SEGMENT AND GEOGRAPHIC AREA INFORMATION:

Segment Information

The Company presents the financial results of its nine operating regions as three reportable segments: North American Operations, Australian Operations and U.K./European Operations (as more fully described in Note 1, Business and Customers). The Company owns a 51.1% controlling interest in the Australian Operations. As such, the Company includes 100% of the revenues and expenses from its Australian Operations within its consolidated financial statements and reports a noncontrolling interest for MIRA's 48.9% equity ownership. Each of the Company's segments generates the following three categories of revenues from external customers: freight revenues, freight-related revenues and all other revenues (as more fully described in Note 2, Significant Accounting Policies). During the third quarter of 2017, the Company's Mountain West Region railroads were consolidated into the Company's Central and Pacific regions, and the Pacific Region was renamed the Western Region. The consolidation reduced the Company's number of operating regions from ten to nine. The Company's seven North American regions are aggregated into one reportable segment as a result of having similar economic and operating characteristics.

During 2017, the Company incurred restructuring costs of $10.2 million, including $9.4 million in its U.K./European Operations, $0.5 million in its North American Operations and $0.3 million in its Australian Operations. During 2016, the Company incurred restructuring costs of $8.2 million, including $6.5 million in its U.K./European Operations, $0.9 million in its North American Operations and $0.8 million in its Australian Operations.

The results of operations of the foreign entities are maintained in the respective local currency (the Australian dollar, the British pound, the Canadian dollar and the Euro) and then translated into United States dollars at the applicable exchange rates for inclusion in the consolidated financial statements. As a result, any appreciation or depreciation of these currencies against the United States dollar will impact the Company's results of operations.

The following table reflects the balance sheet exchange rates used to translate the foreign entities respective local currency balance sheet into United States dollars for the years ended December 31, 2017, and 2016.



	2017		2016
United States dollar per Australian dollar	$	0.78	$	0.72
United States dollar per British pound	$	1.35	$	1.23
United States dollar per Canadian dollar	$	0.80	$	0.74
United States dollar per Euro	$	1.20	$	1.06

The following table reflects the average exchange rates used to translate the foreign entities respective local currency results of operations into United States dollars for the years ended December 31, 2017, 2016 and 2015:



	2017		2016		2015
United States dollar per Australian dollar	$	0.77	$	0.74	$	0.75
United States dollar per British pound	$	1.29	$	1.36	$	1.53
United States dollar per Canadian dollar	$	0.77	$	0.76	$	0.78
United States dollar per Euro	$	1.13	$	1.11	$	1.11

The following tables set forth results from the Company's North American Operations segment, Australian Operations segment and U.K./European Operations segment for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands):



	December 31, 2017
	North American Operations			Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	961,356		$	254,653	$	337,866		$	1,553,875
Freight-related revenues	249,623			46,696		237,332			533,651
All other revenues	63,306			6,161		51,051			120,518
Total operating revenues	$	1,274,285		$	307,510	$	626,249		$	2,208,044
Operating income	$	303,882		$	77,251	$	17,329		$	398,462
Depreciation and amortization	$	158,006		$	61,142	$	31,309		$	250,457
Interest expense, net	$	38,547		$	54,718	$	11,944		$	105,209
(Benefit from)/provision for income taxes	$	(266,063	)	$	6,110	$	(1,306	)	$	(261,259	)
Cash expenditures for additions to property & equipment, net of grants from outside parties	$	166,685		$	16,076	$	25,462		$	208,223



	December 31, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	913,619	$	120,622	$	337,325		$	1,371,566
Freight-related revenues	258,922		95,776		181,661			536,359
All other revenues	64,223		6,188		23,191			93,602
Total operating revenues	$	1,236,764	$	222,586	$	542,177		$	2,001,527
Operating income/(loss)	$	319,551	$	4,810	$	(34,749	)	$	289,612
Depreciation and amortization	$	147,527	$	30,863	$	26,798		$	205,188
Interest expense, net	$	40,985	$	13,958	$	19,591		$	74,534
Provision for/(benefit from) income taxes	$	80,701	$	988	$	(7,294	)	$	74,395
Cash expenditures for additions to property & equipment, net of grants from outside parties	$	137,334	$	11,285	$	34,831		$	183,450



	December 31, 2015
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	949,028	$	146,850	$	304,669		$	1,400,547
Freight-related revenues	227,154		87,616		187,313			502,083
All other revenues	65,633		8,486		23,652			97,771
Total operating revenues	$	1,241,815	$	242,952	$	515,634		$	2,000,401
Operating income	$	297,486	$	54,842	$	31,933		$	384,261
Depreciation and amortization	$	141,814	$	27,425	$	19,296		$	188,535
Loss on settlement of foreign currency forward purchase contracts	$	16,374	$	2,312	$	—		$	18,686
Interest expense, net	$	39,651	$	8,976	$	17,965		$	66,592
Provision for/(benefit from) income taxes	$	69,552	$	12,890	$	(6,548	)	$	75,894
Cash expenditures for additions to property & equipment, net of grants from outside parties	$	266,548	$	31,179	$	32,035		$	329,762

The following table sets forth the cash and cash equivalents and property and equipment recorded in the consolidated balance sheets for each reportable segment as of December 31, 2017 and 2016 (dollars in thousands):



	December 31, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	13,584	$	52,407	$	14,481	$	80,472
Property and equipment, net	$	3,657,801	$	664,367	$	334,753	$	4,656,921



	December 31, 2016
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	10,137	$	9,213	$	12,969	$	32,319
Property and equipment, net	$	3,590,625	$	634,148	$	278,546	$	4,503,319

As noted above, the Company owns a 51.1% controlling interest in the Australian Operations. In accordance with the Australia Partnership agreement, the cash and cash equivalents of the Company's Australian Operations can be used for the following: 1) to make payments in the usual and regular course of business, 2) to pay down debt of the Partnership and 3) to make distributions to the Partners in proportion to their investments.

Geographic Area Information

Operating revenues for each geographic area for the years ended December 31, 2017, 2016 and 2015 were as follows (dollars in thousands):



	2017				2016				2015
	Amount		% of Total		Amount		% of Total		Amount		% of Total
Operating revenues:
United States	$	1,176,674	53.3	%	$	1,142,141	57.1	%	$	1,143,056	57.1	%
Non-United States:
Australia	$	307,510	13.9	%	$	222,586	11.1	%	$	242,952	12.1	%
Canada	97,611		4.4	%	94,623		4.7	%	98,759		5.0	%
U.K.	475,239		21.5	%	378,551		18.9	%	340,747		17.0	%
Netherlands	78,819		3.6	%	101,837		5.1	%	119,421		6.0	%
Other	72,191		3.3	%	61,789		3.1	%	55,466		2.8	%
Total Non-United States	$	1,031,370	46.7	%	$	859,386	42.9	%	$	857,345	42.9	%
Total operating revenues	$	2,208,044	100.0	%	$	2,001,527	100.0	%	$	2,000,401	100.0	%

Property and equipment for each geographic area as of December 31, 2017 and 2016 were as follows (dollars in thousands):



	2017				2016
	Amount		% of Total		Amount		% of Total
Property and equipment located in:
United States	$	3,404,204	73.1	%	$	3,353,296	74.4	%
Non-United States:
Australia	$	664,367	14.3	%	$	634,148	14.1	%
Canada	253,597		5.4	%	237,328		5.3	%
U.K.	317,495		6.8	%	264,954		5.9	%
Other	17,258		0.4	%	13,593		0.3	%
Total Non-United States	$	1,252,717	26.9	%	$	1,150,023	25.6	%
Total property and equipment, net	$	4,656,921	100.0	%	$	4,503,319	100.0	%