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						Nine Months Ended
(in thousands)	May 25, 2019			May 26, 2018			May 25, 2019			May 26, 2018
Net Revenues
Motorhome	$	160,239		$	244,870		$	506,229		$	632,148
Towable	346,811			313,016			890,335			839,039
Corporate / All Other	21,890			4,375			58,714			9,454
Consolidated	$	528,940		$	562,261		$	1,455,278		$	1,480,641

Adjusted EBITDA
Motorhome	$	381		$	11,677		$	16,716		$	22,264
Towable	57,172			45,378			121,638			115,066
Corporate / All Other	(1,679		)	(3,694		)	(9,539		)	(9,176		)
Consolidated	$	55,874		$	53,361		$	128,815		$	128,154

Capital Expenditures
Motorhome	$	2,543		$	2,643		$	7,933		$	7,383
Towable	4,810			3,805			21,335			10,740
Corporate / All Other	962			—			2,413			—
Consolidated	$	8,315		$	6,448		$	31,681		$	18,123

(in thousands)							May 25, 2019			August 25, 2018
Total Assets
Motorhome							$	336,334		$	322,048
Towable							637,371			626,588
Corporate / All Other							109,498			103,169
Consolidated							$	1,083,203		$	1,051,805

Reconciliation of net income to consolidated Adjusted EBITDA:



	Three Months Ended						Nine Months Ended
(in thousands)	May 25, 2019			May 26, 2018			May 25, 2019			May 26, 2018
Net income	$	36,171		$	32,521		$	79,930		$	72,567
Interest expense	4,446			4,172			13,293			13,871
Provision for income taxes	8,717			11,684			18,609			28,478
Depreciation	3,520			2,351			9,788			6,679
Amortization of intangible assets	2,278			1,933			7,204			5,921
EBITDA	55,132			52,661			128,824			127,516
Acquisition-related costs	—			800			—			850
Restructuring expenses	1,102			—			1,321			—
Non-operating income	(360		)	(100		)	(1,330		)	(212		)
Adjusted EBITDA	$	55,874		$	53,361		$	128,815		$	128,154