What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-10-28 compared with 2024-10-24 · 554 added, 481 removed, 912 unchanged (53% of the section changed)

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Executive Summary

The financial results for 2024 reflect a successful year executing on our multi-year strategy outlined last year.

The strategy has three basic tenets:

(1) Maintain our manufacturing leadership position across geographies;

(2) Optimize our industrial footprint for efficiency and margin enhancement while addressing the needs of our customers;

(3) Increase our recurring revenue to reduce the impact of manufacturing cyclicality.

Overall, demand in the marketplace remains steady for our products and services.

We delivered strong results during the year, however, supply chain challenges, rail service congestion, inflation, high interest rates, labor shortages and foreign currency fluctuations continued to impact our business for the year ended August 31, 2024.

Despite these challenges, we were able to deliver strong results and accomplish the following in 2024:

• Achieved our second highest annual revenue in our company's history.

We operate in two reportable segments:

Manufacturing - We design, build and market freight railcars in North America and Europe.

We are also a leading provider of freight railcar wheel services, component parts, maintenance and retrofitting services in North America.

Leasing & Fleet Management - We own a lease fleet of railcars that originate primarily from our manufacturing operations.

We offer railcar management, regulatory compliance services and leasing services to railroads and other railcar owners in North America.

We also place railcars on lease to customers and sell the railcars with leases attached to investors.

We operate an integrated business model which we believe is difficult to duplicate and provides greater value for our customers and investors.

We continue to operate in an environment characterized by ongoing macroeconomic uncertainty, including inflationary pressures, potential impacts from global trade tensions and tariffs and volatility in foreign exchange and interest rates.

We believe that a sustained economic slowdown or continued supply chain disruption could significantly affect our operations and financial performance.

Such developments could impact our business both directly and indirectly.

Direct impacts may include higher costs for raw materials, labor and manufacturing inputs.

Indirectly, a weaker macroeconomic environment could reduce demand for new railcar orders and leasing activity.

Despite these potential headwinds, we believe we are well-positioned to continue to execute on our multi-year strategy.

In addition, we believe our integrated business model provides flexibility across economic cycles.

We maintain a diversified customer base and disciplined approach to managing working capital and operating costs.

While we believe that macroeconomic uncertainty is affecting demand across the markets in which we operate, we delivered strong results in 2025, which included the following:

• Expanded our Margin as a percentage of Revenue from 15.8% in 2024 to 18.7% in 2025.

• Received new railcar orders for 21,700 units valued at approximately $2.8 billion.

• Increased our owned lease fleet by 2,100, representing a 15.7% increase from the prior year.

• Increased Net earnings attributable to Greenbrier by $44.0 million or 27.5% compared to the prior year.

• Generated $266 million of Net cash provided by operating activities.

We believe these results demonstrate the benefit of our continued focus on our strategic plan, and we remain focused on increasing recurring revenue, expanding our aggregate gross margin and raising our return on invested capital.

Recurring revenue is defined as Leasing & Management Services revenue excluding the impact of syndication transactions.

• Increased our owned lease fleet by 1,500 railcars, representing a 9.7% increase since August 31, 2024.

• Renewed and extended our $600 million domestic revolving facility and $250 million term loan in May 2025, extending the maturity date of both instruments until 2030.

We believe our results highlight our continued focus on our strategic plan as we remain focused on increasing recurring revenue, expanding aggregate gross margin and raising return on invested capital.

Recurring revenue is defined as Leasing & Fleet Management revenue excluding the impact of syndication transactions.

With a global footprint, supply chain and customer base, we are focused on navigating the impact of changing trade policies, such as tariffs, as well as general geopolitical and macroeconomic uncertainty.

In the fourth quarter of 2025, we continued the rationalization of our European operations and approved the closure of manufacturing facilities in Poland and Türkiye.

Combined with the closure of one of our manufacturing facilities in Romania announced earlier this year, our European headcount is expected to be reduced by 30% while maintaining the same production capacity.

Financial Highlights

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• Margin as a percentage of Revenue improved by 2.9% to 18.7% for the year ended August 31, 2025.

The increase from the prior year was driven by operating efficiencies and favorable product mix in our Manufacturing segment.

The increase from the prior year was driven by operating efficiencies in our Manufacturing segment.

• Earnings from operations increased by $35.6 million or 11.0% compared to the prior year.

The increase was primarily attributed to an increase in Margin in our Manufacturing and Leasing & Management Services segments during the year ended August 31, 2024.

The prior year also included $46.7 million in Asset impairment, disposal, and exit costs, net.

The increase was primarily attributed to an increase in Margin in our Manufacturing and Leasing & Fleet Management segments during the year ended August 31, 2025.

The increase in Margin was primarily due to operating efficiencies in Manufacturing and higher rents associated with a larger fleet and improved lease rates in Leasing & Fleet Management.

• Diluted Earnings per common share (EPS) increased by 28.0% to $6.35 for the year ended August 31, 2025.

• Net cash provided by operating activities increased $258.4 million compared to the prior year.

The increase was primarily attributed to a change in Leased railcars for syndication and a $97.1 million increase in Net earnings for the year ended August 31, 2024.

Manufacturing Backlog

Our backlog remains strong at August 31, 2024 and includes a diverse portfolio of railcar types, highlighted by the following:

• Our railcar backlog was 26,700 units with an estimated value of $3.4 billion as of August 31, 2024 with expected deliveries reaching 2026 and beyond.

• During 2024, we generated new railcar orders of 21,700 units valued at approximately $2.8 billion.

Our railcar backlog was 16,600 units with an estimated value of $2.2 billion as of August 31, 2025, with expected deliveries extending into 2027 and beyond.

Our backlog includes approximately $460 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors.

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Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time.

Change In Reportable Segments

Effective September 1, 2024, we combined our former Maintenance Services and Manufacturing segments into a single reportable segment, Manufacturing.

The combined Manufacturing reportable segment reflects a comprehensive production operation that allows us to streamline production processes and resources to better serve our customers.

Separately, we renamed our former Leasing & Management Services reportable segment to Leasing & Fleet Management.

These changes reflect the realignment of our organizational structure and reporting regularly provided to our chief operating decision maker to assess performance and allocate resources.

These changes had no impact on our consolidated results of operations or financial position.

Prior period segment results have been recast to reflect our new reportable segments.

Financial information about our reportable segments as well as geographic information is located in Note 17 - Segment Information to the Consolidated Financial Statements.

Financial Overview

Revenue, Cost of revenue, Margin and Earnings from operations (operating profit) presented below exclude intersegment activity that is eliminated in consolidation.

Revenue, Cost of revenue, Margin and Earnings from operations presented below include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.

Year Ended August 31,

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Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Cost of revenue

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Selling and administrative

Net gain on disposition of equipment

Asset impairment, disposal, and exit costs, net

Earnings from operations

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Diluted earnings per common share

Performance for our reportable segments is evaluated based on operating profit.

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

Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model.

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(In millions)

Operating profit (loss):

Earnings (loss) from operations:

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Consolidated Results

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The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results.

The 10.1% decrease in Revenue for the year ended August 31, 2024 as compared to the prior year was primarily due to a 10.2% decrease in Manufacturing Revenue.

The decrease in Manufacturing Revenue was primarily attributed to a 10.4% decrease in deliveries.

The 14.8% decrease in Cost of revenue for the year ended August 31, 2024 as compared to the prior year was primarily due to a 14.1% decrease in Manufacturing Cost of revenue.

The decrease in Manufacturing Cost of revenue was primarily attributed to a 10.4% decrease in deliveries during the year ended August 31, 2024.

Margin as a percentage of Revenue was 15.8% and 11.2% for the years ended August 31, 2024 and 2023, respectively.

Margin as a percentage of Revenue was positively impacted by an increase in Manufacturing Margin percentage from 8.2% to 12.1% primarily attributed to operating efficiencies and favorable product mix during the year ended August 31, 2024.

The 8.6% decrease in Revenue for the year ended August 31, 2025 as compared to the prior year was primarily due to an 8.5% decrease in deliveries.

This was partially offset by a 7.2% increase in Leasing & Fleet Management Revenue primarily attributed to an increase in rents associated with growth of the fleet and improved lease rates.

The 11.8% decrease in Cost of revenue for the year ended August 31, 2025 as compared to the prior year was primarily due to an 8.5% decrease in deliveries and operating efficiencies within our Manufacturing segment during the year ended August 31, 2025.

Margin percentage increased 2.9% for the year ended August 31, 2025 compared to the prior year primarily due to operating efficiencies in our Manufacturing segment.

The $44.0 million increase in Net earnings attributable to Greenbrier for the year ended August 31, 2025 as compared to the prior year was primarily due to the following:

• $117.4 million increase in Margin for the year ended August 31, 2024 primarily due to operating efficiencies and a favorable product mix within our Manufacturing segment and an increase in rents associated with a larger lease fleet and improved lease rates in our Leasing & Management Services segment.

• $46.7 million in Asset impairment, disposal and exit costs, net for the year ended August 31, 2023 primarily related to the sale and closure of our Gunderson Facility.

• $49.0 million increase in Margin for the year ended August 31, 2025 primarily due to operating efficiencies within our Manufacturing segment and a $27.3 million increase in rents associated with growth of the fleet and improved lease rates in our Leasing & Fleet Management segment.

• $25.1 million decrease in Interest and foreign exchange expense primarily attributed to higher interest income and a $10.6 million increase in foreign exchange gain primarily due to the change in the Mexican Peso's foreign exchange rate relative to the U.S.

Dollar during the year ended August 31, 2025.

These were partially offset by the following:

• $37.4 million increase in Income tax expense associated with higher pre-tax earnings during the year ended August 31, 2024.

• $15.4 million increase in Interest and foreign exchange primarily attributed to an increase in interest expense from higher borrowings and interest rates for the year ended August 31, 2024.

• $11.8 million increase in Selling and administrative expense was primarily attributed to an increase in employee related costs including higher long-term incentive compensation for the year ended August 31, 2024.

• $29.4 million increase in Income tax expense due to higher pre-tax earnings and geographic mix of earnings during the year ended August 31, 2025.

For discussion related to the results of operations and changes in financial condition for 2024 compared to 2023 refer to Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K, which was filed with the United States Securities and Exchange Commission on October 25, 2023.

Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K, which was filed with the U.S.

Securities and Exchange Commission on October 24, 2024.

Manufacturing Segment

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Cost of revenue

Operating profit ($)

Operating profit (%)

Earnings from operations ($)

Earnings from operations (%)

* Not meaningful

Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcars and from the conversion of existing or in-service railcars through our facilities in North America and Europe.

Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products and components and performing sustainable conversion services.

Manufacturing also generates revenue by providing railcar maintenance services.

Manufacturing Revenue decreased $321.2 million or 9.7% for the year ended August 31, 2025 compared to the prior year.

The decrease in Revenue was primarily attributed to a 10.4% decrease in deliveries during the year ended August 31, 2024.

The decrease was primarily attributed to an 8.5% decrease in deliveries during the year ended August 31, 2025.

Manufacturing Cost of revenue decreased $356.4 million or 12.2% for the year ended August 31, 2025 compared to the prior year.

The decrease in Cost of revenue was primarily attributed to a 10.4% decrease in the volume of deliveries and favorable product mix during the year ended August 31, 2024.

The decrease was primarily attributed to an 8.5% decrease in deliveries and operating efficiencies during the year ended August 31, 2025.

Manufacturing Margin as a percentage of Revenue increased 2.4% for the year ended August 31, 2025 compared to the prior year.

The increase in Margin percentage was primarily attributed to operating efficiencies and favorable product mix during the year ended August 31, 2024.

Manufacturing Operating profit increased $140.7 million or 99.9% for the year ended August 31, 2024 compared to the prior year.

The increase in Operating profit was primarily attributed to an increase in Margin during the year ended August 31, 2024 as well as the prior year including $46.7 million of charges related to the sale and closure of our Gunderson Facility during the year ended August 31, 2023.

Maintenance Services Segment

Year Ended August 31,

(In millions)

Cost of revenue

Operating profit ($)

Operating profit (%)

* Not meaningful

Our Maintenance Services segment primarily generates revenue from railcar component manufacturing and servicing, providing railcar maintenance services and scrapping wheels and other components.

Maintenance Services Revenue decreased $107.6 million or 26.5% for the year ended August 31, 2024 compared to the prior year.

The decrease was primarily attributed to 11.6% lower volumes in our wheels business due to lower demand, a change in product mix and a $9.1 million decrease due to lower scrap metal volume and pricing.

Maintenance Services Cost of revenue decreased $99.9 million or 27.4% for the year ended August 31, 2024 compared to the prior year.

The decrease was primarily due to operating at lower volumes and a change in product mix during the year ended August 31, 2024.

Maintenance Services Margin as a percentage of Revenue increased 1.2% for the year ended August 31, 2024 compared to the prior year.

The increase in Margin percentage was primarily attributed to a favorable change in product mix during the year ended August 31, 2024.

This was partially offset by a decrease in scrap metal pricing during the year ended August 31, 2024.

Maintenance Services Operating profit decreased $9.8 million or 26.6% for the year ended August 31, 2024 compared to the prior year.

The decrease in Operating profit was primarily attributed to operating at lower volumes and a decrease in scrap metal pricing and volume during the year ended August 31, 2024.

Leasing & Management Services Segment

The increase was primarily attributed to operating efficiencies during the year ended August 31, 2025.

Manufacturing Earnings from operations increased $18.8 million or 6.1% for the year ended August 31, 2025 compared to the prior year.

The increase was primarily attributed to operating efficiencies during the year ended August 31, 2025 partially offset by an 8.5% decrease in deliveries compared to the prior year.

Leasing & Fleet Management Segment

Year Ended August 31,

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Cost of revenue

Operating profit ($)

Operating profit (%)

Earnings from operations ($)

Earnings from operations (%)

* Not meaningful

Our Leasing & Management Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, syndication revenue associated with leases attached to new railcar sales, interim rent on leased railcars for syndication and the sale of railcars purchased from third parties with the intent to resell.

Leasing & Management Services Revenue increased $52.4 million or 29.1% for the year ended August 31, 2024 compared to the prior year.

The increase was primarily attributed to an increase of $19.7 million in rents associated with a larger lease fleet and higher lease rates, an $8.9 million increase in the sale of railcars which were purchased from third parties with the intent to resell and a $9.7 million increase in interim rent on leased railcars for syndication during the year ended August 31, 2024.

Leasing & Management Services Cost of revenue increased $17.7 million or 31.9% for the year ended August 31, 2024 compared to the prior year.

This was primarily due to higher costs from an increase in the volume of railcars sold that we purchased from third parties and a larger lease fleet during the year ended August 31, 2024.

Leasing & Management Services Margin as a percentage of Revenue decreased 0.6% for the year ended August 31, 2024 compared to the prior year.

Margin as a percentage of Revenue for the year ended August 31, 2024 was negatively impacted by higher sales of railcars that were purchased from third parties which have lower margin percentages.

Leasing & Management Services Operating profit increased $35.7 million or 34.6% for the year ended August 31, 2024 compared to the prior year.

The increase was primarily attributed to higher rents from a larger lease fleet and improved lease rates during the year ended August 31, 2024.

The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management services, syndication activity associated with leases attached to new railcar sales, interim rent on leased railcars for syndication and the sale of railcars purchased from third parties with the intent to resell.

Leasing & Fleet Management Revenue increased $16.7 million or 7.2% for the year ended August 31, 2025 compared to the prior year.

The increase was primarily attributed to a $27.3 million increase in rents associated with growth of the fleet and improved lease rates.

This was partially offset by a $2.1 million decrease in the sale of railcars which we had purchased from third parties with the intent to resell during the year ended August 31, 2025.

Leasing & Fleet Management Cost of revenue increased $2.9 million or 4.0% for the year ended August 31, 2025 compared to the prior year.

The increase was primarily due to higher costs from a larger fleet and higher syndication activity during the year ended August 31, 2025.

This was partially offset by a decrease in the volume of railcars sold that we purchased from third parties with the intent to resell during the year ended August 31, 2025.

Leasing & Fleet Management Margin as a percentage of Revenue increased 0.9% for the year ended August 31, 2025 compared to the prior year.

The increase was primarily attributed to improved lease rates and fewer sales of railcars that we purchased from third parties with the intent to resell, which have lower margin percentages, during the year ended August 31, 2025.

Leasing & Fleet Management Earnings from operations increased $21.6 million or 15.5% for the year ended August 31, 2025 compared to the prior year.

The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates in addition to a $3.2 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet during the year ended August 31, 2025.

Selling and Administrative

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Selling and administrative expense was $263.3 million or 8.1% of Revenue for the year ended August 31, 2025 and $247.1 million or 7.0% of Revenue for the year ended August 31, 2024.

The $11.8 million increase was primarily attributed to an increase in employee related costs including higher long-term incentive compensation during the year ended August 31, 2024.

The $16.2 million increase was primarily attributed to higher expenses related to our European operations, including facility closure costs and other expenses in addition to higher employee-related costs during the year ended August 31, 2025.

Net Gain on Disposition of Equipment

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Net gain on disposition of equipment was $15.9 million and $13.1 million for the years ended August 31, 2025 and 2024, respectively.

The decrease in Net gain on disposition of equipment was primarily attributed to fewer sales of assets from our lease fleet during the year ended August 31, 2024.

Asset Impairment, Disposal and Exit Costs, Net

Asset impairment, disposal, and exit costs, net was $46.7 million for the year ended August 31, 2023 related to charges associated with the Gunderson Facility and divestiture of Southwest Steel, partially offset by a gain on disposal of majority interest in the Rayvag joint venture.

The increase was primarily attributed to higher sales of assets from our lease fleet during the year ended August 31, 2025.

Interest and Foreign Exchange

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Interest and foreign exchange:

Interest and other expense

Foreign exchange loss, net

The $15.4 million increase in Interest and foreign exchange expense during the year ended August 31, 2024 compared to the prior year was primarily attributed to an increase in interest expense from higher borrowings and interest rates.

In 2024 our Income tax expense was $62.0 million on $223.7 million of pre-tax earnings for an effective tax rate of 27.7%.

The rate was higher than the U.S statutory tax rate primarily due to the geographic mix of earnings, nondeductible expenses, increased valuation allowance, and U.S.

taxes on profits in foreign jurisdictions, offset by a benefit for additional U.S.

foreign tax credits carried forward to future periods.

In 2023 our income tax expense was $24.6 million on $91.0 million of pre-tax earnings for an effective tax rate of 27.0%.

The rate was higher than the U.S.

statutory tax rate primarily due to the geographic mix of earnings and U.S.

taxes on profits in foreign jurisdictions, offset by net favorable impacts related to changes in foreign currency exchange rates for our U.S.

Interest and other expense, net

Foreign exchange (gain) loss, net

The $25.1 million decrease in Interest and foreign exchange expense during the year ended August 31, 2025 compared to the prior year was primarily attributed to higher interest income and a $10.6 million increase in foreign exchange gain primarily due to the change in the Mexican Peso's foreign exchange rate relative to the U.S.

Dollar during the year ended August 31, 2025.

In 2025, our Income tax expense was $91.4 million on $284.4 million of pre-tax earnings, resulting in an effective tax rate of 32.1%.

This rate was higher than the U.S.

statutory tax rate due to several factors, including the geographic mix of earnings, state taxes, U.S.

taxation of foreign branch operations, the Base Erosion and Anti-Abuse Tax (BEAT) and minimum taxes in certain foreign jurisdictions.

These impacts were partially offset by favorable changes in foreign currency exchange rates affecting our U.S.

Dollar denominated foreign operations.

The effective tax rate can fluctuate year-to-year due to discrete items and changes in the mix of foreign and domestic pre-tax earnings.

It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture.

The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in Earnings before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense.

The EU Member States have formally adopted the Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organisation for Economic Co-operation and Development (OECD) Pillar Two Framework.

The OECD Pillar Two Framework must be adopted by each respective country into their tax laws, which are effective for us beginning on September 1, 2024.

We continue to closely monitor additional guidance from the OECD and analyze potential impacts these law changes may have, however we do not expect a material change to our effective tax rate.

In 2024, our Income tax expense was $62.0 million on $223.7 million of pre-tax earnings, resulting in an effective tax rate of 27.7%.

This rate was higher than the U.S.

statutory tax rate, primarily driven by the geographic mix of earnings and U.S.

taxes on profits earned in foreign jurisdictions.

These impacts were partially offset by favorable changes in foreign currency exchange rates affecting our U.S.

Dollar denominated foreign operations.

Our effective tax rate can vary from year to year due to discrete tax items and changes in the mix of foreign and domestic pre-tax earnings.

It is also influenced by fluctuations in the proportion of earnings attributable to our Mexican railcar manufacturing joint venture.

This joint venture is treated as a partnership for tax purposes, meaning its full pre-tax earnings are included in our consolidated earnings, while only our 50% share of the tax is included in Income tax expense.

On July 4, 2025, the U.S.

1, commonly referred to as the One Big Beautiful Bill Act (OBBBA).

As a result, we recorded an increase of deferred tax liabilities and decrease of income tax payable related to the provisions for 100% bonus depreciation on assets placed in service after January 19, 2025.

Additionally, our effective tax rate increased due to the impact of non-deductible depreciation in the calculation of our BEAT liability.

Many other provisions of the OBBBA will take effect in future tax years and we are currently assessing their potential impact.

Separately, the EU Member States have formally adopted the Pillar Two Directive, which establishes a minimum effective tax rate of 15% under the Organisation for Economic Co-operation and Development (OECD) Pillar Two Framework.

These rules must be implemented by each country and became effective for us beginning September 1, 2024.

We continue to monitor additional guidance from the OECD and evaluate the potential effects of these changes, though we do not expect a material impact on our effective tax rate.

Earnings From Unconsolidated Affiliates

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Earnings from unconsolidated affiliates were $20.1 million and $11.0 million for the years ended August 31, 2025 and 2024, respectively.

The increase was primarily related to $5.2 million in higher earnings at our Brazil operations during the year ended August 31, 2024.

This was partially offset by $4.5 million in lower earnings related to a temporarily idle facility during the year ended August 31, 2024.

The increase was primarily related to $7.7 million in higher earnings at our Brazil operations for the year ended August 31, 2025.

Net Earnings Attributable to Noncontrolling Interest

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Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.

The $3.6 million change from the prior year was primarily a result of a decrease in earnings due to lower deliveries at our Mexican railcar manufacturing joint venture.

Liquidity and Capital Resources

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We continue to be financed through cash generated from operations and borrowings.

At August 31, 2024 Cash and cash equivalents and Restricted cash were $368.6 million, an increase of $65.9 million from $302.7 million at the prior year end.

At August 31, 2025 Cash and cash equivalents and Restricted cash were $326.4 million, a decrease of $42.2 million from $368.6 million at August 31, 2024.

Cash Flows From Operating Activities

The $258.4 million increase in cash from operating activities for the year ended August 31, 2024 compared to the year ended August 31, 2023 was primarily due to a change in Leased railcars for syndication and a $97.1 million increase in Net earnings.

The $63.9 million decrease in cash from operating activities for the year ended August 31, 2025 compared to the year ended August 31, 2024 was primarily due to a $102.7 million change in Leased railcars for syndication due to timing of syndication activity.

This was partially offset by a $40.4 million increase in Net earnings.

Cash Flows From Investing Activities

Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates.

The $40.4 million increase in cash used in investing activities for the year ended August 31, 2024 was primarily attributable to a $36.2 million increase in capital expenditures compared to the year ended August 31, 2023.

Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets.

The $117.3 million decrease in cash used in investing activities for the year ended August 31, 2025 was primarily attributable to a $117.9 million decrease in Capital expenditures compared to the year ended August 31, 2024.

Year Ended August 31,

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Capital expenditures:

Leasing & Management Services

Leasing & Fleet Management

Manufacturing

Maintenance Services

Total capital expenditures (gross)

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Total capital expenditures (net of proceeds)

Capital expenditures primarily relate to additions to our lease fleet and on-going investments in the safety, productivity and improvements of our facilities.

Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Management Services.

Capital expenditures primarily relate to additions to our lease fleet and on-going investments in the safety, productivity and improvement of our facilities.

Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Fleet Management.

Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity.

Proceeds from sales of assets are expected to be approximately $115 million for 2026.

Gross capital expenditures for 2025 are expected to be approximately $360 million for Leasing & Management Services, approximately $110 million for Manufacturing and approximately $10 million for Maintenance Services.

Gross capital expenditures for 2026 are expected to be approximately $240 million for Leasing & Fleet Management and approximately $80 million for Manufacturing, which includes the change in capital expenditures accrued in Accounts payable and accrued liabilities.

Capital expenditures for 2026 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.

Cash Flows From Financing Activities

The $162.4 million increase in cash flow from financing activities for the year ended August 31, 2024 compared to the year ended August 31, 2023 was primarily attributed to a $57.4 million increase in net proceeds from revolving notes, $52.8 million higher proceeds from the issuance of notes payable, net of repayments and a $55.6 million reduction in the repurchase of stock compared to the prior year.

During the year ended August 31, 2024 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our GBX Leasing warehouse facility.

We also borrowed $196.6 million on the GBX Leasing

warehouse facility to grow the lease fleet.

The $187.9 million change in Net cash provided by (used in) financing activities for the year ended August 31, 2025 compared to the year ended August 31, 2024 was primarily attributed to $153.6 million in lower proceeds from the issuance of debt, net of repayments and a $21.4 million increase in the repurchase of stock during the year ended August 31, 2025.

The senior term debt was amended in May 2025 on similar terms, extending the maturity date from August 2026 to May 2030.

Principal payments of $3.1 million are to be paid quarterly in arrears with a balloon payment of $190.6 million due upon maturity.

The principal balance as of August 31, 2025 was $250.0 million.

During the year ended August 31, 2024 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our Leasing warehouse facility.

We also borrowed $196.6 million on the Leasing warehouse facility to grow the lease fleet.

In February 2024, we paid $47.7 million to retire our 2024 Convertible Notes.

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The Board of Directors has authorized our company to repurchase in aggregate up to $100.0 million of our common stock.

The program may be modified, suspended, or discontinued at any time without prior notice and currently has an expiration date of January 31, 2025.

The program may be modified, suspended, or discontinued at any time without prior notice.

On January 8, 2025, the Board of Directors authorized the extension of the existing share repurchase program from January 31, 2025 to January 31, 2027 and renewed the amount remaining for repurchase to $100.0 million.

Under the share repurchase program, shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions.

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The share repurchase program does not obligate us to acquire any specific number of shares in any period.

During the year ended August 31, 2024, we purchased a total of 38 thousand shares for $1.3 million.

During the year ended August 31, 2023, we purchased a total of 1.9 million shares for $56.9 million, of which 1.8 million shares for $53.6 million were purchased under the current authorization of the share repurchase program.

As of August 31, 2024, the amount remaining for repurchase under the share repurchase program was $45.1 million.

During the year ended August 31, 2025, we purchased a total of 517 thousand shares for $22.2 million under the current authorization of the share repurchase program.

As of August 31, 2025, the amount remaining for repurchase under the current authorization of the share repurchase program was $77.8 million.

During the year ended August 31, 2024, we purchased 38 thousand shares for $1.3 million.

Cash, Borrowing Availability and Credit Facilities

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The available balance to draw under committed credit facilities includes $389.5 million on the North American credit facility, $20.7 million on the European credit facilities and $86.0 million on the Mexican credit facilities.

Our senior secured credit facilities, consisting of four components, aggregated to $1.4 billion as of August 31, 2024.

Nonrecourse Credit Facilities

GBX Leasing – As of August 31, 2024, a $550.0 million nonrecourse warehouse credit facility existed to support the operations of GBX Leasing.

Advances under the facility are secured by a pool of leased railcars and bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.85% plus 0.11% as a SOFR adjustment.

Our senior secured credit facilities aggregated to $1.3 billion as of August 31, 2025, which consisted of the following components:

Lease fleet – Nonrecourse

Leasing warehouse credit facility – As of August 31, 2025, a $450.0 million nonrecourse warehouse credit facility existed to support the operations of our leasing business in North America.

Advances under the facility are secured by a pool of leased railcars and bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.70%.

As of August 31, 2025, interest rate swap agreements cover 91% of the outstanding balance to swap the floating interest rate to a fixed rate.

The warehouse credit facility was amended in September 2024 to reduce the size of the credit facility by $100.0 million to $450.0 million and to extend the maturity date from August 2027 to September 2029.

The warehouse credit facility currently converts to a term loan in September 2027.

Other Credit Facilities

North America – As of August 31, 2024, a $600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for our U.S.

The warehouse credit facility converts to a term loan in September 2027 and matures in September 2029.

Corporate and other – Recourse

North American credit facility – As of August 31, 2025, a $600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for our U.S.

and Mexican operations.

The North America credit facility is secured by substantially all our U.S.

The North American credit facility is secured by substantially all of our U.S.

assets not otherwise pledged as security for term loans, the warehouse credit facility or the railcar asset-backed securities.

Available borrowings are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios.

Outstanding commitments under the North American credit facility included letters of credit which totaled $5.4 million and $5.9 million as of August 31, 2025 and 2024, respectively.

Advances bear interest at SOFR plus 1.50% plus 0.10% as a SOFR adjustment or Prime plus 0.50% depending on the type of borrowing.

The North America credit facility matures in August 2026.

Europe – As of August 31, 2024, lines of credit totaling $78.2 million, secured by certain of our European assets, were available for working capital needs of our European manufacturing operations.

The European lines of credit include $33.1 million which are guaranteed by us.

The North America credit facility was renewed in May 2025, extending the maturity date from August 2026 to May 2030.

European revolving credit facilities – As of August 31, 2025, lines of credit totaling $98.3 million, secured by certain of our European assets, were available for working capital needs of our European manufacturing operations.

The European lines of credit include $35.1 million which is guaranteed by us.

The European credit facilities have variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.10% to WIBOR plus 1.40% and Euro Interbank Offered Rate (EURIBOR) plus 1.90%.

The European credit facilities are regularly renewed and currently have maturities that range from October 2025 through September 2026.

Mexico – As of August 31, 2024, our Mexican railcar manufacturing operations had lines of credit totaling $166.0 million for working capital needs, $66.0 million of which we and our joint venture partner have each guaranteed 50%.

Mexican revolving credit facilities – As of August 31, 2025, our Mexican railcar manufacturing operations had lines of credit totaling $156.0 million for working capital needs, $56.0 million of which we and our joint venture partner have each guaranteed 50%.

Advances under these facilities bear interest at variable rates that range from SOFR plus 1.96% to SOFR plus 4.25%.

The Mexican credit facilities have maturities that range from February 2025 through January 2027.

The Mexican credit facilities have maturities that range from June 2026 through March 2027.

The following table summarizes our credit facility balances:

As of August 31,

(In millions)

Nonrecourse credit facility balances:

Other credit facility balances:

North America

Total Revolving notes

Outstanding commitments under the North American credit facility included letters of credit which totaled $5.9 million and $4.9 million as of August 31, 2024 and 2023, respectively.

Lease fleet – Nonrecourse:

Leasing warehouse credit facility

Corporate and other – Recourse:

North American revolving credit facility

European revolving credit facilities

Mexican revolving credit facilities

Other Information

The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us and our various subsidiaries, the most restrictive of which, among other things, limit our ability to:

The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us, the most restrictive of which, among other things, limit our ability to:

incur additional indebtedness or guarantees;

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We have global operations that conduct business in their local currencies as well as other currencies.

To mitigate the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter into foreign currency forward exchange contracts with established financial institutions to protect the revenue or margin on a portion of forecasted foreign currency sales and expenses.

To mitigate the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter into foreign exchange contracts with established financial institutions to protect the revenue or margin on a portion of forecasted foreign currency sales and expenses.

Given the strong credit standing of the counterparties, no provision has been made for credit loss due to counterparty non-performance.

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(In millions)

Notes payable 1

Railcar & operating leases

Revolving notes

1 The repayment of the $373.8 million of 2028 Convertible Notes due April 2028 is assumed to occur at the scheduled maturity instead of assuming an earlier conversion by the holders.

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Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates.

the market approach, we estimate the fair value based on observed market multiples for comparable businesses.

Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses.

If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.

In 2023, we performed a quantitative goodwill impairment test and determined that the estimated fair values of all reporting units with goodwill exceeded their carrying values.

We make certain estimates and assumptions to determine our reporting units and whether the fair value of each reporting unit is greater than its respective carrying value.

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Our income tax rate is affected by the tax rates that apply to our foreign earnings and could be adversely impacted by higher or lower earnings than anticipated in a particular jurisdiction.

In addition to local country tax laws and regulations, our income tax rate depends on the extent that our foreign earnings are taxed by the U.S.

through provisions such as the global intangible low-taxed income (GILTI) tax and base erosion and anti-abuse tax (BEAT).

In addition to local country tax laws and regulations which may apply minimum taxes, our income tax rate depends on the extent that our foreign earnings are taxed by the U.S.

through provisions such as the global intangible low-taxed income (GILTI) tax and BEAT.

We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available.

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To mitigate the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter into foreign currency forward exchange contracts to protect revenue or margin on a portion of forecasted foreign currency sales and expenses.

At August 31, 2024 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros aggregated to $143.9 million.

At August 31, 2025 exchange rates, notional amounts of foreign exchange contracts for the purchase of Polish Zlotys and the sale of Euros;

and the purchase of Mexican Pesos and the sale of U.S.

Dollars aggregated to $412.0 million.

Because of the variety of currencies in which purchases and sales are transacted and the interaction between currency rates, it is not possible to predict the impact of a movement in a single foreign currency exchange rate would have on future operating results.

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We have audited the accompanying consolidated balance sheets of The Greenbrier Companies, Inc.

and subsidiaries (the Company) as of August 31, 2024 and August 31, 2023, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended August 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2024 and August 31, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2024, in conformity with U.S.

and subsidiaries (the Company) as of August 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended August 31, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2025, in conformity with U.S.

generally accepted accounting principles.

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence within the North American manufacturing businesses

As discussed in Item 9A.

Controls and Procedures, a material weakness was identified as of August 31, 2023 that was remediated during fiscal year 2024.

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

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.

As a result, during the period of fiscal year 2024 in which the material weakness remained unremediated, process level automated controls that are dependent on the affected IT environment and manual controls that rely on system-generated data or reports from the affected IT environment were ineffective because they could have been adversely impacted.

We identified the evaluation of the sufficiency of audit evidence over the Company’s primary North American manufacturing businesses as a critical audit matter.

Evaluating the sufficiency of audit evidence obtained required especially subjective auditor judgment because of the pervasiveness of the material weakness noted above.

Sufficiency of audit evidence over inventory

As discussed in Notes 1, 2, and 5 to the consolidated financial statements, the Company operates from facilities in the U.S., Mexico, Poland and Romania to produce various railcars, component parts and perform railcar maintenance services and wheel and axle servicing.

Work-in-process inventory includes material, labor and overhead.

Finished goods includes completed wheels, component parts and finished railcars in transit or not on lease.

The Company held $688.3 million of inventory as of August 31, 2025.

We identified the evaluation of the sufficiency of audit evidence over inventory as a critical audit matter.

Determining the locations over which to perform procedures required a high degree of subjective auditor judgment due to the numerous global locations where inventory is held and the number of information technology (IT) systems involved in the inventory processes.

Involvement of IT professionals with specialized skills and knowledge was required to assist in the performance of certain procedures.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the Company’s primary North American manufacturing businesses including evaluating our scoping thresholds and control risk assessments considering the material weakness noted above.

For relevant financial statement account balances at the North America manufacturing businesses, we:

• increased the number of sample selections compared to what we would have otherwise made if the Company’s controls were designed and operating effectively for the full fiscal year

• tested the underlying records of selected transaction data obtained from the impacted information technology system to support the use of the information in the conduct of the audit

• inspected supporting documentation and evidence of authorization for a selection of manual and automated journal entries.

We applied auditor judgment to determine the nature and extent of procedures performed over inventory, including the selection of locations where procedures were performed.

For each location over which procedures were performed, we evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s inventory processes.

For each inventory location over which procedures were performed, we involved IT professionals who assisted in testing general IT controls for certain IT applications and automated controls used by the Company in its inventory processes.

In addition, for a sample of recorded inventory items, we assessed the quantities recorded by comparing to quantities physically counted and, for a sample of recorded inventory items, we assessed the cost recorded by comparing to underlying documentation, including purchase invoices.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

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Liabilities and Equity

Revolving notes

Accounts payable and accrued liabilities

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Deferred revenue

Notes payable, net

Commitments and contingencies (Notes 19 & 20)

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Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Cost of revenue

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Selling and administrative

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Balance August 31, 2022

Cumulative effect adjustment due to adoption of ASU 2020-06 (See Note 2)

Other comprehensive loss, net

Other comprehensive income, net

Noncontrolling interest adjustments

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Stock based compensation expense

Repurchase of stock

Cash dividends ($ 1.11 per share)

Balance August 31, 2023

Other comprehensive income, net

Other comprehensive loss, net

Noncontrolling interest adjustments

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Balance August 31, 2024

Other comprehensive loss, net

Other comprehensive income, net

Noncontrolling interest adjustments

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Cash flows from operating activities

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

Adjustments to reconcile net earnings to net cash provided by operating activities:

Deferred income taxes

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Noncontrolling interest adjustments

Earnings from unconsolidated affiliates

Decrease (increase) in assets:

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Deferred revenue

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities

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Capital expenditures

Investment in and advances to unconsolidated affiliates

Cash distribution from unconsolidated affiliates and other

Net cash used in investing activities

Cash flows from financing activities

Net changes in revolving notes with maturities of 90 days or less

Proceeds from revolving notes with maturities longer than 90 days

Repayments of revolving notes with maturities longer than 90 days

Proceeds from issuance of notes payable

Repayments of notes payable

Net changes in debt with maturities of 90 days or less

Proceeds from debt with maturities longer than 90 days

Repayments of debt with maturities longer than 90 days

Debt issuance costs

Repurchase of stock

Repurchase of stock, including excise tax

Cash distribution to joint venture partner

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Total cash and cash equivalents and restricted cash as presented above

Cash (received) paid during the period for

Cash paid during the period for

Income taxes, net

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Capital expenditures accrued in Accounts payable and accrued liabilities

Transfer from Property, plant and equipment, net to Intangibles and other assets, net for assets moved to Assets held for sale

Change in Accounts payable and accrued liabilities associated with dividends declared

Change in Accounts payable and accrued liabilities associated with repurchase of stock

Change in Accounts payable and accrued liabilities associated with cash distributions to joint venture partner

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Note 1 — Nature of Operations

The Company operates in three reportable segments:

Manufacturing;

Maintenance Services;

and Leasing & Management Services.

The Company operates in two reportable segments:

Manufacturing and Leasing & Fleet Management.

The segments support the Company's integrated business model.

The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland and Romania, produces double-stack intermodal railcars, tank cars, freight railcars, and automotive railcar products.

The Maintenance Services segment performs wheel and axle servicing, railcar maintenance services and produces a variety of component parts for the rail industry in North America.

The Leasing & Management Services segment owns approximately 15,500 railcars as of August 31, 2024.

The Company also provides management services for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.

The Manufacturing segment also performs wheel and axle servicing, railcar maintenance services and produces a variety of component parts for the rail industry.

The Leasing & Fleet Management segment owns approximately 17,000 railcars as of August 31, 2025 and provides management services for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.

Through unconsolidated affiliates the Company produces rail and industrial components and has an ownership stake in a railcar manufacturer in Brazil .

Effective September 1, 2024, the Company combined the former Maintenance Services and Manufacturing segments into a single reportable segment, Manufacturing.

The combined Manufacturing reportable segment reflects a comprehensive production operation that allows the Company to streamline production processes and resources to better serve customers.

Separately, the Company renamed the former Leasing & Management Services segment to Leasing & Fleet Management.

These changes reflect the realignment of the Company’s organizational structure and reporting regularly provided to the Company’s chief operating decision maker (CODM) to assess performance and allocate resources.

These changes had no impact on the Company’s consolidated results of operations or financial position.

Prior period segment results have been recast to reflect the Company’s new reportable segments.

See Note 17 – Segment Information to the Consolidated Financial Statements for additional information on the Company’s reportable segments.

Note 2 — Summary of Significant Accounting Policies

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Unclassified balance sheet - The balance sheets of the Company are presented in an unclassified format as a result of significant leasing activities for which the current or non-current distinction is not relevant.

In addition, the activities of the Manufacturing;

Maintenance Services;

and Leasing & Management Services segments are so intertwined that in the opinion of management, any attempt to separate the respective balance sheet categories would not be meaningful and may lead to the development of misleading conclusions by the reader.

In addition, the activities of the Manufacturing and Leasing & Fleet Management segments are so intertwined that in the opinion of management, any attempt to separate the respective balance sheet categories would not be meaningful and may lead to the development of misleading conclusions by the reader.

Foreign currency translation - Certain operations outside the U.S.

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Revenues and expenses are translated at monthly average exchange rates during the year, while assets and liabilities are translated at year-end exchange rates.

Translation adjustments are accumulated as a separate component of equity in other comprehensive income (loss).

Translation adjustments are recorded in Other comprehensive income (loss) and accumulated as a separate component of equity.

Cash and cash equivalents - Cash may temporarily be invested primarily in money market funds.

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Restricted cash - Restricted cash relates to amounts held to support a target minimum rate of return on certain agreements, terms of our credit agreement, and a pass through account for activity related to management services provided for certain third-party customers.

Accounts receivable - Accounts receivable consists of receivables from customers and receivables from related parties (see Note 16 - Related Party Transactions to the Consolidated Financial Statements) and is stated net of allowance for doubtful accounts of $ 3.6 million and $ 2.8 million as of August 31, 2024 and 2023, respectively.

As of August 31,

Accounts receivable - Accounts receivable consists of receivables from customers and receivables from related parties (see Note 15 - Related Party Transactions to the Consolidated Financial Statements) and is stated net of allowance for credit losses of $ 6.5 million and $ 3.6 million as of August 31, 2025 and 2024, respectively.

Year Ended August 31,

(In millions)

Allowance for doubtful accounts

Allowance for credit losses

Balance at beginning of period

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Work-in-process includes material, labor and overhead.

Finished goods includes completed wheels, parts and railcars in transit or not on lease.

Finished goods includes completed wheels, component parts and finished railcars in transit or not on lease.

Leased railcars for syndication - Leased railcars for syndication consist of newly-built railcars manufactured at one of the Company’s facilities or railcars purchased from third parties, which have been placed on lease to a customer and which the Company intends to sell to an investor with the lease attached.

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Intangible assets with indefinite useful lives are not amortized and are periodically evaluated for impairment.

Other assets include operating lease right-of-use (ROU) assets, nonqualified savings plan investments, and revolving note fees which are capitalized and amortized as interest expense over the life of the related borrowings.

Other assets include

operating lease right-of-use (ROU) assets, nonqualified savings plan investments, and revolving note fees which are capitalized and amortized as interest expense over the life of the related borrowings.

Under the short term lease recognition exemption, the Company does not recognize ROU assets or lease liabilities for qualifying leases with terms of less than twelve months.

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The Company reviews goodwill for impairment annually using either a qualitative assessment or a quantitative goodwill impairment test.

If the qualitative assessment is selected and the Company determines that fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment

is necessary.

If the qualitative assessment is selected and the Company determines that the fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment is necessary.

For reporting units where the Company performs the quantitative goodwill impairment test, an impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value.

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Greenbrier-Astra Rail B.V.

was formed in 2017 to combine the Company’s existing European operations headquartered in Swidnica, Poland and Astra Rail Industries S.A., based in Arad, Romania.

was formed with Astra Holdings GmbH (Astra) in 2017 to combine the Company’s existing European operations in Poland and Astra's operations in Romania.

Greenbrier-Astra Rail B.V.

is controlled by the Company with an approximate 75 % interest.

Astra Holdings GmbH received a put option to sell its entire noncontrolling interest to the Company at an exercise price equal to the higher of fair value or a defined earnings before interest, taxes, depreciation and amortization (EBITDA) multiple as measured on the exercise date.

Astra received a put option to sell its entire noncontrolling interest to the Company at an exercise price equal to the higher of fair value or a defined earnings before interest, taxes, depreciation and amortization (EBITDA) multiple as measured on the exercise date.

During 2022, the option was extended to be exercisable 30 business days prior to and up until June 1, 2026.

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for financial reporting purposes and includes the noncontrolling interest in the mezzanine section of the Consolidated Balance Sheet in Contingently redeemable noncontrolling interest.

The carrying value of the noncontrolling interest cannot be less than the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised.

During the fourth quarter of 2024, the Company recorded a noncash $ 16.2 million redemption value adjustment to Contingently redeemable noncontrolling interest and Retained earnings to reduce the carrying value to the maximum redemption amount.

The carrying value of the

noncontrolling interest cannot be less than the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised.

During 2024, the Company recorded a noncash $ 16.2 million redemption value adjustment to Contingently redeemable noncontrolling interest and Retained earnings to reduce the carrying value to the maximum redemption amount.

During 2023, the Company recorded a noncash $ 26.3 million redemption value adjustment to Contingently redeemable noncontrolling interest and Retained earnings to increase the carrying value to the maximum redemption amount.

The change in the maximum redemption amount in 2023 and 2024 was primarily attributed to industry and entity-specific indicators which impacted the estimated future cash flows of Greenbrier-Astra Rail B.V.

The changes in the maximum redemption amounts in 2023 and 2024 were primarily attributed to industry and entity-specific indicators which impacted the estimated future cash flows of Greenbrier-Astra Rail B.V.

There were no redemption value adjustments in 2025.

Net earnings attributable to noncontrolling interest on the Company’s Consolidated Statement of Income represents the Company’s partners’ share of results from operations.

Accumulated other comprehensive loss – Accumulated other comprehensive loss, net of tax as appropriate, consisted of the following:

Accumulated other comprehensive loss – Accumulated other comprehensive loss (AOCL), net of tax as appropriate, consisted of the following:

(In millions)

1 unchanged sentence

Foreign Currency Translation Adjustment

Accumulated Other Comprehensive Loss

Balance, August 31, 2022

Other comprehensive income (loss) before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Amounts reclassified from AOCL

Balance, August 31, 2023

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with the financial statement caption, were as follows:

Year Ended August 31,

(In millions)

Financial Statement Caption

(Gain) loss on derivative financial instruments:

Foreign exchange contracts

Revenue and Cost of revenue

Interest rate swap contracts

Interest and foreign exchange

Total before tax

Tax expense (benefit)

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCL

Balance, August 31, 2024

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCL

Balance, August 31, 2025

Revenue recognition - The Company measures revenue at the amounts that reflect the consideration to which it expects to be entitled in exchange for transferring control of goods and services to customers.

11 unchanged sentences

Each railcar delivery is considered a distinct performance obligation, such that the amounts that are recognized as revenue following railcar delivery are generally not subject to change.

Maintenance Services

The Company operates a network of facilities in North America that provide wheel and axle servicing and products, railcar maintenance services and produces a variety of component parts for the rail industry.

The Company also operates a network of facilities in North America that provide wheel and axle servicing and products, railcar maintenance services and produces a variety of component parts for the rail industry.

Wheels revenue is recognized when wheelsets are shipped to the customer.

Parts revenue is recognized upon shipment of the parts to the customers.

Parts revenue is recognized upon shipment of the

component parts to the customers.

Maintenance revenue is typically recognized over time using the cost input method, based on progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs.

1 unchanged sentence

Maintenance services are typically completed in less than 90 days.

Leasing & Management Services

Leasing & Fleet Management

The Company owns a fleet of new and used railcars which are leased to third-party customers.

1 unchanged sentence

Syndication transactions represent new and used railcars which have been placed on lease to a customer and which the Company sells to an investor with the lease attached.

At the time of such sale, revenue and cost of revenue is allocated between the Manufacturing segment and Leasing & Management Services segment based on the relative standalone selling price of the product and services provided.

At the time of such sale, revenue and cost of revenue is allocated between the Manufacturing segment and Leasing & Fleet Management segment based on the relative standalone selling price of the product and services provided.

The Company utilizes both ASC 842, Leases and ASC 606, Revenue from Contracts with Customers when evaluating retained risk of services and other performance obligations in conjunction with selling railcars with a lease attached as part of the syndication model.

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Foreign exchange gains and losses includes the effects of remeasuring monetary assets and liabilities denominated in a currency other than the functional currency of the respective subsidiary.

Year Ended August 31,

For the Year Ended August 31,

(In millions)

Interest and foreign exchange:

Interest and other expense

Foreign exchange loss, net

Forward exchange contracts - Foreign operations give rise to risks from fluctuations in foreign currency exchange rates.

Forward exchange contracts with established financial institutions are used to hedge a portion of such risk.

Interest and other expense, net

Foreign exchange (gain) loss, net

Foreign exchange contracts - Foreign operations give rise to risks from fluctuations in foreign currency exchange rates.

Foreign exchange contracts with established financial institutions are used to hedge a portion of such risk.

Realized and unrealized gains and losses on effective hedges are deferred in Other comprehensive income (loss) and recognized in earnings concurrent with the hedged transaction or when the occurrence of the hedged transaction is no longer considered probable.

Ineffectiveness is measured and any gain or loss is recognized in foreign exchange (gain) loss.

Even though forward exchange contracts are entered into to mitigate the impact of currency fluctuations, certain exposure remains, which may affect operating results.

Even though foreign exchange contracts are entered into to mitigate the impact of currency fluctuations, certain exposure remains, which may affect operating results.

In addition, there is risk for counterparty non-performance.

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Restricted stock units are accounted for as equity based awards (see Note 13 - Equity to the Consolidated Financial Statements).

The value of stock-based compensation awards is amortized as compensation expense from the date of grant through the vesting period.

value of stock-based compensation awards is amortized as compensation expense from the date of grant through the vesting period.

Forfeitures are recognized as they occur.

1 unchanged sentence

requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain.

These estimates may affect the amount of assets, liabilities, revenues and expenses

reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements.

These estimates may affect the amount of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements.

Estimates and assumptions are periodically evaluated and may be adjusted in future periods.

Actual results could differ from those estimates.

Initial Adoption of Accounting Policies

Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued Accounting Standard Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity’s own equity and modifies the guidance on diluted EPS calculations as a result of these changes.

The Company adopted this guidance effective September 1, 2021 on a modified retrospective basis and recorded a cumulative effect adjustment to increase Retained earnings by $ 5 million.

The impact of adoption also resulted in a reduction to Additional paid in capital of approximately $ 59 million related to amounts attributable to conversion options that had previously been recorded in equity and the associated derecognition of related deferred tax liabilities of $ 17 million.

Additionally, the Company recorded an increase to its convertible notes balance by an aggregate amount of approximately $ 71 million as a result of derecognizing the debt discount.

The adoption of this guidance also decreased the amount of non-cash interest expense to be recognized in future periods as a result of eliminating the discount associated with the equity component.

The Company did not incur any impact to liquidity or cash flows.

Beginning September 1, 2021, when calculating net earnings attributable to Greenbrier per share of common stock, the Company uses the if-converted method as required under ASU 2020-06 to determine the dilutive effect of its convertible notes.

Recent Accounting Pronouncements

Reclassifications - Certain immaterial reclassifications have been made to the accompanying prior year Consolidated Financial Statements to conform to the current year presentation.

Recently Adopted Accounting Pronouncements

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application to all periods presented upon adoption.

The Company is currently evaluating the impact that ASU 2023-07 will have on its consolidated financial statement disclosures.

Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of significant segment expenses.

The Company adopted ASU 2023-07 in 2025 on a retrospective basis.

The adoption of ASU 2023-07 did no t have a material impact on the financial statements, but resulted in expanded reportable segment disclosures.

Recently Issued Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

Improvements to Income Tax Disclosures , which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

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The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statement disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires disclosure of incremental income statement expense information on an annual and interim basis, primarily through enhanced disclosures of specified costs and expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statement disclosures.

Note 3 – Revenue Recognition

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Manufacturing – Railcar sales

Manufacturing – Sustainable conversions

Based on current production and delivery schedules and existing contracts, approximately $ 1.9 billion of the Railcar sales amount is expected to be recognized in 2025 while the remaining amount is expected to be recognized in 2026 and beyond.

Sustainable conversions represent orders to modify existing railcars and are expected to be recognized in 2025.

Services includes management and maintenance services of which approximately 61 % are expected to be performed through 2029 and the remaining amount through 2037.

Manufacturing – Railcar maintenance

Fleet management

Based on current production and delivery schedules and existing contracts, approximately $ 1.0 billion of the Manufacturing – Railcar sales amount is expected to be recognize d in 2026 while the remaining amount is expected to be recognized in 2027 and beyond.

Manufacturing – Railcar maintenance performance obligations are expected to be recognized in 2026.

Fleet management includes management and maintenance services contracts of which approximately $ 84.3 million is expected to be recognized through 2030 and the remaining amount through 2037.

The following table presents the Company's revenue disaggregated by category:

For the Year Ended August 31,

(In millions)

Manufacturing:

Railcar sales

Railcar maintenance

Leasing & Fleet Management

Total Revenue

Note 4 – Divestitures

In November 2022, as part of the Company's strategic review of the global business capacity footprint, the Company decided to permanently cease rail production at the Gunderson Facility and to explore alternatives to exit marine barge production .

In November 2022, as part of the Company's strategic review of the global business capacity footprint, the Company decided to permanently cease rail production at the Gunderson facility in Portland, Oregon and to explore alternatives to exit marine barge production .

Due to the change in future use of the facility, management assessed recoverability of the Gunderson assets in accordance with the Company’s policy on impairment of long-lived assets.

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In August 2023, the Company sold its ownership interest in Southwest Steel Castings Company, a steel foundry business in Longview, Texas, and recorded a $ 9.7 million loss on sale, which is recorded within the Manufacturing segment as Asset impairment, disposal, and exit costs, net on the Consolidated Statements of Income for the year ended August 31, 2023.

In August 2023, Greenbrier-Astra Rail sold its approximately 68 % ownership interest in Rayvag, a railcar manufacturing company based in Adana, Türkiye.

In August 2023, Greenbrier-Astra Rail B.V.

sold its approximately 68 % ownership interest in Rayvag, a railcar manufacturing company based in Adana, Türkiye.

The Company deconsolidated Rayvag and its noncontrolling interest and recorded a $ 3.7 million gain on sale, which is recorded within the Manufacturing segment as Asset impairment, disposal, and exit costs, net on the Consolidated Statements of Income for the year ended August 31, 2023.

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Excess and obsolete adjustment

As of August 31,

For the Year Ended August 31,

(In millions)

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Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Balance August 31, 2024

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therefore, the Company concluded that goodwill was not impaired.

As of August 31, 2024 , the Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $ 56.3 million and the Europe Manufacturing reporting unit with a goodwill balance of $ 29.6 million.

The Maintenance Services segment had a goodwill balance of $ 42.6 million related to the Wheels & Parts reporting unit.

As of August 31, 2025 , the Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $ 56.3 million, the Wheels & Parts reporting unit with a goodwill balance of $ 42.6 million and the Europe Manufacturing reporting unit with a goodwill balance of $ 31.1 million.

Note 8 — Intangibles and Other Assets, net

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Debt issuance costs, net

Assets held for sale

Deferred tax assets

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Amortization expense for the years ending August 31, 2026, 2027, 2028, 2029 and 2030 is expected to be $ 6.1 million, $ 5.2 million, $ 4.2 million, $ 2.7 million and $ 1.6 million, respectively.

Note 9 — Revolving Notes

Senior secured credit facilities, consisting of four components, aggregated to $ 1.4 billion as of August 31, 2024 .

The Company had an aggregate of $ 345.9 million available to draw down under credit facilities as of August 31, 2024 .

This amount consists of $ 258.3 million available on the North American credit facility, $ 31.6 million on the European credit facilities and $ 56.0 million on the Mexican credit facilities.

Nonrecourse credit facilities:

GBX Leasing – As of August 31, 2024 , a $ 550.0 million nonrecourse warehouse credit facility existed to support the operations of GBX Leasing.

Advances under the warehouse credit facility are secured by a pool of leased railcars and bear interest at SOFR plus 1.85 % plus 0.11 % as a SOFR adjustment.

As of August 31, 2024, interest rate swap agreements cover 74 % of the outstanding balance to swap the floating interest rate to a fixed rate.

The warehouse credit facility was amended in September 2024 to reduce the size of the credit facility by $ 100.0 million to $ 450.0 million and to extend the maturity date from August 2027 to September 2029 .

The warehouse credit facility currently converts to a term loan in September 2027.

Other credit facilities:

North America – As of August 31, 2024 , a $ 600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for the Company’s U.S.

and Mexican operations.

The North America credit facility is secured by substantially all the Company’s U.S.

assets not otherwise pledged as security for term loans, the warehouse credit facility or the railcar asset-backed securities.

Advances bear interest at SOFR plus 1.50 % plus 0.10 % as a SOFR adjustment or Prime plus 0.50 % depending on the type of borrowing.

The North America credit facility matures in August 2026 .

Europe – As of August 31, 2024 , lines of credit totaling $ 78.2 million secured by certain of the Company’s European assets, were available for working capital needs of the Company’s European manufacturing operations.

The European lines of credit include $ 33.1 million which are guaranteed by the Company.

The European credit facilities have variable rates that range from WIBOR plus 1.10 % to WIBOR plus 1.45 % and EURIBOR plus 1.90 %.

European credit facilities are regularly renewed and currently have maturities that range from October 2024 through September 2026 .

Mexico – As of August 31, 2024 , the Company’s Mexican railcar manufacturing operations had lines of credit totaling $ 166.0 million for working capital needs, $ 66.0 million of which the Company and its joint venture partner have each guaranteed 50 %.

Advances under these facilities bear interest at variable rates that range from SOFR plus 2.22 % to SOFR plus 4.25 %.

The Mexican credit facilities have maturities that range from February 2025 through January 2027 .

Revolving notes consisted of the following balances:

As of August 31,

(In millions)

Nonrecourse credit facility balances:

Other credit facility balances:

North America

Total Revolving notes

As of August 31, 2024, repayments of Revolving notes are expected to be $ 154.4 million, $ 2.3 million, and $ 194.9 million for the years ending August 31, 2025, 2026, and 2027, respectively.

In addition, outstanding commitments under the North American credit facility included letters of credit which totaled $ 5.9 million and $ 4.9 million as of August 31, 2024 and 2023 , respectively.

Note 9 — Accounts Payable and Accrued Liabilities

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Note 10 — Warranty Accrual

As of August 31,

For the Year Ended August 31,

(In millions)

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Balance at end of period

Note 12 — Notes Payable, net

Note 11 — Debt, net

Recourse debt is debt where the lender may pursue repayment beyond the value of any pledged collateral and is generally secured by general assets of the Company.

Non-recourse debt is debt where the lender’s ability to pursue repayment from the Company is limited to the value of the specific assets collateralized by the debt.

The following table summarizes the Company’s recourse and non-recourse debt balances:

As of August 31,

(In millions)

Leasing nonrecourse term loans

Senior term debt

2.875 % Convertible senior notes, due 2028

Corporate and other – Recourse:

Revolving credit facilities

North America

Corporate senior term debt

2.875 % Convertible senior notes, due 2028

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Debt discount and issuance costs

Leasing nonrecourse term loans include:

• N onrecourse senior term debt, secured by a pool of leased railcars.

The debt bears a floating interest rate of SOFR plus 1.625 % plus 0.10 % as a SOFR adjustment, with principal of $ 3.1 million paid quarterly in arrears and a balloon payment of $ 283.7 million due upon maturity in August 2027 .

Interest rate swap agreements cover nearly 100 % of the principal balance to swap the floating interest rate to fixed rates.

The principal balance as of August 31, 2024 was $ 320.5 million .

• Asset-backed term notes, as discussed below.

The principal balance as of August 31, 2024 was $ 471.6 million.

Senior term debt bears a floating interest rate of SOFR plus 1.50 % plus 0.10 % as a SOFR adjustment, with principal of $ 3.7 million paid quarterly in arrears and a balloon payment of $ 222.6 million due upon maturity in August 2026 .

Debt, net — Recourse

Lease fleet – Non-recourse:

Leasing warehouse credit facility

Leasing senior term debt

Leasing GBXL I asset-backed term notes

Debt discount and issuance costs

Debt, net — Non-recourse

Total Debt, net

Corporate and other – Recourse

North American revolving credit facility

As of August 31, 2025 , a $ 600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for the Company’s U.S.

and Mexican operations.

The North American credit facility is secured by substantially all the Company’s U.S.

assets not otherwise pledged as security for term loans, the warehouse credit facility or the railcar asset-backed securities.

The North American credit facility had $ 389.5 million available for borrowing as of August 31, 2025 .

Outstanding commitments under the North American credit facility included letters of credit which totaled $ 5.4 million and $ 5.9 million as of August 31, 2025 and 2024 , respectively.

Advances bear interest at SOFR plus 1.50 % plus 0.10 % as a SOFR adjustment or Prime plus 0.50 % depending on the type of borrowing.

The North America credit facility was renewed in May 2025 , extending the maturity date from August 2026 to May 2030 .

European revolving credit facilities

As of August 31, 2025 , lines of credit totaling $ 98.3 million secured by certain of the Company’s European assets, were available for working capital needs of the Company’s European manufacturing operations.

The European credit facilities had $ 20.7 million available for borrowing as of August 31, 2025 .

The European lines of credit include $ 35.1 million which is guaranteed by the Company.

The European credit facilities have variable rates that range from WIBOR plus 1.10 % to WIBOR plus 1.40 % and EURIBOR plus 1.90 %.

European credit facilities are regularly renewed and currently have maturities that range from October 2025 through September 2026 .

Mexican revolving credit facilities

As of August 31, 2025 , the Company’s Mexican railcar manufacturing operations had lines of credit totaling $ 156.0 million for working capital needs, $ 56.0 million of which the Company and its joint venture partner have each guaranteed 50 %.

The Mexican credit facilities had $ 86.0 million available for borrowing as of August 31, 2025 .

Advances under these facilities bear interest at variable rates that range from SOFR plus 1.96 % to SOFR plus 4.25 %.

The Mexican credit facilities have maturities that range fro m June 2026 through March 2027 .

Corporate senior term debt

The Corporate senior term debt bears a floating interest rate of SOFR plus 1.50 % plus 0.10 % as a SOFR adjustment.

Interest rate swap agreements cover approximately 75 % of the principal balance to swap the floating interest rate to fixed rates.

The principal balance as of August 31, 2024 was $ 251.7 million .

The notes payable, along with the revolving and operating lines of credit, contain certain covenants with respect to the Company and various subsidiaries, the most restrictive of which, among other things, limit the ability to:

incur additional indebtedness or guarantees;

pay dividends or repurchase stock;

enter into capital leases;

create liens;

engage in transactions with affiliates, including joint ventures and non U.S.

subsidiaries, including but not limited to loans, advances, equity investments and guarantees;

enter into mergers, consolidations or sales of substantially all the Company’s assets;

and enter into new lines of business.

The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest and rent) coverage.

As of August 31, 2024, principal payments on the notes payable are expected as follows:

(In millions)

Year ending August 31,

1 The repayment of the $ 373.8 million of 2028 Convertible Notes due April 2028 is assumed to occur at the scheduled maturity instead of assuming an earlier conversion by the holders.

Convertible notes

Convertible senior notes, due 2028 (2028 Convertible Notes), bear interest at a fixed rate of 2.875 %, paid semiannually in arrears on April 15 th and October 15 th .

Principal payments of $ 3.1 million are to be paid quarterly in arrears with a balloon payment of $ 190.6 million due upon maturity.

The Corporate senior term debt was amended in May 2025 on similar terms, extending the maturity date from August 2026 to May 2030 .

2.875% Convertible senior notes, due 2028 (2028 Convertible Notes)

The 2028 Convertible Notes bear interest at a fixed rate of 2.875 %, paid semiannually in arrears on April 15 th and October 15 th .

Issuance costs are amortized using the effective interest rate method through 2028 and the amortization expense is included in Interest and foreign exchange on the Company's Consolidated Statements of Income.

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The convertible notes are senior unsecured obligations and rank equally with other senior unsecured debt.

The notes are convertible into shares of the Company’s common stock, at an initial conversion rate of 18.0317 shares of common stock per $ 1,000 principal amount which is equivalent to an initial conversion price of approximately $ 55.46 per share.

The notes are convertible into shares of the Company’s common stock, at a conversion rate of 18.1496 shares of common stock per $ 1,000 principal amount which is equivalent to a conversion price of approximately $ 55.10 per share as of August 31, 2025.

The conversion rate and the resulting conversion price are subject to adjustment in certain events, such as distributions, dividends or stock splits.

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Calling any Convertible Note for redemption will constitute a make-whole fundamental change with respect to that Convertible Note, in which case the conversion rate applicable to the conversion of that Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.

The Company's 2.875 % Convertible senior notes, due 2024 (2024 Convertible Notes), matured on February 1, 2024 .

The outstanding principal balance of $ 47.7 million plus accrued interest was settled in cash on the maturity date to retire the 2024 Convertible Notes.

Asset-backed term notes

GBX Leasing 2022-1 LLC (GBXL I or Issuer) was formed as a wholly owned special purpose entity (SPE) of GBX Leasing to securitize the leasing assets of GBX Leasing.

GBXL I issued $ 323.3 million of term notes in February 2022 (2022 GBXL Notes) and $ 178.5 million of term notes in November 2023 (2023 GBXL Notes), which are secured by a portfolio of railcars and associated operating leases and other assets, acquired and owned by GBXL I.

Lease fleet – Non-recourse

Leasing warehouse credit facility

As of August 31, 2025 , a $ 450.0 million non-recourse warehouse credit facility existed to support the operations of our leasing business in North America.

Advances under the warehouse credit facility are secured by a pool of leased railcars and bear interest at SOFR plus 1.70 %.

As of August 31, 2025 , interest rate swap agreements cover 91 % of the outstanding balance to swap the floating interest rate to a fixed rate.

The warehouse credit facility converts to a term loan in September 2027 and matures in September 2029 .

Leasing senior term debt

The Leasing senior term debt is secured by a pool of leased railcars and is non-recourse to Greenbrier.

The Leasing senior term debt bears interest at a rate of SOFR plus 1.625 % plus 0.10 % as a SOFR adjustment, with principal of $ 3.1 million paid quarterly in arrears and a balloon payment of $ 283.7 million due upon maturity in August 2027 .

Interest rate swap agreements cover nearly 100 % of the principal balance to swap the floating interest rate to fixed rates.

Leasing GBXL I asset-backed term notes

GBX Leasing 2022-1 LLC (GBXL I or Issue r) was formed as a wholly owned special purpose entity (SPE) of GBX Leasing, LLC to securitize leased railcar assets.

GBXL I issued $ 323.3 million of term notes in February 2022 (2022 GBXL Notes) and $ 178.5 million of term notes in Nov ember 2023 (2023 GBXL Notes), which are secured by a portfolio of railcars and associated operating leases and other assets, acquired and owned by GBXL I.

Greenbrier Management Services, LLC (GMS) entered into certain agreements relating to the management and servicing of the Issuer’s assets.

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• GBXL I Series 2023-1 Class A Secured Railcar Equipment Notes (2023 Class A Notes) with a principal balance of $ 153.7 million as of August 31, 2025 and GBXL I Series 2023-1 Class B Secured Railcar Equipment Notes (2023 Class B Notes) with a principal balance of $ 19.2 million as of August 31, 2025, collectively the 2023 GBXL Notes.

GBX Leasing used the net proceeds received from the issuance of the 2023 GBXL Notes to pay down the GBX Leasing warehouse credit facility.

The 2022 GBXL Notes bear interest at fixed rates of 2.87 % and 3.45 % for the Class A Notes and Class B Notes, respectively.

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If the principal amount of the 2023 GBXL Notes and 2022 GBXL Notes has not been repaid in full by the anticipated repayment date, then the Issuer will also be required to pay additional interest to the holders at a rate equal to 4.00 % per annum.

The GBXL Notes are obligations of the Issuer only and are nonrecourse to Greenbrier.

The GBXL Notes are obligations of the Issuer only and are non-recourse to Greenbrier.

The GBXL Notes are subject to a Master Indenture between the Issuer and U.S.

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Equipment on operating leases, net

Notes payable, net

Debt, net — Non-recourse

As of August 31, 2025, contractual maturities of recourse and non-recourse debt are as follows:

(In millions)

Year ending August 31,

The recourse and non-recourse debt contains certain covenants with respect to the Company and various subsidiaries, the most restrictive of which, among other things, limit the ability to:

incur additional indebtedness or guarantees;

pay dividends or repurchase stock;

enter into capital leases;

create liens;

engage in transactions with affiliates, including joint ventures and non U.S.

subsidiaries, including but not limited to loans, advances, equity investments and guarantees;

enter into mergers, consolidations or sales of substantially all the Company’s assets;

and enter into new lines of business.

The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest and rent) coverage.

Note 12 — 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.

Foreign 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 loss.

At August 31, 2024 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros aggregated to $ 143.9 million.

The Company’s foreign 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 AOCL.

At August 31, 2025 exchange rates, notional amounts of foreign exchange contracts for the purchase of Polish Zlotys and the sale of Euros;

and the purchase of Mexican Pesos and the sale of U.S.

Dollars aggregated to $ 412.0 million.

The fair value of the contracts is included on the Consolidated Balance Sheets as Accounts payable and accrued liabilities when in a loss position, or as Accounts receivable, net when in a gain position.

As the contracts mature at various dates through March 2027, any such gain or loss remaining will be recognized in manufacturing 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.

As the contracts mature at various dates through March 2027, 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 AOCL would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence.

At August 31, 2025 exchange rates, approximately $ 0.2 million would be credited to revenue in the next year.

At August 31, 2024 , interest rate swap agreements maturing from August 2025 through January 2032 had notional amounts that aggregated to $ 653.1 million .

At August 31, 2025, interest rate swap agreements maturing from August 2027 through March 2032 ha d notional amounts that aggregated to $ 687.8 million .

The fair value of the contracts are included on the Consolidated Balance Sheets in Accounts payable and accrued liabilities when in a loss position, or in Accounts receivable, net when in a gain position.

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.

As interest expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified from AOCL and charged or credited to interest expense.

At August 31, 2025 interest rates, approximately $ 6.9 million would be credited to interest expense in the next year.

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Derivatives designated as hedging instruments

Foreign forward exchange contracts

Foreign exchange contracts

Accounts receivable, net

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Accounts payable and accrued liabilities

Derivatives not designated as hedging instruments

Foreign forward exchange contracts

Accounts receivable, net

Accounts payable and accrued liabilities

The Effect of Derivative Instruments on the Consolidated Statements of Income

Derivatives in cash flow hedging relationships

Location of gain (loss) recognized in income on derivative

Gain (loss) recognized in income on derivatives

Years ended August 31,

Foreign forward exchange contract

Interest and foreign exchange

The Effect of Derivative Instruments on Accumulated Other Comprehensive Loss

Derivatives in cash flow hedging relationships

Gain (loss) recognized in OCI on derivatives

Years ended August 31,

Location of gain (loss) reclassified from accumulated OCI into income

Gain (loss) reclassified from accumulated OCI into income

Years ended August 31,

Location of gain (loss) in income on derivative

(amount excluded from effectiveness testing)

Gain (loss) recognized on derivative

(amount excluded from effectiveness testing)

Years ended August 31,

Foreign forward exchange contracts

Cost of revenue

Gain (loss) recognized in Other comprehensive income (loss)

Year ended August 31,

Location of gain (loss) reclassified from AOCL into income

Gain (loss) reclassified from AOCL into income

Year ended August 31,

(In millions)

Foreign exchange contracts

Cost of revenue

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Interest and foreign exchange

The Effect of Derivative Instruments on the Consolidated Statements of Income

Derivatives in cash flow hedging relationships

Location of gain (loss)

Gain (loss) recognized in income on derivatives

Year ended August 31,

(In millions)

Foreign exchange contracts

Interest and foreign exchange

The following table presents the amounts in the Consolidated Statements of Income in which the effects of the cash flow hedges are recorded and the effects of the cash flow hedge activity on these line items for the years ended August 31, 2024, 2023 and 2022:

The following table presents the location and amounts in the Consolidated Statements of Income in which the effects of derivatives in cash flow hedging relationships were recorded:

For the Year Ended August 31,

(In millions)

Amount of gain (loss) on cash flow hedge activity

Cost of revenue

Interest and foreign exchange

Total Revenue

Gain (loss) on cash flow hedges in Revenue

Foreign exchange contracts:

Gain (loss) reclassified from AOCL

Amount excluded from effectiveness testing

Total Cost of revenue

Gain (loss) on cash flow hedges in Cost of revenue

Foreign exchange contracts:

Gain (loss) reclassified from AOCL

Amount excluded from effectiveness testing

Total Interest and foreign exchange

Gain (loss) on cash flow hedges in Interest and foreign exchange

Interest rate swap contracts:

Gain reclassified from AOCL

Note 13 — Equity

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The 2021 Stock Incentive Plan was approved by shareholders on January 6, 2021.

The new plan replaced the 2014 Amended and Restated Stock Incentive Plan, which was amended and restated as the 2017 Amended and Restated Stock Incentive Plan on October 24, 2017 and approved by shareholders on January 5, 2018.

The plan replaced the 2017 Amended and Restated Stock Incentive Plan.

The 2021 Stock Incentive Plan provides for the grant of incentive stock options, non-statutory stock options, restricted shares, restricted stock units and stock appreciation rights.

In addition to the 1.5 million shares reserved for issuance under the 2021 Stock Incentive Plan, up to 0.5 million shares previously reserved for issuance, but not issued or subject to outstanding awards, are available for issuance under the 2021 Stock Incentive Plan, and up to 0.9 million shares that were subject to outstanding awards under the 2017 Amended and Restated Stock Incentive Plan as of the effective date of the 2021 Stock Incentive Plan will also become available for issuance under the 2021 Stock Incentive Plan to the extent such shares are not issued and cease to be subject to such awards following the effective date of the 2021 Stock Incentive Plan.

As of August 31, 2025 , 2.2 million shares were authorized under the 2021 Stock Incentive Plan, which includes 0.7 million shares previously reserved under the 2017 Amended and Restated Stock Incentive Plan.

On August 31, 2025 , there were 0.8 million shares available for grant compared to 1.0 million and 1.2 million shares available for grant as of August 31, 2024 and 2023, respectively.

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During the years ended August 31, 2025, 2024, and 2023 , the Company awarded restricted stock unit grants totaling 0.3 million, 0.4 million, and 0.5 million shares, respectively, which include performance based grants and dividend equivalent rights.

For performance based awards granted in 2022, the performance metrics included an EBITDA metric, weighted 80 %, and a return on invested capital (ROIC) metric, weighted 20 %.

For performance based awards granted in 2023 and 2024, the performance metrics included the Company’s total shareholder return relative to a designated peer group (Relative TSR), weighted 20 %, in addition to an EBITDA metric, weighted 60 %, and an ROIC metric, weighted 20 %.

For performance based awards granted during the years ended August 31, 2025, 2024, and 2023 , the performance metrics included the Company’s total shareholder return relative to a designated peer group (Relative TSR), weighted 20 %, in addition to an EBITDA metric, weighted 60 %, and a return on invested capital (ROIC) metric, weighted 20 %.

Performance based award share payouts depend on the extent to which the performance goal has been achieved.

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The fair value of awards granted, including performance based grants that did not contain a Relative TSR market condition, was determined based on the market closing price of the underlying shares on the date of grant.

For the awards granted with a Relative TSR market condition, the Company estimates the fair value using a Monte-Carlo simulation model utilizing the following key assumptions for such awards:

awards granted with a Relative TSR market condition, the Company estimates the fair value using a Monte-Carlo simulation model utilizing the following key assumptions for such awards:

For the Year Ended August 31,

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During the year ended August 31, 2025 , a total of 0.4 million restricted stock units vested, including shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

The following table summarizes the activity for the Company’s restricted stock unit grants, including performance based grants, under the 2021 Stock Incentive Plan and the 2017 Amended and Restated Stock Incentive Plan:

The following table summarizes the activity for the Company’s restricted stock unit grants, including performance based grants, under the 2021 Stock Incentive Plan:

(in thousands, except per unit amounts)

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Outstanding as of August 31, 2024

Incremental shares earned for performance 2

Outstanding as of August 31, 2025

1 Includes 143 thousand time-based and 169 thousand performance-based restricted stock unit awards.

2 For the 2022-2024 performance period, incremental shares earned includes 55 thousand additional shares awarded to participants based on the EBITDA criteria for which actual performance resulted in a payout above target.

3 Includes 171 thousand time-based and 192 thousand performance-based restricted stock units.

Share Repurchase Program

The Board of Directors has authorized the Company to repurchase in aggregate up to $ 100.0 million of the Company’s common stock.

The program may be modified, suspended, or discontinued at any time without prior notice and currently has an expiration date of January 31, 2025 .

The program may be modified, suspended, or discontinued at any time without prior notice.

Under the share repurchase program, shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions.

1 unchanged sentence

The share repurchase program does not obligate the Company to acquire any specific number of shares in any period.

During the year ended August 31, 2024 , the Company purchased a total of 38 thousand shares for $ 1.3 million.

During the year ended August 31, 2023 , the Company purchased a total of 1.9 million shares for $ 56.9 million, of which 1.8 million shares for $ 53.6 million were purchased under the current authorization of the share repurchase program.

There were no shares repurchased under the share repurchase program during the year ended August 31, 2022.

As of August 31, 2024 , the amount remaining for repurchase under the share repurchase program was $ 45.1 million.

For shares repurchased subsequent to December 31, 2022, the Company accrued excise tax of $ 0.5 million to Additional paid-in capital for the year ended August 31, 2023.

Accrued excise tax of $ 0.5 million is included within Accounts payable and accrued liabilities on the Consolidated Balance Sheets as of August 31, 2024 and 2023.

During the year ended August 31, 2025 , the Company purchased a total of 517 thousand shares for $ 22.2 million under the current authorization of the share repurchase program.

As of August 31, 2025 , the amount remaining for repurchase under the current authorization of the share repurchase program was $ 77.8 million.

During the years ended August 31, 2024 and 2023, the Company purchased 38 thousand shares for $ 1.3 million and 1.9 million shares for $ 56.9 million, respectively.

Excise tax on shares repurchased is assessed at one percent of the fair market value of net shares repurchased and does not reduce the remaining share repurchase authorization.

For the years ended August 31, 2025 and 2023, the Company recorded excise tax on shares repurchased of $ 0.1 million and $ 0.5 million, respectively, to Additional paid-in capital.

No excise tax was recorded on shares repurchased for the year ended August 31, 2024.

Note 14 — Earnings Per Share

7 unchanged sentences

Weighted average diluted common shares outstanding

1 The dilutive effect of the 2.875 % Convertible notes due 2024 was excluded for the year ended August 31, 2022 as they were considered anti-dilutive under the “if converted” method as further discussed below.

These notes were retired on February 1, 2024.

1 The 2.875 % Convertible notes due 2024 were retired on February 1, 2024.

2 The dilutive effect of the 2.875 % Convertible notes, due 2028 was excluded for the years ended August 31, 2025, 2024 and 2023 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive.

As these notes require cash settlement for the principal, only a premium is potentially dilutive.

As these notes require cash settlement for the principal, only a premium is potentially dilutive under the "if converted" method as further discussed below.

3 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.

2 unchanged sentences

The first method includes the dilutive effect, using the treasury stock method, associated with restricted stock units and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved.

The second method supplements the first by also including the “if converted” effect of the 2.875 % Convertible notes due 2024 and shares underlying the 2.875 % Convertible notes due 2028, when there is a conversion premium.

The second method supplements the first by also including the “if converted” effect of the 2.875 % Convertible notes due 2024, during the periods in which they were outstanding, and shares underlying the 2.875 % Convertible notes due 2028, when there is a conversion premium.

Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes due 2024 are added back to net earnings and the share count is increased by the shares underlying the convertible notes.

10 unchanged sentences

Diluted earnings per share (1)

1 Diluted earnings per share was calculated as follows:

1 Diluted earnings per share for the year ended August 31, 2024 and 2023 was calculated as follows:

Earnings before interest and debt issuance costs on the 2.875 % convertible notes due 2024

6 unchanged sentences

Upon sale of railcars to this entity from Greenbrier, 60 % of the related revenue and margin was recognized and 40 % was deferred until the railcars were ultimately sold by the entity.

The Company recognized $ 15.1 million and $ 9.3 million with railcars sold out of the leasing warehouse during the year ended August 31, 2023 and 2022, respectively.

The Company recognized $ 15.1 million in Revenue on railcars sold out of the leasing warehouse during the year ended August 31, 2023.

Note 16 — Income Taxes

Components of income tax expense (benefit) were as follows:

Year Ended August 31,

Components of income tax expense were as follows:

For the Year Ended August 31,

(In millions)

Change in valuation allowance

Income tax expense (benefit)

Income tax expense

Earnings before income tax and earnings from unconsolidated affiliates for the years ended August 31, 2025, 2024 and 2023 were $ 255.3 million, $ 111.4 million and $ 32.2 million, respectively, for our domestic U.S.

1 unchanged sentence

The reconciliation between effective and statutory tax rates on operations is as follows:

Year Ended August 31,

For the Year Ended August 31,

Federal statutory rate

3 unchanged sentences

impact of foreign branch

Carryback rate benefit

Permanent differences

Base erosion and anti-avoidance tax (BEAT)

BEAT and minimum taxes

Change in valuation allowance

5 unchanged sentences

As of August 31, 2025 , income taxes receivable includes a balance of $ 22.9 million related to the carryback of the 2021 loss.

On July 4, 2025, the U.S.

1, commonly referred to as the One Big Beautiful Bill Act (OBBBA).

As a result, we recorded an increase of deferred tax liabilities and decrease of income tax payable related to the provisions for 100 % bonus depreciation on assets placed in service after January 19, 2025.

Additionally, our effective tax rate increased due to the impact of non-deductible depreciation in the calculation of our BEAT liability.

Many other provisions of the OBBBA will take effect in future tax years, and we are currently assessing their potential impact.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities were as follows:

3 unchanged sentences

Accrued payroll and related liabilities

Accrued liabilities

Deferred revenue

2 unchanged sentences

Lease liability

Interest expense

Net operating losses

4 unchanged sentences

Net deferred tax liability

As of August 31, 2024, the Company had $ 67.4 million of federal NOL carryforwards that do not expire, $ 15.4 million of federal credit carryforwards that will begin to expire in 2028, $ 193.0 million of state net operating loss carryforwards that will begin to expire in 2029 , $ 0.9 million of state credit carryforwards that will begin to expire in 2025 , $ 9.9 million of foreign net operating loss carryforwards that begin to expire in calendar 2024 and $ 26.2 million of foreign net operating loss carryforwards that do not expire.

As of August 31, 2025 , the Company had $ 5.6 million of federal net operating loss carryforwards that do not expire, $ 16.3 million of federal credit carryforwards that will begin to expire in 2028 , $ 40.2 million of state net operating loss carryforwards that do not expire, $ 108.5 million of state net operating loss carryforwards that will begin to expire in 2031 , $ 16.1 million of foreign net operating loss carryforwards that begin to expire in 2027 and $ 27.8 million of foreign net operating loss carryforwards that do not expire.

The Company has placed a valuation allowance of $ 13.9 million against the deferred tax assets for which a benefit is not more likely than not to be realized, including those for loss and credit carryforwards unlikely to be used before their expiration dates or where the possibility of utilization is remote.

The net increase in the total valuation allowance was approximately $ 6.3 million for the year ended August 31, 2024.

The net decrease in the total valuation allowance was approximately $ 2.0 million for the year ended August 31, 2025.

The Company's cumulative undistributed foreign earnings, if repatriated, would be accompanied by foreign withholdings taxes.

1 unchanged sentence

As a result, it has not recorded a liability for foreign withholding taxes associated with undistributed foreign earnings.

The determination of the unrecognized deferred tax liability on these earnings is not practicable due to the complexity and variety of assumptions necessary to estimate the tax.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

Year Ended August 31,

For the Year Ended August 31,

(In millions)

1 unchanged sentence

Gross increases – tax positions in prior period

Gross decreases – tax positions in prior period

Lapse of statute of limitations

3 unchanged sentences

As of August 31, 2025 and 2024 , the total amount of accrued interest was $ 1.2 million and $ 0.8 million, respectively.

expense for the years ended August 31, 2024, 2023 and 2022 included interest expense (benefit) related to unrecognized tax benefits of $ 0.2 million, $ 0.5 million and ($ 0.3 ) million, respectively.

The Company has not accrued any penalties on the unrecognized tax benefits and does not anticipate a significant decrease in unrecognized tax benefits during the next twelve months.

Income tax expense for the years ended August 31, 2025, 2024 and 2023 included interest expense related to unrecognized tax benefits of $ 0.4 million, $ 0.2 million and $ 0.5 million, respectively.

The Company has not accrued any penalties on the unrecognized tax benefits and anticipates a decrease of approximately $ 1.3 million within the next twelve months relating to settlements with taxing authorities.

The Company is subject to taxation in the U.S.

2 unchanged sentences

Federal examination for fiscal years ending before 2022, to state and local examinations before 2021, or to foreign examinations before 2017.

The Company currently has ongoing examinations in the U.S., Poland, and Romania.

The Company currently has ongoing examinations in Poland and Romania.

Note 17 — Segment Information

The Company operates in three reportable segments:

Manufacturing;

Maintenance Services;

and Leasing & Management Services.

The Company operates in two reportable segments:

Manufacturing and Leasing & Fleet Management.

See Note 1 - Nature of Operations to the Consolidated Financial Statements for additional information on the change in the Company’s reportable segments effective September 1, 2024.

Prior period segment results have been recast to reflect the Company’s new reportable segments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Performance is evaluated based on Earnings from operations.

Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model.

The Company does not allocate Interest and foreign exchange or Income tax benefit (expense) for either external or internal reporting purposes.

The Company’s CODM is Greenbrier’s President and Chief Executive Officer.

Segment earnings from operations is the measure of profit or loss used by the CODM.

As part of the Company’s budgeting and forecasting process, the CODM uses Segment earnings from operations to allocate capital and resources to each segment and considers variances from budget, forecasts, and prior period results to assess current period performance for each segment.

Segment earnings from operations includes all revenues, expenses, and net gains or losses on asset dispositions that are directly attributable to each segment.

Corporate expenses include selling and administrative costs not directly attributable to the reportable segments due to the Company’s integrated business model and therefore are not allocated to Segment earnings from operations.

The Company does not allocate Interest and foreign exchange, Earnings from unconsolidated affiliates, or Income tax benefit (expense) for either external or internal reporting purposes.

Intersegment sales and transfers are valued as if the sales or transfers were to third parties.

Related revenue and margin are eliminated in consolidation and therefore are not included in consolidated results in the Company’s Consolidated Financial Statements.

The information in the following tables is derived directly from the segments’ internal financial reports used for corporate management purposes.

The information in the following tables is derived directly from the segments’ internal financial reports used for corporate management purposes, which includes the significant expense categories that are regularly reviewed by the CODM.

For the Year Ended August 31, 2025

Earnings (loss) from operations

(In millions)

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Revenue from external customers

Intersegment revenue

Elimination of intersegment revenues

Total consolidated revenues

Cost of revenue

Cost of revenue from external customers

Intersegment cost of revenue

Elimination of intersegment margin

Selling and administrative

Net loss (gain) on disposition of equipment

Segment earnings from operations

For the Year Ended August 31, 2024

Earnings (loss) from operations

(In millions)

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Revenue from external customers

Intersegment revenue

Elimination of intersegment revenues

Total consolidated revenues

Cost of revenue

Cost of revenue from external customers

Intersegment cost of revenue

Elimination of intersegment margin

Selling and administrative

Net loss (gain) on disposition of equipment

Segment earnings from operations

For the Year Ended August 31, 2023

Earnings (loss) from operations

(In millions)

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Revenue from external customers

Intersegment revenue

Elimination of intersegment revenues

Total consolidated revenues

Cost of revenue

Cost of revenue from external customers

Intersegment cost of revenue

Elimination of intersegment margin

Selling and administrative

Net gain on disposition of equipment

Asset impairment, disposal, and exit costs, net

Segment earnings from operations

Reconciliation of Segment earnings from operations to Earnings before income tax and earnings from unconsolidated affiliates:

For the Year Ended August 31,

(In millions)

Segment earnings from operations

Manufacturing

Leasing & Fleet Management

Earnings from operations

Interest and foreign exchange

Earnings before income tax and earnings from unconsolidated affiliates

The following table presents selected financial information by segment.

Year Ended August 31,

1 unchanged sentence

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Unallocated, including cash

1 unchanged sentence

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

Capital expenditures:

Manufacturing

Maintenance Services

Leasing & Management Services

Leasing & Fleet Management

The following table summarizes selected geographic information.

2 unchanged sentences

1 Revenue is presented on the basis of geographic location of customers.

Reconciliation of Earnings from operations to Earnings before income tax and earnings from unconsolidated affiliates:

Year Ended August 31,

(In millions)

Earnings from operations

Interest and foreign exchange

Earnings before income tax and earnings from unconsolidated affiliates

Note 18 — Customer Concentration

Customer concentration is defined as a single customer that accounts for more than 10% of Consolidated Revenue or Accounts receivable, net.

In 2025 , revenue from two customers represented 14 % and 12 % of Consolidated Revenue.

In 2024 , revenue from one customer represented 10 % of Consolidated Revenue.

In 2023 , revenue from two customers represented 21 % and 10 % of Consolidated Revenue.

In 2022 , revenue from three customers each represented 16 %, 12 % and 11 % of Consolidated Revenue.

No other customers accounted for more than 10% of Consolidated Revenue for the years ended August 31, 2025, 2024, or 2023 .

No customers had a balance that individually equaled or exceeded 10% of the Consolidated Accounts receivable, net balance at August 31, 2025 .

One customer had a balance that individually equaled or exceeded 10% of Accounts receivable, net, representing 14 % of the Consolidated Accounts receivable, net balance at August 31, 2024 .

No customer had a balance that individually equaled or exceeded 10% of Accounts receivable, net at August 31, 2023.

Note 19 — Lease Commitments

1 unchanged sentence

Depreciation expense was $ 36.4 million, $ 36.0 million and $ 26.0 million for the years ended August 31, 2025, 2024, and 2023 respectively.

In addition, certain railcar equipment leased-in by the Company on operating leases is subleased to customers under non-cancelable operating leases with lease terms ranging from one to ten years .

In addition, certain railcar equipment leased-in by the Company on operating leases is subleased to customers under non-cancelable operating leases with lease terms ranging from one to seven years .

Operating lease rental revenues included in the Company’s Consolidated Statements of Income for the years ended August 31, 2025, 2024, and 2023 was $ 139.2 million, $ 121.1 million and $ 91.9 million respectively, which included $ 22.3 million, $ 19.9 million, and $ 19.3 million respectively, of revenue as a result of daily, monthly or car hire utilization arrangements.

3 unchanged sentences

As of and for the years ended August 31, 2025, 2024, and 2023, finance leases were not a material component of the Company's lease portfolio.

The Company’s real estate and equipment leases have remaining lease terms ranging from less than one year to 74 years , with some including options to extend up to 7 years .

The Company recognizes a lease liability and corresponding ROU asset based on the present value of lease payments.

The Company’s real estate and equipment leases have remaining lease

terms ranging from less than one year to 73 years , with some including options to extend up to 10 years .

T he Company recognizes a lease liability and corresponding ROU asset based on the present value of lease payments.

To determine the present value of lease payments, as most of its leases do not provide a readily determinable implicit rate, the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date.

10 unchanged sentences

Total lease obligations

The table below presents additional information related to the Company’s operating leases as of August 31, 2024:

The table below presents additional information related to the Company’s operating leases:

As of August 31,

(In millions)

Weighted average remaining lease term

1 unchanged sentence

Supplemental cash flow information related to leases were as follows:

For the Year Ended August 31,

(In millions)

For the Year Ended

August 31, 2024

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

ROU assets obtained in exchange for new operating lease liabilities

ROU assets obtained in exchange for lease liabilities:

Operating leases

Note 20 — Commitments and Contingencies

Portland Harbor Superfund Site

The Company’s former Portland, Oregon manufacturing facility (the Portland Property) is located adjacent to the Willamette River.

The Company’s former Portland, Oregon manufacturing facility (Portland Property) is located adjacent to the Willamette River.

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 Portland Property, 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.

Environmental Protection Agency (EPA) classified portions of the Willamette River bed and certain riverbanks known as the Portland Harbor, including the portion fronting the Portland Property, as a federal "National Priority List" or "Superfund" site due to sediment contamination (Portland Harbor Superfund 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 Superfund 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.

Ten private and public entities, including the Company (the Lower Willamette Group or LWG), 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 did not sign such consent, but nevertheless contributed financially to the effort.

Ten private and public entities, including the Company (the Lower Willamette Group or LWG), signed an Administrative Order

on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Superfund Site under EPA oversight, and several additional entities did not sign such consent, but nevertheless contributed financially to the effort.

The EPA-mandated RI/FS was produced by the LWG and cost over $ 110 million during a 17-year period.

2 unchanged sentences

Some or all of any such outlay may be recoverable from other responsible parties.

The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, approximately 100 parties, including the State of Oregon and the federal government, are participating in a non-judicial, mediated allocation process to try to allocate costs associated with remediation of the Portland Harbor Site.

The Company will continue to participate in the allocation process.

Approximately 110 additional parties signed tolling agreements related to such allocations.

On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims;

A & C Foundry Products, Inc.

District Court, District of Oregon, Case #3:09-cv-453-PK.

All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 14, 2025.

The EPA's January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $ 1.7 billion.

The EPA issued its Record of Decision (ROD) for the Portland Harbor Superfund Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

The EPA's January 6, 2017 ROD identifies a cleanup remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $ 1.7 billion.

The EPA typically expects its cost estimates to be accurate within a range of - 30 % to + 50 %, but this ROD states that changes in costs are likely to occur.

The EPA has identified several work areas within the ROD cleanup area.

One of the units, RM9W, includes the nearshore area of the river sediments offshore and downstream of the Portland Property.

It also includes a portion of the Portland Property's riverbank.

The ROD does not break down total remediation costs by Sediment Decision Unit.

The ROD does not address responsibility for the costs of remedial action, nor does it allocate such costs among the potentially responsible parties.

The EPA has identified several work areas within the ROD remedial action area.

One of the units, currently referred to as the river mile 9 West work area (RM9W) includes river sediments offshore and downstream of the Portland Property.

It also includes a large portion of the Portland Property's riverbanks.

The ROD does not break down total remediation costs by work area.

The EPA requested that potentially responsible parties enter AOCs during 2019 agreeing to conduct remedial design studies.

Some parties have signed AOCs, including one party with respect to RM9W.

Additionally, at some portions of the Portland Harbor Superfund Site, the EPA is conducting the remedial design work.

Remedial action will follow remedial design.

The Company has not signed an AOC in connection with remedial design, but is assisting in funding a portion of the RM9W remedial design.

The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties.

Responsibility for funding and implementing the EPA's selected cleanup remedy will be determined at an unspecified later date.

Based on the investigation to date, the Company believes that it did not contribute in any material way to contaminants of concern in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to the Portland Property precedes the Company’s ownership of the Portland Property.

Because these environmental investigations are still underway, sufficient information is currently not available to determine the Company’s liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss.

Based on the results of the pending investigations and future assessments of natural resource damages, the Company may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including the Company as well as the federal government and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Superfund Site and the schedule for such remediation, approximately 100 parties, including the State of Oregon and the federal government, are participating in a non-judicial, mediated allocation process to try to allocate costs associated with remediation of the Portland Harbor Superfund Site.

The Company will continue to participate in the allocation process.

Approximately 100 additional parties signed tolling agreements related to such allocations.

On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims.

A & C Foundry Products, Inc.

District Court for the District of Oregon, Case #3:09-cv-453-PK.

All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court to allow the allocation to proceed, currently through January 14, 2028.

On January 30, 2017, the Confederated Tribes and Bands of the Yakama Nation sued 30 parties, including the Company as well as the federal government and the State of Oregon, for costs it incurred in assessing alleged natural resource damages to the Lower Columbia River and Multnomah Channel from contaminants deposited at the Portland Harbor Superfund Site.

Confederated Tribes and Bands of the Yakama Nation v.

Air Liquide America Corp., et al., U.S.

Court for the District of Oregon Case No.

3i17-CV-00164-SB.

District Court for the District of Oregon, Portland Division, Case No.

3:17-CV-00164.

The complaint does not specify the amount of damages the plaintiff will seek.

The case has been stayed until January 14, 2025.

The Yakama litigation is stayed pending completion of the allocation process under supervision of the Arkema court, currently through January 14, 2028.

On November 20, 2024, the Company, as part of a group of about 60 recipients, received a “Special Notice” letter (SNL) from the EPA.

The Company timely responded by the May 30, 2025 response deadline.

The EPA routinely sends SNLs when it is ready to formally start negotiations with potentially responsible parties in an effort to reach a settlement to conduct or finance the remedial action.

Such letters trigger the start of an enforcement moratorium during which time the EPA agrees not to unilaterally order any potentially responsible parties to conduct the remediation.

Under this process, if settlement is reached, the settlement terms will normally be set out in a consent decree that is lodged in federal court.

The terms of the SNL that the Company received are settlement confidential.

The EPA has publicly stated that it issued the letters now because it wants a seamless transition from the remedial-design phase to the remediation-implementation phase, that more potentially responsible parties may receive such a letter, and that the agency expects the settlement negotiations to take up to two years.

Some allocation participants, including the Company, are discussing remedial action consent decree terms with the EPA and the U.S.

Department of Justice.

Responsibility for funding and implementing the EPA's selected cleanup remedy will be determined at an unspecified later date as part of the allocation process.

Based on the investigation to date, the Company believes that it did not contribute in any material way to contaminants of concern in the river sediments or the damage of natural resources

in the Portland Harbor Superfund Site and that the damage in the area of the Portland Harbor Superfund Site adjacent to the Portland Property precedes the Company’s ownership of the Portland Property.

On June 9, 2025, the natural resources trustees for the Portland Harbor Superfund Site, consisting of the U.S., on behalf of the National Oceanic and Atmospheric Administration of the U.S.

Department of Commerce and the U.S.

Department of the Interior;

the State of Oregon, on behalf of the Oregon Department of Fish and Wildlife;

and several tribes moved to enter two consent decrees that were lodged with the Oregon district court on November 1, 2023 to resolve trustees’ natural resources claims in a complaint filed on the same day.

United States of America et al.

v ACF Industries LLC et al.

District Court for the District of Oregon, Case #3:23-cv-01603-YY.

The Company is not a defendant under the 2023 complaint nor a party to either of the consent decrees.

The consent decrees would resolve the defendants’ liability for natural resource damages at the Portland Harbor Superfund Site before the conclusion of the remedial design and allocation processes.

On July 28, 2025, the Company, along with several other potentially responsible parties at the Portland Harbor Superfund Site, filed motions to intervene and to oppose the entry of the consent decrees.

The court has granted the motions to intervene.

Oral argument was held on September 29, 2025.

The court has not yet issued an opinion.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Property

6 unchanged sentences

Any of these matters could adversely affect the Company's business and Consolidated Financial Statements.

However, any contamination or exacerbation of contamination that occurs after the sale of the property will be the liability of the current and future owners and operators of the Portland Property.

However, any contamination or exacerbation of contamination that occurs after the sale of the Portland Property will be the liability of the current and future owners and operators of the Portland Property.

Other Litigation, Commitments and Contingencies

21 unchanged sentences

1 Level 2 assets include derivative financial instruments which are valued based on significant observable inputs.

See Note 13 - Derivative Instruments for further discussion.

See Note 12 - Derivative Instruments to the Consolidated Financial Statements for further discussion.

Note 22 – Fair Value of Financial Instruments

1 unchanged sentence

(In millions)

Notes payable as of August 31, 2024

Notes payable as of August 31, 2023

1 Carrying amount disclosed in this table excludes other notes payable and debt discount and issuance costs.

The carrying amount of cash and cash equivalents, accounts receivable, revolving notes and accounts payable and accrued liabilities is a reasonable estimate of fair value of these financial instruments.

Estimated rates currently available to the Company for debt with similar terms and remaining maturities and current market data are used to estimate the fair value of notes payable.

Debt as of August 31, 2025

Debt as of August 31, 2024

1 Carrying amount disclosed in this table excludes credit facility balances, other notes payable, and debt discount and issuance costs.

The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities is a reasonable estimate of fair value of these financial instruments.

Estimated rates currently available to the Company for debt with similar terms and remaining maturities and current market data are used to estimate the fair value.

CHANGES IN AND DISAGREEMENTS WITH ACCO UNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 7. Management’s Discussion and Analysis