All right. Thank you, Nancy. Well, good morning. It is great to see a full room here for Greenbrier's very first Investor Day. I would like to thank you for joining us today, for those of you who are traveling from out of the area as well. In a moment, I will invite our CEO, Lorie Tekorius, to come and kick off the day. I just wanted to remind you that today, Lorie and our management team will provide important updates on Greenbrier, what we're focused on our business, kind of our core priorities going forward. You'll also have several opportunities to ask questions during today's presentation. I am excited about what you will hear today from the management team, but first, I have to start with our required cautionary disclosure about forward-looking statements. If you would like to read the statement and review any of the non-GAAP reconciliations, they are available in an appendix online today. Monday, we released our earnings and filed our 10-Q, because we're here to discuss Greenbrier's kind of longer term prospects, I'm only gonna point a few items of note out about our most recent fiscal quarter. Greenbrier had a very strong Q2. We had revenue of $1.1 billion, adjusted EBITDA of $98 million, and adjusted diluted EPS of $0.99. The latter two are our highest levels in about three years on a quarterly basis. Now, when you think about our fiscal quarters, December, January, February, those are typically a quiet time for new railcar order activity. Usually, it's because of the holidays and when customers are finalizing budgets for the next year. Typically, we do experience softness seasonally, but we did have orders for 4,500 units in the quarter, and this is our third-highest level in 8 years. The two better quarters, they had multiyear orders in them. This most recent Q2, we felt very good about. It continued the trend that we've spoken about recently, stable demand that supports some growth, but also replacement activity. Backlog and order and production are all nearing an equilibrium, and we are proud of our demonstrated ability to balance our production with what we see coming in the demand environment. We've done that over the last several years through the ups and downs of COVID, and we will continue to do so. In the quarter, we syndicated 2,200 units. This was our highest level since 2015. With the rising interest rate environment, we are holding railcars for syndication less for a shorter period of time than we have historically. We are committed to this approach as the best way to mitigate risk while ensuring our syndication partners have sufficient product. Operating cash flow in the quarter was $100 million or nearly $160 million, this was a result of stronger operating momentum, syndication activity, and this allowed us to start to repay our short-term borrowings that we undertook during COVID. Today, you will hear Greenbrier's business unit leaders describe their plans to improve profitability and position Greenbrier for the next stage in our evolution. As I mentioned, Lorie Tekorius will begin the day with her strategic vision for Greenbrier. Bill Krueger will provide an update on North American manufacturing. William Glenn will speak to Greenbrier's European opportunity. Those presentations will be followed by a question and answer session. Brian Comstock will resume management's discussion with the focus on our services business, which includes leasing and management services as well as our maintenance services business. Brian will be joined by the other leaders of these businesses for the Q&A portion of this presentation. Finally, Adrian Downes, our CFO, will provide a financial overview and the key takeaways from today. In addition to the speakers, I'm joined by several of Greenbrier's leaders today. I won't introduce them individually. Each of them have name tags. They can be easily identified. Today is about Greenbrier's future. Because of that, I strongly encourage you to avoid questions about Q2 results, Q3 results, or Q3 and Q4 expectations. Focus your questions on what lies in the future for Greenbrier. We are pleased to bring senior leaders before you today, and we look forward to some great discussion about the future of our business. I will be available to answer Q2 and any near-term questions after today. With that, I will invite Lorie Tekorius, Greenbrier's CEO and President. Thank you, Justin. Good morning, everyone. Oh. Now I'm jumping ahead. It's really great that you guys are all here today, and we're really excited to be able to share our future outlook and our vision for the company. It's only taken us about 29 years to get ready for our first Investor Day, so I hope that we meet your expectations. Our goal today is to provide you with a few key takeaways about where we're going and how we're gonna get there. First, we're a leading railcar builder in the geographies we operate, and we'll continue to assert leadership in our markets and capitalize on long-term growth drivers. Second, you'll hear from Bill Krueger and William Glenn that we've launched multiple initiatives to improve the margins in our core manufacturing businesses. Finally, Greenbrier is focused on building a stream of recurring revenues in our leasing and management services group at high margins. We believe we have a highly differentiated business and a good plan to deliver strong performance and drive shareholder values. I'd like to kick things off by briefly speaking to our industry-leading position and providing an overview of our business. Across our facilities, we're able to produce around 33 railcars annually. Although I'd caution that this is a theoretic capacity, because not all railcars can be produced at the same rate. Our backlog is driven by our commercial strength and provides great visibility. Importantly, as you'll hear from Adrian Downes, we've consistently maintained a strong liquidity position, which is always vital. We're making good progress on building our recurring leasing and management revenue stream, which has grown 35% since fiscal 2019, as we execute on our leasing and services strategy. We are the number one or number two freight railcar manufacturer in the geographies we operate, so that's North America, Brazil, and Europe. Our focus today is gonna be on our largest markets, North America and Europe. In North America, we've been able to maintain a strong share without significant multiyear orders. Our work to grow our footprint globally through key acquisitions has put us in a position to be leaders in our markets. Taken together, this means we're able to maintain flexibility to respond to shifts in railcar demand in our manufacturing operations and in our commercial organization. We expect this flexibility will help us maintain and grow market share as we enter one of the more substantial replacement demand cycles we've seen in recent years. When Greenbrier went public back in 1994, we generated less than $100 million of revenue from 1 manufacturing facility, a small lease fleet, and just a handful of shops. I've been with Greenbrier now for 28 years. It's hard to believe sometimes. Over this time, we have grown considerably and diversified our business through disciplined execution. Some examples of this are the strategic acquisitions that have dramatically increased our market share in North America and Europe, and which allowed us to access new markets in South America. We've had innovative designs like the Multi-Max, which is a transforming bi-level, tri-level auto-carrying railcar. Over the last 10 years, we've averaged nearly two and a half billion in revenue annually. Over the last four quarters, we've generated $3.6 billion in revenue. You're really starting to see the results of the actions that we've taken over the last several years. From our early days, we've increased our addressable market by over 400% through these acquisitions and joint ventures in foreign markets. Our two most recent transactions were highly transformational. Our acquisition of ARI, which closed about nine months before the pandemic, dramatically expanded our capabilities and gave us access to a much larger customer base that helped set the stage for our leasing joint venture, which is now wholly owned by Greenbrier. Today you're gonna hear how these two transactions have positioned us to deliver on our strategy. Stepping back in time, Greenbrier was narrowly focused on intermodal and forest product railcars out of the Northwest when I started with the company. In 2007, we entered the covered hopper market. In 2009, we built our first tank car. Since then, we have consistently added to our product portfolio until we're able to effectively compete in almost every car type, so everything but coal. Today, you can see the breadth of our product portfolio is comprehensive, with strength in the major demand categories in North America. In addition to broadening our product lines, the acquisition of ARI in July 2019 brought other benefits to Greenbrier. It deepened our connection to shipper customers with more specialized needs, and it grew our opportunity in the leasing business. It also improved our U.S. footprint to more central to our supply chain and our customers. Now we can access customers in the Midwest and Southeastern U.S. in an easier and more cost-competitive way. Leveraging our strong manufacturing operations with our lease origination capabilities puts Greenbrier in a prime position to enhance our leasing strategy. We made a conscious choice to evolve our leasing model from asset-light position to being a full service lessor at a level that allows us to realize the benefits of leasing while meeting the needs of our customers. Leasing also allows us to further unlock the synergies among our business units, from manufacturing, to capital markets, to our aftermarkets business. Before I get into the strategy, I want to spend a little bit more time talking about our business model and our DNA. I mentioned our geographic reach in North America. We've similarly scaled our presence in Europe through the 2017 Astra Rail acquisition, primarily based in Romania, and in South America through investments in Brazil back in 2015. All of our locations are well positioned from a cost perspective and have good proximity to our customers. As you'll hear later today, we've calibrated and targeted our CapEx to support our core focus on safety, along with short-term, high-return projects. Our business and strategy is based on a value proposition we deliver to our customers through a unified organization. We strive to be a single solutions provider to many of our customers and have a long track record of doing so. We've recently conducted a customer survey to continue to guide our customer-centric focus. Brian Comstock has got a great case study that he's gonna share with you about how our different services offerings have led to long-term relationships with our customers with mutual value creation. You can't be successful in business without paying attention to the three Ps, products, people, and your patrons. Patrons means customers, it didn't fit the whole three P thing that they had going for me, so. When investors began to express an interest in ESG, we looked at it as a new forum where we could take a deeper dive and describe the work that we've already been doing. This is work that makes the rail industry more efficient through railcar innovations. It's work that makes our communities better through outreach and employment opportunities. It's critical work to keep our employees safe and design our products in a way that help our customers do the same with their employees. ESG is really just kinda that simple for us. It's a forum. We're not looking to be trendy or political in this work. Whether our ESG scores go up, down or sideways, we will continue to champion these priorities at Greenbrier. In order to be a leader in an industry, you have to act like one. That's what we always try to do. While we're grateful when third-party organizations recognize Greenbrier for our leadership, it's even more gratifying when our people are recognized for their contributions to our industry, as many have been in recent years. We know that our people make us vital, welcoming, ethical place to work, and we appreciate it when other folks see that. There are multiple elements driving our business, and I'm gonna spend about the next three hours going through each one of these in detail. If we didn't focus on these areas, we'd be stagnant and not constantly pushing ourselves for innovation, growth, and change in our industry. I hope as we have our Q&A sessions and then our lunch afterwards, you guys are able to see how this leadership team truly does push and innovate to continue driving for growth. One of the underappreciated but inherent elements of our business is our lease origination capabilities. This has helped to drive manufacturing volume over the years and allows us to confidently pursue our enhanced leasing strategy. You're gonna hear from the Brians, Brian Comstock and Brian Conn, that we're approaching this capital deployment in a balanced and disciplined manner with high underwriting standards. This ensures that our own lease fleet will be of high quality as it grows and that we're able to provide attractive solutions to our lease syndication partners. Our approach to railcar syndication is unique to Greenbrier, and our strong lease origination capabilities and investor relationships give us a path to market that allows us to optimize the railcars we hold on our balance sheet and generate management fee income. It's also a very important source of liquidity. Since fiscal 2018, we have actually generated over $2.8 billion in proceeds from syndication, so definitely significant. We also have a strategic network of maintenance facilities led by Rick Galvan, which provides a broad range of services and components to our railcar owners and operators. Having these capabilities results in good turn times, reducing the time that assets are kept out of service for repair and maintenance. After several challenging years, we're starting to see the benefit of recent initiatives to improve operating and financial performance in this business, which is vital to operating a lease fleet efficiently. Now Greenbrier has always been an innovator, consistently bringing new products and designs to our industry, allowing asset owners to optimize their fleets. Conversions are just another tool that we use to meet our customers' needs and is fundamental to long-term growth in the industry, given that rail is the most environmentally friendly form of surface freight transportation. This is particularly important as environmental policy emerges as a strong tailwind. We're doing a fair amount of conversion work, which is not included in that backlog figure that we started the presentation with. As I mentioned earlier, we've grown our product portfolio over the years, and now some of that growth has come from M&A, but a lot of it has come from innovation. If you'll indulge me, we're going to share a short three-minute video showing some of the incredible products we've created over time. Our double stack was a new thing at that time. It's a matter of putting one container on top of the others on a rail car. Well, of course, at the time, we really didn't know that it was going to revolutionize the industry, but it really has. It turned the whole industry around. I mean, it made them almost twice as competitive. Big order for Gunderson. The Portland rail car manufacturer has received an order for 881 of its all-purpose Husky-Stack rail cars. It went from zero to knocking coal off its perch. We started building a lot of other car types as they came into the vogue. Auto-Max is an all-new rail car designed exclusively for transporting current and future vehicle mixes. MultiMax is the Greenbrier Company's newest automotive rail car offering. This proprietary rack features adjustable decks for both bi and tri-level service without adding or removing decks. The Tank Car of the Future design is six to eight times safer than legacy tank cars when measured by the likelihood of release of contents in a derailment, keeping people safe and protecting the environment. Greenbrier's Virtual Sample Rail Car program puts you in control of the process from the comfort of your own office and cuts your time commitment from three days to one hour. I'd like to introduce the Tsunami Hatch, which is a fully automated hatch covering system. The hatch opens automatically, the car can be loaded, the hatch closes automatically. The whole concept is reduce labor, improve safety, and create greater efficiency for the railroads. The product that coming out is really gonna revolutionize the rail industry. It's a new lightweight, high-strength steel gondola. This allows us to have the same car with the same durability, but less weight. As much weight as we take out of the car, our customers can put into the stuff they put in the car, and that's really good. It's good for the environment, and it's good for our customers. It's a win-win. It's pretty cool stuff, huh? We are leaders in innovation, thanks to the talent of our global team of engineers. Greenbrier has a significant engineering presence on three continents. Importantly, that talent allows us to be represented on over 35 industry committees governing railroad and rail equipment safety. Given some of the recent rail derailments that have become headline news, participation on these committees is vital, and we're proud to lend our expertise to be a leader in railcar safety. People drive our business, as I'm sure it drives many of yours, and we're having a strong strategy to ensure the health and wellbeing of our employees, which integrates with our broader objectives. I'm incredibly proud of the metrics we show here, particularly those related to safety, which is paramount in our business. Matter of fact, those safety rates that are shown on the slide are record low rates in fiscal 2022 in a time that we were substantially increasing our workforce. I am so proud of the leadership that we provide in our operations. The final element I wanna touch on today relates to our position within the broader industry. Greenbrier is committed to being a policy advocate to protect and promote the growth of freight rail. We don't just have a seat at the table, we're helping to shape policy that promotes modal growth in freight rail. This means involvement not just in critical transportation policies, but also in trade policy, tax policy, and industrial policy as a new era of global competition takes shape. Greenbrier has changed a lot over the years and will continue to change and evolve, as you're gonna hear more today. Our mission remains unchanged, and that's to continue providing customer value through our portfolio of products and services in a way that delivers superior returns to our shareholders across economic cycles. We intend to achieve this strategy by continuing to focus on manufacturing excellence, growing our stream of recurring revenue to reduce the impact of cyclicality, and to be good stewards of capital by following a balanced approach to capital allocation. I'm gonna walk you through this in just a little bit more detail. In manufacturing, we're focused on maintaining our manufacturing excellence while materially improving our through-cycle margins. You're gonna hear from William Glenn and Bill Krueger that many of these actions are already underway and are part of concrete steps to enhance our manufacturing margins globally. You already know, 'cause you've already been through the decks, we're not gonna provide target margin% for manufacturing specifically, but we're gonna outline some specific margin dollar projects that are gonna drop through to the bottom line. As I've described, Greenbrier is much more than just a manufacturing company, which is why we're ultimately focused on aggregate gross margins, particularly as we grow our recurring revenue base. What you see here on these bars is the impact of non-manufacturing segments on our consolidated margins over the last five years and for the last four quarters. Growth in recurring revenue in our segments outside of our core manufacturing has helped to stabilize our aggregate gross margins, particularly during periods when manufacturing margins hit a trough. You can see that the impact is significant. It's a point we're working hard to help the equity markets understand. Increasing our non-manufacturing activities creates a higher implied floor for our consolidated margin. We're also increasing our investments in our lease fleet to expand that recurring revenue. We expect to invest $300 million annually in our fleet over the next several years. Of course, this will be subject to market conditions because we're gonna grow our fleet in a disciplined manner with a keen eye to portfolio construction that'll provide repeatable revenue and tax-efficient cash flow. Growing our fleet will accomplish several important strategic goals for Greenbrier. First, it's gonna drive volume to each of our business units: manufacturing, leasing and services, and our maintenance services business. Second, it's gonna increase the stability of our earnings. Third, it's going to allow us to enjoy significant tax benefits, which will reduce cash taxes and improve liquidity. Finally, it provides us an ownership in long-lived assets that we can remarket to new lessees or sell to other asset owners. This generates additional revenue as we participate in the full cycle benefits that emerge from freight railcar economics. Our lease fleet investment fits well within our disciplined approach to capital allocation. We've always maintained a strong balance sheet and will continue to do so, because maintaining a resilient, flexible balance sheet is key to a strong future. The steps we've taken to align our debt facilities with the evolving nature of our business are prudent and mitigate risk related to interest rates. Creating and returning value to our shareholders is our end goal. To that end, we remain committed to growing our dividend and using our share buyback program opportunistically. Now, rather than asking you to wait until the final presenter and the final slide, I know you guys have already all peeked at this stuff anyway, I'm pleased to share our goals with you now. Bill, William, and Brian will get into more detail. We expect to grow to more than double our high margin recurring revenue over the next five years through growing our lease fleet. We're targeting aggregate gross margins in the mid-teens by fiscal 2026. We'll drive to get there sooner. We're targeting an ROIC range between 10% and 14% by fiscal 2026. There's gonna be a lot of other metrics and targets that we're aiming for internally. These are the goalposts we'd like our shareholders to focus on. With the next few presentations, you're gonna hear about our business and where we're focused. Overall, our initiatives are aligned around three goals. We're laser-focused on optimizing our manufacturing footprint to drive efficiency and margin. We're gonna grow our leasing and services business and expect it to drive increasing revenue and margin dollars to offset the inherent cyclicality of manufacturing. We'll maintain our leadership position by innovating and continuing our tradition of providing high-quality products and services to our customers. With that, I'll ask Bill Krueger to come up and talk to us about North American manufacturing. Thank you, Lori. Good morning, everyone. Thank you for attending our Investor Day today. It's a great springtime day in New York. Glad to look out on all these smiling faces in the audience today. I realize that all of you invested your time to come visit with us. We really appreciate you dedicating this couple hours to learn more about our company. My presentation this morning will focus on Greenbrier's leadership position as one of the top railcar producers in the North American market, Greenbrier Manufacturing's scale and flexibility in this market, our efforts to lower our fundamental costs and enable higher margins and enhance profitability going forward. For the last decade, Greenbrier has been near the top of the list in railcar demand in North America. Even before our acquisition of ARI, we had a significant position in the market, and we're the second-largest manufacturer of railcars. Our superior quality, availability, flexibility, and diverse portfolio has enabled Greenbrier Manufacturing to maintain a leadership position as the number one or two new railcar orders for over a decade. In the last 20 years, the industrial footprint of the new railcar market in North America has shrunk significantly. There are just 11 active railcar manufacturing facilities left, compared to 19 in 2000. Greenbrier owns 5 of the remaining facilities. What's also happened is that the center of gravity for production has shifted to the middle of the U.S. and Mexico. Greenbrier Manufacturing thrives in that geographical sweet spot, which provides us with a balanced operational footprint with a strong presence both north and south of the southern border of the U.S. Our share of the backlog has grown, and there is currently limited available capacity for new orders. Not only has Greenbrier Manufacturing's supply geography shifted, but also our product offering has become much more diverse and comprehensive. We are in a leadership position with our superior quality and availability in almost all railcar segments and are flexible and resilient to the ebbs and flows of the economy and our customer needs. Manufacturing flexibility has proven to be critical over the years to successfully respond to both diverse customer demand for various railcar types and also significant fluctuations in segment volumes and economic conditions. While certain railcar types consistently make up a relatively large portion of the backlog and deliveries, history has shown us that there are opportunities to build different types of railcars in response to the changing market demand. We're in the position we are today following a transformation of Greenbrier Manufacturing and product engineering that saw us expand and diversify our build portfolio, expand our manufacturing footprint in Mexico, and acquiring more centrally located U.S. facilities with the ARI acquisition, and continuously balance capacity and flexibility while ensuring labor stability. I'll talk more about that last point shortly. Today, I am confident in Greenbrier Manufacturing's superior quality, geographic footprint, the resilience of our manufacturing base, and the flexibility to be responsive to our customers in the future. That responsiveness to customer needs has resulted in our distinctive and lengthy track record of providing innovative design solutions and manufacturing them at scale. We're well known in the industry as an innovator, and you saw a few of our innovations in the video Lorie played earlier. Although we do not have a crystal ball, Greenbrier expects a stable and manageable demand for railcars in the next several years. The one certainty is that railcar demand is dependent on the fluctuations of demand from the commodities that need to be delivered across this country in bulk. Even in today's macroeconomic environment, we're seeing the industry capacity getting booked out for several quarters. I'm pretty confident the few open slots that we have in the next four to six quarters will be scooped up at a premium. Demand is projected to be supported by replacement demand over the next several years, and there are a couple of additional indicators that gives Greenbrier confidence in a steady demand for the next several years as fewer viable cars are left in storage and older obsolete cars are getting scrapped. Specifically, railcars in storage has decreased by over 25%. The majority of the decrease comes from railcars being scrapped. Most of the remaining railcars in storage are not fit for service and will likely be scrapped at some point in the next few years. Now I'll shift from a market backdrop and focus a few minutes on how Greenbrier Manufacturing responded to the fluctuating market in the last few volatile years. It's been a fascinating few years as we've navigated the unknowns of the pandemic and the resulting volatility. Joining Greenbrier in May 2020 allowed me to see firsthand how flexible and agile our management team needs to be. Before I do so, it's worth noting that we have long maintained a pretty sizable new railcar backlog, which is valued at $3.1 billion today, excluding refurbishments. Our backlog, along with our strong lease origination and syndication capabilities, provided us a baseline of work for when the pandemic began in early 2020. Today, it provides us good revenue visibility and visibility into our capacity requirements for at least several quarters into the future. You can see that as our business transformed and grew, backlog has stabilized in a very consistent range. While the pandemic could not have been anticipated, Greenbrier Manufacturing took swift action and leveraged our manufacturing flexibility and our ability to take advantage of our flexible Mexican workforce with its labor elasticity. We weathered the storm as an essential business, both in the U.S. and Mexico. Over the course of 6 months, we reduced our headcount by over 6,500 employees and slowed production rates to preserve backlog to provide a bridge through the sharp downturn. We idled 13 lines across 6 facilities. We did not shut down our operations at any of our sites. More importantly, we retained and deployed our top talent and focused our team on a much more diverse mix of railcars that required frequent changeovers and small lot sizes. As demand recovered, we brought back nearly 5,400 of our furloughed employees and reactivated our idle lines, increasing capacity by over 80%. Greenbrier Manufacturing accomplished this with great care and control of the health and safety of our employees, maintaining our superior quality and navigating a very turbulent supply network, both nationally and internationally. This was an unprecedented swing from peak to trough and back to a historic peak for Greenbrier Manufacturing. Thanks to our outstanding workforce and terrific local leadership, we delivered on time with record-setting safety and quality and discovered significant cost reduction opportunities in the process. Let me touch on some of these cost reduction opportunities and other actions that are underway to significantly lower manufacturing cost to enable greater market competitiveness and support higher margins going forward. We're doing all these things without impacting superior product quality, world-class safety, customer responsiveness, and a supply leadership position. We're undertaking various actions centered around three strategic priorities that will expand Greenbrier Manufacturing's through cycle earnings. These are rationalization, cost optimization, and fundamental manufacturing efficiencies. It is important to emphasize that some of the initiatives I will discuss will be achieved over the next three to four years and won't immediately impact our results. Others will have a more near-term impact. With respect to our production capacity, a rationalization plan is already underway. For example, last year, we announced that we would no longer be producing railcars at our Gunderson facility. Including Gunderson, we have identified other steps to take to optimize our manufacturing footprint and have commenced a plan to drive $15 million-$20 million in annual savings. These are costs that are getting taken out of the system permanently. Long before the pandemic, we've shown a strong ability to manage our capacity efficiently through the cycles. The pandemic was a bit of a case study in how quickly we could do that. We are proud of how we managed our production base over the last several years. We came out of the pandemic having identified several blind spots. We are also leveraging the vertical integration know-how gained through the acquisition of ARI to help us better control and own larger portions of our supply chain. This strategic action, which we are currently implementing in Mexico, will bring in-house higher costing outsourced basic primary parts and subassemblies. The initial savings are already being realized this quarter, with full savings expected to be realized in fiscal year 2025. On a $3 billion revenue base, our make versus buy strategy will create savings of about $50 million-$55 million, which equates to over 170 basis points of margin. As you can see on this slide, we are reducing our reliance on outsourced fabrication by nearly two-thirds by bringing component manufacturing in-house in the next 18 months. These are not exotic parts with unique processes. I'm talking about just more volume for ourselves and by ourselves. There is also the additional benefits of insourcing, such as reducing supply lead times, the uncertainty of long-distance logistics, as well as reducing raw material inventory levels that are organically inflated during outsourcing. This effort will be never-ending and ever-evolving. In the coming years, Greenbrier Manufacturing will be taking assertive actions to significantly improve our overall manufacturing efficiencies beyond those I just described. Many of the initial actions we started following the ARI acquisition were paused due to travel restrictions due to COVID and the dramatic downturn and recovery. Greenbrier Manufacturing is well positioned to harvest these opportunities in earnest right now. We've been identifying and documenting our best practices across our global network and have started to horizontally deploy these best practices. This is taking place in the factory processes as well as our engineering designs. These more innovative and efficient designs and processes are rolling out for our customers' benefit, as well as to eliminate waste and inefficiencies of the past. In conclusion, I'm highly confident in our ability to maintain a leadership position in North American manufacturing. We have the scale, the capabilities, the talent, and a favorable demand environment going forward. We will continue to deliver our superior new railcars to our satisfied customers. We have an excellent team that has been battle tested and is focused on executing changes in our system rapidly and effectively. The momentum is building, and additional gains will be realized as the supply chain calms and better pricing is seized. Finally, we are focused on rapidly advancing multiple initiatives to drive cost savings and enhance our margins over the long term, regardless of the demand environment. Thank you again for investing your time and for many of you, investing in Greenbrier. We certainly appreciate it. Thank you. Now I'd like to introduce William Glenn, our European leader of Greenbrier Astra Rail. William? Thanks, Bill. Good morning. The elaborate title you see there is a function of the fact that our European operation is actually a joint venture, so it's 75% controlled by Greenbrier, 25% owned by the former owner of Astra Rail, the Romanian car builder that we acquired in 2017. I thought I'd start off by spending a few minutes putting the European rail freight sector in context because you guys are all pretty much experts on the North American industry, but the European industry is less well known, in part because, you know, we don't have ARCI, we don't have orders, backlog, delivery, those kind of statistics in Europe. The numbers that you're gonna see today are good faith best estimates. It's hard to get data over there, so we believe that the numbers are directionally correct, but they're estimates. Just be aware of that. It's fair to say that the European rail freight sector is decades behind the North American industry. North American industry deregulated in 1988 with the Staggers Act, and that unleashed a wave of productivity improvements. The European industry has only recently completed a deregulation process that's taken over a decade, and I'll talk a little bit more about that in a minute. As partly as a consequence of that, the share of rail freight in Europe is lower than it is in North America. North America, it's about 40%, in Europe it's just below 20. Other big differences in Europe. In Europe, the network is dominated by passenger traffic. Europe is passenger first, rail second. In North America, it's the other way around. There's some other implications of that. The track network in Europe is owned generally by the government. In North America, you know, BNSF owns its own track. In Europe, the government owns the track, largely because most of the traffic is passenger traffic. Other consequences of that are, the network is mostly electrified in Europe, so you can see the photograph there of a European freight train running under electric catenary. No double stack in Europe. It's not possible. I think most trains in Europe, that locomotive happens to be a diesel one, but most freight trains in Europe are running on electric locomotives. Another big implication of the government ownership of track is that it's an open access system. In North America, UP can't get on the BNSF track and compete for traffic on that network. In Europe, it's like paying a toll. You get on the highway, you lease locomotives, you lease rail cars, you get your operating certificate, and off you go. You can knock on any shipper's door and offer to run, to haul their stuff from A to B for whatever price you negotiate. It's an intensely competitive environment from an operating perspective. In Europe, the government regulates the industry, so very high technical standards for freight cars. The freight cars are running on track that has much higher speed freight, passenger traffic on it. The technical standards and the safety standards are extremely high, and the regulatory process is a little bit slower. North America, the AAR is effectively self-regulating in the industry. The fleet in Europe is 678,000 odd cars versus 1.6 million in North America. Just over 40% the size of the North American fleet. You can see it's a very different landscape, and one that has been changing as a result of deregulation. If you look at the impact of deregulation, before deregulation, the industry was dominated by the state-owned rail operators. DB Cargo in Germany, SNCF Freight in France. They operated primarily within national boundaries. There was very little cross-border traffic. Of course, freight gets more competitive the longer the distance you go. If you're not crossing international borders, that's gonna hold back the potential for freight. The first wave of deregulation, which began in 2001, focused on technical harmonization. If you want to go from Germany to France, you got to go through the Netherlands and Belgium. In the old days, that was four different signaling systems. You didn't have locomotives that could do it. You didn't have a European train traffic control system. You didn't have drivers who were trained to do it. Nowadays, you can do that. You can run a train from the toe of Italy all the way up to the Arctic Circle in the north of Sweden. That whole process has been completed. It is now a harmonized network. One of the big impacts of this is that before deregulation, it was the state railroads bought cars. Now they've been faced by a wave of competition from these very, very agile low-cost competitors, and they're getting killed. They've lost a lot of market share, and they're losing an enormous amount of money. I think that I read last week that DB Cargo lost EUR 630 million last year. That's replicated across all of the state-owned operators. The private guys are absolutely killing the state operators who have the legacy costs of being part of the government. They've got union employees. It's a complicated situation. In the old days, the state railroads bought the rail cars. Now they don't buy rail cars at all. Everything that's gonna happen in Europe in the future is going to go to market through the leasing channel. Shippers in Europe don't own cars, partially because the regulatory environment is so much more onerous. Basically, the future of freight car ownership in Europe is leasing. Other implications of deregulation and the increased level of competition, consolidation on the car-building side. There's now 2 big car builders, ourselves and a Slovakian company, and then a long tail of smaller guys. The chart you see on the right-hand side there is our estimate of the share of the operating lessors in Europe. You can see the top 5 operating lessors have about 80% share of the market. Radical changes as a result of deregulation. Taking a look at the structure of growth going forward, there's 2 things are gonna drive growth in Europe. First is it's an old fleet. The chart you can see on the left-hand side there shows that 38% of the European fleet is over 30 years of age. If you say that the economic life of a freight car is 50 years, it's not really, but let's assume it is, then you've got 250,000 cars have got to be replaced in Europe over the next 20 years. They won't get replaced one to one because nobody's buying new coal cars, and the new cars are more efficient than the old cars. For every 2 old ones you scrap, you maybe need 1.5 new ones. Nevertheless, it's an old fleet, and there's a need for a significant replacement demand. The other big driver is going to be EU climate policy. The EU takes climate change very seriously, has set these very ambitious goals to be carbon neutral by 2050. The headline number on the Green Deal was EUR 10 billion or EUR 10 trillion. There's money pouring into climate initiatives across Europe. The one that's relevant for us is what's called Shift to Rail. The goal is to double the modal share of rail freight by 2030 and to move 50% of overland freight by 2050. There's real money flowing in. There's a number of tenders out there at the moment in Europe where there's 50% subsidy available from the government to buy rolling stock and locomotives. For some infrastructure projects, you can get as much as 80% paid by the government. So two big forces there that are going to drive growth and demand for freight cars going forward. If you see what that looks like in terms of numbers, the chart on the left-hand side is produced by a company called SCI Faircare. It's one of the leading consultancies in the industry over there. The gray line at the bottom shows their base case forecast for billions of ton kilometers of freight traffic. The red line represents the impact of the EU climate initiatives. We're behind, and we're not going to hit the targets that have been set by the EU, the reality is somewhere between the gray line and the red line. The fact of the matter is there's a long-term growth trend, and you've got a huge regulatory push behind it coming from the government. If you convert that into numbers, what does that mean in terms of demand? Again, the chart on the right-hand side, these are our estimates, they're estimates. We think replacement demand is running around 12,000 wagons a year. Call it a range, maybe 10 to 12. To hit the climate targets, you would have to add another 10,000 wagons a year for the foreseeable future. The fleet has shrunk since deregulation and is now basically running at full capacity. When the Ukrainian war broke out, there was a demand for new cars, and the answer was, "Sorry, guys, the fleet is completely utilized. There's no spare equipment in the system." To meet these growth goals set by the EU, you're gonna have to grow the fleet and add new cars. To put that in context, the red dotted line there is our estimate of current demand. We think it's running around 15,000 wagons a year at the moment. Based on what we're seeing on our sales pipeline, we think next year's gonna be higher. It's above replacement. It's not quite at the level that you would need to hit the climate targets, which is consistent with the feedback that they're behind schedule. It is a major focus area. That's the market. We think there's a very robust demand outlook for the foreseeable future. It's not gonna be a straight line. There's obviously gonna be ups and downs, but the general trend, I think, is quite clear. If you look at how we're positioned in the industry, we believe we're very well positioned to take advantage of this. We've been in the industry in Europe since 1997 with our original investment in Poland. We believe we're the number two builder. We estimate our market share to be somewhere between 25% and 30%. It's a relatively concentrated industry. Ourself plus the number one producer, we think we have a share somewhere in the 50%-60% range. We have a very broad product portfolio, maybe one of the broadest, if not the broadest in the industry. That's important because to use Buffett terminology, that gives us a defensive moat. To get a new rail car certified in Europe, it's an 18-month to 2-year process that can cost between one and a half and EUR 2 million. For the tail of smaller competitors out there, they got a lot of hills to climb to be able to compete with us across all the various markets. Importantly, just like Bill was saying, the center of gravity of our operations in Europe has moved south, or in the U.S. has moved south. In Europe, it's moved east. We operate most of our capacity is in Romania, which is one of the lowest cost operating environments in Europe. We also operate in Poland, which is Eastern European cost levels. We have a small footprint in Turkey, which is very low. We think it could be an important supply base for the future, but it's obviously, you know, geopolitically, it's a little bit of the Wild West down there. Inflation is running at 100%. There's an election coming up. We're keeping our options open. We're using Turkey to feed low-cost components into the system at the moment. A very strong competitive position against a backdrop of strong demand. I think those two on their own position is to drive earnings growth going forward. Turning now to some of the stuff that Bill talked about, we see significant upside from operational improvements inside our existing business model. Streamlining our manufacturing footprint, we think brings major benefits. We produce more wagons in a smaller number of facilities, reduces our fixed cost per wagon. There's huge opportunity to improve productivity in Europe. If you compare productivity in North America to Europe, it's significantly higher in North America. There's no reason why we can't transfer many of those best practices to Europe, and we have a team of people on the ground working with our Polish and Romanian manufacturing team at the moment. We're making good headway on that front. Streamlining and simplifying the product range is another area that'll have a big impact. Back in the day, each national railroad had a different standard for a grain car. A German grain car was different to a French grain car, was different to an Austrian grain car. They're all doing the same thing. The laws are physically the same. We've standardized the product range, rather than producing a custom car for every customer, we now have one type of grain car that allows us to keep the production lines running. That's an area that we think has some major benefits. Leveraging supply chain and purchasing economies is an area that we're focusing on. With COVID and the Ukrainian war, we were focused on just keeping the supply chains running because it was, you know, particularly when the war started, it was, you know, it was chaos. We didn't know if we could get supplies. Thankfully, things have settled down after that, and the supply chain has regrouped. Now we're focusing on leveraging the purchasing synergies. The final area is systems. The Romanian operation was running on an old IBM system. We've now flipped that over to a Microsoft Dynamics cloud-based system, so that's the cornerstone of a new ERP rollout, and our Polish operation is about to move over to that cloud-based system too. Those things will bring huge operational efficiencies and also then integrate with our supply chain initiatives. Most of the extra upside comes from the operational improvements that I've just described. There's also a new venture, which is to replicate our North American lease syndication model in Europe. We're not planning to grow and own fleet in Europe, but we do wanna replicate the North American model where we originate leases, and then we syndicate those. Does a lot of good things as it's done in North America. It allows us to keep production lines running. If we have a hole in a production line, in the past, we might have shut it down. Now, if it's the right product, we'll order for our own account. We'll look to find leasing customers, and we'll syndicate later on. Manufacturing efficiencies come out of that. It gives us a lot more control over our share of the marketplace. As you saw earlier on, leasing is the future, and the leasing segment is quite consolidated. The ability to go direct to market and deal with shippers gives us a lot more control over our market share. Finally, there's margin potential upside because a railcar with a good lease attached is worth more than a railcar on its own. The leasing venture is new, it's small, and it'll be measured in the hundreds of cars, so it's not a material impact, but we think it is something that can grow over time. Summarizing, the European market looks set for growth. We have a very strong fundamental position, and we see significant upside from optimizing within our current business model. The combination of those things leads us to believe that our European business can be a significant contributor to shareholder value over the coming years. With that, Justin, I think we now have a question and answer session. That's correct. Yes. Okay. We'll have a few microphones that we can pass around, that way questions can be heard by everybody. We'll just go ahead and start over here to my left. All right. Thanks. This is Justin Long with Stephens. Appreciate you hosting this event today. Maybe I could start with a question on capacity. You referenced theoretical capacity, 33,000 units. How much of that is in North America versus Europe, number 1? Number 2, when you talk about capacity optimization, is that just Gunderson or maybe you could talk about future capacity optimization that you're planning. I can talk a little bit about the overall capacity. A large majority of our total global volume is in North America. There's a few thousand in Brazil as well as in Europe. Those are on the increase, so we expect those to be a larger portion. Where in North America, that 22,000-24,000, we see pretty much as the, you know, steady state for our market. As far as capacity, it's really a function of the product mix that we're looking at. To give you a for instance, if we have customers that are looking at, A three-coat interior high bake lining for a particular car, that may consume some of our, you know, a majority of our paint shop capacity. Where if it's a unlined car that's going through our factory, we may have upside capacity. It's really gonna be mix dependent and customer specific. As far as capacity rationalization, that's where we're looking at where we potentially have those inherent bottlenecks that don't maybe align with where we see the market trending. As well as we're looking at different facilities that may not be currently in our core, you know, business, so we're evaluating those. Or if they are substantially underperforming what our expectations are, we'll evaluate whether or not it makes sense to keep them running. Right now, the near term focus will be the ending of our railcar manufacturing at Gunderson next month. That will be kind of one of the steps to help optimize our footprint. That will be after close to 40 years of producing rail cars in the Northwest for Gunderson Greenbrier. We've produced well over 100,000 rail cars up there in our history. What's the capacity pro forma for all these changes? It goes from 33,000 to what? Like I say, it's gonna be a function of the type of rail cars that are being requested. Right now I think we're in a good capacity situation. There's no real plans to grow or shrink dramatically other than to be flexible for our customers. I think, Justin, what you can see is that, I mean, when you think about over the long term, right, our industry has an amazing ability to flex as the demand flexes, right? We can contract when we need to. Just when you think that there's no way that you could build one more railcar, these guys figure out how to build one more railcar. We'll be responsive to the demand. Hey, it's Ken Hoexter from BofA. Thanks for hosting the first analyst day. I haven't been doing this for 29 years, but appreciate it for more than 2 decades. It was just for you. Looks like, on your slides, it actually looked like you were losing share on both backlog and manufacturing. Can you talk about that? Is that a competitive issue? Is it pricing? What is the thought there? It looked like Trinity seemed to be really scaling, both squeezing the smaller carriers but also against Greenbrier. That's one. Second, you're doing a lot of insourcing, and it seems like that's great, but you didn't talk about cost. Is there a cost to doing that, to adding fabrication machines, storage of raw materials? What's the upfront that you've got to adjust and add to get the benefits there? Thanks. I'll take the first one, which, if you remember, Trinity received a large multi-year order in September, October this last year. That created a disproportionate shift in their share over the last in calendar Q4. That was the driver of it. It's not a long-term loss of share or anything like that from our perspective. To answer your question on the insourcing, there will be a modest investment in capital equipment. Generally, what I showed on the slide is we're looking at north of, you know, our 30% ROIC for that specific investment. It's really making more components that we've grown, we kind of outgrew some of our internal capacity of making some of the smaller parts and some of the subassemblies. The cost reduction is gonna come out, not only because we'll have control over that part of the supply network, but we'll also reduce logistics costs, double handling, and we'll be squeezing a lot of waste out of the system when we can bring that stuff in-house. The overall investment's gonna be relatively modest. It's within the CapEx guidance that we've given previously, so it's not like it's a big investment. Thank you very much. Is this working? It's working. Matt Elkott, TD Cowen. Thank you guys for the longer term targets. On the gross margin, aggregate gross margin target, Lori, I just wanted to make sure I understand. Is this the range, the mid-teens is the range you see yourselves at going forward? Meaning we, you know, you know from trough to peak, we'll be fluctuating from, let's say, you know, 14%-17%, or is 15% or 16% the through cycle margin, but the range could be wider? You almost answered your own question, right? It is gonna be very mix dependent. I am seeing that being the broader range that you talked about, but through the cycle, right? Within that range, I would expect that we'll have periods that will be a bit higher. I know that that's what this team is really focused on, is how can we drive better returns through to the bottom line, and that starts with improving our cost basis that Bill's been talking about and William, and having that drop through to the bottom line. Okay. We can't rule out, margins in the single digits going forward, depending on the cycle? I think if the cycle drops back, I mean, single digit margins, I hope that, I mean, we got out of there in the second quarter, but I've been in this business for too long to say that nothing is ever possible. Okay. Just to follow up on the capacity question, what do you think the industry capacity is right now in North America? I would imagine we're not going back to 82,000 cars that we did in 2015. I think that's a great question, and I don't know, Brian, if you have an answer, but I would say that, yes, capacity has been removed from the overall North American market. Prior peak 82,000, you know, is it somewhere 65, 70 maybe? I, again, just when you think that the North American manufacturing group has gotten discipline and we're kind of holding that, we're crazy about being able to be responsive to that demand. You know, I hope we've taken about 15,000 cars out. Is that about right? I guess I would say, I think, capacity is probably depending on your car type, again, heavily caveated, you know, maybe 60%-70% if everything's running full bore and you don't have labor issues. We are labor-constrained in the United States, and that's one of the reasons why you've seen the shift down to the Southeast and then down into Mexico. You know, even if you are able to get the orders, you may still have issues from labor ultimately. You know, north of 60% might be rough. Just one last follow-up. If it is 65,000 now down from 82,000 or so, does that help even out the margins for you guys and for, you know, everybody else in the industry? If you do have a very strong year and you're not able to accommodate demand, I guess this year might be an example of that, then the excess demand that's not being accommodated will spill over to a following year, which would be, you know, might be a lower demand year, but then you might be producing, you know, at a similar level. Go ahead. I was gonna say exactly. That's why, you know, we look at backlog and the visibility that backlog gives us, gives us that, you know, 12 months forward space that we can look out and plan better and being disciplined about how we're allocating the space, thinking about our workforce. A lot of it is mix dependent and workforce dependent. Great. Thank you very much. Hi, Allison Poliniak-Cusic with Wells Fargo. Bill, you talked a lot about the, you know, efficiencies and production rationalization and so forth. From a commercial side, with the reduction in capacity and some of the discipline you're putting through, are you having a different approach to negotiations and new orders? You know, you guys are trying to build your own leasing book. Any thoughts on pricing? It seems like theoretically, pricing should be higher for you guys or the ability to price. Yeah, I think that's a great question to hold for the next section when we cover that. No, really. That, you know. My goal, really as head of manufacturing is to pull down our cost and remove waste that we've had historically in our cost. Then Brian's team is looking at where we have an opportunity to get a price premium, and that ultimately results in our margins. My focus is really on cost and then flexibility and availability of capacity when necessary. I'll say, you know, to your point about as we grow our lease fleet, we are being very disciplined about how we're doing that. I think that that does bode well for margin expectations going forward. Brian can talk to pricing in a little bit. William, for you had mentioned not looking at building a leasing fleet in Europe. Why not? It seems like it's a great opportunity over there. I mean, I would say, never say never, but, you know, the industry is different in Europe. The leasing industry has a different dynamic. We're starting where we started in North America with the syndication model at a small scale. We'll learn, we'll see how it goes, but yeah, maybe someday. Bascome Majors with Susquehanna. I have one and a half questions for Bill and one for William. Bill, right now, where you're producing in North America, are you at two shifts? Just kind of curious, you know, as far as, you know, what you're working through the factories, if you're kind of at a steady state, if there's still some opportunity to add capacity just by expanding a shift or hours or things like that without expanding the footprint. That's a great question, Bascom. The answer is we have a variety of shift patterns, and they're kind of line dependent and customer dependent on the demand and the immediacy that they need the supply delivered. In our Mexican plants, we do have some running 1 shift, 2 shifts, and 3 shifts. We do have the flexibility to add or reduce when necessary. Generally speaking, within North America or within the U.S. factories, we're pretty much running 1 shift, but we have flexed and run some parts of the operations on a 2-shift operation. You can run 3 shifts if needed? Yeah. With labor dependent, we would flex up utilizing the same, you know, capital base that we have if we can add more people. That has been more of a challenge post-pandemic in our U.S. factories. My second half question. You know, the delta in revenue was largely driven by putting cars on the balance sheet in the first quarter versus taking cars off the balance sheet in the second quarter. Your production was actually fairly consistent to quarter to quarter. Is that production run rate about where you expect to be? How much of the production ramp is still to go, or is it really more about the volatility being the syndication in North America quarter to quarter? Yep, I think you're dead on. We're pretty much in a stable environment that we expect, and we're looking out multiple quarters and see that stability there. That's not to say around the corner, three to four quarters from now, there won't be a shift in demand. Right now, I think this fiscal year for us, which we just finished our halfway point, is probably gonna be one of our more levelly balanced, production quarter to quarter than we've seen in some time. Okay. Thank you. William, last one, back to the lease comments about starting to scale up, at least at a small scale, the syndication model in Europe. Do any of your competitors in manufacturing originate leases today, or is that new to that market? What are your customers in the operating leasing space, who are the buyers there, think about that? No, we are the first ones to stick our toe in the water. In Europe, there isn't much of a secondary market at all. You know, North American operating lessors routinely buy and sell equipment from each other to balance portfolios. That really hasn't developed in Europe. We're the first ones to put our toe in the water. Our operating lessor customers, there's a range of reactions from not so happy to maybe we can work together and maybe there's something we can do. You know, it's an experiment. It's been very well received by shippers. Shippers really like the idea of dealing with the OEM. The market reception from that perspective has been much stronger than we anticipated. We're not trying to, you know, destabilize the market. What we've been saying to our operating lessor customers is, been doing this in North America for years, we found a way of coexisting, and we're sure that the market will find an equilibrium in Europe as well. Thank you. I just wanted to follow up on the margin guidance. If I think about some of the bigger picture trends that you've highlighted over the last, you know, 5 years or so, you've seen industry consolidation, you've broadened your product offering, now you're growing the leasing business. These are all things that should be positives for margins. If I look at margins in the fiscal second quarter on a consolidated basis, gross margins were just over 10% on deliveries that were fairly high, 7,600 units. I guess my question is, you know, what's driving that kinda undearning or those lower margins today? I would guess and the answer to that is the supply chain, that's not something that I think was highlighted in the slide. Maybe you could talk about what you're anticipating for the impact of the supply chain going forward and, you know, maybe if a recovery there could drive upside to some of the targets you've outlined. Yeah. I think the upside has been signaled in the information. I'll say kind of fundamentally, that we're looking at some of the expensive far-site outsourcing that really was demanded after the return of the market after the pandemic. Moving those near-site and then moving some of those near-site supply in-house on-site, that's where we're gonna see the fundamental reduction in cost that is gonna give us that wider margin than we saw in the second quarter. Yeah, I'd say we made progress in the second quarter, and we'll continue that progress, right? It'll build on itself as we make those changes. I was actually very pleased with how the manufacturing group was able to identify the issue in the first quarter and start making that shift in the second quarter. That, you know, those of us who see the monthly results, we know that it was improving month to month. Still a long way to go, though. Thank you. Justin Bergner with Gabelli Funds. First question on the cost side. The $15 million-$20 million of capacity rationalization savings, is any of that in the first half results run rate, or is that all to come? I think you said it's mainly through Gunderson, but there could be additional stuff on top of that. It's more to come. Okay. Secondly, the bigger, you know, cost opportunity, the $50 million-$55 million of savings, you know, primarily from insourcing and on the fabrication side, you know, why didn't you do that over the last few years? How should I get confidence that a good chunk of that will drop to the bottom line, given that it seems like some of your competitors are also proceeding on that pathway, and hence it could get sort of priced through as railcar manufacturers are competing for orders? I think that's a great question. I see it as kind of a natural evolution. As we first kind of filled out our portfolio and focused on making sure we had the mix available to satisfy our customers. Then growing the scale was the next activity that was accomplished. Really now is the natural point to start looking at how we can best optimize our supply network. I think if we'd have started out that way, it probably would've delayed the portfolio diversity that was necessary, as well as the scale might have not been as, might have been a lot more lumpy to get to where we needed to get to. so I see just the timing is right currently, and we believe we're in a stable demand environment, but obviously we don't wanna overbuild for an, you know, unrealistic capacity for the future. I would say just adding on to that, I think you're right, and we are in a more stable demand environment, and it's also broad-based demand, which is different than if you look back over time, where we've had a couple of different, very specific car types that were driving the bulk of that demand. In this business. It's been difficult to really predict exactly where that demand is gonna come from and where you want to deploy your investment dollars. I think now Bill's right. We are where we are. You can spend a lot of time looking in the rearview mirror and say, "Why didn't you do that before?" We certainly do a little bit of that at times, but we're really focused on where are we going and how can we optimize the footprint and the investments that we've made. Steve Barger from KeyBanc. Just a clarification. Over the past couple of years, there's been a lot of syndicated sales, not a lot of lease fleet growth. Going forward, should we expect fewer syndication deals structurally and more of a focus on increasing the units in your own lease fleet? No. Let me expand on that. We will, you know, if we didn't emphasize it enough, we'll continue to do so. We have really strong lease origination capabilities. We're focused on keeping a strong balance sheet. What that means is we'll be able to originate more lease product than we'll likely hold on our balance sheet, and we're able then to take that product and syndicate it to others. That gives us the opportunity to make certain that the portfolio that we're creating is disciplined, well-balanced. We'll have opportunities in the secondary markets, maybe sometimes to pick up some secondary market portfolios and do that shifting. We've been doing that over the course of the last couple of years and taking those points in time where you have that opportunity in front of you to make a shift to your portfolio. While we are very much focused on growth, we're not focused on growth just for growth's sake. We're looking at this portfolio and making certain that we've created something in a way that will last us for the life of those assets. What are you calling recurring revenue? Is it leasing revenue itself? Are you including part of maintenance in recurring revenue? Just trying to get a sense for what's gonna double between now and the next five years. Yeah, that's a great question. We would look at it as primarily our leasing and management services revenue. Syndication does provide some upside and a little more volatility, but it's just that core business that is kinda growing quarter over quarter over quarter. As you see that part has grown over the last, probably a few years. I wanna come back to a margin question, but if I can just follow on Steve's question. Your goal is to build that syndication fleet or the $200 million-$300 million in CapEx, or is that you bring it in-house, you operate it for a bit, you build up a fleet, and then just like last quarter, you then sweep it all out? I just wanna understand, are you building what is staying on the balance sheet, or is it just temporary and then you clean it out? Thanks for asking the clarifying question. It's a little bit of both. Again, we'll be able to originate leases for, let's say, you know, a 500 car order. It's 500 cars for the same customer, same car type. We maybe wanna hold 200 of those cars, and we end up syndicating 300 or 250. Depending on the mix of demand and the production rates will determine how long we hold those assets on our balance sheet. You're gonna still see rail cars held for syndication. You'll see that fluctuate a little bit, and we'll continue to moderate that because the liquidity that we can generate through the syndication model is very important, as well as we're not gonna build everything just to hold on our balance sheet. The syndication is to just build up the consistency. It's not to actually build up a huge leasing fleet over time. Correct. Okay. Just wanna come back 'cause you opened up with, hey, we're not gonna set a margin target on manufacturing, but we're gonna go into savings. Maybe that was Bill, not you. Kinda if I think about that, Matt asked before about getting to 82,000 when you had kinda 20%+ margins for 3 years, we fell into mid-teens kinda for 3 years and when you talked about single digits. Kinda set the stage. Is that on manufacturing, given your consistency, given the syndication, do you get back if it's not 20? What's the kinda optimization for these moves? Can you kinda put a parameter on what manufacturing can achieve? That's part of where, and I don't wanna speak for you, Bill, but that's where we gave the broad range on aggregate gross margins. Depending on the period of time, we might spend some time at the higher end of that range, depending on mix and what's going on. Those, the targets that we set were over a long period and through the cycle. I guess the 1 point I would clarify is we did provide hard dollar targets on the manufacturing margins. Manufacturing margin percentage, you know, obviously can vary widely when you're talking about $2 billion versus $3 billion of revenue, we wanted to provide something that's a little more concrete and actionable that you guys can kinda bake into your model however you see fit versus, you know, 13% of $2 billion or 18% of $3 billion. That's the same thing for leasing, right? 'Cause leasing fluctuates from 50%-75%. Is there anything that drives that? As, I think as we've spoken in the past, syndication activity has a pretty robust impact on a quarter-to-quarter volatility. We would say that as we've been growing our lease fleet over the last few years, our margin percentages in that business have been trending up higher than what we've seen historically. The syndication piece of that can definitely add some quarter-to-quarter volatility. Overall, we do see that as a strong recurring revenue, higher margin business segment for us. You guys gave the industry estimates for production in 2024. I think those are calendar year estimates. Down 9,000 cars. You guys have an August fiscal year, I would imagine it, you know, for you guys, it would be down less than that on a percentage basis because we're in a somewhat of an upcycle now and, you know, lead times are long. I would agree with that, I think part of our reason for showing that was to illustrate that we don't see a huge rising tide. What we're focused on is taking cost out of our business and managing what we have now. As Bill mentioned, we have good visibility for the next several quarters in our business. Kinda at the end of the day, this isn't gonna be a story about hoping for a massive tank car build or anything like that. This is a story of we're taking concrete steps to reduce our cost in North America and in Europe and to kinda restructure and reposition ourselves. Okay. I know the long-term outlook for Europe is pretty positive for next year. Would you say Europe could be, you know, up or down from 2023? Up. Up, for sure. Okay. All right. If your other geography... Then South America, Brazil is flattish, or? I think that, you know, Brazil. We are focused today on North America and Europe, but Brazil is at an interesting inflection point. I'd say the next 9 to 12 months, they're focused on building out their infrastructure. They're expanding quite a bit their rail infrastructure. Then we see more demand for rail cars coming following that. Okay. It's plausible that Europe would be up in your fiscal 2024, Brazil, it's plausible that it would be up. North America might be down slightly, less than the decline shown in the FTR data. For fiscal 2024, you could have basically flat deliveries? I think we wouldn't necessarily get explicitly into that kind of detail. I think what you said makes sense. I would say even if deliveries are down, we would expect that our profitability would be stronger based on the steps we've taken and, again, the assumption that there's not additional massive issues around the supply chain as we saw in the first part of our fiscal year. Okay. Thank you. Okay. Great. I think we're gonna take a small break now, do a side out rotate, get a cup of coffee, and we'll be back in about five minutes, 10 minutes. Thank you. Thanks, guys. If everyone can please start taking their seats. If everyone could please start taking their seats. Probably. Okay. Plus, we need to get the slides queued up. They'll do it as soon as... Cool. If we could go ahead and get started, I would like to introduce Brian Comstock. He is Chief Commercial and Leasing Officer for Greenbrier and is now one of the few people in the room who has been around longer than I have at Greenbrier. With that, I'll go ahead and hand it over to Brian. Thank you. Thanks, Justin. You know, I was kind of mingling in the crowd. Everybody has such a high expectation. I'm not sure that I can hold water. We'll see. As Justin said, I've been with Greenbrier for a bit of time, I think close to 20 years, but I've been in the industry for 42. That does not age me, by the way, for those of you trying to do math. Been around this business for a while. Good morning, everyone. You know, for us, this is an exciting time for Greenbrier as the business executes a leasing strategy to reduce the company's exposure to railcar cyclicality and generate a larger amount of high-margin revenue through the businesses which I'll describe today. Understanding how the pieces in our business fit together is key to understanding many of the decisions we have and will make, as well as understanding Greenbrier's future potential. As Lori mentioned earlier, despite our diverse products and service offerings, we are one organization focused on delivering value to our customers. The more value we can deliver, the deeper and longer our relationships will be. This is one of the benefits of having an integrated business model where all services can be provided by a single company to its customers. We've seen the benefits time and time again, where our relationship with the customer deepens, and we move from being a railcar manufacturer to a complete solutions provider. This slide, while labeled illustrative, is a real-world case study summarizing the evolution of Greenbrier's relationship with a single customer. What started here as a legacy manufacturing relationship with a lessor customer has transformed over the years to the point where the customer receives value from every part of our business. For operating lessor customers as well as railroads, industrial shippers, and investors, we're able to deliver a comprehensive suite of services to help them manage their railcars across their life cycles. Today, we provide services to roughly 450,000 railcars. This slide shows the variety of services we provide to our Management Services customers. As our customer base grows, so does our base of recurring revenue. We also have an aftermarket network serving a broad range of customers. Across 20 strategically located production facilities, we have annual capacity to build over 300,000 wheel sets, 90,000 axles, and 42,000 other parts and units. In addition, we have the labor force to perform nearly 500,000 hours of maintenance services. Our strong lease origination capabilities is key to our business. It is the starting point for a lot of the work we do. These originations fit in nicely with a manufacturing company, as railcars built for lease provides us with a base load of work. Leasing, particularly in light of the new leasing initiative we launched in fiscal 2021, also provides Greenbrier significant optionality, which I'll describe shortly. However, before I discuss our leasing initiative, which is a significant departure from what Greenbrier has done in the past, let me spend some time talking about how we approach originations and how leasing fits into our business more broadly. Having a disciplined approach to underwriting is critical. We underwrite leases with counterparties we are highly confident will perform on their lease obligations and lead to positive outcomes for both Greenbrier and investors in lease fleets we syndicate. Some of these considerations are laid out on this slide. Of equal importance, our lease fleet, again, I'm talking about both our long-term owned fleet and the fleets that we syndicate to investors, needs to be comprised of the right kinds of assets. There are booms and busts in specific railcar types, and we want to minimize our exposure to any particular commodity or end market. Therefore, diversification is key. Likewise, the assets itself needs to be of high quality, which means we are either building it ourselves, which is typically the case, or sourcing it from a reputable manufacturer whose equipment we know very well. If we do all of this correctly, we will have consistently high fleet utilization and highly liquid assets on our balance sheet. We underwrite leases consisting of the right kind of assets to strong counterparties generating high levels of syndication activity. This provides liquidity, premium returns, and fees through lease management and aftermarket services. Since the end of fiscal 2018, we have generated over $2.2 billion in proceeds from syndication. Our ability to access third-party capital also enables us to manage our lease originations more effectively, ensuring our own fleet and the fleets we syndicate are constructed in a manner which mitigates credit, duration, and equipment risks. We wouldn't be able to do this as a pure leasing company, and it's not an activity that has limitless potential. Still, it holds potential for Greenbrier, and we are very excited about the growth of our leasing business. As I mentioned, syndication drives liquidity, which flows through the systems and supports our overall strategy. As you can see from the charts on this slide, with the exception of fiscal 2021, when we had a very low production year, we have consistently generated strong revenue from syndication. Leasing also supports baseline manufacturing capacity and fills gaps in production. Lease fleet orders have ramped up significantly since we launched our new leasing strategy. Over the last 2 years, leasing orders accounted for 38% of the total orders. By comparison, in fiscal 2019, prior to the ARI acquisition, leasing orders accounted for less than 23% of the total order activity. Remember that all these orders have leases attached to them, and we rarely build speculatively. As we invest in our own fleet, a greater portion of delivered railcars will reside on our balance sheet, generating recurring revenue. As most of you know, we shifted our lease strategy in April of 2021, enhancing our prior asset-light model. This is creating the opportunity to capture a greater portion of market share. The rationale for the shift is pretty clear and supported by many expected outcomes. Most notably, growth in recurring revenue to partly offset the cyclicality of new railcar ordering and the compelling economics of producing railcars internally for our lease fleet, where ROEs are in the 11%-15% range. We are, of course, not making these decisions in a vacuum. The enhancement in our lease strategy aligns with the broader trends in railcar ownership. As shown on this slide, over the last decade, ownership has shifted to lessors, particularly for tank cars where lessors dominate due to complex regulations. Shippers and TTX are effectively flat over this period. Importantly, during the same time period, ownership by railroads has declined as they focus their capital investment on infrastructure. We're about 2 years into our enhanced leasing strategy, and we think we're off to a great start. Foundational elements are in place for the future growth. The next few slides provide a snapshot of our current lease fleet, which is comprised of 12,300 railcars. I won't read all of the stats on the slide, but I'd like to highlight our high utilization, average term, and broad customer base. Our fleet is high quality and diversified. The vast majority of the railcars in our fleet are less than 10 years old, and the average age of our fleet is 8.5 years. We also have a balanced mix of railcar types in our fleet. In terms of underlying leases, the durations are staggered to both mitigate the impact of cyclicality and create upside potential through favorable renewals. Our goal is always to have a balanced approach to portfolio renewals so that we do not have a disproportionate volume to renew in any given year. One thing to point out is that the higher volume of renewals in 2024 results from the small portfolio we purchased in September of 2021. We are currently actively working to renew these cars ahead of time to ensure these cars stay on lease. When we announced our enhanced leasing strategy, we referenced the importance of aligning our debt facilities with what you would expect from a traditional leasing company, at least with respect to our lease fleet. We initially established a non-recourse warehouse facility and then issued asset-backed notes last year. Our lease fleet average has increased from 46%. Sorry. Our lease fleet leverage has increased from 46% to 80% over the last two years, and we expect to continue our financing at around 75% leverage. Over the last two years, our lease fleet utilization has increased as we began to achieve scale. It has been stable over the last four quarters, and we expect this to continue. As you can see, the actions we've taken have led to consistently improving financial performance for leasing and management services, where gross margin dollars and% have increased considerably. Our reoccurring revenue has also grown by around 35% since 2019, as we have grown both our lease fleet and our fleet managed by Greenbrier on behalf of third parties. As you heard earlier, we are targeting a further increase in recurring revenue with a goal of doubling it over the next few years. I'll explain how we're gonna achieve that target and help to smooth Greenbrier's through-cycle performance. Looking at our leasing and services business, holistically, we see further opportunities to optimize the business. The expanded commitment to invest in our lease fleet will accomplish 2 goals. It will increase our recurring revenue and smooth consolidated performance, something that you've heard and will continue to hear from us. It will also allow for increased overhead absorption, and not just in manufacturing, but across management and maintenance services. Elsewhere within the business segment, we are working on optimizing our internal platform to eliminate redundant processes and systems to drive savings over time while leveraging best practices across the organization. To reiterate what you heard earlier, we are increasing our net investment in our own fleet to $300 million per year over the next five years. What's important to caveat that statement by mentioning we're only gonna make these investments if the underlying leases meet the criteria I explained earlier. This is not growth for growth's sake. These investments are expected to produce incremental annual margins of $15 million-$20 million, targeting returns on equity of 11%-15% and a return on invested capital of 8%-11%. To get there, we're going to continue to source diverse, flexible funding to ensure ongoing strong liquidity. The type of debt instrument we employ will depend on where we are in the rate cycle. Also, we remain diligent about matching lease term and funding maturities and our staggering maturities over time. As I said before, we continue to take actions to improve our aftermarket maintenance service business. This is a plan we have been executing for the last couple of years, and the result is reflected in increased margin in this segment. Through leasing and management, we're looking to more than double our re-recurring revenue from the last 12 months through our investment in the lease fleet. To recap, our expanded commitment to invest in our lease fleet is a strong growth driver for Greenbrier that will unlock value across the system. The opportunity is significant to drive consistent, strong fleet utilization, grow recurring revenue, and drive further integration across Greenbrier. With that, I'm going to invite some of my colleagues up here to take part in the Q&A. I'd like to introduce you first off to Mr. Brian Conn, who is the Senior Managing Director of Structured Financial Products. Woo, woo. Mr. Rick Galvan, Senior Vice President of Greenbrier Rail Services. Larry Stanley, Senior Vice President of Finance at Greenbrier Leasing, and Dan Weiler, Senior Vice President and Group Leader of Greenbrier Management Services. With that, we'll take any questions, but I'm sure I answered them all, in my presentation. Thanks. This is Justin Long from Stephens again. Maybe to start with one on the planned lease fleet investments. The $300 million annually, it sounds like is a net number. I wanted to clarify that. I'm curious if you have any thoughts around what the gross number could look like. As you think about growing the fleet, is this all gonna be a function of internal builds, or will there be secondary market purchases as well? Maybe you could help us understand what that split could look like. I'll take 2 first, and Larry, you can take 1 on the net versus gross. On 2, we're gonna be opportunistic, much like every other operating lessor, you know, out there. We have the ability to look at our originations and kind of sort through the deck to make sure that we meet our own internal goals. We're also gonna look at, you know, smaller portfolios in the market as they present themselves as well. I'd think of, the gross, somewhere around $375 million-$400 million. We would net out with rebalancing the for-portfolio down to $300 million. Just in terms of my prior question, in terms of pricing, just the consolidation and the manufacturing side, what's your ability to, I guess, first get pricing around that? Then in line with your expected investment in the fleet, you mentioned, I think 38% of the orders were to the leasing book. Is that a good number or a guidepost through cycles? Obviously, understanding that new order or new deliveries would certainly be volatile. Allison, maybe you can restate the margin question. Just your ability to price in this environment. I would say even from the new orders that you're just delivering to external clients versus the ability to leasing, just given that very limited capacity on the manufacturing side. Yeah. You know, the ability to price is actually growing in strength. A lot of the operating lessors, I think most of you know, have been on the sidelines since really the pandemic. So on the leasing side, you've really had a couple of major competitors and ourselves that have been, you know, competing. I've seen a lot of discipline as interest rates, you know, continue to rise. From the pricing standpoint, we feel that we've been very successful, and we think that will continue. Now, as operating lessors begin to reenter, in a small way, you may see some pressure, but currently, pricing continues to grow, and I think you see that even in the manufacturing margins. It's kind of what we have said in our calls, our analyst calls, is that you'll see this progression of margin as some of the older orders get out, as discipline returns to the industry, and as backlogs get filled up, you're starting to see that, you know, that discipline reemerge. Got it. Just to the 30% of new orders to the leasing book, is that a good guidepost? I think that's a good guidepost. you know, based on where our manufacturing capacity, our planned capacity over the next few years is, I think that's a fairly, you know, good number that we'll be generating, somewhere between 30 to maybe as high as 40% will be either syndication product and/or, going on to the lease, fleet, so originations. Brian, thank you for that presentation. Can you maybe give us an update on the secondary market right now? Valuations have been pretty elevated for the better part of the last couple of years, but interest rates are rising and there are some cracks in the valuations, I guess. Do you think this might be like an opportune window for some asset owners to try to sell their fleets before they have to refinance debt and while valuations are still elevated? If that is the case, are there opportunities for you guys? Yeah. I'll start with the evaluation side of the equation first. I think we're starting to see some of the decline evaluations. You're right. Over the last, you know, maybe couple of years, there's been a lot of activity, robust activity in the secondary market, we're seeing a lot of that start to wane a little bit, you know. Some of that is driven by interest rates, right? As people look to buy these portfolios, they've got to fund their debt at a certain rate. A lot of these portfolios may have been, you know, the leases may have been originated two, three, four years ago when interest rates were at a different level. The returns aren't nearly as attractive as maybe the new originations are that are more closely aligned to the debt, today's debt. We're starting to see some of those portfolio values start to come down. Now, I still don't think they're in a realm where we would get too excited ourselves, but certainly, they're headed in the right direction. You had a second question, I believe. You answered it. Okay. It was, you know, whether it would be an opportunity for you guys. Yeah. Your appetite is not quite there, I guess, yet. The other question is on the nature of leases. You guys have a pretty strong maintenance repair network. Can you maybe talk about what percentage of your leases, either now or you know, you foresee going forward, are full service leases versus net leases? Yeah, most are full service lease. You know, given a handicap in it, you know, over 80% are full service lease. Okay. That should be a stable percentage going forward? Correct. Okay. Correct. Thank you. Yes. With respect to utilization, and productivity among the rails, could you comment on sort of how that dynamic is affecting the market today in terms of purchasing behavior? Is there a concern that as, you know, efficiency improves, that that will change, the demand for, you know, new and leased rail cars? Then any sort of comments or things you're hearing about potential new regulation and how that may keep, you know, rail car utilization still somewhat, you know, subpar. Sure. No, that it's a good question because we, you know, we kinda usually kinda have a thumbnail that has worked out pretty good over the decades, that for every mile per hour of increase in velocity or decrease is about a 35,000-40,000 car shift in what actual demand is to move the same amount of product. you know, the obvious, you know, answer is, as velocity improves, they can move more product with fewer cars. what you're seeing is, you know, you're continuing to see pent-up demand of people that want to move by rail. A lot of that's for not only because there were spot truck issues, which is now somewhat alleviated, but more importantly, it's part of their ESG goals and initiative as well, because rail steel is the cleanest form of transportation out there. We're seeing, particularly on the food product side with insulated boxcars and mechanical reefers, we're seeing the big name companies wanting to move more and more by rail, and we're seeing even more of your agribusinesses trying to move more by rail as well. Maybe underlying that a little bit is there is some demand, most of you are probably following what's happening in the soybean crush area with biofuels and different things. There's some underlying growth there that is also helping offset some of this velocity issues. As far as the re-regulation side of the world goes, we're not counting in any of our forecasts, anything relative to the latest derailment or some of the potential regulation changes in tank cars that may occur or some of the accelerations of the timelines. We see that as all upside if indeed that comes to fruition. Bascom Majors, Susquehanna. I wanted to go back to the targeted return slide you put up on the lease fleet there. Can you talk about that 11%-15% ROE? Is that a gap return a few years in, or is that a long-term return over the life of the asset? Can you talk about what goes into that number and what it really means? Secondarily, you know, if you're using 80% leverage, how does the, you know, 8%-11% ROIC bridge to the 11%-15% ROE? Thank you. Larry, I'll defer to the expert. Sure. The ROEs and we have been achieving those. They include everything through the lifecycle of the lease, not just the stream rate, but also the residual sale and the gains on sales at the end. Okay. The ROICs in our calculation, we take into account the cash tax benefits that are generated where we shelter manufacturing taxable income. The ROIC is a cash? Yeah. No pat with cash tax. Yeah. Just to follow on Bascom's end, can you maybe dumb the whole process down and talk about what you're paying per car on average, what the average monthly leasing rate is, just so we can kind of conceptualize the process? Secondly, you just touched on regulation, Brian. Thoughts on ECP brakes. Is that something that's likely that would need to be distributed on the entire fleet over a 15, 20 year process, or is that too big a dream to actually get implemented? I don't wanna speculate on what may or may not happen with ECP brakes, but I can tell you that most of the fleets, in the last Close to decade have been equipped to be retrofitted with ECP brakes. All your newer assets. It's probably not as steep a hill to climb as a lot of people believe it may be. As far as what, you know, the government may do as far as regulation, I honestly don't know. ECP brakes, I think it's safe to say, I think there's publications out on this, would have had very little, if no effect on the Ohio situation, it certainly is something that the politicians are very, you know, keen on. As far as, you know, average ASP and lease rates, honestly, I don't have a number that I can just wing. It's probably best not to at that point. Yeah. It's more just a matter of car type by car type. It truly is. Would you be able to speak about maybe a trajectory or kind of how you've seen some of this trend? On lease rates? On lease rates. Yeah, lease rates continue to trend up. You know, in fact, you know, our renewals, I think we continue to see high double-digit renewal rates on everything that's coming up. As, you know, the interesting thing is, as debt rates move up, interest or lease rates are moving up as well. Today, it's not so much about commodity prices, which it was a couple of years ago, where you had the large swings in steel and surcharges and different things. It really truly is more about what the Fed rates and what the interest rates are today. So far, the industry has been very disciplined to follow that trend up and pay appropriate returns. Given the importance, and you're focusing on doubling the growth here of the company and of leasing, is that something we can expect to be broken out going forward so we can track the progress of that versus managed services and everything else? We will take that under consideration. I'm not ready to commit to that quite yet. Thanks for asking. You've talked about the strength we're seeing in pricing for leasing. I was wondering if we could maybe shift to the cost side, particularly kind of in-house maintenance that you're doing today and where that could go as you scale the fleet. Maybe you could speak to gross margin% for the leasing business and what's embedded in the longer-term consolidated margin guidance that you provided. Larry, do you want to take the gross margin leasing side of it? Sure. I think the leasing, you can think of it like a 60% gross margin. Justin, I think you were talking about maybe the synergies for the maintenance services side. In in-house maintenance today and where that could go in terms of total maintenance spend. Yeah, I mean, you know, part of our philosophy, Lori laid out, and I think Bill Krueger and others have validated, is that, you know, as an integrated company, you know, we have a lot more stickiness with the customers. I think, you know, everybody that you guys follow will probably say the same thing because we see it. As our lease fleet grows, one of the obvious advantages is that we'll continue to grow our maintenance services business. Maybe I'll let Rick Galvan talk a little bit about what they're seeing, but I think the margin enhancement here recently has been pretty decent. I think the demand's there. As long as the labor is available and the economy does not tank on us, the demand will continue there. On my part, it's about providing quick turn times and quality service and taking advantage of those opportunities. For us, it's really not the number of shops you have, but the location where the railroads can bring the cars quickly, you get service 7 days a week, repair them, and turn them back out so they can start making some money for us. Typically, when lease fleets grow, it consumes cash. How are you thinking about your ability to generate free cash flow during this investment period when you think about operating cash flow less net CapEx? Do you have a target relative to revenue or net income for free cash flow? That's a great question. If I could ask, let's hold off until we get to Adrian's presentation because we'll have some more information, and maybe ask again, and we can get to that. Okay. Justin, thank you for deferring that. Just a quick follow-up on the tank car question. If we don't get a mandate for moving up the replacement/retrofitting of the non-DOT-117 cars, do you think it will happen anyway? Do you think, in other words, the railroads have an interest in having the DOT-117Js? In fact, I think they enforce a surcharge on the Rs, the retrofitted version. Any thoughts on that would be helpful. Yeah. Yeah. That's actually very perceptive because, regardless of what, you know, the feds ultimately mandate, there's gonna be self-imposed, you know, restrictions. The railroad showed, back in the crude oil boom when things started to get a little bit rough, they imposed surcharges on Rs and DOT-111s to the point where it just became punitive if you were hauling product in anything other than a DOT-117. We're also seeing, I think, you know, maybe more strong interest from the shipper base itself to get ahead of this problem. I'm sure that there's a lot of interesting discussions in their boardrooms talking about liabilities and different things, given the focus that all of this has. We've seen a lot of exploratory requests at this stage, people going, "Hey, you know, what's it look like for availability?" You know, we may do this anyway, you know, et cetera. I think you'll see a lot of just, you know, people will do it on their own, despite whatever the feds do. Based on the current timeline, it's I think 30,000 or 35,000 cars between now and 2029 that need to be retrofitted or replaced. First of all, is that number correct? Second of all, any insight on what percentage of that will have to be new builds versus retrofits. The number is directly correct. I would say it's probably a little bit more. It depends what they include in all the mandates. If they're looking at expanding, you know, some of the coverage that could, you could see as many as 50,000 cars perhaps. I think it's gonna come down to what you just asked earlier on the railroads, whether or not they're going to accept ours. You know, that was If you go back to the crude days, everybody thought, "Okay, I'll go retrofit all these cars." They started to retrofit all these cars, and then, you know, the railroads started to put surcharges on those, and they stopped the retrofits and started replacement. I think you'll see a very similar action where you'll have a number of people that will come in and start to retrofit, and then at some point, the cost benefit, you know, will kind of swing the other way, and they'll start to look at replacement. Our anticipation is that a great majority, at least my anticipation, is a great majority of those will be replaced. How many non-DOT-117 flammable liquid cars do you guys have in your fleet? I think it's, Larry, very de minimis. I think we've been very prudent. Maybe 100 or so. Yeah. Thank you. All right. Thank you very much. All right. Thanks, everyone. We will have a brief changeover of name cards, but I'd like to invite Adrian Downes, Greenbrier's Chief Financial Officer up. You guys are in the home stretch, by the way. Good job. He will be kind of wrapping everything up with a financial summary for us today. With that, Adrian, please go ahead and have a great presentation. Thank you, Justin. Thanks everyone here for your time and attention so far today. This will be the final presentation. After I'm done, Lorie will put a bow on today. We'll bring in another Q&A session. In my presentation today, I'll spend a few minutes discussing Greenbrier's recent performance highlights, our disciplined approach to capital allocation, then recap our financial targets. Greenbrier has consistently generated strong revenue. Revenue has returned to pre-pandemic levels. After a precipitous drop from the pandemic in fiscal 2021, our revenue is recovering with LTM revenue of $3.6 billion. As we were preparing for today, we were reminded of the tremendous growth that Greenbrier has experienced over the last several years, from $1.2 billion of revenue in 2011, breaking $2 billion of revenue three years later in 2014 to over $3 billion of revenue in 2019. This represents a cumulative average growth rate of 11.8%. In fiscal 2023, we expect revenue to be between $3.4 billion to $3.7 billion, well above our five and 10-year averages. Our historical gross margin dollars highlight the potential for significant cash flow generation. We're starting to see gross margin recover and improve from the pandemic lows. As a result of the initiatives you heard about today, we expect consolidated margin dollars to continue to grow, assuming demand is stable. We have a proven history of growing EBITDA through the cycles with higher highs and higher lows. This slide represents a visual depiction of Greenbrier's proven ability to grow throughout the railcar cycles, as represented by EBITDA. The dark green bars represent cyclical highs, typically when deliveries in North America were over 50,000 units, and the lighter green bars are the cyclical troughs, and the gray bars are the transition years. We have been steadily increasing EBITDA through each part of the cycle, with the most recent trough being 3.1 times higher than the prior trough. As we enter what is expected to be a period of stable demand, we expect to see EBITDA increase. As we shift to Greenbrier's capital allocation priorities, I would describe them as prudent given the markets in which we operate. We are also opportunistic and ultimately committed to returning value to our shareholders. We always want to maintain a strong balance sheet, and here are three key elements of our disciplined, well-defined capital allocation policy. Our ongoing focus will be on ensuring robust liquidity while managing debt prudently, including paying down non-leasing debt and maintaining capacity for any M&A opportunities. To be clear, our primary focus is on ensuring our existing operations are performing profitably, but we always want to be prepared to execute on attractive opportunities. Growth CapEx will be primarily focused on growing the lease fleet and our recurring revenue base, as you heard earlier. We will also deploy capital on short-term, high-return projects in manufacturing. Return on invested capital will benefit from these focus areas as we increase operating earnings while reducing underperforming operations. Finally, we continue a strong commitment to returning capital to shareholders through dividends and opportunistic share repurchases. We expect to periodically grow the dividend over time and continue to repurchase our shares in the open market. Share repurchases will be dependent on share price, but we expect to at least offset dilution from incentive compensation grants. Greenbrier has always emphasized liquidity, and it was vital to navigate not just the pandemic, but the significant production ramp and related working capital build that occurred in 2022. Liquidity will continue to be a major focus, but we do see the ability to retire short-term debt in the near term. Greenbrier's lease origination capabilities generate strong liquidity through both syndication activity and the ongoing optimization of our lease fleet. Over the last 12 months, we have generated $680 million in fleet proceeds and syndication liquidity. Our leasing and syndication capabilities are important tools we can deploy to ensure our ongoing liquidity position. We are proud of our strong balance sheet and the steps we have taken to align us with our business strategy. Over the last several quarters, we have opportunistically fixed our floating rate debt so that our borrowing costs are fixed at attractive rates. We have no debt maturities until calendar 2024, and we have a nice and manageable ladder of debt maturities over the next several years. We will continue to prudently manage our capital structure and balance sheet by reducing and retiring our corporate recourse debt as cash flows improve. Leasing debt is non-recourse to Greenbrier, we expect this to fuel the growth of our lease fleet over the next few years. As leasing grows and our non-recourse debt grows over the next five years, we intend to reduce our corporate debt, which will also result in our net funded debt to EBITDA dropping back to 2 times or better. As you've heard previously, we are increasing our expected lease fleet growth from $200 million-$300 million per year for the next few years, subject to market conditions, and expect to leverage these assets at an advanced rate of 75%-80%. We are committed to returning value to shareholders through dividends and share repurchases. Greenbrier has been paying a dividend since 2014, and we remain committed to it. Since 2014, we have increased the dividend 80%. During COVID, we paused increases as part of our pandemic response plan, but going forward, we expect to resume periodic increases as liquidity is supportive. After a break in activity for the last few years, we began repurchasing shares in fiscal Q2 and expect to continue repurchasing shares when it makes sense. You've heard a lot from us today about the path Greenbrier is on to improve profitability and our capital efficiency. Now I will spend a few minutes to summarize the expected outcomes. Within the next 5 years, we expect to grow recurring revenue in our leasing and management services business to more than double our current level. This is a durable and high-margin revenue stream. We have already identified between $65 million and $75 million of margin dollars in savings in our Manufacturing business and have other plans underway to further improve manufacturing margins, as you heard earlier. Lori shared our long-term targets earlier in the day, but it's worth repeating them as we wrap up our prepared remarks. We are targeting strong growth in recurring revenue in our leasing and Management Services business, which we expect to double within the next 5 years. We expect the actions we are taking throughout the organization will result in aggregate gross margin in the mid-teens by fiscal 26, if not sooner. Finally, we are targeting a return on invested capital of between 10% and 14% by fiscal 26. In conclusion, Greenbrier is well positioned to generate strong cash flows, which will allow us to deleverage the balance sheet and continue to invest in our business. We are focused on achieving the targets we have set for today, and our management team has the capability and the experience to execute on these targets. We expect that these actions will allow us to continue to deliver strong performance and lead to robust returns for our shareholders. Now I'll turn it over to Lori for some closing remarks. I'll keep it brief. Thank you very much for being here at our first Investor Day. As I said earlier, it only took us 29 years to figure out how to prepare for this. I'm really pleased with the message that we've been able to bring to you today. I'm excited about our growth and our opportunities in the coming years, and we're happy to answer any additional questions that you might have. Just maybe, Lori, this is for you. The recurring revenue growth over the next 5 years, you kind of alluded it might not be linear, right, depending on cycles. You know, what kind of color are you guys gonna be able to give us through that time period of 5 years that you guys are on track or, you know, where the differences would be and how you can catch up during all that? It's a great question. We continue to evolve how we put forward the information that we share on a quarterly basis with our earnings. You know, as we're looking at our production schedules and thinking out about our portfolio, we'll just provide that additional color. You know that we don't like to get ourselves too boxed in because as soon as you box yourself in, something changes. Yeah, we'll continue to evolve. The only thing I would add is I wrote a note, breakout recurring revenue. I wanted to clarify with the manufacturing cost savings, collectively, that's $65 million-$75 million, Adrian, as you just pointed out. That's all at the gross margin line, I'm assuming. If so, could you talk about SG&A and, you know, the opportunities that could exist there to cut costs over the next several years? Was that one for you, Brian? No. We are focused on SG&A as well. We are focused on SG&A as well, and, you know, we're looking to offset, you know, inflation growth in SG&A over coming years with efficiency opportunities that we have identified. We have opportunities to be more efficient, to centralize, streamline, and, you know, that's definitely a focus area. Won't be as significant as the gross margin opportunities, but it is a focus area. I'd say you heard Brian Comstock talking about that as well. You know, Bill Krueger and William Glenn talk about it in manufacturing, and you're right, that hits cost of revenue. The bulk of the area that the last panel talked about is in SG&A. Dan Weiler's group, Brian Conn's group, Brian Comstock's group, I mean, the bulk of their cost is in SG&A, and they're working together to figure out how we can align some of our activities better and reduce costs. You know, quite honestly, it's about redeploying the human resources we have to their best and fullest potential. Hey, Lorie, it's Ken Hoexter again. Can you guys address the declining backlog we've seen for the last few quarters? Is that just part of the cycle? Is that something? You know, what's your visibility into that? You know, how do you think about that in this kinda part of the cycle? When should we expect to maybe see, I don't know how discussions are going behind the scenes, if you wanna talk about, you know, just given the mandate for increased safety, increased car builds, you know, all the things Matt was asking before about the next generation cars, what's your thought on the backlog process? Well, I'll start and just say that I'm really proud of the backlog that we have. It does give us, you know, 12-plus months of visibility, which is great because I can reflect back on years that we had maybe, you know, 3 to 6 months of visibility. Brian, maybe can speak to the market. Yeah. you know, I think the reductions in backlog that you see are kind of typical for seasonality and people just coming, you know, off the holidays and now starting to look at what they're gonna do over the next 18 months. We still have an interesting dynamic in the market where primarily the railroads typically start their forecasting process in October, November of the previous year. They usually get around to placing orders sometime around this time of the year. Given the robust activity we've had, there isn't a lot of space even in the calendar year amongst builders, so they're finding themselves in a bit of a conundrum, which is pushing some of the backlogs out. The order rates, you know, I think the cadence will continue to be very much like we've seen in the last few quarters. We're not seeing any slack off in activity. If anything, it's just a little bit of timing more than anything. Anything on the supply chain too? Sorry, Adrian. The improvement of supply chain. I would say that we saw the activity that really kinda impacted us by surprise in the first kinda 6 months of the year hit November, December into January. Those items have largely resolved themselves, but the congestion issues and then some of the ongoing kinda issues that we're resolving through insourcing are kind of slowly healing. I would say that big picture supply chain is getting better, but it's definitely not anywhere where it needs to be, and it's a slow process, is what it feels like. I'd say that's why we're taking more control ourselves on particularly some of those critical components, is to bring those in-house and think about someone else earlier was asking about inventory levels and might bringing it in-house change the amount of inventory that we need to carry on the balance sheet. I would say it's actually gonna reduce the inventory because oftentimes, when we're outsourcing, we have to source that raw material, send it out to the subcontractor, wait for it to be used, maybe it's not as efficiently used as we would like to do, and then it has to move back into our facilities in time for it to then slot into the production. By bringing that in-house puts us more in control, and Krueger and his team have done a great job of identifying what are those key components, and the really heavy ones or complicated ones that we want to make certain that we're keeping our hands on. Now that you have had a couple minutes to think about it, can you talk about what you expect for free cash flow during the lease fleet investment period and any targets relative to revenue or net income for cash flow? That's a great question, Steve. I'm glad you asked it again. Thank you. A couple things to bear in mind. When we think about, say, a $300 million investment in the lease fleet that's levered 75%-80%, that's about $225 million of debt, you need about $75 million of equity. As Adrian kinda laid out, our kind of orders of priority, we're gonna be focused on retiring or what we look at as core for debt. We've got convertibles, we've got the term loan we took out from the ARI acquisition, we have working capital, kind of borrowings on a revolver. We really need to retire those over the next few quarters, we'll be doing that out of free cash flow while we continue to maintain and potentially grow the dividend and continue, I would say, opportunistic share repurchases, which we've been pretty active over the last few months. You're not gonna see us come out and place a $100 million authorization in the next two months. We're just gonna kinda keep at it steady as we go. We expect to see a significant improvement in our working capital and in our cash flows as kind of the operating momentum stabilizes in manufacturing, we start to see more dollars flow through on the margin basis, that will really just increase our operating cash flow, which will then kind of fund everything else we just talked about. While we're not going to provide an explicit target or a framework for that, but those are what we focused on, and we feel confident that we'll be able to enact that over the next few years. Bascom Majors, Susquehanna. You've given us a lot of pieces of the puzzle, and I understand the reluctance to bring it down to EPS, just given multiyear targets and how volatile the North American rail car cycle can be. If we walk this out and we're in a world 5 years from now or 4 years from now, where we're still at replacement demand, that's been pretty steady. You've been able to execute, you've grown your recurring revenue to $260 million. Your returns are where you wanna be. You know, give us a range for what that EPS power of the business could look like. Even if that range is wide enough to drive a train through, it would just be really helpful. It would just be really helpful to let us see where you think this is going, 'cause there is some very valid debate on what that looks like, you know, given how peaky the peak was, you know, seven, eight years ago, and how much you've changed the business through investment and rationalization since then. Thank you. Go ahead. I don't know if you like my answer, so I'll go ahead, and then I'll... Yeah, we are excited. No, we didn't give EPS guidance. We're not gonna do that. We do think that when you think about where we've come from over the last several quarters and where we have to get to, it's gonna be an incredible step up in the EPS. That's what our focus is. That's what this team is focused on, is how can we not only grow the top line of our business, but strain that value out so that it drives significant growth in EPS over the next three to four years and doing that in a way where it's recurring. It's not something where it's just jumping on a wave of a particular car type or a particular activity that's gonna be just a quick flash. How do we do this in a way that's stable and continues to provide that stability, it's been a long morning, over the course of time. The only piece I would add is our chairman of the board who took over September 1st, his motto for Greenbrier is simpler and more profitable. You see that as we're trying to move out of some of the JV structures we've entered in the last few years. He is very focused on growing EPS, not growing EPS through weird financial tricks, but really growing the net income of the company. That's gonna be a big piece of what we're gonna be doing going forward. Thank you. You think you can exceed the 610 in 2015? I think we can. This is an explicit guidance. I'm not providing you a range. When you pull everything together, if, you know, all of the moons align, that's definitely in the cards. Okay. Just switching topics, you guys have been the most active in exploring the Middle East and, you know, potential growth there. They're planning a city in Saudi Arabia, I think. You have delivered tank cars to Saudi Arabia. They might have been your highest margin cars ever. I don't know, but it's possible. Anything interesting there for the next 5 to 10 years? I'll go. You know, fortunately or unfortunately, that is also one of my responsibilities is Saudi Arabia. You're right, you know, there is a new city being constructed, and there's a lot of activity around that city, including there will be a lot of freight wagons required to move product in and out. You know, I would say the geopolitical landscape of Saudi Arabia is a little bit interesting, and things move a little bit slow. You know, we're really in kind of reevaluating, you know, what our next steps are with Saudi. We haven't determined any definitive step, but we're certainly taking a pause, looking at our cost structure, reducing our cost structure to where it makes sense, and then evaluating the long-term prospects of whether that makes sense or not. Thank you. I think if you were really able to dive into the detail, those cars that we deliver for Saudi Arabia were not our highest margin. That's always the challenge for Mr. Krueger, is to find a way to hit those other people. Yeah. They were. Yeah. Maybe going back to the cash flow question, Adrian, you talked about targeted leverage of 2 times. Any timeline on when you expect to get there? Just going back to the cost saves of $65 million-$75 million, anything you can share on the cadence of those over the next few years? Yeah. I'll take the last one first, which would be, you know, it will build over time. You know, it would be fairly ratable. I think we've got a lot of opportunity in the near term to drive a lot of that, especially with what Bill talked about in terms of, you know, the investment in our ability to insource a lot of where we've been outsourcing and spending more money. That presents an opportunity for us. I would just tack on there, I think Bill had a good slide that showed the progress that we're making on some of those. We'll go back and look at some of the slides that we used today and figure out how we can work those into our quarterly or at least on an annual basis slide deck to present to you guys on the progress we're making. In terms of the debt, you know, be in the next three, four, five years, depending on the cash flows, we would get down to those two time levels. All right. Well, thank you very much for your time and attention today. We will have a kind of a buffet lunch, and management will be available. We aren't gonna kinda hide everybody in a room going forward. Yes, we are. I mean, yes, never mind. Please, feel free to stick around. We'll have some kinda tables, high tops sitting here. We'll have tables out there. Again, thank you very much for your time and attention for Greenbrier. Have a great day. Thanks, everyone.