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): October
30, 2018
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) |
(IRS Employer Identification No.) |
20 West Avenue, Darien, Connecticut |
06820 |
(Address of principal executive offices) |
(Zip Code) |
Registrant's telephone number, including area code: (203) 202-8900
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
ITEM 2.02 |
Results of Operations and Financial Condition. |
On October 30, 2018, Genesee & Wyoming Inc. (the Company) issued a press release reporting financial results for the third quarter of 2018. 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 October 25, 2018, the Genesee & Wyoming Inc. Board of Directors authorized a new share repurchase program of up to $500 million of G&W Class A Common Stock. Repurchases may occur from time to time in the open market, including under 10b5-1 plans, or in privately negotiated transactions. G&W expects to evaluate opportunistic share repurchases alongside its traditional investment opportunities and will make such repurchases subject to market conditions and other corporate factors.
ITEM 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Exhibit | |
Press release, dated October 30, 2018, announcing results for the third quarter of 2018. |
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. |
|||
Date: |
October 30, 2018 |
By: |
/s/ Timothy J. Gallagher |
Name: |
Timothy J. Gallagher |
||
Title: |
Chief Financial Officer |
Exhibit 99.1
Genesee & Wyoming Reports Results for the Third Quarter of 2018
DARIEN, Conn.--(BUSINESS WIRE)--October 30, 2018--Genesee & Wyoming Inc. (G&W) (NYSE:GWR)
Third Quarter 2018 Consolidated Highlights Compared with Third Quarter 2017
Jack Hellmann, Chairman, President and CEO of G&W, commented, "Our financial results for the third quarter of 2018 were strong, with reported diluted earnings per share increasing 45% and adjusted diluted earnings per share increasing 52%. Our North American financial results (approximately 80% of operating income) were uniformly positive led by 11.5% revenue growth, an operating ratio that improved around 300 basis points to 71.2%, and a 25% increase in operating income. Meanwhile, third quarter results in our Australia Region (approximately 15% of operating income) and U.K./Europe Region (approximately 5% of operating income) were slightly below our expectations."
"Our commercial outlook remains positive in all three of our geographic segments, however, we expect our fourth quarter financial results to be adversely impacted by three items. In North America, Hurricane Michael struck our Bay Line Railroad and customer facilities in Panama City, Florida in October, which will result in higher expenses and lower shipment levels. In Australia, we expect delays in certain coal shipments in New South Wales that will shift into early 2019. And in the U.K., where our restructuring is proceeding on plan, our ability to staff new and existing business is being constrained by near-term locomotive driver shortages, which will squeeze fourth quarter margins as we further ramp up training and hiring."
"We continue to actively analyze investment opportunities in multiple geographies, as well as investments in our own shares. In mid-October, we completed our previously announced $300 million share repurchase program, and our Board recently approved a share repurchase program for an additional $500 million of Common Stock. We expect to execute this program opportunistically, as we evaluate the intrinsic value of our shares, the relative attractiveness of acquisitions and investments, as well as our leverage profile and overall business conditions."
Third Quarter Segment Highlights
Financial Results
G&W's operating revenues increased $26.4 million, or 4.6%, to $603.3 million in the third quarter of 2018, compared with $576.9 million in the third quarter of 2017. G&W's operating income in the third quarter of 2018 was $127.8 million, compared with $109.8 million in the third quarter of 2017. G&W's adjusted operating income in the third quarter of 2018 was $130.5 million, compared with $114.2 million in the third quarter of 2017.(1)
G&W's effective income tax rate in the third quarter of 2018 was 30.0%, compared with 36.4% in the third quarter of 2017. The decrease in the effective income tax rate was primarily a result of the Tax Cuts and Jobs Act of 2017 (TCJA), which decreased the United States federal corporate income tax rate from 35% to 21%.
Reported net income attributable to G&W in the third quarter of 2018 was $69.6 million, compared with reported net income attributable to G&W of $50.2 million in the third quarter of 2017. Excluding the net impact of certain items affecting comparability between periods discussed below, G&W's adjusted net income attributable to G&W in the third quarter of 2018 was $73.8 million, compared with $50.6 million in the third quarter of 2017.(1)
G&W's reported diluted EPS in the third quarter of 2018 were $1.16 with 60.1 million weighted average shares outstanding, compared with reported diluted EPS in the third quarter of 2017 of $0.80 with 62.5 million weighted average shares outstanding. G&W's adjusted diluted EPS in the third quarter of 2018 were $1.23 with 60.1 million weighted average shares outstanding, compared with adjusted diluted EPS in the third quarter of 2017 of $0.81 with 62.5 million weighted average shares outstanding.(1)
Items Affecting Comparability
In the third quarter of 2018 and 2017, G&W's results included certain items affecting comparability between the periods that are set forth in the following table (in millions, except per share amounts):
Income/(Loss) |
After-Tax Net |
Diluted EPS |
||||||||||||||
Three Months Ended September 30, 2018 |
||||||||||||||||
Corporate development and related costs | $ | (0.3 | ) | $ | (0.3 | ) | $ | — | ||||||||
Restructuring and related costs | $ | (3.3 | ) | $ | (2.7 | ) | $ | (0.04 | ) | |||||||
Gain on settlement | $ | 0.9 | $ | 0.3 | $ | 0.01 | ||||||||||
TCJA measurement period adjustment | $ | — | $ | (1.6 | ) | $ | (0.03 | ) | ||||||||
Three Months Ended September 30, 2017 |
||||||||||||||||
Corporate development and related costs | $ | (1.7 | ) | $ | (1.4 | ) | $ | (0.02 | ) | |||||||
Restructuring costs | $ | (2.6 | ) | $ | (2.2 | ) | $ | (0.04 | ) | |||||||
Recognition of unrecognized tax benefits | $ | — | $ | 3.3 | $ | 0.05 | ||||||||||
In the third quarter of 2018, G&W's results included restructuring and related costs of $3.3 million, primarily driven by our optimization activities in the U.K., corporate development and related costs of $0.3 million and a gain on a settlement in Australia of $0.9 million from the recovery of pre-petition claims associated with Arrium Limited's voluntary administration (bankruptcy) in the second quarter of 2016. As a result of the TCJA, the third quarter of 2018 also included a $1.6 million measurement period adjustment to the one-time transition (toll) tax on earnings of certain foreign subsidiaries.
In the third quarter of 2017, G&W's results included restructuring costs of $2.6 million, primarily in G&W's U.K./European Region, as well as corporate development and related costs of $1.7 million, primarily related to the acquisition and integration of Pentalver Transport Limited (Pentalver). The third quarter of 2017 also included the recognition of $3.3 million of previously unrecognized tax benefits resulting from the lapse of the statute of limitations on acquired liabilities for uncertain tax positions.
Third Quarter Results by Segment
Operating revenues from G&W's North American Operations increased $36.8 million, or 11.5%, to $355.7 million in the third quarter of 2018, compared with $318.9 million in the third quarter of 2017.
G&W's North American Operations had operating income of $102.5 million in the third quarter of 2018, compared with $82.2 million in the third quarter of 2017. The operating ratio for North American Operations was 71.2% in the third quarter of 2018, compared with an operating ratio of 74.2% in the third quarter of 2017. Adjusted operating income from G&W's North American Operations in the third quarter of 2018 was $102.6 million, compared with adjusted operating income of $83.1 million in the third quarter of 2017. The adjusted operating ratio for North American Operations was 71.2% in the third quarter of 2018, compared with an adjusted operating ratio of 73.9% in the third quarter of 2017.(1)
Operating revenues from G&W's Australian Operations decreased $4.6 million, or 5.6%, to $76.7 million in the third quarter of 2018, compared with $81.3 million in the third quarter of 2017. Excluding a $6.0 million decrease due to the impact of foreign currency depreciation, Australian Operations revenues increased $1.4 million, or 1.9%, primarily due to an increase in freight revenues.(2)
G&W's Australian Operations had operating income of $20.7 million in the third quarter of 2018, compared with $22.3 million in the third quarter of 2017. The operating ratio for Australian Operations was 73.0% in the third quarter of 2018, compared with an operating ratio of 72.6% in the third quarter of 2017. Adjusted operating income from G&W's Australian Operations was $19.8 million in the third quarter of 2018, compared with adjusted operating income of $21.8 million in the third quarter of 2017. The adjusted operating ratio for Australian Operations was 74.2% in the third quarter of 2018, compared with an adjusted operating ratio of 73.2% in the third quarter of 2017.(1)
Operating revenues from G&W's U.K./European Operations decreased $5.8 million, or 3.3%, to $170.9 million in the third quarter of 2018, compared with $176.7 million in the third quarter of 2017. Excluding $13.7 million of revenues from G&W's divested ERS operations for the third quarter of 2017 and a $1.2 million decrease due to the impact of foreign currency depreciation, U.K./European same railroad revenues increased $9.1 million, or 5.6%, primarily due to increases in freight-related and freight revenues in the U.K. and Poland.(2)
G&W's U.K./European Operations had operating income of $4.6 million in the third quarter of 2018, compared with $5.4 million in the third quarter of 2017, which included $2.6 million from ERS. The operating ratio for U.K./European Operations was 97.3% in the third quarter of 2018, compared with an operating ratio of 97.0% in the third quarter of 2017. Adjusted operating income from G&W's U.K./European Operations was $8.1 million in the third quarter of 2018, compared with adjusted operating income of $9.3 million in the third quarter of 2017, which included $3.3 million from ERS. The adjusted operating ratio for U.K./European Operations was 95.2% in the third quarter of 2018, compared with an adjusted operating ratio of 94.7% in the third quarter of 2017.(1)
Adjusted Free Cash Flow Measures (1)
Adjusted free cash flow measures for the nine months ended September 30, 2018 and 2017 were as follows (in millions):
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2018 | 2017 | ||||||||||
Net cash provided by operating activities | $ | 397.5 | $ | 350.4 | |||||||
Allocation of adjusted cash flow to noncontrolling interest(a) | (21.6 | ) | (21.9 | ) | |||||||
Adjusted net cash provided by operating activities attributable to G&W | $ | 375.8 | $ | 328.5 | |||||||
Core capital expenditures(b) | (141.7 | ) | (123.7 | ) | |||||||
Adjusted free cash flow attributable to G&W before new business investments and grant funded projects | $ | 234.1 | $ | 204.8 | |||||||
New business investments | (31.0 | ) | (4.5 | ) | |||||||
Grant funded projects, net of proceeds received from outside parties(c) |
|
1.8 |
|
0.7 | |||||||
Adjusted free cash flow attributable to G&W | $ | 204.9 | $ | 201.1 |
(a) | Allocation of adjusted cash flow to noncontrolling interest (Macquarie Infrastructure and Real Assets' (MIRA's) 48.9% equity ownership of G&W Australia Holdings LP (GWA) since December 1, 2016) is calculated as 48.9% of the total of (i) cash flow provided by operating activities of G&W’s Australian Operations, less (ii) net purchases of property and equipment of G&W’s Australian Operations. The timing and amount of actual distributions, if any, from GWA to G&W and MIRA made in any given period will vary and could differ materially from the amounts presented. There were A$40.0 million (or $30.0 million at the average exchange rate in the period it was paid) of such distributions made for the nine months ended September 30, 2018, of which $15.3 million and $14.9 million was distributed to G&W and MIRA, respectively, and no such distributions were made for the nine months ended September 30, 2017. G&W expressly disclaims any direct correlation between the allocation of adjusted cash flow to noncontrolling interest and actual distributions made in any given period. | |
(b) | Core capital expenditures represent purchases of property and equipment as presented on the Statement of Cash Flows less grant proceeds from outside parties, insurance proceeds for the replacement of assets and proceeds from disposition of property and equipment, each of which as presented on the Statement of Cash Flows, less new business investments and grant funded projects. | |
(c) | Grant funded projects represent purchases of property and equipment for projects partially or entirely funded by outside parties, net of grant proceeds from outside parties as presented on the Statement of Cash Flows. | |
Share Repurchase Program
During the third quarter of 2018, G&W repurchased approximately 0.9 million shares of Class A Common Stock for $78.2 million, which resulted in a reduction of approximately 0.3 million shares in our weighted average diluted shares outstanding for the third quarter.
Conference Call and Webcast Details
As previously announced, G&W's conference call to discuss financial results for the third quarter of 2018 will be held on Tuesday, October 30, 2018, at 11 a.m. EDT. The dial-in number for the teleconference in the U.S. is (800) 288-9626; outside the U.S., the dial-in number is (612) 332-0345, or the call may be accessed live over the Internet (listen only) at www.gwrr.com/investors. Management will be referring to a slide presentation that will also be available at gwrr.com/investors. The webcast will be archived at www.gwrr.com/investors until the following quarter's earnings press release. Telephone replay is available for 30 days beginning at 1 p.m. EDT on October 30, 2018, by dialing (800) 475-6701 (or outside the U.S., dialing 320-365-3844). The access code is 439197.
About G&W
G&W owns or leases 121 freight railroads organized in nine locally managed operating regions with 8,000 employees serving 3,000 customers.
G&W subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.
From time to time, we may use our website as a channel of distribution of material company information. Financial and other material information regarding G&W is routinely posted on and accessible at www.gwrr.com/investors. In addition, you may automatically receive email alerts and other information about us by enrolling your email address in the "Email Alerts" section of www.gwrr.com/investors. The information contained on or connected to our Internet website is not deemed to be incorporated by reference in this press release or filed with the United States Securities and Exchange Commission.
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,” “could,” “should,” “seeks,” “expects,” “will,” “estimates,” “trends,” “outlook,” variations of these words and similar expressions are intended to identify these forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to forecast, including the following: risks related to the operation of our railroads; severe weather conditions and other natural occurrences, which could result in shutdowns, derailments, railroad network and port congestion or other substantial disruption of operations; customer demand and changes in our operations or loss of important customers; exposure to the credit risk of customers and counterparties; changes in commodity prices; consummation and integration of acquisitions; economic, political and industry conditions, including employee strikes or work stoppages; retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we or our customers are subject; increased competition in relevant markets; funding needs and financing sources, including our ability to obtain government funding for capital projects; international complexities of operations, currency fluctuations, finance, tax and decentralized management; challenges of managing rapid growth, including retention and development of senior leadership; unpredictability of fuel costs; susceptibility to and outcome of various legal claims, lawsuits and arbitrations; increase in, or volatility associated with, expenses related to estimated claims, self-insured retention amounts and insurance coverage limits; consummation of new business opportunities; decrease in revenues and/or increase in costs and expenses; susceptibility to the risks of doing business in foreign countries; uncertainties arising from a referendum in which voters in the United Kingdom (U.K.) approved an exit from the European Union (E.U.), commonly referred to as Brexit; our ability to integrate acquired businesses successfully or to realize the expected synergies associated with acquisitions; risks associated with our substantial indebtedness; failure to maintain satisfactory working relationships with partners in Australia; failure to maintain an effective system of internal control over financial reporting as well as disclosure controls and procedures and other risks including, but not limited to, those noted in our 2017 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors.” Therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Forward-looking statements speak only as of the date of this press release or as of the date they were made. G&W does not undertake, and expressly disclaims, any duty to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
1. | Adjusted operating income, adjusted operating ratio, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS), and the adjusted free cash flow measures of adjusted net cash provided by operating activities attributable to G&W, adjusted free cash flow attributable to G&W and adjusted free cash flow attributable to G&W before new business investments and grant funded projects are non-GAAP financial measures and are not intended to replace financial measures calculated in accordance with GAAP. 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 their most directly comparable financial measures calculated in accordance with GAAP, is included in the tables attached to this press release. | |
2. | Foreign exchange impact is calculated by comparing the prior period results translated from local currency to U.S. dollars using current period exchange rates to the prior period results in U.S. dollars as reported. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 | |||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
OPERATING REVENUES | $ | 603,304 | $ | 576,927 | $ | 1,772,955 | $ | 1,636,468 | |||||||||||||
OPERATING EXPENSES | 475,484 | 467,085 | 1,455,097 | 1,350,993 | |||||||||||||||||
OPERATING INCOME | 127,820 | 109,842 | 317,858 | 285,475 | |||||||||||||||||
INTEREST INCOME | 417 | 463 | 1,499 | 1,271 | |||||||||||||||||
INTEREST EXPENSE | (26,429 | ) | (28,281 | ) | (80,605 | ) | (80,431 | ) | |||||||||||||
OTHER INCOME/(LOSS), NET | 1,515 | 1,868 | (237 | ) | 4,519 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 103,323 | 83,892 | 238,515 | 210,834 | |||||||||||||||||
PROVISION FOR INCOME TAXES | (31,013 | ) | (30,507 | ) | (41,569 | ) | (82,032 | ) | |||||||||||||
NET INCOME | $ | 72,310 | $ | 53,385 | $ | 196,946 | $ | 128,802 | |||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 2,720 | 3,145 | 8,090 | 6,317 | |||||||||||||||||
NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC. | $ | 69,590 | $ | 50,240 | $ | 188,856 | $ | 122,485 | |||||||||||||
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON STOCKHOLDERS: | $ | 1.18 | $ | 0.82 | $ | 3.13 | $ | 1.99 | |||||||||||||
WEIGHTED AVERAGE SHARES - BASIC | 59,168 | 61,629 | 60,343 | 61,518 | |||||||||||||||||
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON STOCKHOLDERS: | $ | 1.16 | $ | 0.80 | $ | 3.08 | $ | 1.96 | |||||||||||||
WEIGHTED AVERAGE SHARES - DILUTED | 60,131 | 62,477 | 61,255 | 62,399 | |||||||||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
AS OF SEPTEMBER 30, 2018 AND DECEMBER 31, 2017 | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
September 30, | December 31, | |||||||||
2018 | 2017 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 74,067 | $ | 80,472 | ||||||
Accounts receivable, net | 441,105 | 416,705 | ||||||||
Materials and supplies | 52,517 | 57,750 | ||||||||
Prepaid expenses and other | 54,292 | 34,606 | ||||||||
Total current assets | 621,981 | 589,533 | ||||||||
PROPERTY AND EQUIPMENT, net | 4,613,295 | 4,656,921 | ||||||||
GOODWILL | 1,128,580 | 1,165,587 | ||||||||
INTANGIBLE ASSETS, net | 1,466,137 | 1,567,038 | ||||||||
DEFERRED INCOME TAX ASSETS, net | 3,883 | 3,343 | ||||||||
OTHER ASSETS | 70,122 | 52,475 | ||||||||
Total assets | $ | 7,903,998 | $ | 8,034,897 | ||||||
LIABILITIES AND EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Current portion of long-term debt | $ | 25,138 | $ | 27,853 | ||||||
Accounts payable | 271,539 | 253,993 | ||||||||
Accrued expenses | 171,011 | 185,935 | ||||||||
Total current liabilities | 467,688 | 467,781 | ||||||||
LONG-TERM DEBT, less current portion | 2,300,556 | 2,303,442 | ||||||||
DEFERRED INCOME TAX LIABILITIES, net | 866,821 | 873,194 | ||||||||
DEFERRED ITEMS - grants from outside parties | 323,370 | 321,592 | ||||||||
OTHER LONG-TERM LIABILITIES | 162,993 | 172,796 | ||||||||
TOTAL EQUITY | 3,782,570 | 3,896,092 | ||||||||
Total liabilities and equity | $ | 7,903,998 | $ | 8,034,897 | ||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2018 | 2017 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 196,946 | $ | 128,802 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 197,127 | 186,509 | |||||||||
Stock-based compensation | 13,029 | 13,354 | |||||||||
Deferred income taxes | 7,978 | 51,231 | |||||||||
Net gain on sale and impairment of assets | (2,501 | ) | (1,096 | ) | |||||||
Changes in assets and liabilities which provided/(used) cash, net of effect of acquisitions: | |||||||||||
Accounts receivable, net | (50,143 | ) | (18,020 | ) | |||||||
Materials and supplies | 3,133 | 8,998 | |||||||||
Prepaid expenses and other | (11,663 | ) | 14,257 | ||||||||
Accounts payable and accrued expenses | 33,818 | (41,529 | ) | ||||||||
Other assets and liabilities, net | 9,750 | 7,883 | |||||||||
Net cash provided by operating activities | 397,474 | 350,389 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment | (194,132 | ) | (149,105 | ) | |||||||
Grant proceeds from outside parties | 16,696 | 15,998 | |||||||||
Net cash paid for acquisitions, net of cash acquired | — | (107,586 | ) | ||||||||
Proceeds from sale of business | 7,927 | — | |||||||||
Proceeds from sale of investment | — | 2,100 | |||||||||
Insurance proceeds for the replacement of assets | 2,780 | 1,406 | |||||||||
Proceeds from disposition of property and equipment | 3,710 | 4,238 | |||||||||
Other investing activities | (2,921 | ) | — | ||||||||
Net cash used in investing activities | (165,940 | ) | (232,949 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Principal payments on revolving line-of-credit, long-term debt and capital leases | (766,713 | ) | (498,925 | ) | |||||||
Proceeds from revolving line-of-credit and long-term borrowings | 821,666 | 418,735 | |||||||||
Debt amendment/issuance costs | (5,318 | ) | — | ||||||||
Common share repurchases | (270,488 | ) | — | ||||||||
Distribution to noncontrolling interest | (14,898 | ) | — | ||||||||
Installment payments on Freightliner deferred consideration | (6,255 | ) | — | ||||||||
Other financing related activities, net | 5,006 | 4,728 | |||||||||
Net cash used in financing activities | (237,000 | ) | (75,462 | ) | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (939 | ) | 5,980 | ||||||||
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (6,405 | ) | 47,958 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 80,472 | 32,319 | |||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 74,067 | $ | 80,277 | |||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
||||||||||||||||||||||||||||||
Operating revenues: |
|||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 423,374 | 70.2 | % | $ | 400,735 | 69.5 | % | $ | 1,241,245 | 70.0 | % | $ | 1,161,635 | 71.0 | % | |||||||||||||||||||||
Freight-related revenues | 145,450 | 24.1 | % | 140,923 | 24.4 | % | 429,049 | 24.2 | % | 387,881 | 23.7 | % | |||||||||||||||||||||||||
All other revenues | 34,480 | 5.7 | % | 35,269 | 6.1 | % | 102,661 | 5.8 | % | 86,952 | 5.3 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 603,304 | 100.0 | % | $ | 576,927 | 100.0 | % | $ | 1,772,955 | 100.0 | % | $ | 1,636,468 | 100.0 | % | |||||||||||||||||||||
Operating expenses: |
|||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 175,853 | 29.1 | % | $ | 169,576 | 29.4 | % | $ | 539,407 | 30.4 | % | $ | 500,936 | 30.6 | % | |||||||||||||||||||||
Equipment rents | 35,325 | 5.9 | % | 33,291 | 5.8 | % | 104,214 | 5.9 | % | 100,399 | 6.1 | % | |||||||||||||||||||||||||
Purchased services(b) | 53,717 | 8.9 | % | 68,562 | 11.9 | % | 178,864 | 10.1 | % | 176,358 | 10.8 | % | |||||||||||||||||||||||||
Depreciation and amortization | 65,392 | 10.9 | % | 64,222 | 11.1 | % | 197,127 | 11.1 | % | 186,509 | 11.4 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 45,713 | 7.6 | % | 34,535 | 6.0 | % | 137,487 | 7.8 | % | 105,718 | 6.5 | % | |||||||||||||||||||||||||
Electricity used in train operations | 2,742 | 0.5 | % | 765 | 0.1 | % | 7,020 | 0.4 | % | 6,072 | 0.4 | % | |||||||||||||||||||||||||
Casualties and insurance | 9,912 | 1.6 | % | 10,624 | 1.9 | % | 32,862 | 1.8 | % | 33,346 | 2.0 | % | |||||||||||||||||||||||||
Materials | 32,744 | 5.4 | % | 30,664 | 5.3 | % | 97,589 | 5.5 | % | 77,861 | 4.8 | % | |||||||||||||||||||||||||
Trackage rights | 22,838 | 3.8 | % | 22,632 | 3.9 | % | 67,119 | 3.8 | % | 66,652 | 4.1 | % | |||||||||||||||||||||||||
Net gain on sale and impairment of assets | (642 | ) | (0.1 | )% | (315 | ) | (0.1 | )% | (2,501 | ) | (0.1 | )% | (1,096 | ) | (0.1 | )% | |||||||||||||||||||||
Restructuring and related costs | 3,286 | 0.5 | % | 2,628 | 0.5 | % | 12,931 | 0.7 | % | 8,744 | 0.5 | % | |||||||||||||||||||||||||
Other expenses(c) | 28,604 | 4.7 | % | 29,901 | 5.2 | % | 82,978 | 4.7 | % | 89,494 | 5.5 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 475,484 | 78.8 | % | $ | 467,085 | 81.0 | % | $ | 1,455,097 | 82.1 | % | $ | 1,350,993 | 82.6 | % |
(a) | Includes $0.1 million and $0.4 million of corporate development and related costs for the three and nine months ended September 30, 2018, respectively. Includes $0.4 million and $3.2 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively, primarily associated with severance costs related to the integration of the Providence & Worcester Railroad Company (P&W). | |
(b) |
Includes $0.2 million and $0.3 million of corporate development and related costs for the three and nine months ended September 30, 2018, respectively. Includes $0.1 million and $0.4 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively. |
|
(c) | Includes $0.9 million and $7.3 million gain on settlement related to Arrium Limited's voluntary administration for the three and nine months ended September 30, 2018, respectively. Includes $0.4 million of credit facility refinancing-related costs for the nine months ended September 30, 2018. Includes $0.1 million and $0.2 million of corporate development and related costs for the three and nine months ended September 30, 2018, respectively. Includes $1.3 million and $7.2 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively, primarily associated with the acquisition and integration of Pentalver as well as expenses related to ongoing corporate development projects and projects that are no longer active. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
NORTH AMERICAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
||||||||||||||||||||||||||||||
Operating revenues: |
|||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 273,432 | 76.9 | % | $ | 242,968 | 76.2 | % | $ | 778,717 | 76.3 | % | $ | 719,622 | 75.4 | % | |||||||||||||||||||||
Freight-related revenues | 66,045 | 18.6 | % | 60,286 | 18.9 | % | 193,344 | 18.9 | % | 186,814 | 19.6 | % | |||||||||||||||||||||||||
All other revenues | 16,232 | 4.5 | % | 15,673 | 4.9 | % | 48,835 | 4.8 | % | 47,641 | 5.0 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 355,709 | 100.0 | % | $ | 318,927 | 100.0 | % | $ | 1,020,896 | 100.0 | % | $ | 954,077 | 100.0 | % | |||||||||||||||||||||
Operating expenses: |
|||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 107,940 | 30.3 | % | $ | 102,692 | 32.2 | % | $ | 329,146 | 32.2 | % | $ | 314,932 | 33.0 | % | |||||||||||||||||||||
Equipment rents | 15,441 | 4.4 | % | 12,623 | 4.0 | % | 41,574 | 4.1 | % | 39,993 | 4.2 | % | |||||||||||||||||||||||||
Purchased services(b) | 14,968 | 4.2 | % | 15,254 | 4.8 | % | 43,550 | 4.3 | % | 45,350 | 4.8 | % | |||||||||||||||||||||||||
Depreciation and amortization | 41,388 | 11.6 | % | 40,036 | 12.5 | % | 123,266 | 12.1 | % | 117,822 | 12.3 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 23,230 | 6.5 | % | 16,934 | 5.3 | % | 71,963 | 7.0 | % | 54,038 | 5.7 | % | |||||||||||||||||||||||||
Casualties and insurance | 6,636 | 1.9 | % | 8,488 | 2.7 | % | 23,249 | 2.3 | % | 26,532 | 2.8 | % | |||||||||||||||||||||||||
Materials | 12,836 | 3.6 | % | 11,889 | 3.7 | % | 39,189 | 3.8 | % | 38,413 | 4.0 | % | |||||||||||||||||||||||||
Trackage rights | 10,586 | 3.0 | % | 10,025 | 3.1 | % | 30,225 | 2.9 | % | 28,732 | 3.0 | % | |||||||||||||||||||||||||
Net gain on sale and impairment of assets | (506 | ) | (0.1 | )% | (110 | ) | — | % | (2,124 | ) | (0.2 | )% | (870 | ) | (0.1 | )% | |||||||||||||||||||||
Restructuring and related costs | 1 | — | % | 316 | 0.1 | % | 42 | — | % | 384 | — | % | |||||||||||||||||||||||||
Other expenses(c) | 20,705 | 5.8 | % | 18,577 | 5.8 | % | 64,898 | 6.4 | % | 59,206 | 6.2 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 253,225 | 71.2 | % | $ | 236,724 | 74.2 | % | $ | 764,978 | 74.9 | % | $ | 724,532 | 75.9 | % | |||||||||||||||||||||
Operating income | $ | 102,484 | $ | 82,203 | $ | 255,918 | $ | 229,545 | |||||||||||||||||||||||||||||
Expenditures for additions to property & equipment, net of grants from outside parties | $ | 42,120 | $ | 41,713 | $ | 129,607 | $ | 105,940 |
(a) | Includes $0.1 million and $0.4 million of corporate development and related costs for the three and nine months ended September 30, 2018, respectively. Includes $0.4 million and $3.1 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively, primarily associated with severance costs related to the integration of P&W. | |
(b) | Includes $0.1 million of corporate development and related costs for the nine months ended September 30, 2017. | |
(c) | Includes $0.4 million of credit facility refinancing-related costs for the nine months ended September 30, 2018. Includes $0.1 million and $0.2 million of corporate and development and related costs for the three and nine months ended September 30, 2018, respectively. Includes $0.2 million and $4.2 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively, primarily associated with ongoing corporate development projects as well as projects that are no longer active. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
AUSTRALIAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
||||||||||||||||||||||||||||||
Operating revenues: |
|||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 65,249 | 85.1 | % | $ | 66,404 | 81.7 | % | $ | 194,335 | 84.3 | % | $ | 191,031 | 82.3 | % | |||||||||||||||||||||
Freight-related revenues | 10,136 | 13.2 | % | 12,880 | 15.8 | % | 32,214 | 14.0 | % | 36,089 | 15.6 | % | |||||||||||||||||||||||||
All other revenues | 1,318 | 1.7 | % | 1,986 | 2.5 | % | 4,017 | 1.7 | % | 4,866 | 2.1 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 76,703 | 100.0 | % | $ | 81,270 | 100.0 | % | $ | 230,566 | 100.0 | % | $ | 231,986 | 100.0 | % | |||||||||||||||||||||
Operating expenses: |
|||||||||||||||||||||||||||||||||||||
Labor and benefits | $ | 17,400 | 22.7 | % | $ | 17,618 | 21.6 | % | $ | 55,318 | 24.0 | % | $ | 52,447 | 22.6 | % | |||||||||||||||||||||
Equipment rents | 1,452 | 1.9 | % | 1,480 | 1.8 | % | 3,950 | 1.7 | % | 4,215 | 1.8 | % | |||||||||||||||||||||||||
Purchased services | 6,319 | 8.2 | % | 7,139 | 8.8 | % | 19,603 | 8.5 | % | 19,821 | 8.6 | % | |||||||||||||||||||||||||
Depreciation and amortization | 14,937 | 19.5 | % | 15,753 | 19.4 | % | 46,232 | 20.1 | % | 45,915 | 19.8 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 8,074 | 10.5 | % | 6,003 | 7.4 | % | 23,557 | 10.2 | % | 18,913 | 8.2 | % | |||||||||||||||||||||||||
Casualties and insurance | 1,651 | 2.2 | % | 1,367 | 1.7 | % | 5,198 | 2.3 | % | 4,219 | 1.8 | % | |||||||||||||||||||||||||
Materials | 3,003 | 3.9 | % | 3,398 | 4.2 | % | 8,725 | 3.8 | % | 8,629 | 3.7 | % | |||||||||||||||||||||||||
Trackage rights | 1,932 | 2.5 | % | 3,500 | 4.3 | % | 6,510 | 2.8 | % | 10,392 | 4.5 | % | |||||||||||||||||||||||||
Net gain on sale and impairment of assets | (20 | ) | — | % | (37 | ) | — | % | (133 | ) | (0.1 | )% | (59 | ) | — | % | |||||||||||||||||||||
Restructuring and related costs | — | — | % | — | — | % | — | — | % | 338 | 0.1 | % | |||||||||||||||||||||||||
Other expenses, net(a) | 1,242 | 1.6 | % | 2,773 | 3.4 | % | (979 | ) | (0.4 | )% | 7,471 | 3.2 | % | ||||||||||||||||||||||||
Total operating expenses | $ | 55,990 | 73.0 | % | $ | 58,994 | 72.6 | % | $ | 167,981 | 72.9 | % | $ | 172,301 | 74.3 | % | |||||||||||||||||||||
Operating income | $ | 20,713 | $ | 22,276 | $ | 62,585 | $ | 59,685 | |||||||||||||||||||||||||||||
Expenditures for additions to property & equipment, net of grants from outside parties | $ | 8,185 | $ | 4,545 | $ | 27,936 | $ | 9,721 |
(a) |
Includes $0.9 million and $7.3 million gain on settlement related to Arrium Limited's voluntary administration for the three and nine months ended September 30, 2018, respectively. Includes $0.5 million and $0.3 million of credits (corporate development and related costs) for the three and nine months ended September 30, 2017, respectively, primarily associated with a refund. |
|
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
U.K./EUROPEAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||||||||||||||||||
Operating revenues: |
|||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 84,693 | 49.6 | % | $ | 91,363 | 51.7 | % | $ | 268,193 | 51.4 | % | $ | 250,982 | 55.8 | % | |||||||||||||||||||||
Freight-related revenues | 69,269 | 40.5 | % | 67,757 | 38.3 | % | 203,491 | 39.0 | % | 164,978 | 36.6 | % | |||||||||||||||||||||||||
All other revenues | 16,930 | 9.9 | % | 17,610 | 10.0 | % | 49,809 | 9.6 | % | 34,445 | 7.6 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 170,892 | 100.0 | % | $ | 176,730 | 100.0 | % | $ | 521,493 | 100.0 | % | $ | 450,405 | 100.0 | % | |||||||||||||||||||||
Operating expenses: |
|||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 50,513 | 29.6 | % | $ | 49,266 | 27.9 | % | $ | 154,943 | 29.7 | % | $ | 133,557 | 29.6 | % | |||||||||||||||||||||
Equipment rents | 18,432 | 10.8 | % | 19,188 | 10.9 | % | 58,690 | 11.3 | % | 56,191 | 12.5 | % | |||||||||||||||||||||||||
Purchased services(b) | 32,430 | 19.0 | % | 46,169 | 26.1 | % | 115,711 | 22.2 | % | 111,187 | 24.7 | % | |||||||||||||||||||||||||
Depreciation and amortization | 9,067 | 5.3 | % | 8,433 | 4.8 | % | 27,629 | 5.3 | % | 22,772 | 5.1 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 14,409 | 8.4 | % | 11,598 | 6.6 | % | 41,967 | 8.0 | % | 32,767 | 7.3 | % | |||||||||||||||||||||||||
Electricity used in train operations | 2,742 | 1.6 | % | 765 | 0.4 | % | 7,020 | 1.3 | % | 6,072 | 1.2 | % | |||||||||||||||||||||||||
Casualties and insurance | 1,625 | 1.0 | % | 769 | 0.4 | % | 4,415 | 0.8 | % | 2,595 | 0.6 | % | |||||||||||||||||||||||||
Materials | 16,905 | 9.9 | % | 15,377 | 8.7 | % | 49,675 | 9.5 | % | 30,819 | 6.8 | % | |||||||||||||||||||||||||
Trackage rights | 10,320 | 6.0 | % | 9,107 | 5.2 | % | 30,384 | 5.8 | % | 27,528 | 6.1 | % | |||||||||||||||||||||||||
Net (gain)/loss on sale and impairment of assets | (116 | ) | (0.1 | )% | (168 | ) | (0.1 | )% | (244 | ) | — | % | (167 | ) |
— |
% | |||||||||||||||||||||
Restructuring and related costs | 3,285 | 1.9 | % | 2,312 | 1.3 | % | 12,889 | 2.5 | % | 8,022 | 1.8 | % | |||||||||||||||||||||||||
Other expenses(c) | 6,657 | 3.9 | % | 8,551 | 4.8 | % | 19,059 | 3.7 | % | 22,817 | 5.1 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 166,269 | 97.3 | % | $ | 171,367 | 97.0 | % | $ | 522,138 | 100.1 | % | $ | 454,160 | 100.8 | % | |||||||||||||||||||||
Operating income/(loss) | $ | 4,623 | $ | 5,363 | $ | (645 | ) | $ | (3,755 | ) | |||||||||||||||||||||||||||
Expenditures for additions to property & equipment, net of grants from outside parties | $ | 6,704 | $ | 6,981 | $ | 19,893 | $ | 17,446 |
(a) | Includes $0.1 million of corporate development and related costs for the nine months ended September 30, 2017, associated with severance costs related to the integration of Pentalver. | |
(b) |
Includes $0.2 million of corporate development and related costs for both the three and nine months ended September 30, 2018. Includes $0.1 and $0.3 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively, primarily associated with severance costs related to the integration of Pentalver. |
|
(c) | Includes a reduction of $0.1 million of corporate development and related costs for the nine months ended September 30, 2018. Includes $1.5 million and $3.3 million of corporate development and related costs for the three and nine months ended September 30, 2017, respectively, primarily associated with severance costs related to the integration of Pentalver. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||
FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD | |||||||||||||||||||||||||||||||||||||||||||||
COMPARISON BY COMMODITY GROUP | |||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands, except average revenues per carload) | |||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2018 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | |||||||||||||||||||||||||||||||||||||||||
Commodity Group |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
|||||||||||||||||||||||||||||||||
Agricultural Products | $ | 30,565 | 50,989 | $ | 599 | $ | 4,150 | 6,529 | $ | 636 | $ | 1,053 | 776 | $ | 1,357 | $ | 35,768 | 58,294 | $ | 614 | |||||||||||||||||||||||||
Autos & Auto Parts | 5,513 | 8,724 | 632 | — | — | — |
— |
— |
— | 5,513 | 8,724 | 632 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 38,436 | 43,903 | 875 | — | — | — | — |
— |
— | 38,436 | 43,903 | 875 | |||||||||||||||||||||||||||||||||
Coal & Coke | 23,006 | 70,314 | 327 | 32,357 | 106,809 | 303 | 2,588 | 4,271 | 606 | 57,951 | 181,394 | 319 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 8,761 | 15,312 | 572 | — | — | — | — |
— |
— | 8,761 | 15,312 | 572 | |||||||||||||||||||||||||||||||||
Intermodal | 514 | 4,922 | 104 | 17,538 | 14,610 | 1,200 | 58,609 | 188,002 | 312 | 76,661 | 207,534 | 369 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 24,113 | 37,328 | 646 | — | — |
— |
— |
— |
— | 24,113 | 37,328 | 646 | |||||||||||||||||||||||||||||||||
Metallic Ores | 3,573 | 4,655 | 768 | 8,914 | 6,464 | 1,379 | — |
— |
— | 12,487 | 11,119 | 1,123 | |||||||||||||||||||||||||||||||||
Metals | 34,904 | 43,752 | 798 | — | — | — | — |
— |
— | 34,904 | 43,752 | 798 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 38,570 | 60,496 | 638 | 2,066 | 16,813 | 123 | 22,344 | 48,111 | 464 | 62,980 | 125,420 | 502 | |||||||||||||||||||||||||||||||||
Petroleum Products | 18,236 | 26,231 | 695 | 224 | 93 | 2,409 | 99 | 222 | 446 | 18,559 | 26,546 | 699 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 31,961 | 44,403 | 720 | — | — | — | — | — | — | 31,961 | 44,403 | 720 | |||||||||||||||||||||||||||||||||
Waste | 8,089 | 15,859 | 510 | — | — | — | — | — | — | 8,089 | 15,859 | 510 | |||||||||||||||||||||||||||||||||
Other | 7,191 | 19,331 | 372 | — | — | — | — | — | — | 7,191 | 19,331 | 372 | |||||||||||||||||||||||||||||||||
Totals | $ | 273,432 | 446,219 | $ | 613 | $ | 65,249 | 151,318 | $ | 431 | $ | 84,693 | 241,382 | $ | 351 | $ | 423,374 | 838,919 | $ | 505 | |||||||||||||||||||||||||
Three Months Ended September 30, 2017 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | |||||||||||||||||||||||||||||||||||||||||
Commodity Group |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
|||||||||||||||||||||||||||||||||
Agricultural Products | $ | 28,699 | 47,588 | $ | 603 | $ | 6,059 | 13,163 | $ | 460 | $ | 964 | 777 | $ | 1,241 | $ | 35,722 | 61,528 | $ | 581 | |||||||||||||||||||||||||
Autos & Auto Parts | 6,079 | 9,728 | 625 | — | — | — | — | — | — | 6,079 | 9,728 | 625 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 36,745 | 43,739 | 840 | — | — | — | — | — | — | 36,745 | 43,739 | 840 | |||||||||||||||||||||||||||||||||
Coal & Coke | 20,008 | 60,864 | 329 | 29,013 | 81,142 | 358 | 2,345 | 3,798 | 617 | 51,366 | 145,804 | 352 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 8,257 | 14,415 | 573 | — | — | — | — | — | — | 8,257 | 14,415 | 573 | |||||||||||||||||||||||||||||||||
Intermodal | 311 | 3,145 | 99 | 19,012 | 15,416 | 1,233 | 67,374 | 229,059 | 294 | 86,697 | 247,620 | 350 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 22,204 | 35,846 | 619 | — | — | — | — | — | — | 22,204 | 35,846 | 619 | |||||||||||||||||||||||||||||||||
Metallic Ores | 3,703 | 4,667 | 793 | 11,305 | 8,354 | 1,353 | — | — | — | 15,008 | 13,021 | 1,153 | |||||||||||||||||||||||||||||||||
Metals | 26,008 | 34,003 | 765 | — | — | — | — | — | — | 26,008 | 34,003 | 765 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 34,769 | 57,104 | 609 | 792 | 5,488 | 144 | 20,680 | 49,146 | 421 | 56,241 | 111,738 | 503 | |||||||||||||||||||||||||||||||||
Petroleum Products | 16,425 | 24,772 | 663 | 223 | 88 | 2,534 | — | — | — | 16,648 | 24,860 | 670 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 28,135 | 42,244 | 666 | — | — | — | — | — | — | 28,135 | 42,244 | 666 | |||||||||||||||||||||||||||||||||
Waste | 6,662 | 14,330 | 465 | — | — | — | — | — | — | 6,662 | 14,330 | 465 | |||||||||||||||||||||||||||||||||
Other | 4,963 | 15,252 | 325 | — | — | — | — | — | — | 4,963 | 15,252 | 325 | |||||||||||||||||||||||||||||||||
Totals | $ | 242,968 | 407,697 | $ | 596 | $ | 66,404 | 123,651 | $ | 537 | $ | 91,363 | 282,780 | $ | 323 | $ | 400,735 | 814,128 | $ | 492 |
* Represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||
FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD | |||||||||||||||||||||||||||||||||||||||||||||
COMPARISON BY COMMODITY GROUP | |||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands, except average revenues per carload) | |||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2018 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | |||||||||||||||||||||||||||||||||||||||||
Commodity Group |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
|||||||||||||||||||||||||||||||||
Agricultural Products | $ | 91,630 | 156,515 | $ | 585 | $ | 15,639 | 33,816 | $ | 462 | $ | 3,073 | 2,349 | $ | 1,308 | $ | 110,342 | 192,680 | $ | 573 | |||||||||||||||||||||||||
Autos & Auto Parts | 16,686 | 26,546 | 629 | — | — | — | — | — | — | 16,686 | 26,546 | 629 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 113,625 | 132,530 | 857 | — | — | — | — | — | — | 113,625 | 132,530 | 857 | |||||||||||||||||||||||||||||||||
Coal & Coke | 62,038 | 191,626 | 324 | 96,506 | 300,947 | 321 | 8,751 | 14,204 | 616 | 167,295 | 506,777 | 330 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 25,587 | 45,402 | 564 | — | — | — | — | — | — | 25,587 | 45,402 | 564 | |||||||||||||||||||||||||||||||||
Intermodal | 1,203 | 11,822 | 102 | 50,613 | 41,321 | 1,225 | 192,413 | 599,840 | 321 | 244,229 | 652,983 | 374 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 70,362 | 111,311 | 632 | — | — | — | — | — | — | 70,362 | 111,311 | 632 | |||||||||||||||||||||||||||||||||
Metallic Ores | 10,816 | 13,499 | 801 | 24,770 | 16,921 | 1,464 | — | — | — | 35,586 | 30,420 | 1,170 | |||||||||||||||||||||||||||||||||
Metals | 95,791 | 119,796 | 800 | — | — | — | — | — | — | 95,791 | 119,796 | 800 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 107,122 | 170,348 | 629 | 6,247 | 49,567 | 126 | 63,849 | 142,577 | 448 | 177,218 | 362,492 | 489 | |||||||||||||||||||||||||||||||||
Petroleum Products | 52,870 | 76,231 | 694 | 560 | 226 | 2,478 | 107 | 242 | 442 | 53,537 | 76,699 | 698 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 90,346 | 127,522 | 708 | — | — | — | — | — | — | 90,346 | 127,522 | 708 | |||||||||||||||||||||||||||||||||
Waste | 21,316 | 42,677 | 499 | — | — | — | — | — | — | 21,316 | 42,677 | 499 | |||||||||||||||||||||||||||||||||
Other | 19,325 | 56,760 | 340 | — | — | — | — | — | — | 19,325 | 56,760 | 340 | |||||||||||||||||||||||||||||||||
Totals | $ | 778,717 | 1,282,585 | $ | 607 | $ | 194,335 | 442,798 | $ | 439 | $ | 268,193 | 759,212 | $ | 353 | $ | 1,241,245 | 2,484,595 | $ | 500 |
Nine Months Ended September 30, 2017 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | |||||||||||||||||||||||||||||||||||||||||
Commodity Group |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
Freight |
Carloads* |
Average |
|||||||||||||||||||||||||||||||||
Agricultural Products | $ | 92,956 | 157,792 | $ | 589 | $ | 17,737 | 43,804 | $ | 405 | $ | 3,532 | 3,036 | $ | 1,163 | $ | 114,225 | 204,632 | $ | 558 | |||||||||||||||||||||||||
Autos & Auto Parts | 17,019 | 27,705 | 614 | — | — | — | — | — | — | 17,019 | 27,705 | 614 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 111,660 | 134,561 | 830 | — | — | — | — | — | — | 111,660 | 134,561 | 830 | |||||||||||||||||||||||||||||||||
Coal & Coke | 57,123 | 170,664 | 335 | 86,292 | 271,485 | 318 | 7,464 | 18,333 | 407 | 150,879 | 460,482 | 328 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 24,856 | 44,091 | 564 | — | — | — | — | — | — | 24,856 | 44,091 | 564 | |||||||||||||||||||||||||||||||||
Intermodal | 726 | 7,313 | 99 | 52,113 | 44,153 | 1,180 | 190,163 | 669,963 | 284 | 243,002 | 721,429 | 337 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 64,903 | 105,020 | 618 | — | — | — | — | — | — | 64,903 | 105,020 | 618 | |||||||||||||||||||||||||||||||||
Metallic Ores | 10,519 | 13,840 | 760 | 29,595 | 24,114 | 1,227 | — | — | — | 40,114 | 37,954 | 1,057 | |||||||||||||||||||||||||||||||||
Metals | 78,681 | 104,496 | 753 | — | — | — | — | — | — | 78,681 | 104,496 | 753 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 97,446 | 160,917 | 606 | 4,787 | 35,394 | 135 | 49,823 | 127,210 | 392 | 152,056 | 323,521 | 470 | |||||||||||||||||||||||||||||||||
Petroleum Products | 50,696 | 73,821 | 687 | 507 | 206 | 2,461 | — | — | — | 51,203 | 74,027 | 692 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 79,690 | 120,831 | 660 | — | — | — | — | — | — | 79,690 | 120,831 | 660 | |||||||||||||||||||||||||||||||||
Waste | 19,000 | 39,461 | 481 | — | — | — | — | — | — | 19,000 | 39,461 | 481 | |||||||||||||||||||||||||||||||||
Other | 14,347 | 47,248 | 304 | — | — | — | — | — | — | 14,347 | 47,248 | 304 | |||||||||||||||||||||||||||||||||
Totals | $ | 719,622 | 1,207,760 | $ | 596 | $ | 191,031 | 419,156 | $ | 456 | $ | 250,982 | 818,542 | $ | 307 | $ | 1,161,635 | 2,445,458 | $ | 475 |
* Represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.
Non-GAAP Financial Measures
This earnings release contains references to adjusted operating income, adjusted operating ratio, adjusted operating expenses, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS) and the adjusted free cash flow measures of adjusted net cash provided by operating activities attributable to G&W, adjusted free cash flow attributable to G&W and adjusted free cash flow attributable to G&W before new business investments and grant funded projects, which are “non-GAAP financial measures” as this term is defined in 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. In accordance with these rules, G&W has reconciled these non-GAAP financial measures to their most directly comparable U.S. GAAP measures.
Management views these non-GAAP financial measures as important measures of G&W’s operating performance or, in the case of the adjusted free cash flow measures, a useful indicator of cash flow that may be available for discretionary use by G&W. Management also views these non-GAAP financial measures as a way to assess comparability between periods. Key limitations of the adjusted free cash flow measures include the assumptions that G&W 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.
These non-GAAP financial measures are not intended to represent, and should not be considered more meaningful than, or as an alternative to, their most directly comparable GAAP measures. These non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies.
The following tables set forth reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measure ($ in millions, except per share amounts).
Reconciliations of Non-GAAP Financial Measures
Adjusted Operating Income and Adjusted Operating Ratio
Three Months Ended | |||||||||||||||||||
September 30, 2018 | |||||||||||||||||||
North |
Australian |
U.K./European |
Total |
||||||||||||||||
Operating revenues | $ | 355.7 | $ | 76.7 | $ | 170.9 | $ | 603.3 | |||||||||||
Operating expenses | 253.2 | 56.0 | 166.3 | 475.5 | |||||||||||||||
Operating income(a) | $ | 102.5 | $ | 20.7 | $ | 4.6 | $ | 127.8 | |||||||||||
Operating ratio (b) | 71.2 | % | 73.0 | % | 97.3 | % | 78.8 | % | |||||||||||
Operating expenses | $ | 253.2 | $ | 56.0 | $ | 166.3 | $ | 475.5 | |||||||||||
Corporate development and related costs | (0.1 | ) | — | (0.2 | ) | (0.3 | ) | ||||||||||||
Restructuring and related costs | — | — | (3.3 | ) | (3.3 | ) | |||||||||||||
Gain on settlement | — | 0.9 | — | 0.9 | |||||||||||||||
Adjusted operating expenses | $ | 253.1 | $ | 56.9 | $ | 162.7 | $ | 472.8 | |||||||||||
Adjusted operating income | $ | 102.6 | $ | 19.8 | $ | 8.1 | $ | 130.5 | |||||||||||
Adjusted operating ratio | 71.2 | % | 74.2 | % | 95.2 | % | 78.4 | % |
(a) | Operating income is calculated as operating revenues less operating expenses. |
(b) | Operating ratio is calculated as operating expenses divided by operating revenues. |
Three Months Ended | ||||||||||||||||||
September 30, 2017 | ||||||||||||||||||
North |
Australian |
U.K./European |
Total |
|||||||||||||||
Operating revenues | $ | 318.9 | $ | 81.3 | $ | 176.7 | $ | 576.9 | ||||||||||
Operating expenses | 236.7 | 59.0 | 171.4 | 467.1 | ||||||||||||||
Operating income (a) | $ | 82.2 | $ | 22.3 | $ | 5.4 | $ | 109.8 | ||||||||||
Operating ratio (b) | 74.2 | % | 72.6 | % | 97.0 | % | 81.0 | % | ||||||||||
Operating expenses | $ | 236.7 | $ | 59.0 | $ | 171.4 | $ | 467.1 | ||||||||||
Corporate development and related costs | (0.6 | ) | 0.5 | (1.6 | ) | (1.7 | ) | |||||||||||
Restructuring costs | (0.3 | ) | — | (2.3 | ) | (2.6 | ) | |||||||||||
Adjusted operating expenses | $ | 235.8 | $ | 59.5 | $ | 167.4 | $ | 462.7 | ||||||||||
Adjusted operating income | $ | 83.1 | $ | 21.8 | $ | 9.3 | $ | 114.2 | ||||||||||
Adjusted operating ratio | 73.9 | % | 73.2 | % | 94.7 | % | 80.2 | % |
(a) | Operating income is calculated as operating revenues less operating expenses. | |
(b) | Operating ratio is calculated as operating expenses divided by operating revenues. | |
Adjusted Net Income and Adjusted Diluted EPS
Three Months Ended September 30, 2018 |
Income |
Provision for |
Net Income |
Diluted EPS | |||||||||||||||||
As reported | $ | 103.3 | $ | (31.0 | ) | $ | 69.6 | $ | 1.16 | ||||||||||||
Add back certain items: | |||||||||||||||||||||
Corporate development and related costs | 0.3 | (0.1 | ) | 0.3 | — | ||||||||||||||||
Restructuring and related costs | 3.3 | (0.6 | ) | 2.7 | 0.04 | ||||||||||||||||
Gain on settlement | (0.9 | ) | 0.3 | (0.3 | ) | (0.01 | ) | ||||||||||||||
TCJA measurement period adjustment | — | 1.6 | 1.6 | 0.03 | |||||||||||||||||
As adjusted | $ | 106.0 | $ | (29.8 | ) | $ | 73.8 | $ | 1.23 |
Three Months Ended September 30, 2017 |
Income |
Provision for |
Net Income |
Diluted EPS | |||||||||||||||||
As reported | $ | 83.9 | $ | (30.5 | ) | $ |
50.2 |
$ | 0.80 | ||||||||||||
Add back certain items: | |||||||||||||||||||||
Corporate development and related costs | 1.7 | (0.8 | ) | 1.4 | 0.02 | ||||||||||||||||
Restructuring costs | 2.6 | (0.4 | ) | 2.2 | 0.04 | ||||||||||||||||
Recognition of unrecognized tax benefits |
|
— |
|
(3.3 | ) |
|
(3.3 | ) | (0.05 | ) | |||||||||||
As adjusted | $ | 88.3 | $ | (35.0 | ) | $ |
50.6 |
$ | 0.81 | ||||||||||||
Adjusted Free Cash Flow Measures
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2018 | 2017 | ||||||||||
Net cash provided by operating activities | $ | 397.5 | $ | 350.4 | |||||||
Allocation of adjusted cash flow to noncontrolling interest(a) | (21.6 | ) | (21.9 | ) | |||||||
Adjusted net cash provided by operating activities attributable to G&W | $ | 375.8 | $ | 328.5 | |||||||
Core capital expenditures(b) | (141.7 | ) | (123.7 | ) | |||||||
Adjusted free cash flow attributable to G&W before new business investments and grant funded projects | $ | 234.1 | $ | 204.8 | |||||||
New business investments(b) | (31.0 | ) | (4.5 | ) | |||||||
Grant funded projects, net of proceeds received from outside parties(b) | 1.8 | 0.7 | |||||||||
Adjusted free cash flow attributable to G&W | $ | 204.9 | $ | 201.1 |
(a) | Allocation of adjusted cash flow to noncontrolling interest (Macquarie Infrastructure and Real Assets' (MIRA's) 48.9% equity ownership of G&W Australia Holdings LP (GWA) since December 1, 2016) is calculated as 48.9% of the total of (i) cash flow provided by operating activities of G&W’s Australian Operations, less (ii) net purchases of property and equipment of G&W’s Australian Operations. The timing and amount of actual distributions, if any, from GWA to G&W and MIRA made in any given period will vary and could differ materially from the amounts presented. There were A$40.0 million (or $30.0 million at the average exchange rate in the period it was paid) of such distributions made for the nine months ended September 30, 2018, of which $15.3 million and $14.9 million was distributed to G&W and MIRA, respectively, and no such distributions were made for the nine months ended September 30, 2017. G&W expressly disclaims any direct correlation between the allocation of adjusted cash flow to noncontrolling interest and actual distributions made in any given period. | |
(b) | See breakout below. | |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||
Core |
New Business |
Grant |
Total | ||||||||||||||||||
Purchase of property and equipment | $ | (148.2 | ) | $ | (31.0 | ) | $ | (14.9 | ) | $ | (194.1 | ) | |||||||||
Grant proceeds from outside parties | — | — | 16.7 | 16.7 | |||||||||||||||||
Insurance proceeds for the replacement of assets | 2.8 | — | — | 2.8 | |||||||||||||||||
Proceeds from disposition of property and equipment | 3.7 | — | — | 3.7 | |||||||||||||||||
Purchase of property and equipment, net | $ | (141.7 | ) | $ | (31.0 | ) | $ | 1.8 | $ | (170.9 | ) | ||||||||||
Nine Months Ended September 30, 2017 |
|||||||||||||||||||||
Core |
New Business |
Grant |
Total | ||||||||||||||||||
Purchase of property and equipment | $ | (129.3 | ) | $ | (4.5 | ) | $ | (15.3 | ) | $ | (149.1 | ) | |||||||||
Grant proceeds from outside parties | — | — | 16.0 | 16.0 | |||||||||||||||||
Insurance proceeds for the replacement of assets | 1.4 | — | — | 1.4 | |||||||||||||||||
Proceeds from disposition of property and equipment | 4.2 | — | — | 4.2 | |||||||||||||||||
Purchase of property and equipment, net | $ | (123.7 | ) | $ | (4.5 | ) | $ | 0.7 | $ | (127.5 | ) |
(1) |
Core capital expenditures represent purchases of property and equipment as presented on the Statement of Cash Flows less grant proceeds from outside parties, insurance proceeds for the replacement of assets and proceeds from disposition of property and equipment, each of which as presented on the Statement of Cash Flows, less new business investments and grant funded projects. | |
(2) |
Grant funded projects represent purchases of property and equipment for projects partially or entirely funded by outside parties, net of grant proceeds from outside parties as presented on the Statement of Cash Flows. |
CONTACT:
G&W Corporate Communications
Michael
Williams, 1-203-202-8900
mwilliams@gwrr.com