Genesee & Wyoming Inc. (G&W) (NYSE:GWR)
Fourth Quarter 2018 Consolidated Highlights Compared with
Fourth Quarter 2017
- Operating revenues increased 0.7% to
$575.6 million from $571.6 million.
- Reported operating income decreased
0.8% to $105.7 million; Adjusted operating income increased 5.6% to
$109.9 million.(1)
- Reported diluted earnings per share
(EPS) were $0.94 with 58.9 million weighted average shares
outstanding, compared with reported diluted EPS in the fourth
quarter of 2017 of $6.81 with 62.7 million weighted average shares
outstanding; Adjusted diluted EPS increased 29.9% to $1.00.(1)
- G&W repurchased approximately 2.4
million shares of its Class A Common Stock for $189.6 million
during the fourth quarter of 2018.
- Net cash provided by operating
activities for the year ended December 31, 2018 increased 15.4% to
$553.1 million; adjusted free cash flow attributable to G&W
before new business investments and grant funded projects increased
20.8% to $326.0 million; adjusted free cash flow attributable to
G&W increased 12.1% to $280.6 million.(1)
- A number of items affect comparability
between the fourth quarter of 2018 and 2017, the most significant
of which was the impact of the U.S. Tax Cuts and Jobs Act (TCJA)
enacted in December 2017.
Fourth Quarter 2018 Segment Highlights Compared with Fourth
Quarter of 2017
- North America: Operating revenues from
G&W's North American Operations increased 5.5% to $338.0
million from $320.2 million. Reported operating income from
G&W's North American Operations increased 16.7% to $87.2
million; Adjusted operating income from G&W's North American
Operations increased 18.1% to $89.3 million.(1)
- Australia: Operating revenues from
G&W's Australian Operations decreased 5.8% to $71.1 million
from $75.5 million. Reported operating income from G&W's
Australian Operations remained relatively flat at $17.7 million.
Adjusted operating income from G&W's Australian Operations
decreased 21.2% to $17.7 million.(1)
- U.K./Europe: Operating revenues from
G&W's U.K./European Operations decreased 5.3% to $166.5 million
from $175.8 million. Revenues in the fourth quarter of 2017
included $12.2 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 $0.8 million in 2017 from
ERS, decreased to $0.8 million, compared with $14.2 million in
2017; Adjusted operating income from G&W's U.K./European
Operations decreased 51.8% to $2.8 million.(1)
Jack Hellmann, Chairman and CEO of G&W, commented, “In the
fourth quarter of 2018, our reported diluted EPS were $0.94
compared with $6.81 in the fourth quarter of 2017. Our adjusted
diluted EPS increased 30% to $1.00 in the fourth quarter of 2018,
led by a 17% increase in our North American operating income due to
5.8% growth in carloads and a 250 basis point improvement in our
operating ratio. The strong results in North America more than
offset weaker performance in our Australian and U.K./European
operations.”(1)
“For the full year, our reported diluted EPS were $4.03 in 2018
compared with $8.79 in 2017. Our adjusted diluted EPS increased
32.3% to $3.85 in 2018 and we expect double digit adjusted diluted
EPS growth in 2019.”(1)
“In addition to solid earnings growth, G&W generated record
cash flow in 2018. With strong cash generation, which significantly
exceeded our reported net income, and approximately $455 million of
availability under our revolving credit facility, we continue to
evaluate potential investments in multiple geographies as well as
investments in our own shares. During the fourth quarter of 2018,
we repurchased 2.4 million shares of our common stock for
approximately $190 million.”
Financial Results
G&W's operating revenues increased $4.0 million, or 0.7%, to
$575.6 million, in the fourth quarter of 2018, compared with $571.6
million in the fourth quarter of 2017. G&W's reported operating
income in the fourth quarter of 2018 was $105.7 million, compared
with $106.5 million in the fourth quarter of 2017. Excluding the
net impact of certain items affecting comparability between periods
as discussed below, G&W's adjusted operating income in the
fourth quarter of 2018 was $109.9 million, compared with $104.0
million in the fourth quarter of 2017.(1)
Reported net income attributable to G&W in the fourth
quarter of 2018 was $55.6 million, compared with $426.6 million in
the fourth quarter of 2017. Excluding the net impact of certain
items affecting comparability between periods as discussed below,
adjusted net income attributable to G&W in the fourth quarter
of 2018 was $59.1 million, compared with $48.6 million in the
fourth quarter of 2017.(1)
G&W's reported diluted EPS in the fourth quarter of 2018
were $0.94 with 58.9 million weighted average shares outstanding,
compared with reported diluted EPS in the fourth quarter of 2017 of
$6.81 with 62.7 million weighted average shares outstanding.
Excluding certain items affecting comparability listed below,
G&W's adjusted diluted EPS in the fourth quarter of 2018 were
$1.00 with 58.9 million weighted average shares outstanding,
compared with adjusted diluted EPS in the fourth quarter of 2017 of
$0.77 with 62.7 million weighted average shares outstanding.(1)
Items Affecting Comparability
In the fourth 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
IncomeTaxes Impact
After-Tax
NetIncome/(Loss)Attributableto
G&WImpact
Diluted EPSImpact
Three Months Ended
December 31, 2018
Restructuring and related costs $ (2.2 ) $ (1.7 ) $ (0.03 )
Canadian railroad lease return costs $ (2.1 ) $ (1.5 ) $ (0.02 )
Gain on sale of investment $ 1.4 $ 1.0 $ 0.02 Prior period tax
adjustments $ — $ (1.4 ) $ (0.02 )
Three Months Ended
December 31, 2017
Buyout of Freightliner deferred consideration agreements $ 8.9 $
8.9 $ 0.14 Australia impairment and related costs $ (4.9 ) $ (1.8 )
$ (0.03 ) Restructuring costs $ (1.4 ) $ (1.2 ) $ (0.02 ) Corporate
development and related costs $ (1.1 ) $ (0.7 ) $ (0.01 ) U.K. coal
restructuring and related charges $ 1.1 $ 0.9 $ 0.01 Impact of U.S.
Tax Cuts and Jobs Act (TCJA) $ — $ 371.9 $ 5.94
In the fourth quarter of 2018, G&W’s results included $2.2
million of restructuring and related costs, primarily in the U.K.,
lease return costs of $2.1 million associated with two railroad
leases in Canada that expired in the fourth quarter of 2018, a $1.4
million gain on sale of an investment and $1.4 million of tax
adjustments associated with prior periods.
In the fourth quarter of 2017, G&W’s results included an
$8.9 million reduction to other expenses as a result of the buyout
of the Freightliner Group Limited (Freightliner) deferred
consideration agreements with certain former Freightliner
management holders, Australia impairment and related charges of
$4.9 million, which included $5.9 million related to the write-down
of track assets on idle branch lines in South Australia, partially
offset by a $0.9 million recovery of prior year impairment and
related costs associated with Arrium Limited's voluntary
administration, $1.4 million of restructuring costs, $1.1 million
of corporate development and related costs and a $1.1 million
reduction to expense associated with a prior year accrual
established for the restructuring of our U.K. coal business. The
fourth quarter of 2017 also included a $371.9 million estimated
income tax benefit primarily as a result of reducing the value of
our net deferred tax liabilities from a 35% U.S. federal income tax
rate to the newly enacted rate of 21% associated with the TCJA
signed into law in December 2017.
Fourth Quarter Results by Segment
Operating revenues from G&W's North American Operations
increased $17.8 million, or 5.5%, to $338.0 million in the fourth
quarter of 2018, compared with $320.2 million in the fourth quarter
of 2017.
G&W's North American Operations had operating income in the
fourth quarter of 2018 of $87.2 million, compared with $74.7
million in the fourth quarter of 2017. The operating ratio for
North American Operations was 74.2% in the fourth quarter of 2018,
compared with an operating ratio of 76.7% in the fourth quarter of
2017. Adjusted operating income from G&W's North American
Operations in the fourth quarter of 2018 was $89.3 million,
compared with $75.6 million in the fourth quarter of 2017. The
adjusted operating ratio for North American Operations was 73.6% in
the fourth quarter of 2018, compared with 76.4% in the fourth
quarter of 2017.(1)
Operating revenues from G&W's Australian Operations
decreased $4.4 million, or 5.8%, to $71.1 million in the fourth
quarter of 2018, compared with $75.5 million in the fourth quarter
of 2017. Excluding a $5.0 million decrease due to the impact of
foreign currency depreciation, Australian Operations revenues
increased by $0.6 million, or 0.8%.(2)
G&W's Australian Operations had operating income in the
fourth quarter of 2018 of $17.7 million, compared with $17.6
million in the fourth quarter of 2017. The operating ratio for
Australian Operations was 75.1% in the fourth quarter of 2018,
compared with an operating ratio of 76.7% in the fourth quarter of
2017. Adjusted operating income from G&W's Australian
Operations in the fourth quarter of 2018 was $17.7 million,
compared with $22.5 million in the fourth quarter of 2017. The
adjusted operating ratio for Australian Operations was 75.1% in the
fourth quarter of 2018, compared with 70.2% in the fourth quarter
of 2017.(1)
Operating revenues from G&W's U.K./European Operations
decreased $9.3 million, or 5.3%, to $166.5 million in the fourth
quarter of 2018, compared with $175.8 million in the fourth quarter
of 2017. Excluding $12.2 million from G&W's divested ERS
operations for the fourth quarter of 2017 and a $5.2 million
decrease due to the impact of foreign currency depreciation,
U.K./European Operations same railroad revenues increased $8.1
million, or 5.1%.(2)
G&W's U.K./European Operations had operating income in the
fourth quarter of 2018 of $0.8 million, compared with $14.2 million
in the fourth quarter of 2017, which included $0.8 million from
ERS. The operating ratio for U.K./European Operations was 99.5% in
the fourth quarter of 2018, compared with 91.9% in the fourth
quarter of 2017. Adjusted operating income from G&W's
U.K./European Operations in the fourth quarter of 2018 was $2.8
million, compared with $5.9 million in the fourth quarter of 2017,
which included $1.3 million from ERS. The adjusted operating ratio
for U.K./European Operations was 98.3% in the fourth quarter of
2018, compared with 96.7% in the fourth quarter of 2017.(1)
Consolidated Annual Results
2018 Annual Segment Highlights Compared with 2017
- North America: Operating revenues from
G&W's North American Operations increased 6.6% to $1,358.9
million from $1,274.3 million. Reported operating income from
G&W's North American Operations increased 12.8% to $343.1
million from $304.3 million; Adjusted operating income from
G&W's North American Operations increased 10.7% to $346.3
million from $312.9 million.(1)
- Australia: Operating revenues from
G&W's Australian Operations decreased 1.9% to $301.7 million
from $307.5 million. Reported operating income from G&W's
Australian Operations increased 3.9% to $80.3 million from $77.3
million; Adjusted operating income from G&W's Australian
Operations decreased to $73.1 million from $82.2 million.(1)
- U.K./Europe: Operating revenues from
G&W's U.K./European Operations increased 9.9% to $688.0 million
from $626.2 million, primarily due to new operations from the
Pentalver Transport Limited (Pentalver) acquisition, as well as a
$19.3 million benefit from foreign currency appreciation. Reported
operating income from G&W's U.K./European Operations decreased
to $0.1 million from $10.5 million; Adjusted operating income from
G&W's U.K./European Operations increased to $15.3 million from
$13.8 million.(1)(2)
G&W's provision for income taxes for the year ended December
31, 2018 was $64.5 million compared with a benefit from income
taxes of $261.3 million for the year ended December 31, 2017. The
income tax provision for the year ended December 31, 2018 included
an income tax benefit of $31.6 million associated with the
retroactive extension of the United States Short Line Tax Credit
for fiscal year 2017, which was enacted in February 2018, income
tax expense adjustments of $5.1 million related primarily to
deferred income taxes recorded in prior periods and a $1.6 million
measurement period adjustment to the one-time transition (toll) tax
on earnings of certain foreign subsidiaries. The benefit from
income taxes for year ended December 31, 2017 included an income
tax benefit of approximately $394 million resulting from reducing
the value of our net deferred tax liabilities from a 35% United
States federal income tax rate to the newly enacted rate of 21%,
partially offset by an estimated transitional (toll) tax of
approximately $22 million, both associated with the TCJA.
Reported net income attributable to G&W for the year ended
December 31, 2018 was $244.4 million, compared with $549.1 million
for the year ended December 31, 2017. Excluding the impact of
certain items affecting comparability listed below, adjusted net
income attributable to G&W for the year ended December 31, 2018
was $233.6 million, compared with $182.0 million for the year ended
December 31, 2017.(1)
G&W’s diluted EPS for the year ended December 31, 2018 were
$4.03 with 60.6 million weighted average shares outstanding,
compared with diluted EPS of $8.79 with 62.5 million weighted
average shares outstanding for the year ended December 31, 2017.
Excluding certain items affecting comparability listed below,
G&W’s adjusted diluted EPS for the year ended December 31, 2018
were $3.85 with 60.6 million weighted average shares outstanding,
compared with adjusted diluted EPS of $2.91 with 62.5 million
weighted average shares outstanding for the year ended December 31,
2017.(1)
G&W’s 2018 and 2017 annual 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
IncomeTaxes Impact
After-Tax
NetIncome/(Loss)Attributableto
G&WImpact
Diluted EPSImpact
Year Ended December
31, 2018
Corporate development and related costs $ (0.8 ) $ (0.6 ) $ (0.01 )
Restructuring and related costs $ (15.1 ) $ (12.2 ) $ (0.20 )
Credit facility refinancing-related costs $ (2.7 ) $ (2.0 ) $ (0.03
) Gain on settlement $ 7.3 $ 2.6 $ 0.04 Loss on sale of business $
(1.4 ) $ (1.4 ) $ (0.02 ) Canadian railroad lease return costs $
(2.1 ) $ (1.5 ) $ (0.02 ) Gain on sale of investment $ 1.4 $ 1.0 $
0.02 2017 Short Line Tax Credit $ — $ 31.6 $ 0.52 Prior period tax
adjustment $ — $ (5.1 ) $ (0.08 ) TCJA measurement period
adjustment $ — $ (1.6 ) $ (0.03 )
Year Ended December
31, 2017
Corporate development and related costs $ (11.9 ) $ (8.1 ) $ (0.13
) Restructuring costs $ (10.2 ) $ (9.0 ) $ (0.14 ) Australia
impairment and related costs $ (4.9 ) $ (1.8 ) $ (0.03 ) Buyout of
Freightliner deferred consideration agreements $ 8.9 $ 8.9 $ 0.14
Gain on sale of investment $ 1.6 $ 1.0 $ 0.02 U.K. coal
restructuring and related charges $ 1.1 $ 0.9 $ 0.01 Impact of TCJA
$ — $ 371.9 $ 5.96 Recognition of unrecognized tax benefits $ — $
3.3 $ 0.05
Adjusted Free Cash Flow Measures (1)
Adjusted free cash flow measures for the years ended December
31, 2018 and 2017 were as follows (in millions):
Years Ended 2018
2017 Net cash provided by operating activities $ 553.1 $
479.2 Allocation of adjusted cash flow to noncontrolling
interest(a) (21.4 ) (27.6 ) Adjusted net cash provided by operating
activities attributable to G&W 531.7 451.6 Core capital
expenditures(b) (205.7 ) (181.8 ) Adjusted free cash flow
attributable to G&W before new business investments and grant
funded projects 326.0 269.8 New business investments (44.0 ) (8.6 )
Grant funded projects, net of proceeds received from outside
parties(c) (1.4 ) (11.0 ) Adjusted free cash flow attributable to
G&W $ 280.6 $ 250.2 (a)
Allocation of adjusted cash flow to
noncontrolling interest (Macquarie Infrastructure and Real Assets'
(MIRA) 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. During the year ended December 31, 2018, GWA
made A$65.0 million of such distributions of which A$33.2 million
(or $24.6 million at the applicable exchange rates at the time the
payments were made) and A$31.8 million (or $23.6 million at the
applicable exchange rates at the time the payments were made) was
distributed to G&W and MIRA, respectively, and no such
distributions were made for the year ended December 31, 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
Consolidated 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 Consolidated 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 Consolidated Statement of Cash Flows.
Share Repurchase Program
During the fourth quarter of 2018, G&W repurchased 2.4
million shares of Class A Common Stock for $189.6 million, which
resulted in a reduction of 0.8 million shares in our weighted
average diluted shares outstanding for the fourth quarter of 2018.
During the year ended December 31, 2018, G&W repurchased 6.0
million shares of Class A Common Stock for $460.1 million, which
resulted in a reduction of 2.4 million shares in our weighted
average diluted shares outstanding for the year ended December 31,
2018.
Conference Call and Webcast Details
As previously announced, G&W’s conference call to discuss
financial results for the fourth quarter of 2018 will be held on
Wednesday, February 6, 2019, at 11 a.m. EST. The dial-in
number for the teleconference in the U.S. is (800) 230-1085;
outside the U.S. is (612) 288-0329, 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. EST on February 6, 2019 by dialing (800) 475-6701 (or
outside the U.S., dial 320-365-3844). The access code is
458664.
About G&W
G&W owns or leases 120 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 114
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
Security 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, funding costs 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 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 year 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
TWELVE MONTHS ENDED DECEMBER 31, 2018 AND 2017 (in
thousands, except per share amounts) (unaudited)
Three Months
Ended Twelve Months Ended December 31,
December 31, 2018 2017 2018 2017
OPERATING REVENUES $ 575,595 $ 571,576 $ 2,348,550 $ 2,208,044
OPERATING EXPENSES 469,941 465,070 1,925,038
1,816,063 OPERATING INCOME 105,654 106,506 423,512 391,981
INTEREST INCOME 1,757 811 3,256 2,082 INTEREST EXPENSE (27,114 )
(26,860 ) (107,719 ) (107,291 ) OTHER INCOME/(LOSS), NET 49
4,228 (188 ) 8,747 INCOME BEFORE INCOME TAXES 80,346
84,685 318,861 295,519 (PROVISION FOR)/BENEFIT FROM INCOME TAXES
(22,966 ) 343,291 (64,535 ) 261,259 NET INCOME 57,380
427,976 254,326 556,778 LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTEREST 1,818 1,410 9,908
7,727 NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC.
$ 55,562 $ 426,566 $ 244,418 $ 549,051
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE &
WYOMING INC. COMMON STOCKHOLDERS $ 0.96 $ 6.90 $ 4.09
$ 8.92 WEIGHTED AVERAGE SHARES - BASIC 58,093
61,780 59,745 61,579 DILUTED EARNINGS PER
COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON
STOCKHOLDERS $ 0.94 $ 6.81 $ 4.03 $ 8.79
WEIGHTED AVERAGE SHARES - DILUTED 58,892 62,676
60,628 62,464
GENESEE &
WYOMING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS AS OF DECEMBER 31, 2018 AND 2017 (in
thousands) (unaudited)
December 31, 2018 2017 ASSETS CURRENT ASSETS:
Cash and cash equivalents $ 90,387 $ 80,472 Accounts receivable,
net 426,305 416,705 Materials and supplies 56,716 57,750 Prepaid
expenses and other 54,185 34,606
Total current assets
627,593 589,533 PROPERTY AND EQUIPMENT, net 4,613,014
4,656,921 GOODWILL 1,115,849 1,165,587 INTANGIBLE ASSETS, net
1,430,197 1,567,038 DEFERRED INCOME TAX ASSETS, net 4,616 3,343
OTHER ASSETS, net 77,192 52,475 Total assets $ 7,868,461
$ 8,034,897 LIABILITIES AND EQUITY CURRENT LIABILITIES:
Current portion of long-term debt $ 28,303 $ 27,853 Accounts
payable 288,070 253,993 Accrued expenses 165,280 185,935
Total current liabilities 481,653 467,781 LONG-TERM DEBT,
less current portion 2,425,235 2,303,442 DEFERRED INCOME TAX
LIABILITIES, net 877,721 873,194 DEFERRED ITEMS - grants from
outside parties 326,520 321,592 OTHER LONG-TERM LIABILITIES 127,280
172,796 TOTAL EQUITY 3,630,052 3,896,092 Total liabilities
and equity $ 7,868,461 $ 8,034,897
GENESEE
& WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2018
AND 2017 (in thousands) (unaudited)
Twelve Months Ended December 31, 2018
2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$ 254,326 $ 556,778 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
263,216 250,457 Stock-based compensation 17,652 17,554 Deferred
income taxes 23,373 (319,249 ) Net (gain)/loss on sale and
impairment of assets (3,246 ) 4,254 Changes in assets and
liabilities which (used) provided cash, net of effect of
acquisitions: Accounts receivable, net (35,902 ) (12,969 )
Materials and supplies (2,193 ) 2,474 Prepaid expenses and other
(10,113 ) 23,973 Accounts payable and accrued expenses 37,431
(35,341 ) Other assets and liabilities, net 8,549 (8,725 )
Net cash provided by operating activities 553,093 479,206
CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property
and equipment (284,102 ) (228,472 ) Grant proceeds from outside
parties 20,527 20,249 Cash paid for acquisitions, net of cash
acquired — (107,586 ) Contributions to joint venture (13,671 ) —
Proceeds from sale of business 7,927 — Proceeds from sale of
investments 1,386 2,100 Insurance proceeds for the replacement of
assets 3,008 1,590 Proceeds from disposition of property and
equipment 9,479 5,225 Net cash used in investing
activities (255,446 ) (306,894 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Principal payments on revolving line-of-credit,
long-term debt and capital lease obligations (849,827 ) (661,561 )
Proceeds from revolving line-of-credit and long-term borrowings
1,055,695 523,672 Debt amendment/issuance costs (5,762 ) — Common
share repurchases (460,092 ) — Distributions to noncontrolling
interest (23,583 ) — Installment payments on Freightliner deferred
consideration (6,255 ) — Other financing-related activities, net
5,580 6,980
Net cash used in financing activities
(284,244 ) (130,909 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS (3,488 ) 6,750 INCREASE IN CASH AND CASH
EQUIVALENTS 9,915 48,153 CASH AND CASH EQUIVALENTS, beginning of
period 80,472 32,319 CASH AND CASH EQUIVALENTS, end
of period $ 90,387 $ 80,472
GENESEE
& WYOMING INC. AND SUBSIDIARIES SELECTED CONSOLIDATED
FINANCIAL INFORMATION (dollars in thousands)
(unaudited)
Three Months Ended December 31, Twelve Months Ended
December 31, 2018 2017 2018
2017 Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Operating
revenues:
Freight revenues $ 401,220 69.7 % $ 392,240 68.6 % $ 1,642,465 70.0
% $ 1,553,875 70.4 % Freight-related revenues 142,546 24.8 %
145,770 25.5 % 571,595 24.3 % 533,651 24.2 % All other revenues
31,829 5.5 % 33,566 5.9 % 134,490 5.7 % 120,518 5.4 %
Total operating revenues $ 575,595 100.0 % $ 571,576 100.0 %
$ 2,348,550 100.0 % $ 2,208,044 100.0 %
Operating
expenses:
Labor and benefits(a) $ 170,328 29.6 % $ 165,829 29.0 % $ 709,735
30.2 % $ 666,765 30.2 % Equipment rents(b) 33,993 5.9 % 32,504 5.7
% 138,207 5.9 % 132,903 6.0 % Purchased services(c) 56,039 9.7 %
67,761 11.9 % 234,903 10.0 % 244,119 11.0 % Depreciation and
amortization(d) 66,089 11.5 % 63,948 11.2 % 263,216 11.2 % 250,457
11.3 % Diesel fuel used in train operations 46,950 8.1 % 41,709 7.3
% 184,437 7.9 % 147,427 6.7 % Electricity used in train operations
2,583 0.4 % 1,449 0.3 % 9,603 0.4 % 7,521 0.3 % Casualties and
insurance 12,672 2.2 % 13,647 2.4 % 45,534 2.0 % 46,993 2.1 %
Materials 31,492 5.5 % 29,658 5.2 % 129,081 5.5 % 107,519 4.9 %
Trackage rights 20,624 3.6 % 20,838 3.6 % 87,743 3.7 % 87,490 4.0 %
Net (gain)/loss on sale and impairment of assets(d) (745 ) (0.1 )%
5,350 0.9 % (3,246 ) (0.1 )% 4,254 0.2 % Restructuring and related
costs 2,157 0.4 % 1,416 0.2 % 15,088 0.6 % 10,160 0.5 % Other
expenses(e) 27,759 4.8 % 20,961 3.7 % 110,737 4.7 %
110,455 5.0 % Total operating expenses $ 469,941 81.6 % $
465,070 81.4 % $ 1,925,038 82.0 % $ 1,816,063 82.2 %
Operating income $ 105,654 $ 106,506 $ 423,512 $
391,981
Expenditures for additions to property
& equipment, net of grants from outside parties
$ 86,139 $ 75,116 $ 263,575 $ 208,223 (a) Includes
$0.5 million of corporate development and related costs for the
twelve months ended December 31, 2018. Includes $3.2 million of
corporate development and related costs for the twelve months ended
December 31, 2017. (b) Includes $1.1 million reduction to expense
related to U.K coal restructuring and related charges for both the
three and twelve months ended December 31, 2017. (c) Includes $0.2
million and $0.5 million of corporate development and related costs
for the three and twelve months ended December 31, 2018,
respectively. Includes $0.1 million and $0.5 million of corporate
development and related costs for the three and twelve months ended
December 31, 2017, respectively. (d) Includes an impairment charge
of $5.8 million associated with our Australia business for both the
three and twelve months ended December 31, 2017. (e) Includes a
$7.3 million gain on settlement related to Arrium Limited's
voluntary administration for the twelve months ended December 31,
2018. Includes a $0.3 million and $0.1 million reduction of
corporate development and related costs for the three and twelve
months ended December 31, 2018, respectively. Includes $0.9 million
and $8.2 million of corporate development and related costs for the
three and twelve months ended December 31, 2017, respectively.
Includes $0.9 million recovery of prior year impairment and related
costs associated with Arrium's voluntary administration for both
the three and twelve months ended December 31, 2017. Includes an
$8.9 million reduction to expense as a result of a buyout of the
Freightliner deferred consideration agreements for both the three
and twelve months ended December 31, 2017.
GENESEE
& WYOMING INC. AND SUBSIDIARIES NORTH AMERICAN
OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands) (unaudited)
Three Months Ended December
31, Twelve Months Ended December 31, 2018
2017 2018 2017
Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Operating
revenues:
Freight revenues $ 258,832 76.6 % $ 241,734 75.5 % $ 1,037,549 76.4
% $ 961,356 75.4 % Freight-related revenues 63,818 18.9 % 62,809
19.6 % 257,162 18.9 % 249,623 19.6 % All other revenues 15,324
4.5 % 15,665 4.9 % 64,159 4.7 % 63,306
5.0 % Total operating revenues $ 337,974 100.0 % $ 320,208
100.0 % $ 1,358,870 100.0 % $ 1,274,285 100.0
%
Operating
expenses:
Labor and benefits(a) $ 103,631 30.7 % $ 101,166 31.6 % $ 432,777
31.9 % $ 416,098 32.7 % Equipment rents 12,999 3.8 % 13,146 4.1 %
54,573 4.0 % 53,139 4.2 % Purchased services(b) 16,576 4.9 % 14,465
4.5 % 60,126 4.4 % 59,815 4.7 % Depreciation and amortization
42,359 12.5 % 40,184 12.6 % 165,625 12.2 % 158,006 12.4 % Diesel
fuel used in train operations 25,015 7.4 % 22,814 7.1 % 96,978 7.1
% 76,852 6.0 % Casualties and insurance 9,829 2.9 % 10,730 3.4 %
33,078 2.4 % 37,262 2.9 % Materials 13,509 4.0 % 11,344 3.6 %
52,698 3.9 % 49,757 3.9 % Trackage rights 10,373 3.1 % 9,905 3.1 %
40,598 3.0 % 38,637 3.0 % Net (gain)/loss on sale and impairment of
assets (648 ) (0.2 )% (586 ) (0.2 )% (2,772 ) (0.2 )% (1,456 ) (0.1
)% Restructuring and related costs 11 — % 83 — % 53 — % 467 — %
Other expenses(c) 17,126 5.1 % 22,250 6.9 % 82,024
6.1 % 81,456 6.4 % Total operating expenses $ 250,780
74.2 % $ 245,501 76.7 % $ 1,015,758 74.8 % $
970,033 76.1 % Operating income $ 87,194 $ 74,707
$ 343,112 $ 304,252 Expenditures for additions
to property & equipment, net of grants from outside parties $
53,038 $ 60,745 $ 182,645 $ 166,685 (a)
Includes $0.5 million of corporate
development and related costs for the twelve months ended December
31, 2018. Includes $3.1 million of corporate development and
related costs for the twelve months ended December 31, 2017,
primarily associated with severance costs related to the
integration of the Providence and Worcester Railroad Company.
(b) Includes $0.1 million of corporate development and related
costs for the twelve months ended December 31, 2017. (c)
Includes $0.2 million of corporate
development and related costs for the twelve months ended December
31, 2018. Includes $0.8 million and $5.0 million of corporate
development and related costs for the three and twelve months ended
December 31, 2017, respectively.
GENESEE & WYOMING INC. AND SUBSIDIARIES
AUSTRALIAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL
INFORMATION* (dollars in thousands) (unaudited)
Three Months
Ended December 31, Twelve Months Ended December 31,
2018 2017 2018
2017 Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Operating
revenues:
Freight revenues $ 60,687 85.3 % $ 63,622 84.3 % $ 255,022 84.5 % $
254,653 82.8 % Freight-related revenues 9,038 12.7 % 10,607 14.0 %
41,252 13.7 % 46,696 15.2 % All other revenues 1,387 2.0 %
1,295 1.7 % 5,404 1.8 % 6,161 2.0 % Total operating revenues
$ 71,112 100.0 % $ 75,524 100.0 % $ 301,678 100.0 % $
307,510 100.0 %
Operating
expenses:
Labor and benefits $ 16,714 23.5 % $ 16,488 21.8 % $ 72,032 23.9 %
$ 68,935 22.4 % Equipment rents 1,255 1.7 % 1,362 1.8 % 5,205 1.7 %
5,577 1.8 % Purchased services 5,019 7.1 % 6,448 8.5 % 24,622 8.2 %
26,269 8.6 % Depreciation and amortization 14,534 20.4 % 15,227
20.2 % 60,766 20.1 % 61,142 19.9 % Diesel fuel used in train
operations 7,948 11.2 % 6,323 8.4 % 31,505 10.5 % 25,236 8.2 %
Casualties and insurance 1,359 1.9 % 1,283 1.7 % 6,557 2.2 % 5,502
1.8 % Materials 2,549 3.6 % 2,077 2.7 % 11,274 3.7 % 10,706 3.5 %
Trackage rights 1,621 2.3 % 2,241 3.0 % 8,131 2.7 % 12,633 4.1 %
Net (gain)/loss on sale and impairment of assets(a) (136 ) (0.2 )%
5,856 7.7 % (269 ) (0.1 )% 5,797 1.9 % Restructuring and related
costs — — % — — % — — % 338 0.1 % Other expenses(b) 2,557
3.6 % 653 0.9 % 1,578 0.5 % 8,124 2.6 % Total operating
expenses $ 53,420 75.1 % $ 57,958 76.7 % $ 221,401
73.4 % $ 230,259 74.9 % Operating income $ 17,692 $ 17,566 $
80,277 $ 77,251 Expenditures for additions to property &
equipment, net of grants from outside parties $ 14,786 $ 6,355 $
42,722 $ 16,076 * Amounts shown represent 100% of our
Australian Operations, which is 51.1% owned by G&W. (a)
Includes the write down of track assets on idle branch lines in
South Australia of $5.8 million for both the three and twelve
months ended December 31, 2017. (b) Includes $7.3 million gain on
settlement related to Arrium Limited's voluntary administration for
the twelve months ended December 31, 2018. Includes $0.1 million of
corporate development and related costs for the twelve months ended
December 31, 2018. Includes a $0.3 million reduction of corporate
development and related costs for the twelve months ended December
31, 2017 associated with a refund. Includes a $0.9 million recovery
of prior year impairment and related costs associated with Arrium's
voluntary administration for both the three and twelve months ended
December 31, 2017.
GENESEE & WYOMING INC. AND
SUBSIDIARIES U.K./EUROPEAN OPERATIONS SELECTED CONSOLIDATED
FINANCIAL INFORMATION (dollars in thousands)
(unaudited)
Three Months Ended December 31, Twelve Months Ended
December 31, 2018 2017 2018
2017 Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Amount
% ofRevenue
Operating
revenues:
Freight revenues $ 81,701 49.1 % $ 86,884 49.4 % $ 349,894 50.9 % $
337,866 53.9 % Freight-related revenues 69,690 41.8 % 72,354 41.1 %
273,181 39.7 % 237,332 37.9 % All other revenues 15,118 9.1 %
16,606 9.5 % 64,927 9.4 % 51,051 8.2 % Total
operating revenues $ 166,509 100.0 % $ 175,844 100.0 % $
688,002 100.0 % $ 626,249 100.0 %
Operating
expenses:
Labor and benefits(a) $ 49,983 30.0 % $ 48,175 27.4 % $ 204,926
29.8 % $ 181,732 29.0 % Equipment rents (b) 19,739 11.8 % 17,996
10.2 % 78,429 11.4 % 74,187 11.8 % Purchased services(c) 34,444
20.7 % 46,848 26.7 % 150,155 21.8 % 158,035 25.3 % Depreciation and
amortization 9,196 5.5 % 8,537 4.9 % 36,825 5.3 % 31,309 5.0 %
Diesel fuel used in train operations 13,987 8.4 % 12,572 7.1 %
55,954 8.1 % 45,339 7.2 % Electricity used in train operations
2,583 1.5 % 1,449 0.8 % 9,603 1.4 % 7,521 1.2 % Casualties and
insurance 1,484 0.9 % 1,634 0.9 % 5,899 0.9 % 4,229 0.7 % Materials
15,434 9.3 % 16,237 9.2 % 65,109 9.5 % 47,056 7.5 % Trackage rights
8,630 5.2 % 8,692 5.0 % 39,014 5.7 % 36,220 5.8 % Net loss/(gain)
on sale and impairment of assets 39 — % 80 — % (205 ) — % (87 ) — %
Restructuring and related costs 2,146 1.3 % 1,333 0.8 % 15,035 2.2
% 9,355 1.5 % Other expenses (d) 8,076 4.9 % (1,942 ) (1.1 )%
27,135 3.9 % 20,875 3.3 % Total operating expenses $
165,741 99.5 % $ 161,611 91.9 % $ 687,879 100.0 % $
615,771 98.3 %
Operating income
$ 768 $ 14,233 $ 123 $ 10,478 Expenditures for
additions to property & equipment, net of grants from outside
parties $ 18,315 $ 8,016 $ 38,208 $ 25,462 (a)
Includes $0.1 million of corporate development and related costs
for the twelve months ended December 31, 2017. (b) Includes a $1.1
million reduction to expense related to U.K coal restructuring and
related charges for both the three and twelve months ended December
31, 2017. (c) Includes $0.2 million and $0.5 million of corporate
development and related costs for the three and twelve months ended
December 31, 2018, respectively. Includes $0.1 million and 0.4
million of corporate development and related costs for the three
and twelve months ended December 31, 2017, respectively, associated
with the acquisition and integration of Pentalver. (d)
Includes a $0.3 million and $0.4 million
reduction of corporate development and related costs for the three
and twelve months ended December 31, 2018, respectively. Includes
$0.1 million and $3.4 million of corporate development and related
costs for the three and twelve months ended December 31, 2017,
respectively, associated with the acquisition and integration of
Pentalver. Includes an $8.9 million reduction to expense as a
result of a buyout of the Freightliner deferred consideration
agreements for both the three and twelve months ended December 31,
2017.
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 December
31, 2018 North American Operations Australian
Operations* U.K./European Operations Total
Operations Commodity Group
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
Agricultural Products $ 31,202 51,768 $ 603 $ 2,996 3,532 $ 848 $
1,494 1,105 $ 1,352 $ 35,692 56,405 $ 633 Autos & Auto Parts
4,882 7,604 642 — — — — — — 4,882 7,604 642 Chemicals &
Plastics 38,134 43,381 879 — — — — — — 38,134 43,381 879 Coal &
Coke 21,124 63,725 331 29,093 92,717 314 2,955 5,319 556 53,172
161,761 329 Food & Kindred Products 8,774 15,129 580 — — — — —
— 8,774 15,129 580 Intermodal 462 4,318 107 17,397 14,395 1,209
56,904 181,466 314 74,763 200,179 373 Lumber & Forest Products
21,566 34,043 633 — — — — — — 21,566 34,043 633 Metallic Ores 3,124
3,991 783 9,038 6,816 1,326 — — — 12,162 10,807 1,125 Metals 30,788
38,321 803 — — — — — — 30,788 38,321 803 Minerals & Stone
33,188 51,179 648 2,026 16,609 122 19,733 46,233 427 54,947 114,021
482 Petroleum Products 21,307 29,709 717 137 58 2,362 615 2,288 269
22,059 32,055 688 Pulp & Paper 31,254 42,886 729 — — — — — —
31,254 42,886 729 Waste 7,733 14,946 517 — — — — — — 7,733 14,946
517 Other 5,294 17,388 304 — — — — — — 5,294 17,388 304 Totals $
258,832 418,388 $ 619 $ 60,687 134,127 $ 452 $ 81,701 236,411 $ 346
$ 401,220 788,926 $ 509
Three Months Ended December 31, 2017
North American Operations Australian Operations*
U.K./European Operations Total Operations
Commodity Group
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
Agricultural Products $ 31,329 51,679 $ 606 $ 4,825 8,105 $ 595 $
1,748 1,323 $ 1,321 $ 37,902 61,107 $ 620 Autos & Auto Parts
5,882 9,541 616 — — — — — — 5,882 9,541 616 Chemicals &
Plastics 36,592 43,041 850 — — — — — — 36,592 43,041 850 Coal &
Coke 18,812 53,614 351 31,386 88,306 355 2,508 4,070 616 52,706
145,990 361 Food & Kindred Products 8,568 15,216 563 — — — — —
— 8,568 15,216 563 Intermodal 254 2,525 101 17,320 14,695 1,179
63,691 220,881 288 81,265 238,101 341 Lumber & Forest Products
22,297 35,836 622 — — — — — — 22,297 35,836 622 Metallic Ores 2,872
4,085 703 7,820 5,344 1,463 — — — 10,692 9,429 1,134 Metals 25,182
32,392 777 — — — — — — 25,182 32,392 777 Minerals & Stone
33,065 53,552 617 2,091 16,478 127 18,937 47,733 397 54,093 117,763
459 Petroleum Products 17,692 24,593 719 180 71 2,535 — — — 17,872
24,664 725 Pulp & Paper 27,763 41,041 676 — — — — — — 27,763
41,041 676 Waste 6,063 12,620 480 — — — — — — 6,063 12,620 480
Other 5,363 15,687 342 — — — — — — 5,363 15,687 342 Totals $
241,734 395,422 $ 611 $ 63,622 132,999 $ 478 $ 86,884 274,007 $ 317
$ 392,240 802,428 $ 489 * Australian Operations is
51.1% owned by G&W as of December 1, 2016. ** 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)
Twelve Months
Ended December 31, 2018 North American Operations
Australian Operations* U.K./European Operations
Total Operations Commodity Group
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
Agricultural Products $ 122,832 208,283 $ 590 $ 18,635 37,348 $ 499
$ 4,567 3,454 $ 1,322 $ 146,034 249,085 $ 586 Autos & Auto
Parts 21,568 34,150 632 — — — — — — 21,568 34,150 632 Chemicals
& Plastics 151,759 175,911 863 — — — — — — 151,759 175,911 863
Coal & Coke 83,162 255,351 326 125,599 393,664 319 11,706
19,523 600 220,467 668,538 330 Food & Kindred Products 34,361
60,531 568 — — — — — — 34,361 60,531 568 Intermodal 1,665 16,140
103 68,010 55,716 1,221 249,317 781,306 319 318,992 853,162 374
Lumber & Forest Products 91,928 145,354 632 — — — — — — 91,928
145,354 632 Metallic Ores 13,940 17,490 797 33,808 23,737 1,424 — —
— 47,748 41,227 1,158 Metals 126,579 158,117 801 — — — — — —
126,579 158,117 801 Minerals & Stone 140,310 221,527 633 8,273
66,176 125 83,582 188,810 443 232,165 476,513 487 Petroleum
Products 74,177 105,940 700 697 284 2,454 722 2,530 285 75,596
108,754 695 Pulp & Paper 121,600 170,408 714 — — — — — —
121,600 170,408 714 Waste 29,049 57,623 504 — — — — — — 29,049
57,623 504 Other 24,619 74,148 332 — — — — — — 24,619 74,148 332
Totals $ 1,037,549 1,700,973 $ 610 $ 255,022 576,925 $ 442 $
349,894 995,623 $ 351 $ 1,642,465 3,273,521 $ 502
Twelve Months Ended
December 31, 2017 North American Operations
Australian Operations* U.K./European Operations
Total Operations Commodity Group
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
FreightRevenues
Carloads**
AverageRevenuesPerCarload
Agricultural Products $ 124,285 209,471 $ 593 $ 22,562 51,909 $ 435
$ 5,280 4,359 $ 1,211 $ 152,127 265,739 $ 572 Autos & Auto
Parts 22,901 37,246 615 — — — — — — 22,901 37,246 615 Chemicals
& Plastics 148,252 177,602 835 — — — — — — 148,252 177,602 835
Coal & Coke 75,935 224,278 339 117,678 359,791 327 9,972 22,403
445 203,585 606,472 336 Food & Kindred Products 33,424 59,307
564 — — — — — — 33,424 59,307 564 Intermodal 980 9,838 100 69,433
58,848 1,180 253,854 890,844 285 324,267 959,530 338 Lumber &
Forest Products 87,200 140,856 619 — — — — — — 87,200 140,856 619
Metallic Ores 13,391 17,925 747 37,415 29,458 1,270 — — — 50,806
47,383 1,072 Metals 103,863 136,888 759 — — — — — — 103,863 136,888
759 Minerals & Stone 130,511 214,469 609 6,878 51,872 133
68,760 174,943 393 206,149 441,284 467 Petroleum Products 68,388
98,414 695 687 277 2,480 — — — 69,075 98,691 700 Pulp & Paper
107,453 161,872 664 — — — — — — 107,453 161,872 664 Waste 25,063
52,081 481 — — — — — — 25,063 52,081 481 Other 19,710 62,935 313 —
— — — — — 19,710 62,935 313 Totals $ 961,356 1,603,182 $ 600 $
254,653 552,155 $ 461 $ 337,866 1,092,549 $ 309 $ 1,553,875
3,247,886 $ 478 * Australian Operations is 51.1%
owned by G&W as of December 1, 2016. ** 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) 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 percentages and per share
amounts).
Reconciliations of Non-GAAP Financial
Measures
Adjusted Operating Income
Three Months Ended December 31, 2018
NorthAmericanOperations
AustralianOperations
U.K./EuropeanOperations
TotalOperations
Operating revenues $ 338.0 $ 71.1 $ 166.5 $ 575.6 Operating
expenses 250.8 53.4 165.7 469.9
Operating income(a) $ 87.2 $ 17.7 $ 0.8 $
105.7 Operating ratio(b) 74.2 % 75.1 % 99.5 % 81.6 %
Operating expenses $ 250.8 $ 53.4 $ 165.7 $ 469.9 Restructuring and
related costs — — (2.1 ) (2.2 ) Canadian railroad lease return
costs (2.1 ) — — (2.1 ) Adjusted operating expenses $
248.7 $ 53.4 $ 163.7 $ 465.7 Adjusted
operating income $ 89.3 $ 17.7 $ 2.8 $ 109.9
Adjusted operating ratio 73.6 % 75.1 % 98.3 % 80.9 %
Three Months Ended December 31, 2017
NorthAmericanOperations
AustralianOperations
U.K./EuropeanOperations
TotalOperations
Operating revenues $ 320.2 $ 75.5 $ 175.8 $ 571.6 Operating
expenses 245.5 58.0 161.6 465.1 Operating income(a) $ 74.7 $ 17.6 $
14.2 $ 106.5 Operating ratio(b) 76.7% 76.7% 91.9% 81.4%
Operating expenses $ 245.5 $ 58.0 $ 161.6 $ 465.1 Australia
impairment and related costs — (4.9) — (4.9) Restructuring costs
(0.1) — (1.3) (1.4) Corporate development and related costs (0.9) —
(0.3) (1.1) Buyout of Freightliner deferred consideration
agreements — — 8.9 8.9 U.K. coal restructuring and related charges
— — 1.1 1.1 Adjusted operating expenses $ 244.6 $ 53.0 $ 170.0 $
467.6 Adjusted operating income $ 75.6 $ 22.5 $ 5.9 $ 104.0
Adjusted operating ratio 76.4% 70.2% 96.7% 81.8%
Twelve Months Ended December 31, 2018
NorthAmericanOperations
AustralianOperations
U.K./EuropeanOperations
TotalOperations
Operating revenues $ 1,358.9 $ 301.7 $ 688.0 $ 2,348.6 Operating
expenses 1,015.8 221.4 687.9 1,925.0 Operating income(a) $ 343.1 $
80.3 $ 0.1 $ 423.5 Operating ratio(b) 74.8% 73.4% 100.0% 82.0%
Operating expenses $ 1,015.8 $ 221.4 $ 687.9 $ 1,925.0
Restructuring and related costs (0.1) — (15.0) (15.1) Canadian
railroad lease return costs (2.1) — — (2.1) Corporate development
and related costs (0.7) (0.1) (0.1) (0.8) Credit facility
refinancing-related costs (0.4) — — (0.4) Gain on settlement — 7.3
— 7.3 Adjusted operating expenses $ 1,012.5 $ 228.6 $ 672.7 $
1,913.9 Adjusted operating income $ 346.3 $ 73.1 $ 15.3 $ 434.7
Adjusted operating ratio 74.5% 75.8% 97.8% 81.5%
Twelve Months Ended December 31, 2017
NorthAmericanOperations
AustralianOperations
U.K./EuropeanOperations
TotalOperations
Operating revenues $ 1,274.3 $ 307.5 $ 626.2 $ 2,208.0 Operating
expenses 970.0 230.3 615.8 1,816.1
Operating income(a) $ 304.3 $ 77.3 $ 10.5 $
392.0 Operating ratio(b) 76.1 % 74.9 % 98.3 % 82.2 %
Operating expenses $ 970.0 $ 230.3 $ 615.8 $ 1,816.1 Corporate
development and related costs (8.2 ) 0.3 (4.0 ) (11.9 )
Restructuring costs (0.5 ) (0.3 ) (9.4 ) (10.2 ) Australia
impairment and related costs — (4.9 ) — (4.9 ) Buyout of
Freightliner deferred consideration agreements — — 8.9 8.9 U.K.
coal restructuring and related charges — — 1.1
1.1 Adjusted operating expenses $ 961.3 $ 225.3
$ 612.4 $ 1,799.0 Adjusted operating income $
312.9 $ 82.2 $ 13.8 $ 409.0
Adjusted operating ratio
75.4 % 73.3 % 97.8 % 81.5 % (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 Earnings Per Common
Share
Three
Months Ended December 31, 2018
Income BeforeIncome
Taxes
Benefit from/(Provision
for)Income Taxes
Net IncomeAttributableto
G&W
Diluted EPS As reported $ 80.3 $ (23.0 ) $ 55.6 $ 0.94
Adjusted for: Restructuring and related costs 2.2 (0.4 ) 1.7 0.03
Canadian railroad lease return costs 2.1 (0.6 ) 1.5 0.02 Gain on
sale of investment (1.4 ) 0.4 (1.0 ) (0.02 ) Prior period tax
adjustments — 1.4 1.4 0.02 As adjusted
$ 83.2 $ (22.2 ) $ 59.1 $ 1.00
Three Months
Ended December 31, 2017
Income BeforeIncome
Taxes
Benefit from/(Provision
for)Income Taxes
Net IncomeAttributableto
G&W
Diluted EPS As reported $ 84.7 $ 343.3 $ 426.6 $ 6.81
Adjusted for: Australia impairment and related costs 4.9 (1.5 ) 1.8
0.03 Restructuring costs 1.4 (0.2 ) 1.2 0.02 Corporate development
and related costs 1.1 (0.4 ) 0.7 0.01 Buyout of Freightliner
deferred consideration agreements (8.9 ) — (8.9 ) (0.14 ) U.K. coal
restructuring and related charges (1.1 ) 0.2 (0.9 ) (0.01 ) Impact
of U.S. Tax Cuts and Jobs Act (TCJA) — (371.9 ) (371.9 )
(5.94 ) As adjusted $ 82.2 $ (30.5 ) $ 48.6 $ 0.77
Twelve Months Ended December 31, 2018
Income BeforeIncome
Taxes
Benefit from/(Provision
for)Income Taxes
Net IncomeAttributableto
G&W
Diluted EPS As reported $ 318.9 $ (64.5 ) $ 244.4 $ 4.03
Adjusted for: Restructuring and related costs 15.1 (2.9 ) 12.2 0.20
Credit facility refinancing-related costs 2.7 (0.7 ) 2.0 0.03
Corporate development and related costs 0.8 (0.2 ) 0.6 0.01
Canadian railroad lease return costs 2.1 (0.6 ) 1.5 0.02 Loss on
sale of business 1.4 — 1.4 0.02 Gain on settlement (7.3 ) 2.2 (2.6
) (0.04 ) Gain on sale of investment (1.4 ) 0.4 (1.0 ) (0.02 ) 2017
Short Line Tax Credit — (31.6 ) (31.6 ) (0.52 ) Prior period tax
adjustment — 5.1 5.1 0.08 TCJA measurement period adjustment —
1.6 1.6 0.03 As adjusted $ 332.3
$ (91.2 ) $ 233.6 $ 3.85
Twelve Months Ended December
31, 2017
Income BeforeIncome
Taxes
Benefit from/(Provision
for)Income Taxes
Net IncomeAttributableto
G&W
Diluted EPS As reported $ 295.5 $ 261.3 $ 549.1 $ 8.79
Adjusted for: Corporate development and related costs 11.9 (4.3 )
8.1 0.13 Restructuring costs 10.2 (1.0 ) 9.0 0.14 Australia
impairment and related costs 4.9 (1.5 ) 1.8 0.03 Buyout of
Freightliner deferred consideration agreements (8.9 ) — (8.9 )
(0.14 ) Gain on sale of investment (1.6 ) 0.7 (1.0 ) (0.02 ) U.K.
coal restructuring and related charges (1.1 ) 0.2 (0.9 ) (0.01 )
Impact of TCJA — (371.9 ) (371.9 ) (5.96 ) Recognition of
unrecognized tax benefits — (3.3 ) (3.3 ) (0.05 ) As
adjusted $ 310.9 $ (119.8 ) $ 182.0 $ 2.91
Adjusted Free Cash Flow Measures
Twelve Months Ended December 31,
2018 2017 Net cash provided by
operating activities $ 553.1 $ 479.2 Allocation of adjusted cash
flow to noncontrolling interest(a) (21.4 ) (27.6 ) Adjusted net
cash provided by operating activities attributable to G&W 531.7
451.6 Purchase of property and equipment, net(b) (251.1 ) (201.4 )
Adjusted free cash flow attributable to G&W $ 280.6 $ 250.2 Net
cash paid for new business investments(b) 44.0 8.6 Net cash paid
for grant funded projects(b) 1.4 11.0 Adjusted free
cash flow attributable to G&W before new business investments
and grant funded projects $ 326.0 $ 269.8
(a)
Allocation of adjusted cash flow to
noncontrolling interest (MIRA's 48.9% equity ownership of 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. During the twelve months ended December 31, 2018, GWA
made A$65.0 million of such distributions of which A$33.2 million
(or $24.6 million at the applicable exchange rates at the time the
payments were made) and A$31.8 million (or $23.6 million at the
applicable exchange rates at the time the payments were made) was
distributed to G&W and MIRA, respectively, and no such
distributions were made for the twelve months ended December 31,
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.
Twelve Months Ended
December 31, 2018
CoreCapital(1)
New BusinessInvestments
GrantFundedProjects(2)
Total Purchase of property and equipment $
(218.2 ) $ (44.0 ) $ (21.9 ) $ (284.1 ) Grant proceeds from outside
parties — — 20.5 20.5 Insurance proceeds for the replacement of
assets 3.0 — — 3.0 Proceeds from disposition of property and
equipment 9.5 — — 9.5 Purchase of
property and equipment, net $ (205.7 ) $ (44.0 ) $ (1.4 ) $ (251.1
)
Twelve Months Ended December 31, 2017
CoreCapital(1)
New BusinessInvestments
GrantFundedProjects(2)
Total Purchase of property and equipment $ (188.6 ) $ (8.7 )
$ (31.2 ) $ (228.5 ) Grant proceeds from outside parties — 0.1 20.2
20.2 Insurance proceeds for the replacement of assets 1.6 — — 1.6
Proceeds from disposition of property and equipment 5.2 —
— 5.2 Purchase of property and equipment, net
$ (181.8 ) $ (8.6 ) $ (11.0 ) $ (201.4 ) (1)
Core capital expenditures represent
purchases of property and equipment, as presented on the
Consolidated 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 Consolidated Statement of Cash Flows,
less new business investments and grant funded projects.
(2) Grant funded projects represents 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 Consolidated Statement of Cash Flows.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190206005166/en/
Michael Williams of G&W Corporate
Communications1-203-202-8900mwilliams@gwrr.com
Genesee and Wyoming (NYSE:GWR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Genesee and Wyoming (NYSE:GWR)
Historical Stock Chart
From Jul 2023 to Jul 2024