8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of Earliest Event Reported): July 30, 2009

Genesee & Wyoming Inc.

 (Exact name of registrant as specified in its charter)

Delaware	001-31456	06-0984624
(State or other jurisdiction of incorporation)	(Commission  File Number)	(I.R.S. Employer Identification No.)

66 Field Point Road, Greenwich, Connecticut	06830
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (203) 629-3722

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. Results of Operations and Financial Condition

On July 30, 2009, Genesee & Wyoming Inc. (GWI) issued a press release reporting financial results for the second quarter of 2009. A copy of the press release is attached hereto as Exhibit 99.1. The attached Exhibit 99.1 is furnished in its entirety pursuant to this Item 2.02 and is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibit.

99.1 Press release, dated July 30, 2009, announcing results for the second quarter of 2009

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GENESEE & WYOMING INC.
July 30, 2009	By:	/s/ Timothy J. Gallagher
		Name:  Timothy J. Gallagher
		Title: Chief Financial Officer

EX-99.1

Genesee & Wyoming Reports Results for the Second Quarter of 2009

GREENWICH, Conn., July 30, 2009/PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the second quarter of 2009 of $7.4 million, compared with net income of $15.4 million in the second quarter of 2008.   GWI's diluted earnings per share (EPS) in the second quarter of 2009 were $0.20 with 36.9 million weighted average shares outstanding, compared with diluted EPS of $0.42 with 36.4 million weighted average shares outstanding in the second quarter of 2008.

GWI’s income from continuing operations in the second quarter of 2009 was $8.1 million, or $0.22 per diluted share, compared with income from continuing operations of $16.2 million, or $0.44 per diluted share in the second quarter of 2008.

In June 2009, GWI announced that its subsidiary, Huron Central Railway Inc. (HCRY), intended to discontinue operations in October 2009.  As a result, GWI’s results in the second quarter of 2009 included a non-cash write-down of HCRY’s non-current assets of $6.7 million as well as restructuring and related charges of $2.3 million (net after-tax impact of $5.4 million, or $0.15 per diluted share).

GWI’s results for the second quarter of 2009 included gains on the sale of assets and insurance recovery of $2.3 million ($1.5 million after-tax, or $0.04 per diluted share) and legal expenses of $1.4 million ($0.9 million after-tax or $0.02 per diluted share) associated with the resolution of the arbitration related to the Meridian & Bigbee Railroad LLC (M&B) Haulage Agreement.  GWI’s results for the second quarter of 2008 included gains on the sale of assets and insurance recovery of $2.5 million ($1.6 million after-tax, or $0.04 per diluted share).

The table below summarizes the financial impact of significant operating items in the second quarter of 2009 and 2008 ($ millions, except per share amounts).

	Pre- Tax Amount			After- Tax Amount			EPS Impact
Q2 2009:
- Gains on the sale of assets and insurance recovery	$	2.3		$	1.5		$	0.04
- M&B legal expenses	$	(1.4	)	$	(0.9	)	$	(0.02	)
- HCRY, net impact	$	(9.0	)	$	(5.4	)	$	(0.15	)
Q2 2008:
- Gains on the sale of assets and insurance recovery	$	2.5		$	1.6		$	0.04

GWI’s results in the second quarter of 2009 benefited $0.07 per diluted share from the positive impact of the U.S. short line tax credit, which is in effect through 2009.   Primarily as a result of the short line tax credit and the HCRY-related tax benefit, GWI’s effective income tax rate on its continuing operations decreased from 39.5% in the second quarter of 2008 to 9.7% in the second quarter of 2009.

Continuing Operations

In the second quarter of 2009, GWI's total revenues decreased $22.7 million, or 14.8%, to $130.1 million, compared with $152.7 million in the second quarter of 2008.   Same railroad revenues decreased $37.7 million, or 24.7%, partially offset by revenues of $15.1 million from acquisitions.  The decrease in same railroad revenues included a $6.8 million decrease due to the depreciation of the Australian and Canadian dollars and the Euro versus the U.S. dollar and a $7.8 million decrease due to a decline in third-party fuel sales.  Excluding changes from currency and fuel sales, GWI’s same railroad revenues declined $23.1 million, or 15.1%.

Freight revenues in the second quarter of 2009 decreased by $12.1 million, or 13.3%, to $79.3 million, compared with $91.4 million in the second quarter of 2008.  Same railroad freight revenues decreased $24.8 million, offset by $12.7 million in freight revenues from acquisitions.  Same railroad freight revenues were reduced by $3.3 million due to the depreciation of the Australian and Canadian dollars.  Excluding changes from currency, GWI’s same railroad freight revenues decreased by $21.4 million, or 23.4%.

GWI’s traffic in the second quarter of 2009 decreased 8,367 carloads, or 4.3%, compared with the second quarter of 2008.  Same railroad traffic decreased by 39,272 carloads, or 20.0%.  The same railroad decrease was principally due to declines of 10,156 carloads of pulp and paper traffic, 8,625 carloads of metals traffic and 7,556 carloads of coal, coke and ores traffic. All other same railroad traffic decreased by a net 12,935 carloads.

Average freight revenues per carload declined 9.4% in the second quarter of 2009.  Same railroad average revenues per carload declined 8.9%.  Same railroad average revenues per carload were negatively impacted by three factors: lower fuel surcharges, the depreciation of the Canadian and Australian dollars and changes in commodity mix, which reduced average revenues per carload by 6.0%, 3.5% and 1.3%, respectively.  Excluding these three factors, same railroad average revenues per carload increased 1.9%.  In the United States and Canada, excluding currency effects, changes in commodity mix and changes in fuel surcharges, same railroad average revenues per carload increased 3.9%.

GWI’s non-freight revenues in the second quarter of 2009 decreased $10.5 million, or 17.2%, compared with the second quarter of 2008.   Same railroad non-freight revenues decreased $13.0 million, or 21.1%, partially offset by $2.4 million in non-freight revenues from acquisitions.  The decrease in same railroad non-freight revenues was composed of $3.5 million due to the depreciation of the Australian and Canadian dollars and the Euro versus the U.S. dollar and $7.8 million due to a decline in third-party fuel sales.  Excluding changes from currency and fuel sales, GWI’s same railroad non-freight revenues decreased $1.7 million, or 2.8%.

 GWI's operating income in the second quarter of 2009 decreased $15.0 million to $14.6 million, compared with $29.7 million in the second quarter of 2008.  The operating ratio was 88.7% in the second quarter of 2009, compared with an operating ratio of 80.6% in the second quarter of 2008.  In the second quarter of 2009, operating income was reduced by $9.0 million due to the write-down of HCRY and related effects and $1.4 million due to legal expenses related to the M&B arbitration, partially offset by $2.3 million in gains on the sale of assets and insurance recovery.  Operating income in the second quarter of 2008 included $2.5 million in gains on the sale of assets and insurance recovery.  Excluding these items, GWI’s operating ratio was 82.5% in the second quarter of 2009, compared with an operating ratio of 82.2% in the second quarter of 2008. (1)

Comments from the Chief Executive Officer

John C. Hellmann, President and CEO of GWI, commented, “Our financial results for the second quarter were consistent with the revised guidance that we provided in early June.  Our revenues in the second quarter of 2009 proved to be 6% weaker than the first quarter of 2009, and we consequently implemented additional cost reductions.  We now have 13% of our locomotive fleet parked and 10% of our employees furloughed.  These and other cost cutting initiatives have enabled us to maintain a core operating ratio in line with last year.”

“In the second quarter, the severe contraction of North American industrial production reduced shipments of economically sensitive commodities such as steel, paper and lumber by 41%, 33% and 23%, respectively, on a same railroad basis.  The pending closure of the Huron Central Railway, which principally hauls steel, resulted in a significant one-time charge in the second quarter; however, the long term financial impact is expected to be accretive to both earnings and cash flow starting in the fourth quarter of 2009.”

“Supported by the proceeds from our recent equity offering, we continue to evaluate acquisition and investment opportunities in both North America and Australia.  With funds available to make opportunistic investments and our increasingly efficient core operations, we believe that we are well positioned to benefit from any improvement in economic conditions.”

Free Cash Flow from Continuing Operations (2)

($ in millions)	Six Months Ended
	June 30,
	2009			2008
Net cash provided by operating activities	$	44.1		$	37.6
Net cash used in investing activities		(26.1	)		(116.7	)
Net cash paid for acquisitions (a)		5.8			97.6
Free cash flow (2)	$	23.8		$	18.5

(a)  The 2009 period includes: 1) $4.8 million in net cash paid for final working capital adjustments related to the acquisition of the Ohio Central Railroad System (OCR) and 2) $1.0 million (or €0.8 million) in net cash paid in contingent consideration related to the Rotterdam Rail Feeding B.V. (RRF) acquisition.The 2008 period 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 RRF and $3.6 million for final working capital adjustments related to the December 2007 acquisition of Maryland Midland Railway, Inc. (MMID).

GWI’s continuing operations generated free cash flow of $23.8 million and $18.5 million for the six months ended June 30, 2009 and 2008, respectively.  For the six months ended June 30, 2009, changes in working capital reduced net cash flow from operating activities by $6.4 million.  For the six months ended June 30, 2008, changes in working capital reduced net cash flow from operating activities by $14.7 million.

Net cash used in investing activities for the six months ended June 30, 2009, included $37.7 million in purchases of property and equipment, partially offset by $8.9 million in cash received from government grants, $5.6 million from sales of assets and $2.9 million from insurance proceeds.  Net cash used in investing activities for 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, $4.6 million from sales of assets and $0.4 million from insurance proceeds.

Conference Call and Webcast Details

As previously announced, GWI’s conference call to discuss financial results for the second quarter will be held today at 10:00 a.m. (Eastern Time).  The dial-in number for the teleconference is (800) 762-4758; outside U.S., call (480) 629-9035, 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 2009 Earnings Audio Webcast.” Management will be referring to a slide presentation that will also be available under the “Investors” tab of GWI’s website prior to the conference call. An audio replay of the conference call will be accessible via the “Investors” tab of GWI's website starting at 1:00 p.m. today.   The webcast audio replay will be available until GWI’s next quarterly earnings release.  Telephone replay is available for 30 days beginning at 12 p.m. EDT today by dialing (800) 475-6701 (or outside U.S., dial 320-365-3844). The access code is 974250.

About Genesee & Wyoming Inc.

GWI owns and operates short line and regional freight railroads in the United States, Canada, Australia and the Netherlands and owns a minority interest in a railroad in Bolivia. Operations currently include 63 railroads organized in nine regions, with more than 6,800 miles of owned and leased track and approximately 3,100 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.

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)The operating ratios that exclude the items described above are non-GAAP financial measures and are not intended to replace the operating ratios calculated using total operating expenses and total revenues, calculated on a basis consistent with GAAP. The information required by Regulation G under the Securities Exchange Act of 1934, including reconciliation to the operating ratios calculated using amounts determined in accordance with GAAP, is included in the tables attached to this press release.

(2)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 SIX MONTHS ENDED JUNE 30, 2009 AND 2008

(In thousands, except per share amounts)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
OPERATING REVENUES	$	130,055		$	152,715		$	268,513		$	293,396
OPERATING EXPENSES		115,415			123,040			227,773			242,415
INCOME FROM OPERATIONS		14,640			29,675			40,740			50,981
INTEREST INCOME		243			571			425			1,156
INTEREST EXPENSE		(7,094	)		(4,044	)		(14,274	)		(7,953	)
OTHER INCOME, NET		1,202			561			1,244			659
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		8,991			26,763			28,135			44,843
PROVISION FOR INCOME TAXES		873			10,577			6,036			17,396
INCOME FROM CONTINUING OPERATIONS		8,118			16,186			22,099			27,447
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX		(636	)		(735	)		(669	)		(1,574	)
NET INCOME		7,482			15,451			21,430			25,873
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(67	)		(60	)		(68	)		(85	)
NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC.	$	7,415		$	15,391		$	21,362		$	25,788
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO  GENESEE & WYOMING INC. COMMON STOCKHOLDERS:
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS	$	0.24		$	0.51		$	0.65		$	0.87
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS		(0.02	)		(0.02	)		(0.02	)		(0.05	)
BASIC EARNINGS PER COMMON SHARE	$	0.22		$	0.48		$	0.63		$	0.82
WEIGHTED AVERAGE SHARES - BASIC		34,053			31,755			33,762			31,626
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO  GENESEE & WYOMING INC. COMMON STOCKHOLDERS:
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS	$	0.22		$	0.44		$	0.60		$	0.76
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS		(0.02	)		(0.02	)		(0.02	)		(0.04	)
DILUTED EARNINGS PER COMMON SHARE	$	0.20		$	0.42		$	0.58		$	0.71
WEIGHTED AVERAGE SHARES - DILUTED		36,907			36,378			36,641			36,197

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2009 AND DECEMBER 31, 2008

(In thousands)

(unaudited)

	June 30,		December 31,
ASSETS	2009		2008
CURRENT ASSETS:
Cash and cash equivalents	$	62,417	$	31,693
Accounts receivable, net		105,974		120,874
Materials and supplies		7,949		7,708
Prepaid expenses and other		10,582		12,270
Current assets of discontinued operations		1,249		1,676
Deferred income tax assets, net		18,106		18,101
Total current assets		206,277		192,322
PROPERTY AND EQUIPMENT, net		994,339		998,995
INVESTMENT IN UNCONSOLIDATED AFFILIATES		5,104		4,986
GOODWILL		161,347		150,958
INTANGIBLE ASSETS, net		228,118		223,442
DEFERRED INCOME TAX ASSETS, net		3,118		-
OTHER ASSETS, net		16,286		16,578
Total assets	$	1,614,589	$	1,587,281
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	27,154	$	26,034
Accounts payable		101,137		124,162
Accrued expenses		36,084		37,903
Current liabilities of discontinued operations		1,021		1,121
Deferred income tax liabilities, net		-		192
Total current liabilities		165,396		189,412
LONG-TERM DEBT, less current portion		433,057		535,231
DEFERRED INCOME TAX LIABILITIES, net		238,450		234,979
DEFERRED ITEMS - grants from outside parties		122,354		113,302
OTHER LONG-TERM LIABILITIES		22,497		34,943
TOTAL EQUITY		632,835		479,414
Total liabilities and equity	$	1,614,589	$	1,587,281

GENESEE & WYOMING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008

(In thousands)

(unaudited)

	Six Months Ended June 30,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	21,430		$	25,873
Adjustments to reconcile net income to net cash provided
by operating activities:
Loss from discontinued operations, net of tax		669			1,574
Depreciation and amortization		23,423			18,652
Compensation cost related to equity awards		2,826			2,598
Excess tax benefits from share-based compensation		(1,114	)		(1,598	)
Deferred income taxes		(872	)		8,268
Net loss/(gain) on sale and impairment of assets		4,650			(2,632	)
Gain on insurance recovery		(500	)		(399	)
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions:
Accounts receivable, net		10,178			(10,276	)
Materials and supplies		231			(678	)
Prepaid expenses and other		1,807			849
Accounts payable and accrued expenses		(18,232	)		(9,297	)
Other assets and liabilities, net		(391	)		4,698
Net cash provided by operating activities from continuing operations		44,105			37,632
Net cash used in operating activities from discontinued operations		(28	)		(1,166	)
Net cash provided by operating activities		44,077			36,466
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(37,670	)		(40,891	)
Grant proceeds from outside parties		8,895			16,786
Cash paid for acquisitions, net		(5,780	)		(97,616	)
Insurance proceeds for the replacement of assets		2,900			419
Proceeds from disposition of property and equipment		5,551			4,597
Net cash used in investing activities from continuing operations		(26,104	)		(116,705	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings, including capital leases		(200,450	)		(70,505	)
Proceeds from issuance of long-term debt		98,000			135,000
Net proceeds from employee stock purchases		4,437			8,057
Treasury stock purchases		(434	)		(2,355	)
Stock issuance proceeds, net of stock issuance costs		107,027			-
Excess tax benefits from share-based compensation		1,114			1,598
Net cash provided by financing activities from continuing operations		9,694			71,795
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		3,360			1,947
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS		(303	)		(6	)
DECREASE IN CASH AND CASH EQUIVALENTS		30,724			(6,503	)
CASH AND CASH EQUIVALENTS, beginning of period		31,693			46,684
CASH AND CASH EQUIVALENTS, end of period	$	62,417		$	40,181

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
	Three Months Ended
	June 30,
	2009						2008
				% of						% of
	Amount			Revenue			Amount			Revenue
Revenues:
Freight	$	79,296			61.0	%	$	91,419			59.9	%
Non-freight		50,759			39.0	%		61,296			40.1	%
Total revenues	$	130,055			100.0	%	$	152,715			100.0	%
Operating Expense Comparison:
Natural Classification
Labor and benefits	$	47,968			36.9	%	$	46,294			30.3	%
Equipment rents		6,903			5.3	%		8,760			5.7	%
Purchased services		10,006			7.7	%		12,790			8.4	%
Depreciation and amortization		11,917			9.2	%		9,453			6.2	%
Diesel fuel used in operations		7,351			5.6	%		17,578			11.5	%
Diesel fuel sold to third parties		3,104			2.4	%		10,379			6.8	%
Casualties and insurance		2,880			2.2	%		3,804			2.5	%
Materials		5,748			4.4	%		6,492			4.3	%
Net loss (gain) on sale and impairment of assets		4,889			3.8	%		(2,082	)		(1.4	%)
Gain on insurance recovery		(500	)		(0.4	%)		(399	)		(0.2	%)
Restructuring charges		2,288			1.8	%		-			0.0	%
Other expenses		12,861			9.8	%		9,971			6.5	%
Total operating expenses	$	115,415			88.7	%	$	123,040			80.6	%
Functional Classification
Transportation		39,942			30.7	%	$	52,876			34.6	%
Maintenance of ways and structures		13,336			10.2	%		13,195			8.6	%
Maintenance of equipment		16,395			12.6	%		17,929			11.8	%
Diesel fuel sold to third parties		3,104			2.4	%		10,379			6.8	%
General and administrative		24,044			18.4	%		21,689			14.2	%
Net loss (gain) on sale and impairment of assets		4,889			3.8	%		(2,082	)		(1.4	%)
Gain on insurance recovery		(500	)		(0.4	%)		(399	)		(0.2	%)
Restructuring charges		2,288			1.8	%		-			0.0	%
Depreciation and amortization		11,917			9.2	%		9,453			6.2	%
Total operating expenses	$	115,415			88.7	%	$	123,040			80.6	%

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
	Six Months Ended
	June 30,
	2009						2008
				% of						% of
	Amount			Revenue			Amount			Revenue
Revenues:
Freight	$	168,462			62.7	%	$	179,147			61.1	%
Non-freight		100,051			37.3	%		114,249			38.9	%
Total revenues	$	268,513			100.0	%	$	293,396			100.0	%
Operating Expense Comparison:
Natural Classification
Labor and benefits	$	97,932			36.5	%	$	92,411			31.5	%
Equipment rents		14,793			5.5	%		17,143			5.8	%
Purchased services		19,317			7.2	%		23,627			8.0	%
Depreciation and amortization		23,423			8.7	%		18,652			6.4	%
Diesel fuel used in operations		16,344			6.1	%		33,363			11.4	%
Diesel fuel sold to third parties		6,493			2.4	%		18,946			6.5	%
Casualties and insurance		6,464			2.4	%		8,038			2.7	%
Materials		11,351			4.2	%		12,597			4.3	%
Net loss (gain) on sale and impairment of assets		4,650			1.7	%		(2,632	)		(0.9	%)
Gain on insurance recovery		(500	)		(0.2	%)		(399	)		(0.1	%)
Restructuring charges		2,288			0.9	%		-			0.0	%
Other expenses		25,218			9.4	%		20,669			7.0	%
Total operating expenses	$	227,773			84.8	%	$	242,415			82.6	%
Functional Classification
Transportation	$	83,071			30.9	%	$	100,732			34.3	%
Maintenance of ways and structures		26,769			10.0	%		26,163			8.9	%
Maintenance of equipment		33,503			12.5	%		35,870			12.2	%
Diesel fuel sold to third parties		6,493			2.4	%		18,946			6.5	%
General and administrative		48,076			17.9	%		45,083			15.3	%
Net loss (gain) on sale and impairment of assets		4,650			1.7	%		(2,632	)		(0.9	%)
Gain on insurance recovery		(500	)		(0.2	%)		(399	)		(0.1	%)
Restructuring charges		2,288			0.9	%		-			0.0	%
Depreciation and amortization		23,423			8.7	%		18,652			6.4	%
Total operating expenses	$	227,773			84.8	%	$	242,415			82.6	%

GENESEE & WYOMING INC. AND SUBSIDIARIES

RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD

COMPARISON BY COMMODITY GROUP

(dollars in thousands, except average revenues per carload)

(unaudited)

	Three Months Ended						Three Months Ended
	June 30, 2009						June 30, 2008
	Freight				Average Revenues		Freight				Average Revenues
Commodity Group	Revenues		Carloads		Per Carload		Revenues		Carloads		Per Carload
Coal, Coke & Ores	$	15,729		42,606	$	369	$	15,488		41,474	$	373
Pulp & Paper		12,147		21,877		555		18,798		30,994		607
Minerals & Stone		10,172		35,321		288		11,743		37,041		317
Farm & Food Products		9,224		22,316		413		10,157		18,436		551
Chemicals-Plastics		7,879		12,230		644		8,049		12,147		663
Metals		7,745		15,500		500		10,675		21,154		505
Lumber & Forest Products		6,910		15,199		455		8,667		19,503		444
Petroleum Products		4,599		6,911		665		4,241		6,336		669
Autos & Auto Parts		1,188		2,055		578		2,148		3,433		626
Other		3,703		14,174		261		1,453		6,038		241
Totals	$	79,296		188,189		421	$	91,419		196,556		465

GENESEE & WYOMING INC. AND SUBSIDIARIES

RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD

COMPARISON BY COMMODITY GROUP

(dollars in thousands, except average revenues per carload)

(unaudited)

	Six Months Ended						Six Months Ended
	June 30, 2009						June 30, 2008
	Freight				Average Revenues		Freight				Average Revenues
Commodity Group	Revenues		Carloads		Per Carload		Revenues		Carloads		Per Carload
Coal, Coke & Ores	$	36,846		100,552	$	366	$	32,234		86,954	$	371
Pulp & Paper		25,547		45,963		556		36,811		60,920		604
Farm & Food Products		20,028		48,708		411		21,044		36,368		579
Minerals & Stone		18,679		66,571		281		20,957		68,694		305
Metals		17,213		34,838		494		20,194		40,281		501
Chemicals-Plastics		16,236		25,038		648		15,471		23,524		658
Lumber & Forest Products		13,526		29,914		452		16,638		37,640		442
Petroleum Products		10,288		14,798		695		9,248		13,787		671
Autos & Auto Parts		2,292		3,763		609		3,903		6,778		576
Other		7,808		32,483		240		2,647		11,037		240
Totals	$	168,463		402,628		418	$	179,147		385,983		464

Reconciliation of non-GAAP Financial Measures

This earnings release contains adjusted operating ratios and free cash flow, which are "non-GAAP financial measures" as this term is defined in Regulation G of the Securities Exchange Act of 1934.  In accordance with Regulation G, GWI has reconciled these non-GAAP financial measures to its most directly comparable U.S. GAAP measure.

Adjusted Operating Ratios Description and Discussion

Management views its Operating Ratio, calculated as total Operating Expenses divided by total Revenues, as an important measure of GWI’s operating performance.  Because management believes this is useful for investors in assessing GWI’s financial results compared with the same period in the prior year, the Adjusted Operating Ratios for the three months ended June 30, 2009 and 2008, are presented excluding the Huron Central Railway Inc. (HCRY) impairment and restructuring and related charges, legal expenses associated with the resolution of the arbitration associated with the Meridian & Bigbee Railroad LLC (M&B) Haulage Agreement and net gain on sale of assets and insurance recovery.  The Adjusted Operating Ratios presented excluding these effects are not intended to represent, and should not be considered more meaningful than, or as an alternative to, the Operating Ratios calculated using amounts in accordance with GAAP.

The following table sets forth a reconciliation of GWI’s Operating Ratios calculated using amounts determined in accordance with GAAP to the Adjusted Operating Ratios described above for the three months ended June 30, 2009 and 2008 ($ in millions):

2009	Total Revenues		Total Operating Expenses			Operating Income			Operating Ratio
As Reported	$	130.1	$	115.4		$	14.6			88.7	%
HCRY impairment and   restructuring and   related charges		-		(9.0	)		9.0
M&B legal expenses		-		(1.4	)		1.4
Net gain on sale of assets		-		1.8			(1.8	)
Gain on insurance recovery		-		0.5			(0.5	)
Adjusted	$	130.1	$	107.3		$	22.7			82.5	%
2008	Total Revenues		Total Operating Expenses			Operating Income			Operating Ratio
As Reported	$	152.7	$	123.0		$	29.7			80.6	%
Net gain on sale of assets		-		2.1			(2.1	)
Gain on insurance recovery		-		0.4			(0.4	)
Adjusted	$	152.7	$	125.5		$	27.2			82.2	%

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 from Continuing Operations less Net Cash Used in Investing Activities from Continuing Operations, excluding the cost of acquisitions.  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 from Continuing Operations to GWI's Free Cash Flow ($ in millions):

	Six Months Ended
	June 30,
	2009				2008
Net cash provided by operating activities from continuing operations		$	44.1			$	37.6
Net cash used in investing activities from continuing operations			(26.1	)			(116.7	)
Cash paid for acquisitions, net of cash acquired			5.8				97.6
Free cash flow		$	23.8			$	18.5