GENESEE & WYOMING INC - FORM 8-K - EX-99.1

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8-K - FORM 8-K - GENESEE & WYOMING INC	d103222d8k.htm

Exhibit 99.1

Genesee & Wyoming Provides Fourth Quarter 2015 Business Update; Reports Traffic for November 2015

DARIEN, Conn. — (BUSINESS WIRE) — Dec. 11, 2015 — Genesee & Wyoming Inc. (G&W) (NYSE: GWR) today reported traffic volumes for November 2015.

Fourth Quarter 2015 Business Update

In the fourth quarter of 2015 through November, G&W’s shipments have been weaker than expected. In G&W’s North American Operations, shipments of steam coal, agricultural products and metals are below expectations by approximately 8,000, 3,000 and 3,000 carloads, respectively. In G&W’s U.K./European Operations, steam coal shipments are approximately 4,000 carloads below expectations. In G&W’s Australian Operations, metallic ores shipments are approximately 1,000 carloads below expectations largely due to the recent suspension of rail shipments from a customer manganese mine. As a result, G&W currently expects its consolidated earnings per diluted share to be approximately $0.10 below its prior guidance of $0.90 to $0.95 provided on October 30, 2015.

November 2015 Traffic

G&W’s traffic in November 2015 was 239,558 carloads, an increase of 78,889 carloads, or 49.1%, compared with November 2014. G&W’s same-railroad traffic in November 2015 was 138,348 carloads, a decrease of 22,321 carloads, or 13.9%, compared with November 2014.

The table below sets forth summary total carloads by segment for November 2015 and November 2014.


Segment	November 2015		November 2014		Change			% Change
North American Operations		124,220		142,374		(18,154	)		(12.8	%)
Australian Operations		16,189		18,295		(2,106	)		(11.5	%)
U.K./European Operations⁽¹⁾		99,149		n/a		n/a			n/a

Total G&W Operations		239,558		160,669		78,889			49.1	%

(1)	Operations from the Freightliner Group acquired on March 25, 2015

November 2015 Highlights by Segment

•

North American Operations: Traffic in November 2015 was 124,220 carloads, a decrease of 12.8% compared with November 2014. On a same-railroad basis, traffic declined 20,215 carloads, or 14.2%. The decrease was primarily due to reduced shipments of coal & coke, metals and overhead Class 1 traffic, partially offset by increased shipments of petroleum products.

•

Australian Operations: Traffic in November 2015 was 16,189 carloads, a decrease of 11.5% compared with November 2014. The decrease was primarily due to reduced metallic ores shipments from previously announced closures of customer iron ore mines and a recent suspension of rail shipments from a customer manganese mine partially offset by increased shipments of agricultural products and mineral & stone traffic.

•

U.K./European Operations: Traffic was 99,149 carloads in November 2015. Traffic in November 2015 was led by intermodal traffic in the U.K. and continental Europe as well as minerals & stone traffic in Poland and the U.K.

The table below sets forth North American Operations carload information for November 2015 and November 2014 by commodity group.


North American Operations:	November 2015		November 2014		Change			% Change
Agricultural Products		16,863		17,835		(972	)		(5.4	%)
Autos & Auto Parts		1,974		3,111		(1,137	)		(36.5	%)
Chemicals & Plastics		14,454		13,229		1,225			9.3	%
Coal & Coke		17,004		30,912		(13,908	)		(45.0	%)
Food & Kindred Products		4,753		4,612		141			3.1	%
Intermodal		—		151		(151	)		(100.0	%)
Lumber & Forest Products		10,839		10,191		648			6.4	%
Metallic Ores		1,943		1,702		241			14.2	%
Metals		9,541		13,288		(3,747	)		(28.2	%)
Minerals & Stone		15,509		15,368		141			0.9	%
Petroleum Products		8,928		7,327		1,601			21.9	%
Pulp & Paper		14,306		13,930		376			2.7	%
Waste		3,275		3,145		130			4.1	%
Other		4,831		7,573		(2,742	)		(36.2	%)

Total carloads		124,220		142,374		(18,154	)		(12.8	%)

Carloads from New Railroads⁽¹⁾		2,061
Same-railroad carloads		122,159		142,374		(20,215	)		(14.2	%)

(1)

Total carloads from North American rail operations commenced or acquired by G&W in the last 12 months, including the Arkansas Midland Railroad, the Prescott & Northwestern Railroad and the Warren & Saline River Railroad. These railroads contributed 884 carloads of minerals & stone traffic, 429 carloads of lumber & forest products traffic, 362 carloads of chemicals & plastics traffic and 386 carloads from all other commodities.

The following highlights relate to North American same-railroad traffic, excluding traffic from the Arkansas Midland Railroad, the Prescott & Northwestern Railroad and the Warren & Saline River Railroad, which were acquired on January 5, 2015.

•

North American Operations traffic decreased 20,215 carloads, or 14.2%, primarily due to reduced shipments of coal & coke, metals and overhead Class 1 traffic, partially offset by increased shipments of petroleum products.

•

Coal & coke traffic decreased 13,908 carloads, or 45.0%, primarily due to weaker than expected shipments in G&W’s Midwest, Central, Ohio Valley and Mountain West regions.

•

Metals traffic decreased 3,794 carloads, or 28.6%, primarily due to weaker than expected shipments in G&W’s Southern, Ohio Valley, Coastal and Northeast regions.

•

G&W’s Other commodity group traffic decreased 2,742 carloads, or 36.2%, primarily due to decreased overhead Class 1 shipments.

•

Petroleum products traffic increased 1,568 carloads, or 21.4%, primarily due to increased shipments in G&W’s Ohio Valley Region.

•

All remaining traffic decreased by a net 1,339 carloads.

The table below sets forth Australian Operations carload information for November 2015 and November 2014 by commodity group.


Australian Operations:	November 2015		November 2014		Change			% Change
Agricultural Products		4,570		3,068		1,502			49.0	%
Intermodal		5,153		5,558		(405	)		(7.3	%)
Metallic Ores		925		5,129		(4,204	)		(82.0	%)
Minerals & Stone		5,514		4,514		1,000			22.2	%
Petroleum Products		27		26		1			3.8	%

Total carloads		16,189		18,295		(2,106	)		(11.5	%)

The decrease in Australian Operations traffic was primarily due to reduced metallic ores shipments from previously announced closures of customer iron ore mines and a recent suspension of rail shipments from a customer manganese mine, partially offset by increased shipments of agricultural products and mineral & stone traffic.

The table below sets forth U.K./European Operations carload information for November 2015 by commodity group.


U.K./European Operations:	November 2015
Agricultural Products		37
Coal & Coke		5,447
Intermodal		77,921
Minerals & Stone		14,800
Other		944

Total carloads		99,149

Traffic volumes in the U.K./Europe operating segment include operations from Freightliner. G&W’s existing European operations are not reported as freight revenues and therefore are not included in this traffic report. As a result, there is no traffic information provided for the comparative period in the prior year for this segment.

Fourth Quarter of 2015 Through November Traffic

The table below sets forth summary total carloads by segment for the fourth quarter of 2015 through November and the fourth quarter of 2014 through November.


Segment	QTD Nov 2015		QTD Nov 2014		Change			% Change
North American Operations		261,852		300,608		(38,756	)		(12.9	%)
Australian Operations		29,988		34,826		(4,838	)		(13.9	%)
U.K./European Operations⁽¹⁾		206,002		n/a		n/a			n/a

Total G&W Operations		497,842		335,434		162,408			48.4	%

(1)	Operations from the Freightliner Group acquired on March 25, 2015

The table below sets forth North American Operations carload information for the fourth quarter of 2015 through November and the fourth quarter of 2014 through November by commodity group.


North American Operations:	QTD Nov 2015		QTD Nov 2014		Change			% Change
Agricultural Products		35,953		36,510		(557	)		(1.5	%)
Autos & Auto Parts		3,830		6,510		(2,680	)		(41.2	%)
Chemicals & Plastics		29,546		27,848		1,698			6.1	%
Coal & Coke		36,327		59,742		(23,415	)		(39.2	%)
Food & Kindred Products		10,189		10,527		(338	)		(3.2	%)
Intermodal		23		483		(460	)		(95.2	%)
Lumber & Forest Products		23,101		22,648		453			2.0	%
Metallic Ores		3,882		3,605		277			7.7	%
Metals		19,481		30,251		(10,770	)		(35.6	%)
Minerals & Stone		35,221		35,014		207			0.6	%
Petroleum Products		17,518		16,880		638			3.8	%
Pulp & Paper		28,436		29,182		(746	)		(2.6	%)
Waste		6,919		6,792		127			1.9	%
Other		11,426		14,616		(3,190	)		(21.8	%)

Total carloads		261,852		300,608		(38,756	)		(12.9	%)

Carloads from New Railroads⁽¹⁾		4,485
Same-railroad carloads		257,367		300,608		(43,241	)		(14.4	%)

(1)

Total carloads from North American rail operations commenced or acquired by G&W in the last 12 months, including the Arkansas Midland Railroad, the Prescott & Northwestern Railroad and the Warren & Saline River Railroad. These railroads contributed 1,962 carloads of minerals & stone traffic, 927 carloads of lumber & forest products traffic, 784 carloads of chemicals & plastics traffic and 812 carloads from all other commodities.

The table below sets forth Australian Operations carload information for the fourth quarter of 2015 through November and the fourth quarter of 2014 through November by commodity group.


Australian Operations:	QTD Nov 2015		QTD Nov 2014		Change			% Change
Agricultural Products		6,196		4,697		1,499			31.9	%
Intermodal		10,220		11,074		(854	)		(7.7	%)
Metallic Ores		2,592		9,988		(7,396	)		(74.0	%)
Minerals & Stone		10,927		9,018		1,909			21.2	%
Petroleum Products		53		49		4			8.2	%

Total carloads		29,988		34,826		(4,838	)		(13.9	%)

The table below sets forth U.K./European Operations carload information for the fourth quarter of 2015 through November by commodity group.


U.K./European Operations:	QTD Nov 2015
Agricultural Products		77
Coal & Coke		10,627
Intermodal		161,016
Minerals & Stone		32,263
Other		2,019

Total carloads		206,002

Other

The term carload represents physical railcars and estimated railcar equivalents of commodities for which G&W is paid on a metric ton or other measure to move freight, as well as intermodal units.

Historically, G&W has found that traffic information may be indicative of freight revenues on its railroads. Freight revenues are revenues for which G&W is paid on a per car, per container or per ton basis to move freight. Activities such as railcar switching, port terminal shunting, traction services and other similar freight-related services are excluded from our traffic information as the resulting revenues are not classified as freight revenue. Traffic information may not be indicative of total operating revenues, operating expenses, income from operations or net income.

G&W’s three reportable segments are summarized as follows:

•

The North American Operations segment is comprised of nine operating regions in the U.S. and Canada. This segment represents approximately 57% of G&W’s total operating revenues and approximately 75% of G&W’s total income from operations.

•

The Australian Operations segment is comprised of G&W’s existing operations in Australia and the newly-acquired Freightliner Australia operations. This segment represents approximately 12% of G&W’s total operating revenues and approximately 14% of G&W’s total income from operations. Revenues from Freightliner’s Australia operations are not reported as freight revenues and therefore are not included in this traffic report.

•

The U.K./European Operations segment is comprised of Freightliner’s operations in the U.K. and continental Europe and G&W’s existing European port shunting operations. This segment represents approximately 31% of G&W’s total operating revenues and approximately 11% of G&W’s total income from operations. G&W’s existing European port shunting operations are not reported as freight revenues and therefore are not included in this traffic report. As a result, there is no traffic information provided for the comparative period in the prior year for this segment.

About G&W

Genesee & Wyoming owns or leases 120 freight railroads worldwide that are organized in 11 operating regions with 7,500 employees and more than 2,500 customers.

•

G&W’s nine North American regions serve 41 U.S. states and four Canadian provinces and include 113 short line and regional freight railroads with more than 13,000 track-miles.

•

G&W’s Australia Region provides rail freight services in New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line.

•

G&W’s U.K./Europe Region is led by Freightliner, the U.K.’s largest rail maritime intermodal operator and second-largest rail freight company. Operations also include heavy-haul in Poland and Germany and cross-border intermodal services connecting Northern European seaports with key industrial regions throughout the continent.

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

For more information, visit gwrr.com.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements regarding future events and the future performance of G&W 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,” “update,” “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, but not limited to, those risks noted in our 2014 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.

SOURCE: Genesee & Wyoming Inc.

Genesee & Wyoming Inc.

Thomas D. Savage, 1-203-202-8900

Vice President – Corporate Development & Treasurer

Web Site: http://www.gwrr.com

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