Segment Information

3 Months Ended

Nov. 30, 2014

Segment Information

Note 11 – Segment Information

Through July 18, 2014, Greenbrier operated in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. On July 18, 2014, the Company completed the formation of GBW, an unconsolidated 50/50 joint venture with Watco which became the Company’s fourth reportable segment (GBW Joint Venture) upon formation. The Wheels & Parts segment (previously known as Wheels, Repair & Parts through 2014) included the results of operations for its repair, refurbishment, maintenance and retrofitting (“Repair”) operations through July 18, 2014. After July 18, 2014, the results of GBW were included as part of Earnings from unconsolidated affiliates as the Company accounts for its interest in GBW under the equity method of accounting. Certain assets including real property, personal property, accounts receivable and accounts payable were not contributed or sold to GBW and remained as part of the Wheels & Parts segment.

The results of operations for the GBW Joint Venture are not reflected in the tables below as the investment is accounted for under the equity method of accounting. For the three months ended November 30, 2014, GBW generated total revenue of $82.5 million and had total assets of $231.3 million and $210.6 million as of November 30, 2014 and August 31, 2014. The Company recorded $0.4 million in Earnings from unconsolidated affiliates associated with GBW for the three months ended November 30, 2014. The Company’s total investment in GBW at November 30, 2014 was $58.8 million which is included in unallocated assets in the tables below.

The accounting policies of the segments are described in the summary of significant accounting policies in the Consolidated Financial Statements contained in the Company’s 2014 Annual Report on Form 10-K. Performance is evaluated based on Earnings from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business. The Company does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes. Intersegment sales and transfers are valued as if the sales or transfers were to third parties. Related revenue and margin are eliminated in consolidation and therefore are not included in consolidated results in the Company’s Consolidated Financial Statements.

The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes.

For the three months ended November 30, 2014:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	379,949	$	7,420		$	387,369		$	52,051		$	786		$	52,837
Wheels & Parts		86,624		6,911			93,535			7,932			784			8,716
Leasing & Services		28,485		13,184			41,669			11,042			13,184			24,226
Eliminations		—		(27,515	)		(27,515	)		—			(14,754	)		(14,754	)
Corporate		—		—			—			(16,603	)		—			(16,603	)
	$	495,058	$	—		$	495,058		$	54,422		$	—		$	54,422
For the three months ended November 30, 2013:
	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	359,473	$	—		$	359,473		$	38,314		$	—		$	38,314
Wheels & Parts		113,401		1,653			115,054			(374	)		31			(343	)
Leasing & Services		17,481		2,869			20,350			8,670			2,869			11,539
Eliminations		—		(4,522	)		(4,522	)		—			(2,900	)		(2,900	)
Corporate		—		—			—			(8,388	)		—			(8,388	)
	$	490,355	$	—		$	490,355		$	38,222		$	—		$	38,222

	Total assets
	November 30,		August 31,
	2014		2014
Manufacturing	$	585,240	$	521,711
Wheels & Parts		301,300		298,009
Leasing & Services		493,048		436,075
Unallocated		189,794		261,373
	$	1,569,382	$	1,517,168