GBX 10-K & 10-Q changes, risk factors and insider trading
Greenbrier Companies Inc. · NYSE · Railroad Equipment · CIK 923120 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Changes in global trade policies, including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners, remain uncertain and could impact our financial condition or results of operations.”
New heading “We may be unable to effectively implement capacity rationalization initiatives, cost reductions and/or restructuring efforts and our business might be adversely affected.”
New heading “Our internal control over financial accounting and reporting may not detect all errors or omissions in the financial statements.”
Largest changes
“Changes in global trade policies, including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners, remain uncertain and could impact our financial condition or results of operations.”see in full comparison
“We may be unable to effectively implement capacity rationalization initiatives, cost reductions and/or restructuring efforts and our business might be adversely affected.”see in full comparison
see in full comparisonIn February 2022, the Russian Federation commenced a military invasion of Ukraine. 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.Some of our operations, particularly in Europe, have experienced higher energy costs, an increase in the price and decrease in the availability of steel and certain other materials and components, disruptions in transportation and supply chains, and higher manufacturing and borrowingcosts.costs as a result of the ongoing war in Ukraine. Not all of these costs are subject to escalation and related clauses which allow us to pass through costs to our customers, and there is a risk we will not be successful in renegotiating or managing the implementation of existing agreements to allow us to pass through these increased prices of manufacturing.TheseWenegativecannotfactorspredictmaythecontinuefulltoimpactoccurofalongsuchwithconflict, the economic sanctions imposed on Russia, and the related economic and geopolitical instability, including instability in the manufacturing and freight rail markets. Civil unrest and armed conflicts, including the war in Ukraine, can cause other risks to ourbusinessbusiness,thatsuchmay emerge which include, among others,as prolonged heightened inflation, macroeconomic interventions in response to inflation, cyber disruptions or attacks, and disruptions in credit markets. 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 related to the war in Ukraine or civil unrest or armed conflict in other geographies could have an adverse effect on our operations and business outlook.
“From time to time we engage in capacity rationalization initiatives and/or similar restructuring plans, which may include organizational changes, workforce reductions, facility consolidations or closures and other cost reduction initiatives. These types of activities are complex and can require a significant amount of management and other employees’ time and focus, which may divert attention from operating and growing our business. …”see in full comparison
“We own, lease, operate or have invested in businesses that have manufacturing facilities in Mexico, Brazil and Europe, and have customers and suppliers located outside the United States. 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. …”see in full comparison
“We own, lease, operate or have invested in businesses that have manufacturing facilities in Mexico, Brazil and Europe, and have customers and suppliers located outside the U.S. 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. …”see in full comparison
Full comparison: every changed paragraph (16)
Our customers are often able to delay replacing rail equipment during economic downturns. Factors affecting the level of customer spending for our products and services include general economic conditions, such as inflation, slower economic growth and the potential for a recession and other factors such as business confidence in future economic conditions, fearschanging oftrade recession,policies and the availability and cost of efficient capital, among other factors. WorldwideDomestic and worldwide economic conditions remain uncertain. As global economic conditions continue to be volatile or economic uncertainty increases, trends in business spending may become increasingly unpredictable and subject to reductions and fluctuations. Unfavorable economic conditions may lead our customers to delay or reduce purchases of our products and services, result in lower sales volumes, lower prices, lower lease utilization rates, and decreased revenues and profits.
Changes in global trade policies, including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners, remain uncertain and could impact our financial condition or results of operations.
The current U.S. presidential administration has announced a wide range of tariffs on imports from many countries. In response to these tariffs, certain of the impacted countries have announced, and in some cases imposed, counter tariffs on goods that are imported from the U.S. The imposition of such tariffs have resulted in increased costs. We are continuing to monitor the rapidly evolving tariff and global trade policies and are working with our suppliers to mitigate potential impacts on our business. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as recent legal challenges to the U.S.'s imposition of tariffs, negotiations between the U.S. and affected countries, the responses of other countries or regions, relief that may be granted, availability and cost of alternative sources of supply and demand for our products in affected markets. The uncertainty of the tariffs, including a potential increase in costs and decrease in demand for our products, could heighten the other risks factors and uncertainties discussed in this Item 1A, or in other reports we periodically file with the SEC, and impact our financial condition or results of operations. Furthermore, our competitors may be less exposed to tariff impacts or in a better position to mitigate the increased costs of tariffs.
From time-to-time,time to time, we, or our joint ventures, undertake strategic capital projects in order to enhance, expand and/or upgrade facilities and operational capabilities including by insourcing production of certain components in our manufacturing operations. Our ability, and our joint ventures’ respective abilities, to complete these projects on time and within budget, and for us to realize the anticipated increased revenues or lower costs, as applicable, or otherwise realize acceptable returns on these investments or other strategic capital projects that may be undertaken are subject to a number of risks. Many of these risks are beyond our control, including a variety of market, operational, permitting, and labor related factors. In addition, the cost to implement any given strategic capital project ultimately may prove to be greater than originally anticipated. If we, or our joint ventures, are not able to achieve the anticipated results from the implementation of any of these strategic capital projects, or if unanticipated implementation costs are incurred, our business, financial condition and results of operations may be adversely affected. 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.
In addition, we continually evaluate and implement upgrades and significant changes to our information technology systems. We could experience problems in connection with such implementations, including compatibility issues, training requirements, higher than expected implementation costs and other integration challenges and delays.delays; further, such implementations can require significant time and focus from management and other employees, which may divert attention from operating and growing our business. A significant problem with an implementation, integration with other systems or ongoing management and operation of our systems could negatively impact our business by disrupting operations. Such a problem could also have an adverse effect on our ability to generate and interpret accurate management and financial reports and other information on a timely basis, which could have a material adverse effect on our financial reporting system and internal controls and adversely affect our ability to manage our business.
We may build products in anticipation of a customer order, or lease railcars to a customer with the aim of selling such railcars on lease to a third-party. In such cases, the lag between production and sale results in uneven recognition of revenue and earnings over time. Our production during any given period may be concentrated in relatively few contracts, intensifying the amplitude and irregularity of our revenue streams. The timing of recognizing revenue on a railcar is also materially impacted by our decision whether to lease the railcar to a lessee, sell the railcar, or syndicate the railcar with a lease attached to an investor. In addition, we periodically sell railcars from our own lease fleet and the timing and volume of such sales are difficult to predict. As a result, comparisons of our Manufacturing or Leasing & Fleet Management Services revenue, deliveries, quarterly net gain on disposition of equipment, income and liquidity between quarterly periods within one year and between comparable periods in different years may not be meaningful and should not be relied upon as indicators of our future performance.
We may be unable to effectively implement capacity rationalization initiatives, cost reductions and/or restructuring efforts and our business might be adversely affected.
From time to time we engage in capacity rationalization initiatives and/or similar restructuring plans, which may include organizational changes, workforce reductions, facility consolidations or closures and other cost reduction initiatives. These types of activities are complex and can require a significant amount of management and other employees’ time and focus, which may divert attention from operating and growing our business. If we do not effectively manage and implement these activities, or any future similar activities, expected efficiencies and benefits might be delayed or not realized, and our operations and business could be disrupted. Risks associated with these actions include potential adverse effects on employee morale, loss of accumulated knowledge and/or inefficiency, unfavorable political responses to such actions, unforeseen delays in implementation, unexpected costs, and the failure to meet operational targets, any of which may impair our ability to achieve anticipated benefits, harm our business, or have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.
A significant portion of our revenue is generated from a few major customers. In 2024,2025, revenue from onetwo customercustomers accounted forrepresented approximately 10%26% of Consolidated Revenue. No other customers accounted for greater than 10% of Consolidated Revenue. Although we have some long-term contractual relationships with our major customers, we cannot be assured that we will continue to have good relations with our customers, or that our customers will continue to purchase or lease our products or services, or will continue to do so at historical levels, or will renew their existing contracts with us. A reduction in the purchasing or leasing of our products, a termination of our services by one or more of our major customers, a decline in the financial condition of a major customer, or our failure to replace expiring customer contracts with new customer contracts on satisfactory terms could result in a loss of business and have an adverse effect on our business and operating results.
In February 2022, the Russian Federation commenced a military invasion of Ukraine. 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. Some of our operations, particularly in Europe, have experienced higher energy costs, an increase in the price and decrease in the availability of steel and certain other materials and components, disruptions in transportation and supply chains, and higher manufacturing and borrowing costs.costs as a result of the ongoing war in Ukraine. Not all of these costs are subject to escalation and related clauses which allow us to pass through costs to our customers, and there is a risk we will not be successful in renegotiating or managing the implementation of existing agreements to allow us to pass through these increased prices of manufacturing. TheseWe negativecannot factorspredict maythe continuefull toimpact occurof alongsuch withconflict, the economic sanctions imposed on Russia, and the related economic and geopolitical instability, including instability in the manufacturing and freight rail markets. Civil unrest and armed conflicts, including the war in Ukraine, can cause other risks to our businessbusiness, thatsuch may emerge which include, among others,as prolonged heightened inflation, macroeconomic interventions in response to inflation, cyber disruptions or attacks, and disruptions in credit markets. 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 related to the war in Ukraine or civil unrest or armed conflict in other geographies could have an adverse effect on our operations and business outlook.
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. Inflation may cause our customers to reduce or delay orders for our goods and services thereby causing a decrease in our sales. The United StatesU.S. 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. Additionally, increased borrowing costs faced by our customers could result in decreased demand for our products. Monetary interventions also risk a sustained decline in aggregate demand, either globally or within one or more geographic markets. A decline in demand for our products would have a negative impact on our business and results of operations.
We own, lease, operate or have invested in businesses that have manufacturing facilities in Mexico, Brazil and Europe, and have customers and suppliers located outside the U.S. 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. If we do not have appropriate certifications, we could be unable to market and sell our rail equipment in those 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.
We own, lease, operate or have invested in businesses that have manufacturing facilities in Mexico, Brazil and Europe, and have customers and suppliers located outside the United States. 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. If we do not have appropriate certifications, we could be unable to market and sell our rail equipment in those 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.
Legislation and new rules to regulate emission of greenhouse gases (GHGs) have been introducedproposed in numerous state legislatures, the U.S. 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. 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.
Our internal control over financial accounting and reporting may not detect all errors or omissions in the financial statements.
If we fail to maintain adequate internal controls over financial accounting, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. No system of internal control provides absolute assurance that the financial statements are accurate and free of material error.
Management's Discussion & Analysis (MD&A)
New heading “Lease fleet – Nonrecourse”
New heading “Corporate and other – Recourse”
Removed heading “Maintenance Services Segment”
Removed heading “Asset Impairment, Disposal and Exit Costs, Net”
Removed heading “Nonrecourse Credit Facilities”
Removed heading “Other Credit Facilities”
Largest changes
“We continue to operate in an environment characterized by ongoing macroeconomic uncertainty, including inflationary pressures, potential impacts from global trade tensions and tariffs and volatility in foreign exchange and interest rates. We believe that a sustained economic slowdown or continued supply chain disruption could significantly affect our operations and financial performance. Such developments could impact our business both directly and indirectly. Direct impacts may include higher costs for raw materials, labor and manufacturing inputs. …”see in full comparison
“Overall, demand in the marketplace remains steady for our products and services. 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. Despite these challenges, we were able to deliver strong results and accomplish the following in 2024:”see in full comparison
“Asset Impairment, Disposal and Exit Costs, Net”see in full comparison
When we perform a quantitative assessment, we exercise judgment to develop estimates of the fair values 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 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.see in full comparisonIn 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.
“With a global footprint, supply chain and customer base, we are focused on navigating the impact of changing trade policies, such as tariffs, as well as general geopolitical and macroeconomic uncertainty.”see in full comparison
Full comparison: every changed paragraph (105)
We operate in two reportable segments:
1.
Manufacturing - We design, build and market freight railcars in North America and Europe. We are also a leading provider of freight railcar wheel services, component parts, maintenance and retrofitting services in North America.
2.
Leasing & Fleet Management - We own a lease fleet of railcars that originate primarily from our manufacturing operations. We offer railcar management, regulatory compliance services and leasing services to railroads and other railcar owners in North America. We also place railcars on lease to customers and sell the railcars with leases attached to investors.
We operate an integrated business model which we believe is difficult to duplicate and provides greater value for our customers and investors.
We continue to operate in an environment characterized by ongoing macroeconomic uncertainty, including inflationary pressures, potential impacts from global trade tensions and tariffs and volatility in foreign exchange and interest rates. We believe that a sustained economic slowdown or continued supply chain disruption could significantly affect our operations and financial performance. Such developments could impact our business both directly and indirectly. Direct impacts may include higher costs for raw materials, labor and manufacturing inputs. Indirectly, a weaker macroeconomic environment could reduce demand for new railcar orders and leasing activity.
Despite these potential headwinds, we believe we are well-positioned to continue to execute on our multi-year strategy. In addition, we believe our integrated business model provides flexibility across economic cycles. We maintain a diversified customer base and disciplined approach to managing working capital and operating costs.
While we believe that macroeconomic uncertainty is affecting demand across the markets in which we operate, we delivered strong results in 2025, which included the following:
The financial results for 2024 reflect a successful year executing on our multi-year strategy outlined last year. 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. 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. 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.
Increased Net earnings attributable to Greenbrier by $44.0 million or 27.5% compared to the prior year.
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.
Increased our owned lease fleet by 1,500 railcars, representing a 9.7% increase since August 31, 2024.
Renewed and extended our $600 million domestic revolving facility and $250 million term loan in May 2025, extending the maturity date of both instruments until 2030.
We believe theseour results demonstrate the benefit ofhighlight our continued focus on our strategic plan,plan andas we remain focused on increasing recurring revenue, expanding our aggregate gross margin and raising our return on invested capital. Recurring revenue is defined as Leasing & Fleet Management Services revenue excluding the impact of syndication transactions.
With a global footprint, supply chain and customer base, we are focused on navigating the impact of changing trade policies, such as tariffs, as well as general geopolitical and macroeconomic uncertainty.
In the fourth quarter of 2025, we continued the rationalization of our European operations and approved the closure of manufacturing facilities in Poland and Türkiye. Combined with the closure of one of our manufacturing facilities in Romania announced earlier this year, our European headcount is expected to be reduced by 30% while maintaining the same production capacity.
Margin as a percentage of Revenue improved by 4.6%2.9% to 15.8%18.7% for the year ended August 31, 2024.2025. 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$35.6 million or 84.0%11.0% compared to the prior year. The increase was primarily attributed to an increase in Margin in our Manufacturing and Leasing & Fleet Management Services segments during the year ended August 31, 2024.2025. The prior year also included $46.7 millionincrease in AssetMargin impairment,was disposal,primarily due to operating efficiencies in Manufacturing and exithigher costs,rents net.associated with a larger fleet and improved lease rates in Leasing & Fleet Management.
Net cash provided by operating activities increased $258.4 million compared to the prior year. 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.
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.
Our railcar backlog was 16,600 units with an estimated value of $2.2 billion as of August 31, 2025, with expected deliveries extending into 2027 and beyond. Our backlog includes approximately $590$460 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. Approximately 3%12% of backlog units and estimated value as of August 31, 20242025 was associated with our Brazilian manufacturing operation which is accounted for under the equity method.
Change In Reportable Segments
Effective September 1, 2024, we combined our former Maintenance Services and Manufacturing segments into a single reportable segment, Manufacturing. The combined Manufacturing reportable segment reflects a comprehensive production operation that allows us to streamline production processes and resources to better serve our customers. Separately, we renamed our former Leasing & Management Services reportable segment to Leasing & Fleet Management. These changes reflect the realignment of our organizational structure and reporting regularly provided to our chief operating decision maker to assess performance and allocate resources. These changes had no impact on our consolidated results of operations or financial position. Prior period segment results have been recast to reflect our new reportable segments. Financial information about our reportable segments as well as geographic information is located in Note 17 - Segment Information to the Consolidated Financial Statements.
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.
Performance for our reportable segments is evaluated based on operatingEarnings profit.from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.
* Not meaningful
The 10.1%8.6% decrease in Revenue for the year ended August 31, 20242025 as compared to the prior year was primarily due to aan 10.2%8.5% decrease in Manufacturingdeliveries. Revenue.This Thewas decreasepartially offset by a 7.2% increase in ManufacturingLeasing & Fleet Management Revenue was primarily attributed to aan 10.4% decreaseincrease in deliveries.rents associated with growth of the fleet and improved lease rates.
The 14.8%11.8% decrease in Cost of revenue for the year ended August 31, 20242025 as compared to the prior year was primarily due to aan 14.1% decrease in Manufacturing Cost of revenue. The decrease in Manufacturing Cost of revenue was primarily attributed to a 10.4%8.5% decrease in deliveries and operating efficiencies within our Manufacturing segment during the year ended August 31, 2024.2025.
Margin as a percentage of Revenue was 15.8% and 11.2% for the years ended August 31, 2024 and 2023, respectively. 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.
TheMargin $97.6percentage millionincreased increase in Net earnings attributable to Greenbrier2.9% for the year ended August 31, 2024 as2025 compared to the prior year was primarily due to theoperating following:efficiencies in our Manufacturing segment.
The $44.0 million increase in Net earnings attributable to Greenbrier for the year ended August 31, 2025 as compared to the prior year was primarily due to the following:
$117.4$49.0 million increase in Margin for the year ended August 31, 20242025 primarily due to operating efficiencies and a favorable product mix within our Manufacturing segment and ana $27.3 million increase in rents associated with agrowth largerof leasethe fleet and improved lease rates in our Leasing & Fleet Management Services segment.
$25.1 million decrease in Interest and foreign exchange expense primarily attributed to higher interest income and a $10.6 million increase in foreign exchange gain primarily due to the change in the Mexican Peso's foreign exchange rate relative to the U.S. Dollar during the year ended August 31, 2025.
$46.7 million in Asset impairment, disposal and exit costs, net for the year ended August 31, 2023 primarily related to the sale and closure of our Gunderson Facility.
$37.4$29.4 million increase in Income tax expense associateddue withto higher pre-tax earnings and geographic mix of earnings during the year ended August 31, 2024.2025.
$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.
For discussion related to the results of operations and changes in financial condition for 20232024 compared to 20222023 refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 20232024 Form 10-K, which was filed with the United StatesU.S. Securities and Exchange Commission on October 25,24, 2023.2024.
* Not meaningful
Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcarsrailcar products and fromcomponents theand performing sustainable conversion ofservices. existingManufacturing oralso in-servicegenerates railcarsrevenue throughby ourproviding facilitiesrailcar inmaintenance North America and Europe.services.
Manufacturing Revenue decreased $344.1$321.2 million or 10.2%9.7% for the year ended August 31, 20242025 compared to the prior year. The decrease in Revenue was primarily attributed to aan 10.4%8.5% decrease in deliveries during the year ended August 31, 2024.2025.
Manufacturing Cost of revenue decreased $434.5$356.4 million or 14.1%12.2% for the year ended August 31, 20242025 compared to the prior year. The decrease in Cost of revenue was primarily attributed to aan 10.4%8.5% decrease in the volume of deliveries and favorableoperating product mixefficiencies during the year ended August 31, 2024.2025.
Manufacturing Margin as a percentage of Revenue increased 3.9%2.4% for the year ended August 31, 20242025 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, 2024.2025.
Manufacturing Operating profit increased $140.7 million or 99.9% for the year ended August 31, 2024 compared to the prior year. The 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.
Maintenance Services Segment
Our Maintenance Services segment primarily generates revenue from railcar component manufacturing and servicing, providing railcar maintenance services and scrapping wheels and other components.
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.
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.
MaintenanceManufacturing ServicesEarnings Marginfrom as a percentage of Revenueoperations increased 1.2%$18.8 million or 6.1% for the year ended August 31, 20242025 compared to the prior year. The increase in Margin percentage was primarily attributed to aoperating favorable change in product mixefficiencies during the year ended August 31, 2024. This was2025 partially offset by aan 8.5% decrease in scrapdeliveries metalcompared pricing duringto the yearprior ended August 31, 2024.year.
Maintenance Services Operating profit decreased $9.8 million or 26.6% for the year ended August 31, 2024 compared to the prior year. 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.
What changed in the latest 10-Q
Risk Factors
New heading “Changes in global trade policies, including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners, remain uncertain and could impact our financial condition or results of operations.”
Largest changes
“In May 2026, the U.S. Customs and Border Protection issued a Notice of Determination (the Determination) that the Company evaded antidumping and countervailing duties (AD/CVD) on certain duty orders (the Orders) of certain freight rail couplers (FRCs) attached to newly-built railcars during the Period of Investigation dating to April 2024. …”see in full comparison
“Changes in global trade policies, including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners, remain uncertain and could impact our financial condition or results of operations.”see in full comparison
“The current U.S. presidential administration has announced a wide range of tariffs on imports from many countries. In response to these tariffs, certain of the impacted countries have announced, and in some cases imposed, counter tariffs on goods that are imported from the U.S. The imposition of such tariffs have resulted in increased costs. We are continuing to monitor the rapidly evolving tariff and global trade policies and are working with our suppliers to mitigate potential impacts on our business. …”see in full comparison
“In April 2026, tariffs were imposed on freight rail tank cars that make entry into the U.S. under Section 232 of the Trade Expansion Act of 1962 on steel and aluminum. Ongoing uncertainty in these areas, including the administration of trade policy in North America, has adversely affected and may continue to adversely affect North American industry-wide demand for new railcars, and therefore, our results of operations. Furthermore, our competitors may be less exposed to tariff impacts or in a better position to mitigate the increased costs of tariffs.”see in full comparison
“The uncertainty of the tariffs, including a potential increase in costs and decrease in demand for our products, could heighten the other risks factors and uncertainties discussed in this Item 1A, or in other reports we periodically file with the SEC, and impact our financial condition or results of operations.”see in full comparison
Full comparison: every changed paragraph (6)
This Form 10-Q should be read in conjunction with Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2025. ThereExcept as set forth below, there have been no material changes in the risk factors described in our Annual Report on Form 10-K for the year ended August 31, 2025.
Changes in global trade policies, including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners, remain uncertain and could impact our financial condition or results of operations.
The current U.S. presidential administration has announced a wide range of tariffs on imports from many countries. In response to these tariffs, certain of the impacted countries have announced, and in some cases imposed, counter tariffs on goods that are imported from the U.S. The imposition of such tariffs have resulted in increased costs. We are continuing to monitor the rapidly evolving tariff and global trade policies and are working with our suppliers to mitigate potential impacts on our business. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as recent legal challenges to the U.S.'s imposition of tariffs, negotiations between the U.S. and affected countries, the responses of other countries or regions, relief that may be granted, availability and cost of alternative sources of supply and demand for our products in affected markets.
The uncertainty of the tariffs, including a potential increase in costs and decrease in demand for our products, could heighten the other risks factors and uncertainties discussed in this Item 1A, or in other reports we periodically file with the SEC, and impact our financial condition or results of operations.
In May 2026, the U.S. Customs and Border Protection issued a Notice of Determination (the Determination) that the Company evaded antidumping and countervailing duties (AD/CVD) on certain duty orders (the Orders) of certain freight rail couplers (FRCs) attached to newly-built railcars during the Period of Investigation dating to April 2024. The Determination ordered the Company to rectify any noncompliance with provisions of admission of railcars to which FRCs subject to the Orders were affixed and to henceforth require the Company to file formal consumption entries for FRCs subject to the Orders. The Company has filed an administrative appeal of the Determination. Because matters of this nature are subject to inherent uncertainties, and unfavorable rulings or developments, there can be no certainty that the Company will prevail in our administrative appeal or that we may not ultimately incur charges attributable to AD/CVD on FRC dating back to April 2024 that are not currently recorded as liabilities. In addition, the Company could also be subject to future assessments of additional duties or tariffs owed in respect of other imports beyond what is presently included in the Determination. The outcome and costs of these matters cannot be predicted with certainty and may have a material adverse effect on our consolidated results of operations, financial position, or liquidity.
In April 2026, tariffs were imposed on freight rail tank cars that make entry into the U.S. under Section 232 of the Trade Expansion Act of 1962 on steel and aluminum. Ongoing uncertainty in these areas, including the administration of trade policy in North America, has adversely affected and may continue to adversely affect North American industry-wide demand for new railcars, and therefore, our results of operations. Furthermore, our competitors may be less exposed to tariff impacts or in a better position to mitigate the increased costs of tariffs.
Management's Discussion & Analysis (MD&A)
Largest changes
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. When we perform a qualitative assessment, we analyze macroeconomic and industry conditions, financial performance, and cost estimates associated with a particular reporting unit. This assessment requires subjectivity based on cumulative information available at the assessment date. If a qualitative assessment indicates it is more likely than not that the carrying value of a reporting unit exceeds its respective fair value, a quantitative assessment is performed. We performed a qualitative assessment for our annual goodwill impairment test as of March 1, 2026 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. For further information, see Note 5 - Goodwill to the Condensed Consolidated Financial Statements.see in full comparison
We continue to execute on our strategic plan of increasing recurring revenue, expanding aggregate gross margin and raising return on invested capital. Recurring revenue is defined as Leasing & Fleet Management revenue excluding the impact of syndication transactions.see in full comparisonWith a global footprint, supply chain and customer base, we are focused on navigating the impact of changing trade policies, such as tariffs, as well as general geopolitical and macroeconomic uncertainty.
“North American revolving credit facility – As of February 28, 2026, 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 North American credit facility is secured by substantially all our U.S. assets not otherwise pledged as security for term loans, the warehouse credit facility, or the railcar asset-backed securities. …”see in full comparison
“North American revolving credit facility – As of May 31, 2026, 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 North American credit facility is secured by substantially all our U.S. assets not otherwise pledged as security for term loans, the warehouse credit facility, or the railcar asset-backed securities. …”see in full comparison
“We are monitoring developments related to tariffs and trade policies, including those imposed under Section 232 of the Trade Expansion Act of 1962 on steel and aluminum, the impact of the recent Notice of Determination on freight couplers from the U.S. Customs and Border Protection and the administration of trade policy in North America. Uncertainty in these areas has adversely affected, and may continue to adversely affect, North American industry-wide demand for new railcars, including demand for our products, and therefore, our results of operations. …”see in full comparison
“Our Leasing senior term debt was amended in May 2026 on similar terms, providing for an additional $125.0 million available under a delayed draw facility through November 2026 and extending the maturity date from August 2027 to May 2032. The Leasing senior term debt bears interest at a rate of SOFR plus 1.625%, with principal of $2.6 million paid quarterly in arrears and a balloon payment of $237.0 million due upon maturity. Interest rate swap agreements cover nearly 100% of the principal balance to swap the floating interest rate to fixed rates.”see in full comparison
Full comparison: every changed paragraph (77)
We operate in two reportable segments: Manufacturing and Leasing & Fleet Management. Our segments are operationally integrated. The Manufacturing segment designs, builds and markets freight railcars and component parts in North America and Europe. We also perform sustainable conversions and railcar maintenance, which includes wheel and axle services. The Leasing & Fleet Management segment owns and leases approximately 16,80020,600 railcars as of FebruaryMay 28,31, 2026. We offer railcar management, regulatory compliance services and leasing services to railroads and other railcar owners in North America.
We continue to operate in an environment characterized by ongoing macroeconomic uncertainty, including inflationary pressures, potential impacts from global trade tensions and tariffs, volatility in foreign exchange and interest rates and geopolitical instability. WeThese believeconditions, thatalong with the potential for a sustained economic slowdown or continuedongoing supply chain disruptiondisruptions, could significantlymaterially and adversely affect our operations and financial performance. Such developments could impact our business both directly and indirectly. Direct impacts may include higherincreased costs for raw materials, laborlabor, and manufacturing inputs.inputs, Indirectly,while aindirect weakerimpacts macroeconomicmay environmentinclude could reducereduced demand for new railcar orders and leasing activity.
We are monitoring developments related to tariffs and trade policies, including those imposed under Section 232 of the Trade Expansion Act of 1962 on steel and aluminum, the impact of the recent Notice of Determination on freight couplers from the U.S. Customs and Border Protection and the administration of trade policy in North America. Uncertainty in these areas has adversely affected, and may continue to adversely affect, North American industry-wide demand for new railcars, including demand for our products, and therefore, our results of operations. We remain focused on managing and, to the extent possible, mitigating the potential impacts of these evolving conditions on our business.
We continue to execute on our strategic plan of increasing recurring revenue, expanding aggregate gross margin and raising return on invested capital. Recurring revenue is defined as Leasing & Fleet Management revenue excluding the impact of syndication transactions. With a global footprint, supply chain and customer base, we are focused on navigating the impact of changing trade policies, such as tariffs, as well as general geopolitical and macroeconomic uncertainty.
Our railcar backlog was 15,20013,800 units with an estimated value of $2.1$2.0 billion as of FebruaryMay 28,31, 2026, with deliveries extending into 20272028 and beyond. Our backlog includes approximately $650$720 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. Approximately 13%12% of backlog units and 12%13% of estimated backlog value as of FebruaryMay 28,31, 2026 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.
Three Months Ended FebruaryMay 28,31, 2026 Compared to the Three Months Ended FebruaryMay 28,31, 2025
Revenue decreased $174.6$266.2 million or 22.9%31.6% for the three months ended FebruaryMay 28,31, 2026 as compared to the three months ended FebruaryMay 28,31, 2025 primarily due to a 32.0%38.5% decrease in deliveries and a change in railcar manufacturing product mix.
Cost of revenue decreased $105.5$195.8 million or 16.9%28.3% for the three months ended FebruaryMay 28,31, 2026 as compared to the three months ended FebruaryMay 28,31, 2025 primarily due to a 32.0%38.5% decrease in deliveries and a change in railcar manufacturing product mix.
Margin percentage decreased 6.4%3.9% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025 primarily due to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the three months ended FebruaryMay 28,31, 2026.
Net earnings attributable to Greenbrier decreased $36.9$41.2 million for the three months ended FebruaryMay 28,31, 2026 as compared to the three months ended FebruaryMay 28,31, 2025 primarily due to:
$18.3$15.1 million changedecrease in Income tax expense due to lower pre-tax earnings and net favorable discrete items related to foreign currency exchange rates at our U.S. Dollar denominated foreign operations.subsidiaries.
$8.0 million decrease in Interest and foreign exchange expense resulting from the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar and higher interest income.
$8.8 million change in Net (earnings) loss attributable to noncontrolling interest primarily a result of lower railcar deliveries at our Mexican railcar manufacturing joint venture.
Manufacturing Revenue decreased $171.4$264.3 million or 24.0%33.3% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025 primarily due to a 32.0%38.5% decrease in deliveries and a change in railcar manufacturing product mix.
Manufacturing Cost of revenue decreased $105.8$196.0 million or 17.5%29.1% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to a 32.0%38.5% decline in deliveries and a change in railcar manufacturing product mix during the three months ended FebruaryMay 28,31, 2026.
Manufacturing Margin percentage decreased 7.4%5.3% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the three months ended FebruaryMay 28,31, 2026.
Manufacturing Earnings from operations decreased $60.1$68.1 million for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to a 32.0%38.5% decrease in deliveries and a change in railcar manufacturing product mix during the three months ended FebruaryMay 28,31, 2026.
Leasing & Fleet Management Revenue decreased $3.2$1.9 million or 6.5%3.9% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to a $2.0$0.9 million decreasein lower lease revenue primarily associated with utilization based arrangements and a $0.7 million decline in interim rent on leased railcars for syndication during the three months ended FebruaryMay 28,31, 2026.
Leasing & Fleet Management Cost of revenue increased $0.3$0.2 million or 1.7%1.1% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The increase was primarily due to ongoinghigher costs relatedfrom toa servicinglarger leasedlease railcars for syndicationfleet during the three months ended FebruaryMay 28,31, 2026.
Leasing & Fleet Management Margin percentage decreased 3.1%1.9% for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to ongoinglower costslease relatedrevenue toassociated servicingwith leasedutilization railcarsbased for syndicationarrangements during the three months ended FebruaryMay 28,31, 2026.
Leasing & Fleet Management Earnings from operations increaseddecreased $0.9$1.6 million for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025. The increasedecrease was primarily attributed to lower lease revenue primarily associated with utilization based arrangements and a $3.4decline in interim rent on leased railcars for syndication during the three months ended May 31, 2026. This was partially offset by a $0.9 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet partially offset by a decrease in interim rent on leased railcars for syndication during for the three months ended FebruaryMay 28,31, 2026.
Selling and administrative expense was $57.4$55.2 million for the three months ended FebruaryMay 28,31, 2026 compared to $64.6$65.9 million for the prior comparable period. The $7.2$10.7 million decrease was primarily attributed to lower employee-related costs for the three months ended FebruaryMay 28,31, 2026.
Net gain on disposition of equipment was $13.0$6.0 million for the three months ended FebruaryMay 28,31, 2026 compared to $9.6$7.0 million for the prior comparable period. The increasedecrease in Net gain on disposition of equipment was primarily attributed to higherlower sales of assets from our lease fleet during the three months ended FebruaryMay 28,31, 2026.
The $8.0$3.3 million decreaseincrease in Interest and foreign exchange expense for the three months ended FebruaryMay 28,31, 2026 compared to the three months ended FebruaryMay 28,31, 2025 was primarily attributed to the change in the Brazilian Real's and Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar and higher interest income during the three months ended FebruaryMay 28,31, 2026.
For the three months ended February 28, 2026, we had income tax expense of $1.7 million on pre-tax income of $11.4 million for an effective tax rate of 14.9%. The effective tax rate was impacted by net favorable discrete items related to foreign currency exchange rates at our U.S. Dollar denominated foreign operations.
For the three months ended FebruaryMay 28,31, 2025,2026, we had income tax expense of $20.0$3.0 million on pre-tax income of $61.9$15.4 million for an effective tax rate of 32.3%.19.5%. The effective tax rate was primarily impacted by net unfavorablefavorable discrete items related to our foreign subsidiaries.
For the three months ended May 31, 2025, we had income tax expense of $18.1 million on pre-tax income of $79.4 million for an effective tax rate of 22.8%. The effective tax rate benefited from net favorable discrete items related to our foreign subsidiaries.
Earnings from unconsolidated affiliates were $4.2$5.1 million and $4.3$6.2 million for the three months ended FebruaryMay 28,31, 2026 and FebruaryMay 28,31, 2025, respectively. The decrease was primarily due to lower earnings at Axis, a joint venture which manufacturers railcar components, for the three months ended May 31, 2026.
Net (earnings) loss attributable to noncontrolling interest was $1.1a loss of $1.4 million for the three months ended FebruaryMay 28,31, 2026 compared to $5.7earnings of $7.4 million for the three months ended FebruaryMay 28,31, 2025. Net (earnings) loss 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. The $4.6$8.8 million change from the prior year is primarily a result of ana increasedecrease in earnings due to higherlower railcar deliveries at our Mexican railcar manufacturing joint venture.
SixNine Months Ended FebruaryMay 28,31, 2026 Compared to the SixNine Months Ended FebruaryMay 28,31, 2025
Revenue decreased $344.4$610.6 million or 21.0%24.6% for the sixnine months ended FebruaryMay 28,31, 2026 as compared to the sixnine months ended FebruaryMay 28,31, 2025 primarily due to a 29.2%32.7% decrease in deliveries and a change in railcar manufacturing product mix.
Cost of revenue decreased $205.0$400.8 million or 15.5%19.9% for the sixnine months ended FebruaryMay 28,31, 2026 as compared to the sixnine months ended FebruaryMay 28,31, 2025 primarily due to a 29.2%32.7% decrease in deliveries and a change in railcar manufacturing product mix.
Margin percentage decreased 5.7%5.1% for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025 primarily due to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the sixnine months ended FebruaryMay 28,31, 2026.
Net earnings attributable to Greenbrier decreased $55.8$97.0 million for the sixnine months ended FebruaryMay 28,31, 2026 as compared to the sixnine months ended FebruaryMay 28,31, 2025 primarily due to:
$39.4$54.5 million decrease in Income tax expense due to lower pre-tax earnings.earnings and net favorable discrete items related to our foreign subsidiaries.
$20.9 million increase in Net gain on disposition of equipment primarily attributed to higher sales of assets from our lease fleet.
$15.9 million decrease in Interest and foreign exchange expense resulting from the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar and higher interest income.
$19.9 million increase in Net gain on disposition of equipment primarily attributed to higher sales of assets from our lease fleet.
$12.6 million decrease in Interest and foreign exchange expense primarily attributed to higher interest income and the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar.
Manufacturing Revenue decreased $345.3$609.6 million or 22.4%26.1% for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025 primarily due to a 29.2%32.7% decrease in deliveries and a change in railcar manufacturing product mix.
Manufacturing Cost of revenue decreased $206.3$402.3 million or 16.0%20.5% for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to a 29.2%32.7% decline in deliveries and a change in railcar manufacturing product mix during the sixnine months ended FebruaryMay 28,31, 2026.
Manufacturing Margin percentage decreased 6.9%6.4% for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the sixnine months ended FebruaryMay 28,31, 2026.
Manufacturing Earnings from operations decreased $133.1$201.2 million for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to a 29.2%32.7% decrease in deliveries and a change in railcar manufacturing product mix during the sixnine months ended FebruaryMay 28,31, 2026.
Leasing & Fleet Management Revenue increased $0.9 million or 1.0% for the six months ended February 28, 2026 compared to the six months ended February 28, 2025. The increase was primarily attributed to a $4.2 million increase in rents associated with growth of the lease fleet and improved lease rates for the six months ended February 28, 2026. This was partially offset by a $2.2 million decrease in interim rent on leased railcars for syndication during the six months ended February 28, 2026.
Leasing & Fleet Management Cost of revenue increased $1.3 million or 3.8% for the six months ended February 28, 2026 compared to the six months ended February 28, 2025. The increase was primarily due to ongoing costs related to servicing leased railcars for syndication and from a larger lease fleet during the six months ended February 28, 2026.
Leasing & Fleet Management Margin percentageRevenue decreased 1.0%$1.0 million or 0.7% for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025. The decrease was primarily attributed to ongoinga costs$2.9 relatedmillion todecrease servicingin interim rent on leased railcars for syndication during the nine months ended May 31, 2026 and a $1.5 million decrease in management services revenue. This was partially offset by a $3.3 million increase in lease revenue primarily associated with growth of the lease fleet and improved lease rates duringfor the sixnine months ended FebruaryMay 28,31, 2025.2026.
Leasing & Fleet Management EarningsCost fromof operationsrevenue increased $23.0$1.5 million or 2.8% for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025. The increase was primarily attributeddue to aongoing $21.0costs millionrelated increaseto inservicing netleased gainrailcars onfor dispositionsyndication of equipmentand from highera sales of assets from ourlarger lease fleet and increase in rents associated with growth ofduring the lease fleet and improved lease rates for the sixnine months ended FebruaryMay 28,31, 2026.
Leasing & Fleet Management Margin percentage decreased 1.3% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The decrease was primarily attributed to ongoing costs related to servicing leased railcars for syndication partially offset by improved lease rates during the nine months ended May 31, 2025.
Leasing & Fleet Management Earnings from operations increased $21.4 million for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The increase was primarily attributed to a $20.1 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet and increase in rents associated with growth of the lease fleet and improved lease rates for the nine months ended May 31, 2026.
Selling and administrative expense was $117.3$172.5 million for the sixnine months ended FebruaryMay 28,31, 2026 compared to $126.6$192.5 million for the prior comparable period. The $9.3$20.0 million decrease was primarily attributed to lower employee-related costs for the sixnine months ended FebruaryMay 28,31, 2026.
Net gain on disposition of equipment was $30.7$36.7 million for the sixnine months ended FebruaryMay 28,31, 2026 compared to $9.8$16.8 million for the prior comparable period. The increase in Net gain on disposition of equipment was primarily attributed to higher sales of assets from our lease fleet during the sixnine months ended FebruaryMay 28,31, 2026.
The $15.9$12.6 million decrease in Interest and foreign exchange expense for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025 was primarily attributed to higher interest income and the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar and higher interest income during the sixnine months ended FebruaryMay 28,31, 2026.
For the six months ended February 28, 2026, we had income tax expense of $14.0 million on pre-tax income of $57.0 million for an effective tax rate of 24.6%. The effective tax rate was impacted by net favorable discrete items related to foreign currency exchange rates at our U.S. Dollar denominated foreign operations.
For the sixnine months ended FebruaryMay 28,31, 2025,2026, we had income tax expense of $53.4$17.0 million on pre-tax income of $150.3$72.4 million for an effective tax rate of 35.5%.23.5%. The effective tax rate was primarily impacted by net unfavorablefavorable discrete items related to our foreign subsidiaries.
For the nine months ended May 31, 2025, we had income tax expense of $71.5 million on pre-tax income of $229.7 million for an effective tax rate of 31.1%. The effective tax rate was impacted by net unfavorable discrete items related to our foreign subsidiaries.
On July 4, 2025, the U.S. enacted H.R. 1, commonly referred to as the One Big Beautiful Bill Act (OBBBA). We are still assessing the impact of OBBBA but do not expect the provisions to have a material impact on our effective tax rate.
Earnings from unconsolidated affiliates were $8.2$13.3 million and $8.4$14.6 million for the sixnine months ended FebruaryMay 28,31, 2026 and 2025, respectively. The decrease was primarily due to lower earnings at Axis, a joint venture who manufacturers railcar components, for the nine months ended May 31, 2026.
Net (earnings) loss attributable to noncontrolling interest was $0.2a loss of $1.6 million for the sixnine months ended FebruaryMay 28,31, 2026 compared to $1.9earnings of $5.5 million for the sixnine months ended FebruaryMay 28,31, 2025. Net (earnings) loss 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. The $7.1 million change from the prior year is primarily a result of a decrease in earnings due to a change in railcar manufacturing product mix at our Mexican railcar manufacturing joint venture.
We continue to be financed through cash generated from operations and borrowings. At FebruaryMay 28,31, 20262026, Cash and cash equivalents and Restricted cash were $563.0$322.8 million, ana increasedecrease of $236.6$3.6 million from $326.4 million at August 31, 2025.
The $206.4$159.6 million increasedecrease in Net cash provided by operating activities for the sixnine months ended FebruaryMay 28,31, 2026 compared to the sixnine months ended FebruaryMay 28,31, 2025 was primarily due to a $196.3$104.1 million decrease in Net earnings, a $56.4 million change in Leased railcars for syndication due to timing of syndication activity and a $97.5$19.9 million change in Net gain on disposition of equipment. This was partially offset by a $43.6 million net change in working capital accounts, primarily Accounts receivable, netpayable and accrued liabilities, Deferred revenue.revenue Thisand wasAccounts partiallyreceivable, offset by a $54.1 million decrease in Net earnings.net.
GBX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 4,000 shares, about $192.6K). Net open-market shares: -4,000 (purchases minus sales); net value about -$192.6K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-16 | Teramoto Wendy L |
Gift | 313 | — | — |
| 2026-07-13 | Glenn William |
Open-market sale | 4,000 | $48.15 | $192.6K |
| 2026-06-17 | Donfris Michael J |
Shares withheld for tax | 351 | $49.33 | $17.3K |
Well-known investors holding GBX (13F)
None of the 59 investors we track reported a position in their latest 13F.