Business Segments

3 Months Ended

Nov. 30, 2019

We have six operating segments: 1) Grand Design towables, 2) Winnebago towables, 3) Winnebago motorhomes, 4) Newmar motorhomes, 5) Chris-Craft marine, and 6) Winnebago specialty vehicles. We evaluate performance based on each operating segment's Adjusted EBITDA, as defined below, which excludes certain corporate administration expenses and non-operating income and expense.

Our two reportable segments include: 1) Towable (comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services), which is an aggregation of the Grand Design towables and the Winnebago towables operating segments and 2) Motorhome (comprised of products that include a motorized chassis as well as other related manufactured products and services), which is an aggregation of the Winnebago motorhomes and Newmar motorhomes operating segments.

The Corporate / All Other category includes the Chris-Craft marine and Winnebago specialty vehicles operating segments as well as expenses related to certain corporate administration expenses for the oversight of the enterprise. These expenses include items such as corporate leadership and administration costs.

Identifiable assets of the reportable segments exclude general corporate assets, which principally consist of cash and cash equivalents and certain deferred tax balances. The general corporate assets are included in the Corporate / All Other category.

Our chief operating decision maker ("CODM") is our Chief Executive Officer. Our CODM relies on internal management reporting

that analyzes consolidated results to the net earnings level and operating segment's Adjusted EBITDA. Our CODM has ultimate responsibility for enterprise decisions. Our CODM determines, in particular, resource allocation for, and monitors the performance of, the consolidated enterprise, the Towable segment, and the Motorhome segment. The operating segments' management have responsibility for operating decisions, allocating resources, and assessing performance within their respective segments. The accounting policies of both reportable segments are the same and are described in Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

We evaluate the performance of our reportable segments based on Adjusted EBITDA. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period. Examples of items excluded from Adjusted EBITDA include acquisition-related fair-value inventory step-up, acquisition-related costs, restructuring expenses, and non-operating income.

The following table shows information by reportable segment:



	Three Months Ended
(in thousands)	November 30, 2019			November 24, 2018
Net Revenues
Towable	$	341,250		$	292,833
Motorhome	225,891			181,328
Corporate / All Other	21,317			19,487
Consolidated	$	588,458		$	493,648

Adjusted EBITDA
Towable	$	35,785		$	30,828
Motorhome	9,331			11,976
Corporate / All Other	(3,068		)	(4,351		)
Consolidated	$	42,048		$	38,453

Capital Expenditures
Towable	$	4,026		$	8,877
Motorhome	2,240			3,192
Corporate / All Other	358			702
Consolidated	$	6,624		$	12,771

(in thousands)	November 30, 2019			August 31, 2019
Total Assets
Towable	$	673,683		$	628,994
Motorhome	674,849			332,157
Corporate / All Other	205,092			143,080
Consolidated	$	1,553,624		$	1,104,231

Reconciliation of net income to consolidated Adjusted EBITDA:



	Three Months Ended
(in thousands)	November 30, 2019			November 24, 2018
Net income	$	14,068		$	22,161
Interest expense	6,049			4,501
Provision for income taxes	3,893			6,726
Depreciation	3,586			3,169
Amortization of intangible assets	3,614			2,659
EBITDA	31,210			39,216
Acquisition-related fair-value inventory step-up	1,176			—
Acquisition-related costs	9,950			—
Restructuring expenses	(172		)	—
Non-operating income	(116		)	(763		)
Adjusted EBITDA	$	42,048		$	38,453