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Genesee & Wyoming (GWR) Reports 11% Drop in December Carloads

January 15, 2013 6:32 AM EST Send to a Friend
Genesee & Wyoming Inc. (GWI) (NYSE: GWR) today reported traffic volumes for December 2012 and the fourth quarter of 2012.

On October 1, 2012, GWI acquired RailAmerica Inc. and immediately following the closing of the acquisition, control of RailAmerica was placed into a voting trust until the U.S. Surface Transportation Board (STB) issued its decision on GWI’s application to control RailAmerica's railroads. The STB issued a final decision that allowed GWI to control RailAmerica’s railroads on December 28, 2012 and the voting trust that controlled RailAmerica was dissolved on that date.

For the fourth quarter of 2012, GWI accounted for its ownership of RailAmerica under the equity method of accounting and RailAmerica reported its carloadings independent of those of GWI. RailAmerica’s carload press release can be found on www.railamerica.com. GWI will report consolidated traffic volumes, including carloads from the RailAmerica railroads, beginning with the press release for January 2013 traffic.

GWI’s traffic in December 2012 was 74,529 carloads, a decrease of 7,480 carloads, or 9.1 percent, compared with December 2011. GWI’s traffic in the fourth quarter of 2012 was 229,818 carloads, a decrease of 16,976 carloads, or 6.9 percent, compared to the fourth quarter of 2011.

Excluding 169 carloads from the Hilton & Albany Railroad, Inc. (HAL), which commenced operations on January 1, 2012, and 1,336 carloads from the Columbus & Chattahoochee Railroad, Inc. (CCH), which commenced operations on July 1, 2012, same-railroad traffic in December 2012 decreased 8,985 carloads, or 11.0 percent, compared with December 2011. Coal & coke traffic decreased 5,793 carloads primarily due to reduced shipments in GWI’s Illinois, Mountain West and Ohio Regions. The decrease in coal shipments was largely due to timing of shipments in GWI’s Illinois Region and a planned maintenance outage at a coal utility in GWI’s Ohio Region. Farm & food products traffic decreased 2,593 carloads primarily due to reduced shipments in GWI’s Australia Region as a result of an accelerated shipping schedule earlier in 2012, as well as a mechanical failure at an export grain terminal in Adelaide, South Australia. The export grain terminal reopened in January 2013. GWI’s other commodity group traffic decreased 2,539 carloads in December 2012 primarily due to the cessation of overhead coal shipments in GWI’s Ohio Region. Minerals & stone traffic decreased 1,627 carloads primarily due to reduced salt shipments in GWI’s New York/Pennsylvania Region resulting from the mild 2011/2012 winter weather. These decreases were partially offset by a 1,729 carload increase in metallic ores traffic primarily due to a new iron ore contract in GWI’s Australia Region. All remaining traffic increased by a net 1,838 carloads.

Excluding 504 carloads from HAL and 3,993 carloads from CCH, same-railroad traffic in the fourth quarter of 2012 decreased 21,473 carloads, or 8.7 percent, compared with the fourth quarter of 2011. The traffic decrease was principally due to decreases of 8,920 carloads of coal & coke traffic (primarily GWI’s Illinois and Ohio Regions), 8,763 carloads of farm & food products traffic (primarily grain in GWI’s Australia Region), 8,741 carloads of other commodity group traffic (primarily overhead coal in GWI’s Ohio Region) and 3,225 carloads of minerals & stone traffic (primarily salt in GWI’s New York/Pennsylvania Region). These declines were partially offset by increases of 3,130 carloads of metallic ores traffic (primarily GWI’s Australia Region) and 3,125 carloads of lumber & forest products traffic (primarily GWI’s Oregon Region). All remaining traffic increased by a net 1,921 carloads.

Carload Reporting for Metallic Ores Traffic

Effective January 1, 2012, a portion of GWI’s metallic ores commodity group includes intermodal containers as a result of a change in rail logistics and equipment for a customer in GWI’s Australia Region. The impact of this change increased traffic by 505 carloads in December 2012 and 1,497 carloads in the fourth quarter of 2012.

Other

Historically, GWI has found that carload information may be indicative of freight revenues on its railroads, but may not be indicative of total revenues, operating expenses, operating income or net income. Car movements related to railcar switching, including activities at port terminals, are excluded from our carload information as the resulting revenues are classified as non-freight.




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