Genesee & Wyoming Inc. (G&W) GWR
Third Quarter 2017 Consolidated Highlights Compared with Third Quarter 2016
- Operating revenues increased 15.2% to $576.9 million from $501.0 million.
- Reported operating income increased 21.4% to $111.5 million; Adjusted operating income increased 20.3% to $115.9 million.(1)
- Reported diluted earnings per common share (EPS) decreased 18.4% to $0.80 with 62.5 million weighted average shares outstanding, compared with reported diluted EPS in the third quarter of 2016 of $0.98 with 58.2 million weighted average shares outstanding; Adjusted diluted EPS decreased 1.2% to $0.81.(1)
- Net cash provided by operating activities increased $46.8 million; Free cash flow and Free cash flow attributable to G&W increased $42.8 million.(1)
Third Quarter Segment Highlights
- North America: Operating revenues from G&W's North American Operations increased 2.8% to $318.9 million from $310.2 million, primarily due to new operations. Reported operating income from G&W's North American Operations decreased 5.8% to $82.1 million; Adjusted operating income from G&W's North American Operations decreased 5.9% to $83.0 million.(1)
- Australia: Operating revenues from G&W's 51.1% owned Australian Operations increased 50.1% to $81.3 million from $54.2 million, primarily due to new operations as well as an increase in metallic ores revenues and agricultural products revenues. Reported operating income from G&W's Australian Operations increased to $22.3 million from $4.4 million; Adjusted operating income from G&W's Australian Operations increased to $21.8 million from $7.4 million.(1)
- U.K./Europe: Operating revenues from G&W's U.K./European Operations increased 29.3% to $176.7 million from $136.7 million, primarily due to new operations. Reported operating income from G&W's U.K./European Operations increased to $7.1 million from $0.3 million; Adjusted operating income from G&W's U.K./European Operations increased to $11.0 million from $0.7 million.(1)
Jack Hellmann, Chairman, President and CEO of G&W commented, "In the third quarter of 2017, we reported financial results that were modestly weaker than expected, with reported diluted EPS of $0.80 and adjusted diluted EPS of $0.81. In North America, our same railroad shipments declined 1.9% in the third quarter, primarily due to lower agricultural products carloads caused by drought in the Midwest. Overall we were pleased with the performance of our North American operating team in the third quarter as we successfully navigated through two hurricanes and related precautionary shutdowns of several short lines. In addition, we completed the formation of our CG Railway 50-50 joint venture through which we now provide rail ferry service from Mobile, Alabama to Coatzacoalcos, Mexico."(1)
"In the U.K./Europe, the turn-around in our financial performance was right on target and business conditions have continued to improve. In Australia, although shipments of coal were disrupted by strikes at certain customer mines in the Hunter Valley in the third quarter, the structure of our contract mitigated much of the financial impact and we also commenced spot movements of coal for new customers."
Mr. Hellmann continued, "Our outlook for G&W remains positive. In North America, although we continue to face weather-driven variability in our grain and coal shipments, broader economic activity is solid and we expect to benefit from a tightening trucking market. In Australia, we are pursuing multiple new projects amidst an improved commodity price environment. In the U.K., multiple revenue and efficiency measures have taken effect and we see a good peak season for intermodal shipments in the months ahead. Finally, we continue to generate strong free cash flow and to evaluate a range of acquisition and investment opportunities across our global footprint of railroads."
Financial Results
G&W's operating revenues increased $75.9 million, or 15.2%, to $576.9 million in the third quarter of 2017, compared with $501.0 million in the third quarter of 2016. G&W's operating income in the third quarter of 2017 was $111.5 million, compared with $91.9 million in the third quarter of 2016. G&W's adjusted operating income in the third quarter of 2017 was $115.9 million, compared with $96.4 million in the third quarter of 2016.(1)
Reported net income attributable to G&W in the third quarter of 2017 was $50.2 million, compared with reported net income of $56.8 million in the third quarter of 2016. Excluding the net impact of certain items affecting comparability between periods discussed below, G&W's adjusted net income in the third quarter of 2017 was $50.6 million, compared with $47.9 million in the third quarter of 2016.(1)
G&W's reported diluted EPS in the third quarter of 2017 were $0.80 with 62.5 million weighted average shares outstanding, compared with reported diluted EPS in the third quarter of 2016 of $0.98 with 58.2 million weighted average shares outstanding. G&W's adjusted diluted EPS in the third quarter of 2017 were $0.81 with 62.5 million weighted average shares outstanding, compared with adjusted diluted EPS in the third quarter of 2016 of $0.82 with 58.2 million weighted average shares outstanding.(1)
Impact of Glencore Rail (NSW) Pty Limited (GRail) Acquisition on G&W Financial Presentation
In conjunction with the December 1, 2016 acquisition of GRail, G&W issued a 48.9% equity stake in G&W's Australian subsidiary, G&W Australia Holdings LP (GWA), the holding company for all of G&W's Australian businesses, to Macquarie Infrastructure and Real Assets (MIRA). G&W retained a 51.1% interest in GWA and continues to consolidate 100% of GWA in its financial statements and reports a noncontrolling interest for MIRA's 48.9% equity ownership. As a result, G&W's third quarter 2017 operating income includes 100% of the Australian business, while net income attributable to G&W reflects its 51.1% ownership position in the Australian business.
Prior to the GRail acquisition, G&W's Australian Operations provided rail operator services to GRail, which were recorded as freight-related revenues. These freight-related services continued post acquisition, but are eliminated in consolidation. Revenues from the GRail acquisition are now included in G&W's consolidated freight revenues from new operations.
Items Affecting Comparability
In the third quarter of 2017 and 2016, 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, 2017 |
||||||||||||
| Corporate development and related costs | $ | (1.7 | ) | $ | (1.4 | ) | $ | (0.02 | ) | |||
| Restructuring costs | $ | (2.6 | ) | $ | (2.2 | ) | $ | (0.04 | ) | |||
| Unrecognized tax benefits | $ | — | $ | 3.3 | $ | 0.05 | ||||||
|
Three Months Ended September 30, 2016 |
||||||||||||
| Corporate development and related costs | $ | (4.3 | ) | $ | (3.1 | ) | $ | (0.05 | ) | |||
| Restructuring costs | $ | (0.2 | ) | $ | (0.2 | ) | $ | — | ||||
| Impact of reduction in U.K. tax rate | $ | — | $ | 4.3 | $ | 0.07 | ||||||
| Q3 2016 Short Line Tax Credit | $ | — | $ | 7.8 | $ | 0.13 | ||||||
In the third quarter of 2017, G&W's results included restructuring costs of $2.6 million, primarily in G&W's U.K./Europe 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.
In the third quarter of 2016, G&W's results included corporate development and related costs of $4.3 million, primarily associated with the GRail and Providence and Worcester acquisitions, as well as restructuring costs of $0.2 million, primarily associated with G&W's U.K./Europe Region. The third quarter of 2016 also included an income tax benefit of $7.8 million associated with the United States Short Line Tax Credit, which expired on December 31, 2016, as well as an income tax benefit of $4.3 million associated with a reduction in the U.K. income tax rate, which was enacted in September 2016.
Third Quarter Results by Segment
Operating revenues from G&W's North American Operations increased $8.7 million, or 2.8%, to $318.9 million in the third quarter of 2017, compared with $310.2 million in the third quarter of 2016. North American Operations revenues increased primarily due to $9.7 million from new operations.
North American Operations traffic increased 5,698 carloads, or 1.4%, to 407,697 carloads in the third quarter of 2017. Excluding 13,366 carloads from new operations, same railroad traffic decreased 7,668 carloads, or 1.9%. The traffic decrease was principally due to decreases of 6,896 carloads of agricultural products traffic (primarily in the Central, Midwest and Western regions), 2,164 carloads of coal and coke traffic (primarily in the Western and Midwest regions) and 1,454 carloads of food and kindred products traffic (primarily in the Western Region), partially offset by increases of 1,844 carloads of autos and auto parts traffic (primarily in the Midwest and Western regions) and 1,669 carloads of metals traffic (primarily in the Northeast Region). All remaining traffic decreased by a net 667 carloads.
G&W's North American Operations had operating income of $82.1 million in the third quarter of 2017, compared with $87.2 million in the third quarter of 2016. The operating ratio for North American Operations was 74.3% in the third quarter of 2017, compared with an operating ratio of 71.9% in the third quarter of 2016. Adjusted operating income from G&W's North American Operations in the third quarter of 2017 was $83.0 million, compared with adjusted operating income of $88.3 million in the third quarter of 2016. The adjusted operating ratio for North American Operations was 74.0% in the third quarter of 2017, compared with an adjusted operating ratio of 71.5% in the third quarter of 2016.(1)
Operating revenues from G&W's Australian Operations increased $27.1 million, or 50.1%, to $81.3 million in the third quarter of 2017, compared with $54.2 million in the third quarter of 2016. Excluding $17.7 million of net revenues from new operations and a $2.2 million increase due to the impact of foreign currency appreciation, Australian Operations same railroad revenues increased $7.2 million, or 12.7%, primarily due to an increase in metallic ores and agricultural products freight revenues.(2)
Australian Operations traffic increased 80,119 carloads to 123,651 carloads in the third quarter of 2017. Excluding 81,142 carloads from new operations, same railroad traffic declined 1,023 carloads, or 2.3% in the third quarter of 2017, compared with the third quarter of 2016. The traffic decrease was principally due to a decrease of 9,079 carloads of minerals and stone traffic, partially offset by increases of 4,539 carloads of agricultural products traffic and 3,508 carloads of metallic ores traffic. All remaining traffic increased by a net nine carloads.
G&W's Australian Operations had operating income of $22.3 million in the third quarter of 2017, compared with $4.4 million in the third quarter of 2016. The operating ratio for Australian Operations was 72.6% in the third quarter of 2017, compared with an operating ratio of 91.9% in the third quarter of 2016. Adjusted operating income from G&W's Australian Operations was $21.8 million in the third quarter of 2017, compared with adjusted operating income of $7.4 million in the third quarter of 2016. The adjusted operating ratio for Australian Operations was 73.2% in the third quarter of 2017, compared with an adjusted operating ratio of 86.4% in the third quarter of 2016.(1)
Operating revenues from G&W's U.K./European Operations increased $40.1 million, or 29.3%, to $176.7 million in the third quarter of 2017, compared with $136.7 million in the third quarter of 2016. Excluding $39.2 million from new operations and a $2.1 million increase due to the impact of foreign currency appreciation, U.K./European same railroad revenues decreased $1.3 million, or 0.9%, primarily due to a decrease in Continental Europe intermodal revenues following the discontinuation of certain intermodal train services as part of the restructuring of ERS Railways B.V. (ERS) in the first half of 2017 and decreased U.K. infrastructure revenues, partially offset by increased crewing revenues.(2)
U.K./European Operations traffic decreased 11,503 carloads, or 3.9%, to 282,780 carloads in the third quarter of 2017. The traffic decrease was principally due to decreases of 9,996 carloads of intermodal traffic (primarily in Continental Europe) and 5,478 carloads of coal and coke traffic (primarily in the U.K.), partially offset by an increase of 3,846 carloads of minerals and stone traffic (primarily in Poland). All remaining traffic increased by 125 carloads.
G&W's U.K./European Operations had operating income of $7.1 million in the third quarter of 2017, compared with $0.3 million in the third quarter of 2016. The operating ratio for U.K./European Operations was 96.0% in the third quarter of 2017, compared with an operating ratio of 99.8% in the third quarter of 2016. Adjusted operating income from G&W's U.K./European Operations was $11.0 million in the third quarter of 2017, compared with adjusted operating income of $0.7 million in the third quarter of 2016. The adjusted operating ratio for U.K./European Operations was 93.8% in the third quarter of 2017, compared with an adjusted operating ratio of 99.5% in the third quarter of 2016.(1)
Free Cash Flow and Free Cash Flow Attributable to G&W (1)
G&W's free cash flow and free cash flow attributable to G&W for the nine months ended September 30, 2017 and 2016 was as follows (in millions):
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Net cash provided by operating activities | $ | 350.4 | $ | 303.6 | ||||
|
Net cash used in investing activities, excluding new business |
(229.9 | ) | (108.7 | ) | ||||
| Net cash used for acquisitions/divestitures(a) | 113.0 | 1.3 | ||||||
| Free cash flow before new business investments | 233.4 | 196.2 | ||||||
| New business investments, net of grants from outside parties | (3.0 | ) | (8.6 | ) | ||||
| Free cash flow and free cash flow attributable to G&W(1)(b) | $ | 230.4 | $ | 187.6 | ||||
| (a) | The 2017 period primarily consisted of net cash used for the acquisitions of Pentalver, Heart of Georgia Railroad, Inc. (HOG) and a 50% joint venture in CG Railway, LLC (CGR) as well as $7.5 million in cash paid for incremental expenses related to the purchase and integration of these acquisitions, partially offset by $2.9 million of proceeds received from a working capital adjustment related to the GRail acquisition and $2.1 million of proceeds from the sale of a noncontrolling interest in North America. | |
| (b) | Free cash flow attributable to G&W is defined as Free cash flow less any distributions made to noncontrolling interest (MIRA 48.9% of GWA). | |
Conference Call and Webcast Details
As previously announced, G&W's conference call to discuss financial results for the third quarter of 2017 will be held on Tuesday, October 31, 2017, at 11 a.m. EDT. The dial-in number for the teleconference in the U.S. is (800) 230-1059; outside the U.S. is (612) 234-9959, 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 31, 2017, by dialing (800) 475-6701 (or outside the U.S., dial 320-365-3844). The access code is 405460.
About G&W
G&W owns or leases 122 freight railroads organized in nine locally managed operating regions with 8,000 employees serving 3,000 customers. During the third quarter of 2017, our Mountain West Region railroads were consolidated into our Central and Pacific regions, and our Pacific Region was renamed the Western Region. This consolidation reduced our number of operating regions from ten to nine.
- G&W's seven North American regions serve 41 U.S. states and four Canadian provinces and include 115 short line and regional freight railroads with more than 13,000 track-miles.
- G&W's Australia Region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line. The Australia Region is 51.1% owned by G&W and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
- G&W's U.K./Europe Region includes the U.K.'s largest rail maritime intermodal operator and second-largest freight rail provider, as well as regional services in Continental Europe.
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 SEC.
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, our business and our performance, 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 that 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 others including, but not limited to, those noted in our 2016 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), free cash flow and free cash flow attributable to G&W 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, 2017 AND 2016 | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| OPERATING REVENUES | $ | 576,927 | $ | 501,002 | $ | 1,636,468 | $ | 1,484,993 | ||||||||
| OPERATING EXPENSES | 465,438 | 409,151 | 1,346,185 | 1,248,952 | ||||||||||||
| OPERATING INCOME | 111,489 | 91,851 | 290,283 | 236,041 | ||||||||||||
| INTEREST INCOME | 463 | 416 | 1,271 | 827 | ||||||||||||
| INTEREST EXPENSE | (28,281 | ) | (17,333 | ) | (80,431 | ) | (53,049 | ) | ||||||||
| OTHER INCOME/(LOSS), NET | 221 | 1,494 | (289 | ) | 2,947 | |||||||||||
| INCOME BEFORE INCOME TAXES | 83,892 | 76,428 | 210,834 | 186,766 | ||||||||||||
| PROVISION FOR INCOME TAXES | (30,507 | ) | (19,643 | ) | (82,032 | ) | (54,563 | ) | ||||||||
| NET INCOME | $ | 53,385 | $ | 56,785 | $ | 128,802 | $ | 132,203 | ||||||||
|
LESS: NET INCOME ATTRIBUTABLE TO |
3,145 | — | 6,317 | — | ||||||||||||
|
NET INCOME ATTRIBUTABLE TO GENESEE & |
$ | 50,240 | $ | 56,785 | $ | 122,485 | $ | 132,203 | ||||||||
|
BASIC EARNINGS PER COMMON SHARE |
$ | 0.82 | $ | 0.99 | $ | 1.99 | $ | 2.31 | ||||||||
| WEIGHTED AVERAGE SHARES - BASIC | 61,629 | 57,266 | 61,518 | 57,160 | ||||||||||||
|
DILUTED EARNINGS PER COMMON SHARE |
$ | 0.80 | $ | 0.98 | $ | 1.96 | $ | 2.28 | ||||||||
| WEIGHTED AVERAGE SHARES - DILUTED | 62,477 | 58,180 | 62,399 | 58,083 | ||||||||||||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| AS OF SEPTEMBER 30, 2017 AND DECEMBER 31, 2016 | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| September 30, | December 31, | ||||||
| 2017 | 2016 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 80,277 | $ | 32,319 | |||
| Accounts receivable, net | 415,802 | 363,923 | |||||
| Materials and supplies | 55,368 | 43,621 | |||||
| Prepaid expenses and other | 39,464 | 45,475 | |||||
| Total current assets | 590,911 | 485,338 | |||||
| PROPERTY AND EQUIPMENT, net | 4,628,894 | 4,503,319 | |||||
| GOODWILL | 1,187,189 | 1,125,596 | |||||
| INTANGIBLE ASSETS, net | 1,575,900 | 1,472,376 | |||||
| DEFERRED INCOME TAX ASSETS, net | 3,120 | 2,671 | |||||
| OTHER ASSETS | 43,154 | 45,658 | |||||
| Total assets | $ | 8,029,168 | $ | 7,634,958 | |||
| LIABILITIES AND EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Current portion of long-term debt | $ | 31,139 | $ | 52,538 | |||
| Accounts payable | 254,555 | 266,867 | |||||
| Accrued expenses | 168,168 | 159,705 | |||||
| Total current liabilities | 453,862 | 479,110 | |||||
| LONG-TERM DEBT, less current portion | 2,353,524 | 2,306,915 | |||||
| DEFERRED INCOME TAX LIABILITIES, net | 1,252,499 | 1,162,221 | |||||
| DEFERRED ITEMS - grants from outside parties | 315,113 | 301,383 | |||||
| OTHER LONG-TERM LIABILITIES | 220,491 | 198,208 | |||||
| TOTAL EQUITY | 3,433,679 | 3,187,121 | |||||
| Total liabilities and equity | $ | 8,029,168 | $ | 7,634,958 | |||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 128,802 | $ | 132,203 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 186,509 | 151,095 | ||||||
| Stock-based compensation | 13,354 | 13,835 | ||||||
| Deferred income taxes | 51,231 | 25,088 | ||||||
| Net (gain)/loss on sale and impairment of assets | (1,096 | ) | 11,993 | |||||
|
Changes in assets and liabilities which provided/(used) cash, net
of effect of |
||||||||
| Accounts receivable, net | (18,020 | ) | (10,731 | ) | ||||
| Materials and supplies | 8,998 | (2,642 | ) | |||||
| Prepaid expenses and other | 14,257 | (1,930 | ) | |||||
| Accounts payable and accrued expenses | (41,529 | ) | (29,484 | ) | ||||
| Other assets and liabilities, net | 7,883 | 14,156 | ||||||
| Net cash provided by operating activities | 350,389 | 303,583 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (149,105 | ) | (159,523 | ) | ||||
| Grant proceeds from outside parties | 15,998 | 29,952 | ||||||
| Cash paid for acquisitions, net of cash acquired | (107,586 | ) | — | |||||
| Proceeds from the sale of investment | 2,100 | — | ||||||
| Insurance proceeds for the replacement of assets | 1,406 | 10,319 | ||||||
| Proceeds from disposition of property and equipment | 4,238 | 2,003 | ||||||
| Net cash used in investing activities | (232,949 | ) | (117,249 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Principal payments on revolving line-of-credit, long-term debt and capital leases | (498,925 | ) | (501,087 | ) | ||||
| Proceeds from revolving line-of-credit and long-term borrowings | 418,735 | 300,495 | ||||||
| Proceeds from employee stock purchases | 8,003 | 5,969 | ||||||
| Treasury stock purchases | (3,275 | ) | (3,065 | ) | ||||
| Net cash used in financing activities | (75,462 | ) | (197,688 | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 5,980 | 1,779 | ||||||
| INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 47,958 | (9,575 | ) | |||||
| CASH AND CASH EQUIVALENTS, beginning of period | 32,319 | 35,941 | ||||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 80,277 | $ | 26,366 | ||||
| GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
| SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||
| Freight revenues | $ | 400,735 | 69.5 | % | $ | 349,807 | 69.8 | % | $ | 1,161,635 | 71.0 | % | $ | 1,017,003 | 68.5 | % | ||||||||||||
|
Freight-related |
140,923 | 24.4 | % | 129,520 | 25.9 | % | 387,881 | 23.7 | % | 396,666 | 26.7 | % | ||||||||||||||||
| All other revenues | 35,269 | 6.1 | % | 21,675 | 4.3 | % | 86,952 | 5.3 | % | 71,324 | 4.8 | % | ||||||||||||||||
| Total operating revenues | $ | 576,927 | 100.0 | % | $ | 501,002 | 100.0 | % | $ | 1,636,468 | 100.0 | % | $ | 1,484,993 | 100.0 | % | ||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||
| Labor and benefits(a) | $ | 167,929 | 29.2 | % | $ | 156,235 | 31.2 | % | $ | 496,128 | 30.3 | % | $ | 475,297 | 32.0 | % | ||||||||||||
| Equipment rents | 33,291 | 5.8 | % | 36,778 | 7.3 | % | 100,399 | 6.1 | % | 113,634 | 7.7 | % | ||||||||||||||||
| Purchased services(b) | 68,562 | 11.9 | % | 50,991 | 10.2 | % | 176,358 | 10.8 | % | 149,125 | 10.0 | % | ||||||||||||||||
|
Depreciation and |
64,222 | 11.1 | % | 50,841 | 10.2 | % | 186,509 | 11.4 | % | 151,095 | 10.2 | % | ||||||||||||||||
|
Diesel fuel used in |
34,535 | 6.0 | % | 30,134 | 6.1 | % | 105,718 | 6.5 | % | 83,851 | 5.7 | % | ||||||||||||||||
|
Electricity used in |
765 | 0.1 | % | 3,226 | 0.6 | % | 6,072 | 0.4 | % | 9,895 | 0.7 | % | ||||||||||||||||
|
Casualties and |
10,624 | 1.8 | % | 9,252 | 1.9 | % | 33,346 | 2.0 | % | 28,814 | 1.9 | % | ||||||||||||||||
| Materials | 30,664 | 5.3 | % | 19,678 | 3.9 | % | 77,861 | 4.8 | % | 62,662 | 4.2 | % | ||||||||||||||||
| Trackage rights | 22,632 | 3.9 | % | 22,781 | 4.5 | % | 66,652 | 4.1 | % | 64,509 | 4.3 | % | ||||||||||||||||
|
Net (gain)/loss on sale |
(315 | ) | (0.1 | )% | (524 | ) | (0.1 | )% | (1,096 | ) | (0.1 | )% | 11,993 | 0.8 | % | |||||||||||||
| Restructuring costs | 2,628 | 0.5 | % | 223 | — | % | 8,744 | 0.5 | % | 6,320 | 0.4 | % | ||||||||||||||||
| Other expenses(d) | 29,901 | 5.2 | % | 29,536 | 5.9 | % | 89,494 | 5.5 | % | 91,757 | 6.2 | % | ||||||||||||||||
| Total operating expenses | $ | 465,438 | 80.7 | % | $ | 409,151 | 81.7 | % | $ | 1,346,185 | 82.3 | % | $ | 1,248,952 | 84.1 | % | ||||||||||||
| (a) | Includes $0.4 million and $3.2 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). Includes $0.3 million and $0.4 million corporate development and related costs for the three and nine months ended September 30, 2016, respectively. | |
| (b) | Includes $0.1 million and $0.4 million corporate development and related costs for the three and nine months ended September 30, 2017, respectively. | |
| (c) | Includes an impairment charge of $13.0 million associated with an Australia iron ore customer entering into voluntary administration for the nine months ended September 30, 2016. | |
| (d) | Includes $1.2 million and $7.2 million 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. Includes the write-off of accounts receivable of $8.1 million associated with an Australia iron ore customer entering into voluntary administration for the nine months ended September 30, 2016. Includes $4.0 million and $6.9 million corporate development and related costs for the three and nine months ended September 30, 2016, respectively. | |
| 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, | |||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||
| Freight revenues | $ | 242,968 | 76.2 | % | $ | 232,247 | 74.9 | % | $ | 719,622 | 75.4 | % | $ | 681,154 | 74.5 | % | ||||||||||||
|
Freight-related |
60,286 | 18.9 | % | 62,124 | 20.0 | % | 186,814 | 19.6 | % | 184,627 | 20.2 | % | ||||||||||||||||
| All other revenues | 15,673 | 4.9 | % | 15,823 | 5.1 | % | 47,641 | 5.0 | % | 48,766 | 5.3 | % | ||||||||||||||||
| Total operating revenues | $ | 318,927 | 100.0 | % | $ | 310,194 | 100.0 | % | $ | 954,077 | 100.0 | % | $ | 914,547 | 100.0 | % | ||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||
| Labor and benefits(a) | $ | 102,784 | 32.2 | % | $ | 97,426 | 31.4 | % | $ | 315,210 | 33.1 | % | $ | 295,603 | 32.3 | % | ||||||||||||
| Equipment rents | 12,623 | 4.0 | % | 14,207 | 4.6 | % | 39,993 | 4.2 | % | 43,481 | 4.8 | % | ||||||||||||||||
| Purchased services(b) | 15,254 | 4.8 | % | 15,207 | 4.9 | % | 45,350 | 4.8 | % | 47,171 | 5.2 | % | ||||||||||||||||
|
Depreciation and |
40,036 | 12.6 | % | 37,085 | 12.0 | % | 117,822 | 12.3 | % | 110,398 | 12.1 | % | ||||||||||||||||
|
Diesel fuel used in |
16,934 | 5.3 | % | 14,217 | 4.6 | % | 54,038 | 5.7 | % | 41,578 | 4.5 | % | ||||||||||||||||
|
Casualties and |
8,488 | 2.7 | % | 6,145 | 2.0 | % | 26,532 | 2.8 | % | 20,398 | 2.2 | % | ||||||||||||||||
| Materials | 11,889 | 3.7 | % | 12,222 | 3.9 | % | 38,413 | 4.0 | % | 38,168 | 4.2 | % | ||||||||||||||||
| Trackage rights | 10,025 | 3.1 | % | 9,047 | 2.9 | % | 28,732 | 3.0 | % | 26,799 | 2.9 | % | ||||||||||||||||
|
Net gain on sale and |
(110 | ) | — | % | (456 | ) | (0.1 | )% | (870 | ) | (0.1 | )% | (851 | ) | (0.1 | )% | ||||||||||||
| Restructuring costs | 316 | 0.1 | % | 111 | — | % | 384 | — | % | 805 | 0.1 | % | ||||||||||||||||
| Other expenses(c) | 18,577 | 5.8 | % | 17,830 | 5.7 | % | 59,206 | 6.2 | % | 54,843 | 6.0 | % | ||||||||||||||||
| Total operating expenses | $ | 236,816 | 74.3 | % | $ | 223,041 | 71.9 | % | $ | 724,810 | 76.0 | % | $ | 678,393 | 74.2 | % | ||||||||||||
| Operating income | $ | 82,111 | $ | 87,153 | $ | 229,267 | $ | 236,154 | ||||||||||||||||||||
|
Expenditures for |
$ | 41,713 | $ | 30,343 | $ | 105,940 | $ | 95,282 | ||||||||||||||||||||
| (a) | Includes $0.4 million and $3.1 million 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 P&W. Includes $0.1 million and $0.2 million corporate development and related costs for the three and nine months ended September 30, 2016, respectively. | |
| (b) | Includes $0.1 million corporate development and related costs for the nine months ended September 30, 2017. | |
| (c) | Includes $0.2 million and $4.2 million 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. Includes $1.0 million and $3.0 million corporate development and related costs for the three and nine months ended September 30, 2016, respectively. | |
| 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, | |||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||
| Freight revenues | $ | 66,404 | 81.8 | % | $ | 29,219 | 54.0 | % | $ | 191,031 | 82.3 | % | $ | 80,390 | 49.9 | % | ||||||||||||
|
Freight-related |
12,880 | 15.8 | % | 23,523 | 43.4 | % | 36,089 | 15.6 | % | 76,142 | 47.2 | % | ||||||||||||||||
| All other revenues | 1,986 | 2.4 | % | 1,408 | 2.6 | % | 4,866 | 2.1 | % | 4,699 | 2.9 | % | ||||||||||||||||
| Total operating revenues | $ | 81,270 | 100.0 | % | $ | 54,150 | 100.0 | % | $ | 231,986 | 100.0 | % | $ | 161,231 | 100.0 | % | ||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||
| Labor and benefits | $ | 17,618 | 21.6 | % | $ | 16,753 | 30.9 | % | $ | 52,447 | 22.7 | % | $ | 49,321 | 30.6 | % | ||||||||||||
| Equipment rents | 1,480 | 1.8 | % | 1,559 | 2.9 | % | 4,215 | 1.8 | % | 4,884 | 3.0 | % | ||||||||||||||||
| Purchased services | 7,139 | 8.8 | % | 6,083 | 11.2 | % | 19,821 | 8.5 | % | 17,432 | 10.8 | % | ||||||||||||||||
|
Depreciation and |
15,753 | 19.4 | % | 7,129 | 13.2 | % | 45,915 | 19.8 | % | 21,018 | 13.0 | % | ||||||||||||||||
|
Diesel fuel used in |
6,003 | 7.4 | % | 5,467 | 10.1 | % | 18,913 | 8.2 | % | 14,042 | 8.7 | % | ||||||||||||||||
|
Casualties and |
1,367 | 1.7 | % | 1,938 | 3.6 | % | 4,219 | 1.8 | % | 5,026 | 3.1 | % | ||||||||||||||||
| Materials | 3,398 | 4.2 | % | 2,744 | 5.1 | % | 8,629 | 3.7 | % | 8,033 | 5.0 | % | ||||||||||||||||
| Trackage rights | 3,500 | 4.3 | % | 2,884 | 5.3 | % | 10,392 | 4.5 | % | 7,201 | 4.5 | % | ||||||||||||||||
|
Net (gain)/loss on sale |
(37 | ) | — | % | 10 | — | % | (59 | ) | — | % | 12,992 | 8.1 | % | ||||||||||||||
| Restructuring costs | — | — | % | 73 | 0.1 | % | 338 | 0.1 | % | 789 | 0.5 | % | ||||||||||||||||
| Other expenses(b) | 2,773 | 3.4 | % | 5,138 | 9.5 | % | 7,471 | 3.2 | % | 18,491 | 11.5 | % | ||||||||||||||||
| Total operating expenses | $ | 58,994 | 72.6 | % | $ | 49,778 | 91.9 | % | $ | 172,301 | 74.3 | % | $ | 159,229 | 98.8 | % | ||||||||||||
| Operating income | $ | 22,276 | $ | 4,372 | $ | 59,685 | $ | 2,002 | ||||||||||||||||||||
|
Expenditures for |
$ | 4,545 | $ | 2,440 | $ | 9,721 | $ | 8,094 | ||||||||||||||||||||
|
(a) |
Includes an impairment charge of $13.0 million associated with an iron ore customer entering into voluntary administration for the nine months ended September 30, 2016. | |
| (b) | Includes $0.5 million and $0.3 million credits (corporate development and related costs) for the three and nine months ended September 30, 2017, respectively, associated with a refund. Includes $3.0 million and $3.9 million corporate development and related costs for the three and nine months ended September 30, 2016, respectively. Includes the write-off of accounts receivable of $8.1 million associated with an iron ore customer entering into voluntary administration for the nine months ended September 30, 2016. | |
| 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, | |||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
| Amount |
% of |
Amount |
% of |
Amount |
% of |
Amount |
% of |
|||||||||||||||||||||
|
Operating revenues: |
||||||||||||||||||||||||||||
| Freight revenues | $ | 91,363 | 51.7 | % | $ | 88,341 | 64.6 | % | $ | 250,982 | 55.8 | % | $ | 255,459 | 62.4 | % | ||||||||||||
|
Freight-related |
67,757 | 38.3 | % | 43,873 | 32.1 | % | 164,978 | 36.6 | % | 135,897 | 33.2 | % | ||||||||||||||||
| All other revenues | 17,610 | 10.0 | % | 4,444 | 3.3 | % | 34,445 | 7.6 | % | 17,859 | 4.4 | % | ||||||||||||||||
| Total operating revenues | $ | 176,730 | 100.0 | % | $ | 136,658 | 100.0 | % | $ | 450,405 | 100.0 | % | $ | 409,215 | 100.0 | % | ||||||||||||
|
Operating expenses: |
||||||||||||||||||||||||||||
| Labor and benefits(a) | $ | 47,527 | 26.9 | % | $ | 42,056 | 30.8 | % | $ | 128,471 | 28.4 | % | $ | 130,373 | 31.8 | % | ||||||||||||
| Equipment rents | 19,188 | 10.9 | % | 21,012 | 15.4 | % | 56,191 | 12.5 | % | 65,269 | 15.9 | % | ||||||||||||||||
| Purchased services(b) | 46,169 | 26.1 | % | 29,701 | 21.7 | % | 111,187 | 24.7 | % | 84,522 | 20.7 | % | ||||||||||||||||
|
Depreciation and |
8,433 | 4.8 | % | 6,627 | 4.9 | % | 22,772 | 5.1 | % | 19,679 | 4.8 | % | ||||||||||||||||
|
Diesel fuel used in |
11,598 | 6.6 | % | 10,450 | 7.7 | % | 32,767 | 7.3 | % | 28,231 | 6.9 | % | ||||||||||||||||
|
Electricity used in |
765 | 0.4 | % | 3,226 | 2.4 | % | 6,072 | 1.3 | % | 9,895 | 2.4 | % | ||||||||||||||||
|
Casualties and |
769 | 0.4 | % | 1,169 | 0.9 | % | 2,595 | 0.6 | % | 3,390 | 0.8 | % | ||||||||||||||||
| Materials | 15,377 | 8.7 | % | 4,712 | 3.4 | % | 30,819 | 6.8 | % | 16,461 | 4.0 | % | ||||||||||||||||
| Trackage rights | 9,107 | 5.2 | % | 10,850 | 7.9 | % | 27,528 | 6.1 | % | 30,509 | 7.5 | % | ||||||||||||||||
|
Net gain on sale and |
(168 | ) | (0.1 | )% | (78 | ) | (0.1 | )% | (167 | ) | — | % | (148 | ) | — | % | ||||||||||||
| Restructuring costs | 2,312 | 1.3 | % | 39 | — | % | 8,022 | 1.8 | % | 4,726 | 1.2 | % | ||||||||||||||||
| Other expenses(c) | 8,551 | 4.8 | % | 6,568 | 4.8 | % | 22,817 | 5.1 | % | 18,423 | 4.5 | % | ||||||||||||||||
| Total operating expenses | $ | 169,628 | 96.0 | % | $ | 136,332 | 99.8 | % | $ | 449,074 | 99.7 | % | $ | 411,330 | 100.5 | % | ||||||||||||
| Operating income/(loss) | $ | 7,102 | $ | 326 | $ | 1,331 | $ | (2,115 | ) | |||||||||||||||||||
|
Expenditures for |
$ | 6,981 | $ | 9,457 | $ | 17,446 | $ | 26,195 | ||||||||||||||||||||
| (a) | Includes $0.1 million corporate development and related costs for the nine months ended September 30, 2017, associated with severance costs related to the integration of Pentalver. Includes $0.2 million corporate development and related costs for both the three and nine months ended September 30, 2016. | |
| (b) | Includes $0.1 million and $0.3 million corporate development and related costs for the three and nine months ended September 30, 2017, respectively, associated with the acquisition and integration of Pentalver. | |
| (c) | Includes $1.5 million and $3.3 million corporate development and related costs for both the three and nine months ended September 30, 2017, associated with the acquisition and 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, |
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 | |||||||||||||||||||||||
|
Three Months Ended September 30, |
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 | $ | 29,367 | 54,024 | $ | 544 | $ | 3,909 | 8,624 | $ | 453 | $ | 628 | 652 | $ | 963 | $ | 33,904 | 63,300 | $ | 536 | |||||||||||||||||||||||
| Autos & Auto Parts | 4,358 | 7,035 | 619 | — | — | — | — | — | — | 4,358 | 7,035 | 619 | |||||||||||||||||||||||||||||||
| Chemicals & Plastics | 34,078 | 42,402 | 804 | — | — | — | — | — | — | 34,078 | 42,402 | 804 | |||||||||||||||||||||||||||||||
| Coal & Coke | 21,434 | 63,028 | 340 | — | — | — | 3,199 | 9,276 | 345 | 24,633 | 72,304 | 341 | |||||||||||||||||||||||||||||||
| Food & Kindred Products | 8,549 | 15,557 | 550 | — | — | — | — | — | — | 8,549 | 15,557 | 550 | |||||||||||||||||||||||||||||||
| Intermodal | 10 | 112 | 89 | 17,688 | 15,417 | 1,147 | 67,553 | 239,055 | 283 | 85,251 | 254,584 | 335 | |||||||||||||||||||||||||||||||
| Lumber & Forest Products | 21,301 | 35,253 | 604 | — | — | — | — | — | — | 21,301 | 35,253 | 604 | |||||||||||||||||||||||||||||||
| Metallic Ores | 3,401 | 4,536 | 750 | 5,516 | 4,846 | 1,138 | — | — | — | 8,917 | 9,382 | 950 | |||||||||||||||||||||||||||||||
| Metals | 24,127 | 31,978 | 754 | — | — | — | — | — | — | 24,127 | 31,978 | 754 | |||||||||||||||||||||||||||||||
| Minerals & Stone | 31,144 | 53,530 | 582 | 1,918 | 14,567 | 132 | 16,961 | 45,300 | 374 | 50,023 | 113,397 | 441 | |||||||||||||||||||||||||||||||
| Petroleum Products | 16,882 | 24,959 | 676 | 188 | 78 | 2,410 | — | — | — | 17,070 | 25,037 | 682 | |||||||||||||||||||||||||||||||
| Pulp & Paper | 26,897 | 41,721 | 645 | — | — | — | — | — | — | 26,897 | 41,721 | 645 | |||||||||||||||||||||||||||||||
| Waste | 6,213 | 13,420 | 463 | — | — | — | — | — | — | 6,213 | 13,420 | 463 | |||||||||||||||||||||||||||||||
| Other | 4,486 | 14,444 | 311 | — | — | — | — | — | — | 4,486 | 14,444 | 311 | |||||||||||||||||||||||||||||||
| Totals | $ | 232,247 | 401,999 | $ | 578 | $ | 29,219 | 43,532 | $ | 671 | $ | 88,341 | 294,283 | $ | 300 | $ | 349,807 | 739,814 | $ | 473 | |||||||||||||||||||||||
| * | 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 |
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 | |||||||||||||||||||||||
|
Nine Months Ended September |
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 | $ | 84,601 | 159,369 | $ | 531 | $ | 13,319 | 32,701 | $ | 407 | $ | 1,364 | 1,494 | $ | 913 | $ | 99,284 | 193,564 | $ | 513 | |||||||||||||||||||||||
| Autos & Auto Parts | 13,373 | 21,987 | 608 | — | — | — | — | — | — | 13,373 | 21,987 | 608 | |||||||||||||||||||||||||||||||
| Chemicals & Plastics | 103,569 | 131,636 | 787 | — | — | — | — | — | — | 103,569 | 131,636 | 787 | |||||||||||||||||||||||||||||||
| Coal & Coke | 53,311 | 157,943 | 338 | — | — | — | 10,951 | 26,589 | 412 | 64,262 | 184,532 | 348 | |||||||||||||||||||||||||||||||
| Food & Kindred Products | 24,956 | 44,969 | 555 | — | — | — | — | — | — | 24,956 | 44,969 | 555 | |||||||||||||||||||||||||||||||
| Intermodal | 12 | 136 | 88 | 49,305 | 44,360 | 1,111 | 201,001 | 679,693 | 296 | 250,318 | 724,189 | 346 | |||||||||||||||||||||||||||||||
| Lumber & Forest Products | 63,013 | 104,646 | 602 | — | — | — | 126 | 315 | 400 | 63,139 | 104,961 | 602 | |||||||||||||||||||||||||||||||
| Metallic Ores | 13,078 | 16,883 | 775 | 11,490 | 9,182 | 1,251 | 40 | 93 | 430 | 24,608 | 26,158 | 941 | |||||||||||||||||||||||||||||||
| Metals | 78,327 | 103,764 | 755 | — | — | — | — | — | — | 78,327 | 103,764 | 755 | |||||||||||||||||||||||||||||||
| Minerals & Stone | 85,440 | 149,093 | 573 | 5,698 | 47,552 | 120 | 41,977 | 114,610 | 366 | 133,115 | 311,255 | 428 | |||||||||||||||||||||||||||||||
| Petroleum Products | 52,335 | 76,410 | 685 | 578 | 211 | 2,739 | — | — | — | 52,913 | 76,621 | 691 | |||||||||||||||||||||||||||||||
| Pulp & Paper | 79,087 | 124,017 | 638 | — | — | — | — | — | — | 79,087 | 124,017 | 638 | |||||||||||||||||||||||||||||||
| Waste | 15,552 | 33,226 | 468 | — | — | — | — | — | — | 15,552 | 33,226 | 468 | |||||||||||||||||||||||||||||||
| Other | 14,500 | 47,235 | 307 | — | — | — | — | — | — | 14,500 | 47,235 | 307 | |||||||||||||||||||||||||||||||
| Totals | $ | 681,154 | 1,171,314 | $ | 582 | $ | 80,390 | 134,006 | $ | 600 | $ | 255,459 | 822,794 | $ | 310 | $ | 1,017,003 | 2,128,114 | $ | 478 | |||||||||||||||||||||||
| * | 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 net income attributable to G&W, adjusted diluted earnings per common share (EPS), free cash flow and free cash flow attributable to G&W, 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 per share amounts).
Reconciliations of Non-GAAP Financial Measures
Adjusted Operating Income and Adjusted Operating Ratio
| Three Months Ended | ||||||||||||||||
| September 30, 2017 | ||||||||||||||||
|
North |
Australian |
U.K./ |
Total |
|||||||||||||
| Operating revenues | $ | 318.9 | $ | 81.3 | $ | 176.7 | $ | 576.9 | ||||||||
| Operating expenses | 236.8 | 59.0 | 169.6 | 465.4 | ||||||||||||
| Operating income(a) | $ | 82.1 | $ | 22.3 | $ | 7.1 | $ | 111.5 | ||||||||
| Operating ratio (b) | 74.3 | % | 72.6 | % | 96.0 | % | 80.7 | % | ||||||||
| Operating expenses | $ | 236.8 | $ | 59.0 | $ | 169.6 | $ | 465.4 | ||||||||
|
Corporate development and related |
(0.6 | ) | 0.5 | (1.6 | ) | (1.7 | ) | |||||||||
| Restructuring costs | (0.3 | ) | — | (2.3 | ) | (2.6 | ) | |||||||||
| Adjusted operating expenses | $ | 235.9 | $ | 59.5 | $ | 165.7 | $ | 461.1 | ||||||||
| Adjusted operating income | $ | 83.0 | $ | 21.8 | $ | 11.0 | $ | 115.9 | ||||||||
| Adjusted operating ratio | 74.0 | % | 73.2 | % | 93.8 | % | 79.9 | % | ||||||||
|
(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, 2016 | ||||||||||||||||
|
North |
Australian |
U.K./ |
Total |
|||||||||||||
| Operating revenues | $ | 310.2 | $ | 54.2 | $ | 136.7 | $ | 501.0 | ||||||||
| Operating expenses | 223.0 | 49.8 | 136.3 | 409.2 | ||||||||||||
| Operating income (a) | $ | 87.2 | $ | 4.4 | $ | 0.3 | $ | 91.9 | ||||||||
| Operating ratio (b) | 71.9 | % | 91.9 | % | 99.8 | % | 81.7 | % | ||||||||
| Operating expenses | $ | 223.0 | $ | 49.8 | $ | 136.3 | $ | 409.2 | ||||||||
|
Corporate development and related |
(1.0 | ) | (2.9 | ) | (0.3 | ) | (4.3 | ) | ||||||||
| Restructuring costs | (0.1 | ) | (0.1 | ) | — | (0.2 | ) | |||||||||
| Adjusted operating expenses | $ | 221.9 | $ | 46.8 | $ | 135.9 | $ | 404.7 | ||||||||
| Adjusted operating income | $ | 88.3 | $ | 7.4 | $ | 0.7 | $ | 96.4 | ||||||||
| Adjusted operating ratio | 71.5 | % | 86.4 | % | 99.5 | % | 80.8 | % | ||||||||
| (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, 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 | |||||||||||
| Unrecognized tax benefits | — | (3.3 | ) | (3.3 | ) | (0.05 | ) | |||||||||
| As adjusted | $ | 88.3 | $ | (35.0 | ) | $ | 50.6 | $ | 0.81 | |||||||
| Three Months Ended September 30, 2016 |
Income |
Provision for |
Net Income |
Diluted EPS | ||||||||||||
| As reported | $ | 76.4 | $ | (19.6 | ) | $ | 56.8 | $ | 0.98 | |||||||
| Add back certain items: | ||||||||||||||||
| Corporate development and related costs | 4.3 | (1.2 | ) | 3.1 | 0.05 | |||||||||||
| Restructuring costs | 0.2 | (0.1 | ) | 0.2 | — | |||||||||||
| Impact of reduction in U.K. tax rate | — | (4.3 | ) | (4.3 | ) | (0.07 | ) | |||||||||
| Q3 2016 Short Line Tax Credit | — | (7.8 | ) | (7.8 | ) | (0.13 | ) | |||||||||
| As adjusted | $ | 80.9 | $ | (33.0 | ) | $ | 47.9 | $ | 0.82 | |||||||
Free Cash Flow & Free Cash Flow Attributable to G&W
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Net cash provided by operating activities | $ | 350.4 | $ | 303.6 | ||||
| Net cash used in investing activities | (232.9 | ) | (117.2 | ) | ||||
| Net cash used for acquisitions/divestitures | 113.0 | 1.3 | ||||||
| Free cash flow and Free cash flow attributable to G&W | $ | 230.4 | $ | 187.6 | ||||
| New business investments, net of grants from outside parties | 3.0 | 8.6 | ||||||
| Free cash flow before new business investments | $ | 233.4 | $ | 196.2 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171031005354/en/
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