What changed in this filing

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Item 9A. Controls and Procedures

2023-10-25 compared with 2022-10-31 · 51 added, 42 removed, 188 unchanged (33% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Principal Executive Officer and Principal Financial and Accounting Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the Exchange Act).

Based on that evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective at the reasonable assurance level in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial and Accounting Officer, due to the material weakness in internal control over financial reporting, described below, to allow timely decisions regarding required disclosure.

Our management has evaluated, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report.

Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective at the reasonable assurance level, due to the material weakness in internal control over financial reporting, described below, in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer to allow timely decisions regarding required disclosure.

In light of the material weakness described below, management performed additional analysis and other procedures to ensure that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

1 unchanged sentence

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is a process designed under the supervision of our Principal Executive Officer and Principal Financial and Accounting Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S.

As of the end of our 2022 fiscal year, management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control —

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal control over financial reporting is a process designed under the supervision of our Principal Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S.

Management, under the oversight of the Audit Committee, conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control —

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management has determined that our internal control over financial reporting was not effective as of August 31, 2022 because of a material weakness in our internal control over financial reporting.

We did not have effective controls over change management of system configurations in one IT environment to ensure all changes were logged and approved.

As a result, process level automated controls that are dependent on the affected IT environment were ineffective because they could have been adversely impacted.

This control deficiency was the result of our risk assessment not identifying a control to ensure the completeness and accuracy of all system configuration changes subject to change management controls.

Notwithstanding that we did not identify any material misstatements to the consolidated financial statements and there were no changes to previously released financial results as a result of this material weakness, the control deficiency created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Our independent registered public accounting firm, KPMG LLP, who audited the consolidated financial statements included in this report, has issued an adverse opinion on the effectiveness of the Company’s internal control over financial reporting, which is included at the end of Part II, Item 9A of this Form 10-K.

Based on this assessment, management has determined that our internal control over financial reporting was not effective as of August 31, 2023 because of a material weakness.

Specifically, the Company did not effectively design and maintain controls over information technology (IT) general controls in one IT environment in our primary North America manufacturing businesses that are relevant to the preparation of our consolidated financial statements.

We did not (i) maintain change management controls to ensure configuration data changes affecting the IT application were appropriate (ii) design and maintain program development controls to ensure the data migration, program testing and approval of new software development is aligned with business and IT requirements and (iii) maintain user access controls to ensure segregation of duties in our financial application.

The control deficiencies resulted from incomplete risk assessment, inadequate training of personnel and ineffective control activities related primarily to the implementation of a new ERP system in our primary North America manufacturing businesses.

As a result, process level automated controls that are dependent on the affected IT environment and manual controls that rely on system-generated data or reports from the affected IT environment were ineffective because they could have been adversely impacted.

The control deficiencies did not result in any material misstatements to the Consolidated Financial Statements and there were no changes to previously released financial results as a result of this material weakness.

However, the control deficiencies described above created a reasonable possibility that a material misstatement to the Consolidated Financial Statements would not be prevented or detected on a timely basis.

Therefore, we concluded that the deficiencies represent a material weakness in the Company’s internal control over financial reporting.

Our independent registered public accounting firm, KPMG LLP, who audited the Consolidated Financial Statements included in this Annual Report on Form 10-K issued an adverse opinion on the effectiveness of the Company’s internal control over financial reporting, which is included at the end of Part II, Item 9A of this Form 10-K.

Remediation Plans

We plan to implement controls to ensure that all system changes to configurations within this IT environment are logged and approved.

The Company’s management, under the oversight of the Audit Committee, is in the process of designing controls to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively.

These remediation actions are ongoing and include or are expected to include:

Enhancing risk assessment and control identification procedures for system implementations;

Expanding controls and/or applying other appropriate procedures to address the design and operation of IT general controls on system implementations;

Enhancing our training program addressing IT general controls and policies, including educating control owners concerning the principles and requirements of each control, with a focus on those related to user access, change management, and segregation of duties over IT systems impacting financial reporting;

Enhancing and maintaining policy documentation underlying IT general controls to promote knowledge transfer upon personnel and function changes.

As we continue to evaluate and enhance our internal control over financial reporting, we may determine that additional measures to address the material weaknesses or adjustments to the remediation plan may be required.

Once controls are designed and implemented, the controls must be operating effectively for a sufficient period of time and be tested by management in order to consider them remediated and conclude that the design is effective to address the risks of material misstatement.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended August 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the Principal Executive Officer and Principal Financial and Accounting Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud.

During 2023, we began to implement in stages a new ERP system at our primary North America manufacturing and services businesses.

Each implementation will impact our internal control over financial reporting.

Except for the system implementation and the identification of the material weakness described above, there have been no changes in our internal control over financial reporting during the quarter ended August 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations of Internal Controls

Our management, including the Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

15 unchanged sentences

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness related to ineffective controls over change management of system configurations in one IT environment to ensure all changes were logged and approved resulted in ineffective process level automated controls dependent on the affected IT environment that could have been adversely impacted and has been identified and included in management’s assessment.

The following material weakness was identified and included in management’s assessment.

The Company did not effectively design and maintain controls over information technology (IT) general controls in one IT environment in the Company’s primary North America manufacturing businesses that are relevant to the preparation of its consolidated financial statements.

The Company did not (i) maintain change management controls to ensure configuration data changes affecting the IT application were appropriate (ii) design and maintain program development controls to ensure the data migration, program testing and approval of new software development is aligned with business and IT requirements and (iii) maintain user access controls to ensure segregation of duties in the Company’s financial application.

The control deficiencies resulted from incomplete risk assessment, inadequate training of personnel and ineffective control activities related primarily to the implementation of a new ERP system in the Company’s primary North America manufacturing businesses.

The material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

22 unchanged sentences

DIRECTORS AND EXECU TIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by this item will be included under the captions “Election of Directors”, “Board Committees, Meetings and Charters”

Information required by this item will be included under the captions “Board Composition”, “Board Committees, Meetings and Charters”

and “Our Code of Business Conduct and Ethics and FCPA Compliance”

in our definitive Proxy Statement on Schedule 14A for the 2024 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission within 120 days after the year ended August 31, 2023 (as amended, updated, supplemented, or restated, “2024 Proxy Statement”) and is incorporated herein by reference.

Information required by this item regarding the executive officers of the Company is included under the caption “Information about our Executive Officers”

Information required by this item regarding the executive officers of the Company and family relationships is included under the caption “Information about our Executive Officers”

in Part I of this 10-K and is incorporated herein by reference.

EXECUTI VE COMPENSATION

The information required by this item will be included under the caption “Executive Compensation”, “Compensation Committee Report”, “2022 Director Compensation”

The information required by this item will be included under the caption “2023 Executive Compensation”, “Compensation Committee Report”, “2023 Non-Employee Director Compensation”

and “Risk Oversight”

9 unchanged sentences

PRINCIPAL ACCOU NTING FEES AND SERVICES

Our independent registered public accounting firm is KPMG LLP , Portland, OR , Auditor Firm ID:

The information required by this item will be included under the caption “Ratification of Appointment of Independent Auditors”

10 unchanged sentences

Amended and Restated Bylaws of The Greenbrier Companies, Inc.

dated July 6, 2022 and Effective September 1, 2022

are incorporated herein by reference to Exhibit 3.1 to the Registrant's Form 8-K filed April 4, 2023

Specimen Common Stock Certificate of Registrant is incorporated herein by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 filed April 7, 2010 (SEC File Number 333-165924).

7 unchanged sentences

Furman dated as of July 6, 2020, is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed July 10, 2020.

Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is incorporated herein by reference to Exhibit 10.8 to the Registrant’s Form 10-K filed November 1, 2012.

Amendment No.

1 to Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed January 8, 2014.

Second Amendment to Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed June 29, 2018.

Form of Amendment to Amended and Restated Employment Agreement between the Registrant and certain of its executive officers is incorporated herein by reference to Exhibit 10.5 to the Registrant’s Form 10-K filed October 29, 2019.

Amended and Restated Fourth Amendment to the Amended and Restated Employment Agreement between Registrant and Alejandro Centurion dated as of September 17, 2021 is incorporated herein by reference to Exhibit 10.7 to the Registrant’s Form 10-K filed October 26, 2021.

3 unchanged sentences

The Greenbrier Companies, Inc.

2014 Amended and Restated Stock Incentive Plan is incorporated herein by reference to Appendix A to the Registrant’s Proxy Statement on Schedule 14A filed November 19, 2014.

The Greenbrier Companies, Inc.

2021 Stock Incentive Plan is incorporated herein by reference to Exhibit 99.1 to Registrant's Form S-8 filed January 6, 2021.

Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan is incorporated by reference to Exhibit 10.2 to Registrant's Form 10-Q filed April 6, 2021.

Third Amendment dated as of January 27, 2021 to Amended and Restated Employment Agreement between Registrant and Mark Rittenbaum is incorporated by reference to Exhibit 10.3 to Registrant's Form 10-Q filed April 6, 2021.

Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan .

Mandatory Clawback Policy.

The Greenbrier Companies, Inc.

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Swindells dated January 7, 2016 is incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed April 5, 2016.

Dissolution Agreement, dated August 20, 2018, by and among the Registrant, Greenbrier Rail Services Holdings, LLC, Watco Companies, L.L.C., Millennium Rail, L.L.C., Watco Mechanical Services, L.L.C., GBW Railcar Services Holdings, L.L.C., GBW Railcar Services, L.L.C., and GBW Railcar Services Canada, Inc.

is incorporated herein by reference to Exhibit 10.26 to the Registrant’s Form 10-K filed October 26, 2018.

Second Amended and Restated Limited Liability Company Agreement of GBW Railcar Services Holdings, L.L.C., dated August 20, 2018, by and among Greenbrier Rail Services Holdings, LLC, Watco Mechanical Services, L.L.C., and Millennium Rail, L.L.C.

is incorporated herein by reference to Exhibit 10.27 to the Registrant’s Form 10-K filed October 26, 2018.

Fourth Amended and Restated Credit Agreement, dated as of September 26, 2018, by and among The Greenbrier Companies, Inc., Bank of America, N.A., as Administrative Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, MUFG Union Bank, N.A., as Syndication Agent, Bank of the West, Branch Banking and Trust Company, Fifth Third Bank, and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the lenders identified therein is incorporated herein by reference to Exhibit 10.28 to the Registrant’s Form 10-K filed October 26, 2018.

9 unchanged sentences

Asset Purchase Agreement, dated as of April 17, 2019, by and among The Greenbrier Companies, Inc., GBXL, LLC, and American Railcar Industries, Inc., is incorporated herein by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed April 18, 2019.

Convertible Promissory Note issued by The Greenbrier Companies, Inc.

to American Railcar Industries, Inc.

is incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed July 29, 2019.

Second Amendment to Amended and Restated Credit Agreement, dated as of July 29, 2022, by and among Greenbrier Leasing Company LLC, an Oregon limited liability company, lenders party thereto, and Bank of America, N.A., as Administrative Agent is incorporated herein by reference to Exhibit 10.37 to the Registrant's Form 10-K filed on October 31, 2022.

Third Amendment to the Fourth Amended and Restated Credit Agreement, dated as of July 29, 2022, by and among The Greenbrier Companies, Inc., the guarantors and lenders party thereto, and Bank of America, N.A., as Administrative Agent is incorporated herein by reference to Exhibit 10.38 to the Registrant's Form 10-K filed on October 31, 2022.

Amended and Restated Third Amendment to the Amended and Restated Employment Agreement between the Registrant and William A.

10 unchanged sentences

2 to Warehouse Loan Agreement dated August 26, 2022 by among GBXL I, LLC, as borrower, Bank of America N.A.

as a lender and as agent and Credit Agricole Corporate and Investment Bank, as lender.

as a lender and as agent and Credit Agricole Corporate and Investment Bank, as lender is incorporated herein by reference to Exhibit 10.43 to the Registrant's Form 10-K filed on October 31, 2022.

Fourth Amendment to the Fourth Amended and Restated Credit Agreement, dated as of March 13, 2023, by and among The Greenbrier Companies, Inc., the guarantors and lenders party thereto, and Bank of America, N.A., as Administrative Agent is incorporated herein by reference to Exhibit 10.43 to the Registrant's Form 10-Q filed on April 10, 2023.

Amendment No.

3 to Warehouse Loan Agreement dated June 16, 2023, by among GBXL I, LLC, as borrower, Bank of America, N.A., as a Lender and agent and Credit Agricole Corporate and Investment Bank, as lender, and Wells Fargo Bank, N.A., as lender is incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 10-Q filed on June 29, 2023.

List of the subsidiaries of the Registrant.

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Jack, Director

/s/ Patrick J.

October 25, 2023

Starling, Director

Ottensmeyer, Director

/s/ Charles J.

8 unchanged sentences

Downes, Senior Vice President,

Chief Financial Officer and Chief Accounting Officer

(Principal Financial Officer and Principal Accounting Officer)

Chief Financial Officer (Principal Financial Officer)

/s/ Matthew J.

October 25, 2023

Meyer, Senior Vice President,

Chief Accounting Officer (Principal Accounting Officer)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures