Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2017 | Jun. 23, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GBX | |
Entity Registrant Name | GREENBRIER COMPANIES INC | |
Entity Central Index Key | 923,120 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 28,502,788 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 465,413 | $ 222,679 |
Restricted cash | 8,753 | 24,279 |
Accounts receivable, net | 267,830 | 232,517 |
Inventories | 414,012 | 365,805 |
Leased railcars for syndication | 149,119 | 144,932 |
Equipment on operating leases, net | 315,976 | 306,266 |
Property, plant and equipment, net | 330,471 | 329,990 |
Investment in unconsolidated affiliates | 110,058 | 98,682 |
Intangibles and other assets, net | 68,930 | 67,359 |
Goodwill | 43,265 | 43,265 |
Total assets | 2,173,827 | 1,835,774 |
Liabilities and Equity | ||
Accounts payable and accrued liabilities | 339,001 | 369,754 |
Deferred income taxes | 80,482 | 51,619 |
Deferred revenue | 82,006 | 95,721 |
Notes payable, net | 532,638 | 301,853 |
Commitments and contingencies (Note 13) | ||
Greenbrier | ||
Preferred stock - without par value; 25,000 shares authorized; none outstanding | ||
Common stock - without par value; 50,000 shares authorized; 28,503 and 28,205 shares outstanding at May 31, 2017 and August 31, 2016 | 0 | 0 |
Additional paid-in capital | 310,074 | 282,886 |
Retained earnings | 691,808 | 618,178 |
Accumulated other comprehensive loss | (15,661) | (26,753) |
Total equity - Greenbrier | 986,221 | 874,311 |
Noncontrolling interest | 153,479 | 142,516 |
Total equity | 1,139,700 | 1,016,827 |
Liabilities and Equity | $ 2,173,827 | $ 1,835,774 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2017 | Aug. 31, 2016 |
Preferred stock, without par value | ||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, outstanding | ||
Common stock, without par value | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares outstanding | 28,503,000 | 28,205,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | ||
Revenue | |||||
Revenue | $ 439,161 | $ 612,866 | $ 1,557,757 | $ 2,084,334 | |
Cost of revenue | |||||
Cost of revenue | 349,460 | 485,768 | 1,236,380 | 1,652,580 | |
Margin | 89,701 | 127,098 | 321,377 | 431,754 | |
Selling and administrative expense | 42,810 | 43,280 | 123,518 | 118,073 | |
Net gain on disposition of equipment | (1,581) | (311) | (4,793) | (11,326) | |
Earnings from operations | 48,472 | 84,129 | 202,652 | 325,007 | |
Other costs | |||||
Interest and foreign exchange | 7,894 | 3,712 | 15,291 | 10,565 | |
Earnings before income taxes and earnings (loss) from unconsolidated affiliates | 40,578 | 80,417 | 187,361 | 314,442 | |
Income tax expense | (8,656) | (22,449) | (53,900) | (92,902) | |
Earnings before earnings (loss) from unconsolidated affiliates | 31,922 | 57,968 | 133,461 | 221,540 | |
Earnings (loss) from unconsolidated affiliates | (681) | 1,564 | (5,253) | 2,921 | |
Net earnings | 31,241 | 59,532 | 128,208 | 224,461 | |
Net (earnings) loss attributable to noncontrolling interest | 1,582 | (24,180) | (35,887) | (74,808) | |
Net earnings attributable to Greenbrier | $ 32,823 | $ 35,352 | $ 92,321 | $ 149,653 | |
Basic earnings per common share | $ 1.12 | $ 1.22 | $ 3.16 | $ 5.13 | |
Diluted earnings per common share | [1] | $ 1.03 | $ 1.12 | $ 2.91 | $ 4.67 |
Weighted average common shares: | |||||
Basic | [2] | 29,348 | 29,059 | 29,192 | 29,182 |
Diluted | 32,690 | 32,342 | 32,515 | 32,475 | |
Dividends declared per common share | $ 0.22 | $ 0.20 | $ 0.64 | $ 0.60 | |
Manufacturing | |||||
Revenue | |||||
Revenue | $ 317,104 | $ 458,494 | $ 1,216,641 | $ 1,611,686 | |
Cost of revenue | |||||
Cost of revenue | 245,228 | 352,775 | 948,436 | 1,247,635 | |
Earnings from operations | 57,901 | 92,713 | 226,611 | 325,215 | |
Wheels & Parts | |||||
Revenue | |||||
Revenue | 85,231 | 78,417 | 237,580 | 247,604 | |
Cost of revenue | |||||
Cost of revenue | 77,985 | 69,818 | 218,460 | 224,208 | |
Earnings from operations | 4,239 | 5,811 | 12,702 | 15,720 | |
Leasing & Services | |||||
Revenue | |||||
Revenue | 36,826 | 75,955 | 103,536 | 225,044 | |
Cost of revenue | |||||
Cost of revenue | 26,247 | 63,175 | 69,484 | 180,737 | |
Earnings from operations | $ 7,084 | $ 8,298 | $ 24,363 | $ 42,668 | |
[1] | Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs (net of tax) on convertible notes Weighted average diluted common shares outstanding | ||||
[2] | Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | ||
Net earnings | $ 31,241 | $ 59,532 | $ 128,208 | $ 224,461 | |
Other comprehensive income | |||||
Translation adjustment | 8,334 | 1,477 | 5,624 | (3,655) | |
Reclassification of derivative financial instruments recognized in net earnings | [1] | 871 | 659 | 4,022 | 1,710 |
Unrealized gain (loss) on derivative financial instruments | [2] | 4,420 | 1,113 | 2,232 | (6,417) |
Other (net of tax effect) | 64 | 7 | (786) | 1 | |
Other comprehensive income | 13,689 | 3,256 | 11,092 | (8,361) | |
Comprehensive income | 44,930 | 62,788 | 139,300 | 216,100 | |
Comprehensive income attributable to noncontrolling interest | 1,582 | (24,195) | (35,887) | (74,761) | |
Comprehensive income attributable to Greenbrier | $ 46,512 | $ 38,593 | $ 103,413 | $ 141,339 | |
[1] | Net of tax effect of $0.2 million and $0.3 million for the three months ended May 31, 2017 and 2016 and $1.2 million and $0.7 million for the nine months ended May 31, 2017 and 2016. | ||||
[2] | Net of tax effect of $1.1 million and $0.3 million for the three months ended May 31, 2017 and 2016 and $0.9 million and $2.2 million for the nine months ended May 31, 2017 and 2016. |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Reclassification of derivative financial instruments recognized in net earnings (loss), tax | $ 0.2 | $ 0.3 | $ 1.2 | $ 0.7 |
Unrealized loss on derivative financial instruments, tax | $ 1.1 | $ 0.3 | $ 0.9 | $ 2.2 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | 2024 Convertible Senior Notes | 2024 Convertible Senior Notes Issuance Costs | Common Stock Shares | Additional Paid-in Capital | Additional Paid-in Capital2024 Convertible Senior Notes | Additional Paid-in Capital2024 Convertible Senior Notes Issuance Costs | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Attributable to Greenbrier | Total Attributable to Greenbrier2024 Convertible Senior Notes | Total Attributable to Greenbrier2024 Convertible Senior Notes Issuance Costs | Attributable to Noncontrolling Interest |
Beginning balance (in shares) at Aug. 31, 2015 | 28,907 | ||||||||||||
Beginning balance at Aug. 31, 2015 | $ 863,489 | $ 295,444 | $ 458,599 | $ (21,205) | $ 732,838 | $ 130,651 | |||||||
Net earnings | 224,461 | 149,653 | 149,653 | 74,808 | |||||||||
Other comprehensive income (loss), net | (8,361) | (8,314) | (8,314) | (47) | |||||||||
Noncontrolling interest adjustments | 837 | 837 | |||||||||||
Purchase of noncontrolling interest | (4) | (4) | |||||||||||
Joint venture partner distribution declared | (61,855) | (61,855) | |||||||||||
Investment by joint venture partner | 5,400 | 5,400 | |||||||||||
Restricted stock awards (net of cancellations) (in shares) | 350 | ||||||||||||
Restricted stock awards (net of cancellations) | 6,186 | 6,186 | 6,186 | ||||||||||
Unamortized restricted stock | (11,646) | (11,646) | (11,646) | ||||||||||
Restricted stock amortization | 18,483 | 18,483 | 18,483 | ||||||||||
Excess tax benefit from restricted stock awards | 2,786 | 2,786 | 2,786 | ||||||||||
Cash dividends | (17,527) | (17,527) | (17,527) | ||||||||||
Repurchase of stock | (32,373) | (32,373) | (32,373) | ||||||||||
Repurchase of stock, shares | (1,055) | ||||||||||||
Ending Balance (in shares) at May. 31, 2016 | 28,202 | ||||||||||||
Ending Balance at May. 31, 2016 | $ 989,876 | 278,880 | 590,725 | (29,519) | 840,086 | 149,790 | |||||||
Beginning balance (in shares) at Aug. 31, 2016 | 28,205 | 28,205 | |||||||||||
Beginning balance at Aug. 31, 2016 | $ 1,016,827 | 282,886 | 618,178 | (26,753) | 874,311 | 142,516 | |||||||
Net earnings | 128,208 | 92,321 | 92,321 | 35,887 | |||||||||
Other comprehensive income (loss), net | 11,092 | 11,092 | 11,092 | ||||||||||
Noncontrolling interest adjustments | 1,203 | 1,203 | |||||||||||
Joint venture partner distribution declared | (26,127) | (26,127) | |||||||||||
Restricted stock awards (net of cancellations) (in shares) | 298 | ||||||||||||
Restricted stock awards (net of cancellations) | 5,567 | 5,567 | 5,567 | ||||||||||
Unamortized restricted stock | (10,775) | (10,775) | (10,775) | ||||||||||
Restricted stock amortization | 14,645 | 14,645 | 14,645 | ||||||||||
Tax deficiency from restricted stock awards | (2,396) | (2,396) | (2,396) | ||||||||||
Cash dividends | $ (18,691) | (18,691) | (18,691) | ||||||||||
2024 Convertible Senior Notes - equity component, net of tax | $ 20,818 | $ (671) | $ 20,818 | $ (671) | $ 20,818 | $ (671) | |||||||
Ending Balance (in shares) at May. 31, 2017 | 28,503 | 28,503 | |||||||||||
Ending Balance at May. 31, 2017 | $ 1,139,700 | $ 310,074 | $ 691,808 | $ (15,661) | $ 986,221 | $ 153,479 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Cash flows from operating activities | ||
Net earnings | $ 128,208 | $ 224,461 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Deferred income taxes | 16,815 | (10,143) |
Depreciation and amortization | 46,616 | 41,681 |
Net gain on disposition of equipment | (4,793) | (11,326) |
Accretion of debt discount | 1,329 | |
Stock based compensation expense | 19,007 | 19,055 |
Noncontrolling interest adjustments | 1,203 | 837 |
Other | 1,017 | 564 |
(Increase) decrease in assets: | ||
Accounts receivable, net | (27,109) | (14,333) |
Inventories | (47,209) | (15,346) |
Leased railcars for syndication | (16,122) | 28,823 |
Other | 8,419 | (5,191) |
Increase (decrease) in liabilities: | ||
Accounts payable and accrued liabilities | (41,008) | (88,707) |
Deferred revenue | (13,650) | 24,303 |
Net cash provided by operating activities | 72,723 | 194,678 |
Cash flows from investing activities | ||
Proceeds from sales of assets | 20,344 | 88,707 |
Capital expenditures | (53,848) | (51,707) |
Decrease in restricted cash | 15,526 | 200 |
Investment in and advances to unconsolidated affiliates | (34,068) | (9,088) |
Cash distribution from unconsolidated affiliates | 550 | 5,338 |
Net cash provided by (used in) investing activities | (51,496) | 33,450 |
Cash flows from financing activities | ||
Net change in revolving notes with maturities of 90 days or less | (49,000) | |
Proceeds from revolving notes with maturities longer than 90 days | 0 | 0 |
Repayments of revolving notes with maturities longer than 90 days | (1,888) | |
Proceeds from issuance of notes payable | 275,000 | |
Repayments of notes payable | (5,469) | (19,461) |
Debt issuance costs | (9,082) | (4,160) |
Repurchase of stock | (33,498) | |
Dividends | (18,619) | (17,362) |
Cash distribution to joint venture partner | (27,267) | (62,710) |
Investment by joint venture partner | 5,400 | |
Excess tax benefit (deficiency) from restricted stock awards | (2,396) | 2,786 |
Other | (7) | |
Net cash provided by (used in) financing activities | 212,167 | (179,900) |
Effect of exchange rate changes | 9,340 | (6,718) |
Increase in cash and cash equivalents | 242,734 | 41,510 |
Cash and cash equivalents | ||
Beginning of period | 222,679 | 172,930 |
End of period | 465,413 | 214,440 |
Cash paid during the period for | ||
Interest | 8,500 | 10,852 |
Income taxes, net | 40,587 | 77,867 |
Non-cash activity | ||
Transfer from Leased railcars for syndication to Equipment on operating leases, net | 8,597 | 45,535 |
Capital expenditures accrued in Accounts payable and accrued liabilities | 4,301 | 3,529 |
Change in Accounts payable and accrued liabilities associated with cash distributions to joint venture partner | 1,140 | 855 |
Change in Accounts payable and accrued liabilities associated with dividends declared | $ (72) | (165) |
Change in Accounts payable and accrued liabilities associated with repurchase of stock | $ 1,125 |
Interim Financial Statements
Interim Financial Statements | 9 Months Ended |
May 31, 2017 | |
Interim Financial Statements | Note 1 – Interim Financial Statements The Condensed Consolidated Financial Statements of The Greenbrier Companies, Inc. and its subsidiaries (Greenbrier or the Company) as of May 31, 2017 and for the three and nine months ended May 31, 2017 and 2016 have been prepared without audit and reflect all adjustments (consisting of normal recurring accruals) that, in the opinion of management, are necessary for a fair presentation of the financial position, operating results and cash flows for the periods indicated. The results of operations for the three and nine months ended May 31, 2017 are not necessarily indicative of the results to be expected for the entire year ending August 31, 2017. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. 10-K. Management Estimates – Initial Adoption of Accounting Policies 2015-03, Simplifying the Presentation of Debt Issuance Costs 2015-03). 2015-03 In the first quarter of 2017, the Company adopted Accounting Standards Update 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements 2015-15). 2015-03 In the second quarter of 2017, the Company adopted Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment 2017-04) 2017-04 Prospective Accounting Changes 2014-09, Revenue from Contracts with Customers 2014-09). In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases 2016-02). 2016-02 right-of-use In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting 2016-09). In December 2016, the FASB issued Accounting Standards Update 2016-18, Restricted Cash 2016-18). beginning-of-period end-of-period Share Repurchase Program – time-to-time. The Company did not repurchase any shares during the nine months ended May 31, 2017. As of May 31, 2017, the Company had cumulatively repurchased 3,206,226 shares for approximately $137.0 million since October 2013 and had $88.0 million available under the share repurchase program with an expiration date of January 1, 2018. |
Inventories
Inventories | 9 Months Ended |
May 31, 2017 | |
Inventories | Note 2 – Inventories Inventories are valued at the lower of cost (first-in, first-out) or market. Work-in-process includes material, labor and overhead. The following table summarizes the Company’s inventory balance: (In thousands) May 31, August 31, Manufacturing supplies and raw materials $ 241,753 $ 240,865 Work-in-process 89,091 68,727 Finished goods 86,987 59,470 Excess and obsolete adjustment (3,819 ) (3,257 ) $ 414,012 $ 365,805 |
Intangibles and Other Assets, n
Intangibles and Other Assets, net | 9 Months Ended |
May 31, 2017 | |
Intangibles and Other Assets, net | Note 3 – Intangibles and Other Assets, net Intangible assets that are determined to have finite lives are amortized over their useful lives. Intangible assets with indefinite useful lives are not amortized and are periodically evaluated for impairment. The following table summarizes the Company’s identifiable intangible and other assets balance: (In thousands) May 31, August 31, Intangible assets subject to amortization: Customer relationships $ 64,521 $ 65,023 Accumulated amortization (39,306 ) (37,251 ) Other intangibles 5,105 6,298 Accumulated amortization (4,253 ) (5,967 ) 26,067 28,103 Intangible assets not subject to amortization 912 912 Prepaid and other assets 14,091 14,891 Nonqualified savings plan investments 20,985 15,864 Revolving notes issuance costs, net 2,830 3,481 Assets held for sale 4,045 4,108 Total Intangible and other assets, net $ 68,930 $ 67,359 Amortization expense for the three and nine months ended May 31, 2017 was $0.9 million and $3.5 million and for the three and nine months ended May 31, 2016 was $1.5 million and $5.3 million. Amortization expense for the years ending August 31, 2017, 2018, 2019, 2020 and 2021 is expected to be $4.4 million, $3.8 million, $3.4 million, $3.7 million and $3.4 million. |
Revolving Notes
Revolving Notes | 9 Months Ended |
May 31, 2017 | |
Revolving Notes | Note 4 – Revolving Notes Senior secured credit facilities, consisting of three components, aggregated to $616.3 million as of May 31, 2017. As of May 31, 2017, a $550.0 million revolving line of credit, maturing October 2020, secured by substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. As of May 31, 2017, lines of credit totaling $16.3 million secured by certain of the Company’s European assets, with various variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.3%, were available for working capital needs of the European manufacturing operation. European credit facilities are continually being renewed. Currently these European credit facilities have maturities that range from February 2018 through June 2019. As of May 31, 2017, the Company’s Mexican railcar manufacturing joint venture had two lines of credit totaling $50.0 million. The first line of credit provides up to $30.0 million and is fully guaranteed by the Company and its joint venture partner. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw against this facility through January 2019. The second line of credit provides up to $20.0 million, of which the Company and its joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through August 2017. As of May 31, 2017, the Company had no borrowings outstanding under our senior secured credit facilities and outstanding commitments consisted of $79.2 million in letters of credit under the North American credit facility. As of August 31, 2016, the Company had no borrowings outstanding under our senior secured credit facilities and outstanding commitments consisted of $81.3 million in letters of credit under the North American credit facility. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
May 31, 2017 | |
Accounts Payable and Accrued Liabilities | Note 5 – Accounts Payable and Accrued Liabilities (In thousands) May 31, August 31, Trade payables $ 172,324 $ 182,334 Accrued payroll and related liabilities 69,403 76,058 Other accrued liabilities 58,682 71,260 Accrued maintenance 17,780 18,646 Accrued warranty 16,222 12,159 Income taxes payable — 3,991 Other 4,590 5,306 $ 339,001 $ 369,754 |
Warranty Accruals
Warranty Accruals | 9 Months Ended |
May 31, 2017 | |
Warranty Accruals | Note 6 – Warranty Accruals Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on the history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets, are reviewed periodically and updated based on warranty trends and expirations of warranty periods. Warranty accrual activity: (In thousands) Three Months Ended Nine Months Ended May 31, May 31, May 31, May 31, Balance at beginning of period $ 14,582 $ 12,147 $ 12,159 $ 11,512 Charged to cost of revenue, net 1,574 1,202 5,219 4,086 Payments (377 ) (1,205 ) (1,509 ) (3,386 ) Currency translation effect 443 (12 ) 353 (80 ) Balance at end of period $ 16,222 $ 12,132 $ 16,222 $ 12,132 |
Notes Payable, Net
Notes Payable, Net | 9 Months Ended |
May 31, 2017 | |
Notes Payable, Net | Note 7 – Notes Payable, Net (In thousands) May 31, August 31, Convertible senior notes, due 2018, net $ 118,577 $ 118,140 Convertible senior notes, due 2024, net 235,557 — Term loans, net 178,504 183,713 $ 532,638 $ 301,853 In February 2017, the Company issued $275 million of convertible senior notes, due 2024 (2024 Convertible Notes). The notes are senior unsecured obligations and rank equally with other senior unsecured debt. The notes bear interest at an annual rate of 2.875% payable semiannually in arrears on February 1 and August 1 of each year, commencing August 1, 2017. The notes will mature on February 1, 2024, unless earlier repurchased or converted in accordance with their terms prior to such date. The notes are convertible into shares of the Company’s common stock, at an initial conversion rate of 16.6234 per $1,000 principal amount of the notes which is equivalent to an initial conversion price of approximately $60.16 per share. The conversion rate and the resulting conversion price are subject to adjustment in certain events. Prior to November 1, 2023, the notes are convertible at the option of the holders only upon the satisfaction of certain conditions and during certain periods and thereafter, at any time until the close of business on the business day immediately preceding the maturity date. Upon conversion, the notes may be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares. 2024 Convertible Notes: (In thousands) May 31, Debt principal $ 275,000 Debt discount, net (31,775 ) Debt issuance costs, net (7,668 ) $ 235,557 As of May 31, 2017, the 2024 Convertible Notes had a balance of $235.6 million, reflecting the $275 million debt principal net of $31.8 million of net debt discount and $7.7 million of net debt issuance costs, which was included in Notes payable, net on the Company’s Consolidated Balance Sheet. The debt discount represents the difference between the debt principal and the fair value of a similar debt instrument that does not have a conversion feature at issuance. The debt discount is being amortized using the effective interest rate method through February 2024 and the amortization expense is included in Interest and foreign exchange on the Company’s Consolidated Statement of Income. In accordance with ASC 470-20, paid-in |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
May 31, 2017 | |
Accumulated Other Comprehensive Loss | Note 8 – Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of tax effect as appropriate, consisted of the following: (In thousands) Unrealized Foreign Other Accumulated Balance, August 31, 2016 $ (5,492 ) $ (20,832 ) $ (429 ) $ (26,753 ) Other comprehensive loss before reclassifications 2,232 5,624 (786 ) 7,070 Amounts reclassified from Accumulated other comprehensive loss 4,022 — — 4,022 Balance, May 31, 2017 $ 762 $ (15,208 ) $ (1,215 ) $ (15,661 ) The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with presentation location, were as follows: Three Months Ended Nine Months Ended Financial Statement Location (In thousands) 2017 2016 2017 2016 Loss on derivative financial instruments: Foreign exchange contracts $ 862 $ 561 $ 4,304 $ 1,203 Revenue Interest rate swap contracts 245 370 871 1,247 Interest and foreign exchange 1,107 931 5,175 2,450 Total before tax (236 ) (272 ) (1,153 ) (740 ) Tax expense $ 871 $ 659 $ 4,022 $ 1,710 Net of tax |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
May 31, 2017 | |
Earnings Per Share | Note 9 – Earnings Per Share The shares used in the computation of the Company’s basic and diluted earnings per common share are reconciled as follows: (In thousands ) Three Months Ended Nine Months Ended 2017 2016 2017 2016 Weighted average basic common shares outstanding (1) 29,348 29,059 29,192 29,182 Dilutive effect of 2018 Convertible notes (2) 3,305 3,224 3,286 3,202 Dilutive effect of 2024 Convertible notes (3) — n/a — n/a Dilutive effect of 2026 Convertible notes (4) n/a — n/a — Dilutive effect of performance based restricted stock units (5) 37 59 37 91 Weighted average diluted common shares outstanding 32,690 32,342 32,515 32,475 (1) Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. (2) The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the “if converted” method as further discussed below. (3) The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the three and nine months ended May 31, 2017 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. (4) The 2026 Convertible notes were retired in August 2016. The dilutive effect of the 2026 Convertible notes was excluded for the three and nine months ended May 31, 2016 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. (5) Restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position. Dilutive EPS is calculated using the more dilutive of two approaches. The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes and 2026 Convertible notes and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2024 Convertible notes and 2026 Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price. Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net earnings attributable to Greenbrier $ 32,823 $ 35,352 $ 92,321 $ 149,653 Add back: Interest and debt issuance costs on the 2018 Convertible notes, net of tax 733 733 2,199 1,962 Earnings before interest and debt issuance costs on convertible notes $ 33,556 $ 36,085 $ 94,520 $ 151,615 Weighted average diluted common shares outstanding 32,690 32,342 32,515 32,475 Diluted earnings per share (1) $ 1.03 $ 1.12 $ 2.91 $ 4.67 (1) Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs (net of tax) on convertible notes Weighted average diluted common shares outstanding |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
May 31, 2017 | |
Stock Based Compensation | Note 10 – Stock Based Compensation The value of stock based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or the recipient’s eligible retirement date. Awards are expensed upon grant when the recipient’s eligible retirement date precedes the grant date. Stock based compensation expense was $8.2 million and $19.0 million for the three and nine months ended May 31, 2017, respectively and $8.3 million and $19.1 million for the three and nine months ended May 31, 2016, respectively. Compensation expense is recorded in Selling and administrative expense and Cost of revenue on the Consolidated Statements of Income. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
May 31, 2017 | |
Derivative Instruments | Note 11 – Derivative Instruments Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk. Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in accumulated other comprehensive income or loss. At May 31, 2017 exchange rates, forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros and U.S. Dollars; the purchase of Mexican Pesos and the sale of U.S. Dollars; and for the purchase of U.S. Dollars and the sale of Saudi Riyals aggregated to $321.8 million. The fair value of the contracts is included on the Consolidated Balance Sheets as Accounts payable and accrued liabilities when there is a loss, or as Accounts receivable, net when there is a gain. As the contracts mature at various dates through July 2019, any such gain or loss remaining will be recognized in manufacturing revenue or cost of revenue along with the related transactions. In the event that the underlying transaction does not occur or does not occur in the period designated at the inception of the hedge, the amount classified in accumulated other comprehensive loss would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence. At May 31, 2017 exchange rates, approximately $1.5 million would be reclassified to revenue or cost of revenue in the next 12 months. At May 31, 2017, an interest rate swap agreement maturing in March 2020 had a notional amount of $89.5 million. The fair value of the contract is included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. As interest expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified from Accumulated other comprehensive loss and charged or credited to interest expense. At May 31, 2017 interest rates, approximately $0.9 million would be reclassified to interest expense in the next 12 months. Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives May 31, August 31, May 31, August 31, (In thousands) Balance sheet location Fair Fair Balance sheet location Fair Fair Derivatives designated as hedging instruments Foreign forward exchange contracts Accounts receivable, net $ 2,810 $ 1,570 Accounts payable and accrued liabilities $ 1,704 $ 4,287 Interest rate swap contracts Intangibles and other assets, net — — Accounts payable and accrued liabilities 1,104 3,157 $ 2,810 $ 1,570 $ 2,808 $ 7,444 Derivatives not designated as hedging instruments Foreign forward exchange contracts Accounts receivable, net $ 233 $ 25 Accounts payable and accrued liabilities $ 331 $ 22 The Effect of Derivative Instruments on the Statements of Income Derivatives in cash flow hedging relationships Location of gain (loss) recognized in income on derivatives Gain (loss) 2017 2016 Foreign forward exchange contract Interest and foreign exchange $ 2,494 $ (245 ) Interest rate swap contracts Interest and foreign exchange 24 88 $ 2,518 $ (157 ) Derivatives in cash flow hedging relationships Gain (loss) Location of gain (loss) Gain (loss) Location of gain (loss) on Gain (loss) recognized on 2017 2016 2017 2016 2017 2016 Foreign forward exchange contracts $ 1,888 $ (5,430 ) Revenue $ (4,130 ) $ (835 ) Revenue $ (3,216 ) $ 2,572 Foreign forward exchange contracts 166 (919 ) Cost of revenue (174 ) (412 ) Cost of revenue 205 88 Interest rate swap contracts 1,248 (2,274 ) Interest and foreign (871 ) (1,203 ) Interest and foreign — — $ 3,302 $ (8,623 ) $ (5,175 ) $ (2,450 ) $ (3,011 ) $ 2,660 |
Segment Information
Segment Information | 9 Months Ended |
May 31, 2017 | |
Segment Information | Note 12 – Segment Information Greenbrier operates in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. The results of GBW Joint Venture are included as part of Earnings (loss) from unconsolidated affiliates as the Company accounts for its interest in GBW Railcar Services LLC (GBW) under the equity method of accounting. The accounting policies of the segments are described in the summary of significant accounting policies in the Consolidated Financial Statements contained in the Company’s 2016 Annual Report on Form 10-K. The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes. The results of operations for the GBW Joint Venture are not reflected in the tables below as the investment is accounted for under the equity method of accounting. For the three months ended May 31, 2017: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 317,104 $ 19,291 $ 336,395 $ 57,901 $ 1,022 $ 58,923 Wheels & Parts 85,231 8,959 94,190 4,239 839 5,078 Leasing & Services 36,826 595 37,421 7,084 427 7,511 Eliminations — (28,845 ) (28,845 ) — (2,288 ) (2,288 ) Corporate — — — (20,752 ) — (20,752 ) $ 439,161 $ — $ 439,161 $ 48,472 $ — $ 48,472 For the nine months ended May 31, 2017: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 1,216,641 $ 19,291 $ 1,235,932 $ 226,611 $ 1,022 $ 227,633 Wheels & Parts 237,580 23,393 260,973 12,702 1,962 14,664 Leasing & Services 103,536 8,040 111,576 24,363 7,602 31,965 Eliminations — (50,724 ) (50,724 ) — (10,586 ) (10,586 ) Corporate — — — (61,024 ) — (61,024 ) $ 1,557,757 $ — $ 1,557,757 $ 202,652 $ — $ 202,652 For the three months ended May 31, 2016: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 458,494 $ 5,595 $ 464,089 $ 92,713 $ 923 $ 93,636 Wheels & Parts 78,417 10,058 88,475 5,811 711 6,522 Leasing & Services 75,955 601 76,556 8,298 601 8,899 Eliminations — (16,254 ) (16,254 ) — (2,235 ) (2,235 ) Corporate — — — (22,693 ) — (22,693 ) $ 612,866 $ — $ 612,866 $ 84,129 $ — $ 84,129 For the nine months ended May 31, 2016: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 1,611,686 $ 5,595 $ 1,617,281 $ 325,215 $ 941 $ 326,156 Wheels & Parts 247,604 24,074 271,678 15,720 2,155 17,875 Leasing & Services 225,044 10,444 235,488 42,668 10,444 53,112 Eliminations — (40,113 ) (40,113 ) — (13,540 ) (13,540 ) Corporate — — — (58,596 ) — (58,596 ) $ 2,084,334 $ — $ 2,084,334 $ 325,007 $ — $ 325,007 Total assets (In thousands) May 31, August 31, Manufacturing $ 705,229 $ 701,296 Wheels & Parts 264,308 275,599 Leasing & Services 625,569 516,147 Unallocated 578,721 342,732 $ 2,173,827 $ 1,835,774 Reconciliation of Earnings from operations to Earnings before income tax and earnings (loss) from unconsolidated affiliates: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Earnings from operations $ 48,472 $ 84,129 $ 202,652 $ 325,007 Interest and foreign exchange 7,894 3,712 15,291 10,565 Earnings before income tax and earnings (loss) from unconsolidated affiliates $ 40,578 $ 80,417 $ 187,361 $ 314,442 The results of operations for the GBW Joint Venture are accounted for under the equity method of accounting. The GBW Joint Venture is the Company’s fourth reportable segment and information as of May 31, 2017 and August 31, 2016 and for the three and nine months ended May 31, 2017 and 2016 are included in the tables below. Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Revenue $ 62,674 $ 95,699 $ 197,176 $ 289,381 Earnings (loss) from operations $ (5,525 ) $ 3,030 $ (16,988 ) $ 9,065 Total Assets May 31, August 31, GBW (1) $ 218,789 $ 247,610 (1) Includes goodwill and intangible assets of $90.8 million and $93.4 million as of May 31, 2017 and August 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2017 | |
Commitments and Contingencies | Note 13 – Commitments and Contingencies The Company’s Portland, Oregon manufacturing facility is located adjacent to the Willamette River. The Company has entered into a Voluntary Cleanup Agreement with the Oregon Department of Environmental Quality (DEQ) in which the Company agreed to conduct an investigation of whether, and to what extent, past or present operations at the Portland property may have released hazardous substances into the environment. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting the Company’s manufacturing facility, as a federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site). The Company and more than 140 other parties have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site. The letter advised the Company that it may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. At this time, ten private and public entities, including the Company (the Lower Willamette Group or LWG), have signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have not signed such consent, but are nevertheless contributing money to the effort. The EPA-mandated 17-year 17-year Eighty-three parties, including the State of Oregon and the federal government, have entered into a non-judicial Arkema Inc. et al v. A & C Foundry Products, Inc. et al #3:09-cv-453-PK. On January 6, 2017, the EPA issued its Record of Decision (ROD) for the Portland Harbor Site. The ROD identifies a clean-up -30 percent, 2-year The ROD does not address responsibility for the costs of clean-up, pre-remedial The Company has also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and the Company is currently discussing with the DEQ potential remedial actions which may be required. Our aggregate expenditure has not been material, however the Company could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties. From time to time, Greenbrier is involved as a defendant in litigation in the ordinary course of business, the outcomes of which cannot be predicted with certainty. In the quarter ended November 30, 2016, the Company received an adverse judgment of approximately $15 million on one matter related to commercial litigation in a foreign jurisdiction. The judgment was reversed on appeal and the case was remanded to the trial court. In June 2017 the court issued a new judgment against the Company of approximately $10 million. The Company is in the process of appealing the judgment. While the ultimate outcome of such legal proceedings cannot be determined at this time, the Company believes that the resolution of pending litigation will not have a material adverse effect on the Company’s Consolidated Financial Statements. In accordance with customary business practices in Europe, the Company has $1.2 million in third party performance and warranty guarantee facilities. To date no amounts have been drawn under these guarantee facilities. As of May 31, 2017, the Mexican railcar manufacturing joint venture had $0.4 million of third party debt outstanding, for which the Company and its joint venture partner had each guaranteed approximately $0.2 million. As of May 31, 2017, the Company had outstanding letters of credit aggregating $79.2 million associated with performance guarantees and workers compensation insurance. The Company made $0.6 million in cash contributions to GBW, an unconsolidated 50/50 joint venture, for the nine months ended May 31, 2017 which represented a reinvestment of a distribution received from GBW during the year. The Company is likely to make additional capital contributions or loans to GBW in the future. As of May 31, 2017, the Company had a $36.5 million note receivable balance from GBW which is included on the Consolidated Balance Sheet in Accounts receivable, net. |
Fair Value Measures
Fair Value Measures | 9 Months Ended |
May 31, 2017 | |
Fair Value Measures | Note 14 – Fair Value Measures Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value, for this disclosure, is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical instruments; Level 2 - inputs, other than the quoted market prices in active markets for similar instruments, which are observable, either directly or indirectly; and Level 3 - unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value on a recurring basis as of May 31, 2017 were: (In thousands) Total Level 1 Level 2 (1) Level 3 Assets: Derivative financial instruments $ 3,043 $ — $ 3,043 $ — Nonqualified savings plan investments 20,985 20,985 — — Cash equivalents 95,154 95,154 — — $ 119,182 $ 116,139 $ 3,043 $ — Liabilities: Derivative financial instruments $ 3,139 $ — $ 3,139 $ — (1) Level 2 assets and liabilities include derivative financial instruments that are valued based on observable inputs. See Note 11 Derivative Instruments for further discussion. Assets and liabilities measured at fair value on a recurring basis as of August 31, 2016 were: (In thousands) Total Level 1 Level 2 Level 3 Assets: Derivative financial instruments $ 1,595 $ — $ 1,595 $ — Nonqualified savings plan investments 15,864 15,864 — — Cash equivalents 5,077 5,077 — — $ 22,536 $ 20,941 $ 1,595 $ — Liabilities: Derivative financial instruments $ 7,466 $ — $ 7,466 $ — |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 31, 2017 | |
Related Party Transactions | Note 15 – Related Party Transactions In April 2010, WLR–Greenbrier Rail Inc. (WLR-GBX) WLR-GBX WLR-GBX During the first quarter of 2017, the Company paid profit sharing of $4.5 million to WL Ross and during the second quarter of 2017, the Company paid $3.6 million to WL Ross to complete this agreement. |
Acquisitions
Acquisitions | 9 Months Ended |
May 31, 2017 | |
Acquisitions | Note 16 – Acquisitions In May 2017, the Company completed its previously announced additional investment in Amsted-Maxion Equipamentos E Serviços Ferroviários S.A. (Greenbrier-Maxion), a railcar manufacturer in Brazil, which resulted in an increase in the Company’s ownership from 19.5% to 60% for $20 million, which was used to retire third-party debt at Greenbrier-Maxion. Simultaneously with the closing of its investment into Greenbrier-Maxion, the Company increased its ownership from 19.5% to 24.5% for $3.25 million in Amsted-Maxion Fundição E Equipamentos Ferroviários S.A. (Amsted-Maxion Cruzeiro), a manufacturer of castings and components for railcars and other heavy equipment. Proceeds from the Company’s increased ownership in Amsted-Maxion Cruzeiro, along with loans from each of the partners, were used to retire third-party debt at Amsted-Maxion Cruzeiro. The Company retains an option to increase its ownership in Amsted-Maxion Cruzeiro to 29.5% subject to certain conditions. The Company will continue to account for these investments under the equity method of accounting. |
Subsequent Events
Subsequent Events | 9 Months Ended |
May 31, 2017 | |
Subsequent Events | Note 17 – Subsequent Events In June 2017, the Company completed its previously announced plans to create Greenbrier-Astra Rail. The combined enterprise was formed between the Company’s European operations headquartered in Swidnica, Poland and Astra Rail, based in Germany and Arad, Romania. Greenbrier-Astra Rail is controlled by the Company with an approximate 75% interest and the Company will consolidate Greenbrier-Astra Rail for financial reporting purposes. Greenbrier paid €30 million in June 2017 and will pay an additional €30 million in June 2018 as consideration for this transaction. In June 2017, the Company completed agreements with Mitsubishi UFJ Lease & Finance (MUL) to expand their existing commercial relationship in North America consistent with the previously announced Memorandum of Understanding. MUL intends to grow its portfolio from 5,000 railcars to a total of 25,000 railcars over the next four years. As part of these growth plans, MUL has entered a multi-year purchase commitment for 6,000 newly-manufactured railcars from Greenbrier, with deliveries commencing during the fourth calendar quarter of 2017 and continuing through calendar 2020. Further, MUL will obtain all its newly-manufactured railcars exclusively from Greenbrier through calendar 2023. In addition to the new equipment ordered, over the next several years, MUL will supplement its portfolio growth through a combination of lease syndications and used equipment originated and owned by Greenbrier. The parties have also formed MUL Greenbrier Management Services, LLC, a new railcar management services entity owned 50% by each company that will solely manage all railcars in the MUL fleet. Greenbrier will receive continuing fee income related to the ongoing railcar asset management services provided for the MUL fleet. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
May 31, 2017 | |
Components of Inventories | The following table summarizes the Company’s inventory balance: (In thousands) May 31, August 31, Manufacturing supplies and raw materials $ 241,753 $ 240,865 Work-in-process 89,091 68,727 Finished goods 86,987 59,470 Excess and obsolete adjustment (3,819 ) (3,257 ) $ 414,012 $ 365,805 |
Intangibles and Other Assets,27
Intangibles and Other Assets, net (Tables) | 9 Months Ended |
May 31, 2017 | |
Identifiable Intangible and Other Assets | The following table summarizes the Company’s identifiable intangible and other assets balance: (In thousands) May 31, August 31, Intangible assets subject to amortization: Customer relationships $ 64,521 $ 65,023 Accumulated amortization (39,306 ) (37,251 ) Other intangibles 5,105 6,298 Accumulated amortization (4,253 ) (5,967 ) 26,067 28,103 Intangible assets not subject to amortization 912 912 Prepaid and other assets 14,091 14,891 Nonqualified savings plan investments 20,985 15,864 Revolving notes issuance costs, net 2,830 3,481 Assets held for sale 4,045 4,108 Total Intangible and other assets, net $ 68,930 $ 67,359 |
Accounts Payable and Accrued 28
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
May 31, 2017 | |
Accounts Payable and Accrued Liabilities | (In thousands) May 31, August 31, Trade payables $ 172,324 $ 182,334 Accrued payroll and related liabilities 69,403 76,058 Other accrued liabilities 58,682 71,260 Accrued maintenance 17,780 18,646 Accrued warranty 16,222 12,159 Income taxes payable — 3,991 Other 4,590 5,306 $ 339,001 $ 369,754 |
Warranty Accruals (Tables)
Warranty Accruals (Tables) | 9 Months Ended |
May 31, 2017 | |
Warranty Accrual Activity | Warranty accrual activity: (In thousands) Three Months Ended Nine Months Ended May 31, May 31, May 31, May 31, Balance at beginning of period $ 14,582 $ 12,147 $ 12,159 $ 11,512 Charged to cost of revenue, net 1,574 1,202 5,219 4,086 Payments (377 ) (1,205 ) (1,509 ) (3,386 ) Currency translation effect 443 (12 ) 353 (80 ) Balance at end of period $ 16,222 $ 12,132 $ 16,222 $ 12,132 |
Notes Payable, Net (Tables)
Notes Payable, Net (Tables) | 9 Months Ended |
May 31, 2017 | |
Notes Payable,Net | (In thousands) May 31, August 31, Convertible senior notes, due 2018, net $ 118,577 $ 118,140 Convertible senior notes, due 2024, net 235,557 — Term loans, net 178,504 183,713 $ 532,638 $ 301,853 |
Convertible Notes | 2024 Convertible Notes: (In thousands) May 31, Debt principal $ 275,000 Debt discount, net (31,775 ) Debt issuance costs, net (7,668 ) $ 235,557 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
May 31, 2017 | |
Components of Accumulated Other Comprehensive Loss, Net of Tax | Accumulated other comprehensive loss, net of tax effect as appropriate, consisted of the following: (In thousands) Unrealized Foreign Other Accumulated Balance, August 31, 2016 $ (5,492 ) $ (20,832 ) $ (429 ) $ (26,753 ) Other comprehensive loss before reclassifications 2,232 5,624 (786 ) 7,070 Amounts reclassified from Accumulated other comprehensive loss 4,022 — — 4,022 Balance, May 31, 2017 $ 762 $ (15,208 ) $ (1,215 ) $ (15,661 ) |
Amounts Reclassified out of Accumulated Other Comprehensive Loss | The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with presentation location, were as follows: Three Months Ended Nine Months Ended Financial Statement Location (In thousands) 2017 2016 2017 2016 Loss on derivative financial instruments: Foreign exchange contracts $ 862 $ 561 $ 4,304 $ 1,203 Revenue Interest rate swap contracts 245 370 871 1,247 Interest and foreign exchange 1,107 931 5,175 2,450 Total before tax (236 ) (272 ) (1,153 ) (740 ) Tax expense $ 871 $ 659 $ 4,022 $ 1,710 Net of tax |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
May 31, 2017 | |
Reconciliation of Shares Used in Computation of Basic and Diluted Earnings Per Common Share | The shares used in the computation of the Company’s basic and diluted earnings per common share are reconciled as follows: (In thousands ) Three Months Ended Nine Months Ended 2017 2016 2017 2016 Weighted average basic common shares outstanding (1) 29,348 29,059 29,192 29,182 Dilutive effect of 2018 Convertible notes (2) 3,305 3,224 3,286 3,202 Dilutive effect of 2024 Convertible notes (3) — n/a — n/a Dilutive effect of 2026 Convertible notes (4) n/a — n/a — Dilutive effect of performance based restricted stock units (5) 37 59 37 91 Weighted average diluted common shares outstanding 32,690 32,342 32,515 32,475 (1) Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. (2) The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the “if converted” method as further discussed below. (3) The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the three and nine months ended May 31, 2017 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. (4) The 2026 Convertible notes were retired in August 2016. The dilutive effect of the 2026 Convertible notes was excluded for the three and nine months ended May 31, 2016 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. (5) Restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position. |
Approach to Calculate Diluted Earning per Share | Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net earnings attributable to Greenbrier $ 32,823 $ 35,352 $ 92,321 $ 149,653 Add back: Interest and debt issuance costs on the 2018 Convertible notes, net of tax 733 733 2,199 1,962 Earnings before interest and debt issuance costs on convertible notes $ 33,556 $ 36,085 $ 94,520 $ 151,615 Weighted average diluted common shares outstanding 32,690 32,342 32,515 32,475 Diluted earnings per share (1) $ 1.03 $ 1.12 $ 2.91 $ 4.67 (1) Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs (net of tax) on convertible notes Weighted average diluted common shares outstanding |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
May 31, 2017 | |
Fair Values of Derivative Instruments | Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives May 31, August 31, May 31, August 31, (In thousands) Balance sheet location Fair Fair Balance sheet location Fair Fair Derivatives designated as hedging instruments Foreign forward exchange contracts Accounts receivable, net $ 2,810 $ 1,570 Accounts payable and accrued liabilities $ 1,704 $ 4,287 Interest rate swap contracts Intangibles and other assets, net — — Accounts payable and accrued liabilities 1,104 3,157 $ 2,810 $ 1,570 $ 2,808 $ 7,444 Derivatives not designated as hedging instruments Foreign forward exchange contracts Accounts receivable, net $ 233 $ 25 Accounts payable and accrued liabilities $ 331 $ 22 |
Effect of Derivative Instruments on Statements of Income | The Effect of Derivative Instruments on the Statements of Income Derivatives in cash flow hedging relationships Location of gain (loss) recognized in income on derivatives Gain (loss) 2017 2016 Foreign forward exchange contract Interest and foreign exchange $ 2,494 $ (245 ) Interest rate swap contracts Interest and foreign exchange 24 88 $ 2,518 $ (157 ) Derivatives in cash flow hedging relationships Gain (loss) Location of gain (loss) Gain (loss) Location of gain (loss) on Gain (loss) recognized on 2017 2016 2017 2016 2017 2016 Foreign forward exchange contracts $ 1,888 $ (5,430 ) Revenue $ (4,130 ) $ (835 ) Revenue $ (3,216 ) $ 2,572 Foreign forward exchange contracts 166 (919 ) Cost of revenue (174 ) (412 ) Cost of revenue 205 88 Interest rate swap contracts 1,248 (2,274 ) Interest and foreign (871 ) (1,203 ) Interest and foreign — — $ 3,302 $ (8,623 ) $ (5,175 ) $ (2,450 ) $ (3,011 ) $ 2,660 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
May 31, 2017 | |
Segments' Internal Financial Reports | The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes. The results of operations for the GBW Joint Venture are not reflected in the tables below as the investment is accounted for under the equity method of accounting. For the three months ended May 31, 2017: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 317,104 $ 19,291 $ 336,395 $ 57,901 $ 1,022 $ 58,923 Wheels & Parts 85,231 8,959 94,190 4,239 839 5,078 Leasing & Services 36,826 595 37,421 7,084 427 7,511 Eliminations — (28,845 ) (28,845 ) — (2,288 ) (2,288 ) Corporate — — — (20,752 ) — (20,752 ) $ 439,161 $ — $ 439,161 $ 48,472 $ — $ 48,472 For the nine months ended May 31, 2017: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 1,216,641 $ 19,291 $ 1,235,932 $ 226,611 $ 1,022 $ 227,633 Wheels & Parts 237,580 23,393 260,973 12,702 1,962 14,664 Leasing & Services 103,536 8,040 111,576 24,363 7,602 31,965 Eliminations — (50,724 ) (50,724 ) — (10,586 ) (10,586 ) Corporate — — — (61,024 ) — (61,024 ) $ 1,557,757 $ — $ 1,557,757 $ 202,652 $ — $ 202,652 For the three months ended May 31, 2016: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 458,494 $ 5,595 $ 464,089 $ 92,713 $ 923 $ 93,636 Wheels & Parts 78,417 10,058 88,475 5,811 711 6,522 Leasing & Services 75,955 601 76,556 8,298 601 8,899 Eliminations — (16,254 ) (16,254 ) — (2,235 ) (2,235 ) Corporate — — — (22,693 ) — (22,693 ) $ 612,866 $ — $ 612,866 $ 84,129 $ — $ 84,129 For the nine months ended May 31, 2016: Revenue Earnings (loss) from operations (In thousands) External Intersegment Total External Intersegment Total Manufacturing $ 1,611,686 $ 5,595 $ 1,617,281 $ 325,215 $ 941 $ 326,156 Wheels & Parts 247,604 24,074 271,678 15,720 2,155 17,875 Leasing & Services 225,044 10,444 235,488 42,668 10,444 53,112 Eliminations — (40,113 ) (40,113 ) — (13,540 ) (13,540 ) Corporate — — — (58,596 ) — (58,596 ) $ 2,084,334 $ — $ 2,084,334 $ 325,007 $ — $ 325,007 Total assets (In thousands) May 31, August 31, Manufacturing $ 705,229 $ 701,296 Wheels & Parts 264,308 275,599 Leasing & Services 625,569 516,147 Unallocated 578,721 342,732 $ 2,173,827 $ 1,835,774 |
Reconciliation of Earnings from Operations to Earnings Before Income Tax and Earnings (Loss) from Unconsolidated Affiliates | Reconciliation of Earnings from operations to Earnings before income tax and earnings (loss) from unconsolidated affiliates: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Earnings from operations $ 48,472 $ 84,129 $ 202,652 $ 325,007 Interest and foreign exchange 7,894 3,712 15,291 10,565 Earnings before income tax and earnings (loss) from unconsolidated affiliates $ 40,578 $ 80,417 $ 187,361 $ 314,442 |
GBW Railcar Services LLC | |
Segments' Internal Financial Reports | The results of operations for the GBW Joint Venture are accounted for under the equity method of accounting. The GBW Joint Venture is the Company’s fourth reportable segment and information as of May 31, 2017 and August 31, 2016 and for the three and nine months ended May 31, 2017 and 2016 are included in the tables below. Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Revenue $ 62,674 $ 95,699 $ 197,176 $ 289,381 Earnings (loss) from operations $ (5,525 ) $ 3,030 $ (16,988 ) $ 9,065 Total Assets May 31, August 31, GBW (1) $ 218,789 $ 247,610 (1) Includes goodwill and intangible assets of $90.8 million and $93.4 million as of May 31, 2017 and August 31, 2016. |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 9 Months Ended |
May 31, 2017 | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of May 31, 2017 were: (In thousands) Total Level 1 Level 2 (1) Level 3 Assets: Derivative financial instruments $ 3,043 $ — $ 3,043 $ — Nonqualified savings plan investments 20,985 20,985 — — Cash equivalents 95,154 95,154 — — $ 119,182 $ 116,139 $ 3,043 $ — Liabilities: Derivative financial instruments $ 3,139 $ — $ 3,139 $ — (1) Level 2 assets and liabilities include derivative financial instruments that are valued based on observable inputs. See Note 11 Derivative Instruments for further discussion. Assets and liabilities measured at fair value on a recurring basis as of August 31, 2016 were: (In thousands) Total Level 1 Level 2 Level 3 Assets: Derivative financial instruments $ 1,595 $ — $ 1,595 $ — Nonqualified savings plan investments 15,864 15,864 — — Cash equivalents 5,077 5,077 — — $ 22,536 $ 20,941 $ 1,595 $ — Liabilities: Derivative financial instruments $ 7,466 $ — $ 7,466 $ — |
Interim Financial Statements -
Interim Financial Statements - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | |
Equity, Class of Treasury Stock [Line Items] | |||
Intangibles and other assets, net | $ 68,930,000 | $ 67,359,000 | |
Notes payable | $ 532,638,000 | 301,853,000 | |
Stock repurchase program total cost of repurchased shares | $ 32,373,000 | ||
Accounting Standards Update 2015-03 | Reclassifications | |||
Equity, Class of Treasury Stock [Line Items] | |||
Intangibles and other assets, net | (2,100,000) | ||
Notes payable | $ 2,100,000 | ||
Share Repurchase Program - 2014 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchased during period, shares | 0 | ||
Stock repurchase program total cost of repurchased shares | $ 137,000,000 | ||
Repurchase of common stock, shares | 3,206,226 | ||
Remaining authorized repurchase amount | $ 88,000,000 | ||
Repurchase program expiration date | Jan. 1, 2018 | ||
Maximum | Share Repurchase Program - 2013 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Amount authorized for repurchase | $ 225,000,000 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Inventory [Line Items] | ||
Manufacturing supplies and raw materials | $ 241,753 | $ 240,865 |
Work-in-process | 89,091 | 68,727 |
Finished goods | 86,987 | 59,470 |
Excess and obsolete adjustment | (3,819) | (3,257) |
Inventories | $ 414,012 | $ 365,805 |
Identifiable Intangible and Oth
Identifiable Intangible and Other Assets (Detail) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Intangibles and Other Assets by Major Class [Line Items] | ||
Finite-Lived Intangible Assets, Net, Total | $ 26,067 | $ 28,103 |
Intangible assets not subject to amortization | 912 | 912 |
Prepaid and other assets | 14,091 | 14,891 |
Nonqualified savings plan investments | 20,985 | 15,864 |
Revolving notes issuance costs, net | 2,830 | 3,481 |
Assets held for sale | 4,045 | 4,108 |
Total Intangible and other assets, net | 68,930 | 67,359 |
Customer Relationships | ||
Intangibles and Other Assets by Major Class [Line Items] | ||
Finite lived intangible assets gross | 64,521 | 65,023 |
Accumulated amortization | (39,306) | (37,251) |
Other Intangible Assets | ||
Intangibles and Other Assets by Major Class [Line Items] | ||
Finite lived intangible assets gross | 5,105 | 6,298 |
Accumulated amortization | $ (4,253) | $ (5,967) |
Intangibles and Other Assets,39
Intangibles and Other Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | |
Schedule of Intangible Assets Disclosure [Line Items] | |||||
Amortization expense | $ 0.9 | $ 1.5 | $ 3.5 | $ 5.3 | |
Future amortization expense, 2017 | $ 4.4 | ||||
Future amortization expense, 2018 | 3.8 | ||||
Future amortization expense, 2019 | 3.4 | ||||
Future amortization expense, 2020 | 3.7 | ||||
Future amortization expense, 2021 | $ 3.4 |
Revolving Notes - Additional In
Revolving Notes - Additional Information (Detail) | 9 Months Ended | |
May 31, 2017USD ($)CreditFacilityFacility | Aug. 31, 2016USD ($) | |
Senior Secured Credit Facilities, Consisting of 3 Components | ||
Line of Credit Facility [Line Items] | ||
Number of senior secured credit facilities | CreditFacility | 3 | |
Line of credit facility maximum capacity | $ 616,300,000 | |
Letter of credit facility outstanding amount | 79,200,000 | $ 81,300,000 |
Line of credit outstanding amount | 0 | $ 0 |
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum capacity | $ 550,000,000 | |
Line of credit maturity date | 2020-10 | |
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, percentage points added to the reference rate | 1.75% | |
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | Prime Rate | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, percentage points added to the reference rate | 0.75% | |
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum capacity | $ 16,300,000 | |
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | Minimum | ||
Line of Credit Facility [Line Items] | ||
Line of credit maturity date | 2018-02 | |
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | Maximum | ||
Line of Credit Facility [Line Items] | ||
Line of credit maturity date | 2019-06 | |
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | WIBOR | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, percentage points added to the reference rate | 1.20% | |
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | WIBOR | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, percentage points added to the reference rate | 1.30% | |
Mexican Railcar Manufacturing Joint Venture Line of Credit, 3rd Component of Senior Secured Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum capacity | $ 50,000,000 | |
Number of lines of credits | Facility | 2 | |
Mexican Railcar Manufacturing Joint Venture Line of Credit 1, 3rd Component of Senior Secured Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum capacity | $ 30,000,000 | |
Line of credit facility borrowings outstanding due period | 2019-01 | |
Mexican Railcar Manufacturing Joint Venture Line of Credit 1, 3rd Component of Senior Secured Credit Facilities | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, percentage points added to the reference rate | 2.00% | |
Mexican Railcar Manufacturing Joint Venture Line of Credit 2, 3rd Component of Senior Secured Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum capacity | $ 20,000,000 | |
Line of credit facility borrowings outstanding due period | 2017-08 | |
Joint venture partner each guaranteed percentage | 50.00% | |
Mexican Railcar Manufacturing Joint Venture Line of Credit 2, 3rd Component of Senior Secured Credit Facilities | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, percentage points added to the reference rate | 2.00% |
Accounts Payable and Accrued 41
Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands | May 31, 2017 | Feb. 28, 2017 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Aug. 31, 2015 |
Accounts Payable and Accrued Liabilities [Line Items] | ||||||
Trade payables | $ 172,324 | $ 182,334 | ||||
Accrued payroll and related liabilities | 69,403 | 76,058 | ||||
Other accrued liabilities | 58,682 | 71,260 | ||||
Accrued maintenance | 17,780 | 18,646 | ||||
Accrued warranty | 16,222 | $ 14,582 | 12,159 | $ 12,132 | $ 12,147 | $ 11,512 |
Income taxes payable | 3,991 | |||||
Other | 4,590 | 5,306 | ||||
Accounts payable and accrued liabilities | $ 339,001 | $ 369,754 |
Warranty Accruals Activity (Det
Warranty Accruals Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Product Liability Contingency [Line Items] | ||||
Balance at beginning of period | $ 14,582 | $ 12,147 | $ 12,159 | $ 11,512 |
Charged to cost of revenue, net | 1,574 | 1,202 | 5,219 | 4,086 |
Payments | (377) | (1,205) | (1,509) | (3,386) |
Currency translation effect | 443 | (12) | 353 | (80) |
Balance at end of period | $ 16,222 | $ 12,132 | $ 16,222 | $ 12,132 |
Notes Payable Net (Detail)
Notes Payable Net (Detail) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Debt Instrument [Line Items] | ||
Term loans | $ 178,504 | $ 183,713 |
Notes payable | 532,638 | 301,853 |
2018 Senior Notes | ||
Debt Instrument [Line Items] | ||
Convertible senior notes | 118,577 | $ 118,140 |
2024 Senior Notes | ||
Debt Instrument [Line Items] | ||
Convertible senior notes | $ 235,557 |
Notes Payable Net - Additional
Notes Payable Net - Additional Information (Detail) - 2024 Convertible Senior Notes $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended |
Feb. 28, 2017USD ($)$ / shares | May 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Aggregate principal amount of notes issued | $ 275,000 | $ 275,000 |
Debt instrument interest rate stated percentage | 2.875% | |
Frequency of payments | Semiannually | |
Debt instrument maturity date | Feb. 1, 2024 | |
Initial conversion rate of common stock | 16.6234 | |
Initial conversion price per share of common stock | $ / shares | $ 60.16 | |
Convertible notes payable | 235,557 | |
Debt discount, net | 31,775 | |
Debt issuance costs, net | $ 7,668 | |
Debt discount, amortization end date | 2024-02 | |
ASC 470-20 | ||
Debt Instrument [Line Items] | ||
Fair value assumed, interest rate | 5.00% | |
Convertible notes, fair value | $ 241,900 | |
Proceeds from the issuance of the notes | 275,000 | |
Convertible notes, equity component | 33,100 | |
ASC 470-20 | Additional Paid-in Capital | ||
Debt Instrument [Line Items] | ||
Convertible senior notes - equity component, net of tax | $ 12,300 |
Convertible Notes (Detail)
Convertible Notes (Detail) - 2024 Convertible Senior Notes - USD ($) $ in Thousands | May 31, 2017 | Feb. 28, 2017 |
Debt Instrument [Line Items] | ||
Debt principal | $ 275,000 | $ 275,000 |
Debt discount, net | (31,775) | |
Debt issuance costs, net | (7,668) | |
Convertible notes payable | $ 235,557 |
Components of Accumulated Other
Components of Accumulated Other Comprehensive Loss, Net of Tax (Detail) $ in Thousands | 9 Months Ended |
May 31, 2017USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | $ 874,311 |
Other comprehensive loss before reclassifications | 7,070 |
Amounts reclassified from Accumulated other comprehensive loss | 4,022 |
Ending balance | 986,221 |
Unrealized (Gain) Loss on Derivative Financial Instruments | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (5,492) |
Other comprehensive loss before reclassifications | 2,232 |
Amounts reclassified from Accumulated other comprehensive loss | 4,022 |
Ending balance | 762 |
Foreign Currency Translation Adjustment | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (20,832) |
Other comprehensive loss before reclassifications | 5,624 |
Ending balance | (15,208) |
Other | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (429) |
Other comprehensive loss before reclassifications | (786) |
Ending balance | (1,215) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | (26,753) |
Ending balance | $ (15,661) |
Amounts Reclassified out of Acc
Amounts Reclassified out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Revenue | $ (439,161) | $ (612,866) | $ (1,557,757) | $ (2,084,334) |
Interest and foreign exchange | 7,894 | 3,712 | 15,291 | 10,565 |
Earnings before income taxes and earnings (loss) from unconsolidated affiliates | 40,578 | 80,417 | 187,361 | 314,442 |
Income tax expense | (8,656) | (22,449) | (53,900) | (92,902) |
Unrealized (Gain) Loss on Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive loss | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Earnings before income taxes and earnings (loss) from unconsolidated affiliates | 1,107 | 931 | 5,175 | 2,450 |
Income tax expense | (236) | (272) | (1,153) | (740) |
Net of tax | 871 | 659 | 4,022 | 1,710 |
Unrealized (Gain) Loss on Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive loss | Foreign Exchange Contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Revenue | 862 | 561 | 4,304 | 1,203 |
Unrealized (Gain) Loss on Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive loss | Interest rate swap contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Interest and foreign exchange | $ 245 | $ 370 | $ 871 | $ 1,247 |
Reconciliation of Basic and Dil
Reconciliation of Basic and Diluted Earnings Per Common Share (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | ||
Earnings Per Share Disclosure [Line Items] | |||||
Weighted average basic common shares outstanding | [1] | 29,348 | 29,059 | 29,192 | 29,182 |
Dilutive effect of performance based restricted stock units | [2] | 37 | 59 | 37 | 91 |
Weighted average diluted common shares outstanding | 32,690 | 32,342 | 32,515 | 32,475 | |
2018 Senior Notes | |||||
Earnings Per Share Disclosure [Line Items] | |||||
Dilutive effect of convertible notes | [3] | 3,305 | 3,224 | 3,286 | 3,202 |
2024 Senior Notes | |||||
Earnings Per Share Disclosure [Line Items] | |||||
Dilutive effect of convertible notes | [4] | 0 | 0 | 0 | 0 |
2026 Senior Notes | |||||
Earnings Per Share Disclosure [Line Items] | |||||
Dilutive effect of convertible notes | [5] | 0 | 0 | 0 | 0 |
[1] | Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. | ||||
[2] | Restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position. | ||||
[3] | The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the "if converted" method as further discussed below. | ||||
[4] | The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the three and nine months ended May 31, 2017 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. | ||||
[5] | The 2026 Convertible notes were retired in August 2016. The dilutive effect of the 2026 Convertible notes was excluded for the three and nine months ended May 31, 2016 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive. |
Approach to Calculate Diluted E
Approach to Calculate Diluted Earning Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Net earnings attributable to Greenbrier | $ 32,823 | $ 35,352 | $ 92,321 | $ 149,653 | |
Earnings before interest and debt issuance costs on convertible notes | $ 33,556 | $ 36,085 | $ 94,520 | $ 151,615 | |
Weighted average diluted common shares outstanding | 32,690 | 32,342 | 32,515 | 32,475 | |
Diluted earnings per share | [1] | $ 1.03 | $ 1.12 | $ 2.91 | $ 4.67 |
2018 Senior Notes | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Interest and debt issuance costs on the 2018 Convertible notes, net of tax | $ 733 | $ 733 | $ 2,199 | $ 1,962 | |
[1] | Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs (net of tax) on convertible notes Weighted average diluted common shares outstanding |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 8,200 | $ 8,300 | $ 19,007 | $ 19,055 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) | 9 Months Ended |
May 31, 2017USD ($) | |
Foreign Exchange Contracts | |
Derivative [Line Items] | |
Aggregate derivative notional amount | $ 321,800,000 |
Amount reclassified to revenue or cost of revenue in the next 12 months | 1,500,000 |
Interest rate swap contracts | |
Derivative [Line Items] | |
Aggregate derivative notional amount | $ 89,500,000 |
Maturity date | 2020-03 |
Unrealized pre-tax gain (loss) that would be reclassified to interest expense in the next 12 months | $ 900,000 |
Fair Values of Derivative Instr
Fair Values of Derivative Instruments (Detail) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 2,810 | $ 1,570 |
Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 2,808 | 7,444 |
Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Receivable | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 2,810 | 1,570 |
Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Payable and Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 1,704 | 4,287 |
Designated as Hedging Instrument | Interest rate swap contracts | Accounts Payable and Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 1,104 | 3,157 |
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Receivable | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 233 | 25 |
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Payable and Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 331 | $ 22 |
Effect of Derivative Instrument
Effect of Derivative Instruments on Statements of Income (Detail) - Cash Flow Hedging - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income on derivatives | $ 2,518 | $ (157) |
Gain (loss) recognized in OCI on derivatives (effective portion) | 3,302 | (8,623) |
Gain (loss) reclassified accumulated OCI income (effective portion) | (5,175) | (2,450) |
Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing) | (3,011) | 2,660 |
Foreign Exchange Forward | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in OCI on derivatives (effective portion) | 1,888 | (5,430) |
Foreign Exchange Forward | Interest and Foreign Exchange | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income on derivatives | 2,494 | (245) |
Foreign Exchange Forward | Sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified accumulated OCI income (effective portion) | (4,130) | (835) |
Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing) | (3,216) | 2,572 |
Foreign Exchange Forward | Cost Of Revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in OCI on derivatives (effective portion) | 166 | (919) |
Gain (loss) reclassified accumulated OCI income (effective portion) | (174) | (412) |
Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing) | 205 | 88 |
Interest rate swap contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in OCI on derivatives (effective portion) | 1,248 | (2,274) |
Interest rate swap contracts | Interest and Foreign Exchange | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income on derivatives | 24 | 88 |
Gain (loss) reclassified accumulated OCI income (effective portion) | $ (871) | $ (1,203) |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
May 31, 2017Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 4 |
Segments Internal Financial Rep
Segments Internal Financial Reports (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 439,161 | $ 612,866 | $ 1,557,757 | $ 2,084,334 | |
Earnings (loss) from operations | 48,472 | 84,129 | 202,652 | 325,007 | |
Assets | 2,173,827 | 2,173,827 | $ 1,835,774 | ||
Manufacturing | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 317,104 | 458,494 | 1,216,641 | 1,611,686 | |
Earnings (loss) from operations | 57,901 | 92,713 | 226,611 | 325,215 | |
Wheels & Parts | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 85,231 | 78,417 | 237,580 | 247,604 | |
Earnings (loss) from operations | 4,239 | 5,811 | 12,702 | 15,720 | |
Leasing & Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 36,826 | 75,955 | 103,536 | 225,044 | |
Earnings (loss) from operations | 7,084 | 8,298 | 24,363 | 42,668 | |
Operating Segments | Manufacturing | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 336,395 | 464,089 | 1,235,932 | 1,617,281 | |
Earnings (loss) from operations | 58,923 | 93,636 | 227,633 | 326,156 | |
Assets | 705,229 | 705,229 | 701,296 | ||
Operating Segments | Wheels & Parts | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 94,190 | 88,475 | 260,973 | 271,678 | |
Earnings (loss) from operations | 5,078 | 6,522 | 14,664 | 17,875 | |
Assets | 264,308 | 264,308 | 275,599 | ||
Operating Segments | Leasing & Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 37,421 | 76,556 | 111,576 | 235,488 | |
Earnings (loss) from operations | 7,511 | 8,899 | 31,965 | 53,112 | |
Assets | 625,569 | 625,569 | 516,147 | ||
Operating Segments | Unallocated Amount to Segment | |||||
Segment Reporting Information [Line Items] | |||||
Assets | 578,721 | 578,721 | $ 342,732 | ||
Corporate, Non-Segment | |||||
Segment Reporting Information [Line Items] | |||||
Earnings (loss) from operations | (20,752) | (22,693) | (61,024) | (58,596) | |
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | (28,845) | (16,254) | (50,724) | (40,113) | |
Earnings (loss) from operations | (2,288) | (2,235) | (10,586) | (13,540) | |
Intersegment Eliminations | Manufacturing | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 19,291 | 5,595 | 19,291 | 5,595 | |
Earnings (loss) from operations | 1,022 | 923 | 1,022 | 941 | |
Intersegment Eliminations | Wheels & Parts | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 8,959 | 10,058 | 23,393 | 24,074 | |
Earnings (loss) from operations | 839 | 711 | 1,962 | 2,155 | |
Intersegment Eliminations | Leasing & Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 595 | 601 | 8,040 | 10,444 | |
Earnings (loss) from operations | $ 427 | $ 601 | $ 7,602 | $ 10,444 |
Reconciliation of Segment Margi
Reconciliation of Segment Margin to Earnings Before Income Tax and Earnings (Loss) from Unconsolidated Affiliates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Earnings from operations | $ 48,472 | $ 84,129 | $ 202,652 | $ 325,007 |
Interest and foreign exchange | 7,894 | 3,712 | 15,291 | 10,565 |
Earnings before income tax and earnings (loss) from unconsolidated affiliates | $ 40,578 | $ 80,417 | $ 187,361 | $ 314,442 |
Results of Operations for GBW J
Results of Operations for GBW Joint Venture (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||||
Revenue | $ 439,161 | $ 612,866 | $ 1,557,757 | $ 2,084,334 | ||
Earnings (loss) from operations | 48,472 | 84,129 | 202,652 | 325,007 | ||
Assets | 2,173,827 | 2,173,827 | $ 1,835,774 | |||
GBW Railcar Services LLC | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 62,674 | 95,699 | 197,176 | 289,381 | ||
Earnings (loss) from operations | (5,525) | $ 3,030 | (16,988) | $ 9,065 | ||
Assets | [1] | $ 218,789 | $ 218,789 | $ 247,610 | ||
[1] | Includes goodwill and intangible assets of $90.8 million and $93.4 million as of May 31, 2017 and August 31, 2016. |
Results of Operations for GBW58
Results of Operations for GBW Joint Venture (Parenthetical) (Detail) - USD ($) $ in Millions | May 31, 2017 | Aug. 31, 2016 |
GBW Railcar Services LLC | ||
Segment Reporting Information [Line Items] | ||
Goodwill and intangible assets | $ 90.8 | $ 93.4 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Jun. 30, 2017USD ($) | Jan. 06, 2017USD ($)Segment | May 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |||||
Remedial investigation and feasibility study | $ 110,000,000 | ||||
Bank and third party warranty and performance guarantee facilities | $ 1,200,000 | ||||
Equity method investment, percentage of ownership interest | 50.00% | ||||
Payment to acquire equity method investments | $ 600,000 | ||||
Note receivable | 36,500,000 | ||||
Mexican Railcar Manufacturing Joint Venture Credit Facility | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Debt outstanding | 400,000 | ||||
Guarantee obligations | 200,000 | ||||
Performance Guarantee | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Letter of credit facility outstanding amount | $ 79,200,000 | ||||
Portland Harbor Site | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Period for remedial action | 13 years | ||||
Period for monitoring | 30 years | ||||
Net present value of remedial alternatives | $ 1,700,000,000 | ||||
Number of sediment decision units | Segment | 13 | ||||
Portland Harbor Site | Minimum | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Accuracy of cost estimate | (30.00%) | ||||
Portland Harbor Site | Maximum | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Accuracy of cost estimate | 50.00% | ||||
GBW Railcar Services LLC | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Equity method investment, percentage of ownership interest | 50.00% | ||||
Commercial Litigation in a Foreign Jurisdictions | Pending Litigation | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Adverse judgment | $ 15,000,000 | ||||
Commercial Litigation in a Foreign Jurisdictions | Pending Litigation | Subsequent Event | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Adverse judgment | $ 10,000,000 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 | |
Assets: | |||
Nonqualified savings plan investments | $ 20,985 | $ 15,864 | |
Fair Value, Measurements, Recurring | |||
Assets: | |||
Derivative financial instruments | 3,043 | 1,595 | |
Nonqualified savings plan investments | 20,985 | 15,864 | |
Cash equivalents | 95,154 | 5,077 | |
Assets, Fair Value Disclosure, Total | 119,182 | 22,536 | |
Liabilities: | |||
Derivative financial instruments | 3,139 | 7,466 | |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||
Assets: | |||
Nonqualified savings plan investments | 20,985 | 15,864 | |
Cash equivalents | 95,154 | 5,077 | |
Assets, Fair Value Disclosure, Total | 116,139 | 20,941 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||
Assets: | |||
Derivative financial instruments | 3,043 | [1] | 1,595 |
Assets, Fair Value Disclosure, Total | 3,043 | [1] | 1,595 |
Liabilities: | |||
Derivative financial instruments | $ 3,139 | [1] | $ 7,466 |
[1] | Level 2 assets and liabilities include derivative financial instruments that are valued based on observable inputs. See Note 10 Derivative Instruments for further discussion. |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Millions | 1 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)Vehicle | May 31, 2017Vehicle | Feb. 28, 2017USD ($) | Nov. 30, 2016USD ($) | Apr. 30, 2010USD ($)Vehicle | |
Related Party Transaction [Line Items] | |||||
Number of railcars sold, scrapped or transferred | Vehicle | 3,885 | ||||
WL Ross & Co., LLC (WL Ross) | |||||
Related Party Transaction [Line Items] | |||||
Number of related party railcars purchased | Vehicle | 3,885 | 4,000 | |||
Value of railcars | $ 148 | $ 256 | |||
Related party fee | $ 1 | ||||
Profit sharing agreement, amount paid | $ 3.6 | $ 4.5 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
May 31, 2017 | May 31, 2017 | May 31, 2016 | |
Business Acquisition [Line Items] | |||
Payment for investment | $ 34,068 | $ 9,088 | |
Equity method investment, percentage of ownership interest | 50.00% | 50.00% | |
Greenbrier-Maxion | |||
Business Acquisition [Line Items] | |||
Payment for investment | $ 20,000 | ||
Ownership percentage by parent, before transaction | 19.50% | ||
Ownership percentage by parent, after transaction | 60.00% | ||
Amsted-Maxion Cruzeiro | |||
Business Acquisition [Line Items] | |||
Payment for investment | $ 3,250 | ||
Ownership percentage by parent, before transaction | 19.50% | ||
Ownership percentage by parent, after transaction | 24.50% | ||
Amsted-Maxion Cruzeiro | Option to increase ownership subject to certain conditions | |||
Business Acquisition [Line Items] | |||
Equity method investment, percentage of ownership interest | 29.50% | 29.50% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) € in Millions | 1 Months Ended | |
Jun. 28, 2018EUR (€) | Jun. 30, 2017EUR (€)Vehicle | |
Scenario, Forecast | Greenbrier-Astra Rail | ||
Subsequent Event [Line Items] | ||
Additional amount to be paid as consideration in June 2018 | € | € 30 | |
Subsequent Event | Greenbrier-Astra Rail | ||
Subsequent Event [Line Items] | ||
Ownership percentage by parent | 75.00% | |
Amount to be paid | € | € 30 | |
Subsequent Event | Mitsubishi UFJ Lease & Finance | ||
Subsequent Event [Line Items] | ||
Number of railcars over the next four years | 25,000 | |
Purchase of newly manufactured railcars | 6,000 | |
Percentage of ownership held in asset management service entity | 50.00% | |
Number of new and used railcars sold | 5,000 |