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Genesee & Wyoming Reports Results for the Second Quarter of 2017

Category:

Tuesday, August 1, 2017 6:00 am EDT

Dateline:

DARIEN, Conn.

Public Company Information:

NYSE:
GWR
US3715591059

DARIEN, Conn.--(BUSINESS WIRE)--Genesee & Wyoming Inc. (G&W) (NYSE:GWR)

Second Quarter 2017 Consolidated Highlights Compared with Second Quarter 2016

  • Completed the acquisition of Pentalver Transport Limited (Pentalver), a U.K. based maritime container terminal and transportation business, on May 3, 2017.
  • Completed the acquisition of Atlantic Western Transportation, Inc., parent company of Heart of Georgia Railroad, Inc. (HOG), on May 31, 2017.
  • Operating revenues increased 7.8% to $540.4 million from $501.4 million.
  • Reported operating income increased 16.2% to $101.3 million; Adjusted operating income increased 13.3% to $107.4 million.(1)
  • Reported diluted earnings per common share (EPS) decreased 10.8% to $0.74 with 62.4 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2016 of $0.83 with 58.1 million weighted average shares outstanding; Adjusted diluted EPS decreased 1.2% to $0.80.(1)

Second Quarter Segment Highlights

  • North America: Operating revenues from G&W's North American Operations increased 3.6% to $315.7 million from $304.6 million, primarily due to $8.7 million from new operations as well as increases in agricultural products and minerals and stone revenues. Reported operating income from G&W's North American Operations increased 0.7% to $79.6 million; Adjusted operating income from G&W's North American Operations remained flat at $81.1 million.(1)
  • Australia: Operating revenues from G&W's 51.1% owned Australian Operations increased 38.9% to $76.8 million from $55.3 million, primarily due to new operations as well as an increase in metallic ores revenues. Reported operating income from G&W's Australian Operations increased to $20.3 million from $9.4 million; Adjusted operating income from G&W's Australian Operations increased to $20.3 million from $10.2 million.(1)
  • U.K./Europe: Operating revenues from G&W's U.K./European Operations increased 4.5% to $148.0 million from $141.5 million. Excluding $25.5 million from new operations and a decrease of $11.8 million from foreign currency depreciation, U.K./Europe same railroad operating revenues decreased $7.3 million primarily due to the restructuring of ERS. Reported operating income from G&W's U.K./European Operations increased to $1.5 million from an operating loss of $1.2 million; Adjusted operating income from G&W's U.K./European Operations increased to $5.9 million from $3.4 million.(1) (2)

Jack Hellmann, Chairman, President and CEO of G&W commented, “In the second quarter of 2017, we closed on the acquisitions of the Heart of Georgia Railroad in the United States and Pentalver in the United Kingdom, we completed the restructuring of ERS in Continental Europe, and we reported financial results that were modestly stronger than expected, with reported diluted EPS of $0.74 and adjusted diluted EPS of $0.80. In North America, same railroad revenues remained flat overall while we maintained an operating ratio of approximately 75%. In Australia, our 51%-owned business performed well in the second full quarter since the acquisition of Glencore Rail, with higher same railroad shipments of iron ore and manganese and an operating ratio of approximately 74%. In the U.K./Europe, the turn-around in our financial performance became increasingly visible, a trend that we expect to continue through 2017 and beyond.”(1)

Mr. Hellmann continued, “Meanwhile, our year-to-date free cash flow was strong and we continue to evaluate a range of acquisition and investment opportunities across our global footprint of railroads.”(1)

Financial Results

G&W's operating revenues increased $39.1 million, or 7.8%, to $540.4 million in the second quarter of 2017, compared with $501.4 million in the second quarter of 2016. G&W's operating income in the second quarter of 2017 was $101.3 million, compared with $87.2 million in the second quarter of 2016. G&W's adjusted operating income in the second quarter of 2017 was $107.4 million, compared with $94.7 million in the second quarter of 2016.(1)

G&W's reported net income attributable to G&W in the second quarter of 2017 was $46.0 million, compared with reported net income of $48.4 million in the second quarter of 2016. Excluding the net impact of certain items affecting comparability between periods discussed below, G&W's adjusted net income in the second quarter of 2017 was $49.9 million, compared with $47.0 million in the second quarter of 2016.(1)

G&W's reported diluted EPS in the second quarter of 2017 were $0.74 with 62.4 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2016 of $0.83 with 58.1 million weighted average shares outstanding. G&W's adjusted diluted EPS in the second quarter of 2017 were $0.80 with 62.4 million weighted average shares outstanding, compared with adjusted diluted EPS in the second quarter of 2016 of $0.81 with 58.1 million weighted average shares outstanding.(1)

Impact of Glencore Rail (NSW) Pty Limited (GRail) Acquisition on G&W Financial Presentation

In conjunction with the December 1, 2016 acquisition of GRail, G&W issued a 48.9% equity stake in G&W’s Australian subsidiary, G&W Australia Holdings LP (GWA), the holding company for all of G&W's Australian businesses, to Macquarie Infrastructure and Real Assets (MIRA). G&W retained a 51.1% interest in GWA and continues to consolidate 100% of GWA in its financial statements and reports a noncontrolling interest for MIRA’s 48.9% equity ownership. As a result, G&W’s second quarter 2017 operating income includes 100% of the Australian business, while net income attributable to G&W reflects its 51.1% ownership position in the Australian business.

Prior to the GRail acquisition, G&W's Australian Operations provided rail operator services to GRail, which were recorded as freight-related revenues. These freight-related services continued post acquisition, but are eliminated in consolidation. Revenues from the GRail acquisition are now included in G&W’s consolidated freight revenues from new operations.

Items Affecting Comparability

In the second quarter of 2017 and 2016, G&W's results included certain items affecting comparability between the periods that are set forth in the following table (in millions, except per share amounts):

             

Income/(Loss)
Before Income
Taxes Impact

After-Tax Net
Income/(Loss)
Attributable to
G&W Impact

Diluted EPS
Impact

Three Months Ended June 30, 2017

Corporate development and related costs $ (3.7 ) $ (2.7 ) $ (0.04 )
Restructuring costs $ (2.4 ) $ (2.2 ) $ (0.03 )
Gain on sale of investment $ 1.6 $ 1.0 $ 0.02
 

Three Months Ended June 30, 2016

Corporate development and related costs $ (2.6 ) $ (1.8 ) $ (0.03 )
Restructuring costs $ (5.0 ) $ (4.0 ) $ (0.07 )
Q2 2016 Short Line Tax Credit $ $ 7.2 $ 0.12
 

In the second quarter of 2017, G&W's results included corporate development and related costs of $3.7 million, primarily related to the acquisition and integration of Pentalver, as well as restructuring costs of $2.4 million, primarily in G&W's U.K./Europe Region. The second quarter of 2017 also included a $1.6 million gain on the sale of an investment in the U.S.

In the second quarter of 2016, G&W's results included restructuring costs of $5.0 million, primarily associated with G&W's U.K./Europe Region, and corporate development and related costs of $2.6 million. The second quarter of 2016 also included an income tax benefit of $7.2 million associated with the United States Short Line Tax Credit. The Short Line Tax Credit expired on December 31, 2016.

Second Quarter Results by Segment

Operating revenues from G&W's North American Operations increased $11.1 million, or 3.6%, to $315.7 million in the second quarter of 2017, compared with $304.6 million in the second quarter of 2016. North American Operations revenues increased primarily due to $8.7 million from new operations as well as increases in agricultural products and minerals and stone freight revenues.

North American Operations traffic increased 10,924 carloads, or 2.8%, to 397,047 carloads in the second quarter of 2017. Excluding 11,483 carloads from new operations, same railroad traffic decreased 559 carloads, or 0.1%. The traffic decrease was principally due to decreases of 1,873 carloads of metallic ores traffic (primarily in the Mountain West and Coastal regions), 1,839 carloads of petroleum products traffic (primarily in the Northeast and Mountain West regions), 1,695 carloads of metals traffic (primarily in the Southern and Coastal regions), 1,547 carloads of chemicals and plastics traffic (primarily in the Mountain West Region) and 1,514 carloads of pulp and paper traffic (primarily in the Southern and Coastal regions), partially offset by increases of 3,235 carloads of agricultural products traffic (primarily in the Central and Mountain West regions), 2,422 carloads of waste traffic (primarily in the Northeast and Pacific regions) and 1,380 carloads of minerals and stone traffic (primarily in the Central Region). All remaining traffic increased by a net 872 carloads.

G&W's North American Operations had operating income of $79.6 million in the second quarter of 2017, compared with $79.0 million in the second quarter of 2016. The operating ratio for North American Operations was 74.8% in the second quarter of 2017, compared with an operating ratio of 74.1% in the second quarter of 2016. Adjusted operating income from G&W's North American Operations in the second quarter of 2017 remained flat at $81.1 million, compared with the second quarter of 2016. The adjusted operating ratio for North American Operations was 74.3% in the second quarter of 2017, compared with an adjusted operating ratio of 73.4% in the second quarter of 2016.(1)

Operating revenues from G&W's Australian Operations increased $21.5 million, or 38.9%, to $76.8 million in the second quarter of 2017, compared with $55.3 million in the second quarter of 2016. Excluding $16.2 million of net revenues from new operations and a $0.4 million increase due to the impact of foreign currency appreciation, Australian Operations same railroad revenues increased $5.0 million, or 8.9%, primarily due to an increase in metallic ores freight revenues.(2)

Australian Operations traffic increased 101,838 carloads to 146,089 carloads in the second quarter of 2017. Excluding 92,659 carloads from new operations, same railroad traffic increased 9,179, or 20.7% in the second quarter of 2017, compared with the second quarter of 2016. The traffic increase was principally due to increases of 6,836 carloads of metallic ores traffic and 4,871 carloads of agricultural products traffic, partially offset by a decrease of 2,359 carloads of minerals and stone traffic. All remaining traffic decreased by 169 carloads.

G&W's Australian Operations had operating income of $20.3 million in the second quarter of 2017, compared with $9.4 million in the second quarter of 2016. The operating ratio for Australian Operations was 73.6% in the second quarter of 2017, compared with an operating ratio of 83.0% in the second quarter of 2016. Adjusted operating income from G&W's Australian Operations was $20.3 million in the second quarter of 2017, compared with adjusted operating income of $10.2 million in the second quarter of 2016. The adjusted operating ratio for Australian Operations was 73.5% in the second quarter of 2017, compared with an adjusted operating ratio of 81.5% in the second quarter of 2016.(1)

Operating revenues from G&W's U.K./European Operations increased $6.4 million, or 4.5%, to $148.0 million in the second quarter of 2017, compared with $141.5 million in the second quarter of 2016. Excluding $25.5 million from new operations and an $11.8 million decrease due to the impact of foreign currency depreciation, U.K./European same railroad revenues decreased $7.3 million, or 5.6%, primarily due to a decrease in Continental Europe intermodal revenues following the discontinuation of certain intermodal train services as part of the restructuring of ERS Railways B.V. (ERS) in the first half of 2017.(2)

U.K./European Operations traffic decreased 9,596 carloads, or 3.5%, to 266,946 carloads in the second quarter of 2017. The traffic decrease was principally due to decreases of 11,452 carloads of intermodal traffic (primarily in Continental Europe), 5,276 carloads of coal and coke traffic (primarily in the U.K.), partially offset by an increase of 7,062 carloads of minerals and stone traffic (primarily in Poland). All remaining traffic increased by a net 70 carloads.

G&W's U.K./European Operations had operating income of $1.5 million in the second quarter of 2017, compared with an operating loss of $1.2 million in the second quarter of 2016. Adjusted operating income from G&W's U.K./European Operations was $5.9 million in the second quarter of 2017, compared with adjusted operating income of $3.4 million in the second quarter of 2016.(1)

Free Cash Flow and Free Cash Flow Attributable to G&W (1)

G&W's free cash flow and free cash flow attributable to G&W for the six months ended June 30, 2017 and 2016 was as follows (in millions):

     
Six Months Ended
June 30,
2017     2016
Net cash provided by operating activities $ 224.3 $ 162.0

Net cash used in investing activities, excluding new business
investments

(168.4 ) (74.8 )
Net cash used for acquisitions/divestitures(a) 105.7   1.1  
Free cash flow before new business investments 161.6 88.3
New business investments, net of grants from outside parties (7.4 ) (3.4 )
Free cash flow and free cash flow attributable to G&W(1)(b) $ 154.3   $ 85.0  
 
(a)   The 2017 period primarily consisted of net cash used for the acquisitions of Pentalver and HOG as well as $5.1 million in cash paid for incremental expenses related to the purchase and integration of the acquisitions, partially offset by $2.9 million of proceeds received from a working capital adjustment related to the GRail acquisition and $2.1 million of proceeds from the sale of a noncontrolling interest in the U.S.
 
(b) Free cash flow attributable to G&W is defined as Free cash flow less any distributions made to noncontrolling interest (MIRA 48.9% of GWA).
 

Conference Call and Webcast Details

As previously announced, G&W's conference call to discuss financial results for the second quarter of 2017 will be held on Tuesday, August 1, 2017, at 11 a.m. EDT. The dial-in number for the teleconference in the U.S. is (800) 230-1059; outside the U.S. is (612) 234-9959, or the call may be accessed live over the Internet (listen only) at www.gwrr.com/investors. Management will be referring to a slide presentation that will also be available at gwrr.com/investors. The webcast will be archived at www.gwrr.com/investors until the following quarter's earnings press release. Telephone replay is available for 30 days beginning at 1 p.m. EDT on August 1, 2017, by dialing (800) 475-6701 (or outside the U.S., dial 320-365-3844). The access code is 405460.

About G&W

G&W owns or leases 122 freight railroads worldwide that are organized in 10 operating regions with approximately 8,000 employees and 3,000 customers.

  • G&W's eight North American regions serve 41 U.S. states and four Canadian provinces and include 115 short line and regional freight railroads with more than 13,000 track-miles.
  • G&W's Australia Region provides rail freight services in New South Wales, including in the Hunter Valley coal supply chain, the Northern Territory and South Australia, including operating the 1,400-mile Tarcoola-to-Darwin rail line. As of December 1, 2016, G&W's Australia Region is 51.1% owned by us and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
  • G&W's U.K./European Region is led by Freightliner, the U.K.'s largest rail maritime intermodal operator and second-largest rail freight company. Operations also include heavy-haul in Poland and Germany, intermodal services connecting Northern European seaports with key industrial regions in Germany, and regional rail services in the Netherlands and Belgium.

G&W subsidiaries provide rail service at more than 40 major ports in North America, Australia and Europe and perform contract coal loading and railcar switching for industrial customers.

From time to time, we may use our website as a channel of distribution of material company information. Financial and other material information regarding G&W is routinely posted on and accessible at www.gwrr.com/investors. In addition, you may automatically receive email alerts and other information about us by enrolling your email address in the "Email Alerts" section of www.gwrr.com/investors. The information contained on or connected to our Internet website is not deemed to be incorporated by reference in this press release or filed with the SEC.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that are based on current expectations, estimates and projections about our industry, management’s beliefs, and assumptions made by management. Words such as “anticipates,” “intends,” “plans,” “believes,” “could,” “should,” “seeks,” “expects,” “will,” “estimates,” “trends,” “outlook,” variations of these words and similar expressions are intended to identify these forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to forecast, including the following: risks related to the operation of our railroads; severe weather conditions and other natural occurrences, which could result in shutdowns, derailments, railroad network congestion or other substantial disruption of operations; customer demand and changes in our operations; exposure to the credit risk of customers and counterparties; changes in commodity prices; consummation and integration of acquisitions; economic, political and industry conditions (including employee strikes or work stoppages); retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we are subject; increased competition in relevant markets; funding needs and financing sources, including our ability to obtain government funding for capital projects; international complexities of operations, currency fluctuations, finance, tax and decentralized management; challenges of managing rapid growth including retention and development of senior leadership; unpredictability of fuel costs; susceptibility to various legal claims and lawsuits; increase in, or volatility associated with, expenses related to estimated claims, self-insured retention amounts, and insurance coverage limits; consummation of new business opportunities; decrease in revenues and/or increase in costs and expenses; susceptibility to the risks of doing business in foreign countries; our ability to integrate acquired businesses successfully or to realize the expected synergies associated with acquisitions; and others including, but not limited to, those noted in our 2016 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors.” Therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Forward-looking statements speak only as of the date of this press release or as of the date they were made. G&W does not undertake, and expressly disclaims, any duty to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

1.   Adjusted operating income, adjusted operating ratio, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS), free cash flow and free cash flow attributable to G&W are non-GAAP financial measures and are not intended to replace financial measures calculated in accordance with GAAP. The information required by Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and Regulation G under the Securities Exchange Act of 1934, including a reconciliation to their most directly comparable financial measures calculated in accordance with GAAP, is included in the tables attached to this press release.
 
2. Foreign exchange impact is calculated by comparing the prior period results translated from local currency to U.S. dollars using current period exchange rates to the prior period results in U.S. dollars as reported.
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016
(in thousands, except per share amounts)
(unaudited)
                 
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
OPERATING REVENUES $ 540,433 $ 501,375 $ 1,059,541 $ 983,991
OPERATING EXPENSES 439,093   414,181   880,747   839,801  
OPERATING INCOME 101,340 87,194 178,794 144,190
INTEREST INCOME 581 336 808 411
INTEREST EXPENSE (25,785 ) (17,741 ) (52,150 ) (35,716 )
OTHER INCOME/(LOSS), NET 1,589   722   (510 ) 1,453  
INCOME BEFORE INCOME TAXES 77,725 70,511 126,942 110,338
PROVISION FOR INCOME TAXES (29,597 ) (22,112 ) (51,525 ) (34,920 )
NET INCOME $ 48,128 $ 48,399 $ 75,417 $ 75,418

LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTEREST

2,121     3,172    

NET INCOME ATTRIBUTABLE TO GENESEE &
WYOMING INC.

$ 46,007   $ 48,399   $ 72,245   $ 75,418  

BASIC EARNINGS PER COMMON SHARE
ATTRIBUTABLE TO GENESEE & WYOMING INC.
COMMON STOCKHOLDERS:

$ 0.75   $ 0.85   $ 1.18   $ 1.32  
WEIGHTED AVERAGE SHARES - BASIC 61,551   57,187   61,472   57,106  

DILUTED EARNINGS PER COMMON SHARE
ATTRIBUTABLE TO GENESEE & WYOMING INC.
COMMON STOCKHOLDERS:

$ 0.74   $ 0.83   $ 1.16   $ 1.30  
WEIGHTED AVERAGE SHARES - DILUTED 62,415   58,117   62,371   58,036  
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2017 AND DECEMBER 31, 2016
(in thousands)
(unaudited)
         
June 30, December 31,
2017 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 83,743 $ 32,319
Accounts receivable, net 379,939 363,923
Materials and supplies 60,438 43,621
Prepaid expenses and other 37,131 45,475
Total current assets 561,251 485,338
PROPERTY AND EQUIPMENT, net 4,590,740 4,503,319
GOODWILL 1,176,181 1,125,596
INTANGIBLE ASSETS, net 1,564,542 1,472,376
DEFERRED INCOME TAX ASSETS, net 2,772 2,671
OTHER ASSETS, net 40,444 45,658
Total assets $ 7,935,930 $ 7,634,958
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 34,663 $ 52,538
Accounts payable 255,097 266,867
Accrued expenses 155,645 159,705
Total current liabilities 445,405 479,110
LONG-TERM DEBT, less current portion 2,398,070 2,306,915
DEFERRED INCOME TAX LIABILITIES, net 1,228,393 1,162,221
DEFERRED ITEMS - grants from outside parties 308,946 301,383
OTHER LONG-TERM LIABILITIES 216,546 198,208
TOTAL EQUITY 3,338,570 3,187,121
Total liabilities and equity $ 7,935,930 $ 7,634,958
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016
(in thousands)
(unaudited)
      Six Months Ended
June 30,
2017     2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 75,417 $ 75,418
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 122,287 100,254
Stock-based compensation 8,857 9,525
Deferred income taxes 34,320 16,336
Net (gain)/loss on sale and impairment of assets (781 ) 12,517

Changes in assets and liabilities which provided/(used) cash, net of effect of
acquisitions:

Accounts receivable, net 10,066 (11,472 )
Materials and supplies 2,198 (1,071 )
Prepaid expenses and other 14,617 (2,078 )
Accounts payable and accrued expenses (48,282 ) (46,236 )
Other assets and liabilities, net 5,627   8,808  
Net cash provided by operating activities 224,326   162,001  
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (91,498 ) (113,321 )
Grant proceeds from outside parties 11,630 25,990
Cash paid for acquisitions, net of cash acquired (102,655 )
Proceeds from the sale of investment 2,100
Insurance proceeds for the replacement of assets 1,406 7,741
Proceeds from disposition of property and equipment 3,280   1,458  
Net cash used in investing activities (175,737 ) (78,132 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on revolving line-of-credit, long-term debt and capital leases (322,446 ) (311,930 )
Proceeds from revolving line-of-credit and long-term borrowings 320,191 215,434
Proceeds from employee stock purchases 4,962 3,135
Treasury stock purchases (3,254 ) (2,593 )
Net cash used in financing activities (547 ) (95,954 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 3,382   1,115  
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 51,424 (10,970 )
CASH AND CASH EQUIVALENTS, beginning of period 32,319   35,941  
CASH AND CASH EQUIVALENTS, end of period $ 83,743   $ 24,971  
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
                                 
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Operating revenues:

Freight revenues $ 383,155 70.9 % $ 340,782 67.9 % $ 760,900 71.8 % $ 667,196 67.9 %

Freight-related
revenues

127,621 23.6 % 133,688 26.7 % 246,958 23.3 % 267,146 27.1 %
All other revenues 29,657   5.5 % 26,905   5.4 % 51,683   4.9 % 49,649   5.0 %
Total operating revenues $ 540,433   100.0 % $ 501,375   100.0 % $ 1,059,541   100.0 % $ 983,991   100.0 %
 

Operating expenses:

Labor and benefits(a) $ 162,615 30.1 % $ 155,948 31.1 % $ 328,199 31.0 % $ 319,062 32.4 %
Equipment rents 33,237 6.2 % 38,426 7.7 % 67,108 6.3 % 76,856 7.8 %
Purchased services(b) 56,795 10.5 % 51,632 10.3 % 107,796 10.2 % 98,134 10.0 %

Depreciation and
amortization

61,513 11.4 % 50,924 10.2 % 122,287 11.5 % 100,254 10.2 %

Diesel fuel used in
train operations

33,030 6.1 % 28,251 5.5 % 71,183 6.7 % 53,717 5.4 %

Electricity used in
train operations

2,134 0.4 % 3,304 0.7 % 5,307 0.5 % 6,669 0.7 %

Casualties and
insurance

10,179 1.9 % 9,442 1.9 % 22,722 2.1 % 19,562 2.0 %
Materials 26,651 4.9 % 21,393 4.3 % 47,197 4.5 % 42,984 4.4 %
Trackage rights 21,797 4.0 % 21,152 4.2 % 44,020 4.2 % 41,728 4.2 %

Net (gain)/loss on sale
and impairment of
assets(c)

(354 ) (0.1 )% (308 ) (0.1 )% (781 ) (0.1 )% 12,517 1.3 %
Restructuring costs 2,361 0.4 % 4,970 1.0 % 6,116 0.6 % 6,097 0.6 %
Other expenses(d) 29,135   5.4 % 29,047   5.8 % 59,593   5.6 % 62,221   6.3 %

Total operating expenses

$ 439,093   81.2 % $ 414,181   82.6 % $ 880,747   83.1 % $ 839,801   85.3 %
 
(a)   Includes $0.5 million and $2.8 corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with severance costs related to the integration of the Providence & Worcester Railroad Company (P&W). Includes $0.1 million corporate development and related costs for the three months ended June 30, 2016.
 
(b) Includes $0.2 million and $0.3 million corporate development and related costs for the three and six months ended June 30, 2017, respectively. Includes $0.1 million and $0.2 million corporate development and related costs for the three and six months ended June 30, 2016, respectively.
 
(c) Includes an impairment charge of $13.0 million associated with an Australia iron ore customer entering into voluntary administration for the six months ended June 30, 2016.
 
(d) Includes $3.0 million and $6.0 million corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with the acquisition and integration of Pentalver as well as expenses related to ongoing corporate development projects and projects that are no longer active. Includes $2.4 million and $2.9 million corporate development and related costs for the three and six months ended June 30, 2016, respectively, primarily associated with the acquisition of GRail. Includes an accounts receivable reserve of $8.1 million associated with an Australia iron ore customer entering into voluntary administration for the six months ended June 30, 2016.
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
NORTH AMERICAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
                                 
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017   2016
Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Operating revenues:

Freight revenues $ 238,373 75.5 % $ 227,082 74.6 % $ 476,654 75.0 % $ 448,907 74.2 %

Freight-related
revenues

61,183 19.4 % 60,978 20.0 % 126,528 20.0 % 122,503 20.3 %
All other revenues 16,118   5.1 % 16,515   5.4 % 31,968   5.0 % 32,943   5.5 %
Total operating revenues $ 315,674   100.0 % $ 304,575   100.0 % $ 635,150   100.0 % $ 604,353   100.0 %
 

Operating expenses:

Labor and benefits(a) $ 102,175 32.4 % $ 95,587 31.4 % $ 212,426 33.5 % $ 198,177 32.8 %
Equipment rents 13,380 4.3 % 14,218 4.7 % 27,370 4.3 % 29,274 4.9 %
Purchased services(b) 15,423 4.9 % 16,263 5.3 % 30,096 4.7 % 31,964 5.3 %

Depreciation and
amortization

38,919 12.3 % 37,124 12.2 % 77,786 12.3 % 73,313 12.1 %

Diesel fuel used in
train operations

16,546 5.2 % 13,837 4.5 % 37,104 5.8 % 27,361 4.5 %

Casualties and
insurance

7,811 2.5 % 7,013 2.3 % 18,044 2.8 % 14,253 2.4 %
Materials 13,061 4.1 % 12,946 4.4 % 26,524 4.2 % 25,946 4.3 %
Trackage rights 9,189 2.9 % 8,885 2.9 % 18,707 3.0 % 17,752 2.9 %

Net gain on sale and
impairment of assets

(328 ) (0.1 )% (236 ) (0.1 )% (760 ) (0.1 )% (395 ) (0.1 )%
Restructuring costs 14 % 335 0.1 % 68 % 694 0.1 %
Other expenses(c) 19,898   6.3 % 19,580   6.4 % 40,629   6.4 % 37,013   6.1 %
Total operating expenses $ 236,088   74.8 % $ 225,552   74.1 % $ 487,994   76.8 % $ 455,352   75.3 %
Operating income $ 79,586   $ 79,023   $ 147,156   $ 149,001  

Expenditures for
additions to property &
equipment, net of grants
from outside parties

$ 40,012 $ 39,523 $ 64,227 $ 64,939
 
(a)  

Includes $0.4 million and $2.7 million corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with severance costs related to the integration of the P&W. Includes $0.2 million corporate development and related costs for both the three and six months ended June 30, 2016.

 
(b) Includes $0.1 million corporate development and related costs for the six months ended June 30, 2017. Includes $0.1 million and $0.2 million corporate development and related costs for the three and six months ended June 30, 2016, respectively.
 
(c) Includes $1.1 million and $4.0 million corporate development and related costs for the three and six months ended June 30, 2017, respectively, primarily associated with ongoing corporate development projects as well as projects that are no longer active. Includes $1.5 million and $1.8 million corporate development and related costs for the three and six months ended June 30, 2016, respectively.
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
AUSTRALIAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
                                 
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017   2016
Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Operating revenues:

Freight revenues $ 63,753 83.0 % $ 26,394 47.7 % $ 124,627 82.7 % $ 51,171 47.8 %

Freight-related
revenues

11,500 15.0 % 27,129 49.1 % 23,209 15.4 % 52,619 49.1 %
All other revenues 1,556   2.0 % 1,760   3.2 % 2,880   1.9 % 3,291   3.1 %
Total operating revenues $ 76,809   100.0 % $ 55,283   100.0 % $ 150,716   100.0 % $ 107,081   100.0 %
 

Operating expenses:

Labor and benefits $ 17,775 23.1 % $ 16,800 30.4 % $ 34,829 23.1 % $ 32,568 30.4 %
Equipment rents 1,334 1.7 % 1,630 2.9 % 2,735 1.8 % 3,325 3.1 %
Purchased services 6,470 8.4 % 6,098 11.0 % 12,682 8.4 % 11,349 10.6 %

Depreciation and
amortization

14,970 19.5 % 7,233 13.1 % 30,162 20.0 % 13,889 13.0 %

Diesel fuel used in
train operations

6,320 8.2 % 4,538 8.2 % 12,910 8.6 % 8,575 8.0 %

Casualties and
insurance

1,379 1.8 % 1,553 2.8 % 2,852 1.9 % 3,088 2.9 %
Materials 2,517 3.3 % 2,870 5.2 % 5,231 3.5 % 5,289 4.9 %
Trackage rights 3,484 4.6 % 2,028 3.7 % 6,892 4.6 % 4,317 4.0 %

Net (gain)/loss on sale
and impairment of
assets(a)

(20 ) % % (22 ) % 12,982 12.1 %
Restructuring costs % 23 % 338 0.2 % 716

0.7

%
Other expenses(b) 2,330   3.0 % 3,129   5.7 % 4,698   3.1 % 13,353   12.5 %
Total operating expenses $ 56,559   73.6 % $ 45,902   83.0 % $ 113,307   75.2 % $ 109,451   102.2 %
Operating income/(loss) $ 20,250   $ 9,381   $ 37,409   $ (2,370 )

Expenditures for
additions to property &
equipment, net of grants
from outside parties

$ 3,714 $ 4,787 $ 5,176 $ 5,654
 
(a)   Includes an impairment charge of $13.0 million associated with an iron ore customer entering into voluntary administration for the six months ended June 30, 2016.
 
(b) Includes $0.1 million and $0.2 million corporate development and related costs for the three and six months ended June 30, 2017, respectively. Includes $0.8 million and $1.0 million corporate development and related costs for the three and six months ended June 30, 2016, respectively. Includes an accounts receivable reserve of $8.1 million associated with an iron ore customer entering into voluntary administration for the six months ended June 30, 2016.
 

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
U.K./EUROPEAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
                                 
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Operating revenues:

Freight revenues $ 81,029 54.8 % $ 87,306 61.7 % $ 159,619 58.3 % $ 167,118 61.3 %

Freight-related
revenues

54,938 37.1 % 45,581 32.2 % 97,221 35.5 % 92,024 33.8 %
All other revenues 11,983   8.1 % 8,630   6.1 % 16,835   6.2 % 13,415   4.9 %
Total operating revenues $ 147,950   100.0 % $ 141,517   100.0 % $ 273,675   100.0 % $ 272,557   100.0 %
 

Operating expenses:

Labor and benefits(a) $ 42,665 28.8 % $ 43,561 30.8 % $ 80,944 29.6 % $ 88,317 32.4 %
Equipment rents 18,523 12.5 % 22,578 16.0 % 37,003 13.5 % 44,257 16.2 %
Purchased services(b) 34,902 23.6 % 29,271 20.7 % 65,018 23.8 % 54,821 20.1 %

Depreciation and
amortization

7,624 5.1 % 6,567 4.6 % 14,339 5.2 % 13,052 4.9 %

Diesel fuel used in
train operations

10,164 6.9 % 9,876 7.0 % 21,169 7.7 % 17,781 6.5 %

Electricity used in
train operations

2,134 1.4 % 3,304 2.3 % 5,307 2.0 % 6,669 2.4 %

Casualties and
insurance

989 0.7 % 876 0.6 % 1,826 0.7 % 2,221 0.8 %
Materials 11,073 7.5 % 5,577 3.9 % 15,442 5.6 % 11,749 4.3 %
Trackage rights 9,124 6.2 % 10,239 7.3 % 18,421 6.7 % 19,659 7.2 %

Net (gain)/loss on sale and
impairment of assets

(6 ) % (72 ) (0.1 )% 1 % (70 ) %
Restructuring costs 2,347 1.6 % 4,612 3.3 % 5,710 2.1 % 4,687 1.7 %
Other expenses(c) 6,907   4.7 % 6,338   4.5 % 14,266   5.2 % 11,855   4.4 %
Total operating expenses $ 146,446   99.0 % $ 142,727   100.9 % $ 279,446   102.1 % $ 274,998   100.9 %

Operating income/(loss)

$ 1,504   $ (1,210 ) $ (5,771 ) $ (2,441 )

Expenditures for
additions to property &
equipment, net of grants
from outside parties

$ 3,190 $ 11,338 $ 10,465 $ 16,738
 
(a)   Includes $0.1 million corporate development and related costs for both the three and six months ended June 30, 2017, associated with severance costs related to the integration of Pentalver.
 
(b) Includes $0.2 million corporate development and related costs for both the three and six months ended June 30, 2017, associated with the acquisition of Pentalver.
 
(c) Includes $1.8 million corporate development and related costs for both the three and six months ended June 30, 2017, associated with the acquisition and integration of Pentalver.
 

GENESEE & WYOMING INC. AND SUBSIDIARIES
FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
                                                 
Three Months Ended June 30, 2017 North American Operations Australian Operations U.K./European Operations Total Operations
Commodity Group

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Agricultural Products $ 31,279 52,953 $ 591 $ 5,932 15,375 $ 386 $ 829 746 $ 1,111 $ 38,040 69,074 $ 551
Autos & Auto Parts 5,730 9,184 624 5,730 9,184 624
Chemicals & Plastics 37,400 44,814 835 37,400 44,814 835
Coal & Coke 15,382 46,501 331 27,758 92,659 300 1,719 3,974 433 44,859 143,134 313
Food & Kindred Products 8,325 14,806 562 8,325 14,806 562
Intermodal 238 2,367 101 17,234 15,159 1,137 60,793 217,091 280 78,265 234,617 334
Lumber & Forest Products 22,323 35,619 627 22,323 35,619 627
Metallic Ores 2,920 4,249 687 10,659 8,854 1,204 13,579 13,103 1,036
Metals 26,079 34,695 752 26,079 34,695 752
Minerals & Stone 34,562 56,768 609 2,016 13,978 144 17,688 45,135 392 54,266 115,881 468
Petroleum Products 15,844 23,912 663 154 64 2,406 15,998 23,976 667
Pulp & Paper 26,077 39,813 655 26,077 39,813 655
Waste 7,144 14,387 497 7,144 14,387 497
Other 5,070 16,979 299 5,070 16,979 299
Totals $ 238,373 397,047 $ 600 $ 63,753 146,089 $ 436 $ 81,029 266,946 $ 304 $ 383,155 810,082 $ 473
 
 
Three Months Ended June 30, 2016 North American Operations Australian Operations U.K./European Operations Total Operations
Commodity Group

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Agricultural Products $ 27,178 49,330 $ 551 $ 4,411 10,504 $ 420 $ 393 448 $ 877 $ 31,982 60,282 $ 531
Autos & Auto Parts 4,980 8,146 611 4,980 8,146 611
Chemicals & Plastics 35,743 44,875 797 35,743 44,875 797
Coal & Coke 15,051 46,237 326 3,408 9,250 368 18,459 55,487 333
Food & Kindred Products 7,973 14,448 552 7,973 14,448 552
Intermodal 1 12 83 17,044 15,320 1,113 68,919 228,543 302 85,964 243,875 352
Lumber & Forest Products 20,842 34,561 603 59 135 437 20,901 34,696 602
Metallic Ores 4,615 6,122 754 2,867 2,018 1,421 40 93 430 7,522 8,233 914
Metals 27,157 35,881 757 27,157 35,881 757
Minerals & Stone 29,502 51,882 569 1,901 16,337 116 14,487 38,073 381 45,890 106,292 432
Petroleum Products 17,180 25,462 675 171 72 2,375 17,351 25,534 680
Pulp & Paper 26,062 41,128 634 26,062 41,128 634
Waste 5,551 11,520 482 5,551 11,520 482
Other 5,247 16,519 318 5,247 16,519 318
Totals $ 227,082 386,123 $ 588 $ 26,394 44,251 $ 596 $ 87,306 276,542 $ 316 $ 340,782 706,916 $ 482
 

* Represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.

 
GENESEE & WYOMING INC. AND SUBSIDIARIES
FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
                                                 
Six Months Ended June 30, 2017 North American Operations Australian Operations U.K./European Operations Total Operations
Commodity Group

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Agricultural Products $ 64,257 110,204 $ 583 $ 11,678 30,641 $ 381 $ 2,568 2,259 $ 1,137 $ 78,503 143,104 $ 549
Autos & Auto Parts 10,940 17,977 609 10,940 17,977 609
Chemicals & Plastics 74,915 90,822 825 74,915 90,822 825
Coal & Coke 37,115 109,800 338 57,279 190,343 301 5,119 14,535 352 99,513 314,678 316
Food & Kindred Products 16,599 29,676 559 16,599 29,676 559
Intermodal 415 4,168 100 33,101 28,737 1,152 122,789 440,904 278 156,305 473,809 330
Lumber & Forest Products 42,699 69,174 617 42,699 69,174 617
Metallic Ores 6,816 9,173 743 18,290 15,760 1,161 25,106 24,933 1,007
Metals 52,673 70,493 747 52,673 70,493 747
Minerals & Stone 62,677 103,813 604 3,995 29,906 134 29,143 78,064 373 95,815 211,783 452
Petroleum Products 34,271 49,049 699 284 118 2,407 34,555 49,167 703
Pulp & Paper 51,555 78,587 656 51,555 78,587 656
Waste 12,338 25,131 491 12,338 25,131 491
Other 9,384 31,996 293 9,384 31,996 293
Totals $ 476,654 800,063 $ 596 $ 124,627 295,505 $ 422 $ 159,619 535,762 $ 298 $ 760,900 1,631,330 $ 466
 
 
Six Months Ended June 30, 2016 North American Operations Australian Operations U.K./European Operations Total Operations
Commodity Group

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Freight
Revenues

Carloads*

Average
Revenues
Per
Carload

Agricultural Products $ 55,234 105,345 $ 524 $ 9,410 24,077 $ 391 $ 736 842 $ 874 $ 65,380 130,264 $ 502
Autos & Auto Parts 9,015 14,952 603 9,015 14,952 603
Chemicals & Plastics 69,491 89,234 779 69,491 89,234 779
Coal & Coke 31,877 94,915 336 7,752 17,313 448 39,629 112,228 353
Food & Kindred Products 16,407 29,412 558 16,407 29,412 558
Intermodal 2 24 83 31,617 28,943 1,092 133,448 440,638 303 165,067 469,605 352
Lumber & Forest Products 41,712 69,393 601 126 315 400 41,838 69,708 600
Metallic Ores 9,677 12,347 784 5,974 4,336 1,378 40 93 430 15,691 16,776 935
Metals 54,200 71,786 755 54,200 71,786 755
Minerals & Stone 54,296 95,563 568 3,780 32,985 115 25,016 69,310 361 83,092 197,858 420
Petroleum Products 35,453 51,451 689 390 133 2,932 35,843 51,584 695
Pulp & Paper 52,190 82,296 634 52,190 82,296 634
Waste 9,339 19,806 472 9,339 19,806 472
Other 10,014 32,791 305 10,014 32,791 305
Totals $ 448,907 769,315 $ 584 $ 51,171 90,474 $ 566 $ 167,118 528,511 $ 316 $ 667,196 1,388,300 $ 481
 

* Represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.

Non-GAAP Financial Measures

This earnings release contains references to adjusted operating income, adjusted operating ratio, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS), free cash flow and free cash flow attributable to G&W, which are "non-GAAP financial measures" as this term is defined in Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and Regulation G under the Securities Exchange Act of 1934. In accordance with these rules, G&W has reconciled these non-GAAP financial measures to their most directly comparable U.S. GAAP measures.

Management views these non-GAAP financial measures as important measures of G&W's operating performance or, in the case of free cash flow, an important financial measure of how well G&W is managing its assets and a useful indicator of cash flow that may be available for discretionary use by G&W. Management also views these non-GAAP financial measures as a way to assess comparability between periods. Key limitations of the free cash flow measure include the assumptions that G&W will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt.

These non-GAAP financial measures are not intended to represent, and should not be considered more meaningful than, or as an alternative to, their most directly comparable GAAP measures. These non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies.

The following tables set forth reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measure ($ in millions, except per share amounts).

Reconciliations of Non-GAAP Financial Measures

Adjusted Operating Income and Adjusted Operating Ratio

     
Three Months Ended
June 30, 2017

North
American
Operations

   

Australian
Operations

   

U.K./European
Operations

   

Total
Operations

Operating revenues $ 315.7 $ 76.8 $ 148.0 $ 540.4
Operating expenses 236.1   56.6   146.4   439.1  
Operating income(a) $ 79.6   $ 20.3   $ 1.5   $ 101.3  
Operating ratio (b) 74.8 % 73.6 % 99.0 % 81.2 %
 
Operating expenses $ 236.1 $ 56.6 $ 146.4 $ 439.1
Corporate development and related costs (1.5 ) (0.1 ) (2.1 ) (3.7 )
Restructuring costs     (2.3 ) (2.4 )
Adjusted operating expenses $ 234.6   $ 56.5   $ 142.0   $ 433.1  
 
Adjusted operating income $ 81.1   $ 20.3   $ 5.9   $ 107.4  
Adjusted operating ratio 74.3 % 73.5 % 96.0 % 80.1 %
 
(a)   Operating income is calculated as operating revenues less operating expenses.
 
(b) Operating ratio is calculated as operating expenses divided by operating revenues.
 

     
Three Months Ended
June 30, 2016

North
American
Operations

   

Australian
Operations

   

U.K./European
Operations

   

Total
Operations

Operating revenues $ 304.6 $ 55.3 $ 141.5 $ 501.4
Operating expenses 225.6   45.9   142.7   414.2  
Operating income/(loss) (a) $ 79.0   $ 9.4   $ (1.2 ) $ 87.2  
Operating ratio (b) 74.1 % 83.0 % 100.9 % 82.6 %
 
Operating expenses $ 225.6 $ 45.9 $ 142.7 $ 414.2
Corporate development and related costs (1.7 ) (0.8 ) (2.6 )
Restructuring costs (0.3 )   (4.6 ) (5.0 )
Adjusted operating expenses $ 223.5   $ 45.1   $ 138.1   $ 406.6  
 
Adjusted operating income $ 81.1   $ 10.2   $ 3.4   $ 94.7  
Adjusted operating ratio 73.4 % 81.5 % 97.6 % 81.1 %
 
(a)   Operating income/(loss) is calculated as operating revenues less operating expenses.
 
(b) Operating ratio is calculated as operating expenses divided by operating revenues.
 

Adjusted Net Income and Adjusted Diluted EPS

                 
Three Months Ended June 30, 2017

Income
Before
Income Taxes

Provision for
Income Taxes

Net Income
Attributable
to G&W

Diluted EPS
As reported $ 77.7 $ (29.6 ) $ 46.0 $ 0.74
Add back certain items:
Corporate development and related costs 3.7 (0.9 ) 2.7 0.04
Restructuring costs 2.4 (0.2 ) 2.2 0.03
Gain on sale of investment (1.6 ) 0.7   (1.0 ) (0.02 )
As adjusted $ 82.1   $ (30.0 ) $ 49.9   $ 0.80  
 
 
Three Months Ended June 30, 2016

Income
Before
Income Taxes

Provision for
Income Taxes

Net Income
Attributable
to G&W

Diluted EPS
As reported $ 70.5 $ (22.1 ) $ 48.4 $ 0.83
Add back certain items:
Corporate development and related costs 2.6 (0.8 ) 1.8 0.03
Restructuring costs 5.0 (0.9 ) 4.0 0.07
Q2 2016 Short Line Tax Credit   (7.2 ) (7.2 ) (0.12 )
As adjusted $ 78.1   $ (31.0 ) $ 47.0   $ 0.81  
 

Free Cash Flow & Free Cash Flow Attributable to G&W

     
Six Months Ended
June 30,
2017     2016
Net cash provided by operating activities $ 224.3 $ 162.0
Net cash used in investing activities (175.7 ) (78.1 )
Net cash used for acquisitions/divestitures 105.7   1.1  
Free cash flow and Free cash flow attributable to G&W $ 154.3 $ 85.0
New business investments, net of grants from outside parties 7.4   3.4  
Free cash flow before new business investments $ 161.6   $ 88.3  

Contact:

Genesee & Wyoming Inc.
Michael Williams, 1-203-202-8900
G&W Corporate Communications
mwilliams@gwrr.com

NYSE: GWR