UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 FORM 10-K /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED AUGUST 31, 1997 or / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to ___________ Commission File No. 1-13146 --------------------------- THE GREENBRIER COMPANIES, INC. (Exact name of Registrant as specified in its charter) DELAWARE 93-0816972 (State of Incorporation) (IRS Employer Identification No.) ONE CENTERPOINTE DRIVE, SUITE 200 LAKE OSWEGO, OREGON 97035 (Address of principal executive offices) (503) 684-7000 (Registrant's telephone number, including area code) --------------------------- Securities registered pursuant to Section 12(b) of the Act: (Title of Each Class) (Name of Each Exchange COMMON STOCK, on Which Registered) PAR VALUE $0.001 PER SHARE NEW YORK STOCK EXCHANGE Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes X No ----- ----- Aggregate market value of the Registrant's Common Stock held by non-affiliates on October 31, 1997 (based on the closing price of such shares on such date) was approximately $92,111,000. The number of shares outstanding of the Registrant's Common Stock on October 31, 1997 was 14,165,028 shares of Common Stock, par value $0.001 per share. DOCUMENTS INCORPORATED BY REFERENCE Parts of Registrant's 1997 Annual Report to Stockholders and of Registrant's Proxy Statement dated November 24, 1997 prepared in connection with the Annual Meeting of Stockholders to be held on January 13, 1998 are incorporated by reference into Parts II and III of this Report.
THE GREENBRIER COMPANIES, INC. FORM 10-K TABLE OF CONTENTS PART I PAGE ---- Item 1. BUSINESS 1 Item 2. PROPERTIES 7 Item 3. LEGAL PROCEEDINGS 8 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 8 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 8 Item 6. SELECTED FINANCIAL DATA 8 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 8 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 8 PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT 9 Item 11. EXECUTIVE COMPENSATION 9 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 9 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 9 PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K 10 SIGNATURES 19 (i)
PART I. ITEM 1. BUSINESS INTRODUCTION The Greenbrier Companies, Inc. ("Greenbrier" or the "Company") is a leading supplier of transportation equipment and services to the railroad and related industries. The Company's manufacturing segment produces double-stack intermodal railcars, conventional railcars and marine vessels, and provides repair and refurbishment for both intermodal and conventional railcars. In addition to manufacturing, Greenbrier is engaged in complementary leasing and services activities. The lease fleet consists of 27,594 owned or managed railcars as of August 31, 1997. Greenbrier believes this fleet is among the largest non-railroad owned fleets in the United States. Greenbrier divested its fleet of domestic containers, intermodal and highway trailers and chassis previously held for lease during the fourth quarter of 1997 and subsequent to year end. The Company is currently engaged in discussions with potential purchasers of its third party transportation logistics business. The decision to divest the third party logistics and trailer and container leasing operations was reached after an extensive review of various options by management. The expansion of the logistics segment during 1996 and 1997 was based on expected complementary advantages of bringing assets and services together which did not develop. Industry fundamentals for both businesses are strong, however; rates of return on capital invested have been less than desired. The Company has decided to focus on its core railcar operations where it believes it can more productively deploy management and capital resources. Greenbrier is a Delaware corporation formed in 1981. The Company's principal executive offices are located at One Centerpointe Drive, Lake Oswego, Oregon 97035, and its telephone number is (503) 684-7000. PRODUCTS AND SERVICES Greenbrier operates in two primary business segments: the manufacture of railcars and marine vessels and the refurbishment and repair of railcars; and the leasing and management of surface transportation equipment and related services. A summary of selected consolidated financial information for these two business segments as well as domestic and foreign operations is set forth in Note 16 of the Notes to Consolidated Financial Statements. INTERMODAL PRODUCTS Intermodal transportation is the movement of cargo in standardized containers or trailers. Intermodal containers and trailers are generally freely interchangeable among railcar, truck or ship, making it possible to move cargo in a single container or trailer from a point of origin to its final destination without the repeated loading and unloading of freight required by traditional shipping methods. A major innovation in intermodal transportation has been the articulated double-stack railcar which transports stacked containers on a single platform. An articulated railcar is a unit comprised of up to five platforms, each of which is linked by a common set of wheels and axles. DOUBLE-STACK RAILCARS. The double-stack railcar provides significant operating and capital savings over other types of intermodal railcars. These savings are the result of (i) increased train density (two containers are carried within the same longitudinal space conventionally used to carry one trailer or container); (ii) a railcar weight reduction per container of approximately 50 percent; (iii) easier terminal handling characteristics; (iv) reduced equipment costs of approximately 30 percent over the cost of providing the same carrying capacity with conventional equipment; (v) better ride quality leading to reduced damage claims; and (vi) increased fuel efficiency resulting from weight reduction and improved aerodynamics. The Company is the leading manufacturer of double stack railcars with an estimated cumulative U.S. market share of nearly 60%. In 1997, 375 double-stack railcars were manufactured and sold by the Company, which the Company believes represents 54% of total market share during such period. 1
Greenbrier's comprehensive line of articulated and non-articulated double-stack railcars offers varying load capacities and configurations. Current double-stack products include: MAXI-STACK -Registered Trademark- - The Maxi-Stack is a series of double-stack railcars that features the ride-quality and operating efficiency of articulated stack cars and the versatility for alternating platforms to carry a variety of cargo. The Maxi-Stack III is a five-platform railcar that features the ability to carry containers up to 53 feet in length, the longest shipping containers presently in use. The Maxi-Stack AP is a three-platform all-purpose railcar that is more versatile than other intermodal cars that carry both trailers and containers because it allows the loading of either one large over-the-road trailer or two 28-foot trailers. It is also able to carry double-stack containers on the same platform. HUSKY-STACK -Registered Trademark- - The Husky-Stack is a non-articulated (stand-alone) or draw bar connected series of double-stack railcars with the capability of carrying containers up to 42 percent heavier than a single Maxi-Stack platform. The All-Purpose Husky-Stack is a non-articulated version of the Maxi-Stack AP. Husky-Stack 2+2 is a 56-foot railcar that allows the double-stack loading of up to four 28-foot containers. Husky-Stack also provides a means to extend double-stack economics to small load segments and terminals. AUTOSTACK. Autostack is a proprietary system developed and licensed by the Company to transport vehicles intermodally in standard domestic or international shipping containers and, unlike conventional multi-level railcars, can be used in standard rail, ship and highway intermodal corridors. In 1997, Greenbrier recorded a $7 million write-down of the carrying value of the Autostack operating equipment to approximate the anticipated net realizable value of the assets based on projected future performance under existing contracts. Greenbrier believes Autostack will remain a niche player in the vehicle transportation industry. The Autostack system transported approximately 98,000 vehicles in 1997. CONVENTIONAL RAILCARS Greenbrier, through its subsidiaries Gunderson, Inc. and TrentonWorks Limited, is the leading manufacturer of boxcars in North America. A wide variety of 100-ton capacity boxcars, primarily used in the forest products industry, are offered as well as custom built high capacity railcars for special applications such as automotive parts or canstock movement. In addition to boxcars, the Company manufactures high cubic capacity covered hopper railcars for grain transportation, center partition flat cars for lumber and other building materials, gondolas for scrap steel services and various other conventional railcar types. In 1997, approximately 4,100 conventional railcars were manufactured and leased or sold. Other conventional railcar designs such as flat cars and woodchip cars have been manufactured by the Company. The need for expansion and upgrading of the railcar manufacturing and refurbishing facilities is continually evaluated in order to take advantage of increased market opportunities for new railcar designs. RAIL SERVICES Greenbrier is actively engaged in the repair and refurbishment of railcars for third parties as well as its own lease fleet. In certain situations, repair and refurbishment of the Company's lease fleet is performed in unaffiliated facilities. Refurbishing and repair facilities are located in Portland and Springfield, Oregon and Cleburne, Texas. The Springfield facility has a long-term contract with a third-party primarily for the repair of railcars. Greenbrier believes it is one of only a few railcar lessors with its own refurbishing capabilities. In addition, Greenbrier operates wheel shops in Portland, Pine Bluff, Arkansas and Tacoma, Washington. MARINE VESSEL FABRICATION The Portland, Oregon manufacturing facility is located on a deep water port on the Willamette River. Until 1984, the Company's predecessor designed and built ocean-going barges and other types of marine vessels for maritime shipping companies. In 1995, Greenbrier re-entered the marine vessel market and expanded and upgraded the marine facilities, which includes the largest side-launch ways on the West Coast. The upgraded marine facilities also enhance steel plate burning and fabrication capacity providing flexibility for railcar production. Since 1995 vessels manufactured included conventional deck barges for aggregates and other heavy industrial products and ocean-going dump barges. 2
LEASING AND SERVICES Greenbrier currently manages a lease fleet of 27,594 railcars of which 16,045 are owned and the remainder are managed for institutional investors and other leasing companies. As of August 31, 1997 approximately 96.4% of the owned units available for revenue service were on lease with an average remaining lease term of 4 years. Management services include asset marketing and re-marketing, maintenance management, accounting and/or administration. Greenbrier participates in both the finance and the operating lease segments of the market. The aggregate rental payments over the operating lease terms do not fully amortize the acquisition costs of the leased equipment, as a result, the Company is subject to the customary risk that it may not be able to sell or re-lease equipment after the operating lease term expires. However, the Company believes it can effectively manage the risks typically associated with operating leases due to its intermodal expertise and its refurbishing and remarketing capabilities. Most of the railcar leases are "full service" leases, whereby Greenbrier is responsible for maintenance, taxes and administration. The rail fleet is maintained, in part, through Greenbrier's own facilities and engineering and technical staff. Assets from the owned lease fleet are periodically sold to take advantage of market conditions, manage risk and maintain liquidity. Railcar equipment held for sale consists mainly of hulks that will either be refurbished or sold. Trailers and containers held for sale include domestic containers, intermodal and highway trailers and chassis that were sold subsequent to year end. The following table summarizes the lease fleet: <TABLE> <CAPTION> FLEET PROFILE AS OF AUGUST 31, 1997(1) ------------------------------------------------------ Average % of Owned Age of Owned Managed Total Units on Owned Units Units Units Lease Units (Yrs.) ------- ------- ------- ---------- ------------ <S> <C> <C> <C> <C> <C> Railcars Available for Revenue Service 14,252 11,549 25,801 96.4% 18.9 Railcar Equipment Held for Sale 1,793 - 1,793 ------- ------- ------- 16,045 11,549 27,594 ------- ------- ------- ------- ------- ------- Trailers and Containers Held for Sale 12,090 1,244 13,334 ------- ------- ------- ------- ------- ------- Lessee Profile Class I Railroads 11,289 8,971 20,260 Non-Class I Railroads 1,348 1,108 2,456 Shipping Companies 971 1,427 2,398 Leasing Companies 137 3 140 Off-Lease 507 40 547 ------- ------- ------- Total Revenue Units 14,252 11,549 25,801 ------- ------- ------- ------- ------- ------- </TABLE> - ------------- (1) Each platform of an articulated car is treated as a separate car. A substantial portion of the equipment in the lease fleet has been acquired through an agreement entered into in August 1990 with Southern Pacific Transportation Company, which has since merged with Union Pacific Railroad Company ("Union Pacific"), to purchase, refurbish and remarket over 10,000 railcars. The railcars are refurbished to predetermined specifications by Greenbrier or by unaffiliated contract shops after satisfactory remarketing arrangements are in place. All of the railcars subject to this agreement have been refurbished and are on lease as of August 31, 1997. 3
RAW MATERIALS AND COMPONENTS Manufactured products require a supply of raw materials including steel plate and numerous specialty components such as brakes, wheels and axles. Approximately 50 percent of the cost of each freight car represents specialty components purchased from third-parties. Customers often specify particular components and suppliers of such components. Although the number of alternative suppliers of certain specialty components has declined in recent years, there are at least two suppliers for most such components. Inventory levels are continually monitored to ensure adequate support of production. Advance purchases are periodically made to avoid possible shortages of material due to capacity limitations of component suppliers and possible price increases. Binding long-term contracts with suppliers are not typically entered into as the Company relies on established relationships with major suppliers to ensure the availability of raw materials and specialty items. Fluctuations in the price of components and raw materials have not had a material effect on earnings and are not anticipated to have a material effect in the foreseeable future. In 1997, approximately 45 percent of the Company's domestic requirements for steel plate were purchased from Oregon Steel Mills, Inc. Approximately 76 percent of the Canadian requirements for steel plate were purchased from Algoma Steel Inc. No other suppliers accounted for in excess of ten percent of total purchases in 1997, and the top ten suppliers (including Oregon Steel Mills, Inc. and Algoma Steel Inc.) accounted for approximately 28 percent of total purchases. The Company maintains good relationships with its suppliers and has not experienced any significant interruptions in recent years in the supply of raw materials or specialty components. A member of the TrentonWorks Limited board of directors serves as Chairman of the board of directors of Algoma Steel Inc. MARKETING AND PRODUCT DEVELOPMENT A fully integrated marketing and sales effort is utilized whereby Greenbrier seeks to leverage relationships developed in each of its manufacturing and leasing and services operations to provide customers with a diverse range of equipment and financing alternatives designed to satisfy a customer's unique needs. These custom programs may involve a combination of railcar products and financing, leasing, refurbishing and remarketing services, depending on whether the customer is buying new equipment or refurbishing existing equipment. Through customer relationships, insights are derived into the potential need for new products and services. Marketing and engineering personnel collaborate to evaluate opportunities and identify and develop new products. Research and development costs incurred for new product development during 1997, 1996 and 1995 were $1,097,000, $597,000 and $1,086,000, respectively. During 1997, Greenbrier completed the prototype and began commercial testing of Auto-Max -Trademark-, a two-unit articulated railcar that can be configured for either tri-level or bi-level vehicle transportation service. Auto-Max is expected to be commercially introduced in late fiscal 1998. CUSTOMERS AND BACKLOG The manufacturing customer base includes every transportation company that utilizes double-stack or conventional railcars as well as financial institutions that provide equipment to the transportation industry. A portion of the customer base includes TTX Company, Burlington Northern Santa Fe ("Burlington Santa Fe"), Canadian National, First Union Rail, NorRail, Inc., General Electric Railcar Services, and Norfolk Southern Railway Company. In 1997, sales to the largest customer, TTX Company, accounted for 20 percent of total revenues. 4
The following table lists the Company's backlog in units and dollars for new railcars at the dates shown: August 31, -------------------------------------- 1997 1996 1995 ---- ---- ---- New railcar backlog(1) 2,600 2,200 4,600 Estimated value (in thousands) $133,000 $123,000 $280,000 - ------------- (1) Each platform of an articulated car is treated as a separate car. The backlog as of August 31, 1997 extends into the third quarter of 1998. The backlog is based on customer sale or lease orders that the Company believes are firm. Customer orders, however, are subject to cancellation and other customary industry terms and conditions. Historically, little variation has been experienced between the number of railcars ordered and the number of railcars actually sold. The backlog is not necessarily indicative of future results of operations. Payment for railcars manufactured is typically received when the cars are completed and accepted by a third-party customer. Autostack services are currently provided under agreements with RailVan Multimodal, Burlington Santa Fe, Sea-Land Service Inc. and Toyota Motor Sales USA Inc. The agreements expire at various dates through 2000. Leasing customers include Class I Railroads, regional and short line railroads, other leasing companies, shippers and carriers such as Union Pacific, Burlington Santa Fe, Railtex, Oregon Steel Mills, and First Union Rail. COMPETITION Greenbrier is affected by a variety of competitors in each of its principal business activities. There are currently seven major railcar manufacturers competing in the United States and Canada. Two of these producers build railcars principally for their own fleets and five producers - Trinity Industries, Inc., Thrall Car Manufacturing Co., Johnstown America Corp., National Steel Car, Ltd. and the Company - compete principally in the general railcar market. Some of these producers have substantially greater resources than the Company. Greenbrier competes on the basis of type of product, reputation for quality, price, reliability of delivery and customer service and support. In railcar leasing, principal competitors include The CIT Group, DJ Joseph, First Union Rail, GATX Corporation, General Electric Railcar Services, NorRail, Inc. and Helm Financial Corp. PATENTS AND TRADEMARKS Greenbrier pursues a proactive program for protection of intellectual property resulting from its research and development efforts. Greenbrier has obtained patent and trademark protection for significant intellectual property as it relates to its business. The Company holds several United States and foreign patents and has several patent applications pending. Greenbrier holds the exclusive North American license to use the Autostack technology until the later of 2007 or the expiration of the last Autostack patent, subject to the payment of minimum royalties. The basic Autostack system is covered by a family of related United States patents and patent applications. Corresponding foreign patent coverage has been obtained, or is pending, in Australia, Canada, Europe, Mexico, Japan and South Korea. ENVIRONMENTAL MATTERS The Company is subject to federal, state, provincial and local environmental laws and regulations concerning, among other matters, air emissions, waste water discharge, solid and hazardous waste disposal and employee health and safety. Greenbrier maintains an active program of environmental compliance and believes that its current operations are in material compliance with all applicable federal, state, provincial and local environmental laws and regulations. 5
REGULATION The Federal Railroad Administration (the "FRA") in the United States and Transport Canada in Canada administer and enforce laws and regulations relating to railroad safety. These regulations govern equipment and safety appliance standards for freight cars and other rail equipment used in interstate commerce. The Association of American Railroads (the "AAR") also promulgates a wide variety of rules and regulations governing safety and design of equipment, relationships among railroads with respect to railcars in interchange and other matters. The AAR also certifies railcar builders and component manufacturers that provide equipment for use on North American railroads. The effect of these regulations is that the Company must maintain its certifications with the AAR as a car builder and component manufacturer, and products sold and leased by the Company must meet AAR, Transport Canada and FRA standards. EXECUTIVE OFFICERS OF THE COMPANY The following are the executive officers of the Company. ALAN JAMES, 67, has been Chairman of the Board of Directors of Greenbrier since May 1994. Mr. James was President from 1974 to 1994. WILLIAM A. FURMAN, 53, has been President, Chief Executive Officer and a director of Greenbrier since May 1994. Mr. Furman is also Chief Executive Officer of Gunderson, Inc. and Managing Director of TrentonWorks Limited. Mr. Furman was Vice President from 1974 to 1994. Mr. Furman serves as a director of Schnitzer Steel Industries, Inc., a public company engaged in steel recycling and manufacturing. ROBIN D. BISSON, 43, has been Senior Vice President Marketing and Sales since January 1996 and President of Greenbrier Railcar, Inc., a subsidiary that engages in railcar leasing, since 1991. Mr. Bisson was Vice President of Greenbrier Railcar, Inc. from 1987 to 1991 and has been Vice President of Greenbrier Leasing Corporation, a subsidiary that engages in railcar leasing, since 1987. LARRY G. BRADY, 58, has been Vice President and Chief Financial Officer of the Company since May 1994. Mr. Brady has been Senior Vice President of Greenbrier Leasing Corporation since he joined Greenbrier in 1991. From 1974 to 1990, he was a partner with Touche Ross & Co. (which subsequently became Deloitte & Touche LLP). A. DANIEL O'NEAL, 61, has been Chairman of Greenbrier Logistics, Inc., a subsidiary that engages in third party transportation logistics, since March 1996; Chairman of Autostack Corporation, a subsidiary that engages in vehicle transportation, since 1992; a director of Gunderson, Inc. since 1985; and serves as a director of the Company. From 1973 until 1980, Mr. O'Neal served as a commissioner of the Interstate Commerce Commission, and from 1977 until 1980 served as Chairman. MARK J. RITTENBAUM, 40, is Vice President and Treasurer of the Company, a position he has held since May 1994. Mr. Rittenbaum has also been Vice President and Treasurer of Greenbrier Capital Corporation, a subsidiary that engages in the leasing of trailers and containers, since 1990. TIMOTHY A. STUCKEY, 47, has been President of Autostack Corporation since 1992, prior to which he served as Executive Vice President of Autostack since 1990 and Assistant Vice President of Greenbrier Leasing Corporation since 1987. NORRISS M. WEBB, 58, is Executive Vice President and General Counsel of the Company, a position he has held since May 1994. He is also Vice President, Secretary and a director of both Greenbrier Capital Corporation and Gunderson, Inc. Mr. Webb was Vice President of the Company from 1981 to 1994. L. CLARK WOOD, 55, has been President of Gunderson, Inc. since 1990 and Chief Executive Officer of TrentonWorks Limited since June 1995. Mr. Wood was Vice President and Director of Railcar Sales at Trinity Industries, Inc., a railroad freight car manufacturer from 1985 to 1990. Executive officers are elected by the Board of Directors. There are no family relationships between any of the executive officers of the Company. Alan James, Chairman of the Board of Directors, and Mr. Furman have entered into a 6
Stockholders' Agreement pursuant to which they have agreed, among other things, to vote as directors to elect Mr. Furman as President and Chief Executive Officer of the Company, Mr. James as Chairman, and certain persons as executive officers and each to vote for the other and for the remaining existing directors in electing directors of the Company. EMPLOYEES As of August 31, 1997, Greenbrier had 2,533 full-time employees, consisting of 2,266 employees engaged in railcar and marine manufacturing, and railcar services, 151 employees engaged in logistics services and 116 leasing and services employees. A total of 757 employees at the manufacturing facility in Trenton, Nova Scotia, Canada are covered by collective bargaining agreements which expire in 2000. A stock incentive plan and a stock purchase plan are available for all employees. A discretionary bonus program is maintained for salaried and most hourly employees not covered by collective bargaining agreements. Greenbrier believes that its relations with its employees are generally good. FORWARD-LOOKING STATEMENTS From time to time, the Company or its representatives have made or may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to expectations, beliefs and strategies regarding the future. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by the Company with the Securities and Exchange Commission. The following are among the factors that could cause actual results or outcomes to differ materially from the forward-looking statements: business conditions and growth in the surface transportation industry and general economies, both domestic and international; lower than expected customer orders; the ability to consummate expected sales; delays in receipt of orders or cancellation of orders; transportation labor disputes which might disrupt the flow of cargo; competitive factors, including increased competition, new product offerings by competitors and price pressures; actual future costs and availability of materials and a trained workforce; labor disputes; changes in product mix and the mix between manufacturing and leasing and services revenue; a delay or failure of products or services to compete successfully; shifts in market demand; changes in interest rates; financial condition of principal customers; and production difficulties and product delivery delays in the future as a result of, among other matters, changing process technologies and increasing production. Any forward-looking statements should be considered in light of these factors. ITEM 2. PROPERTIES The Company's railcar manufacturing, refurbishment and repair facilities are located in Portland and Springfield, Oregon; Cleburne, Texas; Pine Bluff, Arkansas; Trenton, Nova Scotia, Canada; and Tacoma, Washington. The 75-acre Gunderson railcar and marine manufacturing plant located in Portland, Oregon is owned by the Company. This facility includes approximately 774,000 square feet of covered manufacturing space, and a 750-foot side-launch ways for launching ocean-going vessels. The manufacturing facility in Trenton, Nova Scotia is also owned by the Company and covers approximately 100 acres with 414,000 square feet of manufacturing space as well as a forge shop. The Company leases, with an option to purchase, a railcar repair facility in Cleburne, Texas occupying approximately 70 acres. The lease expires in November 2002. The Springfield, Oregon railcar repair facility occupies approximately 5.4 acres under a lease expiring in 1998, which may be extended until 2004. A small wheel shop operating in approximately 20,000 square feet of manufacturing space is leased in Pine Bluff, Arkansas through 1998. The Tacoma, Washington wheel shop occupies approximately 4.6 acres under lease through 2003, which may be extended, at various intervals, through 2071. Greenbrier's principal executive offices, including activities related to railcar marketing and leasing and Autostack, are located in Lake Oswego, Oregon in 23,000 square feet of space leased through 2001. Subsidiaries of the Company occupy leased offices in various locations throughout the U.S. Greenbrier believes that its facilities are in good condition and that the facilities, together with anticipated capital improvements and additions, are adequate to meet its operating needs for the foreseeable future. 7
ITEM 3. LEGAL PROCEEDINGS From time to time, the Company has been involved in litigation relating to claims arising out of its operations in the regular course of business. As of the date of this Annual Report on Form 10-K, the Company is not a party to any legal proceedings, the adverse outcome of which would, in management's opinion, have a material adverse effect on the Company's results of operations or financial position. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Reference is made to the information set forth in the section entitled "Common Stock" on page 40 of the 1997 Annual Report to Stockholders, which section is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA Reference is made to the information set forth in the section entitled "Selected Financial Information" on page 18 of the Company's 1997 Annual Report to Stockholders, which section is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to the information set forth in the section entitled "Management's Discussion and Analysis of Results of Operations and Financial Condition" on pages 19 to 23 of the 1997 Annual Report to Stockholders, which section is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following consolidated financial statements and report of independent auditors set forth in the 1997 Annual Report to Stockholders are incorporated herein by reference: Consolidated Balance Sheets as of August 31, 1997 and 1996, and the Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity and Consolidated Statements of Cash Flows for each of the years ended August 31, 1997, 1996 and 1995, on pages 25 to 28, the Notes to Consolidated Financial Statements on pages 29 to 37, the report of independent auditors thereon on page 24 and the section entitled Quarterly Results of Operations-Unaudited on page 38. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 8
PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT There is hereby incorporated by reference the information under the caption "Election of Directors" in the Company's definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant's year ended August 31, 1997, and the information under the caption "Executive Officers of the Company" in Part I, Item 1, "Business," of this Annual Report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION There is hereby incorporated by reference the information under the caption "Executive Compensation" in Registrant's definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant's year ended August 31, 1997. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT There is hereby incorporated by reference the information under the captions "Voting" and "Stockholdings of Certain Beneficial Owners and Management" in Registrant's definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant's year ended August 31, 1997. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS There is hereby incorporated by reference the information under the caption "Certain Relationships and Related Party Transactions" in Registrant's definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant's year ended August 31, 1997. 9
PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K The Consolidated Financial Statements, together with the report thereon of Deloitte & Touche LLP, dated November 12, 1997, appearing on pages 24 to 37 of the 1997 Annual Report to Stockholders are incorporated by reference into this Annual Report on Form 10-K. With the exception of the aforementioned information and that which is specifically incorporated in Parts I and II, the 1997 Annual Report to Stockholders is not to be deemed filed as part of this Annual Report on Form 10-K. Annual Report Page No. -------- (a) (1) Financial Statements of the Company - Index 17 Independent Auditors' Report 24 Consolidated Balance Sheets as of August 31, 1997 and 1996 25 Consolidated Statements of Operations for each of the years ended August 31, 1997, 1996 and 1995 26 Consolidated Statements of Stockholders' Equity for each of the years ended August 31, 1997, 1996 and 1995 27 Consolidated Statements of Cash Flows for each of the years ended August 31, 1997, 1996 and 1995 28 Notes to Consolidated Financial Statements 29 This Filing Page No. -------- (2) The following financial statement schedules should be read in conjunction with the Consolidated Financial Statements in the 1997 Annual Report to Stockholders. All other schedules have been omitted because they are inapplicable, not required or because the information is given in the Consolidated Financial Statements or related Notes to Consolidated Financial Statements. Independent Auditors' Report 15 Schedule I - Condensed Financial Information of Registrant 16 Schedule II - Valuation and Qualifying Accounts 18 (3) List of Exhibits 3.1. Registrant's Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 3.1 to the Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 3.2. Registrant's Amended and Restated By-laws, as amended on November 9, 1994 is incorporated herein by reference to Exhibit 3.2 to Registrant's Annual Report on Form 10-K for the year ended August 31, 1994. 9.1. Form of Stockholders' Agreement dated July 1, 1994, between Alan James and William A. Furman is incorporated herein by reference to Exhibit 9.1 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 9.2. Amendment No. 1 dated as of December 23, 1994 to Stockholders' Agreement dated July 1, 1994 between Alan James and William A. Furman is incorporated herein by reference to Exhibit 9.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995. 10
10.1. Form of Registrant's 1994 Stock Incentive Plan, dated July 1, 1994 is incorporated herein by reference to Exhibit 10.1 to the Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.2.* Employment Agreement dated as of July 1, 1994, between Alan James and Registrant is incorporated herein by reference to Exhibit 10.2 filed with the Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1994. 10.3.* Employment Agreement dated as of July 1, 1994, between William A. Furman and Registrant is incorporated herein by reference to Exhibit 10.3 filed with the Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1994. 10.4. Lease of Land and Improvements dated as of July 23, 1992 between the Atchison, Topeka and Santa Fe Railway Company and Gunderson Southwest, Inc. is incorporated herein by reference to Exhibit 10.4 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.5. Remarketing Agreement dated as of November 19, 1987 among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc. is incorporated herein by reference to Exhibit 10.5 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.6. Amendment to Remarketing Agreement among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc. dated as of November 15, 1988 is incorporated herein by reference to Exhibit 10.6 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.7. Amendment No. 2 to Remarketing Agreement among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc. is incorporated herein by reference to Exhibit 10.7 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.8. Amendment No. 3 to Remarketing Agreement dated November 19, 1987 among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc. dated as of March 5, 1991 is incorporated herein by reference to Exhibit 10.8 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.9. Railcar Management Agreement between Greenbrier Leasing Corporation and James-Furman & Company, dated as of December 31, 1989 is incorporated herein by reference to Exhibit 10.9 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.10. Railcar Maintenance Agreement between Greenbrier Leasing Corporation and James-Furman & Company, dated as of December 31, 1989 is incorporated herein by reference to Exhibit 10.10 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 11
10.11. Form of Amendment No. 1 to Railcar Management Agreement between Greenbrier Leasing Corporation and James-Furman & Company dated as of July 1, 1994 is incorporated herein by reference to Exhibit 10.11 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.12. Form of Amendment No. 1 to Railcar Maintenance Agreement between Greenbrier Leasing Corporation and James-Furman & Company dated as of July 1, 1994 is incorporated herein by reference to Exhibit 10.12 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.13. Form of Option with Right of First Refusal and Agreement of Purchase and Sale among William A. Furman, Alan James and Registrant is incorporated herein by reference to Exhibit 10.13 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.14. Second Amended and Restated Credit Agreement by and among Greenbrier Leasing Corporation, Greenbrier Capital Corporation, Greenbrier Railcar, Inc., Autostack Corporation, The Bank of California, N.A. and West One Bank, Idaho, N.A., dated as of April 30, 1994 is incorporated herein by reference to Exhibit 10.14 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.15. $10,000,000 Term Loan and $20,000,000 Revolving Loan Agreement by and among Gunderson, Inc. and United States National Bank of Oregon and Bank of America Oregon, dated as of January 31, 1994 is incorporated herein by reference to Exhibit 10.15 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.16. Autostack Partners Limited Partnership Agreement among Autostack Corporation, MBK Rail Capital, Inc., Mitsui Nevitt Capital Corporation effective August 30, 1993 is incorporated herein by reference to Exhibit 10.17 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.17. Form of Agreement concerning Indemnification and Related Matters (Directors) between Registrant and its directors is incorporated herein by reference to Exhibit 10.18 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.18. Exclusive License Agreement dated as of December 24, 1987 between G&G Intellectual Properties, Inc., and Greenbrier Intermodal, Inc. is incorporated herein by reference to Exhibit 10.19 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.19. Manufacturing Agreement dated as of December 24, 1987 between Greenbrier Intermodal, Inc. and CTNR. J.V., Inc. is incorporated herein by reference to Exhibit 10.20 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.20. Note Agreement dated as of May 31, 1994 among Greenbrier Leasing Corporation, Greenbrier Railcar, Inc. and The Prudential Insurance Company of America is incorporated herein by reference to Exhibit 10.22 to Registrant's Registration Statement No. 33-78852, dated July 11, 1994. 10.21.* James-Furman Supplemental 1994 Stock Option Plan is incorporated herein by reference to Exhibit 10.23 to the Registrant's Annual Report on Form 10-K for the year ended August 31, 1994. 12
10.22. First amendment dated September 26, 1994 to the Lease of Land and Improvements dated as of July 23, 1992 between The Atchison, Topeka and Santa Fe Railway Company and Gunderson Southwest, Inc. is incorporated herein by reference to Exhibit 10.24 to Registrant's Quarterly Report on form 10-Q for the quarter ended November 30, 1994. 10.23. Asset Purchase Agreement dated as of February 2, 1995 among TrentonWorks Inc., 2361025 Nova Scotia Limited (which later changed its name to TrentonWorks Limited), 2196203 Nova Scotia Inc., and The Greenbrier Companies, Inc. is incorporated herein by reference to Exhibit 10.25 to Registrant's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995. 10.24. Stock Purchase and Shareholders' Agreement dated as of March 8, 1995 among The Greenbrier Companies, Inc., Greenbrier Leasing Corporation, Plunkett Investments Ltd., 2441001 Nova Scotia Limited, and 2361025 Nova Scotia Limited is incorporated herein by reference to Exhibit 10.26 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995. 10.25. Loan Agreement dated as of March 9, 1995 between 2361025 Nova Scotia Limited and Canadian Imperial Bank of Commerce is incorporated herein by reference to Exhibit 10.27 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995. 10.26. Agreement dated as of March 9, 1995 between Her Majesty the Queen in Right of the Province of Nova Scotia and 2361025 Nova Scotia Limited is incorporated herein by reference to Exhibit 10.28 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995. 10.27. Covenant Agreement dated as of March 9, 1995 among Her Majesty the Queen in Right of the Province of Nova Scotia as Represented by the Minister Responsible for the Nova Scotia Economic Renewal Agency and 2361025 Nova Scotia Limited and 2441001 Nova Scotia Limited is incorporated herein by reference to Exhibit 10.29 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995. 10.28. Amending Agreement dated as of March 9, 1995 among TrentonWorks Inc. 2361025 Nova Scotia Limited, 2196203 Nova Scotia Inc., and The Greenbrier Companies, Inc. is incorporated herein by reference to Exhibit 10.30 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995. 10.29. First Amended and Restated $10,000,000 Term Loan and $30,000,000 Revolving Loan Agreement dated as of May 31, 1995 among Gunderson, Inc., United States National Bank of Oregon and Bank of America Oregon is incorporated herein by reference to Exhibit 10.31 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995. 10.30.* Form of Registrant's Split-Dollar Agreement is incorporated herein by reference to Exhibit 10.32 to Registrant's Annual Report on Form 10-K for the year ended August 31, 1995. 13
10.31 Stock Purchase Agreement between and among Greenbrier Logistics, Inc. and A. Daniel O'Neal dated as of June 28, 1996 is incorporated herein by reference to Exhibit 10.32 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1996. 10.32* Employment Agreement dated June 1, 1996 between Greenbrier Logistics, Inc. and A. Daniel O'Neal Jr. is incorporated herein by reference to Exhibit 10.33 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1996. 10.33* Greenbrier Leasing Corporations Manager Owned Target Benefit Plan dated as of January 1, 1996 is incorporated herein by reference to Exhibit 10.35 to Registrant's Quarterly Report on Form 10-Q for the quarter ended May 31, 1997. 10.34 Credit Agreement dated as of September 1, 1997 among Greenbrier Leasing Corporation, Greenbrier Capital Corporation, Greenbrier Partners Inc., Greenbrier Railcar, Inc., Autostack Corporation, Greenbrier Transportation Limited Partnership, Autostack General Partner, Inc. and Greenbrier Rental Services, Inc. with Bank of America National Trust and Savings Association and Union Bank of California, N.A. 13. 1997 Annual Report 21.1 List of the subsidiaries of the Registrant 23. Consent of Deloitte & Touche LLP, independent auditor 27. Financial Data Schedule - ----------------- * Management contract or compensatory plan or arrangement (b) Reports on Form 8-K None 14
INDEPENDENT AUDITORS' REPORT Board of Directors and Stockholders The Greenbrier Companies, Inc. We have audited the financial statements of The Greenbrier Companies, Inc. and Subsidiaries as of August 31, 1997 and 1996, and for each of the three years in the period ended August 31, 1997, and have issued our report thereon dated November 12, 1997; such financial statements and report are included in your 1997 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial statement schedules of The Greenbrier Companies, Inc. and Subsidiaries, listed in Item 14. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. Deloitte & Touche LLP Portland, Oregon November 12, 1997
<TABLE> <CAPTION> SCHEDULE I THE GREENBRIER COMPANIES, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (In thousands) BALANCE SHEETS August 31, -------------------------------- 1997 1996 ---------- ---------- ASSETS <S> <C> <C> Cash and cash equivalents $ 21 $ 123 Accounts and notes receivable from affiliates 8,803 26,717 Investment in subsidiaries 95,417 87,024 Prepaid expenses and other 1,535 1,327 ---------- ---------- $ 105,776 $ 115,191 ---------- ---------- ---------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued liabilities $ 1,115 $ 3,455 Deferred income taxes 589 - Stockholders' equity 104,072 111,736 ---------- ---------- $ 105,776 $ 115,191 ---------- ---------- ---------- ---------- </TABLE> <TABLE> <CAPTION> STATEMENTS OF OPERATIONS Year ended August 31, -------------------------------------- 1997 1996 1995 -------- -------- -------- <S> <C> <C> <C> Interest and other income $ 1,044 $ 2,624 $ 3,402 Expenses Selling and administrative 4,571 5,325 4,073 Interest 26 37 18 -------- -------- -------- 4,597 5,362 4,091 -------- -------- -------- Loss before income tax benefit and equity in earnings of subsidiaries (3,553) (2,738) (689) Income tax benefit 1,496 1,153 327 -------- -------- -------- Loss before equity in earnings (loss) of subsidiaries (2,057) (1,585) (362) Equity in earnings (loss) of subsidiaries (2,114) 19,860 17,027 -------- -------- -------- Net earnings (loss) $ (4,171) $ 18,275 $ 16,665 -------- -------- -------- -------- -------- -------- </TABLE> 16
<TABLE> <CAPTION> SCHEDULE I (CONTINUED) THE GREENBRIER COMPANIES, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (In thousands) STATEMENTS OF CASH FLOWS Year ended August 31, ---------------------------------------- 1997 1996 1995 --------- --------- --------- <S> <C> <C> Cash flows from operating activities: Net earnings (loss) $ (4,171) $ 18,275 $ 16,665 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Deferred income taxes 589 (679) (2,260) Equity in earnings of subsidiary (8,611) (19,860) (17,027) Other 56 185 238 Decrease (increase) in assets: Accounts and notes receivable 17,914 10,591 (28,211) Prepaid expenses and other (208) 309 (648) Increase (decrease) in liabilities: Accounts payable and accrued liabilities (2,340) 1,533 (4,050) --------- --------- --------- Net cash provided by (used in) operating activities 3,229 10,354 (35,293) Cash flows from investing activities: Investment in subsidiary - (7,472) (2,119) Dividends (3,399) (3,399) (3,399) Proceeds from subsidiary redemption of preferred stock 68 111 104 --------- --------- --------- Net cash provided by (used in) investing activities (3,331) (10,760) (5,414) Decrease in cash (102) (406) (40,707) Cash and cash equivalents: Beginning of year 123 529 4,236 --------- --------- --------- End of year $ 21 $ 123 $ 529 --------- --------- --------- Supplemental disclosures of cash flow information: Cash paid during the year for interest $ 26 $ 37 $ 18 </TABLE> 17
<TABLE> <CAPTION> SCHEDULE II THE GREENBRIER COMPANIES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (In thousands) Additions ------------------------------- Balance at Charged to Charged to Balance Beginning Costs and Other at End of Period Expenses Accounts(1) Deductions of Period ----------- ----------- ----------- ----------- ----------- <S> <C> <C> <C> <C> Year ended August 31, 1997: Maintenance Reserves $ 26,278 $ 10,990 $ 7,959 $ (14,723) $ 30,504 Warranty Reserves 3,400 2,571 - (1,254) 4,717 Inventory Reserves 1,541 808 - (401) 1,948 Allowance for Uncollectible Accounts 595 580 322 (549) 948 ----------- ----------- ----------- ----------- ----------- Total $ 31,814 $ 14,949 $ 8,281 $ (16,927) $ 38,117 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Year ended August 31, 1996: Maintenance Reserves $ 22,134 $ 10,526 $ 7,705 $ (14,087) $ 26,278 Warranty Reserves 2,242 1,755 - (597) 3,400 Inventory Reserves 1,428 458 - (345) 1,541 Allowance for Uncollectible Accounts 337 162 106 (10) 595 ----------- ----------- ----------- ----------- ----------- Total $ 26,141 $ 12,901 $ 7,811 $ (15,039) $ 31,814 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Year ended August 31, 1995: Maintenance Reserves $ 13,716 $ 5,400 $ 12,207 $ (9,189) $ 22,134 Warranty Reserves 2,193 410 - (361) 2,242 Inventory Reserves 1,180 339 83 (174) 1,428 Allowance for Uncollectible Accounts 348 60 37 (108) 337 Other 85 - - (85) - ----------- ----------- ----------- ----------- ----------- Total $ 17,522 $ 6,209 $ 12,327 $ (9,917) $ 26,141 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- </TABLE> (1) Additions charged to other accounts are primarily executory costs included in the investment in direct finance leases and amounts received under maintenance agreements. 18
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE GREENBRIER COMPANIES, INC. Dated: November 26, 1997 By: /s/ William A. Furman --------------------------- William A. Furman President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Date - --------- ---- /s/ Alan James November 26, 1997 - ------------------------- Alan James, Chairman of the Board /s/ William A. Furman November 26, 1997 - ------------------------- William A. Furman, President and Chief Executive Officer, Director /s/ Victor G. Atiyeh November 26, 1997 - ------------------------- Victor G. Atiyeh, Director /s/ Peter K. Nevitt November 26, 1997 - ------------------------- Peter K. Nevitt, Director /s/ A. Daniel O'Neal November 26, 1997 - ------------------------- A. Daniel O'Neal, Director /s/ C. Bruce Ward November 26, 1997 - ------------------------- C. Bruce Ward, Director /s/ Benjamin R. Whiteley November 26, 1997 - ------------------------- Benjamin R. Whiteley, Director /s/ Larry G. Brady November 26, 1997 - ------------------------- Larry G. Brady, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)