Note 19 - 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 under the equity method of accounting.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. 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 year ended August 31, 2017:


	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,725,188	$	19,291		$	1,744,479		$	295,334		$	1,022		$	296,356
Wheels & Parts		312,679		30,861			343,540			14,984			2,303			17,287
Leasing & Services		131,297		11,812			143,109			31,904			11,099			43,003
Eliminations		–		(61,964	)		(61,964	)		–			(14,424	)		(14,424	)
Corporate		–		–			–			(81,790	)		–			(81,790	)

	$	2,169,164	$	–		$	2,169,164		$	260,432		$	–		$	260,432

For the year ended August 31, 2016:


	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,096,331	$	89,158		$	2,185,489		$	415,094		$	24,299		$	439,393
Wheels & Parts		322,395		32,436			354,831			19,948			2,602			22,550
Leasing & Services		260,798		13,101			273,899			51,723			13,101			64,824
Eliminations		–		(134,695	)		(134,695	)		–			(40,002	)		(40,002	)
Corporate		–		–			–			(78,213	)		–			(78,213	)

	$	2,679,524	$	–		$	2,679,524		$	408,552		$	–		$	408,552

For the year ended August 31, 2015:


	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,136,051	$	7,534		$	2,143,585		$	396,921		$	795		$	397,716
Wheels & Parts		371,237		27,257			398,494			27,563			2,629			30,192
Leasing & Services		97,990		62,600			160,590			41,887			62,600			104,487
Eliminations		–		(97,391	)		(97,391	)		–			(66,024	)		(66,024	)
Corporate		–		–			–			(79,479	)		–			(79,479	)

	$	2,605,278	$	–		$	2,605,278		$	386,892		$	–		$	386,892


	Years ended August 31,
(In thousands)	2017		2016		2015
Assets:
Manufacturing	$	914,450	$	701,296	$	675,409
Wheels & Parts		236,315		275,599		291,798
Leasing & Services		535,323		516,147		546,013
Unallocated		711,617		342,732		274,232

	$	2,397,705	$	1,835,774	$	1,787,452

Depreciation and amortization:
Manufacturing	$	33,807	$	27,137	$	20,668
Wheels & Parts		11,143		11,971		11,748
Leasing & Services		20,179		24,237		12,740

	$	65,129	$	63,345	$	45,156

Capital expenditures:
Manufacturing	$	54,973	$	51,294	$	84,354
Wheels & Parts		3,129		10,190		9,381
Leasing & Services		27,963		77,529		12,254

	$	86,065	$	139,013	$	105,989

The following table summarizes selected geographic information.


	Years ended August 31,
(In thousands)	2017		2016		2015
Revenue ⁽¹⁾:
U.S.	$	1,674,517	$	2,297,501	$	2,404,266
Foreign		494,647		382,023		201,012

	$	2,169,164	$	2,679,524	$	2,605,278

Assets:
U.S.	$	1,307,239	$	955,674	$	1,181,751
Mexico		791,974		788,878		524,724
Europe		298,492		91,222		80,977

	$	2,397,705	$	1,835,774	$	1,787,452

⁽¹⁾	Revenue is presented on the basis of geographic location of customers.

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


	Years ended August 31,
(In thousands)	2017		2016		2015
Earnings from operations	$	260,432	$	408,552	$	386,892
Interest and foreign exchange		24,192		13,502		11,179

Earnings before income tax and earnings from unconsolidated affiliates	$	236,240	$	395,050	$	375,713

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 for 2017, 2016 and 2015 are included in the tables below.


	Years ended August 31,
(In thousands)	2017			2016		2015
GBW Joint Venture:
Revenue	$	253,436		$	373,490	$	349,849
Earnings (loss) from operations	$	(32,454	)	$	8,558	$	(1,160	)
Assets ⁽¹⁾	$	206,009		$	247,610	$	239,871
Depreciation and amortization	$	9,023		$	7,676	$	4,590
Capital expenditures	$	8,030		$	16,110	$	26,396

⁽¹⁾	Includes goodwill and intangible assets of $78.8 million, $93.4 million and $96.9 million as of August 31, 2017, 2016 and 2015, respectively. In 2017, GBW recorded a pre-tax goodwill impairment loss of $11.2 million which reduced the goodwill balance to $41.5 million.