Segment Information

9 Months Ended

May 31, 2016

Segment Information

Note 12 – Segment Information

Greenbrier operates in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. The results of GBW Joint Venture are included as part of Earnings from unconsolidated affiliates as the Company accounts for its interest in GBW Railcar Services LLC (GBW) under the equity method of accounting.

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 2015 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 model. 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. 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 May 31, 2016:

	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	458,494	$	5,595		$	464,089		$	92,713		$	923		$	93,636
Wheels & Parts		78,417		10,058			88,475			5,811			711			6,522
Leasing & Services		75,955		601			76,556			8,298			601			8,899
Eliminations		—		(16,254	)		(16,254	)		—			(2,235	)		(2,235	)
Corporate		—		—			—			(22,693	)		—			(22,693	)
	$	612,866	$	—		$	612,866		$	84,129		$	—		$	84,129

For the nine months ended May 31, 2016:

	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,611,686	$	5,595		$	1,617,281		$	325,215		$	941		$	326,156
Wheels & Parts		247,604		24,074			271,678			15,720			2,155			17,875
Leasing & Services		225,044		10,444			235,488			42,668			10,444			53,112
Eliminations		—		(40,113	)		(40,113	)		—			(13,540	)		(13,540	)
Corporate		—		—			—			(58,596	)		—			(58,596	)
	$	2,084,334	$	—		$	2,084,334		$	325,007		$	—		$	325,007

For the three months ended May 31, 2015:

	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	593,376	$	33		$	593,409		$	115,675		$	—		$	115,675
Wheels & Parts		97,407		7,605			105,012			5,078			607			5,685
Leasing & Services		23,823		11,722			35,545			10,824			11,722			22,546
Eliminations		—		(19,360	)		(19,360	)		—			(12,329	)		(12,329	)
Corporate		—		—			—			(27,166	)		—			(27,166	)
	$	714,606	$	—		$	714,606		$	104,411		$	—		$	104,411

For the nine months ended May 31, 2015:

	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,478,566	$	7,534		$	1,486,100		$	258,602		$	795		$	259,397
Wheels & Parts		286,671		20,450			307,121			20,986			2,044			23,030
Leasing & Services		74,576		43,533			118,109			31,677			43,533			75,210
Eliminations		—		(71,517	)		(71,517	)		—			(46,372	)		(46,372	)
Corporate		—		—			—			(59,900	)		—			(59,900	)
	$	1,839,813	$	—		$	1,839,813		$	251,365		$	—		$	251,365

	Total assets
	May 31,		August 31,
(In thousands)	2016		2015
Manufacturing	$	641,090	$	675,409
Wheels & Parts		301,474		291,798
Leasing & Services		523,989		549,073
Unallocated		319,331		274,232
	$	1,785,884	$	1,790,512

Reconciliation of Earnings from operations to Earnings before income tax and earnings from unconsolidated affiliates:

	Three Months Ended May 31,				Nine Months Ended May 31,
(In thousands)	2016		2015		2016		2015
Earnings from operations	$	84,129	$	104,411	$	325,007	$	251,365
Interest and foreign exchange		3,712		4,285		10,565		9,355
Earnings before income tax and earnings from unconsolidated affiliates	$	80,417	$	100,126	$	314,442	$	242,010

The results of operations for the GBW Joint Venture are accounted for under the equity method of accounting. The GBW Joint Venture is the Company’s fourth reportable segment and information as of May 31, 2016 and August 31, 2015 and for the three and nine months ended May 31, 2016 and 2015 are included in the tables below.

	Three Months Ended May 31,				Nine Months Ended May 31,
(In thousands)	2016		2015		2016		2015
Revenue	$	95,699	$	88,831	$	289,381	$	254,688
Earnings (loss) from operations	$	3,030	$	227	$	9,065	$	(1,507	)
	Total Assets
	May 31, 2016		August 31, 2015
GBW (1)	$	255,400	$	239,871

⁽¹⁾  Includes goodwill and intangible assets of $94.4 million and $96.9 million as of May 31, 2016 and August 31, 2015.