A：The conference call is designed to discuss the company's first quarter performance and outlook for fiscal 2026, as well as to address any questions from participants.

A：The key executives participating in the conference call include Lori Thurius (CEO and President), Brian Comstock (Executive Vice President and President of the Americas), and Michael Don (Senior Vice President and CFO).

A：'Recurring revenue' refers to leasing and fleet management revenue, excluding the impact of syndication transactions.

A：Travis Williams Graham Breyer is the new head of investor relations at Greenbrier, having joined the company this week. His background includes experience in buy-side and sell-side analysis, and he previously led the IR function in-house at a publicly traded industrial tool manufacturing company.

A：Greenbrier's first quarter performance was marked by disciplined execution and the resilience of its business, which demonstrates the strength of its integrated manufacturing and leasing model, continued progress on operating efficiency initiatives, and focused action on controllable factors. It resulted in meaningful earnings, strong liquidity, and progress on long-term strategic priorities.

A：The challenges in the market that are affecting the timing of new rail-car orders include customers' circumspect approach to capital investments due to evaluations of current freight volumes, ongoing trade policy considerations, and improving rail service that increases railroad velocity.

A：Trade and tariff policy remains an important consideration for Greenbrier's customers and the industry. Although policy considerations influence the timing of customer decisions, they do not change the long-term fundamentals of the railcar replacement cycle or Greenbrier's competitive position. The company stays engaged with customers and industry stakeholders and continues to win business in this evolving landscape.

A：Operationally, Greenbrier is taking proactive steps to align its manufacturing footprint with current demand levels. This includes adjusting production rates and headcount, particularly in Mexico, to focus on overhead optimization and operational excellence. In Europe, the company is executing restructuring and right-sizing initiatives to improve competitiveness and profitability.

A：The leasing and fleet management business at Greenbrier is providing stability and growth by continuing disciplined fleet construction and management. This business is an important source of recurring earnings and contributes to the company's cycle resilience.

A：Greenbrier's capital allocation strategy focuses on deploying capital where returns are strongest, maintaining balance sheet strength and liquidity, and returning capital to shareholders. The company opportunistically sold railcars from the fleet to recycle capital, contributing meaningfully to earnings and cash flow.

A：Greenbrier's operational performance in the first quarter included strengthening commercial activities and converting that into diversified high-quality orders. The company remained focused on order quality and backlog mix, receiving global orders for approximately 3700 railcars valued at roughly $550 million, with a diverse range of car types and higher average selling prices reflecting support for complex customer requirements. The backlog value remained relatively unchanged, with an ending backlog of approximately 16,300 units valued at about $2.2 billion.

A：The company's operating income was $61 million and the diluted EPS was $1.14.

A：Greenbrier's board declared a quarterly dividend of 32 cents per share, marking the 47th consecutive quarterly dividend, reflecting confidence in the business. During the first quarter, Greenbrier repurchased about 13 million of common stock under its existing authorization, with approximately $65 million available for future repurchases.

A：For fiscal 2026, Greenbrier's guidance includes new railcar deliveries of 17,500 to 20,500 units, revenue between $2.7 billion to $3.2 billion, an aggregate gross margin of 16% to 16.5%, an operating margin between 9% and 9.5%, and earnings per share of 375 to 475 Greenbrier's.

A：The company has pretty good visibility on manufacturing deliveries for the remainder of the year, with the strongest visibility historically in the summer months of June, July, and August. They expect opportunities for year-over-year growth in that period due to ramping down production last summer and increasing production for the next fiscal year.

A：Greenbrier does not see any impact from Venezuela at this point and believes its business will not be affected.

A：Lease rates for specialty cars like tank cars have been stable, and there is strong renewal activity. For more commoditized cars, lease rates have been pressured. Year-over-year renewals are seeing double-digit increases. On a sequential basis, lease rates have remained stable, and the company continues to see nice uplift in renewals that are coming up.

A：When there is moderated demand for new builds, it leads to existing equipment becoming more valuable and desired, which in turn adds to the renewal rates.

A：The company had about 100,000 cars up for renewal at the start of the fiscal year in September, and as of the speech, around 30% of those cars had been successfully renewed, indicating a positive trend.

A：The first quarter saw a large gain of approximately 18 million, which was more than the entire year's gain of the previous year. The speaker hints that the market conditions and opportunities being pursued could lead to even greater gains for the remainder of the year.

A：The company is active in the secondary market, looking for assets to add to their owned lease fleet for growth and for investments that are accretive to returns. They also focus on managing portfolio concentrations, assessing their current exposures and assets in the backlog, and being prepared to sell assets for gains when markets offer more than expected.

A：While the company does not provide an explicit number due to the active environment, they expect single-digit growth in the leasing fleet for the year, potentially higher depending on various opportunities that arise.

A：Tariffs have not had a significant financial impact on the business; however, the uncertainty they create has been a headwind, causing customers to delay commitments for new rail cars. The prices for rail cars have increased due to higher costs for steel, but the overall financial impact from tariffs is minimal.

A：The company is positive about any changes that make the rail industry stronger and facilitate more goods being transported off highways onto rail. They support industry efficiency and the shift towards a more effective circulatory system for the economy. They are prepared to deal with the process of mergers as they unfold.

A：The company is expecting around 4500 deliveries for the current quarter, which when annualized, would be at the lower end of the guidance. They anticipate taking production down in the second quarter and then raising it into the next year. There is a focus on addressing the 'white space' in the summer to get closer to the midpoint of the production guidance for the year. This involves managing headcount reductions as they work through the order book and scaling up for the robust part of the cycle.

A：The company is actively addressing the 'white space' by making plans to ramp up the back half of the year. Some of the headcount reductions are planned to be temporary, as they work through the order book and anticipate a more robust part of the cycle. They are also engaged in planning for specialty type cars and bringing people back to handle additional order activity in a mindful way, learning from past experiences to avoid quick ramps and utilize a more controlled approach.

A：The company has good visibility on production and order conversion for the remainder of the year, based on the assumption that the inquiries received will continue to translate into orders, which has shown improvement over the last few months. The trajectory is optimistic barring any unforeseen geopolitical events.

A：The company is focused on being mindful about how they bring people back and ramp up production. They aim to avoid the mistakes of the past by not trying to quickly scale up too fast but instead adopt a very controlled approach to ensure a mindful hiring process.

A：Manufacturing gross margin is not purely a function of production volume; it's also affected by mix and pricing. The company acknowledges that while volume does play a role, there are additional factors such as production components and the absorption of fixed costs that contribute to the overall margin.

A：The increase in production volume in the second half of the year is expected to result in a lift on margins, not just a revenue story. The exact impact will depend on current margin levels, but it is anticipated to be an improvement.

A：The sale of assets had a 30-cent impact on earnings per share, which was not initially reflected in the full-year guidance. However, this did not prompt a change to the original EPS guidance of $3.75 to $4.25 because the market conditions led to an opportunity that was taken. The company had assumed in constructing the guidance that some transactions would benefit EPS, and the sale of assets aligns with this assumption.

A：Asset sales were factored into the original target when constructing the guidance for the fiscal year. The company assumed there would be transactions that would benefit EPS and these asset sales are part of the normal course of business. While timing of specific transactions is difficult to predict, the company will continue to engage in transactions as they present themselves.

A：The significantly higher average sales price of the new cars is primarily driven by a number of units with higher ASVs, especially cars for specialty types of service. This is a growing market for the company and is a result of significant investment in innovation and R&D. Greenbrier is well-positioned to take advantage of this as markets develop, and the company is looking forward to continuing to build into this segment.

A：SG&A expenses have jumped to around 8.5%, which is similar to the 4th quarter but above the guidance range of 7.5%. There seems to be an extra 10 million in costs being mentioned, which may be a reference to a difference from the guidance or prior costs.

A：The original plan was to take out 30 million from year-over-year in SG&A expenses. The actual sequential reduction in the 4th quarter was about 11 million, which is within the expectations but slightly less than the guidance of 30 million.

A：G&A expenses are trending in line with expectations for the year, possibly up by a few million dollars but not significantly. However, currency adjustments, particularly from Mexico or Europe, have artificially changed how G&A is tracking without any significant impact from adding more people.

A：Currency adjustments, especially from Mexico or Europe, are causing some additional translation which is affecting how G&A expenses are tracking. However, there is no significant impact from adding more staff or growing GNA.

A：The expectation is for the minority interest and earnings from unconsolidated affiliates, primarily in Brazil, to be modestly positive throughout the year, which is expected to be accretive to earnings. Earnings or loss attributable to non-controlling interest pertain to the partners' share of earnings in Mexico and Europe and are expected to fluctuate based on activity levels.

A：The company does not typically provide quarterly guidance; however, they expect the back half of the year to be stronger than the first half.