##### Table of Contents



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 February 28, 2006
 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.
  Oregon
    
    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, Inc.
One Centerpointe Drive, Suite
200
    
    Autostack Company, LLC
One Centerpointe Drive, Suite
200
    
    Greenbrier Concarril, LLC
One Centerpointe Drive, Suite
200
    
    Greenbrier Leasing Company,
LLC
One Centerpointe Drive, Suite
200Lake Oswego, Oregon
97035-8612
(503) 684-7000

Greenbrier Leasing, L.P.
One Centerpointe Drive, Suite
200
    
    Lake Oswego, Oregon
97035-8612
(503) 684-7000

Greenbrier Leasing
Limited Partner, LLC
One Centerpointe Drive, Suite
200
    
    Lake Oswego, Oregon
97035-8612
(503) 684-7000

Greenbrier Management
Services, LLC
One Centerpointe Drive, Suite
200
    
    Lake Oswego, Oregon
97035-8612
(503) 684-7000

Greenbrier Railcar, LLC
One Centerpointe Drive, Suite
200Lake Oswego, Oregon
97035-8612
(503) 684-7000
    
    Lake Oswego, Oregon
97035-8612
(503) 684-7000
    
    Lake Oswego, Oregon
97035-8612
(503) 684-7000
    
    Lake Oswego, Oregon
97035-8612
(503) 684-7000Gunderson, LLC
4350 NW Front Avenue
Portland, Oregon 97210
(503) 972-5700
    
    Gunderson Marine, LLC
4350 NW Front Avenue
Portland, Oregon 97210
(503) 972-5700
    
    Gunderson Rail Services, LLC
One Centerpointe Drive, Suite
200
Lake Oswego, Oregon
97035-8612
(503) 684-7000
    
    Gunderson Specialty Products,
LLC
4350 NW Front Avenue
Portland, Oregon 97210
(503) 972-5700
 þ o
  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. ExhibitsSIGNATURESEXHIBIT 3.1EXHIBIT 3.2EXHIBIT 3.3EXHIBIT 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)
 February 28,
    
    
    August 31,2006
    
    
    2005AssetsCash and cash equivalents
    
    $
    51,665
    
    
    $
    73,204Restricted cash
    
    
    1,535
    
    
    
    93Accounts and notes receivable
    
    
    102,167
    
    
    
    122,957Inventories
    
    
    118,644
    
    
    
    121,698Railcars held for sale
    
    
    83,211
    
    
    
    59,421Equipment on operating leases
    
    
    250,974
    
    
    
    183,155Investment in direct finance leases
    
    
    5,361
    
    
    
    9,974Property, plant and equipment
    
    
    76,873
    
    
    
    73,203Other
    
    
    28,411
    
    
    
    27,502$
    718,841
    
    
    $
    671,207Liabilities and Stockholders EquityRevolving notes
    
    $
    18,099
    
    
    $
    12,453Accounts payable and accrued liabilities
    
    
    172,020
    
    
    
    195,258Participation
    
    
    10,701
    
    
    
    21,900Deferred income taxes
    
    
    35,340
    
    
    
    31,629Deferred revenue
    
    
    9,931
    
    
    
    6,910Notes payable
    
    
    270,494
    
    
    
    214,635Subordinated debt
    
    
    6,111
    
    
    
    8,617Subsidiary shares subject to mandatory redemption
    
    
    
    
    
    
    3,746Commitments and contingencies (Note 11)
    
    
    
    
    
    
    Stockholders equity:Preferred stock  without par value; 25,000
shares authorized; none outstanding
    
    
    
    
    
    
    Common stock  without par value; 50,000 shares
authorized; 15,840 and 15,479 shares
outstanding at February 28, 2006 and August
31, 2005
    
    
    16
    
    
    
    15Additional paid-in capital
    
    
    67,689
    
    
    
    62,768Retained earnings
    
    
    128,070
    
    
    
    113,987Accumulated other comprehensive income (loss)
    
    
    370
    
    
    
    (711
    )196,145
    
    
    
    176,059$
    718,841
    
    
    $
    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 Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005RevenueManufacturing
    
    $
    208,922
    
    
    $
    233,808
    
    
    $
    373,518
    
    
    $
    434,205Leasing & services
    
    
    27,292
    
    
    
    21,105
    
    
    
    49,058
    
    
    
    38,756236,214
    
    
    
    254,913
    
    
    
    422,576
    
    
    
    472,961Cost of revenueManufacturing
    
    
    185,360
    
    
    
    217,796
    
    
    
    328,391
    
    
    
    400,658Leasing & services
    
    
    10,671
    
    
    
    10,570
    
    
    
    21,109
    
    
    
    20,950196,031
    
    
    
    228,366
    
    
    
    349,500
    
    
    
    421,608Margin
    
    
    40,183
    
    
    
    26,547
    
    
    
    73,076
    
    
    
    51,353Other costsSelling and administrative
    
    
    17,260
    
    
    
    14,044
    
    
    
    32,944
    
    
    
    26,116Interest and foreign exchange
    
    
    7,012
    
    
    
    4,295
    
    
    
    11,442
    
    
    
    7,35524,272
    
    
    
    18,339
    
    
    
    44,386
    
    
    
    33,471Earnings before income taxes and
equity in unconsolidated
subsidiaries
    
    
    15,911
    
    
    
    8,208
    
    
    
    28,690
    
    
    
    17,882Income tax expense
    
    
    (7,466
    )
    
    
    (3,397
    )
    
    
    (12,400
    )
    
    
    (6,951
    )Earnings before equity in
unconsolidated subsidiaries
    
    
    8,445
    
    
    
    4,811
    
    
    
    16,290
    
    
    
    10,931Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    118
    
    
    
    (9
    )
    
    
    290
    
    
    
    (739
    )Net earnings
    
    $
    8,563
    
    
    $
    4,802
    
    
    $
    16,580
    
    
    $
    10,192Basic earnings per common share
    
    $
    0.55
    
    
    $
    0.32
    
    
    $
    1.06
    
    
    $
    0.68Diluted earnings per common share
    
    $
    0.54
    
    
    $
    0.31
    
    
    $
    1.04
    
    
    $
    0.66Weighted average common shares:Basic
    
    
    15,655
    
    
    
    14,954
    
    
    
    15,583
    
    
    
    14,924Diluted
    
    
    15,911
    
    
    
    15,573
    
    
    
    15,880
    
    
    
    15,542
 The accompanying notes are an integral part of these statements.
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THE GREENBRIER COMPANIES, INC .
 Consolidated Statements of Cash Flows  (In thousands, unaudited)
 Six Months EndedFebruary 28,2006
    
    
    2005Cash flows from operating activitiesNet earnings
    
    $
    16,580
    
    
    $
    10,192Adjustments to reconcile net earnings to net cash used in
operating activities:Deferred income taxes
    
    
    3,741
    
    
    
    (587
    )Tax benefit of stock options exercised and
restricted stock award dividends
    
    
    1,299
    
    
    
    1,488Depreciation and amortization
    
    
    12,756
    
    
    
    10,693Gain on sales of equipment
    
    
    (2,812
    )
    
    
    (3,518
    )Other
    
    
    48
    
    
    
    901Decrease (increase) in assets:Accounts and notes receivable
    
    
    21,693
    
    
    
    (49,217
    )Inventories
    
    
    5,248
    
    
    
    4,471Railcars held for sale
    
    
    (47,856
    )
    
    
    8,238Other
    
    
    (953
    )
    
    
    (717
    )Increase (decrease) in liabilities:Accounts payable and accrued liabilities
    
    
    (25,068
    )
    
    
    (18,069
    )Participation
    
    
    (11,199
    )
    
    
    (16,055
    )Deferred revenue
    
    
    3,158
    
    
    
    1,679Net cash used in operating activities
    
    
    (23,365
    )
    
    
    (50,501
    )Cash flows from investing activitiesPrincipal payments received under direct finance leases
    
    
    1,317
    
    
    
    3,285Proceeds from sales of equipment
    
    
    8,793
    
    
    
    20,005Investment in and net advances to unconsolidated subsidiary
    
    
    216
    
    
    
    (34
    )Acquisition of joint venture interest
    
    
    
    
    
    
    8,435Decrease (increase) in restricted cash
    
    
    (1,442
    )
    
    
    662Capital expenditures
    
    
    (61,624
    )
    
    
    (34,844
    )Net cash used in investing activities
    
    
    (52,740
    )
    
    
    (2,491
    )Cash flows from financing activitiesChanges in revolving notes
    
    
    5,108
    
    
    
    63,001Proceeds from notes payable
    
    
    60,000
    
    
    
    Repayments of notes payable
    
    
    (4,276
    )
    
    
    (8,907
    )Repayment of subordinated debt
    
    
    (2,507
    )
    
    
    (4,369
    )Dividends
    
    
    (2,495
    )
    
    
    (1,793
    )Proceeds from exercise of stock options
    
    
    3,622
    
    
    
    652Purchase of subsidiary shares subject to mandatory
redemption
    
    
    (4,636
    )
    
    
    Net cash provided by financing activities
    
    
    54,816
    
    
    
    48,584Effect of exchange rate changes
    
    
    (250
    )
    
    
    4,361Decrease in cash and cash equivalents
    
    
    (21,539
    )
    
    
    (47
    )Cash and cash equivalentsBeginning of period
    
    
    73,204
    
    
    
    12,110End of period
    
    $
    51,665
    
    
    $
    12,063Cash paid during the period forInterest
    
    $
    11,843
    
    
    $
    5,395Income taxes
    
    $
    12,963
    
    
    $
    4,784Non-cash activityTransfer of railcars held for sale to equipment on operating leases
    
    $
    23,954
    
    
    $
    Supplemental disclosure of subsidiary acquiredAssets acquired, net of cash
    
    $
    
    
    
    $
    (19,051
    )Liabilities assumed
    
    
    
    
    
    
    19,529Investment previously booked for unconsolidated joint
venture
    
    
    
    
    
    
    7,957Cash acquired
    
    $
    
    
    
    $
    8,435
 The accompanying notes are an integral part of these statements.
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THE GREENBRIER COMPANIES, INC .
 Notes to Condensed 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
   5




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THE GREENBRIER COMPANIES, INC .
 (In thousands, except per share amounts)
 ProformaSix Months EndedFebruary 28,2005Revenue
    
    $
    527,849Net earnings
    
    $
    9,315Basic earnings per share
    
    $
    0.62Diluted earnings per share
    
    $
    0.60
   Note 3  Inventories
 (In thousands)
 February 28, 2006
    
    
    August 31, 2005Manufacturing supplies and raw materials
    
    $
    37,645
    
    
    $
    33,653Work-in-process
    
    
    84,644
    
    
    
    91,637Lower of cost or market adjustment
    
    
    (3,645
    )
    
    
    (3,592
    )$
    118,644
    
    
    $
    121,698
 Note 4  Warranty Accruals
   (In thousands)
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Balance at beginning of period
    
    $
    14,942
    
    
    $
    13,718
    
    
    $
    15,037
    
    
    $
    12,691Charged to cost of revenue
    
    
    (1,011
    )
    
    
    939
    
    
    
    (85
    )
    
    
    1,956Payments
    
    
    (2,337
    )
    
    
    (705
    )
    
    
    (3,398
    )
    
    
    (1,777
    )Currency translation effect
    
    
    266
    
    
    
    29
    
    
    
    306
    
    
    
    1,111Acquisition
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    168Balance at end of period
    
    $
    11,860
    
    
    $
    14,149
    
    
    $
    11,860
    
    
    $
    14,149
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THE GREENBRIER COMPANIES, INC .
 Note 5  Notes Payable
 (In thousands)
 February 28,
    
    
    August 31,2006
    
    
    2005Senior unsecured notes
    
    $
    235,000
    
    
    $
    175,000Term loans
    
    
    35,430
    
    
    
    39,479Other
    
    
    64
    
    
    
    156$
    270,494
    
    
    $
    214,635
 3 8 th th
    7




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THE GREENBRIER COMPANIES, INC.
  (In thousands)
 Year Ending August 31,2006 (Remaining six months)
    
    $
    8,8392007
    
    
    4,4372008
    
    
    3,8922009
    
    
    4,0782010
    
    
    5,247Thereafter
    
    
    244,001$
    270,494
 Note 6  Comprehensive Income
  (In thousands)
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Net earnings
    
    $
    8,563
    
    
    $
    4,802
    
    
    $
    16,580
    
    
    $
    10,192Reclassification of
derivative
financial
instruments
recognized in net
earnings (net of
tax)
    
    
    (767
    )
    
    
    (1,763
    )
    
    
    (2,018
    )
    
    
    (2,716
    )Unrealized gain on
derivative
financial
instruments (net of
tax)
    
    
    698
    
    
    
    1,649
    
    
    
    1,621
    
    
    
    7,502Foreign currency
translation
adjustment (net of
tax)
    
    
    851
    
    
    
    804
    
    
    
    1,478
    
    
    
    3,268Comprehensive income
    
    $
    9,345
    
    
    $
    5,492
    
    
    $
    17,661
    
    
    $
    18,246
  (In thousands)
 Unrealized Gains
    
    
    Foreign Currency
    
    
    Accumulated Other(Losses) on Derivative
    
    
    Translation
    
    
    Comprehensive IncomeFinancial Instruments
    
    
    Adjustment
    
    
    (Loss)Balance, August 31, 2005
    
    $
    1,241
    
    
    $
    (1,952
    )
    
    $
    (711
    )Six month activity
    
    
    (397
    )
    
    
    1,478
    
    
    
    1,081Balance, February 28, 2006
    
    $
    844
    
    
    $
    (474
    )
    
    $
    370
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THE GREENBRIER COMPANIES, INC.
 Note 7  Earnings Per Share
  (In thousands)
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Weighted average basic common shares outstanding
    
    
    15,655
    
    
    
    14,954
    
    
    
    15,583
    
    
    
    14,924Dilutive effect of employee stock options
    
    
    256
    
    
    
    619
    
    
    
    297
    
    
    
    618Weighted average diluted common shares outstanding
    
    
    15,911
    
    
    
    15,573
    
    
    
    15,880
    
    
    
    15,542
  Note 8  Stock Based Compensation
 Accounting for Stock Issued
to Employees
 (In thousands, except per share amounts)
 Three Months
    
    
    Six MonthsEnded
    
    
    EndedFebruary 28, 2005Net earnings, as reported
    
    $
    4,802
    
    
    $
    10,192Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of tax (1)
    
    
    (35
    )
    
    
    (83
    )Net earnings, pro forma
    
    $
    4,767
    
    
    $
    10,109Basic earnings per shareAs reported
    
    $
    0.32
    
    
    $
    0.68Pro forma
    
    $
    0.32
    
    
    $
    0.68Diluted earnings per shareAs reported
    
    $
    0.31
    
    
    $
    0.66Pro forma
    
    $
    0.31
    
    
    $
    0.65
 
 (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
   (In thousands)
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue:Manufacturing
    
    $
    227,127
    
    
    $
    254,299
    
    
    $
    457,521
    
    
    $
    455,236Leasing & services
    
    
    34,307
    
    
    
    23,647
    
    
    
    59,981
    
    
    
    45,124Intersegment eliminations
    
    
    (25,220
    )
    
    
    (23,033
    )
    
    
    (94,926
    )
    
    
    (27,399
    )$
    236,214
    
    
    $
    254,913
    
    
    $
    422,576
    
    
    $
    472,961Margin:Manufacturing
    
    $
    23,562
    
    
    $
    16,012
    
    
    $
    45,127
    
    
    $
    33,547Leasing & services
    
    
    16,621
    
    
    
    10,535
    
    
    
    27,949
    
    
    
    17,806$
    40,183
    
    
    $
    26,547
    
    
    $
    73,076
    
    
    $
    51,353
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THE GREENBRIER COMPANIES, INC.
 Note 11  Commitments and Contingencies
          11




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THE GREENBRIER COMPANIES, INC.
         12




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




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THE GREENBRIER COMPANIES, INC.
  (In thousands, unaudited)
 CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    45,997
    
    
    $
    94
    
    
    $
    5,574
    
    
    $
    
    
    
    $
    51,665Restricted cash
    
    
    
    
    
    
    
    
    
    
    1,535
    
    
    
    
    
    
    
    1,535Accounts and notes receivable
    
    
    49,388
    
    
    
    28,829
    
    
    
    23,738
    
    
    
    212
    
    
    
    102,167Inventories
    
    
    
    
    
    
    76,786
    
    
    
    41,858
    
    
    
    
    
    
    
    118,644Railcars held for sale
    
    
    
    
    
    
    79,225
    
    
    
    4,682
    
    
    
    (696
    )
    
    
    83,211Equipment on operating leases
    
    
    
    
    
    
    252,992
    
    
    
    
    
    
    
    (2,018
    )
    
    
    250,974Investment in direct finance leases
    
    
    
    
    
    
    5,361
    
    
    
    
    
    
    
    
    
    
    
    5,361Property, plant and equipment
    
    
    2
    
    
    
    54,141
    
    
    
    22,730
    
    
    
    
    
    
    
    76,873Other
    
    
    335,072
    
    
    
    24,206
    
    
    
    3,001
    
    
    
    (333,868
    )
    
    
    28,411$
    430,459
    
    
    $
    521,634
    
    
    $
    103,118
    
    
    $
    (336,370
    )
    
    $
    718,841LIABILITIES AND STOCKHOLDERS EQUITYRevolving notes
    
    $
    
    
    
    $
    
    
    
    $
    18,099
    
    
    $
    
    
    
    $
    18,099Accounts payable and accrued
liabilities
    
    
    (8,915
    )
    
    
    146,003
    
    
    
    34,720
    
    
    
    212
    
    
    
    172,020Participation
    
    
    
    
    
    
    10,701
    
    
    
    
    
    
    
    
    
    
    
    10,701Deferred income taxes
    
    
    1,360
    
    
    
    35,695
    
    
    
    (1,248
    )
    
    
    (467
    )
    
    
    35,340Deferred revenue
    
    
    1,319
    
    
    
    5,980
    
    
    
    2,632
    
    
    
    
    
    
    
    9,931Notes payable
    
    
    242,512
    
    
    
    14,506
    
    
    
    13,476
    
    
    
    
    
    
    
    270,494Subordinated debt
    
    
    
    
    
    
    6,111
    
    
    
    
    
    
    
    
    
    
    
    6,111Minority interest
    
    
    
    
    
    
    (88
    )
    
    
    
    
    
    
    88
    
    
    
    STOCKHOLDERS EQUITY
    
    
    194,183
    
    
    
    302,726
    
    
    
    35,439
    
    
    
    (336,203
    )
    
    
    196,145$
    430,459
    
    
    $
    521,634
    
    
    $
    103,118
    
    
    $
    (336,370
    )
    
    $
    718,841
 14




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands, unaudited)
 CombinedCombined
    
    
    Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenueManufacturing
    
    $
    11,250
    
    
    $
    132,813
    
    
    $
    57,968
    
    
    $
    6,891
    
    
    $
    208,922Leasing & services
    
    
    1,668
    
    
    
    26,869
    
    
    
    
    
    
    
    (1,245
    )
    
    
    27,29212,918
    
    
    
    159,682
    
    
    
    57,968
    
    
    
    5,646
    
    
    
    236,214Cost of revenueManufacturing
    
    
    10,260
    
    
    
    113,290
    
    
    
    55,433
    
    
    
    6,377
    
    
    
    185,360Leasing & services
    
    
    
    
    
    
    10,687
    
    
    
    
    
    
    
    (16
    )
    
    
    10,67110,260
    
    
    
    123,977
    
    
    
    55,433
    
    
    
    6,361
    
    
    
    196,031Margin
    
    
    2,658
    
    
    
    35,705
    
    
    
    2,535
    
    
    
    (715
    )
    
    
    40,183Other costsSelling and administrative
    
    
    4,202
    
    
    
    10,499
    
    
    
    2,559
    
    
    
    
    
    
    
    17,260Interest and foreign exchange
    
    
    6,107
    
    
    
    1,859
    
    
    
    434
    
    
    
    (1,388
    )
    
    
    7,01210,309
    
    
    
    12,358
    
    
    
    2,993
    
    
    
    (1,388
    )
    
    
    24,272Earnings (loss) before income taxes,
minority interest and equity in
earnings
(loss) of unconsolidated subsidiaries
    
    
    (7,651
    )
    
    
    23,347
    
    
    
    (458
    )
    
    
    673
    
    
    
    15,911Income tax (expense) benefit
    
    
    3,139
    
    
    
    (9,863
    )
    
    
    (475
    )
    
    
    (267
    )
    
    
    (7,466
    )(4,512
    )
    
    
    13,484
    
    
    
    (933
    )
    
    
    406
    
    
    
    8,445Minority interest
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    (21
    )
    
    
    Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    13,075
    
    
    
    118
    
    
    
    
    
    
    
    (13,075
    )
    
    
    118Net earnings (loss)
    
    $
    8,563
    
    
    $
    13,623
    
    
    $
    (933
    )
    
    $
    (12,690
    )
    
    $
    8,563
 15




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands, unaudited)
 CombinedCombined
    
    
    Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenueManufacturing
    
    $
    11,250
    
    
    $
    262,930
    
    
    $
    133,144
    
    
    $
    (33,806
    )
    
    $
    373,518Leasing & services
    
    
    2,656
    
    
    
    48,374
    
    
    
    
    
    
    
    (1,972
    )
    
    
    49,05813,906
    
    
    
    311,304
    
    
    
    133,144
    
    
    
    (35,778
    )
    
    
    422,576Cost of revenueManufacturing
    
    
    10,207
    
    
    
    225,163
    
    
    
    126,222
    
    
    
    (33,201
    )
    
    
    328,391Leasing & services
    
    
    
    
    
    
    21,142
    
    
    
    
    
    
    
    (33
    )
    
    
    21,10910,207
    
    
    
    246,305
    
    
    
    126,222
    
    
    
    (33,234
    )
    
    
    349,500Margin
    
    
    3,699
    
    
    
    64,999
    
    
    
    6,922
    
    
    
    (2,544
    )
    
    
    73,076Other costsSelling and administrative
    
    
    8,338
    
    
    
    20,364
    
    
    
    4,242
    
    
    
    
    
    
    
    32,944Interest and foreign exchange
    
    
    10,510
    
    
    
    2,804
    
    
    
    513
    
    
    
    (2,385
    )
    
    
    11,44218,848
    
    
    
    23,168
    
    
    
    4,755
    
    
    
    (2,385
    )
    
    
    44,386Earnings (loss) before income taxes,
minority interest and equity in
earnings
(loss) of unconsolidated subsidiaries
    
    
    (15,149
    )
    
    
    41,831
    
    
    
    2,167
    
    
    
    (159
    )
    
    
    28,690Income tax (expense) benefit
    
    
    6,062
    
    
    
    (17,364
    )
    
    
    (1,166
    )
    
    
    68
    
    
    
    (12,400
    )(9,087
    )
    
    
    24,467
    
    
    
    1,001
    
    
    
    (91
    )
    
    
    16,290Minority interest
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    24
    
    
    
    Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    25,667
    
    
    
    290
    
    
    
    
    
    
    
    (25,667
    )
    
    
    290Net earnings (loss)
    
    $
    16,580
    
    
    $
    24,733
    
    
    $
    1,001
    
    
    $
    (25,734
    )
    
    $
    16,580
 16




---



##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands, unaudited)
 Combined
    
    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net earnings (loss)
    
    $
    16,580
    
    
    $
    24,733
    
    
    $
    1,001
    
    
    $
    (25,734
    )
    
    $
    16,580Adjustments to reconcile net earnings to
net cash provided by (used in)
operating activities:Deferred income taxes
    
    
    408
    
    
    
    4,134
    
    
    
    (734
    )
    
    
    (67
    )
    
    
    3,741Tax benefit of options exercised and
restricted stock awards dividends
    
    
    1,299
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,299Depreciation and amortization
    
    
    341
    
    
    
    10,826
    
    
    
    1,621
    
    
    
    (32
    )
    
    
    12,756Gain on sales of equipment
    
    
    
    
    
    
    (2,808
    )
    
    
    
    
    
    
    (4
    )
    
    
    (2,812
    )Other
    
    
    
    
    
    
    58
    
    
    
    16
    
    
    
    (26
    )
    
    
    48Decrease (increase) in assetsAccounts and notes receivable
    
    
    (22,063
    )
    
    
    46,716
    
    
    
    (2,792
    )
    
    
    (168
    )
    
    
    21,693Inventories
    
    
    
    
    
    
    324
    
    
    
    4,924
    
    
    
    
    
    
    
    5,248Railcars held for sale
    
    
    
    
    
    
    (49,134
    )
    
    
    1,180
    
    
    
    98
    
    
    
    (47,856
    )Other
    
    
    (59,335
    )
    
    
    27,942
    
    
    
    137
    
    
    
    30,303
    
    
    
    (953
    )Increase (decrease) in liabilitiesAccounts payable and accrued liabilities
    
    
    (18,501
    )
    
    
    1,326
    
    
    
    (8,019
    )
    
    
    126
    
    
    
    (25,068
    )Participation
    
    
    
    
    
    
    (11,199
    )
    
    
    
    
    
    
    
    
    
    
    (11,199
    )Deferred revenue
    
    
    (78
    )
    
    
    593
    
    
    
    2,643
    
    
    
    
    
    
    
    3,158Net cash provided by (used in) operating
activities
    
    
    (81,349
    )
    
    
    53,511
    
    
    
    (23
    )
    
    
    4,496
    
    
    
    (23,365
    )Cash flows from investing activities:Principal payments received under
direct finance leases
    
    
    
    
    
    
    1,317
    
    
    
    
    
    
    
    
    
    
    
    1,317Proceeds from sales of equipment
    
    
    
    
    
    
    8,793
    
    
    
    
    
    
    
    
    
    
    
    8,793Investment in and net advances to
unconsolidated subsidiaries
    
    
    
    
    
    
    216
    
    
    
    
    
    
    
    
    
    
    
    216Increase in restricted cash
    
    
    
    
    
    
    
    
    
    
    (1,442
    )
    
    
    
    
    
    
    (1,442
    )Capital expenditures
    
    
    
    
    
    
    (60,090
    )
    
    
    (1,633
    )
    
    
    99
    
    
    
    (61,624
    )Net cash provided by (used in) investing
activities
    
    
    
    
    
    
    (49,764
    )
    
    
    (3,075
    )
    
    
    99
    
    
    
    (52,740
    )Cash flows from financing activitiesChanges in revolving notes
    
    
    
    
    
    
    
    
    
    
    5,108
    
    
    
    
    
    
    
    5,108Proceeds from notes payable
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000Repayments of notes payable
    
    
    (560
    )
    
    
    (3,265
    )
    
    
    (451
    )
    
    
    
    
    
    
    (4,276
    )Repayments of subordinated debt
    
    
    
    
    
    
    (2,507
    )
    
    
    
    
    
    
    
    
    
    
    (2,507
    )Dividends
    
    
    (2,495
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,495
    )Stock options exercised
    
    
    3,622
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,622Purchase of subsidiarys shares subject
to mandatory redemption
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,636
    )
    
    
    (4,636
    )Net cash provided by (used in)
financing activities
    
    
    60,567
    
    
    
    (5,772
    )
    
    
    4,657
    
    
    
    (4,636
    )
    
    
    54,816Effect of exchange rate changes
    
    
    19
    
    
    
    66
    
    
    
    (335
    )
    
    
    
    
    
    
    (250
    )Decrease in cash and cash equivalents
    
    
    (20,763
    )
    
    
    (1,959
    )
    
    
    1,224
    
    
    
    (41
    )
    
    
    (21,539
    )Cash and cash equivalentsBeginning of period
    
    
    66,760
    
    
    
    2,053
    
    
    
    4,350
    
    
    
    41
    
    
    
    73,204End of period
    
    $
    45,997
    
    
    $
    94
    
    
    $
    5,574
    
    
    $
    
    
    
    $
    51,665
 17




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined
    
    
    Non-Guarantor
    
    
    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
 18




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined
    
    
    Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenueManufacturing
    
    $
    27,436
    
    
    $
    127,794
    
    
    $
    85,549
    
    
    $
    (6,971
    )
    
    $
    233,808Leasing & services
    
    
    1
    
    
    
    21,422
    
    
    
    
    
    
    
    (318
    )
    
    
    21,10527,437
    
    
    
    149,216
    
    
    
    85,549
    
    
    
    (7,289
    )
    
    
    254,913Cost of revenueManufacturing
    
    
    25,776
    
    
    
    117,797
    
    
    
    81,000
    
    
    
    (6,777
    )
    
    
    217,796Leasing & services
    
    
    
    
    
    
    10,588
    
    
    
    
    
    
    
    (18
    )
    
    
    10,57025,776
    
    
    
    128,385
    
    
    
    81,000
    
    
    
    (6,795
    )
    
    
    228,366Margin
    
    
    1,661
    
    
    
    20,831
    
    
    
    4,549
    
    
    
    (494
    )
    
    
    26,547Other costsSelling and administrative
    
    
    3,854
    
    
    
    8,002
    
    
    
    2,188
    
    
    
    
    
    
    
    14,044Interest and foreign exchange
    
    
    900
    
    
    
    2,084
    
    
    
    2,030
    
    
    
    (719
    )
    
    
    4,2954,754
    
    
    
    10,086
    
    
    
    4,218
    
    
    
    (719
    )
    
    
    18,339Earnings (loss) before income taxes,
minority interest and equity in
earnings
(loss) of unconsolidated subsidiaries
    
    
    (3,093
    )
    
    
    10,745
    
    
    
    331
    
    
    
    225
    
    
    
    8,208Income tax (expense) benefit
    
    
    1,248
    
    
    
    (4,719
    )
    
    
    162
    
    
    
    (88
    )
    
    
    (3,397
    )(1,845
    )
    
    
    6,026
    
    
    
    493
    
    
    
    137
    
    
    
    4,811Minority interest
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    (3
    )
    
    
    Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    6,647
    
    
    
    (9
    )
    
    
    
    
    
    
    (6,647
    )
    
    
    (9
    )Net earnings (loss)
    
    $
    4,802
    
    
    $
    6,020
    
    
    $
    493
    
    
    $
    (6,513
    )
    
    $
    4,802
 19




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined
    
    
    Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenueManufacturing
    
    $
    40,610
    
    
    $
    223,665
    
    
    $
    176,934
    
    
    $
    (7,004
    )
    
    $
    434,205Leasing & services
    
    
    317
    
    
    
    39,321
    
    
    
    
    
    
    
    (882
    )
    
    
    38,75640,927
    
    
    
    262,986
    
    
    
    176,934
    
    
    
    (7,886
    )
    
    
    472,961Cost of revenueManufacturing
    
    
    38,001
    
    
    
    202,527
    
    
    
    166,907
    
    
    
    (6,777
    )
    
    
    400,658Leasing & services
    
    
    
    
    
    
    20,987
    
    
    
    
    
    
    
    (37
    )
    
    
    20,95038,001
    
    
    
    223,514
    
    
    
    166,907
    
    
    
    (6,814
    )
    
    
    421,608Margin
    
    
    2,926
    
    
    
    39,472
    
    
    
    10,027
    
    
    
    (1,072
    )
    
    
    51,353Other costsSelling and administrative
    
    
    6,616
    
    
    
    14,924
    
    
    
    4,576
    
    
    
    
    
    
    
    26,116Interest and foreign exchange
    
    
    1,671
    
    
    
    3,888
    
    
    
    3,111
    
    
    
    (1,315
    )
    
    
    7,3558,287
    
    
    
    18,812
    
    
    
    7,687
    
    
    
    (1,315
    )
    
    
    33,471Earnings (loss) before income taxes,
minority interest and equity in
earnings
(loss) of unconsolidated subsidiaries
    
    
    (5,361
    )
    
    
    20,660
    
    
    
    2,340
    
    
    
    243
    
    
    
    17,882Income tax (expense) benefit
    
    
    2,338
    
    
    
    (8,895
    )
    
    
    (301
    )
    
    
    (93
    )
    
    
    (6,951
    )(3,023
    )
    
    
    11,765
    
    
    
    2,039
    
    
    
    150
    
    
    
    10,931Minority interest
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    (3
    )
    
    
    Equity in earnings (loss) of
unconsolidated subsidiaries
    
    
    13,215
    
    
    
    (89
    )
    
    
    
    
    
    
    (13,865
    )
    
    
    (739
    )Net earnings (loss)
    
    $
    10,192
    
    
    $
    11,679
    
    
    $
    2,039
    
    
    $
    (13,718
    )
    
    $
    10,192
 20




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 (In thousands)
 CombinedCombined
    
    
    Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net earnings (loss)
    
    $
    10,192
    
    
    $
    11,679
    
    
    $
    2,039
    
    
    $
    (13,718
    )
    
    $
    10,192Adjustments to reconcile net earnings to
net cash provided by (used in)
operating activities:Deferred income taxes
    
    
    1,851
    
    
    
    (2,399
    )
    
    
    (132
    )
    
    
    93
    
    
    
    (587
    )Tax benefit of stock options exercised
    
    
    1,488
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,488Depreciation and amortization
    
    
    39
    
    
    
    9,393
    
    
    
    1,297
    
    
    
    (36
    )
    
    
    10,693Gain on sales of equipment
    
    
    
    
    
    
    (3,160
    )
    
    
    
    
    
    
    (358
    )
    
    
    (3,518
    )Other
    
    
    
    
    
    
    35
    
    
    
    864
    
    
    
    2
    
    
    
    901Decrease (increase) in assetsAccounts and notes receivable
    
    
    11,525
    
    
    
    (63,563
    )
    
    
    2,705
    
    
    
    116
    
    
    
    (49,217
    )Inventories
    
    
    
    
    
    
    8,562
    
    
    
    (4,091
    )
    
    
    
    
    
    
    4,471Railcars held for sale
    
    
    
    
    
    
    7,262
    
    
    
    824
    
    
    
    152
    
    
    
    8,238Other
    
    
    (13,545
    )
    
    
    (1,447
    )
    
    
    410
    
    
    
    13,865
    
    
    
    (717
    )Increase (decrease) in liabilitiesAccounts payable and accrued
liabilities
    
    
    (11,173
    )
    
    
    13,116
    
    
    
    (19,896
    )
    
    
    (116
    )
    
    
    (18,069
    )Participation
    
    
    
    
    
    
    (16,055
    )
    
    
    
    
    
    
    
    
    
    
    (16,055
    )Deferred revenue
    
    
    1,552
    
    
    
    41
    
    
    
    86
    
    
    
    
    
    
    
    1,679Net cash provided by (used in) operating
activities
    
    
    1,929
    
    
    
    (36,536
    )
    
    
    (15,894
    )
    
    
    
    
    
    
    (50,501
    )Cash flows from investing activities:Principal payments received under
direct finance leases
    
    
    
    
    
    
    3,285
    
    
    
    
    
    
    
    
    
    
    
    3,285Proceeds from sales of equipment
    
    
    
    
    
    
    20,005
    
    
    
    
    
    
    
    
    
    
    
    20,005Investment in and net advances to
unconsolidated subsidiaries
    
    
    
    
    
    
    (34
    )
    
    
    
    
    
    
    
    
    
    
    (34
    )Acquisition of joint venture interest
    
    
    
    
    
    
    8,435
    
    
    
    
    
    
    
    
    
    
    
    8,435Decrease in restricted cash
    
    
    
    
    
    
    
    
    
    
    662
    
    
    
    
    
    
    
    662Capital expenditures
    
    
    
    
    
    
    (33,375
    )
    
    
    (1,469
    )
    
    
    
    
    
    
    (34,844
    )Net cash used in investing activities
    
    
    
    
    
    
    (1,684
    )
    
    
    (807
    )
    
    
    
    
    
    
    (2,491
    )Cash flows from financing activitiesChanges in revolving notes
    
    
    
    
    
    
    45,750
    
    
    
    17,251
    
    
    
    
    
    
    
    63,001Repayments of notes payable
    
    
    (515
    )
    
    
    (7,919
    )
    
    
    (473
    )
    
    
    
    
    
    
    (8,907
    )Repayments of subordinated debt
    
    
    
    
    
    
    (4,369
    )
    
    
    
    
    
    
    
    
    
    
    (4,369
    )Dividends
    
    
    (1,793
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,793
    )Proceeds from exercise of stock options
    
    
    652
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    652Net cash provided by (used in)
financing activities
    
    
    (1,656
    )
    
    
    33,462
    
    
    
    16,778
    
    
    
    
    
    
    
    48,584Effect of exchange rate changes
    
    
    (273
    )
    
    
    1,160
    
    
    
    3,474
    
    
    
    
    
    
    
    4,361Increase(decrease) in cash and cash
equivalents
    
    
    
    
    
    
    (3,598
    )
    
    
    3,551
    
    
    
    
    
    
    
    (47
    )Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    10,454
    
    
    
    1,656
    
    
    
    
    
    
    
    12,110End of period
    
    $
    
    
    
    $
    6,856
    
    
    $
    5,207
    
    
    $
    
    
    
    $
    12,063
 21




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
     3 8
  Critical Accounting Policies
  22




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
  Income taxes
 Maintenance obligations
 Warranty accruals
 Results of Operations
 Three Months Ended February 28, 2006 Compared to Three Months Ended February 28, 2005
 Overview
  Manufacturing Segment
  23




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
   Leasing & Services Segment
   Other Costs
    24




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 Six Months Ended February 28, 2006 Compared to Six Months Ended February 28, 2005
 Manufacturing Segment
    Leasing & Services Segment
   Equity in Earnings (Loss) of Unconsolidated Subsidiaries
   Other Costs
  25




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
   Income Tax
  Liquidity and Capital Resources
        26




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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;
    
    ability to obtain adequate certification and licensing of products; and
 27




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
    
    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;
    
    ability to adequately pass through steel price increases, scrap surcharges and other commodity price fluctuations and
their related impact on railcar demand and margin;
    
    changes in product mix and the mix between the manufacturing and leasing & services segments;
    
    ability to deliver railcars in accordance with customer specifications;
    
    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 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 manufactured railcars resulting in increased warranty costs or litigation;
    
    resolution or outcome of investigations or pending 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.
 28




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Foreign Currency Exchange Risk
   Interest Rate Risk
  29




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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
  30




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 6. Exhibits
 (a)
    
    List of Exhibits:
 3.1
    
    Articles of Incorporation the Company3.2
    
    Articles of Merger amending the Articles of Incorporation of the Company3.3
    
    Bylaws of the Company, as amended January 11, 200631.1
    
    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.
 31




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##### Table of Contents



THE GREENBRIER COMPANIES, INC.
 
 SIGNATURES
  THE GREENBRIER COMPANIES, INC.Date: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedSenior Vice President andChief Financial Officer(Principal Financial and Accounting Officer)
 32




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##### Table of Contents



SIGNATURES
  AUTOSTACK COMPANY LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. FurmanWilliam A. Furman
    
    Chief Executive Officer and Manager(Principal Executive Officer)/s/ Joseph K. WilstedJoseph K. Wilsted
    
    Vice President(Principal Financial and Accounting Officer)




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##### Table of Contents



SIGNATURES
  GREENBRIER-CONCARRIL, LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    Chairman of the Board of DirectorsWilliam A. Furman
    
    (Principal Executive Officer)/s/ Joseph K. Wilsted
    
    Vice PresidentJoseph K. Wilsted
    
    (Principal Financial and Accounting Officer)/s/ L. Clark Wood
    
    DirectorL. Clark Wood/s/ Robin Bisson
    
    DirectorRobin Bisson




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##### Table of Contents



SIGNATURES
  GREENBRIER LEASING COMPANY, LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    Chief Executive Officer and ManagerWilliam A. Furman
    
    (Principal Executive Officer)/s/ Joseph K. Wilsted
    
    Vice PresidentJoseph K. Wilsted
    
    (Principal Financial and Accounting Officer)




---



##### Table of Contents



SIGNATURES
  GREENBRIER LEASING, L.P.Dated: April 5, 2006
    
    
    
    By: Greenbrier Management Services LLCGeneral PartnerBy: Greenbrier Leasing Company LLCSole Member and ManagerBy:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    Principal Executive OfficerWilliam A. Furman/s/ Joseph K. Wilsted
    
    Principal Financial and Accounting OfficerJoseph K. Wilsted




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##### Table of Contents



SIGNATURES
  GREENBRIER LEASING LIMITEDPARTNER, LLCDated: April 5, 2006
    
    
    
    By: Greenbrier Leasing Company LLCSole Member and ManagerBy:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    Principal Executive OfficerWilliam A. Furman/s/ Joseph K. Wilsted
    
    Principal Financial and Accounting OfficerJoseph K. Wilsted




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##### Table of Contents



SIGNATURES
  GREENBRIER MANAGEMENT SERVICES LLCDated: April 5, 2006
    
    
    
    By: Greenbrier Leasing Company LLCSole Member and ManagerBy:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    Principal Executive OfficerWilliam A. Furman/s/ Joseph K. Wilsted
    
    Principal Financial and Accounting OfficerJoseph K. Wilsted




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##### Table of Contents



SIGNATURES
  GREENBRIER RAILCAR LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    ManagerWilliam A. Furman
    
    (Principal Executive Officer)/s/ Joseph K. Wilsted
    
    Vice PresidentJoseph K. Wilsted
    
    (Principal Financial and Accounting Officer)




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##### Table of Contents



SIGNATURES
  GUNDERSON LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    ManagerWilliam A. Furman
    
    (Principal Executive Officer)/s/ Joseph K. Wilsted
    
    Vice PresidentJoseph K. Wilsted
    
    (Principal Financial and Accounting Officer)




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##### Table of Contents



SIGNATURES
  GUNDERSON MARINE LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    ManagerWilliam A. Furman
    
    (Principal Executive Officer)/s/ Joseph K. Wilsted
    
    Vice PresidentJoseph K. Wilsted
    
    (Principal Financial and Accounting Officer)




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##### Table of Contents



SIGNATURES
  GUNDERSON RAIL SERVICES LLCDated: April 5, 2006
    
    
    
    By:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    ManagerWilliam A. Furman
    
    (Principal Executive Officer)/s/ Joseph K. Wilsted
    
    Vice PresidentJoseph K. Wilsted
    
    (Principal Financial and Accounting Officer)




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##### Table of Contents



SIGNATURES
  GUNDERSON SPECIALTY PRODUCTS LLCDated: April 5, 2006
    
    
    
    By: Gunderson LLC, Sole Member and Sole ManagerBy:
    
    /s/ Joseph K. WilstedJoseph K. WilstedVice President
  Signature
    
    Title/s/ William A. Furman
    
    Principal Executive OfficerWilliam A. Furman/s/
Joseph K. Wilsted
    
    Principal Financial and Accounting OfficerJoseph K. Wilsted