Hello, and welcome to the Greenbrier Companies' Second Quarter of Fiscal Year 2015 Earnings Conference Call. Following today's presentation, we will conduct a question-and-answer session. [Operator Instructions] At the request of Greenbrier Companies, this conference call is being recorded for instant replay purposes. At this time, I would like to turn the conference over to Ms. Lorie Tekorius, Senior Vice President and Treasurer. Ms. Tekorius, you may begin.

Thank you, Mia. Good morning, everyone, and welcome to Greenbrier's second quarter fiscal year 2015 conference call. On today's call I'm joined by our Chairman and CEO, Bill Furman; and CFO, Mark Rittenbaum. We'll discuss our results for the quarter ended February 28, 2015, and comment on our outlook for the second half of 2015. After that, we will open up the call for questions. [Technical difficulty]

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[Technical difficulty] -- Within the meaning of the Private Securities Litigation Reform Act of 1995. Throughout our discussion today, we will describe some of the important factors that could cause Greenbrier's actual results in 2015 and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of Greenbrier. Highlights for the quarter include record revenue, EBITDA, and earnings. We also delivered more railcars than in any prior quarter up 400 units or 8% compared to our previous high. Diversified orders totaled 10,100 new railcars, valued at 1.09 billion during the period, and broad-based demand drove backlog to a robust 46,000 units, valued at $4.78 billion, the highest in the company's history, and the sixth consecutive quarter of backlog growth. These backlog and orders figures exclude orders and awards for about a 1000 units received subsequent to quarter end. This year, we continue to demonstrate the strength of our diversified business model, our strategies as diversifying our product mix, driving more volume through our lease syndication models, and expanding capacity and efficiencies through our low-cost footprint are translating into higher gross margins, with second quarter aggregate gross margin reaching a record 19.9% compared to 17.8% in the first quarter. As a reminder, while gross margins continue to increase, we do not expect their track to be perfectly linear. In addition to executing our three-pronged strategies, unlike many multinational companies, the strengthening of the U.S. dollar serves as a tailwind for Greenbrier. Most of our North American production occurs in Mexico, where our expenses, like labor and facilities costs, are in Pesos, but all of sales are in U.S. dollars. As a result, the strengthening USD lowers our input cost, and enhances margins. In Europe, our translated profits are lower with the strengthening of the U.S.…

Thank you, Lorie, and welcome to the call. Well, we had another record quarter, continuing our strong pattern in growth, market leadership, forward visibility, and scalability. Our diversified business model continues to build momentum. Our aggregate gross margin was nearly 20%, achieving a goal we set for ourselves for mid-2016, so almost a year earlier than planned. Similarly, ROIC reached almost 20% tracking toward the target announced in February of 25% by next year. As Lorie had commented earlier, progress in these goals may not be linear, but clear progress, definite progress is being made. Our integrated business model, and its intended three strategies; one, driving more product through capital like leasing; two, product diversification; and three, lower cost highly efficient manufacturing facilities continue to drive Greenbrier's market share growth and scalability. We've almost doubled our market share from normalized periods at this point in the cycle. We remain focused on our bench strength, and diversification to bulletproof our balance sheet in the future. We believe our model is building sustainability for future financial performance as we drive on the key metric goals, and include a high priority on safety, quality, and customer satisfaction. Lower oil prices and a stronger U.S. dollar are delivering added tailwinds to Greenbrier, making our facilities much more valuable in Mexico, where we currently employ almost 7,000 workers and staff. Investments in South America and Latin America will solidify our emerging Americas strategy, which we use as fixed base of operations in Mexico, and which when coupled with growth in other international markets will deliver more stability and sustainability, longer term. A long-awaited decision by the U.S. government on new tank car standards, not only will mean a safer tank car for transport of hazardous materials in North America, but improved standards will help protect…

Thank you, Bill. I will spend a few minutes on our balance sheet cash flow and liquidity, and then we'll open it up for questions. Greenbrier remains a very liquid company. We ended February with $385 million of liquidity from cash balances, and available borrowings on our revolving credit facilities. Our net debt to EBITDA is a modest 1.2 to 1.0. Our increase in net debt of $16 million during the quarter is due to previously announced robust CapEx programs for 2015, primarily related to our capacity projects in Mexico, and increased vertical integration, increased working capital needs associated with higher production and lease syndication volumes, and a return of $32 million of capital of the shareholders in the form of dividends and share repurchases. Year-to-date, we have returned $55 million of capital to shareholders in these two forms, that is, dividends and share repurchases. Looking ahead to the second half of 2015, and beyond, we believe working capital needs to stabilize. We have $55 million remaining of our previously stated $95 million manufacturing CapEx in the second half of 2015. For 2016 and beyond, we expect CapEx will be significantly less than 2015. As such, as Bill noted, we expect we will generate significant free cash flow in 2016 and beyond, and indeed, in the second half of 2015 we will generate free cash flow as well. We will continue to use this free cash flow to reinvest in high rate of return projects in our core businesses, to seek acquisitions in our core competencies, and to continue to return capital to shareholders. Finally, some investors have asked that we provide more color on our lease origination syndication, and asset management model, and our leasing and services segment. As we had promised, we've provided additional information in our supplemental slides posted on our website, and we'd be delighted to take any additional detailed questions about this segment offline after the call. Operator -- Mia, we'll now turn it back to you and open it for questions, please.

Sure, sir. Thank you [Operator Instructions] Our first question is coming from the line of Mr. Justin Long at Stephens. Sir, your line is open.

Thanks, and good morning, and congratulations on the quarter.

Thank you, Justin.

So, clearly the expansion in manufacturing margins was a highlight in the quarter up 340 basis points sequentially. You listed several drivers to that increase, but is there any way you could given us more color on how much of that sequential margin expansion came from each one of those different drivers you mentioned or at least just rank them in order of magnitude?

Justin, it's Mark, and we would prefer not to rank them as Lorie noted, it is a combination and as we've noted, it's a combination of a continued pricing strength driving more volume to our lease syndication model efficiencies, and mix, and then the last piece is we did have a tailwind from improving FX, but it really is a combination of all three of them. And they've all well contributed in a meaningful way.

The only thing I'd add is that the CapEx that we are putting in our facilities is intended to enhance efficiency and that's really contributing to these benefits, and we're making very, very good progress indeed on building out and finishing all of the facilities.

Okay, great. And to follow-up on that question, Bill, you mentioned that you basically hit your long-term gross margin target a year early. So I was curious what's preventing you from taking that longer term guidance higher? And are there any margin headwinds we should be thinking about as we look into either next quarter or over the next year that would prevent margin expansion above what we saw in the second quarter?

Well, Justin, I'm always optimistic, but I have Lorie and Mark here to keep me under control. We've said also that progress on these goals is not necessarily linear or sequential. We don't know of any headwinds that are facing us, but we have exceeded expectations in terms of implementation of the facilities. We, knock on wood, haven't had any incidents, any major injuries or difficulties that might have been anticipated with some of these very complex projects, but we haven't had that. So I'm not sure if Lorie would you like to answer or if you like to add anything to that?

The only other thing that I would add is that we go into the second half of this fiscal year we will be switching over to some more complicated tank cars, adding some lining facilities at some of our locations. So any time that we're doing some of those major kinds of shifts, we expect that there might be a little bit of headwind when it comes to efficiency. Again, our manufacturing group thus far this year has met those challenges and been above what we expected, but that might be a little bit of potential headwind.

So Justin, at the end of the year, so we -- to your point in the 20% margin, why we haven't revised the goal, as Lorie and Bill have said, after one quarter we just didn't want to declare total victory and move on with that optimism, with the optimism that both Bill and Lorie have stated. At the end of the year, we will revisit our goals again, and we will update them as appropriate at that time and at the same time that we would look at our 2016 guidance.

Okay, fair enough. And I'll ask one more and pass it along, but Lorie you talked about tank production and the potential ramp to more complicated tank cars; I was wondering if you could just update us on the annualized rate of tank production that you experienced in the second quarter? And then, also provide an update on how you expect that to ramp over the remainder of the year?

Justin, that's a great question; doing some quick math. So right now I would say we're probably running about 20-a-day on tank cars, so multiply that times 60 working days in the month -- in the quarter, sorry. So that's kind of the rate that we're looking at right now. Now again, we get into some of the more complicated tank cars as we've noted in some of our backlog in order disclosures, we are taking orders for tank cars that are non-energy related, some of those cars are more complicated, and our rate will adjust potentially downward a little bit, but then come back up.

We also are just finishing one production line for tanks, probably haven't reached full efficiencies there which would offset some of the caution that you've heard us express before. There are so many factors that we don't control. And generally I'm fairly optimistic we'll continue to ramp efficiencies and production rates notwithstanding some of the complexities Lorie has mentioned.

Okay, great. I appreciate the time, and congrats again on the quarter.

Thanks, Justin.

Thank you. Our next question is coming from the line of Mr. Matt Brooklier of Longbow Research. Sir, your line is open.

Hey, thanks, and good morning. So I just had a question on regulations for flammable service tank cars, in terms of where we think we are -- I know that we're coming up upon the May 12 date, and it was mentioned in the press release, but I guess what's the conviction level that we're going to have a new rule in place by, I guess, some point in May?

We're all reading the same tea leaves. It appears that something will be out in the May timeframe, or even a little earlier than expected in May or late this -- I think the things are pretty much set to get regulations, and we expect those to be forthcoming soon.

Okay. And then, can you also give me an update in terms of GBW in terms of where we are in that process of getting that division ready for potential retrofits, and then maybe remind us of, I guess, the revenue and current margins, and then maybe what those, I guess, what the revenue and margins could look like on that business as we move out given you're focused on, (A), improving the division, and then, (B), more likely going to get some retrofit benefit here as well?

Yes, since you're mentioning GBW and retrofits, let me just comment on -- so I think it will be interesting for everyone to read the NTSB, the National Transportation Safety Board recently released recommendations which go a little bit more aggressively on the issue. We do expect card design standards to be very much same as the standards that we have in our tank car of the future. In other words, option two under DOT rule. They are still considering we think electronic brakes. We hope that they don't that, but the whole issue is very, very important. It does have considerable momentum. And we believe that the safer tank car standards will be very, very important to protect the railroad franchise, and to protect this energy renaissance that's coming. With respect to GBW, plans are about on schedule as we had hoped. We spent through six months, really reorganizing, being prepared to operate at scale in that business. Jim Cowen who reports to a Board of Directors, which includes two Greenbrier officers; Mark Rittenbaum being one, Rick Turner runs our Parts and Wheels business, being the other Director. And then, Watco designees; Jim Cowen is doing an excellent job. He's a very experienced CEO; integrating 38 different shops is not an easy task. Would you have a jumpstart on retrofits? We and a number of other companies will be well positioned to meet whatever time standards that the government sets for making the current fleet safer through retrofits and improvements of the tank cars using or hauling hazardous substances, including flammables.

Okay. I appreciate the color.

Thank you.

Thank you. Our next question is coming from the line of Ms. Allison Poliniak of Wells Fargo. Ma'am, your line is open.

Hi, thank you. just going back to my quick question on -- say, we get the standards in May, do you know how quickly could production happen on the new cars and potentially even retrofit, is it sort of a six-month timeframe or should we be thinking sooner than that?

Thank you for your question, Allison, nice to hear from you. We're actually building the tank car of the future for energy customers now. We haven't disclosed the names of the customers, but we had earlier disclosed that we had received about 3,000 orders for that cars. So we're building that car now. And there really isn't -- that's not the car that Lorie was referring to, that might involve complexity. The car she was referring to would be pressure -- more of a pressure vessel type car, specialty car, and that's fully baked into our manufacturing plants. On the retrofit side, there's been a lot of concern or talk about how quickly the entire industry could gear up to do retrofits, but there's over 100 shops in United States alone that are certified for tank car service. And we know that others besides ourselves have been investing in shops, particularly Trinity has invested assertively. And we think that the American tank car shop network setting aside, but including and supplemented by Canadian and other facilities in North America can easily do the work that's required in any realistic timeframe between three and five years. So we see that is something that can be done. I think we've got a jumpstart on it. We should be -- and we're processing finally retrofits right now. We're doing retrofits with those customers who wanted to anticipate their needs and get in front of the wave and build a safer tank car now.

That's great. And then on free cash flow, I know you talked about working capital stabilizing from here; can you prioritize between organic investments, acquisitions, dividends and share repurchase, how you're thinking about that today?

Mark?

Hi, in terms of -- well, I think we're thinking of them in a combination, Allison. As you've seen, today we're investing in CapEx projects that have high rates of return on expanding our capacity, and more tank car capacity, and more vertical integration. As we previously stated that after this year we are done with our capacity expansions and build outstanding. And so, while we continue to reinvest in high rate of return CapEx projects, no more expansion projects, and we expect those investments therefore to come down overall in our manufacturing segment. Outside of that, we will continue to take a balanced approach in all three of these areas. So as Bill stated, you can expect that we will continue with our share repurchase program and dividends, and we'll also continue to look at opportunities to grow our business, and that will just look at high rate of return projects.

One reflection, just stepping back a second, Allison, you might look at our balance sheet, as Mark said, our balance sheet has really, really improved over the years and our financial team has done a great job of driving toward a liquidity and a solid risk management profile. You look at specifically our convertibles; they're in the money fairly deeply at this point, and if you just have those and really treat them as what they are at this stage reached as equity, we really have very little depth. As we move forward, what we don't want to do if we diversify and grow as we don't want to take away from strong balance sheet that Mark, Lorie and the team have delivered here. So we might look at innovative ways of hedging risk and working if we do larger transactions. I would say that the Board of Directors is largely focused on how to deploy capital right now, as how we're spending our time, and it's another reason why we wanted to bring out another money center expert like -- an investment expert as we did with Kelly Williams.

Great, thank you so much.

Thank you.

Thank you. Our next question is coming from the line of J.B Groh of D.A. Davidson. Sir, your line is open.

Hi, good morning, guys. Congratulations on the quarter. Hey, Bill, you in the past have talked about train speed, and I've noticed a few industry comments, and articles, and such, talking more about may be [ph] implementing some limits there. Can you talk about your thoughts on that, and what you think the impact would be there?

I think that the railroads probably need to better job of getting out the story, their story -- their side of the story on train speed. I really do see the problem more as, one of having the wrong car for a mission that has to be carried out by the railroads. The railroads as we've recently pointed out are required, and one of them has recently been sued because of this. They're required to carry cars that are certified by the government, despite their own safety, the experts saying these cars are not suitable for unit trading service for flammables and other hazardous commodities, the National Transportation Safety Board. The railroads have reduced speed limits. So I just noted that Burlington Northern came forward with another voluntary reduction in speed limits through population centers more than a 100,000 people. At this point, there's quite a lot of just lobbying and posturing that goes on at this stage in rule making, and I think that the important thing is to watch what these guys are doing as opposed to what people are saying about them. What they're doing is that they're training First Responders. They have reduced speeds to reasonable levels. There's a limit, practical limit to how much speed reduction one can do. I think they're doing -- the railroads are doing everything they can do to reduce the derailment incidents. They put billions and billions of dollars into track. It all comes down to the need for safer tank car standards of high speeds or higher speeds with scale in the trains. The mass and the trains times the velocity creates the force. And in the old days where you had mixed [indiscernible] trains you could afford to carry hazardous material in lighter skinned unshielded tanks with inadequate, and by today's standards rollover protection, you can't afford it now. In the last month, we had four major derailments that demonstrate that. So the car standard really matter. That's all we can address in any case. And that's why we're focused on safer tank cars now.

Have you guys actually delivered any of the tank cars in the future?

Yes, we have.

Okay. And I just had a couple of modeling questions; Lorie, you mentioned FX gain, I guess that's in the interest and FX line. Could you give us a dollar amount of that, so we could back to [ph] what the true interest cost was?

Sure. I believe it was, and you'll see this later today when the 10-Q is filed, I think it's about $3 million pretax and pre -- non-controlling interest.

So if we back that out, that gives us a better run rate for the interest.

Correct.

And then on the SG&A, I think you guys have mentioned there that it was up a little bit in Q1 for professional services, so this number here, a pretty good run rate for the rest of the year?

So we do have incentive compensation that is expensed concurrent with when we have earnings. And as we've indicated, the back half of fiscal '15 we should have stronger earnings than in the front half. So we will have higher incentive compensation expense during the back half. So it's within a range that will probably creep up a bit.

Okay. Thank you. That's helpful.

Thanks, J.B.

Thanks, J.B.

Thank you. Our next question is coming from the line of Mr. Steve Barger of KeyBanc Capital Markets. Sir, your line is open.

Hey, thanks. This is actually Ken Newman on for Steve Barger this morning. Thank you.

Hi, Ken. How are you doing?

Good. How are you guys? Congrats on Q4.

Thanks.

Just wanted to ask a question about the frac sand car market, in terms of inquiry activity; you gave a lot of great color on the sand car market? Just curious, with petroleum carloads volume since the beginning of the year, have you seen inquiry levels come down for the frac sand side of the market?

Well, Ken, and we published over the last year and part of that, we deliberately diversified our product offerings and our tactical plan for the market. We still have a lot of frac sand inquiries from the larger players, which we're trying to -- and stronger players who are more likely to consolidate that and succeed in our market. And we're still seeing quite lot of demand there, but we're trying to leave room for other products, and I think that in our areas like automotive, grain and boxcar demand, and other areas we want to be sure we can deal with our long-term customers who concentrate in those markets. The need for sand is going to continue with any meaningful level of drilling. And one of the things that we have to watch very closely if the technology continues to mutate and improve, and I think that most people when they look at rig counts don't recognize that some of these companies are -- I mean, technology have reduced their time for drilling by 50%. So that statistic alone would reduce the number of rigs in operation, but the amount of sand that's required under the new techniques continues to expand fairly dramatically. So I think this is -- I talked about that market having softness is not fundamentally based on some statistical data that would be worth really examining closely.

Understood. And then, just one question on the appointment of the new Board Member, it looks like she has got some significant experience in private equity. Just curious if we should take that to mean that the Board and Greenbrier is looking -- or more open to looking at transacting deals in the near future?

All right, that's a great question. We're trying to work with our whole Board to diversify the Board and to -- as I said earlier, add strength in investment decision, knowledge of what drives a good investment decision. Private equity people have a great perspective on things like G&A, for example, and run rates, they're -- Kelly has got diversified experience in making investments in many different industries, but the central core business is a very key value, and we think that having that element on the Board will give us some additional depth and discipline in our money center. This will be our third Director from New York City, from the East Coast, I should say, because one of them, I know, does not reside in New York City and is quick to point that out to me, but from the East Coast, they all are very good financially-based and smart investors.

Understood, thanks.

Thank you.

Thank you. Our next question is coming from the line of Mr. Willard Milby of BB&T Capital Markets. Sir, your line is open.

Hey, good morning everyone. Just wanted to ask a question on the contribution from GIMSA in the second half of this year; if you really back at the year ago, we had a very strong second half, and I think you've talked about having a strong second half this year, but was wondering if that contribution couldn't be even higher than it was last year to the tune of may be 25% or so to where the contributions may be $15.5 or $16 million in that line?

Are you referring to some guidance on the non-controlling interest line item on the P&L, Willard?

Right, the GIMSA…

Yes.

So, yes. This is Lorie, Will, so it is expected to increase as we talked about even with last quarter call, as we're putting more volume through our lease syndication means that we've got some of the production that's coming out of GIMSA is going through that model as well, and as that gets syndicated off to financial investors and other leasing companies, then that margins will be earned. So again, the gross margin that you're seeing on our financial statements this quarter, which is a record, doesn't include all the production coming out of GIMSA; that will come through in a future quarter, and at that point in time when we've recognized those higher gross margins we will also have higher minority interests or non-controlling interests.

Okay, but -- not stetting the target for us or any kind of guidance on that specific line?

I think it will definitely be -- it will be probably a bit higher than where we were for the second quarter. Probably is higher than what we saw in any of the quarters, last fiscal year, again, because we are at higher production rates, and we're earning higher gross margins. So it will probably be in the $15 million to $20 million range.

Okay, thanks. And along the lines of higher production, can you speak a little bit about the delivery cadence in the second half of this year, are we expecting Q3 and four to be about the same levels of deliveries, or is there going to be one quarter that might be heavier than another?

Right now, I think that between third and fourth quarter, fourth quarter might be a little higher, but I would say, on average they're probably going to be fairly similar to each other.

All right, thanks very much. I'll hop back in the queue.

Thank you.

Thank you. Our next question is coming from the line of Mr. Mike Baudendistel of Stifel. Sir, your line is open.

Thank you. In our press release, you talked about a multi -- I think you called it a significant multi-year order that was part of 10,100 units received during the quarter. Can you give us any sense of magnitude of how large that multiyear order is, I mean, if you would give the sense for just how strong the demand was in the quarter for orders?

Really, it's the request of our customers in this area, and by the way, while we acknowledge a multiyear or during the quarter we have several multiyear orders in our backlog, not only the one this quarter but several others in previous quarter of which, again, we believe is a show of conviction of our customer base, as well as ourselves that there is a lot of strength left in the cycle. Indeed, our backlog as a whole goes into 20 -- on certain production lines even goes beyond 2016, all the way into 2019 as a result of, obviously, the multi-year orders overall. So at the request of our customer we did not break out the detail on that particular multi-year order. It's fair to say that it was significant. It's also fair to say that excluding the multi-year order that we still had a good run rate of orders for this past quarter.

Okay, thanks. That's helpful. Then another question is, I think last time you did one of these earnings calls three months ago, you talked about a customer that you had a discussion with where they came to you and maybe wanted to discuss some cancellations or renegotiations to an order. Have you had any similar conversations with customers the past three months?

No, that earlier customer was -- we satisfied that customer and that's all taken care of, and we haven't seen any repeat of that.

Okay, good. Just one last question is as volumes of backlogs are now, it seems like you're pretty well-set for most of fiscal 2015 and 2016. What car types do you maybe have excess build flats [ph] for those two fiscal years at this point?

We still have some space, which tactically we have worked with customers to maintain, but we could build cars or divert cars, it's a flexibility we build into some of these multi-year deals at our discretion. But as Mark points out, the good news you get a large order book. The other is, is that as you build the order book out you don't have as immediate delivery as possibly some competitors. So this is a good news, and it also can be not-so-good news, but I think in general, 2015-2016 is very solid, and we're currently filling slots soon in '17 and'18, and even all the way out, as Mark says, into '19. And the key to that is just very strong customer relationships and loyalty, with the ability to plan with those customers what their business models are going to look like, and offer them a reliable product over time with quality standards that they can count on.

Okay, great. Those were my questions. Thank you.

Thank you.

Thank you. Our next question is coming from the line of Mr. Eric Ross of Bank of America. Sir, your line is open.

Hey, guys, congratulations on the good quarter. Just had two quick questions, one, I was hoping you could talk a little bit about where you think we are in the cycle. I know you mentioned this idea of orders extending out into '17 and '18, but for quite some time now, for several quarters we've seen the backlog grow, and order have exceeded estimates. I just wanted to see if you'd give some thoughts on the cyclicality there?

Well, I always liked chattering about cycle apprehension. Once you go through a down cycle, like 2009, everybody gets a little gun-shy, I suppose. Look, this low energy prices have created a very good -- a boon for consumers, that's what was needed to have consumers kick in and buy, and they're doing it. Automobile shipments are up; we're seeing some revival, even in housing, enquiries across our product mix. We don't see it, I guess, you do see it in the CapEx, you see some CapEx softening in the energy field, but these energy prices longer term we think, are likely to be much higher than they are today. We notice that the FTR, one of the industry groups just revised upwards its models for '17, '18 and beyond and actually increased its view of 2015 in shipments, and 2016 shipments. So I don't see it, I know people are afraid of it. We don't see it yet, or I would not have said it's not as good as it gets. By the way, I want to make it clear that, without damaging our balance sheet and giving up the great liquidity and leverage we have right now. We are looking at continuing to diversify this model so that with the several years that we got of open runway, the best visibility I've ever seen over 30 years in this business, we should be able to put the Company on a very solid footing for a growth in the future, where we won't be as highly reliant on the business cycle for freight cars. The leasing models does that, our repair model does that, our parts and the wheel model does that. And we will continue, as we have said, to work on the excellent foundation we have, not only in Latin America through our base in Mexico, but with our European subsidiary reaching initial markets with that company. And I think that over time the diversified model will serve Greenbrier very well. It's not your mother's Greenbrier, it's a totally different company that it was five years ago.

Okay, that's very helpful, thank you. Just the other question, I know you guys touched on this bit, but with free cash flows scheduled to step up at the end of the year with some of the investments that you guys are making terming out, wanted to understand if there's any thought on getting more aggressive in terms of the capital structure, and what you see as a cap on where you could reach there?

"Aggressive" is not a word that our CFO is terribly fond of sometimes, but we could be more assertive, couldn't we, Mark? You know what, I think we would just reiterate what we said before, is that we'll take a -- you're correct to look at our free cash flow, and the potential here to generate meaningful free cash flow over the next several years here. And as we said before, we'll continue to take a balanced approach as to how we deploy that capital. We do have a current stock buyback program in place, as you know, and we continue to pay in dividend, but though we only take a balanced approach and see where are the best opportunities between the various buckets, to deploy the capital. There's certainly lots of opportunities out there in our space or a related space, we are trying to remain concentrated, focused on our ROIC, but there are certainly opportunities to consider the transformational strategies, and the Board is really focused on how do we invest for the future, how does -- how do we best put Greenbrier on a footing for a sound and diverse future.

Okay, great. Thank you.

Thank you. And our last question is coming from the line of Mr. Sal Vitale of Sterne Agee. Sir, your line is open.

Hello, good morning all. Sorry, if I missed some of your comments, I got on the call late. Did you talk about your orders for the month of March?

We just briefly mentioned them; only in passing in Lorie's remarks, but what would you like to know…

Just how many orders did you receive? Can you give any color there?

Hi, Sal, this is Lorie. So in my prepared remarks I indicated that subsequent to February 28th, we've received orders or award for about a 1,000 units.

Okay, so that's a significantly lower than the February quarter, and I understand you had the multi-year orders there. Is it fair to say that there were some beyond even that multi-year order you relieved in February, there were some pull forward, say, from the May quarter into the February quarter? How do I think about that?

You know, Sal, I think the best guidance I can give you and we -- as many times as we say that it does -- its hard to wrap your head around, but orders and timing of orders, and size of orders in this industry are continually lumpy. And trying to have an absolute prediction as to in one finite period that it means something major is really tough to do. We've got -- and we're talking to our commercial group, there's a lot going on in the pipeline of inquiries so -- it's nothing more to be read through than that.

Sure, understood. Did you give any data on the value of the orders received in March?

We did not at the time.

Okay, so just going beyond that, I guess, looking, I just want to make sure that I understand this lease syndications model. Lorie, I remember on the last call you mentioned that in the November quarter there were 400 cars that were produced for syndication that were not actually sold, so they dropped down to the balance sheet. And you mentioned that once in the back half of the year, once those cars are actually sold externally you'll actually realize the revenue and the margin there. And you commented that the November quarter's margin was all the more impressive because it excluded, I guess, the profit from those cars. So you fast-forward to this quarter, not only were those cars not sold off, but actually I think you added a 100 cars to your balance sheet in terms of lease syndications line there?

Right, so Sal, let me just -- I want to make certain that I clarify, you can't look at the number of units that are in railcars held for syndication and assume that that stays stagnant. We have included a couple of additional slides in our supplemental information on the Web site to translate this out. So those cars that were there at the end of November, I don't have a specific -- more likely than not they were syndicated during the second quarter, and there's new activity that's on the balance sheet, as February 28th.

Right, okay so the margin pop [ph] you saw in the February quarter does include some of the contribution from those cars that were sold off externally?

It does. And you know what, Sal, maybe we can take this kind of detailed level offline…

Sure, that's fine. Just one other question I guess on the backlog, so you ended the quarter with a 46,000 cars in the backlog, and I assume that if I look at your deliveries guidance pretty much all of that comes out of the backlog, is that fair to assume?

Yes, yes.

Right.

Yes, everything that we're guiding to for deliveries for this fiscal year we've got orders booked, yes.

Sure. So that leaves about 33,700 cars. Any color on how much of that delivers in 2016?

Not at this time. We'll [technical difficulty] color and guidance on fiscal 2016 as we get close to the end of '15.

Okay, and then just last question, marine revenue during the quarter, any color there?

Marine did much -- it did better this quarter than in the last quarter. It’s ramping up as they're being very successful on the barge they're building for Kirby, but it's -- I don't know…

I don't think any additional colors in them.

Okay, that's fine.

Yes, we just continue to be optimistic of that business, and continues to have good sea legs.

Okay, great. Just the last question here, really, just looking at my notes. So you mentioned the Peso, can you give any color, and I understand you can't quantify how much the margin improvement from each of the three buckets you mentioned, but can you tell us how much of your, I guess, cost of goods sold is Peso-denominated as opposed to, say, the revenue in the manufacturing business?

Well, easy to say that revenue was 100% U.S. dollars. And we don't break down our cost of sales by currency. So we are going to probably go ahead and move on to the next call.

Okay, that's great. Thank you very much.

Thank you, Sal. I appreciate it.

Thanks, everyone. We appreciate your interest in Greenbrier and your attention today. If you have any follow-up questions, we will be happy to take those little bit later today. Thank you so much.

Thank you. Bye-bye.

Thank you. And that concludes today's conference. Thank you all for joining. You may now disconnect.