Operating Segments and Sales, Geographic and Credit Concentrations

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Operating Segments and Sales, Geographic and Credit Concentrations

Operating Segments and Sales, Geographic 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 railcar 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 repair shops and mobile repair 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									Capital Expenditures		Depreciation & Amortization
	External		Intersegment			Total			External			Intersegment			Total
	(in thousands)
For the Year Ended December 31, 2014
Manufacturing	$	600,326	$	419,295		$	1,019,621		$	136,918		$	126,019		$	262,937		$	13,298	$	14,472
Railcar leasing	65,108		—			65,108			36,140			(50		)	36,090			307,820		16,454
Railcar services	67,572		270			67,842			10,299			67			10,366			4,672		2,609
Corporate/Eliminations	—		(419,565		)	(419,565		)	(13,299		)	(126,036		)	(139,335		)	1,960		677
Total Consolidated	$	733,006	$	—		$	733,006		$	170,058		$	—		$	170,058		$	327,750	$	34,212
For the Year Ended December 31, 2013
Manufacturing	$	646,100	$	217,922		$	864,022		$	135,454		$	54,621		$	190,075		$	12,168	$	14,504
Railcar leasing	31,871		—			31,871			14,836			40			14,876			162,068		9,799
Railcar services	72,621		233			72,854			14,372			(47		)	14,325			5,925		2,506
Corporate/Eliminations	—		(218,155		)	(218,155		)	(13,755		)	(54,614		)	(68,369		)	3,932		903
Total Consolidated	$	750,592	$	—		$	750,592		$	150,907		$	—		$	150,907		$	184,093	$	27,712
For the Year Ended December 31, 2012
Manufacturing	$	633,547	$	219,499		$	853,046		$	120,623		$	35,362		$	155,985		$	16,856	$	15,239
Railcar leasing	13,444		—			13,444			7,371			29			7,400			185,918		4,424
Railcar services	64,732		495			65,227			10,718			(99		)	10,619			965		2,903
Corporate/Eliminations	—		(219,994		)	(219,994		)	(17,292		)	(35,292		)	(52,584		)	2,141		2,244
Total Consolidated	$	711,723	$	—		$	711,723		$	121,420		$	—		$	121,420		$	205,880	$	24,810

Total Assets

	December 31,
	2014			2013			2012
	(in thousands)
Manufacturing	$	356,720		$	298,951		$	329,346
Railcar leasing	908,010			478,000			263,228
Railcar services	52,639			52,150			49,060
Corporate/Eliminations	(124,960		)	(3,492		)	168,124
Total Consolidated	$	1,192,409		$	825,609		$	809,758

Geographic Concentrations

The Company's operations are primarily located in the United States. The Company's foreign sales revenues were, in the aggregate, 4.2%, 2.0% and 0.9% of total consolidated revenues for 2014, 2013 and 2012, respectively. Total foreign assets were, in the aggregate, 1.0% and 1.5% of total consolidated assets as of December 31, 2014 and 2013, respectively.

Sales to Related Parties

As discussed in Note 19, 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.

	December 31,
	2014		2013		2012
Manufacturing	33.5	%	33.4	%	14.5	%
Railcar Leasing	—	%	—	%	—	%
Railcar Services	2.6	%	2.3	%	3.0	%

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 years ended December 31, 2014, 2013 and 2012.

	December 31,
	2014		2013		2012
IELP Entities	31.0	%	31.7	%	14.5	%
CIT Group, Inc.	11.9	%	24.4	%	49.4	%

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 December 31, 2014 and 2013.

	December 31,
	2014		2013
Manufacturing receivables from significant customers	60.5	%	22.6	%