-----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, UfG9EETzJ5Rjtx72zGNAXieXddYps6/3O4Ot/+jeg/rQjTiL6ddTrvTJnQw1JQM8 nM/L0XZE4Kof/kuFgDyewA== 0000950130-98-004055.txt : 19980817 0000950130-98-004055.hdr.sgml : 19980817 ACCESSION NUMBER: 0000950130-98-004055 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NONE 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: 10-Q SEC ACT: SEC FILE NUMBER: 000-20847 FILM NUMBER: 98688333 BUSINESS ADDRESS: STREET 1: 71 LEWIS ST CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036293722 MAIL ADDRESS: STREET 1: 71 LEWIS STREET STREET 2: 71 LEWIS STREET CITY: GREENWICH STATE: CT ZIP: 06830 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarter ended June 30, 1998 Commission File No. 0-20847 GENESEE & WYOMING INC. (Exact name of registrant as specified in its charter) Delaware 06-0984624 - ------------------------ ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 71 Lewis Street, Greenwich, Connecticut 06830 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (203) 629-3722 - -------------- (Telephone No.) Shares of common stock outstanding as of the close of business on August 7, 1998: Class Number of Shares Outstanding - ----- ---------------------------- Class A Common Stock 4,449,084 Class B Common Stock 845,539 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. [X] YES [_] NO INDEX Part I - Financial Information Item 1. Financial Statements: Page ------- Consolidated Statements of Income - For the Three and Six Month Periods Ended June 30, 1998 and 1997......................................... 3 Consolidated Balance Sheets June 30, 1998 and December 31, 1997................................. 4 Consolidated Statements of Cash Flows - For the Six Month Periods Ended June 30, 1998 and 1997 5 Notes to Consolidated Financial Statements.............. 6 - 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 9 - 18 Item 3. Quantitative and Qualitative Disclosures About Market Risk........................................... 18 Part II - Other Information....................................... 19 Index to Exhibits................................................. 20 - 21 Signatures........................................................ 22 2 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited)
Three Months Six Months Ended June 30, Ended June 30, 1998 1997 1998 1997 ---------------------------------------------- OPERATING REVENUES $ 37,065 $ 23,479 $ 74,806 $ 47,571 ---------------------------------------------- OPERATING EXPENSES: Transportation 11,958 6,752 23,772 13,984 Maintenance of way and structures 4,478 2,462 8,683 5,019 Maintenance of equipment 7,113 3,888 14,872 7,894 General and administrative 6,351 4,504 13,036 9,247 Depreciation and amortization 2,493 1,702 4,797 3,221 ---------------------------------------------- Total operating expenses 32,393 19,308 65,160 39,365 INCOME FROM OPERATIONS 4,672 4,171 9,646 8,206 Interest expense (1,642) (647) (3,204) (1,221) Other income 175 100 569 231 ---------------------------------------------- Income before provision for income taxes 3,205 3,624 7,011 7,216 Provision for income tax 1,359 1,467 2,883 2,925 ---------------------------------------------- NET INCOME $ 1,846 $ 2,157 $ 4,128 $ 4,291 ============================================== Earnings per common share - basic $ 0.35 $ 0.41 $ 0.78 $ 0.82 ============================================== Weighted average number of shares of common stock - basic 5,294 5,247 5,294 5,246 ============================================== Earnings per common share - diluted $ 0.34 $ 0.40 $ 0.76 $ 0.79 ============================================== Weighted average number of shares of common stock - diluted 5,400 5,440 5,398 5,455 ==============================================
3 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31, 1998 1997 (Unaudited) ------------------------------ ASSETS CURRENTS ASSETS: Cash and cash equivalents $ 25,104 $ 11,434 Accounts receivable, net 24,762 29,895 Note receivable - related party 4,542 4,499 Materials and supplies 3,379 5,039 Prepaid expenses and other 3,244 3,145 Deferred income tax assets, net 2,560 2,523 ------------------------------ Total current assets 63,591 56,535 ------------------------------ PROPERTY AND EQUIPMENT, net 128,841 124,985 ------------------------------ SERVICE ASSURANCE AGREEMENT, net 13,188 13,563 ------------------------------ OTHER ASSETS, net 14,818 15,449 ------------------------------ Total assets $220,438 $210,532 ============================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 512 $ 1,157 Accounts payable 30,525 30,025 Accrued expenses 7,660 6,796 ------------------------------ Total current liabilities 38,697 37,978 ------------------------------ LONG-TERM DEBT 77,424 72,987 ------------------------------ OTHER LIABILITIES 3,166 3,237 ------------------------------ DEFERRED INCOME TAX LIABILITIES, net 10,104 8,470 ------------------------------ DEFERRED ITEMS--grants from governmental agencies 14,896 15,083 ------------------------------ DEFERRED GAIN--sale/leaseback 4,200 4,434 STOCKHOLDERS' EQUITY: Class A common stock, $0.01 par value, one vote per share; 12,000,000 shares authorized; 4,448,947 and 4,404,262 issued and outstanding on June 30, 1998 and December 31, 1997, respectively. 45 44 Class B common stock, $0.01 par value, 10 votes per share; 1,500,000 shares authorized; 845,539 and 846,556 issued and 8 8 outstanding on March 31, 1998 and December 31, 1997, respectively. Additional paid-in capital 46,710 46,205 Warrants outstanding --- 471 Retained earnings 27,169 23,056 Foreign currency translation adjustment (1,981) (1,441) ------------------------------ Total stockholders' equity 71,951 68,343 ------------------------------ Total liabilities and stockholders' equity $220,438 $210,532 ==============================
4 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
Six Months Ended June 30, 1998 1997 ------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,128 $ 4,291 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 4,797 3,221 Deferred income taxes 1,919 1,330 Gain on disposition of property and equipment (12) Changes in assets and liabilities, net of balances assumed through acquisitions- Receivables 3,581 1,211 Materials and supplies 1,199 11 Prepaid expenses and other (148) 245 Accounts payable and accrued expenses 1,017 (7,734) Other assets and liabilities, net 322 (215) ------------------------- Net cash provided by operating activities 16,815 2,348 ------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (9,513) (3,858) Proceeds from disposition of property 1,445 266 ------------------------- Net cash used in investing activities (8,068) (3,592) ------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term borrowings, (905) (7,565) including capital leases Proceeds from issuance of long-term debt 5,800 5,880 Net proceeds on grants 167 1,173 Proceeds from issuance of common stock 36 27 ------------------------- Net cash provided by (used in) financing activities 5,098 (485) ------------------------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (175) --- ------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 13,670 (1,729) CASH AND CASH EQUIVALENTS, beginning of period 11,434 14,121 ------------------------- CASH AND CASH EQUIVALENTS, end of period $ 25,104 $ 12,392 ========================= CASH PAID DURING PERIOD FOR: Interest $ 3,329 $ 1,124 Incomes taxes 1,301 3,712 =========================
5 GENESEE & WYOMING INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION: The interim consolidated financial statements presented herein include the accounts of Genesee & Wyoming Inc. and its subsidiaries. References to "GWI" or the "Company" mean Genesee & Wyoming Inc. and, unless the context indicates otherwise, its consolidated subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. These interim consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). In the opinion of management, the unaudited financial statements for the three-month and six-month periods ended June 30, 1998 and 1997, are presented on a basis consistent with audited financial statements and contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 1997 included in the Company's Form 10-K. The results of operations for interim periods are not necessarily indicative of results of operations for the full year. 2. CORPORATE DEVELOPMENTS: Australia - On August 28, 1997 the Company announced that its wholly owned subsidiary, Genesee & Wyoming Australia Pty Ltd ("GWIA"), had been awarded the contract to purchase certain railroad assets of SA Rail, a division of Australian National Railway, through the Commonwealth of Australia Office of Asset Sales. SA Rail provided intrastate freight services in the State of South Australia, interstate haulage of contract freight, rolling stock rental and maintenance, and interstate track maintenance. GWIA bid as part of a consortium including EDI Clyde Engineering and Transfield Pty Ltd. EDI Clyde is a major Australian provider of railway rolling stock and holds the Australian license for GM/EMD locomotives. Transfield is a major Australian engineering, construction and infrastructure maintenance provider. On November 8, 1997 GWIA closed on the purchase and commenced operation of freight service under the name of Australia Southern Railroad Pty. Ltd. 3. JOINT VENTURE: The Company has formed a joint venture, Genesee Rail-One Inc. ("GRO") to acquire railroads in Canada. GRO is a joint venture with Rail-One Inc., a subsidiary of The Cygnus Group which is an integrated transportation facilities, services and infrastructure provider in Canada. The Company's initial capital investment in GRO was approximately $4,913,000. On July 29, 1997, GRO commenced operations of the Huron Central Railway Inc. ("HCRY"), a 180-mile railroad located in central Ontario. HCRY leases its rail line from the Canadian Pacific Railway for a 20 year term and is responsible for operation and maintenance of the leased line. GRO commenced operations on November 11, 1997 of the Quebec Gatineau Railway Inc. ("QGRY"), a 354-mile railroad linking Quebec City, Montreal and Hull in Southeastern Quebec. QGRY purchased the majority of assets and also leased a smaller portion of assets for this railroad from the Canadian Pacific Railway Company. 6 Based on GWI's ownership position of 47.5%, the Company is reporting the results of operations of GRO under the equity method of accounting for investments. The results of operations of GRO are translated into U.S. dollars at a weighted average exchange rate for each period and are included in other income, net. 4. LEASES: In March 1997, a subsidiary of the Company entered into a master lease agreement with a leasing company. The lease provides for the inclusion of up to $13.0 million in railroad rolling stock. As of June 30, 1998, the Company's subsidiary had $11.8 million of equipment under this lease. Lease payments until September 30, 1998, are interest only at LIBOR plus 1.5%. After that date, the equipment currently under lease will require monthly payments of $116,461 until March 2017. The Company's subsidiary has the right to purchase the equipment at any time during the lease for fair market value. In June 1998, a subsidiary of the Company entered into a sale leaseback agreement with a bank for railroad rolling stock valued at $5.7 million. The agreement will be accounted for as an operating lease and will require monthly payments of $45,662 through July 2008. 5. CONTINGENCIES: On July 23, 1998, the Surface Transportation Board ("STB") issued its written order approving the petition of CSX Transportation, Inc. ("CSX") and Norfolk Southern Corp. ("NS") to control and divide the assets of Consolidated Rail Corporation ("Conrail"). Railroads in the Company's New York and Pennsylvania region interchange with, or participate in overhead traffic with, one or both of these railroads. Overhead traffic is defined as traffic that neither originates nor terminates on the Company's northeastern rail network. In their joint filing with the STB, CSX and NS estimated that approximately $8.3 million in freight revenue related to overhead traffic on one of the Company's subsidiaries may be diverted as a result of the proposed transactions. The Company agrees with this estimate and is implementing operational changes to minimize this impact. On October 21, 1997 the Company and several of its subsidiaries entered into a confidential Rate and Route Agreement with CSX that the Company believes will facilitate the operations restructuring process. The STB's written order contains one or more conditions which may further minimize this impact. The division of Conrail's assets is expected to occur in the first or second quarters of 1999. While the Company believes that agreements reached with CSX and NS in regard to the Conrail breakup will ultimately benefit the Company, the transition will be uncertain until new operating patterns are established. Based on its initial studies the Company believes that no impairment of its assets will occur. On August 6, 1998, a lawsuit was commenced against the Company and its subsidiary, Illinois & Midland Railroad, Inc. ("IMRR"), by Commonwealth Edison Company ("ComEd") in the Circuit Court of Cook County, Illinois. The suit alleges that IMRR is in breach of certain provisions of a 1987 agreement entered into by a prior unrelated owner of the IMRR rail line. The provisions pertain to limitations on rates received by IMRR and by the unrelated predecessor on freight hauled for ComEd's Powerton plant. The suit seeks unspecified compensatory damages in excess of $100,000. ComEd is IMRR's largest customer and in 1997 accounted for 15% of the consolidated revenues of the Company and its subsidiaries. The Company believes the suit is without merit. IMRR intends to vigorously defend against the suit. 7 6. COMPREHENSIVE INCOME: The Financial Accounting Standards Board recently issued SFAS No. 130, Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income. The objective of this standard is to report a measure of changes in equity of an enterprise that result from transactions other than with owners. Comprehensive income is the total of net income and all other nonowner changes in equity. The following table sets forth the Company's comprehensive income for the three months and six months ended June 30, 1998 and 1997: Statement of Comprehensive Income Three and Six Month Periods Ended June 30, (in thousands)
Three Months Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 ---------------- --------------- ---------------- ------------ Net income $1,846 $2,157 $4,128 $4,291 Other comprehensive loss, net of tax Foreign currency translation adjustments (824) -0- (540) -0- ------ ------ ------ ------ Comprehensive income $1,022 $2,157 $3,588 $4,291
The remainder of this page is intentionally left blank. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Company's consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, and with the consolidated financial statements, related notes and other financial information included in the Company's 1997 Form 10-K. General The Company is a holding company whose subsidiaries own and operate short line and regional freight railroads in the United States and, beginning in November, 1997, Australia, and through its industrial switching subsidiary, provides railroad switching and related services to industries with extensive railroad facilities within their complexes. The Company's United States and Australia railroad subsidiaries generate revenues primarily from the movement of freight over track owned or operated by its railroads. These subsidiaries also generate non-freight revenues primarily by providing related rail services such as railcar leasing, railcar repair and storage to shippers along its lines and to the railroads that connect with its lines. The Company's industrial switching subsidiary generates non-freight revenues primarily by providing switching and other rail related services to industries with extensive railroad facilities within their complexes. The Company participates in a joint venture, Genesee Rail-One Inc. ("GRO") to acquire railroads in Canada. The Company's initial capital investment in GRO was approximately $4,913,000. Based on GWI's ownership position of 47.5%, the Company is reporting the results of operations of GRO under the equity method of accounting for investments. The results of operations of GRO are translated into U.S. dollars at a weighted average exchange rate for each period and are included in other income, net. GRO's results for the three and six month periods ended June 30, 1998 are not significant. The Company's operating expenses include wages and benefits, equipment rents (including car hire), purchased services, depreciation and amortization, diesel fuel, casualties and insurance, materials and other expenses. Car hire is a charge paid by a railroad to the owners of railcars used by that railroad in moving freight. Other expenses generally include property and other non-income taxes, professional services, communication and data processing costs and general overhead expense. When comparing the Company's results of operations from one reporting period to another, the following factors should be taken into consideration. The Company has historically experienced fluctuations in revenues and expenses such as one-time freight moves, customer plant expansions and shutdowns, railcar sales, accidents and derailments. In periods when these events occur, results of operations are not easily comparable to other periods. In addition, much of the Company's growth to date has resulted from various types of acquisitions. Because of variations in the structure, timing and size of these acquisitions and differences in economics among the Company's railroads resulting from differences in the rates and other material terms established through negotiation, the Company's results of operations in any reporting period may not be directly comparable to its results of operations in other reporting periods. Year 2000 Compliance The Company is executing a plan to ensure its systems are compliant with the requirements to process transactions in the Year 2000. The Company's systems include internal financial systems and systems provided by third parties for the transportation operations and certain revenue and expense account processing related specifically to the rail industry. The Company believes that the costs necessary to make its internal financial systems Year 2000 compliant will be immaterial. The Company is communicating with its third party vendors to coordinate Year 2000 compliance. The Company's rail related systems require data provided through an industry association. Year 2000 compliance by the industry association is planned but is not in the Company's or its third party vendors' control. The Company believes that it will be able to achieve Year 2000 compliance; however, no assurance can be given that these efforts will be successful. Results of Operations Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997 9 Consolidated Operating Revenues Operating revenues were $37.1 million in the quarter ended June 30, 1998 compared to $23.5 million in the quarter ended June 30, 1997, an increase of $13.6 million or 57.9%. The increase was attributable to $12.1 million in revenues from the Australia operation, a $198,000 increase in United States railroad revenues and a $1.2 million increase in industrial switching revenues. The following three sections provide information on railroad revenues in the United States and Australia, and industrial switching revenues in the United States. United States Operating Revenues Operating revenues were $20.5 million in the quarter ended June 30, 1998 compared to $20.3 million in the quarter ended June 30, 1997, an increase of $198,000 or 1.0%. The increase was attributable to a $308,000 increase in non- freight revenues, which offset a $110,000 decrease in freight revenues. The following table compares United States freight revenues, carloads and average freight revenues per carload for the three months ended June 30, 1998 and 1997: United States Freight Revenues and Carloads Comparison by Commodity Group Three Months Ended June 30, 1998 and 1997 Average Freight Revenues Per Freight Revenues Carloads Carload - --------------------------------- -------- -------
Commodity Group % of Total % of Total % of Total % of Total 1998 Total 1997 Total 1998 Total 1997 Total 1998 1997 ------- ------ ------- ------ ------ ------ ------ ------ ----- ----- Coal, Coke & Ores $ 4,894 29.8% $ 4,748 28.7% 18,412 34.1% 19,341 35.8% $ 266 $ 245 Pulp & Paper 2,072 12.6% 2,032 12.3% 5,258 9.7% 5,374 9.9% 394 378 Chemicals & Plastics 1,761 10.7% 1,534 9.3% 3,454 6.4% 2,891 5.4% 510 530 Lumber & Forest Products 1,657 10.1% 1,532 9.3% 5,675 10.5% 4,500 8.4% 292 340 Petroleum Products 1,550 9.4% 2,135 12.9% 3,446 6.4% 4,243 7.9% 450 503 Metals 1,398 8.5% 1,241 7.5% 4,804 8.9% 5,312 9.8% 291 234 Farm & Food Products 1,056 6.4% 962 5.8% 3,475 6.4% 3,097 5.7% 304 311 Minerals & Stone 847 5.2% 820 5.0% 2,904 5.4% 3,103 5.7% 292 264 Autos & Auto Parts 616 3.8% 967 5.9% 1,215 2.3% 1,799 3.3% 507 538 Other 564 3.5% 554 3.3% 5,324 9.9% 4,398 8.1% 106 126 ------- ------ ------- ------ ------ ------ ------ ------ ----- ----- Total $16,415 100.0% $16,525 100.0% 53,967 100.0% 54,058 100.0% $ 304 $ 306
The decrease of $110,000 in United States freight revenues was primarily attributable to the decline in freight revenues from the shipment of Petroleum Products and Autos and Auto Parts. Freight revenues from Petroleum Products were $1.6 million in the quarter ended June 30, 1998, compared to $2.1 million in the quarter ended June 30, 1997, a decrease of $585,000 or 27.4% due to reduced shipments resulting from scheduled maintenance at a key customer's facilities. 10 Freight revenues from Autos and Auto Parts were $616,000 in the quarter ended June 30, 1998, compared to $967,000 in the quarter ended June 30, 1997, a decrease of $351,000 or 36.3% due to reduced shipments resulting from loss of a freight contract and labor issues in the auto industry. The decrease in freight revenues from Petroleum Products and Autos was partially offset by increases in freight revenues from Coal of $146,000 or 3.1%, Metals of $157,000 or 12.7% and Chemical and Plastics of $227,000 or 14.8%. Freight revenues from all remaining commodities reflected a net increase of $296,000. Total United States carloads were 53,967 in the quarter ended June 30, 1998 compared to 54,058 in the quarter ended June 30, 1997, a decrease of 91 or 0.2%. Also, the overall average revenue per carload declined to $304 in the quarter ended June 30, 1998, compared to $306 per carload in the quarter ended June 30, 1997, a decrease of 0.7% due to changes in commodity mix and traffic patterns. United States non-freight railroad revenues were $4.1 million in the quarter ended June 30, 1998 compared to $3.7 million in the quarter ended June 30, 1997, an increase of $308,000 or 8.2%. Australia Operating Revenues (US Dollars) Operating revenues were $12.1 million in the quarter ended June 30, 1998 and consisted of $10.8 million in freight revenues and a $1.3 million in non-freight revenues. The following table outlines Australian freight revenues for the quarter ended June 30, 1998: Australian Freight Revenue by Commodity Three Months Ended June 30, 1998 (in thousands) Commodity Group Revenue Hook and Pull (Haulage) $ 3,937 Grain 3,598 Coal 1,792 Gypsum 784 Marble 502 Lime 168 Other 55 ------- Total $10,836 Australia non-freight revenues were $1.3 million in the quarter ended June 30, 1998 and consisted of $880,000 in revenues from car hire and car rentals and $429,000 in other non-freight revenue. Industrial Switching Revenues Revenues from industrial switching activities were $4.4 million in the quarter ended June 30, 1997 compared to $3.2 million in the quarter ended June 30, 1997, an increase of $1.2 million or 38.7%. The increase was primarily attributable to a broadening of the customer base of Rail Link, Inc. 11 Consolidated Operating Expenses Operating expenses were $32.4 million in the quarter ended June 30, 1998 compared to $19.3 million in the quarter ended June 30, 1997, an increase of $13.1 million or 67.8%. Expenses attributable to operations in Australia represented $10.0 million or 76.4% of the change, with increases in United States operating expenses making up the remaining $3.1 million or 23.6% of the change. The Company's operating ratio increased to 87.4% in the quarter ended June 30, 1998 from 82.2% in the quarter ended June 30, 1997. The increase is primarily attributable to increases in labor and benefits and other expenses in the United States railroad and industrial switching operations. The following table sets forth a comparison of the Company's operating expenses for the second quarters of 1998 and 1997: Operating Expense Comparison Three Months Ended June 30, 1998 and 1997 (dollars in thousands)
1998 1997 ------------------------------- --------------------------------- % of Operating % of Operating Amount Revenues Amount Revenues Labor and benefits $11,336 30.6% $ 8,790 37.4% Equipment rents 2,659 7.2% 2,117 9.0% Purchased services 5,011 13.5% 982 4.2% Depreciation and amortization 2,493 6.7% 1,702 7.2% Diesel fuel 3,184 8.6% 1,164 5.0% Casualties and insurance 1,395 3.8% 1,102 4.7% Materials 1,643 4.4% 1,144 4.9% Other 4,672 12.6% 2,307 9.8% ------- ---- ------- ---- Total $32,393 87.4% $19,308 82.2%
Labor and benefits expense was $11.3 million in the quarter ended June 30, 1998 compared to $8.8 million in the quarter ended June 30, 1997, an increase of $2.5 million or 29.0%, of which $1.2 million or 48.0% is due to the commencement of operations in Australia and $1.3 million or 52.0% is due to increases in United States railroad and switching operations. However, labor costs decreased as a percentage of revenues to 30.6% in the quarter ended June 30, 1998 from 37.4% in the quarter ended June 30, 1997. The decrease is largely attributable to the purchased services nature of the Australia operation in which contractors perform maintenance of track and maintenance of equipment services traditionally performed by labor thus resulting in a much lower labor-to-revenue ratio. Similarly, purchased services expense was $5.0 million in the quarter ended June 30, 1998 compared to $1.0 million in the quarter ended June 30, 1997, an increase of $4.0 million or 410.3%, due primarily to the commencement of operations in Australia. Diesel fuel expense was $3.2 million in the quarter ended June 30, 1998 compared to $1.2 million in the quarter ended June 30, 1997, an increase of $2.0 million or 173.5%. The increase was due to $2.3 million in diesel fuel expense in connection 12 with the commencement of operations in Australia, which was partially offset by a decrease of $285,000 in diesel fuel expense in connection with United States operations. The price of diesel fuel is more expensive in Australia then in the United States on a per unit basis. Other expense was $4.7 million in the quarter ended June 30, 1998 compared to $2.3 million in the quarter ended June 30, 1997, an increase of $2.4 million or 102.5%, of which $1.2 million is due to the commencement of operations in Australia, and $1.2 million is due to increases in United States operations primarily attributable to general and administrative expense increases related to acquisition endeavors and legal costs, and increases in trackage rights expense. Interest Expense and Income Taxes Interest expense in the quarter ended June 30, 1998 was $1.6 million compared to $647,000 in the quarter ended June 30, 1997, an increase of $1.0 million or 153.8%. The increase reflects the growth of overall debt outstanding during the 1998 period compared to the 1997 period due to the financing of the acquisition of assets in Australia; the investment in Genesee Rail-One in Canada; and the acquisition of railroad rolling stock by several domestic subsidiaries. The Company's effective income tax rate was 42.4% in the quarter ended June 30, 1998 compared to 40.5% in the quarter ended June 30, 1997. Net Income The Company's net income in the quarter ended June 30, 1998 was $1.8 million compared to $2.2 million in the quarter ended June 30, 1997, a decrease of $311,000 or 14.4%. Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997 Consolidated Operating Revenues Operating revenues were $74.8 million in the first six months of 1998 compared to $47.6 million in the first six months of 1997, an increase of $27.2 million or 57.3%. The increase was attributable to $24.4 million in revenue from the Australia operation, a $836,000 increase in United States railroad revenue and a $2.0 million increase in industrial switching revenues. The following three sections provide information on railroad revenues in the United States and Australia, and industrial switching revenues in the United States. United States Operating Revenues Operating revenues were $42.0 million in the first six months of 1998 compared to $41.2 million in the first six months of 1997, an increase of $836,000 or 2.0%. The 13 increase was attributable to a $1.3 million increase in non-freight revenues, which was partially offset by a $490,000 decrease in freight revenues. The following table compares United States freight revenues, carloads and average freight revenues per carload for the six months ended June 30, 1998 and 1997: United States Freight Revenues and Carloads Comparison by Commodity Group Six Months Ended June 30, 1998 and 1997
Average Freight Revenues Per Freight Revenues Carloads Carload ---------------- -------- --------- Commodity % of % of % of % of Group 1998 Total 1997 Total 1998 Total 1997 Total 1998 1997 - ------ ---- ----- ---- ----- ---- ----- ---- ----- ---- ---- Coal, Coke & Ores $10,045 30.0% $11,413 33.6% 39,289 34.8% 45,100 40.7% $ 256 $ 253 Pulp & Paper 4,418 13.2% 3,799 11.2% 11,367 10.1% 9,986 9.0% 389 380 Petroleum Products 3,756 11.2% 4,091 12.1% 8,719 7.7% 8,315 7.5% 431 492 Chemicals and Plastics 3,077 9.2% 3,057 9.0% 5,902 5.2% 5,726 5.2% 521 534 Lumber and Forest Products 2,972 8.9% 2,996 8.8% 10,017 8.9% 8,834 8.0% 297 339 Metals 2,908 8.7% 2,437 7.2% 10,751 9.5% 10,349 9.3% 270 236 Farm & Food Products 1,999 6.0% 1,907 5.6% 7,231 6.4% 6,517 5.9% 276 293 Minerals & Stone 1,725 5.2% 1,437 4.2% 6,089 5.4% 5,317 4.8% 283 270 Autos & Auto Parts 1,067 3.2% 1,865 5.5% 2,109 1.9% 3,497 3.2% 506 533 Other 1,463 4.4% 918 2.8% 11,429 10.1% 7,270 6.4% 128 126 - ----- ------- ------ ------- ------ ------- ------ ------- ------ ----- ----- Total $33,430 100.0% $33,920 100.0% 112,903 100.0% 110,911 100.0% $ 296 $ 306
The decrease in United States freight revenues was largely attributable to the decline in freight revenues from shipments of Coal, Autos and Petroleum Products. Freight revenues from Coal were $10.0 million in the six months ended June 30, 1998, compared to $11.4 million in the six months ended June 30, 1997, a decrease of $1.4 million or 12.0% due to reduced shipments of coal resulting from scheduled maintenance at a key customer's facilities. Freight revenues from Autos and Auto Parts were $1.1 million in the six months ended June 30, 1998, compared to $1.9 million in the six months ended June 30, 1997, a decrease of $798,000 or 42.8% due to reduced shipments resulting from loss of a freight contract and labor issues in the auto industry. Freight revenues from Petroleum Products were $3.8 million in the six months ended June 30, 1998, compared to $4.1 million in the six months ended June 30, 1997, a decrease of $335,000 or 8.2% due to reduced shipments of Petroleum Products resulting from scheduled maintenance at a key customer's facilities. The decrease in freight revenues from Coal, Auto and Petroleum Products was partially offset by increases in freight revenues from Pulp & Paper of $619,000 or 16.3%, Metals of $471,000 or 19.3% and Minerals and Stone of $288,000 or 20.0%. Freight revenues from all remaining commodities reflected a net increase of $633,000. 14 Total United States carloads were 112,903 in the six months ended June 30, 1998 compared to 110,911 in the six months ended June 30, 1997, an increase of 1,992 or 1.8%. However, the overall average revenue per carload declined to $296 in the six months ended June 30, 1998, compared to $306 per carload in the six months ended June 30, 1997, a decrease of 3.3% due to changes in commodity mix and traffic patterns. United States non-freight railroad revenues were $8.6 million in the six months ended June 30, 1998 compared to $7.3 million in the six months ended June 30, 1997, an increase of $1.3 million or 18.2%. Australia Operating Revenues (US Dollars) Operating revenues were $24.4 million in the six months ended June 30, 1998 and consisted of $21.6 million in freight revenues and a $2.8 million in non- freight revenues. The following table outlines Australian freight revenues for the six months ended June 30, 1998: Australian Freight Revenue by Commodity Six Months Ended June 30, 1998 (in thousands) Commodity Group Revenue Hook and Pull (Haulage) $ 7,877 Grain 6,472 Coal 3,856 Gypsum 1,541 Marble 1,010 Lime 524 Other 358 ------- Total $21,638 Australia non-freight revenues were $2.8 million in the six months ended June 30, 1998 and consisted of $1.9 million in revenues from car hire and car rentals and $852,000 in other non-freight revenue. 15 Industrial Switching Revenues Revenues from industrial switching activities were $8.4 million in the six months ended June 30, 1997 compared to $6.4 million in the six months ended June 30, 1997, an increase of $2.0 million or 31.2%. The increase was primarily attributable to a broadening of the customer base of Rail Link, Inc. Consolidated Operating Expenses Operating expenses were $65.2 million in the six months ended June 30, 1998 compared to $39.4 million in the six months ended June 30, 1997, an increase of $25.8 million or 65.5%. Expenses attributable to operations in Australia represented $20.6 million or 79.9% of the change, with increases in domestic operating expenses accounting for the remaining $5.2 million or 20.1% of the change. The Company's operating ratio increased to 87.1% in the six months ended June 30, 1998 from 82.7% in six months ended June 30, 1997. The increase is primarily attributable to the higher levels of purchased services and the price of diesel fuel inherent in the Australia operation, changes in the traffic mix, principally related to the level of coal movements in the United States, and to increases in labor and benefits and other expenses in the United States railroad and industrial switching operations. The following table sets forth a comparison of the Company's operating expenses for the six months ended June 30, 1998 and 1997: Operating Expense Comparison Six Months Ended June 30, 1998 and 1997 (dollars in thousands)
1998 1997 ------------------------ ----------------------- % of % of Operating Operating Amount Revenues Amount Revenues Labor and benefits $22,521 30.1% $17,734 37.3% Equipment rents 5,939 7.9% 4,552 9.6% Purchased services 10,185 13.6% 1,998 4.2% Depreciation and amortization 4,798 6.4% 3,221 6.8% Diesel fuel 6,718 9.0% 2,507 5.3% Casualties and insurance 2,698 3.6% 2,633 5.5% Materials 3,090 4.1% 2,113 4.4% Other 9,211 12.4% 4,607 9.6% ------- ---- ------- ---- Total $65,160 87.1% $39,365 82.7%
Labor and benefits expense was $22.5 million in the six months ended June 30, 1998 compared to $17.7 million in the six months ended June 30, 1997, an increase of $4.8 million or 27.0%, of which $2.6 million or 54.6% was due to the commencement of operations in Australia and $2.2 million or 45.4% was due to increases in United States railroad and switching operations. However, labor costs decreased as a percentage of revenues to 30.1% in the six months ended June 30, 1998 from 37.3% in the six months ended June 30, 1997. The decrease is largely attributable to the 16 purchased services nature of the Australia operation in which contractors perform maintenance of track and maintenance of equipment services traditionally performed by labor thus resulting in a much lower labor-to-revenue ratio. Similarly, purchased services expense was $10.2 million in the six months ended June 30, 1998 compared to $2.0 million in the six months ended June 30, 1997, an increase of $8.2 million or 409.8%, due primarily to the commencement of operations in Australia. Diesel fuel expense was $6.7 million in the six months ended June 30, 1998 compared to $2.5 million in the six months ended June 30, 1997, an increase of $4.2 million or 168.0%. This increase was due to $4.8 million in diesel fuel expense in connection with the commencement of operations in Australia, which was partially offset by a decrease of $558,000 in diesel fuel expense in connection with United States operations. The price of diesel fuel is more expensive in Australia then in the United States on a per unit basis. Other expense was $9.2 million in the six months ended June 30, 1998 compared to $4.6 million in the six months ended June 30, 1997, an increase of $4.6 million or 99.9%, of which $2.4 million or 53.2% is due to the commencement of operations in Australia and $2.2 million or 46.8% is due to increases in United States operations primarily attributable to general and administrative increases related to acquisition endeavors and legal costs, and trackage rights expense increases. Interest Expense and Income Taxes Interest expense in the six months ended June 30, 1998 was $3.2 million compared to $1.2 million in the six months ended June 30, 1997, an increase of $2.0 million or 162.4%. The increase reflects the growth of overall debt outstanding during the 1998 period compared to the 1997 period due to the financing of the acquisition of assets in Australia; the investment in Genesee Rail-One in Canada; and the acquisition of railroad rolling stock by several domestic subsidiaries. The Company's effective income tax rate was 41.1% in the six months ended June 30, 1998 compared to 40.6% in the six months ended June 30, 1997. Net Income The Company's net income in the six months ended June 30, 1998 was $4.1 million compared to $4.3 million in the six months ended June 30, 1997, a decrease of $163,000 or 3.8%. Liquidity and Capital Resources On August 12, 1998, the Company announced that it would repurchase up to one million shares of its Class A Common Stock in accordance with Exchange Act Rule 10b-18. Purchases will be made from time to time in the open market and will continue until all of such shares are repurchased or until the Company determines to terminate the repurchase program. Repurchased shares will be held in the Company treasury and may be used for customary corporate purposes. During the six months ended June 30, 1998 the Company generated cash from operations of $16.8 million, invested $9.5 million in capital assets, had a net increase in debt of $4.9 million and received $1.4 million in proceeds from the disposition of property. During the six months ended June 30, 1997 the Company generated cash from operations of $2.3 million, had a net reduction in debt of $1.7 million, entered into a $5.3 million long-term capital lease for rolling stock and recorded $1.2 million in net proceeds on governmental grants. A total of $9.1 million was invested in capital assets of which $5.3 million represented rolling stock under the 17 long-term capital lease. The Company received $266,000 in proceeds from the disposition of property. The Company has budgeted approximately $12.0 million in capital expenditures in 1998, primarily for track rehabilitation, of which $1.5 million is expected to be used to complete an obligation to replace rail under the terms of a lease of one of the Company's railroads in the United States, and $2.5 million is expected to be used in Australia. Approximately $9.5 million of the budgeted capital expenditures of $12.0 million were completed as of June 30, 1998. At June 30, 1998 the Company had long-term debt (including current portion) totaling $77.9 million, which comprised 52.0% of its total capitalization. This compares to long-term debt, including current portion, of $22.4 million at June 30, 1997, comprising 25.3% of total capitalization. The Company has historically relied primarily on cash generated from operations to fund working capital and capital expenditures relating to ongoing operations, while relying on borrowed funds to finance acquisitions and equipment needs (primarily rolling stock) related to acquisitions. The Company believes that its cash flow from operations together with amounts available under its credit facilities will enable the Company to meet its liquidity and capital expenditure requirements relating to ongoing operations for at least the duration of its credit facilities. Forward-Looking Statements This Report and the documents incorporated herein by reference may contain forward-looking statements based on current expectations, estimates and projections about the Company's industry, management's beliefs and assumptions made by management. Words such as "anticipates," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are no guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to forecast. Therefore, actual results may differ materially from those expressed or forecast in any such forward-looking statements. Such risks and uncertainties include, in addition to those set forth in this Item 2, those noted in the documents incorporated by reference. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not applicable. The remainder of this page is intentionally left blank. 18 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On August 6, 1998, a lawsuit was commenced against the Company and its subsidiary, Illinois & Midland Railroad, Inc. ("IMRR"), by Commonwealth Edison Company ("ComEd") in the Circuit Court of Cook County, Illinois. The suit alleges that IMRR is in breach of certain provisions of a 1987 agreement entered into by a prior unrelated owner of the IMRR rail line. The provisions pertain to limitations on rates received by IMRR and by the unrelated predecessor on freight hauled for ComEd's Powerton plant. The suit seeks unspecified compensatory damages in excess of $100,000. ComEd is IMRR's largest customer and in 1997 accounted for 15% of the consolidated revenues of the Company and its subsidiaries. The Company believes the suit is without merit. IMRR intends to vigorously defend against the suit. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS - NONE ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE ITEM 5. OTHER INFORMATION - NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A). EXHIBITS - SEE INDEX TO EXHIBITS (B) REPORTS ON FORM 8-K: No Reports on Form 8-K were filed by the Registrant during the period covered by this Report. The remainder of this page is intentionally left blank. 19 INDEX TO EXHIBITS (2) Plan of acquisition, reorganization, arrangement, liquidation or succession Not applicable. (3) (i) Articles of Incorporation The Form of Restated Certificate of Incorporation referenced under (4)(a) hereof is incorporated herein by reference. (ii) By-laws The By-laws referenced under (4)(b) hereof are incorporated herein by reference. (4) Instruments defining the rights of security holders, including indentures (a) Form of Restated Certificate of Incorporation (Exhibit 3.2)2 (b) By-laws (Exhibit 3.3)1 (c) Specimen stock certificate representing shares of Class A Common Stock (Exhibit 4.1)3 (d) Form of Class B Stockholders' Agreement dated as of May 20, 1996, among the Registrant, its executive officers and its Class B stockholders (Exhibit 4.2)2 (e) Promissory Note dated October 7, 1991 of Buffalo & Pittsburgh Railroad, Inc. in favor of CSX Transportation, Inc. (Exhibit 4.6)1 (f) Second Amendment and Restated Revolving Credit Agreement dated as of October 31, 1997 among the Registrant, its subsidiaries, BankBoston, N.A. and the banks named therein (Exhibit 4.1)4 (10) Material Contracts *(10.1) Amendment No. 2 to the Genesee & Wyoming Inc. 1996 Stock Option Plan *(10.2) Amendment No. 1 to the Genesee & Wyoming Inc. Employee Stock Purchase Plan *(11.1) Statement re computation of per share earnings (15) Letter re unaudited interim financial information Not applicable. (18) Letter re change in accounting principles Not applicable. 20 (19) Report furnished to security holders Not applicable. (22) Published report regarding matters submitted to vote of security holders Not applicable. (23) Consents of experts and counsel Not applicable. (24) Power of attorney Not applicable. *(27) Financial Data Schedule (99) Additional Exhibits Not applicable. ____________________________ *Exhibit filed with this Report. 1Exhibit previously filed as part of, and incorporated herein by reference to, the Registrant's Registration Statement on Form S-1 (Registration No. 333-3972). The exhibit number contained in parenthesis refers to the exhibit number in such Registration Statement. 2Exhibit previously filed as part of, and incorporated herein by reference to, Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-3972). The exhibit number contained in parenthesis refers to the exhibit number in such Amendment. 3Exhibit previously filed as part of, and incorporated herein by reference to, Amendment No. 2 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-3972). The exhibit number contained in parenthesis refers to the exhibit number in such Amendment. 4Exhibit previously filed as part of, and incorporated herein by reference to, the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1997. The exhibit number contained in parenthesis refers to the exhibit number in such Report. The remainder of this page is intentionally left blank. 21 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GENESEE & WYOMING INC. Date: August 14, 1998 By: /s/ Mortimer B. Fuller, III --------------------------- Name: Mortimer B. Fuller, III Title: Chairman of the Board and CEO Date: August 14, 1998 By: /s/ Alan R. Harris --------------------------- Name: Alan R. Harris Title: Senior Vice President and Chief Accounting Officer The remainder of this page is intentionally left blank. 22 EX-10.1 2 AMENDMENT #2 TO 1996 STOCK OPTION PLAN EXHIBIT 10.1 AMENDMENT NO. 2 TO THE GENESEE & WYOMING INC. 1996 STOCK OPTION PLAN EFFECTIVE MARCH 28, 1998 (SUBJECT TO SUBSEQUENT RATIFICATION BY THE STOCKHOLDERS) WHEREAS, Genesee & Wyoming Inc., a Delaware corporation (the "Company"), has established the Genesee & Wyoming Inc. 1996 Stock Option Plan, as heretofore amended (the "Plan"); and WHEREAS, deeming it appropriate and advisable so to do, and pursuant to Section 19 of the Plan, the Board of Directors of the Company has authorized, approved and adopted the further amendment to the Plan set forth herein; NOW, THEREFORE, the Plan is hereby amended, effective March 28, 1998, as set forth below; provided, however, that if the stockholders of the Company fail to approve and ratify at the next Annual Meeting of Stockholders of the Company both (i) this Amendment and (ii) Amendment No. 1 to the Genesee & Wyoming Inc. Employee Stock Purchase Plan, then this Amendment shall be null and void and of no effect: 1. The first sentence of Section "4. NUMBER OF SHARES." of the Plan is hereby amended to provide in its entirety as follows (with the remainder of said Section 4 being unchanged and unaffected by this Amendment and continuing in full force and effect): "Subject to the provisions of Section 5, the total number of shares of the Company's Class A Common Stock, par value $.01 per share (the `Class A Common Stock'), which may be issued under Options granted pursuant to the Plan shall not exceed 850,000." 2. Except as amended hereby, the Plan shall remain in full force and effect in accordance with its terms. THIS AMENDMENT NO. 2 TO THE GENESEE & WYOMING INC. 1996 STOCK OPTION PLAN WAS AUTHORIZED, APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS OF THE COMPANY ON MARCH 28, 1998, AND APPROVED AND RATIFIED BY THE STOCKHOLDERS OF THE COMPANY ON MAY 12, 1998. /S/ JAMES B. GRAY, JR. ---------------------- JAMES B. GRAY, JR., SECRETARY EX-10.2 3 AMENDMENT #1 TO EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 10.2 AMENDMENT NO. 1 TO THE GENESEE & WYOMING INC. EMPLOYEE STOCK PURCHASE PLAN EFFECTIVE MARCH 28, 1998 (SUBJECT TO SUBSEQUENT RATIFICATION BY THE STOCKHOLDERS) WHEREAS, Genesee & Wyoming Inc., a Delaware corporation (the "Company"), has established the Genesee & Wyoming Inc. Employee Stock Purchase Plan (the "Plan"); and WHEREAS, deeming it appropriate and advisable so to do, and pursuant to Section 15 of the Plan, the Board of Directors of the Company has authorized, approved and adopted the amendment to the Plan set forth herein; NOW, THEREFORE, the Plan is hereby amended, effective March 28, 1998, as set forth below; provided, however, that if the stockholders of the Company fail to approve and ratify at the next Annual Meeting of Stockholders of the Company both (i) this Amendment and (ii) Amendment No. 2 to the Genesee & Wyoming Inc. 1996 Stock Option Plan, then this Amendment shall be null and void and of no effect: 1. The first sentence of Section "3. SHARES SUBJECT TO THE PLAN" of the Plan is hereby amended to provide in its entirety as follows (with the remainder of said Section 3 being unchanged and unaffected by this Amendment and continuing in full force and effect): "Subject to the provisions of Section 12, the total number of shares of Class A Common Stock which may be purchased by employees under the Plan shall not exceed 250,000." 2. Except as amended hereby, the Plan shall remain in full force and effect in accordance with its terms. THIS AMENDMENT NO. 1 TO THE GENESEE & WYOMING INC. EMPLOYEE STOCK PURCHASE PLAN WAS AUTHORIZED, APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS OF THE COMPANY ON MARCH 28, 1998, AND APPROVED AND RATIFIED BY THE STOCKHOLDERS OF THE COMPANY ON MAY 12, 1998. /S/ JAMES B. GRAY, JR. ---------------------- JAMES B. GRAY, JR., SECRETARY EX-11.1 4 COMPUTATION OF EARNINGS PER COMMON SHARE Exhibit 11.1 GENESEE & WYOMING INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (in thousands, except per share amounts)
Three Months Six Months Ended Ended June 30, 1998 June 30, 1998 ------------- ------------- BASIC EARNINGS PER SHARE CALCULATION: Net Income $1,846 $4,128 Weighted average number of shares of common stock 5,294 5,294 Earnings per share - basic $0.35 $0.78 DILUTED EARNINGS PER SHARE CALCULATION: Net Income $1,846 $4,128 Weighted average number of shares of common stock and common stock equivalents outstanding: Weighted average number of shares of common stock 5,294 5,294 Common stock equivalents issuable under stock option plans 106 104 Weighted average number of shares of common stock and common stock equivalents - diluted 5,400 5,398 Earnings per share - diluted $ 0.34 $0.76
EX-27.1 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE SHEET INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 25,104 0 29,304 0 3,379 63,591 156,649 27,808 220,438 38,697 77,424 0 0 53 71,898 220,438 74,806 74,806 65,160 65,160 0 0 2,635 7,011 2,883 4,128 0 0 0 4,128 0.78 0.76
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