Note 12 – Segment Information

Greenbrier operates in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture.

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 2017 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, 2018:


	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	511,827	$	13,948		$	525,775		$	63,185		$	3,415		$	66,600
Wheels & Parts		88,710		8,951			97,661			5,119			780			5,899
Leasing & Services		28,799		4,365			33,164			16,114			3,794			19,908
Eliminations		—		(27,264	)		(27,264	)		—			(7,989	)		(7,989	)
Corporate		—		—			—			(23,548	)		—			(23,548	)

	$	629,336	$	—		$	629,336		$	60,870		$	—		$	60,870


For the six months ended February 28, 2018:

	Revenue								Earnings (loss) from operations
(In thousands)	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	963,312	$	30,752		$	994,064		$	116,154		$	7,601		$	123,755
Wheels & Parts		166,721		16,683			183,404			7,537			1,528			9,065
Leasing & Services		58,838		5,970			64,808			44,304			5,166			49,470
Eliminations		—		(53,405	)		(53,405	)		—			(14,295	)		(14,295	)
Corporate		—		—			—			(45,683	)		—			(45,683	)

	$	1,188,871	$	—		$	1,188,871		$	122,312		$	—		$	122,312


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


	Total assets
	February 28,		August 31,
(In thousands)	2018		2017
Manufacturing	$	911,505	$	914,450
Wheels & Parts		260,077		236,315
Leasing & Services		565,626		535,323
Unallocated		694,847		711,617

	$	2,432,055	$	2,397,705

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


	Three Months Ended February 28,				Six Months Ended February 28,
(In thousands)	2018		2017		2018		2017
Earnings from operations	$	60,870	$	81,520	$	122,312	$	154,180
Interest and foreign exchange		7,029		5,673		14,049		7,397

Earnings before income tax and earnings (loss) from unconsolidated affiliates	$	53,841	$	75,847	$	108,263	$	146,783

The Company has a 50% ownership interest in the GBW Joint Venture and accounts for its interest under the equity method of accounting. The Company’s 50% share of the results of operations are included in Earnings (loss) from unconsolidated affiliates in the Consolidated Statement of Income and its investment is included in Investments in unconsolidated affiliates in the Consolidated Balance Sheet. The GBW Joint Venture is Greenbrier’s fourth reportable segment. Information included in the tables below represent totals for GBW Railcar Services LLC (GBW) rather than Greenbrier’s 50% share, as this is how performance and resource allocation is evaluated.


	Three Months Ended February 28,						Six Months Ended February 28,
(In thousands)	2018			2017			2018			2017
Revenue	$	62,685		$	64,249		$	120,685		$	134,502
Loss from operations	$	(5,460	)	$	(6,901	)	$	(11,204	)	$	(11,463	)

	Total Assets
	February 28, 2018			August 31, 2017
GBW ⁽¹⁾	$	208,522		$	206,009

⁽¹⁾	Includes goodwill and intangible assets of $77.5 million and $78.8 million as of February 28, 2018 and August 31, 2017.