EX-99.1 2 v103060_ex99-1.htm
 
Genesee & Wyoming Reports Results for the Fourth Quarter of 2007
 
GREENWICH, Conn., February 13, 2008/PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the fourth quarter of 2007 of $13.9 million, compared with net income of $14.3 million in the fourth quarter of 2006. GWI's diluted earnings per share (EPS) in the fourth quarter of 2007 were $0.38 with 35.9 million shares outstanding, compared with diluted earnings per share of $0.34 with 42.2 million shares outstanding in the fourth quarter of 2006.
 
GWI’s income from continuing operations in the fourth quarter of 2007 was $14.5 million, or $0.40 per diluted share, compared with income from continuing operations of $15.7 million, or $0.37 per diluted share in the fourth quarter of 2006.
 
As previously reported, GWI commenced the liquidation of its hurricane damaged operations in Mexico on June 25, 2007, and had no remaining employees as of September 30, 2007. Results from GWI’s Mexican operations for the three and twelve months ended December 31, 2007 and 2006, are now included in results from discontinued operations.
 
GWI’s results for the fourth quarter of 2007 included gains on the sale of assets of $0.8 million ($0.5 million after-tax, or $0.02 per share), compared with $2.8 million ($1.7 million after-tax, or $0.04 per share) in the fourth quarter of 2006. Changes in Canadian tax laws in the fourth quarter of 2007 generated a tax benefit of $0.6 million (or $0.02 per share).  GWI's results for the fourth quarter of 2006 included a net tax benefit of $1.2 million (or $0.03 per share), primarily associated with regulations issued in late 2006 clarifying the calculation of the short line tax credit.
 
Continuing Operations
 
In the fourth quarter of 2007, GWI's revenues increased $16.8 million, or 14.3%, to $134.5 million, compared with $117.7 million in the fourth quarter of 2006. Freight revenues increased $7.0 million, or 9.3%, primarily due to an increase in average freight revenues per carload of 15.8%, partially offset by a 5.6% decrease in carloads. The average freight revenues per carload in the fourth quarter of 2007 benefited 3.7% from the appreciation of the Australian dollar and Canadian dollar relative to the U.S. dollar. Non-freight revenues increased $9.9 million, or 23.1%, primarily due to stronger fuel sales, crewing and equipment rentals in Australia, as well as higher rates and volumes at GWI’s U.S. port railroads.
 
GWI's operating income in the fourth quarter of 2007 increased 20.3% to $22.5 million, compared with $18.7 million in the fourth quarter of 2006. The operating ratio was 83.3% in the fourth quarter of 2007, compared with an operating ratio of 84.1% in the fourth quarter of 2006. Operating income for the fourth quarter of 2007 included $0.8 million of net gains on the sale of assets, compared with $2.8 million in the fourth quarter of 2006. 
 
 
Comments from the Chief Executive Officer
 
John C. Hellmann, Chief Executive Officer of GWI commented, “Despite significant weakness in the U.S. housing and paper markets as well as a drought in Australia, our revenues in the fourth quarter of 2007 increased in nine out of eleven commodity groups. Particularly noteworthy was the increase in our coal shipments, increased exports moving through our port railroads and higher revenues per carload. This revenue strength combined with effective cost controls resulted in a 20% increase in our fourth quarter operating income.”

“The newly-acquired Maryland Midland Railway has been integrated as planned and we are pleased to welcome 30 new employees to the G&W family. We continue to pursue acquisition targets in the U.S. and abroad, and we intend to use our strong balance sheet in pursuit of these opportunities. Even with the uncertain U.S. economic environment, the outlook for our core railroads in 2008 is positive, primarily due to the expected start-up of major new customers in four of our eight operating regions.”
 
 
Annual Consolidated Results - Continuing Operations
 
For the year ended December 31, 2007, GWI reported income from continuing operations of $69.2 million, compared with $172.6 million for the year ended December 31, 2006. GWI's diluted earnings per share were $1.77 in 2007 (with 39.1 million shares outstanding), compared with $4.07 in 2006 (with 42.4 million shares outstanding).

GWI’s 2007 results included a net tax benefit of $3.7 million (or $0.09 per share) associated with the sale of GWI’s 50% interest in the Western Australia operations and certain other assets of the Australian Railroad Group (ARG) (ARG Sale) in 2006. GWI’s 2006 results included a net gain from the ARG Sale of $114.5 million after-tax (or $2.70 per share) and a non-cash investment write-down in Bolivia of $5.9 million after-tax (or $0.14 per share).
 
 
Free Cash Flow (1)
 
GWI’s continuing operations generated free cash flow of $79.5 million for the year ended December 31, 2007. For the year ended December 31, 2006, GWI’s continuing operations generated $29.5 million in free cash flow.

On June 1, 2006, GWI completed the ARG Sale. Also on June 1, 2006, GWI completed the acquisition of certain South Australian operations of ARG (GWA Purchase). The net proceeds from these transactions totaled $291.6 million in the year ended December 31, 2006. Although the ARG Sale occurred in 2006, the taxes to the Australian government related to the transaction were paid in June 2007.
 
    
($ in millions)    
  Year Ended
  
     
December 31, 
  
     
2007
 
  
2006
  
 
 
            
Net cash provided by operating activities (a)
  
$
34.5
  
$
85.2
  
Net cash (used in) provided by investing activities (b) (c)
    
(70.0
)
  
230.7
  
Cash paid for acquisitions/proceeds from ARG Sale
    
19.4
   
(286.4
)
Australian taxes on ARG Sale
    
95.6
   
-
  
Free cash flow (1)
  
$
79.5
  
$
29.5
  
 
 
(a)  
Includes Australian taxes on the ARG Sale totaling $95.6 million paid in 2007.
(b)  
Includes net proceeds of $291.6 million from the ARG Sale and GWA Purchase in 2006.
(c)  
Includes the acquisition of Maryland Midland Railway (Maryland Midland) in 2007 for $26.9 million offset by $7.5 million of Maryland Midland cash on hand at the acquisition date.

Including the Australian tax payment, for the year ended December 31, 2007, GWI generated net cash from operating activities of $34.5 million. For the year ended December 31, 2006, GWI generated net cash from operating activities of $85.2 million. Net cash used in investing activities in the year ended December 31, 2007, included $61.8 million in net purchases of property and equipment, partially offset by $1.7 million in insurance proceeds for capital projects completed in 2006 and $9.4 million in cash from asset dispositions. Net cash provided by investing activities in the year ended December 31, 2006, included $59.5 million in net purchases of property and equipment.

 
Discontinued Operations
 
During the second quarter of 2007, GWI’s Mexican subsidiary, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM), resigned its operating concession, ceased operations and commenced liquidation proceedings. The Ministry of Communications and Transportation (SCT) in Mexico has contested the resignation of the concession and in the third quarter of 2007 commenced an official action to seize substantially all of FCCM’s operating assets in response to the liquidation. GWI believes the SCT’s actions were unlawful and is pursuing all legal remedies to recover its operating assets.
 
For the year ended December 31, 2007, GWI reported a net loss from discontinued operations of $14.1 million (or $0.36 per share), compared with a net loss of $38.6 million (or $0.91 per share) for the year ended December 31, 2006. For discontinued operations, cash used in operating activities was $14.0 million and $1.8 million for the years ended December 31, 2007 and 2006, respectively. Cash used in investing activities of discontinued operations was $0.5 million and $3.2 million for the years ended December 31, 2007 and 2006, respectively. Free cash flow used in discontinued operations was $14.5 million and $5.1 million for the years ended December 31, 2007 and 2006, respectively (1). As of December 31, 2007, there was a net liability of $1.7 million remaining on GWI’s balance sheet associated with its Mexican operations.
 
 
Conference Call and Webcast Details
 
As previously announced, GWI's conference call to discuss financial results for the fourth quarter will be held Wednesday, February 13, 2008 at 11:00 a.m. (Eastern Time). The dial-in number for the teleconference is (888) 423-3280; outside U.S., call (612) 332-0720, or the call may be accessed live over the Internet (listen only) under the "Investors" tab of GWI's website (http://www.gwrr.com), by selecting "Fourth Quarter Earnings Audio Webcast." An audio replay of the conference call will be accessible via the Investors tab of GWI's website starting at 1:00 p.m. Wednesday, February 13, 2008.
 
 
About Genesee & Wyoming Inc.
 
GWI is a leading owner and operator of short line and regional freight railroads in the United States, Canada and Australia and owns a minority interest in a railroad in Bolivia. Operations currently include 48 railroads organized in eight regions, with more than 5,700 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements. GWI provides rail service at 12 U.S. ports and also performs contract coal loading and railcar switching for industrial customers.
 
 
Cautionary Statement Concerning Forward-Looking Statements
 
This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments; increased competition in relevant markets; funding needs and financing sources; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others. Words such as "anticipates," "intends," "plans," "believes," "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GWI disclaims any intention to update the current expectations or forward-looking statements contained in this press release.
 
(1) Free Cash Flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, its most directly comparable GAAP measure. The information required by Regulation G under the Securities Exchange Act of 1934, including a reconciliation to net cash provided by operating activities is included in the tables attached to this press release.

 
SOURCE Genesee & Wyoming Inc.
 
Michael Williams of GWI Corporate Communications
1-203-629-3722
mwilliams@gwrr.com
 
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006
(In thousands, except per share amounts)
(unaudited)
 
   
Three Months Ended
  
Twelve Months Ended
  
   
December 31,
  
December 31,
  
   
2007
 
2006
  
2007
 
2006
  
                   
OPERATING REVENUES
  
$
134,542
  
$
117,702
  
$
516,167
  
$
450,683
  
                           
OPERATING EXPENSES
    
112,075
   
98,960
   
419,339
   
369,026
 
INCOME FROM OPERATIONS
    
22,467
   
18,742
   
96,828
   
81,657
 
                           
GAIN ON SALE OF EQUITY INVESTMENT IN ARG
    
-
   
-
   
-
   
218,845
 
INVESTMENT LOSS - BOLIVIA
    
-
   
-
   
-
   
(5,878
)
EQUITY LOSS OF UNCONSOLIDATED
                          
INTERNATIONAL AFFILIATES
    
-
   
-
   
-
   
(10,752
)
INTEREST INCOME
    
744
   
3,372
   
7,813
   
7,839
 
INTEREST EXPENSE
    
(4,109
)
  
(3,500
)
  
(14,735
)
  
(16,007
)
OTHER INCOME, NET
    
43
   
141
   
889
   
252
 
                           
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
    
19,145
   
18,755
   
90,795
   
275,956
 
                           
PROVISION FOR INCOME TAXES
    
4,621
   
3,016
   
21,548
   
103,309
 
                           
INCOME FROM CONTINUING OPERATIONS
    
14,524
   
15,739
   
69,247
   
172,647
 
                           
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
    
(578
)
  
(1,393
)
  
(14,072
)
  
(38,644
)
                           
NET INCOME
  
$
13,946
  
$
14,346
  
$
55,175
  
$
134,003
  
                           
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS
  
$
0.46
  
$
0.42
  
$
2.00
  
$
4.59
  
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS
    
(0.02
)
  
(0.04
)
  
(0.41
)
  
(1.03
)
BASIC EARNINGS PER COMMON SHARE
  
$
0.44
  
$
0.38
  
$
1.59
  
$
3.56
  
                           
WEIGHTED AVERAGE SHARES - BASIC
    
31,429
   
37,618
   
34,625
   
37,609
 
                           
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS
  
$
0.40
  
$
0.37
  
$
1.77
  
$
4.07
  
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS
    
(0.02
)
  
(0.03
)
  
(0.36
)
  
(0.91
)
DILUTED EARNINGS PER COMMON SHARE
  
$
0.38
  
$
0.34
  
$
1.41
  
$
3.16
  
                           
WEIGHTED AVERAGE SHARES - DILUTED
    
35,919
   
42,216
   
39,148
   
42,417
 
 
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2007 AND DECEMBER 31, 2006
(In thousands)
(unaudited)
 
   
December 31,
  
December 31,
  
ASSETS
  
2007
  
2006
  
           
CURRENT ASSETS:
          
Cash and cash equivalents
  
$
46,684
  
$
240,206
  
Accounts receivable, net
    
125,934
   
117,099
 
Materials and supplies
    
7,555
   
11,302
 
Prepaid expenses and other
    
18,147
   
14,695
 
Current assets of discontinued operations
    
2,213
   
-
 
Deferred income tax assets, net
    
7,495
   
7,617
 
Total current assets
    
208,028
   
390,919
 
               
PROPERTY AND EQUIPMENT, net
    
696,990
   
573,292
 
INVESTMENT IN UNCONSOLIDATED AFFILIATES
    
4,696
   
4,644
 
GOODWILL
    
39,352
   
37,788
 
INTANGIBLE ASSETS, net
    
117,106
   
120,669
 
OTHER ASSETS, net
    
10,276
   
11,055
 
DEFERRED INCOME TAX ASSETS, net
    
1,353
   
2,697
 
Total assets
  
$
1,077,801
  
$
1,141,064
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
CURRENT LIABILITIES:
              
Current portion of long-term debt
  
$
2,247
  
$
4,372
  
Accounts payable
    
128,038
   
98,186
 
Accrued expenses
    
36,436
   
38,364
 
Income tax payable - Australia
    
1,356
   
91,925
 
Current liabilities of discontinued operations
    
3,919
   
-
 
Deferred income tax liabilities, net
    
66
   
291
 
Total current liabilities
    
172,062
   
233,138
 
               
LONG-TERM DEBT, less current portion
    
270,519
   
241,313
 
DEFERRED INCOME TAX LIABILITIES, net
    
93,336
   
72,876
 
DEFERRED ITEMS - grants from government agencies
    
94,651
   
56,588
 
OTHER LONG-TERM LIABILITIES
    
15,144
   
16,668
 
MINORITY INTEREST
    
1,108
   
294
 
               
TOTAL STOCKHOLDERS' EQUITY
    
430,981
   
520,187
 
Total liabilities and stockholders' equity
  
$
1,077,801
  
$
1,141,064
  
 
 

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 
   
Year Ended December 31,
  
   
2007
  
2006
  
           
CASH FLOWS FROM OPERATING ACTIVITIES:
          
Net income
 
$
55,175
  
$
134,003
  
Adjustments to reconcile net income to net cash provided
              
by operating activities:
 
            
Loss from discontinued operations, net of tax
    
14,072
   
38,644
 
Depreciation and amortization
    
31,773
   
27,907
 
Compensation cost related to equity awards
    
5,412
   
8,455
 
Excess tax benefits from share-based compensation
    
(1,159
)
  
(4,544
)
Deferred income taxes
    
7,994
   
13,907
 
Gain on insurance recovery
    
-
   
(1,937
)
Gain on sale of equity investment in ARG
    
-
   
(218,845
)
Net gain on sale of assets
   
(6,742
)
  
(3,078
)
Investment loss - Bolivia
    
-
   
5,878
 
Equity loss of unconsolidated international affiliates, net of tax
    
-
   
7,500
 
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions:
              
Accounts receivable, net
    
(5,412
)
  
(7,936
)
Materials and supplies
    
2,400
   
(1,760
)
Prepaid expenses and other
    
(6,159
)
  
(5,140
)
Accounts payable and accrued expenses
    
29,160
   
6,571
 
Income tax payable - Australia
    
(92,982
)
  
86,358
 
Other assets and liabilities, net
   
989
   
(762
)
Net cash provided by operating activities from continuing operations
    
34,521
   
85,221
 
Net cash used in operating activities from discontinued operations
    
(14,000
)
  
(1,843
)
Net cash provided by operating activities
    
20,521
   
83,378
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
              
Purchase of property and equipment, net of grants from government agencies
    
(61,774
)
  
(59,545
)
Proceeds from ARG Sale
    
-
   
306,746
 
Cash paid for acquisitions, net of cash acquired
    
(19,424
)
  
(20,354
)
Insurance proceeds for the replacement of assets
    
1,747
   
-
 
Cash received from unconsolidated international affiliates
    
-
   
378
 
Proceeds from disposition of property and equipment
    
9,404
   
3,447
 
Net cash (used in) provided by investing activities from continuing operations
    
(70,047
)
  
230,672
 
Net cash used in investing activities from discontinued operations
    
(517
)
  
(3,232
)
Net cash (used in) provided by investing activities
   
(70,564
)
  
227,440
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
              
Principal payments on long-term borrowings, including capital leases
    
(21,448
)
  
(182,711
)
Proceeds from issuance of long-term debt
    
55,000
   
92,500
 
Net proceeds from employee stock purchases
    
3,384
   
6,856
 
Treasury stock purchases
    
(175,637
)
  
(11,334
)
Excess tax benefits from share-based compensation
    
1,159
   
4,544
 
Net cash used in financing activities from continuing operations
    
(137,542
)
  
(90,145
)
Net cash used in financing activities from discontinued operations
    
(13,301
)
  
(2,478
)
Net cash used in financing activities
    
(150,843
)
  
(92,623
)
               
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    
7,581
   
3,342
 
               
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS
    
(217
)
  
-
 
               
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
(193,522
)
  
221,537
 
CASH AND CASH EQUIVALENTS, beginning of period
    
240,206
   
18,669
 
CASH AND CASH EQUIVALENTS, end of period
  
$
46,684
  
$
240,206
  
 
 

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
 
   
Three Months Ended
  
   
December 31,
  
 
 
2007
 
2006
  
     
 
% of
    
 
% of
  
   
Amount
 
Revenue
  
Amount
  
Revenue
  
Revenues:
                  
Freight
  
$
82,137
    
61.0
%
$
75,147
    
63.8
%
Non-freight
   
52,405
   
39.0
%
  
42,555
   
36.2
%
                           
Total revenues
  
$
134,542
    
100.0
%
$
117,702
    
100.0
%
                           
Operating Expense Comparison:
                          
Natural Classification
                          
Labor and benefits
 
$
43,348
    
32.2
%
$
39,671
    
33.7
%
Equipment rents
   
9,460
   
7.0
%
  
10,615
   
9.0
%
Purchased services
   
9,631
   
7.2
%
  
10,164
   
8.6
%
Depreciation and amortization
   
8,258
   
6.1
%
  
7,502
   
6.4
%
Diesel fuel used in operations
    
13,801
   
10.3
%
  
9,795
   
8.3
%
Diesel fuel sold to third parties
    
8,933
   
6.6
%
  
5,756
   
4.9
%
Casualties and insurance
   
3,694
   
2.8
%
  
3,655
   
3.1
%
Materials
   
5,798
   
4.3
%
  
4,736
   
4.0
%
Net gain on sale of assets
    
(828
)
  
-0.6
%
  
(2,835
)
  
-2.4
%
Other expenses
   
9,980
   
7.4
%
  
9,901
   
8.5
%
                           
Total operating expenses
  
$
112,075
    
83.3
%
$
98,960
    
84.1
%
                           
Functional Classification
                          
Transportation
 
$
44,132
    
32.8
%
$
39,538
    
33.6
%
Maintenance of ways and structures
   
10,534
   
7.8
%
  
10,145
   
8.6
%
Maintenance of equipment
   
17,708
   
13.2
%
  
18,695
   
15.9
%
Diesel fuel sold to third parties
    
8,933
   
6.6
%
  
5,756
   
4.9
%
General and administrative
   
23,338
   
17.4
%
  
20,159
   
17.1
%
Net gain on sale of assets
    
(828
)
  
-0.6
%
  
(2,835
)
  
-2.4
%
Depreciation and amortization
   
8,258
   
6.1
%
  
7,502
   
6.4
%
                           
Total operating expenses
  
$
112,075
    
83.3
%
$
98,960
    
84.1
%
 
 

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
 
   
Twelve Months Ended
  
   
December 31,
  
   
2007
  
2006
  
   
 
  
% of
 
    
% of
 
   
Amount
 
Revenue
 
Amount
  
Revenue
  
Revenues:
                  
Freight
  
$
329,184
    
63.8
%
$
311,310
    
69.1
%
Non-freight
   
186,983
   
36.2
%
  
139,373
   
30.9
%
                           
Total revenues
  
$
516,167
    
100.0
%
$
450,683
    
100.0
%
                           
Operating Expense Comparison:
                          
Natural Classification
                          
Labor and benefits
 
$
167,066
    
32.4
%
$
152,566
    
33.9
%
Equipment rents
   
37,106
   
7.2
%
  
37,561
   
8.3
%
Purchased services
   
39,583
   
7.7
%
  
33,728
   
7.5
%
Depreciation and amortization
   
31,773
   
6.1
%
  
27,907
   
6.2
%
Diesel fuel used in operations
    
45,718
   
8.8
%
  
40,061
   
8.9
%
Diesel fuel sold to third parties
    
26,975
   
5.2
%
  
13,189
   
2.9
%
Casualties and insurance
   
16,179
   
3.1
%
  
13,062
   
2.9
%
Materials
   
23,208
   
4.5
%
  
19,718
   
4.4
%
Net gain on sale of assets
    
(6,742
)
  
-1.3
%
  
(3,078
)
  
-0.7
%
Gain on insurance recovery
    
-
   
0.0
%
  
(1,937
)
  
-0.4
%
Other expenses
   
38,473
   
7.5
%
  
36,249
   
8.0
%
                           
Total operating expenses
  
$
419,339
    
81.2
%
$
369,026
    
81.9
%
                           
Functional Classification
                          
Transportation
 
$
166,146
    
32.2
%
$
147,874
    
32.8
%
Maintenance of ways and structures
   
45,364
   
8.8
%
  
40,233
   
8.9
%
Maintenance of equipment
   
70,330
   
13.6
%
  
64,419
   
14.3
%
Diesel fuel sold to third parties
    
26,975
   
5.2
%
  
13,189
   
2.9
%
General and administrative
   
85,493
   
16.6
%
  
80,419
   
17.9
%
Net gain on sale of assets
    
(6,742
)
  
-1.3
%
  
(3,078
)
  
-0.7
%
Gain on insurance recovery
    
-
   
0.0
%
  
(1,937
)
  
-0.4
%
Depreciation and amortization
   
31,773
   
6.1
%
  
27,907
   
6.2
%
                           
Total operating expenses
  
$
419,339
    
81.2
%
$
369,026
    
81.9
%
 
 

GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
 
   
Three Months Ended
  
Three Months Ended
  
   
December 31, 2007
  
December 31, 2006
  
   
Freight
      
Average Revenue
  
Freight
      
Average Revenue
  
Commodity Group
  
Revenues
  
Carloads
  
Per Carload
  
Revenues
 
Carloads
 
Per Carload
  
                           
Pulp & Paper
  
$
17,849
    
30,102
 
$
593
  
$
17,073
    
31,861
 
$
536
  
Coal, Coke & Ores
    
15,861
   
51,543
   
308
   
12,292
   
47,249
   
260
 
Metals
    
9,113
   
18,334
   
497
   
8,218
   
18,610
   
442
 
Farm & Food Products
    
9,000
   
16,671
   
540
   
8,150
   
21,338
   
382
 
Lumber & Forest Products
    
8,263
   
19,955
   
414
   
7,426
   
19,443
   
382
 
Minerals & Stone
    
7,663
   
29,833
   
257
   
6,798
   
27,766
   
245
 
Chemicals-Plastics
    
6,717
   
9,891
   
679
   
5,883
   
10,370
   
567
 
Petroleum Products
    
4,568
   
7,035
   
649
   
4,034
   
6,723
   
600
 
Autos & Auto Parts
    
1,780
   
3,301
   
539
   
1,346
   
2,719
   
495
 
Intermodal
    
204
   
428
   
477
   
341
   
878
   
388
 
Other
    
1,119
   
4,766
   
235
   
3,586
   
16,274
   
220
 
                                       
Totals
  
$
82,137
    
191,859
   
428
 
$
75,147
    
203,231
   
370
 
 
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
 
   
Twelve Months Ended
  
Twelve Months Ended
  
   
December 31, 2007
  
December 31, 2006
  
   
Freight
      
Average Revenue
  
Freight
      
Average Revenue
  
Commodity Group
  
Revenues
 
Carloads
  
Per Carload
  
Revenues
 
Carloads
  
Per Carload
  
                           
Pulp & Paper
  
$
69,598
    
122,706
 
$
567
  
$
69,049
    
136,128
 
$
507
  
Coal, Coke & Ores
    
60,164
   
195,393
   
308
   
59,367
   
198,075
   
300
 
Metals
    
36,569
   
78,191
   
468
   
35,558
   
82,938
   
429
 
Farm & Food Products
    
36,561
   
74,095
   
493
   
27,355
   
75,574
   
362
 
Lumber & Forest Products
    
35,967
   
85,309
   
422
   
34,714
   
90,017
   
386
 
Minerals & Stone
    
30,932
   
122,006
   
254
   
25,995
   
95,759
   
271
 
Chemicals-Plastics
    
26,014
   
40,928
   
636
   
24,708
   
42,680
   
579
 
Petroleum Products
    
16,319
   
25,750
   
634
   
14,460
   
24,873
   
581
 
Autos & Auto Parts
    
7,096
   
13,853
   
512
   
6,281
   
12,839
   
489
 
Intermodal
    
1,060
   
2,108
   
503
   
1,651
   
3,936
   
419
 
Other
    
8,904
   
40,930
   
218
   
12,172
   
58,203
   
209
 
                                       
Totals
  
$
329,184
    
801,269
   
411
 
$
311,310
    
821,022
   
379
 
 
 
Reconciliation of non-GAAP Financial Measure
 
This earnings release contains free cash flow which is a "non-GAAP financial measure" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled this non-GAAP financial measure to its most directly comparable U.S. GAAP measures.
 
Free Cash Flow Description and Discussion

Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities in Continuing Operations less Net Cash Used in/Provided by Investing Activities in Continuing Operations, excluding the Cost of Acquisitions/Proceeds from Divestitures and directly related tax effects. Free Cash Flow in Discontinued Operations is defined as Net Cash Used in/Provided by Operating Activities in Discontinued Operations less Net Cash Used in/Provided by Investing Activities in Discontinued Operations. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with GAAP.

The following table sets forth a reconciliation of GWI's Net Cash Provided by Operating Activities in Continuing Operations to GWI's Free Cash Flow ($ in millions):

   
Year Ended
  
   
December 31,
  
   
2007
  
2006
  
Net cash provided by operating activities from continuing operations
  
$
34.5
  
$
85.2
  
Net cash (used in) provided by investing activities from continuing operations
     (70.0 )  
230.7
  
Cash paid for acquisitions/proceeds from ARG Sale
     19.4    
(286.4
)
Australian taxes on ARG Sale
     95.6    
-
  
Free cash flow
  
$
79.5
  
$
29.5
  
 
 
The following table sets forth a reconciliation of GWI's Net Cash Used In Operating Activities from Discontinued Operations to GWI's Free Cash Flow from Discontinued Operations ($ in millions):

   
Year Ended
  
   
December 31,
  
   
2007
  
2006
  
Net cash used in operating activities from discontinued operations
  
$
(14.0
)
$
(1.9
)
Net cash used in investing activities from discontinued operations
     (0.5 )  
(3.2
)
Free cash flow
  
$
(14.5
)
$
(5.1
)