-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vgs69uk6dMmbkCc8h2dhw9iGUZvWNH3TF0d9jxkygxzbyYyQhX1pmiewRlfzzhcE sjLL2ihsOfRIbF5JZgV4Rg== 0000891092-04-005281.txt : 20041102 0000891092-04-005281.hdr.sgml : 20041102 20041102063215 ACCESSION NUMBER: 0000891092-04-005281 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041102 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20041102 DATE AS OF CHANGE: 20041102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESEE & WYOMING INC CENTRAL INDEX KEY: 0001012620 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 060984624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31456 FILM NUMBER: 041111568 BUSINESS ADDRESS: STREET 1: 66 FIELD POINT ROAD CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036293722 MAIL ADDRESS: STREET 1: 66 FIELD POINT ROAD CITY: GREENWICH STATE: CT ZIP: 06830 8-K 1 e19560_8k.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 2, 2004 GENESEE & WYOMING INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 001-31456 06-0984624 (Commission File Number) (I.R.S. Employer Identification No.) 66 FIELD POINT ROAD, GREENWICH, CONNECTICUT 06830 (Address of principal executive offices) (Zip Code) (203) 629-3722 (Registrant's telephone number, including area code) (NOT APPLICABLE) (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. Results of Operations and Financial Condition The following Press Release, filed as Exhibit 99, and the information set forth therein is furnished under Section 2- Financial Information, Item 2.02, Disclosure of Results of Operations and Financial Condition. The Press Release was issued by Genesee & Wyoming Inc. on November 2, 2004, announcing Genesee & Wyoming Inc.'s financial results for the third quarter of 2004, which is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. GENESEE & WYOMING INC. November 2, 2004 By: /s/ John C. Hellmann --------------------------------------- John C. Hellmann Chief Financial Officer EX-99 2 e19560ex99.txt PRESS RELEASE Exhibit 99 Genesee & Wyoming Reports 33.2% Increase in Earnings for the Third Quarter of 2004; Year-to-Date Earnings Increase 46.1% Company Announces Share Buyback Plan GREENWICH, Conn., Nov. 2 /PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported today that net income in the third quarter of 2004 increased 33.2% to $10.1 million, compared to net income of $7.6 million in the third quarter of 2003. GWI's diluted earnings per share in the third quarter of 2004 increased 37.0% to $0.37 with 27.5 million shares outstanding, compared to diluted earnings per share of $0.27 with 26.8 million shares outstanding in the third quarter of 2003. (Note that prior to GWI's adoption of Emerging Issues Task Force Bulletin Issue No. 03-06 under FASB Statement No. 128 which became effective June 30, 2004, GWI's diluted EPS for the third quarter of 2003 were $0.29.) In the third quarter of 2004, GWI's North American revenue increased 25.6% to $77.2 million, compared to $61.5 million in the third quarter of 2003. Of this $15.7 million increase in revenue, $9.4 million was same-railroad growth and $6.3 million was from the acquisition of rail lines from Georgia-Pacific Corp. The 15.4% growth in same-railroad revenue was balanced across multiple commodity groups, with particular strength in coal shipments which increased by $2.2 million, or 24.1%. GWI's North American operating income in the third quarter of 2004 increased 43.4% to $13.2 million, compared with $9.2 million in the third quarter of 2003. The North American operating ratio improved by 2.1% to 82.9% in the third quarter of 2004, compared with an operating ratio of 85.0% in the third quarter of 2003. Operating costs in the third quarter of 2004 were adversely affected by track washouts and flood damage in GWI's New York- Pennsylvania Region caused by the remnants of Hurricane Ivan as well as a 37.0% increase in the average price per gallon of diesel fuel compared to the same period last year. In Australia, revenue at GWI's 50%-owned subsidiary, Australian Railroad Group (ARG), increased 35.6% to US$83.7 million in the third quarter of 2004, compared with US$61.7 million in the third quarter of 2003. This US$22.0 million increase in revenue was composed of US$13.1 million in grain, US$2.1 million in other ores and minerals and US$6.8 million in all other revenues. In Australian dollars, ARG's revenue increased 27.7% in the third quarter of 2004 compared with the third quarter of 2003. ARG's operating income in the third quarter of 2004 increased 49.8% to US$16.7 million, compared with operating income of US$11.2 million in the third quarter of 2003. ARG's operating ratio was 80.0% in the third quarter of 2004, compared with 81.9% in the third quarter of 2003. The improvement in operating ratio was largely the result of shipping a larger grain harvest in the third quarter of 2004, partially offset by higher contract driver costs due to a locomotive engineer shortage in Australia, and a 35.1% increase in the price of diesel fuel. Equity income from ARG in the third quarter of 2004 was US$3.5 million, a 30.0% increase over equity income of US$2.7 in the third quarter of 2003. In comparing the third quarter of 2004 with the third quarter of 2003, the Australian dollar strengthened 7.1%. For the nine months ended September 30, 2004, GWI reported net income of $30.4 million, of which $19.2 million (63.1%) was from North America, $10.7 million (35.3%) was from Australia and $0.5 million (1.6%) was from South America. This represents a 46.1% increase over $20.8 million of net income reported in the nine months ended September 30, 2003. GWI's diluted earnings per share increased 47.3% to $1.09 in the first nine months of 2004 (with 27.4 million shares outstanding), compared with $0.74 in the first nine months of 2003 (with 26.7 million shares outstanding). For the nine months ended September 30, 2004, GWI's North American operations generated Free Cash Flow of $27.8 million (defined as Cash from Operations of $41.5 million less Cash used in Investing of $15.8 million less Cash used for Acquisitions of $2.1 million) compared with $24.7 million of Free Cash Flow (defined as Cash from Operations of $38.2 million less Cash used in Investing of $13.5 million less Cash used for Acquisitions of $0) in the same period of 2003. Free Cash Flow in the third quarter of 2004 included the repayment of subordinated notes of US$5.4 million from ARG and US$0.4 million from GWI's equity investment in Bolivia. See the attached schedule for a description and discussion of Free Cash Flow. Mortimer B. Fuller III, Chairman and Chief Executive Officer of GWI, commented, "Our U.S. and Canadian regions continue to grow extremely well, as illustrated by the 15.4% same railroad growth in the third quarter. Traffic in all of our coal-shipping regions -- Illinois, Utah and New York- Pennsylvania -- remained strong. The excellent business conditions not only offset significant increases in the price of diesel fuel but also enabled us to absorb the damage to our infrastructure in Pennsylvania from heavy rains. I commend the hard work and dedication of our New York-Pennsylvania employees who worked around the clock to ensure that flood damage to the railroad was minimized." Mr. Fuller continued, "In Australia, ARG's third quarter earnings increased 30.0% due primarily to strong grain shipments. However, ARG's operating margins suffered from the impact of driver shortages and the continuing rise in the cost of diesel fuel. ARG is diligently executing a plan to hire and train new locomotive drivers to mitigate these costs and is also expecting to recapture a significant portion of the fuel costs under the provisions of many of customer contracts later this year and into 2005." GWI also announced today that its Board has authorized the repurchase of up to 1,000,000 shares of its common stock. GWI intends to use the repurchased stock to offset dilution caused by the issuance of shares in connection with GWI's employee and director stock plans that may occur over time. Purchases may be made in the open market or in privately negotiated transactions from time to time at management's discretion. As previously announced, GWI's conference call to discuss financial results for the third quarter will be held today at 11:00AM (Eastern Time). The dial-in number for the teleconference is (888) 428-4480 or the call may be accessed live over the Internet (listen only) directly at http://phx.corporate-ir.net/phoenix.zhtml?c=64426&p=irol-irhome or via the Investors tab of Genesee & Wyoming's website (http://www.gwrr.com). An audio replay of the conference call will be accessible via the Investors tab of Genesee & Wyoming's website starting this afternoon. GWI is a leading operator of short line and regional freight railroads in the United States, Canada, Mexico, Australia and Bolivia. The Company operates over 8,100 miles of owned and leased track and more than 3,000 additional miles under track access arrangements. This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic conditions, customer demand, increased competition in relevant markets, and others. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 REVENUES $77,243 $61,499 $223,707 $183,298 EQUITY ISSUANCE EXPENSE -- -- 542 -- OPERATING EXPENSES 64,043 52,294 184,825 155,244 TOTAL OPERATING EXPENSES 64,043 52,294 185,367 155,244 INCOME FROM OPERATIONS 13,200 9,205 38,340 28,054 INTEREST EXPENSE (2,352) (2,175) (7,070) (6,685) OTHER (EXPENSE) INCOME, NET (221) 54 203 767 INCOME BEFORE INCOME TAXES AND EQUITY EARNINGS 10,627 7,084 31,473 22,136 PROVISION FOR INCOME TAXES 4,284 2,384 12,267 8,260 INCOME BEFORE EQUITY EARNINGS 6,343 4,700 19,206 13,876 EQUITY IN NET INCOME OF INTERNATIONAL AFFILIATES: AUSTRALIAN RAILROAD GROUP 3,529 2,715 10,746 6,859 SOUTH AMERICA 273 203 496 112 NET INCOME 10,145 7,618 30,448 20,847 IMPACT OF PREFERRED STOCK OUTSTANDING -- 384 479 969 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $10,145 $7,234 $29,969 $19,878 BASIC EARNINGS PER SHARE: NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $0.42 $0.31 $1.24 $0.84 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 24,213 23,705 24,086 23,600 DILUTED EARNINGS PER SHARE: NET INCOME $0.37 $0.27 $1.09 $0.74 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 27,497 26,835 27,412 26,712 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) September 30, December 31, ASSETS 2004 2003 CURRENT ASSETS: Cash and cash equivalents $9,403 $11,118 Accounts receivable, net 62,460 54,656 Materials and supplies 5,381 5,204 Prepaid expenses and other 6,700 6,204 Deferred income tax assets, net 3,453 3,010 Total current assets 87,397 80,192 PROPERTY AND EQUIPMENT, net 327,940 315,345 INVESTMENT IN UNCONSOLIDATED AFFILIATES 120,975 117,664 GOODWILL 24,577 24,522 INTANGIBLE ASSETS, net 78,062 79,357 OTHER ASSETS, net 10,432 10,093 Total assets $649,383 $627,173 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $6,428 $6,589 Accounts payable 64,440 57,472 Accrued expenses 17,916 13,902 Total current liabilities 88,784 77,963 LONG-TERM DEBT, less current portion 122,614 151,433 DEFERRED INCOME TAX LIABILITIES, net 47,360 41,840 DEFERRED ITEMS - grants from governmental agencies 45,487 42,667 DEFERRED GAIN - sale/leaseback 3,570 3,982 OTHER LONG-TERM LIABILITIES 14,796 14,843 MINORITY INTEREST 3,507 3,365 REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 23,994 TOTAL STOCKHOLDERS' EQUITY 323,265 267,086 Total liabilities and stockholders' equity $649,383 $627,173 GENESEE & WYOMING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended September 30, September 30, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $30,448 $20,847 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 14,295 11,437 Deferred income taxes 4,737 4,750 Net (gain) loss on sale and impairment of assets (12) 141 Equity earnings of unconsolidated international affiliates (11,242) (6,971) Minority interest expense 142 209 Tax benefit realized upon exercise of stock options 1,090 846 Changes in assets and liabilities, net of effect of acquisitions - Accounts receivable (7,774) 1,457 Materials and supplies (184) 77 Prepaid expenses and other (541) (343) Accounts payable and accrued expenses 10,727 4,437 Other assets and liabilities, net (217) 1,271 Net cash provided by operating activities 41,469 38,158 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment, net of proceeds from government grants (19,751) (12,846) Locomotive upgrade project -- (1,425) Purchase of Homer City and Savannah Wharf rail properties (2,124) -- Cash received from unconsolidated international affiliates 5,757 132 Proceeds from disposition of property and equipment, including sale/leasebacks 315 644 Net cash used in investing activities (15,803) (13,495) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term borrowings, including capital leases (151,134) (121,932) Proceeds from issuance of long-term debt 121,300 92,000 Proceeds from employee stock purchases 2,795 1,680 Dividend paid on Redeemable Convertible Preferred Stock (411) (750) Net cash used in financing activities (27,450) (29,002) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 69 253 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,715) (4,086) CASH AND CASH EQUIVALENTS, beginning of period 11,118 11,028 CASH AND CASH EQUIVALENTS, end of period $9,403 $6,942 GENESEE & WYOMING INC. AND SUBSIDIARIES Selected Consolidated Financial Information (dollars in thousands) (Unaudited) Three Months Ended September 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $57,109 73.9% $45,039 73.2% Non-freight 20,134 26.1% 16,460 26.8% Total revenues $77,243 100.0% $61,499 100.0% Operating Expense Comparison: Natural Classification Labor and benefits $26,551 34.4% $21,068 34.3% Equipment rents 7,100 9.2% 4,362 7.1% Purchased services 4,493 5.8% 4,779 7.8% Depreciation and amortization 4,812 6.2% 3,869 6.3% Diesel fuel 6,222 8.1% 4,105 6.7% Casualties and insurance 4,598 6.0% 3,377 5.5% Materials 3,826 5.0% 4,157 6.8% Net loss (gain) on sale and impairment of assets 81 0.1% (35) -0.1% Other expenses 6,360 8.1% 6,612 10.6% Total operating expenses $64,043 82.9% $52,294 85.0% Functional Classification Transportation $25,950 33.6% $20,252 32.9% Maintenance of ways and structures 7,516 9.7% 6,449 10.5% Maintenance of equipment 12,060 15.6% 9,028 14.7% General and administrative 13,624 17.7% 12,731 20.7% Net loss (gain) on sale and impairment of assets 81 0.1% (35) -0.1% Depreciation and amortization 4,812 6.2% 3,869 6.3% Total operating expenses $64,043 82.9% $52,294 85.0% GENESEE & WYOMING INC. AND SUBSIDIARIES Selected Consolidated Financial Information (dollars in thousands) (Unaudited) Nine Months Ended September 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $167,826 75.0% $136,718 74.6% Non-freight 55,881 25.0% 46,580 25.4% Total revenues $223,707 100.0% $183,298 100.0% Operating Expense Comparison: Natural Classification Labor and benefits $77,897 34.8% $64,868 35.4% Equipment rents 20,316 9.1% 13,162 7.2% Purchased services 13,272 5.9% 13,735 7.5% Depreciation and amortization 14,295 6.4% 11,437 6.2% Diesel fuel 17,514 7.8% 13,726 7.5% Casualties and insurance 11,958 5.3% 9,675 5.3% Materials 11,144 5.0% 11,822 6.4% Net (gain) loss on sale and impairment of assets (12) 0.0% 141 0.1% Other expenses 18,983 8.6% 16,678 9.1% Total operating expenses $185,367 82.9% $155,244 84.7% Functional Classification Transportation $73,976 33.1% $62,005 33.8% Maintenance of ways and structures 22,002 9.8% 19,550 10.7% Maintenance of equipment 34,789 15.6% 27,181 14.8% General and administrative 40,317 18.0% 34,930 19.1% Net (gain) loss on sale and impairment of assets (12) 0.0% 141 0.1% Depreciation and amortization 14,295 6.4% 11,437 6.2% Total operating expenses $185,367 82.9% $155,244 84.7% GENESEE & WYOMING INC. AND SUBSIDIARIES North American Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (dollars in thousands, except average revenue per carload) Three Months Ended Three Months Ended September 30, 2004 September 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Coal, Coke & Ores $11,641 50,750 $229 $9,271 43,307 $214 Paper 10,420 23,981 435 8,019 19,361 414 Lumber & Forest Products 6,628 19,861 334 4,333 13,652 317 Metals 5,973 18,572 322 3,999 13,241 302 Minerals & Stone 5,866 16,457 356 5,791 15,296 379 Petroleum Products 5,803 7,806 743 6,079 7,636 796 Chemicals-Plastics 4,021 7,499 536 2,775 5,998 463 Farm & Food Products 3,648 8,692 420 2,708 6,826 397 Autos & Auto Parts 1,350 3,048 443 1,116 2,773 402 Intermodal 587 1,724 340 411 1,347 305 Other 1,172 3,402 345 537 2,397 224 Totals $57,109 161,792 353 $45,039 131,834 342 GENESEE & WYOMING INC. AND SUBSIDIARIES North American Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (dollars in thousands, except average revenue per carload) Nine Months Ended Nine Months Ended September 30, 2004 September 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Coal, Coke & Ores $34,440 144,051 $239 $28,919 125,418 $231 Paper 29,710 70,171 423 23,288 56,340 413 Lumber & Forest Products 18,793 57,323 328 12,776 40,508 315 Petroleum Products 18,251 24,301 751 18,750 24,033 780 Metals 17,078 53,940 317 12,951 44,986 288 Minerals & Stone 16,695 44,850 372 16,521 42,604 388 Chemicals-Plastics 11,996 22,775 527 8,209 17,631 466 Farm & Food Products 11,387 27,058 421 8,199 21,688 378 Autos & Auto Parts 4,946 11,458 432 4,351 10,764 404 Intermodal 1,769 4,824 367 1,199 4,335 277 Other 2,761 9,711 284 1,555 7,465 208 Totals $167,826 470,462 357 $136,718 395,772 345 AUSTRALIAN RAILROAD GROUP PTY. LTD. CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 REVENUES $83,695 $61,716 $247,765 $174,988 OPERATING EXPENSES 66,959 50,546 196,929 138,153 RESTRUCTURING COSTS -- -- -- 267 TOTAL OPERATING EXPENSES 66,959 50,546 196,929 138,420 INCOME FROM OPERATIONS 16,736 11,170 50,836 36,568 INTEREST EXPENSE (6,865) (8,060) (21,068) (22,757) OTHER INCOME, NET 221 876 962 2,414 INCOME BEFORE TAX 10,092 3,986 30,730 16,225 PROVISION (BENEFIT) FOR INCOME TAX 3,030 (1,446) 9,236 2,505 NET INCOME $7,062 $5,432 $21,494 $13,720 Australian Railroad Group Pty. Ltd. is 50%-owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) (Unaudited - U.S. GAAP) September 30, December 31, 2004 2003 ASSETS CURRENT ASSETS: Cash and cash equivalents $30,760 $26,618 Accounts receivable, net 41,607 47,764 Materials and supplies 10,512 10,033 Prepaid expenses and other 4,862 3,069 Total current assets 87,741 87,484 PROPERTY AND EQUIPMENT, net 481,610 478,808 DEFERRED INCOME TAX ASSETS, net 73,338 80,193 OTHER ASSETS, net 7,875 5,476 Total assets $650,564 $651,961 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ -- $ -- Accounts payable 5,498 7,199 Accrued expenses 39,024 35,111 Current income tax liabilities 212 -- Total current liabilities 44,734 42,310 LONG-TERM DEBT 356,671 367,892 DEFERRED INCOME TAX LIABILITIES, net 18,278 14,271 OTHER LONG-TERM LIABILITIES 1,989 2,031 FAIR VALUE OF INTEREST RATE SWAPS 9,291 9,133 SUBORDINATED NOTES TO STOCKHOLDERS -- 11,562 Total non-current liabilities 386,229 404,889 REDEEMABLE PREFERRED STOCK OF STOCKHOLDERS 15,718 16,212 TOTAL STOCKHOLDERS' EQUITY 203,883 188,550 Total liabilities and stockholders' equity $650,564 $651,961 Australian Railroad Group Pty. Ltd. is 50%-owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Nine Months Ended September 30, September 30, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $21,494 $13,720 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 19,845 16,940 Deferred income taxes 8,894 8,362 Net loss (gain) on sale and impairment of assets 376 (816) Changes in assets and liabilities 3,344 (3,926) Net cash provided by operating activities 53,953 34,280 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (39,057) (21,014) Proceeds from disposition of property and equipment 1,296 4,027 Transfer to restricted funds on deposit -- (4,523) Net cash used in investing activities (37,761) (21,510) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on subordinated notes (10,710) -- Payments on borrowings -- -- Proceeds from borrowings -- -- Net cash provided by financing activities (10,710) -- EFFECT OF EXCHANGE RATE DIFFERENCES ON CASH AND CASH EQUIVALENTS (1,340) 3,488 INCREASE IN CASH AND CASH EQUIVALENTS 4,142 16,258 CASH AND CASH EQUIVALENTS, beginning of period 26,618 5,882 CASH AND CASH EQUIVALENTS, end of period $30,760 $22,140 Australian Railroad Group Pty. Ltd. is 50%-owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Selected Consolidated Financial Information (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Three Months Ended September 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $69,653 83.2% $50,598 82.0% Non-freight 14,042 16.8% 11,118 18.0% Total railroad revenues $83,695 100.0% $61,716 100.0% Operating Expenses: Natural Classification Labor and benefits $14,530 17.4% $12,416 20.1% Equipment rents 667 0.8% 482 0.8% Purchased services 20,840 24.9% 16,433 26.6% Depreciation and amortization 6,748 8.1% 6,065 9.8% Diesel fuel used in operations 6,869 8.2% 3,747 6.1% Diesel fuel for sales to third parties 5,385 6.4% 1,644 2.7% Casualties and insurance 1,620 1.9% 1,563 2.5% Materials 3,759 4.5% 2,970 4.8% Net gain on sale and impairment of assets (95) -0.1% (183) -0.3% Other expenses 6,636 7.9% 5,409 8.8% Total operating expenses $66,959 80.0% $50,546 81.9% Functional Classification Transportation $32,542 38.9% $18,673 30.3% Maintenance of ways and structures 10,199 12.2% 10,511 17.0% Maintenance of equipment 8,389 10.0% 6,769 11.0% General and administrative 9,176 10.9% 8,711 14.1% Net gain on sale and impairment of assets (95) -0.1% (183) -0.3% Depreciation and amortization 6,748 8.1% 6,065 9.8% Total operating expenses $66,959 80.0% $50,546 81.9% Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Selected Consolidated Financial Information (U.S. dollars in thousands) (Unaudited - U.S. GAAP) Nine Months Ended September 30, 2004 2003 % of % of Amount Revenue Amount Revenue Revenues: Freight $208,366 84.1% $143,175 81.8% Non-freight 39,399 15.9% 31,813 18.2% Total railroad revenues $247,765 100.0% $174,988 100.0% Operating Expenses: Natural Classification Labor and benefits $43,731 17.7% $33,033 18.9% Equipment rents 2,198 0.9% 1,204 0.7% Purchased services 60,165 24.3% 43,283 24.7% Depreciation and amortization 19,845 8.0% 16,940 9.7% Diesel fuel used in operations 18,895 7.6% 10,758 6.2% Diesel fuel for sales to third parties 13,549 5.5% 4,607 2.6% Casualties and insurance 6,418 2.6% 6,444 3.7% Materials 10,611 4.3% 8,404 4.8% Net loss (gain) on sale and impairment of assets 376 0.1% (816) -0.5% Other expenses 21,141 8.5% 14,563 8.3% Total operating expenses $196,929 79.5% $138,420 79.1% Functional Classification Transportation $91,869 37.1% $52,796 30.2% Maintenance of ways and structures 32,027 12.9% 25,885 14.8% Maintenance of equipment 24,974 10.1% 19,130 10.9% General and administrative 27,838 11.2% 24,485 14.0% Net loss (gain) on sale and impairment of assets 376 0.2% (816) -0.5% Depreciation and amortization 19,845 8.0% 16,940 9.7% Total operating expenses $196,929 79.5% $138,420 79.1% Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Australian Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (U.S. dollars in thousands) (Unaudited) Three Months Ended Three Months Ended September 30, 2004 September 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Grain $26,392 69,185 $381 $13,298 35,552 $374 Other Ores and Minerals 14,665 28,218 520 12,571 28,282 444 Iron Ore 10,588 47,886 221 9,960 47,646 209 Alumina 4,837 38,785 125 3,736 38,577 97 Bauxite 3,113 32,101 97 2,398 32,426 74 Hook and Pull (Haulage) 364 960 379 1,404 3,253 432 Gypsum 748 12,180 61 817 13,176 62 Other 8,946 16,927 529 6,414 15,694 409 Total $69,653 246,242 283 $50,598 214,606 236 Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. AUSTRALIAN RAILROAD GROUP PTY. LTD. Australian Railroad Freight Revenue, Carloads and Average Revenue Per Carload Comparison by Commodity Group (U.S. dollars in thousands) (Unaudited) Nine Months Ended Nine Months Ended September 30, 2004 September 30, 2003 Average Average Revenue Revenue Freight Per Freight Per Commodity Group Revenues Carloads Carload Revenues Carloads Carload Grain $78,323 205,409 $381 $40,709 104,369 $390 Other Ores and Minerals 43,798 82,033 534 33,969 78,577 432 Iron Ore 32,922 149,415 220 25,640 132,250 194 Alumina 14,589 117,921 124 11,680 114,659 102 Bauxite 9,245 92,352 100 8,068 96,430 84 Hook and Pull (Haulage) 1,279 6,257 204 3,086 6,146 502 Gypsum 2,659 37,587 71 2,127 34,482 62 Other 25,551 50,749 503 17,896 47,029 381 Total $208,366 741,723 281 $143,175 613,942 233 Australian Railroad Group Pty. Ltd. is 50% owned by Genesee & Wyoming Inc. Free Cash Flow Description and Discussion Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities less Net Cash Used in Investing Activities, excluding the Cost of Acquisitions. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as required dividend payments and principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with Generally Accepted Accounting Principles. The following table sets forth a reconciliation of GWI's Net Cash Provided by Operating Activities to GWI's Free Cash Flow: Nine Months Ended 2004 2003 Net cash provided by operating activities $41,469 $38,158 Net cash used in investing activities (15,803) (13,495) Cash used for acquisitions 2,124 ------- Free cash flow $27,790 $24,663 SOURCE Genesee & Wyoming Inc. -0- 11/02/2004 /CONTACT: John C. Hellmann, Chief Financial Officer, Genesee & Wyoming Inc., +1-203-629-3722 / /Web site: http://www.gwrr.com / (GWR) CO: Genesee & Wyoming Inc. ST: Connecticut IN: TRN SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----