Operating Segment and Sales and Credit Concentrations

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Operating Segment and Sales and Credit Concentrations

Operating Segment and Sales and Credit Concentrations

ARI operates in three reportable segments: manufacturing, railcar leasing and railcar services. These reportable segments are organized based upon a combination of the products and services offered and performance is evaluated based on revenues and segment earnings (loss) from operations.

Manufacturing

Manufacturing consists of railcar manufacturing and railcar and industrial component manufacturing. Intersegment revenues are determined based on an estimated fair market value of the railcars manufactured for the Company’s railcar leasing segment, as if such railcars had been sold to a third party. Revenues for railcars manufactured for the Company’s leasing segment are not recognized in consolidated revenues as railcar sales, but rather lease revenues are recognized over the term of the lease. Earnings (loss) from operations for manufacturing include an allocation of selling, general and administrative costs, as well as profit for railcars manufactured for the Company’s leasing segment based on revenue determined as described above.

Railcar Leasing

Railcar leasing consists of railcars manufactured by the Company and leased to third parties under operating leases. Earnings (loss) from operations for railcar leasing include an allocation of selling, general and administrative costs and also reflect origination fees paid to ARL associated with originating the lease to the Company’s leasing customers. The origination fees represent a percentage of the revenues from the lease over its initial term and are paid up front.

Railcar Services

Railcar services consist of railcar repair services, engineering and field services, and fleet management services. Earnings (loss) from operations for railcar services include an allocation of selling, general and administrative costs.

Segment Financial Results

The information in the following table is derived from the segments’ internal financial reports used by the Company’s management for purposes of assessing segment performance and for making decisions about allocation of resources.

	Revenues								Earnings (Loss) from Operations
	External		Intersegment			Total			External			Intersegment			Total
	(in thousands)
Three Months Ended June 30, 2013
Manufacturing	$	132,242	$	45,083		$	177,325		$	32,780		$	10,126		$	42,906
Railcar Leasing	7,527		—			7,527			3,645			8			3,653
Railcar Services	19,635		46			19,681			4,083			(41		)	4,042
Corporate/Eliminations	—		(45,129		)	(45,129		)	(639		)	(10,093		)	(10,732		)
Total Consolidated	$	159,404	$	—		$	159,404		$	39,869		$	—		$	39,869
Three Months Ended June 30, 2012
Manufacturing	$	134,748	$	84,540		$	219,288		$	26,334		$	14,346		$	40,680
Railcar Leasing	2,668		—			2,668			1,021			7			1,028
Railcar Services	16,798		191			16,989			3,396			(44		)	3,352
Corporate/Eliminations	—		(84,731		)	(84,731		)	(4,791		)	(14,309		)	(19,100		)
Total Consolidated	$	154,214	$	—		$	154,214		$	25,960		$	—		$	25,960
Six Months Ended June 30, 2013
Manufacturing	$	305,217	$	100,491		$	405,708		$	66,759		$	19,908		$	86,667
Railcar Leasing	14,070		—			14,070			5,808			12			5,820
Railcar Services	35,227		95			35,322			6,388			2			6,390
Corporate/Eliminations	—		(100,586		)	(100,586		)	(7,857		)	(19,922		)	(27,779		)
Total Consolidated	$	354,514	$	—		$	354,514		$	71,098		$	—		$	71,098
Six Months Ended June 30, 2012
Manufacturing	$	299,061	$	132,089		$	431,150		$	51,486		$	23,268		$	74,754
Railcar Leasing	4,048		—			4,048			1,617			13			1,630
Railcar Services	32,704		220			32,924			5,739			(50		)	5,689
Corporate/Eliminations	—		(132,309		)	(132,309		)	(9,077		)	(23,231		)	(32,308		)
Total Consolidated	$	335,813	$	—		$	335,813		$	49,765		$	—		$	49,765

Total Assets	June 30, 2013		December 31, 2012
	(in thousands)
Manufacturing	$	318,352	$	329,346
Railcar Leasing	362,352		263,228
Railcar Services	46,163		49,060
Corporate/Eliminations	31,806		168,124
Total Consolidated	$	758,673	$	809,758

Sales to Related Parties

As discussed in Note 17, ARI has numerous arrangements with related parties. As a result, from time to time, ARI offers its products and services to affiliates at terms and pricing no less favorable to ARI than the terms and pricing provided to unaffiliated third parties. Below is a summary of revenue from affiliates for each operating segment reflected as a percentage of total consolidated revenues.

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2013		2012		2013		2012
Manufacturing	12.5	%	7.1	%	23.4	%	3.2	%
Railcar Leasing	—	%	—	%	—	%	—	%
Railcar Services	2.9	%	3.8	%	2.6	%	3.3	%

Sales and Credit Concentration

Manufacturing revenues from customers that accounted for more than 10.0% of total consolidated revenues are outlined in the table below. The railcar leasing and railcar services segments had no customers that accounted for more than 10% of the consolidated revenues for the three and six months ended June 30, 2013 and 2012.

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2013		2012		2013		2012
Manufacturing revenues from significant customers	64.8	%	54.3	%	63.3	%	56.1	%

Manufacturing accounts receivable from customers that accounted for more than 10.0% of consolidated receivables (including accounts receivable, net and accounts receivable, due from related parties) are outlined in the table below. The railcar leasing and railcar services segments also had no customers that accounted for more than 10% of the consolidated receivables balance as of June 30, 2013 and December 31, 2012.

	June 30, 2013		December 31, 2012
Manufacturing receivables from significant customers	40.9	%	35.1	%