Exhibit 99.1
Genesee & Wyoming Reports Results for the Second Quarter of 2018
DARIEN, Conn.--(BUSINESS WIRE)--July 27, 2018--Genesee & Wyoming Inc. (G&W) (NYSE:GWR)
Second Quarter 2018 Consolidated Highlights Compared with Second Quarter 2017
- Operating revenues increased 10.1% to $595.0 million from $540.4 million.
- Reported operating income increased 3.4% to $103.1 million; Adjusted operating income increased 1.1% to $107.0 million.(1)
- Reported diluted earnings per common share (EPS) decreased 1.4% to $0.73 with 60.9 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2017 of $0.74 with 62.4 million weighted average shares outstanding; Adjusted diluted EPS increased 17.5% to $0.94.(1)
- G&W repurchased approximately 1.9 million shares of its Class A Common Stock for $134.9 million during the second quarter of 2018.
Jack Hellmann, Chairman, President and CEO of G&W, commented, “Our reported financial results for the second quarter of 2018 of $0.73 per diluted share were generally consistent with the second quarter of 2017, primarily because of our previously announced U.K. restructuring charges. Our adjusted diluted EPS of $0.94 for the second quarter of 2018 were at the high end of our outlook as business conditions continued to improve in each of our three geographies, led by North America. Our same railroad carloads increased 8% in North America with particular strength in coal, steel and minerals and stone traffic. While our operating leverage in North America during the quarter was adversely impacted by several variables including the mix of business, the lag in fuel surcharge recovery, and legal fees associated with an arbitration proceeding, we expect to see our customarily strong operating leverage for the remainder of 2018 based on our current volume outlook.”
“In Australia, our second quarter results were as expected with particular growth in our spot coal traffic due to the early delivery of a new train set. In the UK/Europe, we successfully initiated our restructuring activities and achieved financial results that were ahead of our expectations.”
“Our business outlook for the remainder of 2018 remains promising thanks to growing customer demand for rail shipments across most commodity groups, particularly in North America. In addition, we have refinanced our senior credit facility with improved terms through 2023, we have more than $600 million of capacity under our revolving credit facility, and we continue to evaluate investment opportunities in multiple markets including the opportunistic purchase of our own shares.”
Second Quarter Segment Highlights
- North America: Operating revenues from G&W's North American Operations increased 7.6% to $339.6 million from $315.7 million. Reported operating income from G&W's North American Operations increased 0.7% to $80.3 million; Adjusted operating income from G&W's North American Operations remained relatively flat at $81.0 million.(1)
- Australia: Operating revenues from G&W's 51.1% owned Australian Operations increased 2.9% to $79.0 million from $76.8 million. Reported operating income from G&W's Australian Operations increased 27.9% to $25.9 million; Adjusted operating income from G&W's Australian Operations decreased 3.6% to $19.6 million.(1)
- U.K./Europe: Operating revenues from G&W's U.K./European Operations increased 19.2% to $176.4 million from $148.0 million, primarily due to new operations and the impact from foreign currency appreciation. Reported operating loss from G&W's U.K./European Operations increased to $3.0 million from $0.2 million; Adjusted operating income from G&W's U.K./European Operations increased to $6.3 million from $4.2 million.(1)
Financial Results
G&W's operating revenues increased $54.6 million, or 10.1%, to $595.0 million in the second quarter of 2018, compared with $540.4 million in the second quarter of 2017. G&W's operating income in the second quarter of 2018 was $103.1 million, compared with $99.7 million in the second quarter of 2017. G&W's adjusted operating income in the second quarter of 2018 was $107.0 million, compared with $105.8 million in the second quarter of 2017.(1)
Reported net income attributable to G&W in the second quarter of 2018 was $44.2 million, compared with reported net income attributable to G&W of $46.0 million in the second quarter of 2017. Excluding the net impact of certain items affecting comparability between periods discussed below, G&W's adjusted net income attributable to G&W in the second quarter of 2018 was $57.2 million, compared with $49.9 million in the second quarter of 2017.(1)
G&W's reported diluted EPS in the second quarter of 2018 were $0.73 with 60.9 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2017 of $0.74 with 62.4 million weighted average shares outstanding. G&W's adjusted diluted EPS in the second quarter of 2018 were $0.94 with 60.9 million weighted average shares outstanding, compared with adjusted diluted EPS in the second quarter of 2017 of $0.80 with 62.4 million weighted average shares outstanding.(1)
Items Affecting Comparability
In the second quarter of 2018 and 2017, 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, 2018 | ||||||||||||||||
Corporate development and related costs | $ | (0.4 | ) | $ | (0.3 | ) | $ | — | ||||||||
Restructuring costs | $ | (9.4 | ) | $ | (7.6 | ) | $ | (0.12 | ) | |||||||
Loss on sale of business | $ | (1.4 | ) | $ | (1.4 | ) | $ | (0.02 | ) | |||||||
Gain on settlement | $ | 6.3 | $ | 2.3 | $ | 0.04 | ||||||||||
Credit facility refinancing-related costs | $ | (2.7 | ) | $ | (2.0 | ) | $ | (0.03 | ) | |||||||
Prior period tax adjustment | $ | — | $ | (4.1 | ) | $ | (0.07 | ) | ||||||||
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 | ||||||||||
In the second quarter of 2018, G&W's results included corporate development and related costs of $0.4 million, restructuring and related costs of $9.4 million, primarily driven by our optimization activities in the U.K., a $1.4 million loss on sale of our Continental Europe intermodal business, ERS Railways B.V. (ERS), and a gain on settlement of $6.3 million from the recovery of pre-petition claims associated with Arrium Limited's voluntary administration (bankruptcy) in the second quarter of 2016. The second quarter of 2018 also included credit facility refinancing-related costs of $2.7 million and a $4.1 million income tax expense associated with uncertain tax deductions on intercompany financing arrangements in the U.K. previously recorded from March 25, 2015, the date of the Freightliner acquisition when the arrangements were established, through March 31, 2018.
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 Transport Limited, as well as restructuring costs of $2.4 million, primarily in G&W's U.K./European Region. The second quarter of 2017 also included a $1.6 million gain on the sale of an investment in the U.S.
Second Quarter Results by Segment
Operating revenues from G&W's North American Operations increased $23.9 million, or 7.6%, to $339.6 million in the second quarter of 2018, compared with $315.7 million in the second quarter of 2017.
North American Operations traffic increased 33,306 carloads, or 8.4%, to 430,353 carloads in the second quarter of 2018. Excluding 1,243 carloads from new operations, same railroad traffic increased 32,063 carloads, or 8.1%. The same railroad traffic increase was principally due to increases of 12,845 carloads of coal and coke traffic (primarily in the Central, Midwest and Northeast regions), 6,111 carloads of metals traffic (primarily in the Southern, Midwest and Central regions), 5,383 carloads of mineral and stone products traffic (primarily in the Northeast and Coastal regions), 2,841 carloads of other commodity traffic (primarily in the Southern, Central and Midwest regions), 1,949 carloads of pulp and paper products traffic (primarily in the Coastal and Central regions), 1,449 carloads of intermodal traffic (primarily in the Northeast Region) and 1,438 carloads of lumber and forest products traffic (primarily in the Western and Central regions), partially offset by a decrease of 1,256 carloads of agricultural products traffic (primarily in the Central Region). All remaining traffic increased by a net 1,303 carloads.
G&W's North American Operations had operating income of $80.3 million in the second quarter of 2018, compared with $79.7 million in the second quarter of 2017. The operating ratio for North American Operations was 76.4% in the second quarter of 2018, compared with an operating ratio of 74.8% in the second quarter of 2017. Adjusted operating income from G&W's North American Operations in the second quarter of 2018 was $81.0 million, compared with adjusted operating income of $81.2 million in the second quarter of 2017. The adjusted operating ratio for North American Operations was 76.1% in the second quarter of 2018, compared with an adjusted operating ratio of 74.3% in the second quarter of 2017.(1)
Operating revenues from G&W's Australian Operations increased $2.2 million, or 2.9%, to $79.0 million in the second quarter of 2018, compared with $76.8 million in the second quarter of 2017. Excluding a $0.6 million increase due to the impact of foreign currency appreciation, Australian Operations revenues increased $1.6 million, or 2.1%, primarily due to an increase in freight revenues.(2)
Australian Operations traffic increased 1,876 carloads to 147,965 carloads in the second quarter of 2018. The traffic increase was principally due to increases of 4,623 carloads of coal and coke traffic and 2,913 carloads of minerals and stone traffic, partially offset by decreases of 3,268 carloads of metallic ores traffic, 1,202 carloads of intermodal traffic and 1,200 carloads of agricultural products traffic. All remaining traffic increased by 10 carloads.
G&W's Australian Operations had operating income of $25.9 million in the second quarter of 2018, compared with $20.3 million in the second quarter of 2017. The operating ratio for Australian Operations was 67.2% in the second quarter of 2018, compared with an operating ratio of 73.6% in the second quarter of 2017. Adjusted operating income from G&W's Australian Operations was $19.6 million in the second quarter of 2018, compared with adjusted operating income of $20.3 million in the second quarter of 2017. The adjusted operating ratio for Australian Operations was 75.2% in the second quarter of 2018, compared with an adjusted operating ratio of 73.5% in the second quarter of 2017.(1)
Operating revenues from G&W's U.K./European Operations increased $28.5 million, or 19.2%, to $176.4 million in the second quarter of 2018, compared with $148.0 million in the second quarter of 2017. Excluding $12.0 million from new operations, a decrease of $3.8 million from G&W's divested ERS operations and a $9.2 million increase due to the impact of foreign currency appreciation, U.K./European same railroad revenues increased $11.0 million, or 7.7%, primarily due to an increase in freight revenues in the U.K. and Poland.(2)
U.K./European Operations traffic decreased 10,901 carloads, or 4.1%, to 256,045 carloads in the second quarter of 2018. Excluding traffic from ERS, same railroad traffic decreased 4,076 carloads, or 1.7%, to 235,222. The same railroad traffic decrease was principally due to decreases of 9,208 carloads of intermodal traffic in the U.K., partially offset by an increase of 5,187 carloads of minerals and stone traffic (primarily in the U.K.). All remaining traffic decreased by 55 carloads.
G&W's U.K./European Operations had an operating loss of $3.0 million in the second quarter of 2018, compared with an operating loss of $0.2 million in the second quarter of 2017. The operating ratio for U.K./European Operations was 101.7% in the second quarter of 2018, compared with an operating ratio of 100.1% in the second quarter of 2017. Adjusted operating income from G&W's U.K./European Operations was $6.3 million in the second quarter of 2018, compared with adjusted operating income of $4.2 million in the second quarter of 2017. The adjusted operating ratio for U.K./European Operations was 96.4% in the second quarter of 2018, compared with an adjusted operating ratio of 97.1% in the second quarter of 2017.(1)
Adjusted Free Cash Flow Measures (1)
Adjusted free cash flow measures for the six months ended June 30, 2018 and 2017 were as follows (in millions):
Six Months Ended | |||||||||||
June 30, | |||||||||||
2018 | 2017 | ||||||||||
Net cash provided by operating activities | $ | 231.3 | $ | 224.3 | |||||||
Allocation of adjusted cash flow to noncontrolling interest(a) | (13.0 | ) | (18.7 | ) | |||||||
Adjusted net cash provided by operating activities attributable to G&W | $ | 218.3 | $ | 205.6 | |||||||
Core capital expenditures(b) | (95.3 | ) | (74.7 | ) | |||||||
Adjusted free cash flow attributable to G&W before new business investments and grant funded projects | $ | 123.1 | $ | 130.9 | |||||||
New business investments | (21.5 | ) | (1.6 | ) | |||||||
Grant funded projects, net of proceeds received from outside parties(c) | $ | 1.0 | $ | 1.1 | |||||||
Adjusted free cash flow attributable to G&W | $ | 102.5 | $ | 130.4 |
(a) | Allocation of adjusted cash flow to noncontrolling interest (Macquarie Infrastructure and Real Assets' (MIRA's) 48.9% equity ownership of G&W Australia Holdings LP (GWA) since December 1, 2016) is calculated as 48.9% of the total of (i) cash flow provided by operating activities of G&W’s Australian Operations, less (ii) net purchases of property and equipment of G&W’s Australian Operations. The timing and amount of actual distributions, if any, from GWA to G&W and MIRA made in any given period will vary and could differ materially from the amounts presented. There were A$40.0 million (or $30.0 million at the average exchange rate in June 2018) of such distributions made for the six months ended June 30, 2018, of which $15.3 million and $14.9 million was distributed to G&W and MIRA, respectively, and no such distributions were made for the six months ended June 30, 2017. G&W expressly disclaims any direct correlation between the allocation of adjusted cash flow to noncontrolling interest and actual distributions made in any given period. | |
(b) | Core capital expenditures represent purchases of property and equipment as presented on the Statement of Cash Flows less grant proceeds from outside parties, insurance proceeds for the replacement of assets and proceeds from disposition of property and equipment, each of which as presented on the Statement of Cash Flows, less new business investments and grant funded projects. | |
(c) | Grant funded projects represent purchases of property and equipment for projects partially or entirely funded by outside parties, net of grant proceeds from outside parties as presented on the Statement of Cash Flows. | |
Share Repurchase Program
During the second quarter of 2018, G&W repurchased approximately 1.9 million shares of Class A Common Stock for $134.9 million, which resulted in a reduction of approximately 1.3 million shares in our weighted average diluted shares during the second quarter.
Conference Call and Webcast Details
As previously announced, G&W's conference call to discuss financial results for the second quarter of 2018 will be held on Friday, July 27, 2018, at 11 a.m. EDT. The dial-in number for the teleconference in the U.S. is (800) 288-9626; outside the U.S., the dial-in number is (612) 332-0345, 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 July 27, 2018, by dialing (800) 475-6701 (or outside the U.S., dialing 320-365-3844). The access code is 439196.
About G&W
G&W owns or leases 121 freight railroads organized in nine locally managed operating regions with 8,000 employees serving 3,000 customers.
- G&W's seven North American regions serve 41 U.S. states and four Canadian provinces and include 115 short line and regional freight railroads with more than 13,000 track-miles.
- G&W's Australia Region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line. The Australia Region is 51.1% owned by G&W and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
- G&W's U.K./Europe Region includes the U.K.'s largest rail maritime intermodal operator and second-largest freight rail provider, as well as regional services in Continental Europe.
G&W subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.
From time to time, we may use our website as a channel of distribution of material company information. Financial and other material information regarding G&W is routinely posted on and accessible at www.gwrr.com/investors. In addition, you may automatically receive email alerts and other information about us by enrolling your email address in the "Email Alerts" section of www.gwrr.com/investors. The information contained on or connected to our Internet website is not deemed to be incorporated by reference in this press release or filed with the United States Securities and Exchange Commission.
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 and port congestion or other substantial disruption of operations; customer demand and changes in our operations or loss of important customers; exposure to the credit risk of customers and counterparties; changes in commodity prices; consummation and integration of acquisitions; economic, political and industry conditions, including employee strikes or work stoppages; retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we or our customers are subject; increased competition in relevant markets; funding needs and financing sources, including our ability to obtain government funding for capital projects; international complexities of operations, currency fluctuations, finance, tax and decentralized management; challenges of managing rapid growth, including retention and development of senior leadership; unpredictability of fuel costs; susceptibility to and outcome of various legal claims, lawsuits and arbitrations; increase in, or volatility associated with, expenses related to estimated claims, self-insured retention amounts and insurance coverage limits; consummation of new business opportunities; decrease in revenues and/or increase in costs and expenses; susceptibility to the risks of doing business in foreign countries; uncertainties arising from a referendum in which voters in the United Kingdom (U.K.) approved an exit from the European Union (E.U.), commonly referred to as Brexit; our ability to integrate acquired businesses successfully or to realize the expected synergies associated with acquisitions; risks associated with our substantial indebtedness; failure to maintain satisfactory working relationships with partners in Australia; failure to maintain an effective system of internal control over financial reporting as well as disclosure controls and procedures and other risks including, but not limited to, those noted in our 2017 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), and the adjusted free cash flow measures of adjusted net cash provided by operating activities attributable to G&W, adjusted free cash flow attributable to G&W and adjusted free cash flow attributable to G&W before new business investments and grant funded projects 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, 2018 AND 2017 | |||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
OPERATING REVENUES | $ | 594,990 | $ | 540,433 | $ | 1,169,651 | $ | 1,059,541 | |||||||||||||
OPERATING EXPENSES | 491,865 | 440,700 | 979,613 | 883,908 | |||||||||||||||||
OPERATING INCOME | 103,125 | 99,733 | 190,038 | 175,633 | |||||||||||||||||
INTEREST INCOME | 584 | 581 | 1,082 | 808 | |||||||||||||||||
INTEREST EXPENSE | (28,940 | ) | (25,785 | ) | (54,176 | ) | (52,150 | ) | |||||||||||||
OTHER LOSS, NET | 288 | 3,196 | (1,752 | ) | 2,651 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 75,057 | 77,725 | 135,192 | 126,942 | |||||||||||||||||
PROVISION FOR INCOME TAXES | (26,446 | ) | (29,597 | ) | (10,556 | ) | (51,525 | ) | |||||||||||||
NET INCOME | $ | 48,611 | $ | 48,128 | $ | 124,636 | $ | 75,417 | |||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 4,443 | 2,121 | 5,370 | 3,172 | |||||||||||||||||
NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC. | $ | 44,168 | $ | 46,007 | $ | 119,266 | $ | 72,245 | |||||||||||||
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON STOCKHOLDERS: | $ | 0.74 | $ | 0.75 | $ | 1.96 | $ | 1.18 | |||||||||||||
WEIGHTED AVERAGE SHARES - BASIC | 59,996 | 61,551 | 60,946 | 61,472 | |||||||||||||||||
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON STOCKHOLDERS: | $ | 0.73 | $ | 0.74 | $ | 1.93 | $ | 1.16 | |||||||||||||
WEIGHTED AVERAGE SHARES - DILUTED | 60,879 | 62,415 | 61,841 | 62,371 | |||||||||||||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
AS OF JUNE 30, 2018 AND DECEMBER 31, 2017 | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
June 30, | December 31, | |||||||||
2018 | 2017 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 69,702 | $ | 80,472 | ||||||
Accounts receivable, net | 436,149 | 416,705 | ||||||||
Materials and supplies | 53,775 | 57,750 | ||||||||
Prepaid expenses and other | 51,263 | 34,606 | ||||||||
Total current assets | 610,889 | 589,533 | ||||||||
PROPERTY AND EQUIPMENT, net | 4,613,849 | 4,656,921 | ||||||||
GOODWILL | 1,136,985 | 1,165,587 | ||||||||
INTANGIBLE ASSETS, net | 1,495,458 | 1,567,038 | ||||||||
DEFERRED INCOME TAX ASSETS, net | 3,608 | 3,343 | ||||||||
OTHER ASSETS | 59,696 | 52,475 | ||||||||
Total assets | $ | 7,920,485 | $ | 8,034,897 | ||||||
LIABILITIES AND EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Current portion of long-term debt | $ | 19,074 | $ | 27,853 | ||||||
Accounts payable | 271,672 | 253,993 | ||||||||
Accrued expenses | 152,016 | 185,935 | ||||||||
Total current liabilities | 442,762 | 467,781 | ||||||||
LONG-TERM DEBT, less current portion | 2,357,245 | 2,303,442 | ||||||||
DEFERRED INCOME TAX LIABILITIES, net | 853,933 | 873,194 | ||||||||
DEFERRED ITEMS - grants from outside parties | 318,611 | 321,592 | ||||||||
OTHER LONG-TERM LIABILITIES | 165,556 | 172,796 | ||||||||
TOTAL EQUITY | 3,782,378 | 3,896,092 | ||||||||
Total liabilities and equity | $ | 7,920,485 | $ | 8,034,897 | ||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017 | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
Six Months Ended | |||||||||||
June 30, | |||||||||||
2018 | 2017 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 124,636 | $ | 75,417 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 131,735 | 122,287 | |||||||||
Stock-based compensation | 8,601 | 8,857 | |||||||||
Deferred income taxes | (11,489 | ) | 34,320 | ||||||||
Net gain on sale and impairment of assets | (1,859 | ) | (781 | ) | |||||||
Changes in assets and liabilities which provided/(used) cash, net of effect of acquisitions: | |||||||||||
Accounts receivable, net | (46,519 | ) | 10,066 | ||||||||
Materials and supplies | 2,460 | 2,198 | |||||||||
Prepaid expenses and other | (7,587 | ) | 14,617 | ||||||||
Accounts payable and accrued expenses | 20,665 | (48,282 | ) | ||||||||
Other assets and liabilities, net | 10,684 | 5,627 | |||||||||
Net cash provided by operating activities | 231,327 | 224,326 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment | (133,328 | ) | (91,498 | ) | |||||||
Grant proceeds from outside parties | 12,901 | 11,630 | |||||||||
Net cash paid for acquisitions, net of cash acquired | — | (102,655 | ) | ||||||||
Proceeds from sale of business | 7,927 | — | |||||||||
Proceeds from sale of investment | — | 2,100 | |||||||||
Insurance proceeds for the replacement of assets | 1,866 | 1,406 | |||||||||
Proceeds from disposition of property and equipment | 2,795 | 3,280 | |||||||||
Other investing activities | (2,921 | ) | — | ||||||||
Net cash used in investing activities | (110,760 | ) | (175,737 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Principal payments on revolving line-of-credit, long-term debt and capital leases | (673,952 | ) | (322,446 | ) | |||||||
Proceeds from revolving line-of-credit and long-term borrowings | 762,228 | 320,191 | |||||||||
Debt amendment/issuance costs | (5,303 | ) | — | ||||||||
Common share repurchases | (192,324 | ) | — | ||||||||
Distribution to noncontrolling interest | (14,898 | ) | — | ||||||||
Installment payments on Freightliner deferred consideration | (6,255 | ) | — | ||||||||
Other financing related activities, net | (893 | ) | 1,708 | ||||||||
Net cash used in financing activities | (131,397 | ) | (547 | ) | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 60 | 3,382 | |||||||||
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (10,770 | ) | 51,424 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 80,472 | 32,319 | |||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 69,702 | $ | 83,743 | |||||||
GENESEE & WYOMING INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||
SELECTED CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 418,232 | 70.3 | % | $ | 383,155 | 70.9 | % | $ | 817,871 | 69.9 | % | $ | 760,900 | 71.8 | % | |||||||||||||||||||||
Freight-related revenues | 142,402 | 23.9 | % | 127,621 | 23.6 | % | 283,599 | 24.2 | % | 246,958 | 23.3 | % | |||||||||||||||||||||||||
All other revenues | 34,356 | 5.8 | % | 29,657 | 5.5 | % | 68,181 | 5.8 | % | 51,683 | 4.9 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 594,990 | 100.0 | % | $ | 540,433 | 100.0 | % | $ | 1,169,651 | 100.0 | % | $ | 1,059,541 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 179,838 | 30.2 | % | $ | 164,222 | 30.4 | % | $ | 363,554 | 31.1 | % | $ | 331,360 | 31.3 | % | |||||||||||||||||||||
Equipment rents | 34,802 | 5.9 | % | 33,237 | 6.2 | % | 68,889 | 5.9 | % | 67,108 | 6.3 | % | |||||||||||||||||||||||||
Purchased services(b) | 61,045 | 10.3 | % | 56,795 | 10.5 | % | 125,147 | 10.7 | % | 107,796 | 10.2 | % | |||||||||||||||||||||||||
Depreciation and amortization | 65,745 | 11.0 | % | 61,513 | 11.4 | % | 131,735 | 11.3 | % | 122,287 | 11.5 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 45,623 | 7.7 | % | 33,030 | 6.1 | % | 91,774 | 7.9 | % | 71,183 | 6.7 | % | |||||||||||||||||||||||||
Electricity used in train operations | 2,044 | 0.3 | % | 2,134 | 0.4 | % | 4,278 | 0.4 | % | 5,307 | 0.5 | % | |||||||||||||||||||||||||
Casualties and insurance | 12,984 | 2.2 | % | 10,179 | 1.9 | % | 22,950 | 2.0 | % | 22,722 | 2.1 | % | |||||||||||||||||||||||||
Materials | 32,376 | 5.4 | % | 26,651 | 4.9 | % | 64,845 | 5.5 | % | 47,197 | 4.5 | % | |||||||||||||||||||||||||
Trackage rights | 23,303 | 3.9 | % | 21,797 | 4.0 | % | 44,281 | 3.8 | % | 44,020 | 4.2 | % | |||||||||||||||||||||||||
Net gain on sale and impairment of assets | (823 | ) | (0.1 | )% | (354 | ) | (0.1 | )% | (1,859 | ) | (0.2 | )% | (781 | ) | (0.1 | )% | |||||||||||||||||||||
Restructuring costs | 9,362 | 1.6 | % | 2,361 | 0.4 | % | 9,645 | 0.8 | % | 6,116 | 0.6 | % | |||||||||||||||||||||||||
Other expenses(c) | 25,566 | 4.3 | % | 29,135 | 5.4 | % | 54,374 | 4.6 | % | 59,593 | 5.6 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 491,865 | 82.7 | % | $ | 440,700 | 81.5 | % | $ | 979,613 | 83.8 | % | $ | 883,908 | 83.4 | % |
(a) | Includes $0.3 million and $0.4 million of corporate development and related costs for the three and six months ended June 30, 2018, respectively. Includes $0.5 million and $2.8 million of 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). | |
(b) | Includes $0.1 million of corporate development and related costs for both the three and six months ended June 30, 2018. Includes $0.2 million and $0.3 million of corporate development and related costs for the three and six months ended June 30, 2017, respectively. | |
(c) | Includes $6.3 million gain on settlement related to Arrium Limited's voluntary administration for both the three and six months ended June 30, 2018. Includes $0.4 million of credit facility refinancing-related costs for both the three and six months ended June 30, 2018. Includes $0.1 million of corporate development and related costs for both the three and six months ended June 30, 2018. Includes $3.0 million and $6.0 million of 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. | |
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, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 259,868 | 76.5 | % | $ | 238,373 | 75.5 | % | $ | 505,285 | 76.0 | % | $ | 476,654 | 75.0 | % | |||||||||||||||||||||
Freight-related revenues | 63,467 | 18.7 | % | 61,183 | 19.4 | % | 127,299 | 19.1 | % | 126,528 | 20.0 | % | |||||||||||||||||||||||||
All other revenues | 16,222 | 4.8 | % | 16,118 | 5.1 | % | 32,603 | 4.9 | % | 31,968 | 5.0 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 339,557 | 100.0 | % | $ | 315,674 | 100.0 | % | $ | 665,187 | 100.0 | % | $ | 635,150 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 109,289 | 32.2 | % | $ | 102,082 | 32.4 | % | $ | 221,206 | 33.3 | % | $ | 212,240 | 33.4 | % | |||||||||||||||||||||
Equipment rents | 13,633 | 4.0 | % | 13,380 | 4.3 | % | 26,133 | 3.9 | % | 27,370 | 4.3 | % | |||||||||||||||||||||||||
Purchased services(b) | 14,652 | 4.3 | % | 15,423 | 4.9 | % | 28,582 | 4.3 | % | 30,096 | 4.7 | % | |||||||||||||||||||||||||
Depreciation and amortization | 41,247 | 12.2 | % | 38,919 | 12.3 | % | 81,878 | 12.3 | % | 77,786 | 12.3 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 23,253 | 6.8 | % | 16,546 | 5.2 | % | 48,733 | 7.3 | % | 37,104 | 5.8 | % | |||||||||||||||||||||||||
Casualties and insurance | 10,156 | 3.0 | % | 7,811 | 2.5 | % | 16,613 | 2.5 | % | 18,044 | 2.8 | % | |||||||||||||||||||||||||
Materials | 13,163 | 3.9 | % | 13,061 | 4.1 | % | 26,353 | 4.0 | % | 26,524 | 4.2 | % | |||||||||||||||||||||||||
Trackage rights | 10,527 | 3.1 | % | 9,189 | 2.9 | % | 19,639 | 2.9 | % | 18,707 | 3.0 | % | |||||||||||||||||||||||||
Net gain on sale and impairment of assets | (706 | ) | (0.2 | )% | (328 | ) | (0.1 | )% | (1,618 | ) | (0.2 | )% | (760 | ) | (0.1 | )% | |||||||||||||||||||||
Restructuring costs | 7 | — | % | 14 | — | % | 41 | — | % | 68 | — | % | |||||||||||||||||||||||||
Other expenses(c) | 24,062 | 7.1 | % | 19,898 | 6.3 | % | 44,193 | 6.6 | % | 40,629 | 6.4 | % | |||||||||||||||||||||||||
Total operating expenses | $ | 259,283 | 76.4 | % | $ | 235,995 | 74.8 | % | $ | 511,753 | 76.9 | % | $ | 487,808 | 76.8 | % | |||||||||||||||||||||
Operating income | $ | 80,274 | $ | 79,679 | $ | 153,434 | $ | 147,342 | |||||||||||||||||||||||||||||
Expenditures for additions to property & equipment, net of grants from outside parties | $ | 48,924 | $ | 40,012 | $ | 87,487 | $ | 64,227 |
(a) | Includes $0.3 million and $0.4 million of corporate development and related costs for the three and six months ended June 30, 2018, respectively. Includes $0.4 million and $2.7 million of 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 P&W. | |
(b) | Includes $0.1 million of corporate development and related costs for the six months ended June 30, 2017. | |
(c) | Includes $0.4 million of credit facility refinancing-related costs for both the three and six months ended June 30, 2018. Includes $0.1 million of corporate and development and related costs for both the three and six months ended June 30, 2018. Includes $1.1 million and $4.0 million of 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. | |
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, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 66,075 | 83.6 | % | $ | 63,753 | 83.0 | % | $ | 129,086 | 83.9 | % | $ | 124,627 | 82.7 | % | |||||||||||||||||||||
Freight-related revenues | 11,515 | 14.6 | % | 11,500 | 15.0 | % | 22,078 | 14.3 | % | 23,209 | 15.4 | % | |||||||||||||||||||||||||
All other revenues | 1,439 | 1.8 | % | 1,556 | 2.0 | % | 2,699 | 1.8 | % | 2,880 | 1.9 | % | |||||||||||||||||||||||||
Total operating revenues | $ | 79,029 | 100.0 | % | $ | 76,809 | 100.0 | % | $ | 153,863 | 100.0 | % | $ | 150,716 | 100.0 | % | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||
Labor and benefits | $ | 18,886 | 23.9 | % | $ | 17,775 | 23.1 | % | $ | 37,918 | 24.7 | % | $ | 34,829 | 23.1 | % | |||||||||||||||||||||
Equipment rents | 1,183 | 1.5 | % | 1,334 | 1.7 | % | 2,498 | 1.6 | % | 2,735 | 1.8 | % | |||||||||||||||||||||||||
Purchased services | 6,895 | 8.7 | % | 6,470 | 8.4 | % | 13,284 | 8.6 | % | 12,682 | 8.4 | % | |||||||||||||||||||||||||
Depreciation and amortization | 15,288 | 19.4 | % | 14,970 | 19.5 | % | 31,295 | 20.3 | % | 30,162 | 20.0 | % | |||||||||||||||||||||||||
Diesel fuel used in train operations | 8,173 | 10.3 | % | 6,320 | 8.2 | % | 15,483 | 10.1 | % | 12,910 | 8.6 | % | |||||||||||||||||||||||||
Casualties and insurance | 1,766 | 2.2 | % | 1,379 | 1.8 | % | 3,547 | 2.3 | % | 2,852 | 1.9 | % | |||||||||||||||||||||||||
Materials | 2,761 | 3.5 | % | 2,517 | 3.3 | % | 5,722 | 3.7 | % | 5,231 | 3.5 | % | |||||||||||||||||||||||||
Trackage rights | 2,364 | 3.0 | % | 3,484 | 4.6 | % | 4,578 | 3.0 | % | 6,892 | 4.6 | % | |||||||||||||||||||||||||
Net gain on sale and impairment of assets | (67 | ) | (0.1 | )% | (20 | ) | — | % | (113 | ) | (0.1 | )% | (22 | ) | — | % | |||||||||||||||||||||
Restructuring costs | — | — | % | — | — | % | — | — | % | 338 | 0.2 | % | |||||||||||||||||||||||||
Other expenses, net(a) | (4,116 | ) | (5.2 | )% | 2,330 | 3.0 | % | (2,221 | ) | (1.4 | )% | 4,698 | 3.1 | % | |||||||||||||||||||||||
Total operating expenses | $ | 53,133 | 67.2 | % | $ | 56,559 | 73.6 | % | $ | 111,991 | 72.8 | % | $ | 113,307 | 75.2 | % | |||||||||||||||||||||
Operating income | $ | 25,896 | $ | 20,250 | $ | 41,872 | $ | 37,409 | |||||||||||||||||||||||||||||
Expenditures for additions to property & equipment, net of grants from outside parties | $ | 14,489 | $ | 3,714 | $ | 19,751 | $ | 5,176 |
(a) | Includes $6.3 million gain on settlement related to Arrium Limited's voluntary administration for both the three and six months ended June 30, 2018. Includes $0.1 million and $0.2 million of corporate development and related costs for the three and six months ended June 30, 2017, respectively. | |
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, | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | |||||||||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||||||||||
Freight revenues | $ | 92,289 | 52.3 | % | $ | 81,029 | 54.8 | % | $ | 183,500 | 52.3 | % | $ | 159,619 | 58.3 | % | ||||||||||||||||||||
Freight-related revenues | 67,420 | 38.2 | % | 54,938 | 37.1 | % | 134,222 | 38.3 | % | 97,221 | 35.5 | % | ||||||||||||||||||||||||
All other revenues | 16,695 | 9.5 | % | 11,983 | 8.1 | % | 32,879 | 9.4 | % | 16,835 | 6.2 | % | ||||||||||||||||||||||||
Total operating revenues | $ | 176,404 | 100.0 | % | $ | 147,950 | 100.0 | % | $ | 350,601 | 100.0 | % | $ | 273,675 | 100.0 | % | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||
Labor and benefits(a) | $ | 51,663 | 29.3 | % | $ | 44,365 | 29.9 | % | $ | 104,430 | 29.8 | % | $ | 84,291 | 30.8 | % | ||||||||||||||||||||
Equipment rents | 19,986 | 11.3 | % | 18,523 | 12.5 | % | 40,258 | 11.5 | % | 37,003 | 13.5 | % | ||||||||||||||||||||||||
Purchased services(b) | 39,498 | 22.4 | % | 34,902 | 23.6 | % | 83,281 | 23.8 | % | 65,018 | 23.8 | % | ||||||||||||||||||||||||
Depreciation and amortization | 9,210 | 5.2 | % | 7,624 | 5.1 | % | 18,562 | 5.3 | % | 14,339 | 5.2 | % | ||||||||||||||||||||||||
Diesel fuel used in train operations | 14,197 | 8.0 | % | 10,164 | 6.9 | % | 27,558 | 7.9 | % | 21,169 | 7.7 | % | ||||||||||||||||||||||||
Electricity used in train operations | 2,044 | 1.2 | % | 2,134 | 1.4 | % | 4,278 | 1.2 | % | 5,307 | 2.0 | % | ||||||||||||||||||||||||
Casualties and insurance | 1,062 | 0.6 | % | 989 | 0.7 | % | 2,790 | 0.8 | % | 1,826 | 0.7 | % | ||||||||||||||||||||||||
Materials | 16,452 | 9.3 | % | 11,073 | 7.5 | % | 32,770 | 9.3 | % | 15,442 | 5.6 | % | ||||||||||||||||||||||||
Trackage rights | 10,412 | 5.9 | % | 9,124 | 6.2 | % | 20,064 | 5.7 | % | 18,421 | 6.7 | % | ||||||||||||||||||||||||
Net (gain)/loss on sale and impairment of assets | (50 | ) | — | % | (6 | ) | — | % | (128 | ) | — | % | 1 | — | % | |||||||||||||||||||||
Restructuring costs | 9,355 | 5.3 | % | 2,347 | 1.6 | % | 9,604 | 2.7 | % | 5,710 | 2.1 | % | ||||||||||||||||||||||||
Other expenses(c) | 5,620 | 3.2 | % | 6,907 | 4.7 | % | 12,402 | 3.5 | % | 14,266 | 5.2 | % | ||||||||||||||||||||||||
Total operating expenses | $ | 179,449 | 101.7 | % | $ | 148,146 | 100.1 | % | $ | 355,869 | 101.5 | % | $ | 282,793 | 103.3 | % | ||||||||||||||||||||
Operating loss | $ | (3,045 | ) | $ | (196 | ) | $ | (5,268 | ) | $ | (9,118 | ) | ||||||||||||||||||||||||
Expenditures for additions to property & equipment, net of grants from outside parties | $ | 4,726 | $ | 6,175 | $ | 13,189 | $ | 10,465 |
(a) | Includes $0.1 million of 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 of 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. | |
(c) | Includes a reduction of $0.1 million of corporate development and related costs for the six months ended June 30, 2018. Includes $1.8 million of 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. | |
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, 2018 | North American Operations | Australian Operations | U.K./European Operations | Total Operations | ||||||||||||||||||||||||||||||||||||||||
Commodity Group | Freight | Carloads* | Average | Freight | Carloads* | Average | Freight | Carloads* | Average | Freight | Carloads* | Average | ||||||||||||||||||||||||||||||||
Agricultural Products | $ | 29,693 | 51,762 | $ | 574 | $ | 6,006 | 14,175 | $ | 424 | $ | 785 | 607 | $ | 1,293 | $ | 36,484 | 66,544 | $ | 548 | ||||||||||||||||||||||||
Autos & Auto Parts | 5,806 | 9,106 | 638 | — | — | — | — | — | — | 5,806 | 9,106 | 638 | ||||||||||||||||||||||||||||||||
Chemicals & Plastics | 38,972 | 45,285 | 861 | — | — | — | — | — | — | 38,972 | 45,285 | 861 | ||||||||||||||||||||||||||||||||
Coal & Coke | 19,087 | 59,346 | 322 | 32,570 | 97,282 | 335 | 2,687 | 4,038 | 665 | 54,344 | 160,666 | 338 | ||||||||||||||||||||||||||||||||
Food & Kindred Products | 8,476 | 14,907 | 569 | — | — | — | — | — | — | 8,476 | 14,907 | 569 | ||||||||||||||||||||||||||||||||
Intermodal | 380 | 3,816 | 100 | 17,102 | 13,957 | 1,225 | 66,483 | 201,058 | 331 | 83,965 | 218,831 | 384 | ||||||||||||||||||||||||||||||||
Lumber & Forest Products | 23,810 | 37,733 | 631 | — | — | — | — | — | — | 23,810 | 37,733 | 631 | ||||||||||||||||||||||||||||||||
Metallic Ores | 3,670 | 4,448 | 825 | 8,125 | 5,586 | 1,455 | — | — | — | 11,795 | 10,034 | 1,176 | ||||||||||||||||||||||||||||||||
Metals | 32,493 | 40,806 | 796 | — | — | — | — | — | — | 32,493 | 40,806 | 796 | ||||||||||||||||||||||||||||||||
Minerals & Stone | 38,034 | 62,156 | 612 | 2,087 | 16,891 | 124 | 22,326 | 50,322 | 444 | 62,447 | 129,369 | 483 | ||||||||||||||||||||||||||||||||
Petroleum Products | 16,151 | 24,340 | 664 | 185 | 74 | 2,500 | 8 | 20 | 400 | 16,344 | 24,434 | 669 | ||||||||||||||||||||||||||||||||
Pulp & Paper | 29,514 | 41,762 | 707 | — | — | — | — | — | — | 29,514 | 41,762 | 707 | ||||||||||||||||||||||||||||||||
Waste | 7,339 | 14,837 | 495 | — | — | — | — | — | — | 7,339 | 14,837 | 495 | ||||||||||||||||||||||||||||||||
Other | 6,443 | 20,049 | 321 | — | — | — | — | — | — | 6,443 | 20,049 | 321 | ||||||||||||||||||||||||||||||||
Totals | $ | 259,868 | 430,353 | $ | 604 | $ | 66,075 | 147,965 | $ | 447 | $ | 92,289 | 256,045 | $ | 360 | $ | 418,232 | 834,363 | $ | 501 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
* 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, 2018 | 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 | $ | 61,065 | 105,526 | $ | 579 | $ | 11,489 | 27,287 | $ | 421 | $ | 2,020 | 1,573 | $ | 1,284 | $ | 74,574 | 134,386 | $ | 555 | ||||||||||||||||||||||||
Autos & Auto Parts | 11,173 | 17,822 | 627 | — | — | — | — | — | — | 11,173 | 17,822 | 627 | ||||||||||||||||||||||||||||||||
Chemicals & Plastics | 75,189 | 88,627 | 848 | — | — | — | — | — | — | 75,189 | 88,627 | 848 | ||||||||||||||||||||||||||||||||
Coal & Coke | 39,032 | 121,312 | 322 | 64,149 | 194,138 | 330 | 6,163 | 9,933 | 620 | 109,344 | 325,383 | 336 | ||||||||||||||||||||||||||||||||
Food & Kindred Products | 16,826 | 30,090 | 559 | — | — | — | — | — | — | 16,826 | 30,090 | 559 | ||||||||||||||||||||||||||||||||
Intermodal | 689 | 6,900 | 100 | 33,075 | 26,711 | 1,238 | 133,804 | 411,838 | 325 | 167,568 | 445,449 | 376 | ||||||||||||||||||||||||||||||||
Lumber & Forest Products | 46,249 | 73,983 | 625 | — | — | — | — | — | — | 46,249 | 73,983 | 625 | ||||||||||||||||||||||||||||||||
Metallic Ores | 7,243 | 8,844 | 819 | 15,856 | 10,457 | 1,516 | — | — | — | 23,099 | 19,301 | 1,197 | ||||||||||||||||||||||||||||||||
Metals | 60,887 | 76,044 | 801 | — | — | — | — | — | — | 60,887 | 76,044 | 801 | ||||||||||||||||||||||||||||||||
Minerals & Stone | 68,552 | 109,852 | 624 | 4,181 | 32,754 | 128 | 41,505 | 94,466 | 439 | 114,238 | 237,072 | 482 | ||||||||||||||||||||||||||||||||
Petroleum Products | 34,634 | 50,000 | 693 | 336 | 133 | 2,526 | 8 | 20 | 400 | 34,978 | 50,153 | 697 | ||||||||||||||||||||||||||||||||
Pulp & Paper | 58,385 | 83,119 | 702 | — | — | — | — | — | — | 58,385 | 83,119 | 702 | ||||||||||||||||||||||||||||||||
Waste | 13,227 | 26,818 | 493 | — | — | — | — | — | — | 13,227 | 26,818 | 493 | ||||||||||||||||||||||||||||||||
Other | 12,134 | 37,429 | 324 | — | — | — | — | — | — | 12,134 | 37,429 | 324 | ||||||||||||||||||||||||||||||||
Totals | $ | 505,285 | 836,366 | $ | 604 | $ | 129,086 | 291,480 | $ | 443 | $ | 183,500 | 517,830 | $ | 354 | $ | 817,871 | 1,645,676 | $ | 497 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
* 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 operating expenses, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS) and the adjusted free cash flow measures of adjusted net cash provided by operating activities attributable to G&W, adjusted free cash flow attributable to G&W and adjusted free cash flow attributable to G&W before new business investments and grant funded projects, 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 the adjusted free cash flow measures, 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 adjusted free cash flow measures 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, 2018 | |||||||||||||||||||||
North | Australian | U.K./ | Total | ||||||||||||||||||
Operating revenues | $ | 339.6 | $ | 79.0 | $ | 176.4 | $ | 595.0 | |||||||||||||
Operating expenses | 259.3 | 53.1 | 179.4 | 491.9 | |||||||||||||||||
Operating income/(loss)(a) | $ | 80.3 | $ | 25.9 | $ | (3.0 | ) | $ | 103.1 | ||||||||||||
Operating ratio (b) | 76.4 | % | 67.2 | % | 101.7 | % | 82.7 | % | |||||||||||||
Operating expenses | $ | 259.3 | $ | 53.1 | $ | 179.4 | $ | 491.9 | |||||||||||||
Corporate development and related costs | (0.3 | ) | — | — | (0.4 | ) | |||||||||||||||
Restructuring costs | — | — | (9.4 | ) | (9.4 | ) | |||||||||||||||
Credit facility refinancing-related costs | (0.4 | ) | — | — | (0.4 | ) | |||||||||||||||
Gain on settlement | — | 6.3 | — | 6.3 | |||||||||||||||||
Adjusted operating expenses | $ | 258.5 | $ | 59.4 | $ | 170.1 | $ | 488.0 | |||||||||||||
Adjusted operating income | $ | 81.0 | $ | 19.6 | $ | 6.3 | $ | 107.0 | |||||||||||||
Adjusted operating ratio | 76.1 | % | 75.2 | % | 96.4 | % | 82.0 | % |
(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, 2017 | |||||||||||||||||||||
North | Australian | U.K./ | Total | ||||||||||||||||||
Operating revenues | $ | 315.7 | $ | 76.8 | $ | 148.0 | $ | 540.4 | |||||||||||||
Operating expenses | 236.0 | 56.6 | 148.1 | 440.7 | |||||||||||||||||
Operating income/(loss) (a) | $ | 79.7 | $ | 20.3 | $ | (0.2 | ) | $ | 99.7 | ||||||||||||
Operating ratio (b) | 74.8 | % | 73.6 | % | 100.1 | % | 81.5 | % | |||||||||||||
Operating expenses | $ | 236.0 | $ | 56.6 | $ | 148.1 | $ | 440.7 | |||||||||||||
Corporate development and related costs | (1.5 | ) | (0.1 | ) | (2.1 | ) | (3.7 | ) | |||||||||||||
Restructuring costs | — | — | (2.3 | ) | (2.4 | ) | |||||||||||||||
Adjusted operating expenses | $ | 234.5 | $ | 56.5 | $ | 143.7 | $ | 434.7 | |||||||||||||
Adjusted operating income | $ | 81.2 | $ | 20.3 | $ | 4.2 | $ | 105.8 | |||||||||||||
Adjusted operating ratio | 74.3 | % | 73.5 | % | 97.1 | % | 80.4 | % |
(a) | Operating income is calculated as operating revenues less operating expenses. | |
(b) | Operating ratio is calculated as operating expenses divided by operating revenues. | |
Adjusted Net Income and Adjusted Diluted EPS
Three Months Ended June 30, 2018 | Income | Provision for Income Taxes | Net Income | Diluted EPS | |||||||||||||||||
As reported | $ | 75.1 | $ | (26.4 | ) | $ | 44.2 | $ | 0.73 | ||||||||||||
Add back certain items: | |||||||||||||||||||||
Corporate development and related costs | 0.4 | (0.1 | ) | 0.3 | — | ||||||||||||||||
Restructuring costs | 9.4 | (1.8 | ) | 7.6 | 0.12 | ||||||||||||||||
Loss from sale of ERS | 1.4 | — | 1.4 | 0.02 | |||||||||||||||||
Gain on settlement | (6.3 | ) | 1.9 | (2.3 | ) | (0.04 | ) | ||||||||||||||
Credit facility refinancing-related costs | 2.7 | (0.7 | ) | 2.0 | 0.03 | ||||||||||||||||
Prior period tax adjustment | — | 4.1 | 4.1 | 0.07 | |||||||||||||||||
As adjusted | $ | 82.5 | $ | (23.0 | ) | $ | 57.2 | $ | 0.94 |
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 | ||||||||||||
Adjusted Free Cash Flow Measures
Six Months Ended | |||||||||||
June 30, | |||||||||||
2018 | 2017 | ||||||||||
Net cash provided by operating activities | $ | 231.3 | $ | 224.3 | |||||||
Allocation of adjusted cash flow to noncontrolling interest(a) | (13.0 | ) | (18.7 | ) | |||||||
Adjusted net cash provided by operating activities attributable to G&W | $ | 218.3 | $ | 205.6 | |||||||
Core capital expenditures(b) | (95.3 | ) | (74.7 | ) | |||||||
Adjusted free cash flow attributable to G&W before new business investments and grant funded projects | $ | 123.1 | $ | 130.9 | |||||||
New business investments(b) | (21.5 | ) | (1.6 | ) | |||||||
Grant funded projects, net of proceeds received from outside parties(b) | 1.0 | 1.1 | |||||||||
Adjusted free cash flow attributable to G&W | $ | 102.5 | $ | 130.4 |
(a) | Allocation of adjusted cash flow to noncontrolling interest (Macquarie Infrastructure and Real Assets' (MIRA's) 48.9% equity ownership of G&W Australia Holdings LP (GWA) since December 1, 2016) is calculated as 48.9% of the total of (i) cash flow provided by operating activities of G&W’s Australian Operations, less (ii) net purchases of property and equipment of G&W’s Australian Operations. The timing and amount of actual distributions, if any, from GWA to G&W and MIRA made in any given period will vary and could differ materially from the amounts presented. There were A$40.0 million (or $30.0 million at the average exchange rate in June 2018) of such distributions made for the six months ended June 30, 2018, of which $15.3 million and $14.9 million was distributed to G&W and MIRA, respectively, and no such distributions were made for the six months ended June 30, 2017. G&W expressly disclaims any direct correlation between the allocation of adjusted cash flow to noncontrolling interest and actual distributions made in any given period. | |
(b) | See breakout below. | |
Six Months Ended June 30, 2018 | |||||||||||||||||||||
Core | New Business | Grant | Total | ||||||||||||||||||
Purchase of property and equipment | $ | (99.9 | ) | $ | (21.5 | ) | $ | (11.9 | ) | $ | (133.3 | ) | |||||||||
Grant proceeds from outside parties | — | — | 12.9 | 12.9 | |||||||||||||||||
Insurance proceeds for the replacement of assets | 1.9 | — | — | 1.9 | |||||||||||||||||
Proceeds from disposition of property and equipment | 2.8 | — | — | 2.8 | |||||||||||||||||
Purchase of property and equipment, net | $ | (95.3 | ) | $ | (21.5 | ) | $ | 1.0 | $ | (115.8 | ) | ||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||
Core | New Business | Grant | Total | ||||||||||||||||||
Purchase of property and equipment | $ | (79.4 | ) | $ | (1.6 | ) | $ | (10.5 | ) | $ | (91.5 | ) | |||||||||
Grant proceeds from outside parties | — | — | 11.6 | 11.6 | |||||||||||||||||
Insurance proceeds for the replacement of assets | 1.4 | — | — | 1.4 | |||||||||||||||||
Proceeds from disposition of property and equipment | 3.3 | — | — | 3.3 | |||||||||||||||||
Purchase of property and equipment, net | $ | (74.7 | ) | $ | (1.6 | ) | $ | 1.1 | $ | (75.2 | ) |
(c) | Core capital expenditures represent purchases of property and equipment as presented on the Statement of Cash Flows less grant proceeds from outside parties, insurance proceeds for the replacement of assets and proceeds from disposition of property a nd equipment, each of which as presented on the Statement of Cash Flows, less new business investments and grant funded projects. | |
(d) | Grant funded projects represent purchases of property and equipment for projects partially or entirely funded by outside parties, net of grant proceeds from outside parties as presented on the Statement of Cash Flows. |
CONTACT:
G&W Corporate Communications
Michael Williams, 1-203-202-8900
mwilliams@gwrr.com