Company Overview - Trinity is a railcar lessor supported by its rail manufacturing capabilities, primarily operating in the North American industrial economy [1] - The company has a substantial lease fleet of approximately 110,000 to 112,000 railcars, along with an additional 32,000 railcars through its Railcar Investment partners, totaling around 145,000 railcars [1][2] Market Position - Trinity holds a significant position in the market with a large scale of operations and is one of the larger railcar manufacturers serving North America [2] - The company has a growing services business that includes maintenance services for its lease fleet and other strategic customers, as well as logistics and transloading services [2]

Summary of Trinity Industries Conference Call Company Overview - Trinity Industries operates as a railcar lessor and manufacturer, primarily serving the North American industrial economy with a fleet of approximately 145,000 railcars, including 110,000-112,000 on its balance sheet and 32,000 through Railcar Investment Partners [4][5] Industry Dynamics - The railcar industry is currently facing uncertainty due to tariffs and international trade policies, which affect about one-third of rail traffic [7][8] - Inquiries for new railcars are steady, but conversion to actual orders is slow due to the prevailing uncertainty [8][9] - Replacement demand is a significant driver for new railcar orders, but the timing of these orders is unpredictable [28][29] Leasing Strategy - Leasing is attractive as over 55% of the North American railcar fleet is leased, primarily to industrial shippers [10][11] - The future lease rate differential (FLRD) has decreased from 18% to 9%, attributed to higher expiring lease rates and market moderation [12][14] - Despite the decrease, the company remains bullish on lease rates due to historical asset price inflation outpacing rental inflation [16][18] Financial Performance - Guidance for secondary market gains has been raised to $70-$80 million, up from $40-$50 million, indicating a strong market for railcar sales [21][22] - The average age of the fleet is 14 years, with significant embedded value due to asset inflation over the past 20 years [23][51] Manufacturing Insights - The company holds about 50% of the industry backlog, which is currently depressed due to delayed customer ordering decisions [27][28] - Margins in manufacturing are targeted at 5%-6% for the year, with long-term goals of 9%-11% as volumes recover [30][32] Capital Allocation Strategy - The company plans to invest $750 million-$1 billion in net fleet investment between 2024 and 2026, balancing growth with opportunistic secondary market activities [36][39] - A dividend increase was announced, marking the seventh consecutive year of increases, alongside share repurchases totaling approximately $60 million this year [39][40] Market Outlook - The North American railcar fleet has shrunk, with over 30,000 railcars scrapped this year, leading to a tighter supply environment that could benefit the company when demand recovers [19][20] - Potential consolidation among Class I railroads could improve service levels and modal share growth, positively impacting leasing and manufacturing businesses [44][46] Conclusion - The company is optimistic about future value creation from its lease fleet, which has significant embedded value and potential for rental inflation [51]

Company Overview - Greenbrier is a manufacturer of freight railcars serving the North American, European, and Brazilian markets with manufacturing facilities in each region [3] - The company has manufacturing plants located in Arkansas and Mexico for North America, three plants in Poland and Romania for Europe, and a facility in Brazil for the Brazilian market [3] Business Strategy - Greenbrier's strategy focuses on manufacturing excellence, which has resulted in strong margins during a period of moderate demand [3] - The company is also expanding its lease fleet of freight railcars specifically for the North American market [4]

Summary of The Greenbrier Companies Conference Call Company Overview - **Company**: The Greenbrier Companies (NYSE:GBX) - **Industry**: Railcar manufacturing and leasing - **Geographical Focus**: North America, Europe, Brazil - **Manufacturing Facilities**: Arkansas, Mexico, Poland, Romania, Brazil - **Business Strategy**: Focus on manufacturing excellence and growth of leasing fleet to generate recurring revenue [4][5][10] Key Points Business Model and Strategy - Greenbrier manufactures freight railcars and has a leasing fleet of 17,000 cars, aiming to double recurring revenue over five years [4][6] - The company emphasizes disciplined growth in its leasing fleet, targeting a composition similar to the broader North American fleet of 1.6 million railcars, excluding coal [6][10] - The leasing strategy is seen as a way to provide predictability and steady cash flow, which is favored by investors [5][13] Financial Performance - The company has invested approximately $300 million annually into its leasing fleet, translating to about 2,000 railcars per year [6][9] - Aggregate gross margins were reported at 19% for FY25, above the mid-teens target, with expectations of moderation in FY26 [15][22] - A $100 million share repurchase program was approved, with $78 million remaining for the current fiscal year [12] Market Dynamics - The company is experiencing increased costs due to tariffs on steel, which have raised the price of new railcars [30] - Demand for leasing is expected to rise as new car prices increase, making leasing a more attractive option for customers [32] - The backlog of orders is currently just under 17,000 cars, with a target of around 20,000 being considered normal [33][34] Regional Insights - **Brazil**: The government is promoting a shift from highway to rail transport, which is expected to drive demand for railcars. Greenbrier has gained market share due to improved efficiency in production [35][36] - **Europe**: The market has faced challenges due to economic and geopolitical uncertainties, but there are signs of recovery, particularly in military logistics [40][41] Operational Improvements - The company has implemented insourcing initiatives to reduce costs and improve efficiency, particularly in its North American operations [16][19] - Fixed costs have been reduced through footprint optimization, with a focus on maintaining production capacity while lowering overhead [21][22] Industry Trends - Specialty railcars, particularly tank cars, are performing well, while more commoditized cars face pressure [48] - The potential for rail mergers could lead to increased efficiency, which may impact the demand for railcars, but overall, it is expected to benefit the industry [52][54] Conclusion - Greenbrier is positioned for growth through its leasing strategy and operational efficiencies, with a focus on maintaining strong financial performance despite market challenges. The company remains optimistic about future demand, particularly in Brazil and specialty railcars [55]

Financial Data and Key Metrics Changes - Total revenues for the third quarter were $454 million, down both sequentially and year over year due to lower external deliveries in the Rail Products Group [13] - Earnings per share (EPS) for the quarter were $0.38, up sequentially due to favorable margin performance [13] - Full year EPS guidance has been raised to a range of $1.55 to $1.70, reflecting confidence in the business model and execution capabilities [5][18] Business Line Data and Key Metrics Changes - The railcar leasing and services segment saw revenue growth year over year, driven by higher fleet pricing and strong utilization of 96.8% [7] - Renewal rates were 25.1% above expiring rates with an 82% renewal success rate [7][30] - The Rail Products Group achieved a solid operating profit margin of 7.1% despite lower deliveries of 1,680 railcars [9][10] Market Data and Key Metrics Changes - The North American railcar fleet is contracting as scrapping is outpacing new railcar deliveries, with an expected 40,000 railcars to be scrapped this year [16] - Industry railcar orders were 3,071 in the quarter, well below expectations, indicating a challenging market environment [10] - The backlog stands at $1.8 billion, with approximately 21% expected to deliver by year-end [11] Company Strategy and Development Direction - The company is focused on leveraging its integrated platform of railcar leasing, manufacturing, and services to deliver value to shareholders and customers [11] - There is an emphasis on maintaining a well-utilized fleet and capitalizing on secondary market opportunities [8][12] - The company plans to continue prioritizing investment in its fleet for sustainable long-term returns [17] Management's Comments on Operating Environment and Future Outlook - Management noted that persistent market uncertainty has delayed customer decisions to invest in new railcars, but strong inquiries and discussions indicate potential for future growth [22] - The company expects industry deliveries in 2026 to be similar to 2025, reflecting ongoing market challenges [26] - Management remains confident in the ability to generate significant and consistent cash flows from the fleet [12] Other Important Information - Year-to-date cash flow from continuing operations was $187 million, with a net fleet investment of $387 million, exceeding full year guidance [14] - The company has returned $134 million of capital to shareholders through dividends and share buybacks [14] Q&A Session Summary Question: Current railcar delivery and order environment - Management indicated that the current backlog includes a multi-year order with 50% of the industry backlog, and industry deliveries are projected to be below replacement level demand [22] Question: Delivery gap versus replacement level demand - Management noted that the gap is primarily driven by delays in placing orders rather than a lack of need, with expectations for a pickup once market certainty improves [25] Question: Impact of Class 1 rail consolidation on asset utilization - Management discussed the potential for increased fluidity and speed in rail networks, which could lead to industry growth and fleet growth [28] Question: FLRD drop and expectations - Management explained that the drop in FLRD was due to higher expiring rates and some moderation in market rates for certain railcar types, but remains optimistic about leasing revenue growth [30] Question: Repricing of the fleet - Approximately 65% of the fleet has been repriced, with expectations for continued growth in lease revenue [33] Question: Secondary market performance - Management expressed confidence in the strong secondary market, which has become a primary avenue for growth due to softness in the new car market [51] Question: ABS deal and credit investor appetite - Management reported strong demand for their ABS issuance, highlighting flexibility and positive reception from investors [56]

InvestorRelations@gbrx.com www.gbrx.com NYSE: GBX 4Q25 Earnings Slides & Supplemental Information Forward Looking Statements This presentation and the accompanying oral presentation contain forward-looking statements, including statements that are not purely statements of historical fact. The Greenbrier Companies, Inc. (the "Company," "we," "us" or "our") uses words, and variations of words, such as "backlog," "believe," "capacity," "commit," "continue," "drive," "estimate," "expect," "focus," "future," "gr ...

Core Viewpoint - Trinity Industries reported disappointing Q2 2025 results, with significant declines in both revenue and profit compared to the previous year, reflecting ongoing challenges in the railcar manufacturing sector [1][2]. Financial Performance - GAAP earnings per share (EPS) for Q2 2025 were $0.19, below the analyst estimate of $0.27, and down 71.6% from $0.67 in Q2 2024 [2]. - GAAP revenue was $506 million, missing the estimate of $583.53 million, and representing a 39.8% decline from $841.4 million in Q2 2024 [2]. - EBITDA decreased to $171.7 million, down 23.3% from $223.9 million in the same quarter last year [2]. Segment Performance - The Railcar Leasing and Services Group saw revenue increase by 7.5% year-over-year to $302.4 million, driven by higher lease rates and strong fleet utilization at 96.8% [5]. - Operating profit for the Leasing segment fell 7.3% year-over-year due to increased maintenance costs and lower gains from lease portfolio sales, with operating margin compressing to 39.2% from 45.5% [5]. - The Rail Products Group experienced a 53.7% revenue decline, with new car deliveries dropping 62% to 1,815 units from 4,755 a year prior [6]. Market Dynamics - Orders for new railcars remained stable at 2,310 units, but backlog value decreased by 27.0% to $2.0 billion as of June 30, 2025 [6]. - Management attributed the downturn in manufacturing to customer order delays linked to broader economic uncertainty and cyclical demand factors [7]. Cash Flow and Investments - Cash flow from continuing operations for the first half of 2025 was $141.9 million, down from $299.7 million in the same period of 2024 [9]. - The company invested $232.7 million into fleet additions in the first six months, significantly higher than the previous year, and returned $89.6 million to shareholders [9]. Future Outlook - Management maintained full-year EPS guidance of $1.40 to $1.60, anticipating industry-wide railcar deliveries between 28,000 and 33,000 units [10]. - The company expects net fleet investment of $250 million to $350 million and capital expenditures of $45 million to $55 million for operational needs, indicating a potential recovery in new order conversions [10].

Financial Data and Key Metrics Changes - Revenues for the second quarter were $506 million, with GAAP EPS of $0.19, consistent with expectations due to a slower delivery pace [13] - The effective tax rate for the quarter was 15.8%, benefiting from the purchase of $40 million in transferable tax credits [14] - Year-to-date cash flow from continuing operations reached $142 million, demonstrating strong cash generation potential [15] Business Line Data and Key Metrics Changes - The Railcar Leasing and Services segment saw revenues increase year-over-year, primarily due to higher lease rates, with a 21% increase in quarterly maintenance services revenue [8] - The future lease rate differential (FLRD) was 18.3%, with a renewal success rate of 89% and fleet utilization at 96.8% [9] - The Rail Products segment delivered 1,815 railcars, achieving a book-to-bill ratio above one for the first time in ten quarters, with an operating margin of 3% [10] Market Data and Key Metrics Changes - The industry is on pace for full-year deliveries in the range of 28,000 to 33,000 railcars, with a modest contraction in the overall fleet due to higher scrapping rates [7] - Inquiry levels remain healthy, translating into increased order activity, although at a slower rate than anticipated [6] Company Strategy and Development Direction - The company aims to capitalize on favorable conditions in the secondary market and anticipates increased quarterly deliveries benefiting revenues and margins [12] - Strategic initiatives include optimizing manufacturing operations and investing in automation to lower the business breakeven point [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving order volumes and the overall operating environment for the second half of the year [59] - The company remains confident in its ability to deliver strong performance despite macroeconomic uncertainties [20] Other Important Information - The company expects full-year severance expenses of $15 million, with anticipated savings of $50 million across the enterprise in 2025 [14] - The company is maintaining its full-year EPS guidance at a range of $1.40 to $1.60, indicating stronger performance in the second half of the year [19] Q&A Session Summary Question: Production plans for the second half and alignment with orders - Management indicated that the second quarter was the bottom of the cycle, expecting volume to increase in the second half, aligning with positive customer sentiment [25][26] Question: Tax management and cash tax savings from full expensing - Management discussed the benefits of recent tax legislation, which significantly reduces the tax burden and improves cash flow from operations [32] Question: Margins for the full year and delivery expectations - Management maintained that full-year guidance for margins should be in the 5% to 6% range, with expectations for improved volumes through the year [42] Question: Competitive environment and lease rates - The leasing market remains tight, with positive indicators for lease fleet performance, including a high renewal success rate [48] Question: Impact of higher steel prices and potential rail merger - Higher steel prices may limit customer demand in the short term, but increased scrapping rates could lead to future orders [52] - A potential rail merger could improve efficiencies and lead to better market share opportunities for the company [53]

Financial Data and Key Metrics Changes - Revenues for the second quarter were $506 million, with GAAP EPS of $0.19, consistent with expectations due to a slower delivery pace [14] - The effective tax rate for the quarter was 15.8%, benefiting from the purchase of $40 million in transferable tax credits [15] - Year-to-date cash flow from continuing operations reached $142 million, demonstrating strong cash generation potential [16] Business Segment Performance - The Railcar Leasing and Services segment saw increased revenues both sequentially and year-over-year, driven by higher lease rates and a 21% year-over-year increase in maintenance services revenue [8][9] - The Rail Products segment delivered 1,815 railcars, resulting in a segment operating margin of 3%, with a book-to-bill ratio above one for the first time in ten quarters [11][12] Market Data and Key Metrics Changes - The industry is on pace for full-year deliveries in the range of 28,000 to 33,000 railcars, with a modest contraction in the fleet due to lower year-to-date deliveries and scrapping [7][18] - Inquiry levels remain healthy, translating into increased order activity, although at a slower rate than initially anticipated [6] Company Strategy and Industry Competition - The company is focused on repricing its lease fleet and capitalizing on favorable conditions in the secondary market, with an expectation of increased quarterly deliveries benefiting revenues and margins [13][19] - The company maintains its full-year operating margin guidance for the Rail Products segment in the 5% to 6% range, supported by stronger deliveries in the latter part of the year [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving order volumes and the overall operating environment, despite challenges in the delivery landscape [59] - The company anticipates that clarity on recent tax legislation and trade developments will positively impact business decisions and demand [33] Other Important Information - The company expects to realize about $50 million in savings across the enterprise in 2025 due to workforce reductions and lower incentive-based compensation [15] - The company is maintaining its full-year EPS guidance at a range of $1.40 to $1.60, indicating stronger performance in the second half of the year [19] Q&A Session Summary Question: Production plans for the second half and alignment with orders - Management indicated that the second quarter was the bottom of the cycle, expecting volume to increase in the second half, aligning with positive customer sentiment [24] Question: Stability of margins and deliveries in the next two quarters - Management expects improvements in both margins and deliveries through the year [26][27] Question: Tax management and cash tax savings from full expensing deduction - Management explained that the new tax bill significantly reduces the tax burden and improves cash flow from operations, aiding investment decisions [32] Question: Delivery picture in the back half relative to total industry delivery guidance - Management confirmed expectations of maintaining normal market share and improving business through the year [47] Question: Current competitive environment and lease rates - Management noted that the leasing market remains tight, with positive metrics for the lease fleet and expectations for continued strength [50] Question: Impact of higher steel prices on customer demand - Management acknowledged that higher steel prices could limit demand but also lead to increased scrapping, which may eventually necessitate new orders [53] Question: Potential impact of a transcontinental rail merger - Management suggested that the merger could improve efficiencies and lead to better market share, benefiting the company in the long term [55]

Financial Performance - Greenbrier's net earnings attributable reached $60 million, or $1.86 per diluted share, with revenue of $843 million[5] - The company achieved an aggregate gross margin of 18%[5] - Greenbrier's EBITDA was $129 million, representing 15% of revenue[5] - Operating cash flow was nearly $140 million[5] Orders and Backlog - New railcar orders totaled 3,900 units, valued at over $500 million[5] - Railcar deliveries amounted to 5,600 units[5] - The new railcar backlog stands at 18,900 units, with an estimated value of $2.5 billion[5] Capital Allocation and Liquidity - Greenbrier renewed and extended $850 million of bank facilities into 2030[5] - The company repurchased 507 thousand shares for nearly $22 million[5] - Available liquidity is approximately $770 million[6] Leasing and Fleet Management - Lease fleet utilization remained strong at 98%[5] - The company has a lease fleet of approximately 16,800 railcars[6, 11] - Recurring revenue grew by 45%[6] Operational Efficiency - Closure of one manufacturing facility in the European joint venture is expected to yield annual savings of at least $10 million[5]