable segments: Manufacturing; Maintenance Services; and Leasing & Management Services.
Sale of Portland Property We sold the Portland Property in May 2023, but remain potentially liable with respect to the above matters. Any of these matters could adversely affect our business and Consolidated Statements of Income.
Sale of Portland Property We sold the Portland Property in May 2023, but remain potentially liable with respect to the above matters. Any of these matters could adversely affect our business and Consolidated Financial Statements.
Our management services business is responsible for the maintenance and administration of our fleet of railcars. Unconsolidated Affiliates U.S. Axle Manufacturing - We have a 41.9% interest in Axis, LLC (Axis), a joint venture that manufactures and sells axles to its joint venture partners for use and distribution both domestically and internationally.
Our management services business is responsible for the maintenance and administration of our fleet of railcars. 5 Unconsolidated Affiliates United States (U.S.) Axle Manufacturing - We have a 41.9% interest in Axis, LLC (Axis), a joint venture that manufactures and sells axles to its joint venture partners for use and distribution both domestically and internationally.
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, 96 parties, including the State of Oregon and the federal government, are participating in a non-judicial, mediated allocation process to try to allocate costs associated with remediation of the Portland Harbor Site.
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, approximately 100 parties, including the State of Oregon and the federal government, are participating in a non-judicial, mediated allocation process to try to allocate costs associated with remediation of the Portland Harbor Site.
Backlog The following table depicts our reported railcar backlog subject to third party sale or lease in number of railcars and estimated future revenue value attributable to such backlog, at the dates shown: August 31, 2023 2022 2021 New railcar backlog units 1 30,900 29,500 26,600 Estimated future revenue value (in millions) 2 $ 3,810 $ 3,480 $ 2,810 1 Each platform of a railcar is treated as a separate unit. 2 Subject to change based on finalization of product mix.
Backlog The following table depicts our reported railcar backlog subject to third-party sale or lease in number of railcars and estimated future revenue value attributable to such backlog, at the dates shown: August 31, 2024 2023 2022 New railcar backlog units 1 26,700 30,900 29,500 Estimated future revenue value (in millions) 2 $ 3,380 $ 3,810 $ 3,480 1 Each platform of a railcar is treated as a separate unit. 2 Subject to change based on finalization of product mix.
Department of Transportation (USDOT) and the administrative agencies it oversees including the Federal Railroad Administration (FRA), the Pipeline and Hazardous Materials Safety Administration (PHMSA), and the Department of Homeland Security (DHS) in the U.S. and Transport Canada (TC) in Canada, each of which administer and enforce laws and regulations relating to railroad safety.
Department of Transportation (USDOT), and the administrative agencies it oversees, including the Federal Railroad Administration (FRA), the Pipeline and Hazardous Materials Safety Administration (PHMSA), in the U.S. and Transport Canada (TC) in Canada, each of which administer and enforce laws and regulations relating to railroad safety.
Our automotive offerings include the Auto-Max II, Multi-Max and Multi-Max Plus products, which are designed to carry automobiles, CUVs, SUVs, trucks and high sided vans efficiently. 4 Sustainable Conversions - We are a leading designer and manufacturer of sustainable conversions, which repurposes existing railcars into new equipment service.
Our automotive offerings include the Auto-Max ® II, Multi-Max TM and Multi-Max Plus TM products, which are designed to carry automobiles, CUVs, SUVs, trucks and high sided vans efficiently. Sustainable Conversions TM - We are a leading provider of sustainable conversions, which repurposes existing railcars into new equipment service.
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).
Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting the Portland Property, as a federal "National Priority List" or "Superfund" site due to sediment contamination (the Portland Harbor Site).
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. The EPA has identified several Sediment Decision Units within the ROD cleanup area.
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. The EPA has identified several work areas within the ROD cleanup area.
In the next year, we expect new regulations related to recently passed laws that prescribe disclosure of the geographic origin of components of new railcars before new railcars are granted access to the rail interchange system in the United States. Our operations are subject to regulation of health and safety matters by the U.S.
In the ensuing months, we expect new regulations related to recently passed laws that prescribe disclosure of the geographic origin of components of new railcars before new railcars are granted access to the rail interchange system in the United States. Our operations are subject to health and safety regulations by the U.S.
Although the number of alternative suppliers of certain specialty components has declined in recent years, there are at least two available suppliers for substantially all of our components. 6 Certain materials and components are periodically in short supply which could potentially impact production at our facilities.
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 substantially all of our components. Certain materials and components are periodically in short supply which could potentially impact production at our facilities.
However, any contamination or exacerbation of contamination that occurs after the sale of the property will be the liability of the current and future owners and operators of the Portland Property. Regulation We must comply with the rules of the U.S.
However, any contamination or exacerbation of contamination that occurs after the sale of the property will be the liability of the current and future owners and operators of the Portland Property. 10 Regulation We must comply with the rules of the Department of Homeland Security (DHS) and the U.S.
The percentage of owned units on lease was 98.3% at August 31, 2023 with an average remaining lease term of 3.9 years and an average age of 7.5 years. We also originate leases of railcars, which are either newly built or refurbished by our operations.
The percentage of owned units on lease was 98.5% at August 31, 2024 with an average remaining lease term of 4.0 years and an average age of 6.5 years. We also originate leases of railcars, which are either newly built or refurbished by our operations.
We have not signed an AOC in connection with remedial design, but we are assisting in funding a portion of the RM9W remedial design. 9 The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties.
Some parties have signed AOCs, including one party with respect to RM9W. We have not signed an AOC in connection with remedial design, but we are assisting in funding a portion of the RM9W remedial design. The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties.
Approximately 3% of backlog units and 2% of estimated value as of August 31, 2023 was associated with our Brazilian manufacturing operation which are accounted for under the equity method. Based on current production schedules, approximately 21,500 units in the August 31, 2023 backlog are scheduled for delivery in 2024.
Approximately 3% of backlog units and estimated value as of August 31, 2024 was associated with our Brazilian railcar manufacturing operations, which are accounted for under the equity method. Based on current production schedules, approximately 18,600 units in the August 31, 2024 backlog are scheduled for delivery in 2025.
The balance of the production is scheduled for delivery into 2026. Our backlog includes $970 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Multi-year supply agreements are a part of rail industry practice.
The remaining balance of the production is scheduled for delivery in 2026 and beyond. Our backlog includes approximately $590 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet, depending on a variety of factors.
Our shops perform routine railcar maintenance for third parties and for our leased and managed railcar fleets. Component Parts Manufacturing - Our component parts facilities recondition and manufacture railcar cushioning units, couplers, yokes, side frames, bolsters and various other parts.
Our shops perform routine railcar maintenance for third parties and for our leased and managed railcar fleets. Component Parts Manufacturing - Our component parts facilities recondition and manufacture railcar cushioning units, couplers, yokes, side frames, bolsters and various other parts. In September 2024, the Company combined the Maintenance Services segment within the Manufacturing segment.
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.
No other customers accounted for greater than 10% of Consolidated 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.
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 and the National Agency of Ground Transportation.
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 is overseen by the Ministry of Transportation and the National Agency of Ground Transportation. In all other countries, we conform to country-specific regulations where applicable.
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. Customers Customers across our segments include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies.
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. Customers Customers across our reportable segments include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies. We have strong, long-term relationships with many of our customers.
Competition in the Maintenance Services businesses is dependent on the type of product or service provided. There are many competitors in these businesses. We compete primarily on the basis of quality, timeliness of delivery, customer service, location of shops, price and engineering expertise.
In all railcar markets that we serve, we compete on the basis of quality, price, timeliness of delivery, innovative product design, reputation and customer service. Competition in the Maintenance Services businesses is dependent on the type of product or service provided. There are many competitors in these businesses.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov .
Additional Information We are a public reporting company and file annual, quarterly, current and special reports, proxy statements and other information with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
We have obtained a number of U.S. and non-U.S. patents of varying duration, and pending patent applications, registered trademarks, copyrights and trade names. We believe that manufacturing expertise, the improvement of existing technology and the development of new products are important in addition to patent protection, in establishing and maintaining a competitive advantage in our market.
We believe that manufacturing expertise, the improvement of existing technology and the development of new products are important in addition to patent protection, in establishing and maintaining a competitive advantage in our market.
Amsted-Maxion 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 components, all of which are presented in Investment in unconsolidated affiliates on the Consolidated Balance Sheets.
Other Unconsolidated Affiliates - We have other unconsolidated affiliates which primarily include joint ventures that produce rail and industrial components, all of which are presented in Investment in unconsolidated affiliates on the Consolidated Balance Sheets.
Our relationships with financial institutions and operating lessors combined with our ownership of a lease fleet of approximately 13,400 railcars enables us to offer flexible financing programs to our customers including operating leases of varied intervals and “per diem” leases.
Leasing & Management Services Segment Leasing - We operate a railcar leasing business in North America. Our relationships with financial institutions and operating lessors combined with our ownership of a lease fleet of approximately 15,500 railcars enables us to offer flexible leases to our customers including operating leases of varied intervals and “per diem” leases.
We have strong, long-term relationships with many of our customers. We believe that our customers’ preference for high quality products, our technological leadership in developing innovative products, our focus on being highly responsive to our customers' needs and competitive pricing of our railcars have helped us maintain our long-standing relationships with our customers.
We believe that our customers’ preference for high quality products, our technological leadership in developing innovative products, our focus on being highly responsive to our customers' needs and competitive pricing of our railcars have helped us maintain our long-standing relationships with our customers. 6 In 2024, revenue from one customer accounted for approximately 10% of Consolidated Revenue which represented 11% of Manufacturing Revenue, 6% of Leasing & Management Services Revenue and 1% of Maintenance Services Revenue.
One of the units, RM9W, includes the nearshore area of the river sediments offshore of the Portland Property as well as downstream of the facility. It also includes a portion of the Portland Property's riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit.
One of the units, RM9W, includes the nearshore area of the river sediments offshore and downstream of the Portland Property. It also includes a portion of the Portland Property's riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit. The EPA requested that potentially responsible parties enter AOCs during 2019 agreeing to conduct remedial design studies.
Our telephone number is (503) 684-7000 and our Internet website is located at http://www.gbrx.com . Information contained on our website is not part of or incorporated into this Form 10-K or any other filings with the SEC.
Information contained on our website is not part of or incorporated into this Form 10-K or any other filings with the Securities and Exchange Commission (SEC).
In addition, our European manufacturing operations produce a comprehensive line of pressurized tank cars for liquid petroleum, LPG gas, chlorine and ammonia and non-pressurized tank cars for light oil, chemicals and other products. Maintenance Services Segment Wheel Services - We operate a wheel services network in North America.
In addition, our European manufacturing operations produce a comprehensive line of pressurized tank wagons for liquid petroleum, liquefied petroleum gas, chlorine and ammonia and non-pressurized tank cars for light oil, chemicals and other products, and are a leading manufacturer of bogies and other key components.
We experienced an increase in the price and shortages of certain materials and components during 2023. 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.
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 which aids in our vertical integration and we continue to pursue strategic opportunities to protect and enhance our supply chain.
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.
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 14, 2025. 9 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.
Our safety performance is monitored regularly by our CEO, senior leadership and our Board. We are proud of our commitment to maintaining a safe workplace. Employee Engagement – Building a successful human capital management strategy requires foresight, commitment and a willingness to embrace change.
Our Chief Executive Officer, senior leadership and our Board of Directors monitor our safety performance regularly. Employee Engagement – Building a successful human capital management strategy requires foresight, commitment and a willingness to embrace change. We are committed to creating a culture of feedback that reinforces our Core Value of Respect for People.
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. Our backlog of railcar units is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms.
Our backlog of railcar units 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.
This includes reviewing base pay levels for equity both internally and externally and assessing the effectiveness of our short and long-term incentive programs. In addition, we strive to provide competitive health and wellness programs to our employees. Benefits and Wellness – We believe benefits programs are a key differentiator in attracting and retaining talent.
Compensation and Employee Well-Being – To remain competitive globally, we regularly evaluate our compensation programs. This includes reviewing base pay levels for equity both internally and externally and assessing the effectiveness of our short and long-term incentive programs.
We compete primarily on the basis of quality, price, timeliness of 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, maintenance shops, railcar specialization and expertise in particular lease structures provides a strong competitive advantage.
We believe our strong servicing capability and our ability to sell railcars with a lease attached (syndicate railcars), integrated with our manufacturing, maintenance shops, railcar specialization and expertise in particular lease structures provides a strong competitive advantage. Marketing and Product Development In North America, we leverage an integrated marketing and sales effort to coordinate relationships in our various segments.
Brazilian Castings and Component Parts Manufacturing - We have a 29.5% ownership interest in Amsted-Maxion Fundição e Equipamentos Ferroviários S.A. (Amsted-Maxion) based in Cruzeiro, Brazil. Amsted-Maxion is a 5 manufacturer of various castings and wheel components for railcars and other heavy industrial equipment.
(Amsted-Maxion) based in Cruzeiro, Brazil. Amsted-Maxion is a manufacturer of various castings and wheel components for railcars and other heavy industrial equipment. Amsted-Maxion has a 40% ownership position in Greenbrier-Maxion and is integrated with the operations of our Brazilian railcar manufacturer.
European Railcar Manufacturing - Our European manufacturing operations produce a variety of freight railcar types, including gondolas, hoppers, intermodal cars, automobile transport, coil steel and metals, flat cars, and sliding wall cars.
European Railcar Manufacturing - Our European manufacturing operations produce a variety of freight wagon types, including box, car carrier, covered, flat, hopper, intermodal, steel products and specialty wagons.
We regularly review our priorities and progress in each of the areas highlighted below. We depend on a highly skilled workforce of 13,800 of which approximately half reside in Mexico. Individuals across multiple locations who have technical skills, including experience in welding, engineering, and machine operating are necessary for us to succeed.
Individuals across multiple locations who have technical skills, including experience in welding, engineering, and machine operating, are necessary for us to succeed. Approximately 7,800 employees are represented by unions, primarily in Mexico and Europe. At our Maintenance Services locations, approximately 50 employees are represented by a union. We believe we have good union relations.
Marketing and engineering personnel collaborate to evaluate opportunities and develop new products and services that exceed customers’ expectations.
Marketing and engineering personnel collaborate to evaluate opportunities and develop new products and services that exceed customers’ expectations. Research and development costs incurred during the years ended August 31, 2024, 2023 and 2022 were $5.2 million, $4.0 million and $5.4 million, respectively.
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 14, 2025.
A & C Foundry Products, Inc. et al , U.S. District Court, District of Oregon, Case #3:09-cv-453-PK.
There are at least twenty institutions in North America that provide railcar leasing and/or 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 and maintenance services.
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 and maintenance services. We compete primarily on the basis of quality, price, timeliness of delivery, reputation, service offerings and deal structuring and syndication ability.
We operate a replacement parts business which aids in our vertical integration 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.
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 2024, the top ten suppliers for all inventory purchases accounted for approximately 44% of total purchases. The top supplier accounted for 17% of total inventory purchases in 2024.
Financial information about our reportable segments as well as geographic information is located in Note 19 - Segment Information to our Consolidated Financial Statements. The Greenbrier Companies, Inc., is incorporated in Oregon. Our principal executive offices are located at One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.
All references to years refer to the fiscal years ended August 31st unless otherwise noted. 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.
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, we compete on the basis of quality, price, timeliness of delivery, innovative product design, reputation and customer service.
In Europe, we believe we are in the top tier of railcar manufacturers. Through our 60% ownership interest in Greenbrier-Maxion, we are a 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.
Information contained on or accessible through our website is not incorporated into, and does not constitute a part of, this filing. 8 Patents and Trademarks We have a proactive program aimed at protecting our intellectual property and the results from our research and development.
Patents and Trademarks We have a proactive program aimed at protecting our intellectual property and the results from our research and development. We have obtained a number of U.S. and non-U.S. patents of varying duration, and pending patent applications, registered trademarks, copyrights and trade names.
We strive to provide competitive programs that meet the diverse needs of our employees and their families. This includes health and wellness as well as financial and income protection benefits. Diversity and Inclusion – In 2023, we continued to build on our IDEAL Commitment through learning and education, building connections, and promoting an inclusive work environment.
In addition, we strive to provide competitive health and wellness programs to our employees. 8 Benefits and Wellness – We believe benefits programs are a key differentiator in attracting and retaining talent. We strive to provide competitive programs that meet the diverse needs of our employees and their families.
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Leasing & Management Services Segment Leasing - We operate a railcar leasing business in North America through a number of subsidiaries.
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Financial information about our reportable segments as well as geographic information is located in Note 18 - Segment Information to the Consolidated Financial Statements. References in this Annual Report on Form 10-K to the “Company,” “Greenbrier,” “we,” “us” and “our” refer to The Greenbrier Companies, Inc. and, where appropriate, its subsidiaries.
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In 2023, revenue from two customers in aggregate accounted for approximately 30% of total revenue which represented 33% of Manufacturing revenue, 16% of Maintenance Services revenue, and 5% of Leasing & Management Services revenue. No other customers accounted for greater than 10% of total revenue.
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We offer a full range of leasing options for a variety of freight and tank wagons that we produce, along with wagon repair and maintenance services. Maintenance Services Segment Wheel Services - We operate a wheel services network in North America.
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In 2023, the top ten suppliers for all inventory purchases accounted for approximately 42% of total purchases. The top supplier accounted for 16% of total inventory purchases in 2023. No other suppliers accounted for more than 10% of total inventory purchases. We believe we maintain good relationships with our suppliers.
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We do not consolidate Greenbrier-Maxion for financial reporting purposes and account for our 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. Brazilian Castings and Component Parts Manufacturing - We have a 29.5% ownership interest in Amsted-Maxion Fundição e Equipamentos Ferroviários S.A.
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Marketing and Product Development In North America, we leverage an integrated marketing and sales effort to coordinate relationships in our various segments.
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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/or services similar to ours.
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Research and development costs incurred during the years ended August 31, 2023, 2022 and 2021 were $4.0 million, $5.4 million and $6.3 million, respectively. 7 Human Capital With the oversight of the Board, our Chief Executive Officer and senior leadership are thoughtfully invested in our global workforce.
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Human Capital With the oversight of the Board, our Chief Executive Officer and senior leadership are thoughtfully invested in our global workforce. We regularly review our priorities and progress in each of the areas highlighted below. We depend on a highly skilled workforce of approximately 14,200 employees of which approximately half reside in Mexico.
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Approximately 6,000 employees are represented by unions, primarily in Mexico and Europe. At our Maintenance Services locations, approximately 50 employees are represented by a union. We believe we have good union relations. Safety – Employee safety is a top priority and we remain dedicated to continuously improving our safety performance over time.
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Safety – Employee safety is a top priority and we remain dedicated to continuously improving our safety performance over time. We regularly demonstrate our commitment to maintaining a safe workplace through efforts such as a refreshed safety onboarding and continuous awareness and training process, empowering employees to speak up on safety matters, and enhancing our focus on leading indicators.
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We are committed to creating a culture of feedback that supports our IDEAL Commitment (Inclusion, Diversity, Equity, Access and Leadership) and reinforces our Core Value of Respect for People. To remain engaged and understand our employees’ priorities, in 2023 we expanded our employee engagement survey to include our Mexico facilities.
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Employee engagement and satisfaction are essential to Greenbrier’s success. We prioritize fostering connections, encouraging collaboration, and creating a culture of open dialogue and feedback. Employee surveys play a critical role in helping us understand the priorities of our workforce.
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Feedback from our surveys informed our decision to introduce additional communication and recognition opportunities. Communication and Connections – In 2023, Greenbrier launched GBX RailDepot, a communication platform established to connect people and information, and further enhance our workplace culture. Employees can access company information and employee resources, recognize others for their contributions, and celebrate milestones together.
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In 2023, we expanded our employee engagement survey to include our Mexico facilities, and in 2024, we further expanded to include Europe. Feedback from our surveys continue to influence our approach to creating a culture of open dialogue and feedback. We are dedicated to fostering an inclusive environment that represents the broader communities we serve.
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Development and Training – We recognize that a talented and diverse workforce is critical to our success. Our commitment to investing in our people includes providing training and development opportunities at all levels, including on-the-job learning, competency-based training, education assistance, tuition reimbursement, and leadership development. Beyond this, we believe succession planning is more than replacement planning.
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We maintain eight Employee Resource Groups (ERGs) sponsored and supported by leadership. Our ERGs aim to instill workplace values that inspire innovation and growth, keep employees engaged, contribute to personal and professional development, and support retention. Communication and Recognition – In 2024, Greenbrier enhanced GBX RailDepot, the communication platform launched in 2023 by adding GBXcellence.
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It is developing a strong talent base that provides a pipeline to grow our organization beyond what it is today. This includes having a clear picture of our talent across the organization, facilitating career conversations and creating growth paths. Compensation and Employee Well-Being – To remain competitive globally, we regularly evaluate our compensation programs.
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This recognition and rewards program enhances our workplace culture by empowering employees to acknowledge the outstanding contributions of their peers and leaders, while also celebrating milestones together. Development and Training – We understand that a talented and diverse workforce is essential to our success.
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We implemented two new Employee Resource Groups (now totaling eight ERGs) to foster career development, broaden learning opportunities, and foster a sense of community among Greenbrier’s workforce. We hosted IDEAL Connect 2023, Greenbrier’s first-ever diversity, equity and inclusion summit, to further collaborate, collect feedback and enhance our IDEAL Commitment across the organization.
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That's why we focus on developing our employees through customized learning and training programs designed to enhance talent retention. Our personalized approach offers a range of training formats, equipping our team with the resources they need to grow and thrive professionally at Greenbrier. This empowers employees to take charge of their own learning journeys.
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Our Environmental, Social & Governance Report (ESG) provides additional information regarding our ESG strategy and goals. It can be found on our website.
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This includes health and wellness as well as financial and income protection benefits. Our 2024 Sustainability Update report provides additional information regarding our sustainability strategy and targets. It can be found on our website. Information contained on or accessible through our website is not incorporated into and does not constitute a part of this filing.
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The EPA requested that potentially responsible parties enter AOCs during 2019 agreeing to conduct remedial design studies. Some parties have signed AOCs, including one party with respect to RM9W which includes the area offshore of the Portland Property.
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In all other countries, we conform to country specific regulations where applicable. Additional Information We are a public reporting company and file annual, quarterly, current and special reports, proxy statements and other information with the SEC.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+11 added−25 removed118 unchanged
Biggest changeWe 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.
Biggest changeDisputes with labor unions, could result in, among other things, strikes, work stoppages or other slowdowns which could cause a significant disruption of our operations and increase our ongoing labor costs. We cannot be assured that our relations with our workforce will remain positive.
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.
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 and/or result in damage to our reputation, which could materially adversely impact our financial condition and results of operations.
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.
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 foreign currencies. In addition, some of our borrowings are in foreign currencies, giving rise to risk from fluctuations in exchange rates.
Risks Related to Legal, Compliance and Regulatory Matters 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.
Risks Related to Legal, Compliance and Regulatory Matters Train derailments or other accidents could subject us to legal claims that adversely impact our business, financial condition and our results of operations.
In addition, we have a Regulatory Services Group that offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services.
In addition, we have a Regulatory Services Group that offers regulatory, engineering, and process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services.
We cannot guarantee that we or our suppliers will be in compliance 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.
We cannot guarantee that we or our suppliers will be in compliance at all times, compliance may prove to be more costly and limiting than we currently anticipate, and compliance requirements could increase in future years.
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. Insurance coverage could be costly, unavailable or inadequate.
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. 17 Insurance coverage could be costly, unavailable or inadequate.
If indicators suggest it is more likely than not that the fair value of a reporting unit is less than its carrying value or that the carrying amount of intangible or long-lived assets may not be recoverable, it may result in an impairment. Impairment charges would impact our results of operations in the period in which they are identified.
If indicators suggest it is more likely than not that the fair value of a reporting unit is less than its carrying value or that the carrying amount of intangible or long-lived assets may not be recoverable, it may result in an impairment. Impairment charges impact our results of operations in the period in which they are identified.
Instability in the macroeconomic, political, military, legal, trade, financial, labor or market conditions in or relating to the countries where we, or our customers or suppliers, operate could negatively impact our business activities and operations. Some foreign countries in which we operate or may operate have authorities that regulate railroad safety and rail equipment design and manufacturing.
Instability in the macroeconomic, political, military, legal, regulatory, trade, financial, labor or market conditions in or relating to the countries where we, or our customers or suppliers, operate could negatively impact our business activities and operations. Some foreign countries in which we operate or may operate have authorities that regulate railroad safety and rail equipment design and manufacturing.
Additionally, factors beyond our control, including adverse political conditions, trade embargoes, increased tariffs or import duties, inclement weather, natural disasters, terrorism and labor disputes may adversely impact our supply chain, particularly if these conditions or disputes result in work slowdowns, lockouts, strikes, facility closures, or related disruptions.
Additionally, factors beyond our control, including adverse political conditions, trade embargoes, increased tariffs or import duties, inclement weather, natural disasters, pandemics, terrorism and labor disputes may adversely impact our supply chain, particularly if these conditions or disputes result in work slowdowns, lockouts, strikes, facility closures, or related disruptions.
New rules and regulations and shifting enforcement priorities of regulators could increase our operating costs and the operating costs of our customers. Changes to the process for obtaining regulatory approval in Europe for the operation of new or modified railcars may make it more difficult for us to deliver products timely and to comply with our sales contracts.
New rules and regulations and shifting enforcement priorities of regulators could increase our operating costs and the operating costs of our 22 customers. Changes to the process for obtaining regulatory approval in Europe for the operation of new or modified railcars may make it more difficult for us to deliver products timely and to comply with our sales contracts.
If such incentives are discontinued or diminished, the demand for our products could decrease, thereby creating the potential for a material adverse effect on our financial condition or results of operations. 24 Risks Related to our Common Stock Our stock price has been volatile and may continue to experience large fluctuations.
If such incentives are discontinued or diminished, the demand for our products could decrease, thereby creating the potential for a material adverse effect on our financial condition or results of operations. Risks Related to our Common Stock Our stock price has been volatile and may continue to experience large fluctuations.
If we are unable to successfully manage the risks associated with our foreign and cross-border business activities, our results of operations, financial condition, liquidity and cash flows could be negatively impacted. 20 Fluctuations in foreign currency exchange rates could lead to increased costs and lower profitability.
If we are unable to successfully manage the risks associated with our foreign and cross-border business activities, our results of operations, financial condition, liquidity and cash flows could be negatively impacted. Fluctuations in foreign currency exchange rates could lead to increased costs and lower profitability.
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.
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 them, 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.
The inability to purchase a sufficient quantity of materials on a timely basis could create disruptions in our production and result in delays while we attempt to engage alternative suppliers. Any such disruption or conditions could harm our business and adversely impact our results of operations.
The inability to purchase a sufficient quantity of materials on a timely basis could create disruptions in our production and result in delays while we attempt to engage alternative suppliers. Any such disruption or conditions could harm our 12 business and adversely impact our results of operations.
Our information technology infrastructure also includes products and services provided by third parties, and these providers can experience breaches of their systems and 13 products that affect the security of our systems and our proprietary or confidential information. Our reliance on information technology increases to the extent working remotely increases among our employees.
Our information technology infrastructure also includes products and services provided by third parties, and these providers can experience breaches of their systems and products that affect the security of our systems and our proprietary or confidential information. Our reliance on information technology increases to the extent working remotely increases among our employees.
Demand for specific types of railcars increases and decreases with the demand for goods such as grains, 19 metals, construction aggregates, fertilizer, perishables and general merchandise, plastic pellets, oil and gas, bio-fuels, chemicals, and automobiles, among others, which is beyond our control.
Demand for specific types of railcars increases and decreases with the demand for goods such as grains, metals, construction aggregates, fertilizer, perishables and general merchandise, plastic pellets, oil and gas, bio-fuels, chemicals, and automobiles, among others, which is beyond our control.
We depend on our information systems to successfully manage our business. We have taken steps to maintain adequate data security by implementing security technologies, internal controls, and network and data center resiliency and recovery processes. In addition, we continually evaluate and implement upgrades and changes to our information technology systems.
We depend on our information systems to successfully manage our 14 business. We have taken steps to maintain adequate data security by implementing security technologies, internal controls, and network and data center resiliency and recovery processes. In addition, we continually evaluate and implement upgrades and changes to our information technology systems.
Any resulting disruption in our supply, or increase in the cost of specialized components and services could harm our business and adversely affect our results of operations. The timing of our asset sales and related revenue recognition could cause significant differences in our quarterly results and liquidity.
Any resulting disruption in our supply, or increase in the cost of specialized components and services, could harm our business and adversely affect our results of operations. 15 The timing of our asset sales and related revenue recognition could cause significant differences in our quarterly results and liquidity.
Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning our business in general or our products, our leadership or our reputation among customers and the public at large, thereby making it more difficult for us to compete effectively, and potentially having a material adverse effect on our business, operations, or financial condition. 26 Item 1B.
Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning our business in general or our products, our leadership or our reputation among customers and the public at large, thereby making it more difficult for us to compete effectively, and potentially having a material adverse effect on our business, operations, or financial condition. 25 Item 1B.
Some of our credit facilities and existing indebtedness use variable rates which may make the amount of interest we pay on our variable rate indebtedness difficult to predict. 17 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.
Some of our credit facilities and existing indebtedness use variable rates which may make the amount of interest we pay on such variable rate indebtedness difficult to predict. 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.
In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures.
In addition, 13 these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures.
In addition, we cannot assure that our insurance carriers will be able to pay current or future claims. Additionally, 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.
In addition, we cannot be assured that our insurance carriers will be able to pay current or future claims. Additionally, 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.
If we do not have appropriate certifications, we could be unable to market and sell our rail equipment in those markets.
If we do not have appropriate certifications, we could be unable to market and sell our rail equipment 19 in those markets.
Adverse changes in foreign regulations applicable to us or our customers, such as labor, environment, trade, tax, currency and price regulations, could limit our operations, make the manufacture and distribution of our products difficult, and delay or limit our ability to repatriate income derived from foreign markets.
Adverse changes in foreign regulations or enforcement practices applicable to us or our customers, such as labor, environment, trade, tax, currency and price regulations, could limit our operations, make the manufacture and distribution of our products difficult, and delay or limit our ability to repatriate income derived from foreign markets.
Any serious disruption at any of our facilities due to pandemic, terrorism, fire, hurricane, earthquake, flood, other severe weather events or any other natural disaster could impair our ability to use our facilities and have a material adverse impact on our revenues and increase our costs and expenses.
Any serious disruption at any of our facilities due to pandemics, terrorism, fire, hurricane, earthquake, flood, other severe weather events or any other natural disaster could impair our ability to use our facilities and have a material adverse impact on our revenues and increase our costs and expenses.
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.
We have in the past and may in the future take tax positions that the Internal Revenue Service (IRS) or other U.S. or foreign 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.
Our business benefits from free trade agreements between the United States and foreign governments, and from various U.S. corporate tax provisions related to international commerce.
Our business benefits from free trade agreements between the U.S. and foreign governments, and from various U.S. corporate tax provisions related to international commerce.
In addition, if we are unable to perform insourced functions better than, or at least as well as, our third-party providers, our business may be harmed. Our business and operations could be materially and adversely impacted if we fail to adequately manage and respond to events that cause an interruption in our business operations.
In addition, if we are unable to perform insourced functions better than, or at least as well as, our third-party providers, our business may be harmed. Our business and financial results of operations could be materially and adversely impacted if we fail to adequately manage and respond to events that cause an interruption or interference in our business operations.
General Risk Factors 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.
General Risk Factors 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 U.S. and foreign jurisdictions.
We face attempts by malicious hackers, state-sponsored organizations, intruders and potentially terrorists, employees, and third-party service providers into our physical facilities to gain unauthorized access, or introduce malicious software to our network or those of our customers to, among other things, steal proprietary information related to our business, products, employees, and customers; interrupt our systems and services or those of our customers; corrupt the processes used to operate our businesses and to design and manufacture our products; or demand ransom to return control of such systems and services.
We face attempts by malicious hackers, state-sponsored organizations, intruders and potential terrorists, as well as by bad actor employees or third-party service providers, to gain unauthorized access into our physical facilities, or introduce malicious software to our network or those of our customers to, among other things: steal proprietary information related to our business, products, employees, and customers; interrupt our systems and services or those of our customers; corrupt the processes used to operate our businesses and to design and manufacture our products; or demand ransom to return control of such systems and services.
Many different and unrelated factors could cause a delay in our ability to move our goods in a timely manner from the manufacturing plant to the delivery point including physical disruptions such as armed conflict, natural disasters and power outages, strikes, labor stoppages or shortages hindering the operation of railroads and related transportation infrastructure, regulatory and bureaucratic inefficiency and unresponsiveness, and other causes.
Many different and unrelated factors could cause a delay in our ability to move our goods in a timely manner from the manufacturing plant to the delivery point including physical disruptions such as armed conflict, natural disasters and power outages, strikes, pandemics, labor stoppages or shortages hindering the operation of railroads and related transportation infrastructure, regulatory and bureaucratic inefficiency and unresponsiveness, uncertainty due to inconsistent treatment from regulators, and other causes.
Accordingly, we may not be able to continue to pay dividends in any given amount in the future, or at all. 25 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.
Accordingly, we may not be able to continue to pay dividends in any given amount in the future, or at all. Although our share repurchase program is intended to enhance long-term shareholder value, we cannot provide assurance that this will occur, and this program may be suspended or terminated at any time.
Controls and Procedures.” Changes in or the implementation of 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.
Changes in accounting standards, the implementation of new 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.
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.
While we cannot assess the direct impact of these or other potential regulations, we recognize that new climate change reporting or compliance protocols could increase our operating costs, decrease demand for our products and/or increase the price or decrease the availability of materials, input factors and manufactured components which could reduce our margins.
An interruption in production capabilities or maintenance and repair capabilities at our facilities, as a result of equipment or technology failure, acts of nature, terrorism, costs and inefficiencies associated with changing of production lines or transfer of production between facilities, could reduce or prevent our production, delivery, service, or repair of our products and increase our costs and expenses.
An interruption in production capabilities or maintenance and repair capabilities at our facilities, as a result of equipment or technology failure, natural disasters, pandemics, terrorism, costs and inefficiencies associated with changing of production lines or transfer of production between facilities, could reduce or prevent our production, delivery, service, or repair of our products and increase our costs and expenses.
Our inability to lease, remarket or sell leased railcars on favorable terms could result in an adverse impact to our consolidated financial statements or affect our ability to sell leased railcars to investors in the future. Additionally, when the price of scrap steel declines, our revenues and margins in such businesses decrease.
Our inability to lease, remarket or sell leased railcars on favorable terms could result in an adverse impact to our operating results or affect our ability to sell leased railcars to investors in the future. Additionally, when the price of scrap steel declines, our revenues and margins in such businesses decrease.
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 at efficient costs and on reasonable terms, particularly when the economy expands, production rates are high or competition for such skilled labor increases.
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 at efficient costs and on reasonable terms, particularly when competition for such skilled labor increases.
The relative competitiveness of our manufacturing facilities and products affects our performance. A number of competitive factors challenge or affect our ability to compete successfully including the introduction of competitive products and new entrants into our markets, a limited customer base and price pressures from unfair competition and increases in raw materials and labor costs.
A number of competitive factors challenge or affect our ability to compete successfully including the introduction of competitive products and new entrants into our markets, a limited customer base and price pressures from unfair competition and increases in raw materials and labor costs.
Inflation may cause our customers to reduce or delay orders for our goods and services thereby causing a decrease in sales of our goods and services. The United States Federal Reserve, the European Central Bank, and several other central banks, have undertaken or signaled increases in benchmark interest rates. Rising interest rates increases our borrowing costs potentially decreasing our profitability.
Inflation may cause our customers to reduce or delay orders for our goods and services thereby causing a decrease in our sales. The United States Federal Reserve, the European Central Bank, and several other central banks increased benchmark interest rates during 2024. Rising interest rates increases our borrowing costs potentially decreasing our profitability.
Our employees may engage in misconduct, fraud 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.
Risks related to potential misconduct by employees may adversely impact us. Our employees may engage in misconduct, fraud 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.
General inflation in the United States, Europe and other geographies has risen to levels not experienced in recent decades. General inflation also negatively impacts our business by decreasing the capital for our customers to deploy to purchase our goods and services.
General inflation in the U.S., Europe and other geographies has risen to levels not experienced in recent decades. General inflation also negatively impacts our business by decreasing the capital our customers have to deploy to purchase our goods and services.
Shortages of some types of skilled labor 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.
A shortage of some types of skilled labor such as welders and machine operators would restrict our ability to maintain or increase production rates, lead to production inefficiencies and increase our labor costs.
Our products may be sold to third parties who may misuse, improperly install or improperly or inadequately maintain or repair such products, which may result in us being subjected to claims or litigation associated with product damage, injuries or property damage that could increase our costs and weaken our financial condition. 22 Risks related to potential misconduct by employees may adversely impact us.
Our products may be sold to third parties who may misuse, improperly install or improperly or inadequately maintain or repair such products, which may result in us being subjected to claims or litigation associated with product damage, injuries or property damage that could increase our costs and weaken our financial condition.
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 are subject to extensive governmental 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.
The markets in which we participate are intensely competitive and we expect them to remain intensely competitive into the foreseeable future. Some of our competitors are owned or financially supported by foreign governments or sovereign wealth funds, and may potentially sell products and services below cost, or otherwise compete unfairly, in order to gain market share.
Some of our competitors are owned or financially supported by foreign governments and may sell products below cost or otherwise compete unfairly. The markets in which we participate are intensely competitive and we expect them to remain intensely competitive into the foreseeable future.
Cyclical economic downturns in our industry usually result in decreased demand for our products and services and reduced revenue. The industry in which we operate is subject to periodic economic cycles, and the purchasing trends of customers in our industry have a significant impact on demand for our products and services.
The industry in which we operate is subject to periodic economic cycles, and the purchasing trends of customers in our industry have a significant impact on demand for our products and services.
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 16 employees.
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. Some members of our senior management team and other key employees are at or nearing retirement age.
A limited availability of financing or 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. 21 Some of our competitors are owned or financially supported by foreign governments and may sell products below cost or otherwise compete unfairly.
A limited availability of financing or 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.
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.
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.
Certain components of our products, particularly specialized components like castings, bolsters, trucks, wheels and axles, and certain services, such as lining capabilities, are currently only available from a limited number of suppliers.
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 axles, and certain services, such as lining capabilities, are currently only available from a limited number of suppliers.
We are required to perform an annual impairment test of goodwill and other indefinite lived assets which could result in an impairment charge if it is determined that the carrying value of the asset exceeds its fair value.
Our financial performance and market value could cause write-downs of goodwill or intangibles or other long-lived assets in future periods. We are required to perform an annual impairment test of goodwill and other indefinite lived assets which could result in an impairment charge if it is determined that the carrying value of the asset exceeds its fair value.
Our failure to create and implement systems for monitoring, mitigating, managing, and recovering from such events could increase the length and severity of such disruptions, and could subject us to losses including penalties, cancellation of orders, and/or other losses. We face risks related to cybersecurity threats and incidents that increase our costs and could disrupt our business and operations.
Our failure to create and implement systems for monitoring, mitigating, managing, and recovering from such events could increase the length and severity of such disruptions, and could subject us to losses including penalties, cancellation of orders, and/or other losses.
Transactions with non-U.S. entities expose us to business practices, local customs, and legal processes with which we may not be familiar, as well as difficulty enforcing contracts and international political and trade tensions.
The failure to comply with laws governing international business may result in substantial penalties and fines and reputational harm. Transactions with non-U.S. entities expose us to business practices, local customs, and legal processes with which we may not be familiar, as well as difficulty enforcing contracts and international political and trade tensions.
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.
If we are unsuccessful in our succession planning efforts, the continuity of our business and results of operations could be adversely affected. 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.
If we are not able to purchase materials and energy at competitive prices, our ability to produce and sell our products on a cost-effective basis could be adversely impacted which, in turn, could adversely affect our revenue and profitability. 12 Disruptions in the supply of materials and components used in the production of our products could negatively impact our business and results of operations.
If we are not able to purchase materials and energy at competitive prices, our ability to produce and sell our products on a cost-effective basis could be adversely impacted which, in turn, could adversely affect our revenue and profitability.
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, each of which could reduce our revenue and decrease our overall return or affect our ability to sell leased assets in the future.
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. 20 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, each of which could reduce our revenue and decrease our overall return or affect our ability to sell leased assets in the future.
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.
Congress, and by the EPA, as well as in Europe and other geographies in which we operate. 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 carbon emissions.
Certain materials for our products are currently available from a limited number of suppliers and, as a result, we may have limited control over pricing, availability, and delivery schedules.
Disruptions in the supply of materials and components used in the production of our products could negatively impact our business and results of operations. Certain materials for our products are currently available from a limited number of suppliers and, as a result, we may have limited control over pricing, availability, and delivery schedules.
Business resiliency is important to our success. Natural and human-made events and circumstances may delay our ability to deliver products and services to our customers.
Business resiliency is important to our success. Natural and human-made events and circumstances may delay our ability to deliver products and services to our customers, increase our operating costs, decrease our margins, and adversely impact our results of operations.
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.
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 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, including potential proxy contests and public information campaigns, continues to increase.
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. In recent years, companies with a class of publicly-traded securities commonly face proxy contests, public information campaigns, and other forms of shareholder activism.
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. 23 We have identified a material weakness in our internal control over financial reporting.
In addition, climate change could result in an increased frequency of severe weather events and/or greater variance in weather conditions, 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.
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.
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, could adversely affect our business. Our success depends in part on our ability to attract, retain and motivate senior management and other key employees.
These shifts in demand could affect our results of operations and could have an adverse effect on our revenue and our profitability.
These shifts in demand could affect our results of operations and could have an adverse effect on our revenue and our profitability. Cyclical economic downturns in our industry usually result in decreased demand for our products and services and reduced revenue.
In 2023, revenue from two customers accounted for approximately 30% of total revenue. No other customers accounted for greater than 10% of total revenue.
In 2024, revenue from one customer accounted for approximately 10% of Consolidated Revenue. No other customers accounted for greater than 10% of Consolidated Revenue.
Some of our customers place orders for our products in reliance on their ability to utilize tax benefits or tax credits any of which benefits or credits could be discontinued thereby reducing incentives for our customers to purchase our rail products.
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. 23 Some of our customers place orders for our products in reliance on their ability to utilize tax benefits or tax credits, any of which benefits or credits could be discontinued thereby reducing incentives for our customers to purchase our rail products.
If we become subject to any such claims and are unable to successfully resolve them or maintain inadequate insurance for such claims, our business, financial condition and results of operations could be materially adversely affected. The products we manufacture are designed to work optimally when properly operated, installed, repaired, maintained and used to transport the intended cargo.
If we become subject to any such claims and are unable to successfully resolve them or maintain inadequate insurance for such claims, our business, financial condition and results of operations could be materially adversely affected, and may also harm our reputation.
In addition, we might need to issue additional equity securities, spend our cash, or incur debt, contingent liabilities, or amortization expenses related to intangible assets in connection with effecting an acquisition or joint venture, any of which could reduce our profitability and harm our business or only be available on unfavorable terms, if at all.
In addition, we might need to issue additional equity securities, spend our cash, or incur debt, contingent liabilities, or amortization expenses related to intangible assets in connection with effecting an acquisition or joint venture, any of which could reduce our profitability and harm our business or only be available on unfavorable terms, if at all. 18 Risks Related to Market and Economic Factors Inflation as well as monetary and other policy interventions by governments and central banks in response to inflation, including the increase of interest rates, as well as uncertainly about governmental macroeconomic policies, could negatively impact our business and results of operations.
Unusually mild weather conditions throughout the year may reduce overall demand for our wheel-related products and maintenance services. If occurring for prolonged periods, such weather could have an adverse effect on our business, results of operations and financial condition.
Additionally, 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. If occurring for prolonged periods, such weather could have an adverse effect on our business, results of operations and financial condition.
Our failure to identify future acquisition or joint venture opportunities, or to complete potential acquisitions or joint ventures on favorable terms, could hinder our ability to grow our business.
We may in the future acquire other businesses or invest in or enter into other joint ventures. Our failure to identify future acquisition or joint venture opportunities, to complete potential acquisitions or joint ventures on favorable terms, or to realize anticipated benefits from such acquisitions or joint ventures, could hinder our ability to grow our business.
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.
In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the revision of prior period financial statements.
Our business may be negatively impacted as a result of war in Ukraine. In February 2022, the Russian Federation commenced a military invasion of Ukraine. We cannot predict the full impact of the war in Ukraine, the economic sanctions imposed on Russia, and the related economic and geopolitical instability, including instability in the manufacturing and freight rail markets.
We cannot predict the full impact of the ongoing war in Ukraine, the economic sanctions imposed on Russia, and the related economic and geopolitical instability, including instability in the manufacturing and freight rail markets.
Our business will suffer if we are unsuccessful in making, integrating, and maintaining acquisitions, joint ventures and other strategic investments. We have acquired businesses and invested in or entered into joint ventures in past periods. We may in the future acquire other businesses or invest in or enter into other joint ventures.
Further, write-downs of goodwill and other assets could affect certain of the financial covenants under debt instruments and could restrict our financial flexibility. Our business will suffer if we are unsuccessful in making, integrating, and maintaining acquisitions, joint ventures and other strategic investments. We have acquired businesses and invested in or entered into joint ventures in past periods.
Certain relevant provisions of our Articles of Incorporation and Bylaws, as well as Oregon law, are described in further detail in “Description of the Registrant’s Securities Under Section 12 of the Securities Exchange Act of 1934” annexed as Exhibit 4.3 to this Annual Report.
Certain relevant provisions of our Articles of Incorporation and Bylaws, as well as Oregon law, are described in further detail in “Description of the Registrant’s Securities Under Section 12 of the Securities Exchange Act of 1934” included as Exhibit 4.3 to this Form 10-K. 24 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 significant delay in deliveries not otherwise contractually mitigated could result in cancellation of all or a portion of our orders, the loss of future sales, and negatively affect our reputation and our results of operations. 14 An inability to successfully manage, maintain, update, and secure our information systems, and utilize these systems to produce, disseminate, and store relevant and reliable data and information pertaining to our business, could adversely affect our business and competitive position in the market.
An inability to successfully manage, maintain, update, and secure our information systems, and utilize these systems to produce, disseminate, and store relevant and reliable data and information pertaining to our business, could adversely affect our business and competitive position in the market.
Such events include, but are not limited to, security breaches, disruptions or failures in our information-technology systems, physical damage to our facilities (including fires, structural failures, power outages or other events), or the unavailability of labor. The impact of such disruptions to our business and results of operations may vary based on the length and severity of the disruption.
Such events include, but are not limited to, security breaches, disruptions or failures in our information-technology systems, physical damage to our facilities (including fires, structural failures, power outages or other events), the unavailability of labor, actions or non-action by governmental agencies that prevent or hinder us from operating our business, meeting our contractual obligations, and converting backlog to revenue.
In some instances, we, our customers, and the users of our products and services can be unaware of an incident or its magnitude and effects. In addition, global privacy legislation, enforcement, and policy activity in this area are rapidly expanding and creating a complex regulatory compliance environment.
In some instances, we, our customers, and the users of our products and services can be unaware of an incident or its magnitude and effects.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws, which may conflict with local business customs in certain jurisdictions. The failure to comply with laws governing international business may result in substantial penalties and fines and reputational harm.
In our cross-border business activities, we could experience longer customer payment cycles, difficulty in collecting accounts receivable or an inability to protect our intellectual property. We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws, which may conflict with local business customs in certain jurisdictions.
These factors and others could disrupt our business directly and could disrupt the business of our customers thereby reducing or delaying orders of our goods and services. Prolonged civil unrest, political instability or uncertainty, military activities, or broad-based sanctions could have an adverse effect on our operations and business outlook.
These factors and others could disrupt our business directly and could disrupt the business of our customers thereby reducing or delaying orders of our goods and services.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeP ROPERTIES We operate at the following primary facilities as of August 31, 2023: Description Location Status Manufacturing Segment Operating facilities: 4 locations in the United States Owned 3 locations in Mexico Owned – 2 locations Leased – 1 location 3 locations in Poland Owned 3 locations in Romania Owned Administrative offices: 2 locations in the United States Leased Maintenance Services Segment Operating facilities: 17 locations in the United States Leased – 9 locations Owned – 8 locations Leasing & Management 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.
Biggest changeLeased – 8 locations Owned – 7 locations Leasing & Management Services Segment Corporate offices, railcar marketing and fleet management: 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.
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Item 2. P ROPERTIES We operate at the following primary facilities as of August 31, 2024: Description Location Status Manufacturing Segment Operating facilities: 4 locations in the U.S. Owned 3 locations in Mexico Owned – 2 locations Leased – 1 location 3 locations in Poland Owned 3 locations in Romania Owned Administrative offices: 2 locations in the U.S.
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Leased Maintenance Services Segment Operating facilities: 15 locations in the U.S.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changePrior to Greenbrier, she served in various leadership roles with Lattice Semiconductor Corporation, Nautilus, Inc. and Electro Scientific Industries. Adrian J. Downes, 60, is Senior Vice President, Chief Financial Officer, a position he has held since June 2019. In March 2013, Mr. Downes joined the Company as Senior Vice President and Chief Accounting Officer. In August 2018, Mr.
Biggest changeLaurie Dornan, 54, is Senior Vice President, Chief Human Resources Officer, a position she has held since November 2020. Ms. Dornan has served in various human resources leadership positions since joining the Company in 2014. Prior to Greenbrier, she served in various leadership roles with Lattice Semiconductor Corporation, Nautilus, Inc. and Electro Scientific Industries.
Executive officers are designated by the Board of Directors. No director or executive officer has a family relationship with any other director or executive officer of the Company. 28 PART II
Executive officers are designated by the Board of Directors. No director or executive officer has a family relationship with any other director or executive officer of the Company. 29 PART II
Meyer , 42, is Senior Vice President, Finance and Chief Accounting Officer and joined the Company in February 2023. Prior to joining the Company, Mr. Meyer was Chief Accounting Officer of Horizon Global Corporation from December 2019 to February 2023, and Corporate Controller from November 2018 to December 2019. Prior to that, Mr. Meyer has held various finance leadership roles.
Matthew J. Meyer , 43, is Senior Vice President, Finance and Chief Accounting Officer and joined the Company in February 2023. Prior to Greenbrier, Mr. Meyer was Chief Accounting Officer of Horizon Global Corporation from December 2019 to February 2023, and Corporate Controller from November 2018 to December 2019. Prior to that, Mr. Meyer has held various finance leadership roles.
Baker has led Greenbrier's Legal and Compliance departments since joining the Company in May 2008. Prior to joining the Company, Mr. Baker served as General Counsel to Lattice Semiconductor Corporation, Altera Corporation and Vitelic Corporation. Brian J. Comstock , 61, is Executive Vice President, Chief Commercial and Leasing Officer, a position he has held since January 2021. Mr.
Baker, 68, is Senior Vice President, a position he has held since joining the Company in May 2008. From 2008 until January 2024, Mr. Baker also served as the Chief Legal & Compliance Officer. Prior to Greenbrier, Mr. Baker served as General Counsel to Lattice Semiconductor Corporation, Altera Corporation and Vitelic Corporation. Brian J.
Prior to this role, Mr. Galvan served as the Senior Vice President of Operations for GRS. Mr. Galvan has over 30 years of experience in the railroad industry serving in various management functions including positions at Canadian National Railway, Kansas City Southern, and Burlington Northern Santa Fe.
Galvan has over 30 years of experience in the railroad industry serving in various management functions including positions at Canadian National Railway, Kansas City Southern, and Burlington Northern Santa Fe. William Glenn , 63, is Senior Vice President and President, Europe, a position he has held since January 2024. Prior to this role, Mr.
Item 4. MINE SAF ETY DISCLOSURES Not applicable. 27 Information about ou r Executive Officers Current information regarding our executive officers is presented below. Lorie L. Tekorius, 56, is Chief Executive Officer (CEO) and President and serves on the Board of Directors. Ms.
Item 4. MINE SAF ETY DISCLOSURES Not applicable. 28 Information About Ou r Executive Officers Current information regarding our executive officers is presented below. Lorie L. Tekorius, 57, is Chief Executive Officer and President and serves on the Board of Directors. Ms. Tekorius has served as President since August 2019 and was promoted to Chief Executive Officer in March 2022.
Tekorius has served in various management positions for the Company since 1995, most recently as Executive Vice President and Chief Operating Officer and prior to that, as Executive Vice President and Chief Financial Officer. Martin R. Baker, 67, is Senior Vice President, Chief Legal and Compliance Officer. Mr.
Ms. Tekorius was elected to the Board of Directors in March 2022. Ms. Tekorius has served in various management positions for the Company since 1995, most recently as Executive Vice President and Chief Operating Officer and prior to that, as Executive Vice President and Chief Financial Officer. Martin R.
Comstock has served in various management positions for the Company since 1998, most recently as Executive Vice President, Sales and Marketing. Laurie Dornan, 53, is Senior Vice President, Chief Human Resources Officer, a position she has held since November 2020. Ms. Dornan has served in various human resources leadership positions since joining the Company in 2014.
Comstock , 62, is Executive Vice President and President, The Americas, a position he has held since January 2024. Prior to this role, Mr. Comstock served as Executive Vice President, Chief Commercial and Leasing Officer since January 2021. Mr. Comstock has served in various management positions for the Company since 1998, most recently as Executive Vice President, Sales and Marketing.
William Krueger , 58, is Senior Vice President, President Greenbrier Manufacturing Operations, a position he has held since September 2022. Mr. Krueger joined Greenbrier in 2020 as Senior Vice President GMO. In that role, he led integration and transformation efforts at Greenbrier’s manufacturing operations in Arkansas and Missouri, acquired in 2019.
William Krueger , 59, is Senior Vice President and Chief Operations Officer, The Americas, a position he has held since January 2024. Prior to this role, Mr. Krueger was Senior Vice President, President Greenbrier Manufacturing Operations (GMO) since September 2022 and was Senior Vice President GMO when he joined the Company in 2020. Prior to Greenbrier, Mr.
Downes assumed the role of Acting Chief Financial Officer and in June 2019 was appointed Chief Financial Officer. Before joining the company, Mr. Downes served in executive leadership roles for Knowledge Universe, SUPERVALU Inc. and Albertsons, Inc. Rick Galvan , 51, is Senior Vice President, Greenbrier Rail Services (GRS), a position he has held since January 2021.
Rick Galvan , 52, is Senior Vice President, Operations, Maintenance Services, a position he has held since January 2024. Prior to this role, Mr. Galvan served as the Senior Vice President of Operations for Greenbrier Rail Services since January 2021. Mr.
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Tekorius has served as President since August 2019 and was promoted to Chief Executive Officer in March 2022. Ms. Tekorius was elected to the Board of Directors in March 2022. Ms.
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Michael J. Donfris, 61, is Senior Vice President, Chief Financial Officer, and joined the Company in June 2024. Prior to Greenbrier, Mr. Donfris served as Chief Financial Officer for R.J.
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As part of leading Greenbrier’s Manufacturing segment, Krueger also manages global railcar design, engineering, and quality functions. Before joining the Company, Mr. Krueger held a number of operations roles in the automotive industry including positions at General Motors, Toyota, and Nissan. Matthew J.
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Corman Railroad Group since November 2020, Vice President Global Finance for Flowserve from 2018 to 2020, Vice President of Finance and Chief Accounting Officer for TrinityRail from 2015 to 2016, and has over 30 years of experience in other finance leadership roles.
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Glenn served as the Chair of the Management Board of Greenbrier Europe, managing operations in Poland and Romania. Mr. Glenn returned to the company in 2019 after serving as Chief Commercial Officer for Wells Fargo Rail from 2016 to 2019. Earlier Mr. Glenn worked in a range of roles at Greenbrier including sales, marketing and customer support, beginning in 2001.
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Krueger held a number of operations roles in the automotive industry including positions at General Motors, Toyota, and Nissan. Christian M. Lucky , 57, is Senior Vice President, Chief Legal & Compliance Officer and Corporate Secretary, a position he has held since January 2024. Mr. Lucky has served in various legal and management positions in the Company since 2015.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare repurchases under this program during the three months ended August 31, 2023 were as follows: (in millions, except shares which are reflected in thousands, and per share amounts) Total Number of Shares Purchased Average Price Paid Per Share (Including Commissions) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs June 1, 2023 - June 30, 2023 247 $ 30.41 247 $ 46.4 July 1, 2023 - July 31, 2023 — $ — — $ 46.4 August 1, 2023 - August 31, 2023 — $ — — $ 46.4 Performance Graph The following graph demonstrates a comparison of cumulative total returns for the Company's Common Stock, the Dow Jones U.S.
Biggest changeThere were no share repurchases under this program during the three months ended August 31, 2024. 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, the Standard & Poor’s (S&P) 500 Index, and the S&P SmallCap 600 Index.
Each of the indices assumes that all dividends were reinvested and that the investment was maintained to and including August 31, 2023, the end of the Company’s 2023 fiscal year. 29 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.
Each of the indices assumes that all dividends were reinvested and that the investment was maintained to and including August 31, 2024, the end of the Company’s 2024 fiscal year. 30 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.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER 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 550 holders of record of common stock as of October 20, 2023.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER 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 191 holders of record of common stock as of October 18, 2024.
Issuer Purchases of Equity Securities The Board of Directors has authorized the Company to repurchase shares of the Company’s common stock. On January 5, 2023, the expiration date of this share repurchase program was extended to January 31, 2025.
Issuer Purchases of Equity Securities The Board of Directors has authorized the Company to repurchase shares of the Company’s common stock. The share repurchase program has an expiration date of January 31, 2025. The amount remaining for purchase was $45.1 million as of August 31, 2024.
Industrial Transportation Index, the Standard & Poor’s (S&P) 500 Index, and the S&P SmallCap 600 Index. The S&P SmallCap 600 is included as it is used in measuring the Company's relative total stockholder return for purposes of determining the performance of certain stock awards granted beginning in 2023.
The S&P SmallCap 600 is included as it is used in measuring the Company's relative total stockholder return for purposes of determining the performance of certain stock awards granted beginning in 2023. The graph assumes an investment of $100 on August 31, 2019 in each of the Company's Common Stock and the stocks comprising the indices.
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The graph assumes an investment of $100 on August 31, 2018 in each of the Company's Common Stock and the stocks comprising the indices.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in operating profit was primarily attributed to an increase in railcar deliveries at improved margins and included the $46.7 million of net loss on divestitures in 2023. 36 Maintenance Services Segment Year Ended August 31, 2023 vs 2022 (In millions) 2023 2022 Increase (Decrease) % Change Revenue $ 406.4 $ 347.7 $ 58.7 16.9 % Cost of revenue $ 364.0 $ 322.0 $ 42.0 13.0 % Margin (%) 10.4 % 7.4 % 3.0 % * Operating profit ($) $ 36.9 $ 21.7 $ 15.2 70.0 % Operating profit (%) 9.1 % 6.2 % 2.9 % * * Not meaningful Our Maintenance Services segment generates revenue from wheel and axle servicing, railcar maintenance and the production of a variety of component parts in North America.
Biggest changeThe increase in Operating profit was primarily attributed to an increase in Margin during the year ended August 31, 2024 as well as the prior year including $46.7 million of charges related to the sale and closure of our Gunderson Facility during the year ended August 31, 2023. 37 Maintenance Services Segment Year Ended August 31, 2024 vs 2023 (In millions) 2024 2023 Increase (Decrease) % Change Revenue $ 298.8 $ 406.4 $ (107.6 ) (26.5 )% Cost of revenue $ 264.1 $ 364.0 $ (99.9 ) (27.4 )% Margin (%) 11.6 % 10.4 % 1.2 % * Operating profit ($) $ 27.1 $ 36.9 $ (9.8 ) (26.6 )% Operating profit (%) 9.1 % 9.1 % -- * * Not meaningful Our Maintenance Services segment primarily generates revenue from railcar component manufacturing and servicing, providing railcar maintenance services and scrapping wheels and other components.
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, 2023, we were in compliance with all such restrictive covenants.
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, 2024, we were in compliance with all such restrictive covenants.
Amounts are based on interest rates as of August 31, 2023. 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.
Amounts are based on interest rates as of August 31, 2024. 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.
We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available. For further information regarding income taxes, see Note 18 of the Consolidated Financial Statements. Environmental costs - At times we may be involved in various proceedings related to environmental matters.
We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available. For further information regarding income taxes, see Note 17 - Income Taxes to the Consolidated Financial Statements. Environmental costs - At times we may be involved in various proceedings related to environmental matters.
The decrease in Net gain on disposition of equipment was primarily attributed to fewer sales of assets from our lease fleet during the year ended August 31, 2023.
The decrease in Net gain on disposition of equipment was primarily attributed to fewer sales of assets from our lease fleet during the year ended August 31, 2024.
If further developments in or resolution of an environmental matter result in facts and circumstances that differ from those assumptions used to develop these reserves, the accrual for environmental remediation could be materially understated or overstated.
If further developments in or resolution of an environmental matter result in facts and circumstances that differ from those assumptions used to develop these reserves, the accrual for environmental remediation could be materially misstated.
For discussion related to the results of operations and changes in financial condition for 2022 compared to 2021 refer to Part II, Item 7.
For discussion related to the results of operations and changes in financial condition for 2023 compared to 2022 refer to Part II, Item 7.
Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and 44 components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ. For further information, see Note 8 to the Consolidated Financial Statements.
Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ. For further information, see Note 7 - Goodwill to the Consolidated Financial Statements.
Approximately 3% of backlog units and 2% of estimated backlog value as of August 31, 2023 was associated with our Brazilian manufacturing operations which is accounted for under the equity method. Our backlog of railcar units is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms and conditions.
Approximately 3% of backlog units and estimated value as of August 31, 2024 was associated with our Brazilian manufacturing operation which is accounted for under the equity method. Our backlog of railcar units is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms.
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. 33 Financial Overview Revenue, Cost of revenue, Margin and Earnings from operations (operating profit) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
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. 34 Financial Overview Revenue, Cost of revenue, Margin and Earnings from operations (operating profit) presented below exclude intersegment activity that is eliminated in consolidation.
Assets are periodically sold in the normal course of business in order to optimize our fleet and to manage risk and liquidity. Net gain on disposition of equipment was $17.3 million and $37.2 million for the years ended August 31, 2023 and 2022, respectively.
Assets are periodically sold in the normal course of business in order to optimize our lease fleet and to manage risk and liquidity. Net gain on disposition of equipment was $13.1 million and $17.3 million for the years ended August 31, 2024 and 2023, respectively.
Pursuant to the authoritative guidance, we make certain estimates and assumptions to determine our reporting units and whether the fair value for each reporting unit is greater than its carry value. The above highlighted judgments contemplated estimates and effects of macroeconomic trends that are inherently uncertain.
We make certain estimates and assumptions to determine our reporting units and whether the fair value of each reporting unit is greater than its respective carrying value. The above highlighted judgments contemplated estimates and effects of macroeconomic trends that are inherently uncertain.
To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $654.0 million of variable rate debt to fixed rate debt as of August 31, 2023.
To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $653.1 million of variable rate debt to fixed rate debt as of August 31, 2024.
Earnings From Unconsolidated Affiliates Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the after-tax results from these unconsolidated affiliates. Earnings from unconsolidated affiliates was $9.2 million and $11.3 million for the years ended August 31, 2023 and 2022, respectively.
Earnings From Unconsolidated Affiliates Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis. Earnings from unconsolidated affiliates were $11.0 million and $9.2 million for the years ended August 31, 2024 and 2023, respectively.
Our backlog includes $970 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Multi-year supply agreements are a part of rail industry practice.
Our backlog includes approximately $590 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors.
Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Management Services and divestitures previously discussed. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity.
Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Management Services. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity. Proceeds from sales of assets are expected to be approximately $90 million for 2025.
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 which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates.
Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates. Under 45 the market approach, we estimate the fair value based on observed market multiples for comparable businesses.
During the year ended August 31, 2023, we purchased a total of 1.9 million shares for $56.9 million, of which 1.8 million shares for $53.6 million were purchased under the current authorization of the share repurchase program. As of August 31, 2023, the amount remaining for repurchase under the share repurchase program was $46.4 million.
During the year ended August 31, 2024, we purchased a total of 38 thousand shares for $1.3 million. During the year ended August 31, 2023, we purchased a total of 1.9 million shares for $56.9 million, of which 1.8 million shares for $53.6 million were purchased under the current authorization of the share repurchase program.
Capital expenditures for 2024 are expected to be approximately $280 million for Leasing & Management Services, approximately $190 million for Manufacturing and approximately $15 million for Maintenance Services. Capital expenditures for 2024 primarily relate to additions to our lease fleet and continued investments into the safety and productivity of our facilities.
Gross capital expenditures for 2025 are expected to be approximately $360 million for Leasing & Management Services, approximately $110 million for Manufacturing and approximately $10 million for Maintenance Services. Capital expenditures for 2025 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.
As of August 31, (In millions) 2023 2022 Credit facility balances: North America $ — $ 160.0 GBX Leasing 139.9 — Europe 47.2 51.6 Mexico 110.0 85.0 Total Revolving notes $ 297.1 $ 296.6 As of August 31, 2023, outstanding commitments under the North American credit facility included letters of credit which totaled $4.9 million.
As of August 31, (In millions) 2024 2023 Nonrecourse credit facility balances: GBX Leasing $ 194.9 $ 139.9 Other credit facility balances: North America — — Europe 46.7 47.2 Mexico 110.0 110.0 Total Revolving notes $ 351.6 $ 297.1 Outstanding commitments under the North American credit facility included letters of credit which totaled $5.9 million and $4.9 million as of August 31, 2024 and 2023, respectively.
Year Ended August 31, (In millions) 2023 2022 Operating profit (loss): Manufacturing $ 140.9 $ 97.2 Maintenance Services 36.9 21.7 Leasing & Management Services 103.3 108.3 Corporate (104.7 ) (109.2 ) $ 176.4 $ 118.0 34 Consolidated Results Year Ended August 31, 2023 vs 2022 (In millions) 2023 2022 Increase (Decrease) % Change Revenue $ 3,944.0 $ 2,977.7 $ 966.3 32.5 % Cost of revenue $ 3,502.9 $ 2,671.7 $ 831.2 31.1 % Margin (%) 11.2 % 10.3 % 0.9 % * Net earnings attributable to Greenbrier $ 62.5 $ 46.9 $ 15.6 33.3 % * Not meaningful Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various average selling prices and margins.
Year Ended August 31, (In millions) 2024 2023 Operating profit (loss): Manufacturing $ 281.6 $ 140.9 Maintenance Services 27.1 36.9 Leasing & Management Services 139.0 103.3 Corporate (123.2 ) (104.7 ) $ 324.5 $ 176.4 35 Consolidated Results Year Ended August 31, 2024 vs 2023 (In millions) 2024 2023 Increase (Decrease) % Change Revenue $ 3,544.7 $ 3,944.0 $ (399.3 ) (10.1 )% Cost of revenue $ 2,986.2 $ 3,502.9 $ (516.7 ) (14.8 )% Margin (%) 15.8 % 11.2 % 4.6 % * Net earnings attributable to Greenbrier $ 160.1 $ 62.5 $ 97.6 156.2 % * Not meaningful Through our integrated business model, we provide a broad range of custom products and services in each of our reportable segments, which have various selling prices and margins.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K, which was filed with the United States Securities and Exchange Commission on October 31, 2022. 35 Manufacturing Segment Year Ended August 31, 2023 vs 2022 (In millions, except railcar deliveries) 2023 2022 Increase (Decrease) % Change Revenue $ 3,357.7 $ 2,476.6 $ 881.1 35.6 % Cost of revenue $ 3,083.4 $ 2,300.9 $ 782.5 34.0 % Margin (%) 8.2 % 7.1 % 1.1 % * Operating profit ($) $ 140.9 $ 97.2 $ 43.7 45.0 % Operating profit (%) 4.2 % 3.9 % 0.3 % * Deliveries 24,900 18,700 6,200 33.2 % * Not meaningful Our Manufacturing segment primarily generates revenue from manufacturing a wide range of freight railcars and from the conversion of existing railcars through our facilities in North America and Europe.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K, which was filed with the United States Securities and Exchange Commission on October 25, 2023. 36 Manufacturing Segment Year Ended August 31, 2024 vs 2023 (In millions, except deliveries) 2024 2023 Increase (Decrease) % Change Revenue $ 3,013.6 $ 3,357.7 $ (344.1 ) (10.2 )% Cost of revenue $ 2,648.9 $ 3,083.4 $ (434.5 ) (14.1 )% Margin (%) 12.1 % 8.2 % 3.9 % * Operating profit ($) $ 281.6 $ 140.9 $ 140.7 99.9 % Operating profit (%) 9.3 % 4.2 % 5.1 % * Deliveries 22,300 24,900 (2,600 ) (10.4 )% * Not meaningful Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcars and from the conversion of existing or in-service railcars through our facilities in North America and Europe.
Year Ended August 31, (In millions, except per share amounts) 2023 2022 Revenue: Manufacturing $ 3,357.7 $ 2,476.6 Maintenance Services 406.4 347.7 Leasing & Management Services 179.9 153.4 3,944.0 2,977.7 Cost of revenue: Manufacturing 3,083.4 2,300.9 Maintenance Services 364.0 322.0 Leasing & Management Services 55.5 48.8 3,502.9 2,671.7 Margin: Manufacturing 274.3 175.7 Maintenance Services 42.4 25.7 Leasing & Management Services 124.4 104.6 441.1 306.0 Selling and administrative 235.3 225.2 Net gain on disposition of equipment (17.3 ) (37.2 ) Asset impairment, disposal, and exit costs 46.7 — Earnings from operations 176.4 118.0 Interest and foreign exchange 85.4 57.4 Earnings before income tax and earnings from unconsolidated affiliates 91.0 60.6 Income tax expense (24.6 ) (18.1 ) Earnings before earnings from unconsolidated affiliates 66.4 42.5 Earnings from unconsolidated affiliates 9.2 11.3 Net earnings 75.6 53.8 Net earnings attributable to noncontrolling interest (13.1 ) (6.9 ) Net earnings attributable to Greenbrier $ 62.5 $ 46.9 Diluted earnings per common share $ 1.89 $ 1.40 Performance for our segments is evaluated based on operating profit.
Year Ended August 31, (In millions, except per share amounts) 2024 2023 Revenue: Manufacturing $ 3,013.6 $ 3,357.7 Maintenance Services 298.8 406.4 Leasing & Management Services 232.3 179.9 3,544.7 3,944.0 Cost of revenue: Manufacturing 2,648.9 3,083.4 Maintenance Services 264.1 364.0 Leasing & Management Services 73.2 55.5 2,986.2 3,502.9 Margin: Manufacturing 364.7 274.3 Maintenance Services 34.7 42.4 Leasing & Management Services 159.1 124.4 558.5 441.1 Selling and administrative 247.1 235.3 Net gain on disposition of equipment (13.1 ) (17.3 ) Asset impairment, disposal, and exit costs, net — 46.7 Earnings from operations 324.5 176.4 Interest and foreign exchange 100.8 85.4 Earnings before income tax and earnings from unconsolidated affiliates 223.7 91.0 Income tax expense (62.0 ) (24.6 ) Earnings before earnings from unconsolidated affiliates 161.7 66.4 Earnings from unconsolidated affiliates 11.0 9.2 Net earnings 172.7 75.6 Net earnings attributable to noncontrolling interest (12.6 ) (13.1 ) Net earnings attributable to Greenbrier $ 160.1 $ 62.5 Diluted earnings per common share $ 4.96 $ 1.89 Performance for our reportable segments is evaluated based on operating profit.
Year Ended August 31, (In millions) 2023 2022 Capital expenditures: Leasing & Management Services $ (272.9 ) $ (323.2 ) Manufacturing (71.9 ) (48.3 ) Maintenance Services (17.3 ) (9.2 ) Total capital expenditures (gross) $ (362.1 ) $ (380.7 ) Proceeds from sale of equipment 78.8 155.5 Total capital expenditures (net of proceeds) $ (283.3 ) $ (225.2 ) Capital expenditures primarily relate to additions to our lease fleet and on-going investments into our facilities, including the safety, productivity and efficiency of our facilities.
Year Ended August 31, (In millions) 2024 2023 Capital expenditures: Leasing & Management Services $ (277.0 ) $ (272.9 ) Manufacturing (102.8 ) (71.9 ) Maintenance Services (18.5 ) (17.3 ) Total capital expenditures (gross) $ (398.3 ) $ (362.1 ) Proceeds from sales of assets 75.0 78.8 Total capital expenditures (net of proceeds) $ (323.3 ) $ (283.3 ) Capital expenditures primarily relate to additions to our lease fleet and on-going investments in the safety, productivity and improvements of our facilities.
The demand for, and mix of, products and services delivered changes from period to period, which causes fluctuations in our results of operations. The 32.5% increase in revenue for the year ended August 31, 2023 as compared to the prior year was primarily due to an 35.6% increase in Manufacturing revenue.
The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results. The 10.1% decrease in Revenue for the year ended August 31, 2024 as compared to the prior year was primarily due to a 10.2% decrease in Manufacturing Revenue.
We performed a quantitative assessment for our annual goodwill impairment test during the third quarter of 2023. Based on the results of our assessment, the estimated fair values of all reporting units with goodwill increased from our prior quantitative assessment, and exceeded their carrying values; therefore, we concluded that goodwill was not impaired.
We performed a qualitative assessment for our annual goodwill impairment test during the third quarter of 2024 and determined that it was more likely than not that the fair values of all reporting units with goodwill exceeded their carrying values; therefore, we concluded that goodwill was not impaired.
We also amended our $200 million term facility to provide an additional $75.0 million in term debt. Dividend & Share Repurchase Program A quarterly dividend of $0.30 per share was declared on October 18, 2023. The Board of Directors has authorized our company to repurchase in aggregate up to $100.0 million of our common stock.
Dividend & Share Repurchase Program A quarterly dividend of $0.30 per share was declared on October 16, 2024. The Board of Directors has authorized our company to repurchase in aggregate up to $100.0 million of our common stock.
This was partially offset by lower scrap metal pricing in the current year. 37 Leasing & Management Services Segment Year Ended August 31, 2023 vs 2022 (In millions) 2023 2022 Increase (Decrease) % Change Revenue $ 179.9 $ 153.4 $ 26.5 17.3 % Cost of revenue $ 55.5 $ 48.8 $ 6.7 13.7 % Margin (%) 69.1 % 68.2 % 0.9 % * Operating profit ($) $ 103.3 $ 108.3 $ (5.0 ) (4.6 )% Operating profit (%) 57.4 % 70.6 % (13.2 )% * * Not meaningful Our Leasing & Management Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, syndication revenue associated with leases attached to new railcar sales, and interim rent on leased railcars for syndication.
The decrease in Operating profit was primarily attributed to operating at lower volumes and a decrease in scrap metal pricing and volume during the year ended August 31, 2024. 38 Leasing & Management Services Segment Year Ended August 31, 2024 vs 2023 (In millions) 2024 2023 Increase (Decrease) % Change Revenue $ 232.3 $ 179.9 $ 52.4 29.1 % Cost of revenue $ 73.2 $ 55.5 $ 17.7 31.9 % Margin (%) 68.5 % 69.1 % (0.6 )% * Operating profit ($) $ 139.0 $ 103.3 $ 35.7 34.6 % Operating profit (%) 59.8 % 57.4 % 2.4 % * * Not meaningful Our Leasing & Management Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, syndication revenue associated with leases attached to new railcar sales, interim rent on leased railcars for syndication and the sale of railcars purchased from third parties with the intent to resell.
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 repayments, working capital needs, planned capital expenditures, additional investments in our unconsolidated affiliates and dividends during the next twelve months. 43 The following table shows our estimated future contractual cash obligations as of August 31, 2023: Year Ended August 31, (In millions) Total 2024 2025 2026 2027 2028 Thereafter Notes payable 1 $ 1,329.9 $ 86.5 $ 39.3 $ 262.0 $ 308.7 $ 385.2 $ 248.2 Interest 2 305.0 56.1 51.9 48.6 39.3 18.5 90.6 Railcar & operating leases 80.0 15.6 12.9 11.6 8.7 7.9 23.3 Revolving notes 297.1 160.5 3.4 3.4 129.8 — — $ 2,012.0 $ 318.7 $ 107.5 $ 325.6 $ 486.5 $ 411.6 $ 362.1 1 The repayment of the $47.7 million of 2024 Convertible Notes due February 2024 and the $373.8 million of 2028 Convertible Notes due April 2028 is assumed to occur at the scheduled maturity instead of assuming an earlier conversion by the holders. 2 A portion of the estimated future cash obligation relates to interest on variable rate borrowings.
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 repayments, working capital needs, planned capital expenditures, additional investments in our unconsolidated affiliates and dividends during the next twelve months. 44 The following table shows our estimated future contractual cash obligations as of August 31, 2024: Year Ended August 31, (In millions) Total 2025 2026 2027 2028 2029 Thereafter Notes payable 1 $ 1,420.9 $ 42.8 $ 265.5 $ 312.4 $ 389.2 $ 14.6 $ 396.4 Interest 2 437.1 70.9 65.2 50.6 29.2 17.9 203.3 Railcar & operating leases 72.9 14.6 13.5 10.7 9.8 8.0 16.3 Revolving notes 351.6 154.4 2.3 194.9 — — — $ 2,282.5 $ 282.7 $ 346.5 $ 568.6 $ 428.2 $ 40.5 $ 616.0 1 The repayment of the $373.8 million of 2028 Convertible Notes due April 2028 is assumed to occur at the scheduled maturity instead of assuming an earlier conversion by the holders. 2 A portion of the estimated future cash obligation relates to interest on variable rate borrowings.
Asset Impairment, Disposal and Exit Costs Asset impairment, disposal, and exit costs in the current year included total charges associated with the Gunderson Facility of $40.7 million and a divestiture of Southwest Steel of $9.7 million, partially offset by a gain on disposal of our majority ownership interest in the Rayvag joint venture of $3.7 million.
Asset Impairment, Disposal and Exit Costs, Net Asset impairment, disposal, and exit costs, net was $46.7 million for the year ended August 31, 2023 related to charges associated with the Gunderson Facility and divestiture of Southwest Steel, partially offset by a gain on disposal of majority interest in the Rayvag joint venture.
Cash Flows From Investing Activities Cash used in investing activities primarily relates to capital expenditures net of proceeds from the sale of assets, divestitures during the year and investment activity with our unconsolidated affiliates. The change in cash used in investing activities for 2023 compared to 2022 was primarily attributable to a decrease in proceeds from the sale of assets.
Cash Flows From Investing Activities Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates.
Leasing & Management Services operating profit decreased $5.0 million or 4.6% for the year ended August 31, 2023 compared to the prior year.
Leasing & Management Services Operating profit increased $35.7 million or 34.6% for the year ended August 31, 2024 compared to the prior year.
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 from time to time on the open market or through privately negotiated transactions. The timing and amount of purchases is based upon market conditions, securities law limitations and other factors.
The timing and amount of purchases is based upon market conditions, securities law limitations and other factors. The program may be modified, suspended, or discontinued at any time without prior notice. The share repurchase program does not obligate us to acquire any specific number of shares in any period.
For further information, see Note 5 to the Consolidated Financial Statements. Goodwill - In accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles–Goodwill and Other (ASC 350), we evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amounts of our reporting units exceed their fair value.
For further information, see Note 4 - Divestitures to the Consolidated Financial Statements. Goodwill - We evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amounts of our reporting units exceed their fair value. We test goodwill for impairment by either performing a qualitative or quantitative assessment.
The increase in Manufacturing cost of revenue was primarily attributed to a 33.2% increase in railcar deliveries and higher material and other input costs in the current year. Margin as a percentage of revenue was 11.2% and 10.3% for the years ended August 31, 2023 and 2022, respectively.
The decrease in Manufacturing Cost of revenue was primarily attributed to a 10.4% decrease in deliveries during the year ended August 31, 2024. Margin as a percentage of Revenue was 15.8% and 11.2% for the years ended August 31, 2024 and 2023, respectively.
Interest and Foreign Exchange Interest and foreign exchange expense was composed of the following: Year Ended August 31, Increase (decrease) (In millions) 2023 2022 2023 vs 2022 Interest and foreign exchange: Interest and other expense $ 79.2 $ 55.7 $ 23.5 Foreign exchange loss 6.2 1.7 4.5 $ 85.4 $ 57.4 $ 28.0 The $28.0 million increase in Interest and foreign exchange expense during the year ended August 31, 2023 compared to the prior year was primarily attributed to an increase in interest expense from higher interest rates and borrowings.
Interest and Foreign Exchange Interest and foreign exchange expense was composed of the following: Year Ended August 31, Increase (Decrease) (In millions) 2024 2023 2024 vs 2023 Interest and foreign exchange: Interest and other expense $ 93.8 $ 79.2 $ 14.6 Foreign exchange loss, net 7.0 6.2 0.8 $ 100.8 $ 85.4 $ 15.4 The $15.4 million increase in Interest and foreign exchange expense during the year ended August 31, 2024 compared to the prior year was primarily attributed to an increase in interest expense from higher borrowings and interest rates. 40 Income Tax In 2024 our Income tax expense was $62.0 million on $223.7 million of pre-tax earnings for an effective tax rate of 27.7%.
For further information regarding our environmental costs, see Note 22 of the Consolidated Financial Statements. 45
For further information regarding our environmental costs, see Note 21 - Commitments and Contingencies to the Consolidated Financial Statements. 46
Consolidated Margin as a percentage of revenue was positively impacted by an increase in Manufacturing Margin from 7.1% to 8.2% primarily attributed to operating at consistently higher production levels during the current year.
Margin as a percentage of Revenue was positively impacted by an increase in Manufacturing Margin percentage from 8.2% to 12.1% primarily attributed to operating efficiencies and favorable product mix during the year ended August 31, 2024.
Leasing & Management Services cost of revenue increased $6.7 million or 13.7% for the year ended August 31, 2023 compared to the prior year. The increase was primarily due to higher costs from owning a larger fleet.
Leasing & Management Services Cost of revenue increased $17.7 million or 31.9% for the year ended August 31, 2024 compared to the prior year. This was primarily due to higher costs from an increase in the volume of railcars sold that we purchased from third parties and a larger lease fleet during the year ended August 31, 2024.
The increase in Manufacturing revenue was primarily attributed to a 33.2% increase in railcar deliveries and higher syndication revenues. The 31.1% increase in cost of revenue for the year ended August 31, 2023 as compared to the prior year was primarily due to a 34.0% increase in Manufacturing cost of revenue.
The decrease in Manufacturing Revenue was primarily attributed to a 10.4% decrease in deliveries. The 14.8% decrease in Cost of revenue for the year ended August 31, 2024 as compared to the prior year was primarily due to a 14.1% decrease in Manufacturing Cost of revenue.
The $4.5 million change in Foreign exchange loss was primarily attributed to the change in the Mexican Peso's exchange rate relative to the U.S. Dollar. 39 Income Tax In 2023 our income tax expense was $24.6 million on $91.0 million of pre-tax earnings for an effective tax rate of 27.0%.
In 2023 our income tax expense was $24.6 million on $91.0 million of pre-tax earnings for an effective tax rate of 27.0%.
At August 31, 2023 cash and cash equivalents and restricted cash were $302.7 million, a decrease of $256.4 million from $559.1 million at the prior year end.
At August 31, 2024 Cash and cash equivalents and Restricted cash were $368.6 million, an increase of $65.9 million from $302.7 million at the prior year end.
The decrease was primarily attributed to lower Net gains on disposition of equipment for the year ended August 31, 2023, partially offset by higher Margin as a result of growth in the lease fleet. 38 Selling and Administrative Year Ended August 31, 2023 vs 2022 (In millions) 2023 2022 Increase (Decrease) % Change Selling and Administrative $ 235.3 $ 225.2 $ 10.1 4.5 % Selling and administrative expense was $235.3 million or 6.0% of revenue for the year ended August 31, 2023 and $225.2 million or 7.6% of revenue for the year ended August 31, 2022.
The increase was primarily attributed to higher rents from a larger lease fleet and improved lease rates during the year ended August 31, 2024. 39 Selling and Administrative Year Ended August 31, 2024 vs 2023 (In millions) 2024 2023 Increase (Decrease) % Change Selling and administrative $ 247.1 $ 235.3 $ 11.8 5.0 % Selling and administrative expense was $247.1 million or 7.0% of Revenue for the year ended August 31, 2024 and $235.3 million or 6.0% of Revenue for the year ended August 31, 2023.
The $10.1 million increase was primarily attributed to higher employee related and IT support costs, partially offset by lower legal costs. Net Gain on Disposition of Equipment Net gain on disposition of equipment primarily includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment.
The $11.8 million increase was primarily attributed to an increase in employee related costs including higher long-term incentive compensation during the year ended August 31, 2024. Net Gain on Disposition of Equipment Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment.
North America – As of August 31, 2023, a $600.0 million revolving line of credit, maturing August 2026, secured by substantially all of our U.S. assets not otherwise pledged as security for term loans, the warehouse credit facility or the railcar asset-backed securities, existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations.
Other Credit Facilities North America – As of August 31, 2024, a $600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations.
The European lines of credit include $35.9 million which are guaranteed by our Company. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from October 2023 through July 2025. Mexico – As of August 31, 2023, our Mexican railcar manufacturing operations had three lines of credit totaling $175.0 million.
The European credit facilities are regularly renewed and currently have maturities that range from October 2024 through September 2026. 43 Mexico – As of August 31, 2024, our Mexican railcar manufacturing operations had lines of credit totaling $166.0 million for working capital needs, $66.0 million of which we and our joint venture partner have each guaranteed 50%.
Advances under this facility bear interest at SOFR plus 1.85% plus 0.11% as a SOFR adjustment. Interest rate swap agreements cover 87% of the outstanding balance to swap the floating interest rate to a fixed rate. The warehouse credit facility converts to a term loan in August 2025 which matures in August 2027.
Advances under the facility are secured by a pool of leased railcars and bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.85% plus 0.11% as a SOFR adjustment. As of August 31, 2024, interest rate swap agreements cover 74% of the outstanding balance to swap the floating interest rate to a fixed rate.
The increase from the prior year is primarily a result of an increase in earnings due to improved operating results at our European operations and the gain on sale of Rayvag. 40 Liquidity and Capital Resources Year Ended August 31, (In millions) 2023 2022 Net cash provided by (used in) operating activities $ 71.2 $ (150.4 ) Net cash used in investing activities (280.0 ) (224.0 ) Net cash provided by (used in) financing activities (76.2 ) 244.9 Effect of exchange rate changes 28.6 17.2 Net decrease in cash and cash equivalents and restricted cash $ (256.4 ) $ (112.3 ) We have been financed through cash generated from operations and borrowings.
Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations. 41 Liquidity and Capital Resources Year Ended August 31, (In millions) 2024 2023 Net cash provided by operating activities $ 329.6 $ 71.2 Net cash used in investing activities (320.4 ) (280.0 ) Net cash provided by (used in) financing activities 86.2 (76.2 ) Effect of exchange rate changes (29.5 ) 28.6 Net increase (decrease) in cash and cash equivalents and restricted cash $ 65.9 $ (256.4 ) We continue to be financed through cash generated from operations and borrowings.
Leasing & Management Services Margin as a percentage of revenue increased 0.9% for the year ended August 31, 2023 compared to the prior year. The increase in Margin percentage was primarily attributed to higher lease rates and growth of the lease fleet.
Maintenance Services Margin as a percentage of Revenue increased 1.2% for the year ended August 31, 2024 compared to the prior year. The increase in Margin percentage was primarily attributed to a favorable change in product mix during the year ended August 31, 2024.
Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. GBX Leasing – As of August 31, 2023, a $550.0 million nonrecourse warehouse credit facility existed to support the operations of GBX Leasing.
Available borrowings are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. Advances bear interest at SOFR plus 1.50% plus 0.10% as a SOFR adjustment or Prime plus 0.50% depending on the type of borrowing.
We also launched a multi-year strategy during the year which we outlined at our first-ever Investor Day in April 2023. The strategy has three basic tenets: 1. Maintain our manufacturing leadership position across geographies; 2. Optimize our industrial footprint for efficiency and margin enhancement while addressing the needs of our customers; and 3.
The strategy has three basic tenets: (1) Maintain our manufacturing leadership position across geographies; (2) Optimize our industrial footprint for efficiency and margin enhancement while addressing the needs of our customers; and (3) Increase our recurring revenue to reduce the impact of manufacturing cyclicality. Overall, demand in the marketplace remains steady for our products and services.
This increase was partially offset by $46.7 million of charges associated with the divestitures previously discussed. 32 Manufacturing Backlog Our backlog remains strong at August 31, 2023 and includes a diverse portfolio of railcar types, highlighted by the following: • Our railcar backlog was 30,900 units with an estimated value of $3.8 billion as of August 31, 2023 with deliveries that extend into 2026. • During 2023, we generated new railcar orders of 30,000 units valued at approximately $3.8 billion. • We increased our backlog compared to the prior year by approximately 1,400 units.
The increase was primarily attributed to a change in Leased railcars for syndication and a $97.1 million increase in Net earnings for the year ended August 31, 2024. 33 Manufacturing Backlog Our backlog remains strong at August 31, 2024 and includes a diverse portfolio of railcar types, highlighted by the following: • Our railcar backlog was 26,700 units with an estimated value of $3.4 billion as of August 31, 2024 with expected deliveries reaching 2026 and beyond. • During 2024, we generated new railcar orders of 21,700 units valued at approximately $2.8 billion.
Manufacturing cost of revenue increased $782.5 million or 34.0% for the year ended August 31, 2023 compared to the prior year. The increase in cost of revenue was primarily attributed to a 33.2% increase in the volume of railcar deliveries and higher material and other input costs during the year ended August 31, 2023.
Manufacturing Revenue decreased $344.1 million or 10.2% for the year ended August 31, 2024 compared to the prior year. The decrease in Revenue was primarily attributed to a 10.4% decrease in deliveries during the year ended August 31, 2024. Manufacturing Cost of revenue decreased $434.5 million or 14.1% for the year ended August 31, 2024 compared to the prior year.
The increase in Margin percentage was primarily attributed to improved pricing and operating efficiencies. This was partially offset by lower scrap metal pricing in the current year. Maintenance Services operating profit increased $15.2 million or 70.0% for the year ended August 31, 2023 compared to the prior year.
This was partially offset by a decrease in scrap metal pricing during the year ended August 31, 2024. Maintenance Services Operating profit decreased $9.8 million or 26.6% for the year ended August 31, 2024 compared to the prior year.
Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.
If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit. In 2023, we performed a quantitative goodwill impairment test and determined that the estimated fair values of all reporting units with goodwill exceeded their carrying values.
During the year ended August 31, 2023 we paid off the North America credit facility, drew the remaining $75.0 million on our leasing term loan facility and drew $139.9 million on the GBXL warehouse credit facility as we continued to grow the fleet. 41 During 2022 we issued asset backed securities of $323.3 million, and used proceeds to pay down our warehouse credit facility for GBX Leasing.
During the year ended August 31, 2024 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our GBX Leasing warehouse facility. We also borrowed $196.6 million on the GBX Leasing 42 warehouse facility to grow the lease fleet. In February 2024, we paid $47.7 million to retire our 2024 Convertible Notes.
Maintenance Services cost of revenue increased $42.0 million or 13.0% for the year ended August 31, 2023 compared to the prior year. The increase was primarily due to higher costs associated with operating at higher volumes. Maintenance Services Margin as a percentage of revenue increased 3.0% for the year ended August 31, 2023 compared to the prior year.
Maintenance Services Cost of revenue decreased $99.9 million or 27.4% for the year ended August 31, 2024 compared to the prior year. The decrease was primarily due to operating at lower volumes and a change in product mix during the year ended August 31, 2024.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary The financial results for 2023 reflect another year of transformation and profitable growth. We delivered strong results despite challenges that impacted our business throughout the year.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary The financial results for 2024 reflect a successful year executing on our multi-year strategy outlined last year.
Maintenance Services revenue increased $58.7 million or 16.9% for the year ended August 31, 2023 compared to the prior year. The increase was primarily attributed to improved pricing and higher volumes. This was partially offset by lower scrap metal pricing in the current year.
Maintenance Services Revenue decreased $107.6 million or 26.5% for the year ended August 31, 2024 compared to the prior year. The decrease was primarily attributed to 11.6% lower volumes in our wheels business due to lower demand, a change in product mix and a $9.1 million decrease due to lower scrap metal volume and pricing.
Manufacturing operating profit increased $43.7 million or 45.0% for the year ended August 31, 2023 compared to the prior year.
The increase in Margin percentage was primarily attributed to operating efficiencies and favorable product mix during the year ended August 31, 2024. Manufacturing Operating profit increased $140.7 million or 99.9% for the year ended August 31, 2024 compared to the prior year.
Cash Flows From Operating Activities The change in cash provided by (used in) operating activities for 2023 compared to 2022 was primarily due to an increase in Net earnings and net favorable change in working capital driven by more efficient working capital usage when compared to the prior year.
Cash Flows From Operating Activities The $258.4 million increase in cash from operating activities for the year ended August 31, 2024 compared to the year ended August 31, 2023 was primarily due to a change in Leased railcars for syndication and a $97.1 million increase in Net earnings.
Supply chain challenges, inflation, rising interest rates, rail service congestion and labor shortages continued to impact our business and required focused attention from management.
We delivered strong results during the year, however, supply chain challenges, rail service congestion, inflation, high interest rates, labor shortages and foreign currency fluctuations continued to impact our business for the year ended August 31, 2024.
Our current cash balance is part of our strategy to maintain strong liquidity to respond to current uncertainties. Senior secured credit facilities, consisting of four components, aggregated to $1.4 billion as of August 31, 2023. We had an aggregate of $364.4 million available to draw down under credit facilities as of August 31, 2023.
As of August 31, 2024, the amount remaining for repurchase under the share repurchase program was $45.1 million. Cash, Borrowing Availability and Credit Facilities Our current cash balance is part of our strategy to maintain strong liquidity to respond to current uncertainties.
Net Earnings Attributable to Noncontrolling Interest Net earnings attributable to noncontrolling interest was $13.1 million and $6.9 million for the years ended August 31, 2023 and 2022, respectively, which primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
Net Earnings Attributable to Noncontrolling Interest Net earnings attributable to noncontrolling interest were $12.6 million and $13.1 million for the years ended August 31, 2024 and 2023, respectively.
Increase our recurring revenue to reduce the impact of manufacturing cyclicality. Our strategic focus aligns with three financial goals. Those are (a) increasing recurring revenue, (b) expanding our aggregate gross margin and (c) raising our return on invested capital.
We believe these results demonstrate the benefit of our continued focus on our strategic plan, and we remain focused on increasing recurring revenue, expanding our aggregate gross margin and raising our return on invested capital.
Europe – As of August 31, 2023, lines of credit totaling $72.8 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 1.6% and Euro Interbank Offered Rate (EURIBOR) plus 1.5% to EURIBOR plus 1.9%, were available for working capital needs of our European manufacturing operations.
The North America credit facility matures in August 2026. Europe – As of August 31, 2024, lines of credit totaling $78.2 million, secured by certain of our European assets, were available for working capital needs of our European manufacturing operations. The European lines of credit include $33.1 million which are guaranteed by us.
This was partially offset by: • The net impact of divestitures totaled $46.7 million during the year ended August 31, 2023. • Higher Interest and foreign exchange expense in the current year primarily attributed to an increase in interest expense from higher interest rates and borrowings. • A lower Net gain on disposition of equipment for the year ended August 31, 2023.
These were partially offset by the following: • $37.4 million increase in Income tax expense associated with higher pre-tax earnings during the year ended August 31, 2024. • $15.4 million increase in Interest and foreign exchange primarily attributed to an increase in interest expense from higher borrowings and interest rates for the year ended August 31, 2024. • $11.8 million increase in Selling and administrative expense was primarily attributed to an increase in employee related costs including higher long-term incentive compensation for the year ended August 31, 2024.
Manufacturing Margin as a percentage of revenue increased 1.1% for the year ended August 31, 2023 compared to the prior year. The increase in Margin percentage for the year ended August 31, 2023 was primarily attributed to operating at consistently higher production levels. This was partially offset by increased costs associated with component outsourcing to support the higher production.
The decrease in Cost of revenue was primarily attributed to a 10.4% decrease in the volume of deliveries and favorable product mix during the year ended August 31, 2024. Manufacturing Margin as a percentage of Revenue increased 3.9% for the year ended August 31, 2024 compared to the prior year.
Leasing & Management Services revenue increased $26.5 million or 17.3% for the year ended August 31, 2023 compared to the prior year. The increase was primarily attributed to higher lease rents due to higher lease rates and a larger fleet as well as higher interim rents on railcars for syndication.
The increase was primarily attributed to an increase of $19.7 million in rents associated with a larger lease fleet and higher lease rates, an $8.9 million increase in the sale of railcars which were purchased from third parties with the intent to resell and a $9.7 million increase in interim rent on leased railcars for syndication during the year ended August 31, 2024.
Proceeds from sales of assets are expected to be approximately $80 million for 2024. Cash Flows From Financing Activities The change in cash provided by (used in) financing activities for 2023 compared to 2022 was primarily attributed to lower net proceeds from the issuance of debt and higher share repurchases.
Cash Flows From Financing Activities The $162.4 million increase in cash flow from financing activities for the year ended August 31, 2024 compared to the year ended August 31, 2023 was primarily attributed to a $57.4 million increase in net proceeds from revolving notes, $52.8 million higher proceeds from the issuance of notes payable, net of repayments and a $55.6 million reduction in the repurchase of stock compared to the prior year.
This amount consists of $273.8 million available on the North American credit facility, $25.6 million on the European credit facilities and $65.0 million on the Mexican credit facilities.
As of August 31, 2024, we had $351.8 million in Cash and cash equivalents and $345.9 million in available borrowings. The available balance to draw under committed credit facilities includes $258.3 million on the North American credit facility, $31.6 million on the European credit facilities and $56.0 million on the Mexican credit facilities.
Removed
We identified a few general trends that impacted our business, all of which we believe are reflected in our results for the year ended August 31, 2023. Overall, demand for our products and services remains strong in the marketplace.
Added
Despite these challenges, we were able to deliver strong results and accomplish the following in 2024: • Achieved our second highest annual revenue in our company's history. • Expanded our Margin as a percentage of Revenue from 11.2% in 2023 to 15.8% in 2024. • Received new railcar orders for 21,700 units valued at approximately $2.8 billion. • Increased our owned lease fleet by 2,100, representing a 15.7% increase from the prior year. • Generated $330 million of Net cash provided by operating activities.
Removed
We were able to manage these factors to accomplish the following in 2023: • Achieved record annual revenues and deliveries; • Strong ending backlog value and units; • Increased our quarterly dividend 11% at Q3; and • Repurchased 1.9 million shares.
Added
Recurring revenue is defined as Leasing & Management Services revenue excluding the impact of syndication transactions. 32 Financial Highlights Despite the challenging operating environment, we accomplished the following in 2024: • Margin as a percentage of Revenue improved by 4.6% to 15.8% for the year ended August 31, 2024.
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As part of our strategic goal to optimize our footprint, during the year we launched a review of our global business capacity. This resulted in three divestitures, including our Gunderson Marine business and closure of our Gunderson Facility, Southwest Steel, a foundry business in Longview, Texas, and our interest in Rayvag, a manufacturing facility located in Turkey.
Added
The increase from the prior year was driven by operating efficiencies and favorable product mix in our Manufacturing segment. • Earnings from operations increased by $148.1 million or 84.0% compared to the prior year. The increase was primarily attributed to an increase in Margin in our Manufacturing and Leasing & Management Services segments during the year ended August 31, 2024.
Removed
Additionally, we acquired the minority interest in GBX Leasing from our partner, and now wholly own our lease fleet. 31 Business Highlights Despite the challenging operating environment, we accomplished the following in 2023: • Revenue increased by $966.3 million and 32.5% compared to the prior year, driven primarily by a 33.2% increase in railcar deliveries; • Margin improved $135.1 million and 44.2% compared to the prior year, driven primarily by a 33.2% increase in railcar deliveries and operating efficiencies across segments; • Added 1,200 railcars to our owned lease fleet, representing nearly 10% growth during the year; and • Increased Earnings from Operations by $58.4 million and 49.5% compared to the prior year.
Added
The prior year also included $46.7 million in Asset impairment, disposal, and exit costs, net. • Diluted Earnings per common share (EPS) increased by 162% to $4.96 for the year ended August 31, 2024. • Net cash provided by operating activities increased $258.4 million compared to the prior year.
Removed
The improvement was primarily attributed to higher deliveries and operating efficiencies across the business.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

14 edited+1 added−2 removed12 unchanged
Biggest changeThe communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 47 Sufficiency of audit evidence within the North American manufacturing businesses As discussed in Item 9A.
Biggest changeThe communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
The Company did not (i) maintain change management controls to ensure configuration data changes affecting the IT application were appropriate (ii) design and maintain program development controls to ensure the data migration, program testing and approval of new software development is aligned with business and IT requirements and (iii) maintain user access controls to ensure segregation of duties in the Company’s financial application.
The Company did not (i) maintain change management controls to ensure 48 configuration data changes affecting the IT application were appropriate (ii) design and maintain program development controls to ensure the data migration, program testing and approval of new software development is aligned with business and IT requirements and (iii) maintain user access controls to ensure segregation of duties in the Company’s financial application.
For relevant financial statement account balances at the North America manufacturing businesses, we: • increased the number of sample selections compared to what we would have otherwise made if the Company’s controls were designed and operating effectively • tested the underlying records of selected transaction data obtained from the impacted information technology system to support the use of the information in the conduct of the audit • inspected supporting documentation and evidence of authorization for a selection of manual and automated journal entries.
For relevant financial statement account balances at the North America manufacturing businesses, we: • increased the number of sample selections compared to what we would have otherwise made if the Company’s controls were designed and operating effectively for the full fiscal year • tested the underlying records of selected transaction data obtained from the impacted information technology system to support the use of the information in the conduct of the audit • inspected supporting documentation and evidence of authorization for a selection of manual and automated journal entries.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2023, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2024 and August 31, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2024, in conformity with U.S. generally accepted accounting principles.
The description of the material weakness states that the Company did not effectively design and maintain controls over information technology (IT) general controls in one IT environment in its primary North America manufacturing businesses that are relevant to the preparation of the Company’s consolidated financial statements.
The description of the material weakness stated that the Company did not effectively design and maintain controls over information technology (IT) general controls in one IT environment in its primary North America manufacturing businesses that are relevant to the preparation of the Company’s consolidated financial statements.
At August 31, 2023, a uniform 10% increase in variable interest rates would result in approximately $1.2 million of additional annual interest expense. 46 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors The Greenbrier Companies, Inc.: 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, 2023 and 2022, 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, 2023, and the related notes (collectively, the consolidated financial statements).
At August 31, 2024, a uniform 10% increase in variable interest rates would result in approximately $1.4 million of additional annual interest expense. 47 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors The Greenbrier Companies, Inc.: 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, 2024 and August 31, 2023, 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, 2024, and the related notes (collectively, the consolidated financial statements).
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, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated October 25, 2023 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.
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, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated October 24, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Interest Rate Risk We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $654.0 million of variable rate debt to fixed rate debt. Notwithstanding these interest rate swap agreements, we are still exposed to interest rate risk relating to our revolving debt and a portion of term debt, which are at variable rates.
Interest Rate Risk We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $653.1 million of variable rate debt to fixed rate debt. Notwithstanding these interest rate swap agreements, we are still exposed to interest rate risk relating to our revolving debt and a portion of term debt, which are at variable rates.
Dollar relative to the foreign currencies would result in a decrease in equity of $14.9 million, or 1.2% of Total equity - Greenbrier. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. Dollar.
Dollar relative to the foreign currencies would result in a decrease in equity of $16.5 million, or 1.2% of Total equity - Greenbrier. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. Dollar.
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, 2023, net assets of foreign subsidiaries aggregated to $149.5 million and a 10% strengthening of the U.S.
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, 2024, net assets of foreign subsidiaries aggregated to $164.7 million and a 10% strengthening of the U.S.
At August 31, 2023 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros aggregated to $70.9 million.
At August 31, 2024 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros aggregated to $143.9 million.
We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2011. Portland, Oregon October 25, 2023 48
We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2011. Portland, Oregon October 24, 2024 49
As a result, process level automated controls that are dependent on the affected IT environment and manual controls that rely on system-generated data or reports from the affected IT environment were ineffective because they could have been adversely impacted.
As a result, during the period of fiscal year 2024 in which the material weakness remained unremediated, process level automated controls that are dependent on the affected IT environment and manual controls that rely on system-generated data or reports from the affected IT environment were ineffective because they could have been adversely impacted.
At August 31, 2023, 85% of our outstanding debt had fixed rates and 15% had variable rates.
At August 31, 2024, 84% of our outstanding debt had fixed rates and 16% had variable rates.
Removed
Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for convertible instruments and contracts in the Company’s own equity as of September 1, 2021 due to the adoption of Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .
Added
Sufficiency of audit evidence within the North American manufacturing businesses As discussed in Item 9A. Controls and Procedures, a material weakness was identified as of August 31, 2023 that was remediated during fiscal year 2024.
Removed
Controls and Procedures, a material weakness was identified as of August 31, 2023 and included in management’s report on internal control over financial reporting.

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