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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 for the quarterly period ended November 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 for
the transition period from ___ to ___
 Commission File No. 1-13146
 THE GREENBRIER COMPANIES, INC.
  Delaware
    
    93-0816972(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 One Centerpointe Drive, Suite 200, Lake Oswego, OR
    
    97035(Address of principal executive offices)
    
    (Zip Code)
 
 Autostack Company, LLC
    
    Oregon
    
    
    3743
    
    
    93-0981840Greenbrier-Concarril, LLC
    
    Oregon
    
    
    3743
    
    
    93-1262344Greenbrier Leasing Company, LLC
    
    Oregon
    
    
    3743
    
    
    31-0789836Greenbrier Leasing, L.P.
    
    Oregon
    
    
    3743
    
    
    91-1960693Greenbrier Leasing Limited Partner, LLC
    
    Oregon
    
    
    3743
    
    
    93-1266038Greenbrier Management Services, LLC
    
    Oregon
    
    
    3743
    
    
    93-1266040Greenbrier Railcar, LLC
    
    Oregon
    
    
    3743
    
    
    93-0971066Gunderson, LLC
    
    Oregon
    
    
    3743
    
    
    93-0180205Gunderson Marine, LLC
    
    Oregon
    
    
    3743
    
    
    93-1127982Gunderson Rail Services, LLC
    
    Oregon
    
    
    3743
    
    
    93-1123815Gunderson Specialty Products, LLC
    
    Oregon
    
    
    3743
    
    
    93-0180205
 The Greenbrier Companies,
    
    Autostack Company, LLC
    
    Greenbrier Concarril, LLC
    
    Greenbrier Leasing Company,Inc.
    
    One Centerpointe Drive, Suite
    
    One Centerpointe Drive, Suite
    
    LLCOne Centerpointe Drive, Suite
    
    200
    
    200
    
    One Centerpointe Drive, Suite200
    
    Lake Oswego, Oregon
    
    Lake Oswego, Oregon
    
    200Lake Oswego, Oregon
    
    97035-8612
    
    97035-8612
    
    Lake Oswego, Oregon97035-8612
    
    (503) 684-7000
    
    (503) 684-7000
    
    97035-8612(503) 684-7000
    
    
    
    
    
    (503) 684-7000Greenbrier Leasing, L.P.
    
    Greenbrier Leasing
    
    Greenbrier Management
    
    Greenbrier Railcar, LLCOne Centerpointe Drive, Suite
    
    Limited Partner, LLC
    
    Services, LLC
    
    One Centerpointe Drive, Suite200
    
    One Centerpointe Drive, Suite
    
    One Centerpointe Drive, Suite
    
    200Lake Oswego, Oregon
    
    200
    
    200
    
    Lake Oswego, Oregon97035-8612
    
    Lake Oswego, Oregon
    
    Lake Oswego, Oregon
    
    97035-8612(503) 684-7000
    
    97035-8612
    
    97035-8612
    
    (503) 684-7000(503) 684-7000
    
    (503) 684-7000Gunderson, LLC
    
    Gunderson Marine, LLC
    
    Gunderson Rail Services, LLC
    
    Gunderson Specialty Products,4350 NW Front Avenue
    
    4350 NW Front Avenue
    
    One Centerpointe Drive, Suite
    
    LLCPortland, Oregon 97210
    
    Portland, Oregon 97210
    
    200
    
    4350 NW Front Avenue(503) 972-5700
    
    (503) 972-5700
    
    Lake Oswego, Oregon
    
    Portland, Oregon 9721097035-8612
    
    (503) 972-5700(503) 684-7000
 þ o
 þ o
 o þ




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONItem 1. Condensed Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKItem 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONItem 1. Legal ProceedingsItem 6. ExhibitsEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2    Table of Contents  THE GREENBRIER COMPANIES, INC.
 
 PART I. FINANCIAL INFORMATION
 
 Item 1. Condensed Financial Statements
 Consolidated Balance Sheets  (In thousands, except per share amounts, unaudited)
 November 30,
    
    
    August 31,2005
    
    
    2005AssetsCash and cash equivalents
    
    $
    100,695
    
    
    $
    73,204Restricted cash
    
    
    89
    
    
    
    93Accounts and notes receivable
    
    
    91,656
    
    
    
    122,957Inventories
    
    
    121,183
    
    
    
    121,698Railcars held for sale
    
    
    103,606
    
    
    
    59,421Equipment on operating leases
    
    
    220,962
    
    
    
    183,155Investment in direct finance leases
    
    
    7,314
    
    
    
    9,974Property, plant and equipment
    
    
    72,917
    
    
    
    73,203Other
    
    
    29,003
    
    
    
    27,502$
    747,425
    
    
    $
    671,207Liabilities and Stockholders EquityRevolving notes
    
    $
    14,540
    
    
    $
    12,453Accounts payable and accrued liabilities
    
    
    207,516
    
    
    
    195,258Participation
    
    
    22,386
    
    
    
    21,900Deferred income taxes
    
    
    30,495
    
    
    
    31,629Deferred revenue
    
    
    3,870
    
    
    
    6,910Notes payable
    
    
    273,122
    
    
    
    214,635Subordinated debt
    
    
    7,175
    
    
    
    8,617Subsidiary shares subject to mandatory redemption
    
    
    3,746
    
    
    
    3,746Commitments and contingencies (Note 11)
    
    
    
    
    
    
    Stockholders equity:Preferred stock  $0.001 par value; 25,000
shares authorized; none outstanding
    
    
    
    
    
    
    Common stock  $0.001 par value; 50,000 shares
authorized; 15,540 and 15,479 shares
outstanding at November 30, 2005 and
August 31, 2005
    
    
    16
    
    
    
    15Additional paid-in capital
    
    
    64,211
    
    
    
    62,768Retained earnings
    
    
    120,760
    
    
    
    113,987Accumulated other comprehensive loss
    
    
    (412
    )
    
    
    (711
    )184,575
    
    
    
    176,059$
    747,425
    
    
    $
    671,207
 The accompanying notes are an integral part of these statements.
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THE GREENBRIER COMPANIES, INC.
 Consolidated Statements of Operations  (In thousands, except per share amounts, unaudited)
 Three Months EndedNovember 30,2005
    
    
    2004RevenueManufacturing
    
    $
    164,596
    
    
    $
    200,397Leasing & services
    
    
    21,766
    
    
    
    17,651186,362
    
    
    
    218,048Cost of revenueManufacturing
    
    
    143,030
    
    
    
    182,862Leasing & services
    
    
    10,439
    
    
    
    10,380153,469
    
    
    
    193,242Margin
    
    
    32,893
    
    
    
    24,806Other costsSelling and administrative expense
    
    
    15,684
    
    
    
    12,072Interest and foreign exchange
    
    
    4,430
    
    
    
    3,05920,114
    
    
    
    15,131Earnings before income taxes and equity in
unconsolidated subsidiaries
    
    
    12,779
    
    
    
    9,675Income tax expense
    
    
    (4,934
    )
    
    
    (3,554
    )Earnings before equity in unconsolidated subsidiaries
    
    
    7,845
    
    
    
    6,121Equity in earnings (loss) of unconsolidated subsidiaries
    
    
    172
    
    
    
    (731
    )Net earnings
    
    $
    8,017
    
    
    $
    5,390Basic earnings per common share:
    
    $
    0.52
    
    
    $
    0.36Diluted earnings per common share:
    
    $
    0.51
    
    
    $
    0.35Weighted average common shares:Basic
    
    
    15,511
    
    
    
    14,894Diluted
    
    
    15,847
    
    
    
    15,504
 The accompanying notes are an integral part of these statements.
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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 Consolidated Statements of Cash Flows  (In thousands, unaudited)
 Three Months EndedNovember 30,2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    8,017
    
    
    $
    5,390Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:Deferred income taxes
    
    
    (1,122
    )
    
    
    845Tax benefit of stock options exercised
    
    
    639
    
    
    
    Depreciation and amortization
    
    
    6,016
    
    
    
    5,285Gain on sales of equipment
    
    
    (612
    )
    
    
    (86
    )Other
    
    
    40
    
    
    
    10Decrease (increase) in assets:Accounts and notes receivable
    
    
    31,228
    
    
    
    (25,993
    )Inventories
    
    
    922
    
    
    
    (3,181
    )Railcars held for sale
    
    
    (43,619
    )
    
    
    (2,682
    )Other
    
    
    (1,663
    )
    
    
    2,299Increase (decrease) in liabilities:Accounts payable and accrued liabilities
    
    
    10,878
    
    
    
    (10,426
    )Participation
    
    
    486
    
    
    
    406Deferred revenue
    
    
    (2,846
    )
    
    
    5,624Net cash provided by (used in) operating activities
    
    
    8,364
    
    
    
    (22,509
    )Cash flows from investing activities:Principal payments received under direct finance leases
    
    
    871
    
    
    
    1,832Proceeds from sales of equipment
    
    
    3,169
    
    
    
    2,460Investment in and advances to unconsolidated joint
venture
    
    
    75
    
    
    
    (57
    )Capital expenditures
    
    
    (44,401
    )
    
    
    (12,395
    )Net cash used in investing activities
    
    
    (40,286
    )
    
    
    (8,160
    )Cash flows from financing activities:Changes in revolving notes
    
    
    2,096
    
    
    
    34,363Proceeds from notes payable
    
    
    60,000
    
    
    
    Repayments of notes payable
    
    
    (1,382
    )
    
    
    (2,280
    )Repayments of subordinated debt
    
    
    (1,442
    )
    
    
    (1,592
    )Proceeds from exercise of stock options
    
    
    805
    
    
    
    174Net cash provided by financing activities
    
    
    60,077
    
    
    
    30,665Effect of exchange rate changes
    
    
    (664
    )
    
    
    4,199Increase in cash and cash equivalents
    
    
    27,491
    
    
    
    4,195Cash and cash equivalentsBeginning of period
    
    
    73,204
    
    
    
    12,110End of period
    
    $
    100,695
    
    
    $
    16,305Cash paid during the period for:Interest
    
    $
    8,998
    
    
    $
    2,029Income taxes
    
    $
    4,374
    
    
    $
    112
 The accompanying notes are an integral part of these statements.
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THE GREENBRIER COMPANIES, INC.
 Notes to Consolidated Financial Statements  (Unaudited)
 Note 1
 Interim Financial Statements
   Management
estimates 
 Initial
Adoption of Accounting Policies  Share Based Payment.
 Prospective
Accounting Changes  Accounting Changes and Error Corrections Accounting Changes Reporting Accounting Changes in
Interim Financial Statements
 Note 2
 Acquisitions
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THE GREENBRIER COMPANIES, INC.
  Three Months EndedNovember 30,(In thousands, except per share amounts)
    
    2004Revenue
    
    $
    246,740Net earnings
    
    $
    4,201Basic earnings per share
    
    $
    0.28Diluted earnings per share
    
    $
    0.27
  Note 3
 Inventories
 November 30,
    
    
    August 31,(In thousands)
    
    2005
    
    
    2005Manufacturing supplies and raw materials
    
    $
    36,097
    
    
    $
    33,653Work-in-process
    
    
    88,679
    
    
    
    91,637Lower of cost or market adjustment
    
    
    (3,593
    )
    
    
    (3,592
    )$
    121,183
    
    
    $
    121,698
 Note 4
 Warranty Accruals
   Three Months EndedNovember 30,(In thousands)
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    15,037
    
    
    $
    12,691Charged to cost of revenue
    
    
    927
    
    
    
    1,016Payments
    
    
    (1,060
    )
    
    
    (1,071
    )Currency translation effect
    
    
    38
    
    
    
    1,082Balance at end of period
    
    $
    14,942
    
    
    $
    13,718
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THE GREENBRIER COMPANIES, INC.
 Note 5
 Notes Payable
 November 30,
    
    
    August 31,(In thousands)
    
    2005
    
    
    2005Senior unsecured notes
    
    $
    235,000
    
    
    $
    175,000Term loans
    
    
    38,020
    
    
    
    39,479Other
    
    
    102
    
    
    
    156$
    273,122
    
    
    $
    214,635
 3 8 th th
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THE GREENBRIER COMPANIES, INC.
  (In thousands)
 Year Ending August 31,2006 (Remaining nine months)
    
    $
    11,9692007
    
    
    4,1802008
    
    
    3,8812009
    
    
    4,0662010
    
    
    5,209Thereafter
    
    
    243,817$
    273,122
 Note 6
 Comprehensive Income
  Three Months EndedNovember 30,(In thousands)
    
    2005
    
    
    2004Net earnings
    
    $
    8,017
    
    
    $
    5,390Reclassification of derivative financial instruments recognized in
net earnings during the three months (net of tax effect)
    
    
    (1,251
    )
    
    
    (953
    )Unrealized gain on derivative financial instruments (net of tax effect)
    
    
    923
    
    
    
    5,853Foreign currency translation adjustment (net of tax effect)
    
    
    627
    
    
    
    2,464Comprehensive income
    
    $
    8,316
    
    
    $
    12,754
  UnrealizedGains (Losses)
    
    
    Foreign
    
    
    Accumulatedon Derivative
    
    
    Currency
    
    
    OtherFinancial
    
    
    Translation
    
    
    Comprehensive(In thousands)
    
    Instruments
    
    
    Adjustment
    
    
    Income (Loss)Balance, August 31, 2005
    
    $
    1,241
    
    
    $
    (1,952
    )
    
    $
    (711
    )First quarter activity
    
    
    (328
    )
    
    
    627
    
    
    
    299Balance, November 30, 2005
    
    $
    913
    
    
    $
    (1,325
    )
    
    $
    (412
    )
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THE GREENBRIER COMPANIES, INC.
 Note 7  Earnings Per Share
  Three Months EndedNovember 30,(In thousands)
    
    2005
    
    2004Weighted average basic common shares outstanding
    
    
    15,511
    
    
    
    14,894Dilutive effect of employee stock options
    
    
    336
    
    
    
    610Weighted average diluted common shares outstanding
    
    
    15,847
    
    
    
    15,504
  Note 8  Stock Based Compensation
 Accounting for Stock Issued
to Employees
 Three MonthsEndedNovember 30,(In
thousands, except per share amounts)
    
    2004Net earnings, as reported
    
    $
    5,390Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of tax (1)
    
    
    (48
    )Net earnings, pro forma
    
    $
    5,342Basic earnings per shareAs reported
    
    $
    0.36Pro forma
    
    $
    0.36Diluted earnings per shareAs reported
    
    $
    0.35Pro forma
    
    $
    0.34
 
 (1)
    
    Compensation expense was determined based on the Black-Scholes-Merton option pricing
model which was developed to estimate the value of publicly traded options. Greenbriers
options are not publicly traded.  9




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THE GREENBRIER COMPANIES, INC.
 Note 9  Derivative Instruments
    Note 10  Segment Information
   Three Months EndedNovember 30,(In thousands)
    
    2005
    
    
    2004Revenue:Manufacturing
    
    $
    230,394
    
    
    $
    200,937Leasing & services
    
    
    25,674
    
    
    
    21,477Intersegment eliminations
    
    
    (69,706
    )
    
    
    (4,366
    )$
    186,362
    
    
    $
    218,048Margin:Manufacturing
    
    $
    21,566
    
    
    $
    17,535Leasing & services
    
    
    11,327
    
    
    
    7,271$
    32,893
    
    
    $
    24,806
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THE GREENBRIER COMPANIES, INC.
 Note 11  Commitments and Contingencies
          11




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THE GREENBRIER COMPANIES, INC.
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THE GREENBRIER COMPANIES, INC.
    Note 12  Guarantor/Non Guarantor
   13




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THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    89,583
    
    
    $
    337
    
    
    $
    10,775
    
    
    $
    
    
    
    $
    100,695Restricted cash
    
    
    
    
    
    
    
    
    
    
    89
    
    
    
    
    
    
    
    89Accounts and notes receivable
    
    
    23,008
    
    
    
    39,701
    
    
    
    28,856
    
    
    
    91
    
    
    
    91,656Inventories
    
    
    
    
    
    
    81,373
    
    
    
    39,810
    
    
    
    
    
    
    
    121,183Railcars held for sale
    
    
    
    
    
    
    98,248
    
    
    
    6,716
    
    
    
    (1,358
    )
    
    
    103,606Equipment on operating leases
    
    
    
    
    
    
    222,991
    
    
    
    
    
    
    
    (2,029
    )
    
    
    220,962Investment in direct finance leases
    
    
    
    
    
    
    7,314
    
    
    
    
    
    
    
    
    
    
    
    7,314Property, plant and equipment
    
    
    5
    
    
    
    50,924
    
    
    
    21,988
    
    
    
    
    
    
    
    72,917Other
    
    
    317,167
    
    
    
    25,321
    
    
    
    2,488
    
    
    
    (315,973
    )
    
    
    29,003$
    429,763
    
    
    $
    526,209
    
    
    $
    110,722
    
    
    $
    (319,269
    )
    
    $
    747,425LIABILITIES AND STOCKHOLDERS EQUITYRevolving notes
    
    $
    
    
    
    $
    
    
    
    $
    14,540
    
    
    $
    
    
    
    $
    14,540Accounts payable and accrued
liabilities
    
    
    1,618
    
    
    
    157,109
    
    
    
    48,697
    
    
    
    92
    
    
    
    207,516Participation
    
    
    
    
    
    
    22,386
    
    
    
    
    
    
    
    
    
    
    
    22,386Deferred income taxes
    
    
    716
    
    
    
    31,540
    
    
    
    (1,027
    )
    
    
    (734
    )
    
    
    30,495Deferred revenue
    
    
    1,358
    
    
    
    2,092
    
    
    
    420
    
    
    
    
    
    
    
    3,870Notes payable
    
    
    242,795
    
    
    
    16,888
    
    
    
    13,439
    
    
    
    
    
    
    
    273,122Subordinated debt
    
    
    
    
    
    
    7,175
    
    
    
    
    
    
    
    
    
    
    
    7,175Minority interest
    
    
    
    
    
    
    (66
    )
    
    
    
    
    
    
    66
    
    
    
    Subsidiary shares subject to
mandatory
redemption
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,746
    
    
    
    3,746STOCKHOLDERS EQUITY
    
    
    183,276
    
    
    
    289,085
    
    
    
    34,653
    
    
    
    (322,439
    )
    
    
    184,575$
    429,763
    
    
    $
    526,209
    
    
    $
    110,722
    
    
    $
    (319,269
    )
    
    $
    747,425
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THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenueManufacturing
    
    $
    
    
    
    $
    130,117
    
    
    $
    75,176
    
    
    $
    (40,697
    )
    
    $
    164,596Leasing and services
    
    
    988
    
    
    
    21,505
    
    
    
    
    
    
    
    (727
    )
    
    
    21,766988
    
    
    
    151,622
    
    
    
    75,176
    
    
    
    (41,424
    )
    
    
    186,362Cost of revenueManufacturing
    
    
    (53
    )
    
    
    111,873
    
    
    
    70,789
    
    
    
    (39,579
    )
    
    
    143,030Leasing and services
    
    
    
    
    
    
    10,455
    
    
    
    
    
    
    
    (16
    )
    
    
    10,439(53
    )
    
    
    122,328
    
    
    
    70,789
    
    
    
    (39,595
    )
    
    
    153,469Margin
    
    
    1,041
    
    
    
    29,294
    
    
    
    4,387
    
    
    
    (1,829
    )
    
    
    32,893Other costsSelling and administrative expense
    
    
    4,136
    
    
    
    9,865
    
    
    
    1,683
    
    
    
    
    
    
    
    15,684Interest and foreign exchange
    
    
    4,403
    
    
    
    945
    
    
    
    79
    
    
    
    (997
    )
    
    
    4,4308,539
    
    
    
    10,810
    
    
    
    1,762
    
    
    
    (997
    )
    
    
    20,114Earnings (loss) before income taxes,
minority interest and equity in
earnings
(loss) of unconsolidated subsidiaries
    
    
    (7,498
    )
    
    
    18,484
    
    
    
    2,625
    
    
    
    (832
    )
    
    
    12,779Income tax (expense) benefit
    
    
    2,923
    
    
    
    (7,501
    )
    
    
    (691
    )
    
    
    335
    
    
    
    (4,934
    )(4,575
    )
    
    
    10,983
    
    
    
    1,934
    
    
    
    (497
    )
    
    
    7,845Minority interest
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    45
    
    
    
    Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    12,592
    
    
    
    172
    
    
    
    
    
    
    
    (12,592
    )
    
    
    172Net earnings
    
    $
    8,017
    
    
    $
    11,110
    
    
    $
    1,934
    
    
    $
    (13,044
    )
    
    $
    8,017
 15




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net earnings
    
    $
    8,017
    
    
    $
    11,110
    
    
    $
    1,934
    
    
    $
    (13,044
    )
    
    $
    8,017Adjustments to reconcile net earnings
to
net cash provided by (used in)
operating activities:Deferred income taxes
    
    
    (236
    )
    
    
    (20
    )
    
    
    (531
    )
    
    
    (335
    )
    
    
    (1,122
    )Tax benefit of options exercised
    
    
    639
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    639Depreciation and amortization
    
    
    158
    
    
    
    5,036
    
    
    
    838
    
    
    
    (16
    )
    
    
    6,016Gain on sales of equipment
    
    
    
    
    
    
    (609
    )
    
    
    
    
    
    
    (3
    )
    
    
    (612
    )Other
    
    
    (2
    )
    
    
    72
    
    
    
    15
    
    
    
    (45
    )
    
    
    40Decrease (increase) in assetsAccounts and notes receivable
    
    
    4,318
    
    
    
    35,986
    
    
    
    (9,028
    )
    
    
    (48
    )
    
    
    31,228Inventories
    
    
    
    
    
    
    (4,264
    )
    
    
    5,187
    
    
    
    (1
    )
    
    
    922Railcars held for sale
    
    
    
    
    
    
    (43,517
    )
    
    
    (853
    )
    
    
    751
    
    
    
    (43,619
    )Other
    
    
    (41,250
    )
    
    
    26,841
    
    
    
    154
    
    
    
    12,592
    
    
    
    (1,663
    )Increase (decrease) in liabilitiesAccounts payable and accrued
liabilities
    
    
    (9,211
    )
    
    
    12,416
    
    
    
    7,666
    
    
    
    7
    
    
    
    10,878Participation
    
    
    
    
    
    
    486
    
    
    
    
    
    
    
    
    
    
    
    486Deferred revenue
    
    
    (39
    )
    
    
    (3,294
    )
    
    
    487
    
    
    
    
    
    
    
    (2,846
    )Net cash provided by (used in) operating
activities
    
    
    (37,606
    )
    
    
    40,243
    
    
    
    5,869
    
    
    
    (142
    )
    
    
    8,364Cash flows from investing activities:Principal payments received under
direct finance leases
    
    
    
    
    
    
    871
    
    
    
    
    
    
    
    
    
    
    
    871Proceeds from sales of equipment
    
    
    
    
    
    
    3,169
    
    
    
    
    
    
    
    
    
    
    
    3,169Investment in and advances to
unconsolidated subsidiaries
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    75Capital expenditures
    
    
    
    
    
    
    (43,795
    )
    
    
    (706
    )
    
    
    100
    
    
    
    (44,401
    )Net cash provided by (used in)
investing activities
    
    
    
    
    
    
    (39,680
    )
    
    
    (706
    )
    
    
    100
    
    
    
    (40,286
    )Cash flows from financing activitiesChanges in revolving notes
    
    
    
    
    
    
    
    
    
    
    2,096
    
    
    
    
    
    
    
    2,096Proceeds from notes payable
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000Repayments of notes payable
    
    
    (277
    )
    
    
    (884
    )
    
    
    (221
    )
    
    
    
    
    
    
    (1,382
    )Repayments of subordinated debt
    
    
    
    
    
    
    (1,442
    )
    
    
    
    
    
    
    
    
    
    
    (1,442
    )Stock options exercised and restricted
stock awards
    
    
    805
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    805Net cash provided by (used in )
financing activities
    
    
    60,528
    
    
    
    (2,326
    )
    
    
    1,875
    
    
    
    
    
    
    
    60,077Effect of exchange rate changes
    
    
    (99
    )
    
    
    47
    
    
    
    (613
    )
    
    
    1
    
    
    
    (664
    )Increase in cash and cash equivalents
    
    
    22,823
    
    
    
    (1,716
    )
    
    
    6,425
    
    
    
    (41
    )
    
    
    27,491Cash and cash equivalentsBeginning of period
    
    
    66,760
    
    
    
    2,053
    
    
    
    4,350
    
    
    
    41
    
    
    
    73,204End of period
    
    $
    89,583
    
    
    $
    337
    
    
    $
    10,775
    
    
    $
    
    
    
    $
    100,695
 16




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    66,760
    
    
    $
    2,053
    
    
    $
    4,350
    
    
    $
    41
    
    
    $
    73,204Restricted cash
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    93Accounts and notes receivable
    
    
    27,325
    
    
    
    75,762
    
    
    
    19,827
    
    
    
    43
    
    
    
    122,957Inventories
    
    
    
    
    
    
    77,110
    
    
    
    44,588
    
    
    
    
    
    
    
    121,698Railcars held for sale
    
    
    
    
    
    
    54,165
    
    
    
    5,863
    
    
    
    (607
    )
    
    
    59,421Equipment on operating leases
    
    
    
    
    
    
    185,104
    
    
    
    
    
    
    
    (1,949
    )
    
    
    183,155Investment in direct finance leases
    
    
    
    
    
    
    9,974
    
    
    
    
    
    
    
    
    
    
    
    9,974Property, plant and equipment
    
    
    8
    
    
    
    51,381
    
    
    
    21,814
    
    
    
    
    
    
    
    73,203Other
    
    
    276,072
    
    
    
    24,788
    
    
    
    2,635
    
    
    
    (275,993
    )
    
    
    27,502$
    370,165
    
    
    $
    480,337
    
    
    $
    99,170
    
    
    $
    (278,465
    )
    
    $
    671,207LIABILITIES AND STOCKHOLDERS EQUITYRevolving notes
    
    $
    
    
    
    $
    
    
    
    $
    12,453
    
    
    $
    
    
    
    $
    12,453Accounts payable and accrued
liabilities
    
    
    9,586
    
    
    
    144,672
    
    
    
    40,916
    
    
    
    84
    
    
    
    195,258Participation
    
    
    
    
    
    
    21,900
    
    
    
    
    
    
    
    
    
    
    
    21,900Deferred income taxes
    
    
    952
    
    
    
    31,560
    
    
    
    (484
    )
    
    
    (399
    )
    
    
    31,629Deferred revenue
    
    
    1,396
    
    
    
    5,387
    
    
    
    127
    
    
    
    
    
    
    
    6,910Notes payable
    
    
    183,072
    
    
    
    17,772
    
    
    
    13,791
    
    
    
    
    
    
    
    214,635Subordinated debt
    
    
    
    
    
    
    8,617
    
    
    
    
    
    
    
    
    
    
    
    8,617Minority
    
    
    
    
    
    
    (111
    )
    
    
    
    
    
    
    111
    
    
    
    Subsidiary shares subject to
mandatory
redemption
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,746
    
    
    
    3,746STOCKHOLDERS EQUITY
    
    
    175,159
    
    
    
    250,540
    
    
    
    32,367
    
    
    
    (282,007
    )
    
    
    176,059$
    370,165
    
    
    $
    480,337
    
    
    $
    99,170
    
    
    $
    (278,465
    )
    
    $
    671,207
 17




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenueManufacturing
    
    $
    13,174
    
    
    $
    95,871
    
    
    $
    91,385
    
    
    $
    (33
    )
    
    $
    200,397Leasing and services
    
    
    316
    
    
    
    17,899
    
    
    
    
    
    
    
    (564
    )
    
    
    17,65113,490
    
    
    
    113,770
    
    
    
    91,385
    
    
    
    (597
    )
    
    
    218,048Cost of revenueManufacturing
    
    
    12,225
    
    
    
    84,730
    
    
    
    85,907
    
    
    
    
    
    
    
    182,862Leasing and services
    
    
    
    
    
    
    10,399
    
    
    
    
    
    
    
    (19
    )
    
    
    10,38012,225
    
    
    
    95,129
    
    
    
    85,907
    
    
    
    (19
    )
    
    
    193,242Margin
    
    
    1,265
    
    
    
    18,641
    
    
    
    5,478
    
    
    
    (578
    )
    
    
    24,806Other costsSelling and administrative expense
    
    
    2,762
    
    
    
    6,922
    
    
    
    2,388
    
    
    
    
    
    
    
    12,072Interest and foreign exchange
    
    
    771
    
    
    
    1,804
    
    
    
    1,081
    
    
    
    (597
    )
    
    
    3,0593,533
    
    
    
    8,726
    
    
    
    3,469
    
    
    
    (597
    )
    
    
    15,131Earnings (loss) before income taxes,
minority interest and equity in
earnings
(loss) of unconsolidated subsidiaries
    
    
    (2,268
    )
    
    
    9,915
    
    
    
    2,009
    
    
    
    19
    
    
    
    9,675Income tax (expense) benefit
    
    
    1,090
    
    
    
    (4,176
    )
    
    
    (463
    )
    
    
    (5
    )
    
    
    (3,554
    )(1,178
    )
    
    
    5,739
    
    
    
    1,546
    
    
    
    14
    
    
    
    6,121Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    6,568
    
    
    
    (80
    )
    
    
    
    
    
    
    (7,219
    )
    
    
    (731
    )Net earnings
    
    $
    5,390
    
    
    $
    5,659
    
    
    $
    1,546
    
    
    $
    (7,205
    )
    
    $
    5,390
 18




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net earnings
    
    $
    5,390
    
    
    $
    5,659
    
    
    $
    1,546
    
    
    $
    (7,205
    )
    
    $
    5,390Adjustments to reconcile net
earnings to
net cash provided by (used in)
operating activities:Deferred income taxes
    
    
    625
    
    
    
    (1,389
    )
    
    
    1,604
    
    
    
    5
    
    
    
    845Depreciation and amortization
    
    
    19
    
    
    
    4,340
    
    
    
    945
    
    
    
    (19
    )
    
    
    5,285Gain on sales of equipment
    
    
    
    
    
    
    (86
    )
    
    
    
    
    
    
    
    
    
    
    (86
    )Other
    
    
    
    
    
    
    8
    
    
    
    2
    
    
    
    
    
    
    
    10Decrease (increase) in assetsAccounts and notes receivable
    
    
    203
    
    
    
    (17,320
    )
    
    
    (9,061
    )
    
    
    185
    
    
    
    (25,993
    )Inventories
    
    
    
    
    
    
    900
    
    
    
    (4,081
    )
    
    
    
    
    
    
    (3,181
    )Railcars held for sale
    
    
    
    
    
    
    (1,613
    )
    
    
    (1,069
    )
    
    
    
    
    
    
    (2,682
    )Other
    
    
    (6,877
    )
    
    
    871
    
    
    
    1,086
    
    
    
    7,219
    
    
    
    2,299Increase (decrease) in liabilitiesAccounts payable and accrued
liabilities
    
    
    (157
    )
    
    
    888
    
    
    
    (10,972
    )
    
    
    (185
    )
    
    
    (10,426
    )Participation
    
    
    
    
    
    
    406
    
    
    
    
    
    
    
    
    
    
    
    406Deferred revenue
    
    
    1,552
    
    
    
    3,742
    
    
    
    330
    
    
    
    
    
    
    
    5,624Net cash provided by (used in)
operating
activities
    
    
    755
    
    
    
    (3,594
    )
    
    
    (19,670
    )
    
    
    
    
    
    
    (22,509
    )Cash flows from investing activities:Principal payments received under
direct finance leases
    
    
    
    
    
    
    1,832
    
    
    
    
    
    
    
    
    
    
    
    1,832Proceeds from sales of equipment
    
    
    
    
    
    
    2,460
    
    
    
    
    
    
    
    
    
    
    
    2,460Investment in and advances to
unconsolidated subsidiaries
    
    
    
    
    
    
    (57
    )
    
    
    
    
    
    
    
    
    
    
    (57
    )Capital expenditures
    
    
    
    
    
    
    (11,435
    )
    
    
    (960
    )
    
    
    
    
    
    
    (12,395
    )Net cash used in investing activities
    
    
    
    
    
    
    (7,200
    )
    
    
    (960
    )
    
    
    
    
    
    
    (8,160
    )Cash flows from financing activitiesChanges in revolving notes
    
    
    
    
    
    
    16,000
    
    
    
    18,363
    
    
    
    
    
    
    
    34,363Repayments of notes payable
    
    
    (255
    )
    
    
    (1,790
    )
    
    
    (235
    )
    
    
    
    
    
    
    (2,280
    )Repayments of subordinated debt
    
    
    
    
    
    
    (1,592
    )
    
    
    
    
    
    
    
    
    
    
    (1,592
    )Proceeds from exercise of stock
options
    
    
    174
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    174Net cash provided by (used in )
financing activities
    
    
    (81
    )
    
    
    12,618
    
    
    
    18,128
    
    
    
    
    
    
    
    30,665Effect of exchange rate changes
    
    
    (674
    )
    
    
    590
    
    
    
    4,283
    
    
    
    
    
    
    
    4,199Increase in cash and cash equivalents
    
    
    
    
    
    
    2,414
    
    
    
    1,781
    
    
    
    
    
    
    
    4,195Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    10,454
    
    
    
    1,656
    
    
    
    
    
    
    
    12,110End of period
    
    $
    
    
    
    $
    12,868
    
    
    $
    3,437
    
    
    $
    
    
    
    $
    16,305
 19




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 Note 13  Subsequent Event
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
     3 8 th th
 20




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 Critical Accounting Policies
  Income taxes
 Maintenance obligations
 Warranty accruals
  Results of Operations
 Three Months Ended November 30, 2005 Compared to Three Months Ended November 30, 2004
 Overview
  21




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 Manufacturing Segment
     Leasing & Services Segment
    Other Costs
  22




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
   Equity in Earnings (Loss) of Unconsolidated Subsidiaries
  Liquidity and Capital Resources
       23




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
        Off Balance Sheet Arrangements
  Forward-Looking Statements
  
    
    availability of financing sources and borrowing base for working capital, other business development activities,
capital spending and railcar warehousing activities;
 
    
    ability to renew or obtain sufficient lines of credit and performance guarantees on acceptable terms;
 
    
    ability to utilize beneficial tax strategies;
 
    
    ability to grow our railcar services and lease fleet and management services business;
 
    
    ability to obtain sales contracts which contain provisions for the escalation of prices due to increased costs of
materials and components;
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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
    
    ability to obtain adequate certification and licensing of products; and
 
    
    short- and long-term revenue and earnings effects of the above items.
  
    
    a delay or failure of acquired businesses, products or services to compete successfully;
 
    
    decreases in carrying value of assets due to impairment;
 
    
    severance or other costs or charges associated with lay-offs, shutdowns, or reducing the size and scope of operations;
 
    
    changes in future maintenance requirements;
 
    
    effects of local statutory accounting conventions on compliance with covenants in certain loan agreements;
 
    
    domestic and global business conditions and growth or reduction in the surface transportation industry;
 
    
    actual future costs and the availability of materials and a trained workforce;
 
    
    ability to maintain good relationships with third party labor providers or collective bargaining units;
 
    
    availability of subcontractors;
 
    
    steel price increases, scrap surcharges and other commodity price fluctuations and their impact on railcar demand and
margin;
 
    
    changes in product mix and the mix between the manufacturing and leasing & services 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 or
non-performance of alliance partners, subcontractors or suppliers;
 
    
    ability to obtain suitable contracts for railcars held for sale;
 
    
    lower than anticipated residual values for leased equipment;
 
    
    discovery of defects in railcars resulting in increased warranty costs or litigation;
 
    
    resolution or outcome of investigations and pending or future litigation;
 
    
    the ability to consummate expected sales;
 
    
    delays in receipt of orders, risks that contracts may be canceled during their term or not renewed and that customers
may not purchase as much equipment under the contracts as anticipated;
 
    
    financial condition of principal customers;
 
    
    market acceptance of products;
 
    
    ability to determine and obtain adequate levels of insurance at acceptable rates;
 
    
    competitive factors, including introduction of competitive products, price pressures, limited customer base and
competitiveness of our manufacturing facilities and products;
 
    
    industry over-capacity and our manufacturing capacity utilization;
 
    
    continued industry demand at current and anticipated levels for railcar products;
 
    
    domestic and global political, regulatory or economic conditions including such matters as terrorism, war, embargoes or
quotas;
 
    
    ability to adjust to the cyclical nature of the railcar industry;
 
    
    cost overrun or delays in completion of the expansion of the marine facility;
 
    
    the effects of car hire deprescription on leasing revenue;
 
    
    changes in interest rates;
 
    
    actions by various regulatory agencies;
 
    
    changes in fuel and/or energy prices;
 
    
    availability and price of essential raw materials, specialties or components, including steel castings, to permit
manufacture of units on order;
 
    
    ability to replace lease revenue and earnings from maturing and terminating leases with revenue and earnings from
additions to the lease fleet, lease renewals and management services; and
 
    
    financial impacts from currency fluctuations in our worldwide operations.
 25




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
  26




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THE GREENBRIER COMPANIES, INC.
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Foreign Currency Exchange Risk
   Interest Rate Risk
  27




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls over Financial Reporting
  28




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 6. Exhibits
  31.1
    
    Certification pursuant to Rule 13 (a)  14 (a)31.2
    
    Certification pursuant to Rule 13 (a)  14 (a)32.1
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 SIGNATURES
  THE GREENBRIER COMPANIES, INC.Date: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradySenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) 30




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##### Table of Contents



SIGNATURES
  AUTOSTACK COMPANY LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Chief Executive Officer and Manager
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)
 31




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##### Table of Contents



SIGNATURES
  GREENBRIER-CONCARRIL, LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Chairman of the Board of Directors
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)/s/ L. Clark Wood

L. Clark Wood
    
    
    
    Director/s/ Robin Bisson

Robin Bisson
    
    
    
    Director
 32




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##### Table of Contents



SIGNATURES
  GREENBRIER LEASING COMPANY, LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Chief Executive Officer and Manager
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)
 33




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##### Table of Contents



SIGNATURES
  GREENBRIER LEASING, L.P.
 Dated: January 4, 2006
    
    
    
    By: Greenbrier Management Services LLCGeneral PartnerBy: Greenbrier Leasing Company LLCSole Member and ManagerBy:
    
    /s/ Larry G. BradyLarry G. BradyVice President
 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Principal Executive Officer/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Principal Financial and Accounting Officer
 34




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##### Table of Contents



SIGNATURES
  GREENBRIER LEASING LIMITED
PARTNER, LLC
 Dated: January 4, 2006
    
    
    
    By: Greenbrier Leasing Company LLCSole Member and ManagerBy:
    
    /s/ Larry G. BradyLarry G. BradyVice President
 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Principal Executive Officer/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Principal Financial and Accounting Officer
 35




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##### Table of Contents



SIGNATURES
  GREENBRIER MANAGEMENT SERVICES LLC
 Dated: January 4, 2006
    
    
    
    By: Greenbrier Leasing Company LLCSole Member and ManagerBy:
    
    /s/ Larry G. BradyLarry G. BradyVice President
 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Principal Executive Officer/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Principal Financial and Accounting Officer
 36




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##### Table of Contents



SIGNATURES
  GREENBRIER RAILCAR LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Manager
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)
 37




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##### Table of Contents



SIGNATURES
  GUNDERSON LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Manager
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)
 38




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##### Table of Contents



SIGNATURES
  GUNDERSON MARINE LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Manager
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)
 39




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##### Table of Contents



SIGNATURES
  GUNDERSON RAIL SERVICES LLC
 Dated: January 4, 2006
    By:
    /s/ Larry G. BradyLarry G. BradyVice President 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Manager
(Principal Executive Officer)/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Vice President
(Principal Financial and Accounting Officer)
 40




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##### Table of Contents



SIGNATURES
  GUNDERSON SPECIALTY PRODUCTS LLC
 Dated: January 4, 2006
    
    
    
    By: Gunderson LLC, Sole Member and Sole ManagerBy:
    
    /s/ Larry G. BradyLarry G. BradyVice President
 
 Signature
    
    
    
    Title/s/ William A. Furman

William A. Furman
    
    
    
    Principal Executive Officer/s/ Larry G. Brady

Larry G. Brady
    
    
    
    Principal Financial and Accounting Officer
 41