Business Segments

In the fourth quarter of Fiscal 2018, we revised our segment presentation. We have five operating segments: 1) Winnebago motorhomes, 2) Winnebago towables, 3) Grand Design towables, 4) Winnebago specialty vehicles, and 5) Chris-Craft marine. We evaluate performance based on each operating segment's Adjusted EBITDA, as defined below, which excludes certain corporate administration expenses and non-operating income and expense.

Our two reportable segments include: 1) Motorhome (comprised of products that include a motorized chassis as well as other related manufactured products and services) and 2) Towable (comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services), which is an aggregation of the Winnebago towables and Grand Design towables operating segments.

The Corporate / All Other category includes the Winnebago specialty vehicles and Chris-Craft marine operating segments as well as expenses related to certain corporate administration expenses for the oversight of the enterprise. These expenses include items such as corporate leadership and administration costs. Previously, these expenses were allocated to each operating segment.

Identifiable assets of the reportable segments exclude general corporate assets, which principally consist of cash and cash equivalents and certain deferred tax balances. The general corporate assets are included in the Corporate / All Other category.

Prior period segment information has been reclassified to conform to the current reportable segment presentation. The reclassifications included removing the corporate administration expenses from both the Motorhome and Towable reportable segments and removing Winnebago specialty vehicles from the Motorhome reportable segment, as we began to dedicate leadership and focus on these operations separately from our Winnebago motorhomes operations.

Our chief operating decision maker ("CODM") is our Chief Executive Officer. Our CODM relies on internal management reporting that analyzes consolidated results to the net earnings level and operating segment's Adjusted EBITDA. Our CODM has ultimate responsibility for enterprise decisions. Our CODM determines, in particular, resource allocation for, and monitors the performance of, the consolidated enterprise, the Motorhome segment, and the Towable segment. The operating segments' management have responsibility for operating decisions, allocating resources, and assessing performance within their respective segments. The accounting policies of both reportable segments are the same and are described in Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 25, 2018.

We evaluate the performance of our reportable segments based on Adjusted EBITDA. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, restructuring expenses, and non-operating income.

The following table shows information by reportable segment:



	Three Months Ended						Six Months Ended
(in thousands)	February 23, 2019			February 24, 2018			February 23, 2019			February 24, 2018
Net Revenues
Motorhome	$	164,662		$	199,081		$	345,990		$	387,278
Towable	250,691			266,358			543,524			526,023
Corporate / All Other	17,337			2,920			36,824			5,079
Consolidated	$	432,690		$	468,359		$	926,338		$	918,380

Adjusted EBITDA
Motorhome	$	4,359		$	5,687		$	16,335		$	10,587
Towable	33,638			36,296			64,466			69,688
Corporate / All Other	(3,509		)	(2,601		)	(7,860		)	(5,482		)
Consolidated	$	34,488		$	39,382		$	72,941		$	74,793

Capital Expenditures
Motorhome	$	2,198		$	1,633		$	5,390		$	4,740
Towable	7,648			4,685			16,525			6,935
Corporate / All Other	749			—			1,451			—
Consolidated	$	10,595		$	6,318		$	23,366		$	11,675

(in thousands)							February 23, 2019			August 25, 2018
Total Assets
Motorhome							$	324,627		$	322,048
Towable							647,504			626,588
Corporate / All Other							106,005			103,169
Consolidated							$	1,078,136		$	1,051,805

Reconciliation of net income to consolidated Adjusted EBITDA:



	Three Months Ended					Six Months Ended
(in thousands)	February 23, 2019			February 24, 2018		February 23, 2019			February 24, 2018
Net income	$	21,598		$	22,088	$	43,759		$	40,046
Interest expense	4,346			4,918		8,847			9,699
Provision for income taxes	3,166			8,234		9,892			16,794
Depreciation	3,099			2,198		6,268			4,328
Amortization of intangible assets	2,267			1,933		4,926			3,988
EBITDA	34,476			39,371		73,692			74,855
Acquisition-related costs	—			—		—			50
Restructuring expenses	219			—		219			—
Non-operating (income) expense	(207		)	11		(970		)	(112		)
Adjusted EBITDA	$	34,488		$	39,382	$	72,941		$	74,793