SEGMENT INFORMATION:

The Company presents the financial results of its nine operating regions as three reportable segments: North American Operations, Australian Operations and U.K./European Operations. The Company owns a 51.1% controlling interest in the Australian Operations. As such, the Company includes 100% of the revenues and expenses from its Australian Operations within its consolidated financial statements and reports a noncontrolling interest for MIRA’s 48.9% equity ownership. Each of the Company's segments generates the following three categories of revenues from external customers: freight revenues, freight-related revenues and all other revenues. The Company's seven North American regions are aggregated into one reportable segment as a result of having similar economic and operating characteristics. During the third quarter of 2017, the Company's Mountain West Region railroads were consolidated into the Company's Central and Pacific regions, and the Pacific Region was renamed the Western Region. This consolidation reduced the Company's number of operating regions from ten to nine.

The results of operations of the Company's foreign entities are maintained in the respective local currency (the Australian dollar, the British pound, the Canadian dollar and the Euro) and then translated into United States dollars at the applicable exchange rates for inclusion in the consolidated financial statements. As a result, any appreciation or depreciation of these currencies against the United States dollar will impact the Company's results of operations.

The following tables reflect the balance sheet exchange rates as of September 30, 2017 and December 31, 2016 and the average exchange rates for the three and nine months ended September 30, 2017 and 2016 used to translate the foreign entities respective local currency balance sheet and results of operations into United States dollars for the respective period:



					September 30, 2017		December 31, 2016
United States dollar per Australian dollar					$	0.78	$	0.72
United States dollar per British pound					$	1.34	$	1.23
United States dollar per Canadian dollar					$	0.80	$	0.74
United States dollar per Euro					$	1.18	$	1.06

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
United States dollar per Australian dollar	$	0.79	$	0.76	$	0.77	$	0.74
United States dollar per British pound	$	1.31	$	1.31	$	1.28	$	1.39
United States dollar per Canadian dollar	$	0.80	$	0.77	$	0.77	$	0.76
United States dollar per Euro	$	1.17	$	1.12	$	1.11	$	1.12

The following tables set forth select financial data for the Company's reportable segments for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):



	Three Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Operating revenues:
Freight revenues	$	242,968	$	66,404	$	91,363	$	400,735
Freight-related revenues	60,286		12,880		67,757		140,923
All other revenues	15,673		1,986		17,610		35,269
Total operating revenues	$	318,927	$	81,270	$	176,730	$	576,927
Operating income	$	82,111	$	22,276	$	7,102	$	111,489
Depreciation and amortization	$	40,036	$	15,753	$	8,433	$	64,222
Interest expense, net	$	9,817	$	13,678	$	4,323	$	27,818
Provision for income taxes	$	28,270	$	2,013	$	224	$	30,507
Expenditures for additions to property & equipment, net of grants from outside parties	$	41,713	$	4,545	$	6,981	$	53,239



	Three Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	232,247	$	29,219	$	88,341		$	349,807
Freight-related revenues	62,124		23,523		43,873			129,520
All other revenues	15,823		1,408		4,444			21,675
Total operating revenues	$	310,194	$	54,150	$	136,658		$	501,002
Operating income	$	87,153	$	4,372	$	326		$	91,851
Depreciation and amortization	$	37,085	$	7,129	$	6,627		$	50,841
Interest expense, net	$	9,600	$	2,170	$	5,147		$	16,917
Provision for/(benefit from) income taxes	$	22,392	$	798	$	(3,547	)	$	19,643
Expenditures for additions to property & equipment, net of grants from outside parties	$	30,343	$	2,440	$	9,457		$	42,240



	Nine Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	719,622	$	191,031	$	250,982		$	1,161,635
Freight-related revenues	186,814		36,089		164,978			387,881
All other revenues	47,641		4,866		34,445			86,952
Total operating revenues	$	954,077	$	231,986	$	450,405		$	1,636,468
Operating income	$	229,267	$	59,685	$	1,331		$	290,283
Depreciation and amortization	$	117,822	$	45,915	$	22,772		$	186,509
Interest expense, net	$	29,928	$	41,500	$	7,732		$	79,160
Provision for/(benefit from) income taxes	$	78,133	$	4,805	$	(906	)	$	82,032
Expenditures for additions to property & equipment, net of grants from outside parties	$	105,940	$	9,721	$	17,446		$	133,107



	Nine Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	681,154	$	80,390	$	255,459		$	1,017,003
Freight-related revenues	184,627		76,142		135,897			396,666
All other revenues	48,766		4,699		17,859			71,324
Total operating revenues	$	914,547	$	161,231	$	409,215		$	1,484,993
Operating income/(loss)	$	236,154	$	2,002	$	(2,115	)	$	236,041
Depreciation and amortization	$	110,398	$	21,018	$	19,679		$	151,095
Interest expense, net	$	29,730	$	6,963	$	15,529		$	52,222
Provision for/(benefit from) income taxes	$	59,354	$	521	$	(5,312	)	$	54,563
Expenditures for additions to property & equipment, net of grants from outside parties	$	95,282	$	8,094	$	26,195		$	129,571

The following tables set forth select balance sheet data for the Company's reportable segments as of September 30, 2017 and December 31, 2016 (dollars in thousands):



	September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	7,158	$	47,989	$	25,130	$	80,277
Property and equipment, net	$	3,626,293	$	670,160	$	332,441	$	4,628,894



	December 31, 2016
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	10,137	$	9,213	$	12,969	$	32,319
Property and equipment, net	$	3,590,625	$	634,148	$	278,546	$	4,503,319