Genesee & Wyoming Reports Results for the Fourth Quarter of 2007
GREENWICH, Conn., February 13, 2008/PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the fourth quarter of 2007 of $13.9 million, compared with net income of $14.3 million in the fourth quarter of 2006. GWI's diluted earnings per share (EPS) in the fourth quarter of 2007 were $0.38 with 35.9 million shares outstanding, compared with diluted earnings per share of $0.34 with 42.2 million shares outstanding in the fourth quarter of 2006.
GWI’s income from continuing operations in the fourth quarter of 2007 was $14.5 million, or $0.40 per diluted share, compared with income from continuing operations of $15.7 million, or $0.37 per diluted share in the fourth quarter of 2006.
As previously reported, GWI commenced the liquidation of its hurricane damaged operations in Mexico on June 25, 2007, and had no remaining employees as of September 30, 2007. Results from GWI’s Mexican operations for the three and twelve months ended December 31, 2007 and 2006, are now included in results from discontinued operations.
GWI’s results for the fourth quarter of 2007 included gains on the sale of assets of $0.8 million ($0.5 million after-tax, or $0.02 per share), compared with $2.8 million ($1.7 million after-tax, or $0.04 per share) in the fourth quarter of 2006. Changes in Canadian tax laws in the fourth quarter of 2007 generated a tax benefit of $0.6 million (or $0.02 per share). GWI's results for the fourth quarter of 2006 included a net tax benefit of $1.2 million (or $0.03 per share), primarily associated with regulations issued in late 2006 clarifying the calculation of the short line tax credit.
Continuing Operations
In the fourth quarter of 2007, GWI's revenues increased $16.8 million, or 14.3%, to $134.5 million, compared with $117.7 million in the fourth quarter of 2006. Freight revenues increased $7.0 million, or 9.3%, primarily due to an increase in average freight revenues per carload of 15.8%, partially offset by a 5.6% decrease in carloads. The average freight revenues per carload in the fourth quarter of 2007 benefited 3.7% from the appreciation of the Australian dollar and Canadian dollar relative to the U.S. dollar. Non-freight revenues increased $9.9 million, or 23.1%, primarily due to stronger fuel sales, crewing and equipment rentals in Australia, as well as higher rates and volumes at GWI’s U.S. port railroads.
GWI's operating income in the fourth quarter of 2007 increased 20.3% to $22.5 million, compared with $18.7 million in the fourth quarter of 2006. The operating ratio was 83.3% in the fourth quarter of 2007, compared with an operating ratio of 84.1% in the fourth quarter of 2006. Operating income for the fourth quarter of 2007 included $0.8 million of net gains on the sale of assets, compared with $2.8 million in the fourth quarter of 2006.
Comments from the Chief Executive Officer
John C. Hellmann, Chief Executive Officer of GWI commented, “Despite significant weakness in the U.S. housing and paper markets as well as a drought in Australia, our revenues in the fourth quarter of 2007 increased in nine out of eleven commodity groups. Particularly noteworthy was the increase in our coal shipments, increased exports moving through our port railroads and higher revenues per carload. This revenue strength combined with effective cost controls resulted in a 20% increase in our fourth quarter operating income.”
“The newly-acquired Maryland Midland Railway has been integrated as planned and we are pleased to welcome 30 new employees to the G&W family. We continue to pursue acquisition targets in the U.S. and abroad, and we intend to use our strong balance sheet in pursuit of these opportunities. Even with the uncertain U.S. economic environment, the outlook for our core railroads in 2008 is positive, primarily due to the expected start-up of major new customers in four of our eight operating regions.”
Annual Consolidated Results - Continuing Operations
For the year ended December 31, 2007, GWI reported income from continuing operations of $69.2 million, compared with $172.6 million for the year ended December 31, 2006. GWI's diluted earnings per share were $1.77 in 2007 (with 39.1 million shares outstanding), compared with $4.07 in 2006 (with 42.4 million shares outstanding).
GWI’s 2007 results included a net tax benefit of $3.7 million (or $0.09 per share) associated with the sale of GWI’s 50% interest in the Western Australia operations and certain other assets of the Australian Railroad Group (ARG) (ARG Sale) in 2006. GWI’s 2006 results included a net gain from the ARG Sale of $114.5 million after-tax (or $2.70 per share) and a non-cash investment write-down in Bolivia of $5.9 million after-tax (or $0.14 per share).
Free Cash Flow (1)
GWI’s continuing operations generated free cash flow of $79.5 million for the year ended December 31, 2007. For the year ended December 31, 2006, GWI’s continuing operations generated $29.5 million in free cash flow.
On June 1, 2006, GWI completed the ARG Sale. Also on June 1, 2006, GWI completed the acquisition of certain South Australian operations of ARG (GWA Purchase). The net proceeds from these transactions totaled $291.6 million in the year ended December 31, 2006. Although the ARG Sale occurred in 2006, the taxes to the Australian government related to the transaction were paid in June 2007.
($ in millions) | Year Ended | ||||||
December 31, | |||||||
2007 | 2006 | ||||||
Net cash provided by operating activities (a) | $ | 34.5 | $ | 85.2 | |||
Net cash (used in) provided by investing activities (b) (c) | (70.0 | ) | 230.7 | ||||
Cash paid for acquisitions/proceeds from ARG Sale | 19.4 | (286.4 | ) | ||||
Australian taxes on ARG Sale | 95.6 | - | |||||
Free cash flow (1) | $ | 79.5 | $ | 29.5 |
(a) | Includes Australian taxes on the ARG Sale totaling $95.6 million paid in 2007. |
(b) | Includes net proceeds of $291.6 million from the ARG Sale and GWA Purchase in 2006. |
(c) | Includes the acquisition of Maryland Midland Railway (Maryland Midland) in 2007 for $26.9 million offset by $7.5 million of Maryland Midland cash on hand at the acquisition date. |
Including the Australian tax payment, for the year ended December 31, 2007, GWI generated net cash from operating activities of $34.5 million. For the year ended December 31, 2006, GWI generated net cash from operating activities of $85.2 million. Net cash used in investing activities in the year ended December 31, 2007, included $61.8 million in net purchases of property and equipment, partially offset by $1.7 million in insurance proceeds for capital projects completed in 2006 and $9.4 million in cash from asset dispositions. Net cash provided by investing activities in the year ended December 31, 2006, included $59.5 million in net purchases of property and equipment.
Discontinued Operations
During the second quarter of 2007, GWI’s Mexican subsidiary, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM), resigned its operating concession, ceased operations and commenced liquidation proceedings. The Ministry of Communications and Transportation (SCT) in Mexico has contested the resignation of the concession and in the third quarter of 2007 commenced an official action to seize substantially all of FCCM’s operating assets in response to the liquidation. GWI believes the SCT’s actions were unlawful and is pursuing all legal remedies to recover its operating assets.
For the year ended December 31, 2007, GWI reported a net loss from discontinued operations of $14.1 million (or $0.36 per share), compared with a net loss of $38.6 million (or $0.91 per share) for the year ended December 31, 2006. For discontinued operations, cash used in operating activities was $14.0 million and $1.8 million for the years ended December 31, 2007 and 2006, respectively. Cash used in investing activities of discontinued operations was $0.5 million and $3.2 million for the years ended December 31, 2007 and 2006, respectively. Free cash flow used in discontinued operations was $14.5 million and $5.1 million for the years ended December 31, 2007 and 2006, respectively (1). As of December 31, 2007, there was a net liability of $1.7 million remaining on GWI’s balance sheet associated with its Mexican operations.
Conference Call and Webcast Details
As previously announced, GWI's conference call to discuss financial results for the fourth quarter will be held Wednesday, February 13, 2008 at 11:00 a.m. (Eastern Time). The dial-in number for the teleconference is (888) 423-3280; outside U.S., call (612) 332-0720, or the call may be accessed live over the Internet (listen only) under the "Investors" tab of GWI's website (http://www.gwrr.com), by selecting "Fourth Quarter Earnings Audio Webcast." An audio replay of the conference call will be accessible via the Investors tab of GWI's website starting at 1:00 p.m. Wednesday, February 13, 2008.
About Genesee & Wyoming Inc.
GWI is a leading owner and operator of short line and regional freight railroads in the United States, Canada and Australia and owns a minority interest in a railroad in Bolivia. Operations currently include 48 railroads organized in eight regions, with more than 5,700 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements. GWI provides rail service at 12 U.S. ports and also performs contract coal loading and railcar switching for industrial customers.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments; increased competition in relevant markets; funding needs and financing sources; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others. Words such as "anticipates," "intends," "plans," "believes," "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GWI disclaims any intention to update the current expectations or forward-looking statements contained in this press release.
(1) Free Cash Flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, its most directly comparable GAAP measure. The information required by Regulation G under the Securities Exchange Act of 1934, including a reconciliation to net cash provided by operating activities is included in the tables attached to this press release.
SOURCE Genesee & Wyoming Inc.
Michael Williams of GWI Corporate Communications
1-203-629-3722
mwilliams@gwrr.com
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006 | ||||||||
(In thousands, except per share amounts) | ||||||||
(unaudited) |
Three Months Ended | Twelve Months Ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
OPERATING REVENUES | $ | 134,542 | $ | 117,702 | $ | 516,167 | $ | 450,683 | |||||
OPERATING EXPENSES | 112,075 | 98,960 | 419,339 | 369,026 | |||||||||
INCOME FROM OPERATIONS | 22,467 | 18,742 | 96,828 | 81,657 | |||||||||
GAIN ON SALE OF EQUITY INVESTMENT IN ARG | - | - | - | 218,845 | |||||||||
INVESTMENT LOSS - BOLIVIA | - | - | - | (5,878 | ) | ||||||||
EQUITY LOSS OF UNCONSOLIDATED | |||||||||||||
INTERNATIONAL AFFILIATES | - | - | - | (10,752 | ) | ||||||||
INTEREST INCOME | 744 | 3,372 | 7,813 | 7,839 | |||||||||
INTEREST EXPENSE | (4,109 | ) | (3,500 | ) | (14,735 | ) | (16,007 | ) | |||||
OTHER INCOME, NET | 43 | 141 | 889 | 252 | |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 19,145 | 18,755 | 90,795 | 275,956 | |||||||||
PROVISION FOR INCOME TAXES | 4,621 | 3,016 | 21,548 | 103,309 | |||||||||
INCOME FROM CONTINUING OPERATIONS | 14,524 | 15,739 | 69,247 | 172,647 | |||||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX | (578 | ) | (1,393 | ) | (14,072 | ) | (38,644 | ) | |||||
NET INCOME | $ | 13,946 | $ | 14,346 | $ | 55,175 | $ | 134,003 | |||||
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS | $ | 0.46 | $ | 0.42 | $ | 2.00 | $ | 4.59 | |||||
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS | (0.02 | ) | (0.04 | ) | (0.41 | ) | (1.03 | ) | |||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.44 | $ | 0.38 | $ | 1.59 | $ | 3.56 | |||||
WEIGHTED AVERAGE SHARES - BASIC | 31,429 | 37,618 | 34,625 | 37,609 | |||||||||
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS | $ | 0.40 | $ | 0.37 | $ | 1.77 | $ | 4.07 | |||||
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS | (0.02 | ) | (0.03 | ) | (0.36 | ) | (0.91 | ) | |||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.38 | $ | 0.34 | $ | 1.41 | $ | 3.16 | |||||
WEIGHTED AVERAGE SHARES - DILUTED | 35,919 | 42,216 | 39,148 | 42,417 |
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
AS OF DECEMBER 31, 2007 AND DECEMBER 31, 2006 | ||||
(In thousands) | ||||
(unaudited) |
December 31, | December 31, | ||||||
ASSETS | 2007 | 2006 | |||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 46,684 | $ | 240,206 | |||
Accounts receivable, net | 125,934 | 117,099 | |||||
Materials and supplies | 7,555 | 11,302 | |||||
Prepaid expenses and other | 18,147 | 14,695 | |||||
Current assets of discontinued operations | 2,213 | - | |||||
Deferred income tax assets, net | 7,495 | 7,617 | |||||
Total current assets | 208,028 | 390,919 | |||||
PROPERTY AND EQUIPMENT, net | 696,990 | 573,292 | |||||
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 4,696 | 4,644 | |||||
GOODWILL | 39,352 | 37,788 | |||||
INTANGIBLE ASSETS, net | 117,106 | 120,669 | |||||
OTHER ASSETS, net | 10,276 | 11,055 | |||||
DEFERRED INCOME TAX ASSETS, net | 1,353 | 2,697 | |||||
Total assets | $ | 1,077,801 | $ | 1,141,064 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current portion of long-term debt | $ | 2,247 | $ | 4,372 | |||
Accounts payable | 128,038 | 98,186 | |||||
Accrued expenses | 36,436 | 38,364 | |||||
Income tax payable - Australia | 1,356 | 91,925 | |||||
Current liabilities of discontinued operations | 3,919 | - | |||||
Deferred income tax liabilities, net | 66 | 291 | |||||
Total current liabilities | 172,062 | 233,138 | |||||
LONG-TERM DEBT, less current portion | 270,519 | 241,313 | |||||
DEFERRED INCOME TAX LIABILITIES, net | 93,336 | 72,876 | |||||
DEFERRED ITEMS - grants from government agencies | 94,651 | 56,588 | |||||
OTHER LONG-TERM LIABILITIES | 15,144 | 16,668 | |||||
MINORITY INTEREST | 1,108 | 294 | |||||
TOTAL STOCKHOLDERS' EQUITY | 430,981 | 520,187 | |||||
Total liabilities and stockholders' equity | $ | 1,077,801 | $ | 1,141,064 |
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(In thousands) | ||||
(unaudited) |
Year Ended December 31, | |||||||
2007 | 2006 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 55,175 | $ | 134,003 | |||
Adjustments to reconcile net income to net cash provided | |||||||
by operating activities: | |||||||
Loss from discontinued operations, net of tax | 14,072 | 38,644 | |||||
Depreciation and amortization | 31,773 | 27,907 | |||||
Compensation cost related to equity awards | 5,412 | 8,455 | |||||
Excess tax benefits from share-based compensation | (1,159 | ) | (4,544 | ) | |||
Deferred income taxes | 7,994 | 13,907 | |||||
Gain on insurance recovery | - | (1,937 | ) | ||||
Gain on sale of equity investment in ARG | - | (218,845 | ) | ||||
Net gain on sale of assets | (6,742 | ) | (3,078 | ) | |||
Investment loss - Bolivia | - | 5,878 | |||||
Equity loss of unconsolidated international affiliates, net of tax | - | 7,500 | |||||
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions: | |||||||
Accounts receivable, net | (5,412 | ) | (7,936 | ) | |||
Materials and supplies | 2,400 | (1,760 | ) | ||||
Prepaid expenses and other | (6,159 | ) | (5,140 | ) | |||
Accounts payable and accrued expenses | 29,160 | 6,571 | |||||
Income tax payable - Australia | (92,982 | ) | 86,358 | ||||
Other assets and liabilities, net | 989 | (762 | ) | ||||
Net cash provided by operating activities from continuing operations | 34,521 | 85,221 | |||||
Net cash used in operating activities from discontinued operations | (14,000 | ) | (1,843 | ) | |||
Net cash provided by operating activities | 20,521 | 83,378 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property and equipment, net of grants from government agencies | (61,774 | ) | (59,545 | ) | |||
Proceeds from ARG Sale | - | 306,746 | |||||
Cash paid for acquisitions, net of cash acquired | (19,424 | ) | (20,354 | ) | |||
Insurance proceeds for the replacement of assets | 1,747 | - | |||||
Cash received from unconsolidated international affiliates | - | 378 | |||||
Proceeds from disposition of property and equipment | 9,404 | 3,447 | |||||
Net cash (used in) provided by investing activities from continuing operations | (70,047 | ) | 230,672 | ||||
Net cash used in investing activities from discontinued operations | (517 | ) | (3,232 | ) | |||
Net cash (used in) provided by investing activities | (70,564 | ) | 227,440 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Principal payments on long-term borrowings, including capital leases | (21,448 | ) | (182,711 | ) | |||
Proceeds from issuance of long-term debt | 55,000 | 92,500 | |||||
Net proceeds from employee stock purchases | 3,384 | 6,856 | |||||
Treasury stock purchases | (175,637 | ) | (11,334 | ) | |||
Excess tax benefits from share-based compensation | 1,159 | 4,544 | |||||
Net cash used in financing activities from continuing operations | (137,542 | ) | (90,145 | ) | |||
Net cash used in financing activities from discontinued operations | (13,301 | ) | (2,478 | ) | |||
Net cash used in financing activities | (150,843 | ) | (92,623 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 7,581 | 3,342 | |||||
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS | (217 | ) | - | ||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (193,522 | ) | 221,537 | ||||
CASH AND CASH EQUIVALENTS, beginning of period | 240,206 | 18,669 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 46,684 | $ | 240,206 |
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||
(dollars in thousands) | ||||||||
(unaudited) |
Three Months Ended | |||||||||||||
December 31, | |||||||||||||
2007 | 2006 | ||||||||||||
% of | % of | ||||||||||||
Amount | Revenue | Amount | Revenue | ||||||||||
Revenues: | |||||||||||||
Freight | $ | 82,137 | 61.0 | % | $ | 75,147 | 63.8 | % | |||||
Non-freight | 52,405 | 39.0 | % | 42,555 | 36.2 | % | |||||||
Total revenues | $ | 134,542 | 100.0 | % | $ | 117,702 | 100.0 | % | |||||
Operating Expense Comparison: | |||||||||||||
Natural Classification | |||||||||||||
Labor and benefits | $ | 43,348 | 32.2 | % | $ | 39,671 | 33.7 | % | |||||
Equipment rents | 9,460 | 7.0 | % | 10,615 | 9.0 | % | |||||||
Purchased services | 9,631 | 7.2 | % | 10,164 | 8.6 | % | |||||||
Depreciation and amortization | 8,258 | 6.1 | % | 7,502 | 6.4 | % | |||||||
Diesel fuel used in operations | 13,801 | 10.3 | % | 9,795 | 8.3 | % | |||||||
Diesel fuel sold to third parties | 8,933 | 6.6 | % | 5,756 | 4.9 | % | |||||||
Casualties and insurance | 3,694 | 2.8 | % | 3,655 | 3.1 | % | |||||||
Materials | 5,798 | 4.3 | % | 4,736 | 4.0 | % | |||||||
Net gain on sale of assets | (828 | ) | -0.6 | % | (2,835 | ) | -2.4 | % | |||||
Other expenses | 9,980 | 7.4 | % | 9,901 | 8.5 | % | |||||||
Total operating expenses | $ | 112,075 | 83.3 | % | $ | 98,960 | 84.1 | % | |||||
Functional Classification | |||||||||||||
Transportation | $ | 44,132 | 32.8 | % | $ | 39,538 | 33.6 | % | |||||
Maintenance of ways and structures | 10,534 | 7.8 | % | 10,145 | 8.6 | % | |||||||
Maintenance of equipment | 17,708 | 13.2 | % | 18,695 | 15.9 | % | |||||||
Diesel fuel sold to third parties | 8,933 | 6.6 | % | 5,756 | 4.9 | % | |||||||
General and administrative | 23,338 | 17.4 | % | 20,159 | 17.1 | % | |||||||
Net gain on sale of assets | (828 | ) | -0.6 | % | (2,835 | ) | -2.4 | % | |||||
Depreciation and amortization | 8,258 | 6.1 | % | 7,502 | 6.4 | % | |||||||
Total operating expenses | $ | 112,075 | 83.3 | % | $ | 98,960 | 84.1 | % |
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | ||||||||
(dollars in thousands) | ||||||||
(unaudited) |
Twelve Months Ended | |||||||||||||
December 31, | |||||||||||||
2007 | 2006 | ||||||||||||
% of | % of | ||||||||||||
Amount | Revenue | Amount | Revenue | ||||||||||
Revenues: | |||||||||||||
Freight | $ | 329,184 | 63.8 | % | $ | 311,310 | 69.1 | % | |||||
Non-freight | 186,983 | 36.2 | % | 139,373 | 30.9 | % | |||||||
Total revenues | $ | 516,167 | 100.0 | % | $ | 450,683 | 100.0 | % | |||||
Operating Expense Comparison: | |||||||||||||
Natural Classification | |||||||||||||
Labor and benefits | $ | 167,066 | 32.4 | % | $ | 152,566 | 33.9 | % | |||||
Equipment rents | 37,106 | 7.2 | % | 37,561 | 8.3 | % | |||||||
Purchased services | 39,583 | 7.7 | % | 33,728 | 7.5 | % | |||||||
Depreciation and amortization | 31,773 | 6.1 | % | 27,907 | 6.2 | % | |||||||
Diesel fuel used in operations | 45,718 | 8.8 | % | 40,061 | 8.9 | % | |||||||
Diesel fuel sold to third parties | 26,975 | 5.2 | % | 13,189 | 2.9 | % | |||||||
Casualties and insurance | 16,179 | 3.1 | % | 13,062 | 2.9 | % | |||||||
Materials | 23,208 | 4.5 | % | 19,718 | 4.4 | % | |||||||
Net gain on sale of assets | (6,742 | ) | -1.3 | % | (3,078 | ) | -0.7 | % | |||||
Gain on insurance recovery | - | 0.0 | % | (1,937 | ) | -0.4 | % | ||||||
Other expenses | 38,473 | 7.5 | % | 36,249 | 8.0 | % | |||||||
Total operating expenses | $ | 419,339 | 81.2 | % | $ | 369,026 | 81.9 | % | |||||
Functional Classification | |||||||||||||
Transportation | $ | 166,146 | 32.2 | % | $ | 147,874 | 32.8 | % | |||||
Maintenance of ways and structures | 45,364 | 8.8 | % | 40,233 | 8.9 | % | |||||||
Maintenance of equipment | 70,330 | 13.6 | % | 64,419 | 14.3 | % | |||||||
Diesel fuel sold to third parties | 26,975 | 5.2 | % | 13,189 | 2.9 | % | |||||||
General and administrative | 85,493 | 16.6 | % | 80,419 | 17.9 | % | |||||||
Net gain on sale of assets | (6,742 | ) | -1.3 | % | (3,078 | ) | -0.7 | % | |||||
Gain on insurance recovery | - | 0.0 | % | (1,937 | ) | -0.4 | % | ||||||
Depreciation and amortization | 31,773 | 6.1 | % | 27,907 | 6.2 | % | |||||||
Total operating expenses | $ | 419,339 | 81.2 | % | $ | 369,026 | 81.9 | % |
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD | ||||||||||||
COMPARISON BY COMMODITY GROUP | ||||||||||||
(dollars in thousands, except average revenue per carload) | ||||||||||||
(unaudited) |
Three Months Ended | Three Months Ended | ||||||||||||||||||
December 31, 2007 | December 31, 2006 | ||||||||||||||||||
Freight | Average Revenue | Freight | Average Revenue | ||||||||||||||||
Commodity Group | Revenues | Carloads | Per Carload | Revenues | Carloads | Per Carload | |||||||||||||
Pulp & Paper | $ | 17,849 | 30,102 | $ | 593 | $ | 17,073 | 31,861 | $ | 536 | |||||||||
Coal, Coke & Ores | 15,861 | 51,543 | 308 | 12,292 | 47,249 | 260 | |||||||||||||
Metals | 9,113 | 18,334 | 497 | 8,218 | 18,610 | 442 | |||||||||||||
Farm & Food Products | 9,000 | 16,671 | 540 | 8,150 | 21,338 | 382 | |||||||||||||
Lumber & Forest Products | 8,263 | 19,955 | 414 | 7,426 | 19,443 | 382 | |||||||||||||
Minerals & Stone | 7,663 | 29,833 | 257 | 6,798 | 27,766 | 245 | |||||||||||||
Chemicals-Plastics | 6,717 | 9,891 | 679 | 5,883 | 10,370 | 567 | |||||||||||||
Petroleum Products | 4,568 | 7,035 | 649 | 4,034 | 6,723 | 600 | |||||||||||||
Autos & Auto Parts | 1,780 | 3,301 | 539 | 1,346 | 2,719 | 495 | |||||||||||||
Intermodal | 204 | 428 | 477 | 341 | 878 | 388 | |||||||||||||
Other | 1,119 | 4,766 | 235 | 3,586 | 16,274 | 220 | |||||||||||||
Totals | $ | 82,137 | 191,859 | 428 | $ | 75,147 | 203,231 | 370 |
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||||
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD | ||||||||||||
COMPARISON BY COMMODITY GROUP | ||||||||||||
(dollars in thousands, except average revenue per carload) | ||||||||||||
(unaudited) |
Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2007 | December 31, 2006 | ||||||||||||||||||
Freight | Average Revenue | Freight | Average Revenue | ||||||||||||||||
Commodity Group | Revenues | Carloads | Per Carload | Revenues | Carloads | Per Carload | |||||||||||||
Pulp & Paper | $ | 69,598 | 122,706 | $ | 567 | $ | 69,049 | 136,128 | $ | 507 | |||||||||
Coal, Coke & Ores | 60,164 | 195,393 | 308 | 59,367 | 198,075 | 300 | |||||||||||||
Metals | 36,569 | 78,191 | 468 | 35,558 | 82,938 | 429 | |||||||||||||
Farm & Food Products | 36,561 | 74,095 | 493 | 27,355 | 75,574 | 362 | |||||||||||||
Lumber & Forest Products | 35,967 | 85,309 | 422 | 34,714 | 90,017 | 386 | |||||||||||||
Minerals & Stone | 30,932 | 122,006 | 254 | 25,995 | 95,759 | 271 | |||||||||||||
Chemicals-Plastics | 26,014 | 40,928 | 636 | 24,708 | 42,680 | 579 | |||||||||||||
Petroleum Products | 16,319 | 25,750 | 634 | 14,460 | 24,873 | 581 | |||||||||||||
Autos & Auto Parts | 7,096 | 13,853 | 512 | 6,281 | 12,839 | 489 | |||||||||||||
Intermodal | 1,060 | 2,108 | 503 | 1,651 | 3,936 | 419 | |||||||||||||
Other | 8,904 | 40,930 | 218 | 12,172 | 58,203 | 209 | |||||||||||||
Totals | $ | 329,184 | 801,269 | 411 | $ | 311,310 | 821,022 | 379 |
Reconciliation of non-GAAP Financial Measure
This earnings release contains free cash flow which is a "non-GAAP financial measure" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled this non-GAAP financial measure to its most directly comparable U.S. GAAP measures.
Free Cash Flow Description and Discussion
Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities in Continuing Operations less Net Cash Used in/Provided by Investing Activities in Continuing Operations, excluding the Cost of Acquisitions/Proceeds from Divestitures and directly related tax effects. Free Cash Flow in Discontinued Operations is defined as Net Cash Used in/Provided by Operating Activities in Discontinued Operations less Net Cash Used in/Provided by Investing Activities in Discontinued Operations. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with GAAP.
The following table sets forth a reconciliation of GWI's Net Cash Provided by Operating Activities in Continuing Operations to GWI's Free Cash Flow ($ in millions):
Year Ended | |||||||
December 31, | |||||||
2007 | 2006 | ||||||
Net cash provided by operating activities from continuing operations | $ | 34.5 | $ | 85.2 | |||
Net cash (used in) provided by investing activities from continuing operations | (70.0 | ) | 230.7 | ||||
Cash paid for acquisitions/proceeds from ARG Sale | 19.4 | (286.4 | ) | ||||
Australian taxes on ARG Sale | 95.6 | - | |||||
Free cash flow | $ | 79.5 | $ | 29.5 |
The following table sets forth a reconciliation of GWI's Net Cash Used In Operating Activities from Discontinued Operations to GWI's Free Cash Flow from Discontinued Operations ($ in millions):
Year Ended | |||||||
December 31, | |||||||
2007 | 2006 | ||||||
Net cash used in operating activities from discontinued operations | $ | (14.0 | ) | $ | (1.9 | ) | |
Net cash used in investing activities from discontinued operations | (0.5 | ) | (3.2 | ) | |||
Free cash flow | $ | (14.5 | ) | $ | (5.1 | ) |