GBX US Equity☆

Item 1A.RISK FACTORS

The following risks could materially and adversely affect our business, financial condition, operating results, liquidity and cash flows, prospects, and stock price. These risks do not identify all risks that we face; other factors, events, or uncertainties currently unknown to us or that we currently do not consider to present significant risks to our business or that emerge in the future could affect us adversely.

Risks Related to Our Business

The COVID-19 coronavirus pandemic, and the related decline in global economic activity, as well as governmental reaction to the pandemic could continue to negatively impact our business, liquidity and financial position, results of operations, stock price, and ability to convert backlog to revenue.

The COVID-19 pandemic has not yet been contained. We currently identify the following factors as the most significant risks to our business due to COVID-19, governmental actions, and economic conditions.

• The market price of our common stock may drop or remain volatile.

The longer the pandemic continues, the more likely that more of the foregoing risks will be realized and that other negative impacts on our business will occur, some of which we cannot now foresee.

Additionally, the reopening of the economy presents its own risks to our business. Mismatch of supply and demand, interruptions of supply lines, inefficient or overloaded logistics platforms, among other factors may cause the markets for the inputs to our business to fail to operate effectively or efficiently (including sectoral price inflation). There is no guarantee that we will be able to absorb fully such additional costs in the prices for our goods and services. Labor shortages in the geographies where we operate could prevent us from converting backlog to revenue. General inflation, including wage inflation, rises in interest rates, currency volatility as well as monetary, fiscal and policy interventions by national or regional governments in anticipation of or reaction to such events could have negative impacts on our

12

business by increasing our operating costs and our borrowing costs as well as decreasing the capital available for our customers to purchase our goods and services.

Equipment failures, technological failures, costs and inefficiencies associated with changing of production lines, or transfer of production between facilities, could lead to production, delivery, or service curtailments or shutdowns, loss of revenue or higher expenses.

We operate a substantial amount of equipment at our production facilities. An interruption in production capabilities or maintenance and repair capabilities at our facilities, as a result of equipment or technology failure, acts of nature, terrorism, costs and inefficiencies associated with changing of production lines or transfer of production between facilities, could reduce or prevent our production, delivery, service, or repair of our products and increase our costs and expenses. A halt of production at any of our manufacturing facilities could severely affect delivery times to our customers. Any significant delay in deliveries not otherwise contractually mitigated could result in cancellation of all or a portion of our orders, cause us to lose future sales, and negatively affect our reputation and our results of operations.

Shortagesof skilledlabor, increased labor costs, or failure to maintain good relations with our workforce could adverselyaffectour operations.

We depend on skilledlaborin all areas of our business.Some of our facilitiesarelocatedin areaswhere demandforskilledlaboroftenexceedssupply.Shortagesof sometypesof skilledlaborsuch as weldersand machineoperatorscouldrestrictour abilityto maintainor increase productionrates,leadto productioninefficienciesand increaseour laborcosts. Due to the competitive nature of the labor markets in which we operate and the cyclical nature of the railcar industry, the resulting employment cycle increases our risk of not being able to recruit, train and retain the employees we require at efficient costs and on reasonable terms, particularly when the economy expands, production rates are high or competition for such skilled labor increases. Additionally, we may develop an adverse relationship with our workforce or third party labor providers. We are a party to collective bargaining agreements with various labor unions at some of our operations. Disputes with regard to the terms and conditions of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers. We cannot be assured that our relations with our workforce will remain positive. If our workers were to engage in a strike, work stoppage or other slowdown, or other employees were to become unionized or the terms and conditions in future labor agreements were renegotiated, or if union representation is implemented at such sites and we are unable to agree with the union on reasonable employment terms, including wages, benefits, and work rules, we could experience a significant disruption of our operations and incur higher ongoing labor costs. Our costs to recruit, train and retain necessary, qualified employees may exceed our expectations. If we are unable to recruit, train and retain adequate numbers of qualified employees and third party labor providers on a timely basis or at a reasonable cost or on reasonable terms, our business and results of operations could be adversely affected.

We depend on our seniormanagementteamand otherkey employees,and significantattritionwithin our managementteamor unsuccessfulsuccessionplanning formembersof our seniormanagementteamand otherkey employeeswhoare at or nearing retirementage, could adverselyaffectour business.

Our successdependsin parton our abilityto attract,retainand motivateseniormanagementand other key employees.Achievingthisobjectivemaybe difficultdue to manyfactors,includingfluctuationsin global economicand industryconditions,competitors’hiringpractices,costreductionactivities,and theeffectivenessof our compensationprograms.Competitionforqualifiedpersonnelcan be veryintense.We mustcontinueto recruit, retainand motivateseniormanagementand otherkey employeessufficientto maintainour currentbusinessand supportour futureprojects and growth objectives.We arevulnerableto attritionamongour currentseniormanagementteamand other key employees.Many membersof our seniormanagementteamand otherkey employeesareator nearingretirement age. Ifwe areunsuccessfulin our successionplanningefforts,thecontinuityof our businessand resultsof operationscouldbe adverselyaffected. A lossof any such personnel,or theinabilityto recruitand retainqualifiedpersonnelin the future,couldhave an adverseeffecton our business,financialconditionand resultsof operations.

13

Fluctuationsin the availabilityand priceof inputs could have an adverseeffecton our abilityto manufactureand sellour productsprofitablyand could adverselyaffectour marginsand revenue.

A significantportionof our businessdependsupon theadequatesupplyof steel, other raw materials, and energyatcompetitiveprices. A smallnumberof suppliersfulfilla substantialamountof our requirements.The costof steeland allothermaterialsused in theproductionof our railcarsrepresentsmorethan halfof our directmanufacturingcostsperrailcarand in theproductionof our marinebargesrepresentsmore than 30% of our directmanufacturingcostspermarinebarge. Our cost of acquiring steel, components, and other raw materials, to manufacture our railcars and marine barges are impacted by tariffs. The lossof suppliersor theirinabilityto meetour price,quality,quantityand deliveryrequirementscouldhave an adverseeffecton our abilityto manufactureand sellour productson a cost-effectivebasis. If we are not able to purchase materials and energy at competitive prices, our ability to produce and sell our products on a cost effective basis could be adversely impacted which, in turn, could adversely affect our revenue and profitability. Our fixed-pricecontracts generally anticipatematerialpriceincreasesand surcharges. If we are unableto adjustour sellingpricesor have adequate protectionin our contractsagainstchangesin materialprices,our marginscould be adverselyaffected. Additionally, a portionof our Wheels, Repair& Parts businessesinvolvescrappingsteelpartsand theresultingrevenuefromsuch scrapsteelincreasesour marginsand revenues.When thepriceof scrapsteeldeclines,our revenuesand marginsin such businesses decrease.

Our business will suffer if we are unsuccessful in making, integrating, and maintaining acquisitions, joint ventures and other strategic investments.

We have acquired businesses and invested in or entered into joint ventures in past periods. We may in the future acquire other businesses or invest in or enter into joint ventures with other companies. Our failureto identifyfutureacquisition or joint venture opportunities, or to complete potential acquisitions or joint ventures on favorable terms,could hinder our abilityto grow our business. These transactions create risks such as:

14

In addition, we might need to issue additional equity securities, spend our cash, or incur debt, contingent liabilities, or amortization expenses related to intangible assets in connection with effecting an acquisition or joint venture, any of which could reduce our profitability and harm our business or only be available on unfavorable terms, if at all. In addition, valuations supporting our acquisitions and investments could change rapidly. We could determine that such valuations have experienced impairments or other-than-temporary declines in fair value, which could adversely impact our financial results.

Our backlogisnot necessarilyindicativeof the levelof our futurerevenues.

Our manufacturing backlog represents future production for our customers in various periods, and estimated potential revenue attributable to such production. Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms which may not occur. Some backlog is subject to certain conditions, including potential adjustment to prices due to changes in prevailing market prices, or due to lower prices for new orders accepted by us from other customers for similar cars on similar terms and conditions during relevant time periods. Our reported backlog may not be converted to revenue in any particular period and some of our contracts permit cancellations with limited compensation that would not replace lost revenue or margins. In addition, some customers may attempt to delay orders, cancel or modify a contract even if the contract does not allow for such cancellation or modification, and we may not be able to recover all revenue or earnings lost due to a breach of contract or a contract may be found to be unenforceable. The likelihood of cancellations, modifications, rejection and non-payment for our products generally increases during periods of market weakness. The timing of converting backlog to revenue is also materially impacted by our decision whether to lease railcars, sell railcars, or syndicate railcars with a lease attached to an investor. Actual revenue may not equal our anticipated revenues based on our backlog, and therefore, our backlog is not necessarily indicative of the level of our future revenues.

We derivea significantamount of our revenuefroma limitednumber of customers,the lossof or reductionof businessfromone or moreof which could have an adverseeffecton our business.

A significantportionof our revenueisgeneratedfroma few majorcustomers.Although we have some long-termcontractualrelationshipswith our majorcustomers,we cannotbe assuredthat we will continue to have good relations with our customers, or that our customerswill continueto purchase or lease our productsor services, or willcontinueto do so athistoricallevels, or will renew their existing contracts with us.A reductionin the purchasing or leasingof our products, a terminationof our servicesby one or moreof our majorcustomers, a decline in the financial condition of a major customer, or our failure to replace expiring customer contracts with new customer contracts on satisfactory termscould result in a loss of business and have an adverseeffecton our businessand operatingresults.

We relyon limitedsuppliersforcertaincomponentsand servicesneeded in our production.Ifwe are not able to procurespecialtycomponentsor serviceson commerciallyreasonabletermsor on a timelybasis,our business,financialconditionand resultsof operationswould be adverselyaffected.

Our manufacturingoperationsdepend in parton our abilityto obtaintimelydeliveriesof materials, componentsand servicesin acceptablequantitiesand qualityfromour suppliers.In 2021, the top ten suppliers for all inventory purchases accounted for approximately 47% of total purchases. The top supplier accounted for 18% of total inventory purchases in 2021. No other suppliers accounted for more than 10% of total inventory purchases. Certaincomponentsof our products,particularlyspecialized componentslikecastings,bolsters,trucks,wheelsand axels,and certainservices,such as liningcapabilities,are currentlyonly availablefroma limitednumberof suppliers.Ifany one or moreof our suppliersceaseto provideus with sufficientquantitiesof our componentsor servicesin a timelymanneror on termsacceptableto us, or ceaseto provideservicesor manufacturecomponents of acceptablequality, or go out of business, we couldincurdisruptionsor be limitedin our productionof our productsand we could have to seekalternativesourcesforthesecomponentsor services.

15

In addition,we areincreasingthenumberof componentsand serviceswe manufactureor provideourselves,directlyor throughjointventures.Ifwe arenot successfulatmanufacturing such componentsor providingsuch servicesor have productionproblemsaftertransitioningto self-produced supplies,we maynot be ableto replacesuch componentsor servicesfromthirdpartysuppliersin a timely manner.Any such disruptionin our supplyof specializedcomponentsand servicesor increasedcostsof those componentsor servicescouldharmour businessand adverselyaffectour resultsof operations.

The timingof our assetsalesand relatedrevenuerecognitioncould cause significantdifferencesin our quarterlyresultsand liquidity.

We maybuildproductsin anticipationof a customerorder,or lease railcars to a customerwith the aim of selling such railcars on lease to a thirdparty. In such cases, the lag between productionand saleresults in uneven recognition of revenue and earnings over time.Our production during any given period may be concentrated in relatively few contracts, intensifying the amplitude and irregularity of our revenue streams. The timing of recognizing revenue on a railcar is also materially impacted by our decision whether to lease the railcar to a lessee, sell the railcar, or syndicate the railcar with a lease attached to an investor. In addition,we periodicallysellrailcarsfromour own leasefleetand thetiming and volumeof such salesaredifficultto predict.As a result,comparisonsof our manufacturingrevenue, deliveries,quarterlynetgainon dispositionof equipment,incomeand liquiditybetweenquarterlyperiodswithin one yearand betweencomparableperiodsin differentyearsmaynot be meaningfuland shouldnot be reliedupon as indicatorsof our futureperformance.

We face risks related to cybersecurity threats and incidents that increase our costs and could disrupt our business and operations.

We regularly face attempts by others to gain unauthorized access through the Internet, or to introduce malicious software, to our information technology systems. Additionally, malicious hackers, state-sponsored organizations, terrorists, employees and third-party service providers, or intruders into our physical facilities may attempt to gain unauthorized access and corrupt the processes used to operate our businesses and to design and manufacture our products. We are also a target of malicious attackers who attempt to gain access to our network or those of our customers; steal proprietary information related to our business, products, employees, and customers; interrupt our systems and services or those of our customers; or demand ransom to return control of such systems and services. Such attempts are increasing in number and in technical sophistication, and if successful, expose us and the affected parties to risk of loss or misuse of proprietary or confidential information or disruptions of our business operations. Our information technology infrastructure also includes products and services provided by third parties, and these providers can experience breaches of their systems and products that affect the security of our systems and our proprietary or confidential information. Our reliance on information technology increases as working remotely increases among our employees.

Addressing cybersecurity threats and incidents, whether or not successful, could result in our incurring significant costs related to, for example, disruptions in our operations, rebuilding internal systems, implementing additional threat protection measures, defending against litigation, responding to regulatory inquiries or actions, paying damages, or taking other remedial steps with respect to third parties, as well as reputational harm. In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures. While we seek to detect and investigate unauthorized attempts and attacks against our network, products, and services, and to prevent their recurrence where practicable through changes to our internal processes and tools, we remain potentially vulnerable to additional known or unknown threats. In some instances, we, our customers, and the users of our products and services can be unaware of an incident or its magnitude and effects.

The theft, loss, or misuse of third party data collected, used, stored, or transferred by us to run our business could result in significantly increased business and security costs or costs related to defending legal claims. Global privacy legislation, enforcement, and policy activity in this area are rapidly expanding and creating a complex regulatory compliance environment. Costs to comply with and implement these privacy-related and data protection measures could be significant, and noncompliance could expose us to significant monetary penalties, damage to our reputation, and even criminal sanctions. Even our inadvertent failure to comply with federal, state, or international privacy-related or data-protection laws and regulations could result in audits, regulatory inquiries, or proceedings against us by governmental entities or other third parties.

16

Updates or changes to our informationtechnologysystemsmayresultin problemsthatcould negatively impactour business.

Wehaveinformationtechnologysystems,comprisinghardware,network,software,people,processesand otherinfrastructurethatareimportanttotheoperationofourbusinesses.Wecontinuetoevaluateandimplement upgradesandchangestoinformationtechnologysystemsthatsupportsubstantiallyallofouroperatingandfinancial functions.Wecouldexperienceproblemsinconnectionwithsuchimplementations,includingcompatibilityissues, trainingrequirements,higherthanexpectedimplementationcostsandotherintegrationchallengesanddelays.A significantproblemwithanimplementation,integrationwithothersystemsorongoingmanagementandoperation ofoursystemscouldnegativelyimpactourbusinessbydisruptingoperations.Suchaproblemcouldalsohavean adverseeffectonourabilitytogenerateandinterpretaccuratemanagementandfinancialreportsandother informationonatimelybasis,whichcouldhaveamaterialadverseeffectonourfinancialreportingsystemand internalcontrolsandadverselyaffectourabilitytomanageourbusiness.

A failureto designor manufactureproductsor technologiesor to achieve timelycertificationor market acceptanceof new productsor technologiescould have an adverseeffecton our profitability.

We continueto introducenew railcarproduct innovations and technologies. We occasionallyacceptordersprior to receivingrailcarcertificationor proving our abilityto manufacturea qualityproductthatmeetscustomer standards.We couldbe unableto successfullydesignor manufacturenew railcarproduct innovations or technologies. Our inabilityto developand manufacturenew product innovations or technologiesin a timelyand profitablemanner, or to obtaintimelycertification,or to achievemarketacceptance,or to avoid quality problemsin our new products,couldhave a materialadverseeffecton our revenueand resultsof operationsand subjectus to losses including penalties,cancellationof orders, rejection of railcars by a customerand/orotherlosses.

Our debt could have negative consequences to our business or results of operations.

We face several risks due to our debtand debtservice obligations including our potential inability to satisfy our financial obligations related to our consolidated indebtedness; potential breach of the covenants in our credit agreements; our ability to borrow additional amounts or refinance existing indebtedness in the future to fund operating needs may be limited or costly; our availability of cash flow may be inadequate because a portion of our cash flow is needed to pay principal and interest on our debt; we may be vulnerable to competitive pressures and to general adverse economic or industry conditions, including fluctuations in market interest rates or a downturn in our business; we may be at a disadvantage relative to our competitors that have greater financial resources than us or more flexible capital structures than us; we face additional exposure to the risk of increased interest rates as certain of our borrowings are at variable rates of interest, which could result in higher interest expense in the event of an increase in interest rates; restrictions under debt agreements may adversely interfere with our financial and operating flexibility and subjecting us to other risks; and exposure to the possibility that we may suffer a material adverse effect on our business and financial condition if we are unable to service our debt or obtain additional financing, as needed.

We, our subsidiaries, and our joint ventures mayincur additional indebtedness, including secured indebtedness, and other obligations and liabilities that do not constitute indebtedness.This could increasethe risksassociated with our debt. Some of our credit facilities and existing indebtednessuse the London Interbank Offered Rates (LIBOR) as a benchmark for establishing interest rates. LIBOR is the subject of proposals for reform. The consequences of these developments with respect to LIBOR cannot be entirely predicted at this time, but could result in an increase in the cost of our variable rate debt.

Our productand servicewarrantiescould exposeus to significantclaims.

We offerour customerslimitedwarrantiesformanyof our productsand services.Accordingly,we may be subjectto significantwarrantyclaimsin thefuture,such as multipleclaimsbasedon one defectrepeated throughoutour productionor servicingprocesses, claimsforwhich thecostof repairingthedefectivepartis highlydisproportionateto theoriginalcostof thepart or defects in railcars or services which we discover in the future resulting in increased warranty costs or litigation. Warranty and product support terms may expand beyond those which have traditionally prevailed in the rail supply industry. These typesof warrantyclaimscouldresultin costly productrecalls,customers

17

seekingmonetarydamages,significantrepaircostsand damageto our reputation. Ifwarrantyclaimsattributableto actionsof thirdpartycomponentmanufacturersarenot recoverable fromsuch partiesdue to theirpoor financialconditionor otherreasons,we couldbe liableforwarrantyclaims and otherrisksforusingthesematerials in our products.

Our financial performance and market value could cause future write-downs of goodwill or intangibles or other long-lived assets in future periods.

We are required to perform an annual impairment test of goodwill and other indefinite lived assets which could result in an impairment charge if it is determined that the carrying value of the asset exceeds its fair value. We perform a goodwill impairment test annually at the reporting unit level during the third quarter of each year, or whenever events or circumstances indicate that the carrying value of these assets may exceed their fair value.

When economic, market or industry trends, business changes, or underperforming financial performance suggest a change in circumstances indicating a decline in fair value of a reporting unit, the assets are evaluated for impairment. Among other things, our assumptions in the valuation of goodwill may include reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base. If indicators suggest it is more likely than not that the fair value of a reporting unit is less than its carrying value, it may result in an impairment of goodwill. As of August 31, 2021, we had $88.8 million of goodwill in our Manufacturing segment and $43.3 million in our Wheels, Repair & Parts segment. Impairment charges to our goodwill or other indefinite lived intangible assets would impact our results of operations. Future write-downs of goodwill and other assets could affect certain of the financial covenants under debt instruments and could restrict our financial flexibility.

Ifwe are unable to protectour intellectualpropertyor ifthird partiesassertthatour productsor servicesinfringetheirintellectualpropertyrights,our abilityto competein the marketmaybe harmed,and our businessand financialconditionmaybe adverselyaffected.

Ifour intellectualpropertyrightsarenot adequatelyprotected,we maynot be ableto commercializeour technologies,productsor servicesand our competitorscould commercializeour technologies,which couldresultin a decreasein our salesand marketshareand could materiallyadverselyaffectour business,financialconditionand resultsof operations.Conversely,thirdparties mightassertthatour products,services,or otherbusinessactivitiesinfringetheirpatentsor otherintellectual propertyrights.Infringementand otherintellectualpropertyclaimsand proceedingsbroughtagainstus, whether successfulor not, couldresultin substantial litigation and judgment costsand harmour reputation.

Insurance coverage could be costly, unavailable or inadequate.

The abilityto insureour businesses,facilitiesand railassetsisan importantaspectof our abilityto managerisk.As thereareonly limitedprovidersof thisinsuranceto therailcarindustry,thereisno guarantee thatsuch insurancewillbe availableon a cost-effectivebasisin thefuture.In addition,we cannot assure thatour insurancecarrierswillbe ableto pay currentor futureclaims. Additionally, the natureof our businesssubjectsus to physicaldamage,businessinterruptionand productliability claims,especiallyin connectionwith therepairand manufactureof productsthatcarryhazardousor volatile materials.Although we maintainliabilityinsurancecoverageatcommerciallyreasonablelevelscomparedto similarly sizedheavy equipmentmanufacturers,an unusuallylargephysicaldamage,businessinterruptionor productliabilityclaimor a seriesof claimsbasedon a failurerepeatedthroughoutour productionprocesscould exceedour insurancecoverageor resultin damageto our reputation, which could materially adversely impact our financial condition and results of operations.

18

Risks Related to Market and Economic Factors

The types of rail equipment we sell and the services we provide significantly impact our revenue and our margin and are dependent on broad economic trends over which we have little or no control.

We manufacture, lease, maintain and refurbish a broad range of railcars and related rail equipment. The demand for specific types of railcars and the mix of repair and refurbishment work varies over time. Changes in the global economy and the industries and geographies that we serve cause shifts in demand for specific products and services. These shiftsin demandcouldaffectour resultsof operationsand couldhave an adverseeffecton our revenue and our profitability. Demand for specific types of railcars increases and decreases with the demand for goods such as grains, metals, construction aggregates, fertilizer, perishables and general merchandise, plastic pellets, oil and gas, bio-fuels, chemicals, and automobiles, among others, which is beyond our control.

Cyclicaleconomic downturns in our industry usually result in decreased demand forour productsand servicesand reducedrevenue.

The industry in which we operate is subject to periodic economic cycles. Our industry currently is in an economic downturn with reduced demand. Thepurchasingtrendsof customers in our industry have a significantimpacton demandforour productsand services.As a result, during downturns,the rate at which we convert backlog to revenue usually decreases and we mayslow down or halt productionatsome of our facilities. The current economicdownturn in our industry has impacted the demandforour productsand services, and will continue to resultin one or more of the following: lowersalesvolumes,lowerprices,lowerleaseutilizationratesand decreased revenues and profits.

Demand for our railcar equipment and services is dependent on the future of rail transportation and the manner in which railroads operate.

Demand for our rail equipment and services may decrease if freight rail decreases as a mode of freight transportation used by customers to ship their products, or if governmental policies favor modes of freight transportation other than rail. If rail freight transportation becomes more efficient or dwell times decrease, demand for our rail equipment and services may decrease. If the rail freight industry becomes oversupplied, prices for our railcars, lease rates, and demand for our products and services may decrease. The industriesin which our customersoperatearedrivenby dynamicmarketforcesand trends,which arein turninfluencedby economic, regulatory,and politicalfactors.Featuresand functionalityspecificto certainrailcartypescouldresultin thoserailcarsbecoming obsoleteas customerrequirementsforfreightdeliverychange.

Risks relatedto our operationsoutsideof the U.S.could adverselyaffectour operatingresults.

We own, lease, operate or have invested in businesses that have manufacturing facilities in Mexico, Brazil and Europe, and have customers and suppliers located outside the United States. Instability in the macroeconomic, political, legal,trade, financial, labor or marketconditions in the countries where we,or our customers or suppliers, operate couldnegatively impactour businessactivitiesand operations.Some foreigncountriesin which we operateor mayoperatehave authoritiesthatregulate railroadsafetyand rail equipment designand manufacturing.Ifwe do not have appropriate certifications,we couldbe unableto marketand sellour rail equipment in those markets. Adverse changesin foreign regulations applicable to us or our customers, such as labor, environment,trade,tax, currencyand priceregulations, couldlimit our operations, makethemanufactureand distributionof our productsdifficult, and delay or limit our ability to repatriate income derived from foreign markets.

Our business benefits from free trade agreements between the United States and foreign governments, and from various U.S. corporate tax provisions related to international commerce. Any changes in trade or tax policies by the U.S. or foreign governments in jurisdictions in which we do business, as well as any embargoes, quotas or tariffs imposed on our products and services, could adversely and significantly affect our financial condition and results of operations.

19

Among the political risks we face outside the U.S. are governments nationalizing our business or assets, or repudiating or renegotiating contracts with us, our customers or our suppliers. In our cross-border business activities, we could experience longer customer payment cycles, difficulty in collecting accounts receivable or an inability to protect our intellectual property. We couldbe adverselyaffectedby violationsof theU.S.Foreign CorruptPracticesAct and similarworldwideanti-corruptionlaws, which mayconflictwith local business customs in certain jurisdictions.The failureto complywith laws governing internationalbusinessmayresultin substantialpenaltiesand fines and reputational harm. Transactions with non-U.S. entities expose us to business practices, local customs, and legal processes with which we may not be familiar, as well as difficulty enforcing contracts and international political and trade tensions. Ifwe areunableto successfully manage the risks associated with our foreign and cross-border business activities, our results of operations, financial condition, liquidityand cashflowscouldbe negativelyimpacted.

Fluctuationsin foreigncurrencyexchange ratescould leadto increasedcostsand lower profitability.

Outsideof theU.S.,we primarilyconductbusinessin Mexico, Europe and Braziland our non-U.S. businessesconducttheiroperationsin localcurrencies.We alsosourcematerialsworldwide.Fluctuationsin exchangeratesmayaffectdemandforour productsin foreignmarketsor our costcompetitivenessand mayadverselyaffectour profitability.Although we attemptto mitigatea portionof our exposureto changesin currencyratesthroughcurrencyratehedge contracts and otheractivities,theseeffortscannotfullyeliminatetherisksassociatedwith theforeigncurrencies.In addition,someof our borrowingsarein foreigncurrency,givingriseto riskfromfluctuationsin exchangerates. A materialor adversechangein exchangeratescouldresultin significantdeteriorationof profitsor in lossesfor us.

We could be unable to leaserailcarsat satisfactoryrates,remarketleasedrailcarson favorabletermsupon leasetermination,or realizethe expectedresidualvalues for end of life railcars due to changes in scrap prices, each of which could reduceour revenueand decreaseour overallreturnor affectour abilityto sellleasedassetsin the future.

The profitabilityof our railcarleasingbusinessdependson our abilityto leaserailcarsatsatisfactoryrates, sell railcars with sufficiently profitable leases to investors, and to remarket,sell or scrap railcarswe own or manageupon theexpirationof leases.The rentwe receiveduring the initial railcar lease term typically covers only a small portion of the railcar acquisition or production costs. Thus, we are exposed to a remarketing risk throughout the life of the railcar because we must obtain lease rates or a sale price sufficient to cover our acquisition or production costs related to the railcar. Our abilityto lease or remarketleasedrailcarsprofitablyisdependenton severalfactors,including,but not limitedto, marketand industryconditions,costof, and demandfor,competingused or newer models, availability of credit and the credit-worthiness of potential customers, costsassociatedwith the refurbishmentof therailcars, the marketdemandor governmentalmandatesforrefurbishment, customers not defaulting on their leases, as well as market perceptions of residual values and interestrates.A downturn in theindustriesin which our lesseesoperateand decreaseddemandforrailcarscouldalsoincreaseour exposureto remarketingrisksbecauselesseesmaydemandshorterleaseterms,requiringus to remarketleased railcarsmorefrequently.Furthermore,theresalemarketforpreviouslyleasedrailcarshas a limitednumberof potentialbuyers.Our inabilityto lease,remarketor sellleasedrailcarson favorabletermscouldresultin an adverse impact to our consolidated financial statements or affectour abilityto sell leasedrailcarsto investors in the future.

A limited availability of financing or higher interest rates could increase the cost of, or potentially deter, new leasing arrangements with our customers, reduce our ability to syndicate railcars under lease to financial institutions, or impact the sales price we may receive on such syndications, any of which could materially adversely affect our business, financial condition and results of operations.

20

Some of our competitors are owned or financially supported by foreign governments and may sell products below cost or otherwise compete unfairly.

The markets in which we participate areintenselycompetitiveand we expectthemto remainintensely competitive into theforeseeable future. Some of our competitors are owned or financially supported by foreign governments or sovereign wealth funds, and may potentially sell products and services below cost, or otherwise compete unfairly, in order to gain market share. The relative competitiveness of our manufacturing facilities and products affects our performance. A number of competitivefactors challenge or affectour abilityto competesuccessfully including the introductionof competitiveproducts and new entrantsintoour markets, a limitedcustomerbaseand pricepressures such as unfair competition and increases in raw materials and labor costs. If we do not competesuccessfully,our marketshare,marginand resultsof operationsmaybe adverselyaffected.

Fires,naturaldisasters, pandemics, terrorism, or severe or unusual weather conditionscould disruptour businessand result in lossof revenueor higher expenses or decreased demand for wheel services.

Any seriousdisruptionatany of our facilitiesdue to pandemic, terrorism, fire,hurricane,earthquake,flood, other severe weather eventsor any other naturaldisastercould impairour abilityto use our facilitiesand have a materialadverseimpacton our revenuesand increaseour costs and expenses.Ifthereisa naturaldisasteror otherseriousdisruptionatany of our facilities,particularly at any of our Mexican or Arkansas facilities,itcouldimpairour abilityto adequatelysupplyour customers,causea significant disruptionto our operations,causeus to incursignificantcoststo relocateor reestablishthesefunctionsand negativelyimpactour operatingresults.Whilewe insureagainstcertainbusinessinterruptionrisks,such insurancemaynot adequatelycompensateus forany lossesincurredas a resultof naturalor otherdisasters.

Additionally, seasonalfluctuationsin weatherconditionsmayleadto greatervariationin our quarterlyoperatingresultsas unusuallymildweatherconditionswillgenerallyleadto lowerdemandforour wheel-relatedproductsand services.Unusuallymildweatherconditionsthroughouttheyearmayreduceoveralldemandforour wheel-relatedproductsand maintenanceservices.Ifoccurringforprolongedperiods,such weathercouldhave an adverseeffecton our business,resultsof operationsand financialcondition.

Changes in the creditmarketsand the financialservicesindustrycould negativelyimpactour business,results of operations,financialconditionor liquidity.

The creditmarketsand thefinancialservicesindustrymayexperiencevolatilitywhich can resultin tighteravailabilityof crediton morerestrictivetermsand limitour abilityto sellrailcarassets or to syndicate railcars to investors with leases attached.Our liquidity, financialconditionand resultsof operationscouldbe negativelyimpactedifour abilityto borrow moneyto financeoperations,obtaincreditfromtradecreditors, obtain credit to maintain our hedging programs, offerleasingproductsto our customersor sellrailcarassets were to be impaired.In addition,scarcityof capitalcouldalsoadverselyaffectour customers’abilityto purchase, lease, or pay forproductsfromus or adversely affect our suppliers’abilityto provideus with product. Any of these conditionsor eventscouldresultin reductionsin our revenues,increasedpricecompetition,or increased operatingcosts,which couldadverselyaffectour business,financialconditionand resultsof operations.

21

Risks Related to Legal, Compliance and Regulatory Matters

Risks relatedto potentialmisconductby employeesmayadverselyimpactus.

Our employeesmayengagein misconduct, fraudor otherimproperactivities,includingnoncompliancewith our policiesor regulatorystandardsand requirements,which couldsubjectus to regulatorysanctions and reputational damage and materiallyharmour business.Itisnot alwayspossibleto deteremployeemisconduct,and theprecautionswe taketo preventand detectthisactivitymaynot be effectivein controllingunknown or unmanagedrisksor losses, includingrisksassociatedwith harassment, as well as whistleblowercomplaintsand litigation.Therecan be no assurancethatwe will succeedin preventingmisconductby employeesin thefuture.In addition,theinvestigationof alleged misconductdisruptsour operationsand may harm the public’s perception of our company, which maybe costly.Any such eventsin thefuturemayhave a materialadverse impacton our financialconditionor resultsof operations.

Changes in, or failure to comply with, applicable regulations mayadversely impactour business,financialconditionand resultsof operations.

Our company and the other participants in our industry are subject to regulation by governmental agencies. These authorities establish, interpret, and enforce rules and regulations for the railcar industry. New rules and regulations and shifting enforcement priorities of regulators could increase our operating costs and the operating costs of our customers. Changes to the process for obtaining regulatory approval in Europe for the operation of new or modified railcars may make it more difficult for us to deliver products timely and to comply with our sales contracts.

We cannot guarantee that we or our suppliers will be in compliance at all times and compliance may prove to be more costly and limiting than we currently anticipate and compliance requirements could increase in future years. If we or our suppliers fail to comply with applicable requirements and regulations, we could face sanctions and penalties that could negatively affect our financial results.

We have potentialexposureto environmentalliabilities,which could increase our operating costsor have an adverseeffect on our resultsof operations.

We aresubjectto extensivenational,state, foreign, provincialand localenvironmentallaws and regulations concerning,amongotherthings,airemissions,waterdischarge,solidwasteand hazardoussubstanceshandling and disposaland employeehealthand safety.These laws and regulationsarecomplexand frequentlychange.We couldincurunexpectedcosts,penaltiesand otherciviland criminalliabilityifwe, or in certain circumstances others, failto complywith environmentallaws or permitsissuedpursuantto thoselaws. We alsocouldincurcostsor liabilitiesrelated to off-sitewastedisposalor remediatingsoilor groundwatercontaminationatour properties,includingas set forth in Item 3, “Legal Proceedings.” In addition,futureenvironmentallaws and regulationsmayrequiresignificantcapitalexpenditures or changesto our operations, or may impose liability on us in the future for actions that complied with then applicable laws and regulations when the action was taken.

Business, regulatory,and legaldevelopmentsregardingclimatechange mayaffectthe demand forour productsor the abilityof our criticalsuppliersto meetour needs.

Scientific studies have suggested that emissions of certain gases, commonly referred to as greenhouse gases (GHGs) including carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere and other climate changes. Legislation and new rules to regulate emission of GHGs have been introduced in numerous state legislatures, the U.S. Congress, and by the EPA. Some of these proposals would require industries to meet stringent new standards that may require substantial reporting of GHGs and other carbon intensive activities in addition to potentially mandating reductions in our carbon emissions. While we cannot assess the direct impact of these or other potential regulations, we recognize that new climate change reporting or compliance protocols could affect our operating costs, the demand for our products and/or affect the price of materials, input factors and manufactured components which could impact our margins. Other adverse consequences of climate change could include an increased frequency of severe weather events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring company assets, or other unforeseen disruptions of our operations, systems, property or equipment.

22

Train derailmentsor otheraccidentsor claimscould subjectus to legalclaimsthatadverselyimpactour business,financialconditionand our resultsof operations.

We providea numberof serviceswhich includethemanufactureand supplyof new railcars, wheels,componentsand parts and the lease and maintenanceof railcarsforour customersthattransporta varietyof commodities,includingtankrailcarsthat transporthazardousmaterialssuch as crudeoil,ethanoland otherproducts. In addition, we have a Regulatory Services Group which offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services. We couldbe subjectto variouslegal claims,includingclaimsofnegligence,personalinjury,physicaldamageand productor serviceliability,or in somecasesstrictliability,as wellas potentialpenaltiesand liabilityunderenvironmentallaws and regulations,in theeventof a derailmentor otheraccidentinvolvingrailcars,includingtankrailcars whether resulting from natural disasters, human error, terrorism, or other causes.Ifwe becomesubjectto any such claimsand areunablesuccessfullyto resolve themor maintain inadequateinsuranceforsuch claims,our business,financialconditionand resultsof operations couldbe materiallyadverselyaffected.

Our products may be sold to thirdpartieswhomaymisuse,improperlyinstallor improperlyor inadequatelymaintainor repairsuch productstherebypotentiallyexposingus to claimsthatcould increase our costsand weaken our financialcondition. The productswe manufacturearedesignedto work optimallywhen properlyoperated,installed, repaired,maintained and used to transport the intended cargo.When thisdoes not occur,we maybe subjectedto claimsor litigationassociatedwith product damage, injuriesor propertydamagethatcouldincreaseour costsand weaken our financialcondition.

Changes in or the implementation of accounting standards or inaccurate estimates or assumptions in the application of accounting policies could adversely affect our financial results.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the reported value of our assets or liabilities and financial results and are critical because they require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Estimates, judgments and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, income taxes, warranty accruals, environmental costs, and goodwill, among other estimates. If our accounting policies, methods, judgments, assumptions, estimates and allocations prove to be incorrect, or if circumstances change, our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price may be materially adversely affected.

Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC, and our independent registered public accounting firm) may amend or even reverse their previous interpretations or positions on how these standards should be applied. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the revision of prior period financial statements. Changes in accounting standards can be hard to predict and can materially impact how we record and report our financial condition and results of operations.

Some of our customersplaceordersforour productsin relianceon theirabilityto utilizetax benefitsor tax credits any of which benefits or credits could be discontinued thereby reducing incentives for our customers to purchase our rail products.

Thereisno assurancethattaxauthoritieswillreauthorize,modify,or preventtheexpiration of taxbenefits,taxcredits,or other policies aimed to incentivize the purchase of our products. If such incentives are discontinued or diminished, the demandforour productscoulddecrease,therebycreatingthepotentialfora materialadverseeffecton our financialconditionor resultsof operations.

23

Risks Related to our Common Stock

Our stockpricehas been volatileand maycontinueto experiencelargefluctuations.

Thepriceof our commonstockhas experiencedrapidand significantpricefluctuations. The priceforour commonstockislikelyto continueto be volatileand subjectto priceand volumefluctuations in responseto marketand otherfactors,includingthefactorsdiscussedelsewherein theseriskfactors.A materialdeclinein thepriceof our commonstockmayresultin theassertionof certainclaimsagainst us, and/orthecommencementof inquiriesand/orinvestigationsagainstus. A prolongeddeclinein thepriceof our commonstockcouldresultin a reductionin theliquidityof our commonstock,a reductionin our abilityto raisecapital,and theinability ofinvestors to obtaina favorablesellingpricefor their shares.Followingperiodsof volatilityin themarketpriceof theirstock, historically many companieshave been thesubjectof securitiesclassactionlitigation.Ifwe becameinvolvedin securitiesclass actionlitigationin thefuture,itcouldresultin substantialcostsand diversionof our management’sattentionand our resourcesand couldharmour stockprice,business,prospects,financialconditionand resultsof operations.

Our current shareholders could experience dilution.

We requiresubstantialworking capitalto fund our business.Ifadditionalfundsareraisedthroughthe issuanceof equitysecurities or convertible securities,thepercentageownershipheldby our shareholders wouldbe reducedand theequity securities we issue mayhave rights,preferencesor privilegesseniorto thoseof our commonstock.Additionally, we have the option to settle outstanding convertible notes in cash, although if we opt not to or do not have the ability to settle outstanding convertible notes in cash, the conversionof someor allof our convertible notes maydilutethe ownershipinterestsof existingshareholders.Any salesin thepublicmarketof thecommonstockissuableupon theconversionof thenotescould adverselyaffectprevailingmarketpricesof our commonstock.In addition,theexistenceof thenotesmayencourageshortsellingby marketparticipants,becausetheconversionof thenotescoulddepressthepriceof our commonstock.

Certain provisions in our charter documents, Oregon law, and our debt instruments could make an acquisition of our company more difficult, limit attempts by our shareholders to replace or remove members of our Board of directors and may adversely affect the market price of our common stock.

Our Articlesof Incorporationand Bylaws, Oregon law, and contracts and debt instruments to which we are a party,containcertainprovisionsthatcoulddelay,deferor preventan acquisitionproposalthatsome,or a majority,of our shareholdersmightbelieveto be in theirbestinterestsor in which shareholdersmightreceivea premiumfortheircommonstockoverthethen-prevailingmarketprice. These provisionscould also dissuadeshareholdersor thirdparties fromcontestingdirectorelections and couldcauseinvestorsto view our securitiesas lessattractiveinvestmentsand reducethe marketpriceof our commonstock. These provisions are described in further detail in “Description of the Registrant’s Securities Under Section 12 of the Securities Exchange Act of 1934” annexed as Exhibit 4.3 to this Annual Report.

Paymentsof cash dividendson our commonstockmaybe madeonly at the discretionof our Board of Directors and maybe restrictedby Oregon law.

Any decisionto pay dividendswillbe atthediscretionof our Board of Directorsand willdepend upon our operatingresults,strategicplans,capitalrequirements,financialcondition,provisionsof our borrowing arrangementsand otherfactorsour Board of Directorsconsidersrelevant.Furthermore,Oregon law imposes restrictionson our abilityto pay dividends.Accordingly,we maynot be ableto continueto pay dividendsin any givenamountin thefuture,or atall.

Our business and operations could be negatively affected if we become subject to shareholder activism, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price.

Shareholder activism which could take many forms, including potential proxy contests and public information campaigns continues to increase. Shareholder activism could result in substantial costs to the Company, give rise to perceived uncertainties as to our future, adversely affect our relationships with suppliers, customers, and regulators, make it more difficult to attract and retain qualified personnel, and adversely impact our stock price.

24

Our share repurchaseprogramisintendedto enhance long-termshareholdervaluealthough we cannot guaranteethiswilloccur and thisprogrammaybe suspended or terminatedat any time.

The Board of Directorshas authorizedour companyto repurchaseour commonstockthrougha share repurchaseprogram.Our sharerepurchaseprogrammaybe modified,suspendedor discontinuedatany time withoutpriornotice.Although thesharerepurchaseprogramisintendedto enhancelong-termshareholdervalue, we cannotprovideassurancethatthiswilloccur.

General Risk Factors

Unanticipated changes in our tax provisions or exposure to additional income tax liabilities could affect our financial condition and profitability and we may take tax positions that the Internal Revenue Service or other tax authorities may contest.

We are subject to income taxes in both the United States and foreign jurisdictions. Significant judgments and estimates are required to be made in determining our worldwide provision for income taxes. Changes in estimates of projected future operating results, loss of deductibility of items, recapture of prior deductions (including related to interest on convertible notes), limitations on our ability to utilize tax net operating losses in the future or changes in assumptions regarding our ability to generate future taxable income could result in significant increases to our tax expense and liabilities that could adversely affect our financial condition and profitability.

We have in the past and may in the future take tax positions that the Internal Revenue Service (IRS) or other tax authorities may contest. We are required by an IRS regulation to disclose particular tax positions to the IRS as part of our tax returns for that year and future years. If the IRS or other tax authorities successfully contests a tax position that we take, we may be required to pay additional taxes, interest or fines that may adversely affect our results of operations and financial position.

The use of social and other digital media to disseminate false, misleading and/or unreliable or inaccurate data and information could create unwarranted volatility in our stock price and losses to our shareholders and could adversely affect our reputation, products, business, and operating results.

A substantial number of people are relying on social and other digital media to receive news, data, and information. Social and other digital media can be used by anyone to publish data and information without regard for factual accuracy. The use of social and other digital media to publish inaccurate, offensive, and disparaging data and information coupled with the frequent use of strong language and hostile expression, may influence the public’s inability to distinguish between what is true and what is false and could obstruct an effective and timely response to correct inaccuracies or falsifications. Such use of social and other digital media could result in unexpected and unsubstantiated claims concerning our business in general or our products, our leadership or our reputation among customers and the public at large, thereby making it more difficult for us to compete effectively, and potentially having a material adverse effect on our business, operations, or financial condition.

25

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

We operate at the following primary facilities as of August 31, 2021:

Description Location Status

Manufacturing Segment

Operating facilities: 6 locations in the United States Owned

3 locations in Mexico Owned – 2 locations Leased – 1 location

3 locations in Poland Owned

3 locations in Romania Owned

1 location in Turkey Owned

Administrative offices: 2 locations in the United States Leased

Wheels, Repair & Parts Segment

Leasing & Services Segment

We believe that our facilities are in good condition and that the facilities, together with anticipated capital improvements and additions, are adequate to meet our operating needs for the foreseeable future. We continually evaluate our facilities in order to remain competitive and to take advantage of market opportunities.

Item 3. LEGAL PROCEEDINGS

There is hereby incorporated by reference the information disclosed in Note 21 - Commitments and Contingencies to Consolidated Financial Statements, Part II, Item 8 of this Form 10-K.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

26

Information about our Executive Officers

Current information regarding our executive officers is presented below.

William A. Furman, 77, is Chief Executive Officer and Chairman of the Board of Directors. Mr. Furman has served as Chief Executive Officer since 1994, and as Chairman of the Board of Directors since January 2014. Mr. Furman was Vice President of the Company, or its predecessor company, from 1974 to 1994 and President of the Company from 1994 to 2019.

Martin R. Baker, 65, is Senior Vice President, General Counsel and Chief Compliance Officer, a position he has held since joining the Company in May 2008. Prior to joining the Company, Mr. Baker was Corporate Vice President, General Counsel and Secretary of Lattice Semiconductor Corporation.

Alejandro Centurion, 65, is Executive Vice President of the Company and President of Greenbrier Manufacturing Operations, a position he has held since January 2015. Mr. Centurion has served in various management positions for the Company since 2005, most recently as President of North American Manufacturing Operations.

Brian J. Comstock, 59, is Executive Vice President, Chief Commercial and Leasing Officer, a position he has held since January 2021. Mr. Comstock has served in various management positions for the Company since 1998, most recently as Executive Vice President, Sales and Marketing

Adrian J. Downes, 58, is Senior Vice President, Chief Financial Officer and Chief Accounting Officer. Mr. Downes has served as Senior Vice President and Chief Accounting Officer since joining the Company in March 2013. Mr. Downes was promoted to Acting Chief Financial Officer in August 2018 and was promoted to Chief Financial Officer in May 2019.

Lorie L. Tekorius, 54, is President and Chief Operating Officer. Ms. Tekorius has served as Chief Operating Officer since August 2018 and was promoted to President in August 2019. Ms. Tekorius has served in various management positions for the Company since 1995, most recently as Executive Vice President and Chief Operating Officer and prior to that, as Executive Vice President and Chief Financial Officer.

Executive officers are designated by the Board of Directors. No director or executive officer has a family relationship with any other director or executive officer of the Company.

27

PART II

Our common stock has been traded on the New York Stock Exchange under the symbol GBX since July 14, 1994. There were approximately 550 holders of record of common stock as of October 20, 2021.

Issuer Purchases of Equity Securities

The Board of Directors has authorized the Company to repurchase shares of the Company’s common stock. The share repurchase program has an expiration date of January 31, 2023. There were no share repurchases during the year ended August 31, 2021 under this program. The amount remaining for repurchase was $100.0 million as of August 31, 2021.

The Company repurchased $20.0 million of its common stock during 2021. These shares were repurchased, in privately negotiated transactions, as part of the Company’s debt refinancing in April 2021 and were not associated with the Company’s publicly announced share repurchase program described above.

Performance Graph

The following graph demonstrates a comparison of cumulative total returns for the Company's Common Stock, the Dow Jones U.S. Industrial Transportation Index and the Standard & Poor’s (S&P) 500 Index. The graph assumes an investment of $100 on August 31, 2016 in each of the Company's Common Stock and the stocks comprising the indices. Each of the indices assumes that all dividends were reinvested and that the investment was maintained to and including August 31, 2021, the end of the Company’s 2021 fiscal year.

28

The comparisons in this table are required by the SEC, and therefore, are not intended to forecast or be indicative of possible future performance of our Common Stock.

Equity Compensation Plan Information

Equity Compensation Plan Information is hereby incorporated by reference to the “Equity Compensation Plan Information” table in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of the Registrant’s year ended August 31, 2021.

Item 6. REMOVED AND RESERVED

29

Executive Summary

The financial results for 2021 were representative of the challenges of the current market conditions. The decrease in operating profits compared to the prior year was primarily attributable to the cyclical decrease in economic activity in the freight rail equipment market which began prior to the emergence of COVID-19 (Cyclical Downturn). The Cyclical Downturn intensified due to the COVID-19 Events (as defined below).

Some of the challenges that have developed as a result of the Cyclical Downturn and COVID-19 Events include:

• Temporary decline in demand.

• An increase in the price and the shortage of certain materials and components.

• Shipping and transportation delays.

• Shortage of skilled labor.

We have adhered to disciplined management through this crucial time. Our core strategy since March 2020 has been and continues to be to:

1) Maintain a strong liquidity base and balance sheet.

We strengthened our financial position through strategic spending reductions which included reducing our selling and administrative expense by $12.9 million during 2021 compared to the prior year.

30

Despite the challenging operating environment, we achieved the following accomplishments in 2021:

31

Manufacturing Backlog

As seen above, our backlog remains strong at August 31, 2021 with an increase in backlog value, units and average selling price compared to the prior year. In addition, our backlog includes railcar deliveries into 2025 and marine deliveries into 2023. Our railcar backlog was 26,600 units with an estimated value of $2.81 billion as of August 31, 2021. Backlog units for lease may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Multi-year supply agreements are a part of rail industry practice. A portion of the orders included in backlog reflects an assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future, which may impact backlog. Approximately 7% of backlog units and 6% of estimated backlog value as of August 31, 2021 was associated with our Brazilian manufacturing operations which is accounted for under the equity method. Marine backlog as of August 31, 2021 was $70 million.

Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms. Customers may attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time.

COVID-19 and Global Economic Activity

We continue to actively monitor and manage the impacts on our business due to the COVID-19 coronavirus pandemic, the recovery from the significant decline in global economic activity and governmental reactions to these historic events (COVID-19 Events).

The reopening of the economy has presented a mismatch of supply and demand, interruptions of supply lines, and inefficient or overloaded logistics platforms, among other factors that are causing the markets for the inputs to our business to fail to operate effectively or efficiently (including sectoral price inflation). Competition for, and costs related to recruiting and retaining, skilled labor are increasing. As described in Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K, COVID-19 Events may have a material negative impact on our business, liquidity, results of operations, and stock price. Beyond these general observations, we are unable to predict when, how, or with what magnitude COVID-19 Events will negatively impact our business.

32

Financial Overview

Revenue, Cost of revenue, Margin and Earnings from operations (operating profit) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.

Years ended August 31,

(In thousands, except per share amounts) 2021 2020

Revenue:

Cost of revenue:

Margin:

Net gain on disposition of equipment (1,176 ) (20,004 )

Net loss on extinguishment of debt 6,287 —

Earnings before earnings from unconsolidated affiliates 31,643 84,626

Earnings from unconsolidated affiliates 3,491 2,960

Net earnings attributable to noncontrolling interest (2,657 ) (38,619 )

Net earnings attributable to Greenbrier $ 32,477 $ 48,967

Diluted earnings per common share $ 0.96 $ 1.46

Performance for our segments is evaluated based on operating profit. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax benefit (expense) for either external or internal reporting purposes.

Years ended August 31,

Operating profit (loss):

33

Consolidated Results

(In thousands) 2021 2020 Increase (Decrease) % Change

* Not meaningful

Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various average selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.

The 37.4% decrease in revenue for the year ended August 31, 2021 as compared to the prior year was primarily due to a 43.4% decrease in Manufacturing revenue. The decrease in Manufacturing revenue was primarily attributed to a 43.2% decrease in railcar deliveries.

The 37.8% decrease in cost of revenue for the year ended August 31, 2021 as compared to the prior year was primarily due to a 42.4% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to a 43.2% decrease in railcar deliveries.

Margin as a percentage of revenue was 13.2% and 12.6% for years ended August 31, 2021 and 2020, respectively. The overall margin as a percentage of revenue was positively impacted by an increase in Leasing & Services margin by 21.9% primarily attributed to the benefit associated with lease modification and transfer fees on previously syndicated railcars during the year ended August 31, 2021. This was partially offset by a decrease in Manufacturing margin by 1.5% primarily attributed to operating at lower volumes and increased costs associated with operating our manufacturing facilities in the COVID-19 pandemic during the year ended August 31, 2021.

Net earnings attributable to Greenbrier is impacted by our operating activities and noncontrolling interest primarily associated with our 50% joint ventures at certain of our Mexican railcar manufacturing facilities and our 75% interest in Greenbrier-Astra Rail, each of which we consolidate for financial reporting purposes. The $16.5 million decrease in Net earnings attributable to Greenbrier for the year ended August 31, 2021 as compared to the prior year was primarily attributable to a decrease in margin due to a reduction in railcar deliveries. This was partially offset by the following:

For discussion related to the results of operations and changes in financial condition for 2020 compared to 2019 refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2020 Form 10-K, which was filed with the United States Securities and Exchange Commission on October 28, 2020.

34

Manufacturing Segment

(In thousands, except railcar deliveries) 2021 2020 Increase (Decrease) % Change

Operating profit (%) 5.0 % 8.4 % (3.4 )% *

* Not meaningful

Our Manufacturing segment primarily generates revenue from manufacturing a wide range of freight railcars through our facilities in North America and Europe. We also manufacture a broad range of ocean-going and river barges for transporting merchandise between ports within the United States.

Manufacturing revenue decreased $1.0 billion or 43.4% for the year ended August 31, 2021 compared to the prior year. The decrease in revenue was primarily attributed to a 43.2% decrease in railcar deliveries. This was partially offset by the additional revenue associated with an increase in steel and other input costs during the year ended August 31, 2021, as many of our customer contracts include price escalation provisions when our manufacturing costs increase.

Manufacturing cost of revenue decreased $875.9 million or 42.4% for the year ended August 31, 2021 compared to the prior year. The decrease in cost of revenue was primarily attributed to a 43.2% decrease in the volume of railcar deliveries. This was partially offset by an increase in steel and other input costs during the year ended August 31, 2021.

Manufacturing margin as a percentage of revenue decreased 1.5% for the year ended August 31, 2021 compared to the prior year. The decrease in margin percentage was primarily attributed to operating at lower volumes and increased costs associated with operating our manufacturing facilities in the COVID-19 pandemic during the year ended August 31, 2021.

Manufacturing operating profit decreased $130.3 million or 66.0% for the year ended August 31, 2021 compared to the prior year. The decrease in operating profit was primarily attributed to a decrease in railcar deliveries and increased costs associated with operating our manufacturing facilities during the COVID-19 pandemic during the year ended August 31, 2021. These were partially offset by a decrease in selling and administrative expense as part of our strategic cost control initiatives during the year ended August 31, 2021.

35

Wheels, Repair & Parts Segment

(In thousands) 2021 2020 Increase (Decrease) % Change

Margin (%) 6.0 % 6.9 % (0.9 )% *

Operating profit (%) 2.2 % 2.8 % (0.6 )% *

* Not meaningful

Our Wheels, Repair & Parts segment primarily generates revenue from railcar component manufacturing and servicing and from providing railcar maintenance services.

Wheels, Repair & Parts revenue decreased $26.3 million or 8.1% for the year ended August 31, 2021 compared to the prior year. The decrease was primarily attributed to lower volumes due to lower demand. This was partially offset by higher revenues associated with an increase in scrap metal pricing as we scrap wheels and other components.

Wheels, Repair & Parts cost of revenue decreased $21.8 million or 7.2% for the year ended August 31, 2021 compared to the prior year. The decrease was primarily due to lower costs associated with a reduction in volumes.

Wheels, Repair & Parts margin as a percentage of revenue decreased 0.9% for the year ended August 31, 2021 compared to the prior year. The decrease in margin percentage was primarily attributed to operating at lower volumes and increased costs associated with operating our facilities during the COVID-19 pandemic during the year ended August 31, 2021. This was partially offset by an increase in scrap metal pricing.

Wheels, Repair & Parts operating profit decreased $2.6 million or 28.6% for the year ended August 31, 2021 compared to the prior year. The decrease in operating profit was primarily attributed to a reduction in volumes and increased costs associated with operating our facilities during the COVID-19 pandemic. These were partially offset by an increase in scrap metal pricing and a decrease in selling and administrative expense as part of our strategic cost control initiatives during the year ended August 31, 2021.

36

Leasing & Services Segment

(In thousands) 2021 2020 Increase (Decrease) % Change

Operating profit (%) 41.8 % 34.8 % 7.0 % *

* Not meaningful

Our Leasing & Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, interim rent on leased railcars for syndication, and the sale of railcars purchased from third parties with the intent to resell. The gross proceeds from the sale of these railcars are recorded in revenue and the costs of purchasing these railcars are recorded in cost of revenue.

In February 2021 we announced a refined leasing strategy to grow our owned portfolio of leased railcars. This creates an incremental annuity stream of tax-advantaged cash flows while reducing our exposure to the new railcar order and delivery cycle. We are currently executing the strategy through GBX Leasing, a joint venture which we own approximately 95%. GBX Leasing is consolidated for financial reporting purposes within the Leasing & Services segment. GBX Leasing is financed with non-recourse debt and levered approximately 3:1 debt to equity. We intend that GBX Leasing will aggregate leased railcars to obtain term or capital market financing. Greenbrier Management Services provides management services to the GBX Leasing fleet.

Leasing & Services revenue increased $2.1 million or 1.8% for the year ended August 31, 2021 compared to the prior year. The increase was primarily attributed to revenue in 2021 associated with lease modification and transfer fees on previously syndicated railcars. This was partially offset by a decrease in the sale of railcars which we had purchased from third parties with the intent to resell and lower interim rent on leased railcars for syndication during 2021 compared to the prior year.

Leasing & Services cost of revenue decreased $25.0 million or 34.8% for the year ended August 31, 2021 compared to the prior year. The decrease was primarily due to a decrease in the volume of railcars sold that we purchased from third parties, lower transportation costs and a decrease in costs from a reduction in management services volume.

Leasing & Services margin as a percentage of revenue increased 21.9% for the year ended August 31, 2021 compared to the prior year. The increase in margin was primarily attributed to the income associated with lease modification and transfer fees on previously syndicated railcars during the year ended August 31, 2021. Margin as a percentage of revenue for the year ended August 31, 2020 was negatively impacted by higher sales of railcars that we purchased from third parties which have lower margin percentages.

Leasing & Services operating profit increased $9.1 million or 22.2% for the year ended August 31, 2021 compared to the prior year. The increase was primarily attributed to the income associated with lease modification and transfer fees during the year ended August 31, 2021. This was partially offset by a reduction in net gain on disposition of equipment.

37

Selling and Administrative

(In thousands) 2021 2020 Increase (Decrease) % Change

Selling and administrative expense was $191.8 million or 11.0% of revenue for the year ended August 31, 2021 and $204.7 million or 7.3% of revenue for the year ended August 31, 2020.

The $12.9 million decrease for the year ended August 31, 2021 compared to the prior year was primarily attributed to a decrease in controllable spending categories as part of our strategic cost control and liquidity initiatives and a decrease in the administrative fees paid to our joint venture partner in Mexico due to lower levels of activity. This was partially offset by a net increase in employee related costs due to higher incentive compensation expense in 2021 associated with current year financial performance.

Net Gain on Disposition of Equipment

Net gain on disposition of equipment was $1.2 million and $20.0 million for the years ended August 31, 2021 and 2020, respectively. Net gain on disposition of equipment primarily includes the sale of assets from our lease fleet (Equipment on operating leases, net) that are periodically sold in the normal course of business in order to accommodate customer demand and to manage risk and liquidity and disposition of property, plant and equipment.

Interest and Foreign Exchange

Interest and foreign exchange expense was composed of the following:

Years ended August 31, Increase (decrease)

Interest and foreign exchange:

The $0.4 million decrease in interest and foreign exchange expense during the year ended August 31, 2021 compared to the prior year was primarily attributed to the change in the Brazilian Real’s and Mexican Peso’s foreign exchange rate relative to the U.S. Dollar. This was partially offset by an increase in interest expense during the year ended August 31, 2021 from increased borrowings.

Net Loss on Extinguishment of Debt

Net loss on extinguishment of debt was $6.3 million for the year ended August 31, 2021, which primarily relates to the retirement of $227.3 million of our 2.875% convertible notes due 2024 and $50.0 million of our 2.25% convertible notes due 2024.

38

Income Tax

In 2021 our income tax benefit was $40.2 million on $8.6 million of pre-tax loss. The tax benefit was primarily attributable to accelerated depreciation and impact of the CARES Act which allows us to carry back tax losses to years when tax rates were higher, resulting in a tax benefit. The tax benefit is primarily derived from the U.S. Federal tax rate differential between 2016 - 2017 tax rates of 35% and the current rate of 21%.

In 2020 our income tax expense was $40.2 million on $124.8 million of pre-tax earnings for an effective tax rate of 32.2%. The tax rate was primarily derived from the geographic mix of earnings as well as a net unfavorable discrete item related to changes in foreign currency exchange rates for our U.S. Dollar denominated foreign operations.

The effective tax rate can fluctuate year-to-year due to discrete items and changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in Earnings (loss) before income taxes and earnings (loss) from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax benefit (expense).

Earnings From Unconsolidated Affiliates

Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the after-tax results from these unconsolidated affiliates.

Earnings from unconsolidated affiliates was $3.5 million for the year ended August 31, 2021 and primarily related to our rail component manufacturing operations and our railcar manufacturer in Brazil. Earnings from unconsolidated affiliates was $3.0 million for the year ended August 31, 2020 and primarily related to our rail component manufacturing operations.

Net Earnings Attributable to Noncontrolling Interest

Net earnings attributable to noncontrolling interest was $2.7 million and $38.6 million for the years ended August 31, 2021 and 2020, respectively, which primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.

39

Liquidity and Capital Resources

Years Ended August 31,

Net cash provided by (used in) operating activities $ (40,525 ) $ 272,261

Net cash provided by (used in) investing activities (117,760 ) 27,483

Net cash provided by (used in) financing activities (22,742 ) 216,455

We have been financed through cash generated from operations and borrowings. At August 31, 2021 cash and cash equivalents and restricted cash were $671.4 million, a decrease of $170.7 million from $842.1 million at the prior year end.

Cash Flows From Operating Activities

The change in cash provided by (used in) operating activities for 2021 compared to 2020 was primarily due to a net change in working capital as we increase production rates and from higher steel and other input costs. The change in cash flow from operating activities was also due to a decrease in earnings in 2021 compared to the prior year due to lower volumes of operating activities and an increase in income tax receivable in 2021 primarily from accelerated depreciation and the impact of the CARES Act.

Cash Flows From Investing Activities

Cash provided by (used in) investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates. The change in cash provided by (used in) investing activities for 2021 compared to 2020 was primarily attributable to an increase in capital expenditures and a reduction in proceeds from the sale of assets. The increase in capital expenditures in 2021 primarily relate to additions to our lease fleet as part of our leasing strategy.

Years ended August 31,

Capital expenditures:

Leasing & Services $ (103.8 ) $ (7.0 )

Wheels, Repair & Parts (8.6 ) (11.7 )

Total capital expenditures (gross) $ (139.0 ) $ (66.9 )

Proceeds from sale of equipment 15.9 83.5

Total capital expenditures (net of proceeds) $ (123.1 ) $ 16.6

Capital expenditures primarily relate to additions to our lease fleet and on-going investments into the safety and productivity of our facilities. Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Services. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity.

Capital expenditures for 2022 are expected to be approximately $275 million for Leasing & Services, approximately $55 million for Manufacturing and approximately $10 million for Wheels, Repair & Parts. Capital expenditures for 2022 primarily relate to continued investments into the safety and productivity of our facilities and additions to our lease fleet reflecting our enhanced leasing strategy.

Cash Flows From Financing Activities

The change in cash provided by (used in) financing activities for 2021 compared to 2020 was primarily attributed to proceeds from the issuance of debt, net of repayments, the repurchase of common stock and a change in the net activities with joint venture partners.

40

During 2021, we refinanced certain debt by issuing $373.8 million of new convertible notes due 2028 and retiring a total of $277.3 million of convertible notes due 2024. We also renewed and extended our $600.0 million domestic revolving facility and $291.9 million term loan to 2026 and renewed and extended our Leasing & Services’ $200.0 million term loan until August 2027.

GBX Leasing commenced operations in April 2021 and closed on a $300.0 million non-recourse warehouse credit facility. As of August 31, 2021, there were $147.0 million in outstanding borrowings associated with this facility.

Dividend & Share Repurchase Program

A quarterly dividend of $0.27 per share was declared on October 21, 2021.

The Board of Directors has authorized our company to repurchase shares of our common stock. The share repurchase program has an expiration date of January 31, 2023. The amount remaining for repurchase was $100.0 million as of August 31, 2021. Under the share repurchase program, shares of common stock may be purchased on the open market or through privately negotiated transactions from time to time. The timing and amount of purchases will be based upon market conditions, securities law limitations and other factors. The program may be modified, suspended or discontinued at any time without prior notice. The share repurchase program does not obligate us to acquire any specific number of shares in any period. There were no shares repurchased under the share repurchase program during 2021 or 2020.

Cash, Borrowing Availability and Credit Facilities

As of August 31, 2021, we had $646.8 million in Cash and cash equivalents and $187.9 million in available borrowings. Our significant cash balance is part of our strategy to maintain strong liquidity as we navigate the uncertainties around the COVID-19 pandemic and emerging economic recovery.

Senior secured credit facilities, consisting of four components, aggregated to $1.05 billion as of August 31, 2021. We had an aggregate of $187.9 million available to draw down under committed credit facilities as of August 31, 2021. This amount consists of $106.5 million available on the North American credit facility, $26.4 million on the European credit facilities and $55.0 million on the Mexican credit facilities.

As of August 31, 2021, a $600.0 million revolving line of credit, maturing August 2026, secured by substantially all of our U.S. assets not otherwise pledged as security for term loans or the warehouse credit facility, was available to provide working capital and interim financing of equipment, principally for the Company’s U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.50% or Prime plus 0.50% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios.

As of August 31, 2021, a $300.0 million non-recourse warehouse credit facility existed to support the operations of GBX Leasing, a joint venture in which we own approximately 95%. Advances under this facility bear interest at LIBOR plus 2.0%. The warehouse credit facility converts to a term loan in April 2023 which matures in April 2025. As of August 31, 2021, there were $147.0 million in outstanding borrowings associated with this facility. We intend that GBX Leasing will aggregate leased railcars to obtain term or capital market financing.

As of August 31, 2021, lines of credit totaling $76.6 million secured by certain of our European assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.5% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $39.0 million which are guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2022 through October 2023.

As of August 31, 2021, our Mexican railcar manufacturing operations had three lines of credit totaling $70.0 million. The first line of credit provides up to $30.0 million, of which we and our joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 3.75% to 4.25%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through June 2024. The second line of credit

41

provides up to $35.0 million, of which we and our joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 3.70%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through June 2023. The third line of credit provides up to $5.0 million and matures in September 2022. Advances under this facility bear interest at LIBOR plus 2.95% and are to be used for working capital needs.

As of August 31, 2021, outstanding commitments under the senior secured credit facilities consisted of $160.0 million in borrowings and $8.4 million in letters of credit under the North American credit facility, $50.2 million outstanding under the European credit facilities and $15.0 million outstanding under the Mexican credit facilities.

Other Information

The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us and our various subsidiaries, the most restrictive of which, among other things, limit our ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into financing leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all our assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest plus rent) coverage. As of August 31, 2021, we were in compliance with all such restrictive covenants.

From time to time, we may seek to repurchase or otherwise retire or exchange securities, including outstanding convertible notes, borrowings and equity securities, and take other steps to reduce our debt, extend the maturities of our debt or otherwise improve our balance sheet. These actions may include open market repurchases, unsolicited or solicited privately negotiated transactions or other retirements, repurchases or exchanges. Such retirements, repurchases or exchanges of one note or security for another note or security (now or hereafter existing), if any, will depend on a number of factors, including, but not limited to, prevailing market conditions, trading levels of our debt, our liquidity requirements and contractual restrictions, if applicable. The amounts involved in any such transactions may, individually or in the aggregate, be material and may involve all or a portion of a particular series of notes or other indebtedness which may reduce the float and impact the trading market of notes or other indebtedness which remain outstanding. We repurchased $20.0 million of our company’s common stock during 2021. These shares were repurchased, in privately negotiated transactions, as part of our debt refinancing in April 2021 and were not associated with our publicly announced share repurchase program.

We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency, we enter into foreign currency forward exchange contracts with established financial institutions to protect the margin on a portion of foreign currency sales in firm backlog. Given the strong credit standing of the counterparties, no provision has been made for credit loss due to counterparty non-performance.

We expect existing funds and cash generated from operations, together with proceeds from financing activities including borrowings under existing credit facilities and long-term financings, to be sufficient to fund expected debt repayments, working capital needs, planned capital expenditures, additional investments in our unconsolidated affiliates and dividends during the next twelve months.

The following table shows our estimated future contractual cash obligations as of August 31, 2021:

Years Ending August 31,

42

Due to uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits at August 31, 2021, we are unable to estimate the period of cash settlement with the respective taxing authority. Therefore, approximately $2.0 million in uncertain tax positions, including interest, have been excluded from the contractual table above. See Note 17 to the Consolidated Financial Statements for a discussion on income taxes.

Off Balance Sheet Arrangements

We do not currently have off balance sheet arrangements that have or are likely to have a material current or future effect on our Consolidated Financial Statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Income taxes- The asset and liability method is used to account for income taxes. We are required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets and assess deferred tax liabilities based on enacted law and tax rates for each tax jurisdiction to determine the amount of deferred tax assets and liabilities. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. We recognize liabilities for uncertain tax positions based on whether evidence indicates that it is more likely than not that the position will be sustained on audit.

It is inherently difficult and subjective to estimate whether a valuation allowance or uncertain tax position is necessary. In making this assessment, management may analyze future taxable income, reversing temporary differences and/or ongoing tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, the Company would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income. Changes in tax law or court interpretations may result in the recognition of a tax benefit or an additional charge to the tax provision. For further information regarding income taxes, see Note 17 of the Consolidated Financial Statements.

Warranty accruals - Warranty costs to cover a defined warranty period are estimated and charged to operations. The estimated warranty cost is based on historical warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types.

These estimates are inherently uncertain as they are based on historical data for existing products and judgment for new products. If warranty claims are made in the current period for issues that have not historically been the subject of warranty claims and were not taken into consideration in establishing the accrual or if claims for issues already considered in establishing the accrual exceed expectations, warranty expense may exceed the accrual for that particular product. Conversely, there is the possibility that claims may be lower than estimates. The warranty accrual is periodically reviewed and updated based on warranty trends. However, as we cannot predict future claims, the potential exists for the difference in any one reporting period to be material. For further information regarding the warranty accrual, see Note 11 of the Consolidated Financial Statements.

Environmental costs - At times we may be involved in various proceedings related to environmental matters. We estimate future costs for known environmental remediation requirements and accrue for them when it is probable that we have incurred a liability and the related costs can be reasonably estimated based on currently available information. Adjustments to these liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or when expenditures for which reserves are established are made.

43

Judgments used in determining if a liability is estimable are subjective and based on known facts and our historic experience. If further developments in or resolution of an environmental matter result in facts and circumstances that differ from those assumptions used to develop these reserves, the accrual for environmental remediation could be materially understated or overstated. Due to the uncertain nature of environmental matters, there can be no assurance that we will not become involved in future litigation or other proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to us. For further information regarding our environmental costs, see Note 21 of the Consolidated Financial Statements.

Goodwill - In accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles–Goodwill and Other (ASC 350), the Company evaluates goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses a two-step process to assess the realizability of goodwill. The first step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed to the quantitative second step where the fair value of a reporting unit is calculated based on weighted income and market-based approaches.

If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit. We performed our annual goodwill impairment test during the third quarter of 2021 and concluded that goodwill for all reporting units was not impaired.

Pursuant to the authoritative guidance, we make certain judgments and assumptions to determine our reporting units, which determines the carrying values for each reporting unit. Judgments related to qualitative factors include changes in economic considerations, market and industry trends, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit.

New Accounting Pronouncements

See Note 2 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

44

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter into foreign currency forward exchange contracts to protect revenue or margin on a portion of forecasted foreign currency sales and expenses. At August 31, 2021 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros aggregated to $74.2 million. Because of the variety of currencies in which purchases and sales are transacted and the interaction between currency rates, it is not possible to predict the impact of a movement in a single foreign currency exchange rate would have on future operating results.

In addition to exposure to transaction gains or losses, we are also exposed to foreign currency exchange risk related to the net asset position of our foreign subsidiaries. At August 31, 2021, net assets of foreign subsidiaries aggregated $394.9 million and a 10% strengthening of the U.S. Dollar relative to the foreign currencies would result in a decrease in equity of $39.5 million, or 3.0% of Total equity - Greenbrier. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. Dollar.

Interest Rate Risk

We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $237.2 million of variable rate debt to fixed rate debt. Notwithstanding these interest rate swap agreements, we are still exposed to interest rate risk relating to our revolving debt and a portion of term debt, which are at variable rates. At August 31, 2021, 49% of our outstanding debt had fixed rates and 51% had variable rates. At August 31, 2021, a uniform 10% increase in variable interest rates would result in approximately $0.7 million of additional annual interest expense.

45

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

The Greenbrier Companies, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of The Greenbrier Companies, Inc. and subsidiaries (the Company) as of August 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended August 31, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated October 26, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of September 1, 2019, due to the adoption of Accounting Standards Update 2016-02, Leases, and related amendments.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

46

Qualitative goodwill impairment assessment of the European Manufacturing and Wheels & Parts reporting units

As discussed in Notes 2 and 7 to the consolidated financial statements, the goodwill balance as of August 31, 2021 was $132.1 million, of which $32.1 million related to the European Manufacturing reporting unit and $43.3 million related to the Wheels & Parts reporting unit. The Company performs goodwill impairment testing on an annual basis and whenever events or changes in circumstances indicate that the carrying value of a reporting unit likely exceeds its fair value using either a qualitative or a quantitative assessment. If the qualitative assessment is performed and the Company determines that fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment is necessary. The Company performed a qualitative assessment for the European Manufacturing and Wheels & Parts reporting units. For the annual impairment test that occurred during 2021, the Company performed a qualitative assessment to test the goodwill related to its European Manufacturing and Wheels & Parts reporting units.

We identified the evaluation of the Company’s qualitative assessment that it was more likely than not the fair value of the European Manufacturing and Wheels & Parts reporting units exceeded their carrying values as a critical audit matter. There was subjective auditor judgement in evaluating the impact of (1) macroeconomic considerations, as well as industry and market trends included in the Company’s goodwill impairment assessment, and (2) the business strategy, including management’s cost reduction initiatives on the reporting units’ actual financial results.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the goodwill impairment process. This included controls related to the evaluation of the qualitative factors used by the Company to assess the European Manufacturing and Wheels & Parts reporting units that are noted above. We evaluated the Company’s assessment of the macroeconomic considerations, as well as industry and market trends by comparing them to publicly available industry and market information. We evaluated the business strategy, including management’s cost reduction initiatives, by assessing:

• the Company’s stated reasons for choosing a particular course of action

• the Company’s ability to carry out a particular course of action

/s/ KPMG LLP

We have served as the Company’s auditor since 2011.

Portland, Oregon

October 26, 2021

47

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Balance Sheets

As of August 31,

Assets

Investment in unconsolidated affiliates 79,898 72,354

Liabilities and Equity

Commitments and contingencies (Notes 20 & 21)

Contingently redeemable noncontrolling interest 29,708 31,117

Equity:

Greenbrier

Accumulated other comprehensive loss (43,713 ) (52,817 )

The accompanying notes are an integral part of these financial statements.

48

Consolidated Statements of Income

Years ended August 31,

Revenue

Cost of revenue

Goodwill impairment — — 10,025

Other costs

Net loss on extinguishment of debt 6,287 — —

Earnings (loss) from unconsolidated affiliates 3,491 2,960 (5,805 )

Basic earnings per common share $ 0.99 $ 1.50 $ 2.18

Diluted earnings per common share $ 0.96 $ 1.46 $ 2.14

Weighted average common shares

The accompanying notes are an integral part of these financial statements.

49

Consolidated Statements of Comprehensive Income

Years ended August 31,

Other comprehensive income (loss)

The accompanying notes are an integral part of these financial statements.

50

Consolidated Statements of Equity

Attributable to Greenbrier

Joint venture partner distribution declared — — — — — (18,025 ) (18,025 ) —

Noncontrolling interest acquired — — — — — 1,915 1,915 —

Other comprehensive income (loss), net — — — (8,002 ) (8,002 ) 20 (7,982 ) —

Noncontrolling interest adjustments — — — — — 1,436 1,436 —

Joint venture partner distribution declared — — — — — (37,552 ) (37,552 ) —

Noncontrolling interest acquired — — — — — 12,075 12,075 —

Restricted stock awards (net of cancellations) 213 2,691 — — 2,691 — 2,691 —

Unamortized restricted stock — (4,957 ) — — (4,957 ) — (4,957 ) —

Noncontrolling interest adjustments — — — — — 2,259 2,259 —

Joint venture partner distribution declared — — — — — (24,645 ) (24,645 ) —

Investment by joint venture partner — — — — — 7,000 7,000 —

The accompanying notes are an integral part of these financial statements.

51

Consolidated Statements of Cash Flows

Years ended August 31,

Cash flows from operating activities

Net loss on extinguishment of debt 6,287 — —

Goodwill impairment — — 10,025

Decrease (increase) in assets:

Increase (decrease) in liabilities:

Cash flows from investing activities

Acquisitions, net of cash acquired — — (361,878 )

Investment in and advances to unconsolidated affiliates (26 ) (1,815 ) (11,393 )

Cash distribution from unconsolidated affiliates and other 5,350 12,693 2,096

Cash flows from financing activities

Repayments of revolving notes with maturities longer than 90 days (287,000 ) — —

Repurchase of stock (20,000 ) — —

Investment by joint venture partner 7,000 — —

Cash and cash equivalents and restricted cash

Balance Sheet Reconciliation

Cash paid during the period for

Non-cash activity

The accompanying notes are an integral part of these financial statements.

52

Notes to Consolidated Financial Statements

Note 1 — Nature of Operations

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. The segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars, tank cars, conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment performs wheel and axle servicing, railcar maintenance and produces a variety of parts for the rail industry in North America. The Leasing & Services segment, which includes GBX Leasing, owns approximately 8,800 railcars as of August 31, 2021. The Company also provides management services for approximately 444,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America as of August 31, 2021. Through unconsolidated affiliates the Company produces rail and industrial components and has an ownership stake in a railcar manufacturer inBrazil.

Note 2 — Summary of Significant Accounting Policies

Principles of consolidation- The financial statements include the accounts of the Company and its subsidiaries in which it has a controlling interest. All intercompany transactions and balances are eliminated upon consolidation.

Unclassified balance sheet-The balance sheets of the Company are presented in an unclassified format as a result of significant leasing activities for which the current or non-current distinction is not relevant. In addition, the activities of the Manufacturing; Wheels, Repair & Parts;and Leasing & Services segments are so intertwined that in the opinion of management, any attempt to separate the respective balance sheet categories would not be meaningful and may lead to the development of misleading conclusions by the reader.

Foreign currency translation - Certain operations outside the U.S. prepare financial statements in currencies other than the U.S. Dollar. Revenues and expenses are translated at monthly average exchange rates during the year, while assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of equity in other comprehensive income (loss). The net foreign currency translation adjustment balances were $35.8 million, $39.8 million and $34.2 million as of August 31, 2021, 2020 and 2019, respectively

Cash and cash equivalents- Cash may temporarily be invested primarily in money market funds. All highly-liquid investments with a maturity of three months or less at the date of acquisition are considered cash equivalents.

Restricted cash- Restricted cash relates to amounts held to support a target minimum rate of return on certain agreements, terms of our credit agreement, and a pass through account for activity related to management services provided for certain third party customers.

Accounts receivable - Accounts receivable consists of receivables from customers and receivables from related parties (see Note 16 - Related Party Transactions) and is stated net of allowance for doubtful accounts of $2.4 million and $2.7 million as of August 31, 2021 and 2020, respectively.

As of August 31,

Allowance for doubtful accounts

Currency translation effect (40 ) 124 13

Inventories- Inventories are valued at the lower of cost or net realizable value using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit.

53

Leased railcars for syndication - Leased railcars for syndication consist of newly-built railcars manufactured at one of the Company’s facilities or railcars purchased from third parties, which have been placed on lease to a customer and which the Company intends to sell to an investor with the lease attached. These railcars are generally anticipated to be sold within six months of delivery of the last railcar in a group or six months from when the Company acquires the railcar from a third party and are typically not depreciated during that period as the Company does not believe any economic value of a railcar is lost in the first six months. In the event the railcars are not sold in the first six months, the railcars are either held in Leased railcars for syndication and are depreciated or are transferred to Equipment on operating leases and are depreciated.

Equipment on operating leases, net- Equipment on operating leases is stated net of accumulated depreciation. Depreciation to estimated salvage value is provided on the straight-line method over the estimated useful lives of up to forty years. Management periodically reviews salvage value estimates based on current scrap prices and what the Company expects to receive upon disposal.

Investment in unconsolidated affiliates- Investment in unconsolidated affiliates includes the Company’s interests in certain investees which are accounted for under the equity method of accounting as the Company has determined that the investment provides the Company with the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee of at least 20%. Several factors are considered in determining whether the equity method of accounting is appropriate including the relative ownership interests and governance rights of the joint venture partners.

As of August 31, 2021, selected investments in unconsolidated affiliates include the Company’s 60% interest in Greenbrier-Maxion, 29.5% interest in Amsted-Maxion Cruzeiro (which owns 40% of Greenbrier-Maxion), 40% interest in Greenbrier Railcar Funding I LLC and 41.9% interest in Axis, LLC.

Property, plant and equipment- Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is provided on the straight-line method over estimated useful lives which primarily are as follows:

Depreciable Life

Buildings and improvements 10 - 30 years

Machinery and equipment 3 - 20 years

Other 3 - 7 years

Intangible and other assets, net- Intangible assets are recorded when a portion of the purchase price of an acquisition is allocated to assets such as customer contracts and relationships and trade names. Intangible assets with finite lives are amortized using the straight line method over their estimated useful lives which are up to 20 years. Other assets include nonqualified savings plan investments, and revolving note fees which are capitalized and amortized as interest expense over the life of the related borrowings.

Impairment of long-lived assets- When changes in circumstances indicate the carrying amount of certain long-lived assets may not be recoverable, the assets are evaluated for impairment. If the forecasted undiscounted future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying value of the assets to estimated realizable value is recognized in the current period. No impairment of long-lived assets was recorded in the years ended August 31, 2021, 2020 and 2019.

Goodwill- Goodwill is recorded when the purchase price of an acquisition exceeds the fair market value of the net assets acquired. Goodwill is not amortized and is tested for impairment at least annually and more frequently if indicators of impairment arise. The Company reviews goodwill for impairment annually using either a qualitative assessment or a quantitative goodwill impairment test. If the qualitative assessment is selected and the Company determines that fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment is necessary. For reporting units where the Company performs the quantitative goodwill impairment test an impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit. See Note 7 – Goodwill for additional information.

54

Warranty accruals -Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities, are reviewed periodically and updated based on warranty trends.

Income taxes- The asset and liability method is used to account for income taxes. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. The Company recognizes liabilities for uncertain tax positions based on whether evidence indicates that it is more likely than not that the position will be sustained on audit. The Company reevaluates these uncertain tax positions on a quarterly basis. Changes in tax law or court interpretations may result in the recognition of a tax benefit or an additional charge to the tax provision.

Deferred revenue - Cash payments received prior to meeting revenue recognition criteria are recorded in Deferred revenue. Amounts are reclassified out of Deferred revenue once the revenue recognition criteria have been met.

Noncontrolling interest and Contingently redeemable noncontrolling interest - The Company has a joint venture with Grupo Industrial Monclova, S.A. (GIMSA) that manufactures new railroad freight cars for the North American marketplace at GIMSA’s existing manufacturing facility located in Frontera, Mexico. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company maintains a controlling interest as evidenced by the right to appoint the majority of the Board of Directors, control over accounting, financing, marketing and engineering and approval and design of products. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Greenbrier-Astra Rail was formed in 2017 between the Company’s existing European operations headquartered in Swidnica, Poland and Astra Rail, based in Arad, Romania. Greenbrier-Astra Rail is controlled by the Company with an approximate 75% interest. Astra Rail also received a put option to sell its entire noncontrolling interest to Greenbrier at an exercise price equal to the higher of fair value or a defined EBITDA multiple as measured on the exercise date. The option is exercisable 30 business days prior to and up until June 1, 2022. The Company consolidates Greenbrier-Astra Rail for financial reporting purposes and includes the noncontrolling interest in the mezzanine section of the Consolidated Balance Sheet in Contingently redeemable noncontrolling interest. The carrying value of the noncontrolling interest cannot be less than the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised. Adjustments to reconcile the carrying value to the maximum redemption amount are recorded to retained earnings.

In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag, a railcar manufacturing company based in Adana, Turkey. Rayvag is controlled by the Company. The Company consolidates Rayvag for financial reporting purposes. The noncontrolling interest related to the partner’s interest is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Net earnings attributable to noncontrolling interest on the Company’s Consolidated Statement of Income represents the Company’s partners’ share of results from operations.

55

Accumulated other comprehensive loss – Accumulated other comprehensive loss, net of tax as appropriate, consisted of the following:

Amounts reclassified from accumulated other comprehensive loss 4,979 — — $ 4,979

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with the financial statement caption, were as follows:

Year Ended August 31,

(In thousands) 2021 2020 Financial Statement Caption

(Gain) loss on derivative financial instruments:

Foreign exchange contracts $ 1,408 $ 2,984 Revenue and Cost of revenue

Interest rate swap contracts 5,261 2,657 Interest and foreign exchange

Revenue recognition– The Company measures revenue at the amounts that reflect the consideration to which it expects to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. Payment terms vary by segment and product type and are generally due within normal commercial terms. The Company’s contracts with customers may include multiple performance obligations (e.g. railcars, maintenance, management services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on its relative standalone selling price. The Company has disaggregated revenue from contracts with customers into categories which describe the principal activities from which it generates revenues.

Manufacturing

Railcars are manufactured in accordance with contracts with customers. The Company recognizes revenue upon its customers’ acceptance of the completed railcars at a specified delivery point. From time to time, the Company enters into multi-year supply agreements. Each railcar delivery is considered a distinct performance obligation, such that the amounts that are recognized as revenue following railcar delivery are generally not subject to change.

The Company typically recognizes marine vessel manufacturing revenue over time using the cost input method, based on progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. This method best depicts the Company’s performance in completing the construction of the marine vessel for the customer and is consistent with the percentage of completion method used prior to the adoption of Topic 606. When estimates of total costs to be incurred on a contract exceed total revenue, the expected loss is recorded in the period in which the loss is determined.

Wheels, Repair & Parts

The Company operates a network of facilities in North America that provide complete wheelset reconditioning and maintenance services.

56

Wheels revenue is recognized when wheelsets are shipped to the customer or when consumed by customers in the case of consignment arrangements. Parts revenue is recognized upon shipment of the parts to the customers.

Maintenance revenue is typically recognized over time using the cost input method, based on progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. This method best depicts the Company’s performance in servicing the railcars for the customer. Maintenance services are typically completed in less than 90 days.

Leasing & Services

The Company owns a fleet of new and used cars which are leased to third-party customers. Lease revenue is recognized over the lease-term in the period in which it is earned.

Syndication transactions represent new and used railcars which have been placed on lease to a customer and which the Company intends to sell to an investor with the lease attached. At the time of such sale, revenue and cost of revenue associated with railcars that the Company has manufactured are recognized in the Manufacturing segment; while revenue and cost of revenue associated with railcars which were obtained from a third-party with the intent to resell them and subsequently sold, are recognized in Leasing & Services.

The Company enters into multi-year contracts to provide management and maintenance services to customers for which revenue is generally recognized on a straight-line basis over the contract term as a stand-ready obligation. Costs to fulfill these contracts are recognized as incurred.

Interest and foreign exchange - Interest and foreign exchange includes foreign exchange transaction gains and losses, amortization of loan fee expense, accretion of debt discounts and external interest expense.

Years ended August 31,

Interest and foreign exchange:

Forward exchange contracts- Foreign operations give rise to risks from fluctuations in foreign currency exchange rates. Forward exchange contracts with established financial institutions are used to hedge a portion of such risk. Realized and unrealized gains and losses on effective hedges are deferred in other comprehensive income (loss) and recognized in earnings concurrent with the hedged transaction or when the occurrence of the hedged transaction is no longer considered probable. Ineffectiveness is measured and any gain or loss is recognized in foreign exchange (gain) loss. Even though forward exchange contracts are entered into to mitigate the impact of currency fluctuations, certain exposure remains, which may affect operating results. In addition, there is risk for counterparty non-performance.

Interest rate instruments- Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The net cash amounts paid or received under the agreements are recognized as an adjustment to interest expense.

Research and development - Research and development costs are expensed as incurred. Research and development costs incurred for new product development during the years ended August 31, 2021, 2020 and 2019 were $6.3 million, $5.8 million and $5.4 million, respectively, included in Selling and administrative expenses.

Net earnings per share- Basic earnings per common share (EPS) is calculated using weighted average basic common shares outstanding, which include restricted stock grants and restricted stock units that are considered participating securities when the Company is in a net earnings position.

57

Diluted EPS is calculated using the treasury stock method, associated with shares underlying the 2024 and 2028 2.875% Convertible notes, 2024 2.25% Convertible notes, restricted stock units that are not considered participating securities and performance-based restricted stock units subject to performance criteria.

Stock-based compensation – The value of stock-based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or in some instances the recipient’s eligible retirement date. Stock based compensation expense consists of restricted stock units and restricted stock awards. The fair value of awards is measured using the number of shares granted multiplied by the closing share price on the grant date. Stock based compensation expense for the years ended August 31, 2021, 2020 and 2019 was $14.7 million, $9.0 million and $11.2 million, respectively and was recorded in Selling and administrative and Cost of revenue on the Consolidated Statements of Income.

Restricted stock units and restricted stock awards are accounted for as equity based awards (see Note 14 - Equity).

Management estimates -The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Reclassifications - Certain immaterial reclassifications have been made to the accompanying prior year Consolidated Financial Statements to conform to the current year presentation.

Initial Adoption of Accounting Policies

Revenue Recognition

In the first quarter of 2019, the Company adopted Accounting Standard Update 2014-09, Revenue from Contracts with Customers and related amendments (Topic 606). This standard was issued to provide a common revenue recognition model for entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. The new standard also requires additional disclosures to sufficiently describe the nature, amount, timing, and uncertainty of revenue and cash flow arising from contracts with customers. As a result of adopting the new standard, the majority of the Company’s revenue recognition timing remained unchanged, while certain minor changes have occurred related to maintenance services. Costs incurred while fulfilling maintenance contracts are now recognized as incurred while the related revenue continues to be recognized over time. Additionally, maintenance and rail retrofit service revenue, while previously recognized upon completion of an order, is now recognized as costs are incurred. This standard was adopted using a modified retrospective approach through a cumulative effect adjustment, which increased retained earnings by $5.5 million at September 1, 2018. Other adjustments recorded to the September 1, 2018 opening balance sheet were not material. The adoption of the new revenue standard did not have a material effect on the Condensed Consolidated Balance Sheet or Statement of Income.

Lease accounting

On September 1, 2019, the Company adopted Accounting Standards Update 2016-02, Leases and related amendments (Topic 842). The new guidance supersedes existing guidance on accounting for leases in Topic 840 and is intended to increase the transparency and comparability of accounting for lease transactions. Topic 842 requires most leases to be recognized on the balance sheet by recording a right-of-use (ROU) asset and a lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains similar to the prior model, but updated to align with certain changes to the lessee model and Topic 606.

The Company adopted the provisions of the new standard using the modified retrospective adoption method, utilizing the simplified transition option which allows entities to continue to apply the legacy guidance in Topic 840 in the comparative periods presented in the year of adoption. The Company elected the “package of practical expedients,”

58

which allows it to not reassess under the new guidance prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight practical expedient. The Company elected to not separate lease and non-lease components. The Company elected the short-term lease recognition exemption for all leases that qualify, which means it will not recognize ROU assets or lease liabilities for leases with lease terms of less than twelve months. Following the adoption of Topic 842, the Company will utilize both Topic 842 and Topic 606 when evaluating retained risk of services and other performance obligations in conjunction with selling railcars with a lease attached as part of the syndication model.

As a result of adoption, the Company recognized operating lease ROU assets and lease liabilities of $40.4 and $41.6 million, respectively, as of September 1, 2019. The Company also recognized an immaterial finance lease asset and corresponding lease liability. Additionally, the Company derecognized certain existing property, plant and equipment and deferred revenue for railcar transactions previously not qualifying as sales due to continuing involvement, that now qualify as sales under the new guidance. The gain associated with this change in accounting, was mostly offset by the recognition of a new guarantee liability. The adoption of this new standard also required the Company to eliminate deferred gains associated with certain sale-leaseback transactions. A cumulative-effect adjustment of $4.4 million was recorded as an increase to retained earnings as of September 1, 2019.

Derivatives and Hedging

In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). This update improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance. The guidance expands the ability to qualify for hedge accounting for non-financial and financial risk components, reduces complexity in fair value hedges of interest rate risk and eliminates the requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. The Company adopted this guidance effective September 1, 2019 and it did not have a material impact on its consolidated financial statements.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued Accounting Standard Update 2016-13, Financial Instruments – Credit Losses (ASU 2016-13). This update introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance applies to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. The new guidance also applies to debt securities and other financial assets measured at fair value through other comprehensive income (loss). The new guidance is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance beginning September 1, 2020. The Company estimated the expected lifetime credit loss by pooling financial instruments based on similar characteristics. Expected losses were then estimated using historical loss information and aging considerations, as well as other information such as the current and future economic conditions of its customers and the end markets in which they operate. The Company adopted this guidance using a modified retrospective approach through a cumulative effect adjustment, which decreased opening retained earnings by $0.5 million on September 1, 2020. The ongoing application of ASU 2016-13 is not expected to materially impact the Company’s consolidated financial statements.

Prospective Accounting Changes

Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued Accounting Standard Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity’s own equity and modifies the guidance on diluted EPS calculations as a result of these changes. The Company plans to early adopt this guidance beginning September 1, 2021 on a modified retrospective basis and expects to record a cumulative effect on adoption of approximately $3 million reduction to Retained earnings. The Company expects the impact of adoption to result in a reduction to Additional paid in capital of approximately $51 million related to amounts attributable to conversion options that had

59

previously been recorded in equity and the associated derecognition of related deferred tax liabilities of approximately $17 million. Additionally, the Company expects to record an increase to its convertible notes balance by an aggregate amount of approximately $71 million as a result of reversal of the separation of the convertible debt between debt and equity. The Company anticipates the ongoing impact will reduce reported interest expense, increase reported net income, and result in a change in the calculation of EPS to use the if-converted method to calculate diluted EPS, which is expected to be incrementally dilutive compared to the Company’s current accounting treatment. There is no expected impact to the Company’s cash flows as the result of the adoption.

Simplification of Accounting for Income Taxes

In December 2019, the FASB issued Accounting Standard Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 for: recognizing deferred taxes for investments, performing intra-period allocations and calculating taxes in interim periods. The ASU also improves consistent application of GAAP for other areas of Topic 740 by clarifying and amending existing guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The standard is effective for fiscal years beginning after December 15, 2020. The Company plans to adopt this guidance beginning September 1, 2021. The Company does not expect the new guidance to have a material impact on its financial condition or results of operations.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The elective amendments provide expedients to contract modification, affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by this guidance apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. This guidance is not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The guidance can be applied immediately through December 31, 2022. The Company expects to adopt this standard when LIBOR is discontinued if there is a mismatch in our interest rate swap and derivatives for a period of time. The Company does not expect a material impact to its financial condition, results of operations or disclosures based on the current debt portfolio and capital structure.

Note 3 – Revenue Recognition

Contract balances

Contract assets primarily consist of unbilled receivables related to marine vessel construction and railcar maintenance services, for which the respective contracts do not yet permit billing at the reporting date. Contract liabilities primarily consist of customer prepayments for manufacturing, maintenance, and other management-type services, for which the Company has not yet satisfied the related performance obligations.

The opening and closing balances of the Company’s contract balances are as follows:

Contract assets Accounts receivable, net $ 5,855 $ 430 $ 5,425

For the year ended August 31, 2021, the Company recognized $7.4 million of revenue that was included in Contract liabilities as of August 31, 2020.

60

Performance obligations

As of August 31, 2021, the Company has entered into contracts with customers for which revenue has not yet been recognized. The following table outlines estimated revenue related to performance obligations wholly or partially unsatisfied, that the Company anticipates will be recognized in future periods.

Revenue type:

Manufacturing – Railcar sales $ 2,354.1

Manufacturing – Marine $ 70.3

Manufacturing – Railcars intended for syndication 1 $ 292.5

1 Not a performance obligation as defined in Topic 606

Based on current production and delivery schedules and existing contracts, approximately $1.4 billion of the Railcar sales amount is expected to be recognized in the next 12 months while the remaining amount is expected to be recognized through 2025. The table above excludes estimated revenue to be recognized at the Company’s Brazilian manufacturing operations, as they are accounted for under the equity method.

Revenue amounts reflected in Railcars intended for syndication may be syndicated to third parties or held in the Company’s fleet depending on a variety of factors.

Marine revenue is expected to be recognized through 2023 as vessel construction is completed.

Services includes management and maintenance services of which approximately 53% are expected to be performed through 2026 and the remaining amount through 2037.

Note 4 – Acquisitions

Manufacturing business of American Railcar Industries, Inc. (ARI)

On July 26, 2019, the Company completed its acquisition of the manufacturing business of ARI for a purchase price of approximately $417.2 million. In connection with the acquisition, the Company acquired two railcar manufacturing facilities in Arkansas, as well as other facilities which produce a range of railcar components and parts and create enhanced vertical integration for our manufacturing operations. The purchase price included approximately $8.5 million for capital expenditures on railcar lining operations and other facility improvements. Included in the acquisition were equity interests in two railcar component manufacturing businesses which Greenbrier accounts for under the equity method of accounting and recognized at their respective fair value as investments in unconsolidated affiliates.

For the year ended August 31, 2019, the operations contributed by ARI’s manufacturing business generated revenues of $43.0 million and a loss from operations of $1.6 million, which are reported in the Company’s consolidated financial statements as part of the Manufacturing segment.

61

The following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition:

(In thousands)

Accounts receivable $ 27,659

Property, plant and equipment 225,045

Investments in unconsolidated affiliates 40,314

Intangibles and other assets 36,785

Total liabilities assumed 67,319

The identified intangible assets assumed in the acquisition were recognized as follows:

(In thousands) Fair value Weighted average estimated useful life (in years)

Trademarks and patents $ 19,500 9

Customer and supplier relationships 16,071 7

Identified intangible assets subject to amortization 35,571

Other identified intangible assets not subject to amortization 860

Total identified intangible assets $ 36,431

In accordance with ASC 805 Business Combinations, the following unaudited pro forma financial information summarizes the combined operating results of Greenbrier and ARI’s manufacturing business as if the acquisition of ARI’s manufacturing business occurred on September 1, 2018. In addition, this unaudited pro forma financial information includes acquisition-related adjustments including depreciation expense to reflect the increased fair value of property, plant and equipment, amortization expense related to identified intangible assets, interest expense on the $50 million convertible senior note and $300 million senior term debt issued, and the related income tax effects. This unaudited pro forma financial information is presented for informational purposes only and does not include adjustments relating to the Company’s expected cost-savings and other synergies, and as such, is not indicative of the results of operations that would have been achieved if the acquisition had occurred on September 1, 2018 or of results that may occur in the future.

Year ended

(In thousands, except per share amounts) August 31, 2019

Net earnings attributable to Greenbrier $ 57,284

Basic earnings per common share $ 1.76

Diluted earnings per common share $ 1.73

62

Note 5 — Inventories

As of August 31,

As of August 31,

Excess and obsolete adjustment

Currency translation effect (91 ) 298 (185 )

Note 6 — Property, Plant and Equipment, net

As of August 31,

Depreciation expense was $75.3 million, $86.6 million and $62.3 million for the years ended August 31, 2021, 2020 and 2019, respectively.

Note 7 — Goodwill

Changes in the carrying value of goodwill are as follows:

(In thousands) Manufacturing Wheels, Repair & Parts Leasing & Services Total

Translation and other adjustments 1,802 — — 1,802

(In thousands) Goodwill

Accumulated goodwill impairment losses (138,234 )

Accumulated other reductions (24,316 )

63

The Company performed its annual goodwill impairment test during the third quarter. For the annual impairment test during the third quarter of 2021, the Company utilized the qualitative assessment allowable under ASC 350 Intangibles – Goodwill and Other to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic considerations, industry and market trends, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base. If based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Based on our review of the qualitative factors, the Company determined for all three of our reporting unit goodwill balances, that a quantitative impairment analysis was not necessary, primarily as a result of positive macroeconomic trends and market indicators during the assessment period.

As of August 31, 2021, our Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $56.7 million and the Europe Manufacturing reporting unit with a goodwill balance of $32.1 million.