Second Quarter 2015 Earnings Call August 3, 2015 Genesee & Wyoming Inc. 1
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 from those expressed or forecasted, including, but not limited to, risks related to the operation of our railroads, severe weather conditions and other natural occurrences, economic and market conditions, customer demand, railroad network congestion, derailments, currency fluctuations, changes in commodity prices, increased competition in the relevant market, and others, many of which are beyond our control. 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. Forward-looking statements speak only as of the date of this presentation or the date they were made. Genesee & Wyoming Inc. does not undertake, and expressly disclaims, any duty to update any forward-looking statement contained in this presentation whether as a result of new information, future events or otherwise, except as required by law. Genesee & Wyoming Inc. 2
G&W Safety Performance – 2015 Injury Frequency Rate per 200,000 man-hours G&W through June; others through April 3.14 2.37 1.86 1.71 1.05 0.98 0.88 0.80 0.76 0.54 FRA FRA KCS Freightliner NS Class I Avg UP BNSF CSX G&W * Group 2 Group 3 Railroads * Excludes Freightliner Genesee & Wyoming Inc. 3
Q2 2015 Results Versus Q2 2014 Adjusted Diluted EPS consistent with revised guidance of $0.90 - $0.94 (1) • Adjusted Diluted EPS of $0.93 decreased 17% (or 13%, excluding FX) (1) • ($ per share) Q2 2015 Q2 2014 Variance % Ex-FX Diluted EPS $ 0.92 $ 1.07 $ (0.15) Adjustments: Business Development and Related Costs $ 0.01 $ 0.02 $ (0.01) Net Gain on Sale of Assets (0.01) (0.02) 0.01 Credit Facility Refinancing-Related Costs - 0.05 (0.05) Total Adjustments $ - $ 0.05 $ (0.05) Adjuted Diluted EPS (1) $ 0.93 $ 1.12 $ (0.19) (17.0%) (13.1%) (1) Adjusted Diluted Earnings Per Common Share (EPS) is a non-GAAP financial measure. Reconciliations of non- GAAP financial measures accompany this presentation. Genesee & Wyoming Inc. 4
Q2 2015 Results Versus Original Guidance Original Q2 2015 Q2 2015 Guidance Variance to ($ in millions, except per share amounts) Actual (April 2015) Mid-Point Operating Revenues $ 542.2 $565 - $580 $ (30.3) Income from Operations $ 99.5 Business Development and Related Costs 0.8 0.8 Net Gain on Sale of Assets (0.5) (0.5) Adjusted Income from Operations* $ 99.8 $114 - $118 $ (16.2) Adjusted Operating Ratio* 81.6% ~80% (160 bps) Adjusted Diluted EPS* $ 0.93 $1.05 - $1.10 $ (0.15) Adjusted Variance to Mid-Point Operating Income from Adjusted ($ in millions, except per share amounts) Revenues Operations* EPS* Notes Coal, Steel, Grain, North America $ (19.0) $ (14.9) $ (0.14) Frac Sand U.K./Europe (8.1) (2.3) (0.02) Primarily U.K. Coal Australia (3.2) 1.0 0.01 Cost controls Variance to Original Outlook $ (30.3) $ (16.2) $ (0.15) * Adjusted Income from Operations, Adjusted Operating Ratio and Adjusted Diluted EPS are non-GAAP financial measures. Reconciliations of non-GAAP financial measures accompany this presentation. Genesee & Wyoming Inc. 5
North America: Q2 2015 Overview Q2 2015 Q2 2014 Same Railroad (US$ in millions) Actual Actual % Change (ex. FX) Operating Revenues $ 311.0 $ 325.7 (4.5%) (8.2%) Income from Operations $ 76.6 $ 85.4 (10.3%) Operating Ratio 75.4% 73.8% (160 bps) North American operating revenues included $15.2 million from RCP&E and Pinsly Arkansas • • Same railroad operating revenues (ex. FX) declined 8.2% which included: – 31% decline in coal, primarily due to competition from low priced natural gas – 22% decline in metals (steel and scrap), primarily due to competition from imported steel • Cost reductions, including locomotives removed from service, headcount reductions and G&A cuts have been implemented and are ongoing Genesee & Wyoming Inc. 6
Australia: Q2 2015 Overview Q2 2015 Q2 2014 % Change Same Railroad (US$ in millions) Actual Actual % Change (ex. FX) (ex. FX) Operating Revenues $ 66.8 $ 83.1 (19.6%) (3.7%) (20.4%) Income from Operations $ 15.1 $ 25.3 (40.3%) (28.3%) Operating Ratio 77.4% 69.5% (790 bps) • Australia operating revenues included $11.6 million from Freightliner Australia (in Freight- Related revenues) • Same railroad Australia operating revenues (ex. FX) declined 20.4%, primarily due to lower iron ore shipments (3 fewer mines) • Australia income from operations down 40.3%, or 28.3% ex. FX Genesee & Wyoming Inc. 7
U.K./Europe: Q2 2015 Overview Q2 2015 Q2 2014 (US$ in millions) Actual Actual % Change Operating Revenues $ 164.4 $ 5.7 NM (1) Income from Operations $ 7.7 $ (0.6) NM (1) Operating Ratio 95.3% 110.7% NM • New segment reporting for U.K./Europe (details follow) • U.K. Intermodal and Infrastructure services on plan • U.K. Coal expected to remain relatively low until Q4 2015/Q1 2016 due to slow stockpile drawdown following new carbon tax on April 1, 2015 – Expect increases in coal shipments in autumn/winter due to higher electricity demand • Continental Europe businesses working closely together (1) In 2014 includes significant start-up costs for new long term contract; expected 90% - 95% operating ratio Genesee & Wyoming Inc. 8
Key Priorities for Second Half 2015 1. Safety 2. Cost Reductions in North America and Australia 3. Successful Freightliner Integration in U.K./Europe/Australia 4. Short Line Tax Credit Extension 5. Acquisitions and Investments – Evaluating opportunities in North America and abroad – Near term investments will take into consideration higher than expected leverage (flat at 3.5x Debt/Adj. EBITDA* at year end 2015) * Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a non-GAAP financial measure. Reconciliations of non-GAAP financial measures accompany this presentation. Genesee & Wyoming Inc. 9
Updated Revenue Presentation • Non-freight revenues is now divided into two categories: Freight-Related and All other Segment North America U.K./Europe Australia Freight revenues Traditional carload Bulk commodities and Bulk commodities business (includes Intermodal (includes and Intermodal fuel surcharges) fuel surcharges) (includes fuel surcharges) Freight-Related Switching, car hire, Switching, traction Switching, revenues ancillary freight service/hook and pull contracted services, charges, trackage (locomotive + drivers), trackage rights, rights, contracted infrastructure services crewing services Real estate, 3 rd party Real estate, 3 rd party All other revenues Easements, real estate, 3 rd party car car and locomotive car and locomotive and locomotive repair, repair repair passenger related revenues Genesee & Wyoming Inc. 10
Introduction to the U.K./Europe Segment Q2 2015 % of ($ in millions) Actual Revenue Notes Operating revenues: $ 98.0 59.6% Intermodal 70%; Minerals & Stone 18%; Coal 9% Freight revenues 61.0 37.1% Switching; Traction service; Infrastructure Freight-related revenues 5.4 3.3% All other revenues 164.4 100.0% Total operating revenues Operating expenses: Labor and benefits $ 46.2 28.1% Equipment rents 23.0 14.0% Leased locomotives and freight cars Purchased services Contract drivers/traction in Europe; Port/terminal handling 35.2 21.4% & trucking in U.K. Depreciation and amortization 5.7 3.5% Diesel fuel used in train operations 11.9 7.2% Electricity used in train operations 5.0 3.0% New category for U.K. and Continental Europe Casualties and insurance 1.5 0.9% Materials 8.5 5.2% Trackage rights 12.5 7.6% Track access fees Net gain on the sale of assets - 0.0% Other expenses 7.2 4.4% Total operating expenses $ 156.7 95.3% Income from Operations $ 7.7 4.7% Genesee & Wyoming Inc. 11
North American Operations Operating Revenues: Q2 2015 vs. Q2 2014 ($ millions) ($14.7) (4.5%) Genesee & Wyoming Inc. 12
North American Operations Same Railroad Carloads: Q2 2015 vs. Q2 2014 Commodity Change % Comment Agricultural Products (5,727) (11%) Timing / Grain Market Conditions Autos & Auto Parts (519) (7%) Chemicals & Plastics 523 1% Coal & Coke (25,969) (29%) Steam Coal Food & Kindred Products (994) (6%) Timing Lumber & Forest Products (1,880) (5%) West Coast Housing Market, Weather Metallic Ores 774 15% Copper Metals (14,051) (29%) Steel Minerals & Stone (1,779) (4%) Frac sand Petroleum Products (1,166) (5%) Lower Crude Oil, Higher LPGs/NGLs Pulp & Paper 1,740 4% Waste 557 6% Other (8,396) (33%) Class I Overhead Traffic Total Carloads (56,887) (13%) Genesee & Wyoming Inc. 13
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