Greg Pauline, Genesee and Wyoming: Win WIN
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Transcript of Greg Pauline, Genesee and Wyoming: Win WIN
1 Genesee & Wyoming Inc.
Genesee & Wyoming Australia
26th November, 2013
2 Genesee & Wyoming Inc.
Agenda
1. Overview of G&W Inc.
2. Arrium and G&W
Win Win…
3. Our rail services to Arrium
3 Genesee & Wyoming Inc.
Genesee & Wyoming Inc. 1899
The original
Genesee & Wyoming Railroad
14-miles in upstate NY
Serving one customer
4 Genesee & Wyoming Inc.
G&W Board of Directors 1899
5 Genesee & Wyoming Inc.
Early G&W Power
6 Genesee & Wyoming Inc.
New Power
4 x 4,300HP Locomotives in Remote
Distributed Power with
Electronically Controlled Pneumatic (ECP)
Braking
160 Hoppers : 2 Crew Vans : 2 Inline Fuel
tankers
12,956 Gross train tonnes : 8,960 Net
product tonnes
7 Genesee & Wyoming Inc.
POST ACQUISITION SUMMARY
1. Combined 1st & 2nd largest short line operators
2. Duplicative overhead eliminated
3. Expansion of existing G&W operating regions
4. Powerful commercial platform in 39 U.S. states and 4 Canadian provinces
8 Genesee & Wyoming Inc.
Genesee & Wyoming 2013
9 Genesee & Wyoming Inc.
• Own 111 railroads and employ 4,600 people serving 2,000 customers
• Operate over 15,000 track miles with ~1,000 locomotives
• Transport ~1.8 million annual carloads
Overview
10 Genesee & Wyoming Inc.
G&W Annual Carloads by Class I
345,000
299,000
160,500
54,000
53,500
235,000
366,500
11 Genesee & Wyoming Inc.
Illustrative Partnership with Class I: G&W now handles 11% of CSX Carloads
12 Genesee & Wyoming Inc.
International Railroad Business
U.S. 70% (8 Regions)
Australia
20%
Canada
9%
Europe 1%
Revenues by Geography
Revenues ~$1.6 billion
13 Genesee & Wyoming Inc.
Cultural Changes in Safety
Injury Frequency Rate per 200,000 man-hours
14 Genesee & Wyoming Inc.
Industry-Leading Safety Injury Frequency Rate per 200,000 man-hours G&W through September; others through July
3.12.9
2.0
1.1 1.0 1.0 1.0 0.9 0.8
15 Genesee & Wyoming Inc.
Only US Publicly Traded Short Line
(market cap in billions)
16 Genesee & Wyoming Inc.
Traditional Class I spinoffs “First & Last Mile” to the Customer
17 Genesee & Wyoming Inc.
Genesee & Wyoming Australia
Overview
• Australia is G&W’s largest and fastest growing region, 20% of total
• G&W views Australia as a key driver of its long-term growth
Safety & Accreditation
• 0.47 reportable injury rate in 2012 (2 injuries); YTD 2013 rate is 1.4 (5 injuries)
• Accredited rail operator in six states (all but Tasmania)
Assets & Operations
• 3,500+ km of owned track (2,200 km Tarcoola to Darwin)
• 450+ employees, 100 locomotives and 1,000 wagons
• 40+ daily train starts across South Australia, the Northern Territory and Victoria
18 Genesee & Wyoming Inc.
Genesee & Wyoming Australia
• 0.47 reportable injury rate in 2012; YTD 2013 rate is 1.4 (5 injuries)
• 3,500+ km of owned track (2,200 km Tarcoola to Darwin)
• Accredited rail operator in six states (all but Tasmania)
• 450+ employees
• 100 locomotives and 1,000 wagons
• 40+ daily train starts across South Australia, the Northern Territory and Victoria
Key Customers / Commodities
• Arrium / Iron Ore (12.8M tonnes)
• Viterra / Grain (2.4M tons)
• Gypsum Resources / Gypsum (2.0M tonnes)
• Territory Resources / Iron Ore (1.5M tonnes)
• OM Holdings / Manganese (0.9M tonnes)
• OZ Minerals / Copper (0.25M tonnes)
• Adelaide-Darwin / Intermodal (1.0M tonnes)
8.9K tons/km
1.4K tons/km
0.4K tons/km
0.7K tons/km
28.6K tons/km
2.2K tons/km 45K tons/km
8.3K tons/km
Traffic Density/km
19 Genesee & Wyoming Inc.
Arrium and GWA
20 Genesee & Wyoming Inc.
Financial performance since deal completed
- real test in the spirit of “win win’’…
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Share Price for Year ending 20 November 2013
21 Genesee & Wyoming Inc.
Optimising Capacity & Operating Performance
22 Genesee & Wyoming Inc.
Our Rail Services to Arrium
23 Genesee & Wyoming Inc.
G&W Service to Mining
Industry: Australia
GWA provides complete rail service
to Arrium’s (ASX: ARI) South Australia
operations (formerly OneSteel)
• GWA operate and maintain the ARI owned
155km rail network:
GWA hauls ~9 million tonnes from
mines to ARI’s port (Whyalla) and steel
mill
GWA maintains all track and
equipment
• GWA hauls ~3 million tonnes for ARI from
ARI’s mine at Peculiar Knob to Whyalla
• GWA hauls ~13 million tonnes of iron ore
for ARI annually and has invested more
than $130 million in capital to support this
business over the last three years
(rolling stock and maintenance facilities)
ARI owned rail
network Whyalla
24 Genesee & Wyoming Inc.
Arrium Train Configuration – State of the Art
• 4 X 4,300 hp AC locomotives operating with distributed power
• 166 covered wagons with electronically controlled brakes
• In line fueling – no requirement to stop to refuel on route
• Crew van allows for continuous operation
• 15,000 gross tonnes – largest trains outside of Pilbara
• Initial service through Port of Darwin
25 Genesee & Wyoming Inc.
Question and Answer
26 Genesee & Wyoming Inc.