# Greenbrier Companies Inc: Form 10-Q for the period ended Feb 28, 2025

- Company: [Greenbrier Companies Inc](/companies/gbx.md) (CIK 923120)
- Form: 10-Q
- Filed: 2025-04-08
- Accepted by EDGAR: Apr 8, 2025, 16:05 ET
- Period: 2025-02-28
- Accession: 0000950170-25-052054
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/923120/000095017025052054/gbx-20250228.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/923120/000095017025052054/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-02-28.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-12-01 to 2025-02-28 | $762.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-09-01 to 2025-02-28 | $1.64bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-12-01 to 2025-02-28 | $623.5m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-09-01 to 2025-02-28 | $1.33bn | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-12-01 to 2025-02-28 | $138.6m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-09-01 to 2025-02-28 | $312.2m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-12-01 to 2025-02-28 | $64.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-09-01 to 2025-02-28 | $126.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-12-01 to 2025-02-28 | $83.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-09-01 to 2025-02-28 | $195.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-12-01 to 2025-02-28 | $20.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-09-01 to 2025-02-28 | $53.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-12-01 to 2025-02-28 | $51.9m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-09-01 to 2025-02-28 | $107.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-12-01 to 2025-02-28 | $1.56 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-09-01 to 2025-02-28 | $3.28 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-12-01 to 2025-02-28 | $1.66 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-09-01 to 2025-02-28 | $3.42 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-12-01 to 2025-02-28 | 33,228,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-09-01 to 2025-02-28 | 32,745,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-09-01 to 2025-02-28 | $28.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-09-01 to 2025-02-28 | $126.4m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 6 months, 2024-09-01 to 2025-02-28 | $19.8m | us-gaap:PaymentsOfDividends |
| Share repurchases | 6 months, 2024-09-01 to 2025-02-28 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-02-28 | $263.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-02-28 | $4.27bn | us-gaap:Assets |
| Shareholders' equity | at 2025-02-28 | $1.46bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 52,459 characters.

### Executive Summary

We operate in two reportable segments: Manufacturing and Leasing & Fleet Management. Our segments are operationally integrated. The Manufacturing segment, which primarily operates from facilities in the U.S., Mexico, Poland and Romania, produces freight railcars, tank cars, intermodal railcars, automotive railcar products, sustainable conversions, and a variety of parts for the rail industry. We also perform railcar maintenance, which includes wheel and axle servicing. The Leasing & Fleet Management segment owns approximately 16,600 railcars as of February 28, 2025. We also provide fleet management for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.

We continue to execute on our multi-year strategy. Overall, demand in the marketplace is relatively steady for our products and services. We delivered strong results for the six months ended February 28, 2025, which included the following:

- Margin percentage of 19.1% which was a 4.5% improvement compared to the same period last year. The increase was driven by operating efficiencies and a favorable product mix in our Manufacturing segment.
- Net earnings attributable to Greenbrier increased $42.6 million or 65.9% compared to the same period last year. The increase was attributed to higher Margin as described above and an increase in Net gain on disposition of equipment attributed to higher sales of assets from our lease fleet.
- Increased our owned lease fleet by 1,100 railcars, representing a 7.1% increase since August 31, 2024.

We believe our results highlight our continued focus on our strategic plan and 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.

Our railcar backlog was 20,400 units with an estimated value of $2.6 billion as of February 28, 2025, with deliveries extending into 2026 and beyond. Our backlog includes approximately $590 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Approximately 6% of backlog units and 5% of estimated backlog value as of February 28, 2025 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.

Our backlog of railcar units is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms. Customers may attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time.

As part of our continued optimization efforts of our industrial footprint, we are consolidating our European operations and approved the closure of one of our manufacturing facilities in Romania. We expect the closure to be completed in 2025.

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 the 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. See Note 12 - Segment Information to the Condensed Consolidated Financial Statements for additional information for additional information on our reportable segments.

Risks, uncertainties and other important factors described in Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024 may have a material negative impact on our business, liquidity, results of operations and stock price. Beyond these general observations, we are unable to predict when, how, or with what magnitude these items will impact our business.

### Three Months Ended February 28, 2025 Compared to the Three Months Ended February 29, 2024

### Overview

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.

*(in millions, except per share amounts)*

| Revenue | Three Months Ended February 28, 2025 | February 29, 2024 |
| --- | ---: | ---: |
| Manufacturing | $700.3 | $811.0 |
| Leasing & Fleet Management | 61.8 | 51.7 |
|  | 762.1 | 862.7 |
| **Cost of revenue** |  |  |
| Manufacturing | 605.4 | 725.4 |
| Leasing & Fleet Management | 18.1 | 15.1 |
|  | 623.5 | 740.5 |
| **Margin** |  |  |
| Manufacturing | 94.9 | 85.6 |
| Leasing & Fleet Management | 43.7 | 36.6 |
|  | 138.6 | 122.2 |
| Selling and administrative expense | 64.6 | 63.6 |
| Net gain on disposition of equipment | (9.6) | (4.9) |
| **Earnings from operations** | 83.6 | 63.5 |
| Interest and foreign exchange | 21.7 | 24.6 |
| Earnings before income tax and earnings from unconsolidated affiliates | 61.9 | 38.9 |
| Income tax expense | (20.0) | (9.3) |
| Earnings before earnings from unconsolidated affiliates | 41.9 | 29.6 |
| Earnings from unconsolidated affiliates | 4.3 | 4.0 |
| Net earnings | 46.2 | 33.6 |
| Net (earnings) loss attributable to noncontrolling interest | 5.7 | (0.2) |
| **Net earnings attributable to Greenbrier** | $51.9 | $33.4 |
| Diluted earnings per common share | $1.56 | $1.03 |

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. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.

*(in millions)*

| Earnings (loss) from operations: | Three Months Ended February 28, 2025 | February 29, 2024 |
| --- | ---: | ---: |
| Manufacturing | $69.0 | $63.4 |
| Leasing & Fleet Management | 45.6 | 33.2 |
| Corporate | (31.0) | (33.1) |
|  | $83.6 | $63.5 |

26

### Consolidated Results

*(in millions)*

|  | Three Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $762.1 | $862.7 | $(100.6) | (11.7%) |
| Cost of revenue | $623.5 | $740.5 | $(117.0) | (15.8%) |
| Margin (%) | 18.2% | 14.2% | 4.0% | \* |
| Net earnings attributable to Greenbrier | $51.9 | $33.4 | $18.5 | 55.4% |

\* Not meaningful

Through our integrated business model, we provide a broad range of custom products and services in each of our reportable segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results.

Revenue decreased 11.7% for the three months ended February 28, 2025 as compared to the three months ended February 29, 2024 primarily due to a 5.7% decrease in railcar deliveries and a change in product mix.

Cost of revenue decreased 15.8% for the three months ended February 28, 2025 as compared to the three months ended February 29, 2024 primarily due to operating efficiencies within our Manufacturing segment and a 5.7% decrease in railcar deliveries.

Margin percentage increased 4.0% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024 primarily due to operating efficiencies within our Manufacturing segment.

Net earnings attributable to Greenbrier increased $18.5 million for the three months ended February 28, 2025 as compared to the three months ended February 29, 2024 primarily due to:

- $16.4 million increase in Margin primarily due to operating efficiencies within our Manufacturing segment and a $7.8 million increase in rents associated with a larger fleet and improved lease rates in our Leasing & Fleet Management segment during the three months ended February 28, 2025.
- $5.9 million increase in net loss attributable to noncontrolling interest primarily due to lower railcar deliveries at our Mexican railcar manufacturing joint venture during the three months ended February 28, 2025.
- $4.7 million increase in Net gain on disposition of equipment attributed to higher sales of assets from our lease fleet during the three months ended February 28, 2025.

This was partially offset by the following:

- $10.7 million increase in Income tax expense due to higher pre-tax earnings and jurisdictional earnings mix.

### Manufacturing Segment

*(In millions, except railcar deliveries)*

|  | Three Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $700.3 | $811.0 | $(110.7) | (13.6%) |
| Cost of revenue | $605.4 | $725.4 | $(120.0) | (16.5%) |
| Margin (%) | 13.6% | 10.6% | 3.0% | \* |
| Earnings from operations ($) | $69.0 | $63.4 | $5.6 | 8.8% |
| Earnings from operations (%) | 9.9% | 7.8% | 2.1% | \* |
| Deliveries | 5,000 | 5,300 | (300) | (5.7%) |

\* Not meaningful

Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products, components and the conversion of existing or in-service railcars. Manufacturing also generates revenue by providing railcar maintenance services.

Manufacturing Revenue decreased $110.7 million or 13.6% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024 primarily due to a 5.7% decrease in railcar deliveries and a change in product mix.

Manufacturing Cost of revenue decreased $120.0 million or 16.5% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The decrease was primarily attributed to operating efficiencies and a 5.7% decrease in railcar deliveries during the three months ended February 28, 2025.

Manufacturing Margin percentage increased 3.0% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily attributed to operating efficiencies during the three months ended February 28, 2025.

Manufacturing Earnings from operations increased $5.6 million for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily attributed to operating efficiencies during the three months ended February 28, 2025. This was partially offset by a 5.7% decrease in railcar deliveries.

### Leasing & Fleet Management Segment

*(in millions)*

|  | Three Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $61.8 | $51.7 | $10.1 | 19.5% |
| Cost of revenue | $18.1 | $15.1 | $3.0 | 19.9% |
| Margin (%) | 70.7% | 70.8% | (0.1%) | \* |
| Earnings from operations ($) | $45.6 | $33.2 | $12.4 | 37.3% |
| Earnings from operations (%) | 73.8% | 64.2% | 9.6% | \* |

\* Not meaningful

The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management, 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 $10.1 million or 19.5% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily attributed to an increase of $7.8 million in rents associated with growth of the fleet and improved lease rates in addition to higher syndication activity during the three months ended February 28, 2025.

Leasing & Fleet Management Cost of revenue increased $3.0 million or 19.9% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily due to higher costs from a larger fleet during the three months ended February 28, 2025.

Leasing & Fleet Management Margin percentage decreased 0.1% for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The decrease was primarily attributed to higher sales of railcars that we purchased from third parties, which have lower margin percentages, during the three months ended February 28, 2025. This was partially offset by improved lease rates and higher syndication activity for the three months ended February 28, 2025.

Leasing & Fleet Management Earnings from operations increased $12.4 million for the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates, a $4.3 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet and higher syndication activity for the three months ended February 28, 2025.

### Selling and Administrative Expense

*(in millions)*

|  | Three Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Selling and administrative expense | $64.6 | $63.6 | $1.0 | 1.6% |

Selling and administrative expense was $64.6 million for the three months ended February 28, 2025 compared to $63.6 million for the prior comparable period. The $1.0 million increase was primarily attributed to higher employee-related costs for the three months ended February 28, 2025.

### Net Gain on Disposition of Equipment

Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our lease fleet and to manage risk and liquidity.

Net gain on disposition of equipment was $9.6 million for the three months ended February 28, 2025 compared to $4.9 million for the prior comparable period. The increase in Net gain on disposition of equipment was primarily attributed to higher sales of assets from our lease fleet during the three months ended February 28, 2025.

### Interest and Foreign Exchange

Interest and foreign exchange expense was composed of the following:

*(in millions)*

| Interest and foreign exchange: | Three Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| Interest and other expense, net | $20.4 | $23.9 | $(3.5) |
| Foreign exchange loss, net | 1.3 | 0.7 | 0.6 |
|  | $21.7 | $24.6 | $(2.9) |

The $2.9 million decrease in Interest and foreign exchange expense for the three months ended February 28, 2025 compared to the three months ended February 29, 2024 was primarily attributed to higher interest income during the three months ended February 28, 2025.

### Income Tax

For the three months ended February 28, 2025, we had Income tax expense of $20.0 million on pre-tax income of $61.9 million for an effective tax rate of 32.3%. The effective tax rate was impacted by net unfavorable discrete items related to our foreign subsidiaries.

For the three months ended February 29, 2024, we had Income tax expense of $9.3 million on pre-tax income of $38.9 million for an effective tax rate of 23.9%. The effective tax rate benefited from net favorable discrete items related to our foreign subsidiaries.

The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to 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.

### Earnings From Unconsolidated Affiliates

Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis.

Earnings from unconsolidated affiliates were $4.3 million and $4.0 million for the three months ended February 28, 2025 and February 29, 2024, respectively. The increase was primarily related to $0.5 million in higher earnings at our Brazil operations for the three months ended February 28, 2025.

### Noncontrolling Interest

Net loss attributable to noncontrolling interest was $5.7 million for the three months ended February 28, 2025 compared to Net earnings attributable to noncontrolling interest of $0.2 million for the three months ended February 29, 2024. Net (earnings) loss attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations. The $5.9 million change from the prior year is primarily a result of a decrease in earnings due to lower railcar deliveries at our Mexican railcar manufacturing joint venture.

### Six Months Ended February 28, 2025 Compared to the Six Months Ended February 29, 2024

### Overview

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.

*(in millions, except per share amounts)*

| Revenue | Six Months Ended February 28, 2025 | February 29, 2024 |
| --- | ---: | ---: |
| Manufacturing | $1,520.7 | $1,570.7 |
| Leasing & Fleet Management | 117.3 | 100.8 |
|  | 1,638.0 | 1,671.5 |
| **Cost of revenue** |  |  |
| Manufacturing | 1,285.8 | 1,397.9 |
| Leasing & Fleet Management | 40.0 | 30.1 |
|  | 1,325.8 | 1,428.0 |
| **Margin** |  |  |
| Manufacturing | 234.9 | 172.8 |
| Leasing & Fleet Management | 77.3 | 70.7 |
|  | 312.2 | 243.5 |
| Selling and administrative expense | 126.6 | 119.9 |
| Net gain on disposition of equipment | (9.8) | (4.8) |
| **Earnings from operations** | 195.4 | 128.4 |
| Interest and foreign exchange | 45.1 | 47.8 |
| Earnings before income tax and earnings from unconsolidated affiliates | 150.3 | 80.6 |
| Income tax expense | (53.4) | (19.3) |
| Earnings before earnings from unconsolidated affiliates | 96.9 | 61.3 |
| Earnings from unconsolidated affiliates | 8.4 | 5.5 |
| Net earnings | 105.3 | 66.8 |
| Net (earnings) loss attributable to noncontrolling interest | 1.9 | (2.2) |
| **Net earnings attributable to Greenbrier** | $107.2 | $64.6 |
| Diluted earnings per common share | $3.28 | $1.99 |

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. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.

*(in millions)*

| Earnings (loss) from operations: | Six Months Ended February 28, 2025 | February 29, 2024 |
| --- | ---: | ---: |
| Manufacturing | $185.1 | $128.3 |
| Leasing & Fleet Management | 72.3 | 59.5 |
| Corporate | (62.0) | (59.4) |
|  | $195.4 | $128.4 |

32

### Consolidated Results

*(in millions)*

|  | Six Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $1,638.0 | $1,671.5 | $(33.5) | (2.0%) |
| Cost of revenue | $1,325.8 | $1,428.0 | $(102.2) | (7.2%) |
| Margin (%) | 19.1% | 14.6% | 4.5% | \* |
| Net earnings attributable to Greenbrier | $107.2 | $64.6 | $42.6 | 65.9% |

\* Not meaningful

Through our integrated business model, we provide a broad range of custom products and services in each of our reportable segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results.

Revenue decreased 2.0% for the six months ended February 28, 2025 as compared to the six months ended February 29, 2024 primarily due to a $30.4 million reduction in railcar maintenance services revenue due to lower volumes in addition to a change in railcar manufacturing product mix. This was partially offset by a $16.5 million increase in Revenue in our Leasing & Fleet Management segment primarily attributed to higher rents associated with a larger fleet and improved lease rates in addition to an increase in the sale of railcars which we had purchased from third parties with the intent to resell during the six months ended February 28, 2025.

Cost of revenue decreased 7.2% for the six months ended February 28, 2025 as compared to the six months ended February 29, 2024 primarily due to operating efficiencies within our Manufacturing segment and a decrease in railcar maintenance service volumes.

Margin percentage increased 4.5% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 primarily due to operating efficiencies within our Manufacturing segment. This was partially offset by a 4.2% decrease in Leasing & Fleet Management Margin percentage for the six months ended February 28, 2025 primarily attributed to higher sales of railcars that we purchased from third parties, which have lower margin percentages, and lower syndication activity.

Net earnings attributable to Greenbrier increased $42.6 million for the six months ended February 28, 2025 as compared to the six months ended February 29, 2024 primarily due to:

- $68.7 million increase in Margin primarily due to operating efficiencies within our Manufacturing segment for the six months ended February 28, 2025.
- $5.0 million increase in Net gain on disposition of equipment attributed to higher sales of assets from our lease fleet during the six months ended February 28, 2025.

This was partially offset by the following:

- $34.1 million increase in Income tax expense due to higher pre-tax earnings, jurisdictional earnings mix, and net unfavorable discrete items related to our foreign subsidiaries.
- $6.7 million increase in Selling and administrative expense primarily attributed to higher employee-related costs for the six months ended February 28, 2025.

### Manufacturing Segment

*(In millions, except railcar deliveries)*

|  | Six Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $1,520.7 | $1,570.7 | $(50.0) | (3.2%) |
| Cost of revenue | $1,285.8 | $1,397.9 | $(112.1) | (8.0%) |
| Margin (%) | 15.4% | 11.0% | 4.4% | \* |
| Earnings from operations ($) | $185.1 | $128.3 | $56.8 | 44.3% |
| Earnings from operations (%) | 12.2% | 8.2% | 4.0% | \* |
| Deliveries | 10,600 | 10,500 | 100 | 1.0% |

\* Not meaningful

Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products, components and the conversion of existing or in-service railcars. Manufacturing also generates revenue by providing railcar maintenance services.

Manufacturing Revenue decreased $50.0 million or 3.2% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 primarily from a $30.4 million reduction in railcar maintenance services revenue due to lower volumes in addition to a change in railcar manufacturing product mix. These were partially offset by a 1.0% increase in railcar deliveries for the six months ended February 28, 2025.

Manufacturing Cost of revenue decreased $112.1 million or 8.0% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The decrease was primarily attributed to operating efficiencies and a decrease in railcar maintenance service volumes during the six months ended February 28, 2025. These were partially offset by a 1.0% increase in railcar deliveries.

Manufacturing Margin percentage increased 4.4% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The increase was primarily attributed to operating efficiencies during the six months ended February 28, 2025.

Manufacturing Earnings from operations increased $56.8 million for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The increase was primarily attributed to operating efficiencies and a 1.0% increase in railcar deliveries during the six months ended February 28, 2025.

### Leasing & Fleet Management Segment

*(in millions)*

|  | Six Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $117.3 | $100.8 | $16.5 | 16.4% |
| Cost of revenue | $40.0 | $30.1 | $9.9 | 32.9% |
| Margin (%) | 65.9% | 70.1% | (4.2%) | \* |
| Earnings from operations ($) | $72.3 | $59.5 | $12.8 | 21.5% |
| Earnings from operations (%) | 61.6% | 59.0% | 2.6% | \* |

\* Not meaningful

The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management, 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 $16.5 million or 16.4% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The increase was primarily attributed to an increase of $14.4 million in rents associated with growth of the fleet and improved lease rates in addition to a $6.8 million increase in the sale of railcars which we had purchased from third parties with the intent to resell during the six months ended February 28, 2025. These were partially offset by lower syndication activity during the six months ended February 29, 2024.

Leasing & Fleet Management Cost of revenue increased $9.9 million or 32.9% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The increase was primarily due to higher costs from an increase in the volume of railcars sold that we purchased from third parties and a larger fleet during the six months ended February 28, 2025.

Leasing & Fleet Management Margin percentage decreased 4.2% for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The decrease was primarily attributed to higher sales of railcars that we purchased from third parties, which have lower margin percentages, and lower syndication activity for the six months ended February 28, 2025. These were partially offset by improved lease rates for the six months ended February 28, 2025.

Leasing & Fleet Management Earnings from operations increased $12.8 million for the six months ended February 28, 2025 compared to the six months ended February 29, 2024. The increase was primarily attributed to higher rents associated with a larger fleet and improved lease rates in addition to a $4.4 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet for the six months ended February 28, 2025. These were partially offset by lower syndication activity for the six months ended February 28, 2025.

### Selling and Administrative Expense

*(in millions)*

|  | Six Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Selling and administrative expense | $126.6 | $119.9 | $6.7 | 5.6% |

Selling and administrative expense was $126.6 million for the six months ended February 28, 2025 compared to $119.9 million for the prior comparable period. The $6.7 million increase was primarily attributed to higher employee-related costs for the six months ended February 28, 2025.

### Net Gain on Disposition of Equipment

Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our lease fleet and to manage risk and liquidity.

Net gain on disposition of equipment was $9.8 million for the six months ended February 28, 2025 compared to $4.8 million for the prior comparable period. The increase in Net gain on disposition of equipment was primarily attributed to higher sales of assets from our lease fleet during the six months ended February 28, 2025.

### Interest and Foreign Exchange

Interest and foreign exchange expense was composed of the following:

*(in millions)*

| Interest and foreign exchange: | Six Months Ended February 28, 2025 | February 29, 2024 | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| Interest and other expense, net | $40.5 | $45.8 | $(5.3) |
| Foreign exchange loss, net | 4.6 | 2.0 | 2.6 |
|  | $45.1 | $47.8 | $(2.7) |

The $2.7 million decrease in Interest and foreign exchange expense for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 was attributed to a higher interest income during the six months ended February 28, 2025. This was partially offset by a $2.6 million increase in foreign exchange loss primarily due to the change in the Brazilian Real's and Mexican Peso's foreign exchange rate relative to the U.S. Dollar.

### Income Tax

For the six months ended February 28, 2025, we had Income tax expense of $53.4 million on pre-tax income of $150.3 million for an effective tax rate of 35.5%. The effective tax rate was impacted by net unfavorable discrete items related to our foreign subsidiaries.

For the six months ended February 29, 2024, we had Income tax expense of $19.3 million on pre-tax income of $80.6 million for an effective tax rate of 23.9%. The effective tax rate benefited from net favorable discrete items related to our foreign subsidiaries.

The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to 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.

During the six months ended February 28, 2025, we became subject to minimum tax legislation in Europe modeled after the Organization for Economic Co-operation and Development (OECD) Global Anti-Base Erosion Model Rules (Pillar Two). At this time, we do not expect Pillar Two to have a material impact on our Consolidated Financial Statements and will continue to monitor our potential exposure as the U.S., Mexico and Brazil work to enact similar legislation that aligns with the OECD framework.

### Earnings From Unconsolidated Affiliates

Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis.

Earnings from unconsolidated affiliates were $8.4 million and $5.5 million for the six months ended February 28, 2025 and February 29, 2024, respectively. The increase was primarily related to $2.1 million in higher earnings at our Brazil operations for the six months ended February 28, 2025.

### Noncontrolling Interest

Net loss attributable to noncontrolling interest was $1.9 million for the six months ended February 28, 2025 compared to Net earnings attributable to noncontrolling interest of $2.2 million for the six months ended February 29, 2024. Net (earnings) loss attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.

### Liquidity and Capital Resources

*(in millions)*

|  | Six Months Ended February 28, 2025 | February 29, 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $28.5 | $54.4 |
| Net cash used in investing activities | (65.0) | (163.1) |
| Net cash provided by (used in) financing activities | (31.7) | 79.7 |
| Effect of exchange rate changes | 1.5 | (1.7) |
| Decrease in Cash and cash equivalents and Restricted cash | $(66.7) | $(30.7) |

We continue to be financed through cash generated from operations and borrowings. At February 28, 2025 Cash and cash equivalents and Restricted cash were $301.9 million, a decrease of $66.7 million from $368.6 million at August 31, 2024.

#### Cash Flows From Operating Activities

The $25.9 million decrease in Net cash provided by operating activities for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 was primarily due to a $139.7 million change in Leased railcars for syndication due to timing of syndication activity. This was partially offset by a $48.9 million change in Deferred income taxes, a $38.5 million increase in Net earnings and a $22.0 million net change in working capital accounts, primarily Inventories, Deferred revenue, and Accounts payable and accrued liabilities.

#### Cash Flows From Investing Activities

Net cash used in investing activities primarily related to capital expenditures net of Proceeds from the sale of assets. The $98.1 million decrease in cash used in investing activities for the six months ended February 28, 2025 was primarily attributable to a $64.1 million decrease in Capital expenditures and a $29.7 million increase in proceeds from the sale of assets compared to the six months ended February 29, 2024.

*(in millions)*

| Capital expenditures: | Six Months Ended February 28, 2025 | February 29, 2024 |
| --- | ---: | ---: |
| Leasing & Fleet Management | $(38.5) | $(132.3) |
| Manufacturing | (87.9) | (58.2) |
| Total capital expenditures (gross) | $(126.4) | $(190.5) |
| Proceeds from sales of assets | 55.6 | 25.9 |
| Total capital expenditures (net of proceeds) | $(70.8) | $(164.6) |

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 & 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 $60 million for 2025.

Gross capital expenditures for 2025 are expected to be approximately $300 million for Leasing & Fleet Management and approximately $120 million for Manufacturing. Capital expenditures for 2025 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.

#### Cash Flows From Financing Activities

The $111.4 million change in Net cash provided by (used in) financing activities for the six months ended February 28, 2025 compared to the six months ended February 29, 2024 was primarily attributed to $131.6 million in lower proceeds from the issuance of notes payable, net of repayments. This was partially offset by a $19.7 million increase in net proceeds from revolving notes.

During the six months ended February 29, 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 drew $65.1 million on the GBX Leasing warehouse facility to grow the fleet.

#### Dividend & Share Repurchase Program

A quarterly dividend of $0.32 per share was declared on April 1, 2025.

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. 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. The timing and amount of purchases is based upon market conditions, securities law limitations and other factors. The program may be modified, suspended, or discontinued at any time without prior notice. The share repurchase program does not obligate us to acquire any specific number of shares in any period.

During the six months ended February 28, 2025, there were no shares repurchased. During the six months ended February 29, 2024, we repurchased a total of 38 thousand shares for $1.3 million. As of February 28, 2025, the amount remaining for repurchase under the share repurchase program was $100.0 million.

#### Cash, Borrowing Availability and Credit Facilities

As of February 28, 2025, we had $263.5 million in Cash and cash equivalents and $488.0 million in available borrowings. The available balance to draw under committed credit facilities includes $366.0 million on the North American credit facility, $26.0 million on the European credit facilities and $96.0 million on the Mexican credit facilities.

Senior secured credit facilities aggregated to $1.3 billion as of February 28, 2025 which consisted of the following components:

#### Nonrecourse credit facilities

*GBX Leasing –* As of February 28, 2025, a $450.0 million nonrecourse warehouse credit facility existed to support the operations of GBX Leasing. Advances under this facility bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.70%. Interest rate swap agreements cover approximately 88% 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.

#### Other credit facilities

*North America –* As of February 28, 2025, a $600.0 million revolving line of credit, maturing August 2026, secured by substantially all our U.S. assets not otherwise pledged as security for term loans or the warehouse credit facility, existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations. Advances under this North American credit facility 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. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios.

*Europe –* As of February 28, 2025, lines of credit totaling $75.0 million secured by certain of our European assets, with variable rates that range from WIBOR plus 1.10% to WIBOR plus 1.40% and EURIBOR plus 1.90%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $31.2 million which is guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2025 through September 2026.

*Mexico –* As of February 28, 2025, our Mexican railcar manufacturing operations had lines of credit totaling $166.0 million for working capital needs, $66.0 million of which we and our joint venture partner have each guaranteed 50%.

Advances under these facilities bear interest at variable rates that range from SOFR plus 2.22% to SOFR plus 4.25%. Currently, the Mexican credit facilities have maturities that range from June 2026 through March 2027.

Credit facility balances:

*(in millions)*

| Nonrecourse credit facility balances | February 28, 2025 | August 31, 2024 |
| --- | ---: | ---: |
| GBX Leasing | $233.0 | $194.9 |
| Other credit facility balances |  |  |
| North America | 20.0 | — |
| Europe | 49.0 | 46.7 |
| Mexico | 70.0 | 110.0 |
| Total Revolving notes | $372.0 | $351.6 |

Outstanding commitments under the North American credit facility included letters of credit which totaled $6.6 million and $5.9 million as of February 28, 2025 and August 31, 2024, respectively.

#### Other Information

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; pay dividends or repurchase stock; enter into financing leases; create liens; sell assets; 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 our 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 plus rent) coverage. As of February 28, 2025, we were in compliance with all such restrictive covenants.

From time to time, we may seek to repurchase or otherwise retire or exchange securities, including outstanding convertible notes, borrowings and equity securities, and take other steps to reduce our debt, extend the maturities of our debt or otherwise improve our balance sheet. These actions may include open market repurchases, unsolicited or solicited privately negotiated transactions or other retirements, repurchases or exchanges. Such retirements, repurchases or exchanges of one note or security for another note or security (now or hereafter existing), if any, will depend on a number of factors, including, but not limited to, prevailing market conditions, trading levels of our debt, our liquidity requirements and contractual restrictions, if applicable. The amounts involved in any such transactions may, individually or in the aggregate, be material and may involve all or a portion of a particular series of notes or other indebtedness which may reduce the float and impact the trading market of notes or other indebtedness which remain outstanding.

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, we enter into foreign exchange contracts with established financial institutions to protect the margin on a portion of foreign currency sales in firm backlog.

To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $701.9 million of variable rate debt to fixed rate debt as of February 28, 2025.

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

We expect existing funds and cash generated from operations, together with proceeds from financing activities including borrowings under existing credit facilities and long-term financings, to be sufficient to fund expected debt repayments, working capital needs, planned capital expenditures, additional investments in our unconsolidated affiliates and dividends during the next twelve months.

### Off-Balance Sheet Arrangements

We do not currently have off balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our Consolidated Financial Statements.

### Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. 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, revenue 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.

*Impairment of long-lived assets -* We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When such events or changes in circumstances occur, a recoverability test is performed based upon estimated undiscounted cash flows expected to be realized over the remaining useful life of the asset group. If the carrying amount of an asset group exceeds the estimated undiscounted future cash flows, an impairment would be measured as the difference between the fair value of the asset group and the carrying amount of the asset group.

An asset group is generally established by identifying the lowest level of cash flows generated by a group of assets that are largely independent of the cash flows of other assets. Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of asset groups, and the determination of the fair value of real and personal property. Estimates of future cash flows are by nature highly uncertain and contemplate factors that may change over time.

*Goodwill* - We evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amounts of our reporting units exceed their fair value. We test goodwill for impairment by either performing a qualitative or quantitative assessment. When we perform a qualitative assessment, we analyze macroeconomic and industry conditions, financial performance, and cost estimates associated with a particular reporting unit. This assessment requires subjectivity based on cumulative information available at the assessment date. If a qualitative assessment indicates it is more likely than not that the carrying value of a reporting unit exceeds its respective fair value, a quantitative assessment is performed.

When we perform a quantitative assessment, we exercise judgment to develop estimates of the fair values of our reporting units based on a weighting of income and market approaches. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates. Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.

We make certain estimates and assumptions to determine our reporting units and whether the fair value of each reporting unit is greater than its respective carrying value. The above highlighted judgments contemplated estimates and effects of macroeconomic trends that are inherently uncertain. Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ.

*Income taxes* - The asset and liability method is used to account for income taxes. We are required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets and assess deferred tax liabilities based on enacted law and tax rates for each tax jurisdiction to determine the amount of deferred tax assets and liabilities. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. We recognize a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not the position will be sustained upon examination by relevant tax authorities.

Our annual tax rate is based on our income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Judgment is required in determining our tax expense and in evaluating our tax positions, as tax laws are complex and subject to different interpretations by taxpayers and government taxing authorities. 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). We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available.

*Environmental costs* - At times we may be involved in various proceedings related to environmental matters. We estimate future costs for known environmental remediation requirements and accrue for them when it is probable that we have incurred a liability and the related costs can be reasonably estimated based on currently available information. Adjustments to these liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or when expenditures for which reserves are established are made.

Judgments used in determining if a liability is estimable are subjective and based on known facts and our historic experience. If further developments in or resolution of an environmental matter result in facts and circumstances that differ from those assumptions used to develop these reserves, the accrual for environmental remediation could be materially misstated. Due to the uncertain nature of environmental matters, there can be no assurance that we will not become involved in future litigation or other proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to us. For further information regarding our environmental costs, see Note 14 - Commitments and Contingencies to the Condensed Consolidated Financial Statements.

## Market risk

As filed, 2,062 characters.

### Foreign Currency Exchange Risk

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 exchange contracts to protect revenue or margin on a portion of forecasted foreign currency sales and expenses. At February 28, 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 $166.3 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 that a movement in a single foreign currency exchange rate would have on future operating results.

In addition to exposure to transaction gains or losses, we are also exposed to foreign currency exchange risk related to the net asset position of our foreign subsidiaries. At February 28, 2025, net assets of foreign subsidiaries aggregated to $159.1 million and a 10% strengthening of the U.S. Dollar relative to the foreign currencies would result in a decrease in equity of $15.9 million, or 1.1% of Total equity - Greenbrier. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. Dollar.

#### Interest Rate Risk

**We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $701.9 million of variable rate debt to fixed rate debt. Notwithstanding these interest rate swap agreements, we are still exposed to interest rate risk relating to our revolving debt and a portion of term debt, which are at variable rates. At February 28, 2025, 87% of our outstanding debt had fixed rates and 13% had variable rates. At February 28, 2025, a uniform increase by 10% in variable interest rates would result in approximately $0.9 million of additional annual interest expense.**

## Controls and procedures

As filed, 1,248 characters.

#### Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

#### Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended February 28, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 285 characters.

This Form 10-Q should be read in conjunction with Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2024. There have been no material changes in the risk factors described in our Annual Report on Form 10-K for the year ended August 31, 2024.

Filed Apr 8, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-052054. Last ingested by Listed: Oct 29, 2026, 18:28 ET. No prices; not investment advice.