EX-99.1 2 v121627_ex99-1.htm Unassociated Document
Genesee & Wyoming Reports Results for the Second Quarter of 2008
 
GREENWICH, Conn., August 4, 2008/PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the second quarter of 2008 of $15.4 million, compared with net income of $10.7 million in the second quarter of 2007. GWI's diluted earnings per share (EPS) in the second quarter of 2008 were $0.42 with 36.4 million weighted average shares outstanding, compared with diluted EPS of $0.27 with 40.4 million weighted average shares outstanding in the second quarter of 2007.

GWI’s diluted earnings per share from continuing operations increased 12.8% to $0.44 in the second quarter of 2008, compared with $0.39 in the second quarter of 2007. GWI’s Mexican operations are included in results from discontinued operations.
 
Continuing Operations
 
In the second quarter of 2008, GWI's revenues increased $27.4 million, or 21.9%, to $152.7 million, compared with $125.3 million in the second quarter of 2007. Of this increase, revenues from acquisitions contributed $8.1 million and revenues from same railroad operations increased $19.3 million, or 15.4%. Acquisition revenues in the second quarter of 2008 included three months from the Maryland Midland Railway, two and a half months from Rotterdam Rail Feeding, and one month from CAGY Industries.

Same railroad freight revenues increased $8.0 million, or 10.0%, in the second quarter of 2008 primarily due to an increase in average revenues per carload of 13.6%. Of this pricing increase, 2.6% was due to the appreciation of the Australian and Canadian dollars relative to the U.S. dollar. Same railroad non-freight revenues increased $11.3 million, or 25.1%, in the second quarter of 2008 primarily due to higher third-party fuel sales in Australia, increased crewing and iron ore services in Australia, and higher revenues from GWI’s U.S. port railroads and industrial switching.

GWI's operating income in the second quarter of 2008 increased $8.4 million, or 39.2%, to $29.7 million, compared with $21.3 million in the second quarter of 2007. GWI’s operating ratio was 80.6% in the second quarter of 2008, compared with an operating ratio of 83.0% in the second quarter of 2007. Operating income in the second quarter of 2008 included $2.5 million of gains on the sale of assets, compared with $0.4 million in the second quarter of 2007.

GWI’s operating income in the second quarter of 2008 was negatively impacted by two factors. First, coal shipments to several power plants in the Midwestern United States were delayed by severe flooding which temporarily closed rail lines of two connecting Class I railroads. GWI expects to regain these coal shipments in the third and fourth quarters of 2008. Second, the 25.2% increase in the average price of diesel fuel from $3.14 per gallon to $3.93 per gallon between the first and second quarters of 2008 reduced income due to a lag in GWI’s typical fuel cost recovery mechanisms.
 
 
GWI’s effective income tax rate increased from 27.0% in the second quarter of 2007 to 39.6% in the second quarter of 2008, primarily due to the expiration of the short line tax credit on December 31, 2007.
 
Comments from the Chief Executive Officer
 
John C. Hellmann, Chief Executive Officer of GWI, commented, “Our operating income in the second quarter of 2008 increased 39%, as our overall business performed well. Although we had temporary delays in coal shipments due to flooding in the Midwest as well as a spike in the price of diesel fuel, these negative factors were offset by effective management of our costs and gains on the sale of surplus assets. With four new customers coming on line in May, we continue to offset weakness in lumber and forest products shipments in Oregon and Eastern Canada resulting from the weak U.S. housing market. Our general outlook for the remainder of 2008 and into 2009 remains positive despite the uncertain economic environment.”
 
“The financial performance of GWI’s three recent acquisitions, CAGY Industries, Maryland Midland and Rotterdam Rail Feeding has been consistent with our expectations and their outlook is good. We remain active in the acquisition market, as our strong balance sheet and cash flow is proving to be a significant competitive advantage.”
 
Free Cash Flow from Continuing Operations (1)
  
($ in millions)  
Six Months Ended
June 30,
  
   
2008
  
2007
  
           
Net cash provided by (used in) operating activities
 
$
35.3
  
$
(42.0
)
Net cash used in investing activities
   
(116.7
)
  
(18.0
)
Net cash paid for acquisitions (a)
    
97.6
    
-
 
Australia taxes on ARG Sale (b)
    
-
   
95.6
  
Free cash flow (1)
  
$
16.2
  
$
35.6
  
 
(a)  
Includes $71.5 million in net cash paid for the acquisition of CAGY Industries Inc. (CAGY), $22.5 million in net cash paid for the acquisition of Rotterdam Rail Feeding (RRF) and $3.6 million for final working capital adjustments related to the December 2007 acquisition of Maryland Midland Railway, Inc. (MMID).
 
(b)  
Includes Australian taxes resulting from the 2006 sale of the Western Australia operations and certain assets of the Australian Railroad Group (ARG), previously owned by GWI and its joint venture partner (ARG Sale), totaling $95.6 million paid in 2007, as calculated using the U.S. Dollar/Australian Dollar exchange rate on the date of payment.
 
GWI’s continuing operations generated free cash flow of $16.2 million and $35.6 million for the six months ended June 30, 2008 and 2007, respectively. In the six months of 2008, net cash provided by operating activities was reduced by $14.7 million as a result of cash used for working capital purposes, primarily payments of accounts payable and accrued liabilities. Other than the $95.6 million tax payment related to the ARG Sale, which was excluded from free cash flow, working capital provided $1.1 million to net cash flow from operations in the 2007 period.
 
2
 
Net cash used in investing activities in the six months ended June 30, 2008, included $40.9 million in purchases of property and equipment, partially offset by $16.8 million in cash received from government grants as well as $5.0 million from sales of assets and insurance proceeds. Net cash used in investing activities in the six months ended June 30, 2007, included $27.5 million in purchases of property and equipment, partially offset by $8.9 million in cash received from government grants and insurance proceeds.
 
Discontinued Operations
 
For the quarter ended June 30, 2008, GWI reported a net loss related to its discontinued Mexican business of $0.7 million (or $0.02 per diluted share), compared with a net loss of $4.9 million (or $0.12 per diluted share) for the quarter ended June 30, 2007. For discontinued operations, cash used in operating activities was $1.2 million and $4.5 million for the six months ended June 30, 2008 and 2007, respectively. There was no cash used in investing activities of discontinued operations for the six months ended June 30, 2008, compared with $0.5 million for the same period in 2007. Free cash flow used in discontinued operations was $1.2 million and $5.0 million for the six months ended June 30, 2008 and 2007, respectively (1). As of June 30, 2008, 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 second quarter will be held Monday, August 4, 2008 at 11:00 a.m. (Eastern Time). The dial-in number for the teleconference is (888) 428-4479; 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 "Second 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. Monday, August 4, 2008.
 
About Genesee & Wyoming Inc.
 
GWI owns and operates short line and regional freight railroads and provides railcar switching services in the United States, Canada, Australia and the Netherlands and owns a minority interest in a railroad in Bolivia. Operations currently include 52 railroads organized in nine regions, with more than 6,000 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements. GWI provides rail service at 16 ports in North America and Europe and performs contract coal loading and railcar switching for industrial customers. Corporate headquarters is in Greenwich, Conn.

3
 
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.
 
Contact: Michael E. Williams
Director, Corporate Communications
Genesee & Wyoming Inc.
+1 (203) 629-3722
 
4
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(In thousands, except per share amounts)
(unaudited)

   
Three Months Ended
  
Six Months Ended
  
   
June 30,
  
June 30,
  
   
2008
  
2007
  
2008
  
2007
  
                   
OPERATING REVENUES
  
$
152,715
  
$
125,294
  
$
293,396
  
$
250,401
  
                           
OPERATING EXPENSES
    
123,040
   
103,980
   
242,415
   
205,701
 
INCOME FROM OPERATIONS
    
29,675
   
21,314
   
50,981
   
44,700
 
                           
INTEREST INCOME
    
571
   
2,609
   
1,156
   
5,962
 
INTEREST EXPENSE
    
(4,044
)
  
(3,519
)
  
(7,953
)
  
(7,014
)
MINORITY INTEREST
    
(60
)
  
-
   
(85
)
  
-
 
OTHER INCOME, NET
    
561
   
977
   
659
   
894
 
                           
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
    
26,703
   
21,381
   
44,758
   
44,542
 
                           
PROVISION FOR INCOME TAXES
    
10,577
   
5,780
   
17,396
   
12,858
 
                           
INCOME FROM CONTINUING OPERATIONS
    
16,126
   
15,601
   
27,362
   
31,684
 
                           
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
    
(735
)
  
(4,858
)
  
(1,574
)
  
(6,621
)
                           
NET INCOME
  
$
15,391
  
$
10,743
  
$
25,788
  
$
25,063
  
                           
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS
  
$
0.51
  
$
0.44
  
$
0.87
  
$
0.87
  
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS
    
(0.02
)
  
(0.14
)
  
(0.05
)
  
(0.18
)
BASIC EARNINGS PER COMMON SHARE
  
$
0.48
  
$
0.30
  
$
0.82
  
$
0.69
  
                           
WEIGHTED AVERAGE SHARES - BASIC
    
31,755
   
35,847
   
31,626
   
36,554
 
                           
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS
  
$
0.44
  
$
0.39
  
$
0.76
  
$
0.77
  
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS
    
(0.02
)
  
(0.12
)
  
(0.04
)
  
(0.16
)
DILUTED EARNINGS PER COMMON SHARE
  
$
0.42
  
$
0.27
  
$
0.71
  
$
0.61
  
                           
WEIGHTED AVERAGE SHARES - DILUTED
    
36,378
   
40,425
   
36,197
   
41,141
 
 
5
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
(In thousands)
(unaudited)

   
June 30,
  
December 31,
  
ASSETS
  
2008
  
2007
  
           
CURRENT ASSETS:
          
Cash and cash equivalents
  
$
40,181
  
$
46,684
  
Accounts receivable, net
    
140,052
   
125,934
 
Materials and supplies
    
9,019
   
7,555
 
Prepaid expenses and other
    
17,953
   
18,147
 
Current assets of discontinued operations
    
1,351
   
2,213
 
Deferred income tax assets, net
    
7,462
   
7,495
 
Total current assets
    
216,018
   
208,028
 
               
PROPERTY AND EQUIPMENT, net
    
783,683
   
696,990
 
INVESTMENT IN UNCONSOLIDATED AFFILIATES
    
4,805
   
4,696
 
GOODWILL
    
59,845
   
39,352
 
INTANGIBLE ASSETS, net
    
170,882
   
117,106
 
OTHER ASSETS, net
    
5,538
   
10,276
 
DEFERRED INCOME TAX ASSETS, net
    
768
   
1,353
 
Total assets
  
$
1,241,539
  
$
1,077,801
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
CURRENT LIABILITIES:
              
Current portion of long-term debt
  
$
2,393
  
$
2,247
  
Accounts payable
    
119,134
   
128,038
 
Accrued expenses
    
35,797
   
37,792
 
Current liabilities of discontinued operations
    
3,049
   
3,919
 
Deferred income tax liabilities, net
    
84
   
66
 
Total current liabilities
    
160,457
   
172,062
 
               
LONG-TERM DEBT, less current portion
    
335,235
   
270,519
 
DEFERRED INCOME TAX LIABILITIES, net
    
145,721
   
93,336
 
DEFERRED ITEMS - grants from governmental agencies
    
106,446
   
94,651
 
OTHER LONG-TERM LIABILITIES
    
18,271
   
15,144
 
MINORITY INTEREST
    
1,193
   
1,108
 
               
TOTAL STOCKHOLDERS' EQUITY
    
474,216
   
430,981
 
Total liabilities and stockholders' equity
  
$
1,241,539
  
$
1,077,801
  
 
6
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

   
Six Months Ended June 30,
  
   
2008
  
2007
  
           
CASH FLOWS FROM OPERATING ACTIVITIES:
          
Net income
 
$
25,788
  
$
25,063
  
Adjustments to reconcile net income to net cash provided
              
by operating activities:
              
Loss from discontinued operations
    
1,574
   
6,621
 
Depreciation and amortization
    
18,652
   
15,546
 
Compensation cost related to equity awards
    
2,598
   
2,754
 
Excess tax benefits from share-based compensation
    
(3,937
)
  
(815
)
Deferred income taxes
    
8,268
   
3,836
 
Net gain on sale of assets
   
(3,031
)
  
(463
)
Minority interest
    
85
   
-
 
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions:
              
Accounts receivable, net
    
(4,633
)
  
(476
)
Materials and supplies
    
(678
)
  
1,692
 
Prepaid expenses and other
    
849
   
1,986
 
Accounts payable and accrued expenses
    
(12,591
)
  
(4,095
)
Income tax payable - Australia
    
(2,349
)
  
(94,103
)
Other assets and liabilities, net
   
4,698
   
451
 
Net cash provided by (used in) operating activities from continuing operations
    
35,293
   
(42,003
)
Net cash used in operating activities from discontinued operations
    
(1,166
)
  
(4,450
)
Net cash provided by (used in) operating activities
    
34,127
   
(46,453
)
               
CASH FLOWS FROM INVESTING ACTIVITIES:
              
Purchase of property and equipment
    
(40,891
)
  
(27,476
)
Grant proceeds from government agencies
    
16,786
   
7,233
 
Cash paid for acquisitions, net of cash acquired
    
(97,616
)
  
-
 
Insurance proceeds for the replacement of assets
    
419
   
1,715
 
Proceeds from disposition of property and equipment
    
4,597
   
521
 
Net cash used in investing activities from continuing operations
    
(116,705
)
  
(18,007
)
Net cash used in investing activities from discontinued operations
    
-
   
(481
)
Net cash used in investing activities
   
(116,705
)
  
(18,488
)
               
CASH FLOWS FROM FINANCING ACTIVITIES:
              
Principal payments on long-term borrowings, including capital leases
    
(70,505
)
  
(985
)
Proceeds from issuance of long-term debt
    
135,000
   
-
 
Net proceeds from employee stock purchases
    
8,057
   
2,431
 
Treasury stock purchases
    
(2,355
)
  
(65,144
)
Excess tax benefits from share-based compensation
    
3,937
   
815
 
Net cash provided by (used in) financing activities from continuing operations
    
74,134
   
(62,883
)
Net cash used in financing activities from discontinued operations
    
-
   
(13,301
)
Net cash provided by (used in) financing activities
   
74,134
   
(76,184
)
               
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    
1,947
   
6,542
 
               
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS
    
(6
)
  
-
 
               
DECREASE IN CASH AND CASH EQUIVALENTS
    
(6,503
)
  
(134,583
)
CASH AND CASH EQUIVALENTS, beginning of period
    
46,684
   
240,206
 
CASH AND CASH EQUIVALENTS, end of period
  
$
40,181
  
$
105,623
  
 
7
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)

   
Three Months Ended
  
   
June 30,
  
 
 
2008
  
2007
 
   
 
  
% of
      
% of
 
   
Amount
  
Revenue
  
Amount
  
Revenue
  
Revenues:
                  
Freight
  
$
91,419
    
59.9
%
$
80,120
    
63.9
%
Non-freight
   
61,296
   
40.1
%
  
45,174
   
36.1
%
                           
Total revenues
  
$
152,715
    
100.0
%
$
125,294
    
100.0
%
                           
Operating Expense Comparison:
                          
Natural Classification
                          
Labor and benefits
 
$
46,294
    
30.3
%
$
41,183
    
32.9
%
Equipment rents
   
8,762
   
5.7
%
  
9,535
   
7.6
%
Purchased services
   
12,790
   
8.4
%
  
10,064
   
8.0
%
Depreciation and amortization
   
9,453
   
6.2
%
  
7,840
   
6.3
%
Diesel fuel used in operations
    
17,578
   
11.5
%
  
10,654
   
8.5
%
Diesel fuel sold to third parties
    
10,379
   
6.8
%
  
5,750
   
4.6
%
Casualties and insurance
   
3,804
   
2.5
%
  
3,425
   
2.7
%
Materials
   
6,492
   
4.3
%
  
6,252
   
5.0
%
Net gain on sale of assets
    
(2,481
)
  
-1.6
%
  
(432
)
  
-0.3
%
Other expenses
   
9,969
   
6.5
%
  
9,709
   
7.7
%
                           
Total operating expenses
  
$
123,040
    
80.6
%
$
103,980
    
83.0
%
                           
Functional Classification
                          
Transportation
 
$
52,876
    
34.6
%
$
40,267
    
32.1
%
Maintenance of ways and structures
   
12,379
   
8.1
%
  
12,340
   
9.8
%
Maintenance of equipment
   
17,929
   
11.8
%
  
17,701
   
14.1
%
Diesel fuel sold to third parties
    
10,379
   
6.8
%
  
5,750
   
4.6
%
General and administrative
   
22,505
   
14.7
%
  
20,514
   
16.4
%
Net gain on sale of assets
    
(2,481
)
  
-1.6
%
  
(432
)
  
-0.3
%
Depreciation and amortization
   
9,453
   
6.2
%
  
7,840
   
6.3
%
                           
Total operating expenses
  
$
123,040
    
80.6
%
$
103,980
    
83.0
%
 
8
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)

   
Six Months Ended
  
   
June 30,
  
   
2008
  
2007
  
       
% of
 
  
 
% of
  
   
Amount
 
Revenue
  
Amount
  
Revenue
  
Revenues:
                  
Freight
  
$
179,147
    
61.1
%
$
163,874
    
65.4
%
Non-freight
   
114,249
   
38.9
%
  
86,527
   
34.6
%
                           
Total revenues
  
$
293,396
    
100.0
%
$
250,401
    
100.0
%
                           
Operating Expense Comparison:
                          
Natural Classification
                          
Labor and benefits
 
$
92,411
    
31.5
%
$
82,147
    
32.8
%
Equipment rents
   
17,143
   
5.8
%
  
18,976
   
7.6
%
Purchased services
   
23,627
   
8.0
%
  
19,146
   
7.6
%
Depreciation and amortization
   
18,652
   
6.4
%
  
15,546
   
6.2
%
Diesel fuel used in operations
    
33,363
   
11.4
%
  
21,102
   
8.4
%
Diesel fuel sold to third parties
    
18,946
   
6.5
%
  
11,071
   
4.4
%
Casualties and insurance
   
8,038
   
2.7
%
  
7,896
   
3.2
%
Materials
   
12,597
   
4.3
%
  
11,434
   
4.6
%
Net gain on sale of assets
    
(3,031
)
  
-1.0
%
  
(463
)
  
-0.2
%
Other expenses
   
20,669
   
7.0
%
  
18,846
   
7.5
%
                           
Total operating expenses
  
$
242,415
    
82.6
%
$
205,701
    
82.1
%
                           
Functional Classification
                          
Transportation
 
$
100,732
    
34.3
%
$
79,752
    
31.8
%
Maintenance of ways and structures
   
24,531
   
8.4
%
  
23,047
   
9.2
%
Maintenance of equipment
   
35,870
   
12.2
%
  
35,196
   
14.1
%
Diesel fuel sold to third parties
    
18,946
   
6.5
%
  
11,071
   
4.4
%
General and administrative
   
46,715
   
15.8
%
  
41,552
   
16.6
%
Net gain on sale of assets
    
(3,031
)
  
-1.0
%
  
(463
)
  
-0.2
%
Depreciation and amortization
   
18,652
   
6.4
%
  
15,546
   
6.2
%
                           
Total operating expenses
  
$
242,415
    
82.6
%
$
205,701
    
82.1
%
 
9
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE FREIGHT REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)

   
Three Months Ended
  
Three Months Ended
  
   
June 30, 2008
  
June 30, 2007
  
           
Average Freight
 
 
      
Average Freight
  
   
Freight
 
  
 
Revenues
  
Freight
      
Revenues
  
Commodity Group
  
Revenues
  
Carloads
  
Per Carload
  
Revenues
  
Carloads
 
Per Carload
  
                           
Pulp & Paper
  
$
18,798
    
30,994
 
$
607
  
$
17,032
    
30,900
 
$
551
  
Coal, Coke & Ores
    
15,488
   
41,474
   
373
   
12,889
   
42,453
   
304
 
Minerals & Stone
    
11,743
   
37,041
   
317
   
8,074
   
32,399
   
249
 
Metals
    
10,675
   
21,154
   
505
   
9,812
   
21,376
   
459
 
Farm & Food Products
    
10,157
   
18,436
   
551
   
7,742
   
14,461
   
535
 
Lumber & Forest Products
    
8,667
   
19,503
   
444
   
9,848
   
23,103
   
426
 
Chemicals-Plastics
    
8,049
   
12,147
   
663
   
6,679
   
11,027
   
606
 
Petroleum Products
    
4,241
   
6,336
   
669
   
3,752
   
6,242
   
601
 
Autos & Auto Parts
    
2,148
   
3,433
   
626
   
2,083
   
4,052
   
514
 
Intermodal
    
145
   
362
   
401
   
279
   
563
   
496
 
Other
    
1,308
   
5,676
   
230
   
1,930
   
9,501
   
203
 
                                       
Totals
  
$
91,419
    
196,556
   
465
 
$
80,120
    
196,077
   
409
 
 
10
 
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE FREIGHT REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)

   
Six Months Ended
  
Six Months Ended
  
   
June 30, 2008
  
June 30, 2007
  
           
Average Freight
          
Average Freight
  
   
Freight
      
Revenues
 
Freight
      
Revenues
  
Commodity Group
  
Revenues
  
Carloads
 
Per Carload
  
Revenues
 
Carloads
 
Per Carload
  
                           
Pulp & Paper
  
$
36,811
    
60,920
 
$
604
  
$
34,505
    
62,892
 
$
549
  
Coal, Coke & Ores
    
32,234
   
86,954
   
371
   
28,752
   
91,543
   
314
 
Farm & Food Products
    
21,044
   
36,368
   
579
   
17,494
   
36,129
   
484
 
Minerals & Stone
    
20,957
   
68,694
   
305
   
14,843
   
59,679
   
249
 
Metals
    
20,194
   
40,281
   
501
   
18,735
   
41,061
   
456
 
Lumber & Forest Products
    
16,638
   
37,640
   
442
   
18,553
   
43,835
   
423
 
Chemicals-Plastics
    
15,471
   
23,524
   
658
   
13,151
   
22,281
   
590
 
Petroleum Products
    
9,248
   
13,787
   
671
   
8,293
   
13,671
   
607
 
Autos & Auto Parts
    
3,903
   
6,778
   
576
   
3,765
   
7,562
   
498
 
Intermodal
    
269
   
621
   
433
   
560
   
1,100
   
509
 
Other
    
2,378
   
10,416
   
228
   
5,223
   
24,797
   
211
 
                                       
Totals
  
$
179,147
    
385,983
   
464
 
$
163,874
    
404,550
   
405
 
 
11
 
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/Used in Operating Activities from Continuing Operations less Net Cash Used in Investing Activities from Continuing Operations, excluding the Cost of Acquisitions. Free Cash Flow from Discontinued Operations is defined as Net Cash Used in Operating Activities from Discontinued Operations less Net Cash Used in Investing Activities from 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/Used in Operating Activities from Continuing Operations to GWI's Free Cash Flow ($ in millions):
 
     
Six Months Ended
  
     
June 30,
  
     
2008
    
2007
  
Net cash provided by (used in) operating activities from continuing operations
  
$
35.3
  
$
(42.0
)
Net cash used in investing activities from continuing operations
    
(116.7
)
  
(18.0
)
Cash paid for acquisitions, net of cash acquired
    
97.6
    
-
  
Australia taxes on ARG Sale
    
-
   
95.6
  
Free cash flow
  
$
16.2
  
$
35.6
  
 
12
 
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):
 
     
Six Months Ended
  
     
June 30,
  
     
2008
    
2007
  
Net cash used in operating activities from discontinued operations
  
$
(1.2
)
$
(4.5
)
Net cash used in investing activities from discontinued operations
    
-
    
(0.5
)
Free cash flow from discontinued operations
  
$
(1.2
)
$
(5.0
)

13