Type Genesee & Wyoming Inc. Dahlman Rose & Co. 1 st Annual Global Transportation Conference September 11, 2008
Forward-looking Statements This presentation 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, 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
Agenda 1. Overview 2. Management Priorities 3. Current Trends 4. Acquisitions 5. Financial Overview 2 2
Overview 3
Overview Listed on NYSE (GWR): Current market capitalization of approximately $1.5 billion Five Year Earnings Per Share CAGR of 26% from continuing operations LTM (1) Revenues of $559 million Core Free Cash Flow of approximately $80 million (2) Active acquisition market and strong balance sheet 4 (1) Last Twelve Months Ended June 30, 2008 (2) Core free cash flow is a non-gaap measure and is reconciled to its most comparable GAAP measure, operating cash flow. Reconciliation of non-gaap financial measures is posted in the Investors section of www.gwrr.com. 4
52 railroads organized in nine operating regions 5 5
Recent Acquisition Activity April 7 Rotterdam Rail Feeding ($22.5 million + $2.4 million contingent) Last-mile rail service Extends GWI port franchise May 30 CAGY Industries Inc. ($74.4 million + $18.6 million contingent) 3 short lines at center of GWI s Southern Region Diversified customer base; New electric arc furnace August 4 Announced Ohio Central Acquisition ($219.0 million + $25.0 million contingent) 9 short lines adjacent to GWI s NY/PA Region Diversified customer base; Coal, MSW and Steel 6 6
Management Priorities 7
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GWI Management Priorities 1. Continuous Safety Improvement 2. Service and Customer Focus 3. Efficient Use of Capital 4. Regional Autonomy Combined with Centralized Support 9
2008 Injury Frequency Rate We are a safety leader in the rail industry... 0 Injuries 1 2 3 4 Genesee & 1.42* 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) 2.8 FRA Group 3 (U.S. short line railroads) 4.2 10 * GWI results through August; all others through June Rate per 200,000 man hours worked 10
Overall Satisfaction with Genesee & Wyoming vs. Other Transportation Service Providers Overall Satisfaction w/ Genesee & Wyoming (n = 300) 7.42 Overall Satisfaction w/ Trucking Industry (n = 281) 7.12 Overall Satisfaction w/ Railroad Industry (n = 298) 5.95 11 0 1 2 3 4 5 6 7 8 Satisfaction (1-10 scale)
Efficient Use of Capital 1. Six Year Anniversary of GVA All executive compensation is linked to GVA (and safety) Asset intensive industry GWI is built on thousands of good capital decisions compounding effect 2. Efficient Investment in Acquisitions 12 3. Efficient Investment in Operations Fit for purpose Careful attention to growth capital Public private partnerships
Regional Autonomy Combined with Centralized Support 1. Focused Regional Marketing Local Service, including small customers Revenue surge, after privatizations or Class I spin-offs 2. Lower Operating Costs Local accountability Lean shortline ethic and flexible union work rules 3. Efficient use of Capital GVA discipline Corporate guidance on major expenditures 13 4. Continuous Safety Improvement Tone at the top Local, relentless
Current Trends 14 14
Volume Trends at GWI 1. Stability in Core Commodities Coal, Salt, Iron Ore and Ports Weak U.S. Dollar Benefits Exports (Industrials, Logs) 2. Weak Volumes in Certain Commodities Lumber / Paper / Closed Coal Mine Farm and Food Products (Australia) 3. Growth From New Customers Ethanol, Iron Ore, Wood Pellets, Intermodal 15 15
Diverse Freight Revenue Base Approximately 62% of Total Revenues LTM 6/30/2008 FREIGHT MIX Minerals & Stone 11% Chemical- Plastics 8% Petroleum Products Other 5% 4% Pulp & Paper 21% Lumber & Forest Products 10% Farm & Food Products 12% Metals 11% Coal, Coke & Ores 18% 16 16
LTM (1) Non-Freight Revenues Approximately 38% of Total Revenues 100% 75% Fuel Sales 17% Other 18% Cook, Australia ( Gas Station for Australian transcontinental trains) Crewing and equipment leasing in Australia Transload and drayage services 50% Freight- Related 25% Demurrage, storage, car repair & car hire 25% Switching 40% 9 port railroads (7 others also served) 28 industrial switching operations Contract coal loading at 14 mines (PRB) 0% 17 (1) Last Twelve Months Ended June 30, 2008 (not pro forma for acquistions). 17
Pricing Trends in U.S. & Canada YOY Change in Average Revenue Per Car (%) 10% 9% 8% 7% 6% 5% GWI Class 1s 4% 3% 2005 2006 2007 2008 Source: J.P. Morgan & Company data (BNI, UP, CSX, NS, CN, CP) Excludes impact of fuel surcharges in 2005-07 and mix; 2008 C$ normalized to 2007 levels for GWI 18 18
Acquisitions 19 19
Acquisition Environment 32 Since 1985 Rail Lines of Industrial Companies (e.g., Georgia-Pacific) International Opportunities (e.g., Netherlands) Natural Resource Development Projects Class I Branch Lines (e.g., First Coast Railroad) Other Regional Railroads (e.g., CAGY) 20 20
Rotterdam Rail Feeding Shunting Contracts Port of Rotterdam 21 21
CAGY Industries 22 22
Ohio Central Railroad 23 23
Financial Overview 24 24
Revenues $500 23.9% CAGR $450.7 $559.2 $400 $350.4 $300 $270.5 $200 $213.2 $100 ($ in Millions) 25 25 $0 2003 2004 2005 2006 LTM (1) (1) Last Twelve Months Ended June 30, 2008
Operating Income $100 26.9% CAGR $75 $69.4 $81.7 $76.6* $103.1 $93.8* } Gains on Asset Sales $50 $25 $32.3 $32.1* $46.1 $66.2* ($ in Millions) $0 2003 2004 2005 2006 LTM Operating Ratio 84.9% 83.0% 80.2% 81.9% 81.6% Operating Ratio Ex.Gains 85.0% 83.0% 81.1% 83.0% 83.2% * Operating income for each period has been adjusted for net gains on the sale of assets. Operating income for 2006 26 has also been adjusted for a $1.9 million gain on insurance recovery. 26
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** $1.79** $1.50 24.4% CAGR $1.21 $1.51* $1.71* $1.00 $0.50 $0.64 $0.88 27 27 $0 2003 2004 2005 2006 LTM * Adjusted Earnings per share from Continuing Operations is a non-gaap financial measure. 2006 adjustments exclude the ARG Sale and Bolivia write downs. LTM 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 www.gwrr.com. ** Reported.
Strong Balance Sheet $ in millions Cash & Equivalents June 30, 2008 $ 40.2 Debt: 4.85% Senior Notes due 2011 5.36% Senior Notes due 2015 Floating Rate Senior Notes due 2012 Other Long Term Debt TOTAL LONG TERM DEBT Stockholders Equity TOTAL CAPITALIZATION Total Debt/Total Capitalization Net Debt/Total Capitalization $ 75.0 100.0 25.0 137.6 $337.6 $474.2 $811.8 41.6% 36.6% 28 28
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