Type. Genesee & Wyoming Inc. NYSE Euronext & WJB Capital Growth Conference. Timothy J. Gallagher Chief Financial Officer

Transcription

1 Type Genesee & Wyoming Inc. NYSE Euronext & WJB Capital Growth Conference Timothy J. Gallagher Chief Financial Officer

2 Forward-looking Statements This presentation contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. ( the Company ) that involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, economic conditions, customer demand, increased competition in the relevant market and others. The Company refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as the Company 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 discussed during this presentation. Genesee & Wyoming Inc. disclaims any obligation to update the forwardlooking statements contained in this presentation. 1 1

3 Overview GWR is an owner, operator and acquirer of short-line and regional freight railroads Built nine operating regions comprised of 63 railroads Approximately 2,650 employees GWR Worldwide 2 2

4 Highlights Track Record of Disciplined Growth Steady internal growth at regional operations Successful integration of 34 acquisitions since 1985 Operational and Financial Excellence Stable Core Business Industry leading safety Ten-year EPS CAGR of 19.8% from continuing operations Manage business in GVA framework 60% of business less sensitive to economic environment Strong pricing environment Strong Balance Sheet and Liquidity Newly expanded $570 million credit facility $170 million available capacity Strong free cashflow 3 3

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6 Focused Operating Strategy Regional Autonomy Combined with Centralized Support 1. Continuous Safety Improvement Tone at the top and local intensity 2. Focused Regional Service Dedicated local service, including small customers Revenue surge, after privatizations or Class I spin-offs 3. Lower Operating Costs Local accountability Lean shortline ethic and flexible work rules 4. Efficient Use of Capital GVA discipline with goal of maximizing ROIC 5

7 2008 Injury Frequency Rate GWR is a safety leader in the rail industry 0 Injuries Genesee & 1.38* Wyoming Inc. Class I (e.g., Burlington Northern, CSX, Norfolk Southern, Union Pacific) 1.5 FRA Group 2 (Medium railroads, e.g., DM&E, Florida East Coast, Montana Rail Link, NJ Transit) 2.9 FRA Group 3 (U.S. short line railroads) * GWI results through October; all others through August Rate per 200,000 man hours worked 6

8 Diverse Revenue Base LTM Freight Revenue 61% (1) of Total Revenues LTM Non-Freight Revenue 39% (1) of Total Revenues Minerals & Stone 12% Lumber & Forest Products 10% Petroleum Products Chemical- 5% Plastics 8% Farm & Food Products 11% Other 3% Metals 12% Pulp & Paper 21% Coal, Coke & Ores 18% Fuel Sales 17% Other 17% Freight- Related 25% Switching 41% 7 (1) Last Twelve Months Ended September 30,

9 Stable Core Business Less Economically Sensitive (60%) Salt Steam Coal Grain Solid Waste Industrial Switching Economically Sensitive (40%) Paper Lumber Autos Commodity Steel 8 8

10 Drivers of Internal Growth Pricing Trends in U.S. and Canada* Growth Capex ($ millions) YOY Change in Average Revenue Per Car New Business Capital Expenditures $30 $20 $ E Customer Related Business Expansion Capital Australia $12 million for cars and locomotives The Netherlands $9.0 million for locomotives NY/PA - $2 million new siding 9 * Source: JP Morgan, GWI 9

11 Acquisitions 10 10

12 GWR Acquisition History Present Macro Trend Post-Staggers Act Restructuring Increased bidding competition Privatizations and Rail Restructuring Outside U.S. Reduced Bidding Competition in U.S. Rail Renaissance Global Commodities Boom Intense Bidding Competition followed by Global Credit Crisis GWR Opportunities 100% U.S. 100% International 100% U.S. U.S., International and Internal from Q Examples Oregon, NY / PA, L&D, Rail Link Canada, South Australia, Western Australia, Mexico, Bolivia South Buffalo, Utah, Georgia Pacific, Emons, Rail Partners, T&P Maryland Midland, CAGY, RRF, Ohio Central, Georgia SW 11 11

13 Acquisition Strategy Patience and financial discipline Intensive due diligence Five acquisitions in 2008 with EV of nearly US$400 million Rail Lines of Industrial Companies (e.g., Georgia-Pacific) Natural Resource Development Projects 1. October 1, 2008 Georgia Southwestern Acquisition ($16.5 million) 2. October 1, 2008 Ohio Central Acquisition ($234.3 million) International Opportunities (e.g., Holland) Class I Branch Lines (e.g., First Coast Railroad) Other Regional Railroads (e.g., Maryland Midland & GWR) 3. June 2, 2008 CAGY Industries Inc. ($74.4 million + $18.6 million contingent) 4. April Rotterdam Rail Feeding ($22.5 million + $2.4 million contingent) 5. January 1, 2008 Maryland Midland ($30.5 million) 12 12

14 Building a U.S. Regional Rail Business Case Study: Original NY/PA Region Regional Headquarters: Rochester, NY Seven contiguous acquisitions 774 route miles 294 employees Coal, petroleum, chemicals, paper, salt, automotive and steel Approximately $70 million in 2007 revenues Note: Dashed lines indicate trackage rights

15 Ohio Central Acquisition Case Study: New NY/OH/PA Region $234 million purchase price Added Nine Railroads in Ohio and West Pennsylvania Significant municipal solid waste, coal, steel and ethanol Customer and equipment overlap Approximately $130 million in 2007 revenues 14 14

16 Financial Overview 15 15

17 Revenues $600 $ % CAGR $450.7 $516.2 $587.4 $400 $350.4 $300 $200 $213.2 $270.5 $100 ($ in Millions) $ LTM (1) (1) Last Twelve Months Ended September 30, 2008

18 Operating Income $ % CAGR $81.7 $96.8 $90.1* $108.0 $103.0* Gains on Asset Sales $75 $69.4 $76.6* $50 $46.1 $66.2* $25 $32.3 $32.1* ($ in Millions) $ LTM Operating Ratio 84.9% 83.0% 80.2% 81.9% 81.2% 81.6% Operating Ratio Ex.Gains 85.0% 83.0% 81.1% 83.0% 82.5% 82.5% * Operating income for each period has been adjusted for net gains on the sale of assets. Operating income for has also been adjusted for a $1.9 million gain on insurance recovery. 17

19 EPS From Continuing Operations 2006 Significant Items Impact $4.00 $2.00 ~ + ARG Transactions Bolivia Write-Down Net Impact $2.70 (0.14) $2.56 $4.07** $1.77** $1.71 $ % CAGR $1.21 $1.51* $1.68* $1.00 $0.50 $0.64 $ $ LTM * Adjusted Earnings per share from Continuing Operations is a non-gaap financial measure adjustments exclude the ARG Sale and Bolivia write downs adjustments exclude the tax benefit associated with the ARG Sale. Additional information on the reconciliations of non-gaap financial measures presented above is posted in the Investors section of ** Reported.

20 Strong Balance Sheet $ in millions September 30, 2008 Pro Forma New Acquisitions Cash & Equivalents $ 39.5 $ 41.9 Debt: 4.85% Senior Notes 5.36% Senior Notes Floating Rate Senior Notes Other Long Term Debt TOTAL LONG TERM DEBT Stockholders Equity TOTAL CAPITALIZATION Total Debt/Total Capitalization Net Debt/Total Capitalization $ $317.0 $478.2 $ % 34.9% $ $606.1 $478.2 $1, % 52.0% 19 19

21 Summary Track Record of Disciplined Growth History of Operational and Financial Excellence Stable Core Business Strong Balance Sheet and Liquidity 20 20

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