Financial Data and Key Metrics Changes - Total capital expenditures for the quarter were $190 million, with year-to-date investments reaching $491 million, aligning with the full-year guidance of $650 to $680 million [5][16] - Average realized price for natural gas was $3.59 per unit, a $0.20 premium over the NYMEX average of $3.39 [16][17] - Year-to-date share repurchases totaled $177 million, with dividends paid amounting to nearly $65 million, and net debt reduced by $175 million since year-end [17][19] Business Line Data and Key Metrics Changes - Production for the quarter was 2.2 Bcfe per day, with expectations to increase to approximately 2.3 Bcfe per day in Q4 and 2.6 Bcfe per day by 2027, representing a 20% increase from current levels [6][8] - The company completed just over 1,000 frac stages during the quarter, achieving completion efficiencies of nearly 10 frac stages per day [9][10] - Cash operating expenses were reported at $0.11 per Mcfe, consistent with previous guidance [9] Market Data and Key Metrics Changes - The U.S. exported record volumes of LNG in Q3, with new LNG projects reaching FID, contributing to a total of approximately 9 Bcf per day of incremental feed gas demand [10][11] - The demand for NGLs, particularly ethane and propane, is expected to see substantial increases in export capacity, with strong international demand anticipated [13][14] Company Strategy and Development Direction - The company plans to maintain a low reinvestment rate while generating significant free cash flow, allowing for capital returns to shareholders [8][15] - Range Resources aims to leverage its high-quality inventory and operational efficiencies to meet increasing demand in the Midwest, Gulf Coast, and global LNG markets [7][12] - The company is focused on expanding infrastructure from Appalachia to support long-term energy needs [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate significant free cash flow through cycles, supported by a strong balance sheet and operational efficiencies [19][20] - The management highlighted the importance of infrastructure utilization and operational efficiencies as key drivers for future performance [38][39] Other Important Information - The company is actively engaged in discussions for long-term supply agreements, focusing on both in-state and potential out-of-state opportunities [50][51] - The management noted that the current credit rating has not hindered discussions with customers regarding long-term agreements [75][81] Q&A Session Summary Question: Can you provide insights on the work in progress inventory and its expected status by the end of 2026? - Management indicated that the capital allocation for 2026 will focus more on completing the DUC inventory, with a linear utilization trend expected [26][29] Question: What are the expectations for operational efficiencies and capital expenditures in 2026? - Management expects to maintain low cash operating expenses and continue improving efficiencies through returning to pad sites and utilizing existing infrastructure [32][33] Question: What is the outlook for NGL demand and pricing? - Management expressed optimism regarding NGL demand growth, particularly for propane and ethane, driven by increasing export capacity and international demand [40][42] Question: What is the status of supply agreements and potential expansions outside Pennsylvania? - Management confirmed ongoing discussions with potential end users, focusing primarily on Pennsylvania but open to opportunities outside the state [50][53] Question: How does the company view curtailments and production modulation in response to pricing volatility? - Management stated that they have historically utilized curtailments when pricing warranted, but have focused on shaping production to align with market conditions [92][96]

Financial Data and Key Metrics Changes - Total capital expenditures for the quarter were $190 million, with year-to-date investments at $491 million, aligning with the full-year guidance of $650 million to $680 million [5][16] - Average realized price for natural gas was $3.59 per unit, a $0.20 premium over the NYMEX average of $3.39 [16][19] - Cash operating expenses for the third quarter were $0.11 per Mcfe, consistent with previous guidance [9][32] Business Line Data and Key Metrics Changes - Production for the quarter was 2.2 Bcfe per day, with expectations to increase to approximately 2.3 Bcfe equivalent per day in Q4 and 2.6 Bcfe equivalent per day by 2027 [6][7] - The company completed over 1,000 frac stages during the quarter, achieving nearly 10 frac stages per day across all operations [9][10] - The company operated two horizontal rigs, drilling approximately 262,000 lateral feet across 16 laterals [8] Market Data and Key Metrics Changes - The U.S. exported record volumes of LNG in Q3, with new projects contributing to a total of approximately 9 Bcf per day of incremental feed gas demand [10][11] - Demand for NGLs is expected to see substantial increases, with ethane and propane benefiting from strong international demand [13][14] - The company noted a strong seasonal natural gas price differential of -$0.49 per Mcf versus the NYMEX index [14] Company Strategy and Development Direction - The company plans to maintain a flat annual capital expenditure over the next two years while adding 400 million ft³ equivalent per day of growth [8] - The focus remains on operational efficiencies, including returning to pad sites and utilizing existing infrastructure [10][32] - The company aims to play a key role in supplying U.S. markets with affordable, reliable natural gas, leveraging its high-quality inventory and financial strength [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for U.S. natural gas, driven by rising incomes and population growth [11][12] - The company anticipates a tightening gas marketing fundamental as additional LNG export capacity comes online [13] - Management highlighted the importance of infrastructure expansion in Appalachia to meet long-term energy needs [13][19] Other Important Information - Year-to-date, the company has repurchased $177 million in shares and paid nearly $65 million in dividends [17] - The company has reduced net debt by $175 million since year-end [17] - Management emphasized the resilience of free cash flow generation, enabling capital allocation options for growth and returns to shareholders [19] Q&A Session Summary Question: Can you provide insights on the work-in-progress inventory and expectations for 2026? - Management indicated that capital allocation in 2026 will focus more on completing the DUC inventory, with a linear utilization trend expected [26][29] Question: What are the expectations for operating expenses as inventory is drawn down? - Management expects cash operating expenses to remain low, with potential for slight improvements due to operational efficiencies [32][33] Question: What is the outlook for NGL demand and pricing? - Management expressed optimism for NGL demand growth, particularly for propane and ethane, supported by new export capacity and international demand [40][46] Question: What is the status of supply agreements and potential expansions? - Management noted ongoing discussions for supply agreements, primarily focused within Pennsylvania, with potential for expansion outside the state [50][53] Question: How does the company view curtailments and production modulation? - Management has utilized curtailments in the past when pricing warranted, but currently focuses on shaping production to align with market fundamentals [92][95]

Financial Data and Key Metrics Changes - Total capital expenditures for the quarter were $190 million, with year-to-date investments reaching $491 million, aligning with the revised full-year guidance of $650 to $680 million [3][12] - Average realized price for natural gas was $3.59 per unit, a $0.20 premium over the NYMEX average of $3.39 [12][13] - Cash operating expenses for the third quarter were $0.11 per Mcfe, consistent with previous guidance [6][23] Business Line Data and Key Metrics Changes - Production for the quarter was 2.2 Bcfe per day, with expectations to increase to approximately 2.3 Bcfe per day in Q4 and 2.6 Bcfe per day by 2027, representing a 20% increase from current levels [4][5] - The company completed over 1,000 frac stages during the third quarter, achieving completion efficiencies of nearly 10 frac stages per day [6][7] Market Data and Key Metrics Changes - The U.S. exported record volumes of LNG in Q3, with new LNG projects reaching FID, contributing to a total of approximately 9 Bcf per day of incremental feed gas demand [8][9] - Demand for NGLs is expected to see substantial increases, with strong international demand supporting improved pricing [10][11] Company Strategy and Development Direction - The company plans to maintain a flat annual capital expenditure while adding 400 million cubic feet equivalent per day of growth over the next two years, focusing on efficient capital returns to shareholders [5][12] - Range Resources aims to leverage its high-quality inventory and strong financial position to meet increasing demand in the Midwest, Gulf Coast, and global LNG markets [4][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate significant free cash flow and deliver value to shareholders, citing a strong operational performance and a favorable market environment for natural gas and NGLs [12][16] - The company anticipates a tightening of gas marketing fundamentals as additional LNG export capacity comes online in 2026 [10][16] Other Important Information - The company has repurchased $177 million in shares and paid nearly $65 million in dividends year-to-date, while reducing net debt by $175 million [13][14] - Management highlighted the importance of infrastructure expansion in Appalachia to support long-term energy needs [10][12] Q&A Session Summary Question: Can you provide insights on the work in progress inventory and its outlook for 2026? - Management indicated that capital allocation for 2026 will focus more on completing the DUC inventory, with expectations for a linear utilization trend over the year [18][20] Question: What are the opportunities for upside in 2026 and 2027? - Management noted potential efficiencies in operations and infrastructure utilization as key areas for upside performance [25][26] Question: How do you view the NGL market for 2026? - Management expressed optimism regarding demand growth for NGLs, with significant export capacity expansions expected [27][30] Question: What is the status of supply agreements and potential expansions? - Management confirmed ongoing discussions with potential end users, focusing on long-term reliable supply agreements [34][35] Question: What is needed for the credit agencies to upgrade the company to investment grade? - Management stated that the company is checking all boxes for an upgrade, with growth plans and asset quality supporting this potential [59][60]

Financial Data and Key Metrics Changes - In Q3 2025, adjusted EPS increased by 50% and adjusted EBITDA rose by more than 46% compared to Q3 2024 [5][20] - The quarterly dividend per share was up 20% year-over-year, with a robust dividend coverage of 3.7x [6][23] - Net income for Q3 2025 was reported at $71 million, with adjusted net income at $73 million, equating to $0.42 per share [20] Business Segment Data and Key Metrics Changes - Contract operations revenue reached $326 million in Q3 2025, up 2% sequentially, driven by growth in horsepower and pricing [21] - Aftermarket services segment revenue was $56 million, down from $65 million in Q2 2025 but up 20% from $47 million in the same period last year [22] - Adjusted gross margin percentage for contract operations was 70.4%, slightly up from the previous quarter, while the overall adjusted gross margin percentage was reported at 73% [15][20] Market Data and Key Metrics Changes - The U.S. natural gas infrastructure buildout continues to support robust performance, with expectations for continued growth into 2026 and beyond [5] - Natural gas production growth in the U.S. is expected to be in the low single digits, with significant demand pressures anticipated from LNG exports and AI-driven power generation [9][10] Company Strategy and Development Direction - The company aims to leverage its strong operational execution and customer service to drive growth, focusing on innovative technology and returns-based capital allocation [7] - A growth CapEx of not less than $250 million is expected for 2026, consistent with annual investment levels since 2023, to support infrastructure buildout [16][25] - The company plans to maintain a target leverage ratio of between 3x-3.5x while continuing to return capital to shareholders through dividends and share repurchases [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the structural growth in natural gas production and compression, highlighting a strong outlook for earnings and free cash flow generation [18] - The current environment is characterized by commodity price volatility, but natural gas production is expected to outpace oil production, supporting long-term growth [8][9] - Management noted that the compression industry is entering a durable upturn driven by natural gas demand growth and capital discipline across the energy sector [8] Other Important Information - The company repurchased approximately 1.1 million shares for about $25 million in Q3 2025, with an additional $100 million authorized for share repurchases [23][24] - The company reported a $9.9 million cash tax credit that contributed to the increase in gross margin [15][20] Q&A Session Summary Question: Thoughts on capital allocation given strong free cash flow - Management emphasized that the best use of capital remains investing in business growth, with plans to continue growing dividends and share repurchases while also considering M&A opportunities [29][30] Question: Insights on margin sustainability and drivers - Management highlighted that margins are driven by pricing prerogatives and excellent cost management, with technology investments improving operational efficiency [32][34] Question: Demand trends and customer discussions - Management noted robust demand for LNG and data centers, with increased discussions with customers translating into a positive multi-year growth outlook [38][40] Question: Lead times and customer behavior in a lower crude environment - Lead times for engines are currently at 60 weeks, with no major shifts in customer behavior observed, maintaining high levels of utilization across the industry [50][52] Question: Recontracting discussions and pricing mechanisms - Management indicated that a significant portion of contracts includes pricing mechanisms for repricing, allowing for continued pricing power in a high-utilization environment [56][57] Question: Update on new venture investments and market acceptance - Management provided updates on the Mach 4 natural gas liquid recovery project, noting successful pilot results and strong customer enthusiasm for the product [81][84]

Financial Data and Key Metrics Changes - The company reported GAAP net income of $1.2 billion and earnings per share (EPS) of $6.98 for Q3 2025, driven by strong gains on sale and insurance recoveries [4][18] - Adjusted net income was $865 million, with a record adjusted EPS of $4.97, leading to an increase in full-year EPS guidance to $13.7 [4][22] - The company generated significant excess capital, resulting in a leverage ratio of 2.1 to 1 and a strong liquidity position with total sources of liquidity at approximately $22 billion [21][23] Business Line Data and Key Metrics Changes - The aircraft leasing business saw utilization rates exceeding 99%, with a healthy extension rate of approximately 85% for used aircraft transactions [4][5] - The company sold 32 owned assets for total sales revenue of $1.5 billion, resulting in a gain on sale of $332 million and an unlevered gain on sale margin of 28% [19][20] - The engine business continues to deepen relationships with OEMs and airlines, highlighted by a seven-year agreement with GE Aerospace for lease pool management [7][8] Market Data and Key Metrics Changes - Strong demand for both widebody and narrowbody aircraft is expected to continue, with widebody aircraft remaining in high demand due to production delays from OEMs [5][6] - The company is taking back 27 aircraft from Spirit Airlines, which will incur downtime and engine shop visit costs, impacting fourth-quarter guidance [6][60] Company Strategy and Development Direction - The company emphasizes disciplined capital deployment, focusing on accretive opportunities and maintaining a strong balance sheet [12][99] - AerCap has negotiated over 200 aircraft acquisitions since 2021 without placing direct OEM orders, indicating a strategic approach to asset procurement [7][79] - The company remains committed to shareholder returns, having returned $6.4 billion to shareholders since 2021 [79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the aircraft leasing market, citing strong demand driven by the need for new technology aircraft and the retirement of older models [25][26] - The outlook remains positive, with expectations of continued strong performance in the aircraft leasing and sales environment [22][23] - Management noted that geopolitical and economic uncertainties are not expected to significantly alter long-term fleet plans for airlines [108] Other Important Information - The company reported net recoveries related to the Ukraine conflict totaling approximately $2.9 billion since 2023, contributing positively to financial results [18] - The company has a portfolio of 1,200 spare engines, with 90% being the latest technology, which differentiates it from competitors [9] Q&A Session Summary Question: Thoughts on U.S. industry consolidation and opportunities - Management noted limited room for further consolidation in the U.S. market but sees strong demand for new technology aircraft and used aircraft globally [25][26] Question: Margin progression and future expectations - Management indicated that net spread increased to 8%, the highest since 2019, and expects it to remain stable in the coming quarters despite some offsetting effects from Spirit Airlines [27][28] Question: Comments on AerCap's bid for Air Lease - Management supports industry consolidation and emphasized the importance of maintaining discipline in M&A discussions to protect shareholder value [31][34] Question: Outlook for A220 aircraft market - Management expressed hope for improvements in engine durability for the A220, which could enhance its market position [86][90] Question: Capital allocation and future opportunities - Management highlighted the importance of pursuing accretive transactions and maintaining a focus on shareholder returns [97][99]

Financial Data and Key Metrics Changes - For the third quarter, net sales decreased by 3%, and in local currency, excluding the Kichler divestiture, sales decreased by 2% [8][14] - Operating profit was $312 million, with an operating profit margin of 16.3% [8][15] - Earnings per share for the quarter was $0.97 [8][15] - Gross margin was 34.6%, impacted by higher tariffs and commodity costs [14][15] - The company anticipates adjusted earnings per share for 2025 to be in the range of $3.90-$3.95, down from a previous expectation of $3.90-$4.10 [11][23] Business Line Data and Key Metrics Changes - Plumbing sales increased by 1% in local currency, driven by favorable pricing [8][15] - North American plumbing sales increased by 1%, with Delta Faucet showing strong performance, particularly in e-commerce and trade [8][15] - Decorative Architectural segment sales decreased by 12%, or 6% excluding the Kichler divestiture [9][10] - Total paint sales decreased in low single digits, with DIY paint sales down mid-single digits [10][17] - Operating profit for the plumbing segment was $204 million, with an operating margin of 16.4% [9][16] - Operating profit for the Decorative Architectural segment was $128 million, with an operating margin of 19.1% [9][10] Market Data and Key Metrics Changes - International plumbing sales were in line with the prior year in local currency, with growth in many European markets but challenges in China [9][16] - The U.S. and international repair and remodel markets are expected to decrease low single digits in 2025 [20][21] - The company expects its overall sales in 2025 to decrease low single digits, impacted by the Kichler divestiture [21][22] Company Strategy and Development Direction - The company aims to unlock opportunities through strong execution, strategic investments, and innovative product introductions [7][12] - Focus on maintaining agility in response to macroeconomic uncertainties and rising costs [11][12] - The company is committed to capital deployment, returning $188 million to shareholders through dividends and share repurchases [11][19] Management's Comments on Operating Environment and Future Outlook - Management noted that near-term market conditions remain a headwind, but the company continues to focus on execution to grow market share [8][12] - The structural factors for repair and remodel activity are strong, including the age of housing stock and high home equity levels [12][13] - Management expressed confidence in the company's ability to navigate dynamic environments and deliver long-term value for shareholders [13][14] Other Important Information - The company generated strong free cash flow during the quarter and maintained a solid balance sheet, with gross debt to EBITDA at 2x [11][18] - The total annualized cost impact of tariffs is estimated to be approximately $270 million, with ongoing efforts to mitigate these costs [20][21] Q&A Session Questions and Answers Question: How might a competitor's price increase influence the company's outlook for pricing? - Management indicated that they have a long-standing relationship with The Home Depot, which allows for price-cost neutrality over time, and they do not expect significant pricing increases in the coming year [25][27] Question: What is the long-term impact of tariffs on plumbing margins? - Management noted that they are actively working to mitigate tariff impacts through sourcing changes, cost reductions, and pricing strategies, aiming to offset the dollar cost of tariffs and restore margins over time [28][30] Question: What were the drivers behind the Q3 results? - Management identified three main drivers: tariffs, overall industry softness, and incremental costs related to commodity inputs and inventory reserves [34][35] Question: Can you elaborate on the builders' hardware business performance? - Management explained that the builders' hardware business faced softness in sales due to a planned shipping process change, but they do not expect a significant impact for the full year [37][39] Question: What is the expected impact of inventory reserves on plumbing? - Management stated that adjustments to inventory reserves were larger than typical this quarter due to the overall market environment and slow industry sales, impacting margins [101][102]

Financial Data and Key Metrics Changes - Greenbrier achieved record full-year diluted earnings per share and record core EBITDA, with an aggregate gross margin of nearly 19% and over $265 million in operating cash flow [4][16] - The company reported a return on invested capital of nearly 11%, within its long-term target range [4][17] - Fourth quarter revenue was nearly $760 million, with an operating income of $72 million, representing nearly 10% of revenue [16][17] - Core diluted earnings per share for the quarter was $1.26, and core EBITDA was $115 million, or 15% of revenue [17] Business Line Data and Key Metrics Changes - The leasing and fleet management business saw recurring revenue reach nearly $170 million, representing almost 50% growth from $113 million over two years [12][13] - The lease fleet grew by about 10% in fiscal 2025 to just over 17,000 units, with high fleet utilization at 98% [13] - New railcar orders in Q4 totaled approximately 2,400 units valued at over $300 million, bringing full-year orders to more than 13,000 units [10][11] Market Data and Key Metrics Changes - The backlog at the end of the year stood at 16,600 units valued at $2.2 billion, reflecting a healthy mix of product types and customers [11] - In North America, freight trends and tariff dynamics are moderating new railcar demand, leading many fleet owners to extend acquisition timelines [11] Company Strategy and Development Direction - Greenbrier is focused on operational excellence, innovation, and responsible growth, with a goal to double recurring revenues by fiscal 2028 [7][9] - The company is undergoing footprint rationalization in Europe, expecting annualized savings of $20 million from the closure of two additional facilities [7][20] - The integration of manufacturing and leasing is a defining feature of Greenbrier's model, providing stability and efficiency [8][14] Management's Comments on Operating Environment and Future Outlook - Management views the current market conditions as an opportunity to enhance production efficiency and reduce costs [10][11] - The company anticipates a stronger back half of fiscal 2026, driven by backlog orders and customer needs [41][50] - Management expressed confidence in the company's ability to generate cash flow and shareholder value for years to come [9][20] Other Important Information - Greenbrier's liquidity level was the highest in 10 quarters at over $800 million, consisting of more than $305 million in cash and almost $500 million in available borrowing capacity [17][18] - The board declared a dividend of $0.32 per share, marking the 46th consecutive quarterly dividend [18][19] Q&A Session Summary Question: Outlook on new railcar deliveries - Management indicated that they believe they are at the low point of the cycle and expect inquiries to increase, forecasting a production ramp-up in the back half of the year [24][25] Question: Impact of tariffs and cost inputs - Management stated that they are well-protected in their contracts regarding tariffs and can pivot if necessary [31] Question: Details on European facility closures - Management confirmed that they will be down to three facilities in Europe, maintaining the same production capacity [32][36] Question: First quarter outlook - Management is not inclined to provide quarterly guidance but expects stronger performance in the back half of the year [41][42] Question: Competitive landscape in new car builds - Management noted mixed pricing pressures, with more commoditized markets facing pricing pressure while specialty cars maintain discipline [63]

Financial Data and Key Metrics Changes - The company reported Q3 2025 revenue of $932 million, a decrease of $51 million or 5.2% compared to Q3 2024, primarily due to divestitures and product lifecycle management actions [23] - Adjusted operating income for Q3 was $180 million, with adjusted operating margins at 19.3%, up 30 basis points sequentially from Q2 2025 and up 10 basis points year-over-year [23][24] - Free cash flow generation was $136 million in Q3, an increase of approximately 49% year-over-year, representing a conversion rate of 105% of adjusted net income [25] Business Line Data and Key Metrics Changes - Performance Sensing revenue was $657 million, approximately flat year-over-year, with organic growth of 3.6% [27] - Sensing Solutions revenue was $275 million, also approximately flat year-over-year, with organic growth of 2.5% driven by new content in industrials and growth in aerospace [28] - Adjusted operating income for Performance Sensing was $156 million, or 23.7% of revenue, representing year-over-year margin expansion of 160 basis points [28] Market Data and Key Metrics Changes - The automotive business outgrew global vehicle production by approximately 1% in Q3, with double-digit growth in China [22] - The HVRR market has been soft, particularly in on-road trucks in North America, but the company has managed to expand margins despite this [31] - The aerospace business has shown reliable market growth in the low to mid-single-digit range, with strong order books expected to continue [31] Company Strategy and Development Direction - The company is focused on operational excellence, capital allocation, and returning to growth as part of its transformation journey [6][7] - A three-part framework for growth includes sticking to core product technologies, prioritizing platform-driven applications, and focusing on key markets with secular tailwinds [10] - The company has adjusted its growth strategy for the Dynapower business, focusing on grid stabilization and redundant power supply applications [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved core business and operational excellence, despite challenges such as tariffs and end-market volatility [7][8] - The company expects to continue outgrowing the market in China and is optimistic about future growth opportunities in aerospace and HVRR sectors [22][31] - Management acknowledged the need for caution in the fourth quarter due to recent idiosyncratic events affecting supply chains [34] Other Important Information - The company commenced cash tender offers to purchase $350 million of long-term debt as part of its capital allocation strategy [9][25] - A non-cash goodwill impairment charge of approximately $226 million was recorded in Q3 related to the Dynapower business due to changes in clean energy policy [29] Q&A Session Summary Question: Impact of tire burst detection wins on revenue in China - Management indicated that the design cycle in China is shorter, and while specific revenue values cannot be disclosed, they expect to return to outgrowth in China in Q3 and continue to outgrow the market moving forward [41][42] Question: Ability to outgrow the auto market in 2026 - Management confirmed that they expect to continue outgrowing the market in China and have a modest outgrowth in Q3, with further potential wins anticipated for 2026 [45][46] Question: Growth in HVAC business - Management confirmed that the growth in the HVAC segment is real, driven by new business wins in gas leak detection products [52] Question: Debt securities in the tender offer - Management stated that they are limited in what they can share about which notes they prefer to retire but do not expect a material impact on net interest in the fourth quarter [57][58] Question: Capital structure and future innovation - Management emphasized a focus on core business and improving cash generation, with plans to prioritize capital deployment to reduce leverage in the near term [62][63] Question: Growth potential in aerospace portfolio - Management highlighted steady growth in the aerospace sector, with strong customer backlogs and increased production rates expected to drive future growth [68][70] Question: Strategic positioning of Dynapower - Management noted that the focus for Dynapower is on high-energy requirements for grid stabilization, particularly in data centers [72] Question: Organic growth expectations - Management indicated that they expect organic growth to be in the 2%-4% range over the next 12-18 months, with a cautious outlook for the fourth quarter [75] Question: Long-term margin outlook - Management reaffirmed a margin floor of 19% and expressed confidence in defending that floor while also indicating potential for margin expansion as markets recover [81][82]

Financial Data and Key Metrics Changes - Greenbrier achieved record full-year diluted earnings per share and record core EBITDA, with an aggregate gross margin of nearly 19% and over $265 million in operating cash flow [4][16] - Operating income for Q4 was $72 million, representing nearly 10% of revenue, with core diluted earnings per share at $1.26 and core EBITDA at $115 million, or 15% of revenue [17] - The company generated nearly $98 million in operating cash flow for Q4, marking the highest liquidity level in 10 quarters at over $800 million [18] Business Line Data and Key Metrics Changes - The leasing and fleet management business saw recurring revenue reach nearly $170 million, representing almost 50% growth from $113 million two years ago [12] - The lease fleet grew by about 10% in Fiscal 2025 to just over 17,000 units, with high fleet utilization at 98% [13] Market Data and Key Metrics Changes - In Q4, Greenbrier received approximately 2,400 new railcar orders valued at over $300 million, bringing full-year orders to more than 13,000 units and closing the year with a backlog of 16,600 units valued at $2.2 billion [10][11] - The company noted that freight trends and tariff dynamics in North America are moderating new railcar demand, leading many fleet owners to extend acquisition timelines [11] Company Strategy and Development Direction - Greenbrier is focused on operational excellence, innovation, and responsible growth, with a goal to double recurring revenues by Fiscal 2028 [7][9] - The company is undergoing footprint rationalization in Europe, expecting annualized savings of $20 million while maintaining production capacity [7][32] - The integration of manufacturing and leasing is a key feature of Greenbrier's model, providing stability and efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management views the current market conditions as an opportunity to enhance production efficiency and cost reduction initiatives [10] - The company anticipates a stronger back half of Fiscal 2026, driven by backlog orders and customer needs [41] Other Important Information - Greenbrier's capital allocation framework remains focused and disciplined, with a commitment to returning capital to shareholders through dividends and stock buybacks [18][19] - The company declared a dividend of $0.32 per share, marking its 46th consecutive quarterly dividend [18] Q&A Session Summary Question: Outlook on new railcar deliveries - Management indicated that they believe they are at the low point of the cycle and expect inquiries to increase, forecasting a production ramp-up in the latter half of the year [24][25] Question: Impact of tariffs and cost inputs - Management stated that they are well-protected in their contracts regarding tariffs and have the ability to pivot if necessary [31] Question: Details on European facility closures - The company will be down to three facilities in Europe, maintaining the same production capacity while reducing overhead [32][36] Question: First quarter outlook - Management is not inclined to provide quarterly guidance but expects a stronger back half of the year compared to the first half [41] Question: Balance sheet and leasing business funding - Management confirmed a consistent strategy of adding about $300 million net each year to the lease fleet, with a robust secondary market for leasing [56]

Financial Data and Key Metrics Changes - The company reported revenue of $932 million for Q3 2025, a decrease of $51 million or 5.2% compared to $983 million in Q3 2024, primarily due to divestitures and product lifecycle management actions [22] - Adjusted operating income was $180 million with adjusted operating margins of 19.3%, up 30 basis points sequentially from Q2 2025 and up 10 basis points year over year [22] - Free cash flow generation was $136 million, an increase of approximately 49% year over year, representing a conversion rate of 105% of adjusted net income [24] Business Line Data and Key Metrics Changes - Performance Sensing revenue was $657 million, approximately flat year over year, with organic revenue increasing 3.6% [25] - Sensing Solutions revenue was $275 million, also approximately flat year over year, with organic revenue growth of 2.5% driven by new content in industrials and growth in aerospace [26] - Adjusted operating income for Performance Sensing was $156 million, or 23.7% of revenue, representing year-over-year margin expansion of 160 basis points [26] Market Data and Key Metrics Changes - The automotive business outgrew global vehicle production by approximately 1% in Q3 2025, with double-digit growth in China [20] - The HVRR market has been soft, particularly with on-road trucks in North America, but the company has managed to expand margins despite this [29] - The aerospace business has shown reliable growth in the low to mid-single-digit range, with strong order books expected to continue [30] Company Strategy and Development Direction - The company is focused on operational excellence, capital allocation, and returning to growth as part of its transformation journey [5][6] - A three-part framework for growth includes sticking to core product technologies, prioritizing platform-driven applications, and focusing on key markets with secular tailwinds [9] - The DynaPower business strategy has been adjusted to focus on grid stabilization and redundant power supply applications due to changes in clean energy policy [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made in operational excellence and margin resilience, despite challenges such as tariffs and end-market volatility [6] - The company anticipates continued outgrowth in China and is optimistic about the aerospace sector's growth potential due to increased defense spending [19] - Management acknowledged the need for caution in the fourth quarter due to potential supply disruptions and idiosyncratic events [32] Other Important Information - The company commenced cash tender offers to purchase $350 million of long-term debt as part of its capital allocation strategy [8] - A non-cash goodwill impairment charge of approximately $226 million was recorded in Q3 related to the DynaPower business [28] - The company announced new leadership appointments to strengthen its operations and growth strategies [12][14] Q&A Session Summary Question: Revenue impact from tire burst detection wins in China - Management indicated that the design cycle in China is shorter, and while specific revenue values cannot be disclosed, they expect to return to outgrowth in the low single-digit range above market [39][40] Question: Ability to outgrow the auto market in 2026 - Management confirmed that they expect to continue outgrowing the market in 2026, driven by recent wins and a strong performance in China [43][45] Question: Growth in HVAC business - Management confirmed that the growth in the HVAC segment is real, driven by new business wins in gas leak detection products [50][51] Question: Debt securities in the tender offer - Management stated that they are limited in what they can share about which notes they prefer to retire but do not expect a material impact on net interest in Q4 [53] Question: Strategic positioning of DynaPower - Management highlighted that the focus for DynaPower is on high-energy requirements for grid stabilization, particularly in data centers [66] Question: Longer-term margin outlook - Management reiterated a commitment to a margin floor of 19% and expressed confidence in their ability to defend this floor [70][72] Question: Free cash flow sustainability - Management attributed strong free cash flow conversion to lower capital expenditures and expressed confidence in maintaining a healthy conversion level [78] Question: End markets of higher importance for growth - Management identified aerospace and HVRR as key growth areas, while automotive is expected to show modest outgrowth [81]