-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J3tpByau2QGy+nay5wzTk3lH6vrgdYGYOs4/kU5CCFy3547ZYc+9YN6pjthXrRia lGmwPhCDvnVlirIza8TiyA== 0000891092-04-003844.txt : 20040803 0000891092-04-003844.hdr.sgml : 20040803 20040803110232 ACCESSION NUMBER: 0000891092-04-003844 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040803 ITEM INFORMATION: FILED AS OF DATE: 20040803 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESEE & WYOMING INC CENTRAL INDEX KEY: 0001012620 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 060984624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31456 FILM NUMBER: 04947028 BUSINESS ADDRESS: STREET 1: 66 FIELD POINT ROAD CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036293722 MAIL ADDRESS: STREET 1: 66 FIELD POINT ROAD CITY: GREENWICH STATE: CT ZIP: 06830 8-K 1 e18686_8k.txt FORM 8-K =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 3, 2004 GENESEE & WYOMING INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 001-31456 06-0984624 (Commission File Number) (I.R.S. Employer Identification No.) 66 FIELD POINT ROAD, GREENWICH, CONNECTICUT 06830 (Address of principal executive offices) (Zip Code) (203) 629-3722 (Registrant's telephone number, including area code) (NOT APPLICABLE) (Former name or former address, if changed since last report) ================================================================================ ITEM 12. Results of Operations and Financial Condition The following Press Release, filed as Exhibit 99, and the information set forth therein is furnished under Item 12, Disclosure of Results of Operations and Financial Condition. The Press Release was issued by Genesee & Wyoming Inc. on August 3, 2004, announcing Genesee & Wyoming Inc.'s financial results for the second quarter of 2004, which is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. GENESEE & WYOMING INC. August 3, 2004 By: /s/ John C. Hellmann -------------------------------------------- John C. Hellmann Chief Financial Officer EX-99 2 e18686ex99.txt PRESS RELEASE Exhibit 99 Genesee & Wyoming Reports Record Earnings for the Second Quarter of 2004 GREENWICH, Conn., Aug. 3, 2004 /PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported today that net income in the second quarter of 2004 increased 40.8% to $10.8 million, compared to net income of $7.7 million in the second quarter of 2003. Excluding $0.5 million of non tax-deductible expenses from GWI's May 2004 offering of secondary shares of common stock, net income was $11.4 million in the second quarter of 2004. GWI's diluted earnings per share in the second quarter of 2004 increased 39.3% to $0.39 with 27.5 million shares outstanding, compared to diluted earnings per share of $0.28 with 26.7 million shares outstanding in the second quarter of 2003. Excluding the non tax-deductible expenses from the stock offering, GWI's diluted EPS were $0.41 in the second quarter of 2004. (Note that prior to GWI's adoption of Emerging Issues Task Force Bulletin Issue No. 03-06 under FASB Statement No. 128, which became effective June 30, 2004, GWI's diluted EPS for the second quarter of 2003 were $0.29.) In the second quarter of 2004, GWI's North American revenue increased 17.7% to $74.1 million, compared to $62.9 million in the second quarter of 2003. Of this $11.2 million increase in revenue, $5.0 million was same-railroad growth and $6.2 million was from the acquisition of rail lines from Georgia-Pacific Corp. The 7.8% growth in same-railroad revenue was balanced across multiple commodity groups, with particular strength in coal shipments, which grew by $1.9 million, or 19.6%. North American operating income was $13.6 million in the second quarter of 2004, or $14.1 million excluding the expenses from the stock offering, compared with $10.9 million of operating income in the second quarter of 2003. GWI's North American operating ratio was 81.7% in the second quarter of 2004, or 81.0% excluding the non tax-deductible expenses from the stock offering, compared with an operating ratio of 82.7% in the second quarter of 2003. Same railroad fuel expense increased $1.1 million in the second quarter of 2004 compared with the second quarter of 2003, primarily due to higher prices for diesel fuel. In Australia, revenue at GWI's 50%-owned subsidiary, Australian Railroad Group (ARG), increased 36.4% to US$81.7 million in the second quarter of 2004, compared with US$59.9 million in the second quarter of 2003. This US$21.8 million increase in revenue was composed of US$10.0 million in grain, US$2.8 million in other ores and minerals, US$2.7 million in iron ores and US$6.3 million in all other revenues. In Australian dollars, ARG's revenue increased 27.4% in the second quarter of 2004 compared with the second quarter of 2003. ARG's operating income in the second quarter of 2004 increased 23.4% to US$16.5 million, compared with operating income of US$13.3 million in the second quarter of 2003. ARG's operating ratio was 79.9% in the second quarter of 2004, compared with 77.7% in the second quarter of 2003. Equity income from ARG in the second quarter of 2004 was US$3.5 million, a 63.1% increase over equity income of US$2.1 in the second quarter of 2003. In comparing the second quarter of 2004 with the second quarter of 2003, the Australian dollar strengthened 12.5%. For the six months ended June 30, 2004, GWI's North American operations generated Free Cash Flow of $19.4 million (defined as net cash provided by operating activities of $30.7 million less net cash used in investing activities of $11.3 million less cash used for acquisitions of $0) compared with $16.5 million of Free Cash Flow (defined as net cash provided by operating activities of $23.1 million less net cash used in investing activities of $6.6 million less cash used for acquisitions of $0) for the six months ended June 30, 2003. See the attached schedule for a description and discussion of Free Cash Flow. Mortimer B. Fuller III, Chairman and Chief Executive Officer of GWI, commented, "Our U.S. and Canadian regions have been experiencing considerable strength in their local industrial economies, resulting in 7.8% same railroad growth in the second quarter. In particular, we have seen increasing traffic in all of our coal-shipping regions including Illinois, Utah and New York-Pennsylvania. This favorable overall business climate has more than offset the impact of high fuel prices throughout GWI as well as difficult operating conditions in our Oregon Region due to Class I congestion." Mr. Fuller continued, "In Australia, ARG's second quarter earnings increased 63.1% due to strong grain and iron ore shipments. However, ARG has also been impacted by high fuel prices and incurred certain track maintenance expense in the second quarter that will not recur for the rest of 2004. As a result, ARG's results were slightly behind our expectations for the second quarter, and we expect further improvement in earnings over the balance of the year." As previously announced, GWI's conference call to discuss financial results for the second quarter will be held today at 11:00AM (Eastern Time). The dial-in number for the teleconference is (888) 428-4480 or the call may be accessed live over the Internet (listen only) directly at http://www.firstcallevents.com/service/ajwz409088414gf12.html or via the Investors tab of Genesee & Wyoming's website (http://www.gwrr.com). An audio replay of the conference call will be accessible via the Investors tab of Genesee & Wyoming's website (http://www.gwrr.com) starting this afternoon. GWI is a leading operator of short line and regional freight railroads in the United States, Canada, Mexico, Australia and Bolivia. The Company operates over 8,100 miles of owned and leased track and more than 3,000 additional miles under track access arrangements. This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic conditions, customer demand, increased competition in relevant markets, and others. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 REVENUES $74,062 $62,937 $146,464 $121,798 EQUITY ISSUANCE EXPENSE 523 -- 523 -- OPERATING EXPENSES 59,958 52,075 120,801 102,949 TOTAL OPERATING EXPENSES 60,481 52,075 121,324 102,949 INCOME FROM OPERATIONS 13,581 10,862 25,140 18,849 INTEREST EXPENSE (2,283) (2,167) (4,718) (4,510) OTHER INCOME, NET 231 386 425 713 INCOME BEFORE INCOME TAXES AND EQUITY EARNINGS 11,529 9,081 20,847 15,052 PROVISION FOR INCOME TAXES 4,351 3,702 7,984 5,875 INCOME BEFORE EQUITY EARNINGS 7,178 5,379 12,863 9,177 EQUITY IN NET INCOME OF INTERNATIONAL AFFILIATES: AUSTRALIAN RAILROAD GROUP 3,475 2,130 7,217 4,144 SOUTH AMERICA 183 186 223 (91) NET INCOME 10,836 7,695 20,303 13,230 IMPACT OF PREFERRED STOCK OUTSTANDING 178 293 479 586 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $10,658 $7,402 $19,824 $12,644 BASIC EARNINGS PER SHARE: NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $0.44 $0.31 $0.82 $0.54 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 24,171 23,606 24,108 23,547 DILUTED EARNINGS PER SHARE: NET INCOME $0.39 $0.28 $0.72 $0.47 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 27,544 26,707 27,490 26,650 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, December 31, ASSETS 2004 2003 CURRENT ASSETS: Cash and cash equivalents $8,450 $11,118 Accounts receivable, net 54,899 54,656 Materials and supplies 5,879 5,204 Prepaid expenses and other 7,275 6,204 Deferred income tax assets, net 3,528 3,010 Total current assets 80,031 80,192 PROPERTY AND EQUIPMENT, net 315,863 315,345 INVESTMENT IN UNCONSOLIDATED AFFILIATES 118,618 117,664 GOODWILL 24,466 24,522 INTANGIBLE ASSETS, net 78,402 79,357 OTHER ASSETS, net 10,552 10,093 Total assets $627,932 $627,173 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $6,409 $6,589 Accounts payable 61,758 57,472 Accrued expenses 16,741 13,902 Total current liabilities 84,908 77,963 LONG-TERM DEBT, less current portion 127,633 151,433 DEFERRED INCOME TAX LIABILITIES, net 45,495 41,840 DEFERRED ITEMS - grants from governmental agencies 42,704 42,667 DEFERRED GAIN - sale/leaseback 3,641 3,982 OTHER LONG-TERM LIABILITIES 14,083 14,843 MINORITY INTEREST 3,467 3,365 REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 23,994 TOTAL STOCKHOLDERS' EQUITY 306,001 267,086 Total liabilities and stockholders' equity $627,932 $627,173 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, 2004 June 30, 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $20,303 $13,230 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 9,484 7,568 Deferred income taxes 2,929 4,128 Net loss (gain) on sale and impairment of assets (94) 176 Equity earnings of unconsolidated international affiliates (7,440) (4,053) Minority interest expense 102 67 Tax benefit realized upon exercise of stock options 956 648 Changes in assets and liabilities, net of effect of acquisitions - Accounts receivable (605) 3,922 Materials and supplies (744) (493) Prepaid expenses and other (1,138) 1,496 Accounts payable and accrued expenses 7,263 (4,181) Other assets and liabilities, net (305) 558 Net cash provided by operating activities 30,711 23,066 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment, net of proceeds from government grants (11,561) (7,135) Locomotive upgrade project -- (97) Cash received from unconsolidated international affiliates -- 132 Proceeds from disposition of property and equipment, including sale/leasebacks 294 526 Net cash used in investing activities (11,267) (6,574) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term borrowings, including capital leases (99,407) (71,743) Proceeds from issuance of long-term debt 76,300 55,000 Proceeds from employee stock purchases 1,937 1,414 Dividend paid on Redeemable Convertible Preferred Stock (411) (500) Net cash used in financing activities (21,581) (15,829) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (531) 638 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (2,668) 1,301 CASH AND CASH EQUIVALENTS, beginning of period 11,118 11,028 CASH AND CASH EQUIVALENTS, end of period $8,450 $12,329 GENESEE & WYOMING INC. AND SUBSIDIARIES Selected Consolidated Financial Information (dollars in thousands) (Unaudited) Three Months Ended June 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $55,907 75.5% $47,153 74.9% Non-freight 18,155 24.5% 15,784 25.1% Total revenues $74,062 100.0% $62,937 100.0% Operating Expense Comparison: Natural Classification Labor and benefits $24,950 33.7% $21,933 34.8% Equipment rents 6,334 8.6% 4,302 6.8% Purchased services 4,498 6.1% 4,913 7.8% Depreciation and amortization 4,754 6.4% 3,843 6.1% Diesel fuel 5,646 7.6% 4,449 7.1% Casualties and insurance 3,653 4.9% 3,328 5.3% Materials 3,611 4.9% 3,969 6.3% Net loss on sale and impairment of assets -- 0.0% 175 0.3% Other expenses 7,035 9.5% 5,163 8.2% Total operating expenses $60,481 81.7% $52,075 82.7% Functional Classification Transportation $23,360 31.5% $20,905 33.2% Maintenance of ways and structures 7,599 10.3% 6,963 11.1% Maintenance of equipment 11,048 14.9% 9,157 14.5% General and administrative 13,720 18.6% 11,032 17.5% Net loss on sale and impairment of assets -- 0.0% 175 0.3% Depreciation and amortization 4,754 6.4% 3,843 6.1% Total operating expenses $60,481 81.7% $52,075 82.7% GENESEE & WYOMING INC. AND SUBSIDIARIES Selected Consolidated Financial Information (dollars in thousands) (Unaudited) Six Months Ended June 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $110,717 75.6% $91,679 75.3% Non-freight 35,747 24.4% 30,119 24.7% Total revenues $146,464 100.0% $121,798 100.0% Operating Expense Comparison: Natural Classification Labor and benefits $51,346 35.1% $43,800 36.0% Equipment rents 13,215 9.0% 8,800 7.2% Purchased services 8,779 6.0% 8,956 7.4% Depreciation and amortization 9,484 6.5% 7,568 6.2% Diesel fuel 11,291 7.7% 9,620 7.9% Casualties and insurance 7,360 5.0% 6,299 5.2% Materials 7,319 5.0% 7,665 6.3% Net (gain) loss on sale and impairment of assets (94) -0.1% 176 0.1% Other expenses 12,624 8.6% 10,065 8.2% Total operating expenses $121,324 82.8% $102,949 84.5% Functional Classification Transportation $48,026 32.8% $41,752 34.3% Maintenance of ways and structures 14,486 9.9% 13,101 10.8% Maintenance of equipment 22,729 15.5% 18,153 14.9% General and administrative 26,693 18.2% 22,199 18.2% Net (gain) loss on sale and impairment of assets (94) -0.1% 176 0.1% Depreciation and amortization 9,484 6.5% 7,568 6.2% Total operating expenses $121,324 82.8% $102,949 84.5% GENESEE & WYOMING INC. AND SUBSIDIARIES North American Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (dollars in thousands, except average revenue per carload) Three Months Ended Three Months Ended June 30, 2004 June 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Coal, Coke & Ores $12,062 49,259 $245 $9,805 40,132 $244 Paper 9,770 23,206 421 7,943 19,105 416 Lumber & Forest Products 6,327 19,428 326 4,580 14,777 310 Petroleum Products 6,134 8,185 749 6,183 7,707 802 Minerals & Stone 5,693 15,728 362 5,821 14,672 397 Metals 5,450 17,530 311 4,678 16,528 283 Chemicals-Plastics 4,103 7,808 525 2,856 5,958 479 Farm & Food Products 2,947 6,914 426 2,599 6,591 394 Autos & Auto Parts 1,854 4,213 440 1,706 4,234 403 Intermodal 630 1,736 363 431 1,692 255 Other 937 3,455 271 551 2,612 211 Totals $55,907 157,462 355 $47,153 134,008 352 GENESEE & WYOMING INC. AND SUBSIDIARIES North American Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (dollars in thousands, except average revenue per carload) Six Months Ended Six Months Ended June 30, 2004 June 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Coal, Coke & Ores $22,799 93,301 $244 $19,648 82,111 $239 Paper 19,290 46,190 418 15,269 36,979 413 Petroleum Products 12,448 16,495 755 12,671 16,397 773 Lumber & Forest Products 12,165 37,462 325 8,443 26,856 314 Metals 11,105 35,368 314 8,585 30,388 283 Minerals & Stone 10,829 28,393 381 11,097 28,665 387 Chemicals-Plastics 7,975 15,276 522 5,434 11,633 467 Farm & Food Products 7,739 18,366 421 5,491 14,862 369 Autos & Auto Parts 3,596 8,410 428 3,235 7,991 405 Intermodal 1,182 3,100 381 788 2,988 264 Other 1,589 6,309 252 1,018 5,068 201 Totals $110,717 308,670 359 $91,679 263,938 347 AUSTRALIAN RAILROAD GROUP PTY. LTD. CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 REVENUES $81,717 $59,912 $164,070 $113,272 OPERATING EXPENSES 65,257 46,574 129,970 87,607 RESTRUCTURING COSTS -- -- -- 267 TOTAL OPERATING EXPENSES 65,257 46,574 129,970 87,874 INCOME FROM OPERATIONS 16,460 13,338 34,100 25,398 INTEREST EXPENSE (6,855) (7,633) (14,203) (14,697) OTHER INCOME, NET 338 779 741 1,538 INCOME BEFORE TAX 9,943 6,484 20,638 12,239 PROVISION FOR INCOME TAX 2,994 2,224 6,206 3,951 NET INCOME $6,949 $4,260 $14,432 $8,288 Australian Railroad Group Pty. Ltd. is 50%-owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) (Unaudited - U.S. GAAP) June 30, 2004 December 31, 2003 ASSETS CURRENT ASSETS: Cash and cash equivalents $32,977 $26,618 Accounts receivable, net 47,182 47,764 Materials and supplies 10,195 10,033 Prepaid expenses and other 5,740 3,069 Total current assets 96,094 87,484 PROPERTY AND EQUIPMENT, net 453,905 478,808 DEFERRED INCOME TAX ASSETS, net 71,552 80,193 OTHER ASSETS, net 7,535 5,476 Total assets $629,086 $651,961 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ -- $ -- Accounts payable 2,733 7,199 Accrued expenses 42,205 35,111 Current income tax liabilities 148 - Total current liabilities 45,086 42,310 LONG-TERM DEBT 342,657 367,892 DEFERRED INCOME TAX LIABILITIES, net 16,148 14,271 OTHER LONG-TERM LIABILITIES 1,911 2,031 FAIR VALUE OF INTEREST RATE SWAPS 7,510 9,133 SUBORDINATED NOTES TO STOCKHOLDERS 10,769 11,562 Total non-current liabilities 378,995 404,889 REDEEMABLE PREFERRED STOCK OF STOCKHOLDERS 15,100 16,212 TOTAL STOCKHOLDERS' EQUITY 189,905 188,550 Total liabilities and stockholders' equity $629,086 $651,961 Australian Railroad Group Pty. Ltd. is 50%-owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Six Months Ended June 30, 2004 June 30, 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $14,432 $8,288 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 13,097 10,875 Deferred income taxes 6,367 5,265 Net loss (gain) on sale and impairment of assets 471 (633) Changes in assets and liabilities (3,675) (4,320) Net cash provided by operating activities 30,692 19,475 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (22,883) (12,003) Proceeds from disposition of property and equipment 835 2,716 Transfer to restricted funds on deposit -- (3,396) Net cash used in investing activities (22,048) (12,683) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on borrowings -- -- Proceeds from borrowings -- -- Net cash provided by financing activities -- -- EFFECT OF EXCHANGE RATE DIFFERENCES ON CASH AND CASH EQUIVALENTS (2,285) 1,809 INCREASE IN CASH AND CASH EQUIVALENTS 6,359 8,601 CASH AND CASH EQUIVALENTS, beginning of period 26,618 5,882 CASH AND CASH EQUIVALENTS, end of period $32,977 $14,483 Australian Railroad Group Pty. Ltd. is 50%-owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Selected Consolidated Financial Information (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Three Months Ended June 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $67,773 82.9% $49,221 82.2% Non-freight 13,944 17.1% 10,691 17.8% Total railroad revenues $81,717 100.0% $59,912 100.0% Operating Expenses: Natural Classification Labor and benefits $14,945 18.3% $10,983 18.3% Equipment rents 821 1.0% 368 0.6% Purchased services 20,263 24.8% 14,190 23.7% Depreciation and amortization 6,383 7.8% 5,718 9.5% Diesel fuel 10,537 12.9% 5,034 8.4% Casualties and insurance 1,339 1.6% 3,031 5.1% Materials 3,549 4.3% 2,590 4.3% Net gain on sale and impairment of assets (13) 0.0% (208) -0.3% Other expenses 7,433 9.2% 4,868 8.1% Total operating expenses $65,257 79.9% $46,574 77.7% Functional Classification Transportation $29,689 36.3% $18,664 31.2% Maintenance of ways and structures 12,121 14.8% 8,313 13.9% Maintenance of equipment 8,628 10.6% 5,992 10.0% General and administrative 8,449 10.4% 8,095 13.4% Net gain on sale and impairment of assets (13) 0.0% (208) -0.3% Depreciation and amortization 6,383 7.8% 5,718 9.5% Total operating expenses $65,257 79.9% $46,574 77.7% Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Selected Consolidated Financial Information (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Six Months Ended June 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $138,713 84.5% $92,577 81.7% Non-freight 25,357 15.5% 20,695 18.3% Total railroad revenues $164,070 100.0% $113,272 100.0% Operating Expenses: Natural Classification Labor and benefits $29,201 17.8% $20,617 18.2% Equipment rents 1,531 0.9% 722 0.6% Purchased services 39,325 24.0% 26,850 23.7% Depreciation and amortization 13,097 8.0% 10,875 9.6% Diesel fuel 20,190 12.3% 9,974 8.8% Casualties and insurance 4,798 2.9% 4,881 4.3% Materials 6,852 4.2% 5,434 4.8% Net loss (gain) on sale and impairment of assets 471 0.3% (633) -0.6% Other expenses 14,505 8.8% 9,154 8.2% Total operating expenses $129,970 79.2% $87,874 77.6% Functional Classification Transportation $59,327 36.2% $34,123 30.1% Maintenance of ways and structures 21,828 13.3% 15,374 13.6% Maintenance of equipment 16,585 10.1% 12,361 10.9% General and administrative 18,662 11.3% 15,774 14.0% Net loss (gain) on sale and impairment of assets 471 0.3% (633) -0.6% Depreciation and amortization 13,097 8.0% 10,875 9.6% Total operating expenses $129,970 79.2% $87,874 77.6% Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Australian Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (U.S. dollars in thousands) (Unaudited) Three Months Ended Three Months Ended June 30, 2004 June 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Grain $25,670 69,661 $368 $15,662 41,005 $382 Other Ores and Minerals 14,055 25,657 548 11,210 25,500 440 Iron Ore 10,872 51,050 213 8,194 41,597 197 Alumina 4,733 39,720 119 4,173 38,646 108 Bauxite 2,920 30,034 97 2,916 32,105 91 Hook and Pull (Haulage) 451 2,521 179 884 1,592 555 Gypsum 903 12,614 72 655 10,677 61 Other 8,169 16,629 491 5,527 15,321 361 Total $67,773 247,886 273 $49,221 206,443 238 Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Australian Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (U.S. dollars in thousands) (Unaudited) Six Months Ended Six Months Ended June 30, 2004 June 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Grain $51,931 136,224 $381 $27,411 68,817 $398 Other Ores and Minerals 29,133 53,815 541 21,399 50,295 425 Iron Ore 22,334 101,529 220 15,680 84,604 185 Alumina 9,752 79,136 123 7,944 76,082 104 Bauxite 6,132 60,251 102 5,670 64,004 89 Hook and Pull (Haulage) 915 5,297 173 1,682 2,893 581 Gypsum 1,911 25,407 75 1,310 21,306 61 Other 16,605 33,822 491 11,481 31,335 366 Total $138,713 495,481 280 $92,577 399,336 232 Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. Free Cash Flow Description and Discussion Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities less Net Cash Used in Investing Activities, excluding the Cost of Acquisitions. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as required dividend payments and principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with Generally Accepted Accounting Principles. The following table sets forth a reconciliation of GWI's Net Cash Provided by Operating Activities to GWI's Free Cash Flow: Six Months Ended 2004 2003 Net cash provided by operating activities $ 30,711 $ 23,066 Net cash used in investing activities (11,267) (6,574) Cash used for acquisitions -- -- Free cash flow $ 19,444 $ 16,492 SOURCE Genesee & Wyoming Inc. -0- 08/03/2004 /CONTACT: John C. Hellmann, Chief Financial Officer, Genesee & Wyoming Inc., +1-203-629-3722/ /Web site: http://www.gwrr.com / (GWR) CO: Genesee & Wyoming Inc. ST: Connecticut IN: TRN SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----