Segment Information

6 Months Ended

Feb. 28, 2017

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 (loss) 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 2016 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 February 28, 2017:

	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	445,504	$	—		$	445,504		$	85,369		$	—		$	85,369
Wheels & Parts		82,714		7,233			89,947			5,569			512			6,081
Leasing & Services		38,064		2,112			40,176			9,889			1,924			11,813
Eliminations		—		(9,345	)		(9,345	)		—			(2,436	)		(2,436	)
Corporate		—		—			—			(19,307	)		—			(19,307	)
	$	566,282	$	—		$	566,282		$	81,520		$	—		$	81,520
For the six months ended February 28, 2017:
	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	899,537	$	—		$	899,537		$	168,710		$	—		$	168,710
Wheels & Parts		152,349		14,434			166,783			8,463			1,124			9,587
Leasing & Services		66,710		7,446			74,156			17,279			7,174			24,453
Eliminations		—		(21,880	)		(21,880	)		—			(8,298	)		(8,298	)
Corporate		—		—			—			(40,272	)		—			(40,272	)
	$	1,118,596	$	—		$	1,118,596		$	154,180		$	—		$	154,180
For the three months ended February 29, 2016:
	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	454,531	$	—		$	454,531		$	78,798		$	17		$	78,815
Wheels & Parts		90,458		7,200			97,658			6,506			761			7,267
Leasing & Services		124,090		3,133			127,223			24,412			3,133			27,545
Eliminations		—		(10,333	)		(10,333	)		—			(3,911	)		(3,911	)
Corporate		—		—			—			(17,323	)		—			(17,323	)
	$	669,079	$	—		$	669,079		$	92,393		$	—		$	92,393
For the six months ended February 29, 2016:
	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,153,192	$	—		$	1,153,192		$	232,502		$	17		$	232,519
Wheels & Parts		169,187		14,016			183,203			9,909			1,445			11,354
Leasing & Services		149,089		9,843			158,932			34,370			9,843			44,213
Eliminations		—		(23,859	)		(23,859	)		—			(11,305	)		(11,305	)
Corporate		—		—			—			(35,903	)		—			(35,903	)
	$	1,471,468	$	—		$	1,471,468		$	240,878		$	—		$	240,878

	Total assets
(In thousands)	February 28, 2017		August 31, 2016
Manufacturing	$	724,209	$	701,296
Wheels & Parts		280,207		275,599
Leasing & Services		505,897		516,147
Unallocated		645,665		342,732
	$	2,155,978	$	1,835,774

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

	Three Months Ended				Six Months Ended
(In thousands)	February 28, 2017		February 29, 2016		February 28, 2017		February 29, 2016
Earnings from operations	$	81,520	$	92,393	$	154,180	$	240,878
Interest and foreign exchange		5,673		1,417		7,397		6,853
Earnings before income tax and earnings (loss) from unconsolidated affiliates	$	75,847	$	90,976	$	146,783	$	234,025

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 February 28, 2017 and August 31, 2016 and for the three and six months ended February 28, 2017 and for the three and six months ended February 29, 2016 are included in the tables below.

	Three Months Ended					Six Months Ended
(In thousands)	February 28, 2017			February 29, 2016		February 28, 2017			February 29, 2016
Revenue	$	64,249		$	97,700	$	134,502		$	193,682
Earnings (loss) from operations	$	(6,901	)	$	3,626	$	(11,463	)	$	6,034

	Total Assets
	February 28, 2017		August 31, 2016
GBW (1)	$	227,182	$	247,610

⁽¹⁾  Includes goodwill and intangible assets of $91.7 million and $93.4 million as of February 28, 2017 and August 31, 2016.