Business Segments

We report segment information based on the "management" approach defined in ASC 280, Segment Reporting. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments.

We have two reportable segments: (1) Motorized products and services and (2) Towable products and services. The Motorized segment includes all products that include a motorized chassis as well as other related manufactured products. The Towable segment includes all products that are not motorized and are generally towed by another vehicle.

We organize our business reporting on a product basis. Each reportable segment is managed separately to better align to our customers, distribution partners and the unique market dynamics of the product groups. We aggregate two operating segments into the Towable reporting segment based upon their similar products, customers, distribution methods, production processes and economic characteristics. The accounting policies of both reportable segments are the same and described in Note 1: Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the fiscal year ended August 26, 2017.

Subsequent to the acquisition of Grand Design in Fiscal 2017, management re-evaluated the manner in which corporate expenses were allocated to the reportable segments. A new corporate allocation policy was adopted in the first quarter of Fiscal 2018 that identifies shared costs and allocates them to the operating segments based on a cost driver most appropriate for the type of cost being allocated. For example, certain costs were allocated based on the financial size of the operating segment, while other costs, where appropriate, were allocated based on the headcount in the operating segments since headcount was deemed the appropriate driver for those types of expenses. Prior year segment information has been restated to conform to the current reporting segment presentation. All corporate expenses were allocated to the operating segments. Assets presented by reportable segment exclude certain corporate assets that cannot reasonably be allocated to the reportable segments. These unallocated corporate assets include cash and deferred tax assets.

We evaluate the performance of our reportable segments based on Adjusted EBITDA after corporate allocations. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization and other adjustments made in order to present comparable results from period to period. Examples of items excluded from Adjusted EBITDA include the postretirement health care benefit income resulting from the plan amendments over the past several years and the transaction costs related to our acquisition of Grand Design.

The following table shows information by reporting segment:



	Three Months Ended				Six Months Ended
(In thousands)	February 24, 2018		February 25, 2017		February 24, 2018		February 25, 2017
Net revenues
Motorized	$	202,001	$	198,936	$	392,357	$	394,061
Towable	266,358		171,574		526,023		221,757
Consolidated	$	468,359	$	370,510	$	918,380	$	615,818

Adjusted EBITDA
Motorized	$	4,044	$	10,838	$	7,199	$	21,954
Towable	35,338		18,233		67,594		21,796
Consolidated	$	39,382	$	29,071	$	74,793	$	43,750

Capital expenditures
Motorized	$	1,633	$	1,730	$	4,740	$	4,531
Towable	4,685		1,646		6,935		2,407
Consolidated	$	6,318	$	3,376	$	11,675	$	6,938

Total assets
Motorized	$	304,623	$	283,035	$	304,623	$	283,035
Towable	618,636		581,863		618,636		581,863
Unallocated corporate assets	42,067		29,823		$	42,067	$	29,823
Consolidated	$	965,326	$	894,721	$	965,326	$	894,721

Reconciliation of net income to consolidated Adjusted EBITDA:



	Three Months Ended					Six Months Ended
(In thousands)	February 24, 2018		February 25, 2017			February 24, 2018			February 25, 2017
Net income	$	22,088	$	15,278		$	40,046		$	27,016
Interest expense	4,918		5,178			9,699			6,306
Provision for income taxes	8,234		7,916			16,794			13,536
Depreciation	2,198		1,848			4,328			3,428
Amortization of intangible assets	1,933		10,367			3,988			12,418
EBITDA	39,371		40,587			74,855			62,704
Postretirement health care benefit income	—		(11,983		)	—			(24,796		)
Transaction costs	—		463			50			5,925
Non-operating expense (income)	11		4			(112		)	(83		)
Adjusted EBITDA	$	39,382	$	29,071		$	74,793		$	43,750