Genesee & Wyoming Inc. (G&W) GWR
Fourth Quarter Highlights
- Operating revenues increased 23.9% to $514.9 million from $415.6 million.
- Same railroad operating revenues, excluding a $16.6 million negative impact of foreign currency depreciation, declined 13.8%, primarily due to weakness in iron ore, coal, metals and agricultural products shipments.
- Adjusted income from operations (adjusted operating income) decreased 16.9% to $94.2 million; Reported income from operations (operating income) decreased 16.6% to $94.6 million.(1)
- Adjusted diluted earnings per common share (EPS) decreased 24.1%, to $0.85, or 20.6%, excluding a $0.05 negative impact of foreign currency; Reported diluted EPS decreased 3.9% to $1.47, including a $0.47 impact from the Short Line Tax Credit and a $0.17 impact from a reduction in U.K. tax rates.(1)
Comments on Fourth Quarter
Jack Hellmann, President and CEO of G&W, commented, "Our financial results for the fourth quarter of 2015 were consistent with our updated guidance, with adjusted diluted EPS of $0.85 down 24% versus last year, or down 21% excluding the impact of foreign currency. Each of our three operating segments, North America, Australia and the U.K./Europe, continued to face weak shipments in most commodity groups with same railroad carloads down approximately 16%. The weakness in our rail shipments has been largely driven by three overarching trends: i) the collapse in the prices of global commodities such as iron ore, copper, manganese and crude oil, ii) the rapid shift of U.S. and U.K. power generation away from coal to cheaper natural gas, and iii) a strong U.S. dollar, which has been making our industrial customers, such as steel manufacturers, as well as our agricultural customers less competitive in global markets."
"The trends that made 2015 difficult show few signs of abating in 2016. In North America, we anticipate our operating income to be down slightly as sustained weakness in coal and steel shipments is expected to offset positive trends such as core pricing. In Australia, we expect a decline in operating income due to the recent closure of a manganese mine and continued pressure on our remaining iron ore business. In the U.K./Europe, we expect operating income to be flat, but to improve in the second half of 2016 after we complete the restructuring of the U.K. coal business. The net impact of these trends and weaker foreign currencies is that we expect our adjusted diluted EPS to be down approximately 10% in 2016."
"In response to this environment, we have been intensely focused on enhancing our free cash flow and positioning the business for improving trends in the future. With respect to costs, we have made expense reductions in every operating region, with Australia now initiating a second round of cost cuts and the U.K./Europe planning significant cost reductions and a restructuring of our U.K. coal business in the first half of 2016. With respect to revenues, we continue to concentrate on commercial development worldwide, and have achieved strong revenues per carload in North America led by effective yield management. With respect to capital expenditures, we have been reducing our investment in plant and equipment to be consistent with our lower traffic levels. As a result of these measures, we expect to increase our free cash flow by approximately 10% to around $285 million in 2016, prior to capital for new business investments."
"Regarding acquisitions and investments, we continue to evaluate multiple opportunities worldwide and will weigh the relative value of these potential investments versus the intrinsic value of our own shares." (1)
Fourth Quarter Financial Results
G&W's operating revenues increased $99.2 million, or 23.9%, to $514.9 million, in the fourth quarter of 2015, compared with $415.6 million in the fourth quarter of 2014. G&W's income from operations in the fourth quarter of 2015 was $94.6 million, compared with $113.5 million in the fourth quarter of 2014. G&W's operating ratio in the fourth quarter of 2015 was 81.6%, compared with an operating ratio of 72.7% in the fourth quarter of 2014, including lower operating margins from Freightliner Group Limited (Freightliner). G&W's same railroad operating ratio in the fourth quarter of 2015 was 76.1%, compared with 72.7% in the fourth quarter of 2014.
G&W reported net income in the fourth quarter of 2015 of $84.9 million, compared with net income of $87.4 million in the fourth quarter of 2014. Excluding the net impact of certain items affecting comparability between periods as discussed below, G&W's adjusted net income in the fourth quarter of 2015 was $49.1 million, compared with adjusted net income of $63.8 million in the fourth quarter of 2014.(1)
G&W's reported diluted EPS in the fourth quarter of 2015 were $1.47 with 57.9 million weighted average shares outstanding, compared with diluted EPS in the fourth quarter of 2014 of $1.53 with 57.1 million weighted average shares outstanding. Excluding the net impact of certain items affecting comparability discussed below, G&W's adjusted diluted EPS in the fourth quarter of 2015 were $0.85 with 57.9 million weighted average shares outstanding, compared with adjusted diluted EPS in the fourth quarter of 2014 of $1.12 with 57.1 million weighted average shares outstanding.(1)
Items Affecting Comparability
In the fourth quarter of 2015 and 2014, 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/ |
After-Tax |
Diluted |
||||||||||
|
Three Months Ended December 31, 2015 |
||||||||||||
|
Out of period benefit of final allocation of fair values to |
$ | 2.0 | $ | 1.6 | $ | 0.03 | ||||||
| Business development and related costs | $ | (2.5 | ) | $ | (1.7 | ) | $ | (0.03 | ) | |||
| Net gain on sale of assets | $ | 0.3 |
$ |
0.2 | $ | — | ||||||
| 2015 Short Line Tax Credit | $ | — |
$ |
27.4 |
$ | 0.47 | ||||||
| Impact of reduction in U.K. effective tax rate | $ | — | $ |
9.7 |
$ |
0.17 |
||||||
|
Application of full year effective tax rate to Q1 - Q3 2015 |
$ | — | $ | (1.3 | ) | $ | (0.02 | ) | ||||
|
Three Months Ended December 31, 2014 |
||||||||||||
| Business development and related costs | $ | (1.6 | ) | $ | (1.0 | ) | $ | (0.02 | ) | |||
| Net gain on sale of assets | $ | 1.7 | $ | 1.0 | $ | 0.02 | ||||||
| 2014 Short Line Tax Credit | $ | — | $ | 27.0 | $ | 0.47 | ||||||
|
Application of full year effective tax rate to Q1 - Q3 2014 |
$ | — | $ | (3.5 | ) | $ | (0.06 | ) | ||||
In December 2015, the U.S. Short Line Tax Credit (which had previously expired on December 31, 2014), was extended for fiscal years 2015 and 2016. In the fourth quarter of 2015, G&W recorded a tax benefit of $27.4 million associated with the extension of the Short Line Tax Credit, as well as a tax benefit of $9.7 million associated with a prospective change in U.K. tax rates enacted during the fourth quarter. In December 2014, the U.S. Short Line Tax Credit (which had previously expired on December 31, 2013) was extended for fiscal year 2014. In the fourth quarter of 2014, G&W recorded a tax benefit of $27.0 million associated with the extension of the Short Line Tax Credit. In addition, net income for the fourth quarter of 2015 and 2014 were reduced by $1.3 million and $3.5 million, respectively, due to the application of the full year effective tax rate to the results of the first three quarters of each year.
In the fourth quarter of 2015, G&W finalized its allocation of fair values to Freightliner's assets and liabilities, which resulted in a decrease in operating expenses of $3.9 million and an increase in interest expense of $1.0 million. Of the $3.9 million decrease in operating expenses and the $1.0 million increase in interest expense recorded in the fourth quarter of 2015, $2.6 million and $0.7 million, respectively, do not relate to the current period, and, accordingly, have been included as adjustments to our fourth quarter results. In the fourth quarter of 2015, G&W's results also included business development and related costs of $2.5 million primarily related to the integration of Freightliner and net gain on sale of assets of $0.3 million. G&W's fourth quarter of 2014 results included business development and related costs of $1.6 million and a net gain on the sale of assets of $1.7 million.
Fourth Quarter Results by Segment
Operating revenues from G&W's North American Operations decreased $39.6 million, or 11.7%, to $298.6 million in the fourth quarter of 2015, compared with $338.3 million in the fourth quarter of 2014. Excluding $3.0 million of revenues from new operations and a $4.5 million decrease due to the impact of foreign currency depreciation, North American Operations same railroad revenues decreased by $38.1 million, or 11.4%, primarily due to declines in coal, metals and agricultural products shipments.
North American Operations traffic decreased 67,557 carloads, or 14.8%, to 388,228 carloads in the fourth quarter of 2015. Excluding 7,018 carloads from new operations, same railroad traffic decreased 74,575 carloads, or 16.4%, in the fourth quarter of 2015 compared with the fourth quarter of 2014. The same railroad traffic decrease was principally due to decreases of 40,043 carloads of coal and coke (Midwest, Central and Ohio Valley regions), 15,641 carloads of metals traffic (primarily in the Southern, Ohio Valley and Northeast regions), 4,880 carloads of minerals and stone traffic (primarily in the Midwest, Central and Northeast regions), 3,769 carloads of Other traffic (primarily overhead Class I shipments), 3,420 carloads of agricultural products traffic (primarily in the Mountain West and Ohio Valley regions) and 3,364 carloads of auto and auto parts traffic (primarily in the Pacific Region). All remaining traffic decreased by a net 3,458 carloads.
Income from operations from G&W's North American Operations in the fourth quarter of 2015 was $73.2 million, compared with $90.3 million in the fourth quarter of 2014. The operating ratio for North American Operations was 75.5% in the fourth quarter of 2015, compared with an operating ratio of 73.3% in the fourth quarter of 2014.
Operating revenues from G&W's Australian Operations decreased $17.2 million, or 23.8%, to $55.2 million in the fourth quarter of 2015, compared with $72.4 million in the fourth quarter of 2014. Excluding $11.8 million of revenues from the newly acquired operations of Freightliner Australia and an $11.5 million decrease due to the impact of foreign currency depreciation, Australian Operations same railroad revenues decreased by $17.5 million, or 28.8%, primarily due to a decrease in freight revenues resulting from a decline in iron ore shipments.
Australian Operations traffic decreased 8,111 carloads, or 14.9%, to 46,245 carloads in the fourth quarter of 2015. The traffic decrease was principally due to a decrease of 11,039 carloads of metallic ores traffic, partially offset by an increase of 2,525 in minerals and stone traffic. All remaining traffic increased by a net 403 carloads.
Income from operations from G&W's Australian Operations in the fourth quarter of 2015 was $10.5 million, compared with $23.8 million in the fourth quarter of 2014. The operating ratio for Australian Operations was 81.0% in the fourth quarter of 2015, compared with an operating ratio of 67.2% in the fourth quarter of 2014.
Operating revenues from G&W's U.K./European Operations increased $156.1 million to $161.0 million in the fourth quarter of 2015, compared with $5.0 million in the fourth quarter of 2014 as a result of the newly acquired Freightliner U.K./European operations. U.K./European Operations traffic consisted of 278,150 carloads in the fourth quarter of 2015, which was entirely related to traffic from G&W's recently acquired Freightliner U.K./European operations.
Income from operations from U.K./European Operations in the fourth quarter of 2015 was $10.9 million with an operating ratio of 93.2%. The prior year is not comparable because over 95% of the revenue and income from operations was generated from the recently acquired Freightliner business. As a reminder, our U.K./European Operations require substantially lower capital expenditures and generate a higher operating ratio than our other segments.
Consolidated Annual Results
G&W reported net income for the year ended December 31, 2015 of $225.0 million ($300.9 million pre-tax), compared with net income of $260.8 million ($367.9 million pre-tax) for the year ended December 31, 2014. Excluding the impact of certain items affecting comparability listed below, G&W's adjusted net income for the year ended December 31, 2015 was $212.9 million ($339.0 million adjusted pre-tax), compared with adjusted net income of $233.3 million ($372.6 million adjusted pre-tax) for the year ended December 31, 2014. (1)
G&W's diluted EPS for the year ended December 31, 2015 were $3.89 with 57.8 million weighted average shares outstanding, compared with diluted EPS of $4.58 with 57.0 million weighted average shares outstanding for the year ended December 31, 2014. Excluding certain items affecting comparability listed below, G&W's adjusted diluted EPS for the year ended December 31, 2015 were $3.68 with 57.8 million weighted average shares outstanding, compared with adjusted diluted EPS of $4.10 with 57.0 million weighted average shares outstanding for the year ended December 31, 2014. (1)
G&W's 2015 and 2014 annual 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 |
||||||||||
|
Twelve Months Ended December 31, 2015 |
||||||||||||
| Business development and related costs | $ | (9.1 | ) | $ | (5.6 | ) | $ | (0.10 | ) | |||
| Net gain on sale of assets | $ | 2.3 | $ | 1.7 | $ | 0.03 | ||||||
| Freightliner acquisition-related costs | $ | (12.6 | ) | $ | (9.5 | ) | $ | (0.16 | ) | |||
|
Loss on settlement of Freightliner acquisition-related |
$ | (18.7 | ) | $ | (11.6 | ) | $ | (0.20 | ) | |||
| 2015 Short Line Tax Credit | $ | — | $ | 27.4 | $ |
0.47 |
||||||
|
Impact of reduction in U.K. effective tax rate |
$ |
— |
$ |
9.7 |
$ |
0.17 |
||||||
|
|
||||||||||||
|
Twelve Months Ended December 31, 2014 |
||||||||||||
| Business development and related costs | $ | (5.2 | ) | $ | (3.2 | ) | $ | (0.06 | ) | |||
| Net gain on sale of assets | $ | 5.1 | $ | 3.5 | $ | 0.06 | ||||||
| Credit facility refinancing costs | $ | (4.7 | ) | $ | (2.9 | ) | $ | (0.05 | ) | |||
| 2014 Short Line Tax Credit | $ | — | $ | 27.0 | $ | 0.47 | ||||||
| RailAmerica-related tax benefit | $ | — | $ | 3.9 | $ | 0.07 | ||||||
| Adjustment for tax returns from previous fiscal year | $ | — | $ | (0.7 | ) | $ | (0.01 | ) | ||||
Free Cash Flow (1)
G&W's free cash flow for the twelve months ended December 31, 2015 and 2014 was as follows (in millions):
| Twelve Months Ended | ||||||||
| 2015 | 2014 | |||||||
| Net cash provided by operating activities | $ |
475.1 |
$ | 491.5 | ||||
|
Net cash used in investing activities, excluding new business |
(1,008.6 |
) | (417.0 | ) | ||||
| Net cash used for acquisitions (a) |
792.2 |
221.5 | ||||||
| Free cash flow before new business investments |
258.7 |
295.9 | ||||||
| New business investments | (65.6 | ) | (92.9 | ) | ||||
| Free cash flow (1) | $ |
193.0 |
$ | 203.1 | ||||
| (a) | The 2015 period primarily consisted of net cash used for the acquisition of Freightliner and Pinsly Arkansas as well as $33.2 million in cash paid for incremental expenses related to the purchase and integration of the Freightliner acquisition. The 2014 period primarily consisted of cash paid for the Rapid City, Pierre & Eastern Railroad, Inc. (RCP&E) acquisition. | |
Conference Call and Webcast Details
As previously announced, G&W's conference call to discuss financial results for the fourth quarter of 2015 will be held on Tuesday, February 9, 2016, at 11 a.m. EST. The dial-in number for the teleconference in the U.S. is (800) 230-1074; outside the U.S. is (612) 288-0337, 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. EST on February 9, 2016 by dialing (800) 475-6701 (or outside the U.S., dial 320-365-3844). The access code is 372876.
About G&W
G&W owns or leases 120 freight railroads worldwide that are organized in 11 operating regions with 7,500 employees and more than 2,500 customers.
- G&W's nine North American regions serve 41 U.S. states and four Canadian provinces and include 113 short line and regional freight railroads, with more than 13,000 track-miles.
- G&W's Australia Region provides rail freight services in New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line.
- G&W's U.K./European Region is led by Freightliner, the U.K.'s largest rail maritime intermodal operator and second-largest rail freight company. Operations also include heavy-haul in Poland and Germany and cross-border intermodal services connecting Northern Europe seaports with key industrial regions throughout the continent.
G&W subsidiaries provide rail service at more than 40 major ports in North America, Australia, 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," "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 congestion or other substantial disruption of operations; customer demand and changes in our operations; 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 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 various legal claims and lawsuits; 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; our ability to realize the expected synergies associated with acquisitions; and others including, but not limited to, those noted in our 2014 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 income from operations (adjusted operating income), adjusted net income, adjusted diluted earnings per common share (EPS) and free cash flow 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.
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| OPERATING REVENUES | $ | 514,853 | $ | 415,627 | $ | 2,000,401 | $ | 1,639,012 | ||||||||
| OPERATING EXPENSES | 420,222 | 302,156 | 1,616,140 | 1,217,441 | ||||||||||||
| INCOME FROM OPERATIONS | 94,631 | 113,471 | 384,261 | 421,571 | ||||||||||||
| INTEREST INCOME | 106 | 88 | 481 | 1,445 | ||||||||||||
| INTEREST EXPENSE | (18,329 | ) | (12,053 | ) | (67,073 | ) | (56,162 | ) | ||||||||
|
LOSS ON SETTLEMENT OF FOREIGN CURRENCY |
— | — | (18,686 | ) | — | |||||||||||
| OTHER INCOME, NET |
1,403 |
562 |
1,948 |
1,008 | ||||||||||||
| INCOME BEFORE INCOME TAXES |
77,811 |
102,068 |
300,931 |
367,862 | ||||||||||||
|
BENEFIT FROM/(PROVISION FOR) INCOME TAXES |
7,123 |
(14,695 | ) |
(75,894 |
) | (107,107 | ) | |||||||||
| NET INCOME |
84,934 |
87,373 |
225,037 |
260,755 | ||||||||||||
| BASIC EARNINGS PER COMMON SHARE | $ |
1.49 |
$ | 1.57 | $ |
3.97 |
$ | 4.71 | ||||||||
| WEIGHTED AVERAGE SHARES - BASIC | 56,915 | 55,715 | 56,734 | 55,305 | ||||||||||||
| DILUTED EARNINGS PER COMMON SHARE | $ |
1.47 |
$ | 1.53 | $ |
3.89 |
$ | 4.58 | ||||||||
| WEIGHTED AVERAGE SHARES - DILUTED | 57,886 | 57,062 | 57,848 | 56,972 | ||||||||||||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| AS OF DECEMBER 31, 2015 AND 2014 | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| December 31, | |||||||
| 2015 | 2014 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 35,941 | $ | 59,727 | |||
| Accounts receivable, net | 382,458 | 357,278 | |||||
| Materials and supplies | 45,790 | 30,251 | |||||
| Prepaid expenses and other |
43,197 |
24,176 | |||||
| Deferred income tax assets, net | 69,174 | 76,994 | |||||
| Total current assets |
576,560 |
548,426 | |||||
| PROPERTY AND EQUIPMENT, net | 4,190,618 | 3,788,482 | |||||
| GOODWILL |
812,695 |
628,815 | |||||
| INTANGIBLE ASSETS, net | 1,123,937 | 587,663 | |||||
| DEFERRED INCOME TAX ASSETS, net |
2,110 |
2,500 | |||||
| OTHER ASSETS, net | 43,871 | 39,867 | |||||
| Total assets | $ |
6,749,791 |
$ | 5,595,753 | |||
| LIABILITIES AND EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Current portion of long-term debt | $ |
81,953 |
$ | 67,398 | |||
| Accounts payable | 282,275 | 290,746 | |||||
| Accrued expenses |
169,586 |
106,094 | |||||
| Total current liabilities |
533,814 |
464,238 | |||||
| LONG-TERM DEBT, less current portion |
2,223,306 |
1,548,051 | |||||
| DEFERRED INCOME TAX LIABILITIES, net |
1,045,727 |
908,852 | |||||
| DEFERRED ITEMS - grants from outside parties | 292,198 | 279,286 | |||||
| OTHER LONG-TERM LIABILITIES | 174,675 | 37,346 | |||||
| TOTAL EQUITY |
2,480,071 |
2,357,980 | |||||
| Total liabilities and equity | $ |
6,749,791 |
$ | 5,595,753 | |||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ |
225,037 |
$ | 260,755 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 188,535 | 157,081 | ||||||
| Stock-based compensation | 14,649 | 12,858 | ||||||
| Excess tax benefits from share-based compensation | (1,477 | ) | (6,221 | ) | ||||
| Deferred income taxes |
33,872 |
70,131 | ||||||
| Net gain on sale of assets | (2,291 | ) | (5,100 | ) | ||||
| Loss on settlement of foreign currency forward purchase contracts | 18,686 | — | ||||||
| Insurance proceeds received | — | 5,527 | ||||||
|
Changes in assets and liabilities which (used) provided cash, net
of effect of |
||||||||
| Accounts receivable, net |
28,905 |
(39,107 | ) | |||||
| Materials and supplies | (4,073 | ) | 2,600 | |||||
| Prepaid expenses and other |
7,462 |
17,451 | ||||||
| Accounts payable and accrued expenses |
(39,881 |
) | 14,703 | |||||
| Other assets and liabilities, net |
5,723 |
786 | ||||||
| Net cash provided by operating activities |
475,147 |
491,464 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (371,504 | ) | (331,499 | ) | ||||
| Grant proceeds from outside parties | 41,742 | 27,980 | ||||||
| Cash paid for acquisitions, net of cash acquired |
(740,237 |
) | (221,451 | ) | ||||
|
Net payment from settlement of foreign currency forward purchase
contracts related |
(18,686 | ) | — | |||||
| Insurance proceeds for the replacement of assets | 10,394 | 8,029 | ||||||
| Proceeds from disposition of property and equipment | 4,018 | 7,096 | ||||||
| Net cash used in investing activities |
(1,074,273 |
) | (509,845 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Principal payments on long-term borrowings, including capital leases | (676,257 | ) | (538,035 | ) | ||||
| Proceeds from issuance of long-term debt | 1,261,640 | 543,300 | ||||||
| Debt amendment costs | (9,622 | ) | (3,880 | ) | ||||
| Proceeds from employee stock purchases | 6,829 | 11,819 | ||||||
| Excess tax benefits from share-based compensation | 1,477 | 6,221 | ||||||
| Treasury stock acquisitions | (3,261 | ) | (4,186 | ) | ||||
| Net cash provided by financing activities | 580,806 | 15,239 | ||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
(5,466 |
) | (7 | ) | ||||
| DECREASE IN CASH AND CASH EQUIVALENTS | (23,786 | ) | (3,149 | ) | ||||
| CASH AND CASH EQUIVALENTS, beginning of period | 59,727 | 62,876 | ||||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 35,941 | $ | 59,727 | ||||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||
| SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||||
| (dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Three Months Ended December 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Amount | % of Revenue | Amount | % of Revenue | |||||||
|
Operating revenues: |
||||||||||
| Freight revenues | $ | 350,513 | 68.1% | $ | 316,415 | 76.1% | ||||
| Freight-related revenues | 138,833 | 27.0% | 74,422 | 17.9% | ||||||
| All other revenues | 25,507 |
|
4.9% |
|
24,790 | 6.0% | ||||
| Total operating revenues | $ | 514,853 | 100.0% | $ | 415,627 | 100.0% | ||||
|
Operating Expense Comparison: |
||||||||||
|
Natural Classification |
||||||||||
| Labor and benefits | $ | 158,878 | 30.8% | $ | 116,324 | 28.0% | ||||
| Equipment rents | 39,680 | 7.7% | 20,864 | 5.0% | ||||||
| Purchased services | 51,056 | 9.9% | 22,851 | 5.5% | ||||||
| Depreciation and amortization | 49,967 | 9.7% | 40,951 | 9.9% | ||||||
| Diesel fuel used in train operations | 30,293 | 5.9% | 33,644 | 8.1% | ||||||
| Electricity used in train operations | 3,184 | 0.6% | 149 | —% | ||||||
| Casualties and insurance | 12,467 | 2.4% | 10,481 | 2.5% | ||||||
| Materials | 24,484 | 4.8% | 21,656 | 5.2% | ||||||
| Trackage rights | 20,870 | 4.1% | 13,322 | 3.2% | ||||||
| Net gain on sale of assets | (310) | (0.1)% | (1,656) | (0.4)% | ||||||
| Other expenses | 29,653 | 5.8% | 23,570 | 5.7% | ||||||
| Total operating expenses | $ | 420,222 | 81.6% | $ | 302,156 | 72.7% | ||||
|
Functional Classification |
||||||||||
| Transportation | $ | 175,316 | 34.1% | $ | 109,839 | 26.3% | ||||
| Maintenance of ways and structures | 52,109 | 10.1% | 43,555 | 10.5% | ||||||
| Maintenance of equipment | 66,538 | 12.9% | 42,315 | 10.2% | ||||||
| General and administrative | 75,119 | 14.6% | 59,258 | 14.3% | ||||||
| Construction costs | 1,483 | 0.3% | 7,894 | 1.9% | ||||||
| Net gain on sale of assets | (310) | (0.1)% | (1,656) | (0.4)% | ||||||
| Depreciation and amortization | 49,967 | 9.7% | 40,951 | 9.9% | ||||||
| Total operating expenses | $ | 420,222 | 81.6% | $ | 302,156 | 72.7% | ||||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
| SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
|
Three Months Ended |
North American |
Australian |
U.K./European |
Total |
||||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||||
| Freight revenues | $ | 226,435 | 75.8 | % | $ | 28,248 | 51.2 | % | $ | 95,830 | 59.5 | % | $ | 350,513 | 68.1 | % | ||||||||||||||
| Freight-related revenues | 56,681 | 19.0 | % | 25,373 | 46.0 | % | 56,779 | 35.3 | % | 138,833 | 27.0 | % | ||||||||||||||||||
| All other revenues | 15,532 | 5.2 | % | 1,568 | 2.8 | % | 8,407 | 5.2 | % | 25,507 | 4.9 | % | ||||||||||||||||||
| Total operating revenues | $ | 298,648 | 100.0 | % | $ | 55,189 | 100.0 | % | $ | 161,016 | 100.0 | % | $ | 514,853 | 100.0 | % | ||||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||||
| Labor and benefits | $ | 94,276 | 31.6 | % | $ | 15,735 | 28.5 | % | $ | 48,867 |
30.3 |
% | $ | 158,878 | 30.8 | % | ||||||||||||||
| Equipment rents | 14,978 | 5.0 | % | 3,009 | 5.5 | % | 21,693 | 13.5 | % | 39,680 | 7.7 | % | ||||||||||||||||||
| Purchased services | 17,374 | 5.8 | % | 3,722 | 6.7 | % | 29,960 | 18.6 | % | 51,056 | 9.9 | % | ||||||||||||||||||
|
Depreciation and |
36,415 | 12.2 | % | 6,654 | 12.1 | % | 6,898 | 4.3 | % | 49,967 | 9.7 | % | ||||||||||||||||||
|
Diesel fuel used in train |
15,404 | 5.2 | % | 5,247 | 9.5 | % | 9,642 | 6.0 | % | 30,293 | 5.9 | % | ||||||||||||||||||
|
Electricity used in train |
— | — | % | — | — | % | 3,184 | 2.0 | % | 3,184 | 0.6 | % | ||||||||||||||||||
| Casualties and insurance | 8,913 | 3.0 | % | 3,035 | 5.5 | % | 519 | 0.3 | % | 12,467 | 2.4 | % | ||||||||||||||||||
| Materials | 12,419 | 4.2 | % | 3,510 | 6.4 | % | 8,555 | 5.3 | % | 24,484 | 4.8 | % | ||||||||||||||||||
| Trackage rights | 5,785 | 1.9 | % | 2,357 | 4.3 | % | 12,728 | 7.9 | % | 20,870 | 4.1 | % | ||||||||||||||||||
| Net gain on sale of assets | (277 | ) | (0.1 | )% | (3 | ) | — | % | (30 | ) | — | % | (310 | ) | (0.1 | )% | ||||||||||||||
| Other expenses | 20,141 | 6.7 | % | 1,414 | 2.5 | % | 8,098 | 5.0 | % | 29,653 | 5.8 | % | ||||||||||||||||||
| Total operating expenses | $ | 225,428 | 75.5 | % | $ | 44,680 | 81.0 | % | $ | 150,114 |
93.2 |
% | $ | 420,222 | 81.6 | % | ||||||||||||||
| Income from operations | $ | 73,220 | $ | 10,509 | $ | 10,902 | $ | 94,631 | ||||||||||||||||||||||
|
Net expenditures for additions |
$ | 61,218 | $ | 11,051 | $ | 12,799 | $ | 85,068 | ||||||||||||||||||||||
|
Three Months Ended |
North American |
Australian |
U.K./European |
Total |
||||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||||
| Freight revenues | $ | 259,345 | 76.7 | % | $ | 57,070 | 78.8 | % | $ | — | — | % | $ | 316,415 | 76.1 | % | ||||||||||||||
| Freight-related revenues | 57,242 | 16.9 | % | 12,219 | 16.9 | % | 4,961 | 100.0 | % | 74,422 | 17.9 | % | ||||||||||||||||||
| All other revenues | 21,698 | 6.4 | % | 3,092 | 4.3 | % | — | — | % | 24,790 | 6.0 | % | ||||||||||||||||||
| Total operating revenues | $ | 338,285 | 100.0 | % | $ | 72,381 | 100.0 | % | $ | 4,961 | 100.0 | % | $ | 415,627 | 100.0 | % | ||||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||||
| Labor and benefits | $ | 98,029 | 29.0 | % | $ | 16,516 | 22.8 | % | $ | 1,779 | 35.9 | % | $ | 116,324 | 28.0 | % | ||||||||||||||
| Equipment rents | 17,758 | 5.2 | % | 2,431 | 3.4 | % | 675 | 13.6 | % | 20,864 | 5.0 | % | ||||||||||||||||||
| Purchased services | 15,838 | 4.7 | % | 6,350 | 8.8 | % | 663 | 13.4 | % | 22,851 | 5.5 | % | ||||||||||||||||||
|
Depreciation and |
33,788 | 10.0 | % | 6,789 | 9.4 | % | 374 | 7.5 | % | 40,951 | 9.9 | % | ||||||||||||||||||
|
Diesel fuel used in train |
28,045 | 8.3 | % | 5,147 | 7.1 | % | 452 | 9.1 | % | 33,644 | 8.1 | % | ||||||||||||||||||
|
Electricity used in train |
— | — | % | — | — | % | 149 | 3.0 | % | 149 | — | % | ||||||||||||||||||
| Casualties and insurance | 8,433 | 2.5 | % | 1,684 | 2.3 | % | 364 | 7.4 | % | 10,481 | 2.5 | % | ||||||||||||||||||
| Materials | 18,826 | 5.5 | % | 2,655 | 3.7 | % | 175 | 3.5 | % | 21,656 | 5.2 | % | ||||||||||||||||||
| Trackage rights | 7,466 | 2.2 | % | 5,184 | 7.2 | % | 672 | 13.5 | % | 13,322 | 3.2 | % | ||||||||||||||||||
| Net gain on sale of assets | (1,436 | ) | (0.4 | )% | (195 | ) | (0.3 | )% | (25 | ) | (0.5 | )% | (1,656 | ) | (0.4 | )% | ||||||||||||||
| Other expenses | 21,271 | 6.3 | % | 2,045 | 2.8 | % | 254 | 5.1 | % | 23,570 | 5.7 | % | ||||||||||||||||||
| Total operating expenses | $ | 248,018 | 73.3 | % | $ | 48,606 | 67.2 | % | $ | 5,532 | 111.5 | % | $ | 302,156 | 72.7 | % | ||||||||||||||
| Income from operations | $ | 90,267 | $ | 23,775 | $ | (571 | ) | $ | 113,471 | |||||||||||||||||||||
|
Net expenditures for additions |
$ | 65,667 | $ | 9,389 | $ | 285 | $ | 75,341 | ||||||||||||||||||||||
| 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 December 31, |
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 | $ | 28,354 | 53,463 | $ | 530 | $ | 4,392 | 10,680 | $ | 411 | $ | 248 | 234 | $ | 1,060 | $ | 32,994 | 64,377 | $ | 513 | |||||||||||||||||||||||
| Autos & Auto Parts | 3,638 | 6,068 | 600 | — | — | — | — | — | 3,638 | 6,068 | 600 | ||||||||||||||||||||||||||||||||
| Chemicals & Plastics | 34,219 | 43,493 | 787 | — | — | — | — | — | — | 34,219 | 43,493 | 787 | |||||||||||||||||||||||||||||||
| Coal & Coke | 19,828 | 53,004 | 374 | — | — | — | 7,428 | 17,711 | 419 | 27,256 | 70,715 | 385 | |||||||||||||||||||||||||||||||
| Food & Kindred Products | 8,664 | 15,270 | 567 | — | — | — | — | — | — | 8,664 | 15,270 | 567 | |||||||||||||||||||||||||||||||
| Intermodal | 2 | 29 | 69 | 17,136 | 15,608 | 1,098 | 70,956 | 215,644 | 329 | 88,094 | 231,281 | 381 | |||||||||||||||||||||||||||||||
| Lumber & Forest Products | 20,062 | 34,684 | 578 |
— |
— |
— | — | — | — | 20,062 | 34,684 | 578 | |||||||||||||||||||||||||||||||
| Metallic Ores | 4,738 | 6,042 | 784 | 4,538 | 3,308 | 1,372 | — | — | — | 9,276 | 9,350 | 992 | |||||||||||||||||||||||||||||||
| Metals | 23,963 | 29,683 | 807 | — | — | — | — | — | — | 23,963 | 29,683 | 807 | |||||||||||||||||||||||||||||||
| Minerals & Stone | 26,996 | 49,724 | 543 | 1,870 | 16,572 | 113 | 15,473 | 42,071 | 368 | 44,339 | 108,367 | 409 | |||||||||||||||||||||||||||||||
| Petroleum Products | 18,167 | 26,605 | 683 | 312 | 77 | 4,052 | — | — | — | 18,479 | 26,682 | 693 | |||||||||||||||||||||||||||||||
| Pulp & Paper | 28,108 | 43,206 | 651 | — | — | — | — | — | — | 28,108 | 43,206 | 651 | |||||||||||||||||||||||||||||||
| Waste | 4,688 | 9,957 | 471 | — | — | — | — | — | — | 4,688 | 9,957 | 471 | |||||||||||||||||||||||||||||||
| Other | 5,008 | 17,000 | 295 | — | — | — | 1,725 | 2,490 | 693 | 6,733 | 19,490 | 345 | |||||||||||||||||||||||||||||||
| Totals | $ | 226,435 | 388,228 | $ | 583 | $ | 28,248 | 46,245 | $ | 611 | $ | 95,830 | 278,150 | $ | 345 | $ | 350,513 | 712,623 | $ | 492 | |||||||||||||||||||||||
|
Three Months Ended December 31, |
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 | $ | 34,511 | 56,612 | $ | 610 | $ | 5,657 | 9,312 | $ | 607 | $ | — | — | $ | — | $ | 40,168 | 65,924 | $ | 609 | |||||||||||||||||||||||
| Autos & Auto Parts | 5,883 | 9,432 | 624 | — | — | — | — | — | — | 5,883 | 9,432 | 624 | |||||||||||||||||||||||||||||||
| Chemicals & Plastics | 34,461 | 43,153 | 799 | — | — | — | — | — | — | 34,461 | 43,153 | 799 | |||||||||||||||||||||||||||||||
| Coal & Coke | 31,469 | 93,047 | 338 | — | — | — | — | — | — | 31,469 | 93,047 | 338 | |||||||||||||||||||||||||||||||
| Food & Kindred Products | 9,383 | 15,937 | 589 | — | — | — | — | — | — | 9,383 | 15,937 | 589 | |||||||||||||||||||||||||||||||
| Intermodal | 57 | 542 | 105 | 22,323 | 16,575 | 1,347 | — | — | — | 22,380 | 17,117 | 1,307 | |||||||||||||||||||||||||||||||
| Lumber & Forest Products | 20,334 | 33,549 | 606 | — |
— |
— | — | — | — | 20,334 | 33,549 | 606 | |||||||||||||||||||||||||||||||
| Metallic Ores | 4,414 | 5,619 | 786 | 26,581 | 14,347 | 1,853 | — | — | — | 30,995 | 19,966 | 1,552 | |||||||||||||||||||||||||||||||
| Metals | 31,744 | 45,122 | 704 | — | — | — | — | — | — | 31,744 | 45,122 | 704 | |||||||||||||||||||||||||||||||
| Minerals & Stone | 31,273 | 51,231 | 610 | 2,141 | 14,047 | 152 | — | — | — | 33,414 | 65,278 | 512 | |||||||||||||||||||||||||||||||
| Petroleum Products | 15,694 | 26,249 | 598 | 368 | 75 | 4,907 | — | — | — | 16,062 | 26,324 | 610 | |||||||||||||||||||||||||||||||
| Pulp & Paper | 29,854 | 44,447 | 672 | — | — | — | — | — | — | 29,854 | 44,447 | 672 | |||||||||||||||||||||||||||||||
| Waste | 4,793 | 10,076 | 476 | — | — | — | — | — | — | 4,793 | 10,076 | 476 | |||||||||||||||||||||||||||||||
| Other | 5,475 | 20,769 | 264 | — | — | — | — | — | — | 5,475 | 20,769 | 264 | |||||||||||||||||||||||||||||||
| Totals | $ | 259,345 | 455,785 | $ | 569 | $ | 57,070 | 54,356 | $ | 1,050 | $ | — | — | $ | — | $ | 316,415 | 510,141 | $ | 620 | |||||||||||||||||||||||
* 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 | ||||||||||||||
| SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||
| (dollars in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||
| 2015 | 2014 | |||||||||||||
| Amount |
% of |
Amount |
% of |
|||||||||||
|
Operating revenues: |
||||||||||||||
| Freight revenues | $ | 1,405,114 | 70.2 | % | $ | 1,251,941 | 76.4 | % | ||||||
| Freight-related revenues | 497,516 | 24.9 | % | 290,787 | 17.7 | % | ||||||||
| All other revenues | 97,771 | 4.9 | % | 96,284 | 5.9 | % | ||||||||
| Total operating revenues | $ | 2,000,401 | 100.0 | % | $ | 1,639,012 | 100.0 | % | ||||||
|
Operating Expense Comparison: |
||||||||||||||
|
Natural Classification |
||||||||||||||
| Labor and benefits | $ | 614,967 | 30.7 | % | $ | 469,503 | 28.7 | % | ||||||
| Equipment rents | 149,825 | 7.5 | % | 82,730 | 5.0 | % | ||||||||
| Purchased services | 186,905 | 9.3 | % | 100,108 | 6.1 | % | ||||||||
| Depreciation and amortization | 188,535 | 9.4 | % | 157,081 | 9.6 | % | ||||||||
| Diesel fuel used in train operations | 132,149 | 6.6 | % | 149,047 | 9.1 | % | ||||||||
| Electricity used in train operations | 13,714 | 0.7 | % | 1,058 | 0.1 | % | ||||||||
| Casualties and insurance | 42,494 | 2.1 | % | 41,552 | 2.5 | % | ||||||||
| Materials | 95,248 | 4.9 | % | 78,366 | 4.8 | % | ||||||||
| Trackage rights | 78,140 | 3.9 | % | 53,783 | 3.3 | % | ||||||||
| Net gain on sale of assets | (2,291 | ) | (0.1 | )% | (5,100 | ) | (0.3 | )% | ||||||
| Other expenses | 116,454 | 5.8 | % | 89,313 | 5.4 | % | ||||||||
| Total operating expenses | $ | 1,616,140 | 80.8 | % | $ | 1,217,441 | 74.3 | % | ||||||
|
Functional Classification |
||||||||||||||
| Transportation | $ | 666,511 | 33.3 | % | $ | 460,051 | 28.1 | % | ||||||
| Maintenance of ways and structures | 203,369 | 10.2 | % | 174,716 | 10.7 | % | ||||||||
| Maintenance of equipment | 260,286 | 13.0 | % | 175,433 | 10.7 | % | ||||||||
| General and administrative | 291,897 | 14.6 | % | 231,725 | 14.1 | % | ||||||||
| Construction costs | 7,833 | 0.4 | % | 23,535 | 1.4 | % | ||||||||
| Net gain on sale of assets | (2,291 | ) | (0.1 | )% | (5,100 | ) | (0.3 | )% | ||||||
| Depreciation and amortization | 188,535 | 9.4 | % | 157,081 | 9.6 | % | ||||||||
| Total operating expenses | $ | 1,616,140 | 80.8 | % | $ | 1,217,441 | 74.3 | % | ||||||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
| SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
|
Twelve Months Ended |
North American |
Australian |
U.K./European |
Total |
||||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||||
| Freight revenues | $ | 949,028 | 76.4 | % | $ | 146,850 | 60.4 | % | $ | 309,236 | 60.0 | % | $ | 1,405,114 | 70.2 | % | ||||||||||||||
| Freight-related revenues | 227,154 | 18.3 | % | 87,616 | 36.1 | % | 182,746 | 35.4 | % | 497,516 | 24.9 | % | ||||||||||||||||||
| All other revenues | 65,633 | 5.3 | % | 8,486 | 3.5 | % | 23,652 | 4.6 | % | 97,771 | 4.9 | % | ||||||||||||||||||
| Total operating revenues | $ | 1,241,815 | 100.0 | % | $ | 242,952 | 100.0 | % | $ | 515,634 | 100.0 | % | $ | 2,000,401 | 100.0 | % | ||||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||||
| Labor and benefits | $ | 397,911 | 32.0 | % | $ | 67,947 | 28.0 | % | $ | 149,109 | 28.9 | % | $ | 614,967 | 30.7 | % | ||||||||||||||
| Equipment rents | 65,918 | 5.3 | % | 12,298 | 5.1 | % | 71,609 | 13.9 | % | 149,825 | 7.5 | % | ||||||||||||||||||
| Purchased services | 63,986 | 5.1 | % | 19,560 | 8.0 | % | 103,359 | 20.0 | % | 186,905 | 9.3 | % | ||||||||||||||||||
|
Depreciation and |
141,814 | 11.4 | % | 27,425 | 11.3 | % | 19,296 | 3.7 | % | 188,535 | 9.4 | % | ||||||||||||||||||
|
Diesel fuel used in train |
75,630 | 6.1 | % | 21,150 | 8.7 | % | 35,369 | 6.9 | % | 132,149 | 6.6 | % | ||||||||||||||||||
|
Electricity used in train |
— | — | % | — | — | % | 13,714 | 2.7 | % | 13,714 | 0.7 | % | ||||||||||||||||||
| Casualties and insurance | 29,574 | 2.4 | % | 8,498 | 3.5 | % | 4,422 | 0.9 | % | 42,494 | 2.1 | % | ||||||||||||||||||
| Materials | 57,808 | 4.7 | % | 11,408 | 4.7 | % | 26,032 | 5.0 | % | 95,248 | 4.9 | % | ||||||||||||||||||
| Trackage rights | 24,601 | 2.0 | % | 13,234 | 5.4 | % | 40,305 | 7.8 | % | 78,140 | 3.9 | % | ||||||||||||||||||
| Net gain on sale of assets | (2,001 | ) | (0.2 | )% | (48 | ) | — | % | (242 | ) | — | % | (2,291 | ) | (0.1 | )% | ||||||||||||||
| Other expenses | 89,088 | 7.2 | % | 6,638 | 2.7 | % | 20,728 | 4.0 | % | 116,454 | 5.8 | % | ||||||||||||||||||
| Total operating expenses | $ | 944,329 | 76.0 | % | $ | 188,110 | 77.4 | % | $ | 483,701 | 93.8 | % | $ | 1,616,140 | 80.8 | % | ||||||||||||||
| Income from operations | $ | 297,486 | $ | 54,842 | $ | 31,933 | $ | 384,261 | ||||||||||||||||||||||
|
Net expenditures for additions |
$ | 266,548 | $ | 31,179 | $ | 32,035 | $ | 329,762 | ||||||||||||||||||||||
|
Twelve Months Ended |
North American |
Australian |
U.K./European |
Total |
||||||||||||||||||||||||||
| Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||||
| Freight revenues | $ | 1,008,236 | 77.3 | % | $ | 243,705 | 77.8 | % | $ | — | — | % | $ | 1,251,941 | 76.4 | % | ||||||||||||||
| Freight-related revenues | 214,388 | 16.4 | % | 55,461 | 17.7 | % | 20,938 | 99.8 | % | 290,787 | 17.7 | % | ||||||||||||||||||
| All other revenues | 82,137 | 6.3 | % | 14,104 | 4.5 | % | 43 | 0.2 | % | 96,284 | 5.9 | % | ||||||||||||||||||
| Total operating revenues | $ | 1,304,761 | 100.0 | % | $ | 313,270 | 100.0 | % | $ | 20,981 | 100.0 | % | $ | 1,639,012 | 100.0 | % | ||||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||||
| Labor and benefits | $ | 390,755 | 29.9 | % | $ | 71,216 | 22.7 | % | $ | 7,532 | 35.9 | % | $ | 469,503 | 28.7 | % | ||||||||||||||
| Equipment rents | 70,150 | 5.4 | % | 9,973 | 3.1 | % | 2,607 | 12.4 | % | 82,730 | 5.0 | % | ||||||||||||||||||
| Purchased services | 62,826 | 4.8 | % | 34,092 | 10.9 | % | 3,190 | 15.2 | % | 100,108 | 6.1 | % | ||||||||||||||||||
|
Depreciation and |
127,421 | 9.8 | % | 28,095 | 9.0 | % | 1,565 | 7.5 | % | 157,081 | 9.6 | % | ||||||||||||||||||
|
Diesel fuel used in train |
120,729 | 9.3 | % | 26,346 | 8.4 | % | 1,972 | 9.4 | % | 149,047 | 9.1 | % | ||||||||||||||||||
|
Electricity used in train |
— | — | % | — | — | % | 1,058 | 5.0 | % | 1,058 | 0.1 | % | ||||||||||||||||||
| Casualties and insurance | 30,124 | 2.3 | % | 10,899 | 3.5 | % | 529 | 2.5 | % | 41,552 | 2.5 | % | ||||||||||||||||||
| Materials | 69,840 | 5.4 | % | 7,656 | 2.4 | % | 870 | 4.1 | % | 78,366 | 4.8 | % | ||||||||||||||||||
| Trackage rights | 28,928 | 2.2 | % | 22,095 | 7.1 | % | 2,760 | 13.2 | % | 53,783 | 3.3 | % | ||||||||||||||||||
| Net gain on sale of assets | (4,582 | ) | (0.4 | )% | (432 | ) | (0.1 | )% | (86 | ) | (0.4 | )% | (5,100 | ) | (0.3 | )% | ||||||||||||||
| Other expenses | 75,376 | 5.8 | % | 12,934 | 4.1 | % | 1,003 | 4.8 | % | 89,313 | 5.4 | % | ||||||||||||||||||
| Total operating expenses | $ | 971,567 | 74.5 | % | $ | 222,874 | 71.1 | % | $ | 23,000 | 109.6 | % | $ | 1,217,441 | 74.3 | % | ||||||||||||||
| Income/(loss) from operations | $ | 333,194 | $ | 90,396 | $ | (2,019 | ) | $ | 421,571 | |||||||||||||||||||||
|
Net expenditures for additions |
$ | 277,725 | $ | 24,930 | $ | 864 | $ | 303,519 | ||||||||||||||||||||||
| 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) | |||||||||||||||||||||||||||||||||||||||||||
|
Twelve Months Ended |
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 | $ | 123,116 | 216,500 | $ | 569 | $ | 22,614 | 51,534 | $ | 439 | $ | 520 | 610 | $ | 852 | $ | 146,250 | 268,644 | $ | 544 | |||||||||||||||||||||||
| Autos & Auto Parts | 17,313 | 27,738 | 624 | — | — | — | — | — | — | 17,313 | 27,738 | 624 | |||||||||||||||||||||||||||||||
| Chemicals & Plastics | 140,400 | 179,002 | 784 | — | — | — | — | — | — | 140,400 | 179,002 | 784 | |||||||||||||||||||||||||||||||
| Coal & Coke | 93,541 | 267,258 | 350 | — | — | — | 23,896 | 60,873 | 393 | 117,437 | 328,131 | 358 | |||||||||||||||||||||||||||||||
| Food & Kindred Products | 34,899 | 61,145 | 571 | — | — | — | — | — | — | 34,899 | 61,145 | 571 | |||||||||||||||||||||||||||||||
| Intermodal | 9 | 107 | 84 | 71,429 | 61,659 | 1,158 | 227,526 | 692,304 | 329 | 298,964 | 754,070 | 396 | |||||||||||||||||||||||||||||||
| Lumber & Forest Products | 80,209 | 137,009 | 585 | — | — | — | — | — | — | 80,209 | 137,009 | 585 | |||||||||||||||||||||||||||||||
| Metallic Ores | 19,756 | 24,812 | 796 | 44,204 | 26,915 | 1,642 | — | — | — | 63,960 | 51,727 | 1,236 | |||||||||||||||||||||||||||||||
| Metals | 103,898 | 133,915 | 776 | — | — | — | — | — | — | 103,898 | 133,915 | 776 | |||||||||||||||||||||||||||||||
| Minerals & Stone | 116,537 | 209,957 | 555 | 7,306 | 60,490 | 121 | 52,596 | 133,656 | 394 | 176,439 | 404,103 | 437 | |||||||||||||||||||||||||||||||
| Petroleum Products | 67,584 | 102,759 | 658 | 1,297 | 307 | 4,225 | — | — | — | 68,881 | 103,066 | 668 | |||||||||||||||||||||||||||||||
| Pulp & Paper | 113,830 | 176,543 | 645 | — | — | — | — | — | — | 113,830 | 176,543 | 645 | |||||||||||||||||||||||||||||||
| Waste | 18,078 | 38,927 | 464 | — | — | — | — | — | — | 18,078 | 38,927 | 464 | |||||||||||||||||||||||||||||||
| Other | 19,858 | 68,728 | 289 | — | — | — | 4,698 | 8,682 | 541 | 24,556 | 77,410 | 317 | |||||||||||||||||||||||||||||||
| Totals | $ | 949,028 | 1,644,400 | $ | 577 | $ | 146,850 | 200,905 | $ | 731 | $ | 309,236 | 896,125 | $ | 345 | $ | 1,405,114 | 2,741,430 | $ | 513 | |||||||||||||||||||||||
|
Twelve Months Ended |
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 | $ | 121,265 | 210,316 | $ | 577 | $ | 32,003 | 54,184 | $ | 591 | $ | — | — | $ | — | $ | 153,268 | 264,500 | $ | 579 | |||||||||||||||||||||||
| Autos & Auto Parts | 23,619 | 34,470 | 685 | — | — | — | — | — | — | 23,619 | 34,470 | 685 | |||||||||||||||||||||||||||||||
| Chemicals & Plastics | 136,492 | 169,160 | 807 | — | — | — | — | — | — | 136,492 | 169,160 | 807 | |||||||||||||||||||||||||||||||
| Coal & Coke | 126,377 | 355,762 | 355 | — | — | — | — | — | — | 126,377 | 355,762 | 355 | |||||||||||||||||||||||||||||||
| Food & Kindred Products | 35,534 | 60,741 | 585 | — | — | — | — | — | — | 35,534 | 60,741 | 585 | |||||||||||||||||||||||||||||||
| Intermodal | 390 | 3,442 | 113 | 91,895 | 63,475 | 1,448 | — | — | — | 92,285 | 66,917 | 1,379 | |||||||||||||||||||||||||||||||
| Lumber & Forest Products | 82,271 | 136,768 | 602 | — | — | — | — | — | — | 82,271 | 136,768 | 602 | |||||||||||||||||||||||||||||||
| Metallic Ores | 17,795 | 22,123 | 804 | 109,439 | 56,542 | 1,936 | — | — | — | 127,234 | 78,665 | 1,617 | |||||||||||||||||||||||||||||||
| Metals | 131,161 | 184,264 | 712 | — | — | — | — | — | — | 131,161 | 184,264 | 712 | |||||||||||||||||||||||||||||||
| Minerals & Stone | 112,999 | 194,335 | 581 | 8,921 | 53,407 | 167 | — | — | — | 121,920 | 247,742 | 492 | |||||||||||||||||||||||||||||||
| Petroleum Products | 63,051 | 104,672 | 602 | 1,447 | 286 | 5,059 | — | — | — | 64,498 | 104,958 | 615 | |||||||||||||||||||||||||||||||
| Pulp & Paper | 117,299 | 174,942 | 671 | — | — | — | — | — | — | 117,299 | 174,942 | 671 | |||||||||||||||||||||||||||||||
| Waste | 18,449 | 39,994 | 461 | — | — | — | — | — | — | 18,449 | 39,994 | 461 | |||||||||||||||||||||||||||||||
| Other | 21,534 | 88,168 | 244 | — | — | — | — | — | — | 21,534 | 88,168 | 244 | |||||||||||||||||||||||||||||||
| Totals | $ | 1,008,236 | 1,779,157 | $ | 567 | $ | 243,705 | 227,894 | $ | 1,069 | $ | — | — | $ | — | $ | 1,251,941 | 2,007,051 | $ | 624 | |||||||||||||||||||||||
* 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 income from operations (adjusted operating income), adjusted operating ratio, adjusted net income, adjusted diluted earnings per common share and free cash flow, 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 free cash flow, an important financial measure of how well G&W is managing its assets and 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 free cash flow measure 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 percentages and per share amounts).
Reconciliations of Non-GAAP Financial Measures
Adjusted Income from Operations and Adjusted Operating Ratios
|
|
||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2015 | 2014 | |||||||
| Operating revenues | $ | 514.9 | $ | 415.6 | ||||
| Operating expenses | 420.2 | 302.2 | ||||||
| Income from operations (a) | $ | 94.6 | $ | 113.5 | ||||
| Operating ratio (b) | 81.6 | % | 72.7 | % | ||||
| Operating expenses | $ | 420.2 | $ | 302.2 | ||||
| Business development and related costs | (2.5 | ) | (1.6 | ) | ||||
| Net gain on sale of assets | 0.3 | 1.7 | ||||||
|
Out of period benefit of final allocation of fair values to
Freightliner's |
|
2.6 |
— |
|||||
| Adjusted operating expenses | $ | 420.6 | $ | 302.2 | ||||
| Adjusted income from operations | $ | 94.2 | $ | 113.4 | ||||
| Adjusted operating ratio | 81.7 | % | 72.7 | % | ||||
| (a) | Income from operations 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 Earnings Per Common Share
| Three Months Ended December 31, 2015 | Net Income |
Diluted |
||||||
| As reported | $ |
84.9 |
$ |
1.47 |
||||
| Add back certain items: | ||||||||
| Business development and related costs | 1.7 | 0.03 | ||||||
| Net gain on sale of assets | (0.2 | ) | — | |||||
|
Out of period benefit of final allocation of fair values to Freightliner's assets & liabilities |
(1.6 | ) | (0.03 | ) | ||||
| Impact of reduction in U.K. effective tax rate |
(9.7 |
) |
(0.17 |
) | ||||
| 2015 Short Line Tax Credit | (27.4 | ) | (0.47 | ) | ||||
| Application of full year effective tax rate to Q1 - Q3 2015 results | 1.3 | 0.02 | ||||||
| As adjusted | $ | 49.1 | $ | 0.85 | ||||
| Three Months Ended December 31, 2014 | Net Income |
Diluted |
||||||
| As reported | $ | 87.4 | $ | 1.53 | ||||
| Add back certain items: | ||||||||
| Business development and related costs | 1.0 | 0.02 | ||||||
| Net gain on sale of assets | (1.0 | ) | (0.02 | ) | ||||
| 2014 Short Line Tax Credit | (27.0 | ) | (0.47 | ) | ||||
| Application of full year effective tax rate to Q1 - Q3 2014 results | 3.5 | 0.06 | ||||||
| As adjusted | $ | 63.8 | $ | 1.12 | ||||
| FX | 0.05 | |||||||
| As adjusted (excluding FX) | $ | 1.07 | ||||||
| Twelve Months Ended December 31, 2015 | Net Income |
Diluted |
||||||
| As reported | $ |
225.0 |
$ | 3.90 | ||||
| Add back certain items: | ||||||||
| Business development and related costs | 5.6 | 0.10 | ||||||
| Freightliner acquisition-related costs | 9.5 | 0.16 | ||||||
| Net gain on sale of assets | (1.7 | ) | (0.03 | ) | ||||
|
Loss on settlement of Freightliner acquisition-related foreign
currency |
11.6 | 0.20 | ||||||
| Impact of reduction in U.K. effective tax rate |
(9.7 |
) |
(0.17 |
) | ||||
| As adjusted | $ | 240.3 | $ | 4.15 | ||||
| 2015 Short Line Tax Credit | (27.4 | ) | (0.47 | ) | ||||
| As adjusted (excluding 2015 Short Line Tax Credit) | $ | 212.9 | $ | 3.68 | ||||
| Twelve Months Ended December 31, 2014 | Net Income |
Diluted |
||||||
| As reported | $ | 260.8 | $ | 4.58 | ||||
| Add back certain items: | ||||||||
| Business development and related costs | 3.2 | 0.06 | ||||||
| Credit facility refinancing costs | 2.9 | 0.05 | ||||||
| Net gain on sale of assets | (3.5 | ) | (0.06 | ) | ||||
| RailAmerica-related tax benefit | (3.9 | ) | (0.07 | ) | ||||
| Adjustment for tax returns from previous fiscal year | 0.7 | 0.01 | ||||||
| As adjusted | $ | 260.2 | $ | 4.57 | ||||
| 2014 Short Line Tax Credit | (27.0 | ) | (0.47 | ) | ||||
| As adjusted (excluding 2014 Short Line Tax Credit) | $ | 233.3 | $ | 4.10 | ||||
Free Cash Flow
|
Twelve Months Ended |
|||||||
|
2015 |
2014 | ||||||
| Net cash provided by operating activities | $ |
475.1 |
$ | 491.5 | |||
| Net cash used in investing activities (a) |
(1,074.3 |
) | (509.8 | ) | |||
| Net cash used for acquisitions |
792.2 |
221.5 | |||||
| Free cash flow | $ |
193.0 |
$ | 203.1 | |||
|
(a) The twelve months ended December 31, 2015 and 2014 includes $65.6 million and $92.9 million, respectively, of new business investments. |
|||||||
|
Twelve |
|||||||
| Net cash provided by operating activities | $ |
475 |
|||||
| Net cash used in investing activities, excluding new business investments |
(225 |
) | |||||
| Net cash used for acquisitions | — | ||||||
| Free cash flow | $ |
250 |
|||||
| New business investments | 35 | ||||||
| Free cash flow before new business investments | $ |
285 |
|||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160209005722/en/
G&W Corporate Communications
Michael Williams,
1-203-202-8900
mwilliams@gwrr.com
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