10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________

FORM 10-Q

________________________________________________

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 001-31456

________________________________________________

GENESEE & WYOMING INC.

(Exact name of registrant as specified in its charter)

________________________________________________

Delaware	06-0984624
(State or other jurisdiction of incorporation or organization)	(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)

________________________________________________

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    o  NO

Indicate by check mark whether the registrant has submitted electronically or posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-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).    x  YES    o  NO

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer	x	Accelerated Filer	o
Non-Accelerated Filer	o  (Do not check if a smaller reporting company)	Smaller Reporting Company	o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    o  YES    x  NO

Shares of common stock outstanding as of the close of business on July 29, 2011:

Class	Number of Shares Outstanding
Class A Common Stock	40,068,216
Class B Common Stock	2,206,343

INDEX
		Page
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited):
	Consolidated Balance Sheets - As of June 30, 2011 and December 31, 2010	4
	Consolidated Statements of Operations - For the Three and Six Months Ended June 30, 2011 and 2010	5
	Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2011 and 2010	6
	Notes to Consolidated Financial Statements	7-16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18-39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
Part II.	Other Information	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	(Removed and Reserved)	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
Signatures		41
Index to Exhibits		42

2

Forward-Looking Statements

This report and other documents referred to in this report contain forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that are based on current expectations, estimates and projections about our industry, our business and our performance, management’s beliefs, and assumptions made by management. Words such as “anticipates,” “intends,” “plans,” “believes,” “should,” “seeks,” “expects,” “estimates,” “trends,” “outlook,” variations of these words and similar expressions are intended to identify these forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions, including the following risks applicable to all of our operations: risks related to the acquisition and integration of railroads; economic and competitive uncertainties and contingencies and third-party approvals; economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we are subject; increased competition in relevant markets; funding needs and financing sources; unpredictability of fuel costs; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others including, but not limited to, those set forth in this Item 2 and Part II, Item 1A, if any, and those noted in our 2010 Annual Report on Form 10-K under “Risk Factors.” Therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Forward-looking statements speak only as of the date of this report or as of the date they were made. We disclaim any intention to update the current expectations or forward-looking statements contained in this report.

3

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2011 and DECEMBER 31, 2010

(dollars in thousands, except share amounts)

(unaudited)

	June 30, 2011			December 31, 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	25,938		$	27,417
Accounts receivable, net	153,331			132,225
Materials and supplies	15,524			13,259
Prepaid expenses and other	12,559			14,529
Deferred income tax assets, net	21,889			21,518
Total current assets	229,241			208,948
PROPERTY AND EQUIPMENT, net	1,503,388			1,444,177
GOODWILL	162,737			160,629
INTANGIBLE ASSETS, net	235,029			237,355
DEFERRED INCOME TAX ASSETS, net	2,420			2,879
OTHER ASSETS, net	13,144			13,572
Total assets	$	2,145,959		$	2,067,560
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	102,771		$	103,690
Accounts payable	132,258			124,948
Accrued expenses	51,806			76,248
Total current liabilities	286,835			304,886
LONG-TERM DEBT, less current portion	462,150			475,174
DEFERRED INCOME TAX LIABILITIES, net	274,325			263,361
DEFERRED ITEMS - grants from outside parties	190,796			183,356
OTHER LONG-TERM LIABILITIES	28,135			23,543
COMMITMENTS AND CONTINGENCIES	—			—
STOCKHOLDERS’ EQUITY:
Class A Common Stock, $0.01 par value, one vote per share; 180,000,000 and 90,000,000 shares authorized at June 30, 2011 and December 31, 2010, respectively; 52,526,102 and 51,861,249 shares issued and 40,066,867 and 39,426,351 shares outstanding (net of 12,459,235 and 12,434,898 shares in treasury) on June 30, 2011 and December 31, 2010, respectively	525			519
Class B Common Stock, $0.01 par value, ten votes per share; 30,000,000 and 15,000,000 shares authorized at June 30, 2011 and December 31, 2010, respectively; 2,206,343 and 2,409,027 shares issued and outstanding on June 30, 2011 and December 31, 2010, respectively	22			24
Additional paid-in capital	375,975			358,024
Retained earnings	675,452			622,185
Accumulated other comprehensive income	56,656			40,114
Treasury stock, at cost	(204,912		)	(203,626		)
Total stockholders’ equity	903,718			817,240
Total liabilities and stockholders’ equity	$	2,145,959		$	2,067,560

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

4

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDEDJUNE 30, 2011 and 2010

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
OPERATING REVENUES	$	209,589		$	158,453		$	401,500		$	304,032
OPERATING EXPENSES:
Labor and benefits	58,966			51,329			117,048			101,517
Equipment rents	11,011			8,266			21,578			15,915
Purchased services	19,942			12,895			37,384			23,292
Depreciation and amortization	16,297			12,452			32,158			24,900
Diesel fuel used in operations	22,629			10,605			44,027			21,642
Diesel fuel sold to third parties	4,500			3,910			8,579			7,703
Casualties and insurance	6,228			3,123			11,666			7,027
Materials	6,090			6,004			12,673			11,481
Net gain on sale of assets	(1,088		)	(1,399		)	(2,098		)	(1,848		)
Gain on insurance recoveries	(1,018		)	—			(1,043		)	—
Other operating expenses	14,867			13,395			29,160			24,424
Total operating expenses	158,424			120,580			311,132			236,053
INCOME FROM OPERATIONS	51,165			37,873			90,368			67,979
Interest income	858			471			1,633			894
Interest expense	(10,253		)	(5,411		)	(20,192		)	(10,773		)
Gain on sale of investments	625			—			894			—
Other income/(expense), net	170			(175		)	469			275
Income from continuing operations before income taxes	42,565			32,758			73,172			58,375
Provision for income taxes	11,420			12,067			19,905			21,708
Income from continuing operations, net of tax	31,145			20,691			53,267			36,667
Loss from discontinued operations, net of tax	—			(56		)	—			(72		)
Net income	$	31,145		$	20,635		$	53,267		$	36,595
Basic earnings per share:
Basic earnings per common share from continuing operations	$	0.78		$	0.53		$	1.34		$	0.95
Basic loss per common share from discontinued operations	—			—			—			—
Basic earnings per common share	$	0.78		$	0.53		$	1.34		$	0.95
Weighted average shares - basic	39,903			38,831			39,695			38,711
Diluted earnings per share:
Diluted earnings per common share from continuing operations	$	0.73		$	0.50		$	1.25		$	0.88
Diluted loss per common share from discontinued operations	—			—			—			—
Diluted earnings per common share	$	0.73		$	0.49		$	1.25		$	0.88
Weighted average shares - diluted	42,757			41,723			42,654			41,595

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

5

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDEDJUNE 30, 2011 and 2010

(dollars in thousands)

(unaudited)

	Six Months Ended
	June 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	53,267		$	36,595
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations	—			72
Depreciation and amortization	32,158			24,900
Compensation cost related to equity awards	3,839			3,694
Excess tax benefit from share-based compensation	(2,049		)	(969		)
Deferred income taxes	11,071			12,063
Net gain on sale of assets	(2,098		)	(1,848		)
Gain on sale of investments	(894		)	—
Gain on insurance recoveries	(1,043		)	—
Insurance proceeds received	24			—
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions:
Accounts receivable trade, net	(17,612		)	(5,796		)
Materials and supplies	(1,763		)	(314		)
Prepaid expenses and other	2,048			(1,989		)
Accounts payable and accrued expenses	(24,174		)	8,526
Other assets and liabilities, net	(813		)	(1,155		)
Net cash provided by operating activities from continuing operations	51,961			73,779
Net cash used in operating activities from discontinued operations	(5		)	(87		)
Net cash provided by operating activities	51,956			73,692
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(62,065		)	(28,599		)
Grant proceeds from outside parties	11,700			17,986
Cash paid for acquisitions, net of cash acquired	(440		)	—
Proceeds from sale of investments	1,369			208
Proceeds from disposition of property and equipment	3,106			3,293
Net cash used in investing activities from continuing operations	(46,330		)	(7,112		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings, including capital leases	(115,764		)	(13,637		)
Proceeds from issuance of long-term debt	94,612			—
Debt amendment costs	—			(1,641		)
Proceeds from employee stock purchases	12,631			5,219
Treasury stock purchases	(1,287		)	(846		)
Excess tax benefit from share-based compensation	2,049			969
Net cash used in financing activities from continuing operations	(7,759		)	(9,936		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	653			(3,147		)
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS	1			87
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(1,479		)	53,584
CASH AND CASH EQUIVALENTS, beginning of period	27,417			105,707
CASH AND CASH EQUIVALENTS, end of period	$	25,938		$	159,291

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

6

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 (the Company). All references to currency amounts included in this Quarterly Report on Form 10-Q, including the consolidated financial statements, are in United States dollars unless specifically noted otherwise. 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 (SEC). They do not contain all disclosures which would be required in a full set of financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, the unaudited financial statements for the three and six months ended June 30, 2011 and 2010, are presented on a basis consistent with the audited financial statements and contain all adjustments, consisting only of normal recurring adjustments, necessary to provide a fair statement of the results for interim periods. The results of operations for interim periods are not necessarily indicative of results of operations for the full year. The consolidated balance sheet data for 2010 was derived from the audited financial statements in the Company’s 2010 Annual Report on Form 10-K but does not include all disclosures required by U.S. GAAP.

The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2010, included in the Company’s 2010 Annual Report on Form 10-K.

2. CHANGES IN OPERATIONS:

Australia

On December 1, 2010, the Company completed the acquisition of the assets of FreightLink Pty Ltd, Asia Pacific Transport Pty Ltd and related corporate entities (together, FreightLink) for A$331.9 million (or $320.0 million at the exchange rate on December 1, 2010) (FreightLink Acquisition). The Company has included the results from GWA (North) Pty Ltd (GWA North), the Company’s subsidiary that acquired certain assets of FreightLink, in its statement of operations since December 1, 2010. Pursuant to the Business Sale Agreement, the Company acquired FreightLink’s freight rail business between Tarcoola in South Australia and Darwin in the Northern Territory of Australia, certain material contracts, equipment and property leases, as well as FreightLink’s plant, equipment and business inventory. In addition, as part of the acquisition, GWA North assumed debt with a carrying value of A$1.8 million (or $1.7 million at the exchange rate on December 1, 2010), which represents the fair value of an A$50.0 million (or $48.2 million at the exchange rate on December 1, 2010) non-interest bearing loan due in 2054.

As a result of the acquisition, GWA North is now the concessionaire and operator of the Tarcoola to Darwin rail line, which links the Port of Darwin to the Australian interstate rail network in South Australia. The rail line is located on land leased to GWA North by the AustralAsia Railway Corporation (a statutory corporation established by legislation in the Northern Territory) under a concession agreement that expires in 2054. GWA North is both a provider of rail haulage to customers on its railroad (above rail services), as well as a track owner, charging access fees to any rail operators that run on its track (below rail services). The track access rights are regulated under a statutory access regime established by legislation in the Northern Territory and South Australia. The Company’s subsidiary, Genesee & Wyoming Australia Pty Ltd (GWA), historically operated FreightLink’s rail haulage services, provided its crews, managed its train operations and leased locomotives and wagons to FreightLink. As a result of the acquisition, approximately A$25 million (or $27 million at the June 30, 2011 exchange rate) of annual GWA non-freight revenues generated from services provided to FreightLink will be eliminated in consolidation in the post-acquisition period. This elimination will not have any effect on operating income of the Company.

The Company accounted for the transaction using the acquisition method of accounting under U.S. GAAP. Under the acquisition method of accounting, the assets and liabilities of FreightLink have been recorded at their respective estimated acquisition-date fair values and have been consolidated with those of the Company as of the acquisition date. The foreign exchange rate

used to translate the preliminary balance sheet to United States dollars was $0.96 for one Australian dollar (the exchange rate on December 1, 2010).

7

The preliminary acquisition-date fair values assigned to the acquired net assets were as follows (dollars in thousands):

	Australian Dollars		United States Dollars
Accounts receivable	$	161	$	155
Materials and supplies	3,328		3,209
Prepaid expenses and other	101		97
Deferred income tax assets	171		165
Property and equipment	330,712		318,843
Total assets	$	334,473	$	322,469
Accrued expenses	$	731	$	705
Long-term debt	1,806		1,741
Net assets	$	331,936	$	320,023

The Company financed the purchase of FreightLink’s assets through a combination of cash on hand and borrowing $100.0 million and A$97.0 million (or $94.0 million at the December 1, 2010 exchange rate) under its credit agreement, as amended.

Canada

Huron Central Railway Inc.: In June 2009, the Company announced that its subsidiary, Huron Central Railway Inc. (HCRY), intended to cease its operations in the third quarter of 2009. Consequently, in the second quarter of 2009, the Company recorded charges of $5.4 million after-tax associated with HCRY. These charges reflected a non-cash write-down of non-current assets of $6.7 million and restructuring charges of $2.3 million and were partially offset by a tax benefit of $3.6 million. In September 2010, the governments of Canada and the Province of Ontario agreed to provide C$30 million (or $31 million at the June 30, 2011 exchange rate) to fund infrastructure improvements that, combined with certain customer agreements, will enable HCRY to continue operations on a long-term basis. In addition, HCRY has committed to fund approximately C$3 million (or $3 million at the June 30, 2011 exchange rate) of infrastructure improvements. As a result, the Company reversed $2.3 million ($1.5 million after-tax) of accrued restructuring charges related to HCRY in September 2010, as HCRY no longer intends to cease its operations. Because of the substance of the temporary agreement HCRY was operating under from August 15, 2009, through December 31, 2010, HCRY’s net operating earnings were included within non-freight revenues as other operating income. On January 1, 2011, HCRY began operating under a new agreement with certain customers. Because of the substance of the new arrangement, on January 1, 2011, the Company resumed reporting HCRY’s operating revenues, including freight revenues and corresponding carloads, and operating expenses on a gross basis within each respective line item of the statement of operations.

Discontinued Operations

In August 2009, the Company completed the sale of 100% of the share capital of its Mexican operating subsidiary, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM) to Viablis, S.A. de C.V. (Viablis). The net assets, results of operations and cash flows of the Company’s remaining Mexican subsidiary, GW Servicios S.A., which were classified as discontinued operations, were not material as of and for the three and six months ended June 30, 2011 and 2010. The Company does not expect any material future adverse financial impact from its remaining Mexican subsidiary.

Results from Continuing Operations

When comparing the Company’s results from continuing operations from one reporting period to another, consider that the Company has historically experienced fluctuations in revenues and expenses due to economic conditions, acquisitions, competitive forces, one-time freight moves, fuel price fluctuations, customer plant expansions and shut-downs, sales of property and equipment, derailments and weather-related conditions, such as hurricanes, cyclones, droughts, heavy snowfall, freezing and flooding. In periods when these events occur, results of operations are not easily comparable from one period to another. Finally, certain of the Company’s railroads have commodity shipments that are sensitive to general economic conditions, including steel products, paper products and lumber and forest products. However, shipments of other commodities are relatively less affected by economic conditions and are more closely affected by other factors, such as inventory levels maintained at customer plants, winter weather (salt) and seasonal rainfall (South Australian grain). As a result of these and other factors, the Company’s operating results in any reporting period may not be directly comparable to its operating results in other reporting periods.

8

Pro Forma Financial Results

The following table summarizes the Company’s unaudited pro forma operating results for the three and six months ended June 30, 2010, as if the FreightLink Acquisition had been consummated as of January 1, 2009. The following pro forma financial results do not include the impact of any potential operating efficiencies, savings from expected synergies, costs to integrate the operations or costs necessary to achieve savings from expected synergies or the impact of derivative instruments that the Company has entered into or may enter into to mitigate interest rate or currency exchange rate risk (dollars in thousands, except per share amounts):

	Three Months Ended		Six Months Ended
	June 30, 2010		June 30, 2010
Operating revenues	$	182,112	$	347,842
Net income	$	22,995	$	39,793
Earnings per common share:
Basic earnings per common share from continuing operations	$	0.59	$	1.03
Diluted earnings per common share from continuing operations	$	0.55	$	0.96

The unaudited pro forma operating results for the three and six months ended June 30, 2010, include the FreightLink Acquisition adjusted, net of tax, for depreciation and amortization expense resulting from the property and equipment assets based on the preliminary assignment of fair values, an adjustment to interest income for the reduction in available cash and cash equivalents due to the use of cash on hand to fund the acquisition, the inclusion of interest expense related to borrowings used to fund the acquisition, the amortization of debt issuance costs related to amendments to the Company’s credit agreement, the elimination of FreightLink’s deferred grant income for a liability not acquired and the elimination of FreightLink’s interest expense related to debt not assumed in the acquisition. In addition, the unaudited pro forma operating results include an additional tax provision to report FreightLink as a tax paying entity using the Australian statutory income tax rate of 30%.

The pro forma financial information does not purport to be indicative of the results that actually would have been obtained had the transactions been completed as of the assumed date and for the period presented and are not intended to be a projection of future results or trends.

9

3.    EARNINGS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per share (EPS) for the three and six months ended June 30, 2011 and 2010 (in thousands, except per share amounts):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Numerators:
Income from continuing operations, net of tax	$	31,145	$	20,691		$	53,267	$	36,667
Loss from discontinued operations, net of tax	—		(56		)	—		(72		)
Net income	$	31,145	$	20,635		$	53,267	$	36,595
Denominators:
Weighted average Class A common shares outstanding - Basic	39,903		38,831			39,695		38,711
Weighted average Class B common shares outstanding	2,218		2,484			2,311		2,503
Dilutive effect of employee stock grants	636		408			648		381
Weighted average shares - Diluted	42,757		41,723			42,654		41,595
Basic:
Earnings per common share from continuing operations	$	0.78	$	0.53		$	1.34	$	0.95
Loss per common share from discontinued operations	—		—			—		—
Earnings per common share	$	0.78	$	0.53		$	1.34	$	0.95
Diluted:
Earnings per common share from continuing operations	$	0.73	$	0.50		$	1.25	$	0.88
Loss per common share from discontinued operations	—		—			—		—
Earnings per common share	$	0.73	$	0.49		$	1.25	$	0.88

The following total number of Class A common stock issuable under the assumed exercise of stock options computed based on the treasury stock method were excluded from the calculation of diluted earnings per common share, as the effect of including these shares would have been anti-dilutive:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Anti-dilutive shares	98,129	634,883	78,441	677,410

4. ACCOUNTS RECEIVABLE:

Accounts receivable consisted of the following as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
Accounts receivable - trade	$	139,033		$	118,265
Accounts receivable - grants	17,277			17,039
Total accounts receivable	156,310			135,304
Less: Allowance for doubtful accounts	(2,979		)	(3,079		)
Accounts receivable, net	$	153,331		$	132,225

5. DERIVATIVE FINANCIAL INSTRUMENTS:

The Company actively monitors its exposure to interest rate and foreign currency exchange rate risks and uses derivative financial instruments to manage the impact of certain of these risks. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of

10

earning financial gains on the interest rate or exchange rate fluctuations alone, nor does the Company use derivative instruments where it does not have underlying exposures. Complex instruments involving leverage or multipliers are not used. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. Management believes its use of derivative instruments to manage risk is in the Company’s best interest. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in prepaid expenses and other assets, net, accrued expenses or other long-term liabilities.

The Company may designate derivatives as a hedge of a forecasted transaction or a hedge of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). The portion of the changes in the fair value of the derivative used as a cash flow hedge that is offset by changes in the expected cash flows related to a recognized asset or liability (the effective portion) is recorded in other comprehensive income/(loss). As the hedged item is realized, the gain or loss included in accumulated other comprehensive income is reported in the consolidated statements of operations on the same line item as the hedged item. The portion of the changes in the fair value of derivatives used as cash flow hedges that is not offset by changes in the expected cash flows related to a recognized asset or liability (the ineffective portion) is immediately recognized in earnings on the same line item as the hedged item.

The Company matches the hedge instrument to the underlying hedged item (assets, liabilities, firm commitments or forecasted transactions). At hedge inception and at least quarterly thereafter, the Company assesses whether the derivatives used to hedge transactions are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. When it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting, and any gains or losses on the derivative instrument thereafter are recognized in earnings during the periods it no longer qualifies as a hedge.

From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes. For example, to mitigate currency exposures related to intercompany debt, cross-currency swap contracts may be entered into for periods consistent with the underlying debt. The Company believes such instruments are closely correlated with the underlying exposure, thus reducing the associated risk. The gains or losses from the changes in the fair value of derivative instruments not accounted for as hedges are recognized in current period earnings within other income/(expense).

Interest Rate Risk Management

The Company uses interest rate swap agreements to manage its exposure to changes in interest rates of the Company’s variable rate debt. These swap agreements are recorded in the consolidated balance sheets at fair value. Changes in the fair value of the swap agreements are recorded in net income or other comprehensive income/(loss) based on whether the agreements are designated as part of a hedge transaction and whether the agreements are effective in offsetting the change in the value of the future interest payments attributable to the underlying portion of the Company’s variable rate debt. Interest payments accrued each reporting period for these interest rate swaps are recognized in interest expense.

The Company formally documents its hedge relationships, including identifying the hedge instruments and hedged items, as well as its risk management objectives and strategies for entering into the hedge transaction. On October 2, 2008, the Company entered into an interest rate swap agreement to manage its exposure to interest rates on a portion of its outstanding borrowings. The swap has a notional amount of $120.0 million and requires the Company to pay a fixed rate of 3.88% on the notional amount. In return, the Company receives one-month LIBOR on the notional amount of the swap, which is equivalent to the Company’s variable rate portion of its interest obligation on the notional amount under its credit agreement. This swap expires on September 30, 2013. The fair value of the interest rate swap agreement was estimated based on Level 2 inputs. The Company’s effectiveness testing as of June 30, 2011, resulted in no amount of gain or loss reclassified from accumulated other comprehensive income into earnings.

Foreign Currency Exchange Rate Risk

As of June 30, 2011, $160.5 million of third-party debt, related to the Company’s foreign operations, is denominated in the currencies in which its subsidiaries operate, including the Australian dollar, Canadian dollar and Euro. The debt service obligations associated with this foreign currency debt are generally funded directly from those operations. As a result, foreign currency risk related to this portion of the Company’s debt service payments is limited. However, in the event the foreign currency debt service is not paid from the Company’s foreign operations, the Company may face exchange rate risk if the Australian or Canadian dollar or Euro were to appreciate relative to the United States dollar and require higher United States dollar equivalent cash.

The Company is also exposed to foreign currency exchange rate risk related to its foreign operations, including non-

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functional currency intercompany debt, typically from the Company’s United States operations to its foreign subsidiaries, and any timing difference between announcement and closing of an acquisition of a foreign business to the extent such acquisition is funded with United States dollars. To mitigate currency exposures related to non-functional currency denominated intercompany debt, cross-currency swap contracts may be entered into for periods consistent with the underlying debt. In determining the fair value of the derivative contract, the significant inputs to valuation models are quoted market prices of similar instruments in active markets. To mitigate currency exposures of non-United States dollar denominated acquisitions, the Company may enter into foreign exchange forward contracts. Although these derivative contracts do not qualify for hedge accounting, the Company believes that such instruments are closely correlated with the underlying exposure, thus reducing the associated risk. The gains or losses from changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings within other income/(expense).

On December 1, 2010, the Company completed the FreightLink Acquisition for A$331.9 million (or $320.0 million at the exchange rate on December 1, 2010). The Company financed the acquisition through a combination of cash on hand and borrowings under its credit agreement, as amended. A portion of the funds were transferred from the United States to Australia through an intercompany loan with a notional amount of A$105.0 million (or $100.6 million at the exchange rate on December 1, 2010). To mitigate the foreign currency exchange rate risk related to this non-functional currency intercompany loan, the Company entered into an Australian dollar/United States dollar floating to floating cross-currency swap agreement (the Swap), effective as of December 1, 2010, which effectively converted the A$105.0 million intercompany loan receivable in the United States into a $100.6 million loan receivable. The Swap requires the Company to pay Australian dollar BBSW plus 3.125% based on a notional amount of A$105.0 million and allows the Company to receive United States LIBOR plus 2.48% based on a notional amount of $100.6 million on a quarterly basis. BBSW is the wholesale interbank rate within Australia. It is the Australian equivalent to LIBOR. As a result of these quarterly net settlement payments, the Company realized an expense of $1.5 million within interest (expense)/income related to the quarterly settlement for the three months ended June 30, 2011. In addition, the Company recognized a net gain of $0.1 million within other income/(expense) related to the mark-to-market of the derivative agreement and the underlying intercompany debt instrument to the exchange rate on June 30, 2011. The fair value of the Swap represented a liability of $12.9 million as of June 30, 2011. The fair value of the Swap was estimated based on Level 2 valuation inputs. The Swap expires on December 1, 2012.

The following table summarizes the fair value of derivative instruments recorded in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Liability Derivatives:
Derivatives designated as hedges:
Interest rate swap agreement	Accrued expenses	$	4,271	Accrued expenses	$	4,202
Interest rate swap agreement	Other long-term liabilities	4,151		Other long-term liabilities	4,917
Total derivatives designated as hedges		$	8,422		$	9,119
Derivatives not designated as hedges:
Cross-currency swap agreement	Accrued expenses	$	5,778	Accrued expenses	$	5,541
Cross-currency swap agreement	Other long-term liabilities	7,077		Other long-term liabilities	2,091
Total derivatives not designated as hedges		$	12,855		$	7,632

The following table shows the effect of the Company’s derivative instrument designated as a cash flow hedge for the three and six months ended June 30, 2011 and 2010 in other comprehensive income/(loss) (OCI) (dollars in thousands):

	Total Cash Flow Hedge OCI Activity, Net of Tax
	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011		2010
Derivatives Designated as Cash Flow Hedges:
Effective portion of changes in fair value recognized in OCI:
Interest rate swap agreement	$	(246	)	$	(1,219	)	$	444	$	(1,978	)

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The following table shows the effect of the Company’s derivative instruments not designated as hedges for the three and six months ended June 30, 2011 in the consolidated statement of operations (dollars in thousands):

		Amount Recognized in Earnings
	Location of Amount Recognized in Earnings	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Derivative Instruments Not Designated as Hedges:
Cross-currency swap agreement	Interest (expense)/income	$	(1,524	)	$	(2,960	)
Cross-currency swap agreement	Other income/(expense), net	97			119
		$	(1,427	)	$	(2,841	)

6. FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of each class of financial instrument held by the Company:

• Long-term debt: Since the Company’s long-term debt is not quoted, fair value was estimated using a discounted cash flow analysis based on Level 2 valuation inputs, including borrowing rates the Company believes are currently available to it for loans with similar terms and maturities.

• Derivative instruments: Derivative instruments are recorded on the balance sheet as either assets or liabilities measured at fair value. As of June 30, 2011, the Company’s derivative financial instruments consisted of an interest rate swap agreement and a cross-currency swap agreement. The Company estimates the fair value of its interest rate swap agreement based on Level 2 valuation inputs, including fixed interest rates, LIBOR implied forward interest rates and the remaining time to maturity. The Company estimates the fair value of its cross-currency swap agreement based on Level 2 valuation inputs, including LIBOR implied forward interest rates, AUD BBSW implied forward interest rates and the remaining time to maturity.

The following table presents the Company's financial instruments that are carried at fair value as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011		December 31, 2010
Financial liabilities carried at fair value using Level 2 inputs:
Interest rate swap agreement	$	8,422	$	9,119
Cross-currency swap agreement	12,855		7,632
Total financial liabilities carried at fair value	$	21,277	$	16,751

The following table presents the carrying value and fair value using Level 2 inputs of the Company’s financial instruments carried at historical cost as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities carried at historical cost:
Series A senior notes	$	75,000	$	75,703	$	75,000	$	76,491
Series B senior notes	100,000		106,051		100,000		105,041
Series C senior notes	25,000		24,603		25,000		24,421
Revolving credit facility	152,213		152,372		153,600		152,974
United States term loan	180,000		178,376		192,000		189,972
Canadian term loan	24,259		23,951		24,989		24,651
Other debt	8,449		8,519		8,275		8,318
Total	$	564,921	$	569,575	$	578,864	$	581,868

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7. INCOME TAXES:

The Company’s effective income tax rate in the three months ended June 30, 2011, was 26.8% compared with 36.8% in the three months ended June 30, 2010. The Company's effective income tax rate in the six months ended June 30, 2011, was 27.2% compared with 37.2% in the six months ended June 30, 2010. The decrease in the effective tax rate for the three and six months ended June 30, 2011, was primarily attributable to the extension of the Short Line Tax Credit in the fourth quarter of 2010.

The Short Line Tax Credit, which had been in existence from 2005 through 2009, expired on December 31, 2009, but was retroactively extended for 2010 on December 17, 2010. Unless it is further extended, the credit expires on January 1, 2012. The income tax credit provides for Class II and Class III railroads to reduce their federal income tax based on 50% of qualified railroad track maintenance expenditures during each year, subject to a limitation of $3,500 per track mile owned or leased at the end of the year. Historically, the Company incurred sufficient spending to meet the limitation.

8. COMMITMENTS AND CONTINGENCIES:

From time to time, the Company is a defendant in certain lawsuits resulting from its operations. Management believes there are adequate provisions in the financial statements for any expected liabilities that may result from disposition of the pending lawsuits. Nevertheless, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. Though currently unexpected and not possible to reasonably estimate, were an unfavorable ruling to occur, there could be a material adverse impact on the Company’s operating results, financial condition and liquidity as of and for the period in which the ruling occurs.

9. COMPREHENSIVE INCOME:

Comprehensive income is the total of net income and all other non-owner changes in equity. The following tables set forth the Company’s comprehensive income for the three and six months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended
	June 30,
	2011			2010
Net income	$	31,145		$	20,635
Other comprehensive income:
Foreign currency translation adjustments	9,547			(14,535		)
Net unrealized loss on qualifying cash flow hedges, net of tax benefits of $140 and $693, respectively	(246		)	(1,219		)
Changes in pension and other postretirement benefits, net of tax provisions of $26 and $20, respectively	46			35
Comprehensive income	$	40,492		$	4,916
	Six Months Ended
	June 30,
	2011			2010
Net income	$	53,267		$	36,595
Other comprehensive income:
Foreign currency translation adjustments	16,223			(12,193		)
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($253) and $1,125, respectively	444			(1,978		)
Changes in pension and other postretirement benefits, net of tax benefit/(provision) of $71 and ($156), respectively	(125		)	274
Comprehensive income	$	69,809		$	22,698

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The following table sets forth accumulated other comprehensive income included in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	Foreign Currency Translation Adjustment		Defined Benefit Plans			Net Unrealized Losses on Cash Flow Hedges			Accumulated Other Comprehensive Income
Balance, December 31, 2010	$	45,905	$	22		$	(5,813	)	$	40,114
Current period change	16,223		(125		)	444			16,542
Balance, June 30, 2011	$	62,128	$	(103	)	$	(5,369	)	$	56,656

The change in the foreign currency translation adjustment for the six months ended June 30, 2011, related primarily to the Company’s operations with a functional currency in Australian and Canadian dollars.

10. SIGNIFICANT NON-CASH INVESTING ACTIVITIES:

As of June 30, 2011 and 2010, the Company had outstanding grant receivables from outside parties for capital expenditures of $17.3 million and $4.3 million, respectively. As of June 30, 2011 and 2010, the Company also had approximately $15.4 million and $8.3 million, respectively, of purchases of property and equipment that were not paid and, accordingly, were accrued in accounts payable in the normal course of business.

11. SEGMENT INFORMATION:

The Company's various railroad lines are divided into nine operating regions. Since each region has similar characteristics, they previously had been aggregated into one reportable segment. Beginning January 1, 2011, the Company has decided to present its financial information as two reportable segments, North American & European Operations and Australian Operations.

The results of operations of the foreign entities are maintained in the respective local currency (the Australian dollar, the Canadian dollar and the Euro) and then translated into United States dollars at the applicable exchange rates for inclusion in the consolidated financial statements. As a result, any appreciation or depreciation of these currencies against the United States dollar will impact our results of operations.

The following table sets forth our North American & European Operations and Australian Operations for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations		Total Operations
Revenues	$	139,335		$	70,254		$	209,589		$	127,004		$	31,449	$	158,453
Income from operations	33,737			17,428			51,165			31,153			6,720		37,873
Depreciation and amortization	11,565			4,732			16,297			10,908			1,544		12,452
Interest expense	(5,935		)	(4,318		)	(10,253		)	(5,411		)	—		(5,411		)
Interest income	791			67			858			56			415		471
Provision for income taxes	7,485			3,935			11,420			9,981			2,086		12,067
Expenditures for additions to property & equipment, net of grants from outside parties	14,742			27,412			42,154			5,181			1,204		6,385

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The following table sets forth our North American & European Operations and Australian Operations for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations		Total Operations
Revenues	$	271,642		$	129,858		$	401,500		$	244,240		$	59,792	$	304,032
Income from operations	60,672			29,696			90,368			55,164			12,815		67,979
Depreciation and amortization	22,911			9,247			32,158			21,823			3,077		24,900
Interest expense	(11,891		)	(8,301		)	(20,192		)	(10,773		)	—		(10,773		)
Interest income	1,507			126			1,633			111			783		894
Provision for income taxes	13,557			6,348			19,905			17,692			4,016		21,708
Expenditures for additions to property & equipment, net of grants from outside parties	21,811			28,554			50,365			5,877			4,736		10,613

The following table sets forth the property and equipment recorded in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
	North American & European Operations	Australian Operations	Total Operations	North American & European Operations	Australian Operations	Total Operations
Property & equipment	$1,012,010	$491,378	$1,503,388	$1,000,350	$443,827	$1,444,177

12. RECENTLY ISSUED ACCOUNTING STANDARDS:

Accounting Standards Not Yet Effective

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides clarification about the application of existing fair value measurement and disclosure requirements, and expands certain other disclosure requirements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2011, and is to be applied prospectively. Early adoption is not permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which requires entities to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. This guidance does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This requirement will become effective for the Company beginning with the first quarter of 2012 Form 10-Q filing and will require retrospective application for all periods presented.

13. SUBSEQUENT EVENTS:

Credit Agreement

On July 29, 2011, the Company entered into the Third Amended and Restated Revolving Credit and Term Loan Agreement (the Credit Agreement). The Credit Agreement expanded the size of the Company's senior credit facility from $620.0 million to $750.0 million and extended the maturity date to July 29, 2016. The Credit Agreement includes a $425.0 million revolving loan, a $200.0 million United States term loan, a A$92.2 million ($100.0 million at the July 29, 2011 exchange rate) Australian term loan and a C$23.6 million ($25.0 million at the July 29, 2011 exchange rate) Canadian term loan. The Credit Agreement allows for borrowings in United States dollars, Australian dollars, Canadian dollars and Euros. The Credit Agreement and revolving loans are guaranteed by substantially all of the United States subsidiaries for the United States

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guaranteed obligations and by substantially all of the Company's foreign subsidiaries for the foreign guaranteed obligations.

The Credit Agreement contains customary representations and warranties, events of default and covenants, including, among other things, covenants that restrict the ability of the Company to incur certain additional indebtedness, create or permit liens on assets and engage in mergers or consolidations. The Credit Agreement also contains financial covenants restricting the Company's funded debt to EBITDAR ratio and the Company's consolidated EBITDA to consolidated total interest expense ratio.

The proceeds of the senior credit facilities will be used for working capital, capital expenditures, investments permitted under the Credit Agreement, acquisitions permitted under the Credit Agreement, other lawful general corporate purposes and to refinance existing indebtedness.

Acquisition

On August 2, 2011, the Company announced that it signed an agreement to acquire all of the capital stock of Arizona Eastern Railway Company (AZER) for approximately $90.1 million in cash. The acquisition is expected to close during the third quarter of 2011. Headquartered near Miami, Arizona, with 45 employees and 10 locomotives, AZER is composed of two rail lines operating over 200 track miles in southeast Arizona and southwest New Mexico that are connected by 52 miles of trackage rights over the Union Pacific Railroad. The largest customer on AZER is Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer. In connection with the acquisition of AZER, each party will make an election under Section 338(h)10 of the Internal Revenue Code of 1986, as amended. The acquisition of AZER is expected to be immediately accretive to GWI's earnings per share. The acquisition will be subject to customary closing conditions and includes certain adjustments for closing date working capital and indebtedness of AZER.

AZER primarily provides rail service to Freeport-McMoRan's largest North American copper mine and its North American smelter, hauling copper concentrate, copper anode, copper rod and sulfuric acid. In conjunction with the transaction, AZER and Freeport-McMoRan have entered into a long term agreement. AZER also serves other local customers.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with our 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 our 2010 Annual Report on Form 10-K.

Recent Developments

Credit Agreement

On July 29, 2011, we entered into the Third Amended and Restated Revolving Credit and Term Loan Agreement (the Credit Agreement). The Credit Agreement expanded the size of our senior credit facility from $620.0 million to $750.0 million and extended the maturity date to July 29, 2016. The Credit Agreement includes a $425.0 million revolving loan, a $200.0 million United States term loan, a A$92.2 million ($100.0 million at the July 29, 2011 exchange rate) Australian term loan and a C$23.6 million ($25.0 million at the July 29, 2011 exchange rate) Canadian term loan. The Credit Agreement allows for borrowings in United States dollars, Australian dollars, Canadian dollars and Euros. The Credit Agreement and revolving loans are guaranteed by substantially all of our United States subsidiaries for the United States guaranteed obligations and by substantially all of the our foreign subsidiaries for the foreign guaranteed obligations.

The Credit Agreement contains customary representations and warranties, events of default and covenants, including, among other things, covenants that restrict our ability to incur certain additional indebtedness, create or permit liens on assets and engage in mergers or consolidations. The Credit Agreement also contains financial covenants restricting our funded debt to EBITDAR ratio and our consolidated EBITDA to consolidated total interest expense ratio.

The proceeds of the senior credit facilities will be used for working capital, capital expenditures, investments permitted under the Credit Agreement, acquisitions permitted under the Credit Agreement, other lawful general corporate purposes and to refinance existing indebtedness.

Acquisition

On August 2, 2011, we announced that we signed an agreement to acquire all of the capital stock of Arizona Eastern Railway Company (AZER) for approximately $90.1 million in cash. The acquisition is expected to close during the third quarter of 2011. Headquartered near Miami, Arizona, with 45 employees and 10 locomotives, AZER is composed of two rail lines operating over 200 track miles in southeast Arizona and southwest New Mexico that are connected by 52 miles of trackage rights over the Union Pacific Railroad. The largest customer on AZER is Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer. In connection with the acquisition of AZER, each party will make an election under Section 338(h)10 of the Internal Revenue Code of 1986, as amended. The acquisition of AZER is expected to be immediately accretive to our earnings per share. The acquisition will be subject to customary closing conditions and includes certain adjustments for closing date working capital and indebtedness of AZER.

AZER primarily provides rail service to Freeport-McMoRan's largest North American copper mine and its North American smelter, hauling copper concentrate, copper anode, copper rod and sulfuric acid. In conjunction with the transaction, AZER and Freeport-McMoRan have entered into a long term agreement. AZER also serves other local customers.

Overview

We own and operate short line and regional freight railroads and provide railcar switching services in the United States, Canada, Australia, the Netherlands and Belgium. In addition, we operate the Tarcoola to Darwin rail line, which links the Port of Darwin to the Australian interstate rail network in South Australia. Operations currently include 63 railroads organized into nine regions, with approximately 7,400 miles of owned and leased track and approximately 1,400 additional miles under track access arrangements. In addition, we provide rail service at 17 ports in North America and Europe and perform contract coal loading and railcar switching for industrial customers.

In 2010, we acquired certain assets of FreightLink Pty Ltd, Asia Pacific Transport Pty Ltd and related corporate entities (together FreightLink) in Australia (FreightLink Acquisition). As a result of the FreightLink Acquisition, we are now the operator of the Tarcoola to Darwin rail line pursuant to a concession agreement that expires in 2054.

Net income in the three months ended June 30, 2011, was $31.1 million, compared with net income of $20.6 million in the three months ended June 30, 2010. Our diluted earnings per share (EPS) in the three months ended June 30, 2011, were

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$0.73 with 42.8 million weighted average shares outstanding, compared with diluted EPS of $0.49 with 41.7 million weighted average shares outstanding in the three months ended June 30, 2010.

Our effective income tax rate in the three months ended June 30, 2011, was 26.8%, compared with 36.8% in the three months ended June 30, 2010, primarily due to the extension of the Short Line Tax Credit in the fourth quarter of 2010.

Operating revenues increased $51.1 million, or 32.3%, to $209.6 million in the three months ended June 30, 2011, compared with $158.5 million in the three months ended June 30, 2010. The increase in operating revenues included a $20.8 million, or 13.1%, increase in revenues from existing operations and $37.6 million in revenues from new operations. Our consolidated results reflect the elimination of $7.2 million of non-freight revenues for services provided to GWA (North) Pty Ltd (GWA North), our subsidiary that acquired certain assets of FreightLink, by Genesee & Wyoming Australia Pty Ltd (GWA) in the three months ended June 30, 2011. When we discuss either revenues from existing operations or same railroad revenues, we are referring to the change in our revenues, period-over-period, associated with operations that were managed in both periods (i.e., excluding the impact of acquisitions). The increase in our revenues from existing operations included a $6.8 million benefit due to the appreciation of the Australian and Canadian dollars and the Euro relative to the United States dollar. Excluding the impact from the change in foreign currency exchange rates, revenues from existing operations increased $14.0 million, or 8.8%.

Freight revenues increased $46.6 million, or 46.5%, to $146.8 million in the three months ended June 30, 2011, compared with $100.2 million in the three months ended June 30, 2010. The $46.6 million increase in freight revenues consisted of $35.2 million in freight revenues from new operations and an $11.4 million, or 11.4%, increase in freight revenues from existing operations. The increase in freight revenues from existing operations included a benefit of $3.0 million due to the appreciation of the Australian and Canadian dollars relative to the United States dollar. Excluding the impact from foreign currency appreciation, freight revenues from existing operations increased by $8.4 million, or 8.4%.

Our traffic in the three months ended June 30, 2011, was 249,508 carloads, an increase of 31,801 carloads, or 14.6%, compared with the three months ended June 30, 2010. The traffic increase consisted of 11,607 carloads from existing operations and 20,194 carloads from new operations. The increase from existing operations was principally due to increases of 3,515 carloads of coal and coke traffic, 2,685 carloads of farm and food products traffic, 2,253 carloads of pulp and paper traffic and 2,253 carloads of minerals and stone traffic. All other traffic increased by a net 901 carloads.

Average freight revenues per carload increased 27.8% to $588 in the three months ended June 30, 2011, compared with $460 in the three months ended June 30, 2010. Average freight revenues per carload from existing operations increased 5.9% to $487. The appreciation of the Australian and Canadian dollars relative to the United States dollar and higher fuel surcharges increased average freight revenues per carload from existing operations by 3.2% and 2.5%, respectively, and changes in commodity mix decreased average freight revenues per carload from existing operations by 0.3%. Excluding these factors, average freight revenues per carload from existing operations increased 0.5%. Same railroad average freight revenues per carload were also negatively impacted by changes in the mix of customers within certain commodity groups, such as coal, farm and food products and metals, primarily due to length of haulage.

Non-freight revenues increased $4.5 million, or 7.8%, to $62.8 million in the three months ended June 30, 2011, compared with $58.3 million in the three months ended June 30, 2010. The increase in non-freight revenues included a $9.4 million, or 16.1%, increase in existing operations and $2.4 million from new operations. Our consolidated results reflect the elimination of $7.2 million of non-freight revenues for services provided to GWA North by GWA for the three months ended June 30, 2011. The increase in non-freight revenues from existing operations included a benefit of $3.8 million due to the impact from the change in foreign currency exchange rates. Excluding this impact, non-freight revenues from existing operations increased $5.6 million, or 9.6%, primarily due to higher switching revenues in the United States, Canada and the Netherlands.

Income from operations in the three months ended June 30, 2011, was $51.2 million, compared with $37.9 million in the three months ended June 30, 2010, an increase of $13.3 million, or 35.1%. Our operating ratio, defined as operating expenses divided by operating revenues, was 75.6% in the three months ended June 30, 2011, compared with 76.1% in the three months ended June 30, 2010.

Income from operations in the six months ended June 30, 2011, was $90.4 million, compared with $68.0 million in the six months ended June 30, 2010, an increase of $22.4 million, or 32.9%. Net income from continuing operations in the six months ended June 30, 2011, was $53.3 million, a 45.3% increase over $36.7 million of net income from continuing operations in the six months ended June 30, 2010. Our diluted earnings per share (EPS) from continuing operations in the six months ended June 30, 2011, were $1.25 with 42.7 million weighted average shares outstanding, a 42.0% increase compared with diluted EPS from continuing operations of $0.88 with 41.6 million weighted average shares outstanding in the six months ended June 30, 2010. Operating revenues increased $97.5 million, or 32.1%, to $401.5 million in the six months ended June 30,

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2011, compared with $304.0 million in the six months ended June 30, 2010.

Our results for the six months ended June 30, 2011, included a tax benefit of $4.7 million ($0.11 per diluted share) associated with the Short Line Tax Credit, which was extended in December 2010.

During the six months ended June 30, 2011, we generated $52.0 million in cash flow from operating activities from continuing operations, which was after the payment of $13.0 million in FreightLink acquisition-related expenses accrued as of December 31, 2010. During the same period, we purchased $62.1 million of property and equipment and received $11.7 million in cash from outside parties for capital spending and $3.1 million in proceeds from the disposition of property and equipment.

Changes in Operations

Australia

On December 1, 2010, through our subsidiary, GWA North, we completed the FreightLink Acquisition for A$331.9 million (or $320.0 million at the exchange rate on December 1, 2010). The results of operations for GWA North have been included in our consolidated statements of operations since the acquisition date. Pursuant to the Business Sale Agreement, we acquired FreightLink’s freight rail business between Tarcoola in South Australia and Darwin in the Northern Territory of Australia, certain material contracts, equipment and property leases, as well as FreightLink’s plant, equipment and business inventory. In addition, as part of the acquisition, we assumed debt with a carrying value of A$1.8 million (or $1.7 million at the exchange rate on December 1, 2010), which represents the fair value of an A$50.0 million (or $48.2 million at the exchange rate on December 1, 2010) non-interest bearing loan due in 2054.

As a result of the acquisition, GWA North is now the concessionaire and operator of the approximately 1,400-mile Tarcoola to Darwin rail line, which links the Port of Darwin to the Australian interstate rail network in South Australia. The rail line is located on land leased to GWA North by the AustralAsia Railway Corporation (a statutory corporation established by legislation in the Northern Territory) under a concession agreement that expires in 2054. GWA North is both a provider of rail haulage to customers on its railroad (above rail services), as well as a track owner, charging access fees to any rail operators that run on its track (below rail services). The track access rights are regulated under a statutory access regime established by legislation in the Northern Territory and South Australia. Our subsidiary, GWA, historically operated FreightLink’s rail haulage services, provided its crews, managed its train operations and leased locomotives and wagons to FreightLink. As a result of the acquisition, approximately A$25 million (or $27 million at the June 30, 2011 exchange rate) of annual GWA non-freight revenues generated from services provided to FreightLink will be eliminated in consolidation in the post-acquisition period. This elimination will not have any effect on our operating income.

Prior to the completion of the Tarcoola to Darwin rail line in 2004, potential mining projects located in the Northern Territory had no economically viable transportation link to an export port. Since the completion of the rail line , there has been an increase in mineral exploration and development in the Northern Territory and South Australia along the rail corridor. We believe that the FreightLink Acquisition provides us significant growth opportunities as it positions us to capitalize on future mineral development in the Northern Territory and South Australia.

We accounted for the transaction using the acquisition method of accounting under accounting principles generally accepted in the United States of America (U.S. GAAP). Under the acquisition method of accounting, the assets and liabilities of FreightLink have been recorded at their respective estimated acquisition-date fair values and have been consolidated with those of GWI as of the acquisition date. The foreign exchange rate used to translate the preliminary balance sheet to United States dollars was $0.96 for one Australian dollar (the exchange rate on December 1, 2010).

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The preliminary acquisition-date fair values assigned to the acquired net assets were as follows (dollars in thousands):

	Australian Dollars		United States Dollars
Accounts receivable	$	161	$	155
Materials and supplies	3,328		3,209
Prepaid expenses and other	101		97
Deferred income tax assets	171		165
Property and equipment	330,712		318,843
Total assets	$	334,473	$	322,469
Accrued expenses	$	731	$	705
Long-term debt	1,806		1,741
Net assets	$	331,936	$	320,023

We financed the purchase of FreightLink’s assets through a combination of cash on hand and borrowing $100.0 million and A$97.0 million (or $94.0 million at the December 1, 2010 exchange rate) under our credit agreement, as amended.

Canada

Huron Central Railway Inc.: In June 2009, we announced that our subsidiary, Huron Central Railway Inc. (HCRY), intended to cease its operations in the third quarter of 2009. Consequently, in the second quarter of 2009 we recorded charges of $5.4 million after-tax associated with HCRY. These charges reflected a non-cash write-down of non-current assets of $6.7 million and restructuring charges of $2.3 million, and were partially offset by a tax benefit of $3.6 million. In September 2010, the governments of Canada and the Province of Ontario agreed to provide C$30 million (or $31 million at the June 30, 2011 exchange rate) to fund infrastructure improvements that, combined with certain customer agreements, will enable HCRY to continue operations on a long-term basis. In addition, HCRY has committed to fund approximately C$3 million (or $3 million at the June 30, 2011 exchange rate) for infrastructure improvements. As a result, we reversed $2.3 million ($1.5 million after-tax) of accrued restructuring charges related to HCRY in September 2010, as HCRY no longer intends to cease its operations. Because of the substance of the temporary agreement HCRY was operating under from August 15, 2009, through December 31, 2010, HCRY’s net operating earnings were included within non-freight revenues as other operating income. On January 1, 2011, HCRY began operating under a new agreement with certain customers. Because of the substance of the new arrangement, on January 1, 2011, we resumed reporting HCRY’s operating revenues, including freight revenues and corresponding carloads, and operating expenses on a gross basis within each respective line item of our statement of operations.

Discontinued Operations

In August 2009, we completed the sale of 100% of the share capital of our Mexican operating subsidiary, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM), to Viablis, S.A. de C.V. (Viablis). The net assets, results of operations and cash flows of our remaining Mexican subsidiary, GW Servicios S.A., which were classified as discontinued operations, were not material as of and for the three and six months ended June 30, 2011 and 2010. We do not expect any material future adverse financial impact from our remaining Mexican subsidiary.

Results from Continuing Operations

When comparing our results from continuing operations from one reporting period to another, consider that we have historically experienced fluctuations in revenues and expenses due to economic conditions, acquisitions, competitive forces,

one-time freight moves, fuel price fluctuations, customer plant expansions and shut-downs, sales of property and equipment, derailments and weather-related conditions, such as hurricanes, cyclones, droughts, heavy snowfall, freezing and flooding. In periods when these events occur, results of operations are not easily comparable from one period to another. Finally, certain of our railroads have commodity shipments that are sensitive to general economic conditions, including steel products, paper products and lumber and forest products. However, shipments of other commodities are relatively less affected by economic conditions and are more closely affected by other factors, such as inventory levels maintained at a customer plants, winter weather (salt) and seasonal rainfall (South Australian grain). As a result of these and other factors, our operating results in any reporting period may not be directly comparable to our operating results in other reporting periods.

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Three Months EndedJune 30, 2011 Compared with Three Months EndedJune 30, 2010

Operating Revenues

Overview

Operating revenues were $209.6 million in the three months ended June 30, 2011, compared with $158.5 million in the three months ended June 30, 2010, an increase of $51.1 million, or 32.3%. Revenues from existing operations increased $20.8 million, or 13.1%, and new operations generated $37.6 million in revenues. New operations are those that were not included in our consolidated financial results for a comparable period in the prior year. Our consolidated results reflect the elimination of $7.2 million of non-freight revenues for services provided to GWA North by GWA for the three months ended June 30, 2011. Revenues from existing operations consisted of increases of $11.4 million in freight revenues and $9.4 million in non-freight revenues. The $20.8 million increase in revenues from existing operations included a benefit of $6.8 million from the change in foreign currency exchange rates.

The following table breaks down our operating revenues into new operations and existing operations for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	2011									2010		Increase in Total Operations				Increase in Existing Operations
	Total Operations		New Operations		Eliminations			Existing Operations		Total Operations		Amount		%		Amount		%		Currency Impact
Freight revenues	$	146,788	$	35,213	$	—		$	111,575	$	100,194	$	46,594	46.5	%	$	11,381	11.4	%	$	3,000
Non-freight revenues	62,801		2,406		(7,244		)	67,639		58,259		4,542		7.8	%	9,380		16.1	%	3,782
Total operating revenues	$	209,589	$	37,619	$	(7,244	)	$	179,214	$	158,453	$	51,136	32.3	%	$	20,761	13.1	%	$	6,782

Freight Revenues

The following table compares freight revenues, carloads and average freight revenues per carload for the three months ended June 30, 2011 and 2010 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads						Average Freight Revenues Per Carload
	2011				2010				2011			2010
Commodity Group	Amount		% of Total		Amount		% of Total		Amount	% of Total		Amount	% of Total		2011		2010
Intermodal*	$	22,049	15.0	%	$	92	0.1	%	15,223	6.1	%	856	0.4	%	$	1,448	$	107
Coal & Coke	20,122		13.7	%	18,178		18.1	%	47,531	19.0	%	44,016	20.2	%	423		413
Farm & Food Products	17,440		11.9	%	14,955		14.9	%	32,315	13.0	%	29,630	13.6	%	540		505
Pulp & Paper	15,480		10.6	%	13,180		13.2	%	23,823	9.5	%	21,570	9.9	%	650		611
Metallic Ores	13,926		9.5	%	1,112		1.1	%	7,951	3.2	%	2,124	1.0	%	1,751		524
Metals	11,686		8.0	%	11,983		12.0	%	22,198	8.9	%	23,916	11.0	%	526		501
Minerals & Stone	12,513		8.5	%	10,841		10.8	%	35,330	14.2	%	33,077	15.2	%	354		328
Chemicals & Plastics	11,376		7.7	%	9,840		9.8	%	15,135	6.1	%	14,262	6.6	%	752		690
Lumber & Forest Products	8,224		5.6	%	7,609		7.6	%	16,961	6.8	%	16,766	7.7	%	485		454
Petroleum Products	5,932		4.0	%	4,916		4.9	%	7,041	2.8	%	6,851	3.1	%	842		718
Auto & Auto Parts	2,203		1.5	%	2,257		2.3	%	2,881	1.1	%	3,013	1.4	%	765		749
Other	5,837		4.0	%	5,231		5.2	%	23,119	9.3	%	21,626	9.9	%	252		242
Total	$	146,788	100.0	%	$	100,194	100.0	%	249,508	100.0	%	217,707	100.0	%	$	588	$	460

 ______________________

* Represents intermodal units

Total freight traffic increased by 31,801 carloads, or 14.6%, in the three months ended June 30, 2011, compared with the same period in 2010. Carloads from existing operations increased by 11,607, or 5.3%, and new operations contributed 20,194

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carloads.

Average freight revenues per carload increased 27.8% to $588 in the three months ended June 30, 2011, compared with the same period in 2010. Average freight revenues per carload from existing operations increased 5.9% to $487. This increase included a 3.2% benefit from the appreciation of the Australian and Canadian dollars relative to the United States dollar. In addition, higher fuel surcharges increased average revenues per carload from existing operations by 2.5% and changes in the commodity mix decreased average revenues per carload from existing operations by 0.3%. Excluding these factors, average revenues per carload from existing operations increased by 0.5%. Average revenues per carload from existing operations were negatively impacted by changes in the mix of customers within certain commodity groups, such as coal and coke, farm and food products and metals, primarily due to length of haulage.

The following table sets forth freight revenues by commodity group segregated into new operations and existing operations for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	2011						2010		Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
Commodity Group	Total Operations		New Operations		Existing Operations		Total Operations		Amount			%		Amount			%
Intermodal*	$	22,049	$	21,929	$	120	$	92	$	21,957		> 100%		$	28		30.4	%	$	4
Coal & Coke	20,122		—		20,122		18,178		1,944			10.7	%	1,944			10.7	%	9
Farm & Food Products	17,440		—		17,440		14,955		2,485			16.6	%	2,485			16.6	%	1,932
Pulp & Paper	15,480		—		15,480		13,180		2,300			17.5	%	2,300			17.5	%	147
Metallic Ores	13,926		12,607		1,319		1,112		12,814			> 100%		207			18.6	%	65
Metals	11,686		—		11,686		11,983		(297		)	(2.5	)%	(297		)	(2.5	)%	25
Minerals & Stone	12,513		—		12,513		10,841		1,672			15.4	%	1,672			15.4	%	611
Chemicals & Plastics	11,376		—		11,376		9,840		1,536			15.6	%	1,536			15.6	%	67
Lumber & Forest Products	8,224		—		8,224		7,609		615			8.1	%	615			8.1	%	15
Petroleum Products	5,932		677		5,255		4,916		1,016			20.7	%	339			6.9	%	11
Auto & Auto Parts	2,203		—		2,203		2,257		(54		)	(2.4	)%	(54		)	(2.4	)%	87
Other	5,837		—		5,837		5,231		606			11.6	%	606			11.6	%	27
Total freight revenues	$	146,788	$	35,213	$	111,575	$	100,194	$	46,594		46.5	%	$	11,381		11.4	%	$	3,000

 ______________________

* Represents intermodal units

The following information discusses the significant changes in freight revenues by commodity group from existing operations. Changes in average freight revenues per carload in a commodity group can be impacted by changes in customer

rates, fuel surcharges, appreciation of the Australian and Canadian dollars relative to the United States dollar, as well as changes in the mix of customer traffic within a commodity group.

Coal and coke revenues increased $1.9 million, or 10.7%. Coal and coke traffic volume increased 3,515 carloads, or 8.0%, which increased revenues by $1.5 million, and average revenues per carload increased 2.4%, which increased revenues by $0.4 million. The carload increase was primarily due to the return of coal shipments to a power plant that had a five-week construction-related outage in the second quarter of 2010.

Farm and food products revenues increased $2.5 million, or 16.6%. Farm and food products traffic volume increased 2,685 carloads, or 9.1%, which increased revenues by $1.5 million, and average revenues per carload increased 6.9%, which increased revenues by $1.0 million. The carload increase was primarily due to an increase in grain traffic in the Midwestern United States and an increase in export grain traffic in Australia. The increase in average revenues per carload included a benefit of $1.9 million due to the appreciation of the Australian and Canadian dollars relative to the United States dollar. Excluding the benefit from foreign currency appreciation, average revenues per carload decreased by $0.9 million. Because rates for Australia grain traffic have a both fixed and variable component, the increase in Australian grain traffic resulted in lower average revenues per carload.

Pulp and paper revenues increased $2.3 million, or 17.5%. Pulp and paper traffic volume increased 2,253 carloads, or 10.4%, which increased revenues by $1.5 million, and average revenues per carload increased 6.4%, which increased revenues by $0.8 million. The carload increase was primarily due to higher pulp board traffic in the Southern United States.

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Metals revenues decreased $0.3 million, or 2.5%. Metals traffic volume decreased 1,718 carloads, or 7.2%, which decreased revenues by $0.9 million. However, average revenues per carload increased 5.0%, partially offsetting the revenue decline by $0.6 million. The carload decrease was primarily due to start-up issues at one plant we serve and truck competition at another plant we serve, both in the Northeastern United States, partially offset by a 2,109 carload increase from HCRY.

Minerals and stone revenues increased $1.7 million, or 15.4%. Average revenues per carload increased 7.9%, which increased revenues by $0.9 million, and minerals and stone traffic volume increased 2,253 carloads, or 6.8%, which increased revenues by $0.8 million. The carload increase was primarily due to an increase in salt shipments due to restocking of stockpiles in the Northeastern United States. The increase in average revenues per carload primarily resulted from a benefit of $0.6 million due to the appreciation of the Australian and Canadian dollars relative to the United States dollar.

Chemicals and plastics revenues increased $1.5 million, or 15.6%. Average revenues per carload increased 9.0%, which increased revenues by $0.9 million, and chemicals and plastics traffic volume increased 873 carloads, or 6.1%, which increased revenues by $0.6 million. The carload increase was primarily due to the general improvement in the economy.

Lumber and forest products revenues increased $0.6 million, or 8.1%. The increase was primarily due to a 6.8% increase in average revenues per carload.

Other freight revenues increased $0.6 million, or 11.6%.

Freight revenues from all remaining commodities increased by $0.5 million.

Non-Freight Revenues

The following table compares non-freight revenues for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	2011				2010
	Amount		% of Total		Amount		% of Total
Railcar switching	$	32,108	51.1	%	$	25,923	44.5	%
Car hire and rental income	5,740		9.2	%	5,944		10.2	%
Fuel sales to third parties	4,592		7.3	%	4,244		7.3	%
Demurrage and storage	5,529		8.8	%	6,460		11.1	%
Car repair services	2,203		3.5	%	2,009		3.4	%
Other operating income	12,629		20.1	%	13,679		23.5	%
Total non-freight revenues	$	62,801	100.0	%	$	58,259	100.0	%

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The following table sets forth non-freight revenues by new operations and existing operations for the three months ended June 30, 2011 and 2010 (dollars in thousands). The 2011 existing operations data includes $7.2 million of non-freight revenues for services provided to GWA North by GWA for the three months ended June 30, 2011, which were eliminated in our consolidated results.

	2011									2010		Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	Total Operations		New Operations		Eliminations			Existing Operations		Total Operations		Amount			%		Amount			%
Railcar switching	$	32,108	$	—	$	(19	)	$	32,127	$	25,923	$	6,185		23.9	%	$	6,204		23.9	%	$	1,597
Car hire and rental income	5,740		—		(1,877		)	7,617		5,944		(204		)	(3.4	)%	1,673			28.1	%	610
Fuel sales to third parties	4,592		—		(1,348		)	5,940		4,244		348			8.2	%	1,696			40.0	%	—
Demurrage and storage	5,529		—		(23		)	5,552		6,460		(931		)	(14.4	)%	(908		)	(14.1	)%	78
Car repair services	2,203		—		—			2,203		2,009		194			9.7	%	194			9.7	%	11
Other operating income	12,629		2,406		(3,977		)	14,200		13,679		(1,050		)	(7.7	)%	521			3.8	%	1,486
Total non-freight revenues	$	62,801	$	2,406	$	(7,244	)	$	67,639	$	58,259	$	4,542		7.8	%	$	9,380		16.1	%	$	3,782

The following information discusses the significant changes in non-freight revenues from existing operations.

Railcar switching revenues increased $6.2 million, or 23.9%. The increase included a $3.0 million increase in port switching revenues, primarily due to an increase in export grain and intermodal container traffic at our United States port operations, as well as new customer shipments in the Port of Rotterdam, a $1.6 million increase in industrial switching revenues primarily due to new and expanded customer service contracts and a $1.6 million benefit due to the impact from the change in foreign currency.

Car hire and rental income revenues increased $1.7 million, or 28.1%. The increase was primarily due to increased wagon rental income in Australia and an increase in freight car hire income resulting from increased carload traffic in North America.

Fuel sales to third parties increased $1.7 million, or 40.0%, of which $1.5 million resulted from a 35.8% increase in the average price per gallon and $0.2 million resulted from a 3.0% increase in gallons sold.

Demurrage and storage revenues decreased $0.9 million, or 14.1%. The decrease was primarily due to a decrease in the number of third-party rail cars being stored.

Car repair services revenues increased $0.2 million, or 9.7%.

Other non-freight revenues increased $0.5 million, or 3.8%.

Operating Expenses

Overview

Operating expenses were $158.4 million in the three months ended June 30, 2011, compared with $120.6 million in the three months ended June 30, 2010, an increase of $37.8 million, or 31.4%. The increase in operating expenses was attributable to $26.9 million from new operations and $18.2 million from existing operations. The appreciation of the Australian and Canadian dollars and the Euro relative to the United States dollar resulted in a $4.8 million increase in operating expenses from existing operations. Operating expenses from existing operations were adversely affected $4.6 million by the increase in the price of diesel fuel. In addition, operating expenses from existing operations included $1.2 million from an increase in diesel fuel consumption. Labor and benefits expense from existing operations increased $4.6 million due to the hiring of new employees and increased overtime costs, which primarily resulted from increased traffic volumes, and annual wage and benefit increases in the three months ended June 30, 2011. Operating expenses from existing operations for the three months ended June 30, 2011, also included $2.8 million from HCRY that were not in the three months ended June 30, 2010, due to the modification in accounting for HCRY effective January 1, 2011. Our consolidated results reflect the elimination of $7.2 million of operating expenses for GWA related to services provided to GWA North.

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Operating Ratios

Our operating ratio, defined as total operating expenses divided by total operating revenues, improved to 75.6% in the three months ended June 30, 2011, from 76.1% in the three months ended June 30, 2010.

The following table sets forth a comparison of our operating expenses for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	2011					2010					Currency Impact
	Amount			% of Operating Revenues		Amount			% of Operating Revenues
Labor and benefits	$	58,966		28.1	%	$	51,329		32.4	%	$	2,093
Equipment rents	11,011			5.3	%	8,266			5.2	%	348
Purchased services	19,942			9.5	%	12,895			8.1	%	1,364
Depreciation and amortization	16,297			7.8	%	12,452			7.9	%	417
Diesel fuel used in operations	22,629			10.8	%	10,605			6.7	%	—
Diesel fuel sold to third parties	4,500			2.1	%	3,910			2.4	%	—
Casualties and insurance	6,228			3.0	%	3,123			2.0	%	77
Materials	6,090			2.9	%	6,004			3.8	%	125
Net gain on sale of assets	(1,088		)	(0.5	)%	(1,399		)	(0.9	)%	(20		)
Gain on insurance recoveries	(1,018		)	(0.5	)%	—			—	%	—
Other expenses	14,867			7.1	%	13,395			8.5	%	403
Total operating expenses	$	158,424		75.6	%	$	120,580		76.1	%	$	4,807

Labor and benefits expense was $59.0 million in the three months ended June 30, 2011, compared with $51.3 million in the three months ended June 30, 2010, an increase of $7.6 million, or 14.9%, of which $6.7 million was from existing operations and $0.9 million was from new operations. The increase from existing operations consisted of $2.1 million due to the impact from the change in foreign currency exchange rates, $1.3 million due to the hiring of approximately 50 employees, $1.1 million from HCRY, approximately $0.8 million of benefit increases, $0.7 million from annual wage increases and $0.7 million from an increase in overtime costs.

Equipment rents expense was $11.0 million in the three months ended June 30, 2011, compared with $8.3 million in the three months ended June 30, 2010, an increase of $2.7 million, or 33.2%. The increase was primarily attributable to a $5.4 million increase from new operations, partially offset by the elimination of $1.9 million of expenses incurred by GWA related to services provided to GWA North and a decrease in existing operations of $0.7 million. The decrease from existing operations was primarily due to a decrease in locomotive and freight car rents.

Purchased services expense, which consists of costs for services provided by outside contractors for repairs and maintenance of track property, locomotives, freight cars and other equipment as well as contract labor costs for crewing and drayage services, was $19.9 million in the three months ended June 30, 2011, compared with $12.9 million in the three months ended June 30, 2010, an increase of $7.0 million, or 54.6%. The increase was attributable to a $1.2 million increase from existing operations and $9.8 million from new operations, partially offset by the elimination of $3.9 million of expenses incurred by GWA related to services provided to GWA North in the three months ended June 30, 2011. The increase from existing operations included a $1.4 million increase due to the impact from the change in foreign currency exchange rates.

Depreciation and amortization expense was $16.3 million in the three months ended June 30, 2011, compared with $12.5 million in the three months ended June 30, 2010, an increase of $3.8 million, or 30.9%. The increase was attributable to a $1.2 million increase from existing operations and $2.7 million from new operations.

The cost of diesel fuel used in operations was $22.6 million in the three months ended June 30, 2011, compared with $10.6 million in the three months ended June 30, 2010, an increase of $12.0 million. The increase was attributable to a $5.8 million increase from existing operations and $6.3 million from new operations. The increase from existing operations was composed of $4.6 million from a 43.2% increase in average fuel cost per gallon and $1.2 million due to a 7.9% increase in diesel fuel consumption, primarily due to a 5.3% increase in carloads.

The cost of diesel fuel sold to third parties was $4.5 million in the three months ended June 30, 2011, compared with $3.9 million in the three months ended June 30, 2010, an increase of $0.6 million, or 15.1%. The increase was attributable to a $1.9

26

million increase from existing operations, partially offset by the elimination of $1.3 million of expenses incurred by GWA for sales to GWA North in the three months ended June 30, 2011. The increase from existing operations consisted of $1.7 million resulting from a 44.0% increase in average diesel fuel cost per gallon and $0.2 million from a 3.0% increase in gallons sold.

Casualties and insurance expense was $6.2 million in the three months ended June 30, 2011, compared with $3.1 million in the three months ended June 30, 2010, an increase of $3.1 million. The increase was attributable to a $2.2 million increase from existing operations and $0.9 million from new operations. The increase in existing operations was primarily due to higher derailment expenses in 2011 compared to 2010.

Materials expense, which primarily consists of the costs of materials purchased for use in repairing and maintaining our track property, locomotives, rail cars and other equipment as well as costs for general tools and supplies used in our business, was $6.1 million in the three months ended June 30, 2011, compared with $6.0 million in the three months ended June 30, 2010, an increase of $0.1 million, or 1.4%.

Net gain on sale of assets was $1.1 million in the three months ended June 30, 2011, compared with $1.4 million in the three months ended June 30, 2010.

Gain on insurance recoveries in the three months ended June 30, 2011, included a $1.0 million gain from a business interruption claim associated with track wash-outs in Australia due to heavy rains from Cyclone Carlos in late February 2011.

Other expenses were $14.9 million in the three months ended June 30, 2011, compared with $13.4 million in the three months ended June 30, 2010, an increase of $1.5 million, or 11.0%. The increase was attributable to $1.9 million from new operations, partially offset by a $0.4 million decrease from existing operations. The decrease from existing operations was primarily the result of the settlement of a property tax appeal, partially offset by an increase in trackage rights expense.

Other Income (Expense) Items

Interest Income

Interest income was $0.9 million in the three months ended June 30, 2011, compared with $0.5 million in the three months ended June 30, 2010.

Interest Expense

Interest expense was $10.3 million in the three months ended June 30, 2011, compared with $5.4 million in the three months ended June 30, 2010, an increase of $4.8 million, resulting primarily from higher outstanding debt due to the FreightLink Acquisition.

Provision for Income Taxes

Our effective income tax rate in the three months ended June 30, 2011, was 26.8% compared with 36.8% in the three months ended June 30, 2010. The decrease in the effective tax rate was primarily attributable to the extension of the Short Line Tax Credit in the fourth quarter of 2010.

The Short Line Tax Credit, which had been in existence from 2005 through 2009, expired on December 31, 2009, but was retroactively extended for 2010 on December 17, 2010. Unless it is further extended, the credit expires on January 1, 2012. The income tax credit provides for Class II and Class III railroads to reduce their federal income tax based on 50% of qualified railroad track maintenance expenditures during each year, subject to a limitation of $3,500 per track mile owned or leased at the end of the year. Historically, we incurred sufficient spending to meet the limitation.

Income and Earnings Per Share from Continuing Operations

Income from continuing operations, net of tax in the three months ended June 30, 2011, was $31.1 million, compared with income from continuing operations, net of tax in the three months ended June 30, 2010, of $20.7 million. Our diluted EPS from continuing operations in the three months ended June 30, 2011, were $0.73 with 42.8 million weighted average shares outstanding, compared with diluted EPS from continuing operations in the three months ended June 30, 2010, of $0.50 with 41.7 million weighted average shares outstanding in the three months ended June 30, 2010. Our basic EPS from continuing operations were $0.78 with 39.9 million weighted average shares outstanding in the three months ended June 30, 2011, compared with basic EPS from continuing operations of $0.53 with 38.8 million weighted average shares outstanding in the three months ended June 30, 2010.

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Six Months EndedJune 30, 2011 Compared with Six Months EndedJune 30, 2010

Operating Revenues

Overview

Operating revenues were $401.5 million in the six months ended June 30, 2011, compared with $304.0 million in the six months ended June 30, 2010, an increase of $97.5 million, or 32.1%. Revenues from existing operations increased $43.5 million, or 14.3%, and new operations generated $67.6 million in revenues. New operations are those that were not included in our consolidated financial results for a comparable period in the prior year. Our consolidated results reflect the elimination of $13.6 million of non-freight revenues for services provided to GWA North by GWA for the six months ended June 30, 2011. Revenues from existing operations consisted of increases of $25.7 million in freight revenues and $17.8 million in non-freight revenues. The $43.5 million increase in revenues from existing operations included a benefit of $10.2 million from the change in foreign currency exchange rates.

The following table breaks down our operating revenues into new operations and existing operations for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	2011									2010		Increase in Total Operations				Increase in Existing Operations				Currency Impact
	Total Operations		New Operations		Eliminations			Existing Operations		Total Operations		Amount		%		Amount		%
Freight revenues	$	279,593	$	64,113	$	—		$	215,480	$	189,760	$	89,833	47.3	%	$	25,720	13.6	%	$	4,543
Non-freight revenues	121,907		3,488		(13,647		)	132,066		114,272		7,635		6.7	%	17,794		15.6	%	5,655
Total operating revenues	$	401,500	$	67,601	$	(13,647	)	$	347,546	$	304,032	$	97,468	32.1	%	$	43,514	14.3	%	$	10,198

Freight Revenues

The following table compares freight revenues, carloads and average freight revenues per carload for the six months ended June 30, 2011 and 2010 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads						Average Freight Revenues Per Carload
	2011				2010				2011			2010
Commodity Group	Amount		% of Total		Amount		% of Total		Amount	% of Total		Amount	% of Total		2011		2010
Intermodal*	$	39,980	14.3	%	$	142	0.1	%	28,941	5.8	%	1,311	0.3	%	$	1,381	$	108
Coal & Coke	38,993		14.0	%	37,283		19.7	%	101,735	20.6	%	96,154	22.9	%	383		388
Farm & Food Products	34,094		12.2	%	27,462		14.5	%	63,197	12.8	%	54,525	13.0	%	539		504
Pulp & Paper	30,259		10.8	%	25,410		13.4	%	48,132	9.7	%	41,876	10.0	%	629		607
Metallic Ores	26,116		9.3	%	2,234		1.2	%	14,920	3.0	%	4,616	1.1	%	1,750		484
Metals	23,023		8.2	%	21,116		11.1	%	44,738	9.1	%	42,174	10.0	%	515		501
Minerals & Stone	22,179		7.9	%	19,706		10.4	%	66,057	13.4	%	62,424	14.8	%	336		316
Chemicals & Plastics	21,840		7.8	%	18,592		9.8	%	29,484	6.0	%	26,893	6.4	%	741		691
Lumber & Forest Products	15,613		5.6	%	14,129		7.4	%	32,536	6.6	%	31,424	7.5	%	480		450
Petroleum Products	12,382		4.4	%	10,290		5.4	%	14,829	3.0	%	14,302	3.4	%	835		719
Auto & Auto Parts	4,349		1.6	%	4,023		2.1	%	5,771	1.2	%	5,692	1.3	%	754		707
Other	10,765		3.9	%	9,373		4.9	%	43,724	8.8	%	39,038	9.3	%	246		240
Total	$	279,593	100.0	%	$	189,760	100.0	%	494,064	100.0	%	420,429	100.0	%	$	566	$	451

 ______________________

* Represents intermodal units

Total freight traffic increased by 73,635 carloads, or 17.5%, in the six months ended June 30, 2011, compared with the same period in 2010. Carloads from existing operations increased by 36,295, or 8.6%, and new operations contributed 37,340

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carloads.

Average freight revenues per carload increased 25.5% to $566 in the six months ended June 30, 2011, compared with the same period in 2010. Average freight revenues per carload from existing operations increased 4.7% to $472. This increase included a 2.5% benefit from the appreciation of the Australian and Canadian dollars relative to the United States dollar. In addition, higher fuel surcharges and changes in the commodity mix increased average revenues per carload by 2.1% and 0.2%, respectively. Excluding these factors, average revenues per carload decreased by 0.1%. Average revenues per carload were negatively impacted by changes in the mix of customers within certain commodity groups, such as coal and coke, metals and farm and food products, primarily due to length of haulage of coal and metals traffic.

The following table sets forth freight revenues by commodity group segregated into new operations and existing operations for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	2011						2010		Increase in Total Operations				Increase in Existing Operations				Currency Impact
Commodity Group	Total Operations		New Operations		Existing Operations		Total Operations		Amount		%		Amount		%
Intermodal*	$	39,980	$	39,762	$	218	$	142	$	39,838	>100%		$	76	53.5	%	$	5
Coal & Coke	38,993		—		38,993		37,283		1,710		4.6	%	1,710		4.6	%	17
Farm & Food Products	34,094		—		34,094		27,462		6,632		24.1	%	6,632		24.1	%	2,757
Pulp & Paper	30,259		—		30,259		25,410		4,849		19.1	%	4,849		19.1	%	290
Metallic Ores	26,116		23,272		2,844		2,234		23,882		>100%		610		27.3	%	124
Metals	23,023		—		23,023		21,116		1,907		9.0	%	1,907		9.0	%	43
Minerals & Stone	22,179		—		22,179		19,706		2,473		12.5	%	2,473		12.5	%	954
Chemicals & Plastics	21,840		—		21,840		18,592		3,248		17.5	%	3,248		17.5	%	129
Lumber & Forest Products	15,613		—		15,613		14,129		1,484		10.5	%	1,484		10.5	%	28
Petroleum Products	12,382		1,079		11,303		10,290		2,092		20.3	%	1,013		9.8	%	24
Auto & Auto Parts	4,349		—		4,349		4,023		326		8.1	%	326		8.1	%	137
Other	10,765		—		10,765		9,373		1,392		14.9	%	1,392		14.9	%	35
Total freight revenues	$	279,593	$	64,113	$	215,480	$	189,760	$	89,833	47.3	%	$	25,720	13.6	%	$	4,543

 ______________________

* Represents intermodal units

The following information discusses the significant changes in freight revenues by commodity group from existing operations. Changes in average freight revenues per carload in a commodity group can be impacted by changes in customer

rates, fuel surcharges, appreciation of the Australian and Canadian dollars relative to the United States dollar, as well as changes in the mix of customer traffic within a commodity group.

Coal and coke revenues increased $1.7 million, or 4.6%. Coal and coke traffic volume increased 5,581 carloads, or 5.8%, which increased revenues by $2.1 million. However, average revenues per carload decreased 1.3%, partially offsetting the revenue increase by $0.4 million. The carload increase was primarily due to increased demand for coal and the return of traffic to a power plant that had a five-week construction-related outage in the second quarter of 2010.

Farm and food products revenues increased $6.6 million, or 24.1%. Farm and food products traffic volume increased 8,672, or 15.9%, which increased revenues by $4.7 million, and average revenues per carload increased 6.9%, which increased revenues by $1.9 million. The carload increase was primarily due to an increase in export grain traffic in Australia. The increase in average revenues per carload included a benefit of $2.8 million due to the appreciation of the Australian and Canadian dollars relative to the United States dollar. Excluding the benefit from foreign currency appreciation, average revenues per carload decreased by $0.9 million. Because rates for Australia grain traffic have a both fixed and variable component, the increase in Australian grain traffic resulted in lower average revenues per carload.

Pulp and paper revenues increased $4.8 million, or 19.1%. Pulp and paper traffic volumes increased 6,256 carloads, or 14.9%, which increased revenues by $3.9 million, and average revenues per carload increased 3.6%, which increased revenues by $0.9 million. Of this carload increase, HCRY contributed 1,302 carloads. The remaining increase of 4,954 carloads was primarily due to higher pulp board traffic in the Southern United States.

Metals revenues increased $1.9 million, or 9.0%. Metals traffic volumes increased 2,564 carloads, or 6.1%, which

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increased revenues by $1.3 million, and average revenues per carload increased 2.8%, which increased revenues by $0.6 million. Of this carload increase, HCRY contributed 3,899 carloads, which were partially offset by a net decrease of 1,355 carloads primarily driven by start-up issues at a plant we serve in the Northeastern United States.

Minerals and stone revenues increased $2.5 million, or 12.5%. Minerals and stone average revenues per carload increased 6.3%, which increased revenues by $1.3 million, and traffic volumes increased 3,633 carloads, or 5.8%, which increased revenues by $1.2 million. The increase in average revenues per carload primarily resulted from the appreciation of the Australian and Canadian dollars relative to the United States dollar. The carload increase was primarily due to an increase in rock salt shipments due to restocking of stockpiles in the Northeastern United States.

Chemicals and plastics revenues increased $3.2 million, or 17.5%. Chemicals and plastics traffic volumes increased 2,591 carloads, or 9.6%, which increased revenues by $1.9 million, and average revenues per carload increased 7.2%, which increased revenues by $1.3 million. The carload increase was primarily due to the general improvement in the economy.

Lumber and forest products revenues increased $1.5 million, or 10.5%. Lumber and forest products average revenues per carload increased 6.7%, which increased revenues $1.0 million, and traffic volumes increased 1,112 carloads, or 3.5%, which increased revenues $0.5 million. Of this carload increase, HCRY contributed 742 carloads.

Petroleum products revenues increased $1.0 million, or 9.8%. Petroleum products average revenues per carload increased 7.5%, which increased revenues by $0.8 million, and traffic volumes increased 318 carloads, or 2.2%, which increased revenues by $0.2 million.

Other freight revenues increased $1.4 million, or 14.9%. Other traffic volumes increased 4,686 carloads, or 12.0%, which increased revenues by $1.2 million, and average revenues per carload increased 2.5%, which increased revenues by $0.2 million. The carload increase was primarily due to an increase in overhead coal traffic in the United States.

Freight revenues from all remaining commodities increased by $1.0 million.

Non-Freight Revenues

The following table compares non-freight revenues for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	2011				2010
	Amount		% of Total		Amount		% of Total
Railcar switching	$	63,124	51.8	%	$	51,100	44.7	%
Car hire and rental income	11,182		9.2	%	12,049		10.5	%
Fuel sales to third parties	9,011		7.4	%	8,360		7.3	%
Demurrage and storage	11,100		9.1	%	12,695		11.1	%
Car repair services	4,223		3.4	%	3,725		3.3	%
Other operating income	23,267		19.1	%	26,343		23.1	%
Total non-freight revenues	$	121,907	100.0	%	$	114,272	100.0	%

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The following table sets forth non-freight revenues by new operations and existing operations for the six months ended June 30, 2011 and 2010 (dollars in thousands) . The 2011 existing operations data includes $13.6 million of non-freight revenues for services provided to GWA North by GWA for the six months ended June 30, 2011, which were eliminated in our consolidated results.

	2011									2010		Increase/(Decrease)in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	Total Operations		New Operations		Eliminations			Existing Operations		Total Operations		Amount			%		Amount			%
Railcar switching	$	63,124	$	—	$	(37	)	$	63,161	$	51,100	$	12,024		23.5	%	$	12,061		23.6	%	$	2,256
Car hire and rental income	11,182		—		(3,575		)	14,757		12,049		(867		)	(7.2	)%	2,708			22.5	%	978
Fuel sales to third parties	9,011		—		(2,419		)	11,430		8,360		651			7.8	%	3,070			36.7	%	—
Demurrage and storage	11,100		—		(64		)	11,164		12,695		(1,595		)	(12.6	)%	(1,531		)	(12.1	)%	118
Car repair services	4,223		—		—			4,223		3,725		498			13.4	%	498			13.4	%	20
Other operating income	23,267		3,488		(7,552		)	27,331		26,343		(3,076		)	(11.7	)%	988			3.8	%	2,283
Total non-freight revenues	$	121,907	$	3,488	$	(13,647	)	$	132,066	$	114,272	$	7,635		6.7	%	$	17,794		15.6	%	$	5,655

The following information discusses the significant changes in non-freight revenues from existing operations.

Railcar switching revenues increased $12.1 million, or 23.6%. The increase included a $5.6 million increase in port switching revenues primarily due to an increase in export grain and intermodal container traffic at our United States port operations, as well as new customer shipments in the Port of Rotterdam, a $4.2 million increase in industrial switching revenues primarily as a result of a new service contract to haul iron ore in Canada and a $2.3 million benefit due to the impact from the change in foreign currency.

Car hire and rental income revenues increased $2.7 million, or 22.5%. The increase was primarily due to a $1.0 million benefit from the appreciation of the Australian and Canadian dollars relative to the United States dollar and increased freight car hire income resulting from increased carload traffic in North America.

Fuel sales to third parties increased $3.1 million, or 36.7%, of which $2.3 million resulted from a 27.5% increase in the average price per gallon and $0.8 million resulted from a 7.2% increase in gallons sold.

Demurrage and storage revenues decreased $1.5 million, or 12.1%. The decrease was primarily due to a decrease in the number of third-party rail cars being stored.

Car repair services revenues increased $0.5 million, or 13.4%.

Other non-freight revenues increased $1.0 million, or 3.8%. The increase included a benefit of $2.3 million due to the impact from the change in foreign currency exchange rates. Excluding the foreign currency impact, other non-freight revenues decreased $1.3 million primarily driven by the modification in accounting for HCRY.

Operating Expenses

Overview

Operating expenses were $311.1 million in the six months ended June 30, 2011, compared with $236.1 million in the six months ended June 30, 2010, an increase of $75.1 million, or 31.8%. The increase in operating expenses was attributable to $51.5 million from new operations and $37.2 million from existing operations. The appreciation of the Australian and Canadian dollars and the Euro relative to the United States dollar resulted in a $7.2 million increase in operating expenses from existing operations. Labor and benefits expense from existing operations increased $8.4 million due to the hiring of new employees and increased overtime costs, which resulted primarily from increased traffic volumes, and annual wage and benefit increases in the six months ended June 30, 2011. Operating expenses from existing operations were adversely affected $8.2 million by the increase in the price of diesel fuel. In addition, operating expenses from existing operations included $3.3 million from an increase in diesel fuel consumption. Operating expenses from existing operations for the six months ended June 30, 2011, also included $5.4 million from HCRY that were not in the six months ended June 30, 2010, due to the modification in accounting for HCRY effective January 1, 2011. Our consolidated results reflect the elimination of $13.6 million of operating expenses for

31

GWA related to services provided to GWA North.

Operating Ratios

Our operating ratio, defined as total operating expenses divided by total operating revenues, improved to 77.5% in the six months ended June 30, 2011, from 77.6% in the six months ended June 30, 2010.

The following table sets forth a comparison of our operating expenses for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	2011					2010					Currency Impact
	Amount			% of Operating Revenues		Amount			% of Operating Revenues
Labor and benefits	$	117,048		29.1	%	$	101,517		33.4	%	$	3,243
Equipment rents	21,578			5.4	%	15,915			5.2	%	525
Purchased services	37,384			9.3	%	23,292			7.7	%	1,954
Depreciation and amortization	32,158			8.0	%	24,900			8.2	%	652
Diesel fuel used in operations	44,027			11.0	%	21,642			7.1	%	—
Diesel fuel sold to third parties	8,579			2.1	%	7,703			2.5	%	—
Casualties and insurance	11,666			2.9	%	7,027			2.3	%	125
Materials	12,673			3.2	%	11,481			3.8	%	189
Net gain on sale of assets	(2,098		)	(0.5	)%	(1,848		)	(0.6	)%	(26		)
Gain on insurance recoveries	(1,043		)	(0.3	)%	—			—	%	—
Other expenses	29,160			7.3	%	24,424			8.0	%	552
Total operating expenses	$	311,132		77.5	%	$	236,053		77.6	%	$	7,214

Labor and benefits expense was $117.0 million in the six months ended June 30, 2011, compared with $101.5 million in the six months ended June 30, 2010, an increase of $15.5 million, or 15.3%, of which $13.7 million was from existing operations and $1.8 million was from new operations. The increase from existing operations primarily consisted of $3.2 million due to the impact from the change in foreign currency exchange rates, approximately $2.9 million of benefit increases, $2.5 million due to the hiring of approximately 50 employees, $2.0 million from HCRY, $1.5 million from annual wage increases and $1.5 million from an increase in overtime costs.

Equipment rents expense was $21.6 million in the six months ended June 30, 2011, compared with $15.9 million in the six months ended June 30, 2010, an increase of $5.7 million, or 35.6%. The increase was primarily attributable to a $10.1 million increase from new operations, partially offset by the elimination of $3.6 million of expenses incurred by GWA related to services provided to GWA North and a decrease of $0.9 million from existing operations. The decrease from existing operations was primarily due to a decrease in locomotive and freight car rents.

Purchased services expense, which consists of costs for services provided by outside contractors for repairs and maintenance of track property, locomotives, freight cars and other equipment as well as contract labor costs for crewing and drayage services, was $37.4 million in the six months ended June 30, 2011, compared with $23.3 million in the six months ended June 30, 2010, an increase of $14.1 million, or 60.5%. The increase was attributable to a $3.2 million increase from existing operations and $18.3 million from new operations, partially offset by the elimination of $7.4 million of expenses incurred by GWA related to services provided to GWA North. The increase from existing operations consisted primarily of additional transportation and maintenance costs incurred in connection with increased traffic in Europe and $2.0 million due to the impact from the change in foreign currency exchange rates.

Depreciation and amortization expense was $32.2 million in the six months ended June 30, 2011, compared with $24.9 million in the six months ended June 30, 2010, an increase of $7.3 million, or 29.1%. The increase was attributable to a $2.0 million increase from existing operations and $5.2 million from new operations.

The cost of diesel fuel used in operations was $44.0 million in the six months ended June 30, 2011, compared with $21.6 million in the six months ended June 30, 2010, an increase of $22.4 million. The increase was attributable to an $11.5 million increase from existing operations and $10.9 million from new operations. The increase from existing operations was composed of $8.2 million from a 38.2% increase in average fuel cost per gallon and $3.3 million due to an 11.0% increase in diesel fuel

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consumption, primarily due to an 8.6% increase in carloads.

The cost of diesel fuel sold to third parties was $8.6 million in the six months ended June 30, 2011, compared with $7.7 million in the six months ended June 30, 2010, an increase of $0.9 million, or 11.4%. The increase was attributable to a $3.2 million increase from existing operations, partially offset by the elimination of $2.3 million of expenses incurred by GWA for sales to GWA North. The increase from existing operations consisted of $2.5 million resulting from a 32.0% increase in average diesel fuel cost per gallon and $0.7 million from a 7.2% increase in gallons sold.

Casualties and insurance expense was $11.7 million in the six months ended June 30, 2011, compared with $7.0 million in the six months ended June 30, 2010, an increase of $4.6 million, or 66.0%. The increase was attributable to $2.7 million from new operations and $2.0 million from existing operations. The impact from new operations included $1.0 million from track wash-outs in Australia due to heavy rains from Cyclone Carlos in late February 2011. The increase from existing operations was primarily due to higher derailment expenses in 2011 compared to 2010.

Materials expense, which primarily consists of the costs of materials purchased for use in repairing and maintaining our track property, locomotives, rail cars and other equipment as well as costs for general tools and supplies used in our business, was $12.7 million in the six months ended June 30, 2011, compared with $11.5 million in the six months ended June 30, 2010, an increase of $1.2 million, or 10.4%. The increase was primarily due to increased locomotive repairs from existing operations in North America.

Net gain on sale of assets was $2.1 million in the six months ended June 30, 2011, compared with $1.8 million in the six months ended June 30, 2010.

Gain on insurance recoveries in the six months ended June 30, 2011, of $1.0 million primarily consisted of a business interruption claim associated with Cyclone Carlos.

Other expenses was $29.2 million in the six months ended June 30, 2011, compared with $24.4 million in the six months ended June 30, 2010, an increase of $4.7 million, or 19.4%. The increase was attributable to a $4.7 million increase from existing operations and $3.4 million from new operations. The increase from existing operations was primarily due to an increase in trackage rights expense in 2011.

Other Income (Expense) Items

Interest Income

Interest income was $1.6 million in the six months ended June 30, 2011, compared with $0.9 million in the six months ended June 30, 2010.

Interest Expense

Interest expense was $20.2 million in the six months ended June 30, 2011, compared with $10.8 million in the six months ended June 30, 2010, an increase of $9.4 million, resulting primarily from higher outstanding debt due to the FreightLink Acquisition.

Provision for Income Taxes

Our effective income tax rate in the six months ended June 30, 2011, was 27.2% compared with 37.2% in the six months ended June 30, 2010. The decrease in the effective tax rate for the six months ended June 30, 2011, was primarily attributable to the extension of the Short Line Tax Credit in the fourth quarter of 2010.

Income and Earnings Per Share from Continuing Operations

Income from continuing operations, net of tax in the six months ended June 30, 2011, was $53.3 million, compared with income from continuing operations, net of tax of $36.7 million in the six months ended June 30, 2010. Our diluted EPS from continuing operations in the six months ended June 30, 2011, were $1.25 with 42.7 million weighted average shares outstanding, compared with diluted EPS from continuing operations of $0.88 with 41.6 million weighted average shares outstanding in the six months ended June 30, 2010. Our basic EPS from continuing operations were $1.34 with 39.7 million weighted average shares outstanding in the six months ended June 30, 2011, compared with basic EPS from continuing operations of $0.95 with 38.7 million weighted average shares outstanding in the six months ended June 30, 2010.

Segment Information

Our various railroad lines are organized into nine operating regions. Since each region has similar characteristics, they

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previously had been aggregated into one reportable segment. Beginning January 1, 2011, we have decided to present our financial information as two reportable segments - North American & European Operations and Australian Operations.

The results of operations of our foreign entities are maintained in the respective local currency (the Australian dollar, the Canadian dollar and the Euro) and then translated into United States dollars at the applicable exchange rates for inclusion in our consolidated financial statements. As a result, any appreciation or depreciation of these currencies against the United States dollar can impact our results of operations.

The following table sets forth our North American & European Operations and Australian Operations for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations			Total Operations
Revenues:
Freight	$	96,598		$	50,190		$	146,788		$	88,421		$	11,773		$	100,194
Non-freight	42,737			15,472			58,209			38,583			15,432			54,015
Fuel sales to third parties	—			4,592			4,592			—			4,244			4,244
Total revenues	$	139,335		$	70,254		$	209,589		$	127,004		$	31,449		$	158,453
Operating expenses
Labor and benefits	46,167			12,799			58,966			42,877			8,452			51,329
Equipment rents	6,513			4,498			11,011			7,093			1,173			8,266
Purchased services	7,117			12,825			19,942			6,857			6,038			12,895
Depreciation and amortization	11,565			4,732			16,297			10,908			1,544			12,452
Diesel fuel used in operations	14,056			8,573			22,629			9,188			1,417			10,605
Diesel fuel sold to third parties	—			4,500			4,500			—			3,910			3,910
Casualties and insurance	4,733			1,495			6,228			2,827			296			3,123
Materials	5,650			440			6,090			5,685			319			6,004
Net gain on sale of assets	(1,076		)	(12		)	(1,088		)	(1,389		)	(10		)	(1,399		)
Gain on insurance recoveries	—			(1,018		)	(1,018		)	—			—			—
Other expenses	10,873			3,994			14,867			11,805			1,590			13,395
Total operating expenses	$	105,598		$	52,826		$	158,424		$	95,851		$	24,729		$	120,580
Operating ratio	75.8		%	75.2		%	75.6		%	75.5		%	78.6		%	76.1		%
Income from operations	$	33,737		$	17,428		$	51,165		$	31,153		$	6,720		$	37,873
Interest expense	$	(5,935	)	$	(4,318	)	$	(10,253	)	$	(5,411	)	$	—		$	(5,411	)
Interest income	$	791		$	67		$	858		$	56		$	415		$	471
Provision for income taxes	$	7,485		$	3,935		$	11,420		$	9,981		$	2,086		$	12,067
Carloads	195,677			53,831			249,508			185,654			32,053			217,707
Expenditures for additions to property & equipment, net of grants from outside parties	$	14,742		$	27,412		$	42,154		$	5,181		$	1,204		$	6,385

Revenues from our North American & European Operations were $139.3 million in the three months ended June 30, 2011, compared with $127.0 million in the three months ended June 30, 2010, an increase of $12.3 million, or 9.7%. The $12.3 million increase in revenues from our North American & European Operations included an $8.2 million increase in freight revenues and a $4.2 million increase in non-freight revenues. The $8.2 million increase in freight revenues consisted of $4.9

34

million due to a 10,023, or 5.4%, carload increase, $2.6 million due to an increase in fuel surcharge revenue and a benefit of $0.6 million from the appreciation of the Canadian dollar relative to the United States dollar. The $4.2 million increase in non-freight revenues included an increase in port switching revenues primarily due to an increase in export grain and intermodal container traffic at our United States port operations, as well as new customer shipments in the Port of Rotterdam and an increase in industrial switching revenues primarily due to new and expanded customer service contracts and a $0.6 million benefit due to the appreciation of the Canadian dollar relative to the United States dollar.

Operating expenses from our North American & European Operations were $105.6 million in the three months ended June 30, 2011, compared with $95.9 million in the three months ended June 30, 2010, an increase of $9.7 million, or 10.2%. The increase in operating expenses included $3.7 million due to the increase in the price of diesel fuel, a $1.8 million increase in labor and benefits expense due to the hiring of new employees and increased overtime costs, which resulted primarily from increased traffic volumes and annual wage and benefit increases, and a $1.9 million increase in casualties and insurance expense primarily due to higher derailment expense in 2011 versus 2010. Operating expenses from our North American & European Operations included $2.8 million from HCRY that were not in the three months ended June 30, 2010, due to the modification in accounting for HCRY effective January 1, 2011.

Revenues from our Australian Operations were $70.3 million in the three months ended June 30, 2011, compared with $31.4 million in the three months ended June 30, 2010, an increase of $38.8 million, or 123.4%. Revenues from existing operations increased $8.4 million, or 26.8%, and new operations generated $37.6 million in revenues. Our consolidated Australian results reflect the elimination of $7.2 million of non-freight revenues for services provided to GWA North by GWA for the three months ended June 30, 2011. The $8.4 million increase in revenues from existing operations included a $3.2 million increase in freight revenues and a $5.2 million increase in non-freight revenues. The $3.2 million increase in freight revenues from existing operations included a benefit of $2.4 million from the appreciation of the Australian dollar relative to the United States dollar. The $5.2 million increase in non-freight revenues from existing operations included a benefit of $3.2 million from the appreciation of the Australian dollar relative to the United States dollar and a $1.7 million increase from fuel sales to third parties.

Operating expenses from our Australian Operations were $52.8 million in the three months ended June 30, 2011, compared with $24.7 million in the three months ended June 30, 2010, an increase of $28.1 million. The $28.1 million increase in operating expenses from our Australian Operations included $26.9 million from new operations and $8.5 million from existing operations, and on a consolidated Australian Operations basis, our results reflect the elimination of $7.2 million of operating expenses for GWA related to services provided to GWA North. The increase in operating expenses from existing operations included $4.0 million from the appreciation of the Australian dollar relative to the United States dollar, $2.6 million due to the increase in the price of diesel fuel and a $1.7 million increase in labor and benefits expense due to the hiring of new employees and increased overtime costs, which resulted primarily from increased traffic volumes, and annual wage and benefit increases.

35

The following table sets forth our North American & European Operations and Australian Operations for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations			Total Operations
Revenues:
Freight	$	187,327		$	92,266		$	279,593		$	169,022		$	20,738		$	189,760
Non-freight	84,315			28,581			112,896			75,218			30,694			105,912
Fuel sales to third parties	—			9,011			9,011			—			8,360			8,360
Total revenues	$	271,642		$	129,858		$	401,500		$	244,240		$	59,792		$	304,032
Operating expenses
Labor and benefits	92,626			24,422			117,048			84,724			16,793			101,517
Equipment rents	13,006			8,572			21,578			13,595			2,320			15,915
Purchased services	13,482			23,902			37,384			12,310			10,982			23,292
Depreciation and amortization	22,911			9,247			32,158			21,823			3,077			24,900
Diesel fuel used in operations	29,033			14,994			44,027			19,276			2,366			21,642
Diesel fuel sold to third parties	—			8,579			8,579			—			7,703			7,703
Casualties and insurance	8,056			3,610			11,666			6,405			622			7,027
Materials	11,912			761			12,673			10,926			555			11,481
Net gain on sale of assets	(2,084		)	(14		)	(2,098		)	(1,846		)	(2		)	(1,848		)
Gain on insurance recoveries	(25		)	(1,018		)	(1,043		)	—			—			—
Other expenses	22,053			7,107			29,160			21,863			2,561			24,424
Total operating expenses	$	210,970		$	100,162		$	311,132		$	189,076		$	46,977		$	236,053
Operating ratio	77.7		%	77.1		%	77.5		%	77.4		%	78.6		%	77.6		%
Income from operations	$	60,672		$	29,696		$	90,368		$	55,164		$	12,815		$	67,979
Interest expense	$	(11,891	)	$	(8,301	)	$	(20,192	)	$	(10,773	)	$	—		$	(10,773	)
Interest income	$	1,507		$	126		$	1,633		$	111		$	783		$	894
Provision for income taxes	$	13,557		$	6,348		$	19,905		$	17,692		$	4,016		$	21,708
Carloads	389,907			104,157			494,064			361,490			58,939			420,429
Expenditures for additions to property & equipment, net of grants from outside parties	$	21,811		$	28,554		$	50,365		$	5,877		$	4,736		$	10,613

Revenues from our North American & European Operations were $271.6 million in the six months ended June 30, 2011, compared with $244.2 million in the six months ended June 30, 2010, an increase of $27.4 million, or 11.2%. The $27.4 million increase in revenues from our North American & European Operations included an $18.3 million increase in freight revenues and a $9.1 million increase in non-freight revenues. The $18.3 million increase in freight revenues included $13.7 million due to a 28,417, or 7.9%, carload increase, $4.2 million due to an increase in fuel surcharge revenues and a benefit of $1.1 million from the appreciation of the Canadian dollar relative to the United States dollar. The $9.1 million increase in non-freight revenues was primarily due to a new service contract to haul iron ore in Canada and an increase in port switching revenues primarily due to an increase in export grain and intermodal container traffic at our United States port operations and new customers in the Port of Rotterdam.

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Operating expenses from our North American & European Operations were $211.0 million in the six months ended June 30, 2011, compared with $189.1 million in the six months ended June 30, 2010, an increase of $21.9 million, or 11.6%. The increase in operating expenses included $7.0 million due to the increase in the price of diesel fuel, $5.4 million from the modification in accounting for HCRY, a $5.3 million increase in labor and benefits expense due to the hiring of new employees and increased overtime costs, which resulted primarily from increased traffic volumes, and annual wage and benefit increases and $1.3 million from the appreciation of the Canadian dollar and the Euro relative to the United States dollar.

Revenues from our Australian Operations were $129.9 million in the six months ended June 30, 2011, compared with $59.8 million in the six months ended June 30, 2010, an increase of $70.1 million. Revenues from existing operations increased $16.1 million, or 26.9%, and new operations generated $67.6 million in revenues. Our consolidated Australian Operations results reflect the elimination of $13.6 million of non-freight revenues for services provided to GWA North by GWA for the six months ended June 30, 2011. The $16.1 million increase in revenues from existing operations included a $7.4 million increase in freight revenues and an $8.7 million increase in non-freight revenues. The $7.4 million increase in freight revenues from existing operations was primarily due to $3.3 million from a 7,878, or 13.4%, carload increase and a benefit of $3.4 million from the appreciation of the Australian dollar relative to the United States dollar. The carload increase was primarily due to export grain traffic. The $8.7 million increase in non-freight revenues from existing operations included a benefit of $4.9 million from the appreciation of the Australian dollar relative to the United States dollar, a $3.1 million increase from fuel sales to third parties and a $0.6 million increase in other operating income.

Operating expenses from our Australian Operations were $100.2 million in the six months ended June 30, 2011, compared with $47.0 million in the six months ended June 30, 2010, an increase of $53.2 million. The $53.2 million increase in operating expenses from our Australian Operations included $51.5 million from new operations and $15.3 million from existing operations, and on a consolidated Australian Operations basis, our results reflect the elimination of $13.6 million of operating expenses for GWA related to services provided to GWA North. The $15.3 million increase in operating expenses from existing operations included $5.9 million from the appreciation of the Australian dollar relative to the United States dollar, $4.1 million due to the increase in the price of diesel fuel and a $2.6 million increase in labor and benefits expense due to the hiring of new employees and increased overtime costs, which resulted primarily from increased traffic volumes, and annual wage and benefit increases.

Liquidity and Capital Resources

During the six months ended June 30, 2011, we generated $52.0 million of cash from operating activities from continuing operations, compared with $73.8 million of cash from operating activities from continuing operations during the six months ended June 30, 2010. For the six months ended June 30, 2011 and 2010, changes in working capital decreased net cash flow from operating activities by $42.3 million and $0.7 million, respectively. Of the $42.3 million for the six months ended June 30, 2011, $17.6 million was due to an increase in accounts receivable driven by the increase in business in 2011 and $24.2 million was due to a reduction in accounts payable and accrued expenses. Of the $24.2 million, $13.0 million was associated with the payment of stamp duty for the acquisition of FreightLink in Australia.

During the six months ended June 30, 2011 and 2010, our cash flows used in investing activities from continuing operations were $46.3 million and $7.1 million, respectively. For the six months ended June 30, 2011, primary drivers of cash used in investing activities were $62.1 million of cash used for capital expenditures and $0.4 million of net cash paid for acquisitions, partially offset by $11.7 million in cash received from grants from outside parties for capital spending, $3.1 million in cash proceeds from the sale of property and equipment and $1.4 million in cash proceeds from the sale of investments. For the six months ended June 30, 2010, primary drivers of cash used in investing activities were $28.6 million of cash used for capital expenditures, partially offset by $18.0 million in cash received from grants from outside parties for capital spending completed in prior years and $3.3 million in cash proceeds from the disposition of property and equipment.

During the six months ended June 30, 2011 and 2010, our cash flows used in financing activities from continuing operations were $7.8 million and $9.9 million, respectively. For the six months ended June 30, 2011, primary drivers of cash used in financing activities from continuing operations were $115.8 million of principal payments on outstanding debt, partially offset by proceeds from the issuance of long-term debt of $94.6 million and net cash inflows of $13.4 million from exercises of stock-based awards. For the six months ended June 30, 2010, primary drivers of cash used in financing activities from continuing operations were a net decrease in outstanding debt of $13.6 million, partially offset by net cash inflows of $5.3 million from exercises of stock-based awards.

At June 30, 2011, we had long-term debt, including current portion, totaling $564.9 million, which was 38.5% of our total capitalization, and $193.1 million of unused borrowing capacity under our credit facility. At December 31, 2010, we had long-term debt, including current portion, totaling $578.9 million, which was 41.5% of our total capitalization, and $192.2 million of unused borrowing capacity under our credit facility.

Based on current expectations, we believe our cash and other liquid assets, anticipated future cash flows, availability

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under our credit facility, access to debt and equity capital markets and sources of available financing will be sufficient to fund expected operating, capital and debt service requirements and other financial commitments for the foreseeable future.

Credit Agreement

As of June 30, 2011, our $350.0 million revolving credit facility, which had a maturity date of October 2013, consisted of $152.2 million in borrowings, $4.7 million in letter of credit guarantees and $193.1 million of unused borrowing capacity. Our credit agreement requires us to comply with certain financial covenants. As of June 30, 2011, we were in compliance with these covenants. Subject to maintaining compliance with these covenants, the $193.1 million unused borrowing capacity is available for general corporate purposes, including acquisitions. As described in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments and our Current Report on Form 8-K filed on August 2, 2011, we amended our credit agreement effective July 29, 2011.

2011 Expected Capital Expenditures

Our expected capital expenditures in 2011 consists of Australian equipment purchases of $87 million, track and equipment improvements of $77 million and equipment lease buyouts of $1 million. In addition, we expect to receive approximately $34 million of grants from outside parties to fund additional property and equipment expenditures related to our existing business in 2011. Including the grant-funded projects, we expect a total of $199 million in capital expenditures in 2011.

For the six months ended June 30, 2011, we have incurred $67.0 million in aggregate capital expenditures, of which we have paid $51.6 million in cash and accrued $15.4 million in accounts payable as of June 30, 2011. We expect to receive $11.3 million in grants from outside parties related to this year-to-date activity. Of this amount, as of June 30, 2011, $9.6 million was included within outstanding grant receivables from outside parties and $1.7 million was collected from outside parties.

Cash of $62.1 million paid for purchases of property and equipment during the six months ended June 30, 2011, included $51.6 million for 2011 capital projects and $10.5 million related to capital expenditures accrued in 2010. Grant proceeds during the six months ended June 30, 2011, included $1.7 million for grants related to 2011 capital expenditures and $10.0 million for grants related to our capital expenditures from 2010.

Accordingly, capital expenditures for the six months ended June 30, 2011, as compared with our 2011 full year expected capital expenditures can be summarized as follows (dollars in thousands):

	Expected Full Year 2011			Spending Incurred During The Six Months Ended June 30, 2011
Australian equipment	$	87,000		$	28,496
Capital expenditures, other than Australian equipment	112,000			38,482
Grant proceeds from outside parties	(34,000		)	(11,255		)
Net capital expenditures	$	165,000		$	55,723

Contractual Obligations and Commercial Commitments

On April 28, 2011, we announced that our subsidiary, GWA, had signed a rail haulage agreement with a subsidiary of WPG Resources Ltd (WPG) to transport 3.3 million tons per year of hematite iron ore from WPG’s to-be-developed Peculiar Knob mine in South Australia. The haulage service is expected to start in the second quarter of 2012 and continue for a minimum of five years, and it may be extended depending on the development of certain nearby iron ore deposits. To provide the above-rail haulage service, GWA entered into a locomotive purchase agreement to acquire nine new, 4,400-horsepower locomotives and will make certain other rolling stock and facilities investments for approximately A$67 million (or $72 million at the June 30, 2011 exchange rate). We expect to make cash payments of approximately A$37 million (or $40 million at the June 30, 2011 exchange rate) in 2011 related to the locomotive purchase and approximately A$30 million (or $33 million at the June 30, 2011 exchange rate) in 2012. When the iron ore mine is shipping at full capacity, we expect the new contract to generate total annual revenues of approximately A$50 million (or $54 million at the June 30, 2011 exchange rate).

On August 2, 2011, we announced that we signed an agreement to acquire all of the capital stock of AZER for approximately $90.1 million in cash. The acquisition will be subject to customary closing conditions and includes certain adjustments for closing date working capital and indebtedness of AZER. We expect to close the acquisition during the third quarter of 2011.

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Off-Balance Sheet Arrangements

An off-balance sheet arrangement includes any contractual obligation, agreement or transaction involving an unconsolidated entity under which we 1) have made guarantees, 2) have a retained or contingent interest in transferred assets, or a similar arrangement, that serves as credit, liquidity or market risk support to that entity for such assets, 3) have an obligation under certain derivative instruments or 4) have any obligation arising out of a material variable interest in such an entity that provides financing, liquidity, market risk or credit risk support to us, or that engages in leasing or hedging services with us. Our off-balance sheet arrangements as of December 31, 2010, consisted of operating lease obligations. There were no material changes in our off-balance sheet arrangements in the six months ended June 30, 2011.

Impact of Foreign Currencies on Operating Revenues and Expenses

When comparing the effects of average foreign currency exchange rates on revenues during the six months ended June 30, 2011, with the six months ended June 30, 2010, foreign currency translation had a positive impact on our consolidated revenues due to the strengthening of the Australian and Canadian dollars and the Euro relative to the United States dollar. Since the world’s major crude oil and refined product market is traded in United States dollars, we believe there was little, if any, impact of foreign currency translation on our fuel sales and fuel costs. Currency effects related to operating revenues and expenses are presented within the discussion of these respective items included within this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Recently Issued Accounting Standards

See Note 12 to our Consolidated Financial Statements included elsewhere in this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

On October 2, 2008, we entered into an interest rate swap agreement to manage our exposure to interest rates on a portion of our outstanding borrowings. The swap has a notional amount of $120.0 million and requires us to pay 3.88% on the notional amount and allows us to receive one-month LIBOR. This swap expires on September 30, 2013. The fair value of the interest rate swap agreement was estimated based on Level 2 valuation inputs. The fair value of the swap represented a liability of $8.4 million at June 30, 2011 and $9.1 million at December 31, 2010.

On December 1, 2010, we entered into an Australian dollar/United States dollar floating to floating cross-currency swap agreement which effectively converted an A$105.0 million intercompany loan receivable in the United States into a $100.6 million loan receivable. We are required to pay Australian dollar BBSW plus 3.125% based on a notional amount of A$105.0 million and receive United States LIBOR plus 2.48% based on a notional amount of $100.6 million on a quarterly basis. BBSW is the wholesale interbank rate within Australia. It is the Australian equivalent to LIBOR. We realized an expense of $1.5 million and $3.0 million within interest income/(expense) related to the quarterly settlement for the three and six months ended June 30, 2011. In addition, we recognized a net gain of $0.1 million within other (expense)/income related to the mark-to-market of the derivative agreement and the underlying intercompany debt instrument to the exchange rate on June 30, 2011. The fair value of the cross-currency swap represented a liability of $12.9 million as of June 30, 2011 and $7.6 million as of December 31, 2010. The fair value of the cross-currency swap agreement was estimated based on Level 2 valuation inputs. The swap expires on December 1, 2012.

During the six months ended June 30, 2011, there were no material changes to the Quantitative and Qualitative Disclosures About Market Risk previously disclosed in our 2010 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures — We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2011. Based upon that

evaluation and subject to the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2011, the disclosure controls and procedures were effective to accomplish their objectives at a reasonable assurance level.

Internal Control Over Financial Reporting — During the three months ended June 30, 2011, there were no changes in

39

our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we are a defendant in certain lawsuits resulting from our operations. Management believes there are adequate provisions in the financial statements for any expected liabilities that may result from disposition of the pending lawsuits. Nevertheless, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. Though currently unexpected and not possible to reasonably estimate, were an unfavorable ruling to occur, there could be a material adverse impact on our operating results, financial condition and liquidity as of and for the period in which the ruling occurs.

ITEM 1A. RISK FACTORS.

For a discussion of our potential risks or uncertainties, please see Risk Factors in Part I, Item 1A of the Company’s 2010 Annual Report on Form 10-K filed with the Securities and Exchange Commission. There have been no material changes to the risk factors disclosed in Part I, Item 1A of the Company’s 2010 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

There were no unregistered sales of equity securities for the period covered by this Quarterly Report on Form 10-Q.

Issuer Purchases of Equity Securities

2011	(a) Total Number of Shares (or Units) Purchased (1)	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
April 1 to April 30	—	$	—	—	—
May 1 to May 31	4,413	$	58.32	—	—
June 1 to June 30	—	$	—	—	—
Total	4,413	$	58.32	—	—

 ______________________

(1) The 4,413 shares acquired in the three months ended June 30, 2011, represent common stock acquired by us from our employees who surrendered shares in lieu of cash either to fund their exercise of stock options or to pay taxes on equity awards in conjunction with our Amended and Restated 2004 Omnibus Plan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

NONE

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

NONE

ITEM 6. EXHIBITS.

For a list of exhibits, see INDEX TO EXHIBITS following the signature page to this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

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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 5, 2011	By:	/S/    TIMOTHY J. GALLAGHER
		Name:	Timothy J. Gallagher
		Title:	Chief Financial Officer
Date:	August 5, 2011	By:	/S/    CHRISTOPHER F. LIUCCI
		Name:	Christopher F. Liucci
		Title:	Chief Accounting Officer and Global Controller

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INDEX TO EXHIBITS

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure, other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit No.	Description of Exhibits
3.1	Articles of Incorporation
	Restated Certificate of Incorporation is incorporated herein by reference to Annex II to the Registrant's Definitive Proxy Statement on Schedule 14A filed on April 15, 2011 (SEC File No. 001-31456).
3.2	By-laws
	Amended By-laws, effective as of August 19, 2004, is incorporated herein by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (SEC File No. 001-31456).
10.1	Second Amended and Restated 2004 Omnibus Incentive Plan is incorporated herein by reference to Annex I to the Company's Definitive Proxy Statement on Schedule 14A dated April 15, 2011 (SEC File No. 001-31456).
10.2	Amendment No. 3 to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of April 8, 2011, is incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on April 14, 2011 (SEC File No. 001-31456).
10.3	Third Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 29, 2011, is incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on August 2, 2011 (SEC File No. 001-31456).
*10.4	Form of Restricted Stock Award Notice under the Second Amended and Restated 2004 Omnibus Incentive Plan.
*10.5	Form of Option Award Notice under the Second Amended and Restated 2004 Omnibus Incentive Plan.
*10.6	Form of Restricted Stock Unit Award Notice under the Second Amended and Restated 2004 Omnibus Incentive Plan.
*31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
*31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
*32.1	Section 1350 Certification
*101	The following financial information from Genesee & Wyoming Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL includes: (i) Consolidated Income Statements for the three and six months ended June 30, 2011 and 2010, (ii) Consolidated Balance Sheets at June 30, 2011 and December 31, 2010, (iii) Consolidated Cash Flow Statements for the six months ended June 30, 2011 and 2010, and (iv) the Notes to Consolidated Financial Statements.

______________________ 

* Exhibit filed or furnished with this Report, as applicable.

42

EX-10.4

Exhibit 10.4

GENESEE & WYOMING INC.

SECOND AMENDED AND RESTATED 2004 OMNIBUS INCENTIVE PLAN

[FORM OF] RESTRICTED STOCK AWARD NOTICE

Grantee:	[Name]
Type of Award:	Restricted Stock Award
Number of Shares:	[Number]
Date of Grant:	[Date]
Anniversary Date:	[Date of First Grant for the Year of the Award] [NOTE: Anniversary Date definition only applicable for awards to non-directors]

1.Grant of Restricted Stock. This Award Notice serves to notify you that the Compensation Committee (the “Committee”) of the Board of Directors of Genesee & Wyoming Inc. (“G&W”) hereby grants to you, under G&W's Second Amended and Restated 2004 Omnibus Incentive Plan (the “Plan”), a restricted stock award (the “Award”), on the terms and conditions set forth in this Award Notice and the Plan, of the number of shares of G&W's Class A Common Stock, par value $.01 per share (the “Common Stock”) set forth above. The Plan is incorporated herein by reference and made a part of this Award Notice. A copy of the Plan is available on G&W's Intranet under Corporate Policies then Human Resources or from G&W's Human Resources Department upon request. You should review the terms of this Award Notice and the Plan carefully. The capitalized terms used in this Award Notice that are not defined herein have the meanings as defined in the Plan.

[2.Restrictions and Vesting. Subject to the terms set forth in this Award Notice and the Plan, provided you are still in the employment or service of G&W or any Subsidiary at that time, the Common Stock represented by the Award will vest as follows: [Number, Number and Number] shares of Common Stock will vest on the first, second and third anniversaries of the Anniversary Date, respectively. In the event of your death, “Disability” or the termination of your employment or service to G&W or any Subsidiary prior to the complete vesting of the Award, the unvested portion of the Award shall be forfeited as of the date of your death, Disability or such termination. The term “Disability” means you are permanently and totally disabled within the meaning of Section 22(e)(3) of the Code.] [NOTE: this version of section 2 is only applicable for awards to non-directors]

[2.Restrictions and Vesting. Subject to the terms set forth in this Award Notice and the Plan, provided you are still in the service of G&W or any Subsidiary at that time, the Common Stock represented by the Award will vest as follows: [Number, Number and Number [NOTE: as applicable]] shares of Common Stock will vest on the date of the next [Number] annual meetings of shareholders, respectively. In the event of your death or the termination of your service to G&W or any Subsidiary prior to the complete vesting of the Award, the unvested portion of the Award shall be forfeited as of the date of your death or such termination.] [NOTE: this version of section 2 is only applicable for awards to directors]

3.Issuance and Taxation of Shares.

(a)Issuance of Shares. Upon satisfaction of the vesting requirements detailed in Section 2, and upon further determining that compliance with this Award Notice has occurred, including compliance with such reasonable requirements as G&W may impose pursuant to the Plan or Section 10 of this Award Notice, and payment of any relevant taxes, G&W shall issue to you a certificate for the previously restricted shares of Common Stock on the earliest practicable date (as determined by G&W) thereafter, or execute an electronic transfer if so requested. The shares of Common Stock may be issued during your lifetime only to you, or after your death to your designated beneficiary, or, in the absence of such beneficiary, to your duly qualified personal representative.

[(b)Tax Withholdings. The issuance of the Common Stock underlying the Award is conditioned upon your making arrangements satisfactory to G&W for the payment to G&W, or its designated agent, of the amount of all taxes required by any governmental authority to be withheld and paid over by G&W to the governmental authority on account of the issuance. The payment of such withholding taxes to G&W, or its designated agent, may be made by one or any combination of the following methods: (i) in cash or by check, (ii) by G&W withholding such taxes from any other compensation owed to you by G&W or any Subsidiary, (iii) an irrevocable election by you to surrender to G&W, or its designated agent, a number of shares of Common Stock underlying the Award sufficient to satisfy the withholding tax obligation, or (iv) any other method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform). You shall promptly notify G&W of any election made pursuant to Section 83(b) of the Internal Revenue Code, as amended, if applicable in your tax jurisdiction.] [NOTE: this version of 3(b) is applicable in U.S. and Canada only]

[(b)Responsibility for Taxes. Regardless of any action G&W, its designated agent, or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that G&W and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or issuance of the Common Stock underlying the Award, the subsequent sale of shares of Common Stock acquired pursuant to such issuance and the receipt of any dividends; and (ii) do not commit, other than in accordance with the Plan, to structure the terms of the award or any aspect of the Award to reduce or eliminate your liability for Tax-Related Items.

Prior to issuance of the Common Stock underlying the Award, you shall pay cash or make adequate arrangements satisfactory to G&W and/or the Employer to satisfy all withholding and payment on account of obligations of G&W and/or the Employer. In this regard, you authorize G&W and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by G&W and/or the Employer. Alternatively, or in addition, if permissible under local law, G&W, or its designated agent, may withhold in shares of Common Stock from the issuance of the Common Stock underlying the Award, provided that G&W, or its designated agent, only withholds the amount of shares of Common Stock necessary to satisfy the minimum withholding amount. Finally, you shall pay to G&W, its designated agent, or the Employer any amount of Tax-Related Items that G&W or the Employer may be required to withhold as a result of your participation in the Plan or receipt of shares of Common Stock that cannot be satisfied by the means previously described. G&W, or its designated agent, may refuse to honor the issuance and refuse to deliver the shares of Common Stock if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

The payment of such withholding taxes to G&W, or its designated agent, may also be made pursuant

2

to any method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform).] [NOTE: this version of 3(b) is applicable in Australia only] [NOTE: For Netherlands 3(b) is not applicable; insert “(b) RESERVED”]

[4.Effect of Breach of Certain Covenants.

(a)In General. If you engage in the conduct described in subsection (c) of this Section 4, then, unless the Committee determines otherwise: (i) you immediately forfeit, effective as of the date you engage in such conduct, the unvested portion of the Award; and (ii) you must return to G&W the shares of Common Stock that vested within the six-month period immediately preceding the date you engage in such conduct or, at the option of G&W, pay to G&W the Fair Market Value, as of the date you engage in such conduct, of the shares of Common Stock that vested within such six-month period.

(b)Set-Off. By accepting the Award, you consent to a deduction from any amounts G&W or any Subsidiary owes you from time to time (including, but not limited to, amounts owed to you as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amount that you owe G&W under subsection (a) of this Section 4. G&W may elect to make any set-off in whole or in part. If G&W does not recover by means of a set-off the full amount that you owe G&W, you shall immediately pay the unpaid balance to G&W.

(c)Conduct. You hereby agree that you will not, without the written consent of G&W, either during your employment by or service to G&W or any Subsidiary or thereafter, disclose to anyone or make use of any confidential information which you acquired during your employment or service relating to any of the business of G&W or any Subsidiary, except as such disclosure or use may be required in connection with your work as an employee or consultant of G&W or any Subsidiary. During your employment by or service to G&W or any Subsidiary, and for a period of six months after the termination of such employment or service, you will not, either as principal, agent, consultant, employee, stockholder or otherwise, engage in any work or other activity in direct competition with G&W or any Subsidiary. (For purposes of this Section 4, you shall not be deemed a stockholder of any company subject to the periodic and other reporting requirements of the Exchange Act, if your record and beneficial ownership of any such company amount to not more than five percent of the outstanding capital stock of any such company.) The non-competition covenant of this Section 4 applies separately in the United States and in other countries. Your breach of the covenant of this subsection (c) shall result in the consequences described in this Section 4.] [NOTE: not applicable in director restricted stock award; insert “4. RESERVED” if not applicable][NOTE: this section 4 is only applicable to some Grantees, including Executive Officers; insert “4. RESERVED” if not applicable]

[5.Effect of Change in Control.

(a)Upon the occurrence of a “Change in Control” of G&W, the unvested portion of the Award shall immediately vest as of the date of the occurrence of such event.

(b)The term “Change in Control” shall be deemed to have occurred when:

(i)Any “person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding G&W and any Subsidiary and any employee benefit plan sponsored or maintained by G&W or any Subsidiary (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of G&W

3

representing 35% or more of the combined voting power of G&W's then outstanding securities (other than indirectly as a result of G&W's redemption of its securities); provided, however, that in no event shall a Change in Control be deemed to have occurred under this Section 5(b)(i) so long as (x) the combined voting power of shares beneficially owned by (A) G&W's executive officers (as defined in Rule 16a-1(f) under the Exchange Act) then in office (the “Executive Officer Shares”), (B) Mortimer B. Fuller and/or Sue Fuller and their lineal descendents (the “Founder Shares”), and (C) the shares beneficially owned by any other members of a “group” that includes the Founder Shares and/or a majority of the Executive Officer shares, exceeds 35% of the combined voting power of G&W's current outstanding securities and remains the person or group with beneficial ownership of the largest percentage of combined voting power of G&W's outstanding securities and (y) G&W remains subject to the reporting requirements of the Exchange Act; or

(ii)The consummation of any merger or other business combination of G&W, a sale of 51% or more of G&W's assets, liquidation or dissolution of G&W or a combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the shareholders of G&W and any trustee or fiduciary of any G&W employee benefit plan immediately prior to the Transaction own at least 51% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser of or successor to G&W's assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D), as applicable, the “Surviving Entity”) or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or

(iii)Within any twelve-month period, the persons who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to G&W, including any Surviving Entity. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two‑thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).] [NOTE: this section 5 is only applicable to some Grantees, including Executive Officers and directors; insert “5. RESERVED” if not applicable]

6.Book-Entry Registration. The Award initially will be evidenced by book-entry registration only, without the issuance of a certificate representing the shares of Common Stock underlying the Award.

7.Nonassignability. The shares of Common Stock underlying the Award and the right to vote such shares and to receive dividends thereon, may not, except as otherwise provided in the Plan, be sold,

4

alienated, assigned, transferred, pledged or encumbered in any way prior to the vesting of such shares, whether by operation of law or otherwise, except by will or the laws of descent and distribution. After vesting, the sale or other transfer of the shares of Common Stock shall be subject to applicable laws and regulations under the Exchange Act and the Securities Act of 1933, as applicable.

8.Rights as a Stockholder. Unless the Award is forfeited or cancelled, prior to the vesting of the shares of Common Stock awarded under this Award Notice, you will have all of the other rights of a stockholder with respect to the shares of Common Stock underlying the Award, including, but not limited to, the right to receive such cash dividends, if any, as may be declared on such shares from time to time and the right to vote (in person or by proxy) such shares at any meeting of stockholders of G&W.

9.Rights of G&W and Subsidiaries. This Award Notice does not affect the right of G&W or any Subsidiary to take any corporate action whatsoever, including without limitation its right to recapitalize, reorganize or make other changes in its capital structure or business, merge or consolidate, issue bonds, notes, shares of Common Stock or other securities, including preferred stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or business.

10.Restrictions on Issuance of Shares. If at any time G&W determines that the listing, registration or qualification of the shares of Common Stock underlying the Award upon any securities exchange or under any federal, state or local law, or the approval of any governmental agency, is necessary or advisable as a condition to the issuance of a certificate representing any vested shares of Common Stock under this Award Notice, such issuance may not be made in whole or in part unless and until such listing, registration, qualification or approval shall have been effected or obtained free of any conditions not acceptable to G&W.

11.Plan Controls. The Award is subject to all of the provisions of the Plan, which is hereby incorporated by reference, and is further subject to all the interpretations, amendments, rules and regulations that may from time to time be promulgated and adopted by the Committee pursuant to the Plan. In the event of any conflict among the provisions of the Plan and this Award Notice, the provisions of the Plan will be controlling and determinative.

12.Amendment. Except as otherwise provided by the Plan, G&W may only alter, amend or terminate the Award with your consent.

13.Governing Law. This Award and Award Notice shall be governed by and construed in accordance with the laws of the State of New York, except as superseded by applicable federal law, without giving effect to its conflicts of law provisions.

14. Language. If you have received this Award Notice or any other document related to the Plan in a language other than English and if the translated version bears a meaning that is different from that of the English version, the English version will control, to the extent permitted by law.

15.Notices. All notices and other communications to G&W, or its designated agent, required or permitted under this Award Notice shall be written, and shall be either delivered personally or sent by registered or certified first-class mail, postage prepaid and return receipt requested, by facsimile or electronically. If such notice or other communication is to G&W then it should be addressed to G&W's office at 200 Meridian Centre, Suite 300, Rochester, New York 14618, Attention: Equity Plan Administrator; Telephone: (585) 328-8601; Facsimile: (585) 328-8622; Email: EquityPlanAdmin@gwrr.com. If such notice or other communication is to G&W's designated agent, then it should be addressed and sent in accordance with established procedures. Each such notice and other communication delivered personally shall be deemed to have been given when received. Each such notice and other communication delivered by United States

5

mail shall be deemed to have been given when it is received, and each such notice and other communication delivered by facsimile or electronically shall be deemed to have been given when it is so transmitted and the appropriate answerback is received.

16.Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Employer, and G&W and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan, to the extent permitted by law.

You understand that G&W and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in G&W, details of all restricted stock awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”).  You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient's country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative.  You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon issuance of the Common Stock underlying the Award, to the extent permitted by law.  You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

17.Electronic Delivery. G&W may, in its sole discretion, decide to deliver any documents related to the Award granted under the Plan (or related to future restricted stock awards that may be granted under the Plan) by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, hereby agree to participate in the Plan through an on-line or electronic system established and maintained by G&W or another third party designated by G&W.

18.Severability. The provisions of this Award Notice are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

6

ACKNOWLEDGEMENT

The undersigned acknowledges receipt of, and understands and agrees to be bound by, this Award Notice and the Plan. The undersigned further acknowledges that this Award Notice and the Plan set forth the entire understanding between him or her and G&W regarding the restricted stock granted by this Award Notice and that this Award Notice and the Plan supersede all prior oral and written agreements on that subject.

Dated: _____________________

_______________________________

[Name]

Genesee & Wyoming Inc. By:

_______________________________

Matthew C. Brush

Chief Human Resource Officer

7

[NOTE: only applicable in the Netherlands]

ADDENDUM TO RESTRICTED STOCK AWARD NOTICE

THE PARTIES

(1) GENESEE & WYOMING INC, a company incorporated under the laws of the State of Delaware, the United States, duly represented by Matthew C. Brush, hereafter referred to as G&W

And

(2) [Name], residing at [Address], hereafter referred to as the Beneficiary

The parties referred to under (1) and (2) above are hereafter together referred to as the Parties.

WHEREAS

(A) The Beneficiary is [Title] of [Company Name] (the “Employer”) and Beneficiary has entered into an employment contract with the Employer on [Date];

(B) G&W has acquired the entire share capital of the Employer on [Date];

(C) G&W and the Beneficiary have agreed on a restricted stock award as described in the letter dated [Date];

(D) In connection with the letter referred to under (C) above, the Parties enter into an Award Notice (the "Award Notice"); and

(E) For the purpose of compliance of the Award Notice with the provisions of Dutch law (if applicable), the terms and conditions of this Addendum shall apply in deviation of, or in addition to certain terms and conditions of the Award Notice.

HAVE AGREED ON THE FOLLOWING

1. DEFINITIONS

Except as provided otherwise in this Addendum, the definitions of the Award Notice shall apply to this Addendum.

2. DISABILITY

Regarding satisfaction of vesting requirements and issuance of share certificates, Clause 2 of the Award Notice shall, in addition to the meaning provided in that Clause, also apply in the circumstance that the Beneficiary is permanently ill and that, as a result thereof, the employment contract between the Beneficiary and the Employer is terminated, in compliance with Dutch law.

3. [NON COMPETITION

Clause 4(c) of the Award Notice provides for a non-competition covenant to which the Beneficiary shall be bound for a period of six months following the termination of the Beneficiary's employment contract with the Employer. In deviation of Clause 4(c) of the Award Notice, the non-competition covenant is limited solely to the territory of Europe.] [NOTE: this section 3 is only applicable to some Grantees; insert “3. RESERVED” if not applicable]

4. DATA PRIVACY

4.1    In deviation of Clause 16 of the Award Notice, the following shall apply. The Parties acknowledge that all personal data which are necessary for the performance of the contract provided in the Award Notice shall be

8

collected, used and/or transferred to G&W. The personal data shall be processed for the exclusive purpose of implementing, administering and managing the Beneficiary's participation in the Plan. Furthermore, Parties acknowledge that the Employer shall be the controller in the meaning of the Dutch Data Protection Act. To the extent necessary, the Beneficiary explicitly agrees with the processing of his personal data as referred to in this Clause 4 of the Addendum, and specifically with the transfer of the Beneficiary's personal data to G&W in the United States.

4.2    The personal data to be processed shall include: the Beneficiary's name, home address, e-mail address, salary, job title, any shares of stock or directorships held in G&W, details of all restricted stock awards or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in favour of the Beneficiary, necessary for the performance of the Award Notice. Upon the issuance of the Common Stock underlying the Award, additional information may be required regarding bank or brokerage account(s) held by the Beneficiary. In case of death of the Beneficiary, the personal data mentioned in this Clause 4.2 shall also be required from the Beneficiary's inheritors.

5. TAX

The Award is subject to tax at the moment it is granted or at the moment it vests. G&W and/or the Employer will file a request with the appropriate tax authorities in order to receive advance certainty in this respect.

Regardless of any action G&W, its designated agent, or the Employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that G&W and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award grant, including the grant or vesting of the Award, the subsequent sale of shares of Common Stock acquired pursuant to such grant or vesting and the receipt of any dividends; and (2) do not commit, other than in accordance with the Plan, to structure the terms of the grant or any aspect of the Award to reduce or eliminate your liability for Tax-Related Items.

Prior to the grant or vesting of the Award, you shall pay or make adequate arrangements satisfactory to G&W and/or the Employer to satisfy all withholding and payment on account obligations of G&W and/or the Employer. In this regard, you authorize G&W and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by G&W and/or the Employer or from proceeds of the sale of shares of Common Stock. Alternatively, or in addition, if permissible under local law, G&W, or its designated agent, may (1) sell or arrange for the sale of shares of Common Stock that you acquire to meet the withholding obligation for Tax-Related Items, and/or (2) withhold in shares of Common Stock, provided that G&W, or its designated agent, only withholds the amount of shares of Common Stock necessary to satisfy the minimum withholding amount. Finally, you shall pay to G&W, its designated agent, or the Employer any amount of Tax-Related Items that G&W or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of shares of Common Stock that cannot be satisfied by the means previously described.

G&W, or its designated agent, may refuse to honor the vesting and refuse to issue a certificate representing such vested shares of Common Stock if you fail to comply with your obligations in connection with the Tax Related Items as described in this section.

6. AWARD NOTICE

Unless described otherwise in this Addendum, the terms and conditions of the Award Notice shall be fully valid and binding between the Parties.

7. GOVERNING LAW

9

7.1    This Addendum shall be governed by the laws of the Netherlands.

7.2    The competent court of Rotterdam has exclusive jurisdiction to settle any dispute arising out of or in connection with this Addendum.

SIGNATORIES

Thus agreed upon and executed in duplicate in ________________________ on ________________.

______________________________________

[Name]

Genesee & Wyoming Inc. By:

_______________________________

Matthew C. Brush

Chief Human Resource Officer

10

EX-10.5

Exhibit 10.5

GENESEE & WYOMING INC.

SECOND AMENDED AND RESTATED 2004 OMNIBUS INCENTIVE PLAN

[FORM OF] OPTION AWARD NOTICE

Grantee:	[Name]
Type of Award:	[Type]
Number of Shares:	[Number]
Exercise Price Per Share:	[Price]
Date of Grant:	[Date]
Expiration Date:	[Five Years from the Grant Date]
Anniversary Date:	[Date of First Grant for the Year of the Option]

1.Grant of Option. This Award Notice serves to notify you that the Compensation Committee (the “Committee”) of the Board of Directors of Genesee & Wyoming Inc. (“G&W”) hereby grants to you, under G&W's Second Amended and Restated 2004 Omnibus Incentive Plan (the “Plan”), an [Type] stock option (the “Option”) to purchase, on the terms and conditions set forth in this Award Notice and the Plan, up to the number of shares of G&W's Class A Common Stock, par value $.01 per share (the “Common Stock”) at the exercise price per share set forth above. The Plan is incorporated herein by reference and made a part of this Award Notice. A copy of the Plan is available on G&W's Intranet under Corporate Policies then Human Resources or from G&W's Human Resources Department upon request. You should review the terms of this Award Notice and the Plan carefully. The capitalized terms used in this Award Notice that are not defined herein have the meanings as defined in the Plan.

2.Term. Unless the Option is previously terminated pursuant to the terms of the Plan or this Award Notice, the Option will expire at the close of business on the Expiration Date.

3.Vesting. Subject to the terms set forth in this Award Notice and the Plan, the Option will vest and become exercisable as follows:

(i)the Option shall first become exercisable with respect to [Number] Shares on [Anniversary Date Year 1];

(ii)the Option shall first become exercisable with respect to an additional [Number] Shares on [Anniversary Date Year 2]; and

(iii)the Option shall first become exercisable with respect to an additional [Number] Shares on [Anniversary Date Year 3].

4.Exercise.

(a)Method of Exercise. To the extent exercisable under Section 3, the Option may be exercised in whole or in part, provided that the Option may not be exercised for less than one share of Common Stock in any single transaction. The Option shall be exercised by your giving appropriate notice of such exercise to G&W, or its designated agent in accordance with established procedures, specifying the number of shares of Common Stock that you elect to purchase and the Exercise Price to be paid. Upon determining

1

that compliance with this Award Notice has occurred, including compliance with such reasonable requirements as G&W may impose pursuant to the Plan or Section 12 of this Award Notice and payment of the Exercise Price, G&W, or its designated agent, shall issue to you a certificate for the shares of Common Stock purchased on the earliest practicable date (as determined by G&W) thereafter.

(b)Payment of Exercise Price. To the extent permissible under the Plan, the Exercise Price may be paid using any one or any combination of the following methods:

(i)in cash or by check, with such payment accompanying your written exercise notice;

[(ii)by delivery of shares of Common Stock already owned by you, with such shares of Common Stock valued at their Fair Market Value on the date of the Option exercise;] [NOTE: not applicable in Australia or the Netherlands; insert “(ii) RESERVED” if not applicable]

(iii) subject to any and all limitations imposed by the Committee from time to time (which may not be uniform), a “cashless exercise,” whereby you would irrevocably instruct a broker or dealer to sell shares of Common Stock on your behalf and deliver cash sale proceeds to G&W, or its designated agent, in payment of the Exercise Price and, if applicable, direct G&W, or its designated agent, to deliver shares of Common Stock to be issued upon such exercise of this Option directly to such broker or dealer; or

(iv) any other method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform).

[(c)Withholdings. The exercise of the Option is conditioned upon your making arrangements satisfactory to G&W for the payment to G&W, or its designated agent, of the amount of all taxes required by any governmental authority to be withheld and paid over by G&W to the governmental authority on account of the exercise. The payment of such withholding taxes to G&W, or its designated agent, may be made by one or any combination of the following methods: (i) in cash or by check, (ii) by G&W withholding such taxes from any other compensation owed to you by G&W or any Subsidiary, (iii) pursuant to a cashless exercise program as contemplated in Section 4(b)(iii) above or (iv) any other method approved or accepted by the Committee in its sole discretion, subject, in the case of Section 4(c)(iii) and this Section 4(c)(iv), to any and all limitations imposed by the Committee from time to time (which may not be uniform) as contemplated in Section 4(b)(iii) and Section 4(b)(iv) above.] [NOTE: this version of 4(c) is applicable in U.S. and Canada only]

[(c)Responsibility for Taxes. Regardless of any action G&W, its designated agent, or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that G&W and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of the Option, the subsequent sale of shares of Common Stock acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit, other than in accordance with the Plan, to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability for Tax-Related Items.

2

Prior to exercise of the Option, you shall pay or make adequate arrangements satisfactory to G&W and/or the Employer to satisfy all withholding and payment on account of obligations of G&W and/or the Employer. In this regard, you authorize G&W and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by G&W and/or the Employer or from proceeds of the sale of shares of Common Stock. Alternatively, or in addition, if permissible under local law, G&W, or its designated agent, may sell or arrange for the sale of shares of Common Stock that you acquire to meet the withholding obligation for Tax‑Related Items. Finally, you shall pay to G&W, its designated agent, or the Employer any amount of Tax-Related Items that G&W or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of shares of Common Stock that cannot be satisfied by the means previously described. G&W, or its designated agent, may refuse to honor the exercise and refuse to deliver the shares of Common Stock if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

The payment of such withholding taxes to G&W may also be made pursuant to any method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform) as contemplated in Section 4(b)(iii) and 4(b)(iv) above.] [NOTE: this version of 4(c) is applicable in Australia and the Netherlands only]

5.Effect of Death. In the event of your death prior to the complete exercise of the Option, the remaining portion of the Option may be exercised in whole or in part, subject to all of the conditions on exercise imposed by the Plan and this Award Notice, within one yearafter the date of your death, but only: (i) by the beneficiary designated on your beneficiary designation form filed with G&W, or in the absence of same, by your estate or by or on behalf of the person or persons to whom the Option passes under your will or the laws of descent and distribution, (ii) to the extent that the Option was vested and exercisable on the date of your death, and (iii) prior to the close of business on the Expiration Date of the Option.

6.Effect of Disability. In the event of your “Disability” prior to the complete exercise of the Option, the remaining portion of the Option may be exercised in whole or in part, subject to all of the conditions on exercise imposed by the Plan and this Award Notice, within one year after the date of your Disability, but only: (i) to the extent that the Option was vested and exercisable on the date of your Disability, and (ii) prior to the close of business on the Expiration Date of the Option. The term “Disability” means you are permanently and totally disabled within the meaning of Section 22(e)(3) of the Code.

7.Effect of Other Termination.

(a)With “Cause.” Upon your termination by G&W for Cause prior to the complete exercise of the Option, the remaining portion of the Option, whether or not then exercisable, shall be forfeited as of the date of such termination and no longer exercisable on or after such date of termination.

(b)Without “Cause.” Upon your termination for a reason other than death, Disability or Cause prior to the complete exercise of the Option, the remaining portion of the Option may be exercised in whole or in part, subject to all of the conditions on exercise imposed by the Plan and this Award Notice, within three months after the date of such termination, but only: (i) to the extent that the Option was vested and exercisable on the date of such termination, and (ii) prior to the Expiration Date of the Option.

(c)The term “Cause” means (i) your willful and continued failure to substantially perform your duties with G&W or a Subsidiary after written warnings identifying the lack of substantial performance are delivered to you to specifically identify the manner in which G&W or a Subsidiary believes that you have not substantially performed your duties, (ii) your willful engaging in illegal conduct which is materially and demonstrably injurious to G&W or any Subsidiary, (iii) your commission of a felony, (iv) your material

3

breach of a fiduciary duty owed by you to G&W or any Subsidiary, (v) your intentional unauthorized disclosure to any person of confidential information or trade secrets of a material nature relating to the business of G&W or any Subsidiary, or (vi) your engaging in any conduct that G&W's or a Subsidiary's written rules, regulations or policies specify as constituting grounds for discharge.

[(d)In the event of termination of your employment (whether or not in breach of local labor laws), your right to receive an Option and vest in an Option under the Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment (whether or not in breach of local labor laws), your right to exercise the Option after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Committee shall have the exclusive discretion to determine when you are no longer actively employed for purposes of your Option grant.] [NOTE: this provision 7(d) is applicable in Australia and the Netherlands only]

[8.Notice of Disposition of Shares. You hereby agree that you shall promptly notify G&W of the disposition of any of the shares of Common Stock acquired upon exercise of the Option, including a disposition by sale, exchange, gift or transfer of legal title, if such disposition occurs within two years from the Date of Grant or within one year from the date that you exercise the Option and acquire such shares of Common Stock.] [NOTE: this provision 8 is applicable in U.S. only; if not applicable insert “8. RESERVED”]

9.Nonassignability. The Option may not be sold, alienated, transferred, assigned, encumbered or pledged in any way prior to the vesting of the Option, whether by operation of law or otherwise, except by will or the laws of descent and distribution. Except as otherwise provided by Section 5 of this Award Notice, the Option is only exercisable by you during your lifetime. After exercising the Option, the sale or other transfer of the shares of Common Stock shall be subject to applicable laws and regulations under the Exchange Act and the Securities Act of 1933, as applicable.

10.Limitation of Rights. You will not have any rights as a stockholder with respect to the shares of Common Stock covered by the Option until you become the holder of record of such shares by exercising the Option. Neither the Plan, the granting of the Option nor this Award Notice gives you any right to remain in the employment of G&W or any Subsidiary.

11.Rights of G&W and Subsidiaries. This Award Notice does not affect the right of G&W or any Subsidiary to take any corporate action whatsoever, including without limitation its right to recapitalize, reorganize or make other changes in its capital structure or business, merge or consolidate, issue bonds, notes, shares of Common Stock or other securities, including preferred stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or business.

12.Restrictions on Issuance of Shares. If at any time G&W determines that the listing, registration or qualification of the shares covered by the Option upon any securities exchange or under any federal, state or local law, or the approval of any governmental agency, is necessary or advisable as a condition to the exercise of the Option, the Option may not be exercised in whole or in part unless and until such listing, registration, qualification or approval shall have been effected or obtained free of any conditions not acceptable to G&W.

13.Plan Controls. The Option is subject to all of the provisions of the Plan, which is hereby incorporated by reference, and is further subject to all the interpretations, amendments, rules and regulations

4

that may from time to time be promulgated and adopted by the Committee pursuant to the Plan. In the event of any conflict among the provisions of the Plan and this Award Notice, the provisions of the Plan will be controlling and determinative.

14.Amendment. Except as otherwise provided by the Plan, G&W may only alter, amend or terminate the Option with your consent.

15.Governing Law. This Option grant and Award Notice shall be governed by and construed in accordance with the laws of the State of New York, except as superseded by applicable federal law, without giving effect to its conflicts of law provisions.

16.Notices. All notices and other communications to G&W, or its designated agent, required or permitted under this Award Notice shall be written, and shall be either delivered personally or sent by registered or certified first-class mail, postage prepaid and return receipt requested, by facsimile or electronically. If such notice or other communication is to G&W then it should be addressed to G&W's office at 200 Meridian Centre, Suite 300, Rochester, New York 14618, Attention: Equity Plan Administrator; Telephone: (585) 328-8601; Facsimile: (585) 328-8622; Email: EquityPlanAdmin@gwrr.com. If such notice or other communication is to G&W's designated agent, then it should be addressed and sent in accordance with established procedures. Each such notice and other communication delivered personally shall be deemed to have been given when received. Each such notice and other communication delivered by United States mail shall be deemed to have been given when it is received, and each such notice and other communication delivered by facsimile or electronically shall be deemed to have been given when it is so transmitted and the appropriate answerback is received.

17. Language. If you have received this Award Notice or any other document related to the Plan in a language other than English and if the translated version bears a meaning that is different from that of the English version, the English version will control, to the extent permitted by law.

18.Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Employer, and G&W and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan, to the extent permitted by law.

You understand that G&W and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in G&W, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”).  You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient's country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative.  You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon exercise of the Option, to the extent permitted by law.  You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein,

5

in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

19.Electronic Delivery. G&W may, in its sole discretion, decide to deliver any documents related to the Option granted under the Plan (or related to future options that may be granted under the Plan) by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, hereby agree to participate in the Plan through an on-line or electronic system established and maintained by G&W or another third party designated by G&W.

20.Severability. The provisions of this Award Notice are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

[xx.Nature of Grant. In accepting the grant, you acknowledge that:

(a)the Plan is established voluntarily by G&W, it is discretionary in nature and it may be modified, amended, suspended or terminated by G&W at any time, unless otherwise provided in the Plan and this Award Notice;

(b)the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past;

(c)all decisions with respect to future option grants, if any, will be at the sole discretion of G&W;

(d)your participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate your employment relationship at any time with or without cause;

(e)you are voluntarily participating in the Plan;

(f)the Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to G&W or the Employer, and which is outside the scope of your employment contract, if any;

(g)the Option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for G&W or the Employer;

(h)in the event that you are not an employee of G&W, the Option grant will not be interpreted to form an employment contract or relationship with G&W; and furthermore, the Option grant will not be interpreted to form an employment contract with the Employer or any Subsidiary or affiliate of G&W;

(i)the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty;

(j)if the underlying shares of Common Stock do not increase in value, the Option will have no

6

value;

(k)if you exercise your Option and obtain shares of Common Stock, the value of those shares of Common Stock acquired upon exercise may increase or decrease in value, even below the exercise price; and

(l)in consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or diminution in value of the Option or shares of Common Stock purchased through exercise of the Option resulting from termination of your employment by G&W or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release G&W and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Award Notice, you shall be deemed irrevocably to have waived your entitlement to pursue such claim.] [NOTE: this section is only applicable in Australia and the Netherlands]

[xy.Effect of Breach of Certain Covenants.

(a)In General. If you engage in the conduct described in subsection (c) of this Section [xy], then, unless the Committee determines otherwise: (i) you immediately forfeit, effective as of the date you engage in such conduct, the unexercised portion of the Option; and (ii) you must pay to G&W the amount of any gain realized or payment received as a result of the exercise of the Option within the six-month period immediately preceding the date you engage in such conduct.

(b)Set-Off. By accepting the Option, you consent to a deduction from any amounts G&W or any Subsidiary owes you from time to time (including, but not limited to, amounts owed to you as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amount that you owe G&W under subsection (a) of this Section [xy]. G&W may elect to make any set-off in whole or in part. If G&W does not recover by means of a set-off the full amount that you owe G&W, you shall immediately pay the unpaid balance to G&W.

(c)Conduct. You hereby agree that you will not, without the written consent of G&W, either during your employment by or service to G&W or any Subsidiary or thereafter, disclose to anyone or make use of any confidential information which you acquired during your employment or service relating to any of the business of G&W or any Subsidiary, except as such disclosure or use may be required in connection with your work as an employee or consultant of G&W or any Subsidiary. During your employment by or service to G&W or any Subsidiary, and for a period of six months after the termination of such employment or service, you will not, either as principal, agent, consultant, employee, stockholder or otherwise, engage in any work or other activity in direct competition with G&W or any Subsidiary. (For purposes of this Section [xy], you shall not be deemed a stockholder of any company subject to the periodic and other reporting requirements of the Exchange Act, if your record and beneficial ownership of any such company amount to not more than five percent of the outstanding capital stock of any such company.) The non-competition covenant of this Section [xy] applies separately in the United States and in other countries. Your breach of the covenant of this subsection (c) shall result in the consequences described in this Section [xy].] [NOTE: this section is only applicable to some Grantees, including Executive Officers]

[xz.Effect of Change in Control.

(a)Upon the occurrence of a “Change in Control” of G&W, the unvested portion of the Option shall immediately vest as of the date of the occurrence of such event.

7

(b)The term “Change in Control” shall be deemed to have occurred when:

(i)Any “person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding G&W and any Subsidiary and any employee benefit plan sponsored or maintained by G&W or any Subsidiary (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of G&W representing 35% or more of the combined voting power of G&W's then outstanding securities (other than indirectly as a result of G&W's redemption of its securities); provided, however, that in no event shall a Change in Control be deemed to have occurred under this Section [xz](b)(i) so long as (x) the combined voting power of shares beneficially owned by (A) G&W's executive officers (as defined in Rule 16a-1(f) under the Exchange Act) then in office (the “Executive Officer Shares”), (B) Mortimer B. Fuller and/or Sue Fuller and their lineal descendents (the “Founder Shares”), and (C) the shares beneficially owned by any other members of a “group” that includes the Founder Shares and/or a majority of the Executive Officer shares, exceeds 35% of the combined voting power of G&W's current outstanding securities and remains the person or group with beneficial ownership of the largest percentage of combined voting power of G&W's outstanding securities and (y) G&W remains subject to the reporting requirements of the Exchange Act; or

(ii)The consummation of any merger or other business combination of G&W, a sale of 51% or more of G&W's assets, liquidation or dissolution of G&W or a combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the shareholders of G&W and any trustee or fiduciary of any G&W employee benefit plan immediately prior to the Transaction own at least 51% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser of or successor to G&W's assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D), as applicable, the “Surviving Entity”) or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or

(iii)Within any twelve-month period, the persons who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to G&W, including any Surviving Entity. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two‑thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).] [NOTE: this section is only applicable to some Grantees, including Executive Officers]

8

ACKNOWLEDGEMENT

The undersigned acknowledges receipt of, and understands and agrees to be bound by, this Award Notice and the Plan. The undersigned further acknowledges that this Award Notice and the Plan set forth the entire understanding between him and G&W regarding the [Type] stock options granted by this Award Notice and that this Award Notice and the Plan supersede all prior oral and written agreements on that subject.

Dated: ________________________

_______________________________

[Name]

Genesee & Wyoming Inc. By:

_______________________________

Matthew C. Brush

Chief Human Resource Officer

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[NOTE: only applicable in the Netherlands]

ADDENDUM TO NON-QUALIFIED OPTIONS AWARD NOTICE

THE PARTIES

(1) GENESEE & WYOMING INC, a company incorporated under the laws of the State of Delaware, the United States, duly represented by Matthew C. Brush, hereafter referred to as G&W

And

(2) [Name], residing at [Address], hereafter referred to as the Beneficiary

The parties referred to under (1) and (2) above are hereafter together referred to as the Parties.

WHEREAS

(A) The Beneficiary is [Title] of [Company Name] (the “Employer”) and Beneficiary has entered into an employment contract with the Employer on [Date];

(B) G&W has acquired the entire share capital of the Employer on [Date];

(C) G&W and the Beneficiary have agreed on an option grant as described in the letter dated [Date];

(D) In connection with the letter referred to under (C) above, the Parties enter into an Award Notice (the "Award Notice"); and

(E) For the purpose of compliance of the Award Notice with the provisions of Dutch law (if applicable), the terms and conditions of this Addendum shall apply in deviation of, or in addition to certain terms and conditions of the Award Notice.

HAVE AGREED ON THE FOLLOWING

1. DEFINITIONS

Except as provided otherwise in this Addendum, the definitions of the Award Notice shall apply to this Addendum.

2. DISABILITY

Clause 6 of the Award Notice shall, in addition to the meaning provided in that Clause, also apply in the circumstance that the Beneficiary is permanently ill and that, as a result thereof, the employment contract between the Beneficiary and the Employer is terminated, in compliance with Dutch law.

3. [NON COMPETITION

Clause [xy](c) of the Award Notice provides for a non-competition covenant to which the Beneficiary shall be bound for a period of six months following the termination of the Beneficiary's employment contract with the Employer. In deviation of Clause [xy](c) of the Award Notice, the non-competition covenant is limited solely to the territory of Europe.] [NOTE: this section 3 is only applicable to some Grantees; insert “3. RESERVED” if not applicable]

4. DATA PRIVACY

4.1    In deviation of Clause 18 of the Award Notice, the following shall apply. The Parties acknowledge that all personal data which are necessary for the performance of the contract provided in the Award Notice shall be

10

collected, used and/or transferred to G&W. The personal data shall be processed for the exclusive purpose of implementing, administering and managing the Beneficiary's participation in the Plan. Furthermore, Parties acknowledge that the Employer shall be the controller in the meaning of the Dutch Data Protection Act. To the extent necessary, the Beneficiary explicitly agrees with the processing of his personal data as referred to in this Clause 4 of the Addendum, and specifically with the transfer of the Beneficiary's personal data to G&W in the United States.

4.2    The personal data to be processed shall include: the Beneficiary's name, home address, e-mail address, salary, job title, any shares of stock or directorships held in G&W, details of all options or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in favour of the Beneficiary, necessary for the performance of the Award Notice. Upon the vesting of the options, additional information may be required regarding bank or brokerage account(s) held by the Beneficiary. In case of death of the Beneficiary, the personal data mentioned in this Clause 4.2 shall also be required from the Beneficiary's inheritors.

5. AWARD NOTICE

Unless described otherwise in this Addendum, the terms and conditions of the Award Notice shall be fully valid and binding between the Parties.

6. GOVERNING LAW

6.1    This Addendum shall be governed by the laws of the Netherlands.

6.2    The competent court of Rotterdam has exclusive jurisdiction to settle any dispute arising out of or in connection with this Addendum.

SIGNATORIES

Thus agreed upon and executed in duplicate in ________________________ on ________________.

______________________________________

[Name]

Genesee & Wyoming Inc. By:

_______________________________

Matthew C. Brush

Chief Human Resource Officer

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EX-10.6

Exhibit 10.6

GENESEE & WYOMING INC.

SECOND AMENDED AND RESTATED 2004 OMNIBUS INCENTIVE PLAN

[FORM OF] RESTRICTED STOCK UNIT AWARD NOTICE

Grantee:	[Name]
Type of Award:	Restricted Stock Unit Award
Number of Units:	[Number]
Date of Grant:	[Date]
Anniversary Date:	[Date of First Grant for the Year of the Award] [NOTE: Anniversary Date definition only applicable for awards to non-directors]

1.Grant of Restricted Stock Units. This Award Notice serves to notify you that the Compensation Committee (the “Committee”) of the Board of Directors of Genesee & Wyoming Inc. (“G&W”) hereby grants to you, under G&W's Second Amended and Restated 2004 Omnibus Incentive Plan (the “Plan”), a restricted stock unit award (the “Award”), on the terms and conditions set forth in this Award Notice and the Plan, of the number of units (the “Units”) set forth above. The Plan is incorporated herein by reference and made a part of this Award Notice. A copy of the Plan is available on G&W's Intranet under Corporate Policies then Human Resources or from G&W's Human Resources Department upon request. You should review the terms of this Award Notice and the Plan carefully. The capitalized terms used in this Award Notice that are not defined herein have the meanings as defined in the Plan.

[2.Restrictions and Vesting. Subject to the terms set forth in this Award Notice and the Plan, provided you are still in the employment or service of G&W or any Subsidiary at that time, the Units represented by the Award will vest as follows: [Number, Number and Number] Units will vest on the first, second and third anniversaries of the Anniversary Date, respectively, and each Unit will upon such vesting entitle you to one share of G&W's Class A Common Stock, par value $.01 per share (the “Common Stock”), subject to the requirements of Section 3 of this Award Notice. In the event of your death, “Disability” or the termination of your employment or service to G&W or any Subsidiary prior to the complete vesting of the Award, the unvested portion of the Award shall be forfeited as of the date of your death, Disability or such termination. The term “Disability” means you are permanently and totally disabled within the meaning of Section 22(e)(3) of the Code.] [NOTE: this version of section 2 is only applicable for awards to non-directors]

[2.Restrictions and Vesting. Subject to the terms set forth in this Award Notice and the Plan, provided you are still in the service of G&W or any Subsidiary at that time, the Units represented by the Award will vest as follows: [Number, Number and Number [NOTE: as applicable]] Units will vest on the date of the next [Number] annual meetings of shareholders, respectively, and each Unit will upon such vesting entitle you to one share of G&W's Class A Common Stock, par value $.01 per share (the “Common Stock”), subject to the requirements of Section 3 of this Award Notice. In the event of your death or the termination of your service to G&W or any Subsidiary prior to the complete vesting of the Award, the unvested portion of the Award shall be forfeited as of the date of your death or such termination.] [NOTE: this version of section 2 is only applicable for awards to directors]

3.Issuance and Taxation of Shares.

(a)Issuance of Shares. Upon satisfaction of the vesting requirements detailed in Section 2, and upon further determining that compliance with this Award Notice has occurred, including compliance with such reasonable requirements as G&W may impose pursuant to the Plan or Section 9 of this Award Notice, and payment of any relevant taxes, G&W shall issue to you a certificate for the number of shares of Common Stock equal to the number of vested Units on the earliest practicable date (as determined by G&W) thereafter, or execute an electronic transfer if so requested. The shares of Common Stock may be issued during your lifetime only to you, or after your death to your designated beneficiary, or, in the absence of such beneficiary, to your duly qualified personal representative.

[(b)Tax Withholdings. The issuance of the Common Stock upon the vesting of Units is conditioned upon your making arrangements satisfactory to G&W for the payment to G&W, or its designated agent, of the amount of all taxes required by any governmental authority to be withheld and paid over by G&W to the governmental authority on account of the vesting. The payment of such withholding taxes to G&W, or its designated agent, may be made by one or any combination of the following methods: (i) in cash or by check, (ii) by G&W withholding such taxes from any other compensation owed to you by G&W or any Subsidiary, (iii) an irrevocable election by you to surrender to G&W, or its designated agent, a number of shares of Common Stock underlying the Award and otherwise deliverable to you sufficient to satisfy the withholding tax obligation, or (iv) any other method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform).] [NOTE: this version of 3(b) is applicable in U.S. only]

[(b)Responsibility for Taxes. Regardless of any action G&W, its designated agent, or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that G&W and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant or vesting of the Units, or issuance of the shares of Common Stock equal to the number of vested Units underlying the Award, or the subsequent sale of shares of Common Stock acquired pursuant to such issuance and the receipt of any dividends on shares of Common Stock acquired pursuant to such issuance; and (ii) do not commit, other than in accordance with the Plan, to structure the terms of the award or any aspect of the Award to reduce or eliminate your liability for Tax-Related Items.

Prior to issuance of shares of Common Stock upon the vesting of Units, you shall pay cash or make adequate arrangements satisfactory to G&W and/or the Employer to satisfy all withholding and payment on account of obligations of G&W and/or the Employer. In this regard, you authorize G&W and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by G&W and/or the Employer. Alternatively, or in addition, if permissible under local law, G&W, or its designated agent, may withhold in shares of Common Stock from the issuance of the Common Stock upon the vesting of Units, provided that G&W, or its designated agent, only withholds the amount of shares of Common Stock necessary to satisfy the minimum withholding amount. Finally, you shall pay to G&W, its designated agent, or the Employer any amount of Tax-Related Items that G&W or the Employer may be required to withhold as a result of your participation in the Plan or receipt of shares of Common Stock that cannot be satisfied by the means previously described. G&W, or its designated agent, may refuse to honor the issuance and refuse to deliver the shares of Common Stock if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

The payment of such withholding taxes to G&W, or its designated agent, may also be made pursuant

2

to any method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform).] [NOTE: this version of 3(b) is applicable in Canada, Australia and Netherlands only]

[4.Effect of Breach of Certain Covenants.

(a)In General. If you engage in the conduct described in subsection (c) of this Section 4, then, unless the Committee determines otherwise: (i) you immediately forfeit, effective as of the date you engage in such conduct, the unvested portion of the Award; and (ii) you must return to G&W the shares of Common Stock that were issued to you (upon the vesting of Units) within the six-month period immediately preceding the date you engage in such conduct or, at the option of G&W, pay to G&W the Fair Market Value, as of the date you engage in such conduct, of such shares of Common Stock issued to you within such six-month period.

(b)Set-Off. By accepting the Award, you consent to a deduction from any amounts G&W or any Subsidiary owes you from time to time (including, but not limited to, amounts owed to you as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amount that you owe G&W under subsection (a) of this Section 4. G&W may elect to make any set-off in whole or in part. If G&W does not recover by means of a set-off the full amount that you owe G&W, you shall immediately pay the unpaid balance to G&W.

(c)Conduct. You hereby agree that you will not, without the written consent of G&W, either during your employment by or service to G&W or any Subsidiary or thereafter, disclose to anyone or make use of any confidential information which you acquired during your employment or service relating to any of the business of G&W or any Subsidiary, except as such disclosure or use may be required in connection with your work as an employee or consultant of G&W or any Subsidiary. During your employment by or service to G&W or any Subsidiary, and for a period of six months after the termination of such employment or service, you will not, either as principal, agent, consultant, employee, stockholder or otherwise, engage in any work or other activity in direct competition with G&W or any Subsidiary. (For purposes of this Section 4, you shall not be deemed a stockholder of any company subject to the periodic and other reporting requirements of the Exchange Act, if your record and beneficial ownership of any such company amount to not more than five percent of the outstanding capital stock of any such company.) The non-competition covenant of this Section 4 applies separately in the United States and in other countries. Your breach of the covenant of this subsection (c) shall result in the consequences described in this Section 4.] [NOTE: not applicable in director restricted stock unit award; insert “4. RESERVED” if not applicable][NOTE: this section 4 is only applicable to some Grantees, including Executive Officers; insert “4. RESERVED” if not applicable]

[5.Effect of Change in Control.

(a)Upon the occurrence of a “Change in Control” of G&W, the unvested portion of the Award shall immediately vest as of the date of the occurrence of such event.

(b)The term “Change in Control” shall be deemed to have occurred when:

(i)Any “person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding G&W and any Subsidiary and any employee benefit plan sponsored or maintained by G&W or any Subsidiary (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial

3

owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of G&W representing 35% or more of the combined voting power of G&W's then outstanding securities (other than indirectly as a result of G&W's redemption of its securities); provided, however, that in no event shall a Change in Control be deemed to have occurred under this Section 5(b)(i) so long as (x) the combined voting power of shares beneficially owned by (A) G&W's executive officers (as defined in Rule 16a-1(f) under the Exchange Act) then in office (the “Executive Officer Shares”), (B) Mortimer B. Fuller and/or Sue Fuller and their lineal descendents (the “Founder Shares”), and (C) the shares beneficially owned by any other members of a “group” that includes the Founder Shares and/or a majority of the Executive Officer shares, exceeds 35% of the combined voting power of G&W's current outstanding securities and remains the person or group with beneficial ownership of the largest percentage of combined voting power of G&W's outstanding securities and (y) G&W remains subject to the reporting requirements of the Exchange Act; or

(ii)The consummation of any merger or other business combination of G&W, a sale of 51% or more of G&W's assets, liquidation or dissolution of G&W or a combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the shareholders of G&W and any trustee or fiduciary of any G&W employee benefit plan immediately prior to the Transaction own at least 51% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser of or successor to G&W's assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D), as applicable, the “Surviving Entity”) or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or

(iii)Within any twelve-month period, the persons who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to G&W, including any Surviving Entity. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two‑thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).] [NOTE: this section 5 is only applicable to some Grantees, including Executive Officers and directors; insert “5. RESERVED” if not applicable]

6.Nonassignability. The Units underlying the Award and, prior to their issuance, the shares of Common Stock that may be issued upon the vesting of Units may not, except as otherwise provided in the Plan, be sold, alienated, assigned, transferred, pledged or encumbered in any way prior to the vesting of such

4

Units, whether by operation of law or otherwise. After vesting of the Units, the sale or other transfer of the issued shares of Common Stock shall be subject to applicable laws and regulations under the Exchange Act and the Securities Act of 1933, as applicable.

7.Rights as a Stockholder. Until the Units have vested and the underlying shares of Common Stock have been delivered to you, you will have no rights as a stockholder with respect to the shares of Common Stock to be issued upon the vesting of the Units underlying the Award, including, but not limited to, the right to receive such cash dividends, if any, as may be declared on such shares from time to time or the right to vote (in person or by proxy) such shares at any meeting of stockholders of G&W.

8.Rights of G&W and Subsidiaries. This Award Notice does not affect the right of G&W or any Subsidiary to take any corporate action whatsoever, including without limitation its right to recapitalize, reorganize or make other changes in its capital structure or business, merge or consolidate, issue bonds, notes, shares of Common Stock or other securities, including preferred stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or business.

9.Restrictions on Issuance of Shares. If at any time G&W determines that the listing, registration or qualification of the shares of Common Stock issuable upon the vesting of the Units upon any securities exchange or under any federal, state or local law, or the approval of any governmental agency, is necessary or advisable as a condition to the issuance of a certificate representing any shares of Common Stock to be issued upon the vesting of Units under this Award Notice, such issuance may not be made in whole or in part unless and until such listing, registration, qualification or approval shall have been effected or obtained free of any conditions not acceptable to G&W.

10.Plan Controls. The Award is subject to all of the provisions of the Plan, which is hereby incorporated by reference, and is further subject to all the interpretations, amendments, rules and regulations that may from time to time be promulgated and adopted by the Committee pursuant to the Plan. In the event of any conflict among the provisions of the Plan and this Award Notice, the provisions of the Plan will be controlling and determinative.

11.Amendment. Except as otherwise provided by the Plan, G&W may only alter, amend or terminate the Award with your consent.

12.Governing Law. This Award and Award Notice shall be governed by and construed in accordance with the laws of the State of New York, except as superseded by applicable federal law, without giving effect to its conflicts of law provisions.

13. Language. If you have received this Award Notice or any other document related to the Plan in a language other than English and if the translated version bears a meaning that is different from that of the English version, the English version will control, to the extent permitted by law.

14.Notices. All notices and other communications to G&W, or its designated agent, required or permitted under this Award Notice shall be written, and shall be either delivered personally or sent by registered or certified first-class mail, postage prepaid and return receipt requested, by facsimile, or electronically. If such notice or other communication is to G&W then it should be addressed to G&W's office at 200 Meridian Centre, Suite 300, Rochester, New York 14618, Attention: Equity Plan Administrator; Telephone: (585) 328-8601; Facsimile: (585) 328-8622; Email: EquityPlanAdmin@gwrr.com. If such notice or other communication is to G&W's designated agent, then it should be addressed and sent in accordance with established procedures. Each such notice and other communication delivered personally shall be deemed to have been given when received. Each such notice and other communication delivered by United States

5

mail shall be deemed to have been given when it is received, and each such notice and other communication delivered by facsimile or electronically shall be deemed to have been given when it is so transmitted and the appropriate answerback is received.

15.Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Employer, and G&W and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan, to the extent permitted by law.

You understand that G&W and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in G&W, details of all restricted stock unit awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”).  You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient's country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative.  You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon issuance of the Common Stock following the vesting of Units, to the extent permitted by law.  You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

16.Electronic Delivery. G&W may, in its sole discretion, decide to deliver any documents related to the Award granted under the Plan (or related to future restricted stock unit awards that may be granted under the Plan) by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, hereby agree to participate in the Plan through an on-line or electronic system established and maintained by G&W or another third party designated by G&W.

17.Severability. The provisions of this Award Notice are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

6

ACKNOWLEDGEMENT

The undersigned acknowledges receipt of, and understands and agrees to be bound by, this Award Notice and the Plan. The undersigned further acknowledges that this Award Notice and the Plan set forth the entire understanding between him or her and G&W regarding the restricted stock unit award granted by this Award Notice and that this Award Notice and the Plan supersede all prior oral and written agreements on that subject.

Dated: _____________________

_______________________________

[Name]

Genesee & Wyoming Inc. By:

_______________________________

Matthew C. Brush

Chief Human Resource Officer

7

[NOTE: only applicable in the Netherlands]

ADDENDUM TO RESTRICTED STOCK UNIT AWARD NOTICE

THE PARTIES

(1) GENESEE & WYOMING INC, a company incorporated under the laws of the State of Delaware, the United States, duly represented by Matthew C. Brush, hereafter referred to as G&W

And

(2) [Name], residing at [Address], hereafter referred to as the Beneficiary

The parties referred to under (1) and (2) above are hereafter together referred to as the Parties.

WHEREAS

(A) The Beneficiary is [Title] of [Company Name] (the “Employer”) and Beneficiary has entered into an employment contract with the Employer on [Date];

(B) G&W has acquired the entire share capital of the Employer on [Date];

(C) G&W and the Beneficiary have agreed on a restricted stock unit award as described in the letter dated [Date];

(D) In connection with the letter referred to under (C) above, the Parties enter into an Award Notice (the "Award Notice"); and

(E) For the purpose of compliance of the Award Notice with the provisions of Dutch law (if applicable), the terms and conditions of this Addendum shall apply in deviation of, or in addition to certain terms and conditions of the Award Notice.

HAVE AGREED ON THE FOLLOWING

1. DEFINITIONS

Except as provided otherwise in this Addendum, the definitions of the Award Notice shall apply to this Addendum.

2. DISABILITY

Regarding satisfaction of vesting requirements and issuance of share certificates, Clause 2 of the Award Notice shall, in addition to the meaning provided in that Clause, also apply in the circumstance that the Beneficiary is permanently ill and that, as a result thereof, the employment contract between the Beneficiary and the Employer is terminated, in compliance with Dutch law.

3. [NON COMPETITION

Clause 4(c) of the Award Notice provides for a non-competition covenant to which the Beneficiary shall be bound for a period of six months following the termination of the Beneficiary's employment contract with the Employer. In deviation of Clause 4(c) of the Award Notice, the non-competition covenant is limited solely to the territory of Europe.] [NOTE: this section 3 is only applicable to some Grantees; insert “3. RESERVED” if not applicable]

8

4. DATA PRIVACY

4.1    In deviation of Clause 15 of the Award Notice, the following shall apply. The Parties acknowledge that all personal data which are necessary for the performance of the contract provided in the Award Notice shall be collected, used and/or transferred to G&W. The personal data shall be processed for the exclusive purpose of implementing, administering and managing the Beneficiary's participation in the Plan. Furthermore, Parties acknowledge that the Employer shall be the controller in the meaning of the Dutch Data Protection Act. To the extent necessary, the Beneficiary explicitly agrees with the processing of his personal data as referred to in this Clause 4 of the Addendum, and specifically with the transfer of the Beneficiary's personal data to G&W in the United States.

4.2    The personal data to be processed shall include: the Beneficiary's name, home address, e-mail address, salary, job title, any shares of stock or directorships held in G&W, details of all restricted stock unit awards or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in favour of the Beneficiary, necessary for the performance of the Award Notice. Upon the issuance of the shares of Common Stock following the vesting of Units, additional information may be required regarding bank or brokerage account(s) held by the Beneficiary. In case of death of the Beneficiary, the personal data mentioned in this Clause 4.2 shall also be required from the Beneficiary's inheritors.

5. AWARD NOTICE

Unless described otherwise in this Addendum, the terms and conditions of the Award Notice shall be fully valid and binding between the Parties.

6. GOVERNING LAW

6.1    This Addendum shall be governed by the laws of the Netherlands.

6.2    The competent court of Rotterdam has exclusive jurisdiction to settle any dispute arising out of or in connection with this Addendum.

SIGNATORIES

Thus agreed upon and executed in duplicate in ________________________ on ________________.

______________________________________

[Name]

Genesee & Wyoming Inc. By:

_______________________________

Matthew C. Brush

Chief Human Resource Officer

9

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

I, John C. Hellmann, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, of Genesee & Wyoming Inc. (the registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 5, 2011	/s/ JOHN C. HELLMANN
		John C. Hellmann,
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer

I, Timothy J. Gallagher, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, of Genesee & Wyoming Inc. (the registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 5, 2011	/s/ TIMOTHY J. GALLAGHER
		Timothy J. Gallagher,
		Chief Financial Officer

EX-32.1

Exhibit 32.1

Section 1350 Certification

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), John C. Hellmann and Timothy J. Gallagher, President and Chief Executive Officer and Chief Financial Officer, respectively, of Genesee & Wyoming Inc., certify that (i) the Quarterly Report on Form 10-Q for the three months ended June 30, 2011, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Genesee & Wyoming Inc.

/s/ JOHN C. HELLMANN

John C. Hellmann

President and Chief Executive Officer

Date: August 5, 2011

/s/ TIMOTHY J. GALLAGHER

Timothy J. Gallagher

Chief Financial Officer

Date: August 5, 2011

XML



Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Class A
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	180,000,000	90,000,000
Common stock, shares issued	52,526,102	51,861,249
Common stock, shares outstanding	40,066,867	39,426,351
Treasury stock, shares	12,459,235	12,434,898
Class B
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	15,000,000
Common stock, shares issued	2,206,343	2,409,027
Common stock, shares outstanding	2,206,343	2,409,027

XML



Consolidated Statements of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
OPERATING REVENUES	$ 209,589	$ 158,453	$ 401,500	$ 304,032
OPERATING EXPENSES:
Labor and benefits	58,966	51,329	117,048	101,517
Equipment rents	11,011	8,266	21,578	15,915
Purchased services	19,942	12,895	37,384	23,292
Depreciation and amortization	16,297	12,452	32,158	24,900
Diesel fuel used in operations	22,629	10,605	44,027	21,642
Diesel fuel sold to third parties	4,500	3,910	8,579	7,703
Casualties and insurance	6,228	3,123	11,666	7,027
Materials	6,090	6,004	12,673	11,481
Net gain on sale of assets	(1,088)	(1,399)	(2,098)	(1,848)
Gain on insurance recoveries	(1,018)	0	(1,043)	0
Other operating expenses	14,867	13,395	29,160	24,424
Total operating expenses	158,424	120,580	311,132	236,053
INCOME FROM OPERATIONS	51,165	37,873	90,368	67,979
Interest income	858	471	1,633	894
Interest expense	(10,253)	(5,411)	(20,192)	(10,773)
Gain on sale of investments	625	0	894	0
Other income/(expense), net	170	(175)	469	275
Income from continuing operations before income taxes	42,565	32,758	73,172	58,375
Provision for income taxes	11,420	12,067	19,905	21,708
Income from continuing operations, net of tax	31,145	20,691	53,267	36,667
Loss from discontinued operations, net of tax	0	(56)	0	(72)
Net income	$ 31,145	$ 20,635	$ 53,267	$ 36,595
Basic earnings per share:
Basic earnings per common share from continuing operations	$ 0.78	$ 0.53	$ 1.34	$ 0.95
Basic loss per common share from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Basic earnings per common share	$ 0.78	$ 0.53	$ 1.34	$ 0.95
Weighted average shares - basic	39,903	38,831	39,695	38,711
Diluted earnings per share:
Diluted earnings per common share from continuing operations	$ 0.73	$ 0.50	$ 1.25	$ 0.88
Diluted loss per common share from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Diluted earnings per common share	$ 0.73	$ 0.49	$ 1.25	$ 0.88
Weighted average shares - diluted	42,757	41,723	42,654	41,595

XML



Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following table summarizes the fair value of derivative instruments recorded in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Liability Derivatives:
Derivatives designated as hedges:
Interest rate swap agreement	Accrued expenses	$	4,271	Accrued expenses	$	4,202
Interest rate swap agreement	Other long-term liabilities	4,151		Other long-term liabilities	4,917
Total derivatives designated as hedges		$	8,422		$	9,119
Derivatives not designated as hedges:
Cross-currency swap agreement	Accrued expenses	$	5,778	Accrued expenses	$	5,541
Cross-currency swap agreement	Other long-term liabilities	7,077		Other long-term liabilities	2,091
Total derivatives not designated as hedges		$	12,855		$	7,632

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]

The following table shows the effect of the Company’s derivative instrument designated as a cash flow hedge for the three and six months ended June 30, 2011 and 2010 in other comprehensive income/(loss) (OCI) (dollars in thousands):

	Total Cash Flow Hedge OCI Activity, Net of Tax
	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011		2010
Derivatives Designated as Cash Flow Hedges:
Effective portion of changes in fair value recognized in OCI:
Interest rate swap agreement	$	(246	)	$	(1,219	)	$	444	$	(1,978	)

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

The following table shows the effect of the Company’s derivative instruments not designated as hedges for the three and six months ended June 30, 2011 in the consolidated statement of operations (dollars in thousands):

		Amount Recognized in Earnings
	Location of Amount Recognized in Earnings	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Derivative Instruments Not Designated as Hedges:
Cross-currency swap agreement	Interest (expense)/income	$	(1,524	)	$	(2,960	)
Cross-currency swap agreement	Other income/(expense), net	97			119
		$	(1,427	)	$	(2,841	)

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 29, 2011 Common Class A [Member]	Jul. 29, 2011 Preferred Class B [Member]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Registrant Name	GENESEE & WYOMING INC.
Entity Central Index Key	0001012620
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		40,068,216	2,206,343
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

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Segment Information (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2011

Jun. 30, 2011

Jun. 30, 2010

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following table sets forth our North American & European Operations and Australian Operations for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations		Total Operations
Revenues	$	139,335		$	70,254		$	209,589		$	127,004		$	31,449	$	158,453
Income from operations	33,737			17,428			51,165			31,153			6,720		37,873
Depreciation and amortization	11,565			4,732			16,297			10,908			1,544		12,452
Interest expense	(5,935		)	(4,318		)	(10,253		)	(5,411		)	—		(5,411		)
Interest income	791			67			858			56			415		471
Provision for income taxes	7,485			3,935			11,420			9,981			2,086		12,067
Expenditures for additions to property & equipment, net of grants from outside parties	14,742			27,412			42,154			5,181			1,204		6,385

The following table sets forth our North American & European Operations and Australian Operations for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations		Total Operations
Revenues	$	271,642		$	129,858		$	401,500		$	244,240		$	59,792	$	304,032
Income from operations	60,672			29,696			90,368			55,164			12,815		67,979
Depreciation and amortization	22,911			9,247			32,158			21,823			3,077		24,900
Interest expense	(11,891		)	(8,301		)	(20,192		)	(10,773		)	—		(10,773		)
Interest income	1,507			126			1,633			111			783		894
Provision for income taxes	13,557			6,348			19,905			17,692			4,016		21,708
Expenditures for additions to property & equipment, net of grants from outside parties	21,811			28,554			50,365			5,877			4,736		10,613

Property and Equipment by Segment [Table Text Block]

The following table sets forth the property and equipment recorded in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
	North American & European Operations	Australian Operations	Total Operations	North American & European Operations	Australian Operations	Total Operations
Property & equipment	$1,012,010	$491,378	$1,503,388	$1,000,350	$443,827	$1,444,177

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Subsequent Events Business Acquisition (Details) (AZER [Member], USD $) In Millions	Aug. 02, 2011
AZER [Member]
Business Acquisition [Line Items]
Business Acquisition, Contingent Consideration, Potential Cash Payment	$ 90.1

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of each class of financial instrument held by the Company:

• Long-term debt: Since the Company’s long-term debt is not quoted, fair value was estimated using a discounted cash flow analysis based on Level 2 valuation inputs, including borrowing rates the Company believes are currently available to it for loans with similar terms and maturities.

• Derivative instruments: Derivative instruments are recorded on the balance sheet as either assets or liabilities measured at fair value. As of June 30, 2011, the Company’s derivative financial instruments consisted of an interest rate swap agreement and a cross-currency swap agreement. The Company estimates the fair value of its interest rate swap agreement based on Level 2 valuation inputs, including fixed interest rates, LIBOR implied forward interest rates and the remaining time to maturity. The Company estimates the fair value of its cross-currency swap agreement based on Level 2 valuation inputs, including LIBOR implied forward interest rates, AUD BBSW implied forward interest rates and the remaining time to maturity.

The following table presents the Company's financial instruments that are carried at fair value as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011		December 31, 2010
Financial liabilities carried at fair value using Level 2 inputs:
Interest rate swap agreement	$	8,422	$	9,119
Cross-currency swap agreement	12,855		7,632
Total financial liabilities carried at fair value	$	21,277	$	16,751

The following table presents the carrying value and fair value using Level 2 inputs of the Company’s financial instruments carried at historical cost as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities carried at historical cost:
Series A senior notes	$	75,000	$	75,703	$	75,000	$	76,491
Series B senior notes	100,000		106,051		100,000		105,041
Series C senior notes	25,000		24,603		25,000		24,421
Revolving credit facility	152,213		152,372		153,600		152,974
United States term loan	180,000		178,376		192,000		189,972
Canadian term loan	24,259		23,951		24,989		24,651
Other debt	8,449		8,519		8,275		8,318
Total	$	564,921	$	569,575	$	578,864	$	581,868

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Changes in Operations (Details)	6 Months Ended	1 Months Ended			6 Months Ended	12 Months Ended				6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010 United States Revolving Loan [Member] FreightLink [Member] USD ($)	Dec. 31, 2010 Australia Revolving Loan [Member] FreightLink [Member] USD ($)	Dec. 31, 2010 Australia Revolving Loan [Member] FreightLink [Member] AUD	Jun. 30, 2011 FreightLink [Member]	Dec. 31, 2011 FreightLink [Member] USD ($)	Dec. 31, 2011 FreightLink [Member] AUD	Dec. 01, 2010 FreightLink [Member] USD ($)	Dec. 01, 2010 FreightLink [Member] AUD	Jun. 30, 2011 Australia
Business Acquisition, Cost of Acquired Entity, Purchase Price								$ 320,019,000	331,936,000
Long-term debt assumed								1,741,000	1,806,000
Non-interest bearing loan								48,200,000	50,000,000
Debt Instrument, Maturity Date	Jul. 29, 2016				Jan. 14, 2054
Concession Agreement Expiration Date					Jan. 14, 2054
Business acquisition revenue to be eliminated						26,800,000	25,000,000
Foreign Currency Exchange Rate, Translation								0.96	0.96
Purchase of FreightLink assets through borrowings		$ 100,000,000	$ 94,000,000	97,000,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate										30.00%

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Significant Non-Cash Investing Activities (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Significant Non Cash Investing Activities [Abstract]
Grant receivables from outside parties for capital expenditures	$ 17.3	$ 4.3
Purchases of property and equipment accrued in accounts payable	$ 15.4	$ 8.3

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Fair Value of Financial Instruments (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivative	$ 21,277	$ 16,751
Currency Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivative	12,855
Cross-currency swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivative		7,632
Interest rate swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivative	$ 8,422	$ 9,119

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2011

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Comprehensive Income (Loss) [Table Text Block]

Comprehensive income is the total of net income and all other non-owner changes in equity. The following tables set forth the Company’s comprehensive income for the three and six months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended
	June 30,
	2011			2010
Net income	$	31,145		$	20,635
Other comprehensive income:
Foreign currency translation adjustments	9,547			(14,535		)
Net unrealized loss on qualifying cash flow hedges, net of tax benefits of $140 and $693, respectively	(246		)	(1,219		)
Changes in pension and other postretirement benefits, net of tax provisions of $26 and $20, respectively	46			35
Comprehensive income	$	40,492		$	4,916
	Six Months Ended
	June 30,
	2011			2010
Net income	$	53,267		$	36,595
Other comprehensive income:
Foreign currency translation adjustments	16,223			(12,193		)
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($253) and $1,125, respectively	444			(1,978		)
Changes in pension and other postretirement benefits, net of tax benefit/(provision) of $71 and ($156), respectively	(125		)	274
Comprehensive income	$	69,809		$	22,698

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table sets forth accumulated other comprehensive income included in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	Foreign Currency Translation Adjustment		Defined Benefit Plans			Net Unrealized Losses on Cash Flow Hedges			Accumulated Other Comprehensive Income
Balance, December 31, 2010	$	45,905	$	22		$	(5,813	)	$	40,114
Current period change	16,223		(125		)	444			16,542
Balance, June 30, 2011	$	62,128	$	(103	)	$	(5,369	)	$	56,656

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Segment Information

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION:

The Company's various railroad lines are divided into nine operating regions. Since each region has similar characteristics, they previously had been aggregated into one reportable segment. Beginning January 1, 2011, the Company has decided to present its financial information as two reportable segments, North American & European Operations and Australian Operations.

The results of operations of the foreign entities are maintained in the respective local currency (the Australian dollar, the Canadian dollar and the Euro) and then translated into United States dollars at the applicable exchange rates for inclusion in the consolidated financial statements. As a result, any appreciation or depreciation of these currencies against the United States dollar will impact our results of operations.

The following table sets forth our North American & European Operations and Australian Operations for the three months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations		Total Operations
Revenues	$	139,335		$	70,254		$	209,589		$	127,004		$	31,449	$	158,453
Income from operations	33,737			17,428			51,165			31,153			6,720		37,873
Depreciation and amortization	11,565			4,732			16,297			10,908			1,544		12,452
Interest expense	(5,935		)	(4,318		)	(10,253		)	(5,411		)	—		(5,411		)
Interest income	791			67			858			56			415		471
Provision for income taxes	7,485			3,935			11,420			9,981			2,086		12,067
Expenditures for additions to property & equipment, net of grants from outside parties	14,742			27,412			42,154			5,181			1,204		6,385

The following table sets forth our North American & European Operations and Australian Operations for the six months ended June 30, 2011 and 2010 (dollars in thousands):

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
	North American & European Operations			Australian Operations			Total Operations			North American & European Operations			Australian Operations		Total Operations
Revenues	$	271,642		$	129,858		$	401,500		$	244,240		$	59,792	$	304,032
Income from operations	60,672			29,696			90,368			55,164			12,815		67,979
Depreciation and amortization	22,911			9,247			32,158			21,823			3,077		24,900
Interest expense	(11,891		)	(8,301		)	(20,192		)	(10,773		)	—		(10,773		)
Interest income	1,507			126			1,633			111			783		894
Provision for income taxes	13,557			6,348			19,905			17,692			4,016		21,708
Expenditures for additions to property & equipment, net of grants from outside parties	21,811			28,554			50,365			5,877			4,736		10,613

The following table sets forth the property and equipment recorded in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
	North American & European Operations	Australian Operations	Total Operations	North American & European Operations	Australian Operations	Total Operations
Property & equipment	$1,012,010	$491,378	$1,503,388	$1,000,350	$443,827	$1,444,177

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Changes in Operations

6 Months Ended

Jun. 30, 2011

Changes in Operations [Abstract]

Changes in Operations

CHANGES IN OPERATIONS:

Australia

On December 1, 2010, the Company completed the acquisition of the assets of FreightLink Pty Ltd, Asia Pacific Transport Pty Ltd and related corporate entities (together, FreightLink) for A$331.9 million (or $320.0 million at the exchange rate on December 1, 2010) (FreightLink Acquisition). The Company has included the results from GWA (North) Pty Ltd (GWA North), the Company’s subsidiary that acquired certain assets of FreightLink, in its statement of operations since December 1, 2010. Pursuant to the Business Sale Agreement, the Company acquired FreightLink’s freight rail business between Tarcoola in South Australia and Darwin in the Northern Territory of Australia, certain material contracts, equipment and property leases, as well as FreightLink’s plant, equipment and business inventory. In addition, as part of the acquisition, GWA North assumed debt with a carrying value of A$1.8 million (or $1.7 million at the exchange rate on December 1, 2010), which represents the fair value of an A$50.0 million (or $48.2 million at the exchange rate on December 1, 2010) non-interest bearing loan due in 2054.

As a result of the acquisition, GWA North is now the concessionaire and operator of the Tarcoola to Darwin rail line, which links the Port of Darwin to the Australian interstate rail network in South Australia. The rail line is located on land leased to GWA North by the AustralAsia Railway Corporation (a statutory corporation established by legislation in the Northern Territory) under a concession agreement that expires in 2054. GWA North is both a provider of rail haulage to customers on its railroad (above rail services), as well as a track owner, charging access fees to any rail operators that run on its track (below rail services). The track access rights are regulated under a statutory access regime established by legislation in the Northern Territory and South Australia. The Company’s subsidiary, Genesee & Wyoming Australia Pty Ltd (GWA), historically operated FreightLink’s rail haulage services, provided its crews, managed its train operations and leased locomotives and wagons to FreightLink. As a result of the acquisition, approximately A$25 million (or $27 million at the June 30, 2011 exchange rate) of annual GWA non-freight revenues generated from services provided to FreightLink will be eliminated in consolidation in the post-acquisition period. This elimination will not have any effect on operating income of the Company.

The Company accounted for the transaction using the acquisition method of accounting under U.S. GAAP. Under the acquisition method of accounting, the assets and liabilities of FreightLink have been recorded at their respective estimated acquisition-date fair values and have been consolidated with those of the Company as of the acquisition date. The foreign exchange rate

used to translate the preliminary balance sheet to United States dollars was $0.96 for one Australian dollar (the exchange rate on December 1, 2010).

The preliminary acquisition-date fair values assigned to the acquired net assets were as follows (dollars in thousands):

	Australian Dollars		United States Dollars
Accounts receivable	$	161	$	155
Materials and supplies	3,328		3,209
Prepaid expenses and other	101		97
Deferred income tax assets	171		165
Property and equipment	330,712		318,843
Total assets	$	334,473	$	322,469
Accrued expenses	$	731	$	705
Long-term debt	1,806		1,741
Net assets	$	331,936	$	320,023

The Company financed the purchase of FreightLink’s assets through a combination of cash on hand and borrowing $100.0 million and A$97.0 million (or $94.0 million at the December 1, 2010 exchange rate) under its credit agreement, as amended.

Canada

Huron Central Railway Inc.: In June 2009, the Company announced that its subsidiary, Huron Central Railway Inc. (HCRY), intended to cease its operations in the third quarter of 2009. Consequently, in the second quarter of 2009, the Company recorded charges of $5.4 million after-tax associated with HCRY. These charges reflected a non-cash write-down of non-current assets of $6.7 million and restructuring charges of $2.3 million and were partially offset by a tax benefit of $3.6 million. In September 2010, the governments of Canada and the Province of Ontario agreed to provide C$30 million (or $31 million at the June 30, 2011 exchange rate) to fund infrastructure improvements that, combined with certain customer agreements, will enable HCRY to continue operations on a long-term basis. In addition, HCRY has committed to fund approximately C$3 million (or $3 million at the June 30, 2011 exchange rate) of infrastructure improvements. As a result, the Company reversed $2.3 million ($1.5 million after-tax) of accrued restructuring charges related to HCRY in September 2010, as HCRY no longer intends to cease its operations. Because of the substance of the temporary agreement HCRY was operating under from August 15, 2009, through December 31, 2010, HCRY’s net operating earnings were included within non-freight revenues as other operating income. On January 1, 2011, HCRY began operating under a new agreement with certain customers. Because of the substance of the new arrangement, on January 1, 2011, the Company resumed reporting HCRY’s operating revenues, including freight revenues and corresponding carloads, and operating expenses on a gross basis within each respective line item of the statement of operations.

Discontinued Operations

In August 2009, the Company completed the sale of 100% of the share capital of its Mexican operating subsidiary, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM) to Viablis, S.A. de C.V. (Viablis). The net assets, results of operations and cash flows of the Company’s remaining Mexican subsidiary, GW Servicios S.A., which were classified as discontinued operations, were not material as of and for the three and six months ended June 30, 2011 and 2010. The Company does not expect any material future adverse financial impact from its remaining Mexican subsidiary.

Results from Continuing Operations

When comparing the Company’s results from continuing operations from one reporting period to another, consider that the Company has historically experienced fluctuations in revenues and expenses due to economic conditions, acquisitions, competitive forces, one-time freight moves, fuel price fluctuations, customer plant expansions and shut-downs, sales of property and equipment, derailments and weather-related conditions, such as hurricanes, cyclones, droughts, heavy snowfall, freezing and flooding. In periods when these events occur, results of operations are not easily comparable from one period to another. Finally, certain of the Company’s railroads have commodity shipments that are sensitive to general economic conditions, including steel products, paper products and lumber and forest products. However, shipments of other commodities are relatively less affected by economic conditions and are more closely affected by other factors, such as inventory levels maintained at customer plants, winter weather (salt) and seasonal rainfall (South Australian grain). As a result of these and other factors, the Company’s operating results in any reporting period may not be directly comparable to its operating results in other reporting periods.

Pro Forma Financial Results

The following table summarizes the Company’s unaudited pro forma operating results for the three and six months ended June 30, 2010, as if the FreightLink Acquisition had been consummated as of January 1, 2009. The following pro forma financial results do not include the impact of any potential operating efficiencies, savings from expected synergies, costs to integrate the operations or costs necessary to achieve savings from expected synergies or the impact of derivative instruments that the Company has entered into or may enter into to mitigate interest rate or currency exchange rate risk (dollars in thousands, except per share amounts):

	Three Months Ended		Six Months Ended
	June 30, 2010		June 30, 2010
Operating revenues	$	182,112	$	347,842
Net income	$	22,995	$	39,793
Earnings per common share:
Basic earnings per common share from continuing operations	$	0.59	$	1.03
Diluted earnings per common share from continuing operations	$	0.55	$	0.96

The unaudited pro forma operating results for the three and six months ended June 30, 2010, include the FreightLink Acquisition adjusted, net of tax, for depreciation and amortization expense resulting from the property and equipment assets based on the preliminary assignment of fair values, an adjustment to interest income for the reduction in available cash and cash equivalents due to the use of cash on hand to fund the acquisition, the inclusion of interest expense related to borrowings used to fund the acquisition, the amortization of debt issuance costs related to amendments to the Company’s credit agreement, the elimination of FreightLink’s deferred grant income for a liability not acquired and the elimination of FreightLink’s interest expense related to debt not assumed in the acquisition. In addition, the unaudited pro forma operating results include an additional tax provision to report FreightLink as a tax paying entity using the Australian statutory income tax rate of 30%.

The pro forma financial information does not purport to be indicative of the results that actually would have been obtained had the transactions been completed as of the assumed date and for the period presented and are not intended to be a projection of future results or trends.

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Derivative Financial Instruments (Details 2) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	$ 21,277	$ 16,751
Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	8,422	9,119
Designated as Hedging Instrument [Member] | Accrued expenses [Member] | Interest rate swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	4,271	4,202
Designated as Hedging Instrument [Member] | Other long-term liabilities [Member] | Interest rate swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	4,151	4,917
Cross-currency swap [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	5,778	5,541
Cross-currency swap [Member] | Not Designated as Hedging Instrument [Member] | Other long-term liabilities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	7,077	2,091
Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	$ 12,855	$ 7,632

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES:

From time to time, the Company is a defendant in certain lawsuits resulting from its operations. Management believes there are adequate provisions in the financial statements for any expected liabilities that may result from disposition of the pending lawsuits. Nevertheless, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. Though currently unexpected and not possible to reasonably estimate, were an unfavorable ruling to occur, there could be a material adverse impact on the Company’s operating results, financial condition and liquidity as of and for the period in which the ruling occurs.

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Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

Subsequent Events [Text Block]

SUBSEQUENT EVENTS:

Credit Agreement

On July 29, 2011, the Company entered into the Third Amended and Restated Revolving Credit and Term Loan Agreement (the Credit Agreement). The Credit Agreement expanded the size of the Company's senior credit facility from $620.0 million to $750.0 million and extended the maturity date to July 29, 2016. The Credit Agreement includes a $425.0 million revolving loan, a $200.0 million United States term loan, a A$92.2 million ($100.0 million at the July 29, 2011 exchange rate) Australian term loan and a C$23.6 million ($25.0 million at the July 29, 2011 exchange rate) Canadian term loan. The Credit Agreement allows for borrowings in United States dollars, Australian dollars, Canadian dollars and Euros. The Credit Agreement and revolving loans are guaranteed by substantially all of the United States subsidiaries for the United States guaranteed obligations and by substantially all of the Company's foreign subsidiaries for the foreign guaranteed obligations.

The Credit Agreement contains customary representations and warranties, events of default and covenants, including, among other things, covenants that restrict the ability of the Company to incur certain additional indebtedness, create or permit liens on assets and engage in mergers or consolidations. The Credit Agreement also contains financial covenants restricting the Company's funded debt to EBITDAR ratio and the Company's consolidated EBITDA to consolidated total interest expense ratio.

The proceeds of the senior credit facilities will be used for working capital, capital expenditures, investments permitted under the Credit Agreement, acquisitions permitted under the Credit Agreement, other lawful general corporate purposes and to refinance existing indebtedness.

Acquisition

On August 2, 2011, the Company announced that it signed an agreement to acquire all of the capital stock of Arizona Eastern Railway Company (AZER) for approximately $90.1 million in cash. The acquisition is expected to close during the third quarter of 2011. Headquartered near Miami, Arizona, with 45 employees and 10 locomotives, AZER is composed of two rail lines operating over 200 track miles in southeast Arizona and southwest New Mexico that are connected by 52 miles of trackage rights over the Union Pacific Railroad. The largest customer on AZER is Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer. In connection with the acquisition of AZER, each party will make an election under Section 338(h)10 of the Internal Revenue Code of 1986, as amended. The acquisition of AZER is expected to be immediately accretive to GWI's earnings per share. The acquisition will be subject to customary closing conditions and includes certain adjustments for closing date working capital and indebtedness of AZER.

AZER primarily provides rail service to Freeport-McMoRan's largest North American copper mine and its North American smelter, hauling copper concentrate, copper anode, copper rod and sulfuric acid. In conjunction with the transaction, AZER and Freeport-McMoRan have entered into a long term agreement. AZER also serves other local customers.

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Comprehensive Income

6 Months Ended

Jun. 30, 2011

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Comprehensive Income (Loss) Note [Text Block]

COMPREHENSIVE INCOME:

Comprehensive income is the total of net income and all other non-owner changes in equity. The following tables set forth the Company’s comprehensive income for the three and six months ended June 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended
	June 30,
	2011			2010
Net income	$	31,145		$	20,635
Other comprehensive income:
Foreign currency translation adjustments	9,547			(14,535		)
Net unrealized loss on qualifying cash flow hedges, net of tax benefits of $140 and $693, respectively	(246		)	(1,219		)
Changes in pension and other postretirement benefits, net of tax provisions of $26 and $20, respectively	46			35
Comprehensive income	$	40,492		$	4,916
	Six Months Ended
	June 30,
	2011			2010
Net income	$	53,267		$	36,595
Other comprehensive income:
Foreign currency translation adjustments	16,223			(12,193		)
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($253) and $1,125, respectively	444			(1,978		)
Changes in pension and other postretirement benefits, net of tax benefit/(provision) of $71 and ($156), respectively	(125		)	274
Comprehensive income	$	69,809		$	22,698

The following table sets forth accumulated other comprehensive income included in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	Foreign Currency Translation Adjustment		Defined Benefit Plans			Net Unrealized Losses on Cash Flow Hedges			Accumulated Other Comprehensive Income
Balance, December 31, 2010	$	45,905	$	22		$	(5,813	)	$	40,114
Current period change	16,223		(125		)	444			16,542
Balance, June 30, 2011	$	62,128	$	(103	)	$	(5,369	)	$	56,656

The change in the foreign currency translation adjustment for the six months ended June 30, 2011, related primarily to the Company’s operations with a functional currency in Australian and Canadian dollars.

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Earnings per Share (Details 2)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive-dilutive shares	98,129	634,883	78,441	677,410

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Income Taxes

6 Months Ended

Jun. 30, 2011

INCOME TAXES [Abstract]

Income Taxes

INCOME TAXES:

The Company’s effective income tax rate in the three months ended June 30, 2011, was 26.8% compared with 36.8% in the three months ended June 30, 2010. The Company's effective income tax rate in the six months ended June 30, 2011, was 27.2% compared with 37.2% in the six months ended June 30, 2010. The decrease in the effective tax rate for the three and six months ended June 30, 2011, was primarily attributable to the extension of the Short Line Tax Credit in the fourth quarter of 2010.

The Short Line Tax Credit, which had been in existence from 2005 through 2009, expired on December 31, 2009, but was retroactively extended for 2010 on December 17, 2010. Unless it is further extended, the credit expires on January 1, 2012. The income tax credit provides for Class II and Class III railroads to reduce their federal income tax based on 50% of qualified railroad track maintenance expenditures during each year, subject to a limitation of $3,500 per track mile owned or leased at the end of the year. Historically, the Company incurred sufficient spending to meet the limitation.

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Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 53,267	$ 36,595
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations	0	72
Depreciation and amortization	32,158	24,900
Compensation cost related to equity awards	3,839	3,694
Excess tax benefit from share-based compensation	(2,049)	(969)
Deferred income taxes	11,071	12,063
Net gain on sale of assets	(2,098)	(1,848)
Gain on sale of investments	(894)	0
Gain on insurance recoveries	(1,043)	0
Insurance proceeds received	24	0
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions:
Accounts receivable trade, net	(17,612)	(5,796)
Materials and supplies	(1,763)	(314)
Prepaid expenses and other	2,048	(1,989)
Accounts payable and accrued expenses	(24,174)	8,526
Other assets and liabilities, net	(813)	(1,155)
Net cash provided by operating activities from continuing operations	51,961	73,779
Net cash used in operating activities from discontinued operations	(5)	(87)
Net cash provided by operating activities	51,956	73,692
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(62,065)	(28,599)
Grant proceeds from outside parties	11,700	17,986
Cash paid for acquisition, net of cash acquired	(440)	0
Proceeds from sale of investments	1,369	208
Proceeds from disposition of property and equipment	3,106	3,293
Net cash used in investing activities from continuing operations	(46,330)	(7,112)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings, including capital leases	(115,764)	(13,637)
Proceeds from issuance of long-term debt	94,612	0
Debt amendment costs	0	1,641
Proceeds from employee stock purchases	12,631	5,219
Treasury stock purchases	(1,287)	(846)
Excess tax benefit from share-based compensation	2,049	969
Net cash used in financing activities from continuing operations	(7,759)	(9,936)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	653	(3,147)
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS	1	87
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(1,479)	53,584
CASH AND CASH EQUIVALENTS, beginning of period	27,417	105,707
CASH AND CASH EQUIVALENTS, end of period	$ 25,938	$ 159,291

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Earnings per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

EARNINGS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per share (EPS) for the three and six months ended June 30, 2011 and 2010 (in thousands, except per share amounts):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Numerators:
Income from continuing operations, net of tax	$	31,145	$	20,691		$	53,267	$	36,667
Loss from discontinued operations, net of tax	—		(56		)	—		(72		)
Net income	$	31,145	$	20,635		$	53,267	$	36,595
Denominators:
Weighted average Class A common shares outstanding - Basic	39,903		38,831			39,695		38,711
Weighted average Class B common shares outstanding	2,218		2,484			2,311		2,503
Dilutive effect of employee stock grants	636		408			648		381
Weighted average shares - Diluted	42,757		41,723			42,654		41,595
Basic:
Earnings per common share from continuing operations	$	0.78	$	0.53		$	1.34	$	0.95
Loss per common share from discontinued operations	—		—			—		—
Earnings per common share	$	0.78	$	0.53		$	1.34	$	0.95
Diluted:
Earnings per common share from continuing operations	$	0.73	$	0.50		$	1.25	$	0.88
Loss per common share from discontinued operations	—		—			—		—
Earnings per common share	$	0.73	$	0.49		$	1.25	$	0.88

The following total number of Class A common stock issuable under the assumed exercise of stock options computed based on the treasury stock method were excluded from the calculation of diluted earnings per common share, as the effect of including these shares would have been anti-dilutive:

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Income Taxes (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
INCOME TAXES [Abstract]
Effective income tax rate, continuing operations	26.80%	36.80%	27.20%	37.20%
Tax credits percentage of qualified maintenance expenditures to reduce federal income tax			50.00%
Tax credits limitation per mile on maintenance expenditures to reduce federal income tax			$ 3,500

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Earnings per Share (Details) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Income from continuing operations, net of tax	$ 31,145	$ 20,691	$ 53,267	$ 36,667
Loss from discontinued operations, net of tax	0	(56)	0	(72)
Net income	$ 31,145	$ 20,635	$ 53,267	$ 36,595
Weighted average common shares outstanding - Basic	39,903	38,831	39,695	38,711
Dilutive effect of employee stock grants	636	408	648	381
Weighted average shares - Diluted	42,757	41,723	42,654	41,595
Basic earnings per common share from continuing operations	$ 0.78	$ 0.53	$ 1.34	$ 0.95
Basic loss per common share from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Basic earnings per common share	$ 0.78	$ 0.53	$ 1.34	$ 0.95
Diluted earnings per common share from continuing operations	$ 0.73	$ 0.50	$ 1.25	$ 0.88
Diluted loss per common share from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Diluted earnings per common share	$ 0.73	$ 0.49	$ 1.25	$ 0.88
Class B common shares [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted average common shares outstanding - Basic	2,218	2,484	2,311	2,503

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Accounts Receivable

6 Months Ended

Jun. 30, 2011

Accounts Receivable, Net [Abstract]

Accounts Receivable

ACCOUNTS RECEIVABLE:

Accounts receivable consisted of the following as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
Accounts receivable - trade	$	139,033		$	118,265
Accounts receivable - grants	17,277			17,039
Total accounts receivable	156,310			135,304
Less: Allowance for doubtful accounts	(2,979		)	(3,079		)
Accounts receivable, net	$	153,331		$	132,225

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Comprehensive Income (Details 2) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Accumulated Other Comprehensive Income [Roll Forward]
Foreign Currency Translation Adjustment, Beginning Balance			$ 45,905
Foreign Currency Translation Adjustment, Current Period Change	9,547	(14,535)	16,223	(12,193)
Foreign Currency Translation Adjustment, Ending Balance	62,128		62,128
Defined Benefit Plans, Beginning Balance			22
Defined Benefit Plans, Current Period Change	46	35	(125)	274
Defined Benefit Plans, Ending Balance	(103)		(103)
Net Unrealized Losses on Cash Flow Hedges, Beginning Balance			(5,813)
Net Unrealized Losses on Cash Flow Hedges, Current Period Change	(246)	(1,219)	444	(1,978)
Net Unrealized Losses on Cash Flow Hedges, Ending Balance	(5,369)		(5,369)
Accumulated Other Comprehensive Income, Beginning Balance			40,114
Accumulated Other Comprehensive Income, Current Period Change			16,542
Accumulated Other Comprehensive Income, Ending Balance	$ 56,656		$ 56,656

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Changes in Operations (Details 2) (FreightLink [Member]) In Thousands	Dec. 01, 2010 USD ($)	Dec. 01, 2010 AUD
Business Acquisition [Line Items]
Accounts receivable, net	$ 155	161
Materials and supplies	3,209	3,328
Prepaid expense and other	97	101
Deferred income tax assets	165	171
Property and equipment	318,843	330,712
Total assets	322,469	334,473
Accrued expenses	705	731
Long-term debt	1,741	1,806
Net assets	$ 320,023	331,936

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Accounts Receivable (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 156,310	$ 135,304
Less: Allowance for doubtful accounts	(2,979)	(3,079)
Accounts receivable, net	153,331	132,225
Accounts receivable - trade
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	139,033	118,265
Accounts receivable - grants
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 17,277	$ 17,039

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Comprehensive Income (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net income	$ 31,145	$ 20,635	$ 53,267	$ 36,595
Foreign currency translation adjustments	9,547	(14,535)	16,223	(12,193)
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax	(246)	(1,219)	444	(1,978)
Changes in pension and other postretirement benefits, net of tax	46	35	(125)	274
Comprehensive income	$ 40,492	$ 4,916	$ 69,809	$ 22,698

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Changes in Operations (Details 4) (USD $) In Thousands, except Per Share data	3 Months Ended	6 Months Ended
	Jun. 30, 2010	Jun. 30, 2010
Business Combination Pro Forma Information [Line Items]
Operating revenues	$ 182,112	$ 347,842
Net income	$ 22,995	$ 39,793
Basic earnings per common share from continuing operations	$ 0.59	$ 1.03
Diluted earnings per common share from continuing operations	$ 0.55	$ 0.96

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Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2011

RECENTLY ISSUED ACCOUNTING STANDARDS: [Abstract]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

RECENTLY ISSUED ACCOUNTING STANDARDS:

Accounting Standards Not Yet Effective

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which provides clarification about the application of existing fair value measurement and disclosure requirements, and expands certain other disclosure requirements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2011, and is to be applied prospectively. Early adoption is not permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which requires entities to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. This guidance does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This requirement will become effective for the Company beginning with the first quarter of 2012 Form 10-Q filing and will require retrospective application for all periods presented.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS:

The Company actively monitors its exposure to interest rate and foreign currency exchange rate risks and uses derivative financial instruments to manage the impact of certain of these risks. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate or exchange rate fluctuations alone, nor does the Company use derivative instruments where it does not have underlying exposures. Complex instruments involving leverage or multipliers are not used. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. Management believes its use of derivative instruments to manage risk is in the Company’s best interest. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in prepaid expenses and other assets, net, accrued expenses or other long-term liabilities.

The Company may designate derivatives as a hedge of a forecasted transaction or a hedge of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). The portion of the changes in the fair value of the derivative used as a cash flow hedge that is offset by changes in the expected cash flows related to a recognized asset or liability (the effective portion) is recorded in other comprehensive income/(loss). As the hedged item is realized, the gain or loss included in accumulated other comprehensive income is reported in the consolidated statements of operations on the same line item as the hedged item. The portion of the changes in the fair value of derivatives used as cash flow hedges that is not offset by changes in the expected cash flows related to a recognized asset or liability (the ineffective portion) is immediately recognized in earnings on the same line item as the hedged item.

The Company matches the hedge instrument to the underlying hedged item (assets, liabilities, firm commitments or forecasted transactions). At hedge inception and at least quarterly thereafter, the Company assesses whether the derivatives used to hedge transactions are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. When it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting, and any gains or losses on the derivative instrument thereafter are recognized in earnings during the periods it no longer qualifies as a hedge.

From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes. For example, to mitigate currency exposures related to intercompany debt, cross-currency swap contracts may be entered into for periods consistent with the underlying debt. The Company believes such instruments are closely correlated with the underlying exposure, thus reducing the associated risk. The gains or losses from the changes in the fair value of derivative instruments not accounted for as hedges are recognized in current period earnings within other income/(expense).

Interest Rate Risk Management

The Company uses interest rate swap agreements to manage its exposure to changes in interest rates of the Company’s variable rate debt. These swap agreements are recorded in the consolidated balance sheets at fair value. Changes in the fair value of the swap agreements are recorded in net income or other comprehensive income/(loss) based on whether the agreements are designated as part of a hedge transaction and whether the agreements are effective in offsetting the change in the value of the future interest payments attributable to the underlying portion of the Company’s variable rate debt. Interest payments accrued each reporting period for these interest rate swaps are recognized in interest expense.

The Company formally documents its hedge relationships, including identifying the hedge instruments and hedged items, as well as its risk management objectives and strategies for entering into the hedge transaction. On October 2, 2008, the Company entered into an interest rate swap agreement to manage its exposure to interest rates on a portion of its outstanding borrowings. The swap has a notional amount of $120.0 million and requires the Company to pay a fixed rate of 3.88% on the notional amount. In return, the Company receives one-month LIBOR on the notional amount of the swap, which is equivalent to the Company’s variable rate portion of its interest obligation on the notional amount under its credit agreement. This swap expires on September 30, 2013. The fair value of the interest rate swap agreement was estimated based on Level 2 inputs. The Company’s effectiveness testing as of June 30, 2011, resulted in no amount of gain or loss reclassified from accumulated other comprehensive income into earnings.

Foreign Currency Exchange Rate Risk

As of June 30, 2011, $160.5 million of third-party debt, related to the Company’s foreign operations, is denominated in the currencies in which its subsidiaries operate, including the Australian dollar, Canadian dollar and Euro. The debt service obligations associated with this foreign currency debt are generally funded directly from those operations. As a result, foreign currency risk related to this portion of the Company’s debt service payments is limited. However, in the event the foreign currency debt service is not paid from the Company’s foreign operations, the Company may face exchange rate risk if the Australian or Canadian dollar or Euro were to appreciate relative to the United States dollar and require higher United States dollar equivalent cash.

The Company is also exposed to foreign currency exchange rate risk related to its foreign operations, including non-functional currency intercompany debt, typically from the Company’s United States operations to its foreign subsidiaries, and any timing difference between announcement and closing of an acquisition of a foreign business to the extent such acquisition is funded with United States dollars. To mitigate currency exposures related to non-functional currency denominated intercompany debt, cross-currency swap contracts may be entered into for periods consistent with the underlying debt. In determining the fair value of the derivative contract, the significant inputs to valuation models are quoted market prices of similar instruments in active markets. To mitigate currency exposures of non-United States dollar denominated acquisitions, the Company may enter into foreign exchange forward contracts. Although these derivative contracts do not qualify for hedge accounting, the Company believes that such instruments are closely correlated with the underlying exposure, thus reducing the associated risk. The gains or losses from changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings within other income/(expense).

On December 1, 2010, the Company completed the FreightLink Acquisition for A$331.9 million (or $320.0 million at the exchange rate on December 1, 2010). The Company financed the acquisition through a combination of cash on hand and borrowings under its credit agreement, as amended. A portion of the funds were transferred from the United States to Australia through an intercompany loan with a notional amount of A$105.0 million (or $100.6 million at the exchange rate on December 1, 2010). To mitigate the foreign currency exchange rate risk related to this non-functional currency intercompany loan, the Company entered into an Australian dollar/United States dollar floating to floating cross-currency swap agreement (the Swap), effective as of December 1, 2010, which effectively converted the A$105.0 million intercompany loan receivable in the United States into a $100.6 million loan receivable. The Swap requires the Company to pay Australian dollar BBSW plus 3.125% based on a notional amount of A$105.0 million and allows the Company to receive United States LIBOR plus 2.48% based on a notional amount of $100.6 million on a quarterly basis. BBSW is the wholesale interbank rate within Australia. It is the Australian equivalent to LIBOR. As a result of these quarterly net settlement payments, the Company realized an expense of $1.5 million within interest (expense)/income related to the quarterly settlement for the three months ended June 30, 2011. In addition, the Company recognized a net gain of $0.1 million within other income/(expense) related to the mark-to-market of the derivative agreement and the underlying intercompany debt instrument to the exchange rate on June 30, 2011. The fair value of the Swap represented a liability of $12.9 million as of June 30, 2011. The fair value of the Swap was estimated based on Level 2 valuation inputs. The Swap expires on December 1, 2012.

The following table summarizes the fair value of derivative instruments recorded in the consolidated balance sheets as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Liability Derivatives:
Derivatives designated as hedges:
Interest rate swap agreement	Accrued expenses	$	4,271	Accrued expenses	$	4,202
Interest rate swap agreement	Other long-term liabilities	4,151		Other long-term liabilities	4,917
Total derivatives designated as hedges		$	8,422		$	9,119
Derivatives not designated as hedges:
Cross-currency swap agreement	Accrued expenses	$	5,778	Accrued expenses	$	5,541
Cross-currency swap agreement	Other long-term liabilities	7,077		Other long-term liabilities	2,091
Total derivatives not designated as hedges		$	12,855		$	7,632

The following table shows the effect of the Company’s derivative instrument designated as a cash flow hedge for the three and six months ended June 30, 2011 and 2010 in other comprehensive income/(loss) (OCI) (dollars in thousands):

	Total Cash Flow Hedge OCI Activity, Net of Tax
	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011		2010
Derivatives Designated as Cash Flow Hedges:
Effective portion of changes in fair value recognized in OCI:
Interest rate swap agreement	$	(246	)	$	(1,219	)	$	444	$	(1,978	)

The following table shows the effect of the Company’s derivative instruments not designated as hedges for the three and six months ended June 30, 2011 in the consolidated statement of operations (dollars in thousands):

		Amount Recognized in Earnings
	Location of Amount Recognized in Earnings	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Derivative Instruments Not Designated as Hedges:
Cross-currency swap agreement	Interest (expense)/income	$	(1,524	)	$	(2,960	)
Cross-currency swap agreement	Other income/(expense), net	97			119
		$	(1,427	)	$	(2,841	)

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computation of basic and diluted earnings per share (EPS) for the three and six months ended June 30, 2011 and 2010 (in thousands, except per share amounts):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Numerators:
Income from continuing operations, net of tax	$	31,145	$	20,691		$	53,267	$	36,667
Loss from discontinued operations, net of tax	—		(56		)	—		(72		)
Net income	$	31,145	$	20,635		$	53,267	$	36,595
Denominators:
Weighted average Class A common shares outstanding - Basic	39,903		38,831			39,695		38,711
Weighted average Class B common shares outstanding	2,218		2,484			2,311		2,503
Dilutive effect of employee stock grants	636		408			648		381
Weighted average shares - Diluted	42,757		41,723			42,654		41,595
Basic:
Earnings per common share from continuing operations	$	0.78	$	0.53		$	1.34	$	0.95
Loss per common share from discontinued operations	—		—			—		—
Earnings per common share	$	0.78	$	0.53		$	1.34	$	0.95
Diluted:
Earnings per common share from continuing operations	$	0.73	$	0.50		$	1.25	$	0.88
Loss per common share from discontinued operations	—		—			—		—
Earnings per common share	$	0.73	$	0.49		$	1.25	$	0.88

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

he following total number of Class A common stock issuable under the assumed exercise of stock options computed based on the treasury stock method were excluded from the calculation of diluted earnings per common share, as the effect of including these shares would have been anti-dilutive:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Anti-dilutive shares	98,129	634,883	78,441	677,410

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Fair Value of Financial Instruments (Details 2) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	$ 564,921	$ 578,864
Fair Value	569,575	581,868
Series A Senior Notes [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	75,000	75,000
Fair Value	75,703	76,491
Series B Senior Notes [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	100,000	100,000
Fair Value	106,051	105,041
Series C Senior Notes [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	25,000	25,000
Fair Value	24,603	24,421
Revolving Credit Facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	152,213	153,600
Fair Value	152,372	152,974
United States Term Loan [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	180,000	192,000
Fair Value	178,376	189,972
Canadian Term Loan [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	24,259	24,989
Fair Value	23,951	24,651
Other Debt Obligations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying Value	8,449	8,275
Fair Value	$ 8,519	$ 8,318

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Changes in Operations (Details 3)	3 Months Ended		6 Months Ended		1 Months Ended		6 Months Ended
	Jun. 30, 2011 USD ($)	Jun. 30, 2010 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2010 USD ($)	Sep. 30, 2010 HCRY [Member] USD ($)	Jun. 30, 2009 HCRY [Member] USD ($)	Jun. 30, 2011 HCRY [Member] USD ($)	Jun. 30, 2011 HCRY [Member] CAD
Restructuring Cost and Reserve [Line Items]
HCRY impairment and restructuring charges, net of tax						$ 5,400,000
HCRY loss on write-down						6,700,000
Restructuring charges						2,300,000
HCRY income tax benefit	11,420,000	12,067,000	19,905,000	21,708,000		(3,600,000)
Amounts pledged by the governments							31,100,000	30,000,000
Expected payments for capital improvements							3,000,000	3,000,000
Reversal of accrued restructuring charges					2,300,000
Reversal of accrued restructuring charges after tax					$ 1,500,000

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Comprehensive Income Parentheticals (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Comprehensive Income Parenthetical [Abstract]
Net unrealized loss on qualifying cash flow hedges, tax (provision)/benefit	$ 140	$ 693	$ (253)	$ 1,125
Changes in pension and other postretirement benefits, tax (provision)/benefit	$ (26)	$ (20)	$ 71	$ (156)

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Accounts Receivable (Tables)

6 Months Ended

Jun. 30, 2011

ACCOUNTS RECEIVABLE: [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Accounts receivable consisted of the following as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011			December 31, 2010
Accounts receivable - trade	$	139,033		$	118,265
Accounts receivable - grants	17,277			17,039
Total accounts receivable	156,310			135,304
Less: Allowance for doubtful accounts	(2,979		)	(3,079		)
Accounts receivable, net	$	153,331		$	132,225

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Segment Information (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Segment Reporting Information [Line Items]
Revenues	$ 209,589	$ 158,453	$ 401,500	$ 304,032
Income from operations	51,165	37,873	90,368	67,979
Depreciation and amortization	16,297	12,452	32,158	24,900
Interest expense	(10,253)	(5,411)	(20,192)	(10,773)
Interest income	858	471	1,633	894
Provision for income taxes	11,420	12,067	19,905	21,708
Expenditures for additions to property & equipment, net of grants from outside parties	42,154	6,385	50,365	10,613
North American & European Operations [Member]
Segment Reporting Information [Line Items]
Revenues	139,335	127,004	271,642	244,240
Income from operations	33,737	31,153	60,672	55,164
Depreciation and amortization	11,565	10,908	22,911	21,823
Interest expense	(5,935)	(5,411)	(11,891)	(10,773)
Interest income	791	56	1,507	111
Provision for income taxes	7,485	9,981	13,557	17,692
Expenditures for additions to property & equipment, net of grants from outside parties	14,742	5,181	21,811	5,877
Australian Operations [Member]
Segment Reporting Information [Line Items]
Revenues	70,254	31,449	129,858	59,792
Income from operations	17,428	6,720	29,696	12,815
Depreciation and amortization	4,732	1,544	9,247	3,077
Interest expense	(4,318)	0	(8,301)	0
Interest income	67	415	126	783
Provision for income taxes	3,935	2,086	6,348	4,016
Expenditures for additions to property & equipment, net of grants from outside parties	$ 27,412	$ 1,204	$ 28,554	$ 4,736

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments [Abstract]

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

The following table presents the Company's financial instruments that are carried at fair value as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011		December 31, 2010
Financial liabilities carried at fair value using Level 2 inputs:
Interest rate swap agreement	$	8,422	$	9,119
Cross-currency swap agreement	12,855		7,632
Total financial liabilities carried at fair value	$	21,277	$	16,751

Fair Value, by Balance Sheet Grouping [Table Text Block]

The following table presents the carrying value and fair value using Level 2 inputs of the Company’s financial instruments carried at historical cost as of June 30, 2011 and December 31, 2010 (dollars in thousands):

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities carried at historical cost:
Series A senior notes	$	75,000	$	75,703	$	75,000	$	76,491
Series B senior notes	100,000		106,051		100,000		105,041
Series C senior notes	25,000		24,603		25,000		24,421
Revolving credit facility	152,213		152,372		153,600		152,974
United States term loan	180,000		178,376		192,000		189,972
Canadian term loan	24,259		23,951		24,989		24,651
Other debt	8,449		8,519		8,275		8,318
Total	$	564,921	$	569,575	$	578,864	$	581,868

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Principles of Consolidation and Basis of Presentation

6 Months Ended

Jun. 30, 2011

Principles of Consolidation and Basis of Presentation [Abstract]

Principles of Consolidation and Basis of Presentation

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION:

The interim consolidated financial statements presented herein include the accounts of Genesee & Wyoming Inc. and its subsidiaries (the Company). All references to currency amounts included in this Quarterly Report on Form 10-Q, including the consolidated financial statements, are in United States dollars unless specifically noted otherwise. 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 (SEC). They do not contain all disclosures which would be required in a full set of financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, the unaudited financial statements for the three and six months ended June 30, 2011 and 2010, are presented on a basis consistent with the audited financial statements and contain all adjustments, consisting only of normal recurring adjustments, necessary to provide a fair statement of the results for interim periods. The results of operations for interim periods are not necessarily indicative of results of operations for the full year. The consolidated balance sheet data for 2010 was derived from the audited financial statements in the Company’s 2010 Annual Report on Form 10-K but does not include all disclosures required by U.S. GAAP.

The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2010, included in the Company’s 2010 Annual Report on Form 10-K.

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Significant Non-Cash Investing Activities

6 Months Ended

Jun. 30, 2011

Significant Non Cash Investing Activities [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

SIGNIFICANT NON-CASH INVESTING ACTIVITIES:

As of June 30, 2011 and 2010, the Company had outstanding grant receivables from outside parties for capital expenditures of $17.3 million and $4.3 million, respectively. As of June 30, 2011 and 2010, the Company also had approximately $15.4 million and $8.3 million, respectively, of purchases of property and equipment that were not paid and, accordingly, were accrued in accounts payable in the normal course of business.

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Derivative Financial Instruments (Details)	3 Months Ended		6 Months Ended						6 Months Ended
	Jun. 30, 2011 USD ($)	Jun. 30, 2010 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2010 USD ($)	Dec. 31, 2010 USD ($)	Dec. 01, 2010 USD ($)	Dec. 01, 2010 AUD	Oct. 02, 2008 USD ($)	Jun. 30, 2011 AUD BBSW Interest Rate [Member] Cross-currency swap [Member]	Jun. 30, 2011 Libor Interest Rate [Member] Cross-currency swap [Member]	Dec. 01, 2010 FreightLink [Member] USD ($)	Dec. 01, 2010 FreightLink [Member] AUD	Jun. 30, 2011 Cross-currency swap [Member] Fair Value, Inputs, Level 2 [Member] USD ($)
Derivatives [Line Items]
Notional Amount of Interest Rate Derivatives								$ 120,000,000
Derivative, Fixed Interest Rate								3.88%
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net			0
Third-party debt associated with foreign currency debt	160,500,000		160,500,000
Acquisition of assets											320,019,000	331,936,000
Notional Amount of Foreign Currency Derivatives						100,600,000	105,000,000
Derivative, Description of Variable Rate Basis									Australian dollar BBSW plus 3.125%	LIBOR plus 2.48%
Other income/(expense)	170,000	(175,000)	469,000	275,000
Derivative liability	$ 21,277,000		$ 21,277,000		$ 16,751,000								$ 12,855,000

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Changes in Operations (Tables)

6 Months Ended

Jun. 30, 2011

Jun. 30, 2010

Changes in Operations [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The preliminary acquisition-date fair values assigned to the acquired net assets were as follows (dollars in thousands):

	Australian Dollars		United States Dollars
Accounts receivable	$	161	$	155
Materials and supplies	3,328		3,209
Prepaid expenses and other	101		97
Deferred income tax assets	171		165
Property and equipment	330,712		318,843
Total assets	$	334,473	$	322,469
Accrued expenses	$	731	$	705
Long-term debt	1,806		1,741
Net assets	$	331,936	$	320,023

Business Acquisition, Pro Forma Information [Table Text Block]

The following pro forma financial results do not include the impact of any potential operating efficiencies, savings from expected synergies, costs to integrate the operations or costs necessary to achieve savings from expected synergies or the impact of derivative instruments that the Company has entered into or may enter into to mitigate interest rate or currency exchange rate risk (dollars in thousands, except per share amounts):

	Three Months Ended		Six Months Ended
	June 30, 2010		June 30, 2010
Operating revenues	$	182,112	$	347,842
Net income	$	22,995	$	39,793
Earnings per common share:
Basic earnings per common share from continuing operations	$	0.59	$	1.03
Diluted earnings per common share from continuing operations	$	0.55	$	0.96

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Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 25,938	$ 27,417
Accounts receivable, net	153,331	132,225
Materials and supplies	15,524	13,259
Prepaid expenses and other	12,559	14,529
Deferred income tax assets, net	21,889	21,518
Total current assets	229,241	208,948
PROPERTY AND EQUIPMENT, net	1,503,388	1,444,177
GOODWILL	162,737	160,629
INTANGIBLE ASSETS, net	235,029	237,355
DEFERRED INCOME TAX ASSETS, net	2,420	2,879
OTHER ASSETS, net	13,144	13,572
Total assets	2,145,959	2,067,560
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt	102,771	103,690
Accounts payable	132,258	124,948
Accrued expenses	51,806	76,248
Total current liabilities	286,835	304,886
LONG-TERM DEBT, less current portion	462,150	475,174
DEFERRED INCOME TAX LIABILITIES, net	274,325	263,361
DEFERRED ITEMS - grants from outside parties	190,796	183,356
OTHER LONG-TERM LIABILITIES	28,135	23,543
COMMITMENTS AND CONTINGENCIES	0	0
STOCKHOLDERS' EQUITY:
Additional paid-in capital	375,975	358,024
Retained earnings	675,452	622,185
Accumulated other comprehensive income	56,656	40,114
Treasury stock, at cost	(204,912)	(203,626)
Total stockholders' equity	903,718	817,240
Total liabilities and stockholders' equity	2,145,959	2,067,560
Class A
STOCKHOLDERS' EQUITY:
Common Stock	525	519
Class B
STOCKHOLDERS' EQUITY:
Common Stock	$ 22	$ 24

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Derivative Financial Instruments (Details 3) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Derivatives [Line Items]
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax	$ (246)	$ (1,219)	$ 444	$ (1,978)

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Segment Information (Details 2) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Property & equipment	$ 1,503,388	$ 1,444,177
North American & European Operations [Member]
Segment Reporting Information [Line Items]
Property & equipment	1,012,010	1,000,350
Australian Operations [Member]
Segment Reporting Information [Line Items]
Property & equipment	$ 491,378	$ 443,827

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Subsequent Events Credit Facility (Details) In Millions	6 Months Ended
	Jun. 30, 2011 USD ($)	Jul. 29, 2011 USD ($)	Jul. 29, 2011 Revolving Loan [Member] USD ($)	Jul. 29, 2011 United States Term Loan [Member] USD ($)	Jul. 29, 2011 Australian Term Loan [Member] USD ($)	Jul. 29, 2011 Australian Term Loan [Member] AUD	Jul. 29, 2011 Canadian Term Loan [Member] USD ($)	Jul. 29, 2011 Canadian Term Loan [Member] CAD
Subsequent Event [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 620.0	$ 750.0	$ 425.0	$ 200.0	$ 100.0	92.2	$ 25.0	23.6
Debt Instrument, Maturity Date	Jul. 29, 2016

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Derivative Financial Instruments (Details 4) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Other income/(expense), net	$ 170	$ (175)	$ 469	$ 275
Derivative instruments not designated as hedging instruments, gain (loss), net	(1,427)		(2,841)
Currency Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest (expense)/income	(1,524)		(2,960)
Other income/(expense), net	$ 97		$ 119