Segment Information

3 Months Ended

Mar. 31, 2020

We report our operating results in three principal business segments: (1) the Railcar Leasing and Management Services Group, which owns and operates a fleet of railcars and provides third-party fleet leasing, management, and administrative services; (2) the Rail Products Group, which manufactures and sells railcars and related parts and components, and provides railcar maintenance and modification services; and (3) All Other, which includes our highway products business and legal, environmental, and maintenance costs associated with non-operating facilities. In connection with the implementation of our rail-focused strategy, in the first quarter of 2020, we realigned certain activities previously reported in the All Other segment to now be presented within the Rail Products Group. The prior period results have been recast to reflect these changes and present results on a comparable basis.

Gains and losses from the sale of property, plant, and equipment are included in the operating profit of each respective segment. Our Chief Operating Decision Maker ("CODM") regularly reviews the operating results of our reportable segments in order to assess performance and allocate resources. Our CODM does not consider restructuring activities when evaluating segment operating results; therefore, restructuring activities are not allocated to segment profit or loss.

Sales and related net profits ("deferred profit") from the Rail Products Group to the Leasing Group are recorded in the Rail Products Group and eliminated in consolidation and are reflected in "Eliminations — Lease Subsidiary" in the tables below. Sales between these groups are recorded at prices comparable to those charged to external customers, taking into consideration quantity, features, and production demand. Amortization of deferred profit on railcars sold to the Leasing Group is included in the operating profit of the Leasing Group, resulting in the recognition of depreciation expense based on our original manufacturing cost of the railcars. Sales of railcars from the lease fleet are included in the Leasing Group, with related gains and losses computed based on the net book value of the original manufacturing cost of the railcars.

The financial information for these segments is shown in the tables below (in millions). We operate principally in North America.



	Three Months Ended March 31, 2020
	Railcar Leasing and Management Services Group		Rail Products Group		All Other		Corporate		Eliminations — Lease Subsidiary			Eliminations — Other			Consolidated Total
External Revenue	$	236.1	$	317.2	$	61.9	$	—	$	—		$	—		$	615.2
Intersegment Revenue	0.2		192.2		1.5		—		(190.4		)	(3.5		)	—
Total Revenues	$	236.3	$	509.4	$	63.4	$	—	$	(190.4	)	$	(3.5	)	$	615.2



	Three Months Ended March 31, 2019
	Railcar Leasing and Management Services Group		Rail Products Group		All Other		Corporate		Eliminations — Lease Subsidiary			Eliminations — Other			Consolidated Total
External Revenue	$	200.2	$	345.6	$	59.0	$	—	$	—		$	—		$	604.8
Intersegment Revenue	0.2		282.3		3.1		—		(270.1		)	(15.5		)	—
Total Revenues	$	200.4	$	627.9	$	62.1	$	—	$	(270.1	)	$	(15.5	)	$	604.8



	Three Months Ended March 31,
	2020			2019
	(in millions)
Operating profit:
Railcar Leasing and Management Services Group	$	92.9		$	85.8
Rail Products Group	25.1			47.1
All Other	9.3			10.1
Segment Totals before Eliminations, Corporate Expenses, and Restructuring activities	127.3			143.0
Corporate	(28.1		)	(23.6		)
Restructuring activities, net	(5.5		)	—
Eliminations – Lease Subsidiary	(19.9		)	(27.2		)
Eliminations – Other	(0.8		)	(0.4		)
Consolidated operating profit	$	73.0		$	91.8
Other (income) expense	58.1			51.7
Provision (benefit) for income taxes	(147.6		)	8.9
Loss from discontinued operations, net of income taxes	(0.2		)	(1.1		)
Net income	$	162.3		$	30.1