THE GREENBRIER COMPANIES, INC.

FORM10-K

TABLE OF CONTENTS

Forward-Looking Statements

From time to time, The Greenbrier Companies, Inc. and its subsidiaries (Greenbrier or the Company) or their representatives have made or may makeThis Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements as to expectations, beliefs and strategies regarding the future. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by us with the Securities and Exchange Commission (SEC), including this filing on Form10-K and in the Company’s President’s letter to stockholders that is typically distributed to the stockholders in conjunction with this Form10-K and the Company’s Proxy Statement.1995. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Investors should not place undue reliance on forward-looking statements, which speak only as

Many of the date theythese risks and other factors are made and are not guarantees of future performance. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

These forward-looking statements rely on a number of assumptions concerning future events and include statements relating to:

The following factors, among others, could cause actual results or outcomes to differ materially from the forward-looking statements:

Any forward-looking statements should be considered in light of these factors.predict. Words such as “affirms,” “anticipates,” “believes,” “forecast,” “potential,”  “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,”  “seeks,” “estimates,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions identify forward-looking statements. In addition, statements regarding expectations of cost savings or our ability to navigate current challenges, or operate efficiently when the freight industry market recovers or any other statements that explicitly or implicitly draw trends in our performance or the markets in which we operate, or characterize future events or circumstances are forward-looking statements.

These forward-looking statements are not guarantees of future performancerisks and are subject touncertainties, as well as other risks and uncertainties that could cause our actual results to differ materiallysignificantly from the results contemplated by the forward-looking statements. Manymanagement’s expectations, are described in greater detail in Item 1A, “Risk Factors”, Item 1, “Business – Backlog”, Item 7, “Management’s Discussion and Analysis of the important factors that will determine these resultsFinancial Condition and valuesResults of Operations.” and Item 9A. “Controls and Procedures – Inherent Limitations on Effectiveness of Controls.” Forward-looking statements are beyond our ability to control or predict. Youbased on currently available operating, financial and market information and are cautionedinherently uncertain. Investors should not to place undue reliance on any forward-looking statements, which reflect management’s opinionsspeak only as of the date hereof.they are made and are not guarantees of future performance.  Actual future results and trends may differ materially from such forward-looking statements. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.

In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in this Form10-K, including, without limitation, those contained under the heading, “Risk Factors,” contained in Part I, Item 1A of this Form10-K.

All references to years refer to the fiscal years ended August 31^st unless otherwise noted.

The Greenbrier Companies is a registered trademark of The Greenbrier Companies, Inc. Gunderson, Maxi-Stack,Auto-Max II, and YSDMulti-Max are registered trademarks of Gunderson LLC. YSD is a trademark of Gunderson Rail Services LLC.

PART I

Introduction

We are one of the leading designers, manufacturers and marketers of railroad freight car equipment in North America, Europe, South America and South America.other geographies as opportunities arise. We manufacture railcars in Brazil through a strategic investment that we account for under the equity method of accounting andalso are a manufacturer and marketer of marine barges in North America. We are a leading provider of freight railcar wheel services, parts, repair and refurbishment in North America through our wheels, repair & parts business.America. We also offer railcar management, regulatory compliance services and leasing services to railroads and related transportation industriesrailcar owners or other users of railcars in North America. Through unconsolidated affiliates we produce rail and industrial components and rail castings, tank heads and other components.hold an ownership stake in a railcar manufacturer in Brazil.

We operate an integrated business model in North America that combines freight car manufacturing, wheel services, repair, refurbishment, component parts, leasing and fleet management services. Our model is designed to provide customers with a comprehensive set of freight car solutions by utilizing our substantial engineering, mechanical and technical capabilities as well as our experienced commercial personnel. ThisOur integrated model allows us to develop cross-selling opportunities and synergies among our various business segments and to enhancethereby enhancing our margins. We believe our integrated model is difficult to duplicate and provides greater value for our customers.customers and investors.

We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Financial information about our business segments as well as geographic information is located in Note 1918 - Segment Information to our Consolidated Financial Statements.  Prior to August 20, 2018, we operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW Railcar Services (GBW) railcar repair joint venture, which resulted in 12 repair shops returned to us. Beginning on August 20, 2018, GBW Joint Venture was no longer considered a reportable segment.

The Greenbrier Companies, Inc., is incorporated in Oregon. Our principal executive offices are located at One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035, our97035. Our telephone number is (503)684-7000 and our Internet website is located athttp://www.gbrx.com.

Products and Services

Manufacturing Segment

North American Railcar Manufacturing-We manufacture a broad array ofmost freight railcar types currently in use in the North America, which includes most railcar types otherAmerican market (other than coal cars.cars) and we continue to expand our product features and functionality. We have demonstrated an ability to capture high market shares in many of the car types we produce. The primary products we produce for the North American market are:

Conventional Railcars- We produce a variety of covered hopper cars for industrial and food grade starches, grain, fertilizer, cement, heavy ore minerals, plastic pellets, and petrochemicals as well as gondolas and open top hoppers for steel, metals and aggregates. We also produce a wide range of boxcars, which are used in the transport of paper products, perishables and general merchandise. Our flat car products include center partition cars for the forest products industry, and heavy-duty flat cars.

Tank Cars - We produce a variety of tank cars, including general service, pressurized, coiled, lined, insulated carbon steel and stainless steel tank cars. These are designed for the transportation of petroleum products, ethanol, liquefied petroleum gas (LPG), caustic soda, chlorine, fertilizers, vegetable oils, bio-diesel and various other products.

Intermodal Railcars- We manufacture a comprehensive range of intermodal railcars. Our most importantpopular intermodal product is our articulated double-stack railcar. The double-stack railcar is designed to transport containers stackedtwo-high on a single platform and provides significant operating and capital savings over other types of intermodal railcars.

Tank CarsAutomotive- We produce a variety of tank cars, including both general and certain pressurized tank cars, which are designed for the transportation of products such as petroleum products, ethanol, liquefied petroleum gas, caustic soda, chlorine, urea ammonium nitrate, vegetable oils,bio-diesel and various other products and we continue to expand our product offerings.

Automotive- We manufacture a full line of railcar equipment specifically designed for the transportation of light vehicles. Our automotive offerings include theAuto-Max II andMulti-Max products, which are designed to carry automobiles, SUVs and trucks efficiently.

Conventional Railcars- We produce a variety of covered hopper cars for the grain, fertilizer, sand, cement and petrochemical industries as well as gondolas and open top hoppers for the steel, metals and aggregate markets. We also produce a wide range of boxcars, which are used in the transport of paper products, perishables, general merchandise and commodities. Our flat car products include center partition cars for the forest products industry, bulkhead flat cars, heavy-duty flat cars, and solid waste service flat cars.

European Railcar Manufacturing-Our European manufacturing operations produce a variety of tank, automotive and conventional freight railcar (wagon) types, including a comprehensive line of pressurized tank cars for liquid petroleum, LPG gas, chlorine and ammonia andnon-pressurized tank cars for light oil, chemicals and other products. In addition, weour European manufacturing operations produce flat cars, coil cars for thecoil steel and metals, market, gondolas, sliding wall cars, hoppers and automobile transportertransport cars.

Marine Vessel Fabrication -Our Portland, Oregon manufacturing facility, located on a deep-water port on the Willamette River, includes marine vessel fabrication capabilities. The marine facilities also increase utilization of steel plate burning and fabrication capacity providing flexibility for railcar production. U.S. coastwise law, commonly referred to as the Jones Act, requires all commercial vessels transporting merchandise between ports in the U.S. to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag. We manufacture a broad range of Jones Act ocean-going and river barges for transporting merchandise between ports within the U.S. including conventional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates and other heavy industrial products and dump barges.United States. Our primary focus is on the larger ocean-going vessels although the facility haswe have the capability to compete in other marine-related products.Our Portland, Oregon manufacturing facility, located on a deep-water port on the Willamette River, includes marine vessel fabrication capabilities.

Wheels, Repair & Parts Segment

Wheel Services-We operate a large wheel services network in North America. Our wheel shops operating in eight locations, provide complete wheel services including reconditioning of wheels and axles in addition to new axle machining, and finishing and downsizing. Through a joint venture partnership we also provide axle machining, finishing and downsizing.

Railcar Repair, Refurbishment and Maintenance-We operate a railcar repair, refurbishment and maintenance network in North America including repair shops certified by the Association of American Railroads (AAR). Our repairsrepair shops operating at 12 locations, perform heavy railcar repair, refurbishment and routine railcar maintenance for third parties and for our leased and managed railcar fleet.

Component Parts Manufacturing- Our component parts facilities operating in four locations, recondition and manufacture railcar cushioning units, couplers, yokes, side frames, bolsters and various other parts. We also produce roofs, doors and associated parts for boxcars.

Leasing & Services Segment

Leasing-Through our North AmericanWe operate a railcar leasing business ourin North America. Our relationships with financial institutions and operating lessors combined with our ownership of a lease fleet of approximately 8,1008,300 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication and 200 held as finished goods inventory), enables us to offer flexible financing programs to our customers including operating leases of varied intervals and “by the mile” leases to our customers.leases. The percentage of owned units on lease excluding newly manufactured railcars available for sale or lease was 90.4% at August 31, 2020 with an average remaining lease term of 3.0 years and an average age of 8.2 years. In addition to leasing our own railcars, we frequently originate leases of railcars, which are either newly built or refurbished by us, or buy railcars frombought in the secondary market, and sell the railcars and attached leases to financial institutions and subsequently provide such institutionstypically with multi-year management services under multi-year agreements. As an equipment owner and an originator of leases, we participate principally in the operating lease segment of the market. TheUnder the majority of our leases, are “full service” leases whereby we are responsible for maintenance and administration.administration of the leased cars. Assets from our owned lease fleet are periodically sold to take advantage of market conditions,accommodate customer demand, manage risk and maintain liquidity.

Management Services- Our North American management services business offers a broad array of software and services that include railcar maintenance management, railcar accounting services (such as billing and revenue collection, car hire receivable and payable administration), total fleet management (including railcar tracking using proprietary software), fleet logistics, administration and railcarre-marketing. We currently provide management services

for a fleet of approximately 357,000393,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America. In addition, we have aour Regulatory Services Group which offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services.

Customer Profile

Unconsolidated Affiliates

U.S. Axle Manufacturing – We have a 41.9% interest in Axis, LLC (Axis), a joint venture that manufactures and sells axles to its joint venture partners for use and distribution both domestically and internationally in traditional freight railcar markets and other railcar markets. We obtained our ownership interest in Axis as part of the acquisition of the manufacturing business of American Railcar Industries, Inc. (ARI) on July 26, 2019.

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Brazilian Railcar Manufacturing -We have a 60% ownership interest in Greenbrier-Maxion Equipamentos EGreenbrier Maxion-Equipamentos e Serviços Ferroviários S.A. (Greenbrier-Maxion), the leading railcar manufacturer of freight railcars in South America, located near São Paolo,Paulo, Brazil. Greenbrier-Maxion also assembles bogies and offers a range of aftermarket services including railcar overhaul and refurbishment.

Brazilian Castings and Component Parts Manufacturing -We have a 24.5%29.5% ownership interest in Amsted-Maxion Fundição Ee Equipamentos Ferroviários S.A. (Amsted-Maxion Cruzeiro)(Amsted-Maxion) based in Cruzeiro, Brazil. Amsted-Maxion Cruzeiro is a manufacturer of various castings and components for railcars and other heavy industrial equipment.  Amsted-Maxion Cruzeiro has a 40% ownership position in Greenbrier-Maxion and is integrated with the operations of our Brazilian railcar manufacturer.

Other Unconsolidated Affiliates-We have other unconsolidated affiliates which primarily include joint ventures that produce rail and industrial castings and tank heads.components.  

Backlog

The following table depicts our reported railcar backlog subject to third party railcar backlogsale or lease in number of railcars and estimated future revenue value attributable to such backlog, at the dates shown:

Our total manufacturing backlog of railcar units as of August 31, 2018 was approximately 27,400 units with an estimated value of $2.74 billion, of which 21,200 units are for direct sales and 6,200 units are for lease to third parties. Approximately 3%9% of backlog units and 2%6% of the estimated backlog value as of August 31, 20182020 was associated with our Brazilian manufacturing operations which isare accounted for under the equity method.

Based on current production schedules, approximately 20,50013,500 units in the August 31, 20182020 backlog are scheduled for delivery in 2019.2021. The balance of the production is scheduled for delivery in 20202022 and beyond. Multi-year supply agreements are a part ofcommon in the rail industry practice.industry. Backlog units for lease may be syndicated to third parties or held in our own fleet depending on a variety of factors. A portion of the orders included in backlog reflects an assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future as customers select railcar specifications, which may impact the dollar amount of backlog. Marine backlog as of August 31, 2018 was $61$51 million compared to $42and $100 million as of August 31, 2017.2020 and 2019, respectively.

Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms. Customers may attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time. We cannot guarantee that our reported backlog will convert to revenue in any particular period, if at all.

Customers

Our customers across our segments include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies. We have strong, long-term relationships with many of our customers. We believe that our customers’ preference for high quality products, our technological leadership in developing innovative products, our focus on being highly responsive to our customer’s needs and competitive pricing of our railcars have helped us maintain our long-standing relationships with our customers.

In 2018,2020, revenue from two customers TTX Company (TTX) and Wells Fargo & Company (Wells Fargo), accounted for approximately 31%26% of total revenue, 36%30% of Manufacturing revenue, 16%14% of Leasing & Services revenue and 2% of Wheels, Repair & Parts revenue and 1% of Leasing & Services revenue. No other customers accounted for greater than 10% of total revenue.

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Raw Materials and Components

Our products require a supply of materials including steel and specialty components such as brakes, wheels and axles. Specialty components purchased from third parties represent a significant amount of the cost of most freight cars. Our customers often specify particular components and suppliers of such components. Although the number of alternative suppliers of certain specialty components has declined in recent years, there are at least two available suppliers for each of these components.

Certain materials and components are periodically in short supply which could potentially impact production at our new railcar and refurbishment facilities. In an effort to mitigate shortages and reduce supply chain costs, we have entered into strategic alliances and multi-year arrangements for the global sourcing of certain materials and components, we operate a replacement parts business which aids in our vertical integration and we continue to pursue strategic opportunities to protect and enhance our supply chain. We periodically make advance purchases to avoid possible shortages of material due to capacity limitations of component suppliers, shipping and transportation delays and possible price increases.

In 2018,2020, the top ten suppliers for all inventory purchases accounted for approximately 52%47% of total purchases. Amsted Rail Company, Inc.The top supplier accounted for 19%17% of total inventory purchases in 2018.2020. No other suppliers accounted for more than 10% of total inventory purchases. We believe we maintain good relationships with our suppliers.

Competition

We are currently one of the secondtwo largest railcar manufacturer in North Americamanufacturers of the sevenfive major railcar manufacturers competing in North America. There are also a handful of specialty builders who focus on niche markets. We believe that in Europe we are in the top tier of railcar manufacturers. European freight car manufacturers are largely locatedThrough our 60% ownership interest in central and eastern Europe where labor rates are lower and work rules are more flexible. WeGreenbrier-Maxion, we are the leading railcar manufacturer in South America. The railcar manufacturing industry is becoming more global as customers are purchasing railcars from manufacturers outside of their geographic region. In all railcar markets that we serve, or participate in, we compete on the basis of quality, price, reliability of delivery, product design and innovation, reputation and customer service and support.

Competition in the marine industry is dependent on the type of product produced.produced, proximity to delivery point, and manufacturing capacity. There are few competitors that build productas wide an array of products types similar to ours.as we build. We compete on the basis of price, quality, reliability of delivery, launching capacity and experience with certain product types.

Competition in the wheels, repair & parts businesses is dependent on the type of product or service provided. There are many competitors in the railcar repair and refurbishment business and an increasing number of competitors in the wheel services and other partsthese businesses. We compete primarily on the basis of quality, timeliness of delivery, customer service, location of shops, price and engineering expertise.

There are at least twenty institutions in North America that provide railcar leasing and services similar to ours. Many of them are also customers that buy new railcars from our manufacturing facilities and used railcars from our lease fleet, as well as utilize our management and repair services. Many of these institutions have greater financial resources than we do. We compete primarily on the basis of quality, price, delivery, reputation, service offerings and deal structuring and syndication ability. We believe our strong servicing capability and our ability to sell railcars with a lease attached (syndicate railcars), integrated with our manufacturing, repair shops, railcar specialization and expertise in particular lease structures provide a strong competitive position.advantage.

Marketing and Product Development

In North America, we leverage an integrated marketing and sales effort to coordinate relationships in our various segments. We provide our customers with a diverse range of equipment and financing alternatives designed to satisfy each customer’s unique needs, whether the customer is buying new equipment, refurbishing existing equipment or seeking to outsource the maintenance or management of equipment. These custom programs may involve a combination of railcar products, leasing, refurbishing and remarketing services. In addition, we provide customized maintenance management, equipment management, accounting and compliance services and proprietary software solutions.

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In Europe and South America, we maintain relationships with customers through market-specific sales personnel. Our engineering and technical staff works closely with their customer counterparts on the design and certification of railcars. Many European railroads are state-owned and are subject to European Union (EU) regulations covering the tender of government contracts.

Through our research and customer relationships, insights are derived into the potential need for new products and services. Marketing and engineering personnel collaborate to evaluate opportunities and develop new products and features. Recent product launches include theDura-Max open top hopper and small pressurized tank cars optimized for the transport of chlorine. Research and development costs incurred during the years ended August 31, 2020, 2019 and 2018 2017 and 2016 were $6.0$5.8 million, $4.2$5.4 million and $2.7$6.0 million, respectively.

Patents and Trademarks

We have a number of U.S. andnon-U.S. patents of varying duration, and pending patent applications, registered trademarks, copyrights and trade names that are important to our products and product development efforts. The protection of our intellectual property is important to our business and we have a proactive program aimed at protecting our intellectual property and the results from our research and development. We have obtained a number of U.S. and non-U.S. patents of varying duration, and pending patent applications, registered trademarks, copyrights and trade names. We believe that manufacturing expertise, the improvement of existing technology and the development of new products are as least as important as patent protection in establishing and maintaining a competitive advantage in our market.

Environmental Matters

We are subject to national, state and local environmental laws and regulations concerning, among other matters, air emissions, wastewater discharge, solid and hazardous waste disposal and employee health and safety. Prior to acquiring facilities, we usually conduct investigations to evaluate the environmental condition of subject properties and may negotiate contractual terms for allocation of environmental exposure arising from prior uses. We operate our facilities in a manner designed to maintain compliance with applicable environmental laws and regulations. Environmental studies have been conducted on certain of our owned and leased properties that indicate additional investigation and some remediation on certain properties may be necessary.

Portland Harbor Superfund Site

Our Portland, Oregon manufacturing facility (the Portland Property) is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting our manufacturing facility, as a federal “National"National Priority List”List" or “Superfund”"Superfund" site due to sediment contamination (the Portland Harbor Site). Our company and more than 140 other parties have received a “General Notice”"General Notice" of potential liability from the EPA relating to the Portland Harbor Site. The letter advised us that we may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including usour company (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities havedid not signedsign such consent, but nevertheless contributed moneyfinancially to the effort. TheEPA-mandated RI/FS was produced by the LWG and cost over $110 million during a17-year period. We bore a percentage of the total costs incurred by the LWG in connection with the investigation. Our aggregate expenditure during the17-year period was not material. Some or all of any such outlay may be recoverable from other responsible parties. The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, entered into anon-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor site.Site. Approximately 110 additional parties signed tolling agreements related to such allocations. On April 23, 2009, weour company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims;Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case#3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 16, 2020. 14, 2022.

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The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s EPA's January 6, 2017 ROD identifies aclean-up remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA typically expects its cost estimates to be accurate within a range of-30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data it wants to collectcollected over a2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of ourthe Portland Oregon manufacturing facilityProperty as well as upstream and downstream of the facility. It also includes a portion of our riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit. The EPA’sEPA's ROD concluded that more data was needed to better defineclean-up scope and cost. On December 8, 2017, the EPA announced that Portland Harbor is one of 21 Superfund sites targeted for greater attention. On December 19, 2017, the EPA announced that it had entered a new AOC with a group of four potentially responsible parties to conduct additional sampling during 2018 and 2019 to provide more certainty aboutclean-up costs and aid the mediation process to allocate those costs. The parties to the mediation, including us, haveour company, agreed to help fund the additional sampling.sampling, which is now complete. The EPA requested that potentially responsible parties enter AOCs during 2019 agreeing to conduct remedial design studies. Some parties have signed AOCs, including one party with respect to RM9W which includes the area offshore of our manufacturing facility. We have not signed an AOCin connection with remedial design, but will potentially be directly or indirectly responsible for conducting or funding a portion of such RM9W remedial design. The allocation process is continuing in parallel with the process to define the remedial design.

The ROD does not address responsibility for the costs ofclean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA’sEPA's selected cleanup remedy will be determined at an unspecified later date. Based on the investigation to date, we believe that we did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to our property precedes our ownership of the Portland Oregon manufacturing facility.Property. Because these environmental investigations are still underway, including the collection of newpre-remedial design sampling data by EPA, sufficient information is currently not available to determine our liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, we may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources. In addition, we may be required to perform periodic maintenance dredging in order to continue

to launch vessels from our launch ways in Portland, Oregon, on the Willamette River, and the river’sriver's classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect our business and Consolidated Financial Statements, or the value of ourthe Portland property.Property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including usour company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor.Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et al.,United States Court for the District of Oregon Case No.3i17-CV-00164-SB. We, along with many of the other defendants, moved to dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiffplaintiff will seek. The case has been stayed until January 14, 2022.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

We have entered into a Voluntary Cleanup Agreement with the DEQOregon Department of Environmental Quality (DEQ) in which we agreed to conduct an investigation of whether, and to what extent, past or present operations at ourthe Portland propertyProperty may have released hazardous substances into the environment. We have also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and we are discussing with the DEQ potential remedial actions which may be required. Our aggregate expenditure has not been material, however we could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties.

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Regulation

We must comply with the rules of the U.S. Department of Transportation (USDOT) and the administrative agencies it oversees including the Federal Railroad Administration in the U.S. and Transport Canada in Canada who administer and enforce laws and regulations relating to railroad safety. These regulations govern equipment and safety appliance standards for freight cars and other rail equipment used in interstate and international commerce throughout North America. The AAR promulgates rules and regulations governing the safety and design of equipment, relationships among railroads and other railcar owners with respect to railcars in interchange, and other matters. The AAR also certifies railcar builders and component manufacturers that provide equipment for use on North American railroads. These regulations require maintaining certifications with the AAR as a railcar builder, repair and service provider and component manufacturer, and products sold and leased by us in North America must meet AAR, Transport Canada, and Federal Railroad Administration standards.

The primary regulatory and industry authorities involved in the regulation of the ocean-going barge industry are the U.S. Coast Guard, the Maritime Administration of the USDOT, and private industry classing organizations such as the American Bureau of Shipping.

The regulatory environment in Europe consists of a combination of EU regulations and country specific regulations, including a harmonized set of Technical Standards for Interoperability of freight wagons throughout the EU. The EU approval regime was modified to replace country specific approvals with a single, harmonized EU process. The switch created short term delays in wagon certification, but over time streamlined the process. The wagon certification process is improved and currently is the same or shorter than it was previously. The regulatory environment in Brazil consists of oversight from the Ministry of Transportation, the National Agency of Ground Transportation and the National Association of Railroad Transporters. In all other countries, we conform to country specific regulations where applicable.

Employees

As of August 31, 2018,2020, we had approximately 13,40010,600 full-time employees at our consolidated entities, consisting of 12,1009,700 employees in Manufacturing, 1,000600 in Wheels, Repair & Parts and 300 employees in Leasing & Services and corporate. In Manufacturing, 7,3004,600 employees all of whom are located in Mexico and Europe, are represented by unions. At our Wheels, Repair & Parts locations, 73approximately 30 employees are represented by a union. We believe that our relations with our employees are generally good.

Additional Information

We are a reporting company and file annual, quarterly, current and special reports, proxy statements and other information with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Through a link on the Investor Relations section of our website,http://www.gbrx.com, we make available the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Report on Form10-K; Quarterly Reports on Form10-Q; Current Reports on Form8-K; and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. All such filings are available free of charge. Copies of our Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter and the Company’sCompany’s Corporate Governance Guidelines are also available on our web site athttp://www.gbrx.com. In addition, each of the reports and documents listed above are available free of charge by contacting our Investor Relations Department at The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.

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certain conditions, including potential adjustment to prices due to changes in prevailing market prices, or due to lower prices for new orders accepted by us from other customers for similar cars on similar terms and conditions during relevant time periods. Our reported backlog may not be converted to revenue in any particular period and some of our contracts permit cancellations with limited compensation that would not replace lost revenue or margins. In addition, some customers may attempt to delay orders, cancel or modify a contract even if the contract does not allow for such cancellation or modification, and we may not be able to recover all revenue or earnings lost due to a breach of contract.contract or a contract may be found to be unenforceable. The likelihood of attempted cancellations, or modifications, of contractsrejection and non-payment for our products generally increases during periods of market

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weakness. The timing of converting backlog to revenue is also materially impacted by our decision whether to lease railcars, sell railcars, or syndicate railcars with a lease attached to an investor. We cannot guarantee that our reported backlog will convert to revenue in any particular period, if at all. Actual revenue from such contracts may not equal our anticipated revenues based on our backlog, and therefore, our backlog is not necessarily indicative of the level of our future revenues.

We derive a significant amount of our revenue from a limited number of customers, the loss of or reduction of business from one or more of which could have an adverse effect on our business.

A significant portion of our revenue is generated from a few major customers. Although we have some long-term contractual relationships with our major customers, we cannot be assured that our customers will continue to purchase or lease our products or services or that they will continue to do so at historical levels. A reduction in the purchasing or leasing of our products or a termination of our services by one or more of our major customers could have an adverse effect on our business and operating results.

We could be unable to lease railcars at satisfactory rates, remarket leased railcars on favorable terms upon lease termination or realize the expected residual values for end of life railcars due to changes in scrap prices, which could reduce our revenue and decrease our overall return or effect our ability to sell leased assets in the future.

The profitability of our railcar leasing business depends on our ability to lease railcars to our customers at satisfactory rates, and to remarket, sell or scrap railcars we own or manage upon the expiration of existing lease terms. The total rental payments we receive under our operating leases do not fully amortize the acquisition costs of the leased equipment, which exposes us to risks associated with remarketing the railcars and the risk of not realizing the expected residual values. Our ability to lease or remarket leased railcars profitably is dependent upon several factors, including, but not limited to, market and industry conditions, cost of and demand for competing used or newer models, costs associated with the refurbishment of the railcars, market demand or governmental mandate for refurbishment, assumptions related to expected residual values and interest rates. A downturn in the industries in which our lessees operate and decreased demand for railcars could also increase our exposure to remarketing risk because lessees may demand shorter lease terms, requiring us to remarket leased railcars more frequently. Furthermore, the resale market for previously leased railcars has a limited number of potential buyers. From August 31, 2015 to August 31, 2018, the percentage of railcars in the fleet on lease has declined from approximately 97% to 94%. Our inability to lease, remarket or sell leased railcars on favorable terms could result in reduced revenues and margins or net gain on disposition of equipment and decrease our overall returns and affect our ability to syndicate railcars to investors.

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

Our current operations

We own, lease, operate or have invested in businesses that have manufacturing facilities in Mexico, Brazil and Europe, and have customers and suppliers located outside of the U.S. and any future expansion of our international operations are subject toUnited States. Instability in the risks associated with foreign and cross-border business transactions and activities. Political, macroeconomic, political, legal,trade, financial, marketlabor or economic changes marketconditions in the countries where we,or instability could limitour customers or curtail suppliers, operate couldnegatively impactour foreign businessactivitiesand operations.Some foreigncountriesin which we operateor mayoperatehave regulatory authoritiesthatregulate railroadsafety railcar design and railcar component part rail equipment design performance and manufacturing.Ifwe fail to obtain and maintaindo not have appropriate certifications, of our railcars and railcar parts within the various foreign countries where we operate or may operate, we may couldbe unableto marketand sellour railcarsrail equipment in those countries. In addition, unexpectedmarkets. Adverse changesin regulatory requirements, tariffs and other trade barriers, more stringent rules relatingforeign regulations applicable to us or our customers, such as labor, or the environment, adverse trade,tax, consequences and currencyand price exchange controlsregulations, couldlimit our operations and, makethemanufactureand distributionof our products difficult. Sovereign risk exists related to

international governments that include, but may not be limited to, governments stopping paymentsdifficult, and delay or repudiating, renegotiating or nullifying their contracts, nationalizing private businesses and assets or altering banking, foreign exchange or tax regulations. The uncertainty of the legal environment orgeo-political risks in these and other areas could limit our ability to enforcerepatriate income derived from foreign markets.

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

Among the political risks we face outside the U.S. are governments nationalizing our business or assets, or repudiating or renegotiating contracts with us, our customers or our suppliers. In our cross-border business activities, we could experience longer customer payment cycles, difficulty in collecting accounts receivable or an inability to effectively protect our intellectual property. Because we have operations outside the U.S., weWe couldbe adverselyaffectedby violationsof theU.S.Foreign CorruptPracticesAct and similarworldwideanti-corruption laws. We operate in parts of the world that have experienced governmental corruption to some degree, andlaws, which mayconflictwith local business customs in certain circumstances, strict compliance jurisdictions.The failureto complywith anti-corruption laws governing internationalbusinessmay conflictresultin substantialpenaltiesand fines and reputational harm. Transactions with non-U.S. entities expose us to business practices, local customs, and practices. The failure to complylegal processes with laws governing international business practiceswhich we may result in substantial penalties and fines. Any international expansion or acquisition that we undertake could amplify these risks related to operating outside of the U.S. Our development of customer relationships in areas outside of the U.S. may expose us to uncertainties arising from local business practices, judicial processes, cultural considerationsnot be familiar, as well as difficulty enforcing contracts and international political and trade tensions and our limited knowledge of foreign markets or our inability to protect our interests.

tensions.Ifwe areunableto successfully manage the risks associated with our internationalforeign and cross-border business activities, our results of operations, financial condition, liquidityand cashflowscouldbe negativelyimpacted.

Fluctuationsin foreigncurrencyexchange ratescould leadto increasedcostsand lower profitability.

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

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

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

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

Our manufacturingoperationsdepend in parton our abilityto obtaintimelydeliveriesof materials, componentsand servicesin acceptablequantitiesand qualityfromour suppliers.In 2020, the top ten suppliers for all inventory purchases accounted for approximately 47% of total purchases. The top supplier accounted for 17% of total inventory purchases in 2020. No other suppliers accounted for more than 10% of total inventory purchases. Certaincomponentsof our products,particularlyspecialized componentslikecastings,bolsters,trucks,wheelsand axels,and certainservices,such as liningcapabilities,are currentlyonly availablefroma limitednumberof suppliers.Ifany one or moreof our suppliersceaseto provideus with sufficientquantitiesof our componentsor servicesin a timelymanneror on termsacceptableto us, or ceaseto provideservicesor manufacturecomponents of acceptablequality, or go out of business, we couldincurdisruptionsor be limitedin our productionof our productsand we couldhave to seekalternativesourcesforthesecomponentsor services.

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

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

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

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

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

Updates or changes to our informationtechnologysystemsmayresultin problemsthatcould negatively impacted.impactour business.

Changes impacting international trade

Wehaveinformationtechnologysystems,comprisinghardware,network,software,people,processesand corporate tax provisionsotherinfrastructurethatareimportanttotheoperationofourbusinesses.Wecontinuetoevaluateandimplement upgradesandchangestoinformationtechnologysystemsthatsupportsubstantiallyallofouroperatingandfinancial functions.Wecouldexperienceproblemsinconnectionwithsuchimplementations,includingcompatibilityissues, trainingrequirements,higherthanexpectedimplementationcostsandotherintegrationchallengesanddelays.A significantproblemwithanimplementation,integrationwithothersystemsorongoingmanagementandoperationofoursystemscouldnegativelyimpactourbusinessbydisruptingoperations.Suchaproblemcouldalsohavean adverseeffectonourabilitytogenerateandinterpretaccuratemanagementandfinancialreportsandother informationonatimelybasis,whichcouldhaveamaterialadverseeffectonourfinancialreportingsystemand internalcontrolsandadverselyaffectourabilitytomanageourbusiness.

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

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

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

We own, lease, operate or have invested in joint ventures or entities which have manufacturing facilities in Mexico, Brazil and Europe. Our business benefits from free trade agreements such as the North American Free Trade Agreement (NAFTA) and we also rely on various U.S. corporate tax provisions related to international commerce as we build, market and sell our products internationally. NAFTA and future import taxes have been under scrutiny by the U.S. administration. On September 30, 2018 the President of the U.S. and the U.S. Trade Representative announced a new trade pact with the governments of Canada and Mexico called the United States-Mexico-Canada Agreement (USMCA). We believe the benefits we currently receive under NAFTA will continue under the USMCA. To take effect, the USMCA must be enacted by the U.S. Congress under laws governing Trade Promotion Authority. It is expected NAFTA will remain effective until this occurs. Any changes in trade treaties, corporate tax policy, import taxes and foreign policies could materially adversely and significantly affect our business, financial condition and results of operations.

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

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

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

We depend on skilledlaborin themanufactureof railcarsand marinebarges,repair,refurbishmentand maintenanceof railcarsand provisionof wheel servicesand supplyof parts.Some of ourfacilitiesarelocatedin areaswhere demandforskilled laborers laboroftenexceedssupply.Shortagesof sometypesof skilled laborers laborsuch as weldersand machineoperatorscouldrestrictour abilityto maintainor increase productionrates,leadto productioninefficienciesand increaseour laborcosts. Due to the competitive nature of the labor markets in which we operate and the cyclical nature of the railcar industry, the resulting employment cycle increases our risk of not being able to recruit, train and retain the employees we require at efficient costs and on reasonable terms, particularly when the economy expands, production rates are high or competition for such skilled labor increases. Our costs to recruit, train and retain necessary, qualified employees may exceed our expectations. If we are unable to recruit, train and retain adequate numbers of qualified employees on a timely basis could materially adversely affect our business and results of operations.

The rail freight industry could become oversupplied and the use of railcars as a significant mode of transporting freight could decline, become more efficient over time, experience a shift in types of modal transportation, and/or certain railcar types could become obsolete.

The rail freight industry could become oversupplied, which could have a significant impact on the pricing, lease rates or demand for new railcars. In addition, if railcar transportation becomes more efficient from an increase in

velocity or a decrease in idle times, especially if coupled with lower freight volumes, some of which may be permanent due to a reduction in coal volumes, this could significantly reduce the demand for our products and could adversely affect our results of operations. As the freight transportation markets we serve continue to evolve and become more efficient or are disrupted through technological developments, the use of railcars may decline in favor of other more economic modes of transportation. Features and functionality specific to certain railcar types could result in those railcars becoming obsolete as customer requirements for freight delivery change. Our operations may be adversely impacted by changes in the preferred method used by customers to ship their products or changes in demand for particular products. The industries in which our customers operate are driven by dynamic market forces and trends, which are in turn influenced by economic and political factors. Demand for our railcars may be significantly affected by changes in the markets in which our customers operate. A significant reduction in customer demand for transportation or manufacture of a particular product or change in the preferred method of transportation used by customers to ship their products could result in reduced demand for railcars and the economic obsolescence of our railcars, including those leased by our customers.

We face aggressive competition by a concentrated group of competitors and a number of factors may influence our performance. If we are unable to compete successfully, our market share, margin and results of operations may be adversely affected.

We face aggressive competition by a concentrated group of competitors in all geographic markets and in each area of our business. In addition, other companies may attempt to enter markets in which we compete. Some of these competitors are owned or financially supported by foreign countries or sovereign wealth funds, and may potentially sell products and services below cost, or otherwise compete unfairly, in order to gain market share. These markets are intensely competitive and we expect it to remain so in the foreseeable future. Competitive factors, including introduction of competitive products, new entrants into certain of our markets, price pressures, limited customer base and the relative competitiveness of our manufacturing facilities and products affect our ability to compete effectively. In addition, new technologies or the introduction of new railcars or other product offerings by our competitors could render our products obsolete or less competitive. If we do not compete successfully, our market share, margin and results of operations may be adversely affected.

We may pursue strategic opportunities, including new joint ventures, acquisitions and new business endeavors that involve inherent risks, any of which may cause us not to realize anticipated benefits and we could have difficulty integrating the operations of companies that we acquire or joint ventures we enter into, which could adversely affect our results of operations.

We may not be able to successfully identify suitable joint venture, acquisition and new business endeavors to invest in or complete potential transactions on acceptable terms. Our identification of suitable joint venture opportunities, acquisition candidates and new business endeavors involve risks inherent in assessing the values, strengths, weaknesses, risks and profitability of these opportunities. Our failure to identify suitable joint ventures, acquisition opportunities and new business endeavors may restrict our ability to grow our business. If we are successful in pursuing such opportunities,Additionally, we may be required to expend significant funds or incur additional debt, which could materially adversely affect our results of operations and limit our ability to obtain financing for working capital or other purposes and we may be more vulnerable to economic downturns and competitive pressures.

The success of our acquisition and joint venture strategies depends upon our ability to successfully complete acquisitions, to enter into joint ventures and to integrate any businesses that we acquire into our existing business. The integration of acquired business operations could disrupt our business by causing unforeseen operating difficulties, diverting management’s attention fromday-to-day operations and requiring significant financial resources that would otherwise be used for the ongoing development of our business. The difficulties of integration could be increased by the necessity of coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. Each of these circumstances could be more likely to occur or be more severe in consequence in the case of an acquisition or joint venture involving a business that is outside of our core areas of expertise. In addition, we could be unable

to retain key employees or customers of the combined businesses. We could face integration issues including those related to operations, internal controls, information systems and operational functions of the acquired companies and we also could fail to realize cost efficiencies or synergies that we anticipated when selecting our acquisition candidates and joint ventures. Any of these items could adversely affect our results of operations.

If we or our joint ventures fail to complete capital expenditure projects on time and within budget, or if these projects, once completed, fail to operate as anticipated, such failure could adversely affect our business, financial condition and results of operations.

Fromtime-to-time, we, or our joint ventures, undertake strategic capital projects in order to enhance, expand and/or upgrade facilities and operational capabilities. Our ability, and our joint ventures’ ability, to complete these projects on time and within budget, and for us to realize the anticipated increased revenues or otherwise realize acceptable returns on these investments or other strategic capital projects that may be undertaken is subject to a number of risks. Many of these risks are beyond our control, including a variety of market, operational, permitting, and labor related factors. In addition, the cost to implement any given strategic capital project ultimately may prove to be greater than originally anticipated. If we, or our joint ventures, are not able to achieve the anticipated results from the implementation of any of these strategic capital projects, or if unanticipated implementation costs are incurred, our business, financial condition and results of operations may be adversely affected.

A failure to design or manufacture products or technologies or to achieve timely certification or market acceptance of new products or technologies could havedevelop an adverse effect on our profitability.

We continue to introduce new railcar product innovations and technologies, and we periodically accept orders prior to receipt of railcar certification or proof of ability to manufacture a quality product that meets customer standards. We could be unable to successfully design or manufacture these new railcar product innovations or technologies. Our inability to develop and manufacture such new product innovations or technologies in a timely fashion and profitable manner, obtain timely certification, or achieve market acceptance, or the existence of quality problems in our new products, could have a material adverse effect on our revenue and results of operations and subject us to penalties, cancellation of orders and/or other damages.

Our relationshipsrelationship with our joint venture and alliance partners could be unsuccessful, which could adversely affect our business.

We have entered into several joint venture agreements and other alliancesworkforce or investments with other companies to increase our sourcing alternatives, reduce costs and produce new railcars or components. We may seek to expand our relationships or enter into new agreements with other companies. If our joint venture or alliance partners are unable to fulfill their contractual obligations or if these relationships are otherwise not successful in the future, our manufacturing and other costs could increase, we could encounter production disruptions, growth opportunities could fail to materialize, or we could be required to fund such joint ventures or alliances in amounts significantly greater than initially anticipated, any of which could adversely affect our business.

If any of our joint ventures generate significant losses, including future potential intangible asset or goodwill impairment charges, it could adversely affect our results of operations or cause our investment to be impaired.

We have potential exposure to environmental liabilities, which could increase costs or have an adverse effect on results of operations.

We are subject to extensive national, state, foreign, provincial and local environmental laws and regulations concerning, among other things, air emissions, water discharge, solid waste and hazardous substances handling and disposal and employee health and safety. These laws and regulations are complex and frequently change. We

could incur unexpected costs, penalties and other civil and criminal liability if we, or in certain circumstances others, fail to comply with environmental laws or permits issued pursuant to those laws. We also could incur costs or liabilities related tooff-site waste disposal or remediating soil or groundwater contamination at our properties, including as set forth below. In addition, future environmental laws and regulations may require significant capital expenditures or changes to our operations, or may impose liability on us in the future for actions that complied with then applicable laws and regulations when the action was taken.

Portland Harbor Superfund Site

Our Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting our manufacturing facility, as a federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site). We, along with more than 140 other parties, have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site. The letter advised us that we may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including us (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have not signed such consent, but nevertheless contributed money to the effort. TheEPA-mandated RI/FS was produced by the LWG and cost over $110 million during a17-year period. We bore a percentage of the total costs incurred by the LWG in connection with the investigation. We cannot provide assurance that some or all of any such outlay will be recoverable from other responsible parties. The EPA issued its ROD for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, have entered into anon-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor Site. Approximately 110 additional parties have signed tolling agreements related to such allocations. On April 23, 2009, we and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case#3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case was stayed by the court until January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s January 6, 2017 ROD identifies a remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring, with an estimated undiscounted cost of $1.7 billion. The EPA expects its cost estimates to be within a range of-30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data it wants to collect over a2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of our Portland, Oregon manufacturing facility as well as upstream and downstream of the facility. The ROD does not break down total remediation costs by unit.

The ROD does not assign responsibility for the costs ofclean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup option will be determined at an unspecified later date. Based on the investigation to date, we believe that we did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to our property precedes our ownership of the Portland, Oregon manufacturing facility. Because these environmental investigations are still underway, including the collection of newpre-remedial design sampling data by the EPA, sufficient information is currently not available to determine our liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, we may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to

natural resources. In addition, we may be required to perform periodic maintenance dredging in order to continue to launch vessels from our launch ways in Portland, Oregon, on the Willamette River, and the river’s classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect our business and Consolidated Financial Statements, or the value of our Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including our company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et. al., United States Court for the District of Oregon Case No.3i17-CV-00164-SB. We, along with many of the other defendants, have moved to dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

We have entered into a Voluntary Cleanup Agreement with the DEQ in which we agreed to conduct an investigation of whether, and to what extent, past or present operations at our Portland property may have released hazardous substances into the environment. We have also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and we are currently discussing with the DEQ potential remedial actions which may be required. We could incur significant expenses for remediation and we cannot provide assurance that some or all of any such outlay will be recoverable from other responsible parties.

The timing of our asset sales and related revenue recognition could cause significant differences in our quarterly results and liquidity.

We may build railcars or marine barges in anticipation of a customer order, or that are leased to a customer and ultimately planned to be sold to a third party. The difference in timing of production and the ultimate sale subjects our company to operational and market risks. In addition, we periodically sell railcars from our own lease fleet and the timing and volume of such sales is difficult to predict. As a result, comparisons of our manufacturing revenue, deliveries, quarterly net gain on disposition of equipment, income and liquidity between quarterly periods within one year and between comparable periods in different years may not be meaningful and should not be relied upon as indicators of our future performance.

We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning for members of our senior management team and other key employees who are at or nearing retirement age, could adversely affect our business.

Our success depends in part on our ability to attract, retain and motivate senior management and other key employees. Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, competitors’ hiring practices, cost reduction activities, and the effectiveness of our compensation programs. Competition for qualified personnel can be very intense. We must continue to recruit, retain and motivate senior management and other key employees sufficient to maintain our current business and support our future projects and growth objectives. We are vulnerable to attrition among our current senior management team and other key employees. A loss of any such personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations.

Many members of our senior management team and other key employees are at or nearing retirement age. If we are unsuccessful in our succession planning efforts, the continuity of our business and results of operations could be adversely affected.

Changes in the credit markets and the financial services industry could negatively impact our business, results of operations, financial condition or liquidity.

The credit markets and the financial services industry may experience volatility which can result in tighter availability of credit on more restrictive terms and limit our ability to sell railcar assets. Our liquidity, financial condition and results of operations could be negatively impacted if our ability to borrow money to finance operations, obtain credit from trade creditors, offer leasing products to our customers or sell railcar assets were to be impaired. In addition, scarcity of capital could also adversely affect our customers’ ability to purchase or pay for products from us or our suppliers’ ability to provide us with product, either of which could negatively affect our business and results of operations.

Volatility in the global financial markets may adversely affect our business, financial condition and results of operations.

During periods of volatility in the global financial markets, certain of our customers could delay or otherwise reduce their purchases of railcars and other products and services. If volatile conditions in the global credit markets impact our customers’ access to credit, product order volumes may decrease or customers may default on payments owed to us.

Likewise, if our suppliers face challenges obtaining credit, or otherwise operating their businesses, the supply of materials we purchase from them to manufacture our products may be interrupted. Any of these conditions or events could result in reductions in our revenues, increased price competition, or increased operating costs, which could adversely affect our business, financial condition and results of operations.

Our actual results may differ significantly from our announced expectations.

From time to time, we have released, and may continue to release guidance estimates in our quarterly and annual earnings releases, quarterly and annual earnings conference calls, or otherwise, regarding our future performance that represent our management’s estimates as of the date of release. Although we believe that any such guidance or estimates would provide investors and analysts with a better understanding of management’s expectations for the future and could be useful to our shareholders and potential shareholders, such guidance or estimates would consist of forward-looking statements subject to the risks and uncertainties described in this report and in our other public filings and public statements. Guidance and estimates are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance or estimates may not materialize or may vary significantly from actual results. Our actual results may not always be in line with or exceed any guidance or estimates we may provide, especially in times of economic uncertainty. If our financial results for a particular period do not meet our guidance or estimates or the expectations of investors or research analysts, or if we reduce our guidance or estimates for future period, the trading volume or market price of our common stock may decline. In light of the foregoing, investors are urged not to unduly rely upon any guidance or estimates in making an investment decision regarding our common stock.

Fluctuations in the availability and price of energy, freight transportation, steel and other raw materials, and our fixed price contracts could have an adverse effect on our ability to manufacture and sell our products on a cost effective basis and could adversely affect our margins and revenue.

A significant portion of our business depends upon the adequate supply of steel, components and other raw materials at competitive prices and a small number of suppliers provide a substantial amount of our requirements. The cost of steel and all other materials used in the production of our railcars represents more than half of our direct manufacturing costs per railcar and in the production of our marine barges represents more than 30% of our direct manufacturing costs per marine barge. Our cost of acquiring steel, components and other raw materials to manufacture our railcars and marine barges are impacted by tariffs. If we are not able to purchase these materials at competitive prices, it could adversely impact our ability to produce and sell our products on a cost effective basis which could affect our revenue and profitability.

Our businesses also depend upon an adequate supply of energy at competitive prices. When the price of energy increases, it adversely impacts our operating costs and could have an adverse effect upon our ability to conduct our businesses on a cost-effective basis. We cannot be assured that we will continue to have access to supplies of energy or necessary components for manufacturing railcars and marine barges. Our ability to meet demand for our products could be adversely affected by the loss of access to any of these supplies, the inability to arrange alternative access to any materials, or suppliers limiting allocation of materials to us.

In some instances, we have fixed price contracts that anticipate material price increases and surcharges, or contracts that contain actual or formulaic pass-through of material price increases and surcharges. However, if the price of steel or other raw materials were to fluctuate in excess of anticipated increases on which we have based our fixed price contracts, or if we were unable to adjust our selling prices or have adequate protection in our contracts against changes in material prices, or if we are unable to reduce operating costs to offset any price increases, our margins would be adversely affected. The loss of suppliers or their inability to meet our price, quality, quantity and delivery requirements could have an adverse effect on our ability to manufacture and sell our products on a cost-effective basis.

Decreases in the price of scrap adversely impact our Wheels, Repair & Parts margins and revenue and the residual value and future depreciation of our leased assets. A portion of our Wheels, Repair & Parts businesses involve scrapping steel parts and the resulting revenue from such scrap steel increases our margins and revenues. When the price of scrap steel declines, our revenues and margins in such business would decrease.

We rely on limited suppliers for certain components and services needed in our production. If we are not able to procure specialty components or services on commercially reasonable terms or on a timely basis, our business, financial condition and results of operations would be adversely affected.

Our manufacturing operations depend in part on our ability to obtain timely deliveries of materials, components and services in acceptable quantities and quality from our suppliers. In 2018, the top ten suppliers for all inventory purchases accounted for approximately 52% of total purchases. Amsted Rail Company, Inc. accounted for 19% of total inventory purchases in 2018. No other suppliers accounted for more than 10% of total inventory purchases. Certain components of our products, particularly specialized components like castings, bolsters, trucks, wheels and axels, and certain services, such as lining capabilities, are currently only available from a limited number of suppliers. Increases in the number of railcars manufactured could increase the demand for such components and services and strong demand may cause industry-wide shortages if suppliers are in the process of ramping up production or reach capacity production. Our dependence on a limited number of suppliers involves risks, including limited control over pricing, availability and delivery schedules. If any one or more of our suppliers cease to provide us with sufficient quantities of our components or services in a timely manner or on terms acceptable to us, or cease to provide services or manufacture components of acceptable quality, we could incur disruptions or be limited in our production of our products and we could have to seek alternative sources for these components or services. We could also incur delays while we attempt to locate and engage alternative qualified suppliers and we might be unable to engage acceptable alternative suppliers on favorable terms, if at all. In addition, we are increasing the number of components and services we manufacture or provide ourselves, directly or through joint ventures. If we are not successful at manufacturing such components or providing such services or have production problems after transitioning to self-produced supplies, we may not be able to replace such components or services from third party suppliers in a timely manner. Any such disruption in our supply of specialized components and services or increased costs of those components or services could harm our business and adversely affect our results of operations.

Train derailments or other accidents or claims could subject us to legal claims that adversely impact our business, financial condition and our results of operations.

We provide a number of services which include the manufacture and supply of new railcars, wheels, components and parts and the lease and repair of railcars for our customers that transport a variety of commodities, including tank railcars that transport hazardous materials such as crude oil, ethanol and other products. In addition, we have

a Regulatory Services Group which offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services. We could be subject to various legal claims, including claims for negligence, personal injury, physical damage and product or service liability, or in some cases strict liability, as well as potential penalties and liability under environmental laws and regulations, in the event of a derailment or other accident involving railcars, including tank railcars. Additionally, the severity of injury or property damage arising from an incident may influence the causation responsibility analysis exposing us to potentially greater liability. If we become subject to any such claims and are unable successfully to resolve them or have inadequate insurance for such claims, our business, financial condition and results of operations could be materially adversely affected.

Changes in or failure to comply with legal and regulatory requirements applicable to the industries in which we operate may adversely impact our business, financial condition and results of operations.

Our operations and the industry we serve, including our customers, are subject to extensive regulation by governmental, regulatory and industry authorities and by federal, state, local and foreign agencies. These organizations establish rules and regulations for the railcar industry, including construction specifications and standards for the design and manufacture of railcars; mechanical, maintenance and related standards; and railroad safety. New rules and administrative regulations from these entities could impact our financial results, demand for our products and the economic value of our assets. In addition, if we fail to comply with the requirements and regulations of these entities, we could face sanctions and penalties that could negatively affect our financial results.

The risks of substantial costs and liabilities related to compliance with these laws and regulations are an inherent part of our business. Despite our intention to comply with these laws and regulations, we cannot guarantee that we will be able to do so at all times and compliance may prove to be more costly and limiting than we currently anticipate and compliance requirements could increase in future years. These laws and regulations are complex, change frequently and may become more stringent over time, which could impact our business, financial condition and results of operations.

In North America regulatory changes, along with prevailing market conditions, could materially affect new tank railcar manufacturing and retrofitting activities industry-wide, including negative impacts to customer demand for our products and services. In North America additional laws and regulations have been proposed or adopted that will potentially have a significant impact on railroad operations, including the implementation of “positive train control” (PTC) requirements. PTC is a collision avoidance technology intended to override engineer controlled locomotives and stop certain types of train accidents. While certain of these legal and regulatory changes could result in increased levels of railcar repair or refurbishment work and/or new tank car manufacturing activity, if we are unable to manage to adapt our business successfully to changing regulations, our business and results of operations could be adversely affected.

In Europe, changes to the process for obtaining regulatory approval for the operation of new or modified railcars may make it more difficult for us to deliver products to our customers in a timely manner. Effective in June of 2019, issuance of railway vehicle authorizations will be centralized with the European Union Agency for Railways, rather than being the responsibility of railway safety authorities in each European Union member country. This change may result in delays of several months for obtaining required regulatory approvals, when compared to the current system, which may have an adverse effect on our business and results of operations.

An adverse outcome in any pending or future litigation could negatively impact our business and results of operations.

We are a defendant in several pending cases in various jurisdictions. If we are unsuccessful in resolving these claims, our business and results of operations could be adversely affected. In addition, future claims that may arise relating to any pending or new matters, whether brought against us or initiated by us against third parties, could distract management’s attention from business operations and increase our legal and related costs, which could also negatively impact our business and results of operations.

Risks related to potential misconduct by employees may adversely impact us.

Our employees may engage in misconduct or other improper activities, including noncompliance with our policies or regulatory standards and requirements, which could subject us to regulatory sanctions and reputational damage and materially harm our business. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in controlling unknown or unmanaged risks or losses, including risks associated with harassment, as well as whistleblower complaints and litigation. There can be no assurance that we will succeed in preventing misconduct by employees in the future. In addition, the investigation of alleged misconduct disrupts our operations and may harm the public’s perception of our company, which may be costly. Any such events in the future may have a material adverse impact on our financial condition or results of operations.

Some of our employees belong to labor unions and strikes or work stoppages could adversely affect our operations.

providers. We are a party to collective bargaining agreements with various labor unions at some of our operations. Disputes with regard to the terms and conditions of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers. We cannot be assured that our relations with our workforce will remain positive. Union organizers are actively working to organize employees at some of our other facilities. If our workers were to engage in a strike, work stoppage or other slowdown, or other employees were to become unionized or the terms and conditions in future labor agreements were renegotiated, or if union representation is implemented at such sites and we are unable to agree with the union on reasonable employment terms, including wages, benefits, and work rules, we could experience a significant disruption of our operations and incur higher ongoing labor costs. In addition, we could face higher laborOur costs in the future as a result of severance or other charges associated withlay-offs, shutdowns or reductions in the size and scope of our operations or due to the difficulties of restarting our operations that have been temporarily suspended.

Our stock price has been volatile and may continue to experience large fluctuations.

The price of our common stock has experienced rapid and significant price fluctuations. Our stock price ranged from a low of $41.95 per share to a high of $60.90 per share for the year ended August 31, 2018 and a low of $28.95 per share to a high of $51.25 per share for the year ended August 31, 2017. The price for our common stock is likely to continue to be volatile and subject to price and volume fluctuations in response to market and other factors, including the factors discussed elsewhere in these risk factors and the following:

In addition, public stock markets have experienced, and may in the future experience, extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to, or that disproportionately impact, the operating performance of these companies and may adversely affect the price of our common stock. These broad market fluctuations may adversely affect the market price of our common stock in the future.

A material decline in the price of our common stock may result in the assertion of certain claims against us, and/or the commencement of inquiries and/or investigations against us. A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock, a reduction in our ability to raise capital, and the inability of investors to obtain a favorable selling price for their shares. Any reduction in our ability to raise equity capital in the future may force us to reallocate funds from other planned uses and could have a significant negative effect on our business plans and operations.

Following periods of volatility in the market price of their stock, historically many companies have been the subject of securities class action litigation. If we became involved in securities class action litigation in the future, it could result in substantial costs and diversion of our management’s attention and our resources and could harm our stock price, business, prospects, financial condition and results of operations.

Our product and service warranties could expose us to potentially significant claims.

We offer our customers limited warranties for many of our products and services. Accordingly, we may be subject to significant warranty claims in the future, such as multiple claims based on one defect repeated throughout our production or servicing processes or claims for which the cost of repairing the defective part is highly disproportionate to the original cost of the part. These types of warranty claims could result in costly product recalls, customers seeking monetary damages, significant repair costs and damage to our reputation.

If warranty claims attributable to actions of third party component manufacturers are not recoverable from such parties due to their poor financial condition or other reasons, we could be liable for warranty claims and other risks for using these materials in our products.

Many of our products are sold to third parties who may misuse, improperly install or improperly or inadequately maintain or repair such products thereby potentially exposing us to claims that could increase our costs and weaken our financial condition.

The products we manufacture are designed to work optimally when properly operated, installed, repaired, maintained and used to transport the intended cargo. When this does not occur, we may be subjected to claims or litigation associated with product damage, injuries or property damage that could increase our costs and weaken our financial condition.

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

We are required to perform an annual impairment review of goodwill and indefinite lived assets which could result in an impairment charge if it is determined that the carrying value of the asset is in excess of the fair value. We perform a goodwill impairment test annually during our third quarter. Goodwill is also tested more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists.

When we have continued underperforming operations or changes in circumstances, such as a decline in the market price of our common stock, changes in demand or in the numerous variables associated with the judgments, assumptions and estimates made in assessing the appropriate valuation of goodwill indicate the carrying amount of certain indefinite lived assets may not be recoverable, the assets are evaluated for impairment. Among other things, our assumptions used in the valuation of goodwill include growth of revenue

and margins and increased cash flows over time. If actual operating results were to differ from these assumptions, it may result in an impairment of goodwill. As of August 31, 2018, we had $51.1 million of goodwill in our Wheels, Repair & Parts segment and $27.1 million in our Manufacturing segment. Impairment charges to our goodwill or our indefinite lived assets would impact our results of operations. Future write-downs of goodwill and intangibles could affect certain of the financial covenants under debt instruments and could restrict our financial flexibility. In the event of goodwill impairment, we may have to test other assets for impairment.

The conversion of our outstanding convertible notes could result in substantial dilution to our current stockholders.

We have the option to settle outstanding convertible notes in cash, although if we opt not to or do not have the ability to, the conversion of some or all of our convertible notes may dilute the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon the conversion of the notes could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling by market participants, because the conversion of the notes could depress the price of our common stock.

We are a holding company with no independent operations. Our ability to meet our obligations depends upon the performance of our subsidiaries and our joint ventures and their ability to make distributions to us.

As a holding company, we are dependent on the earnings and cash flows of, and dividends, distributions, loans or advances from, our subsidiaries and joint ventures to generate the funds necessary to meet certain of our obligations including the payment of principal, of premium, if any, and interest on debt obligations. Any payment of dividends, distributions, loans or advances to us by our subsidiaries could be subject to statutory restrictions on dividends or repatriation of earnings under applicable local law and monetary transfer restrictions in the jurisdictions in which our subsidiaries operate. In addition, many of our subsidiaries and our joint ventures are parties to credit facilities that contain restrictions on the timing and amount of any payment of dividends, distributions, loans or advances that our subsidiaries may make to us. Under certain circumstances, some or all of our subsidiaries may be prohibited from making any such payments.

Our governing documents, the indentures governing our 2024 Convertible Notes, and Oregon law contain certain provisions that could prevent or make more difficult an attempt to acquire us.

Our Articles of Incorporation and Bylaws, as currently in effect, contain certain provisions that may have anti-takeover effects, including:

The provisions discussed above could have anti-takeover effects because they may delay, defer or prevent an unsolicited acquisition proposal that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their common stock over the then-prevailing market price.

The Oregon Control Share Act and business combination law could limit parties who acquire a significant amount of voting shares from exercising control over us for specific periods of time. These acts could lengthen the period for a proxy contest or for a stockholder to vote their shares to elect the majority of our Board and change management. Additionally, the indentures governing our 2024 Convertible Notes provide for the acceleration, at the lenders option, of all outstanding principal and interest owed on the notes upon a change of control of our company. The rights afforded to our creditors under these indentures could increase the cost of any potential acquisition of our company and have a resulting chilling effect on interest in acquiring our company.

These restrictions and provisions could have the effect of dissuading other stockholders or third parties from contesting director elections or attempting certain transactions with us, including, without limitation, acquisitions, which could cause investors to view our securities as less attractive investments and reduce the market price of our common stock and the notes.

Payments of cash dividends on our common stock may be made only at the discretion of our Board of Directors and may be restricted by Oregon law.

Any decision to pay dividends will be at the discretion of our Board of Directors and will depend upon our operating results, strategic plans, capital requirements, financial condition, provisions of our borrowing arrangements and other factors our Board of Directors considers relevant. Furthermore, Oregon law imposes restrictions on our ability to pay dividends. Accordingly, we may not be able to continue to pay dividends in any given amount in the future, or at all.

Fluctuations in foreign currency exchange rates could lead to increased costs and lower profitability.

Outside of the U.S., we primarily conduct business in Mexico and Europe and ournon-U.S. businesses conduct their operations in local currencies and other regional currencies. We also source materials worldwide. Fluctuations in exchange rates may affect demand for our products in foreign markets or our cost competitiveness and may adversely affect our profitability. Although we attempt to mitigate a portion of our exposure to changes in currency rates through currency rate hedge contracts and other activities, these efforts cannot fully eliminate the risks associated with the foreign currencies. In addition, some of our borrowings are in foreign currency, giving rise to risk from fluctuations in exchange rates. A material or adverse change in exchange rates could result in significant deterioration of profits or in losses for us.

We have indebtedness, which could have negative consequences to our business or results of operations.

As of August 31, 2018, our total consolidated indebtedness was approximately $469.7 million (excluding $26.6 million of debt discount and $6.9 million of debt issuance costs). As of August 31, 2018, approximately $179.9 million (excluding $0.5 million of debt issuance costs) of our consolidated indebtedness was secured. Our indebtedness consists of convertible notes, a senior secured revolving credit facility and term loans. Our level of indebtedness could have a material adverse effect on our business and make it more difficult for us to satisfy our obligations under our outstanding indebtedness and the notes. As a result of our debt and debt service obligations, we face increased risks regarding, among other things, the following:

Despite our current indebtedness levels and the restrictive covenants set forth in the agreements governing our indebtedness, if we, our subsidiaries and our joint ventures are in compliance with the covenants, we, our subsidiaries and our joint ventures may be able to incur substantially more indebtedness, including secured indebtedness, and other obligations and liabilities that do not constitute indebtedness. This could increase the risks associated with our indebtedness. As of August 31, 2018, after giving effect to issued but undrawn letters of credit, we had approximately $392.6 million of availability under our North American senior secured credit facility (based on our borrowing base as of such date) and approximately $57.5 million of availability under our European and Mexican joint venture senior secured credit facilities.

We may need to raise additional capital to operate our business and achieve our business objectives, which could result in dilution to investors.

We require substantial working capital to fund our business. If additional funds are raised through the issuance of equity securities, the percentage ownership held by our stockholders will be reduced and these equity securities may have rights, preferences or privileges senior to those of our common stock. We evaluate opportunities to access the capital markets taking into account our financial condition and other relevant considerations. Additional financing may not be available when needed, on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may be unable to develop or enhance our business, take advantage of future opportunities or respond to competitive pressures, which would harm our business, financial condition and results of operations.

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

Shareholder activism, which could take many forms and arise in a variety of situations, has been increasing in publicly traded companies recently. Shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our Board of Directors’ attention and resources from our business. Additionally, such shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attractrecruit, train and retain necessary, qualified personnel. Also, weemployees may be required to incur significant legal fees and other expenses related to activist shareholder matters. Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism.

We are subject to cybersecurity risks and may incur increasing costs in an effort to minimize those risks.

Our business employs systems and websites that allow for the storage and transmission of proprietary or confidential information regardingexceed our customers, employees, job applicants and other parties, including financial information, intellectual property and personal identification information. Security breaches and other disruptions could compromise our information, expose us to liability and harm our reputation and business. The steps we take to deter and mitigate these risks may not be successful. We may not have the resources or technical sophistication to anticipate or prevent current or rapidly evolving types of cyber-attacks. Attacks may be targeted at us, our customers, or others who have entrusted us with information. Actual or anticipated attacks may cause

us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts or consultants. Advances in computer capabilities, or other technological developments may result in the technology and security measures used by us to protect transaction or other data being breached or compromised. In addition, data and security breaches can also occur as a result ofnon-technical issues, including intentional or inadvertent breach by our employees or by persons with whom we have commercial relationships. Any compromise or breach of our security could result in a violation of applicable privacy and other laws, legal and financial exposure, negative impacts on our customers’ willingness to transact business with us and a loss of confidence in our security measures, which could have an adverse effect on our results of operations and our reputation.

Updates or changes to our information technology systems may result in problems that could negatively impact our business.

We have information technology systems, comprising hardware, network, software, people, processes and other infrastructure that are important to the operation of our businesses. We continue to evaluate and implement upgrades and changes to information technology systems that support substantially all of our operating and financial functions. We could experience problems in connection with such implementations, including compatibility issues, training requirements, higher than expected implementation costs and other integration challenges and delays. A significant problem with an implementation, integration with other systems or ongoing management and operation of our systems could negatively impact our business by disrupting operations. Such a problem could also have an adverse effect on our ability to generate and interpret accurate management and financial reports and other information on a timely basis, which could have a material adverse effect on our financial reporting system and internal controls and adversely affect our ability to manage our business.

expectations. If we are unable to protect our intellectual propertyrecruit, train and prevent its improper use byretain adequate numbers of qualified employees and third partiesparty labor providers on a timely basis or if third parties assert that our productsat a reasonable cost or services infringe their intellectual property rights, our ability to compete in the market may be harmed, andon reasonable terms, our business and financial condition mayresults of operations could be adversely affected.

The protection

Risks relatedto potentialmisconductby employeesmayadverselyimpactus.

Our employeesmayengagein misconduct, fraudor otherimproperactivities,includingnoncompliancewith our policiesor regulatorystandardsand requirements,which couldsubjectus to regulatorysanctions and reputational damage and materiallyharmour business.Itisnot alwayspossibleto deteremployeemisconduct,and theprecautionswetaketo preventand detectthisactivitymaynot be effectivein controllingunknown or unmanagedrisksor losses, includingrisksassociatedwith harassment, as well as whistleblowercomplaintsand litigation.Therecan be no assurancethatwe will succeedin preventingmisconductby employeesin thefuture.In addition,theinvestigationof allegedmisconductdisruptsour operationsand may harm the public’s perception of our intellectual property is important tocompany, which maybe costly.Any such eventsin thefuturemayhave a materialadverse impacton our business. We rely on a combination of trademarks, copyrights, patents and trade secrets to protect our intellectual property. However, these protections might be inadequate. Our pending financialconditionor future trademark, copyright and patent applications might not be approved or, if allowed, might not be sufficiently broad. If our intellectual property rights are not adequately protected we may not be able to commercialize our technologies, products or services and our competitors could commercialize our technologies, which could result in a decrease in our sales and market share and could materially adversely affect our business, financial condition and results of operations. Conversely, third parties might assert that our products, services, or other business activities infringe their patents or other intellectual property rights. Infringement and other intellectual property claims and proceedings brought against us, whether successful or not, could result in substantial costs and harm our reputation. Such claims and proceedings can also distract and divert our management and key personnel from other tasks important to the success of our business. In addition, intellectual property litigation or claims could force us to cease selling or using products that incorporate the asserted intellectual property, which would adversely affect our revenues, or cause us to pay substantial damages for past use of the asserted intellectual property or to pay substantial fees to obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all. In the event of an adverse determination in an intellectual property suit or proceeding, or our failure to license essential technology or redesign our products so as not to infringe third party intellectual property rights, our sales could be harmed and our costs could increase, which could materially adversely affect our business, financial condition and results of operations.

We could be liable for physical damage, business interruption

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Some of our competitors are owned or product liability claims that exceed our insurance coverage.financially supported by foreign governments and may sell products below cost or otherwise compete unfairly.

The naturemarkets in which we participate areintenselycompetitiveand we expectthemto remainintensely competitive into theforeseeablefuture. Some of our business subjects uscompetitors are owned or financially supported by foreign governments or sovereign wealth funds, and may potentially sell products and services below cost, or otherwise compete unfairly, in order to physical damage, business interruptiongain market share. The relative competitiveness of our manufacturing facilities and product liability claims, especiallyproducts affects our performance. A number of competitivefactors challenge or affectour abilityto competesuccessfully including the introductionof competitiveproducts and new entrantsintoour markets, a limitedcustomerbaseand pricepressures such as unfair competition and increases in connection with the repairraw materials and manufacture labor costs. If we do not competesuccessfully,our marketshare,marginand resultsof products that carry hazardous or volatile materials.operationsmaybe adverselyaffected.  

Although We aresubjectto extensivenational,state, foreign, provincialand localenvironmentallaws and regulations concerning,amongotherthings,airemissions,waterdischarge,solidwasteand hazardoussubstanceshandling and disposaland employeehealthand safety.These laws and regulationsarecomplexand frequentlychange.We couldincurunexpectedcosts,penaltiesand otherciviland criminalliabilityifwe, maintain liability insurance coverage at commercially reasonable levels compared or in certain circumstances others, failto similarly sized heavy equipment manufacturers, an unusually large physical damage, business interruptioncomplywith environmentallaws or product liability claim permitsissuedpursuantto thoselaws. We alsocouldincurcostsor a series of claims based on a failure repeated throughout liabilitiesrelated to off-sitewastedisposalor remediatingsoilor groundwatercontaminationatour production process could exceed our insurance coverage properties,includingas set forth in Item 3, “Legal Proceedings.” In addition,futureenvironmentallaws and regulationsmayrequiresignificantcapitalexpendituresor result in damage changesto our reputation, which could materially adversely impact our financial condition and results of operations.

We could be unable to procure adequate insuranceoperations, or may impose liability on a cost-effective basisus in the future.future for actions that complied with then applicable laws and regulations when the action was taken.

The ability to insure our businesses, facilities and rail assets is an important aspect of our ability to manage risk. As there are only limited providers of this insurance to the railcar industry, there is no guarantee that such insurance will be available on a cost-effective basis in the future. In addition, we cannot assure that our insurance carriers will be able to pay current

Fires,naturaldisasters, pandemics, terrorism, or future claims.

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

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the reported value of our assets or liabilities and financial results and are critical because they require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC, and our independent registered public accounting firm) may amend or even reverse their previous interpretations or positions on how these standards should be applied. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the revision of prior period financial statements. Changes in accounting standards can be hard to predict and can materially impact how we record and report our financial condition and results of operations.

Fires, natural disasters, severe unusual weather conditions or public health crises could disruptour businessand result in lossof revenueor higher expenses.expenses or decreased demand for wheel services.

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

Unusual weather conditions may reduce demand for our wheel-related parts and repair services.

Performing railcar wheel repair and replacing railcar wheels represents a portion of our business. Seasonal Additionally, seasonalfluctuationsin weatherconditionsmayleadto greatervariationin our quarterlyoperatingresultsas unusuallymildweatherconditionswillgenerallyleadto lowerdemandforour wheel-relatedproductsand services. In addition, unusually Unusuallymildweatherconditionsthroughouttheyearmayreduceoveralldemandforour wheel-relatedproductsand repairservices.Ifoccurringforprolongedperiods,such weathercouldhave an adverseeffecton our business,resultsof operationsand financialcondition.

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

Scientific studies have suggested that emissions of certain gases, commonly referred to as greenhouse gases (GHGs) including carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere and other climate changes. Legislation and new rules to regulate emission of GHGs have been introduced in numerous state legislatures, the U.S. Congress, and by the EPA. Some of these proposals would require industries to meet stringent new standards that may require substantial reporting of GHGs and other carbon intensive activities in addition to potentially mandating reductions in our carbon emissions. While we cannot assess the direct impact of these or other potential regulations, we recognize that new climate change reporting or compliance protocols could affect our operating costs, the demand for our products and/or affect the price of materials, input factors and manufactured components which could impact our margins. Potential opportunities could include greater demand for certain types of railcars, while potential challenges could include decreased demand for certain types of railcars or other products and higher energy costs. Other adverse consequences of climate change could include an increased frequency of

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severe weather events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring company assets, or other unforeseen disruptions of our operations, systems, property or equipment.

Repercussions from terrorist activities or armed conflict

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

Terrorist activities, anti-terrorist efforts,

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

Our debt could have negative consequences to our business or its interests abroadresults of operations.

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

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

Our productand servicewarrantiescould exposeus to significantclaims.

We offerour customerslimitedwarrantiesformanyof our productsand services.Accordingly,we may be subjectto significantwarrantyclaimsin thefuture,such as multipleclaimsbasedon one defectrepeated throughoutour productionor servicingprocesses, claimsforwhich thecostof repairingthedefectivepartis highlydisproportionateto theoriginalcostof thepart or defects in railcars or services which we discover in the future resulting in increased warranty costs or litigation. Warranty and product support terms may expand beyond those which have traditionally prevailed in the rail supply industry. These typesof warrantyclaimscouldresultin costly productrecalls,customersseekingmonetarydamages,significantrepaircostsand damageto our reputation. Ifwarrantyclaimsattributableto actionsof thirdpartycomponentmanufacturersarenot recoverable fromsuch partiesdue to theirpoor financialconditionor otherreasons,we couldbe liableforwarrantyclaims and otherrisksforusingthesematerials in our products.

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

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

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

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

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

We cannot guarantee that we or shortagesour suppliers will be in raw materials, parts,compliance at all times and compliance may prove to be more costly and limiting than we currently anticipate and compliance requirements could increase in future years. If we or components. Any of these occurrencesour suppliers fail to comply with applicable requirements and regulations, we could have a material adverse impact onface sanctions and penalties that could negatively affect our financial results.

The timingof our assetsalesand relatedrevenuerecognitioncould cause significantdifferencesin our quarterlyresultsand liquidity.

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

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

We are subject to income taxes in both the United States and foreign jurisdictions. Significant judgment isjudgments and estimates are required to be made in determining our worldwide provision for income taxes. Changes in estimates of projected

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future operating results, loss of deductibility of items, recapture of prior deductions (including related to interest on convertible notes), limitations on our ability to utilize tax net operating losses in the future or changes in assumptions regarding our ability to generate future taxable income could result in significant increases to our tax expense and liabilities that could adversely affect our financial condition and profitability.

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

Some

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

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

Our stockpricehas been volatileand maycontinueto experiencelargefluctuations.

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