Greenbrier Companies Inc Q1 FY2026 Earnings Call

Hello, and welcome to the Greenbrier Company's First Quarter 2026 Earnings Conference Call. Following today's presentation, we will conduct a question and answer session. 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. At this time, I would like to turn the conference over to Mr. Justin Roberts, Vice President of Financial Operations, The Americas. Mr. Roberts, you may begin.

Thank you, Jerry. Good afternoon, everyone, and welcome to our first quarter of Fiscal 2026 conference call. Today, I am joined by Lori Thakourious, Greenbrier's CEO and President, Brian Comstock, Executive Vice President and President of the Americas, and Michael Donfress, Senior Vice President and CFO. Following our update on Greenbrier's Q1 performance and our outlook for Fiscal 26, we will open call for questions. Our earnings release and supplemental slide presentation can be found on the IR section of our website. Matters discussed on today's conference call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Throughout our discussion today, we will describe some of the important factors that could cause Greenbrier's actual results in 2026 and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of Greenbrier we will refer to recurring revenue throughout our comments today recurring revenue is defined as leasing and fleet management revenue excluding the impact of syndication transactions before I turn the call over to Laurie I would like to take a moment and introduce Travis Williams Greenbrier's new head of investor relations Travis joined Greenbrier this week to lead the IR function his background includes buy side and sell side analyst experience and

most recently he led the IR function in-house at a publicly traded industrial tool manufacturing company please join me in welcoming him thanks Justin excited to be on board welcome Travis and thank you Justin and good afternoon everyone appreciate you guys joining us today Greenberg delivered good first quarter performance exhibiting our discipline execution and the resilience of our business our results demonstrate the strength of our integrated manufacturing and leasing model continued progress on operating efficiency initiatives and determined action on the things we can control as a result meaningful earnings strong liquidity and progress on our long-term strategic priorities were highlights in Q1 our model is designed to outperform during a business environment like the current one and our model delivered producing what we describe as higher lows through the cycle and as reflected in our 15 percent aggregate gross margin this quarter customers across north america and europe are circumspect about capital investments as they evaluate current freight volumes ongoing trade policy considerations and improving rail service that has increased railroad velocity, reducing the near-term pressure for new rolling stock. These conditions impact the timing of new rail car orders, but do not change the underlying long-term replacement demand. In this environment, execution matters, and Greenberg's commercial team continues to perform well. We are competing effectively and securing high-quality orders despite intense competition. As the quarter progressed, order momentum improved, reinforcing our confidence in the durability of customer demand. Brian will provide more details in a few minutes. Trade and tariff policy remains an important consideration for our customers and the industry. While policy considerations influence the timing of customer decisions, it does not change the long-term fundamentals of the rail car replacement cycle or Greenberg's competitive position. We stay engaged with customers and industry stakeholders and are winning business in this evolving landscape. Operationally, we're taking proactive steps to align our manufacturing footprint with current demand levels while continuing to invest in efficiency, cost discipline, and process improvement. Production rates moderated slightly and we adjusted headcount accordingly, primarily in Mexico, which allowed us to intensify our focus on overhead optimization and operational excellence. These actions are structural and position Greenbrier to respond quickly and profitably as the market evolves. In Europe, market conditions remain complex and performance was affected by operating inefficiencies as we continue to execute restructuring and right-sizing initiatives. We're confident that these actions will strengthen our European platform over time and drive improved competitiveness and profitability. Brazil continues to provide diversification within our portfolio. Economic conditions there remain relatively stable, customer engagement is steady, and our operations delivered consistent performance. Our leasing and fleet management business continues to provide stability and growth. As we continue disciplined fleet construction and management, this business remains an important source of recurring earnings and through cycle resilience. Turning briefly to capital allocation, our priorities remain unchanged. We continue to deploy capital where returns are strongest, maintain balance sheet strength and liquidity, and return capital to shareholders. We opportunistically sold rail cars from the fleet at attractive values, recycling capital while contributing meaningfully to earnings and cash flow. looking ahead we are reiterating our fiscal 2026 guidance and while near-term market conditions remain varied our outlook reflects the improved foundation of our business discipline execution and the flexibility built into our operating model we remain confident in our ability to navigate current conditions and position greenbriar for long-term value creation In closing, I want to recognize our employees for their continued focus, flexibility, and Periods like this demand discipline and teamwork, and I am proud of how the Greenberg team continues to execute. Our integrated model, strong liquidity position, and experienced leadership team position us well to manage the current environment and to capitalize as markets recover. And with that, I'll turn the call over to Brian, who will walk through our operational performance in more detail.

Thank you, Lori, and good afternoon, everyone. I'll briefly cover our operating performance for Q1, including orders and business activity in our manufacturing, leasing, and management services units. Commercial activity strengthened late in the quarter, and we converted that into diversified, high-quality orders in a competitive market we remain focused on order quality and backlog mix prioritizing opportunities where we offer differentiated value and can achieve attractive returns we receive global orders for approximately 3,700 rail cars valued at roughly 550 million orders were diversified across regions and car types led by tank cars and covered hoppers. Included in this figure were several specialty rail car orders with higher average selling prices reflecting our ability to support complex and unique customer requirements. Backlog value was relatively unchanged and we ended the quarter with a backlog of approximately 16,300 units valued at about $2.2 billion. As always, we remain focused on order quality and mix to support efficient production scheduling and attractive margins. Turning to manufacturing, we continue to proactively align production levels with current demand conditions and expect to modestly adjust rates further in the second quarter. Headcount reductions continue to cross North American manufacturing, primarily in Mexico, reflecting disciplined workforce alignment. Our management team is experienced and agile, and we continue to manage the business to efficiently navigate the current demand environment. At the same time, we are using this period to achieve greater structural efficiency and cost discipline. Overhead optimization initiatives continue to gain traction, with teams identifying opportunities to streamline processes, reduce fixed costs, and improve productivity. These efforts position our manufacturing platform to scale efficiently as demand recovers. The lease fleet performed at a high level, with utilization nearly 98 percent, strong retention and improving economics on renewals. The size of the fleet remained relatively stable as we recycled capital through opportunistic asset sales in a strong secondary market. We also optimized fleet mix, both in terms of credit quality and car type composition. We expanded use of Green Bar's maintenance network for our lease fleet and drove other enhancements to the customer experience. Combined, these efforts support consistent execution and position the leasing business to continue contributing meaningfully through the cycle. In summary, our teams executed well in Q1. We aligned production with demand, advanced efficiency initiatives, strengthened our backlog, and continued to grow and optimize our leasing platform. These actions reinforced the durability of our operating model and positioned Greenbrier to navigate current conditions while remaining well-prepared for future market expansion. And with that, I'll turn the call over to Michael to discuss our financial results. Thank you, Brian.

Revenue for Q1 was $706 million, essentially in line with expectations. Aggregate gross margin of 15% reflects lower production rates and deliveries than Q4, partially offset by continued strong margins in leasing and fleet management and disciplined execution across the broader manufacturing platform. Selling and administrative expenses were $11 million less than Q4, totaling $60 million. This was driven primarily by lower employee-related expenses, and in addition, Q4 included $3.1 million in European footprint rationalization costs. Operating income was $61 million, approximately 9% of revenue. Diluted EPS was $1.14 and EBITDA for the quarter was $98 million for 14% of revenue, representing a strong result in reflecting the benefits of disciplined execution, selectively recycling capital through fleet sales in a strong used equipment market, and growing contribution from our leasing platform. For the 12 months ending November 30, 2025, our return on invested capital was 10 percent and continues to be within our 2026 target of 10 percent to 14 percent. As noted in our earnings release, effective September 1, 2025, we changed the methodology for allocating syndication activity resulting in syndication activity being reflected in in the manufacturing segment instead of leasing and fleet management segment. This change has no impact on consolidated results. Turning to the balance sheet, Greenbrier's Q1 Liquidity was the highest in the 20 quarters at over $895 million, consisting of more than $300 million in cash on hand and $535 million in available borrowing capacity. We generated $76 million in operating cash flow for the quarter, supported by solid earnings, proceeds from fleet sales, and favorable working capital movements. Liquidity remains robust, reflecting disciplined execution, ongoing working capital management, and a well-structured capital base. Now, switching to capital allocation. We remain committed to responsibly returning capital to our shareholders through a combination of dividends and stock buybacks. Greenbrier's Board of Directors declared a dividend of $0.32 per share. This is our 47th consecutive quarterly dividend and reflects our confidence in the business. Additionally, during the first quarter, we repurchased about $13 million of common stock under our existing authorization. As of quarter end, approximately $65 million is available for future repurchases. We will continue to access this capacity opportunistically, consistent with marketing conditions and our broader capital allocation framework. Now turning to guidance. We are reiterating our operating guidance and updating capital expenditure guidance for fiscal 2026. Our focus remains on driving profitability through operational efficiency, increased recurring revenue, and disciplined capital use. With our resilient business model and strong balance sheet, we are well positioned for continued performance and long-term value creation. Our guidance for fiscal 2026 is as follows. New rail car deliveries of 17,500 to 20,500 units, including approximately 1,500 units in our Greenbrier Max in Brazil. Revenue between $2.7 billion to $3.2 billion. Aggregate gross margin of 16% to 16.5%. Operating margin between 9% and 9.5%. And earnings per share of $3.75 to $4.75. Greenbrier's capital expenditures in manufacturing are projected to be approximately $80 million, and gross investment in leasing and fleet management will be roughly $205 million. Proceeds from equipment sales are expected to be around $165 million. I will point out we are pursuing assets in the used equipment market in an opportunistic, disciplined manner and may end up at a higher investment level. Greenbrier delivered good financial performance in the first quarter and maintained a strong balance sheet and liquidity position. Our integrated business model, disciplined capital allocation, and focus on execution position us well to navigate throughout the cycle and create long-term shareholder value. With that, we'll open the call for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. First question is from Andre Tomchak with Goldman Sachs. Please go ahead.

Good evening. Happy New Year, and thanks for taking my questions tonight. Wanted to start on the manufacturing deliveries, and maybe we're just curious if you could talk a little bit more detail on what visibility you currently have into the second half of this year as far as year-over-year delivery growth and when you might expect to see that, and then maybe just what's driving that between Europe and North America.

Andre, it's good to hear from you. Hope you had a good holiday. This is Justin. And, yeah, we've got pretty good visibility with, I would say, most of our open space, as historically we see it as in the summertime, so kind of the June, July, August time period. But leading into that, we do have pretty good visibility. And I think I would say that we do see some opportunities for year-over-year growth in that time period, since we were kind of ramping down production last summer and will be increasing production heading into our next fiscal year.

Got it. That's helpful. I know it's very early here, but I was just curious, given the recent news and events, Greenbrier's thinking on maybe the potential medium to longer-term impacts related to Venezuela, any indirect or direct impacts on your manufacturing business that we should consider maybe that you guys have thought through?

Hey, Andre, this is Brian. We don't see any impacts at all at this point from Venezuela. There's no lap between what we do in Brazil or other areas, and so quite frankly, we don't think for our business it will be impactful.

And maybe longer term, Andre, I would say broadly, a lot of, if there is going to be additional kind of oil activity, it will be typically handled via pipeline, typically, and any oil over via tank cars is going to be more of a short-term phenomenon.

Okay, that's helpful. Maybe one more for me on manufacturing and the delivery environment. I'm curious, as we sit here today, if you're seeing any incremental improvement or changes in the tenor of customer ordering behavior into December and January? And maybe in that same context, would you expect sequentially, or what would you expect, I guess, sequentially in terms of deliveries, 1Q to 2Q, as well as margin expectations throughout the year relative to the 11% you guys just did?

Yeah, I'll take the first part of that, and I think, Michael, you may take the second part. From the customer perspective, I think in our scripts we talked about how the order activity towards the end of Q3 had picked up, and we're continuing to see that, our Q4, and we're continuing to see that activity into Q1. December was unusually high for that period. It's typically a slower month, and we had a nice number of diverse deliveries come in in December. So we're seeing it continue to tick up.

Right, and I'll take the margin question. You know, as we look across the year, we, you know, we continued our guidance in aggregate gross margin. And, you know, we do see some variability quarter to quarter in margin, but we are looking at a stronger back half of the year versus the first half of the year.

Got it. That's helpful. Thank you. Maybe just shifting a little bit to the leasing side of your business, Are you able to share how lease rates trended sequentially 4Q to 1Q and maybe also just remind us how much of your lease book is up for renewal this year?

Yeah, so I would say for the lease rates, they've been, especially for more of the, I would say, specialty cars like tank cars, lease rates on an absolute basis have been relatively stable. We continue to see strong renewal activity. And then on the more commoditized cars, lease rates have been pressured some, For us, it's about maintaining our focus on discipline, around pricing, and returns focused. And then with regard – oh, go ahead.

Yeah, and I would add – this is Brian, Andre. I would add that year-over-year renewals, we're still seeing double-digit increases on the renewal side. Justin's correct that we're seeing rates, you know, hold. But keep in mind, some of these renewals were done four or five years ago, And so we continue to see, you know, nice uplift in our renewals that are coming up as well.

And I'll just jump in as well to say that when we see more moderated demand for new builds in the current market, that means the existing equipment becomes more valuable, more desired. So that's another thing that's adding to those renewal rates.

And then on the kind of the cars in the fleet, to be kind of renewed overall, we had about $1,500, $1,800 up for renewal as we entered the fiscal year in September, and we've successfully renewed kind of around 35% of that. So we're continuing to trend in the right direction there and feel pretty positive about the rest of the fiscal year.

Understood. And then I guess just on the first quarter, there was a large gain, I think $18 million roughly was more than you did in the entire year last year. I was curious what we should be thinking in terms of full-year gains this year or maybe relative to the first quarter levels, if you could provide that.

Yeah, you know, we did have an opportunistic gain in the first quarter looking at, you know, looking at the market. And, you know, we continue to look at that as the, you know, as the year progresses. you know, we're, you know, we're really excited in terms of what that could do for us this year.

I guess I just throw in that we're active in the secondary market, whether it's from trying to look for assets to add to our own leaflet that we want to grow, but also to take advantage if there's something that's very accretive to our return on those investments.

And, Andre, maybe just to take a step back and you think about as you are managing a leasing business, part of this is you're always taking a look at your portfolio concentrations, your build-out, things like that, and really taking a look at, okay, so where do we maybe have a little exposure? What do we have in our backlog that we're building out and bringing into the fleet? And so there's kind of this constant active management of the portfolio itself. And then when you're able to decide to sell assets and generate gains, you have an assumption around that. But sometimes markets give you a little more than what you expect, and sometimes they don't give you as much as what you expect. But this quarter, we were pleased with where that played out.

Very clear. And maybe just as a follow-up on the leasing fleet itself and growth expectations, you know, should we expect maybe like high single digits or can you comment on the type of fleet growth that you guys expect this year in terms of the lease fleet? I think you did close to double-digit growth in 2025 and mid-teens in 2024 as you guys have pushed more into leasing. So I'm just curious the trajectory we should be thinking about over the near term. It would be very helpful. Thank you.

Yeah, I mean, I think we would say that we're not going to give an explicit number because this is still a very active environment. But we do believe that we will grow this year probably in the single-digit range, maybe a little higher. It kind of depends on how a few different opportunities manifest.

But ultimately, we are committed to growing the leasing business and kind of thinking about this from the long-term shareholder value perspective. understood and maybe just to close out for me two sort of higher level questions uh on the tariff front would you say that those are ultimately an incremental positive or negative to your business and then the same question also goes for the potential for class one rail consolidation would greenbrier be a proponent of rail mergers or would you rather sort of the mergers not go through thanks for all the time today everybody sure and i'll i'll launch into

these and i'm sure that my colleagues will jump in and help out when it comes to tariffs um i will say that thus far it's been neutral to our financial performance although the uncertainty created by the changing landscape in tariffs definitely has been a headwind or has our customers take a pause on committing additional capital for new rail cars so that has been an impact as well um where there are tariffs on foreign sourced materials it allows u.s source materials to have higher prices so that also has resulted in i would say a bit higher prices right now for rail cars which are primarily utilizing steel so that can also be a consideration when you're thinking about an investment so overall I would say the dollar or percentage amount of tariffs has not had a tremendous impact it's more the uncertainty to try to understand the operating environment and what those tariffs might do to supply chains and logistics as our customers are looking at where they sourcing their materials and where their finished goods going to to go and how are they going to be transported. That said, and Brian's shaking his head, so I'm saying I'm going to get this right, I think that most of our customers are coming to terms with the fact that we're just going to all have to live in a slightly more uncertain world, and we just have to get after running our business, and that's what we do day in and day out is deal with whatever's coming up and deal with that. Anything that you would change on?

I think you nailed it, Laurie. It's really, at the end of the day, we've had no financial impact from tariffs, but it does continue to weigh on customers' minds and has them a little seized up. Although pent-up demand, we're starting to see that release, as we said, towards the end of the last queue and into the first part of this queue. We're already seeing that start to release a little bit. So we're starting to find that equilibrium, I believe, between that pent-up demand and the tariff challenges. Super.

And then when it comes to railroad mergers, I try to stay really consistent with my message, which is anything that makes our industry stronger, I am a proponent of. Anything that helps to increase the shift of transportation of goods off of highways and onto the rail, I think is good for our business. so whatever it takes to make our industry a more efficient circulatory system for the u.s economy i am in favor of i've been in this business long enough i've seen a few of these mergers they can be bumpy at times and i'm sure the stp will go through an appropriate process to review it and uh we will all just take it one day at a time thanks all appreciate the time and

The next question is from Bascom Majors with Susquehanna. Please go ahead.

Thanks for taking my questions. Maybe just to follow up on some of the geopolitical angles that we closed with in the prior session here, the USMCA, how engaged are your people or industry organizations or internal or external lobbyists in that effort as that review comes closer and, you know, what are you hearing as far as how that may play out and, you know, how do you feel about the exemptions that have been favorable for the no tariff impact on the rail cards existing into, you know, 2027 and beyond?

Malcolm, thank you for that question. I strongly am supportive of USMCA. I do believe, as I was saying that the rail network is the circulatory system of the U.S. economy, and I think the free flow of rail cars across our border to the north and south is very critical, not just for the rail industry, but for the overall economy. So just like with everything, and maybe as we each get a little bit older, we can look back in the past and say there might be opportunities to refine things and do things a little bit better I think that we could all try to have continuous improvement as part of our vocabulary but I don't think it needs to be totally upside down and and redone I think it's been working really nicely for a very long time and I hope that that's the conclusion that we come to on that maybe back to the guidance just want to follow some of the pacing

comments on deliveries earlier you talked about I think 4,500 or so deliveries for this quarter if you include roughly the run rate on Brazil that would be kind of you know annualized to the lower end of your guidance but I think you also talked about maybe taking reduction down a little bit in the second quarter and then raising it into next year you know and also mentioned some white space in the summer so how do I bring all that together you know where do you have visibility to to get kind of closer to the midpoint of the production guidance for the year where do you need orders to come in and fill some of that white space and you know how do you feel about inquiry levels and

in the level of certainty you need to get there thank you yeah I think I can start out with that Justin and then maybe you and Michael can can fill in But from the order perspective, Baskin, that white space is getting filled as we speak. And, in fact, we're already making plans to ramp the back half of the year to some degree. So some of these headcount reductions are temporary in nature just as we get through the order book and we get to the more robust part of the cycle. So the white space itself is very limited at this stage. And, in fact, in some of our more specialty type of cars, we are indeed going through the planning exercise of bringing people back.

Yeah, and I think Bascom, I mean, if you kind of look at basically kind of how Michael laid out the guidance, we do have more of a ramp in the back half of the year. And I think at this point we would say we have pretty good visibility on that. it's just a matter of assuming that the inquiries we have continue to translate into orders which we have seen an improvement in that over the last few months and then also barring any unforeseen events in the geopolitical front which you know I'm not ready to place a bet on but we do feel pretty good about the trajectory we're on right now and I'll just throw in on there as they both said of having additional um order activity that means we're going to be bringing people back we want to do that in a mindful way we don't we've learned from uh the past that it's not good to

bring back and try to ramp up too quickly but we try to do that in a very very mindful way and i realized bascom that i didn't answer the second half of your earlier question about engagement in USMCA and I will say that we at Greenbrier have been very engaged and submitting comments back on the review for USMCA and I would be I will be encouraging all of the rest of the industry participants to get more engaged because it is very important thank you for that and last one from me and then I'll pass it on, but if we think about the production cadence and rising visibility

and to be able to ramp that back up in the second half of the year, if the order conversions continue at the pace that's improved recently, is the manufacturing gross margin largely a function of the volume you're pushing through? Are there some issues with mix and pricing where that may not be sort of linear?

Yeah, and I think you've got it, Baskin. I think it's really a combination. It's not necessarily linear, and so there is a mixed component to it. But there's also, you know, a production component and absorption of fixed costs and all those things combined as we look at the remainder of the year.

As you do more volume, if you get to that increase in the back half of the year that you're shooting for, do you think that will be a lift on margins, or is it really just more of a revenue story?

Yeah, no, I do think it will be a lift on margin from where we are right now.

Thank you very much.

Thanks, Boston. The next question is from Ken Hexter with Bank of America. Please go ahead.

Hey, good evening, everyone. So you kept your EPS outlook $3.75 to $4.25, but it looks like you have a $0.55 gain on sale this quarter, the $17.7 million, and which sounds like, Laurie, you said you're being opportunistic on some asset sales. So are you decreasing your EPS guide for the rest of the year, given that the gain on sale presumably to this scale was not in your outlook, or is there something else adjusting in those numbers?

Yeah, and thank you for the question. You know, really that was about a 30-cent, you know, impact to our earnings per share, you know, as we looked at it. And, you know, it is impacted by just when, you know, when we're looking at the market and how opportunistic it is. So, you know, that's shifted possibly between quarters as we look at it, and that's why we didn't really affect our bad ends.

And one thing just to clarify, I may have misheard, Ken, but our EPS guidance is 375 to 475, which implies a midpoint of 425.

All right. That's what I meant. Thank you. I misread. But the – so no change to that 375, 475, 425 midpoint despite the gain. Does that – I'm sorry, from that last answer, does that mean you were expecting these gains in your original target or this – I'm just trying to misinterpret or interpret the commentary.

So, again, as we have a growing old lease fleet and just like you see with other operating lessors, we will take advantage of opportunities within the market. And as we put together our guidance for FY26, we did assume that we would be doing some transactions that would benefit EPS.

Okay. Can we presume then, Lori, on that answer, then you've pulled forward all that opportunity, or there's still a lot of opportunity going forward with these large gain potential?

I would say that timing is difficult to predict. When we have a good transaction, as much as we would like to perfectly slot things into each quarter in a lovely, even, smooth, peanut butter way, it doesn't always work that way, and we will close on transactions as they present themselves and as our customers need to close on the transactions. That said, it's a strong market out there. So I'm not saying that we're done on doing transactions. We're looking at stuff that we might sell. We're looking at stuff that we might buy. So it's just going to be part of our business going forward.

Okay. And then you mentioned in the, you know, given the backlog, right, if I look at the new, the cars out of the backlog, the 3,700, 550 million added, that's about 150,000 average ASP, which is up significantly from the 125, but even kind of going back the last few years, I don't know if we've seen a number that high. I think there was commentary in the prepared remarks that there was some higher-value cars in there. You know, we've got a couple of cars that are just so highly valued. Can you just maybe walk through it? I know you never break out a number of whatever it might be, a specific type of tank car or whatever it is. But can you just kind of give us an idea of what would drive something so high?

Yeah, you know, Kenneth, it's Brian. At the end of the day, I don't want to give away too much sensitive information for our competitors, But we do have a number of units that have, I'd say, fairly high ASVs or specialty cars for specialty type of service. It's one of the things that's unique to Green Bar that we spent a lot of money on the innovation and R&D side of the house to perfect so that we could be in a position like this as markets come to us. And it's a market, I would say, that's a growing market that we're looking forward to continuing to build into.

Do they have outsized margins, or just given the components and specialty, it's kind of similar margins to others despite the higher ASP?

Yeah, I prefer not to go into that level of detail.

Okay. SG&A jumped up to 8.5 or 8, somewhere around 8.5%, which was similar to 4Q, but kind of above, I think the guidance was somewhere in the 7.5-ish type range, So maybe an extra $10 million. Is there – are we – were there costs added back in? Maybe just walk us through kind of what's going on in SG&A.

You know, as we set the guidance up at the beginning of the year, we did say we're going to take about $30 million out, you know, year over year. And so, you know, if I look at sequentially where we ended in the fourth quarter, we came down about $11 million. There's really nothing significant in that as a percent of revenue calculation that I would look at. You know, we're still targeting, taking $30 million out year over year.

Was that higher than you would have expected?

I think we would say the G&A is trending in line with what we expected for the year. Maybe it's up a little bit in the quarter by a few million dollars, but not significantly.

So is that because, I'm trying to understand, then the impact on March, it's right, so we're talking about 11% on manufacturing, but then higher SG&A. Was that timed because you added more people or to get more salesmen? Just walk us through what's driving that.

Oh, I think a big piece is there's some additional translation and currency adjustments out of Mexico – or not out of Mexico, out of Europe that, I would say, artificially changed kind of how G&A was tracking. We're not adding people. There's not G&A that is being grown. In fact, I think if you looked at last year, we tracked, we ended around 260, and this year we're going to be in the kind of 225 to 230 range is what we're guiding to. So pretty substantial reductions year-over-year. Helpful.

And last one for me, just as always, the low-line stuff, Justin, if you can be any helpful in terms of how we should think about going forward, you know, the minority was a positive versus versus a negative, equity in loss of unconsolidated was a negative versus a positive. I don't know. Is there any ballpark that we should think about that below the line?

I think probably our activity is, well, I don't know, maybe we can take that kind of touch base on our follow-up calls. I think broadly we're expecting to track where we were at in the prior year and kind of based on our preliminary guidance, earnings from unconsolidated affiliates, which is primarily Brazil, is going to be modestly positive throughout the year. That would be accretive to earnings. And I'm not saying that to you. I have to say it out loud to myself to make sure I don't get myself confused. The earnings or loss attributable to non-controlling interest is our partner's share of earnings in Mexico and in Europe, a negative of about – or an earnings deduction of about a million dollars. We do see that fluctuating throughout the year based on a cadence of activity in Mexico, in northern Mexico, and in Europe. And that's, I guess, that's about kind of as far as we're going to go at this point.

Yeah, I would say that if you were to think about where we're doing our operations and that's what I still call minority interest piece, it's going to, if our earnings and margin are back half-weighted, you're going to have a little bit more of that that's going to be going to our partners in the back half of the year. And, yeah, I think based on our comments, we expect Brazil to remain stable. We're having good performance down there right now.

Wonderful. I think that's it for me. You know, it looks like reiterating all your targets, right, so you're – even with this 4,400, are you still looking for second quarter to decelerate from this fourth quarter, or do you think we kind of hold – is this your minimum value in terms of delivery, quarterly deliveries?

Yeah, you know, we really, really don't, you know, don't really give quarterly guidance. You know, what we are saying, though, is we do expect the back half of the year to be a little bit stronger than what we're seeing in the first half of the year. So.

You can do the math.

You can do the math. Thanks. Thank you, Jim. Appreciate it.

Happy to see you. This concludes our question and answer session. I would like to turn the conference back over to Laurie Tecorias for any closing remarks.

Thank you, everyone, for your attention and your interest in Greenbrier. We appreciate it. And as always, if you have follow-on questions, I know you can reach out to Justin, but you'll quickly come to know Travis Williams, so we're excited to have him be part of the team. Happy New Year, everyone.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.