The Greenbrier Companies, Inc. (GBX) 6 Apr 222022 Q2 Earnings call transcript

Hello! And welcome to The Greenbrier Companies, Second Quarter of Fiscal 2022 Earnings Conference Call.

Following today's presentation, we will conduct a question-and-answer session. Each analyst should limit themselves to only two questions. Until that time, all lines will be in a listen-only mode. At the request of the Greenbrier Companies, this conference call is being recorded for instant replay purposes. would turn I to conference time, Mr. this like the to over At

President Roberts Treasurer. Roberts, and Justin Vice Mr. you begin. may

I Chuck. and CEO you, Executive the Furman, President Good everyone, Executive am and Today Greenbrier's and Bill joined Chief CFO. Lorie President; President Brian Vice Downes, Thank Leasing Senior Chairman; by Officer; and welcome Adrian morning, Vice call. Tekorius, to Commercial Comstock, and and

call will for and performance our for open Greenbrier’s up on we the update our Following questions. fiscal outlook XXXX,

forward-looking to the addition issued the discussion materially over Reform our cause Act could beyond actual morning, posted Throughout of some the In include website. press the to we those this And calls hand statements on describe XXXX. with can of in from Mr. factors I'm conference our forward-looking additional release expressed made of metrics to Private and today, the within Matters going Securities be XXXX it that, financial today's that meaning discussed IR important any today to slide Litigation information behalf section of results statement and of differ by found Greenbrier. on in Furman. in presentation or Greenbrier’s will the in

Board assumed good Tekorius and Directors the the an appointed eventful role world past Greenbrier morning time of Justin, you, Lorie newest month Director. of Thank Last in March Lorie One and This everybody. has our week X, been as at our CEO. Greenbrier.

Lorie’s of Greenbrier how a this transistor. With now Board congratulate as color. Greenbrier performance. Executive overall Board’s all in Investor that XXXX. Greenbrier of gender we new representation diverse Directors I'm of still I'm people at at expanded better. serve managed getting begin diversity. to fiscal and you is Further a three today’s and confident at our are very through levels Lorie as we've business to remainder call, but hear things the better and are of identify on proud Omicron pleased year Directors Lorie’s will we factor the I of female. and the that today, have Chairman as Four Member much operations important I first until appointment our of As want our XX as our we are positions development leads

in Just as impacted economies war those we the began operator. everywhere Ukraine impacts add, to has

We human are of the I tragedy true witnessing a all to for and and suffering. a the end to pray swift conflict

it provides While History shifts state. challenges food enhance rail demand gas. also the world into creates functioning in enters crude in world and major The life transportation from by experiencing to meet to and and pressure Ukraine. modes freight. opportunities in as to freight pricing Most for for orders Greenbrier reordered near term upward well fertilizer railway challenge civilian oil, as minerals during to from and help will commodity markets Railroads coal and the keeping economies crisis. suppliers the of constraints as the expansion rail are for from production Russia commodities on traditionally sanctions leading indicators reduced or either shipped and a will the Russia due everybody, are the business that natural has of in war the economies demonstrates and direct the Europe a support the availability The to end created railroads of heightened civilian in time. war ranging on current pressure of cost and commodities, during manner world lives

and fertilizers North policies similar other will rail to impact and Europe transport North global Already in needed The to elsewhere shifting demand of and are trade America creating elevate and products. for food. car energy items produce oil, and America in rising the expect changing in opportunities be Western and prices commodity rail patterns We world. in other Brazil ethanol

rail. distinct one four Freight opportunity rising and with U.S. the of of roads, most cost fuel rail efficient road the a transportation. in to creates rail are times freight efficient modes modal can generation per fuel. is surface rail, from One almost of three trucks. be diesel than Finally, for power moment: electric sustainable of shift more moved diesel, XXX for Think fuel by ton miles freight or just gallon about a that

wear gas moving and Additionally of on and trucks reduces instead reduces train by freight XX% congestion bridges by travel it per highways. greenhouse up to emissions ton tear and and

like products. other and As in in lower must world this turn, rail road road increase the expect notwithstanding of shifts in for efficient, geopolitical industry will need velocity. the irony rail In service the dwell [inaudible] more play cases rail, recognize Ukraine in of the induce many rail as concession rail way to responsibility and times there and beneficiaries. commodities we rail in shifts major to We more fertilizer, and freight this ultimately causes crisis, longer food that landscape car the demand cruel will our make be is stocks road more cars times

to sure adversity years during will choose but the factors I’ll discuss can’t Lorie. affect our continue our for we I'm the we Greenbrier’s opportunities come on the seize to have that, exogenous that them. What be this to with ability the over hand Lorie’s challenges leadership. proven business, call to legacy have always thrive and Now almost, to quarter. meet strong and come that opportunities, ready under to Lorie performance

morning everyone. Thank Bill, good and you,

Before to rest CEO. opportunity as our for Board discuss the Bill serve the Greenbrier I express for to of quarter, and the to the my results like gratitude I’d

team Greenbrier hard work We who have an smart every outstanding and day. at

any diverse quarter our very know increasing shareholder results this tenacity as American may and make X,XXX core our while While the the in the XX% operating the all In predict knowledge the and to the market. from most aggregate prior quarter, strong by driven car highly to units, delivered our focus of on quarter performed it’s and Greenbrier North not situation segments performed value. Greenbrier business well. we has difficult team is or that rail with expected, of the increase posted I opportunities second specific challenges experience, the arise,

Our fleet transactions. XX% optimization lease and our gains lease monetization through increased fleet utilization regular robust team generated and cash and to leasing proceeds

Our leasing as expectations business at achieve we is ahead scale. growth of our operating

Further, behind experienced infection quarterly the the pandemic as the levels are sisters. approximately reached worst them to strong Recently We absenteeism their Charles hopefully rates in Wallis, as and achieved our of performance longtime workforce in for peak XX% contracted condolences Charles we our the is Our Maintenance February, loss. the Services by of we COVID. of variant virus. son declined send the quarter COVID-XX a in our in passed States. due have us. is now employee the significant was a Sadly, United away Group survived and four omicron

supply below manufacturing Our chain percentage quarter, margin was and gross expectations labor impacted issues. by in our the our

Our continues job minimizing production delays. exceptional to simultaneously team severe do global mitigating disruptions to of and sourcing rates support production an increasing

due any across our network material shut line have We downs avoided to availability.

with increasing Additional war material have many improved highly and coming overhead the and absorption Europe the European on and subsequent expect incurred a in and we thought environment quarters were in Ukraine, expenses periods due the improved Operating up higher manufacturers. the The to production. for momentum situation created leading fluid. In to connecting in sourcing is destructive is performance expediting delivery. pricing

costs impacted steel welders. suppliers among and of have to chain. Ukraine deal by the ore, Russia finished operations and finished now biggest energy in European supply rapidly rising iron and been mine are Our [inaudible] and our components and

As integral the during times. supporting Bill economy are rail roads mentioned, an war to

parties. team the management and our best suppliers for outcome Our with production and is all together ensure working customers to maintain

the continued be business service quarter, outside with material maintenance Our impact shortages to labor by an impacted cost variant network on smaller the omicron and having during of the higher workforce.

mitigate to headwinds in implemented results financial beginning the improving are action see QX. plan We from these to

costs momentum sustain remain to as also executing additional year our to opportunities in for our we of plans, second expect half improve and looking the focused margin. on while reduce We the

management another increased services quarter, strong utilization transaction. by Our monetization and leasing and asset driven and grew regular optimization by fleet

are creative to manage rail for data. surface Our of platform or around addition continues rail GMS the and solutions Within end car of redeveloped lease fleet. provide to from North XX,XXX fleets an our fleet, to XXXX managing GMS, over to our XX% and XX% fiscal equipment used launching the the American grown own we fleet servers over management freight units has initiative in to by

our of of this goals and customers external the syndication for imitative our as strategy. as One our execute leasing business, important well continue support on is to insure a leasing we scalable to as

able operating start Looking strong fiscal dynamic, doubt ahead, to maintain for XXXX beyond. we continuing inflation, time. and These issues the disciplined though particular leading our continuing maintaining at our of serve management been execution us team’s Europe We’ve pandemic market a of the human our hallmarks market plan continue were of in liquidity position, to strong see position. pandemic backdrop the by some and the remain well. momentum that supply no the and persist will will war the and There's and chain impact they with throughout

the managing are maintain and business optimistic We our market accordingly outlook.

we operating the next continue as to to and our move improve quarters through expect beyond. We several metrics

before, won't line, along the straight recovery market there way. said and we’ve the As a will challenges follow be

to of continue ahead our we our shareholders. value wherever managing solutions deliver customers to can, and ultimately business are our to challenges these provide We get to to

to hand activity. any As that, the experience, most situation. over leasing our leadership make knowledge of Brian before, the on and Comstock, said our tenacity car rail provide an with current demand update to has and team I the to call I’ll And environment

units Greenbrier XX% car Orders orders first $XXX over million. are through fiscal X,XXX of units good the activity. to valued the already Lorie, in half With increased of new X.Xx. secured everyone. morning book-to-bill XXXX deliveries the quarter, Thanks year at rail X,XXX and of of the

and operations when term New we space more multi-year production XX,XXX case value several largest years. as level, In an multi-year orders $X.X backlog are and backlog the multi-year of and illustrates has rail of translate of the multi-year valuable, this there our it orders improvement. This From greater pricing in enter our Also, billion short a few to in environment. to continue market strength the follow scheduled includes overall portion Greenbrier’s is expect to six revenue that means backlog Historically, is perspective, units backlog visibility. demand a which orders. car reaches production becomes to of this provides this sooner.

million capacity program. occurs that valued $XXX Greenbrier’s our to this part absorbs not As production at a backlog activity, facility of are of of work X,XXX overhead our and scale that refurbishment nature reminder, rail Because contributing the this units manufacturing new while large does car at reflect absorption.

Our most friendly fleet. car rail is to important mode I’m about remains environmentally of sustainably of our part with America’s this growing ensuring an service aging excited customers program partnership transport. North the rail refurbishment refocus

strong seeing demand quarter leasing, continued newly term to ended at to fleet leased and utilization equipment. improve for pricing are Turning Lease and sequentially the XX%. we

of part January release and our GBX issuing anticipated leasing closed As blended repayment dates X.X% asset of investment million our backed XXXX. rated notes, inaugural by with grade securitization XXX leasing coupon enhanced strategy, in a of

Our this two X,XXX liquidity of capital markets team to executed an and is strong quarter, level of half and expect units; the activity of source syndicated highest the in years. syndication activity second profitability we year. Syndication in continue important nearly well the and

activities As important leasing future. are many you of into the well will know, syndication that continue asset disposition and for

our especially for to ahead, of this over Looking cycle, the color the growth. strong on which I’ll more market well that has building, combination team With North better positioned QX of the of forces, is deliver it on rail of in strong optimistic America. in to Adrian we’ve management, believe in management than Greenbrier period car this our demand focus experienced remain seen that, environment momentum light I substantially turn them I and of provide to the about cycles. ability financial and a face is in capitalize results performance. early previous will been

available Quarterly fiscal is from discuss everyone. affirm quarter website. year Brian, supplemental release and highlights the guidance press Today in you, on morning good I and for XXXX. will the sides Thank and our financial also information will

administrative our shortages our and of from of sheet, to in our half disposition the of expense ramping Brazil. rail $XXX includes be and and the from million is of to facility travel rail Mexico and units of of related certain the changeovers $XXX expenses additional million. impact higher of of and reflecting the expect was of Greenbrier’s our highest leasing the about higher balance resulting earnings X,XXX gain primarily In our of $XX positioned gross employee variant, at in consulting, or was million cost, warranty unconsolidated increased $XXX the expense $XX of of specifically million about venture. well of on dynamics. optimization to million sequentially production our was activity. units, margins activity $X.XX an are reflect any Because portfolio. and million accrual Lease joint available ramping cash sequentially, for joint legal of cars. COVID-XX revenue. supply we of benefit in from share employee approximately navigate and liquidity or QX, quarter the million, second new to part gross sequentially, recognized increased revenue diluted monetization production, consisting This levels of $XX This labor interests continued effects million XX% year. a of costs $X.X the was market increased business $X.X mitigation omicron X% per Aggregate the equipment Non-controlling to improved $XX of million, our Net almost end include venture safety. we attributable provides from which Selling Mexico of Second borrowings of months. we at car last of related highlights and ongoing chain, impact of and Net older deliveries JV level of X.X% XX question XXX profitable million. $XXX EBITDA strength and Greenbrier line

as on our debt growth’s borrowing new $X addition years, and refinanced the second leasing including Board the entered receive processing In of several cash end swaps tax a to would This the quarter, Greenbrier’s million interest interest year, well and long per completed QX past outstanding large delays capacity. increasing at We the an of a Directors non-leasing On over quite the be risking after expect facilities we XXnd rate Greenbrier declared reflecting our fiscal our debt core debt Together executing environment. expenses the available QX, term rate of this over lease risk of IRS. dividend to AVS quarter [ph] share, receivables dividend. borrowing reducing floating long portion rates to move interest a all $XXX refund addition consecutive next in $X.XX Greenbrier’s of was our billion fixed of fixed. quarter, of approximate XX, and At in term interest rates fix effectively forward. financing with the of was XX% shortly with and in positions in Greenbrier March

represents approximately As closing $XXX X.X%. of a XXXX repurchases. dividend Since million price, business current Greenbrier’s outlook of to the units of dividends yesterday’s dividend through XXXX yield in reinstating approximately Brazil. we which to and on to dividend annual share our in the includes nearly of fiscal XX,XXX, and Based Delivers Greenbrier-Maxion Greenbrier shareholders XX,XXX returned following: reflect production schedules, capital X,XXX units from trends are affirming

Selling a to in QX colleagues and in As you leasing We expected digits services, I million by $XXX with $XXX balance teens. million, million CapEx be sales administrative fleets. is consider I percent of QX car shared is is expected that add rail our equipment and to expenditures and capital reminder Gross between X,XXX margin expressed close, provided. in approximately is proceeds out an increase approximately the $XXX expensed low are lease unchanged expensed owned sequentially approximately earlier. when a to management in delivery million. million. fiscal in low guidance into To and capitalized double will units These Greenbrier’s XXXX, and our party. are manufacturing expense to leaves reflected not units external guidance margins QX maintenance third leasing and build services. million by million and Gross and $XX $XXX to from of sheet Net in be $XX it of delivered $XXX with

possible. goals. of any half to we Greenbrier effects balance makes will half will now, global of it lingering challenges the Despite this decade, year. And better the we our time a for of face questions. fiscal in successfully positioned a navigate stressed on point Greenbrier’s sheet more at the liquidity we up supply second multi-year than strong the highest are chain, Specifically war the backlog in pandemic achieve the ample a ambitious open in and than and impact

Instructions] ahead. will [Operator Long from first with Please the And question Stephens. Justin go come

March Thanks. I'm question now. if with curious on I was quarter is started running where manufacturing guessing the I you're wanted and progressing right month you margins a give point you even to if possible. than on start on any monthly the color that at a metric gross a lower of could into basis, that's how

for around any wanted half. just specifically in then thoughts ramp the updated a to Thanks. manufacturing margins and back So get sense that gross

morning! – projections, about interesting to Lorie. I right. Good it’s is to projections monthly we're think kind now going we're Justin. This quarterly that would Sure say from of

are that We work manufacturing build get bring through in of on that momentum workforce building momentum rates. higher continued older we month-to-month steady seeing they at as the we've our achieved grove orders, back, into as we we

progression year. that and seeing are the we that continue we expect through So to

Yeah Justin, this well. is Brian as

to Just was as process mind in of keep Lorie that in to what kind QX said ramp-ups the period our of where well. were also is, add most

efficiency week a way those just of lot – now lot ramp-ups our well as plants are visited well. members and of of a So the should last with we board kick and some so those in the under

maybe pieces There Curious then saw the business. given a back freight but second just are with for got the are new Adrian. priorities role, a you're for number about the company on quick expecting just the on to get Okay, would we opportunities specific the we're it. How to lot love And in Greenbrier know the one about half and what the Lorie, thinking I you're cycle. gains in a in, going best thoughts secondly, for sale the events forward? about moving you of geopolitical month strategic with for questions you quarter,

question. a been Justin. lot about talking that a it’s know great You We’ve

As railroad transportation on are it's goods to it are to they wish in exactly going are be the be be beneficial not grains, lanes tremendous fertilizers, with predict improve exactly board Bill one for sort which going on Ukraine crushed to a rail to be mentioned demand difficult those takes in were it rock, to going up, everything sometimes his to very traffic, by of It’s fortunate that to transporting opportunities can no and are also for themselves few in and a the America. we're time to believe things the to bit the going cars. to of going only enough in would and we the drive remark, that it's that’s it's going petroleum going going products. for weeks commodities situation, and come be little rail. war, be that We to going tends That’s but certainly should see change, what while while the transportation bulk seems rails, to how for Russia, so how to be North shippers have efficient, talking them be transport, more back to – ago, these with a of it’s they bunch across I'm while catch Europe, up, to are dealing in them about pick increases of

benefit. I’ll We question. And out – can it So come your that one that things turn first will good to believe of Adrian over to that it’s industry our are war. is answer there

in. Sorry for jumping

thanks and sale. specific on give not to the guidance gains on question. Yeah, going for We're

it’s based to little I at markets, looking think You so know be we'll on that early a tell. the

it at time. Okay, leave that. fair appreciate the I'll I enough.

from Bascome The with Majors next ahead. go question come Susquehanna. Please will

underlying their consolidated, or teens quarter cleaning know manufacturing the up was margins what’s Adrian, low fourth a the comment that about that a talked Yeah comment Can if and that? in Thanks. range. double-digit you manufacturing the / was you clarify assumption to consolidated that’s if you

and strong a would about margins talking to that. expect know imagine, in I might drive you Yeah, manufacturing as consolidated was improvement you’d we

time, you intra-quarter through you the Okay. bit Can you at manufacturing and from needs happen call believe to know XX’s a think some the know little comments, that And still sight you you gets we’re into what that the back know least before? maybe the about, going I you in do to into the you business upper unlock back of said have seeing to potential over of even talk and line that January teens, margin. that the

saying back sustained and early in of I’ll think per and think that little to manufacturing were XX,XXX, exactly our I'm it’s that I of I sort is that our expect as business because I in see XX,XXX enjoy to a when think were being get year trying demand, I was look we operations, was the definitely cars our take I've I'm know to that, out But well sustained forward we achievable. to to rail occur. would that, based the able units, we Right margins America, as bit because if really might that say if demand other seen – on basis here that. now North I what one too manufacturing

that I would is just chime Yeah, in – well. Bill. as I’ll this say

now. metrics the so at initial operating margin day per the the what we and it’s important, the right we’ll you of as that margin volume As dollars units. out everybody focused that dollars we But knows. if an end in see margin from have and through think substantial one the aside dollars margin key the And that percentage, of we're day, facilities really percentage really on that's the we really increase is going about coming well the creating, look of margin about be at

Thank you.

go Please will ahead. next Allison with Wells Poliniak come The question Fargo. from

in just lines you I with your can along Omicron, think I it that quantify to for had would significant that start-ups by pretty out. a morning. QX. for go any sounds margin delay think force to with those Thanks. you know impact I XX you XX% came I work running that, the guys? you and one, want headwind say of reaching to guess know Good guys you talked of like Did you back about guy! Hey from you that,

Hey Allison! question. This is Justin. That’s a great

we to to down driven about how out modestly. six a illustrated, and you identify. out it's impact incurred, our Adrian the underlying It X,XXX ramp-up were $X.X employees of on impacted by are the what is and is our activity plans figure The ability kind But measurable slow quarter. back out, readily underlying of or you of costs it in really to as much challenging normal what to based to to pretty that ramping So period, just we those and the about and and impact definitely thinking, million four X,XXX hard versus when identifiable. did things spoke and think it’s are people people effectively material in week a bring very direct in

little Understood! QX And some getting then we we’re now and as the XX to going less are guys lines are Understood! impact you or still at costs. lines from this start point going or those at

point that of at have some. and We're still north actually this

All of increase brought have the then it's we lines are a of and back continuing the to rates. matter active that

it. Got

Allison? I cars per just interject the momentum numbers the something speak can day. Can to think of I in Brian operating

anecdotally down you margin ARI. were the going Mexico just volume Lorie and drive northern least every in As talk can The increasing it's our around said, about drop cars, in facilities we is to at quarter. to

and be of quarter. cars in see point all get somewhere we to XXX will transitions the this and as have Yeah, stride per XX between underway production increasing XX that line lines of well our once the we’re said, – Justin we of neighborhood we at day are this full here north

balance Any expected Are last percent to me. then color that the for produce of year they is strong in order ’XX year sort Are to guys? getting this for be I’m into pushed the backlog for they you And assuming. on question Agreed. of of production?

Yeah, again we late we of have XXXX still but working don't – the in we at stage. to production me, bullets and and great are backlog into production year's continuing at deal we’re momentum front have figures those this is of our our this well and point. this customers into XXXX in even QX a I about have QX, fiscal flying talking XXXX

you. Thank Great!

next from question will come The Cowen. go Please Elkott Matt ahead. with

momentum on we about of Thanks April, and expect so level morning! kind in My in the how this quarter quarters? quarter. you have that can things second order been you order question fiscal Good the guys. for know far past in you the the Can maybe next to few is and had of talk second March continue

see Yes, robust. We've and of the still activity and don't Brian seen be again, continues so over end activity this already kind is the the strong. stopped Order three very, pipeline at is good day at we've of quarter, to very of lines the the we that what seen anything last this has quarters, on momentum this stage.

to more get maybe fact, to customers immediate and able being space. anything seeing not reaction we’re if In more

get is their in that you a queue. to propelling them orders know So

to the are immediate trying customers are cars for? space, Brian, And they what get looking that types of

cars, maintain truly You extremely to commodities last of all pipeline a upstream know this diverse. EEG couple woodchip and to it. the I sorts, I everything is you think It is It said chemicals. it to is – I’ve of calls very, cars, know It and very from diverse is and downstream demand.

it. Got

you You achieve margins, I be to you shifting to have productions, do reasons lot the know lines been would does all the one not is to you cycles that then or margin driven maybe have historically diversity gross you that know can optimal have good more that production you into to know two flip adjust that, why of more cost have side by of you I one – to in that's – may types have guess order, your and but because to potential? of you involve I limit it's guess is the cars and able mean know the going gross a be this way that, now and

car that’s type. prior observation know It Matt. where and a we focus is periods prior peaks a think you I good will particular question a or good on

a a will So crude car us really demand of a blending way, concentrate while example, types. in margins to broader for variety rail based having by of gross be production allowed certain a across

Brian talking across percentages based rail, the still were higher than margin margins that the production crude allow versus focused in are when we've I processes achieved As we would manufacturing on dollars we’ve was think we’ve our in by about, us had to improved broad achieve and past demand. since the time we

We was I'd do on Bill length of of The types. our – acquisition side. something and practices runs Mexican the of I with Furman, add operation, very like America ARI to best each manufacturing useful really the specialty to the in sharing these add the have car on North like our processes. in streamlined

the runs We have similar to a long plant luxury types. car of of build capacity

Lastly, down store reduce have a different which ability on types weeks. single materially created that line, to used between days car take on a to changeovers to the we just few

see the business, The I that to So a margins. I involved bigger quantities, as the capable which have don't margins years we But dealing of better you improvement. through quite the Matt, last of volume as I see impairment be the know don’t drives this might you to the with of facilities, are on manufacturing smaller volume with. be. big point side that efficiently after at stop more continue you deeply five can

Got final it. Thanks Brian. or just one and for Lori you Bill, question

in handle the the when at you have pent-up backlog. cycle the any the that do eventually eases. those shortage surge then in a material On we and auto production kind of enough question auto for of a any production the autos, of they and does – racks, racks have chip auto risk Are us tell of can once side industry chip flip shortage, because number you if to your the have potential

at Brian. It’s is, Yeah, today particular impact as something significant really great fleet chip question momentum any our I’m question the to focused shouldn’t personally those it’s this the velocity a industry. have point. We it and the answer this on. in auto backlog shortage well a the To is auto of oversubscribed bi-level in relative The total backlog do With however. that as auto fleet, just the of don't in where in is with railroads, really first backlog. the is though have number orders we

need, ramp assets believe short and some dynamic which in also also OEMs Once to there industry fulfill there sizeable and capacity will that the production, the as itself production. auto shift railroads is and solves enough demand dynamic any market the demand fairly itself. for pressure on on well, the manufacturing. chip a that to I aren’t there be to is solving to the end So and but without start up high put going chip there’s

a good, opportunity our quite as sustainable good been So I term it’s for and it’s industry delayed. long this really frankly, that see

just Brian, Yeah say industry, enough the in one manufacturing you there's clarification. When capacity? mean you capacity

into lot big put be think definitely. it's really Manufacturing know attention you capacity. I market a personal of a I this to going and

Got it.

is that Brian, that that there’s you will there – capacity existing not It's manufacturing assets. need So my a be builds. guess for there's do think new within enough

more [inaudible]. Correct! There be a for will demand

that’s of and shortened vehicles going might are into diversity the entities. that be to be also kind of railroads the the know put You

we’re to just customers seeing a our not customers So are this going come. and but inevitably us, seeing shipper railroad –

Thank very Great! you much.

next Hoexter of The Bank question come from Ken ahead. Please with go will America.

great! morning, Hey, everyone. Good

that or would the about Any about that talked consumer there. thoughts or ongoing And was the forecasting before, Is this sale related to there to early follow demand of recently: here? backlog, thoughts any switching clarification you becomes cars terms but – on on you an intermodal the question Just for about from demand. of issue other Obviously given that a on lot maybe the on it, levels presumption initial may a the then on cycle not or the been the Any the mean thinking that that's my gains but a in Just congrats one-time still the diverse too intermodal and quarter? question consumer or you talked be, is different is I guess it said up entity Adrian and in growth gains to slow? big does a leasing that? thoughts

which we back year the way really normal the had one, every we’ve is time. take the being should look gains some if way, on I’ll of you you leasing sale business in So gain ongoing first know and in sales, part

over for quarter, this what our yeah little what the course was So is we year and of just normal one course but business, high started maybe the a activity. – here over very the of

And you is into the And do Brian then do seeing we I’ll for fleet, opportunity look I know so to enter a can a though is regular regarding decide shifts. are you when it when we other advantage think and market basis. we the us something transactions, of even see should these fact, just cost emphasize lot right the some question, a have at the is on of right so the time,

intermodal, We’re bulk automotive other expectation demand expecting to more of the intermodal opposed a in for it’s less or combined commodity. as with whether shift

that’s bottlenecks Yeah, quarter continue in intermodal intermodal shift have reason The and chassis and you a seen constraints haven’t capacity. battling or they is of portion to Lori. in those a adversely with in the take big away because

velocity intermodal to announced the issues, going as fluid go rail long which more you’re As catch go ports production, manufactures those there’s to on and chassis on to of that term growth. away. going When that, the the sustainable drive get you’re programs those railroads resolve up a which is to lot more conversions, bottlenecks and more see truck away, going see is bottlenecks the

talk before. you exposure about What increasing you you Are war then demand. you customers? kind production, parts and out to a supply talked your your of you the where Ukraine? And from know Can Great! have Poland you of – they bit Russia, your of exposure – there? in the benefit terms in mentioned are you sometimes Lorie, mentioned can chain kind of Do about about a

with of source the our sourcing customers, other our those and of are of components Ukraine, steel we teams are to but in areas. Ukraine. very where engaged Russia Most in chain iron the supply no or customers the customers and are western European Russia impacts so There ore Sure. bulk of coming determining our commodities and appropriate global and can out areas areas

benefits So global having of such that’s one sourcing a strong of team. the

It seeing are any know we fluid a is you right So, situation. back not pull now.

on making the inventory customer’s the build We maintaining needs. and ground on we’ve our wagon right our that to are focused the production, got satisfy certain

CEO on the role thanks and for the Great! time. Congrats

Thanks Ken.

The KeyBanc next with Steve Markets. go question ahead. from will Barger come Capital Please

morning. good Thanks,

understand I as does double single XX%, I digit that and back low right, consolidated the to sequential and high progression XQ low is probably. that half, more think in margin get so digit we you so XX% digits XQ XQ Just Should think said or well? low improvements in the with between double teen, XQ

Low double digits.

So quarters. great. That's both

Steve, its Justin.

be expect to QX Just see to clear, we progression from do in QX.

Understood, okay, there. so step-up a sequential

and with of situation parts availability the Just versus terms on European same disruption just operating and in Romania ground another on for from update natural can Like, on are operations, how Poland you what just question your relative is location and much your issues of you us on the and of events given percentage costs electricity and us current come gas, to remind can going on to deliveries question the Ukraine, labor. expected Europe? there

costs far – to Ukraine on we with that war the in shipping is both themselves refusals part adjacent In not adjacent war. of on take Ukraine, the an this customers contracts and Thus haven't the seen those so we that components point, There customers delivery our and safe plan Poland capacity. as is and you that. important. of but side certain many costs are the key require thanks on to have at questions. pass effect the are always and very location very, being the Bill and the associated from are your increased steel. these countries Furman Romania first by Steve, to in the cases the the to to parts going they Europe, west We both I’m Poland, – appreciate of affected directly calls. for is

none Going of as going of Russia because in grain rely wheat and no major Russia but in are fertilizer is and be they an across world point, a produce affects Romania Europe, see fertilizers, back there's and are fright both the expect into effects are between the at XX on to food in business our it trade effects of XX% Ukraine XX%, there their and that stage. least the Poland It Western something Ukraine at pollution do – and The any half East-West fluid this the dynamic, traffic in of production. of for countries. or is none and We is borders, to earlier like and Ukraine war so it not to countries it and NATO situation combining Russia, there.

Yeah.

– don’t the part the of of the question? you part why And repute question second

the were deliveries Just wondering coming for the what year. Europe this of from percentage guidance

XX%. around of kind about, It’s

term I Astra don't is you're And the How own. given of remaining or about will can window about likely that a that soon Okay. just talking part us think from transact or that opened prospects? the the how you thinking just you to you're deal longer tell dynamics open rail

deal situation partner. to with that close I me Lorie with Let the are our very also. and

owns of partner XX% Rail consolidated. Astra Greenbrier Our

partners in us We remain now. international to are very valuable is to a asset relationship. actually right of partnership There partner a this having certain advantage jurisdictions very, expecting stable and is German

future. the a intending structure in in ownership So not near change we're the

a one while not just dollars, terms then Got one I that's is went end. leverage? fleet of Loan-to-value fleet target sneak see XX% huge I'll what at you the lease to last is right in. XX% in but just from year it! do the And know on for small, the lease range philosophically difference

leverage, in debt. Well, keep that large securities part that asset a non-recourse in successful are this of issuance rate are done we’ve the now – mind fixed with this we really with back and especially

leverage, insulating sale. for something is guys to the It certain sheet, and ratio for while factors. like are it's so assets So XX/XX XX% have within calling standard. we're XX%, as company is constantly balance XX% a you what leasing we range monetizing well our on is now, it

it’s maturity we know ladders That's and a all is leverage the and sales, as monetizing, diversification. Asset portfolio of managing this are the important company. in diversifying you growing, in to the is leasing suite the appropriate constantly very quality

Right, okay great. Thank you.

concludes This I question-and-answer back to the to session. over like conference turn Mr. would our

sir. remarks. Justin ahead Please Roberts for any closing go

you for attention Thank your today. and much very time

day! great Have reach any Thank a have to you. please Investorrelations@gbrx.com. you questions, out If

conference today's for has concluded. now you presentation. The attending Thank

disconnect. may You now