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Press release from PR Newswire

Greenbrier Reports Fiscal Fourth Quarter Financial Results

Thursday, November 01, 2012

Greenbrier Reports Fiscal Fourth Quarter Financial Results06:00 EDT Thursday, November 01, 2012~ Posts EPS of $0.26; Backlog of 10,700 units valued at $1.20 billion ~~ Record fiscal year revenue and earningsLAKE OSWEGO, Ore., Nov. 1, 2012 /PRNewswire/ -- The Greenbrier Companies (NYSE: GBX) today reported results for its fiscal fourth quarter and fiscal year ended August 31, 2012.Fourth Quarter and Fiscal Year Highlights                                                                             Full year revenue reached $1.81 billion, a 45% increase over last year and a new record for the company. Record net earnings attributable to Greenbrier ("net earnings") for the year of $58.7 million was a nine-fold increase over prior year. Net earnings for the fourth quarter were $7.4 million, or $.26 per diluted share, on revenue of $443.5 million. New railcar deliveries for 2012 were a record 15,000 units, compared to 9,400 units in 2011, and 2,500 units in 2010. During the fourth quarter, the Company received orders for 2,900 new railcars. New railcar manufacturing backlog as of August 31, 2012 was 10,700 units with an estimated value of $1.20 billion (an average unit sale price of $112,000), compared to 11,500 units with an estimated value of $1.14 billion (an average unit sale price of $99,000) as of May 31, 2012.  Based on current production plans, approximately 7,300 units in August 31, 2012 backlog are scheduled for delivery in fiscal 2013.  The balance are scheduled for delivery in fiscal 2014. Marine backlog totaled $25 million as of August 31, 2012; additionally we were awarded a letter of intent for 15 barges valued at $60 million subject to significant permitting and other conditions. Operating cash flow was positive $116.1 million for 2012, compared to negative $34.3 million in 2011.William A. Furman, president and chief executive officer, said, "In fiscal 2012, our manufacturing operations responded well to strong demand for new railcars and our leasing operation significantly enhanced its syndication and management services model, leading to record revenue and earnings for the full year.  While we realized positive momentum during the year in both of these operations, our fourth quarter earnings were well below our expectations.  This was principally due to lower than anticipated new railcar deliveries, a high tax rate for the quarter, and certain employee related costs."  Mark Rittenbaum, chief financial officer, noted, "New railcar deliveries to two customers totaling 560 railcars, with an aggregate value of nearly $50 million that we expected to occur by year-end, were postponed due to delays in a lease syndication transaction and one customer's acceptance of certain railcars.  All of these deliveries occurred subsequent to quarter end.  Additionally, our actual tax rate for the quarter of 51% was significantly higher than our expected tax rate of around 34%.  This difference was primarily due to a change in our geographic mix of earnings.  Also, we incurred certain severance costs of nearly $1 million after-tax during the quarter. Finally, gain on disposition of equipment was only $.1 million pre-tax for the quarter, whereas the average gain for the prior three quarters was nearly $3 million per quarter."Furman concluded, "In fiscal 2013, we expect less business visibility than in fiscal 2012, as a result of global economic and geopolitical uncertainty.  We will focus on four key areas beyond basic execution of our operating plan.  First, we will expand capacity in higher margin railcar types, such as tank cars, to respond to market demand.  Second, we will continue to expand our product offerings in the businesses that are related to the oil, gas and chemical industries and in other high-growth areas.  Third, we will continue to improve our working capital position, increase free cash flow and pay down debt.  Lastly, we will continue to seek diversification and growth opportunities in the rail freight marketplace, especially in leasing."Financial SummaryQ4 FY12 Q3 FY12Sequential Comparison ? Main DriversRevenue$443.5M$507.8MDown, due to lower new railcar deliveries with a higher average sales priceGross margin12.3%12.2%Up 10 bps on operational efficiencies Selling andadministrative$27.6M$28.8MLower incentive compensation expense associated with lower earningsGain on dispositionof equipment$0.07M$2.6MTiming of sales fluctuates and is opportunisticAdjusted EBITDA$36.0 M$44.6MDown 19.3% due to lower revenueEffective tax rate51%30%Change in geographic mix of earningsNet earnings$7.4M$19.1MDown 61% on lower revenue and higher tax rateDiluted EPS ? GAAP$0.26$0.61"If converted" calculationEconomic EPS $0.27$0.69Excludes "if converted" impact of out-of-the-money bonds due 2018Segment SummaryQ4 FY12 Q3 FY12Sequential Comparison ? Main DriversManufacturing:    Revenue     Gross margin   Deliveries  $306.2M 11.8%3,500 $364.9M 10.8%4,500Down 16.1% due to lower deliveries with higher average sales priceUp 100 bps due to operational efficienciesDown due to timing of lease syndications and customer acceptance (560 cars) and change in mixWheel Services, Refurbishment & Parts   Revenue   Gross margin  $119.1M8.1%  $125.1M10.8%Down 4.8% due to lower wheel volumesDown 270 bps due to lower wheel volumes, sales mix and repair labor inefficienciesLeasing & Services:    Revenue   Gross margin   Lease Fleet Utilization $18.3M47.6%93.5% $17.7M50.2%95.5%Up 3.4% due to increased volume of leased carsDown 260 bps due to fewer railcars held for syndication resulting in less interim rentTiming of lease commencement on certain fleet additionsBusiness OutlookGiven global economic and geopolitical uncertainty, Greenbrier currently has less business visibility and more variability now than it had in fiscal 2012.  Based on current business trends and industry forecasts, management currently anticipates the Company's new railcar deliveries in 2013 to be between 11,500 ? 13,000 units.  Approximately 7,300 of these units are in firm backlog as of August 31, 2012, with the balance of deliveries expected to come from additional orders received during the year.  While the range of deliveries is below the 15,000 deliveries for fiscal 2012, the Company anticipates the product mix will include railcars with higher average selling prices.  Currently, management anticipates that at the upper end of the delivery guidance range, fiscal 2013 revenue, adjusted EBITDA and earnings per share will be similar to fiscal 2012, with the second half of the year being stronger than the first half of the year.  Conference Call Greenbrier will host a teleconference to discuss fourth quarter results.  In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows: November 1, 2012 8:00 a.m. Pacific Daylight Time Phone: 1-630-395-0143, Password: "Greenbrier"  Real-time Audio Access:  ("Newsroom" at http://www.gbrx.com)Please access the site 10 minutes prior to the start time.  Following the call, a webcast replay will be available for 30 days.  Telephone replay will be available through December 2, 2012 at 1-402-280-9982. About Greenbrier CompaniesGreenbrier, (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in its three manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 39 locations across North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 11,000 railcars, and performs management services for approximately 219,000 railcars."SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This release may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company's products and services, plans to increase manufacturing capacity, new railcar delivery volumes and schedules, growth in demand for the Company's railcar services and parts business, and the Company's future financial performance. Greenbrier uses words such as "anticipates," "believes,"  "forecast," "potential," "contemplates," "expects," "intends," "plans," "seeks," "estimates," "could," "would," "will," "may," "can," and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from in the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog is not indicative of our financial results; turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, changing technologies, production of new railcar types, or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; all as may be discussed in more detail under the headings "Risk Factors" and "Forward Looking Statements" in our Annual Report on Form 10-K for the fiscal year ended August 31, 2011, and our other reports on file with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as earnings attributable to Greenbrier before loss on extinguishment of debt, interest and foreign exchange, income tax expense, depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier. You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Adjusted EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies.Economic EPS is not a financial measure under GAAP.  Economic EPS is used to measure the current economic impact of our Convertible Bonds due in 2018 that have a conversion strike price of $38.05/share, which exceeds our current stock price. We define Economic EPS as net earnings attributable to Greenbrier divided by the sum of weighted average basic common shares outstanding, plus the dilutive effect of warrants.  This calculation excludes the dilutive effect of the shares underlying the 2018 bonds under the "if converted" method, which is included in the calculation of Diluted EPS.  You should not consider Economic EPS in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Economic EPS is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Economic EPS measure presented may differ from and may not be comparable to similarly titled measures used by other companies. THE GREENBRIER COMPANIES, INC.CONSOLIDATED BALANCE SHEETS(In thousands, unaudited)August 31, May 31,February 29, November 30, August 31, 20122012201220112011Assets   Cash and cash equivalents$      53,571$      44,915$      40,666$      20,855$     50,222   Restricted cash6,2776,0892,2492,1512,113   Accounts receivable, net  146,326172,086177,544149,559188,443   Inventories316,741346,122365,811354,045323,512   Leased railcars for syndication97,79866,77679,68168,02930,690   Equipment on operating leases, net362,968334,872322,811323,878321,141   Property, plant and equipment, net182,429172,729165,700159,671161,200   Goodwill137,066137,066137,066137,066137,066   Intangibles and other assets, net81,36884,69385,15584,18787,268$ 1,384,544$ 1,365,348$ 1,376,683$ 1,299,441$ 1,301,655Liabilities and Equity   Revolving notes$      60,755$      71,430$    101,446$      80,679$      90,339   Accounts payable and accrued liabilities329,508323,977340,328311,519316,536   Deferred income taxes95,36388,51489,62387,39583,839   Deferred revenue17,19417,8721,2305,7245,900   Notes payable428,079428,028428,454431,184429,140   Total equity Greenbrier431,777418,161399,788368,528361,573   Noncontrolling interest21,86817,36615,81414,41214,328   Total equity453,645435,527415,602382,940375,901$ 1,384,544$ 1,365,348$ 1,376,683$ 1,299,441$ 1,301,655 THE GREENBRIER COMPANIES, INC.CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts)Years Ended August 31,201220112010RevenueManufacturing$  1,253,964$     721,102$    295,566Wheel Services, Refurbishment & Parts481,865452,865388,434Leasing & Services71,88769,32372,2801,807,7161,243,290756,280Cost of revenueManufacturing1,122,384661,127268,395Wheel Services, Refurbishment & Parts433,541405,449344,522Leasing & Services37,37137,18341,3651,593,2961,103,759654,282Margin214,420139,531101,998Selling and administrative 104,59680,32669,931Gain on disposition of equipment(8,964)(8,369)(8,170)Special items--(11,870)Earnings from operations118,78867,57452,107Other costs   Interest and foreign exchange24,80936,99245,204   Loss (gain) on extinguishment of debt-15,657(2,070)Earnings before income tax and loss from   unconsolidated affiliates93,97914,9258,973Income tax benefit (expense)(32,393)(3,564)959Earnings before loss from unconsolidated affiliates61,58611,3619,932Loss from unconsolidated affiliates(416)(2,974)(1,601)Net earnings61,1708,3878,331Net earnings attributable to noncontrolling interest(2,462)(1,921)(4,054)Net earnings attributable to Greenbrier$      58,708$        6,466$        4,277Basic earnings per common share:$           2.21$           0.27$          0.23Diluted earnings per common share:$           1.91$           0.24$          0.21Weighted average common shares:Basic26,57224,10018,585Diluted33,71826,50120,213 THE GREENBRIER COMPANIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)Years Ended August 31,201220112010Cash flows from operating activities:    Net earnings $      61,170$        8,387$      8,331    Adjustments to reconcile net earnings to net cash      (used in) provided by operating activities:      Deferred income taxes11,6172,39915,052      Depreciation and amortization42,37138,29337,511      Gain on sales of leased equipment(8,964)(5,121)(6,543)      Accretion of debt discount3,2596,5838,149      Special items--(11,870)      Loss (gain) on extinguishment of debt (non-cash portion)-8,453(2,070)      Other13,6626,7624,237      Decrease (increase) in assets:          Accounts receivable37,763(96,552)22,430          Inventories3,709(116,866)(45,212)          Leased railcars for syndication(76,071)(20,839)759          Other-8,8636,455    Increase (decrease) in liabilities:          Accounts payable and accrued liabilities16,236130,67312,777          Deferred revenue11,304(5,287)(7,445)    Net cash (used in) provided by operating activities116,056(34,252)42,561Cash flows from investing activities:    Proceeds from sales of equipment33,56018,73022,978    Investment in and advances to unconsolidated affiliates(506)(2,330)(927)    Contract placement fee--(6,050)    Decrease (increase) in restricted cash(4,164412(1,442    Capital expenditures(117,885)(84,302)(38,989)    Other48(1,774260    Net cash used in investing activities(88,947)(69,264)(24,170)Cash flows from financing activities:    Net changes in revolving notes with maturities of 90 days or less(57,302)71,625(11,934)    Proceeds from revolving notes with maturities longer than 90 days63,77325,1595,698    Repayments of revolving notes with maturities longer than 90 days(33,934)(10,000)(5,698)    Proceeds from issuance of notes payable2,750231,2502,149    Debt issuance costs-(11,469)(109)    Repayments of notes payable(7,070)(311,360)(38,267)    Proceeds from equity offering-63,18056,250    Expenses from equity offering-(420)(3,542)    Excess tax benefit from restricted stock awards1,627--    Investment by joint venture partner1,362--    Other-2629    Net cash provided by (used in) financing activities(28,794)57,9914,576    Effect of exchange rate changes5,034(3,117)(290)Increase (decrease) in cash and cash equivalents3,349(48,642)22,677Cash and cash equivalentsBeginning of period50,22298,86476,187End of period$      53,571$      50,222$    98,864 THE GREENBRIER COMPANIES, INC.SUPPLEMENTAL INFORMATIONQuarterly Results of Operations (Unaudited)(In thousands, except per share amounts)Operating results by quarter for 2012 and 2011 are as follows:FirstSecondThirdFourthTotal2012Revenue   Manufacturing$   262,656$   320,206$   364,930$       306,172$   1,253,964   Wheel Services, Refurbishment & Parts117,749119,894125,145119,077481,865   Leasing & Services17,79418,08617,72218,28571,887398,199458,186507,797443,5341,807,716Cost of revenue   Manufacturing236,188290,851325,424269,9211,122,384   Wheel Services, Refurbishment & Parts105,891106,554111,610109,486433,541   Leasing & Services9,6639,2958,8259,58837,371351,742406,700445,859388,9951,593,296Margin46,45751,48661,93854,539214,420Selling and administrative 23,23524,97928,78427,598104,596Gain on disposition of equipment(3,658)(2,654)(2,585)(67)(8,964)Earnings from operations26,88029,16135,73927,008118,788Other costs   Interest and foreign exchange5,3836,6306,5606,23624,809Earnings before income tax and earnings   (loss) from unconsolidated affiliates21,49722,53129,17920,77293,979Income tax expense(7,797)(5,348)(8,655)(10,593)(32,393)Earnings (loss) from unconsolidated   affiliates(372)72201(317)(416)Net earnings13,32817,25520,7259,86261,170Net (earnings) loss attributable to    Noncontrolling interest1,189415(1,608)(2,458)(2,462)Net earnings attributable to Greenbrier$     14,517$     17,670$     19,117$           7,404$        58,708Basic earnings per common share: (1)$         0.57$         0.66$         0.71$             0.27$            2.21Diluted earnings per common share: (2)$         0.48$         0.57$         0.61$             0.26$            1.91(1)Quarterly amounts do not total to the year to date amount as each period is calculated discretely. (2)Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the outstanding warrants using the treasury stock method and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings. THE GREENBRIER COMPANIES, INC.SUPPLEMENTAL INFORMATIONQuarterly Results of Operations (Unaudited)(In thousands, except per share amounts)FirstSecondThirdFourthTotal2011Revenue   Manufacturing$     85,440$   156,621$   173,487$   305,554$   721,102   Wheel Services, Refurbishment & Parts95,268112,015126,317119,265452,865   Leasing & Services18,22615,70417,47617,91769,323198,934284,340317,280442,7361,243,290Cost of revenue   Manufacturing79,747147,552158,674275,154661,127   Wheel Services, Refurbishment & Parts86,411101,413111,202106,423405,449   Leasing & Services9,1208,7259,25410,08437,183175,278257,690279,130391,6611,103,759Margin23,65626,65038,15051,075139,531Selling and administrative 17,93817,69322,58022,11580,326Gain on disposition of equipment(2,510)(1,961)(1,678)(2,220)(8,369)Earnings from operations8,22810,91817,24831,18067,574Other costs   Interest and foreign exchange10,30410,5369,8076,34536,992   Loss on extinguishment of debt--10,0075,65015,657Earnings (loss) before income tax and   loss from unconsolidated affiliates(2,076)382(2,566)19,18514,925Income tax benefit (expense)611(100)301(4,376)(3,564)Loss from unconsolidated affiliates(587)(575)(539)(1,273)(2,974)Net earnings (loss)(2,052)(293)(2,804)13,5368,387Net earnings attributable to                  Noncontrolling interest(252)(257)(510)(902)(1,921)Net earnings (loss) attributable to Greenbrier$      (2,304)$        (550)$      (3,314)$     12,634$       6,466Basic earnings (loss) per common share: (1)$        (0.11)$       (0.02)$        (0.14)$         0.50$         0.27Diluted earnings (loss)  per common share: (2)$        (0.11)$       (0.02)$        (0.14)$         0.42$         0.24(1)Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Unvested restricted stock awards are excluded from the per share calculation for the first, second and third quarters due to a net loss in each of those periods.2010 includes income of $11.(2)Quarterly amounts do not total to the year to date amount as each period is calculated discretely. The dilutive effect of warrants is excluded from per share calculations for the first, second and third quarters due to net losses for those periods. The fourth quarter diluted earnings per common share includes the outstanding warrants using the treasury stock method and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.  THE GREENBRIER COMPANIES, INC.SUPPLEMENTAL INFORMATIONReconciliation of Net Earnings attributable to Greenbrier to Adjusted EBITDA (1)(In thousands, unaudited)Three Months EndedAugust 31,Year EndedAugust 31,2012201120122011Net earnings attributable to Greenbrier$       7,404$       12,634$      58,708$        6,466Loss on extinguishment of debt-5,650-15,657Interest and foreign exchange6,2366,34524,80936,992Income tax expense 10,5934,37632,3933,564Depreciation and amortization11,76810,11942,37138,293Adjusted EBITDA $     36,001$       39,124$     158,281$     100,972(1)Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as earnings attributable to Greenbrier before loss on extinguishment of debt, interest and foreign exchange, income tax expense, depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier. You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Adjusted EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies. Three Months Ended August 31, 2012Year Ended August 31, 2012Backlog Activity (units)Beginning backlog11,50015,400Orders received2,90011,200Production held as Leased railcars for syndication(300)(2,700)Production sold directly to third parties(3,400)(13,200)Ending backlog10,70010,700Delivery Information (units)Production sold directly to third parties3,40013,200Sales of Leased railcars for syndication 1001,800Total deliveries3,50015,000 THE GREENBRIER COMPANIES, INC.SUPPLEMENTAL INFORMATIONCalculation of Diluted Earnings Per Share(In thousands, except per share amounts, unaudited)The shares used in the computation of the Company's basic and diluted earnings per common share are reconciled as follows:Three Months EndedAugust 31,Year Ended August 31,2012201120122011Weighted average basic common shares outstanding (1)27,14825,17726,57224,100Dilutive effect of warrants7562,3401,1012,401Dilutive effect of convertible notes (2)6,0456,0456,045-Weighted average diluted common shares outstanding33,94933,56233,71826,501(1)Restricted stock grants are treated as outstanding when issued and are included in weighted average basic common shares outstanding when the Company is in a net earnings position. (2)In 2012 and for the three months ended August 31, 2011, the shares underlying the dilutive effect of the 2018 Convertible notes are included as they were considered dilutive under the "if converted" method. For the year ended August 31, 2011, the dilutive effect of the shares underlying the 2018 Convertible Notes was excluded from the share calculation as it was the less dilutive of two approaches described below. The dilutive effect of the 2026 Convertible notes was excluded from the share calculations as the stock price for each year presented was less than the initial conversion price of $48.05 and is therefore considered anti-dilutive.Diluted EPS was calculated using the more dilutive of two approaches. The first approach includes the dilutive effect of outstanding warrants and shares underlying the 2026 Convertible notes in the share count using the treasury stock method. The second approach supplements the first by including the "if converted" effect of the 2018 Convertible notes issued in March 2011. Under the "if converted method" debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by shares underlying the convertible notes. The 2026 Convertible notes would only be included in the calculation of both approaches if the current stock price is greater than the initial conversion price of $48.05 using the treasury stock method.Three Months EndedAugust 31,Year Ended August 31,2012201120122011Net earnings attributable to Greenbrier$       7,404$    12,634$    58,708$        6,466Add back:Interest and debt issuance costs on the    2018 Convertible notes, net of tax1,4161,3765,677n/aEarnings before interest and debt issuance        costs on convertible notes$       8,820$    14,010$    64,385n/aWeighted average diluted common shares outstanding33,94933,56233,71826,501Diluted earnings per share(1)$      0.26  $    0.42 $    1.91$      0.24(1)Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs on convertible notes or Net earnings attributable to GreenbrierWeighted average diluted common shares outstanding THE GREENBRIER COMPANIES, INC.SUPPLEMENTAL INFORMATIONReconciliation of Basic Earnings Per Share to Economic Earnings Per Share (1)(In thousands, except per share amounts, unaudited)The shares used in the computation of the Company's basic and economic earnings per common share are reconciled as follows:Three Months EndedYear EndedAugust 31,2012May 31,2012August 31,2012Weighted average basic common shares outstanding27,14826,98126,572Dilutive effect of warrants7568361,101Weighted average economic diluted common shares outstanding27,90427,81727,673Net earnings attributable to Greenbrier$         7,404$      19,117$      58,708Economic earnings per share$           0.27$          0.69$          2.12(1) Economic EPS is not a financial measure under GAAP.  Economic EPS is used to measure the current economic impact of our Convertible Bonds due in 2018 that have a conversion strike price of $38.05/share, which exceeds our current stock price. We define Economic EPS as net earnings attributable to Greenbrier divided by the sum of weighted average basic common shares outstanding, plus the dilutive effect of warrants.  This calculation excludes the dilutive effect of the shares underlying the 2018 bonds under the "if converted" method, which is included in the calculation of Diluted EPS.  You should not consider Economic EPS in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Economic EPS is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Economic EPS measure presented may differ from and may not be comparable to similarly titled measures used by other companies.  SOURCE The Greenbrier Companies, Inc. (GBX)For further information: Mark Rittenbaum, +1-503-684-7000