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): April
28, 2011
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:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ 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 April 28, 2011, Genesee & Wyoming Inc. (GWI) issued a press release reporting financial results for the first quarter of 2011. 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 into this Item 2.02 by reference.
ITEM 8.01. Other Events
On April 28, 2011, GWI announced that its subsidiary, Genesee & Wyoming Australia (GWA) signed a rail haulage agreement with a subsidiary of WPG Resources Ltd (WPG) (ASX:WPG) to transport 3.3 million tons per year of hematite iron ore from WPG’s Peculiar Knob mine in South Australia. To provide the above-rail haulage service, GWA has entered into a locomotive purchase agreement to acquire nine new, 4,400-horsepower locomotives and will make certain other rolling stock and facilities investments for a total of approximately A$67 million (US$72 million). A copy of the press release is filed as Exhibit 99.2 hereto and is incorporated into this Item 8.01 by reference.
ITEM 9.01. Financial Statements and Exhibits
(d) Exhibit.
99.1 Press release, dated April 28, 2011, announcing results for the first quarter of 2011.
99.2 Press release, dated April 28, 2011, announcing “Genesee & Wyoming Signs New Contract for Export Iron Ore in South Australia; Signs Related Agreement to Invest US$72 million in Locomotives and Equipment”.
Forward-Looking Statements
Certain statements in this report regarding GWI’s business which are not historical facts are forward-looking statements within the meaning of the federal securities laws and are based upon GWI’s current beliefs or expectations as to the outcome of future events. Forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies and third-party approvals, many of which are beyond our control and could cause actual results to differ materially from GWI’s current expectations. Words such as “plans,” “expects,” variations of these words and similar expressions are intended to identify these forward-looking statements. For a more detailed discussion of such risks and uncertainties, which could cause actual results to differ from those contained in these forward-looking statements, GWI refers you to “Risk Factors” in GWI’s Annual Report on Form 10-K for the most recently ended fiscal year. Although GWI believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual results could differ materially from those set forth in the forward-looking statements. GWI cautions investors and potential investors not to place undue reliance on such statements and disclaims any intention to update the current expectations or forward-looking statements contained in this filing.
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. |
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April 28, 2011 |
By: |
/s/ Timothy J. Gallagher |
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Name: |
Timothy J. Gallagher |
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Title: |
Chief Financial Officer |
Exhibit 99.1
Genesee & Wyoming Reports Results for the First Quarter of 2011
GREENWICH, Conn.--(BUSINESS WIRE)--April 28, 2011--Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the first quarter of 2011 of $22.1 million, compared with net income of $16.0 million in the first quarter of 2010. GWI's diluted earnings per share (EPS) increased 33% from $0.39 with 41.4 million weighted average shares outstanding in the first quarter of 2010 to $0.52 with 42.5 million weighted average shares outstanding in the first quarter of 2011.
GWI's effective income tax rate in the first quarter of 2011 was 27.7%, compared with 37.6% in the first quarter of 2010, primarily due to the extension of the short line tax credit in the fourth quarter of 2010.
Comments from the Chief Executive Officer
Jack Hellmann, President and CEO of GWI, commented, “In the first quarter of 2011, GWI’s revenue increased 32% as we successfully integrated the FreightLink acquisition in Australia and our same railroad traffic continued to improve, particularly in the month of March. Although our operating income increased 30% in the first quarter, it was lower than expected for three reasons. First, in late February our Australian operations experienced track wash-outs due to heavy rains from Cyclone Carlos that resulted in service cancellations for nearly 10 days. Second, our Canadian operations were adversely affected by severe winter weather and lower shipments of winter grain through a connecting Class I carrier. Third, the sharp increase in the price of diesel fuel was not fully mitigated by fuel surcharges given the average 4-month lag in our fuel surcharge programs.”
Mr. Hellmann continued, “As we enter the second quarter of 2011, we generally see our business strengthening in all of our regions. In addition, I am pleased to report that our business development efforts in 2011 have thus far yielded three significant new projects. In Australia, we have signed a major new agreement to ship export iron ore from a new mine that we expect will commence operations in the second quarter of 2012 and generate approximately A$50 million of annual revenue when it is fully operational. In Canada, we have signed a rail service contract with a new iron ore mine in Labrador that is nearby our existing operations and should start shipments in the second quarter of 2011. In Europe, where we currently operate in the Port of Rotterdam, we are expanding our service to the Port of Antwerp, with our first Belgian shipments expected to start in the second quarter of 2011. In addition to these projects, we remain actively engaged with several other investment opportunities related to the natural resources sector in both North America and Australia.”
Results from Continuing Operations
In the first quarter of 2011, GWI's operating revenues increased $46.3 million, or 31.8%, to $191.9 million, compared with $145.6 million in the first quarter of 2010. Excluding $30.0 million in revenues from GWA (North) Pty Ltd (GWA North), GWI’s subsidiary that acquired certain assets of FreightLink, same railroad operating revenues increased $22.8 million, or 15.6%. $6.4 million of non-freight revenues for services provided to GWA North by Genesee & Wyoming Australia Pty Ltd (GWA) were eliminated in our consolidated results in the three months ended March 31, 2011. During the first quarter of 2011, the appreciation of the Australian and Canadian dollars versus the U.S. dollar, partially offset by the depreciation of the Euro versus the U.S. dollar, increased same railroad operating revenues by $3.4 million. Excluding the impact from foreign currency, GWI’s same railroad operating revenues increased $19.3 million, or 13.3%.
Same railroad freight revenues in the first quarter of 2011 increased by $14.3 million, or 16.0%, to $103.9 million, compared with $89.6 million in the first quarter of 2010. Excluding the $1.5 million net impact from foreign currency appreciation, GWI’s same railroad freight revenues increased by $12.8 million, or 14.3%.
GWI's traffic in the first quarter of 2011 was 244,556 carloads, an increase of 41,834 carloads, or 20.6%, compared with the first quarter of 2010. Excluding 17,146 carloads from GWA North, same railroad traffic in the first quarter of 2011 increased 24,688 carloads, or 12.2%. The traffic increase was principally due to increases of 5,987 carloads of farm & food products traffic, 4,282 carloads of metals traffic, 4,003 carloads of pulp and paper traffic and 3,193 carloads of other commodity traffic. All remaining traffic increased by a net 7,223 carloads.
Average same railroad freight revenues per carload increased 3.4% in the first quarter of 2011. The appreciation of the Australian and Canadian dollars versus the U.S. dollar, higher fuel surcharges and changes in commodity mix increased average revenues per carload by 1.7%, 1.6% and 0.8%, respectively. Excluding these factors, same railroad average revenues per carload decreased 0.7%. Average revenues per carload were negatively impacted by changes in the mix of customers within certain commodity groups, primarily due to length of haulage.
GWI’s same railroad non-freight revenues in the first quarter of 2011 increased $8.4 million, or 15.0%, to $64.4 million compared with $56.0 million in the first quarter of 2010. Excluding the $1.9 million net impact from foreign currency appreciation, GWI’s same railroad non-freight revenues increased $6.5 million, or 11.7%, primarily due to higher switching revenues in the U.S., Canada and the Netherlands.
GWI's income from operations in the first quarter of 2011 increased $9.1 million, or 30.2%, from $30.1 million in the first quarter of 2010 to $39.2 million in the first quarter of 2011. The operating ratio (operating expenses divided by operating revenues) was 79.6% in the first quarter of 2011 compared with an operating ratio of 79.3% in the first quarter of 2010.
Free Cash Flow from Continuing Operations (1) | |||||||||||||||
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($ in millions) |
Three Months Ended |
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March 31, |
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2011 |
2010 |
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Net cash provided by operating activities |
$ | 7.3 | $ | 33.6 | |||||||||||
Net cash used in investing activities | (7.6 | ) | (3.3 | ) | |||||||||||
Net cash paid/(received) for acquisitions/divestitures | 0.4 | (0.2 | ) | ||||||||||||
Cash paid for acquisition-related expenses (a) | 13.0 | - | |||||||||||||
Free cash flow (1) | $ | 13.1 | $ | 30.2 | |||||||||||
(a) Reflects expenses accrued as of December 31, 2010, but paid in 2011. |
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GWI’s continuing operations generated free cash flow of $13.1 million and $30.2 million for the three months ended March 31, 2011 and 2010, respectively. For the three months ended March 31, 2011 and 2010, changes in working capital decreased cash flow from operating activities by $34.2 million and $0.1 million, respectively. Other than the payment of $13.0 million in acquisition-related expenses accrued as of December 31, 2010, the cash used in working capital for the first quarter of 2011 resulted from typical working capital fluctuations.
Net cash used in investing activities for the three months ended March 31, 2011, included $15.7 million in purchases of property and equipment, partially offset by $7.5 million in grant proceeds received from outside parties and $1.0 million from sale of assets. Net cash used in investing activities for the three months ended March 31, 2010, included $14.3 million in purchases of property and equipment, partially offset by $10.1 million in cash received from outside parties and $0.8 million from sale of assets.
Conference Call and Webcast Details
As previously announced, GWI's conference call to discuss financial results for the first quarter will be held Thursday, April 28, 2011, at 11 a.m. EDT. Management will be referring to a slide presentation that will also be available at www.gwrr.com/investors prior to the conference call. The dial-in number for the teleconference is (800) 230-1074; outside U.S., call (612) 234-9959, or the call may be accessed live over the Internet (listen only) at www.gwrr.com/investors.
An audio replay of the conference call will be accessible at www.gwrr.com/investors starting at 1 p.m. EDT on April 28, 2011, until the following quarter’s earnings press release. Telephone replay is available for 30 days beginning at 1 p.m. EDT on April 28, 2011, by dialing (800) 475-6701 (or outside U.S., dial 320-365-3844). The access code is 186286.
About Genesee & Wyoming Inc.
GWI owns and operates short line and regional freight railroads in the United States, Canada, Australia, the Netherlands and Belgium. Operations currently include 63 railroads organized in nine regions, with approximately 7,400 miles of owned and leased track and approximately 1,400 additional miles under track access arrangements. We provide rail service at 17 ports in North America and Europe and perform 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 are based on current expectations, estimates and projections about our industry, management's beliefs, and assumptions made by management. Words such as "anticipates," "intends," "plans," "believes," “should,” "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions, including the following risks applicable to all of our operations: risks related to the acquisition and integration of railroads; economic and competitive uncertainties and contingencies and third party approvals; economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we are subject; increased competition in relevant markets; funding needs and financing sources; unpredictability of fuel costs; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others including but not limited to, those noted in our 2010 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors,” many of which are beyond our control. 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 press release or as of the date they were made. 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 Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and 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.
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2011 | 2010 | |||||||||||||||||
OPERATING REVENUES | $ | 191,911 | $ | 145,579 | ||||||||||||||
OPERATING EXPENSES | 152,708 | 115,473 | ||||||||||||||||
INCOME FROM OPERATIONS | 39,203 | 30,106 | ||||||||||||||||
INTEREST INCOME | 775 | 423 | ||||||||||||||||
INTEREST EXPENSE | (9,939 | ) | (5,362 | ) | ||||||||||||||
OTHER INCOME, NET | 568 | 450 | ||||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 30,607 | 25,617 | ||||||||||||||||
PROVISION FOR INCOME TAXES | 8,485 | 9,641 | ||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 22,122 | 15,976 | ||||||||||||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX | - | (16 | ) | |||||||||||||||
NET INCOME | $ | 22,122 | $ | 15,960 | ||||||||||||||
BASIC EARNINGS PER SHARE: | ||||||||||||||||||
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS | $ | 0.56 | $ | 0.41 | ||||||||||||||
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS | - | - | ||||||||||||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.56 | $ | 0.41 | ||||||||||||||
WEIGHTED AVERAGE SHARES - BASIC | 39,484 | 38,569 | ||||||||||||||||
DILUTED EARNINGS PER SHARE: | ||||||||||||||||||
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS | $ | 0.52 | $ | 0.39 | ||||||||||||||
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS | - | - | ||||||||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.52 | $ | 0.39 | ||||||||||||||
WEIGHTED AVERAGE SHARES - DILUTED | 42,545 | 41,418 | ||||||||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
AS OF MARCH 31, 2011 AND DECEMBER 31, 2010 |
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(in thousands) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||
ASSETS | 2011 | 2010 | |||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | 27,044 | $ | 27,417 | |||||||||||||||
Accounts receivable, net | 141,105 | 132,225 | |||||||||||||||||
Materials and supplies | 14,060 | 13,259 | |||||||||||||||||
Prepaid expenses and other | 16,245 | 14,529 | |||||||||||||||||
Deferred income tax assets, net | 21,515 | 21,518 | |||||||||||||||||
Total current assets | 219,969 | 208,948 | |||||||||||||||||
PROPERTY AND EQUIPMENT, net | 1,448,011 | 1,444,177 | |||||||||||||||||
GOODWILL | 162,281 | 160,629 | |||||||||||||||||
INTANGIBLE ASSETS, net | 235,890 | 237,355 | |||||||||||||||||
DEFERRED INCOME TAX ASSETS, net | 2,400 | 2,879 | |||||||||||||||||
OTHER ASSETS, net | 13,474 | 13,572 | |||||||||||||||||
Total assets | $ | 2,082,025 | $ | 2,067,560 | |||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Current portion of long-term debt | $ | 102,770 | $ | 103,690 | |||||||||||||||
Accounts payable | 120,673 | 124,948 | |||||||||||||||||
Accrued expenses | 59,338 | 76,248 | |||||||||||||||||
Total current liabilities | 282,781 | 304,886 | |||||||||||||||||
LONG-TERM DEBT, less current portion | 475,827 | 475,174 | |||||||||||||||||
DEFERRED INCOME TAX LIABILITIES, net | 266,316 | 263,361 | |||||||||||||||||
DEFERRED ITEMS - grants from outside parties | 182,266 | 183,356 | |||||||||||||||||
OTHER LONG-TERM LIABILITIES | 22,344 | 23,543 | |||||||||||||||||
TOTAL STOCKHOLDERS' EQUITY | 852,491 | 817,240 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 2,082,025 | $ | 2,067,560 | |||||||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | |||||||||||||||
March 31, | |||||||||||||||
2011 | 2010 | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income | $ | 22,122 | $ | 15,960 | |||||||||||
Adjustments to reconcile net income to net cash provided | |||||||||||||||
by operating activities: | |||||||||||||||
Loss from discontinued operations, net of tax | - | 16 | |||||||||||||
Depreciation and amortization | 15,861 | 12,448 | |||||||||||||
Compensation cost related to equity awards | 2,148 | 2,074 | |||||||||||||
Excess tax benefits from share-based compensation | (900 | ) | (673 | ) | |||||||||||
Deferred income taxes | 3,311 | 4,357 | |||||||||||||
Net gain on sale of assets | (1,010 | ) | (449 | ) | |||||||||||
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions: | |||||||||||||||
Accounts receivable, net | (13,837 | ) | (5,988 | ) | |||||||||||
Materials and supplies | (656 | ) | 155 | ||||||||||||
Prepaid expenses and other | (1,535 | ) | (1,387 | ) | |||||||||||
Accounts payable and accrued expenses | (20,039 | ) | 6,402 | ||||||||||||
Other assets and liabilities, net | 1,819 | 722 | |||||||||||||
Net cash provided by operating activities from continuing operations | 7,284 | 33,637 | |||||||||||||
Net cash used in operating activities from discontinued operations | (4 | ) | (23 | ) | |||||||||||
Net cash provided by operating activities | 7,280 | 33,614 | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Purchase of property and equipment | (15,725 | ) | (14,328 | ) | |||||||||||
Grant proceeds from outside parties | 7,514 | 10,100 | |||||||||||||
Cash paid for acquisitions, net of cash acquired | (440 | ) | - | ||||||||||||
Proceeds from the sale of investments | - | 208 | |||||||||||||
Proceeds from disposition of property and equipment | 1,031 | 768 | |||||||||||||
Net cash used in investing activities from continuing operations | (7,620 | ) | (3,252 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Principal payments on long-term borrowings, including capital leases | (55,981 | ) | (6,820 | ) | |||||||||||
Proceeds from issuance of long-term debt | 52,967 | - | |||||||||||||
Proceeds from employee stock purchases | 4,006 | 3,096 | |||||||||||||
Treasury stock purchases | (1,029 | ) | (491 | ) | |||||||||||
Excess tax benefits from share-based compensation | 900 | 673 | |||||||||||||
Net cash provided by (used in) financing activities from continuing operations | 863 | (3,542 | ) | ||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (897 | ) | 895 | ||||||||||||
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS | 1 | 26 | |||||||||||||
(DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS | (373 | ) | 27,741 | ||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 27,417 | 105,707 | |||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 27,044 | $ | 133,448 | |||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||
% of | % of | |||||||||||||||||||||||||||
Amount | Revenue | Amount | Revenue | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Freight | $ | 132,805 | 69.2 | % | $ | 89,566 | 61.5 | % | ||||||||||||||||||||
Non-freight | 59,106 | 30.8 | % | 56,013 | 38.5 | % | ||||||||||||||||||||||
Total revenues | $ | 191,911 | 100.0 | % | $ | 145,579 | 100.0 | % | ||||||||||||||||||||
Operating Expense Comparison: | ||||||||||||||||||||||||||||
Natural Classification |
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Labor and benefits | $ | 58,082 | 30.3 | % | $ | 50,188 | 34.4 | % | ||||||||||||||||||||
Equipment rents | 10,567 | 5.5 | % | 7,649 | 5.2 | % | ||||||||||||||||||||||
Purchased services | 17,442 | 9.1 | % | 10,397 | 7.1 | % | ||||||||||||||||||||||
Depreciation and amortization | 15,861 | 8.3 | % | 12,448 | 8.6 | % | ||||||||||||||||||||||
Diesel fuel used in operations | 21,398 | 11.1 | % | 11,037 | 7.6 | % | ||||||||||||||||||||||
Diesel fuel sold to third parties | 4,079 | 2.1 | % | 3,793 | 2.6 | % | ||||||||||||||||||||||
Casualties and insurance | 5,438 | 2.8 | % | 3,904 | 2.7 | % | ||||||||||||||||||||||
Materials | 6,583 | 3.4 | % | 5,477 | 3.8 | % | ||||||||||||||||||||||
Net gain on sale of assets | ( 1,010 | ) | (0.5 | %) | (449 | ) | (0.3 | %) | ||||||||||||||||||||
Other expenses | 14,268 | 7.5 | % | 11,029 | 7.6 | % | ||||||||||||||||||||||
Total operating expenses | $ | 152,708 | 79.6 | % | $ | 115,473 | 79.3 | % | ||||||||||||||||||||
Functional Classification |
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Transportation | $ | 63,406 | 33.0 | % | $ | 44,616 | 30.6 | % | ||||||||||||||||||||
Maintenance of ways and structures | 17,894 | 9.3 | % | 12,829 | 8.8 | % | ||||||||||||||||||||||
Maintenance of equipment | 22,071 | 11.5 | % | 16,904 | 11.6 | % | ||||||||||||||||||||||
Diesel fuel sold to third parties | 4,079 | 2.1 | % | 3,793 | 2.6 | % | ||||||||||||||||||||||
General and administrative | 30,407 | 15.9 | % | 25,332 | 17.4 | % | ||||||||||||||||||||||
Net gain on sale of assets | ( 1,010 | ) | (0.5 | %) | (449 | ) | (0.3 | %) | ||||||||||||||||||||
Depreciation and amortization | 15,861 | 8.3 | % | 12,448 | 8.6 | % | ||||||||||||||||||||||
Total operating expenses | $ | 152,708 | 79.6 | % | $ | 115,473 | 79.3 | % | ||||||||||||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
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North |
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American & |
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European |
Australian |
Total |
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Three Months Ended March 31, 2011 |
Operations |
Operations |
Operations |
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Revenues: | |||||||||||||||||||||||
Freight | $ | 90,729 | $ | 42,076 | $ | 132,805 | |||||||||||||||||
Non-freight (excluding fuel sales) | 41,578 | 13,109 | 54,687 | ||||||||||||||||||||
Fuel sales to third parties | - | 4,419 | 4,419 | ||||||||||||||||||||
Total revenues | 132,307 | 59,604 | 191,911 | ||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Labor and benefits |
|
46,459 | 11,623 | 58,082 | |||||||||||||||||||
Equipment rents | 6,493 | 4,074 | 10,567 | ||||||||||||||||||||
Purchased services | 6,365 | 11,077 | 17,442 | ||||||||||||||||||||
Depreciation and amortization | 11,346 | 4,515 | 15,861 | ||||||||||||||||||||
Diesel fuel used in operations | 14,977 | 6,421 | 21,398 | ||||||||||||||||||||
Diesel fuel sold to third parties | - | 4,079 | 4,079 | ||||||||||||||||||||
Casualties and insurance | 3,323 | 2,115 | 5,438 | ||||||||||||||||||||
Materials | 6,262 | 321 | 6,583 | ||||||||||||||||||||
Net gain on sale of assets | (1,008 | ) | (2 | ) | (1,010 | ) | |||||||||||||||||
Other expenses | 11,155 | 3,113 | 14,268 | ||||||||||||||||||||
Total operating expenses | 105,372 | 47,336 | 152,708 | ||||||||||||||||||||
Income from Operations | $ | 26,935 | $ | 12,268 | $ | 39,203 | |||||||||||||||||
Carloads | 194,230 | 50,326 | 244,556 | ||||||||||||||||||||
Net expenditures for additions to property & equipment | $ | 7,069 | $ | 1,142 | $ | 8,211 | |||||||||||||||||
|
North |
|
|
||||||||||||||||||||
American & |
|
|
|||||||||||||||||||||
European |
Australian |
Total |
|||||||||||||||||||||
Three Months Ended March 31, 2010 |
Operations |
Operations |
Operations |
||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Freight | $ | 80,601 | $ | 8,965 | $ | 89,566 | |||||||||||||||||
Non-freight (excluding fuel sales) | 36,635 | 15,262 | 51,897 | ||||||||||||||||||||
Fuel sales to third parties | - | 4,116 | 4,116 | ||||||||||||||||||||
Total revenues | 117,236 | 28,343 | 145,579 | ||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Labor and benefits | 41,847 | 8,341 | 50,188 | ||||||||||||||||||||
Equipment rents | 6,502 | 1,147 | 7,649 | ||||||||||||||||||||
Purchased services | 5,453 | 4,944 | 10,397 | ||||||||||||||||||||
Depreciation and amortization | 10,915 | 1,533 | 12,448 | ||||||||||||||||||||
Diesel fuel used in operations | 10,088 | 949 | 11,037 | ||||||||||||||||||||
Diesel fuel sold to third parties | - | 3,793 | 3,793 | ||||||||||||||||||||
Casualties and insurance | 3,578 | 326 | 3,904 | ||||||||||||||||||||
Materials | 5,241 | 236 | 5,477 | ||||||||||||||||||||
Net gain on sale of assets | (456 | ) | 7 | (449 | ) | ||||||||||||||||||
Other expenses | 10,057 | 972 | 11,029 | ||||||||||||||||||||
Total operating expenses | 93,225 | 22,248 | 115,473 | ||||||||||||||||||||
Income from Operations | $ | 24,011 | $ | 6,095 | $ |
30,106 |
|||||||||||||||||
Carloads | 175,836 | 26,886 | 202,722 | ||||||||||||||||||||
Net expenditures for additions to property & equipment | $ | 696 | $ | 3,532 | $ | 4,228 | |||||||||||||||||
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 March 31, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
North American & European Operations | Australian Operations | Total Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Commodity Group |
|
|
Average |
|
|
Average |
|
|
Average | |||||||||||||||||||||||||||||||||||||||||||||
Freight |
Revenues Per |
Freight |
Revenues Per |
Freight |
|
Revenues Per |
||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
Carloads |
Carload |
Revenues |
Carloads |
Carload |
Revenues |
Carloads |
Carload | ||||||||||||||||||||||||||||||||||||||||||||||
Coal & Coke | $ | 18,871 | 54,204 | $ | 348 | $ | - | - | $ | - | $ | 18,871 | 54,204 | $ | 348 | |||||||||||||||||||||||||||||||||||||||
Intermodal* | 98 | 846 | 116 | 17,833 | 12,872 | 1,385 | 17,931 | 13,718 | 1,307 | |||||||||||||||||||||||||||||||||||||||||||||
Farm & Food Products | 6,850 | 14,280 | 480 | 9,804 | 16,602 | 591 | 16,654 | 30,882 | 539 | |||||||||||||||||||||||||||||||||||||||||||||
Pulp & Paper | 14,779 | 24,309 | 608 | - | - | - | 14,779 | 24,309 | 608 | |||||||||||||||||||||||||||||||||||||||||||||
Metallic Ores | 1,525 | 2,778 | 549 | 10,665 | 4,191 | 2,545 | 12,190 | 6,969 | 1,749 | |||||||||||||||||||||||||||||||||||||||||||||
Metals | 11,337 | 22,540 | 503 | - | - | - | 11,337 | 22,540 | 503 | |||||||||||||||||||||||||||||||||||||||||||||
Chemicals & Plastics | 10,464 | 14,349 | 729 | - | - | - | 10,464 | 14,349 | 729 | |||||||||||||||||||||||||||||||||||||||||||||
Minerals & Stone | 6,294 | 14,149 | 445 | 3,372 | 16,578 | 203 | 9,666 | 30,727 | 315 | |||||||||||||||||||||||||||||||||||||||||||||
Lumber & Forest Products | 7,389 | 15,575 | 474 | - | - | - | 7,389 | 15,575 | 474 | |||||||||||||||||||||||||||||||||||||||||||||
Petroleum Products | 6,048 | 7,705 | 785 | 402 | 83 | 4,838 | 6,450 | 7,788 | 828 | |||||||||||||||||||||||||||||||||||||||||||||
Autos & Auto Parts | 2,146 | 2,890 | 743 | - | - | - | 2,146 | 2,890 | 743 | |||||||||||||||||||||||||||||||||||||||||||||
Other | 4,928 | 20,605 | 239 | - | - | - | 4,928 | 20,605 | 239 | |||||||||||||||||||||||||||||||||||||||||||||
Totals | $ | 90,729 | 194,230 | $ | 467 | $ | 42,076 | 50,326 | $ | 836 | $ | 132,805 | 244,556 | $ | 543 | |||||||||||||||||||||||||||||||||||||||
* Represents intermodal units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
North American & European Operations | Australian Operations | Total Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Freight | Average Revenues | Freight | Average Revenues | Freight | Average Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||
Commodity Group | Revenues | Carloads | Per Carload | Revenues | Carloads | Per Carload | Revenues | Carloads | Per Carload | |||||||||||||||||||||||||||||||||||||||||||||
Coal & Coke | $ | 19,105 | 52,138 | $ | 366 | $ | - | - | $ | - | $ | 19,105 | 52,138 | $ | 366 | |||||||||||||||||||||||||||||||||||||||
Intermodal* | 50 | 455 | 110 | - | - | - | 50 | 455 | 110 | |||||||||||||||||||||||||||||||||||||||||||||
Farm & Food Products | 6,420 | 13,581 | 473 | 6,087 | 11,314 | 538 | 12,507 | 24,895 | 502 | |||||||||||||||||||||||||||||||||||||||||||||
Pulp & Paper | 12,230 | 20,306 | 602 | - | - | - | 12,230 | 20,306 | 602 | |||||||||||||||||||||||||||||||||||||||||||||
Metallic Ores | 1,122 | 2,492 | 450 | - | - | - | 1,122 | 2,492 | 450 | |||||||||||||||||||||||||||||||||||||||||||||
Metals | 9,133 | 18,258 | 500 | - | - | - | 9,133 | 18,258 | 500 | |||||||||||||||||||||||||||||||||||||||||||||
Chemicals & Plastics | 8,752 | 12,631 | 693 | - | - | - | 8,752 | 12,631 | 693 | |||||||||||||||||||||||||||||||||||||||||||||
Minerals & Stone | 5,987 | 13,775 | 435 | 2,878 | 15,572 | 185 | 8,865 | 29,347 | 302 | |||||||||||||||||||||||||||||||||||||||||||||
Lumber & Forest Products | 6,520 | 14,658 | 445 | - | - | - | 6,520 | 14,658 | 445 | |||||||||||||||||||||||||||||||||||||||||||||
Petroleum Products | 5,374 | 7,451 | 721 | - | - | - | 5,374 | 7,451 | 721 | |||||||||||||||||||||||||||||||||||||||||||||
Autos & Auto Parts | 1,766 | 2,679 | 659 | - | - | - | 1,766 | 2,679 | 659 | |||||||||||||||||||||||||||||||||||||||||||||
Other | 4,142 | 17,412 | 238 | - | - | - | 4,142 | 17,412 | 238 | |||||||||||||||||||||||||||||||||||||||||||||
Totals | $ | 80,601 | 175,836 | $ | 458 | $ | 8,965 | 26,886 | $ | 333 | $ | 89,566 | 202,722 | $ | 442 | |||||||||||||||||||||||||||||||||||||||
* Represents intermodal units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of non-GAAP Financial Measures
This earnings release contains references to 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 measure.
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 cash paid/(received) for acquisitions/divestitures and cash paid for acquisition-related expenses. 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. Free Cash Flow may be different from similarly-titled non-GAAP financial measures used by other companies.
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):
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Net cash provided by operating activities from
continuing operations |
$ | 7.3 | $ | 33.6 | ||||||||||||
Net cash used in investing activities from continuing operations |
(7.6 | ) | (3.3 | ) | ||||||||||||
Net cash paid/(received) for acquisitions/divestitures | 0.4 | (0.2 | ) | |||||||||||||
Cash paid for acquisition-related expenses | 13.0 | - | ||||||||||||||
Free cash flow | $ | 13.1 | $ | 30.2 | ||||||||||||
CONTACT:
GWI Corporate Communications
Michael Williams,
1-203-629-3722
mwilliams@gwrr.com
Exhibit 99.2
Genesee & Wyoming Signs New Contract for Export Iron Ore in South Australia; Signs Related Agreement to Invest US$72 million in Locomotives and Equipment
ADELAIDE, Australia and GREENWICH, Conn.--(BUSINESS WIRE)--April 28, 2011--Genesee & Wyoming Inc. (GWI) (NYSE: GWR) announced today that its subsidiary, Genesee & Wyoming Australia (GWA) has signed a rail haulage agreement with a subsidiary of WPG Resources Ltd (WPG) (ASX:WPG) to transport 3.3 million tons per year of hematite iron ore from WPG’s Peculiar Knob mine in South Australia.
GWA plans to operate unit trains of iron ore from a rail siding near Wirrida, South Australia, located on the recently acquired Tarcoola to Darwin rail line, to a new bulk export facility in Port Pirie, South Australia. The haulage service is expected to start in the second quarter of 2012 and continue for a minimum of five years, and it may be extended depending on the development of certain nearby iron ore deposits.
To provide the above-rail haulage service, GWA has entered into a locomotive purchase agreement to acquire nine new, 4,400-horsepower locomotives and will make certain other rolling stock and facilities investments of approximately A$67 million (US$72 million). When the iron ore mine is shipping at full capacity, GWA expects the new contract to generate total annual revenues of approximately A$50 million (US$54 million).
Both of these transactions are contingent upon the satisfaction of certain conditions precedent, including WPG obtaining final approval of two permits from the Government of South Australia related to the development of the mine and port infrastructure. It is currently expected that these two permits will be obtained by July 2011.
John C. Hellmann, President and CEO of GWI, commented, “We are pleased to be expanding our iron ore business in South Australia and look forward to providing WPG with the safest and most reliable service in the Australian rail industry. In the past three months, we have now announced orders for a total of 16 high horsepower locomotives in Australia, which is reflective of both our service commitment to existing customers and the expansion of our business with new mining customers. Australia remains a priority for GWI’s investment strategy, and we are engaged in several other potential new projects.”
About Genesee & Wyoming Inc.
GWI owns and operates short line and regional freight railroads in the United States, Canada, Australia, the Netherlands and Belgium. In addition, we operate the Tarcoola to Darwin rail line which links the Port of Darwin with the Australian interstate rail network in South Australia. Operations currently include 63 railroads organized in nine regions, with approximately 7,400 miles of owned and leased track and approximately 1,400 additional miles under track access arrangements. We provide rail service at 17 ports in North America and Europe and perform contract coal loading and railcar switching for industrial customers.
Caution regarding forward-looking statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding GWI’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. The forward-looking statements are based upon management's current beliefs or expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies and third-party approvals, many of which are beyond our control. Actual results may differ materially from those expressed or forecasted in any forward-looking statements. For a more detailed discussion of such risks and uncertainties, which could cause actual results to differ from those contained in these forward-looking statements, see "Risk Factors" in GWI's Annual Report on Form 10-K for the most recently ended fiscal year. Except for the ongoing obligations of GWI to disclose material information under the federal securities laws, GWI undertakes no obligation to, and expressly disclaims any such obligation to, update or alter any forward-looking statement to reflect new information, circumstances or events that occur after the date such forward-looking statement is made unless required by law.
CONTACT:
Genesee & Wyoming Inc.
Sarah Greene,
585-230-3951