Operating Segment and Sales and Credit Concentrations

6 Months Ended

Jun. 30, 2014

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. Intersegment revenues are accounted for as if sales were to third parties.

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 from operations for manufacturing include an allocation of selling, general and administrative costs, as well as profit for railcars manufactured for the Company’s railcar 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 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 consists of railcar repair services provided through the Company's various repair facilities, including mini-shops and mobile units, offering a range of services from full to light repair. Earnings 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, 2014
Manufacturing	$	206,364	$	61,305		$	267,669		$	44,597		$	19,627		$	64,224
Railcar Leasing	13,885		—			13,885			7,399			(64		)	7,335
Railcar Services	17,260		52			17,312			3,116			10			3,126
Corporate/Eliminations	—		(61,357		)	(61,357		)	(3,262		)	(19,573		)	(22,835		)
Total Consolidated	$	237,509	$	—		$	237,509		$	51,850		$	—		$	51,850
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
Six Months Ended June 30, 2014
Manufacturing	$	360,327	$	125,334		$	485,661		$	78,252		$	39,357		$	117,609
Railcar Leasing	25,631		—			25,631			13,629			(33		)	13,596
Railcar Services	33,666		184			33,850			5,297			48			5,345
Corporate/Eliminations	—		(125,518		)	(125,518		)	(8,821		)	(39,372		)	(48,193		)
Total Consolidated	$	419,624	$	—		$	419,624		$	88,357		$	—		$	88,357
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

Total Assets	June 30, 2014		December 31, 2013
	(in thousands)
Manufacturing	$	306,654	$	298,951
Railcar Leasing	602,637		478,000
Railcar Services	55,020		52,150
Corporate/Eliminations	13,569		(3,492		)
Total Consolidated	$	977,880	$	825,609

Sales to Related Parties

As discussed in Note 15, 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,
	2014		2013		2014		2013
Manufacturing	38.4	%	12.5	%	31.5	%	23.4	%
Railcar Leasing	—	%	—	%	—	%	—	%
Railcar Services	2.0	%	2.9	%	2.1	%	2.6	%

Sales and Credit Concentration

Manufacturing revenues from customers that accounted for more than 10% 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 total consolidated revenues for the three and six months ended June 30, 2014 and 2013.

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2014		2013		2014		2013
Manufacturing revenues from significant customers	63.1	%	64.8	%	47.5	%	63.3	%

Manufacturing accounts receivable from customers that accounted for more than 10% 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 had no customers that accounted for more than 10% of the consolidated receivables balance as of June 30, 2014 and December 31, 2013.

	June 30, 2014		December 31, 2013
Manufacturing receivables from significant customers	26.3	%	22.6	%