393657AD3

Executive Summary We operate in two reportable segments: Manufacturing and Leasing & Fleet Management. Our segments are operationally integrated. The Manufacturing segment designs, builds and markets freight railcars and component parts in North America and Europe. We also perform sustainable conversions and railcar maintenance, which includes wheel and axle services. The Leasing & Fleet Management segment owns and leases approximately 20,600 railcars as of May 31, 2026. We offer railcar management, regulatory compliance services and leasing services to railroads and other railcar owners in North America. We continue to operate in an environment characterized by macroeconomic uncertainty, including inflationary pressures, global trade tensions and tariffs, volatility in foreign exchange and interest rates and geopolitical instability. These conditions, along with the potential for a sustained economic slowdown or ongoing supply chain disruptions, could materially and adversely affect our operations and financial performance. Direct impacts may include increased costs for raw materials, labor, and manufacturing inputs, while indirect impacts may include reduced demand for new railcar orders and leasing activity. We are monitoring developments related to tariffs and trade policies, including those imposed under Section 232 of the Trade Expansion Act of 1962 on steel and aluminum, the impact of the recent Notice of Determination on freight couplers from the U.S. Customs and Border Protection and the administration of trade policy in North America. Uncertainty in these areas has adversely affected, and may continue to adversely affect, North American industry-wide demand for new railcars, including demand for our products, and therefore, our results of operations. We remain focused on managing and, to the extent possible, mitigating the potential impacts of these evolving conditions on our business. Despite these potential headwinds, we believe we are well-positioned to continue to execute on our multi-year strategy. In addition, we believe our integrated business model provides flexibility across economic cycles. We maintain a diversified customer base and disciplined approach to managing working capital and operating costs. We continue to execute on our strategic plan of increasing recurring revenue, expanding aggregate gross margin and raising return on invested capital. Recurring revenue is defined as Leasing & Fleet Management revenue excluding the impact of syndication transactions. Backlog Our railcar backlog was 13,800 units with an estimated value of $2.0 billion as of May 31, 2026, with deliveries extending into 2028 and beyond. Our backlog includes approximately $720 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Approximately 12% of backlog units and 13% of estimated backlog value as of May 31, 2026 was associated with our Brazilian manufacturing operations which is accounted for under the equity method. Our backlog of railcar units 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. 26 Segment Information Effective September 1, 2025, we changed our measurement basis for allocating revenue and expenses associated with syndication activity between our Manufacturing and Leasing & Fleet Management reportable segments. This change reflects the information currently provided to our CODM to assess performance and allocate resources and had no impact on our consolidated results of operations or financial position. Prior period segment results have been recast to conform to the current period presentation. See Note 12 - Segment Information to the Condensed Consolidated Financial Statements for additional information for additional information on our reportable segments. Risks, uncertainties and other important factors described in Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2025 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 these items will impact our business. 27 Three Months Ended May 31, 2026 Compared to the Three Months Ended May 31, 2025 Overview Revenue, Cost of revenue, Margin and Earnings from operations presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation. Three months ended May 31, (in millions, except per share amounts) 2026 2025 Revenue Manufacturing $ 529.1 $ 793.4 Leasing & Fleet Management 47.4 49.3 576.5 842.7 Cost of revenue Manufacturing 476.6 672.6 Leasing & Fleet Management 18.8 18.6 495.4 691.2 Margin Manufacturing 52.5 120.8 Leasing & Fleet Management 28.6 30.7 81.1 151.5 Selling and administrative expense 55.2 65.9 Net gain on disposition of equipment (6.0 ) (7.0 ) Earnings from operations 31.9 92.6 Interest and foreign exchange 16.5 13.2 Earnings before income tax and earnings from unconsolidated affiliates 15.4 79.4 Income tax expense (3.0 ) (18.1 ) Earnings before earnings from unconsolidated affiliates 12.4 61.3 Earnings from unconsolidated affiliates 5.1 6.2 Net earnings 17.5 67.5 Net (earnings) loss attributable to noncontrolling interest 1.4 (7.4 ) Net earnings attributable to Greenbrier $ 18.9 $ 60.1 Diluted earnings per common share $ 0.60 $ 1.86 Performance for our segments is evaluated based on Earnings from operations. 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 expense for either external or internal reporting purposes. Three months ended May 31, (in millions) 2026 2025 Earnings (loss) from operations: Manufacturing $ 30.4 $ 98.5 Leasing & Fleet Management 29.2 30.8 Corporate (27.7 ) (36.7 ) $ 31.9 $ 92.6 28 Consolidated Results Three months ended May 31, (in millions) 2026 2025 Increase (Decrease) % Change Revenue $ 576.5 $ 842.7 $ (266.2 ) (31.6 %) Cost of revenue $ 495.4 $ 691.2 $ (195.8 ) (28.3 %) Margin (%) 14.1 % 18.0 % (3.9 %) * Net earnings attributable to Greenbrier $ 18.9 $ 60.1 $ (41.2 ) (68.6 %) * Not meaningful Through our integrated business model, we provide a broad range of custom products and services in each of our reportable segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results. Revenue decreased $266.2 million or 31.6% for the three months ended May 31, 2026 as compared to the three months ended May 31, 2025 primarily due to a 38.5% decrease in deliveries and a change in railcar manufacturing product mix. Cost of revenue decreased $195.8 million or 28.3% for the three months ended May 31, 2026 as compared to the three months ended May 31, 2025 primarily due to a 38.5% decrease in deliveries and a change in railcar manufacturing product mix. Margin percentage decreased 3.9% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025 primarily due to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the three months ended May 31, 2026. Net earnings attributable to Greenbrier decreased $41.2 million for the three months ended May 31, 2026 as compared to the three months ended May 31, 2025 primarily due to: •$70.4 million decrease in Margin attributable to a 38.5% decrease in deliveries and a change in railcar manufacturing product mix. This was partially offset by the following: •$15.1 million decrease in Income tax expense due to lower pre-tax earnings and net favorable discrete items related to our foreign subsidiaries. •$10.7 million decrease in Selling and administrative expense primarily attributed to lower employee-related costs. •$8.8 million change in Net (earnings) loss attributable to noncontrolling interest primarily a result of lower railcar deliveries at our Mexican railcar manufacturing joint venture. 29 Manufacturing Segment Three months ended May 31, (in millions, except railcar deliveries) 2026 2025 Increase (Decrease) % Change Revenue $ 529.1 $ 793.4 $ (264.3 ) (33.3 %) Cost of revenue $ 476.6 $ 672.6 $ (196.0 ) (29.1 %) Margin (%) 9.9 % 15.2 % (5.3 %) * Earnings from operations ($) $ 30.4 $ 98.5 $ (68.1 ) (69.1 %) Earnings from operations (%) 5.7 % 12.4 % (6.7 %) * Deliveries 3,200 5,200 (2,000 ) (38.5 %) * Not meaningful Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products and components, syndication activity associated with leases attached to new railcar sales and performing sustainable conversion services. Manufacturing also generates revenue by providing railcar maintenance services. Manufacturing Revenue decreased $264.3 million or 33.3% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025 primarily due to a 38.5% decrease in deliveries and a change in railcar manufacturing product mix. Manufacturing Cost of revenue decreased $196.0 million or 29.1% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The decrease was primarily attributed to a 38.5% decline in deliveries and a change in railcar manufacturing product mix during the three months ended May 31, 2026. Manufacturing Margin percentage decreased 5.3% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The decrease was primarily attributed to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the three months ended May 31, 2026. Manufacturing Earnings from operations decreased $68.1 million for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The decrease was primarily attributed to a 38.5% decrease in deliveries and a change in railcar manufacturing product mix during the three months ended May 31, 2026. 30 Leasing & Fleet Management Segment Three months ended May 31, (in millions) 2026 2025 Increase (Decrease) % Change Revenue $ 47.4 $ 49.3 $ (1.9 ) (3.9 %) Cost of revenue $ 18.8 $ 18.6 $ 0.2 1.1 % Margin (%) 60.3 % 62.3 % (1.9 %) * Earnings from operations ($) $ 29.2 $ 30.8 $ (1.6 ) (5.2 %) Earnings from operations (%) 61.6 % 62.5 % (0.9 %) * * Not meaningful The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management services and interim rent on leased railcars for syndication. Leasing & Fleet Management Revenue decreased $1.9 million or 3.9% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The decrease was attributed to $0.9 million in lower lease revenue primarily associated with utilization based arrangements and a $0.7 million decline in interim rent on leased railcars for syndication during the three months ended May 31, 2026. Leasing & Fleet Management Cost of revenue increased $0.2 million or 1.1% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The increase was primarily due to higher costs from a larger lease fleet during the three months ended May 31, 2026. Leasing & Fleet Management Margin percentage decreased 1.9% for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The decrease was primarily attributed to lower lease revenue associated with utilization based arrangements during the three months ended May 31, 2026. Leasing & Fleet Management Earnings from operations decreased $1.6 million for the three months ended May 31, 2026 compared to the three months ended May 31, 2025. The decrease was attributed to lower lease revenue primarily associated with utilization based arrangements and a decline in interim rent on leased railcars for syndication during the three months ended May 31, 2026. This was partially offset by a $0.9 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet during for the three months ended May 31, 2026. 31 Selling and Administrative Expense Three months ended May 31, (in millions) 2026 2025 Increase (Decrease) % Change Selling and administrative expense $ 55.2 $ 65.9 $ (10.7 ) (16.2 %) Selling and administrative expense was $55.2 million for the three months ended May 31, 2026 compared to $65.9 million for the prior comparable period. The $10.7 million decrease was primarily attributed to lower employee-related costs for the three months ended May 31, 2026. Net Gain on Disposition of Equipment Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our lease fleet and to manage risk and liquidity. Net gain on disposition of equipment was $6.0 million for the three months ended May 31, 2026 compared to $7.0 million for the prior comparable period. The decrease in Net gain on disposition of equipment was primarily attributed to lower sales of assets from our lease fleet during the three months ended May 31, 2026. Interest and Foreign Exchange Interest and foreign exchange expense was composed of the following: Three months ended May 31, (in millions) 2026 2025 Increase (Decrease) Interest and foreign exchange: Interest and other expense, net $ 18.1 $ 18.7 $ (0.6 ) Foreign exchange gain, net (1.6 ) (5.5 ) 3.9 $ 16.5 $ 13.2 $ 3.3 The $3.3 million increase in Interest and foreign exchange expense for the three months ended May 31, 2026 compared to the three months ended May 31, 2025 was primarily attributed to the change in the Brazilian Real's and Mexican Peso's foreign exchange rates relative to the U.S. Dollar during the three months ended May 31, 2026. Income Tax For the three months ended May 31, 2026, we had income tax expense of $3.0 million on pre-tax income of $15.4 million for an effective tax rate of 19.5%. The effective tax rate was primarily impacted by net favorable discrete items related to our foreign subsidiaries. For the three months ended May 31, 2025, we had income tax expense of $18.1 million on pre-tax income of $79.4 million for an effective tax rate of 22.8%. The effective tax rate benefited from net favorable discrete items related to our foreign subsidiaries. The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to 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 before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense. 32 Earnings From Unconsolidated Affiliates Through unconsolidated affiliates we produce rail and industrial components, including an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis. Earnings from unconsolidated affiliates were $5.1 million and $6.2 million for the three months ended May 31, 2026 and May 31, 2025, respectively. The decrease was primarily due to lower earnings at Axis, a joint venture which manufacturers railcar components, for the three months ended May 31, 2026. Noncontrolling Interest Net (earnings) loss attributable to noncontrolling interest was a loss of $1.4 million for the three months ended May 31, 2026 compared to earnings of $7.4 million for the three months ended May 31, 2025. Net (earnings) loss attributable to noncontrolling interest 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. The $8.8 million change from the prior year is primarily a result of a decrease in earnings due to lower railcar deliveries at our Mexican railcar manufacturing joint venture. 33 Nine Months Ended May 31, 2026 Compared to the Nine Months Ended May 31, 2025 Overview Revenue, Cost of revenue, Margin and Earnings from operations presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation. Nine months ended May 31, (in millions, except per share amounts) 2026 2025 Revenue Manufacturing $ 1,727.6 $ 2,337.2 Leasing & Fleet Management 142.5 143.5 1,870.1 2,480.7 Cost of revenue Manufacturing 1,561.9 1,964.2 Leasing & Fleet Management 54.3 52.8 1,616.2 2,017.0 Margin Manufacturing 165.7 373.0 Leasing & Fleet Management 88.2 90.7 253.9 463.7 Selling and administrative expense 172.5 192.5 Net gain on disposition of equipment (36.7 ) (16.8 ) Earnings from operations 118.1 288.0 Interest and foreign exchange 45.7 58.3 Earnings before income tax and earnings from unconsolidated affiliates 72.4 229.7 Income tax expense (17.0 ) (71.5 ) Earnings before earnings from unconsolidated affiliates 55.4 158.2 Earnings from unconsolidated affiliates 13.3 14.6 Net earnings 68.7 172.8 Net (earnings) loss attributable to noncontrolling interest 1.6 (5.5 ) Net earnings attributable to Greenbrier $ 70.3 $ 167.3 Diluted earnings per common share $ 2.21 $ 5.18 Performance for our segments is evaluated based on Earnings from operations. 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 expense for either external or internal reporting purposes. Nine months ended May 31, (in millions) 2026 2025 Earnings (loss) from operations: Manufacturing $ 99.7 $ 300.9 Leasing & Fleet Management 108.7 87.3 Corporate (90.3 ) (100.2 ) $ 118.1 $ 288.0 34 Consolidated Results Nine months ended May 31, (in millions) 2026 2025 Increase (Decrease) % Change Revenue $ 1,870.1 $ 2,480.7 $ (610.6 ) (24.6 %) Cost of revenue $ 1,616.2 $ 2,017.0 $ (400.8 ) (19.9 %) Margin (%) 13.6 % 18.7 % (5.1 %) * Net earnings attributable to Greenbrier $ 70.3 $ 167.3 $ (97.0 ) (58.0 %) * Not meaningful Through our integrated business model, we provide a broad range of custom products and services in each of our reportable segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our financial results. Revenue decreased $610.6 million or 24.6% for the nine months ended May 31, 2026 as compared to the nine months ended May 31, 2025 primarily due to a 32.7% decrease in deliveries and a change in railcar manufacturing product mix. Cost of revenue decreased $400.8 million or 19.9% for the nine months ended May 31, 2026 as compared to the nine months ended May 31, 2025 primarily due to a 32.7% decrease in deliveries and a change in railcar manufacturing product mix. Margin percentage decreased 5.1% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025 primarily due to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the nine months ended May 31, 2026. Net earnings attributable to Greenbrier decreased $97.0 million for the nine months ended May 31, 2026 as compared to the nine months ended May 31, 2025 primarily due to: •$209.8 million decrease in Margin attributable to a 32.7% decrease in deliveries and a change in railcar manufacturing product mix. This was partially offset by the following: •$54.5 million decrease in Income tax expense due to lower pre-tax earnings and net favorable discrete items related to our foreign subsidiaries. •$20.0 million decrease in Selling and administrative expense primarily attributed to lower employee-related costs. •$19.9 million increase in Net gain on disposition of equipment primarily attributed to higher sales of assets from our lease fleet. •$12.6 million decrease in Interest and foreign exchange expense primarily attributed to higher interest income and the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar. 35 Manufacturing Segment Nine months ended May 31, (in millions, except railcar deliveries) 2026 2025 Increase (Decrease) % Change Revenue $ 1,727.6 $ 2,337.2 $ (609.6 ) (26.1 %) Cost of revenue $ 1,561.9 $ 1,964.2 $ (402.3 ) (20.5 %) Margin (%) 9.6 % 16.0 % (6.4 %) * Earnings from operations ($) $ 99.7 $ 300.9 $ (201.2 ) (66.9 %) Earnings from operations (%) 5.8 % 12.9 % (7.1 %) * Deliveries 10,700 15,900 (5,200 ) (32.7 %) * Not meaningful Our Manufacturing segment primarily generates revenue from manufacturing a wide range of railcar products and components, syndication activity associated with leases attached to new railcar sales and performing sustainable conversion services. Manufacturing also generates revenue by providing railcar maintenance services. Manufacturing Revenue decreased $609.6 million or 26.1% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025 primarily due to a 32.7% decrease in deliveries and a change in railcar manufacturing product mix. Manufacturing Cost of revenue decreased $402.3 million or 20.5% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The decrease was primarily attributed to a 32.7% decline in deliveries and a change in railcar manufacturing product mix during the nine months ended May 31, 2026. Manufacturing Margin percentage decreased 6.4% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The decrease was primarily attributed to an unfavorable change in railcar manufacturing product mix and operating at lower volumes during the nine months ended May 31, 2026. Manufacturing Earnings from operations decreased $201.2 million for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The decrease was primarily attributed to a 32.7% decrease in deliveries and a change in railcar manufacturing product mix during the nine months ended May 31, 2026. 36 Leasing & Fleet Management Segment Nine months ended May 31, (in millions) 2026 2025 Increase (Decrease) % Change Revenue $ 142.5 $ 143.5 $ (1.0 ) (0.7 %) Cost of revenue $ 54.3 $ 52.8 $ 1.5 2.8 % Margin (%) 61.9 % 63.2 % (1.3 %) * Earnings from operations ($) $ 108.7 $ 87.3 $ 21.4 24.5 % Earnings from operations (%) 76.3 % 60.8 % 15.5 % * * Not meaningful The Leasing & Fleet Management segment generates revenue from leasing railcars from our lease fleet, providing various fleet management services and interim rent on leased railcars for syndication. Leasing & Fleet Management Revenue decreased $1.0 million or 0.7% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The decrease was primarily attributed to a $2.9 million decrease in interim rent on leased railcars for syndication during the nine months ended May 31, 2026 and a $1.5 million decrease in management services revenue. This was partially offset by a $3.3 million increase in lease revenue primarily associated with growth of the lease fleet and improved lease rates for the nine months ended May 31, 2026. Leasing & Fleet Management Cost of revenue increased $1.5 million or 2.8% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The increase was primarily due to ongoing costs related to servicing leased railcars for syndication and from a larger lease fleet during the nine months ended May 31, 2026. Leasing & Fleet Management Margin percentage decreased 1.3% for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The decrease was primarily attributed to ongoing costs related to servicing leased railcars for syndication partially offset by improved lease rates during the nine months ended May 31, 2025. Leasing & Fleet Management Earnings from operations increased $21.4 million for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025. The increase was primarily attributed to a $20.1 million increase in net gain on disposition of equipment from higher sales of assets from our lease fleet and increase in rents associated with growth of the lease fleet and improved lease rates for the nine months ended May 31, 2026. 37 Selling and Administrative Expense Nine months ended May 31, (in millions) 2026 2025 Increase (Decrease) % Change Selling and administrative expense $ 172.5 $ 192.5 $ (20.0 ) (10.4 %) Selling and administrative expense was $172.5 million for the nine months ended May 31, 2026 compared to $192.5 million for the prior comparable period. The $20.0 million decrease was primarily attributed to lower employee-related costs for the nine months ended May 31, 2026. Net Gain on Disposition of Equipment Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our lease fleet and to manage risk and liquidity. Net gain on disposition of equipment was $36.7 million for the nine months ended May 31, 2026 compared to $16.8 million for the prior comparable period. The increase in Net gain on disposition of equipment was primarily attributed to higher sales of assets from our lease fleet during the nine months ended May 31, 2026. Interest and Foreign Exchange Interest and foreign exchange expense was composed of the following: Nine months ended May 31, (in millions) 2026 2025 Increase (Decrease) Interest and foreign exchange: Interest and other expense, net $ 50.6 $ 59.2 $ (8.6 ) Foreign exchange gain, net (4.9 ) (0.9 ) (4.0 ) $ 45.7 $ 58.3 $ (12.6 ) The $12.6 million decrease in Interest and foreign exchange expense for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025 was primarily attributed to higher interest income and the change in the Mexican Peso's and Brazilian Real's foreign exchange rates relative to the U.S. Dollar during the nine months ended May 31, 2026. Income Tax For the nine months ended May 31, 2026, we had income tax expense of $17.0 million on pre-tax income of $72.4 million for an effective tax rate of 23.5%. The effective tax rate was primarily impacted by net favorable discrete items related to our foreign subsidiaries. For the nine months ended May 31, 2025, we had income tax expense of $71.5 million on pre-tax income of $229.7 million for an effective tax rate of 31.1%. The effective tax rate was impacted by net unfavorable discrete items related to our foreign subsidiaries. The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to 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 before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense. 38 On July 4, 2025, the U.S. enacted H.R. 1, commonly referred to as the One Big Beautiful Bill Act (OBBBA). We do not expect the provisions to have a material impact on our effective tax rate. Separately, the EU Member States have formally adopted the Pillar Two Directive, which establishes a minimum effective tax rate of 15% under the Organisation for Economic Co-operation and Development (OECD) Pillar Two Framework. These rules must be implemented by each country and became effective for us beginning September 1, 2024. We continue to monitor additional guidance from the OECD and evaluate the potential effects of these changes, though we do not expect a material impact on our effective tax rate. Earnings From Unconsolidated Affiliates Through unconsolidated affiliates we produce rail and industrial components, including an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis. Earnings from unconsolidated affiliates were $13.3 million and $14.6 million for the nine months ended May 31, 2026 and 2025, respectively. The decrease was primarily due to lower earnings at Axis, a joint venture who manufacturers railcar components, for the nine months ended May 31, 2026. Noncontrolling Interest Net (earnings) loss attributable to noncontrolling interest was a loss of $1.6 million for the nine months ended May 31, 2026 compared to earnings of $5.5 million for the nine months ended May 31, 2025. Net (earnings) loss attributable to noncontrolling interest 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. The $7.1 million change from the prior year is primarily a result of a decrease in earnings due to a change in railcar manufacturing product mix at our Mexican railcar manufacturing joint venture. 39 Liquidity and Capital Resources Nine months ended May 31, (in millions) 2026 2025 Net cash provided by operating activities $ 8.1 $ 167.7 Net cash provided by (used in) investing activities 16.5 (127.5 ) Net cash used in financing activities (41.7 ) (69.4 ) Effect of exchange rate changes 13.5 2.6 Decrease in Cash and cash equivalents and Restricted cash $ (3.6 ) $ (26.6 ) We continue to be financed through cash generated from operations and borrowings. At May 31, 2026, Cash and cash equivalents and Restricted cash were $322.8 million, a decrease of $3.6 million from $326.4 million at August 31, 2025. Cash Flows From Operating Activities The $159.6 million decrease in Net cash provided by operating activities for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025 was primarily due to a $104.1 million decrease in Net earnings, a $56.4 million change in Leased railcars for syndication due to timing of syndication activity and a $19.9 million change in Net gain on disposition of equipment. This was partially offset by a $43.6 million net change in working capital accounts, primarily Accounts payable and accrued liabilities, Deferred revenue and Accounts receivable, net. Cash Flows From Investing Activities Net cash provided by (used in) investing activities primarily related to capital expenditures, net of proceeds from sale of assets. The $144.0 million change in Net cash provided by (used in) investing activities for the nine months ended May 31, 2026 was primarily attributable to a $94.9 million increase in Proceeds from the sale of assets and a $61.9 million decrease in Capital expenditures compared to the nine months ended May 31, 2025. Nine months ended May 31, (in millions) 2026 2025 Capital expenditures: Leasing & Fleet Management $ (58.7 ) $ (101.2 ) Manufacturing (88.5 ) (107.9 ) Total capital expenditures (gross) $ (147.2 ) $ (209.1 ) Proceeds from sales of assets 170.3 75.4 Total capital expenditures (net of proceeds) $ 23.1 $ (133.7 ) Capital expenditures primarily relate to additions to our lease fleet and on-going investments in the safety, productivity and improvements of our facilities. Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Fleet Management. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity. Proceeds from sales of assets are expected to be approximately $175 million for 2026. Gross capital expenditures for 2026 are expected to be approximately $285 million for Leasing & Fleet Management and approximately $95 million for Manufacturing, which includes the change in capital expenditures accrued in Accounts payable and accrued liabilities. Capital expenditures for 2026 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities. Cash Flows From Financing Activities The $27.7 million decrease in Net cash used in financing activities for the nine months ended May 31, 2026 compared to the nine months ended May 31, 2025 was primarily attributed to a $56.6 million increase in net borrowings partially offset by $27.9 million change in cash distribution to joint venture partners for the nine months ended May 31, 2026. Our Leasing senior term debt was amended in May 2026 on similar terms, providing for an additional $125.0 million available under a delayed draw facility through November 2026 and extending the maturity date from August 2027 to 40 May 2032. The Leasing senior term debt bears interest at a rate of SOFR plus 1.625%, with principal of $2.6 million paid quarterly in arrears and a balloon payment of $237.0 million due upon maturity. Interest rate swap agreements cover nearly 100% of the principal balance to swap the floating interest rate to fixed rates. Dividend and Share Repurchase Program A quarterly dividend of $0.34 per share was declared on June 25, 2026. The Board of Directors has authorized our company to repurchase in aggregate up to $100.0 million of our common stock. On January 8, 2025, the Board of Directors authorized the extension of the existing share repurchase program from January 31, 2025 to January 31, 2027 and renewed the amount remaining for repurchase to $100.0 million. Under the share repurchase program, shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions. The timing and amount of purchases is 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. During the nine months ended May 31, 2026, we repurchased a total of 313 thousand shares for $13.3 million. During the nine months ended May 31, 2025, we repurchased a total of 507 thousand shares for $21.8 million. As of May 31, 2026, the amount remaining for repurchase under the share repurchase program was $64.5 million. Cash, Borrowing Availability and Credit Facilities As of May 31, 2026, we had $273.7 million in Cash and cash equivalents and $613.5 million in available borrowings. The available balance to draw under committed credit facilities includes $320.0 million on the North American credit facility, $136.0 million on the Mexican credit facilities, $32.5 million on the European credit facilities, in addition to $125.0 million as a delayed draw facility under the Leasing senior term debt agreement. Senior secured credit facilities aggregated to $1.3 billion as of May 31, 2026 which consisted of the following components: Corporate and other — Recourse North American revolving credit facility – As of May 31, 2026, a $600.0 million revolving line of credit existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations. The North American credit facility is secured by substantially all our U.S. assets not otherwise pledged as security for term loans, the warehouse credit facility, or the railcar asset-backed securities. 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. Outstanding commitments under the North American credit facility included letters of credit which totaled $29.3 million and $5.4 million as of May 31, 2026 and August 31, 2025, respectively. Advances under the North American credit facility bear interest at SOFR plus 1.50% plus 0.10% as a SOFR adjustment or Prime plus 0.50% depending on the type of borrowing. The North America credit facility matures in May 2030. European revolving credit facilities – As of May 31, 2026, lines of credit totaling $133.9 million, secured by certain of our European assets, were available for working capital needs of our European manufacturing operations. The European lines of credit include $59.5 million which is guaranteed by us. The European credit facilities have variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.20% to WIBOR plus 1.25% and Euro Interbank Offered Rate (EURIBOR) plus 1.00% to EURIBOR plus 1.90%. The European credit facilities are regularly renewed and currently have maturities that range from September 2026 through May 2028. Mexican revolving credit facilities – As of May 31, 2026, our Mexican railcar manufacturing operations had lines of credit totaling $156.0 million for working capital needs, $56.0 million of which the Company and its joint venture partner have each guaranteed 50%. Advances under these facilities bear interest at variable rates that range from SOFR plus 2.00% to SOFR plus 4.25%. Currently, the Mexican credit facilities have maturities that range from July 2026 through March 2027. 41 Lease fleet — Non-recourse Leasing warehouse credit facility – As of May 31, 2026, a $450.0 million non-recourse warehouse credit facility existed to support the operations of our leasing business in North America. Advances under this facility are secured by a pool of leased railcars and bear interest at the Secured Overnight Financing Rate (SOFR) plus 1.70%. The warehouse credit facility converts to a term loan in September 2027 and matures in September 2029. The following table summarizes our credit facility balances: (in millions) May 31, 2026 August 31, 2025 Lease fleet – Non-recourse: Leasing warehouse credit facility $ — $ 222.3 Corporate and other – Recourse: North American revolving credit facility $ — $ 5.0 European revolving credit facilities $ 101.4 $ 77.6 Mexican revolving credit facilities $ 20.0 $ 70.0 Other Information The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us, 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 May 31, 2026, 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 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 exchange contracts with established financial institutions to protect the revenue or margin on a portion of forecasted foreign currency sales and expenses. Given the strong credit standing of the counterparties, no provision has been made for credit loss due to counterparty non-performance. To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $468.0 million of variable rate debt to fixed rate debt as of May 31, 2026. 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. 42 Off-Balance Sheet Arrangements We do not currently have off balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our Consolidated Financial Statements. Critical Accounting 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. Impairment of long-lived assets - We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When such events or changes in circumstances occur, a recoverability test is performed based upon estimated undiscounted cash flows expected to be realized over the remaining useful life of the asset group. If the carrying amount of an asset group exceeds the estimated undiscounted future cash flows, an impairment would be measured as the difference between the fair value of the asset group and the carrying amount of the asset group. An asset group is generally established by identifying the lowest level of cash flows generated by a group of assets that are largely independent of the cash flows of other assets. Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of asset groups, and the determination of the fair value of real and personal property. Estimates of future cash flows are by nature highly uncertain and contemplate factors that may change over time. Goodwill - We evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amounts of our reporting units exceed their fair value. We test goodwill for impairment by either performing a qualitative or quantitative assessment. When we perform a qualitative assessment, we analyze macroeconomic and industry conditions, financial performance, and cost estimates associated with a particular reporting unit. This assessment requires subjectivity based on cumulative information available at the assessment date. If a qualitative assessment indicates it is more likely than not that the carrying value of a reporting unit exceeds its respective fair value, a quantitative assessment is performed. We performed a qualitative assessment for our annual goodwill impairment test as of March 1, 2026 and determined that it was more likely than not that the fair values of all reporting units with goodwill exceeded their carrying values; therefore, we concluded that goodwill was not impaired. For further information, see Note 5 - Goodwill to the Condensed Consolidated Financial Statements. When we perform a quantitative assessment, we exercise judgment to develop estimates of the fair values of our reporting units based on a weighting of income and market approaches. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows which incorporates forecasted revenues, long-term growth rate, gross margin percentages, operating expenses, and the use of discount rates. Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. 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 make certain estimates and assumptions to determine our reporting units and whether the fair value of each reporting unit is greater than its respective carrying value. The above highlighted judgments contemplate estimates and effects of macroeconomic trends that are inherently uncertain. Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ. 43 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 a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not the position will be sustained upon examination by relevant tax authorities. Our annual tax rate is based on our income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Judgment is required in determining our tax expense and in evaluating our tax positions, as tax laws are complex and subject to different interpretations by taxpayers and government taxing authorities. Our income tax rate is affected by the tax rates that apply to our foreign earnings and could be adversely impacted by higher or lower earnings than anticipated in a particular jurisdiction. In addition to local country tax laws and regulations which may apply minimum taxes, our income tax rate depends on the extent that our foreign earnings are taxed by the U.S. through provisions such as the global intangible low-taxed income (GILTI) tax and base erosion and anti-abuse tax (BEAT). We review our deferred tax assets and tax positions quarterly and adjust the balances as new information becomes available. 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. 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 misstated. 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 14 - Commitments and Contingencies to the Condensed Consolidated Financial Statements. 44