<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended November 30, 1998
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from ______ to ______
Commission File No. 1-13146
THE GREENBRIER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 93-0816972
(State of Incorporation)(I.R.S. Employer Identification No.)
One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035
(Address of principal executive offices) (Zip Code)
(503) 684-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The number of shares of the registrant's common stock, $0.001
par value per share, outstanding on December 31, 1998 was
14,254,132 shares.
<PAGE>
THE GREENBRIER COMPANIES, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts, unaudited)
November 30, August 31,
1998 1998
---------- ----------
Assets
Cash and cash equivalents $ 35,730 $ 41,912
Restricted cash and investments 16,378 15,997
Accounts and notes receivable 49,622 47,537
Inventories 95,280 79,849
Investment in direct finance leases 156,811 160,940
Equipment on operating leases 83,161 95,569
Property, plant and equipment 54,054 49,452
Prepaid expenses and other 22,246 14,233
---------- ----------
$ 513,282 $ 505,489
========== ==========
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 142,624 $ 132,121
Deferred participation 46,762 45,243
Deferred income taxes 9,295 11,164
Notes payable 142,090 147,876
Subordinated debt 37,932 37,932
Minority interest 10,990 9,783
Commitments and contingencies (Note 4)
Stockholders' equity
Preferred stock - $0.001 par value, 25,000 shares
authorized, none outstanding - -
Common stock - $0.001 par value, 50,000 shares
authorized, 14,254 and 14,253 outstanding at
November 30, 1998 and August 31, 1998 14 14
Additional paid-in capital 50,550 50,416
Retained earnings 73,623 71,612
Other comprehensive income (598) (672)
---------- ----------
123,589 121,370
---------- ----------
$ 513,282 $ 505,489
========== ==========
The accompanying notes are an integral part of these statements.
<PAGE>
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
Three Months Ended
November 30,
----------------------
1998 1997
--------- ---------
Revenue
Manufacturing $ 100,074 $ 114,626
Leasing and services 20,012 23,584
--------- ---------
120,086 138,210
Cost of revenue
Manufacturing 90,393 106,759
Leasing and services 8,198 9,762
--------- ---------
98,591 116,521
Margin 21,495 21,689
Other costs
Selling and administrative expense 9,500 8,221
Interest expense 4,691 6,126
--------- ---------
14,191 14,347
Earnings before income tax expense,
minority interest and equity in
net loss of unconsolidated subsidiary 7,304 7,342
Income tax expense (3,555) (3,032)
--------- ---------
Earnings before minority interest
and equity in net loss of
unconsolidated subsidiary 3,749 4,310
Minority interest (657) (234)
Equity in net loss of
unconsolidated subsidiary (226) -
--------- ---------
Net earnings $ 2,866 $ 4,076
========= =========
Basic earnings per share $ 0.20 $ 0.29
========= =========
Diluted earnings per share $ 0.20 $ 0.29
========= =========
Weighted average shares outstanding:
Basic 14,254 14,163
Diluted 14,323 14,292
The accompanying notes are an integral part of these statements.
<PAGE>
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended
November 30,
----------------------
1998 1997
--------- ---------
Cash flows from operating activities
Net earnings $ 2,866 $ 4,076
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Deferred income taxes (1,927) (7,785)
Deferred participation 1,519 1,532
Depreciation and amortization 3,849 5,226
Gain on sales of equipment (2,624) (906)
Other 441 190
Decrease (increase) in assets:
Accounts and notes receivable (4,263) (5,402)
Inventories (17,707) 18,928
Prepaid expenses and other (163) 2,718
Increase in liabilities:
Accounts payable and accrued liabilities 6,446 13,152
--------- ---------
Net cash provided by (used in)
operating activities (11,563) 31,729
--------- ---------
Cash flows from investing activities
Acquisition of subsidiaries, net
of cash acquired (3,553) -
Principal payments received under
direct finance leases 4,118 3,766
Proceeds from sales of equipment 21,111 92,549
Purchase of property and equipment (6,695) (7,325)
Investment in restricted cash
and investments (381) (12,277)
--------- ---------
Net cash provided by investing activities 14,600 76,713
--------- ---------
Cash flows from financing activities
Repayments of borrowings (8,483) (66,929)
Dividends (855) (850)
Proceeds from exercise of stock options 119 -
--------- ---------
Net cash used in financing activities (9,219) (67,779)
--------- ---------
Increase (decrease) in cash
and cash equivalents (6,182) 40,663
Cash and cash equivalents:
Beginning of period 41,912 14,384
--------- ---------
End of period $ 35,730 $ 55,047
========= =========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 3,079 $ 4,346
Income taxes 118 15
The accompanying notes are an integral part of these statements.
<PAGE>
THE GREENBRIER COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, unaudited)
Note 1 - INTERIM FINANCIAL STATEMENTS
The consolidated financial statements of The Greenbrier
Companies, Inc. and Subsidiaries ("Greenbrier" or the "company")
as of November 30, 1998 and for the three months ended November
30, 1998 and 1997 have been prepared without audit and reflect all
adjustments (consisting of normal recurring accruals) which, in
the opinion of management, are necessary for a fair presentation
of the financial position and operating results for the periods
indicated. The results of operations for the three months ended
November 30, 1998 are not necessarily indicative of the results to
be expected for the entire year ending August 31, 1999. Certain
reclassifications have been made to the prior year's consolidated
financial statements to conform with the 1999 presentation.
Certain notes and other information have been condensed or
omitted from the interim financial statements presented in this
Quarterly Report on Form 10-Q. Therefore, these financial
statements should be read in conjunction with the consolidated
financial statements contained in Greenbrier's 1998 Annual Report
incorporated by reference into the company's 1998 Annual Report on
Form 10-K.
Note 2 - INVENTORIES
November 30, August 31,
1998 1998
----------- ----------
Manufacturing:
Supplies and raw materials $ 11,966 $ 8,750
Work-in-process 50,815 62,267
Assets held for sale 30,813 2,622
Leasing equipment held for
refurbishment or sale 1,686 6,210
----------- ----------
$ 95,280 $ 79,849
=========== ==========
Note 3 - COMPREHENSIVE INCOME
As of September 1, 1998, Greenbrier adopted Statement of
Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income, which establishes standards for reporting
and display of comprehensive income and its components.
Comprehensive income is net income, plus certain other items that
are recorded directly to shareholders' equity, bypassing net
income. The only such item currently applicable to Greenbrier is
foreign currency translation adjustments. Comprehensive income
(net of income taxes) was $2,940 and $3,902 for the quarters ended
November 30, 1998 and 1997. The adoption of SFAS No. 130 had no
effect on the company's results of operations or financial
position.
Note 4 - COMMITMENTS AND CONTINGENCIES
Purchase commitments of approximately $18,000 for leasing and
services operating equipment were outstanding as of November 30,
1998.
Greenbrier is involved as a defendant in litigation in the
ordinary course of business, the outcome of which cannot be
predicted with certainty. Litigation has been initiated by former
shareholders of Interamerican Logistics Inc. ("Interamerican"),
which was acquired in the fall of 1996. The plaintiffs allege that
Greenbrier violated the agreements pursuant to which it acquired
ownership of Interamerican and seek damages aggregating $4,000
Canadian. Management contends the claim to be without merit and
intends to vigorously defend its position. Management believes
that any ultimate liability resulting from litigation will not
materially affect the financial position, results of operations or
cash flows of the company.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Note 5 - ACQUISITIONS
In September 1998, Greenbrier acquired a 60% interest in a
railcar manufacturer, WagonySwidnica, located in Swidnica, Poland.
Polish investors will retain the remaining ownership interest.
This acquisition establishes a European manufacturing base and
provides access to the European markets, particularly the market
in Poland. The acquisition has been accounted for using the
purchase method and goodwill arising out of the transaction is
included in other assets and is being amortized on a straight-line
basis over 12 years. Assets acquired consisted primarily of plant
and equipment of $7,000 and inventory of $2,000. WagonySwidnica's
functional currency is the Polish Zloty, which is translated to
U.S. dollars at the exchange rate in effect at the balance sheet
date. Revenue and expenses are translated at average rates of
exchange prevailing during the reporting period. Translation
adjustments are accumulated as a separate component of
stockholders' equity. Results of operations of WagonySwidnica have
been included in the accompanying financial statements from the
date of the acquisition. Disclosure of the acquisition on a pro
forma basis as if it had taken place at the beginning of the
period is not required as it is not material to the consolidated
financial position or results of operations for the three months
ended November 30, 1998 and 1997.
Also in September 1998, Greenbrier entered into a joint venture,
Greenbrier-Concarril, with Bombardier Transportation to build
railroad freight cars at their existing manufacturing facility in
Sahagun, Mexico, which expands Greenbrier's North American
capacity, enhances geographic coverage and provides improved
access to the Mexican marketplace. Each party will maintain a 50%
interest in the joint venture. Operations commenced in the first
quarter of fiscal 1999. Greenbrier's investment is being accounted
for using the equity method. Accordingly Greenbrier's share of
earnings or losses is included in consolidated net income as
equity in net loss of unconsolidated subsidiary.
The initial investments, required capital expenditures and
working capital needs for both of these operations were funded by
existing cash balances.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Greenbrier operates in two primary business segments:
manufacturing and leasing and services. The two business segments
are operationally integrated. The manufacturing segment produces
double-stack intermodal railcars, conventional railcars, marine
vessels and forged steel products and performs railcar
refurbishment and maintenance activities, a portion of which is
for the leasing operation. The leasing and services segment owns
or manages a fleet of approximately 35,000 railcars for railroads,
institutional investors and other leasing companies.
Railcars are generally manufactured under firm orders from third
parties, and revenue is recognized when the cars are completed and
accepted by the customer. From time to time Greenbrier commits to
manufacture railcars prior to receipt of firm orders to maintain
continuity of manufacturing operations and some production in a
given period may be delivered in subsequent periods. Greenbrier
may also build railcars for its own lease fleet. Revenues do not
include sales of new railcars to, or refurbishment services
performed for, the leasing operation since intercompany
transactions are eliminated in preparing the consolidated
financial statements. The margin generated from such sales or
refurbishment activity is realized by the leasing segment over the
related life of the asset or upon sale of the equipment.
During the first quarter of 1999, Greenbrier invested in railcar
manufacturing facilities in Poland and Mexico. The investments
were funded through existing cash balances.
The Polish facility, in which Greenbrier acquired a 60% interest,
produces freight cars for the European market. Results of
operations have been included in the accompanying financial
statements since the date of acquisition. European operating
results which includes the Polish facility and related sales and
marketing costs, amounted to a loss of approximately $800,000 for
the period ended November 30, 1998.
Operations commenced at the facility in Mexico during the first
quarter of 1999 with the production of mill gondola cars.
Greenbrier's investment in this facility is being accounted for
under the equity method and accordingly, the results of operations
are included in the Statement of Operations as equity in losses of
unconsolidated subsidiary.
Three Months Ended November 30, 1998 Compared to Three Months
Ended November 30, 1997
Manufacturing
Manufacturing revenue for the three-month period ended November
30, 1998 was $100 million compared to $115 million in the
corresponding prior period, a decrease of $15 million, or 13%.
Revenue resulted primarily from new railcar deliveries which were
1,600 in the current period compared to 1,900 in the prior
comparable period. Approximately 400 railcars were produced and
placed on lease in the current period for delivery or sale in the
second and third quarters. Prior period deliveries included
approximately 400 railcars that were produced in an earlier
period.
The gross margin of 9.7% for the three months ended November 30,
1998 compares favorably to the prior period gross margin of 6.9%
as a result of the efficiencies of longer production runs and a
strong market demand for railcars.
The manufacturing backlog of railcars for sale and lease for all
facilities as of November 30, 1998 was approximately 7,700
railcars with an estimated value of $450 million compared to 6,200
railcars valued at $375 million as of August 31, 1998.
Leasing and services
Leasing and services revenue decreased $4 million, or 17%, to $20
million for the quarter ended November 30, 1998 compared to $24
million for the quarter ended November 30, 1997. The decrease is
primarily a result of the sale of the trailer and container
leasing operation in October 1997 which contributed $4 million to
revenue in the prior year.
Pre-tax earnings realized on the disposition of leased equipment
during the quarter amounted to $2.5 million compared to $657,000
for the corresponding prior period.
Leasing and services operating margin was 59% for the three-month
period ended November 30, 1998, consistent with the prior period.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Other costs
Selling and administrative expense increased $1.3 million, or
16%, to $9.5 million for the three months ended November 30, 1998
compared to $8.2 million for the comparable prior period. This
increase is primarily due to international business development,
sales and marketing.
Interest expense for the three-month period ended November 30,
1998 amounted to $5 million compared to $6 million in the
corresponding prior period. Reduced borrowings due to increased
liquidity as well as normal paydowns of term debt resulted in
lower interest expense.
The increase in minority interest results from improved
contribution of the Canadian manufacturing operation offset by the
loss from the Polish manufacturing operation. The remaining
minority investors' ownership interests in leasing and services
operations were acquired in February 1998.
The income tax provision represents an effective tax rate of 42%
on U.S. operations and varying effective tax rates on foreign
operations resulting in a consolidated effective tax rate of 48.7%
in the current period compared to 41.3% in the prior period. No
tax benefit was accrued for losses of European operations.
Liquidity and Capital Resources
Cash used by operations totaled $12 million for the three-month
period ended November 30, 1998. Overall liquidity has remained
substantially unchanged. During the quarter ended November 30,
1998 assets held for sale, included in inventory, increased $28
million principally due to railcars produced and placed on lease
during the quarter that will be sold in the second and third
quarters. Also during the quarter, $14 million of equipment on
operating lease was sold in the normal course of business.
Credit facilities aggregated $119 million as of November 30,
1998. A $60 million revolving line of credit is available through
May 2000 to provide working capital and interim financing of
equipment for the leasing and services operations. A $40 million
operating line of credit to be used for working capital is
available through February 2001 for U.S. manufacturing operations.
Advances under both the revolving and operating lines of credit
bear interest at rates which vary depending on the type of
borrowing and certain defined ratios. A $16 million (at the
November 30, 1998 exchange rate) operating line of credit, bearing
interest primarily at Canadian prime plus .75%, is available
through March 1999 for working capital and certain capital
expenditures for Canadian operations. An additional $3 million
five-year term loan facility is available for Canadian capital
expenditures. There were no borrowings outstanding under any of
the operating lines or the term facility as of November 30, 1998.
Borrowings under these lines are based upon defined levels of
receivables, inventory and leased equipment.
Capital expenditures totaled $7 million for each of the three
month periods ended November 30, 1998 and 1997. Of these capital
expenditures, approximately $5 million in each period was
attributable to leasing and services operations. Leasing and
services capital expenditures for the remainder of 1999 are
expected to be approximately $54 million. Greenbrier regularly
sells assets from its lease fleet, some of which may have been
purchased within the current year and included in capital
expenditures.
Approximately $2 million of the capital expenditures for each of
the three month periods ended November 30, 1998 and 1997 were
attributable to manufacturing operations. Manufacturing capital
expenditures for the remainder of 1999 are expected to be
approximately $21 million and will include plant improvements and
equipment acquisitions to further increase capacity and enhance
efficiency.
Foreign operations give rise to market risks from changes in
foreign currency exchange rates. Forward exchange contracts are
utilized to hedge a portion of the risk of foreign currency
fluctuations related to a Canadian subsidiary. As of November 30,
1998, forward exchange contracts outstanding for the purchase of
Canadian dollars were $55 million, maturing at various dates
through June 1999. Realized and unrealized gains and losses from
such off-balance sheet contracts are deferred and recognized in
income concurrent with the hedged transaction. Exposure from other
foreign operations did not give rise to material risks at November
30, 1998.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Dividends of $.06 per share have been paid quarterly since 1995.
A quarterly dividend of $.06 per share was declared in January
1999, to be paid in February.
Management expects existing funds and cash generated from
operations, together with borrowings under existing credit
facilities, will be sufficient to fund dividends, working capital
needs, planned capital expenditures and expected debt repayments.
Management anticipates long-term financing will be required and
will continue to be available for the purchase of equipment to
expand Greenbrier's lease fleet.
Year 2000 Readiness Disclosure
The "Year 2000" issue refers to computer programs which use two
rather than four digits to define a given year and which therefore
might read a date using "00" as the year 1900 rather than the year
2000. This could result in the computer shutting down or
performing incorrect computations in programs that have date-
sensitive software. A variety of computer systems, applications
and automated equipment are utilized in daily operations and may
be affected by the Year 2000 issue.
Greenbrier developed a Year 2000 readiness plan which assessed
the impact of the Year 2000 issue on both information systems and
embedded manufacturing control technology. An audit of the Year
2000 readiness plan was performed by an outside consultant.
Greenbrier is developing and implementing a remediation plan for
mission-critical systems. These systems include manufacturing
equipment and internal computer systems supporting the
manufacturing and railcar leasing and services operations.
Greenbrier is working with equipment manufacturers to obtain Year
2000 certification. Those not found compliant will be corrected or
replaced by August 1999. Systems and embedded technology not
already Year 2000 compliant are expected to be corrected by August
1999. As part of ongoing equipment replacement programs, non-
compliant computers will be replaced in advance of any key Year
2000 processing dates and non-compliant software will be corrected
or replaced.
Some critical business systems rely on data supplied by third-
parties. Greenbrier is making efforts to determine the Year 2000
preparedness of these outside entities, but it could be adversely
impacted if its suppliers and vendors do not make necessary
changes to their own systems and products successfully or in a
timely manner. Greenbrier also supplies data in electronic format
to various customers and suppliers.
Greenbrier has key relationships with a number of vendors and
suppliers, including banks and other providers of goods and
services. The company has requested vendors to supply Year 2000
compliance documentation, but it has not yet been determined
whether all of the vendors and suppliers are Year 2000 compliant.
Reliance on single vendor source suppliers, however, is minimal,
and the company seeks to limit sole source supply relationships.
The company could be adversely impacted if its suppliers and
vendors do not make necessary changes to their own systems and
products successfully or timely.
Costs to be incurred in responding to Year 2000 computer system
deficiencies, together with the cost of any required modifications
to the company's systems, beyond ongoing hardware replacements and
software upgrades performed in the normal course of business,
cannot be accurately estimated at this time. Monies spent to date
in assessing and remediating Year 2000 issues have been
approximately $600. Internal costs incurred in responding to the
Year 2000 issue are not separately tracked. Such costs are
principally payroll related costs.
Contingency plans are being developed for continued operations
without, or with reduced functionality, mission-critical systems
and suppliers. These plans are expected to be complete by August
1999. Activation of these plans may result in reduced
capabilities, restricted access to data, slower business processes
and delayed product delivery.
If the remaining elements of Greenbrier's plan to address the
Year 2000 issue are not implemented successfully or timely, the
contingency plan, which has yet to be developed, may need to be
implemented, and at a minimum more time will be devoted to the
process and additional costs may be incurred. In addition,
significant disruption to operations, including slowing the
manufacturing process, resulting in potential revenue loss and
increased costs, could result. Any of these eventualities could
have a material adverse effect on the financial position, results
of operations or cash flows of the company.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Forward-Looking Statements
Statements contained in Management's Discussion and Analysis of
Financial Condition and Results of Operations that are not
statements of historical fact may include forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including, without limitation, statements as
to expectations, beliefs and strategies regarding the future. The
following are among the factors that could cause actual results or
outcomes to differ materially from the forward-looking statements:
general political, regulatory or economic conditions; changes in
interest rates; business conditions and growth in the surface
transportation industry, both domestic and international; currency
and other risks associated with international operations; shifts
in market demand; a delay or failure of acquisitions, products or
services to compete successfully; changes in product mix and the
mix between manufacturing and leasing and services revenue; labor
disputes or operating difficulties which might disrupt
manufacturing operations or the flow of cargo; competitive
factors, including increased competition, new product offerings by
competitors and price pressures; actual future costs and
availability of materials and a trained workforce; production
difficulties and product delivery delays in the future as a result
of, among other matters, changing process technologies and
increasing production; lower than expected customer orders; the
ability to consummate expected sales; delays in receipt of orders
or cancellation of orders; financial condition of principal
customers; and the impact of Year 2000 compliance by the company
or by its customers, suppliers or service partners. Any forward-
looking statements should be considered in light of these factors.
<PAGE>
THE GREENBRIER COMPANIES, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8=K
(a) Exhibits
10.1 Amendment No. 2 to the 1994 Stock Incentive Plan, dated
November 10, 1998.
27.1 Financial Data Schedule
(b) Form 8-K
No reports on Form 8-K were filed during the quarter for which
this report is filed.
<PAGE>
THE GREENBRIER COMPANIES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE GREENBRIER COMPANIES, INC.
Date: January 12, 1999 By: /s/ Larry G. Brady
Larry G. Brady
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the company's
consolidated financial statements for the quarter ended November 30, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> NOV-30-1998
<CASH> 52,108<F1>
<SECURITIES> 0
<RECEIVABLES> 49,622
<ALLOWANCES> 0
<INVENTORY> 95,280
<CURRENT-ASSETS> 0
<PP&E> 54,054
<DEPRECIATION> 0
<TOTAL-ASSETS> 513,282
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 14
<OTHER-SE> 123,575
<TOTAL-LIABILITY-AND-EQUITY> 513,282
<SALES> 0
<TOTAL-REVENUES> 120,086
<CGS> 98,591
<TOTAL-COSTS> 112,782
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,691
<INCOME-PRETAX> 7,304
<INCOME-TAX> 3,555
<INCOME-CONTINUING> 2,866
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,866
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
<FN>
<F1>Of this amount, $16,378 is restricted.
</FN>
</TABLE>
AMENDMENT NO. 2
to
1994 STOCK INCENTIVE PLAN
Pursuant to the authority conferred by Article XI of the
1994 Stock Incentive Plan of The Greenbrier Companies, Inc. (the
"Plan"), Article VI.B of the Plan is amended in its entirety to
read as follows:
"B. Nondiscretionary Awards. Immediately
after the close of each annual meeting of
stockholders (commencing with the 1999 annual
meeting), the Committee shall automatically
grant to each member of the Board of
Directors (including any such person who is
elected at such meeting), other than the
Chairman of the Board of Directors and the
President and Chief Executive Officer of the
Company, an option to purchase 2,500 shares
of Common Stock. The exercise price and term
of such options shall be the same as provided
under Article IX and such options shall
become exercisable in accordance with the
schedule set forth in Article IX.B."
Except as modified by this Amendment No. 2, the Plan, as
heretofore amended by Amendment No. 1, shall remain in full force
and effect and be unamended.
Adopted by the Board of Directors on
November 10, 1998.
/s/ Kenneth D. Stephens
Kenneth D. Stephens, Secretary
