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 September 30, 2017

or

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 Number 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.)
20 West Avenue, Darien, Connecticut 06820
(Address of principal executive offices)(Zip Code)

(203) 202-8900

(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 and 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, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in 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
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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 November 2, 2017:

Class	Number of Shares Outstanding
Class A Common Stock	61,671,666
Class B Common Stock	713,138

51.1

INDEX
		Page
	Forward-Looking Statements	3
Part I	Financial Information	4
Item 1.	Financial Statements:
	Consolidated Balance Sheets (Unaudited) - As of September 30, 2017 and December 31, 2016	4
	Consolidated Statements of Operations (Unaudited) - For the Three and Nine Months Ended September 30, 2017 and 2016	5
	Consolidated Statements of Comprehensive Income (Unaudited) - For the Three and Nine Months Ended September 30, 2017 and 2016	6
	Consolidated Statements of Cash Flows (Unaudited) - For the Nine Months Ended September 30, 2017 and 2016	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	71
Item 4.	Controls and Procedures	72
Part II	Other Information	73
Item 1.	Legal Proceedings	73
Item 1A.	Risk Factors	73
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	74
Item 6.	Exhibits	74
Signatures		75
Index to Exhibits		76

2

Unless the context otherwise requires, when used in this Quarterly Report on Form 10-Q, the terms "Genesee & Wyoming," "G&W," the "Company," "we," "our" and "us" refer to Genesee & Wyoming Inc. and its subsidiaries. All references to currency amounts included in this Quarterly Report on Form 10-Q, including the financial statements, are in United States dollars unless specifically noted otherwise. The term carload represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.

From time to time, we may use our website as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on and accessible at www.gwrr.com/investors. In addition, you may automatically receive email alerts and other information about us by enrolling your email address in the "Email Alerts" section of www.gwrr.com/investors. The information contained on or connected to our Internet website is not deemed to be incorporated by reference in this Quarterly Report or filed with the Securities and Exchange Commission.

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," "could," "should," "seeks," "expects," "will," "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 that are difficult to forecast, including the following: risks related to the operation of our railroads; severe weather conditions and other natural occurrences that could result in shutdowns, derailments, railroad network and port congestion or other substantial disruption of operations; customer demand and changes in our operations or loss of important customers; exposure to the credit risk of customers and counterparties; changes in commodity prices; consummation and integration of acquisitions; economic, political and industry conditions, including employee strikes or work stoppages; retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we or our customers are subject; increased competition in relevant markets; funding needs and financing sources, including our ability to obtain government funding for capital projects; international complexities of operations, currency fluctuations, finance, tax and decentralized management; challenges of managing rapid growth, including retention and development of senior leadership; unpredictability of fuel costs; susceptibility to and outcome of various legal claims, lawsuits and arbitrations; increase in, or volatility associated with, expenses related to estimated claims, self-insured retention amounts and insurance coverage limits; consummation of new business opportunities; decrease in revenues and/or increase in costs and expenses; susceptibility to the risks of doing business in foreign countries; uncertainties arising from a referendum in which voters in the United Kingdom (U.K.) approved an exit from the European Union (E.U.), commonly referred to as Brexit; our ability to integrate acquired businesses successfully or to realize the expected synergies associated with acquisitions; risks associated with our substantial indebtedness; failure to maintain satisfactory working relationships with partners in Australia; failure to maintain an effective system of internal control over financial reporting as well as disclosure controls and procedures and others including, but not limited to, those set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any, and those noted in our 2016 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 do not undertake, and expressly disclaim, any duty to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

3

PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS.

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2017 and DECEMBER 31, 2016 (Unaudited)

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

	September 30, 2017			December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	80,277		$	32,319
Accounts receivable, net	415,802			363,923
Materials and supplies	55,368			43,621
Prepaid expenses and other	39,464			45,475
Total current assets	590,911			485,338
PROPERTY AND EQUIPMENT, net	4,628,894			4,503,319
GOODWILL	1,187,189			1,125,596
INTANGIBLE ASSETS, net	1,575,900			1,472,376
DEFERRED INCOME TAX ASSETS, net	3,120			2,671
OTHER ASSETS	43,154			45,658
Total assets	$	8,029,168		$	7,634,958
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	31,139		$	52,538
Accounts payable	254,555			266,867
Accrued expenses	168,168			159,705
Total current liabilities	453,862			479,110
LONG-TERM DEBT, less current portion	2,353,524			2,306,915
DEFERRED INCOME TAX LIABILITIES, net	1,252,499			1,162,221
DEFERRED ITEMS - grants from outside parties	315,113			301,383
OTHER LONG-TERM LIABILITIES	220,491			198,208
COMMITMENTS AND CONTINGENCIES
EQUITY:
Class A Common Stock, $0.01 par value, one vote per share; 180,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 74,512,436 and 74,162,972 shares issued and 61,668,015 and 61,362,665 shares outstanding (net of 12,844,421 and 12,800,307 shares in treasury) as of September 30, 2017 and December 31, 2016, respectively	745			742
Class B Common Stock, $0.01 par value, ten votes per share; 30,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 713,138 and 758,138 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	7			8
Additional paid-in capital	1,674,195			1,651,703
Retained earnings	1,808,298			1,685,813
Accumulated other comprehensive loss	(131,139		)	(211,336		)
Treasury stock, at cost	(235,623		)	(232,348		)
Total Genesee & Wyoming Inc. stockholders' equity	3,116,483			2,894,582
Noncontrolling interest	317,196			292,539
Total equity	3,433,679			3,187,121
Total liabilities and equity	$	8,029,168		$	7,634,958

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 NINE MONTHS ENDED SEPTEMBER 30, 2017 and 2016 (Unaudited)

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
OPERATING REVENUES	$	576,927		$	501,002		$	1,636,468		$	1,484,993
OPERATING EXPENSES:
Labor and benefits	167,929			156,235			496,128			475,297
Equipment rents	33,291			36,778			100,399			113,634
Purchased services	68,562			50,991			176,358			149,125
Depreciation and amortization	64,222			50,841			186,509			151,095
Diesel fuel used in train operations	34,535			30,134			105,718			83,851
Electricity used in train operations	765			3,226			6,072			9,895
Casualties and insurance	10,624			9,252			33,346			28,814
Materials	30,664			19,678			77,861			62,662
Trackage rights	22,632			22,781			66,652			64,509
Net (gain)/loss on sale and impairment of assets	(315		)	(524		)	(1,096		)	11,993
Restructuring costs	2,628			223			8,744			6,320
Other expenses	29,901			29,536			89,494			91,757
Total operating expenses	465,438			409,151			1,346,185			1,248,952
OPERATING INCOME	111,489			91,851			290,283			236,041
Interest income	463			416			1,271			827
Interest expense	(28,281		)	(17,333		)	(80,431		)	(53,049		)
Other income/(loss), net	221			1,494			(289		)	2,947
Income before income taxes	83,892			76,428			210,834			186,766
Provision for income taxes	(30,507		)	(19,643		)	(82,032		)	(54,563		)
Net income	$	53,385		$	56,785		$	128,802		$	132,203
Less: Net income attributable to noncontrolling interest	3,145			—			6,317			—
Net income attributable to Genesee & Wyoming Inc.	$	50,240		$	56,785		$	122,485		$	132,203
Basic earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:	$	0.82		$	0.99		$	1.99		$	2.31
Weighted average shares - Basic	61,629			57,266			61,518			57,160
Diluted earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:	$	0.80		$	0.98		$	1.96		$	2.28
Weighted average shares - Diluted	62,477			58,180			62,399			58,083

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

5

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 and 2016 (Unaudited)

(dollars in thousands)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
NET INCOME	$	53,385	$	56,785		$	128,802		$	132,203
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment	32,902		5,108			100,054			3,618
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($303), $1,417, ($567) and $12,242, respectively	736		(2,127		)	638			(18,364		)
Changes in pension and other postretirement benefits, net of tax (provision)/benefit of ($20), ($392), $887 and ($1,376), respectively	38		1,449			(2,149		)	4,372
Other comprehensive income/(loss)	33,676		4,430			98,543			(10,374		)
COMPREHENSIVE INCOME	$	87,061	$	61,215		$	227,345		$	121,829
Less: Comprehensive income attributable to noncontrolling interest	8,500		—			24,663			—
COMPREHENSIVE INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC.	$	78,561	$	61,215		$	202,682		$	121,829

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

6

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDEDSEPTEMBER 30, 2017 and 2016 (Unaudited)

(dollars in thousands)

	Nine Months Ended
	September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	128,802		$	132,203
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	186,509			151,095
Stock-based compensation	13,354			13,835
Deferred income taxes	51,231			25,088
Net (gain)/loss on sale and impairment of assets	(1,096		)	11,993
Changes in assets and liabilities which provided/(used) cash, net of effect of acquisitions:
Accounts receivable, net	(18,020		)	(10,731		)
Materials and supplies	8,998			(2,642		)
Prepaid expenses and other	14,257			(1,930		)
Accounts payable and accrued expenses	(41,529		)	(29,484		)
Other assets and liabilities, net	7,883			14,156
Net cash provided by operating activities	350,389			303,583
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(149,105		)	(159,523		)
Grant proceeds from outside parties	15,998			29,952
Cash paid for acquisitions, net of cash acquired	(107,586		)	—
Proceeds from the sale of investment	2,100			—
Insurance proceeds for the replacement of assets	1,406			10,319
Proceeds from disposition of property and equipment	4,238			2,003
Net cash used in investing activities	(232,949		)	(117,249		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on revolving line-of-credit, long-term debt and capital lease obligations	(498,925		)	(501,087		)
Proceeds from revolving line-of-credit and long-term borrowings	418,735			300,495
Proceeds from employee stock purchases	8,003			5,969
Treasury stock purchases	(3,275		)	(3,065		)
Net cash used in financing activities	(75,462		)	(197,688		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	5,980			1,779
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	47,958			(9,575		)
CASH AND CASH EQUIVALENTS, beginning of period	32,319			35,941
CASH AND CASH EQUIVALENTS, end of period	$	80,277		$	26,366

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

7

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. All significant intercompany transactions and accounts have been eliminated in consolidation. These interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and are unaudited. 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 nine months ended September 30, 2017 and 2016 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 the interim periods presented. 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 2016 was derived from the audited financial statements in the Company's 2016 Annual Report on Form 10-K, but does not include all disclosures required by U.S. GAAP.

The results of operations of the foreign entities are maintained in the local currency of the respective subsidiary and 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 the Company's results of operations.

The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016 included in the Company's 2016 Annual Report on Form 10-K. Certain reclassifications have been made to prior period balances to conform to the current year presentation, including changes to the statement of cash flows from the adoption of the Accounting Standards Update (ASU) noted below.

In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based compensation arrangements, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The Company elected to account for forfeitures as they occur and elected the retrospective transition method in regards to the classification of tax-related cash flows from stock-based payments. The amendment became effective for the Company on January 1, 2017 and did not have a material impact on the consolidated financial statements for the three and nine months ended September 30, 2017.

When comparing the Company's results of operations from one reporting period to another, it is important to consider that the Company has historically experienced fluctuations in revenues and expenses due to acquisitions, changing economic conditions, fluctuations in commodity prices, competitive forces, changes in foreign currency exchange rates, rail network congestion, one-time freight moves, fuel price fluctuations, customer plant expansions and shutdowns, sales of property and equipment, derailments and weather-related conditions, such as hurricanes, cyclones, tornadoes, high winds, droughts, heavy snowfall, unseasonably hot or cold weather, freezing and flooding, among other factors. In periods when these events occur, the Company's 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, global commodity prices and foreign exchange rates, such as steel products, iron ore, paper products, lumber and forest products and agricultural products, as well as product specific market conditions, such as the availability of lower priced alternative sources of power generation (coal) and energy commodity price differentials (crude oil and natural gas liquids) or congestion at ports (intermodal). Other shipments are relatively less affected by economic conditions and are more closely affected by other factors, such as winter weather (salt) and seasonal rainfall (agricultural products). As a result of these and other factors, the Company's results of operations in any reporting period may not be directly comparable to the Company's results of operations in other reporting periods.

2. CHANGES IN OPERATIONS:

North American Operations

Heart of Georgia Railroad, Inc.: On May 31, 2017, the Company completed the acquisition of all the outstanding shares of Atlantic Western Transportation, Inc., parent company of Heart of Georgia Railroad, Inc. (HOG), for $5.6 million in cash and contingent consideration valued at $5.7 million. The contingent consideration is payable to the sellers upon satisfaction of certain conditions, which the Company expects to be paid in 2021. The results of operations from HOG have been included in the Company's consolidated statement of operations since the acquisition date.

8

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

HOG was founded in 1999 and operates 219 miles of track that runs across the State of Georgia. The track is leased from the Georgia Department of Transportation. It connects with the Company’s Georgia Southwestern Railroad at Americus, Georgia, and with the Company’s Georgia Central Railway at Vidalia, Georgia. HOG serves an inland intermodal terminal at Cordele, Georgia, providing five days per week, direct rail service via the Georgia Central Railway to the Port of Savannah for auto, agricultural products and other merchandise customers. HOG has Class I railroad connections with CSX Corp. at Cordele and with Norfolk Southern at Americus and Helena, Georgia. HOG transports approximately 10,000 annual carloads of agricultural products, feed, fertilizer, and lumber and forest products, of which approximately 2,000 carloads are interchanged with the Company’s Georgia Central Railway.

Providence and Worcester Railroad Company: On November 1, 2016, the Company completed the acquisition of 100% of the outstanding common stock of Providence and Worcester Railroad Company (P&W) for $25.00 per share, or $126.2 million. The Company funded the acquisition with borrowings under the Company's Second Amended and Restated Senior Secured Syndicated Credit Facility Agreement, as amended (the Credit Agreement). The results of operations from P&W have been included in the Company's consolidated statement of operations since the acquisition date. The Company incurred $3.1 million of integration costs associated with P&W during the nine months ended September 30, 2017, of which $2.7 million was included within labor and benefits expense primarily for severance costs and $0.4 million was included within other expenses in the Company's consolidated statement of operations.

P&W is headquartered in Worcester, Massachusetts, and operates in Rhode Island, Massachusetts, Connecticut and New York. P&W is contiguous with the Company’s New England Central Railroad (NECR) and Connecticut Southern Railroad (CSO). As of the acquisition date, rail service was provided by approximately 130 P&W employees with 32 locomotives across 163 miles of owned track and over approximately 350 track miles under track access agreements. P&W has exclusive freight access over Amtrak’s Northeast Corridor between New Haven, Connecticut, and Providence, Rhode Island, and trackage rights over Metro-North Commuter Railroad, Amtrak and CSX Corp. between New Haven, Connecticut, and Queens, New York. P&W interchanges with the Company’s NECR and CSO railroads, as well as with CSX Corp., Norfolk Southern, Pan Am Railways, Pan Am Southern, the Housatonic Railroad and the New York and Atlantic Railroad, and also connects to Canadian National and Canadian Pacific via NECR.

P&W serves a diverse mix of aggregates, auto, chemicals, metals and lumber customers in southeastern New England, handling approximately 44,000 carloads and intermodal units annually. In addition, P&W provides rail service to three ports (Providence, Davisville and New Haven) and to a United States Customs bonded intermodal terminal in Worcester, Massachusetts, that receives inbound intermodal containers for distribution in New England.

The Company accounted for the acquisition as a business combination using the acquisition method of accounting under U.S. GAAP. The acquired assets and liabilities of P&W were recorded at their acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The following acquisition-date fair values were assigned to the acquired net assets (dollars in thousands). The $27.9 million of fair value assigned to goodwill will not be deductible for tax purposes.

	Amount
Cash and cash equivalents	$	1,529
Accounts receivable	4,011
Materials and supplies	1,048
Prepaid expenses and other	648
Property and equipment	129,473
Goodwill	27,938
Total Assets	164,647
Accounts payable and accrued expenses	9,759
Deferred income tax liabilities, net	27,464
Other long-term liabilities	1,273
Net assets	$	126,151

9

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Australian Operations

Glencore Rail (NSW) Pty Limited: On December 1, 2016, a subsidiary of the Company completed the acquisition of Glencore Rail (NSW) Pty Limited (GRail) for A$1.14 billion (or approximately $844.9 million at an exchange rate of $0.74 for one Australian dollar) and concurrently issued a 48.9% equity stake in G&W Australia Holdings LP (GWAHLP) (collectively, the Australia Partnership), which is the holding entity for all of the Company’s Australian businesses, including GRail, to Macquarie Infrastructure and Real Assets (MIRA), a large infrastructure investment firm. The Company, through wholly-owned subsidiaries, retained a 51.1% ownership in GWAHLP. As the Company maintained control of its Australian Operations, it continues to consolidate 100% of the Company's Australian Operations in its financial statements and reports a noncontrolling interest for MIRA’s 48.9% equity ownership. The acquisition of GRail was funded through a combination of third-party debt and contributions from the Company and MIRA in the form of equity and partner loans.

The Company and MIRA contributed a combined A$1.3 billion in the form of cash, partner loans and contributed equity, and the Company's recently established subsidiary, GWI Acquisitions Pty Ltd (GWIA), entered into a five-year A$690 million senior secured term loan facility that is non-recourse to the Company and to MIRA. The proceeds were used to acquire GRail for A$1.14 billion, repay Genesee & Wyoming Australia’s (GWA) existing A$250 million term loan (under the Company’s Credit Agreement) and pay A$19.8 million in debt issuance costs and A$13.2 million of acquisition-related costs (collectively the GRail Transactions). The foreign exchange rate used to translate the transaction amounts to United States dollars (USD) was $0.74 for one Australian dollar (AUD).

GRail’s coal haulage business was established in 2010 as an alternative rail service provider to the incumbent railroads in the Hunter Valley and has grown to be the third largest coal haulage business in Australia. The Company’s Freightliner Australia subsidiary (acquired by the Company in March 2015) has been the rail operator of GRail since inception and presently provides haulage and logistics services for approximately 40 million tonnes per year of steam coal that is among the lowest cost and highest quality coal in the world sold principally to customers in Japan, Korea and Taiwan. These services have continued following the GRail transaction.

    In conjunction with the GRail acquisition, the Company entered into a 20-year rail haulage contract with the seller, Glencore Coal Pty Limited (GC), to exclusively haul all coal produced at GC’s existing mines in the Hunter Valley to the Port of Newcastle. The contract has minimum guaranteed volumes over the first 18 years.

The GRail transaction included the acquisition of nine train sets (30 locomotives and 894 railcars). Rail haulage service is operated on government-owned, open-access track that is coordinated by a neutral third party. Track access fees will continue to be paid directly by GC.

The Company paid GC, the seller of GRail, A$1.14 billion in cash at closing and received A$3.8 million (or $2.9 million at the exchange rate on the date the cash was received) from the seller for the final working capital adjustment during the three months ended March 31, 2017. The Company accounted for the acquisition as a business combination using the acquisition method of accounting under U.S. GAAP. The acquired assets and liabilities of GRail were recorded at their acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The foreign exchange rate used to translate the balance sheet to United States dollars was $0.74 for one Australian dollar, the exchange rate on December 1, 2016. The results of operations from GRail have been included in the Company's consolidated statement of operations since the December 1, 2016 acquisition date.

The following acquisition-date fair values were assigned to the acquired net assets (amounts in thousands):

	AUD		USD
Accounts receivable	A$	1,556	$	1,153
Materials and supplies	411		305
Property and equipment	279,592		207,206
Goodwill	415,959		308,267
Intangible assets	635,000		470,599
Total assets	1,332,518		987,530
Accounts payable and accrued expenses	5,796		4,296
Deferred income tax liabilities, net	190,551		141,217
Net assets	A$	1,136,171	$	842,017

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The A$635.0 million (or $470.6 million at the exchange rate on December 1, 2016) of fair value assigned to intangible assets relates to an amortizable customer contract associated with the 20-year take-or-pay rail haulage contract with GC. The A$416.0 million (or $308.3 million at the exchange rate on December 1, 2016) of fair value assigned to goodwill will not be deductible for tax purposes.

Pro Forma Financial Results (Unaudited)

The following table summarizes the Company's unaudited pro forma operating results for the nine months ended September 30, 2016 as if the GRail Transactions had been consummated as of January 1, 2015. As such, these results include pro forma results from the GRail Transactions for the period from January 1, 2016 through September 30, 2016. The following pro forma financial information does not include the impact of any costs to integrate the operations or the impact of derivative instruments that the Company has entered into or may enter into to mitigate foreign currency or interest rate risk (dollars in thousands, except per share amounts):

	Nine Months Ended
	September 30, 2016
Operating revenues	$	1,526,122
Net income attributable to Genesee & Wyoming Inc.	$	122,779
Basic earnings per common share	$	2.15
Diluted earnings per common share	$	2.11

The unaudited pro forma operating results included the acquisition of GRail adjusted, net of tax, for depreciation and amortization expense resulting from the determination of fair values of the acquired property and equipment and amortizable intangible asset, the inclusion of interest expense related to borrowings used to fund the acquisition, the amortization of debt issuance costs related to the Australian Credit Agreement, noncontrolling interest related to MIRA's 48.9% ownership and the elimination of Australia's interest expense related to debt under the Credit Agreement. Prior to the GRail acquisition, the Company's Australian subsidiary, Freightliner Australia Pty Ltd (FLA), provided rail operator services to GRail, which has been eliminated in the pro forma financial results. Since the pro forma operating results assume the acquisition was consummated on January 1, 2015, the unaudited pro forma operating results for the nine months ended September 30, 2016 excluded $4.6 million ($4.4 million, net of tax) of costs incurred by the Company related to the GRail Transactions.

The unaudited pro forma operating results for the nine months ended September 30, 2016 were based on the Company's consolidated statement of operations and GRail's historical operating results for the nine months ended September 30, 2016. The foreign exchange rate used to translate GRail's 2016 historical operating results to United States dollars was $0.74 for one Australian dollar (which was calculated based on the weighted average monthly exchange rates for the first nine months of 2016).

The pro forma financial information does not purport to be indicative of the results that actually would have been obtained had the GRail Transactions been completed as of January 1, 2015 and for the periods presented and are not intended to be a projection of future results or trends.

Arrium Limited: Between 2011 and 2014, GWA invested a total of $78 million to purchase locomotives and railcars, as well as to construct a standard gauge rolling-stock maintenance facility to support iron ore shipments from Arrium's Southern Iron mine and Whyalla-based operations, which include the Middleback Range iron ore mines and the Whyalla steelworks. Arrium mothballed its Southern Iron mine in April 2015, citing the significant decline in the price of iron ore, while the mines in the Middleback Range continued to operate. 

On April 7, 2016, Arrium announced it had entered into voluntary administration. As a result, the Company recorded a $13.0 million non-cash charge related to the impairment of GWA's now idle rolling-stock maintenance facility, which was recorded to net (gain)/loss on sale and impairment of assets within operating expenses, which represented the entire carrying value of these assets, and an allowance for doubtful accounts charge of $8.1 million associated with accounts receivable from Arrium, which was recorded to other expenses within operating expenses, during the first quarter of 2016. Also, as a result of the voluntary administration, all payments to GWA associated with the Southern Iron rail haulage agreement ceased.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

On August 31, 2017, Arrium was sold to GFG Alliance. The steel making business was rebranded as Liberty OneSteel and the mining business was rebranded as SIMEC Mining. GWA continues to provide service and receive payments under the remaining rail haulage agreement. Pursuant to the rail haulage agreement, GWA serves several iron ore mines in the Middleback Range and the Whyalla steelworks operations, which the Company expects will represent A$40 million (or approximately $32 million at the exchange rate on September 30, 2017) of annual revenue, prospectively.

U.K./European Operations

Pentalver Transport Limited: On May 3, 2017, the Company's subsidiary, GWI UK Acquisition Company Limited, purchased for cash all of the issued share capital of Pentalver Transport Limited (Pentalver) from a subsidiary of APM Terminals (a subsidiary of A P Møller-Maersk A/S) for £97.8 million (or $126.2 million at the exchange rate on May 3, 2017) or £77.5 million (or $100.1 million at the exchange rate on May 3, 2017) net of £20.2 million (or $26.1 million at the exchange rate on May 3, 2017) of cash received in connection with the sale. The Company funded the acquisition with borrowings under the Credit Agreement. The foreign exchange rate used to translate the total consideration to United States dollars was $1.29 for one British pound (GBP).

Headquartered in Southampton, U.K., Pentalver operates off-dock container terminals (most under long-term lease) strategically placed at each of the four major seaports of Felixstowe, Southampton, London Gateway and Tilbury, as well as an inland terminal located at Cannock, in the Midlands, near many of the nation’s largest distribution centers. In addition to providing storage for loaded and empty containers on over 100 acres of land, Pentalver also operates a trucking haulage service with more than 150 trucks, primarily providing daily service between the seaports of Felixstowe and Southampton and its inland terminal at Cannock. Pentalver also provides services related to container maintenance and repair (including refrigerated containers) and is one of the largest sellers of new and used containers in the U.K.

Pentalver’s operations are complementary to those of the Company's Freightliner subsidiary, which is the largest rail maritime intermodal operator in the U.K. The logistics of maritime container transportation in the U.K. are highly competitive, whether by road, rail or short-sea, with a premium placed on timely, efficient and safe service. The Company expects that the Pentalver acquisition will enable it to (i) enhance its U.K. services by providing rail and road transportation solutions, as well as offering storage options at the ports and inland, and (ii) unlock efficiencies from shared services and enhanced asset utilization from Pentalver’s trucking fleet and Freightliner’s existing fleet of approximately 200 trucks that currently provide local collection and delivery haulage from Freightliner’s inland terminals. With approximately 600 employees, Pentalver will operate as part of the Company’s U.K./Europe Region.

The results of operations from Pentalver have been included in the Company's consolidated statement of operations since the May 3, 2017, acquisition date within the Company's U.K./European Operations segment. Pentalver contributed $64.7 million of total revenues and $3.1 million of operating income, which included $2.1 million of depreciation and amortization expense, to the Company's consolidated results since the acquisition date. The Company incurred $3.7 million of acquisition and integration costs related to Pentalver during the nine months ended September 30, 2017, of which $3.6 million was included within other expenses and $0.1 million was included in labor and benefits expense in the Company's consolidated statement of operations.

The Company accounted for the acquisition as a business combination using the acquisition method of accounting under U.S. GAAP. The acquired assets and liabilities of Pentalver were recorded at their preliminary acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The preliminary acquisition date fair values are subject to further adjustment for the final determination of the fair values of the acquired assets and liabilities. The foreign exchange rate used to translate the balance sheet to United States dollars was $1.29 for one British pound.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

	GBP		USD
Cash and cash equivalents	£	20,224	$	26,117
Accounts receivable	16,847		21,756
Materials and supplies	13,360		17,253
Prepaid expenses and other	3,238		4,182
Property and equipment	22,403		28,931
Goodwill	9,368		12,098
Intangible assets	41,000		52,947
Total assets	126,440		163,284
Accounts payable and accrued expenses	21,214		27,396
Deferred income tax liabilities, net	6,876		8,880
Deferred items-grants from outside parties	601		776
Net assets	£	97,749	$	126,232

The $52.9 million of intangible assets relate to amortizable operational rights with contractual terms spanning up to 50 years and a weighted average amortization period of 33 years. The $12.1 million of goodwill will not be deductible for tax purposes.

Continental Europe Intermodal Business: During 2016, the Company explored ways to enhance the long-term viability of ERS Railways B.V. (ERS), the Continental Europe intermodal business Freightliner acquired from Maersk, which the Company acquired in 2015 with the Freightliner acquisition. Due to its limited history of profitability and competitive dynamics in the market in which it operates, the Company ascribed little value to it at the time of acquisition.

Despite a significant and focused effort by the Company, the performance of ERS reached unsustainable levels during 2016 and a restructuring plan was initiated. In conjunction with that plan, in 2017, the Company ceased all "open" train services from the port of Rotterdam, closed the ERS offices in Rotterdam and Frankfurt and the ERS customer services function in Warsaw. The Company is in the process of redistributing ERS’s leased locomotives and railcars, which have lease termination dates ranging from 2017 to 2019. These steps will enable the Company to focus on the deep sea intermodal sector. The Company's subsidiary, Rotterdam Rail Feeding B.V., will continue its existing services and not be affected by the restructuring of ERS.

As a result of the ERS restructuring plan, the Company recorded impairment and related charges of $21.5 million in December 2016. These charges primarily included $14.5 million for an impairment of goodwill and $4.1 million for an impairment of a customer-related intangible asset, which were both recorded to net (gain)/loss on sale and impairment of assets within operating expenses, which represented the entire carrying value of these assets. For the nine months ended September 30, 2017, the Company recorded $5.2 million of restructuring costs related to ERS, primarily for severance costs and costs associated with surplus locomotive and railcar leases.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

3. EARNINGS PER COMMON SHARE:

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Numerator:
Net income attributable to Genesee & Wyoming Inc.	$	50,240	$	56,785	$	122,485	$	132,203
Denominators:
Weighted average Class A common shares outstanding – Basic	61,629		57,266		61,518		57,160
Weighted average Class B common shares outstanding	723		793		743		793
Dilutive effect of employee stock-based awards	125		121		138		130
Weighted average shares – Diluted	62,477		58,180		62,399		58,083
Earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:
Basic earnings per common share	$	0.82	$	0.99	$	1.99	$	2.31
Diluted earnings per common share	$	0.80	$	0.98	$	1.96	$	2.28

The Company's weighted average basic shares outstanding for the three and nine months ended September 30, 2017 included 4,000,000 shares as a result of the Company's public offering of Class A Common Stock on December 13, 2016.

The following total number of shares of Class A Common Stock issuable under the assumed exercise of stock-based awards 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 antidilutive (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Antidilutive shares	1,245	1,174	1,302	1,292

4. ACCOUNTS RECEIVABLE:

Accounts receivable consisted of the following as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017			December 31, 2016
Accounts receivable – trade	$	407,305		$	353,347
Accounts receivable – grants from outside parties	12,178			10,652
Accounts receivable – insurance and other third-party claims	9,302			11,994
Total accounts receivable	428,785			375,993
Less: Allowance for doubtful accounts	(12,983		)	(12,070		)
Accounts receivable, net	$	415,802		$	363,923

The Company's trade accounts receivable balance as of September 30, 2017 included $27.3 million from the newly acquired Pentalver business. See Note 2, Changes in Operations, for additional information regarding the Pentalver acquisition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Grants from Outside Parties

The Company periodically receives grants for the upgrade and construction of rail lines and the upgrade of locomotives from federal, provincial, state and local agencies in the United States and provinces in Canada in which the Company operates. These grants typically reimburse the Company for 50% to 100% of the actual cost of specific projects. In total, the Company received grant proceeds of $16.0 million and $30.0 million for the nine months ended September 30, 2017 and 2016, respectively, from such grant programs. The proceeds were presented as cash inflows from investing activities within each of the applicable periods.

None of the Company's grants represent a future liability of the Company unless the Company abandons the rehabilitated or new track structure within a specified period of time or fails to maintain the upgraded or new track to certain standards, fails to make certain minimum capital improvements or ceases use of the locomotives within the specified geographic area and time period, or fails to comply with other grant provisions in each case, as set forth in the applicable grant agreement. As the Company intends to comply with the requirements of these agreements, the Company has recorded additions to track property and locomotives and has deferred the amount of the grants. The amortization of deferred grants is a non-cash offset to depreciation expense over the useful lives of the related assets.

The following table sets forth the offset to depreciation expense from the amortization of deferred grants recorded by the Company during the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Amortization of deferred grants	$	2,978	$	4,652	$	9,287	$	10,513

Insurance and Third-Party Claims

Accounts receivable from insurance and other third-party claims as of September 30, 2017 included $4.5 million from the Company's North American Operations, $4.4 million from the Company's U.K./European Operations and $0.4 million from the Company's Australian Operations. The balance from the Company's North American Operations resulted predominately from the Company's anticipated insurance recoveries associated with a 2015 trestle fire in the United States and derailments in Canada. The balance from the Company's U.K./European Operations resulted primarily from the Company's anticipated insurance recoveries associated with a pre-acquisition rail-related collision in Germany in 2014. The Company received proceeds from insurance totaling $1.4 million and $10.3 million for the nine months ended September 30, 2017 and 2016, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

5. GOODWILL:

The changes in the carrying amount of goodwill for the nine months ended September 30, 2017 and for the year ended December 31, 2016 were as follows (dollars in thousands):

	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Balance as of January 1, 2017:
Goodwill, gross	$	632,937	$	339,865	$	167,276		$	1,140,078
Accumulated impairment losses	—		—		(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865	$	152,794		$	1,125,596
Changes during the period:
Goodwill acquired	4,083		—		11,849			15,932
Acquisition accounting adjustments	42		—		—			42
Currency translation adjustment	1,690		28,772		15,157			45,619
Balance as of September 30, 2017:
Goodwill, gross	$	638,752	$	368,637	$	194,282		$	1,201,671
Accumulated impairment losses	—		—		(14,482		)	(14,482		)
Goodwill	$	638,752	$	368,637	$	179,800		$	1,187,189

	North American Operations		Australian Operations			U.K./European Operations			Total Operations
Balance as of January 1, 2016	$	605,234	$	39,312		$	182,029		$	826,575
Changes during the period:
Goodwill acquired	26,969		308,267			—			335,236
Acquisition accounting adjustments	176		168			9,736			10,080
Goodwill impairment	—		—			(14,482		)	(14,482		)
Currency translation adjustment	558		(7,882		)	(24,489		)	(31,813		)
Balance as of December 31, 2016:
Goodwill, gross	$	632,937	$	339,865		$	167,276		$	1,140,078
Accumulated impairment losses	—		—			(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865		$	152,794		$	1,125,596

The acquired goodwill for the nine months ended September 30, 2017 was related to the acquisitions of Pentalver in our U.K./European Operations segment and HOG in our North American Operations segment. The acquired goodwill for the year ended December 31, 2016 was related to the acquisitions of P&W in our North American Operations segment and GRail in our Australian Operations segment. See Note 2, Changes in Operations, for additional information regarding the P&W, GRail, Pentalver and HOG acquisitions.

The goodwill impairment recorded for the year ended December 31, 2016 resulted from the write-off of goodwill ascribed to the Company's ERS business within its U.K./European Operations segment. See Note 2, Changes in Operations, for additional information regarding ERS.

6. LONG-TERM DEBT:

Credit Agreement

The Company made scheduled quarterly principal payments under its Credit Agreement of $5.2 million on its United States term loan and £3.8 million (or $4.9 million at the exchange rate on the dates the payments were made) on its U.K. term loan during the nine months ended September 30, 2017. During the nine months ended September 30, 2017, the Company also made prepayments on its United States term loan of $159.8 million. Since the Company applied all of its prepayments on the term loan to its quarterly installments, the Company's remaining principal balance of $1.3 billion will be due at maturity on March 31, 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The British pound-denominated term loans began to amortize in quarterly installments during the three months ended September 30, 2016, with the remaining principal balance payable upon maturity, as set forth below (amounts in thousands):

	Quarterly Payment Date	Principal Amount Due on Each Payment Date
British pound:	December 31, 2017 through June 30, 2018	£	1,271
	September 30, 2018 through December 31, 2019	£	2,542
	Maturity date - March 31, 2020	£	75,532

As of September 30, 2017, the Company had the following outstanding term loans under its Credit Agreement (amounts in thousands, except percentages):

	Local Currency		United States Dollar Equivalent		Interest Rate
United States dollar	$	1,263,000	$	1,263,000	2.99	%
British pound	£	94,597	$	126,694	2.00	%

The Company's availability to draw from the unused borrowing capacity is subject to covenant limitations. As of September 30, 2017, the Company had the following unused borrowing capacity under its revolving credit facility (dollars in thousands):

	2017
Total available borrowing capacity	$	625,000
Outstanding revolving loans	$	225,960
Outstanding letter of credit guarantees	$	2,747
Unused borrowing capacity	$	396,293

As of September 30, 2017, the Company had the following outstanding revolving loans under its revolving credit facility (amounts in thousands, except percentages):

	Local Currency		United States Dollar Equivalent		Interest Rate
British pound (swingline loan)	£	5,500	$	7,366	1.97	%
British pound	£	134,000	$	179,466	2.00	%
Canadian dollar	C$	7,000	$	5,608	3.07	%
Euro	€	28,400	$	33,520	1.75	%

As of September 30, 2017, the Company was in compliance with the covenants under the Credit Agreement, as amended.

7. 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 these risks. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use derivative 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, other assets, accrued expenses or other long-term liabilities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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/(loss) 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 inception of the hedge 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 period in which it no longer qualifies for hedge accounting.

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 using hedge accounting are recognized in current period earnings within other income/(loss), net. Derivative instruments entered into in conjunction with contemplated acquisitions also do not qualify as hedges for accounting purposes.

Interest Rate Risk Management

The Company uses interest rate swap agreements to manage its exposure to the changes in interest rates on 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.

The following table summarizes the terms of the Company's outstanding interest rate swap agreements entered into to manage the Company's exposure to changes in interest rates on its variable rate debt (amounts in thousands):

		Notional Amount
Effective Date	Expiration Date	Date	Amount		Pay Fixed Rate	Receive Variable Rate
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.76%	1-month LIBOR
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.74%	1-month LIBOR
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.73%	1-month LIBOR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	55,373	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	55,373	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	34,155	2.44%	AUD-BBR

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

On November 9, 2012, the Company entered into multiple 10-year forward starting interest rate swap agreements to manage the exposure to changes in interest rates on the Company's variable rate debt. On September 30, 2016, the Company amended its forward starting swaps, which included moving the mandatory settlement date from September 30, 2016 to September 30, 2026, changing from 3-month LIBOR to 1-month LIBOR and adjusting the fixed rate. The amended forward starting swaps continue to qualify for hedge accounting. In addition, it remains probable that the Company will either issue $300.0 million of fixed-rate debt or have $300.0 million of variable-rate debt under the Company's commercial banking lines throughout the term of the outstanding swap agreements. The Company expects to amortize any gains or losses on the settlements over the life of the respective swap.

The fair values of the Company's interest rate swap agreements were estimated based on Level 2 inputs. The Company's effectiveness testing during the three and nine months ended September 30, 2017 and 2016 resulted in no amount of gain or loss reclassified from accumulated other comprehensive loss into earnings due to ineffectiveness. During the three and nine months ended September 30, 2017, $0.6 million and $1.5 million, respectively, of existing net losses were realized and recorded as interest expense in the consolidated statements of operations. During the three and nine months ended September 30, 2016, $0.4 million and $1.1 million, respectively, of existing net losses were realized and recorded as interest expense in the consolidated statements of operations. Based on the Company's fair value assumptions as of September 30, 2017, it expects to realize $2.0 million of existing net losses that are reported in accumulated other comprehensive loss into earnings within the next 12 months. See Note 12, Accumulated Other Comprehensive Loss, for additional information regarding the Company's cash flow hedges.

Foreign Currency Exchange Rate Risk

As of September 30, 2017, the Company's foreign subsidiaries had $1.1 billion of third-party debt, including capital leases, denominated in the local currencies in which the Company's foreign subsidiaries operate, including the Australian dollar, the British pound, the Canadian dollar and the Euro. The debt service obligations associated with this foreign currency debt are generally funded directly from those foreign 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 by the Company's foreign subsidiaries and is paid by its United States subsidiaries, the Company may face exchange rate risk if the Australian dollar, the British pound, the Canadian dollar or the 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, including non-functional currency intercompany debt, typically associated with acquisitions and any timing difference between announcement and closing of an acquisition of a foreign business. To mitigate currency exposures of non-United States dollar-denominated acquisitions, the Company may enter into foreign currency forward purchase contracts. To mitigate currency exposures related to non-functional currency denominated intercompany debt, cross-currency swaps or foreign currency forward 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. However, cross-currency swap contracts and foreign currency forward contracts used to mitigate exposures on foreign currency intercompany debt may not qualify for hedge accounting. In cases where the cross-currency swap contracts and foreign currency forward 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 do not qualify for hedge accounting are recognized in current period earnings within other income/(loss), net.

On March 25, 2015, the Company closed on the Freightliner acquisition and paid cash consideration of £492.1 million (or $733.0 million at the exchange rate on March 25, 2015). The Company financed the acquisition through a combination of available cash and borrowings under the Company's Credit Agreement. A portion of the funds were transferred from the United States to the U.K. through an intercompany loan with a notional amount of £120.0 million (or $181.0 million at the exchange rate on the effective date of the loan) and accrued interest as of September 30, 2017 of £19.6 million (or $26.2 million at the exchange rate on September 30, 2017), each of which are expected to remain until maturity of the loan. To mitigate the foreign currency exchange rate risk related to this non-functional currency intercompany loan and the related interest, the Company entered into British pound forward contracts, which are accounted for as cash flow hedges.

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GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The fair values of the Company's British pound forward contracts were estimated based on Level 2 inputs. The Company's effectiveness testing during the three and nine months ended September 30, 2017 and 2016 resulted in no amount of gain or loss reclassified from accumulated other comprehensive loss into earnings due to ineffectiveness. During the three and nine months ended September 30, 2017, $0.1 million and $0.4 million, respectively, of net gains were recorded as interest income in the consolidated statements of operations. During the three and nine months ended September 30, 2016, $0.3 million and $0.5 million, respectively, of net gains were recorded as interest income in the consolidated statements of operations. Based on the Company's fair value assumptions as of September 30, 2017, it expects to realize $0.6 million of existing net gains that are reported in accumulated other comprehensive loss into earnings within the next 12 months. See Note 12, Accumulated Other Comprehensive Loss, for additional information regarding the Company's cash flow hedges.

The following table summarizes the Company's outstanding British pound forward contracts (British pounds in thousands):

Effective Date	Settlement Date	Notional Amount	Exchange Rate
3/25/2015	3/31/2020	£60,000	1.51
3/25/2015	3/31/2020	£60,000	1.50
6/30/2015	3/31/2020	£2,035	1.57
9/30/2015	3/31/2020	£1,846	1.51
12/31/2015	3/31/2020	£1,873	1.48
3/31/2016	3/31/2020	£1,881	1.45
6/30/2016	3/31/2020	£1,909	1.35
9/30/2016	3/31/2020	£1,959	1.33
12/30/2016	3/31/2020	£1,989	1.28
3/31/2017	3/31/2020	£1,975	1.30
6/30/2017	3/31/2020	£2,026	1.34
10/2/2017	3/31/2020	£2,079	1.36

On December 1, 2016, GWAHLP and the Company's subsidiary, GWI Holding B.V. (GWBV), entered into an A$248.9 million non-recourse subordinated partner loan agreement (GRail Intercompany Loan), which is eliminated in consolidation. GWBV used the proceeds from this loan to fund a portion of the acquisition of GRail. To mitigate the foreign currency exchange rate risk related to the non-functional currency intercompany loan, the Company entered into two Euro/Australian dollar floating-to-floating cross-currency swap agreements (the Swaps) on December 22, 2016, which effectively convert the A$248.9 million intercompany loan receivable in the Netherlands into a €171.7 million loan receivable. These agreements do not qualify as hedges for accounting purposes and, accordingly, mark-to-market changes in the fair value of the Swaps relative to the underlying GRail Intercompany Loan will be recorded over the life of the agreements, which expire on June 30, 2019. The first swap requires the Company to pay Australian dollar BBR plus 4.50% based on a notional amount of A$123.9 million and allows the Company to receive EURIBOR plus 2.68% based on a notional amount of €85.5 million on a semi-annual basis. EURIBOR is the Euro Interbank Offered Rate, which the Company believes is generally considered the Euro equivalent to LIBOR. The second swap requires the Company to pay Australian dollar BBR plus 4.50% based on a notional amount of A$125.0 million and allows the Company to receive EURIBOR plus 2.90% based on a notional amount of €86.3 million on a semi-annual basis. The Swaps require semi-annual net settlement payments beginning on December 31, 2017. The Company realized a net expense of $1.9 million within interest expense for the three and nine months ended September 30, 2017, associated with the Swaps. As a result of the mark-to-market impact of the GRail Intercompany Loan compared to the mark-to-market of the Swaps, the Company realized a net expense of $0.8 million and $4.5 million within other (loss)/income, net for the three and nine months ended September 30, 2017, respectively. Over the life of the Swaps, the Company expects the cumulative impact of net gains and losses from the mark-to-market of the GRail Intercompany Loan and Swaps to be approximately zero.

20

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table summarizes the fair value of the Company's derivative instruments recorded in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (dollars in thousands):

		Fair Value
	Balance Sheet Location	September 30, 2017		December 31, 2016
Asset Derivatives:
Derivatives designated as hedges:
British pound forward contracts	Other assets	$	16,017	$	26,359
Total derivatives designated as hedges		$	16,017	$	26,359
Derivatives not designated as hedges:
Cross-currency swap contract	Prepaid expenses and other	$	1,259	$	174
Cross-currency swap contract	Other assets	944		506
Total derivatives not designated as hedges		$	2,203	$	680
Liability Derivatives:
Derivatives designated as hedges:
Interest rate swap agreements	Accrued expenses	$	2,005	$	1,747
Interest rate swap agreements	Other long-term liabilities	15,425		13,411
British pound forward contracts	Other long-term liabilities	568		17
Total derivatives designated as hedges		$	17,998	$	15,175

The change in the British pound forward contracts was primarily driven by the change in the foreign currency exchange rates during the period.

The following table shows the effect of the Company's derivative instruments designated as cash flow hedges for the three and nine months ended September 30, 2017 and 2016 in other comprehensive income (OCI) (dollars in thousands):

	Total Cash Flow Hedge OCI Activity, Net of Tax
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
Derivatives Designated as Cash Flow Hedges:
Effective portion of net changes in fair value recognized in OCI, net of tax:
Interest rate swap agreements	$	388	$	(1,414	)	$	(1,382	)	$	(15,780	)
British pound forward contracts, net (a)	348		(713		)	2,020			(2,584		)
	$	736	$	(2,127	)	$	638		$	(18,364	)

(a) The three and nine months ended September 30, 2017 represents a net gain of $3.2 million and $8.6 million, respectively, for the mark-to-market of the U.K. intercompany loan, partially offset by a net loss of $2.8 million and $6.6 million, respectively, for the mark-to-market of the British pound forward contracts. The three and nine months ended September 30, 2016 represents a net loss of $2.3 million and $13.7 million, respectively, for the mark-to-market of the U.K. intercompany loan, partially offset by a net gain of $1.6 million and $11.1 million, respectively, for the mark-to-market of the British pound forward contracts.

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GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table shows the effect of the Company's derivative instruments not designated as hedges for the three and nine months ended September 30, 2017 and 2016 in the consolidated statements of operations (dollars in thousands):

		Amount Recognized in Earnings
		Three Months Ended					Nine Months Ended
	Location of Amount Recognized in Earnings	September 30,					September 30,
		2017			2016		2017			2016
Derivative Instruments Not Designated as Hedges:
Cross-currency swap agreements	Interest expense	$	(1,887	)	$	—	$	(1,887	)	$	—
Cross-currency swap agreements, net (a)	Other income/(loss), net	(842		)	—		(4,510		)	—
		$	(2,729	)	$	—	$	(6,397	)	$	—

(a) The three months ended September 30, 2017 represents a net gain of $1.7 million for the mark-to-market of the Swaps, partially offset by a net loss of $2.5 million for the mark-to-market of the GRail Intercompany Loan. The nine months ended September 30, 2017 represents a net gain of $2.0 million for the mark-to-market of the Swaps and a net loss of $6.5 million for the mark-to-market of the GRail Intercompany Loan.

8. FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company applies the following three-level hierarchy of valuation inputs for measuring fair value:

• Level 1 - Quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.

• Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data.

• Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

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

Financial Instruments Carried at Fair Value: Derivative instruments are recorded on the consolidated balance sheets as either assets or liabilities measured at fair value. During the reporting period, the Company's derivative financial instruments consisted of interest rate swap agreements, foreign currency forward contracts and cross-currency swap agreements. The Company estimated the fair value of its interest rate swap agreements based on Level 2 valuation inputs, including fixed interest rates, LIBOR and BBR implied forward interest rates and the remaining time to maturity. The Company estimated the fair value of its British pound forward contracts based on Level 2 valuation inputs, including LIBOR implied forward interest rates, British pound LIBOR implied forward interest rates and the remaining time to maturity. The Company estimated the fair value of its cross-currency swap agreements based on Level 2 valuation inputs, including EURIBOR implied forward interest rates, BBR implied forward interest rates and the remaining time to maturity.

The Company's recurring fair value measurements using significant unobservable inputs (Level 3) relate to the Company's deferred consideration from the Freightliner acquisition in 2015 and from the HOG acquisition in 2017. The fair value of the deferred consideration liabilities were estimated by discounting, to present value, contingent payments expected to be made.

Financial Instruments Carried at Historical Cost: Since the Company's long-term debt is not actively traded, 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.

22

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table presents the Company's financial instruments carried at fair value using Level 2 inputs as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017		December 31, 2016
Financial instruments carried at fair value using Level 2 inputs:
Financial assets carried at fair value:
British pound forward contracts	$	16,017	$	26,359
Cross-currency swap contracts	2,203		680
Total financial assets carried at fair value	$	18,220	$	27,039
Financial liabilities carried at fair value:
Interest rate swap agreements	$	17,430	$	15,158
British pound forward contracts	568		17
Total financial liabilities carried at fair value	$	17,998	$	15,175

The following table presents the Company's financial instruments carried at fair value using Level 3 inputs as of September 30, 2017 and December 31, 2016 (amounts in thousands):

	September 30, 2017				December 31, 2016
	Local Currency		United States Dollar Equivalent		Local Currency		United States Dollar Equivalent
Financial instrument carried at fair value using Level 3 inputs:
Financial liabilities carried at fair value:
Accrued deferred consideration - Freightliner	£	27,755	$	37,172	£	25,882	$	31,933
Accrued deferred consideration - HOG	$	5,842	$	5,842	$	—	$	—

At the date of acquisition of Freightliner in 2015, the contingent liability represented the aggregate fair value of the shares transferred to the Company by the Management Shareholders in exchange for the right to receive cash consideration for the representative economic interest of approximately 6% in Freightliner in the future (deferred consideration). Each of the Management Shareholders may elect to receive one third of their respective deferred consideration valued as of March 31, 2018, 2019 and 2020. The remaining portion of the deferred consideration will be valued as of March 31, 2020 and paid by the end of 2020.

At the date of acquisition of HOG in 2017, the contingent liability represented the fair value of the deferred consideration payable to the sellers upon satisfaction of certain conditions, which the Company expects to be paid in 2021. See Note 2, Changes in Operations, for additional information regarding HOG.

The Company's contingent liabilities are adjusted each period to represent the fair value of the deferred consideration as of the balance sheet date. To do so, the Company recalculates the estimated fair value of the deferred consideration in each reporting period until it is paid in full by using a contractual formula designed to estimate the economic value of the Management Shareholders' retained interest in a manner consistent with that used to derive the Freightliner acquisition price per share on the acquisition date. In addition, the Company recalculates the HOG's deferred consideration based on the contractual formula as defined in the stock purchase agreement. These calculations effectively represent the present value of the expected payment to be made upon settlement of the deferred consideration. Accordingly, such recalculations will reflect both the impact of the time value of money and the impact of changes in the expected future performance of the acquired business, as applicable. The Company expects to recognize future changes in the contingent liabilities for the estimated fair value of the deferred consideration through other expenses within the Company's consolidated statement of operations. These future changes in the estimated fair value of the deferred consideration are not expected to be deductible for tax purposes.

23

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table presents the amounts recognized, through other expenses, within the Company's consolidated statements of operations during the three and nine months ended September 30, 2017 and 2016 as a result of the change in the estimated fair value of the deferred consideration, which primarily represented the time value of money (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Freightliner	$	859	$	933	$	2,405	$	2,015
HOG	$	126	$	—	$	166	$	—

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 September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities carried at historical cost:
United States term loan	$	1,253,776	$	1,259,935	$	1,415,873	$	1,422,512
U.K. term loan	124,859		127,114		121,149		121,594
Australian Credit Agreement	517,696		534,317		484,703		501,909
Partner Loan Agreement	186,729		187,999		172,154		171,435
Revolving credit facility	222,093		227,103		74,297		81,192
Other debt	2,900		2,918		4,882		4,889
Total	$	2,308,053	$	2,339,386	$	2,273,058	$	2,303,531

9. U.K. PENSION PLAN:

In connection with the acquisition of Freightliner, the Company assumed a defined benefit pension plan for its U.K. employees through a standalone shared cost arrangement within the Railways Pension Scheme (Pension Program). The Pension Program is managed and administered by a professional pension administration company and is overseen by trustees with professional advice from independent actuaries and other advisers. The Pension Program is a shared cost arrangement with required contributions shared between Freightliner and its employees, with Freightliner contributing 60% and the remaining 40% contributed by active employees. The Company engages independent actuaries to compute the amounts of liabilities and expenses relating to the Pension Program subject to the assumptions that the Company selects.

The following tables summarize the components of the Pension Program related to the net benefit costs recognized in labor and benefits in the Company's consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands):

	Three Months Ended September 30,
	2017						2016
	GBP			USD			GBP			USD
Service cost	£	2,988		$	3,909		£	2,394		$	3,143
Interest cost	1,978			2,588			2,227			2,923
Expected return on plan assets	(3,307		)	(4,327		)	(2,846		)	(3,737		)
Net periodic benefit cost	£	1,659		$	2,170		£	1,775		$	2,329

24

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

	Nine Months Ended September 30,
	2017						2016
	GBP			USD			GBP			USD
Service cost	£	8,964		$	11,434		£	7,182		$	10,006
Interest cost	5,934			7,569			6,681			9,308
Expected return on plan assets	(9,921		)	(12,655		)	(8,538		)	(11,896		)
Net periodic benefit cost	£	4,977		$	6,348		£	5,325		$	7,418

During the nine months ended September 30, 2017, the Company contributed £4.5 million (or $6.0 million at the September 30, 2017 exchange rate) to fund the Pension Program. The Company expects to contribute £2.6 million (or $3.5 million at the September 30, 2017 exchange rate) to the Pension Program for the remainder of 2017. The Pension Program's assets may undergo significant changes over time as a result of market conditions, and its assets and liabilities are formally valued on an independent actuarial basis every three years to assess the adequacy of funding levels. A key element of the valuation process is an assessment of the creditworthiness of the participating employer. This valuation process is currently underway for the three year period that ended December 31, 2016. In the event that the Pension Program's projected assets and liabilities reveal additional funding requirements, the shared cost arrangement generally means that the Company will be required to pay 60% of any additional contributions, with active members contributing the remaining 40%, in each case over an agreed recovery period. If the Pension Program was to be terminated and wound up, any deficit would fall entirely on the Company and could not be shared with active members. Currently, the Company has no intention of terminating the Pension Program.

10. INCOME TAXES:

The Company's effective income tax rate for the three months ended September 30, 2017 was 36.4%, compared with 25.7% for the three months ended September 30, 2016. The Company's effective income tax rate for the nine months ended September 30, 2017 was 38.9%, compared with 29.2% for the nine months ended September 30, 2016. The higher effective income tax rate for the three and nine months ended September 30, 2017 was primarily driven by an income tax benefit of $7.8 million and $21.4 million recorded in the three and nine months ended September 30, 2016, respectively, associated with the now expired United States Short Line Tax Credit. The three and nine months ended September 30, 2017 also included the recognition of $3.3 million of previously unrecognized tax benefits resulting from the lapse of the statute of limitations on acquired liabilities for uncertain tax positions and tax provisions of $1.4 million and $1.3 million, respectively, related to enacted state income tax rate changes.

The Company's provision for income taxes for the three and nine months ended September 30, 2016 included a $4.3 million income tax benefit as a result of the Company remeasuring its deferred income tax assets and liabilities in the U.K. based on the enacted change to the corporate income tax rate by the U.K. government that will apply when the temporary differences are expected to be realized or settled. The Company's provision for income taxes for the nine months ended September 30, 2016 included the recording of a valuation allowance of A$2.6 million (or $2.0 million at the average exchange rate in March of 2016) associated with the impairment of GWA's now idle rolling-stock maintenance facility that was formerly used in connection with the Southern Iron rail haulage agreement with Arrium (see Note 2, Changes in Operations).

The United States Short Line Tax Credit is an income tax track maintenance credit for Class II and Class III railroads to reduce their federal income tax based on qualified railroad track maintenance expenditures. Qualified expenditures include amounts incurred for maintaining track, including roadbed, bridges and related track structures owned or leased by a Class II or Class III railroad. The credit is equal to 50% of the qualified expenditures, subject to an annual limitation of $3,500 multiplied by the number of miles of railroad track owned or leased by the Class II or Class III railroad as of the end of its tax year. The United States Short Line Tax Credit was initially enacted for a three year period, 2005 through 2007, and subsequently extended on a retroactive basis. This pattern was repeated a series of times, with the last extension expiring on December 31, 2016.

25

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

11. COMMITMENTS AND CONTINGENCIES:

From time to time, the Company is a defendant in certain lawsuits resulting from the Company's operations in the ordinary course as the nature of the Company's business exposes it to the potential for various claims and litigation, including those related to property damage, personal injury, freight loss, labor and employment, environmental and other matters. The Company maintains insurance policies to mitigate the financial risk associated with such claims. However, any material changes to pending litigation or a catastrophic rail accident or series of accidents involving material freight loss or property damage, personal injuries or environmental liability or other claims or disputes that are not covered by insurance could have a material adverse effect on the Company's results of operations, financial condition and liquidity.

In November 2014, the Company received a notice from the United States Environmental Protection Agency (EPA) requesting information under the Clean Water Act related to the discharge of crude oil as a result of a derailment of an Alabama & Gulf Coast Railway LLC (AGR) freight train in November 2013 in the vicinity of Aliceville, Alabama. A fine associated with the contamination has not yet been assessed and is not estimable.

The Company is also involved in several arbitrations related to contractual disputes that are not covered by insurance. In March 2017, CSX Transportation, Inc. (CSXT) initiated arbitration against several of the Company’s subsidiaries associated with freight revenue factors (or divisions) under certain operating agreements associated with leased railroads. CSXT is seeking to reduce certain of the Company's freight revenue factors for the time period after August 21, 2016. The Company believes it has meritorious defenses against the CSXT claims. In an unrelated matter, on May 3, 2017, the AGR initiated arbitration related to the collection of approximately $13 million of outstanding liquidated damages under a volume commitment (or take-or-pay) contract with a customer. The Company believes it will prevail in the collection of the outstanding liquidated damages. Although the Company expects to attain successful outcomes in each of these matters, arbitration is inherently uncertain and it is possible that an unfavorable ruling could have an adverse effect on the Company's results of operations, financial condition and liquidity.

Management believes there are adequate provisions in the financial statements for any probable liabilities that may result from disposition of the pending lawsuits and the aforementioned arbitrations. Based upon currently available information, the Company does not believe it is reasonably possible that any such lawsuit or arbitration would be material to the Company's results of operations or have a material adverse effect on the Company's financial position or liquidity.

26

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

12. ACCUMULATED OTHER COMPREHENSIVE LOSS:

The following tables set forth the components of accumulated other comprehensive loss attributable to Genesee & Wyoming Inc. included in the consolidated balance sheets and consolidated statements of comprehensive income (dollars in thousands):

	Foreign Currency Translation Adjustment			Defined Benefit Plans				Net Unrealized Gain/(Loss) on Cash Flow Hedges				Accumulated Other Comprehensive Loss
Balance, December 31, 2016	$	(177,662	)	$	(19,948	)		$	(13,726	)		$	(211,336	)
Other comprehensive income/(loss) before reclassifications	81,412			(2,262		)		(7,003		)		72,147
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision) of ($60) and ($5,347), respectively	—			113			(a)	7,937			(b)	8,050
Current period change	81,412			(2,149		)		934				80,197
Balance, September 30, 2017	$	(96,250	)	$	(22,097	)		$	(12,792	)		$	(131,139	)

	Foreign Currency Translation Adjustment			Defined Benefit Plans			Net Unrealized Gain/(Loss) on Cash Flow Hedges				Accumulated Other Comprehensive Loss
Balance, December 31, 2015	$	(156,146	)	$	11,005		$	(8,316	)		$	(153,457	)
Other comprehensive income/(loss) before reclassifications	3,618			4,305			(4,349		)		3,574
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit of ($37) and $9,343 respectively	—			67		(a)	(14,015		)	(b)	(13,948		)
Current period change	3,618			4,372			(18,364		)		(10,374		)
Balance, September 30, 2016	$	(152,528	)	$	15,377		$	(26,680	)		$	(163,831	)

(a) Existing net gains realized were recorded in labor and benefits on the consolidated statements of operations.

(b) Existing net gains/(losses) realized were recorded in interest expense on the consolidated statements of operations (see Note 7, Derivative Financial Instruments).

Comprehensive Income Attributable to Noncontrolling Interest

As discussed in Note 2, Changes in Operations, the Company began presenting noncontrolling interest as a result of the GRail transaction on December 1, 2016. The following table sets forth comprehensive income attributable to noncontrolling interest for the three and nine months ended September 30, 2017 (dollars in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017
Net income attributable to noncontrolling interest	$	3,145	$	6,317
Other comprehensive income/(loss):
Foreign currency translation adjustment	4,972		18,642
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($164) and $127, respectively	383		(296		)
Comprehensive income attributable to noncontrolling interest	$	8,500	$	24,663

27

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

13. STOCKHOLDERS' EQUITY:

The following table reconciles the beginning and end of the period equity balance attributable to Genesee & Wyoming Inc. and to noncontrolling interest (dollars in thousands):

	Genesee & Wyoming Inc. Stockholders' Equity			Noncontrolling Interest			Total Equity
Balance, December 31, 2016	$	2,894,582		$	292,539		$	3,187,121
Net income	122,485			6,317			128,802
Other comprehensive income	80,197			18,346			98,543
Additional paid-in capital from stock-based compensation awards	22,050			—			22,050
Treasury stock purchases	(3,275		)	—			(3,275		)
Other	444			(6		)	438
Balance, September 30, 2017	$	3,116,483		$	317,196		$	3,433,679

14. SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:

As of September 30, 2017 and 2016, the Company had outstanding accounts receivable from outside parties for the funding of capital expenditures of $12.2 million and $10.8 million, respectively. As of September 30, 2017 and 2016, the Company also had $12.3 million and $14.9 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.

15. SEGMENT INFORMATION:

The Company presents the financial results of its nine operating regions as three reportable segments: North American Operations, Australian Operations and U.K./European Operations. The Company owns a 51.1% controlling interest in the Australian Operations. As such, the Company includes 100% of the revenues and expenses from its Australian Operations within its consolidated financial statements and reports a noncontrolling interest for MIRA’s 48.9% equity ownership. Each of the Company's segments generates the following three categories of revenues from external customers: freight revenues, freight-related revenues and all other revenues. The Company's seven North American regions are aggregated into one reportable segment as a result of having similar economic and operating characteristics. During the third quarter of 2017, the Company's Mountain West Region railroads were consolidated into the Company's Central and Pacific regions, and the Pacific Region was renamed the Western Region. This consolidation reduced the Company's number of operating regions from ten to nine.

The results of operations of the Company's foreign entities are maintained in the respective local currency (the Australian dollar, the British pound, 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 the Company's results of operations.

28

GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following tables reflect the balance sheet exchange rates as of September 30, 2017 and December 31, 2016 and the average exchange rates for the three and nine months ended September 30, 2017 and 2016 used to translate the foreign entities respective local currency balance sheet and results of operations into United States dollars for the respective period:

					September 30, 2017		December 31, 2016
United States dollar per Australian dollar					$	0.78	$	0.72
United States dollar per British pound					$	1.34	$	1.23
United States dollar per Canadian dollar					$	0.80	$	0.74
United States dollar per Euro					$	1.18	$	1.06
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
United States dollar per Australian dollar	$	0.79	$	0.76	$	0.77	$	0.74
United States dollar per British pound	$	1.31	$	1.31	$	1.28	$	1.39
United States dollar per Canadian dollar	$	0.80	$	0.77	$	0.77	$	0.76
United States dollar per Euro	$	1.17	$	1.12	$	1.11	$	1.12

The following tables set forth select financial data for the Company's reportable segments for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Operating revenues:
Freight revenues	$	242,968	$	66,404	$	91,363	$	400,735
Freight-related revenues	60,286		12,880		67,757		140,923
All other revenues	15,673		1,986		17,610		35,269
Total operating revenues	$	318,927	$	81,270	$	176,730	$	576,927
Operating income	$	82,111	$	22,276	$	7,102	$	111,489
Depreciation and amortization	$	40,036	$	15,753	$	8,433	$	64,222
Interest expense, net	$	9,817	$	13,678	$	4,323	$	27,818
Provision for income taxes	$	28,270	$	2,013	$	224	$	30,507
Expenditures for additions to property & equipment, net of grants from outside parties	$	41,713	$	4,545	$	6,981	$	53,239

	Three Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	232,247	$	29,219	$	88,341		$	349,807
Freight-related revenues	62,124		23,523		43,873			129,520
All other revenues	15,823		1,408		4,444			21,675
Total operating revenues	$	310,194	$	54,150	$	136,658		$	501,002
Operating income	$	87,153	$	4,372	$	326		$	91,851
Depreciation and amortization	$	37,085	$	7,129	$	6,627		$	50,841
Interest expense, net	$	9,600	$	2,170	$	5,147		$	16,917
Provision for/(benefit from) income taxes	$	22,392	$	798	$	(3,547	)	$	19,643
Expenditures for additions to property & equipment, net of grants from outside parties	$	30,343	$	2,440	$	9,457		$	42,240

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GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

	Nine Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	719,622	$	191,031	$	250,982		$	1,161,635
Freight-related revenues	186,814		36,089		164,978			387,881
All other revenues	47,641		4,866		34,445			86,952
Total operating revenues	$	954,077	$	231,986	$	450,405		$	1,636,468
Operating income	$	229,267	$	59,685	$	1,331		$	290,283
Depreciation and amortization	$	117,822	$	45,915	$	22,772		$	186,509
Interest expense, net	$	29,928	$	41,500	$	7,732		$	79,160
Provision for/(benefit from) income taxes	$	78,133	$	4,805	$	(906	)	$	82,032
Expenditures for additions to property & equipment, net of grants from outside parties	$	105,940	$	9,721	$	17,446		$	133,107

	Nine Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	681,154	$	80,390	$	255,459		$	1,017,003
Freight-related revenues	184,627		76,142		135,897			396,666
All other revenues	48,766		4,699		17,859			71,324
Total operating revenues	$	914,547	$	161,231	$	409,215		$	1,484,993
Operating income/(loss)	$	236,154	$	2,002	$	(2,115	)	$	236,041
Depreciation and amortization	$	110,398	$	21,018	$	19,679		$	151,095
Interest expense, net	$	29,730	$	6,963	$	15,529		$	52,222
Provision for/(benefit from) income taxes	$	59,354	$	521	$	(5,312	)	$	54,563
Expenditures for additions to property & equipment, net of grants from outside parties	$	95,282	$	8,094	$	26,195		$	129,571

The following tables set forth select balance sheet data for the Company's reportable segments as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	7,158	$	47,989	$	25,130	$	80,277
Property and equipment, net	$	3,626,293	$	670,160	$	332,441	$	4,628,894

	December 31, 2016
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	10,137	$	9,213	$	12,969	$	32,319
Property and equipment, net	$	3,590,625	$	634,148	$	278,546	$	4,503,319

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GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

16. RECENTLY ISSUED ACCOUNTING STANDARDS:

Accounting Standards Not Yet Effective

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and includes the specific steps for recognizing revenue and disclosure requirements. In August 2015, the FASB issued ASU 2015-14, which approved a one-year deferral of the effective date of the new revenue recognition standard. In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, which provides clarification when identifying performance obligations and providing implementation guidance on licensing. In May 2016, the FASB issued ASU 2016-12, which clarifies the objective of the collectibility criterion. In December 2016, the FASB issued ASU 2016-20, which provides additional clarification on contract costs, modifications and disclosures.

These new standards will become effective for the Company on January 1, 2018, and the Company plans to adopt them using the modified retrospective basis, which will result in the cumulative effect of initially applying the standards being recognized as an adjustment to opening retained earnings at January 1, 2018. The Company is currently assessing the impact of adopting this guidance for its existing portfolio of open customer contracts and will continue to assess new contracts entered into prior to the adoption of the new standard. Under the new standard, the Company will continue to recognize freight revenue over time as shipments move from origin to destination, freight-related revenues and all other revenues will continue to be recognized as services are performed. For contracts that include variable consideration, the Company will be required to assess the variable consideration and recognize revenue based on estimates throughout the applicable periods. Based on its current assessment, the Company does not expect the adoption of this guidance to have a material change to its revenue recognition, although additional disclosures will be required to help users of the financial statements understand the nature, amount and timing of revenue and cash flows arising from the Company’s contracts with customers.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with subsequent changes in fair value recognized in net income. The amendments also impact certain disclosure requirements for financial instruments. The amendments will become effective for the Company beginning January 1, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will require lessees to recognize leases on their balance sheets as a right-of-use asset with a corresponding liability. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of 12 months or less. Additional qualitative and quantitative disclosures, including significant judgments made by management, will also be required. The new standard will become effective for the Company beginning January 1, 2019, and will require a modified retrospective transition approach resulting in the recognition of leases as of January 1, 2017 and the retrospective adjustment of the financial statements for 2017 and 2018 when presented for comparative purposes. Early application is permitted. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements. At December 31, 2016, the Company disclosed approximately $546 million in aggregate future minimum operating lease payments and will evaluate those contracts as well as other existing arrangements to determine whether a right-of-use asset or lease liability will need to be recognized under the new standard and will assess new contracts entered into prior to the adoption of the new standard. The Company does not plan to adopt the standard early.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which provides guidance on eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows. The amendments will become effective for the Company January 1, 2018. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated statements of cash flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which requires that a statement of cash flows explain the change during the period in total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The amendments will become effective for the Company beginning January 1, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated statements of cash flows.

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GENESEE & WYOMING INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments will become effective for the Company beginning January 1, 2018. The Company will take the amendments into consideration when assessing whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments will become effective for the Company beginning January 1, 2020. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of the net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside a subtotal of operating income, if one is presented. The amendments will become effective for the Company beginning January 1, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting, which provides guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments will become effective for the Company beginning January 1, 2018. The Company will apply this guidance to any further modifications of share-based payment awards.

In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, which expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments also include certain improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments will become effective for the Company beginning January 1, 2019. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

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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, related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our 2016 Annual Report on Form 10-K. When comparing our results of operations from one reporting period to another, it is important to consider that we have historically experienced fluctuations in revenues and expenses due to acquisitions, changing economic conditions, commodity prices, competitive forces, changes in foreign currency exchange rates, rail network congestion, one-time freight moves, fuel price fluctuations, customer plant expansions and shutdowns, sales of property and equipment, derailments and weather-related conditions, such as hurricanes, cyclones, tornadoes, high winds, droughts, heavy snowfall, unseasonably hot or cold weather, freezing and flooding, among other factors. In periods when these events occur, our 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, global commodity prices and foreign exchange rates, such as steel products, iron ore, paper products, lumber and forest products and agricultural products, as well as product specific market conditions, such as the availability of lower priced alternative sources of power generation (coal) and energy commodity price differentials (crude oil and natural gas liquids) or congestion at ports (intermodal). Other shipments are relatively less affected by economic conditions and are more closely affected by other factors, such as winter weather (salt) and seasonal rainfall (agricultural products). As a result of these and other factors, our results of operations in any reporting period may not be directly comparable to our results of operations in other reporting periods. When we discuss foreign exchange impact, we are referring to the change in our results due to the change in foreign currency exchange rates. We calculate foreign exchange impact by comparing the prior period results translated from local currency to United States dollars using current period exchange rates to the prior period results in United States dollars as reported. Constant currency, which is a non-GAAP measure, reflects the prior period results translated at the current period exchange rates. When we discuss results from existing operations or same railroad operations, we are referring to the change in our results, period-over-period, associated with operations that we managed in both periods (i.e., excluding the impact of acquisitions).

Overview

We own or lease 122 freight railroads organized in nine locally managed operating regions with 8,000 employees serving 3,000 customers. During the third quarter of 2017, our Mountain West Region railroads were consolidated into our Central and Pacific regions, and the Pacific Region was renamed the Western Region. This consolidation reduced our number of operating regions from ten to nine.

The financial results of our nine operating regions are reported in the following three reportable segments:

• North America Operations: Our seven North American regions serve 41 U.S. states and four Canadian provinces and include 115 short line and regional freight railroads with more than 13,000 track-miles.

• Australia Operations: Our Australia Region serves New South Wales, the Northern Territory, and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line. The Australia Region is 51.1% owned by us and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets (MIRA).

• U.K./Europe Operations: Our U.K./European Region includes the United Kingdom's (U.K.) largest rail maritime intermodal operator and the second-largest freight rail provider, as well as regional rail services in Continental Europe.

Our subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.

Impact of GRail Acquisition on our Financial Presentation

Our Australian business underwent a transformational change on December 1, 2016, with the acquisition of Glencore Rail (NSW) Pty Limited (GRail) and the formation of the Australia Partnership, which we control through our 51.1% interest. The GRail acquisition significantly expanded our operations in New South Wales. In conjunction with the GRail acquisition that closed on December 1, 2016, we issued a 48.9% equity stake in our Australian subsidiary, G&W Australia Holdings LP (GWAHLP) to MIRA. We retained a 51.1% controlling interest in GWAHLP and continue to consolidate 100% of our Australian Operations in our financial statements and report a noncontrolling interest for MIRA’s 48.9% equity ownership. As a result, our operating revenues and operating income for the three and nine months ended September 30, 2017 included 100% of our Australian business, while net income attributable to G&W reflects our 51.1% ownership position in our Australian business.

33

Prior to the GRail acquisition, our Australian subsidiary, Freightliner Australia Pty Ltd (FLA), provided rail operator services to GRail, which were recorded as freight-related revenues. These freight-related services continued post acquisition, but are now eliminated in consolidation. Revenues from the GRail acquisition are now included in G&W’s consolidated freight revenues from new operations.

Overview of Three-Month Results

Consolidated Results

Our operating revenues increased$75.9 million, or 15.2%, to $576.9 million for the three months ended September 30, 2017, compared with $501.0 million for the three months ended September 30, 2016. Operating income for the three months ended September 30, 2017 was $111.5 million, compared with $91.9 million for the three months ended September 30, 2016, an increase of $19.6 million, or 21.4%. Our operating ratio, defined as operating expenses divided by operating revenues, was 80.7% for the three months ended September 30, 2017, compared with 81.7% for the three months ended September 30, 2016.

Net income attributable to G&W for the three months ended September 30, 2017 was $50.2 million, compared with net income of $56.8 million for the three months ended September 30, 2016. Our diluted earnings per common share (EPS) for the three months ended September 30, 2017 were $0.80 with 62.5 million weighted average shares outstanding, compared with diluted EPS of $0.98 with 58.2 million weighted average shares outstanding for the three months ended September 30, 2016.

Items Affecting Comparability

Our results for the three months ended September 30, 2017 and 2016 included certain items affecting comparability between the periods that are set forth below (dollars in millions, except per share amounts):

	Income/(Loss) Before Taxes Impact			After-Tax Net Income/(Loss) Attributable to G&W Impact			Diluted Earnings/(Loss) Per Common Share Impact
Three Months Ended September 30, 2017
Corporate development and related costs	$	(1.7	)	$	(1.4	)	$	(0.02	)
Restructuring costs	$	(2.6	)	$	(2.2	)	$	(0.04	)
Unrecognized tax benefits	$	—		$	3.3		$	0.05
Three Months Ended September 30, 2016
Corporate development and related costs	$	(4.3	)	$	(3.1	)	$	(0.05	)
Restructuring costs	$	(0.2	)	$	(0.2	)	$	—
Impact of reduction in U.K. tax rate	$	—		$	4.3		$	0.07
Q3 2016 Short Line Tax Credit	$	—		$	7.8		$	0.13

For the three months ended September 30, 2017, our results included restructuring costs of $2.6 million, primarily in our U.K./Europe Region, as well as corporate development and related costs of $1.7 million, primarily related to the acquisition and integration of Pentalver Transport Limited (Pentalver). The results for the three months ended September 30, 2017 also included the recognition of $3.3 million of previously unrecognized tax benefits resulting from the lapse of the statute of limitations on acquired liabilities for uncertain tax positions.

For the three months ended September 30, 2016, our results included corporate development and related costs of $4.3 million, primarily associated with the GRail and Providence and Worcester Railroad Company (P&W) acquisitions, as well as restructuring costs of $0.2 million, primarily associated with our U.K./Europe Region. The results for the three months ended September 30, 2016 also included an income tax benefit of $7.8 million associated with the United States Short Line Tax Credit, which expired on December 31, 2016, as well as a tax benefit of $4.3 million associated with the reduction in the U.K. income tax rate, which was enacted in September 2016.

Results by Segment

North America

Operating revenues from our North American Operations increased$8.7 million, or 2.8%, to $318.9 million for the three months ended September 30, 2017, compared with $310.2 million for the three months ended September 30, 2016. The increase in operating revenues from our North American Operations was primarily due to $9.7 million from new operations.

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North American Operations traffic increased5,698 carloads, or 1.4%, to 407,697 carloads for the three months ended September 30, 2017. Excluding 13,366 carloads from new operations, same railroad traffic decreased7,668 carloads, or 1.9%. The traffic decrease was principally due to decreases of 6,896 carloads of agricultural products traffic (primarily in the Central, Midwest and Western regions), 2,164 carloads of coal and coke traffic (primarily in the Western and Midwest regions) and 1,454 carloads of food and kindred products traffic (primarily in the Western Region), partially offset by increases of 1,844 carloads of autos and auto parts traffic (primarily in the Midwest and Western regions) and 1,669 carloads of metals traffic (primarily in the Northeast Region). All remaining traffic decreased by a net 667 carloads.

Operating income from our North American Operations for the three months ended September 30, 2017 was $82.1 million, compared with $87.2 million for the three months ended September 30, 2016. The operating ratio for our North American Operations for the three months ended September 30, 2017 was 74.3%, compared with 71.9% for the three months ended September 30, 2016.

Australia

Operating revenues from our Australian Operations increased$27.1 million, or 50.1%, to $81.3 million for the three months ended September 30, 2017, compared with $54.2 million for the three months ended September 30, 2016. Excluding $17.7 million of net revenues from new operations and a $2.2 millionincrease due to the impact of foreign currency appreciation, Australian Operations same railroad revenues increased$7.2 million, or 12.7%, primarily due to an increase in metallic ores and agricultural products freight revenues.

Australian Operations traffic increased80,119 carloads to 123,651 carloads for the three months ended September 30, 2017. Excluding 81,142 carloads from new operations, same railroad traffic declined1,023 carloads, or 2.3% for the three months ended September 30, 2017, compared with the three months ended September 30, 2016. The traffic decrease was principally due to a decrease of 9,079 carloads of minerals and stone traffic, partially offset by increases of 4,539 carloads of agricultural products traffic and 3,508 carloads of metallic ores traffic. All remaining traffic increased by a net nine carloads.

Operating income from our Australian Operations for the three months ended September 30, 2017 was $22.3 million, compared with $4.4 millionfor the three months ended September 30, 2016. Operating income for the three months ended September 30, 2016 included $2.9 million of corporate development and related costs, primarily associated with the GRail Transactions. The operating ratio for our Australian Operations was 72.6% for the three months ended September 30, 2017, compared with an operating ratio of 91.9% for the three months ended September 30, 2016.

U.K./Europe

Operating revenues from our U.K./European Operations increased$40.1 million, or 29.3%, to $176.7 million for the three months ended September 30, 2017, compared with $136.7 million for the three months ended September 30, 2016. Excluding $39.2 million from new operations and a $2.1 millionincrease due to the impact of foreign currency appreciation, U.K./European Operations same railroad revenues decreased$1.3 million, or 0.9%, primarily due to a decrease in Continental Europe intermodal revenues following the discontinuation of certain intermodal train services as part of the restructuring of ERS Railways B.V. (ERS) in the first half of 2017 and decreased U.K. infrastructure revenues, partially offset by increased crewing revenues.

U.K./European Operations traffic decreased11,503 carloads, or 3.9%, to 282,780 carloads for the three months ended September 30, 2017. The traffic decrease was principally due to decreases of 9,996 carloads of intermodal traffic (primarily in Continental Europe) and 5,478 carloads of coal and coke traffic (primarily in the U.K.), partially offset by an increase of 3,846 carloads of minerals and stone traffic (primarily in Poland). All remaining traffic increased by 125 carloads.

Operating income from our U.K./European Operations was $7.1 million for the three months ended September 30, 2017, compared with $0.3 million for the three months ended September 30, 2016. Our U.K./European Operations operating income for the three months ended September 30, 2017 included $2.3 million of restructuring costs and $1.6 million of corporate development and related costs, primarily related to the integration and acquisition of Pentalver. The operating ratio for our U.K./European Operations was 96.0% for the three months ended September 30, 2017, compared with an operating ratio of 99.8% for the three months ended September 30, 2016.

Overview of Nine-Month Results

Operating revenuesincreased$151.5 million, or10.2%, to$1,636.5 millionfor theninemonths endedSeptember 30, 2017, compared with $1,485.0 million for the ninemonths endedSeptember 30, 2016. Operating income for the ninemonths endedSeptember 30, 2017 was $290.3 million, compared with $236.0 million for the ninemonths endedSeptember 30, 2016, an increase of $54.2 million, or 23.0%. Our operating ratio was 82.3% for the ninemonths endedSeptember 30, 2017, compared with 84.1% for the ninemonths endedSeptember 30, 2016.

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Net income attributable to G&W for the ninemonths endedSeptember 30, 2017 was $122.5 million, compared with net income of $132.2 million for the ninemonths endedSeptember 30, 2016. Our diluted EPS for the ninemonths endedSeptember 30, 2017 were $1.96 with 62.4 million weighted average shares outstanding, compared with diluted EPS of $2.28 with 58.1 million weighted average shares outstanding for the ninemonths endedSeptember 30, 2016.

During the nine months ended September 30, 2017, we generated $350.4 million in cash flows from operating activities. During the same period, we purchased $149.1 million of property and equipment, including $4.3 million for new business investments, partially offset by $16.0 million in cash received from government grants and other outside parties for capital spending. We also paid $80.2 million in net payments on our outstanding debt, including $12.9 million to buyout locomotive leases.

Items Affecting Comparability

Our results for the ninemonths endedSeptember 30, 2017 and 2016 included certain items affecting comparability between the periods that are set forth below (dollars in millions, except per share amounts):

	Income/(Loss) Before Taxes Impact			After-Tax Net Income/(Loss) Attributable to G&W Impact			Diluted Earnings/(Loss) Per Common Share Impact
Nine Months Ended September 30, 2017
Corporate development and related costs	$	(10.8	)	$	(7.4	)	$	(0.12	)
Restructuring costs	$	(8.7	)	$	(7.8	)	$	(0.13	)
Gain on sale of investment	$	1.6		$	1.0		$	0.02
Unrecognized tax benefits	$	—		$	3.3		$	0.05
Nine Months Ended September 30, 2016
Australia impairment and related costs	$	(21.1	)	$	(16.8	)	$	(0.29	)
Corporate development and related costs	$	(7.3	)	$	(5.2	)	$	(0.08	)
Restructuring costs	$	(6.3	)	$	(5.0	)	$	(0.09	)
Impact of reduction in U.K. tax rate	$	—		$	4.3		$	0.07
Q3 2016 Short Line Tax Credit	$	—		$	21.4		$	0.37

Changes in Operations

North American Operations

Heart of Georgia Railroad, Inc.: On May 31, 2017, we completed the acquisition of all the outstanding shares of Atlantic Western Transportation, Inc., parent company of Heart of Georgia Railroad, Inc. (HOG), for $5.6 million in cash and contingent consideration of $5.7 million. The contingent consideration is payable to the sellers upon satisfaction of certain conditions, which we expect to be paid in 2021. The results of operations from HOG have been included in our consolidated statement of operations within our North American Operations segment since the acquisition date. For additional information regarding HOG, see Note 2, Changes in Operations, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

Providence and Worcester Railroad Company: On November 1, 2016, we completed the acquisition of 100% of the outstanding common stock of P&W for $25.00 per share, or $126.2 million. The acquisition was funded with borrowings under our Second Amended and Restated Senior Secured Syndicated Credit Facility Agreement, as amended (the Credit Agreement). The results of operations from P&W have been included in our consolidated statements of operations within our North American Operations segment since the acquisition date. We incurred $3.1 million of integration costs associated with P&W during the nine months ended September 30, 2017, of which $2.7 million was included within labor and benefits expense primarily for severance costs and $0.4 million was included within other expenses in our consolidated statement of operations. For additional information regarding the acquisition of P&W, see Note 2, Changes in Operations, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

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Australian Operations

Glencore Rail (NSW) Pty Limited: On December 1, 2016, our subsidiary completed the acquisition of GRail for A$1.14 billion (or approximately $844.9 million at an exchange rate of $0.74 for one Australian dollar) and concurrently issued a 48.9% equity stake in GWAHLP (collectively, the Australia Partnership), which is the holding entity for all of our Australian businesses, including GRail, to MIRA, a large infrastructure investment firm. Through wholly-owned subsidiaries, we retained a 51.1% ownership in GWAHLP. As we maintain control of our Australian Operations, we continue to consolidate 100% of our Australian Operations in our financial statements and report a noncontrolling interest for MIRA’s 48.9% equity ownership.

We and MIRA contributed A$1.3 billion in the form of cash, partner loans and contributed equity, and our recently established subsidiary, GWI Acquisitions Pty Ltd (GWIA), entered into a five-year A$690 million senior secured term loan facility that is non-recourse to us and to MIRA. The proceeds were used to acquire GRail for A$1.14 billion, repay Genesee & Wyoming Australia’s (GWA) existing A$250 million term loan (under our Credit Agreement) and pay A$19.8 million in debt issuance costs and A$13.2 million of acquisition-related costs (collectively the GRail Transactions). The foreign exchange rate used to translate the transaction amounts to United States dollars (USD) was $0.74 for one Australian dollar (AUD).

The results of operations from GRail have been included in our consolidated statement of operations within our Australian Operations segment since the December 1, 2016 acquisition date. For additional information regarding the acquisition of GRail, see Note 2, Changes in Operations, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

Arrium Limited: Between 2011 and 2014, GWA invested a total of $78 million to purchase locomotives and railcars, as well as to construct a standard gauge rolling-stock maintenance facility to support iron ore shipments from Arrium's Southern Iron mine and Whyalla-based operations, which include the Middleback Range iron ore mines and the Whyalla steelworks. Arrium mothballed its Southern Iron mine in April 2015, citing the significant decline in the price of iron ore, while the mines in the Middleback Range continued to operate. 

On April 7, 2016, Arrium announced it had entered into voluntary administration. As a result, we recorded a $13.0 million non-cash charge related to the impairment of GWA's now idle rolling-stock maintenance facility, which was recorded to net (gain)/loss on sale and impairment of assets within operating expenses, which represented the entire carrying value of these assets, and an allowance for doubtful accounts charge of $8.1 million associated with accounts receivable from Arrium, which was recorded to other expenses within operating expenses, during the first quarter of 2016. Also, as a result of the voluntary administration, all payments to GWA associated with the Southern Iron rail haulage agreement ceased.

On August 31, 2017, Arrium was sold to GFG Alliance. The steel making business was rebranded as Liberty OneSteel and the mining business was rebranded as SIMEC Mining. GWA continues to provide service and receive payments under the remaining rail haulage agreement. Pursuant to the rail haulage agreement, GWA serves several iron ore mines in the Middleback Range and the Whyalla steelworks operations, which we expect will represent A$40 million (or approximately $32 million at the exchange rate on September 30, 2017) of annual revenue, prospectively.

U.K./European Operations

Pentalver Transport Limited: On May 3, 2017, our subsidiary, GWI UK Acquisition Company Limited, purchased for cash all of the issued share capital of Pentalver Transport Limited (Pentalver) from a subsidiary of APM Terminals (a subsidiary of A P Møller-Maersk A/S) for £97.8 million (or $126.2 million at the exchange rate on May 3, 2017) or £77.5 million (or $100.1 million at the exchange rate on May 3, 2017) net of £20.2 million (or $26.1 million at the exchange rate on May 3, 2017) of cash received in connection with the sale. We funded the acquisition with borrowings under our Credit Agreement. The foreign exchange rate used to translate the total consideration to United States dollars was $1.29 for one British pound (GBP).

Headquartered in Southampton, U.K., Pentalver operates off-dock container terminals (most under long-term lease) strategically placed at each of the four major seaports of Felixstowe, Southampton, London Gateway and Tilbury, as well as an inland terminal located at Cannock, in the Midlands, near many of the nation’s largest distribution centers. In addition to providing storage for loaded and empty containers on over 100 acres of land, Pentalver also operates a trucking haulage service with more than 150 trucks, primarily providing daily service between the seaports of Felixstowe and Southampton and its inland terminal at Cannock. Pentalver also provides services related to container maintenance and repair (including refrigerated containers) and is one of the largest sellers of new and used containers in the U.K.

37

The results of operations from Pentalver have been included in our consolidated statement of operations within our U.K./European Operations segment since the May 3, 2017, acquisition date. For additional information regarding the acquisition of Pentalver, see Note 2, Changes in Operations, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

Continental Europe Intermodal Business: During 2016, we explored ways to enhance the long-term viability of ERS, the Continental Europe intermodal business Freightliner acquired from Maersk, which we acquired in 2015 with the Freightliner acquisition. Due to its limited history of profitability and competitive dynamics in the market in which it operates, we ascribed little value to it at the time of acquisition.

Despite a significant and focused effort by us, the performance of ERS reached unsustainable levels during 2016 and a restructuring plan was initiated. In conjunction with that plan, in 2017, we ceased all "open" train services from the port of Rotterdam, closed the ERS offices in Rotterdam and Frankfurt and the ERS customer services function in Warsaw. We are in the process of redistributing ERS’s leased locomotives and railcars, which have lease termination dates ranging from 2017 to 2019. These steps will enable us to focus on the deep sea intermodal sector. Our subsidiary, Rotterdam Rail Feeding B.V., will continue its existing services and not be affected by the restructuring of ERS.

As a result of the ERS restructuring plan, we recorded impairment and related charges of $21.5 million in December 2016. These charges primarily included $14.5 million for an impairment of goodwill and $4.1 million for an impairment of a customer-related intangible asset, which were both recorded to net (gain)/loss on sale and impairment of assets within operating expenses, which represented the entire carrying value of these assets. For the nine months ended September 30, 2017, we recorded $5.2 million of restructuring costs related to ERS, primarily for severance costs and costs associated with surplus locomotive and railcar leases.

Three Months EndedSeptember 30, 2017 Compared with Three Months EndedSeptember 30, 2016

Consolidated Operating Results

Operating Revenues

The following table sets forth our operating revenues and total carloads by new operations and existing operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,											Increase/(Decrease) in Total Operations				Increase/(Decrease) in Existing Operations					Currency Impact
	2017
	Total Operations		New Operations		Eliminations (a)			Existing Operations		2016		Amount		%		Amount			%
Freight revenues	$	400,735	$	38,220	—			$	362,515	$	349,807	$	50,928	14.6	%	$	12,708		3.6	%	$	3,355
Freight-related revenues	140,923		28,372		(11,301		)	123,852		129,520		11,403		8.8	%	(5,668		)	(4.4	)%	1,763
All other revenues	35,269		11,379		—			23,890		21,675		13,594		62.7	%	2,215			10.2	%	201
Total operating revenues	$	576,927	$	77,971	$	(11,301	)	$	510,257	$	501,002	$	75,925	15.2	%	$	9,255		1.8	%	$	5,319
Carloads	814,128		94,508		—			719,620		739,814		74,314		10.0	%	(20,194		)	(2.7	)%

(a) Represents revenues for services provided by Freightliner Australia to GRail, which were eliminated in our consolidated revenues.

Operating Expenses

Total operating expenses for the three months ended September 30, 2017increased$56.3 million, or 13.8%, to $465.4 million, compared with $409.2 million for the three months ended September 30, 2016. The increase consisted of $54.7 million from new operations and $1.6 million from existing operations. When we discuss either operating expenses from existing operations or same railroad operating expenses, we are referring to the change in our operating expenses, period-over-period, associated with operations that we managed in both periods (i.e., excluding the impact of acquisitions). The increase from existing operations was primarily due to a $5.1 millionincrease from the net appreciation of foreign currencies relative to the United States dollar, as well as increases in diesel fuel used in train operations of $3.4 million, depreciation and amortization of $2.6 million and restructuring costs of $2.4 million. These increases were partially offset by decreases of $7.7 million in equipment rents, $3.0 million in other expenses and $2.6 million in electricity used in train operations.

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The following table sets forth our total operating expenses for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,										Increase/(Decrease)			Currency Impact			2016 Constant Currency*			Increase/(Decrease)Constant Currency*
	2017					2016
	Amount			% of Operating Revenues		Amount			% of Operating Revenues
Labor and benefits	$	167,929		29.2	%	$	156,235		31.2	%	$	11,694		$	1,154		$	157,389		$	10,540
Equipment rents	33,291			5.8	%	36,778			7.3	%	(3,487		)	591			37,369			(4,078		)
Purchased services	68,562			11.9	%	50,991			10.2	%	17,571			1,134			52,125			16,437
Depreciation and amortization	64,222			11.1	%	50,841			10.2	%	13,381			563			51,404			12,818
Diesel fuel used in train operations	34,535			6.0	%	30,134			6.1	%	4,401			432			30,566			3,969
Electricity used in train operations	765			0.1	%	3,226			0.6	%	(2,461		)	130			3,356			(2,591		)
Casualties and insurance	10,624			1.8	%	9,252			1.9	%	1,372			102			9,354			1,270
Materials	30,664			5.3	%	19,678			3.9	%	10,986			175			19,853			10,811
Trackage rights	22,632			3.9	%	22,781			4.5	%	(149		)	408			23,189			(557		)
Net gain on sale and impairment of assets	(315		)	(0.1	)%	(524		)	(0.1	)%	209			(4		)	(528		)	213
Restructuring costs	2,628			0.5	%	223			—	%	2,405			2			225			2,403
Other expenses	29,901			5.2	%	29,536			5.9	%	365			398			29,934			(33		)
Total operating expenses	$	465,438		80.7	%	$	409,151		81.7	%	$	56,287		$	5,085		$	414,236		$	51,202

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Operating Income/Operating Ratio

Operating income was $111.5 million for the three months ended September 30, 2017, compared with $91.9 million for the three months ended September 30, 2016. Operating income for the three months ended September 30, 2017 included restructuring costs of $2.6 million, primarily in our U.K./Europe Region, as well as corporate development and related costs of $1.7 million, primarily related to the acquisition and integration of Pentalver. Operating income for the three months ended September 30, 2016 included corporate development and related costs of $4.3 million, primarily associated with the GRail and P&W acquisitions, as well as restructuring costs of $0.2 million. Our operating ratio was 80.7% for the three months ended September 30, 2017, compared with 81.7% for the three months ended September 30, 2016.

Interest Expense

Interest expense was $28.3 million for the three months ended September 30, 2017, compared with $17.3 million for the three months ended September 30, 2016. The increase in interest expense was primarily due to a higher debt balance resulting from the GRail Transactions in December 2016, as well as higher interest rates in 2017, compared with 2016.

Provision for Income Taxes

Our effective income tax rate for the three months ended September 30, 2017 was 36.4%, compared with 25.7% for the three months ended September 30, 2016. Our provision for income taxes for the three months ended September 30, 2017 included the recognition of $3.3 million of previously unrecognized tax benefits resulting from the lapse of the statute of limitations on acquired liabilities for uncertain tax positions and a tax provision of $1.4 million related to enacted state income tax rate changes. Our provision for income taxes for the three months ended September 30, 2016 included an income tax benefit of $7.8 million associated with the United States Short Line Tax Credit, which expired on December 31, 2016, as well as an income tax benefit of $4.3 million associated with a reduction in the U.K. income tax rate, which was enacted in September 2016. For additional information regarding our provision for income taxes, see Note 10, Income Taxes, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

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Net Income Attributable to G&W and Earnings Per Common Share

Net income attributable to G&W for the three months ended September 30, 2017 was $50.2 million, compared with $56.8 million for the three months ended September 30, 2016. Our basic EPS were $0.82 with 61.6 million weighted average shares outstanding for the three months ended September 30, 2017, compared with basic EPS of $0.99 with 57.3 million weighted average shares outstanding for the three months ended September 30, 2016. Our diluted EPS for the three months ended September 30, 2017 were $0.80 with 62.5 million weighted average shares outstanding, compared with diluted EPS of $0.98 with 58.2 million weighted average shares outstanding for the three months ended September 30, 2016. Our results for the three months ended September 30, 2017 and 2016 included certain items affecting comparability between the periods as previously presented in the "Overview—Overview of Three-Month Results—Items Affecting Comparability."

Operating Results by Segment

Our various rail operations are organized into nine operating regions. We present our financial information as three reportable segments: North American Operations, Australian Operations and U.K./European Operations. Each of our segments generates the following three categories of revenues from external customers: freight revenues, freight-related revenues and all other revenues. Our seven North American regions are aggregated into one segment as a result of having similar economic and operating characteristics.

The results of operations of our foreign entities are maintained in the respective local currency (the Australian dollar, the British pound, 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 tables set forth results from our North American Operations, Australian Operations and U.K./European Operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30, 2017
	North American Operations			Australian Operations			U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	242,968		$	66,404		$	91,363		$	400,735
Freight-related revenues	60,286			12,880			67,757			140,923
All other revenues	15,673			1,986			17,610			35,269
Total operating revenues	$	318,927		$	81,270		$	176,730		$	576,927
Operating expenses:
Labor and benefits	$	102,784		$	17,618		$	47,527		$	167,929
Equipment rents	12,623			1,480			19,188			33,291
Purchased services	15,254			7,139			46,169			68,562
Depreciation and amortization	40,036			15,753			8,433			64,222
Diesel fuel used in train operations	16,934			6,003			11,598			34,535
Electricity used in train operations	—			—			765			765
Casualties and insurance	8,488			1,367			769			10,624
Materials	11,889			3,398			15,377			30,664
Trackage rights	10,025			3,500			9,107			22,632
Net gain on sale and impairment of assets	(110		)	(37		)	(168		)	(315		)
Restructuring costs	316			—			2,312			2,628
Other expenses	18,577			2,773			8,551			29,901
Total operating expenses	236,816			58,994			169,628			465,438
Operating income	$	82,111		$	22,276		$	7,102		$	111,489
Operating ratio	74.3		%	72.6		%	96.0		%	80.7		%
Interest expense, net	$	9,817		$	13,678		$	4,323		$	27,818
Provision for income taxes	$	28,270		$	2,013		$	224		$	30,507
Expenditures for additions to property & equipment, net of grants from outside parties	$	41,713		$	4,545		$	6,981		$	53,239
Carloads	407,697			123,651			282,780			814,128

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	Three Months Ended September 30, 2016
	North American Operations			Australian Operations			U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	232,247		$	29,219		$	88,341		$	349,807
Freight-related revenues	62,124			23,523			43,873			129,520
All other revenues	15,823			1,408			4,444			21,675
Total operating revenues	$	310,194		$	54,150		$	136,658		$	501,002
Operating expenses:
Labor and benefits	97,426			16,753			42,056			156,235
Equipment rents	14,207			1,559			21,012			36,778
Purchased services	15,207			6,083			29,701			50,991
Depreciation and amortization	37,085			7,129			6,627			50,841
Diesel fuel used in train operations	14,217			5,467			10,450			30,134
Electricity used in train operations	—			—			3,226			3,226
Casualties and insurance	6,145			1,938			1,169			9,252
Materials	12,222			2,744			4,712			19,678
Trackage rights	9,047			2,884			10,850			22,781
Net (gain)/loss on sale and impairment of assets	(456		)	10			(78		)	(524		)
Restructuring costs	111			73			39			223
Other expenses	17,830			5,138			6,568			29,536
Total operating expenses	223,041			49,778			136,332			409,151
Operating income	$	87,153		$	4,372		$	326		$	91,851
Operating ratio	71.9		%	91.9		%	99.8		%	81.7		%
Interest expense, net	$	9,600		$	2,170		$	5,147		$	16,917
Provision for/(benefit from) income taxes	$	22,392		$	798		$	(3,547	)	$	19,643
Expenditures for additions to property & equipment, net of grants from outside parties	$	30,343		$	2,440		$	9,457		$	42,240
Carloads	401,999			43,532			294,283			739,814

North American Operations

Operating Revenues

The following table sets forth our North American Operations operating revenues and carloads by new operations and existing operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,								Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	2017						2016
	Total Operations		New Operations		Existing Operations				Amount			%		Amount			%
Freight revenues	$	242,968	$	9,207	$	233,761	$	232,247	$	10,721		4.6	%	$	1,514		0.7	%	$	605
Freight-related revenues	60,286		302		59,984		62,124		(1,838		)	(3.0	)%	(2,140		)	(3.4	)%	215
All other revenues	15,673		235		15,438		15,823		(150		)	(0.9	)%	(385		)	(2.4	)%	126
Total operating revenues	$	318,927	$	9,744	$	309,183	$	310,194	$	8,733		2.8	%	$	(1,011	)	(0.3	)%	$	946
Carloads	407,697		13,366		394,331		401,999		5,698			1.4	%	(7,668		)	(1.9	)%

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Freight Revenues

The following table sets forth the changes in our North American Operations freight revenues by commodity group segregated into new operations and existing operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,				Increase/(Decrease) in Total Operations			New Operations		Currency Impact		2016 Constant Currency*		Increase/(Decrease) in Existing Operations Constant Currency*
	2017		2016
Commodity Group	Amount		Amount
Agricultural Products	$	28,699	$	29,367	$	(668	)	$	519	$	36	$	29,403	$	(1,223	)
Autos & Auto Parts	6,079		4,358		1,721			709		31		4,389		981
Chemicals & Plastics	36,745		34,078		2,667			2,155		124		34,202		388
Coal & Coke	20,008		21,434		(1,426		)	—		26		21,460		(1,452		)
Food & Kindred Products	8,257		8,549		(292		)	185		14		8,563		(491		)
Intermodal	311		10		301			311		—		10		(10		)
Lumber & Forest Products	22,204		21,301		903			883		41		21,342		(21		)
Metallic Ores	3,703		3,401		302			1		30		3,431		271
Metals	26,008		24,127		1,881			475		70		24,197		1,336
Minerals & Stone	34,769		31,144		3,625			2,691		38		31,182		896
Petroleum Products	16,425		16,882		(457		)	359		51		16,933		(867		)
Pulp & Paper	28,135		26,897		1,238			455		125		27,022		658
Waste	6,662		6,213		449			313		5		6,218		131
Other	4,963		4,486		477			151		14		4,500		312
Total freight revenues	$	242,968	$	232,247	$	10,721		$	9,207	$	605	$	232,852	$	909

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

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The following table sets forth our North American Operations freight revenues, carloads and average freight revenues per carload for the three months ended September 30, 2017 and 2016 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads		Average Freight Revenues Per Carload
	Three Months Ended September 30,								Three Months Ended September 30,		Three Months Ended September 30,
	2017				2016 Constant Currency*
Commodity Group	Amount		% of Total		Amount		% of Total		2017	2016	2017		2016		2016 Constant Currency*
Agricultural Products	$	28,699	11.9	%	$	29,403	12.5	%	47,588	54,024	$	603	$	544	$	544
Autos & Auto Parts	6,079		2.5	%	4,389		1.9	%	9,728	7,035	625		619		624
Chemicals & Plastics	36,745		15.2	%	34,202		14.7	%	43,739	42,402	840		804		807
Coal & Coke	20,008		8.2	%	21,460		9.2	%	60,864	63,028	329		340		340
Food & Kindred Products	8,257		3.4	%	8,563		3.7	%	14,415	15,557	573		550		550
Intermodal	311		0.1	%	10		—	%	3,145	112	99		89		89
Lumber & Forest Products	22,204		9.1	%	21,342		9.2	%	35,846	35,253	619		604		605
Metallic Ores	3,703		1.5	%	3,431		1.5	%	4,667	4,536	793		750		756
Metals	26,008		10.7	%	24,197		10.4	%	34,003	31,978	765		754		757
Minerals & Stone	34,769		14.3	%	31,182		13.4	%	57,104	53,530	609		582		583
Petroleum Products	16,425		6.8	%	16,933		7.3	%	24,772	24,959	663		676		678
Pulp & Paper	28,135		11.6	%	27,022		11.6	%	42,244	41,721	666		645		648
Waste	6,662		2.7	%	6,218		2.7	%	14,330	13,420	465		463		463
Other	4,963		2.0	%	4,500		1.9	%	15,252	14,444	325		311		312
Total	$	242,968	100.0	%	$	232,852	100.0	%	407,697	401,999	$	596	$	578	$	579

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Total traffic from our North American Operations increased5,698 carloads, or 1.4%, to 407,697 carloads for the three months ended September 30, 2017, compared with the same period in 2016. The increase consisted of 13,366 carloads from new operations, partially offset by a decrease of 7,668 carloads from existing operations. The traffic decrease from existing operations was due to decreases of 6,896 carloads of agricultural products traffic, 2,164 carloads of coal and coke traffic and 1,454 carloads of food and kindred products traffic, partially offset by increases of 1,844 carloads of autos and auto parts traffic and 1,669 carloads of metals traffic. All remaining traffic decreased by a net 667 carloads.

Changes in average freight revenues per carload in a commodity group may be impacted by changes in customer rates and fuel surcharges, as well as changes in the mix of customer traffic within a commodity group. Excluding a 0.2% impact of foreign currency, average freight revenues per carload from our North American Operations increased2.9% to $596 for the three months ended September 30, 2017, compared with the same period in 2016. Average freight revenues per carload from existing operations, excluding the impact of foreign currency, increased2.4% to $593 for the three months ended September 30, 2017, compared with the same period in 2016. Customer mix within the commodity groups decreased average revenues per carload by approximately 0.8% and higher fuel surcharges and a change in the mix of commodities increased average freight revenues per carload by 0.4% and 0.3%, respectively. Excluding these factors, average freight revenues per carload increased 2.5%.

The following information discusses the significant changes in our North American Operations freight revenues from existing operations by commodity group excluding the impact of foreign currency.

Agricultural products revenues decreased$1.2 million, or 4.2%. Agricultural products traffic decreased 6,896 carloads, or 12.8%, which decreased revenues by $4.1 million, while average freight revenues per carload increased 9.9%, which increased revenues by $2.9 million. The carload decrease was primarily due to decreased grain shipments as a result of drought conditions in South Dakota, modal competition and reduced export demand. The increase in average freight revenues per carload was primarily driven by a change in the mix of business and a longer average length of haul.

Autos and auto parts revenues increased$1.0 million, or 22.4%, primarily due to a traffic increase of 1,844 carloads, or 26.2%. The carload increase was primarily due to increased shipments in the midwestern United States related to a model conversion and import spot shipments in the western United States.

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Coal and coke revenues decreased$1.5 million, or 6.8%. Coal and coke average freight revenues per carload decreased 3.2%, which decreased revenues by $0.7 million, and traffic decreased 2,164 carloads, or 3.4%, which decreased revenues by $0.7 million.

Metals revenuesincreased$1.3 million, or5.5%, primarily due to a traffic increase of 1,669 carloads, or 5.2%. The carload increase was primarily due to increased shipments of pipe and finished steel in the northeastern United States.

Minerals and stone revenues increased$0.9 million, or 2.9%. Minerals and stone average freight revenues per carload increased 3.9%, which increased revenues by $1.3 million, while traffic decreased 606 carloads, or 1.1%, which decreased revenues by $0.4 million. The carload decrease was primarily due to reduced shipments of construction aggregates, partially offset by increased shipments of frac sand.

Petroleum products revenuesdecreased$0.9 million, or5.1%. Petroleum products average freight revenues per carload decreased 3.1%, which decreased revenues by $0.6 million, and traffic decreased 493 carloads, or 2.0%, which decreased revenues by $0.3 million. The decrease in average freight revenues per carload was primarily due to a change in the mix of business.The carload decrease was primarily due to decreased shipments of liquid petroleum gases in the western United States.

Freight revenues from all remaining commodities combined increased by a net $1.2 million.

Freight-Related Revenues

Excluding a $0.2 millionincrease due to the impact of foreign currency appreciation, freight-related revenues from our North American Operations, which includes revenues from railcar switching, track access fees, storage and other ancillary revenues related to the movement of freight, decreased$2.1 million, or 3.3%, to $60.3 million for the three months ended September 30, 2017, compared with $62.3 million for the three months ended September 30, 2016. The decrease consisted of $2.4 million from existing operations, partially offset by an increase of $0.3 million from new operations. The decrease from existing operations was primarily due to decreased port switching revenues in the southern United States and reduced demurrage revenues.

All Other Revenues

Excluding a $0.1 millionincrease due to the impact of foreign currency appreciation, all other revenues from our North American Operations, which includes revenues from third-party railcar and locomotive repairs, property rentals, railroad construction and other ancillary revenues not directly related to the movement of freight, decreased$0.3 million, or 1.7%, to $15.7 million for the three months ended September 30, 2017, compared with $15.9 million for the three months ended September 30, 2016. The decrease included $0.5 million from existing operations, partially offset by an increase of $0.2 million from new operations.

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Operating Expenses

Total operating expenses from our North American Operations increased$13.8 million, or 6.2%, to $236.8 million for the three months ended September 30, 2017, compared with $223.0 million for the three months ended September 30, 2016. The increase included $8.0 million from new operations and $5.7 million from existing operations. The increase from existing operations was primarily due to increases of $2.1 million of depreciation and amortization, $2.0 million in diesel fuel used in train operations, $2.0 million in casualties and insurance and $1.5 million in labor and benefits, partially offset by a decrease of $2.1 million in equipment rents. In addition, the change from existing operations included a $0.8 millionincrease due to the impact of foreign currency appreciation. The following table sets forth operating expenses from our North American Operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,																			Increase/(Decrease) Constant Currency*
	2017					2016								Currency Impact			2016 Constant Currency*
	Amount			% of Operating Revenues		Amount			% of Operating Revenues		Increase/(Decrease)
Labor and benefits	$	102,784		32.2	%	$	97,426		31.4	%	$	5,358		$	322		$	97,748		$	5,036
Equipment rents	12,623			4.0	%	14,207			4.6	%	(1,584		)	47			14,254			(1,631		)
Purchased services	15,254			4.8	%	15,207			4.9	%	47			61			15,268			(14		)
Depreciation and amortization	40,036			12.6	%	37,085			12.0	%	2,951			217			37,302			2,734
Diesel fuel used in train operations	16,934			5.3	%	14,217			4.6	%	2,717			62			14,279			2,655
Casualties and insurance	8,488			2.7	%	6,145			2.0	%	2,343			18			6,163			2,325
Materials	11,889			3.7	%	12,222			3.9	%	(333		)	49			12,271			(382		)
Trackage rights	10,025			3.1	%	9,047			2.9	%	978			8			9,055			970
Net gain on sale and impairment of assets	(110		)	—	%	(456		)	(0.1	)%	346			(5		)	(461		)	351
Restructuring costs	316			0.1	%	111			—	%	205			—			111			205
Other expenses	18,577			5.8	%	17,830			5.7	%	747			65			17,895			682
Total operating expenses	$	236,816		74.3	%	$	223,041		71.9	%	$	13,775		$	844		$	223,885		$	12,931

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following information discusses the significant changes in operating expenses of our North American Operations excluding an increase of $0.8 million due to the impact from foreign currency appreciation.

Labor and benefits expense was $102.8 million for the three months ended September 30, 2017, compared with $97.7 million for the three months ended September 30, 2016, an increase of $5.0 million, or 5.2%. The increase consisted of $3.6 million from new operations and $1.5 million, or 1.5% from existing operations. The increase from existing operations was primarily due to annual wage increases.

Equipment rents expense was $12.6 million for the three months ended September 30, 2017, compared with $14.3 million for the three months ended September 30, 2016, a decrease of $1.6 million, or 11.4%. The decrease consisted of $2.1 million from existing operations, partially offset by $0.5 million from new operations. The decrease from existing operations was primarily due to reduced leased locomotive expense due to buyouts of certain of our locomotive leases and reduced leased freight car expense due to certain leased cars being returned to lessors or converted to per diem leases.

Depreciation and amortization expense was $40.0 million for the three months ended September 30, 2017, compared with $37.3 million for the three months ended September 30, 2016, an increase of $2.7 million, or 7.3%. The increase consisted of $2.1 million from existing operations and $0.6 million from new operations. The increase from existing operations was primarily attributable to a larger depreciable asset base in 2017 compared with 2016, reflecting capital spending in 2016.

The cost of diesel fuel used in train operations was $16.9 million for the three months ended September 30, 2017, compared with $14.3 million for the three months ended September 30, 2016, an increase of $2.7 million, or 18.6%. The increase consisted of $2.0 million from existing operations and $0.6 million from new operations. The increase from existing operations consisted of $2.3 million due to a 15.9% increase in average fuel cost per gallon, partially offset by $0.3 million due to a 1.4% decrease in diesel fuel consumption.

45

Casualties and insurance expense was $8.5 million for the three months ended September 30, 2017, compared with $6.2 million for the three months ended September 30, 2016, an increase of $2.3 million, or 37.7%. The increase consisted of $2.0 million from existing operations and $0.3 million from new operations. The increase from existing operations was primarily attributable to increased derailment expense in 2017.

Operating Income/Operating Ratio

Operating income from our North American Operations was $82.1 million for the three months ended September 30, 2017, compared with $87.2 million for the three months ended September 30, 2016. Operating income for the three months ended September 30, 2017 included corporate development and related costs of $0.6 million and restructuring costs of $0.3 million. Operating income for the three months ended September 30, 2016 included corporate development and related costs of $1.0 million. The operating ratio was 74.3% for the three months ended September 30, 2017, compared with 71.9% for the three months ended September 30, 2016.

Australian Operations

Operating Revenues

As previously disclosed, we own a controlling 51.1% interest in our Australian Operations. Therefore, we include 100% of our Australian Operations within revenues and expenses within our consolidated financial statements with a 48.9% noncontrolling interest recorded to reflect MIRA's ownership. The following table sets forth our Australian Operations operating revenues and carloads by new operations and existing operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,											Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	2017
	Total Operations		New Operations		Eliminations (a)			Existing Operations		2016		Amount			%		Amount			%
Freight revenues	$	66,404	$	29,013	$	—		$	37,391	$	29,219	$	37,185		NM		$	8,172		28.0	%	$	1,195
Freight-related revenues	12,880		—		(11,301		)	24,181		23,523		(10,643		)	(45.2	)%	658			2.8	%	976
All other revenues	1,986		—		—			1,986		1,408		578			41.1	%	578			41.1	%	58
Total operating revenues	$	81,270	$	29,013	$	(11,301	)	$	63,558	$	54,150	$	27,120		50.1	%	$	9,408		17.4	%	$	2,229
Carloads	123,651		81,142		—			42,509		43,532		80,119			NM		(1,023		)	(2.3	)%

(a) Represents revenues for services provided by Freightliner Australia to GRail, which were eliminated in our consolidated revenues.

Freight Revenues

The following table sets forth the changes in our Australian Operations freight revenues by commodity group segregated into new operations and existing operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended				Increase/(Decrease) in Total Operations			New Operations		Currency Impact		2016 Constant Currency*		Increase/(Decrease) in Existing Operations Constant Currency*
	September 30,
Commodity Group	2017		2016
Agricultural Products	$	6,059	$	3,909	$	2,150		$	—	$	160	$	4,069	$	1,990
Coal & Coke	29,013		—		29,013			29,013		—		—		—
Intermodal	19,012		17,688		1,324			—		723		18,411		601
Metallic Ores	11,305		5,516		5,789			—		225		5,741		5,564
Minerals & Stone	792		1,918		(1,126		)	—		79		1,997		(1,205		)
Petroleum Products	223		188		35			—		8		196		27
Total freight revenues	$	66,404	$	29,219	$	37,185		$	29,013	$	1,195	$	30,414	$	6,977

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

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The following table sets forth our Australian Operations freight revenues, carloads and average freight revenues per carload for the three months ended September 30, 2017 and 2016 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads		Average Freight Revenues Per Carload
	Three Months Ended September 30,								Three Months Ended September 30,		Three Months Ended September 30,
	2017				2016 Constant Currency*
Commodity Group	Amount		% of Total		Amount		% of Total		2017	2016	2017		2016		2016 Constant Currency*
Agricultural Products	$	6,059	9.1	%	$	4,069	13.4	%	13,163	8,624	$	460	$	453	$	472
Coal & Coke	29,013		43.8	%	—		—	%	81,142	—	358		—		—
Intermodal	19,012		28.6	%	18,411		60.5	%	15,416	15,417	1,233		1,147		1,194
Metallic Ores	11,305		17.0	%	5,741		18.9	%	8,354	4,846	1,353		1,138		1,185
Minerals & Stone	792		1.2	%	1,997		6.6	%	5,488	14,567	144		132		137
Petroleum Products	223		0.3	%	196		0.6	%	88	78	2,534		2,410		2,513
Total	$	66,404	100.0	%	$	30,414	100.0	%	123,651	43,532	$	537	$	671	$	699

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Total traffic from our Australian Operations increased80,119 carloads to 123,651 carloads for the three months ended September 30, 2017, compared with the same period in 2016. The increase consisted of 81,142 carloads from new operations, partially offset by a decrease of 1,023 carloads from existing operations. The decrease in traffic from existing operations was principally due to a decrease of 9,079 carloads of minerals and stone traffic, partially offset by increases of 4,539 carloads of agricultural products traffic and 3,508 carloads of metallic ores traffic. All remaining traffic increased by a net nine carloads.

Changes in average freight revenues per carload in a commodity group may be impacted by changes in customer rates and fuel surcharges, as well as changes in the mix of customer traffic within a commodity group. Excluding the impact of foreign currency, average freight revenues per carload from our Australian Operations decreased23.2% to $537 for the three months ended September 30, 2017, compared with the same period in 2016. Average freight revenues per carload from existing operations, excluding the impact of foreign currency, increased25.9% to $880 for the three months ended September 30, 2017, compared with the same period in 2016. The increase in average freight revenues per carload from existing operations was primarily due to increased metallic ores shipments as a result of the recommencement of operations at a previously closed manganese mine and decreased minerals and stone shipments due to a temporary maintenance outage at a customer port facility.

The following information discusses the significant changes in our Australian Operations freight revenues from existing operations by commodity group excluding the impact of foreign currency.

Agricultural products revenues increased$2.0 million, or 48.9%, primarily due to a traffic increase of 4,539 carloads, or 52.6%, as a result of stronger mainland grain shipments in South Australia.

Metallic ores revenues increased$5.6 million, or 96.9%. Metallic ores traffic increased 3,508 carloads, or 72.4%, which increased revenues by $4.7 million, and average freight revenues per carload increased 14.2%, which increased revenues by $0.8 million. The carload increase was primarily due to the recommencement of operations at a previously closed manganese mine. The increase in average freight revenues per carload was due to a change in the mix of business.

Minerals and stone revenues decreased$1.2 million, or 60.3%, primarily due to a traffic decrease of 9,079 carloads as a result of a temporary maintenance outage at a customer port facility.

Freight revenues from all remaining commodities combined increased by $0.6 million.

Freight-Related Revenues

Excluding a $1.0 millionincrease due to the impact of foreign currency appreciation, freight-related revenues from our Australian Operations, which includes revenues from railcar switching, track access rights, crewing services, storage and other ancillary revenues related to the movement of freight, decreased$11.6 million, or 47.4%, to $12.9 million for the three months ended September 30, 2017, compared with $24.5 million for the three months ended September 30, 2016. Excluding $11.3 million of freight-related revenues for services provided by Freightliner Australia to GRail for the three months ended September 30, 2017, which were eliminated in our consolidated freight-related revenues, our freight-related revenues from existing operations decreased$0.3 million, or 1.3%.

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All Other Revenues

Excluding the impact of foreign currency appreciation, all other revenues from our Australian Operations, which includes revenues from third-party railcar and locomotive repairs, property rentals and other ancillary revenues not directly related to the movement of freight, increased$0.5 million, or 35.5%, to $2.0 million for the three months ended September 30, 2017, compared with $1.5 million for the three months ended September 30, 2016.

Operating Expenses

Total operating expenses from our Australian Operations for the three months ended September 30, 2017increased$9.2 million, or 18.5%, to $59.0 million, compared with $49.8 million for the three months ended September 30, 2016. The increase in operating expenses consisted of $8.7 million from new operations and $2.0 million from the appreciation of the Australian dollar relative to the United States dollar, partially offset by a decrease of $1.5 million from existing operations. The following table sets forth operating expenses from our Australian Operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,									Increase/(Decrease)			Currency Impact		2016 Constant Currency*		Increase/(Decrease) Constant Currency*
	2017					2016
	Amount			% of Operating Revenues		Amount		% of Operating Revenues
Labor and benefits	$	17,618		21.6	%	$	16,753	30.9	%	$	865		$	690	$	17,443	$	175
Equipment rents	1,480			1.8	%	1,559		2.9	%	(79		)	65		1,624		(144		)
Purchased services	7,139			8.8	%	6,083		11.2	%	1,056			249		6,332		807
Depreciation and amortization	15,753			19.4	%	7,129		13.2	%	8,624			294		7,423		8,330
Diesel fuel used in train operations	6,003			7.4	%	5,467		10.1	%	536			224		5,691		312
Casualties and insurance	1,367			1.7	%	1,938		3.6	%	(571		)	78		2,016		(649		)
Materials	3,398			4.2	%	2,744		5.1	%	654			116		2,860		538
Trackage rights	3,500			4.3	%	2,884		5.3	%	616			117		3,001		499
Net gain on sale and impairment of assets	(37		)	—	%	10		—	%	(47		)	—		10		(47		)
Restructuring costs	—			—	%	73		0.1	%	(73		)	2		75		(75		)
Other expenses	2,773			3.4	%	5,138		9.5	%	(2,365		)	214		5,352		(2,579		)
Total operating expenses	$	58,994		72.6	%	$	49,778	91.9	%	$	9,216		$	2,049	$	51,827	$	7,167

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following information discusses the significant changes in operating expenses of our Australian Operations excluding a $2.0 millionincrease from the impact of foreign currency appreciation.

Depreciation and amortization expense was $15.8 million for the three months ended September 30, 2017, compared with $7.4 million for the three months ended September 30, 2016, an increase of $8.3 million. The increase was primarily attributable to new operations.

Other expenses were $2.8 million for the three months ended September 30, 2017, compared with $5.4 million for the three months ended September 30, 2016, a decrease of $2.6 million. The decrease was primarily attributable to corporate development and related expenses in 2016 related to the GRail acquisition.

Operating Income/Operating Ratio

Our Australian Operations had operating income of $22.3 million for the three months ended September 30, 2017, compared with $4.4 millionfor the three months ended September 30, 2016. Operating income for the three months ended September 30, 2016 included corporate development and related costs of $2.9 million, primarily related to the GRail Transactions. The operating ratio was 72.6% for the three months ended September 30, 2017, compared with 91.9% for the three months ended September 30, 2016.

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U.K./European Operations

Operating Revenues

The following table sets forth our U.K./European Operations operating revenues and carloads by new operations and existing operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,								Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	2017						2016
	Total Operations		New Operations		Existing Operations				Amount			%		Amount			%
Freight revenues	$	91,363	$	—	$	91,363	$	88,341	$	3,022		3.4	%	$	3,022		3.4	%	$	1,555
Freight-related revenues	67,757		28,070		39,687		43,873		23,884			54.4	%	(4,186		)	(9.5	)%	572
All other revenues	17,610		11,144		6,466		4,444		13,166			NM		2,022			45.5	%	17
Total operating revenues	$	176,730	$	39,214	$	137,516	$	136,658	$	40,072		29.3	%	$	858		0.6	%	$	2,144
Carloads	282,780		—		282,780		294,283		(11,503		)	(3.9	)%	(11,503		)	(3.9	)%

Freight Revenues

The following table sets forth the changes in our U.K./European Operations freight revenues by commodity group for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,								Increase/(Decrease)			Currency Impact		2016 Constant Currency*		Increase/(Decrease) Constant Currency*
	2017				2016
Commodity Group	Amount		% of Total		Amount		% of Total
Agricultural Products	$	964	1.1	%	$	628	0.7	%	$	336		$	45	$	673	$	291
Coal & coke	2,345		2.6	%	3,199		3.6	%	(854		)	65		3,264		(919		)
Intermodal	67,374		73.7	%	67,553		76.5	%	(179		)	585		68,138		(764		)
Minerals & Stone	20,680		22.6	%	16,961		19.2	%	3,719			860		17,821		2,859
Total freight revenues	$	91,363	100.0	%	$	88,341	100.0	%	$	3,022		$	1,555	$	89,896	$	1,467

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following table sets forth our U.K./European Operations freight revenues, carloads and average freight revenues per carload for the three months ended September 30, 2017 and 2016 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads		Average Freight Revenues Per Carload
	Three Months Ended September 30,								Three Months Ended September 30,		Three Months Ended September 30,
	2017				2016 Constant Currency*
Commodity Group	Amount		% of Total		Amount		% of Total		2017	2016	2017		2016		2016 Constant Currency*
Agricultural Products	$	964	1.1	%	$	673	0.7	%	777	652	$	1,241	$	963	$	1,032
Coal & Coke	2,345		2.6	%	3,264		3.6	%	3,798	9,276	617		345		352
Intermodal	67,374		73.7	%	68,138		75.9	%	229,059	239,055	294		283		285
Minerals & Stone	20,680		22.6	%	17,821		19.8	%	49,146	45,300	421		374		393
Total	$	91,363	100.0	%	$	89,896	100.0	%	282,780	294,283	$	323	$	300	$	305

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Total traffic from our U.K./European Operations decreased11,503 carloads, or 3.9%, for the three months ended September 30, 2017, compared with the same period in 2016. The traffic decrease was principally due to decreases of 9,996 carloads of intermodal traffic and 5,478 carloads of coal and coke traffic, partially offset by an increase of 3,846 carloads of minerals and stone traffic. All remaining traffic increased by 125 carloads.

Changes in average freight revenues per carload in a commodity group can be impacted by changes in customer rates and fuel surcharges, as well as changes in the mix of customer traffic within a commodity group. Excluding the impact of foreign currency, average freight revenues per carload from our U.K./European Operations increased5.9% to $323 for the three months ended September 30, 2017, compared with the same period in 2016.

49

The following information discusses the significant changes in our U.K./European Operations freight revenues by commodity group excluding the impact of foreign currency.

Coal and coke revenues decreased$0.9 million, or 28.2%. Coal and coke traffic decreased 5,478 carloads, or 59.1%, which decreased revenues by $3.4 million, while average freight revenues per carload increased 75.3%, which increased revenues by $2.5 million. The decrease in carloads was primarily due to lower demand for steam coal in the U.K., largely as a result of competition from natural gas power generation and an increase in the carbon tax. The increase in average freight revenues per carload was primarily due to a change in the mix of business in the U.K.

Intermodal revenues decreased$0.8 million, or 1.1%. Intermodal traffic decreased 9,996 carloads, or 4.2%, which decreased revenues by $2.9 million, while average freight revenues per carload increased 3.2%, which increased revenues by $2.2 million. The decrease in carloads was primarily due to the discontinuation of certain routes in Continental Europe as part of our restructuring plan.

Minerals and stone revenues increased$2.9 million, or 16.0%. Minerals and stone traffic increased 3,846 carloads, or 8.5%, which increased revenues by $1.6 million, and average freight revenues per carload increased 7.1%, which increased revenues by $1.2 million. The increase was primarily due to higher construction aggregates shipments in Poland.

Freight revenues from all remaining commodities combined increased by $0.3 million.

Freight-Related Revenues

Freight-related revenues from our U.K./European Operations include trucking haulage services, container storage and switching services, as well as infrastructure services where we operate work trains for the track infrastructure owner. Freight-related revenues in the U.K./Europe also include traction service (or hook and pull), which requires us to provide locomotives and drivers to move a customer's train between specified origin and destination points, and other ancillary revenues related to the movement of freight.

Excluding a $0.6 millionincrease due to the impact of foreign currency appreciation, freight-related revenues from our U.K./European Operations increased$23.3 million, or 52.5%, to $67.8 million for the three months ended September 30, 2017, compared with $44.4 million for the three months ended September 30, 2016. The increase included $28.1 million from new operations, partially offset by a $4.8 million decrease from existing operations. The decrease from existing operations was primarily due to the discontinuation of certain routes in Continental Europe following the completion of the restructuring of ERS in the first half of 2017 and decreased infrastructure revenues in the U.K.

All Other Revenues

Excluding the impact of foreign currency appreciation, all other revenues from our U.K./European Operations, which includes revenues from container sales, third-party car and locomotive repairs, property rentals and other ancillary revenues not directly related to the movement of freight, increased$13.1 million to $17.6 million for the three months ended September 30, 2017, compared with $4.5 million for the three months ended September 30, 2016. The increase included $11.1 million from new operations, primarily from container sales and container repairs at Pentalver, and $2.0 million from existing operations. The increase from existing operations was primarily due to increased crewing revenues in the U.K.

50

Operating Expenses

Total operating expenses from our U.K./European Operations increased $33.3 million, or 24.4%, to $169.6 million for the three months ended September 30, 2017, compared with $136.3 million for the three months ended September 30, 2016. The increase consisted of $38.0 million from new operations, partially offset by a $4.7 million decrease from existing operations. The decrease from existing operations included decreases of $5.4 million in equipment rents, $2.6 million in electricity used in train operations and $2.0 million in trackage rights, partially offset by increases of $2.3 million in restructuring costs, $1.0 million in diesel fuel used in train operations and $2.2 million due to the impact of foreign currency appreciation. The following table sets forth operating expenses from our U.K./European Operations for the three months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30,										Increase/(Decrease)			Currency Impact		2016 Constant Currency*			Increase/(Decrease) Constant Currency*
	2017					2016
	Amount			% of Operating Revenues		Amount			% of Operating Revenues
Labor and benefits	$	47,527		26.9	%	$	42,056		30.8	%	$	5,471		$	142	$	42,198		$	5,329
Equipment rents	19,188			10.9	%	21,012			15.4	%	(1,824		)	479		21,491			(2,303		)
Purchased services	46,169			26.1	%	29,701			21.7	%	16,468			824		30,525			15,644
Depreciation and amortization	8,433			4.8	%	6,627			4.9	%	1,806			52		6,679			1,754
Diesel fuel used in train operations	11,598			6.6	%	10,450			7.7	%	1,148			146		10,596			1,002
Electricity used in train operations	765			0.4	%	3,226			2.4	%	(2,461		)	130		3,356			(2,591		)
Casualties and insurance	769			0.4	%	1,169			0.9	%	(400		)	6		1,175			(406		)
Materials	15,377			8.7	%	4,712			3.4	%	10,665			10		4,722			10,655
Trackage rights	9,107			5.2	%	10,850			7.9	%	(1,743		)	283		11,133			(2,026		)
Net gain on sale and impairment of assets	(168		)	(0.1	)%	(78		)	(0.1	)%	(90		)	1		(77		)	(91		)
Restructuring costs	2,312			1.3	%	39			—	%	2,273			—		39			2,273
Other expenses	8,551			4.8	%	6,568			4.8	%	1,983			119		6,687			1,864
Total operating expenses	$	169,628		96.0	%	$	136,332		99.8	%	$	33,296		$	2,192	$	138,524		$	31,104

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following information discusses the significant changes in operating expenses from our U.K./European Operations excluding an increase of $2.2 million due to the impact of foreign currency appreciation.

Labor and benefits expense was $47.5 million for the three months ended September 30, 2017, compared with $42.2 million for the three months ended September 30, 2016, an increase of $5.3 million, or 12.6%. The increase consisted of $6.9 million from new operations, partially offset by a decrease of $1.6 million from existing operations. The decrease in existing operations was primarily due to reduced headcount as a result of the restructuring of the U.K. coal business and the discontinuation of certain routes in Continental Europe as part of our restructuring of ERS.

Equipment rents expense was $19.2 million for the three months ended September 30, 2017, compared with $21.5 million for the three months ended September 30, 2016, a decrease of $2.3 million, or 10.7%. The decrease consisted of $5.4 million from existing operations, partially offset by $3.1 million from new operations. The 2016 period included surplus lease costs in Continental Europe and higher locomotive lease costs in the U.K. that have since been renegotiated with more favorable terms resulting in lower equipment costs in 2017.

Purchased services expense, which consists of the costs of services provided by outside contractors for repairs and maintenance of locomotives, railcars and other equipment, as well as contract labor costs for crewing services, was $46.2 million for the three months ended September 30, 2017, compared with $30.5 million for the three months ended September 30, 2016, an increase of $15.6 million, or 51.2%. The increase consisted of $14.0 million from new operations and $1.7 million from existing operations. The increase from existing operations was primarily due to increased use of third-party contractors.

Depreciation and amortization expense was $8.4 million for the three months ended September 30, 2017, compared with $6.7 million for the three months ended September 30, 2016, an increase of $1.8 million, or 26.3%. The increase consisted of $1.2 million from new operations and $0.5 million from existing operations. The increase from existing operations was primarily attributable to a larger depreciable asset base in 2017 compared with 2016, reflecting capital spending in 2016.

51

Diesel fuel used in train operations was $11.6 million for the three months ended September 30, 2017, compared with $10.6 million for the three months ended September 30, 2016, an increase of $1.0 million, or 9.5%. The increase consisted of $0.6 million due to a 7.1% increase in average fuel cost per gallon and $0.4 million due to a 2.2% increase in diesel fuel consumption.

Electricity used in train operations was $0.8 million for the three months ended September 30, 2017, compared with $3.4 million for the three months ended September 30, 2016, a decrease of $2.6 million, or 77.2%. The decrease was primarily due to the reimbursement of prior year energy taxes as a result of an initiative by the German government, as well as the discontinuation of certain routes in Continental Europe as part of our restructuring plan.

Materials expense, which primarily consists of costs of containers sold to third parties, materials purchased for use in repairing and maintaining our locomotives, railcars, and other equipment as well as costs for general tools and supplies used in our business, was $15.4 million for the three months ended September 30, 2017, compared with $4.7 million for the three months ended September 30, 2016, an increase of $10.7 million. The increase consisted of $9.8 million from new operations and $0.8 million from existing operations.

Restructuring costs for the three months ended September 30, 2017 of $2.3 million included costs associated with the reorganization of certain activities in the U.K., as well as costs associated with ERS.

Other expenses were $8.6 million for the three months ended September 30, 2017, compared with $6.7 million for the three months ended September 30, 2016, an increase of $1.9 million, or 27.9%. The increase consisted of $2.7 million from new operations, partially offset by a decrease of $0.8 million from existing operations.

Operating Income/Operating Ratio

Our U.K./European Operations had operating income of $7.1 million for the three months ended September 30, 2017, compared with $0.3 million for the three months ended September 30, 2016. Operating income for the three months ended September 30, 2017 included $2.3 million of restructuring costs and $1.6 million of corporate development and related costs, primarily related to the acquisition and integration of Pentalver. Operating income for the three months ended September 30, 2016 included $0.3 million of corporate development and related costs. The operating ratio was 96.0% for the three months ended September 30, 2017, compared with 99.8% for the three months ended September 30, 2016.

Nine Months EndedSeptember 30, 2017 Compared with Nine Months EndedSeptember 30, 2016

Consolidated Operating Results

Operating Revenues

The following table sets forth our operating revenues and carloads by new operations and existing operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,											Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	2017									2016
	Total Operations		New Operations		Eliminations(a)			Existing Operations		Total Operations		Amount			%		Amount			%
Freight revenues	$	1,161,635	$	110,436	$	—		$	1,051,199	$	1,017,003	$	144,632		14.2	%	$	34,196		3.4	%	$	(11,058	)
Freight-related revenues	387,881		46,830		(34,966		)	376,017		396,666		(8,785		)	(2.2	)%	(20,649		)	(5.2	)%	(5,766		)
All other revenues	86,952		19,630		—			67,322		71,324		15,628			21.9	%	(4,002		)	(5.6	)%	(1,137		)
Total operating revenues	$	1,636,468	$	176,896	$	(34,966	)	$	1,494,538	$	1,484,993	$	151,475		10.2	%	$	9,545		0.6	%	$	(17,961	)
Carloads	2,445,458		304,242		—			2,141,216		2,128,114		317,344			14.9	%	13,102			0.6	%

(a) Represents revenues for services provided by Freightliner Australia to GRail, which were eliminated in our consolidated revenues.

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Operating Expenses

Total operating expenses for the nine months ended September 30, 2017increased$97.2 million, or 7.8%, to $1,346.2 million, compared with $1,249.0 million for the nine months ended September 30, 2016. The increase included $112.5 million from new operations, partially offset by a decrease of $15.3 million from existing operations. The decrease from existing operations was primarily due to a $17.9 million decrease from the net depreciation of foreign currencies relative to the United States dollar as well as decreases of $17.4 million in equipment rents and $3.6 million in electricity used in train operations. These decreases were partially offset by increases of $21.2 million in the cost of diesel fuel used in train operations, $7.9 million in depreciation and amortization, $4.3 million in labor and benefits, $3.3 million in purchased services, $3.2 million in casualties and insurance and $2.9 million in restructuring costs. Total operating expenses for the nine months ended September 30, 2016 included a $13.0 million impairment of a rolling-stock maintenance facility and an accounts receivable reserve of $8.1 million, both of which were associated with an iron ore/steel making customer in Australia that entered into voluntary administration in April 2016.

The following table sets forth our total operating expenses for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,									Increase/(Decrease)			Currency Impact			2016 Constant Currency*		Increase/(Decrease)Constant Currency*
	2017					2016
	Amount			% of Operating Revenues		Amount		% of Operating Revenues
Labor and benefits	$	496,128		30.3	%	$	475,297	32.0	%	$	20,831		$	(7,805	)	$	467,492	$	28,636
Equipment rents	100,399			6.1	%	113,634		7.7	%	(13,235		)	(3,117		)	110,517		(10,118		)
Purchased services	176,358			10.8	%	149,125		10.0	%	27,233			(2,465		)	146,660		29,698
Depreciation and amortization	186,509			11.4	%	151,095		10.2	%	35,414			(416		)	150,679		35,830
Diesel fuel used in train operations	105,718			6.5	%	83,851		5.7	%	21,867			(1,047		)	82,804		22,914
Electricity used in train operations	6,072			0.4	%	9,895		0.7	%	(3,823		)	(259		)	9,636		(3,564		)
Casualties and insurance	33,346			2.0	%	28,814		1.9	%	4,532			(56		)	28,758		4,588
Materials	77,861			4.8	%	62,662		4.2	%	15,199			(945		)	61,717		16,144
Trackage rights	66,652			4.1	%	64,509		4.3	%	2,143			(1,029		)	63,480		3,172
Net (gain)/loss on sale and impairment of assets	(1,096		)	(0.1	)%	11,993		0.8	%	(13,089		)	203			12,196		(13,292		)
Restructuring costs	8,744			0.5	%	6,320		0.4	%	2,424			(453		)	5,867		2,877
Other expenses	89,494			5.5	%	91,757		6.2	%	(2,263		)	(495		)	91,262		(1,768		)
Total operating expenses	$	1,346,185		82.3	%	$	1,248,952	84.1	%	$	97,233		$	(17,884	)	$	1,231,068	$	115,117

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Operating Income/Operating Ratio

Operating income was $290.3 million for the nine months ended September 30, 2017, compared with $236.0 million for the nine months ended September 30, 2016. Operating income for the nine months ended September 30, 2017 included corporate development and related costs of $10.8 million, primarily related to the acquisition and integration of P&W and Pentalver, as well as expenses related to other corporate development projects, and restructuring costs of $8.7 million, primarily associated with our U.K./Europe Region. Operating income for the nine months ended September 30, 2016 included impairment and related costs of $21.1 million, consisting of a $13.0 million impairment of a rolling-stock maintenance facility and an accounts receivable reserve of $8.1 million, both of which were associated with an iron ore/steel making customer in Australia entering into voluntary administration. Operating income for the nine months ended September 30, 2016 also included corporate development and related costs of $7.3 million, primarily associated with the GRail and P&W transactions, and restructuring costs of $6.3 million, primarily related the restructuring of the U.K. coal business. Our operating ratio was 82.3% for the nine months ended September 30, 2017, compared with 84.1% for the nine months ended September 30, 2016.

53

Interest Expense

Interest expense was $80.4 million for the nine months ended September 30, 2017, compared with $53.0 million for the nine months ended September 30, 2016. The increase in interest expense was primarily due to a higher debt balance resulting from the GRail Transactions in December 2016, as well as higher interest rates in 2017 compared with 2016.

Provision for Income Taxes

Our effective income tax rate for the nine months ended September 30, 2017 was 38.9%, compared with 29.2% for the nine months ended September 30, 2016. Our provision for income taxes for the nine months ended September 30, 2017 included the recognition of $3.3 million of previously unrecognized tax benefits resulting from the lapse of the statute of limitations on acquired liabilities for uncertain tax positions and a tax provision of $1.3 million related to enacted state income tax rate changes. Our provision for income taxes for the nine months ended September 30, 2016 included an income tax benefit of $21.4 million associated with the United States Short Line Tax Credit, which expired of December 31, 2016, as well as an income tax benefit of $4.3 million associated with a reduction in the U.K. income tax rate, which was enacted in September 2016. Our provision for income taxes for the nine months ended September 30, 2016 also included a valuation allowance of A$2.6 million (or $2.0 million at the average exchange rate in March of 2016) associated with the impairment of GWA's now idle rolling-stock maintenance facility (see Note 2, Changes in Operations, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report) that was formerly used in connection with the Southern Iron rail haulage agreement with Arrium. For additional information regarding our provision for income taxes, see Note 10, Income Taxes, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

Net Income Attributable to G&W and Earnings Per Common Share

Net income attributable to G&W for the nine months ended September 30, 2017 was $122.5 million, compared with $132.2 million for the nine months ended September 30, 2016. Our basic EPS were $1.99 with 61.5 million weighted average shares outstanding for the nine months ended September 30, 2017, compared with basic EPS of $2.31 with 57.2 million weighted average shares outstanding for the nine months ended September 30, 2016. Our diluted EPS for the nine months ended September 30, 2017 were $1.96 with 62.4 million weighted average shares outstanding, compared with diluted EPS of $2.28 with 58.1 million weighted average shares outstanding for the nine months ended September 30, 2016. Our results for the nine months ended September 30, 2017 and 2016 included certain items affecting comparability between the periods as previously presented in the "Overview—Overview of Nine-Month Results—Items Affecting Comparability."

54

Operating Results by Segment

The following tables set forth results from our North American Operations, Australian Operations and U.K./European Operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30, 2017
	North American Operations			Australian Operations			U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	719,622		$	191,031		$	250,982		$	1,161,635
Freight-related revenues	186,814			36,089			164,978			387,881
All other revenues	47,641			4,866			34,445			86,952
Total operating revenues	$	954,077		$	231,986		$	450,405		$	1,636,468
Operating expenses:
Labor and benefits	315,210			52,447			128,471			496,128
Equipment rents	39,993			4,215			56,191			100,399
Purchased services	45,350			19,821			111,187			176,358
Depreciation and amortization	117,822			45,915			22,772			186,509
Diesel fuel used in train operations	54,038			18,913			32,767			105,718
Electricity used in train operations	—			—			6,072			6,072
Casualties and insurance	26,532			4,219			2,595			33,346
Materials	38,413			8,629			30,819			77,861
Trackage rights	28,732			10,392			27,528			66,652
Net gain on sale and impairment of assets	(870		)	(59		)	(167		)	(1,096		)
Restructuring costs	384			338			8,022			8,744
Other expenses	59,206			7,471			22,817			89,494
Total operating expenses	724,810			172,301			449,074			1,346,185
Operating income	$	229,267		$	59,685		$	1,331		$	290,283
Operating ratio	76.0		%	74.3		%	99.7		%	82.3		%
Interest expense, net	$	29,928		$	41,500		$	7,732		$	79,160
Provision for/(benefit from) income taxes	$	78,133		$	4,805		$	(906	)	$	82,032
Expenditures for additions to property & equipment, net of grants from outside parties	$	105,940		$	9,721		$	17,446		$	133,107
Carloads	1,207,760			419,156			818,542			2,445,458

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	Nine Months Ended September 30, 2016
	North American Operations			Australian Operations			U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	681,154		$	80,390		$	255,459		$	1,017,003
Freight-related revenues	184,627			76,142			135,897			396,666
All other revenues	48,766			4,699			17,859			71,324
Total operating revenues	$	914,547		$	161,231		$	409,215		$	1,484,993
Operating expenses:
Labor and benefits	295,603			49,321			130,373			475,297
Equipment rents	43,481			4,884			65,269			113,634
Purchased services	47,171			17,432			84,522			149,125
Depreciation and amortization	110,398			21,018			19,679			151,095
Diesel fuel used in train operations	41,578			14,042			28,231			83,851
Electricity used in train operations	—			—			9,895			9,895
Casualties and insurance	20,398			5,026			3,390			28,814
Materials	38,168			8,033			16,461			62,662
Trackage rights	26,799			7,201			30,509			64,509
Net (gain)/loss on sale and impairment of assets	(851		)	12,992			(148		)	11,993
Restructuring costs	805			789			4,726			6,320
Other expenses	54,843			18,491			18,423			91,757
Total operating expenses	678,393			159,229			411,330			1,248,952
Operating income/(loss)	$	236,154		$	2,002		$	(2,115	)	$	236,041
Operating ratio	74.2		%	98.8		%	100.5		%	84.1		%
Interest expense, net	$	29,730		$	6,963		$	15,529		$	52,222
Provision for/(benefit from) income taxes	$	59,354		$	521		$	(5,312	)	$	54,563
Expenditures for additions to property & equipment, net of grants from outside parties	$	95,282		$	8,094		$	26,195		$	129,571
Carloads	1,171,314			134,006			822,794			2,128,114

North American Operations

Operating Revenues

The following table sets forth our North American Operations operating revenues and carloads by new operations and existing operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,								Increase/(Decrease) in Total Operations					Increase/(Decrease) in Existing Operations					Currency Impact
	2017						2016
	Total Operations		New Operations		Existing Operations		Total Operations		Amount			%		Amount			%
Freight revenues	$	719,622	$	24,144	$	695,478	$	681,154	$	38,468		5.6	%	$	14,324		2.1	%	$	482
Freight-related revenues	186,814		875		185,939		184,627		2,187			1.2	%	1,312			0.7	%	179
All other revenues	47,641		853		46,788		48,766		(1,125		)	(2.3	)%	(1,978		)	(4.1	)%	105
Total operating revenues	$	954,077	$	25,872	$	928,205	$	914,547	$	39,530		4.3	%	$	13,658		1.5	%	$	766
Carloads	1,207,760		32,757		1,175,003		1,171,314		36,446			3.1	%	3,689			0.3	%

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Freight Revenues

The following table sets forth the changes in our North American Operations freight revenues by commodity group segregated into new operations and existing operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

					Increase/(Decrease) in Total Operations			New Operations	Currency Impact		2016 Constant Currency*		Increase/(Decrease) in Existing Operations Constant Currency*
	Nine Months Ended September 30,
Commodity Group	2017		2016
Agricultural Products	$	92,956	$	84,601	$	8,355		1,328	$	66	84,667		6,961
Autos & Auto Parts	17,019		13,373		3,646			2,092	9		13,382		1,545
Chemicals & Plastics	111,660		103,569		8,091			6,493	95		103,664		1,503
Coal & Coke	57,123		53,311		3,812			—	25		53,336		3,787
Food & Kindred Products	24,856		24,956		(100		)	508	11		24,967		(619		)
Intermodal	726		12		714			725	—		12		(11		)
Lumber & Forest Products	64,903		63,013		1,890			1,680	28		63,041		182
Metallic Ores	10,519		13,078		(2,559		)	1	16		13,094		(2,576		)
Metals	78,681		78,327		354			1,780	59		78,386		(1,485		)
Minerals & Stone	97,446		85,440		12,006			5,797	28		85,468		6,181
Petroleum Products	50,696		52,335		(1,639		)	1,299	38		52,373		(2,976		)
Pulp & Paper	79,690		79,087		603			1,068	105		79,192		(570		)
Waste	19,000		15,552		3,448			850	2		15,554		2,596
Other	14,347		14,500		(153		)	523	—		14,500		(676		)
Total freight revenues	$	719,622	$	681,154	$	38,468		24,144	$	482	$	681,636	$	13,842

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

57

The following table sets forth our North American Operations freight revenues, carloads and average freight revenues per carload for the nine months ended September 30, 2017 and 2016 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads		Average Freight Revenues Per Carload
	Nine Months Ended September 30,								Nine Months Ended September 30,		Nine Months Ended September 30,
	2017				2016 Constant Currency*
Commodity Group	Amount		% of Total		Amount		% of Total		2017	2016	2017		2016		2016 Constant Currency*
Agricultural Products	$	92,956	13.0	%	$	84,667	12.4	%	157,792	159,369	$	589	$	531	$	531
Autos & Auto Parts	17,019		2.4	%	13,382		2.0	%	27,705	21,987	614		608		609
Chemicals & Plastics	111,660		15.5	%	103,664		15.2	%	134,561	131,636	830		787		788
Coal & Coke	57,123		7.9	%	53,336		7.8	%	170,664	157,943	335		338		338
Food & Kindred Products	24,856		3.5	%	24,967		3.7	%	44,091	44,969	564		555		555
Intermodal	726		0.1	%	12		—	%	7,313	136	99		88		88
Lumber & Forest Products	64,903		9.0	%	63,041		9.3	%	105,020	104,646	618		602		602
Metallic Ores	10,519		1.5	%	13,094		1.9	%	13,840	16,883	760		775		776
Metals	78,681		10.9	%	78,386		11.5	%	104,496	103,764	753		755		755
Minerals & Stone	97,446		13.5	%	85,468		12.5	%	160,917	149,093	606		573		573
Petroleum Products	50,696		7.0	%	52,373		7.7	%	73,821	76,410	687		685		685
Pulp & Paper	79,690		11.1	%	79,192		11.6	%	120,831	124,017	660		638		639
Waste	19,000		2.6	%	15,554		2.3	%	39,461	33,226	481		468		468
Other	14,347		2.0	%	14,500		2.1	%	47,248	47,235	304		307		307
Total	$	719,622	100.0	%	$	681,636	100.0	%	1,207,760	1,171,314	$	596	$	582	$	582

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Total traffic from our North American Operations increased36,446 carloads, or 3.1%, for the nine months ended September 30, 2017, compared with the same period in 2016. The increase consisted of 32,757 carloads from new operations and 3,689 carloads from existing operations. The increase in traffic from existing operations was principally due to increases of 12,721 carloads of coal and coke traffic, 5,124 carloads of waste traffic, 3,150 carloads of minerals and stone traffic and 2,788 carloads of autos and auto parts traffic, partially offset by decreases of 3,880 carloads of pulp and paper traffic, 3,725 carloads of petroleum products traffic, 3,043 carloads of metallic ores traffic, 2,740 carloads of agricultural products traffic, 1,739 carloads of lumber and forest products traffic and 1,601 carloads of food and kindred products traffic. All remaining traffic decreased by 3,366 carloads.

Changes in average freight revenues per carload in a commodity group may be impacted by changes in customer rates and fuel surcharges, as well as changes in the mix of customer traffic within a commodity group. Average freight revenues per carload from our North American Operations increased2.4% to $596 for the nine months ended September 30, 2017, compared with the same period in 2016. Average freight revenues per carload from existing operations increased1.7% to $592 for the nine months ended September 30, 2017, compared with the same period in 2016. A change in the mix of commodities decreased average freight revenues per carload by 0.7%, while higher fuel surcharges increased average freight revenues per carload by 0.4%. Excluding these factors, average freight revenues per carload from our North American Operations increased 2.0%.

The following information discusses the significant changes in our North American Operations freight revenues from existing operations by commodity group excluding the impact of foreign currency.

58

Agricultural products revenues increased$7.0 million, or 8.2%. Agricultural products average freight revenues per carload increased 10.2%, which increased revenues by $8.6 million, while traffic decreased 2,740 carloads, or 1.7%, which decreased revenues by $1.6 million. The increase in average freight revenues per carload was primarily driven by a change in the mix of business. The carload decrease was primarily due to reduced shipments as a result of modal competition, reduced export demand in the midwestern United States and plant closures in the southern United States, partially offset by increased grain shipments in the central United States during the first half of 2017.

Autos and auto parts revenues increased$1.5 million, or 11.5%, primarily due to a traffic increase of 2,788 carloads, or 12.7%, as a result of import spot shipments in the western United States and increased shipments in the midwestern United States related to a model conversion.

Chemicals and plastics revenues increased$1.5 million, or 1.4%. Chemicals and plastics average freight revenues per carload increased 2.5%, which increased revenues by $2.7 million, while traffic decreased 1,486 carloads, or 1.1%, which decreased revenues by $1.2 million. The carload decrease was primarily due to decreased shipments of industrial chemicals in the western United States.

Coal and coke revenues increased$3.8 million, or 7.1%, primarily due to a traffic increase of 12,721 carloads, or 8.1%, as a result of increased demand for coal power generation in the midwestern United States.

Metallic ores revenues decreased$2.6 million, or 19.7%, primarily due to a traffic decrease of 3,043 carloads, or 18.0%. The carload decrease was primarily due to the idling of an alumina customer facility in the southern United States in 2016 and lower production from a copper mining customer in the western United States.

Metals revenues decreased$1.5 million, or 1.9%. Metals average freight revenues per carload decreased 1.2%, which decreased revenues by $0.9 million, and traffic decreased 728 carloads, or 0.7%, which decreased revenues by $0.5 million. The carload decrease was primarily due to decreased shipments of pig iron.

Minerals and stone revenues increased$6.2 million, or 7.2%. Minerals and stone average freight revenues per carload increased 5.1%, which increased revenues by $4.3 million, and traffic increased 3,150 carloads, or 2.1%, which increased revenues by $1.9 million. The carload increase was primarily due to increased cement, clay, rock salt and frac sand shipments, partially offset by decreased shipments of construction aggregates.

Petroleum products revenues decreased$3.0 million, or 5.7%, primarily due to a traffic decrease of 3,725 carloads, or 4.9%. The carload decrease was primarily due to decreased shipments of liquid petroleum gases in the midwestern and western United States.

Waste revenues increased$2.6 million, or 16.7%, primarily due to a traffic increase of 5,124 carloads, or 15.4%, primarily resulting from new and expanded contracts in the midwestern United States.

Freight revenues from all remaining commodities combined decreased by a net $1.7 million.

Freight-Related Revenues

Excluding a $0.2 millionincrease due to the impact of foreign currency appreciation, freight-related revenues from our North American Operations, which includes revenues from railcar switching, track access rights, crewing services, storage and other ancillary revenues related to the movement of freight, increased$2.0 million, or 1.1%, to $186.8 million for the nine months ended September 30, 2017, compared with $184.8 million for the nine months ended September 30, 2016. The increase consisted of $1.1 million from existing operations and $0.9 million from new operations. The increase from existing operations was primarily due to the recognition of revenue from a multi-year take-or-pay volume shortfall under a crude-by-rail contract and increased storage revenues, partially offset by decreased demurrage revenues.

All Other Revenues

Excluding a $0.1 millionincrease due to the impact of foreign currency appreciation, all other revenues from our North American Operations, which includes revenues from third-party railcar and locomotive repairs, property rentals, railroad construction and other ancillary revenues not directly related to the movement of freight, decreased$1.2 million, or 2.5%, to $47.6 million for the nine months ended September 30, 2017, compared with $48.9 million for the nine months ended September 30, 2016. The decrease included $2.1 million from existing operations, partially offset by $0.9 million from new operations.

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Operating Expenses

Total operating expenses from our North American Operations increased$46.4 million, or 6.8%, to $724.8 million for the nine months ended September 30, 2017, compared with $678.4 million for the nine months ended September 30, 2016. The increase consisted of $25.2 million from new operations and $21.2 million from existing operations. The increase from existing operations was primarily due to an increase of $10.7 million in diesel fuel used in train operations, $6.9 million in labor and benefits, $5.6 million in depreciation and amortization and $5.2 million in casualties and insurance, partially offset by decreases of $5.7 million in equipment rents and $4.4 million in purchased services. In addition, the change from existing operations included a $0.7 millionincrease due to the impact of foreign currency appreciation.

The following table sets forth operating expenses from our North American Operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,																			Increase/(Decrease) Constant Currency*
	2017					2016								Currency Impact			2016 Constant Currency*
	Amount			% of Operating Revenues		Amount			% of Operating Revenues		Increase/(Decrease)
Labor and benefits	$	315,210		33.1	%	$	295,603		32.3	%	$	19,607		$	281		$	295,884		$	19,326
Equipment rents	39,993			4.2	%	43,481			4.8	%	(3,488		)	45			43,526			(3,533		)
Purchased services	45,350			4.8	%	47,171			5.2	%	(1,821		)	40			47,211			(1,861		)
Depreciation and amortization	117,822			12.3	%	110,398			12.1	%	7,424			181			110,579			7,243
Diesel fuel used in train operations	54,038			5.7	%	41,578			4.5	%	12,460			67			41,645			12,393
Casualties and insurance	26,532			2.8	%	20,398			2.2	%	6,134			13			20,411			6,121
Materials	38,413			4.0	%	38,168			4.2	%	245			49			38,217			196
Trackage rights	28,732			3.0	%	26,799			2.9	%	1,933			7			26,806			1,926
Net gain on sale and impairment of assets	(870		)	(0.1	)%	(851		)	(0.1	)%	(19		)	(5		)	(856		)	(14		)
Restructuring costs	384			—	%	805			0.1	%	(421		)	—			805			(421		)
Other expenses	59,206			6.2	%	54,843			6.0	%	4,363			59			54,902			4,304
Total operating expenses	$	724,810		76.0	%	$	678,393		74.2	%	$	46,417		$	737		$	679,130		$	45,680

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following information discusses the significant changes in operating expenses of our North American Operations excluding an increase of $0.7 million due to the impact of foreign currency appreciation.

Labor and benefits expense was $315.2 million for the nine months ended September 30, 2017, compared with $295.9 million for the nine months ended September 30, 2016, an increase of $19.3 million, or 6.5%. The increase consisted of $12.4 million from new operations, of which $2.7 million related to the P&W integration primarily due to severance costs, and $6.9 million, or 2.3%, from existing operations. The increase from existing operations was due primarily to annual wage increases.

Equipment rents expense was $40.0 million for the nine months ended September 30, 2017, compared with $43.5 million for the nine months ended September 30, 2016, a decrease of $3.5 million, or 8.1%. The decrease consisted of $5.7 million from existing operations, partially offset by $2.2 million from new operations. The decrease from existing operations was primarily due to reduced leased freight car expense due to certain leased cars being returned to lessors or converted to per diem leases, reduced leased locomotive expense due to buyouts of certain of our locomotive leases and reduced car hire expense.

Purchased services expense, which consists of the costs of services provided by outside contractors for repairs and

maintenance of track property, locomotives, railcars and other equipment, as well as contract labor costs for crewing services, was $45.4 million for the nine months ended September 30, 2017, compared with $47.2 million for the nine months ended September 30, 2016, a decrease of $1.9 million, or 3.9%. The decrease consisted of $4.4 million from existing operations, partially offset by $2.6 million from new operations. The decrease from existing operations was primarily due to a reduction in the use of third-party contractors for track repairs.

Depreciation and amortization expense was $117.8 million for the nine months ended September 30, 2017, compared with $110.6 million for the nine months ended September 30, 2016, an increase of $7.2 million, or 6.6%. The increase consisted of $5.6 million from existing operations and $1.6 million from new operations. The increase from existing operations was primarily attributable to a larger depreciable asset base in 2017 compared with 2016, reflecting capital spending in 2016.

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The cost of diesel fuel used in train operations was $54.0 million for the nine months ended September 30, 2017, compared with $41.6 million for the nine months ended September 30, 2016, an increase of $12.4 million, or 29.8%. The increase consisted of $10.7 million from existing operations and $1.7 million from new operations. The increase from existing operations consisted of $9.3 million due to a 22.0% increase in average fuel cost per gallon and $1.4 million due to a 3.1% increase in diesel fuel consumption.

Casualties and insurance expense was $26.5 million for the nine months ended September 30, 2017, compared with $20.4 million for the nine months ended September 30, 2016, an increase of $6.1 million, or 30.0%. The increase consisted of $5.2 million from existing operations and $0.9 million from new operations. The increase from existing operations was primarily attributable to an increase in derailments and washout expense in 2017.

Other expenses were $59.2 million for the nine months ended September 30, 2017, compared with $54.9 million for the nine months ended September 30, 2016, an increase of $4.3 million, or 7.8%. The increase consisted of $2.9 million from existing operations and $1.4 million from new operations. The increase from existing operations was primarily attributable to corporate development and related costs.

Operating Income/Operating Ratio

Operating income from our North American Operations was $229.3 million for the nine months ended September 30, 2017, compared with $236.2 million for the nine months ended September 30, 2016. Operating income for the nine months ended September 30, 2017 included corporate development and related costs of $7.4 million, about half of which related to the integration of P&W and the remainder to other corporate development projects. Operating income for the nine months ended September 30, 2016 included corporate development and related costs of $3.2 million and restructuring costs of $0.8 million. The operating ratio was 76.0% for the nine months ended September 30, 2017, compared with 74.2% for the nine months ended September 30, 2016.

Australian Operations

Operating Revenues

The following table sets forth our Australian Operations operating revenues and carloads by new operations and existing operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,											Increase/(Decrease) in Total Operations					Increase/(Decrease) in  Existing Operations					Currency Impact
	2017									2016
	Total Operations		New Operations		Eliminations(a)			Existing Operations		Total Operations		Amount			%		Amount			%
Freight revenues	$	191,031	$	86,292	$	—		$	104,739	$	80,390	$	110,641		NM		$	24,349		30.3	%	$	2,616
Freight-related revenues	36,089		—		(34,966		)	71,055		76,142		(40,053		)	(52.6	)%	(5,087		)	(6.7	)%	2,414
All other revenues	4,866		—		—			4,866		4,699		167			3.6	%	167			3.6	%	142
Total operating revenues	$	231,986	$	86,292	$	(34,966	)	$	180,660	$	161,231	$	70,755		43.9	%	$	19,429		12.1	%	$	5,172
Carloads	419,156		271,485		—			147,671		134,006		285,150			NM		13,665			10.2	%

(a) Represents revenues for services provided by Freightliner Australia to GRail, which were eliminated in our consolidated revenues.

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Freight Revenues

The following table sets forth the changes in our Australian Operations freight revenues by commodity group segregated into new operations and existing operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended				Increase/(Decrease) in Total Operations			New Operations		Currency Impact		2016 Constant Currency*		Increase/(Decrease) Existing Operations Constant Currency*
	September 30,
Commodity Group	2017		2016
Agricultural Products	$	17,737	$	13,319	$	4,418		$	—	$	430	$	13,749	$	3,988
Coal and Coke	86,292		—		86,292			86,292		—		—		—
Intermodal	52,113		49,305		2,808			—		1,579		50,884		1,229
Metallic Ores	29,595		11,490		18,105			—		401		11,891		17,704
Minerals & Stone	4,787		5,698		(911		)	—		186		5,884		(1,097		)
Petroleum Products	507		578		(71		)	—		20		598		(91		)
Total freight revenues	$	191,031	$	80,390	$	110,641		$	86,292	$	2,616	83,006		$	21,733

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following table sets forth our Australian Operations freight revenues, carloads and average freight revenues per carload for the nine months ended September 30, 2017 and 2016 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads		Average Freight Revenues Per Carload
	Nine Months Ended September 30,								Nine Months Ended September 30,		Nine Months Ended September 30,
	2017				2016 Constant Currency*
Commodity Group	Amount		% of Total		Amount		% of Total		2017	2016	2017		2016		2016 Constant Currency*
Agricultural Products	$	17,737	9.3	%	$	13,749	16.6	%	43,804	32,701	$	405	$	407	$	420
Coal & Coke	86,292		45.1	%	—		—	%	271,485	—	318		—		—
Intermodal	52,113		27.3	%	50,884		61.3	%	44,153	44,360	1,180		1,111		1,147
Metallic Ores	29,595		15.5	%	11,891		14.3	%	24,114	9,182	1,227		1,251		1,295
Minerals & Stone	4,787		2.5	%	5,884		7.1	%	35,394	47,552	135		120		124
Petroleum Products	507		0.3	%	598		0.7	%	206	211	2,461		2,739		2,834
Total	$	191,031	100.0	%	$	83,006	100.0	%	419,156	134,006	$	456	$	600	$	619

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Total traffic from our Australian Operations increased285,150 carloads for the nine months ended September 30, 2017, compared with the same period in 2016. The increase consisted of 271,485 carloads from new operations and 13,665 carloads from existing operations. The increase in traffic from existing operations was principally due to increases of 14,932 carloads of metallic ores traffic and 11,103 carloads of agricultural products traffic, partially offset by a decrease of 12,158 carloads of minerals and stone traffic. All remaining traffic decreased by 212 carloads.

Changes in average freight revenues per carload in a commodity group may be impacted by changes in customer rates and fuel surcharges, as well as changes in the mix of customer traffic within a commodity group. Excluding the impact of foreign currency, average freight revenues per carload from our Australian Operations decreased26.3% to $456 for the nine months ended September 30, 2017, compared with the same period in 2016. Average freight revenues per carload from existing operations excluding the impact of foreign currency increased14.5% to $709 for the nine months ended September 30, 2017, compared with the same period in 2016. The increase in average freight revenues per carload from existing operations was primarily due to increased metallic ores shipments as a result of the recommencement of operations at two previously closed iron ore and manganese mines and decreased minerals and stone shipments due to a temporary maintenance outage at a customer port facility.

The following information discusses the significant changes in our Australian Operations freight revenues from existing operations by commodity group excluding the impact of foreign currency.

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Agricultural products revenues increased$4.0 million, or 29.0%. Agricultural products traffic increased 11,103 carloads, or 34.0%, which increased revenues by $4.5 million, while average freight revenues per carload decreased 3.6%, which decreased revenues by $0.5 million. The carload increase was primarily due to stronger mainland grain shipments.

Intermodal revenues increased$1.2 million, or 2.4%, primarily due to an increase in average freight revenues per carload of 2.9%. The increase in average freight revenues per carload was primarily due to higher fuel surcharges.

Metallic ores revenues increased$17.7 million. Metallic ores traffic increased 14,932 carloads, which increased revenues by $18.3 million, while average freight revenues per carload decreased 5.3%, which decreased revenues by $0.6 million. The carload increase was primarily due to the recommencement of operations at two previously closed iron ore and manganese mines.

Minerals and stone revenues decreased$1.1 million, or 18.6%, primarily due to a traffic decrease of 12,158 carloads, or 25.6%. The carload decrease was primarily due to a temporary maintenance outage at a customer port facility.

Freight revenues from all remaining commodities combined decreased by less than $0.1 million.

Freight-Related Revenues

Excluding a $2.4 millionincrease due to the impact of foreign currency appreciation, freight-related revenues from our Australian Operations, which includes revenues from railcar switching, track access rights, crewing services, storage and other ancillary revenues related to the movement of freight, decreased$42.5 million, or 54.1%, to $36.1 million for the nine months ended September 30, 2017, compared with $78.6 million for the nine months ended September 30, 2016. Excluding $35.0 million of freight-related revenues for services provided by Freightliner Australia to GRail for the for the nine months ended September 30, 2017, which were eliminated in our consolidated freight-related revenues, our freight-related revenues from existing operations decreased$7.5 million. The decrease from existing operations was primarily due to the loss of the fixed payments from Arrium that we received in the first quarter of 2016 associated with our rail haulage agreement to serve their Southern Iron mine that is now closed and shipments of stockpiled manganese in 2016 at a previously closed customer mine facility. The decrease was partially offset by an increase in agricultural products-related switching revenues in 2017.

All Other Revenues

Excluding a $0.1 millionincrease due to the impact of foreign currency appreciation, all other revenues from our Australian Operations, which includes revenues from third-party railcar and locomotive repairs, property rentals and other ancillary revenues not directly related to the movement of freight, increased to $4.9 million for the nine months ended September 30, 2017, compared with $4.8 million for the nine months ended September 30, 2016.

Operating Expenses

Total operating expenses from our Australian Operations for the nine months ended September 30, 2017increased$13.1 million, or 8.2%, to $172.3 million, compared with $159.2 million for the nine months ended September 30, 2016. The increase consisted of $25.7 million from new operations, partially offset by a decrease of $12.7 million from existing operations. Operating expenses for the nine months ended September 30, 2016 included a $13.0 million impairment of a rolling-stock maintenance facility and an accounts receivable reserve of $8.1 million, both of which were associated with an iron ore/steel making customer entering into voluntary administration. In addition, the change from existing operations included a $4.9 millionincrease due to the impact of foreign currency appreciation.

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The following table sets forth operating expenses from our Australian Operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,																Increase/(Decrease) Constant Currency*
	2017					2016							Currency Impact		2016 Constant Currency*
	Amount			% of Operating Revenues		Amount		% of Operating Revenues		Increase/(Decrease)
Labor and benefits	$	52,447		22.7	%	$	49,321	30.6	%	$	3,126		$	1,626	$	50,947	$	1,500
Equipment rents	4,215			1.8	%	4,884		3.0	%	(669		)	162		5,046		(831		)
Purchased services	19,821			8.5	%	17,432		10.8	%	2,389			560		17,992		1,829
Depreciation and amortization	45,915			19.8	%	21,018		13.0	%	24,897			696		21,714		24,201
Diesel fuel used in train operations	18,913			8.2	%	14,042		8.7	%	4,871			458		14,500		4,413
Casualties and insurance	4,219			1.8	%	5,026		3.1	%	(807		)	168		5,194		(975		)
Materials	8,629			3.7	%	8,033		5.0	%	596			266		8,299		330
Trackage rights	10,392			4.5	%	7,201		4.5	%	3,191			242		7,443		2,949
Net (gain)/loss on sale and impairment of assets	(59		)	—	%	12,992		8.1	%	(13,051		)	200		13,192		(13,251		)
Restructuring costs	338			0.1	%	789		0.5	%	(451		)	13		802		(464		)
Other expenses	7,471			3.2	%	18,491		11.5	%	(11,020		)	462		18,953		(11,482		)
Total operating expenses	$	172,301		74.3	%	$	159,229	98.8	%	$	13,072		$	4,853	$	164,082	$	8,219

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following information discusses the significant changes in operating expenses of our Australian Operations excluding an increase of $4.9 million due to the impact of foreign currency appreciation.

Depreciation and amortization expense was $45.9 million for the nine months ended September 30, 2017, compared with $21.7 million for the nine months ended September 30, 2016, an increase of $24.2 million. The increase was primarily attributable to new operations.

The cost of diesel fuel used in train operations was $18.9 million for the nine months ended September 30, 2017, compared with $14.5 million for the nine months ended September 30, 2016, an increase of $4.4 million, or 30.4%. The increase consisted of $2.7 million due to an 18.4% increase in average fuel cost per gallon and $1.7 million due to a 10.2% increase in diesel fuel consumption.

Trackage rights expense was $10.4 million for the nine months ended September 30, 2017, compared with $7.4 million for the nine months ended September 30, 2016, an increase of $2.9 million, or 39.6%. The increase was primarily attributable to services for an iron ore customer that recommenced operations in July 2016, as well as increased grain shipments.

Net (gain)/loss on the sale and impairment of assets for the nine months ended September 30, 2016 of $13.0 million was primarily related to the impairment of a rolling-stock maintenance facility resulting from an iron ore/steel making customer entering voluntary administration.

Other expenses were $7.5 million for the nine months ended September 30, 2017, compared with $19.0 million for the nine months ended September 30, 2016, a decrease of $11.5 million, or 60.6%. The decrease was primarily due to an accounts receivable reserve recorded during the nine months ended September 30, 2016 associated with an iron ore/steel making customer entering into voluntary administration and corporate development and related costs associated with the GRail Transactions.

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Operating Income/Operating Ratio

Operating income from our Australian Operations was $59.7 million for the nine months ended September 30, 2017, compared with $2.0 million for the nine months ended September 30, 2016. Operating income for the nine months ended September 30, 2017 included $0.3 million of restructuring costs. For the nine months ended September 30, 2016, our Australian Operations recorded charges of $21.1 million, including a $13.0 million impairment of a rolling-stock maintenance facility and an associated accounts receivable reserve of $8.1 million, resulting from an iron ore/steel making customer entering voluntary administration. Operating income for the nine months ended September 30, 2016 also included $3.9 million of corporate development and related costs, primarily associated with the GRail Transactions, and $0.8 million of restructuring costs. The operating ratio was 74.3% for the nine months ended September 30, 2017, compared with 98.8% for the nine months ended September 30, 2016.

U.K./European Operations

Operating Revenues

The following table sets forth our U.K./European Operations operating revenues and carloads by new operations and existing operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,								Increase/(Decrease) in Total Operations					Decrease in Existing Operations
	2017						2016
	Total Operations		New Operations		Existing Operations		Total Operations		Amount			%		Amount			%		Currency Impact
Freight revenues	$	250,982	$	—	$	250,982	$	255,459	$	(4,477	)	(1.8	)%	$	(4,477	)	(1.8	)%	$	(14,156	)
Freight-related revenues	164,978		45,955		119,023		135,897		29,081			21.4	%	(16,874		)	(12.4	)%	(8,359		)
All other revenues	34,445		18,777		15,668		17,859		16,586			92.9	%	(2,191		)	(12.3	)%	(1,384		)
Total operating revenues	$	450,405	$	64,732	$	385,673	$	409,215	$	41,190		10.1	%	$	(23,542	)	(5.8	)%	$	(23,899	)
Carloads	818,542		—		818,542		822,794		(4,252		)	(0.5	)%	(4,252		)	(0.5	)%

Freight Revenues

The following table sets forth the changes in our U.K./European Operations freight revenues by commodity group for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,								Increase/(Decrease)			Currency Impact			2016 Constant Currency*	Increase/(Decrease) Constant Currency*
	2017				2016
Commodity Group	Amount		% of Total		Amount		% of Total
Agricultural Products	$	3,532	1.4	%	$	1,364	0.5	%	$	2,168		$	36		1,400	$	2,132
Coal & Coke	7,464		3.0	%	10,951		4.3	%	(3,487		)	(737		)	10,214	(2,750		)
Intermodal	190,163		75.7	%	201,001		78.8	%	(10,838		)	(13,092		)	187,909	2,254
Lumber & Forest Products	—				126		—	%	(126		)	(2		)	124	(124		)
Metallic Ores	—		—	%	40		—	%	(40		)	1			41	(41		)
Minerals & Stone	49,823		19.9	%	41,977		16.4	%	7,846			(362		)	41,615	8,208
Total freight revenues	$	250,982	100.0	%	$	255,459	100.0	%	$	(4,477	)	$	(14,156	)	241,303	$	9,679

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

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The following table sets forth our U.K./European Operations freight revenues, carloads and average freight revenues per carload for the nine months ended September 30, 2017 and 2016 (dollars in thousands, except average freight revenues per carload):

	Freight Revenues								Carloads		Average Freight Revenues Per Carload
	Nine Months Ended September 30,								Nine Months Ended September 30,		Nine Months Ended September 30,
	2017				2016 Constant Currency*
Commodity Group	Amount		% of Total		Amount		% of Total		2017	2016	2017		2016		2016 Constant Currency*
Agricultural Products	$	3,532	1.4	%	$	1,400	0.6	%	3,036	1,494	$	1,163	$	913	$	937
Coal & Coke	7,464		3.0	%	10,214		4.2	%	18,333	26,589	407		412		384
Intermodal	190,163		75.7	%	187,909		77.9	%	669,963	679,693	284		296		276
Lumber & Forest Products	—				124		0.1	%	—	315	—		400		394
Metallic Ores	—		—	%	41		—	%	—	93	—		430		441
Minerals & Stone	49,823		19.9	%	41,615		17.2	%	127,210	114,610	392		366		363
Total	$	250,982	100.0	%	$	241,303	100.0	%	818,542	822,794	$	307	$	310	$	293

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

Total traffic from our U.K./European Operations decreased4,252 carloads, or 0.5%, for the nine months ended September 30, 2017, compared with the same period in 2016. The traffic decrease was principally due to decreases of 9,730 carloads of intermodal traffic and 8,256 carloads of coal and coke traffic, partially offset by increases of 12,600 carloads of minerals and stone traffic and 1,542 carloads of agricultural products traffic. All remaining traffic decreased by 408 carloads.

Changes in average freight revenues per carload in a commodity group may be impacted by changes in customer rates and fuel surcharges, as well as changes in the mix of customer traffic within a commodity group. Excluding the impact of foreign currency, average freight revenues per carload from our U.K./European Operations increased4.8% to $307 for the nine months ended September 30, 2017, compared with the same period in 2016.

The following information discusses the significant changes in our U.K./European Operations freight revenues by commodity group excluding the impact of foreign currency.

Agricultural products revenues increased$2.1 million, primarily due to a traffic increase of 1,542 carloads in Poland due to the development of new business.

Coal and coke revenues decreased$2.8 million, or 26.9%. Coal and coke traffic decreased 8,256 carloads, or 31.1%, which decreased revenues by $3.4 million, while average freight revenues per carload increased 6.0%, which increased revenues by $0.6 million. The carload decrease was primarily due to lower demand for steam coal in the U.K., largely as a result of competition from natural gas power generation and an increase in the carbon tax, partially offset by increased spot traffic in Poland.

Intermodal revenues increased$2.3 million, or 1.2%. Intermodal average freight revenues per carload increased 2.9%, which increased revenues by $5.0 million, while traffic decreased 9,730 carloads, or 1.4%, which decreased revenues by $2.8 million. The carload decrease was primarily due to lower volumes in Continental Europe in 2017 due to the discontinuation of certain routes as part of our restructuring plan, partially offset by higher intermodal volumes in the U.K.

Minerals and stone revenues increased$8.2 million, or 19.7%. Minerals and stone traffic increased 12,600 carloads, or 11.0%, which increased revenues by $4.9 million, and average freight revenues per carload increased 8.0%, which increased revenues by $3.3 million. The carload increase was primarily due to higher construction aggregates shipments in Poland. The increase in average freight revenues per carload was primarily due to a change in the mix of business in the U.K.

Freight revenues from all remaining commodities combined decreased by $0.2 million.

Freight-Related Revenues

Freight-related revenues from our U.K./European Operations include trucking haulage services, container storage and switching services, as well as infrastructure services, where we operate work trains for the track infrastructure owner. Freight-related revenues in the U.K./Europe also include traction service (or hook and pull), which requires us to provide locomotives and drivers to move a customer's train between specified origin and destination points, and other ancillary revenues related to the movement of freight.

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Excluding an $8.4 milliondecrease due to the impact of foreign currency depreciation, freight-related revenues from our U.K./European Operations increased$37.4 million, or 29.4%, to $165.0 million for the nine months ended September 30, 2017, compared with $127.5 million for the nine months ended September 30, 2016. The increase in freight-related revenues consisted of $46.0 million from new operations, partially offset by a decrease of $8.5 million from existing operations. The decrease from existing operations was primarily due to the discontinuation of certain routes in Continental Europe following the completion of the restructuring of ERS in the first half of 2017 and decreased U.K. infrastructure revenues, partially offset by increased switching revenues in the U.K.

All Other Revenues

Excluding a $1.4 milliondecrease due to the impact of foreign currency depreciation, all other revenues from our U.K./European Operations, which includes revenues from container sales, third-party car and locomotive repairs, property rentals and other ancillary revenues not directly related to the movement of freight, increased$18.0 million to $34.4 million for the nine months ended September 30, 2017, compared with $16.5 million for the nine months ended September 30, 2016. The increase consisted of $18.8 million from new operations, primarily from container sales and container repairs at Pentalver, partially offset by a decrease of $0.8 million from existing operations. The decrease from existing operations was primarily due to reduced management and technical support revenues in Saudi Arabia resulting primarily from the timing of project deliverables, partially offset by increased crewing revenues.

Operating Expenses

Total operating expenses from our U.K./European Operations were $449.1 million for the nine months ended September 30, 2017, compared with $411.3 million for the nine months ended September 30, 2016, an increase of $37.7 million, or 9.2%. The increase included $61.6 million from new operations, partially offset by a decrease of $23.9 million from existing operations. The decrease from existing operations included a $23.5 million decrease due to the impact of foreign currency depreciation.

The following table sets forth operating expenses from our U.K./European Operations for the nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Nine Months Ended September 30,																			Increase/(Decrease) Constant Currency*
	2017					2016								Currency Impact			2016 Constant Currency*
	Amount			% of Operating Revenues		Amount			% of Operating Revenues		Increase/(Decrease)
Labor and benefits	$	128,471		28.4	%	$	130,373		31.8	%	$	(1,902	)	$	(9,712	)	$	120,661		$	7,810
Equipment rents	56,191			12.5	%	65,269			15.9	%	(9,078		)	(3,324		)	61,945			(5,754		)
Purchased services	111,187			24.7	%	84,522			20.7	%	26,665			(3,065		)	81,457			29,730
Depreciation and amortization	22,772			5.1	%	19,679			4.8	%	3,093			(1,293		)	18,386			4,386
Diesel fuel used in train operations	32,767			7.3	%	28,231			6.9	%	4,536			(1,572		)	26,659			6,108
Electricity used in train operations	6,072			1.3	%	9,895			2.4	%	(3,823		)	(259		)	9,636			(3,564		)
Casualties and insurance	2,595			0.6	%	3,390			0.8	%	(795		)	(237		)	3,153			(558		)
Materials	30,819			6.8	%	16,461			4.0	%	14,358			(1,260		)	15,201			15,618
Trackage rights	27,528			6.1	%	30,509			7.5	%	(2,981		)	(1,278		)	29,231			(1,703		)
Net loss/(gain) on sale and impairment of assets	(167		)	—	%	(148		)	—	%	(19		)	8			(140		)	(27		)
Restructuring costs	8,022			1.8	%	4,726			1.2	%	3,296			(466		)	4,260			3,762
Other expenses	22,817			5.1	%	18,423			4.5	%	4,394			(1,016		)	17,407			5,410
Total operating expenses	$	449,074		99.7	%	$	411,330		100.5	%	$	37,744		$	(23,474	)	$	387,856		$	61,218

* Constant currency amounts reflect the prior period results translated at the current period exchange rates.

The following information discusses the significant changes in operating expenses of our U.K./European Operations excluding a decrease of $23.5 million due to the impact of foreign currency depreciation.

Labor and benefits expense was $128.5 million for the nine months ended September 30, 2017, compared with $120.7 million for the nine months ended September 30, 2016, an increase of $7.8 million, or 6.5%. The increase consisted of $11.7 million from new operations, partially offset by a decrease of $3.9 million, or 3.2%, from existing operations. The decrease from existing operations was primarily due to reduced headcount as a result of the restructuring of the U.K. coal business and the discontinuation of certain routes in Continental Europe as part of our restructuring of ERS.

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Equipment rents expense was $56.2 million for the nine months ended September 30, 2017, compared with $61.9 million for the nine months ended September 30, 2016, a decrease of $5.8 million, or 9.3%. The decrease consisted of $10.8 million from existing operations, partially offset by $5.1 million from new operations. The 2016 period included surplus lease costs in Continental Europe and higher locomotive lease costs in the U.K. that have since been renegotiated with more favorable terms. These resulted in lower equipment costs in 2017 that were partially offset by additional locomotive lease expense in Poland to support increased aggregates and grain business.

Purchased services expense, which consists of the costs of services provided by outside contractors for repairs and maintenance of locomotives, railcars and other equipment, as well as contract labor costs for crewing services, was $111.2 million for the nine months ended September 30, 2017, compared with $81.5 million for the nine months ended September 30, 2016, an increase of $29.7 million, or 36.5%. The increase consisted of $22.2 million from new operations and $7.5 million from existing operations. The increase in existing operations was primarily due to cost reimbursements in 2016 as a result of disruptions caused by a temporary flood-related bridge outage in the U.K. In addition, the 2017 period included increased third-party costs for services performed at the ports, partially offset by a decrease due to the discontinuation of certain routes in Continental Europe as part of our restructuring plan.

Depreciation and amortization expense was $22.8 million for the nine months ended September 30, 2017, compared with $18.4 million for the nine months ended September 30, 2016, an increase of $4.4 million, or 23.9%. The increase consisted of $2.3 million from existing operations and $2.1 million from new operations. The increase from existing operations was primarily attributable to a larger depreciable asset base in 2017 compared with 2016, reflecting capital spending in 2016.

The cost of diesel fuel used in train operations was $32.8 million for the nine months ended September 30, 2017, compared with $26.7 million for the nine months ended September 30, 2016, an increase of $6.1 million, or 22.9%. The increase consisted of $4.7 million due to an 18.6% increase in average fuel cost per gallon and $1.5 million due to a 3.7% increase in diesel fuel consumption.

Electricity used in train operations was $6.1 million for the nine months ended September 30, 2017, compared with $9.6 million for the nine months ended September 30, 2016, a decrease of $3.6 million, or 37.0%. The decrease was primarily due to reimbursement of prior year energy taxes as a result of an initiative by the German government as well as the discontinuation of certain routes in Continental Europe as part of our restructuring plan.

Materials expense, which primarily consists of costs of containers sold to third parties, materials purchased for use in repairing and maintaining our locomotives, railcars, and other equipment as well as costs for general tools and supplies used in our business, was $30.8 million for the nine months ended September 30, 2017, compared with $15.2 million for the nine months ended September 30, 2016, an increase of $15.6 million. The increase consisted of $16.6 million from new operations, partially offset by a decrease of $1.0 million from existing operations. The decrease from existing operations was primarily due to timing of terminal infrastructure maintenance in the U.K. in 2016.

Trackage rights expense was $27.5 million for the nine months ended September 30, 2017, compared with $29.2 million for the nine months ended September 30, 2016, a decrease of $1.7 million, or 5.8%. The decrease was primarily due to the discontinuation of certain routes in Continental Europe as part of our restructuring plan, partially offset by increased construction aggregates shipments in Poland.

Restructuring costs for the nine months ended September 30, 2017 of $8.0 million were primarily related to our previously announced restructuring of ERS. Restructuring costs for the nine months ended September 30, 2016 of $4.7 million were primarily related to restructuring of the U.K. coal business.

Other expenses were $22.8 million for the nine months ended September 30, 2017, compared with $17.4 million for the nine months ended September 30, 2016, an increase of $5.4 million, or 31.1%. The increase consisted of $3.4 million from new operations and $2.0 million from existing operations. The increase from existing operations was primarily due to corporate development and related costs primarily associated with the acquisition and integration of Pentalver and an accounts receivable reserve associated with a customer entering into bankruptcy.

Operating Income/(Loss)/Operating Ratio

Operating income from our U.K./European Operations was $1.3 million for the nine months ended September 30, 2017, compared with an operating loss of $2.1 million for the nine months ended September 30, 2016. Operating income from our U.K./European Operations for the nine months ended September 30, 2017 included $8.0 million of restructuring costs and $3.7 million of corporate development and related costs. The operating loss from our U.K./European Operations for the nine months ended September 30, 2016 included $4.7 million of restructuring costs. The operating ratio was 99.7% for the nine months ended September 30, 2017, compared with 100.5% for the nine months ended September 30, 2016.

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Liquidity and Capital Resources

We had cash and cash equivalents of $80.3 million as of September 30, 2017, of which, $48.0 million was from our Australian Operations. In accordance with our Australia Partnership agreement, the cash and cash equivalents of our Australian Operations can be used for the following: 1) to make payments in the usual and regular course of business, 2) to pay down debt of the Partnership and 3) to make distributions to the Partners in proportion to their investments.

Based on current expectations, we believe our cash, together with our other liquid assets, anticipated future cash flows from operations, availability under our credit agreement, 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.

As of September 30, 2017, we had long-term debt, including current portion, of $2,384.7 million, which comprised 41.0% of our total capitalization, and $396.3 million of unused borrowing capacity under the Credit Agreement. At December 31, 2016, we had long-term debt, including current portion, totaling $2,359.5 million, which comprised 42.5% of our total capitalization.

During the nine months ended September 30, 2017 and 2016, we generated $350.4 million and $303.6 million, respectively, of cash from operating activities. Changes in working capital decreased net cash flows by $28.4 million and $30.6 million for the nine months ended September 30, 2017 and 2016, respectively.

During the nine months ended September 30, 2017 and 2016, our cash used in investing activities was $232.9 million and $117.2 million, respectively. For the nine months ended September 30, 2017, the primary drivers of cash used in investing activities were $107.6 million of net cash paid for acquisitions, including the acquisitions of Pentalver, HOG and a 50% joint venture in CG Railway, LLC, partially offset by proceeds received from a working capital adjustment related to the GRail acquisition, and $149.1 million of cash used for capital expenditures, including $4.3 million for new business investments, partially offset by $16.0 million of cash received from grants from outside parties for capital spending. For the nine months ended September 30, 2016, primary drivers of cash used in investing activities were $159.5 million of cash used for capital expenditures, including new business investments of $8.6 million, partially offset by $30.0 million in cash received from grants from outside parties for capital spending and $10.3 million of insurance proceeds for the replacement of assets.

During the nine months ended September 30, 2017 and 2016, our cash used in financing activities was $75.5 million and $197.7 million, respectively. For the nine months ended September 30, 2016, the primary driver of cash used in financing activities resulted from net payments on outstanding debt of $200.6 million.

Credit Agreement

We made scheduled quarterly principal payments under our Credit Agreement of $5.2 million on the United States term loan and £3.8 million (or $4.9 million at the exchange rate on the dates the payments were made) on our U.K. term loan during the nine months ended September 30, 2017. We also made prepayments on our United States term loan of $159.8 million.

For additional information regarding our Credit Agreement, see Note 6, Long-Term Debt, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

2017 Budgeted Capital Expenditures

The following table sets forth our budgeted capital expenditures for the year ending December 31, 2017 (dollars in thousands):

	2017 Budgeted
	Capital
	Expenditures
Track and equipment improvements, self-funded	$	195,000
Track and equipment improvements, subject to third-party funding	79,000
New business investments	39,000
Gross capital expenditures	$	313,000
Grants from outside parties	(61,000		)
Net capital expenditures	$	252,000
Less: Capital expenditures expected to be classified as cash flows from financing activities	13,000
Net capital expenditures expected to be classified as cash flows from investing activities	$	239,000

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During the nine months ended September 30, 2017, we incurred $148.9 million in aggregate capital expenditures related to current year projects of which we paid $136.6 million in cash and accrued $12.3 million in accounts payable as of September 30, 2017. Of the $17.6 million of grants from outside parties related to these current year projects, we received $6.9 million in cash and we expect to receive an additional $10.7 million, which was included in outstanding grant receivables from outside parties as of September 30, 2017.

The following table sets forth our capital expenditures incurred by segment for the nine months ended September 30, 2017 (dollars in thousands):

	Nine Months Ended
	September 30, 2017
	North American Operations			Australian Operations		U.K./European Operations		Total
Capital Expenditures:
Track and equipment, self-funded	$	98,179		$	9,134	$	15,759	$	123,072
Track and equipment, subject to third-party funding	21,514			—		—		21,514
New business investments	2,547			43		1,688		4,278
Gross capital expenditures	122,240			9,177		17,447		148,864
Grants from outside parties	(17,558		)	—		—		(17,558		)
Net capital expenditures classified as cash flows from investing activities	$	104,682		$	9,177	$	17,447	$	131,306
Capital expenditures classified as cash flows from financing activities	12,905			—		—		12,905
Net capital expenditures	$	117,587		$	9,177	$	17,447	$	144,211

Cash of $149.1 million paid for purchases of property and equipment during the nine months ended September 30, 2017 consisted of $136.6 million for 2017 capital projects and $12.5 million related to capital expenditures accrued in 2016. Grant proceeds from outside parties during the nine months ended September 30, 2017 consisted of $6.9 million for grants related to 2017 capital expenditures and $9.1 million for grants related to our capital expenditures from prior years.

In addition, during the nine months ended September 30, 2017, we paid $12.9 million to buyout locomotive leases for capital expenditures, which were classified as cash flows from financing activities.

We periodically receive grants for the upgrade and construction of rail lines and the upgrade of locomotives from federal, provincial, state and local agencies and other outside parties in the United States, Canada and Australia. These grants typically reimburse us for 50% to 100% of the actual cost of specific projects.

Recently Issued Accounting Standards

See Note 16, Recently Issued Accounting Standards, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report.

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, 2016 consisted of operating lease obligations, as well as credit/payment guarantees. There were no material changes in our off-balance sheet arrangements during the nine months ended September 30, 2017.

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Impact of Foreign Currencies on Consolidated Results

The financial statements of our foreign subsidiaries are prepared in the local currency of the respective subsidiary and translated into United States dollars based on the exchange rate at the end of the period for balance sheet items and, for the statement of operations, at the average rate for the period. Currency translation adjustments are reflected within the equity section of the balance sheet and are included in other comprehensive income/(loss). Upon complete or substantially complete liquidation of the underlying investment in the foreign subsidiary, cumulative translation adjustments are recognized in the consolidated statements of operations.

When comparing the effects of average foreign currency exchange rates on operating revenues and operating expenses during the three months ended September 30, 2017 and 2016, foreign currency translation had a net positive impact on our consolidated operating revenues and a net negative impact on our consolidated operating expenses. When comparing the effects of average foreign currency exchange rates on operating revenues and operating expenses during the nine months ended September 30, 2017 and 2016, foreign currency translation had a net negative impact on our consolidated operating revenues and a net positive impact on our consolidated operating expenses. Currency effects related to operating revenues and operating 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.

The following tables reflect the exchange rates used to translate the foreign entities respective local currency results into United States dollars as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016:

	September 30, 2017		December 31, 2016
United States dollar per Australian dollar	$	0.78	$	0.72
United States dollar per British pound	$	1.34	$	1.23
United States dollar per Canadian dollar	$	0.80	$	0.74
United States dollar per Euro	$	1.18	$	1.06

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
United States dollar per Australian dollar	$	0.79	$	0.76	$	0.77	$	0.74
United States dollar per British pound	$	1.31	$	1.31	$	1.28	$	1.39
United States dollar per Canadian dollar	$	0.80	$	0.77	$	0.77	$	0.76
United States dollar per Euro	$	1.17	$	1.12	$	1.11	$	1.12

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

During the nine months ended September 30, 2017, there were no material changes to the Quantitative and Qualitative Disclosures About Market Risk previously disclosed in our 2016 Annual Report on Form 10-K (see Note 7, Derivative Financial Instruments, to our Consolidated Financial Statements set forth in "Part I Item 1. Financial Statements" of this quarterly report).

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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 September 30, 2017. Consistent with the guidance issued by the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from management's report on internal control over financial reporting in the year following the acquisition, management excluded an assessment of the effectiveness of internal control over financial reporting related to P&W, GRail and Pentalver, whose total assets as a percentage of Genesee & Wyoming Inc.'s consolidated total assets as of September 30, 2017 and whose total revenues and operating income as a percentage of Genesee & Wyoming Inc.'s consolidated total revenues and consolidated operating income, respectively, for the three months ended September 30, 2017 were as follows:

	September 30, 2017
	P&W		GRail		Pentalver
Total assets as a % of G&W's total assets	2	%	13	%	2	%
	Three Months Ended September 30, 2017
	P&W		GRail		Pentalver
Total revenues as a % of G&W's total revenues	1	%	3	%	7	%
Operating income as a % of G&W's operating income	1	%	8	%	1	%

Based upon that evaluation and subject to the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2017, the disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Internal Control Over Financial Reporting — On November 1, 2016, we completed the acquisition of P&W and on December 1, 2016, we completed the acquisition of GRail. On May 3, 2017, we completed the acquisition of Pentalver. We extended our oversight and monitoring processes that support our internal control over financial reporting, as appropriate, to include P&W's, GRail's and Pentalver's financial position, results of operations and cash flow into our consolidated financial statements from the commencement date of each acquisition through September 30, 2017. We are continuing to integrate the acquired operations of these acquisitions into our overall internal control over financial reporting and related processes. Except as disclosed in this paragraph, there were no other changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we are a defendant in certain lawsuits resulting from our operations in the ordinary course as the nature of our business exposes us to the potential for various claims and litigation, including those related to property damage, personal injury, freight loss, labor and employment, environmental and other matters. We maintain insurance policies to mitigate the financial risk associated with such claims. However, any material changes to pending litigation or a catastrophic rail accident or series of accidents involving material freight loss or property damage, personal injuries or environmental liability or other claims or disputes that are not covered by insurance could have a material adverse effect on our results of operations, financial condition and liquidity.

In November 2014, we received a notice from the United States Environmental Protection Agency (EPA) requesting information under the Clean Water Act related to the discharge of crude oil as a result of a derailment of an Alabama & Gulf Coast Railway LLC (AGR) freight train in November 2013 in the vicinity of Aliceville, Alabama. A fine associated with the contamination has not yet been assessed and is not estimable.

We are also involved in several arbitrations related to contractual disputes that are not covered by insurance. In March 2017, CSX Transportation, Inc. (CSXT) initiated arbitration against several of our subsidiaries associated with freight revenue factors (or divisions) under certain operating agreements associated with leased railroads. CSXT is seeking to reduce certain of our freight revenue factors for the time period after August 21, 2016. We believe we have meritorious defenses against the CSXT claims. In an unrelated matter, on May 3, 2017, the AGR initiated arbitration related to the collection of outstanding liquidated damages under a volume commitment (or take-or-pay) contract with a customer. We believe we will prevail in the collection of approximately $13 million of outstanding liquidated damages. Although we expect to attain successful outcomes in each of these matters, arbitration is inherently uncertain and it is possible that an unfavorable ruling could have an adverse effect on our results of operations, financial condition and liquidity.

Management believes there are adequate provisions in the financial statements for any probable liabilities that may result from disposition of the pending lawsuits and the aforementioned arbitrations. Based upon currently available information, we do not believe it is reasonably possible that any such lawsuit or arbitration would be material to our results of operations or have a material adverse effect on our financial position or liquidity.

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 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

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

Period in 2017	(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) (or Approximate Dollar Value) that May Yet Be Purchased Under the Plans or Programs (2)
July 1 to July 31	—	$	—	—	$	300,000,000
August 1 to August 31	281	$	66.88	—	$	300,000,000
September 1 to September 30	34	$	68.56	—	$	300,000,000
Total	315	$	67.06	—	$	300,000,000

(1) The 315 shares acquired in the three months ended September 30, 2017 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 granted under our Third Amended and Restated 2004 Omnibus Plan.

(2) In conjunction with Amendment No. 1 to the Credit Agreement, the Board authorized the repurchase of up to $300.0 million of our Class A Common Stock and appointed a special committee of the Board to review and approve repurchases proposed by management.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

NONE

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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:	November 8, 2017	By:	/s/   TIMOTHY J. GALLAGHER
		Name:	Timothy J. Gallagher
		Title:	Chief Financial Officer (Principal Financial Officer)
Date:	November 8, 2017	By:	/s/ CHRISTOPHER F. LIUCCI
		Name:	Christopher F. Liucci
		Title:	Chief Accounting Officer (Principal Accounting Officer)

75

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
*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 September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language) includes: (i) Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (v) the Notes to Consolidated Financial Statements.

*Exhibit filed or furnished with this Report.

76

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 September 30, 2017, 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:	November 8, 2017	/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 September 30, 2017, 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:	November 8, 2017	/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, 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 September 30, 2017 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:	November 8, 2017
/s/ TIMOTHY J. GALLAGHER
Timothy J. Gallagher
Chief Financial Officer
Date:	November 8, 2017

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 80,277	$ 32,319
Accounts receivable, net	415,802	363,923
Materials and supplies	55,368	43,621
Prepaid expenses and other	39,464	45,475
Total current assets	590,911	485,338
PROPERTY AND EQUIPMENT, net	4,628,894	4,503,319
GOODWILL	1,187,189	1,125,596
INTANGIBLE ASSETS, net	1,575,900	1,472,376
DEFERRED INCOME TAX ASSETS, net	3,120	2,671
OTHER ASSETS	43,154	45,658
Total assets	8,029,168	7,634,958
CURRENT LIABILITIES:
Current portion of long-term debt	31,139	52,538
Accounts payable	254,555	266,867
Accrued expenses	168,168	159,705
Total current liabilities	453,862	479,110
LONG-TERM DEBT, less current portion	2,353,524	2,306,915
DEFERRED INCOME TAX LIABILITIES, net	1,252,499	1,162,221
DEFERRED ITEMS - grants from outside parties	315,113	301,383
OTHER LONG-TERM LIABILITIES	220,491	198,208
COMMITMENTS AND CONTINGENCIES
EQUITY:
Additional paid-in capital	1,674,195	1,651,703
Retained earnings	1,808,298	1,685,813
Accumulated other comprehensive loss	(131,139)	(211,336)
Treasury stock, at cost	(235,623)	(232,348)
Total Genesee & Wyoming Inc. stockholders' equity	3,116,483	2,894,582
Noncontrolling interest	317,196	292,539
Total equity	3,433,679	3,187,121
Total liabilities and equity	8,029,168	7,634,958
Class A Common Stock, $0.01 par value, one vote per share; 180,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 74,512,436 and 74,162,972 shares issued and 61,668,015 and 61,362,665 shares outstanding (net of 12,844,421 and 12,800,307 shares in treasury) as of September 30, 2017 and December 31, 2016, respectively
EQUITY:
Common Stock	745	742
Class B Common Stock, $0.01 par value, ten votes per share; 30,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 713,138 and 758,138 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
EQUITY:
Common Stock	$ 7	$ 8

XML

Consolidated Balance Sheets Parentheticals - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Class A Common Shares [Member]
Common Stock, par value per share	$ 0.01	$ 0.01
Common Stock, votes per share	1	1
Common Stock, shares authorized	180,000,000	180,000,000
Common Stock, shares issued	74,512,436	74,162,972
Common Stock, shares outstanding	61,668,015	61,362,665
Treasury Stock, shares	12,844,421	12,800,307
Class B Common Shares [Member]
Common Stock, par value per share	$ 0.01	$ 0.01
Common Stock, votes per share	10	10
Common Stock, shares authorized	30,000,000	30,000,000
Common Stock, shares issued	713,138	758,138
Common Stock, shares outstanding	713,138	758,138

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
OPERATING REVENUES	$ 576,927	$ 501,002	$ 1,636,468	$ 1,484,993
OPERATING EXPENSES:
Labor and benefits	167,929	156,235	496,128	475,297
Equipment rents	33,291	36,778	100,399	113,634
Purchased services	68,562	50,991	176,358	149,125
Depreciation and amortization	64,222	50,841	186,509	151,095
Diesel fuel used in train operations	34,535	30,134	105,718	83,851
Electricity used in train operations	765	3,226	6,072	9,895
Casualties and insurance	10,624	9,252	33,346	28,814
Materials	30,664	19,678	77,861	62,662
Trackage rights	22,632	22,781	66,652	64,509
Net (gain)/loss on sale and impairment of assets	(315)	(524)	(1,096)	11,993
Restructuring costs	2,628	223	8,744	6,320
Other expenses	29,901	29,536	89,494	91,757
Total operating expenses	465,438	409,151	1,346,185	1,248,952
OPERATING INCOME	111,489	91,851	290,283	236,041
Interest income	463	416	1,271	827
Interest expense	(28,281)	(17,333)	(80,431)	(53,049)
Other income/(loss), net	221	1,494	(289)	2,947
Income before income taxes	83,892	76,428	210,834	186,766
Provision for income taxes	(30,507)	(19,643)	(82,032)	(54,563)
Net income	53,385	56,785	128,802	132,203
Net income attributable to noncontrolling interest	3,145	0	6,317	0
Net income attributable to Genesee & Wyoming Inc.	$ 50,240	$ 56,785	$ 122,485	$ 132,203
Basic earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:	$ 0.82	$ 0.99	$ 1.99	$ 2.31
Weighted average shares - Basic	61,629	57,266	61,518	57,160
Diluted earnings per common share attributable to Genesee & Wyoming Inc. common stockholders	$ 0.80	$ 0.98	$ 1.96	$ 2.28
Weighted average shares - Diluted	62,477	58,180	62,399	58,083

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 53,385	$ 56,785	$ 128,802	$ 132,203
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment	32,902	5,108	100,054	3,618
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit	736	(2,127)	638	(18,364)
Changes in pension and other postretirement benefits, net of tax (provision)/benefit	38	1,449	(2,149)	4,372
Other comprehensive income/(loss)	33,676	4,430	98,543	(10,374)
COMPREHENSIVE INCOME	87,061	61,215	227,345	121,829
Less: Comprehensive income attributable to noncontrolling interest	8,500	0	24,663	0
COMPREHENSIVE INCOME ATTRIBUTABLE TO G&W	$ 78,561	$ 61,215	$ 202,682	$ 121,829

XML

Consolidated Statements of Comprehensive Income Parentheticals - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Tax (provision)/benefit on net unrealizable gain/(loss) on qualifying cash flow hedges	$ (303)	$ 1,417	$ (567)	$ 12,242
Tax (provision)/benefit on changes in pension and other postretirement benefits	$ (20)	$ (392)	$ 887	$ (1,376)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 128,802	$ 132,203
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	186,509	151,095
Stock-based compensation	13,354	13,835
Deferred income taxes	51,231	25,088
Net (gain)/loss on sale and impairment of assets	(1,096)	11,993
Changes in assets and liabilities which provided/(used) cash, net of effect of acquisitions:
Accounts receivable, net	(18,020)	(10,731)
Materials and supplies	8,998	(2,642)
Prepaid expenses and other	14,257	(1,930)
Accounts payable and accrued expenses	(41,529)	(29,484)
Other assets and liabilities, net	7,883	14,156
Net cash provided by operating activities	350,389	303,583
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(149,105)	(159,523)
Grant proceeds from outside parties	15,998	29,952
Cash paid for acquisitions, net of cash acquired	(107,586)	0
Proceeds from the sale of investment	2,100	0
Insurance proceeds for the replacement of assets	1,406	10,319
Proceeds from disposition of property and equipment	4,238	2,003
Net cash used in investing activities	(232,949)	(117,249)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on revolving line-of-credit, long-term debt and capital lease obligations	(498,925)	(501,087)
Proceeds from revolving line-of-credit and long-term borrowings	418,735	300,495
Proceeds from employee stock purchases	8,003	5,969
Treasury stock purchases	(3,275)	(3,065)
Net cash used in financing activities	(75,462)	(197,688)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	5,980	1,779
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	47,958	(9,575)
CASH AND CASH EQUIVALENTS, beginning of period	32,319	35,941
CASH AND CASH EQUIVALENTS, end of period	$ 80,277	$ 26,366

XML

Principles of Consolidation and Basis of Presentation

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [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. All significant intercompany transactions and accounts have been eliminated in consolidation. These interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and are unaudited. 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 nine months ended September 30, 2017 and 2016 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 the interim periods presented. 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 2016 was derived from the audited financial statements in the Company's 2016 Annual Report on Form 10-K, but does not include all disclosures required by U.S. GAAP.

The results of operations of the foreign entities are maintained in the local currency of the respective subsidiary and 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 the Company's results of operations.

The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016 included in the Company's 2016 Annual Report on Form 10-K. Certain reclassifications have been made to prior period balances to conform to the current year presentation, including changes to the statement of cash flows from the adoption of the Accounting Standards Update (ASU) noted below.

In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based compensation arrangements, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The Company elected to account for forfeitures as they occur and elected the retrospective transition method in regards to the classification of tax-related cash flows from stock-based payments. The amendment became effective for the Company on January 1, 2017 and did not have a material impact on the consolidated financial statements for the three and nine months ended September 30, 2017.

When comparing the Company's results of operations from one reporting period to another, it is important to consider that the Company has historically experienced fluctuations in revenues and expenses due to acquisitions, changing economic conditions, fluctuations in commodity prices, competitive forces, changes in foreign currency exchange rates, rail network congestion, one-time freight moves, fuel price fluctuations, customer plant expansions and shutdowns, sales of property and equipment, derailments and weather-related conditions, such as hurricanes, cyclones, tornadoes, high winds, droughts, heavy snowfall, unseasonably hot or cold weather, freezing and flooding, among other factors. In periods when these events occur, the Company's 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, global commodity prices and foreign exchange rates, such as steel products, iron ore, paper products, lumber and forest products and agricultural products, as well as product specific market conditions, such as the availability of lower priced alternative sources of power generation (coal) and energy commodity price differentials (crude oil and natural gas liquids) or congestion at ports (intermodal). Other shipments are relatively less affected by economic conditions and are more closely affected by other factors, such as winter weather (salt) and seasonal rainfall (agricultural products). As a result of these and other factors, the Company's results of operations in any reporting period may not be directly comparable to the Company's results of operations in other reporting periods.

XML

Changes in Operations

9 Months Ended

Sep. 30, 2017

Significant Changes in Operations [Abstract]

Changes in Operations

CHANGES IN OPERATIONS:

North American Operations

Heart of Georgia Railroad, Inc.: On May 31, 2017, the Company completed the acquisition of all the outstanding shares of Atlantic Western Transportation, Inc., parent company of Heart of Georgia Railroad, Inc. (HOG), for $5.6 million in cash and contingent consideration valued at $5.7 million. The contingent consideration is payable to the sellers upon satisfaction of certain conditions, which the Company expects to be paid in 2021. The results of operations from HOG have been included in the Company's consolidated statement of operations since the acquisition date.

HOG was founded in 1999 and operates 219 miles of track that runs across the State of Georgia. The track is leased from the Georgia Department of Transportation. It connects with the Company’s Georgia Southwestern Railroad at Americus, Georgia, and with the Company’s Georgia Central Railway at Vidalia, Georgia. HOG serves an inland intermodal terminal at Cordele, Georgia, providing five days per week, direct rail service via the Georgia Central Railway to the Port of Savannah for auto, agricultural products and other merchandise customers. HOG has Class I railroad connections with CSX Corp. at Cordele and with Norfolk Southern at Americus and Helena, Georgia. HOG transports approximately 10,000 annual carloads of agricultural products, feed, fertilizer, and lumber and forest products, of which approximately 2,000 carloads are interchanged with the Company’s Georgia Central Railway.

Providence and Worcester Railroad Company: On November 1, 2016, the Company completed the acquisition of 100% of the outstanding common stock of Providence and Worcester Railroad Company (P&W) for $25.00 per share, or $126.2 million. The Company funded the acquisition with borrowings under the Company's Second Amended and Restated Senior Secured Syndicated Credit Facility Agreement, as amended (the Credit Agreement). The results of operations from P&W have been included in the Company's consolidated statement of operations since the acquisition date. The Company incurred $3.1 million of integration costs associated with P&W during the nine months ended September 30, 2017, of which $2.7 million was included within labor and benefits expense primarily for severance costs and $0.4 million was included within other expenses in the Company's consolidated statement of operations.

P&W is headquartered in Worcester, Massachusetts, and operates in Rhode Island, Massachusetts, Connecticut and New York. P&W is contiguous with the Company’s New England Central Railroad (NECR) and Connecticut Southern Railroad (CSO). As of the acquisition date, rail service was provided by approximately 130 P&W employees with 32 locomotives across 163 miles of owned track and over approximately 350 track miles under track access agreements. P&W has exclusive freight access over Amtrak’s Northeast Corridor between New Haven, Connecticut, and Providence, Rhode Island, and trackage rights over Metro-North Commuter Railroad, Amtrak and CSX Corp. between New Haven, Connecticut, and Queens, New York. P&W interchanges with the Company’s NECR and CSO railroads, as well as with CSX Corp., Norfolk Southern, Pan Am Railways, Pan Am Southern, the Housatonic Railroad and the New York and Atlantic Railroad, and also connects to Canadian National and Canadian Pacific via NECR.

P&W serves a diverse mix of aggregates, auto, chemicals, metals and lumber customers in southeastern New England, handling approximately 44,000 carloads and intermodal units annually. In addition, P&W provides rail service to three ports (Providence, Davisville and New Haven) and to a United States Customs bonded intermodal terminal in Worcester, Massachusetts, that receives inbound intermodal containers for distribution in New England.

The Company accounted for the acquisition as a business combination using the acquisition method of accounting under U.S. GAAP. The acquired assets and liabilities of P&W were recorded at their acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The following acquisition-date fair values were assigned to the acquired net assets (dollars in thousands). The $27.9 million of fair value assigned to goodwill will not be deductible for tax purposes.

	Amount
Cash and cash equivalents	$	1,529
Accounts receivable	4,011
Materials and supplies	1,048
Prepaid expenses and other	648
Property and equipment	129,473
Goodwill	27,938
Total Assets	164,647
Accounts payable and accrued expenses	9,759
Deferred income tax liabilities, net	27,464
Other long-term liabilities	1,273
Net assets	$	126,151

Australian Operations

Glencore Rail (NSW) Pty Limited: On December 1, 2016, a subsidiary of the Company completed the acquisition of Glencore Rail (NSW) Pty Limited (GRail) for A$1.14 billion (or approximately $844.9 million at an exchange rate of $0.74 for one Australian dollar) and concurrently issued a 48.9% equity stake in G&W Australia Holdings LP (GWAHLP) (collectively, the Australia Partnership), which is the holding entity for all of the Company’s Australian businesses, including GRail, to Macquarie Infrastructure and Real Assets (MIRA), a large infrastructure investment firm. The Company, through wholly-owned subsidiaries, retained a 51.1% ownership in GWAHLP. As the Company maintained control of its Australian Operations, it continues to consolidate 100% of the Company's Australian Operations in its financial statements and reports a noncontrolling interest for MIRA’s 48.9% equity ownership. The acquisition of GRail was funded through a combination of third-party debt and contributions from the Company and MIRA in the form of equity and partner loans.

The Company and MIRA contributed a combined A$1.3 billion in the form of cash, partner loans and contributed equity, and the Company's recently established subsidiary, GWI Acquisitions Pty Ltd (GWIA), entered into a five-year A$690 million senior secured term loan facility that is non-recourse to the Company and to MIRA. The proceeds were used to acquire GRail for A$1.14 billion, repay Genesee & Wyoming Australia’s (GWA) existing A$250 million term loan (under the Company’s Credit Agreement) and pay A$19.8 million in debt issuance costs and A$13.2 million of acquisition-related costs (collectively the GRail Transactions). The foreign exchange rate used to translate the transaction amounts to United States dollars (USD) was $0.74 for one Australian dollar (AUD).

GRail’s coal haulage business was established in 2010 as an alternative rail service provider to the incumbent railroads in the Hunter Valley and has grown to be the third largest coal haulage business in Australia. The Company’s Freightliner Australia subsidiary (acquired by the Company in March 2015) has been the rail operator of GRail since inception and presently provides haulage and logistics services for approximately 40 million tonnes per year of steam coal that is among the lowest cost and highest quality coal in the world sold principally to customers in Japan, Korea and Taiwan. These services have continued following the GRail transaction.

    In conjunction with the GRail acquisition, the Company entered into a 20-year rail haulage contract with the seller, Glencore Coal Pty Limited (GC), to exclusively haul all coal produced at GC’s existing mines in the Hunter Valley to the Port of Newcastle. The contract has minimum guaranteed volumes over the first 18 years.

The GRail transaction included the acquisition of nine train sets (30 locomotives and 894 railcars). Rail haulage service is operated on government-owned, open-access track that is coordinated by a neutral third party. Track access fees will continue to be paid directly by GC.

The Company paid GC, the seller of GRail, A$1.14 billion in cash at closing and received A$3.8 million (or $2.9 million at the exchange rate on the date the cash was received) from the seller for the final working capital adjustment during the three months ended March 31, 2017. The Company accounted for the acquisition as a business combination using the acquisition method of accounting under U.S. GAAP. The acquired assets and liabilities of GRail were recorded at their acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The foreign exchange rate used to translate the balance sheet to United States dollars was $0.74 for one Australian dollar, the exchange rate on December 1, 2016. The results of operations from GRail have been included in the Company's consolidated statement of operations since the December 1, 2016 acquisition date.

The following acquisition-date fair values were assigned to the acquired net assets (amounts in thousands):

	AUD		USD
Accounts receivable	A$	1,556	$	1,153
Materials and supplies	411		305
Property and equipment	279,592		207,206
Goodwill	415,959		308,267
Intangible assets	635,000		470,599
Total assets	1,332,518		987,530
Accounts payable and accrued expenses	5,796		4,296
Deferred income tax liabilities, net	190,551		141,217
Net assets	A$	1,136,171	$	842,017

The A$635.0 million (or $470.6 million at the exchange rate on December 1, 2016) of fair value assigned to intangible assets relates to an amortizable customer contract associated with the 20-year take-or-pay rail haulage contract with GC. The A$416.0 million (or $308.3 million at the exchange rate on December 1, 2016) of fair value assigned to goodwill will not be deductible for tax purposes.

Pro Forma Financial Results (Unaudited)

The following table summarizes the Company's unaudited pro forma operating results for the nine months ended September 30, 2016 as if the GRail Transactions had been consummated as of January 1, 2015. As such, these results include pro forma results from the GRail Transactions for the period from January 1, 2016 through September 30, 2016. The following pro forma financial information does not include the impact of any costs to integrate the operations or the impact of derivative instruments that the Company has entered into or may enter into to mitigate foreign currency or interest rate risk (dollars in thousands, except per share amounts):

	Nine Months Ended
	September 30, 2016
Operating revenues	$	1,526,122
Net income attributable to Genesee & Wyoming Inc.	$	122,779
Basic earnings per common share	$	2.15
Diluted earnings per common share	$	2.11

The unaudited pro forma operating results included the acquisition of GRail adjusted, net of tax, for depreciation and amortization expense resulting from the determination of fair values of the acquired property and equipment and amortizable intangible asset, the inclusion of interest expense related to borrowings used to fund the acquisition, the amortization of debt issuance costs related to the Australian Credit Agreement, noncontrolling interest related to MIRA's 48.9% ownership and the elimination of Australia's interest expense related to debt under the Credit Agreement. Prior to the GRail acquisition, the Company's Australian subsidiary, Freightliner Australia Pty Ltd (FLA), provided rail operator services to GRail, which has been eliminated in the pro forma financial results. Since the pro forma operating results assume the acquisition was consummated on January 1, 2015, the unaudited pro forma operating results for the nine months ended September 30, 2016 excluded $4.6 million ($4.4 million, net of tax) of costs incurred by the Company related to the GRail Transactions.

The unaudited pro forma operating results for the nine months ended September 30, 2016 were based on the Company's consolidated statement of operations and GRail's historical operating results for the nine months ended September 30, 2016. The foreign exchange rate used to translate GRail's 2016 historical operating results to United States dollars was $0.74 for one Australian dollar (which was calculated based on the weighted average monthly exchange rates for the first nine months of 2016).

The pro forma financial information does not purport to be indicative of the results that actually would have been obtained had the GRail Transactions been completed as of January 1, 2015 and for the periods presented and are not intended to be a projection of future results or trends.

Arrium Limited: Between 2011 and 2014, GWA invested a total of $78 million to purchase locomotives and railcars, as well as to construct a standard gauge rolling-stock maintenance facility to support iron ore shipments from Arrium's Southern Iron mine and Whyalla-based operations, which include the Middleback Range iron ore mines and the Whyalla steelworks. Arrium mothballed its Southern Iron mine in April 2015, citing the significant decline in the price of iron ore, while the mines in the Middleback Range continued to operate. 

On April 7, 2016, Arrium announced it had entered into voluntary administration. As a result, the Company recorded a $13.0 million non-cash charge related to the impairment of GWA's now idle rolling-stock maintenance facility, which was recorded to net (gain)/loss on sale and impairment of assets within operating expenses, which represented the entire carrying value of these assets, and an allowance for doubtful accounts charge of $8.1 million associated with accounts receivable from Arrium, which was recorded to other expenses within operating expenses, during the first quarter of 2016. Also, as a result of the voluntary administration, all payments to GWA associated with the Southern Iron rail haulage agreement ceased.

On August 31, 2017, Arrium was sold to GFG Alliance. The steel making business was rebranded as Liberty OneSteel and the mining business was rebranded as SIMEC Mining. GWA continues to provide service and receive payments under the remaining rail haulage agreement. Pursuant to the rail haulage agreement, GWA serves several iron ore mines in the Middleback Range and the Whyalla steelworks operations, which the Company expects will represent A$40 million (or approximately $32 million at the exchange rate on September 30, 2017) of annual revenue, prospectively.

U.K./European Operations

Pentalver Transport Limited: On May 3, 2017, the Company's subsidiary, GWI UK Acquisition Company Limited, purchased for cash all of the issued share capital of Pentalver Transport Limited (Pentalver) from a subsidiary of APM Terminals (a subsidiary of A P Møller-Maersk A/S) for £97.8 million (or $126.2 million at the exchange rate on May 3, 2017) or £77.5 million (or $100.1 million at the exchange rate on May 3, 2017) net of £20.2 million (or $26.1 million at the exchange rate on May 3, 2017) of cash received in connection with the sale. The Company funded the acquisition with borrowings under the Credit Agreement. The foreign exchange rate used to translate the total consideration to United States dollars was $1.29 for one British pound (GBP).

Headquartered in Southampton, U.K., Pentalver operates off-dock container terminals (most under long-term lease) strategically placed at each of the four major seaports of Felixstowe, Southampton, London Gateway and Tilbury, as well as an inland terminal located at Cannock, in the Midlands, near many of the nation’s largest distribution centers. In addition to providing storage for loaded and empty containers on over 100 acres of land, Pentalver also operates a trucking haulage service with more than 150 trucks, primarily providing daily service between the seaports of Felixstowe and Southampton and its inland terminal at Cannock. Pentalver also provides services related to container maintenance and repair (including refrigerated containers) and is one of the largest sellers of new and used containers in the U.K.

Pentalver’s operations are complementary to those of the Company's Freightliner subsidiary, which is the largest rail maritime intermodal operator in the U.K. The logistics of maritime container transportation in the U.K. are highly competitive, whether by road, rail or short-sea, with a premium placed on timely, efficient and safe service. The Company expects that the Pentalver acquisition will enable it to (i) enhance its U.K. services by providing rail and road transportation solutions, as well as offering storage options at the ports and inland, and (ii) unlock efficiencies from shared services and enhanced asset utilization from Pentalver’s trucking fleet and Freightliner’s existing fleet of approximately 200 trucks that currently provide local collection and delivery haulage from Freightliner’s inland terminals. With approximately 600 employees, Pentalver will operate as part of the Company’s U.K./Europe Region.

The results of operations from Pentalver have been included in the Company's consolidated statement of operations since the May 3, 2017, acquisition date within the Company's U.K./European Operations segment. Pentalver contributed $64.7 million of total revenues and $3.1 million of operating income, which included $2.1 million of depreciation and amortization expense, to the Company's consolidated results since the acquisition date. The Company incurred $3.7 million of acquisition and integration costs related to Pentalver during the nine months ended September 30, 2017, of which $3.6 million was included within other expenses and $0.1 million was included in labor and benefits expense in the Company's consolidated statement of operations.

The Company accounted for the acquisition as a business combination using the acquisition method of accounting under U.S. GAAP. The acquired assets and liabilities of Pentalver were recorded at their preliminary acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The preliminary acquisition date fair values are subject to further adjustment for the final determination of the fair values of the acquired assets and liabilities. The foreign exchange rate used to translate the balance sheet to United States dollars was $1.29 for one British pound.

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

	GBP		USD
Cash and cash equivalents	£	20,224	$	26,117
Accounts receivable	16,847		21,756
Materials and supplies	13,360		17,253
Prepaid expenses and other	3,238		4,182
Property and equipment	22,403		28,931
Goodwill	9,368		12,098
Intangible assets	41,000		52,947
Total assets	126,440		163,284
Accounts payable and accrued expenses	21,214		27,396
Deferred income tax liabilities, net	6,876		8,880
Deferred items-grants from outside parties	601		776
Net assets	£	97,749	$	126,232

The $52.9 million of intangible assets relate to amortizable operational rights with contractual terms spanning up to 50 years and a weighted average amortization period of 33 years. The $12.1 million of goodwill will not be deductible for tax purposes.

Continental Europe Intermodal Business: During 2016, the Company explored ways to enhance the long-term viability of ERS Railways B.V. (ERS), the Continental Europe intermodal business Freightliner acquired from Maersk, which the Company acquired in 2015 with the Freightliner acquisition. Due to its limited history of profitability and competitive dynamics in the market in which it operates, the Company ascribed little value to it at the time of acquisition.

Despite a significant and focused effort by the Company, the performance of ERS reached unsustainable levels during 2016 and a restructuring plan was initiated. In conjunction with that plan, in 2017, the Company ceased all "open" train services from the port of Rotterdam, closed the ERS offices in Rotterdam and Frankfurt and the ERS customer services function in Warsaw. The Company is in the process of redistributing ERS’s leased locomotives and railcars, which have lease termination dates ranging from 2017 to 2019. These steps will enable the Company to focus on the deep sea intermodal sector. The Company's subsidiary, Rotterdam Rail Feeding B.V., will continue its existing services and not be affected by the restructuring of ERS.

As a result of the ERS restructuring plan, the Company recorded impairment and related charges of $21.5 million in December 2016. These charges primarily included $14.5 million for an impairment of goodwill and $4.1 million for an impairment of a customer-related intangible asset, which were both recorded to net (gain)/loss on sale and impairment of assets within operating expenses, which represented the entire carrying value of these assets. For the nine months ended September 30, 2017, the Company recorded $5.2 million of restructuring costs related to ERS, primarily for severance costs and costs associated with surplus locomotive and railcar leases.

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Earnings per Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER COMMON SHARE:

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Numerator:
Net income attributable to Genesee & Wyoming Inc.	$	50,240	$	56,785	$	122,485	$	132,203
Denominators:
Weighted average Class A common shares outstanding – Basic	61,629		57,266		61,518		57,160
Weighted average Class B common shares outstanding	723		793		743		793
Dilutive effect of employee stock-based awards	125		121		138		130
Weighted average shares – Diluted	62,477		58,180		62,399		58,083
Earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:
Basic earnings per common share	$	0.82	$	0.99	$	1.99	$	2.31
Diluted earnings per common share	$	0.80	$	0.98	$	1.96	$	2.28

The Company's weighted average basic shares outstanding for the three and nine months ended September 30, 2017 included 4,000,000 shares as a result of the Company's public offering of Class A Common Stock on December 13, 2016.

The following total number of shares of Class A Common Stock issuable under the assumed exercise of stock-based awards 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 antidilutive (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Antidilutive shares	1,245	1,174	1,302	1,292

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Accounts Receivable

9 Months Ended

Sep. 30, 2017

Accounts Receivable, Net [Abstract]

Accounts Receivable

ACCOUNTS RECEIVABLE:

Accounts receivable consisted of the following as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017			December 31, 2016
Accounts receivable – trade	$	407,305		$	353,347
Accounts receivable – grants from outside parties	12,178			10,652
Accounts receivable – insurance and other third-party claims	9,302			11,994
Total accounts receivable	428,785			375,993
Less: Allowance for doubtful accounts	(12,983		)	(12,070		)
Accounts receivable, net	$	415,802		$	363,923

The Company's trade accounts receivable balance as of September 30, 2017 included $27.3 million from the newly acquired Pentalver business. See Note 2, Changes in Operations, for additional information regarding the Pentalver acquisition.

Grants from Outside Parties

The Company periodically receives grants for the upgrade and construction of rail lines and the upgrade of locomotives from federal, provincial, state and local agencies in the United States and provinces in Canada in which the Company operates. These grants typically reimburse the Company for 50% to 100% of the actual cost of specific projects. In total, the Company received grant proceeds of $16.0 million and $30.0 million for the nine months ended September 30, 2017 and 2016, respectively, from such grant programs. The proceeds were presented as cash inflows from investing activities within each of the applicable periods.

None of the Company's grants represent a future liability of the Company unless the Company abandons the rehabilitated or new track structure within a specified period of time or fails to maintain the upgraded or new track to certain standards, fails to make certain minimum capital improvements or ceases use of the locomotives within the specified geographic area and time period, or fails to comply with other grant provisions in each case, as set forth in the applicable grant agreement. As the Company intends to comply with the requirements of these agreements, the Company has recorded additions to track property and locomotives and has deferred the amount of the grants. The amortization of deferred grants is a non-cash offset to depreciation expense over the useful lives of the related assets.

The following table sets forth the offset to depreciation expense from the amortization of deferred grants recorded by the Company during the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Amortization of deferred grants	$	2,978	$	4,652	$	9,287	$	10,513

Insurance and Third-Party Claims

Accounts receivable from insurance and other third-party claims as of September 30, 2017 included $4.5 million from the Company's North American Operations, $4.4 million from the Company's U.K./European Operations and $0.4 million from the Company's Australian Operations. The balance from the Company's North American Operations resulted predominately from the Company's anticipated insurance recoveries associated with a 2015 trestle fire in the United States and derailments in Canada. The balance from the Company's U.K./European Operations resulted primarily from the Company's anticipated insurance recoveries associated with a pre-acquisition rail-related collision in Germany in 2014. The Company received proceeds from insurance totaling $1.4 million and $10.3 million for the nine months ended September 30, 2017 and 2016, respectively.

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Goodwill

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

GOODWILL:

The changes in the carrying amount of goodwill for the nine months ended September 30, 2017 and for the year ended December 31, 2016 were as follows (dollars in thousands):

	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Balance as of January 1, 2017:
Goodwill, gross	$	632,937	$	339,865	$	167,276		$	1,140,078
Accumulated impairment losses	—		—		(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865	$	152,794		$	1,125,596
Changes during the period:
Goodwill acquired	4,083		—		11,849			15,932
Acquisition accounting adjustments	42		—		—			42
Currency translation adjustment	1,690		28,772		15,157			45,619
Balance as of September 30, 2017:
Goodwill, gross	$	638,752	$	368,637	$	194,282		$	1,201,671
Accumulated impairment losses	—		—		(14,482		)	(14,482		)
Goodwill	$	638,752	$	368,637	$	179,800		$	1,187,189

	North American Operations		Australian Operations			U.K./European Operations			Total Operations
Balance as of January 1, 2016	$	605,234	$	39,312		$	182,029		$	826,575
Changes during the period:
Goodwill acquired	26,969		308,267			—			335,236
Acquisition accounting adjustments	176		168			9,736			10,080
Goodwill impairment	—		—			(14,482		)	(14,482		)
Currency translation adjustment	558		(7,882		)	(24,489		)	(31,813		)
Balance as of December 31, 2016:
Goodwill, gross	$	632,937	$	339,865		$	167,276		$	1,140,078
Accumulated impairment losses	—		—			(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865		$	152,794		$	1,125,596

The acquired goodwill for the nine months ended September 30, 2017 was related to the acquisitions of Pentalver in our U.K./European Operations segment and HOG in our North American Operations segment. The acquired goodwill for the year ended December 31, 2016 was related to the acquisitions of P&W in our North American Operations segment and GRail in our Australian Operations segment. See Note 2, Changes in Operations, for additional information regarding the P&W, GRail, Pentalver and HOG acquisitions.

The goodwill impairment recorded for the year ended December 31, 2016 resulted from the write-off of goodwill ascribed to the Company's ERS business within its U.K./European Operations segment. See Note 2, Changes in Operations, for additional information regarding ERS.

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Long-Term Debt Long-Term Debt

9 Months Ended

Sep. 30, 2017

Long-term Debt, Unclassified [Abstract]

Long-term Debt

LONG-TERM DEBT:

Credit Agreement

The Company made scheduled quarterly principal payments under its Credit Agreement of $5.2 million on its United States term loan and £3.8 million (or $4.9 million at the exchange rate on the dates the payments were made) on its U.K. term loan during the nine months ended September 30, 2017. During the nine months ended September 30, 2017, the Company also made prepayments on its United States term loan of $159.8 million. Since the Company applied all of its prepayments on the term loan to its quarterly installments, the Company's remaining principal balance of $1.3 billion will be due at maturity on March 31, 2020.

The British pound-denominated term loans began to amortize in quarterly installments during the three months ended September 30, 2016, with the remaining principal balance payable upon maturity, as set forth below (amounts in thousands):

	Quarterly Payment Date	Principal Amount Due on Each Payment Date
British pound:	December 31, 2017 through June 30, 2018	£	1,271
	September 30, 2018 through December 31, 2019	£	2,542
	Maturity date - March 31, 2020	£	75,532

As of September 30, 2017, the Company had the following outstanding term loans under its Credit Agreement (amounts in thousands, except percentages):

	Local Currency		United States Dollar Equivalent		Interest Rate
United States dollar	$	1,263,000	$	1,263,000	2.99	%
British pound	£	94,597	$	126,694	2.00	%

The Company's availability to draw from the unused borrowing capacity is subject to covenant limitations. As of September 30, 2017, the Company had the following unused borrowing capacity under its revolving credit facility (dollars in thousands):

	2017
Total available borrowing capacity	$	625,000
Outstanding revolving loans	$	225,960
Outstanding letter of credit guarantees	$	2,747
Unused borrowing capacity	$	396,293

As of September 30, 2017, the Company had the following outstanding revolving loans under its revolving credit facility (amounts in thousands, except percentages):

	Local Currency		United States Dollar Equivalent		Interest Rate
British pound (swingline loan)	£	5,500	$	7,366	1.97	%
British pound	£	134,000	$	179,466	2.00	%
Canadian dollar	C$	7,000	$	5,608	3.07	%
Euro	€	28,400	$	33,520	1.75	%

As of September 30, 2017, the Company was in compliance with the covenants under the Credit Agreement, as amended.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2017

Summary of Derivative 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 these risks. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use derivative 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, other assets, 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/(loss) 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 inception of the hedge 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 period in which it no longer qualifies for hedge accounting.

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 using hedge accounting are recognized in current period earnings within other income/(loss), net. Derivative instruments entered into in conjunction with contemplated acquisitions also do not qualify as hedges for accounting purposes.

Interest Rate Risk Management

The Company uses interest rate swap agreements to manage its exposure to the changes in interest rates on 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.

The following table summarizes the terms of the Company's outstanding interest rate swap agreements entered into to manage the Company's exposure to changes in interest rates on its variable rate debt (amounts in thousands):

		Notional Amount
Effective Date	Expiration Date	Date	Amount		Pay Fixed Rate	Receive Variable Rate
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.76%	1-month LIBOR
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.74%	1-month LIBOR
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.73%	1-month LIBOR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	55,373	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	55,373	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	34,155	2.44%	AUD-BBR

On November 9, 2012, the Company entered into multiple 10-year forward starting interest rate swap agreements to manage the exposure to changes in interest rates on the Company's variable rate debt. On September 30, 2016, the Company amended its forward starting swaps, which included moving the mandatory settlement date from September 30, 2016 to September 30, 2026, changing from 3-month LIBOR to 1-month LIBOR and adjusting the fixed rate. The amended forward starting swaps continue to qualify for hedge accounting. In addition, it remains probable that the Company will either issue $300.0 million of fixed-rate debt or have $300.0 million of variable-rate debt under the Company's commercial banking lines throughout the term of the outstanding swap agreements. The Company expects to amortize any gains or losses on the settlements over the life of the respective swap.

The fair values of the Company's interest rate swap agreements were estimated based on Level 2 inputs. The Company's effectiveness testing during the three and nine months ended September 30, 2017 and 2016 resulted in no amount of gain or loss reclassified from accumulated other comprehensive loss into earnings due to ineffectiveness. During the three and nine months ended September 30, 2017, $0.6 million and $1.5 million, respectively, of existing net losses were realized and recorded as interest expense in the consolidated statements of operations. During the three and nine months ended September 30, 2016, $0.4 million and $1.1 million, respectively, of existing net losses were realized and recorded as interest expense in the consolidated statements of operations. Based on the Company's fair value assumptions as of September 30, 2017, it expects to realize $2.0 million of existing net losses that are reported in accumulated other comprehensive loss into earnings within the next 12 months. See Note 12, Accumulated Other Comprehensive Loss, for additional information regarding the Company's cash flow hedges.

Foreign Currency Exchange Rate Risk

As of September 30, 2017, the Company's foreign subsidiaries had $1.1 billion of third-party debt, including capital leases, denominated in the local currencies in which the Company's foreign subsidiaries operate, including the Australian dollar, the British pound, the Canadian dollar and the Euro. The debt service obligations associated with this foreign currency debt are generally funded directly from those foreign 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 by the Company's foreign subsidiaries and is paid by its United States subsidiaries, the Company may face exchange rate risk if the Australian dollar, the British pound, the Canadian dollar or the 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, including non-functional currency intercompany debt, typically associated with acquisitions and any timing difference between announcement and closing of an acquisition of a foreign business. To mitigate currency exposures of non-United States dollar-denominated acquisitions, the Company may enter into foreign currency forward purchase contracts. To mitigate currency exposures related to non-functional currency denominated intercompany debt, cross-currency swaps or foreign currency forward 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. However, cross-currency swap contracts and foreign currency forward contracts used to mitigate exposures on foreign currency intercompany debt may not qualify for hedge accounting. In cases where the cross-currency swap contracts and foreign currency forward 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 do not qualify for hedge accounting are recognized in current period earnings within other income/(loss), net.

On March 25, 2015, the Company closed on the Freightliner acquisition and paid cash consideration of £492.1 million (or $733.0 million at the exchange rate on March 25, 2015). The Company financed the acquisition through a combination of available cash and borrowings under the Company's Credit Agreement. A portion of the funds were transferred from the United States to the U.K. through an intercompany loan with a notional amount of £120.0 million (or $181.0 million at the exchange rate on the effective date of the loan) and accrued interest as of September 30, 2017 of £19.6 million (or $26.2 million at the exchange rate on September 30, 2017), each of which are expected to remain until maturity of the loan. To mitigate the foreign currency exchange rate risk related to this non-functional currency intercompany loan and the related interest, the Company entered into British pound forward contracts, which are accounted for as cash flow hedges.

The fair values of the Company's British pound forward contracts were estimated based on Level 2 inputs. The Company's effectiveness testing during the three and nine months ended September 30, 2017 and 2016 resulted in no amount of gain or loss reclassified from accumulated other comprehensive loss into earnings due to ineffectiveness. During the three and nine months ended September 30, 2017, $0.1 million and $0.4 million, respectively, of net gains were recorded as interest income in the consolidated statements of operations. During the three and nine months ended September 30, 2016, $0.3 million and $0.5 million, respectively, of net gains were recorded as interest income in the consolidated statements of operations. Based on the Company's fair value assumptions as of September 30, 2017, it expects to realize $0.6 million of existing net gains that are reported in accumulated other comprehensive loss into earnings within the next 12 months. See Note 12, Accumulated Other Comprehensive Loss, for additional information regarding the Company's cash flow hedges.

The following table summarizes the Company's outstanding British pound forward contracts (British pounds in thousands):

Effective Date	Settlement Date	Notional Amount	Exchange Rate
3/25/2015	3/31/2020	£60,000	1.51
3/25/2015	3/31/2020	£60,000	1.50
6/30/2015	3/31/2020	£2,035	1.57
9/30/2015	3/31/2020	£1,846	1.51
12/31/2015	3/31/2020	£1,873	1.48
3/31/2016	3/31/2020	£1,881	1.45
6/30/2016	3/31/2020	£1,909	1.35
9/30/2016	3/31/2020	£1,959	1.33
12/30/2016	3/31/2020	£1,989	1.28
3/31/2017	3/31/2020	£1,975	1.30
6/30/2017	3/31/2020	£2,026	1.34
10/2/2017	3/31/2020	£2,079	1.36

On December 1, 2016, GWAHLP and the Company's subsidiary, GWI Holding B.V. (GWBV), entered into an A$248.9 million non-recourse subordinated partner loan agreement (GRail Intercompany Loan), which is eliminated in consolidation. GWBV used the proceeds from this loan to fund a portion of the acquisition of GRail. To mitigate the foreign currency exchange rate risk related to the non-functional currency intercompany loan, the Company entered into two Euro/Australian dollar floating-to-floating cross-currency swap agreements (the Swaps) on December 22, 2016, which effectively convert the A$248.9 million intercompany loan receivable in the Netherlands into a €171.7 million loan receivable. These agreements do not qualify as hedges for accounting purposes and, accordingly, mark-to-market changes in the fair value of the Swaps relative to the underlying GRail Intercompany Loan will be recorded over the life of the agreements, which expire on June 30, 2019. The first swap requires the Company to pay Australian dollar BBR plus 4.50% based on a notional amount of A$123.9 million and allows the Company to receive EURIBOR plus 2.68% based on a notional amount of €85.5 million on a semi-annual basis. EURIBOR is the Euro Interbank Offered Rate, which the Company believes is generally considered the Euro equivalent to LIBOR. The second swap requires the Company to pay Australian dollar BBR plus 4.50% based on a notional amount of A$125.0 million and allows the Company to receive EURIBOR plus 2.90% based on a notional amount of €86.3 million on a semi-annual basis. The Swaps require semi-annual net settlement payments beginning on December 31, 2017. The Company realized a net expense of $1.9 million within interest expense for the three and nine months ended September 30, 2017, associated with the Swaps. As a result of the mark-to-market impact of the GRail Intercompany Loan compared to the mark-to-market of the Swaps, the Company realized a net expense of $0.8 million and $4.5 million within other (loss)/income, net for the three and nine months ended September 30, 2017, respectively. Over the life of the Swaps, the Company expects the cumulative impact of net gains and losses from the mark-to-market of the GRail Intercompany Loan and Swaps to be approximately zero.

The following table summarizes the fair value of the Company's derivative instruments recorded in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (dollars in thousands):

		Fair Value
	Balance Sheet Location	September 30, 2017		December 31, 2016
Asset Derivatives:
Derivatives designated as hedges:
British pound forward contracts	Other assets	$	16,017	$	26,359
Total derivatives designated as hedges		$	16,017	$	26,359
Derivatives not designated as hedges:
Cross-currency swap contract	Prepaid expenses and other	$	1,259	$	174
Cross-currency swap contract	Other assets	944		506
Total derivatives not designated as hedges		$	2,203	$	680
Liability Derivatives:
Derivatives designated as hedges:
Interest rate swap agreements	Accrued expenses	$	2,005	$	1,747
Interest rate swap agreements	Other long-term liabilities	15,425		13,411
British pound forward contracts	Other long-term liabilities	568		17
Total derivatives designated as hedges		$	17,998	$	15,175

The change in the British pound forward contracts was primarily driven by the change in the foreign currency exchange rates during the period.

The following table shows the effect of the Company's derivative instruments designated as cash flow hedges for the three and nine months ended September 30, 2017 and 2016 in other comprehensive income (OCI) (dollars in thousands):

	Total Cash Flow Hedge OCI Activity, Net of Tax
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
Derivatives Designated as Cash Flow Hedges:
Effective portion of net changes in fair value recognized in OCI, net of tax:
Interest rate swap agreements	$	388	$	(1,414	)	$	(1,382	)	$	(15,780	)
British pound forward contracts, net (a)	348		(713		)	2,020			(2,584		)
	$	736	$	(2,127	)	$	638		$	(18,364	)

(a) The three and nine months ended September 30, 2017 represents a net gain of $3.2 million and $8.6 million, respectively, for the mark-to-market of the U.K. intercompany loan, partially offset by a net loss of $2.8 million and $6.6 million, respectively, for the mark-to-market of the British pound forward contracts. The three and nine months ended September 30, 2016 represents a net loss of $2.3 million and $13.7 million, respectively, for the mark-to-market of the U.K. intercompany loan, partially offset by a net gain of $1.6 million and $11.1 million, respectively, for the mark-to-market of the British pound forward contracts.

The following table shows the effect of the Company's derivative instruments not designated as hedges for the three and nine months ended September 30, 2017 and 2016 in the consolidated statements of operations (dollars in thousands):

		Amount Recognized in Earnings
		Three Months Ended					Nine Months Ended
	Location of Amount Recognized in Earnings	September 30,					September 30,
		2017			2016		2017			2016
Derivative Instruments Not Designated as Hedges:
Cross-currency swap agreements	Interest expense	$	(1,887	)	$	—	$	(1,887	)	$	—
Cross-currency swap agreements, net (a)	Other income/(loss), net	(842		)	—		(4,510		)	—
		$	(2,729	)	$	—	$	(6,397	)	$	—

(a) The three months ended September 30, 2017 represents a net gain of $1.7 million for the mark-to-market of the Swaps, partially offset by a net loss of $2.5 million for the mark-to-market of the GRail Intercompany Loan. The nine months ended September 30, 2017 represents a net gain of $2.0 million for the mark-to-market of the Swaps and a net loss of $6.5 million for the mark-to-market of the GRail Intercompany Loan.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company applies the following three-level hierarchy of valuation inputs for measuring fair value:

• Level 1 - Quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.

• Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data.

• Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

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

Financial Instruments Carried at Fair Value: Derivative instruments are recorded on the consolidated balance sheets as either assets or liabilities measured at fair value. During the reporting period, the Company's derivative financial instruments consisted of interest rate swap agreements, foreign currency forward contracts and cross-currency swap agreements. The Company estimated the fair value of its interest rate swap agreements based on Level 2 valuation inputs, including fixed interest rates, LIBOR and BBR implied forward interest rates and the remaining time to maturity. The Company estimated the fair value of its British pound forward contracts based on Level 2 valuation inputs, including LIBOR implied forward interest rates, British pound LIBOR implied forward interest rates and the remaining time to maturity. The Company estimated the fair value of its cross-currency swap agreements based on Level 2 valuation inputs, including EURIBOR implied forward interest rates, BBR implied forward interest rates and the remaining time to maturity.

The Company's recurring fair value measurements using significant unobservable inputs (Level 3) relate to the Company's deferred consideration from the Freightliner acquisition in 2015 and from the HOG acquisition in 2017. The fair value of the deferred consideration liabilities were estimated by discounting, to present value, contingent payments expected to be made.

Financial Instruments Carried at Historical Cost: Since the Company's long-term debt is not actively traded, 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.

The following table presents the Company's financial instruments carried at fair value using Level 2 inputs as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017		December 31, 2016
Financial instruments carried at fair value using Level 2 inputs:
Financial assets carried at fair value:
British pound forward contracts	$	16,017	$	26,359
Cross-currency swap contracts	2,203		680
Total financial assets carried at fair value	$	18,220	$	27,039
Financial liabilities carried at fair value:
Interest rate swap agreements	$	17,430	$	15,158
British pound forward contracts	568		17
Total financial liabilities carried at fair value	$	17,998	$	15,175

The following table presents the Company's financial instruments carried at fair value using Level 3 inputs as of September 30, 2017 and December 31, 2016 (amounts in thousands):

	September 30, 2017				December 31, 2016
	Local Currency		United States Dollar Equivalent		Local Currency		United States Dollar Equivalent
Financial instrument carried at fair value using Level 3 inputs:
Financial liabilities carried at fair value:
Accrued deferred consideration - Freightliner	£	27,755	$	37,172	£	25,882	$	31,933
Accrued deferred consideration - HOG	$	5,842	$	5,842	$	—	$	—

At the date of acquisition of Freightliner in 2015, the contingent liability represented the aggregate fair value of the shares transferred to the Company by the Management Shareholders in exchange for the right to receive cash consideration for the representative economic interest of approximately 6% in Freightliner in the future (deferred consideration). Each of the Management Shareholders may elect to receive one third of their respective deferred consideration valued as of March 31, 2018, 2019 and 2020. The remaining portion of the deferred consideration will be valued as of March 31, 2020 and paid by the end of 2020.

At the date of acquisition of HOG in 2017, the contingent liability represented the fair value of the deferred consideration payable to the sellers upon satisfaction of certain conditions, which the Company expects to be paid in 2021. See Note 2, Changes in Operations, for additional information regarding HOG.

The Company's contingent liabilities are adjusted each period to represent the fair value of the deferred consideration as of the balance sheet date. To do so, the Company recalculates the estimated fair value of the deferred consideration in each reporting period until it is paid in full by using a contractual formula designed to estimate the economic value of the Management Shareholders' retained interest in a manner consistent with that used to derive the Freightliner acquisition price per share on the acquisition date. In addition, the Company recalculates the HOG's deferred consideration based on the contractual formula as defined in the stock purchase agreement. These calculations effectively represent the present value of the expected payment to be made upon settlement of the deferred consideration. Accordingly, such recalculations will reflect both the impact of the time value of money and the impact of changes in the expected future performance of the acquired business, as applicable. The Company expects to recognize future changes in the contingent liabilities for the estimated fair value of the deferred consideration through other expenses within the Company's consolidated statement of operations. These future changes in the estimated fair value of the deferred consideration are not expected to be deductible for tax purposes.

The following table presents the amounts recognized, through other expenses, within the Company's consolidated statements of operations during the three and nine months ended September 30, 2017 and 2016 as a result of the change in the estimated fair value of the deferred consideration, which primarily represented the time value of money (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Freightliner	$	859	$	933	$	2,405	$	2,015
HOG	$	126	$	—	$	166	$	—

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 September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities carried at historical cost:
United States term loan	$	1,253,776	$	1,259,935	$	1,415,873	$	1,422,512
U.K. term loan	124,859		127,114		121,149		121,594
Australian Credit Agreement	517,696		534,317		484,703		501,909
Partner Loan Agreement	186,729		187,999		172,154		171,435
Revolving credit facility	222,093		227,103		74,297		81,192
Other debt	2,900		2,918		4,882		4,889
Total	$	2,308,053	$	2,339,386	$	2,273,058	$	2,303,531

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U.K. Pension Plan

9 Months Ended

Sep. 30, 2017

Defined Benefit Plan [Abstract]

U.K. Pension Plan

U.K. PENSION PLAN:

In connection with the acquisition of Freightliner, the Company assumed a defined benefit pension plan for its U.K. employees through a standalone shared cost arrangement within the Railways Pension Scheme (Pension Program). The Pension Program is managed and administered by a professional pension administration company and is overseen by trustees with professional advice from independent actuaries and other advisers. The Pension Program is a shared cost arrangement with required contributions shared between Freightliner and its employees, with Freightliner contributing 60% and the remaining 40% contributed by active employees. The Company engages independent actuaries to compute the amounts of liabilities and expenses relating to the Pension Program subject to the assumptions that the Company selects.

The following tables summarize the components of the Pension Program related to the net benefit costs recognized in labor and benefits in the Company's consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands):

	Three Months Ended September 30,
	2017						2016
	GBP			USD			GBP			USD
Service cost	£	2,988		$	3,909		£	2,394		$	3,143
Interest cost	1,978			2,588			2,227			2,923
Expected return on plan assets	(3,307		)	(4,327		)	(2,846		)	(3,737		)
Net periodic benefit cost	£	1,659		$	2,170		£	1,775		$	2,329

	Nine Months Ended September 30,
	2017						2016
	GBP			USD			GBP			USD
Service cost	£	8,964		$	11,434		£	7,182		$	10,006
Interest cost	5,934			7,569			6,681			9,308
Expected return on plan assets	(9,921		)	(12,655		)	(8,538		)	(11,896		)
Net periodic benefit cost	£	4,977		$	6,348		£	5,325		$	7,418

During the nine months ended September 30, 2017, the Company contributed £4.5 million (or $6.0 million at the September 30, 2017 exchange rate) to fund the Pension Program. The Company expects to contribute £2.6 million (or $3.5 million at the September 30, 2017 exchange rate) to the Pension Program for the remainder of 2017. The Pension Program's assets may undergo significant changes over time as a result of market conditions, and its assets and liabilities are formally valued on an independent actuarial basis every three years to assess the adequacy of funding levels. A key element of the valuation process is an assessment of the creditworthiness of the participating employer. This valuation process is currently underway for the three year period that ended December 31, 2016. In the event that the Pension Program's projected assets and liabilities reveal additional funding requirements, the shared cost arrangement generally means that the Company will be required to pay 60% of any additional contributions, with active members contributing the remaining 40%, in each case over an agreed recovery period. If the Pension Program was to be terminated and wound up, any deficit would fall entirely on the Company and could not be shared with active members. Currently, the Company has no intention of terminating the Pension Program.

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Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES:

The Company's effective income tax rate for the three months ended September 30, 2017 was 36.4%, compared with 25.7% for the three months ended September 30, 2016. The Company's effective income tax rate for the nine months ended September 30, 2017 was 38.9%, compared with 29.2% for the nine months ended September 30, 2016. The higher effective income tax rate for the three and nine months ended September 30, 2017 was primarily driven by an income tax benefit of $7.8 million and $21.4 million recorded in the three and nine months ended September 30, 2016, respectively, associated with the now expired United States Short Line Tax Credit. The three and nine months ended September 30, 2017 also included the recognition of $3.3 million of previously unrecognized tax benefits resulting from the lapse of the statute of limitations on acquired liabilities for uncertain tax positions and tax provisions of $1.4 million and $1.3 million, respectively, related to enacted state income tax rate changes.

The Company's provision for income taxes for the three and nine months ended September 30, 2016 included a $4.3 million income tax benefit as a result of the Company remeasuring its deferred income tax assets and liabilities in the U.K. based on the enacted change to the corporate income tax rate by the U.K. government that will apply when the temporary differences are expected to be realized or settled. The Company's provision for income taxes for the nine months ended September 30, 2016 included the recording of a valuation allowance of A$2.6 million (or $2.0 million at the average exchange rate in March of 2016) associated with the impairment of GWA's now idle rolling-stock maintenance facility that was formerly used in connection with the Southern Iron rail haulage agreement with Arrium (see Note 2, Changes in Operations).

The United States Short Line Tax Credit is an income tax track maintenance credit for Class II and Class III railroads to reduce their federal income tax based on qualified railroad track maintenance expenditures. Qualified expenditures include amounts incurred for maintaining track, including roadbed, bridges and related track structures owned or leased by a Class II or Class III railroad. The credit is equal to 50% of the qualified expenditures, subject to an annual limitation of $3,500 multiplied by the number of miles of railroad track owned or leased by the Class II or Class III railroad as of the end of its tax year. The United States Short Line Tax Credit was initially enacted for a three year period, 2005 through 2007, and subsequently extended on a retroactive basis. This pattern was repeated a series of times, with the last extension expiring on December 31, 2016.

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Commitments and Contingencies (Notes)

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

COMMITMENTS AND CONTINGENCIES:

From time to time, the Company is a defendant in certain lawsuits resulting from the Company's operations in the ordinary course as the nature of the Company's business exposes it to the potential for various claims and litigation, including those related to property damage, personal injury, freight loss, labor and employment, environmental and other matters. The Company maintains insurance policies to mitigate the financial risk associated with such claims. However, any material changes to pending litigation or a catastrophic rail accident or series of accidents involving material freight loss or property damage, personal injuries or environmental liability or other claims or disputes that are not covered by insurance could have a material adverse effect on the Company's results of operations, financial condition and liquidity.

In November 2014, the Company received a notice from the United States Environmental Protection Agency (EPA) requesting information under the Clean Water Act related to the discharge of crude oil as a result of a derailment of an Alabama & Gulf Coast Railway LLC (AGR) freight train in November 2013 in the vicinity of Aliceville, Alabama. A fine associated with the contamination has not yet been assessed and is not estimable.

The Company is also involved in several arbitrations related to contractual disputes that are not covered by insurance. In March 2017, CSX Transportation, Inc. (CSXT) initiated arbitration against several of the Company’s subsidiaries associated with freight revenue factors (or divisions) under certain operating agreements associated with leased railroads. CSXT is seeking to reduce certain of the Company's freight revenue factors for the time period after August 21, 2016. The Company believes it has meritorious defenses against the CSXT claims. In an unrelated matter, on May 3, 2017, the AGR initiated arbitration related to the collection of approximately $13 million of outstanding liquidated damages under a volume commitment (or take-or-pay) contract with a customer. The Company believes it will prevail in the collection of the outstanding liquidated damages. Although the Company expects to attain successful outcomes in each of these matters, arbitration is inherently uncertain and it is possible that an unfavorable ruling could have an adverse effect on the Company's results of operations, financial condition and liquidity.

Management believes there are adequate provisions in the financial statements for any probable liabilities that may result from disposition of the pending lawsuits and the aforementioned arbitrations. Based upon currently available information, the Company does not believe it is reasonably possible that any such lawsuit or arbitration would be material to the Company's results of operations or have a material adverse effect on the Company's financial position or liquidity.

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Accumulated Other Comprehensive Income/(Loss)

9 Months Ended

Sep. 30, 2017

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

Accumulated Other Comprehensive Loss

ACCUMULATED OTHER COMPREHENSIVE LOSS:

The following tables set forth the components of accumulated other comprehensive loss attributable to Genesee & Wyoming Inc. included in the consolidated balance sheets and consolidated statements of comprehensive income (dollars in thousands):

	Foreign Currency Translation Adjustment			Defined Benefit Plans				Net Unrealized Gain/(Loss) on Cash Flow Hedges				Accumulated Other Comprehensive Loss
Balance, December 31, 2016	$	(177,662	)	$	(19,948	)		$	(13,726	)		$	(211,336	)
Other comprehensive income/(loss) before reclassifications	81,412			(2,262		)		(7,003		)		72,147
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision) of ($60) and ($5,347), respectively	—			113			(a)	7,937			(b)	8,050
Current period change	81,412			(2,149		)		934				80,197
Balance, September 30, 2017	$	(96,250	)	$	(22,097	)		$	(12,792	)		$	(131,139	)

	Foreign Currency Translation Adjustment			Defined Benefit Plans			Net Unrealized Gain/(Loss) on Cash Flow Hedges				Accumulated Other Comprehensive Loss
Balance, December 31, 2015	$	(156,146	)	$	11,005		$	(8,316	)		$	(153,457	)
Other comprehensive income/(loss) before reclassifications	3,618			4,305			(4,349		)		3,574
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit of ($37) and $9,343 respectively	—			67		(a)	(14,015		)	(b)	(13,948		)
Current period change	3,618			4,372			(18,364		)		(10,374		)
Balance, September 30, 2016	$	(152,528	)	$	15,377		$	(26,680	)		$	(163,831	)

(a) Existing net gains realized were recorded in labor and benefits on the consolidated statements of operations.

(b) Existing net gains/(losses) realized were recorded in interest expense on the consolidated statements of operations (see Note 7, Derivative Financial Instruments).

Comprehensive Income Attributable to Noncontrolling Interest

As discussed in Note 2, Changes in Operations, the Company began presenting noncontrolling interest as a result of the GRail transaction on December 1, 2016. The following table sets forth comprehensive income attributable to noncontrolling interest for the three and nine months ended September 30, 2017 (dollars in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017
Net income attributable to noncontrolling interest	$	3,145	$	6,317
Other comprehensive income/(loss):
Foreign currency translation adjustment	4,972		18,642
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($164) and $127, respectively	383		(296		)
Comprehensive income attributable to noncontrolling interest	$	8,500	$	24,663

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Stockholders' Equity

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS' EQUITY:

The following table reconciles the beginning and end of the period equity balance attributable to Genesee & Wyoming Inc. and to noncontrolling interest (dollars in thousands):

	Genesee & Wyoming Inc. Stockholders' Equity			Noncontrolling Interest			Total Equity
Balance, December 31, 2016	$	2,894,582		$	292,539		$	3,187,121
Net income	122,485			6,317			128,802
Other comprehensive income	80,197			18,346			98,543
Additional paid-in capital from stock-based compensation awards	22,050			—			22,050
Treasury stock purchases	(3,275		)	—			(3,275		)
Other	444			(6		)	438
Balance, September 30, 2017	$	3,116,483		$	317,196		$	3,433,679

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Significant Non-Cash Investing Activities

9 Months Ended

Sep. 30, 2017

Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]

Significant Non-Cash Investing and Financing Activities

SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:

As of September 30, 2017 and 2016, the Company had outstanding accounts receivable from outside parties for the funding of capital expenditures of $12.2 million and $10.8 million, respectively. As of September 30, 2017 and 2016, the Company also had $12.3 million and $14.9 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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Segment Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment and Geographic Area Information

SEGMENT INFORMATION:

The Company presents the financial results of its nine operating regions as three reportable segments: North American Operations, Australian Operations and U.K./European Operations. The Company owns a 51.1% controlling interest in the Australian Operations. As such, the Company includes 100% of the revenues and expenses from its Australian Operations within its consolidated financial statements and reports a noncontrolling interest for MIRA’s 48.9% equity ownership. Each of the Company's segments generates the following three categories of revenues from external customers: freight revenues, freight-related revenues and all other revenues. The Company's seven North American regions are aggregated into one reportable segment as a result of having similar economic and operating characteristics. During the third quarter of 2017, the Company's Mountain West Region railroads were consolidated into the Company's Central and Pacific regions, and the Pacific Region was renamed the Western Region. This consolidation reduced the Company's number of operating regions from ten to nine.

The results of operations of the Company's foreign entities are maintained in the respective local currency (the Australian dollar, the British pound, 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 the Company's results of operations.

The following tables reflect the balance sheet exchange rates as of September 30, 2017 and December 31, 2016 and the average exchange rates for the three and nine months ended September 30, 2017 and 2016 used to translate the foreign entities respective local currency balance sheet and results of operations into United States dollars for the respective period:

					September 30, 2017		December 31, 2016
United States dollar per Australian dollar					$	0.78	$	0.72
United States dollar per British pound					$	1.34	$	1.23
United States dollar per Canadian dollar					$	0.80	$	0.74
United States dollar per Euro					$	1.18	$	1.06
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
United States dollar per Australian dollar	$	0.79	$	0.76	$	0.77	$	0.74
United States dollar per British pound	$	1.31	$	1.31	$	1.28	$	1.39
United States dollar per Canadian dollar	$	0.80	$	0.77	$	0.77	$	0.76
United States dollar per Euro	$	1.17	$	1.12	$	1.11	$	1.12

The following tables set forth select financial data for the Company's reportable segments for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Operating revenues:
Freight revenues	$	242,968	$	66,404	$	91,363	$	400,735
Freight-related revenues	60,286		12,880		67,757		140,923
All other revenues	15,673		1,986		17,610		35,269
Total operating revenues	$	318,927	$	81,270	$	176,730	$	576,927
Operating income	$	82,111	$	22,276	$	7,102	$	111,489
Depreciation and amortization	$	40,036	$	15,753	$	8,433	$	64,222
Interest expense, net	$	9,817	$	13,678	$	4,323	$	27,818
Provision for income taxes	$	28,270	$	2,013	$	224	$	30,507
Expenditures for additions to property & equipment, net of grants from outside parties	$	41,713	$	4,545	$	6,981	$	53,239

	Three Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	232,247	$	29,219	$	88,341		$	349,807
Freight-related revenues	62,124		23,523		43,873			129,520
All other revenues	15,823		1,408		4,444			21,675
Total operating revenues	$	310,194	$	54,150	$	136,658		$	501,002
Operating income	$	87,153	$	4,372	$	326		$	91,851
Depreciation and amortization	$	37,085	$	7,129	$	6,627		$	50,841
Interest expense, net	$	9,600	$	2,170	$	5,147		$	16,917
Provision for/(benefit from) income taxes	$	22,392	$	798	$	(3,547	)	$	19,643
Expenditures for additions to property & equipment, net of grants from outside parties	$	30,343	$	2,440	$	9,457		$	42,240

	Nine Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	719,622	$	191,031	$	250,982		$	1,161,635
Freight-related revenues	186,814		36,089		164,978			387,881
All other revenues	47,641		4,866		34,445			86,952
Total operating revenues	$	954,077	$	231,986	$	450,405		$	1,636,468
Operating income	$	229,267	$	59,685	$	1,331		$	290,283
Depreciation and amortization	$	117,822	$	45,915	$	22,772		$	186,509
Interest expense, net	$	29,928	$	41,500	$	7,732		$	79,160
Provision for/(benefit from) income taxes	$	78,133	$	4,805	$	(906	)	$	82,032
Expenditures for additions to property & equipment, net of grants from outside parties	$	105,940	$	9,721	$	17,446		$	133,107

	Nine Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	681,154	$	80,390	$	255,459		$	1,017,003
Freight-related revenues	184,627		76,142		135,897			396,666
All other revenues	48,766		4,699		17,859			71,324
Total operating revenues	$	914,547	$	161,231	$	409,215		$	1,484,993
Operating income/(loss)	$	236,154	$	2,002	$	(2,115	)	$	236,041
Depreciation and amortization	$	110,398	$	21,018	$	19,679		$	151,095
Interest expense, net	$	29,730	$	6,963	$	15,529		$	52,222
Provision for/(benefit from) income taxes	$	59,354	$	521	$	(5,312	)	$	54,563
Expenditures for additions to property & equipment, net of grants from outside parties	$	95,282	$	8,094	$	26,195		$	129,571

The following tables set forth select balance sheet data for the Company's reportable segments as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	7,158	$	47,989	$	25,130	$	80,277
Property and equipment, net	$	3,626,293	$	670,160	$	332,441	$	4,628,894

	December 31, 2016
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	10,137	$	9,213	$	12,969	$	32,319
Property and equipment, net	$	3,590,625	$	634,148	$	278,546	$	4,503,319

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Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued Accounting Standards [Text Block]

RECENTLY ISSUED ACCOUNTING STANDARDS:

Accounting Standards Not Yet Effective

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and includes the specific steps for recognizing revenue and disclosure requirements. In August 2015, the FASB issued ASU 2015-14, which approved a one-year deferral of the effective date of the new revenue recognition standard. In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, which provides clarification when identifying performance obligations and providing implementation guidance on licensing. In May 2016, the FASB issued ASU 2016-12, which clarifies the objective of the collectibility criterion. In December 2016, the FASB issued ASU 2016-20, which provides additional clarification on contract costs, modifications and disclosures.

These new standards will become effective for the Company on January 1, 2018, and the Company plans to adopt them using the modified retrospective basis, which will result in the cumulative effect of initially applying the standards being recognized as an adjustment to opening retained earnings at January 1, 2018. The Company is currently assessing the impact of adopting this guidance for its existing portfolio of open customer contracts and will continue to assess new contracts entered into prior to the adoption of the new standard. Under the new standard, the Company will continue to recognize freight revenue over time as shipments move from origin to destination, freight-related revenues and all other revenues will continue to be recognized as services are performed. For contracts that include variable consideration, the Company will be required to assess the variable consideration and recognize revenue based on estimates throughout the applicable periods. Based on its current assessment, the Company does not expect the adoption of this guidance to have a material change to its revenue recognition, although additional disclosures will be required to help users of the financial statements understand the nature, amount and timing of revenue and cash flows arising from the Company’s contracts with customers.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with subsequent changes in fair value recognized in net income. The amendments also impact certain disclosure requirements for financial instruments. The amendments will become effective for the Company beginning January 1, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will require lessees to recognize leases on their balance sheets as a right-of-use asset with a corresponding liability. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of 12 months or less. Additional qualitative and quantitative disclosures, including significant judgments made by management, will also be required. The new standard will become effective for the Company beginning January 1, 2019, and will require a modified retrospective transition approach resulting in the recognition of leases as of January 1, 2017 and the retrospective adjustment of the financial statements for 2017 and 2018 when presented for comparative purposes. Early application is permitted. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements. At December 31, 2016, the Company disclosed approximately $546 million in aggregate future minimum operating lease payments and will evaluate those contracts as well as other existing arrangements to determine whether a right-of-use asset or lease liability will need to be recognized under the new standard and will assess new contracts entered into prior to the adoption of the new standard. The Company does not plan to adopt the standard early.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which provides guidance on eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows. The amendments will become effective for the Company January 1, 2018. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated statements of cash flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which requires that a statement of cash flows explain the change during the period in total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The amendments will become effective for the Company beginning January 1, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated statements of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments will become effective for the Company beginning January 1, 2018. The Company will take the amendments into consideration when assessing whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments will become effective for the Company beginning January 1, 2020. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of the net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside a subtotal of operating income, if one is presented. The amendments will become effective for the Company beginning January 1, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting, which provides guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments will become effective for the Company beginning January 1, 2018. The Company will apply this guidance to any further modifications of share-based payment awards.

In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, which expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments also include certain improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments will become effective for the Company beginning January 1, 2019. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

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Principles of Consolidation and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation, Policy [Policy Text Block]

The interim consolidated financial statements presented herein include the accounts of Genesee & Wyoming Inc. and its subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. These interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and are unaudited. 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 nine months ended September 30, 2017 and 2016 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 the interim periods presented. 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 2016 was derived from the audited financial statements in the Company's 2016 Annual Report on Form 10-K, but does not include all disclosures required by U.S. GAAP.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

The results of operations of the foreign entities are maintained in the local currency of the respective subsidiary and 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 the Company's results of operations.

Derivatives, Policy [Policy Text Block]

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 these risks. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use derivative 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, other assets, 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/(loss) 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 inception of the hedge 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 period in which it no longer qualifies for hedge accounting.

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 using hedge accounting are recognized in current period earnings within other income/(loss), net. Derivative instruments entered into in conjunction with contemplated acquisitions also do not qualify as hedges for accounting purposes.

Fair Value Measurement, Policy [Policy Text Block]

The Company applies the following three-level hierarchy of valuation inputs for measuring fair value:

• Level 1 - Quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.

• Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data.

• Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

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

Financial Instruments Carried at Fair Value: Derivative instruments are recorded on the consolidated balance sheets as either assets or liabilities measured at fair value. During the reporting period, the Company's derivative financial instruments consisted of interest rate swap agreements, foreign currency forward contracts and cross-currency swap agreements. The Company estimated the fair value of its interest rate swap agreements based on Level 2 valuation inputs, including fixed interest rates, LIBOR and BBR implied forward interest rates and the remaining time to maturity. The Company estimated the fair value of its British pound forward contracts based on Level 2 valuation inputs, including LIBOR implied forward interest rates, British pound LIBOR implied forward interest rates and the remaining time to maturity. The Company estimated the fair value of its cross-currency swap agreements based on Level 2 valuation inputs, including EURIBOR implied forward interest rates, BBR implied forward interest rates and the remaining time to maturity.

The Company's recurring fair value measurements using significant unobservable inputs (Level 3) relate to the Company's deferred consideration from the Freightliner acquisition in 2015 and from the HOG acquisition in 2017. The fair value of the deferred consideration liabilities were estimated by discounting, to present value, contingent payments expected to be made.

Financial Instruments Carried at Historical Cost: Since the Company's long-term debt is not actively traded, 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.

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Changes in Operations (Tables)

9 Months Ended

Sep. 30, 2017

Providence and Worcester Railroad [Member]

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

The following acquisition-date fair values were assigned to the acquired net assets (dollars in thousands). The $27.9 million of fair value assigned to goodwill will not be deductible for tax purposes.

	Amount
Cash and cash equivalents	$	1,529
Accounts receivable	4,011
Materials and supplies	1,048
Prepaid expenses and other	648
Property and equipment	129,473
Goodwill	27,938
Total Assets	164,647
Accounts payable and accrued expenses	9,759
Deferred income tax liabilities, net	27,464
Other long-term liabilities	1,273
Net assets	$	126,151

GRail [Member]

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

The following acquisition-date fair values were assigned to the acquired net assets (amounts in thousands):

	AUD		USD
Accounts receivable	A$	1,556	$	1,153
Materials and supplies	411		305
Property and equipment	279,592		207,206
Goodwill	415,959		308,267
Intangible assets	635,000		470,599
Total assets	1,332,518		987,530
Accounts payable and accrued expenses	5,796		4,296
Deferred income tax liabilities, net	190,551		141,217
Net assets	A$	1,136,171	$	842,017

Business Acquisition, Pro Forma Information [Table Text Block]

The following table summarizes the Company's unaudited pro forma operating results for the nine months ended September 30, 2016 as if the GRail Transactions had been consummated as of January 1, 2015. As such, these results include pro forma results from the GRail Transactions for the period from January 1, 2016 through September 30, 2016. The following pro forma financial information does not include the impact of any costs to integrate the operations or the impact of derivative instruments that the Company has entered into or may enter into to mitigate foreign currency or interest rate risk (dollars in thousands, except per share amounts):

	Nine Months Ended
	September 30, 2016
Operating revenues	$	1,526,122
Net income attributable to Genesee & Wyoming Inc.	$	122,779
Basic earnings per common share	$	2.15
Diluted earnings per common share	$	2.11

Pentalver Transport Limited [Member]

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

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

	GBP		USD
Cash and cash equivalents	£	20,224	$	26,117
Accounts receivable	16,847		21,756
Materials and supplies	13,360		17,253
Prepaid expenses and other	3,238		4,182
Property and equipment	22,403		28,931
Goodwill	9,368		12,098
Intangible assets	41,000		52,947
Total assets	126,440		163,284
Accounts payable and accrued expenses	21,214		27,396
Deferred income tax liabilities, net	6,876		8,880
Deferred items-grants from outside parties	601		776
Net assets	£	97,749	$	126,232

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Numerator:
Net income attributable to Genesee & Wyoming Inc.	$	50,240	$	56,785	$	122,485	$	132,203
Denominators:
Weighted average Class A common shares outstanding – Basic	61,629		57,266		61,518		57,160
Weighted average Class B common shares outstanding	723		793		743		793
Dilutive effect of employee stock-based awards	125		121		138		130
Weighted average shares – Diluted	62,477		58,180		62,399		58,083
Earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:
Basic earnings per common share	$	0.82	$	0.99	$	1.99	$	2.31
Diluted earnings per common share	$	0.80	$	0.98	$	1.96	$	2.28

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following total number of shares of Class A Common Stock issuable under the assumed exercise of stock-based awards 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 antidilutive (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Antidilutive shares	1,245	1,174	1,302	1,292

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Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2017

Accounts Receivable, Net [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Accounts receivable consisted of the following as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017			December 31, 2016
Accounts receivable – trade	$	407,305		$	353,347
Accounts receivable – grants from outside parties	12,178			10,652
Accounts receivable – insurance and other third-party claims	9,302			11,994
Total accounts receivable	428,785			375,993
Less: Allowance for doubtful accounts	(12,983		)	(12,070		)
Accounts receivable, net	$	415,802		$	363,923

Grant amortization offset to depreciation expense

The following table sets forth the offset to depreciation expense from the amortization of deferred grants recorded by the Company during the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Amortization of deferred grants	$	2,978	$	4,652	$	9,287	$	10,513

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Goodwill (Tables)

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The changes in the carrying amount of goodwill for the nine months ended September 30, 2017 and for the year ended December 31, 2016 were as follows (dollars in thousands):

	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Balance as of January 1, 2017:
Goodwill, gross	$	632,937	$	339,865	$	167,276		$	1,140,078
Accumulated impairment losses	—		—		(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865	$	152,794		$	1,125,596
Changes during the period:
Goodwill acquired	4,083		—		11,849			15,932
Acquisition accounting adjustments	42		—		—			42
Currency translation adjustment	1,690		28,772		15,157			45,619
Balance as of September 30, 2017:
Goodwill, gross	$	638,752	$	368,637	$	194,282		$	1,201,671
Accumulated impairment losses	—		—		(14,482		)	(14,482		)
Goodwill	$	638,752	$	368,637	$	179,800		$	1,187,189

	North American Operations		Australian Operations			U.K./European Operations			Total Operations
Balance as of January 1, 2016	$	605,234	$	39,312		$	182,029		$	826,575
Changes during the period:
Goodwill acquired	26,969		308,267			—			335,236
Acquisition accounting adjustments	176		168			9,736			10,080
Goodwill impairment	—		—			(14,482		)	(14,482		)
Currency translation adjustment	558		(7,882		)	(24,489		)	(31,813		)
Balance as of December 31, 2016:
Goodwill, gross	$	632,937	$	339,865		$	167,276		$	1,140,078
Accumulated impairment losses	—		—			(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865		$	152,794		$	1,125,596

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2017

Debt Instrument [Line Items]

Schedule of Debt [Table Text Block]

The British pound-denominated term loans began to amortize in quarterly installments during the three months ended September 30, 2016, with the remaining principal balance payable upon maturity, as set forth below (amounts in thousands):

	Quarterly Payment Date	Principal Amount Due on Each Payment Date
British pound:	December 31, 2017 through June 30, 2018	£	1,271
	September 30, 2018 through December 31, 2019	£	2,542
	Maturity date - March 31, 2020	£	75,532

Schedule of Line of Credit Facilities [Table Text Block]

The Company's availability to draw from the unused borrowing capacity is subject to covenant limitations. As of September 30, 2017, the Company had the following unused borrowing capacity under its revolving credit facility (dollars in thousands):

	2017
Total available borrowing capacity	$	625,000
Outstanding revolving loans	$	225,960
Outstanding letter of credit guarantees	$	2,747
Unused borrowing capacity	$	396,293

Credit agreement [Member]

Debt Instrument [Line Items]

Schedule of Debt [Table Text Block]

As of September 30, 2017, the Company had the following outstanding term loans under its Credit Agreement (amounts in thousands, except percentages):

	Local Currency		United States Dollar Equivalent		Interest Rate
United States dollar	$	1,263,000	$	1,263,000	2.99	%
British pound	£	94,597	$	126,694	2.00	%

Line of Credit [Member]

Debt Instrument [Line Items]

Schedule of Debt [Table Text Block]

As of September 30, 2017, the Company had the following outstanding revolving loans under its revolving credit facility (amounts in thousands, except percentages):

	Local Currency		United States Dollar Equivalent		Interest Rate
British pound (swingline loan)	£	5,500	$	7,366	1.97	%
British pound	£	134,000	$	179,466	2.00	%
Canadian dollar	C$	7,000	$	5,608	3.07	%
Euro	€	28,400	$	33,520	1.75	%

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Derivative [Line Items]

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

The following table summarizes the fair value of the Company's derivative instruments recorded in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (dollars in thousands):

		Fair Value
	Balance Sheet Location	September 30, 2017		December 31, 2016
Asset Derivatives:
Derivatives designated as hedges:
British pound forward contracts	Other assets	$	16,017	$	26,359
Total derivatives designated as hedges		$	16,017	$	26,359
Derivatives not designated as hedges:
Cross-currency swap contract	Prepaid expenses and other	$	1,259	$	174
Cross-currency swap contract	Other assets	944		506
Total derivatives not designated as hedges		$	2,203	$	680
Liability Derivatives:
Derivatives designated as hedges:
Interest rate swap agreements	Accrued expenses	$	2,005	$	1,747
Interest rate swap agreements	Other long-term liabilities	15,425		13,411
British pound forward contracts	Other long-term liabilities	568		17
Total derivatives designated as hedges		$	17,998	$	15,175

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

The following table shows the effect of the Company's derivative instruments designated as cash flow hedges for the three and nine months ended September 30, 2017 and 2016 in other comprehensive income (OCI) (dollars in thousands):

	Total Cash Flow Hedge OCI Activity, Net of Tax
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
Derivatives Designated as Cash Flow Hedges:
Effective portion of net changes in fair value recognized in OCI, net of tax:
Interest rate swap agreements	$	388	$	(1,414	)	$	(1,382	)	$	(15,780	)
British pound forward contracts, net (a)	348		(713		)	2,020			(2,584		)
	$	736	$	(2,127	)	$	638		$	(18,364	)

(a) The three and nine months ended September 30, 2017 represents a net gain of $3.2 million and $8.6 million, respectively, for the mark-to-market of the U.K. intercompany loan, partially offset by a net loss of $2.8 million and $6.6 million, respectively, for the mark-to-market of the British pound forward contracts. The three and nine months ended September 30, 2016 represents a net loss of $2.3 million and $13.7 million, respectively, for the mark-to-market of the U.K. intercompany loan, partially offset by a net gain of $1.6 million and $11.1 million, respectively, for the mark-to-market of the British pound forward contracts.

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

The following table shows the effect of the Company's derivative instruments not designated as hedges for the three and nine months ended September 30, 2017 and 2016 in the consolidated statements of operations (dollars in thousands):

		Amount Recognized in Earnings
		Three Months Ended					Nine Months Ended
	Location of Amount Recognized in Earnings	September 30,					September 30,
		2017			2016		2017			2016
Derivative Instruments Not Designated as Hedges:
Cross-currency swap agreements	Interest expense	$	(1,887	)	$	—	$	(1,887	)	$	—
Cross-currency swap agreements, net (a)	Other income/(loss), net	(842		)	—		(4,510		)	—
		$	(2,729	)	$	—	$	(6,397	)	$	—

(a) The three months ended September 30, 2017 represents a net gain of $1.7 million for the mark-to-market of the Swaps, partially offset by a net loss of $2.5 million for the mark-to-market of the GRail Intercompany Loan. The nine months ended September 30, 2017 represents a net gain of $2.0 million for the mark-to-market of the Swaps and a net loss of $6.5 million for the mark-to-market of the GRail Intercompany Loan.

Interest Rate Swap [Member]

Derivative [Line Items]

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

The following table summarizes the terms of the Company's outstanding interest rate swap agreements entered into to manage the Company's exposure to changes in interest rates on its variable rate debt (amounts in thousands):

		Notional Amount
Effective Date	Expiration Date	Date	Amount		Pay Fixed Rate	Receive Variable Rate
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.76%	1-month LIBOR
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.74%	1-month LIBOR
9/30/2016	9/30/2026	9/30/2026	$	100,000	2.73%	1-month LIBOR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	93,150	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	55,373	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	55,373	2.44%	AUD-BBR
12/1/2016	12/1/2021	12/1/2021	A$	34,155	2.44%	AUD-BBR

Foreign Exchange Forward [Member]

Derivative [Line Items]

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

The following table summarizes the Company's outstanding British pound forward contracts (British pounds in thousands):

Effective Date	Settlement Date	Notional Amount	Exchange Rate
3/25/2015	3/31/2020	£60,000	1.51
3/25/2015	3/31/2020	£60,000	1.50
6/30/2015	3/31/2020	£2,035	1.57
9/30/2015	3/31/2020	£1,846	1.51
12/31/2015	3/31/2020	£1,873	1.48
3/31/2016	3/31/2020	£1,881	1.45
6/30/2016	3/31/2020	£1,909	1.35
9/30/2016	3/31/2020	£1,959	1.33
12/30/2016	3/31/2020	£1,989	1.28
3/31/2017	3/31/2020	£1,975	1.30
6/30/2017	3/31/2020	£2,026	1.34
10/2/2017	3/31/2020	£2,079	1.36

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Financial Instruments Carried at Fair Value [Table Text Block]

The following table presents the Company's financial instruments carried at fair value using Level 2 inputs as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017		December 31, 2016
Financial instruments carried at fair value using Level 2 inputs:
Financial assets carried at fair value:
British pound forward contracts	$	16,017	$	26,359
Cross-currency swap contracts	2,203		680
Total financial assets carried at fair value	$	18,220	$	27,039
Financial liabilities carried at fair value:
Interest rate swap agreements	$	17,430	$	15,158
British pound forward contracts	568		17
Total financial liabilities carried at fair value	$	17,998	$	15,175

The following table presents the Company's financial instruments carried at fair value using Level 3 inputs as of September 30, 2017 and December 31, 2016 (amounts in thousands):

	September 30, 2017				December 31, 2016
	Local Currency		United States Dollar Equivalent		Local Currency		United States Dollar Equivalent
Financial instrument carried at fair value using Level 3 inputs:
Financial liabilities carried at fair value:
Accrued deferred consideration - Freightliner	£	27,755	$	37,172	£	25,882	$	31,933
Accrued deferred consideration - HOG	$	5,842	$	5,842	$	—	$	—

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

The following table presents the amounts recognized, through other expenses, within the Company's consolidated statements of operations during the three and nine months ended September 30, 2017 and 2016 as a result of the change in the estimated fair value of the deferred consideration, which primarily represented the time value of money (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Freightliner	$	859	$	933	$	2,405	$	2,015
HOG	$	126	$	—	$	166	$	—

Schedule of Financial Instruments Carried at Historical Cost [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 September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial liabilities carried at historical cost:
United States term loan	$	1,253,776	$	1,259,935	$	1,415,873	$	1,422,512
U.K. term loan	124,859		127,114		121,149		121,594
Australian Credit Agreement	517,696		534,317		484,703		501,909
Partner Loan Agreement	186,729		187,999		172,154		171,435
Revolving credit facility	222,093		227,103		74,297		81,192
Other debt	2,900		2,918		4,882		4,889
Total	$	2,308,053	$	2,339,386	$	2,273,058	$	2,303,531

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U.K. Pension Plan (Tables)

9 Months Ended

Sep. 30, 2017

Defined Benefit Plan [Abstract]

Schedule of Net Benefit Costs

The following tables summarize the components of the Pension Program related to the net benefit costs recognized in labor and benefits in the Company's consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands):

	Three Months Ended September 30,
	2017						2016
	GBP			USD			GBP			USD
Service cost	£	2,988		$	3,909		£	2,394		$	3,143
Interest cost	1,978			2,588			2,227			2,923
Expected return on plan assets	(3,307		)	(4,327		)	(2,846		)	(3,737		)
Net periodic benefit cost	£	1,659		$	2,170		£	1,775		$	2,329

	Nine Months Ended September 30,
	2017						2016
	GBP			USD			GBP			USD
Service cost	£	8,964		$	11,434		£	7,182		$	10,006
Interest cost	5,934			7,569			6,681			9,308
Expected return on plan assets	(9,921		)	(12,655		)	(8,538		)	(11,896		)
Net periodic benefit cost	£	4,977		$	6,348		£	5,325		$	7,418

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Accumulated Other Comprehensive Income/(Loss) (Tables)

9 Months Ended

Sep. 30, 2017

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

The following tables set forth the components of accumulated other comprehensive loss attributable to Genesee & Wyoming Inc. included in the consolidated balance sheets and consolidated statements of comprehensive income (dollars in thousands):

	Foreign Currency Translation Adjustment			Defined Benefit Plans				Net Unrealized Gain/(Loss) on Cash Flow Hedges				Accumulated Other Comprehensive Loss
Balance, December 31, 2016	$	(177,662	)	$	(19,948	)		$	(13,726	)		$	(211,336	)
Other comprehensive income/(loss) before reclassifications	81,412			(2,262		)		(7,003		)		72,147
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision) of ($60) and ($5,347), respectively	—			113			(a)	7,937			(b)	8,050
Current period change	81,412			(2,149		)		934				80,197
Balance, September 30, 2017	$	(96,250	)	$	(22,097	)		$	(12,792	)		$	(131,139	)

	Foreign Currency Translation Adjustment			Defined Benefit Plans			Net Unrealized Gain/(Loss) on Cash Flow Hedges				Accumulated Other Comprehensive Loss
Balance, December 31, 2015	$	(156,146	)	$	11,005		$	(8,316	)		$	(153,457	)
Other comprehensive income/(loss) before reclassifications	3,618			4,305			(4,349		)		3,574
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit of ($37) and $9,343 respectively	—			67		(a)	(14,015		)	(b)	(13,948		)
Current period change	3,618			4,372			(18,364		)		(10,374		)
Balance, September 30, 2016	$	(152,528	)	$	15,377		$	(26,680	)		$	(163,831	)

(a) Existing net gains realized were recorded in labor and benefits on the consolidated statements of operations.

(b) Existing net gains/(losses) realized were recorded in interest expense on the consolidated statements of operations (see Note 7, Derivative Financial Instruments).

Noncontrolling Interest [Member]

Comprehensive Income (Loss) [Table Text Block]

The following table sets forth comprehensive income attributable to noncontrolling interest for the three and nine months ended September 30, 2017 (dollars in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017
Net income attributable to noncontrolling interest	$	3,145	$	6,317
Other comprehensive income/(loss):
Foreign currency translation adjustment	4,972		18,642
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax (provision)/benefit of ($164) and $127, respectively	383		(296		)
Comprehensive income attributable to noncontrolling interest	$	8,500	$	24,663

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Schedule of Stockholders Equity [Table Text Block]

The following table reconciles the beginning and end of the period equity balance attributable to Genesee & Wyoming Inc. and to noncontrolling interest (dollars in thousands):

	Genesee & Wyoming Inc. Stockholders' Equity			Noncontrolling Interest			Total Equity
Balance, December 31, 2016	$	2,894,582		$	292,539		$	3,187,121
Net income	122,485			6,317			128,802
Other comprehensive income	80,197			18,346			98,543
Additional paid-in capital from stock-based compensation awards	22,050			—			22,050
Treasury stock purchases	(3,275		)	—			(3,275		)
Other	444			(6		)	438
Balance, September 30, 2017	$	3,116,483		$	317,196		$	3,433,679

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Foreign Currency Disclosure [Text Block]

The following tables reflect the balance sheet exchange rates as of September 30, 2017 and December 31, 2016 and the average exchange rates for the three and nine months ended September 30, 2017 and 2016 used to translate the foreign entities respective local currency balance sheet and results of operations into United States dollars for the respective period:

					September 30, 2017		December 31, 2016
United States dollar per Australian dollar					$	0.78	$	0.72
United States dollar per British pound					$	1.34	$	1.23
United States dollar per Canadian dollar					$	0.80	$	0.74
United States dollar per Euro					$	1.18	$	1.06
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
United States dollar per Australian dollar	$	0.79	$	0.76	$	0.77	$	0.74
United States dollar per British pound	$	1.31	$	1.31	$	1.28	$	1.39
United States dollar per Canadian dollar	$	0.80	$	0.77	$	0.77	$	0.76
United States dollar per Euro	$	1.17	$	1.12	$	1.11	$	1.12

Schedule of segment reporting information, by segment [Table Text Block]

The following tables set forth select financial data for the Company's reportable segments for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Operating revenues:
Freight revenues	$	242,968	$	66,404	$	91,363	$	400,735
Freight-related revenues	60,286		12,880		67,757		140,923
All other revenues	15,673		1,986		17,610		35,269
Total operating revenues	$	318,927	$	81,270	$	176,730	$	576,927
Operating income	$	82,111	$	22,276	$	7,102	$	111,489
Depreciation and amortization	$	40,036	$	15,753	$	8,433	$	64,222
Interest expense, net	$	9,817	$	13,678	$	4,323	$	27,818
Provision for income taxes	$	28,270	$	2,013	$	224	$	30,507
Expenditures for additions to property & equipment, net of grants from outside parties	$	41,713	$	4,545	$	6,981	$	53,239

	Three Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	232,247	$	29,219	$	88,341		$	349,807
Freight-related revenues	62,124		23,523		43,873			129,520
All other revenues	15,823		1,408		4,444			21,675
Total operating revenues	$	310,194	$	54,150	$	136,658		$	501,002
Operating income	$	87,153	$	4,372	$	326		$	91,851
Depreciation and amortization	$	37,085	$	7,129	$	6,627		$	50,841
Interest expense, net	$	9,600	$	2,170	$	5,147		$	16,917
Provision for/(benefit from) income taxes	$	22,392	$	798	$	(3,547	)	$	19,643
Expenditures for additions to property & equipment, net of grants from outside parties	$	30,343	$	2,440	$	9,457		$	42,240

	Nine Months Ended September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	719,622	$	191,031	$	250,982		$	1,161,635
Freight-related revenues	186,814		36,089		164,978			387,881
All other revenues	47,641		4,866		34,445			86,952
Total operating revenues	$	954,077	$	231,986	$	450,405		$	1,636,468
Operating income	$	229,267	$	59,685	$	1,331		$	290,283
Depreciation and amortization	$	117,822	$	45,915	$	22,772		$	186,509
Interest expense, net	$	29,928	$	41,500	$	7,732		$	79,160
Provision for/(benefit from) income taxes	$	78,133	$	4,805	$	(906	)	$	82,032
Expenditures for additions to property & equipment, net of grants from outside parties	$	105,940	$	9,721	$	17,446		$	133,107

	Nine Months Ended September 30, 2016
	North American Operations		Australian Operations		U.K./European Operations			Total Operations
Operating revenues:
Freight revenues	$	681,154	$	80,390	$	255,459		$	1,017,003
Freight-related revenues	184,627		76,142		135,897			396,666
All other revenues	48,766		4,699		17,859			71,324
Total operating revenues	$	914,547	$	161,231	$	409,215		$	1,484,993
Operating income/(loss)	$	236,154	$	2,002	$	(2,115	)	$	236,041
Depreciation and amortization	$	110,398	$	21,018	$	19,679		$	151,095
Interest expense, net	$	29,730	$	6,963	$	15,529		$	52,222
Provision for/(benefit from) income taxes	$	59,354	$	521	$	(5,312	)	$	54,563
Expenditures for additions to property & equipment, net of grants from outside parties	$	95,282	$	8,094	$	26,195		$	129,571

Certain asset information by segment [Table Text Block]

The following tables set forth select balance sheet data for the Company's reportable segments as of September 30, 2017 and December 31, 2016 (dollars in thousands):

	September 30, 2017
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	7,158	$	47,989	$	25,130	$	80,277
Property and equipment, net	$	3,626,293	$	670,160	$	332,441	$	4,628,894

	December 31, 2016
	North American Operations		Australian Operations		U.K./European Operations		Total Operations
Cash and cash equivalents	$	10,137	$	9,213	$	12,969	$	32,319
Property and equipment, net	$	3,590,625	$	634,148	$	278,546	$	4,503,319

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Changes in Operations United States - HOG (Details) - Heart of Georgia Railroad [Member] $ in Millions		9 Months Ended
	May 31, 2017 USD ($)	Sep. 30, 2017 mile carload
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Acquisition, Effective Date of Acquisition	May 31, 2017
Cash consideration | $	$ 5.6
Contingent consideration | $	$ 5.7
Track Miles Leased | mile		219
Annual carloads transported | carload		10,000
Annual carloads interchanged with G&W | carload		2,000

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Changes in Operations United States - P&W (Details) $ / shares in Units, $ in Thousands		9 Months Ended
	Nov. 01, 2016 USD ($) $ / shares	Sep. 30, 2017 USD ($) mile employee port locomotive carload	Dec. 31, 2016 USD ($)
Goodwill		$ 1,187,189	$ 1,125,596
Providence and Worcester Railroad [Member]
Business Acquisition, Effective Date of Acquisition	Nov. 01, 2016
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Acquisition, Share Price | $ / shares	$ 25.00
Cash consideration	$ 126,200
Acquisition and integration related costs		$ 3,100
Number of employees | employee		130
Locomotives | locomotive		32
Track Miles Owned | mile		163
Track Miles Leased | mile		350
Annual carloads transported | carload		44,000
Number of Ports With Provided Rail Service | port		3
Cash and cash equivalents	1,529
Accounts receivable	4,011
Materials and supplies	1,048
Prepaid expenses and other	648
Property and equipment	129,473
Goodwill	27,938
Total Assets	164,647
Accounts payable and accrued expenses	9,759
Deferred income tax liabilities, net	27,464
Other long-term liabilities	1,273
Net assets	$ 126,151
Labor and Benefits [Member] | Providence and Worcester Railroad [Member]
Acquisition and integration related costs		$ 2,700
Other Expense [Member] | Providence and Worcester Railroad [Member]
Acquisition and integration related costs		$ 400

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Changes in Operations Australia - GRail (Details) AUD in Thousands, $ in Thousands, carload in Millions			3 Months Ended			9 Months Ended
	Dec. 01, 2016 AUD locomotive wagon train_set $ / AUD	Dec. 01, 2016 USD ($)	Mar. 31, 2017 AUD	Mar. 31, 2017 USD ($)	Dec. 31, 2016 AUD	Sep. 30, 2017 USD ($) carload	May 03, 2017 $ / AUD	Dec. 31, 2016 USD ($)	Dec. 01, 2016 USD ($) locomotive wagon train_set $ / AUD	Sep. 30, 2016 $ / AUD
Foreign currency exchange rate | $ / AUD	0.74						1.29		0.74	0.74
Noncontrolling Interest, Ownership Percentage by Parent	51.10%								51.10%
Goodwill | $						$ 1,187,189		$ 1,125,596
Australian Senior Credit Facility [Member]
Debt Instrument, Term					5 years
Proceeds from Issuance of Debt					AUD 690,000
Australian Term Loan [Member] | Credit agreement [Member]
Repayments of Debt					250,000
MIRA [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	48.90%								48.90%
GRail [Member]
Business Acquisition, Effective Date of Acquisition	Dec. 01, 2016	Dec. 01, 2016
Payments to Acquire Businesses, Gross	AUD 1,140,000	$ 844,900
Proceeds from Previous Acquisition			AUD 3,800	$ 2,900
Business Combination, Consideration Transferred	AUD 1,300,000
Debt Issuance Costs, Gross					19,800
Business Combination, Acquisition Related Costs					AUD 13,200
Business Combination, Rail Haulage Contract, Term of Contract	20 years	20 years
Business Combination, Rail Haulage Contract, Period of Minimum Guaranteed Volumes	18 years	18 years
Entity Number of Train Sets Owned or Leased | train_set	9								9
Entity Number of Locomotives Owned or Leased | locomotive	30								30
Entity Number of Wagons Owned or Leased | wagon	894								894
Accounts receivable	AUD 1,556								$ 1,153
Materials and supplies	411								305
Property and equipment	279,592								207,206
Goodwill	415,959								308,267
Total Assets	1,332,518								987,530
Accounts payable and accrued expenses	5,796								4,296
Deferred income tax liabilities, net	190,551								141,217
Net assets	1,136,171								$ 842,017
GRail [Member] | Customer Contracts [Member]
Finite-lived Intangible Assets Acquired	AUD 635,000	$ 470,599
GRail [Member] | Steam Coal [Member]
Annual Tonnes Hauled | carload						40

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Changes in Operations GRail Pro Forma (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares $ / AUD	May 03, 2017 $ / AUD	Dec. 01, 2016 $ / AUD
Operating revenues	$ 1,526,122
Net income attributable to Genesee & Wyoming Inc.	$ 122,779
Basic earnings per common share | $ / shares	$ 2.15
Diluted earnings per common share | $ / shares	$ 2.11
Foreign currency exchange rate | $ / AUD	0.74	1.29	0.74
MIRA [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners			48.90%
Acquisition-related Costs [Member] | Pro Forma [Member] | GRail [Member]
Business Acquisition, Pro Forma Income (loss) from Continuing Operations, Before Tax	$ 4,600
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Net of Tax	$ 4,400

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Changes in Operations Australia - Arrium (Details) $ in Thousands, AUD in Millions	3 Months Ended			9 Months Ended		12 Months Ended		48 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2017 AUD	Dec. 31, 2017 USD ($)	Dec. 31, 2014 USD ($)
Payments to Acquire Property, Plant, and Equipment				$ 149,105	$ 159,523
Operating revenues	$ 576,927	$ 501,002		1,636,468	1,484,993
Australian Operations [Member]
Asset Impairment Charges			$ 13,000
Operating revenues	$ 81,270	$ 54,150		$ 231,986	$ 161,231
Arrium Limited [Member] | Scenario, Forecast [Member]
Operating revenues						AUD 40	$ 32,000
Arrium Limited [Member] | Australian Operations [Member]
Payments to Acquire Property, Plant, and Equipment								$ 78,000
Provision for Doubtful Accounts			$ 8,100

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Changes in Operations United Kingdom - Pentalver (Details) £ in Thousands, $ in Thousands			3 Months Ended		9 Months Ended
	May 03, 2017 GBP (£) a employee seaport truck $ / AUD	May 03, 2017 USD ($) a seaport	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($) $ / AUD	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($) $ / AUD	May 03, 2017 USD ($) employee truck $ / AUD	Dec. 31, 2016 USD ($)	Dec. 01, 2016 $ / AUD
Payments to Acquire Businesses, Net of Cash Acquired					$ 107,586	$ 0
Foreign currency exchange rate | $ / AUD	1.29			0.74		0.74	1.29		0.74
Operating Income			$ 111,489	$ 91,851	290,283	$ 236,041
Depreciation and amortization			64,222	$ 50,841	186,509	$ 151,095
Goodwill			$ 1,187,189		1,187,189			$ 1,125,596
Pentalver Transport Limited [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%						100.00%
Business Acquisition, Effective Date of Acquisition	May 03, 2017	May 03, 2017
Payments to Acquire Businesses, Gross	£ 97,800	$ 126,200
Payments to Acquire Businesses, Net of Cash Acquired	77,500	100,100
Cash Acquired from Acquisition	£ 20,200	$ 26,100
Number of Major Seaports | seaport	4	4
Number of trucks | truck	150						150
Number of employees | employee	600						600
Revenues					64,700
Operating Income					3,100
Depreciation and amortization					2,100
Acquisition and integration related costs					3,700
Cash and cash equivalents	£ 20,224						$ 26,117
Accounts receivable	16,847						21,756
Materials and supplies	13,360						17,253
Prepaid expenses and other	3,238						4,182
Property and equipment	22,403						28,931
Goodwill	9,368						12,098
Total Assets	126,440						163,284
Accounts payable and accrued expenses	21,214						27,396
Deferred income tax liabilities, net	6,876						8,880
Deferred items-grants from outside parties	601						776
Net assets	£ 97,749						$ 126,232
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	33 years	33 years
Minimum [Member] | Pentalver Transport Limited [Member]
Number of Acres Providing Storage for Loaded and Empty Containers | a	100	100
Maximum [Member] | Pentalver Transport Limited [Member]
Term of contract of operational rights, in years	50 years	50 years
Freightliner [Member]
Number of trucks | truck	200						200
Operational Network Rights [Member] | Pentalver Transport Limited [Member]
Finite-lived Intangible Assets Acquired	£ 41,000	$ 52,947
Other Expense [Member] | Pentalver Transport Limited [Member]
Acquisition and integration related costs					3,600
Labor and Benefits [Member] | Pentalver Transport Limited [Member]
Acquisition and integration related costs					$ 100

XML

Changes in Operations Europe - ERS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Goodwill, Impairment Loss					$ (14,482)
Restructuring costs	$ 2,628	$ 223	$ 8,744	$ 6,320
U.K./European Operations [Member]
Goodwill, Impairment Loss					(14,482)
ERS Railways [Member] | U.K./European Operations [Member]
Asset Impairment Charges					21,500
Goodwill, Impairment Loss					(14,500)
Restructuring costs			$ 5,200
ERS Railways [Member] | U.K./European Operations [Member] | Customer Relationships [Member]
Impairment of Intangible Assets, Finite-lived					$ 4,100

XML

Earnings per Share Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Dec. 13, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Numerator [Line items]
Net income attributable to Genesee & Wyoming Inc.		$ 50,240	$ 56,785	$ 122,485	$ 132,203
Denominators [Line Items]
Weighted average Class A common shares outstanding – Basic		61,629,000	57,266,000	61,518,000	57,160,000
Weighted average Class B common shares outstanding		723,000	793,000	743,000	793,000
Dilutive effect of employee stock-based awards		125,000	121,000	138,000	130,000
Weighted average shares - Diluted		62,477,000	58,180,000	62,399,000	58,083,000
Earnings per common share [Line Items]
Basic earnings per common share attributable to Genesee & Wyoming Inc. common stockholders:		$ 0.82	$ 0.99	$ 1.99	$ 2.31
Diluted earnings per common share attributable to Genesee & Wyoming Inc. common stockholders		$ 0.80	$ 0.98	$ 1.96	$ 2.28
Class A Common Shares [Member]
Stock Issued During Period, Shares, New Issues	4,000,000

XML

Earnings per Share Antidilutive Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	1,245	1,174	1,302	1,292

XML

Accounts Receivable Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 428,785	$ 375,993
Allowance for doubtful accounts	(12,983)	(12,070)
Accounts receivable, net	415,802	363,923
Accounts receivable - trade [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	407,305	353,347
Accounts receivable - grants from outside parties [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	12,178	10,652	$ 10,800
Accounts receivable - insurance and other third-party claims [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	9,302	$ 11,994
Pentalver Transport Limited [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	$ 27,300

XML

Accounts Receivable Grants from Outside Parties (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
GRANTS FROM OUTSIDE PARTIES: [Abstract]
Grant proceeds received from outside parties			$ 16,000	$ 30,000
Amortization of deferred grants	$ 2,978	$ 4,652	$ 9,287	$ 10,513

XML

Accounts Receivable Insurance and Third-Party Claims (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 428,785		$ 375,993
Insurance proceeds for the replacement of assets	1,406	$ 10,319
Accounts receivable - insurance and other third-party claims [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	9,302		$ 11,994
North American Operations [Member] | Accounts receivable - insurance and other third-party claims [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	4,500
U.K./European Operations [Member] | Accounts receivable - insurance and other third-party claims [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	4,400
Australian Operations [Member] | Accounts receivable - insurance and other third-party claims [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 400

XML

Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	$ 1,140,078	$ 826,575
Accumulated Impairment Loss, Beginning Balance	(14,482)
Goodwill, Beginning Balance	1,125,596
Goodwill acquired	15,932	335,236
Acquisition accounting adjustments	42	10,080
Goodwill impairment		(14,482)
Currency translation adjustment	45,619	(31,813)
Goodwill, Gross, Ending Balance	1,201,671	1,140,078
Accumulated Impairment Loss, Ending Balance	(14,482)	(14,482)
Goodwill, Ending Balance	1,187,189	1,125,596
North American Operations [Member]
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	632,937	605,234
Accumulated Impairment Loss, Beginning Balance	0
Goodwill, Beginning Balance	632,937
Goodwill acquired	4,083	26,969
Acquisition accounting adjustments	42	176
Goodwill impairment		0
Currency translation adjustment	1,690	558
Goodwill, Gross, Ending Balance	638,752	632,937
Accumulated Impairment Loss, Ending Balance	0	0
Goodwill, Ending Balance	638,752	632,937
Australian Operations [Member]
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	339,865	39,312
Accumulated Impairment Loss, Beginning Balance	0
Goodwill, Beginning Balance	339,865
Goodwill acquired	0	308,267
Acquisition accounting adjustments	0	168
Goodwill impairment		0
Currency translation adjustment	28,772	(7,882)
Goodwill, Gross, Ending Balance	368,637	339,865
Accumulated Impairment Loss, Ending Balance	0	0
Goodwill, Ending Balance	368,637	339,865
U.K./European Operations [Member]
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	167,276	182,029
Accumulated Impairment Loss, Beginning Balance	14,482
Goodwill, Beginning Balance	152,794
Goodwill acquired	11,849	0
Acquisition accounting adjustments	0	9,736
Goodwill impairment		(14,482)
Currency translation adjustment	15,157	(24,489)
Goodwill, Gross, Ending Balance	194,282	167,276
Accumulated Impairment Loss, Ending Balance	(14,482)	14,482
Goodwill, Ending Balance	$ 179,800	$ 152,794

XML

Long-Term Debt Credit Agreement (Details) - Credit agreement [Member] £ in Thousands, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 USD ($)
United States Term Loan [Member]
Principal amount of each quarterly installment			$ 5,200
Prepayments of debt			159,800
Long-term Debt, Gross				$ 1,263,000
Debt Instrument, Interest Rate, Stated Percentage	2.99%	2.99%		2.99%
United States Term Loan [Member] | Period 3 [Member]
Principal payment upon maturity				$ 1,300,000
U.K. term loan [Member]
Principal amount of each quarterly installment		£ 3,800	$ 4,900
Long-term Debt, Gross	£ 94,597	£ 94,597		$ 126,694
Debt Instrument, Interest Rate, Stated Percentage	2.00%	2.00%		2.00%
U.K. term loan [Member] | Period 1 [Member]
Principal amount of each quarterly installment | £	£ 1,271
U.K. term loan [Member] | Period 2 [Member]
Principal amount of each quarterly installment | £	2,542
U.K. term loan [Member] | Period 3 [Member]
Principal payment upon maturity | £	£ 75,532	£ 75,532

XML

Long-Term Debt Unused Borrowing Capacity (Details) - Credit agreement [Member] $ in Thousands	Sep. 30, 2017 USD ($)
Revolving credit facility [Member]
Line of Credit Facility [Line Items]
Total available borrowing capacity	$ 625,000
Outstanding revolving loans	225,960
Unused borrowing capacity	396,293
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Outstanding letter of credit guarantees	$ 2,747

XML

Long-Term Debt Outstanding Revolving Loans (Details) - Revolving credit facility [Member] € in Thousands, £ in Thousands, CAD in Thousands, $ in Thousands	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 EUR (€)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 CAD
British Pound (Swingline Loan) [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross	£ 5,500		$ 7,366
Debt Instrument, Interest Rate, Stated Percentage	1.97%	1.97%	1.97%	1.97%
British Pound Revolving Loan [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross	£ 134,000		$ 179,466
Debt Instrument, Interest Rate, Stated Percentage	2.00%	2.00%	2.00%	2.00%
Canadian Dollar Revolving Loan [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross			$ 5,608	CAD 7,000
Debt Instrument, Interest Rate, Stated Percentage	3.07%	3.07%	3.07%	3.07%
Euro Revolving Loan [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross		€ 28,400	$ 33,520
Debt Instrument, Interest Rate, Stated Percentage	1.75%	1.75%	1.75%	1.75%

XML

Derivative Financial Instruments Outstanding Interest Rate Swap Agreements (Details) AUD in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2017 AUD	Sep. 30, 2017 USD ($)
Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Settlement Date	Sep. 30, 2026
Interest Rate Swap 1 [Member]
Derivative [Line Items]
Effective Date	Sep. 30, 2016
Expiration Date	Sep. 30, 2026
Notional Amount | $		$ 100,000
Pay Fixed Rate	2.76%	2.76%
Interest Rate Swap 2 [Member]
Derivative [Line Items]
Effective Date	Sep. 30, 2016
Expiration Date	Sep. 30, 2026
Notional Amount | $		$ 100,000
Pay Fixed Rate	2.74%	2.74%
Interest Rate Swap 3 [Member]
Derivative [Line Items]
Effective Date	Sep. 30, 2016
Expiration Date	Sep. 30, 2026
Notional Amount | $		$ 100,000
Pay Fixed Rate	2.73%	2.73%
Interest Rate Swap 4 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 93,150
Pay Fixed Rate	2.44%	2.44%
Interest Rate Swap 5 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 93,150
Pay Fixed Rate	2.44%	2.44%
Interest Rate Swap 6 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 93,150
Pay Fixed Rate	2.44%	2.44%
Interest Rate Swap 7 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 93,150
Pay Fixed Rate	2.44%	2.44%
Interest Rate Swap 8 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 55,373
Pay Fixed Rate	2.44%	2.44%
Interest Rate Swap 9 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 55,373
Pay Fixed Rate	2.44%	2.44%
Interest Rate Swap 10 [Member]
Derivative [Line Items]
Effective Date	Dec. 01, 2016
Expiration Date	Dec. 01, 2021
Notional Amount	AUD 34,155
Pay Fixed Rate	2.44%	2.44%
Fixed rate debt [Member]
Derivative [Line Items]
Probable future debt | $		$ 300,000
Variable rate debt [Member]
Derivative [Line Items]
Probable future debt | $		$ 300,000

XML

Derivative Financial Instruments Effectiveness Testing (Details) - Interest rate swap agreements [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Gain/(loss) reclassified from accumulated other comprehensive income/(loss) into earnings due to ineffectiveness	$ 0	$ 0	$ 0	$ 0
Existing net losses realized and recorded as interest expense	$ 600,000	$ 400,000	1,500,000	$ 1,100,000
Existing net losses expected to be realized within the next 12 months			$ 2,000,000

XML

Derivative Financial Instruments Foreign Currency Exchange Rate Risk (Details) £ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Mar. 31, 2015 GBP (£)	Mar. 31, 2015 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 USD ($)	Mar. 25, 2015 GBP (£)	Mar. 25, 2015 USD ($)
Derivative [Line Items]
Foreign subsidiaries third-party debt denominated in local currencies | $								$ 1,100,000,000
Foreign Exchange Forward [Member]
Derivative [Line Items]
Gain/(loss) reclassified from accumulated other comprehensive income/(loss) into earnings due to ineffectiveness | $	$ 0	$ 0			$ 0	$ 0
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | $	$ 100,000	$ 300,000			400,000	$ 500,000
Existing net gains expected to be realized within the next 12 months | $					$ 600,000
British Pound Foreign Currency Forward Contract 1 [Member]
Derivative [Line Items]
Effective Date					Mar. 25, 2015
Settlement Date					Mar. 31, 2020
Notional Amount							£ 60,000
Exchange Rate							1.51	1.51
British Pound Foreign Currency Forward Contract 2 [Member]
Derivative [Line Items]
Effective Date					Mar. 25, 2015
Settlement Date					Mar. 31, 2020
Notional Amount							£ 60,000
Exchange Rate							1.50	1.50
British Pound Foreign Currency Forward Contract 3 [Member]
Derivative [Line Items]
Effective Date					Jun. 30, 2015
Settlement Date					Mar. 31, 2020
Notional Amount							£ 2,035
Exchange Rate							1.57	1.57
British Pound Foreign Currency Forward Contract 4 [Member]
Derivative [Line Items]
Effective Date					Sep. 30, 2015
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,846
Exchange Rate							1.51	1.51
British Pound Foreign Currency Forward Contract 5 [Member]
Derivative [Line Items]
Effective Date					Dec. 31, 2015
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,873
Exchange Rate							1.48	1.48
British Pound Foreign Currency Forward Contract 6 [Member]
Derivative [Line Items]
Effective Date					Mar. 31, 2016
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,881
Exchange Rate							1.45	1.45
British Pound Foreign Currency Forward Contract 7 [Member]
Derivative [Line Items]
Effective Date					Jun. 30, 2016
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,909
Exchange Rate							1.35	1.35
British Pound Foreign Currency Forward Contract 8 [Member]
Derivative [Line Items]
Effective Date					Sep. 30, 2016
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,959
Exchange Rate							1.33	1.33
British Pound Foreign Currency Forward Contract 9 [Member]
Derivative [Line Items]
Effective Date					Dec. 30, 2016
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,989
Exchange Rate							1.28	1.28
British Pound Foreign Currency Forward Contract 10 [Member]
Derivative [Line Items]
Effective Date					Mar. 31, 2017
Settlement Date					Mar. 31, 2020
Notional Amount							£ 1,975
Exchange Rate							1.30	1.30
British Pound Foreign Currency Forward Contract 11 [Member]
Derivative [Line Items]
Effective Date					Jun. 30, 2017
Settlement Date					Mar. 31, 2020
Notional Amount							£ 2,026
Exchange Rate							1.34	1.34
British Pound Foreign Currency Forward Contract 12 [Member]
Derivative [Line Items]
Effective Date					Oct. 02, 2017
Settlement Date					Mar. 31, 2020
Notional Amount							£ 2,079
Exchange Rate							1.36	1.36
Freightliner [Member]
Derivative [Line Items]
Cash consideration			£ 492,100	$ 733,000,000
Intercompany Loan [Member]
Derivative [Line Items]
Long-term Debt, Gross									£ 120,000	$ 181,000,000
Accrued interest							£ 19,600	$ 26,200,000

XML

Derivative Financial Instruments Cross Currency Swap (Details) $ in Thousands, € in Millions, AUD in Millions		3 Months Ended		9 Months Ended
	Dec. 22, 2016 AUD	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 22, 2016 EUR (€)	Dec. 01, 2016 AUD	Dec. 01, 2016 EUR (€)
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net		$ (2,729)	$ 0	$ (6,397)	$ 0
Currency Swap [Member]
Derivative [Line Items]
Expiration Date		Jun. 30, 2019
Currency Swap 1 [Member]
Derivative [Line Items]
Notional Amount	AUD 123.9					€ 85.5
Currency Swap 2 [Member]
Derivative [Line Items]
Notional Amount	AUD 125.0					€ 86.3
BBR Interest rate [Member] | Currency Swap 1 [Member]
Derivative [Line Items]
Derivative, Description of Terms	Australian dollar BBR plus 4.50%
BBR Interest rate [Member] | Currency Swap 2 [Member]
Derivative [Line Items]
Derivative, Description of Terms	Australian dollar BBR plus 4.50%
EURIBOR Interest Rate [Member] | Currency Swap 1 [Member]
Derivative [Line Items]
Derivative, Description of Terms	EURIBOR plus 2.68%
EURIBOR Interest Rate [Member] | Currency Swap 2 [Member]
Derivative [Line Items]
Derivative, Description of Terms	EURIBOR plus 2.90%
Intercompany GRail Loan [Member]
Derivative [Line Items]
Debt Instrument, Face Amount							AUD 248.9	€ 171.7
Interest Expense [Member] | Currency Swap [Member]
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net		$ (1,887)	0	(1,887)	0
Other Nonoperating Income (Expense) [Member]
Derivative [Line Items]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Net of Foreign Currency Transaction Gain (Loss) on Intercompany Loan		$ (842)	$ 0	$ (4,510)	$ 0

XML

Derivative Financial Instruments Fair Value of the Company's Derivative Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
British pound forward contracts [Member] | Designated as Hedging Instrument [Member] | Other assets, net [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 16,017	$ 26,359
British pound forward contracts [Member] | Designated as Hedging Instrument [Member] | Other long-term liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	568	17
Cross-currency swap [Member] | Not Designated as Hedging Instrument [Member] | Other assets, net [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	944	506
Cross-currency swap [Member] | Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,259	174
Interest rate swap agreements [Member] | Designated as Hedging Instrument [Member] | Accrued expenses [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	2,005	1,747
Interest rate swap agreements [Member] | Designated as Hedging Instrument [Member] | Other long-term liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	15,425	13,411
Fair Value, Inputs, Level 2 [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	2,203	680
Fair Value, Inputs, Level 2 [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	16,017	26,359
Derivative Liability, Fair Value, Gross Liability	$ 17,998	$ 15,175

XML

Derivative Financial Instruments Derivative Instruments Designated as Cash Flow Hedges OCI Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other Comprehensive Income (Loss) [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	$ 736	$ (2,127)	$ 638	$ (18,364)
Other Comprehensive Income (Loss) [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) , Net of Intercompany, Gain (loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	348	(713)	2,020	(2,584)
Interest rate swap agreements [Member] | Other Comprehensive Income (Loss) [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	388	(1,414)	(1,382)	(15,780)
British pound forward contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	(2,800)	1,600	(6,600)	11,100
Intercompany Loan [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Foreign Currency Transaction Gain (Loss), Net of Tax	$ 3,200	$ (2,300)	$ 8,600	$ (13,700)

XML

Derivative Financial Instruments Derivative Instruments Not Designated as Hedges Amount Recognized in Earnings (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ (2,729)	$ 0	$ (6,397)	$ 0
Other Nonoperating Income (Expense) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Net of Foreign Currency Transaction Gain (Loss) on Intercompany Loan	(842)	0	(4,510)	0
Currency Swap [Member] | Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	1,700		2,000
Currency Swap [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	(1,887)	$ 0	(1,887)	$ 0
Intercompany GRail Loan [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Foreign Currency Transaction Gain (Loss), Net of Tax	$ (2,500)		$ (6,500)

XML

Fair Value of Financial Instruments Financial Instruments Carried at Fair Value-Level 2 (Details) - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets carried at fair value	$ 18,220	$ 27,039
Financial liabilities carried at fair value	17,998	15,175
Designated as Hedging Instrument [Member] | British pound forward contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	16,017	26,359
Derivative Liability	568	17
Designated as Hedging Instrument [Member] | Interest rate swap agreements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	17,430	15,158
Not Designated as Hedging Instrument [Member] | Cross-currency swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	$ 2,203	$ 680

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Fair Value of Financial Instruments Financial instruments Carried at Fair Value-Level 3 (Details) £ in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Mar. 31, 2015	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 GBP (£)	Dec. 31, 2016 USD ($)
Freightliner [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of economic interest retained by acquiree's management			6.00%
Loss recognized in earnings as a result of the change in estimated fair value	$ 859	$ 933		$ 2,405	$ 2,015
Heart of Georgia Railroad [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Loss recognized in earnings as a result of the change in estimated fair value	$ 126	$ 0		$ 166	$ 0
Fair Value, Inputs, Level 3 [Member] | Freightliner [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Business Combination, Contingent Consideration, Liability						£ 27,755	$ 37,172	£ 25,882	$ 31,933
Fair Value, Inputs, Level 3 [Member] | Heart of Georgia Railroad [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Business Combination, Contingent Consideration, Liability							$ 5,842		$ 0

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Fair Value of Financial Instruments Financial Instruments Carried at Historical Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	$ 2,308,053	$ 2,273,058
Revolving credit facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	222,093	74,297
Other debt [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	2,900	4,882
Credit agreement [Member] | United States term loan [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	1,253,776	1,415,873
Credit agreement [Member] | U.K. term loan [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	124,859	121,149
Australian Credit Agreement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	517,696	484,703
Australian Partner Loan Agreement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Value	186,729	172,154
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	2,339,386	2,303,531
Fair Value, Inputs, Level 2 [Member] | Revolving credit facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	227,103	81,192
Fair Value, Inputs, Level 2 [Member] | Other debt [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	2,918	4,889
Fair Value, Inputs, Level 2 [Member] | Credit agreement [Member] | United States term loan [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	1,259,935	1,422,512
Fair Value, Inputs, Level 2 [Member] | Credit agreement [Member] | U.K. term loan [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	127,114	121,594
Fair Value, Inputs, Level 2 [Member] | Australian Credit Agreement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	534,317	501,909
Fair Value, Inputs, Level 2 [Member] | Australian Partner Loan Agreement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	$ 187,999	$ 171,435

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U.K. Pension Plan Net Periodic Service Cost (Details) - Pension Plan [Member] £ in Thousands, $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 GBP (£)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 GBP (£)	Sep. 30, 2016 USD ($)	Dec. 31, 2017 GBP (£)	Dec. 31, 2017 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Service cost	£ 2,988	$ 3,909	£ 2,394	$ 3,143	£ 8,964	$ 11,434	£ 7,182	$ 10,006
Interest cost	1,978	2,588	2,227	2,923	5,934	7,569	6,681	9,308
Expected return on plan assets	(3,307)	(4,327)	(2,846)	(3,737)	(9,921)	(12,655)	(8,538)	(11,896)
Net periodic benefit cost	£ 1,659	$ 2,170	£ 1,775	$ 2,329	4,977	6,348	£ 5,325	$ 7,418
Defined Benefit Plan, Contribution by Employer					£ 4,500	$ 6,000
Scenario, Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Future Benefit Payment, Remainder of Fiscal Year									£ 2,600	$ 3,500
U.K. Pension [Member]
Defined Benefit Plan Disclosure [Line Items]
Company contribution % required in shared cost arrangement					60.00%	60.00%
Defined benefit plan, contribution percent by participant					40.00%	40.00%

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Income Taxes (Details) AUD in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2016 AUD	Sep. 30, 2016 USD ($)
Effective income tax rate	36.40%	25.70%	38.90%	29.20%
Effective Income Tax Rate Reconciliation, United States Short Line Tax Credit, Amount		$ 7,800,000		$ 21,400,000
Unrecognized Tax Benefits	$ 3,300,000		$ 3,271,000
Tax credits percentage of qualified maintenance expenditures to reduce federal income tax			50.00%
Tax credit limitation per mile on maintenance expenditures to reduce federal income tax			$ 3,500
Impairment of Assets [Member] | Australian Operations [Member]
Valuation allowance					AUD 2.6	$ 2,000,000
State and Local Jurisdiction [Member]
Change in enacted tax rate, amount	$ 1,400,000		$ 1,300,000
Foreign Tax Authority [Member]
Change in enacted tax rate, amount		$ 4,300,000		$ 4,272,000

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Commitments and Contingencies (Details) $ in Millions	Sep. 30, 2017 USD ($)
Customer Contracts [Member] | Accounts Receivable [Member] | Collectibility of Receivables [Member]
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 13

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Accumulated Other Comprehensive Income/(Loss) AOCI Attributbale to G&W (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss, beginning balance	$ (211,336)	$ (153,457)
Other comprehensive income/(loss) before reclassifications	72,147	3,574
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit	8,050	(13,948)
Current period change in OCI	80,197	(10,374)
Accumulated other comprehensive income loss, ending balance	(131,139)	(163,831)
Foreign Currency Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss, beginning balance	(177,662)	(156,146)
Other comprehensive income/(loss) before reclassifications	81,412	3,618
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit	0	0
Current period change in OCI	81,412	3,618
Accumulated other comprehensive income loss, ending balance	(96,250)	(152,528)
Defined Benefit Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss, beginning balance	(19,948)	11,005
Other comprehensive income/(loss) before reclassifications	(2,262)	4,305
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit	113	67
Current period change in OCI	(2,149)	4,372
Accumulated other comprehensive income loss, ending balance	(22,097)	15,377
Tax (provision) on amounts reclassified from AOCI for defined benefit plans	(60)	(37)
Net Unrealized Gain/(Loss) on Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss, beginning balance	(13,726)	(8,316)
Other comprehensive income/(loss) before reclassifications	(7,003)	(4,349)
Amounts reclassified from accumulated other comprehensive loss, net of tax (provision)/benefit	7,937	(14,015)
Current period change in OCI	934	(18,364)
Accumulated other comprehensive income loss, ending balance	(12,792)	(26,680)
Tax (provision)/benefit on amounts reclassified from AOCI for cash flow hedges	$ (5,347)	$ 9,343

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Accumulated Other Comprehensive Income/(Loss) OCI Attributable to Noncontrolling Interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Noncontrolling Interest [Abstract]
Net income attributable to noncontrolling interest	$ 3,145	$ 0	$ 6,317	$ 0
Foreign currency translation adjustment, net of tax, portion attributable to noncontrolling interest	4,972		18,642
Net unrealized gain/(loss) on qualifying cash flow hedges, net of tax	383		(296)
Comprehensive income attributable to noncontrolling interest	8,500	$ 0	24,663	$ 0
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax, Portion Attributable to Noncontrolling Interest	$ (164)		$ 127

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Stockholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity Attributable to Parent Beginning Balance			$ 2,894,582
Net Income Attributable to Parent	$ 50,240	$ 56,785	122,485	$ 132,203
OCI, Net of Tax, Portion Attributable to Parent			80,197	(10,374)
Adjustments to Additional Paid in Capital, Share-based Compensation and Exercise of Stock Options			22,050
Treasury Stock Purchases			(3,275)
Stockholders' Equity Attributable to Parent Ending Balance	3,116,483		3,116,483
Stockholders' Equity Attributable to Noncontrolling Interest Beginning Balance			292,539
Net income attributable to noncontrolling interest	3,145	0	6,317	0
OCI, Net of Tax, Portion Attributable to Noncontrolling Interest			18,346
Stockholders' Equity, Other			438
Stockholders' Equity Attributable to Noncontrolling Interest Ending Balance	317,196		317,196
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest Beginning Balance			3,187,121
Net income	53,385	56,785	128,802	132,203
Other Comprehensive Income, Net of Tax	33,676	$ 4,430	98,543	$ (10,374)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest Ending Balance	$ 3,433,679		3,433,679
Parent [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustments to Additional Paid in Capital, Share-based Compensation and Exercise of Stock Options			22,050
Treasury Stock Purchases			3,275
Stockholders' Equity, Other			444
Noncontrolling Interest [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Other			$ (6)

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Significant Non-Cash Investing Activities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Other Significant Noncash Transactions [Line Items]
Outstanding receivables from outside parties for the funding of capital expenditures	$ 428,785		$ 375,993
Purchases of property and equipment accrued in accounts payable	12,300	$ 14,900
Accounts receivable - grants from outside parties [Member]
Other Significant Noncash Transactions [Line Items]
Outstanding receivables from outside parties for the funding of capital expenditures	$ 12,178	$ 10,800	$ 10,652

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Segment Information Foreign Currency Exchange Rates (Details)	Sep. 30, 2017 $ / AUD	Sep. 30, 2017 $ / CAD	Sep. 30, 2017 $ / €	Sep. 30, 2017 $ / £	May 03, 2017 $ / AUD	Dec. 31, 2016 $ / AUD	Dec. 31, 2016 $ / CAD	Dec. 31, 2016 $ / €	Dec. 31, 2016 $ / £	Dec. 01, 2016 $ / AUD	Sep. 30, 2016 $ / AUD	Sep. 30, 2016 $ / CAD	Sep. 30, 2016 $ / €	Sep. 30, 2016 $ / £
Foreign currency exchange rate					1.29					0.74	0.74
Last day rate [Member] [Member]
Foreign currency exchange rate	0.78	0.80	1.18	1.34		0.72	0.74	1.06	1.23
Quarter to Date Average [Member]
Foreign currency exchange rate	0.79	0.80	1.17	1.31							0.76	0.77	1.12	1.31
Year to Date Average [Member]
Foreign currency exchange rate	0.77	0.77	1.11	1.28							0.74	0.76	1.12	1.39

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Segment Information Segments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) reportable_segment provinces region	Sep. 30, 2016 USD ($)	Dec. 01, 2016
Segment Reporting Information [Line Items]
Number of operating regions | region			9
Number of reportable segments | reportable_segment			3
Noncontrolling Interest, Ownership Percentage by Parent					51.10%
Freight revenues	$ 400,735	$ 349,807	$ 1,161,635	$ 1,017,003
Freight-related revenues	140,923	129,520	387,881	396,666
All other revenues	35,269	21,675	86,952	71,324
Total Operating revenues	576,927	501,002	1,636,468	1,484,993
Operating Income (Loss)	111,489	91,851	290,283	236,041
Depreciation and amortization	64,222	50,841	186,509	151,095
Interest expense, net	27,818	16,917	79,160	52,222
Provision for/(benefit from) income taxes	30,507	19,643	82,032	54,563
Expenditures for Additions to Property and Equipment Net of Grants From Outside Parties	53,239	42,240	$ 133,107	129,571
North American Operations [Member]
Segment Reporting Information [Line Items]
Number of operating regions | provinces			7
Freight revenues	242,968	232,247	$ 719,622	681,154
Freight-related revenues	60,286	62,124	186,814	184,627
All other revenues	15,673	15,823	47,641	48,766
Total Operating revenues	318,927	310,194	954,077	914,547
Operating Income (Loss)	82,111	87,153	229,267	236,154
Depreciation and amortization	40,036	37,085	117,822	110,398
Interest expense, net	9,817	9,600	29,928	29,730
Provision for/(benefit from) income taxes	28,270	22,392	78,133	59,354
Expenditures for Additions to Property and Equipment Net of Grants From Outside Parties	41,713	30,343	105,940	95,282
Australian Operations [Member]
Segment Reporting Information [Line Items]
Freight revenues	66,404	29,219	191,031	80,390
Freight-related revenues	12,880	23,523	36,089	76,142
All other revenues	1,986	1,408	4,866	4,699
Total Operating revenues	81,270	54,150	231,986	161,231
Operating Income (Loss)	22,276	4,372	59,685	2,002
Depreciation and amortization	15,753	7,129	45,915	21,018
Interest expense, net	13,678	2,170	41,500	6,963
Provision for/(benefit from) income taxes	2,013	798	4,805	521
Expenditures for Additions to Property and Equipment Net of Grants From Outside Parties	4,545	2,440	9,721	8,094
U.K./European Operations [Member]
Segment Reporting Information [Line Items]
Freight revenues	91,363	88,341	250,982	255,459
Freight-related revenues	67,757	43,873	164,978	135,897
All other revenues	17,610	4,444	34,445	17,859
Total Operating revenues	176,730	136,658	450,405	409,215
Operating Income (Loss)	7,102	326	1,331	(2,115)
Depreciation and amortization	8,433	6,627	22,772	19,679
Interest expense, net	4,323	5,147	7,732	15,529
Provision for/(benefit from) income taxes	224	(3,547)	(906)	(5,312)
Expenditures for Additions to Property and Equipment Net of Grants From Outside Parties	$ 6,981	$ 9,457	$ 17,446	$ 26,195
MIRA [Member]
Segment Reporting Information [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners					48.90%

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Segment Information Balance Sheet Data (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Segment Reporting, Asset Reconciling Item [Line Items]
Cash and cash equivalents	$ 80,277	$ 32,319	$ 26,366	$ 35,941
Property and equipment, net	4,628,894	4,503,319
North American Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Cash and cash equivalents	7,158	10,137
Property and equipment, net	3,626,293	3,590,625
Australian Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Cash and cash equivalents	47,989	9,213
Property and equipment, net	670,160	634,148
U.K./European Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Cash and cash equivalents	25,130	12,969
Property and equipment, net	$ 332,441	$ 278,546

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Recently Issued Accounting Standards Recently Issued Accounting Standards (Details) $ in Millions	Dec. 31, 2016 USD ($)
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Operating Leases, Future Minimum Payments Due	$ 546