Genesee & Wyoming Inc. (G&W) (NYSE:GWR)
Third Quarter 2018 Consolidated Highlights Compared with
Third Quarter 2017
- Operating revenues increased 4.6% to
$603.3 million from $576.9 million.
- Reported operating income increased
16.4% to $127.8 million; Adjusted operating income increased 14.3%
to $130.5 million.(1)
- Reported diluted earnings per common
share (EPS) increased 45.0% to $1.16 with 60.1 million weighted
average shares outstanding, compared with reported diluted EPS in
the third quarter of 2017 of $0.80 with 62.5 million weighted
average shares outstanding; Adjusted diluted EPS increased 51.9% to
$1.23.(1)
- G&W completed its previously
authorized $300 million share repurchase plan as of October 19,
2018; G&W authorized a new $500 million share repurchase plan
on October 25, 2018.
Jack Hellmann, Chairman, President and CEO of G&W,
commented, "Our financial results for the third quarter of 2018
were strong, with reported diluted earnings per share increasing
45% and adjusted diluted earnings per share increasing 52%. Our
North American financial results (approximately 80% of operating
income) were uniformly positive led by 11.5% revenue growth, an
operating ratio that improved around 300 basis points to 71.2%, and
a 25% increase in operating income. Meanwhile, third quarter
results in our Australia Region (approximately 15% of operating
income) and U.K./Europe Region (approximately 5% of operating
income) were slightly below our expectations."
"Our commercial outlook remains positive in all three of our
geographic segments, however, we expect our fourth quarter
financial results to be adversely impacted by three items. In North
America, Hurricane Michael struck our Bay Line Railroad and
customer facilities in Panama City, Florida in October, which will
result in higher expenses and lower shipment levels. In Australia,
we expect delays in certain coal shipments in New South Wales that
will shift into early 2019. And in the U.K., where our
restructuring is proceeding on plan, our ability to staff new and
existing business is being constrained by near-term locomotive
driver shortages, which will squeeze fourth quarter margins as we
further ramp up training and hiring."
"We continue to actively analyze investment opportunities in
multiple geographies, as well as investments in our own shares. In
mid-October, we completed our previously announced $300 million
share repurchase program, and our Board recently approved a share
repurchase program for an additional $500 million of Common Stock.
We expect to execute this program opportunistically, as we evaluate
the intrinsic value of our shares, the relative attractiveness of
acquisitions and investments, as well as our leverage profile and
overall business conditions."
Third Quarter Segment Highlights
- North America: Operating revenues from
G&W's North American Operations increased 11.5% to $355.7
million from $318.9 million. Reported operating income from
G&W's North American Operations increased 24.7% to $102.5
million; Adjusted operating income from G&W's North American
Operations increased 23.4% to $102.6 million.(1)
- Australia: Operating revenues from
G&W's 51.1% owned Australian Operations decreased 5.6% to $76.7
million from $81.3 million. Reported operating income from
G&W's Australian Operations decreased 7.0% to $20.7 million;
Adjusted operating income from G&W's Australian Operations
decreased 9.2% to $19.8 million.(1)
- U.K./Europe: Operating revenues from
G&W's U.K./European Operations decreased 3.3% to $170.9 million
from $176.7 million. Revenues for the third quarter of 2017
included $13.9 million of revenues from G&W's Continental
Europe intermodal business, ERS Railways B.V. (ERS), which was sold
in June 2018. Reported operating income from G&W's
U.K./European Operations, which included $2.6 million in 2017 from
ERS, decreased to $4.6 million from $5.4 million; Adjusted
operating income from G&W's U.K./European Operations, which
included $3.3 million in 2017 from ERS, decreased to $8.1 million
from $9.3 million.(1)
Financial Results
G&W's operating revenues increased $26.4 million, or 4.6%,
to $603.3 million in the third quarter of 2018, compared with
$576.9 million in the third quarter of 2017. G&W's operating
income in the third quarter of 2018 was $127.8 million, compared
with $109.8 million in the third quarter of 2017. G&W's
adjusted operating income in the third quarter of 2018 was $130.5
million, compared with $114.2 million in the third quarter of
2017.(1)
G&W's effective income tax rate in the third quarter of 2018
was 30.0%, compared with 36.4% in the third quarter of 2017. The
decrease in the effective income tax rate was primarily a result of
the Tax Cuts and Jobs Act of 2017 (TCJA), which decreased the
United States federal corporate income tax rate from 35% to
21%.
Reported net income attributable to G&W in the third quarter
of 2018 was $69.6 million, compared with reported net income
attributable to G&W of $50.2 million in the third 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 third quarter of 2018 was
$73.8 million, compared with $50.6 million in the third quarter of
2017.(1)
G&W's reported diluted EPS in the third quarter of 2018 were
$1.16 with 60.1 million weighted average shares outstanding,
compared with reported diluted EPS in the third quarter of 2017 of
$0.80 with 62.5 million weighted average shares outstanding.
G&W's adjusted diluted EPS in the third quarter of 2018 were
$1.23 with 60.1 million weighted average shares outstanding,
compared with adjusted diluted EPS in the third quarter of 2017 of
$0.81 with 62.5 million weighted average shares outstanding.(1)
Items Affecting Comparability
In the third 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) Before Income
Taxes Impact
After-Tax Net Income/(Loss)
Attributable to G&W Impact
Diluted EPS Impact
Three Months Ended
September 30, 2018
Corporate development and related costs $ (0.3 ) $ (0.3 ) $ —
Restructuring and related costs $ (3.3 ) $ (2.7 ) $ (0.04 ) Gain on
settlement $ 0.9 $ 0.3 $ 0.01 TCJA measurement period adjustment $
— $ (1.6 ) $ (0.03 )
Three Months Ended
September 30, 2017
Corporate development and related costs $ (1.7 ) $ (1.4 ) $ (0.02 )
Restructuring costs $ (2.6 ) $ (2.2 ) $ (0.04 ) Recognition of
unrecognized tax benefits $ — $ 3.3 $ 0.05
In the third quarter of 2018, G&W's results included
restructuring and related costs of $3.3 million, primarily driven
by our optimization activities in the U.K., corporate development
and related costs of $0.3 million and a gain on a settlement in
Australia of $0.9 million from the recovery of pre-petition claims
associated with Arrium Limited's voluntary administration
(bankruptcy) in the second quarter of 2016. As a result of the
TCJA, the third quarter of 2018 also included a $1.6 million
measurement period adjustment to the one-time transition (toll) tax
on earnings of certain foreign subsidiaries.
In the third quarter of 2017, G&W's results included
restructuring costs of $2.6 million, primarily in G&W's
U.K./European Region, as well as corporate development and related
costs of $1.7 million, primarily related to the acquisition and
integration of Pentalver Transport Limited (Pentalver). The third
quarter of 2017 also included the recognition of $3.3 million of
previously unrecognized tax benefits resulting from the lapse of
the statute of limitations on acquired liabilities for uncertain
tax positions.
Third Quarter Results by Segment
Operating revenues from G&W's North American Operations
increased $36.8 million, or 11.5%, to $355.7 million in the third
quarter of 2018, compared with $318.9 million in the third quarter
of 2017.
G&W's North American Operations had operating income of
$102.5 million in the third quarter of 2018, compared with $82.2
million in the third quarter of 2017. The operating ratio for North
American Operations was 71.2% in the third quarter of 2018,
compared with an operating ratio of 74.2% in the third quarter of
2017. Adjusted operating income from G&W's North American
Operations in the third quarter of 2018 was $102.6 million,
compared with adjusted operating income of $83.1 million in the
third quarter of 2017. The adjusted operating ratio for North
American Operations was 71.2% in the third quarter of 2018,
compared with an adjusted operating ratio of 73.9% in the third
quarter of 2017.(1)
Operating revenues from G&W's Australian Operations
decreased $4.6 million, or 5.6%, to $76.7 million in the third
quarter of 2018, compared with $81.3 million in the third quarter
of 2017. Excluding a $6.0 million decrease due to the impact of
foreign currency depreciation, Australian Operations revenues
increased $1.4 million, or 1.9%, primarily due to an increase in
freight revenues.(2)
G&W's Australian Operations had operating income of $20.7
million in the third quarter of 2018, compared with $22.3 million
in the third quarter of 2017. The operating ratio for Australian
Operations was 73.0% in the third quarter of 2018, compared with an
operating ratio of 72.6% in the third quarter of 2017. Adjusted
operating income from G&W's Australian Operations was $19.8
million in the third quarter of 2018, compared with adjusted
operating income of $21.8 million in the third quarter of 2017. The
adjusted operating ratio for Australian Operations was 74.2% in the
third quarter of 2018, compared with an adjusted operating ratio of
73.2% in the third quarter of 2017.(1)
Operating revenues from G&W's U.K./European Operations
decreased $5.8 million, or 3.3%, to $170.9 million in the third
quarter of 2018, compared with $176.7 million in the third quarter
of 2017. Excluding $13.7 million of revenues from G&W's
divested ERS operations for the third quarter of 2017 and a
$1.2 million decrease due to the impact of foreign currency
depreciation, U.K./European same railroad revenues increased
$9.1 million, or 5.6%, primarily due to increases in
freight-related and freight revenues in the U.K. and Poland.(2)
G&W's U.K./European Operations had operating income of $4.6
million in the third quarter of 2018, compared with $5.4 million in
the third quarter of 2017, which included $2.6 million from ERS.
The operating ratio for U.K./European Operations was 97.3% in the
third quarter of 2018, compared with an operating ratio of 97.0% in
the third quarter of 2017. Adjusted operating income from G&W's
U.K./European Operations was $8.1 million in the third quarter of
2018, compared with adjusted operating income of $9.3 million in
the third quarter of 2017, which included $3.3 million from ERS.
The adjusted operating ratio for U.K./European Operations was 95.2%
in the third quarter of 2018, compared with an adjusted operating
ratio of 94.7% in the third quarter of 2017.(1)
Adjusted Free Cash Flow Measures (1)
Adjusted free cash flow measures for the nine months ended
September 30, 2018 and 2017 were as follows (in millions):
Nine Months Ended September 30,
2018 2017 Net cash provided by
operating activities $ 397.5 $ 350.4 Allocation of adjusted cash
flow to noncontrolling interest(a) (21.6 ) (21.9 ) Adjusted net
cash provided by operating activities attributable to G&W $
375.8 $ 328.5 Core capital expenditures(b) (141.7 ) (123.7 )
Adjusted free cash flow attributable to G&W before new business
investments and grant funded projects $ 234.1 $ 204.8 New business
investments (31.0 ) (4.5 ) Grant funded projects, net of proceeds
received from outside parties(c)
1.8
0.7 Adjusted free cash flow attributable to G&W $ 204.9
$ 201.1 (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 the
period it was paid) of such distributions made for the nine months
ended September 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 nine months ended September 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 third quarter of 2018, G&W repurchased
approximately 0.9 million shares of Class A Common Stock for $78.2
million, which resulted in a reduction of approximately 0.3 million
shares in our weighted average diluted shares outstanding for the
third quarter.
Conference Call and Webcast Details
As previously announced, G&W's conference call to discuss
financial results for the third quarter of 2018 will be held on
Tuesday, October 30, 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 October 30,
2018, by dialing (800) 475-6701 (or outside the U.S., dialing
320-365-3844). The access code is 439197.
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
NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (in thousands,
except per share amounts) (unaudited)
Three Months
Ended Nine Months Ended September 30,
September 30, 2018 2017 2018
2017 OPERATING REVENUES $ 603,304 $ 576,927 $ 1,772,955 $
1,636,468 OPERATING EXPENSES 475,484 467,085
1,455,097 1,350,993 OPERATING INCOME 127,820 109,842
317,858 285,475 INTEREST INCOME 417 463 1,499 1,271 INTEREST
EXPENSE (26,429 ) (28,281 ) (80,605 ) (80,431 ) OTHER
INCOME/(LOSS), NET 1,515 1,868 (237 ) 4,519
INCOME BEFORE INCOME TAXES 103,323 83,892 238,515 210,834 PROVISION
FOR INCOME TAXES (31,013 ) (30,507 ) (41,569 ) (82,032 ) NET INCOME
$ 72,310 $ 53,385 $ 196,946 $ 128,802 LESS: NET INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST 2,720 3,145 8,090
6,317 NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC.
$ 69,590 $ 50,240 $ 188,856 $ 122,485
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE &
WYOMING INC. COMMON STOCKHOLDERS: $ 1.18 $ 0.82 $
3.13 $ 1.99 WEIGHTED AVERAGE SHARES - BASIC 59,168
61,629 60,343 61,518 DILUTED EARNINGS
PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON
STOCKHOLDERS: $ 1.16 $ 0.80 $ 3.08 $ 1.96
WEIGHTED AVERAGE SHARES - DILUTED 60,131 62,477
61,255 62,399
GENESEE &
WYOMING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS AS OF SEPTEMBER 30, 2018 AND DECEMBER 31, 2017
(in thousands) (unaudited)
September 30, December 31, 2018
2017 ASSETS CURRENT ASSETS: Cash and cash equivalents $
74,067 $ 80,472 Accounts receivable, net 441,105 416,705 Materials
and supplies 52,517 57,750 Prepaid expenses and other 54,292
34,606 Total current assets 621,981 589,533 PROPERTY AND
EQUIPMENT, net 4,613,295 4,656,921 GOODWILL 1,128,580 1,165,587
INTANGIBLE ASSETS, net 1,466,137 1,567,038 DEFERRED INCOME TAX
ASSETS, net 3,883 3,343 OTHER ASSETS 70,122 52,475 Total
assets $ 7,903,998 $ 8,034,897 LIABILITIES AND EQUITY
CURRENT LIABILITIES: Current portion of long-term debt $ 25,138 $
27,853 Accounts payable 271,539 253,993 Accrued expenses 171,011
185,935 Total current liabilities 467,688 467,781
LONG-TERM DEBT, less current portion 2,300,556 2,303,442 DEFERRED
INCOME TAX LIABILITIES, net 866,821 873,194 DEFERRED ITEMS - grants
from outside parties 323,370 321,592 OTHER LONG-TERM LIABILITIES
162,993 172,796 TOTAL EQUITY 3,782,570 3,896,092 Total
liabilities and equity $ 7,903,998 $ 8,034,897
GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER
30, 2018 AND 2017 (in thousands) (unaudited)
Nine Months Ended September 30,
2018 2017 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income $ 196,946 $ 128,802 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 197,127 186,509 Stock-based
compensation 13,029 13,354 Deferred income taxes 7,978 51,231 Net
gain on sale and impairment of assets (2,501 ) (1,096 ) Changes in
assets and liabilities which provided/(used) cash, net of effect of
acquisitions: Accounts receivable, net (50,143 ) (18,020 )
Materials and supplies 3,133 8,998 Prepaid expenses and other
(11,663 ) 14,257 Accounts payable and accrued expenses 33,818
(41,529 ) Other assets and liabilities, net 9,750 7,883
Net cash provided by operating activities 397,474
350,389 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of
property and equipment (194,132 ) (149,105 ) Grant proceeds from
outside parties 16,696 15,998 Net cash paid for acquisitions, net
of cash acquired — (107,586 ) Proceeds from sale of business 7,927
— Proceeds from sale of investment — 2,100 Insurance proceeds for
the replacement of assets 2,780 1,406 Proceeds from disposition of
property and equipment 3,710 4,238 Other investing activities
(2,921 ) — Net cash used in investing activities (165,940 )
(232,949 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments
on revolving line-of-credit, long-term debt and capital leases
(766,713 ) (498,925 ) Proceeds from revolving line-of-credit and
long-term borrowings 821,666 418,735 Debt amendment/issuance costs
(5,318 ) — Common share repurchases (270,488 ) — Distribution to
noncontrolling interest (14,898 ) — Installment payments on
Freightliner deferred consideration (6,255 ) — Other financing
related activities, net 5,006 4,728 Net cash used in
financing activities (237,000 ) (75,462 ) EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS (939 ) 5,980
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (6,405 ) 47,958
CASH AND CASH EQUIVALENTS, beginning of period 80,472 32,319
CASH AND CASH EQUIVALENTS, end of period $ 74,067 $
80,277
GENESEE & WYOMING INC. AND
SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands) (unaudited)
Three Months Ended
September 30, Nine Months Ended September 30,
2018 2017 2018 2017 Amount
% of Revenue
Amount
% of Revenue
Amount
% of Revenue
Amount
% of Revenue
Operating
revenues:
Freight revenues $ 423,374 70.2 % $ 400,735 69.5 % $ 1,241,245 70.0
% $ 1,161,635 71.0 % Freight-related revenues 145,450 24.1 %
140,923 24.4 % 429,049 24.2 % 387,881 23.7 % All other revenues
34,480 5.7 % 35,269 6.1 % 102,661 5.8 % 86,952
5.3 % Total operating revenues $ 603,304 100.0 % $
576,927 100.0 % $ 1,772,955 100.0 % $ 1,636,468
100.0 %
Operating
expenses:
Labor and benefits(a) $ 175,853 29.1 % $ 169,576 29.4 % $ 539,407
30.4 % $ 500,936 30.6 % Equipment rents 35,325 5.9 % 33,291 5.8 %
104,214 5.9 % 100,399 6.1 % Purchased services(b) 53,717 8.9 %
68,562 11.9 % 178,864 10.1 % 176,358 10.8 % Depreciation and
amortization 65,392 10.9 % 64,222 11.1 % 197,127 11.1 % 186,509
11.4 % Diesel fuel used in train operations 45,713 7.6 % 34,535 6.0
% 137,487 7.8 % 105,718 6.5 % Electricity used in train operations
2,742 0.5 % 765 0.1 % 7,020 0.4 % 6,072 0.4 % Casualties and
insurance 9,912 1.6 % 10,624 1.9 % 32,862 1.8 % 33,346 2.0 %
Materials 32,744 5.4 % 30,664 5.3 % 97,589 5.5 % 77,861 4.8 %
Trackage rights 22,838 3.8 % 22,632 3.9 % 67,119 3.8 % 66,652 4.1 %
Net gain on sale and impairment of assets (642 ) (0.1 )% (315 )
(0.1 )% (2,501 ) (0.1 )% (1,096 ) (0.1 )% Restructuring and related
costs 3,286 0.5 % 2,628 0.5 % 12,931 0.7 % 8,744 0.5 % Other
expenses(c) 28,604 4.7 % 29,901 5.2 % 82,978
4.7 % 89,494 5.5 % Total operating expenses $ 475,484
78.8 % $ 467,085 81.0 % $ 1,455,097 82.1 % $
1,350,993 82.6 % (a) Includes $0.1 million and $0.4
million of corporate development and related costs for the three
and nine months ended September 30, 2018, respectively. Includes
$0.4 million and $3.2 million of corporate development and related
costs for the three and nine months ended September 30, 2017,
respectively, primarily associated with severance costs related to
the integration of the Providence & Worcester Railroad Company
(P&W). (b)
Includes $0.2 million and $0.3 million of
corporate development and related costs for the three and nine
months ended September 30, 2018, respectively. Includes $0.1
million and $0.4 million of corporate development and related costs
for the three and nine months ended September 30, 2017,
respectively.
(c) Includes $0.9 million and $7.3 million gain on settlement
related to Arrium Limited's voluntary administration for the three
and nine months ended September 30, 2018, respectively. Includes
$0.4 million of credit facility refinancing-related costs for the
nine months ended September 30, 2018. Includes $0.1 million and
$0.2 million of corporate development and related costs for the
three and nine months ended September 30, 2018, respectively.
Includes $1.3 million and $7.2 million of corporate development and
related costs for the three and nine months ended September 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 September 30, Nine Months Ended
September 30, 2018 2017 2018
2017 Amount
% of Revenue
Amount
% of Revenue
Amount
% of Revenue
Amount
% of Revenue
Operating
revenues:
Freight revenues $ 273,432 76.9 % $ 242,968 76.2 % $ 778,717 76.3 %
$ 719,622 75.4 % Freight-related revenues 66,045 18.6 % 60,286 18.9
% 193,344 18.9 % 186,814 19.6 % All other revenues 16,232
4.5 % 15,673 4.9 % 48,835 4.8 % 47,641 5.0 %
Total operating revenues $ 355,709 100.0 % $ 318,927
100.0 % $ 1,020,896 100.0 % $ 954,077 100.0 %
Operating
expenses:
Labor and benefits(a) $ 107,940 30.3 % $ 102,692 32.2 % $ 329,146
32.2 % $ 314,932 33.0 % Equipment rents 15,441 4.4 % 12,623 4.0 %
41,574 4.1 % 39,993 4.2 % Purchased services(b) 14,968 4.2 % 15,254
4.8 % 43,550 4.3 % 45,350 4.8 % Depreciation and amortization
41,388 11.6 % 40,036 12.5 % 123,266 12.1 % 117,822 12.3 % Diesel
fuel used in train operations 23,230 6.5 % 16,934 5.3 % 71,963 7.0
% 54,038 5.7 % Casualties and insurance 6,636 1.9 % 8,488 2.7 %
23,249 2.3 % 26,532 2.8 % Materials 12,836 3.6 % 11,889 3.7 %
39,189 3.8 % 38,413 4.0 % Trackage rights 10,586 3.0 % 10,025 3.1 %
30,225 2.9 % 28,732 3.0 % Net gain on sale and impairment of assets
(506 ) (0.1 )% (110 ) — % (2,124 ) (0.2 )% (870 ) (0.1 )%
Restructuring and related costs 1 — % 316 0.1 % 42 — % 384 — %
Other expenses(c) 20,705 5.8 % 18,577 5.8 % 64,898
6.4 % 59,206 6.2 % Total operating expenses $ 253,225
71.2 % $ 236,724 74.2 % $ 764,978 74.9 % $
724,532 75.9 % Operating income $ 102,484 $ 82,203
$ 255,918 $ 229,545 Expenditures for additions
to property & equipment, net of grants from outside parties $
42,120 $ 41,713 $ 129,607 $ 105,940 (a) Includes $0.1
million and $0.4 million of corporate development and related costs
for the three and nine months ended September 30, 2018,
respectively. Includes $0.4 million and $3.1 million of corporate
development and related costs for the three and nine months ended
September 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
nine months ended September 30, 2017. (c) Includes $0.4 million of
credit facility refinancing-related costs for the nine months ended
September 30, 2018. Includes $0.1 million and $0.2 million of
corporate and development and related costs for the three and nine
months ended September 30, 2018, respectively. Includes $0.2
million and $4.2 million of corporate development and related costs
for the three and nine months ended September 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 September 30, Nine Months Ended September
30, 2018 2017 2018 2017
Amount
% of Revenue
Amount
% of Revenue
Amount
% of Revenue
Amount
% of Revenue
Operating
revenues:
Freight revenues $ 65,249 85.1 % $ 66,404 81.7 % $ 194,335 84.3 % $
191,031 82.3 % Freight-related revenues 10,136 13.2 % 12,880 15.8 %
32,214 14.0 % 36,089 15.6 % All other revenues 1,318 1.7 %
1,986 2.5 % 4,017 1.7 % 4,866 2.1 % Total
operating revenues $ 76,703 100.0 % $ 81,270 100.0 %
$ 230,566 100.0 % $ 231,986 100.0 %
Operating
expenses:
Labor and benefits $ 17,400 22.7 % $ 17,618 21.6 % $ 55,318 24.0 %
$ 52,447 22.6 % Equipment rents 1,452 1.9 % 1,480 1.8 % 3,950 1.7 %
4,215 1.8 % Purchased services 6,319 8.2 % 7,139 8.8 % 19,603 8.5 %
19,821 8.6 % Depreciation and amortization 14,937 19.5 % 15,753
19.4 % 46,232 20.1 % 45,915 19.8 % Diesel fuel used in train
operations 8,074 10.5 % 6,003 7.4 % 23,557 10.2 % 18,913 8.2 %
Casualties and insurance 1,651 2.2 % 1,367 1.7 % 5,198 2.3 % 4,219
1.8 % Materials 3,003 3.9 % 3,398 4.2 % 8,725 3.8 % 8,629 3.7 %
Trackage rights 1,932 2.5 % 3,500 4.3 % 6,510 2.8 % 10,392 4.5 %
Net gain on sale and impairment of assets (20 ) — % (37 ) — % (133
) (0.1 )% (59 ) — % Restructuring and related costs — — % — — % — —
% 338 0.1 % Other expenses, net(a) 1,242 1.6 % 2,773
3.4 % (979 ) (0.4 )% 7,471 3.2 % Total operating expenses $
55,990 73.0 % $ 58,994 72.6 % $ 167,981 72.9 %
$ 172,301 74.3 % Operating income $ 20,713 $ 22,276
$ 62,585 $ 59,685 Expenditures for additions
to property & equipment, net of grants from outside parties $
8,185 $ 4,545 $ 27,936 $ 9,721 (a)
Includes $0.9 million and $7.3 million
gain on settlement related to Arrium Limited's voluntary
administration for the three and nine months ended September 30,
2018, respectively. Includes $0.5 million and $0.3 million
of credits (corporate development and related costs) for the
three and nine months ended September 30, 2017, respectively,
primarily associated with a refund.
GENESEE & WYOMING INC. AND SUBSIDIARIES
U.K./EUROPEAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL
INFORMATION (dollars in thousands) (unaudited)
Three
Months Ended September 30, Nine Months Ended September
30, 2018 2017 2018 2017
Amount % of Revenue Amount % of Revenue
Amount % of Revenue Amount % of Revenue
Operating
revenues:
Freight revenues $ 84,693 49.6 % $ 91,363 51.7 % $ 268,193 51.4 % $
250,982 55.8 % Freight-related revenues 69,269 40.5 % 67,757 38.3 %
203,491 39.0 % 164,978 36.6 % All other revenues 16,930 9.9
% 17,610 10.0 % 49,809 9.6 % 34,445 7.6 %
Total operating revenues $ 170,892 100.0 % $ 176,730
100.0 % $ 521,493 100.0 % $ 450,405 100.0 %
Operating
expenses:
Labor and benefits(a) $ 50,513 29.6 % $ 49,266 27.9 % $ 154,943
29.7 % $ 133,557 29.6 % Equipment rents 18,432 10.8 % 19,188 10.9 %
58,690 11.3 % 56,191 12.5 % Purchased services(b) 32,430 19.0 %
46,169 26.1 % 115,711 22.2 % 111,187 24.7 % Depreciation and
amortization 9,067 5.3 % 8,433 4.8 % 27,629 5.3 % 22,772 5.1 %
Diesel fuel used in train operations 14,409 8.4 % 11,598 6.6 %
41,967 8.0 % 32,767 7.3 % Electricity used in train operations
2,742 1.6 % 765 0.4 % 7,020 1.3 % 6,072 1.2 % Casualties and
insurance 1,625 1.0 % 769 0.4 % 4,415 0.8 % 2,595 0.6 % Materials
16,905 9.9 % 15,377 8.7 % 49,675 9.5 % 30,819 6.8 % Trackage rights
10,320 6.0 % 9,107 5.2 % 30,384 5.8 % 27,528 6.1 % Net (gain)/loss
on sale and impairment of assets (116 ) (0.1 )% (168 ) (0.1 )% (244
) — % (167 )
—
% Restructuring and related costs 3,285 1.9 % 2,312 1.3 % 12,889
2.5 % 8,022 1.8 % Other expenses(c) 6,657 3.9 % 8,551
4.8 % 19,059 3.7 % 22,817 5.1 % Total operating
expenses $ 166,269 97.3 % $ 171,367 97.0 % $ 522,138
100.1 % $ 454,160 100.8 % Operating income/(loss) $
4,623 $ 5,363 $ (645 ) $ (3,755 ) Expenditures
for additions to property & equipment, net of grants from
outside parties $ 6,704 $ 6,981 $ 19,893 $ 17,446 (a)
Includes $0.1 million of corporate development and related costs
for the nine months ended September 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 nine months
ended September 30, 2018. Includes $0.1 and $0.3 million of
corporate development and related costs for the three and nine
months ended September 30, 2017, respectively, primarily 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 nine months ended September 30, 2018.
Includes $1.5 million and $3.3 million of corporate development and
related costs for the three and nine months ended September 30,
2017, respectively, primarily 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 September 30,
2018 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 $ 30,565 50,989 $ 599 $ 4,150 6,529 $ 636 $
1,053 776 $ 1,357 $ 35,768 58,294 $ 614 Autos & Auto Parts
5,513 8,724 632 — — —
—
—
— 5,513 8,724 632 Chemicals & Plastics 38,436 43,903 875 — — —
—
—
— 38,436 43,903 875 Coal & Coke 23,006 70,314 327 32,357
106,809 303 2,588 4,271 606 57,951 181,394 319 Food & Kindred
Products 8,761 15,312 572 — — — —
—
— 8,761 15,312 572 Intermodal 514 4,922 104 17,538 14,610 1,200
58,609 188,002 312 76,661 207,534 369 Lumber & Forest Products
24,113 37,328 646 — —
—
—
—
— 24,113 37,328 646 Metallic Ores 3,573 4,655 768 8,914 6,464 1,379
—
—
— 12,487 11,119 1,123 Metals 34,904 43,752 798 — — — —
—
— 34,904 43,752 798 Minerals & Stone 38,570 60,496 638 2,066
16,813 123 22,344 48,111 464 62,980 125,420 502 Petroleum Products
18,236 26,231 695 224 93 2,409 99 222 446 18,559 26,546 699 Pulp
& Paper 31,961 44,403 720 — — — — — — 31,961 44,403 720 Waste
8,089 15,859 510 — — — — — — 8,089 15,859 510 Other 7,191 19,331
372 — — — — — — 7,191 19,331 372 Totals $ 273,432 446,219 $ 613 $
65,249 151,318 $ 431 $ 84,693 241,382 $ 351 $ 423,374 838,919 $ 505
Three Months Ended September 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 $ 28,699 47,588 $ 603 $ 6,059 13,163 $ 460 $
964 777 $ 1,241 $ 35,722 61,528 $ 581 Autos & Auto Parts 6,079
9,728 625 — — — — — — 6,079 9,728 625 Chemicals & Plastics
36,745 43,739 840 — — — — — — 36,745 43,739 840 Coal & Coke
20,008 60,864 329 29,013 81,142 358 2,345 3,798 617 51,366 145,804
352 Food & Kindred Products 8,257 14,415 573 — — — — — — 8,257
14,415 573 Intermodal 311 3,145 99 19,012 15,416 1,233 67,374
229,059 294 86,697 247,620 350 Lumber & Forest Products 22,204
35,846 619 — — — — — — 22,204 35,846 619 Metallic Ores 3,703 4,667
793 11,305 8,354 1,353 — — — 15,008 13,021 1,153 Metals 26,008
34,003 765 — — — — — — 26,008 34,003 765 Minerals & Stone
34,769 57,104 609 792 5,488 144 20,680 49,146 421 56,241 111,738
503 Petroleum Products 16,425 24,772 663 223 88 2,534 — — — 16,648
24,860 670 Pulp & Paper 28,135 42,244 666 — — — — — — 28,135
42,244 666 Waste 6,662 14,330 465 — — — — — — 6,662 14,330 465
Other 4,963 15,252 325 — — — — — — 4,963 15,252 325 Totals $
242,968 407,697 $ 596 $ 66,404 123,651 $ 537 $ 91,363 282,780 $ 323
$ 400,735 814,128 $ 492
* 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)
Nine Months Ended
September 30, 2018 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 $ 91,630 156,515 $ 585 $ 15,639 33,816 $ 462
$ 3,073 2,349 $ 1,308 $ 110,342 192,680 $ 573 Autos & Auto
Parts 16,686 26,546 629 — — — — — — 16,686 26,546 629 Chemicals
& Plastics 113,625 132,530 857 — — — — — — 113,625 132,530 857
Coal & Coke 62,038 191,626 324 96,506 300,947 321 8,751 14,204
616 167,295 506,777 330 Food & Kindred Products 25,587 45,402
564 — — — — — — 25,587 45,402 564 Intermodal 1,203 11,822 102
50,613 41,321 1,225 192,413 599,840 321 244,229 652,983 374 Lumber
& Forest Products 70,362 111,311 632 — — — — — — 70,362 111,311
632 Metallic Ores 10,816 13,499 801 24,770 16,921 1,464 — — —
35,586 30,420 1,170 Metals 95,791 119,796 800 — — — — — — 95,791
119,796 800 Minerals & Stone 107,122 170,348 629 6,247 49,567
126 63,849 142,577 448 177,218 362,492 489 Petroleum Products
52,870 76,231 694 560 226 2,478 107 242 442 53,537 76,699 698 Pulp
& Paper 90,346 127,522 708 — — — — — — 90,346 127,522 708 Waste
21,316 42,677 499 — — — — — — 21,316 42,677 499 Other 19,325 56,760
340 — — — — — — 19,325 56,760 340 Totals $ 778,717 1,282,585 $ 607
$ 194,335 442,798 $ 439 $ 268,193 759,212 $ 353 $ 1,241,245
2,484,595 $ 500
Nine Months Ended September 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 $ 92,956 157,792 $ 589 $ 17,737 43,804 $ 405
$ 3,532 3,036 $ 1,163 $ 114,225 204,632 $ 558 Autos & Auto
Parts 17,019 27,705 614 — — — — — — 17,019 27,705 614 Chemicals
& Plastics 111,660 134,561 830 — — — — — — 111,660 134,561 830
Coal & Coke 57,123 170,664 335 86,292 271,485 318 7,464 18,333
407 150,879 460,482 328 Food & Kindred Products 24,856 44,091
564 — — — — — — 24,856 44,091 564 Intermodal 726 7,313 99 52,113
44,153 1,180 190,163 669,963 284 243,002 721,429 337 Lumber &
Forest Products 64,903 105,020 618 — — — — — — 64,903 105,020 618
Metallic Ores 10,519 13,840 760 29,595 24,114 1,227 — — — 40,114
37,954 1,057 Metals 78,681 104,496 753 — — — — — — 78,681 104,496
753 Minerals & Stone 97,446 160,917 606 4,787 35,394 135 49,823
127,210 392 152,056 323,521 470 Petroleum Products 50,696 73,821
687 507 206 2,461 — — — 51,203 74,027 692 Pulp & Paper 79,690
120,831 660 — — — — — — 79,690 120,831 660 Waste 19,000 39,461 481
— — — — — — 19,000 39,461 481 Other 14,347 47,248 304 — — — — — —
14,347 47,248 304 Totals $ 719,622 1,207,760 $ 596 $ 191,031
419,156 $ 456 $ 250,982 818,542 $ 307 $ 1,161,635 2,445,458 $ 475
* 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 September 30,
2018
North American
Operations
Australian Operations
U.K./European Operations
Total Operations
Operating revenues $ 355.7 $ 76.7 $ 170.9 $ 603.3 Operating
expenses 253.2 56.0 166.3 475.5
Operating income(a) $ 102.5 $ 20.7 $ 4.6 $
127.8 Operating ratio (b) 71.2 % 73.0 % 97.3 % 78.8 %
Operating expenses $ 253.2 $ 56.0 $ 166.3 $ 475.5 Corporate
development and related costs (0.1 ) — (0.2 ) (0.3 ) Restructuring
and related costs — — (3.3 ) (3.3 ) Gain on settlement — 0.9
— 0.9 Adjusted operating expenses $ 253.1
$ 56.9 $ 162.7 $ 472.8 Adjusted
operating income $ 102.6 $ 19.8 $ 8.1 $ 130.5
Adjusted operating ratio 71.2 % 74.2 % 95.2 % 78.4 % (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 September 30, 2017
North American
Operations
Australian Operations
U.K./European Operations
Total Operations
Operating revenues $ 318.9 $ 81.3 $ 176.7 $ 576.9 Operating
expenses 236.7 59.0 171.4 467.1
Operating income (a) $ 82.2 $ 22.3 $ 5.4 $
109.8 Operating ratio (b) 74.2 % 72.6 % 97.0 % 81.0 %
Operating expenses $ 236.7 $ 59.0 $ 171.4 $ 467.1 Corporate
development and related costs (0.6 ) 0.5 (1.6 ) (1.7 )
Restructuring costs (0.3 ) — (2.3 ) (2.6 ) Adjusted
operating expenses $ 235.8 $ 59.5 $ 167.4 $
462.7 Adjusted operating income $ 83.1 $ 21.8
$ 9.3 $ 114.2 Adjusted operating ratio 73.9 % 73.2 %
94.7 % 80.2 % (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 September 30, 2018
Income Before Income
Taxes
Provision for Income
Taxes
Net Income Attributable
to G&W
Diluted EPS As reported $ 103.3 $ (31.0 ) $
69.6 $ 1.16 Add back certain items: Corporate development and
related costs 0.3 (0.1 ) 0.3 — Restructuring and related costs 3.3
(0.6 ) 2.7 0.04 Gain on settlement (0.9 ) 0.3 (0.3 ) (0.01 ) TCJA
measurement period adjustment — 1.6 1.6 0.03
As adjusted $ 106.0 $ (29.8 ) $ 73.8 $ 1.23
Three Months Ended September 30, 2017
Income Before Income
Taxes
Provision forIncome
Taxes
Net Income Attributable
to G&W
Diluted EPS As reported $ 83.9 $ (30.5 ) $
50.2
$ 0.80 Add back certain items: Corporate development and related
costs 1.7 (0.8 ) 1.4 0.02 Restructuring costs 2.6 (0.4 ) 2.2 0.04
Recognition of unrecognized tax benefits
—
(3.3 )
(3.3 ) (0.05 ) As adjusted $ 88.3 $ (35.0 ) $
50.6
$ 0.81
Adjusted Free Cash Flow Measures
Nine Months Ended September 30,
2018 2017 Net cash provided by
operating activities $ 397.5 $ 350.4 Allocation of adjusted cash
flow to noncontrolling interest(a) (21.6 ) (21.9 ) Adjusted net
cash provided by operating activities attributable to G&W $
375.8 $ 328.5 Core capital expenditures(b) (141.7 ) (123.7 )
Adjusted free cash flow attributable to G&W before new business
investments and grant funded projects $ 234.1 $ 204.8 New business
investments(b) (31.0 ) (4.5 ) Grant funded projects, net of
proceeds received from outside parties(b) 1.8 0.7
Adjusted free cash flow attributable to G&W $ 204.9 $
201.1 (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 the period it was paid) of such
distributions made for the nine months ended September 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
nine months ended September 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.
Nine Months Ended September 30, 2018
Core Capital(1)
New Business Investments
Grant Funded
Projects(2)
Total Purchase of property and equipment $
(148.2 ) $ (31.0 ) $ (14.9 ) $ (194.1 ) Grant proceeds from outside
parties — — 16.7 16.7 Insurance proceeds for the replacement of
assets 2.8 — — 2.8 Proceeds from disposition of property and
equipment 3.7 — — 3.7 Purchase of
property and equipment, net $ (141.7 ) $ (31.0 ) $ 1.8 $
(170.9 )
Nine Months Ended September 30,
2017
Core Capital(1)
New Business Investments
Grant Funded
Projects(2)
Total Purchase of property and equipment $ (129.3 ) $ (4.5 )
$ (15.3 ) $ (149.1 ) Grant proceeds from outside parties — — 16.0
16.0 Insurance proceeds for the replacement of assets 1.4 — — 1.4
Proceeds from disposition of property and equipment 4.2 —
— 4.2 Purchase of property and equipment, net
$ (123.7 ) $ (4.5 ) $ 0.7 $ (127.5 )
(1)
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.
(2)
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181030005326/en/
G&W Corporate CommunicationsMichael Williams,
1-203-202-8900mwilliams@gwrr.com
Genesee and Wyoming (NYSE:GWR)
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Genesee and Wyoming (NYSE:GWR)
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