Genesee & Wyoming Reports Results for the Third Quarter of 2008
GREENWICH, Conn., November 3, 2008 /PRNewswire-FirstCall/ — Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the third quarter of 2008 of $21.2 million, compared with net income of $16.2 million in the third quarter of 2007. GWI's diluted earnings per share (EPS) in the third quarter of 2008 were $0.58 with 36.6 million weighted average shares outstanding, compared with diluted EPS of $0.42 with 38.5 million weighted average shares outstanding in the third quarter of 2007. EPS from continuing operations in the third quarter of 2008 were $0.55, compared with EPS from continuing operations of $0.60 in the third quarter of 2007.
Results from continuing operations in the third quarter of 2008 included gains from the sale of assets of $1.2 million ($0.8 million after-tax, or $0.02 per diluted share) and a net tax benefit of $0.5 million ($0.01 per diluted share) associated with the filing of GWI’s 2007 U.S. income tax return.
Results from continuing operations in the third quarter of 2007 included gains from the sale of assets of $5.5 million ($3.3 million after-tax, or $0.09 per diluted share), a net tax benefit of $3.2 million ($0.08 per diluted share) associated with the sale of the Western Australia operations and certain other assets of the Australian Railroad Group (ARG) previously owned by GWI and its joint venture partner (ARG Sale) and a net tax benefit of $2.8 million ($0.07 per diluted share) from the short line tax credit in the United States.
The table below summarizes the financial impact of the significant items in the third quarters of 2008 and 2007 ($ in millions, except per share amounts).
After-Tax Amount | EPS Impact | ||||||
Q3 2008 - Gains on the sale of assets | $ | 0.8 | $ | 0.02 | |||
- Tax benefit | $ | 0.5 | $ | 0.01 | |||
- Short line tax credit | $ | 0.0 | $ | 0.00 | |||
Q3 2007 - Gains on the sale of assets | $ | 3.3 | $ | 0.09 | |||
- ARG Sale-related tax benefit | $ | 3.2 | $ | 0.08 | |||
- Short line tax credit | $ | 2.8 | $ | 0.07 |
GWI reported income from its discontinued operations in Mexico of $1.1 million after-tax ($0.03 per diluted share) in the third quarter of 2008, compared with a loss of $6.9 million after-tax ($0.18 per diluted share) in the third quarter of 2007.
Continuing Operations
In the third quarter of 2008, GWI's revenues increased $28.2 million, or 21.5%, to $159.4 million, compared with $131.2 million in the third quarter of 2007. Of this increase, revenues from acquisitions contributed $12.8 million and revenues from same railroad operations increased $15.4 million, or 11.7%.
Same railroad freight revenues increased $6.3 million, or 7.6%, in the third quarter of 2008 primarily due to an increase in average revenues per carload of 15.3%, or 14.9% excluding the impact of the appreciation of the Australian and Canadian dollars relative to the U.S. dollar year over year. Same railroad non-freight revenues increased $9.1 million, or 18.9%, in the third quarter of 2008 primarily due to higher third-party fuel sales in Australia, increased crewing and iron ore services in Australia, and higher revenues from GWI's industrial switching and U.S. port railroads.
GWI's operating income in the third quarter of 2008 increased $4.9 million, or 16.5%, to $34.6 million, compared with $29.7 million in the third quarter of 2007. GWI's operating ratio was 78.3% in the third quarter of 2008, compared with an operating ratio of 77.4% in the third quarter of 2007. Operating income in the third quarter of 2008 included $1.2 million of gains on the sale of assets compared with $5.5 million in the third quarter of 2007.
GWI's effective income tax rate increased from 15.0% in the third quarter of 2007 to 34.7% in the third quarter of 2008, partially due to the expiration of the short line tax credit on December 31, 2007. On October 3, 2008, the short line tax credit was extended through December 31, 2009. The cumulative benefit of this credit, which was retroactive to January 1, 2008, will be recorded in the fourth quarter.
Comments from the Chief Executive Officer
“Our third quarter operating income was the best in GWI’s history and as we enter a period of economic uncertainty worldwide, GWI is doing so from a position of relative strength,” GWI Chief Executive Officer Jack Hellmann said. “In our regions that have more exposure to the current economic downturn such as Oregon and Canada, management has been doing an excellent job of managing costs. In addition, several major new customers have continued to ramp up shipments, and our recent acquisitions are performing well.”
“We believe that the Ohio Central Railroad System and the Georgia Southwestern will be smoothly integrated into our operations in the fourth quarter of 2008 and will strengthen our financial performance in 2009. Moreover, the recently enacted extension of the short line tax credit will lower our tax payments through 2009.”
Mr. Hellmann continued, “In light of the poor conditions in global credit markets, it is important to note that we have access to debt capital under our existing credit facilities. In conjunction with our recent acquisitions, we closed a new $570 million senior bank facility on October 1, 2008, that is due in 2013 and provides $170 million of unused capacity. This availability combined with our strong cash flow makes GWI well positioned both to withstand the economic downturn and to pursue opportunistic acquisitions.”
Free Cash Flow from Continuing Operations (1)
($ in millions) | Nine Months Ended September 30, | ||||||
2008 | 2007 | ||||||
Net cash provided by operating activities | $ | 91.3 | $ | 5.5 | |||
Net cash used in investing activities | (148.5 | ) | (31.5 | ) | |||
Net cash paid for acquisitions (a) | 115.7 | - | |||||
Australia taxes on ARG Sale (b) | - | 95.6 | |||||
Free cash flow (1) | $ | 58.5 | $ | 69.6 |
(a) | Includes $89.5 million in net cash paid for the acquisition of CAGY Industries Inc. (CAGY), $22.6 million in net cash paid for the acquisition of Rotterdam Rail Feeding (RRF) and $3.6 million for final working capital adjustments related to the December 2007 acquisition of Maryland Midland Railway, Inc. (MMID). |
(b) | Includes Australian taxes resulting from the 2006 ARG Sale totaling $95.6 million paid in 2007, as calculated using the U.S. Dollar/Australian Dollar exchange rate on the date of payment. |
GWI’s continuing operations generated free cash flow of $58.5 million and $69.6 million for the nine months ended September 30, 2008 and 2007, respectively. In the nine months of 2008, working capital activities provided $11.6 million to net cash flow from operating activities. Other than the $95.6 million tax payment related to the ARG Sale, which was excluded from free cash flow, working capital activities provided $21.4 million to net cash flow from operations in the 2007 period.
Net cash used in investing activities in the nine months ended September 30, 2008, included $62.0 million in purchases of property and equipment, partially offset by $21.8 million in cash received from government grants and $7.4 million from sales of assets and insurance proceeds. Net cash used in investing activities in the nine months ended September 30, 2007, included $61.3 million in purchases of property and equipment, partially offset by $19.9 million in cash received from government grants and $9.9 million from sales of assets and insurance proceeds.
Discontinued Operations
For the quarter ended September 30, 2008, GWI reported income related to its discontinued Mexican business of $1.1 million after-tax (or $0.03 per diluted share), compared with a net loss of $6.9 million after-tax (or $0.18 per diluted share) for the quarter ended September 30, 2007. Results from discontinued operations in the third quarter of 2008 included a net tax benefit of $0.9 million ($0.02 per diluted share) primarily associated with the filing of GWI’s 2007 U.S. income tax return. For discontinued operations, cash used in operating activities was $2.8 million and $10.7 million for the nine months ended September 30, 2008 and 2007, respectively. There was no cash used in investing activities of discontinued operations for the nine months ended September 30, 2008, compared with $0.5 million for the same period in 2007. As of September 30, 2008, there was a net asset of $0.4 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 third quarter will be held Monday, November 3, 2008 at 11 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 "Third 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 p.m. Monday, November 3, 2008. GWI uses its Web site as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on our website and is accessible on our Internet site at www.gwrr.com by clicking on the "Investors" link. In addition, you may automatically receive email alerts and other information about GWI by enrolling your email by visiting the "Email Alerts" section of our Internet site at www.gwrr.com after clicking on the "Investors" link.
About Genesee & Wyoming Inc.
GWI owns and operates short line and regional freight railroads in the United States, Canada, Australia and the Netherlands and owns a minority interest in a railroad in Bolivia. Operations currently include 63 railroads organized in nine regions, with more than 6,700 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements. GWI provides rail service at 16 ports in North America and Europe and 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. |
Contact: Michael E. Williams
Director, Corporate Communications
Genesee & Wyoming Inc.
+1 (203) 629-3722
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(In thousands, except per share amounts)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
OPERATING REVENUES | $ | 159,432 | $ | 131,224 | $ | 452,828 | $ | 381,625 | |||||
OPERATING EXPENSES | 124,866 | 101,563 | 367,281 | 307,264 | |||||||||
INCOME FROM OPERATIONS | 34,566 | 29,661 | 85,547 | 74,361 | |||||||||
INTEREST INCOME | 597 | 1,107 | 1,753 | 7,069 | |||||||||
INTEREST EXPENSE | (4,250 | ) | (3,613 | ) | (12,203 | ) | (10,626 | ) | |||||
MINORITY INTEREST | (61 | ) | - | (146 | ) | - | |||||||
OTHER (EXPENSE) INCOME, NET | (99 | ) | (47 | ) | 560 | 846 | |||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 30,753 | 27,108 | 75,511 | 71,650 | |||||||||
PROVISION FOR INCOME TAXES | 10,686 | 4,069 | 28,082 | 16,927 | |||||||||
INCOME FROM CONTINUING OPERATIONS | 20,067 | 23,039 | 47,429 | 54,723 | |||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | 1,087 | (6,873 | ) | (487 | ) | (13,494 | ) | ||||||
NET INCOME | $ | 21,154 | $ | 16,166 | $ | 46,942 | $ | 41,229 | |||||
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS | $ | 0.63 | $ | 0.68 | $ | 1.49 | $ | 1.53 | |||||
BASIC EARNINGS (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS | 0.03 | (0.20 | ) | (0.02 | ) | (0.38 | ) | ||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.66 | $ | 0.48 | $ | 1.48 | $ | 1.15 | |||||
WEIGHTED AVERAGE SHARES - BASIC | 32,018 | 34,026 | 31,758 | 35,702 | |||||||||
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS | $ | 0.55 | $ | 0.60 | $ | 1.31 | $ | 1.36 | |||||
DILUTED EARNINGS (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS | 0.03 | (0.18 | ) | (0.01 | ) | (0.34 | ) | ||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.58 | $ | 0.42 | $ | 1.29 | $ | 1.02 | |||||
WEIGHTED AVERAGE SHARES - DILUTED | 36,592 | 38,515 | 36,334 | 40,233 |
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
(In thousands)
(unaudited)
September 30, | December 31, | ||||||
2008 | 2007 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 39,508 | $ | 46,684 | |||
Accounts receivable, net | 140,792 | 125,934 | |||||
Materials and supplies | 8,191 | 7,555 | |||||
Prepaid expenses and other | 9,934 | 18,147 | |||||
Current assets of discontinued operations | 1,483 | 2,213 | |||||
Deferred income tax assets, net | 7,246 | 7,495 | |||||
Total current assets | 207,154 | 208,028 | |||||
PROPERTY AND EQUIPMENT, net | 789,667 | 696,990 | |||||
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 4,894 | 4,696 | |||||
GOODWILL | 57,411 | 39,352 | |||||
INTANGIBLE ASSETS, net | 194,338 | 117,106 | |||||
DEFERRED INCOME TAX ASSETS, net | 197 | 1,353 | |||||
OTHER ASSETS, net | 8,974 | 10,276 | |||||
Total assets | $ | 1,262,635 | $ | 1,077,801 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current portion of long-term debt | $ | 2,301 | $ | 2,247 | |||
Accounts payable | 137,729 | 128,038 | |||||
Accrued expenses | 40,037 | 37,792 | |||||
Current liabilities of discontinued operations | 1,080 | 3,919 | |||||
Deferred income tax liabilities, net | 79 | 66 | |||||
Total current liabilities | 181,226 | 172,062 | |||||
LONG-TERM DEBT, less current portion | 314,699 | 270,519 | |||||
DEFERRED INCOME TAX LIABILITIES, net | 154,280 | 93,336 | |||||
DEFERRED ITEMS - grants from governmental agencies | 111,791 | 94,651 | |||||
OTHER LONG-TERM LIABILITIES | 21,158 | 15,144 | |||||
MINORITY INTEREST | 1,254 | 1,108 | |||||
TOTAL STOCKHOLDERS' EQUITY | 478,227 | 430,981 | |||||
Total liabilities and stockholders' equity | $ | 1,262,635 | $ | 1,077,801 |
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended September 30, | |||||||
2008 | 2007 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 46,942 | $ | 41,229 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss from discontinued operations, net of tax | 487 | 13,494 | |||||
Depreciation and amortization | 28,871 | 23,515 | |||||
Compensation cost related to equity awards | 4,163 | 4,068 | |||||
Excess tax benefits from share-based compensation | (4,169 | ) | (847 | ) | |||
Deferred income taxes | 7,549 | 4,195 | |||||
Net gain on sale of assets | (4,216 | ) | (5,914 | ) | |||
Minority interest | 146 | - | |||||
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions: | |||||||
Accounts receivable, net | (3,357 | ) | (4,514 | ) | |||
Materials and supplies | (662 | ) | 2,197 | ||||
Prepaid expenses and other | 8,968 | (144 | ) | ||||
Accounts payable and accrued expenses | 4,580 | 20,920 | |||||
Income tax payable - Australia | (1,956 | ) | (92,737 | ) | |||
Other assets and liabilities, net | 3,972 | 58 | |||||
Net cash provided by operating activities from continuing operations | 91,318 | 5,520 | |||||
Net cash used in operating activities from discontinued operations | (2,815 | ) | (10,677 | ) | |||
Net cash provided by (used in) operating activities | 88,503 | (5,157 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property and equipment | (61,999 | ) | (61,307 | ) | |||
Grant proceeds from government agencies | 21,832 | 19,949 | |||||
Cash paid for acquisitions, net of cash received | (115,699 | ) | - | ||||
Insurance proceeds for the replacement of assets | 419 | 1,747 | |||||
Proceeds from disposition of property and equipment | 6,992 | 8,106 | |||||
Net cash used in investing activities from continuing operations | (148,455 | ) | (31,505 | ) | |||
Net cash used in investing activities from discontinued operations | - | (517 | ) | ||||
Net cash used in investing activities | (148,455 | ) | (32,022 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Principal payments on long-term borrowings, including capital leases | (117,905 | ) | (1,451 | ) | |||
Proceeds from issuance of long-term debt | 163,000 | 25,000 | |||||
Net proceeds from employee stock purchases | 9,122 | 2,978 | |||||
Treasury stock purchases | (2,355 | ) | (171,018 | ) | |||
Excess tax benefits from share-based compensation | 4,169 | 847 | |||||
Net cash provided by (used in) financing activities from continuing operations | 56,031 | (143,644 | ) | ||||
Net cash used in financing activities from discontinued operations | - | (13,301 | ) | ||||
Net cash provided by (used in) financing activities | 56,031 | (156,945 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (2,907 | ) | 7,838 | ||||
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS | (348 | ) | (1,258 | ) | |||
DECREASE IN CASH AND CASH EQUIVALENTS | (7,176 | ) | (187,544 | ) | |||
CASH AND CASH EQUIVALENTS, beginning of period | 46,684 | 240,206 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 39,508 | $ | 52,662 |
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended | |||||||||||||
September 30, | |||||||||||||
2008 | 2007 | ||||||||||||
% of | % of | ||||||||||||
Amount | Revenue | Amount | Revenue | ||||||||||
Revenues: | |||||||||||||
Freight | $ | 95,602 | 60.0 | % | $ | 83,173 | 63.4 | % | |||||
Non-freight | 63,830 | 40.0 | % | 48,051 | 36.6 | % | |||||||
Total revenues | $ | 159,432 | 100.0 | % | $ | 131,224 | 100.0 | % | |||||
Operating Expense Comparison: | |||||||||||||
Natural Classification | |||||||||||||
Labor and benefits | $ | 48,409 | 30.4 | % | $ | 41,571 | 31.7 | % | |||||
Equipment rents | 9,121 | 5.7 | % | 8,872 | 6.8 | % | |||||||
Purchased services | 11,975 | 7.5 | % | 10,213 | 7.8 | % | |||||||
Depreciation and amortization | 10,219 | 6.4 | % | 7,969 | 6.1 | % | |||||||
Diesel fuel used in operations | 15,948 | 10.0 | % | 10,815 | 8.2 | % | |||||||
Diesel fuel sold to third parties | 9,947 | 6.2 | % | 6,969 | 5.3 | % | |||||||
Casualties and insurance | 3,803 | 2.4 | % | 4,589 | 3.5 | % | |||||||
Materials | 6,211 | 3.9 | % | 6,272 | 4.8 | % | |||||||
Net gain on sale of assets | (1,185 | ) | -0.7 | % | (5,450 | ) | -4.2 | % | |||||
Other expenses | 10,418 | 6.5 | % | 9,743 | 7.4 | % | |||||||
Total operating expenses | $ | 124,866 | 78.3 | % | $ | 101,563 | 77.4 | % | |||||
Functional Classification | |||||||||||||
Transportation | $ | 51,897 | 32.6 | % | $ | 42,261 | 32.2 | % | |||||
Maintenance of ways and structures | 11,718 | 7.3 | % | 11,783 | 9.0 | % | |||||||
Maintenance of equipment | 18,084 | 11.3 | % | 17,426 | 13.3 | % | |||||||
Diesel fuel sold to third parties | 9,947 | 6.2 | % | 6,969 | 5.3 | % | |||||||
General and administrative | 24,186 | 15.2 | % | 20,605 | 15.7 | % | |||||||
Net gain on sale of assets | (1,185 | ) | -0.7 | % | (5,450 | ) | -4.2 | % | |||||
Depreciation and amortization | 10,219 | 6.4 | % | 7,969 | 6.1 | % | |||||||
Total operating expenses | $ | 124,866 | 78.3 | % | $ | 101,563 | 77.4 | % |
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Nine Months Ended | |||||||||||||
September 30, | |||||||||||||
2008 | 2007 | ||||||||||||
% of | % of | ||||||||||||
Amount | Revenue | Amount | Revenue | ||||||||||
Revenues: | |||||||||||||
Freight | $ | 274,749 | 60.7 | % | $ | 247,047 | 64.7 | % | |||||
Non-freight | 178,079 | 39.3 | % | 134,578 | 35.3 | % | |||||||
Total revenues | $ | 452,828 | 100.0 | % | $ | 381,625 | 100.0 | % | |||||
Operating Expense Comparison: | |||||||||||||
Natural Classification | |||||||||||||
Labor and benefits | $ | 140,820 | 31.1 | % | $ | 123,718 | 32.4 | % | |||||
Equipment rents | 26,264 | 5.8 | % | 27,848 | 7.3 | % | |||||||
Purchased services | 35,602 | 7.8 | % | 29,359 | 7.7 | % | |||||||
Depreciation and amortization | 28,871 | 6.4 | % | 23,515 | 6.2 | % | |||||||
Diesel fuel used in operations | 49,311 | 10.9 | % | 31,917 | 8.3 | % | |||||||
Diesel fuel sold to third parties | 28,893 | 6.4 | % | 18,042 | 4.7 | % | |||||||
Casualties and insurance | 11,841 | 2.6 | % | 12,485 | 3.3 | % | |||||||
Materials | 18,808 | 4.1 | % | 17,706 | 4.6 | % | |||||||
Net gain on sale of assets | (4,216 | ) | -0.9 | % | (5,914 | ) | -1.5 | % | |||||
Other expenses | 31,087 | 6.9 | % | 28,588 | 7.5 | % | |||||||
Total operating expenses | $ | 367,281 | 81.1 | % | $ | 307,264 | 80.5 | % | |||||
Functional Classification | |||||||||||||
Transportation | $ | 152,629 | 33.7 | % | $ | 122,014 | 32.0 | % | |||||
Maintenance of ways and structures | 36,249 | 8.0 | % | 34,830 | 9.1 | % | |||||||
Maintenance of equipment | 53,954 | 11.9 | % | 52,622 | 13.8 | % | |||||||
Diesel fuel sold to third parties | 28,893 | 6.4 | % | 18,042 | 4.7 | % | |||||||
General and administrative | 70,901 | 15.6 | % | 62,155 | 16.2 | % | |||||||
Net gain on sale of assets | (4,216 | ) | -0.9 | % | (5,914 | ) | -1.5 | % | |||||
Depreciation and amortization | 28,871 | 6.4 | % | 23,515 | 6.2 | % | |||||||
Total operating expenses | $ | 367,281 | 81.1 | % | $ | 307,264 | 80.5 | % |
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE FREIGHT REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
Three Months Ended | Three Months Ended | ||||||||||||||||||
September 30, 2008 | September 30, 2007 | ||||||||||||||||||
Average Freight | Average Freight | ||||||||||||||||||
Freight | Revenues | Freight | Revenues | ||||||||||||||||
Commodity Group | Revenues | Carloads | Per Carload | Revenues | Carloads | Per Carload | |||||||||||||
Pulp & Paper | $ | 19,180 | 30,705 | $ | 625 | $ | 17,244 | 29,712 | $ | 580 | |||||||||
Coal, Coke & Ores | 17,223 | 48,259 | 357 | 15,551 | 52,307 | 297 | |||||||||||||
Minerals & Stone | 12,952 | 37,797 | 343 | 8,426 | 32,494 | 259 | |||||||||||||
Metals | 12,529 | 25,330 | 495 | 8,721 | 18,796 | 464 | |||||||||||||
Lumber & Forest Products | 9,319 | 20,539 | 454 | 9,151 | 21,519 | 425 | |||||||||||||
Chemicals-Plastics | 8,650 | 12,649 | 684 | 6,967 | 11,169 | 624 | |||||||||||||
Farm & Food Products | 8,247 | 15,161 | 544 | 8,804 | 17,492 | 503 | |||||||||||||
Petroleum Products | 4,382 | 6,434 | 681 | 3,899 | 6,434 | 606 | |||||||||||||
Autos & Auto Parts | 1,719 | 2,422 | 710 | 1,552 | 2,990 | 519 | |||||||||||||
Intermodal | 122 | 315 | 387 | 295 | 580 | 509 | |||||||||||||
Other | 1,279 | 4,442 | 288 | 2,563 | 11,367 | 225 | �� | ||||||||||||
Totals | $ | 95,602 | 204,053 | 469 | $ | 83,173 | 204,860 | 406 |
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE FREIGHT REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
Nine Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2008 | September 30, 2007 | ||||||||||||||||||
Average Freight | Average Freight | ||||||||||||||||||
Freight | Revenues | Freight | Revenues | ||||||||||||||||
Commodity Group | Revenues | Carloads | Per Carload | Revenues | Carloads | Per Carload | |||||||||||||
Pulp & Paper | $ | 55,991 | 91,625 | $ | 611 | $ | 51,749 | 92,604 | $ | 559 | |||||||||
Coal, Coke & Ores | 49,457 | 135,213 | 366 | 44,303 | 143,850 | 308 | |||||||||||||
Minerals & Stone | 33,909 | 106,491 | 318 | 23,269 | 92,173 | 252 | |||||||||||||
Metals | 32,723 | 65,611 | 499 | 27,456 | 59,857 | 459 | |||||||||||||
Farm & Food Products | 29,291 | 51,529 | 568 | 26,298 | 53,621 | 490 | |||||||||||||
Lumber & Forest Products | 25,958 | 58,179 | 446 | 27,704 | 65,354 | 424 | |||||||||||||
Chemicals-Plastics | 24,121 | 36,173 | 667 | 20,118 | 33,450 | 601 | |||||||||||||
Petroleum Products | 13,630 | 20,221 | 674 | 12,193 | 20,105 | 606 | |||||||||||||
Autos & Auto Parts | 5,622 | 9,200 | 611 | 5,317 | 10,552 | 504 | |||||||||||||
Intermodal | 391 | 936 | 418 | 856 | 1,680 | 510 | |||||||||||||
Other | 3,656 | 14,858 | 246 | 7,784 | 36,164 | 215 | |||||||||||||
Totals | $ | 274,749 | 590,036 | 466 | $ | 247,047 | 609,410 | 405 |
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 measure.
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 from Continuing Operations less Net Cash Used in Investing Activities from Continuing Operations, excluding the Cost of Acquisitions and tax effects of Divestitures. 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 from Continuing Operations to GWI's Free Cash Flow ($ in millions):
Nine Months Ended | |||||||
September 30, | |||||||
2008 | 2007 | ||||||
Net cash provided by operating activities from continuing operations | $ | 91.3 | $ | 5.5 | |||
Net cash used in investing activities from continuing operations | (148.5 | ) | (31.5 | ) | |||
Cash paid for acquisitions, net of cash acquired | 115.7 | - | |||||
Australia taxes on ARG Sale | - | 95.6 | |||||
Free cash flow | $ | 58.5 | $ | 69.6 |