Exhibit 99.1
GENESEE & WYOMING REPORTS RESULTS FOR THE THIRD QUARTER OF 2006
GREENWICH, Conn., Nov. 1, 2006 /PRNewswire-FirstCall/ -- Genesee & Wyoming
Inc. (GWI) (NYSE: GWR) reported a net loss of $12.1 million in the third quarter
of 2006, compared to net income of $17.0 million in the third quarter of 2005.
GWI's diluted loss per share in the third quarter of 2006 was $0.32 with 37.7
million shares outstanding, compared to diluted earnings per share of $0.41 with
41.8 million shares outstanding in the third quarter of 2005. In accordance with
accounting standards generally accepted in the U.S., because of the loss
reported, the diluted shares outstanding for the third quarter of 2006 exclude
the effects of 4.6 million potential common shares from our Class B common stock
and our stock-based compensation plans. Results for the third quarter of 2006
included certain charges and gains that totaled a net loss of $23.8 million
($28.0 million after-tax, or $0.74 per diluted share). Results for the third
quarter of 2005 included a gain of $0.05 per share on the sale of surplus rail.
Significant items impacting GWI's results for the third quarter of 2006 are
enumerated in the following table:
(dollars in millions, except per diluted share amounts)
Pre-Tax After-Tax EPS
Item Amount Amount Impact
- ---------------------------------------- ---------- ---------- ----------
Non-Cash Write-down of Mexican Assets $ (33.1) $ (34.1) $ (0.90)
ARG Sale Post-Closing Adjustments $ 10.4 $ 6.8 $ 0.18
Settlement of Galveston Litigation $ (1.1) $ (0.7) $ (0.02)
$ (23.8) $ (28.0) $ (0.74)
As a result of the indefinite delay in the reconstruction of a
hurricane-damaged rail line in Chiapas, GWI recorded a non-cash charge in the
third quarter of 2006 of approximately US$34.1 million after-tax, or $0.90 per
share, reflecting the non-cash write-down of its Mexican non-current assets and
related effects. The write-down of the Mexican assets is more fully described in
a press release that GWI also issued today.
On June 1, 2006, GWI and its joint venture partner, Wesfarmers Limited
(Wesfarmers), completed the sale of their Western Australia operations and
certain other assets of the Australian Railroad Group (ARG) to Queensland Rail
and Babcock & Brown Limited. ARG was 50 percent-owned by GWI and 50
percent-owned by Wesfarmers. This sale resulted in a gain of $208.4 million in
the second quarter of 2006 ($123.0 million after-tax, or $2.89 per share). In
the third quarter of 2006, GWI received payment of its share of the post-closing
adjustments from the sale, and recorded an additional gain of $10.4 million
($6.8 million after-tax, or $0.18 per diluted share).
Operating Results
In the third quarter of 2006, GWI's revenue increased 21.9 percent to $128.3
million, compared to $105.3 million in the third quarter of 2005. Of this $23.1
million increase in revenue, $5.7 million was from same-railroad growth in the
U.S. and Canada, while $20.2 million was from GWI's acquisition in South
Australia and a small acquisition in the U.S. These gains were partially offset
by a $2.8 million decrease in revenue in Mexico. The 6.0 percent growth in
same-railroad revenue in the U.S. and Canada was primarily due to freight
revenue increases of $2.0 million in coal and $1.8 million in metals.
Same-railroad revenue per carload increased by 6.9 percent (on higher rates of
4.5 percent, higher fuel surcharge of 3.9 percent, partially offset by a
decrease of 1.5 percent due to a change of commodity mix). GWI's same-railroad
revenue per carload in the U.S. and Canada increased by 9.4 percent (on higher
rates of 6.4 percent, higher fuel surcharges of 4.4 percent, partially offset by
a 1.4 percent decrease due to a change of commodity mix).
GWI's operating loss in the third quarter of 2006 was $13.0 million,
compared with operating income of $24.1 million in the third quarter of 2005.
Excluding the non-cash write-down and related charges in Mexico of $33.1 million
($34.1 million after-tax), third quarter of 2006 operating income was $21.2
million. GWI's operating results in the third quarter of 2006 also included $1.1
million of pre-tax expense associated with a legal settlement, while operating
results from 2005 included a $3.4 million pre-tax gain on the disposition of
surplus rail.
Excluding the impairment and related charges, GWI's Mexican operations had
an operating loss of $2.0 million in the third quarter of 2006, compared to
operating income of $1.2 million in the third quarter of 2005. Mexican operating
results for the third quarter of 2006 were adversely affected by i) the
inoperability of a portion of the hurricane-damaged Chiapas line, ii) the loss
of certain other long-haul traffic to barge, and iii) track-caused derailments
during the rainy season. GWI's operating ratio in the third quarter of 2006 was
110.1 percent, compared to 77.1 percent in the third quarter of 2005. Excluding
Mexico and the other significant items described above, GWI's operating ratio
was 79.9 percent in the third quarter of 2006 compared with 79.5 percent in the
third quarter of 2005.(1)
GWI's traffic in the third quarter of 2006 increased by approximately 21,700
carloads, or 10.6 percent, compared with the third quarter of 2005. Excluding
traffic from acquisitions, same railroad traffic in the third quarter of 2006
decreased by approximately 7,500 carloads, or 3.7 percent. Included in this
decrease was a decline of approximately 2,900 carloads in GWI's Mexico Region.
Free Cash Flow (dollars in millions)(2)
Nine Months Ended September 30,
--------------------------------
2006 2005
-------------- --------------
Net cash provided by operating
activities $ 63.8 $ 50.9
Net cash provided by (used in)
investing activities $ 252.6 $ (261.9)
Cash proceeds from divestitures $ (306.7) -
Cash used for acquisitions $ 21.2 $ 244.7
Free cash flow $ 30.8 $ 33.8
For the nine months ended September 30, 2006, GWI generated net cash
provided by operating activities of $63.8 million and free cash flow of $30.8
million. GWI's free cash flow for the nine months ended September 30, 2006,
included an increase in working capital of $4.9 million and project-specific
capital expenditures of $5.4 million. Project-specific capital expenditures
include items such as track and equipment capital associated with new business
development and the buy-out of certain equipment leases.
For the nine months ended September 30, 2005, GWI generated net cash
provided by operating activities of $50.9 million and free cash flow of $33.8
million. GWI's free cash flow for the nine months ended September 30, 2005,
included an increase in working capital of $3.2 million and project-specific
capital expenditures of $1.2 million.
Comments from the Chief Executive Officer
Mortimer B. Fuller, Chairman and CEO of GWI, commented, "We are disappointed
by the failure to resolve the Mexican situation and the necessity to take this
significant write-down. As we announced today, the increased cost and indefinite
timing of the Chiapas rail line reconstruction have resulted in an unsustainable
business. Without support from the Mexican Government until the Chiapas line is
reconstructed, FCCM is not a viable enterprise. We are working closely with the
Mexican Government to resolve the situation as expeditiously as possible and are
considering all alternatives."
Mr. Fuller continued, "Meanwhile, the core operating profits of GWI,
excluding Mexico and other items identified in this release, increased more than
24 percent versus the third quarter of last year, performance which was ahead of
our expectations. Despite general weakness in paper and forest products
shipments, we have been able to improve yields and control costs, resulting in a
core operating ratio of approximately 80 percent in the third quarter of 2006,
comparable to that in the third quarter of 2005."(1)
Conference Call and Webcast Details
As previously announced, GWI's conference call to discuss financial results
for the third quarter will be held today at 11:00 a.m. (Eastern Time). The
dial-in number for the teleconference is 877-209-0397; outside U.S., call
612-332-0932, 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 2:30 p.m.
this afternoon.
About Genesee & Wyoming Inc.
GWI is a leading operator of short line and regional freight railroads in
the United States, Canada, Mexico, Australia and Bolivia. GWI railroads operate
in 26 US states and two Canadian provinces and serve 11 US ports. GWI operates
over 5,900 miles of owned and leased track and approximately 3,700 additional
miles under track access arrangements
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 conditions,
customer demand, increased competition in relevant markets, and others. 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. Operating income/losses and operating ratios that exclude the items
described above are non-GAAP measures and are not intended to replace the
operating income/loss or operating ratios calculated using total
operating expenses and total revenue, calculated on a basis consistent
with GAAP. The information required by Regulation G under the Securities
Exchange Act of 1934, including reconciliation to the operating income
calculated using amounts determined in accordance with GAAP, is included
in the tables attached to this press release.
2. Free cash flow is a non-GAAP 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:
Christopher Capot
Director - Corporate Communications
Genesee & Wyoming Inc.
203-629-3722
Cell 203-379-8019
Investor Contact
T. J. Gallagher
Chief Financial Officer, Genesee & Wyoming Inc.
203-629-3722
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
OPERATING REVENUES $ 128,304 $ 105,250 $ 354,876 $ 282,073
OPERATING EXPENSES 141,269 81,171 329,436 227,715
(LOSS) INCOME FROM OPERATIONS (12,965) 24,079 25,440 54,358
GAIN ON SALE OF EQUITY INVESTMENT
IN ARG 10,421 - 218,845 -
INVESTMENT LOSS - BOLIVIA - - (5,878) -
EQUITY INCOME (LOSS) OF
UNCONSOLIDATED
INTERNATIONAL AFFILIATES - 3,585 (10,752) 10,440
INTEREST INCOME 3,279 154 4,461 253
INTEREST EXPENSE (3,890) (4,919) (13,587) (9,875)
OTHER INCOME (EXPENSE), NET 776 (72) 2,257 (549)
(LOSS) INCOME BEFORE INCOME TAXES (2,379) 22,827 220,786 54,627
PROVISION FOR INCOME TAXES 9,727 5,783 101,129 15,319
NET (LOSS) INCOME $ (12,106) $ 17,044 $ 119,657 $ 39,308
BASIC (LOSS) EARNINGS PER SHARE $ (0.32) $ 0.46 $ 3.18 $ 1.07
WEIGHTED AVERAGE SHARES -
BASIC 37,739 37,035 37,600 36,829
DILUTED (LOSS) EARNINGS PER SHARE $ (0.32) $ 0.41 $ 2.82 $ 0.94
WEIGHTED AVERAGE SHARES -
DILUTED 37,739 41,815 42,488 41,608
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2006 2005
-------------- --------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 242,366 $ 18,669
Accounts receivable, net 113,870 91,134
Materials and supplies 11,776 6,765
Prepaid expenses and other 10,963 8,298
Deferred income tax assets, net 7,945 4,230
Total current assets 386,920 129,096
PROPERTY AND EQUIPMENT, net 551,162 535,994
INVESTMENT IN UNCONSOLIDATED
AFFILIATES 4,535 136,443
GOODWILL 38,163 31,233
INTANGIBLE ASSETS, net 121,562 135,444
OTHER ASSETS, net 10,424 12,388
Total assets $ 1,112,766 $ 980,598
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 16,551 $ 4,726
Accounts payable 101,843 87,496
Accrued expenses 33,783 28,270
Income tax payable - Australia 86,216 -
Total current liabilities 238,393 120,492
LONG-TERM DEBT, less current portion 232,192 333,625
DEFERRED INCOME TAX LIABILITIES, net 72,462 59,891
DEFERRED ITEMS - grants from
governmental agencies 49,930 48,242
OTHER LONG-TERM LIABILITIES 17,176 20,528
TOTAL STOCKHOLDERS' EQUITY 502,613 397,820
Total liabilities and
stockholders' equity $ 1,112,766 $ 980,598
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
--------------------------------
September 30, September 30,
2006 2005
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 119,657 $ 39,308
Adjustments to reconcile net income
to net cash provided by operating
activities-
Depreciation and amortization 22,138 17,717
Amortization of restricted stock 768 486
Compensation cost related to stock options 5,404 915
Excess tax benefits from share-based
compensation (4,368) (392)
Deferred income taxes 16,021 5,385
Tax benefit upon exercise of stock options - 309
Gain on insurance recovery (1,937) -
Gain on sale of equity investment
in ARG (218,845) -
Net loss (gain) on sale and impairment
of assets 36,264 (3,367)
Investment loss - Bolivia 5,878 -
Equity loss (income) of unconsolidated
international affiliates, net of tax 7,500 (7,425)
Changes in assets and liabilities,
net of effect of acquisitions -
Accounts receivable, net (10,562) (11,115)
Materials and supplies (2,439) (1,091)
Prepaid expenses and other (2,363) 741
Accounts payable and accrued expenses 10,467 8,220
Income tax payable - Australia 86,216 -
Other assets and liabilities, net (5,983) 1,242
Net cash provided by operating
activities 63,816 50,933
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net of
government grants (33,562) (21,951)
Proceeds from ARG Sale 306,746 -
Purchase of Chattahoochee Bay Railroad (6,050) -
Purchase of Wesfarmers' 50-percent
ownership of the remaining ARG operations,
net of cash received (15,139) -
Purchase of Rail Partners, net of cash
received - (238,204)
Additional purchase price for Genesee
Rail-One - (6,500)
Cash received from unconsolidated
international affiliates - 655
Valuation adjustment of split dollar
life insurance 63 32
Proceeds from disposition of property
and equipment 499 4,093
Net cash provided by (used in)
investing activities 252,557 (261,875)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term
borrowings, including capital leases (183,446) (159,398)
Proceeds from issuance of long-term debt 92,500 359,800
Debt issuance costs - (1,629)
Proceeds from employee stock purchases 6,345 2,761
Treasury stock purchases (11,188) (368)
Excess tax benefits from share-based
compensation 4,368 392
Net cash (used in) provided by
financing activities (91,421) 201,558
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (1,255) 1,152
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 223,697 (8,232)
CASH AND CASH EQUIVALENTS, beginning
of period 18,669 14,451
CASH AND CASH EQUIVALENTS, end of
period $ 242,366 $ 6,219
GENESEE & WYOMING INC. AND SUBSIDIARIES
Selected Consolidated Financial Information
(dollars in thousands)
(Unaudited)
Three Months Ended
September 30,
---------------------------------------------------
2006 2005
----------------------- ------------------------
% of % of
Amount Revenue Amount Revenue
---------- ---------- ---------- -----------
Revenues:
Freight $ 86,955 67.8% $ 77,605 73.7%
Non-freight 41,349 32.2% 27,645 26.3%
Total revenues $ 128,304 100.0% $ 105,250 100.0%
Operating Expense Comparison:
Natural Classification
Labor and benefits $ 36,700 28.6% $ 31,379 29.8%
Equipment rents 9,873 7.7% 9,281 8.8%
Purchased services 10,850 8.5% 7,583 7.2%
Depreciation and amortization 7,888 6.1% 7,058 6.7%
Diesel fuel used in operations 11,577 9.0% 10,709 10.2%
Diesel fuel sold to third parties 5,458 4.3% - 0.0%
Casualties and insurance 6,086 4.7% 4,548 4.3%
Materials 6,422 5.0% 5,131 4.9%
Net loss (gain) on sale and impairment
of assets 36,397 28.4% (3,368) -3.2%
Other expenses 10,018 7.8% 8,850 8.4%
Total operating expenses $ 141,269 110.1% $ 81,171 77.1%
Functional Classification
Transportation $ 42,193 32.9% $ 36,052 34.3%
Maintenance of ways and structures 11,032 8.6% 8,687 8.3%
Maintenance of equipment 17,581 13.7% 14,991 14.2%
Diesel fuel sold to third parties 5,458 4.3% - 0.0%
General and administrative 20,720 16.1% 17,751 16.8%
Net loss (gain) on sale and impairment
of assets 36,397 28.4% (3,368) -3.2%
Depreciation and amortization 7,888 6.1% 7,058 6.7%
Total operating expenses $ 141,269 110.1% $ 81,171 77.1%
GENESEE & WYOMING INC. AND SUBSIDIARIES
Selected Consolidated Financial Information
(dollars in thousands)
(Unaudited)
Nine Months Ended
September 30,
----------------------------------------------------
2006 2005
------------------------ ------------------------
% of % of
Amount Revenue Amount Revenue
---------- ---------- ---------- ----------
Revenues:
Freight $ 255,392 72.0% $ 209,984 74.4%
Non-freight 99,484 28.0% 72,089 25.6%
Total revenues $ 354,876 100.0% $ 282,073 100.0%
Operating Expense Comparison:
Natural Classification
Labor and benefits $ 116,636 32.9% $ 89,833 31.8%
Equipment rents 28,898 8.1% 25,286 9.0%
Purchased services 26,574 7.5% 18,778 6.7%
Depreciation and amortization 22,138 6.2% 17,717 6.3%
Diesel fuel used in operations 34,210 9.6% 27,523 9.8%
Diesel fuel sold to third parties 7,089 2.0% - 0.0%
Casualties and insurance 13,007 3.7% 13,682 4.9%
Materials 17,921 5.0% 14,159 5.0%
Net loss (gain) on sale and impairment
of assets 36,264 10.2% (3,367) -1.2%
Gain on insurance recovery (1,937) -0.5% - 0.0%
Other expenses 28,636 8.1% 24,104 8.4%
Total operating expenses $ 329,436 92.8% $ 227,715 80.7%
Functional Classification
Transportation $ 119,474 33.7% $ 96,765 34.3%
Maintenance of ways and structures 31,369 8.8% 25,137 8.9%
Maintenance of equipment 50,093 14.1% 41,771 14.8%
Diesel fuel sold to third parties 7,089 2.0% - 0.0%
General and administrative 64,946 18.3% 49,692 17.6%
Net loss (gain) on sale and impairment
of assets 36,264 10.2% (3,367) -1.2%
Gain on insurance recovery (1,937) -0.5% - 0.0%
Depreciation and amortization 22,138 6.2% 17,717 6.3%
Total operating expenses $ 329,436 92.8% $ 227,715 80.7%
GENESEE & WYOMING INC. AND SUBSIDIARIES
Railroad Freight Revenue, Carloads and Average Revenue Per Carload
Comparison by Commodity Group
(dollars in thousands, except average revenue per carload)
Three Months Ended Three Months Ended
September 30, 2006 September 30, 2005
------------------------------------ ------------------------------------
Average Average
Revenue Revenue
Freight Per Freight Per
Commodity Group Revenues Carloads Carload Revenues Carloads Carload
- ------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Pulp & Paper $ 17,637 34,552 $ 510 $ 17,273 37,267 $ 463
Coal, Coke & Ores 15,053 51,796 291 13,008 51,548 252
Minerals & Stone 10,348 34,455 300 8,563 21,495 398
Metals 9,300 21,613 430 7,504 20,047 374
Farm & Food Products 9,221 24,904 370 5,079 15,000 339
Lumber & Forest
Products 8,534 21,586 395 9,667 27,018 358
Chemicals-Plastics 6,431 10,907 590 5,876 10,795 544
Petroleum Products 5,146 7,289 706 6,164 7,856 785
Autos & Auto Parts 1,685 3,079 547 1,365 2,658 514
Intermodal 455 1,103 413 563 1,279 440
Other 3,145 14,594 215 2,543 9,252 275
Totals $ 86,955 225,878 385 $ 77,605 204,215 380
GENESEE & WYOMING INC. AND SUBSIDIARIES
Railroad Freight Revenue, Carloads and Average Revenue Per Carload
Comparison by Commodity Group
(dollars in thousands, except average revenue per carload)
Nine Months Ended Nine Months Ended
September 30, 2006 September 30, 2005
------------------------------------ ------------------------------------
Average Average
Revenue Revenue
Freight Per Freight Per
Commodity Group Revenues Carloads Carload Revenues Carload Carload
- ------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Pulp & Paper $ 52,364 104,731 $ 500 $ 42,284 93,362 $ 453
Coal, Coke & Ores 47,075 150,826 312 38,421 147,192 261
Metals 28,046 65,480 428 20,846 57,966 360
Minerals & Stone 27,482 79,917 344 21,390 53,284 401
Lumber & Forest
Products 27,468 71,427 385 26,019 72,505 359
Farm & Food
Products 21,304 57,435 371 13,526 39,407 343
Chemicals-Plastics 18,935 32,517 582 15,798 29,868 529
Petroleum Products 16,853 22,941 735 19,870 25,369 783
Autos & Auto Parts 5,464 10,530 519 5,248 10,866 483
Intermodal 1,310 3,058 428 1,561 3,577 436
Other 9,091 42,648 213 5,021 18,321 274
Totals $ 255,392 641,510 398 $ 209,984 551,717 381
Reconciliation of non-GAAP Financial Measures
This earnings release contains free cash flow and adjusted operating ratios,
which are "non-GAAP financial measures" as this term is defined in Regulation G
of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has
reconciled these non-GAAP financial measures to their most directly comparable
U.S. GAAP measures.
Free Cash Flow Description and Discussion
Management views Free Cash Flow as an important financial measure of how
well GWI is managing its assets. Subject to the limitations discussed below,
Free Cash Flow is a useful indicator of cash flow that may be available for
discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by
Operating Activities less Net Cash Used in/Provided by Investing Activities,
excluding the Cost of Acquisitions/Proceeds from 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 required dividend payments and 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 Generally Accepted Accounting Principles (GAAP).
The following table sets forth a reconciliation of GWI's Net Cash Provided
by Operating Activities to GWI's Free Cash Flow:
Nine Months Ended September 30,
--------------------------------
2006 2005
-------------- --------------
Net cash provided by operating activities $ 63,816 $ 50,933
Net cash provided by (used in) investing
activities 252,557 (261,875)
Cash proceeds from divestitures (306,746) -
Cash used for acquisitions 21,189 244,704
Free cash flow $ 30,816 $ 33,762
Operating Ratio Description and Discussion
Management views the Operating Ratio, calculated as total Operating Expenses
divided by total Revenues, as an important measure of GWI's operating
performance. Because management believes it is useful for investors in assessing
GWI's financial results compared to the same period in the prior year, Adjusted
Operating Ratios are also presented excluding the effects of a legal settlement
as well as the impairment loss on its Mexican assets and the effects of its
operations in Mexico in the three month period ended September 30, 2006. GWI
also discloses Adjusted Operating Ratios that exclude the effects of the sale of
surplus rail as well as the effects of its operations in Mexico in the three
month periods ended September 30, 2005. The Adjusted Operating Ratios presented
excluding these effects are not intended to represent, and should not be
considered more meaningful than, or as an alternative to, the Operating Ratios
calculated using amounts determined in accordance with GAAP.
The following table sets forth a reconciliation of GWI's Operating Ratio
calculated using amounts determined in accordance with GAAP to the Adjusted
Operating Ratios described above:
For the Three Months Ended September 30, 2006
----------------------------------------------------
Total Operating
Total Operating Income Operating
Revenues Expenses (Loss) Ratio
- ----------------------------------- ---------- ---------- ---------- ----------
As Reported $ 128,304 $ 141,269 $ (12,965) 110.1%
Legal Settlement (1,138) 1,138
Mexico Impairment (34,156) 34,156
Excluding Above Items 128,304 105,975 22,329 82.6%
Mexico Operations (7,285) (9,262) 1,977
Excluding Above
Items and Mexico $ 121,019 $ 96,713 $ 24,306 79.9%
For the Three Months Ended September 30, 2005
----------------------------------------------------
Total Operating
Total Operating Income Operating
Revenues Expenses (Loss) Ratio
- ----------------------------------- ---------- ---------- ---------- ----------
As Reported $ 105,250 $ 81,171 $ 24,079 77.1%
Sale of Surplus Rail 3,398 (3,398)
Excluding Above Items 105,250 84,569 20,681 80.4%
Mexico Operations (10,107) (8,901) (1,206)
Excluding Above
Items and Mexico $ 95,143 $ 75,668 $ 19,475 79.5%
SOURCE Genesee & Wyoming Inc.
-0- 11/01/2006
/CONTACT: Christopher Capot, Director of Corporate Communications, Genesee &
Wyoming Inc., +1-203-629-3722, cell, +1-203-379-8019, or Investor, T.J.
Gallagher, Chief Financial Officer, Genesee & Wyoming Inc., +1-203-629-3722/
/Web site: http://www.gwrr.com /