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| Genesee & Wyoming Reports Results for the Third Quarter of 2007 |
GREENWICH, Conn., Nov. 1, 2007 /PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the third quarter of 2007 of $16.2 million, compared with a net loss of $12.1 million in the third quarter of 2006. GWI's diluted earnings per share (EPS) in the third quarter of 2007 were $0.42 with 38.5 million shares outstanding, compared with a diluted loss per share of $0.29 with 42.4 million shares outstanding in the third quarter of 2006. As previously reported, GWI initiated the liquidation of its hurricane-damaged operations in Mexico on June 25, 2007, and had no remaining employees in Mexico as of September 30, 2007. Results from GWI's Mexican operations for the three and nine months ended September 30, 2007 and 2006, are now included in results from discontinued operations. GWI's income from continuing operations in the third quarter of 2007 was $23.0 million, or $0.60 per diluted share, compared with income from continuing operations of $24.0 million, or $0.56 per diluted share in the third quarter of 2006. Results from continuing operations in the third quarter of 2007 included gains from the sale of assets of $5.5 million ($3.3 million after-tax, or $0.09 per diluted share) and a net tax benefit of $3.2 million ($0.08 per diluted share) associated with the sale of the Western Australia operations and certain other assets of the Australian Railroad Group (ARG) previously owned by GWI and its joint venture partner, Wesfarmers Limited (ARG Sale). Results from continuing operations in the third quarter of 2006 included a post closing adjustment from the ARG Sale of $10.4 million ($6.8 million after-tax, or $0.16 per diluted share). GWI reported a loss from its discontinued operations in Mexico of $6.9 million after-tax, or $0.18 per diluted share, in the third quarter of 2007, compared with a loss of $36.1 million, or $0.85 per diluted share in the third quarter of 2006. GWI also announced today that it repurchased 4.1 million shares in the third and fourth quarters of 2007 at an average price of $27.02 per share under previously authorized programs. In so doing, GWI has fully exhausted its existing authorizations to repurchase shares and currently has 36 million shares outstanding. Continuing Operations In the third quarter of 2007, GWI's revenues increased $10.2 million, or 8.4%, to $131.2 million, compared with $121.0 million in the third quarter of 2006. Freight revenues increased $2.5 million, or 3.1%, primarily due to an increase in average revenues per carload of 9.8%, partially offset by a 6.1% decrease in carloads. Average revenues per carload in the third quarter of 2007 benefited 2.0% from the appreciation of the Australian dollar and Canadian dollar relative to the U.S. dollar. Non-freight revenues increased $7.7 million, or 19.0%, in the third quarter of 2007, primarily due to higher revenues from iron ore services and crewing in South Australia. GWI's operating income in the third quarter of 2007 was $29.7 million, compared with $23.1 million in the third quarter of 2006. The operating ratio was 77.4% in the third quarter of 2007, compared with an operating ratio of 80.9% in the third quarter of 2006. Operating income for the third quarter of 2007 included a pre-tax gain of $5.5 million on the disposition of assets. Operating income for the third quarter of 2006 included $1.1 million of pre-tax expense associated with a legal settlement. Excluding these items, the operating ratio would have been 81.6% and 80.0%, for the three months ended September 30, 2007 and 2006, respectively (1). Free Cash Flow (2) On June 1, 2006, GWI completed the ARG Sale and the acquisition of certain South Australian operations of ARG (GWA Purchase). The net proceeds from these transactions totaled $285.6 million in the nine months ended September 30, 2006. Although the ARG Sale occurred in 2006, the taxes to the Australian government related to the transaction of $95.6 million were paid in June 2007.
($ in millions) Nine Months Ended
September 30,
2007 2006
Net cash provided by operating activities $ 5.6(a) $ 64.0
Net cash (used in) provided by investing
activities (31.6) 255.8(b)
Proceeds from divestitures/cash used for
acquisitions - (285.6)
Australian taxes on ARG Sale 95.6(c) -
Free cash flow $ 69.6 $ 34.2
(a) Includes Australian taxes on the ARG Sale totaling $95.6 million paid
in 2007, as calculated using the U.S. Dollar/Australian Dollar
exchange rate on the date of payment.
(b) Includes net proceeds of $285.6 million from the ARG Sale and GWA
Purchase in 2006.
(c) The difference between the $95.6 million tax payment on the ARG Sale
and the $92.7 million decrease in "Income taxes payable-Australia" in
our cash flow statement for the nine months ended September 30, 2007,
reflects primarily the effects of our ongoing operations in Australia.
GWI's continuing operations generated free cash flow of $69.6 million in the nine months ended September 30, 2007. For the nine months ended September 30, 2006, GWI's continuing operations generated $34.2 million in free cash flow. Including the Australian tax payment, for the nine months ended September 30, 2007, GWI generated net cash from operating activities of $5.6 million. For the nine months ended September 30, 2006, GWI generated net cash from operating activities of $64.0 million. Net cash used in investing activities in the first nine months of 2007 included $41.4 million in purchases of property and equipment, net of $15.6 million received in current year government grants and $4.3 million in cash received from government grants for capital projects completed in 2006, partially offset by $1.7 million in insurance proceeds for capital projects completed in 2006 and $8.1 million in cash from asset dispositions in 2007. Net cash provided by investing activities in the first nine months of 2006 included $30.3 million in purchases of property and equipment, net of $0.7 million received in government grants. Discontinued Operations in Mexico During the second quarter of 2007, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM) resigned its operating concession. FCCM ceased operations and initiated formal liquidation proceedings in the third quarter 2007. The Ministry of Communications and Transportation (SCT) in Mexico has contested the resignation of the concession and has commenced an official action to seize substantially all of FCCM's operating assets in response to the liquidation. As a result of these actions, GWI recorded a pre-tax loss in the third quarter of $18.5 million, including non-cash impairment and related effects of $14.4 million. This pre-tax loss was offset by a tax benefit of $11.6 million. GWI believes the SCT's actions were unlawful and is pursuing all legal remedies to recover its operating assets. As of September 30, 2007, there is a net liability of $3.5 million remaining on GWI's balance sheet associated with its Mexican operations. In the third quarter of 2006, GWI recorded a pre-tax loss from its discontinued operations in Mexico of $36.0 million ($36.1 million after-tax, or $0.85 per diluted share). This net loss included a pre-tax charge of approximately $33.1 million ($34.1 million after-tax, or $0.80 per share) reflecting a non-cash write-down of its Mexican non-current assets and related effects. Comments from the Chief Executive Officer "In light of the difficult freight environment, we are generally pleased with our third quarter financial results," said GWI Chief Executive Officer John C. Hellmann. "Shipments of lumber and paper products in North America and grain in Australia remain weak; however, the rest of our business is solid and we have been making necessary cost reductions. Meanwhile, the acquisition market remains active as illustrated by our recently announced agreement to acquire 87% of the Maryland Midland Railway. We continue to evaluate acquisition targets in both the United States and abroad." Conference Call and Webcast Details As previously announced, GWI's conference call to discuss financial results for the third quarter will be held Thursday, November 1, 2007 at 11:00 a.m. (Eastern Time). The dial-in number for the teleconference is (888) 428-4479; outside U.S., call (612) 332-0923, or the call may be accessed live over the Internet (listen only) under the "Investors" tab of GWI's website (http://www.gwrr.com), by selecting "Third Quarter Earnings Audio Webcast." An audio replay of the conference call will be accessible via the Investors tab of GWI's website starting at 2:30 p.m. Thursday, November 1, 2007. About Genesee & Wyoming Inc. GWI is a leading owner and operator of short line and regional freight railroads in the United States, Canada and Australia and owns a minority interest in a railroad in Bolivia. Operations currently include 47 railroads organized in nine regions, with more than 5,700 miles of owned and leased track and approximately 3,500 additional miles under track access arrangements. GWI provides rail service at 12 U.S. ports and also performs contract coal loading and railcar switching for industrial customers. Corporate headquarters is in Greenwich, Conn. Cautionary Statement Concerning Forward-Looking Statements This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments; increased competition in relevant markets; funding needs and financial sources; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others. Words such as "anticipates," "intends," "plans," "believes," "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GWI disclaims any intention to update the current expectations or forward-looking statements contained in this press release. (1) The operating ratios that exclude the items described above are non-GAAP financial measures and are not intended to replace the operating ratios calculated using total operating expenses and total revenues, calculated on a basis consistent with GAAP. The information required by Regulation G under the Securities Exchange Act of 1934, including reconciliation to the operating ratios calculated using amounts determined in accordance with GAAP, is included in the tables attached to this press release. (2) Free Cash Flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, its most directly comparable GAAP measure. The information required by Regulation G under the Securities Exchange Act of 1934, including reconciliation to net cash provided by operating activities is included in the tables attached to this press release.
Contact: Michael Williams
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
OPERATING REVENUES $131,224 $121,019 $381,625 $332,981
OPERATING EXPENSES 101,563 97,915 307,264 270,178
INCOME FROM OPERATIONS 29,661 23,104 74,361 62,803
GAIN ON SALE OF EQUITY INVESTMENT
IN ARG - 10,421 - 218,845
INVESTMENT LOSS - BOLIVIA - - - (5,878)
EQUITY LOSS OF UNCONSOLIDATED
INTERNATIONAL AFFILIATES - - - (10,752)
INTEREST INCOME 1,107 3,300 7,069 4,467
INTEREST EXPENSE (3,613) (3,532) (10,626) (12,507)
OTHER (EXPENSE) INCOME, NET (47) 28 846 111
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 27,108 33,321 71,650 257,089
PROVISION FOR INCOME TAXES 4,069 9,337 16,927 100,250
INCOME FROM CONTINUING OPERATIONS 23,038 23,984 54,723 156,839
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (6,873) (36,090) (13,494) (37,182)
NET INCOME (LOSS) $16,166 $(12,106) $41,229 $119,657
BASIC EARNINGS PER COMMON SHARE
FROM CONTINUING OPERATIONS $0.68 $0.64 $1.53 $4.17
BASIC LOSS PER COMMON SHARE FROM
DISCONTINUED OPERATIONS (0.20) (0.96) (0.38) (0.99)
BASIC EARNINGS (LOSS) PER COMMON
SHARE $0.48 $(0.32) $1.15 $3.18
WEIGHTED AVERAGE SHARES -
BASIC 34,026 37,739 35,702 37,600
DILUTED EARNINGS PER COMMON SHARE
FROM CONTINUING OPERATIONS $0.60 $0.56 $1.36 $3.69
DILUTED LOSS PER COMMON SHARE FROM
DISCONTINUED OPERATIONS (0.18) (0.85) (0.34) (0.87)
DILUTED EARNINGS (LOSS) PER COMMON
SHARE $0.42 $(0.29) $1.02 $2.82
WEIGHTED AVERAGE SHARES -
DILUTED 38,515 42,366 40,233 42,488
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2007 AND DECEMBER 31, 2006
(In thousands)
(unaudited)
September 30, December 31,
ASSETS 2007 2006
CURRENT ASSETS:
Cash and cash equivalents $52,662 $240,206
Accounts receivable, net 122,977 117,099
Materials and supplies 7,732 11,302
Prepaid expenses and other 11,973 14,695
Current assets of discontinued
operations 4,992 -
Deferred income tax assets, net 7,802 7,617
Total current assets 208,138 390,919
PROPERTY AND EQUIPMENT, net 622,493 573,292
INVESTMENT IN UNCONSOLIDATED
AFFILIATES 4,653 4,644
GOODWILL 39,272 37,788
INTANGIBLE ASSETS, net 117,996 120,669
OTHER ASSETS, net 9,446 11,055
DEFERRED INCOME TAX ASSETS, net 2,777 2,697
Total assets $1,004,775 $1,141,064
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $2,607 $4,372
Accounts payable 111,061 98,186
Accrued expenses 27,091 38,364
Income tax payable - Australia 4,233 91,925
Current liabilities of
discontinued operations 8,464 -
Deferred income tax liabilities,
net 516 291
Total current liabilities 153,972 233,138
LONG-TERM DEBT, less current portion 258,352 241,313
DEFERRED INCOME TAX LIABILITIES, net 72,960 72,876
DEFERRED ITEMS - grants from external
parties 82,647 56,588
OTHER LONG-TERM LIABILITIES 17,535 16,962
TOTAL STOCKHOLDERS' EQUITY 419,309 520,187
Total liabilities and
stockholders' equity $1,004,775 $1,141,064
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended
September 30,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $41,229 $119,657
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:
Loss from discontinued operations,
net of tax 13,494 37,182
Depreciation and amortization 23,515 20,405
Compensation cost related to
equity awards 4,068 6,172
Excess tax benefits from share-based
compensation (847) (4,368)
Deferred income taxes 9,271 15,337
Gain on insurance recovery - (1,937)
Gain on sale of equity investment in ARG - (218,845)
Net gain on sale of assets (5,914) (243)
Decrease/(increase) in cash surrender
value of split dollar life insurance 39 (337)
Investment loss - Bolivia - 5,878
Equity loss of unconsolidated international
affiliates, net of tax - 7,500
Changes in assets and liabilities which
provided (used) cash, net of effect of
acquisitions:
Accounts receivable, net (4,514) (12,538)
Materials and supplies 2,197 (2,255)
Prepaid expenses and other (144) (1,622)
Accounts payable and accrued expenses 15,844 9,103
Income tax payable - Australia (92,737) 86,216
Other assets and liabilities, net 118 (1,348)
Net cash provided by operating
activities from continuing operations 5,619 63,957
Net cash used in operating activities
from discontinued operations (10,677) (314)
Net cash (used in) provided by
operating activities (5,058) 63,643
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment,
net of grants from external parties (41,358) (30,306)
Proceeds from ARG Sale - 306,746
Cash paid for acquisitions, net - (21,189)
Insurance proceeds for the replacement
of assets 1,747 -
Premiums paid on split dollar life insurance (99) (130)
Cash received from cash surrender of split
dollar life insurance - 366
Proceeds from disposition of property and
equipment 8,106 278
Net cash (used in) provided by
investing activities from continuing
operations (31,604) 255,765
Net cash used in investing activities
from discontinued operations (517) (3,036)
Net cash (used in) provided by
investing activities (32,121) 252,729
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings,
including capital leases (1,451) (182,207)
Proceeds from issuance of long-term debt 25,000 92,500
Net proceeds from employee stock purchases 2,978 6,345
Treasury stock purchases (171,018) (11,188)
Excess tax benefits from share-based
compensation 847 4,368
Net cash used in financing activities
from continuing operations (143,644) (90,182)
Net cash used in financing activities
from discontinued operations (13,301) (1,239)
Net cash used in financing activities (156,945) (91,421)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 7,838 (1,254)
CHANGE IN CASH BALANCES INCLUDED IN CURRENT
ASSETS OF DISCONTINUED OPERATIONS (1,258) -
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (187,544) 223,697
CASH AND CASH EQUIVALENTS, beginning of period 240,206 18,669
CASH AND CASH EQUIVALENTS, end of period $52,662 $242,366
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended
September 30,
2007 2006
% of % of
Amount Revenue Amount Revenue
Revenues:
Freight $83,173 63.4% $80,643 66.6%
Non-freight 48,051 36.6% 40,376 33.4%
Total revenues $131,224 100.0% $121,019 100.0%
Operating Expense Comparison:
Natural Classification
Labor and benefits $41,318 31.5% $37,227 30.8%
Equipment rents 8,652 6.6% 9,029 7.5%
Purchased services 11,057 8.4% 10,076 8.3%
Depreciation and amortization 7,969 6.1% 7,307 6.0%
Diesel fuel used in operations 10,815 8.2% 10,239 8.5%
Diesel fuel sold to third parties 6,482 4.9% 5,458 4.5%
Casualties and insurance 4,589 3.5% 3,750 3.1%
Materials 6,445 4.9% 5,720 4.7%
Net gain on sale of assets (5,450) -4.1% (197) -0.2%
Other expenses 9,686 7.4% 9,306 7.7%
Total operating expenses $101,563 77.4% $97,915 80.9%
Functional Classification
Transportation $42,164 32.1% $38,916 32.2%
Maintenance of ways and structures 11,783 9.0% 10,930 9.1%
Maintenance of equipment 17,426 13.3% 16,357 13.5%
Diesel fuel sold to third parties 6,482 4.9% 5,458 4.5%
General and administrative 21,189 16.1% 19,144 15.8%
Net gain on sale of assets (5,450) -4.1% (197) -0.2%
Depreciation and amortization 7,969 6.1% 7,307 6.0%
Total operating expenses $101,563 77.4% $97,915 80.9%
GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Nine Months Ended
September 30,
2007 2006
% of % of
Amount Revenue Amount Revenue
Revenues:
Freight $247,047 64.7% $236,162 70.9%
Non-freight 134,578 35.3% 96,819 29.1%
Total revenues $381,625 100.0% $332,981 100.0%
Operating Expense Comparison:
Natural Classification
Labor and benefits $122,978 32.2% $112,682 33.8%
Equipment rents 27,122 7.1% 26,478 8.0%
Purchased services 31,702 8.3% 23,691 7.1%
Depreciation and amortization 23,515 6.2% 20,405 6.1%
Diesel fuel used in operations 31,917 8.4% 30,267 9.1%
Diesel fuel sold to third parties 16,680 4.4% 7,089 2.1%
Casualties and insurance 12,485 3.3% 9,406 2.8%
Materials 18,283 4.8% 15,775 4.7%
Net gain on sale of assets (5,914) -1.6% (243) -0.1%
Gain on insurance recovery - 0.0% (1,937) -0.6%
Other expenses 28,496 7.4% 26,565 8.0%
Total operating expenses $307,264 80.5% $270,178 81.0%
Functional Classification
Transportation $121,732 31.9% $108,336 32.5%
Maintenance of ways and structures 34,830 9.1% 30,088 9.0%
Maintenance of equipment 52,622 13.8% 45,724 13.7%
Diesel fuel sold to third parties 16,680 4.4% 7,089 2.1%
General and administrative 63,799 16.7% 60,716 18.3%
Net gain on sale of assets (5,914) -1.6% (243) -0.1%
Gain on insurance recovery - 0.0% (1,937) -0.6%
Depreciation and amortization 23,515 6.2% 20,405 6.1%
Total operating expenses $307,264 80.5% $270,178 81.0%
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
Three Months Ended Three Months Ended
September 30, 2007 September 30, 2006
Average Average
Revenue Revenue
Freight Per Freight Per
Commodity Group Revenues Carloads Carload Revenues Carloads Carload
Pulp & Paper $17,244 29,712 $580 $17,524 34,421 $509
Coal, Coke & Ores 15,551 52,307 297 15,053 51,796 291
Farm & Food Products 9,239 18,793 492 8,555 23,832 359
Lumber & Forest
Products 9,151 21,519 425 8,485 21,328 398
Metals 8,721 18,796 464 9,142 21,355 428
Minerals & Stone 8,426 32,494 259 7,392 30,473 243
Chemicals-Plastics 6,675 10,320 647 6,400 10,848 590
Petroleum Products 3,755 5,982 628 3,138 5,697 551
Autos & Auto Parts 1,553 2,990 519 1,526 2,954 517
Intermodal 295 580 509 455 1,103 413
Other 2,563 11,367 225 2,973 14,354 207
Totals $83,173 204,860 406 $80,643 218,161 370
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
Nine Months Ended Nine Months Ended
September 30, 2007 September 30, 2006
Average Average
Revenue Revenue
Freight Per Freight Per
Commodity Group Revenues Carloads Carload Revenues Carloads Carload
Pulp & Paper $51,749 92,604 $559 $51,976 104,267 $498
Coal, Coke & Ores 44,303 143,850 308 47,075 150,826 312
Lumber & Forest
Products 27,704 65,354 424 27,288 70,574 387
Farm & Food
Products 27,561 57,424 480 19,206 54,236 354
Metals 27,456 59,857 459 27,340 64,328 425
Minerals & Stone 23,269 92,173 252 19,196 67,993 282
Chemicals-Plastics 19,297 31,037 622 18,825 32,310 583
Petroleum Products 11,751 18,715 628 10,426 18,150 574
Autos & Auto Parts 5,317 10,552 504 4,935 10,120 488
Intermodal 856 1,680 510 1,310 3,058 428
Other 7,784 36,164 215 8,585 41,929 205
Totals $247,047 609,410 405 $236,162 617,791 382
Reconciliation of non-GAAP Financial Measures This earnings release contains free cash flow and adjusted operating ratios, which are "non-GAAP financial measures" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled these non-GAAP financial measures to their most directly comparable U.S. GAAP measures. Operating Ratio Description and Discussion Management views the Operating Ratio, calculated as total Operating Expenses divided by total Revenues, as an important measure of GWI's operating performance. Because management believes it is useful for investors in assessing GWI's financial results compared to the same period in the prior year, Adjusted Operating Ratios for the three months ended September 30, 2007, are presented excluding the impact of gains from the disposition of assets. The Adjusted Operating Ratios for the three months ended September 30, 2006, are presented excluding the effects of an expense associated with a legal settlement. The Adjusted Operating Ratios presented excluding these effects are not intended to represent, and should not be considered more meaningful than, or as an alternative to, the Operating Ratios calculated using amounts determined in accordance with GAAP.
The following table sets forth a reconciliation of GWI's Operating Ratio
calculated using amounts determined in accordance with GAAP to the Adjusted
Operating Ratios described above for the three months ended September 30, 2007
and 2006 ($ in millions):
For the Three Months Ended September 30, 2007
Total
Total Operating Operating
Revenues Expenses Ratio
As Reported $131.2 $101.6 77.4%
Gain on Disposition of Assets - 5.5
Excluding Above Items $131.2 $107.1 81.6%
For the Three Months Ended September 30, 2006
Total
Total Operating Operating
Revenues Expenses Ratio
As Reported $121.0 $97.9 80.9%
Legal Settlement Expense - (1.1)
Excluding Above Items $121.0 $96.8 80.0%
Free Cash Flow Description and Discussion Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities from Continuing Operations less Net Cash Used in/Provided by Investing Activities from Continuing Operations, excluding the Cost of Acquisitions/Proceeds from Divestitures and directly related tax effects. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with GAAP. The following table sets forth a reconciliation of GWI's Net Cash Provided by Operating Activities from Continuing Operations to GWI's Free
Cash Flow ($ in millions):
Nine Months Ended
September 30,
2007 2006
Net cash provided by operating activities
from continuing operations $5.6 $64.0
Net cash (used in) provided by investing
activities from continuing operations (31.6) 255.8
Proceeds from divestitures/cash used for
acquisitions - (285.6)
Australian taxes on ARG Sale 95.6 -
Free cash flow $69.6 $34.2
SOURCE Genesee & Wyoming Inc. |
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| "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Genesee & Wyoming's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. |