Genesee & Wyoming Inc. (G&W) (NYSE:GWR)
Second Quarter 2017 Consolidated Highlights Compared with Second Quarter 2016
- Completed the acquisition of Pentalver Transport Limited (Pentalver), a U.K. based maritime container terminal and transportation business, on May 3, 2017.
- Completed the acquisition of Atlantic Western Transportation, Inc., parent company of Heart of Georgia Railroad, Inc. (HOG), on May 31, 2017.
- Operating revenues increased 7.8% to $540.4 million from $501.4 million.
- Reported operating income increased 16.2% to $101.3 million; Adjusted operating income increased 13.3% to $107.4 million.(1)
- Reported diluted earnings per common share (EPS) decreased 10.8% to $0.74 with 62.4 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2016 of $0.83 with 58.1 million weighted average shares outstanding; Adjusted diluted EPS decreased 1.2% to $0.80.(1)
Second Quarter Segment Highlights
- North America: Operating revenues from G&W's North American Operations increased 3.6% to $315.7 million from $304.6 million, primarily due to $8.7 million from new operations as well as increases in agricultural products and minerals and stone revenues. Reported operating income from G&W's North American Operations increased 0.7% to $79.6 million; Adjusted operating income from G&W's North American Operations remained flat at $81.1 million.(1)
- Australia: Operating revenues from G&W's 51.1% owned Australian Operations increased 38.9% to $76.8 million from $55.3 million, primarily due to new operations as well as an increase in metallic ores revenues. Reported operating income from G&W's Australian Operations increased to $20.3 million from $9.4 million; Adjusted operating income from G&W's Australian Operations increased to $20.3 million from $10.2 million.(1)
- U.K./Europe: Operating revenues from G&W's U.K./European Operations increased 4.5% to $148.0 million from $141.5 million. Excluding $25.5 million from new operations and a decrease of $11.8 million from foreign currency depreciation, U.K./Europe same railroad operating revenues decreased $7.3 million primarily due to the restructuring of ERS. Reported operating income from G&W's U.K./European Operations increased to $1.5 million from an operating loss of $1.2 million; Adjusted operating income from G&W's U.K./European Operations increased to $5.9 million from $3.4 million.(1) (2)
Jack Hellmann, Chairman, President and CEO of G&W commented, “In the second quarter of 2017, we closed on the acquisitions of the Heart of Georgia Railroad in the United States and Pentalver in the United Kingdom, we completed the restructuring of ERS in Continental Europe, and we reported financial results that were modestly stronger than expected, with reported diluted EPS of $0.74 and adjusted diluted EPS of $0.80. In North America, same railroad revenues remained flat overall while we maintained an operating ratio of approximately 75%. In Australia, our 51%-owned business performed well in the second full quarter since the acquisition of Glencore Rail, with higher same railroad shipments of iron ore and manganese and an operating ratio of approximately 74%. In the U.K./Europe, the turn-around in our financial performance became increasingly visible, a trend that we expect to continue through 2017 and beyond.”(1)
Mr. Hellmann continued, “Meanwhile, our year-to-date free cash flow was strong and we continue to evaluate a range of acquisition and investment opportunities across our global footprint of railroads.”(1)
Financial Results
G&W's operating revenues increased $39.1 million, or 7.8%, to $540.4 million in the second quarter of 2017, compared with $501.4 million in the second quarter of 2016. G&W's operating income in the second quarter of 2017 was $101.3 million, compared with $87.2 million in the second quarter of 2016. G&W's adjusted operating income in the second quarter of 2017 was $107.4 million, compared with $94.7 million in the second quarter of 2016.(1)
G&W's reported net income attributable to G&W in the second quarter of 2017 was $46.0 million, compared with reported net income of $48.4 million in the second quarter of 2016. Excluding the net impact of certain items affecting comparability between periods discussed below, G&W's adjusted net income in the second quarter of 2017 was $49.9 million, compared with $47.0 million in the second quarter of 2016.(1)
G&W's reported diluted EPS in the second quarter of 2017 were $0.74 with 62.4 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2016 of $0.83 with 58.1 million weighted average shares outstanding. G&W's adjusted diluted EPS in the second quarter of 2017 were $0.80 with 62.4 million weighted average shares outstanding, compared with adjusted diluted EPS in the second quarter of 2016 of $0.81 with 58.1 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 second 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 second 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 June 30, 2017 | ||||||||||||||||
Corporate development and related costs | $ | (3.7 | ) | $ | (2.7 | ) | $ | (0.04 | ) | |||||||
Restructuring costs | $ | (2.4 | ) | $ | (2.2 | ) | $ | (0.03 | ) | |||||||
Gain on sale of investment | $ | 1.6 | $ | 1.0 | $ | 0.02 | ||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||
Corporate development and related costs | $ | (2.6 | ) | $ | (1.8 | ) | $ | (0.03 | ) | |||||||
Restructuring costs | $ | (5.0 | ) | $ | (4.0 | ) | $ | (0.07 | ) | |||||||
Q2 2016 Short Line Tax Credit | $ | — | $ | 7.2 | $ | 0.12 | ||||||||||
In the second quarter of 2017, G&W's results included corporate development and related costs of $3.7 million, primarily related to the acquisition and integration of Pentalver, as well as restructuring costs of $2.4 million, primarily in G&W's U.K./Europe Region. The second quarter of 2017 also included a $1.6 million gain on the sale of an investment in the U.S.
In the second quarter of 2016, G&W's results included restructuring costs of $5.0 million, primarily associated with G&W's U.K./Europe Region, and corporate development and related costs of $2.6 million. The second quarter of 2016 also included an income tax benefit of $7.2 million associated with the United States Short Line Tax Credit. The Short Line Tax Credit expired on December 31, 2016.
Second Quarter Results by Segment
Operating revenues from G&W's North American Operations increased $11.1 million, or 3.6%, to $315.7 million in the second quarter of 2017, compared with $304.6 million in the second quarter of 2016. North American Operations revenues increased primarily due to $8.7 million from new operations as well as increases in agricultural products and minerals and stone freight revenues.
North American Operations traffic increased 10,924 carloads, or 2.8%, to 397,047 carloads in the second quarter of 2017. Excluding 11,483 carloads from new operations, same railroad traffic decreased 559 carloads, or 0.1%. The traffic decrease was principally due to decreases of 1,873 carloads of metallic ores traffic (primarily in the Mountain West and Coastal regions), 1,839 carloads of petroleum products traffic (primarily in the Northeast and Mountain West regions), 1,695 carloads of metals traffic (primarily in the Southern and Coastal regions), 1,547 carloads of chemicals and plastics traffic (primarily in the Mountain West Region) and 1,514 carloads of pulp and paper traffic (primarily in the Southern and Coastal regions), partially offset by increases of 3,235 carloads of agricultural products traffic (primarily in the Central and Mountain West regions), 2,422 carloads of waste traffic (primarily in the Northeast and Pacific regions) and 1,380 carloads of minerals and stone traffic (primarily in the Central Region). All remaining traffic increased by a net 872 carloads.
G&W's North American Operations had operating income of $79.6 million in the second quarter of 2017, compared with $79.0 million in the second quarter of 2016. The operating ratio for North American Operations was 74.8% in the second quarter of 2017, compared with an operating ratio of 74.1% in the second quarter of 2016. Adjusted operating income from G&W's North American Operations in the second quarter of 2017 remained flat at $81.1 million, compared with the second quarter of 2016. The adjusted operating ratio for North American Operations was 74.3% in the second quarter of 2017, compared with an adjusted operating ratio of 73.4% in the second quarter of 2016.(1)
Operating revenues from G&W's Australian Operations increased $21.5 million, or 38.9%, to $76.8 million in the second quarter of 2017, compared with $55.3 million in the second quarter of 2016. Excluding $16.2 million of net revenues from new operations and a $0.4 million increase due to the impact of foreign currency appreciation, Australian Operations same railroad revenues increased $5.0 million, or 8.9%, primarily due to an increase in metallic ores freight revenues.(2)
Australian Operations traffic increased 101,838 carloads to 146,089 carloads in the second quarter of 2017. Excluding 92,659 carloads from new operations, same railroad traffic increased 9,179, or 20.7% in the second quarter of 2017, compared with the second quarter of 2016. The traffic increase was principally due to increases of 6,836 carloads of metallic ores traffic and 4,871 carloads of agricultural products traffic, partially offset by a decrease of 2,359 carloads of minerals and stone traffic. All remaining traffic decreased by 169 carloads.
G&W's Australian Operations had operating income of $20.3 million in the second quarter of 2017, compared with $9.4 million in the second quarter of 2016. The operating ratio for Australian Operations was 73.6% in the second quarter of 2017, compared with an operating ratio of 83.0% in the second quarter of 2016. Adjusted operating income from G&W's Australian Operations was $20.3 million in the second quarter of 2017, compared with adjusted operating income of $10.2 million in the second quarter of 2016. The adjusted operating ratio for Australian Operations was 73.5% in the second quarter of 2017, compared with an adjusted operating ratio of 81.5% in the second quarter of 2016.(1)
Operating revenues from G&W's U.K./European Operations increased $6.4 million, or 4.5%, to $148.0 million in the second quarter of 2017, compared with $141.5 million in the second quarter of 2016. Excluding $25.5 million from new operations and an $11.8 million decrease due to the impact of foreign currency depreciation, U.K./European same railroad revenues decreased $7.3 million, or 5.6%, 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.(2)
U.K./European Operations traffic decreased 9,596 carloads, or 3.5%, to 266,946 carloads in the second quarter of 2017. The traffic decrease was principally due to decreases of 11,452 carloads of intermodal traffic (primarily in Continental Europe), 5,276 carloads of coal and coke traffic (primarily in the U.K.), partially offset by an increase of 7,062 carloads of minerals and stone traffic (primarily in Poland). All remaining traffic increased by a net 70 carloads.
G&W's U.K./European Operations had operating income of $1.5 million in the second quarter of 2017, compared with an operating loss of $1.2 million in the second quarter of 2016. Adjusted operating income from G&W's U.K./European Operations was $5.9 million in the second quarter of 2017, compared with adjusted operating income of $3.4 million in the second 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 six months ended June 30, 2017 and 2016 was as follows (in millions):
Six Months Ended | |||||||||||
June 30, | |||||||||||
2017 | 2016 | ||||||||||
Net cash provided by operating activities | $ | 224.3 | $ | 162.0 | |||||||
Net cash used in investing activities, excluding new business | (168.4 | ) | (74.8 | ) | |||||||
Net cash used for acquisitions/divestitures(a) | 105.7 | 1.1 | |||||||||
Free cash flow before new business investments | 161.6 | 88.3 | |||||||||
New business investments, net of grants from outside parties | (7.4 | ) | (3.4 | ) | |||||||
Free cash flow and free cash flow attributable to G&W(1)(b) | $ | 154.3 | $ | 85.0 | |||||||
(a) | The 2017 period primarily consisted of net cash used for the acquisitions of Pentalver and HOG as well as $5.1 million in cash paid for incremental expenses related to the purchase and integration of the 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 the U.S. | |
(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 second quarter of 2017 will be held on Tuesday, August 1, 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 August 1, 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 worldwide that are organized in 10 operating regions with approximately 8,000 employees and 3,000 customers.
- G&W's eight 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 provides rail freight services in New South Wales, including in the Hunter Valley coal supply chain, the Northern Territory and South Australia, including operating the 1,400-mile Tarcoola-to-Darwin rail line. As of December 1, 2016, G&W's Australia Region is 51.1% owned by us and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
- 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, intermodal services connecting Northern European seaports with key industrial regions in Germany, and regional rail services in the Netherlands and Belgium.
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.
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, 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 integrate acquired businesses successfully or to realize the expected synergies associated with acquisitions; 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 SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
OPERATING REVENUES | $ | 540,433 | $ | 501,375 | $ | 1,059,541 | $ | 983,991 | |||||||||||||
OPERATING EXPENSES | 439,093 | 414,181 | 880,747 | 839,801 | |||||||||||||||||
OPERATING INCOME | 101,340 | 87,194 | 178,794 | 144,190 | |||||||||||||||||
INTEREST INCOME | 581 | 336 | 808 | 411 | |||||||||||||||||
INTEREST EXPENSE | (25,785 | ) | (17,741 | ) | (52,150 | ) | (35,716 | ) | |||||||||||||
OTHER INCOME/(LOSS), NET | 1,589 | 722 | (510 | ) | 1,453 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 77,725 | 70,511 | 126,942 | 110,338 | |||||||||||||||||
PROVISION FOR INCOME TAXES | (29,597 | ) | (22,112 | ) | (51,525 | ) | (34,920 | ) | |||||||||||||
NET INCOME | $ | 48,128 | $ | 48,399 | $ | 75,417 | $ | 75,418 | |||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO | 2,121 | — | 3,172 | — | |||||||||||||||||
NET INCOME ATTRIBUTABLE TO GENESEE & | $ | 46,007 | $ | 48,399 | $ | 72,245 | $ | 75,418 | |||||||||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.75 | $ | 0.85 | $ | 1.18 | $ | 1.32 | |||||||||||||
WEIGHTED AVERAGE SHARES - BASIC | 61,551 | 57,187 | 61,472 | 57,106 | |||||||||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.74 | $ | 0.83 | $ | 1.16 | $ | 1.30 | |||||||||||||
WEIGHTED AVERAGE SHARES - DILUTED | 62,415 | 58,117 | 62,371 | 58,036 | |||||||||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
AS OF JUNE 30, 2017 AND DECEMBER 31, 2016 | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
June 30, | December 31, | ||||||||
2017 | 2016 | ||||||||
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash and cash equivalents | $ | 83,743 | $ | 32,319 | |||||
Accounts receivable, net | 379,939 | 363,923 | |||||||
Materials and supplies | 60,438 | 43,621 | |||||||
Prepaid expenses and other | 37,131 | 45,475 | |||||||
Total current assets | 561,251 | 485,338 | |||||||
PROPERTY AND EQUIPMENT, net | 4,590,740 | 4,503,319 | |||||||
GOODWILL | 1,176,181 | 1,125,596 | |||||||
INTANGIBLE ASSETS, net | 1,564,542 | 1,472,376 | |||||||
DEFERRED INCOME TAX ASSETS, net | 2,772 | 2,671 | |||||||
OTHER ASSETS, net | 40,444 | 45,658 | |||||||
Total assets | $ | 7,935,930 | $ | 7,634,958 | |||||
LIABILITIES AND EQUITY | |||||||||
CURRENT LIABILITIES: | |||||||||
Current portion of long-term debt | $ | 34,663 | $ | 52,538 | |||||
Accounts payable | 255,097 | 266,867 | |||||||
Accrued expenses | 155,645 | 159,705 | |||||||
Total current liabilities | 445,405 | 479,110 | |||||||
LONG-TERM DEBT, less current portion | 2,398,070 | 2,306,915 | |||||||
DEFERRED INCOME TAX LIABILITIES, net | 1,228,393 | 1,162,221 | |||||||
DEFERRED ITEMS - grants from outside parties | 308,946 | 301,383 | |||||||
OTHER LONG-TERM LIABILITIES | 216,546 | 198,208 | |||||||
TOTAL EQUITY | 3,338,570 | 3,187,121 | |||||||
Total liabilities and equity | $ | 7,935,930 | $ | 7,634,958 | |||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
Six Months Ended | |||||||||||
June 30, | |||||||||||
2017 | 2016 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 75,417 | $ | 75,418 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 122,287 | 100,254 | |||||||||
Stock-based compensation | 8,857 | 9,525 | |||||||||
Deferred income taxes | 34,320 | 16,336 | |||||||||
Net (gain)/loss on sale and impairment of assets | (781 | ) | 12,517 | ||||||||
Changes in assets and liabilities which provided/(used) cash, net
of effect of | |||||||||||
Accounts receivable, net | 10,066 | (11,472 | ) | ||||||||
Materials and supplies | 2,198 | (1,071 | ) | ||||||||
Prepaid expenses and other | 14,617 | (2,078 | ) | ||||||||
Accounts payable and accrued expenses | (48,282 | ) | (46,236 | ) | |||||||
Other assets and liabilities, net | 5,627 | 8,808 | |||||||||
Net cash provided by operating activities | 224,326 | 162,001 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchase of property and equipment | (91,498 | ) | (113,321 | ) | |||||||
Grant proceeds from outside parties | 11,630 | 25,990 | |||||||||
Cash paid for acquisitions, net of cash acquired | (102,655 | ) | — | ||||||||
Proceeds from the sale of investment | 2,100 | — | |||||||||
Insurance proceeds for the replacement of assets | 1,406 | 7,741 | |||||||||
Proceeds from disposition of property and equipment | 3,280 | 1,458 | |||||||||
Net cash used in investing activities | (175,737 | ) | (78,132 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Principal payments on revolving line-of-credit, long-term debt and capital leases | (322,446 | ) | (311,930 | ) | |||||||
Proceeds from revolving line-of-credit and long-term borrowings | 320,191 | 215,434 | |||||||||
Proceeds from employee stock purchases | 4,962 | 3,135 | |||||||||
Treasury stock purchases | (3,254 | ) | (2,593 | ) | |||||||
Net cash used in financing activities | (547 | ) | (95,954 | ) | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 3,382 | 1,115 | |||||||||
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 51,424 | (10,970 | ) | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 32,319 | 35,941 | |||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 83,743 | $ | 24,971 | |||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 383,155 | 70.9 | % | $ | 340,782 | 67.9 | % | $ | 760,900 | 71.8 | % | $ | 667,196 | 67.9 | % | |||||||||||||||||||||
Freight-related | 127,621 | 23.6 | % | 133,688 | 26.7 | % | 246,958 | 23.3 | % | 267,146 | 27.1 | % | |||||||||||||||||||||||||
All other revenues | 29,657 | 5.5 | % | 26,905 | 5.4 | % | 51,683 | 4.9 | % | 49,649 | 5.0 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 540,433 | 100.0 | % | $ | 501,375 | 100.0 | % | $ | 1,059,541 | 100.0 | % | $ | 983,991 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 162,615 | 30.1 | % | $ | 155,948 | 31.1 | % | $ | 328,199 | 31.0 | % | $ | 319,062 | 32.4 | % | |||||||||||||||||||||
Equipment rents | 33,237 | 6.2 | % | 38,426 | 7.7 | % | 67,108 | 6.3 | % | 76,856 | 7.8 | % | |||||||||||||||||||||||||
Purchased services(b) | 56,795 | 10.5 | % | 51,632 | 10.3 | % | 107,796 | 10.2 | % | 98,134 | 10.0 | % | |||||||||||||||||||||||||
Depreciation and | 61,513 | 11.4 | % | 50,924 | 10.2 | % | 122,287 | 11.5 | % | 100,254 | 10.2 | % | |||||||||||||||||||||||||
Diesel fuel used in | 33,030 | 6.1 | % | 28,251 | 5.5 | % | 71,183 | 6.7 | % | 53,717 | 5.4 | % | |||||||||||||||||||||||||
Electricity used in | 2,134 | 0.4 | % | 3,304 | 0.7 | % | 5,307 | 0.5 | % | 6,669 | 0.7 | % | |||||||||||||||||||||||||
Casualties and | 10,179 | 1.9 | % | 9,442 | 1.9 | % | 22,722 | 2.1 | % | 19,562 | 2.0 | % | |||||||||||||||||||||||||
Materials | 26,651 | 4.9 | % | 21,393 | 4.3 | % | 47,197 | 4.5 | % | 42,984 | 4.4 | % | |||||||||||||||||||||||||
Trackage rights | 21,797 | 4.0 | % | 21,152 | 4.2 | % | 44,020 | 4.2 | % | 41,728 | 4.2 | % | |||||||||||||||||||||||||
Net (gain)/loss on sale | (354 | ) | (0.1 | )% | (308 | ) | (0.1 | )% | (781 | ) | (0.1 | )% | 12,517 | 1.3 | % | ||||||||||||||||||||||
Restructuring costs | 2,361 | 0.4 | % | 4,970 | 1.0 | % | 6,116 | 0.6 | % | 6,097 | 0.6 | % | |||||||||||||||||||||||||
Other expenses(d) | 29,135 | 5.4 | % | 29,047 | 5.8 | % | 59,593 | 5.6 | % | 62,221 | 6.3 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 439,093 | 81.2 | % | $ | 414,181 | 82.6 | % | $ | 880,747 | 83.1 | % | $ | 839,801 | 85.3 | % | |||||||||||||||||||||
(a) | Includes $0.5 million and $2.8 corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with severance costs related to the integration of the Providence & Worcester Railroad Company (P&W). Includes $0.1 million corporate development and related costs for the three months ended June 30, 2016. | |
(b) | Includes $0.2 million and $0.3 million corporate development and related costs for the three and six months ended June 30, 2017, respectively. Includes $0.1 million and $0.2 million corporate development and related costs for the three and six months ended June 30, 2016, respectively. | |
(c) | Includes an impairment charge of $13.0 million associated with an Australia iron ore customer entering into voluntary administration for the six months ended June 30, 2016. | |
(d) | Includes $3.0 million and $6.0 million corporate development and related costs for the three and six months ended June 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 $2.4 million and $2.9 million corporate development and related costs for the three and six months ended June 30, 2016, respectively, primarily associated with the acquisition of GRail. Includes an accounts receivable reserve of $8.1 million associated with an Australia iron ore customer entering into voluntary administration for the six months ended June 30, 2016. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
NORTH AMERICAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 238,373 | 75.5 | % | $ | 227,082 | 74.6 | % | $ | 476,654 | 75.0 | % | $ | 448,907 | 74.2 | % | |||||||||||||||||||||
Freight-related | 61,183 | 19.4 | % | 60,978 | 20.0 | % | 126,528 | 20.0 | % | 122,503 | 20.3 | % | |||||||||||||||||||||||||
All other revenues | 16,118 | 5.1 | % | 16,515 | 5.4 | % | 31,968 | 5.0 | % | 32,943 | 5.5 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 315,674 | 100.0 | % | $ | 304,575 | 100.0 | % | $ | 635,150 | 100.0 | % | $ | 604,353 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 102,175 | 32.4 | % | $ | 95,587 | 31.4 | % | $ | 212,426 | 33.5 | % | $ | 198,177 | 32.8 | % | |||||||||||||||||||||
Equipment rents | 13,380 | 4.3 | % | 14,218 | 4.7 | % | 27,370 | 4.3 | % | 29,274 | 4.9 | % | |||||||||||||||||||||||||
Purchased services(b) | 15,423 | 4.9 | % | 16,263 | 5.3 | % | 30,096 | 4.7 | % | 31,964 | 5.3 | % | |||||||||||||||||||||||||
Depreciation and | 38,919 | 12.3 | % | 37,124 | 12.2 | % | 77,786 | 12.3 | % | 73,313 | 12.1 | % | |||||||||||||||||||||||||
Diesel fuel used in | 16,546 | 5.2 | % | 13,837 | 4.5 | % | 37,104 | 5.8 | % | 27,361 | 4.5 | % | |||||||||||||||||||||||||
Casualties and | 7,811 | 2.5 | % | 7,013 | 2.3 | % | 18,044 | 2.8 | % | 14,253 | 2.4 | % | |||||||||||||||||||||||||
Materials | 13,061 | 4.1 | % | 12,946 | 4.4 | % | 26,524 | 4.2 | % | 25,946 | 4.3 | % | |||||||||||||||||||||||||
Trackage rights | 9,189 | 2.9 | % | 8,885 | 2.9 | % | 18,707 | 3.0 | % | 17,752 | 2.9 | % | |||||||||||||||||||||||||
Net gain on sale and | (328 | ) | (0.1 | )% | (236 | ) | (0.1 | )% | (760 | ) | (0.1 | )% | (395 | ) | (0.1 | )% | |||||||||||||||||||||
Restructuring costs | 14 | — | % | 335 | 0.1 | % | 68 | — | % | 694 | 0.1 | % | |||||||||||||||||||||||||
Other expenses(c) | 19,898 | 6.3 | % | 19,580 | 6.4 | % | 40,629 | 6.4 | % | 37,013 | 6.1 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 236,088 | 74.8 | % | $ | 225,552 | 74.1 | % | $ | 487,994 | 76.8 | % | $ | 455,352 | 75.3 | % | |||||||||||||||||||||
Operating income | $ | 79,586 | $ | 79,023 | $ | 147,156 | $ | 149,001 | |||||||||||||||||||||||||||||
Expenditures for | $ | 40,012 | $ | 39,523 | $ | 64,227 | $ | 64,939 | |||||||||||||||||||||||||||||
(a) | Includes $0.4 million and $2.7 million corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with severance costs related to the integration of the P&W. Includes $0.2 million corporate development and related costs for both the three and six months ended June 30, 2016. | |
(b) | Includes $0.1 million corporate development and related costs for the six months ended June 30, 2017. Includes $0.1 million and $0.2 million corporate development and related costs for the three and six months ended June 30, 2016, respectively. | |
(c) | Includes $1.1 million and $4.0 million corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with ongoing corporate development projects as well as projects that are no longer active. Includes $1.5 million and $1.8 million corporate development and related costs for the three and six months ended June 30, 2016, respectively. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
AUSTRALIAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 63,753 | 83.0 | % | $ | 26,394 | 47.7 | % | $ | 124,627 | 82.7 | % | $ | 51,171 | 47.8 | % | |||||||||||||||||||||
Freight-related | 11,500 | 15.0 | % | 27,129 | 49.1 | % | 23,209 | 15.4 | % | 52,619 | 49.1 | % | |||||||||||||||||||||||||
All other revenues | 1,556 | 2.0 | % | 1,760 | 3.2 | % | 2,880 | 1.9 | % | 3,291 | 3.1 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 76,809 | 100.0 | % | $ | 55,283 | 100.0 | % | $ | 150,716 | 100.0 | % | $ | 107,081 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits | $ | 17,775 | 23.1 | % | $ | 16,800 | 30.4 | % | $ | 34,829 | 23.1 | % | $ | 32,568 | 30.4 | % | |||||||||||||||||||||
Equipment rents | 1,334 | 1.7 | % | 1,630 | 2.9 | % | 2,735 | 1.8 | % | 3,325 | 3.1 | % | |||||||||||||||||||||||||
Purchased services | 6,470 | 8.4 | % | 6,098 | 11.0 | % | 12,682 | 8.4 | % | 11,349 | 10.6 | % | |||||||||||||||||||||||||
Depreciation and | 14,970 | 19.5 | % | 7,233 | 13.1 | % | 30,162 | 20.0 | % | 13,889 | 13.0 | % | |||||||||||||||||||||||||
Diesel fuel used in | 6,320 | 8.2 | % | 4,538 | 8.2 | % | 12,910 | 8.6 | % | 8,575 | 8.0 | % | |||||||||||||||||||||||||
Casualties and | 1,379 | 1.8 | % | 1,553 | 2.8 | % | 2,852 | 1.9 | % | 3,088 | 2.9 | % | |||||||||||||||||||||||||
Materials | 2,517 | 3.3 | % | 2,870 | 5.2 | % | 5,231 | 3.5 | % | 5,289 | 4.9 | % | |||||||||||||||||||||||||
Trackage rights | 3,484 | 4.6 | % | 2,028 | 3.7 | % | 6,892 | 4.6 | % | 4,317 | 4.0 | % | |||||||||||||||||||||||||
Net (gain)/loss on sale | (20 | ) | — | % | — | — | % | (22 | ) | — | % | 12,982 | 12.1 | % | |||||||||||||||||||||||
Restructuring costs | — | — | % | 23 | — | % | 338 | 0.2 | % | 716 | 0.7 | % | |||||||||||||||||||||||||
Other expenses(b) | 2,330 | 3.0 | % | 3,129 | 5.7 | % | 4,698 | 3.1 | % | 13,353 | 12.5 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 56,559 | 73.6 | % | $ | 45,902 | 83.0 | % | $ | 113,307 | 75.2 | % | $ | 109,451 | 102.2 | % | |||||||||||||||||||||
Operating income/(loss) | $ | 20,250 | $ | 9,381 | $ | 37,409 | $ | (2,370 | ) | ||||||||||||||||||||||||||||
Expenditures for | $ | 3,714 | $ | 4,787 | $ | 5,176 | $ | 5,654 | |||||||||||||||||||||||||||||
(a) | Includes an impairment charge of $13.0 million associated with an iron ore customer entering into voluntary administration for the six months ended June 30, 2016. | |
(b) | Includes $0.1 million and $0.2 million corporate development and related costs for the three and six months ended June 30, 2017, respectively. Includes $0.8 million and $1.0 million corporate development and related costs for the three and six months ended June 30, 2016, respectively. Includes an accounts receivable reserve of $8.1 million associated with an iron ore customer entering into voluntary administration for the six months ended June 30, 2016. | |
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
U.K./EUROPEAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 81,029 | 54.8 | % | $ | 87,306 | 61.7 | % | $ | 159,619 | 58.3 | % | $ | 167,118 | 61.3 | % | |||||||||||||||||||||
Freight-related | 54,938 | 37.1 | % | 45,581 | 32.2 | % | 97,221 | 35.5 | % | 92,024 | 33.8 | % | |||||||||||||||||||||||||
All other revenues | 11,983 | 8.1 | % | 8,630 | 6.1 | % | 16,835 | 6.2 | % | 13,415 | 4.9 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 147,950 | 100.0 | % | $ | 141,517 | 100.0 | % | $ | 273,675 | 100.0 | % | $ | 272,557 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 42,665 | 28.8 | % | $ | 43,561 | 30.8 | % | $ | 80,944 | 29.6 | % | $ | 88,317 | 32.4 | % | |||||||||||||||||||||
Equipment rents | 18,523 | 12.5 | % | 22,578 | 16.0 | % | 37,003 | 13.5 | % | 44,257 | 16.2 | % | |||||||||||||||||||||||||
Purchased services(b) | 34,902 | 23.6 | % | 29,271 | 20.7 | % | 65,018 | 23.8 | % | 54,821 | 20.1 | % | |||||||||||||||||||||||||
Depreciation and | 7,624 | 5.1 | % | 6,567 | 4.6 | % | 14,339 | 5.2 | % | 13,052 | 4.9 | % | |||||||||||||||||||||||||
Diesel fuel used in | 10,164 | 6.9 | % | 9,876 | 7.0 | % | 21,169 | 7.7 | % | 17,781 | 6.5 | % | |||||||||||||||||||||||||
Electricity used in | 2,134 | 1.4 | % | 3,304 | 2.3 | % | 5,307 | 2.0 | % | 6,669 | 2.4 | % | |||||||||||||||||||||||||
Casualties and | 989 | 0.7 | % | 876 | 0.6 | % | 1,826 | 0.7 | % | 2,221 | 0.8 | % | |||||||||||||||||||||||||
Materials | 11,073 | 7.5 | % | 5,577 | 3.9 | % | 15,442 | 5.6 | % | 11,749 | 4.3 | % | |||||||||||||||||||||||||
Trackage rights | 9,124 | 6.2 | % | 10,239 | 7.3 | % | 18,421 | 6.7 | % | 19,659 | 7.2 | % | |||||||||||||||||||||||||
Net (gain)/loss on sale and | (6 | ) | — | % | (72 | ) | (0.1 | )% | 1 | — | % | (70 | ) | — | % | ||||||||||||||||||||||
Restructuring costs | 2,347 | 1.6 | % | 4,612 | 3.3 | % | 5,710 | 2.1 | % | 4,687 | 1.7 | % | |||||||||||||||||||||||||
Other expenses(c) | 6,907 | 4.7 | % | 6,338 | 4.5 | % | 14,266 | 5.2 | % | 11,855 | 4.4 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 146,446 | 99.0 | % | $ | 142,727 | 100.9 | % | $ | 279,446 | 102.1 | % | $ | 274,998 | 100.9 | % | |||||||||||||||||||||
Operating income/(loss) | $ | 1,504 | $ | (1,210 | ) | $ | (5,771 | ) | $ | (2,441 | ) | ||||||||||||||||||||||||||
Expenditures for | $ | 3,190 | $ | 11,338 | $ | 10,465 | $ | 16,738 | |||||||||||||||||||||||||||||
(a) | Includes $0.1 million corporate development and related costs for both the three and six months ended June 30, 2017, associated with severance costs related to the integration of Pentalver. | |
(b) | Includes $0.2 million corporate development and related costs for both the three and six months ended June 30, 2017, associated with the acquisition of Pentalver. | |
(c) | Includes $1.8 million corporate development and related costs for both the three and six months ended June 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 June 30, 2017 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | |||||||||||||||||||||||||||||||||||||||||
Commodity Group | Freight | Carloads* | Average | Freight | Carloads* | Average | Freight | Carloads* | Average | Freight | Carloads* | Average | |||||||||||||||||||||||||||||||||
Agricultural Products | $ | 31,279 | 52,953 | $ | 591 | $ | 5,932 | 15,375 | $ | 386 | $ | 829 | 746 | $ | 1,111 | $ | 38,040 | 69,074 | $ | 551 | |||||||||||||||||||||||||
Autos & Auto Parts | 5,730 | 9,184 | 624 | — | — | — | — | — | — | 5,730 | 9,184 | 624 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 37,400 | 44,814 | 835 | — | — | — | — | — | — | 37,400 | 44,814 | 835 | |||||||||||||||||||||||||||||||||
Coal & Coke | 15,382 | 46,501 | 331 | 27,758 | 92,659 | 300 | 1,719 | 3,974 | 433 | 44,859 | 143,134 | 313 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 8,325 | 14,806 | 562 | — | — | — | — | — | — | 8,325 | 14,806 | 562 | |||||||||||||||||||||||||||||||||
Intermodal | 238 | 2,367 | 101 | 17,234 | 15,159 | 1,137 | 60,793 | 217,091 | 280 | 78,265 | 234,617 | 334 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 22,323 | 35,619 | 627 | — | — | — | — | — | — | 22,323 | 35,619 | 627 | |||||||||||||||||||||||||||||||||
Metallic Ores | 2,920 | 4,249 | 687 | 10,659 | 8,854 | 1,204 | — | — | — | 13,579 | 13,103 | 1,036 | |||||||||||||||||||||||||||||||||
Metals | 26,079 | 34,695 | 752 | — | — | — | — | — | — | 26,079 | 34,695 | 752 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 34,562 | 56,768 | 609 | 2,016 | 13,978 | 144 | 17,688 | 45,135 | 392 | 54,266 | 115,881 | 468 | |||||||||||||||||||||||||||||||||
Petroleum Products | 15,844 | 23,912 | 663 | 154 | 64 | 2,406 | — | — | — | 15,998 | 23,976 | 667 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 26,077 | 39,813 | 655 | — | — | — | — | — | — | 26,077 | 39,813 | 655 | |||||||||||||||||||||||||||||||||
Waste | 7,144 | 14,387 | 497 | — | — | — | — | — | — | 7,144 | 14,387 | 497 | |||||||||||||||||||||||||||||||||
Other | 5,070 | 16,979 | 299 | — | — | — | — | — | — | 5,070 | 16,979 | 299 | |||||||||||||||||||||||||||||||||
Totals | $ | 238,373 | 397,047 | $ | 600 | $ | 63,753 | 146,089 | $ | 436 | $ | 81,029 | 266,946 | $ | 304 | $ | 383,155 | 810,082 | $ | 473 | |||||||||||||||||||||||||
Three Months Ended June 30, 2016 | 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 | $ | 27,178 | 49,330 | $ | 551 | $ | 4,411 | 10,504 | $ | 420 | $ | 393 | 448 | $ | 877 | $ | 31,982 | 60,282 | $ | 531 | |||||||||||||||||||||||||
Autos & Auto Parts | 4,980 | 8,146 | 611 | — | — | — | — | — | — | 4,980 | 8,146 | 611 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 35,743 | 44,875 | 797 | — | — | — | — | — | — | 35,743 | 44,875 | 797 | |||||||||||||||||||||||||||||||||
Coal & Coke | 15,051 | 46,237 | 326 | — | — | — | 3,408 | 9,250 | 368 | 18,459 | 55,487 | 333 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 7,973 | 14,448 | 552 | — | — | — | — | — | — | 7,973 | 14,448 | 552 | |||||||||||||||||||||||||||||||||
Intermodal | 1 | 12 | 83 | 17,044 | 15,320 | 1,113 | 68,919 | 228,543 | 302 | 85,964 | 243,875 | 352 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 20,842 | 34,561 | 603 | — | — | — | 59 | 135 | 437 | 20,901 | 34,696 | 602 | |||||||||||||||||||||||||||||||||
Metallic Ores | 4,615 | 6,122 | 754 | 2,867 | 2,018 | 1,421 | 40 | 93 | 430 | 7,522 | 8,233 | 914 | |||||||||||||||||||||||||||||||||
Metals | 27,157 | 35,881 | 757 | — | — | — | — | — | — | 27,157 | 35,881 | 757 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 29,502 | 51,882 | 569 | 1,901 | 16,337 | 116 | 14,487 | 38,073 | 381 | 45,890 | 106,292 | 432 | |||||||||||||||||||||||||||||||||
Petroleum Products | 17,180 | 25,462 | 675 | 171 | 72 | 2,375 | — | — | — | 17,351 | 25,534 | 680 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 26,062 | 41,128 | 634 | — | — | — | — | — | — | 26,062 | 41,128 | 634 | |||||||||||||||||||||||||||||||||
Waste | 5,551 | 11,520 | 482 | — | — | — | — | — | — | 5,551 | 11,520 | 482 | |||||||||||||||||||||||||||||||||
Other | 5,247 | 16,519 | 318 | — | — | — | — | — | — | 5,247 | 16,519 | 318 | |||||||||||||||||||||||||||||||||
Totals | $ | 227,082 | 386,123 | $ | 588 | $ | 26,394 | 44,251 | $ | 596 | $ | 87,306 | 276,542 | $ | 316 | $ | 340,782 | 706,916 | $ | 482 | |||||||||||||||||||||||||
* 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) | |||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2017 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | |||||||||||||||||||||||||||||||||||||||||
Commodity Group | Freight | Carloads* | Average | Freight | Carloads* | Average | Freight | Carloads* | Average | Freight | Carloads* | Average | |||||||||||||||||||||||||||||||||
Agricultural Products | $ | 64,257 | 110,204 | $ | 583 | $ | 11,678 | 30,641 | $ | 381 | $ | 2,568 | 2,259 | $ | 1,137 | $ | 78,503 | 143,104 | $ | 549 | |||||||||||||||||||||||||
Autos & Auto Parts | 10,940 | 17,977 | 609 | — | — | — | — | — | — | 10,940 | 17,977 | 609 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 74,915 | 90,822 | 825 | — | — | — | — | — | — | 74,915 | 90,822 | 825 | |||||||||||||||||||||||||||||||||
Coal & Coke | 37,115 | 109,800 | 338 | 57,279 | 190,343 | 301 | 5,119 | 14,535 | 352 | 99,513 | 314,678 | 316 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 16,599 | 29,676 | 559 | — | — | — | — | — | — | 16,599 | 29,676 | 559 | |||||||||||||||||||||||||||||||||
Intermodal | 415 | 4,168 | 100 | 33,101 | 28,737 | 1,152 | 122,789 | 440,904 | 278 | 156,305 | 473,809 | 330 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 42,699 | 69,174 | 617 | — | — | — | — | — | — | 42,699 | 69,174 | 617 | |||||||||||||||||||||||||||||||||
Metallic Ores | 6,816 | 9,173 | 743 | 18,290 | 15,760 | 1,161 | — | — | — | 25,106 | 24,933 | 1,007 | |||||||||||||||||||||||||||||||||
Metals | 52,673 | 70,493 | 747 | — | — | — | — | — | — | 52,673 | 70,493 | 747 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 62,677 | 103,813 | 604 | 3,995 | 29,906 | 134 | 29,143 | 78,064 | 373 | 95,815 | 211,783 | 452 | |||||||||||||||||||||||||||||||||
Petroleum Products | 34,271 | 49,049 | 699 | 284 | 118 | 2,407 | — | — | — | 34,555 | 49,167 | 703 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 51,555 | 78,587 | 656 | — | — | — | — | — | — | 51,555 | 78,587 | 656 | |||||||||||||||||||||||||||||||||
Waste | 12,338 | 25,131 | 491 | — | — | — | — | — | — | 12,338 | 25,131 | 491 | |||||||||||||||||||||||||||||||||
Other | 9,384 | 31,996 | 293 | — | — | — | — | — | — | 9,384 | 31,996 | 293 | |||||||||||||||||||||||||||||||||
Totals | $ | 476,654 | 800,063 | $ | 596 | $ | 124,627 | 295,505 | $ | 422 | $ | 159,619 | 535,762 | $ | 298 | $ | 760,900 | 1,631,330 | $ | 466 | |||||||||||||||||||||||||
Six Months Ended June 30, 2016 | 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 | $ | 55,234 | 105,345 | $ | 524 | $ | 9,410 | 24,077 | $ | 391 | $ | 736 | 842 | $ | 874 | $ | 65,380 | 130,264 | $ | 502 | |||||||||||||||||||||||||
Autos & Auto Parts | 9,015 | 14,952 | 603 | — | — | — | — | — | — | 9,015 | 14,952 | 603 | |||||||||||||||||||||||||||||||||
Chemicals & Plastics | 69,491 | 89,234 | 779 | — | — | — | — | — | — | 69,491 | 89,234 | 779 | |||||||||||||||||||||||||||||||||
Coal & Coke | 31,877 | 94,915 | 336 | — | — | — | 7,752 | 17,313 | 448 | 39,629 | 112,228 | 353 | |||||||||||||||||||||||||||||||||
Food & Kindred Products | 16,407 | 29,412 | 558 | — | — | — | — | — | — | 16,407 | 29,412 | 558 | |||||||||||||||||||||||||||||||||
Intermodal | 2 | 24 | 83 | 31,617 | 28,943 | 1,092 | 133,448 | 440,638 | 303 | 165,067 | 469,605 | 352 | |||||||||||||||||||||||||||||||||
Lumber & Forest Products | 41,712 | 69,393 | 601 | — | — | — | 126 | 315 | 400 | 41,838 | 69,708 | 600 | |||||||||||||||||||||||||||||||||
Metallic Ores | 9,677 | 12,347 | 784 | 5,974 | 4,336 | 1,378 | 40 | 93 | 430 | 15,691 | 16,776 | 935 | |||||||||||||||||||||||||||||||||
Metals | 54,200 | 71,786 | 755 | — | — | — | — | — | — | 54,200 | 71,786 | 755 | |||||||||||||||||||||||||||||||||
Minerals & Stone | 54,296 | 95,563 | 568 | 3,780 | 32,985 | 115 | 25,016 | 69,310 | 361 | 83,092 | 197,858 | 420 | |||||||||||||||||||||||||||||||||
Petroleum Products | 35,453 | 51,451 | 689 | 390 | 133 | 2,932 | — | — | — | 35,843 | 51,584 | 695 | |||||||||||||||||||||||||||||||||
Pulp & Paper | 52,190 | 82,296 | 634 | — | — | — | — | — | — | 52,190 | 82,296 | 634 | |||||||||||||||||||||||||||||||||
Waste | 9,339 | 19,806 | 472 | — | — | — | — | — | — | 9,339 | 19,806 | 472 | |||||||||||||||||||||||||||||||||
Other | 10,014 | 32,791 | 305 | — | — | — | — | — | — | 10,014 | 32,791 | 305 | |||||||||||||||||||||||||||||||||
Totals | $ | 448,907 | 769,315 | $ | 584 | $ | 51,171 | 90,474 | $ | 566 | $ | 167,118 | 528,511 | $ | 316 | $ | 667,196 | 1,388,300 | $ | 481 | |||||||||||||||||||||||||
* 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 | |||||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||
North | Australian | U.K./European | Total | ||||||||||||||||||
Operating revenues | $ | 315.7 | $ | 76.8 | $ | 148.0 | $ | 540.4 | |||||||||||||
Operating expenses | 236.1 | 56.6 | 146.4 | 439.1 | |||||||||||||||||
Operating income(a) | $ | 79.6 | $ | 20.3 | $ | 1.5 | $ | 101.3 | |||||||||||||
Operating ratio (b) | 74.8 | % | 73.6 | % | 99.0 | % | 81.2 | % | |||||||||||||
Operating expenses | $ | 236.1 | $ | 56.6 | $ | 146.4 | $ | 439.1 | |||||||||||||
Corporate development and related costs | (1.5 | ) | (0.1 | ) | (2.1 | ) | (3.7 | ) | |||||||||||||
Restructuring costs | — | — | (2.3 | ) | (2.4 | ) | |||||||||||||||
Adjusted operating expenses | $ | 234.6 | $ | 56.5 | $ | 142.0 | $ | 433.1 | |||||||||||||
Adjusted operating income | $ | 81.1 | $ | 20.3 | $ | 5.9 | $ | 107.4 | |||||||||||||
Adjusted operating ratio | 74.3 | % | 73.5 | % | 96.0 | % | 80.1 | % | |||||||||||||
(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 | |||||||||||||||||||||
June 30, 2016 | |||||||||||||||||||||
North | Australian | U.K./European | Total | ||||||||||||||||||
Operating revenues | $ | 304.6 | $ | 55.3 | $ | 141.5 | $ | 501.4 | |||||||||||||
Operating expenses | 225.6 | 45.9 | 142.7 | 414.2 | |||||||||||||||||
Operating income/(loss) (a) | $ | 79.0 | $ | 9.4 | $ | (1.2 | ) | $ | 87.2 | ||||||||||||
Operating ratio (b) | 74.1 | % | 83.0 | % | 100.9 | % | 82.6 | % | |||||||||||||
Operating expenses | $ | 225.6 | $ | 45.9 | $ | 142.7 | $ | 414.2 | |||||||||||||
Corporate development and related costs | (1.7 | ) | (0.8 | ) | — | (2.6 | ) | ||||||||||||||
Restructuring costs | (0.3 | ) | — | (4.6 | ) | (5.0 | ) | ||||||||||||||
Adjusted operating expenses | $ | 223.5 | $ | 45.1 | $ | 138.1 | $ | 406.6 | |||||||||||||
Adjusted operating income | $ | 81.1 | $ | 10.2 | $ | 3.4 | $ | 94.7 | |||||||||||||
Adjusted operating ratio | 73.4 | % | 81.5 | % | 97.6 | % | 81.1 | % | |||||||||||||
(a) | Operating income/(loss) 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 June 30, 2017 | Income | Provision for | Net Income | Diluted EPS | |||||||||||||||||
As reported | $ | 77.7 | $ | (29.6 | ) | $ | 46.0 | $ | 0.74 | ||||||||||||
Add back certain items: | |||||||||||||||||||||
Corporate development and related costs | 3.7 | (0.9 | ) | 2.7 | 0.04 | ||||||||||||||||
Restructuring costs | 2.4 | (0.2 | ) | 2.2 | 0.03 | ||||||||||||||||
Gain on sale of investment | (1.6 | ) | 0.7 | (1.0 | ) | (0.02 | ) | ||||||||||||||
As adjusted | $ | 82.1 | $ | (30.0 | ) | $ | 49.9 | $ | 0.80 | ||||||||||||
Three Months Ended June 30, 2016 | Income | Provision for | Net Income | Diluted EPS | |||||||||||||||||
As reported | $ | 70.5 | $ | (22.1 | ) | $ | 48.4 | $ | 0.83 | ||||||||||||
Add back certain items: | |||||||||||||||||||||
Corporate development and related costs | 2.6 | (0.8 | ) | 1.8 | 0.03 | ||||||||||||||||
Restructuring costs | 5.0 | (0.9 | ) | 4.0 | 0.07 | ||||||||||||||||
Q2 2016 Short Line Tax Credit | — | (7.2 | ) | (7.2 | ) | (0.12 | ) | ||||||||||||||
As adjusted | $ | 78.1 | $ | (31.0 | ) | $ | 47.0 | $ | 0.81 | ||||||||||||
Free Cash Flow & Free Cash Flow Attributable to G&W
Six Months Ended | |||||||||||
June 30, | |||||||||||
2017 | 2016 | ||||||||||
Net cash provided by operating activities | $ | 224.3 | $ | 162.0 | |||||||
Net cash used in investing activities | (175.7 | ) | (78.1 | ) | |||||||
Net cash used for acquisitions/divestitures | 105.7 | 1.1 | |||||||||
Free cash flow and Free cash flow attributable to G&W | $ | 154.3 | $ | 85.0 | |||||||
New business investments, net of grants from outside parties | 7.4 | 3.4 | |||||||||
Free cash flow before new business investments | $ | 161.6 | $ | 88.3 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170801005447/en/
Contacts:
Michael Williams,
1-203-202-8900
G&W Corporate Communications
mwilliams@gwrr.com