UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,Washington, D.C. 20549

FORM10-Q

(Mark One)

For the quarterly period ended September 3, 2017June 30, 2018

or

For the transition period from                    to                    

Commission file number:1-47141-04714

SKYLINE CORPORATIONSkyline Champion Corporation

(Exact name of registrant as specified in its charter)

(574)294-6521

(Registrant’s telephone number, including area code: (574)294-6521code)

Skyline Corporation

Fiscal year ended May 31, 2017

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    YesNo  ☐  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    YesNo  ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).    Yes  ☐    YesNo  ☒  No

Indicate the numberAs of August 7, 2018, 56,475,352 shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.Skyline Champion Corporation’s Common Stock, $0.0277 par value, were outstanding.

SKYLINE CHAMPION CORPORATION

FORM10-Q

June  30, 2018

TABLE OF CONTENTS

FORM 10-Q

INDEX

i

EXPLANATORY NOTE

As previously reported by Skyline Champion Corporation (formerly known as Skyline Corporation), an Indiana corporation (the “Company”), in its Current Report on Form8-K filed on June 6, 2018, on June 1, 2018, the Company and Champion Enterprises Holdings, LLC (“Champion Holdings”) completed the transactions contemplated by the Share Contribution & Exchange Agreement (the “Exchange Agreement”), dated as of January 5, 2018, by and between the Company and Champion Holdings. Under the Exchange Agreement, (i) Champion Holdings contributed to the Company all of the issued and outstanding equity interests of each of Champion Holdings’ wholly-owned operating subsidiaries, Champion Home Builders, Inc., a Delaware corporation (“CHB”), and CHB International B.V., a Dutch private limited liability company (“CIBV”) (the shares of stock of CHB and CIBV contributed to the Company, the “Contributed Shares”), and (ii) in exchange for the Contributed Shares, the Company issued to the members of Champion Holdings, in the aggregate, 47,752,008 shares of the Company common stock, $0.0277 par value per share (“Skyline Common Stock”) (such issuance, the “Shares Issuance”). Immediately following the Shares Issuance, the members of Champion Holdings collectively held 84.5%, and the Company’spre-closing shareholders collectively held 15.5%, of the issued and outstanding Skyline Common Stock on a fully-diluted basis. The contribution of the Contributed Shares by Champion Holdings to Skyline, and the Shares Issuance by the Company to the members of Champion Holdings are collectively referred to herein as the “Exchange.”

The Exchange was treated as a purchase of the Company by Champion Holdings for accounting and financial reporting purposes. As a result, the financial results for the three months ended June 30, 2018 comprise the results of only Champion Holdings through June 1, 2018 and the Company, after giving effect to the Exchange, from June 1, 2018 through June 30, 2018. All periods prior to June 1, 2018 are comprised solely of the results of Champion Holdings.

All Company earnings per share and common share outstanding amounts in this Quarterly Report on Form10-Q have been calculated as if the Shares Issuance took place on April 2, 2017, at the exchange ratio, as defined in the Exchange Agreement.

ii

PART I— - FINANCIAL INFORMATION

Item 1. Financial Statements.

Skyline Champion Corporation and Subsidiary Companies

Condensed Consolidated Balance Sheets

(Dollars and shares in thousands, except share and per share amounts)

See accompanying Notes to Consolidated Financial Statements.

Skyline Champion Corporation and Subsidiary Companies

Condensed Consolidated Balance Sheets — (Continued)Statements of Comprehensive Income (Loss)

(Dollars and shares in thousands, except share and per share amounts)

The accompanying notes are an integral part of the consolidated financial statements.

2

Item 1. Financial Statements — (Continued).

Skyline Corporation and Subsidiary Companies

Consolidated Income Statements

For the Three-Months Ended September 3, 2017 and August 31, 2016

(Dollars in thousands, except share and per share amounts)

TheSee accompanying notes are an integral part of the consolidated financial statements.Notes to Consolidated Financial Statements.

Skyline Champion Corporation and Subsidiary Companies

Condensed Consolidated Statements of Cash Flows

For the Three-Months Ended September 3, 2017 and August 31, 2016

(Dollars in thousands)

TheSee accompanying notes are an integral partNotes to Consolidated Financial Statements.

Skyline Champion Corporation

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited, dollars and shares in thousands)

Components of accumulated other comprehensive loss consisted of the consolidated financial statements.following:

4See accompanying Notes to Consolidated Financial Statements.

Skyline Champion Corporation and Subsidiary Companies

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 Basis of Presentation

The accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position as of September 3, 2017, in addition to the consolidated results of operations and cash flows for the three-month periods ended September 3, 2017 and August 31, 2016. Due to the seasonal nature of the Corporation’s business, interim results are not necessarily indicative of results for the entire year. Effective June 1, 2017, theSkyline Champion Corporation adopted a52-53 week fiscal year ending on the Sunday which is nearest to the last day of May in each year. Consequently, there were 95 days and 92 days in the three months ended September 3, 2017 and August 31, 2016, respectively.

The unaudited interim consolidated financial statements included herein(the “Company”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reportingQuarterly Reports on Form10-Q.10-Q and Article 10 of SEC RegulationS-X. Accordingly, certain information and footnote disclosures normally accompanying the annualincluded in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations.

The consolidated financial statements have been omitted. The auditedinclude the accounts of the Company and its majority-owned subsidiaries after elimination of intercompany balances and transactions. In the opinion of management, these statements include all of the normal recurring adjustments necessary to fairly state the Company’s consolidated balance sheet asresults of May 31, 2017,operations, cash flows and the unaudited interimfinancial position. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes theretoto the audited consolidated financial statements included as an exhibit to the Company’s Current Report on Form8-K/A, which was filed with the SEC on June 14, 2018.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Corporation’s latest annual reportconsolidated financial statements and the accompanying notes thereto. Actual results could differ from those estimates. The condensed consolidated statements of comprehensive income (loss) and condensed consolidated statements of cash flows for the interim periods are not necessarily indicative of the results of operations or cash flows for the full year.

The Company’s fiscal year is a52- or53-week period that ends on Form10-K.the Saturday nearest to March 31. The Company’s current fiscal year will end on March 30, 2019. The three months ended June 30, 2018 and July 1, 2017 each included 13 weeks.

The Company is a leading producer of factory-built housing in the United States (“U.S.”) and Canada and serves as a complete solutions provider across complementary and vertically integrated businesses including manufactured construction, company-owned retail locations, and transportation logistics services. The Company is the second largest factory-built solutions provider in North America based on revenue and markets its homes under several nationally recognized brand names including Skyline Homes, Champion Homes, Redman Homes, Dutch Housing, Excel Homes, Silvercrest, Titan Homes, Moduline, and SRI Homes. As of June 30, 2018, the Company operates 31 manufacturing facilities throughout the U.S. and five manufacturing facilities in western Canada that primarily construct factory-built, timber-framed manufactured and modular houses that are sold primarily to independent retailers and builders/developers, including manufactured home community operators. The Company’s retail operations consist of 21 sales centers that sell manufactured homes to consumers primarily in the southern U.S. The Company’s transportation business primarily engages independent owners/drivers to transport manufactured homes and recreational vehicles throughout the U.S. and Canada.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting pronouncementsAccounting Standards Update (“ASU”)2016-02,Leases—(Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the consolidated balance sheet a liability to make lease payments (the lease liability) and an asset representing its right to use the underlying asset for the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous requirements. This ASU is effective for fiscal years beginning after December 31, 2018, or the Company’s fiscal year commencing March 31, 2019. Modified retrospective application and early adoption is permitted. The Company is currently assessing the impact the adoption of this standard will have on its operations and its consolidated financial statements.

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

In May 2014,January 2017, the FASB issued ASUNo. 2014-09,2017-04,Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard simplifies the accounting for goodwill impairments and allows a goodwill impairment charge to be based on the amount of a reporting unit’s carrying value in excess of its fair value. This eliminates the requirement to calculate the implied fair value of goodwill or what is known as “Step 2” under the current guidance. This guidance is effective for annual and interim periods of public entities beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the potential impact this ASU will have on its consolidated financial statements.

There were no other accounting standards recently issued that are expected to have a material impact on our financial position or results of operations.

On January 5, 2018, Champion Holdings and the Company entered into the Exchange Agreement pursuant to which the two companies agreed to combine their operations. The Exchange was completed on June 1, 2018 and was accounted for as a reverse acquisition under the acquisition method of accounting as provided by the FASB Accounting Standards Codification 805,Business Combinations (“ASC 805”). Champion Holdings was determined to be the acquirer for accounting and financial reporting purposes. The assets acquired and liabilities assumed by Champion Holdings as a result of the Exchange were recorded at their respective fair values and added to the carrying value of Champion Holdings existing assets and liabilities. As Champion Holdings is the accounting acquirer, reported financial results for Skyline Champion Corporation for the three months ended June 30, 2018 comprise the results of only Champion Holdings through June 1, 2018 and the Company, after giving effect to the Exchange, from June 1, 2018 through June 30, 2018. All fiscal periods prior to June 1, 2018 are comprised solely of the results of Champion Holdings.

The purchase price of the acquisition was determined with reference to the value of equity (common stock) of the Company based on the closing price on June 1, 2018 of $33.39 per share. The purchase price has been allocated to the assets acquired and liabilities assumed using their estimated fair values at June 1, 2018, the closing of the Exchange. The purchase price and its allocation are preliminary and have been used to prepare the accompanying condensed consolidated financial statements. The final purchase price and its allocation will be determined when the Company has completed the necessary valuations and calculations. The final allocation could differ materially from the preliminary allocation used in the accompanying condensed consolidated financial statements. The final allocation may include (i) changes in fair values of property, plant and equipment, (ii) changes in allocations to intangible assets, and (iii) other changes to the fair value assigned to the assets and liabilities.

The preliminary estimated purchase price was allocated as follows:

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

The preliminary estimated goodwill is primarily attributable to expected synergies from the combination of the companies, including, but not limited to, expected cost synergies through procurement activities and operational improvements through sharing of best practices. Goodwill, which is not deductible for income tax purposes, was allocated to the U.S. Factory-built Housing reporting unit.

Cash, trade receivables, other assets, accounts payable, accrued and other liabilities were generally stated at historical carrying values given the short-term nature of these assets and liabilities. Intangible assets consist primarily of provisional amounts recognized for the fair value of customer relationships and trade names and were based on an independent appraisal. Customer-based assets include the Company’s established relationships with its customers and the ability of those customers to generate future economic profits for the Company. The Company estimates that these intangible assets have a weighted average useful life of ten years.

Fair value estimates of property, plant and equipment were based on independent appraisals, giving consideration to the highest and best use of the assets. Key assumptions used in the appraisals were based on a combination of market and cost approaches, as appropriate. For further information on acquired assets measured at fair value, see Note 6, Goodwill and Intangible Assets.

The Company allocated a portion of the preliminary estimated purchase price to certain realizable deferred tax assets totaling $28.4 million. Deferred tax assets are primarily federal and state net operating loss carryforwards and credits offset by a valuation allowance for certain state net operating loss carryforwards that are not expected to be realized. The deferred tax assets are offset by deferred tax liabilities of $18.7 million resulting from the purchase price allocationstep-up in fair value that exceed the historical tax basis.

Included in the Company’s results of operations for the three months ended June 30, 2018, are results from the business acquired as follows:

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

On April 1, 2018, the Company adopted ASU2016-18,Restricted Cash. The standard requires that changes in restricted cash be reflected with changes in cash and cash equivalents on the statement of cash flows and that a reconciliation between cash and cash equivalents presented on the balance sheet and cash, cash equivalents and restricted cash presented on the statement of cash flows be provided. The provisions of the standard were applied retrospectively, and the effects of adoption were not significant.

A reconciliation of cash, cash equivalents and restricted cash was as follows:

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

The components of property, plant, and equipment were as follows:

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

The components of other current liabilities were as follows:

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

The New Credit Agreement matures on June 5, 2023 and has no scheduled amortization. The interest rate under the New Credit Agreement adjusts based on the first lien net leverage of the Company. For the fiscal quarters ending September 2018 and December 2018, the annual interest rate is the London Interbank Offered Rate (“LIBOR”) plus 1.75% or an alternative base rate described in the New Credit Agreement (“ABR”) plus 0.75%, at the election of the Company. Thereafter, the interest rate adjusts based on the first lien net leverage from a high of LIBOR plus 2.25% and ABR plus 1.25% when first lien net leverage is equal to or greater than 2.00:1.00, to a low of LIBOR plus 1.50% and ABR plus 0.50% when first lien net leverage is below 0.50:1.00. In addition, the Company is obligated to pay a commitment fee ranging between 0.40% and 0.25% (depending on first lien net leverage) in respect of unused commitments under the New Credit Agreement. At June 30, 2018, and for the period between June 5, 2018 and June 30, 2018, the interest rate on borrowings under the New Credit Agreement was 4.1%.

Prior to entering into the New Credit Agreement, the Company had outstanding Term Loans of $46.9 million under a prior credit agreement with lenders that primarily included the Company’s equity holders and certain of their affiliates. The weighted average interest rate on the Term Loans, priced using LIBOR plus an applicable margin, was approximately 7.4% and 6.5% for the period outstanding during the three months ended June 5, 2018 and July 1, 2017, respectively.

Also, prior to entering into the New Credit Agreement, the Company provided letters of credit issued by a commercial bank under a separate stand-alone facility collateralized with restricted cash of 101% of the issued letters of credit. At June 30, 2018, letters of credit issued under the stand-alone facility totaled $22.6 million. Subsequent to entering into the New Credit Agreement, the Company is no longer required to back those letters of credit with restricted cash, rather they are supported by asub-facility under the New Credit Agreement.

Obligations under industrial revenue bonds are supported by letters of credit and bear interest based on a municipal bond index rate. The interest rate at June 30, 2018, including related costs and fees, was approximately 5.0%. The weighted average interest rate, including related costs and fees, for the three months ended June 30, 2018 and July 1, 2017 was approximately 3.7% and 2.4%, respectively. The industrial revenue bonds requirelump-sum payments of principal upon maturity in 2029.

The New Credit Agreement contains covenants that restrict the amount of additional debt, liens and certain payments, including equity buybacks, investments, dispositions, mergers and consolidations, among other restrictions as defined. The Company was in compliance with all covenants of the New Credit Agreement as of June 30, 2018.

Floor Plan Payable

The Company’s retail operations utilize floor plan financing to fund the acquisition of manufactured homes for display or resale. At June 30, 2018 and March 31, 2018, the Company had outstanding borrowings on floor plan financing agreements of $29.5 million and $29.8 million, respectively. Total available borrowings under the agreements as of June 30, 2018 were $43.0 million. Borrowings are secured by the homes and are required to be repaid when the Company sells the home to a customer. The weighted average interest rate on floor plan payables was 5.9% and 6.0% at June 30, 2018 and March 31, 2018, respectively.

In May 2014, the FASB issued an amendment on revenue recognition. The amendment created Topic 606,Revenue from Contracts with Customers, (Topic 66) (“ASC 606”) and supersedes the revenue recognition requirements in ASC Topic 605,Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendment supersedes the cost guidance in Subtopic605-35,Revenue Recognition - Construction-Type and Production-Type Contracts, and created new Subtopic340-40,Other Assets and Deferred Costs - Contracts with Customers. The core principal of ASU2014-09 is thatUnder ASC 606 an entity should recognizerecognizes revenue to depictin a manner that reflects the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

On April 1, 2018, the Company adopted ASC 606 using the modified retrospective method as applied to customer contracts that were not completed as of March 31, 2018. As a public entity, this guidance is effectiveresult, financial information for annual reporting periods beginning after December 15, 2016, including interimMarch 31, 2018, are presented in accordance with ASC 606 while prior reporting periods within that reporting period. Early application is permitted. Subsequentare not adjusted and continue to be reported in accordance with the Company’s revenue recognition policies prior to the issuanceadoption of ASUNo. 2014-09, FASB issued ASUNo. 2015-14,ASC 606. There was not a material impact to revenues as a result of applying ASC 606 for the three months ended June 30, 2018 and the effects of adoption to our business processes, systems or internal controls were not significant.

The Company’s revenue is recognized when performance obligations under the terms of a contract are satisfied which deferredgenerally occurs with the effectivetransfer of control of our products. The Company enters into contracts with its customers to provide manufactured homes, modular homes, park models, commercial structures and transportation services. Generally, the Company’s contracts do not provide for a specified quantity of products and may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been minimal. The Company receives signed sales quotes from its customers, which provide the terms for a specific home, including price. The Company also has agreements with certain customers that provide for certain variable considerations such as volume discounts that are deducted from the contract price and accrued at the time of sale. In certain situations, the Company may receive payment in advance of completion of its contractual obligations. In these situations, the arising contract liability is classified within customer deposits and receipts in excess of revenues. Following the receipt of the customer deposit, the Company’s performance obligation is completed within a twelve-month period.

For sales to independent retailers and builders/developers, revenue is recognized at a point in time when wholesale floor plan financing or retailer credit approval has been received, the home is shipped, and title is transferred which occurs when the Company has satisfied its contractual obligations and the control of its products has been transferred. The Company does not have an enforceable right to payment prior to shipment. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for those products. The Company’s customers pay for products received in accordance with payment terms that are customary within the industry. As is customary in the factory-built housing industry, a significant portion of the Company’s sales to independent retailers are financed under floor plan financing programs with certain third-party lenders. Floor plan financing arrangements are generally identified prior to shipment of products and payment for sales financed under floor plan programs is generally received 5 to 10 business days from the date of ASU2014-09invoice.

For retail sales to consumers from Company-owned retail sales centers, for which substantially all sales are of Company manufactured products, revenue is recognized when the home has been delivered, set up and accepted by one year. In addition, FASB subsequently issued ASU2016-08,Principal versus Agent Considerations,ASU2016-10,Identifying Performance Obligationsthe consumer, title has transferred and Licensing, ASU2016-11,Rescission of SEC Guidance Because of Accounting Standards Updates2014-09 and2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting, and ASU2016-12,Narrow-Scope Improvements and Practical Expedients.The Corporation’s revenue comes substantiallyeither funds have been received from the salefinance company or directly from the home buyer, depending on the nature of manufactured housing, modular housingthe transaction.

The Company recognizes commercial revenue and park models, along with freightrelated cost of sales for long-term construction contracts (“Commercial”) over time as performance obligations are satisfied using thepercentage-of-completion method (input method). Management estimates the stage of completion on each construction project based on progress and costs incurred. Unbilled revenue on long-term construction contracts are classified as a contract asset in

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

accounts receivable and receipts in excess of billings are included in other current liabilities in the accompanying condensed consolidated balance sheets. At June 30, 2018 and March 31, 2018, uncollected billings related to long-term construction contracts totaled $3.5 million and $5.0 million, respectively. At June 30, 2018, there was no unbilled revenue for long-term contracts. At March 31, 2018, unbilled revenue for long-term construction contracts was $0.3 million.

Revenue for the Company’s transportation operations is recognized when a shipment has been delivered to its final destination. Amounts billed to customers parts soldrelated to shipping and aftermarket services. Revenue is essentially recognized when product is shipped or services rendered, and transfer of title has occurred. The Corporation is currently evaluating how the adoption of ASU2014-09 will impact its financial position and result of operations, but does not anticipate any material changes resulting from this adoption.

In July 2015, FASB issued ASUNo. 2015-11,Inventory, which requires an entity to measure inventory at the lower of cost andhandling costs are included in net realizable value. Net realizable value is the estimated selling pricessales in the ordinary coursecondensed consolidated statements of comprehensive income (loss). Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue producing transaction that are collected by the Company from a customer are excluded from net sales. The Company expenses sales commissions when incurred. Sales commissions are recorded in selling, general, and administrative expenses.

The following table disaggregates the Company’s revenue by sales category for the three months ended June 30, 2018:

Skyline Champion Corporation and Subsidiary Companies

Notes to Condensed Consolidated Financial Statements (Unaudited) —(Continued)

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

Basic net income (loss) per share attributable to Skyline Champion was computed using the two-class method by dividing net income (loss) attributable to Skyline Champion, after deducting undistributed earnings per common share is computed based onallocated to participating securities, by the weighted-averageaverage number of common shares outstanding during the reporting period. The Company’s time-vesting and performance-vesting restricted shares are considered participating securities. Diluted earnings per common share is computed based on the combinationmore dilutive of; (i) the two-class method, assuming the participating securities are not exercised or converted; or (ii) the summation of dilutive common share equivalents, comprised of shares issuable under the Corporation’s Stock Incentive Plan and the weighted-average number ofaverage common shares outstanding during the reporting period. Dilutiveand additional common share equivalents includeshares that would have been outstanding if the dilutive effectpotential common shares had been issued. During the three months ended June 30, 2018 and July 1, 2017, diluted earnings per share was more dilutive under the two-class method. Securities that could potentially dilute basic EPS in the future that were antidilutive are described Note 13. The number ofin-the-money options shares used to purchase shares, which is calculatedcalculate earnings per share prior to the Exchange was determined based on the average share price for each period usingexchange ratio, as defined in the treasury stock method. Exchange.

The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except per share amounts):common share:

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements – Continued

The Company operates in two reportable segments: (i) U.S. Factory-built Housing, which includes wholesale and retail housing operations and (ii) Canadian Factory-built Housing. Corporate/Other includes the Company’s transportation operations, corporate costs directly incurred for all segments and intersegment eliminations. Segments are generally determined by geography. Segment data includes intersegment revenues and corporate office costs that are directly and exclusively incurred for each segment. The Company evaluates the performance of its segments and allocates resources to them primarily based on earnings before interest, taxes, depreciation and amortization (“EBITDA”). Total assets for Corporate/Other primarily include cash and certain deferred tax items not specifically allocated to another segment.

Selected financial information by reportable segment was as follows: